Gas could help unite Egypt and Israel, says Eni's Descalzi

(AGI) Rome, Aug 4 - The Zohr gas field discovered by Eni off Egypt's coast will open new prospects in the Middle East, Africa and Europe, affirmed the CEO of the Italian oil and gas giant, Claudio Descalzi. Speaking with Bloomberg, Mr Descalzi highlighted how Eni's strategy is successfully navigating the group through a period of falling oil prices. He stated the discovery in the Mediterranean means Egypt "will be completely self-sufficient" from an energy point view. "At the end, they'll also export energy. It will create stability in Egypt. They can create cash flow selling gas and promote their own development. Then they can aggregate. They can create a hub with Israel, with Cyprus, in the future with Libya. They can be one of the solutions for European energy security," Mr Descalzi emphasised. Energy could also lead to Israel collaborating with Egypt. "These countries need each other. They can share facilities. They can work together. When energy puts people together, it's very positive. That could be a very positive case for friendship," Mr Descalzi noted. During the interview, Eni's CEO retraced the industrial and strategic choices that made the difference during the period of low oil prices. "Fortunately we had a strategy to own conventional assets, which means a very low cost and very low break-even price. At the moment we have one of the lowest in the industry, because our technical cost is lower than 20 dollars per barrel. And the breakeven is now at 27 dollars per barrel. Last year it was 45 dollars," he stated. "We don't control the price, so we have to work on what we can control. The price of oil dropped about 60 percent to 70 percent, and costs dropped only by between 25 percent and 30 percent. So we have to work on that. If we'd made different choices - complicated projects or tar sands or Arctic projects - life would be quite difficult." The key, Mr Descalzi affirmed, is the type of assets. "We have assets - for example, our natural gas discovery in Egypt, or our discovery in Mozambique that is a giant one, or in Congo - where to drill a well takes three or four weeks. If drilling a well takes two months, three months, four months, the cost is very high. When we have to manage and run a field for 30 to 40 years - I'm talking about Africa - your operating costs play a very important role. So I think that we'll really be focused on cost, on efficiency." (AGI). .