The strategy called the “Dual Exploration Model” is based on a simple principle: while increasing hydrocarbon reserves through exploration, discovery and acquisition of fields, one benefits from the early monetisation obtained through the sale of minority interests to other players, always maintaining control and guidance of the operations that remain with Eni. This approach has been particularly effective in frontier exploration basins where, thanks to our technologies, we often are the first to identify large gas fields, leading the way for other companies.
As well as the cash it generates, the Dual Exploration Model is important for the market recognition of the value of Eni’s exploration assets and corporate profile, which is confirmed each time an acquisition is made by another global player.
In the four years from 2021-2024, we will continue to conduct frontier exploration within areas selected for their high potential in the Middle East, East Africa, South-East Asia and the Gulf of Mexico, and we will apply the Dual Exploration model in the event of substantial success.
We first used the dual exploration model in Mozambique and it was a radical change in our exploration model Today it's an established method, which Eni now applies everywhere. That initial “experiment” went like this: we sold a 20% stake in Area 4 of the recently discovered Mozambique offshore to the China National Petroleum Corporation (CNPC), while retaining 50%. It was the first trial of a new approach aimed at generating liquidity before extraction and sale.
After the first trial in Mozambique, the Dual Exploration Model was also applied in 2016 to Zohr, which, at the time of discovery, was the largest natural gas field in the Mediterranean. In this case, the minority shareholding in Shorouk was sold to BP (10%) and Rosneft (30%). Following the same approach, in March 2018, the sale of a further 10% to Mubadala Petroleum was agreed.
In the meantime, in 2017, the sale to ExxonMobil of an additional indirect 25% interest in Area 4, in the Mozambique offshore field, was completed. Finally, in 2019, Eni and Neptune Energy signed an agreement for the sale by Eni of a 20% stake in the East Sepinggan Offshore area in Indonesia containing the gas discovery of Merakes, where production started in April 2021. This new project takes advantage of the synergies with our existing infrastructure in the Jankrikproject and will contribute to increasing the amount of gas in our production mix, in line with our strategic objectives.
The dual model exploration, as we have seen, makes it possible to reduce investments and long-term financial assets, yet without losing control of operations or concessions. In addition, it increases returns each time.
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