Eni Back in Profit in 4Q, Backs Descalzi over Nigeria

Eni on March 1 reported a net loss for full year 2016 of €1.46bn, much lower than its year-before loss of €8.78bn but still had no update on when or if a final investment decision will be taken on the Coral floating LNG project, Mozambique. A strategy presentation later March 1 may provide further clues.

The Italian major made a net profit of €340mn in 4Q2016, reversing a net loss of €8.45bn in the same 2015 quarter which included asset write-downs.

Indeed, Eni reported an adjusted operating profit of €1.29bn, up 103% (or €0.65bn), reversing the negative trend of the previous quarters, thanks to a doubling of E&P earnings to €1.4bn.

On the minus side, Eni’s gas & power segment reported an adjusted operating loss of €72mn, versus an €18mn profit in 4Q2015, due to an adverse trading environment, particularly in the LNG business. Oil refining and marketing earnings were lower but still profitable.

Full year 2016 production averaged 1.76mn barrels of oil equivalent, in line with 2015 despite the Val d’Agri. For 4Q2016, production was 1.86 million boe/d, down 1.5%, despite the restart of the giant Kashagan field in Kazakhstan in October after a four-years shutdown to replace pipelines.

Eni said it discovered 1.1bn boe of additional resources in 2016 at a finding cost of $0.60/boe, increasing them to 7.49bn boe – up 8.7% year on year. Liquids declined by 4.5% to 3.4bn bbls and the big rise was in gas reserves, up 22% to 22.33 trillion ft³.

Among recent highlights, it listed the successful farm down of equity in the giant Zohr field offshore Egypt, and the Coral FLNG sales agreement to BP. 

Eni board backs Descalzi over Nigeria probe

Eni’s board late February 28 said a ‘forensic’ enquiry into the 2011 acquisition by Eni and Shell of the OPL 245 licence in Nigeria, by a US law firm on Eni’s behalf, came to the same conclusions as Eni’s previous investigations in 2015, namely that there is no evidence of corrupt conduct by the company or its CEO. The board therefore “confirmed its total confidence that neither the company or its CEO Claudio Descalzi were involved in alleged illicit conduct under investigation.” Two weeks ago a Milan tribunal set a date of April 20 for a preliminary hearing into the allegations against the two companies and certain individuals, including Descalzi (pictured above) and his predecessor Paolo Scaroni.

Mark Smedley