Eni Suffers Adverse Market Environment, Statoil Benefits
Recent events indicated that Poland and Norway could take advantage of the current standoff over Ukraine, while Italy could pay a moderate price for its reliance on Russian gas.
The six-legged dog reported adjusted operating profit for €3.49 billion, down 6.8% from the first quarter 2013. At the same time, net profit registered an even starker decline, down 15.6% to €1.30 billion. But this did not have repercussions on share prices. The company gained almost 3% on Tuesday.
“Eni delivered solid results in the first quarter 2014, despite a difficult market environment, thanks to a good performance in E&P and progress in the mid and downstream businesses, in particular with the renegotiation of the Statoil gas supply contract. The outlook for 2014 is in line with our expectations, benefiting from the ramp-up of new projects and restructuring activities in G&P, R&M and Chemicals, in the context of continued volatility in Libya and weakness in European demand,” Paolo Scaroni, Chief Executive Officer, commented in a note released on Tuesday.
Also on Tuesday, Norway’s Statoil released its 2014 first quarter results. Unlike Eni, the Norwegian company advanced in the last 12 months.
“We are pleased to present strong financial results for the quarter. Higher prices and good results from our US gas value chain contributed to a 9% increase in adjusted earnings, compared to same quarter last year,” Helge Lund, Statoil's president and CEO, said in a press release.
At the same time, Poland’s PKN Orlen announced it plans to drill at least three exploration wells, including a new horizontal well in Nowy Stręczyn and a hydraulic fracturing operation.
“The results of our earlier work on Nowy Stręczyn and Kisielsk wells were promising enough to warrant further engagement in both locations. This is excellent news, as only by drilling more exploration wells and carrying out tests can we come up with a realistic evaluation of Poland's unconventional hydrocarbon potential and assess the profitability of future production operations,” Wiesław Prugar, President of the ORLEN Upstream Management Board, said in a communiqué published on Tuesday on the company’s website.