...article from 'upstream' dated march this year. Interesting that eni farmed out their Mozambique gas find to the China national petroleum corporation (given the location of b105). Also interesting that they would consider acquisitions up to $2bn....
The Milan-based explorer is to invest about $73.64 billion over the period, an increase of about $2.07 billion on the last four-year plan, when it had targeted 3% annual growth for 2012 to 2015.
It is ramping up its capital investment in upstream from 48% in 2011 to 61% by 2016, to take advantage of higher-return opportunities provided by recent exploration successes such as its Area 4 gas finds in Mozambique.
The explorer hopes to keep the cost of new production under $30 per barrel of oil equivalent by focusing on giant projects with synergies, lower-cost onshore and shallow water plays and its large position in Africa.
Chief executive Paolo Scaroni said that 90% of growth projects envisaged for the four-year period will have passed the final investment stage at the end of this year.
Chief operating officer for exploration and production Claudio Descalzi said that the production increase was weighted toward the first half of the plan, with 15 start-ups delivering 60% of the target due by May 2015.
Descalzi said Kazakhstan’s Kashagan and Venezuela’s Perla fields would both enter production this year.
The explorer plans to sink $2.5 billion, or a fifth of its total exploration budget, into drilling in the US Gulf.
This year is also set to see Eni’s first well spudded in Vietnam, and Rosneft will drill two wells in the Barents Sea on the three licences where Eni is a 33% partner.
Descalzi said that Eni would renew exploration on previously acquired blocks that saw activity suspended during the post-Macondo drilling ban.
Eni aims to boost production by a slightly more modest 3% per year from 2016 to 2022, by which time it aims to produce around 2.5 million barrels of oil equivalent per day.
The Italian company’s four-year plan also includes $10 billion in divestments, which Scaroni said would likely include “some reshuffling of our exploration and production portfolio”, pegged at about $2 billion.
The other $8 billion is already accounted for by Eni’s Area 4 farm-out to China National Petroleum Corporation, together with its ongoing sell-offs of stakes in grid operator Snam and Portugal’s Galp Energia. Scaroni also said that the explorer would consider acquisitions worth “$1 billion or $2 billion” over that time, but did not envisage any large-scale asset buys or takeovers.
“We always have on our radar screen targets which are potentially synergic with our operations… but we are not in the market for major deals, as we do not think they create value,” he said.
NEN Price at posting:
27.0¢ Sentiment: Hold Disclosure: Held
