Eni’s oil output hits third-quarter record with more to come

Eni’s oil output hits third-quarter record with more to come
Third quarter adjusted net profit fell 44 percent to €776 million. (AFP)
Updated 25 October 2019

Eni’s oil output hits third-quarter record with more to come

Eni’s oil output hits third-quarter record with more to come
  • The Italian company generates around 90 percent of its operating profit from its upstream oil and gas business

MILAN: Energy group Eni achieved its highest ever oil and gas production rate for a third quarter, softening the blow of lower quarterly earnings because of weak oil and gas prices.

The Italian company generates around 90 percent of its operating profit from its upstream oil and gas business. Major gas discoveries in Mozambique and Egypt have given the company the strongest discovery record in the industry, boosting its credentials with oil-producing nations.

Eni said on Friday production jumped 6 percent to 1.89 million barrels of oil equivalent per day (boed) in the three months to September, boosted by its giant Zohr field in Egypt and new acreage in Mexico.

The company expects production to increase further in the final quarter and said it would now add 700 million boed of output this year from a previous estimate of 600 million boed.

Cash flow

Third quarter adjusted net profit fell 44 percent to €776 million ($862 million), impacted by lower commodity prices and the loss of earnings from its former Eni Norge business.

The result was just above an analyst consensus provided by the company of €0.77 billion.

CEO Claudio Descalzi said despite the 50 percent drop in gas prices in the third quarter and the fall in crude by $13 per barrel cash flow remained solid.

“Eni’s efficient portfolio can achieve breakeven at prices well below current difficult conditions,” he said.

At 0919 GMT Eni shares were down 0.8% in line with the European oil and gas index.

“It’s looking rosy for Eni with all the upstream work that will drive growth next year,” said Santander oil analyst Jason Kenney.

Over the last year Eni has done a string of deals in the Gulf, including paying more than $3 billion to buy part of the world’s fourth-biggest refinery in the UAE as part of plans to reduce its reliance on Africa and oil and gas exploration.

On Friday, it announced the discovery of new resources in the Gulf of Suez.

The group, which reported a 23 percent drop in cash flow in the quarter, confirmed a 2019 target for cash flow from operations before working capital at replacement cost of €12.8 billion.

“We continue to see Eni as a core name to hold for the long term due to peer leading volume growth, attractive pipeline project IRR and trading at one of the lowest valuations,” broker Bernstein said. 


SABIC to begin construction of plastic recycling facility in the Netherlands

SABIC to begin construction of plastic recycling facility in the Netherlands
Updated 23 January 2021

SABIC to begin construction of plastic recycling facility in the Netherlands

SABIC to begin construction of plastic recycling facility in the Netherlands
  • The construction phase for the unit is expected to become operational in the second half of 2022
  • The project will be realized under a 50:50 joint venture

Saudi Basic Industries Corp. (SABIC) and Plastic Energy Ltd. announced plans to commence construction on the first commercial unit to produce its flagship certified circular polymers.

The construction phase for the unit, which will be located in the Netherlands, is expected to become operational in the second half of 2022.

The project will be realized under a 50:50 joint venture. It will be implemented with a top sector energy subsidy from the Ministry of Economic Affairs in the Netherlands.

The new unit will enable SABIC to significantly upscale the production of certified circular polymers to provide customers with greater access to sustainable materials which have been recycled, repurposed and produced in a way that can help protect our planet’s natural resources, while acting as a drop-in solution.