Eni cuts oil and gas output, spending targets amid coronavirus hit

Eni cuts oil and gas output, spending targets amid coronavirus hit
The logo of Italian energy company Eni is seen at Eni's Renewable Energy and Environmental R&D Center in Novara, Italy. (REUTERS/File Photo)
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Updated 25 April 2020

Eni cuts oil and gas output, spending targets amid coronavirus hit

Eni cuts oil and gas output, spending targets amid coronavirus hit

MILAN: Italian energy group Eni lowered its forecast for production and investments on Friday as the coronavirus crisis has driven down oil and gas demand and hammered crude prices.

In a statement on first quarter results, it said it would spend about 30 percent less this year than planned and expected production to be 1.75 million-1.8 million barrels of oil equivalent per day.

The group, which said in March it would cut capital expenditure in 2020 by 25 percent, said on Friday it expected spending in 2021 to be 30-35 percent lower than original plans.

“The period since March has been the most complex period the global economy has seen for more than 70 years. Like everyone, we expect a complicated 2020,” Eni CEO Claudio Descalzi said.

Demand for oil and gas has tumbled as governments have imposed lockdowns to stop the coronavirus spreading, prompting energy companies to slash investment and conserve cash. Many firms are raising extra cash in debt to weather the storm.

On Thursday, Eni approved the issue of bonds for up to €4 billion ($4.30 billion).

The company, which forecasts adjusted cash flow of €7.3 billion based on benchmark Brent crude at $45 a barrel, said it was sitting on a liquidity cushion of €16 billion.

Brent was trading at half that level on Friday.

In the first quarter, adjusted net profit fell by 94 percent to €59 million, below an analyst consensus provided by the company of around €240 million.


German startup to help Saudi hotels utilize empty spaces

German start-up NeuSpace, established during the coronavirus disease (COVID-19) pandemic to help hotels overcome a slump in occupancy rates, is now working in Saudi Arabia. (Shutterstock/File Photo)
German start-up NeuSpace, established during the coronavirus disease (COVID-19) pandemic to help hotels overcome a slump in occupancy rates, is now working in Saudi Arabia. (Shutterstock/File Photo)
Updated 21 January 2021

German startup to help Saudi hotels utilize empty spaces

German start-up NeuSpace, established during the coronavirus disease (COVID-19) pandemic to help hotels overcome a slump in occupancy rates, is now working in Saudi Arabia. (Shutterstock/File Photo)
  • COVID-19 pandemic has brought slump in average hotel occupancy rates in Saudi Arabia

RIYADH: A German start-up established during the coronavirus disease (COVID-19) pandemic to help hotels overcome a slump in occupancy rates is now working in Saudi Arabia.

NeuSpace aims to assist operators in coming up with new ways to generate revenue from their empty spaces.

Anne Schaeflein, a co-founder of the Dusseldorf-based company, told Arab News: “For hotel properties still in the completion phase, we feel it is best to evaluate the perspective, and to diversify pre-opening.

“To be empathic to the existing (or planned) infrastructure and environment of the location, we run a feasibility study and look at how the space could be best used from an ROI (return on investment) as well as community perspective. Turning function spaces into day nurseries, delis, and bakeries,” she said.

Anne Schaeflein, Collaborative Founder NeuSpace. (Supplied)

According to the company’s website, it aims to address the needs of hotel investors, operators, and the wider community surrounding the property.

“We deliver quick solutions to retain some of the hospitality jobs, and add others, and offer attractive living space for communities, all within one to four months, depending on the individual projects,” the company said.

A report in November by global hotel data analysis company, STR, found that the average occupancy rate in Saudi Arabia was 34.7 percent, down 38.7 percent on the previous year. As a result, the average revenue per available room fell 35.5 percent year-on-year to SR172.70 ($46.05).

Looking to the future, real estate consultancy firm, Colliers International, has forecast that average occupancy rates in Riyadh and Alkhobar will be 55 percent, 51 percent in Jeddah and Madinah, and 37 percent in Makkah.

On innovative solutions, Schaeflein said the startup’s concept was formed around the key pillars of value preservation, creating new housing space, and innovative housing concepts.

She pointed out that the company looked at how areas such as roof gardens or social spaces could be used by the wider community, or how pools and spas not being used by guests could be utilized by local residents.

NeuSpace also studies how back-office services and facilities could be offered to residents to better utilize staffing levels. This could include offering dog-minding services, turning rooms into office or retail areas, or renting out restaurant and entertainment spaces when footfall was low.