Eni: $55 per barrel oil what we need

Italian energy company says its managing to outmaneuver weak oil market.

By Daniel J. Graeber

MILAN, Italy, Oct. 29 (UPI) -- Italian energy company Eni said it would be able to cover its operational plans for 2015 assuming an average oil price of around $55 per barrel.

Eni boasted of a strong track record, including wading into new territory in Mexico, for the third quarter and for 2015 so far.


The company in October won all of the shares in three oil fields included under what the Mexican government categorized as Area 1 during a government auction. Eni said the combined reserves for the three fields are approximately 800 million barrels of oil and 480 billion cubic feet of associated gas.

In August, the company announced the discovery of 30 trillion cubic feet of natural gas off the Egyptian coast, the largest discovery made in regional waters and potentially the largest in the world.

In the first nine months of the year, Eni Chief Executive Officer Claudio Descalzi said the company discovered 1.2 billion barrels of oil equivalent in new resources.

"In the quarter, despite a weak oil price environment, Eni continued to deliver strong growth in upstream and important progress in restructuring the mid and downstream businesses," he said in a statement.


The company took a net profit loss of $320 million, down 76 percent year-on-year. Lower crude oil prices, off about 45 percent from last year, has starved companies of revenue for the better part of a year.

Eni this week announced the sale of a 12.5 percent stake in its oil services subsidiary Saipem for $7.2 billion to finance the development of its oil and natural gas reserves.

Descalzi said restructuring the company's portfolio would offer it a lifeline during the weakened crude oil market.

"These actions, along with the further optimization of our investments during the year and the improvement of our operational cost structure, will allow us to cover our investments in 2015 with organic cash flow, excluding Saipem and considering a $55 per barrel oil price scenario," he said.

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