Italian energy company Eni sees organic momentum building as crude oil prices move closer to $60 per barrel. Photo courtesy of Eni
Oct. 27 (UPI) -- Current market conditions, with Brent crude oil prices moving toward $60 per barrel, support production growth and investments, Italy's Eni said Friday.
"In 2017 we expect to achieve organic coverage of investments and dividends, entirely paid in cash, at a Brent price of $60 a barrel as planned," CEO Claudio Descalzi said in a statement.
The price for Brent crude oil was closer to $59 per barrel early Friday, up about 7 percent from the start of the year. Brent crude oil prices, however, had dropped to around $45 early this year.
Recovery in crude oil prices is supported by an effort led by the Organization of Petroleum Exporting Countries to balance an over-supplied market with coordinated production cuts. That effort, however, could be offset by gains from producers not party to the agreement, like the United States.
Eni said its production during the third quarter averaged 1.8 million barrels of oil equivalent per day, up about 5.4 percent from the same period last year. Start ups and plans to ramp up production in the fourth quarter could bring that level to around 1.9 million boe on average, the highest level for Eni in seven years.
The company said its production growth so far was "robust." Gains will be driven in large part to operations in Kazakhstan, Egypt and Norway, as well as the resumption of activity in Libya, which is exempt from the OPEC-led balancing effort so it can steer oil revenue toward national security.
Eni said the impact of the OPEC cuts would be absorbed by the implementation of initiatives elsewhere in its portfolio.
The company said it was anticipating a breakthrough at its Zohr gas field in Egypt. It made its initial gas discovery there two years ago and quickly described it as the largest ever made in regional waters and potentially the largest in the world.
Production offshore Egypt starts at the end of the year.