Italian energy company Eni said its production suffered last year, largely due to circumstances beyond its control. Photo courtesy of Eni
Feb. 23 (UPI) -- Italian energy company Eni said Thursday that both its adjusted net profit and its reserve base improved during the fourth quarter, though overall production declined because of unplanned events.
"While market conditions were clearly supportive, our 2022 financial results were underpinned by capital and cost discipline, operating performance and by effective risk management of price volatility and supply tightness," Claudio Descalzi, the company's chief executive officer, said.
Supply-side pressures that followed the Russian invasion of Ukraine one year ago pushed crude oil and natural gas prices to new highs in 2022, adding to lingering inflationary pressures that came as a result of pent-up demand during the post-vaccination stage of the COVID-19 pandemic.
That led to bloated profits for the world's leading energy companies and Eni is no exception. Adjusted net profit for 2022 was $14.1 billion, its best performance in more than a decade.
On reserves, the company said that 750 million barrels of oil equivalent were added to its portfolio last year, though an average rate of 1.6 million barrels of oil equivalent production per day marked a 4% decline from year-ago levels.
Some of the production woes stem from a force majeure declaration, a contractual clause that absolves a company from its obligations due to forces beyond its control, in Nigeria due to damage to its infrastructure in early 2022.
That pressure came as global markets were adjusting to the loss of reserves from Russia due to Western-backed sanctions. Eni, however, made strides in supporting European energy security with the first-ever deliveries of liquefied natural gas from its Coral Sul project off the coast of Mozambique.
Looking ahead, the company said much of its focus would be on securing more supplies of natural gas. The total share of natural gas in Eni's production portfolio is expected to increase to 60% by 2030 and contracted volumes of LNG are on pace to double the 2022 level by 2026.
"We have been focusing our exploration and production strategy mainly on gas, leveraging our own production and diversifying our investments across different countries," Descalzi said. "This has enabled us to put in place our Plan aimed at replacing 20 billion cubic meters of Russian gas by 2025."