Italian major, Eni S.p.A., announced results for fourth-quarter and full-year 2012 on Friday, 15 Feb 2013.
Operational highlights include:
Paolo Scaroni, Chief Executive Officer, commented:
"2012 was a record year for exploration at Eni with discovered resources about six times yearly production thanks to our outstanding achievements in Mozambique and our other successes in West Africa, in the Barents Sea and in Indonesia. We have also made significant progress in developing projects, further increasing our reserves to best ever levels. Production growth has delivered excellent operating profits at our Exploration and Production division. In Gas & Power and Refining & Marketing we have realised significant efficiency improvements that have allowed us to absorb most of the effects of the still difficult European scenario. Thanks to Eni’s capital structure, which has also been strengthened by the disposals of Snam and Galp, the company will achieve industry-leading upstream growth rates."
Capital expenditure of continuing operation for the fourth quarter of 2012 amounted to €3.89 billion (€12.76 billion for the full year 2012), mainly related to the continuing development of oil and gas reserves and exploration projects (€3.14 billion) as well as the upgrading of rigs and offshore vessels in the Engineering & Construction division. The Group also incurred expenditures of €0.57 billion in the year to finance acquisitions, joint-venture projects and equity investees.
Exploration & Production
In fourth-quarter 2012, reported liquids and gas production was 1.747 mmboe/d (1.701 mmboe/d in 2012), calculated using the updated gas conversion coefficient of 1,000 cu.m equivalent to 6.43 bbl (previously 6.36 bbl; see the methodology note on page 9 for further details). On a homogeneous basis, i.e. excluding the effect of the updating of the gas conversion coefficient, production grew by 3.6% in the quarter, and 7% in the whole year. Performance was sustained by the recovery of activities in Libya, the start-up/ramp-up of fields, particularly in Russia, and higher production in Iraq. These positive factors were partially offset by the shut down of production in the United Kingdom after the incident at the Elgin/Franklin field (Eni's interest 21.87%) operated by another oil major, force majeure events in Nigeria and mature field declines.
In 2012 Eni laid the foundations for a new development phase of its oil&gas production. Over the intermediate and long-term we expect to achieve industry-leading growth by leveraging the extraordinary success of our exploration in the last four years, particularly in 2012, the almost completed recovery in Libya and a strong project pipeline. In the Exploration & Production division, 2012 was a record for exploration, adding 3.64 billion boe of fresh resources to an already strong base. This was due to the massive volumes of natural gas discovered in Mozambique following appraisal works at the Mamba complex and the discovery of a new exploration play at Coral. Other significant success was achieved in core areas in Norway, Angola, Indonesia, Ghana and Pakistan. Eni’s portfolio was boosted with the acquisition of new exploration acreage in Kenya, Liberia, offshore Russia, Vietnam, Ukraine, Pakistan and China. Production benefited from the nearly complete recovery of production levels in Libya in spite of the complex transition phase the Country is undergoing following the revolution. The Gas & Power, Refining & Marketing and Chemical divisions due to their exposure to the European slowdown were adversely affected by a sharp fall in demand for energy commodities and competitive pressures. In those segments we have been intensifying the initiatives to restore our profitability against the backdrop of ongoing difficult market conditions and weak and volatile margins. In the Gas & Power division we are progressing in the process of renegotiating our supply contracts and implementing measures to optimize margins and mitigate the take-or-pay risk. In the Refining & Marketing division we have stepped up efficiency efforts at our refineries and succeeded in preserving our market share in the retail market. In the Chemical sector we are restructuring our loss-making plants and executing our strategy designed to increase the relative weight of the green chemistry business as well as higher margin businesses. All of our three downstream divisions are expanding outside Europe to seize opportunities in growing markets.
In addition to the above-mentioned exploration successes in Mozambique and the oil discovery in Ghana, it is worth mentioning that exploration activities performed well in:
See www.eni.com for full report.