• Friday, March 29, 2024
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Eni’s third-quarter production goes up, softens slumping earnings

Eni’s third-quarter production goes up, softens slumping earnings

The Italian super oil major, Eni has said production jumped 6 percent to 1.89 million barrels of oil equivalent per day (boed) in the three months to September, boosted by its giant Zohr field in Egypt and new acreage in Mexico.

The Rome headquartered oil major has also brought on stream its Obiafu-41 gas and condensate discovery in Nigeria’s Niger, three weeks after well completion, a new development record the company. Production will reach a capacity of about 3 million cubic metres (106 million cubic feet) per day of gas and 3,000 barrels per day of condensate, Eni said in a statement, adding that the gas from this block will be used for domestic consumption.

Part of the domestic consumption of gas from this discovery entails processing it at the Eni-operated Ob-Ob plant, and then sent to the 500 megawatts (MW) Kwale Okpai power plant, which is Nigeria’s first independent power plant. Upgrade for the Okpai plant is underway which will double its capacity to 1 gigawatt (GW) is currently underway.

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“The discovery contains approximately 28 billion cubic metres (Bcm) (988 billion cubic feet) of gas and 60 million barrels of condensate and the gas from this discovery will largely be channelled to the domestic market in order to feed the power sector,” the supermajor said in a statement.

The company expects its group’s global production to increase further in the final quarter and said it would now add 700 million boed of output this year from a previous estimate of 600 million boed.

Third-quarter adjusted net profit fell 44 percent to 776 million euros ($862 million), impacted by lower commodity prices and the loss of earnings from its former Eni Norge business, Reuters reported. The result was just above an analyst consensus provided by the company of 0.77 billion euros.

Claudio Descalzi, chief executive officer at Eni said despite the 50 percent drop in gas prices in the third quarter and the fall in crude by $13 per barrel cash flow remained solid.

“Eni’s efficient portfolio can achieve breakeven at prices well below current difficult conditions,” he said.

“It’s looking rosy for Eni with all the upstream work that will drive growth next year,” said Jason Kenney, Santander oil analyst.