- FINANCE, STRATEGY AND REPORTING
Today, Eni’s Board of Directors approved the Group results for the first quarter of 2019 (unaudited).
Today, Eni’s Board of Directors approved the Group results for the first quarter of 2019 (unaudited). Commenting on the results, Claudio Descalzi, CEO of Eni, remarked:
“I am very pleased of the excellent industrial and financial performance delivered by Eni in IQ 2019. Particularly, in light of a substantially unchanged market scenario, the E&P business has improved its operating profit by 25% compared to the first quarter of 2018, confirming our expectations of the business growing cash generation for the full year. The results of the G&P segment also improved; the 16% increase in operating profit to €372 million puts us on the path to achieving our €500 million profit target for the full year. The performance of the Downstream R&M and Chemicals business offset the effect of weaker margins and we expect to see a broad recovery over the next nine months, particularly in oil Refining and Marketing. Overall, first quarter operations generated a cash flow of €3.42 billion, up 8% and €1.5 billion greater than the investments for the period of around €1.9 billion, which is in line with the expectations of €8 billion for the whole year. The Group confirms that it can leverage on the quality and robustness of its asset portfolio, capable of covering costs, investments and dividends at a Brent price of US$ 55, in addition to generating a cash surplus in the event of higher prices, as in current trading conditions.”
Exploration & Production
main successes:
- new discoveries totaled 174 mmboe:
a major oil discovery was made in the Agogo exploration permit located in Block 15/06 (Eni operator 36.8%) deep offshore Angola, with up to 650 million barrels of oil in place. Agogo is the third discovery made since the resumption of exploration activities in 2018 in Block 15/06, following Kalimba and Afoxé;
Vår Energi made an oil and gas discovery in the PL 869 licence in the Norwegian North Sea;
a gas discovery was made in the exploration permit Nour in the Egyptian Mediterranean Sea, operated by Eni (40%).
rebuilding Eni’s mineral interests portfolio:
- acquired 13 licences by Vår Energi in the Norwegian APA Round;
- acquired certain interests in two exploration blocks onshore Egypt: “South East Siwa” (Eni 100%) covering 3,013 km2, close to the “SW Melehia” concession and “West Sherbean” (Eni operator 50%) covering 1,535 km2, located in the Nile Delta close to the Nooros field;
- signed an Exploration and Production Sharing Agreement for Block A, covering 2,412 km2 offshore Ras Al Khaimah (UAE). Eni will retain operatorship with a 90% participating interest.
Gas & Power
Refining & Marketing and Chemicals
Decarbonization and circular economy
Group results
Exploration & Production
Hydrocarbons production: the growth rate for 2019 is confirmed at 2.5% y-o-y, under a Brent price forecast of 62 $/bbl and net of portfolio transactions. Growth will be fuelled by continuing production ramp-up at fields started in 2018, increases at the Zohr and Kashagan fields, as well as the planned 2019 start-ups including the Area 1 oil project offshore Mexico, the Baltim SW in Egypt, the North Berkine in Algeria and Trestakk project in Norway. A yearly contribution from start-ups and ramp-ups is expected to reach approximately 250 kboe/d. Production growth vs. 2018 will accelerate from the third quarter of 2019, after the maintenance activities concentrated in the second quarter of 2019 (Kashagan and Goliat fields).
Exploration resources: confirmed the target of 600 million boe of equity additions for the year.
Gas & Power
Operating profit: expected at €500 million as guided.
LNG contracted volumes expected in line vs. 2018.
Portfolio of retail customers projected to increase due to the development of the power business.
Refining & Marketing and Chemicals
Refinery breakeven margin expected at approximately 3.5 $/bbl at the end of 2019 leveraging on the full operability of the industrial system and widening differentials between light Brent crude benchmark and high-sulphur content crudes.
Refinery throughputs on own account: seen at stable levels.
Green throughputs: expected a large increase due to the start-up of the Gela green refinery.
Retail sales of refined products seen stable.
Petrochemical production volumes and sales: expected to decline y-o-y due to the shutdown of the Priolo hub.
Group
Capex: confirmed the guidance of €8 billion for FY 2019 at the budget exchange rate of 1€=1.15 USD.
Cash flow from operations before working capital is expected at €12.8 billion at the Brent price of 62 $/bbl, PSV gas price of 266 €/kmc and the EUR/USD exchange rate of 1.15, before IFRS 16 effects.
Cash neutrality: organic capex and the dividend are expected to be fully funded by operating cash flows at the Brent scenario of 55 $/bbl before IFRS 16 effects, which would improve the target to 52 $/bbl.
The full version of the Press Release is available in PDF format.
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