Yesterday, Eni’s Board of Directors approved the Group results for the full year and the fourth quarter of 2018 (unaudited).
Yesterday, Eni’s Board of Directors approved the Group results for the full
year and the fourth quarter of 2018 (unaudited). Commenting on the results, Claudio
Descalzi, CEO of Eni, remarked:
“2018 was a strong year for Eni both financially and operationally, which was characterized by a robust fourth quarter performance. We successfully optimized our portfolio and strengthened it for the future, and we doubled operating and net profit, while the price of Brent averaged 25% higher than 2017 in euro terms. We increased cash flow from operations by 35% allowing us, after investments, to cover our €3 billion dividend while also reducing net debt by approximately the same amount to €8.3 billion. Capital expenditure continues to be stable, demonstrating our disciplined management approach.
In our Upstream division we achieved our highest ever level of production of 1.85 million barrels per day, with a cash flow per barrel of $22.5, achieving our 2022 target four years early. The proven reserves replacement ratio was once again higher than 100%, for a three-year average of 131%. Gas & Power achieved its highest ever operating profit since the spin-off of regulated transport and distribution activities, equal to €0.5 billion, while the performance of Refining & Marketing and Chemicals highlights the division’s progress and resilience, despite a less favorable market environment.
With a view to the future we strengthened and geographically diversified our Upstream portfolio, expanding our growth prospects with the establishment of Vår Energi in Norway and building of a significant presence in the Middle East, while keeping costs low and maintaining a high level of profitability. In Refining, the acquisition of a stake in Ruwais increased our downstream capacity by 35%, representing the most efficient and profitable option for expansion, increasing the balance of our portfolio and making it more resilient to future cyclical pressures.
On the basis of these results, we will propose payment of a dividend of €0.83 per share at the Board of Directors' meeting to be held on 14 March.”
Exploration & Production
Production growth was fuelled by:
awarded by the Abu Dhabi National Oil Company (ADNOC) a 25% interest in
the Ghasha concession, a supergiant offshore gas project.
Eni will retain the technical leadership with expected start-up by the end of 2022
and a projected production plateau at 1.5 bcf/d;
in January 2019, Eni was awarded seven exploration licenses in onshore/offshore areas: two licenses in Abu Dhabi, one in Oman, one in the Kingdom of Bah
Gas & Power
Refining & Marketing and Chemicals
The total consideration of the deal amounts to $3.3 billion, net of acquired debt
and possible price adjustments at the closing date. Additionally, the agreement includes
the creation of a joint venture engaged in trading activities, participated
by Eni with a 20% interest.
The transaction will significantly improve the resilience of Eni’s refining business, halving the breakeven refining margin to approximately 1.5 $/barrel when fully operational.
Sustainability, Energy Solutions and circular economy
Eni’s business outlook and financial and operational targets for the 2019-2022 industrial plan will be unveiled at a Strategy Presentation on March 15, 2019 as well as disclosed in 2018 Annual Report. The key strategic guidelines and targets will be disclosed in a press release to be published on March 15, 2019, that will be available at our website “eni.com” and publicly disseminated as required by applicable listing standards.
1Carbon dioxide equivalent (CO2eq) is a
standard unit for measuring the impact of different greenhouse gas warming effect
using, as a reference, the amount of 2CO2 that would create
the same warming effect. Eni reports greenhouse gas emissions using CO2eq
due to the inclusion of other greenhouse gas than carbon dioxide (CO2),
such as methane (CH4) and nitrous oxide (N2O), characterized
by a warming potential of respectively 25 and 298 (Source: IPCC).
3See table on page 15.
4See details on page 1, footnote (d) and (e).
The full version of the Press Release is available in PDF format.