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EurOil PERFORMANCE EurOil

Eni books Q2 net loss,

cuts price outlook

ITALY ITALY’S Eni has followed other European challenging quarters that the oil and gas industry
majors in reporting a net loss for the second has faced in its history.”
The loss mainly came quarter, on hefty impairment charges and a “Emerging from the pandemic will be diffi-
from impairment slump in revenues. cult, with signs of great uncertainty still to come,”
charges relating to its The company sank to a €4.4bn ($5.2bn) net he cautioned.
lower price outlook. loss, from a €424mn profit in the corresponding The company announced a further cut to its
period last year. The reversal was mostly caused 2020 capital expenditure programme to €5.6bn,
by €3.5bn of post-tax impairments that Eni which is €2.6bn less than the original plan and
booked after slashing its outlook for oil and gas €300mn less than the estimate it gave at the start
prices. of the COVID-19 crisis. The reduction is “almost
Many other oil firms have taken similar steps fully focused” on upstream projects, it said.
in response to the market collapse triggered by Eni’s 2020-2023 capex guidance now stands
the coronavirus (COVID-19) pandemic. Royal at €27bn, which is €4.7bn less than the original
Dutch Shell wiped almost $17bn off the value of forecast, owing to upstream cuts in 2020 and
its assets in the second quarter, after adjusting its 2021. However, the company is adding €800mn
forecasts to reflect the impact of COVID-19 as to its planned energy transition investments.
well as global efforts towards decarbonisation. Eni now sees its full-year dividend at €0.55
Eni now sees Brent averaging only $40 per per share, after forecasting €0.89 back in Febru-
barrel this year, rising to $48 in 2021, $55 in 2022 ary. The revision follows similar cuts announced
and $60 in 2023. Earlier it had predicted $45 per by Equinor and Shell.
barrel in 2020 and $70 in 2023. The dividend will “no longer be a fixed
“Spot gas prices at the Italian hub have been amount, in an environment increasingly subject
reduced by 30% in the long term, while refin- to high variability,” Descalzi said. The new pol-
ing margins are expected to decline in the short icy has a floor of €0.36 per share when Brent is
term,” it said. priced at least at $45 per barrel, and increases in
Eni also reported a €434mn adjusted operat- line with prices.
ing loss, compared with a €2.28bn profit a year The company’s oil and gas production aver-
before. Its upstream division racked up €807mn aged 1.71mn barrels of oil equivalent per day
in losses, versus a €2.14bn income in the second (boepd) in the three months ending June 30,
quarter of 2019. Its other businesses performed down 6.6% from a year earlier. It blamed the
much better, with gas and power enjoying a four- decline on the pandemic’s impact, OPEC+ pro-
fold increase in earnings to €218mn. Refining, duction cuts and weaker gas demand, especially
marketing and chemicals also boosted profits by in Egypt.
43% to €73mn, despite much lower fuel sales. Eni’s full-year forecast is unchanged at 1.71-
1.76mn boepd, however, and it is targeting a
Crisis measures growth to 2mn boepd in 2023 and around 2.05-
CEO Claudio Descalzi described the results as 2.10mn boepd in 2025.
“extremely positive considering we have gone Refinery runs fell 5% to 5.34mn tonnes
through what is likely to be one of the most (430,000 bpd). ™

P16 www. NEWSBASE .com Week 31 06•August•2020