Page 21 - EurOil Week 29

EurOil NEWS IN BRIEF EurOil

14% drop in first-half core earnings on lower believed to be bribes to a London bank Balder field in the North Sea.
demand for gas and electricity as a result of account that ended up going to various Var Energi and Eni declined to comment.
the coronavirus outbreak, sparking a sharp Nigerian politicians, including a former oil Lazard wasn’t immediately available to
drop in its shares, Reuters reported on July 22. minister. comment.
Naturgy’s earnings before interest, The trial of Eni and Shell for corruption In Congo, Eni has gross production of
tax, depreciation and amortisation fell opened in the spring of 2018 and two more than 90,000 barrels of oil equivalent
to EUR1.87bn in the first half from middlemen — a Nigerian and an Italian — per day from operated fields, and an
EUR2.18bn a year earlier. Net profit fell 44% were handed four-year prison terms later additional 56,000 barrels from non-
to EUR334mn that year after an accelerated trial. operated assets, according to its website. Eni
“These are clearly not good results, Both oil companies deny any is also in the process of developing the Nene
but clearly we are impacted by what wrongdoing. Marine deposit, which it expects to reach
is happening in the world and the Prosecutors also requested an eight-year plateau production of more than 120,000
coronavirus,” Chief Executive Francisco prison term for Paolo Scaroni, who was boepd over several stages.
Reynes told analysts during a call on July chief executive of Eni at the time, and a
22. seven-year term for Malcolm Brinded who
The company said lower demand for gas was then Shell’s head of exploration and Premier Oil signs discount
and electricity during lockdowns in the first production.
half had depressed prices, while weaker Italian prosecutors are also seeking a deals for BP’s North Sea
currencies in Latin America further eroded 10-year term for Nigeria’s energy minister at
profitability. the time, Dan Etete, as well as the recovery assets buy
Shares were down 4.7% at EUR16.63 of the $1.1bn.
in mid-afternoon trading, making the In a statement, Eni called the requests Oil and gas company Premier Oil has
company the blue chip IBEX 35 index’s by prosecutors completely groundless signed sale and purchase agreements
worst performer. Fellow Spanish energy and noted that US authorities closed their with oil major BP for the acquisition of
firm Iberdrola, which also reported probes and the payments had been made its interests in the Andrew Area and its
earnings on Wednesday, was down 1.1%. following an inquiry by Britain’s Serious Shearwater assets, under revised terms
Naturgy is a major global buyer of Organised Crime Agency announced in June.
liquefied natural gas (LNG), which was Premier and BP signed a $625mn
already experiencing oversupply even before acquisition of deals for Andrew and
the pandemic further dented demand for Eni seeks to sell assets in Shearwater assets in the UK North Sea. Oil
the super-chilled fuel. prices then crashed and BP in June agreed
The company said it had already Norway, Congo to lower the sale price.
cancelled contracts for 20 TWh worth of In June, Premier announced that it was
gas as prices slump, and expects to keep this Eni is looking to sell assets in Norway able to amend terms for the acquisition
policy in the second half of the year. and the Republic of Congo as oil’s slump of the assets. Namely, cash payable at
It still expects to achieve efficiencies prompts companies across the industry to completion is reduced to $210mn while
worth EUR500mn, and targets 2020 core rein in spending, people with knowledge of estimated revised abandonment obligations
earnings, excluding exceptional items, of the matter told Bloomberg. are reduced to around $240mn pre-tax from
around EUR4bn, down from EUR4.7bn last In Norway, Eni’s majority-owned Var around $600mn.
year. Energi hopes to sell the Jotun floating Premier Oil said on July 20 that the
The company said it would update the production, storage and offloading vessel, signing of the amended deal with the oil
market on its business plan and financial or FPSO, the people said, asking not major occurred after the receipt of creditor
guidance in autumn and reaffirm its to be identified discussing confidential approval for the acquisitions.
commitment regarding dividends. information. In Congo, Eni is working with According to the company, the BP
It said its priority remains shareholder advisers to sell a package of operated assets. acquisitions are conditional on agreeing
returns, although it has suspended its share With crude prices down by a third this with terms of the refinancing of Premier’s
buy-back programme. year, energy producers have made sweeping existing credit facilities, equity funding
cost cuts, reduced staff and offloaded assets and customary other approvals, including
on concern oil demand may never fully shareholder approval.
Italian prosecutors seek return. Rome-based Eni, like its European completion. The company will fully fund
Premier will pay BP $210mn upon
peers, has also announced an ambitious
8-year prison term for Eni CEO carbon-reduction program that could see the $210mn completion consideration via
the company sell marginal activities in some an equity raise, expected to include a pre-
Italian prosecutors said late July 21 they countries. emptive component. The completion of the
are seeking an eight-year prison term Var Energi is Norway’s largest non-state acquisitions is scheduled to occur by the
against the head of oil company Eni, oil and gas producer, having bought Exxon end of September 2020.
Claudio Descalzi, as part of a long-running Mobil Corp.’s assets in the country in 2019. Also, up to a further currently estimated
corruption case implicating the Italian firm At the time, Var said it planned to dispose $115mn would become payable by Premier
and its UK counterpart Shell in Nigeria. of some of the assets acquired through the to BP based on higher future oil and gas
Italian investigators suspect the two oil $4.5bn deal. prices. This further consideration would
groups used bribes to obtain rights in 2011 Lazard Ltd. is advising the company on be funded by revenues from the acquired
to a Nigerian offshore oil block estimated the sale of the FPSO, which is valued at assets.
to hold nine billion barrels of crude, for about $1bn, the people said. The vessel was
$1.3bn. taken ashore last month for upgrading and
Out of that sum, almost $1.1bn was will be used to extend the lifespan of the

Week 29 23•July•2020 www. NEWSBASE .com P21