Italy's Eni posts record high output, sees excellent growth prospects
Kazakhstan’s leading upstream investor, Italy's Eni, like its other peers enjoyed a strong 2017, and amid higher oil prices and record high output, the oil major expects to create "substantial value surplus" for its shareholders after four years of intense change.
The company said that after difficult market environment, it will continue to pursue growth "in a disciplined way with great respect for the possibility of the most difficult operating conditions."
For the full year 2017, Eni posted a net profit of Eur2.41 billion ($3.04 billion) compared to a net loss in 2016, driven a 33% increase in net profits in the fourth quarter of last year.
Eni said it expects oil and gas production to grow at a rate of 3% this year driven by recent fields, after it posted a record high in output this year.
In terms of full 2017 oil and gas production, the Italian oil major reached a record high of 1.816 million boe/d, after output averaged 1.892 million boe/d in the fourth quarter of last year.
"This performance was driven by new project start-ups and the ramp-ups at fields started up in 2016, mainly in Angola, Egypt, Ghana, Indonesia and Kazakhstan as well as by restarting production at certain Libyan fields thanks to better safety conditions," it said in a statement.
CEO Claudio Descalzi said due to the "excellent results" he will propose a dividend of Eur0.80 per share in 2017 to the Board of Directors, on March 15.
On reserves, Eni reported an organic reserve replacement ratio of 103% for 2017, after it reached a record-high of 193% the previous year. This was related to the divestment of a 40% stake in the Zohr project and of a 25% interest in Area 4 in Mozambique.
Eni's indicator refining margin for 2017 rose marginally to $5.00/b from $4.30/b in 2016. Though refining margins fell by 8.5% in the fourth quarter of 2017 "due to compressed relative prices of products compared to the cost of the petroleum feedstock reflecting the swift upward movements in the Brent price reported in the last part of 2017."
But it expects a refining break-even margin at around 3 $/b year end, "leveraging on new initiatives of plants set-up and supply optimization."
However, refining throughputs for the full year were down by 2% from 2016 due to the downtime of some plants at Sannazzaro refinery and the shutdown at the Taranto refinery, partly offset by a better performance of Milazzo and Livorno refineries.
