Success for Italian major ENI in 2013 will depend on how soon the company can start up its Kashagan field, offshore Kazakhstan, according to a Jefferies International research report.
Following ENI's first quarter results, oil sector analysts at Jefferies' London office stated in their report Thursday: "Eni's recent history is rapidly obliterating the excellent year it has in 2012, when the Mozambique exploration successes drove it to the best share price performance of the global majors."
ENI revealed in its first quarter results, released Wednesday afternoon (London time), a 36-percent fall in its 1Q 2013 operating profit as oil and natural gas production fell 4.9 percent to 1.6 million barrels of oil equivalent per day.
Jefferies' analysts noted that ENI is suffering from several one-off production interruptions – in Nigeria, Libya and the UK – that "are leaving it much to do if it is to produce volume growth in 2013" and that "a lot depends on the start up date of Kashagan".
Kashagan, located in Kazakhstan's zone of the Caspian Sea, is a major oilfield estimated to contain recoverable reserves of up to 13 billion barrels. ENI plans a field development aimed at initially producing between seven and nine billion barrels, which can be extended through partial gas reinjection to extract the entire 13 billion barrels.
First oil from the field had originally been forecast for December 2012, but recent media reports suggest that production start-up could occur as late as September 2013. The company itself now expects start-up to occur around the mid-year stage, according to a statement made Wednesday by Claudio Descalzi, ENI's head of exploration and production.
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