Eni Lifts 2012-15 Capex to Boost O&G Output Growth

ROME - Eni SpA Thursday boosted expected investments for the next four years as the energy company plans to spend more in its bigger projects to extract oil and natural gas and as it hopes to put last year's Libya output disruption in the past.

Eni said it forecasts capital expenditure of EUR59.6 billion ($77.8 billion) in the 2012-2015 period, or 12% higher than in its previous 2011-2014 plan. The new capital expenditure plans set aside around EUR44.8 billion for the exploration and production activities, or 75% of the total amount.

Italy's biggest oil and natural gas company by volume predicts its average annual-production growth-rate through 2015 will rise by more than 3%. It also estimates that from 2015 to 2021 that rate will rise by 3%.

"Exploration and production will be the main driver of our business," Chief Executive Paolo Scaroni said at a conference in London to the present the new plan. "We are entering an acceleration of our growth."

Eni is the latest company oil company to lift investments in the exploration activity as spending reached record levels to bring oil and gas supplies to users. As aging fields dry up, majors are also spending more to look for hydrocarbon in countries that until recently were off the sector's radar screens.

Last month, Royal Dutch Shell PLC said it will boost this year's exploration spending by 35% to $5 billion.

The Rome company's 2011 output dropped 13% as a result of the civil war in Libya to oust dictator Moammar Gadhafi. Eni is the oil major with the biggest operations in the North African country.

But last year was positive on the exploration front for Eni with the large gas Mamba find in Mozambique and the Skrugard oil one in the Barents Sea. The company wants to replicate those finds.

"We have a high exploration campaign ahead," said the CEO.

The company is expecting to roll out the next production phase of big projects from the end of this year with the much-delayed Kashagan one in Kazakhstan in the last quarter of 2012. In 2013, Eni has penciled in the start of production of the Goliat oil one in the Barents Sea and the Perla gas one in Venezuela.

Investing to find new oil and gas will take precedent over dividend boosts, despite having assets on sale of more than EUR10 billion from its stakes in Italian gas grid Snam SpA and Galp Energia SGPS.

CEO Scaroni made it clear at the presentation that any change in the dividend would need to factor in its strategy to boost output.

Eni confirmed that its dividend is scheduled to rise in line with inflation.


Generated by readers, the comments included herein do not reflect the views and opinions of Rigzone. All comments are subject to editorial review. Off-topic, inappropriate or insulting comments will be removed.