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Eni surpasses forecast predictions

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LONDON — The Italian oil company Eni, beset by political turmoil in the African nations where it is a leading operator and plagued by a corruption scandal at its drilling subsidiary, on Wednesday reported an adjusted net profit of 1.2 billion euros for the latest quarter, a 29 percent decline from the period a year earlier.

Although the company encountered setbacks in almost all of its business lines, its earnings beat analyst estimates. Eni reported a 62 percent gain in net income to €4 billion ($5.5 billion), mostly because of a one-time €3 billion gain from the sale of a stake in the company’s Mozambique gas discoveries to China National Petroleum Company.

Eni oil and gasAmong the setbacks, Eni’s exploration and production arm that makes most of the company’s profit suffered from some of the big, long-term bets the company has made. For instance, Eni’s leading position in Africa has left it vulnerable to the spreading political unrest in the northern part of the continent.

Disruptions in Libya, where Eni is the dominant foreign oil company, and Nigeria, another longtime stronghold, cost the company about 50,000 barrels per day in production in the third quarter.

Overall production was down 3.8 percent for the quarter and 3.1 percent for the first nine months of 2013, averaging 1.65 million barrels per day for the quarter.

Eni has been one of the most successful explorers among the big oil companies in recent years, making big finds in Mozambique as well as off Norway. But new production in places like Russia and Angola is not enough to offset the effects of unrest and natural decline of Eni’s legacy fields.

However, analysts say that Eni, one of the rare majors to register strong output growth in recent years, is still on track for future growth. Analysts at Bernstein Research in London wrote on Wednesday that “Eni’s upstream portfolio has improved significantly in recent years and is now amongst the best” of its peers. Bernstein forecast that Eni’s production would grow at about 4 percent per year over the next three years.

Eni’s shares rose 3.4 percent in midday trading in Milan.

The company was hurt by continued large losses on distributing to industrial customers the natural gas that it purchased through long-term fixed-price contracts from major suppliers like Russia’s Gazprom. That business resulted in a loss of €356 million in the quarter and about €1 billion for the first three quarters. Eni has been renegotiating some of these contracts.

Eni is also being hurt by the performance of its Saipem drilling and construction subsidiary, which has been rocked by a corruption scandal in Algeria and falling orders. Saipem’s profit was down by about 39 percent for the quarter.

The appreciation of the euro against the dollar also trimmed Eni’s results. The company reports in euros, while the dollar is used for most global oil and gas transactions.

In a statement, Paolo Scaroni, the Eni chief executive, dismissed most of the problems as “temporary” and said the company would go ahead with a planned share buyback program of up to €6 billion “given the solidity of our business.”

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Oil

FG Introduces New Incentives To Revitalize Nigeria’s Oil & Gas Industry

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In a strategic move to revitalize Nigeria’s oil and gas sector, the Federal Government has unveiled two key fiscal incentives aimed at attracting investment and enhancing energy security.

The announcement was made by Mr. Wale Edun, the Minister of Finance and Coordinating Minister of the Economy on Wednesday.

The first initiative, the Value Added Tax (VAT) Modification Order 2024, introduces critical exemptions for essential energy products and infrastructure, including Diesel, Feed Gas, Liquefied Petroleum Gas (LPG), Compressed Natural Gas (CNG), Electric Vehicles, Liquefied Natural Gas (LNG) infrastructure, and Clean Cooking Equipment.

Read Also: Atiku Calls For Rotational Presidency Across Nigeria’s Geopolitical Zones

These exemptions are designed to reduce living costs for Nigerians, promote energy security, and accelerate the transition to cleaner energy alternatives.

The second initiative, the Notice of Tax Incentives for Deep Offshore Oil & Gas Production, offers new tax relief options for deep offshore exploration projects.

This measure aims to position Nigeria’s deep offshore basin as a premier destination for international oil and gas investments, boosting the country’s appeal to foreign investors.

These reforms are part of a broader set of policy initiatives, known as Policy Directives 40-42, endorsed by President Bola Ahmed Tinubu.

The directives reflect the administration’s commitment to fostering sustainable development in the energy sector and enhancing Nigeria’s competitive edge in the global oil and gas market.

 

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Tinubu set to approve ExxonMobil-Seplat oil deal, expands CNG bus initiative

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By Yemie Adeoye

NIGERIA’s President Bola Tinubu has announced that the protracted ExxonMobil-Seplat upstream oil divestment will be formally approved by the Minister of petroleum within a matter of days, just as he announced his government’s intention to expand the Compress natural Gas, CNG buses initiative.

The President who stated this during his Independence day nationwide broadcast stated that the move is in line with his administration’s commitment to free enterprise, free entry and free exit in investments which is the hallmark of his administration investment policy.

“Fellow compatriots, our administration is committed to free enterprise, free entry, and free exit in investments while maintaining the sanctity and efficacy of our regulatory processes. This principle guides the divestment transactions in our upstream petroleum sector, where we are committed to changing the fortune positively. As such, the ExxonMobil Seplat divestment will receive ministerial approval in a matter of days, having been concluded by the regulator, NUPRC, in line with the Petroleum Industry Act, PIA. This was done in the same manner as other qualified divestments approved in the sector.”

The President also seized the opportunity to plead with Nigerians to be patient with his administration’s reform policies. “As your President, I assure you that we are committed to finding sustainable solutions to alleviate the suffering of our citizens. Once again, I plead for your patience as the reforms we are implementing show positive signs, and we are beginning to see light at the end of the tunnel”.

“Our energy transition programme is on course. We are expanding the adoption of the Presidential Initiative on Compressed Natural Gas for mass transit with private sector players. The Federal Government is ready to assist the thirty-six States and FCT in acquiring CNG buses for cheaper public transportation.

Fellow Nigerians, while we are working to stabilise the economy and secure the country, we also seek to foster national unity and build social harmony and cohesion. Our economy can only thrive when there is peace”. he enthused.

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Oil

ExxonMobil To Invest $10bn In Nigeria’s Deep-Water Oil Operations

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As part of the administration’s push to improve Ease of Doing Business (EoDB), Nigeria’s Vice President Kashim Shettima has expressed support for ExxonMobil’s plan to invest $10 billion in the country’s deep-water oil sector.

Speaking on Wednesday, September 25, 2024, during a meeting with ExxonMobil executives at the 79th United Nations General Assembly (UNGA) in New York, Shettima called the investment “a clear testament to the administration’s economic reforms and investor-friendly policies.”

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This announcement follows news that international maritime company DP World intends to develop a multibillion-dollar port project in Nigeria.

Stanley Nkwocha, Senior Special Assistant to the President on Media and Communications, shared the development in a statement on Wednesday. He quoted Shettima as saying: “ExxonMobil’s potential investment aligns with the vision of President Bola Ahmed Tinubu’s administration for a more investment-friendly Nigeria.

We are committed to fostering an environment that supports such transformative projects.”Shettima also discussed the administration’s broader efforts to improve the ease of doing business, highlighting the “Renewed Hope Agenda,” which aims to simplify bureaucratic processes, enhance transparency, and offer fiscal incentives to attract global investors.

“Our administration has taken bold steps to unify the exchange rate, remove fuel subsidies, and implement tax reforms. These measures, though challenging in the short term, are intended to create a stable and predictable business environment in the long term,” he added.

On the oil and gas sector, Shettima mentioned that the government is revising the fiscal framework for deep-water operations to attract investment while ensuring fair returns for the Nigerian people.

 

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