Eni pledges to become a leader in the energy transition
Italian oil & gas giant Eni has announced that it will be transforming its business to secure a prominent position in the energy transition.
Forming two new business units - ‘natural resources’ and ‘energy revolution’ - the company is seeking to develop a more efficient, sustainable and eco-friendly oil and gas portfolio in the former and research blue, green and biofuels in the latter.
This new vista forms the company’s long-term transformation goal for the next 30 years. Eni considers its combination of focused growth, financial value creation and sustainability goals to be a roadmap for success as the energy sector braces for 2050 and net-zero carbon.
A new direction
Claudio Descalzi, CEO, emphasised that Eni’s new direction was a watershed moment for the company and, as a leading brand, potentially the industry too:
“This new structure reflects Eni’s pivot to the energy transition. An irreversible path that will make us leaders in decarbonized energy products. With our new Plan [...] we have set our path for the next 30 years, as of today it is unique in our industry.
“The reorganisation also involves the corporate structures, which will evolve, continuing to be the central reference point for strategic and control processes, providing effective support to meet the business groups’ objectives,” he said.
What is particularly striking about Eni’s new direction is the reliance on leveraging industrial technology to effect change. As such, a new function (Technology, R&D and Digital) has been created to develop innovative solutions in-house with greater speed and at scale.
Launching research projects across its value chain and utilising scientific and technical expertise, the company will push for increased safety standards, operational efficiency and quality in its overall delivery.
The fight against climate change
One of the primary motivators of change for Eni is undoubtedly a desire to mitigate the environmental effects of the energy industry, particularly oil & gas.
The efficiency-driven mission of its ‘natural resources’ unit is likely to be an improvement, but it is the ‘energy evolution’ unit which is arguably the more exciting; researching, developing and marketing a new frontier of renewable and biomethane energy types.
Furthermore, Eni will expand its retail portfolio of these alternative fuels, therefore increasing their availability to individual consumers and enterprises in an integrated, large-scale market.
“The fight against climate change and promotion of sustainable development are recognised by governments, civil society, investors and business alike as priorities for global development,” concluded Descalzi.
“Only those who pursue these in an innovative way will create value in the long term. We want to be main actors in a Just Energy Transition, in which we believe, and is central to Eni’s transformation.”
Ineos Energy sells Norwegian business to PGNiG for $615m
Ineos Energy is selling its oil and gas business in Norway to PGNiG Upstream Norway for $615 million with the deal covering production, licenses, fields, facilities and pipelines on the Norwegian continental shelf.
Ineos E&P Norge produces around 33,000 BOE per day from the Norwegian Sea with a 93% gas ratio, from 3 non-operated fields, Ormen Lange (14%), Alve (15%) and Marulk (30%). The business also holds 22 offshore licenses, of which 6 are operated, and has equity in the Nyhamna Terminal (8%).
The deal rebalances its portfolio in terms of oil and gas and moves Ineos Energy towards a more operated position.
The sale, subject to approval by the Norwegian Ministry of Petroleum and Energy and the Norwegian Ministry of Finance, is expected to complete later this year. All 52 employees of INEOS E&P Norge AS will transfer to PGNiG Upstream Norway AS following completion of the deal.
The PGNiG Group is the largest Polish oil and gas company employing 25,000 people worldwide. PGNiG Upstream Norway AS is an integrated exploration and production company established in Norway in 2007 and plays an important role in the supply of gas to Poland.
Brian Gilvary, Executive Chairman of INEOS Energy said: "The deal allows us to monetise a non-operated, predominantly gas portfolio at an attractive price compared to our hold value. This will further balance our portfolio of oil and gas and open up new opportunities to reinvest further into the energy transition. These assets are a very strong strategic fit for PGNiG and significantly extends their position in Norway."
It follows the announcement of the acquisition of the HESS business in Denmark, which consists of operated assets.
PGNiG Upstream Norway and its licence partners brought on stream another three wells in the Ærfugl field last November. This will enable the company to increase its total output of natural gas on the Norwegian Continental Shelf to almost 1 bcm in 2021.