Eni poised for strong growth, emissions reduction in 4yr strategic plan
Eni, the Italian energy giant, has unveiled its latest 4-year plan, setting out its vision for the future of its Natural Resources division. The plan is aimed at delivering superior returns, accretive growth, and falling emissions, driven by the company’s leading exploration and integrated fast-track projects.
The Natural Resources division has been a key driver of Eni’s growth in recent years, and the company is confident that it will continue to deliver strong results in the years ahead. The division’s mid-stream gas business, in particular, has proved its resilience and will increasingly benefit from its re-shaped business with higher levels of equity gas supply.
One of Eni’s key priorities is to meet the emissions reduction challenge in its own operations. To this end, the company is building a new carbon capture business and integrating it with its biorefining operations by developing its innovative agri-hub network. By doing so, Eni aims to reduce its net carbon footprint (Scope 1+2) by 65% by 2025 compared to 2018, confirming that it is on track for net zero emissions by 2030.
Eni is also committed to reducing its methane emissions, with a target of keeping its upstream intensity well below 0.2%. The company plans to set a new emissions reduction target after completing a measurement campaign on its operated assets later this year.
Exploration is another key area of focus for Eni. The company aims to add 2.2 billion barrels of oil equivalent (boe) of new resources in the 4-year plan, of which 60% will be gas. The unit exploration cost (UEC) is expected to be around $1.5/boe. Eni will invest €2.1 billion over the next 4-year period in exploration, targeting 60% of discoveries to be gas.
Eni’s production is expected to grow at an average of 3-4% over the 4-year plan period and then plateau to 2030. The company plans to progressively increase the share of gas in its portfolio to 60% by 2030. Eni expects to have added around 800,000 barrels of oil equivalent per day (boed) from start-ups and ramp-ups with high returns, short paybacks, and leading unitary costs by 2026.
Eni will continue to focus on fast time-to-market projects leveraging its high-quality portfolio, which has confirmed low technical costs and high cash flow per barrel, placing it at the top of the industry. Eni plans to invest €6-6.5 billion on average per year during the plan period.
Eni will continue to follow its dual exploration model, targeting exploration with high levels of equity participation in areas with existing activity and infrastructure such as North Africa, West Africa, and the UAE. The company expects around 90% of its exploration spend to support its track record of leading value creation.
Eni’s Gas & Power (GGP) division will continue to play a key role in the company’s growth strategy. Eni plans to fully replace Russian gas volumes by 2025, leveraging its strong relationships with producing countries and its fast-track development approach to ramp up volumes from Algeria, Egypt, Mozambique, Congo LNG, and Qatar. Contractual LNG volumes are expected to exceed 18 million tonnes per annum (MTPA) by 2026, up from 9 MTPA in 2022.
Eni expects GGP to generate EBIT (earnings before interest and taxes) totalling above €4 billion over the 4-year plan period, higher than in the previous plan, leveraging on a more diversified and flexible portfolio and a larger equity component. This outcome incorporates Eni’s assumption of normalising gas markets
