Italian oil company Eni, posted a net loss of €803 million in the first quarter of 2016, down from a net profit of €454 earned in the first quarter last year.
Adjusted net loss was 479 million euros, down from a net profit of 454 million euros a year ago. According to Bloomberg, a business news website, the result was worse than expected by analysts surveyed by Bloomberg.
The company attributed the result to a prolonged slide in crude oil prices.
In the first quarter of 2016, Eni’s hydrocarbon production was 1.754 million boe/d, 3.4% higher compared to the first quarter of 2015.
Production was boosted by new fields’ start-ups and production ramp-up at fields started in 2015 mainly in Angola, Congo, Egypt, Venezuela, the United States and Norway, as well as increased production in Iraq. These positive effects were partly offset by a decline in mature fields, Eni said.
Eni acknowledged that the oil prices have rebounded somewhat after hitting 13-years lows of below $30 per barrel at the beginning of 2016, reaching the the 40 dollar-mark thanks to signs of a partial easing in the global glut.
However, it said that the fundamentals of the oil market remain weak with the price of crude oil exposed to possible negative pressure due to the uncertainties surrounding the pace of energy demand growth in the short and medium term.
“In order to cope with the anticipated negative impact of the scenario on the E&P results from operations and cash flow, management is planning to increase efforts to optimize capex and reduce operating costs by exploiting the deflationary pressure induced by the fall in crude oil prices,” Eni said.
Eni said it would aim to reduced capital spending by 20% y-o-y in 2016, by re-phasing and rescheduling capital projects, being increasingly selective with exploration plays and renegotiating contracts for the supply of capital goods in order to cope with the slump in crude oil prices.
Offshore Energy Today Staff