Italian oil company Eni has reported a net loss of €952 million ($1.04B) in the third quarter of 2015, compared to a profit of €1.7 billion ($1.86B) in the same period last year.
Eni’s adjusted net loss was €257 million ($281.8M), compared to a profit of €1.2 billion ($1.3B) in the same period last year.
To remind, Eni on Wednesday sold a stake in its compatriot oilfield services provider Saipem.
Claudio Descalzi, Chief Executive Officer, commented: “Saipem’s stake sale and deconsolidation marks another significant step in Eni’s transformation as we refocus on our core business. It increases our financial flexibility, freeing up resources to support our strategic plan. In the meantime we retain a significant share in Saipem and we will participate in its capital increase, strengthening its financial solidity and the execution of its new business plan.”
The company’s adjusted operating profit excluding Saipem was €0.6 billion in the quarter, down by 79% from the third quarter of 2014, and €3.51 billion for the nine months which is down 60%.
According to Eni, this reflected a lower contribution from the E&P segment (down by €2.3 billion, or 76%) driven by sharply lower oil prices (down by approximately 51%), partly offset by production growth, cost efficiencies and the depreciation of the euro against the dollar (down 16%).
Eni reported a strong hydrocarbon production growth which was up 8.1 percent to 1.703 million boe/d in the quarter (up 8.7 percent in the nine months).
Excluding price effects, production increased by 4.3 percent (up 4.9 percent in the nine months). Eni raised it output forecast for 2015 by about 9 percent, up from a prior guidance of more than 7 percent.
Descalzi also said: “In the quarter, despite a weak oil price environment, Eni continued to deliver strong growth in upstream and important progress in restructuring the mid and downstream businesses. In E&P, we have increased our full year production guidance for the second time this year, almost doubling our original target.
“We have also more than doubled our resources target after discovering 1.2 billion barrels of new resources over the past nine months. This has all been achieved at a lower exploration cost. Meanwhile, we have improved our guidance for G&P, while R&M and Chemicals are on track to deliver an excellent performance and positive cash generation in 2015. These businesses continue to benefit from the restructuring and efficiency initiatives we have been implementing and from the favourable pricing environment.
“These actions, along with the further optimization of our investments during the year and the improvement of our operational cost structure, will allow us to cover our investments in 2015 with organic cash flow, excluding Saipem and considering a 55 $/b oil price scenario.”
The outlook 2015 features a slowdown in the global economic growth caused by the reduced pace of activity in China and other emerging economies, Eni said on Thursday in its 3Q 2015 results report.
The fundamentals of the oil market remain weak due to oversupplied global markets and uncertainties about the resilience of demand, which in the course of 2015 has shown a noticeable recovery till now.
The company noted that crude oil prices for the FY 2015 were forecasted to be significantly lower than the previous year.
In the Exploration & Production segment, Eni says management will carry out efficiency initiatives relating to operating costs and optimize investments, while retaining a strong focus on project execution and time-to-market delivery in order to cope with the negative impact of a lower oil price environment.
Offshore Energy Today Staff