Eni building production, cutting project costs

Offshore staff

NEW YORKEni has discovered 13 Bbbl of new resources since 2008, CEO Claudio Descalzi told investors during a recent briefing.

This is 2.5 times the company’s equity production levels over the same period. All the discoveries are conventional and across 10 different basins.

Every three years, Descalzi added, the company has discovered a giant or supergiant field, and has been adding new resources at a unit cost of $1.20/bbl, 20% of the industry average.

At the same time Eni has prioritized monetization of its finds by starting production quickly while looking to sell down stakes in these fields.

The projects the company has or will start in 2016-2017, along with Kashagan in the Caspian Sea and Goliat in the Barents Sea, will produce at plateau more than 500,000 b/d for the company and should generate an overall operating cash flow of more than €4 billion ($4.2 billion) in 2018 in a $60/bbl price environment.

Eni has reduced the technical costs of its projects: this, combined with fasttrack developments, has resulted in a breakeven figure of $27/bbl.

Despite the reduction in upstream capex, which the company plans to cut further, Eni’s output should reach an all-time high output of around 1.84 MMboe/d in 2017, Desclazi concluded.

12/23/2016

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