MILAN – Eni (NYSE: E) could pocket more than 8 billion euros ($8.7 billion) in net proceeds from disposals by 2027, CEO Claudio Descalzi said on Friday after the Italian energy group reported second-quarter results ahead of consensus.
“We have been executing our disposal plan much faster than anticipated,” Descalzi said, speaking with analysts on a post-result conference call.
In its updated business plan through 2027, the group said it aimed to collect around 4 billion euros from oil and gas assets sales and a similar amount from minority stake sales and initial public offerings of its low-carbon units.
On Friday, Eni’s stock (NYSE: E) rose by over 3% due to prospects of increased proceeds from asset sales and improved returns for investors.
After reporting a smaller-than-expected drop in second-quarter net profit, Eni promised to accelerate its share buyback and hinted it may nudge it up in the coming months.
In the last few months, Eni (NYSE: E) agreed to divest upstream assets in Alaska, created a business combination with Britain’s Ithaca spinning off its North Sea operations, and moved forward with onshore assets sale in Nigeria.
It also attracted the investment of Swiss fund Energy Infrastructure Partners in retail and renewable unit Plenitude.
This week, Eni said it was entering exclusive talks to sell up to 25% of its biofuel unit Enilive to U.S. investment firm KKR, adding it could also dispose of an additional 10% of the unit.
“Can we go above 8 billion? … Maybe yes,” Descalzi said, adding that the group’s upstream portfolio could be the most interesting area to look at to find more potential divestments next year, once ongoing deals are wrapped up.
Sources told Reuters in May the group could spin off stakes in high-potential oil and gas projects, including in Indonesia and Ivory Coast, to help finance their development while focusing more capital on low-carbon activities.
Such deals would expand Descalzi’s strategy to split some of Eni’s operations into separate entities, or satellites, to raise money and tap specialized investors.
So far Eni (NYSE: E) has created several satellites, including Norway upstream group Var Energi, Angola’s joint venture with BP Azule, the combination with Ithaca and low-carbon Plenitude and Enilive.
($1 = 0.9216 euros)
(Source: Reuters)
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