Eni SpA on Thursday said it plans to increase its dividend, as
the Italian energy company seeks to boost shareholder returns and
cut spending amid a production slowdown in its main operations in
Italy's largest oil and gas group plans to increase by 1.9% the
dividend it pays in 2014 and by another 1.8% to 1.12 euros ($1.52)
the payout in 2015. The company also said it expects to reduce its
four-year capital expenditure plan by 5% to EUR53.8 billion,
compared with its March estimate of EUR56.8 billion for
"We have an ambitious plan...which also aims to remunerate our
shareholders with a progressive distribution policy," Chief
Executive Paolo Scaroni said in a telephone interview.
Eni said it would focus on developing oil and gas discoveries,
which would allow it to boost production in coming years. The
company sees new daily production of 500,000 barrels of oil
equivalent by 2017.
Earlier Thursday, Eni announced a vast oil discovery in the
Republic of Congo, as the company seeks new fields in Africa aimed
at offsetting lower production in its key operational countries of
Libya and Nigeria. Eni estimated the offshore finds hold 1.2
billion barrels of oil and 30 billion cubic meters of gas, with an
overall potential of about 2.5 billion barrels of oil
"This is an elephant find," said Mr. Scaroni in the interview,
using the oil industry phrase that denotes a discovery that has at
least 500 million barrels of oil equivalent.
The company has been affected by disruption to production in
countries where it has significant assets--such as Libya, which is
embroiled in political unrest, and Nigeria, where oil theft is
Eni has been successful in partially offsetting these
disruptions with discoveries in new exploration areas in
Mozambique, where its biggest gas find is located.
"Today's announcement of a further discovery offshore [Republic
of]Congo will add new material oil volumes as soon as 2016," said
Bernstein Research analyst Oswald Clint in a note.
The company said it predicts an average annual production growth
of 3% in the 2014-2017 period, while the average yearly growth
forecast for 2017-2023 is 4%. Last March, it had estimated a 3%
annual growth in the 2013-2016 period and a 4% average for
Eni said it expects this year's output to be in line with 2013's
Eni on Thursday said its fourth-quarter net profit dropped 14%,
as the company suffered disruptions to its large business in
Africa, weaker refining results and the appreciation of the euro
against the U.S. dollar.
The company's profit, adjusted for changes in the value of oil
inventories and one-off gains and losses from asset sales, was
EUR1.30 billion ($1.78 billion), compared with EUR1.52 billion a
year earlier. Net sales from operations slipped 19% to EUR26.3
Eni joined its peers in reporting dismal earnings for the last
quarter, as production disruptions in Africa, higher costs and
increased competition in refinery activities, amid weak demand, hit
results. France's Total SA said Wednesday its net profit for the
period fell 31%. Royal Dutch Shell PLC issued its first profit
warning in a decade in January, and BP PLC also said net earnings
Selina Williams in London contributed to this article.
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