By LIAM MOLONEY
ROME -- Italian oil major Eni on Friday said it expected
2012 to be challenging due to the continuing economic slowdown
in the euro zone, and to face the possibility of worsening
financial market conditions as it plans to boost its
"The troubles on the financial markets are not over," said
chief financial officer Alessandro Bernini on a conference call
to comment on first-quarter results, explaining why Eni plans
to pump up its financial firepower.
The extra liquidity would come from the loans Snam will pay
back to Eni once the two companies are split as part of the
Italian government's new rules to increase competition, and try
to reduce the country's energy costs.
Snam used Eni to finance its debts but must repay Eni net
debts of more 11 billion once the two companies part
On the energy markets, Eni said gas demand is expected to be
weak due to the economic slowdown and increasing competition
from renewables. The Italian company has one of the biggest gas
operations in Europe.
Eni's comments come as Standard & Poor's lowered its
rating for Spain and as various key euro zone nations released
weak economic data, indicating a bumpy ride for the region's
"Against this backdrop, management expects ongoing margin
pressures to continue in 2012 and reduced sales opportunities
due to rising competition," the Rome-based company said in a
Eni said it expects global gas sales in 2012 to be roughly
in line with last year. The company said it aims to maximize as
much as possible the benefits from its recent gas renegotiation
deals with its biggest suppliers.
Adjusted net profit, which is closely watched by analysts
because it excludes the value of oil inventories, rose 13% to
2.48 billion compared with a year earlier, ahead of an
average forecast of 2.26 billion. Net sales from
operations rose 16% to 33.48 billion over the period.
Kepler Capital Markers analyst Roberto Mascarello said the
results were better than expected thanks to earnings from the
exploration and production division,
which were among the best ever reported by Eni, good volumes
from Libya, and high crude prices.
As oil fields that are easier to tap start to dry up around
the world, Western oil majors are turning to new regions that
have previously been off limits.
Wednesday, Eni followed in the footsteps of ExxonMobil with
the signing of a major offshore exploration deal with state oil
company OAO Rosneft for acreage in Russian waters in the
Barents and Black seas.
Eni chief executive Paolo Scaroni said the Rosneft deal
would underpin the company's exploration opportunities for "many
years to come" and further boost Eni's long-term growth
The Italian company said it expects 2012 hydrocarbon output
to grow, compared with 2011, driven by the recovery in Libya,
which is forecast to be back at pre-war output levels in the
second half of the year.
Excluding the Libyan comeback, Eni estimates production
growth to be "moderate."
Dow Jones Newswires