Eni is carrying out talks with Angola and Mozambique to develop renewable energy projects. And it aims to triple the sales of LNG (liquefied natural gas) in the world. This was announced by Eni's managing director, Claudio Descalzi, during a hearing in the Productive Activities commission in the Chamber. According to the manager In the oil commodity "the financial component, beyond the fundamentals, plays a role: there is strong speculation, with short positions, at 48-50 you sell and at 46 you buy back". For this reason, the group confirms a conservative scenario on the oil price trend as outlined in the Strategic Plan, with 50-55 dollars a barrel for 2017 rising to 70 in 2019.
“Our model on renewables is very particular – he explained – we have not bought companies that make renewables but we have started by developing energy replacement projects. We use a lot of energy to produce energy: the gas we burn is replaced by photovoltaic or concentrating solar panels. We have between three and four gigawatts where we can intervene and this happens above all in Africa, where we already have agreements with Egypt, Tunisia, Algeria, Ghana and now we have ongoing discussions with Angola and Mozambique. For Angola the times will be short”.
As regards the group's accounts, Descalzi specified that the operating targets will make it possible to increase free cash flow to repay investments and dividends: “These operating targets lead to a capex cash neutrality target, cash neutrality for capex at 45 dollars per barrel with which Eni is able to repay all the investments which are around 8 billion a year. If we manage to maintain this cash neutrality by forecasting a price that will rise, because it will rise given that investments are decreasing, the free cash flow will also increase and therefore we will improve and have a robust financial structure that will allow us to repay investments and dividends”.
Furthermore, Eni's CEO underlined that Eni's Gas and Power division, penalized so far by long-term contracts indexed to the price of crude oil, aims to triple the LNG marketed, exploiting the gas discovered in the last three years: "We are negotiating all long-term contracts: in 2013 they were all indexed to oil, now 90% of contracts are linked to the reference hub and this is giving us a hand”. The manager ruled out the sale of the Gas and Electricity division: “It seems to me that the message is very clear. We plan to develop Eni gas and electricity. Someone - observed Descalzi - saw a signal from the sale of Belgium. We have other countries, Slovakia, France, Greece, in Belgium we sold because, apart from that it wasn't going very well, more than anything else Belgium was a country that had no potential. We can grow in France, we can grow in Italy , for this reason we have created an ad hoc company”. Descalzi has not ruled out a hypo or a joint venture within the framework of the development action; the hypo “not immediately – he specified – because it takes years, but I believe in society and in people”.
What Eni wants to do is “increase the gln and increase transport via methane by focusing on discovered gas. Now work will be done on the gas discovered in the last three years to go from 3,5 million tonnes marketed per year to 10 million LNG marketed which is 90% Italian gas. This is the business of the future. We are expanding to sell gas around the world”.
