ENI: A Possible New Giant in Middle Africa?

 

cropped-limes-club_300                                                 a cura di Damiano Messina   0844946E-2C5B-421D-9DB8-90E5F5E1F60B

 

With a presence in 71 countries and growing billionaire profits each year, ENI is a major Oil and Gas company. Its interests are rooted in each corner of the planet and, in the attempt of climbing the ladder of the top energy companies, ENI consistently works to expand and create new business worldwide. This is particularly true for Africa, where the Six-Legged-Dog landed in early 20s and established the foundations of its empire in late 50s [1]. Nowadays ENI’s investments in Africa keep on paying off and the latest estimates observe that the opportunities to growth in the region are particularly promising. For istance, ENI’s global crude oil production hit a new record in 2017: the company produced an average of 1.816 million barrels of oil equivalent per day, more than a half of which came from Africa.

Eni currently operates in 15 African countries. Although the exploration and extraction of hydrocarbons, often carried out in partnerships with national petroleum companies as well as with other majors of the oil industry, remain the most lucrative activities within the continent, ENI is also engaged in meeting specific national or regional needs, for example by developing water desalination and electric plants [2]. These activities are currently being carried out in 15 African countries. As far as investments and daily extraction are concerned, the core of ENI’s operations is concentrated mainly in Libya, Egypt and South Africa, but ENI has been increasing its attention in Middle Africa during the last 10 years.

Angola, the second oil producing African country after Nigeria and one of the 5 African countries in terms of crude oil reserves, hosts ENI’s offices and plants since 1980 and represents a key region for ENI’s regional expansion [3]. ENI’s crude oil extraction there has almost doubled in the last 4 years – passing from an average of 84 thousand barrels per day (bpd), approximately 5% of the country’s total production – to 150 thousands in early 2018 [4]. This achievement was due to a successful combination of exploration activities and financial acquisitions [5]. In particular, ENI’s decision to triple its property rights over Cabinda in 2017, the oil rich Angolan exclave about 60% of the total national hydrocarbon is produced, significantly strengthened the position of the company in the region [6].

ENI’s expansion was also remarkable in Congo-Brazzaville, where the daily production increased by more than 30 thousand barrels of crude oil from 2006 to 2016, and where the company aims to reach 14 thousands bpd by 2019. The latter objective took shape above all after the recent fortunate discovery in the offshore Marine XII block, a news that made the estimation of the reserves account up to 3.5 billion of barrels [7].

During the last ten years ENI’ strategy in Middle Africa pushed not only for an extension of its ongoing operations within the region, but also for landing on new businesses that have been traditionally dominated by other majors. An example is represented by the two recently opened offices in Democratic Republic of Congo and Gabon, respectively in 2010 and 2009. The penetration of ENI in DRC started through the acquisition of the majority interest in the Lower Congo Bas region to run exploration activities, transaction that made ENI one of the main operators in the area [8]. As far as Gabon is concerned, the 2014 gas field discovery paves the way for the enhancement of the Italian company’s role in the region [9].

The ongoing strengthening of ENI’s position within Middle Africa is likely to continue in the near future and might be boosted by new discoveries and acquisitions. There is no doubt that, in entering new markets and businesses in the region, the Six-Legged-Dog has to be careful not to step on other major’s feet, unwilling to give away valuable shares of the highly lucrative African market.

 

List of sources:

[1] https://www.ilpost.it/2015/04/08/eni-libia/.

[2] https://www.eni.com/docs/en_IT/enicom/sustainability/cooperation-model_EniFor-ENG-2016.pdf.

[3]  http://investingroup.org/data/103/top-5-african-countries-by-proven-crude-oil-reserves/.

https://www.worldatlas.com/articles/top-10-oil-producing-countries-in-africa.html.

[4] https://www.eni.com/docs/it_IT/eni-com/documentazione-archivio/documentazione/pubblicazioni/paesi/eni_angola_2015.pdf?lnkfrm=serp.

https://www.eni.com/en_IT/media/2018/03/eni-announces-start-up-of-oil-production-from-ochigufu-field-in-offshore-angola?lnkfrm=asknow.

[5] https://www.eni.com/it_IT/risultati.page?question=da+quando+eni+svolge+attivit%C3%A0+di+esplorazione+in+angola%3F.

https://macauhub.com.mo/2018/11/08/pt-sonangol-e-grupo-eni-acordam-expansao-de-bloco-petrolifero-em-angola/.

https://www.eni.com/en_IT/media/2018/05/eni-completes-the-ramp-up-of-ochigufu-field-offshore-angola.

[6] https://www.eni.com/en_IT/media/2017/11/eni-becomes-operator-of-cabinda-north-and-strengthens-its-presence-in-the-upstream-downstream-trading-and-renewable-sectors-in-angola.

[7] https://www.eni.com/docs/en_IT/enicom/publications-archive/publications/reports/reports-2011/EniAnnualReport_20F_2011.pdf.

[8] https://www.euro-petrole.com/eni-enters-the-democratic-republic-of-congo-through-the-acquisition-of-55-of-the-ndunda-block-n-i-4377.

https://www.eni.com/docs/en_IT/enicom/publications-archive/publications/reports/reports-2011/EniAnnualReport_20F_2011.pdf.

[9] https://www.eni.com/en_IT/media/2014/07/eni-discovery-of-gas-and-condensates-in-offshore-gabon?lnkfrm=asknow.

 

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