|Bid||0.00 x 0|
|Ask||0.00 x 0|
|Day's range||8.79 - 8.79|
|52-week range||6.37 - 15.08|
|Beta (5Y monthly)||0.80|
|PE ratio (TTM)||N/A|
|Forward dividend & yield||0.86 (9.44%)|
|Ex-dividend date||23 Sep 2019|
|1y target est||N/A|
(Bloomberg) -- Eni SpA became the latest oil company to cut its long-term price assumptions, saying the coronavirus pandemic would have a lasting impact on the industry.Eni now sees benchmark Brent crude at $60 a barrel in 2023 real terms, down from a previous estimate of $70, the company said late Monday, warning of impairment charges. Rivals Royal Dutch Shell Plc and BP Plc have also cut price forecasts as the lockdown-induced slump batters their business, forcing producers to reassess the value of their assets amid a shift to cleaner energy.“Having considered the prospect of the pandemic having an enduring impact on the global economy and the energy scenario, Eni has revised its view of market fundamentals,” the Rome-based producer said in a statement. The company said it would stick to -- or even speed up -- its long-term climate strategy presented in February.The spread of the coronavirus across the world this year wiped out fuel demand, hitting oil majors’ earnings in the first quarter and threatening worse to come in the second. Despite a recent rebound in consumption in some of the worst-hit countries, resurgent waves of the virus show the recovery remains fragile.Lowering price forecasts “appears to be the flavor of the month,” Biraj Borkhataria, an analyst at RBC Europe, said in a note. At Eni, “we do not see its current dividend as compatible with its aggressive decarbonization strategy.”Last month, BP signaled it would make the biggest writedown on the value of its business since the 2010 Deepwater Horizon disaster, as it cut estimates for oil and gas prices in the coming decades between 20% and 30%. Two weeks later, Shell also said it had revised its mid- and long-term pricing outlook, and warned of a record writedown.For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.
The long struggling shale pioneer Chesapeake Energy (CHK) filed for Chapter 11 bankruptcy protection, while Italy's Eni SpA (E) acquired three wind farm projects.
(Bloomberg Opinion) -- It’s the mother of all payouts.The $75 billion that Saudi Aramco doles out in dividends every year dwarfs what any other listed company gives to shareholders. It’s roughly equivalent to the payouts from Exxon Mobil Corp., Royal Dutch Shell Plc, Chevron Corp., BP Plc, Total SA, PetroChina Co., Eni SpA, Petroleo Brasiliero SA and China Petroleum & Chemical Corp. or Sinopec — put together.That makes Chief Executive Officer Amin Nasser’s promise to continue that level of returns for the next five years an extraordinary vote of confidence in an oil market awash with uncertainties. Saudi Aramco will be prepared to borrow money to ensure that it meets its commitment this year despite oil prices heading into negative territory, he said this month.Running up debts to keep the dividend on track is standard practice for energy companies amid the carnage of 2020’s oil market — except for those, like Shell, which plan to cut payouts altogether. You only want to fund dividends out of borrowings, though, if you’re certain it’ll be a strictly temporary measure. The risk for Aramco is that upholding such a long-term promise to shareholders will bend its entire business out of shape, just when it needs to be especially nimble as crude demand slows and goes into reverse. The core of Aramco’s profitability is its astonishingly low production costs, with operating expenses amounting to not much more than $8 a barrel of oil and equivalent products last year. It’s remarkable how quickly the spending adds up, though. Royalties paid to the Saudi state alone added another $10 a barrel or so, while corporate income tax came to around $19 a barrel and dividends swallowed a further $15. Once all those tolls were paid, Aramco didn’t have a lot of spare change left out of $60-a-barrel oil, let alone the stuff in the $40-a-barrel range it’s selling at the moment.A firm dividend policy is an unusually inflexible cost. Unlike the royalties and income taxes levied as a percentage of Aramco’s revenues and profits, payouts don’t automatically shrink if the price of crude declines. If anything, the burden per barrel rises further when prices and output fall. Perhaps in recognition of this, the Saudi state has from the start agreed to forgo its portion of any payouts to the extent that receiving them would get in the way of Umm-and-Abu investors getting their share(1). That may help maintain a theoretical $75 billion-a-year payout but it makes a nonsense of the idea that all shareholders are equal, not to mention the principle that a dividend policy is some sort of a commitment to future earnings. It’s not clear, either, why a company with this get-out clause would want to take on debt to meet its promised payments, although Aramco’s borrowing costs are essentially identical to those of the Saudi state.Dividends aren’t the end of Aramco’s committed spending. Its purchase of a majority stake in chemicals company Saudi Basic Industries Corp., or Sabic, was completed this month, committing it to about $69 billion of payments over the next six years — even after a restructured plan pushed the bulk of the cash outflow toward the middle of the decade.Then there’s a potential $15 billion investment in Reliance Industries Ltd.’s Jamnagar refinery in India, $20 billion on a separate planned chemicals venture with Sabic, plus Sabic’s own $5 billion a year or so of capital spending which will now sit on Aramco’s balance sheet.Add it all up and the picture is troubling. It’s likely to be several years before operating cash flows rise above $100 billion a year again, even with Sabic’s business consolidated. If Aramco wants to spend three-quarters of that sum on its dividend while laying out $10 billion to $15 billion annually for Sabic’s finance and investment costs, then capex on its core operations will have to fall to a third or less of the $35 billion-odd that the company was spending until recently. For all that executives are confident of their ability to increase production at very low costs, that sort of belt-tightening would make the easiest route to higher profits — lifting crude output from its pre-Covid 10 million daily barrels to around 13 million — extraordinarily difficult to achieve.That path is likely to be constrained, anyway, by several years of weak demand growth as the world recovers from Covid-19. Not to mention the fact that Aramco’s importance to the oil market rests on the proposition that increases in its output, coordinated via OPEC+, should make prices move in the opposite direction, resulting in little by way of net revenue gains for the company.Unlike most of its competitors, Saudi Aramco doesn’t really need to be so focused on dividends. All but 1.5% of its shares are held by the same state that’s hoovering up royalty and tax payments further up the income statement. Riyadh shouldn’t really care how it’s getting paid, as long as it’s getting paid.That dividend policy looks more like a swaggering attempt to hold back the tide of an oil market on the edge of terminal decline. The quicker Aramco acknowledges that, the better equipped it will be to handle the coming turmoil.(1) Americans would call them "Mom-and-Pop shareholders."This column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.David Fickling is a Bloomberg Opinion columnist covering commodities, as well as industrial and consumer companies. He has been a reporter for Bloomberg News, Dow Jones, the Wall Street Journal, the Financial Times and the Guardian.For more articles like this, please visit us at bloomberg.com/opinionSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.
Future for all the oil and gas companies lies in renewable energy since investors are building pressure on the firms to lower net emissions.
With this acquisition, Eni (E) makes a significant progress in its decarbonization process. This is expected to significantly reduce its net emissions of greenhouse gases by 2050.
(Bloomberg) -- Libya took another step toward reviving its moribund oil industry by restarting production at a second important field after a five-month halt.Pumping began on Sunday at the El-Feel deposit, which had suspended operations due to the North African country’s civil war. El-Feel is resuming just a day after oil started flowing again from Libya’s largest deposit, Sharara.Any fresh barrels from these fields could complicate efforts by the OPEC+ producer alliance to limit global supply and push crude prices higher. The group agreed on Saturday to extend historic production cuts of 9.6 million barrels a day through July. Libya, with Africa’s largest oil reserves, is exempted from the cuts due to the country’s strife.The two southwestern fields previously pumped a combined 400,000 barrels a day, though they could take months to return to that level of output, if they reach it at all.“This is a situation we’ll have to look at in more detail once recovery actually starts,” Russian Energy Minister Alexander Novak said Monday at a press briefing held by the Organization of Petroleum Exporting Countries and its allies.Novak’s Saudi counterpart, Prince Abdulaziz bin Salman, said at the same briefing that it would be “unfair and unproductive” at this early stage to engage with Libya about its rising output. Libya is “a very committed member of OPEC+,” and “we wish them well,” Prince Abdulaziz said.Operations are gradually resuming at El-Feel, which is operated by a joint venture between Italy’s Eni SpA and the state-run National Oil Corp., according to a person with knowledge of the situation who asked not to be identified. The NOC wasn’t immediately available for comment.Output at the fields halted in January amid a military offensive by forces loyal to Khalifa Haftar, a commander based in eastern Libya. His fighters shut down most of the country’s crude production, which plunged from 1.2 million barrels a day to some 90,000. The collapse has cost the oil-dependent nation billions of dollars in lost revenue.READ: Haftar’s Losses Cloud Outlook for Libya’s Battered Oil IndustryThe resumption of production at the two fields follows setbacks for Haftar in recent weeks. His forces have lost strongholds in western Libya after battling for more than a year to seize the capital, Tripoli, from the United Nations-backed government of Fayez al-Sarraj.Haftar has accepted an Egyptian-sponsored cease-fire, though Sarraj’s administration said Sunday that government forces would continue their campaign to retake two key cities before any political negotiations to end the war.The NOC on Sunday said production at Sharara will resume at an initial 30,000 barrels a day and will take three months to return to full capacity, due to damage caused by the shutdown. However, a return to full production at either field probably won’t happen without a truce between Haftar’s Libyan National Army and Sarraj’s Government of National Accord.(Updates with comments from Russian oil minister in fifth paragraph; Saudi minister in sixth.)For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.
The coronavirus pandemic has indelibly impacted the global energy sector. Although the demand for oil has noticeably dropped and prices have plunged, the pace of shift to renewable energy from fossil fuel is still uncertain.
Ghana has directed Eni SpA and Springfield E&P to begin talks to combine their adjacent oil and gas fields, according to a letter seen by Reuters. The April 9 letter from Energy Minister John-Peter Amewu to the two companies says seismic data indicates that Eni's Sankofa offshore field, which entered production in 2017, and Springfield's recently discovered Afina field have "identical reservoir and fluid properties". It instructs the companies to begin within 30 days the process leading to the unitization, or joint operation, of the two fields in order to ensure efficient production and gives them 120 days to provide the ministry a draft agreement.
The situation on the ground in Libya is growing worse and forces of Field Marshall Haftar continue to effectively blockade all Libyan ports and export terminals
Production at the Fenja oil and gas field off Norway will be delayed due to the restrictions imposed as a result of the COVID-19 outbreak, operator Neptune Energy said on Tuesday. Fenja is the first project Neptune Energy is due to operate in Norway, rather than only be a partner in, with some 97 million barrels of oil equivalent (boe) in recoverable resources and an expected plateau production of 40,000 boe per day.
(Bloomberg Opinion) -- The anti-politics Five Star Movement may be part of Italy’s ruling coalition, but recent nominations to the boards of Italy’s state-backed companies look as pro-politics as ever.Oil major Eni SpA, utility Enel SpA and defense group Leonardo SpA are among those that get a boardroom review every three years. The quixotic hope is that appointments are made via a clear process and at arm’s length from politics. This time around, unfortunately, one gets the impression of low-level horse trading.Nominations seem to have been crudely carved up between the two sides of the ruling coalition, with the Democratic Party choosing the chief executives and Five Star nominating the chairmen. This turns good governance into a political balancing act.The CEOs have mainly been reconfirmed in their roles. Fair enough. Ditching well-regarded executives in a crisis risks creating instability when it can least be afforded. All the same, the Democratic Party could be seen as merely ratifying the candidates it appointed or confirmed last time around.At the chairmen level, new faces abound. Assuming these are Five Star placements, it’s hard to believe there’s no agenda in forcing change. Eni receives a commercial law professor, who is also on the board of the publisher of newspaper Il Fatto Quotidiano. The paper has recently been critical of CEO Claudio Descalzi, who is the subject of litigation relating to corruption allegations. Meanwhile, Enel gets a banking regulation lawyer, who advised the bailed-out Banca Monte dei Paschi di Siena SpA. Over at defense group Leonardo SpA, the new chairman is, sensibly enough, the head of Italy’s foreign intelligence services. But a different board nominee has created controversy over reported ties to foreign affairs minister Luigi di Maio.The acid test is what independent shareholders will make of all this. The Eni appointment sends a message to Descalzi that governance must be taken seriously and that he should not relax even if the litigation against him (which is now concluding) fails. The snag is that the oil industry is facing its biggest operational and strategic challenge in decades, with Brent crude at a lowly $21 per barrel and clean energy an investment imperative. If a crisis of this magnitude isn’t the time to pair Descalzi with an industry veteran, then when is?Over at Enel, outside shareholders will have questions about the strategic implications of installing a new chairman right now. Enel has been under pressure to combine its fiber broadband unit with that of Telecom Italia SpA, to help provide universal internet access — a central Five Star goal. Thus far, CEO Francesco Starace has been cautious about agreeing to a deal. The logic and terms of such a transaction would be a concern to Enel’s non-state investors who own the majority of the group.Of course, the chairman role at Italian state-owned companies is really more administrative than in, say, a U.K. company where the occupant can fire the CEO. At all three of these firms, CEO and chairman alike answer to the state. The government can phone up Starace and dictate aims any time. Besides, finding the perfect chairman or CEO is tough anywhere. The holy grail is someone who has relevant experience, strategic vision and can strengthen the diversity of the board. They don’t exactly grow on trees.But depoliticizing these appointments has to start somewhere. Pandemic bailouts will see more firms taking on the state as a shareholder. If supposedly anti-politics Italy is anything to go by, those holdings will be kept awkwardly close.This column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.Chris Hughes is a Bloomberg Opinion columnist covering deals. He previously worked for Reuters Breakingviews, as well as the Financial Times and the Independent newspaper.For more articles like this, please visit us at bloomberg.com/opinionSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.
* U.S. weekly jobless claims surge to record 3.28m Welcome to the home for real-time coverage of European equity markets brought to you by Reuters stocks reporters. You can share your thoughts with Thyagaraju Adinarayan (email@example.com), Joice Alves (firstname.lastname@example.org) and Julien Ponthus (email@example.com) in London. Initial claims for unemployment benefits rose to 3.28 million last week, that's close to 5 times more than in 1982, and over 3 times more than the Reuters consensus.
You can share your thoughts with Thyagaraju Adinarayan (firstname.lastname@example.org), Joice Alves (email@example.com) and Julien Ponthus (firstname.lastname@example.org) in London. You know you're in a heavy news cycle when a 2 trillion U.S. stimulus package is yesterday's news. Yep, all eyes now are on the U.S. job data to be released at 12h30 GMT.
Italy is close to approving measures to bolster the special powers it has over key industries to ward off unwanted foreign interest, officials said on Sunday. Since Feb. 23, when Rome imposed the first set of measures to contain the coronavirus outbreak, Milan's all-share stock index has fallen more than 35%. On Saturday, Italy recorded a jump in deaths from COVID-19 of almost 800, taking the overall toll in the world's hardest-hit country to almost 5,000.
Italian energy group Eni followed rivals on Wednesday by cancelling a share buyback and sharply cutting investments as a result of the coronavirus outbreak and falling oil prices. "Eni's priorities at the moment are safeguarding the health of our people and the communities we operate in, as well as our robust balance sheet and the dividend," Eni CEO Claudio Descalzi said in a statement. Oil prices plunged on Wednesday after Goldman Sachs said lockdowns to counter the coronavirus pandemic raised the prospect of the steepest ever annual fall in oil demand.
Royal Dutch Shell's onshore Nigeria subsidiary saw a 41% rise in the number of crude oil spills due to theft or pipeline sabotage in 2019, the group said in its annual report. Shell Petroleum Development Company of Nigeria (SPDC) also recorded a rise in the volume of oil spilt in the Niger Delta as a result of illegal activity to 2,000 tonnes in 2019 from 1,600 tonnes a year earlier. Of a total 164 SPDC spills of more than 100 kilograms in the delta, 157 were due to theft and sabotage, Shell said.
(Bloomberg Opinion) -- The collapse in crude prices has brought into relief the correlation between oil majors’ financial leverage and the valuation of their shares. It’s a relationship that looks like particularly bad news for the bigger European firms.Investors’ knee-jerk reaction to the downward lurch in the oil price was, naturally, more severe toward the companies that were more indebted. So shares in BP Plc, Royal Dutch Shell Plc, Equinor ASA and Eni SpA suffered more than Total SA and the two big U.S. majors, Exxon Mobil Corp. and Chevron Corp., when European markets closed on Monday.Investors’ worries about leverage are longstanding. The top five European oil majors have a ratio of net debt to total capital — a leverage measure known as gearing — averaging 28% based on their 2019 annual results. Meanwhile, Exxon and Chevron were at 20% and 15%, respectively, at the full year, according to Bloomberg data. Valuations based on forward earnings have historically been lower in Europe than in the U.S., and analysts have suggested that leverage may help explain why investors rate the European sector less favorably. As research from UBS Group AG noted ahead of Monday’s sell-off, balance-sheet strength would define which oil majors got “less badly hurt” in a market where there would be no winners.Despite these dynamics, the most levered of the European groups have been making relatively slow progress at debt reduction, and the latest crisis is only going to hamper this further. BP and Shell’s gearing is already above their own near-term targets of 20%- 30% and 25% respectively. These targets assumed a different environment, and preventing gearing going back up would require some painful compromises around uses of cash.Shell’s free cash flow in 2019 was only just enough to cover its dividends and debt interest, adjusting for working capital and excluding what it made selling assets. That was with oil prices in the $55-$70 per barrel range, against around $37 now. Capex was also already below the company’s stated floor, and the group has just gone through a colossal efficiency program following the 2016 acquisition of BG Group. As for debt reduction, this is a terrible market in which to be selling assets. True, Shell could scrap its share buyback program, but that would halt progress on reducing the share count and in turn the absolute cost of the dividend.BP, on the other hand, provocatively raised its dividend last month, anticipating cash from recently agreed-on disposals and from the sale of a putative $5 billion worth of assets yet to find buyers. But the number put on that fresh divestment program must now be in doubt.The oil crisis should force a fresh appraisal of gearing targets and dividend levels. But investors crave the income, and the pressure to maintain payouts will be immense. The firms with lower leverage may feel they have earned the right to let borrowings tick up as a way of maintaining investment and cash to shareholders. For others, Shell in particular, the room for maneuver is more limited. Defending the dividend is likely to mean finding more costs and capital expenditure to cut, just when investing in the energy transition is the top strategic priority.To contact the author of this story: Chris Hughes at email@example.comTo contact the editor responsible for this story: Nicole Torres at firstname.lastname@example.orgThis column does not necessarily reflect the opinion of Bloomberg LP and its owners.Chris Hughes is a Bloomberg Opinion columnist covering deals. He previously worked for Reuters Breakingviews, as well as the Financial Times and the Independent newspaper.For more articles like this, please visit us at bloomberg.com/opinionSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.
An oil price plunge means the world's top energy companies will have to review promises to return billions to investors, either by slowing down share buybacks or reintroducing non-cash dividends, analysts said on Monday. Brent crude was trading at around $36 a barrel, down around 20% by 1645 GMT on Monday, when analysts lowered share price forecasts for top oil and gas producers. The slide is expected to force a rethink of spending plans by boards that had cut costs in response to a 2014 oil downturn when OPEC opened wide the oil taps to try to protect market share following the U.S. shale oil revolution.
NEW YORK/LONDON, March 5 (Reuters) - Exxon and Chevron boasted to investors this week about booming U.S. oil production, illustrating how the gap has widened - at least in words - between top American oil and gas companies and their European rivals over efforts to transition to clean energy and fight climate change. U.S.-based Exxon Mobil and Chevron this week focused their investor outlooks on sharp growth in oil and gas output, a stark contrast from their European rivals including BP and Italy's Eni which last month unveiled plans to trim their traditional business and reduce greenhouse gas emissions.
Venezuela's oil exports rose 9% in February from the previous month, as some buyers rushed to take cargoes ahead of the expiration of a wind-down period as part of new U.S. sanctions on PDVSA and its trade partners, data from the state-run firm and Refinitiv Eikon showed. Washington imposed tough sanctions on PDVSA in 2019 and launched a strategy of "maximum pressure" this year to oust Venezuela's President, Nicolas Maduro, extending sanctions to PDVSA's main trade partner, Rosneft Trading, while making threats on other customers. Prior to sanctions, the United States was the biggest buyer of Venezuela's oil.