ROME: Italy’s Eni had a bittersweet start to 2018, with the oil major raising its upstream production forecast for the year but announcing Friday that its profits for the first quarter fell due to higher income tax.
The company raised its initial production growth forecast tp a 4% increase in production for 2018 to around 1.9 million b/d of oil equivalent.
Output growth will be driven by continuing production ramp-up at fields started up in 2017, particularly in Egypt, Indonesia and at the Kashagan field in Kazakhstan along with new field start-ups in Angola and Ghana.
A similar rise in production was seen in Q1, with output averaging 1.867 million boe/d, up 4% from the same period last year.
Some of the rise in output was offset by planned shutdowns in Algeria and the slowdown of activity in Venezuela, as well as declines from mature fields.
Eni’s upstream segment has been its most lucrative and the future looks bright, driven by successful exploration programs.
So far this year it has acquired interests in the Abu Dhabi concessions of Lower Zakum (5%) and Umm Shaif/Nasr (10%), and has also started output at the Ochigufu field in Block 15/06 off Angola.
Eni has enjoyed a few years of successful exploration especially in the gas-rich waters of the East Mediterranean after it discovered the giant Zohr gas field offshore Egypt.
It has doubled the production capacity at the supergiant Zohr field to 800 MMcf/d (22.6 million cu m/d), and is on track to boost capacity further to 2 Bcf/d by the end of this year.
Net profits for Q1 fell to Eur946 million from Eur965 million in Q1, 2017 mainly due to higher incomes taxes because of the Zohr transaction.
In March, Eni agreed to sell a 10% stake in the concession to the UAE’s Mubadala Petroleum.
Downstream, it expects a refining break-even margin of approximately $3/barrel by the end of 2018, leveraging on further supply and plant optimizations.
