Eni cuts oil and gas output, spending targets amid coronavirus hit
Italian energy group Eni lowered its forecast for production and investments on Friday as the coronavirus crisis has driven down oil and gas demand and hammered crude prices.
In a statement on first quarter results, it said it would spend about 30 percent less this year than planned and expected production to be 1.75 million-1.8 million barrels of oil equivalent per day.
The group, which said in March it would cut capital expenditure in 2020 by 25 percent, said on Friday it expected spending in 2021 to be 30-35 percent lower than original plans. “The period since March has been the most complex period the global economy has seen for more than
70 years. Like everyone, we expect a complicated 2020,” Eni CEO Claudio Descalzi said.
Demand for oil and gas has tumbled as governments have imposed lockdowns to stop the coronavirus spreading, prompting energy companies to slash investment and conserve cash. Many firms are raising extra cash in debt to weather the storm.
On Thursday, Eni approved the issue of bonds for up to €4 billion ($4.30 billion).
The company, which forecasts adjusted cash flow of €7.3 billion based on benchmark Brent crude at $45 a barrel, said it was sitting on a liquidity cushion of €16 billion. Brent was trading at half that level on Friday.
In the first quarter, adjusted net profit fell by 94 percent to €59 million, below an analyst consensus provided by the company of around €240 million.