Is Eni S.p.A. (E) a great pick from the value investor's perspective right now? Read on to know more.
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.
Claudio Descalzi has been the CEO of Eni S.p.A. (BIT:ENI) since 2017. This report will, first, examine the CEO...
(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.
BASRA, Iraq/BAGHDAD, April 30 (Reuters) - Iraq will struggle to cut crude output a record 1 million barrels per day (bpd) or 23 % from May under OPEC's deal with Russia and other producers, and Baghdad has yet to agree with oil majors about where the cuts will come from, industry sources said. Majors such as BP, Exxon Mobil, Lukoil and Eni produce the lion’s share of Iraq’s output and have so far resisted calls for cuts, prompting Iraqi officials to review options such as asking the companies to bring forward field maintenance. Less than full compliance by Iraq could hurt the OPEC+ group's efforts to curtail supply by as much as 9.7 million bpd to support oil prices that have crashed along with fuel demand during the coronavirus outbreak.
Italian energy group Eni is working with investment bank Citi to sell natural gas assets in Australia that could fetch up to $1 billion, sources said. The sale, which is expected to be launched next week in a two-round process, could see Eni all but exit from Australia. Eni declined to comment, while Citi was not immediately available for comment.
Buenos Aires City, April 08, 2020 -- Moody´s Latin America Agente de Calificación de Riesgo S.A., ("Moody´s") downgraded the ratings and changed the outlook to negative of 9 utilities and infrastructure companies operating in Argentina. The rating action follows the downgrade of the Government of Argentina's senior unsecured ratings to Ca from Caa2, and outlook change to negative from ratings under review for downgrade, and reflects the strong credit linkages and exposure these companies have to Argentina's regulations and operating environment.
Italy plans to extend the special powers it has to shield key industries from unwanted foreign interest, a senior government official said on Saturday, adding that the measures would apply to investors from other European Union nations. The plan reflects concerns in Italy's ruling coalition that foreign investors could take advantage of the recent collapse of share prices triggered by the coronavirus crisis to buy assets in industries deemed as strategic for the country. Cabinet undersecretary Riccardo Fraccaro said on Saturday that Rome would expand its vetting powers to the whole banking and insurance sector, as well as the health and food industry.
Iraq has yet to inform its regular oil buyers of cuts to its exports, suggesting it is struggling to fully implement an OPEC deal with Russia and other producers on a record supply cut, traders and industry sources said. Less than full compliance by Iraq, as well as by smaller producers such as Nigeria and Angola, could hurt the OPEC+ group's efforts to cut output by 9.7 million barrels per day from May 1, equivalent to about 10% of world demand before the coronavirus crisis led to a slide in consumption and prices.
Buenos Aires City, April 08, 2020 -- Moody´s Latin America Agente de Calificación de Riesgo S.A., ("Moody´s") downgraded the ratings and changed the outlook to negative of 9 utilities and infrastructure companies operating in Argentina. The rating action follows the downgrade of the Government of Argentina's senior unsecured ratings to Ca from Caa2, and outlook change to negative from ratings under review for downgrade, and reflects the strong credit linkages and exposure these companies have to Argentina's regulations and operating environment.
Italian oil and gas group Eni said on Monday rockets that landed in southern Iraq had fallen some distance from its Zubair field and operations continued. "All personnel of the field are in a safe condition and production hasn't been affected," an Eni spokeswoman said. Three rockets landed on Monday near U.S. oil service company Halliburton's site in Basra, without causing casualties, the Iraqi military said earlier on Monday.
Even the 'Big Oil' companies don's seem to be immune to this price crash as evidenced by spending cuts by supermajors Royal Dutch Shell (RDS.A) and TOTAL S.A. (TOT).
Lower production volumes and average realized prices of liquids and natural gas hurt Eni's (E) Q1 earnings.
Despite reduction in 2020 capital budget, EOG Resources (EOG) expects its production volumes to remain the same as in 2019, reflecting strong operational efficiencies.
Eni (E) says it will reconsider the stock buyback program once the Brent crude price recovers to at least $60 per barrel.
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.
With downward revision of capital budget, Eni (E) expects production volumes to decline year over year in 2020.
British investor Legal & General said on Wednesday it would vote against re-electing the chair of Exxon Mobil at a shareholder meeting on May 27, saying the U.S. oil giant had not done enough to tackle climate change. Legal & General Investment Management (LGIM), which has $1.5 trillion under management and owns about 0.5% of Exxon or shares worth about $1 billion, said the U.S. company had not disclosed its full greenhouse gas emissions and had failed to set company-wide emissions reduction targets.
(Bloomberg) -- Royal Dutch Shell Plc and Eni SpA won dismissal of a $1 billion U.K. lawsuit brought against them over allegations they knew about bribes in a Nigerian oil deal.A London judge ruled Friday that England has no jurisdiction to try the case as it involves the same essential facts as a separate Italian criminal case.The ruling is a victory for the oil companies, which have been clouded by accusations in a years-old dispute over exploration rights to a tract in the Gulf of Guinea called Oil Prospecting License 245 that has spread to courtrooms throughout Europe.The Nigerian government claims that money the companies paid to acquire the oil exploration license in 2011 was diverted to bribes and kickbacks. It says Shell and Eni are partly responsible for the behavior of Nigerian officials who used a $1.1 billion payment to acquire the oil block for personal enrichment. Shell and Eni have denied any wrongdoing.“We maintain that the 2011 settlement of long-standing legal disputes related to OPL 245 was a fully legal transaction with Eni and the Federal Government of Nigeria, represented by the most senior officials of the relevant ministries,” Shell said in a statement.Eni said it was pleased with the decision and added that the U.S. Securities & Exchange Commission and U.S. Department of Justice have also closed investigations into the Italian company’s involvement with OPL 245.The Nigerian government said in its own statement that the Italian criminal case has a completely separate legal basis from the U.K. civil case and it would seek permission to appeal.The ruling does not affect ongoing Italian criminal proceedings, where Nigeria has a separate legal claim.(Updates with Eni comment in sixth paragraph)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 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