A Review of the Nigerian Energy Industry

Eni plans to sell Saipem stake

Eni chief executive Claudio Descalzi05 November 2014 – Italian oil and gas group Eni is working with Credit Suisse bankers to explore options for the sale of its stake in oil service company Saipem, sources close to the matter said on Tuesday.

Earlier on Tuesday Eni chief executive Claudio Descalzi told a parliamentary hearing the sale process had started and an adviser had been appointed without naming the adviser.

“It’s true, the bank is working on Saipem though it does not have a clear firm mandate yet,” one of the sources said.

Credit Suisse and Eni declined to comment to the news wire.

State-controlled Eni, which owns 43% of Saipem worth around $3 billion at current market prices, has previously said it was looking to sell its stake.

Eni, the only major with an oil service arm, is keen to get Saipem debt off its balance sheet to help underpin its dividend and proceeds from any sale would likely be used to accelerate its makeover into a slimmer upstream oil and gas player focused on reserve growth in sub-Saharan Africa and Asia.

“There have been manifestations of interest but there’s nothing concrete. Credit Suisse is still sounding out the market and studying the structure of the deal,” a second source close to the matter said, adding the operation was for 2015.

Descalzi said on Tuesday the group was not currently talking to anyone about the sale of its stake, including Russia’s Rosneft.

Last week Rosneft said it was waiting to see what Eni planned to do with its stake in Saipem before deciding whether to buy into the Italian oil services company.

“Eni will never, but never, sell to Rosneft,” the second source said, noting that sanctions in place against the Russian energy giant stemming from Moscow’s conflict with Ukraine mean it could not raise funding in Europe.

Saipem, which had net debt at the end of September of 5 billion euros, became a liability for Eni last year when half its market value was wiped out by two profit warnings and a damaging investigation into alleged corruption in Algeria.

A third source close to the matter said a Chinese oil company had in the past made overtures to buy the whole of Saipem but had been rebuffed.

Bankers said it would make a lot of sense for energy-hungry China to buy an oil services company like Saipem to get its hands on key deep water drilling skills.

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