Milan — Algeria, Egypt and Libya will be Italy’s main gas suppliers for the next few years, Eni’s head of natural resources told Reuters, adding that the energy group would invest heavily in Africa both in exploration and in new low-carbon projects.
Last year Eni, Italy’s largest importer of natural gas, reacted fast to a fall in the supply of Russian gas by shipping increasing volumes from Africa to its home country.
This shift, made possible by the group’s decades-long presence on the continent, has made Algeria Italy’s largest supplier of gas, replacing Russia.
“Africa is a continent where much investment is needed even in the traditional exploration and production business,” Eni’s Natural Resources Chief Operating Officer Guido Brusco said in an interview with Reuters.
In the next few years, the company sees Algeria and Egypt’s role consolidating and a potentially larger role for Libya and several sub-Saharan countries, including Republic of Congo and Angola, Brusco said.
In this context, Eni is rolling out multi-billion investments to guarantee exports to Italy, serve the African market and get ready to ship more gas to Europe,
“Fields are declining but 80% of global energy demand is still based on fossils, so while cleaner sources are being developed it’s necessary to manage oil and gas reduction… particularly in Africa where the population is growing and development is accelerating,” Brusco said.
Eni is Africa’s biggest international gas producer, he said, adding that more than 90% of the fuel the group extracted in the continent last year went to the African market.
This percentage could fall in the next few years as the group’s production in the continent increases and there is more gas available in excess of African needs.
NO ISSUES AT ZOHR FIELD
In Egypt, where Eni’s production stood at 346 kilo barrels of oil equivalent per day (KBOED) last year, the company will invest around $3.5 billion over four years in activities including exploration and management of existing fields, Brusco said, shrugging off fears of production issues for Zohr field.
“The field’s performance is in line with our plans and better than that of bigger fields in Russia”.
In Algeria Eni sees its production growing to over 120 KBOED this year from 95 KBOED.
The group’s export from Algeria to Italy is planned at around 15 billion cubic metres (bcm), up from 12 bcm last year, depending on demand, Brusco said.
In Libya, where Eni produced 165 KBOED last year, it plans $8 billion of investment.
Having revoked the force majeure it declared in 2014, Eni will re-start exploration works soon and drilling could follow in a few years, he said.
Turning to sub-Sahara, Brusco highlighted Ivory Coast’s Baleine, a flagship project for Eni to create the first gas and oil field with net zero emissions in the whole of the continent.
“The production started last month, less than two years from the discovery, and is going very well,” he said.
Besides exploration and production, Eni is also investing in energy transition, focusing on projects such as renewables and farming in Africa to produce agricultural feedstock for its biofuel business, and is considering to open bio-refineries in the continent.
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Reporting by Francesca Landini, editing by Gavin Jones and Susan Fenton – Reuters