Italy's Eni to review Middle East projects, including deals with ADNOC in UAE

Italy's Eni will review its projects in the Middle East, including deals with the Abu Dhabi National Oil Co. in the UAE, as it seeks to cut capital spending due to the coronavirus outbreak and the oil price crash, a company official said Tuesday.

Eni has a 25% stake in ADNOC's Ghasha ultra-sour gas project and a 20% stake in ADNOC Refining among other projects.

"Some major projects like Ghasha and some of the ongoing production projects we are reviewing and we will be having joint reviews with our partners and with our main partner ADNOC," Fuad Krekshi, Eni's executive vice president for Middle East, said in a media roundtable.

"We are looking at all options, all possibilities with different scenarios."

Eni will review its 2020-2021 projects and weigh a "strong reduction" in capex and costs, CEO Claudio Descalzi announced on March 18. Eni had a previous capex guidance of around Eur8 billion/year ($8.64 billion). The Rome-based major is planning three oil and gas field start-ups this year along with seven FIDs, four of which are in the UAE.

Regional presence

"We are reviewing all the projects that we have in the region," said Krekshi. "For projects that we have not commenced, we are deferring,"

Eni has been expanding its presence in the UAE and the Middle East overall.

It first entered the UAE upstream sector in March 2018 when it landed a 10% interest in Umm Shaif and Nasr concession and a 5% interest in the Lower Zakum concession.

Last year it won two 35-year concessions for the acquisition of a 70% stake in the Offshore Block 1 and Offshore Block 2 exploration areas as part of ADNOC's first ever-competitive license bidding round.

In addition to the UAE, Eni's Middle East presence also includes Oman, Bahrain, Lebanon and Iraq.

ADNOC, the UAE's biggest oil producer pumping some 3 million b/d, plans to supply the market with over 4 million b/d in April as it speeds up production capacity expansion projects. It is also accelerating ramp up to 5 million b/d production capacity, which was originally slated for 2030.

Over the past two years, ADNOC has awarded concessions to a variety of oil majors from across the globe to help meet its oil and gas targets.