London — Italian oil major Eni saw its oil and gas production volumes slip by 1% on the year in the fourth quarter following weaker gas sales and the termination of a gas production contract in Libya.
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The Rome-based company said production averaged 1.87 million b/d of oil equivalent in the fourth quarter due mainly to the loss of its Intisar gas field contract in June.
For the full year, Eni said production rose 2% to a record 1.85 boe/d, helped by ramp-ups at fields in Egypt, Indonesia, Angola, Congo and Ghana and higher production at the Kashagan field, Goliat field in Norway and Val d'Agri in Italy.
Excluding price effects, hydrocarbon production increased by 2.5% in the full year and fell 1.1% in the quarter, Eni said.
In October, Eni cut its guidance for production growth in 2018 to about 3% year on year after gas sales were hit in Venezuela, Libya and Ghana. The company had previously forecast an average 4% production growth to about 1.9 million boe/d for 2018, assuming a Brent price scenario of $60/b.
In the fourth quarter, Eni's natural gas output was 5,321 MMcf/d, down 5% on the year due to "exogenous factors in certain countries."
Despite the weaker-than-expected production performance, Eni posted an adjusted net profit of Eur1.46 billion ($1.65 million) for the fourth quarter, up by 55% on the year, and said it hit a cash flow per barrel target of $22.50 four years early.
Cash flows from operations totaled Eur4.33 billion in the quarter, up 32% from the 2017 period, and Eni said its cash neutrality stood at a Brent price level of $52/b.
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Downstream, Eni's said its refining margin index fell by 21% year on year in the fourth quarter to $3.40/b despite a significant decrease in the cost of the oil feedstock. Eni's refining throughputs were 5.55 million mt, down by 10% from the fourth quarter of 2017, driven by lower throughputs at the Taranto plant and maintenance at the Milazzo and Bayernoil refineries.
On reserves, Eni said it added 673 million boe to proved reserves, resulting in an organic reserve replacement ratio of 100%. Including asset deals, the reserve replacement ratio was 124% last year, equivalent to a reserves life of 10.6 years.
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