BAKU, Azerbaijan, October 31. Eni's adjusted operating profit from exploration and production (E&P) over the third quarter of 2023 amounted to 2,605 million euros, Trend reports.
According to the company, this represented a significant decrease of 39 percent, compared to the same period of 2022.
The primary culprits for this downturn were the decline in crude oil prices when measured in USD, with the Brent marker experiencing a 14-percent decrease during the reporting quarter, the company noted. Additionally, benchmark gas prices took a hit across all geographical regions, directly impacting the realized prices of equity production, notably in Europe.
However, the negative trend in prices was partially counterbalanced by a favorable 8-percent appreciation in the USD/EUR exchange rate. Positive volume and mix effects, along with disciplined cost management actions, also played a role in mitigating the adverse market conditions, Eni added.
Zooming out to the nine-month view of 2023, the adjusted operating profit for E&P stood at 7,460 million euros, a 45-percent decline when compared to the same period in 2022. The drivers for this decrease mirrored those of the third quarter. Moreover, it was exacerbated by the absence of contributions from the former Angolan subsidiaries, which had been transitioned to the Azule joint-venture in the third quarter of 2022. These results are now recognized below the EBIT (Earnings Before Interest and Taxes) line.
It's worth noting that Eni's adjusted operating profit of this segment encompasses the results of CCUS (Carbon Capture, Utilization, and Storage) and agro-biofeedstock, which reported a loss of 14 million euros in 3Q2023, and a loss of 44 million euros for 9M2023.
When considering the contributions of joint ventures and associates, the proforma adjusted EBIT for E&P in 3Q2023 amounted to 3.4 billion euros, reflecting a 38-percent year-on-year decrease. In 9M2023, the figure was 10 billion euros, marking a 40-percent decrease. These declines were further compounded by higher charges related to unsuccessful exploration wells.