BAKU, Azerbaijan, Apr.30
By Leman Zeynalova – Trend:
In the quarter of 2021 oil and natural gas production by Italian Eni averaged 1.704 million boe/d and decreased by 5 percent compared to the first quarter of 2020, Trend reports with reference to the company.
Net of positive price effects, the decrease was 6 percent driven by the need to comply with OPEC+ production cuts and marginal portfolio effects (overall effect of two percentage points), a spending slowdown in the development of reserves with lower contributions from Nigeria, Kazakhstan, and Angola, as well as mature field declines.
These negatives were partly offset by continuing production ramp-up in Mexico, better contribution of Libya and increased gas supplies to Egypt spurred by a demand recovery in the local market.
Liquids production in the quarter was 814 kbbl/d, down by 9 percent from the first quarter 2020. The reduction was due to an expenditure slowdown, the effect of OPEC+ production cuts, as well as mature field declines partly offset by continuing production ramp-up in Area 1 in Mexico, and growth in Libya.
Natural gas production in the first quarter amounted to 4,726 mmcf/d, slightly decreased compared to the first quarter of 2020. Lower production was partly offset by a robust recovery of natural gas demand in certain areas (mainly in Egypt), and growth in Algeria due to the start-up of the Berkine gas project.
In the first quarter of 2021, the recovery in the profitability of the Exploration & Production has strengthened as signaled by a 70 percent increase in the adjusted operating profit of €1,378 million from the fourth quarter 2020. The increase over the same period a year ago was also remarkable, up by 33 percent, driven by an improving crude oil price environment (the marker Brent up by 21 percent) supported by an acceleration in the global economic activity and active supply management by OPEC+ countries. Against this backdrop, E&P realized prices of liquids increased by 31 percent, whereas natural gas realized prices increased by just 6 percent due to time-lags in oil-linked pricing formulas.
The positive trend in the pricing environment was softened by a stronger Euro (up by 9 percent versus the USD) and lower production volumes driven by capital discipline in developing hydrocarbons reserves and the effects of OPEC+ production quotas. The result was helped by a reduction in the cost base and lower write-offs of exploration expenditures relating unsuccessful wells.
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