Eni Gains Momentum in Iraq – Analyst Blog

Eni SpA (E) is gaining momentum at Zubair oilfield, Iraq. It expects to reach production volumes of at least 250,000 barrels per day (bpd) from the current rate of 180,000 bpd.

 

Eni lead consortium won the contract for developing the oilfield last year. Other players include US-based Occidental Petroleum and South Korea’s Kogas. This was a 20-year term contract, which may extend up to 25 years. During this time period, the consortium plans to invest a total sum of $20 billion.

Eni plans to invest approximately $72 billion in the 2010−2013 time frame, an increase of 8% form the 2009−2012 plan. This increase is driven by new projects in Iraq and Venezuela in the E&P space.

 

Eni’s strong presence in North Africa and the Middle East is likely to result in growth. Moreover, additional production is expected from acquired properties in the Gulf of Mexico and Congo and the expected build-up in gas production in Libya.

 

While the company is positive about the Zubair field’s capacity, it indicated a flat 2010 upstream outlook with an aim to grow production through 2013 at 2.5% CAGR (compounded annual growth rate). Eni plans to bring 41 new fields online in the next four years.

 

Despite the company’s significant international exposure, Eni is facing challenges at the domestic front, due to increasing competition, which is likely to impact its margins.