Italy’s ENI eyes Libya recovery, warns on eurozone

Italian oil giant ENI said yesterday its 2011 net profit rose and production is expected to pick up this year as Libyan fields come back on line after the overthrow of Muammar Gaddafi.

The energy company’s 2011 net profit rose 9.1 per cent to €6.89 billion while the adjusted net profit figure, which excludes exceptional items, was up 1.5 per cent at €6.97 billion, ENI said.

Hit by the unrest in Libya, where ENI is one of the largest foreign producers, 2011 output dropped 12.9 per cent to 1.58 million barrels per day, but for 2012, the company expected a full return to normal by the second half.

“We have rapidly restarted our Libyan operations, reducing the impact of the revolution on 2011 results,” ENI head Paolo Scaroni said in a statement.

Production in the North African country is running at 80 per cent of the capacity before the conflict began – churning out around 280,000 barrels a day – and the group expects a return to normal output in the second half of 2012.

The oil giant said it expects 2012 to be challenging “due to continuing signs of an economic slowdown, particularly in the eurozone, and volatile market conditions.”

However, international oil prices would be supported by “robust demand growth from China and other emerging economies, as well as ongoing geopolitical risks and uncertainties,” it said.

The company said gas demand would be weak because of slow economic activity and increasing competition from renewables but despite the drop in demand, it expected sales to be roughly in line with 2011.

Scaroni said ENI’s discovery last year of a huge natural gas discovery off the coast of Mozambique “opens up extraordinary development opportunities and is ideally placed to serve the fast-growing Asian gas markets.”

The ENI chief said the company had also made important discoveries in the Barents Sea, Angola and South-East Pacific.