Italian oil and gas company Eni is exploring the possibility of spinning off stakes in promising oil and gas projects, reported Reuters, citing sources.
The move is part of the company’s strategy to finance development while shifting more capital towards low-carbon initiatives.
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It could involve assets in Indonesia and Ivory Coast, according to sources.
The concept of creating separate entities, or ‘satellites’, has been a key part of CEO Claudio Descalzi’s strategy to attract investment and cater to investors with specific interests in either traditional energy or low-carbon ventures.
This allows for more targeted investment opportunities.
Eni CFO Francesco Gattei told Reuters: “The satellite model is an approach we have built to have additional funding sources to keep together the need to meet demand for traditional products, while also developing new, greener products.”
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By GlobalDataEni has already established a retail and renewable unit, Plenitude, and a biofuel division, Enilive, with the former already partially sold to an infrastructure fund.
These divisions have been organised with dedicated management and independent financials, aiming for eventual listings to secure additional growth funds.
This strategy among energy majors showcases the potential of nascent businesses that often find it difficult to deliver the high returns associated with conventional oil and gas operations, Gattei added.
The company has also been restructuring its fossil fuel assets.
Last month, Eni entered into an agreement to merge its North Sea operations with Ithaca Energy, acquiring a 38.5% stake in the process.
The deal, worth close to $1bn (€926.447m), enables Eni to reduce capital expenditure while potentially earning dividends from Ithaca.
Eni’s executive mentioned that the group is considering replicating this model for other exploration and production projects that require substantial investments.
Indonesia, with its recent gas discovery at Geng North-1 and other assets, and Ivory Coast, where a significant offshore find was made in March, are highlighted as potential candidates for this strategy.
