Eni Confirms €1.5B Share Buyback Amid Oil Market Challenges
By Francesca Landini
MILAN (Reuters) - Italian energy group Eni said on Thursday it would buy back shares for at least 1.5 billion euros ($1.7 billion) over a year even in the case of increasing headwinds for the oil and gas sector.
To reassure investors concerned with falling commodity prices and a weakening dollar, the state-controlled group said it would postpone some investments and cut costs through mitigation actions worth over 2 billion euros.
It reduced net capital expenditures for this year to below 6 billion euros from a previous 6.5-7 billion euro guideline.
"The group is committed to maintain its 1.5 billion euro buyback even under adverse market scenarios," Chief Transition and Financial Officer Francesco Gattei told analysts at a post-result conference call.
Gattei said that the ongoing sale of a 15-20% stake in its low-carbon unit Plenitude was progressing and the disposal of African upstream assets to commodity trader Vitol would be completed as planned in the coming months.
At the beginning of April the Brent crude price fell below $70 a barrel and has remained below that threshold so far due to increased production from the OPEC+ producer group and trade tensions between the U.S. and its commercial partners.
Among Eni's biggest rivals, BP could be forced to cut or even scrap its share buyback programmes over the next year unless oil prices recover, analysts say.
The Milan-based group reported an adjusted net profit of 1.41 billion euros between January and March, down 11% year on year, but above an analyst consensus of 1.15 billion euros.
Shares in the group were up 1.8% at 1415 GMT outperforming a 0.7% rise in Milan's blue-chip index.
The Milan-based company confirmed its hydrocarbon production goal for this year, shrugging off analyst fears it would be forced to reduce oil output in Kazakhstan or permanently halt exports from Venezuela.
"For Kazakhstan, so far neither the operator of the asset nor the shareholders and the contracting company have been engaged by the authorities for any production cut," Eni COO for Global Natural Resources Guido Brusco said.
Separately, the group and the British government announced an agreement for the launch of the Liverpool Bay carbon capture (CCS) project.
($1 = 0.8787 euros)
(Reporting by Francesca Landini, editing by Valentina Za; editing by David Evans)
