Yahoo Finance Eni Enters into Twin Agreements with Republic of Congo - Analyst Blog
Italian energy major EniSpA E has inked twin agreements with the Congolese government at Palazzo Chigi. The agreements intend to enhance the energy development as well as local growth of the Republic of Congo. The company’s share price, however, has been trending downward post-announcement and has shown a 0.3% fall.
Eni’s presence in Congo dates back to 1968. Currently, the company’s production in the country totals about 110,000 barrels of oil equivalent per day. Eni has also been operating in Sub-Saharan Africa since the 1960’s with exploration and production projects in Angola, Ghana, Gabon, Mozambique, Nigeria, Kenya, Liberia and South Africa.
Moreover, Eni’s constant efforts to expand its upstream operations in Cyprus, Egypt, Vietnam, Indonesia, Pakistan and Kenya will go a long way in generating profitable growth in the future. Further, project start-ups, inputs from big projects in Algeria, Iraq, Australia, Russia and Egypt, as well as its strategic position in non-conventional gas, are expected to augment volumes going forward. Eni’s commissioning of 22 new projects is expected to increase output by over 500 thousand barrels equivalent per day by 2020.
Given the commissioning of major projects like Kashagan in Kazakhstan as well as other assets including the Angola liquefied natural gas and the gas assets in Algeria, Eni remains optimistic about its future growth. Moreover, stepped-up production at the fields commissioned last year also makes us bullish on Eni’s assured profitability over the coming quarters.
Eni’s outlook for the coming months is favorable, given its 2013–2016 strategic plans to enhance production and implement steps to control costs and recover profitability. The company remains upbeat on its production growth target of more than 4% growth annually in the said period and 3% annually until 2022.
With its diverse set of NGL, natural gas, crude oil and refined products midstream infrastructure assets, the company is strong enough to continue to support distribution growth.
Eni currently carries a Zacks Rank #5 (Strong Sell). Better-ranked stocks in the oil and gas sector such as Valero Energy Partners L.P. VLP, Sunoco LP SUN and Hallador Energy Co. HNRG sport a Zacks Rank #1 (Strong Buy).
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