Italy's Eni posted an adjusted net loss of Eur484 million in Q3 16, against an adjusted net loss of Eur127 million in Q3 15, on the back of an ongoing low energy prices environment and production shutdown at its Val D'Agri field.
In the first nine months of 2016, it recorded a net loss of Eur799 million.
However, it said all operating segments in the mid-downstream generated positive free cash flow in the first nine months of 2016 “despite an unfavourable trading environment.”
Eni’s natural gas sales were 20.01 billion cubic meters in Q3 16, down by 0.48 Bcm, or 2.3% year on year.
Sales in Italy increased by 12% to 8.76 Bcm driven by higher spot sales to the PSV gas hub.
Sales in the European markets amounted to 7.97 Bcm, down by 10.2%, “mainly reflecting lower spot sales in Germany/Austria and Benelux, increasing competitive pressure as well as lower volumes in Turkey driven by lower sales to Botas” it noted.
In the same period, sales to the Extra European markets decreased by 22.9% “due to lower LNG volumes marketed in the Far East, due to the lack of contracts renewal” it explained.
Sales of natural gas in the nine months of 2016 amounted to 65.26 Bcm (included Eni’s own consumption, Eni’s share of sales made by equity-accounted entities and Exploration & Production sales in Europe and in the Gulf of Mexico) falling by 3.24 Bcm or 4.7% year on year.
For gas, the outlook for the whole 2016 is that sales will be "in line with the reduction of the contractual minimum take of supply contracts” the company said, “against a backdrop of continuing oversupply and strong competition.”
“Management plans to retain its market share in the large customers and retail segments, also increasing the value of the existing customer base by developing innovative commercial initiatives, by integrating services to the supply of the commodity and by optimizing operations and commercial activities” it added.
Furthermore, electricity sales were 9.17 TWh in Q3 2016, up by 1.9% year on year (27.26 TWh, up by 5.6% in the nine months of 2016) “mainly due to higher volumes traded on the wholesalers segment.”
“In the mid-downstream businesses, all of which were free cash flow positive despite of an unfavourable trading environment, we are continuing to progress our optimization plans, also starting the execution of our new plan of producing energy from renewable sources” commented Eni's Ceo Claudio Descalzi.
These include the deal reached in September 2016 in Algeria for the construction of a 10 MW photovoltaic plant in the Bir Rebaa North (BRN) field, co-operated by Eni and Sonatrach. A similar agreement was signed with the Egyptian Authorities for the construction of a 50 MW photovoltaic plant in the Sinai area. This initiative will be implemented by Petrobel, a joint venture between Eni and the state-owned company Egyptian General Petroleum Corporation (EGPC).
Meanwhile, main achievements reached in the upstream sector through Q3 16 were the stabilisation of production plateau at the Goliat oilfield, the restart of operations from Kashagan and ramped up at the Nooros field and the resumption of operations at the Val d’Agri field, all of which “will help to increase our cash generation from the fourth quarter onwards, as we successfully continue our cost reduction programme in lifting and development activities.”
Furthermore, “we have stepped up our efforts to achieve a record time-to-market at the Zohr project” Descalzi said, adding that “in Mozambique the signing of the Coral gas sale contract represents a key milestone towards commencing the project construction activities.”