Eni to Pump 2 Million Barrels of Oil a day in 2012

By Adam L. Freeman

Feb. 13 (Bloomberg) -- Eni SpA, Italy’s largest oil company, forecast production will rise by 3.5 percent a year to exceed 2 million barrels a day in 2012.

Spending in the 2009-2012 period will fall by 1 billion euros to 48.8 billion euros ($62.8 billion) compared with the previous period, the Rome-based company said today in a statement. About 34 billion euros will be targeted for investments in oil production.

“Exploration will be the pillar of our sustainable policy,” Claudio Descalzi, head of exploration and production at Eni, told analysts during a presentation in London today.

Chief Executive Officer Paolo Scaroni is depending on fields in the Gulf of Mexico, Congo and Turkmenistan to bolster production and counter disruptions in Nigeria caused by militant attacks and a smaller share of output from the Kashagan development in Kazakhstan.

Investment opportunities “remain attractive” even in a low oil-price environment, Scaroni said today.

Eni has “leading” lifting costs of $7.5 a barrel of oil due to its focus on low-cost projects, he said.

The company plans to maintain a “strong” capital position and credit rating while investing in profitable growth and returning “superior” yields. Scaroni sees oil this year at around $43 a barrel, though he predicts “high volatility” in the near term.

Algeria, Libya

Eni in 2008 won rights to search for oil and gas in Algeria and extended an oil and gas supply agreement with Libya for 25 years. The company also paid 2.74 billion euros for Suez SA’s 57 percent stake in Belgian gas supplier Distrigaz SA. Scaroni said that acquisition will enable Eni to sell 21 percent of western Europe’s gas.

Separately, Eni today said it lost 874 million euros in the fourth quarter, its first quarterly loss in at least seven years amid a collapse in the price of oil. Excluding inventories, profit totaled 1.94 billion euros beating analysts’ estimates of 1.83 billion euros, according to the median estimate of nine analysts surveyed by Bloomberg News.

Crude futures in New York slumped 56 percent in the quarter, the biggest drop since trading started in 1983. Oil futures for March delivery traded at $33.89 today.

To contact the reporter on this story: Adam L. Freeman in Rome at afreeman5@bloomberg.net