ENI could offload 15% interest in Mozambique as part of EUR 9bn asset sale plan
ENI [BIT:ENI] is considering selling a stake of up to 15% in its gas-rich licence block off the coast of Mozambique as part of its EUR 9bn asset disposal plan, the Italian oil company’s CEO Paolo Scaroni said following a presentation of the company’s strategic plan.
This figure is up from the 10% of the Area 4 license block that ENI said in September 2013 it might sell and comes as the oil major announced a new "wet" gas discovery. Last year ENI sold a 20% stake to China’s CNPC for USD 4.2bn. Scaroni said, "We could potentially decrease our stake by around 15% and still remain operator of the project with 35%."
ENI intends to divest assets worth EUR 9bn between 2014 and 2017 of which around 33% will come from the disposal of its remaining stake in Snam [BIT:SRG] and Galp [ELI:GALP], said Scaroni.
While proceeds of EUR 2.3bn from the new plan have already been raised through the sale in January of the Arctic Russia project, the rest will come through the disposal of exploration and production assets but not via corporate disposals. Those will be limited to Galp and Snam.
An exit of ENI’s 42.93% investment in Saipem is not on the cards at the moment, he indicated. Saipem[BIT:SPM], ENI and Scaroni are under ongoing corruption investigation by Italian and Algerian authorities relating to the oil contractor’s business in the North African country.
ENI has aa 16% interest in Galp and a 8.54% stake in Snam following a stake sale last year. The sale of the remaining stakes in the two companies is linked to exchangeable bonds issued in 2012 and 2013 and can be realized when those instruments reach maturity, Scaroni added.
Scaroni noted that the buyback programme launched by the company at the beginning of the year and the Italian government’s plan to reduce its stake in ENI are two separate things. "It would be impossible for us to buy back, let’s say, 10% of our shares in three months; the board wouldn’t authorize it nor would I propose it", he noted.
ENI wants to maintain maximum flexibility in the management of the buyback programme with the intention to continue with it only if all the necessary conditions are met. Those conditions include specific thresholds in terms of oil price and US dollar exchange rate.
The Italian government announced the intention to sell part of its 30.1% stake in ENI in October, when it presented a wide privatization plan aimed at raising billions of euros and lowering Italy’s public debt.