Edin. New It Share Discussion Threads

[adrian j boris] 11/3/2023 08:48

ENI : UBS reiterates its Buy rating
03/10/2023 | 01:30pm GMT


In a research note published by Henri Patricot, UBS advises its customers to buy the stock. The target price is unchanged at EUR 16.50.

[the grumpy old men] 09/3/2023 07:40

Analyst Christyan Malek from JP Morgan research gives the stock a Neutral rating. The target price remains set at EUR 18.

[waldron] 05/3/2023 20:03

RIGZONE


Eni CEO Meets Kenyan President in Nairobi
by Paul Anderson
|
Rigzone Staff
|
Sunday, March 05, 2023

Eni's CEO Claudio Descalzi met with the president of Kenya Samoei Ruto in Nairobi to discuss the company's activities in the country.

Eni’s agribusiness activities and the company’s decarbonization initiatives in Kenya were the topic of discussion at the meeting between CEO Claudio Descalzi and the country’s president Samoei Ruto. The meeting was also attended by cabinet secretary for Energy and Oil Davis Chirchir.

Eni said in its statement that Descalzi and the delegation illustrated to president Ruto the results of the project for the production of vegetable oil for biorefining, which the company launched in the country in 2022.

Based on an integrated supply chain model, the project leverages marginal or degraded land and crops that do not compete with the food supply chain, the statement reads. The first processing plant (or agri-hub) in Makueni county, has a capacity of 15,000 tons/year and its production of vegetable oil is already feeding the Gela refinery, in Italy. Eni said that the second agri-hub will be launched in the second half of 2023, and others in the following years, to reach a production target of 200,000 tons by 2026.

The social impacts are particularly relevant, Eni said, noting that 40,000 farmers have been involved to date for the production of oilseeds, to which another 40,000 will be added by the end of the year, with a projection of around 200,000 by 2026.

The agri-hub currently employs more than 100 resources directly, which will exceed 500 when the other agri-hubs are completed. Furthermore, 2,000 tons of animal feed for local consumption were obtained as a by-product of the oilseeds, the statement reads.

Descalzi also shared with President Ruto the Waste & Residue initiatives, also to provide feedstock for biorefining. The collection and export of used cooking oil began in 2022 and today involves over 400 suppliers, according to Eni.

The model has already been extended to other African countries, contributing to integrate the continent into the sustainable mobility value chain. Descalzi and President Ruto also discussed further initiatives in the areas of e-mobility and renewable energy. Specific focus was given to solar, wind and geothermal energy while there was also talk about waste to energy. These programs will be finalized in the next months, Eni said.

To contact the author, email [e-mail]

[waldron] 28/2/2023 16:58

Eni achieves the closing for the acquisition of BP’s business in Algeria, operating two major gas fields


28 February 2023 - 5:17 PM CET

The operation was announced in early September, with the aim of contributing to Europe’s gas needs and strengthening Eni's presence in Algeria.

San Donato Milanese (Milan), 28 February 2023 – Eni announces that it has achieved the closing for the acquisition of BP business in Algeria, regarding the two gas-producing concessions “In Amenas” and “In Salah”, which are jointly operated with Sonatrach and Equinor.

The transaction has been approved by the competent national and antitrust authorities.

Eni has been present in Algeria since 1981. Following this operation - and the development programs already underway in the Berkine basin - Eni's equity production in Algeria will rise to approximately 130,000 barrels of oil equivalent per day in 2023, further confirming the company's position as the main international energy company operating in the country.

[misca2] 26/2/2023 15:01

Saipem's Drilling and Construction Fleet to Run on Eni's Biofuels
by Paul Anderson
|
Rigzone Staff
|
Sunday, February 26, 2023


Saipem’s drilling and construction vessels could be running on biofuels following a Memorandum of Understanding signed with Eni Sustainable Mobility. The two companies noted in a joint statement that particular attention will be given to operations in the Mediterranean Sea. Saipem’s fleet for drilling and construction includes 45 vessels.

Through the MoU, both companies are strengthening their mutual efforts to diversify energy sources and reduce the carbon footprint across offshore operations. Eni has been producing biofuels since 2014, as it converted its Venice and Gela refineries into biorefineries, which, as the statement stressed, have been palm oil free since the end of 2022.

Eni is using its proprietary Ecofining technology to process vegetable raw materials or animal waste and HVO (Hydrotreated Vegetable Oil) biofuel products. According to Eni’s plan to hit carbon neutrality by 2050, biofuels are a major strategic pillar. Eni is focused on a decarbonization process aiming to reduce emissions from industrial processes and products.

“This agreement forms part of the execution of Saipem’s strategy for the reduction of GHG emissions and implements, together with the other initiatives and investments envisaged in the Group's strategic plan, which encompasses the reduction of its Scope 1 and Scope 2 emissions by 2035 and the achievement of Net Zero (including Scope 3) by 2050,” the joint statement read.

Both companies will bring their respective expertise to the table with Eni Sustainable Mobility being among the first producers of biofuels in Europe. The company aims to bring its global expertise in providing solutions to reduce carbon emissions.

Saipem is committed to the energy transition and has set a target of increasing the share of alternative fuels used by its fleet which would result in lower emissions, not only for Saipem but its clients as well.

“Thanks to the use of biofuel, Saipem will potentially be able to reduce emissions by around 550,000 Tonnes of CO2eq per year, equal to 60% of its total annual Scope 1 emissions,” the statement said.

To contact the author, email [e-mail]

[waldron] 24/2/2023 14:43

UPSTREAM

Eni targets 17 countries in multibillion-barrel oil and gas exploration blitz

Italian major will spend $2.2 billion by 2026 to hunt for more hydrocarbons, as new projects boost production to 1.9 million barrels of oil equivalent per day


24 February 2023 12:28 GMT Updated 24 February 2023 14:02 GMT


By Iain Esau
in London

Eni aims to discover 2.2 billion barrels of hydrocarbon resources over the next four years, building on what chief executive Claudio Descalzi said was an “outstanding” 2022.

The Rome-headquartered player has been one of the standout explorers over the past decade, making major new finds in Africa, Europe, Central America, the Middle East and Asia and then fast-tracking development of these discoveries.

Speaking at Eni’s capital markets day yesterday, Descalzi said that in 2022, Eni found resources of 750 million barrels of oil equivalent — about 125% of its production in 2022 — at under $2 per barrel, adding that between 2015 and 2022, the company had discovered about 4 billion barrels.

[misca2] 24/2/2023 07:06

Trending: Eni Posts Lower 4Q Profit, Shares New Shareholder Remuneration Policy
02/23/2023 | 06:02pm GMT


1746 GMT - Eni SpA is among the most mentioned topics across news items over the past 12 hours, according to Factiva data, after it posted results for the fourth quarter and a new shareholder remuneration plan as part of a new strategy until 2026.

The Italian oil-and-gas major booked a quarterly net profit of 550 million euros ($583.4 million), down from EUR3.52 billion in the year-earlier period. The result was affected by fair-valued commodity derivatives, asset impairments and extraordinary, solidarity tax contributions.


On an adjusted basis, net profit was EUR2.50 billion, the company said. Separately, Eni unveiled a plan to simplify its shareholder remuneration policy as part of a strategy from 2023 to 2026, and raised the dividend for the current year by 7% to EUR0.94 a share.


Eni said it aims to distribute between 25%-30% of annual cash flow from operations through a combination of dividend and share buyback.

Analysts at RBC Capital Markets say in a note that Eni's updated corporate plans look weaker than expected, given a higher capex run-rate relative to consensus while volume targets look broadly in line.

"The simplification of the distribution policy, while expected, should be taken well, although we believe some investors had expected a higher payout ratio," the analysts say. Dow Jones & Co. owns Factiva. ([e-mail])

(END) Dow Jones Newswires

02-23-23 1301ET

[misca2] 24/2/2023 07:03

Saipem investigates use of biofuels on offshore fleet

Feb. 23, 2023

Eni Sustainable Mobility and Saipem have signed a memorandum of understanding on use of biofuels to power Saipem’s 45-strong fleet of drilling and construction vessels.



MILAN, Italy — Eni Sustainable Mobility and Saipem have signed a memorandum of understanding on use of biofuels to power Saipem’s 45-strong fleet of drilling and construction vessels, with a special focus on operations in the Mediterranean Sea.

The two companies are both committed to diversifying their energy sources and reducing the carbon footprint across their offshore operations.

Eni has been producing biofuels since 2014, after converting its refineries in Venice and Gela to biorefineries.

Through application of Ecofining technology, biofuel products are processed from vegetable raw materials or animal waste.

Saipem said it aims to increase the use of alternative fuels on its vessels to cut its own and its clients’ emissions. Using biofuel, it aims for emissions cuts of about 550,000 metric tons per year of CO2, equivalent to 60% of its total annual Scope 1 emissions.

02.23.2023

[waldron] 23/2/2023 13:39

Oil Major Eni Books Highest Annual Earnings In Over A Decade
By Tsvetana Paraskova - Feb 23, 2023, 6:36 AM CST

Italy’s Eni (NYSE: E) reported on Thursday its highest annual net profit in over a decade, joining other international oil majors in reporting high or record earnings for 2022 on the back of soaring oil and gas prices.

Eni’s adjusted net profit surged to $14.1 billion (13.3 billion euros) for 2022, up by $9.5 billion (9 billion euros) compared to 2021, due to a strong operating performance and higher results of equity-accounted entities, the Italian company said today.


However, the slide in prices in the fourth quarter resulted in fourth-quarter earnings slowing from the previous quarter and in line with analyst forecasts, although they were nearly 50% higher than in Q4 2021. The slowdown in exploration and production in the fourth quarter sent Eni’s shares dipping by 3.6% in Milan mid-day and down by 4% in pre-market trade in New York.



Commenting on Eni’s gas deals last year, chief executive officer Claudio Descalzi said, “During the year, we were able to finalize agreements and activities to fully replace Russian gas by 2025, leveraging our strong relationships with producing states and fast-track development approach to ramp-up volumes from Algeria, Egypt, Mozambique, Congo and Qatar.”

Despite a weaker performance for the fourth quarter, Eni joins the other international majors in reporting bumper annual profits for 2022.

Each of the world’s biggest oil and gas majors reported record profits for 2022 earlier this month, doubling their combined net earnings from 2021 and booking the best-ever year for Big Oil.


Combined, the net profits of Exxon, Chevron, BP, Shell, Equinor, and TotalEnergies surged to $219 billion for 2022, up from around $100 billion booked for 2021, as oil and gas prices surged following the Russian invasion of Ukraine and the majors raised oil and gas production to meet growing demand for oil and limited gas supply from Russia to Europe.

By Tsvetana Paraskova for Oilprice.com

[waldron] 23/2/2023 13:11

The company has set the 2023 annual dividend at EUR0.94 per share, which represents a 7% increase on year, and said it will launch a 2.2 billion euros ($2.33 billion) share buyback following shareholder approval.

[waldron] 23/2/2023 13:09

ENI : UBS keeps its Buy rating
02/23/2023 | 01:01pm GMT

In a research note published by Henri Patricot, UBS advises its customers to buy the stock. The target price continues to be set at EUR 18.

[waldron] 23/2/2023 13:08

Eni SpA has simplified its shareholder remuneration policy as part of its strategic plan for 2023-26 and raised the dividend for the current year.

The Italian oil-and-gas major said at its capital markets day on Thursday that it aims to distribute between 25%-30% of annual cash flow from operations through a combination of dividend and share buyback.

The company has set the 2023 annual dividend at EUR0.94 per share, which represents a 7% increase on year, and said it will launch a 2.2 billion euros ($2.33 billion) share buyback following shareholder approval.

Eni has also outlined its financial objectives, saying it targets earnings before interest and taxes of EUR13 billion in 2023. CFFO before working capital is seen at over EUR17 billion in 2023 and over EUR69 billion over the plan period. The company said this will allow it to organically fund investment and enhance shareholder distributions while maintaining leverage in a 10%-20% range.

Capital expenditure is seen at around EUR9.5 billion in 2023 and EUR37 billion over 2023-26.

Eni expects production to grow at an average of 3%-4% over 2023-26 and plateau to 2030, and said it will progressively increase the share of gas in the portfolio to 60% by the end of the decade. The upstream segment's capex will be between EUR6 billion-EUR6.5 billion on average per year during the strategy plan period.



Write to Giulia Petroni at [e-mail]



(END) Dow Jones Newswires

February 23, 2023 07:39 ET (12:39 GMT)

[misca2] 23/2/2023 07:35

Eni 4Q Profit Fell, 2022 Performance Driven by Favorable Commodity Environment
02/23/2023 | 07:26am GMT

By Giulia Petroni

Eni SpA on Thursday said that profit fell in the fourth quarter of 2022 but full-year earnings benefited from a favorable commodity and refining environment.

The Italian oil-and-gas major booked a quarterly net profit of 550 million euros ($583.4 million) from EUR3.52 billion in the year-earlier period. The result was affected by fair-valued commodity derivatives, asset impairments and extraordinary, solidarity tax contributions. On an adjusted basis, net profit was EUR2.50 billion.

Sales increased to EUR31.25 billion in the quarter, compared with EUR26.76 billion a year earlier, the company said.

Quarterly hydrocarbon production was down to 1.62 million barrels of oil equivalent a day, from 1.74 million boe/d a year earlier.

In full-year 2022, Eni said that net profit soared to EUR13.81 billion from EUR5.82 billion in 2021, while adjusted operating profit came in at EUR20.39 billion driven by the exploration and production segment.

"While market conditions were clearly supportive, our 2022 financial results were underpinned by capital and cost discipline, operating performance and by effective risk management of price volatility and supply tightness," Chief Executive Claudio Descalzi said.

The company is set to release financial and operational targets later on Thursday at the capital markets day.

Write to Giulia Petroni at [e-mail]

(END) Dow Jones Newswires

02-23-23 0225ET

[la forge] 18/2/2023 06:54

Eni Sustainable Mobility, PBF partner for St. Bernard biorefinery in US



By NS Energy Staff Writer 17 Feb 2023

PBF will contribute its industrial know-how to the facility and will also manage the project execution and serve as the operator after the construction is complete, while the biorefinery will use Eni’s Ecofining process
tasos-mansour-NRfNe4ys_bM-unsplash (2)

Eni Sustainable Mobility, PBF enter JV agreement. (Credit: Tasos Mansour on Unsplash)

Eni’s subsidiary Eni Sustainable Mobility and US-based petroleum refineries company PBF Energy have signed an agreement to form a joint venture, dubbed St. Bernard Biorefinery (SBR).

The joint venture will develop the biorefinery that is currently under construction and co-located with PBF’s Chalmette Refinery in Louisiana, US.

Under the terms of the agreement, Eni Sustainable Mobility will contribute a total of $835m in the capital, along with additional milestones payments totalling up to $50m.

The partnership will leverage the experience and expertise of both Eni Sustainable Mobility and PBF, for the development of St. Bernard biorefinery.

PBF will contribute its industrial know-how to the facility and will continue to manage project execution and serve as the operator after the construction is complete.

The biorefinery will also use the Ecofining process, which Eni has developed in partnership with Honeywell UOP, along with Eni’s experience in biorefining.

Eni Sustainable Mobility CEO Stefano Ballista said: “Eni Sustainable Mobility is a pioneer in the biorefining industry, and it is also studying the possible construction of two new biorefineries in Italy and Malaysia.

“We do believe the role of HVO will strongly contribute to decarbonization of road transports, including hard to abate heavy-duty sector, as it leverages existing infrastructure and can immediately fuel existing vehicle fleets.

“Biofuels are part of Eni’s strategy to achieve carbon neutrality by 2050 through the reduction of the emissions generated during the entire products life cycle.”

The St. Bernard Renewables biorefinery will have the capacity to process about 1.1 million tonnes of raw materials a year, with full pre-treatment capabilities.

It is expected to commence commercial operations in the first half of this year.

The biorefinery will primarily produce Hydrotreated Vegetable Oil (HVO) Diesel, commonly known as renewable diesel, with a production capacity of 306 million gallons per year.

The joint venture, SBR, will operate as an independent entity with a dedicated team managing feed procurement and product distribution.

PBF president Matthew Lucey said: “We’re excited to enter this strategic partnership with Eni Sustainable Mobility, a global leader in biorefining. The SBR biorefinery will benefit greatly from PBF and Eni’s complementary strengths and expertise.

“The project will utilise existing processing infrastructure and diverse inbound and outbound logistics and is ideally situated to support growing demand for low-carbon fuels.

“Our partnership with Eni signals a major milestone for PBF and demonstrates our commitment to contributing diversified sources of energy to the global mix while lowering the carbon intensity of our operations and the products we manufacture.”

[waldron] 17/2/2023 13:39

In a research note, UBS analyst Henri Patricot maintained his recommendation on the stock and advised to buy it.

The price target remains at EUR 18.

[grupo guitarlumber] 16/2/2023 07:45

Upcoming events on ENI SPA

02/23/23 Capital Markets Day - FY 2022

02/23/23 FY 2022 Earnings Release

02/27/23 Credit Suisse Vail Summit

[waldron] 16/2/2023 07:22

Eni, Repsol Push Maduro for More Control in Venezuela Oil Fields

Fabiola Zerpa and Nicolle Yapur, Bloomberg News


(Bloomberg) -- European oil companies are pressing Venezuelan President Nicolas Maduro for greater control of their operations in Venezuela, after US driller Chevron Corp. renegotiated its contract last year.

Italy’s Eni SpA and Spain’s Repsol SA are reviewing drafts of contracts after holding a series of meetings with high-ranking members of government in which they asked for operational control at oil and gas ventures jointly held with state energy company PDVSA, according to people familiar with the matter who asked not be named because the information is private.

Chevron received a similar deal last year, raising expectations from analysts that Venezuela would give other energy companies broader control over joint ventures. Eni, Repsol and French company Maurel et Prom have the capacity to pump an additional 50,000 to 80,000 barrels per day if they increase operations in the South American country, according to Francisco Monaldi, lecturer in energy economics at Rice University’s Baker Institute for Public Policy.

While even an extra 80,0000 barrels a day would do little to immediately impact global energy markets, the move would be the latest sign of an advancing political agenda in the nation. Maduro used the Chevron deal to call on the US to ease more sanctions on the country’s beleaguered oil industry. It would also add to Venezuela’s efforts to increase production in an industry responsible for the vast majority of its exports. The country’s current output of around 690,000 barrels a day is roughly one-third of what it was five years ago, according to OPEC.

Eni declined to comment. Repsol didn’t reply to request for comment. Venezuela’s oil ministry office and Petroleos de Venezuela SA didn’t reply to a request for comment. Eni and Repsol hold oil and gas ventures in Venezuela. Cardon IV, a jointly-run offshore venture, supplies natural gas to most of Western Venezuela. On the oil side, they both each hold three ventures partnered with PDVSA.

Latin America, home to a fifth of the world’s oil reserves, has largely missed out on its full potential to cash in on higher oil prices over the last few years amid a potent combination of mismanagement, limited finances and political missteps. Venezuela has also faced the hurdle of economic sanctions. Increasing output would help to shore up the region’s economies, which deal with some of the worst wealth inequality in the world, while also helping to boost tight global energy supplies.


If the European oil companies are granted more control from the Venezuelan government, it isn’t clear if the companies would need an additional permission from the US Treasury to avoid secondary sanctions before increasing production.

Eni and Repsol began negotiations with Venezuelan officials, including Vice President Delcy Rodriguez, in mid-2022. But the negotiations have taken on momentum more recently, according to the people. The Venezuelan government has requested that in exchange for more control at oil fields, the companies make investments in gas projects.

Venezuela’s production has suffered since the US slapped the country with sanctions in 2019. Eni and Repsol ventures have also decreased. Both companies hold a waiver from US Treasury Department that lets them take oil shipments from PDVSA to offset 2022’s sales from a natural gas project to supply the domestic market. In a recent move, they agreed to a swap deal to load 4 million barrels of Venezuelan oil through March to continue an agreement reached with Maduro to offset PDVSA debt.


In November, the US Treasury eased some restrictions on Chevron, allowing the firm to produce and export Venezuelan oil. With more control over its operations, Chevron has raised its production to 90,000 barrels a day from 50,000 barrels a day, helping it recoup part of the debt owed by PDVSA.

The move from the US government came as President Joe Biden asked American oil companies to boost production in order to combat higher gasoline prices that have burdened consumers.

[waldron] 16/2/2023 07:18

DIRECTORS TALK


ENI S.p.A. – Consensus Indicates Potential 13.4% Upside
Broker Ratings

Charlotte Edwards
February 15, 2023

1:53 pm

ENI S.p.A. found using ticker (E) have now 3 analysts in total covering the stock. The consensus rating is ‘Buy’.


The target price ranges between 42 and 32.5 calculating the average target price we see 35.96.

Now with the previous closing price of 31.72 this is indicating there is a potential upside of 13.4%.

The 50 day moving average now sits at 29.76 and the 200 moving average now moves to 26.49.

The market capitalisation for the company is $53,577m. Visit the company website at:

[grupo] 14/2/2023 09:04

Eni SpA : Towards the breakout of a major resistance level
02/10/2023 | 07:43am GMT

Entry price : 14.3€ | Target : 16€ | Stop-loss : 13.6€ | Potential : 11.89%


Eni SpA is close to a major resistance level, whereby the breach of this level could be considered as a buy signal. This reflects our preferred scenario in light of the stock's current technical chart pattern.
Investors have an opportunity to buy the stock and target the € 16.


Eni SpA : Eni SpA : Towards the breakout of a major resistance level


Summary

The company has strong fundamentals. More than 70% of companies have a lower mix of growth, profitability, debt and visibility.

Overall, and from a short-term perspective, the company presents an interesting fundamental situation.

The company's Refinitiv ESG score, based on a ranking of the company relative to its industry, comes out particularly well.


Strengths

Its low valuation, with P/E ratio at 3.67 and 5.61 for the ongoing fiscal year and 2023 respectively, makes the stock pretty attractive with regard to earnings multiples.

The stock, which is currently worth 2022 to 0.5 times its sales, is clearly overvalued in comparison with peers.

The company appears to be poorly valued given its net asset value.

The company has a low valuation given the cash flows generated by its activity.

This company will be of major interest to investors in search of a high dividend stock.

Over the past year, analysts have regularly revised upwards their sales forecast for the company.


Analysts have consistently raised their revenue expectations for the company, which provides good prospects for the current and next years in terms of revenue growth.

For the last twelve months, analysts have been gradually revising upwards their EPS forecast for the upcoming fiscal year.

Analysts covering this company mostly recommend stock overweighting or purchase.

The average target price set by analysts covering the stock is above current prices and offers a tremendous appreciation potential.


Weaknesses

With relatively low growth outlooks, the group is not among those with the highest revenue growth potential.

The company's currently anticipated earnings per share (EPS) growth for the next few years is a notable weakness.

The overall consensus opinion of analysts has deteriorated sharply over the past four months.

The company's earnings releases usually do not meet expectations.

[ariane] 13/2/2023 08:34

February 13, 2023
9 min read
Can Meloni and Italy really build energy ties with Libya?

Charlie Mitchell

The Italian prime minister has visited Tripoli in her bid to ramp up new cross-Mediterranean energy links, but critics say that Libya is in no fit state to be a stable energy partner for Europe.

Disembarking her official plane at Tripoli’s only functioning airport late last month, Giorgia Meloni looked like she was on a mission.

Still in her first 100 days as Italy’s prime minister, Meloni was in Libya to market Rome as a gas hub linking North African producers with Europe, and to stem the flow of migrants across the Mediterranean. She did not go home empty-handed. During her trip, Italian oil major Eni and Libya’s National Oil Corporation (NOC) signed an $8bn gas production deal aimed at boosting gas supplies to Europe.

The agreement is said to be the largest investment in Libya’s energy sector in a quarter of a century and a sign that Italy is taking a leading role in gas extraction in North Africa as Europe scrambles to find alternatives to Russian energy following the invasion of Ukraine.

But with Libya still engulfed in chaos a decade after a Nato-backed uprising ousted and killed longtime dictator Muammar Gaddafi, analysts say the country is not a reliable energy partner. Before Meloni had even left the troubled country, Libya’s oil minister had slammed the landmark gas deal as “illegal”.

Two offshore fields to be developed

If all goes to plan, Eni’s deal will increase both gas output for the Libyan domestic market and exports to Europe, in large part through the development of two offshore gas fields.

In a statement, the Italian company said output will begin in 2026 and reach a plateau of 750m cubic feet per day. “This agreement will enable important investments in Libya’s energy sector, contributing to local development and job creation while strengthening Eni’s role as a leading operator in the country,” said chief executive Claudio Descalzi.

Meloni, who is the first top European official to visit Libya since the country failed to hold vital elections in December 2021, described the deal as “big and historic”.

The pact builds on a robust pre-existing oil and gas partnership between the two countries, underpinned by the GreenStream pipeline, which connects western Libyan gas fields to the island of Sicily and can carry 11bn cubic metres of gas per year. The pipeline was opened in 2004 but supply has plummeted since Libya erupted into chaos a decade ago.

Since then, Algeria – which Meloni visited before Tripoli – has overtaken Libya as Italy’s primary North African energy partner and biggest gas supplier. Italy is also banking on future gas imports from Egypt, Angola, Republic of Congo and Mozambique.

Finding alternatives to Russian gas

Efforts to diversify gas supply picked up following the onset of the war in Ukraine, which sparked a dash for alternatives to Russian energy.

Italy, once heavily reliant on Russian hydrocarbons, has reduced its imports of Russian gas by two-thirds to around 11bn cubic metres a year and plans to eliminate Russian gas from its energy mix by 2024.

Algeria, which has a capacity of more than 36bn cubic metres, according to Descalzi, has replaced a significant chunk. Eni hopes increased exports from Libya can help too.

On a more strategic level, Rome also sees a role for itself as a link between North African gas producers and northern Europe, building on strong relationships in the region, and hopes to build an energy corridor to Germany, Austria and Switzerland.

In a statement of intent at a roundtable in Tripoli, Meloni said that while Italy wants to expand its profile in the region, it does not seek a “predatory” role but instead wants to help African nations “grow and become richer”.

That message could resonate with African governments who resent attacks from climate activists and demands by Western officials to reduce emissions when 600m Africans still lack access to electricity. Energy-rich countries like Uganda say they cannot develop without resource extraction.

So strong is the desire to replace Russian gas that investment is flowing away from traditional crude projects in Africa and towards gas development, particularly floating LNG projects offshore that are less vulnerable to security risks.

Oil majors, including ExxonMobil, Eni, Shell and Chevron, all closed traditional projects in Nigeria, Angola and Equatorial Guinea last year. Meanwhile, oil cash investment is flooding into gas-rich nations, including Mozambique, Tanzania, Mauritania and Senegal in the hopes they can fill European shortfalls.

Libya ‘in no way a reliable partner’

Libya, too, could benefit from that shift. However, analysts were quick to pour cold water on the significance of the Eni deal, given Libya’s chronic instability, underinvestment, high domestic demand and lack of exports since a civil war broke out in 2011.

Last year, for instance, Libya delivered just 2.63bn cubic metres to Italy, well below the annual pre-2011 level of 8bn cubic metres, and Italy’s demands of around 5bn cubic metres a year.

The trip was “mainly a political spectacle meant to produce an announcement effect in the media and give the impression that Italy’s new prime minister is assertive, effective, firm, active, and no-nonsense,” says Jalel Harchaoui, a Libya expert and an associate fellow at the Royal United Services Institute.

“There is no reason to believe that the headline figure of $8bn is going to be invested within the foreseeable future. Half of that figure is to be invested by Libya’s own National Oil Corporation, and right now nobody has any compelling reason to believe that this will happen.”

Experts say Libya’s political instability and insecurity remains a major constraint. “Libya is of course in no way a reliable partner,” states Matteo Villa, a senior research fellow at Italian think-tank ISPI.

For years Libya has been under the control of rival governments, one in Tripoli in the west, the Government of National Unity (GNU), which is backed by the United Nations. The other, based in Benghazi in the country’s east, is under the control of Khalifa Haftar, who has earned the backing of Gulf states.

Following a split in 2014, Haftar waged a war on western factions, launching a bloody but unsuccessful one-year offensive on Tripoli. Today the country remains divided between rival factions who vie for control and dispute each other’s political legitimacy. Last February, the eastern-based House of Representatives confirmed a new eastern government, prolonging the institutional division.

The deal with Eni is likely to deepen the rift between the rival administrations, as has been the case with oil and military deals between Libya and Turkey, and has already exposed in-fighting in GNU prime minister Abdul Hamid Dbeibeh’s government. Mohamed Oun, Dbeibeh’s oil and gas minister, did not attend the Eni deal signing but instead criticised it on local television, saying that such agreements should be made by the ministry, not the NOC.

The eastern-based parliament has roundly rejected the appointment of Farhat Bengdara as chairman of the NOC and by extension any deals it or Tripoli might strike with foreign companies and states.

Competition between rival administrations and bouts of violent conflict have led to the blockade and shutdown of oil facilities in recent years, hindering the sector’s growth. Oil production in the second quarter of 2022 averaged just 0.88m barrels per day, a third less than during the first. According to the World Bank, lost oil revenues due to the blockade of facilities has cost the country $4bn.

Libyan economy in the doldrums

Meanwhile, Libya’s economy is in the doldrums, despite high energy prices. Inflation is high at 37% year on year for a basket of basic expenditures as of April 2022.

As a result, the World Bank notes: “Political instability in Libya and the ongoing war in Ukraine will likely slow down Libya’s economic recovery. If the country could sustain current levels of oil production and exports, it will benefit from soaring global oil prices, translating into higher fiscal revenues and more significant inflows of hard currency. This will positively impact its growth and its fiscal and external balances.”

But that will depend, the international lender noted, on transparent and accountable management of oil revenues and an improvement in the political and security conditions.

With no end in sight to the country’s security challenges, growth is unlikely. Although Libya’s GDP grew by a staggering 177.3% in 2021 after a 59.7% contraction in 2020 driven primarily by Covid-19, the African Development Bank expects more modest 4.4% economic growth in 2023.

In addition to the insecurity and uncertainty facing energy firms looking to invest in Libya, heavy domestic demand will continue to frustrate oil and gas exports, as it does in Egypt.

“The problem is that securing a long gas pipeline means cutting deals with local powers and militias, which also entails leaving a lot of produced gas to the domestic market,” says Villa. “Around 60%of the gas produced is used domestically, often in a subsidised way, and therefore somewhat wasted.”

With Eni unable to depend on Libya in the long run, experts say Meloni’s trip could be reduced to a mere spectacle. Algeria is a reliable partner for Italy at current levels – about 24bn cubic metres per year – but not more, and Libya cannot be relied on to export more than 3bn cubic metres per year.

“It’s mostly political signalling that we are committed to stay the course with the partners that we are left with, now that we almost ‘lost’ Russia,” says Villa.

For now it seems that North Africa is not Italy’s silver bullet. For Europe, the quest to find reliable alternatives to Russian oil and gas will continue.