Italian oil major Eni is optimistic about its second-quarter results, despite posting a €4.40 billion net loss attributable to shareholders on Thursday, Kallanish Energy reports.
The company recorded a €424 million profit this time last year. However, 2Q20 results were hugely impacted by post-tax impairments of €3.6 billion mainly relating to oil and gas assets and refinery plants. The review in hydrocarbon prices assumptions due to the current market conditions is hurting most O&G companies.
CEO Claudio Descalzi said the Q2 results are “extremely positive considering we have gone through what is likely to be one of the most challenging quarters of the oil and gas industry has faced in its history.”
Eni said its financial performance was negatively affected by the combined impact of the ongoing economic recession and, consequently, a major hit to energy demand, as well as by oil and gas oversupplies.
But following “positive trends” recorded in the oil market in June and July, the company is assuming “a gradual recovery” in global consumption of hydrocarbons and power in the second half of the year. It expects a rebound in energy demand in 2021.
Yet, its 2020 outlook still considers the prospect of the pandemic having an “enduring impact on the global economy and the energy scenario.” As a result, it plans to cut its capex by 35% than previously budgeted to €5.2 billion this year.
Management revised down long-term oil and gas prices. Long-term Brent was reduced from $70/Bbl to $60/Bbl, while spot gas prices at the Italian hub have been reduced by 30% in the long-term and refining margins are expected to decline in the short-term.
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