MOSCOW (MRC) - Italian energy company Eni pledged on Friday to reduce its oil production from 2025 and slash its greenhouse gas emissions by 80% and in one of the most ambitious clean-up drives in an industry under pressure from investors to go green, said Reuters.
The plan announced by Chief Executive Claudio Descalzi comes amid pressure on Eni to cut carbon emissions faster and also comes just weeks before the Italian government decides whether to reappoint the veteran oil man. Eni plans to boost its oil and gas production 3.5% a year until 2025 but then progressively cut back, mainly on crude, to ensure natural gas, which emits less carbon when burnt than oil, made up 85% of its overall output by 2050.
"The result will be a portfolio that is more balanced and integrated and will be stronger for its adaptability and competitive shareholder remuneration," Descalzi said. Descalzi, who ran Eni's exploration division before becoming CEO in 2014, is under pressure to prove he can shift the company towards cleaner sources of energy without inflicting too much damage on profitability.
Senior political sources told Reuters earlier this month the government, which owns 30% of Eni, was leaning towards giving Descalzi a third term - provided he works with a new board to speed up efforts to cut carbon emissions.
Under its new plan, Eni is aiming to cut its greenhouse gas emissions by 80% by 2050 in absolute terms, including emissions from refined products such as diesel or petrol when they are used by customers to drive cars, for example.
While rivals such as Britain's BP and Spain's Repsol have also included emissions from the use of their products in carbon targets, Eni went one step further.
It is including refined products made from oil and gas from third parties, as well at its own production which it says will grow as a percentage, while rivals have only pledged to cut emissions from barrels they have pumped out of the ground.
Others, such as Total and Royal Dutch Shell , have focused on cutting the amount of carbon emitted by each unit of energy they produce. Technically, that means their headline target measures could fall even though their absolute emissions rise with increased production.
"If you can't deliver green products you're going to lose your customers very quickly," Descalzi told analysts.
Oil and gas producers are feeling the heat from shareholders and environmental activists to cut emissions to meet the 2015 Paris climate goals with big institutional investors looking increasingly to green credentials to steer investments.
In a research note, Citi said as major European energy companies raced each other to be seen as the most sustainable, there was a risk some could commit to targets that end up being a rod for their back.
As MRC informed earlier, Italy’s Versalis (part of Eni) took its cracker in Dunkirk, France offline in early September, 2019, due to a fire which broke out at the company’s petrochemical plant. Local media sources also reported that the fire was brought under control with no reported injuries. The cracker has a production capacity of 380,000 tons/year of ethylene and 95,000 tons/year of propylene.
Ethylene and propylene are feedstocks for producing polyethylene (PE) and polyprolypele (PP).
According to MRC's ScanPlast report, Russia"s estimated PE consumption totalled 2,093,260 tonnes in 2019, up by 6% year on year. Shipments of all PE grades increased. PE shipments rose from both domestic producers and foreign suppliers. The estimated PP consumption in the Russian market was 1,260,400 tonnes in January-December 2019, up by 4% year on year. Supply of almost all grades of propylene polymers increased, except for statistical copolymers of propylene (PP random copolymers).
Eni is an Italian multinational oil and gas company headquartered in Rome. It has operations in in 79 countries, and is currently Italy's largest industrial company with a market capitalization of 68 billion euros (USD 90 billion), as of August 14, 2013. The Italian government owns a 30.3% golden share in the company, 3.93% held through the state Treasury and 26.37% held through the Cassa depositi e prestiti. Another 39.40% of the shares are held by BNP Paribas.