Tuesday, July 16, 2024

Eni to sell US$4.3 billion in upstream oil, gas assets to fund energy transition

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Italian energy giant Eni is reportedly preparing to sell its global upstream oil and gas assets valued at over US$4.3 billion (Rp 70.5 trillion) as part of the strategy to fund its energy transition plans.

This asset sale is part of a broader initiative by Eni to divest hydrocarbon assets worth US$8.6 billion over the next three years. Among the potential assets for sale are Eni’s holdings in Indonesia.

“Units that could be part of the asset sale plan include several projects in Indonesia and Cyprus,” a source familiar with the matter said as quoted by Bloomberg on Tuesday, July 7, 2024.

Eni CEO Claudio Descalzi has outlined two approaches for this asset sale plan. He indicated that Eni will divest assets, including smaller projects that may appeal to local buyers, and consider selling stakes in some larger projects.

Eni has expressed its intention to gradually divest its hydrocarbon business to finance its energy transition initiatives.

Descalzi is advocating a satellite model, which would separate some of Eni’s operations into independent entities or satellites.

This approach aims to raise fresh capital and attract investors such as private equity firms and infrastructure funds. It also allows investors to choose their focus and allocate funds either to the oil and gas sector or the low-carbon business.

The asset sale reflects Eni’s strategic steps in navigating the global energy transition, focusing on developing more sustainable and environmentally friendly business operations.

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