Italy's Eni to invest around $20 billion in the Gulf region
Italy's Eni has announced that it will invest $20 billion in the Gulf over the next five to six years. "The Gulf remains a strategic area for the Italian energy group," said Claudio Descalzi, the company's chief executive officer. Descalzi also stated that one of the objectives of this project is to invest in energy transition.
Due to the causes of climate change and pressure from environmental organisations, Eni, like other oil companies, has begun a process of decarbonisation. "Eni is looking towards technological innovation, but with pragmatism. There is no point in innovating and investing in new technologies when there is still a medieval system that does not allow you to apply the efforts made to decarbonise," Descalzi explained recently at a meeting on energy transition.
Earlier this year, Eni also announced changes to its business to meet its decarbonisation targets. The Italian company has committed to achieve full decarbonisation of its products and processes by 2050. To achieve this, in April, the company began considering spinning off its oil operations in the Middle East and West Africa into new ventures to reduce its debt, which reached $32.2 billion last year, and finance its transition to low-carbon energy.
Eni is the largest foreign oil and gas producer in Africa, with major projects in Nigeria, Congo and Angola. It also has major production sites in Egypt, Libya and Algeria. Moreover, the Italian oil company has rapidly established its presence in the Gulf region as it seeks to boost its growth in Asia.
"The Middle East, especially the Gulf, will play an increasingly important role in Eni's strategy," said Labo Pestelli, the company's public relations director. Pestelli considered the Gulf to be "the ideal location" for the company's operations as it contains "50% of the conventional energy reserves that can be exploited at the lowest cost". He also noted that in this area "there are many new ideas and new technologies for renewable energy production and for building smart cities". Dubai and Abu Dhabi lead the Middle East and North Africa region in the Smart City Index's ranking of smart cities. Both cities outperform key Asian metropolises such as Tokyo, Shanghai and Seoul.
Eni, according to energy industry sources, could cooperate with partners in Africa, the Middle East and the Far East to achieve its goals. The Italian oil company has been in talks with Britain's BP and France's Total, following its gas campaign in Norway in 2019, where it partnered with Hitch Vision to create a joint venture, Far Energy. This plan proved highly profitable for Eni and its profits rose to almost $1.53bn.
Last August, as part of its energy transaction plan, Eni acquired Be Power, the second largest Italian electric vehicle charging operator. "With the acquisition of Be Power, Eni takes a leading position in a market at the heart of the European Union's energy transition strategy," said Descalzi. "We continue on the path that will lead us to become a leader in the production and marketing of fully decarbonised products," the Eni director added.