Eni’s High Octane Drive in the Gulf Continues

Italian old and gas giant Eni has been in a deal-making spree in the Gulf over the past year or so under the stewardship of Chief Executive Claudio Descalzi, and it seems there is no stopping them, as they continue to gain a foothold in the area. Descalzi seems to have made it his mission to turn the Italian company into a big player in the world’s preeminent playground for oil majors.

Since the March of 2018, Eni has completed as many as 9 deals in the United Arab Emirates, and in addition to that, they have done deals in Bahrain and Qatar as well. This past Sunday, Eni completed another deal worth $3.3 billion that will give them partial control over the fourth biggest refinery in the world. That refinery is in the UAE as well, and the acquisition will raise Eni’s capacity by more than 33%. However, the spate of buying in the region is not over yet for Eni, according to sources in the industry and banking circles. The oil major wants to become one of the most important oil companies in the Gulf and to do that, the company’s leadership believes that an acquisition spree is a way to go.

According to the sources, the company is looking for more deals in the UAE and in addition to that, they want to enter Qatar in a big way as well. However, they are now looking to acquire oil and gas fields instead of refineries. Reuters quoted a source who gave some interesting details about Eni’s CEO’s deal-making in the region. He said, “Descalzi was in the UAE 20-odd times last year to personally build relationships to secure the deals. And there’s more on the way.”

Traditionally Eni has been a big player in Africa, and over the years, the company had become too reliant on their operations in one continent. As a matter of fact, the African operation contributes more than half of the company’s entire production. Their CEO Descalzi has the long term plan of ending that overreliance on the African operations. Additionally, the company’s assets in volatile countries in Africa like Nigeria and Libya has also been a source of concern for investors. In this regard, the Gulf seems to be a different world altogether, since political volatility is a remote possibility in the region. According to Alessandro Pozzi, an analyst at Mediobanca, “The group has ramped up operations lightning fast in an area that has some of the world’s biggest resources and that’s on the doorstep of Asia.” 

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