Italian oil major, Eni, on Wednesday cut its oil and gas production outlook for 2013 citing continuous disruptions in Nigeria and Libya.

The company said continuous production outages in Nigeria and Libya had dented its output for the third quarter by almost four per cent.

Eni’s oil and gas production fell to average 1.65 million bpd of oil equivalent in the third quarter, due to ongoing disruptions in Nigeria and in Libya.

The company reported that its output was reduced by 50,000 boe/d in the quarter due to “force majeure events” in Nigeria and Libya, which were partly offset by field ramp-ups in Russia, Algeria, Angola and Egypt.

Looking ahead, the oil major said it expected full-year production to be lower than what it was in 2012.

Eni had in February predicted a more-than three per cent growth in its production this year, helped by the first volumes from the giant Kashagan oil field offshore Kazakhstan.

However, the company said in August that outages in Nigeria and Libya would mean it would be unable to grow production, predicting output unchanged year-on-year from its 2012 average.

The company also said the impact of pipeline theft, sabotage, other security issues and flooding in Nigeria reduced its production in Nigeria by around 30,000 boe/d during the first half of the year.

Its Chief Executive Officer, Paolo Scaroni, had in August said the oil company was reviewing its upstream portfolio in Nigeria in a bid to reduce its exposure to escalating levels of security related shut-ins which have been crimping its output from the West African producer.

“The quarter has not only been affected by difficult conditions in the European mid and downstream markets, but also by the extraordinary reduction of production in Nigeria and Libya, and by the appreciation of the Euro,” Scaroni said in a statement.

Despite the cut in production outlook, Eni saw a rise in profits during the third quarter of the year as gains from divestments helped to offset a fall in revenue.

Net profit for the three months to 30 September totalled nearly €4bn, up 61.9 per cent on the €2.5bn profit booked during the same period last year.

Eni said the rise in net profit was largely driven by the gain on the divestment of its 28.57 per cent stake in Eni East Africa to China National Petroleum Corporation earlier this year.

Overall operating profit, the company said, was actually down 19.1 per cent, totalling €3.3bn, compared to nearly €4.1bn in the third quarter of 2012, driven by a 5.9 per cent appreciation of the euro against the dollar and disruptions to the exploration and production processes.

Leading to the drop in operating profits was a fall in net sales during the quarter, from €31.5bn a year ago to €29.4bn this year.


Information from Punch was used in this report.