Italy’s supermajor Eni SpA has upended its oil and gas focus by creating two business groups that are to maintain “close links” to the hydrocarbon value chain but better manage the energy transition to alternative fuels by developing decarbonization processes.
Eni, headquartered in Rome, signaled the revamp in March, taking a cue from fellow European-based supermajorsBP plc, Equinor ASA, Royal Dutch Shell plc and Total SA, which also have stepped up the transition from fossil fuels.
With medium-term goals to 2025 and long-term goals to 2050, Eni plans to increase production to 2025 then begin a sharp transition toward renewables and biomethane. Upstream production is expected to grow at a rate of around 3.5%/year up to 2025.
Eni’s Natural Gas business group is to oversee the upstream oil and gas portfolio sustainably, promoting energy efficiency and carbon capture. Energy Evolution would be dedicated to the transition of the power generation, product transformation and marketing from fossil fuels to “bio, blue and green” energy.
With board approval, Eni’s central corporate functions are to be organized to support CEO Claudio Descalzi “in his integrated compliance, control and risk management responsibilities, and the business groups in meeting their objectives.”
“This new structure reflects Eni’s pivot to the energy transition,” Descalzi said. “An irreversible path that will make us leaders in decarbonized energy products.”
Referring to the plan issued earlier this year, he said Eni had “set our path for the next 30 years…” Each new business unit “has specific objectives, but they will also cooperate to deliver on the transition and to provide our customers with the widest range of sustainable products…
“The fight against climate change and promotion of sustainable development are recognised by governments, civil society, investors and business alike as priorities for global development. Only those who pursue these in an innovative way will create value in the long term. We want to be the main actors in a ”Just Energy Transition,’ in which we believe, and is central to Eni’s transformation.”
The Natural Resource group is to be led by Alessandro Puliti while Massimo Mondazzi is overseeing the Energy Evolution business. Mondazzi is to remain CFO until August.
The Natural Resource unit would incorporate oil and gas exploration, development and production activities; natural gas wholesale via pipeline and liquefied natural gas. In addition, it is to include forestry conservation and carbon storage projects, as well as sustainability which would continue to integrate across all Eni’s activities.
The Energy Evolution business is to focus on growing power generation from renewable energy and biomethane, by coordinating the transition of the company’s refining system and chemical business to develop increasingly more decarbonized products.
The Evolution unit is to incorporate the activities of power generation from natural gas and renewables, the refining/chemicals businesses, retail gas/power and mobility marketing.
Another central function also is being created across the organization to include technology, research/development and digital.
Meanwhile, BP on Friday pledged new measures “to help restore, maintain and enhance nature in recognition of the action needed to strengthen biodiversity.” The actions coincided with World Environment Day.
The measures set an aim to achieve a net positive impact on biodiversity in new projects and to enhance biodiversity around existing major operating sites.
“For BP, biodiversity is more than just an ”add-on,” CEO Bernard Looney said. “It is a vital part of our purpose to reimagine energy for people and our planet.” Along with climate change, he said “loss of biodiversity is one of the greatest threats the world faces.”
BP is defining “no-go” areas for operating new exploration and production, including inside the official boundaries of UNESCO World Heritage sites or Strict Nature Reserves or Wilderness Areas, as defined by the International Union for Conservation of Nature that were designated Jan. 1.
“BP plans to establish partnerships with global and local conservation organizations to support us as we move forward,” Looney said. “We intend to work transparently, disclosing progress in key areas and welcoming support and challenge from investors, academia and conservation organizations.”
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