In response to the collapse in oil prices and the economic impact of the coronavirus pandemic, Italy's Eni lowered its production guidance for 2020 and announced at least a 30 percent cut in planned capex for 2020 and 2021.
Down from initial forecasts of around 1.9 million boe/d for the year, the company expects oil and production to average between 1.75 million–1.80 million b/d of oil equivalent in 2020. Eni said it will also cut Eur2.3 billion from 2020 capex, 30 percent lower than the initial targets, and anticipates further reductions of 30 percent-35 percent lower than original plans in 2021.
The exploration and production segment with the re-phasing of some projects will be the focus of the company's capex cuts. Once market fundamentals improve, the projects are expected to resume quickly, thus recovering any lost production volumes.
Average production of 1.77 million boe/d for Q1 2020 reported by Eni, 3.6 percent lower than Q1 2019. Down from Eur992 million in the year-ago period, the company reported adjusted net earnings of Eur59 million for the period. From a profit of Eur1.1 billion in Q1 2019, Eni reported a Eur2.93 billion net loss for the period, reflecting major price-related writedowns of its oil and gas inventories.
