The mood around ENI has been nirvana-like lately as the company’s explorers have made some lucrative enlightened guesses. Beginning in 2010, ENI and a rival, the Houston-based Anadarko Petroleum, made a series of finds off Mozambique, a country in East Africa, that add up to the largest natural gas trove of recent years — the equivalent of about 16 billion barrels of oil.
ENI controls the largest share of the Mozambique findings, with 70 percent of an offshore block in the Indian Ocean called Area 4, in what is known as the Rovuma Basin.
ENI’s chief executive, Paolo Scaroni, said that the discoveries had come after ENI spent five years studying East Africa, where very little oil and natural gas had been found. When Mozambique made exploration blocks available in 2006, ENI bid and got the one it wanted.
These days, oil and natural gas exploration is an industry as fraught with geopolitical risks as it is with geological ones, of course, as the recent hostage-taking attack in Algeria has made clear. And ENI is as aware as any European energy company of the dangers of politically volatile North Africa, given its own extensive operations in Algeria and Libya.
But for now, at least, Mozambique is not one of Africa’s trouble spots. And in any case, energy companies tend to follow opportunities wherever they can find them.
“Although Mozambique was a new country, we thought the chances were reasonable, about 20 percent,” of finding something, Mr. Scaroni said during an interview in Milan. “Of course it was high-risk, high-reward.”
It was after Anadarko, a U.S. independent, announced a discovery in an adjacent tract that ENI, which had been preparing to drill in another part of its block, decided to put its first well near Anadarko’s tract.
Mr. Scaroni, a graduate of Columbia Business School in New York with a master’s degree in business administration, took the top job at ENI in 2005 after spending much of his career outside Italy and the oil business. He has been gradually reshaping the company into more of a machine for finding and producing oil and natural gas and less of the lumbering state conglomerate that had toiled in the second tier of global oil giants.
Mr. Scaroni, 66, also has the crucial task of maintaining ENI’s relationships with a group of fossil-fuel-rich but prickly host countries that include Iraq, Libya, Russia, Venezuela and, elsewhere in Africa, Angola and the Republic of Congo. He regularly turns up in places like Baghdad or Brazzaville that might give other chief executives pause.
During the interview, the Zubair field in Iraq was on his mind. “We have a company with 150 expatriates in Iraq, with a huge effort for security, and the economic result for us is very little, since we are paid $2 per barrel,” he said. “From time to time, we ask ourselves: Is it worth it?”
ENI is the largest foreign producer of oil and gas in both Algeria and Libya. ENI executives say they were surprised and shocked by what happened to BP and Statoil, which are partners in the Algerian plant that was seized, and are tightening up their own security measures. They note that ENI already has large numbers of Algerian troops inside the perimeters of its Algerian sites, while troops apparently were not posted inside the seized complex at In Amenas.
So far, Mr. Scaroni has smoothly sailed ENI through Libya’s chaotic transition from the regime of Col. Muammar el-Qaddafi to a new government that is still trying to find its balance. Unlike most other oil companies, ENI thrived under the Qaddafi regime, developing new fields and building a $9 billion facility at Mellitah, west of Tripoli, to pipe natural gas under the Mediterranean.
Mr. Scaroni was quick to go to Benghazi in April 2011 to meet the rebel leadership, even before Colonel Qaddafi’s fall. Since then, ENI has restored most of its Libyan production, which represents 14 percent of ENI’s oil and natural gas output.
Article source: http://www.nytimes.com/2013/01/26/business/energy-environment/eni-makes-a-push-toward-the-top.html?partner=rss&emc=rss