Eni is eyeing an internal rate of return of 20% from its upstream activities in 2012, as it plans to invest a “colossal” amount in the division, said Chief Executive Paolo Scaroni Tuesday, reports Dow Jones.
“We want to growth more than our competitors in exploration and production,” said the CEO at the company’s annual shareholders’ meeting to approve 2011 results, according to Dow Jones.
Eni has provided for EUR 59.6 billion ($77 billion) of investments in its 2012-15 plan, 75% of which is set aside for the exploration and production division, as the company pushes for over 2 million barrels per day of proprietary production.
Scaroni also said Eni will begin renegotiating so-called ‘take or pay’ gas contracts later this year with Norway and the Netherlands, after having completed new deals with Russia’s Gazprom, Algeria’s Sonatrach and Libya.
Take or pay contracts have lost Eni profit in the face of weak gas demand in advance economies, and Scaroni says he wants to be able to renegotiate such contracts every year when the circumstances warrant, rather than pre-paying for gas under the current contracts.
