Eni Says Gas Prices Still a Challenge in the Short Term

Italian Eni has said that it expects gas prices to remain a challenge to its operations in the short term, despite a positive outlook for its production. The company made the statement as part of its 2012-2015 Strategic Plan.

"The outlook for supply in the European gas market is challenging in the short term with spot gas prices expected to be lower than those for oil-linked contracts," the company said. "This scenario will continue to cause competitive pressure in the market."

Eni said it expected the pressure to abate gradually in the long term and said that it had diversified its sources and supply to ensure that it remained competitive. 

Rising demand, it said, would be a contributor to the improvement of gas prices in the future.

"The increase in demand, driven by economic recovery and the increase in consumption of gas for fuel, in conjunction with the decrease in supply, will contribute to a recovery in the European gas scenario."

The company said that it would be increasing its production in the next three years, with a three per cent increase expected by 2015. The increase would equate to an additional 700 barrels of oil equivalent a day once projects from five key areas--Russia (Yamal), the Barents Sea, Kazakhstan, Venezuela and the sub-Saharan region--came onstream and Libya continued its recovery.