NYTimes: Eni Suspends Effort to Sell Its Stake in Oil Services Unit

In response to the sharp fall in oil prices, the Italian oil company Eni said on Thursday that it was putting on hold its efforts to sell its stake in its drilling and oil field construction subsidiary, Saipem. Eni said it was reacting to market conditions that have become “increasingly volatile.”

The decline in oil prices of more than 40 percent in recent months is hitting oil services companies like Saipem particularly hard because their clients are scrambling to cut costs by halting projects and curtailing spending. Saipem’s stock price has fallen by more than 50 percent since the beginning of July, cutting the value of Eni’s 43 percent holding to about 1.6 billion euros.

Claudio Descalizi, who became chief executive of Eni this year, had wanted to sell the holding in Saipem as part of a plan to focus on Eni’s oil and gas businesses. Eni has been among the most successful of the large oil companies in recent years in finding new oil and gas, and these activities produce most of its profits.  MORE