Daily Digest: February 28th, 2020

EU CLEARS ARAMCO'S $69BN PETCHEM PURCHASE

The European Commission gave its unconditional approval of Saudi Aramco's $69bn purchase of Riyadh-based petrochemicals giant Sabic, an EU filing shows.

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The Big Picture:

• Aramco announced plans to acquire 70% of Sabic from the Saudi Public Investment Fund in March 2019, a deal aimed at consolidating its push into the gas-based petrochemicals segment.

• Sabic has a considerable international presence, active in more than 50 countries. It is the biggest producer of ethylene in Europe, operating plants in Germany, the Netherlands and Ireland.

• Saudi Arabia wants to build up its petrochemicals industry in order to add value to its abundant gas resources. Aramco has increased its focus on gas exploration and development to support this year.

ENI'S OIL OUTPUT TO DECLINE FROM 2025

Italian energy producer Eni expects its oil and gas output grow by 3.5%/yr and to peak in 2025, it said, as it set out its four-year investment plan (2020-2023) and long-term plan to 2050 that focuses on high-value, short-payback projects.

The Big Picture:

• CEO Claudio Descalzi said the company would "reinforce its role as a global player in the world of energy with renewables and circular economy activities.

• By 2050, gas will account for about 85% of its production and it has fixed a target of an 80% reduction in net greenhouse gas emissions of its energy products by 2050, which exceeds the 70% indicated by the International Energy Agency.

ENERGEAN BUYS TOTAL'S STAKE IN OFFSHORE GREEK BLOCK

Mediterranean-focused producer Energean Oil and Gas has cut a deal to acquire French oil major Total's stake in Block 2, off the coast of western Greece, it said in a statement on February 27.

The Big Picture:

• Energean said the move gave it additional exploration opportunities in its core area with limited financial exposure. 

• The other shareholders in Block 2 are Greece's Hellenic Petroleum with 25% and Italy's Edison E&P, also with 25%.

UNITED OIL & GAS COMPLETES EGYPTIAN TAKEOVER

United Oil and Gas announced it had completed its acquisition of the Egyptian assets of fellow London-listed player Rockhopper Exploration.

The Big Picture:

• The company funded the deal, first announced in July last year, with an equity placing and a lending facility provided by BP. It has entered into an offtake agreement with BP for its future oil and gas supplies.

• United's partners at the Abu Senan concession are Kuwait Energy, which operates the project with a 25% interest, Global Connect with an additional 25% and Dover Investments with 28%.

ENI PLUNGES INTO Q4 LOSS AFTER NORWEGIAN BUY

Italian energy producer Eni reported a Q4 2019 loss of €1.89 ($2.1)bn, compared with a profit of €399mn the year before.

The Big Picture:

• A major expense was the purchase of ExxonMobil’s 150,000 barrels of oil equivalent (boe)/day Norwegian upstream business (Eni: 69.6%). It cost the Var Energi joint venture $4.5bn, which it paid from its own resources.

• The biggest increase in output came from Ghana and the Egyptian Zohr field but some Libyan fields reached plateau; there were also increases in Ghana and Angola and startups in Mexico, Norway, Egypt and Algeria.