MOSCOW (MRC) -- Italian oil producer Eni said it will cut investments by 20% this year and fast-track lower-cost projects after impairments due to weak oil prices resulted in a heavy fourth-quarter loss, as per Reuters.
Eni posted a net loss in the quarter of 8.46 billion euros (USD9.4 bln) on Friday after writing down EUR4.4 billion on upstream assets and booking charges on its stake in oil service company Saipem and chemical unit Versalis.
On a standalone basis, the state-controlled company which is Europe's fourth-largest oil major by market capitalization, said its adjusted net loss was 0.2 billion euros for the quarter.
Production in the fourth quarter, however, jumped 14% to 1.88 million bpd, the highest level recorded by Eni in the past five years.
The company, which increased its reserves by 48% in the fourth quarter, expects production this year to be in line with 2015, boosted by start-ups in Norway's Goliat field and the giant Kashagan field in the Caspian Sea.
"They've done great with the drill bit, finding big volume reserves at the right time and are well placed for 2016-2017," said Santander oil analyst Jason Kenney.
Eni's plans to slash capital spending helped send its shares up 5.7% by 1540 GMT, outperforming a higher European oil and gas index.
Weaker oil prices driven by a global supply glut have undermined revenues across the industry and prompted drastic cuts to investment as it sought to maintain dividends.
As MRC reported earlier, in December 2015, Eni announced that it is in talks with a potential buyer of a majority stake in its Versalis chemicals business part of the Italian oil company's plans to slim down and focus on oil and gas exploration. Two trade union leaders said an Eni board meeting was expected to give the go ahead to exclusive talks with U.S. investment firm SK Capital.
Eni is an Italian multinational oil and gas company headquartered in Rome. It has operations in in 79 countries, and is currently Italy's largest industrial company with a market capitalization of EUR68 billion (USD 90 billion), as of August 14, 2013. The Italian government owns a 30.3% golden share in the company, 3.93% held through the state Treasury and 26.37% held through the Cassa depositi e prestiti. Another 39.40% of the shares are held by BNP Paribas.
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