Eni Third-Quarter Profit Drops as Libya Turmoil Cuts Output

Eni SpA (ENI), Italy’s biggest oil company, said profit fell 29 percent in the third quarter as political turmoil in Libya cut production.

Adjusted net income declined to 1.17 billion euros ($1.61 billion), Eni said in a statement today. While profit beat the 998 million-euro mean estimate of 13 analysts surveyed by Bloomberg, the company said production was likely to be lower this year than in 2012. It had previously forecast output would be little changed.

Eni, the biggest foreign oil producer in Libya, is grappling with political unrest that’s cut the country’s production to as little as 250,000 barrels a day from 1.6 billion barrels before its 2011 civil war. Eni said today protests in Libya and disruptions in Nigeria reduced the company’s third-quarter output by 50,000 barrels a day.

The quarter was “affected by difficult market conditions in the European markets of mid and downstream, but also by the extraordinary reductions of production in Nigeria and Libya, and by the appreciation of the euro,” Chief Executive Officer Paolo Scaroni said in the statement. He said the company will still go ahead with a planned share buyback program.

Eni shares gained 1.3 percent to 18.35 euros in Milan trading today.

Production Down

Oil and gas production was down 3.8 percent in the quarter. Adjusted operating profit declined 21 percent in the period to 3.44 billion euros.

Production ramp-ups in Russia, Algeria, Angola and Egypt helped offset the negative impact of production halts elsewhere, Eni said.

“Results are encouraging, despite the missing production from Libya,” which will affect fourth-quarter results, Mediobanca SpA analysts said in a note to investors today. “The beginning of the buyback program represents a positive catalyst for the stock.”

The company said it had a net gain of 3 billion euros on its divestment of mineral rights in Mozambique to China National Petroleum Corp.

To contact the reporter on this story: Alessandra Migliaccio in Rome at amigliaccio@bloomberg.net

To contact the editor responsible for this story: Will Kennedy at wkennedy3@bloomberg.net

Bloomberg reserves the right to edit or remove comments but is under no obligation to do so, or to explain individual moderation decisions.

Please enable JavaScript to view the comments powered by Disqus.