Eni Will Ask Italian Court to Reconsider Oil-Plant Seizure

  • Treatment plant was seized March 31 amid waste-disposal probe
  • CEO Descalzi defiant before lawmakers regarding Eni's conduct

Eni SpA will ask an Italian court to reconsider a decision to seize its oil-treatment plant in Basilicata after the authorities opened an investigation into waste disposal.

“Eni will ask the Court of Review to reassess the seizure order,” the Rome-based oil producer said Tuesday in a statement. “This is in Eni’s primary interest to clarify that all activities are conducted in respect of the environment and law.”

The Viggiano plant, which treats acidic oil from Basilicata’s 75,000-barrel-a-day Val d’Agri field, was seized March 31 amid a probe into the disposal of contaminated water. Production from the field has been halted as a result. Eni said an internal investigation found its practice of “water re-injection” was not dangerous and complied with Italian law and international best practices.

Chief Executive Officer Claudio Descalzi was defiant before lawmakers on Wednesday as he stressed Eni’s respect for environmental standards. The company is ready to face a long production shutdown at the Val d’Agri field in order to prove its innocence, he said.

“Stop production for two, for three years? I don’t care. We will go all the way” to prove Eni acted correctly, Descalzi said in Rome. “We have a clean conscience.”

Political Support

The company probably can count on political support in this matter, according to Giuseppe Rebuzzini, an analyst at Fidentiis Equities SV SA.

“This is definitely not the common language used by Eni executives against Italian magistrates,” Rebuzzini said by phone. He cited recent comments from Prime Minister Matteo Renzi that he’d do everything he could to speed up the Tempa Rossa heavy-oil field in the same region, a Total SA project that’s been postponed amid the oil-price collapse.

Descalzi said earlier this week that he expects an impact from the Viggiano seizure, without elaborating. Around 400 people work at the plant and the oil field, according to a 2014 company report.

Val d’Agri -- in which Royal Dutch Shell Plc has a stake -- has been producing oil since the 1990s. It’s the country’s largest onshore field and accounted for about 40 percent of Eni’s Italian oil and gas output in 2014.

Last week’s seizure forced Industry Minister Federica Guidi to step down over an alleged conflict of interest after her businessman boyfriend Gianluca Gemelli was put under investigation amid the allegations of illegal waste disposal.

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