Eni Shareholders Set to Confirm Oil Man Descalzi as CEO
Shareholders will vote to make him the new CEO later today at the company’s annual general meeting held in Rome. Descalzi was nominated to replace Paolo Scaroni by the Italian government, Eni’s biggest shareholder with a 30 percent stake held both directly and through an investment by state lender Cassa Depositi e Prestiti.
Descalzi, 59, has headed exploration and production since 2008 and oversaw Eni’s biggest natural gas discovery off the coast of Mozambique. With the nomination, Italian Prime Minister Matteo Renzi signaled his preference for experienced managers over political appointees.
“He’s an experienced oil man and may redirect the company more towards its core business of seeking oil and gas around the globe, which is what Eni does best,” said Nicolo Sartori, an energy analyst at Rome’s Institute for International Affairs. He also sees the company increasing its global reach to counter geopolitical risks in areas such as North Africa and Russia. “The challenge will be the politics, which Scaroni did well, and in particular relations with Russia to see whether he will move away or maintain the historically tight link.”
Scaroni, who had been initially appointed by then-Premier Silvio Berlusconi’s government, will step down after nine years at the helm. Descalzi, who started his career at Eni in 1981 working on projects in the North Sea, Libya, Nigeria and Congo, was at Scaroni’s side for much of this time overseeing key projects in areas including Mozambique and Kazakhstan.
In Kazakhstan Descalzi tried to improve project management after delays and cost overruns blighted Eni’s leadership of the $48 billion Kashagan project. In Mozambique, Eni and Anadarko Petroleum (APC) Corp. found more than 100 trillion cubic feet of gas, enough to build the world’s second-biggest plant to liquefy fuel.
In Russia, with which Eni has had dealings since the 1950s, the stakes are high as the company has a partnership with OAO Rosneft (ROSN) and is one of OAO Gazprom (GAZP)’s partners in the South Stream gas pipeline project to bring natural gas to Europe from Russia. That project may become problematic as tensions between Russia and Ukraine put a strain on Russia’s relations with Europe and the U.S.
Along with Descalzi, the Italian government in April also nominated several other senior managers at Italy’s largest companies. Today’s shareholder vote is the first of a series aimed at confirming the nominations.
Another key vote will take place at Enel Spa (ENEL)’s shareholder meeting on May 22 for the appointment of Francesco Starace as the power company’s new CEO.
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