Eni dims Nigerian investment, emphasizes carbon neutrality

Sopuruchi Onwuka

Italian multinational energy firm, Eni, has confirmed a shift in its business focus which entails diverting significant proportion of the company’s investments on incremental basis from fossil intensive to agro-biofuel and renewable energy production.

The company’s new business focus on green energy dims expectations that local Nigeria Agip Exploration (NAE) might commit significant funding towards increased exploration activities in its Nigerian offshore oil blocks, where analysts point at greater reserves prospects, especially in the deepwater acreages.

In its business outlook reports titled Eni for 2021, the company outlined three focal points that would address just transition, carbon neutrality and sustainable performance. In the three reports, the company committed to sharing social and economic results on its path to carbon neutrality by 2050; focusing on its strategies and main climate targets; and providing an overview of the company’s environmental, social and governance indicators respectively. 

The projects and initiatives adopted by Eni to ensure a fair transition, according to the reports, include forest conservation and building of carbon sinks, development of biofuels and production of renewable energy.

Eni stated that it would use its new businesses in creating jobs and supporting the development of new activities “in the countries of presence.”

According to Eni’s Chief Executive Officer, Claudio Descalzi, the company’s new business pathway falls in line with the moves by the European countries to seek energy independence from the oil market and the continent’s leading position in the global movement towards decarbonization.

“As Eni, we strongly feel the responsibility to contribute to giving access to energy to all, supporting the development of the countries where we are present, and contributing to the achievement of the highest ambitions of the Paris Agreement. This commitment is stronger today, in light of the war in Ukraine, at a historical moment when it is necessary to be even more inclusive and not divisive, seeking the common good and increasing efforts to ensure Europe’s energy security, while accelerating the decarbonization process,” he said. 

The changing business and investment focus of Eni raises concerns on the company’s business and investment outlook in Nigeria where it has been a major player and government’s industry partner for over five decades.  

The Oracle Today reports that Eni’s local affiliates in Nigeria include the Nigeria Agip Oil Company (NAOC) and the Nigeria Agip Exploration which operate onshore and deepwater petroleum exploration and production agreements respectively with the Nigerian National Petroleum Company (NNPC) Limited.

Eni-NAE’s investment is central to development of Nigeria’s deepwater Zabazaba field development project which is expected to increase the country’s crude oil production by 150,000 barrels per day and confer the domestic economy with capital importation of over $12 billion or N6.0 trillion.

Onshore Niger Delta, NAOC is divesting all its interests in the Shell operated NNPC/Shell/Total/Agip joint venture, scaling down the company’s JV exposure to self operated assets in which its holds equal interests with Oando Energy Resources (OER).

However, the future of Eni in Nigeria’s petroleum industry appears austere in the “Eni for 2021” reports where it declared incremental transition from fossil energy production.

In its 16th voluntary sustainability report captioned “Eni for 2021 – A just transition,” the company declared its path to carbon neutrality by 2050; saying it would contribute to giving access to energy to all and also contribute to the achievement of the highest ambitions of the Paris Agreement.   

“Specifically, with regards to the 2050 carbon neutrality strategy, Eni further strengthened its objectives, announcing a 35% reduction in net scope 1, 2 and 3 emissions by 2030 and 80% by 2040 with respect to 2018 levels (compared to the -25% and -65% targets in the previous plan).

“For net scope 1 and 2 emissions, the company will achieve -40% by 2025 (compared to 2018 levels) and net zero emissions by 2035, five years ahead of the previous plan. It will also increase the share of investments dedicated to new energy solutions, targeting 30% by 2025, doubling to 60% by 2030 and reaching 80% by 2040.”

The company stated that it would restructure its business activities towards the paths of carbon neutrality; adding that the new mode would now channel resources towards forest conservation projects, the development of renewables, conversion of crude oil refineries into biorefineries, and the creation of agri-hubs that will provide feedstock for biorefineries.

The company however pointed out that its decarbonization moves would emphasize “just transition” which it said, aims to manage the impact of the energy transformation on people, “starting with direct and indirect workers and including communities and customers.”

Eni stated that it has also strengthened its partnerships with international organizations for development cooperation, adding that it carried out “economic diversification projects in the agricultural sector in Angola, Congo and Nigeria, and projects to support local and youth entrepreneurship in Egypt.”

Other social responsibility programmes in host countries in 2021, the company listed, include an Eni sponsored water treatment plants aimed at improving access to water for the population of Basra, Iraq.

 “Eni’s commitment to promoting education and professional training remains central, as showed by the initiatives in Angola, Egypt, Iraq, Mexico and Mozambique.”