Italy’s Eni Restructures in Anticipation of Energy Transition
Integrated Italian energy giant Eni announced the creation of a new business structure to position the company as a leader in the global energy transition. The new structure, approved this past week by the company’s board of directors, establishes two distinct business groups, Natural Resources and Energy ,
The Natural Resources group will develop the upstream oil & gas portfolio sustainably, reducing its carbon footprint by scaling up energy efficiency and expanding production in the natural gas business, and its position in the wholesale market. The division will focus its actions on the development of carbon capture and compensation projects, and will aim to maximize cash flow generation through continuous technological development, and increased efficiency. The Natural Resources group will incorporate the Eni’s oil & gas exploration, development and production activities, natural gas wholesale via pipeline and LNG, as well as forestry conservation (REDD+) and carbon storage projects, and sustainability which will continue to integrate across all Eni’s activities. The company Eni Rewind (environmental activities), will also be consolidated in this business Group.
Energy Evolution will be dedicated to supporting the evolution of the company’s power generation, product transformation and marketing from fossil to bio, blue and green. The division will focus on growing power generation from renewable energy and biomethane, coordinate the bio and circular evolution of the company’s refining system and chemical business, and further develop Eni’s retail portfolio, providing increasingly more decarbonized products for mobility, household consumption and small enterprises. Energy Evolution will incorporate the activities of Eni’s power generation from natural gas and renewables, the refining and chemicals businesses, Retail Gas&Power and mobility Marketing. The companies Versalis (chemical products) and Eni gas e luce will also be consolidated in this business group.
The restructuring of Eni is a major step in implementing the company’s long-term strategy, which it outlined earlier this year. The overarching theme of that strategy is the creation of value over the long-term that combines economic and financial sustainability with environmental sustainability.
Commenting on Eni’s new structure, Chief Executive Officer Claudio Descalzi said:
“This new structure reflects Eni’s pivot to the energy transition. An irreversible path that will make us leaders in decarbonized energy products. With our new Plan, in February, we have set our path for the next 30 years, as of today it is unique in our industry. To make the plan come true, and position us to accelerate its delivery, we are creating two new business groups in our company. They will have specific objectives, but they will also cooperate to deliver on the transition and to provide our customers with the widest range of sustainable products. The reorganization also involves the corporate structures, which will evolve, continuing to be the central reference point for strategic and control processes, providing an effective support to meet the business groups’ objectives. The fight against climate change and promotion of sustainable development are recognised by governments, civil society, investors and business alike as priorities for global development. Only those who pursue these in an innovative way will create value in the long term. We want to be main actors in a Just Energy Transition, in which we believe, and is central to Eni’s transformation.”
The Natural Resources group will be headed by Alessandro Puliti, currently serving as Eni’s Chief Upstream Officer. Energy Evolution will be lead by Eni’s current CFO, Massimo Mondazzi. Mr. Mondazzi will keep his role as Eni’s Chief Financial Officer until August 1st, 2020.
Additionally, Eni announced the creation of a new central function, Technology, R&D, and Digital. This new function underlines the strategic relevance that Research & Development and technological innovation represent for the company as a key driver to create value and growth, through the development and rapid deployment of new technologies on an industrial scale. Technology, R&D and Digital will incorporate the current ICT and Digital activities, which are a key support to the transformation of the company’s business model, as well as the management of the technical and scientific knowledge which the new business groups will implement.