Eni in major overhaul as it shifts toward renewable energy
- Business developments & projects
Italian energy giant Eni has announced a major overhaul of its business as it steps up efforts toward energy transition.
The company will create two business units with one focused on oil and gas called “Natural Resources” and the second new unit which will focus mainly on renewable energy named “Energy Evolution”.
Eni’s current head of upstream Alessandro Puliti will lead “Natural Resources” while the company’s Chief Financial officer Massimo Mondazzi will take over as head of “Energy Evolution”.
Mondazzi will keep his role as Eni’s finance head until August 1st, 2020.
“The two business groups will maintain close links in the hydrocarbon value chain, with the objective of best managing the different phases of the energy transition and jointly developing decarbonization processes to supply bio, blue and green products”, Eni said on Thursday.
Reducing footprint in oil and gas
The oil and gas unit will continue to build up the value of Eni’s upstream portfolio, with the objective of reducing its carbon footprint.
Eni said that this will be managed by scaling up energy efficiency and expanding production in the natural gas business, and its position in the wholesale market.
Furthermore, the unit will focus its actions on the development of carbon capture and compensation projects.
The business group will incorporate the company’s oil and gas exploration, development and production activities, natural gas wholesale via pipeline and LNG.
In addition, it will include forestry conservation and carbon storage projects, and sustainability which will continue to integrate across all Eni’s activities.
The company Eni Rewind, which handles environmental activities, will also be consolidated in this business group.
Focus on renewable energy
The second unit will focus on the evolution of the businesses of power generation, transformation and marketing of products from fossil to bio, blue and green, the Italian company said.
In particular, the unit will focus on growing power generation from renewable energy and biomethane.
The unit will coordinate the bio and circular evolution of the company’s refining system and chemical business, and it will further develop Eni’s retail portfolio, providing increasingly more decarbonized products for mobility, household consumption and small enterprises.
The companies Versalis, which handles chemical products, and Eni gas e luce will also be consolidated in this business group.
Furthermore, in terms of central structures, Eni will create a new function – Technology, R&D, and Digital to boost technological innovation and develop new technologies.
Announcing the new structure on Thursday, Eni’s chief executive Claudio Descalzi said this move reflects the company’s “pivot to the energy transition”.
“An irreversible path that will make us leaders in decarbonized energy products”, he said.
“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”, he said.
Descalzi noted that the two units will have specific objectives, but they will also cooperate to deliver on the transition and to provide the company’s 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.
“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”, Descalzi said.
“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”, he said.
Eni plans to implement the new organizational structure over the coming weeks.