Italian major Eni plans to exit traditional refining activities within the next decade as it is focused on bio-refineries and accelerating its transition to low-carbon energy, chief executive Claudio Descalzi told Bloomberg in an interview.
The top executive spoke a month after Eni announced in June a "new business structure to be a leader in the energy transition," creating an Energy Evolution division in the company to accelerate its plans to significantly boost renewable power generation and biofuels production.
Eni has bio-refineries in Venice and Gela, Italy, converted from conventional fossil-fuel refineries into bio-refineries to produce high-quality, cleaner fuels.
Only the two bio-refineries didn't work at reduced capacity during Italy's lockdown between March and early May, because they "worked very well," Descalzi told Bloomberg.
The internal rate of return at bio-refineries is around 15 percent, "not bad" compared to the upstream, the manager noted.
Earlier this month, Eni - like other European majors such as BP and Shell - reduced its long-term oil price assumptions and warned of impairment charges due to the lower value of its upstream assets.
While reducing its oil price assumptions, the Italian company reiterated last week its February commitment to reduce its carbon footprint and possibly even speed up its efforts to be more prepared in the energy transition.
"We confirm our strategy to become a leader in the decarbonization process, notwithstanding the enduring impacts of the COVID-19 pandemic on the global economy and the Company. We are assessing how to speed up our plans," Descalzi said.
According to a recent analysis from Transition Pathway Initiative (TPI) - an investor initiative backed by over $19 trillion of global capital - Shell and Eni now have the most ambitious emissions-reduction plans among the six European oil majors-Shell, Eni, BP, Total, Repsol, and OMV.
Eni has the most comprehensive strategic response with setting an absolute target to reduce all emissions, including Scope 3, by 80 percent by 2050, and disclosing the expected contribution of carbon capture and storage (CCS), the investor initiative said.
By Tsvetana Paraskova for Oilprice.com
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Tsvetana is a writer for Oilprice.com with over a decade of experience writing for news outlets such as iNVEZZ and SeeNews. More