Italy’s Eni is considering creating a separate division to focus on renewable energy as the oil and gas major—like other European oil firms—is looking to drastically cut emissions and accelerate investments and development in clean energy and technologies.
Eni is set to overhaul its corporate structure, creating a division focused on green energy, Italian business daily Il Sole 24 Ore reported on Tuesday. Eni is weighing the setting up of two divisions whose bosses will report to chief executive Claudio Descalzi. One division will include upstream and midstream activities and will be headed by the current Chief Upstream Officer, Alessandro Puliti, while the other division will include downstream and renewables and will be headed by current chief financial officer Massimo Mondazzi, Il Sole 24 Ore reported.
According to analysts at Equita, quoted by the Italian newspaper, Eni’s new organization will allow it to accelerate its green energy activities that aim to expand its renewables, bio-refinery, and circular economy businesses. If Eni does separate its oil and gas business from renewables, the market would have a better understanding of the returns from green energy initiatives, the analysts said.
Eni hasn’t taken yet a final decision on a possible group overhaul, sources familiar with the plans told Reuters on Wednesday.
Just before the coronavirus hit the global economy and the oil industry, Eni unveiled a new long-term strategic plan, under which it expects its oil production to start declining after 2025, while it bets big on renewables. The company expects to have installed renewables capacity of 3 GW by 2023 and 5 GW by 2025, while installed renewables capacity is set to jump to 55 GW by 2050. In addition, Eni plans to obtain by 2050 an 80-percent reduction in net scope 1, 2 and 3 emissions, referring to the entire life cycle of the energy products it sells.
According to a recent analysis from Transition Pathway Initiative (TPI) – an investor initiative backed by over $19 trillion of global capital - Eni has the most comprehensive strategic response to the energy transition 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).
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.