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Eni (E) to Explore Emission Reduction Opportunities in Libya

Eni SPA E signed a Memorandum of Understanding to explore and identify opportunities to reduce emissions and develop sustainable energy in Libya.

The initiative aligns with Eni’s strategy and the Libya government’s target to accelerate decarbonization for a more sustainable and low-carbon future.

Per the terms of the agreement, Eni will work on cutting carbon dioxide emissions by reducing routine gas flaring, fugitive emissions and venting. The company will also act on potential projects to reduce emissions from hard-to-abate sectors.

Beside this, Eni will evaluate new solutions for the development of renewable energy and initiatives for electricity efficiency in the country. The Italian energy major will work to identify additional gas resources from existing fields, which are to be developed as part of an integrated project for the domestic market and for exports.

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Eni has been contributing to Libya’s growth since 1959, with a share of 80% of the national production. Eni, the main gas producer in Libya globally, has an extensive portfolio of assets in exploration, production and development. In 2022, the company’s average equity production was 165,000 barrels of oil equivalent per day.

Eni is leading the energy transition. The company pledged to become carbon-neutral by 2050 due to the growing urgency from investors and environmentalists to curb climate change. The leading integrated energy player is banking on rising energy production from renewable sources.

In January, Eni entered an agreement with Libya’s National Oil Corporation to develop the Structures A&E project, designed to increase gas production to supply the Libya market and ensure export to Europe. Structures A&E is believed to be the first major project in Libya in more than two decades.

The project involves the development of a carbon capture and storage facility at Mellitah. This will significantly reduce the overall carbon footprint, in line with Eni’s decarbonization strategy. The deal will have a duration of 25 years, with an estimated investment of $8 billion.

Price Performance

Shares of Eni have underperformed the industry in the past six months. The stock has gained 0.4% compared with the industry’s 1.8% growth.

 

Zacks Investment Research
Zacks Investment Research


Image Source: Zacks Investment Research

 

Zacks Rank & Other Stocks to Consider

Eni currently carries a Zack Rank #2 (Buy).

Some other top-ranked players in the energy space are Murphy USA Inc. MUSA and Sunoco LP SUN, each currently sporting a Zacks Rank #1 (Strong Buy), and Enterprise Products Partners LP EPD, carrying a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.

Murphy USA announced first-quarter 2023 earnings per share of $4.80, which beat the Zacks Consensus Estimate of $4.06. The outperformance can be attributed to higher volumes and retail fuel contribution.

MUSA is committed to returning excess cash to its shareholders through continued share buyback programs. As part of this initiative, the motor fuel retailer recently approved a repurchase authorization of up to $1.5 billion following the completion of the existing $1-billion mandate. The move underscores MUSA’s sound financial position and commitment to rewarding its shareholders.

Sunoco reported first-quarter 2023 earnings of $1.41 per unit, beating the Zacks Consensus Estimate of $1.21. Better-than-expected quarterly earnings were primarily driven by higher contributions from the Fuel Distribution and Marketing segment.

For 2023, SUN revised its adjusted EBITDA guidance upward to $865-$915 million from the previously mentioned $850-$900 million.

Enterprise Products reported first-quarter 2023 adjusted earnings per limited partner unit of 64 cents, which beat the Zacks Consensus Estimate of 62 cents. This was primarily due to higher contributions from the Natural Gas Pipelines & Services business.

In the first quarter, Enterprise Products generated an adjusted free cash flow of $1,347 million against a negative free cash flow of $1,618 million in the year-ago quarter. EPD recorded a distributable cash flow of $863 million in the same time frame.

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