Italy-based Eni SpA (E) has completed a farm-in agreement with Sasol Petroleum International, the upstream oil and gas subsidiary of Sasol Ltd (SSL).
Per the farm-in agreement, Eni will acquire 40% stake as well as Operatorship in the Exploration Right permit 236 (ER236) in South Africa. The permit gives the right to search for hydrocarbons on a wide offshore unexplored acreage of 82,000 square kilometer on South Africa’s east coast – Durban and Zululand basins – in Kwazulu-Natal province. Petroleum Agency of South Africa (PASA), the South African regulator, had granted the permit in late 2013.
Notably, Eni already has a presence on the East Africa coast, where it is engaged in exploration activities in Mozambique and Kenya. The aforesaid agreement, which is currently awaiting Government approval, will strengthen the partnership between Sasol and Eni in southern Africa and other areas. The tie-up between the companies is aimed at capitalizing on the opportunities in the gas value chain.
Moreover, greater upstream activity, as facilitated by ER236, will benefit South Africa and the broader region by increasing both energy security and international investments.
Eni, along with its consolidated subsidiaries, is engaged in oil and gas, electricity generation, petrochemicals, oilfield services and engineering industries. The company’s major business segments are Exploration and Production, Gas and Power, and Refining and Marketing. Eni carries out its major exploration and production activities for hydrocarbons.
The company operates these activities out of Italy, Croatia, North Africa, West Africa, the North Sea, the Gulf of Mexico, the Middle and Far East, the Caspian Sea, Australia and Latin America. Other segments are Chemicals, Services & Engineering, Other & Corporate, and Corporate & Financials. Eni is also involved in offshore and onshore hydrocarbon field construction. Further, the company offers offshore and onshore drilling as well as offshore design and engineering services for oil and gas companies.
At present, Eni has a Zacks Rank #5 (Strong Sell). Investors interested in the oil and gas industry could consider stocks like Encana Corp (ECA) and Matrix Service Co. (MTRX). Both of these sport a Zacks Rank #1 (Strong Buy).
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