Eni SPA E entered an agreement to divest its Pakistan assets to Prime International Oil & Gas Company as part of plans to eliminate its non-core assets to boost the cash flow.
Notably, Prime International is a new-founded 50/50 joint venture between Eni’s former local officials and Hub Power Company Ltd, which is recognized as the largest Independent Power Producer in Pakistan.
The drive came as the global slowdown in economic activities caused by the pandemic had a devastating effect on the company’s cash flow and the growing pressure drom investors to shift to cleaner energy sources.
The divestment comprises the company’s eight development and production leases in the Kithar Fold Belt. Further, it involves the Middle Indus Basins as well as four exploration licenses in the Middle Indus and the Indus Offshore Basins.
The Italian energy major mentioned that its main permits were in Bhit/Badhra fields, where it owned a 40% participating interest, and Kadanwari, with an 18.4% interest. The company’s other assets were in the permits for Latif, Zamzama and Sawan, with 33.3%, 17.5% and 23.7% interests, respectively. Prime International has also acquired the 10-MW photovoltaic plant of Eni.
Notably, the divestiture marks Eni’s exit from Pakistan and is in line with its four-year strategic plan to restructure the company's portfolio, extract additional value from its strategic assets and eliminate non-core businesses. The company commits to fully decarbonize all its products and processes by 2050 to meet its ambitious renewable energy targets.
Company Profile
Headquartered in Rome, Italy, Eni is one of the leading integrated energy players in the world.
Zacks Rank & Other Stocks to Consider
Eni currently flaunts a Zack Rank #1 (Strong Buy).
Some other top-ranked players in the energy space are Royal Dutch Shell Plc RDS.A, currently sporting a Zacks Rank #1, and Suncor Energy Inc. SU and Valero Energy Corporation VLO, each carrying a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Shell’s earnings for 2021 are expected to rise 19.9% year over year.
Suncor’s earnings for 2021 are expected to surge 138.2% year over year.
Valero Energy’s earnings for 2021 are expected to surge 815.7% year over year.
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