Eni head in Al Arabiya: the gas crisis in Europe is caused by underinvestment

The CEO of the Italian company, Claudio Descalzi, said in an interview with “Al Arabiya” that Eni presented a new strategy, which is an objective, not an ambition, for the year 2050, and to it were added intermediate objectives by 2030 for the emissions of the first and second band in the upstream activities in 2040 for the emissions of the two bands The first and the second in all of its other activities.

He added that as far as the third area is concerned, for the company, it is an essential part of its methodology and strategy, and the work has started now. in then on the strategy to achieve net emissions zero by 2050.

He explained that one of the important steps is to provide the company’s customers with electricity and gas as green products. This is why Eni has decided to separate the customer unit, especially since it has so many customers, which exceed 10 million, and the goal is to reach 15 million by 2030.

He stressed that this is a good way to tackle third-band emissions, because you sell carbon neutral products to your customers, and Eni will do the same in transport activities, whether it’s auto or aviation, and also with its customers. He continued: “Our project, therefore, is to produce and sell emissions products zero, which can be green, blue or organic “.

Claudio Descalzi said: “So we are taking responsibility for third-tier emissions, because it is not easy to produce products in carbon and then ask customers to invest in reducing emissions. The best way to tackle third-tier emissions is to sell carbon neutral products, and this is our project ”.

He continued: “Currently, we have two main business lines, we have all the upstream gas business, the carbon capture and storage business and the forest conservation business. In addition to the advanced energy business, which includes products chemical and retail operations. which include electricity and gas customers. Thus, the retail trade will be separated. “

In a related context, the head of Eni stated that the Ebitda multiplier is between 3 and 4 times, while the multiplier in the renewable energy sector is 23 or 24 times, and that our returns before interest, taxes and depreciation reaches one billion euros.

He added that when this company is split and listed it will be able to raise capital very easily, and this will be a lever for ours business, and therefore the investment burden will not remain on Eni, but will fall on the subsidiary, which will be able to increase its growth in the renewable energy sector, because we aim to reach 15 million customers and at least 15 gigawatts of green electricity.

He explained that the separation of the renewable energy company will increase its flexibility and the value of its business, which is valued at a lower value within Eni, in addition to this there will be a greater focus on its activities.

Invest in hydrogen

He said Eni plans to expand into the blue hydrogen field to provide clean fuel for its refineries, and the problem with hydrogen is weak demand, and Eni is in danger of investing in hydrogen and doesn’t know when it will be used.

On the gas crisis in Europe, the head of Eni said that the crisis is due, I believe, to the fact that, starting from 2014, investments in the upstream sector have fallen by 15% globally. So 7 years of discounted investment, including 2 lazy years during the Covid pandemic. But the demand is still there, and there is also a rebound in demand after the pandemic, but we have not invested.

He added that there is therefore a shortage of gas, and this is not the only real problem in Europe but everywhere, including South America, as well as in North America e in Asia, because demand grew after the pandemic at a much faster rate than the rest of the world.

He explained that the situation reflects a structural problem, not a problem that can be addressed in one night, due to 7 years of low investment, plus companies are forced to spread their investments across their traditional businesses, which they need to increase efficiency and sequester more carbon, and on the other hand they need to invest in the energy transition, the circular economy, biofuel refineries and renewable energy.

He continued: “So for hydrocarbons, there are very few investments available. So, I think the problem is structural. And when prices are very high, the demand goes down. But I’m optimistic for the future, because I’m confident that investments will increase,” in the gas in particular, but certainly not in oil, because gas is the only sector that is integrated in the transformation process with renewable energies and biofuels, because it does not pollute. But if gas prices are very high and investments are not directed to this sector, we will face the risk of an increase in the use of coal. And this is already happening, the use of coal to produce electricity is in increase.

coal tops

He explained: “An important conclusion was reached at COP 26 which is to talk about coal for the first time and to set the trend. Some people may not be happy with that, and I understand some of the poorer countries, but the Coal continues to maintain the leading position in electricity generation, with a 37 percent share, and accounts for 70 percent of emissions from this sector.

“Just talking about it is a big step, continued the Eni president. But, of course, the use of coal cannot be reduced by increasing gas consumption, because we need continuity in the electricity sector. Regardless of the point of view, we are in a transition phase, and what we are witnessing in the gas market is a critical point that we all have to face ».

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