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Eni expects refining profit in 2012

DIVIDEND growth  forecast from next year as company puts annual rise in production at 2% Rome: Eni SpA, Italy’s largest oil and gas company, expects refining to return to profit from 2012 after boosting sales and efficiency. It forecast dividend growth from 2011.

The dividend will grow in line with inflation estimates by the Organisation for Economic Cooperation and Development from next year, based on oil prices of about $65 a barrel. Eni also reduced its forecast for production growth, and sees output exceeding two million barrels of oil equivalent a day in 2013 with new developments in Iraq, according to a statement.

“Refining is going to be a very challenging business” after Eni lost about $274 million (Dh1 billion) in 2009, Jason Kenney, head of oil and gas research at ING Commercial Banking, said in a telephone interview from Edinburgh.

Dividend growth outlook “is a positive signal”. Chief Executive Officer Paolo Scaroni is seeking oil ventures abroad to increase output. Eni is expanding in Venezuela, where it plans to develop $18 billion of projects, and Iraq, where it will spend about $1 billion a year with partners to boost production at the Zubair field.

The Rome-based company expects production to grow at an average annual rate of more than two per cent until 2016. It had previously forecast output to grow 3.5 per cent through 2012.

Eni is targeting investment of 52.8 billion euros (Dh264 billion), eight per cent higher than a previous plan. It will cut costs by 2.4 billion euros by 2013 as part of a programme that began in 2006.


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