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Eni in Talks to Grow Presence in the Gulf

December 2, 2018

Italian major Eni is in talks to grow its footprint in Oman and the United Arab Emirates as part of plans to build its asset base in the oil-rich Gulf and offset its reliance on Africa, a source close to the matter said.

The international oil company has a limited presence in the Middle East, where some of the world's biggest oil and gas reserves lie, producing more than half its output in Africa.

"Eni is in talks with Oman for various opportunities," the source told Reuters, adding recent geopolitical tensions in the area had not curbed its interest.

Last year Eni sealed its first deal in Oman, winning a majority stake in offshore acreage and selling on part to Qatar Petroleum.

This year it took a first step into Abu Dhabi, paying $875 million for stakes in two oil concessions and then buying part of the giant Ghasa gas field from state oil group Adnoc.

The source said Eni had submitted an expression of interest for a minority stake in Adnoc's refinery business, confirming an earlier Reuters report.

Abu Dhabi has put on sale 40 percent of Adnoc's refining unit valued at $8 billion but will never sell to a single company, the source said, adding many others were interested including Chinese and Indian firms and France's Total.

"Eni is also interested in other downstream opportunities," the source said, pointing to Adnoc's ambitions in that area.

Last year Adnoc presented a 2030 strategy plan to open up its energy markets to foreign operators and attract the skills needed to develop E&P, refining and petrochemical industries.

Thanks to bumper gas discoveries in Mozambique's Mamba field and Egypt's Zohr, Eni has one of the strongest discovery records in the industry and one of the fastest time to market records.

"Getting into refining would give Eni a natural hedge to all its upstream business as well as allowing it to diversify away from Africa," said Santander oil analyst Jason Kenney.

Sources have also told Reuters Eni is in the race to get into Qatar's plans to expand its liquefied natural gas industry, saying teaming up with Qatar Petroleum in Mexico was a preparatory move. 

(Reuters, Reporting by Davide Barbuscia and Giselda Vagnoni in ROME and Stephen Jewkes in MILAN; editing by David Evans)

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