Italy’s Eni (ENI.MI) is considering spinning off oil and gas operations in West Africa and the Middle East into new joint ventures to help reduce debt and fund its shift to low-carbon energy, according to company and industry sources.
The move is part of a major overhaul the company launched last year as it transitions into renewables and a gradual tapering of oil and gas output.
Eni aims to replicate the success of its 2019 oil and gas spin-off in Norway, where it formed joint venture Var Energi with private equity firm HitecVision and retains a 69.6% stake.
Creating a separate entity will allow Eni to shift some of its debt, which rose last year to 26.7 billion euros ($32.2 billion), off its balance sheet given it will no longer be consolidated at group level, the sources said.
With lower debt, Eni hopes to raise new capital to build its renewables and low-carbon business which will form the backbone of the future company.
Eni has recently held talks with several large oil and gas producers including BP and Total to merge parts of their operations in West Africa and the Middle East, sources told Reuters.
Eni, BP and Total all declined to comment.
[Ron Bousso, Stephen Jewkes, Dmitry Zhdannikov]