Eni Strengthens Offshore Gas Portfolio With Neptune's Assets

Italian oil major Eni and its majority-owned subsidiary Var Energi have bought out almost all of the assets of Neptune Energy Group. The sale was completed Wednesday, seven months after the transaction was first announced. 

The deal hands Eni a global portfolio centered on natural gas production, including stakes in active wells in the UK, the Netherlands and Indonesia. The latter stake - the Geng North-1 discovery - is an Eni-operated project, and the acquisition will give Eni a share of about 90 percent of the development in Indonesia's Kutei Basin.

Neptune also has a share in the proposed Petrel project off Australia, which could potentially tie back to Eni's infrastructure at the nearby Blacktip field. Tiebacks are less expensive to develop because they leverage existing production platforms. 

Var Energi (63 percent owned by Eni) completed the acquisition of the $5 billion Norwegian part of Neptune's business shortly before Eni closed its half of the deal. Neptune held stakes in multiple Norwegian offshore gas fields, including Fram, Snøhvit, Njord, Gudrun, Fenja, Duva and Gjøa.

Neptune's German portfolio was carved out and will remain in the hands of the original shareholders. 

In a statement, Eni emphasized that Neptune's portfolio has low carbon intensity (per unit of hydrocarbon product) and is geographically aligned with its existing footprint. Neptune's focus on gas is a plus: Eni’s energy transition strategy is to shift its portfolio towards gas and LNG, achieving a 60% natural gas-weighted business by 2030.