Italy's largest energy company Eni SpA said Friday that its first-quarter profits rose 42 percent on increased production in Libya and higher prices.
The Rome-based company said net profit for the first three months of 2012 was 3.62 billion euros ($4.78 billion), up from 2.55 billion euros in the same period last year, even though oil and natural gas production was down a modest 0.6 percent at 1.674 million barrels a day. Eni shares nevertheless were trading up 0.1 percent to 16.58 euros on the Milan Stock Exchange.
Eni's Libyan production was cut off during the first quarter of last year due to the armed conflict in the country that endangered oil workers and blocked exports. Production is expected to reach levels achieved before the conflict of 280,000 barrels of oil equivalent a day by the second half of the year. "Eni delivered excellent results thanks to the ongoing recovery of production in Libya and higher oil prices, despite the difficult market environment," Eni CEO Paolo Scaroni said in a statement.
Eni, however, said European refining operations were unprofitable. Eni said that was due to high raw oil prices, overcapacity in European refineries and sluggish fuel demand on higher consumer prices. The company forecasts 2012 to be "challenging" due to the ongoing crisis and volatile market conditions. Scaroni highlighted Eni's deal with the Russian oil giant Rosneft earlier this week to explore the Arctic, saying it "underpins our exploration opportunities for many years to come, further boosting our prospects for long-term growth". Eni is active in Russia, where it has started production at the giant Samburgskoye field in Siberia. Production there is expected to reach 43,000 barrels of oil equivalent a day.