Italian energy giant
) and Russia's state-controlled Gazprom have agreed to lower
Russian gas supply prices for 2013.
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Both the companies have also slated year-end 2013 for the
completion of renegotiations on the prices and amount of the
Russian gas supplies for 2014 and beyond. Gazprom supplies
contribute around 25% of Europe's gas. The financial detail of
the pact with Gazprom has not been disclosed by Eni.
Eni along with other European buyers have been insisting Gazprom
for discounts. Gazprom's average gas price touched a record in
2008 but a downturn curtailed demand for fuel and made gas
available at reduced market prices.
Under multi-year contracts, connected to crude and oil-product
prices, Gazprom sells the fuel with a time lag of six to nine
The parties also talked about advancing on the South Stream
project and confirmed that the pipeline construction is targeted
to commence by the second quarter of 2014, while the first gas is
expected in 2015.
Eni's presence in Russia dates back to the early fifties. The
company entered the upstream segment of the country in 2007.
Currently, it produces 15,000 barrels of oil equivalent per day
from the Samburskoye field in Western Siberia.
Eni's outlook for the upcoming months is favorable, given its
2013-2016 strategic plans to enhance production and implement
steps to control costs and recover profitability. The company
remains upbeat on its production growth target of more than 4%
annually in the said period and 3% annually until 2022.
Eni carries a Zacks Rank #3 (Hold). However, there are other
Zacks Ranked #1 (Strong Buy) stocks -
Hornbech Offshore Services, Inc.
Newpark Resources Inc.
Gulfmark Offshore, Inc.
) - that are expected to perform impressively over the short