Italy’s Eni to create a separate division for renewable energy

Written by: Wajeeh Khan
June 4, 2020
  • Italy’s Eni to create a separate division for renewable energy as part of corporate reorganisation.
  • The new division called Energy Evolution will be led by Eni's current CFO Massimo Mondazzi.
  • Eni’s current upstream boss, Alessandro Puliti, will be leading its natural resources segment.

In an announcement on Thursday, Eni (BIT: ENI) said that it has decided in favour of establishing a separate division that will focus entirely on renewable energy. The Italian oil major has been committed to corporate reorganisation in recent months.

Shares of the company climbed more than 1% on Thursday in the afternoon session but lost all intraday gains before the market close. At £8.06 per share, Eni is roughly 35% down year to date in the stock market after recovering from a low of £5.84 per share in March. Learn more about how do people make money on the stock market.

Italy envisions decarbonised future

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The news first started circulating the media on Wednesday that Eni might be planning such an overhaul. On Thursday, the oil company commented that its move is ascribed to industry-wide changes as COVID-19 weighed on the financial performance of oil and gas firms and disrupted the global oil market at large in 2020.

Eni’s plan is in line with the role that Italy aims to play in countering climate change. The Italian government is recommending domestic businesses to switch to renewable energy and phase out the use of fossil fuels as a power source in a bid to get closer to the vision of decarbonised future. Eni’s CEO Claudio Descalzi commented on the news on Thursday and stated:

“This new structure reflects Eni’s pivot to the energy transition. An irreversible path that will make us leaders in decarbonised energy products.”

The CEO also pledged earlier in 2020 to minimise Eni’s greenhouse gas emissions by as much as 80% following excessive pressure from investors to switch to renewable energy.

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CFO Massimo Mondazzi to lead Eni’s new division

The new segment that Eni is calling Energy Evolution will see Massimo Mondazzi as boss. Mondazzi is currently serving as the Chief Financial Officer at Eni and is scheduled to keep his current position until 1st August.

After reorganisation, the state-controlled Italian firm’s dedicated natural resources division will incorporate its traditional businesses, including oil and gas operations. This unit will also include carbon-storage projects and forestry conservation. Eni’s current upstream boss, Alessandro Puliti, will be leading its natural resources segment. According to the company, the new structure is expected to be effective in the upcoming weeks.

At the time of writing, Eni is valued at £29.45 billion.