Vitol strengthens its upstream reach by acquiring West Africa assets from Eni

The global commodity trading house’s presence in the upstream sector will be strengthened as Vitol plans to reinvest the enormous profits it has been making since 2022 by purchasing shares in West African oil and gas assets from Italy’s Eni (ENI.MI), according to a new proposal.

Eni announced in a statement on Wednesday that the commodity trader would purchase a stake in oil and gas-producing properties and blocks that are being explored, evaluated, and developed in Ivory Coast and the Republic of the Congo.

This is Vitol’s most recent purchase. Since the beginning of this year, it has purchased a majority stake in Waste Plastic Upcycling and Asian energy trader Noble Resources. The acquisition of the Italian oil refining and trade company Saras from the Moratti family in Italy was a major event last year.

The transaction takes place as big commodity traders want to invest their spectacular profits from 2022–2023, when they made money off of market disruptions in a variety of commodities brought on by the COVID pandemic, Russia’s war in Ukraine, and Europe’s energy crisis.

The Italian group stated that there will be a monetary adjustment at close, but the acquisition was valued at $1.65 billion according to a January 1, 2024, appraisal. The transaction’s estimated total value was $2.7 billion, according to an Eni representative.

In the arrangement, Eni will hold 77.25% of the Baleine project in Ivory Coast and Vitol will purchase a 30% stake. Additionally, Eni will own 65% of the Congo liquefied natural gas (LNG) project in the Republic of Congo, while Vitol will purchase a 25% stake.

Eni’s “dual exploration model” strategy, which involves spinning off stakes in high-potential oil and gas projects to generate quick revenue from exploratory findings, includes the arrangement.

Eni may sell shares in its upstream projects in Indonesia and Ivory Coast, according to sources at the Italian energy firm who spoke to Reuters last year.

In Ghana, Eni and Vitol already collaborate on the OCTP and Block 4 projects. The two businesses’ collaboration in West Africa is further strengthened by the most recent agreement.

Ivory Coast’s massive Baleine field was discovered in 2021, and the country currently produces more than 60,000 barrels of oil equivalent per day. In addition to being the first net-zero development in Africa, it is Eni’s first in Ivory Coast.

Liquefied gas exports from Congo LNG began in February 2024. Currently, it produces one billion cubic meters (BCM) of LNG annually.