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Italian energy major Eni is weighing a return to oil and gas trading, seeking the outsized returns enjoyed by rivals BP, Shell and TotalEnergies as geopolitical tensions fuel energy price volatility.
“I stopped trading in 2019 but the other big companies are all traders,” said chief executive Claudio Descalzi. “BP, Shell, Total are big traders and they make billions from that.”
Descalzi told the FT he had held preliminary talks with several commodity trading houses, including Mercuria, about forming a joint venture.
“It is not in our DNA. We are not very commercial,” he said. “So I thought to become commercial, we have to have a partnership to understand the business.”
Mercuria declined to comment.
Energy trading, particularly trading in derivatives such as futures and options, has become increasingly competitive. But Descalzi said Eni’s physical production of oil and gas would make it an attractive partner.
“If we can offer physical hedging, that is a big advantage for them. We can complement each other,” he said.
One senior trader confirmed that Eni had sounded out multiple firms in the sector, adding that most trading houses would be interested in a joint venture combining their commercial and shipping expertise with the Italian group’s oil and gas flows.
But structuring such a scheme would be complicated, particularly in ensuring transparency, trust and performance metrics. Descalzi described the proposal as a “difficult exercise”, stressing that Eni would only proceed if the right conditions were in place.
He added that the trading unit would operate independently of Eni. “Another reason is traders have a nice salary,” he said. “A good trader takes three or four times what I earn every year, and maybe more.”
The Eni chief executive also signalled that he was considering fresh dealmaking to expand the company. “We need to step up in terms of dimension,” he said.
In its last two deals, Eni merged its UK assets with Ithaca in exchange for equity in the enlarged company and separately brought Neptune Energy’s Norwegian assets into its subsidiary Vår Energi.
BP last week said its trading business “remains a distinctive competitive advantage, delivering an average of around 4 per cent uplift to BP’s returns”, while Shell said at its results that trading’s boost to its returns was towards the lower end of a 2-4 per cent range.