Eni's Iraq project needs $10bn investment

Italian oil and gas group Eni SpA sees its Zubair oil project in Iraq requiring investments of about $10 billion, its chief executive said in an interview with the Financial Times published on Wednesday.

A consortium of Eni, South Korea's Kogas and US group Occidental had said on Tuesday won a contract to develop the Zubair field, an award which the FT said is still subject to Iraq cabinet approval.

"Zubair is one of the most important oil fields in the world. It is one of the very few that is capable of producing more than 1 million barrels a day," Scaroni told the FT.

"Because we are going to Iraq it means we will not be doing other things," he said.

The consortium's Zubair project will boost the field's production to 1.125m barrels per day from 200,000 within seven years and would require an investment of about $10bn.

Scaroni also said Eni has no plans to enter the nuclear energy sector.

Last month a government minister said Eni, which is controlled by the Italian state, would be well-placed to enter the nuclear power sector on the back of a nuclear agreement between Italy and the United States.

Scaroni reiterated his rejection of activist investor Knight Vinke's calls for a break-up of Eni's oil and gas businesses to boost the group's value and free resources for investment in areas such as nuclear.

"We think it would destroy value ... The simple fact that we buy gas from Algeria, Libya and Egypt makes us the leaders in upstream (oil) in those three countries, so they represent 40 per cent of our upstream oil," he said.

Scaroni said he thought the current level of oil at around $70 a barrel was "realistic".