Bit embarrassing

30 January 2013 By Kevin Allison

A shock profit warning from Eni’s 43 pct-owned oil services unit is the latest sign that the Italian oil major wasn’t keeping proper tabs on an important business. Eni doesn’t control Saipem outright, but consolidates its results. It should exercise more than distant oversight.

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Shares of Eni, the Italian oil major, fell more than 5 percent on Jan. 30, wiping out more than 3.6 billion euros of market value. The slide came after Saipem, Eni’s 43 percent-owned oil services subsidiary, issued a surprise profit warning.
Saipem cut its 2012 operating profit outlook by 6 percent and said it expected a 50 percent drop in net profit in 2013. Sapiem’s shares fell more than 34 percent.
Sapiem’s long-time chief executive stepped down in December amid a probe into alleged corruption related to contracts in Algeria.

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