R&M and petrochemicals see full-year losses of €535 million and €276 million, respectively.

Eni, Italy’s national oil company, has reported an adjusted net profit of €6.97 billion (US$9.16 billion) for 2011, up 1.5% YoY. Net profit for 4Q11 is reported at €1.32 billion, up 141% compared with 4Q10. However, both results were depressed by losses in the company’s refining and marketing (R&M) and petrochemicals segments.

“The R&M division and the petrochemical segment both reported wider operating losses driven by the high supply cost of petroleum feedstock which was only partially transferred to product prices pressured by weak demand trends on their respective market outlets,” says Eni in a statement.

R&M and petrochemicals saw adjusted operating profit losses of €271 million and €154 million respectively in 4Q11, and losses of €535 million and €276 million for full-year 2011.

Capital expenditure in R&M and petrochemicals in 2011 amounted to €866 million and €216 million, respectively.

Eni’s management expects retail sales volumes of refined oil products in Italy and the rest of Europe to be slightly lower in 2012 than the 11.37Mt seen in 2011. In the domestic market, Eni expects fuel consumption to continue on a downward trend and notes that “a new wave of liberalisation promises to spur competition.”

Eni foresees a continued depressed trading environment in the European refining business. “Refining margins are anticipated to remain at unprofitable levels due to high costs of oil supplies, sluggish demand and excess capacity,” the company says.

Eni is planning to invest around €1.2 billion over the 2011–2016 period in a joint project with Novamont SpA to convert Eni’s Porto Torres chemical plant into a bioplastics, biolubricants and bioadditives plant; the construction of a biomass power plant; and various environmental restoration and cleanup activities.

Other downstream projects will include the completion of the EST (Eni Slurry Technology) refining project at the Sannazzaro de’ Burgondi refinery, which will enable the refinery to become a zero fuel oil refinery. According to a press release dated May 2011, the project is on schedule for completion at the end of 2012 and will cost over €1.1 billion. Eni will also focus on “strengthening selected petrochemicals plants”.