Eni intends to create separate entity to tackle debt. Credit: Charlie Hang on Unsplash.

Eni is reportedly looking to spin off its oil and gas assets in West Africa and the Middle East into new joint ventures.

The move is part of the Italian company’s plan to cut debt and fund its plan to transition towards low-carbon energy, Reuters reported, citing the company and industry sources.

Eni intends to replicate its 2019 decision to spin off oil and gas assets in Norway. It formed a joint venture, Var Energi, which it retains a 69.6% stake.

In 2019, Var Energi acquired ExxonMobil’s Norwegian upstream assets comprising more than 20 producing fields for $4.5bn.

The move resulted in the creation of what it claimed to be Norway’s second largest oil and gas producer.

The news agency cited an undisclosed source as saying: “The company is working on doing more of the same (as Var) with chosen partners in West Africa and the Near-Far East and Far East.”

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Eni expects the creation of separate entity to move some of its debt off its balance sheet. The firm’s debt increased to $32.2bn (€26.7bn) in 2020.

The move would allow Eni to raise new capital required to develop renewables and low-carbon projects.

Sources told Reuters that the Italian firm recently negotiated with oil and gas producers, including BP and Total, over the possibility of merging parts of their assets in West Africa and the Middle East. The outcome of the talks remains unclear.

In February 2021, Eni chief financial officer Francesco Gattei was cited by the news agency as saying that the firm sees opportunities in business combinations, such as Var Energi, to reduce debt.

Gattei added: “We aim to replicate our Norwegian Var model in different countries, with potential business combinations which are currently under screening.”