Italian energy giant Eni has started exclusive talks to acquire Neptune Energy, a private-equity backed gas and oil producer, reported Reuters, citing industry sources.

The two companies commenced discussions following months of negotiations that started in 2022, but talks failed due to disagreements over price.

Eni has now agreed to slightly increase its takeover offer price for Neptune, which ranges between $5bn and $6bn, according to the sources.

The sources noted that the latest move indicates that negotiations have significantly progressed, but there is no certainty that an agreement would be reached.

In the first quarter of 2023, Neptune reported production of around 142,000 barrels of oil equivalent per day (boepd) of which three-quarters is gas.

Neptune has operations in Norway, the UK, Indonesia, Algeria, the Netherlands and other countries, and is backed by China Investment Corporation, and funds advised by Carlyle Group and CVC Capital Partners.

In March 2023, Bloomberg News reported that Neptune’s owners were working with advisers including Goldman Sachs Group and Rothschild & Co. to gauge options for the company, including a potential sale.

Earlier this year, Neptune and its partners, Vår Energi, Sval Energi and DNO, started production from the Fenja oil and gas field offshore Norway.

Located 120km north of Kristiansund at a water depth of 325m, the Fenja field is expected to have a production capacity of 35,000boepd gross.