Eni has suspended its reported Nkr60 billion ($10 billion) arbitration case against Statoil over high gas prices after the pair reached a preliminary pact to revise a long-term supply deal.
energy giant said it had reached a heads of agreement with Statoil for
revisions to the contract including price and volume, with the pending
compensation claim put on ice for 30 days so that a detailed deal can be
Eni said it
was part of efforts to renegotiate all of its third-party gas supply contracts
as the company – one of Europe’s biggest gas importers – has seen higher
contracted gas prices while market prices on the continent have fallen due to
cheap supplies sourced from US shale as well as a demand slump amid economic
has previously renegotiated prices on supply deals with Russia’s Gazprom and
Sonatrach of Algeria, Statoil has refused to budge on its long-term supply
contract with the Italian customer that has been linked to the oil price, despite
reportedly offering price concessions to other buyers.
Eni, led by chief executive Paolo Scaroni, has therefore
demanded compensation from the Norwegian supplier for charging prices above prevailing
market levels since the deal was signed back in 1998.
has previously said the price it pays for Statoil’s gas is 30% to 40% above
European market levels.
agreement between the pair would result in lower gas prices for Eni that would
also benefit European consumers.
has estimated other revised supply deals have saved it nearly Nkr16 billion,
though it now reportedly also faces having to renegotiate its pact with Gazprom
that expired at the start of the year.