Thursday, May 29, 2008
Lettera alla SEC
Mi dite i vostri commenti? La legge del 4 marzo ha un nome?? La foto sopra e' la spiaggia di Ortona, me l'ha mandata Fabrizia qualche tempo fa che saluto e ringrazio affettuosamente.
Dear SEC representative,
my name is Maria D'Orsogna and I am a math professor at the California State University at Northridge, in Los Angeles. I have been studying for quite some time all reports and disclosures filed to the SEC on behalf of ENI SPA (NYSE:E), Italy's largest oil company.
I would like to make you aware of what I perceive as being inconsistencies and lack of transparency on ENI's part. In particular, the company secretary Fabrizio Cosco filed an 6-K form on behalf of ENI Spa on May 31 2007 stating that
"The main project underway concerns the development of the oil and gas onshore Miglianico field (Eni’s interest 100%). The project provides for the linkage of 3 wells, the construction of a treatment facility for oil, which will be supplied to Eni’s Refining & Marketing logistic facilities, while the gas will be input to the national transport network through a pipeline. Production start-up is scheduled for the second half of 2008 with an expected production peak of 7.2 kboe/d to be reached in 2009". (page 15)
"The main oil reserves development project is Miglianico, located onshore in the Abruzzi Region. Production is expected to start in the second half of 2008. This project provides for the construction of facilities intended to treat production volumes of oil, to be delivered to logistic structures of the Refining & Marketing Division, and to desulfurize production volumes of gas to be input into the Italian natural gas transportation network." (page 28)
This document is public and available here. In the updated version of the same 6-K report filed on March 31 2008, signed by the same corporate secretary Fabrizio Cosco, and available here the company states:
"...development of the oil and natural gas reserves at the Miglianico field located in the onshore of the Abruzzi Region. Three development wells has been drilled. The projects provides for the construction of facilities to treat production volumes of oil, to be delivered to logistic structures of the Refining & Marketing division. The production volumes of gas shall be input into Italian natural gas transportation network. Production is expected to start in the second half of 2009 peaking at 7 kboe/d". (page 30)
This statement is at best misleading. ENI in fact does not disclose that the production start date has been shifted from 2008 to 2009 due to a regional law that was passed in Abruzzo to prohibit all operations related to the drilling, desulfurization, and development of treatment facilities of gas and oil. The law was passed on March 4th 2008 and is specifically targeted to the Miglianico oil field. The moratorium will be in place until December 31st 2008, but a very high possibility exists that it may be turned into a permanent veto on all petroleum operations in Abruzzo. It is therefore highly unrealistic that the company will be operative in the second half of 2009.
I believe American investors should be made aware of these events and that the company has a responsibility to its shareholders to be candid and realistic, especially in light of the fact that the Miglianico field was called not too long ago ENI's "main oil reserves development project".
Furthermore, there is currently a huge popular negative sentiment against ENI in Abruzzo. The company's preliminary reports underestimated pollutant concentrations in the atmosphere as verfied by independent scientific institutions, and most mayors in the area are against its operations. The national Italian media has repeatedly reported on this story.
If you have any questions or would like further documentation, I would more than happy to provide you with the appropriate references.
Maria R D'Orsogna