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Will Big Oil Float Into the Future?

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A Pause in the Transition

The biggest question in the European oil industry is no longer what companies will do in the energy transition, but rather what they will look like. Differences in strategy remain, but the European majors have generally aligned on a business model that pairs large traditional oil and gas operations with investments in new energy businesses like renewable power, hydrogen and retail operations. The former provides cash flows now and the latter the promise of growth in the future. But whether those businesses stay under one roof or split off into publicly listed offshoots is a wholly unsettled question. Eni's strategic approach will be a key litmus test to understand what investors want from an energy company. The Italian giant’s plan to list 30% of its Plenitude unit, which houses its renewable power, e-mobility and retail natural gas activities, has been the focus of attention. But it is also eyeing a public listing for its Var Energi joint venture (JV) offshore Norway, while creating a JV with BP offshore Angola that could be positioned for a similar future. “These focused companies will attract new capital, unlock value and accelerate growth,” CEO Claudio Descalzi told analysts when unveiling Plenitude.

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