Eni-Venezuela Deal Reported

ROME -

Italian energy company Eni SpA on Friday reached a deal with Venezuela for compensation for the seizure of its Dacion oil field, Italian news agencies reported, quoting Eni's CEO.

"A few minutes ago we closed a deal with the Venezuelan government on the Dacion oil field, for which we obtained compensation at book value," Eni chief executive Paolo Scaroni was quoted as saying at a news conference near Milan. Dacion, worth an estimated $839 million, was seized in April 2006 by the government of Venezuelan President Hugo Chavez.

Scaroni did not cite the book value.

The ANSA and Apcom news agencies also quoted Scaroni as saying that negotiations aimed at Eni's entering into Venezuela's Orinoco Basin have begun. Last year, Exxon Mobil (nyse: XOM - news - people ) walked away from its heavy oil upgrading operations in the Orinoco River basin after Chavez's government changed the terms of the contract.

Exxon Mobil Corp. is challenging Venezuela's state-run oil company over compensation for the nationalization of one of four heavy oil projects in the Orinoco basin, one of the world's richest oil deposits.

Earlier in the day, Eni, which is 30 percent state-controlled, said preliminary fourth-quarter net profit almost doubled due to its key upstream division and because of stronger crude prices and higher volumes sold following its acquisition spree.

The company said that net profit in the last quarter of 2007 climbed to euro3 billion (nearly US$4.5 billion) compared with euro1.52 billion in the same period a year earlier.

Full-year net profit was up by 8.6 percent, to some euro10 billion (US$15 billion) from euro9.22 billion for 2006.

Eni also said that oil and natural gas production was up by 1.1 percent in the fourth quarter of 2007, but down by 1.9 percent over the entire year.

Eni's U.S.-traded shares were up 84 cents, or 1.3 percent, to $66.05 in late trading Friday on the New York Stock Exchange.