Agip is still completing a period of transition, accommodating the 2000 acquisitions of Lasmo and British Borneo, which added considerable North African and North Sea production and exploration acreage to the company portfolio. The company says that Lasmo operations have now been consolidated into those of Agip, and have produced significant synergies, helping the company to achieve in the 1999-2001 period 40 per cent of the Eur 1,200 million savings target set for 2005.

With production activities across the Middle East and North Africa, Agip, like most oil companies, is sensitive to the destabilising effects of the political tension now gripping the region. But while the company accepts that after 11 September, the region has been highly volatile, it says that none of the projects contributing to its target production figures have been affected.

'The only delay we have experienced was from the unavailability of a small contractor in Pakistan,' says a senior Eni official. 'None of our core projects was affected.'

If the company is to achieve its target and produce more from its current acreage, it will have to increase its Middle Eastern presence, although it firmly rejects suggestions it will ignore other markets - the company is also aiming to increase production in Mexico and West Africa. But a brief glance at the regional breakdown of Agip production in 2001 shows where the existing resources are strongest. North African production accounted for 23 per cent of the total, with an average of 317,000 boe/d, and is expected to rise to 29 per cent of total production by 2005. This is mainly to come from developments in Libya and Algeria.

The ROD project in Algeria is expected to come on stream in 2003, and will add 40,000 boe/d to total production, with an Agip share of 71 per cent. A greater move forward will be the west Libya gas project, in which the company has a 50 per cent share, and which is expected to come on stream in 2004 with peak production of 238,000 boe/d. Combined capital expenditure on the two projects amounts to Eur 6,102 million.

With so aggressive a development plan, the company says it needs plenty of investment opportunities to succeed. The Greenstream gas pipeline, running from Libya to Sicily, is a major focus of the company's attention. Coming on stream in 2005, it will involve the transportation of 8,000 million cubic metres a year of gas from the Libyan NC-41 offshore field and the Wafa gas development in the west of the country.

Egypt, another traditional base of Agip, is providing new opportunities too. 'We are very engaged in Egypt,' says the official. 'We were the first to discover gas, and the first to develop it in this country. We're the biggest energy producer in Egypt with 430,000 boe/d, of which most is gas.' The bulk of production comes from the Gulf of Suez, but more reserves are being tapped in the Mediterranean basin.

While the bulk of its new production will be based on the company's acreage in its traditional stronghold of North Africa, there are also new opportunities emerging in Iran. Agip has signed a buy-back agreement with the National Iranian Oil Company for a 60 per cent share in the Darquain and South Pars fields, a 45 per cent stake in the Dorood field, and a 38 per cent share in the offshore Balal field.

Agip describes the Iranian developments as one of its core areas of concentration, and says that it will not be affected by the sanctions. 'There were rumours that the buy-back agreements would be affected,' says the official. 'But we see no indication of delays. By 2005, production from Iran will be close to 100,000 boe/d, with the majority coming from South Pars.'

As the Iranian experience highlights, crude is not the only Agip area of development. For all the work Agip is doing to boost its crude production, there is a tilt towards natural gas supply. With 20,180 million cubic metres delivered in 2001, Algeria is already Italy's largest gas supplier, and Greenstream will make Libya a key supplier too. Another area for potential development in the longer term is to be found in the Gulf, where the company says it has prequalified to participate in the upstream openings of Project Kuwait. However, that programme will come too late to help meet the 2005 targets.