French energy group Engie has announced a 3-year strategic transformation plan, focusing on low CO2 activities, on integrated customer solutions and on activities not exposed to commodity prices.
The 3-year transformation plan has four objectives: to redesign Engie's portfolio of activities, by leveraging on its historical positions and strong financial structure, to improve the Group’s efficiency notably by investing in innovation and new technologies, and to adapt the Group to make it agile, based on a simplified organization, closer to territories.
The group, which posted a 6.4% drop in revenues (8.8% drop organic drop) in 2015, will carry out three programmes over the 2016-2018 period: a €22bn CAPEX programme (including €7bn for maintenance), a €15bn portfolio rotation program (nearly 1/3 already signed) and a €1bn net OPEX savings programme with "Lean 2018".
In addition, Engie has announced the acquisition of OpTerra to strengthen its offer in energy services, and the sale of 13 GW of power generation capacity, including 10 GW of merchant power generation capacity located in the United States and two coal-fired power plants (3 GW) located in India and Indonesia. The impact of these disposals will be a net debt reduction of €5.5bn. The group will sell 8 GW of gas-fired and 0.7 GW of coal-fired capacity to a joint venture of Dynegy and ECP for US$3.3bn, while 1.2 GW of pumped-storage hydropower assets will be sold to First Light and 0.2 GW of conventional hydropower assets will be sold to PSP Investments. In Indonesia, the group will sell its 40.5% stake in the 2 GW Paiton coal-fired power plant to Nebras Power; its entire stake in the 300 MW coal-fired power plant in Meenakshi (India) will be sold to India Power Corporation Limited (IPCL).
At year-end 2015, Engie had stakes in 117 GW of installed power capacity worldwide, including 21.5 GW of renewable capacity (mainly hydropower) plus 8.1 GW under construction. The group generated a total of 491 TWh in 2015, including 18% from renewable energies and 57% from gas. The group also sold 1,132 TWh of gas, including 63 TWh from its E&P production. More than half of its gas sales were non regulated (634 TWh) and France accounted for 19% of its total gas sales. Engie had 699 mboe of 2P oil and gas reserves at year-end 2015 (168 Mboe of liquid hydrocarbons and 531 mboe of gas). Its production reached 59 mboe in 2015 (37 mboe of gas and 22 mboe of liquids).