By Sarah Kent
LONDON -- Italy's state-back oil giant Eni SpA is raising its dividend, in a fresh sign that the international energy industry is bouncing back from a three-year downturn.
Eni said Friday it plans to raise its dividend by nearly 4% from last year. The company will also consider share buybacks, depending on its cash flow position over the next four years, it said.
The company's announcement follows a flurry of promises from big oil companies to improve shareholders' rewards through a mix of share buybacks, higher dividends and a return to pure cash payouts. Last month, Norway's Statoil ASA also announced plans to increase its dividend. Elsewhere, BP PLC is restarting share buybacks, while Royal Dutch Shell PLC has returned to a full cash dividend policy.
Eni's response to the oil-price crash of 2014 was the most austere among the majors. The company slashed its dividend 29% in 2015, under intense pressure from prices that had fallen below $50 a barrel and eventually slid to less than $28 a barrel.
It was a radical move in an industry where shareholder payouts are taken as sacred.
Other big oil companies went to great lengths to protect their dividend, accepting rising debt levels, suspending share buybacks and offering payouts in shares rather than cash.
Eni's plan to begin raising its dividend policy reflects the fragile confidence creeping back into the industry after years of cost cutting. Oil prices have risen in the past year, briefly breaching $70 a barrel in January before falling back down to about $65 a barrel for Brent crude, the international oil benchmark.
"The dividend increase we announced today is a result of the business and financial improvement achieved so far, as well as our confidence in further growth," Chief Executive Claudio Descalzi told analysts in London.