The Financial Times spoke to Claudio Descalzi, Eni CEO, twice in the past two months. One was a brief telephone conversation after his visit to Libya and the other was a lengthy interview on May 20 at the company’s large refinery in Sannazzaro de’ Burgondi, in the province of Pavia, northern Italy. Here is an edited transcript.

Mr Descalzi, you’ve made a big bet on upstream. How are you feeling about that strategy at the moment? 

  It’s clear that the choice was right. We are very comfortable because in the last couple of years we have been so successful in exploration, in production, in discovering and developing new fields. And when you are able to find reserves and in a few months you are able to put them in production, and increase your production, you immediately see the positive impacts of your choices. 

Do you think that these are the most difficult times that Eni has lived through, at least since it went public in 1992? 

  I think that is a difficult time for the industry. That is clear. And Eni is in the industry, so it is difficult for Eni like it is for other companies. But I think that we were able to rationalise our company our company very quickly. So it is difficult, but I think that we have been able to give the best of ourselves. 

 You’ve cut costs and you’ve sold assets. Does there come a point where you’re cutting too close to the bone and you’ve cut so much in these areas that the only next step to cover your cash flow would be to cut the dividend further, especially if conditions persist as they are?

We already cut the dividend, and as we said to our investors, the dividend now is floor, so that means that we don’t want to reduce any more. That is one of our priorities. . But I think that when we say we cut costs, we created a more efficient system. And the big issue now in the industry is really to be efficient. 

One criticism of Eni is that they are some of the best explorers in the world, but struggle to deliver a return on capital to match that. How do you respond?

I think that is a perception that came from the big, complex projects like Kashagan that create a view that I think is an old view. 

Do you worry that you’re overweight in gas at the moment? Gas is the fossil fuel of the future, however there seems to be an oversupply of gas, and your big discoveries are all gas. Is that something that concerns you a bit?

 In the medium term gas will really be essential to our growth. We have to consider that after the COP21[climate change agreement] all the different countries are relying much more on gas, and gas absolutely is the only fuel that can accompany renewables. Because it’s more efficient and the less polluted fossil fuel.

Where are you on the disposal strategy? Particularly in terms of selling off parts of your big discoveries. Mozambique, for instance. Do you think you can still find a buyer at this point? Or has the slump in the gas price made it much more difficult? 

I’m positive. It’s quite difficult to sell producing assets today, because you rely on the price of today and in the short and medium term of the next four years. But our assets are good assets. Very low cost conventional assets, also with a very low development cost and operating cost. In Mozambique I hope to be able to close by the end of this year. In the next couple of years our target is to reduce our participation, our share in Mozambique, and also in Egypt, in Zohr. Because in Zohr we own 100%. It’s a big development. And there is room also to accommodate some other partners. 

 Will Mozambique be harder to sell than Zohr ? 

 It depends. We’ve already sold it at 20% in a different period. I think that Mozambique is more a strategic acquisition for a possible buyer, because it’s a huge quantity of gas. It’s for the long term. It’s well positioned with respect to the best growing market in the future that is the Pacific area.

 What’s the timing on Zohr and how much do you want to sell of Zohr?

 It is something that we could have by 2017. 

Have you already received expressions of interest? 

Informally, yes. I think that there are a lot of entities interested. 

Eni is disproportionately present in countries with high geopolitical risk. Should it diversify out of those countries to balance itself out. Or is that your competitive advantage and you should just keep doing what you’re doing? 

 I land in the middle. I think that in the last four or five years we’ve started strong diversification toward the East. So toward East, Far East, and countries like Vietnam we increase our working interest, our exploration in Indonesia, Myanmar. 

We are in Alaska, Gulf of Mexico. We are in Venezuela. We are in Ecuador, we are in Mexico now. We are in UK, we are in Norway. We are in Kazakhstan, we are in China. So I think that Eni is present in more than 44 countries. So we have a diversified presence. There are a lot of countries with geopolitical risk, and I think that you must have skills, rules, process, security processes to be able to cope with [that]. And I think that is a plus for Eni, because we grew up in difficult situations, and I think that we show to everybody that we are able to cope and work also in situations that are not very easy. Maybe that is not true for all the companies, so that is a competitive advantage that we have. 

Obviously your big exploration success recently has been the Zohr project. Can you tell us some of the details of the contracts that you were able to sign with the Egyptian government in terms of what was the agreement on price, what was the agreement on other aspects?

I cannot disclose all the details of the commercial agreement. I can say that it is a PSC, so it’s a Production Sharing Contract. We have a floor, we have a ceiling. So we are sure that we don’t have super upside but we don’t have downside. 

 Did the case of Giulio Regeni, the Italian student murdered in Cairo, affect the development of Zohr in any kind of way? Did it affect relations with the Egyptians?

 The case of Regeni is unfortunate. The terrible case of Regeni clearly put us in an uncomfortable position, not just because he is Italian, but he is a human being. We wrote to Amnesty International and we talked with our Egyptian counterpart, and clearly that we are absolutely against this kind of stuff and we want clarity and transparency. I think Egypt is trying to do what is good in this difficult moment. It is not impacting our operations, because we are working offshore, we are still in exploration phase. We are drilling our wells. But it is clear that we are not happy about the situation. 

 When you look at Libya, how do you see the situation at the moment?

I think that also from an operational point of view I saw that the country is trying to make a big effort to stay together. From a political point of view, a very important step has been taken and now again discussion is continuing. Some different points of view, but I think that Libyans are working very well to try to find a solution. It’s important that also outside Libya everybody will work and co-operate proactively, in a positive way, to help them to find a solution. 

How worried are you about Isis ? 

They are in Sirte so they are far from our facilities, and especially from the offshore facilities, which are 120 or 200 kilometres from the shore. And most of the gas is coming from the offshore. More than 65% of the gas. And so we hope really that the situation remains like that. I feel that is improving. I feel that Libyans want really to create again a big, strong country, united country. 

 Turning back to Italy, some say that the Renzi government has been as close to Eni as any other government in history, or even more so than in the past. But the Five Star Movement could take over the government here, and we know that they have a staunch environmentalist platform. Is that something that concerns you? That there could be a possible change of government here that doesn’t go in your direction? 

No, I don’t have any concern, because I work in Eni and for Eni, and so I really do what I have to do for my company. It’s clear that if Eni can achieve good results, it’s positive for the country, and not just from a financial economic point of view, but also from a reputational point of view.I am not working for the government. I am working for my company. I’m not involved in politics, and I think that 

I have to answer to my shareholders. Not to politicians.  

There  are two things that you hear about the relationship between Eni and the government. Sometimes people say Eni is an extension of the Italian government operating overseas, and sometimes you hear that Eni dictates Italian foreign policy. Is it the first or is it the second? 

I think that both things are wrong and fake. We are not an extension of the Italian government, and absolutely we don’t dictate anything to anybody. We try just to do our work. I think that we have normal exchanges with the government, like we have with other shareholders. Clearly we don’t aim at all to make any kind of foreign policy, because we make exploration and find reserves. Sometimes we find big reserves that are important for the hosting countries. And they became important sometimes for Europe and Italy as a source of diversification in terms of resources. And they create interest. But the aim is not to make any kind of policy. 

Do you think Eni could become a takeover target in the next few years? Or could participate in some kind of big strategic deal like the ones that were contemplated? 

I don’t think so. We have a low debt, we have a wonderful position. High production. A lot of exploration. . In any case, that is more a question for the shareholders than for the company. 

 Have you had any discussions about a possible merger? Have you been approached by, say, Total? 

Never in my life. I am so focused on what we are doing in this transformation, this business, that we don’t have time to talk about other things that can reduce our focus on the operations. 

Do you think that a big, strategic tie up would be too much of a taboo for Eni? 

We have a very strong culture. We are a very strong culture that has been built from starting from our founder, from Enrico Mattei. We are international, because we have most of our activity outside Italy, but we are really Italian. That is a culture of people who started from nothing. We were the last to go to Africa and we became the first in Africa. And we are very proud of our culture, we are very proud of the achievements we’ve got, and that is our strength. So we are quite inaccessible. 

What’s your outlook at the moment on oil prices?

It’s between $45 and $55 per barrel. At least for the next year. For 2016 and 2017. I don’t know if we can get a big jump. I think after 2018 when the big hole that we created with the lack of investment, maybe can create some jump, but I think that now the floor. I said in Davos two years ago that we need an agreement between OPEC and non-OPEC. And I believe that that is the only possible solution. So I think that . . . I hope that in the future they can find an agreement… 

What are the chances of that? 

I hope that they can . . .  In English you say: Try and try and try again, if you don’t succeed. So I hope that they can try again. Because that is a reasonable solution. You cannot live in a world where you don’t know exactly what will be the price in two or three or four years.