Eni's Daring Quest (E)

Eni's Daring Quest

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Production from oil sands has been synonymous with Canada, and to some extent, Venezuela. However, Italian oil giant Eni (NYSE: E ) seems to have other ideas. The company has set its sights on Congo's tar sands, where it expects to have a pilot run in place next year. These oil sands are estimated to hold up to 2.5 billion barrels of recoverable oil, an intriguing prospect.

Unchartered territory
While the figure isn't exactly eye-popping, it's significant. Though it's a bit too early to be bullish about the actual growth prospects, what intrigues me is that Eni, along with French major Total (NYSE: TOT ) , are the only major companies operating in this region. But right now, as far as production from oil sands is concerned, it looks like Eni -- with a $3 billion investment -- is first off the blocks.

When Suncor Energy (NYSE: SU ) started developing Canada's oil sands in 1967, it was considered a "daring" investment. It was only after a few years that the results became visible. At the moment, Eni's investment looks just as daring.

Not exactly the easiest investment
Investing in the sub-Saharan countries requires putting a lot of things into perspective. A stable government, for example, is not something that can be taken for granted. Building relationships with governments and the local population takes years – a task that Eni is seemingly good at. Assisting the local community through projects in agriculture, health, and education is where things can turn unpredictable. Eni cannot afford to lose sight of the local people.

The company already accounts for 60% of power generation in the Congo. While absolute numbers are unclear, what is clear is that Eni is serious about its investment here.

Foolish bottom line
Eni currently has the largest presence in Africa. From that perspective, it's not really surprising that the company has chosen to invest in the Congo. Still, I wouldn't want to bet on a smooth ride going forward. Unexpected hitches can't really be ruled out. For now, I'll keep my fingers crossed.

We at The Motley Fool will help you stay up to speed on the top news and analysis on Eni. You can start by adding the company to your Watchlist.

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Fool contributor Isac Simon does not own shares of any of the companies mentioned in this article. Motley Fool newsletter services have recommended buying shares of Total. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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