Italians make a meal of Enterprise

ITALY'S ENI kept the bid heat on Enterprise Oil with strong hints that it would come back with another offer. Reports from Milan said ENI chief executive Vittorio Mincato had got 'carte blanche' from his board to bid, though it had set a maximum on the price he could pay.

ENI's first approach is thought to have been at £6. Mincato said his acquisitions would be in cash and he was aware of rumours about 'a target that had all the characteristics to become integrated with us'.

Meanwhile, BP warned that oil and gas markets were gloomy in the last quarter of 2001. It pumped out 5.5% more oil, but that did not help much as prices fell and chemicals slumped. Average oil prices dipped to $19.41 a barrel from $29.56 a year earlier.

Brokers think BP's fourth-quarter profits could fall towards $2bn, taking the year's surplus down to $13bn (£9bn) - not exactly below the poverty line. US gas prices tumbled 54% in a year. Profit margins on refining slumped from $4.46 to $2.40 a barrel. Demand for aviation fuel fell 15%.

Petrol marketing margins 'are expected to be down 10% to 15%' from the third quarter, though still better than a year ago. BP chief executive Lord Browne said market conditions are now 'below mid-cycle'.

The good news is that crude is back up to $21 a barrel, and BP's output reached a record 3.5m barrels a day. Jon Wright, at HSBC, rates the shares an 'add'.