* Aims to sell 5 bln euros of assets in next two years
* Part of goal to sell assets of 7 bln euros by 2019
* Mozambique could benefit from partner with strong skillset
* Expects payment delays in Venezuela
* Q1 operating profits beat expectations (Recasts lead, adds Venezuela, CFO comments)
By Stephen Jewkes
MILAN, April 29 (Reuters) - Italy's Eni is well ontrack to sell assets worth 5 billion euros in the next two yearsas the oil major looks for resources to fund high-profileprojects in Egypt and Mozambique and offset the impact of loweroil prices.
The state-controlled company, which has one of the bestsuccess rates in the industry in finding new reserves at one ofthe lowest cost bases, has tabled disposals of 7 billion euros ($8.01 bln) to 2019.
"That will be front-loaded with 5 billion euros in the firsttwo years," Eni CFO Massimo Mondazzi told analysts on Friday.
With CEO Claudio Descalzi at the helm, Eni has beendownsizing businesses like refining and chemicals to focus onthe bread-and-butter job of finding oil and gas.
Some analysts are worried the strategy could leave it morevulnerable to a downturn.
BP, Statoil and Total beatanalysts' expectations for quarterly results this week,reflecting in part resilient refining and petrochemicaloperations.
Eni, the biggest foreign oil producer in Africa, has said itis ready to sell down stakes in fields it operates, such as themassive Area 4 gas field in Mozambique and the giant Zohr fieldin Egypt, to bankroll development.
The group could benefit from a partner in Mozambique thathas the right skillset to help it develop the project, Mondazzisaid on a conference call on first-quarter results.
"This contract is so big I guess we could take advantagefrom a strong additional partner, not only stronger from afinancial point of view but also (with) a capability to run sucha complicated project," he said.
Eni has been in talks to sell down its 50 percent stake inArea 4, which holds 85 trillion cubic feet of gas that will feeda series of onshore LNG export plants, mainly supplying Asia.
Reuters reported in March that ExxonMobil was intalks to buy a stake of varying potential sizes in Eni's Area 4development, including a full operating stake.
"Talks on disposals are under way and some are very welladvanced," Mondazzi said.
Eni's strategy of selling down oil and gas acreage, itslarge reserves and ongoing restructuring all helped support a"Buy" rating, Santander oil analyst Jason Kenney said.
"These should differentiate it from peers no matter whereoil prices settle in coming months/years," he said.
VENEZUELA DELAYS
Mondazzi expressed concern, though, about developments inVenezuela where state oil company PDVSA, the exclusive operatorof the country's oilfields, owes energy companies billions ofdollars in unpaid bills due to cash-flow problems.
"The situation in the country is critical. So far we've beenpaid but we envisage some delays in payment," he said, addingthe amounts would not be huge.
The group was testing certain financial securitization toolsto help secure payments, he said.
A slew of major U.S. corporations have taken sizeablewritedowns on their Venezuela operations due primarily to asteadily weakening currency.
Eni produces 60,000 boed in Venezuela, mainly from its giantgas field Perla.
In the first quarter Eni beat operating profit expectationsdespite swinging to a net loss because of weak oil prices and acharge on its Saipem holding.
Adjusted operating profit fell 95 percent to 73 millioneuros but was above an analyst consensus of 22 million euros.
"This is a good set of results, especially in the light ofthe unfavourable conditions in the E&P (exploration andproduction) sector," broker ICBPI said in a note. ($1 = 0.8738 euros)($1 = 0.8734 euros) (Reporting by Stephen Jewkes; Editing by David Goodman andSusan Fenton)
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