Italy oil and gas major Eni is set to cut costs massively and sell assets worth billions, as part of its restructuring strategy to reduce the impact from falling crude oil prices.

The state-owned oil major plans to raise $8bn over the next four years, mainly by diluting its stake in recently discovered oil and gas fields.

It aims to reduce costs by €6bn during the same period, mainly through renegotiating on contracts.

The new business plan announced by the company for the period 2016-19 also targets to shrink its capital spending by 21% and cut investments on exploration by 18%.

Eni CEO Claudio Descalzi said: "Our industry is facing a very complex challenge: reducing costs to fulfill short term constraints while enhancing long term value.

"Thanks to our successful strategy of restructuring and transforming Eni into an integrated oil and gas company, we are well positioned to meet this challenge through a competitive cost structure, an efficient operating model and a flexible asset portfolio. We have started a new cycle of profitable growth and have the potential to extract more value in the future."

Most of the oil companies across the world have under pressure to raise revenue over the past several quarters, as a slump in crude oil prices due to oversupply has hit them hard.

"We will continue to deliver strong cash generation through sustainable growth in the upstream, the completion of restructuring across the Group’s other businesses, cost efficiency and flexible portfolio management," Descalzi said.

Eni, Europe’s fourth biggest oil company by market capitalization, expects new discoveries of 1.6bn barrels of oil by 2019.

The company has been able to reduce the average breakeven price of new projects sharply from $45 a barrel to $27 a barrel. It plans to achieve a cumulative production growth of 13% over the next four years.