All financial data presented in this report is based on consolidated financial statements prepared in accordance with IFRS.
For definitions of certain financial and operating terms see "Frequently used terms" section, on page 52.

This report contains certain forward-looking statements particularly those regarding capital expenditures, development and management of oil and gas resources, dividends, allocation of future cash flow from operations, future operating performance, gearing, targets of production and sale growth, new markets and the progress and timing of projects. By their nature, forward-looking statements involve risks and uncertainties because they relate to events and depend on circumstances that will or may occur in the future.

As Eni shares, in the form of ADRs, are listed on the New York Stock Exchange (NYSE), an Annual Report on Form 20-F has been filed with the US Securities and Exchange Commission in accordance with the US Securities Exchange Act of 1934.
Hard copies may be obtained free of charge (see the request form on Eni’s web site – eni.com – under the section "Publications"). Eni discloses on its Annual Report on Form 20-F significant ways in which its corporate governance practices differ from those mandated for US companies under NYSE listing standards.
The term "shareholder’" in this report means, unless the context otherwise requires, investors in the equity capital of Eni SpA, both direct and/or indirect.

Eni shares are traded on the Italian Stock Exchange (Mercato Telematico Azionario) and on the New York Stock Exchange (NYSE) under the ticker symbol "E".

Financial performance
In 2010, net profit attributable to Eni’s shareholders was euro 6.32 billion. Adjusted net profit was euro 6.87 billion, an increase of 32% from 2009, reflecting the excellent operating performance of the Exploration & Production Division (up 46% from 2009). The Engineering & Construction Division also reported a robust performance (up 18%). The Refining & Marketing and Petrochemical Divisions reduced their operating losses by 52% and 73%, respectively. These positives more than offset the sharp decline in the Gas & Power Division’s performance, driven by poor results in the Marketing business.
Return on Average Capital Employed (ROACE) calculated on an adjusted basis was 10.7%. Cash inflows for the year mainly comprised cash flow from operations of euro 14.69 billion and disposal proceeds of euro 1.11 billion. These inflows enabled Eni to partially fund outflows associated with capital expenditures of euro 13.87 billion to support organic growth and exploration activities, dividends to Eni shareholders amounting to euro 3.62 billion, and dividends to non-controlling interests, mainly relating to Snam Rete Gas and Saipem, amounting to euro 0.51 billion. The ratio of net borrowings to total equity was virtually unchanged at 0.47.
The results achieved in 2010 enable us to propose a dividend of euro 1.00 per share to the Annual General Shareholders Meeting, of which euro 0.50 was paid as an interim dividend in September 2010.

In Exploration & Production Division we achieved an outstanding financial and operational performance. Adjusted net profit reached euro 5.6 billion, up 44% compared to 2009, driven by a favorable trading environment for oil prices and the depreciation of the euro against the dollar. Oil and gas production was a record 1,815 kboe/d, 1.1% higher than in 2009. This growth was driven by the timely delivery of all 12 of our planned start-ups, which contributed 40 kboe/d of new production in 2010 and will account for 230 kboe/d at peak. The all sources replacement ratio of reserves was 125%, rising to 135% at constant prices, corresponding to a reserve life index of 10.3 years at December 31, 2010 (10.2 years in 2009).
Over the course of the year we added approximately 0.9 billion boe to our resource base thanks to successful exploration activities in Venezuela, Angola, Indonesia and Brazil, at the very competitive cost of 1.5 $/bbl. The Junin 5 project in Venezuela and acquisition of new acreage in the Democratic Republic of Congo, in Togo and in shale gas in Poland further enhanced our upstream portfolio.
We target an average annual production increase of more than 3% in the 2011-2014 plan, based on our $70 per barrel Brent price scenario and return of the Libyan production to its normal rate at some point in the future. Growth will be fuelled by our strong pipeline of projects, with 15 new major fields and other projects planned to start production in the four-year period. Planned start-ups will add 630 kbbl/d of new production by 2014. The booking of new reserves will enable us to replace reserves produced in the period, keeping the reserve life index stable. In the longer term, we expect to drive production growth leveraging on our giant fields, particularly Kashagan, Junin, Perla, Goliath, MLE-CAFC, Russian projects, Block 15/06 in Angola and unconventional

After delivering solid returns for many years, in 2010 the Gas & Power Division posted a 12% decline in profits compared to 2009. Marketing activities reported sharply lower results (adjusted operating profit was down 57%) owing to heightened competitive pressure. Sales in Italy declined by 14% (down approximately 6 bcm), corresponding to a market share decline of ten percentage points. Sales in target European markets maintained a growth trend, with volumes up 2.5% (up 1 bcm). Short-term prospects remain challenging, while in the next four years we expect a gradual recovery in fundamental trends.
We are tackling this challenging environment by developing our business model and implementing new pricing and risk management strategies to preserve profitability. In Italy, we will regain volumes and market share by leveraging on differentiated marketing initiatives, excellent customer service, the repositioning of our "luce e gas" brand and value-creating management of our assets (transport capacity, modulation, and supply). In Europe we will continue to pursue an aggressive growth strategy in our main target markets, in particular France, Germany and Austria.
We target a substantial recovery in profitability by 2014, even taking into account the expected divestment of our international pipelines. The achievement of this target will be supported by the renegotiation of our long-term supply contracts, with new pricing terms and contractual flexibility ensuring the competitiveness of our cost position. In the Regulated businesses in Italy, our industrial strategy aims at maximizing efficiency and implementing a capital expenditure program to combine outstanding service quality and steady growth in returns.

Compared to 2010, the Refining & Marketing Division reduced its adjusted net loss by 75% to euro 49 million. In the context of weak refining margins caused by excess capacity, low demand and high feedstock costs, the improvement was driven by greater efficiency and operational enhancement. The Marketing business achieved good results: in Italy, successful commercial initiatives offset a difficult trading environment (lower consumption and strong competition), while we continued to grow sales in selected European markets. Over the next four years, we target a substantial improvement in the profitability and free cash generation of our refining operations against the backdrop of continuing weakness in the trading environment. Our strategy in refining will leverage on selective capital expenditures to increase the complexity and flexibility of our refineries, particularly by completing and starting up the EST project at the Sannazzaro site. This will enable us to capture opportunities offered by demand for middle distillates and to process low quality feedstock. Margin recovery will be underpinned by cost efficiencies and the integration of refinery cycles.

The Engineering & Construction segment reported adjusted net profit of nearly euro 1 billion, up 11% compared to 2009, driven by revenue growth and the higher profitability of projects. The order backlog at year end reached a record euro 20.5 billion. Saipem is an established leader in the area of oilfield services, particularly in executing large EPC projects. Its strong competitive position is underpinned by distinctive skills in engineering and project management, the availability of a world class fleet that will be fully upgraded by 2012 and the local content of operations. In the next four years we target steady growth in revenues and profits.

Polimeri substantially improved from a year earlier, reducing its adjusted net loss by 75% to euro 85 million. The improvement was driven by increased sales volumes on the back of a recovery in demand, efficiency enhancements and higher margins. Eni aims to recover profitability and generate free cash flow in the 2012-2013 period, leveraging on increasing efficiency, selective investments to optimize the yields and consumption of our crackers, the upgrading of plants in areas of excellence (elastomers) and opportunities to develop environment-friendly projects. An improving commercial performance will support margins, also with the contribution of licensing activities.

Supporting growth and profitability for shareholders
We expect to make capital expenditures amounting to euro 53.3 billion over the next four-year plan to fuel growth and value creation. This plan represents a slight increase compared to the previous one due to new initiatives in E&P (particularly new projects in Angola and additional activities Iraq). Cash flow from operations and planned divestment proceeds will enable us to fund our capital expenditure program and remunerate our shareholders, while at the same time strengthening our balance sheet. Our cost reduction program, which has delivered savings of euro 2.4 billion from 2006 to date, is expanded by euro 1.7 billion of further savings, targeting cumulated savings of euro 4.1 billion by 2014.

In conclusion, 2010 was a successful year for Eni. We progressed on our strategy focused on growth and efficiency, and laid the foundations for our future growth. In the next four years, while the global economy is expected to progressively recover, we expect that Eni – thanks to its excellent strategic position – will deliver industry-leading results, and create sustainable value for its shareholders and stakeholders.

Chairman

Chief Executive Officer

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Finally, through Saipem, we boast a very strong competitive position in the market of services to the oil and gas industries. A record order backlog, availability of a world class fleet and a set of distinctive skills underpin our expectations for better returns and growth going forward.

This integrated business model represents a distinctive and unique set of assets, underpinned by the Company’s operating and capital efficiency.

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Select and implement the best capital and investment opportunities
The achievement of Eni’s growth targets is supported by a disciplined and selective approach when making investment decisions. Once an investment opportunity has been identified, it is carefully evaluated based on our medium and long-tem scenario for the macroeconomic environment and commodity prices that reflects our management’s view of the fundamentals underlying the expected trends for oil and products prices. The Company selects and executes such capital projects able to generate attractive returns and deliver shareholders’ value. The same approach applies when acquiring an asset or a corporation. Acquisitions go through a rigorous appraisal process to test whether a deal is accretive to shareholders’ value and its strategic rationale i.e. fit with our existing asset portfolio. With these tools, we are implementing a capital expenditure plan of euro 53.5 billion to profitably growth our businesses in the next four years at our long-term Brent price scenario of 70 dollar a barrel.

Preserve a solid financial structure
Eni intends to preserve a solid capital structure targeting an optimal mix between net borrowings and shareholders’ equity, at the same time continuing to invest to fuel profitable growth and rewarding investors. Eni’s ability to generate strong operating cash flows, disciplined approach to investments, capital efficiency and business strategy underpin our solid financial structure. In accordance with these guidelines, we are targeting a net debt to equity ratio of less than 0.40 by the end of the plan period at our Brent price scenario of 70 dollar a barrel.

Pursue capital and operating efficiency
Eni is committed to pursuing high levels of operating and capital efficiency. We attain this by applying industry best practices and effective management systems to all of our operations, building on core competencies and continuously updating and improving internal processes. We have stepped up our efforts to streamline our organization by reducing decision-making levels and centralizing responsibilities over business supporting processes to reap economies of scale resulting in significant savings in our procurement and ICT optimization and rationalization. Integration across our businesses enables Eni to both pursue joint opportunities in the marketplace and achieve synergies from the vertical and physical integration of our facilities, so as to maximize value and returns from our assets. We improve our profitability by implementing cost control initiatives, enhancing product margins by promoting customer-oriented business policies and reducing the cost-to-serve, also leveraging long-standing relationship with key suppliers and partners to obtain competitive contractual conditions.

Leverage research and innovation
Meeting global energy demand needs requires us to develop new technologies designed to create sustainable competitive advantages. We have consistently invested significant amounts of resources in excess of euro 0.2 billion per year for many years to date and we plan to continue investing steadily in R&D with euro 1.1 billion in the next four years. We have successfully developed incremental innovations supporting our businesses’ competitive positions, particularly in exploring for and enhancing the recovery rate of hydrocarbons and production process enhancement. We also intend to strengthen our long-term options in renewable sources of energy and environmental preservation which could potentially lead to breakthroughs.

Apply the highest principles of business conduct
The Company endorses high business and ethical standards in managing the Group’s activity in the belief that they are an essential prerequisite for success. These standards are set in our Code of Ethics which is designed to provide all Eni employees with guidelines for appropriate business conduct. Corporate governance, business integrity, honesty, accountability, internal control and respect for human rights are the standards underpinning Eni’s global reputation and ability to create shareholders’ value.

Promote the sustainability of the business model
Sustainable development is at the heart of Eni’s priorities. We wish to make a positive contribution to social and economic development wherever we operate, strengthen the value of our intangible assets and keep the trust of our stakeholders. To attain all these goals, we have integrated sustainability targets and actions into our management, planning and development processes. We are committed to empowering our people, improving leadership skills, strengthen important relationships with local partners as part of a cooperation model that aims at developing host Countries, through the valorization of local resources, exploitation of specific skills, as well as the realization of projects and the definition of cooperation agreements. On the back of our strong performance in every field of sustainability, we have been confirmed as one of the best oil and gas companies in the Dow Jones Sustainability Index.

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Development projects in Iraq and Venezuela
Achieved an increase in production by more than 10% above the initial production rate of approximately 180 kbbl/d at the giant Zubair oilfield thus beginning cost recovery for its work on the field, including recognition of remuneration fee. Eni, with a 32.8% share, is leading the consortium in charge of redeveloping the Zubair field over a 20-year period, targeting a production plateau of 1.2 mmbbl/d in the next six years.

• selective exploration,
• reducing the time to market of our projects,
• increasing our share of operated production.

We are making strong progress in reducing the time to developing and marketing our exploration resources. We plan to fast track to production in less than four years 50% of the 3.1 bbbl of resources we discovered in the last three years, which compares positively with the 35% achieved in the previous period.
We plan to extend our operated production by adding 1.6 mmboe/d of gross production by 2014, reaching 4.4 mmboe/d by the end of the plan period. Operatorship will enable us to deliver on time schedules and cost budgets and better manage the technical risk by deploying Eni standards and technologies in drilling and completion. Those drivers will help the Company absorb the impact on costs driven by sector-specific inflation expected in the next four years and growing complexity of projects.

n Production: 2010 and outlook
Eni reported record oil and natural gas production for the full year at 1,815 kboe/d. On a comparable basis, production showed an increase of 1.1% driven by organic growth. The share of oil and natural gas produced outside Italy was 90% (90% in 2009).

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• to leverage our robust pipeline of projects start-ups, particularly in Angola, Norway, Russia, Kazakhstan, Algeria and Venezuela, most of which is Eni operated;
• to competitively increase production profile at giant fields particularly Belayim in Egypt, Karachaganak in Kazakhstan, Val d’Agri in Italy, M’Boundi in Congo and Ekofisk in Norway. Production optimization will account for approximately 20% of our capex;
• to develop opportunities in LNG to monetize our wide gas reserve base in particular in West Africa, as well as non conventional resources with a view of supporting long-term growth, in particular in shale gas themes, leveraging on the competencies acquired with Quicksilver in the US.

Actual production volumes will vary from year to year due to the timing of individual project start-ups, operational outages, reservoir performance, regulatory changes, asset sales, severe weather events, price effects under production sharing contracts and other factors.

the Company believes to have the necessary know-how and skills to discover new reserves. A third layer of exploration projects is planned to be executed in high risk/high reward areas including Mozambique, Togo, Ghana and offshore Australia and East Timor where we believe important resources can be discovered. Eni expects to purchase new exploration permits and to divest or exit marginal or non-strategic areas.

As of December 31, 2010, Eni’s mineral right portfolio consisted of 1,176 exclusive or shared rights for exploration and development in 43 Countries on five continents for a total acreage of 320,961 square kilometers net to Eni, of which 41,386 square kilometers regarded developed properties. Acquisition of new acreage in the Democratic Republic of Congo, in Togo and in shale gas in Poland further enhanced our upstream portfolio. Leveraging on the strengthening in core areas of Africa, Central Asia and Russia, we increased our portfolio diversity and exposure to less risky areas.

Over the course of the year we added approximately 0.9 bboe to our resource base thanks to successful exploration activities in Venezuela, Angola, Indonesia and Brazil, at the very competitive cost of 1.5 $/bbl. Our asset base is largely made up of conventional projects, geographically diversified, with balanced exposure to the world’s most prolific oil-producing cost. Eni’s resource base of 31 billion boe will ensure 47 years of production at current rates.

Estimated net proved reserves at December 31, 2010, were 6.84 bboe (up 2.5% from 2009 on comparable basis) based on a 12-month average Brent price of $79 per barrel. Additions to proved reserves booked in 2010 derived from: (i) revisions of previous estimates reported in Libya, Nigeria, Egypt, Iraq and Italy; (ii) extensions, discoveries and other factors, with major increases booked in Venezuela, the United Kingdom and Algeria; (ii) improved recovery, mainly reported in Venezuela. In 2010, we also achieved a strong reserve replacement ratio of 125% through fast sanctioning and time to market of new projects. Excluding price effects, the replacement ratio would be 135%. The reserve life index is 10.3 years (10.2 years in 2009).

• monetizing our assets in legacy areas where we plan to invest approximately 60% of our planned investments in exploration, mainly in the United States, North Africa, West Africa, Australia, Norway, Italy and Indonesia. In those areas we intend to readily put in production discovered resources leveraging on our existing facilities and competencies;
• capturing opportunities in high risk/high reward plays in frontier exploration basins, notably our recently acquired leases in Mozambique and the Gulf of Guinea, as well as in our leases in portfolio in West Australia, East Timor and the Barents Sea.

Finally we intend to optimize our assets portfolio and divest non-strategic or marginal assets.

n Oil & gas major projects

Block 405b - Algeria (Eni 75% Op.)
Development activities have been progressing at the MLE and CAFC projects,

Goliat, Prospecting License 229 - Norway (Eni 65% Op.)
Goliat represents the first oil development in the Barents Sea. We have already obtained governmental approval. The project is progressing according to schedule. Development provides for the use of a cylindrical FPSO unit linked to an underwater production system. Gas produced will be injected in the field. Start-up is expected in 2013 with production expected to peak at 100 kbbl/d the following year.

Kizomba Satellites, Phase 1, Block 15 - Angola (Eni 20%)
The Kizomba Satellites development targets the Clochas and Mavacola oil discoveries. The project provides for the drilling of 18 producing wells to be linked to an FPSO vessels already deployed in this area. Associated gas will be initially re-injected in the reservoirs in the Kizomba area, and later delivered to the A-LNG liquefaction plant. Start-up is expected before mid 2012 and production to peak at 100 kbbl/d (21 kbbl/d net to Eni) in 2013.

Kashagan, Phase 1 - Kazakhstan (Eni 16.81% Op.)
Development activities are progressing at the giant Kashagan oil field located off the Kazakh section of the Caspian Sea, where Eni is operator of Phase 1 of the project (the so-called "Experimental Program"). The Phase 1 of the project targets an initial production capacity of 150 kbbl/d. In the 12-15 months following the start-up, the treatment plant and the compression facilities for gas re-injection will be started-up enabling an increase of the production capacity to 370 kbbl/d by 2014. A further increase of production capacity to 450 kbbl/d is expected as additional compression capacity for gas re-injection becomes available with the start-up of Phase 2 offshore facilities. Early engineering studies of Phase 2 are underway aiming at optimizing the development scheme.
The partners of the venture are currently discussing an update of the expenditures and time schedule to complete Phase 1 which were included in the development plan approved in 2008 by the relevant Kazakh Authorities. The consortium continues to target the achievement of first commercial oil production by end of 2012. However, the timely delivery of Phase 1 depends on a number of factors which are presently under review.

Samburgskoje - Russia (Eni 29.4% Op.)
The development design includes the construction of an onshore treatment plant with a capacity of approximately 650 bcf/d and linkage of a number of producing wells to existing facilities of the Urengoy plant. Start-up is expected in 2012 targeting a production plateau of 150 kboe/d.

Junin 5 - Venezuela (Eni 40%)
We established a joint-venture with the Venezuelan National Oil Company PDVSA for the development of the giant Junin 5 oilfield, located in the Orinoco Oil Belt with certified volumes of oil in place of 35 billion barrels. First oil is expected in 2013 at an initial rate of 75 kbbl/d, targeting a long-term production plateau of 240 kbbl/d by 2018.

Perla - Venezuela (Eni 50%)
The partners are planning fast track of Perla through an early production phase at 300 mmcf/d, targeting production start-up by 2013. The early production phase includes the utilization of the already successfully drilled wells and the installation of four light offshore platforms linked, through a gas pipeline, to a Central Processing Facility (CPF) located onshore. The development of Perla is currently planned to continue with the full field phase, which includes additional producing wells and the CPF upgrade, to reach a production plateau of 1,200 mmcf/d.

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2010 Performance
In 2010, adjusted net profit was euro 2,558 million, down 12.3% from 2009 due to sharply lower results delivered by the Marketing business due to shrinking marketing margins and volume losses in Italy. These lower results were partly offset by a robust operating performance delivered by the Regulated businesses in Italy.
In 2010, sales of natural gas were 97.06 bcm, down 6.66 bcm or 6.4% from 2009 reflecting ongoing oversupply and stronger competition in the Italian market. In spite of a challenging environment, sales in key European markets rose by 2.5% due to effective marketing actions.
Return On Average Capital Employed (ROACE) on an adjusted basis was 9.8% (12.3% in 2009).
Capital expenditures totaled euro 1,685 million and mainly related to the development and upgrading of Eni’s transport and distribution networks in Italy, the upgrading of storage capacity and the ongoing plan for improving power generation efficiency standards.
Electricity volumes sold were 39.54 TWh, increasing by 5.58 TWh, or 16.4%, from 2009.
Natural gas volumes transported on the Italian network were 83.32 bcm, up 8.3% from 2009.

In the next four-year period, we plan to invest euro 7.5 billion in the business. Planned expenditures will be largely focused on regulated businesses with guaranteed returns, aiming at improving the system’s flexibility and also at expanding gas storage capacity in Italy. In the Marketing business, we will invest about euro 1 billion, mainly in the power generation sector to increase flexibility and maximize margins.

In 2010, our profitability in the gas marketing business was deeply impacted by rising competitive pressures and oversupply conditions in the European market. Sales volumes in Italy were significantly lower form 2009 as competition eroded our market share in the power generation and industrial segments and wholesalers. Lower sales also forced the Company to off-take lower volumes under its take-or-pay long-term purchase contracts, bearing the financing costs for cash advances to its suppliers. In Europe, unit margins on gas sales fell sharply as spot prices at continental hubs plunged due to the build up of supplies of both LNG from global sources and recent capacity upgrading at several pipelines, including those from Russia and Algeria. Spreads between spot prices and our oil-linked costs of

n European markets
Over the next four years, we target to increase European gas sales by 8 bcm to attain an overall sales volume of 56 bcm versus 48 bcm in 2010. We intend to achieve that target by leveraging on the competitiveness of the Company’s cost position and new customized commercial offers, a multi-Country approach and an integrated pan-European commercial platform. Most of the expected growth will be achieved in:

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Transport Activity
Snam Rete Gas owns and manages nearly all transport infrastructures in Italy, with over 31,600 kilometers of high and medium pressure trunk-lines:
(i) a national transport network extending over 8,894 kilometers, made up of high pressure trunk-lines mainly with a large diameter, which carry natural gas from the entry points to the system – import lines, storage sites and main Italian natural gas fields – to the linking points with regional transport networks. The national network includes also some interregional lines reaching important markets; and
(ii) a regional transport network extending over 22,786 kilometers, made up of smaller lines and allowing the transport of natural gas to large industrial complexes, power stations and local distribution companies in the various local areas served.
Eni’s system is completed by: (i) eleven compressor stations used to increase gas pressure in pipelines to the level required for its flow; and (ii) four marine terminals linking underwater pipelines with the on-land network at Mazara del Vallo and Messina in Sicily and Favazzina and Palmi in Calabria.
In 2010, volumes of natural gas input in the national grid (83.32 bcm) increasing by 6.42 bcm from 2009 due to higher gas deliveries due to a demand recovery.

Distribution
Snam Rete Gas through Italgas and other subsidiaries, is engaged in gas distribution which involves the delivery of natural gas to residential and commercial customers in urban centers through low pressure networks. In 2010, Italgas served 1,330 municipalities through a low pressure network consisting of approximately 50,300 kilometers of pipelines supplying 5.8 million customers and distributing 8.15 bcm in 2010.

Eni holds a 50% interest in the Blue Stream underwater pipeline (water depth greater than 2,150 meters) linking the Russian coast to the Turkish coast of the Black Sea. This pipeline is 774-kilometer long on two lines and has transport capacity of 16 bcm/y. It is part of a joint venture to sell gas produced in Russia on the Turkish market.

The main international pipelines participated or operated by Eni are:

n TAG. TAG is the carrier company which manages a 1,140-kilometer long pipeline, made up of three lines, each about 380-kilometer long, with a transport capacity of 37.4 bcm/y and five compression stations. This

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