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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

Form 6-K

REPORT OF FOREIGN ISSUER
Pursuant to Rule 13a-16 or 15d-16 of
the Securities Exchange Act of 1934

For the month of May 2015

Eni S.p.A.
(Exact name of Registrant as specified in its charter)

Piazzale Enrico Mattei 1 - 00144 Rome, Italy
(Address of principal executive offices)

     (Indicate by check mark whether the registrant files or will file annual reports under cover of Form 20-F or Form 40-F.)

Form 20-F x                    Form 40-F o

     (Indicate by check mark whether the registrant by furnishing the information contained in this Form is also thereby furnishing the information to the Commission pursuant to Rule 12g3-2b under the Securities Exchange Act of 1934.)

Yes o                    No x

     (If “Yes” is marked, indicate below the file number assigned to the registrant in connection with Rule 12g3-2(b):               )

 

Table of Contents

TABLE OF CONTENTS

 

Fact Book 2014

Summary annual review (Eni in 2014)

Press Release dated May 13, 2015

Ordinary Shareholders’ Meeting Resolutions

Press Release dated May 31, 2015

 

 

 

 

Table of Contents

SIGNATURES

     Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, hereunto duly authorised.

         
  Eni S.p.A.
 		  
         
    Name: Antonio Cristodoro   
    Title:   Head of Corporate Secretary's Staff Office   
 

Date: May 31, 2015

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Contents

 

Table of Contents
Contents

Table of Contents
Contents

Table of Contents
                     
        Fact Book 2014            
                   
 
     
 
        Contents         Eni’s Fact Book is a supplement to Eni’s Integrated Annual Report and is designed to provide supplemental financial and operating information.
It contains certain forward-looking statements in particular under the section "Outlook" regarding capital expenditure, dividends, buyback program, allocation of future cash flow from operations evolution of financial structure, future operating performance, targets of production and sale growth, execution 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. Actual results may differ from those expressed in such statements, depending on a variety of factors, including the timing of bringing new fields on stream; management’s ability in carrying out industrial plans and in succeeding in commercial transactions; future levels of industry product supply; demand and pricing; operational problems; general economic conditions; geopolitical factors including international tensions, social and political instability, changes in the economic and legal frameworks in Eni’s countries of operations, regulation of the oil&gas industry, power generation and environmental field, development and use of new technologies; changes in public expectations and other changes in business conditions; the actions of competitors.		  
                 
      Eni at a glance     4  
      Eni’s business model     10  
      Exploration & Production     12  
      Gas & Power     38  
      Refining & Marketing     46  
      Versalis     56  
      Engineering & Construction     60  
                  
         Tables        
        Financial Data     66  
        Employees     81  
        Supplemental oil and gas information     82  
        Quarterly information     101  
                 

 

Contents

Eni Fact Book Eni at a glance

   Eni at a glance

 

Results

In 2014, in spite of an unfavorable trading environment, Eni delivered excellent results underpinned by record cash flow generation. The performance was driven by the increased contribution from upstream production and the accelerated restructuring of the mid and downstream businesses.

Adjusted operating profit of euro 11.57 billion and adjusted net profit of euro 3.71 billion declined by 9% and 16%, respectively, compared to 2013. The mid and downstream businesses reported a euro 1.2 billion improvement driven by contract renegotiations, capacity restructuring and downsizing and cost efficiencies. These positives helped offset the decline of the E&P segment due to lower Brent prices. Additionally, 2014 results were reduced by the loss on the mark-to-market interests in Galp and Snam which underlay two convertible bonds (loss of euro 0.22 billion).

Net profit of euro 1.29 billion was impacted by extraordinary charges, net of tax effect, of euro 1.41 billion, which related to asset impairments and the write off of certain deferred tax assets of Italian subsidiaries, as well as the alignment of crude oil and product inventories to current market prices for euro 1 billion. The 75% reduction from 2013 is attributable to the recognition in the past year of sizeable gains on the divestment of a 20% stake in the Mozambique discovery and on the revaluation of Eni’s interest in Artic Russia for an overall euro 4.7 billion.

   Cash flow of euro 15.1 billion was the best result of the last six years, supported by a reduced working capital in E&P, G&P and Saipem. Proceeds from disposals were euro 3.68 billion and mainly related to the divestment of Eni’s share in Artic Russia, an 8% interest in Galp and in the South Stream project. These cash inflows funded capital expenditure of euro 12.24 billion, focused on upstream activities, dividend payments (euro 4 billion) and share repurchases (euro 0.38 billion), also reducing the Group’s net debt by euro 1.28 billion.

As of December 31, 2014, leverage reduced to 0.22, from 0.25 at December 31, 2013.

Dividend > The Company’s robust results and strong fundamentals underpin a dividend distribution of euro 1.12 per share (euro 1.10 in 2013) of which euro 0.56 per share paid as interim dividend in September 2014.

Share repurchases in 2014 were 21.66 million for a cash outlay of euro 0.38 billion, together with the dividend this ensured a distribution yield of 8.3%.

Hydrocarbon production > In 2014, Eni’s hydrocarbon production was 1.598 million boe/d, up by 0.6% from 2013 on a homogeneous basis i.e. excluding the impact of the divestment of Eni’s interest in Artic Russia. Production increases in the United Kingdom, Algeria, the United States and Angola, more than offset mature fields decline. Start-ups and ramp-ups of new fields contributed 126 kboe/d.

Proved oil and natural gas reserves > Proved oil and gas reserves as of December 31, 2014 were 6.6 bboe. The reserve replacement ratio was 112%. The reserve life index is 11.3 years.

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Contents

Eni Fact Book Eni at a glance

 

Development of new fields > In 2014, the West Hub project, located offshore in Block 15/06 in Angola, and Nené project in Block Marine XII in Congo were started up, setting the industry benchmark in terms of time-to-market.

Exploration successes > In 2014, Eni continued its track record of exploratory success. Additions to the Company’s resource base were approximately 900 million boe, at a competitive cost of $2.1 per barrel. Main discoveries in Angola, Congo, Ecuador, Indonesia and Gabon were made near-field and characterized by a short time-to-market.

Renegotiation of long-term gas supply contracts and take-or-pay reduction > Following the renegotiation of a number of the main long-term supply contracts, gas prices and related trends were better aligned to market conditions. 70% of long-term gas supply portfolio is now indexed to hub prices. Furthermore, the cash advances paid to suppliers due to the take-or-pay clause in those long-term supply contracts were reduced by euro 0.66 billion thanks to contract renegotiation and sales optimization.

Turnaround in refining and Chemicals > In 2014, the turnaround plan in the R&M achieved a cut of up to 30% of Eni’s refining capacity compared to 2012 with the agreement on the conversion of the Gela refinery, the start-up of the green plant in Venice and the disposal of Eni’s interest in a refinery in East Europe. Overall the capacity utilization rate increased from the previous year, driving down the breakeven margin of Eni’s refineries below 6 $/bbl.
- Eni defined with the Italian Ministry for Economic Development, the Region of Sicily and interested stakeholders (including trade unions and local communities) a plan for the reconversion of the Gela site into a bio-refinery and logistic hub, as well as the start-up of industrial initiatives aimed to relaunch the upstream sector in Sicily. The project intends to achieve the long-term sustainability of the Gela site leveraging on a new plan of capital expenditure, proprietary technologies and Eni’s people skills.
- An agreement was signed with relevant Italian institutions and stakeholders to restore the profitability of the loss-making Porto Marghera chemical plant. The pillars of the deal are the development of an innovative green chemical project in partnership with the US-based company Elevance Renewable Science Inc and the shutdown of the oil-based petrochemical unit. The green plant will produce specialties destined for high added-value industrial applications.

Restructuring of petrochemical activities in Sardinia > Operations at the green chemical project of Matrìca started up in 2014, marking the full conversion of the Porto Torres site.
The 50/50 joint venture between Eni’s subsidiary Versalis and Novamont, Matrìca, is currently producing basic chemical products for industrial applications from renewable feedstock.
The Sarroch plant was divested.

   Sustainability performance

Safety > In 2014, Eni continued to implement the communication and training program "Eni in safety", with workshops dedicated to Eni’s employees. The benefit of these and other programs and investments in safety supported a positive trend in the injury frequency rate relating to employees and contractors which improved for the tenth consecutive year (down by 12.6% from 2013). Notwithstanding the 27% decrease in the fatality index, four fatal accidents occurred in 2014.

Transparency in Corporate Reporting > In 2014, Eni ranked first in a worldwide survey made by Transparency International about transparency in corporate reporting. The survey analyzed three areas: anti-bribery programs, the organization (e.g. information on subsidiaries, joint arrangements and associates) and the publication of key economic and financial data related to the activities in each country where the company operates.

LEAD Board Program > Eni is one of the six companies in the world to adhere to the pilot phase of the UN Global Compact LEAD Board Program, committed to the Board of Directors of certain companies, in order to strengthen their awareness on sustainability issues. During the first module on "The materiality of sustainability" Eni’s Board of Directors discussed on material sustainability issues leading the company to create sustainable value. The initiative will continue in 2015.

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Contents

Eni Fact Book Strategy

Strategy

Industrial Plan
In order to cope with a radically changed price environment, the Company outlined for the next four-year period an action plan which comprises a number of rigorous initiatives and objectives in order to mitigate the impact of lower oil prices and to preserve a robust financial structure, particularly in the short-to-medium term. Against the backdrop of a low price environment, our primary target remains cash generation which will be underpinned by well-designed industrial actions, capital discipline, focus on upstream activities and a large disposal plan. In approving the capital expenditure plan the Company selected high-return projects with short pay-back periods; this optimization will result in a euro 47.8 billion capital expenditure in the next four years, down by approximately 17% compared to previous plan, at the same exchange rate. The disposal plan, amounting to more than euro 8 billion in the 2015-2018 period, is based on the anticipated monetization of exploratory discoveries, optimization of the upstream portfolio – which will be refocused based on strategic consideration and on the evaluation of the geopolitical risk – rationalization of midstream and downstream portfolio, and the divestment of residual interests in Snam and Galp.
In the years 2015-2016 cash flow from operations will be able to fund projected capital expenditure on our Brent price scenario of 63 $/bbl on average.		   In the subsequent years, under our planning assumption of a recovery in crude oil prices at 85 $/bbl on average in the years 2017-2018 up to the long-term Brent price of 90 $/bbl, and considering our industrial actions, we will able to increase our cash flow from operations by 40% thus generating a significant surplus over the projected level of capital expenditure.
In brief, the Company forecasts that the planned industrial actions, the selective approach to capital expenditure and the disposal plan will enable Eni to preserve a robust financial structure, targeting a leverage below the ceiling of 0.30 throughout the oil cycle.

Dividend policy
In the framework of the Group’s transformation process and given the targets set out in the plan, the Company intends to propose a 2015 dividend of euro 0.8 per share.
The distribution policy will be progressive with underlying earnings growth.

For further information on main strategic guidelines and 2015-2018 key targets, see chapter "Eni’s business model" and section "Strategy" of each segment of activity.

 

Strategic pillars   2014 Achievements   2015-2018 Plan
Disciplined CAPEX plan   - euro 12.6 bln capital expenditure
- down by 3.6% from 2013		   - 17% reduction vs. prior plan
- 45% unsanctioned capex
Cost efficiency   - euro 250 mln G&A cost reduction
- OPEX per boe at $8.4		   - G&A reduced by 25% with savings of approximately euro 2 bln
- Unitary OPEX reduced by 7%
Assets disposals   - euro 3.7 bln disposal of assets   - euro 8 bln disposal plan
Robust balance sheet   - Leverage at 0.22 from 0.25 reported in 2013   - 0.30 leverage threshold
Dividend policy   - Distribution Yield at 8.3%
- Dividend per share of euro 1.12
- Payout > 300%		   - Competitive and sustainable dividend policy
- Payout < 100%

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Contents

Eni Fact Book Main data

Main data

   Key financial data (a)
   (euro million)

  

2005

    

2006

    

2007

    

2008

    

2009

    

2010

    

2011

    

2012

    

2013

    

2014

  
Net sales from operations   73,692     86,071     87,204     108,082     83,227     98,523     109,589     128,481     114,697     109,847  
of which: continuing operations                     106,978     81,932     96,617     107,690     127,109     114,697     109,847  
Group operating profit   16,664     19,336     18,739     18,517     12,055     16,111     17,435     16,099     8,888     7,917  
  Special items   (1,210 )   88     (620 )   2,034     1,295     2,290     1,567     4,743     3,046     2,197  
  Profit (loss) on stock   1,942     1,059     885     936     (345 )   (881 )   (1,113 )   (17 )   716     1,460  
Group adjusted operating profit   17,396     20,483     19,004     21,487     13,005     17,520     17,889     20,825     12,650     11,574  
Adjusted operating profit - continuing operations                     21,322     12,722     16,845     17,230     19,883     12,650     11,574  
  Exploration & Production   12,649     15,521     13,770     17,166     9,489     13,898     16,075     18,537     14,643     11,551  
  Gas & Power   3,783     4,117     4,414     1,778     2,022     1,268     (247 )   398     (638 )   310  
  Refining & Marketing   1,210     794     292     555     (381 )   (181 )   (539 )   (289 )   (457 )   (208 )
  Versalis   261     219     116     (382 )   (441 )   (96 )   (273 )   (483 )   (386 )   (346 )
  Engineering & Construction   314     508     840     1,041     1,120     1,326     1,443     1,485     (99 )   479  
  Other activities   (296 )   (299 )   (207 )   (244 )   (258 )   (205 )   (226 )   (222 )   (210 )   (178 )
  Corporate and financial companies   (384 )   (244 )   (195 )   (282 )   (342 )   (265 )   (266 )   (325 )   (332 )   (265 )
  Impact of unrealized intragroup profit elimination and consolidation adjustments   (141 )   (133 )   (26 )   1,690     1,513     1,100     1,263     782     129     231  
Adjusted operating profit - discontinued operations                     165     283     675     659     942              
Group net profit (*)   8,788     9,217     10,011     8,825     4,367     6,318     6,860     7,790     5,160     1,291  
of which: continuing operations                     8,996     4,488     6,252     6,902     4,200     5,160     1,291  
of which: discontinued operations                     (171 )   (121 )   66     (42 )   3,590              
Group adjusted net profit (*)   9,251     10,401     9,569     10,164     5,207     6,869     6,969     7,325     4,430     3,707  
of which: continuing operations                     10,315     5,321     6,770     6,938     7,130     4,430     3,707  
of which: discontinued operations                     (151 )   (114 )   99     31     195              
Net cash provided by operating activities   14,936     17,001     15,517     21,801     11,136     14,694     14,382     12,567     11,026     15,110  
of which: continuing operations                     21,506     10,755     14,140     13,763     12,552     11,026     15,110  
of which: discontinued operations                     295     381     554     619     15              
Capital expenditure   7,414     7,833     10,593     14,562     13,695     13,870     13,438     13,561     12,800     12,240  
of which: continuing operations                     12,935     12,216     12,450     11,909     12,805     12,800     12,240  
of which: discontinued operations                     1,627     1,479     1,420     1,529     756              
Shareholders’ equity including non-controlling interest   39,217     41,199     42,867     48,510     50,051     55,728     60,393     62,417     61,049     62,209  
Net borrowings   10,475     6,767     16,327     18,376     23,055     26,119     28,032     15,069     14,963     13,685  
Leverage   0.27     0.16     0.38     0.38     0.46     0.47     0.46     0.24     0.25     0.22  
Net capital employed   49,692     47,966     59,194     66,886     73,106     81,847     88,425     77,486     76,012     75,894  
  Exploration & Production   19,109     17,783     23,826     31,362     32,455     37,646     42,024     42,369     45,699     47,629  
  Gas & Power   20,075     19,713     21,333     9,636     11,024     12,931     12,367     10,597     9,201     7,776  
  Snam                     11,918     13,730     14,415     15,393                    
  Refining & Marketing   5,993     5,631     7,675     7,379     8,105     8,321     9,188     8,871     7,998     7,993  
  Versalis   2,018     1,953     2,228     1,915     1,774     1,978     2,252     2,557     2,656     2,973  
  Engineering & Construction   2,844     3,399     4,313     5,022     6,566     7,610     8,217     9,937     9,554     8,644  
  Corporate financial companies and other activities   2     (95 )   294     24     (192 )   (527 )   (393 )   3,658     1,381     1,089  
  Impact of unrealized intragroup profit elimination   (349 )   (418 )   (475 )   (370 )   (356 )   (527 )   (623 )   (503 )   (477 )   (210 )
(a) Following the divestment of Regulated Businesses in Italy, results of Snam have been accounted as "discontinued operations". Results for the 2008-2011 period have been restated accordingly.
(*) Attributable to Eni’s shareholders.

 

   Key market indicators

  

2005

  

2006

  

2007

  

2008

  

2009

  

2010

  

2011

  

2012

  

2013

  

2014

  
Average price of Brent dated crude oil (a)       54.38   65.14   72.52   96.99   61.51   79.47   111.27   111.58   108.66   98.99  
Average EUR/USD exchange rate (b)       1.244   1.256   1.371   1.471   1.393   1.327   1.392   1.285   1.328   1.329  
Average price in euro of Brent dated crude oil       43.71   51.86   52.90   65.93   44.16   59.89   79.94   86.83   81.82   74.48  
Standard Eni Refining Margin (SERM) (c)       n.a.   6.37   7.20   8.45   3.11   3.06   1.82   4.12   2.43   3.21  
Euribor - three-month euro rate   (%)   2.2   3.1   4.3   4.6   1.2   0.8   1.4   0.6   0.2   0.2  
(a) In USD per barrel. Source: Platt’s Oilgram.
(b) Source: ECB.
(c) In USD per barrel FOB Mediterranean Brent dated crude oil. Source: Eni calculations. Approximates the margin of Eni’s refining system in consideration of material balances and refineries’ product yields.

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Contents
Eni Fact Book Main data
  

   Selected operating data

  

2005

  

2006

  

2007

  

2008

  

2009

  

2010

  

2011

  

2012

  

2013

  

2014

  
Corporate (a)                                              
Employees at period end   (number)   71,773   72,850   75,125   71,714   71,461   73,768   72,574   79,405   83,887   84,405  
of which: - women       10,620   10,841   10,977   11,611   11,955   12,161   12,542   12,847   13,588   13,650  
of which: - outside Italy       34,036   35,818   38,634   41,971   42,633   45,967   45,516   52,008   56,509   58,182  
Female managers   (%)   12.4   13.5   14.1   16.3   17.3   18.0   18.5   18.9   19.4   19.7  
Employee injury frequency rate   (number of injuries/million of worked hours)   2.74   2.45   1.93   1.22   0.84   0.80   0.65   0.57   0.40   0.38  
Contractor injury frequency rate       2.59   1.54   1.45   1.09   0.97   0.71   0.57   0.45   0.32   0.26  
Fatality index   (fatal injuries per one hundred millions of worked hours)   3.38   2.31   2.97   2.75   1.20   4.77   1.94   1.10   0.98   0.72  
Oil spills   (barrel)   6,908   6,151   6,731   4,749   6,259   4,269   7,295   3,759   1,901   1,179  
GHG emission (GHG)   (mmtonnes CO2 eq)   61.85   60.72   67.25   59.59   55.49   58.26   49.13   52.84   47.60   42.93  
R&D expenditures (b)   (euro million)   204   222   208   211   233   218   190   211   197   186  
Exploration & Production                                              
Proved reserves of hydrocarbons at period end   (mmboe)   6,837   6,436   6,370   6,600   6,571   6,843   7,086   7,166   6,535   6,602  
Reserve life index   (years)   10.8   10.0   10.0   10.0   10.2   10.3   12.3   11.5   11.1   11.3  
Hydrocarbons production   (kboe/d)   1,737   1,770   1,736   1,797   1,769   1,815   1,581   1,701   1,619   1,598  
Gas & Power                                              
Sales of consolidated companies (including own consumption)   (bcm)   82.62   85.76   84.83   89.32   89.60   82.00   84.05   84.30   83.60   81.73  
Sales of Eni’s affiliates (Eni’s share)       7.08   7.65   8.74   8.91   7.95   9.41   9.85   8.29   6.96   4.38  
Total sales and own consumption (G&P)       89.70   93.41   93.57   98.23   97.55   91.41   93.90   92.59   90.56   86.11  
E&P sales in Europe and in the Gulf of Mexico       4.51   4.69   5.39   6.00   6.17   5.65   2.86   2.73   2.61   3.06  
Worldwide gas sales       94.21   98.10   98.96   104.23   103.72   97.06   96.76   95.32   93.17   89.17  
Electricity sold   (TWh)   27.56   31.03   33.19   29.93   33.96   39.54   40.28   42.58   35.05   33.58  
Refining & Marketing                                              
Throughputs on own account   (mmtonnes)   38.79   38.04   37.15   35.84   34.55   34.80   31.96   30.01   27.38   25.03  
Balanced capacity of wholly-owned refineries   (kbbl/d)   524   534   544   737   747   757   767   767   787   617  
Sales of refined products   (mmtonnes)   51.63   51.13   50.15   49.16   45.59   46.80   45.02   48.33   43.49   44.41  
Retail sales in Europe   (mmtonnes)   12.42   12.48   12.65   12.03   12.02   11.73   11.37   10.87   9.69   9.21  
Service stations at year end   (units)   6,282   6,294   6,440   5,956   5,986   6,167   6,287   6,384   6,386   6,220  
Average throughput per service station   (kliters/y)   2,479   2,470   2,486   2,502   2,477   2,352   2,206   2,064   1,828   1,725  
Versalis                                              
Production   (ktonnes)   7,282   7,072   8,795   7,372   6,521   7,220   6,245   6,090   5,817   5,283  
of which: - Intermediates       4,450   4,275   5,688   5,110   4,350   4,860   4,101   3,595   3,462   2,972  
of which: - Polymers       2,832   2,797   3,107   2,262   2,171   2,360   2,144   2,495   2,355   2,311  
Average plant utilization rate   (%)   78.4   76.4   80.6   68.6   65.4   72.9   65.3   66.7   65.3   71.3  
Engineering & Construction                                              
Orders acquired   (euro million)   8,395   11,172   11,845   13,860   9,917   12,935   12,505   13,391   10,062   17,971  
Order backlog at year end   (euro million)   10,122   13,191   15,390   19,105   18,370   20,505   20,417   19,739   17,065   22,147  
(a) Following the divestment of Regulated Businesses in Italy, data for the year 2012 do not include Snam contribution. Results for the 2008-2011 period have been restated accordingly.
(b) Net of general and administrative costs.
  

   Share data

  

2005

  

2006

  

2007

  

2008

  

2009

  

2010

  

2011

  

2012

  

2013

  

2014

  
Net profit (a) (b)   (euro)   2.34   2.49   2.73   2.43     1.21   1.74     1.89   1.16   1.42   0.36  
Net profit - continuing operations (a) (b) (*)                   2.47     1.24   1.72     1.90   1.16   1.42   0.36  
Dividend       1.10   1.25   1.30   1.30     1.00   1.00     1.04   1.08   1.10   1.12  
Cash dividends (c)   (euro million)   4,086   4,594   4,750   4,714     3,622   3,622     3,695   3,840   3,949   4,006  
Cash flow   (euro)   3.97   4.59   4.23   5.99     3.07   4.06     3.97   3.41   3.52   4.18  
Dividend yield (d)   (%)   4.7   5.0   5.3   7.6     5.8   6.1     6.6   5.9   6.5   7.6  
Net profit per ADR (e) (*)   (USD)   5.81   6.26   7.49   7.27     3.45   4.56     5.29   2.98   3.77   0.96  
Dividend per ADR (e)       2.73   3.14   3.74   3.72     2.91   2.64     2.73   2.82   3.00   2.79  
Cash flow per ADR (e)       9.40   11.53   11.60   17.63     8.56   10.77     11.05   8.77   9.04   11.12  
Dividend yield per ADR (d)   (%)   4.7   4.7   5.2   8.1     5.8   6.1     6.6   5.9   6.4   7.7  
Pay-out       46   50   47   53     81   57     55   50   77   311  
Number of shares at period end representing share capital   (million)   4,005.4   4,005.4   4,005.4   4,005.4     4,005.4   4,005.4     4,005.4   3,634.2   3,634.2   3,634.2  
Average number of share outstanding in the year (f) (fully diluted)       3,763.4   3,701.3   3,669.2   3,638.9     3,622.4   3,622.5     3,622.7   3,622.8   3,622.8   3,610.4  
TSR   (%)   35.3   14.8   3.2   (29.1 )   13.7   (2.2 )   5.1   22.0   1.3   (11.9 )
(*) Following the divestment of Regulated Businesses in Italy, results of Snam have been accounted for as "discontinued operations", based on IFRS 5. Results for the 2008-2011 period have been restated accordingly. Net profit refers to results of continuing operations as reported in Eni consolidated Annual Report.
(a) Calculated on the average number of Eni shares outstanding during the year.
(b) Pertaining to Eni’s shareholders.
(c) Pertaining to the year. The amount for the year 2014 is based on the Board’s proposal.
(d) Ratio between dividend of the year and average share price in December.
(e) One ADR represents 2 shares. Net profit, dividends and cash flow data were converted using average exchange rates. Dividends data were converted at the Noon Buying Rate of the pay-out date.
(f) Calculated by excluding own shares in portfolio.

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Contents

Eni Fact Book Main data

   Share information

  

2005

  

2006

  

2007

  

2008

  

2009

  

2010

  

2011

  

2012

  

2013

  

2014

  
Share price - Milan Stock Exchange                                              
High   (euro)   24.96   25.73   28.33   26.93   18.35   18.56   18.42   18.70   19.48   20.41  
Low       17.93   21.82   22.76   13.80   12.30   14.61   12.17   15.25   15.29   13.29  
Average       21.60   23.83   25.10   21.43   16.59   16.39   15.95   17.18   17.57   17.83  
End of the period       23.43   25.48   25.05   16.74   17.80   16.34   16.01   18.34   17.49   14.51  
ADR price (a) - New York Stock Exchange                                              
High   (USD)   151.35   67.69   78.29   84.14   54.45   53.89   53.74   49.44   52.12   55.30  
Low       118.50   54.65   60.22   37.22   31.07   35.37   32.98   36.85   40.39   32.81  
Average       134.02   59.97   68.80   63.38   46.36   43.56   44.41   44.24   46.68   47.37  
End of the period       139.46   67.28   72.43   47.82   50.61   43.74   41.27   49.14   48.49   34.91  
Average daily exchanged shares   (million of shares)   28.5   26.2   30.5   28.7   27.9   20.7   22.9   15.6   15.4   17.21  
Value   (euro million)   620.7   619.1   773.1   610.4   461.7   336.0   355.0   267.0   271.4   304.0  
Weighted average number of shares outstanding (b)   (million)   3,727.3   3,680.4   3,656.8   3,622.4   3,622.4   3,622.7   3,622.7   3,622.8   3,622.8   3,610.4  
Market capitalization (c)                                              
EUR   (billion)   87.3   93.8   91.6   60.6   64.5   59.2   58.0   66.4   63.4   52.4  
USD       104.0   123.8   132.4   86.6   91.7   79.2   75.0   87.7   87.4   63.6  
(a) Effective January 10, 2006 a 5:2 stock split was made. Previous period’s prices have not been restated.
(b) Excluding treasury shares.
(c) Number of outstanding shares by reference price at period end.

 

   Data on Eni share placement

  

1995

  

1996

  

1997

  

1998

  

2001
Offer price   (euro/share)   5.42   7.40   9.90   11.80   13.60
Number of share placed   (million shares)   601.9   647.5   728.4   608.1   200.1
     of which: through bonus share   (million shares)       1.9   15.0   24.4   39.6
Percentage of share capital (a)   (%)   15.0   16.2   18.2   15.2   5.0
Proceeds   (euro million)   3,254   4,596   6,869   6,714   2,721
(a) Refers to share capital at December 31, 2014.

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Contents

Eni Fact Book Eni's business model

   Eni’s business model

 

Eni’s business model targets long-term value creation for its stakeholders by delivering on profitability and growth, efficiency and operational excellence and handling operational risks of its businesses, as well as environmental conservation, and local communities relationships, preserving health and safety of people working in Eni and with Eni, in respect of human rights, ethics and transparency. The main capitals used by Eni (financial capital, productive capital, intellectual capital, natural capital, human   capital, social and relationship capital) are classified in accordance with the criteria included in the "International IR Framework" published by the International Integrated Reporting Council (IIRC). 2014 financial results and sustainability performance rely on the responsible and efficient use of our capitals.

For detailed information on results associated to each capital see the 2014 Integrated Annual Report and the Integrated performance tables.

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Contents

Eni Fact Book Eni's business model

Hereunder is articulated the map of the main capitals exploited by Eni and actions taken in order to achieve the 2015-2018 targets for each business area.
The actions reported below are classified on the basis of four 		  strategic targets which lead Eni’s business and represent the management system of each capital which allow to achieve business goals, on the one hand reducing risks, on the other, increasing profitability.

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Contents

Eni Fact Book Exploration & Production

   Exploration & Production

 

   Key performance indicators
       

2010

  

2011

  

2012

  

2013

  

2014
Injury frequency rate of total Eni workforce   (No. of accidents per million of worked hours)   0.53   0.41   0.34   0.23   0.23
Net sales from operations (a)   (euro million)   29,497   29,121   35,874   31,264   28,488
Operating profit       13,866   15,887   18,470   14,868   10,766
Adjusted operating profit       13,898   16,075   18,537   14,643   11,551
Adjusted net profit       5,609   6,865   7,426   5,950   4,423
Capital expenditure       9,690   9,435   10,307   10,475   10,524
Adjusted ROACE   (%)   16.0   17.2   17.6   13.5   9.5
Profit per boe (b)   ($/boe)   11.9   17.0   16.0   15.5   9.9
Opex per boe (b)       6.1   7.3   7.1   8.3   8.4
Cash Flow per boe (d)       25.5   31.7   32.8   31.9   30.1
Finding & Development cost per boe (c) (d)       19.3   18.8   17.4   19.2   21.5
Average hydrocarbons realizations (d)       55.60   72.26   73.39   71.87   65.49
Production of hydrocarbons(d)   (kboe/d)   1,815   1,581   1,701   1,619   1,598
Estimated net proved reserves of hydrocarbons (d)   (mmboe)   6,843   7,086   7,166   6,535   6,602
Reserves life index (d)   (years)   10.3   12.3   11.5   11.1   11.3
Organic reserves replacement ratio (d)   (%)   127   143   147   105   112
Employees at year end   (number)   10,276   10,425   11,304   12,352   12,777
of which: outside Italy       6,370   6,628   7,371   8,219   8,243
Oil spills due to operations (>1 barrel) (e)   (bbl)   3,820   2,930   3,015   1,728   936
Produced water re-injected   (%)   44   43   49   55   56
Direct GHG emissions   (mmtonnes CO2 eq)   31.46   23.78   28.68   25.90   22.98
of which: from flaring       13.83   9.55   9.46   8.48   5.64
Community investment   (euro million)   72   62   59   53   63
(a) Before elimination of intragroup sales.
(b) Consolidated subsidiaries.
(c) Three-year average.
(d) Includes Eni’s share of equity-accounted entities.
(e) 2010 and 2011 data include also oil spills less than 1 barrel.

 

Performance of the year    
I In 2014, the injury frequency rate confirmed the positive performance reported in 2013.
- Greenhouse gas emissions decreased by 11.3% compared to the previous year (with a 33.5% reduction in emissions from flaring) mainly due to the conclusion of the flaring down project at M’Boundi field in Congo and the ramp-up of relevant projects in Nigeria.
- Oil spills reported a decline from 2013 (with a 46% decrease in oil spills due to operations), while zero blow-outs were recorded for the eleventh consecutive year.
- Continued a positive trend in increasing water reinjection, with a record level of 56%, due among other to the completion of relevant projects, in particular in Nigeria, Egypt, Indonesia and Turkmenistan.
- In 2014, the E&P segment reported a decline of euro 1,527 million, or 25.7% in adjusted net profit compared to a year ago, due to lower crude oil and gas prices in dollar terms (down by 8.9% on average) reflecting the fall of Brent crude benchmark and the weakness of gas market, especially in Europe.
- Oil and natural gas production was 1.598 million boe/d in 2014 (up 		  by 0.6% compared to the previous year), excluding the impact of the divestment of Eni’s interest in Siberian assets.
- Estimated net proved reserves at December 31, 2014 amounted to 6.6 bboe based on a reference Brent price of $101 per barrel. The reserves replacement ratio was 112%. The reserves life index was 11.3 years (11.1 years in 2013).

Exploration activity

I Eni continued its track record of exploratory success. Additions to the Company’s reserve backlog were approximately 900 million boe of resources for the full year, at a competitive cost of $2.1 per barrel. Near-field discoveries marked the year’s activity:
- The Ochigufu 1 NFW well located in the Angolan deep waters of Block 15/06 (Eni operator with a 35% interest). This discovery with a potential in place estimated at approximately 300 million barrels of oil, is located near the West Hub project, which started up at the end of 2014.

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Contents

Eni Fact Book Exploration & Production

- The Minsala Marine 1 NFW in the conventional waters of Block Marine XII (Eni operator with a 65% interest) in Congo, was the third discovery in the last two years increasing the block’s resources in place by 1 billion barrels with characteristics similar to the previous discoveries of Litchendjili and Nené, the latter started up early production in record time.
- The Oglan-2 exploration well in Block 10 (Eni operator with a 100% interest), in Ecuador, with a potential in place estimated at approximately 300 million barrels of oil. The discovery is located near the processing facilities of the operated field of Villano and will be put in production with fast-track development.
- The Merakes 1 NFW gas well in East Sepinggan offshore block (Eni operator with a 85% interest), in Indonesia. This discovery with a potential in place estimated at approximately 2 Tcf, is located in proximity of the operated field of Jangkrik (Eni’s interest 55%), which is currently under development and will supply additional gas volumes to the Bontang LNG plant.
- The conventional waters of Gabon, the Nyonie Deep 1 well in the Block D4 (Eni operator with a 100% interest) showed an estimated potential of approximately 500 million boe in place of gas and condensates.
- The appraisal gas wells Agulha 2 and Coral 4 DIR, confirming the extension of their respective fields with a potential in place in Area 4 (Eni operator with a 50% interest) estimated at approximately 88 Tcf.
- The exploration portfolio was strengthened by means of new exploration acreage covering approximately 100,000 square kilometers net to Eni in the high potential areas such as Myanmar, Portugal, South Africa and Vietnam, as well as legacy areas such as Algeria, China, Egypt, Norway, the United Kingdom and the United States.
- In 2014, exploration expenditure amounted to euro 1,398 million, mainly related to the completion of 44 new exploratory wells (25.8 net to Eni). The overall commercial success rate was 31.3% (38.0% net to Eni). In addition, 101 exploratory wells drilled are in progress at year end (42.2 net to Eni).

Sustainability and portfolio
developments

I The West Hub Development project in Block 15/06 (Eni operator with a 35% interest) achieved the first oil late in 2014. This is the first Eni-

   operated project in Angola and is currently flowing at 45 kbbl/d, with production ramp-up expected to reach a plateau of up to 100 kbbl/d in the coming months. The start-up was achieved in just 44 months from the announcement of the commercial discovery, a result that is at the top of the industry among deep waters developments.
- Production start-up achieved at the recent Nené discovery in Block Marine XII (Eni operator with a 65% interest) in Congo, just 8 months after obtaining the production permit. The early production phase is yielding 7.5 kboe/d and the fast-track development of the field has leveraged on the synergies with the front-end loading and the infrastructures of the fields located in the area. The full-field development will take place in several stages, with a plateau of over 120 kboe/d.
- Sanctioned the integrated oil and gas project of the Offshore Cape Three Points (Eni operator with a 47.22% interest) in Ghana. First oil is expected in 2017, first gas in 2018 and production is expected to peak at 80 kboe/d.
- Projects to promote local development and to support local communities progressed with programs in educational services, improving sanitary condition, access to water, socio-economic development activities, in particular in Congo, Ecuador, Indonesia, Iraq, Italy, Kazakhstan, Mozambique, Nigeria and Norway. In addition, the construction of educational facilities and programs of access to water were performed in Pakistan, projects of employment and local business development in particular in Tunisia and Australia, as well as activities of enhancement of cultural and environmental heritage.
- The Petroleum Technology Association of Nigeria recognized two Eni’s subsidiaries as the best organizations to promote local content in the oil&gas sector in Nigeria (Local Content Operator). This award reaffirmed Eni’s commitment in the implementation of effective initiatives to boost local economic activities also to achieve the high standard requirements in the oil&gas sector.
- Performed with the support of the Danish Institute for Human Rights and in line with the UN Guiding Principles on Business and Human Rights a preliminary assessment of the potential impacts of natural gas development on human rights in Mozambique.
- Development expenditure was euro 9,021 million (up by 5.1% from 2013) to fuel the growth of major projects and to maintain production plateau particularly in Norway, Angola, Congo, the United States, Italy, Nigeria, Egypt, Indonesia and Kazakhstan.
- In 2014, overall R&D expenditure of the Exploration & Production segment amounted to euro 83 million (euro 87 million in 2013).

 

     Strategy    
   
Upstream growth model will continue to focus on conventional assets, which will be organically developed, with a large resource base and a competitive cost structure, which make them profitable even in a low price environment.
The sizeable exploration successes of the last years have increased the Company’s resource base, contributing to the Company’s value generation through the early monetization of the discovered resources in excess of the target replacement ratio.
Eni’s top priorities are the increase and valorization of discovered resources and a growing cash generation.
The drivers to target the increase and valorization of discovered resources are: (i) re-balancing of exploration activities with a focus on near-field initiatives, with the objective of delivering 2 billion boe of discovered resources at a competitive cost of $2.6 per bbl; (ii) renewal of the portfolio of exploration leases by focusing on high materiality play; and (iii) fast-track development of discovered resources by optimizing the time-to-market and exercising tight control on project execution.
Cash generation will be driven by: (i) production growth at an annual rate of 3.5% leveraging on a robust pipeline of projects with an average break-even of $45 per bbl which together with the ramp-ups at fields started up in 2014 will add more than 650 kboe/d in 2018. This new production

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Contents

Eni Fact Book Exploration & Production

will bring an additional cumulative cash flow of euro 19 billion in the 2015-2018 plan period. Main start-ups are the Goliat field (Eni operator with a 65% interest) in the Barents Sea in Norway, the oil and gas project of Offshore Cape Three Points (Eni operator with a 47.22% interest) in Ghana, the Jangkrik project (Eni operator with a 55% interest) in Indonesia and production re-start of Kashagan field (Eni’s interest 16.81%) by the end of 2016; (ii) project modularization and phasing which will enable the Company to reduce financial exposure and to accelerate production start-ups; (iii) strengthened efficiency by means of several initiatives to reduce operating costs, to be achieved also by renegotiating the supply of field services and goods; and (iv) early monetization of part of discovered volumes.
Eni acknowledges that the upstream performance could be adversely impacted in the short-to-medium term by a number of risks: (i) the commodity risk related to current trends in crude oil prices. Eni is planning to mitigate this risk by implementing initiatives of rationalization and optimization, the renegotiation of contractual terms with contractors to align costs of field services and goods to the changed market conditions. In 2015-2018 plan period, Eni estimates a decrease of approximately 13% of capital expenditure net of exchange rate effects versus the previous four year plan due to a reduction in exploration expenditure which will be focused on near-field and appraisal activities, the re-phasing of projects yet to be sanctioned and service contract renegotiations. In addition, Eni intends to reduce operating costs by 7% versus the old plan; (ii) the political risk due to social and political instability in certain countries of operations. A major part of Eni’s activities are currently located in countries that are far from high-risk areas and Eni plans to growth mainly in countries with low-mid political risk (approximately 90% of the capital expenditure of the four-year plan); (iii) risk related to the growing complexity of certain projects due to technological and logistic issues. Eni plans to counteract those risks by strict selection of adequate contractors, tight control of the time-to-market and the retaining of the operatorship in a large number of projects (84% of production related to start-ups); and (iv) the technical risk related to the execution of drilling activities at high pressure/high temperature wells and deep waters wells (24% of planned wells to be drilled in 2015). Eni plans to increase operatorship of critical projects ensuring better direct control and deploying its high operational standards.

Activity areas

n  Italy
Eni has been operating in Italy since 1926. In 2014, Eni’s oil and gas production amounted to 179 kboe/d. Eni’s activities in Italy are deployed in the Adriatic and Ionian Sea, the Central Southern Apennines, mainland and offshore Sicily and the Po Valley, on a total developed and undeveloped acreage of 21,463 square kilometers (17,297 square kilometers net to Eni).
Eni’s exploration and development activities in Italy are regulated by concession contracts (54 operated onshore and 64 operated offshore) and exploration licenses (12 onshore and 9 offshore).		     
Adriatic and Ionian Sea
Production Fields in the Adriatic and Ionian Sea accounted for 46% of Eni’s domestic production in 2014, mainly gas. Main operated fields are Barbara, Annamaria, Angela-Angelina, Porto Garibaldi, Cervia, Bonaccia, Luna and Hera Lacinia. Production is operated by means of 71 fixed platforms (3 of these are manned) installed on the main fields, to which satellite fields are linked by underwater infrastructures. Production is carried by sealine to the mainland where it is input in the national gas network. The system is subject

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Contents

Eni Fact Book Exploration & Production

continuously to rigorous safety control, maintenance activities and production optimization, in particular at the Barbara, Armida, Cervia, Clara, Arianna, Regina and Torrente Tona fields.
Development Main development activities concerned the completion of development activities to achieve start-up of the Fauzia and Elettra fields located in the Adriatic Sea, as well as ongoing maintenance and efficiency improvement activities on Italian energetic grid.
Ongoing activities progressed to perform the environmental monitoring, protection and clean-up of the Adriatic coastal area in cooperation with the district of Ravenna.
Exploration Exploration activities concerned areas nearby producing fields with identification of possible near field opportunities.

Central Southern Apennines
Production Eni is the operator of the Val d’Agri concession (Eni’s interest 60.77%) in the Basilicata Region. Production from the Monte Alpi, Monte Enoc and Cerro Falcone fields is treated by the Viggiano oil center. In 2014, the Val d’Agri concession accounted for 40% of Eni’s production in Italy.
Development Development plan is progressing in line with the commitments agreed with the Basilicata Region in 1998: (i) the construction of a new gas treatment unit is designed to improve the environmental performance of the treatment center; (ii) continuous improvement of the Environmental Monitoring Plan, which represents a benchmark in terms of environmental protection. This was underpinned by an Action Plan for Biodiversity in Val d’Agri; and (iii) programs to support a cultural and social development, tourism, as well as development of agricultural and food farming businesses.
Exploration Eni is currently performing activities to assess the residual mineral potential in the area.

Sicily
Production Eni is the operator of 12 production concessions onshore and 3 production concessions offshore in Sicily, which in 2014 accounted for approximately 11% of Eni’s production in Italy. The main fields are Gela, Ragusa, Tresauro, Giaurone, Fiumetto and Prezioso.
In November 2014, Eni signed a Memorandum of Understanding with the Ministry of Economic Development, Confindustria and other local public bodies to promote and support integrated Oil & Gas business initiatives with socio-economic project in the area in order to ensure an economic sustainable value in the long-term.

n  Rest of Europe

Norway
Eni has been operating in Norway since 1965. Eni’s activities are performed in the Norwegian Sea, in the Norwegian section of the North Sea and in the Barents Sea over a developed and undeveloped acreage of 11,404 square kilometers (3,672 square kilometers net to Eni). Eni’s production in Norway amounted to 112 kboe/d in 2014.
Exploration and production activities in Norway are regulated by Production Licenses (PL). According to a PL, the holder is entitled to perform seismic surveys and drilling and production activities for a given number of years with possible extensions.

Norwegian Sea
Production Eni currently holds interests in 10 production areas. The principal producing fields are Åsgard (Eni’s interest 14.82%), Kristin (Eni’s interest 8.25%), Heidrun (Eni’s interest 5.17%), Mikkel (Eni’s

 

interest 14.9%), Tyrihans (Eni’s interest 6.2%), Marulk (Eni operator with a 20% interest) and Morvin (Eni’s interest 30%) which in 2014 accounted for 74% of Eni’s production in Norway. The gas produced in the area is collected at the Åsgard facilities, carried by pipeline to the Karsto treatment plant and then delivered to the Dornum terminal in Germany. Liquids recovered in the area mainly through FPSO units are sold FOB.
Development Development activities progressed to production optimization of the Midgard (Eni’s interest 14.9%) and Mikkel fields.
Exploration Eni holds interests in 31 Prospecting Licenses ranging from 5% to 50%, 4 of these are operated.

Norwegian section of the North Sea
Production Eni holds interests in 2 production licenses. The main producing field is Ekofisk (Eni’s interest 12.39%) in PL 018, which in 2014 produced approximately 24 kboe/d net to Eni and accounted for 21% of Eni’s production in Norway. Production from Ekofisk and satellites is carried by pipeline to the Teesside terminal in the United Kingdom for oil and to the Emden terminal in Germany for gas.
Development Development activities progressed to maintain and optimize production at the Ekofisk field by means of drilling of infilling wells, upgrading of existing facilities and optimization of water injection.
Exploration Eni holds interests in 7 Prospecting Licenses ranging from 12.39% to 45%, of which one as operator.
In January 2015, Eni was awarded a 13.12% interest in the PL 044C license.

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Contents

Eni Fact Book Exploration & Production

Barents Sea
Eni is currently performing exploration and development activities in the Barents Sea. Eni holds interests in 18 prospecting licenses, 13 of these are operated. Barents Sea is a strategic area with a huge resource base, which will be developed in compliance with the tightest environmental and safety standards provided for the people and environment protection, considering the fragile ecosystem.
Development Operations have been focused on developing the Goliat discovery made in 2000 at a water depth of 370 meters in PL 229 (Eni operator with a 65% interest). Start-up is expected in the second half of 2015, with a production plateau at approximately 65 kboe/d net to Eni in 2016.
During the year, the implementation of an oil spill contingency and response plan progressed by developing techniques and methodologies in response to oil spills. The performed activities in the drilling phases were acknowledged by the Norwegian Authorities as the benchmark for oil spill reaction in the coastal areas. The project was launched by Eni and its partner in the program jointly with the Norwegian Clean Seas Association for Operating Companies (NOFO) and involved other oil companies operating in the oil and gas exploration in the Barents Sea, as well as local and international research institutes. The achieved results were presented to the Norwegian Environmental Agency, the local administrations and all stakeholders. These results reaffirmed that the Goliat project is equipped with a well-advance emergency system for the management of oil spills, in terms of organization, consolidation of the emergency apparatus, as well as equipment and technology advancement.
Other ongoing activities concerned programs of enhancement of

  cultural heritage of Sami local community and of technical and professional skills development of local communities.
Exploration Exploration activities yielded positive results with the oil and gas Drivis discovery made at the offshore license PL 532 (Eni 30%), with volumes in place estimated in a range of 125 to 140 million barrels. The discovery will be put into production with the recent oil and gas discoveries of Skrugard, Havis and Skavl by means of the development of the integrated Johan Castberg Hub. The total recoverable resources of the license are estimated at over 600 million barrels at 100%.
In January 2015, Eni was awarded the operatorship and a 40% interest in the PL 806 license.

United Kingdom
Eni has been present in the United Kingdom since 1964. Eni’s activities are carried out in the British section of the North Sea, the Irish Sea and Atlantic Ocean, over a developed and undeveloped acreage of 1,284 square kilometers (744 square kilometers net to Eni). In 2014, Eni’s net production of oil and gas averaged 71 kboe/d (the portion of liquids was approximately 43%).
Exploration and production activities in the United Kingdom are regulated by concession contracts.
Production Eni currently holds interests in 5 production areas of which the Liverpool Bay is operated by Eni with a 100% interest (the acquisition of the assets was completed in April 2014) and Hewett Area is operated with an 89.3% interest. The other fields are Elgin/Franklin (Eni’s interest 21.87%), J-Block and Jasmine (Eni’s interest 33%), Jade (Eni’s interest 7%) and MacCulloch (Eni’s interest 40%), which in 2014 accounted for 66% of Eni’s production in the Country.
Development Development activities mainly concerned: (i) production start-up of the West Franklin field (Eni’s interest 21.87%) with the

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Contents

Eni Fact Book Exploration & Production

completion of the Phase 2 development program by means of the installation of production platform and pipeline connection to the treatment facility in the area; and (ii) production ramp-up of the Jasmine project (Eni’s interest 33%) with the completion of commissioning and start-up of 4 additional production wells.
Exploration Eni holds interests in 11 exploration blocks ranging from 7% to 50%, in 2 of these Eni is operator.
Exploration activities yielded positive results with the Romeo North discovery, already linked to the production platform of the Jade field.
During the year Eni was awarded the operatorship of the 22/19c (Eni’s interest 50%), 22/19e (Eni’s interest 57.14%) and 30/1b (Eni’s interest 100%) exploration blocks in the North Sea.

n  North Africa

Algeria
Eni has been present in Algeria since 1981. In 2014, Eni’s oil and gas production amounted to 109 kboe/d. Developed and undeveloped acreage of Eni’s interests in Algeria was 3,409 square kilometers (1,179 square kilometers net to Eni).
Operated and participated activities are located in the Bir Rebaa desert, in the Central-Eastern area of the Country: (i) Blocks 403a/d (Eni’s interest from 65% to 100%); (ii) Block Rom North (Eni’s interest 35%); (iii) Blocks 401a/402a (Eni’s interest 55%); (iv) Blocks 403 (Eni’s interest 50%); (v) Block 405b (Eni’s interest 75%); and (vi) Block 212 (Eni’s interest 22.38%) with discoveries already made. In addition Eni holds interest in the non-operated block 404 and block 208 with a 12.25% stake.
Eni was granted three prospection permits in the Timimoun and Oued Mya areas, in southern onshore Algeria. The agreements expire in two years and cover a total acreage of 46,837 square kilometers. The program includes studies and drilling of prospection wells to assess the mineral potential.
Exploration and production activities in Algeria are regulated by PSAs and concession contracts.

Blocks 403a/d and Rom Nord
Production Main producing fields are HBN and Rom and satellite which represented approximately 20% of Eni’s production in Algeria in 2014. Production from Rom and satellites (Zea, Zek and Rec) is treated at the Rom Central Production Facilities (CPF) and sent to the BRN treatment plant for final treatment, while production from the HBN field is treated at the HBN/HBNS oil center operated by the Groupment Berkine.

Blocks 401a/402a
Production Main producing fields are ROD/SFNE and satellite which accounted for approximately 14% of Eni’s production in Algeria in 2014. Activities are being performed in order to maintain the current production plateau.

Block 403
Production The main fields in block 403 are BRN, BRW and BRSW which accounted for approximately 11% of Eni’s production in the Country in 2014.

Block 404
Production The main fields in block 404 are HBN and HBNS which accounted for approximately 25% of Eni’s production in the Country in 2014.

   Block 405
Production Main producing asset is the MLE-CAFC project which accounted for approximately 15% of Eni’s production in the Country in 2014. The natural gas treatment plant has a production and export capacity of 320 mmcf/d of gas, 15 kbbl/d of oil and condensates and 12 kbbl/d of LPG. Four export pipelines link it to the national grid system.
Development Development and optimization activities progressed at the MLE-CAFC project. Activities include an additional oil phase with start-up expected in 2017, targeting a production plateau of approximately 33 kboe/d net to Eni.

Block 208
Production The El Merk field is the main production project in the area and accounted for approximately 15% of Eni’s production in the Country in 2014. Production is treated by means of a gas treatment plant for approximately 600 mmcf/d and two oil trains for 65 kbbl/d each.
Production ramp-up was completed in the year with a production plateau target of approximately 18 kboe/d net to Eni.

Egypt
Eni has been present in Egypt since 1954. In 2014, Eni’s share of production in this Country amounted to 206 kboe/d and accounted for 13% of Eni’s total annual hydrocarbon production. Developed and undeveloped acreage in Egypt was 11,726 square kilometers (4,946 square kilometers net to Eni). Eni’s main producing liquid fields are located in the Gulf of Suez, primarily the Belayim field (Eni’s interest 100%), and in the Western Desert mainly the Meleiha (Eni’s interest 76%) and the Ras Qattara (Eni’s interest 75%) concessions. Gas production mainly comes from the operated or participated concession of North Port Said (Eni’s interest 100%), El Temsah (Eni’s interest 50%), Baltim (Eni’s interest 50%) and Ras el Barr (Eni’s interest 50%, non operated), located offshore the Nile Delta. In 2014, production from

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these large concessions accounted for approximately 94% of Eni’s production in the Country.
In March 2015, Eni and the Egyptian Ministry of Petroleum and Mineral Resources signed a framework agreement to develop the oil and gas resources in the Country with an estimated investment of $5 billion at 100%. The investments, which will be utilized through the realization of projects to be implemented in the next 4 years, are directed to the development of 200 mm/bbl of oil and 1.3 Tcf of gas.
In 2014, Eni was awarded: (i) the operatorship of the South-West Meleiha onshore exploration licenses (Eni’s interest 100%), nearby the Meleiha concession, and the Block 9 (Eni’s interest 100%) and Block 8 (Eni’s interest 50%) located in the deep offshore of the Mediterranean Sea. The closing was achieved in the early 2015 with the ratification of the relevant concession agreements; and (ii) the Shorouk concession (Eni’s interest 100%) in the deep offshore of the Mediterranean Sea.
Exploration and production activities in Egypt are regulated by PSAs.

Gulf of Suez
Production Production mainly comes from the Belayim field, Eni’s first large oil discovery in Egypt, which produced approximately 101 kbbl/d (52 kboe/d net to Eni) in 2014.
Development Drilling and infilling activities were carried out in the Belayim area, in order to optimize the recovery of its mineral potential.
Exploration Exploration activities yielded positive results with the oil discovery ARM-14 in the Abu Rudeis license (Eni’s interest 100%). The discovery was linked to the nearby production facilities and a double production level was achieved in 2014.

   Nile Delta
North Port Said
Production Production for the year amounted to approximately 30 kboe/d (approximately 24 kboe/d net to Eni), approximately 141 mmcf/d of natural gas and approximately 3 kbbl/d of condensates. Part of the production of this concession is supplied to the United Gas Derivatives Co (Eni’s interest 33.33%) with a treatment capacity of 1.3 bcf/d of natural gas and a yearly production of 380 ktonnes of propane, 305 ktonnes of LPG and 1.5 mmbbl of condensates.
Development Ongoing development activities aimed at supporting current gas production.

Baltim
Production In 2014, production amounted to approximately 53 kboe/d (approximately 17 kboe/d net to Eni); approximately 247 mmcf/d of natural gas and 7 kbbl/d of condensates.
Development Ongoing development activities aim at supporting current gas production.

Ras el Barr
Production In 2014, the production amounted to approximately 103 kboe/d (approximately 36 kboe/d net to Eni), mainly gas from Ha’py, Akhen, Taurt and Seth fields.
Development Development activities concerned infilling activities at the Ha’py field to optimize the mineral potential recovery factor. During the year the END Phase 3 sub-sea project was started up.

El Temsah
Production This concession includes the Temsah, Denise and Tuna fields. Production in 2014 amounted to approximately 135 kboe/d (approximately 41 kboe/d net to Eni); approximately 212 mmcf/d of natural gas and approximately 2 kbbl/d of condensates net to Eni.
In August 2014, the DEKA project started up with a production of approximately 64 mmcf/d of gas and 800 bbl/d of associated condensates. Produced gas is being processed at the onshore El Gamil plant. Peak production of approximately 230 mmcf/d net to Eni was achieved by the first quarter of 2015.
Development Development activities included infilling activities in order to optimize the mineral potential recovery factor.

Western Desert
Production Other operated production activities are located in the Western Desert, in particular in the Meleiha, Ras Qattara, West Abu Gharadig (Eni’s interest 45%) and West Razzak (Eni’s interest 100%) development permits containing mainly oil. Concessions in the Western Desert accounted for approximately 13% of Eni’s production in Egypt in 2014.
Development Development activities included infilling activities in order to optimize the mineral potential recovery factor.
Exploration Exploration activities yielded positive results with the oil discovery West Deep in the Meleiha concession that flowed at approximately 2 kbbl/d in test production. The discovery confirms the mineral potential of the deep area in the western desert which was identified leveraging on the application of the e-dvatm proprietary technology for processing seismic 3D imaging. Additional delineation and development wells will be drilled to achieve a production level of approximately 8 kbbl/d by the end of 2015. The discovery is characterized by a fast time-to-market and are in line with Eni’s strategy of focusing on high value exploration activities and synergic assets.

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Libya
Eni started operations in Libya in 1959. Developed and undeveloped acreage in Libya was 26,635 square kilometers (13,294 square kilometers net to Eni). Production activity is carried out in the Mediterranean Sea facing Tripoli and in the Libyan Desert area and includes six contract areas. Onshore contract areas are: (i) Area A consisting in the former concession 82 (Eni’s interest 50%); (ii) Area B, former concession 100 (Bu Attifel field) and the NC125 Block (Eni’s interest 50%); (iii) Area E with El Feel (Elephant) field (Eni’s interest 33.3%); and (iv) Area F with Block 118 (Eni’s interest 50%). Offshore contract areas are: (i) Area C with the Bouri oilfield (Eni’s interest 50%); and (ii) Area D with Blocks NC41 and NC169 (onshore) that feed the Western Libyan Gas Project (Eni’s interest 50%).
In the exploration phase, Eni is operator of four onshore blocks in the Kufra area (186/1, 2, 3 & 4) and in the onshore contract Areas A, B and offshore Area D.
The internal situation in Libya continues to represent an issue to Eni’s management. Following the internal conflict of 2011 and the fall of the regime, which forced the Company to shut down almost all its producing facilities including gas exports for a period of about 8 months, a period of social and political instability began which turned into disorders, strikes, protests and a resurgence of the internal conflict. These events jeopardized Eni’s ability to perform its industrial activity in safety, forcing the Company to interrupt its operations on certain occasions as precautionary measure. These events were fairly frequent in 2013 and sporadic in 2014. In 2014, Eni’s facilities in Libya produced on average 239 kboe/d, registering a small increase compared to 2013. In light of the recent developments in Libya, management decided to strengthen security measures at the Company’s production installations and facilities in the Country. However, we did not suffer any significant production shutdowns in the first part of 2015.

   Exploration and production activities in Libya are regulated by six Exploration and Production Sharing contracts (EPSA). The licenses of Eni’s assets in Libya expire in 2042 and 2047 for oil and gas properties, respectively.
Exploration activities yielded positive results with the B1-16/4 well in the Bahr Essalam South prospects in the offshore Area D that flowed at approximately 35 mmcf/d of natural gas and over 600 bbl/d of condensates in test production.

Tunisia
Eni has been present in Tunisia since 1961. In 2014, Eni’s production amounted to 13 kboe/d. Eni’s activities are located mainly in the Southern Desert areas and in the Mediterranean offshore facing Hammamet, over a developed acreage of 6,464 square kilometers (2,274 square kilometers net to Eni).
Exploration and production in this Country are regulated by concessions.
Production Production mainly comes from operated Maamoura and Baraka offshore blocks (Eni’s interest 49%) and the Adam (Eni operator with a 25% interest), Oued Zar (Eni operator with a 50% interest), Djebel Grouz (Eni operator with a 50% interest), MLD (Eni’s interest 50%) and El Borma (Eni’s interest 50%) onshore blocks.
Development Production optimization represents the main activity currently performed in the above listed concessions to mitigate the natural field production decline.
The Titan project progressed at the Tataouine area in order to improve youth employment in tourism and agriculture.

n  Sub-Saharan Africa

Angola
Eni has been present in Angola since 1980. In 2014, Eni’s production amounted to 84 kboe/d. Eni’s activities are concentrated in the conventional and deep offshore, over a developed and undeveloped acreage of 21,160 square kilometers (4,327 square kilometers net to Eni). The main Eni’s asset in Angola is the Block 15/06 (Eni operator with a 35% interest) where the West Hub project started up in 2014 and other development projects are underway.
Eni participates in other producing blocks: (i) Block 0 in Cabinda (Eni’s interest 9.8%) North of the Angolan coast; (ii) Development Areas in the former Block 3 (Eni’s interest 12%) offshore the Congo Basin; (iii) Development Areas in the Block 14 (Eni’s interest 20%) in the deep offshore west of Block 0; and (iv) Development Areas in the former Block 15 (Eni’s interest 20%) in the deep offshore of the Congo Basin.
Eni retains interests in other non-producing concessions, particularly the Lianzi Development Area (Block 14K/A Imi Unit Area - Eni’s interest 10%), Block 35/11 (Eni operator with a 30% interest) and in Block 3/05-A (Eni’s interest 12%), onshore Cabinda North (Eni’s interest 15%) and the Open Areas of Block 2 awarded to the Gas Project (Eni’s interest 20%).
In November 2014, Eni signed with the national oil company Sonangol a strategic agreement on future co-operation activities. In particular, the agreement includes the studies to analyze the potential of the non-associated gas present in the Lower Congo Basin and offshore Angola. The project scope is to analyze the different options both internationally and in the domestic market, also in order to sustain the local economy. In addition, the companies will asses possible projects on the mid-downstream business to be carried out in the Country.
Exploration and production activities in Angola are regulated by concessions and PSAs.

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Block 0
Production Block 0 is divided into Areas A and B. In 2014, production from this block amounted to approximately 292 kbbl/d (approximately 29 kbbl/d net to Eni). Oil production from Area A, deriving mainly from the Takula, Malongo and Mafumeira fields amounted to approximately 18 kbbl/d net to Eni. Production of Area B derives mainly from the Bomboco, Kokongo, Lomba, N’Dola, Nemba and Sanha fields, and amounted to approximately 11 kbbl/d net to Eni.
Development The main development activities performed in the year concerned: (i) the progress of the Nemba field project to reduce flaring gas. In 2015, once the project is completed, flared gas is expected to decrease by approximately 85% from current level; (ii) the Mafumeira Sul field (Eni’s interest 9.8%) with start-up expected in 2016.
Infilling activities and near-field exploration are underway on the whole block in order to mitigate the natural field production decline.
Exploration Exploration activities yielded positive results with the appraisal of the Pinda Fm discovery.

Block 3
Production Block 3 is divided into three production offshore areas. Oil production is treated at the Palanca terminal and delivered to storage vessel unit and then exported. In 2014, production from this area amounted to approximately 51 kbbl/d (approximately 4 kbbl/d net to Eni).
Development Activities concerned the Caco-Gazela area with start-up in the first months of 2015. Development scheme is underway at the Punja area.

   Block 14
Production In 2014, Development Areas in Block 14 produced approximately 122 kbbl/d (approximately 16 kbbl/d net to Eni), accounting for approximately 15% of Eni’s production in the Country. It is one of the most fruitful areas in the West African offshore, recording 9 commercial discoveries to date. Its main fields are Kuito, Landana and Tombua, as well as Benguela-Belize/Lobito-Tomboco. Associated gas of the area will be re-injected in the Nemba reservoir and later it will be delivered via a transport facility to the A-LNG liquefaction plant (see below).
Development The main development activities performed in the year concerned the Lianzi project in the Block 14K/A Imi Unit Area (Eni’s interest 10%), with start-up expected in the second half of 2015 and production plateau of 35 kboe/d. Concept definition studies of Malange discovery are underway.

Block 15
Production The Block produced approximately 340 kbbl/d (approximately 32 kbbl/d net to Eni) in 2014. Block 15 is considered the most interesting area in the West African offshore with recoverable reserves estimated at 2.55 bbbl of oil. Production derives mainly from the Kizomba discovery area with: (i) the Hungo/Chocalho fields, started-up in 2004 as part of phase A of the global development plan of the Kizomba reserves; (ii) the Kissanje/Dikanza fields, started up in 2005, as part of Phase Kizomba B; (iii) satellites Kizomba Phase 1 project, started-up in 2012. These fields are operated by FPSO units.
In 2014, the fields of Kizomba area produced approximately 250 kbbl/d (approximately 24 kbbl/d net to Eni). Other main fields in Block 15 are Mondo and Saxi/Batuque fields which produced approximately 96 kbbl/d (approximately 8 kbbl/d net to Eni) in 2014.
In the medium term, phased development of satellite discoveries will maintain the current production plateau of the area.
Development Activities concerned the Kizomba satellites Phase 2 project. The project provides to put into production three additional discoveries that will be linked to the existing FPSO. Start-up is expected in 2015, with a production plateau of 70 kboe/d in 2016.

Block 15/06
The activities concerned to put in production approximately 450 mmbbl of reserves by means of the development of West Hub projects, sanctioned in 2010, and East Hub project, sanctioned in September 2013.
In December 2014, first oil was achieved at the West Hub Development Project in Block 15/06 in the deep offshore. This first Eni-operated producing project in the country is currently producing 45 kboe/d through the N’Goma FPSO, with a production ramp-up expected to reach a plateau up to 100 kboe/d in the coming months. The start-up was achieved in just 44 months from the announcement of the commercial discovery, a result that is at the top of the industry for development in deep waters. The N’Goma FPSO is currently producing from the Sangos discovery, future production will leverage the progressive hooking up of the Block’s discoveries.
The East Hub project with start-up expected in 2017 will develop the reservoir in the north-eastern area by means of a development program similar to the West Hub.
Exploration activities yielded positive results with the Ochigufu 1 NFW discovery in the deep water of the block with a potential in place estimated at approximately 300 million barrels of oil, increasing resources of the West Hub project. The exploration activity was performed with an innovative 3D seismic acquisition.

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In January 2015, Eni obtained from the Angolan authorities a three-year extension of the exploration period of the above mentioned block.

The LNG business in Angola
Eni holds a 13.6% interest of the Angola LNG consortium that manages a LNG plant, started up in 2013, with a processing capacity of approximately 1.1 bcf/d of natural gas, producing 5.2 mmtonnes/y of LNG and over 50 kbbl/d of condensates and LPG. The plant envisages the development of 10,594 bcf of gas in 30 years.
Eni is part of the Gas Project (Eni’s interest 20%) that will apprise and explore further potential gas discoveries to support the feasibility of a second LNG train or other alternative projects to market gas and associated liquids.

Congo
Eni has been present in Congo since 1968. In 2014, production averaged 106 kboe/d net to Eni. Eni’s activities are concentrated in the conventional and deep offshore facing Pointe-Noire and onshore over a developed and undeveloped acreage of 4,363 square kilometers (2,883 square kilometers net to Eni).
In July 2014, a cooperation agreement was signed with the relevant authorities and ratified by law to extend existing oil permits and to develop new initiatives in the Country’s coastal basin, which extends from onshore Mayombe to frontage deep waters.
Exploration and production activities in Congo are regulated by Production Sharing Agreements.

   Production Eni’s main operated oil producing interests in Congo are the Zatchi (Eni’s interest 56%), Loango (Eni’s interest 42.5%), Ikalou (Eni’s interest 100%), Djambala (Eni’s interest 50%), Foukanda and Mwafi (Eni’s interest 58%), Kitina (Eni’s interest 52%), Awa Paloukou (Eni’s interest 90%), M’Boundi (Eni’s interest 83%), Kouakouala (Eni’s interest 75%), Zingali and Loufika (Eni’s interest 100%) fields, with an overall production of 76 kboe/d net to Eni. Other relevant producing areas are a 35% interest in the Pointe-Noire Grand Fond, PEX and Likouala permits with a production of 30 kboe/d net to Eni.
At the end of December 2014 was achieved the start-up of the recent Nené Marine discovery in Block Marine XII (Eni operator with a 65% interest) just 8 months after obtaining the production permit. The early production phase is yielding 7,500 boe/d and the fast-track development of the field has leveraged on the synergies with the front-end loading and the infrastructures of the fields located in the area. The full-field development will take place in several stages and will include the installation of production platforms and the drilling of approximately 30 wells, with a plateau of over 120 kboe/d.
Development The flaring down project of the M’Boundi field was completed during the year with a decrease of approximately 64 mmcf in daily volumes of gas flaring, thus achieving the zero flaring target in the area. In particular, the associated gas was fully valorized through: (i) a program of gas injection in order to optimize reserve recovery; and (ii) a long-term supply contract to power plants in the area including the CEC Centrale Electrique du Congo plant (Eni’s interest 20%) with a 300 MW generation capacity. In 2014, M’Boundi contractual supplies were approximately 106 mmcf/d (approximately 17 kboe/d net to Eni). These facilities will also receive volumes of gas from the offshore discoveries of the Block Marine XII in the future.
Project Integrée Hinda (PIH) progressed to support the population in the M’Boundi area. The social project provides to improve education, health, production capacity in agriculture with specific programs and in collaboration with local authorities. Planned activities for the 2011-2015 periods achieved a work progressing of 80% at the end of 2014. The program involved approximately 25,000 people. Eni with the support of the Earth Institute of the Columbia University launched a program to design a monitoring system to assess the effectiveness of the PIH project and to check its support to the development of the area.
In addition, local cultural promotion programs started-up with specific activities in the Pointe-Noire area, Makoua, located in the north of the country and in the capital, Brazzaville.
Development of the Litchendjili sanctioned project progressed in the Marine XII block. The project provides for the installation of a production platform, the construction of transport facilities and onshore treatment plant. Start-up is expected in the second half of 2015 with a peak production of 12 kboe/d net to Eni. Production will also feed the CEC power station.
Exploration Exploration activities yielded positive results in the Marine XII offshore block with: (i) the Nené Marine 3 appraisal well confirming the oil and gas mineral potential of the area; and (ii) the significant Minsala Marine oil discovery with resources in place of approximately 1 billion boe. Exploration activities used the application of the e-dva™ proprietary technology for processing seismic imaging that allowed an optimal positioning of exploration wells.

Mozambique
Eni has been present in Mozambique since 2006. Eni is operator with a 50% interest of Area 4 Block located in the offshore Rovuma Basin, which represents a new frontier in oil and gas industry thanks to extraordinary gas discoveries made during intense only three-year

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exploration campaign. To date, resource base reached 88 Tcf located in the different sections of the area.
During the year, exploration activities yielded positive results with the appraisal gas wells Agulha 2 and Coral 4 DIR, confirming the extension of their respective discoveries. The exploration activity was underpinned by the utilization of the e-dva™ proprietary technology of processing seismic imaging.
The Company is planning to develop as first target the Coral discovery and a portion of the Mamba straddling resources. As part of the Mamba plan, based on the enactment of a law decree which defines the fiscal and contractual regime applicable to onshore liquefaction projects, Eni expects to obtain the necessary authorizations to develop and produce up to 12 Tcf from the straddling reservoir via an independent industrial plan which needs to be coordinated with the operator of Area 1. An Unitization Agreement for the straddling resources has to be agreed among concessionaries of the straddling reservoirs and submitted to the Mozambique Government within six months dating back to the enactment of the special law on onshore projects which occurred in December 2014.
The Coral project scheme comprises construction of a floating unit for the treatment, liquefaction and storage of natural gas (Floating LNG-FLNG) fed by subsea wells. The development plan was formally submitted to the local Authorities at the end of 2014. The FID is expected in the second half of 2015. The award of the relevant EPCIC contracts for the construction, installation and commissioning of the floating unit is expected by the end of 2015. Production start-up is expected for the end of 2019.
The development plan of the first stage of the Mamba project contemplates construction and commissioning of two onshore LNG trains and the drilling of 16 subsea wells, with start-up in 2022. The scheduled activities comprise: (i) the submission of the Declaration of Commerciality to the Government by the third quarter of 2015; (ii) the filing of the development plan by the end of 2015; and (iii) the finalization of the commercial agreements and the project financing by the first quarter of 2016. The FID is expected in 2016-2017.
In October 2014, Eni signed with the South Korean Company KOGAS a cooperation agreement for jointly development opportunities in the upstream and LNG areas, in particular in the Area 4 in Mozambique.
Leveraging on Eni’s cooperation model, a medium-long term program was defined to support local communities also involving all local stakeholders as part of the development activity of the gas discoveries in the Country. The guideline of the program includes projects to develop the socio-economic conditions of local communities and respect for biodiversity. In particular, during 2014 certain projects were completed in the Pemba area in order to: (i) support the access to education, with the construction of a primary school; (ii) develop training activities in collaboration with National Institute for Employment and Vocational Training (INEFP) also supplying educational materials; and (iii) enhance the national health service, also with the restructuring of some hospital departments and specific course dedicated to health staff.
In the Pemba area ongoing activities also concerned: (i) access to water with construction of a supply system for approximately 4,000 people; and (ii) studies of access to energy for rural communities also with renewable energy supplies. In addition, the construction of a gas fired power plant for domestic consumption is being planned with the support of the Mozambican Government.
Eni performed with the support of the Danish Institute for Human Rights and in line with the UN Guiding Principles on Business and Human Rights a preliminary assessment of the potential impacts of the natural gas development projects on human rights in the Country.		   Nigeria
Eni has been present in Nigeria since 1962. In 2014, Eni’s oil and gas production amounted to 135 kboe/d over a developed and undeveloped acreage of 36,123 square kilometers (7,638 square kilometers net to Eni) located mainly in the onshore and offshore of the Niger Delta.
In the development/production phase Eni operates onshore Oil Mining Leases (OML) 60, 61, 62 and 63 (Eni’s interest 20%) and offshore OML 125 (Eni’s interest 85%) and OPL 245 (Eni’s interest 50%), holding interests in OML 118 (Eni’s interest 12.5%) and in OML 116 and 119 Service Contracts. As partners of SPDC JV, the largest joint venture in the Country, Eni also holds a 5% interest in 21 onshore blocks and in 5 conventional offshore blocks.
In the exploration phase Eni operates offshore OML 134 (Eni’s interest 85%) and OPL 2009 (Eni’s interest 49%); onshore OPL 282 (Eni’s interest 90%) and OPL 135 (Eni’s interest 48%). Eni also holds a 12.5% interest in OML 135.
The project of the Kwale-Akri pipeline in the Niger Delta is almost completed. The e-vpms™ (eni-vibroacoustic pipeline monitoring system) proprietary technology installed with the aim of identify leaks in real time and significantly reducing bunkering.
During the year, supporting programs for the local community progressed with main activities in the construction of public infrastructure, improving the quality of education services, enhancing of basic health services, expanding the access to energy for local area, as well as training programs to promote the economic development, in particular in the agricultural sector.
Eni launched a website to report the sustainability activity performed in the Country. In particular, information and data related to oil spills, gas flared emissions and a summary on the environmental impact studies are available.
In 2014, the Petroleum Technology Association of Nigeria recognized two Eni’s subsidiaries as the best organizations to promote local content in the oil and gas sector in Nigeria (Local Content Operator). This award reaffirmed the Eni’s commitment in the implementation of effective initiatives to boost local economic activities also to achieve the high standard requirements in the oil and gas sector.
Exploration and production activities in Nigeria are regulated mainly by production sharing agreements and concession contracts, as well as service contracts, in two blocks, where Eni acts as contractor for state-owned company.

Blocks OMLs 60, 61, 62 and 63
Production Onshore four licenses produced approximately 59 kboe/d and accounted for over 40% of Eni’s production in Nigeria in 2014. Liquid and gas production is supported by the NGL plant at Obiafu-Obrikom with a treatment capacity of approximately 1 bcf/d and by the oil tanker terminal at Brass with a storage capacity of approximately 3.5 mmbbl. A large portion of the gas reserves of these four OMLs is destined to supply the Bonny Island liquefaction plant (see below). Another portion of gas production is employed in firing the combined cycle power plant at Kwale-Okpai with a 480 MW generation capacity. In 2014, supplies to this power station were an overall amount of approximately 70 mmcf/d, corresponding to approximately 12 kboe/d (approximately 2 kboe/d net to Eni).
Development The treatment and re-injection of produced water program started up at the Ebocha flowstation in the OML 61 block. The project provides for the treatment of 60 kbbl/d of produced water. Associated gas program progressed with further reductions of gas flared.

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Block OML 118
Production The Bonga oil field produced approximately 15 kbbl/d of oil net to Eni in 2014. Production is supported by an FPSO unit with a 225 kbbl/d treatment capacity and a 2 mmbbl storage capacity. Associated gas is carried to a collection platform on the EA field and, from there, is delivered to the Bonny liquefaction plant.
In the year production start-up was achieved at the Bonga NW field with the drilling and completion of 4 production and 2 injection wells.

Block OML 119
Production Production derived mainly from the Okono/Okpoho fields which yielded approximately 1 kbbl/d of oil net to Eni in 2014. Production is supported by an FPSO unit with an 80 kbbl/d treatment capacity and a 1 mmbbl storage capacity.

Block OML 116
Production Production derived mainly from the Agbara field which yielded approximately 2 kbbl/d of oil net to Eni in 2014.

Block OML 125
Production Production derived mainly from the Abo field which yielded approximately 20 kbbl/d of oil net to Eni in 2014. Production is supported by an FPSO unit with a 45 kbbl/d capacity and an 800 kbbl storage capacity.
Exploration Exploration activities yielded positive results with the Abo 12 oil well. The discovery will be linked to facilities of Abo field during 2015.

   SPDC Joint Venture (NASE)
In 2014, production from the SPDC JV accounted for approximately 27% of Eni’s production in Nigeria (36 kboe/d).
Development activities progressed at the OML 28 block: (i) the drilling campaign progressed within the integrated oil and natural gas project in the Gbaran-Ubie area. The development plan provides for the supply of natural gas to the Bonny liquefaction plant by means of the construction of a Central Processing Facility (CPF) with a treatment capacity of approximately 1 bcf/d of gas and 120 kbbl/d of liquids; and (ii) the development plan of the Forkados-Yokri field includes the drilling of 24 producing wells, the upgrading of existing flowstations and the construction of transport facilities. Start-up is expected in 2015.

The LNG business in Nigeria
Eni holds a 10.4% interest in the Nigeria LNG Ltd joint venture, which runs the Bonny liquefaction plant, located in the Eastern Niger Delta. The plant has a design treatment capacity of approximately 1,236 bcf/y of feed gas corresponding to a production of 22 mmtonnes/y of LNG on six trains. The seventh unit is being engineered as it is in the planning phase. When fully operational, total capacity will amount to approximately 30 mmtonnes/y of LNG, corresponding to a feedstock of approximately 1,624 bcf/y. Natural gas supplies to the plant are provided under gas supply agreements with a 20-year term from the SPDC JV and the NAOC JV, the latter operating the OMLs 60, 61, 62 and 63 blocks with an overall amount of approximately 2,825 mmcf/d (approximately 268 mmcf/d net to Eni corresponding to approximately 49 kboe/d). LNG production is sold under long-term contracts and

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exported to European, Asian and US markets by the Bonny Gas Transport fleet, wholly owned by Nigeria LNG Co.

n  Kazakhstan

Eni has been present in Kazakhstan since 1992. Eni co-operates the Karachaganak producing field and is a partner of the consortium of the North Caspian Sea PSA (NCSPSA) to develop the Kashagan field.
In June 2014, Eni signed a strategic agreement with Kazakh state-owned company KazMunayGas (KMG) for the exploitation of exploration and production rights in Isatay, an offshore area of high potential located in the north Caspian Sea. KMG and Eni each will held 50% of exploration and production rights. The agreement also involves the construction of a shipyard project in Kuryk.

Kashagan
Eni holds a 16.81% working interest in the North Caspian Sea Production Sharing Agreement. The NCSPSA defines terms and conditions for the exploration and development of the giant Kashagan field which was discovered in the Northern section of the contractual area in the year 2000 over an undeveloped area extending for approximately 4,600 square kilometers. The NCSPSA will expire at the end of 2041.
The exploration and development activities of the Kashagan field and the other discoveries made in the contractual area are executed through an operating model which entails an increased role of the Kazakh partner and defines the international parties’ responsibilities in the execution of the subsequent development phases of the project.
During the course of 2014, the Consortium performed an assessment of the technical issues which forced the operator to shut down the production at the Kashagan field soon after the production start-up with the effective completion of Phase 1 of the

  development plan (the Experimental Program). The findings of the assessment confirmed the necessity to fully replace the damaged pipelines. The Consortium recently finalized the contracts for the replacement of both oil and gas lines. The Consortium expects to complete the installation works in the second half of 2016 with production re-start by the end of 2016. The planned production rate will be achieved during 2017.
The Phase 1 is targeting an initial production capacity of 180 kbbl/d; when a second offshore treatment train comes online and compression facilities for gas reinjection are operational production capacity will ramp up to 370 kbbl/d. The partners are planning to further increase available production capacity up to 450 kbbl/d by installing additional gas compression capacity for reinjection in the reservoir. The partners submitted the scheme of this additional phase to the relevant Kazakh Authorities.
In December 2014, the Consortium and the Kazakh Government signed an agreement which settled a number of pending issues relating to financial, environmental and operational matters.
In 2014, the Consortium agreed a new setup of the operating model to execute the development of the project, targeting to streamline decision-making process, to increase efficiency in operations and to reduce costs. This new operating model provides that a company, participated by the seven partners of the Consortium, acts as the sole operator of all exploration, development and production activities at the Kashagan field. As part of this process, in 2014 the shareholding in AKCO NV (Eni’s interest 100%) was transferred to NCOC BV. The activities needed to set up the new operating model will be completed by the first half of 2015.
An innovative environmental monitoring system was implemented in 2014. The project designed by Eni provides for the application of a mobile underwater vehicle (AUV) able to realize an environmental monitoring and asset integrity at the production facility.
During the year the integrated program for the management of biodiversity in the Ural Delta (Ural River Park Project - URPP) was completed. The program was launched by Eni under the sponsorship of the Environment and Water Resources Kazakh Authority and aimed to protect the environment and ecosystems in the Caspian area. In June 2014 the project received an official UNESCO designation to be included in the Man and Biosphere Program.
Within the agreements reached with the local Authorities, Eni continues its training program for Kazakh resources in the oil&gas sector.

Karachaganak
Located onshore in West Kazakhstan, Karachaganak (Eni’s interest 29.25%) is a liquid, gas and condensate giant field. Operations are conducted by the Karachaganak Petroleum Operating Consortium (KPO) and are regulated by a PSA lasting 40 years, until 2037. Eni and British Gas are co-operators of the venture.
Production In 2014, production of the Karachaganak field averaged 242 kbbl/d of liquids (52 kbbl/d net to Eni) and 909 mmcf/d of natural gas (201 mmcf/d net to Eni). This field is developed by producing liquids from the deeper layers of the reservoir. The gas is marketed (about 50%) at the Russian gas plant in Orenburg and the remaining volumes is utilized for re-injecting in the higher layers and the production of fuel gas. Over 90% of liquid production are stabilized at the Karachaganak Processing Complex (KPC) with a capacity of approximately 250 kbbl/d and exported to Western markets through the Caspian Pipeline Consortium (Eni’s interest 2%) and the Atyrau-Samara pipeline. The remaining volumes of non-stabilized liquid production (approximately 16 kbbl/d) are marketed at the Russian terminal in Orenburg.

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Development The expansion project is currently being assessed by the Consortium by means of the installation, in stages, of gas treatment plants and re-injection facilities to support liquids production plateau and increase gas marketable volumes.
Phase-one development to increase injection and treatment capacity of natural gas are under economical and technical assessment. Further development projects to support liquids production plateau are under study.
Eni continues its involvement to support local communities by means of the construction of schools and educational facilities, as well as water supply plant and road infrastructures for the villages located in the nearby area of Karachaganak, in particular in the western area.

n  Rest of Asia

Indonesia
Eni has been present in Indonesia since 2001. In 2014, Eni’s production mainly composed of gas, amounted to 16 kboe/d. Activities are concentrated in the Eastern offshore and onshore of East Kalimantan, offshore Sumatra, and offshore and onshore of West Timor and West Papua, over a developed and undeveloped acreage of 34,826 square kilometers (26,248 square kilometers net to Eni) in 14 blocks.
Exploration and production activities in Indonesia are regulated by Production Sharing Agreements.
Production Production consists mainly of gas and derives from the Sanga Sanga permit (Eni’s interest 37.8%) with seven production fields. This gas is treated at the Bontang liquefaction plant, one of the largest in the world. Liquefied gas is exported to the Japanese, South Korean and Taiwanese markets.
Development Main ongoing activities to feed the Bontang plant concerned: (i) the Jangkrik field (Eni operator with a 55% interest) in the Kalimantan offshore. The project includes drilling of production wells linked to a Floating Production Unit for gas and condensate treatment, as well as construction of a transportation facility. Start-up is expected in 2017; and (ii) the Bangka project (Eni’s interest 20%) in the eastern Kalimantan, with start-up expected in 2016.
Other main activities were performed on the environmental protection, health care and educational system to support local communities located in the operated area of the eastern Kalimantan, Papua and North Sumatra.
Exploration Exploration activities yielded positive results with a gas discovery through the Merakes 1 NFW exploration well in the East Sepinggan offshore block (Eni operator with an 85% interest). This discovery with a potential in place estimated at approximately 2 Tcf, is located in proximity of the operated Jangkrik field, which is currently under development, and will supply additional gas volumes to the Bontang LNG plant. Exploration activity was performed leveraging on the innovative seismic analysis to allow an effective activities by means of the evaluation of several geological data.

Iraq
Eni has been present in Iraq since 2009 and is performing development activities over a developed acreage of 1,074 square kilometers (446 square kilometers net to Eni). Production comes from Zubair oil field (Eni’s interest 41.6%) with a production of 21 kbbl/d net to Eni in 2014.
Development and production activities in Iraq are regulated by Technical Service Contract.
Development In 2014, phase one of the Rehabilitation Plan of the Zubair field progressed. The project includes the construction of an oil treatment

  plant for a capacity of 300 kbbl/d, the revamping of existing treatment facilities and the drilling of production and water injection wells.
In March 2014, the national oil company South Oil Co sanctioned the Enhanced Redevelopment Plan to achieve a production plateau of 850 kbbl/d. The main contracts to build new facilities were awarded in the first half of 2014.
Activities to support local farms and communities progressed during the year.

Pakistan
Eni has been present in Pakistan since 2000. In 2014, Eni’s production amounted to 45 kboe/d, mainly gas. Activities are located mainly onshore covering a developed and undeveloped acreage of 25,639 square kilometers (9,467 square kilometers net to Eni).
Exploration and production activities in Pakistan are regulated by concessions (onshore) and PSAs (offshore).
Production Eni’s main permits in the Country are Bhit/Bhadra (Eni operator with a 40% interest), Sawan (Eni’s interest 23.68%) and Zamzama (Eni’s interest 17.75%), which in 2014 accounted for 75% of Eni’s production in the Country.
Development Development activities concerned mainly infilling programs in order to counteract natural production depletion.
Programs to support the development of local communities nearby the production field of Bhit, Badhra and Kadanwari progressed with: (i) the construction of school infrastructure; (ii) programs to fresh water access; and (iii) vocational training initiatives in the upstream sector.

Turkmenistan
Eni started its activities in Turkmenistan with the purchase of the British company Burren Energy Plc in 2008. Activities are focused on the onshore Nebit Dag Area in the Western part of the Country, over a developed acreage of 200 square kilometers (180 square kilometers net to Eni). In 2014, Eni’s production averaged 10 kboe/d.
In November 2014, Eni and the State Agency for Management and Use of Hydrocarbon Resources signed an addendum to the Production Sharing Agreement regulating exploration and production activities at the onshore Nebit Dag Area. The addendum extends the duration of the PSA to 2032. The agreement also establishes the transfer of a 10% stake out of the contractor share to the State oil company Turkmenneft (Eni retains a 90% interest stake). The agreement also includes the construction of the Training Center for technical staff in the upstream sector. Vocational training program in oil&gas sector progressed for local graduates.
In addition, Eni and Turkmen State Agency signed a Memorandum of Understanding to evaluate the extension of Eni’s activities also in the Turkmenistan’s offshore section of the Caspian Sea.
Production Production derives mainly from the Burun oilfield. Oil production is shipped to the Turkmenbashi refinery plant. Eni receives, by means of a swap arrangement with the Turkmen Authorities, an equivalent amount of oil at the Okarem terminal, close to the South coast of the Caspian Sea. Eni’s entitlement is sold FOB. Associated natural gas is used for own consumption and gas lift system. The remaining amount is delivered to the national oil company Turkmenneft, via national grid.
Development Development activities include: (i) a program to mitigate the natural field production decline; and (ii) the completion of the revamping of the treatment oil plant at the Burun field in order to increase treatment capacity, as well as to improve safety, efficiency and environment performance also by means of reducing gas flaring and increasing water re-injection capacity.

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n  Americas

Ecuador
Eni has been present in Ecuador since 1988. Operations are performed in Block 10 (Eni’s interest 100%) located in the Oriente Basin, in the Amazon forest, over a developed acreage of 1,985 square kilometers net to Eni. In 2014, Eni’s production averaged 12 kbbl/d.
Exploration and production activities in Ecuador are regulated by a service contract that expires in 2023.
Production Production deriving from the Villano field, started in 1999, is processed by means of a Central Production Facility and transported via a pipeline network to the storage facility located in the Pacific coast.
Development In the year, the following projects were sanctioned: (i) the Phase VI of the Villano field, with a production start-up expected in 2016; and (ii) Oglan discovery, with start-up expected in 2017.
Maintenance activities and facilities upgrading progressed to support high safety standard and efficiency levels.
In 2014, the first three years of the Plan of Action on Biodiversity in the Amazon forest near the Villano field, concluded that Eni’s production activities were performed with minimal environmental impacts.
Eni’s commitment to support the socio-economic development nearby the production areas progressed by means of: (i) improving sanitary condition with medical supplies, equipments and vehicles; (ii) educational plans with the construction of schools, supplies and scholarship foundation; and (iii) training activities and programs to develop agricultural sector also with specific equipments supplies.
Exploration Exploration activities yielded positive results with the Oglan-2 exploration well with a potential in place estimated at 300 million barrels of oil, located near the processing facilities of the operated field of Villano.

Trinidad & Tobago
Eni has been present in Trinidad & Tobago since 1970. In 2014, Eni’s production averaged 60 mmcf/d (11 kboe/d). Activity is concentrated offshore North of Trinidad over a developed acreage of 382 square kilometers (66 square kilometers net to Eni).
Exploration and production activities in Trinidad & Tobago are regulated by PSAs.
Production Production is provided by the Chaconia, Ixora, Hibiscus, Ponsettia, Bougainvillea and Heliconia gas fields, located in the North Coast Marine Area 1 block (Eni’s interest 17.3%). Production is supported by two fixed platforms linked to the Hibiscus processing facility. Natural gas is used to feed trains 2, 3 and 4 of the Atlantic LNG liquefaction plant on Trinidad’s coast and it is sold under long-term contracts in the United States, as well as alternative destinations on a spot basis.

United States
Eni has been present in the United States since 1968. Activities are performed in the Gulf of Mexico, Alaska and onshore in Texas. Developed and undeveloped acreage covers 6,092 square kilometers (3,500 square kilometers net to Eni). In 2014, Eni’s oil and gas production amounted to 92 kboe/d.
Exploration and production activities in the United States are regulated by concessions.

Gulf of Mexico
Eni holds interests in 188 exploration and production blocks in deep and conventional offshore of the Gulf of Mexico of which 122 are operated by Eni.

  

In 2014, Eni was awarded the operatorship of exploration licenses MC246 and MC290 with a 100% interest.
Production The main operated fields are Allegheny and Appaloosa (Eni’s interest 100%), Pegasus (Eni’s interest 85%), Longhorn, Devils Towers and Triton (Eni’s interest 75%). Eni also holds interests in Europa (Eni’s interest 32%), Medusa (Eni’s interest 25%) and Thunder Hawk (Eni’s interest 25%) fields.
Production start-up was achieved at the St. Malo (Eni’s interest 1.25%) and Lucius (Eni 8.5%) fields, the latter started up in January 2015. The start-up of Hadrian South (Eni’s interest 30%) is achieved in March 2015 and will allow to achieve an expected peak production of 144 kboe/d (22 kboe/d net to Eni) for the Lucius-Hadrian South project.
Development Development activities concerned: (i) the Heidelberg project (Eni’s interest 12.5%) in the deep offshore of the Gulf of Mexico. Activities include the drilling of 5 production wells and the installation of a production platform. Start-up is expected a the end of 2016 with a production of 9 kboe/d net to Eni; and (ii) the drilling of development wells at the operated Devils Tower and Pegasus fields, as well as non-operated Europa and K2 (Eni’s interest 13.39%) fields.

Texas
Production Production comes from the Alliance area (Eni’s interest 27.5%), in the Fort Worth basin. This asset was acquired following an agreement with Quicksilver for unconventional gas reserves (shale gas). In 2014, Eni’s production amounted to approximately 8 kboe/d.
Development The development of unconventional gas reserves (shale gas) progressed in the area with start-up of additional 21 production wells.

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Exploration Exploration activities yielded positive results with the Stallings 1H and Mitchell 1H exploratory wells, under the agreement with Quicksilver Resources signed at the end of 2013 providing for joint evaluation, exploration and development of unconventional oil reservoirs (shale oil) in the southern part of the Delaware Basin in West Texas. The wells were already connected to existing production facilities with an initial flow of 1,500 bbl/d.
Eni was awarded in the Leon Valley (Western Texas) with a 50% interest for exploring and developing an area with unconventional oil reservoirs.

Alaska
Eni holds interests in 99 exploration and development blocks, with interests ranging from 10% to 100%; Eni is the operator in 46 of these blocks.
Production Eni’s production is provided by Nikaitchuq (Eni operator with a 100% interest) and Oooguruk (Eni’s interest 30%) fields with a 2014 overall net production of approximately 21 kbbl/d.
Development Drilling activities progressed at the Nikaitchuq and Oooguruk fields. In June 2014, the Nikaitchuq field achieved the production target of 25 kboe/d. This relevant result required the expertise and the application of Eni’s proprietary technologies in an area with extreme climate and environmental constraints, which helped to build one of the most advanced production facilities in the North Slope, with maximum environmental compatibility and high operating efficiency.

Venezuela
Eni has been present in Venezuela since 1998. In 2014, Eni’s production averaged 10 kbbl/d. Activity is concentrated both offshore (Gulf of Venezuela and Gulf of Paria) and onshore in the Orinoco Oil Belt, over a developed and undeveloped acreage of 2,804 square kilometers (1,066 square kilometers net to Eni).
Exploration and production of oilfields are regulated by the terms of the so-called Empresa Mixta. Under the new legal framework, only a company incorporated under the law of Venezuela is entitled to conduct petroleum operations. A stake of at least 60% in the capital of such company is held by an affiliate of the Venezuela state oil company, PDVSA, preferably Corporación Venezuelana de Petróleo (CVP).
Production Eni’s production comes from the Corocoro field (Eni’s interest 26%), in the Gulf of Paria, and the Junin 5 field (Eni’s interest 40%), located in the Orinoco Oil Belt which contains 35 bbbl of certified heavy oil in place.
Development Drilling activities progressed at the Junin 5 field with the drilling of 22 wells. The early production of the first phase started up in 2013 with a target plateau of 75 kbbl/d. The full field development phase includes a long-term production plateau of 240 kbbl/d. The project provides for the construction of a refinery. Eni agreed to finance a part of PDVSA’s development costs for the Early production phase and engineering activity of refinery plant up to $1.74 billion.
Ongoing development activities progressed at the Perla gas field in the Cardon IV Block (Eni’s interest 50%), located in the Gulf of Venezuela.
The early production start-up is expected by the second quarter of 2015 with a target production of approximately 450 mmcf/d. The full project includes the utilization of existing wells, the drilling of 17 additional wells and the installation of production platforms linked by pipelines to an onshore treatment plant. Production ramp-up is expected in 2017 with a target of approximately 800 mmcf/d. The development plan targets a

  long-term production plateau of approximately 1,200 mmcf/d from 2020.
Exploration Eni is also participating with a 19.5% interest in Petrolera Güiria for oil exploration and with a 40% interest in Punta Pescador and Gulf of Paria Ovest for gas exploration, both located offshore in the Eastern Venezuela.

n  Australia and Oceania

Australia
Eni has been present in Australia since 2001. In 2014, Eni’s production of oil and natural gas averaged 26 kboe/d. Activities are focused on conventional and deep offshore fields, over a developed and undeveloped acreage of 22,819 square kilometers (13,376 square kilometers net to Eni).
The main production blocks in which Eni holds interests are WA-33-L (Eni’s interest 100%), JPDA 03-13 (Eni’s interest 10.99%) and JPDA 06-105 (Eni operator with a 40% interest). In the appraisal and development phase Eni holds interests in NT/P68 (Eni’s interest 50%) and NT/RL7 (Eni’s interest 32.5%).
In addition, Eni holds interest in 6 exploration licenses, of which 1 in the JPDA.
Exploration and production activities in Australia are regulated by concession agreements, whereas in the cooperation zone between Timor Leste and Australia (Joint Petroleum Development Area-JPDA) they are regulated by PSAs.

Block JPDA 03-13
Production The liquids and gas Bayu Undan field started-up in 2004 and produced 138 kboe/d (approximately 12 kboe/d net to Eni) in 2014. Liquid production is supported by 3 treatment platforms and an FSO unit. Production of natural gas is mostly carried by an approximately 500-kilometer long pipeline and is treated at the Darwin liquefaction plant which has a capacity of 3.6 mmtonnes/y of LNG (equivalent to approximately 177 bcf/y of feed gas). LNG is sold to Japanese power generation companies under long-term contracts.
Development The Development Phase 3 is currently underway, aiming at increasing of liquid production and supporting of LNG production.

Block JPDA 06-105
Production The Kitan oil field (Eni operator with a 40% interest) started-up in 2011 and amounted to 6 kbbl/d in 2014 (approximately 2 kbbl/d net to Eni). Production is supported by 3 sub-sea wells and operated by an FPSO unit for the oil treatment.
Development Development activities progressed at the Kitan field with the drilling of one additional well to increase production in 2015.

Block WA-33-L
Production The Blacktip gas field (Eni’s interest 100%) started-up in 2009 and produced approximately 24 bcf/y in 2014 (approximately 12 kboe/d). The project is supported by a production platform and carried by a 108-kilometer long pipeline to an onshore treatment plant with a capacity of 42 bcf/y. Natural gas extracted from this field is sold under a 25-year contract to supply a power plant, signed with Australian society Power & Water Utility Co.

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Eni Fact Book Exploration & Production

    Estimated net proved hydrocarbons reserves by geographic area  

(mmboe)

  
(at December 31)   Italy (a)   Rest of Europe   North Africa   Sub-Saharan Africa   Kazakhstan   Rest of Asia   Americas   Australia and Oceania   Total
2010                                    
Estimated net proved hydrocarbons reserves   724   601   2,119   1,161   1,126   612   373   127   6,843
Consolidated subsidiaries   724   601   2,096   1,133   1,126   295   230   127   6,332
Equity-accounted entities           23   28       317   143       511
Developed   554   405   1,237   817   543   182   167   117   4,022
Consolidated subsidiaries   554   405   1,215   812   543   139   141   117   3,926
Equity-accounted entities           22   5       43   26       96
Undeveloped   170   196   882   344   583   430   206   10   2,821
Consolidated subsidiaries   170   196   881   321   583   156   89   10   2,406
Equity-accounted entities           1   23       274   117       415
2011                                    
Estimated net proved hydrocarbons reserves   707   630   2,052   1,104   950   886   624   133   7,086
Consolidated subsidiaries   707   630   2,031   1,021   950   230   238   133   5,940
Equity-accounted entities           21   83       656   386       1,146
Developed   540   374   1,194   746   482   134   188   112   3,770
Consolidated subsidiaries   540   374   1,175   742   482   129   162   112   3,716
Equity-accounted entities           19   4       5   26       54
Undeveloped   167   256   858   358   468   752   436   21   3,316
Consolidated subsidiaries   167   256   856   279   468   101   76   21   2,224
Equity-accounted entities           2   79       651   360       1,092
2012                                    
Estimated net proved hydrocarbons reserves   524   591   1,935   1,129   1,041   852   966   128   7,166
Consolidated subsidiaries   524   591   1,915   1,048   1,041   184   236   128   5,667
Equity-accounted entities           20   81       668   730       1,499
Developed   406   349   1,100   716   458   190   190   107   3,516
Consolidated subsidiaries   406   349   1,080   716   458   108   170   107   3,394
Equity-accounted entities           20           82   20       122
Undeveloped   118   242   835   413   583   662   776   21   3,650
Consolidated subsidiaries   118   242   835   332   583   76   66   21   2,273
Equity-accounted entities               81       586   710       1,377
2013                                    
Estimated net proved hydrocarbons reserves   499   557   1,802   1,230   1,035   270   966   176   6,535
Consolidated subsidiaries   499   557   1,783   1,155   1,035   263   240   176   5,708
Equity-accounted entities           19   75       7   726       827
Developed   408   343   1,022   701   566   93   171   123   3,427
Consolidated subsidiaries   408   343   1,003   701   566   90   153   123   3,387
Equity-accounted entities           19           3   18       40
Undeveloped   91   214   780   529   469   177   795   53   3,108
Consolidated subsidiaries   91   214   780   454   469   173   87   53   2,321
Equity-accounted entities               75       4   708       787
2014                                    
Estimated net proved hydrocarbons reserves   503   544   1,756   1,320   1,069   290   960   160   6,602
Consolidated subsidiaries   503   544   1,740   1,239   1,069   285   232   160   5,772
Equity-accounted entities           16   81       5   728       830
Developed   401   335   919   725   589   115   214   135   3,433
Consolidated subsidiaries   401   335   904   702   589   112   188   135   3,366
Equity-accounted entities           15   23       3   26       67
Undeveloped   102   209   837   595   480   175   746   25   3,169
Consolidated subsidiaries   102   209   836   537   480   173   44   25   2,406
Equity-accounted entities           1   58       2   702       763
(a) Including approximately 767 billion of cubic feet of natural gas held in storage at December 31, 2010 and 2011.

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    Estimated net proved liquids reserves by geographic area  

(mmbbl)

  
(at December 31)   Italy   Rest of Europe   North Africa   Sub-Saharan Africa   Kazakhstan   Rest of Asia   Americas   Australia and Oceania   Total
2010                                    
Estimated net proved liquids reserves   248   349   997   756   788   183   273   29   3,623
Consolidated subsidiaries   248   349   978   750   788   139   134   29   3,415
Equity-accounted entities           19   6       44   139       208
Developed   183   207   674   537   251   44   87   20   2,003
Consolidated subsidiaries   183   207   656   533   251   39   62   20   1,951
Equity-accounted entities           18   4       5   25       52
Undeveloped   65   142   323   219   537   139   186   9   1,620
Consolidated subsidiaries   65   142   322   217   537   100   72   9   1,464
Equity-accounted entities           1   2       39   114       156
2011                                    
Estimated net proved liquids reserves   259   372   934   692   653   216   283   25   3,434
Consolidated subsidiaries   259   372   917   670   653   106   132   25   3,134
Equity-accounted entities           17   22       110   151       300
Developed   184   195   638   487   215   34   117   25   1,895
Consolidated subsidiaries   184   195   622   483   215   34   92   25   1,850
Equity-accounted entities           16   4           25       45
Undeveloped   75   177   296   205   438   182   166       1,539
Consolidated subsidiaries   75   177   295   187   438   72   40       1,284
Equity-accounted entities           1   18       110   126       255
2012                                    
Estimated net proved liquids reserves   227   351   921   688   670   196   273   24   3,350
Consolidated subsidiaries   227   351   904   672   670   82   154   24   3,084
Equity-accounted entities           17   16       114   119       266
Developed   165   180   601   456   203   49   128   24   1,806
Consolidated subsidiaries   165   180   584   456   203   41   109   24   1,762
Equity-accounted entities           17           8   19       44
Undeveloped   62   171   320   232   467   147   145       1,544
Consolidated subsidiaries   62   171   320   216   467   41   45       1,322
Equity-accounted entities               16       106   100       222
2013                                    
Estimated net proved liquids reserves   220   330   846   738   679   129   263   22   3,227
Consolidated subsidiaries   220   330   830   723   679   128   147   22   3,079
Equity-accounted entities           16   15       1   116       148
Developed   177   179   577   465   295   38   115   20   1,866
Consolidated subsidiaries   177   179   561   465   295   38   96   20   1,831
Equity-accounted entities           16               19       35
Undeveloped   43   151   269   273   384   91   148   2   1,361
Consolidated subsidiaries   43   151   269   258   384   90   51   2   1,248
Equity-accounted entities               15       1   97       113
2014                                    
Estimated net proved liquids reserves   243   331   790   756   697   132   264   13   3,226
Consolidated subsidiaries   243   331   776   739   697   131   147   13   3,077
Equity-accounted entities           14   17       1   117       149
Developed   184   174   534   477   306   64   142   12   1,893
Consolidated subsidiaries   184   174   521   470   306   64   116   12   1,847
Equity-accounted entities           13   7           26       46
Undeveloped   59   157   256   279   391   68   122   1   1,333
Consolidated subsidiaries   59   157   255   269   391   67   31   1   1,230
Equity-accounted entities           1   10       1   91       103

- 29 -

Contents

Eni Fact Book Exploration & Production

    Estimated net proved natural gas reserves by geographic area  

(bcf)

  
(at December 31)   Italy (a)   Rest of Europe   North Africa   Sub-Saharan Africa   Kazakhstan   Rest of Asia   Americas   Australia and Oceania   Total
2010                                    
Estimated net proved natural gas reserves   2,644   1,401   6,231   2,245   1,874   2,391   552   544   17,882
Consolidated subsidiaries   2,644   1,401   6,207   2,127   1,874   871   530   544   16,198
Equity-accounted entities           24   118       1,520   22       1,684
Developed   2,061   1,103   3,122   1,554   1,621   774   437   539   11,211
Consolidated subsidiaries   2,061   1,103   3,100   1,550   1,621   560   431   539   10,965
Equity-accounted entities           22   4       214   6       246
Undeveloped   583   298   3,109   691   253   1,617   115   5   6,671
Consolidated subsidiaries   583   298   3,107   577   253   311   99   5   5,233
Equity-accounted entities           2   114       1,306   16       1,438
2011                                    
Estimated net proved natural gas reserves   2,491   1,427   6,210   2,287   1,648   3,718   1,897   604   20,282
Consolidated subsidiaries   2,491   1,425   6,190   1,949   1,648   685   590   604   15,582
Equity-accounted entities       2   20   338       3,033   1,307       4,700
Developed   1,977   995   3,087   1,441   1,480   552   393   491   10,416
Consolidated subsidiaries   1,977   995   3,070   1,437   1,480   528   385   491   10,363
Equity-accounted entities           17   4       24   8       53
Undeveloped   514   432   3,123   846   168   3,166   1,504   113   9,866
Consolidated subsidiaries   514   430   3,120   512   168   157   205   113   5,219
Equity-accounted entities       2   3   334       3,009   1,299       4,647
2012                                    
Estimated net proved natural gas reserves   1,633   1,317   5,574   2,414   2,038   3,605   3,804   572   20,957
Consolidated subsidiaries   1,633   1,317   5,558   2,061   2,038   562   449   572   14,190
Equity-accounted entities           16   353       3,043   3,355       6,767
Developed   1,325   925   2,736   1,429   1,401   774   340   459   9,389
Consolidated subsidiaries   1,325   925   2,720   1,429   1,401   372   334   459   8,965
Equity-accounted entities           16           402   6       424
Undeveloped   308   392   2,838   985   637   2,831   3,464   113   11,568
Consolidated subsidiaries   308   392   2,838   632   637   190   115   113   5,225
Equity-accounted entities               353       2,641   3,349       6,343
2013                                    
Estimated net proved natural gas reserves   1,532   1,247   5,246   2,704   1,957   772   3,862   848   18,168
Consolidated subsidiaries   1,532   1,247   5,231   2,374   1,957   744   509   848   14,442
Equity-accounted entities           15   330       28   3,353       3,726
Developed   1,266   904   2,447   1,295   1,488   300   315   561   8,576
Consolidated subsidiaries   1,266   904   2,432   1,295   1,488   286   310   561   8,542
Equity-accounted entities           15           14   5       34
Undeveloped   266   343   2,799   1,409   469   472   3,547   287   9,592
Consolidated subsidiaries   266   343   2,799   1,079   469   458   199   287   5,900
Equity-accounted entities               330       14   3,348       3,692
2014                                    
Estimated net proved natural gas reserves   1,432   1,171   5,306   3,095   2,049   864   3,821   807   18,545
Consolidated subsidiaries   1,432   1,171   5,291   2,744   2,049   846   468   807   14,808
Equity-accounted entities           15   351       18   3,353       3,737
Developed   1,192   887   2,125   1,360   1,553   271   399   675   8,462
Consolidated subsidiaries   1,192   887   2,110   1,271   1,553   261   393   675   8,342
Equity-accounted entities           15   89       10   6       120
Undeveloped   240   284   3,181   1,735   496   593   3,422   132   10,083
Consolidated subsidiaries   240   284   3,181   1,473   496   585   75   132   6,466
Equity-accounted entities               262       8   3,347       3,617
(a) Including approximately 767 billion of cubic feet of natural gas held in storage at December 31, 2010 and 2011.

- 30 -

Contents

Eni Fact Book Exploration & Production

   Production of oil and natural gas by country (a)

 (kboe/d)  

2010

  

2011

  

2012

  

2013

  

2014
Italy   183   186   189   186   179
Rest of Europe   222   216   178   155   190
     Croatia   8   5   5   8   7
     Norway   123   131   126   106   112
     United Kingdom   91   80   47   41   71
North Africa   602   438   586   556   567
     Algeria   77   72   78   88   109
     Egypt   232   236   235   227   206
     Libya   273   112   258   228   239
     Tunisia   20   18   15   13   13
Sub-Saharan Africa   400   370   345   332   325
     Angola   118   102   87   87   84
     Congo   110   108   104   120   106
     Nigeria   172   160   154   125   135
Kazakhstan   108   106   102   100   88
Rest of Asia   131   112   129   144   98
     China   7   8   9   8   4
     India   8   4   2   1   1
     Indonesia   19   18   18   16   16
     Iran   21   6   3   4   1
     Iraq   5   7   18   22   21
     Pakistan   59   58   57   52   45
     Russia           11   31    
     Turkmenistan   12   11   11   10   10
Americas   143   125   135   116   125
     Brazil       1   2        
     Ecuador   11   7   25   13   12
     Trinidad & Tobago   12   10   11   11   11
     United States   109   98   88   82   92
     Venezuela   11   9   9   10   10
Australia and Oceania   26   28   37   30   26
     Australia   26   28   37   30   26
Total outside Italy   1,632   1,395   1,512   1,433   1,419
    1,815   1,581   1,701   1,619   1,598
of which equity-accounted entities   25   26   35   54   22
Angola   3   4   2   3   2
Brazil       1   2        
Indonesia   6   6   6   5   5
Russia           11   31    
Tunisia   5   6   5   5   5
Venezuela   11   9   9   10   10

 

   Oil and natural gas production sold

 (mmboe)  

2010

  

2011

  

2012

  

2013

  

2014
Oil and natural gas production       662.3     577.0     622.6     591.0     583.1  
Change in inventories and other       (3.4 )   (7.4 )   1.6     (5.7 )   (4.2 )
Own consumption of gas       (20.9 )   (21.1 )   (25.5 )   (30.0 )   (29.4 )
Oil and natural gas production sold (b)       638.0     548.5     598.7     555.3     549.5  
Oil   (mmbbl)   361.30     302.61     325.41     299.54     299.78  
- of which to R&M segment       206.41     190.65     185.48     178.83     184.09  
Natural gas   (bcf)   1,536     1,367     1,501     1,405     1,371  
- of which to G&P segment       432     423     435     385     371  
(a) Includes volumes of gas consumed in operations (442, 451, 383, 321 and 318 mmcf/d, in 2014, 2013, 2012, 2011 and 2010, respectively).
(b) Includes 6.1 mmboe of equity-accounted entities production sold in 2014 (17.1, 11.2, 7.7 and 8 mmboe in 2013, 2012, 2011 and 2010, respectively).

- 31 -

Contents

Eni Fact Book Exploration & Production

   Liquids production by country

 (kbbl/d)  

2010

  

2011

  

2012

  

2013

  

2014
Italy   61   64   63   71   73
Rest of Europe   121   120   95   77   93
     Norway   74   80   74   60   62
     United Kingdom   47   40   21   17   31
North Africa   301   209   271   252   252
     Algeria   74   69   71   73   83
     Egypt   96   91   88   93   88
     Libya   116   36   101   76   73
     Tunisia   15   13   11   10   8
Sub-Saharan Africa   321   278   247   242   231
     Angola   113   95   80   79   75
     Congo   98   87   82   90   80
     Nigeria   110   96   85   73   76
Kazakhstan   65   64   61   61   52
Rest of Asia   48   34   44   49   37
     China   6   7   8   7   4
     India   1                
     Indonesia   2   2   2   2   2
     Iran   21   6   3   4   1
     Iraq   5   7   18   22   21
     Pakistan   1   1   1        
     Russia           2   5    
     Turkmenistan   12   11   10   9   9
Americas   71   65   83   71   84
     Brazil       1   2        
     Ecuador   11   7   25   13   12
     United States   49   48   47   48   62
     Venezuela   11   9   9   10   10
Australia and Oceania   9   11   18   10   6
     Australia   9   11   18   10   6
Total outside Italy   936   781   819   762   755
    997   845   882   833   828
of which equity-accounted entities   19   19   20   20   15
Angola   3   3   2        
Brazil       1   2        
Indonesia   1   1   1   1   1
Russia           2   5    
Tunisia   4   5   4   4   4
Venezuela   11   9   9   10   10

 

   Oil and natural gas production available for sale (a)

 (kboe/d)  

2010

  

2011

  

2012

  

2013

  

2014
Italy   178   181   184   179   171
Rest of Europe   214   209   171   149   184
North Africa   582   420   561   528   532
Sub-Saharan Africa   386   354   328   307   307
Kazakhstan   104   102   98   96   85
Rest of Asia   126   106   121   135   91
Americas   141   124   133   114   122
Australia and Oceania   26   27   35   29   25
    1,757   1,523   1,631   1,537   1,517
of which equity-accounted entities   23   23   33   51   20
North Africa   5   5   5   5   4
Sub-Saharan Africa   3   3   2   2   2
Rest of Asia   5   4   15   34   4
Americas   10   11   11   10   10
  
(a) Do not include natural gas consumed in operations.
- 32 -
Contents

Eni Fact Book Exploration & Production

   Natural gas production by country (a)

 (mmcf/d)  

2010

  

2011

  

2012

  

2013

  

2014
Italy   673.2   674.3   695.1   630.2   583.8
Rest of Europe   559.2   537.9   458.9   429.6   535.2
     Croatia   45.3   29.9   25.4   43.0   38.2
     Norway   271.6   284.0   289.6   250.5   274.2
     Ukraine           0.5        
     United Kingdom   242.3   224.0   143.4   136.1   222.8
North Africa   1,673.2   1,271.5   1,733.5   1,674.2   1,724.2
     Algeria   20.2   19.0   40.1   81.6   141.3
     Egypt   755.1   800.7   805.9   734.6   649.8
     Libya   871.1   423.2   863.5   836.7   911.2
     Tunisia   26.8   28.6   24.0   21.3   21.9
Sub-Saharan Africa   441.5   508.0   538.7   495.9   517.8
     Angola   31.9   34.7   39.2   46.9   48.6
     Congo   67.9   119.1   120.5   161.8   145.1
     Nigeria   341.7   354.2   379.0   287.2   324.1
Kazakhstan   237.0   231.0   221.7   213.5   200.7
Rest of Asia   463.9   430.1   468.5   520.5   333.6
     China   6.7   5.0   4.4   3.4    
     India   36.6   19.6   10.5   7.2   3.7
     Indonesia   94.4   84.3   84.9   79.2   75.8
     Pakistan   326.2   321.2   310.4   283.1   248.2
     Russia           52.4   141.6    
     Turkmenistan           5.9   6.0   5.9
Americas   396.0   334.0   283.5   245.3   218.6
     Trinidad & Tobago   63.6   56.7   58.5   58.6   60.3
     United States   332.4   277.3   225.0   185.9   157.5
     Venezuela               0.8   0.8
Australia and Oceania   95.7   97.8   100.8   110.4   110.5
     Australia   95.7   97.8   100.8   110.4   110.5
Total outside Italy   3,866.5   3,410.3   3,805.6   3,689.4   3,640.6
    4,539.7   4,084.6   4,500.7   4,319.6   4,224.4
of which equity-accounted entities   35.6   34.0   88.6   186.3   39.6
Angola   0.8   1.9   4.4   14.2   10.3
Indonesia   28.9   25.7   26.0   24.2   23.2
Russia           52.4   141.6    
Tunisia   5.9   6.4   5.3   5.5   5.3
Ukraine           0.5        
Venezuela               0.8   0.8

 

   Natural gas production available for sale (b)

 (mmcf/d)  

2010

  

2011

  

2012

  

2013

  

2014
Italy   648   648   667   593   541
Rest of Europe   517   498   421   395   498
North Africa   1,559   1,169   1,592   1,514   1,536
Sub-Saharan Africa   365   422   444   356   418
Kazakhstan   221   212   202   195   181
Rest of Asia   436   398   423   476   297
Americas   385   323   273   234   205
Australia and Oceania   91   93   96   105   106
    4,222   3,763   4,118   3,868   3,782
of which equity-accounted entities   27   24   71   165   28
North Africa   3   4   3   4   3
Sub-Saharan Africa               7   7
Rest of Asia   24   20   68   154   18
  
(a) Includes volumes of gas consumed in operations (442, 451, 383, 321 and 318 mmcf/d, in 2014, 2013, 2012, 2011 and 2010, respectively).
(b) Do not include natural gas consumed in operations.
- 33 -
Contents

Eni Fact Book Exploration & Production

    Average realizations  

2010

  

2011

  

2012

  

2013

  

2014
    CONS   JV   CONS   JV   CONS   JV   CONS   JV   CONS   JV
Liquids  
 
 
 
 
($/bbl)                                        
Italy   72.19       101.20       100.52       98.50       87.80    
Rest of Europe   67.26       97.56   97.18   100.67   93.11   98.97       88.80    
North Africa   70.96   16.09   97.63   17.98   103.63   17.93   100.42   17.96   88.99   17.94
Sub-Saharan Africa   78.23   77.78   110.09   108.92   108.34   112.28   105.13       93.45    
Kazakhstan   66.74       98.68       102.25       99.37       91.86    
Rest of Asia   75.20   57.05   101.09   74.98   103.44   40.36   99.69   33.87   77.99   65.90
Americas   72.84   71.70   101.15   93.03   85.94   93.45   85.27   93.32   79.13   81.48
Australia and Oceania   73.00       98.05       102.06       98.72       91.61    
    72.95   58.86   102.47   84.78   103.06   77.94   100.20   64.92   88.90   70.56
 
 
 
 
 
Natural gas                                        
($/kcf)                                        
Italy   8.71       11.56       10.68       11.65       8.74    
Rest of Europe   7.40       9.72   10.65   10.13   11.64   10.62       8.49    
North Africa   6.87       5.95   5.39   8.13   4.91   7.96   6.29   8.08   6.08
Sub-Saharan Africa   1.87       1.97       2.16       2.16       2.12    
Kazakhstan   0.49       0.57       0.67       0.64       0.62    
Rest of Asia   4.35   9.87   5.27   15.68   5.94   6.17   5.83   3.49   6.18   15.64
Americas   4.70       4.02       2.90       3.37       3.96    
Australia and Oceania   7.40       7.38       7.73       7.80       7.46    
    6.01   8.73   6.44   13.89   7.14   6.16   7.41   4.00   6.83   14.13
 
 
 
 
 
Hydrocarbons                                        
($/boe)                                        
Italy   56.60       77.26       73.24       77.56       64.80    
Rest of Europe   56.00       79.03   66.14   80.79   69.05   79.14       67.87    
North Africa   55.06   13.53   64.85   20.87   73.06   19.45   70.51   21.47   65.36   21.43
Sub-Saharan Africa   66.35   77.78   88.02   108.92   84.93   112.28   85.08       73.18    
Kazakhstan   42.24       62.87       64.92       62.02       57.20    
Rest of Asia   42.45   55.04   51.51   85.80   57.98   34.78   62.59   21.46   52.75   83.12
Americas   47.84   71.70   60.28   93.03   54.61   93.45   57.89   93.32   59.94   81.48
Australia and Oceania   52.51       61.00       73.82       61.79       52.46    
    55.59   56.10   72.20   83.15   73.65   59.25   72.97   37.57   65.36   72.19
 
 
 
 
 
Eni’s Group       2010       2011       2012       2013       2014
 
 
 
 
 
Liquids ($/bbl)       72.76       102.11       102.58       99.44       88.71
Natural gas ($/kcf)       6.02       6.48       7.12       7.26       6.87
Hydrocarbons ($/boe)       55.60       72.26       73.39       71.87       65.49

 

   Net developed and undeveloped acreage

 (square kilometers)  

2010

  

2011

  

2012

  

2013

  

2014
Europe   29,079   26,023   27,423   37,018   44,842
     Italy   19,097   16,872   17,556   17,282   17,297
     Rest of Europe   9,982   9,151   9,867   19,736   27,545
Africa   152,671   137,220   142,796   137,096   159,341
     North Africa   44,277   30,532   21,390   20,412   21,693
     Sub-Saharan Africa   108,394   106,688   121,406   116,684   137,648
Asia   112,745   55,284   58,042   79,314   109,237
     Kazakhstan   880   880   869   869   869
     Rest of Asia   111,865   54,404   57,173   78,445   108,368
Americas   11,187   10,209   9,075   9,206   7,943
Australia and Oceania   15,279   25,685   13,834   13,622   13,376
Total   320,961   254,421   251,170   276,256   334,739

- 34 -

Contents

Eni Fact Book Exploration & Production

   Principal oil and natural gas interests at December 31, 2014
   

Commencement of operations

  

Number of interests

    

Gross developed (a) (b) acreage

    

Net developed (a) (b) acreage

  

Gross undeveloped (a) acreage

  

Net undeveloped (a) acreage

  

Type of fields/acreage

    

Number of producing fields

  

Number of other fields
EUROPE       265   15,883   10,948   53,444   33,894       120   93
Italy   1926   151   10,712   8,989   10,751   8,308   Onshore/Offshore   81   68
Rest of Europe       114   5,171   1,959   42,693   25,586       39   25
     Croatia   1996   2   1,975   987           Offshore   10   2
     Cyprus   2013   3           12,523   10,018   Offshore        
     Greenland   2013   2           4,890   1,909   Offshore        
     Norway   1965   56   2,255   345   9,149   3,327   Offshore   18   20
     Portugal   2014   3           9,099   6,370   Offshore        
     United Kingdom   1964   35   941   627   343   117   Offshore   11   3
     Other countries       13           6,689   3,845   Offshore        
AFRICA       282   66,114   20,032   263,572   139,309       268   138
North Africa       117   32,559   14,144   15,675   7,549       101   60
     Algeria   1981   42   3,222   1,148   187   31   Onshore   33   10
     Egypt   1954   54   4,926   1,772   6,800   3,174   Onshore/Offshore   43   23
     Libya   1959   10   17,947   8,950   8,688   4,344   Onshore/Offshore   4   22
     Tunisia   1961   11   6,464   2,274           Onshore/Offshore   21   5
Sub-Saharan Africa       165   33,555   5,888   247,897   131,760       167   78
     Angola   1980   72   6,555   813   14,605   3,514   Onshore/Offshore   50   33
     Congo   1968   28   1,714   921   2,649   1,962   Onshore/Offshore   27   3
     Gabon   2008   6           7,615   7,615   Onshore/Offshore        
     Ghana   2009   3           4,676   1,664   Offshore       2
     Kenya   2012   7           61,363   40,426   Offshore        
     Liberia   2012   3           7,365   1,841   Offshore        
     Mozambique   2007   1           10,207   5,103   Offshore       6
     Nigeria   1962   40   25,286   4,154   10,837   3,484   Onshore/Offshore   90   34
     South Africa   2014   1           82,117   32,847   Offshore        
     Other countries       4           46,463   33,304   Onshore        
ASIA       71   17,556   5,809   199,150   103,428       29   24
Kazakhstan   1992   6   2,391   442   2,542   427   Onshore/Offshore   1   5
Rest of Asia       65   15,165   5,367   196,608   103,001       28   19
     China   1984   8   77   19   7,056   7,056   Offshore   5    
     India   2005   11   206   109   16,546   6,058   Onshore/Offshore   4   3
     Indonesia   2001   14   3,218   1,217   31,608   25,031   Onshore/Offshore   7   15
     Iraq   2009   1   1,074   446           Onshore   1    
     Myanmar   2014   2           7,850   7,065   Onshore        
     Pakistan   2000   17   10,390   3,396   15,249   6,071   Onshore/Offshore   9   1
     Russia   2007   3           62,592   20,862   Offshore        
     Timor Leste   2006   1           1,538   1,230   Offshore        
     Turkmenistan   2008   1   200   180           Onshore   2    
     Vietnam   2013   6           39,569   26,384   Offshore        
     Other countries       1           14,600   3,244   Offshore        
AMERICAS       306   5,064   3,273   11,746   4,670       71   13
     Ecuador   1988   1   1,985   1,985           Onshore   1   2
     Trinidad & Tobago   1970   1   382   66           Offshore   7    
     United States   1968   290   1,895   954   4,197   2,546   Onshore/Offshore   61   7
     Venezuela   1998   6   802   268   2,002   798   Onshore/Offshore   2   3
     Other countries       8           5,547   1,326   Offshore       1
AUSTRALIA AND OCEANIA       14   1,140   709   21,679   12,667       3   2
     Australia   2001   14   1,140   709   21,679   12,667   Offshore   3   2
Total       938   105,757   40,771   549,591   293,968       491   270
(a) Square kilometers.
(b) Developed acreage refers to those leases in which at least a portion of the area is in production or encompasses proved developed reserves.

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Contents

Eni Fact Book Exploration & Production

   Capital expenditure

 (euro million)  

2010

  

2011

  

2012

  

2013

  

2014
Acquisition of proved and unproved properties       754   43   109    
     North Africa       57   14   109    
     Sub-Saharan Africa       697   27        
     Americas           2        
Exploration   1,012   1,210   1,850   1,669   1,398
     Italy   34   38   32   32   29
     Rest of Europe   114   100   151   357   188
     North Africa   84   128   153   95   227
     Sub-Saharan Africa   406   482   1,142   757   635
     Kazakhstan   6   6   3   1    
     Rest of Asia   223   156   193   233   160
     Americas   119   60   80   110   139
     Australia and Oceania   26   240   96   84   20
Development   8,578   7,357   8,304   8,580   9,021
     Italy   630   720   744   743   880
     Rest of Europe   863   1,596   2,008   1,768   1,574
     North Africa   2,584   1,380   1,299   808   832
     Sub-Saharan Africa   1,818   1,521   1,931   2,675   3,085
     Kazakhstan   1,030   897   719   658   521
     Rest of Asia   311   361   641   749   1,105
     Americas   1,187   831   953   1,127   921
     Australia and Oceania   155   51   9   52   103
Other expenditure   100   114   110   117   105
    9,690   9,435   10,307   10,475   10,524

 

   Reserves life index

 (years)  

2010

  

2011

  

2012

  

2013

  

2014
Italy   10.9   10.4   7.6   7.3   7.7
Rest of Europe   7.4   8.0   9.0   9.8   7.8
North Africa   9.6   12.8   9.0   8.9   8.5
Sub-Saharan Africa   7.9   8.2   8.9   10.2   11.1
Kazakhstan   28.7   24.5   28.1   28.8   33.4
Rest of Asia   12.8   21.7   18.1   5.1   8.1
Americas   7.2   13.6   19.7   23.0   21.3
Australia and Oceania   13.1   12.8   9.8   16.0   17.8
    10.3   12.3   11.5   11.1   11.3

 

   Reserves replacement ratio

  

2010

  

2011

  

2012

  

2013

  

2014
(%)   organic   all sources   organic   all sources   organic   all sources   organic   all sources   organic   all sources
 
 
 
 
 
 
 
 
 
 
Italy   121   107   72   75   34       62   62     106   106
Rest of Europe   103   102   140   136   37   37   63   40     77   81
North Africa   167   167   58   58   40   40   32   34     78   78
Sub-Saharan Africa   91   90   63   58   138   117   183   183     182   176
Kazakhstan                   467   337   83   83     206   206
Rest of Asia   211   212   768   771   12   12   232         156   156
Americas   274   273   646   647   855   786   102   102     87   87
Australia and Oceania   6   5   155   163   51   51   536   536          
    127   125   143   142   147   107   105   (7 )   112   112

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Contents

Eni Fact Book Exploration & Production

   Exploratory well activity
   

Net wells completed

  

Wells in progress at Dec. 31 (a)
   
 
   

2012

  

2013

  

2014

  

2014
   
 
 
 
(units)  

Productive

  

Dry (b)

  

Productive

  

Dry (b)

  

Productive

  

Dry (b)

  

Gross

  

Net
 
 
 
 
 
 
 
 
Italy   1.0                   0.6   4.0   2.8
Rest of Europe   1.0   1.0       3.4       4.3   12.0   3.3
North Africa   6.3   11.3   4.9   5.4   3.5   4.3   13.0   10.3
Sub-Saharan Africa   4.5   5.1   3.2   6.6   7.3   7.3   49.0   16.9
Kazakhstan       0.8       0.4           6.0   1.1
Rest of Asia   0.5   0.6   4.3   2.7   1.3   4.3   12.0   5.0
Americas       0.1   0.2   1.2   2.0   1.4   4.0   2.5
Australia and Oceania       0.4       0.5       0.9   1.0   0.3
    13.3   19.3   12.6   20.2   14.1   23.1   101.0   42.2

 

   Development well activity
   

Net wells completed

  

Wells in progress at Dec. 31 (a)
   
 
   

2012

  

2013

  

2014

  

2014
   
 
 
 
(units)  

Productive

  

Dry (b)

  

Productive

  

Dry (b)

  

Productive

  

Dry (b)

  

Gross

  

Net
 
 
 
 
 
 
 
 
Italy   18.0   1.0   7.4   1.0   12.5       5.0   4.6
Rest of Europe   2.9   0.6   6.3       9.8   1.0   36.0   7.9
North Africa   46.0   1.6   61.6   3.3   54.5   1.0   15.0   7.4
Sub-Saharan Africa   27.4   0.3   26.3   1.2   31.6       23.0   7.5
Kazakhstan   1.4       0.3       1.5       22.0   3.9
Rest of Asia   41.2   0.1   61.7   4.3   54.2   1.6   19.0   8.2
Americas   23.1       13.8       22.1   0.7   20.0   6.5
Australia and Oceania                   0.1   0.4   2.0   0.5
    160.0   3.6   177.4   9.8   186.3   4.7   142.0   46.5

 

   Productive oil and gas wells (c)
   

2014
   
   

Oil wells

  

Natural gas wells
   
 
(units)  

Gross

  

Net

  

Gross

  

Net
 
 
 
 
Italy   241.0   195.1   615.0   532.4
Rest of Europe   354.0   60.6   188.0   102.9
North Africa   1,710.0   907.0   210.0   89.0
Sub-Saharan Africa   2,950.0   589.8   341.0   25.7
Kazakhstan   149.0   41.1        
Rest of Asia   475.0   363.0   956.0   364.9
Americas   201.0   112.0   366.0   127.5
Australia and Oceania   7.0   3.8   14.0   3.3
    6,087.0   2,272.4   2,690.0   1,245.7
  
(a) Includes temporary suspended wells pending further evaluation.
(b) A dry well is an exploratory, development, or extension well that proves to be incapable of producing either oil or gas sufficient quantities to justify completion as an oil or gas well.
(c) Includes 2,324 gross (799.1 net) multiple completion wells (more than one producing into the same well bore). Productive wells are producing wells and wells capable of production. One or more completions in the same bore hole are counted as one well.

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Contents

Eni Fact Book Gas & Power

   Gas & Power

 

   Key performance indicators (*)
       

2010

  

2011

  

2012

  

2013

  

2014
Injury frequency rate of total Eni workforce   (No. of accidents per million of worked hours)   3.98     3.04     2.23     1.43     0.49  
Net sales from operations (a)   (euro million)   27,806     33,093     36,198     32,212     28,250  
Operating profit       896     (326 )   (3,125 )   (2,967 )   186  
Adjusted operating profit       1,268     (247 )   398     (638 )   310  
     Marketing       923     (657 )   67     (818 )   155  
     International transport       345     410     331     180     155  
Adjusted net profit       1,267     252     479     (253 )   190  
EBITDA pro-forma adjusted       2,562     949     1,137     (28 )   760  
     Marketing       1,863     257     631     (346 )   467  
     International transport       699     692     506     318     293  
Capital expenditure       265     192     213     229     172  
Worldwide gas sales (b)   (bcm)   97.06     96.76     95.32     93.17     89.17  
LNG sales (c)       15.0     15.7     14.6     12.4     13.3  
Customers in Italy   (million)   6.88     7.10     7.45     8.00     7.93  
Electricity sold   (TWh)   39.54     40.28     42.58     35.05     33.58  
Employees at year end   (number)   5,072     4,795     4,836     4,616     4,228  
Direct GHG emissions   (mmtonnes CO2 eq)   13.48     12.84     12.77     11.22     10.08  
Customer satisfaction index (CSC) (d)   (%)   87.4     88.6     89.7     92.9     93.4  
Water consumption/withdrawals per kWh eq produced (EniPower)   (cm/kWh eq)   0.013     0.014     0.012     0.017     0.017  
(*) Following the divestment of the Regulated Businesses in Italy, results of the Gas & Power Division include Marketing and International transport activities. Reference periods have been restated accordingly.
(a) Before elimination of intragroup sales.
(b) Include volumes marketed by the Exploration & Production Division of 2.73 bcm (5.65, 2.86, 2.73 and 2.61 bcm in 2010, 2011, 2012 and 2013, respectively).
(c) Refers to LNG sales of the Gas & Power Division (included in worldwide gas sales) and the Exploration & Production Division.
(d) Data referred to the first half of 2014, as at the date of publication of this document Authority for Electricity Gas and Water (AEEGSI) has not still published the data for the second part of the year.

 

Performance of the year

I In 2014, the positive trend in employees’ and contractors’ injury frequency rates was confirmed (down by 66%).
I The water consumption rate of EniPower’s plants decreased in absolute terms (down by 5.9% from 2013), while the same index per kWh produced was substantially stable. The decrease was due to lower use of sea water in cooling operations at Brindisi site. Despite the reduction of water consumption in absolute terms, generation of steam and freshwater consumption were essentially stable compared to 2013.
I In 2014, adjusted net profit of the Gas & Power segment amounted to euro 190 million, up by euro 443 million from 2013. This reflected the benefits from the renegotiation of a substantial portion of the long-term gas supply portfolio, including greater one-off effects related to the purchase costs of volumes supplied in previous reporting periods. These positive effects were partially offset by declining gas and power prices against the backdrop of continuing weak demand and competitive pressure.		   I Renegotiation of long-term supply contracts and take-or-pay reductions: gas prices and related trends were better aligned to market conditions. Approximately 70% of long-term gas supply portfolio is now indexed to hub prices. Furthermore, the cash advances paid to suppliers due to the take-or-pay clause were reduced by euro 0.66 billion thanks also to sales optimization.
I Eni gas sales (89.17 bcm) were down by 4.3% compared to 2013. Eni’s sales in the domestic market of 34.04 bcm decreased by 5.1% driven by lower sales in all the business segments partially offset by higher spot sales. Barely unchanged volumes marketed in the main European markets (42.21 bcm; down by 1.1%).
I Capital expenditure of euro 172 million mainly concerned the flexibility and upgrading of combined cycle power stations (euro 98 million), as well as gas marketing initiatives (euro 66 million).

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Contents

Eni Fact Book Gas & Power

     Strategy    
   
In the Gas & Power segment, it is forecasted a structural decline in demand due to lower consumption driven by the macroeconomic crisis, competition of other sources, as well as a general oversupply situation in Europe, in the context of an increasing liquidity at hubs. Main target is the focus on profitability and sustainable cash flow, according the following guidelines: (i) complete alignment of supply portfolio to market conditions and substantial recovery of the residual amounts of gas paid in advance; (ii) simplification of operations and optimization of logistic costs with a saving of euro 300 million by 2018; and (iii) development and growth in the value added segments, in particular in the retail segment, developing the client base also through the sale of extracommodity products, trading, as well as in the LNG segment, leveraging on the marketing opportunities in premium markets and upstream integration. Cash flow from operations is expected to contribute for euro 3 billion cumulatively over the four-year plan.

   

Gas & Power value chain
Eni’s Gas & Power segment engages in all phases of the natural gas value chain: supply, trading and marketing of natural gas and LNG. This segment also includes power generation and marketing of electricity. Eni’s leading position in the European gas market is ensured by a set of competitive advantages, including our multi-country approach, long-term gas availability, access to infrastructures, market knowledge and a strong customer base, in addition to long-term relations with producing countries. Furthermore, integration with our upstream operations provides valuables growth options whereby the Company targets to monetize its large gas reserves.

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Contents

Eni Fact Book Gas & Power

1. Marketing

1.1 Natural gas

Supply
The supply of natural gas is a free activity where prices are determined by free negotiations of demand and supply involving natural gas resellers and producers. In order to secure mid and long-term access to gas availability, Eni has signed a number of long-term gas supply contracts with key producing countries that supply the European gas markets. In recent years Eni renegotiated a number of the main long-term supply contracts, thus better aligning gas prices and related trends to market conditions. 70% of long-term gas supply portfolio is now indexed to hub prices.
Eni could also leverage on the availability of natural gas deriving from equity production, the access to all phases of the LNG chain (liquefaction, shipping and regasification) and to other gas infrastructures, and by trading and risk management activity. Eni’s long-term gas requirements are met by natural gas from a total of 18 countries, where Eni signed long-term gas supply contracts or holds upstream activities and by access to continental Europe's spot markets.
In 2014, Eni’s consolidated subsidiaries supplied 82.91 bcm of natural gas, down by 2.76 bcm, or 3.2% from 2013. Gas volumes supplied outside Italy (75.99 bcm from consolidated companies), imported in Italy or sold outside Italy, represented approximately

 

92% of total supplies, down by 2.53 bcm, or 3.2% compared to the previous year, due to lower volumes purchased in particular in Russia (down 2.91 bcm), Algeria (down 1.80 bcm), Norway (down 0.73 bcm) and the United Kingdom (down 0.40 bcm), partly offset by higher volumes purchased in Libya (up 0.88 bcm) and the Netherlands (up 0.40 bcm). Supplies in Italy (6.92 bcm) registered a slight decrease from 2013 (down 0.23 bcm) due to mature fields’ decline.

Marketing in Italy and Europe
Eni operates in a liberalized market where energy customers are allowed to choose the gas supplier and, according to their specific needs, to evaluate the quality of services and offers. Overall Eni supplies approximately 2,400 customers including large companies, power generation companies, wholesalers and distributors of natural gas for automotive use. Residential users are approximately 7.93 million amid households, professionals, small and medium-sized enterprises 		  and public bodies located all over Italy, and approximately 2.2 million customers in European countries. In a trading environment characterized by a 12% drop of demand in the Italian market compared to the previous year (a similar decline was registered in the European Union) due to declining consumption in all the reference segments and raising competitive pressure, Eni carried out a number of initiatives – such as renegotiation of supply contracts, efficiency and optimization actions – in order to mitigate the negative impact of the reference scenario.

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Contents

Eni Fact Book Gas & Power

    Sales and market shares by segment  

(bcm)

  

2013

  

2014

    
    Volumes sold   Market share (%)   Volumes sold   Market share (%)   % Ch. 2014
vs. 2013
Italy to third parties   29.93   42.7   28.42   46.3   (5.0 )
     Wholesalers   4.58       4.05       (11.6 )
     Italian gas exchange and spot markets   10.68       11.96       12.0  
     Industries   6.07       4.93       (18.8 )
     Medium-sized enterprises and services   1.12       1.60       42.9  
     Power generation   2.11       1.42       (32.7 )
     Residential   5.37       4.46       (16.9 )
Own consumption   5.93       5.62       (5.2 )
TOTAL SALES IN ITALY   35.86   51.2   34.04   55.4   (5.1 )
Gas demand (a)   70.10       61.40       (12.4 )
(a) Source: Italian Ministry of Economic Development.

 

   Gas sales by market

 (bcm)  

2010

  

2011

  

2012

  

2013

  

2014
ITALY   34.29   34.68   34.78   35.86   34.04
Wholesalers   4.84   5.16   4.65   4.58   4.05
Gas release   0.68                
Italian gas exchange and spot markets   4.65   5.24   7.52   10.68   11.96
Industries   6.41   7.21   6.93   6.07   4.93
Medium-sized enterprises and services   1.09   0.88   0.81   1.12   1.60
Power generation   4.04   4.31   2.55   2.11   1.42
Residential   6.39   5.67   5.89   5.37   4.46
Own consumption   6.19   6.21   6.43   5.93   5.62
INTERNATIONAL SALES   62.77   62.08   60.54   57.31   55.13
Rest of Europe   54.52   52.98   51.02   47.35   46.22
Importers in Italy   8.44   3.24   2.73   4.67   4.01
European markets   46.08   49.74   48.29   42.68   42.21
Iberian Peninsula   7.11   7.48   6.29   4.90   5.31
Germany/Austria   5.67   6.47   7.78   8.31   7.44
Benelux   15.64   13.84   10.31   8.68   10.36
Hungary   2.36   2.24   2.02   1.84   1.55
UK   4.45   4.21   4.75   3.51   2.94
Turkey   3.95   6.86   7.22   6.73   7.12
France   6.09   7.01   8.36   7.73   7.05
Other   0.81   1.63   1.56   0.98   0.44
Extra European markets   2.60   6.24   6.79   7.35   5.85
E&P in Europe and in the Gulf of Mexico   5.65   2.86   2.73   2.61   3.06
WORLDWIDE GAS SALES   97.06   96.76   95.32   93.17   89.17

A review of Eni’s presence in key European markets is presented below:

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Contents

Eni Fact Book Gas & Power

Benelux
Through a direct presence Eni holds a key position in the Benelux Countries (Belgium, the Netherlands and Luxembourg), in particular in Belgium, which are a strategic hub of the continental gas spot market in Western Europe, thanks to their geographical position and high level of interconnectivity with the gas transit networks of continental Europe. In 2014, sales in Benelux were mainly directed to industrial companies, wholesalers and power generation and amounted to 10.36 bcm, down by 1.68 bcm, or 19.4%, due to higher spot sales.
Eni launched its brand in retail gas and power market in Belgium.
The Eni brand substituted the brands of the local operators acquired in the past few years, with the aim of becoming one of the major retail operators in France and Belgium while consolidating its leadership on the Belgian business market.

France
Eni is present in all market segments through its direct commercial activities and through its subsidiary Eni Gas & Power France sa. In 2014, sales in France amounted to 7.05 bcm, with a decrease of 0.68 bcm, or 8.8%, from a year ago. In 2013, Eni launched its brand in France, with the aim of becoming one of the major retail operators in the Country.

Germany/Austria
Eni operates in Germany through its direct marketing structure. In 2014, Eni divested its 50% stake in EnBW Eni Verwaltungsgesellschaft (EEV), a joint venture which controls the companies Gasversorgung Süddeutschland (GVS) and Terranets BW operating in the gas marketing and transport, to the partner EnBW.
In 2014, total sales in Germany/Austria amounted to 7.44 bcm, with a decrease of 0.87 bcm, or 10.5% compared to the previous year.

Spain
Eni operates in the Spanish gas market through a direct marketing structure that markets its portfolio of LNG and through a joint venture Unión Fenosa Gas "UFG" (Eni’s interest 50%) which mainly supplies natural gas to industrial clients, wholesalers and power generation utilities. In 2014, UFG gas sales amounted to 3.92 bcm (1.96 bcm Eni’s share). UFG holds an 80% interest in the Damietta liquefaction plant, on the Egyptian coast, and a 7.36% interest in a liquefaction plant in Oman. In addition, it holds interests in the Sagunto (Valencia) and El Ferrol (Galicia) regasification plants (42.5% and 18.9%, respectively). In 2014, total sales in Spain amounted to 5.31 bcm, with a decrease of 0.41 bcm, or 8.4%.

Turkey
Eni sells gas supplied from Russia and transported via the Blue Stream pipeline. In 2014, sales amounted to 7.12 bcm, with an increase of 0.39 bcm, or 5.8% from a year ago.

United Kingdom
Eni through its subsidiary ETS markets in the United Kingdom the equity gas produced at Eni’s fields in the North Sea and operates in

  the main continental natural gas hubs (NBP, Zeebrugge, TTF). In 2014, sales amounted to 2.94 bcm, with a decrease of 16.2% from a year ago.

1.2 LNG
Eni is present in all phases of the LNG business: liquefaction, gas feeding, shipping, regasification and sale through a direct presence and interests in joint ventures and associates. The LNG business registered a good profitability, leveraging on the growing energy demand in Asia and South America. In the next years Eni intends to increase sales in premium markets, redirecting the availability through portfolio optimization and a higher integration with the upstream segment.
In 2014, LNG sales (13.3 bcm) increased by 0.9 bcm from 2013.
In particular, LNG sales of the Gas & Power segment (8.9 bcm, included in worldwide gas sales) mainly concerned LNG from Qatar, Algeria and Nigeria marketed in Europe, South America and the Far East.

1.3 Power generation
Eni’s power generation sites are located in Ferrera Erbognone, Ravenna, Livorno, Mantova, Brindisi, Ferrara and Bolgiano.

Installed generation capacity as of December 31, 2014: 5,283 MW

The combined cycle gas fired technology (CCGT) ensures an high level of efficiency and low environmental impact. In particular, management estimates that for a given amount of energy (electricity and steam) produced, using the CCGT technology instead of conventional power generation technology, the emission of carbon dioxide is reduced by about 5 mmtonnes, on an energy production of 26.5 TWh.

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Contents

Eni Fact Book Gas & Power

In 2014, power generation was 19.55 TWh, down by 1.83 TWh, or 8.6% from 2013, mainly due to lower production at Ravenna and Brindisi plants due to decreasing demand. As of December 31, 2014, installed   operational capacity was 4.9 GW (4.8 GW as of December 31, 2013). Electricity trading reported a slight increase (up 2.6% to 14.03 TWh ) mainly due to higher purchases on the spot market.

2. International transport

Eni, as shipper, has transport rights on a large European and North African networks for transporting natural gas in Italy and Europe, which link key consumption basins with the main producing areas (Russia, Algeria, the North Sea, including the Netherlands, Norway, and Libya). The Company participates to both entities which operate the pipelines and entities which manage transport rights. A description of the main international pipelines currently participated or operated by Eni is provided below:
- the TTPC pipeline, 740-kilometer long, is made up of two lines that are each 370-kilometer long with a transport capacity of 33.2 bcm/y and five compression stations. This pipeline transports natural gas from Algeria across Tunisia from Oued Saf Saf at the Algerian border to Cap Bon on the Sicily Channel where it links with the TMPC pipeline;
- the TMPC pipeline for the import of Algerian gas is 775-kilometer long and consists of five lines that are each 155-kilometer long with a 		  transport capacity of 33.5 bcm/y. It crosses the Sicily Channel from Cap Bon to Mazara del Vallo in Sicily, the point of entry into the Italian natural gas transport system;
- the Green Stream pipeline for the import of Libyan gas produced at the Eni operated fields of Bahr Essalam and Wafa. It is 520-kilometer long with a transport capacity of 8 bcm/y crossing the Mediterranean Sea from Mellitah on the Libyan coast to Gela in Sicily, the point of entry into the Italian natural gas transport system; and
- Eni holds a 50% interest in the Blue Stream underwater pipeline (with a record water depth of more 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.
These assets generate a steady operating profit thanks to the sale of transport rights on a long-term basis.

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Contents

Eni Fact Book Gas & Power

   Supply of natural gas

 (bcm)  

2010

  

2011

  

2012

  

2013

  

2014
Italy   7.29     7.22     7.55     7.15     6.92  
Outside Italy                              
     Russia   14.29     21.00     19.83     29.59     26.68  
     Algeria (including LNG)   16.23     13.94     14.45     9.31     7.51  
     Libya   9.36     2.32     6.55     5.78     6.66  
     Netherlands   10.16     11.02     11.97     13.06     13.46  
     Norway   11.48     12.30     12.13     9.16     8.43  
     United Kingdom   4.14     3.57     3.20     3.04     2.64  
     Hungary   0.66     0.61     0.61     0.48     0.38  
     Qatar (LNG)   2.90     2.90     2.88     2.89     2.98  
     Other supplies of natural gas   4.42     6.16     5.43     3.63     5.56  
     Other supplies of LNG   1.56     2.23     2.09     1.58     1.69  
    75.20     76.05     79.14     78.52     75.99  
Total supplies of Eni’s own companies   82.49     83.27     86.69     85.67     82.91  
Offtake from (input to) storage   (0.20 )   1.79     (1.35 )   (0.58 )   (0.20 )
Network losses, measurement differences and other changes   (0.11 )   (0.21 )   (0.28 )   (0.31 )   (0.25 )
AVAILABLE FOR SALE BY ENI'S CONSOLIDATED SUBSIDIARIES   82.18     84.85     85.06     84.78     82.46  
AVAILABLE FOR SALE BY ENI'S AFFILIATES   9.23     9.05     7.53     5.78     3.65  
E&P volumes in Europe and in the Gulf of Mexico   5.65     2.86     2.73     2.61     3.06  
GAS VOLUMES AVAILABLE FOR SALE   97.06     96.76     95.32     93.17     89.17  

 

   Gas sales by entity

 (bcm)  

2010

  

2011

  

2012

  

2013

  

2014
Sales of consolidated companies   82.00   84.05   84.30   83.60   81.73
Italy (including own consumption)   34.23   34.60   34.66   35.76   34.04
Rest of Europe   46.74   44.84   44.57   42.30   43.07
Outside Europe   1.03   4.61   5.07   5.54   4.62
Sales of Eni’s affiliates (net to Eni)   9.41   9.85   8.29   6.96   4.38
Italy   0.06   0.08   0.12   0.10    
Rest of Europe   7.78   8.14   6.45   5.05   3.15
Outside Europe   1.57   1.63   1.72   1.81   1.23
E&P in Europe and in the Gulf of Mexico   5.65   2.86   2.73   2.61   3.06
Worldwide gas sales   97.06   96.76   95.32   93.17   89.17

 

   LNG sales

 (bcm)  

2010

  

2011

  

2012

  

2013

  

2014
G&P sales   11.2   11.8   10.5   8.4   8.9
Italy   0.2                
Rest of Europe   9.8   9.8   7.6   4.6   5.0
Extra European markets   1.2   2.0   2.9   3.8   3.9
E&P sales   3.8   3.9   4.1   4.0   4.4
Liquefaction plants:                    
Soyo (Angola)               0.1   0.1
Bontang (Indonesia)   0.7   0.6   0.6   0.5   0.5
Point Fortin (Trinidad & Tobago)   0.6   0.4   0.5   0.6   0.6
Bonny (Nigeria)   2.2   2.5   2.7   2.4   2.8
Darwin (Australia)   0.3   0.4   0.3   0.4   0.4
Total LNG sales   15.0   15.7   14.6   12.4   13.3

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Contents

Eni Fact Book Gas & Power

   Electricity sales

 (TWh)  

2010

  

2011

  

2012

  

2013

  

2014
Free market   27.84   27.25   31.84   28.73   24.86
Italian Power Exchange   7.13   8.67   6.10   1.96   4.71
Industrial plants   3.21   3.23   3.30   3.31   3.17
Other (a)   1.36   1.13   1.34   1.05   0.84
Power sales   39.54   40.28   42.58   35.05   33.58
Power generation   25.63   25.23   23.58   21.38   19.55
Trading of electricity (a)   13.91   15.05   19.00   13.67   14.03
 
(a) Include positive and negative imbalances.
  
   EniPower power stations   Installed capacity as of December 31, 2014 (a)   Effective/planned start-up   Technology   Fuel 
Power stations   (MW)            
Brindisi   1,321   2006   CCGT   gas
Ferrera Erbognone   1,030   2004   CCGT   gas/syngas
Livorno   199   2000   Power Station   gas/fuel oil
Mantova   850   2005   CCGT   gas
Ravenna   972   2004   CCGT   gas
Ferrara (b)   841   2008   CCGT   gas
Bolgiano   60   2012   Power Station   gas
Photovoltaic sites   10   2011-2015   Photovoltaic   Photovoltaic
    5,283            
 
(a) Capacity available after completion of dismantling of obsolete plants.
(b) Eni’s share of capacity.1
  

   EniPower power stations

    

2010

  

2011

  

2012

  

2013

  

2014
Purchases                        
Purchases of natural gas   (mmcm)   5,154   5,008   4,792   4,295   4,074
Purchases of other fuels   (ktoe)   547   528   462   449   338
- of which steam cracking       103   99   98   99   104
Production                        
Power generation   (TWh)   25.63   25.23   23.58   21.38   19.55
Steam generation   (ktonnes)   10,983   14,401   12,603   9,907   9,010
Installed generation capacity (in operation)   (GW)   5.3   5.3   5.3   4.8   4.9
  
    Transport infrastructure
Route  

Lines
(units)

  

Length
(km)

  

Diameter
(inch)

  

Transport capacity (a)
(bcm/y)

  

Transit capacity (b)
(bcm/y)

  

Compression stations
(No.)
 
 
 
 
 
 
TTPC (Oued Saf Saf-Cap Bon)   2 lines of km 370   740   48   34.0   33.2   5
TMPC (Cap Bon-Mazara del Vallo)   5 lines of km 155   775   20/26   33.5   33.5    
GreenStream (Mellitah-Gela)   1 line of km 520   520   32   8.0   8.0   1
Blue Stream (Beregovaya-Samsun)   2 lines of km 387   774   24   16.0   16.0   1
                         
(a) Includes both transit capacity and volumes of natural gas destined to local markets and withdrawn at different points along the pipeline.
(b) The maximum volume of natural gas coming from different entry points along the pipeline and transported to the next pipeline.
  

   Capital expenditure

 (euro million)  

2010

  

2011

  

2012

  

2013

  

2014
Italy   155   132   166   161   128
Outside Italy   110   60   47   68   44
    265   192   213   229   172
Market   248   184   200   206   164
Market   133   97   77   87   66
     Italy   40   45   43   42   30
     Outside Italy   93   52   34   45   36
Power generation   115   87   123   119   98
International transport   17   8   13   23   8
    265   192   213   229   172

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Contents

Eni Fact Book Refining & Marketing

 

   Refining & Marketing

 

   Key performance indicators
       

2010

  

2011

  

2012

  

2013

  

2014
Injury frequency rate of total Eni workforce   (No. of accidents per million of worked hours)   2.56     2.60     1.74     1.01     0.86  
Net sales from operations (a)   (euro million)   43,190     51,219     62,531     57,238     56,153  
Operating profit       149     (273 )   (1,264 )   (1,492 )   (2,229 )
Adjusted operating profit       (181 )   (539 )   (289 )   (457 )   (208 )
Adjusted net profit       (56 )   (264 )   (181 )   (232 )   (147 )
Capital expenditure       711     866     898     672     537  
Refinery throughputs on own account   (mmtonnes)   34.80     31.96     30.01     27.38     25.03  
Conversion index   (%)   61     61     61     62     51  
Balanced capacity of refineries   (kbbl/d)   757     767     767     787     617  
Retail sales of petroleum products in Europe   (mmtonnes)   11.73     11.37     10.87     9.69     9.21  
Service stations in Europe at year end   (units)   6,167     6,287     6,384     6,386     6,220  
Average throughput per service station in Europe   (kliters)   2,353     2,206     2,064     1,828     1,725  
Retail efficiency index   (%)   1.53     1.50     1.48     1.28     1.19  
Employees at year end   (number)   8,022     7,591     8,608     8,438     6,774  
Direct GHG emissions   (mmtonnes CO2 eq)   7.85     7.28     6.06     5.20     5.34  
SOx (sulphur oxide) emissions   (ktonnes SO2 eq)   28.05     23.07     16.99     10.80     6.09  
Water consumption rate (refineries)/refinery throughputs   (cm/tonnes)   28.36     31.03     25.43     19.98     22.42  
Biofuels marketed   (mmtonnes)   17.79     13.26     14.83     10.84     12.93  
Customer satisfaction index   (likert scale)   7.84     7.74     7.90     8.10     8.20  
(a) Before elimination of intragroup sales.

 

Performance of the year

I In 2014, continued the positive trend in injury frequency rate for employees and contractors (down by 14.9%).
I In 2014, the Refining & Marketing segment reduced the adjusted net loss to euro 147 million (euro 232 million in 2013) driven by improved refining margins, reflecting a fall in oil prices in the last quarter of the year and restructuring initiatives, including the start-up of the Green Refinery project in Venice, as well as cost efficiency initiatives, particularly with respect to energy and overhead costs.
I In 2014, refining throughputs were 25.03 mmtonnes, down by 8.6% from 2013. In Italy, processed volumes decreased by 11.7% mainly due to the unfavorable refinery scenario registered in the first part of the year, as well as the shutdown of the Gela and Venice refineries due to the ongoing reconversion activities.
I In 2014, the production of biofuels amounted to 12.93 mmtonnes, up by 19.3% compared to a year ago following the start-up of the bio-refinery in Porto Marghera.		   I Retail sales in Italy amounted to 6.14 mmtonnes, down by 7.5% from 2013 due to strong competitive pressure. In 2014, Eni’s average retail market share was 25.5%, down by 2 percentage points from 2013.
I Retail sales in the rest of Europe of 3.07 mmtonnes were substantially stable compared to 2013 (up by 0.7%). Higher volumes marketed in Germany and Austria were offset by lower sales of the other subsidiaries.
I Capital expenditure amounting to euro 537 million mainly related to the reconversion of the Venice site to bio-refinery, as well as maintenance and improvement of flexibility and yields of the other plants, in particular at Sannazzaro refinery (euro 362 million) and marketing activities for the rebranding of the retail distribution network (euro 175 million).
I In 2014, the expenditure in R&D in the Refining & Marketing segment amounted to approximately euro 18 million. During the year 15 patent applications were filed.

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Contents

Eni Fact Book Refining & Marketing

Portfolio rationalization

In line with the Eni’s strategy focused on selectively growing in high profitable markets, Eni signed a preliminary agreement for the divestment of its marketing activities of fuels located in Czech Republic, Slovakia and Romania. The agreement also comprises the refinery capacity to supply the marketing network through a 32.445% interest in the joint refining asset Ceská Rafinérská as (CRC). All these agreements are subject to the approval of the relevant European Antitrust Authorities.

Relaunch plan of the Gela site

In November 2014, Eni defined with the Ministry for Economic Development, the Region of Sicily and interested stakeholders a plan to restore the profitability of the Gela refinery. The key point of the agreement is the reconversion of the Gela site to a bio-refinery. The reconversion will follow the model adopted for the Venice green

  refinery, where green diesel is produced from raw vegetable materials by using the proprietary EcofiningTM technology. The agreement also defines terms for building a modern logistic hub and new initiatives in the upstream sector in Sicily, including offshore. Eni will also perform environmental remediation and clean-up activities and institute the Safety Competence Center (SCC), a center of excellence in the security field. The investment plan for such initiatives amounts to euro 2.2 billion, mainly relating to upstream projects in the Sicily region.

Start-up of Venice bio-refinery

In June 2014, the start-up of the bio-refinery of Porto Marghera was achieved, with a green diesel capacity of approximately 300 ktonnes/y. The green diesel is produced from refined vegetable oil utilizing the proprietary EcofiningTM technology. The production will fulfill half of the Eni’s annual requirement of green diesel, thus ensuring new perspectives for the industrial site of Venice and allowing economic and environmental benefits.
     
     Strategy    
   
For the next four years, the priority for the Refining & Marketing segment is the return to profitability in the context of weak fundamentals of the European refining market, affected by structural overcapacity. Eni intends to reduce refining exposure, through the reconversion of productive processes by the achievement of the breakeven level of adjusted operating profit and of cash flow from 2015 leveraging on: (i) rationalization of refining capacity and reconversion of industrial plants in Italy and abroad, reducing capacity by a further 20% in addition to the 30% capacity downsizing reached up to 2014; (ii) continuous efficiency improvement; and (iii) marketing activities development and rationalization of our portfolio in Italy and abroad. We believe that those actions will reduce our breakeven in the refining business to approximately 3 $/bbl at the end of the plan.

Activities

1. Refining

Eni, through its Refining & Marketing segment, is a leader in refining in Italy, with its five wholly-owned refineries (Sannazzaro, Livorno, Venice, Taranto and Gela), and in marketing of petroleum products.

  In the rest of Europe Eni also holds interests in certain refining poles and is active in retail and wholesale sales in Central-Eastern European countries. Eni’s refining system has balanced capacity of approximately 30.8 mmtonnes (equal to 617 kbbl/d) and a conversion index of 62%.

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Eni Fact Book Refining & Marketing

In 2014, total refinery throughputs were 25.03 mmtonnes, of which 19.92 mmtonnes in Italy and 5.11 outside Italy. Total throughputs in wholly-owned refineries were 16.24 mmtonnes, down by 2.75 mmtonnes or 14.5% from 2013. This determined a refinery utilization rate of 78%, calculated as the average Eni’s refineries complexity and their utilization rate.
Approximately 25.2% of processed volumes were supplied by Eni’s Exploration & Production segment, up by 1.5 percentage points from 2013 (23.7%).

n  Italy
Eni’s refining system in Italy is composed of five wholly-owned refineries and a 50% interest in the Milazzo refinery. Each of Eni’s refineries in Italy has operating and strategic features that aim

  at maximizing the value associated to the asset structure, the geographic location with respect to end markets, the integration with Eni’s other activities, as well as the development of green technologies.

Sannazzaro: refinery has balanced refining capacity of 200 kbbl/d and a conversion index of 70.2%. Management believes that this site is one of the most efficient refineries in Europe. Located in the Po Valley, it mainly supplies markets in North-Western Italy and Switzerland. The high flexibility and conversion capacity of this refinery allows it to process a wide range of feedstock. From a logistical standpoint this refinery is located along the route of the Central Europe pipeline, which links the Genoa terminal with French speaking Switzerland. This refinery contains two primary distillation

 

Crude oil that needs to be carried to the refinery by means of pipelines or over long distances by tanker ships undergoes processing for the separation of its components. In refineries crude oil is warmed to a temperature of approximately 400°C so that it turns into vapor. Oil vapors are injected in fractionating columns, also called distillation towers, where they flow upward through a series of plates and cool. At various temperatures they condense and return to a liquid state. While cooling and falling they separate in various hydrocarbon fractions (gasoil, kerosene, naphtha, gasoline, methane, ethane, propane and butane, fuel oil, lubricants, paraffin, wax and bitumen).

 

  Refining system in 2014
    Ownership share
(%)		   Distillation capacity (total)
(kbbl/d)		   Distillation capacity (Eni’s share)
(kbbl/d)		  
Primary balanced refining capacity (Eni’s share) (a)
(kbbl/d)		   Conversion index
(%)		   Fluid catalytic cracking - FCC
(kbbl/d)		   Residue conversion
(kbbl/d)		   Go-Finer/
Mild Hydro-cracking
(kbbl/d)		   Mild Hydro- cracking/ Hydro- cracking
(kbbl/d)		   Visbreaking/ Thermal Cracking
(kbbl/d)		   Coking
(kbbl/d)		   Distillation capacity utilization rate (Eni’s share)
(%)		   Balanced refining capacity utilization rate (Eni’s share)
(%)
 
 
 
 
 
 
 
 
 
 
 
 
 
Wholly-owned refineries       449   449   404   54   34   35   0   66   67   0   72   78
Italy                                                    
     Sannazzaro   100   223   223   200   70   34   13       51   29       75   83
     Gela   100                                                
     Taranto   100   120   120   120   56       22       15   38       62   62
     Livorno   100   106   106   84   11                           71   90
     Porto Marghera   100                                                
Partially-owned refineries (b)       874   245   213   47   167   25       99   27       85   88
Italy                                                    
     Milazzo   50   248   124   100   60   45   25       32           80   85
Germany                                                    
     Vohburg/Neustadt
     (Bayernoil)		   20   215   43   41   36   49           43           91   91
     Schwedt   8.33   231   19   19   42   49               27       102   102
Czech Republic                                                    
     Kralupy e Litvinov
     (Ceská Rafinérská)		   32.4   180   58   53   30   24           24           87   87
TOTAL       1,323   694   617   51   201   60   0   165   94   0   75   82
  
(a) Actual production capacity: Venice conversion in "Green Refinery"; Gela shutdown in HUB crudes asset.
(b) Capacity of conversion plant is 100%.

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Eni Fact Book Refining & Marketing

plants and relevant facilities, including three desulphurization units. Conversion is obtained through a fluid catalytic cracker (FCC), two hydrocrackers (HDC), the last unit entered into operations in June 2009, which enable middle distillate conversion and a visbreaking thermal conversion unit with a gasification facility loaded with heavy residue from visbreaking unit (tar) to produce syn-gas to feed the nearby EniPower power plant at Ferrera Erbognone. In 2013, the Eni Slurry Technology (EST) project was started up. The conversion plant with a 23 kbbl/d capacity is designed to process extra heavy crude with high sulphur content increasing yields in middle distillates and reducing that of fuel oil. Eni is also developing an upgrading of its conversion technology called Slurry Dual-Catalyst (an evolution of EST), which is based on a combination of two nano-catalysts and aims at increasing productivity and improving product quality, reducing expenditure and operating costs. A further project underway is the proprietary process for hydrogen production, Hydrogen SCT-CPO (Short Contact Time-Catalytic Partial Oxidation). This reforming technology transforms gaseous and liquid hydrocarbons (also derived from bio-mass) into synthetic gas (carbon monoxide and hydrogen) at competitive costs.

Taranto: refinery has balanced refining capacity of 120 kbbl/d and a conversion index of 56%. This refinery processes most of oil produced in Eni’s Val d’Agri fields carried to Taranto through the Monte Alpi pipeline (in 2014 a total of 2.91 mmtonnes of this oil was processed). It principally produces fuels for automotive use and residential heating purposes for the Southern Italian markets. The complexity is achieved through a Residue Hydroconversion Unit (RHU)-Hydrocracking process and a "Two Stage" Visbreaking-Thermal Cracking unit.

Gela: the refinery was shut down in order to activate the plan of reconversion in bio-refinery following the model adopted for the Venice green refinery and create a logistic hub.

   Livorno: refinery, with balanced refining capacity of 84 kbbl/d and a conversion index of 11%, manufactures mainly gasoline, fuel oil for bunkering and lubricant bases. Besides its primary distillation plants, this refinery contains two lubricant manufacturing lines. Its infrastructures including highways, railways and pipeline connecting the site with the local harbor and with the Florence storage sites through two pipelines optimizing intake, handling and distribution of products.

Venice (Porto Marghera): in June 2014, the start up of the bio-refinery of Porto Marghera was achieved, with green diesel capacity of approximately 300 ktonnes/y. The green diesel is produced from refined vegetable oil utilizing the proprietary EcofiningTM technology. The production will fulfill half of the Eni’s annual requirement of green diesel, thus ensuring new perspectives for the industrial site of Venice and allowing economic and environmental benefits.

Milazzo: jointly-owned by Eni and Kuwait Petroleum Italy, the refinery has balanced primary refining capacity of 124 kbbl/d (Eni’s share) and a conversion rate of 60%. Located on the Northern coast of Sicily, it is provided with two primary distillation plants, one unit of fluid catalytic cracking (FCC), one hydrocracking unit for the conversion of middle distillates (HDCK) and one unit devoted to the residue treatment process (LC-Finer).

n  Outside Italy
In Germany, Eni’s share in the Schwedt refinery is 8.3% and 20% in Bayernoil, an integrated industrial hub that includes Vohburg and Neustadt refineries. Eni’s refining capacity in Germany is approximately 60 kbbl/d mainly to supply Eni’s distribution network in Bavaria and Eastern Germany.
In the Czech Republic, Eni owns a share of 32.4% in the Céska Rafinérská which owns and operates two refineries, Kralupy and Litvinov. Eni’s refining capacity amounts to about 53 kbbl/d. The divestment of Eni’s interest is ongoing.

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Eni Fact Book Refining & Marketing

2. Logistics

Eni is a primary operator in storage and transport of petroleum products in Italy with its logistical integrated infrastructure consisting of 18 directly managed storage sites and a network of petroleum product pipelines for products sale and storage of LPG and crude. Eni’s logistic model is based on a hub structure covering five main areas. These hubs monitor and centralize product flows in order to lower collection and delivery costs. Eni holds five partnerships with major Italian operators located in the Vado Ligure-Genoa (Petrolig), Arquata Scrivia (Sigemi), Venice (Petroven), Ravenna (Petra) and Trieste (DCT) sites, they reduce logistic costs, and increase efficiency.
Eni operates in oil and refined products transport: (i) by sea through spot and long-term contracts of tanker ships; and (ii) through an owned pipeline network extending 1,462-kilometer long. Secondary distribution to retail and wholesale markets is carried out through outsourcing to little tanker owners and represent leading market positions in their own geographical area.

3. Marketing

n  Retail sales in Italy
Eni is a leader in the Italian retail market of refined products with a 25.5% market share, down by 2 percentage points from 2013.

In 2014, retail sales in Italy of 6.14 mmtonnes decreased by approximately 0.50 mmtonnes, or by 7.5% compared to 2013, driven by lower consumption of all products amidst weak demand. Average gasoline and gasoil throughput (1,534 kliters) decreased by approximately 124 kliters from 2013.
At December 31, 2014, Eni’s retail network in Italy consisted of 4,592 service stations, 170 stations less compared to December 31, 2013 (4,762 service stations), resulting from the negative balance of the closing of service stations with low throughput (97 units), lack of renewal of two motorway concessions and a negative balance of acquisitions/releases of lease concessions (71 units).
By means of the fidelity "you&eni" program, launched in February 2010 and lasting five years, as of December 31, 2014, approximately 1.9 million customers effected at least one transaction within the program of which, approximately 1 million was represented by consumer and loyalty cards. In 2014, volumes sold to customers accumulating points on their cards accounted for approximately 37% of all network throughputs, net of iperself throughputs which do not allow to accumulate points for loyalty programs.

  

n  Retail Rest of Europe
In 2014, retail sales of refined products marketed in the rest of Europe (3.07 mmtonnes) were essentially stable (up by 0.7%). Higher volumes marketed in Germany and Austria were offset by lower sales in France and in the Czech Republic.
At December 31, 2014, Eni’s retail network in the rest of Europe consisted of 1,628 service stations, with an increase of 4 units from December 31, 2013 (1,624 service stations). The network evolution was as follows: (i) the closing of 15 low throughput service stations mainly in France; (ii) the positive balance of acquisitions/releases of lease concessions (10 units), in particular in Germany and Switzerland; (iii) the purchase of 8 service stations, mainly in Germany; and (iv) the opening of 1 new outlet. Average throughput (2,258 kliters) decreased by 64 kliters compared to a year ago (2,322 kliters in 2013).

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Eni Fact Book Refining & Marketing

4. Wholesale business

Fuels
Eni markets gasoline and other fuels on the wholesale market in Italy, including diesel fuel for automotive use and for heating purposes, for agricultural vehicles and for vessels and fuel oil. Major customers are resellers, manufacturing industries, service companies, public utilities and transports, as well as final users (transporters, condominiums, farmers, fishers, etc.). Eni provides its customers with its expertise in the area of fuels with a wide range of products that cover all market requirements. Customer care and product distribution is supported by a widespread commercial and logistical organization presence all over Italy and articulated in local marketing offices and a network of agents and concessionaires.

In 2014, sales volumes on wholesale markets in Italy (7.57 mmtonnes) declined by approximately 800 ktonnes, down by 9.6%, mainly due to lower sales of all products, in particular gasoil for heating reflecting the mild climate registered in the period, as well as fuel oil and bunkering due to declining demand. Average market share in 2014 was 26.7% (28.8% in 2013). Supplies to the petrochemical industry (0.97 mmtonnes) decreased from 2013 (down by 350 ktonnes) due to lower feedstock supplies. Wholesale sales in the Rest of Europe of approximately 4.60 mmtonnes increased by 8.7% from 2013 due to increased sales in Czech Republic, Hungary and France. Other sales (21.63 mmtonnes) increased by 2.18 mmtonnes, or 11.2%, mainly due to higher sales to the other oil companies.

Eni also markets jet fuel directly at 51 airports, of which 30 are in Italy. In 2014, these sales amounted to 2.1 mmtonnes (of which 1.6 mmtonnes are in Italy). Eni is also active in the international market of bunkering, marketing marine fuel, mainly in 115 ports, of which 65 are in Italy. In 2014, marine fuel sales were 1.38 mmtonnes (1.26 mmtonnes in Italy).

LPG
In Italy, Eni is leader in LPG production, marketing and sale with 590 ktonnes sold for heating and automotive use equal to a 20% market share. An additional 289 ktonnes of LPG were marketed through other

  channels mainly to oil companies and traders. LPG activities in Italy are supported by direct production, availability from 5 bottling plants and 1 owned storage site, in addition to products imported at coastal storage sites located in Livorno, Naples and Ravenna.
Outside Italy, LPG sales in 2014 amounted to 549 ktonnes of which 410 ktonnes in Ecuador where LPG market share is approximately 37.9%.

Lubricants
Eni operates six (owned and co-owned) blending plants, in Italy, Europe, North and South America and the Far East. With a wide range of products composed of over 650 different blends Eni masters international state of art know-how for the formulation of products for vehicles (engine oil, special fluids and transmission oils) and industries lubricants for hydraulic systems, industrial machinery and metal processing. In Italy, Eni is leader in the manufacture and sale of lubricant bases. Base oils are manufactured primarily at Eni’s refinery in Livorno. Eni also owns one facility for the production of additives and solvents in Robassomero in Turin area. In 2014, retail and wholesale sales in Italy amounted to 90 ktonnes with a 23.4% market share. Eni also sold approximately 3 ktonnes of special products (white oils, transformer oil and anti-freeze fluids). Outside Italy sales amounted to approximately 100 ktonnes, of these about 92% were registered in Europe.

Oxygenates
Eni, through its subsidiary Ecofuel (100% Eni’s share), sells approximately 1 mmtonnes/y of oxygenates, mainly ethers (approximately 2.9% of world demand) and methanol (approximately 0.1% of world demand). About 81% of oxygenates are produced in Eni’s plants in Italy (Ravenna), Saudi Arabia (in joint venture with Sabic) and the remaining 19% is bought and resold. Eni distributes bio-ETBE in the Italian market in compliance with the new legislation indicating minimum content of bio-fuels. Bio-ETBE like MTBE is an octane booster gained a relevant position in the formulation of gasoline in European Union, because it is produced from ethanol from agricultural crops and qualified as bio-component in European directive on bio-fuels. In Italy from January 2014, the mandatory minimum content of bio-components in the fuels has been kept constant to 4.5 and Eni covered this bio-regulation request through the blending of Bio-ETBE and bio-diesel of 1st and 2nd generation (FAME and Green Diesel from Porto Marghera site).

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Eni Fact Book Refining & Marketing

   Supply of oil

 (mmtonnes)  

2010

  

2011

  

2012

  

2013

  

2014
                               
Equity crude oil                              
Production outside Italy   26.90     24.29     23.57     22.46     23.66  
Production in Italy   3.24     3.35     3.35     3.69     3.81  
    30.14     27.64     26.92     26.15     27.47  
Other crudes oil                              
Purchases on spot markets   20.95     20.44     24.95     25.27     25.60  
Purchases under forward contracts   17.16     10.94     10.34     14.54     17.07  
    38.11     31.38     35.29     39.81     42.67  
Total crude oil purchases   68.25     59.02     62.21     65.96     70.14  
Purchases of intermediate products   3.05     4.26     4.53     5.31     4.94  
Purchase of products   15.28     15.85     20.52     17.79     20.87  
TOTAL PURCHASES   86.58     79.13     87.26     89.06     95.95  
Consumption for power generation   (0.92 )   (0.89 )   (0.75 )   (0.55 )   (0.57 )
Other changes (a)   (2.69 )   (1.12 )   (1.63 )   (1.06 )   (0.98 )
    82.97     77.12     84.89     87.45     94.40  
  
(a) Include changes in inventories, transport declines, consumption and losses.

 

   Refinery capacity

    

2010

  

2011

  

2012

  

2013

  

2014
                         
Primary distillation capacity (a)   (kbbl/d)   930   930   930   930   694
Balanced capacity (a)       757   767   767   787   617
Refinery throughputs on own account       514   455   417   380   317
Distillation capacity utilization rate   (%)   73   72   72   66   75
  
(a) Eni’s share.

 

   Availability of refined products

 (mmtonnes)  

2010

  

2011

  

2012

  

2013

  

2014
                               
ITALY                              
At wholly-owned refineries   25.70     22.75     20.84     18.99     16.24  
Less input on account of third parties   (0.50 )   (0.49 )   (0.47 )   (0.57 )   (0.58 )
At affiliate refineries   4.36     4.74     4.52     4.14     4.26  
Refinery throughputs on own account   29.56     27.00     24.89     22.56     19.92  
Consumption and losses   (1.69 )   (1.55 )   (1.34 )   (1.23 )   (1.33 )
Products available for sale   27.87     25.45     23.55     21.33     18.59  
Purchases of refined products and change in inventories   4.24     3.22     3.35     4.42     5.38  
Products transferred to operations outside Italy   (4.18 )   (1.77 )   (2.36 )   (1.85 )   (0.64 )
Consumption for power generation   (0.92 )   (0.89 )   (0.75 )   (0.55 )   (0.57 )
Sales of products   27.01     26.01     23.79     23.35     22.76  
OUTSIDE ITALY                              
Refinery throughputs on own account   5.24     4.96     5.12     4.82     5.11  
Consumption and losses   (0.24 )   (0.23 )   (0.23 )   (0.22 )   (0.21 )
Products available for sale   5.00     4.73     4.89     4.60     4.90  
Purchases of finished products and change in inventories   10.61     12.51     17.29     13.69     16.11  
Products transferred from Italian operations   4.18     1.77     2.36     1.85     0.64  
Sales of products   19.79     19.01     24.54     20.14     21.65  
Refinery throughputs on own account   34.80     31.96     30.01     27.38     25.03  
Total equity crude input   5.02     6.54     6.39     5.93     5.81  
Total sales of refined products   46.80     45.02     48.33     43.49     44.41  
Crude oil sales   36.17     32.10     36.56     43.96     49.99  
TOTAL SALES   82.97     77.12     84.89     87.45     94.40  

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Eni Fact Book Refining & Marketing

   Production and sales

 (mmtonnes)  

2010

  

2011

  

2012

  

2013

  

2014
                     
Products:                    
     Gasoline   7.81   7.24   6.88   6.17   6.07
     Gasoil   13.63   12.95   12.24   11.31   10.31
     Jet fuel/kerosene   1.46   1.41   1.35   1.41   1.45
     Fuel oil   3.75   2.65   2.77   2.40   2.04
     LPG   0.50   0.57   0.51   0.50   0.49
     Lubricants   0.67   0.54   0.62   0.60   0.54
     Petrochemical feedstock   2.59   2.49   2.06   2.08   1.67
     Other   2.46   2.33   2.00   1.46   0.92
Total products   32.87   30.18   28.43   25.93   23.49
Sales:                    
Italy   27.01   26.01   23.79   23.35   22.76
     Gasoline   2.91   2.78   2.61   2.21   2.00
     Gasoil   9.94   9.63   9.14   8.42   7.61
     Jet fuel/kerosene   1.45   1.64   1.56   1.58   1.59
     Fuel oil   0.44   0.46   0.33   0.24   0.12
     LPG   0.59   0.60   0.61   0.62   0.59
     Lubricants   0.11   0.10   0.10   0.09   0.09
     Petrochemical feedstock   1.72   1.71   1.26   1.32   0.97
     Other   9.85   9.09   8.18   8.87   9.79
Rest of Europe   16.66   15.88   16.08   16.82   18.76
     Gasoline   1.85   1.79   1.81   1.73   1.80
     Gasoil   3.95   3.71   3.96   4.23   4.48
     Jet fuel/kerosene   0.38   0.48   0.44   0.49   0.55
     Fuel oil   0.25   0.23   0.19   0.22   0.18
     LPG   0.12   0.12   0.13   0.12   0.14
     Lubricants   0.10   0.09   0.08   0.08   0.09
     Other   10.01   9.46   9.47   9.95   11.52
Extra Europe   3.13   3.13   8.46   3.32   2.89
     Gasoline   2.74   2.62   8.00   1.55   2.23
     LPG   0.37   0.38   0.39   0.39   0.41
     Lubricants   0.02   0.02   0.01   0.02   0.01
     Other   0.00   0.11   0.06   1.36   0.24
Worldwide                    
     Gasoline   7.50   7.19   12.42   5.49   6.03
     Gasoil   13.89   13.34   13.10   12.65   12.09
     Jet fuel/kerosene   1.83   2.12   2.00   2.07   2.14
     Fuel oil   0.69   0.69   0.52   0.46   0.30
     LPG   1.08   1.10   1.13   1.13   1.14
     Lubricants   0.23   0.21   0.19   0.19   0.19
     Petrochemical feedstock   1.72   1.71   1.26   1.32   0.97
     Other   19.86   18.66   17.71   20.18   21.55
TOTAL SALES   46.80   45.02   48.33   43.49   44.41

 

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Eni Fact Book Refining & Marketing

   Sales in Italy and outside Italy by market

 (mmtonnes)  

2010

  

2011

  

2012

  

2013

  

2014
                     
Retail   8.63   8.36   7.83   6.64   6.14
Wholesale   9.45   9.36   8.62   8.37   7.57
    18.08   17.72   16.45   15.01   13.71
Petrochemicals   1.72   1.71   1.26   1.32   0.97
Other sales   7.21   6.58   6.08   7.01   8.08
Sales in Italy   27.01   26.01   23.79   23.34   22.76
Retail rest of Europe   3.10   3.01   3.04   3.05   3.07
Wholesale rest of Europe   3.88   3.84   3.96   4.23   4.60
Wholesale outside Europe   0.42   0.43   0.42   0.43   0.43
Retail and wholesale outside Italy   7.40   7.28   7.42   7.71   8.10
Other markets   12.39   11.73   17.12   12.44   13.55
Sales outside Italy   19.79   19.01   24.54   20.15   21.65
TOTAL SALES   46.80   45.02   48.33   43.49   44.41

 

   Retail and wholesale sales of refined products

 (mmtonnes)  

2010

  

2011

  

2012

  

2013

  

2014
                     
Italy   18.08   17.72   16.45   15.01   13.71
Retail sales   8.63   8.36   7.83   6.64   6.14
     Gasoline   2.76   2.60   2.41   1.96   1.71
     Gasoil   5.58   5.45   5.08   4.33   4.07
     LPG   0.26   0.29   0.31   0.32   0.32
     Other   0.03   0.02   0.03   0.03   0.04
Wholesale sales   9.45   9.36   8.62   8.37   7.57
     Gasoil   4.36   4.18   4.07   4.09   3.54
     Fuel oil   0.44   0.46   0.33   0.24   0.12
     LPG   0.33   0.31   0.30   0.30   0.28
     Gasoline   0.16   0.19   0.20   0.25   0.30
     Lubricants   0.10   0.10   0.09   0.09   0.09
     Bunker   1.35   1.26   1.19   1.00   0.91
     Jet fuel   1.46   1.65   1.56   1.58   1.59
     Other   1.25   1.21   0.88   0.82   0.74
Outside Italy (retail + wholesale)   7.40   7.28   7.42   7.71   8.10
     Gasoline   1.85   1.79   1.81   1.73   1.80
     Gasoil   3.95   3.82   3.96   4.23   4.48
     Jet fuel   0.40   0.49   0.44   0.51   0.56
     Fuel oil   0.25   0.23   0.19   0.22   0.18
     Lubricants   0.10   0.10   0.09   0.10   0.10
     LPG   0.49   0.50   0.52   0.51   0.55
     Other   0.36   0.35   0.41   0.41   0.43
TOTAL   25.48   25.00   23.87   22.72   21.81

 

   Number of service stations

 (units)  

2010

  

2011

  

2012

  

2013

  

2014
                         
Italy       4,542   4,701   4,780   4,762   4,592
     Ordinary stations       4,415   4,574   4,653   4,636   4,468
     Highway stations       127   127   127   126   124
Outside Italy       1,625   1,586   1,604   1,624   1,628
     Germany       455   454   445   460   469
     France       188   181   173   169   160
     Austria/Switzerland       582   547   575   585   591
     Eastern Europe       400   404   411   410   408
     Service stations selling Blu products       4,994   5,179   5,226   5,021   5,749
     "Multi-Energy" service stations       5   5   6   6   6
     Service stations selling LPG and natural gas       657   864   1,031   1,024   1,206
     Non-oil sales   (euro million)   137   156   159   151   151

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Contents

Eni Fact Book Refining & Marketing

   Average throughput

 (kliters/No. of service stations)  

2010

  

2011

  

2012

  

2013

  

2014
                     
Italy   2,322   2,173   1,976   1,657   1,534
Germany   3,360   3,237   3,226   3,279   3,299
France   2,310   2,209   2,121   2,194   2,139
Austria/Switzerland   1,711   1,645   1,879   1,890   1,891
Eastern Europe   2,508   2,591   2,145   2,044   1,979
Average throughput   2,352   2,206   2,064   1,828   1,725

 

   Market shares in Italy

 (%)  

2010

  

2011

  

2012

  

2013

  

2014
                     
Retail   30.4   30.5   31.2   27.5   25.5
Gasoline   27.9   27.8   28.8   24.8   22.3
Gasoil   32.5   32.6   33.2   29.6   27.9
LPG (automotive)   21.4   22.7   23.1   20.8   20.0
Lubricants   35.7   27.7   35.4   30.4   25.8
Wholesale   29.2   28.6   29.5   28.8   26.7
Gasoil   33.5   30.8   33.0   32.7   27.3
Fuel oil   17.8   25.5   23.3   17.5   21.8
Bunker   40.4   33.6   37.6   39.4   39.1
Lubricants   24.0   23.6   24.1   23.5   23.4
Domestic market share (retail and wholesale)   29.8   29.3   30.3   28.3   26.3

 

   Retail market shares outside Italy

 (%)  

2010

  

2011

  

2012

  

2013

  

2014
                     
Central Europe                    
Austria   7.0   9.6   11.7   11.9   12.1
Switzerland   6.5   6.6   7.1   7.3   7.3
Germany   3.4   3.1   3.2   3.2   3.2
France   1.1   1.0   0.9   0.9   0.8
Eastern Europe                    
Hungary   11.9   11.9   11.9   11.7   11.9
Czech Republic   11.8   11.6   10.8   9.8   8.9
Slovakia   9.7   9.8   9.7   9.7   9.5
Slovenia   2.3   2.2   2.2   2.3   2.4
Romania   1.5   1.7   1.8   1.9   1.8

 

   Capital expenditure

 (euro million)  

2010

  

2011

  

2012

  

2013

  

2014
                     
Italy   633   803   834   598   466
Outside Italy   78   63   64   74   71
    711   866   898   672   537
Refining, supply and logistic   446   629   675   497   362
Italy   444   626   671   491   357
Outside Italy   2   3   4   6   5
Marketing   246   228   223   175   175
Italy   170   168   163   107   109
Outside Italy   76   60   60   68   66
Other   19   9            
    711   866   898   672   537

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Eni Fact Book Versalis

   Versalis

 

   Key performance indicators
       

2010

  

2011

  

2012

  

2013

  

2014
Injury frequency rate of total Eni workforce   (No. of accidents per million of worked hours)   3.42     2.74     1.09     0.57     0.28  
Net sales from operations (a)   (euro million)   6,141     6,491     6,418     5,859     5,284  
     Intermediates       2,833     2,987     3,050     2,709     2,310  
     Polymers       3,126     3,299     3,188     2,933     2,800  
     Other sales       182     205     180     217     174  
Operating profit       (86 )   (424 )   (681 )   (725 )   (704 )
Adjusted operating profit       (96 )   (273 )   (483 )   (386 )   (346 )
Adjusted net profit       (73 )   (206 )   (395 )   (338 )   (277 )
Capital expenditure       251     216     172     314     282  
Production   (ktonnes)   7,220     6,245     6,090     5,817     5,283  
Sales of petrochemical products       4,731     4,040     3,953     3,785     3,463  
Average plant utilization rate   (%)   72.9     65.3     66.7     65.3     71.3  
Employees at year end   (number)   5,972     5,804     5,668     5,708     5,443  
Direct GHG emissions   (mmtonnes CO2 eq)   4.71     4.15     3.72     3.69     3.09  
NMVOC (Non-Methane Volatile Organic Compound) emissions   (ktonnes)   4.71     4.18     4.40     3.93     3.51  
NOx emissions (nitrogen oxide)   (ktonnes NO2 eq)   4.87     4.14     3.43     3.29     2.45  
Recycled/reused freshwater   (%)   82.7     81.9     81.6     86.2     87.7  
(a) Before elimination of intragroup sales.

 

Performance of the year

I In 2014, the injury frequency rate (employees and contractors) was more than halved (down by 50.9%) compared to 2013, continuing the positive trend registered in the last years.
I In 2014, greenhouse gas emissions and other emissions in the atmosphere were lower than in 2013 (down by 16.3%), following the substantial restructuring of the production assets of Versalis through the closure of the Hythe site, as well as the shutdown of the petrochemical site of Porto Marghera for almost all 2014. Recycled/reused freshwater rate improved, up to 87.7%.
I In 2014, adjusted net loss was euro 277 million, euro 61 million lower than in 2013, benefiting from the improvement of margins in intermediates and polyethylene reported in the last part of the year. This was achieved against the backdrop of continued weakness in commodity demand and increasing competition from non-EU producers. Results reflected efficiency initiatives and restructuring programs, mainly relating to the start-up of the Porto Torres green chemical project and the shutdown of certain unprofitable production units.		   I Sales of petrochemical products amounted to 3,463 ktonnes, down by 322 ktonnes, or 8.5% from 2013, driven by decrease in consumption.
I In 2014, the expenditure in R&D amounted to approximately euro 40 million. 14 patent applications were filed.

Restructuring of petrochemical activities in Sardinia
I In June 2014, the green chemical project of Matrìca, a 50/50 joint venture between Versalis and Novamont, started operations marking the full conversion of the Porto Torres site. Matrìca’s plant is currently leveraging on innovative technology to transform vegetable oils into monomers and intermediates that are feedstock for the production of complex bio-products destined for a number of industries such as the tyre industry, bio-lubricants and plastic production. The overall production capacity of approximately 70 ktonnes per year will come gradually online during 2015. Cracking production line was definitively closed.

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Contents

Eni Fact Book Versalis

At the end of December 2014, Versalis signed an agreement to divest the Sarroch plant to the refining company Saras, which owns a refinery close to Eni’s petrochemical site. The agreement includes the disposal of the Versalis plants connected with the production cycle of the refinery, in particular the reforming unit, the propylene splitter unit and other related services, including the logistics system.

Porto Marghera Green Chemical project
I In November 2014, Eni defined with the Ministry for Economic Development and the interested stakeholders a plan to restore the profitability of the petrochemical plant at Porto Marghera.
The project, in partnership with the US-based company Elevance Renewable Science Inc, envisages building of world-scale plants which are the first of their kind and the new technology for the production of bio-chemical intermediates from vegetable oils destined for high added-value industrial

  applications such as detergents, bio-lubricants and chemicals for the oil industry.

Development and sustainability initiatives
I In November 2014, Versalis signed a partnership with Solazyme, an US-based renewable oil and bio-products company, aimed to expand market access and commercial use of EncapsoTM, the world’s first commercially-available, biodegradable encapsulated lubricants for drilling fluids.
I Following the strategic partnership signed in 2013 with Yulex, an US-based leader in biomaterials, to produce guayule-based biorubber by using non-food feedstock, is under development the agronomic protocol and the innovative technology engineering, through the development of the entire supply chain, from the cultivation to the extraction of natural rubber, until the construction of a biomass power station.

 

     Strategy    
   
Versalis was negatively affected by a steep decline in market demand and increasing competitive pressure, mainly in commodity business with lower technological content. In this scenario, the priority is the economic sustainability of Versalis in the medium and long term. The breakeven for adjusted operating profit and operating cash flow is expected to be achieved starting from 2016, performing and completing the following strategic guidelines: (i) critical sites reconversions (in particular Porto Torres, Priolo, Porto Marghera, Sarroch and Hythe) with the shutdown and/or divestment of no more competitive production and consolidation of the other businesses; (ii) refocusing on high value-added productions (i.e. specialties) also through the development of green chemistry; and (iii) empowerment of productive platform by means of the internationalization of the business to serve consumers even more global and markets feature by high growth of demand rate, also through strategic alliances signed with industrial players.

 

The materials produced by Versalis are obtained following a manufacturing cycle which involves several processing stages. Virgin naphtha, a raw material which is a distillation product from petroleum, undergoes thermal cracking also known as steam-cracking.
The component molecules split into simpler molecules: monomers (ethylene, propylene, butadiene, etc.) and into blends of aromatic compounds.
The monomers are then reconstituted into more complex molecules: polymers. The following are produced from polymers: polyethylene, styrenes and elastomers used by processing companies to produce a whole variety of products for everyday use.
The blends of aromatic compounds, properly treated, are used to produce intermediates, so-called because they are used in the manufacturing of products for everyday use.

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Contents

Eni Fact Book Versalis

Eni through Versalis performs activities of production and marketing of petrochemical products (basic petrochemicals and polymers), leveraging on a wide range of proprietary technologies, advanced production facilities, as well as a large and efficient retail network present in 17 European countries.

Versalis’ portfolio of patents and proprietary technologies covers the whole field of basic petrochemicals and polymers: phenol and its derivatives, polyethylene, styrenes and elastomers, as well as catalysts and special chemical products.
As a producer of intermediates, all types of polyethylene and a wide range of elastomers/lattices and of the complete line of styrenic products, Versalis continues in the development of its proprietary technologies supported by the experience it gained in production and R&D. This approach favored the optimization of the design of equipment and plants, of their performance, of proprietary catalysts and other products

  that allowed it to achieve excellence in all technologies in the specific business areas in order to compete in markets worldwide. A key role is played by the most innovative proprietary catalysts, particularly those based on zeolites developed by Versalis as building blocks of some of its most advanced technologies and available worldwide.
The principal objective of basic petrochemicals is granting the adequate availability of monomers (ethylene, butadiene and benzene) covering the needs of further production processes: in particular olefins production is strictly linked with the polyethylene and elastomers business, aromatics grant the benzene availability necessary to produce intermediate products used in the production of resins, artificial fibers and polystyrene. In polymers business Versalis is one of the most relevant European producers of elastomers, where it is present in almost all the relevant sectors (in particular, in the automotive industry), polystyrene and polyethylene, whose most relevant use is in flexible packaging.

 

Business areas

Intermediates
Basic petrochemicals are one of the pillars of the activities of Versalis, whose products have a range of important industrial uses, such as the production of polyethylene, polypropylene, PVC and polystyrene. They are also used in the production of petrochemical intermediates that converge, in turn, into a range of other productive processes: plastics, rubbers, fibers, solvents and lubricants.
Intermediates revenues (euro 2,310 million) decreased by euro 399 million from 2013 (down by 14.7%) reflecting the shutdown of Porto Marghera cracker, with an effect on sold volumes of aromatics and derivatives. Lower butadiene sales (down by 31%) and xylene (down by 34%) were attributable to market weakness and production overcapacity in Europe. Average unit prices decreased by 2%, with aromatics price lowered by 7% (in particular xylene prices decreased by 15% due to demand weakness), olefins prices by 1% due to lower ethylene and butadiene prices, almost completely offset by higher prices of propylene.
Intermediates production (2,972 ktonnes) registered a decrease from the last year (down by 490 ktonnes, or 14.2%) due to reductions in olefins (down by 11%) and in aromatics (down by 31%) driven by

  the shutdown of Porto Marghera plant from February until the end of the year, as well as lower productions in Sarroch plant. In addition, derivatives productions decreased by 10% due to disruptions and maintenance standstills registered in the second part of the year.

Polymers
In the polymers business Versalis is active in the production of:
- polyethylene that accounts for approximately 40% of the total volume of world production of plastic materials. It is a basic plastic material, used as a raw material by companies that transform it into a wide range of goods;
- styrenics that are polymeric materials based on styrenes that are used in a very large number of sectors through a range of transformation technologies. The most common applications are for industrial packaging and in the food industry, small and large electrical appliances, building isolation, electrical and electronic devices, household appliances, car components and toys; and
- elastomers that are polymers characterized by high elasticity that allow them to regain their original shape even after having been subjected to extensive deformation. Versalis has a leading position

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in this sector and produces a wide range of products for the following sectors: tyres, footwear, adhesives, building components, pipes, electrical cables, car components and sealing, household appliances; they can be used as modifiers for plastics and bitumens, as additives for lubricating oils (solid elastomers); carpet backing, paper coating, molded foams (synthetic latex). Versalis is one of the world's major producers of elastomers and synthetic latex.

Polymers revenues (euro 2,800 million) decreased by euro 133 million, or by 4.5% from 2013 due to average unit prices and volumes of elastomers decreasing by 8% and 5%, respectively, driven by continuing weakness of automotive sectored demand and low price of Asian producers. These negatives were further exacerbated by the decrease of average styrenics prices (down by 4%) and sold volumes down by 4%, also due to new import flows coming from North Africa. Polyethylene prices were barely unchanged.
In the elastomers segment, a partial recovery in sales was registered in thermoplastic rubbers (up by 9%), special rubbers EPDM (up by 5%), that partially compensate lower sales of commodity rubbers (SBR

  down by 11% and BR down by 3%), nitrilic (down by 9%) and lattices (down by 19%). Lower sales of styrenes (down by 4%) is attributable to lower volumes sold of compact polystyrene (down by 4%), due to demand weakness, monomer styrol (down by 15%) due to lower production availability in Europe following the planned shutdown. The sold volumes of polyethylene reported an increase due to higher sales of HDPE (up by 7%), Eva (up by 9%) and LLDPE (up by 1%) driven by lower supply in Europe. LDPE sales decreased by 2.5%.

Polymers production (2,311 ktonnes) decreased by 1.9% from 2013, mainly in elastomers segment (down by 8%), due to the definitive closing of Hythe with lower production of lattices and SBR rubbers, and of BR rubbers due to declining demand. Styrene productions decreased by 4% with lower volumes of styrol (down by 5%) due to the planned shutdown of the second half of 2014 and compact polystyrene (down by 6%), partly offset by higher productions of ABS/San (up by 11%) for short-term production rescheduling. Polyethylene sales increased by 2%, due to higher production at Brindisi site (HDPE up by 5%) due to the planned standstill of olefin production lines, and Eva in the Oberhausen site (up by 53%).

 

   Product availability

 (ktonnes)  

2010

  

2011

  

2012

  

2013

  

2014
                               
Intermediates   4,860     4,101     3,595     3,462     2,972  
Polymers   2,360     2,144     2,495     2,355     2,311  
Production   7,220     6,245     6,090     5,817     5,283  
Consumption and losses   (2,912 )   (2,631 )   (2,545 )   (2,394 )   (2,292 )
Purchases and change in inventories   423     426     408     362     472  
    4,731     4,040     3,953     3,785     3,463  

 

   Revenues by geographic area

 (euro million)  

2010

  

2011

  

2012

  

2013

  

2014
                     
Italy   3,131   3,364   3,172   2,758   2,565
Rest of Europe   2,632   2,747   2,826   2,704   2,433
Asia   139   182   271   238   157
Americas   127   101   84   126   105
Africa   108   93   61   28   10
Other areas   4   4   4   5   14
    6,141   6,491   6,418   5,859   5,284

 

   Revenues by product

 (euro million)  

2010

  

2011

  

2012

  

2013

  

2014
                     
Olefins   1,705   1,754   1,792   1,487   1,305
Aromatics   704   835   819   791   610
Intermediates   375   359   440   431   394
Elastomers   834   1,062   979   716   627
Styrenics   744   780   774   800   745
Polyethylene   1,597   1,496   1,434   1,418   1,428
Other   182   205   180   216   174
    6,141   6,491   6,418   5,859   5,284

 

   Capital expenditure

 (euro million)  

2010

  

2011

  

2012

  

2013

  

2014
                     
    251   216   172   314   282
of which:                    
     - upkeeping   59   59   25   66   26
     - plant upgrades   116   53   53   170   161
     - HSE   29   46   38   52   30
     - energy recovery   45   42   41   8   28

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   Engineering & Construction

 

   Key performance indicators
       

2010

  

2011

  

2012

  

2013

  

2014
Injury frequency rate of total Eni workforce   (No. of accidents per million of worked hours)   0.40   0.31   0.32   0.26     0.28
Net sales from operations (a)   (euro million)   10,581   11,834   12,799   11,598     12,873
Operating profit       1,302   1,422   1,453   (98 )   18
Adjusted operating profit       1,326   1,443   1,485   (99 )   479
Adjusted net profit       994   1,098   1,111   (253 )   309
Capital expenditure       1,552   1,090   1,011   902     694
Orders acquired   (euro million)   12,935   12,505   13,391   10,062     17,971
Order backlog       20,505   20,417   19,739   17,065     22,147
Employees at year end   (number)   38,826   38,561   43,387   47,209     49,559
Employees outside Italy rate   (%)   87.3   86.5   88.1   89.1     89.9
Local managers rate       45.3   43.0   41.3   41.3     42.0
Local procurement rate       61.3   56.4   57.4   54.3     55.6
Direct GHG emissions   (mmtonnes CO2 eq)   1.11   1.32   1.54   1.54     1.42
Water withdrawals   (million of cubic meters)   6.56   7.24   8.25   8.74     6.32
(a) Before elimination of intragroup sales.

 

Performance of the year
I In 2014, the injury frequency rate registered a 7.7% increase due to a higher index for contractors (up by 12.7%), partially offset by a lower injury frequency rate for employees (down by 4.9%).
I In 2014, adjusted net profit of the Engineering & Construction segment amounted to euro 309 million; up by euro 562 million from the adjusted net loss of euro 253 million reported in 2013 which reflected extraordinary losses of margin of certain projects.
I Orders acquired amounted to euro 17,971 million (euro 10,062 million in 2013), 97% of which relating to the works outside Italy, while orders from Eni companies amounted to 8% of the total.		   I Order backlog amounted to euro 22,147 million at December 31, 2014 (euro 17,065 million at December 31, 2013), of which euro 9,035 million to be fulfilled in 2015.
I In 2014, R&D expenditure amounted approximately to euro 12 million. 20 patent applications were filed.
I Capital expenditure amounted to euro 694 million (euro 902 million in 2013), mainly regarded the upgrading of the drilling and construction fleet.

 

     Strategy    
   
For the Engineering & Construction segment, the 2014 was characterized by the return to profitability, the reduction of net debt and significant results in terms of new orders. The company has a large and diversified order backlog which will express its competitive advantage as that in: ultra deepwater projects, laying of trunk line in extreme conditions, large and complex onshore projects.

 

Engineering & Construction Offshore

Saipem is well positioned in the market of large projects for the development of offshore hydrocarbon fields leveraging on its technical and operational skills (supported by a technologically advanced fleet

 

and the ability to operate in complex environments) and engineering and project management capabilities acquired on the marketplace over recent years (such as Bouygues Offshore). Saipem intends to consolidate its market share strengthening its EPIC oriented business model and leveraging on its satisfactory long-term relationships with

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the Major oil companies and National Oil Companies. Higher levels of efficiency and flexibility are expected to be achieved by reaching the technological excellence and the highest economies of scale in its engineering hubs employing local resources in contexts where this represents a competitive advantage, integrating in its own business model the direct management of construction process through the creation of a large construction yard in South-East Asia and revamping/upgrading its construction fleet. Over the next years, Saipem will invest in the upgrading of its fleet, by building a large fabrication yard in Brazil and buying other supporting assets for drilling activity.
In 2014, revenues amounted to euro 7,202 million, up by 40% from 2013 due to higher levels of activity in South Central America, Australia and West Africa.
Orders acquired in the year amounted to euro 10,043 million (euro 5,581 million in 2013), mainly related to: (i) an EPCI contract on behalf of Total concerning conversion of the two FPSO units, with an oil capacity of 115,000 bbl/d and a storage capacity of 1.7 mmboe. The two converted FPSO units will be utilized to support the development of Kaombo field, located in Block 32 offshore Angola; (ii) a transportation and installation contract on behalf of BP for the Phase 2 of the Shah Deniz field development, offshore Azerbaijan; and (iii) an EPCI contract on behalf of Pemex, in Mexico, for the development of the Lakach field. The scope of work of the contract involves the engineering, procurement, construction and installation of the system connecting the offshore field with the onshore gas conditioning plant.
In 2014, Saipem continued the development of technologies, leveraging on the realization of innovative solutions developed in previous years, particularly in the SURF (Subsea Umbilical Risers and Flowlines) and the area of the pipelines, as well as part of the technologies applied on materials and cross functional issues. In the field of the laying of pipelines in very deep waters, various technologies have been applied in the relevant commercial projects, such as the Anti-Flooding Tool that prevents the flooding of the pipe during the laying phase and M1 technology to coating the joints.

Engineering & Construction Onshore

In the Engineering & Construction Onshore business, Saipem is one of the largest operators on turnkey contract base at a worldwide level in the oil&gas segment. Saipem operates in the construction of plants for hydrocarbon production (extraction, separation, stabilization, collection of hydrocarbons, water injection) and hydrocarbon treatment (removal and recovery of sulphur dioxide and carbon dioxide, fractioning of gaseous liquids, recovery of condensates) and in the installation of large onshore transport systems (pipelines, compression stations, terminals). Saipem preserves its own competitiveness through its technology excellence granted by its engineering hubs, its distinctive know-how in the construction of projects in the high-tech market of LNG and the management of large parts of engineering activities in cost efficient areas. In the medium term, underpinning upward trends in the oil service market, Saipem will be focused on taking advantage of the opportunities arising from the market in the plant and pipeline segments leveraging on its solid competitive position in the realization of complex projects in the strategic areas of Middle East, Caspian Sea, Northern and Western Africa and Russia.
In 2014, revenues amounted to euro 3,765 million, registering a decrease of 17% from 2013, due to lower levels of activity in the Middle East, Australia and North America partially offset by lower activity in West Africa and South Central America. Orders acquired during the year amounted to euro 6,354 million (euro 2,193 million in 2013). Among the main orders

  acquired were: (i) contracts on behalf of Saudi Aramco relating to the Integrated Gasification Combined Cycle project (Jazan) as a part of the activities related to the construction of the largest power plant in the world to be located near the namesake city of Jizan. Furthermore, Saudi Aramco awarded to Saipem an EPC contract for the Loops 4 & 5 of the Shedgum-Yanbu Gas Pipeline; (ii) a contract on behalf of Saudi Aramco relating to the expansion of the onshore production centers at the Khurais, Mazajili and Abu Jifan fields in Saudi Arabia. The construction of new facilities will allow to process additional 500,000 barrels per day from the above mentioned fields; and (iii) a contract in the Caspian Region regarding engineering, fabrication and pre-commissioning activities, as well as the load-out of pipe racks.
In onshore business, the research and development activity involved technology on proprietary process and new solutions in order to improve the quality profile of the project proposals to customers, mainly with regard to energy efficiency and environmental impact, in particular, relating to development process, continued improvements in performance and environmental compatibility of proprietary technology Snamprogetti UreaTM have been registered. Moreover, in the field of energy efficiency, studies on the production of hydroelectric power in petrochemical plants or for the production of fertilizers have been successfully completed.

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Offshore drilling

Saipem is the only engineering and construction contractor that provides both offshore and onshore drilling services to oil companies. In the offshore drilling segment, Saipem mainly operates in West Africa, the North Sea, the Mediterranean Sea and the Middle East and boasts significant market positions in the most complex segments of deep and ultra-deep offshore, leveraging on the outstanding technical features of its drilling platforms and vessels, capable of drilling exploration and development wells at a maximum water depth of 9,200 meters. In parallel, investments are ongoing to renew and to keep up the production capacity of other fleet equipment (upgrade equipment to the characteristics of projects or to clients’ needs and purchase of support equipment).
In 2014, revenues amounted to euro 1,192 million, barely unchanged from 2013. This was mainly attributable to the increased operations of the semi-submersible rigs Scarabeo 5 and Scarabeo 6, which underwent upgrade works in 2013, whose effects were partially offset by lower levels of activity performed by semi-submersible rigs Scarabeo 7, due to upkeeping works performed.
Orders acquired in the year amounted to euro 722 million (euro 1,401 million in 2013), mainly related to: (i) a contract for the lease of the semi-submersible Scarabeo 7, for the drilling at least, twelve wells, to be carried out by the first quarter of 2017, for Eni Muara Bakau BV in Indonesia; (ii) a one-year extension of the contract on behalf of Saudi Aramco for the lease of the jack-up Perro Negro

  7, for operations in Saudi Arabia; and (iii) a two-year extension of the contract on behalf of NDC (National Drilling Co) for the lease of the jack-up Perro Negro 2 for operations in the Persian Gulf starting in January 2015. During the year the company prosecuted in the development of new techniques and rigs for drilling activities in frontier areas such as Artic Sea.

Onshore drilling

Saipem operates in this segment as contractor for the major international and national oil companies executing its activity mainly in South America, Saudi Arabia, North Africa and, at a lower extent, in Europe.
In these areas Saipem can leverage its knowledge of the market, long-term relations with customers and synergies and integration with other business areas. Saipem boasts a solid track record in remote areas (in particular in the Caspian Sea), leveraging on its own operational skills and its ability to operate in complex environments.
In 2014, revenues amounted to euro 714 million, barely unchanged from 2013. Lower levels of activities in South America and Algeria were almost completely absorbed by higher levels of activities in Saudi Arabia. Orders acquired in the year amounted to euro 852 million (euro 887 million in 2013), mainly related to: (i) for various clients in Latin America (mainly in Venezuela and Peru), new contracts for the lease of rigs; and (ii) a one-year extension of the charter for operations in Saudi Arabia, on behalf of Saudi Aramco, for three rigs already operating in the Country plus the award of a five year contract for a further three rigs.

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   Main operating data

    

2010

  

2011

  

2012

  

2013

  

2014
Offshore pipelines laid   (km)   1,365   1,682   1,435   1,106   1,772
Onshore pipelines laid   (km)   385   889   543   433   1,897
Offshore structures installed   (t)   46,606   105,033   122,765   206,959   101,799
Onshore structures installed   (t)   874,428   353,480   261,410   178,252   90,873
Offshore drilling   (km)   130   178   194   201   188
Onshore drilling   (km)   881   985   953   821   878
Offshore wells drilled   (units)   44   64   104   127   123
Onshore wells drilled   (units)   279   307   373   373   427

 

   Drilling vessels
Name   Type   Drilling plant   Maximum depth
(m)		   Drilling maximum
(m)		   Other
Perro Negro 2   Jack-up   Oilwell E 2000   90   6,500   Heliport provided
Perro Negro 3   Jack-up   Ideco E 2100   90   6,000   Heliport provided
Perro Negro 5   Jack-up   National 1320 UE   90   6,500   Heliport provided
Perro Negro 6   Jack-up   National SSDG 3000   107   9,150   Heliport provided
Perro Negro 7   Jack-up   National 1625 UE   115   9,150   Heliport provided
Perro Negro 8   Jack-up   NOV SSDG 3000   107   9,100   Heliport provided
Scarabeo 3   Semi-submersible drilling platform helped propulsion system   National 1625 DE   550   7,600   Heliport provided
Scarabeo 4   Semi-submersible drilling platform helped propulsion system   National 1625 DE   550   7,600   Heliport provided
Scarabeo 5   Semi-submersible drilling platform helped propulsion system   Emco C 3   1,900   8,000   Heliport provided
Scarabeo 6   Semi-submersible drilling platform helped propulsion system   Oilwell E 3000   500   7,600   Heliport provided
Scarabeo 7   Semi-submersible drilling platform helped propulsion system   Wirth GH 3000 EG   1,500   8,000   Heliport provided
Scarabeo 8   Semi-submersible drilling platform helped propulsion system   NOV AHD-500-4600   3,000   10,660   Heliport provided
Scarabeo 9   Semi-submersible drilling platform helped propulsion system   Aker Maritime Ram Rig   3,650   15,200   Heliport provided
Saipem 10000   Ultra deep waters drillship, self-propelled, dynamic positioning   Wirth GH 4500 EG   3,000   9,200   Oil storage capacity: 140,000 bbl; heliport provided
Saipem 12000   Ultra deep waters drillship, self-propelled, dynamic positioning   NOV SSDG 5750   3,650   10,000   Heliport provided
Saipem TAD   Tender assisted drilling barge   Bentec 1500 Hp   150   4,877   Heliport provided

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   Construction vessels
Name   Type   Laying technique   Transport/lifting capability (t)   Maximum laying depth (m)   Pipelaying maximum diameter (inches)
Saipem 7000   Semi-submersible, self-propelled pipelay and DP vessel capable of lifting structures and J-laying pipelines in deep waters   J   14,000   3,000   32
Saipem FDS   Multipurpose monohull dynamically positioned crane and pipelay (J-lay) vessel utilized for the development of hydrocarbon fields in deep waters   J   600   over 2,000   22
Saipem FDS 2   Multipurpose monohull dynamically positioned crane and pipelay (J-lay) vessel utilized for the development of hydrocarbon fields in deep waters. The vessel is equipped with a J-lay tower   J, S   2,000   3,000   36
Castoro 6   Semi-submersible pipelay vessel capable of laying large diameter pipe   S   300   1,000   60
Castoro 7   Semi-submersible pipelay vessel capable of laying large diameter pipe   S       1,000   60
Castoro 8   Crane and pipelay vessel   S   2,200   600   60
Castorone   Self-propelled, dynamically positioned pipe-laying vessel operating in S-lay mode with a 120-meter long S-lay stern ramp composed of 3 articulated and adjustable stinger sections for shallow and deep-water operation, a holding capacity of up to 750 tonnes (expandable to 1,000 tonnes), pipelay capability of up to 60 inches, onboard fabrication facilities for triple and double joints and large pipe storage capacity in cargo holds   S   1,000       60
Saipem 3000   Mono-hull, self-propelled DP crane ship, capable of laying flexible pipes and umbilicals in deep waters and lifting structures       2,200        
Bar Protector   Dynamically positioned dive support vessel used for deep waters diving operations and works on platforms                
Semac 1   Semi-submersible pipelay vessel capable of laying pipes in deep waters   S   318   600   58
Castoro 2   Derrick/lay barge   S   1,000       60
Castoro 10   Trench/lay barge   S       300   60
Castoro 12   Shallow waters pipelay barge   S       1.4   40
S355   Derrick/lay barge   S   600       42
Castoro 16   Post-trenching and back-filling barge of pipelines operating in ultra-shallow waters           1.4   40
Saibos 230   Derrick pipelay barge equipped with a mobile crane for piling, marine terminals and fixed platforms   S           30
Ersai 1 (a)   Technical pontoon equipped with two crawler cranes, capable of carrying out installations whilst grounded on the seabed (1,800 tonnes + 300 tonnes)       2,100        
Ersai 2 (a)   Work barge equipped with a fixed crane capable of lifting structures       200        
Ersai 3 (a)   Self-propelled workshop/storage barge used as support vessel, with storage space and office space for 50 people                
Ersai 4 (a)   Self-propelled workshop/storage barge used as support vessel, with storage space and office space for 150 people                
Ersai 400 (a)   Accommodation barge for up to 400 people, equipped with antigas shelter for H2S leaks                
Castoro 9   Launching/cargo barge       5,000        
Castoro 11   Heavy duty cargo barge       15,000        
Castoro 14   Deck cargo barge       10,000        
Castoro 15   Deck cargo barge       6,200        
S42   Deck cargo barge, for S7000 tower storage       8,000        
S43   Deck cargo barge                
S44   Launching/cargo barge       30,000        
S45   Launching/cargo barge       20,000        
S46   Deck cargo barge                
S47   Deck cargo barge                
S600   Deck cargo barge       30,000        
FPSO - Cidade de Vitoria   FPSO unit with a production capacity of up to 100,000 barrels a day                
FPSO - Gimboa   FPSO unit with a production capacity of up to 60,000 barrels a day                
  
(a) Owned by the Saipem-managed joint venture ER SAI Caspian Contractor Llc.

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Eni Fact Book Financial Data

Financial Data

 

   Profit and loss account

 (euro million)  

2010  

  

2011  

  

2012  

  

2013  

  

2014  
                               
Net sales from operations   96,617     107,690     127,109     114,697     109,847  
Other income and revenues   967     926     1,548     1,387     1,101  
Total revenues   97,584     108,616     128,657     116,084     110,948  
Purchases, services and other   (68,774 )   (78,795 )   (95,034 )   (90,003 )   (86,340 )
Payroll and related costs   (4,428 )   (4,404 )   (4,640 )   (5,301 )   (5,337 )
Total operating expenses   (73,202 )   (83,199 )   (99,674 )   (95,304 )   (91,677 )
Other operating income (expense)   131     171     (158 )   (71 )   145  
Depreciation, depletion, amortization and impairments   (9,031 )   (8,785 )   (13,617 )   (11,821 )   (11,499 )
Operating profit   15,482     16,803     15,208     8,888     7,917  
Finance income (expense)   (749 )   (1,146 )   (1,371 )   (1,009 )   (1,065 )
Net income from investments   1,112     2,123     2,789     6,085     490  
Profit before income taxes   15,845     17,780     16,626     13,964     7,342  
Income taxes   (8,581 )   (9,903 )   (11,679 )   (9,005 )   (6,492 )
Tax rate (%)   54.2     55.7     70.2     64.5     88.4  
Net profit - continuing operations   7,264     7,877     4,947     4,959     850  
Attributable to:                              
- Eni’s shareholders   6,252     6,902     4,200     5,160     1,291  
- non-controlling interest   1,012     975     747     (201 )   (441 )
Net profit - discontinued operations   119     (74 )   3,732              
Attributable to:                              
- Eni’s shareholders   66     (42 )   3,590              
- non-controlling interest   53     (32 )   142              
Net profit   7,383     7,803     8,679     4,959     850  
Attributable to:                              
- Eni’s shareholders   6,318     6,860     7,790     5,160     1,291  
- non-controlling interest   1,065     943     889     (201 )   (441 )
Net profit attributable to Eni's shareholders - continuing operations   6,252     6,902     4,200     5,160     1,291  
Exclusion of inventory holding (gains) losses   (610 )   (724 )   (23 )   438     1,008  
Exclusion of special items   1,128     760     2,953     (1,168 )   1,408  
of which:                              
- non-recurring items   (246 )   69                    
- other special items   1,374     691     2,953     (1,168 )   1,408  
Adjusted net profit attributable to Eni’s shareholders - continuing operations   6,770     6,938     7,130     4,430     3,707  
Adjusted net profit attributable to Eni’s shareholders - discontinued operations   99     31     195              
Adjusted net profit attributable to Eni’s shareholders   6,869     6,969     7,325     4,430     3,707  

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   Summarized Group Balance Sheet

 (euro million)  

Dec. 31, 2010  

  

Dec. 31, 2011   

  

Dec. 31, 2012   

  

Dec. 31, 2013   

  

Dec. 31, 2014   
                               
Fixed assets                              
Property, plant and equipment   67,404     73,578     64,798     63,763     71,962  
Inventories - Compulsory stock   2,024     2,433     2,541     2,573     1,581  
Intangible assets   11,172     10,950     4,487     3,876     3,645  
Equity-accounted investments and other investments   6,090     6,242     8,538     6,180     5,130  
Receivables and securities held for operating purposes   1,743     1,740     1,126     1,339     1,861  
Net payables related to capital expenditure   (970 )   (1,576 )   (1,139 )   (1,255 )   (1,971 )
    87,463     93,367     80,351     76,476     82,208  
Net working capital                              
Inventories   6,589     7,575     8,578     7,939     7,555  
Trade receivables   17,221     17,709     19,958     21,212     19,709  
Trade payables   (13,111 )   (13,436 )   (15,052 )   (15,584 )   (15,015 )
Tax payables and provisions for net deferred tax liabilities   (2,684 )   (3,503 )   (3,265 )   (3,062 )   (1,865 )
Provisions   (11,792 )   (12,735 )   (13,567 )   (13,120 )   (15,898 )
Other current assets and liabilities   (1,286 )   281     1,735     1,274     222  
    (5,063 )   (4,109 )   (1,613 )   (1,341 )   (5,292 )
Provisions for employee post-retirement benefits   (1,032 )   (1,039 )   (1,407 )   (1,279 )   (1,313 )
Assets held for sale including related liabilities   479     206     155     2,156     291  
CAPITAL EMPLOYED, NET   81,847     88,425     77,486     76,012     75,894  
Shareholders’ equity                              
attributable to: - Eni's shareholders   51,206     55,472     59,060     58,210     59,754  
attributable to: - non-controlling interest   4,522     4,921     3,357     2,839     2,455  
    55,728     60,393     62,417     61,049     62,209  
Net borrowings   26,119     28,032     15,069     14,963     13,685  
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY   81,847     88,425     77,486     76,012     75,894  

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Contents

Eni Fact Book Financial Data

   Summarized Group Cash Flow Statement

 (euro million)  

2010  

  

2011  

  

2012  

  

2013  

  

2014  
                               
Net profit - continuing operations   7,264     7,877     4,947     4,959     850  
Adjustments to reconcile net profit to net cash provided by operating activities:                              
- depreciation, depletion and amortization and other non-monetary items   8,521     8,606     11,501     9,723     12,131  
- net gains on disposal of assets   (558 )   (1,176 )   (875 )   (3,770 )   (95 )
- dividends, interests, taxes and other changes   8,829     9,918     11,962     9,174     6,655  
Changes in working capital related to operations   (1,158 )   (1,696 )   (3,281 )   456     2,668  
Dividends received, taxes paid, interest (paid) received during the period   (8,758 )   (9,766 )   (11,702 )   (9,516 )   (7,099 )
Net cash provided by operating activities - continuing operations   14,140     13,763     12,552     11,026     15,110  
Net cash provided by operating activities - discontinued operations   554     619     15              
Net cash provided by operating activities   14,694     14,382     12,567     11,026     15,110  
Capital expenditure - continuing operations   (12,450 )   (11,909 )   (12,805 )   (12,800 )   (12,240 )
Capital expenditure - discontinued operations   (1,420 )   (1,529 )   (756 )            
Capital expenditure   (13,870 )   (13,438 )   (13,561 )   (12,800 )   (12,240 )
Investments and purchase of consolidated subsidiaries and businesses   (410 )   (360 )   (569 )   (317 )   (408 )
Disposals   1,113     1,912     6,025     6,360     3,684  
Other cash flow related to capital expenditure, investments and disposals   228     627     (193 )   (243 )   435  
Free cash flow   1,755     3,123     4,269     4,026     6,581  
Borrowings (repayment) of debt related to financing activities   (26 )   41     (79 )   (3,981 )   (414 )
Changes in short and long-term financial debt   2,272     1,104     5,814     1,715     (628 )
Dividends paid and changes in non-controlling interests and reserves   (4,099 )   (4,327 )   (3,743 )   (4,225 )   (4,434 )
Effect of changes in consolidation and exchange differences   39     10     (16 )   (40 )   78  
NET CASH FLOW FOR THE PERIOD   (59 )   (49 )   6,245     (2,505 )   1,183  

 

   Change in net borrowings

 (euro million)  

2010  

  

2011  

  

2012  

  

2013  

  

2014  
                               
Free cash flow   1,755     3,123     4,269     4,026     6,581  
Net borrowings of acquired companies   (33 )         (2 )   (21 )   (19 )
Net borrowings of divested companies         (192 )   12,446     (23 )      
Exchange differences on net borrowings and other changes   (687 )   (517 )   (345 )   349     (850 )
Dividends paid and changes in non-controlling interest and reserves   (4,099 )   (4,327 )   (3,743 )   (4,225 )   (4,434 )
CHANGE IN NET BORROWINGS   (3,064 )   (1,913 )   12,625     106     1,278  

 

   Net sales from operations

 (euro million)  

2010  

  

2011  

  

2012  

  

2013  

  

2014  
                               
Exploration & Production   29,497     29,121     35,874     31,264     28,488  
Gas & Power   27,806     33,093     36,198     32,212     28,250  
Refining & Marketing   43,190     51,219     62,531     57,238     56,153  
Versalis   6,141     6,491     6,418     5,859     5,284  
Engineering & Construction   10,581     11,834     12,799     11,598     12,873  
Other activities   105     85     119     80     78  
Corporate and financial companies   1,386     1,365     1,369     1,453     1,378  
Impact of unrealized intragroup profit elimination (a)   100     (54 )   (75 )   18     54  
Consolidation adjustment   (22,189 )   (25,464 )   (28,124 )   (25,025 )   (22,711 )
    96,617     107,690     127,109     114,697     109,847  
 
(a) This item concerned mainly intragroup sales of commodities, services and capital goods recorded in the assets of the purchasing business segment as of end of the period.

 

   Net sales to customers

 (euro million)  

2010  

  

2011  

  

2012  

  

2013  

  

2014  
                               
Exploration & Production   12,947     10,677     15,552     13,046     11,870  
Gas & Power   26,837     31,749     34,160     30,987     27,147  
Refining & Marketing   41,845     48,428     59,569     54,341     53,957  
Versalis   5,898     6,202     6,007     5,570     5,031  
Engineering & Construction   8,779     10,510     11,690     10,580     11,629  
Other activities   80     62     79     41     31  
Corporate and financial companies   131     116     127     114     128  
Impact of unrealized intragroup profit elimination   100     (54 )   (75 )   18     54  
    96,617     107,690     127,109     114,697     109,847  

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Contents

Eni Fact Book Financial Data

   Net sales by geographic area of destination

 (euro million)  

2010  

  

2011  

  

2012  

  

2013  

  

2014  
                       
Italy   45,896   31,906   33,860   31,949   29,621  
Other EU countries   21,125   35,920   35,909   31,629   29,933  
Rest of Europe   4,172   7,153   9,645   11,462   12,434  
Africa   13,068   11,333   14,710   12,073   11,640  
Americas   6,282   9,612   15,244   7,752   8,944  
Asia   5,785   10,258   16,394   18,608   16,257  
Other areas   289   1,508   1,347   1,224   1,018  
Total outside Italy   50,721   75,784   93,249   82,748   80,226  
    96,617   107,690   127,109   114,697   109,847  

 

   Net sales by geographic area of origin

 (euro million)  

2010  

  

2011  

  

2012  

  

2013  

  

2014  
                       
Italy   55,455   62,789   72,607   73,483   69,847  
Other EU countries   16,983   20,914   19,570   15,626   15,936  
Rest of Europe   1,986   3,101   3,736   3,292   3,264  
Africa   12,586   9,384   13,976   11,851   11,174  
Americas   5,588   7,107   12,020   5,793   5,838  
Asia   3,692   3,937   4,458   3,779   3,362  
Other areas   327   458   742   873   426  
Total outside Italy   41,162   44,901   54,502   41,214   40,000  
    96,617   107,690   127,109   114,697   109,847  

 

   Purchases, services and other

 (euro million)  

2010  

  

2011  

  

2012  

  

2013  

  

2014  
                               
Production costs - raw, ancillary and consumable materials and goods   48,407     60,826     74,643     67,004     63,605  
Production costs - services   14,939     13,551     15,142     17,711     16,979  
Operating leases and other   2,997     3,045     3,440     3,678     4,080  
Net provisions   1,401     527     856     850     494  
Other expenses   1,252     1,140     1,358     1,147     1,516  
less:                              
capitalized direct costs associated with self-constructed tangible and intangible assets   (222 )   (294 )   (405 )   (387 )   (334 )
    68,774     78,795     95,034     90,003     86,340  

 

   Principal accountant fees and services

 (euro thousand)  

2010  

  

2011  

  

2012  

  

2013  

  

2014  
                       
Audit fees   21,114   22,031   23,042   28,023   27,607  
Audit-related fees   183   1,113   1,351   1,574   1,287  
Tax fees   166   323   25   21   11  
All other fees           3          
    21,463   23,467   24,421   29,618   28,905  

 

   Payroll and related costs

 (euro million)  

2010  

  

2011  

  

2012  

  

2013  

  

2014  
                               
Wages and salaries   3,299     3,435     3,904     4,395     4,645  
Social security contributions   631     675     679     657     709  
Cost related to defined benefit plans   154     148     110     92     104  
Other costs   557     334     184     411     235  
less:                              
capitalized direct costs associated with self-constructed tangible and intangible assets   (213 )   (188 )   (237 )   (254 )   (356 )
    4,428     4,404     4,640     5,301     5,337  

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Contents

Eni Fact Book Financial Data

   Depreciation, depletion, amortization and impairments

 (euro million)  

2010  

  

2011  

  

2012  

  

2013  

  

2014  
                               
Exploration & Production   6,928     6,251     7,985     7,810     8,473  
Gas & Power   425     413     480     413     334  
Refining & Marketing   333     351     366     345     283  
Versalis   83     90     90     95     99  
Engineering & Construction   513     596     683     721     737  
Other activities   2     2     1     1     1  
Corporate and financial companies   79     75     65     61     69  
Impact of unrealized intragroup profit elimination   (20 )   (23 )   (25 )   (25 )   (26 )
Total depreciation, depletion and amortization   8,343     7,755     9,645     9,421     9,970  
Exploration & Production   123     189     547     19     690  
Gas & Power   426     154     2,443     1,685     25  
Refining & Marketing   76     488     843     633     284  
Versalis   52     160     112     44     96  
Engineering & Construction   3     35     25           420  
Other activities   8     4     2     19     14  
Total impairment   688     1,030     3,972     2,400     1,529  
    9,031     8,785     13,617     11,821     11,499  

 

   Operating profit by segment

 (euro million)  

2010  

  

2011  

  

2012  

  

2013  

  

2014  
                               
Exploration & Production   13,866     15,887     18,470     14,868     10,766  
Gas & Power   896     (326 )   (3,125 )   (2,967 )   186  
Refining & Marketing   149     (273 )   (1,264 )   (1,492 )   (2,229 )
Versalis   (86 )   (424 )   (681 )   (725 )   (704 )
Engineering & Construction   1,302     1,422     1,453     (98 )   18  
Other activities   (1,384 )   (427 )   (300 )   (337 )   (272 )
Corporate and financial companies   (361 )   (319 )   (341 )   (399 )   (246 )
Impact of unrealized intragroup profit elimination   1,100     1,263     996     38     398  
    15,482     16,803     15,208     8,888     7,917  

 

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Contents

Eni Fact Book Financial Data

Non-GAAP measures

Reconciliation of reported operating profit and reported net profit to results on an adjusted basis

Management evaluates Group and business performance on the basis of adjusted operating profit and adjusted net profit, which are arrived at by excluding inventory holding gains or losses, special items and, in determining the business segments’ adjusted results, finance charges on finance debt and interest income. The adjusted operating profit of each business segment reports gains and losses on derivative financial instruments entered into to manage exposure to movements in foreign currency exchange rates which impact industrial margins and translation of commercial payables and receivables. Accordingly also currency translation effects recorded through profit and loss are reported within business segments’ adjusted operating profit. The taxation effect of the items excluded from adjusted operating or net profit is determined based on the specific rate of taxes applicable to each of them (27.5%). The Italian statutory tax rate is applied to finance charges and income. Adjusted operating profit and adjusted net profit are non-GAAP financial measures under either IFRS, or US GAAP. Management includes them in order to facilitate a comparison of base business performance across periods, and to allow financial analysts to evaluate Eni’s trading performance on the basis of their forecasting models.

The following is a description of items that are excluded from the calculation of adjusted results.
Inventory holding gain or loss is the difference between the cost of sales of the volumes sold in the period based on the cost of supplies of the same period and the cost of sales of the volumes sold calculated using the weighted average cost method of inventory accounting.

Special items include certain significant income or charges pertaining to either: (i) infrequent or unusual events and transactions, being identified as non-recurring items under such circumstances; (ii) certain events or transactions which are not considered to be representative of the ordinary course of business, as in the case of environmental provisions, restructuring charges, asset impairments or write ups and gains or losses on divestments even though they occurred in past periods or are likely to occur in

  future ones; or (iii) exchange rate differences and derivatives relating to industrial activities and commercial payables and receivables, particularly exchange rate derivatives to manage commodity pricing formulas which are quoted in a currency other than the functional currency. Those items are reclassified in operating profit with a corresponding adjustment to net finance charges, notwithstanding the handling of foreign currency exchange risks is made centrally by netting off naturally occurring opposite positions and then dealing with any residual risk exposure in the exchange rate market.
As provided for in Decision No. 15519 of July 27, 2006 of the Italian market regulator (CONSOB), non-recurring material income or charges are to be clearly reported in the management’s discussion and financial tables. Also, special items allow to allocate to future reporting periods gains and losses on re-measurement at fair value of certain non hedging commodity derivatives and exchange rate derivatives relating to commercial exposures, lacking the criteria to be designed as hedges, including the ineffective portion of cash flow hedges and certain derivative financial instruments embedded in the pricing formula of long-term gas supply agreements of the Exploration & Production segment.

Finance charges or income related to net borrowings excluded from the adjusted net profit of business segments are comprised of interest charges on finance debt and interest income earned on cash and cash equivalents not related to operations.
Therefore, the adjusted net profit of business segments includes finance charges or income deriving from certain segment operated assets, i.e., interest income on certain receivable financing and securities related to operations and finance charge pertaining to the accretion of certain provisions recorded on a discounted basis (as in the case of the asset retirement obligations in the Exploration & Production segment). Finance charges or interest income and related taxation effects excluded from the adjusted net profit of the business segments are allocated on the aggregate Corporate and financial companies.

For a reconciliation of adjusted operating profit, adjusted net profit to reported operating profit and reported net profit see tables below.

 

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Contents

Eni Fact Book Financial Data

    2010

(euro million)
    Other activities(a)   Discontinued operations  
   
 
 
    Exploration & Production   Gas & Power (a)   Refining & Marketing   Versalis   Engineering & Construction   Corporate and financial companies   Snam   Other activities   Impact of unrealized intragroup profit elimination   GROUP   Snam   Consolidation adjustments   Total   Continuing operations
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Reported operating profit   13,866     896     149     (86 )   1,302     (361 )   2,000     (1,384 )   (271 )   16,111     (2,000 )   1,371     (629 )   15,482  
Exclusion of inventory holding (gains) losses         (117 )   (659 )   (105 )                                 (881 )                     (881 )
Exclusion of special items:                                                                                    
net asset impairments   127     426     76     52     3           10     8           702     (10 )         (10 )   692  
gains on disposal of assets   (241 )         (16 )         5           4                 (248 )   (4 )         (4 )   (252 )
risk provisions         78     2                 8           7           95                       95  
environmental charges   30     16     169                       9     1,145           1,369     (9 )         (9 )   1,360  
provision for redundancy incentives   97     52     113     26     14     88     23     10           423     (23 )         (23 )   400  
commodity derivatives         30     (10 )         (22 )                           (2 )                     (2 )
exchange rate differences and derivatives   14     195     (10 )   17                                   216                       216  
other   5     (38 )   5                             9           (19 )                     (19 )
Special items of operating profit   32     489     329     95     24     96     46     1,179           2,290     (46 )         (46 )   2,244  
Adjusted operating profit   13,898     1,268     (181 )   (96 )   1,326     (265 )   2,046     (205 )   (271 )   17,520     (2,046 )   1,371     (675 )   16,845  
Net finance (expense) income (b)   (205 )   34                 33     (783 )   22     (9 )         (908 )   (22 )         (22 )   (930 )
Net income (expense) from investments (b)   274     362     92     1     10           44     (2 )         781     (44 )         (44 )   737  
Income taxes (b)   (8,358 )   (397 )   33     22     (375 )   181     (667 )         102     (9,459 )   667     (78 )   589     (8,870 )
Tax rate (%)   59.8     23.9     ..           27.4           31.6                 54.4                       53.3  
Adjusted net profit   5,609     1,267     (56 )   (73 )   994     (867 )   1,445     (216 )   (169 )   7,934     (1,445 )   1,293     (152 )   7,782  
of which attributable to:                                                                                    
- non-controlling interest                                                         1,065                 (53 )   1,012  
- Eni’s shareholders                                                         6,869                 (99 )   6,770  
Reported net profit attributable to Eni’s shareholders                                                         6,318                 (66 )   6,252  
Exclusion of inventory holding(gains) losses                                                         (610 )                     (610 )
Exclusion of special items:                                                         1,161                 (33 )   1,128  
- non-recurring charges                                                         (246 )                     (246 )
- other special (income) charges                                                         1,407                 (33 )   1,374  
Adjusted net profit attributable to Eni’s shareholders                                                         6,869                 (99 )   6,770  

(a) Following the announced divestment plan, Snam results are reclassified from "Gas & Power" sector to "Other activities" and accounted as discontinued operations.
(b) Excluding special items.

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Contents

Eni Fact Book Financial Data

    2011

(euro million)
    Other activities(a)   Discontinued operations  
   
 
 
    Exploration & Production   Gas & Power (a)   Refining & Marketing   Versalis   Engineering & Construction   Corporate and financial companies   Snam   Other activities   Impact of unrealized intragroup profit elimination   GROUP   Snam   Consolidation adjustments   Total   Continuing operations
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Reported operating profit   15,887     (326 )   (273 )   (424 )   1,422     (319 )   2,084     (427 )   (189 )   17,435     (2,084 )   1,452     (632 )   16,803  
Exclusion of inventory holding (gains) losses         (166 )   (907 )   (40 )                                 (1,113 )                     (1,113 )
Exclusion of special items:                                                                                    
net asset impairments   190     154     488     160     35           (9 )   4           1,022     9           9     1,031  
gains on disposal of assets   (63 )         10           4     (1 )   (4 )   (7 )         (61 )   4           4     (57 )
risk provisions         77     8                 (6 )         9           88                       88  
environmental charges               34     1                 10     141           186     (10 )         (10 )   176  
provision for redundancy incentives   44     34     81     17     10     9     6     8           209     (6 )         (6 )   203  
commodity derivatives   1     45     (3 )         (28 )                           15                       15  
exchange rate differences and derivatives   (2 )   (82 )   (4 )   3                                   (85 )                     (85 )
other   18     17     27                 51     24     (13 )         124     (24 )         (24 )   100  
Special items of operating profit   188     245     641     191     21     53     27     201           1,567     (27 )         (27 )   1,540  
Adjusted operating profit   16,075     (247 )   (539 )   (273 )   1,443     (266 )   2,111     (226 )   (189 )   17,889     (2,111 )   1,452     (659 )   17,230  
Net finance (expense) income (b)   (231 )   43                       (876 )   19     5           (1,040 )   (19 )         (19 )   (1,059 )
Net income (expense) from investments (b)   624     363     99           95     1     44     (3 )         1,223     (44 )         (44 )   1,179  
Income taxes (b)   (9,603 )   93     176     67     (440 )   388     (918 )   (1 )   78     (10,160 )   918     (195 )   723     (9,437 )
Tax rate (%)   58.3     ..     ..           28.6           42.2                 56.2                       5.4  
Adjusted net profit   6,865     252     (264 )   (206 )   1,098     (753 )   1,256     (225 )   (111 )   7,912     (1,256 )   1,257     1     7,913  
of which attributable to:                                                                                    
- non-controlling interest                                                         943                 32     975  
- Eni’s shareholders                                                         6,969                 (31 )   6,938  
Reported net profit attributable to Eni’s shareholders                                                         6,860                 42     6,902  
Exclusion of inventory holding (gains) losses                                                         (724 )                     (724 )
Exclusion of special items:                                                         833                 (73 )   760  
- non-recurring charges                                                         69                       69  
- other special (income) charges                                                         764                 (73 )   691  
Adjusted net profit attributable to Eni’s shareholders                                                         6,969                 (31 )   6,938  

(a) Following the announced divestment plan, Snam results are reclassified from "Gas & Power" sector to "Other activities" and accounted as discontinued operations.
(b) Excluding special items.

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Contents

Eni Fact Book Financial Data

    2012

(euro million)
    Other activities(a)   Discontinued operations  
   
 
 
    Exploration & Production   Gas & Power (a)   Refining & Marketing   Versalis   Engineering & Construction   Corporate and financial companies   Snam   Other activities   Impact of unrealized intragroup profit elimination   GROUP   Snam   Consolidation adjustments   Total   Continuing operations
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Reported operating profit   18,470     (3,125 )   (1,264 )   (681 )   1,453     (341 )   1,679     (300 )   208     16,099     (1,679 )   788     (891 )   15,208  
Exclusion of inventory holding (gains) losses         163     (29 )   63                             (214 )   (17 )                     (17 )
Exclusion of special items:                                                                                    
asset impairments   550     2,443     846     112     25                 2           3,978                       3,978  
gains on disposal of assets   (542 )   (3 )   5     1     3           (22 )   (12 )         (570 )   22           22     (548 )
risk provisions   7     831     49     18           5           35           945                       945  
environmental charges         (2 )   40                       71     25           134     (71 )         (71 )   63  
provision for redundancy incentives   6     5     19     14     7     11     2     2           66     (2 )         (2 )   64  
commodity derivatives   1                 1     (3 )                           (1 )                     (1 )
exchange rate differences and derivatives   (9 )   (52 )   (8 )   (11 )                                 (80 )                     (80 )
other   54     138     53                             26           271                       271  
Special items of operating profit   67     3,360     1,004     135     32     16     51     78           4,743     (51 )         (51 )   4,692  
Adjusted operating profit   18,537     398     (289 )   (483 )   1,485     (325 )   1,730     (222 )   (6 )   20,825     (1,730 )   788     (942 )   19,883  
Net finance (expense) income (b)   (264 )   11     (14 )   (3 )   (7 )   (867 )   (54 )   (24 )         (1,222 )   54           54     (1,168 )
Net income (expense) from investments (b)   436     233     43     2     46     99     38     (1 )         896     (38 )         (38 )   858  
Income taxes (b)   (11,283 )   (163 )   79     89     (413 )   116     (712 )         2     (12,285 )   712     (123 )   589     (11,696 )
Tax rate (%)   60.3     25.4     ..           27.1           41.5                 59.9                       59.8  
Adjusted net profit   7,426     479     (181 )   (395 )   1,111     (977 )   1,002     (247 )   (4 )   8,214     (1,002 )   665     (337 )   7,877  
of which attributable to:                                                                                    
- non-controlling interest                                                         889                 (142 )   747  
- Eni’s shareholders                                                         7,325                 (195 )   7,130  
Reported net profit attributable to Eni’s shareholders                                                         7,790                 (3,590 )   4,200  
Exclusion of inventory holding (gains) losses                                                         (23 )                     (23 )
Exclusion of special items                                                         (442 )               3,395     2,953  
Adjusted net profit attributable to Eni’s shareholders                                                         7,325                 (195 )   7,130  

(a) Following the announced divestment plan, Snam results are reclassified from "Gas & Power" sector to "Other activities" and accounted as discontinued operations.
(b) Excluding special items.

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Contents

Eni Fact Book Financial Data

    2013

(euro million)
    Exploration & Production   Gas & Power   Refining & Marketing   Versalis   Engineering & Construction   Other activities   Corporate and financial companies     
Impact of unrealized intragroup profit elimination		   GROUP
 
 
 
 
 
 
 
 
 
Reported operating profit   14,868     (2,967 )   (1,492 )   (725 )   (98 )   (337 )   (399 )   38     8,888  
Exclusion of inventory holding (gains) losses         191     221     213                       91     716  
Exclusion of special items:                                                      
asset impairments   19     1,685     633     44           19                 2,400  
gains on disposal of assets   (283 )   1     (9 )         107     (3 )               (187 )
risk provisions   7     292           4           31                 334  
environmental charges         (1 )   93     61           52                 205  
provision for redundancy incentives   52     10     91     23     2     20     72           270  
commodity derivatives   (2 )   314     5     (1 )   (1 )                     315  
exchange rate differences and derivatives   (2 )   (186 )   (2 )   (5 )                           (195 )
other   (16 )   23     3           (109 )   8     (5 )         (96 )
Special items of operating profit   (225 )   2,138     814     126     (1 )   127     67           3,046  
Adjusted operating profit   14,643     (638 )   (457 )   (386 )   (99 )   (210 )   (332 )   129     12,650  
Net finance (expense) income (a)   (264 )   14     (6 )   (2 )   (5 )   4     (571 )         (830 )
Net income (expense) from investments (a)   367     70     56           2     1     290           786  
Income taxes (a)   (8,796 )   301     175     50     (151 )         129     (90 )   (8,382 )
Tax rate (%)   59.7     ..     ..           ..           41.5           66.5  
Adjusted net profit   5,950     (253 )   (232 )   (338 )   (253 )   (205 )   (484 )   39     4,224  
of which attributable to:                                                      
- non-controlling interest                                                   (206 )
- Eni’s shareholders                                                   4,430  
Reported net profit attributable to Eni’s shareholders                                                   5,160  
Exclusion of inventory holding (gains) losses                                                   438  
Exclusion of special items                                                   (1,168 )
Adjusted net profit attributable to Eni’s shareholders                                                   4,430  

(a) Excluding special items.

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Contents

Eni Fact Book Financial Data

    2014

(euro million)
    Exploration & Production   Gas & Power   Refining & Marketing   Versalis   Engineering & Construction   Other activities   Corporate and financial companies     
Impact of unrealized intragroup profit elimination		   GROUP
 
 
 
 
 
 
 
 
 
Reported operating profit   10,766     186     (2,229 )   (704 )   18     (272 )   (246 )   398     7,917  
Exclusion of inventory holding (gains) losses         (119 )   1,576     170                       (167 )   1,460  
Exclusion of special items:                                                      
asset impairments   692     25     284     96     420     14                 1,531  
gains on disposal of assets   (76 )         (2 )   45     2     3                 (28 )
risk provisions   (5 )   (42 )               25     7     5           (10 )
environmental charges               111     27           41                 179  
provision for redundancy incentives   24     11     (6 )         5     (3 )   (22 )         9  
commodity derivatives   (28 )   (43 )   42     4     9                       (16 )
exchange rate differences and derivatives   6     228     (9 )   4                             229  
other   172     64     25     12           32     (2 )         303  
Special items of operating profit   785     243     445     188     461     94     (19 )         2,197  
Adjusted operating profit   11,551     310     (208 )   (346 )   479     (178 )   (265 )   231     11,574  
Net finance (expense) income (a)   (287 )   7     (9 )   (3 )   (6 )   (22 )   (542 )         (862 )
Net income (expense) from investments (a)   323     49     67     (3 )   21           (156 )         301  
Income taxes (a)   (7,164 )   (176 )   3     75     (185 )         312     (79 )   (7,214 )
Tax rate (%)   61.8     48.1     ..           37.4                       65.5  
Adjusted net profit   4,423     190     (147 )   (277 )   309     (200 )   (651 )   152     3,799  
of which attributable to:                                                      
- non-controlling interest                                                   92  
- Eni’s shareholders                                                   3,707  
Reported net profit attributable to Eni’s shareholders                                                   1,291  
Exclusion of inventory holding (gains) losses                                                   1,008  
Exclusion of special items                                                   1,408  
Adjusted net profit attributable to Eni’s shareholders                                                   3,707  

(a) Excluding special items.

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Contents

Eni Fact Book Financial Data

   Breakdown of special items (a)

 (euro million)  

2010  

  

2011  

  

2012  

  

2013  

  

2014  
                               
Non-recurring charges (income)   (246 )   69                    
of which: estimated charge from the possible resolution of the TSKJ matter                              
of which: settlement/payments on antitrust and other Authorities proceedings   (246 )   69                    
Other special charges (income):   2,536     1,498     4,743     3,046     2,197  
- asset impairments   702     1,022     3,978     2,400     1,531  
- gains on disposal of assets   (248 )   (61 )   (570 )   (187 )   (28 )
- risk provisions   95     88     945     334     (10 )
- environmental charges   1,369     186     134     205     179  
- provision for redundancy incentives   423     209     66     270     9  
- commodity derivatives   (2 )   15     (1 )   315     (16 )
- exchange rate differences and derivatives   216     (85 )   (80 )   (195 )   229  
- other   (19 )   124     271     (96 )   303  
Special items of operating profit   2,290     1,567     4,743     3,046     2,197  
Net finance (income) expense   (181 )   89     203     179     203  
of which:                              
     exchange rate differences and derivatives   (216 )   85     80     195     (229 )
Net income (expense) from investments   (324 )   (883 )   (5,373 )   (5,299 )   (189 )
of which:                              
     gains on disposals of assets   (332 )   (1,118 )   (2,354 )   (3,599 )   (159 )
          of which: international transport         (1,044 )                  
          of which: divestment of the 28.57% of Eni’s interest in Eni East Africa                     (3,359 )      
          of which: Galp               (311 )   (98 )      
          of which: Snam               (2,019 )   (75 )      
          of which: Padana Energia   (169 )                        
          of which: GreenStream   (93 )                        
     gains on investment revaluation               (3,151 )   (1,682 )   (54 )
          of which: Galp               (1,700 )            
          of which: Snam               (1,451 )            
          of which: Artic Russia                     (1,682 )      
     impairments   28     191     191     11     (38 )
Income taxes   (624 )   60     (15 )   901     (270 )
of which:                              
     impairment on deferred tax assets of Italian subsidiaries               803     954     976  
     other net tax refund                           (824 )
     deferred tax adjustment on PSAs         552           490     69  
     re-allocation of tax impact on intercompany dividends and other special items   29     29     147     64     (12 )
     taxes on special items   (653 )   (521 )   (965 )   (607 )   (479 )
Total special items of net profit   1,161     833     (442 )   (1,173 )   1,941  
attributable to:                              
- non-controlling interest                     (5 )   533  
- Eni's shareholders   1,161     833     (442 )   (1,168 )   1,408  

(a) Including discontinued operations.

 

   Adjusted operating profit by segment

 (euro million)  

2010  

  

2011  

  

2012  

  

2013  

  

2014  
                               
Exploration & Production   13,898     16,075     18,537     14,643     11,551  
Gas & Power   1,268     (247 )   398     (638 )   310  
Refining & Marketing   (181 )   (539 )   (289 )   (457 )   (208 )
Versalis   (96 )   (273 )   (483 )   (386 )   (346 )
Engineering & Construction   1,326     1,443     1,485     (99 )   479  
Other activities   (205 )   (226 )   (222 )   (210 )   (178 )
Corporate and financial companies   (265 )   (266 )   (325 )   (332 )   (265 )
Impact of unrealized intragroup profit elimination   1,100     1,263     782     129     231  
    16,845     17,230     19,883     12,650     11,574  

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Contents

Eni Fact Book Financial Data

   Adjusted net profit by segment

 (euro million)  

2010  

  

2011  

  

2012  

  

2013  

  

2014  
                               
Exploration & Production   5,609     6,865     7,426     5,950     4,423  
Gas & Power   1,267     252     479     (253 )   190  
Refining & Marketing   (56 )   (264 )   (181 )   (232 )   (147 )
Versalis   (73 )   (206 )   (395 )   (338 )   (277 )
Engineering & Construction   994     1,098     1,111     (253 )   309  
Other activities   (216 )   (225 )   (247 )   (205 )   (200 )
Corporate and financial companies   (867 )   (753 )   (977 )   (484 )   (651 )
Impact of unrealized intragroup profit elimination   1,124     1,146     661     39     152  
    7,782     7,913     7,877     4,224     3,799  
of which attributable to:                              
- non-controlling interest   1,012     975     747     (206 )   92  
- Eni's shareholders   6,770     6,938     7,130     4,430     3,707  

 

   Finance income (expense)

 (euro million)  

2010  

  

2011  

  

2012  

  

2013  

  

2014  
                               
Income from equity instruments                              
Exchange differences, net   92     (111 )   131     37     (250 )
Finance income (expense) related to net borrowings and other   (634 )   (809 )   (1,101 )   (892 )   (856 )
Net income from securities   10     9     9     8     9  
Financial expense due to the passage of time (accretion discount)   (236 )   (235 )   (308 )   (240 )   (293 )
Income (expense) on derivatives   (131 )   (112 )   (252 )   (92 )   162  
less:                              
finance expense capitalized   150     112     150     170     163  
    (749 )   (1,146 )   (1,371 )   (1,009 )   (1,065 )
of which, net income from receivables and securities held for financing operating activities and interest on tax credits   64     67     46     58     111  

 

   Income (expense on) from investments

 (euro million)  

2010  

  

2011  

  

2012  

  

2013  

  

2014  
                               
Share of profit of equity-accounted investments   673     634     451     313     215  
Share of loss of equity-accounted investments   (149 )   (106 )   (250 )   (105 )   (86 )
Gains on disposals   332     1,121     349     3,598     163  
Dividends   264     659     431     400     385  
Decreases (increases) in the provision for losses on investments   (31 )   (28 )   (15 )   14     (8 )
Other income (expense), net   23     (157 )   1,823     1,865     (179 )
    1,112     2,123     2,789     6,085     490  

- 78 -

Contents

Eni Fact Book Financial Data

   Property, plant and equipment by segment (at year end)

 (euro million)  

2010  

  

2011  

  

2012  

  

2013  

  

2014  
                               
Property, plant and equipment by segment, gross                              
Exploration & Production   85,494     96,561     103,318     107,329     129,331  
Gas & Power   4,155     4,206     5,735     5,763     5,982  
Refining & Marketing   14,177     14,884     16,805     17,383     17,358  
Versalis   5,226     5,438     5,589     5,898     6,070  
Engineering & Construction   10,714     11,809     12,621     12,774     13,657  
Other activities - Snam (*)   18,355     19,449                    
Other activities   1,614     1,617     1,617     1,522     1,548  
Corporate and financial companies   372     422     470     589     653  
Impact of unrealized intragroup profit elimination   (495 )   (523 )   (486 )   (490 )   (572 )
    139,612     153,863     145,669     150,768     174,027  
Property, plant and equipment by segment, net                              
Exploration & Production   40,521     45,527     47,509     48,134     56,654  
Gas & Power   2,614     2,501     3,356     1,969     1,984  
Refining & Marketing   4,766     4,758     4,851     4,575     4,461  
Versalis   990     960     928     1,105     1,193  
Engineering & Construction   7,422     7,969     8,213     7,928     7,616  
Other activities - Snam (*)   11,262     12,016                    
Other activities   78     76     76     72     74  
Corporate and financial companies   171     196     227     322     378  
Impact of unrealized intragroup profit elimination   (420 )   (425 )   (362 )   (342 )   (398 )
    67,404     73,578     64,798     63,763     71,962  

(*) Property, plant and equipment pertaining to the segment Other activities - Snam has been reclassified from the Gas & Power segment.

 

   Capital expenditure by segment

 (euro million)  

2010  

  

2011  

  

2012  

  

2013  

  

2014  
                               
Exploration & Production   9,690     9,435     10,307     10,475     10,524  
Gas & Power   265     192     213     229     172  
Refining & Marketing   711     866     898     672     537  
Versalis   251     216     172     314     282  
Engineering & Construction   1,552     1,090     1,011     902     694  
Other activities   22     10     14     21     30  
Corporate and financial companies   109     128     152     190     83  
Impact of unrealized intragroup profit elimination   (150 )   (28 )   38     (3 )   (82 )
Capital expenditure - continuing operations   12,450     11,909     12,805     12,800     12,240  
Capital expenditure - discontinued operations   1,420     1,529     756              
Capital expenditure   13,870     13,438     13,561     12,800     12,240  
Investments   410     360     569     317     408  
Capital expenditure and investments   14,280     13,798     14,130     13,117     12,648  

 

   Capital expenditure by geographic area of origin

 (euro million)  

2010  

  

2011  

  

2012  

  

2013  

  

2014  
                       
Italy   1,624   2,058   2,170   2,044   1,785  
Other European Union countries   1,710   1,343   1,263   1,089   853  
Rest of Europe   724   1,168   1,626   1,553   1,407  
Africa   5,083   4,369   4,725   4,556   4,864  
Americas   1,156   978   1,184   1,506   1,196  
Asia   1,941   1,608   1,663   1,799   1,974  
Other areas   212   385   174   253   161  
Total outside Italy   10,826   9,851   10,635   10,756   10,455  
Capital expenditure - continuing operations   12,450   11,909   12,805   12,800   12,240  
Capital expenditure - discontinued operations                      
Italy   1,420   1,529   756          
Capital expenditure   13,870   13,438   13,561   12,800   12,240  

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Contents

Eni Fact Book Financial Data

   Net borrowings (euro million)
    Debt and bonds   Cash and cash equivalents   Securities held for trading and other securities held for non-operating purposes   Financing receivables held for non-operating purposes   Total
2010                            
Short-term debt   7,478   (1,549 )   (109 )   (6 )   5,814  
Long-term debt   20,305                     20,305  
    27,783   (1,549 )   (109 )   (6 )   26,119  
2011                            
Short-term debt   6,495   (1,500 )   (37 )   (28 )   4,930  
Long-term debt   23,102                     23,102  
    29,597   (1,500 )   (37 )   (28 )   28,032  
2012                            
Short-term debt   5,047   (7,936 )   (36 )   (1,151 )   (4,076 )
Long-term debt   19,145                     19,145  
    24,192   (7,936 )   (36 )   (1,151 )   15,069  
2013                            
Short-term debt   4,685   (5,431 )   (5,037 )   (129 )   (5,912 )
Long-term debt   20,875                     20,875  
    25,560   (5,431 )   (5,037 )   (129 )   14,963  
2014                            
Short-term debt   6,575   (6,614 )   (5,037 )   (555 )   (5,631 )
Long-term debt   19,316                     19,316  
    25,891   (6,614 )   (5,037 )   (555 )   13,685  

 

 

 

 

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Contents

Eni Fact Book Employees

Employees

 

   Employees at year end (*)

    

2010  

  

2011  

  

2012  

  

2013  

  

2014  
                           
    Italy   3,906   3,797   3,933   4,133   4,534  
Exploration & Production   Outside Italy   6,370   6,628   7,371   8,219   8,243  
        10,276   10,425   11,304   12,352   12,777  
    Italy   2,479   2,310   2,126   2,178   1,980  
Gas & Power   Outside Italy   2,593   2,485   2,710   2,438   2,248  
        5,072   4,795   4,836   4,616   4,228  
    Italy   6,162   5,790   6,098   5,909   4,897  
Refining & Marketing   Outside Italy   1,860   1,801   2,510   2,529   1,877  
        8,022   7,591   8,608   8,438   6,774  
    Italy   4,903   4,750   4,606   4,615   4,476  
Versalis   Outside Italy   1,069   1,054   1,062   1,093   967  
        5,972   5,804   5,668   5,708   5,443  
    Italy   4,915   5,197   5,186   5,136   5,016  
Engineering & Construction   Outside Italy   33,911   33,364   38,201   42,073   44,543  
        38,826   38,561   43,387   47,209   49,559  
    Italy   939   880   871   818   726  
Other activities   Outside Italy   -   -   -   -   -  
        939   880   871   818   726  
    Italy   4,497   4,334   4,577   4,589   4,594  
Corporate and financial companies   Outside Italy   164   184   154   157   304  
        4,661   4,518   4,731   4,746   4,898  
    Italy   27,801   27,058   27,397   27,378   26,223  
Total employees at year end   Outside Italy   45,967   45,516   52,008   56,509   58,182  
        73,768   72,574   79,405   83,887   84,405  
of which: senior managers       1,454   1,468   1,504   1,505   1,503  

(*) 2012, 2013 and 2014 data include employees of consolidated subsidiaries and equity accounted entities.

 

 

 

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Contents

Eni Fact Book Supplemental oil and gas information

Supplemental oil and gas information

 

Oil and natural gas reserves

Eni’s criteria concerning evaluation and classification of proved developed and undeveloped reserves follow Regulation S-X 4-10 of the US Securities and Exchange Commission and have been disclosed in accordance with FASB Extractive Activities - Oil & Gas (Topic 932).
Proved oil and gas reserves are those quantities of oil and gas, which, by analysis of geoscience and engineering data, can be estimated with reasonable certainty to be economically producible, from a given date forward, from known reservoirs, and under existing economic conditions, operating methods, and government regulations, prior to the time at which contracts providing the right to operate expire, unless evidence indicates that renewal is reasonably certain, regardless of whether deterministic or probabilistic methods are used for the estimation. The project to extract the hydrocarbons must have commenced or the operator must be reasonably certain that it will commence the project within a reasonable time. Existing economic conditions include prices and costs at which economic producibility from a reservoir is to be determined. The price shall be the average price during the 12-month period prior to the ending date of the period covered by the report, determined as an unweighted arithmetic average of the first-day-of-the-month price for each month within such period, unless prices are defined by contractual arrangements, excluding escalations based upon future conditions. In 2014, the average price for the marker Brent crude oil was $101 per barrel. Net proved reserves exclude interests and royalties owned by others. Proved reserves are classified as either developed or undeveloped. Developed oil and gas reserves are reserves that can be expected to be recovered through existing wells with existing equipment and operating methods or in which the cost of the required equipment is relatively minor compared to the cost of a new well. Undeveloped oil and gas reserves are reserves of any category that are expected to be recovered from new wells on undrilled acreage, or from existing wells where a relatively major expenditure is required for recompletion. Since 1991, Eni has requested qualified independent oil engineering companies to carry out an independent evaluation of part of its proved reserves on a rotational basis. The description of qualifications of the person primarily responsible of the reserves audit is included in the third party audit report1. In the preparation of their reports, independent evaluators rely, without independent verification, upon data furnished by Eni with respect to property interest, production, current costs of operation and development, sale agreements, prices and other factual information and data that were accepted as represented by the independent evaluators. These data, equally used by Eni in its internal process, include logs, directional surveys, core and PVT (Pressure Volume Temperature) analysis, maps, oil/gas/water production/injection data of wells, reservoir studies and technical analysis relevant to field performance, long-term development plans, future capital and operating costs. In order to calculate the economic value of Eni equity reserves, actual prices applicable to

  hydrocarbon sales, price adjustments required by applicable contractual arrangements, and other pertinent information are provided. In 2014, Ryder Scott Company and DeGolyer and MacNaughton2 provided an independent evaluation of about 27% of Eni’s total proved reserves as of December 31, 20143, confirming, as in previous years, the reasonableness of Eni’s internal evaluations. In the three-year period from 2012 to 2014, 94% of Eni’s total proved reserves were subject to independent evaluation. As of December 31, 2014, the principal properties not subjected to independent evaluation in the last three years are M’Boundi (Congo) and Junin 5 (Venezuela). Eni operates under production sharing agreements, in several of the foreign jurisdictions where it has oil and gas exploration and production activities. Reserves of oil and natural gas to which Eni is entitled under PSAs arrangements are shown in accordance with Eni’s economic interest in the volumes of oil and natural gas estimated to be recoverable in future years.
Such reserves include estimated quantities allocated to Eni for recovery of costs, income taxes owed by Eni but settled by its joint venture partners (which are state-owned entities) out of Eni’s share of production and Eni’s net equity share after cost recovery. Proved oil and gas reserves associated with PSAs represented 47%, 51% and 50% of total proved reserves as of December 31, 2012, 2013 and 2014, respectively, on an oil-equivalent basis. Similar effects as PSAs apply to service and "buy-back" contracts; proved reserves associated with such contracts represented 2%, 3% and 3% of total proved reserves on an oil-equivalent basis as of December 31, 2012, 2013 and 2014, respectively.
Oil and gas reserves quantities include: (i) oil and natural gas quantities in excess of cost recovery which the Company has an obligation to purchase under certain PSAs with governments or authorities, whereby the Company serves as producer of reserves. Reserves volumes associated with oil and gas deriving from such obligation represent 1.1%, 1% and 0.6% of total proved reserves as of December 31, 2012, 2013 and 2014, respectively, on an oil equivalent basis; (ii) volumes of natural gas used for own consumption; and (iii) the quantities of hydrocarbons related to the Angola LNG plant.
Numerous uncertainties are inherent in estimating quantities of proved reserves, in projecting future productions and development expenditures. The accuracy of any reserve estimate is a function of the quality of available data and engineering and geological interpretation and evaluation. The results of drilling, testing and production after the date of the estimate may require substantial upward or downward revisions. In addition, changes in oil and natural gas prices have an effect on the quantities of Eni’s proved reserves since estimates of reserves are based on prices and costs relevant to the date when such estimates are made. Consequently, the evaluation of reserves could also significantly differ from actual oil and natural gas volumes that will be produced.
The following table presents yearly changes in estimated proved reserves, developed and undeveloped, of crude oil (including condensate and natural gas liquids) and natural gas as of December 31, 2012, 2013 and 2014.

(1) From 1991 to 2002 DeGolyer and MacNaughton, from 2003 also Ryder Scott.
(2) The reports of independent engineers are available on Eni website eni.com, section Publications/Annual Report 2014.
(3) Including reserves of equity-accounted entities.

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Contents

Eni Fact Book Supplemental oil and gas information

   Movements in net proved hydrocarbons reserves (mmboe)
    Italy (a)   Rest of Europe   North Africa   Sub-Saharan Africa   Kazakhstan   Rest of Asia   Americas   Australia and Oceania   Total
2012                                                      
Consolidated subsidiaries                                                      
     Reserves at December 31, 2011   707     630     2,031     1,021     950     230     238     133     5,940  
     of which:                                                      
     developed   540     374     1,175     742     482     129     162     112     3,716  
     undeveloped   167     256     856     279     468     101     76     21     2,224  
     Purchase of minerals in place                                                      
     Revisions of previous estimates   24     20     67     82     91     (5 )   34     8     321  
     Improved recovery         1     20     7                             28  
     Extensions and discoveries   4     6     10     86     85           9           200  
     Production   (69 )   (66 )   (213 )   (126 )   (37 )   (41 )   (45 )   (13 )   (610 )
     Sales of minerals in place   (142 )               (22 )   (48 )                     (212 )
     Reserves at December 31, 2012   524     591     1,915     1,048     1,041     184     236     128     5,667  
Equity-accounted entities                                                      
     Reserves at December 31, 2011               21     83           656     386           1,146  
     of which:                                                      
     developed               19     4           5     26           54  
     undeveloped               2     79           651     360           1,092  
     Purchase of minerals in place                                                      
     Revisions of previous estimates                                 8     247           255  
     Improved recovery                                                      
     Extensions and discoveries               1     3           10     135           149  
     Production               (2 )   (1 )         (6 )   (4 )         (13 )
     Sales of minerals in place                     (4 )               (34 )         (38 )
     Reserves at December 31, 2012               20     81           668     730           1,499  
Reserves at December 31, 2012   524     591     1,935     1,129     1,041     852     966     128     7,166  
Developed   406     349     1,100     716     458     190     190     107     3,516  
     consolidated subsidiaries   406     349     1,080     716     458     108     170     107     3,394  
     equity-accounted entities               20                 82     20           122  
Undeveloped   118     242     835     413     583     662     776     21     3,650  
     consolidated subsidiaries   118     242     835     332     583     76     66     21     2,273  
     equity-accounted entities                     81           586     710           1,377  

(a) Including approximately 767 billion cubic feet of natural gas held in storage at December 31, 2011.

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Contents

Eni Fact Book Supplemental oil and gas information

   Movements in net proved hydrocarbons reserves (mmboe)
    Italy   Rest of Europe   North Africa   Sub-Saharan Africa   Kazakhstan   Rest of Asia   Americas   Australia and Oceania   Total
2013                                                      
Consolidated subsidiaries                                                      
     Reserves at December 31, 2012   524     591     1,915     1,048     1,041     184     236     128     5,667  
     of which:                                                      
     developed   406     349     1,080     716     458     108     170     107     3,394  
     undeveloped   118     242     835     332     583     76     66     21     2,273  
     Purchase of minerals in place               4                                   4  
     Revisions of previous estimates   38     35     59     169     30     81     37     59     508  
     Improved recovery                     5                             5  
     Extensions and discoveries   4     1     6     53           38     6           108  
     Production   (67 )   (57 )   (201 )   (120 )   (36 )   (40 )   (39 )   (11 )   (571 )
     Sales of minerals in place         (13 )                                       (13 )
     Reserves at December 31, 2013   499     557     1,783     1,155     1,035     263     240     176     5,708  
Equity-accounted entities                                                      
     Reserves at December 31, 2012               20     81           668     730           1,499  
     of which:                                                      
     developed               20                 82     20           122  
     undeveloped                     81           586     710           1,377  
     Purchase of minerals in place               1     (5 )         4                    
     Revisions of previous estimates                                                      
     Improved recovery                                                      
     Extensions and discoveries                                                      
     Production               (2 )   (1 )         (13 )   (4 )         (20 )
     Sales of minerals in place                                 (652 )               (652 )
     Reserves at December 31, 2013               19     75           7     726           827  
Reserves at December 31, 2013   499     557     1,802     1,230     1,035     270     966     176     6,535  
Developed   408     343     1,022     701     566     93     171     123     3,427  
     consolidated subsidiaries   408     343     1,003     701     566     90     153     123     3,387  
     equity-accounted entities               19                 3     18           40  
Undeveloped   91     214     780     529     469     177     795     53     3,108  
     consolidated subsidiaries   91     214     780     454     469     173     87     53     2,321  
     equity-accounted entities                     75           4     708           787  

 

 

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Contents

Eni Fact Book Supplemental oil and gas information

   Movements in net proved hydrocarbons reserves (mmboe)
    Italy   Rest of Europe   North Africa   Sub-Saharan Africa   Kazakhstan   Rest of Asia   Americas   Australia and Oceania   Total
2014                                                      
Consolidated subsidiaries                                                      
     Reserves at December 31, 2013   499     557     1,783     1,155     1,035     263     240     176     5,708  
     of which:                                                      
     developed   408     343     1,003     701     566     90     153     123     3,387  
     undeveloped   91     214     780     454     469     173     87     53     2,321  
     Purchase of minerals in place         4                                         4  
     Revisions of previous estimates   68     53     154     110     64     45     26     (7 )   513  
     Improved recovery               3     1     2                       6  
     Extensions and discoveries   1     1     5     98           11     8           124  
     Production   (65 )   (70 )   (205 )   (118 )   (32 )   (34 )   (42 )   (9 )   (575 )
     Sales of minerals in place         (1 )         (7 )                           (8 )
     Reserves at December 31, 2014   503     544     1,740     1,239     1,069     285     232     160     5,772  
Equity-accounted entities                                                      
     Reserves at December 31, 2013               19     75           7     726           827  
     of which:                                                      
     developed               19                 3     18           40  
     undeveloped                     75           4     708           787  
     Purchase of minerals in place                                                      
     Revisions of previous estimates               (1 )   7                 5           11  
     Improved recovery                                                      
     Extensions and discoveries                                                      
     Production               (2 )   (1 )         (2 )   (3 )         (8 )
     Sales of minerals in place                                                      
     Reserves at December 31, 2014               16     81           5     728           830  
Reserves at December 31, 2014   503     544     1,756     1,320     1,069     290     960     160     6,602  
Developed   401     335     919     725     589     115     214     135     3,433  
     consolidated subsidiaries   401     335     904     702     589     112     188     135     3,366  
     equity-accounted entities               15     23           3     26           67  
Undeveloped   102     209     837     595     480     175     746     25     3,169  
     consolidated subsidiaries   102     209     836     537     480     173     44     25     2,406  
     equity-accounted entities               1     58           2     702           763  

 

 

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Contents

Eni Fact Book Supplemental oil and gas information

   Movements in net proved liquids reserves (mmbbl)
    Italy   Rest of Europe   North Africa   Sub-Saharan Africa   Kazakhstan   Rest of Asia   Americas   Australia and Oceania   Total
2012                                                      
Consolidated subsidiaries                                                      
     Reserves at December 31, 2011   259     372     917     670     653     106     132     25     3,134  
     of which:                                                      
     developed   184     195     622     483     215     34     92     25     1,850  
     undeveloped   75     177     295     187     438     72     40           1,284  
     Purchase of minerals in place                                                      
     Revisions of previous estimates   (9 )   10     55     26     62     (9 )   40     6     181  
     Improved recovery         1     20     7                             28  
     Extensions and discoveries         3     10     65                 8           86  
     Production   (23 )   (35 )   (98 )   (90 )   (22 )   (15 )   (26 )   (7 )   (316 )
     Sales of minerals in place                     (6 )   (23 )                     (29 )
     Reserves at December 31, 2012   227     351     904     672     670     82     154     24     3,084  
Equity-accounted entities                                                      
     Reserves at December 31, 2011               17     22           110     151           300  
     of which:                                                      
     developed               16     4                 25           45  
     undeveloped               1     18           110     126           255  
     Purchase of minerals in place                                                      
     Revisions of previous estimates                     (1 )         2                 1  
     Improved recovery                                                      
     Extensions and discoveries               1                 3                 4  
     Production               (1 )   (1 )         (1 )   (4 )         (7 )
     Sales of minerals in place                     (4 )               (28 )         (32 )
     Reserves at December 31, 2012               17     16           114     119           266  
Reserves at December 31, 2012   227     351     921     688     670     196     273     24     3,350  
Developed   165     180     601     456     203     49     128     24     1,806  
     consolidated subsidiaries   165     180     584     456     203     41     109     24     1,762  
     equity-accounted entities               17                 8     19           44  
Undeveloped   62     171     320     232     467     147     145           1,544  
     consolidated subsidiaries   62     171     320     216     467     41     45           1,322  
     equity-accounted entities                     16           106     100           222  

- 86 -

Contents

Eni Fact Book Supplemental oil and gas information

   Movements in net proved liquids reserves (mmbbl)
    Italy   Rest of Europe   North Africa   Sub-Saharan Africa   Kazakhstan   Rest of Asia   Americas   Australia and Oceania   Total
2013                                                      
Consolidated subsidiaries                                                      
     Reserves at December 31, 2012   227     351     904     672     670     82     154     24     3,084  
     of which:                                                      
     developed   165     180     584     456     203     41     109     24     1,762  
     undeveloped   62     171     320     216     467     41     45           1,322  
     Purchase of minerals in place               3                                   3  
     Revisions of previous estimates   19     16     12     83     31     62     11     2     236  
     Improved recovery                     5                             5  
     Extensions and discoveries         1     2     51                 4           58  
     Production   (26 )   (28 )   (91 )   (88 )   (22 )   (16 )   (22 )   (4 )   (297 )
     Sales of minerals in place         (10 )                                       (10 )
     Reserves at December 31, 2013   220     330     830     723     679     128     147     22     3,079  
Equity-accounted entities                                                      
     Reserves at December 31, 2012               17     16           114     119           266  
     of which:                                                      
     developed               17                 8     19           44  
     undeveloped                     16           106     100           222  
     Purchase of minerals in place                                                      
     Revisions of previous estimates                     (1 )               1              
     Improved recovery                                                      
     Extensions and discoveries                                                      
     Production               (1 )               (2 )   (4 )         (7 )
     Sales of minerals in place                                 (111 )               (111 )
     Reserves at December 31, 2013               16     15           1     116           148  
Reserves at December 31, 2013   220     330     846     738     679     129     263     22     3,227  
Developed   177     179     577     465     295     38     115     20     1,866  
     consolidated subsidiaries   177     179     561     465     295     38     96     20     1,831  
     equity-accounted entities               16                       19           35  
Undeveloped   43     151     269     273     384     91     148     2     1,361  
     consolidated subsidiaries   43     151     269     258     384     90     51     2     1,248  
     equity-accounted entities                     15           1     97           113  

 

 

 

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Contents

Eni Fact Book Supplemental oil and gas information

   Movements in net proved liquids reserves (mmbbl)
    Italy   Rest of Europe   North Africa   Sub-Saharan Africa   Kazakhstan   Rest of Asia   Americas   Australia and Oceania   Total
2014                                                      
Consolidated subsidiaries                                                      
     Reserves at December 31, 2013   220     330     830     723     679     128     147     22     3,079  
     of which:                                                      
     developed   177     179     561     465     295     38     96     20     1,831  
     undeveloped   43     151     269     258     384     90     51     2     1,248  
     Purchase of minerals in place         1                                         1  
     Revisions of previous estimates   49     35     32     70     35     16     22     (7 )   252  
     Improved recovery               3     1     2                       6  
     Extensions and discoveries   1           2     36                 5           44  
     Production   (27 )   (34 )   (91 )   (84 )   (19 )   (13 )   (27 )   (2 )   (297 )
     Sales of minerals in place         (1 )         (7 )                           (8 )
     Reserves at December 31, 2014   243     331     776     739     697     131     147     13     3,077  
Equity-accounted entities                                                      
     Reserves at December 31, 2013               16     15           1     116           148  
     of which:                                                      
     developed               16                       19           35  
     undeveloped                     15           1     97           113  
     Purchase of minerals in place                                                      
     Revisions of previous estimates               (1 )   3                 5           7  
     Improved recovery                                                      
     Extensions and discoveries                                                      
     Production               (1 )   (1 )               (4 )         (6 )
     Sales of minerals in place                                                      
     Reserves at December 31, 2014               14     17           1     117           149  
Reserves at December 31, 2014   243     331     790     756     697     132     264     13     3,226  
Developed   184     174     534     477     306     64     142     12     1,893  
     consolidated subsidiaries   184     174     521     470     306     64     116     12     1,847  
     equity-accounted entities               13     7                 26           46  
Undeveloped   59     157     256     279     391     68     122     1     1,333  
     consolidated subsidiaries   59     157     255     269     391     67     31     1     1,230  
     equity-accounted entities               1     10           1     91           103  

 

 

- 88 -

Contents

Eni Fact Book Supplemental oil and gas information

   Movements in net proved natural gas reserves (bcf)
    Italy (a)   Rest of Europe   North Africa   Sub-Saharan Africa   Kazakhstan   Rest of Asia   Americas   Australia and Oceania   Total
2012                                                      
Consolidated subsidiaries                                                      
     Reserves at December 31, 2011   2,491     1,425     6,190     1,949     1,648     685     590     604     15,582  
     of which:                                                      
     developed   1,977     995     3,070     1,437     1,480     528     385     491     10,363  
     undeveloped   514     430     3,120     512     168     157     205     113     5,219  
     Purchase of minerals in place                                                      
     Revisions of previous estimates   154     45           284     141     18     (41 )   5     606  
     Improved recovery                                                      
     Extensions and discoveries   24     15     1     113     469     2     4           628  
     Production   (254 )   (168 )   (633 )   (196 )   (81 )   (143 )   (104 )   (37 )   (1,616 )
     Sales of minerals in place   (782 )               (89 )   (139 )                     (1,010 )
     Reserves at December 31, 2012   1,633     1,317     5,558     2,061     2,038     562     449     572     14,190  
Equity-accounted entities                                                      
     Reserves at December 31, 2011         2     20     338           3,033     1,307           4,700  
     of which:                                                      
     developed               17     4           24     8           53  
     undeveloped         2     3     334           3,009     1,299           4,647  
     Purchase of minerals in place                                                      
     Revisions of previous estimates         (2 )   (2 )   3           1     1,340           1,340  
     Improved recovery                                                      
     Extensions and discoveries                     17           38     739           794  
     Production               (2 )   (2 )         (29 )               (33 )
     Sales of minerals in place                     (3 )               (31 )         (34 )
     Reserves at December 31, 2012               16     353           3,043     3,355           6,767  
Reserves at December 31, 2012   1,633     1,317     5,574     2,414     2,038     3,605     3,804     572     20,957  
Developed   1,325     925     2,736     1,429     1,401     774     340     459     9,389  
     consolidated subsidiaries   1,325     925     2,720     1,429     1,401     372     334     459     8,965  
     equity-accounted entities               16                 402     6           424  
Undeveloped   308     392     2,838     985     637     2,831     3,464     113     11,568  
     consolidated subsidiaries   308     392     2,838     632     637     190     115     113     5,225  
     equity-accounted entities                     353           2,641     3,349           6,343  

(a) Including approximately 767 billion cubic feet of natural gas held in storage at December 31, 2011.

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Contents

Eni Fact Book Supplemental oil and gas information

   Movements in net proved natural gas reserves (bcf)
    Italy   Rest of Europe   North Africa   Sub-Saharan Africa   Kazakhstan   Rest of Asia   Americas   Australia and Oceania   Total
2013                                                      
Consolidated subsidiaries                                                      
     Reserves at December 31, 2012   1,633     1,317     5,558     2,061     2,038     562     449     572     14,190  
     of which:                                                      
     developed   1,325     925     2,720     1,429     1,401     372     334     459     8,965  
     undeveloped   308     392     2,838     632     637     190     115     113     5,225  
     Purchase of minerals in place               5                                   5  
     Revisions of previous estimates   105     103     253     475     (3 )   104     142     316     1,495  
     Improved recovery                                                      
     Extensions and discoveries   24     1     24     14           208     7           278  
     Production   (230 )   (157 )   (609 )   (176 )   (78 )   (130 )   (89 )   (40 )   (1,509 )
     Sales of minerals in place         (17 )                                       (17 )
     Reserves at December 31, 2013   1,532     1,247     5,231     2,374     1,957     744     509     848     14,442  
Equity-accounted entities                                                      
     Reserves at December 31, 2012               16     353           3,043     3,355           6,767  
     of which:                                                      
     developed               16                 402     6           424  
     undeveloped                     353           2,641     3,349           6,343  
     Purchase of minerals in place                                                      
     Revisions of previous estimates               1     (18 )         16     (2 )         (3 )
     Improved recovery                                                      
     Extensions and discoveries                                                      
     Production               (2 )   (5 )         (60 )               (67 )
     Sales of minerals in place                                 (2,971 )               (2,971 )
     Reserves at December 31, 2013               15     330           28     3,353           3,726  
Reserves at December 31, 2013   1,532     1,247     5,246     2,704     1,957     772     3,862     848     18,168  
Developed   1,266     904     2,447     1,295     1,488     300     315     561     8,576  
     consolidated subsidiaries   1,266     904     2,432     1,295     1,488     286     310     561     8,542  
     equity-accounted entities               15                 14     5           34  
Undeveloped   266     343     2,799     1,409     469     472     3,547     287     9,592  
     consolidated subsidiaries   266     343     2,799     1,079     469     458     199     287     5,900  
     equity-accounted entities                     330           14     3,348           3,692  

 

 

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Contents

Eni Fact Book Supplemental oil and gas information

   Movements in net proved natural gas reserves (bcf)
    Italy   Rest of Europe   North Africa   Sub-Saharan Africa   Kazakhstan   Rest of Asia   Americas   Australia and Oceania   Total
2014                                                      
Consolidated subsidiaries                                                      
     Reserves at December 31, 2013   1,532     1,247     5,231     2,374     1,957     744     509     848     14,442  
     of which:                                                      
     developed   1,266     904     2,432     1,295     1,488     286     310     561     8,542  
     undeveloped   266     343     2,799     1,079     469     458     199     287     5,900  
     Purchase of minerals in place         21                                            
     Revisions of previous estimates   113     99     668     214     165     156     23     (1 )   1,437  
     Improved recovery                                                      
     Extensions and discoveries               19     341           59     16           435  
     Production   (213 )   (195 )   (627 )   (185 )   (73 )   (113 )   (80 )   (40 )   (1,526 )
     Sales of minerals in place         (1 )                                       (1 )
     Reserves at December 31, 2014   1,432     1,171     5,291     2,744     2,049     846     468     807     14,808  
Equity-accounted entities                                                      
     Reserves at December 31, 2013               15     330           28     3,353           3,726  
     of which:                                                      
     developed               15                 14     5           34  
     undeveloped                     330           14     3,348           3,692  
     Purchase of minerals in place                                                      
     Revisions of previous estimates               2     25           (2 )               25  
     Improved recovery                                                      
     Extensions and discoveries                                                      
     Production               (2 )   (4 )         (8 )               (14 )
     Sales of minerals in place                                                      
     Reserves at December 31, 2014               15     351           18     3,353           3,737  
Reserves at December 31, 2014   1,432     1,171     5,306     3,095     2,049     864     3,821     807     18,545  
Developed   1,192     887     2,125     1,360     1,553     271     399     675     8,462  
     consolidated subsidiaries   1,192     887     2,110     1,271     1,553     261     393     675     8,342  
     equity-accounted entities               15     89           10     6           120  
Undeveloped   240     284     3,181     1,735     496     593     3,422     132     10,083  
     consolidated subsidiaries   240     284     3,181     1,473     496     585     75     132     6,466  
     equity-accounted entities                     262           8     3,347           3,617  

 

 

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Contents

Eni Fact Book Supplemental oil and gas information

   Results of operations from oil and gas producing activities (euro million)
    Italy   Rest of Europe   North Africa   Sub-Saharan Africa   Kazakhstan   Rest of Asia   Americas   Australia and Oceania   Total
2012                                                      
Consolidated subsidiaries                                                      
Revenues:                                                      
- sales to consolidated entities   3,712     3,177     2,338     6,040     459     425     1,614     425     18,190  
- sales to third parties   50     715     9,129     2,243     1,368     1,387     106     333     15,331  
Total revenues   3,762     3,892     11,467     8,283     1,827     1,812     1,720     758     33,521  
Operations costs   (302 )   (655 )   (606 )   (913 )   (188 )   (209 )   (361 )   (134 )   (3,368 )
Production taxes   (307 )         (390 )   (818 )         (43 )               (1,558 )
Exploration expenses   (32 )   (154 )   (153 )   (993 )   (3 )   (230 )   (147 )   (123 )   (1,835 )
D.D. & A. and provision for abandonment (a)   (777 )   (683 )   (1,137 )   (1,750 )   (120 )   (720 )   (1,256 )   (167 )   (6,610 )
Other income (expenses)   (201 )   (122 )   (934 )   (435 )   206     (149 )   74     (42 )   (1,603 )
Pretax income from producing activities   2,143     2,278     8,247     3,374     1,722     461     30     292     18,547  
Income taxes   (919 )   (1,524 )   (5,194 )   (2,508 )   (736 )   (176 )   (14 )   (164 )   (11,235 )
Results of operations from E&P activities of consolidated subsidiaries (b)   1,224     754     3,053     866     986     285     16     128     7,312  
Equity-accounted entities                                                      
Revenues:                                                      
- sales to consolidated entities                                                      
- sales to third parties         2     20     44           144     300           510  
Total revenues         2     20     44           144     300           510  
Operations costs               (10 )   (5 )         (14 )   (20 )         (49 )
Production taxes         (1 )   (3 )               (4 )   (128 )         (136 )
Exploration expenses         (5 )   (2 )   (11 )         (4 )               (22 )
D.D. & A. and provision for abandonment         (50 )   (2 )   (13 )         (41 )   (35 )         (141 )
Other income (expenses)         (7 )   2     (48 )         (6 )   (55 )         (114 )
Pretax income from producing activities         (61 )   5     (33 )         75     62           48  
Income taxes               (3 )   4           (36 )   (38 )         (73 )
Results of operations from E&P activities of equity-accounted entities (b)         (61 )   2     (29 )         39     24           (25 )

(a) Includes asset impairments amounting to euro 547 million in 2012.
(b) The "Successful Effort Method" application according to Eni accounting policy would have led to a decrease of result of operations of euro 610 million in 2012 for the consolidated subsidiaries and a decrease of euro 10 million in 2012 for equity-accounted entities.

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Contents

Eni Fact Book Supplemental oil and gas information

   Results of operations from oil and gas producing activities (euro million)
    Italy   Rest of Europe   North Africa   Sub-Saharan Africa   Kazakhstan   Rest of Asia   Americas   Australia and Oceania   Total
2013                                                      
Consolidated subsidiaries                                                      
Revenues:                                                      
- sales to consolidated entities   3,784     2,468     2,341     5,264     396     870     1,537     146     16,806  
- sales to third parties         704     7,723     1,855     1,175     864     93     338     12,752  
Total revenues   3,784     3,172     10,064     7,119     1,571     1,734     1,630     484     29,558  
Operations costs   (391 )   (717 )   (649 )   (932 )   (192 )   (224 )   (342 )   (119 )   (3,566 )
Production taxes   (326 )         (317 )   (710 )         (38 )         (25 )   (1,416 )
Exploration expenses   (32 )   (288 )   (95 )   (869 )   (1 )   (205 )   (136 )   (110 )   (1,589 )
D.D. & A. and provision for abandonment (a)   (907 )   (573 )   (1,192 )   (1,882 )   (111 )   (524 )   (848 )   43     (5,994 )
Other income (expenses)   (277 )   161     (1,009 )   (519 )   (105 )   (140 )   20     (11 )   (1,880 )
Pretax income from producing activities   1,851     1,755     6,802     2,207     1,162     603     324     262     14,966  
Income taxes   (872 )   (1,006 )   (4,281 )   (1,702 )   (396 )   (178 )   (117 )   (149 )   (8,701 )
Results of operations from E&P activities of consolidated subsidiaries (b)   979     749     2,521     505     766     425     207     113     6,265  
Equity-accounted entities                                                      
Revenues:                                                      
- sales to consolidated entities                                                      
- sales to third parties               20     26           199     243           488  
Total revenues               20     26           199     243           488  
Operations costs               (11 )   (44 )         (18 )   (23 )         (96 )
Production taxes               (4 )               (14 )   (113 )         (131 )
Exploration expenses         (8 )   (3 )               (25 )   (1 )         (37 )
D.D. & A. and provision for abandonment         (1 )   (1 )               (65 )   (40 )         (107 )
Other income (expenses)         (4 )   5     (12 )         (13 )   (38 )         (62 )
Pretax income from producing activities         (13 )   6     (30 )         64     28           55  
Income taxes               (4 )   (10 )         (35 )   30           (19 )
Results of operations from E&P activities of equity-accounted entities (b)         (13 )   2     (40 )         29     58           36  

(a) Includes asset impairments amounting to euro 15 million in 2013.
(b) The "Successful Effort Method" application according to Eni accounting policy would have led to a decrease of result of operations of euro 295 million in 2013 for the consolidated subsidiaries and an increase of euro 6 million in 2013 for equity-accounted entities.

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   Results of operations from oil and gas producing activities (euro million)
    Italy   Rest of Europe   North Africa   Sub-Saharan Africa   Kazakhstan   Rest of Asia   Americas   Australia and Oceania   Total
2014                                                      
Consolidated subsidiaries                                                      
Revenues:                                                      
- sales to consolidated entities   3,028     2,721     2,010     4,716     346     589     1,691     67     15,168  
- sales to third parties         596     7,415     1,369     976     774     129     299     11,558  
Total revenues   3,028     3,317     9,425     6,085     1,322     1,363     1,820     366     26,726  
Operations costs   (423 )   (687 )   (694 )   (935 )   (208 )   (223 )   (357 )   (124 )   (3,651 )
Production taxes   (293 )         (291 )   (648 )         (33 )         (15 )   (1,280 )
Exploration expenses   (29 )   (227 )   (207 )   (706 )         (185 )   (189 )   (46 )   (1,589 )
D.D. & A. and provision for abandonment (a)   (818 )   (1,083 )   (1,288 )   (2,010 )   (91 )   (850 )   (1,181 )   (172 )   (7,493 )
Other income (expenses)   (184 )   (96 )   (773 )   (358 )   (251 )   (117 )   (78 )   (30 )   (1,887 )
Pretax income from producing activities   1,281     1,224     6,172     1,428     772     (45 )   15     (21 )   10,826  
Income taxes   (351 )   (803 )   (3,928 )   (1,273 )   (291 )   (112 )   (6 )   (16 )   (6,780 )
Results of operations from E&P activities of consolidated subsidiaries (b)   930     421     2,244     155     481     (157 )   9     (37 )   4,046  
Equity-accounted entities                                                      
Revenues:                                                      
- sales to consolidated entities                                                      
- sales to third parties               19                 87     232           338  
Total revenues               19                 87     232           338  
Operations costs               (11 )               (11 )   (27 )         (49 )
Production taxes               (3 )                     (94 )         (97 )
Exploration expenses         (8 )                     (45 )   (1 )         (54 )
D.D. & A. and provision for abandonment         (1 )   (1 )               (44 )   (60 )         (106 )
Other income (expenses)         (1 )   1     (32 )         (3 )   (42 )         (77 )
Pretax income from producing activities         (10 )   5     (32 )         (16 )   8           (45 )
Income taxes               (4 )               (23 )   (17 )         (44 )
Results of operations from E&P activities of equity-accounted entities (b)         (10 )   1     (32 )         (39 )   (9 )         (89 )

(a) Includes asset impairments amounting to euro 690 million in 2014.
(b) The "Successful Effort Method" application according to Eni accounting policy would have led to a decrease of result of operations of euro 5 million in 2014 for the consolidated subsidiaries and an increase of euro 24 million in 2014 for equity-accounted entities.

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   Capitalized cost (a) (euro million)
    Italy   Rest of Europe   North Africa   Sub-Saharan Africa   Kazakhstan   Rest of Asia   Americas   Australia and Oceania   Total
2013                                                      
Consolidated subsidiaries                                                      
Proved mineral interests   13,465     12,497     18,237     21,854     2,351     6,604     10,652     1,662     87,322  
Unproved mineral interests   31     385     428     2,835     37     1,441     1,419     190     6,766  
Support equipment and facilities   269     37     1,370     992     78     90     57     12     2,905  
Incomplete wells and other   799     2,803     1,105     1,851     6,069     634     669     24     13,954  
Gross Capitalized Costs   14,564     15,722     21,140     27,532     8,535     8,769     12,797     1,888     110,947  
Accumulated depreciation, depletion and amortization   (10,241 )   (8,581 )   (11,370 )   (15,562 )   (1,000 )   (6,269 )   (8,406 )   (723 )   (62,152 )
Net Capitalized Costs consolidated subsidiaries (b) (c)   4,323     7,141     9,770     11,970     7,535     2,500     4,391     1,165     48,795  
Equity-accounted entities                                                      
Proved mineral interests         2     77     34           438     429           980  
Unproved mineral interests         52                       74                 126  
Support equipment and facilities               7                 1     3           11  
Incomplete wells and other         20     4     1,059                 378           1,461  
Gross Capitalized Costs         74     88     1,093           513     810           2,578  
Accumulated depreciation, depletion and amortization         (56 )   (67 )               (405 )   (145 )         (673 )
Net Capitalized Costs equity-accounted entities (b) (c)         18     21     1,093           108     665           1,905  
2014                                                      
Consolidated subsidiaries                                                      
Proved mineral interests   14,862     13,754     21,549     27,697     2,917     8,827     13,050     1,825     104,481  
Unproved mineral interests   31     399     493     3,263     43     1,590     1,588     214     7,621  
Support equipment and facilities   346     42     1,569     1,164     94     35     66     13     3,329  
Incomplete wells and other   816     3,527     1,411     2,988     7,140     690     819     120     17,511  
Gross Capitalized Costs   16,055     17,722     25,022     35,112     10,194     11,142     15,523     2,172     132,942  
Accumulated depreciation, depletion and amortization   (11,154 )   (9,519 )   (14,335 )   (20,039 )   (1,241 )   (8,042 )   (10,605 )   (1,009 )   (75,944 )
Net Capitalized Costs consolidated subsidiaries (b) (c)   4,901     8,203     10,687     15,073     8,953     3,100     4,918     1,163     56,998  
Equity-accounted entities                                                      
Proved mineral interests         2     77     24           539     549           1,191  
Unproved mineral interests         31                       84                 115  
Support equipment and facilities               7                 1     4           12  
Incomplete wells and other         12     5     1,241                 776           2,034  
Gross Capitalized Costs         45     89     1,265           624     1,329           3,352  
Accumulated depreciation, depletion and amortization         (39 )   (69 )               (522 )   (230 )         (860 )
Net Capitalized Costs equity-accounted entities (b) (c)         6     20     1,265           102     1,099           2,492  

(a) Capitalized costs represent the total expenditure for proved and unproved mineral interests and related support equipment and facilities utilized in oil and gas exploration and production activities, together with related accumulated depreciation, depletion and amortization.
(b) The amounts include net capitalized financial charges totaling euro 715 million in 2013 and euro 868 million in 2014 for the consolidated subsidiaries and euro 12 million in 2013 and euro 46 million in 2014 for equity-accounted entities.
(c) The amounts do not include costs associated with exploration activities which are capitalized in order to reflect their investment nature and amortized in full when incurred. The "Successful Effort Method" application according to Eni accounting policy would have led to an increase in net capitalized costs, mainly in relation to exploration cost, of euro 4,378 million in 2013 and euro 4,786 million in 2014 for the consolidated subsidiaries and euro 86 million in 2013 and euro 123 million in 2014 for equity-accounted entities.

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Eni Fact Book Supplemental oil and gas information

   Cost incurred (a) (euro million)
    Italy   Rest of Europe   North Africa   Sub-Saharan Africa   Kazakhstan   Rest of Asia   Americas   Australia and Oceania   Total
2012                                      
Consolidated subsidiaries                                      
Proved property acquisitions           14   27           2       43  
Unproved property acquisitions                                      
Exploration   32   151   153   1,142   3   193   80   96   1,850  
Development (b)   1,045   2,485   1,441   2,246   762   702   1,071   16   9,768  
Total costs incurred consolidated subsidiaries   1,077   2,636   1,608   3,415   765   895   1,153   112   11,661  
Equity-accounted entities                                      
Proved property acquisitions                                      
Unproved property acquisitions                                      
Exploration       13   2   11       4           30  
Development (c)       19   7   117       188   154       485  
Total costs incurred equity-accounted entities       32   9   128       192   154       515  
2013                                      
Consolidated subsidiaries                                      
Proved property acquisitions           64                       64  
Unproved property acquisitions           45                       45  
Exploration   32   357   95   757   1   233   110   84   1,669  
Development (b)   697   1,855   765   2,617   600   719   1,141   57   8,451  
Total costs incurred consolidated subsidiaries   729   2,212   969   3,374   601   952   1,251   141   10,229  
Equity-accounted entities                                      
Proved property acquisitions                                      
Unproved property acquisitions                                      
Exploration       5   3           81   1       90  
Development (c)       1   5   39       353   318       716  
Total costs incurred equity-accounted entities       6   8   39       434   319       806  
2014                                      
Consolidated subsidiaries                                      
Proved property acquisitions                                      
Unproved property acquisitions                                      
Exploration   29   188   227   635       160   139   20   1,398  
Development (b)   1,382   2,395   955   3,479   572   1,118   1,169   122   11,192  
Total costs incurred consolidated subsidiaries   1,411   2,583   1,182   4,114   572   1,278   1,308   142   12,590  
Equity-accounted entities                                      
Proved property acquisitions                                      
Unproved property acquisitions                                      
Exploration       2               33   1       36  
Development (c)           1   22       38   375       436  
Total costs incurred equity-accounted entities       2   1   22       71   376       472  

(a) Cost incurred represent amounts both capitalized and expenses in connection with oil and gas producing activities.
(b) Includes the abandonment costs of the assets for euro 1,381 million in 2012, negative for euro 191 million in 2013 and euro 2,062 million in 2014.
(c) Includes the abandonment costs of the assets for euro 63 million in 2012, euro 10 million in 2013 and negative for euro 47 million in 2014.

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Eni Fact Book Supplemental oil and gas information

Standardized measure of discounted future net cash flows

Estimated future cash inflows represent the revenues that would be received from production and are determined by applying the year-end average prices during the years ended.
Future price changes are considered only to the extent provided by contractual arrangements. Estimated future development and production costs are determined by estimating the expenditures to be incurred in developing and producing the proved reserves at the end of the year. Neither the effects of price and cost escalations nor expected future changes in technology and operating practices have been considered.
The standardized measure is calculated as the excess of future cash inflows from proved reserves less future costs of producing and developing the reserves, future income taxes and a yearly 10% discount factor.
Future production costs include the estimated expenditures related to the production of proved reserves plus any production taxes without consideration of future inflation. Future development costs include 		  the estimated costs of drilling development wells and installation of production facilities, plus the net costs associated with dismantlement and abandonment of wells and facilities, under the assumption that year-end costs continue without considering future inflation. Future income taxes were calculated in accordance with the tax laws of the countries in which Eni operates.
The standardized measure of discounted future net cash flows, related to the preceding proved oil and gas reserves, is calculated in accordance with the requirements of FASB Extractive Activities - Oil & Gas (Topic 932).
The standardized measure does not purport to reflect realizable values or fair market value of Eni’s proved reserves. An estimate of fair value would also take into account, among other things, hydrocarbon resources other than proved reserves, anticipated changes in future prices and costs and a discount factor representative of the risks inherent in the oil and gas exploration and production activity.

 

 

 

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Eni Fact Book Supplemental oil and gas information

   Standardized measure of discounted future net cash flows (euro million)
    Italy   Rest of Europe   North Africa   Sub-Saharan Africa   Kazakhstan   Rest of Asia   Americas   Australia and Oceania   Total
December 31, 2012                                                      
Consolidated subsidiaries                                                      
     Future cash inflows   30,308     38,912     108,343     56,978     53,504     7,881     11,008     4,957     311,891  
     Future production costs   (5,900 )   (8,190 )   (18,555 )   (14,844 )   (9,561 )   (2,854 )   (2,520 )   (921 )   (63,345 )
     Future development and abandonment costs   (3,652 )   (7,511 )   (8,412 )   (6,873 )   (3,802 )   (1,974 )   (1,502 )   (197 )   (33,923 )
     Future net inflow before income tax   20,756     23,211     81,376     35,261     40,141     3,053     6,986     3,839     214,623  
     Future income tax   (6,911 )   (15,063 )   (44,256 )   (21,348 )   (10,293 )   (903 )   (2,906 )   (1,181 )   (102,861 )
     Future net cash flows   13,845     8,148     37,120     13,913     29,848     2,150     4,080     2,658     111,762  
     10% discount factor   (5,519 )   (2,630 )   (16,539 )   (4,976 )   (17,943 )   (496 )   (1,337 )   (1,030 )   (50,470 )
     Standardized measure of
     discounted future net cash flows		   8,326     5,518     20,581     8,937     11,905     1,654     2,743     1,628     61,292  
Equity-accounted entities                                                      
     Future cash inflows         1     658     3,594           6,689     18,132           29,074  
     Future production costs               (203 )   (576 )         (2,216 )   (5,003 )         (7,998 )
     Future development and abandonment costs         (1 )   (17 )   (101 )         (1,061 )   (2,563 )         (3,743 )
     Future net inflow before income tax               438     2,917           3,412     10,566           17,333  
     Future income tax               (36 )   (1,291 )         (795 )   (5,729 )         (7,851 )
     Future net cash flows               402     1,626           2,617     4,837           9,482  
     10% discount factor               (206 )   (962 )         (1,747 )   (3,621 )         (6,536 )
     Standardized measure of
     discounted future net cash flows		               196     664           870     1,216           2,946  
Total   8,326     5,518     20,777     9,601     11,905     2,524     3,959     1,628     64,238  
December 31, 2013                                                      
Consolidated subsidiaries                                                      
     Future cash inflows   28,829     33,319     92,661     58,252     50,754     12,487     10,227     5,294     291,823  
     Future production costs   (6,250 )   (6,836 )   (16,611 )   (15,986 )   (9,072 )   (3,876 )   (2,379 )   (1,417 )   (62,427 )
     Future development and abandonment costs   (4,593 )   (6,202 )   (8,083 )   (7,061 )   (3,445 )   (3,960 )   (1,561 )   (279 )   (35,184 )
     Future net inflow before income tax   17,986     20,281     67,967     35,205     38,237     4,651     6,287     3,598     194,212  
     Future income tax   (5,776 )   (12,746 )   (35,887 )   (20,491 )   (9,939 )   (1,391 )   (2,387 )   (1,093 )   (89,710 )
     Future net cash flows   12,210     7,535     32,080     14,714     28,298     3,260     3,900     2,505     104,502  
     10% discount factor   (5,048 )   (2,110 )   (14,327 )   (5,619 )   (16,984 )   (1,683 )   (1,353 )   (1,201 )   (48,325 )
     Standardized measure of
     discounted future net cash flows		   7,162     5,425     17,753     9,095     11,314     1,577     2,547     1,304     56,177  
Equity-accounted entities                                                      
     Future cash inflows               524     4,041           262     17,239           22,066  
     Future production costs               (164 )   (1,465 )         (38 )   (5,467 )         (7,134 )
     Future development and abandonment costs               (17 )   (85 )         (73 )   (2,299 )         (2,474 )
     Future net inflow before income tax               343     2,491           151     9,473           12,458  
     Future income tax               (20 )   (1,617 )         (61 )   (4,156 )         (5,854 )
     Future net cash flows               323     874           90     5,317           6,604  
     10% discount factor               (175 )   (401 )         (20 )   (3,681 )         (4,277 )
     Standardized measure of
     discounted future net cash flows		               148     473           70     1,636           2,327  
Total   7,162     5,425     17,901     9,568     11,314     1,647     4,183     1,304     58,504  

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Eni Fact Book Supplemental oil and gas information

   Standardized measure of discounted future net cash flows (euro million)
    Italy   Rest of Europe   North Africa   Sub-Saharan Africa   Kazakhstan   Rest of Asia   Americas   Australia and Oceania   Total
December 31, 2014                                                      
Consolidated subsidiaries                                                      
     Future cash inflows   24,951     29,140     96,372     65,853     55,740     13,664     10,955     4,849     301,524  
     Future production costs   (6,374 )   (6,856 )   (19,906 )   (18,236 )   (9,878 )   (4,158 )   (2,680 )   (1,092 )   (69,180 )
     Future development and abandonment costs   (4,698 )   (5,292 )   (9,673 )   (9,139 )   (4,576 )   (4,600 )   (1,892 )   (356 )   (40,226 )
     Future net inflow before income tax   13,879     16,992     66,793     38,478     41,286     4,906     6,383     3,401     192,118  
     Future income tax   (3,583 )   (10,595 )   (35,484 )   (20,514 )   (10,400 )   (1,462 )   (2,401 )   (989 )   (85,428 )
     Future net cash flows   10,296     6,397     31,309     17,964     30,886     3,444     3,982     2,412     106,690  
     10% discount factor   (4,064 )   (1,464 )   (13,905 )   (7,164 )   (19,699 )   (1,900 )   (1,353 )   (1,106 )   (50,655 )
     Standardized measure of
     discounted future net cash flows		   6,232     4,933     17,404     10,800     11,187     1,544     2,629     1,306     56,035  
Equity-accounted entities                                                      
     Future cash inflows               485     3,861           200     18,871           23,417  
     Future production costs               (165 )   (692 )         (33 )   (5,724 )         (6,614 )
     Future development and abandonment costs               (18 )   (104 )         (51 )   (2,032 )         (2,205 )
     Future net inflow before income tax               302     3,065           116     11,115           14,598  
     Future income tax               (23 )   (426 )         (45 )   (4,608 )         (5,102 )
     Future net cash flows               279     2,639           71     6,507           9,496  
     10% discount factor               (158 )   (1,442 )         (11 )   (4,327 )         (5,938 )
     Standardized measure of
     discounted future net cash flows		               121     1,197           60     2,180           3,558  
Total   6,232     4,933     17,525     11,997     11,187     1,604     4,809     1,306     59,593  

 

 

 

 

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Contents

Eni Fact Book Supplemental oil and gas information

   Changes in standardized measure of discounted future net cash flows (euro million)
    Consolidated subsidiaries   Equity-accounted entities   Total
Standardized measure of discounted future net cash flows at December 31, 2011   62,238     2,660     64,898  
Increase (decrease):                  
- sales, net of production costs   (28,595 )   (325 )   (28,920 )
- net changes in sales and transfer prices, net of production costs   2,264     (56 )   2,208  
- extensions, discoveries and improved recovery, net of future production and development costs   4,868     812     5,680  
- changes in estimated future development and abandonment costs   (3,802 )   (357 )   (4,159 )
- development costs incurred during the period that reduced future development costs   8,199     409     8,608  
- revisions of quantity estimates   3,725     824     4,549  
- accretion of discount   12,527     477     13,004  
- net change in income taxes   2,207     (830 )   1,377  
- purchase of reserves in-place                  
- sale of reserves in-place   (1,509 )   (615 )   (2,124 )
- changes in production rates (timing) and other   (830 )   (53 )   (883 )
Net increase (decrease)   (946 )   286     (660 )
Standardized measure of discounted future net cash flows at December 31, 2012   61,292     2,946     64,238  
Increase (decrease):                  
- sales, net of production costs   (24,576 )   (261 )   (24,837 )
- net changes in sales and transfer prices, net of production costs   (3,632 )   (223 )   (3,855 )
- extensions, discoveries and improved recovery, net of future production and development costs   1,699     3     1,702  
- changes in estimated future development and abandonment costs   (6,821 )   (427 )   (7,248 )
- development costs incurred during the period that reduced future development costs   8,456     665     9,121  
- revisions of quantity estimates   6,385     (298 )   6,087  
- accretion of discount   11,937     521     12,458  
- net change in income taxes   5,587     379     5,966  
- purchase of reserves in-place   74           74  
- sale of reserves in-place   (252 )   (770 )   (1,022 )
- changes in production rates (timing) and other   (3,972 )   (208 )   (4,180 )
Net increase (decrease)   (5,115 )   (619 )   (5,734 )
Standardized measure of discounted future net cash flows at December 31, 2013   56,177     2,327     58,504  
Increase (decrease):                  
- sales, net of production costs   (21,795 )   (192 )   (21,987 )
- net changes in sales and transfer prices, net of production costs   (12,053 )   (500 )   (12,553 )
- extensions, discoveries and improved recovery, net of future production and development costs   1,667           1,667  
- changes in estimated future development and abandonment costs   (6,047 )   223     (5,824 )
- development costs incurred during the period that reduced future development costs   8,745     451     9,196  
- revisions of quantity estimates   8,085     (325 )   7,760  
- accretion of discount   11,064     512     11,576  
- net change in income taxes   7,049     704     7,753  
- purchase of reserves in-place   67           67  
- sale of reserves in-place   (271 )         (271 )
- changes in production rates (timing) and other   3,347     358     3,705  
Net increase (decrease)   (142 )   1,231     1,089  
Standardized measure of discounted future net cash flows at December 31, 2014   56,035     3,558     59,593  

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Eni Fact Book Quarterly information

Quarterly information

   Main financial data (a) (b)
    2012   2013   2014
   
 
 
(euro million)   I quarter     II quarter     III quarter     IV quarter           I quarter     II quarter     III quarter     IV quarter           I quarter     II quarter     III quarter     IV quarter        
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net sales from operations   33,112     30,035     31,466     32,496     127,109     30,440     26,055     28,374     29,828     114,697     29,203     27,353     26,600     26,691     109,847  
Operating income   6,583     2,825     4,115     1,685     15,208     3,867     1,471     3,302     248     8,888     3,646     2,255     2,579     (563 )   7,917  
Adjusted operating profit:   6,271     4,255     4,404     4,953     19,883     3,746     1,959     3,438     3,507     12,650     3,491     2,728     3,032     2,323     11,574  
Exploration & Production   5,095     4,239     4,336     4,867     18,537     3,998     3,409     3,916     3,320     14,643     3,450     2,981     3,088     2,032     11,551  
Gas & Power   1,042     (378 )   (281 )   15     398     (211 )   (424 )   (344 )   341     (638 )   241     70     (109 )   108     310  
Refining & Marketing   (216 )   (134 )   60     1     (289 )   (134 )   (176 )   (55 )   (92 )   (457 )   (223 )   (219 )   39     195     (208 )
Versalis   (169 )   (25 )   (173 )   (116 )   (483 )   (63 )   (82 )   (111 )   (130 )   (386 )   (89 )   (93 )   (98 )   (66 )   (346 )
Engineering & Construction   381     392     390     322     1,485     204     (678 )   220     155     (99 )   128     165     155     31     479  
Other activities   (45 )   (57 )   (40 )   (80 )   (222 )   (55 )   (52 )   (52 )   (51 )   (210 )   (45 )   (43 )   (42 )   (48 )   (178 )
Corporate and financial companies   (80 )   (99 )   (64 )   (82 )   (325 )   (82 )   (76 )   (92 )   (82 )   (332 )   (81 )   (58 )   (65 )   (61 )   (265 )
Unrealized profit intragroup elimination and consolidation adjustments   263     317     176     26     782     89     38     (44 )   46     129     110     (75 )   64     132     231  
Net profit: (c)   3,617     227     2,485     1,461     7,790     1,543     275     3,989     (647 )   5,160     1,303     658     1,714     (2,384 )   1,291  
- continuing operations   3,544     156     2,464     (1,964 )   4,200     1,543     275     3,989     (647 )   5,160     1,303     658     1,714     (2,384 )   1,291  
- discontinued operations   73     71     21     3,425     3,590                                                              
Capital expenditure   2,643     3,026     3,235     3,901     12,805     3,122     2,825     3,064     3,789     12,800     2,545     2,979     3,083     3,633     12,240  
Investments   245     61     207     56     569     113     63     40     101     317     60     133     91     124     408  
Net borrowings at period end   26,984     26,467     19,175     15,069     15,069     15,519     15,984     14,687     14,963     14,963     13,799     14,601     15,837     13,685     13,685  

(a) Quarterly data are unaudited.
(b) In accordance with the guidelines of IFRS 5, results of the Italian regulated businesses managed by Snam divested in accordance to Law Decree No. 1/2012, enacted into Law on March 14, 2012 have been reported as discontinued operations from July 1, 2012. Prior year data have been reclassified accordingly.
(c) Net profit attributable to Eni’s shareholders.

 

   Key market indicators
    2012   2013   2014
   
 
 
    I quarter   II quarter   III quarter   IV quarter       I quarter   II quarter   III quarter   IV quarter       I quarter   II quarter   III quarter   IV quarter    
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Average price of Brent dated crude oil (a)   118.49   108.19   109.61   110.02   111.58   112.60   102.44   110.37   109.27   108.66   108.20   109.63   101.85   76.27   98.99
Average EUR/USD exchange rate (b)   1.311   1.281   1.250   1.297   1.285   1.321   1.306   1.324   1.361   1.328   1.370   1.371   1.325   1.249   1.329
Average price in euro of Brent dated crude oil   90.38   84.46   87.69   84.33   86.83   85.24   78.44   83.36   80.29   81.82   78.98   79.96   76.87   61.06   74.48
Standard Eni Refining Margin (SERM) (c)   n.a.   n.a.   n.a.   n.a.   4.12   n.a.   3.25   2.43   0.96   2.43   1.17   2.29   4.39   4.97   3.21
Price of NBP gas (d)   9.34   9.09   9.00   10.49   9.48   11.46   10.06   10.11   10.93   10.63   9.95   7.55   7.03   8.37   8.22
Euribor - three-month euro rate (%)   1.0   0.7   0.4   0.2   0.6   0.2   0.2   0.2   0.2   0.2   0.3   0.3   0.2   0.1   0.2
Libor - three-month dollar rate (%)   0.5   0.5   0.4   0.3   0.4   0.3   0.3   0.3   0.2   0.3   0.2   0.2   0.2   0.2   0.2

(a) In USD per barrel. Source: Platt’s Oilgram.
(b) Source: BCE.
(c) In USD per barrel FOB Mediterranean Brent dated crude oil. Source: Eni calculations. Approximates the margin of Eni’s refining system in consideration of material balances and refineries’ product yields.
(d) In USD per BTU (British Thermal Unit). Source Platt’s Oilgram.

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Eni Fact Book Quarterly information

   Main operating data
    2012   2013   2014
   
 
 
    I quarter   II quarter   III quarter   IV quarter       I quarter   II quarter   III quarter   IV quarter       I quarter   II quarter   III quarter   IV quarter    
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Liquids production   (kbbl/d)   867   856   891   912   882   818   845   851   816   833   822   813   812   868   828
Natural gas production   (mmcf/d)   4,480   4,394   4,545   4,584   4,501   4,290   4,410   4,402   4,177   4,320   4,182   4,234   4,197   4,284   4,224
Hydrocarbons production:   (kboe/d)   1,683   1,656   1,718   1,747   1,701   1,600   1,648   1,653   1,577   1,619   1,583   1,584   1,576   1,648   1,598
     Italy       188   187   187   195   189   180   181   189   192   186   182   179   174   182   179
     Rest of Europe       206   173   162   172   178   158   151   141   173   155   192   195   179   196   190
     North Africa       570   573   593   610   586   554   598   569   506   556   542   549   584   590   567
     Sub-Saharan Africa       335   333   387   324   345   313   322   377   316   332   324   321   317   339   325
     Kazakhstan       111   106   90   99   102   103   105   90   102   100   102   90   76   85   88
     Rest of Asia       111   128   128   149   129   141   150   143   143   144   96   104   93   97   98
     Americas       119   120   135   166   135   119   110   117   116   116   117   120   131   131   125
     Australia and Oceania       43   36   36   32   37   32   31   27   29   30   28   26   22   28   26
Production sold   (mmboe)   149.2   144.6   150.5   154.4   598.7   135.8   140.3   141.8   137.4   555.3   134.7   133.0   138.5   143.3   549.5
Sales of natural gas to third parties   (bcm)   26.03   16.29   16.47   21.81   80.60   26.61   16.23   15.27   22.17   80.28   23.56   16.64   17.50   21.47   79.17
Own consumption of natural gas       1.77   1.57   1.58   1.51   6.43   1.56   1.29   1.53   1.55   5.93   1.48   1.27   1.44   1.43   5.62
Sales to third parties and own consumption       27.80   17.86   18.05   23.32   87.03   28.17   17.52   16.80   23.72   86.21   25.04   17.91   18.94   22.90   84.79
Sales of natural gas of Eni's affiliates (net to Eni)       2.81   2.29   1.43   1.76   8.29   2.00   1.57   1.55   1.84   6.96   1.72   1.18   0.68   0.80   4.38
Total sales and own consumption of natural gas       30.61   20.15   19.48   25.08   95.32   30.17   19.09   18.35   25.56   93.17   26.76   19.09   19.62   23.70   89.17
Electricity sales   (TWh)   12.29   9.62   10.54   10.13   42.58   9.16   8.69   8.45   8.75   35.05   8.25   7.75   8.26   9.32   33.58
Sales of refined products:   (mmtonnes)   10.01   12.73   13.25   12.34   48.33   10.65   10.42   11.91   10.51   43.49   10.32   11.03   11.41   11.65   44.41
     Retail sales in Italy       1.81   1.98   2.24   1.80   7.83   1.65   1.71   1.71   1.57   6.64   1.45   1.60   1.58   1.51   6.14
     Wholesale sales in Italy       2.06   2.18   2.20   2.18   8.62   1.86   2.08   2.26   2.17   8.37   1.68   1.79   2.12   1.98   7.57
     Retail sales Rest of Europe       0.72   0.76   0.81   0.75   3.04   0.68   0.78   0.83   0.76   3.05   0.71   0.78   0.83   0.75   3.07
     Wholesale sales Rest of Europe       0.89   1.03   1.05   0.99   3.96   0.94   1.08   1.10   1.11   4.23   1.01   1.17   1.23   1.19   4.60
     Wholesale sales outside Europe       0.10   0.11   0.10   0.11   0.42   0.10   0.11   0.11   0.11   0.43   0.10   0.11   0.11   0.11   0.43
     Other markets       4.43   6.67   6.85   6.51   24.46   5.42   4.66   5.90   4.79   20.77   5.37   5.58   5.54   6.11   22.60

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Contents

Contents

Contents

Table of Contents
Contents

Contents

Table of Contents

This summary review comprises an extract of the description of the businesses, the management’s discussion and analysis of financial condition and results of operations and certain other Company information from Eni’s Integrated Annual Report for the year ended December 31, 2014. It does not contain sufficient information to allow as full an understanding of financial results, operating performance and business developments of Eni as "Eni 2014 Integrated Annual Report". It is not deemed to be filed or submitted with any Italian or US market or other regulatory authorities. You may obtain a copy of "Summary Annual Review - Eni in 2014" and "Eni 2014 Integrated Annual Report" on request, free of charge (see the request form on Eni’s website – eni.com – under the section "Publications").
The "Summary Annual Review" and "Eni 2014 Integrated Annual Report" may be downloaded from Eni’s web site under the section "Publications". Financial data presented in this report is based on Consolidated Financial Statements prepared in accordance with the IFRS endorsed by the EU.
This report contains certain forward-looking statements particularly those regarding capital expenditure, development and management of oil&gas resources, dividends, buy-back, 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. Actual results may differ from those expressed in such statements, depending on a variety of factors, including the timing of bringing new fields on stream; management’s ability in carrying out industrial plans and in succeeding in commercial transactions; future levels of industry product supply; demand and pricing; operational problems; general economic conditions; political stability and economic growth in relevant areas of the world; changes in laws and regulations; development and use of new technologies; changes in public expectations and other changes in business conditions; the actions of competitors and other factors discussed elsewhere in this document. 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 website – 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".		   n Eni at a glance
Our business model
Our strategy

Business review

 2
4
6
n n Exploration & Production
n Gas & Power
n Refining & Marketing
n Versalis
n Engineering & Construction

Financial review

 8
12
14
16
18
n Group results for the year
     2014 results
     Profit and loss account
     Summarized Group
     balance sheet
     Summarized Group cash
     flow statements		 20
20
23
28

30
n Directors and officers
Investor information		 34
38
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Eni at a glance Eni in 2014

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Eni at a glance Eni in 2014

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Our business model Eni in 2014

Our business model

Eni’s business model targets the delivery of long-term value to its stakeholders. This will leverage on profitable production growth, restructuring the mid-downstream businesses, efficiency and operational excellence and managing the operational risks. Our business model is underpinned by our relentless focus on capital stewardship, environmental conservation, attention to local communities, preservation of health and safety of people working in Eni and with Eni, respect of human rights and endorsement of ethics and transparency. The main capitals used by Eni (financial capital, productive capital, intellectual capital, natural capital, human capital,   social and relationship capital) are classified in accordance with the criteria included in the "International IR Framework" published by the International Integrated Reporting Council (IIRC). 2014 financial results and sustainability performance rely on the responsible and efficient use of our capitals.
Hereunder is articulated the map of the main capitals exploited by Eni and actions positively effecting on their quality and availability. At the same time, the scheme evidences how the efficient use of capitals and related connections create value for the Company and its stakeholders.

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Our strategy Eni in 2014

Our strategy

 

In order to manage a radically changed price environment, the Company outlined for the next four-year period an action plan which comprises a number of rigorous initiatives and objectives in order to mitigate the impact of lower oil prices and to preserve a robust financial structure, particularly in the short to medium term. Our oil price assumptions for the Brent benchmark are $55 per barrel in 2015 and we expect a gradual recovery in the subsequent years up to our long-term case of $90 per barrel. Against the backdrop of a low price environment in the short to medium term, our primary target remains cash generation which will be underpinned by well-designed industrial actions, capital discipline, focus on Exploration & Production activities and a large disposal plan. In approving the capital expenditure plan the Company selected high-return projects with short pay-back periods; this optimization will result in a euro 48 billion capital expenditures in the next four years, down by approximately 17% compared to the previous plan, net of exchange rate effects. The disposal plan, amounting to more than euro 8 billion in the 2015-2018 period, is based on the anticipated monetization of exploratory discoveries, optimization of the upstream portfolio, rationalization of midstream and downstream portfolio, and the divestment of residual interests in Snam and Galp. The Company forecasts that the planned industrial actions, the selective approach to capital expenditure and the disposal plan will enable Eni to preserve a robust financial structure and we plan to maintain the leverage below the threshold of 0.30 throughout the oil cycle. As part of its effort to preserve liquidity and the balance sheet, the Company decided to rebase the dividend as it is planning to pay a dividend of euro 0.8 per share for fiscal year 2015.
In the subsequent years, management will reassess its progressive dividend policy against the backdrop of an expected improvement in the oil price scenario and the planned growth in our cash generation as our value-generation strategy in Exploration & Production and our turnaround of Gas & Power, Refining & Marketing and Versalis progress on targets.

  

The planned reduction in capital expenditure, which will foresee a 17% reduction versus the previous plan at constant exchange rate assumptions, will leverage on:
• a reduction in exploration expenditure which will be mainly focused on low-risk activities, particularly on replacing produced reserves in proven areas and nearby producing assets;
• a reduction in development expenditure by rescheduling the activities at certain large projects without jeopardizing the achievement of the Company’s targets of production growth;
• a reduction of capital expenditure in refining and chemicals due to the shutdown of certain plants which will require fewer investments than in the past and the disposal of certain assets under development like the divestment of our interest in the South Stream project which was defined at the end of 2014; and
• renegotiations of contracts for oilfield services and other supplies in our Exploration & Production segment.

In conclusion, the strategic transformation we started last May aims at making Eni more focused on exploration and production activities and more profitable by streamling the organization, turning around loss-making segments and diluting our presence in non-core activities.

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Exploration & Production / Business review Eni in 2014

Key performance indicators
  2012 2013 2014
Injury frequency rate of total Eni workforce   (No. of accidents per million of worked hours)   0.34   0.23   0.23  
Net sales from operations (a)   (euro million)   35,874   31,264   28,488  
Operating profit       18,470   14,868   10,766  
Adjusted operating profit       18,537   14,643   11,551  
Adjusted net profit       7,426   5,950   4,423  
Capital expenditure       10,307   10,475   10,524  
Adjusted ROACE   (%)   17.6   13.5   9.5  
Profit per boe (b)   ($/boe)   16.0   15.5   9.9  
Opex per boe (b)       7.1   8.3   8.4  
Cash Flow per boe (d)       32.8   31.9   30.1  
Finding & Development cost per boe (c) (d)       17.4   19.2   21.5  
Average hydrocarbons realizations (d)       73.39   71.87   65.49  
Production of hydrocarbons (d)   (kboe/d)   1,701   1,619   1,598  
Estimated net proved reserves of hydrocarbons (d)   (mmboe)   7,166   6,535   6,602  
Reserves life index (d)   (years)   11.5   11.1   11.3  
Organic reserves replacement ratio (d)   (%)   147   105   112  
Employees at year end   (number)   11,304   12,352   12,777  
of which: outside Italy       7,371   8,219   8,243  
Oil spills due to operations (>1 barrel)   (bbl)   3,015   1,728   936  
Produced water re-injected   (%)   49   55   56  
Direct GHG emissions   (mmtonnes CO2 eq)   28.68   25.90   22.98  
of which: from flaring       9.46   8.48   5.64  
Community investment   (euro million)   59   53   63  
(a) Before elimination of intragroup sales.
(b) Consolidated subsidiaries.
(c) Three-year average.
(d) Includes Eni’s share of equity-accounted entities.

 

2014

  

Highlights
Performance of the year
è 2014 marked our strong focusing in HSE activities with significant improvements in all KPIs:
- the injury frequency rate confirmed the positive 2013 performance;
- greenhouse gas emissions decreased by 11.3% (down by 33.5% from flaring);
- oil spills due to operations decreased by 46%;
- zero blow-outs for the eleventh consecutive year; and
- water re-injection reported a new record at 56% of water reused in operations.
è Adjusted net profit declined by euro 1,527 million, or 25.7%, due to lower crude oil and gas prices in dollar terms (down 		  by 8.9% on average) reflecting a falling Brent crude benchmark and a weak gas market, especially in Europe.
è Oil and natural gas production was 1.598 million boe/d in 2014 (up by 0.6% compared to the previous year), excluding the impact of the divestment of Eni’s interest in Siberian assets.
è Estimated net proved reserves at December 31, 2014 amounted to 6.6 bboe based on a reference Brent price of $101 per barrel. The reserves replacement ratio was 112%. The reserves life index was 11.3 years (11.1 years in 2013).
è Development expenditure was euro 9,021 million (up by 5.1% from 2013) to 		  progress major projects and to maintain production plateau particularly in Norway, Angola, Congo, the United States, Italy, Nigeria, Egypt, Indonesia and Kazakhstan.
è Eni continued its track record of exploratory success. Additions to the Company’s resource backlog were approximately 900 million boe, at a competitive cost of $2.1 per barrel.

Exploration and development activities
è Near-field discoveries marked the year’s exploration activity; such discoveries are expected to achieve quick time-to-market leveraging on the synergies from the front-end-loading

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and the utilization of existing production infrastructures:
- Ochigufu in the Angolan deep waters of Block 15/06 (Eni operator with a 35% interest) with a potential in place estimated at approximately 300 million barrels of oil;
- Minsala in the conventional waters of Block Marine XII (Eni operator with a 65% interest) in Congo, increasing the block’s resources in place by 1 billion barrels;
- Oglan in Block 10 (Eni operator with a 100% interest) in Ecuador, with a potential in place estimated at approximately 300 million barrels of oil;
- Merakes in East Sepinggan offshore block (Eni operator with a 85% interest) in Indonesia, with a potential of gas in place estimated at approximately 2 Tcf;		   - Nyonie in Block D4 (Eni operator with a 100% interest) in the conventional waters of Gabon, showed an estimated potential of approximately 500 million boe in place of gas and condensates; and
- the appraisal wells at the Agulha and Coral gas discoveries in Mozambique confirmed reach and extension of their respective reservoirs with a potential in place in Area 4 (Eni operator with a 50% interest) estimated at approximately 88 Tcf.
è Our acreage was strengthened by adding 100,000 square kilometers net to Eni, which puts us in a position to restart a new exploration cycle. Main licenses were located in high potential areas such as Myanmar, Portugal, South Africa and Vietnam, as well as legacy areas such as Algeria, China, 		  Egypt, Norway, the United Kingdom and the United States.
è The West Hub Development Project in Block 15/06 achieved the first oil late in 2014. This is the first Eni-operated project in Angola, with production ramp-up expected to reach a plateau of up to 100 kbbl/d in the coming months.
è Production start-up achieved at the recent Nené discovery in Block Marine XII in Congo. The full-field development will take place in several stages, with a plateau of over 120 kbbl/d.
è Sanctioned the integrated oil&gas project of the Offshore Cape Three Points (Eni operator with a 47.22% interest) in Ghana. First oil is expected in 2017, first gas in 2018 and production is expected to peak at 80 kboe/d.

 

| Strategies

Our upstream growth model will continue to focus on the organic development of conventional assets, with large resource base and competitive cost structure. Those features will safeguard the profitability of our oil&gas projects even in a low price environment.
The sizeable exploration successes of the latest years have increased the Company’s resource base and have contributed to the Company’s value generation through early monetization of the discovered resources in excess of the target replacement ratio.
Going forward our top priority in E&P is to enhance cash generation leveraging on profitable production growth and the monetization of the discovered resources.

In the next four years, against the backdrop of weak crude oil prices, we intend to monetize our resources by:
n re-balancing exploration activities in favor of near-field initiatives to ensure fast support to production;
n rejuvenating the portfolio of exploration leases; and
n accelerating the development of discovered resources.

We plan to grow production at an average rate of 3.5% over the next four years, leveraging on a robust pipeline of projects with an average break-even of $45 per boe, which together with the ramp-ups at fields started up in 2014 will add more than 650 kboe/d in 2018. This new production will bring an additional cumulative cash flow of euro 19 billion in the 2015-2018 plan periods. The main planned start-ups are the Goliat field (Eni operator with a 65% interest) in the Barents Sea in Norway, the oil&gas project of Offshore Cape Three Points (Eni operator with a 47.22% interest) in Ghana, the Jangkrik project (Eni operator with a 55% interest) in Indonesia and production re-start of Kashagan field

  (Eni’s interest 16.81%) by the end of 2016. The profitability of these projects will be ensured by tight control on execution and time-to-market leveraging on our new development approach whereby we insourced critical project phases. To cope with falling oil prices we plan to be selective in our capital allocation decisions. In 2015-2018 plan periods, we expect a decrease of approximately 13% of capital expenditure net of exchange rate effects versus the previous four-year plan due to a reduction in exploration expenditures which will be focused on near-field and appraisal activities, the re-phasing certain projects yet to be sanctioned, as well as we plan to achieve cost savings by renegotiating contracts for the supply of oilfield services, equipment and other upstream goods.
Finally, we intend to manage the typical upstream risks. A major part of our activities are currently located in countries that are far from high-risk areas and Eni plans to growth mainly in countries with low-mid political risk (approximately 90% of the capital expenditure of the four-year plan). We plan to control the environmental risk by means of strict selection of contractors, and by retaining operatorship in a large number of projects (84% of production related to start-ups). Execution of drilling activities at high pressure/high temperature wells and deep waters wells (24% of planned wells to be drilled in 2015) will be managed by continually deploying our high operational standards.

| Maintaining strong production growth

Eni’s Exploration & Production segment engages in oil and natural gas exploration and field development and production, as well as LNG operations, in 40 countries, including Italy, Libya, Egypt, Norway, the United Kingdom, Angola, Congo, Nigeria, the United States, Kazakhstan, Algeria, Australia, Venezuela, Iraq, Ghana and Mozambique.

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Exploration & Production / Business review Eni in 2014

We are targeting a production rate of 3.5% in the next four-year plan. Management plans to achieve the target production growth by continuing development activities and new project start-ups in the main areas of operations, including North Africa, Sub-Saharan Africa, Barents Sea, Kazakhstan, Venezuela and the Far East, leveraging Eni’s vast knowledge of reservoirs and geological basins, as well as technical and producing synergies.
Management plans to maximize the production recovery rate at our current fields by counteracting natural field depletion and reducing facilities downtime. This will require intense development activities of work-over and infilling and careful planning of maintenance activities. We expect that continuing technological innovation and competence build-up will drive increasing rates of reserve recovery.
Management intends to implement a number of initiatives to support profitability in its upstream operations by exercising tight control on project time schedules and costs. We plan to achieve efficient development of our reserves by: (i) in-sourcing critical engineering and project management activities also redeploying to other areas key competences which will be freed with the start-up of certain strategic projects and increase direct control and governance on construction and commissioning activities; and (ii) signing framework agreements with major suppliers, using standardized specifications to speed up pre-award process for critical equipment and plants, increasing focus on supply chain programming to optimize order flows. Based on these initiatives we believe that almost all of our project which we are currently developing over the next four-year plan will be completed on time and on cost schedule.

Production and reserves: 2014 and outlook
In 2014, Eni’s liquids and gas production of 1,598 kboe/d increased by 0.6% from 2013, excluding the impact of the divestment of Eni’s interest in Siberian assets. The main production increases were reported in the United Kingdom, Algeria, the United States and Angola. These additions more than offset mature fields’ declines. New fields’ start-ups and continuing production ramp-ups contributed 126 kboe/d of production.
In the year we achieved the following main start-ups: (i) the West Hub Development Project in Angola. This first Eni-operated producing project in the Country is currently producing 45 kboe/d through the N’Goma FPSO, with a production ramp-up expected to reach a plateau up to 100 kboe/d in the coming months. The start-up was achieved in just 44 months from the announcement of the commercial discovery, a result that is at the top of the industry for development in deep waters. The N’Goma FPSO is currently producing from the Sangos discovery, future production will leverage the progressive hooking up of the block’s discoveries; (ii) the recent Nené Marine discovery in Congo just 8 months after obtaining the production permit. The early production phase is yielding 7,500 boe/d and the fast-track development of the field has leveraged on the synergies with the front-end loading and the infrastructures of the fields located in the area. The full-field development will take place in several stages and will include the installation of production platforms and the drilling of approximately 30 wells, with a plateau of over 120 kboe/d; and (iii) the DEKA project (Eni operator with a 50% interest) in Egypt with a production of approximately 64 mmcf/d of gas and 800 bbl/d of associated condensates. Peak production is expected at approximately 230 mmcf/d net to Eni.
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.
Estimated net proved reserves at December 31, 2014 amounted to 6.6 bboe based on a reference Brent price of $101 per barrel. Additions to proved reserves booked in 2014 were 654 mmboe and derived from: (i) revisions of previous estimates were 524 mmboe mainly reported in Libya, Italy, Kazakhstan and Congo due to contractual revisions, continuous development activities and field performances; (ii) extensions and discoveries were up by 124 mmboe, with major increases booked in Ghana, Indonesia, the United States and Congo following new project sanctions and proved area extensions; (iii) improved recovery were up by 6 mmboe mainly reported in Algeria and Kazakhstan; (iv) sales of mineral-in-place mainly related to the divestment of assets in Nigeria (down by 7 mmboe) and the United Kingdom (down by 1 mmboe); and (v) purchases of minerals-in-place referred mainly to interests in assets located in the United Kingdom (up by 4 mmboe).
The reserves life index was 11.3 years (11.1 years in 2013).
Eni intends to pay special attention to reserve replacement in order to ensure the medium to long-term sustainability of the business. In 2014, we achieved an all sources replacement ratio of 112% through fast sanctioning and relentless focus on field development. Going forward, our reserve replacement will be underpinned by our strong focus on exploration and timely conversion of resources into reserves and production, while at the same time fighting depletion and enhancing the recovery factor in existing fields through effective reservoir management.

| Exploration

Exploration is the engine of our strategy in the upstream business. Exploration has proved to be a driver of production growth and value generation, as well as Eni’s distinctive feature among the oil majors. Since 2008, Eni has discovered over 10 billion boe in place, corresponding to a growth of 35% in our resource base, more than every other player in the oil industry, of which approximately 900 million boe were discovered in 2014, at a competitive cost of $2.1 per boe. Near-field discoveries marked the year’s activity, in particular: (i) Ochigufu in the deep waters of Block 15/06 in Angola; (ii) in the conventional waters of Block Marine XII in Congo, Minsala was the third discovery in the last two years increasing the block’s resources in place by 1 billion barrels with characteristics similar to the previous discoveries of Litchendjili and Nené, the latter started up early production in record time; (iii) Oglan in Block 10 in Ecuador with a potential in place estimated at approximately 300 million barrels of oil located near the processing facilities of the operated field of Villano; (iv) Merakes in offshore Indonesia. This discovery with a potential in place estimated at approximately 2 Tcf, is located in proximity of the operated field of Jangkrik, which is currently under development and will supply additional gas volumes to the Bontang LNG plant; (v) the appraisal gas wells Agulha 2 and Coral 4 DIR in Mozambique, confirming the extension of their respective fields with a potential in place in Area 4 estimated at approximately 88 Tcf; (vi) Nyonie in the conventional waters of

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Exploration & Production / Business review Eni in 2014

Block D4 in Gabon, with an estimated potential of approximately 500 million boe in place of gas and condensates; (vii) the oil&gas Drivis discovery made at the offshore license PL 532 (Eni 30%) in Norway, with volumes in place estimated in the range of 125 and 140 million barrels and will be put into production with the development of the Johan Castberg Hub; and (viii) the oil discovery ARM-14 in the Abu Rudeis license (Eni 100%) in the Gulf of Suez in Egypt, doubled production level in 2014. These discoveries are expected to have a rapid time-to-market leveraging on the synergies from the front-end loading of ongoing projects and utilization of existing production infrastructures.
Leveraging on these results, our exploration plan has been shaped to face the actual challenging scenario:
• by shifting focus to proven plays and near field exploration where we plan to drill 70% of our scheduled wells; and
• by reducing capital expenditure of 35% net of exchange rate effects in 2015 and 25% over the plan period. Exploration projects will attract some euro 5 billion. The most important amounts of exploration expenses will be incurred in Norway, Nigeria, the United States and Italy.
We target the discovery of 2 billion boe of new resources in the four-year plan at a very competitive cost of $2.6 per boe. We plan to anticipate cash generation by disposal of interests in our discoveries in order to balance costs/risk exposure and profitability in an optimal way, in the meanwhile ensuring the reserve replacement and balanced presence in the worldwide upstream.
We plan to mitigate the operational risk relating to drilling activities by applying Eni’s rigorous procedures throughout the engineering and execution stages by leveraging on proprietary drilling technologies, excellent skills and know-how, increased control of operations and by deploying technologies which we believe to be able to reduce blow-out risks and to enable the Company to respond quickly and effectively in case of emergencies.
We renewed our exploration portfolio through the acquisition of new acreage covering approximately 100,000 square kilometers net to Eni, along the guideline of diversifying the geographical presence. As of December 31, 2014, Eni’s mineral right portfolio consisted of 938 exclusive or shared rights of exploration and development activities for a total acreage of 334,739 square kilometers net to Eni of which developed acreage of 40,771 square kilometers and undeveloped acreage of 293,968 square kilometers net to Eni. We confirm our expansion plans in the Pacific Basin, where we signed the contracts of production sharing for the exploration of 2 onshore blocks in Myanmar and 3 offshore blocks in Vietnam, in addition to the acquisition of licenses in Indonesia, Australia and China. We also confirm our interest for the unexplored basins, following Eni’s entrance in the offshore of Portugal, South Africa and deep offshore of Egypt.

| Develop new projects to fuel future growth

Eni has a strong pipeline of development projects that will fuel the medium and long-term growth of its oil and gas production. The pipeline of projects is geographically diversified and will become even more balanced across our hubs. These projects have an average breakeven of $45 per boe and will generate an overall cash

  flow from operations of euro 19 billion in the four-year plan.
We are aiming at excellence in time-to-market in order to maximize the value of our reserves. We plan to achieve development efficiency leveraging on the integration of skills along the life cycle of the reserves and by deploying an innovative organizational model which insources engineering and retains tight control of construction and commissioning. Phased project development allowed us to mitigate operating risks and reduce the financial exposure.
This approach led to the top results in the industry such as, above mentioned, the West Hub Development Project in Angola and the Block Marine XII in Congo. The latter is the best example of our integrated approach. With the discoveries of Nené, Minsala and Litchendjili we proved that, with advanced technology and innovative geological concepts, it is feasible to unlock material upside also in mature acreage. The huge potential of this play is now about 5.5 bboe of resources and we expect further upsides from the completion of the appraisal of Minsala and the drilling of two additional prospects. In Nené, we expect FID for the second phase by the end of 2015. In addition, later this year, Litchendjili will start oil&gas production. At the end of this decade, we will achieve an overall production of 150 kboe/d.
In the next four years, we plan to start-up 16 new major fields operated by Eni. In addition to the above mentioned fields, the main projects include: (i) the Goliat field in the Barents Sea in Norway. The FPSO vessel reached Norway in April 2015 and started the final commissioning phase. Start-up is expected in the second half of 2015, with a production plateau at approximately 65 kboe/d net to Eni in 2016; (ii) the giant Perla gas field in the Block Cardon IV (Eni’s interest 50%), located in the Gulf of Venezuela. The early production start-up is expected by the second quarter of 2015 with a target production of approximately 460 mmcf/d. Production ramp-up is expected in 2017 with a target of approximately 800 mmcf/d. The development plan targets a long-term production plateau of approximately 1,200 mmcf/d in 2020; (iii) the East Hub in Block 15/06 in Angola, which will leverage on the synergies with West Hub. Production start-up is expected in 2017, contributing to an overall block production of 45 kboe/d at the end of the period; (iv) the Offshore Cape Three Points block in Ghana, with a fast track deep offshore development and time-to-market of just four years. Management plans to sanction FID in December and production start-up is targeted in 2017. The project will reach a production of about 40 kboe/d in 2019; and (v) the Jangkrik field in the Kalimantan offshore, in Indonesia. The project includes drilling of production wells linked to a Floating Production Unit for gas and condensate treatment, as well as construction of a transportation facility. Start-up is expected in 2017.
Finally we plan to achieve further cost efficiencies by: (i) increasing the scale of our operations as we concentrate our resources on larger fields than in the past where we plan to achieve economies of scale; (ii) expanding projects where we serve as operator. We believe operatorship will enable the Company to exercise better cost control, effectively manage reservoir and production operations, and deploy our safety standards and procedures to minimize risks; (iii) applying our technologies which we believe can reduce drilling and completion costs; and (iv) renegotiating contracts for oilfield services and other items to reap the benefits of the deflationary trend in the industry.

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Gas & Power / Business review Eni in 2014

Key performance indicators
  2012 2013 2014
Injury frequency rate of total Eni workforce   (No. of accidents per million of worked hours)   2.23   1.43   0.49  
Net sales from operations (a)   (euro million)   36,198   32,212   28,250  
Operating profit       (3,125 ) (2,967 ) 186  
Adjusted operating profit       398   (638 ) 310  
Adjusted net profit       479   (253 ) 190  
Capital expenditure       213   229   172  
Worldwide gas sales (b)   (bcm)   95.32   93.17   89.17  
LNG sales (c)       14.6   12.4   13.3  
Customers in Italy   (million)   7.45   8.00   7.93  
Electricity sales   (TWh)   42.58   35.05   33.58  
Employees at year end   (number)   4,836   4,616   4,228  
GHG emissions   (mmtonnes CO2 eq)   12.77   11.22   10.08  
Customer satisfaction score (CSC) (d)   (%)   89.7   92.9   93.4  
Water consumption/withdrawals per kWh eq produced   (cm/kWh eq)   0.012   0.017   0.017  
(a) Before elimination of intragroup sales.
(b) Include volumes marketed by the Exploration & Production segment of 3.06 bcm (2.73 and 2.61 bcm in 2012 and 2013, respectively).
(c) Refers to LNG sales of the Gas & Power segment (included in worldwide gas sales) and the Exploration & Production segment.
(d) Data referred to the first half of 2014, as at the date of publication of this document Authority for Electricity Gas and Water (AEEGSI) hasn’t published yet the data for the second part of the year.

 

2014

  

Highlights
Performance of the year
è In 2014, employees’ and contractors’ injury frequency rates declined by 66%, in line with historical trends.
è Greenhouse gas emissions decreased by 10.2% from 2013.
è The water consumption rate of EniPower’s plants decreased by 5.9% from 2013, while the same index per KWh produced was substantially stable. The decrease was due to lower use of sea water in cooling operations at Brindisi site and lower production of electricity at Livorno site, due to an unfavorable trading environment, with steam and freshwater consumption almost unchanged from 2013.
è Eni gas sales (89.17 bcm) were down by 4.3% compared to 2013. Eni’s sales in the domestic market of 34.04 bcm 		  decreased by 5.1% driven by lower sales in all the business segments partially offset by higher spot sales. Barely unchanged volumes marketed in the main European markets (42.21 bcm; down by 1.1%).
è Electricity sales of 33.58 TWh decreased by 1.47 TWh, or 4.2% compared to the previous year.
è Capital expenditure of euro 172 million mainly concerned the flexibility and upgrading of combined cycle power stations (euro 98 million), as well as gas marketing initiatives (euro 66 million).
è In 2014, adjusted net profit amounted to euro 190 million, up by euro 443 million from 2013. This reflected the benefits from the renegotiation of a substantial portion of the long-term gas supply 		  portfolio, including larger one-off effects related to the purchase costs of volumes supplied in previous reporting periods. These positive effects were partially offset by declining gas and power prices against the backdrop of continuing weak demand and competitive pressure.
è In 2014, we achieved several renegotiations of our long-term gas supply contracts and we obtained a reduction in take-or-pay volumes. Approximately 70% of our long-term gas supply portfolio is now indexed to hub prices. Cash advances paid to suppliers due to the take-or-pay clause in those long-term supply contracts were reduced by euro 0.66 billion also leveraging on sales optimization.

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Gas & Power / Business review Eni in 2014

| Strategies

Eni's management expects a weak outlook for natural gas sales and prices due to structural headwinds in the industry as we forecast demand stagnation, oversupplies and strong competition across all of our main markets in Europe, including Italy.
We believe that going forward reduced sales opportunities and continued pricing competition will be caused by weaker-than-anticipated demand growth which is expected to be dragged down by macroeconomic uncertainties and by the current downturn in the thermoelectric sector which will be penalized by the competition from coal which is cheaper than gas in firing power plants and the development of renewable sources of energy (photovoltaic, solar to name the most important). The absolute level of gas consumption in Europe contracted by approximately 12% in the time span from 2008 to 2013 and in 2014 gas consumption fell dramatically by a further 12%. According to our projections gas consumption will return back to 2013 levels somewhere in 2020.

Against this backdrop, European markets remains well supplied thanks to the fast development of liquid hubs where operators can trade spot gas. In 2013, approximately 62% of gas volumes supplied were traded at continental hubs. These trends will drive continuing competition and pricing pressure, which are expected to be exacerbated by the constraints of the long-term supply contracts

  with take-or-pay clauses whereby wholesaler operators are forced to compete aggressively on pricing in order to limit the financial exposure dictated by the contracts.
In Italy we expect that gas prices in the wholesale market will remain under pressure due to a number of negative factors including competitive pressure and the current level of minimum take volumes of Italian operators which are well above the absolute dimension of the Italian market. In the retail market, the regulated tariffs to residential and commercial users are currently indexed to spot prices of gas quoted at continental hubs.

Based on the above outlined trends and industrial actions, management will try to retain profitable, cash-positive operations in the Company’s gas marketing business over the plan period.

To achieve this object we intend to put in place the following strategic guidelines:
n alignment of the supply portfolio to market conditions starting from 2016, leveraging on further renegotiations;
n streamlining of operations and optimization of logistic costs; and
n development and growth in the value added segments, in particular in the retail segment, developing the client base also through the sale of extra-commodity products, as well as in the LNG segment, leveraging on the marketing opportunities in premium markets and upstream integration.

 

Gas & Power value chain

Eni’s Gas & Power segment engages in all phases of the natural gas value chain: supply, trading and marketing of natural gas and LNG. This segment also includes power generation and marketing of electricity. Eni’s leading position in the European gas market is ensured by a set of competitive advantages, including our multi-country approach, long-term gas availability, access to infrastructures, market knowledge and a strong customer base, in addition to long-term relations with producing countries. Furthermore, integration with our upstream operations provides valuables growth options whereby the Company targets to monetize its large gas reserves.

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Refining & Marketing / Business review Eni in 2014

Key performance indicators
  2012 2013 2014
Injury frequency rate of total Eni workforce   (No. of accidents per million of worked hours)   1.74   1.01   0.86  
Net sales from operations (a)   (euro million)   62,531   57,238   56,153  
Operating profit       (1,264 ) (1,492 ) (2,229 )
Adjusted operating profit       (289 ) (457 ) (208 )
Adjusted net profit       (181 ) (232 ) (147 )
Capital expenditure       898   672   537  
Refinery throughputs on own account   (mmtonnes)   30.01   27.38   25.03  
Conversion index   (%)   61   62   51  
Balanced capacity of refineries   (kbbl/d)   767   787   617  
Retail sales of petroleum products in Europe   (mmtonnes)   10.87   9.69   9.21  
Service stations in Europe at year end   (number)   6,384   6,386   6,220  
Average throughput per service station in Europe   (kliters)   2,064   1,828   1,725  
Retail efficiency index   (%)   1.48   1.28   1.19  
Employees at year end   (number)   8,608   8,438   6,774  
GHG emissions   (mmtonnes CO2 eq)   6.06   5.20   5.34  
SOx (sulphur oxide) emissions   (ktonnes SO2 eq)   16.99   10.80   6.09  
Water consumption rate (refineries)/refinery throughputs   (cm/tonnes)   25.43   19.98   22.42  
Bio-fuels marketed   (mmtonnes)   14.83   10.84   12.93  
Customer satisfaction index   (Likert scale)   7.90   8.10   8.20  
(a) Before elimination of intragroup sales.

 

2014

  

Highlights
Performance of the year
è In 2014, the injury frequency rate for employees and contractors was down 14.9% demonstrating our continuing commitment for a more secure workplace.
è In 2014, the Refining & Marketing segment reduced the adjusted net loss to euro 147 million (euro 232 million in 2013) driven by improved margins and restructuring initiatives, including the start-up of the green refinery project in Venice, and cost efficiencies.
è In 2014, refining throughputs were 25.03 mmtonnes, down by 8.6% from 2013. In Italy, processed volumes decreased by 11.7% mainly due to the unfavorable refinery scenario registered in the first part of the year and the shutdown of the Gela and Venice refineries.
è In 2014, the production of bio-fuels amounted to 12.93 mmtonnes, up by 		19.3% compared to a year ago following the start-up of the bio-refinery in Venice.
è Retail sales in Italy amounted to 6.14 mmtonnes, down by 7.5% from 2013 due to strong competitive pressure. In 2014, Eni’s average retail market share was 25.5%, down by 2 percentage points from 2013.
è Retail sales in the rest of Europe of 3.07 mmtonnes were substantially stable compared to 2013 (up by 0.7%). Higher volumes marketed in Germany and Austria were offset by lower sales of other subsidiaries.
è Capital expenditure amounted to euro 537 million mainly related to the reconversion of the Venice refinery and improvement of flexibility and yields of the other plants, in particular at Sannazzaro refinery and the rebranding of the retail distribution network.		   è In 2014, expenditure in R&D amounted to approximately euro 18 million. During the year, 15 patent applications were filed.

Portfolio rationalization
è In line with the Eni’s strategy focused on selectively growing in high profitable markets, Eni signed a preliminary agreement for the divestment of its marketing activities of fuels located in Czech Republic, Slovakia and Romania to the Hungarian Company MOL. The agreement also comprises the refinery capacity to supply the marketing network through a 32.445% interest in the joint refining asset Ceská Rafinérská as (CRC). All these agreements are subject to the approval of the relevant European Antitrust Authorities.

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Development plan of the Gela site
è In November 2014, Eni defined with the Ministry for Economic Development, the Region of Sicily and interested stakeholders a plan to restore the profitability of the Gela refinery. The key point of the agreement is the reconversion of the Gela site to a bio-refinery.
è The reconversion will follow the model adopted for the Venice green refinery, by leveraging on raw vegetable materials and use of the proprietary technologies. 		  The agreement also defines terms for building a modern logistic hub and new initiatives in the upstream sector in Sicily, including offshore. Eni will also perform environmental remediation and clean-up activities and institute the Safety Competence Center (SCC), a center of excellence in the security field. The investment plan for such initiatives amounts to euro 2.2 billion, mainly relating to upstream projects in the Sicily region.   Start-up of Venice bio-refinery
è In June 2014, the start-up of the bio-refinery of Porto Marghera was achieved, with a green diesel capacity of 300 ktonnes/y. The green diesel is produced from refined vegetable oil utilizing the proprietary EcofiningTM technology. The production will fulfill half of the Eni’s annual requirement of green diesel, thus ensuring new perspectives for the industrial site of Venice and allowing economic and environmental benefits.

 

| Strategies

For the next four years, the priority of Eni's Refining & Marketing segment is to return to profitability in the context of weak fundamentals of the European refining market, affected by weak demand, structural overcapacity and competitive pressure from streams of cheaper products from Asia, Russia and the United States.

Against this scenario, the Company priority is to recover the economic and financial sustainability in a short timeframe, targeting to break even at both adjusted operating profit and cash generation before investment in 2015, then to stabilize profitability and cash generation in the long run. In order to achieve this goal, our strategy in the Refining & Marketing sector will leverage on reducing and rationalizing refining capacity in order to limit the Company’s exposure to volatile refining margins, and on efficiency initiatives. We are planning for a 50% capacity cut (2012 base) which, once implemented, will bring our installed capacity in line with our targeted exposure to the refining business considering our view of industry trends and fundamentals.
Till 2014, we have delivered a 30% capacity downsizing, including the shutdown of the Venice refinery, which underwent a restructuring process to be converted into a plant for the production of bio-fuels based on a proprietary technology, and of the Gela refinery, which will be converted into a unit for the manufacturing of bio-fuels like the Venice site and into a logistic hub. Finally we signed a preliminary agreement to divest our interest in a refining asset located in the Czech Republic and we expect to close the transaction by mid 2015.

  We believe that the restructuring initiatives implemented so far have reduced the refining break-even margin. Going forward, we plan to divest our interests in certain refining assets abroad and to downsize our less competitive Italian refineries. We intend to make selective capital expenditures expecting to invest approximately euro 1 billion to improve efficiency and optimize existing plant, to complete the bio-refinery at the Venice site and to implement the Gela project.

We have defined other initiatives designed to provide for:
n optimize plant set-up and logistics operations by means of higher flexibility and process integration; and
n deliver cost efficiencies, particularly in refinery fixed expenses and energy savings.

In Marketing activities, where we expect continuing competitive pressure due to weak demand trends and oversupplies in our core domestic market, we are planning to achieve a gradual improvement in results of operations mainly by focusing on margin preservation and cost efficiencies. We will try to do this by means of effective marketing initiatives to retain customers, product and service innovation and a continuing focus on the quality of service, as well as the expansion of non-oil activities. Management plans to improve the efficiency of the Italian retail network by closing low-throughput outlets and other rationalizations. Retail operations abroad will be focused on those areas and markets where we expect attractive profitability due to an improving scenario for consumption, while we plan to divest our presence in marginal areas, mainly in Eastern Europe.

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Versalis / Business review Eni in 2014

Key performance indicators
  2012 2013 2014
Injury frequency rate of total Eni workforce   (No. of accidents per million of worked hours)   1.09   0.57   0.28  
Net sales from operations (a)   (euro million)   6,418   5,859   5,284  
     Intermediates       3,050   2,709   2,310  
     Polymers       3,188   2,933   2,800  
     Other sales       180   217   174  
Operating profit       (681 ) (725 ) (704 )
Adjusted operating profit       (483 ) (386 ) (346 )
Adjusted net profit       (395 ) (338 ) (277 )
Capital expenditure       172   314   282  
Production   (mmtonnes)   6,090   5,817   5,283  
Sales of petrochemical products       3,953   3,785   3,463  
Average plant utilization rate   (%)   66.7   65.3   71.3  
Employees at year end   (number)   5,668   5,708   5,443  
GHG emissions   (mmtonnes CO2 eq)   3.72   3.69   3.09  
NMVOC (Non-Methane Volatile Organic Compound) emissions   (ktonnes)   4.40   3.93   3.51  
NOx (nitrogen oxide) emissions   (ktonnes NO2 eq)   3.43   3.29   2.45  
Recycled/reused water   (%)   81.6   86.2   87.7  
(a) Before elimination of intragroup sales.

 

2014

  

Highlights
Performance of the year
è In 2014, the injury frequency rate (employees and contractors) was more than halved (down by 50.9%) compared to 2013, in continuation of historical positive trend.
è In 2014, greenhouse gas emissions and other emissions in the atmosphere were lower than in 2013 (down by 16.3%), following the restructuring of the production assets. Recycled/reused water rate improved, up to 87.7%.
è In 2014, adjusted net loss was euro 277 million, euro 61 million lower than in 2013, benefiting from improved margins of intermediates and polyethylene. Results reflected efficiency initiatives and restructuring programs, mainly relating to the start-up of the Porto Torres Green Chemical project and the shutdown of certain unprofitable production units.
è Sales of petrochemical products amounted to 3,463 ktonnes, down by 322 ktonnes, or 8.5% from 2013, driven by weak commodity 		  demand and strong competition.
è In 2014, expenditure in R&D amounted to approximately euro 40 million, 14 patent applications were filed.

Restructuring of petrochemical activities in Sardinia
è In June 2014, the Green Chemical project of Matrìca, a 50/50 joint venture between Versalis and Novamont, started operations marking the full conversion of the Porto Torres site. Matrìca’s plant is currently leveraging on an innovative technology to transform vegetable oils into monomers and intermediates that are feedstock for the production of complex production of bio-products destined among other to the tyre industry, production of bio-lubricants and plastic. The overall production capacity of approximately 70 ktonnes per year will come gradually online during 2015. The cracking production line was definitively shut down.

   è At the end of December 2014, Versalis signed an agreement to divest the Sarroch plant to the refining company Saras, which owns a refinery close to Eni’s petrochemical site. The agreement includes the disposal of the Versalis plants connected with the production cycle of the refinery, in particular the reforming unit, the propylene splitter unit and other related services, including the logistics system.

The Green Chemical project of Porto Marghera
è In November 2014, Eni defined with the Ministry for Economic Development and the interested stakeholders a plan to restore the profitability of the petrochemical plant at Porto Marghera. The project, in partnership with the US-based company Elevance Renewable Science Inc, envisages building of world-scale plants which are the first of their kind and the

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new technology for the production of bio-chemical intermediates from vegetable oils destined for high added-value industrial applications such as detergents, bio-lubricants and chemicals for the oil industry.

Development and sustainability initiatives
è In November 2014, Versalis signed a partnership with Solazyme, an

  US-based renewable oil and bio-products company, aimed to expand market access and commercial use of Encapso™ – the world’s first commercially – available, biodegradable encapsulated lubricants for drilling fluids. Encapso will also be used in oil and gas fields operated by Eni.
è Following the strategic partnership signed in 2013 with Yulex, an US-		   based leader in bio-materials, to produce guayule-based bio-rubber by using non-food feedstock, is under development the agronomic protocol and the innovative technology engineering, through the development of the entire supply chain, from the cultivation to the extraction of natural rubber, until the construction of a bio-mass power station.

 

| Strategies

Versalis’ operations are exposed to volatile costs of oil-based feedstock and the cyclicality of demand due to the commoditized nature of product portfolio and underlying weaknesses in the industry. Our commodity chemical businesses have been unprofitable in recent years and we expect only limited improvements in the scenario in the foreseeable future due to structural cost disadvantages with respect to Asian and Middle East players and also US players, as well as a weak macroeconomic outlook which will hamper a sustainable recovery in demand. We believe that the current improvement in the cost of oil-based feedstock will provide only limited upside to the weak underlying fundamentals of the petrochemical sector in Europe.

Against this backdrop, our priority is the economic and financial sustainability in the medium and long term. The breakeven at

  adjusted operating profit and operating cash flow is expected to be achieved from 2016.

This target will be driven by implementing the following strategic guidelines:
n downsizing the installed capacity in commoditized and loss-making businesses through the reconversions of inefficient units and plant shutdown and/or divestment and rationalization of the other businesses;
n refocusing our chemical portfolio on high value-added productions (i.e. specialties) also through the development of green chemistry; and
n upgrading of our production platform by means of the internationalization of the business to serve global clients and markets featured by high demand growth, also through strategic alliances with industrial partners.

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Engineering & Construction / Business review Eni in 2014

Key performance indicators
  2012 2013 2014
Injury frequency rate of total Eni workforce   (No. of accidents per million of worked hours)   0.32   0.26   0.28  
Net sales from operations (a)   (euro million)   12,799   11,598   12,873  
Operating profit       1,453   (98 ) 18  
Adjusted operating profit       1,485   (99 ) 479  
Adjusted net profit       1,111   (253 ) 309  
Capital expenditure       1,011   902   694  
Orders acquired   (euro million)   13,391   10,062   17,971  
Order backlog       19,739   17,065   22,147  
Employees at year end   (number)   43,387   47,209   49,559  
Employees outside Italy rate   (%)   88.1   89.1   89.9  
Local managers rate       41.3   41.3   42.0  
Local procurement rate       57.4   54.3   55.6  
GHG emissions   (mmtonnes CO2 eq)   1.54   1.54   1.42  
Water withdrawals   (million of cubic meters)   8.25   8.74   6.32  
(a) Before elimination of intragroup sales.

 

2014

  

Highlights
Performance of the year
è In 2014, the injury frequency rate registered a 7.7% increase due to a poor performance for contractors (up by 12.7%), partially offset by a lower injury frequency rate for employees (down by 4.9%).
è In 2014, adjusted net profit of the Engineering & Construction segment amounted to euro 309 million, up by euro 562 		  million from the adjusted net loss of euro 253 million reported in 2013, which was driven by extraordinary contract losses.
è Orders acquired amounted to euro 17,971 million (euro 10,062 million in 2013), 97% of which relating to the works outside Italy, while orders from Eni companies amounted to 8% of the total.
è Order backlog amounted to euro 22,147 		  million at December 31, 2014 (euro 17,065 million at December 31, 2013), of which euro 9,035 million to be executed in 2015.
è Expenditure in R&D amounted to euro 12 million. 20 patent applications were filed.
è Capital expenditure amounted to euro 694 million (euro 902 million in 2013) which mainly regarded the upgrading of the drilling and construction fleet.

 

| Strategies

We expect a challenging trading environment in the oilfield services sector due to lower crude oil prices. In spite of this, we forecast that the execution of recently-acquired projects will support operating results.

Over the four-year plan, the Engineering & Construction segment intends to improve profitability by growing in those

  market segments where it owns competitive advantages, like ultra-deep projects, pipeline laying, onshore projects in harsh environments and with other complexities. The Engineering & Construction segment will leverage on the enhancement of the EPC(I)-oriented business model, its world-class technology, engineering and delivering skills, its strong local presence and established relationships with other major oil companies and national oil companies. The profitability and cash generation over the plan period will be sustained by selective capital expenditure, efficiency actions and working capital optimization.

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Group results for the year / Financial review Eni in 2014

Group results for the year

In 2014, the Group faced strong headwinds in any of its reference markets. Oil&gas realizations in dollar terms declined due to lower a Brent price, down by 9% from 2013, and lower gas benchmarks. Eni’s refining margins (Standard Eni Refining Margin-SERM) that gauge the profitability of Eni’s refineries were up by 32.1% from the particularly depressed level of 2013, due to a fall in the cost of crude oil feedstock. However, the European refining business continued to be affected by structural headwinds from lower demand, overcapacity and increasing competitive pressure from streams of cheaper refined products imported from Russia, Asia and the United States. The European gas market was adversely affected by weak demand, competitive pressures and oversupply. Price competition was tough taking into account minimum off-take obligations provided by gas purchase take-or-pay contracts and reduced sales opportunities. Spot prices in Europe reported a decrease of 22.7% from 2013. Electricity sales reported negative margins due to oversupply and increasing competition from more competitive sources (photovoltaic and coal-fired plants).

| 2014 results

In 2014, net profit attributable to Eni’s shareholders was euro 1,291 million, a decline of euro 3,869 million from 2013, or 75%; operating profit of euro 7,917 million was down by 10.9%.
Business performance was adversely impacted by lower oil prices which decreased revenues in the Exploration & Production segment. The mid-downstream business segments reported cumulatively an improved performance of euro 1.2 billion reflecting gas contract renegotiations, cost efficiencies, as well as optimization and restructuring initiatives, in spite of an unfavorable trading environment. Furthermore, results were

  affected by a euro 221 million loss on the fair-valued interests in Galp and Snam which underlay two convertible bonds.
In addition to these business trends, 2014 net profit was impacted by net charges of euro 2,416 million due to the alignment of crude oil and product inventories to current market prices, asset impairments driven by a lower price environment in the near to medium term impacting the recoverable amounts of oil&gas properties and of rigs and construction vessels in Saipem, as well as the write-off of deferred tax assets of Italian subsidiaries (euro 976 million) due to the projections of lower future taxable profit (euro 500 million) and the write-off for euro 476 million of deferred tax assets accrued in connection with an Italian windfall tax of 6.5 percentage points which adds to the Italian statutory tax rate of 27.5%. This windfall tax, the so-called Robin Tax, was ruled to be illegitimate by an Italian Court on February 11, 2015. It was the first time that a sentence stated the illegitimacy of a tax rule prospectively, denying any reimbursement right. As a result of the abrogation, deferred tax assets of Italian subsidiaries were recalculated with the lower statutory tax rate of 27.5% instead of 33%, with the difference being written off. These effects were partly offset by the recognition of a tax gain of euro 824 million due to the settlement of a tax dispute with the Italian fiscal Authorities regarding how to determine a tax surcharge of 4% due by the parent company Eni SpA (the so-called Libyan tax) since 2009.
In 2013, significant disposal gains were recognized due to the divestment of a 20% stake in the Mozambique discovery (euro 2,994 million) and the fair-value evaluation of Eni’s interest in Artic Russia (euro 1,682 million), partly offset by extraordinary charges and inventory holding losses for euro 4 billion (post-tax). These transactions affected the year-on-year comparison of reported net profit.

In 2014, adjusted net profit attributable to Eni’s shareholders of euro 3,707 million decreased by 16.3% and excludes an inventory holding loss of euro 1,008 million and special charges of euro 1,408 million, net of tax, with a positive adjustment of euro 2,416 million.

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Group results for the year / Financial review Eni in 2014

Adjusted net profit
2012 (euro million) 2013 2014 Change % Ch.
4,200     Net profit attributable to Eni's shareholders - continuing operations   5,160   1,291   (3,869 ) (75.0 )  
(23 )   Exclusion of inventory holding (gains) losses   438   1,008            
2,953     Exclusion of special items   (1,168 ) 1,408            
7,130     Adjusted net profit attributable to Eni’s shareholders - continuing operations (a)   4,430   3,707   (723 ) (16.3 )  
(a) For a detailed explanation of adjusted operating profit and net profit see paragraph "Reconciliation of reported operating and net profit to results on an adjusted basis".

The breakdown of adjusted net profit by segment is shown in the table below:

Adjusted net profit by segment
2012 (euro million) 2013 2014 Change % Ch.
7,426     Exploration & Production   5,950   4,423   (1,527 ) (25.7 )  
479     Gas & Power   (253 ) 190 ) 443   ..    
(181 )   Refining & Marketing   (232 ) (147 ) 85   36.6    
(395 )   Versalis   (338 ) (277 ) 61   18.0    
1,111     Engineering & Construction   (253 ) 309   562   ..    
(247 )   Other activities   (205 ) (200 ) 5   2.4    
(977 )   Corporate and financial companies   (484 ) (651 ) (167 ) (34.5 )  
661     Impact of unrealized intragroup profit elimination (a)   39   152   113        
7,877     Adjusted net profit - continuing operations   4,224   3,799   (425 ) (10.1 )  
      of which attributable to:                    
747          - non-controlling interest   (206 ) 92   298   ..    
7,130          - Eni's shareholders   4,430   3,707   (723 ) (16.3 )  
(a) This item concerned mainly intragroup sales of commodities, services and capital goods recorded in the assets of the purchasing business segment at the reporting date.

Results by business segment

Exploration & Production
The Exploration & Production segment reported a 21.1% decrease in adjusted operating profit to euro 11,551 million. This result reflected reduced oil and gas realizations in dollar terms (down by 8.9% on average) higher depreciation charges taken in connection with the start-up of new fields mainly in the second half of 2013, achieving full ramp-up in the course of 2014. Adjusted net profit of euro 4,423 million decreased by 25.7% due to a reduced operating performance. The adjusted tax rate increased by approximately 2 percentage points in the year due to a larger share of taxable profit reported in countries with higher taxations.

Gas & Power
The Gas & Power segment reported an adjusted operating profit of euro 310 million reversing an adjusted operating loss of euro 638 million in 2013. The 2014 results were driven by better competitiveness due to the renegotiation of a substantial portion of the long-term gas supply portfolio, including one-off effects related to the purchase costs of volumes supplied in previous reporting periods, which was larger than in the full year 2013. The result also reflected a positive contribution of international LNG sales. These positives were partially offset by a continued decline in sale prices of gas and electricity, driven by weak demand and continuing competitive pressure, exacerbated by oversupply and market liquidity, as well as a different tariff regime for supplying gas to the residential regulated market.
Adjusted net profit of 2014 amounted to euro 190 million, up by euro 443 million reported in 2013. This reflected better operating performance, partially offset by lower results from equity-accounted entities.

   Refining & Marketing
The Refining & Marketing segment reported half-sized operating losses at euro 208 million compared to 2013, in spite of continuing industry headwinds on the back of weak demand and overcapacity. The improvement was driven by improved refining margins compared with the particularly depressed scenario of 2013 following a fall in oil prices, and restructuring initiatives, including the start of the green refinery project in Venice, and cost efficiencies, particularly with respect to energy and overhead costs. Marketing results were sustained by a decline of oil prices despite weak demand and rising competitive pressure. The adjusted net loss for the full year was euro 147 million, down by euro 85 million from the previous reporting period.

Versalis
Versalis reported an adjusted operating loss of euro 346 million, a decrease of euro 40 million, or 10.4% from 2013. The loss matured against the backdrop of an unfavorable trading environment which reflected continued weakness in commodity demand and increasing competition from non-EU producers. These trends were partly offset by efficiency initiatives and restructuring programs, mainly relating to the start-up of the Porto Torres Green Chemical project and the shutdown of certain unprofitable production units, as well as lower oil-based feedstock prices in the last part of 2014. Adjusted net loss of euro 277 million decreased by euro 61 million from 2013.

Engineering & Construction
The Engineering & Construction segment reported an adjusted operating profit of euro 479 million, up by euro 578 million from 2013 reflecting extraordinary losses incurred in 2013 driven by changed estimates at long-term contracts. Adjusted net profit increased by euro 562 million to euro 309 million.

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Group results for the year / Financial review Eni in 2014

Capital expenditure

2012 (euro million) 2013 2014 Change % Ch.
10,307     Exploration & Production   10,475   10,524   49   0.5    
43          - acquisition of proved and unproved properties   109                
1,850          - exploration   1,669   1,398            
8,304          - development   8,580   9,021            
110          - other expenditure   117   105            
213     Gas & Power   229   172   (57 ) (24.9 )  
200          - marketing   206   164            
13          - international transport   23   8            
898     Refining & Marketing   672   537   (135 ) (20.1 )  
675          - refining, supply and logistics   497   362            
223          - marketing   175   175            
172     Versalis   314   282   (32 ) (10.2 )  
1,011     Engineering & Construction   902   694   (208 ) (23.1 )  
14     Other activities   21   30   9   42.9    
152     Corporate and financial companies   190   83   (107 ) (56.3 )  
38     Impact of unrealized intragroup profit elimination   (3 ) (82 ) (79 )      
12,805     Capital expenditure - continuing operations   12,800   12,240   (560 ) (4.4 )  
756     Capital expenditure - discontinued operations                    
13,561     Capital expenditure   12,800   12,240   (560 ) (4.4 )  

 

In 2014, capital expenditure amounted to euro 12,240 million (euro 12,800 million in 2013) relating mainly to:
- development activities deployed mainly in Norway, Angola, Congo, the United States, Italy, Nigeria, Egypt, Kazakhstan, Indonesia and exploratory activities of which 98% was spent outside Italy, primarily in Libya, Mozambique, the United States, Angola, Nigeria, Indonesia, Cyprus, Norway and Gabon;
- upgrading of the fleet used in the Engineering & Construction segment (euro 694 million);
- refining, supply and logistics in Italy and outside Italy (euro 362 million) with projects designed to improve the conversion rate and flexibility of refineries, as well as the upgrade and rebranding of the refined product retail network in Italy and in the rest of Europe (euro 175 million); and
- initiatives to improve flexibility of the combined cycle power plants (euro 98 million).

Sources and uses of cash
The Company’s cash requirements for capital expenditures, buy-back program, dividends to shareholders, and working capital were financed by a combination of funds generated from

  operations, borrowings and divestments.
In 2014, net cash provided by operating activities amounted to euro 15,110 million, as it was supported by a reduction of working capital in E&P, G&P mainly due to a reduction in cash advances related to the take-or-pay clause in gas long-term supply contracts, as well as in Saipem. Proceeds from disposals were euro 3,684 million and mainly related to the divestment of Eni’s share in Artic Russia (euro 2,160 million), an 8% interest in Galp Energia (euro 824 million), Eni’s interest in the EnBW joint venture in Germany, as well as the divestment of Eni’s stake in the South Stream project. These cash inflows funded cash outlays relating to capital expenditure totaling euro 12,240 million and dividend payments, share repurchases and other changes amounting to euro 4,434 million (including euro 2,020 million related to the 2014 interim dividend paid to Eni’s shareholders and euro 380 million of share repurchases), reducing the Group’s net debt from December 31, 2013 by euro 1,278 million. Net cash provided by operating activities was negatively affected by lower receivables due beyond the end of the reporting period, being transferred to financing institutions compared to the amount transferred at the end of the previous reporting period (down by euro 961 million from December 31, 2013).

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Group results for the year / Financial review Eni in 2014

| Profit and loss account

2012 (euro million) 2013 2014 Change % Ch.
127,109     Net sales from operations   114,697   109,847   (4,850 ) (4.2 )  
1,548     Other income and revenues   1,387   1,101   (286 ) (20.6 )  
(99,674 )   Operating expenses   (95,304 ) (91,677 ) 3,627   3.8    
(158 )   Other operating income (expense)   (71 ) 145   216   ..    
(13,617 )   Depreciation, depletion, amortization and impairments   (11,821 ) (11,499 ) 322   2.7    
15,208     Operating profit   8,888   7,917   (971 ) (10.9 )  
(1,371 )   Finance income (expense)   (1,009 ) (1,065 ) (56 ) (5.6 )  
2,789     Net income from investments   6,085   490   (5,595 ) (91.9 )  
16,626     Profit before income taxes   13,964   7,342   (6,622 ) (47.4 )  
(11,679 )   Income taxes   (9,005 ) (6,492 ) 2,513   27.9    
70.2     Tax rate (%)   64.5   88.4   23.9        
4,947     Net profit - continuing operations   4,959   850   (4,109 ) (82.9 )  
3,732     Net profit - discontinued operations                    
8,679     Net profit   4,959   850   (4,109 ) (82.9 )  
      Attributable to:                    
7,790     Eni's shareholders:   5,160   1,291   (3,869 ) (75.0 )  
4,200     - continuing operations   5,160   1,291   (3,869 ) (75.0 )  
3,590     - discontinued operations                    
889     Non-controlling interest:   (201 ) (441 ) (240 ) ..    
747     - continuing operations   (201 ) (441 ) (240 ) ..    
142     - discontinued operations                    

Non-GAAP measures
Reconciliation of reported operating profit and reported
net profit to results on an adjusted basis

Management evaluates Group and business performance on the basis of adjusted operating profit and adjusted net profit, which are arrived at by excluding inventory holding gains or losses, special items and, in determining the business segments’ adjusted results, finance charges on finance debt and interest income. The adjusted operating profit of each business segment reports gains and losses on derivative financial instruments entered into to manage exposure to movements in foreign currency exchange rates which impact industrial margins and translation of commercial payables and receivables. Accordingly also currency translation effects recorded through profit and loss are reported within business segments’ adjusted operating profit.

The taxation effect of the items excluded from adjusted operating or net profit is determined based on the specific rate of taxes applicable to each of them. The Italian statutory tax rate is applied to finance charges and income. Adjusted operating profit and adjusted net profit are non-GAAP financial measures under either IFRS, or US GAAP. Management includes them in order to facilitate a comparison of base business performance across periods, and to allow financial analysts to evaluate Eni’s trading performance on the basis of their forecasting models. The following is a description of items that are excluded from the calculation of adjusted results.

Inventory holding gain or loss is the difference between the cost of sales of the volumes sold in the period based on the cost of supplies of the same period and the cost of sales of the volumes

  sold calculated using the weighted average cost method of inventory accounting.

Special items include certain significant income or charges pertaining to either: (i) infrequent or unusual events and transactions, being identified as non-recurring items under such circumstances; (ii) certain events or transactions which are not considered to be representative of the ordinary course of business, as in the case of environmental provisions, restructuring charges, asset impairments or write ups and gains or losses on divestments even though they occurred in past periods or are likely to occur in future ones; or (iii) exchange rate differences and derivatives relating to industrial activities and commercial payables and receivables, particularly exchange rate derivatives to manage commodity pricing formulas which are quoted in a currency other than the functional currency. Those items are reclassified in operating profit with a corresponding adjustment to net finance charges, notwithstanding the handling of foreign currency exchange risks is made centrally by netting off naturally-occurring opposite positions and then dealing with any residual risk exposure in the exchange rate market.
As provided for in Decision No. 15519 of July 27, 2006 of the Italian market regulator (CONSOB), non-recurring material income or charges are to be clearly reported in the management’s discussion and financial tables. Also, special items allow to allocate to future reporting periods gains and losses on re-measurement at fair value of certain non hedging commodity derivatives and exchange rate

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Group results for the year / Financial review Eni in 2014

derivatives relating to commercial exposures, lacking the criteria to be designed as hedges, including the ineffective portion of cash flow hedges and certain derivative financial instruments embedded in the pricing formula of long-term gas supply agreements of the Exploration & Production segment.

Finance charges or income related to net borrowings excluded from the adjusted net profit of business segments are comprised of interest charges on finance debt and interest income earned on cash and cash equivalents not related to operations. Therefore, the adjusted net profit of business segments includes finance charges or income deriving from

  certain segment-operated assets, i.e., interest income on certain receivable financing and securities related to operations and finance charge pertaining to the accretion of certain provisions recorded on a discounted basis (as in the case of the asset retirement obligations in the Exploration & Production segment). Finance charges or interest income and related taxation effects excluded from the adjusted net profit of the business segments are allocated on the aggregate Corporate and financial companies.

For a reconciliation of adjusted operating profit, adjusted net profit to reported operating profit and reported net profit see tables below.

 

2014

(euro million)

 Exploration & Production Gas & Power Refining & Marketing Versalis Engineering & Construction Corporate and financial companies Other activities Impact of unrealized intragroup profit elimination GROUP
Operating profit   10,766     186     (2,229 )   (704 )   18     (246 )   (272 )   398     7,917  
Exclusion of inventory holding (gains) losses         (119 )   1,576     170                       (167 )   1,460  
Exclusion of special items:                                                      
- asset impairments   692     25     284     96     420           14           1,531  
- gains on disposal of assets   (76 )         (2 )   45     2           3           (28 )
- risk provisions   (5 )   (42 )               25     5     7           (10 )
- environmental charges               111     27                 41           179  
- provision for redundancy incentives   24     11     (6 )         5     (22 )   (3 )         9  
- commodity derivatives   (28 )   (43 )   42     4     9                       (16 )
- exchange rate differences and derivatives   6     228     (9 )   4                             229  
- other   172     64     25     12           (2 )   32           303  
Special items of operating profit   785     243     445     188     461     (19 )   94           2,197  
Adjusted operating profit   11,551     310     (208 )   (346 )   479     (265 )   (178 )   231     11,574  
Net finance (expense) income (a)   (287 )   7     (9 )   (3 )   (6 )   (542 )   (22 )         (862 )
Net income from investments (a)   323     49     67     (3 )   21     (156 )               301  
Income taxes (a)   (7,164 )   (176 )   3     75     (185 )   312           (79 )   (7,214 )
Tax rate (%)   61.8     48.1     ..           37.4                       65.5  
Adjusted net profit   4,423     190     (147 )   (277 )   309     (651 )   (200 )   152     3,799  
of which attributable to:                                                      
- non-controlling interest                                                   92  
- Eni’s shareholders                                                   3,707  
Net profit attributable to Eni’s shareholders                                                   1,291  
Exclusion of inventory holding (gains) losses                                                   1,008  
Exclusion of special items                                                   1,408  
Adjusted net profit attributable to Eni’s shareholders                                                   3,707  

(a) Excluding special items.

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Group results for the year / Financial review Eni in 2014

2013

(euro million)

 Exploration & Production Gas & Power Refining & Marketing Versalis Engineering & Construction Corporate and financial companies Other activities Impact of unrealized intragroup profit elimination GROUP
Operating profit   14,868     (2,967 )   (1,492 )   (725 )   (98 )   (399 )   (337 )   38     8,888  
Exclusion of inventory holding (gains) losses         191     221     213                       91     716  
Exclusion of special items:                                                      
- asset impairments   19     1,685     633     44                 19           2,400  
- gains on disposal of assets   (283 )   1     (9 )         107           (3 )         (187 )
- risk provisions   7     292           4                 31           334  
- environmental charges         (1 )   93     61                 52           205  
- provision for redundancy incentives   52     10     91     23     2     72     20           270  
- commodity derivatives   (2 )   314     5     (1 )   (1 )                     315  
- exchange rate differences and derivatives   (2 )   (186 )   (2 )   (5 )                           (195 )
- other   (16 )   23     3           (109 )   (5 )   8           (96 )
Special items of operating profit   (225 )   2,138     814     126     (1 )   67     127           3,046  
Adjusted operating profit   14,643     (638 )   (457 )   (386 )   (99 )   (332 )   (210 )   129     12,650  
Net finance (expense) income (a)   (264 )   14     (6 )   (2 )   (5 )   (571 )   4           (830 )
Net income from investments (a)   367     70     56           2     290     1           786  
Income taxes (a)   (8,796 )   301     175     50     (151 )   129           (90 )   (8,382 )
Tax rate (%)   59.7     ..     ..           ..     41.5                 66.5  
Adjusted net profit   5,950     (253 )   (232 )   (338 )   (253 )   (484 )   (205 )   39     4,224  
of which attributable to:                                                      
- non-controlling interest                                                   (206 )
- Eni’s shareholders                                                   4,430  
Net profit attributable to Eni’s shareholders                                                   5,160  
Exclusion of inventory holding (gains) losses                                                   438  
Exclusion of special items                                                   (1,168 )
Adjusted net profit attributable to Eni’s shareholders                                                   4,430  

(a) Excluding special items.

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Group results for the year / Financial review Eni in 2014

2012

(euro million)

 Exploration & Production Gas & Power Refining & Marketing Versalis Engineering & Construction Corporate and financial companies OTHER ACTIVITIES Impact of unrealized intragroup profit elimination GROUP DISCONTINUED OPERATIONS CONTINUING OPERATIONS
Snam Other activities Snam Consolidation adjustments Total
Operating profit   18,470     (3,125 )   (1,264 )   (681 )   1,453     (341 )   1,679     (300 )   208     16,099     (1,679 )   788     (891 )   15,208  
Exclusion of inventory holding (gains) losses         163     (29 )   63                             (214 )   (17 )                     (17 )
Exclusion of special items:                                                                                    
- asset impairments   550     2,443     846     112     25                 2           3,978                       3,978  
- gains on disposal of assets   (542 )   (3 )   5     1     3           (22 )   (12 )         (570 )   22           22     (548 )
- risk provisions   7     831     49     18           5           35           945                       945  
- environmental charges         (2 )   40                       71     25           134     (71 )         (71 )   63  
- provision for redundancy incentives   6     5     19     14     7     11     2     2           66     (2 )         (2 )   64  
- commodity derivatives   1                 1     (3 )                           (1 )                     (1 )
- exchange rate differences and derivatives   (9 )   (52 )   (8 )   (11 )                                 (80 )                     (80 )
- other   54     138     53                             26           271                       271  
Special items of operating profit   67     3,360     1,004     135     32     16     51     78           4,743     (51 )         (51 )   4,692  
Adjusted operating profit   18,537     398     (289 )   (483 )   1,485     (325 )   1,730     (222 )   (6 )   20,825     (1,730 )   788     (942 )   19,883  
Net finance (expense) income (a)   (264 )   11     (14 )   (3 )   (7 )   (867 )   (54 )   (24 )         (1,222 )   54           54     (1,168 )
Net income from investments (a)   436     233     43     2     46     99     38     (1 )         896     (38 )         (38 )   858  
Income taxes (a)   (11,283 )   (163 )   79     89     (413 )   116     (712 )         2     (12,285 )   712     (123 )   589     (11,696 )
Tax rate (%)   60.3     25.4     ..           27.1           41.5                 59.9                       59.8  
Adjusted net profit   7,426     479     (181 )   (395 )   1,111     (977 )   1,002     (247 )   (4 )   8,214     (1,002 )   665     (337 )   7,877  
of which attributable to:                                                                                    
- non-controlling interest                                                         889                 (142 )   747  
- Eni’s shareholders                                                         7,325                 (195 )   7,130  
Net profit attributable to Eni’s shareholders                                                         7,790                 (3,590 )   4,200  
Exclusion of inventory holding (gains) losses                                                         (23 )                     (23 )
Exclusion of special items                                                         (442 )               3,395     2,953  
Adjusted net profit attributable to Eni’s shareholders                                                         7,325                 (195 )   7,130  

(a) Excluding special items.

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Contents

Group results for the year / Financial review Eni in 2014

Breakdown of special items

2012 (euro million) 2013 2014
4,743     Special items of operating profit   3,046     2,197  
3,978     - asset impairment   2,400     1,531  
(570 )   - gains on disposal of assets   (187 )   (28 )
945     - risk provisions   334     (10 )
134     - environmental charges   205     179  
66     - provision for redundancy incentives   270     9  
(1 )   - commodity derivatives   315     (16 )
(80 )   - exchange rate differences and derivatives   (195 )   229  
271     - other   (96 )   303  
203     Net finance (income) expense   179     203  
      of which:            
80     - exchange rate differences and derivatives   195     (229 )
(5,373 )   Net income from investments   (5,299 )   (189 )
      of which:            
(2,354 )        gains on disposal of assets   (3,599 )   (159 )
           of which:            
                               divestment of the 28.57% of Eni’s interest in Eni East Africa   (3,359 )      
(311 )                            Galp   (98 )   (96 )
(2,019 )                            Snam   (75 )      
                               South Stream         (54 )
(3,151 )        gains on investment revaluation   (1,682 )      
           of which:            
(1,700 )                            Galp            
(1,451 )                            Snam            
                               Artic Russia   (1,682 )      
191          impairments of equity investments   11     (38 )
(15 )   Income taxes   901     (270 )
      of which:            
803          - impairment of deferred tax assets of Italian subsidiaries   954     976  
           - other tax profit         (824 )
           - deferred tax adjustment on PSAs   490     69  
147          - re-allocation of tax impact on intercompany dividends and other special items   64     (12 )
(965 )        - taxes on special items of operating profit   (607 )   (479 )
(442 )   Total special items of net profit   (1,173 )   1,941  
      pertaining to:            
           - non-controlling interest   (5 )   533  
(442 )        - Eni's shareholders   (1,168 )   1,408  

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Contents

Group results for the year / Financial review Eni in 2014

| Summarized Group balance sheet

The summarized Group balance sheet aggregates the amount of assets and liabilities derived from the statutory balance sheet in accordance with functional criteria which consider the enterprise conventionally divided into the three fundamental areas focusing on resource investments, operations and financing. Management believes that this summarized Group balance sheet is useful   information in assisting investors to assess Eni’s capital structure and to analyze its sources of funds and investments in fixed assets and working capital. Management uses the summarized Group balance sheet to calculate key ratios such as the proportion of net borrowings to shareholders’ equity (leverage) intended to evaluate whether Eni’s financing structure is sound and well-balanced.

 

(euro million) December 31, 2013 December 31, 2014 Change
Fixed assets                  
Property, plant and equipment 63,763     71,962     8,199    
Inventories - Compulsory stock 2,573     1,581     (992 )  
Intangible assets 3,876     3,645     (231 )  
Equity-accounted investments and other investments 6,180     5,130     (1,050 )  
Receivables and securities held for operating purposes 1,339     1,861     522    
Net payables related to capital expenditure (1,255 )   (1,971 )   (716 )  
  76,476     82,208     5,732    
Net working capital                  
Inventories 7,939     7,555     (384 )  
Trade receivables 21,212     19,709     (1,503 )  
Trade payables (15,584 )   (15,015 )   569    
Tax payables and provisions for net deferred tax liabilities (3,062 )   (1,865 )   1,197    
Provisions (13,120 )   (15,898 )   (2,778 )  
Other current assets and liabilities 1,274     222     (1,052 )  
  (1,341 )   (5,292 )   (3,951 )  
Provisions for employee post-retirement benefits (1,279 )   (1,313 )   (34 )  
Assets held for sale including related liabilities 2,156     291     (1,865 )  
CAPITAL EMPLOYED, NET 76,012     75,894     (118 )  
Eni shareholders' equity 58,210     59,754     1,544    
Non-controlling interest 2,839     2,455     (384 )  
Shareholders’ equity 61,049     62,209     1,160    
Net borrowings 14,963     13,685     (1,278 )  
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY 76,012     75,894     (118 )  

 

The summarized Group balance sheet was affected by a sharp movement in the EUR/USD exchange rate which determined an increase in net capital employed, net borrowings and total equity of euro 5,145 million, euro 137 million and euro 5,008 million respectively following translation of the financial statements of US-denominated subsidiaries reflecting a 12% appreciation of the US dollar (1 EUR = 1.214 USD at December 31, 2014 compared to 1.379 at December 31, 2013).

Fixed assets amounted to euro 82,208 million, representing an increase of euro 5,732 million from December 31, 2013. The increase was attributable to favorable currency movements, capital expenditure (euro 12,240 million), upward revisions of the previous decommissioning provisions in the Exploration & Production segment mainly combine with a benign interest rate environment allowing an increase of euro 2,112 million. These increases were partly offset by the depreciation, depletion, amortization and impairment charges (euro 11,499 million), the reduction in the line item "Equity-accounted investments and other investments" (down by euro 1,051 million) due to the divestment of Eni’s interest in Galp and the fair value evaluation of the residual interest, the sale of other

  interests (South Stream and EnBw), as well as the decrease in the compulsory inventories reflecting lower commodity prices (euro 992 million).

Net working capital (negative euro 5,292 million) reported a decrease of euro 3,951 million. This reflected lower "Other current assets and liabilities" (down by euro 1,052 million) following the reduction of net receivables vs. joint venture partners in the Exploration & Production segment, and decreased deferred costs related to pre-paid gas volumes provided by take-or-pay obligations due to volume makeup in the year as a result of contract renegotiations. Also lower inventories of crude oil and products (down by euro 384 million) were recorded due to the alignment to current prices. The balance of trade receivables and trade payables declined by euro 934 million mainly in the Exploration & Production segment. Finally, lower tax payables and provisions for deferred taxes were recorded due to the recognition of the above mentioned tax gain on Libyan tax by the parent company Eni SpA, net of the amount already collected in the fourth quarter, and as taxes paid were larger than those accrued in the full year due to a lowered taxable profit. These were partly offset by the write-off of deferred tax assets of Italian subsidiaries for euro 976 million.

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Group results for the year / Financial review Eni in 2014

Shareholders’ equity including non-controlling interest was euro 62,209 million, representing an increase of euro 1,160 million from December 31, 2013. This was due to comprehensive income for the year (euro 5,598 million) as a result of net profit (euro 850 million), positive foreign currency effects (euro 5,008 million), net of negative changes in the cash flow hedge reserve (euro 167 million), and of the reversal of the fair-value reserve recorded in equity on Galp interest due to the divestment. This addition to equity was partly offset by dividend payments to Eni’s shareholders and other changes of euro 4,438 million (dividend to Eni’s shareholders of euro 4,006 million, of which euro 2,020 million related to the interim dividend for fiscal year 2014, share repurchases amounting to euro 380 million and dividends paid to non-controlling interest).

Net borrowings and leverage
Eni evaluates its financial condition by reference to net borrowings, which is calculated as total finance debt less: cash, cash equivalents and certain very liquid investments not

  related to operations, including among others non-operating financing receivables and securities not related to operations. Non-operating financing receivables consist of amounts due to Eni’s financing subsidiaries from banks and other financing institutions and amounts due to other subsidiaries from banks for investing purposes and deposits in escrow. Securities not related to operations consist primarily of government and corporate securities.

Leverage is a measure used by management to assess the Company’s level of indebtedness. It is calculated as a ratio of net borrowings which is calculated by excluding cash and cash equivalents and certain very liquid assets from financial debt to shareholders’ equity, including non-controlling interest. Management periodically reviews leverage in order to assess the soundness and efficiency of the Group balance sheet in terms of optimal mix between net borrowings and net equity, and to carry out benchmark analysis with industry standards.

 

(euro million) December 31, 2013 December 31, 2014 Change
Total debt: 25,560     25,891     331    
- short-term debt 4,685     6,575     1,890    
- long-term debt 20,875     19,316     (1,559 )  
Cash and cash equivalents (5,431 )   (6,614 )   (1,183 )  
Securities held for trading and other securities held for non-operating purposes (5,037 )   (5,037 )        
Financing receivables for non-operating purposes (129 )   (555 )   (426 )  
Net borrowings 14,963     13,685     (1,278 )  
Shareholders' equity including non-controlling interest 61,049     62,209     1,160    
Leverage 0.25     0.22     (0.03 )  

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Group results for the year / Financial review Eni in 2014

| Summarized Group cash flow statement and Change in net borrowings

Eni’s summarized Group cash flow statement derives from the statutory statement of cash flows. It enables investors to understand the link existing between changes in cash and cash equivalents (deriving from the statutory cash flows statement) and in net borrowings (deriving from the summarized cash flow statement) that occurred from the beginning of the period to the end of period. The measure enabling such a link is represented by the free cash flow which is the cash in excess of capital expenditure needs. Starting from free cash flow it is possible to determine either: (i) changes in cash and cash equivalents for   the period by adding/deducting cash flows relating to financing debts/receivables (issuance/repayment of debt and receivables related to financing activities), shareholders’ equity (dividends paid, net repurchase of own shares, capital issuance) and the effect of changes in consolidation and of exchange rate differences; and (ii) change in net borrowings for the period by adding/deducting cash flows relating to shareholders’ equity and the effect of changes in consolidation and of exchange rate differences. The free cash flow is a non-GAAP measure of financial performance.

 

2012 (euro million) 2013 2014 Change
4,947     Net profit - continuing operations   4,959   850     (4,109 )  
      Adjustments to reconcile net profit to net cash provided by operating activities:                  
11,501     - depreciation, depletion and amortization and other non-monetary items   9,723   12,131     2,408    
(875 )   - net gains on disposal of assets   (3,770 ) (95 )   3,675    
11,962     - dividends, interests, taxes and other changes   9,174   6,655     (2,519 )  
(3,281 )   Changes in working capital related to operations   456   2,668     2,212    
(11,702 )   Dividends received, taxes paid, interest (paid) received during the period   (9,516 ) (7,099 )   2,417    
12,552     Net cash provided by operating activities - continuing operations   11,026   15,110     4,084    
15     Net cash provided by operating activities - discontinued operations                  
12,567     Net cash provided by operating activities   11,026   15,110     4,084    
(12,805 )   Capital expenditure - continuing operations   (12,800 ) (12,240 )   560    
(756 )   Capital expenditure - discontinued operations                  
(13,561 )   Capital expenditure   (12,800 ) (12,240 )   560    
(569 )   Investments and purchase of consolidated subsidiaries and businesses   (317 ) (408 )   (91 )  
6,025     Disposals   6,360   3,684     (2,676 )  
(193 )   Other cash flow related to capital expenditure, investments and disposals   (243 ) 435     678    
4,269     Free cash flow   4,026   6,581     2,555    
(79 )   Borrowings (repayment) of debt related to financing activities   (3,981 ) (414 )   3,567    
5,814     Changes in short and long-term financial debt   1,715   (628 )   (2,343 )  
(3,743 )   Dividends paid and changes in non-controlling interests and reserves   (4,225 ) (4,434 )   (209 )  
(16 )   Effect of changes in consolidation and exchange differences   (40 ) 78     118    
6,245     NET CASH FLOW   (2,505 ) 1,183     3,688    

Change in net borrowings

2012 (euro million) 2013 2014 Change
4,269     Free cash flow   4,026   6,581     2,555    
(2 )   Net borrowings of acquired companies   (21 ) (19 )   2    
12,446     Net borrowings of divested companies   (23 )       23    
(345 )   Exchange differences on net borrowings and other changes   349   (850 )   (1,199 )  
(3,743 )   Dividends paid and changes in non-controlling interest and reserves   (4,225 ) (4,434 )   (209 )  
12,625     CHANGE IN NET BORROWINGS   106   1,278     1,172    

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Group results for the year / Financial review Eni in 2014

Consolidated profit and loss account
2012 (euro million) 2013 2014
      REVENUES              
127,109     Net sales from operations   114,697     109,847    
1,548     Other income and revenues   1,387     1,101    
128,657         116,084     110,948    
      OPERATING EXPENSES              
95,034     Purchases, service and other   90,003     86,340    
4,640     Payroll and related costs   5,301     5,337    
(158 )   OTHER OPERATING (EXPENSE) INCOME   (71 )   145    
13,617     DEPRECIATION, DEPLETION, AMORTIZATION AND IMPAIRMENTS   11,821     11,499    
15,208     OPERATING PROFIT   8,888     7,917    
      FINANCE INCOME (EXPENSE)              
7,208     Finance income   5,732     6,459    
(8,327 )   Finance expense   (6,653 )   (7,710 )  
      Finance income (expense) from financial instruments held for trading, net   4     24    
(252 )   Derivative financial instruments   (92 )   162    
(1,371 )       (1,009 )   (1,065 )  
      INCOME (EXPENSE) FROM INVESTMENTS              
186     Share of profit (loss) of equity-accounted investments   222     121    
2,603     Other gain (loss) from investments   5,863     369    
      - of which gain on the divestment of the 28.57% stake in Eni East Africa   3,359          
2,789         6,085     490    
16,626     PROFIT BEFORE INCOME TAXES   13,964     7,342    
(11,679 )   Income taxes   (9,005 )   (6,492 )  
4,947     Net profit - continuing operations   4,959     850    
3,732     Net profit (loss) - discontinued operations              
8,679     Net profit   4,959     850    
                     
      Attributable to:              
      Eni’s shareholders              
4,200     - continuing operations   5,160     1,291    
3,590     - discontinued operations              
7,790         5,160     1,291    
      Non-controlling interest              
747     - continuing operations   (201 )   (441 )  
142     - discontinued operations              
889         (201 )   (441 )  

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Contents

Group results for the year / Financial review Eni in 2014

Consolidated balance sheet
(euro million) December 31, 2013 December 31, 2014
ASSETS              
Current assets              
Cash and cash equivalents   5,431     6,614    
Other financial activities held for trading   5,004     5,024    
Other financial assets held for trading or available for sale   235     257    
Trade and other receivables   28,890     28,601    
Inventories   7,939     7,555    
Current tax assets   802     762    
Other current tax assets   835     1,209    
Other current assets   1,325     4,385    
    50,461     54,407    
Non-current assets              
Property, plant and equipment   63,763     71,962    
Inventory - Compulsory stock   2,573     1,581    
Intangible assets   3,876     3,645    
Equity-accounted investments   3,153     3,115    
Other investments   3,027     2,015    
Other financial assets   858     1,022    
Deferred tax assets   4,658     5,231    
Other non-current receivables   3,676     2,773    
    85,584     91,344    
Assets held for sale   2,296     456    
TOTAL ASSETS   138,341     146,207    
LIABILITIES AND SHAREHOLDERS’ EQUITY              
Current liabilities              
Short-term debt   2,553     2,716    
Current portion of long-term debt   2,132     3,859    
Trade and other payables   23,701     23,703    
Income taxes payables   755     534    
Other taxes payables   2,291     1,873    
Other current liabilities   1,437     4,489    
    32,869     37,174    
Non-current liabilities              
Long-term debt   20,875     19,316    
Provisions for contingencies   13,120     15,898    
Provisions for employee benefits   1,279     1,313    
Deferred tax liabilities   6,750     7,847    
Other non-current liabilities   2,259     2,285    
    44,283     46,659    
Liabilities directly associated with assets held for sale   140     165    
TOTAL LIABILITIES   77,292     83,998    
SHAREHOLDERS’ EQUITY              
Non-controlling interest   2,839     2,455    
Eni shareholders’ equity              
Share capital   4,005     4,005    
Reserves related to the fair value of cash flow hedging derivatives net of tax effect   (154 )   (284 )  
Other reserves   51,393     57,343    
Treasury shares   (201 )   (581 )  
Interim dividend   (1,993 )   (2,020 )  
Net profit   5,160     1,291    
Total Eni shareholders’ equity   58,210     59,754    
TOTAL SHAREHOLDERS’ EQUITY   61,049     62,209    
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY   138,341     146,207    

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Group results for the year / Financial review Eni in 2014

Consolidated statement of cash flow
2012 (euro million) 2013 2014
4,947     Net profit of the year - continuing operations   4,959     850    
      Adjustments to reconcile net profit to net cash provided by operating activities:              
9,645     Depreciation and amortization   9,421     9,970    
3,972     Impairments of tangible and intangible assets, net   2,400     1,529    
(186 )   Share of (profit) loss of equity-accounted investments   (222 )   (121 )  
(875 )   Gain on disposal of assets, net   (3,770 )   (95 )  
(431 )   Dividend income   (400 )   (385 )  
(94 )   Interest income   (142 )   (171 )  
808     Interest expense   711     719    
11,679     Income taxes   9,005     6,492    
(1,947 )   Other changes   (1,882 )   744    
      Changes in working capital:              
(1,402 )   - inventories   350     1,524    
(3,161 )   - trade receivables   (1,379 )   2,344    
2,014     - trade payables   703     (1,253 )  
329     - provisions for contingencies   59     (187 )  
(1,061 )   - other assets and liabilities   723     240    
(3,281 )   Cash flow from changes in working capital   456     2,668    
17     Net change in the provisions for employee benefits   6     9    
930     Dividends received   630     612    
79     Interest received   97     112    
(829 )   Interest paid   (942 )   (882 )  
(11,882 )   Income taxes paid, net of tax receivables received   (9,301 )   (6,941 )  
12,552     Net cash provided by operating activities - continuing operations   11,026     15,110    
15     Net cash provided by operating activities - discontinued operations              
12,567     Net cash provided by operating activities   11,026     15,110    
      Investing activities:              
(11,267 )   - tangible assets   (10,913 )   (10,685 )  
(2,294 )   - intangible assets   (1,887 )   (1,555 )  
(178 )   - consolidated subsidiaries and businesses   (25 )   (36 )  
(391 )   - investments   (292 )   (372 )  
(17 )   - securities   (5,048 )   (77 )  
(1,542 )   - financing receivables   (978 )   (1,289 )  
54     - change in payables and receivables in relation to investing activities and capitalized depreciation   50     669    
(15,635 )   Cash flow from investing activities   (19,093 )   (13,345 )  
      Disposals:              
1,240     - tangible assets   514     97    
61     - intangible assets   16     8    
3,521     - consolidated subsidiaries and businesses   3,401          
1,203     - investments   2,429     3,579    
54     - securities   36     57    
1,431     - financing receivables   1,561     506    
(252 )   - change in payables and receivables in relation to disposals   155     155    
7,258     Cash flow from disposals   8,112     4,402    
(8,377 )   Net cash used in investing activities   (10,981 )   (8,943 )  
10,506     Proceeds from long-term debt   5,418     1,916    
(3,961 )   Repayments of long-term debt   (4,720 )   (2,751 )  
(731 )   Increase (decrease) in short-term debt   1,017     207    
5,814         1,715     (628 )  
      Net capital contributions by non-controlling interest   1     1    
      Sale of treasury shares              
29     Net acquisition of treasury shares different from Eni SpA   1          
604     Acquisition of additional interests in consolidated subsidiaries   (28 )        
(3,840 )   Dividends paid to Eni’s shareholders   (3,949 )   (4,006 )  
(536 )   Dividends paid to non-controlling interest   (250 )   (49 )  
      Acquisition of treasury shares         (380 )  
2,071     Net cash used in financing activities   (2,510 )   (5,062 )  
(93 )   - of which with related parties   119     (99 )  
(4 )   Effect of change in consolidation (inclusion/exclusion of significant/insignificant subsidiaries)   2     2    
(12 )   Effect of exchange rate changes on cash and cash equivalents and other changes   (42 )   76    
6,245     Net cash flow of the year   (2,505 )   1,183    
1,691     Cash and cash equivalents - beginning of the year   7,936     5,431    
7,936     Cash and cash equivalents - end of the year   5,431     6,614    

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Directors and officers Eni in 2014

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Directors and officers Eni in 2014

Remuneration*
The Eni Remuneration Policy is defined consistently with the recommendations of the Borsa Italiana Code as transposed in the Eni Code. It is approved by the Board of Directors following a proposal by the Compensation Committee, entirely made up of non-executive, independent Directors, and it is defined in accordance with the governance model adopted by the Company and with the recommendations of the Corporate Governance Code.		   This Policy aims to align the interests of management with the prime objective of creating sustainable value for shareholders over the medium-long term, in accordance with the guidelines defined in the Strategic Plan of the Company. The table describes the main elements of the approved 2015 Guidelines for the remuneration of the Chief Executive Officer, of the Chief Operating Officers of Eni’s Divisions and other Managers with strategic responsibilities (MSR).
     
Remuneration Policy 2015
Component Purpose and characteristics Conditions for the implementation Values
Fixed remuneration - Values the expertise, experience and contribution required by the assigned role - Setting of the remuneration levels through benchmarks consistent with the characteristics of Eni and the assigned roles - CEO/GM: euro 1,350,000 per year
- MSR: remuneration set based on the assigned role with possible adjustments in relation to annual competitive positioning (median market values) settings
AVI - Annual Variable Incentive - Promotes the achievement of the annual budget targets, also defined in terms of sustainability in the medium to long term

- Beneficiaries: all managerial resources

 2015 CEO/GM targets:
1. Economic and financial results (25%)
- EBT
- Free cash flow
2. Operating results and sustainability of economic results (25%)
- Hydrocarbon production
- Reserve replacement rate
3. Environmental sustainability and human capital (25%)
- CO2 emissions
- accident frequency rate
4. Efficiency and financial strength (25%)
- ROACE
- Debt/EBITDA
- MSR targets: business and individual targets base on those of the CEO/GM and the assigned responsibilities
- Incentives paid on the basis of the results achieved in the previous year and evaluated according to a performance scale 70÷130 points (1), with a minimum threshold for the incentive equal to an overall performance of 85 points
- Clawback in cases of manifestly wrong or fraudulently altered data and violation of laws and regulations, of the Code of Ethics or of Company rules		 - CEO/GM: level of target incentive equal to 100% of the fixed remuneration (min 85% and max 130%)

- MSR: levels of incentive targets differentiated according to the assigned role, up to a maximum of 60% of the fixed remuneration
DMI - Deferred Monetary Incentive - Promotes the achievement of annual targets and profitability growth of the business in the long term

- Beneficiaries: managerial resources who have achieved their annual targets

 - Target gate: achieving the performance level required for the payment of the annual bonus
- EBT performance measured relative to the value of the Planned EBT
- Incentives assigned, in the event of achievement of individual targets, based on the EBT results achieved in the previous year, rated on a performance scale of 70÷130 (1)
- Incentives paid as a variable percentage between zero and 170% of the assigned amounts, according to the average of the EBT annual results achieved during the vesting period, rated on an annual performance scale of 70÷170 (1)
- Three-year vesting
- Clawback in cases of manifestly wrong or fraudulently altered data and violation of laws and regulations, of the Code of Ethics or of Company rules		 - CEO/GM: incentive to be assigned for targets equal to 49.2% of the fixed remuneration (min 34.4% and max 64%)

- MSR: incentives awarded based on targets differentiated according to the assigned role, up to a maximum of 40% of the fixed remuneration
LTMI - Long Term Monetary Incentive - Promotes the alignment with shareholder interests and the sustainability of value creation in the long term

- Beneficiaries: Managerial Resources Critical for the Business (4)

 - Performance measured in terms of variation of the TSR parameters (2) (60%) and Net Present Value of proved reserves(40%), compared to the variation achieved by the companies of a peer group of reference (Exxon, Chevron, Shell, BP, Total, Repsol)
- Incentives paid as a percentage varying between zero and 130% of the amounts assigned, according to the average of the annual positioning achieved during the vesting period (3)
- Three-year vesting
- Clawback in cases of manifestly wrong or fraudulently altered data and violation of laws and regulations, of the Code of Ethics or of Company rules		 - CEO/GM: incentive to be assigned for targets equal to 100% of the fixed remuneration

- MSR: incentives awarded based on targets differentiated according to the assigned role, up to a maximum of 75% of the fixed remuneration
Benefits - Supplementing the salary package following a total reward logic by means of predominantly social security and welfare benefits

- Beneficiaries: all managerial resources

 - Conditions defined by the national collective labor agreements and the complementary company agreements applicable to senior managers - Supplementary pension
- Supplementary health care
- Insurance coverage
- Car for business and personal use
Severance Payments - Severance payments to protect the Company also from potential competitive risks - CEO/GM: additional severance indemnity: non-renewal of the mandate or early termination of the same, except for termination with just cause and resignations not caused by a reduction of powers; non-competition agreement: activated at the discretion of the BoD at the time of termination of the employment relationship (5) - CEO/GM: supplementary severance indemnities: equal to two years’ annual fixed remuneration (euro 2,700,000); consideration of the non-competition agreement (in case of exercise of the option): ranging from a minimum of euro 1,500,000 to a maximum of euro 2,250,000, depending on the average annual performance achieved in the previous three years

(1) Performance rated below the minimum threshold (70 points) is considered equal to zero.
(2) The Total Shareholder Return measures the overall return of a stock investment, taking into consideration both the price change and the dividends paid and reinvested in the same stock, in a specific period. The Net Present Value of proved reserves represents the present value of the future cash flows of proved reserves, net of future production and development costs and related taxes. It is calculated on the basis of standard references defined by the Securities Exchange Commission on the basis of the data published by oil companies in the official documentation (Form 10-K and Form 20-F).
(3) The minimum incentive threshold involves reaching 5th place for both indicators in at least one year of the three-year vesting period.
(4) The executives of Eni and its subsidiaries identified during the annual implementation of the Plan among those who occupy the positions that are most directly responsible for the business performance or that are of strategic interest and who, at the date of assignment, are employees and/or in service at Eni SpA and its subsidiaries, including Eni Managers with strategic responsibilities.
(5) A consideration of euro 500,000 is provided for the BoD’s stock option.
(*) For detailed information on Eni’s remuneration policy and compensation see the "Remuneration Report 2015" available on Eni’s website under the sections "Governance" and "Investor relations".

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Directors and officers Eni in 2014

The following table lists the individual remunerations to the Directors, Statutory Auditors, General Managers and, in aggregate, to the other Managers with strategic responsibilities. The remunerations received from subsidiaries and/or affiliates,   except those waived or paid to the Company, are shown separately. All parties who filled these roles during the period are included, even if they only held office for a fraction of the year.

 

Remuneration paid to Directors, Statutory Auditors, Chief Operating Officers, and other Managers with strategic responsibilities
(euro thousand)

Name and Surname

 Position Period for which the position was held Expiration of the office (*) Fixed remuneration Remuneration for participation in the Committees Variable non-equity remuneration Benefits in kind Other remuneration Total Fair value of equity compensation Severance indemnity for end of office or termination of employment
Bonuses and other incentives Profit sharing
Board of Directors                                                  
Giuseppe Recchi   Chairman   01.01 - 05.08   05.2014   272       342       4       618          
Emma Marcegaglia   Chairman   05.08 - 12.31   05.2017   154                       154          
Paolo Scaroni   CEO and General Manager   01.01 - 05.08   05.2014   505       2,696       8       3,209       8,361  
Claudio Descalzi   CEO and General Manager   05.09 - 12.31   05.2017   874               9   500   1,383          
    COO Division E&P (**)   01.01 - 05.08       273       1,218       4   479   1,974          
            Total   1,147       1,218       13   979   3,357          
Former Directors       01.01 - 05.08   05.2014   246   98                   344          
Directors in charge       05.08 - 12.31   05.2017   404   265                   669          
Board of Statutory Auditors               384                       384          
Chief Operating Officers                                                  
Angelo Fanelli   Division R&M   01.01 - 06.30       300       396       7       703          
Other executives with strategic responsibilities (***)   Remuneration in the company that prepares the Financial Statements   5,945       5,777       161   120   12,003       4,990  
    Remuneration from subsidiaries and associates   737       115       261   47   1,160          
    Total   6,682       5,892       422   167   13,163       4,990  
        10,094   363   10,544       454   1,146   22,601       13,351  
(*) The term of office expires with the Shareholders’ Meeting approving the Financial Statements for the year ending December 31, 2016.
(**) The position of COO E&P Division has been covered ad interim from May 9 to June 30, 2014 without any remuneration.
(***) Managers who were permanent members of the Company's Management Committee, during the course of the year together with the Chief Executive Officer and Division Chief Operating Officers, or who reported directly to the Chief Executive Officer (twenty managers).

In particular:
- the column "Fixed Remuneration" reports the fixed remuneration and fixed salary from employment due for the year, gross of the social security contribution and tax expenses to be paid by the employee; it excludes attendance fees, as these are not provided for. Any indemnities or payments with reference to the employment relationship are indicated separately;
- the "Committee membership remuneration" column reports the compensation due to the Directors for participation in the Committees established by the Board;
- the column "Variable non-equity remuneration" under the item "Bonuses and other incentives" shows the incentives paid during the year due to rights vested following the assessment and approval of the related performance results by the relevant corporate bodies, in accordance with that specified, in greater detail, in the Table "Monetary incentive plans for Directors, General Managers, and other Managers with strategic responsibilities"; the column "Profit sharing" does not show any figures since there are no provisions for profit sharing;
- the "Non-monetary benefits" column reports the value of the fringe benefits awarded;
- the "Other remuneration" column reports any other remuneration deriving from other services provided;
- the "Fair value of equity remunerations" column reports the relevant fair value for the year related to the existing stock option plans, estimated in accordance with international accounting standards, which assign the related cost in the vesting period; and
- the "Severance indemnities for end of office or termination of employment" column reports the indemnities accrued, even if not yet paid, for the terminations which occurred during the course of the financial year in question, or in relation to the end of the mandate and/or employment.

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Directors and officers Eni in 2014

Monetary incentive plans for Directors, General Managers, and other Managers with strategic responsibilities
(euro thousand)

Name and Surname

 Position

Bonus for the year

Bonus for previous years

Other bonuses

payable/paid

deferred

deferral period

no longer payable

payable/paid (1)

still deferred
Giuseppe Recchi   Chairman until 05.08.2014   342                          
Paolo Scaroni   Chief Executive Officer and General Manager until 05.08.2014   1,831   551   three-year   2,447   865   6,189      
Claudio Descalzi   Chief Executive Officer and General Manager since 05.09.2014       1,350   three-year                  
    COO E&P Division until 05.08.2014   879   378       363   339   1,868      
Angelo Fanelli   COO R&M Division until 06.30.2014   396                   985      
Other Managers with strategic responsibilities (2)       3,168   4,587       3,074   2,464   8,000   260  
        6,616   6,866       5,884   3,668   17,042   260  
(1) Payment relating to the Deferred Monetary Incentive awarded in 2011.
(2) Managers who were permanent members of the Company's Management Committee, during the course of the year together with the Chief Executive Officer and Division Chief Operating Officers, or who reported directly to the Chief Executive Officer (twenty managers).

 

Overall remuneration of key management personnel
Remuneration of persons responsible of key positions in planning, direction and control functions of Eni Group companies, including executive and non-executive Directors, Chief Operating Officers and other Managers with strategic responsibilities in charge at December 31, 2014, amounted to euro 43 million, as described in the following table.

Pay-mix
The 2015 Remuneration Policy Guidelines lead to a remuneration mix in line with the managerial role held, with greater weight placed upon the variable component, in particular in the long term, for roles characterized by a greater impact on Company results, as highlighted in the Pay-mix diagram below, calculated by considering the value of short and long-term incentives offered for results within the target values.

  

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Investor information Eni in 2014

Investor information

Eni share performance in 2014
In accordance with Article 5 of the By-laws, the Company’s share capital amounts to euro 4,005,358,876.00, fully-paid, and is represented by 3,634,185,330 ordinary registered shares without indication of par value.
In the last session of 2014, the Eni share price, quoted on the Italian Stock Exchange, was euro 14.51, down by 17 percentage points from the price quoted at the end of 2013 (euro 17.49). The Italian Stock Exchange is the primary market where the Eni share is traded. During the year the FTSE/MIB index, the basket including the 40 most important shares listed on the Italian Stock Exchange, was barely unchanged (up by 0.2 percentage points). At the end of 		  2014, the Eni ADR listed on the NYSE was $34.91, down 28.1% compared to the price registered in the last session of 2013 ($48.49). One ADR is equal to two Eni ordinary shares. In the same period the S&P 500 index increased by 11.4 percentage points. Eni market capitalization at the end of 2014 was euro 52.4 billion (euro 63.4 billion at the end of 2013), confirming Eni as the first company for market capitalization listed on the Italian Stock Exchange.
Shares traded during the year totaled almost 4.4 billion, with a daily average of shares traded of 17.2 million (15.4 million in 2013). The total trade value of Eni shares amounted to approximately euro 77 billion (euro 68 billion in 2013), equal to a daily average of euro 304 million.

 

Share information
  2012 2013 2014
Market quotations for common stock on the Mercato Telematico Azionario (MTA)                  
High   (euro)   18.70   19.48   20.41  
Low       15.25   15.29   23.29  
Average daily close       17.18   17.57   17.83  
Year-end close       18.34   17.49   14.51  
Market quotations for ADR on the New York Stock Exchange                  
High   (US$)   49.44   52.12   55.30  
Low       36.85   40.39   32.81  
Average daily close       44.24   46.68   47.37  
Year-end close       49.14   48.49   34.91  
Average daily traded volumes   (million of shares)   15.63   15.44   17.21  
Value of traded volumes   (euro million)   267.0   271.4   304.0  

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Investor information Eni in 2014

Summary financial data
  2012 2013 2014
Net profit                    
- per share (a)   (euro)   1.16   1.42   0.36    
- per ADR (a) (b)   (US$)   2.98   3.77   0.96    
Adjusted net profit                    
- per share (a)   (euro)   1.97   1.22   1.03    
- per ADR (a) (b)   (US$)   5.06   3.24   2.74    
Leverage       0.47   0.25   0.22    
Coverage       11.3   8.8   7.4    
Current ratio       1.4   1.5   1.5    
Debt coverage       83.4   73.7   110.4    
Dividend pertaining to the year   (euro per share)   1.08   1.10   1.12    
Pay-out   (%)   50   77   311    
Dividend yield (c)   (%)   5.9   6.5   7.6    
TSR       22.0   1.3   (11.9 )  
(a) Fully diluted. Ratio of net profit and average number of shares outstanding in the year. Dollar amounts are converted on the basis of the average EUR/USD exchange rate quoted by ECB for the year presented.
(b) One American Depositary Receipt (ADR) is equal two Eni ordinary shares.
(c) Ratio of dividend for the period and the average price of Eni shares as recorded in December.

| Dividends
Management intends to propose to the Annual Shareholders’ Meeting scheduled on May 13, 2015, the distribution of a dividend of euro 1.12 per share for fiscal year 2014, of which euro 0.56 was already paid as interim dividend in September 2014.
Total cash outlay for the 2014 dividend is expected at approximately euro 4.01 billion (including euro 1.99 billion already paid in September 2014) if the Annual Shareholders’ Meeting approves the annual dividend. In future years, management 		  expects to continue paying interim dividends for each fiscal year, with the balance to the full-year dividend to be paid in each following year. Eni intends to continue paying interim dividends in the future. Holders of ADRs receive their dividends in US dollars. The rate of exchange used to determine the amount in dollars is equal to the official rate recorded on the date of dividend payment in Italy (May 22, 2014). On ADR payment date, Bank of New York Mellon pays the dividend less the amount of any withholding tax under Italian law (currently 27%) to all Depository   Trust Company Participants, representing payment of Eni SpA’s gross dividend. By submitting to Bank of New York Mellon certain required documents with respect to each dividend payment, US holders of ADRs will enable the Italian Depositary bank and Bank of New York Mellon as ADR Depositary to pay the dividend at the reduced withholding tax rate of 15%. US shareholders can obtain relevant documents, as well as a complete instruction packet to benefit from this tax relief by contacting Bank of New York Mellon at 201-680-6825.

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Investor information Eni in 2014

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Eni Shareholders approve 2014 Financial Statements at Annual Meeting

 

Rome, May 13, 2015 - The Ordinary Meeting of Eni’s Shareholders, held today, resolved the following:
•   to approve the financial statements at December 31, 2014 of Eni SpA which report a net profit amounting to euro 4,454,704,262.21;
•   to allocate the net profit for the period of euro 4,454,704,262.21, of which euro 2,435,016,587.73 remains following the distribution of the 2014 interim dividend of 0.56 euro per share, resolved by the Board of Directors on September 17, 2014, as follows:
    -   the amount of euro 32,908,326.92 to the reserve required by Article 6, paragraph 1, letter a) of Legislative Decree No. 38 of February 28, 2005;
    -   to shareholders a dividend of euro 0.56 per share owned and outstanding at the ex-dividend date, excluding treasury shares on that date, thus completing payment of the dividend for the financial year 2014. The total dividend per share for the financial year 2014 therefore amounts to euro 1.12 per share;
    -   the payment of the balance of the 2014 dividend of euro 0.56, on May 20, 2015, with an ex-dividend date of May 18, 2015 and a record date of May 19, 2015.

In addition, Eni’s Shareholders Meeting resolved in favor of the first section of the Remuneration report, pursuant to Article 123-ter of the Legislative Decree 58/1998.

 

Company Contacts:

Press Office: Tel. +39.0252031875 - +39.0659822030
Freephone for shareholders (from Italy): 800940924
Freephone for shareholders (from abroad): +800 11 22 34 56
Switchboard: +39-0659821

ufficio.stampa@eni.com
segreteriasocietaria.azionisti@eni.com
investor.relations@eni.com

Web site: www.eni.com

Table of Contents

Table of Contents

 

 

 

 

 

Eni: investigation into OPL 245 case, audit conducted by independent US law firm did not find evidence of illegal conduct

 

San Donato Milanese (Milan), May 31, 2015 - Regarding the pending preliminary investigation by the Italian authorities into the OPL 245 case, Eni informs that an audit conducted by an independent US law firm on behalf of Eni’s board of statutory auditors and watch structure, did not find evidence of illegal conduct in relation to Eni and Shell’s 2011 transaction with the Nigerian government for the acquisition of the OPL 245 license in Nigeria. The audits examined the documents and information available to the company or otherwise received or acquired following the start of the investigation. The final report of this audit was made available to the judiciary with whom Eni is co-operating in full. This press release is issued at the request of Consob, pursuant to Article 114 paragraph 5 of the TUF.

 

Company Contacts:

Press Office: Tel. +39.0252031875 - +39.0659822030
Freephone for shareholders (from Italy): 800940924
Freephone for shareholders (from abroad): +800 11 22 34 56
Switchboard: +39-0659821

ufficio.stampa@eni.com
segreteriasocietaria.azionisti@eni.com
investor.relations@eni.com

Web site: www.eni.com