Eni S.p.a. · MIL:ENI

Eni — Investor Day (October 2011)

58 slides from Eni's investor day presentation, Oct 6, 2011

  1. Slide 1: Congo field trip

    Congo field trip Brazzaville – October 6th, 2011 eni.com

  2. Slide 2: Agenda

    agenda eni update Paolo Scaroni E&P update Claudio Descalzi Focus on sub-Saharan Roberto Casula operations Financial update Alessandro Bernini Closing remarks Paolo Scaroni Q&A 2

  3. Slide 3: Libya: recovery plan and growth potential

    Libya: recovery plan and growth potential Recovery plan  Consolidated relationship with  Security assessment of context and facilities NTC  Re-opening of eni’s Tripoli office  Existing contracts confirmed  Initial interventions (eg logistics)  No N ddamage to enii facilities f ili i  Oil star

  4. Slide 4: G&P: business and market update

    G&P: business and market update Market update eni actions  Recovery in European spot  Improved commercial offer prices (+51% vs first 9 months  +4pp 4 market k t share h in i Italy It l * 2010)  +14% European volumes*  Increasing gas consumption and LNG prices in Far East  Ongoing renegotiatio

  5. Slide 5: Eni's key assets: developing value creation prospects

    eni’s key assets: developing value creation prospects Snam Saipem Galp  Exploring options to  Delivering outstanding  Continuing discussions unlock value results with potential buyers  Any disposal requires  Key synergies with  Portuguese context government decree upstream operations remains d

  6. Slide 6: Eni's long history of growth in Africa

    eni’s long history of growth in Africa... C Countries t i and d year off entry t Af i African production d ti (1970-2010) (1970 2010) kboed Tunisia CAGR 1961 Algeria Al i Libya Egypt 1981 13,854 2,0% 1959 1954 Mali 2006 Togo 2010 Nigeria 1962 7,924 Ghana Congo 1,002 6,5% 2009 1968 Gabon 1981/2008 RD

  7. Slide 7: ...has led to our current leadership

    ...has led to our current leadership Production in Africa Majors j i Africa in f i Algeria Tunisia Libya Egypt kboe/d Chad Cameroon Dem. Rep.Congo Nigeria Eq. Guinea Gabon Angola Congo Countries of 7 6 5 5 4 3 3 production (2010) More than doubled African production in 15 years 7

  8. Slide 8: Further growth potential in Africa

    further growth potential in Africa M j Major growth h drivers d i in i Africa Af i P d Production i growth h iin Africa Af i (kb /d) (kboe/d) Algeria & Tunisia • MLE CAFC start up 1400 • Exploration for Libya conventional and Development of 1.5bn >2% unconventional ti l resources b boe off discovere

  9. Slide 9: The six legs of the Eni model

    the six legs of the eni model 1 Business & technology development 2 Oil & gas integration 3 Access to energy & infrastructure 4 To be local 5 Local development (agriculture, (agriculture health, health education) 6 International partnership 9

  10. Slide 10: Oil & gas integration: a driver of growth in North Africa

    oil & gas integration: a driver of growth in North Africa Egypt 2010 production: 232 kboe/d Gas imports (UFG): 2 bcm eni present since 1954 First IOC in the country Libya 2010 production: 273 kboe/d Gas imports: 9.4 bcm eni present since 1959 First IOC in the country Algeria 2010 production: 77 kboe

  11. Slide 11: Access to energy: first mover in Subsaharan Africa

    access to energy: first mover in Subsaharan Africa  First IOC to invest in power generation in Africa using associated gas  Major electricity generation: 4 plants in Congo and Nigeria g  60% of Congolese electrical production  20% of Nigerian electrical production  Large involvement in electrif

  12. Slide 12: To be local: a double flag approach

    to be local: a “double flag” approach Local presence in Africa Local employees (3) Number No. Onshore Countries (% of prod. (1)) 55% 1,897 1,217 7 37% 6 14% 5 13% 2000 2010 5 14% Local managers (3) Number 4 25% 186% 252 3 n.s.(2) 88 3 12% 2000 2010 (1) Based on 2010 production: net production from A

  13. Slide 13: Congo field trip: E&P update

    Congo field trip: E&P update Claudio Descalzi, COO eni.com

  14. Slide 14: E&P strategic goals and drivers

    E&P strategic goals and drivers  Rapid development of project pipeline  Production optimization and near field exploration to reduce decline Organic growth  Additional development phases of giants & value creation  Increasing exposure to far east and LNG  Synergic S ne gic unconventional ncon e

  15. Slide 15: Sustainable growth

    sustainable growth Organic production growth ~2% >3%  >3% CAGR 2010-14  Low decline rate  Strong project pipeline  ~2% CAGR 2014-21  Identified opportunities  Exploration potential Price scenario: 70$/bbl flat @2014, +2%/year 15

  16. Slide 16: 2011-14: short-term project base for building long term growth

    2011-14: short-term project base for building long term growth Main FID 4Yplan main start-ups NORWAY RUSSIA 2011 Goliat Yaro Yakinskoye Ekofisk South Samburgskoye  ~75% of production UK Urengoskoye already sanctioned US West Franklin Ph.2 Jasmine KAZAKHSTAN Nickaitchuq IRAQ Karachaganak 4th train A

  17. Slide 17: Building long-term growth on recent successful exploration

    building long-term growth on recent successful exploration Culzean (UK)  High class G&C discovery still in appraisal phase Barents Sea (Norway)  Skrugard Sk d discovery di GoM (USA)  Greater Hadrian area Near field exploration Indonesia  High potential in profitable gas market Perla (Venezuela)

  18. Slide 18: Growth projects beyond 2014

    growth projects beyond 2014 Main FID Start-ups post 2014 NORWAY RUSSIA 2012 Skrugard Severo Asgard SS Compr.  Extension Val D’Agri Yevo GLA Tor redevelopment Achimov Eldfisk II 2013 UK KAZAKHSTAN Culzean  Jangkrik Mariner ITALY Karachaganak ph.3 Ext VdA Kashagan ph.2  Jau US Kashagan Sat.  Junin

  19. Slide 19: Drivers for long-term growth: our key hubs

    drivers for long-term growth: our key hubs  Diversified growth Yamal  Present in world’s most Barents Sea Peninsula promising producing areas  Exposure to growing markets (eg Far East) Kazakhstan  Leveraging synergies Venezuela  Reserves 2P  Equity -> 5 Bboe (~38%) Sub-Saharan S b S h Africa I

  20. Slide 20: Yamal Peninsula: new gas giants

    Yamal Peninsula: new gas giants Yamal province Licences: Sambursky Sambursky, Yaro-Yakhinsky, Yaro Yakhinsky Severo-Chalesky, Severo Chalesky Yevo-Yakhinsky Samburgskoye Production (kboe/d, equity) 200  eni share 29.4% 150  Contract type Concession 100  Capex (100%) 3.8 B$  Reserves (100%) 1 Bbo

  21. Slide 21: Barents Sea: unlocking oil potential

    Barents Sea: unlocking oil potential Barents Sea Production (kboe/d, equity) Goliat 250  eni share 65% (operated) 200  Contract type Concession 150  Capex (100%) 5 B$ 100  Reserves (100%) 175 Mboe 50  Peak production (100%) 89 kboe/d 0  Start up 2013 2011 2013 2015 2017 2019 2021 Norway Goliat

  22. Slide 22: Indonesia: growing exposure to favourable gas market

    Indonesia: growing exposure to favourable gas market Jangkrik & Jangkrik NE Production (kboe/d, equity) 120  eni share 55%  Contract type PSA 80  Capex (100%) 2.9 B$ 40  Reserves (100%) >400 Mboe  Peak production (100%) 80 kboe/d 0  Start up 2015 2011 2013 2015 2017 2019 2021 Others C MB Jangk

  23. Slide 23: Venezuela: super giants with long-term plateau

    Venezuela: super giants with long-term plateau Junín-5  eni share 40% (Petro-Junín Op.)  Contract type Concession-like  Capex (100%) 22.7 B$  Reserves (100%) 2.4 Bboe  Peak production (100%) 75 kboe/d (EP), 240 kboe/d (FF) Production (kboe/d, equity)  S Start up 2013 (EP), (EP) 2018 (FF) 200 P

  24. Slide 24: Kazakhstan: near-term growth and relevant long-term potential

    Kazakhstan: near-term growth and relevant long-term potential Karachaganak Kashagan Kashagan EP Production (kboe/d, equity) 250  eni share 16.81% (operated) 200  Contract type PSA 150  Reserves (100%) 3.6 Mboe 100  Production capacity (100%) 370 kboe/d 50 0 2011 2013 2015 2017 2019 2021 Progress

  25. Slide 25: Sub-Saharan: legacy area with further growth prospects

    Sub-Saharan: legacy area with further growth prospects Block 15/06 (East & West Hubs) Production (kboe/d, equity) 600  eni share 35%  Contract type PSA 400  Capex (100%) 8.2 B$  Reserves (100%) 425 Mboe 200  Peak production (100%) 80 kboe/d (WH) 75 kboe/d (EH) 0 27 kboe/d (Mpungi) 2011 2013 201

  26. Slide 26: High potential exploration portfolio

    high potential exploration portfolio Barents Sea (Norway) Large upside GoM (USA) Near field exploration Pacific gas (Indonesia and Australia)  High potential in profitable gas market West Africa  Transform margin play in Ghana and Togo West Africa  Pre-salt play:  Offshore Angola East Africa Gas

  27. Slide 27: A growing unconventional portfolio

    a growing unconventional portfolio Shale & tight gas in North Africa Shale gas in East Europe  Algeria - ongoing joint assessment  Poland – 3 expl. Permits – Drilling Ongoing  Tunisia - ongoing exploration  Ukraine – MoU inclusive of unconventional China shale gas  Ongoing joint assessment with

  28. Slide 28: Confirmed leadership in efficiency

    confirmed leadership in efficiency Unit exploration costs Break even price by region OPEX* $/boe 6 10 6 60 10 9 5 9 50 Avg. 45 $/boe 88 4 40 77 7.0 33 30 66 2 20 5.7 5.4 1.9 2.0 55 1.9 1 10 44 0 0 3 0 07-09 08-10 11-14E North West OECD Other 3 07-09 08-10 11-14E Africa Africa eni Benchmark group gro

  29. Slide 29: Diversified and profitable portfolio

    diversified and profitable portfolio Cash flow NPV 2P by areas CF/boe (%) 120 20% 24% 110 32% 24% 100 90 2010 2014 Africa sub-Saharan North Africa Brent avg 70 70 ($/boe) Europe & America Asia & Pacific Solid cash generation 29

  30. Slide 30: Good progress on strategic goals

    good progress on strategic goals NORWAY NORWAY Ekofisk South Skrugard ALASKA Eldfisk II Russia Nikaitchuq Asgard SS Compression Samburgskoye NORWAY PL 226B PL 608 UK Culzean UKRAINE KAZAKHSTAN Karachaganak 4th train GOM Appaloosa ITALY Capparuccia CHINA GOM Petrochina MoU Hadrian North Sinopec MoU G

  31. Slide 31: Congo field trip: Sub-Saharan Africa

    Congo field trip: Sub-Saharan Sub Saharan Africa Roberto Casula,, EVP Sub-Saharan Africa eni.com

  32. Slide 32: Eni E&P in Sub-Saharan Africa

    eni E&P in Sub-Saharan Africa  Population 850 million  GDP growth rate 2011: 5.5%  Proved reserves YE 2010  oil 68 bln bbls Togo 2010 Nigeria  gas 230 tcf Ghana 1962 2009 Congo 1968  Production 2010 Gabon DRC 1981/2008 2010  oil 5.8 Mbbl/d; Angola  gas ~5 5 bcf/d 1980 Mozambique 2006  Overa

  33. Slide 33: Production growth

    production growth Production growth 2009 - 2021 (kboe/d)  4Y plan CAGR CAGR  Congo +3% 2%  Nigeria +2.2% 6%  Angola +13.4% 11% g term g  Long growth 397 357  OPL 245  Bonga area  Brass LNG  Abo Ph. 3  Litchendjili  Tar sands 2009 2010 2011 2014 2021  Kizomba Sat Ph.2 Brent  Exploration

  34. Slide 34: Growth drivers

    growth drivers • Operated development projects and Deepwater exploration to fuel future growth Gas utilization • LNG  Gas value maximization trough • Power plant domestic consumption and export • Heavy oil upgrading  High quality assets in major Exploration exploration prolific plays  Double flag

  35. Slide 35: Deepwater projects

    deepwater projects KIZOMBA SAT.1 WEST HUB EAST HUB WI WI WI DW production WI GI WI DC GI Cabaça N DC DC DC DC ((kboe/d) / ) WI Cabaça SE DC WI  Not operated  Operated  Operated 200  Plateau 90 kboe/d  Plateau 65 kboe/d  Plateau 60 kboe/d BONGA SW ABO Area OPL 245 150 100  Not operated  Opera

  36. Slide 36: Deepwater projects: Block 15/06

    deepwater projects: Block 15/06 Mpungi-1 Cabaca North-1 (2010) (2009) Nzanza-1 --1 (2009) Nzanza North Xikomba N3 Mondo NW 1000 W5 Cinguvu-1 Cabaça 1 Cabaca SE-1 m (2010) 1 W6 (2010) Mondo W W7 W-HUB W10 W11 Cabaça S W12 BAVUCA MONDO M1-N N’Goma-W Sangos-1 N’ N’Goma-1 ((2008)) -1 1 (2008) M1-S E-HUB

  37. Slide 37: Deepwater projects: OPL 245

    deepwater projects: OPL 245 OPL245  Eni share 50% (op.)  Development of Zabazaba and Etan fields  Contract type PSA (1,700-2,000 m WD)  Capex (100%) under evaluation  Zabazaba*: 13 producers, 5 injectors  Reserves (100%)* 550 Mboe  Etan*: 5 producers, 5 injectors  Peak production (100%) 110

  38. Slide 38: Growth drivers

    growth drivers  Operated development projects and Deepwater exploration to fuel future growth Gas utilization  LNG • Gas value maximization trough  Power plant domestic consumption and export  Heavy oil upgrading  High quality assets in major Exploration exploration prolific plays  Double flag

  39. Slide 39: Integrated gas cycle management

    integrated gas cycle management Gas production in SSA (kboe/d) NIGERIA NIGERIA Okpai Eleme >120 RSG P t l h Petrolchemical i l NLNG Brass CONGO 79 Gas to MAG CONGO Tar sands CEC LPG CED ALNG Gas project ANGOLA IPP LNG operational/in execution 2010 2014 LNG pre FID/proposed Other usage g IPP operatio

  40. Slide 40: Gas utilization: LNG projects

    gas utilization: LNG projects Operational/in execution Pre-FID/proposed Nigerian LNG - eni share: 10.4% Brass LNG - eni share: 17% Op.  Status 6 trains in operation  Status 2 trains – pre FID  LNG capacity 22 MTPA  LNG capacity 10 MTPA  Startup 1999  Startup 2016  Gas G supply* l * 3 482 mscf

  41. Slide 41: Gas utilization: power plant projects

    gas utilization: power plant projects Nigeria – Okpai IPP - eni operator 20% Nigeria – RSG IPP - Supply 100% Naoc JV  Status operational  Status operational  Plant capacity 480 MW  Plant capacity 150 MW  Startup May 2005  Startup Dec 2006  Gas G supply l 70 mscf/d f/d  Gas G supply l 30 mscf

  42. Slide 42: Growth drivers

    growth drivers  Operated development projects and Deepwater exploration to fuel future growth Gas utilization • LNG  Gas value maximization trough • Power plant domestic consumption and export • Heavy oil upgrading • High quality assets in major Exploration exploration prolific plays  Double flag

  43. Slide 43: Exploration overview

    exploration overview Sub-saharan plays  Pre-salt  Deepwater Santos Basin Brazil-like Togo themes Nigeria  Coastal basin and shallow water Ghana  Transform margin  Cretaceous p plays y deepwater p G b Gabon Congo DRC  Tertiary play  East Africa margin and West Africa Angola Mozambique Explorat

  44. Slide 44: Pre-salt and transform margin

    pre-salt and transform margin Angola Bl. 35 (eni W.I.: 30%) Ghana/Togo 1000m 1500m ra 2000m Acc 2500m SALTPOND OFFSHORE KETA TOGO 300 0m i rad FIELD ACCRA GHANA SOPCL 20 m Tap o m 50 0m 350 Tak SALTPOND Keta Basin Oranto 100m EBONY 200m JUBILEE Saltpond Basin Interoil 500m FIELD OCTP ECTP MoU Sahara

  45. Slide 45: Emerging East African Tertiary plays - Mozambique

    emerging East African Tertiary plays - Mozambique Block Area 4 (eni W.I.: 70%)  Rovuma Basin  Deep offshore: 1 500-3 1,500 3,000 000 m  Area: 12,956 km2  Resource potential: 10-20 Tcf GOIP  7g gas discoveries out of 9 wells drilled in the basin  The largest discoveries are very close to Area 4

  46. Slide 46: Growth drivers

    growth drivers  Operated development projects and Deepwater exploration to fuel future growth Gas utilization • LNG  Gas value maximization trough • Power plant domestic consumption and export • Heavy oil upgrading  High quality assets in major Exploration exploration prolific plays • Double flag

  47. Slide 47: The six legs of the Eni model

    the six legs of the eni model 1 Business & technology development 2 Oil & gas integration 3 Access to energy & infrastructure 4 To be local 5 Local development (agriculture, (agriculture health, health education) 6 International partnership 47

  48. Slide 48: M'Boundi, the energy hub of Congo Brazzaville

    M’Boundi, the energy hub of Congo Brazzaville RC LPG plant Brazzaville M’Boundi Tar sands RIT L di Loudima Mi d li Mindouli T i l Tsielampo M’Boundi Zingali Loufika MAG Litchendjili Kouakouala y Refinery RIT Coraf Pointe Mongo g Kamba Noire 1/2 N’Goyo Oil centre Cote Water injection Mateve Gas compr

  49. Slide 49: Social investment model projects

    social investment model projects Angola Congo 2008 MOU SONANGOL AND ENI INTEGRATED PROJECT HINDA  Cooperation areas:  Objective:  food & biodiesel  promote sustainable local development  infrastructures  mitigating the social risks  education  providing indirect support to the  social proje

  50. Slide 50: Strong and increasing cash flow

    strong and increasing cash flow SSA cash flow $/boe • Strong cash flow, significantly 35 100 $/boe enhanced by new start-ups 30 28.9  Focus on conventional and large size 26.5 70 $/boe projects to exploit economies of scale 25 p and operational synergies y g 20  Monetization of low cost stranded g

  51. Slide 51: Congo field trip: financial update

    Congo field trip: financial update Alessandro Bernini,, CFO eni.com

  52. Slide 52: Growing cash flow to finance capex

    growing cash flow to finance capex… 2011-14 cash flow* 2011 14 capex 2011-14 Bln € *@ 70$/bbl 52

  53. Slide 53: Focused on high return E&P projects

    … focused on high return e&p projects Eni capex Bln € 2011-2014 E&P development Other O h capex plan 33.7 19.6 E&P development capex 2% Onshore PSA Shallow offshore Service contract 23% 38% Deepwater Concession 35% Unconventional 47% 18% 37% 53

  54. Slide 54: ...and to further strengthen our balance sheet

    ...and to further strengthen our balance sheet Net debt at June 30, 2011 Snam Rete Gas  Lowest risk profile of eni’s 2011 portfolio  Self financing  €1.7bn of € 10.7 billion divestments closed  Net debt to equity Saipem below YE2010  Major vessels almost completed € 3.4 billion  Strong cash fl

  55. Slide 55: Low risk and high quality financial debt

    low risk and high quality financial debt Debt by instrument Debt by maturity Commercial >5 yrs paper 10% 3-5 yrs Bonds 51% 2-3 yrs Banks 39%  Extension of debt maturity: >80% long term  €1.3 bln retail bond issued successfully this week  Over 50% of long g term debt at fixed interest rates  €300

  56. Slide 56: Congo field trip: closing remarks

    Congo field trip: closing remarks Paolo Scaroni,, CEO eni.com

  57. Slide 57: A strong growth profile

    a strong growth profile Past as and a d future u u e leadership eade s p in Africa ca E&P: sustainable long-term growth Solid balance sheet to fuel growth 57

  58. Slide 58: A strong growth profile

    a strong growth profile Past as and a d future u u e leadership eade s p in Africa ca E&P: sustainable long-term growth Solid balance sheet to fuel growth 58

Eni — Investor Day (October 2011) on 6ix