Slide 1: 2016-2019 Strategy Presentation
2016-2019 Strategy Presentation London, 18 March 2016
Slide 2: Strategy execution is well advanced
Strategy execution is well advanced S TRATEGIC P ILLARS Transformation Restructuring Profitable growth into a fully integrated O&G mid-downstream C OST E FFICIENCY Capex -17% Saipem Take-or-pay Refining and Chemicals Opex -13% deconsolidation Zohr FID renegotiations back to breakeven (vs 2014) New U
Slide 3: Managing the trade-offs of a longer downturn
Managing the trade-offs of a longer downturn Oil price and cost variations Brent price | $/bbl old scenario new scenario 3
Slide 4: A unique portfolio for a balanced strategy
A unique portfolio for a balanced strategy New projects’ cost structure | $/boe New discoveries enhance portfolio optionality -30% Simplified and phased execution of conventional projects Opex Dual exploration model and transformation Development Exploration Efficient operating model and optimized s
Slide 5: Safety and carbon footprint – our top priorities
Safety and carbon footprint – our top priorities Total Recordable Injury Rate GHG emissions | TCO2 eq/toe 2013/2015 -2%/y -52% -3.5%/y -4%/y GHG reduction 2025 vs 2014: -43% Total Recordable Injury Rate = n. of TRI/mln of worked hours Excluding Saipem 5
Slide 6: Eni’s 4YP targets
Eni’s 4YP targets 2015-19 production CAGR >+3% Efficient and Upstream Capex –18% vs previous plan valuable growth Exploration resources 1.6 bln boe @ $2.3/boe G&P in structural breakeven from 2017 Restructuring Refining breakeven at $3/bbl margin Cumulative G&A savings of €2.5 bln throug
Slide 7: Eni’s unique exploration track record
Eni’s unique exploration track record Cumulative discovered resources | bln boe Discoveries vs production 2008-15 | bln boe yearly additions 1.4 Discoveries cumulative 2008-15 Discoveries / production ratio 10.5 peers* average: 0.3x 2.4 0.4 0.3 0.4 0.4 0.2 1.0 *peers = BP, CVX, RDS, REP, TOT, XOM 7
Slide 8: Exploration: Focus on near-term and low-cost options
Exploration Focus on near-term and low-cost options Near field and Short Deep Water focused incremental exploration Time to Market on material opportunities Exploration Targets gas oil 4YP target | 1.6 bln boe at $2.3/boe (UEC) 8
Slide 9: Main start-ups in the 4YP
Main start-ups in the 4YP GOLIAT KASHAGAN JANGKRIK MARINE XII OCTP 15/06 ZOHR East hub Norway Kazakhstan Indonesia Congo Ghana Angola Egypt achieved 2H 16 1H 17 ongoing 2H 17 2H 17 2H 17 65 65 40 150 40 45 >400 9
Slide 10: Focus on Zohr
Focus on Zohr Project scheme Highlights • FID in Feb 2016 (6 months after discovery) • Start-up from Q4 2017 • Carbonate reservoir in 1500m water depth • 30 Tcf (850 bln m3) OGIP • Working interest: 100% eni • Plateau 2.7 bcf/d or 500 kboed (eq peak >400 kboed) • 20 wells and pipelines to on-shore p
Slide 11: Production growth
Production growth Oil & gas production | Mboe/d CAGR 2015-19 >3% Vandumbu OCTP gas (W.Hub) WLGP debott. MLE Jangkrik Bahr Ess. ph2 CAFC boost East hub Ochigufu Loango one off CAFC oil (W.Hub) Goliat Asfour OCTP oil Mpungi Zohr (W.Hub) Kashagan Melehia deep Hapy Heidelberg Start-ups / Ramp-ups ~ 800
Slide 12: Speeding up alignment between cost and prices
Speeding up alignment between cost and prices -60% -50% -40% -30% -20% -10% -0% drillship (DW/UDW) from jack-up rig 2014 to 2017 land rig Total rig fleet reduction upstream from 109 to 73 logistic (-33%) drilling ancillary Avg daily rigs services rate reduction from $9.2 2015 vs 2014 EPC mln/d to $4
Slide 13: Increasing flexibility in our capex plan
Increasing flexibility in our capex plan Upstream | € bln Group 45 -18% 37* 90% upstream Zohr -39% 10% mid-downstream Group Capex net of disposal €37 bln * Gross capex before disposals 2015-18 capex plan restated at 2016-2019 FX rates 13
Slide 14: A valuable portfolio of new upstream projects
A valuable portfolio of new upstream projects New projects breakeven | $/boe New projects 2P res | Bep $/boe onshore $15 deep water $30 $30 shallow water Oil 31% - Gas 69% Enhancing project profitability Excluding Kashagan 14
Slide 15: Completing the turnaround in G&P
Completing the turnaround in g&p Average adj. EBIT | bln € Reduce Legacy Grow Costs Profitability Supply Contracts Integrated Sales renegotiations Channels Operation & Logistic LNG portfolio Retail Systems Retail customer base CFFO of €2.8 bln in 2016-2019 EBIT positive in 2016 15
Slide 16: Increasing downstream resilience to scenario
Increasing downstream resilience to scenario Refocused European portfolio Key pillars • Full conversion of the barrel to light products (EST Technology) • 2 green refineries with a capacity of 1160 Kton PCK in 2019 • Fixed cost reduction and logistics rationalization Portfolio refocusing is complete
Slide 17: Efficiency in operations
Efficiency in operations Opex $/boe F&D avg $/boe peers peers peers = BP, CVX, RDS, REP, TOT*, XOM *no data available for 2015 F&D Costs 17
Slide 18: Additional flexibility from portfolio management
Additional flexibility from portfolio management New plan €7 bln Dual exploration model Saipem Other Other Galp & Snam Galp & Snam 90% of previous 4YP target achieved in 2015 Pre tax value 18
Slide 19: Cash flow – 4YP balance
Cash flow – 4YP balance Cash flow € bln Capex 17-19 growth, turnaround, +$10/bbl asset efficiency disposal uncommitted asset scenario disposal capex 42% CFFO CFFO 58% committed 45 63 Large flexibility even in a lower-for-longer scenario 19
Slide 20: Remuneration - Confirmed dividend policy
Remuneration - Confirmed dividend policy Competitive distribution policy progressive with underlying earnings growth and scenario Floor dividend cash sustainability Cash neutrality • $50/bbl including disposals in 2016 • $60/bbl organic from 2017 • <$60/bbl organic 2018-19 Additional financial flexi
Slide 21: Conclusions
Conclusions Upstream and downstream resilience Large portfolio optionality Profitable growth Succeeding in the downturn and capturing long-term value 21
Slide 22: Appendix
2016 3018 sesonco) appendix _
Slide 23: Assumptions and sensitivity
Assumptions and sensitivity 4YP Scenario 2016 2017 2018 2019 Brent dated ($/bl) 40 50 60 65 FX avg (€/$) 1.06 1.10 1.15 1.15 Std. Eni Refining Margin ($/bl) 6.0 5.5 5.0 4.5 Henry Hub ($/mmbtu) 2.3 2.6 3.2 3.7 NBP ($/mmbtu) 4.9 5.3 5.5 5.8 4YP sensitivity* Ebit adj (bln €) Net adj (bln €) FCF (bln €)
Slide 24: Key start-ups
Key start-ups Equity project country op start up (kboed) peak in 4 YP Goliat Norway yes Achieved 65 Nidoco NW Egypt yes Achieved 30 Heidelberg USA no Achieved <10 West Hub (Mpungi, Ochigufu, Vandumbu) Angola yes Achieved/2H18/1H19 25 Melehia Deep Egypt yes 1H16 <10 Mafumeira Sul Angola no 2H16 9,6 K