Slide 1: Eni's strategy and sustainable growth
eni’s eni s strategy and sustainable growth 30 January 2012 eni.com
Slide 2: Our distinctive approach to sustainability comes from history
our distinctive approach to sustainability comes from history eni model of relations with producing countries Business and technology development Oil & g gas integration g Access to energy and infrastructure To be local “eni model” 1950s – 1960s present day “Mattei Formula” Distinctive appro
Slide 3: Continued innovation on sustainability initiatives
continued innovation on sustainability initiatives 1970s 1999 2003 2007 2010 2011 First long-term gas First HSE First eni EST pilot eni model pipeline deals with Report biodiversity Foundation project leads to major suppliers pilot project completed at giant gas (Val d’Agri, Taranto discovery, Italy
Slide 4: Eni's sustainability approach: the benefits
eni’s sustainability approach: the benefits Access to resources Strategic partnerships Creating C ti long- l Exposure to growing gas market term growth Maximising efficiency opportunities Synergic unconventional Talent attraction/retention att action/ etention Political P li i l Fina
Slide 5: Eni in Africa: our model has driven growth
eni in Africa: our model has driven growth… Countries and year of entry African production (1970-2010) kboed CAGR Tunisia 1961 Algeria Libya Egypt 13,854 2.0% 1981 1959 1954 Mali 2006 Togo 2010 Nigeria 1962 Ghana Congo 2009 1968 7,924 Gabon RDC 1,002 6.5% 1981/2008 2010 6,179 Angola 386 Presence sin
Slide 6: While contributing to political risk management
… while contributing to political risk management eni production in Africa (1965-2010) Kboe/d Tunisia: coup d’état Nigeria: repeated coups Angola: and social unrest civil war Angola: Angola: civil war Libya: civil war frictions Italy-USA Egypt: 6 days Egypt: war Yom Kippur war Congo: civil war Libya
Slide 7: Eni's strategy: well-positioned to deliver further growth
eni’s strategy: well-positioned to deliver further growth Another decade of sustainable growth • Leveraging on increased scale (2000-10 production CAGR 4.3%) E&P • Continuing g expansion p in legacy g y areas and in new g growth hubs • Strengthened resource base through exploration (10 Bboe discover
Slide 8: Sustainability will continue to support growth
sustainability will continue to support growth Leveraging on Taylor-made for Prepared to key competences country invest with a requirements long-term view Access to energy Agriculture and development Innovation to enhance profitability Creating new business opportunities 8
Slide 9: Access to energy
access to energy First IOC to invest in power Togo Nigeria generation in Africa using Ghana associated gas Congo Major electricity generation: 4 plants in Congo and Nigeria Angola 60% of Congolese electrical production Mozambique Existing projects 20% of Nigerian electrical production p MOUs
Slide 10: Agriculture: local approach to support development
agriculture: local approach to support development Ongoing projects New developments Green River Project, Nigeria Palm oil projects, Congo and Angola g • Integrated social p project j impacting p g agriculture, fishing and livestock • Supporting the creation of • 1988-2010 investments: $49m modern,
Slide 11: Petchem: innovation for business turnaround
petchem: innovation for business turnaround New bio-based chemical JV to be developed p on site hosting g former,, structurally loss-making, petchem plant Will produce bio-intermediates for plastics lubricants and additives plastics, for elastomers Bio-refinery fully integrated with local cult
Slide 12: Eni's strategy and sustainable growth - Claudio Descalzi, E&P COO
eni’s eni s strategy and sustainable growth Claudio Descalzi,, E&P COO eni.com
Slide 13: Eni's sustainability approach E&P: sustained production growth
eni’s sustainability approach Access to resources Political Strategic partnerships Operational Growing global gas Management eni’s Long term Financial market of business growth g Geological uncertainties model opportunities Minimizing footprint Technological Synergic unconvention
Slide 14: Managing political risk: geographical diversification
managing political risk: geographical diversification 2010 resources 31 bn boe Diversified resource base: key growth areas in Africa,, OECD,, FSU and Far East 19% 21% Containment of financial exposure per 14% country 20% 16% 10% Risk of new projects embedded in hurdle rate Use of certified i
Slide 15: Managing political risk: focus on core hubs
managing political risk: focus on core hubs Key growth hubs Yamal Barents Sea Peninsula Kazakhstan Libya Venezuela Sub-Saharan Indonesia Africa Core areas producing ca 1 mboe/d in 2010 Drivers of synergic long-term growth Consolidated relationship with producing countries Double-flag approac
Slide 16: Local approach: meeting the country's development needs
local approach: meeting the country’s development needs RC LPG plant Brazzaville M’Boundi Tar sands RIT Loudima Mindouli Tsielampo p M’Boundi Zingali Loufika MA Litchendjili G Kouakouala Refinery RIT Coraf Pointe Mongo Kamba Noire 1/2 N’Goyo Oil centre Cote Water injection Mateve Gas compression/ pu
Slide 17: Local approach: the Green River Project in Nigeria
local approach: the Green River Project in Nigeria No. of families involved (,000) First integrated social project in 80 70 the industry Project impacting 500,000 500 000 people 60 50 40 in 2010 Introduction of modern farming 30 20 10 techniques respecting the 0 88 89 90 91 92 93 94 95 96 97 9
Slide 18: Local content
local content Local employees* Number 65% Africa main area of increase 4 103 4,103 2,496 Contribution to country-wide education/university programmes Training programmes 2000 2010 Training on the job at the headquarter Local managers* Dedicated local training Number Master abroad 236%
Slide 19: Limiting exposure to operational risk
limiting exposure to operational risk 2010 resources by type 7% 13% Balanced portfolio with little 6% 41% exposure p to high g risk pprojects: j 33% 74% onshore or shallow water Only 6% deepwater exposure Onshore Arctic HP/HT wells only 3% of total wells Offshore Deepwater Others Operated pr
Slide 20: Preventive approach: Eni's policy
preventive approach: eni’s policy Operated assets Non-operated assets Processes Preventive approval of well design Mandatory while-drilling technology for and execution by headquarter real time well monitoring Increase of eni’s supervisors on contracted rigs eni’s representative in the JV
Slide 21: Focus on proprietary technologies
focus on proprietary technologies Big hole profile – industry standard Extreme lean profile – eni standard Large flow area in annulus Reduced flow area between casings in annulus between casings Liner + Tie Back higher safety Production level in standards direct communication with LINER 9 5/8” and T
Slide 22: Operational results: blowouts
operational results: blowouts Drilled wells eni in 2000-2011 307 293 3214 wells drilled 1 blow-out 227 0.3/1,000 wells 155 2 59 2.59 0.88 Global average and 0.00 0.00 accepted insurance coverage 1995-99 2000-04 2005-09 2010-11 avg drilled wells per year 4/1,000 wells blow-out frequency (per thousand
Slide 23: Operational results: improving safety
operational results: improving safety Lost time injury frequency rate* 0 77 0.77 0.73 0.66 0.41 0.42 0.41 Company Contractor Global Prevention and preparedness: 170,000 training hours per year “Leadership Leadership in safety” safety programme Tracking of near-misses Quarterly reporting of s
Slide 24: Operational results: low opex and efficient field management
operational results: low opex and efficient field management OPEX* Low depletion rate 10 10 9 9 88 77 7.0 66 5.7 5.4 55 44 2010 2011 2012 2013 2014 3 3 07-09 08-10 11-14E production producing eni Benchmark group** start-up optimization fields * RDS n.a. ** XOM, CVX, COP, BP, RDS, TOT, eni. Company d
Slide 25: Minimizing environmental impacts: zero gas flaring commitment
minimizing environmental impacts: zero gas flaring commitment Nigeria: gas utilization as % of equity production 2000 2005 2010 2014 Gas For electricity Distributed Reinjected Gas to LNG flared production for local use Associated gas valorization Commitment to zero gas flaring 25
Slide 26: Minimizing environmental impacts: water usage optimization
minimizing environmental impacts: water usage optimization Re-injected water vs. total water produced 42% 41% 41% 35% 33% 59 60 59 40 41 2007 2008 2009 2010 2011 Jan-Oct Re-injected production water % of re-injected oil-linked water Water reinjection target: 62% of the total water produced by 2014 2
Slide 27: Case study: Nigeria oil spills
case study: Nigeria oil spills eni oil spill events/year Number 400 300 200 100 0 2005 2006 2007 2008 2009 2010 2011 Sabotage Operational Increasing bunkering activity Local refining with heavy impact on environment Response: Collaboration with local authorities and communities Increased i
Slide 28: Case study: Goliat blow-out response plan
case study: Goliat blow-out response plan Well/installation barriers Goliat environment: Close to the coast: short time to shore Vulnerable resources: large seabird colonies, rich fisheries Limited visibility in winter Activities: A ti iti Radar coverage Accurate simulation of the dyna
Slide 29: Case study: Congo tar sands risk assessment
case study: Congo tar sands risk assessment Areas under assessment Two exploration permits: Tchikatanga and Tchikatanga- Makola 1790 sqkm q 45 km NE of Pointe Noire Congo Brazzaville Pilot project in Q2 2012: Study of the best areas for production Study of the best cultivation method in
Slide 30: Eni's strategy for the future: continuous improvement
eni’s strategy for the future: continuous improvement Consistent focus on conventional assets and geographical diversification Consolidation of community relations Increased operatorship as a tool to contain risks Continuous development of competences and technologies Proactive attitude in
Slide 31: Closing remarks - Paolo Scaroni, CEO
closing remarks Paolo Scaroni,, CEO eni.com
Slide 32: Eni's sustainability approach: the benefits
eni’s sustainability approach: the benefits Access to resources Strategic partnerships Creating C ti long- l Exposure to growing gas market term growth Maximising efficiency opportunities Synergic unconventional Talent attraction/retention att action/ etention Political P li i l Fina
Slide 33: Back up
Back up eni.com
Slide 34: Safety is our first priority
Safety is our first priority Lost time injury frequency Frequency per million hours worked 2007 1,6 1.62 Steady improvement in all business areas 2008 1,4 1.42 Safety indices included in 2009 1,1 1.11 management incentive schemes 2010 0,9 0.89 Emphasis on training and cultural change h 2011 0,
Slide 35: Eni model: focus on compliance and control
eni model: focus on compliance and control Board of statutory auditors/SOA audit committee Supervises board compliance 4 members (all chartered accountants) Internal Control committee & Internal audit C Compensation ti Committee C itt Supervision of internal audit activities Variable compens