Exane BNP Paribas European Seminar Massimo Mondazzi SVP Planning & Control Paris, June 14th, 2007 E&P: Increase production, replace reserves and build a global LNG position G&P: Grow internationally and preserve Italian gas business Technology Operational Efficiency Eni’s Growth Strategy R&M: Enhance refining profitability and marketing network 2 E&P: Long Term Growth Production growth - CAGR 2006-10 From 3% to 4% post 2007 asset acquisitions Reserve replacement ratio >100 2007-2010 Existing Portfolio Future developments & opportunities Large and diverse resource base Exposure to world leading projects Renewal of exploration portfolio Technology partner with NOCs Building a global LNG business Uniquely integrated business model Enhancing Enhancing E&P E&Pand andG&P G&P integration integration 3 Proved Reserves and Resources Proved Reserves (SEC rules) Year-end Brent ($/bl) 40.5 58.2 2006 Total Resources (40$/bl brent) 58.9 Solid Resource Base to Sustain Long Term Growth Organic Reserves Replacement 2004-06 at 40 $/bl: 106% >25 105 Reserves replacement (%) 65 40 91 all sources 23 7.2 6.8 2004 12.1 12.5 38 6.4 7.0 2005 2006 Proved Proved+Probable Total* 10.8 10.0 10.8 >19 >38 Reserves (Billion boe) Life index (year) organic * Proved + Unproved Reserves + Risked Exploration 4 Successful Exploration and Portfolio Renewal Added Resources (Bln boe) Resources added per year (2003/06): 700 Mboe 2.8 3,0 2.4 2,5 Average ROS SEC 2003-06: ~ 50% 2,0 1,5 Portfolio renewal: 68% of total acreage in 3 years 1,0 0,5 0,0 High quality portfolio added 2003 Per year 2004 2005 Cumulative 2006 2003/06 cumulative production 2006 new net acreage: 152,000 sqkm, 99% operated Core Areas • • • • • ANGOLA 1 block offshore (Bl. 15) BRAZIL 1 block offshore CONGO 3 blocks offshore EGYPT 1 block offshore MOROCCO 1 block onshore New Areas • • • • NIGERIA 1 block offshore NORWAY 1 licence offshore PAKISTAN 4 blocks onshore USA 1 block GoM 48 blocks Alaska • • • MALI 5 blocks onshore MOZAMBIQUE 1 block offshore TIMOR EAST 5 blocks offshore 5 G&P: Robust Cash Generation Free Cash Flow: 2.1 billion in 2010 CAGR 3% (2006-2010) Pipeline Long term contract portfolio, equity gas and LNG Widespread international infrastructure Strong position in growing markets Direct access to customers Exploit dual offer Eni markets LNG existing LNG ongoing 6 G&P: Targets Gas sales (bcm) Growth in international sales CAGR CAGR 2006-10: 2006-10: ~10% ~10% outside outside Italy Italy >100 International sales* 42% 50% 54% Italy 58% 50% 46% 2006 2009 Previous Target 2010 New Target (bln €) >105 97 Free cash flow Maintain strength in domestic market Increase operational efficiency * ** Including Extra Europe gas sales and E&P equity gas sold in Europe (4 Bcm) Normalized to exclude inventory changes and extraordinary commercial credits/debits 2.1 1.9** 2.2 1.9 Potential Upside 2006 2009 2010 Previous New Target Target 7 Free Cash Flow Generation Target Billion € 1.9* Activity Areas 2.1 17% 59% 20% 80% 50% 50% 24% 2006 2010 2006 2010 Regulated business Marketing and Power Italy International International pipelines * Normalized to exclude inventory changes and extraordinary commercial credits/debits 8 R&M: Improving Profitability 2010/2006 +40% ebit increase at 2006 scenario REFINING Focused investment programme • Grow refinery throughput • Increase conversion index Pursue operational efficiency MARKETING International retail presence Refineries Increase premium product sales and non-oil activities Grow sales in Europe Efficiency programme 9 R&M Targets Refining Improve conversion index and middle distillate yield Increase refinery throughput Enhance operational efficiency Throughput* (Mln ton) Conversion Index (%) 40.2 57 58 2006 2010 2013 41 44 46 Target Estimate Middle Distillate Yield (%) (*) Excluding processing for third parties of 1.8 Mln ton/y Marketing >43.0 38.0 61 High High turnaround turnaround potential potential Increase sales in Europe Improve retail network economics Efficiency programme Retail sales in Europe (Bln liters) Throughput in Europe (Mln lt/ss) 15.8 2.5 2006 17.4 2.7 2010 10 Disciplined Capex Increase Billion € 5.2 35.2 1.9 37.1 2.3 € bln Regulated 2 Refining upgrading 0.6 Saipem new vessels 1.1 44.6 4.0 4.3 Others R&M 6.7 G&P 29.6 E&P 36% 48% 16% Regulated 2006-2009 SRG consolidation and forex 2006-2009 pro-forma E&P incremental inflation Additional Activities 2007-2010 capex plan PSA Other Strong and selective investment programme 70% of additional capex devoted to grow the business Balancing risk vs return 11 Attractive Dividend & Buy Back 1.10 0.75 Dividend 0.90 €/share 2003 Dividend payment Share buy back 2004 1.25 0.65 0.65 0.45 0.60 2005 2006 Dividend up 13.6% 2006 dividend sustainable in the 2007-10 period October 2006: 0.60 € per share June 2007: 0.65 € per share 5.7 billion € 2000-YTD (1Q07) share buy back (8.6% of capital) 1.7 billion € still available 12 Recent Acquisitions Core strategic area Strong contribution to long term growth Financial discipline 13 The Strategic Rationale E&P R&M Enter hydrocarbon rich regions and strengthen presence in core areas Boost growth in the four year plan and beyond Add valuable resources: over 2 billion boe Operatorship Exploration potential Improve competitive positioning in central Europe Improve integration with local refining capacity Strengthen existing marketing network 14 New Gulf of Mexico Assets Cash consideration US$ 4,757 bn Increase materiality in a key area: - 222 million boe 2P reserves - from 36 to over 110 kboe/d (effective July 1st 2007) Strengthen operatorship in the Gulf of Mexico High exploration potential EPS and CFPS accretive from 2007 New Orleans Main Pass 272 Blocks ~ 60% operated 0.78 Million Net Acres Neptune Rigel Miocene 53 Fields Legacy Fields Egom Devil Tower Thunderhawk Front Runner Dominion assets Production Exploration Core Areas Shelf/State Shelf/State 70% of 2P reserves in 8 fields Deepwater Deepwater 15 Arctic Gas and Urengoil “SINT” Assets Strategic partnership with Gazprom Access to significant resources: ~ 1.5 billion boe Sustain production growth in the long term Leverage on operational skills and technology Gazprom has an option to acquire a 51% interest within 2 years If Gazprom exercises its call option: Moscow 9 Eni’s cash consideration: US$ 0.63 bn 9 Eni’s interest: 30% 16 Congo Assets Operatorship Strengthen materiality in a legacy country Production growth in medium term Reserves upside High exploration potential Assets acquisition completed in May Original Original Oil Oil in in place place ~ ~ 1.4 1.4 Gbl Gbl Commercial assets - M’BOUNDI: 43.1%, KOUAKOUALA A: 66.7% KOUAKOUALA B, C, D: 50% Exploration license - KOUILOU: 48% Cash consideration: US$ 1.28 bn 2P reserves: 112 Mboe Acquired assets equity production: 18% CAGR 2007-10 17 Other E&P recent acquisitions Alaska Angola TA PS Nikaitchuq Operatorship and 70% stake in the Nikaitchuq field 2P reserves: 70 Mboe First oil 2009 13.6% stake in A-LNG New 5 million-ton LNG plant Monetize currently untapped reserves Regasification capacity of 5 bcm/y in Pascagoula 18 Eastern Europe Downstream Activities Acquired assets Industrial Rationale Financial Impact 102 retail stations in Czech Republic, Slovakia, Hungary 16.11% stake in Czech Refining Company Enhance Eni’s integrated marketing and refining activities Increase local refining capacity to 2.6 mln tons per year Improve network quality: 4.9 mln lt/y throughput per site Synergies EPS accretive 19
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