eni factbook 2010
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DESCRIPTIONEni’s Fact Book is a supplement to Eni’s 2010 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, development and management of oil and gas resources, dividends, 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.
- 1.Fact Book 2010
2. MissionWe are a major integrated energy company,committed to growth in the activitiesof finding, producing, transporting, transformingand marketing oil and gas. Eni men and womenhave a passion for challenges, continuousimprovement, excellence and particularlyvalue people, the environment and integrity. 3. Fact Book 2010 4. Enis Fact Book is a supplement to Enis 2010 Annual Report and is on a variety of factors, including the timing of bringing new fields ondesigned to provide supplemental financial and operating information.stream; managements ability in carrying out industrial plans and inIt contains certain forward-looking statements in particular under succeeding in commercial transactions; future levels of industry productthe section Outlook regarding capital expenditure, development supply; demand and pricing; operational problems; general economicand management of oil and gas resources, dividends, allocation ofconditions; political stability and economic growth in relevant areas offuture cash flow from operations, future operating performance, gearing, the world; changes in laws and governmental regulations; developmenttargets of production and sale growth, new markets, and the progress and use of new technology; changes in public expectations and otherand timing of projects. By their nature, forward-looking statementschanges in business conditions; the actions of competitors and otherinvolve risks and uncertainties because they relate to events andfactors discussed elsewhere in this document.depend on circumstances that will or may occur in the future. Actualresults may differ from those expressed in such statements, dependingMay 5, 2011Periodical updates will be available on the web site: www.factbook.eni.com 5. Contents 4Eni in 2010 5Enis strategy10Exploration & Production39Gas & Power55Refining & Marketing67Engineering & Construction76Commitment to sustainable development81Research and innovationTables 84 Financialdata 97 Employees 98 Supplementaloilandgasinformation 109 QuarterlyinformationCountries of activity Exploration & ProductionRe ning & MarketingPetrochemicals Gas & Power Engineering & ConstructionEUROPEAFRICA ASIA AND OCEANIA AMERICASAustria the Netherlands AlgeriaAustralia Papua-New Guinea ArgentinaBelgium NorwayAngola AzerbaijanPhilippinesBrazilCroatia PolandCongoChina QatarCanadaCyprusPortugalCte dIvoireEst Timor Russia ColombiaCzech RepublicRomania Dem. Rep. of Congo India SaudiArabia Dominican RepublicDenmark SlovakiaEgyptIndonesia SingaporeEcuadorFranceSloveniaEquatorial GuineaIranTaiwan MexicoGermany Romania GabonIraqThailandia PeruGreeceSloveniaGhanaKazakhstanTurkmenistan Trinidad & TobagoHungary Spain LibyaKuwaitUkrainetheUnitedStatesIreland SwedenMali Malaysiathe United Arab Emirates VenezuelaItaly Switzerland MoroccoOmanVietnamLuxembourgTurkeyMozambique PakistanYemenMalta the United KingdomNigeriaTogoTunisia 6. 4 | Eni Fact Book EniEni in 2010Eni is a major integrated company, committed to growth in the Over the course of the year we increased our resource base by more thanactivities of finding, producing, transporting, transforming and0.9 billion boe to our resource base thanks to successful explorationmarketing oil and gas.activities in Venezuela, Angola, Indonesia and Brazil, at the veryAdjusted net profit was 6.87 billion, up 32% from a year ago driven by ancompetitive cost of 1.5 $/bbl.excellent performance reported by the Exploration & Production Division.The Junin 5 project in Venezuela and acquisition of new acreage in theDemocratic Republic of Congo, in Togo and in shale gas in Poland furtherReturn on Average Capital Employed (ROACE) calculated on an adjustedenhanced our upstream portfolio.basis was 10.7%.Cash inflows for the year mainly comprised cash flow from operationsThe Gas & Power Division posted a 12% decline in profits compared to 2009,of 14.69 billion and disposal proceeds of 1.11 billion. These inflows with an adjusted net profit amounting to 2.56 billion. The Gas & Powerenabled Eni to partially fund outflows associated with capital expenditures Division suffered from a challenging trading environment in the Europeanof 13.87 billion to support organic growth and exploration activities, market.Supplyexceededdemand,depressingspotgaspricesatdividends to Enis shareholders amounting to 3.62 billion, and dividends continental hubs which have increasingly been adopted as benchmarks fortonon-controllinginterests,mainlyrelatingtoSnamReteGasandSaipem, sales contracts outside Italy. This affected our margins, as spot prices fellamounting to 0.51 billion. well below our average purchase cost which is mainly indexed to the price ofThe ratio of net borrowings to total equity was virtually unchanged at 0.47 oil. Marketing activities reported sharply lower results (adjusted operating(0.46 at December 31, 2009).profitwasdown57%)owingtoheightenedcompetitivepressure.SalesinItalydeclinedby14%(downapproximately6bcm).SalesintargetEuropeanThe Board of Directors resolved to propose at the Annual Generalmarkets maintained a growth trend, with volumes up 2.5% (up 1bcm).ShareholdersMeetingadividendof1.00pershare,ofwhich0.50waspaid as an interim dividend.In 2010, the Refining & Marketing Division reduced its adjusted net lossby 75% to 49 million. In the context of weak refining margins caused byIn 2010, the Exploration & Production Division achieved adjusted net profit excess capacity, low demand and high feedstock costs, the improvementof 5.6 billion, up 44% compared to 2009, driven by a favorable trading was driven by greater efficiency and operational enhancement.environment for oil prices and the depreciation of the euro against the dollar. The Marketing business achieved good results: in Italy, successfulOil and gas production was a record 1,815 kboe/d, 1.1% higher than in commercial initiatives offset a difficult trading environment (lower2009. This growth was driven by the timely delivery of all 12 of our plannedconsumption and strong competition), while we continued to grow sales instart-ups, which contributed 40 kboe/d of new production in 2010 andselected European markets.will account for 230 kboe/d at peak. The all sources replacement ratio ofreserves was 125%, rising to 135% at constant prices, corresponding to aThe Engineering & Construction segment reported adjusted net profit ofreserve life index of 10.3 years at December 31, 2010 (10.2 years in 2009). nearly 1 billion, up 11% compared to 2009, driven by revenue growth 7. Eni Fact Book Eni | 5 Enis strategyand the higher profitability of projects.Business strategies and targetsAgainst the backdrop of a strengthening global economy, in spite ofvolatility and uncertainty associated with the ongoing Lybian crisis and In Exploration & Production Division, we intend to deliver stronggeo-political developments in other parts of the world, Eni will continueprofitable production growth leveraging on the Companys portfolio ofpursuing growth and creating sustainable long-term shareholders value.assets and pipeline of development projects. Management targets toEnis strategy is based on the following pillars:deliver an average organic growth rate of more than 3% over the next four-year period, targeting a production level in excess of 2.05 mmboe/d- to select and implement the best capital and investment opportunities; by 2014 under our Brent price scenario at $70 per barrel. Growth will- to preserve a solid capital structure; be fuelled by our strong pipeline of projects, with 15 new major fields- to pursue capital and operating efficiency;and other projects planned to start production in the four-year period.- to manage risks; Planned start-ups will add 630 kbbl/d of new production in 2014, related- to leverage research and innovation; mainly to conventional opportunities. Most of our new projects will get- to apply the highest ethical principles of business conduct; the relevant authorization within 2011.- to promote the sustainability of the business model. Growth will be also achieved maintaining the actual production profile at the operating fields through a relevant commitment in optimizationOver the next four years, Eni plans to execute a capital expenditure activities.program amounting to 53.3 billion to support organic growth in itsbusiness. Approximately 37.1 billion (over 70%) of planned capitalexpenditures will be invested to explore, develop and produce oiland gas reserves. Planned projects have been assessed against ourlong-term scenario for Brent prices at $70 per barrel. Cash flow fromoperations and planned divestment proceeds (approximately 2billion) will enable Eni to fund its capital expenditure program andremunerate its shareholders, while at the same time strengtheningthe balance sheet. Eni plans to progressively reduce the ratio of netborrowings to total equity (leverage) to below 0.40 within 2014.Management intends to pursue a value creation for its shareholderstroughaprogressivedividendpolicy.Startingfrom2011,managementplans to increase dividends in line with OECD inflation. This dividendpolicy is based on managements planning assumptions for oil prices at$70 per barrel flat in the next four years. The booking of new reserves will enable us to replace reserves produced in the period, keeping the reserve life index stable. In the longer term, we expect to drive production growth leveraging on our giant fields, particularly Kashagan, Junin, Perla, Goliath, MLE-CAFC, Russian projects, Block 15/06 in Angola and unconventional opportunities. We will pursue the maximization of returns through selective exploration, the reduction in the time to market of our projects, and growing the share of operated production which through the deployment of Eni standards and technologies enables us to deliver tighter cost control and a better monitoring of operating risks. In Gas & Power Division, Eni aims to pres