eni in egypt 2

E n i i n E g y p t

J u n e 2 0 0 6

Eni S.p.A.

Piazzale Enrico Mattei, 1

00144 Rome - Italy

tel. +390659821

fax +390659822141

www.eni.it

leoc Exploration B.V. - Egyptian Branch

leoc Production B.V. - Egyptian Branch

1, Road 204 - Degla Square, Maadi Cairo

Egypt

Phone +2027057171

Fax +2027057171

ENI- EGITTO 2 7-06-2006 17:16 Pagina 2

In recent years Eni has experienced an unprecedented period of growth

and is today one of the world's leading integrated energy companies.

It operates in 73 countries around the world and employs over 72,000 people.

Listed on both the Italian and the New York Stock Exchanges,

in 2005 Eni generated consolidated revenues of around 73.7 billion euros,

with a net profit of 8.8 billion euros, up 24% over 2004.

A long-lasting success is the result of a business conduct which combines

competitiveness with the capability to generate a sustainable value.

This is why Eni adopts a fair and transparent behavior with its stakeholders,

invests in people and their empowerment and contributes to sustainable development

by integrating environmental and social aspects into its own growth process.

Eni’s Way


Eni’s Activities4 Eni’s Activities5Eni’s Activities

Eni's activities are focused on four core businesses:

Exploration & Production, Gas & Power, Refining & Marketing

and Oilfield Services, Construction and Engineering.

Exploration & Production Eni explores and produces oil and natural gas inItaly, North and West Africa, the North Sea, the Gulfof Mexico, Latin America, Australia and in highpotential areas such as the Caspian Sea, the Middleand Far East, India and Alaska. In 2005 dailyhydrocarbon production amounted to 1.7 millionboe, up 7% over 2004. Proved hydrocarbonreserves at December 31, 2005 totalled 6.8 billionboe, with a life index of 10.8 years.

Eni operates in natural gas supply, transmission,regasification, distribution and sale in Italy andabroad, and in electricity generation and sale. In 2005natural gas sales exceeded 96 billion cubic meters,including internal consumption amounts, upstreamsales in Europe and natural gas sales of affiliates(net to Eni), while electricity production sold was 22.8terawatthours.

Snam Rete Gas transmits natural gas in Italythrough a pipeline network about 31,000kilometers in length, accounting for almost theentire national network. Eni also holds transmissionstakes abroad on over 5,000 kilometer-long gaspipelines.

Eni is the main operator in refining in Italy.In refined product distribution Eni, with its Agipbrand, is the market leader in Italy and holds majorpositions in a number of countries in the rest ofEurope. In 2005 overall sales totalled 51.6 milliontons of refined products. In the same period, totalintake processing on Eni's wholly-owned plantsamounted to 27.3 million tons, with a fully-utilizedbalanced capacity.

Gas & Power

Refining & Marketing

Eni, through Saipem (Eni’s interest 43%), isone of the world leaders in the construction ofmajor offshore projects for the oil industry andin subsea pipeline laying and installation ofproduction platforms. It also owns one of themost technologically advanced fleet of vesselsable to drill wells 9,000 meters deep in watersdepths of up to over 3,000 meters and to laypipelines in water depths up to 3,000 meters. Eni, through Snamprogetti (recently acquired bySaipem), is also one of the most importantinternational operators, in terms of technologicaland contracting capabilities, in engineering andproject management for the construction ofplants for the oil and petrochemical industries,as well as hydrocarbon transportation systems.

Oilfield Services,Construction

and Engineering


Eni ’s Mi les tones in Egypt6 Eni ’s Mi les tones in Egypt7

Eni’s Milestones in Egypt

1955

The Eni company Ieocmakes the first oildiscovery, the Belayimonshore field in the Sinairegion, in the Gulf of Suez.

1957

Further positive resultsfrom exploration lead to the creation of thecompany COPE (nowPetrobel), with theparticipation of Ieoc and theState petroleum agency(now EGPC).With this innovativeagreement, for the first timethe producer country sharesthe management and thecontrol of operations.

1961

Another first for Eni withthe discovery of the firstEgyptian offshore field,Belayim Marine, whichtoday is still the country’slargest oil reserve.

1967

The first natural gas fieldin Egypt is discovered, inthe Nile Delta. Withreserves of over 80 billioncubic meters, Abu Madi isstill one of the largest gasfields in the country.

1981

Acquisition of the Melehiaconcession in the WesternDesert. In order to furtherdevelop the activities ofthe joint operatingcompany, the companyAgiba Petroleum is set up.

1983

Discovery of the PortFouad gas field offshorethe Nile Delta near PortSaid. Ieoc will subsequentlydiscover many other gasfields in the Mediterraneanoffshore.

1987

Further acquisition ofdrilling permits in theWestern Desert, whichwill become anothermajor source of oil.

1988Introduction of the “gasclause” in the ProductionSharing Agreements(PSAs), aimed at enhancingthe exploration of naturalgas resources and thedevelopment of the fieldsdiscovered. The clause willgive EGPC the opportunityto develop the domesticmarket and export projects.

Eni’s activities in Egypt have been marked by a number of successes,resulting in major energy projects that have fostered the country’seconomic development.Egypt is one of the most important countries in the Middle East, and hasalways played a strategic role as a bridge between Europe, Asia and Africa.Today Eni is one of the leading international players in the country, thanksto a long-standing and fruitful collaboration with the Egyptian institutions.

Eni started operating in Egypt in 1955, with the acquisition ofshares of the company Ieoc, which became fully owned in 1961.This stemmed from the effective understanding between Eni’sPresident, Enrico Mattei, and Gamal Abdel-Nasser, President of the Republic of Egypt. The encounter between Eni and Egyptcame at a time when modern oil exploration had just startedand called for efforts and a strong commitment to assessthe country’s potential.


Eni’s Milestones in Egypt8 Eni ’s Mi les tones in Egypt9

1993Extension of the Petrobelleases (Sinai and AbuMadi) until 2020.

2001Inauguration of theIntersinai gas pipeline.Gas from the Nile DeltaPetrobel fields is deliveredthrough the Sinai region,thus favoring its growth;today it reaches Jordan.

2004Startup of operations in the Damietta LNGplant, constructed and runby SEGAS (Eni 40%).The plant processes gasfrom the Nile Delta fieldsand LNG is shippedmainly to Spain.Startup of a new UnitedGas Derivatives Co. plant(Eni 33.3%) in Port Said,for LPG and propaneproduction.

2005Ieoc maintains a leadingposition in gas exploration by acquiring newexploration blocks.

Natural gas is Egypt’s big challengefor the new millennium, being aninvaluable resource for the economicdevelopment of the country and for exports.Moreover, it gives Eni a great opportunityto implement integrated projects thatencompass the entire gas value chain.

Eni S.p.A.

Ieoc S.p.A.

100%

Eni International B.V.

Ieoc Exploration B.V.

100%

Non-Profit Operating Companies

El Fayrouz Petroleum Company

50%

Petrobardawil

30%

Ashrafi

50%

Ieoc Production B.V.

100%

Non-Profit Operating Companies

Petrobel

50%

Medgas

25%

Nidoco

37.5%

PetroSaid

50%

PetroDelta

37.5%

PetroTemsah

25%

Agiba Petroleum

40%

Ashpetco

50%

Ras Qattara

37.5%

Rampetco

22.5%

Torsina

12.5%

Rapetco

25%

Downstream Companies

United Gas Derivatives

33.3%

Eigtec

40%

Segas

40%

Eni in Egypt


Main Operations10 Main Operat ions11

Ieoc holds 56 licenses (50 of which are operated),for a total acreage of 35,000 square kilometers.These licenses are distributed in the country’sthree main hydrocarbon provinces: the Gulf ofSuez/Red Sea, the Nile Delta/Mediterraneanoffshore and the Western Desert.

In the last two years Eni’s strategy has been torenew its exploration portfolio, which has lead tothe awarding of 9 new high-potential explorationlicenses. The awarding of these new licenses willbe followed by a highly effective drilling program.Eni’s objective is to guarantee a substantialincrease in gas reserves in the Mediterranean andWestern Desert.

This will supplement the production plans aimedat encouraging the domestic and export markets.Exploration activity also makes up for thedecrease in oil production both in the Gulf ofSuez and in the Western Desert.

Today Ieoc is the leading producer in Egypt,accounting for about 30% of the gross annualhydrocarbon production and, more specifically,35% of liquids and 22% of gas. Eni's companiesoperate 410,000 boe/day. In 2005 the Ieoc equitytotalled nearly 212,000 boe/day, of which 42%were oil and condensates. Today the Ieoc equitytotals nearly 230,000 boe/day, the highestperformance in the company's 50 years of activity.

The most important Ieoc oil productionoperations are at Abu Rudeis, in the Gulf ofSuez. The Petreco Oil Center has a 260,000barrels/day treatment capacity, and gatherssome 150,000 barrels/day from onshore andoffshore fields - Belayim Marine, Belayim Land,Abu Rudeis, Feiran, Sinai, Dal and Ras Garra -all operated by Petrobel. Petreco is connected to

the Feiran tank farm and marine terminal, witha storage capacity of 2 million barrels.Agiba Petroleum, the other Ieoc operatingcompany, produces about 51,000 barrels/day ofoil, of which 12,000 barrels/day from theAshrafi offshore field in the Gulf of Suez andnearly 39,000 barrels/day from Melehia andseveral other fields in the Western Desert.

Gulf of Suez - Abu Rudeis

The Nile Delta region is Egypt’s most prolific gas basin.In 1967 Ieoc discovered the first gas field in the country,Abu Madi, one of the largest in Egypt. Over the years,other significant gas discoveries have been made andput into production by Eni: the onshore East Delta andEl Qar’a as well as the offshore Port Fouad, Wakar,

Darfeel, Baltim East, Baltim North, Temsah, Deniseand Denise South fields. Moreover, in other licences,Ieoc shares with BP the offshore discoveries of Ha’py,Akhen and Taurt. At the end of 2006 total productionfrom the concessions of North Port Said, Temsah andBaltim, will reach almost 38 million cubic meters/day.

Nile Delta - Abu MadiMediterranean Offshore

Main Operations

Eni has been operating in Egypt for 50 years, working successfully

in oil and gas exploration and production through branches in Egypt

of its subsidiaries Ieoc Exploration B.V., Ieoc Production B.V.,

and Ieoc S.p.A. Ieoc performs exploration directly and coordinates

development and production operations through operating companies

jointly set up with the Egyptian General Petroleum Corporation

(EGPC). Shares of said operating companies are held equally

by EGPC (50%) and Ieoc and its partners of international oil

companies, if any (collectively 50%).


Gas Industry Development12 Gas Industry Development13Eni has always believed in the potential of the Egyptian gas and has actively promotedthe use of this energy source for industrial development and electricity generation. Thanks to the farsighted policy adopted by the Egyptian government since the late 80’s,the country has become one of the Mediterranean’s biggest gas producers.Egypt managed to meet a growing domestic demand and arranged major gas export projectsto meet the increasing worldwide LNG and gas demand. Eni is cooperating with Egyptto make the country the focal point of the Mediterranean gas market.

Eni holds a 50% stake in Union Fenosa Gas,that has passed to the Egyptian affiliate, theSpanish Egyptian Gas Company - SEGAS, theresponsibility for the construction and operationof the LNG (Liquefied Natural Gas) plantconstructed within the port area of Damietta.EGAS and EGPC hold a 20% overall interest inSEGAS. The Damietta plant is the biggestsingle-train LNG facility worldwide with adesign capacity of around 5 million tons of LNGa year. The plant produced the first LNG inDecember 2004, and loaded the first cargo inJanuary 2005. The Damietta LNG plant hasbeen the first ever in Egypt, thus allowing thecountry to join the selected club of LNGexporting countries. The Damietta LNG partnersare working on the expansion of the plant witha second “train”.

Eni, through Eni International B.V., holds a33.33% stake in United Gas Derivatives Co.that has recently constructed an NGL (NaturalGas Liquids) extraction plant near the PetrobelEl Gamil production facility.The feed gas from the offshore fields will meetthe requirements of both petroleum productexports and of the domestic market, and willreduce imports.The plant, which treated the first gas inSeptember 2004, has an 11.5 billion cubicmeter/year treatment capacity, and is capable ofproducing yearly 430,000 tons of LPG (LiquefiedPetroleum Gas), 329,000 tons of propane and1.29 million barrels of condensates.

Eni, through Eni International B.V., holds a 40%stake in Egitec Co. (Egyptian International GasTechnology), a company that since 1996 has beenoperating in the downstream sector to reducepollution in large urban areas.

Gas Industry Development


Corporate Social Responsibility14 Corporate Soc ia l Respons ib i l i ty15

Corporate Social Responsibility

Conducting operational activities in a responsible manner is a fundamental

part of Eni’s way of doing business. Eni has been operating in Egypt in full

compliance with international standards and conventions, pursuing growth,

innovation and promoting open and transparent relations with partners,

government institutions and local stakeholders.

Eni’s objective has also been to contribute to the country’s sustainable development.

Human resources After 50 years of activity in Egypt, most of the 5,000people working in the companies in which Eniparticipates are nationals. Many of them hold keymanagerial positions, and a significant number ofEgyptians work overseas in other Eni internationalcompanies. Thanks to its long-standing tradition intechnical and management training, the company hasactively contributed to strengthening the country’slevel of expertise and knowledge in the field of energy.

As evidence of Eni’s commitment to continuouslyimprove HSE standards and integrate them acrossits activities worldwide, in 2004 Agiba Petroleumand Petrobel were granted the ISO 14001 andOHSAS 18001 certifications. With respect tothe disposal of OBM (Oil Based Mud), Ieocimplemented the re-utilization of drill cuttingthrough cement factory, and some 50,000 tons ofdrill cuttings were successfully disposed of in an

environmentally friendly manner. Eni promotesawareness and skills on HSE issues by alsoconducting specific training for employees andcontractors. In occupational health, for example,as part of its protection services, periodic first aidtraining courses are organized in collaborationwith the Faculty of Nursing of the University ofCairo in order to guarantee emergency care at thelocations of Amriya and Port Said.

Eni promotes the use of natural gas as a viablelow-emission energy source and employs themost advanced technologies to reduce pollutionin large urban areas.In this respect, through Egitec Co., in 1996 itstarted the distribution of gas for motor-vehiclesand has promoted the project to convert publictransport in Cairo to gas.

Health,Safety and Environment

Sustainable energy

Eni’s numerous initiatives include: the restorationof the hemodialysis ward of the “Umberto I”Hospital in Cairo; the contribution to the HigherMedical Council of the Petroleum Sector; thesupport for the creation of the Intensive Care Unitof the International Children’s Cancer Hospital inthe Sayida Zeniab district of Cairo, constructedby the Association of Friends of the NationalCancer Institute. This child-friendly facility will

treat children from the whole Middle East.Furthermore, the contribution of Ieoc to theADIC’s (Italian Women’s Association in Cairo)initiatives, sustaining the local organizations“Association for the Protection of the Environment”and “Abnaa Wadi el Nil”.The objective is to support children in Cairo’spoorest areas, by providing them with betterliving conditions and access to education.

Social support anddevelopment


eni in egypt 2

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