Strategy. 10 March eni.com

Transcription

1 Strategy 10 March 2011 eni.com

2 update on Libya Personnel safety first priority Some assets in operation, mainly gas Facilities on hot standby ready to restart quickly Payback on existing investments already achieved Limited investments in the plan period Limited contribution to plan period growth (plateau volume achieved) 2

3 Libya: impacts on eni 2011 outlook Negatives Positives E&P Lower contribution from production G&P Higher supply costs E&P Higher oil price scenario G&P Lower ToP prepayments Negative impacts fully offset 3

4 E&P: a solid pipeline to support growth Production growth Well-positioned to grow: Industry-leading low decline rate Strong pipeline of project start-ups Focus on giant projects with long plateau volumes kboe/d 1,815 CAGR >3% >2,050 Raised 4-yr target to >3% CAGR $/bl

5 longer term upside: promising growth opportunities Unconventional gas in East Europe Poland Russian giants Samburgskoye Urengoskoye Yaro and others Venezuela full field developments Junin 5 Perla Sub-Saharan Africa East Africa Gulf of Guinea Pacific gas China gas shale Indonesia gas (CBM, Jangkrik) Australia 5

6 G&P: tackling short term challenges... Proforma Ebitda Short term scenario Ebitda sustained by: Regulated and low-volatility businesses Volume and market share growth Demand recovery Spot price increase LT contract renegotiation GTI ~70% of Ebitda from low market risk activities SRG M&P ~30% of Ebitda from activities subject to demand and price volatility Spread LT - Spot Support profitability in market turbulence 6

7 to benefit from medium-term recovery opportunities Bcm Long term scenario +1% +3% -4% European demand growth and additional opportunities from fuel switching Continuous decline of European domestic production Limited new LNG capacity for the Atlantic basin Global competition for additional supply Domestic production Supply extra EU CAGR Return to normalised profitability by

8 R&M: enhanced efficiency in a difficult market Limited improvements expected in refining scenario Doubling efficiency target to 200m Increase flexibility of supply slates Improve integration of Italian refining system Marketing profitability growth (retail and wholesale) EBIT 200m in 2014 at 2010 scenario 8

9 eni s key assets: enhanced value creation prospects Snam Saipem Galp Limited impact from EU gas directive Continuing profitability enhancement Delivering outstanding results Key synergies with upstream operations Great financial investment Additional upside potential 9

10 Exploration & Production Claudio Descalzi, COO eni.com

11 2010: achieved key milestones for future growth Iraq Venezuela Zubair Sanction of Rehabilitation Plan Perla Perla Gas in place over 16 tcf 20 kboed booked in Q4 First Major to enter cost recovery phase Junin-5 Set up of empresa mixta Reserves booked: 100Mboe Junin 5 Angola bl. 15/06 Russia Sangos & Ngoma Project sanctioned Start up in 2013 East Hub 400 Mboe of gross recoverable resources Sambursgkoye Project FID Q Start-up by 2012 Yaro Yakhinsky Project FID Q

12 enhanced asset base: the foundation of long-term growth 2010 total resources* By type Bln boe 31 6% 13% 7% Others Onshore Offshore 41% Deepwater 33% Arctic By area 2P reserves Other reserves/ resources 21% 19% North Africa America Brent ($/boe) Life Index (years) % 10% 16% 14% Europe Other Central Asia/Russia West Africa * P1 + P2 + P3 + Contingent Resources + Risked exploration 12

13 : accelerating growth Production CAGR sensitivity 1,815 CAGR >3% >2,050 ~3% >2.5% 2% $ 90$ 100$ $/bl price scenario : 70$/bbl flat 13

14 growth based on low decline rate... 4 year plan production Production optimization 20% of total 4Y plan capex 1,300 actions in 4Y plan ~ 500 infilling & workover ~ 800 facilities upgrading start-ups production optimization producing fields reducing decline rate ~ value generation IRR >40% payback < 24 months 14

15 and a strong pipeline of new start-ups major projects for growth 630 kboe/d Fields Country Op. FID Start-up 2014 equity prod. (kboed) Others Already 10% 23% 67% Nikaitchuq MLE CAFC El Merk Kashagan EP Samburgskoye Jasmine Angola LNG Mavacola/Clochas Goliat Bl. 15/06 East hub Junin 5 Bl. 15/06 West hub Perla Burun Phase 2 USA Algeria Algeria Algeria Kazakhstan Russia UK Angola Angola Norway Angola Venezuela Angola Venezuela Turkmenistan FID 2011 FID 2011 FID 2011 FID Visible and diversified growth 15

16 more operatorship... Operated production 100% and equity Mboed 12% Competences & know how 4.4 Cost efficiency HSE rules Technical standards equity 100% CAGR Improved performance & risk management 16

17 and more giant projects Contribution from new giants Main start-ups kboed 900 Nikaitchuq Jasmine Goliat Russian projects 600 Appaloosa West Franklin Val d Agri ph.2 CAFC/MLE El Merk Zubair Kashagan Burun Ph.2 Junin 5 & Perla Congo gas Indonesia gas 300 Bl. 15/06 Kizomba Sat ph.1 ALNG Kitan giants * others * gross reserves > 300 Mboe and material equity stake 17

18 long term growth: solid and balanced exploration portfolio Capex Barents Sea ~ 3.6 Bln Alaska 30% North Africa Middle East frontier & new basins Gulf of Mexico Pakistan Pacific Area 40% proven basins & plays Venezuela Ghana/Togo Gabon RDC/Angola India Mozambique Indonesia Australia Sub-Saharan 30% near field frontier high potential proven basins 18

19 strategic position in unconventional projects Exploration drivers Low entry costs Profitable gas market Developed infrastructures Technology transfer from US market Barnett Shale Eastern Europe gas shales North Africa gas/oil shales Congo tar sands Pakistan tight gas China gas shales Indonesia CBM gas oil 19

20 high-return capex plan Capex IRR Bln +4.3% Production optimization IRR: >40% payback below 24 months PSA ~65% 20% % Growth projects IRR: ~23% New projects breakeven at 45$/bl development exploration other 20

21 FPSO 600 m CABACA 1 short time-to-market crucial for returns Time-to-market of resources discovered in Australia Kitan 2.5 years Discovery date: 2008 Start-up: % 21% 52% Venezuela Perla 3 years Discovery date: 2010 Start-up: 2013 Angola Block 15/06 Nzanza-1 (2009) Mpungi-1 (2010) Cabaca North-1 (2009) Xikomba < 4 years 5-8 years > 8 years NW-Hub Cinguvu-1 NE-Hub (2009) 1500 m N Goma-1 (2008) VICANGO BATUQUE DIKANZA SAXI-BATUQUE CHOCALHO RECO-RECO Kizomba C WHP Kizomba A KISSANJE WHP SAXI MARIMBA N. HUNGO Kizomba B MAVACOLA N MARIMBA S MBULUMBUMBA FPSO 1000 m MONDO BAVUCA Sangos-1 (2008) Kizomba C MAVACOLA S CLOCHAS KAKOCHA TCHIHUMBA FPSO FPSO FPSO Cabaca SE-1 (2010) 4 years Discovery date: Start-up:

22 confirmed leadership in efficiency Opex F&D cost $/boe $/boe eni Benchmark group* * XOM, CVX, COP, BP, RDS, TOT, eni. (no RDS for 2010) 22

23 leading cash generation and value Cash Flow eni 2P NPV/boe by region $/boe $/boe $ 100 $/bbl $ 7.5 $/boe $/bbl North Africa West Africa OECD Other Brent avg ($/boe) eni Benchmark group* * XOM, CVX, COP, BP, RDS, TOT, eni only eni, RDS, TOT and COP 23

24 E&P operating model Assets Actions Goals Giants Conventional Balanced exploration Time to market Production optimization Operatorship Technology Long term growth Profitability 24

25 Gas & Power Domenico Dispenza, COO eni.com

26 European gas market : a gradual rebalancing Key trends (bcm) North America No significant import No export in 2014 horizon Europe Gas demand recovery and production decline Japan and Korea Strong demand and import growth. Contract renewals in progress Latin America Growing demand and import requirements Middle East Strong growth in demand reducing export growth potential China and India Strong growth in demand almost completely met by new imports Indonesia and Malaysia Declining production and export potential 26

27 G&P targets : recovering profitability Pro-forma adj. EBITDA Marketing & Power Supply cost improvement 5% CAGR of sales in Italy and key European markets Development of integrated trading activities Continuous attention to efficiency Bln Regulated business Resilient profitability despite disposal of European pipelines International Transport Marketing & Power Snam 27

28 growth driven by international expansion Sales in EU (excl. Italy) Sales driven by: bcm 16% integrated pan-european platform multi country offering development of new customised commercial offers Expansion of direct sales in key markets (incl. France, Germany and Austria) Maintain leadership position in Benelux Consolidated sales Associates 28

29 and Italian market share recovery Sales in Italy * Recovery in business segments: bcm improved competitiveness of eni s offer tailored solutions and customized contracts 32 36% 44 Expansion of retail customer base: new marketing initiatives (new advertising and commercial offer) best-in-class customer service full geographical coverage through integrated network of agencies and eni energy stores * Sales to Italian shippers not included 29

30 capex plan: increasing focus on regulated businesses Total capex 7.5 billion Regulated business 6.4 billion with guaranteed returns improvement of flexibility, reliability and quality of service development of storage capacity, according to government guidelines 13% 1% Merchant activities 1 billion mainly for power generation operating flexibility enhancement 86% maintenance renewable initiative in Porto Torres Snam Rete Gas International transport Marketing 30

31 Refining & Marketing Angelo Fanelli, COO eni.com

32 weak scenario with limited improvements EU demand/capacity Refining marker margin Mbl/d TRC Brent $/bl capacity demand avg Stable demand Refining capacity shut down throughout Europe Tightening product quality regulations Improving refining margins Slight opening of sour-sweet crude differential Slow recovery of crack spread 32

33 R&M target: return to profitability Refining Marketing Operational improvement Integration of refining cycles Energy saving: -6% consumption Fuel mix optimizations: coke/natural gas vs fuel oil Logistic rationalization Headcount reduction Selective increase of complexity EST project start-up by end-2012 Nelson index +0.5 points Retail network upgrading New premium products Rebranding Non oil development Improve customer service and quality Profitability enhancement New pricing system Efficiency gains Efficiency improvement: 200m EBIT at 2010 scenario: breakeven in m in

34 selective capex plan Bln % Development 40% 30% 60% 70% HSE 12% 23% Stay in business Main projects: Plan Plan EST in Sannazzaro (breakthrough technology, resilient to scenario changes) Refining Marketing Logistic infrastructures in Taranto (updownstream integration) Retail upgrading and rebranding (short payback) 34

35 Financial Outlook Alessandro Bernini, CFO eni.com

36 efficiency programme Bln 4.4 E&P 11% 1.7 G&P 11% Corporate & others 46% R&M 11% 2.4 Chem. 17% 0.3 E&C 4% achievements achievements target Procurement optimization Technology improvements and operational excellence Downstream and logistics streamlining Labour efficiencies 36

37 financial debt: low risk 2010 net debt Snam Rete Gas 10 billion Saipem 3 billion eni 13 billion Lowest risk profile of eni s portfolio Self financing Major vessels almost completed Strong cash flow Mainly PSA exposure 2011 guidance (at 70$/bl) Divestments ~ 2 bln Net debt to equity down compared to 2010 Going forward Net debt to equity <40% within the plan period Cash neutrality at 40$/boe by 2014 Total 26 billion 37

38 financial debt: high quality Debt by instrument Debt by maturity 5% >10 yrs Commercial paper 16% 46% 4-10 yrs Bonds 52% 27% 2-4 yrs Banks 32% 22% Current M/L Term Extension of debt maturity, privileging bond emissions Progressive diversification of holders/countries/currencies Fixed rate long-term debt: >70% over the plan period year-end

39 capex Bln Others Upstream focus: >70% Saipem R&M G&P Selective G&P and downstream investment Completion of E&C E&P investment cycle Capex plan Variation Capex plan 39

40 a progressive dividend policy For 2010 we will propose a 1 a share dividend Under eni s four-year oil price assumption, we will increase our dividend in line with OECD inflation from

41 Closing remarks Paolo Scaroni, CEO eni.com

42 strategy : a strengthened growth profile E&P: faster growth coming through G&P: solid business with long term upside R&M: enhanced efficiency in difficult market 42