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2012 - 2015 Strategy
 

2012 - 2015 Strategy

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    2012 - 2015 Strategy 2012 - 2015 Strategy Presentation Transcript

    • eni.com2012-2015 Strategy15 March 2012
    • 2eni: well-positioned to deliver a decade of sustainable growth2012-2015 20212011E&P Confirmed growth profile Start-up of giants with long plateau Increased investment in exploration Libya restart Strengthenedresource base A decade ofsustainablegrowthG&P Recover profitability in a difficult market Consolidate competitiveness of supply Focus on key segments and markets Strong positionto benefit frommarketrecoveryR&MChemicals Continued efficiency Integration of refinery system,consolidation of marketing Refocusing chemicals portfolio onadded-value products Selectivepresence inR&M Competitiveplayer inChemicals Streamlinedoperations Improvedsupply Growth in keymarkets
    • 3E&P: consistent exploration success ... Mamba South(Mozambique) Skrugard (Norway) Hadrian Nord (US-GOM) Jangkrik NE (Indonesia) Lira 1 (Angola) Gye Nyame 1 (Ghana) Sangos-Ngoma(Angola) Kitan (JPDA) Culzean (UK) Sankofa (Ghana) Perla (Venezuela) Cabaca Norte (Angola) Area D (Libya) Heidelberg (US) Perla (Venezuela) Jangkrik (Indonesia) Sankofa (Ghana) Cabaca Sud Est Mpungi (Angola)2008-2011~4bn boe ofnewexplorationresourcesNew exploration resources(mboe)Total resources(bboe)
    • 4... drives organic growth, in the plan period...Adjusting for force majeure in Libya in 2012 (180k boe/d)CAGRBrent 2011-13: 90 USD/bl; 2014-15: 85 USD/bl>3% CAGR 2011-15in a higher oil price scenario Strong contribution fromexploration successes Confirmed focus on giant,conventional projects Increased exposure to oil Best-in-class operating costs IRR of new projects over 20%2011 2015kboe/dProduction growth>3% adjRussia and CaspianSub-Saharan AfricaNorth Africa and MEFar EastLatin AmericaEurope and North America
    • 5Production growthkboe/dRussia and CaspianSub-Saharan AfricaNorth Africa and MEFar EastLatin AmericaEurope and North America~3%2015 20212015-21 CAGR increased from 2% to 3%Price scenario: 85$/bbl 2015; +2%/year afterwardsResilient contribution driven by Barents SeaJunin 5 & Perla FF developmentsMajor contribution from Angola Block 15/06and Mozambique, additional explorationpotentialYamal giants, Kashagan ramp up, furtherpotential from Kashagan development... and beyond
    • 6G&P: positioned to tackle difficult short term scenario...* Adjusted for outcome of renegotiations and Libya impactMarketing: facing difficult scenario Slower than expected demandgrowth Spot/LT differential remainssignificant in 2012eni 2012-2015 strategy Leverage on more competitivesupply portfolio to grow marketshare in Italy and key Europeanmarkets Further increase exposure to moreresilient retail segment Capture benefits of marketvolatility through enhanced tradingcapabilitiesGradual recovery inprofitability TMPC, TTPC, Greenstream, BSPC,other regulated business Stable profitability and cash flowthroughout the planSnamTAG/TENP/TransitgasOtherG&PMarketingRegulated/Low-riskbusinessAssetdisposed/to be disposed TMPC, TTPC, Greenstream, BSPC,other regulated business Stable profitability and cash flowthroughout the plan2011 EBITDA pro-forma adjusted*(€ mln)
    • 7… and capture medium-term recovery opportunitiesEuropean demand recovery: Strong European market position Consolidated brand Expertise in innovative offering structure Diversified and flexible supplyportfolio Competitive cost position in tightenedmarket Increased equity gas supply New profit opportunities Enhanced LNG presence Cross-regional and cross-commoditiessynergies in tradingEU 27 (bcm)-8%~18% Economic growth Energy/environmental policiesTightening supply capacity: Increasing Far East demand Increasing MENA domestic gas consumption Declining European domestic production Limited LNG capacity for the Atlantic basinLong-term scenarioWell positioned to captureadditional growth
    • 8R&M: increasing efficiency and complexity Refining: a cyclical business in a difficultshort term scenario Increased focus on complexity and efficiencyto benefit from potential scenario recovery EST completion by 2012 Increased system integration Exploit flexibility and asset-backed tradingOptimisation& efficiency+ €400m Marketing: confirming profitability Consolidation of Italian leadership Network enhancement and automation Expansion of non-oil activitiesItalian retailmarket share>30%
    • 9Chemicals: a new turnaround strategyMore efficientand integrated  Savings >€200m by 2015Enhanceddifferentation Increase revenues fromadded value productsfrom <30% to >40%Internationalexpansion > 10% of revenues fromoutside Europe by 2015 Licensing, productionalliances/JVsRegainingcompetitivenesswithin chemicalsbusiness2015 target> €400m of EBIT atconstant scenario
    • 10GalpSnamSeparation by September 2013Process evaluated on 3 criteria: Benefits to eni shareholders Protection of the interests of Snamshareholders Consolidation of eni balance sheetNon-core shareholdingHigh potential business, with excitingpositions in Brazil, MozambiqueUpside from market value recoveryenhanced value creation opportunities from non-core listed assets
    • eni.comExploration & ProductionClaudio Descalzi
    • 12 Strong focus on exploration strategy and execution Fast time-to-market of exploration discoveries Rapid and efficient development of project pipeline Effective reservoir management and productionoptimization activities Leading-edge technology to fight depletion of giant fields Consolidate and deploy competencies and technology Increase direct control of assets through operatorship Maintain geographical diversification Phase financial exposure in large-scale, complex projectsOrganic growth &value creationManaginguncertaintiesE&P strategic goals and drivers
    • 13Drilled wellsHSE resultsLost time injury frequency rate** n. of LTI/Mln of worked hoursCompany Contractor GlobalAvg 2007-2010 20110.660.770.730.41 0.42 0.412005 2008 20110.00 0.000.00250327437Drilled wells per yearBlow-out frequency(per thousand)
    • 14 Materiality andcost-effectiveness Short time tomarket Focus onemerging basinsWest Africa Transform margin play in Ghana, Togo,Liberia Pre-salt play in Angola, Congo, RDCNear field explorationEast Africa Gas (Mozambique) Exploit full potential of tertiaryplays in the Rovuma basinBarents Sea (Norway) Large upsideGoM (USA)Pacific gas (Indonesia and Australia) High potential in profitable gasmarketMaintaining leadership on discovered volumesand unit exploration costsDriversFontier high potential Proven basins/near fieldexploration objectives
    • 15focus on exploration: Norway - Barents sea2012-2015 work program Resources upside in the area: 500mboe 8 wells in the Barents Sea: €220mequity investmentsSynergies Havis/Skrugard hub servicing 50km radius Onshore servicesAdditional prospectivity 12 blocks for an acreage of 4,600sqkm With Statoil, maintain leadershipposition in the next roundDiscoveries 500 Mbbl of recoverable oil inSkrugard and HavisPL226PL533PL529PL201PL489PL229GoliatPL608 PL532Skrugard/HavisPL657Havis/Skrugard huboperatednot operated
    • 16Area 4MambaNorth 1Tertiaryprovengas playMambaNorth East 1MambaSouth 1focus on exploration: Mozambique – Rovuma basin2012-2015 work program Up to 8 exploration and appraisalwells 2,000 sqkm of 3D and 2,100 sqkm2D seismic €400m expected equityinvestmentsSynergies Unitization of Mamba complex withArea 1 Evaluation of additional stand-alone resources in Area 4Mamba discovery Gas in place estimate at 30 Tcf High gas quality Expected rate in productionconfiguration up to 140 mmsfcdper well
    • 172012-2015 work program Resources upside: ~500 Mboe 24 wells: €300m equity investmentsSynergies Indonesia: Jangkrik hub Australia: upstream developmentand synergies with LNG facilitiesAdditional prospectivity 16,000 sqkm of new acreageadded in 2011Discoveries ~700 Mboe already discovered inAustralia and Indonesiaeni assets New acreageBUKAT/ BULUNGANNorth GanalJANGKRIKJANGKRIK NEArguni 1NT/P68-HeronNT/48-EvansShoalfocus on exploration: Pacific Area
    • 182012-20152012-152011-14bln €5.53.6+~50%By area By typeexploration capex
    • 19* P1 + P2 + P3 + contingent resources + risked explorationbln boeBrent($/boe) 111Life index(years)502P reserves Other reserves/resources90% with first oil in productionin <8 yearsMozambique32.131.07947Total resources*2009-2011discoveriestime to market: from resources to production…
    • 20Main start-ups4-year plan start-ups: ~700 kboed @ 2015SamburskoyeYaro/YakhinskoyeUrengoskoyeALNGKizomba Sat. Ph.1West HubPerla EPJunin 5 EPJangkrikJauKutai BasinCBM FFSkrugard/HavisEast HubGreat Hadrianarea2012-2015 HubsJasmineW.Franklin Ph.2CulzeanOPL 245 FFBrass LNGKashagan EPGoliat… through identified and solid start-upsYevoSeveroBeyond 2015Perla FFJunin 5 FFMLECAFCEl MerkWafacompressionMambaSankofaGye NyameHadrianSouthKashagan Ph.2Karachaganak Ph.3
    • 21Yamal Nenets region: new gas giants Samburgskoye and Urengoskoyesanctioned in 2011 GSA signed with Gazprom Samburgskoye start up confirmed 2012SamburgskoyeUrengoskoyeSevero- ChaselskoyeYaro-YakhinskoyeSamburgskoye Production (kboed, equity)
    • 22Barents Sea: Goliat first oil developmentBarents Sea First oil development in the Barents Sea Subsea templates installation campaigncompleted in 2011 and ready for drilling FPSO delivery in 2013Production (kboed, equity)Goliat
    • 23KashaganKarachaganak Kashagan EP Construction completion andcommissioning ongoing Tranches 1&2 progress for KCP:99%, in line with commercialproduction start up within 2012 Karachaganak Previous development phasescurrently producing >100 kboedequity Agreed settlement with Republic ofKazakhstanKazakhstan Production (kboed, equity)Kazakhstan: near-term growth and significant long-term potential
    • 24Venezuela: super giants with long-term plateauJunín-5Perla Perla Gas Sales Agreement and FID for Phase1 achieved in 2011 Phase 1: construction and installation ofthree offshore platforms, 60-km pipelineto shore, onshore processing facility Junìn EP Finalizing all the major engineeringcontracts Seeking anticipated early production in2012, using synergies with PDVSAexisting facilitiesVenezuela Production (kboed, equity)
    • 25Sub-Saharan: legacy area with further growth prospects Development of Sangos, Ngoma, Cinguvufields (1,250-1,450m water depth) 16 wells (10 producers, 6 injectors) First drilling campaign: ongoing FPSO will be delivered in 1Q 2014* exploration potential excludedBlock 15/06 West Hub Production* (kboed, equity)
    • 26investment planOnshoreOffshoreDeepwaterBy typeN. Africa/M. East AmericaEurope Asia PacificCentral Asia/Russia West AfricaBy areabln €DevelopmentExplorationOtherCapex 2012-2015Mozambique44.839.1+14%1.83.65.51.73.133.7 37.6
    • 27Brent($/boe)2012/2013 2014/2015 201590 85 +2%>3%~3%CAGROrganic production growth Strong productiongrowth of over 3% ayear to 2015 adjustedfor Libya in 2011 Resilient to oil priceincreases: 2011-2015CAGR at 100$/bbl ~3% Long-term growth targetraised from ~2% to~3%our commitment: productionNew productionLibya force majeure
    • 28our commitment: valueSolid cash generation901001101202010 2015NPV 2P by areasSub-Saharan AfricaEurope & America Asia & PacificNorth AfricaCF/boe (%)Brent avg($/boe)Cash flow85 85
    • eni.comGas & PowerUmberto Vergine
    • 30European gas market: a difficult short term environment…Persisting oversupply in Europe in the near termSpot-LT price differential remains significantContinuing competitive pressureSupply Demand Weak economic situation inEurope impacting industrialclients Increased competition inpowergen from renewablesources Relatively stable demand fromresidential customers Increasing capacity fromRussia (North Stream) Availability of lower-pricedmake up gas No additional LNG capacityfrom Qatar Continued domestic productiondecrease
    • 31... gradually rebalancing in the medium termProgressive tightening in European market to 2015Further market improvement beyondAmericas Pacific BasinEurope Demand escalation inemerging markets (+89bcm) New high-costliquefaction capacity fromAustralia (+15 bcm) fullyabsorbed in the region Premium prices attractsupply from Atlanticbasin Demand recovery (+60bcm 2015vs. 2011) Domestic production decline (-17bcm) Marginal shale gas contribution Increased interconnectivity opensnew market opportunities (11new projects) North Americanproduction continues toexpand Effect of NorthAmerican exportslimited and subject toregulatory uncertainty Increasing LatinAmerican demand forspot LNGMena Increasing domesticconsumption in North Africa Qatari production at 2011 levels
    • 32Objective• Alignmentbetween enicost positionand averagecosts of supplyin the marketImplementation• Negotiation ofmarket-likeprices in long-term contractprice revisions• Improved andfasterresponsivenessto marketchanges• Reduction ofminimumvolumes,possibility toreopennegotiations ifrequired• Foundation forcompetitivepositioning inthe marketPrice FlexibilityMarketreflectivityeni strategy: building on a more competitive supply portfolio …
    • 33… to grow sales to business customers…Consolidation of leadingposition in Europe+18%7285B2B volume increase(bcm/y)• Dedicated and capillary direct salesforce to grow position in Italy and keyEuropean countries• Tailor made offers for differentsegments• Energy intensive customers Multi-country approach Flexible contractual structures Risk management services Market reflective pricing• Small and medium enterprises Specific offers to reflect marketsegmentation High quality post-sale service
    • 34... and increase exposure to the retail segmentIncreasing penetrationinto more resilientcustomer segmentsRetail customers(mln)• Larger retail presence in Italy andEurope Organic growth Selected M&A opportunities• Well-proven commercial mix Single brand identity Distinctive product portfolio Customer driven innovation Competitive cost to serve• Well-balanced sales channels Agents Teleselling iweb eni energy stores• Best In Class program ongoing Marketing & IT innovation Communication & brand awareness Customer care operations+28%9.412
    • 35gradual recovery in profitabilityMarketing Supply cost improvement Benefit from retroactiverenegotiations in 2012 Impact of retail tariff revisionin Italy Development of integratedtrading activitiesInternational transport Resilient profitability despitedisposal of European pipelinesPro-forma adj. EBITDASnamMarketing & International transport2.6Bln €
    • eni.comFinancial OutlookAlessandro Bernini, CFO
    • 37Snam deconsolidation: a resulting strong capital structurebln €Net debteni D/E 0.46xSnam deconsolidation 0.30xIncluding cash-in <0.20xbln €eni65.3Snam15.4Capital employedeni ROACE 9.8%Snam deconsolidation 10.4%Including cash-in 11.4%Mkt value ofeni’s stake6.9* data at year-end 2011eni9.9Snam11.2Mkt valueof eni’sstake6.9
    • 382012-2015 capex: supporting stronger growth59.644.77.22.82.52.30.56.7-1.153.339.17.52.92.41.4E&PG&PR&MSaipemOthers2011-14capex planForexeffectE&P Others 2012-15capex planMozambiqueOPL245JangkrikSkrugard/HavisSnamEurope/NorthAmericaLatamFarEastNorthAfrica/MESubSaharaRussia/CaspianUncom-mitedCommittedbln €SnamSnam
    • 39selective capex planG&P R&M Chemicals Focus on projects for integration, efficiency and energy saving Targeted investment to boost organic growth in existing/newprofitable businessesInternationaltransport0.1Snam6.2Refining1.9Marketing0.9Marketing0.9Total €7.2 bln Total €2.8 bln Total €1.6 blnGreenchemical0.2Newinitiatives0.8Stay inbusiness0.4Efficiency0.2
    • 40efficiency programme Almost €600m of savings achieved in 2011 4-year target increased by €600m, mainly inR&M and ChemicalsE&P 11%G&P 6%R&M 11%Chemicals20%E&C3%Corporate& others49%2004-05achievements2006-11achievements2012-15targetbln €2004-05 2006-11 2004-150.33.11.65.0
    • 41increasing cash flow to support investments and reduce debt* @ 90$/bl in 2012-13; 85$/bl in 2014-15 Organic cash-flow morethan covers capexrequirements Net debt to equity <40%within the plan period atconstant perimeter Additional cash-inflowsexpected from disposals Impact of Snamdeconsolidation on freecash-flow broadly neutral2012-15 cash flow*bln €
    • 42a sustainable dividend policy 2011: dividend +4% in line with our policy Dividend policy of growth in line with inflationsustainable throughout the four-year planConfirmeddividendpolicy
    • eni.comClosing remarksPaolo Scaroni, CEO
    • 44entering a new growth phaseE&PA decade of faster, sustainable growth• Raised production targets to 2015 and beyond• Increased exploration effort in highly promising basinsG&PConsolidation of leading position in Europe• Improved competitiveness of supply• Medium-term recovery leveraging on secular gas demand growthR&MChemRestructuring potential• Continuous focus on efficiencies• Profit enhancement through integration, innovation and portfolio refocusingPotential value creation from disposals