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    eni's upstream model eni's upstream model Presentation Transcript

    • eni’s upstream model –eni s upstream modelthe key to business development13 May 2013Claudio Descalzieni.com
    • exploration & production: a global presence2012: 43 countries2007: 34 countries2005: 30 countries2012 production 1,701 kboed55% 22% 14% 7% 2%Africa Europe Asia America Others2
    • e&p: we apply our unique model throughout the businessResourceaccess andde-riskingProjectdevelopmentAssetmanagementBusiness ActivitiesBeing local:unique modelfor localrelationshipseni model forresourceaccesslocal contentand trainingdeveloping powerfor localcommunitieslocal communityi t tDeployment ofin-houseinnovativeapproach toexplorationin-sourcingprojectmanagement toinvestmentstrongcompetences onreservoireapproachin housecompetencesexploration management tobetter controlproject deliverydesign andreservoirmanagement andmaintenanceimprovingDistinctiveasset selectionMitigation ofcosts andoperating riskdevelopmentfocused on riskpreventionsafety, assetintegrity andcost efficiencyfocus onconventionalrigorousscreening3
    • e&p: we apply our unique model throughout the businessResourceaccess andde-riskingProjectdevelopmentAssetmanagementBusiness ActivitiesBeing local:unique modelfor localrelationshipseni model forresourceaccesslocal contentand trainingdeveloping powerfor localcommunitieslocal communityi t tDeployment ofin-houseinnovativeapproach toexplorationin-sourcingprojectmanagement toinvestmentstrongcompetences onreservoireapproachin housecompetencesexploration management tobetter controlproject deliverydesign andreservoirmanagement andmaintenanceimprovingDistinctiveasset selectionMitigation ofcosts andoperating riskdevelopmentfocused on riskpreventionsafety, assetintegrity andcost efficiencyfocus onconventionalrigorousscreening4
    • access to resources through strategic partnership2012 productionProjects tailor-made tocountry requirementsPrepared to investwith a long-term viewStrong stakeholderengagementTunisia1961Algeria1981Libya1959Egypt1954924kboed2012 productionNigeria1962Congo1968Gabon1981/2008Ghana2009RDC2010Togo2010Kenya2012Liberia2012451490713Angola1980Mozambique2006Presence sinceExploration and ProductionExploration/ 2010304442451largest IOC in Africalargest IOC in AfricaExploration and ProductionSouth Africa2011 (MOU) 945largest IOC in Africalargest IOC in Africa
    • developing local staff and businesseslocal managers*local employees*Number Number~500%~500%59%4,6132,898 1,198200local procurement** 20122002 2012 2002 2012Africa and Asia6,650 suppliers90%98%73%, pp€10.5 bn procurementNigeria Indonesia Egypt6* Consolidated E&P subsidiaries only** Analysis based on the Country of Registration of the Legal Entity each contract has been assigned to
    • developing power for local communitiesFirst IOC to invest in powergeneration in Africa usingExisting projectsMOUs new projectsP t ti l MOU generation in Africa usingassociated gasMajor power generator: 4 plantsin Congo and Nigeria serving upto 13 million peoplePotential MOUsto 13 million people60% of Congolese electricalproduction20% of Nigerian electricalproductionNigeriaCongoMoUs for new power projects inAngolaFurther potential in MozambiqueMozambiqueAngolaaccess to energy for developmentaccess to energy for development7
    • managing assets to reduce environmental impact6030MSm3/d Flaring intensityGas flaring4050202520301015010052007 2008 2009 2010 2011 2012 2013 2014zero flaring by 2017zero flaring by 2017Nigeria Congo Libya Other countries Flaring Intensity (toe/ktoe)8
    • being local: a driver of eni’s developmentAfrica to underpin eni’sAfrica - production growthkboed3% Africa to underpin eni slong-term productiongrowthProduction growth5%3%ensured by a strongpipeline of projectsAfrican projects averageIRR >20%IRR >20%Upside potential fromfurther exploration2000 2012 2022CAGRbuilding on a strong history and competitive positionbuilding on a strong history and competitive position9
    • e&p: we apply our unique model throughout the businessResourceaccess andde-riskingProjectdevelopmentAssetmanagementBusiness ActivitiesBeing local:unique modelfor localrelationshipseni model forresourceaccesslocal contentand trainingdeveloping powerfor localcommunitieslocal communityi t tDeployment ofin-houseinnovativeapproach toexplorationin-sourcingprojectmanagement toinvestmentstrongcompetences onreservoireapproachin housecompetencesexploration management tobetter controlproject deliverydesign andreservoirmanagement andmaintenanceimprovingDistinctiveasset selectionMitigation ofcosts andoperating riskdevelopmentfocused on riskpreventionsafety, assetintegrity andcost efficiencyfocus onconventionalrigorousscreening10
    • deployment of in-house competencesexploration development asset managementLeverage on geological In-sourcing of core Strong central functionsknowledge of core playsCentralized ranking andopportunity selectioncompetencesNew projectmanagement modelfor production,maintenance, reservoirmanagementSpecific performanceFocus on near fieldexploration, fast trackappraisalsk k l dStronger construction &commissioningdepartmentd l fp penhancement programsDetailed programs tominimize down-timeRetain key knowledgeownersInvestment in specificR&DModularization of majorsupplies Direct control ofmaintenance activitiesstrong focus on training, development, knowledge managementstrong focus on training, development, knowledge management11
    • deployment of in-house competences: our resultsexploration development asset management4% decline ratebln boe kboed7.5 43% average recovery on oilfieldsExcellent efficiency inoperated assets% t d>700fromnewj t>2,0003.23.5 2.72011 2012% operateddowntimeprojects1,7012011 20129.5% non operateddowntime2012 20162008-2012 discoveries2008-2012 production8.82011 20122012 201612
    • e&p: we apply our unique model throughout the businessResourceaccess andde-riskingProjectdevelopmentAssetmanagementBusiness ActivitiesBeing local:unique modelfor localrelationshipseni model forresourceaccesslocal contentand trainingdeveloping powerfor localcommunitieslocal communityi t tDeployment ofin-houseinnovativeapproach toexplorationin-sourcingprojectmanagement toinvestmentstrongcompetences onreservoireapproachin housecompetencesexploration management tobetter controlproject deliverydesign andreservoirmanagement andmaintenanceimprovingDistinctiveasset selectionMitigation ofcosts andoperating riskdevelopmentfocused on riskpreventionsafety, assetintegrity andcost efficiencyfocus onconventionalrigorousscreening13
    • de-risking growth through the selection of conventional assetsProduction will continue to be mainlyconventionalProducing fieldsEquityproduction2012 2016conventional85% of production onshore orshallow water in 2016Deepwater exposure 15% in 2016onshore shallow water deepwaterOperatorshipsIncreased operatorship:Competences & know howEnforcement of technical & HSEstandardsEquityproductionstandardsCost efficiencyOrganizational unit dedicated tonon-operated assets2012 2016operated non operated14
    • major drilling incidents - prevention strategycritical* wells operated ‘dual barrier’ policy ‘vendors feedbackProcesses Technology Supply chainby eniheadquarter real timeoperations monitoringon site eni’s supervisorsalways in placeportfolio of proprietaryand distinctivetechnologies toprocess’ captured in thebidding evaluationphaseHSE performance basedcritical wells operatedby othersheadquarter preventiveapproval of wellprogramsenhance safety &performancecontract strategy forwell constructionConventional vs Lean Profilep gOperations follow-upNotify rejection to theoperator in case of non-compliance with eni’standards36”28”2828””17 1/217 1/2””VolumeObjectiveto improve safety andwell performance ofour suppliersstandards23”17 1/2”14 3/414 3/4””Reduction: 56%15* HP/HT, deep – ultra deep water and environmentally sensitive areas
    • managing assets to mitigate oil-spill risks: new technologiesCube TM Clean Seaeni patented system for capturing asubsea oil spillinnovative underwater robotic systemfor asset integrity, environmentalmonitoring16
    • solutions for sensitive areas: Goliat in the Barents SeaTechnologyNew concept rounded FPSOpUse of new monitoring technologyNew and improved oil-spill equipmentAdditional safety featuresMechanical recovery and dispersionfrom standby and supply vesselsNew operational concepts for coastlinep pStakeholder role in response planDesigned to minimise impactU f h i i i COUse of onshore power to minimise CO2emissionsReinjection of produced water17
    • case study: bunkering in NigeriaNumber of eventsoil spills due to sabotage/bunkering35040045020025030005010015002000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012online reporting of all spill events by 2014online reporting of all spill events by 201418
    • bunkering in Nigeria: the environmental impact of illegalrefineries19
    • eni actions: suspending productionSwamp areaBayelsa bunkering lossesreached 60% of totalproductionunsustainable level both onpersonal safety and damageto environmentMarch 22nd: eni declaredforce majeure closing theactivities in the Swamp Area,in Bayelsa StateSabotage and illegal bunkering spillsOperational control20
    • oil spill prevention & remediationFibre-optic distributed acousticsensingIncreased collaboration withlocal authorities andtechnologies asset integritySatellite imagingChemicals and plugging materialsPressure monitoring systemscommunitiesInvestments in asset integrityModified Carry Agreement tosustain planned projectssustain planned projectsUpgrading oil spill managementremediationUpgrading oil spill managementsystem for rapid reactionEffective remediation and clean-up certified against internationalstandardsCLOUGHCREEKTEBIDABAstandardsPilot test of alternativeremediation technology ready tobe finalized by 2013)))))))((((((21
    • operational results: safety and efficiency1.76 1.84 1.82293 307 320TRIR ZERO blow-outssafety0.510.321.040.880.910.730 0 0AVG 2007-2011 2012 2013 Jan./Apr.company contractor global2005-09 2010-11 2012Blow-out frequency(per thousand)avg drilled operatedwells per yearefficieny7 9681012Industry-leading low opexFocus on conventional assetsefficieny$/bbl5.86.4 6.87.9024608-10 09-11 10-12 13-16EFocus on conventional assetsSafety processes part of efficientmanagement systems22Benchmark group** eni* n. of Total Recordable Incidents/Mln of worked hours** XOM, CVX, COP, BP, RDS, TOT, eni. Company data and Wood Mackenzie
    • conclusions: the benefits of our distinctive approachResourceaccess andde-riskingProjectdevelopmentAssetmanagementBusiness ActivitiesBeing local:unique modelfor localrelationships2013-2016 strategic planDeployment ofin-houseeapproach1bn boe/yr of new discoveriesUnit exploration cost of $2/boein housecompetencesDistinctiveProved Reserves Replacement Ratio >130%Production growth CAGR >4% to 2016 and >3% to 2022Mitigation ofcosts andoperating riskInternal Rate of Return of new projects around 20%23Strategic plan price deck: 90$bbl 2013-2016 +2%/year afterwards
    • BACK UP13 May 201313 May 2013eni.com
    • eni model: focus on compliance and controlTop Level CommitmentLegal Support UnitTop Level CommitmentBoard of DirectorsTop ExecutivesAd ti d I l t tiLegal Support UnitAnti-bribery & corruption legal focal pointRisk assessment approachConstant updates of the programmeReports to the control bodiesManagement System Guidelines compulsory to allEni and subsidiaries in Italy and abroadBest effort made to apply the model to nonoperated Joint VenturesDue Diligence on partnersAdoption and ImplementationManagement System Guidelines approvedby the Board of DirectorsAnti-Bribery & Corruption ProgrammeDue Diligence on partnersby the Board of DirectorsComprehensive rules and proceduresReinforcing “Zero Tolerance”Disciplinary measures to employees andsuppliersBest in class anti-bribery policies andprocessesExtensive compulsory training: e-learningand workshops25