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  • 1. eni.comUpstream SeminarLondon, 11 October 2012
  • 2. eni.comExploration & ProductionClaudio Descalzi
  • 3. 3industry main challenges Access to new material plays Increasing complexityFinding resources Harsher environments, more complex projects Capacity constraints Delayed project executionDeveloping resources High decline rates Increasing maintenance costsManaging resources Operational risk Relationship with host countriesPreserving resources
  • 4. 4eni strategy and positioningIndustry challenges eni positioningExceptional exploration success Strategic approach Concentrated on material conventional playsStrong project pipeline Limited delays on some projects Improving project delivery capacityIndustry-leading low decline rate Leading performance on reservoir management Operational efficiencyRisk management and eni model Low-risk portfolio eni modelFinding resourcesDeveloping resourcesManaging resourcesPreserving resources
  • 5. 5Industry challenges eni positioningExceptional exploration success Strategic approach Concentrated on material conventional playsFinding resourceseni strategy and positioningStrong project pipeline Limited delays on some projects Improving project delivery capacityIndustry-leading low decline rate Leading performance on reservoir management Operational efficiencyRisk management and eni model Low-risk portfolio eni modelDeveloping resourcesManaging resourcesPreserving resources
  • 6. 6our approach: we have strengthened process and competences...Objectives Materiality and cost-effectiveness Short time to market Coverage of emergingbasins and themesProcess Centralized control of opportunities rankingand selection Leverage on geological knowledge of coreplays Long-term strategic studies of new basins 60% of investments on proven basins andnear fields Specific process and function to accelerateappraisals Investment in people andtechnologies Retain key knowledge owners Investment in specific R&D
  • 7. 7012345672008 2009 2010 2011 2012 2008-12... delivering increasingly strong results...Per year Cumulative Norway - Barents Ghana MozambiqueEmerging basinsCore areas/fasttime to market Egypt West Africa Pakistan Italy IndonesiaCumulativeproductionExploration performance Main discoveriesBboe> 6 BboeAverage UEC 2008-12YTD: 1.3 $/boe* ** 2012 discoveries reflect only those included in H1
  • 8. 8... and underpinning our exploration strategyMain exploration targets Togo, Kenya West Africa pre-salt Unconventional Egypt Tunisia Pakistan Angola offshore Pacific gas GoM East Africa (Rovumabasin) Barents Sea(Norway andRussia) Gulf of Guineatransform marginHighMaterialityEmergingbasins andthemesTime tomarket2012-2015 target: 1 Bboe of discoveries per year at 2 $/boe
  • 9. 9key exploration plays 2012-2015Barents Sea – Mesozoic/Paleozoic West Africa Pre-saltWest Africa Post-salt Cretaceous LibyaTertiary play Niger DeltaAustralia – IndonesiaJPDA/Timor- Jurassic PlayCretaceous Turbidites ASIA – PlioMiocene PlaysGoM – Plio/Miocene & Wilcox Clastic Play Nile Delta UnconventionalCreta and JurassicWestern Deserteni’s portfolio – key exploration plays 2012-15Luca Bertelli, EVP ExplorationEast Africa Tertiary Turbitides
  • 10. 10Barents Sea: emerging high-materiality basin Norway: with Statoil,leadership position in the area 500 Mbbl recoverable inSkrugard and Havis, upside of500 Mboe (100%) 5 wells in 2013 Russia: implementingstrategic agreement withRosneft Strategic agreement signed inApril 2012 Implementation agreements wellunder way 2D-3D seismic acquisition in2013-2014 Start of drilling in 2015OperatedNot operatedPL226PL533SalinaPL529BonnaPL201PL489PL229GoliatPL608 PL532Skrugard/HavisPL657 ShtokmanCentral Barents15,700 Km2Fedinsky38,100 Km2
  • 11. 11East Africa: leading player in an emerging province… Early moveradvantage Innnovativegeological models Leadership interms of discoveredresources and netacreageDiscovered equity resources (MMBoe) – Top 10Eni Ophir Energy Total Statoil Camac Petronas Anadarko BG Petrobras SasolEni Anadarko ENH Mitsui &CoBG Statoil OphirEnergyVideocon BharatPetroleumKOGASNet acreage (km2) – Top 10Source: WoodMacSource: WoodMac05001,0001,5002,0002,5003,0003,500010,00020,00030,00040,00050,000
  • 12. 12… leveraging on our geological knowledge of Rovuma Basin Tertiary turbiditic plays Mamba complex discovery Gas in place estimate up to 70Tcf Unique characteristics: Exceptional thickness (up to500m) Pressure communication andhydraulic continuity along largedistances Extremely productive wells Rapid drilling and completionUnprecedented size and characteristics
  • 13. 13West Africa pre-salt: consolidating position in a new play Onshore and shallow waters Congo – M’Boundi nearfield: 3 to 4additional wells by end 2012 Congo – Marine XII: drilling in 2013 Angola – Cabinda: drilling to start in 2013 RDC: finalizing 2 prospects to be drilled Deepwater – Angola block 35 3D seismic in progress Drilling to start in 2014 AngolaGabon CongoDRCPre-salt acreage
  • 14. 14Pacific gas: high materiality with short time to marketExpansion in Pacific region Indonesia Expansion of the Jangkrik plioceneplay New acreage in successful playnear existing LNG infrastructures Australia Significant equity entry intopotential LNG-style projects China Expansion in the Deep Water PearlRiver Mouth Basin Vietnam New country with highprospectivityeni assets New acreageBukat/BulungganJangkrikJangkrik NEArguni 1NT/P68-HeronNT/48-Evans ShoalNorth Ganal &East Sepinggan3 licenses30/27
  • 15. 15a targeted unconventional portfolio Low unitcosts Developedinfrastructure Strong gasmarket Synergieswith existingoperations~ 1 Bboe of prospective resourcesShale gas in USA Barnett shalesongoing operationsEast Europe Poland - three vertical wellsdrilled; started frackingcampaign in 2H 2012 Ukraine: finalized agreementfor the exploration of 9blocks in the Lviv BasinChina shale gas Negotiations to access shale gas blocksin Sichuan and Guangxi BasinsIndonesia Sanga Sanga CBM Appraisal & pilot project, gas to Bontang LNGplant. In 2013 drilling of additional clusters.Pakistan Regional study completed.Shale gas prospective areasidentifiedUnconventional oilin Sub-SaharanAfrica Tar sands Congo:exploration inTchikatanga and amining pilot project in2H 2012Shale & tight gasin North Africa Algeria/Tunisia -ongoing acquisitionof geologicalinformation. Activitieswill start in 2013.
  • 16. 16Industry challenges eni positioningDeveloping resourceseni strategy and positioningStrong project pipeline Limited delays on some projects Improving project delivery capacityExceptional exploration success Strategic approach Concentrated on material conventional playsIndustry-leading low decline rate Leading performance on reservoir management Operational efficiencyRisk management and eni model Low-risk portfolio eni modelFinding resourcesManaging resourcesPreserving resources
  • 17. 17DelayBudgetIndustry performance~20%Industry average* Capacity constraints inconstruction/shipyards Longer delivery time of criticalequipment Lack of flexibility in EPC turn-keymodels Lack of performance duringcommissioning Extensive FEED review requiredafter sanctionproject delivery: industry challenges* IPA 2011Project execution performanceMarket capacity
  • 18. 18main 2012-2015 start-upseni positioning: a robust and diversified portfolio Overall portfolio ofmore than 120projects over the next10 years 40 projects with 2Preserves >300 Mboe Limited impact fromsome project delays >1.3 Mboe/d of newproduction at 2022
  • 19. 19 Stronger construction & commissioningdepartment More effective supervision of project sites Improved constructability and construction planning Modularisation of major supplies Long-term frame agreementsMarketcapacity Insourcing of core competences Improved quality and control of front-endengineering Strengthened project execution skills and capability New project management model Strengthened project management capabilities Reinforced monitoring on both operated and nonoperated projectsProjectexecutionperformance1,200 new hires in 4 yearsnew initiatives to further strengthen our position
  • 20. 20Barents SeaYamalFar EastKazakhstanSub-SaharanVenezuelaNorth Africa2012-2022: update on main hubsPerlaJuninSankofaGye NyameOPL 245Brass LNGWest HubEast HubALNGKizomba Sat.MambaJangkrikJauKutei BasinHeron BlackwoodEvans ShoalMLECAFCEL MerkWafa compr.Bahr Essalam Ph. 2GoliatSkrugardHavisKashagan EPKarachaganak ph 3SamburskoyeYaro/YakhinskoyeUrengoskoyeYevo Severo7 major growth hubs
  • 21. 21Roberto Casula, EVP Africa & Middle EastSub-SaharanNorth AfricaThe backbone of our production and growthAfricaSankofaGye NyameOPL 245Brass LNGWest HubEast HubALNGKizomba Sat.MambaMLECAFCEL MerkWafa compr.Bahr Essalam Ph. 2
  • 22. 22 Equity production at 240 kboe/d inFY2012 Successful restart of all fieldsfollowing crisis Strong additional potential: 4 exploration licenses (Area A, B,D, and Area 186 Kufra) Accelerated development ofdiscovered resources onshore andoffshoreLibyaNorth Africa: legacy area with development potential
  • 23. 23 Excellent track record oncontinuity of operations Successful near field explorationat Emry Deep: 40 Mboe of oil (100%) 12 kboe/d production (100%) Well cost <6M$ Time to market 4 monthsEgyptNorth Africa: legacy area with development potential
  • 24. 24North Africa: legacy area with development potential MLE: Wells delivered and centralprocessing facility progress >98% Export pipelines completed Start up by the end of 2012 CAFC: Early gas start up by the end of2012Algeria
  • 25. 25West Africa: core growth area with major projectsAngola Block 15/06 West Hub Progress 13% Drilling and FPSO refurbishmentongoing Start-up: 2H 2014 Block 15/06 East Hub: FID in 2013
  • 26. 26West Africa: core growth area with major projects OPL 245: giant deepwaterdevelopment of two oil discoveries(Etan and Zabazaba) eni operator with 50% interest Reserves: >500Mboe (100%) Early production from Etandiscovery with start-up within2016 Early production peak: 40 kboed(100%)Nigeria
  • 27. 27West Africa: core growth area with major projectsCongo M’Boundi field production on budgetat 44 kboe/d (100%) Reservoir stimulation projectsongoing Water injection project functioningat 120 kbw/d; system capacitybeing upgraded to 200 kbw/d Gas compression/injection projectto be completed by year end
  • 28. 28East Africa: the Mozambique developmentPembaBeiraMaputoMambadiscovery60 km Gas in place: up to 70 TCF Fast track approach Integrated developmenttask force since earlyexploration phases Performed engineeringstudies while progressingreservoir data collection Flexible organizationshaped for fast responseto project evolution
  • 29. 29
  • 30. 30US$ /mmbtu LNG marketing Highly competitivebreakeven price Partnerships in theFar East for LNGexport Regional gasmonetization Experience indomestic powergeneration Ongoing studies forapplication of CNGMozambique: marketing and gas monetizationBreak-even price of future LNG projectsMozambiqueCumulative production MMcf/dNew model of global integrated gas hub
  • 31. 31 Production growthensured by astrong pipeline ofprojects Upside potentialfrom furtherexploration Africa to underpinEni long-termproduction growthProduction growth2000 20222011*Building on a strong history and competitive position* Libya adjusted for force majeur (180 kboe/d)Africa: continuing long-term production growth~3%5%
  • 32. 32Far EastKazakhstanJangkrikJauKutei BasinCBMHeron BlackwoodEvans ShoalKashagan EPKarachaganak ph 3Legacy super giants and presence in fast-growing regionsKazakhstan and Far EastMassimo Mondazzi, EVP Central Asia, Far East & Pacific
  • 33. 33 Huge potential 1.3 Bboe produced up to end of2011 Remaining 100% reservesestimated at about 5 Bboe World-class performances Running costs well below theindustry benchmarks Phased future developmentupdate on main hubs in Kazakhstan: Karachaganak and …Karachanganak
  • 34. 34… Kashagan EPKashagan Progress to start up at 99.8% Commissioning and pre-start upactivities ongoing Tranche 1 onshore and A islandexpected to be handed over toproduction operator by December Start-up expected before thecontractual obligations Equity capex up to 30 June 2012:~ 6.9 B$
  • 35. 3535
  • 36. 3636
  • 37. 3737
  • 38. 3838
  • 39. 3939
  • 40. 40 Over 1.5bn boe of equity riskedpotential, mainly operated Growing expectations fromexisting and new licensesRapid assessmentHigh potential• Fast drilling program• Estimated unit exploration costbelow 1 $/boe50%33%17%Resource potential bycountryTiming of resourceassessment33,0%50,0%17,0%AustraliaIndonesiaVietnam17,0%12,0%31,0%40,0%Within 6monthsWithin 12monthsWithin 24monthsLonger than24 monthsFar East: fast track appraisal of prospects
  • 41. 41 Kitan (Australia) Start up in 3.5 years Peak production (100%) >40 kbbl/d >60% increase of 2P reserves Near fields to be appraisedproven fast track development record: floating offshore…Kitan
  • 42. 42…and conventional near field Pakistan Material near field conventionalopportunities (280 Mboe) Average time to market: 6months Tight gas: additional short termopportunityPakistan
  • 43. 43continuing our positive track record on future projectsWD@FPU120mWD@Subsea500mProduction FlowlinesUmbilicalsJangkrik Barge FPUCondensate ExportGas ExportJangkrik Jangkrik NEGas & CondensatesExport to shore Jangkrik (Indonesia) Commercial discoveries in 2011 and2012 FID expected in 2013;start up in 2016 Peak production (100%): >80kbbl/d Access to high LNG pricesJangkrik
  • 44. 44Far East: rapid production growth Production growth fromexisting discoveriesca.10% a year Production growthincluding riskedexploration potential ca.17% a yearUpdated production growth>201510%17%Existing production/discoveriesMature exploration activityRisked exploration potential>2020>2010CAGR050100150200250>2010 >2020
  • 45. 45Barents SeaYamalVenezuelaPerlaJuninGoliatSkrugardHavisSamburskoyeYaro/YakhinskoyeUrengoskoyeYevo Severo9 projects contributing 600 kboed to 2022 productionBarents, Yamal and Venezuela – Claudio Descalzi
  • 46. 46 High-potential oil hub in OECDcountry Goliat - execution update Progress 47% Drilling activities to start inOctober FPSO sailaway at year end2013/1Q 2014 Start up: 3Q 2014 Contribution to 2015 equityproduction ca. 60 kboed Equity capex 2.9bn euro >700 Mboe resources inBarents hub (100%)operatednot operatedPL226PL533SalinaPL529BonnaPL201PL489PL229GoliatPL608 PL532Skrugard/HavisPL657Barents Sea
  • 47. 47
  • 48. 48Yamal PeninsulaSamburgskoyeYaro-YakhinskoyeSevero-ChaselskoyeUrengoskoye Giant arctic development withcompetitive cost position Samburgskoye – execution update Start-up achieved ahead of schedule in April2012 Contribution to 2015 production ~30 kboed Equity capex 900m euro Urengoyskoye ph.1 - execution update Drilling and processing plant early worksstarted Start-up expected in 3Q 2014 Contribution to 2015 production ~50 kboed Equity capex 650m euro ~1.6 Bboe equity 2P reserves
  • 49. 49Venezuela – Perla & Junin 5 Conventional gas and heavy oil giantprojects, with phased developments Execution update – Perla Phase 1 Progress 22% Commerciality published anddevelopment plan approved in August First gas expected by mid-2014 Equity 2015 production ~25 kboed Equity capex ~400m euro Execution update – Junin 5 Phase 1 Drilling started Main engineering contracts for facilitiesawarded Phase 1 plateau (75 kboed) by 1Q 2015 Equity 2015 production ~30 kboed Equity capex ~800m euro ~1.2 Bboe equity 2P reservesPerlaJunin - 5
  • 50. 50Industry challenges eni positioningeni strategy and positioningIndustry-leading low decline rate Leading performance on reservoir management Operational efficiencyManaging resourcesExceptional exploration success Strategic approach Concentrated on material conventional playsStrong project pipeline Limited delays on some projects Improving project delivery capacityRisk management and eni model Low-risk portfolio eni modelFinding resourcesDeveloping resourcesPreserving resources
  • 51. 51a dynamic field management approach… Strong central functions Production and maintenance Reservoir management Specific performanceenhancement programs Production checks Well-bore reviews4% average decline rate, 43% average recovery factor on oil fieldsProducerProducerInjectorBu-Attifeloil water
  • 52. 52… and high operational efficiency Direct control ofmaintenance activities Shutdown programreview KPI analysis for in-depth surveillance Detailed programs tominimize down-time Enhanced plantavailability2011 20123.5 2.72011 20128.8 9.52012 budget 2012 forecast6327%%kboedShutdown optimizationOperated downtimeNon operated downtime
  • 53. 53Industry challenges eni positioningeni strategy and positioningPreserving resourcesRisk management and eni model Low-risk portfolio eni modelFinding resourcesDeveloping resourcesManaging resourcesExceptional exploration success Strategic approach Concentrated on material conventional playsStrong project pipeline Limited delays on some projects Improving project delivery capacityIndustry-leading low decline rate Leading performance on reservoir management Operational efficiency
  • 54. 54Producing fields Balanced portfolio with littleexposure to high risk projects 88% onshore or shallow water 12% deepwater exposure47%44%41%46%12%10%2012 2015Onshore Offshore Conv. Offshore DWWells integrity2272933072252000-04 2005-09 2010-11 2012avg drilled wells per yearblow-out frequency (per thousand)YTD August20120.880.00 0.00 0.00mitigating operational risk
  • 55. 55the six legs of the eni modelBusiness & technology developmentOil & gas integrationAccess to energy & infrastructureTo be localLocal development(agriculture, health, education)International partnership
  • 56. 56Production growthkboe/d2021Price scenario: 90$/bl 2012-13; 85$/bbl 2014-15; +2%/year afterwards~3%20152011 2015Russia and CaspianSub-Saharan AfricaNorth Africa and MELatin AmericaEurope and North AmericaFar East>3% adj2015Long termoptionality Kashagan FF Mozambique FF Russian BarentsSea West AfricaPre-salt andtransform margin Unconventionalsexploration, development, optimization: a decade of growth...2022
  • 57. 5705101520253006-08 07-09 08-10 09-11 12-15Ediscovery cost development cost F&D costF&D costsUSD/boe28.8 28.919.318.814.512.716.015.219.218.110.79.74.12.81.8… through efficient, organic exploration and development
  • 58. 58operating costs: continuing to lead the industry* RDS n.a.** XOM, CVX, COP, BP, RDS, TOT, eni. Company data and Wood MackenzieBenchmark group**eni5,86,47,33,004,005,006,007,008,009,0010,0011,0008-10 09-11 12-15EOPEX per barrel*(USD/boe)0510ItalyOECDProduction (kboed)OtherAfrica FSU0 500 1,000 1,500North AfricaFocus on 20115.86.47.311.0010.009.008.007.006.005.004.003.00
  • 59. 59increased capital efficiencyE&P capital employed0%5%10%15%20%25%30%0%20%40%60%80%100%120%2010 2011 2012 2013 2014 2015Under construction Capital in serviceROACE on capital in service ROACE
  • 60. 60901001101202010 2015Brent($/boe)Cash flow/boe85 85@ 90$/bbl130@115$/bblincreased value per barrel Increased proportion ofoil vs gas Higher production inlower tax rate areas Good capture ratiosupported by strongcontractual structureData rebased at 100
  • 61. 61eni strategy and positioningIndustry challenges eni positioningFinding resourcesDeveloping resourcesManaging resourcesPreserving resourcesExceptional exploration success Strategic approach Concentrated on material conventional playsStrong project pipeline Limited delays on some projects Improving project delivery capacityIndustry-leading low decline rate Leading performance on reservoir management Operational efficiencyRisk management and eni model Low-risk portfolio eni model