Eni for Development


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Our position paper on fight against energy poverty, local content, ecosystem protection, and much more. This is one of the three documents that constitute the Sustainability Reporting System adopted by eni in 2011, together with Annual report and Sustainability Performance

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Eni for Development

  1. 1. MissionWe are a major integrated energy company,committed to growth in the activitiesof finding, producing, transporting, transformingand marketing oil and gas. Eni men and womenhave a passion for challenges, continuousimprovement, excellence and particularlyvalue people, the environment and integrity.
  2. 2. CEO’smessageEnergy is a crucial issue of our use of their resources bringingtime. We are aware that the key energy to people, businessesto operate, for a major energy and communities. We providecompany like eni, is in the ability investment, expertise andto build a trustworthy relationship technologies to make energywith the society, represented by reliable and sustainable, a realour people and customers, the driving force for social andhosting communities and the economic development.Countries we work with. We make eni for development tells how wea pact with them, undertaking to work to foster and enhance thisoffer just as many opportunities commitment. It endorses eni’sas we were offered. support to the United NationsBeing an integrated company able resolution proclaiming 2012 theto operate to the best in every Year of Sustainable Energy for All.condition helps us to understandthe needs of the diverse contextsand meet their expectations,looking for solutions to localproblems as part of a globalsustainable development.We want to contribute to finding Paolo Scaronianswers through our strategies, Chief Executive Officerour operating models, and our and General Managerdialogue capacity that has alwaysbeen a hallmark for eni, workingalongside institutions andinternational organisations.The best way for us to proveour commitment is to supportCountries in making the best
  3. 3. II eni for developmentIII Integration, excellence and citizenship for sustainable development eni is an integrated company that goals for sustainable development operates throughout the energy in operational contexts, and sector, employing about 80,000 represent a competitive advantage people in 79 Countries all over the on today’s energy market. eni’s world. The secrets behind eni’s activities on the global market success include a company culture often involve areas with a very and business model that allow it low Human Development Index. to operate in an integrated way, eni is committed to supporting constantly striving for excellence, social and economic development establishing long-term relationships in oil-producing Countries, to help with oil-producing Countries. These mitigate inequalities, especially factors make it possible to reach regarding the access to energy. The operational context and scenario of Despite the relative abundance Opportunities for International of global energy resources, Oil Companies (IOCs) are further the energy industry are characterised over 80% of traditional oil and reduced by growing competition by an increasing complexity due to the natural gas reserves are directly controlled by major oil-producing from domestic companies in oil-consuming Countries, that growing competition from National Oil Countries. These Countries tend aim at increasing the supply of to need just technical services hydrocarbons to support local Companies (NOCs) in oil-producing and – and to a greater extent as time economic development. Openings oil-consuming Countries, in addition passes – in order to enhance the technical and managerial skills of for investment in traditional oil-producing Countries are to the uncertainties of future market local companies, thus becoming characterised by high costs and autonomous in the research and risks, or alternatively very small developments. production of hydrocarbons. margins.
  4. 4. HUMAN DEVELOPMENTINDEX Development IndexThe Human <0.3 0.3-0.5 0.5-0.7 0.7-0.8 >0.8 n.a. The Human Development Index (HDI) was introduced by the economist Mahbub ul Haq in the late 80’s, and used for the first time in 1990 in the first Human Development Report by the United Nations Development Programme. The HDI provides an overall indication of development in a territory, considering more than just the economic dimension. The HDI combines three dimensions: health (in terms of life expectancy at birth), education (measured as the average expected and actual years of schooling) and the standard of living (calculated on the basis of the income index). Source UNDP International Oil Companies should eni started out as an “oil with a joint participation in the company without oil” in the development of the upstreamexperiment with less-traditional approaches era of decolonisation. On these business. Essentially, a model two weakness factors Enrico was created in which eni sat onrather than the usual exploration-production Mattei, the founder, engaged his the same side of the table as the logic, encouraging cooperation with intuition and vision, adopting oil-producing Countries rather than a new relationship approach on the opposite side, creating a oil-producing Countries and their with oil-producing Countries. greater wealth of resources for The “Mattei Formula” envisaged these Countries than for eni itself.communities. Strategic partnerships should the profit sharing through the eni quickly earned itself a include joint projects for the economic and establishment of a joint venture reputation as a reliable partner, with local energy companies for able to perform a technical social development of the Country. eni’s the exploration and development cooperation for development. of hydrocarbons, with the oil- Thanks to this approach eni was history, business culture, and operating producing Countries’ share rising welcomed in many Countries, models represent competitive advantages from 50% to 75%, an exchange becoming the first international of technology and know-how, operator in Africa. and opportunities to aim for. One of eni’s distinctive features, eni’s business portfolio is more electricity, as well as engineering structured and integrated than and construction, represents an useful for developing collaboration other IOCs. important competitive advantage. The integration of activities eni’s integrated approach enables with oil-producing Countries, is having throughout the sector provides a greater relationship flexibility operations and skills integrated in the a wealth of expertise, which with oil-producing Countries; represents an important key to moreover, eni offers solutions entire energy business sector. success. The reputation as a major that better fit their technological operator in the transportation and and infrastructural needs distribution of natural gas, and helping the local communities’ the generation and marketing of economic growth.
  5. 5. IV eni for developmentV The approach includes the approach to technological skills The operational excellence and the integrated development of energy Master and safety for all the Country’s Plans and the management of available resources. approach aligned with a culture of cooperation projects even in sectors not This allows new opportunities for with the producing Countries enable eni strictly related to energy. investment to be undertaken Another distinctive feature is in “difficult” contexts and to operate with the responsibility of an eni’s ability to pursue excellence frontier areas, where safety and in all of its operations, which is environmental protection are International Oil Company whilst having the demonstrated by its trustworthy considered of critical importance. ability to invest in the Country’s future as a National Oil Company. This is the “dual flag” approach, which causes eni to assume the citizenship of the territories in which it operates. The roots of eni’s success are pursued with eni’s support. One realise the best outcome Through the “dual flag” largely located in the way flag shows the six-legged dog, from the available resources, the company conducts its the other is the host Country’s. with particular attention to approach, eni shows its business. This approach is well eni has the skills, technology territories, population and ability to take part in the represented by the image known and experience of an consequently enterprises. From to everyone who meets eni international energy company. the dual nature of a local and design and implementation of travelling the world: two flags It has the sensibility needed global company, eni has the waving together both on plant to understand the context; the ability to dialogue with local, sustainable development for and operational fields, as well credibility that comes from national and international Countries. as in villages and towns where making long-term investments institutions on the major large and small projects are in the Countries; the will to sustainable development issues. eni has always encouraged Companies; on the contrary, The integrated approach, the operational relationships with producing Countries based on dialogue and having developed a distinctive approach in its relations with excellence, and a fair citizenship represent cooperation to promote local social oil-producing Countries, the core features of a business model that and economic development. eni businesses, people and local is not subject to the competitive communities, eni has a competitive is historically and strategically aimed at environment based on new balances between International advantage, as proven by the recent cooperation agreements with sustainable development as a distinctive Oil Companies and National Oil Angola and Congo. element for value creation. eni operates in many developing continent characterised by these Countries, eni is actively Countries. The activities and deep-rooted economic and social involved in the exploration initiatives promoted locally as inequality. and utilisation of all available part of cooperation agreements, Many Countries in which eni energy resources, as well as in have a strong impact on the operates, especially in Sub- the construction of the related economy and communities. In Saharan Africa, have huge infrastructures, thus also particular, eni is the leading energy resources but very low faciliting the access to energy international producer of human development indexes for a greater segment of the hydrocarbons in Africa, a and limited access to energy. In population.
  6. 6. POVERTY LINE than 1.25 dollars a dayPeople living on less Energy is a prerequisite forVIVERE CON MENO DI UN DOLLARO AL GIORNO >60% 50-60% 40-50% 30-40% 20-30% 10-20% <10% n.a. development, and the unfair access to energy in the world is one of the greatest global imbalances. Supplying energy to populations who currently have a scarce access to it, gives eni the ability to indirectly, but efficiently, pursue the Millennium Goals defined bySource CIA World Fact Book 2008 the United Nations.eni’s activities, regulated by exports and the development encouraging and consolidating multilateral and internationalcooperation agreements drawn of local markets, creating the Company’s presence in organisations, governments,up with oil-producing Countries opportunities for people and an oil-producing Country is other oil companies and privateto deal with and solve urgent local businesses, promoting associated with the long- organisations to define andissues relevant to social and projects to improve local living term benefits the Company’s develop collective actions toeconomic development in the conditions, from health to activities can supply in improve business efficiencyCountry, aim to exploit all education, to the protection of terms of economic and social and transparency, with positiveavailable energy resources, the environment for present development of the Country. effects for both Internationalcreating functional energy and future generations. eni is also committed at a Oil Companies and oil-infrastructures for both One of the levers for global level to cooperating with producing Countries.eni’s mission focuses on its passion for operating strategies.challenges, continuous improvement Local and global development issuesand excellence as the Company’s guiding are wide-ranging and complex, thereforeprinciples, attributing a fundamental everyone needs to play a role. eni’srole to the integrity of people and the contribution is a positive example ofenvironment. eni wishes to create long- how an international energy companyterm value and be a trustworthy citizen can operate in today’s world, creatingof the world. This is why the Company benefits for both the productionis fully committed to sustainable activities, the Countries and thedevelopment, with its distinctive communities where it operates.
  7. 7. Thematic studies show how the energy industry can foster economic and social development, providing concrete examples of eni’s contribution. Access to energy deals with the production of electricity using associated gas recovery systems, and describes how eni’s initiatives in Congo and Nigeria help fight energy poverty. Natural gas as a driving force for development describes how eni’s infrastructures in the local market aimed at export and transport have helped support social and economic development in the oil-producing Country. Towards renewable energy page 02 describes how eni’s integrated business model helps promote efficient gas-fired plants and renewables, to guarantee an energy mix consistent with the goals of international bodies. page 10 Safe management of all resources including difficult ones illustrates how eni aims to exploit all the available energy resources in the Country, adopting the highest page 15 safety standards and using the best available technology to protect the environment, people and communities. page 19 Opportunities for local people and businesses describes how eni creates opportunities in terms of working quality, use of materials and services in the page 26 oil-producing Country, in order to promote social and economic development. It also focuses on the “Chimica Verde” project started in Italy. page 31 Local development and the Millennium Goals links the development projects for local communities, in particular those promoting the right to health and page 40 education, with the pursuit of the UN Millennium Development Goals. The value enhancement of natural resources page 44describes how eni mitigates the potential negative impacts of its activities, while safeguarding biodiversity and ecosystems, and promotes the correct use of water resources in the Countries in which it operates. page 08 Transparency and the commitment to fight against corruption page 24 portrays eni’s initiatives in preventing corruption and promoting transparency in relations with local institutions and communities. page 38 Contributions from page 50 Raffaella Centurelli International Energy Agency, Giuseppe Soda Bocconi School of Management, Glenn Denning The Earth Institute, Columbia University help put the scope of the problems into context, perhaps sending the most important message:having to operate in a difficult, extensive and complex context does not prevent a company from making a contribution – however small – to sustainable development.The document ends with: the Blueprint of eni’s business model, reporting principles and criteria, auditors’ report.
  8. 8. 2 eni for development3 Access to energy eni is actively committed to fighting gas-fired plants. In some areas it is not energy poverty, one of the biggest possible to use the associated gas in obstacles to social and economic the local market or to exploit it and so development in most of the Countries it would be flared, wasting a valuable it operates in. energy resource. Thanks to its integrated business Through these initiatives eni model, built on operational excellence pursues multiple objectives from the and designed to promote development consolidation of relations with in the Countries, eni designs and oil-producing Countries to the optimal implements production and distribution use of available energy resources, to the programmes for electricity produced in reduction of greenhouse gas emissions.
  9. 9. The availability of energy is a prerequisite for development and the different distribution of energy consumption worldwide represents both a barrier to growth and a cause of inequality between nations. Supplying energy to people who currently lack access allows eni to indirectly but effectively pursue the UN Millennium Development Goals. Energy consumption is heavily 110 thousand barrels of oil are eni hydrocarbons concentrated in certain produced per day, respectively production geographical areas: around 2 50% and 62% of the population in relation to billion people consume over 50% has no access to electricity due energy access The chart shows eni of the total annual world energy to the lack of power generation hydrocarbons production production, and more than 1.4 plants and distribution (percentage of total production) 35% billion people totally lack access infrastructures (source IEA). 29% divided per the percentage to electricity (source IEA). This These Countries, like others in 30% of people with no access to is a particularly serious problem Sub-Saharan Africa, represent the 25% electricity. 22% of eni’s production in Africa, where eni operates in paradox of being major energy 22% 20% 23% comes from Countries where 20% 16 Countries and is the leading producers while suffering from 50-80% of the population has no 15% International Oil Company energy poverty. access to electricity. 52% of its in terms of hydrocarbons This situation is worsened by 10% production comes from Countries 5% production, with approximately the fact that the gas associated 5% where no data is available on a million barrels of oil per day. with oil production is often 1% access to electricity, but for which eni is also the leading producer burnt, due to a lack of suitable the Human Development Index 50-80 30-50 5-30 <5 MEDIUM HDI HIGH HDI of electricity within cooperation infrastructures, with a significant (HDI) is medium or high. programmes and development in negative impact on both the local oil-producing Countries. and the global environment. In Nigeria and in the Republic This practice is known as gasL’ACCESSO ALL’ENERGIA ELETTRICA of Congo, where about 172 and flaring. population (%) with no access to electricityNEL MONDO 50-80% 30-50% 5-30% <5% n.a. L’ACCESSO ALL’ENERGIA ELETTRICA NEL MONDO 50-80% 30-50% 5-30% <5% n.a. Population with no access to electricity About 1.4 billion people, the 20% of the world’s population, have no access to electricity. 85% of them live in rural areas. The regions with the lowest electrification rates are South East Asia and Sub-Saharan Africa. Source IEA 2009
  10. 10. 4 eni for development5 Gas flaring worldwide billion m3 180 160 In 2010 about 134 billion cubic metres of associated gas were 140 flared. 120 The recovery of the 15 billion Russia cubic metres of gas flared in 100 Nigeria Nigeria would boost the local Iran Iraq natural gas market by 50%. 80 Algeria If the 37 billion cubic metres Angola of gas flared in Africa were 60 Kazakhstan Libya used to generate electricity in 40 Saudi Arabia high-efficiency plants, it would Venezuela produce 200 TWh - about 40% 20 Next 10 Rest of world of the electricity demand for the 0 whole African continent. 2006 2007 2008 2009 2010 Source World Bank eni is currently responsible for around 4.6% eni has reduced flaring by over maximum productivity. If used in 30% in the last three years, natural gas liquefaction plants, of the gas flared, and is therefore committed and is investing in new energy the associated gas increases infrastructures in order to bring export capacity and consolidates to finding a solution to this problem through this figure up to 80% by 2014. the producer’s position on the the recovery or reuse of the associated gas Thanks to this programme, when international market. If the gas is fully implemented, around 5 billion used to supply the local market (flaring down). That allows the most to be cubic metres of gas per year will be and produce electricity, the recovered and made available for population of the oil-producing made of natural resources and generates markets in oil-producing Countries. Country gains access to a stable several benefits for the Countries involved. The associated gas, if reinjected and continuous supply of reliable into the system, allows for a more and safe energy - a catalyst efficient management of the for social and, consequently, TH TION D WI DUC resevoir, and grants the Country economic development. CIATENS PRO ASSO BO HYDROCARBONS GASDROCAR HY PRODUCTION GHG IDED AVO ISSIONS EM Exportation Gas sent to LNG terminals by ship HG HG ED G ED G VOIDSIONS A IS VOIDSIONS A IS EM EM Electricity Gas sent to turbogas stations produced Re-injected gas POPULATION REACHED GHG IDED AVO ISSIONS EM Gas sent to the local market Gas distributed
  11. 11. eni was the first International Oil Company Thanks to the expertise acquired stations have shown excellent in various segments of the energy results in 2010 (with a primary in Africa to invest in power generation using sector and to the advanced energy consumption to electricity technologies available, eni produced ratio equal to 0.167 toe/ associated gas, becoming the leading producer of invests in the construction of kWheq) and low greenhouse gas electricity among the other energy companies. power stations having the best emissions (407g CO2 eq/kWheq energy performance. eni power in 2010). eni has implemented major electricity In Nigeria only 47% of the projects are a formidable driving population, about 155 million force for social and economicgeneration projects in Nigeria and Congo. These inhabitants, have access to development in both Countries, electricity; in Congo, this figure two of the poorest in terms ofprojects meet, respectively, about 20% and 60% drops to 27% of the population, per capita income in the world, of the electricity production in Countries with about 4 million inhabitants ranked by the International (source IEA). Monetary Fund, respectively, high levels of energy poverty. eni electricity generation 142nd and 183rd place. Percentage of eni associated gas used in Nigeria 100% In the late 1990’s, eni 90% implemented the Zero Gas Flaring 80% project in the Niger Delta, with the 70% aim of preventing associated gas from hydrocarbons production 60% being burnt off into the 50% atmosphere. By the year 2000 eni was already using 50% of the 40% gas produced. In 2010 this figure 30% reached 78%. By 2014, with the implementation of further projects 20% for the reduction of gas flaring, 10% eni expects to be able to use 95% 0% of the associated gas. 2000 2010 2014 In 2005, eni built a 480 MW Africa to be registered as a technology in thermal power activities. The Memorandum combined cycle power plant in Kyoto Protocol’s CDM (Clean generation. The technology and of Understanding envisages Kwale Okpai (Nigeria). The plant Development Mechanism) fuel utilised permit in fact the electrification projects for the uses the associated gas from activity in 2006. greatest efficiency in fossil fuel- distribution of electricity to over production activities, which The Okpai Plant utilises fired power generation plants, 50 communities. 40% of the would otherwise be flared. combined cycle technology to reducing pollutant emissions per work has so far been completed. The plant supplies electricity minimise heat emissions. The kilowatt-hour. In order to make 16 electrification projects were to Power Holding Company of sustainability of electricity and the contribution to energy access implemented in the Rivers, Nigeria, which distributes it steam production is guaranteed more effective in the Country, Bayelsa and Delta states in 2010, to the end users. This was the by the combination of natural eni signed a Memorandum of for a total investment of over a second flaring down project gas and cogeneration combined Understanding with the local million euro in access to energy worldwide and the first in cycle technology, the latest communities affected by its initiatives.
  12. 12. 6 eni for development7 Based on its experience in with the assistance of eni and low voltage transmission Nigeria, in 2007 eni signed a technicians. network. The aim of this cooperation agreement with Utilising associated gas means partnership is to increase the Republic of Congo. The over $ 50 million a year savings the availability of energy for agreement envisages the in oil imports for the Country. the capital and to also supply construction of power stations The electricity produced is electricity to many smaller cities that utilise the associated gas. distributed to the Pointe-Noire currently without access. As part of the agreement an area, supplying approximately integrated project for the 700,000 people. Compared to exploitation of associated the Congo average per capita gas produced in the onshore consumption of 137 KWh per M’Boundi oilfield was initiated. year, in the Pointe-Noire area The gas is collected and piped consumption rose to 350 KWh Based on its positive experiences through a 55 km pipeline to in 2009 and to 462 KWh in in Nigeria and Congo, eni drew up Djeno, where it is used to fuel 2010. eni also plays a key two power stations: the Centrale advisory role to the Country agreements with other Countries Electrique de Djeno with a for the construction and current power output of 50 MW, management of electricity such as Mozambique, Ghana, Togo and the new Centrale Electrique transmission infrastructures. and Angola, characterised by low du Congo, with a current power eni entered into a partnership output of 300 MW (planned for with local institutions, energy access rates, to replicate a future output of 450 MW). public companies and an 80% of the Centrale Electrique Italian electricity company, this model of associated gas use. du Congo is controlled by the promoting collaboration for the Republic of Congo and 20% development and modernisation by eni. The plant is operated of the Congolese high, medium On January 28th, 2011, at the LEAD companies in fighting launch of the LEAD Platform – energy poverty by developing a Global Compact programme synergies between companies eni actively participates in for companies that excel in from different sectors and international working groups, the field of sustainability – in Davos, Paolo Scaroni international organisations. The first Collective Action promoting research activities and announced that eni would proposal was presented at promote a Collective Action the Global Compact Week in collective actions to guarantee against energy poverty. In Copenhagen. eni also takes energy access. the presence of UN Secretary General Ban Ki Moon, Paolo part in a World Business Council for Sustainable Development Scaroni described the objective initiative on energy access, of the Collective Action: involve launched on April 6th, 2011.
  13. 13. 8 eni for development9 A candlelit dinner is romantic, a candlelit surgical operation is not “A candlelit dinner in a smart who live in New York consume, How can energy contribute to dining room seems to be in one year, the same quantity achieve the existing Millennium romantic. A candlelit surgical of energy – 40TWh – as the Goals? operation in a poor rural village about 800 million people in Sub- As we said earlier, access to is not.” Saharan Africa. energy is not explicitly among Today 1.4 billion people - more the MDGs, but it is a prerequisite Raffaella Centurelli than 20% of the global population What is the connection for many of the UN existing International Energy Agency - has no access to electricity, between access to energy and goals. Access to energy surely whereas more than 2.7 billion development? contributes to the first MDG: people use traditional biomasses Access to modern forms of eliminate extreme poverty and to cook, breathing substances energy is a prerequisite for social hunger. It supports economic that are very harmful to their and economic development. development, giving more health: every year the number It is crucial to supply drinking efficient and safer means to of premature deaths from water and deliver basic hygienic guarantee basic needs and respiratory disease related with services. It brings benefits in undertake productive activities. these practices is higher than the terms of development, giving Energy allows electric pumps number of deaths from malaria people the possibility to rely to bring water up from wells, and tuberculosis. According to on lighting, air-conditioning, providing drinking water and our estimates, if governments do cooking, automation of daily making agriculture more not take any strong actions, the operations, transport, and productive. Access to modern, problem will persist and get worse telecommunication services. clean cooking methods would in the long term. In 2030 people In spite of the evident guarantee the progress of the without electricity will be a little relation between energy and goals related to infant mortality less than today – 1.2 billion, but development, unfortunately the and pregnant women’s health the number of users of traditional Millennium Development Goals (MDGs 4, 5, 6): according to the biomasses will increase to 2.8 (MDG) make no explicit reference World Heath Organisation the billion, recording more premature to energy and contain neither polluting substances emitted by deaths than HIV. quantity objectives nor specific traditional stoves are responsible indicators to allow Governments today for the premature death of In which areas of the world is the and the international community more than 1.45 million people. problem especially serious? to monitor the progress towards In Regions where the use of More than 85% of the people universal access to modern biomasses prevails, women and without modern forms of energy. Recently, however, children are generally in charge electricity live in the rural areas of positive steps forward have of collecting fuel, an activity Sub-Saharan Africa and South- been taken: the Advisory Group that demands time and fatigue. East Asia. The bigger problem is on Energy and Climate Change Providing cooking instruments, in Sub-Saharan Africa, where only at the UN asked for a goal to communication technologies 31% of the population has access be adopted on this issue by and, even more simply, lighting to electricity, being the lowest 2030 and the United Nations and electricity, will contribute to percentage in the world. Just has declared 2012 the “Year of MDGs 2 and 3, donating time to think that the 20 million people sustainable energy for all”. women and children, supporting
  14. 14. schooling and allowing women to to electricity a total increment additional investment to achieve on fiscal budgets. Today, thesedevelop their potential. Finally, of electricity production of universal energy access. Countries face difficult choicesuniversal access to modern approximately 950 TWh by 2030 with reference to resourceenergy will contribute to MDG is needed. To generate this extra What do you think is the biggest allocation. Among the various7: guarantee environmental energy we need to increment challenge facing the issue of development needs, climatesustainability. Abandoning the the productive capacity by 250 energy and poverty? change is often considered as aunsustainable use of firewood GW, both through generation The need for relatively high long term problem versus morewould relieve pressure on with the electrical mains and investments is neither the only urgent priorities and problems.the environment, avoiding through “off grid” solutions. nor the biggest barrier. The We have estimated that universaldeforestation and soil erosion. These decentralised solutions recognition of the urgency of access to electricity would have aCleaner energy would decrease play a central role for rural areas this issue by the international modest impact on energy-relatedgreenhouse gas emissions, and will represent the majority community and national CO2 emissions and on energyreducing climate change. of investments in the period of Governments, together with a demand. Emissions would only consideration. long-term political commitment, increase by 0.8% in 2030 - thatThe IEA has published a study are the real “condition sine qua is, 2% of the current emissionswhere they estimate the costs Do you think these investments non”. Giving the priority to the of the OECD Countries. And oilnecessary to face the issue of will actually be made? issue of energy access as a key demand would grow less than 1%universal access to modern forms Investments to guarantee factor for development is a first if compared with the demand levelof energy by 2030. What are the universal access to modern step. We will need the commitment expected in 2030. This proves thatmain results? energy services by 2030 seem of the international community, energy access and climate changeBringing electricity to 1.2 billion very high and so far they have the definition of national goals are two challenges that can bepeople by 2030 means a total been lower than the real needs. supported by specific plans, fought and solved together.investment of 700 billion dollars However, it is necessary to see monitoring and an appropriatebetween 2010 and 2030, i.e. things under the correct light. The financial, technological and What are your next steps?33 billion dollars every year. To investments that are necessary institutional framework. In our opinion it is crucial toguarantee universal access to for the next twenty years would identify the best way to find andclean modern forms of cooking for be 36 billion dollars a year, an What is the link between energy manage the necessary funds to2.8 billion people an investment amount that only accounts for access and another big challenge: provide energy access to thoseof 2.6 billion dollars a year is 0.05% of the annual global GDP. In climate change? living in poverty conditions. Weneeded: therefore, 36 billion 2009 an amount ten times higher Climate change is a global problem are working on a special editiondollars a year would be needed was spent on subsidies for fossil and therefore requires global of the World Energy Outlookto achieve both results by 2030. fuels and the costs to guarantee solutions. Poor Countries are 2011 that will present a newThe majority of investments for energy access in the ten biggest certainly not among the major architecture to finance universalelectrification must take place gas and oil exporting Countries of causes of climate change, but access to modern energy forms.in Sub-Saharan Africa and in the Sub-Saharan Africa is 0.4% of the their populations are suffering We will present our conclusionsdeveloping regions of Asia. cumulative oil and gas revenues the most severe effects of it. during a summit that will be held of Governments up to 2030 (WEO Moreover, in developing Countries by the Norwegian GovernmentWhat are the requisites in your 2008). We have calculated that that import oil, volatility and price in October 2011 in Oslo. We hopescenario of universal access to the addition of 0.3 cents of a increases have amplified the to make the issue of energy andmodern energy services? dollar to the current rates of the problem of energy access and poverty the first item on theTo guarantee universal access OECD Countries could finance the imposed an additional burden international agenda.
  15. 15. 10 eni for development11 Natural gas as a driving force for development eni has long sought to use the for the Country’s growth. opportunities presented by natural gas With its initiatives in the natural gas both as a driving force for the social and sector, eni has already contributed to economic development of the Countries the development of important Countries, it operates in, as well as an economical especially in North Africa. The company is energy solution with low emissions also committed to the research on a new for the future. frontier of unconventional or “difficult” eni develops infrastructure for the gas, when produced in a safe and production and transport of gas both for environmentally friendly way, to support export, as well as for local consumption, energy availability and independence in providing an essential source of energy new operating Countries.
  16. 16. eni’s history, from the first well discovered With 97 billion cubic metres of Country’s energy security. natural gas sold in 2010, eni is The natural gas produced inin Italy in 1944 to the building of major the largest operator in Europe, 2010 made up 44% of eni’s where it owns or holds the total hydrocarbons production.gas transport infrastructures in transport rights of the most A large part of the natural gasRussia, Holland, Algeria and Libya, has extensive and integrated network production took place in Africa, of gas pipelines with multiple the continent contributed 47% ofbeen defined by a preference for the inlet and storage points. The the total production. Local gas volume of gas transported in consumption is growing in Africadevelopment of natural gas. Italy in 2010 was 83 billion cubic compared to export volumes, metres, satisfying 80% of national accounting for approximately 42% demand and contributing to the of production in 2010.In order to gain access and contribute to eni gas productionthe development of natural gas markets in 350,000 Kboethe Countries where it operates, eni relies 300,000on its own business model based on an AFRICAintegrated approach, distinguishing skills, 250,000experience acquired in operating, sales and 200,000 ASIAmid-downstream techniques and the dual AMERICAflag approach. These characteristics allow the 150,000company to plan and implement integrated OTHER AREAS EUROPE 100,000energy development plans together with theproducing Country. 50,000 0 2008 2009 2010The implemented energy combined cycle electricitydevelopment plans include generation plants, offering theactivities such as: construction of best performance in terms of eni use of gaslong-distance gas transport and efficiency and emission factors. produced in Africa in 2010distribution pipelines; design and Egypt and Tunisia are significant 42%construction of liquefaction and examples of how the support Local Marketregasification plants, that employ provided by the creation ofthe best available technologies a local natural gas marketfor safety and environmental can aid economic and social 49%protection; construction of development. Export 9% Self Consumption
  17. 17. 12 eni for development13 Egypt is a Country where eni boasts a historic presence: eni began operating there in 1955 and today is the largest International Oil Company active in the Country, with a production of about 600,000 barrels per day, 230,000 of these are eni’s share. Extracted hydrocarbons come has an indirect shareholding several Egyptian electric power companies in shared projects from five large fields, in which in the LNG plant at Damietta, stations, providing an energy in the Mediterranean basin eni has the operatorship. 60% with an annual capacity of 5.1 saving of over 20% (in terms and in eni’s activities in Gabon of the production, equal to 8.2 million tons of liquefied natural of natural gas non-consumed) and Iraq. billion cubic metres per year, is gas equivalent to approximately and important environmental The agreement will enable eni represented by natural gas. 7.6 billion cubic metres of gas benefits. The improved to acquire transport rights eni has promoted and developed per year, the largest single train efficiency of the power stations to the Arab Gas Pipeline, the natural gas production to in the world. will also reduce greenhouse gas infrastructure that allows the satisfy the growing demand In addition, as a part of the emissions, helping protect the African Country to export gas to within the Country and has collaboration agreement environment and combat global Jordan, Syria and Lebanon. The contributed financially and with the Egyptian Natural climate change. aim is to create in Egypt a gas in operational terms to the Gas Holding Company Another example of how centre of strategic importance construction of infrastructure (EGAS) and the Egyptian eni operates to enhance for the entire Mediterranean for the export and liquefaction Electricity Holding Company Egypt’s development is the basin, extending the Arab Gas of natural gas (LNG), allowing (EEHC), eni contributes to collaboration agreement signed Pipeline to connect it with other the Country to generate the application of advanced with the Country, that will show transport systems managed significant revenues. Indeed eni production technologies to the involvement of two state by eni. Natural gas has been the main driver of economic Gas consumption and GDP in development in Egypt which, Egypt since the 1950s, has risen GDP Per capita gas consumption sharply in world rankings both Billion m3 Billion of 2000 USD using PPPs 0.6 400 in terms of per capita GDP (despite having a population 0.5 350 of 77 million) and human 300 development, and is no longer 0.4 250 considered a developing 0.3 200 Country. 150 0.2 100 0.1 50 0 0 1971 1974 1977 1980 1983 1986 1989 1992 1995 1998 2001 2004 2007
  18. 18. Tunisia is another North African underwater pipeline belonging Gaz has increased the availability an overall length of 11,624 km: Country, in which eni’s long- to the TransMediterranean of natural gas in the Country. 2,066 for transport and 9,558 for term presence has contributed Pipeline Company (TMPC), In 2009 the network reached distribution. to a process of progressive which connects Tunisia with development (STEG data). 2010 Sicily. The main purpose of was the fiftieth anniversary of this pipeline is to transport the SITEP company, which is gas from Algeria to Italy. The The availability of Algerian gas in Tunisia now completely nationalised transport system is made up reached 44% of the Country’s total gas but was once held by eni. of two lines, each about 370 SITEP manages a field on the kilometres in length (the first consumption in 2009. This gas, together border between Tunisia and has been operating since 1983 Algeria, El Borma, which still and the second since 1994). In with the gas produced locally, fuels fourteen produces oil and gas, and is 2009 the transport system was electric power stations. Today almost 94% of one of the longest living fields expanded by the construction in the world. Thanks to the of two new compression Tunisia’s electrical power is generated using agreements made between stations (there are now five in eni and Tunisia in 1977, and total) and the expansion of the natural gas. subsequently in 1991, a major existing stations. gas transport system was The construction of the TTPC built, managed by the Trans system made a substantial Tunisian Pipeline Company contribution to the industrial In Tunisia more than 550 industrial the supply of natural gas. There (TTPC). The gas pipelines development of Tunisia, which companies operating in different are also approximately 500,000 cross Tunisia, from the border has a limited quantity of both sectors (25% in textiles, 24% in “low pressure” gas customers in with Algeria (Oued Saf-Saf) offshore and onshore natural gas. food, 16% in the manufacture of the service sector, including 321 up to the Mediterranean Infrastructure built alongside building materials, 10% in chemical hotels that support the Country’s coast (Cap Bon), where the the TTPC pipelines by the Société industries and 25% in other tourism industry and 314 service TTPC system connects to the Tunisienne de l’Electricité et du sectors) were created thanks to companies. Gas consumption and GDP in Tunisia GDP Per capita gas consumption Billion m3 Billion of 2000 USD using PPPs 0.5 1000.45 90 0.4 800.35 70 0.3 600.25 50 0.2 400.15 30 0.1 200.05 10 0 0 1971 1974 1977 1980 1983 1986 1989 1992 1995 1998 2001 2004 2007
  19. 19. 14 eni for development15 The expected growth in natural gas demand makes traditional to a reduction of natural gas prices and provide many parts of production insufficient in the medium- and long-term. Therefore, the world with direct or indirect access to energy. The first effects it will be necessary to invest in research into unconventional or of this phenomenon have been “difficult” resources, always ensuring high safety and environmental initially noticed in the United States, where the extraction of standards. unconventional natural gas was pioneered and today represents On a global scale, most of the This has increasingly shifted control of hydrocarbons reserves the largest base of supply. In the natural gas produced up to now reserves and production towards between the International Oil United States shale gas has had a has been easy to extract with National Oil Companies. Companies, which have the dramatic effect on the dynamics no particular technological The tendency to start production required technologies, and the of gas prices, contributing to barriers to overcome in terms of of unconventional or “difficult” National Oil Companies. halving them in less than three discovering and developing fields. resources will rebalance the The increased supply will lead years. eni considers the development of unconventional gas as an opportunity to Natural gas is a sustainable driver open new markets or reinforce its presence for development also thanks to its in markets where it already operates, competitive pricing and low environmental as well as a driver for local social and impact in terms of emissions. economic development. Europe’s CO 2 emissions production capacity using reduction targets could be wind power generation (net of As a result, in 2010 eni reached an in Eastern Europe and currently achieved by converting any incentives on the energy agreement to become the operator importing approximately 70% of its coal-fired power stations into produced). The use of gas for of three licences in the Baltic gas needs, research activities on natural gas power stations. electrical power also means Basin in Poland, an area with high shale gas represent an opportunity With an overall investment for lower emissions of SO 2, potential for shale gas. For Poland, to an energy independent future for of about one third of what it NO x and particulate than other being one of the largest economies the Country. would cost to achieve this fossil fuels.
  20. 20. Towards renewableenergyPlacing an emphasis on its integrated low greenhouse gas emission fuelapproach and proven track record and generates an easily-modulatedfor innovation, eni is also aiming energy supply. Natural gas and solarfor growth in the renewable energy power are ideal allies in guaranteeinggeneration sector. Even though the energy mix of the futurerenewable sources are not yet everywhere.competitive compared to conventional In order to develop the solar powerenergy sources, they represent an of the future, which will be the trueimportant factor for the future of turning point in the energy production,energy generation. eni is looking into advanced researcheni believes that natural gas is the alongside qualified partners, with thebest available energy source during goal of finding innovative products tothis transitional phase towards improve efficiency, method of userenewable energy sources: it is a and costs.
  21. 21. 16 eni for development17 Electricity from renewable sources often has no competitive production costs compared to fossil fuels, especially to natural gas, one of the most abundant and cost-effective resources available today and in the foreseeable future. Today technologies for the for the distribution network. Electricity production cost exploitation of renewable The production of electricity 10-20 €/kWh cost range for residential resources are not able to satisfy from renewable sources is, use (OECD, 2009) the primary energy demand, however, a very important 4-20 €/kWh cost range for industrial (OECD, 2009) not only because they are factor for the future of energy, expensive, but also because because it will contribute to Photovoltaic solar they do not permit a significant effectively fighting climate production of electricity and, most change through an energy mix Thermodynamic solar of the times, do not guarantee with lower greenhouse gas sufficient production stability emissions. Biomass Wind Natural gas and renewable sources are the Nuclear ideal allies to guarantee the energy mix Coal of the future. Both are sustainable from the environmental viewpoint and are a Gas good combination in terms of production 0 10 20 €/kWh 30 40 costs, given the high competitiveness of eni data processing on CERA, NRC-National Academy of Engineering USA, electricity production from natural gas. NEA-IEA, EIA, IRP, EPIA, CBO One of the limits of renewable power variations. In turn, such a eni’s integrated approach is one of the sources is its intermittent capacity depends on the technical generation, which contrasts characteristics of the system and bases for the development of energy with the needs of the electrical in general corresponds to 20-25% distribution network of of rotative power in the network. production from renewable sources, and in continuously maintaining a To balance the intermittence of particular solar energy. dynamic balance between renewable sources, an easily power level and user demands. modulated resource is necessary. one of the International Oil eni’s capacity of operating Connecting intermittent power This resource should be able to Companies with the highest efficiently using innovative generators to the network means rapidly complement production, production share of natural technological solutions along introducing sources of power when production from renewable gas (amounting to 44% of its the entire energy supply chain disturbance which, over time, sources drops and to reduce or hydrocarbons production). is a point of strength also for force the network control system stop production, when renewable The leadership among the corporate growth in the field to continually compensate. sources reach production peaks. International Oil Companies in the of electricity generation from As a result, although combined Natural gas can play this role and production of natural gas in Africa renewable sources. in the best way possible, the can do it with low CO2 emission and the relevant production of The dual flag culture will favour weight of renewable sources in levels. electricity are an excellent starting the study of the best energy mix the energy mix is limited by the eni has achieved the leadership in point to guarantee a balanced for the producing or consuming reaction capacity of the network natural gas sales in Europe (18% energy mix that includes not only Country, having eni as a reliable control system to unscheduled of the market), and represents gas, but also renewable sources. partner also for future energies.
  22. 22. In this transition towards higher competitiveness of the renewable source system, the strength of eni’s business model finds its application in several small-sized projects that were carried out in different Countries. The goal was to provide electricity to isolated areas that are difficult to reach with the electrical network and to increase efficiency of business, thus contributing to the economic and social development of local communities. In such a scenario eni uses the modules to electrify regulation knowledge of Enipower to produce stations along a gas pipeline and market photovoltaic panels in the Algerian desert, (with a maximum productive offshore platforms in Egypt, capacity in Italy of 30 MWp/year) telecommunication systems in and install turn-key photovoltaic Nigeria, water pumping systems in systems. Nigeria and Congo, electrification Some projects carried out by of remote villages in Nigeria and eni include: use of photovoltaic Mongolia. eni believes that among renewable energies solar energy has the greatest potential to In 2010, with a five-year plan, The collaboration between the partnership gave life to the eni and MIT is based on aintegrate traditional sources. For this reason it “Solar Frontiers Center” (SFC) with multidisciplinary approach to is investing more than 106 million euro in the headquarters at the MIT in Boston, research that creates significant a centre entirely dedicated technological and cultural next four years. The most significant initiative to research and development synergies. In particular, the activities on solar energy with meeting between researchers is a partnership with the Massachusetts common spaces and labs. from MIT and from the “Research Institute of Technology (MIT) to investigate eni-MIT Solar Frontiers Center centre for non-conventional is proof of eni’s commitment energies – Istituto Eni Donegani” technologies for large-scale exploitation of to the development of stimulates the exchange of pioneering initiatives in the different experiences and solar energy. field of renewable energies, knowledge through the pursuit of and in particular solar energy. common goals.
  23. 23. 18 eni for development19 The collaboration with MIT has originated some records, such as the realisation of the first solar cell printed on paper, the ultra flexible solar cell, as well as the development of solar cells that imitate the photosynthesis process. Ultra flexible solar cells are paper, as if it were a printed hydrogen - through fission. Such composed of a thin layer of document. The innovative a device imitates the natural photoactive material coated technique used to make the photosynthesis process of plants with a transparent plastic sheet device is the same technique but with a substantial difference: and can be folded without used to produce cells on flexible the artificial leaf photosynthesis breakage or performance drops. plastic substrates. A “paper process will be far more efficient This permits irregular surfaces cell” can be the latest low-cost than the natural process. to be covered without the solution for applications in which The alliance with the MIT also need for bulky metal supports longevity is not necessarily develops through the MIT Energy and structures, reducing the the key aspect, where instead Initiative (MITEI), with eni as a coverage weight to cover, for the important aspect is fast Founding Member: the goal is example, tensile structures, installation speed and easy to study solutions to transform greenhouses, noise barriers transportation. the existing energy system and along roads, boats and a The goal of the study on artificial meet future challenges through series of indoor applications in photosynthesis is to make the analysis of every aspect buildings. low-cost efficient devices to of energy supply, demand, In solar cells on paper, the reduce the water molecule to environmental protection and photoactive device is made on its components - oxygen and safety. Expected development of photovoltaic solar energy in the world GW 3,500 3,000 The total electricity production on greenhouse gas reduction from photovoltaic panels in 2010 policies, production costs and 2,500 equalled the energy demand of technology developments. 2,000 ten Countries in Central Africa According to the forecasted (Angola, Benin, Botswana, scenarios, in 2020 photovoltaic 1,500 Cameroon, Congo, Ivory Coast, panels are expected to cover 1,000 Eritrea, Ethiopia, Gabon and almost 4% of the total energy Ghana). demand and rise to 11.3% (21.2% 500 In the future the share of according to the most optimistic 0 produced electricity will depend forecast) by 2050. 2000 2010 2020 2030 2040 2050 Source EPIA 2010
  24. 24. Safe managementof all resourcesincluding difficultonesThe world’s growing energy demand to guarantee high safety andand the need to balance the energy environmental standards.reserve portfolio are determining a eni’s ability in operating, based onthrust towards the exploitation of enhancing technological innovation,non-conventional resources or of organisation and knowledge, allowsconventional resources in difficult areas. challenging business goals to beeni intends to make the most of the achieved in full compliance withnew business opportunities in non- the requirements of the producingconventional sectors and in difficult Countries and guaranteeing high safetyareas, adopting the best technologies and environmental standards.