UBS European Conference


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UBS European Conference

  1. 1. UBS European ConferenceUBS European ConferenceAlessandro Bernini, CFOLondon, 13 November
  2. 2. eni: structuresubsidiariesdivisionsRefining &MarketingExploration &ProductionGas & PowerS i Ch i lS43%Saipem ChemicalsSnamUnder disposal,Deconsolidatedin Q4 20122
  3. 3. eni after Snam: increased financial flexibility…bln €Net debt 2011 (PF)eni residualdebt €10.430% sold toCDP for €3.55% sold to theCompleted disposal of 35% of Snamfor €4.1 bnSnam debt fully deconsolidated by YEMarket valueremainingstake €2.3market for €0.6Snam debt fully deconsolidated by YE2012Flexibility on disposal of the remainingSnam20% stakeFurther potential debt reduction fromGalp disposalDebt €11.2p p3
  4. 4. … and greater upstream exposureNet capital employed YE2011Net capital employed YE 2011(PF ex Snam)G&PE&P ~48%~ 31% G&PE&P ~58%~ 17%E&CR&M/Chem.~9%~13%E&CR&M/Chem.~11%~16%eniE&C ~9%€88bn eniE&C ~11%€73bn• E&P capital employed rising to 58% from 48%• eni ROACE proforma rising to 10.4% from 9.9%4
  5. 5. E&P: excellent track record of exploration success78Emerging basinsCore areas/fasttime to marketExploration performance Main discoveriesBboe567Norway - BarentsGhanaMozambiqueEgyptWest AfricaPakistanItaly~ 7 Bboe234ItalyIndonesia012008 2009 2010 2011 2012 2008-12* *Per year Cumulative CumulativeproductionAverage UEC 2008-12YTD: 1.3 $/boeAverage UEC 2008-12YTD: 1.3 $/boe5* 2012 includes the first 9 months
  6. 6. focus on exploration: Mozambique – Rovuma basinArea 46 wells drilled to dateMambaMambaNorth East 2MambaNorth 16 wells drilled to dateTotal potential of thediscoveries up to 70 TcfFurther exploration andi l ll l dTertiaryNorth East 1 appraisal wells plannedOngoing unitization talksfor gas in straddling levelsStandalone resourcesCoral 1MambaSouth 1 MambaSouth 2yprovengas play>20TcfSimple, highly productivewells; efficient upstreamdevelopmentdevelopment6
  7. 7. Project pipeline: our main hubs…Barents SeaYamalSamburskoye/ khi kKazakhstanNorth AfricaGoliatSkrugardHavisKashagan EPKarachaganak ph 3Yaro/YakhinskoyeUrengoskoyeYevo SeveroFar EastSub-SaharanVenezuelaPerlaJuninJangkrikJauKutei BasinMLECAFCEL MerkWafa compr.Bahr Essalam Ph. 2g pSankofaGye NyameOPL 245Brass LNGWest HubEast HubALNGKizomba Sat.Kutei BasinCBMMambaRobust and diversified pipeline of giant projectsRobust and diversified pipeline of giant projects7p p g p jp p g p j
  8. 8. .. drive a decade of organic growthProduction growthkboe/d~3%Long termoptionality>3% adjKashagan FFMozambique FFRussia and CaspianSub-Saharan AfricaLatin AmericaFar EastRussian BarentsSeaWest AfricaPre-salt andfNorth Africa and MEEurope and North AmericaFar East transform marginUnconventionals2021Price scenario: 90$/bl 2012-13; 85$/bbl 2014-15; +2%/year afterwards20152011 2015North Africa and ME2015 20228
  9. 9. increased value per barrelCash flow/boe120130@115$/bblIncreased proportion ofoil vs gasHigher production in110@ 90$/bblHigher production inlower tax rate areasGood capture ratiosupported by strong90100supported by strongcontractual structure2010 2015Brent($/boe)85 85Data rebased at 1009
  10. 10. G&P: merchant business exposed to European headwindsG&P proforma adj. EbitdaEU 27 (bcm)Market contextLowmarket riskTransitgas-11% ~16%activitiesInternationaltransportTENPTAGMarketing450500550600Activitiessubject toSnamMarketing3003504002010 2011 2012 2015 2020€600m of regulated/low risk pf adj ebitdaWeak short term environment due todeclining demandLong term market tightening:subject todemand andprice volatility€600m of regulated/low risk pf adj. ebitdaremaining in G&P“pure” marketing business suffering fromoversupply and competitive pressureEuropean economic growth and fuel switchingIncreasing Far East demandIncreasing MENA domestic gas consumptionDeclining European domestic productionLimited LNG capacity for the Atlantic basin10
  11. 11. G&P: mitigating market volatility• Improving cost position• Increasing flexibility on• Continuous renegotiationto ensure marketpplyg yvolumesreflectivitySup• Single brand identity andleading customer service• Higher LNG sales to Far Eastand South America• Retail customer base+28% by 2015• Enhanced internationalLNG salesResillentsegment• Multi-country approachsonalMulti country approach• Tailor-made offers• Increasing ancillary services• Consolidation of EuropeanleadershipInternatio11
  12. 12. R&M: increasing efficiency and complexityIncreased focus on complexity and efficiencyto benefit from potential scenario recoveryO ti i tiEST completion by 2012Increased system integrationExploit flexibility and asset-backed tradingOptimisation& efficiency+ €400mp y gMarketing: confirming profitabilityConsolidation of Italian leadership Italian retailmarket shareNetwork enhancement and automationExpansion of non-oil activitiesmarket share>30%12
  13. 13. growth fueled by enhanced capex plan...Total capex plan of €59.6bn (ofwhich €6 2bn relate to Snam)2012-2015 capex planbln € €6.2bn relate to Snam)Focus on E&P:Enhanced exploration6.2 programmeProduction optimization toreduce decline ratesHigh-return growth44.7g gprojectsG&P ex-Snam: limitedinvestments mainly powergenE&P Snam G&P R&M Others Saipeminvestments, mainly powergenR&M: decreasing investment inrefining13
  14. 14. … financed by organic cashflow generation2012-15 cash flow*bln €Organic cash-flow morethan covers capexrequirementsAdditional cash-inflowsAdditional cash-inflowsexpected from disposalsImpact of Snamdeconsolidation on freecash-flow broadly neutralSnam Snam14* @ 90$/bl in 2012-13; 85$/bl in 2014-15
  15. 15. the new eni: growth and returnsEnsure appropriate financial strengthMaintain adequate gearing in the context of new upstream-focused business modelHigh liquidity reduces reliance on credit market in volatile environmentContinue to invest in high-return E&P portfolioNew project pipeline with IRR of >20% at our oil-price scenarioAdditional growth potential from world-class exploration discoveriesReward shareholdersRobust returns supported by delivery of profitable production growthLaunch of new buyback programme to return cash with high flexibility15