Claudio Descalzi, Eni’s CEO, has presented the company’s 2019-2022 Strategic Plan to the financial community. Building on the strong foundations of the last few years, Eni’s 2019-2022 plan marks a new era in the company’s evolution to a world-leading global energy provider.

After having completed the transformation of its business model, now swifter, faster and with a more efficient value chain, Eni will consolidate its organic growth in all businesses leveraging on three main pillars: integration, efficiency and technology deployment.

Technology deployment will play a very strategic role in all sectors, contributing to Eni’s worldwide operational excellence, enhancing and pursuing the decarbonisation of all activities within the company, and implementing the improved industrial efficiency using a circular economy model.

Upstream will continue to represent the key driver of Eni’s organic growth, while keeping a disciplined capital and operational spending. The mid-downstream businesses are expected to double their operating income, creating value even in a lower scenario thanks to the restructuring, repositioning, and improvements undertaken during the recent downturn.

The 2019-22 plan represents a natural development of the strategy implemented in previous years and is designed to increase the value of all businesses through the strategic role of technology research, development and deployment.

On this basis, Eni intends to increase the 2019 dividend to €0.86 per share and to start a four-year share buyback programme with a capital allocation of €400 million in 2019 and, in the following three years, assuming a leverage steadily below 20%, an annual capital allocation of €400 million in a $60-65 Brent scenario or €800 million with a scenario above $65 Brent.

Upstream

In exploration, a key driver of value growth, Eni expects to spend about 3.5 billion euros in the period 2019-2022 targeting 2.5 billion barrels of new resources at the unit cost of below $2, drilling around 40 wells per year in more than 460,000 km² of net acreage.

Hydrocarbon production is expected to grow 3.5% a year over the plan period thanks to the ramp-up and start-up of new projects, which will contribute about 660,000 barrels of oil equivalent per day in 2022, and the expansion of existing fields adding 290,000 barrels of oil equivalent per day in 2022. Over the plan period, 18 major start-ups will be completed. Eni will operate approximately 77% of the overall equity production.

The potential of new areas will underpin hydrocarbon production growth, thus widening Eni global diversification:

• Middle East, with its massive set of opportunities made of fast track production and potential resources;
• Norway, thanks to the establishment of Vår Energi thatrepresents a solid platform for long-term production;
• Mexico, where production in Area 1 is expected to start-up in 2019, with an industry-leading fast-track development.

The three areas will contribute 260,000 barrels of oil equivalent per day at the end of the plan.

The success of the exploration strategy and the growing and broader portfolio of new conventional projects, together with a rigorous financial discipline, will generate a cumulative free cash flow of €22 billion in 2019-2022.

Gas & Power

Gas & Power will grow thanks to the consolidation of its integrated and optimized model, through the following actions:

• Enhanced synergies with all businesses and a deeper integration with upstream activities, in order to capitalize on equity gas;
• Accelerated development of LNG portfolio, thus reaching 14 million tons per year of contracted volumes by 2022 and 16 million by 2025;
• Growth in the retail sector in Europe, reaching a customer base of around 12 million customers in 2022, up approximately 26% versus 2018.

These actions will allow G&P to continue to grow in the future, achieving an EBIT of €700 million in 2022, of which 70% coming from the retail sector. Cumulative free cash flow is expected to be €2.3 billion over the plan.

Refining & Marketing and Versalis

Eni plans to strengthen the Refining and Marketing business, aiming to double the 2018 results thanks to the following main drivers:

• Optimization of the refining process, mainly thanks to the EST restart by mid-2019;
• Green refinery operations: through the start-up of Gela and the second phase of Venice, Eni’s green refining capacity will grow to 1 million tonnes per year;
• Increase in refining capacity by 40% by the end of 2023, thanks to the acquisition of a 20% stake of the Ruwais refinery in the UAE;
• Marketing: increase in market share in Italy to 25% with a growing contribution from premium products and green fuels, and grow sales in Germany and France.

These actions should allow R&M to achieve a cumulative free cash flow of €2.6 billion over the plan period.

Versalis will continue to focus on enhancing its business resilience to reach an EBIT of over €270 million at the end of the plan period.

Energy Solutions

Eni plans to complete 60 brownfield and greenfield projects for a total in excess of 1.6 GW of renewable capacity by 2022, investing €1.4 billion, and up to 5GW by 2025. Energy Solutions is expected to deliver a stable cash flow in the long term, with an unlevered IRR in the range of 8-12%. Moreover, an additional upside on upstream operating costs will be achieved by replacing gas consumption in our operations through renewables.

Decarbonization

Eni confirms its deep commitment to reducing its carbon footprint by setting the ambitious target of net zero direct emissions in the upstream business by 2030, on equity basis.

This will be accomplished by further increasing operational efficiency to minimize CO2 emissions and offsetting residual upstream emissions through large forestry projects. Additional actions will be the increase in the share of gas in our portfolio, the growth of our biofuels business, the enhancement of the zero carbon emission sources usage such as renewables, and the application of a circular approach to maximize the use of waste as feedstock and extend the lives of industrial sites. A key role along our path to a more sustainable model will be played by the deployment of new technologies.

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