Previous Year's Results

Libyan tensions

From February 22, 2011, some liquids and natural gas production activities and the gas export through the GreenStream pipeline have been halted. Facilities have not suffered any damage and such standstill does not affect Eni's ability to ensure natural gas supplies to its customers. Eni is technically able to resume gas production at or near previous level once the situation stabilises.
The overall impact of the Libyan tensions on Eni's results in terms of operations and cash flows will depend on how long such tensions will last, which management is currently unable to predict.
Eni's production is currently fluctuating at around 70-75 kboe/d, down from the expected level of approximately 280 Kboe/d, and is made of gas which is totally delivered to local power generation plants. Net capital employed in Eni's upstream activities in Libya amounted to approximately $2.5 billion at year end including Eni's interest (50%) in the GreenStream BV venture.



Development projects in Iraq and Venezuela

Achieved an increase in production by more than 10% above the initial production rate of approximately 180 kbbl/d at the giant Zubair oilfield thus beginning cost recovery for its work on the field, including recognition of remuneration fee.
Eni, with a 32.8% share, is leading the consortium in charge of redeveloping the Zubair field over a 20 year period, targeting a production plateau of 1.2 mmbbl/d in the next six years.

Established a joint-venture with the Venezuelan National Oil Company PDVSA for the development of the giant Junin 5 oilfield, located in the Orinoco Oil Belt with certified volumes of oil in place of 35 billion barrels. First oil is expected in 2013 at an initial rate of 75 kbbl/d, targeting a long-term production plateau of 240 kbbl/d to be reached in 2018.

Appraisal activities performed in 2010 confirmed Perla as a major gas discovery, one of the most significant in recent years and the largest ever in Venezuela, with volumes of gas in place of over 14,000 bcf. The partners are planning fast track of Perla through an early production phase of approximately 300 mmcf/d, targeted to start-up by 2013.



Exploration and development expenditures

In 2010, capital expenditures amounted to €9,690 million to enhance assets in well established areas of Africa, the Gulf of Mexico and Central Asia.
Exploration activities (€1,012 million) achieved a number of successes such as the appraisal activity at the large Perla gas discovery in Venezuela and oil discoveries in the Block 15/06 located in the Angolan offshore basin. Further discoveries were made in the North Sea, Egypt, Pakistan, Indonesia, Nigeria and Brazil, through Galp (Eni's interest 33%).
A total of 47 new exploratory wells were drilled (23.8 of which represented Eni's share), in addition to 9 exploratory wells in progress at year end (3.8 net to Eni). The overall commercial success rate was 41% (39% net to Eni).
Development expenditures were €8,578 million to fuel the growth of major projects in Kazakhstan, Congo, the United States, Algeria, Egypt and Norway.

• Acquired a 55% stake and operatorship in the Ndunda Block located in the Democratic Republic of Congo.
  
• Awarded operatorship of two offshore Blocks (Eni's interest 100%) in the Dahomey Basin as part of its agreements with the Government of Togo to develop the Country's offshore mineral resources.
  
• Acquired Minsk Energy Resources operating 3 licences in the Polish Baltic Basin, a highly prospective shale gas play. Drilling operations are expected to start in the second half of 2011.
  
• Awarded rights to explore and the operatorship of deep offshore Block 35 in Angola, with a 30% interest. This deal is subject to the approval of the relevant authorities.
  
• Signed a Strategic Framework Agreement with the Egyptian Ministry of Petroleum for new upstream and downstream initiatives.
  
• Signed a Memorandum of Understanding with the national oil company PetroChina to promote common opportunities to jointly expand operations in conventional and unconventional hydrocarbons in China and outside China.
  
• Signed with the Government of Ecuador new terms for the service contract for the Villano oilfield, due to expire in 2023. Under the new agreement, the operated area is enlarged to include the Oglan oil discovery, with volumes in place of 300 mmbbl. Development will be achieved in synergy with existing facilities.
  
• Sanctioned the West Hub project to readily put in production the oil discoveries made in offshore Block 15/06 (Eni operator with a 35% interest), located in Angola. Start-up is expected in 2013 with production peaking at 22 kbbl/d.
  
• Awarded new exploration leases in Pakistan and Venezuela.
  
• As part of the rationalizing its upstream portfolio, Eni divested its subsidiary Società Padana Energia to Gas Plus. The divested subsidiary includes exploration leases and concessions for developing and producing oil and natural gas in Northern Italy.

Key performance/sustainability indicators		2008	2009	2010
Employee injury frequency rate	(no. of accidents per million hours worked)	0.84	0.49	0.72
Net sales from operations (a)	(€ million)	33,042	23,801	29,497
Operating profit		16,239	9,120	13,866
Adjusted operating profit		17,222	9,484	13,884
Adjusted net profit		7,900	3,878	5,600
Capital expenditures		9,281	9,486	9,690
of which: exploration expenditures (b)		1,918	1,228	1,012
Adjusted capital employed, net at year end		30,362	32,455	37,646
Adjusted ROACE	(%)	29.2	12.3	16.0
Average hydrocarbons realizations	($/boe)	68.13	46.90	55.60
-  Liquids	($/bbl)	84.05	56.95	72.76
-  Natural gas	($/mmcf)	8.01	5.62	6.02
Production of hydrocarbons (c) (d)	(kboe/d)	1,797	1,769	1,815
-  Liquids	(kbbl/d)	1,026	1,007	997
-  Natural gas	(mmcf/d)	4,424	4,374	4,540
Estimated net proved reserves of hydrocarbons (c) (d)	(mmboe)	6,600	6,571	6,843
-  Liquids	(mmbbl)	3,335	3,463	3,623
-  Natural gas	(bcf)	18,748	17,850	17,882
Reserve life index (d)	(years)	10.0	10.2	10.3
All sources reserve replacement ratio net of updating the natural gas conversion factor (c) (d)	(%)	135	96	125
Employees at year end	(units)	10,236	10,271	10,276
of which: outside Italy		6,182	6,388	6,370
Oil spills	(bbl)	4,738	6,285	3,850
Oil spills from sabotage and terrorism		2,286	15,289	18,721
Direct GHG emissions	(mmtonnes CO2eq)	33.21	29.69	31.22
of which: from flaring		16.54	13.73	13.83
Community investments	(€ million)	65	67	72

(a) Before elimination of intragroup sales.
(b) Includes exploration bonuses.
(c) Includes Eni's share of equity-accounted entities.
(d) From April 1, 2010, Eni has updated the natural gas conversion factor from 5,742 to 5,550 standard cubic feet of gas per barrel of oil equivalent.The effect of this update on production expressed in boe was 26 kboe/d for the full-year 2010 and on the initial reserves balance as of January 1, 2010, amounted to 106 mmboe. For further information see the paragraph "Summary of significant accounting policies" in the Notes to the Consolidated Financial Statements.