Profile of the year

Algeria

In April 2011, Eni signed a cooperation agreement with Sonatrach to explore for and develop unconventional hydrocarbons, particularly shale gas plays.

Australia

In May 2011, Eni signed an agreement with MEO Australia Limited to farm-in the Heron and Blackwood gas discoveries in permit NT/P-68, located in the Timor Sea. Eni will acquire a 50% stake and operatorship in the first gas discovery by financing exploration activities relating to the drilling of two appraisal wells. Eni was granted an option to earn a 50% stake in Blackwood discovery by drilling one appraisal well in the area and performing seismic surveys. The agreement also provides an option to acquire an additional 25% in both the discoveries by financing the development plan required to reach a Final Investment Decision (FID).

Indonesia

In May 2011, Eni was awarded rights to explore and the operatorship of the Arguni I block with a 100% interest, located in the Bintuni basin, with high mineral potential. The agreement foresees drilling 2 wells to be carried out in the first 3 years of exploration license.

South Africa

In June 2011, Eni signed a Memorandum of Understanding with South Africa's State-owned oil company PetroSA to promote common opportunities to jointly expand operations in conventional and unconventional hydrocarbons in South Africa and in Africa. The parties will also study joint initiatives to evaluate long-term LNG supplies for power generation and gas-to-liquids (GTL) as well as refined products to be provided by Eni. In addition, Eni will support the construction of new power plants aimed at guaranteeing economic development of the country. In addition, Eni and PetroSA will also evaluate leasing options to use storage facilities in Saldanha, located strategically between the Asian, American and European markets.

Bio-based chemical

In June 2011, through its subsidiary Polimeri Europa, Eni signed a cooperation agreement with Novamont SpA to convert Eni's Porto Torres chemical plant into an innovative bio-based chemical complex to produce bioplastics and other bio-based petrochemical products (bio-lubricants and bio-additives) for which significant growth is expected in the medium-long term. The project will be supported by an integrated supply chain and raw materials of vegetable origin. Novamont will contribute its technologies and skills in the bio-plasticsand bio-based chemical sector. Eni will contribute to the joint entity the Porto Torres plant, infrastructure and professional staff as well as its industry and technical-engineering and commercial know-how in the petrochemical sector. In addition, Eni foresees to build a biomass power plant and to carry out a number of projects for environmental restoration and clean-up activities. Eni plans to make capital expenditure totalling approximately €1.2 billion in the 2011-2016 period to execute the above mentioned projects directly or through the joint entity.

Egypt

In July 2011, Eni and the Egyptian Authorities reaffirmed their upstream commitment in the country, particularly in the Western Desert, the Mediterranean Sea and the Sinai basins. The program of activity foresees a development plan including the drilling of additional wells and the fast track of recent discoveries as well as an exploration plan including the drilling of 12 wells. In addition, Eni will provide for a number of sustainable initiatives designed to support the country's population.

Belgium

In July 2011, Eni signed an agreement with NV Noun Energy for the acquisition of the subsidiary Noun Belgium NV. The company supplies gas and electricity to the industrial and residential segments in Belgium. The agreement is subject to the approval of the relevant Authorities.

Ukraine

In April 2011, Eni reached an agreement with Cadogan Petroleum plc for the acquisition of an interest in two exploration and development licences located in the Dniepr-Donetz basin, in Ukraine. This agreement is part of the development of cooperation initiatives in hydrocarbon exploration and production in the Country also reaffirmed in a Memorandum of Understanding with the Ukrainian Ministry of Ecology and Natural Resources.

Alaska

In February 2011, production start-up was achieved at the Nikaitchuq operated field (Eni 100%), located in the North Slope basins offshore Alaska, with resources of 220 million barrels. Production is expected to peak at 28 kbbl/d.

China

In January 2011, Eni signed a Memorandum of Understanding with CNPC/PetroChina to promote common opportunities to jointly expand operations in conventional and unconventional hydrocarbons in China and outside China. The parties will also cooperate in the field of advanced technology, with a special focus on the exploitation of unconventional oil and gas resources.

Angola

In January 2011, Eni was awarded rights to explore and the operatorship of offshore Block 35 in Angola, with a 30% interest. The agreement foresees drilling 2 wells and 3D seismic surveys to be carried out in the first 5 years of exploration. This deal is subject to the approval of the relevant authorities.

• Norway, with the Skrugard oil and gas discovery to be readily put in production in the PL 532 (Eni's interest 30%), with initial recoverable reserves of approximately 250 mmbbl;
• USA, in the Gulf of Mexico, with the Hadrian North appraisal well containing oil and natural gas resources in Block KC919 (Eni's interest 25%);
• Ghana, with the appraisal well Sankofa-2 and Gye Nyame discovery containing oil and gas resources in the offshore license Cape Three Points (Eni 47.22%, operator);
• Venezuela, with the Perla 4 and 5 appraisal wells in Block Cardon IV (Eni's interest 50%) that have been successfully drilled. The results exceeded the initial resource estimation to more than approximately 16,000 bcf. The development plan provides for a production target of approximately 300 mmcf/d in 2013;
• the United Kingdom with the appraisal of the Culzean gas and liquids discovery (Eni's interest 16.95%);
• Angola, in Block 15/06 (Eni operator with a 35% interest) with the Mukuvo-1 discovery and Cinguvu-2 appraisal oil wells, within the West Hub project sanctioned in 2010. Planned activities progressed and start-up is expected in 2013 with peak production at 22 kbbl/d;
• Egypt, with near field activities in: (i) the Belayim concession (Eni's interest 100%) with the BB-10 and BLNE-1 oil discoveries that were linked to existing facilities; (ii) the development lease Abu Madi West (Eni's interest 75%) with the Nidoco West and Nidoco East gas discoveries. Their linking to the existing facilities progressed; (iii) the development lease Meleiha (Eni's interest 56%) with the Aman SW and Dorra-1X oil discoveries that were started-up;
• Pakistan, with the Kadanwari-27 exploration well (Eni's interest 18.42%), in the Kadanwari permit.

In the first quarter of 2011, significant exploratory success was achieved in:

• Ghana with the appraisal well Sankofa-2 in the offshore license Cape Three Points (Eni 47.22% , operator);
• the Norwegian sector of the Barents Sea with the Skrugard oil and gas discovery in the PL532 license (Eni 30%);
• Venezuela with the Perla 4 appraisal well of the homonymous discovery in the Cardon IV offshore block (Eni 50%, operator);
• United Kingdom with the appraisal of the Culzean discovery (Eni 16.95%).

In 2010, Eni reported liquids and gas production was a record 1,815 kboe/d. On a comparable basis, production grew by 1.1% for the full year, driven by the timely delivery of all 12 of our planned start-ups, particularly the Zubair field in Iraq in the fourth quarter, which contributed 40 kboe/d of new production in 2010 and will account for 230 kboe/d of production at peak.
Eni plans to deliver an average organic growth rate of more than 3% over the next four-year period, targeting a production level in excess of 2.05 mmboe/d by 2014 under our Brent price scenario at $70 per barrel. This growth will be fuelled by our strong pipeline of project start-ups.

Eni's net proved reserves as of December 31, 2010, amounted to 6.84 bboe, at a reference Brent price of 79 $/bbl. On a comparable basis, the all-sources reserve replacement ratio was 125%. Excluding price effects in PSAs the replacement ratio would be 135%. The reserve life index is 10.3 years.

Natural gas sales of 97.06 bcm declined by 6.4% from 2009 due to sharply lower sales volumes in the Italian market dragged down by increased competitive pressures and oversupplies. Higher volumes were sold in European key markets. In the next four year plan, the recovery in volumes sold will be supported by strengthening the Company's leadership on the European market, marketing actions intended to strengthen the customer base in the domestic market and renegotiating the Company's long-term gas supply contracts. Eni expects to increase gas sales in Italy and in European target markets at an annual growth rate of 5%.

In November 2010, Eni and the Venezuelan State oil company PDVSA established a joint venture for developing the giant Junin 5 oilfield, located in the Orinoco Oil Belt with certified volumes of oil in place of 35 billion barrels. The first oil is expected by 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 to fast track Perla through an early production phase, targeted to start-up by 2013.

In the fourth quarter of 2010, Eni has achieved project milestones at the giant Zubair oilfield in Iraq by increasing production by more than 10% above the initial production rate of approximately 180 kbbl/d, thus beginning cost recovery for its work on the field, including receiving a 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.

In February 2011, production start-up was achieved at the Nikaitchuq operated field (Eni 100%), located in the North Slope basin offshore Alaska, with resources of 220 million barrels. Peak production is expected at 28 kbbl/d.
In January 2011, Eni was awarded rights to explore and the operatorship of deep offshore Block 35 in Angola, with a 30% interest. The deal is subject to the approval of the relevant authorities.
In January 2011, Eni signed a Memorandum of Understanding with PetroChina to promote common opportunities to jointly expand operations in conventional and unconventional hydrocarbons in China and outside China.
In December 2010, Eni and Gazprom signed the extension to 2012 of the strategic agreement signed in 2006. This consolidates a long term partnership to launch joint projects in mid and downstream gas, in the upstream sector and in technological cooperation.
In December 2010, Eni increased its ownership interest in Altergaz, a company marketing natural gas in France to retail and middle market clients. Eni now controls the entity.
In November 2010, Eni 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.
In December 2010, Eni acquired Minsk Energy Resources operating 3 licences in the Polish Baltic Basin, a highly prospective shale gas play.
In August 2010, Eni signed an agreement to acquire a 55% stake and operatorship in the Ndunda Block located in the Democratic Republic of Congo.
In October 2010, Eni was awarded operatorship of offshore Block 1 and Block 2 (Eni 100%) in the Dahomey Basin, in Togo. The area is located in a scarcely explored basin bordered to the west by the analogous Tano Basin where major discoveries have been made.

In October 2010, with a view to 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.
In May 2010, Eni signed a preliminary agreement with an affiliate of Petrobras for the divestment of its 100% interest in Gas Brasiliano Distribuidora, a company that markets and distributes gas in an area of the São Paulo state, Brazil. The completion of the transaction is subject to approval of the relevant Brazilian authorities. In April 2010, Eni divested to NOC (the Libyan National Oil Corporation) a 25% stake in the share capital and control of GreenStream BV, the Company owning and managing the gas pipeline for exporting to Italy natural gas produced in Libya.

Procedures for the divestment of Eni's interests in the German TENP, the Swiss Transitgas and the Austrian TAG gas transport pipelines are progressing. The divestment has been agreed upon on September 29, 2010 with the European Commission to settle an antitrust proceeding related to alleged anti-competitive behaviour in the natural gas market ascribed to Eni without the ascertainment of any illicit behaviour and consequently without imposition of any fines or sanctions.