Outlook

The main targets of the plan are:

• High production growth: > 3% CAGR to 2014
• Gas sales in Italy and key European markets: +5% CAGR to 2014
• R&M efficiency program: new target of €200 mln by 2014
• Sound financial position and sustainable dividend in a 70$/bl scenario

Capex plan and efficiency program

Eni plans 53.3 billion euro of investments over the 2011- 2014 period.
Over 70% of overall investments are related to upstream activities, in particular the development of projects such as Zubair, Junin 5, Perla, Goliat and Block 15/06 in Angola, that will sustain production growth over the plan period and beyond.
With respect to efficiency, Eni is planning a step-up of its cost reduction program, with 1.7 billion euro of savings planned over the next four years, bringing our total since 2006 to 4.1 billion euro. This objective will be achieved through procurement optimization, a further streamlining of logistics in R&M, as well as increased labour efficiencies.

The 2011 outlook is still characterized by a certain degree of uncertainty and volatility. However the global economic recovery has been gaining momentum recently.

Eni forecasts a solid trend for Brent crude oil prices supported by healthier global oil demand. For capital budgeting and financial planning purposes, Eni assumes an average Brent price of 70 $/barrel for the full year 2011.

Management expects that the European gas market will remain depressed as sluggish demand growth is insufficient to absorb current oversupplies. Refining margins are expected to remain unprofitable due to weak underlying fundamentals and high feedstock costs.

Against this backdrop, key volumes trends for the year are expected to be the following:

- Production of liquids and natural gas is forecast to slightly increase compared to 2010 (1.815 million boe/d was the actual level in 2010). This estimate is based on the Company's assumption of a Brent price of 70 $/barrel for the full year. Growth will be driven by ramping-up fields started in 2010 mainly in Iraq, and new field start-ups in Australia, Algeria and the United States, partly offset by mature field declines;

- Worldwide gas sales: are expected to be at least in line with 2010 (in 2010 actual sales amounted to 97.06 bcm). Considering mounting competitive pressure in the gas market, the achievement of this target as well as stabilizing the market share 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;

- Regulated businesses in Italy will benefit from the pre-set regulatory return on new capital expenditures and efficiency programs;

- Refining throughputs on Eni's account are planned to be in line with 2010 (actual throughputs in 2010 were 34.8 mmtonnes), due to higher volumes processed on more competitive refineries, the optimization of refinery cycles, as well as efficiency actions implemented in response to a volatile trading environment;

- Retail sales of refined products in Italy and the rest of Europe are expected to be in line with 2010 (11.73 mmtonnes in 2010) against the backdrop of weaker demand. Management plans to improve sales and profitability leveraging on selective pricing and marketing initiatives, starting new service stations and developing the "non-oil" business;

- The Engineering & Construction business confirms solid results due to increasing turnover and a robust order backlog.

In 2011, management plans to make capital expenditures broadly in line with 2010 (€13.87 billion was invested in 2010) and will mainly be directed to developing giant fields and starting production at new important fields in the Exploration & Production division, refinery upgrading related in particular to the realization of the EST project, completing the program of enhancing Saipem's fleet of vessels and rigs, and upgrading the natural gas transport infrastructure.

Assuming a Brent price of $70/barrel and the divestment of certain assets, management forecasts that the ratio of net borrowings to total equity (leverage) at year-end will be lower than the 2010 level.