Growth Strategy

Maintain strong profitable production growth Ensure medium to long-term business sustainability focusing on reserve replacement Develop new projects to fuel future growth Consolidate the industry-leading position on costs

In Exploration & Production Division, we intend to deliver strong profitable production growth leveraging on the Company's portfolio of assets and pipeline of development projects. Management targets 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. Growth will be fuelled by our strong pipeline of projects, with 15 new major fields and other projects planned to start production in the four-year period.

Planned start-ups will add 630 kbbl/d of new production in 2014, related mainly to conventional opportunities. Most of our new projects will get the relevant authorization within 2011.

Growth will be also achieved maintaining the actual production profile at the operating fields through a relevant commitment in optimization activities.

The booking of new reserves will enable us to replace reserves produced in the period, keeping the reserve life index stable. In the longer term, we expect to drive production growth leveraging on our giant fields, particularly Kashagan, Junin, Perla, Goliath, MLE-CAFC, Russian projects, Block 15/06 in Angola and unconventional opportunities. We will pursue the maximization of returns through selective exploration, the reduction in the time to market of our projects, and growing the share of operated production which – through the deployment of Eni standards and technologies – enables us to deliver tighter cost control and a better monitoring of operating risks.

To strengthen our leadership on the European natural gas market. To recover market share and profitability in Italy. To improve operational efficiency. Implementing the new pricing and risk management model.

In Gas & Power Division, Eni aims to preserve the profitability of the marketing segment in spite of a challenging trading environment as a result of increased competitive pressure, oversupply and depressing spot gas prices.
Eni's strategy will leverage on the renegotiation of gas purchase contracts in order to improve the gas cost position of the Company, the adoption of new pricing and risk management strategiesto manage economic margins and to optimize asset value, as well as proposing an efficient commercial offer, focused on different client segments in Italy and abroad

Basing on these drivers, Eni aims to regain volumes and market share increasing gas sales in Italy and European target markets at an annual growth rate of 5%.

Over the next four years, Eni plans to recover the normal level of profitability of the Division with an EBITDA amounting to €4.2 billion due to the solid results achieved by the Regulated Business in Italy taking into account the expected divestment of our international pipelines.

Optimize plant configuration in order to best adapt to a volatile scenario Revise our presence outside Italy, by focusing on core areas and possibly divesting marginal ones Tightly select capital projects

In the Refining & Marketing Division, Eni targets a substantial improvement in the profitability and free cash generation of our refining operations against the backdrop of continuing weakness in the trading environment. Capital expenditures in the refining business will be sanctioned considering the higher profitability levels promoting upgrading of the conversion capacity projects, particularly by completing the new EST plant, and the refining flexibility. This will enable us to capture opportunities offered by demand for middle distillates and to process an higher range of feedstock. Margin recovery will be underpinned by operating cost reductions, energy recovery actions and the integration of refinery cycles. We plan to increase plant utilization rate to 90% and increase volumes throughputs by 2 million tonnes from 2010 in the next four years.

In the marketing business, in a context of low consumption, Eni plans to increase business profitability leveraging on a network of service stations revamped in design and style, modern and efficient, supported also by promotional campaigns aimed at increase customers' loyalty and enhanced non-oil offer. We plan to achieve an increased market share on the Italian market when compared to 2010 (30.4% in 2010) by 2014. Abroad, we will grow selectively leveraging on the consolidation of the network acquired in Austria, commercial initiatives and the opening of new service stations.

Over the next four years, Eni plans to execute a capital expenditure program amounting to €53.3 billion to support organic growth in its business. Approximately €37.1 billion (over 70%) of planned capital expenditures will be invested to explore, develop and produce oil and gas reserves.
Planned projects have been assessed against our long-term scenario for Brent prices at $70 per barrel. Cash flow from operations and planned divestment proceeds (approximately €2
billion) will enable Eni to fund its capital expenditure program and remunerate its shareholders, while at the same time strengthening the balance sheet. Eni plans to progressively reduce the ratio of net borrowings to total equity ("leverage") to below 0.40 within 2014.

Management intends to pursue a value creation for its shareholders trough a progressive dividend policy. Starting from 2011, management plans to increase dividends in line with OECD inflation. This dividend policy is based on management's planning assumptions for oil prices at $70 per barrel flat in the next four years.