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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

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Form 6-K

REPORT OF FOREIGN ISSUER
Pursuant to Rule 13a-16 or 15d-16 of
the Securities Exchange Act of 1934

For the month of April 2005

Eni S.p.A.
(Exact name of Registrant as specified in its charter)

Piazzale Enrico Mattei 1 - 00144 Rome, Italy
(Address of principal executive offices)

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     (Indicate by check mark whether the registrant files or will file annual reports under cover of Form 20-F or Form 40-F.)

Form 20-F x                    Form 40-F o

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     (Indicate by check mark whether the registrant by furnishing the information contained in this Form is also thereby furnishing the information to the Commission pursuant to Rule 12g3-2b under the Securities Exchange Act of 1934.)

Yes o                    No x

     (If “Yes” is marked, indicate below the file number assigned to the registrant in connection with Rule 12g3-2(b):               )

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TABLE OF CONTENTS

 

- Press Release dated April 13, 2005

- Notice of Shareholders’ Meeting

- Report on the proposals of the Board of Directors on the items in the Shareholders’ Meeting Agenda

- By Laws amended to comply with the new regulation on the Special Powers of the Italian Government

- Press Release dated April 27, 2005

- Fact Book 2004

 

 

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SIGNATURES

     Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, hereunto duly authorised.

	Eni S.p.A.
		Name: Fabrizio Cosco
		Title:	Company Secretary

Date: April 30, 2005

 

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PRESS RELEASE

 

Eni: By-laws amended to comply with the new regulation on the golden share and Shareholders’ Meeting called to:

 

By-laws amended

The Board of Directors has amended the text of the by-laws to comply with the decree issued on 1 April by the Ministry of Economy and Finance. This decree regulates the special powers held by the Minister of Economy and Finance exercised in Eni¹.

Following the new formulation of the special rights mentioned, the Chairman of the Board of Auditors is no longer appointed by the Minister of Economy and Finance in agreement with the Minister of Production Activities but by the Shareholders' Meeting.

 

Shareholders’ Meeting called

The Board of Directors has called the ordinary shareholders’ meeting for the 26 and 27 May 2005 on first and second call respectively, to submit the proposals for the approval of the Financial Statements at 31 December 2004 and the allocation of the 2004 profit, amongst which the distribution of 0.90 euro dividend per share already announced on 30 March, as well as the proposal to extend the buy-back programme, and the 2005 stock option plan and appoint the corporate bodies.

 

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(1)		The amendments regard: a) opposition – and no longer acceptance – of the possession of shareholdings representing at least 3% of the share capital as a condition for exercising the right of vote and other non-asset linked rights; b) opposition – and no longer acceptance – of shareholders’ agreements in which at least 3% of the share capital is represented; c) duly justified power of veto with reference to objective damage to the vital interests of the State resulting from the passing of motions on the winding up or transfer of companies, mergers, demergers, the transfer of registered offices abroad, amendments to the business purpose or by-laws which revoke or modify special powers; d) the appointment of a director without right of vote whose presence is not considered for the purposes of the formation of the quorum of board of directors’ meetings; moreover, no powers of attorney or particular posts can be assigned.

 

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Treasury stock buy-back programme

The Board of Directors has resolved to propose to the Shareholders’ Meeting to extend of one year the deadline firstly set for November 2005 of the treasury stock purchase programme authorised by the Shareholders in the meeting of 28 May 2004.

 

Authorisation of the Board of Directors to make available up to 5.4 million own shares for the 2005 assignment of stock option

The Board of Directors has resolved to ask the Shareholders Meeting to authorise the availability, for the purposes of the 2005 assignment, of up to 5,443,400 treasury shares to be offered, 3 years following assignment of the option to purchase, to Eni managers holding positions most directly responsible for the Group's results, or positions of strategic interest, at a price corresponding to the higher value between the arithmetic average of the official prices on the Mercato Telematico Azionario in the month prior to the date of assignment of the purchase rights of the shares and the average cost of the company’s own shares in portfolio on the day prior to the date of assignment.

 

Renewal of the corporate bodies

The Board of Directors has resolved to invite the Shareholders’ Meeting to appoint expiring corporate bodies and to set at ten the number of board directors, of whom nine appointed by the Shareholders’ Meeting.

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How to contact the company

Website: www.eni.it
Switchboard: +39-0659821
Freefone no.: 800940924
Email: segreteriasocietaria.azionisti@eni.it

Investor Relations Team:
Jadran Trevisan, Manager
Antonio Pinto - Marco Porro
Email: investor.relations@eni.it 
Eni SpA
Piazza Vanoni, 1
20097 San Donato Milanese (MI) – Italia
tel.: 0252051651 - fax:0252031929

Eni Press Office:
Luciana Santaroni, Manager
Domenico Negrini - Giuseppe Currà
tel: 0252031287

luciana.santaroni@eni.it
domenico.negrini@eni.it
giuseppe.currà@eni.it

***

The test of the release can be consulted on the Eni website: "www.eni.it".

 

San Donato Milanese, April 13, 2005

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NOTICE OF SHAREHOLDERS’ MEETING

Eni S.p.A.
Registered Office: Piazzale Enrico Mattei, No. 1, Rome - Italy
Company Share capital euro 4,004,425,176.00 fully paid up
Rome Companies Register Tax Identification Number 00484960588
VAT Number 00905811006 R.E.A. Rome No. 756453

NOTICE OF SHAREHOLDERS' MEETING

Shareholders of Eni S.p.A. are hereby invited to attend the Ordinary Shareholders' Meeting, which will be held in Rome, Via del Serafico, 89/91, on May 26, 2005 at 10:00 a.m. (CET) on first call and, if necessary, on May 27, 2005, on second call, respectively, at the same time and location.

AGENDA

1. Eni Financial Statements at December 31, 2004, Eni Consolidated Financial Statements at December 31, 2004, Report of the Directors on the course of the business, Report of the Board of Statutory Auditors and Report of the Independent Auditors.
2. Allocation of net income.
3. Purchase of Eni shares.
4. Disposition of Eni’s own shares to implement a stock option plan for Eni Group Managers.
5. Determination of the number of the Board of Directors’ members.
6. Determination of the Directors’ term.
7. Appointment of Directors.
8. Appointment of the Chairman of the Board of Directors.
9. Determination of the remuneration of the Chairman of the Board of Directors and that of the Directors.
10. Appointment of the Statutory Auditors;
11. Appointment of the Chairman of the Board of Statutory Auditors.
12. Determination of the remuneration of the Chairman of the Board of Statutory Auditors and that of the effective Auditors.

Pursuant to the By-laws, Directors and the Statutory Auditors will be appointed from lists, with the exception of the Director, with no voting right, who may be appointed by the Minister of Economy and Finance in agreement with the Minister of the Productive Activities.

Shareholders representing at least 1% of the Company’s share capital may present a list of candidates for the appointment of Directors and the Statutory Auditors. The current Board of Directors may present a list of candidates for the appointment of Directors.

Companies that are controlling entities of or are under common control of the same entity as the shareholder presenting a list shall not present nor take part in the presentation of an another candidate list. The term "control" has the meaning defined by Article 2359, first Paragraph, of the Civil Code.

Lists shall be deposited and published according to the procedures set in the By-laws; the candidates to be appointed Statutory Auditors shall have the qualifications set forth by the Legislative Decree No. 58 dated February 24, 1998, the moral and professional qualifications set forth by the Decree No. 162 issued by the Minister of Justice dated March 30, 2000 and the professional qualifications set forth by Article 28, first Paragraph, of the By-laws.

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Admission to the Shareholders’ Meeting is subject to the delivery of the notification of attendance issued by financial intermediaries at least two labour days before the date of the shareholders’ meeting on first call.

In order to take part in the Shareholders’ Meeting, Shareholders holding shares not yet in uncertificated form, shall previously deliver said shares to a financial intermediary in order to have them deposited with Monte Titoli S.p.A. (the Italian Securities Register Centre) and subsequently transformed into uncertificated form and request the above-mentioned notification of attendance.

The report on the proposals of resolutions of the Board of Directors to the Shareholders on each item of the Agenda and the related documentation will be deposited at the Company’s Registered Office and with the Borsa Italiana S.p.A. (the Italian Stock Exchange) within April 26, 2005 and shall remain at the Shareholders’ disposal until the date of the Shareholders’ Meeting.

Vote may be exercised also by mail pursuant to current legislation. Shareholders willing to exercise their vote by mail are entitled to request the Vote by Mail Card and a return envelope to the Company or the following Depositaries: Banca Intesa S.p.A., Banca Nazionale del Lavoro S.p.A., Banca Monte dei Paschi di Siena S.p.A., Banca di Roma S.p.A., Banca Fideuram S.p.A., Sofid Sim S.p.A., Citibank N. A., JPMorgan Chase Bank and Morgan Guaranty Trust Company of New York.

In order to consider the votes by mail valid, envelopes containing the Vote by Mail Card, duly filled in and signed, shall be received by Eni S.p.A. - Segreteria societaria, Piazzale Enrico Mattei, 1 - 00144 Rome, Italy by May 24, 2005, 10:00 a. m. (CET). Votes by mail contained in the Vote by Mail Cards received after said term will not be taken into consideration.

Vote by mail must be exercised personally by the person entitled to vote.

Beneficial Owners of ADRs, listed on the New York Stock Exchange, each ADR representing five Eni ordinary shares, who are recorded in Eni ADRs register of JPMorgan Chase Bank by April 29, 2005 will be entitled to participate in the Meeting or to exercise votes by mail, after having complied with the deposit and registration requirements. Beneficial Owners who have taken advantage of Proxy Vote or Vote by Mail options are entitled to assist at the Meeting upon written request to be made to JPMorgan Chase Bank, ADRs Depositary.

In order to simplify controls of powers entitling the participation in the Shareholders’ Meeting, people who intend to participate in the Meeting as legal or voluntary representatives of Shareholders or other people entitled to take part in it are requested to deliver to Eni S.p.A.’s Corporate Secretary the deeds entitling them to said participation, by mail, also in copy, or by fax, at least two days before the date of the Meeting.

Experts, financial analysts and journalists wishing to attend the Shareholders’ Meeting shall deliver, by mail or fax, a request to Eni S.p.A.’s Corporate Secretary at least two days before the date of the Meeting.

Eni S.p.A.'s Corporate Secretary is available for any further information Shareholders may need at the toll-free number 800 940 924 or fax number + 39 6 59822233.

The Notice and the documentation regarding the Shareholders’ Meeting will be available on www.eni.it and may be requested by e-mail at segreteriasocietaria.azionisti@eni.it or by calling the above-mentioned toll-free number.

		The Chairman of the Board of Directors
		Mr. Roberto Poli

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To timely comply with admission and registration procedures, Shareholders are kindly requested to arrive at the Meeting in advance of the start time of the Meeting itself. Registration for the Meeting will take place at the same location as the Meeting and will start at 9:00 a.m. (CET).

 

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REPORT ON THE PROPOSALS OF THE BOARD OF DIRECTORS ON THE ITEMS IN THE SHAREHOLDERS’ MEETING AGENDA

Eni SpA

Ordinary Shareholders’ Meeting to be held on May 26 and May 27, 2005 on first and second call, respectively
Report on the proposals of the Board of Directors on the items
in the Shareholders’ Meeting Agenda

 

Item 1

Eni Financial Statements at December 31, 2004, Consolidated Financial Statements at December 31, 2004, Report of the Directors on the course of the business, Report of the Board of Statutory Auditors and Report of the Independent Auditors

To the Shareholders:

for the illustration of Eni Financial Statements please refer to Eni Annual Report 2004 deposited at the Company's Registered Office and with the Borsa Italiana S.p.A. (the Italian Stock Exchange).

To the Shareholders:

You are invited to approve Eni Financial Statements at December 31, 2004, which disclose a net income of euro 4,684,165,491.89.

 

Item 2

Allocation of net income

To the Shareholders:

in consideration of Eni 2004 results, the Board of Directors proposes to approve:

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Item 3

Purchase of Eni shares

To the Shareholders:

on May 28, 2004 the Shareholders’ Meeting authorised to purchase up to 400 million Eni ordinary shares, nominal value euro 1, within eighteen months as of the Shareholders’ Meeting date. The purchase wouldn’t have exceeded the expense of 5,400 million euro and the purchase price wouldn’t have been lower than Eni share nominal value nor higher than the reference price recorded on the day preceding each purchase increased of 5%. On April 12, 2005, Eni owns 237,773,706 treasury shares; the related purchase cost totals 3,295 million euro.

The Board intends to prosecute the buy-back programme initiated in 2000; therefore it presents to the Shareholders’ Meeting the following proposal.

To the Shareholders:

You are invited to:

 

Item 4

Disposition of Eni’s own shares to implement a stock option plan for Eni Group Managers

To the Shareholders:

the Board intends to extend to 2005 the stock option Plan 2002-2004; for the implementation of said Plan the Shareholders’ Meeting held on May 30, 2002 authorised the use of up to 15 million Eni treasury shares. The Board therefore proposes to be authorised by the Shareholders’ Meeting to use 2,785,000 Eni treasury shares not yet assigned for the execution of said Plan and 2,658,400 of the 4,258,400 Eni treasury shares available for the 2005 assignation in the 2003-2005 stock grant Plan; for the implementation of said Plan the Shareholders’ Meeting held on May 30, 2003 authorised the use of up to 6,500,000 Eni treasury shares.

The Board proposes to be empowered in order to approve the assignation plan of said stock options and the related regulation. Facilities from Eni Group financial intermediary company are available to the stock options assignees in order to fund the purchase of the shares assigned, subject to the commitment of the assignee to irrevocably delegate said company to sell the shares purchased.

To the Shareholders:

You are invited to authorise the Board of Directors to:

 

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Item 5

Determination of the number of the Board of Directors’ members

To the Shareholders:

the office of the current Board of Directors appointed by the Shareholders’ Meeting held on May 30, 2002 will lapse on the date of the Shareholders’ Meeting convened to approve Eni 2004 Financial Statements.

Pursuant to Article 17, first Paragraph, of the By-laws, the Company is managed by a Board of Directors made up by a minimum of three to a maximum of nine members. The Minister of Economy and Finance in agreement with the Minister of Productive Activities may appoint another Board member, with no voting rights. The determination of such number is submitted to the Shareholders’ Meeting.

In order to ensure that the Board may adequately face the tasks connected with the dimensions and complexity of Eni Group, the Board proposes to set the number of Directors to be appointed by the Shareholders’ Meeting at nine.

To the Shareholders:

You are invited to approve the proposal of determining in nine the number of the Directors to be appointed by the Shareholders’ Meeting.

 

Item 6

Determination of the Directors’ term

To the Shareholders:

pursuant to Article 17, second Paragraph, of the By-laws, the Board of Directors’ members are to be elected for a term up to three financial years.

To ensure adequate continuity in the management of the Company, the Board proposes to set the term of Directors appointed to three financial years, this term expiring on the date of approval of Eni 2007 Financial Statements.

To the Shareholders:

You are invited to approve the proposal to set the term of Directors appointed to three financial years, this term expiring on the date of the Shareholders’ meeting convened to approve Eni 2007 Financial Statements.

 

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Item 7

Appointment of Directors

To the Shareholders:

pursuant to Article 6, second Paragraph, letter d) of the By-laws, the Minister of the Economy and Finance, in agreement with the Minister of Productive Activities, may appoint a Director with no voting rights.

The Shareholders’ Meeting is called to appoint nine Directors who, in accordance with Article 17, third Paragraph, of the By-laws, will have to be appointed from the lists presented and deposited at the Company's Registered Office and published in newspapers within the terms set forth in the By-laws.

To the Shareholders:

You are invited to vote one of the lists presented and published pursuant to the By-laws.

 

Item 8

Appointment of the Chairman of the Board of Directors

To the Shareholders:

pursuant to Article 18, first Paragraph, of the By-laws, the Chairman of the Board of Directors is appointed by the Shareholders’ Meeting, or, if it doesn’t provide for, by the Board, among the Board members with voting right.

The Board proposes to the Shareholders’ Meeting to appoint Chairman of the Board of Directors the first candidate of the list that gets the majority of votes.

To the Shareholders:

You are invited to appoint Chairman of the Board of Directors the first candidate of the list that gets the majority of votes.

 

Item 9

Determination of the remuneration of the Chairman of the Board of Directors and that of the Directors

To the Shareholders:

pursuant to Article 26, first Paragraph, of the By-laws, the Shareholders’ Meeting determines the Chairman’s and the Directors’ remuneration.

The Board therefore presents to the Shareholders’ Meeting the following proposal.

To the Shareholders:

You are invited to set the fix and variable Chairman’s and Directors’ annual compensation, respectively as follows:

fixed annual compensation:

 

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variable annual compensation:

 

Item 10

Appointment of the Statutory Auditors

To the Shareholders:

the office of the current Board of Statutory Auditors appointed by the Shareholders’ Meeting held on May 30, 2002 will lapse on the date of the Shareholders’ Meeting convened to approve Eni 2004 Financial Statements.

Pursuant to Article 28, second Paragraph, of the By-laws, the Shareholders’ Meeting is called to appoint the Statutory Auditors on the basis of the lists deposited at the Company's Registered Office and published in newspapers within the terms set forth in the By-laws. Candidates shall have the qualifications set by Article 149 of Legislative Decree no. 58 issued on February 24, 1998 and the moral and professional qualifications set forth by the Decree of the Minister of Justice No. 162 issued on March 30, 2000 and the professional requirements set forth by Article 28, first Paragraph, of the By-laws that sets out the matters and sectors strictly connected with those of interest of the Company.

The Auditors will remain in force three financial years; the term will expire at the date of the Shareholders’ meeting convened to approve Eni 2007 Financial Statements.

Pursuant to Article 28, second Paragraph, of the By-laws, the Shareholders’ Meeting appoints the Chairman of the Board of Statutory Auditors among the effective Auditors appointed on the basis of lists.

To the Shareholders:

You are invited to vote one of the lists presented and published pursuant to the By-laws.

 

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Item 11

Appointment of the Chairman of the Board of Statutory Auditors

To the Shareholders:

pursuant to Article 28, second Paragraph, of the By-laws, the Shareholders’ Meeting appoints the Chairman of the Board of Statutory Auditors among the effective Auditors appointed on the basis of lists.

To the Shareholders:

You are invited to appoint as Chairman of the Board of Statutory Auditors one of the effective Auditors appointed.

 

Item 12

Determination of the remuneration of the Chairman of the Board of Statutory Auditors and that of the effective Auditors

To the Shareholders:

pursuant to Article 2402 of the Civil Code, the Shareholders’ Meeting determines the Chairman’s of the Board of Statutory Auditors and of the other effective Auditors’ annual remuneration.

The Board, in consideration of the activity of the Statutory Auditors, proposes to the Shareholders’ Meeting to set the Chairman’s of the Board of Statutory Auditors annual remuneration to 150,000 euro and each effective Auditor’s annual remuneration to 100,000 euro, in addition to 1,000 euro for the participation to each meeting of the company bodies established in the By-laws and of the Board Committees established by the Board of Directors and the reimbursement of the expenses incurred.

 

To the Shareholders:

You are invited to set the Chairman’s of the Board of Statutory Auditors annual remuneration to 150,000 euro and each effective Auditor’s annual remuneration to 100,000 euro, in addition to 1,000 euro for the participation to each meeting of the company bodies established in the By-laws and of the Board Committees established by the Board of Directors and the reimbursement of the expenses incurred.

 

		The Chairman of the Board of Directors
		Mr. Roberto Poli

 

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By Laws

(amended to comply with the new regulation on the Special Powers of the Italian Government)

 

ARTICLE 1

1.1 "Eni S.p.A." resulting from the transformation of Ente Nazionale Idrocarburi, a public law agency, established by Law 136 of February 10, 1953, is regulated by these by-laws.

ARTICLE 2

2.1 The registered head office of the company is located in Rome, Italy and the company’s two branches in San Donato Milanese (MI).

2.2 Main representative offices, affiliates and branches may be established and/or wound up in Italy or abroad in compliance with the law.

ARTICLE 3

3.1 The company is expected to exist until December 31, 2100. Its duration may be extended one or more times by resolution of the shareholders' meeting.

ARTICLE 4

4.1 The company objects are the direct and/or indirect management, by way of shareholdings in companies, agencies or businesses, of activities in the field of hydrocarbons and natural vapours, such as exploration and development of hydrocarbon fields, construction and operation of pipelines for transporting the same, processing, transformation, storage, utilisation and trade of hydrocarbons and natural vapours, all in respect of concessions provided by law.

The company also has the object of direct and/or indirect management, by way of shareholdings in companies, agencies or businesses, of activities in the fields of chemicals, nuclear fuels, geothermy and renewable energy sources, in the sector of engineering and construction of industrial plants, in the mining sector, in the metallurgy sector, in the textile machinery sector, in the water sector, including derivation, drinking water, purification, distribution and reuse of waters; in the sector of environmental protection and treatment and disposal of waste, as well as in every other business activity that is instrumental, supplemental or complementary with the aforementioned activities. The company also has the object of managing the technical and financial co-ordination of subsidiaries and affiliated companies as well as providing financial assistance on their behalf. The company may perform any operations necessary or useful for the achievement of the company objects; by way of example, it may initiate operations involving real estate, moveable goods, trade and commerce, industry, finance and banking asset and liability operations, as well as any action that is in any way connected with the company objects with the exception of public fund raising and the performance of investment services as regulated by Legislative Decree No. 58 of February 24, 1998.

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The company may take shareholdings and interests in other companies or businesses with objects similar, comparable or complementary to its own or those of companies in which it has holdings, either in Italy or abroad, and it may provide real and or personal bonds for its own and others' obligations, especially guarantees.

ARTICLE 5

5.1 The company capital is euro 4,004,425,176.00 (four billion four million four hundred and twenty-five thousand one hundred and seventy-six) represented by 4,004,425,176 (four billion four million four hundred and twenty-five thousand one hundred and seventy-six) shares of ordinary stock with a nominal value of euro 1 (one) each.

5.2 Shares may not be split up and each share is entitled to one vote.

5.3 The fact of being a Shareholder in itself constitutes approval of these by-laws.

5.4 The Board of Directors in execution of the delegation of authority resolved pursuant to Article 2443 of the Civil Code by the Shareholders' Meeting held on June 6, 2000 approved in the Meetings held on June 21, 2000 and June 7, 2001 to increase the company capital up to euro 3,500,000 (three million five hundred thousand). Therefore the Board resolved to issue up to 3,500,000 (three million five hundred thousand) ordinary shares nominal value euro 1 (one) each, bearing regular coupon, by using the Reserve for the issue of shares pursuant to Article 2349 of the Civil Code for a corresponding amount. The shares have been assigned pursuant to Article 2349 of the Civil Code to managers employed by the company and its subsidiaries controlled directly or indirectly by Eni S.p.A. pursuant to Article 2359 of the Civil Code who have achieved the pre-set annual corporate and individual targets. In the two-year period concerned by the Plan the total figure of the commitments of share offerings was 1,428,550 in the year 2000 and 1,851,750 in the year 2001 for a total amount of 3,280,300 shares. Eni share capital will be increased up to the amount corresponding to the shares subscribed until the term of December 31, 2004.

5.5 Pursuant to Article 2443 of the Civil Code, the Board of Directors is delegated to increase the company share capital, for no consideration and within December 31, 2002, in one or more times, pursuant to Article 2349 of the Civil Code, up to euro 1,500,000 (one million five hundred thousand). The Board may therefore issue up to 1,500,000 (one million five hundred thousand) ordinary shares nominal value 1 (one) euro each, bearing regular coupon, by using the Reserve for the issue of shares pursuant to Article 2349 of the Civil Code for a corresponding amount. The shares to be issued will be assigned pursuant to Article 2349 of the Civil Code to managers employed by the company and its subsidiaries controlled directly or indirectly by Eni S.p.A. pursuant to Article 2359 of the Civil Code, listed subsidiaries excepted, who have achieved the pre-set 2001 individual targets. The shares will be offered for subscription for no consideration within a month from the expiration of a three-year term commencing as of the date of the communication of the commitment of the offer to the assignee. The company capital will be increased up to the amount corresponding to the shares subscribed until the term of June 30, 2006.

The Board of Directors is empowered to adopt any act to define terms and conditions for the execution of the share capital increase, including but not limited to the approval of the "Regulations of the 2002 Plan of Assignation of Eni S.p.A. shares to be issued pursuant to Article 2349 of the Civil Code".

ARTICLE 6

6.1 Pursuant to Article 3 of Law Decree 332 of May 31, 1994, converted with amendments into Law 474 of July 30, 1994, no one, in any capacity, may own company shares that entail a holding of more than 3 per cent of voting share capital.

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Such maximum shareholding limit is calculated by taking into account the aggregate shareholding held by the controlling entity, either a physical or legal person or company; its directly or indirectly controlled entities, as well as entities controlled by the same controlling entity; affiliated entities as well as people related to the second degree by blood or marriage, also in the case of a legally separated spouse. Control exists, with reference also to entities other than companies, in the cases envisaged by Article 2359, paragraphs 1 and 2 of the Civil Code. Affiliation exists in the case set forth in Article 2359, paragraph 3 of the Civil Code as well as between entities that directly or indirectly, by way of subsidiaries, other than those managing investment funds, are bound, even with third parties, in agreements regarding the exercise of voting rights or the transfer of shares or portions of third companies or, in any event, in agreements or pacts as per Article 122 of Legislative Decree No. 58 of February 24, 1998 regarding third party companies if said agreements or pacts concern at least 10 per cent of the voting capital, if they are listed companies, or 20 per cent if they are unlisted companies.

The aforementioned shareholding limit (3 per cent) is calculated by taking into account shares held by any fiduciary nominee or intermediary. Any voting rights attributable to voting capital held or controlled in excess of the maximum limit indicated in the foregoing cannot be exercised and the voting rights of each entity to whom such limit on shareholding applies are reduced in proportion, unless otherwise jointly provided in advance by the parties involved. In the event that shares exceeding this limit are voted, any Shareholders' resolution adopted pursuant to such a vote may be challenged pursuant to Article 2377 of the Civil Code, if the required majority had not been reached without the votes exceeding the aforementioned maximum limit. Shares not entitled to vote are included in the determination of the quorum at shareholders' meetings.

6.2 Pursuant to Article 2, paragraph 1 of Law Decree 332 of May 31, 1994, converted with amendments into Law 474 of July 30, 1994, as modified by Article 4, Paragraph 227, of Law December 24, 2003 no. 350, the Minister of Economy and Finance retains the following special powers to be exercised in agreement with the Minister of Productive Activities and according to the criteria contained in the Decree issued by the President of the Council of Ministers on June 10, 2004:

a) opposition with respect to the acquisition of material shareholdings by entities affected by the shareholding limit as set forth in Article 3 of Law Decree 332 of May 31, 1994, converted with amendments into Law 474 of July 30, 1994, by which – as per Decree issued by the Minister of Treasury on October 16, 1995 – are meant those representing at least 3% of share capital with the right to vote at the ordinary shareholders' meeting. The opposition is expressed within ten days of the date of the notice to be filed by the Board of Directors at the time request is made for registration in the Shareholders' Register if the Minister considers that such an acquisition may prejudice the vital interests of the Italian State. Until the ten-day term is not lapsed, the voting rights and the non-asset linked rights connected with the shares representing a material shareholding may not be exercised. If the opposition power is exercised, through a duly motivated act in connection with the prejudice that may be caused by the operation to the vital interests of the Italian State, the transferee may not exercise the voting rights and the other non-asset linked rights connected with the shares representing a material shareholding and must sell said shares within one year. Failing to comply, the law court, upon request of the Minister of Economy and Finance, will order the sale of the shares representing a material shareholding according to the procedures set forth in Article 2359-ter of the Civil Code. The act through which the opposition power is exercised may be sued by the transferee before the Regional Administrative Court of Latium within sixty days as of its issue;

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b) opposition with respect to the subscription of Shareholders' pacts or agreements as per Article 122 of Legislative Decree No. 58 of February 24, 1998, involving – as per Decree issued by the Minister of Treasury on October 16, 1995 – at least 3% of the share capital with the right to vote at ordinary shareholders' meetings. In order to allow the exercise of the above mentioned opposition power, Consob notifies the Minister of Economy and Finance of the relevant pacts or agreements communicated to it pursuant to the aforementioned Article 122 of Legislative Decree No. 58 of February 24, 1998. The opposition power may be exercised within ten days as of the date of the notice by Consob. Until the ten-day term is not lapsed, the voting right and the other non-asset linked rights connected with the shares held by the shareholders who have subscribed the above mentioned pacts or agreements may not be exercised. If the opposition power is exercised through the issue of an act that shall be duly motivated in consideration of the prejudice that may be caused by said pacts or agreements to the vital interests of the Italian State, the shareholders pacts or agreements shall be null and void. If in the shareholders’ meetings the shareholders who have signed shareholders’ pacts or agreements behave as if those pacts or agreements disciplined by Article 122 of Legislative Decree No. 58 of February 24, 1998 were still in effect, the resolutions approved with their vote, if determining for the approval, may be sued. The act through which the opposition power is exercised may be sued by the shareholders who joined the above mentioned pacts or agreements before the Regional Administrative Court of Latium within sixty days as of its issue;

c) veto power with respect to resolutions to dissolve the company, to transfer the business, to merge, to demerge, to transfer the company's registered office abroad, to change the company objects and to amend the by-laws cancelling or modifying the powers indicated in this Article. The act through which the veto power is exercised shall be duly motivated in consideration of the prejudice the related resolution may cause to the vital interests of the Italian State and may be sued by the dissenting Shareholders before the Regional Administrative Court of Latium within sixty days as of its issue;

d) appointment of one Board member with no voting rights. Should such appointed Director lapse, the Minister of Economy and Finance in agreement with the Minister of Productive Activities will appoint his substitute.

ARTICLE 7

7.1 When shares are fully paid, and if the law so allows, they may be issued to the bearer. Bearer shares may be converted into registered shares and vice-versa. Conversion operations are performed at the Shareholder's expense.

ARTICLE 8

8.1 In the event, and for whatever reason, a share belongs to more than one person, the rights relating to said share may not be exercised by other than one person or by a proxy for all co-owners.

ARTICLE 9

9.1 The shareholders' meeting may resolve to increase the company capital and establish terms, conditions and means thereof.

9.2 The shareholders' meeting may resolve to increase the company capital by issuing shares, including shares of different classes, to be assigned for no consideration pursuant to Article 2349 of the Civil Code.

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ARTICLE 10

10.1 Payments on shares are requested by the Board of Directors in one or more times.

10.2 Shareholders who are late in payment are charged an interest calculated at the official discount rate established by the Bank of Italy besides the provisions envisaged in Article 2344 of the Civil Code.

ARTICLE 11

11.1 The company may issue bonds, including convertibles and warrant bonds in compliance with the law.

ARTICLE 12

12.1 Ordinary and extraordinary shareholders' meetings are usually held at the company registered office unless otherwise resolved by the Board of Directors, provided however they are held in Italy.

12.2 Ordinary shareholders’ meetings must be called at least once a year to approve the financial statements, within 180 days of the end of the business year, as the Company approves the Group Financial Statements.

ARTICLE 13

13.1 Shareholders’ meetings are convened through a notice to be published on the Italian Official Gazette, according to the current legislation and in compliance with the rules in force regulating the exercise of the vote by mail.

13.2 Admission to the shareholders’ meeting is subject to the delivery, also for registered shares, of the certification issued by financial intermediaries at least two days before the date of the shareholders’ meeting on first call.

ARTICLE 14

14.1 Each Shareholder entitled to attend the Meeting may also be represented in compliance with the law by a person appointed by written proxy. Incorporated entities and companies may attend the Meeting by way of a person appointed by written proxy. In order to simplify collection of proxies issued by Shareholders who are employees of the company or its subsidiaries and members of Shareholders associations incorporated under and managed pursuant to current legislation regulating proxies collection, notice boards for communications and rooms to allow proxies collection are made available to said associations according to terms and conditions agreed from time to time by the company with the associations representatives.

14.2 The Chairman of the Meeting has to assure the regularity of written proxies and, in general, the right to attend the Meeting.

14.3 The right to vote may also be exercised by mail according to the laws and regulations in force concerning this matter.

14.4 Eni S.p.A. shareholders' meetings are disciplined by Eni S.p.A.'s shareholders' meeting Regulation approved by the ordinary shareholders' meeting.

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ARTICLE 15

15.1 The Meeting is chaired by the Chairman of the Board of Directors, or in the event of absence or impediment, by the Managing Director; in absence of both, by another person, duly delegated by the Board of Directors, failing which the Meeting may elect its own Chairman.

15.2 The Chairman of the Meeting is assisted by a Secretary, who need not be a Shareholder, to be designated by the Shareholders present, and may appoint one or more scrutineers.

ARTICLE 16

16.1 The ordinary shareholders' meeting decides on all the matters for which it is legally entitled and authorises the transfer of the business.

16.2 Resolutions either at ordinary or extraordinary meetings, either on first, second or third call, must be taken with the majority required by the law in each case.

16.3 Resolutions of the Meeting taken in compliance with the law and these by-laws are binding for all Shareholders even if absent or dissenting.

16.4 The minutes of ordinary meetings must be signed by the Chairman and the Secretary.

16.5 The minutes of extraordinary meetings must be drawn up by a notary public.

ARTICLE 17

17.1 The company is managed by a Board of Directors consisting of no fewer than three and no more than nine members. The shareholders' meeting determines the number within these limits. The Minister of Economy and Finance in agreement with the Minister of Productive Activities may appoint another member, with no voting rights, pursuant to Article 6, second Paragraph, letter d), of the by-laws.

17.2 The Board of Directors is appointed for a period of up to three financial years; this term lapses on the date of the shareholders’ meeting convened to approve the financial statements of the last year of their office. They may be reappointed.

17.3 The Board members, except for the one appointed pursuant to Article 6.2, letter d) of these by-laws, are appointed by the shareholders' meeting on the basis of lists presented by Shareholders and by the Board of Directors, in such lists the candidates must be listed in numerical order. Should the retiring Board of Directors present its own candidate list, it must be deposited at the company's registered office and published in at least three Italian newspapers of general circulation, two of them business dailies, at least twenty days before the date set for the first call of the shareholders' meeting. Candidate lists presented by Shareholders must be deposited at the company registered office and published as indicated in the foregoing at least ten days before the date set for the first call of the shareholders' meeting.

Each Shareholder may present or take part in the presenting of only one candidate list and each candidate may appear in one list only or he will be ineligible. Companies that are controlling entities or are under common control, as defined by Article 2359, first Paragraph, of the Civil Code, by the same entity of the company presenting a list shall not present nor take part in the presentation of another candidate list. Each candidate may appear in one list only or he will be ineligible. Only those Shareholders who, alone or together with other Shareholders, represent at least 1 per cent of voting share capital at the ordinary shareholders' meeting may present candidate lists. In order to

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demonstrate the title on the number of shares necessary to present candidate lists, the Shareholders must present and/or deliver to the company registered office a copy of the certification issued by the authorised financial intermediaries that are depositaries of their shares at least five days prior to the date set for the first call of the shareholders' meeting.

Together with each list, within the aforementioned time limits, statements must be presented in which each candidate accepts his nomination and attests, in his own responsibility, that he possesses the requisites required by the norms in force for the corresponding appointments and that causes for his ineligibility and incompatibility are non existing.

Each person entitled to vote may vote for a candidate list only.

Board members will be elected in the following manner:

1. seven tenths of the members to be elected will be drawn out from the candidate list that receives the majority of votes expressed by the Shareholders in the numerical order in which they appear on the list, rounded off in the event of a fractional number to the next lower number;
2. the remaining Board members will be drawn out from the other candidate lists; to this purpose the votes obtained by each candidate list will be divided by one or two depending on the number of the members to be elected. The quotients thus obtained will be assigned progressively to candidates of each said list in the order given in the lists themselves. Quotients thus assigned to candidates of said lists will be set in one decreasing numerical order. Those who obtain the highest quotients will be elected. In the event that more than one candidate obtains the same quotient, the candidate elected will be the one of the list that has not hitherto had a Board member elected or that has elected the least number of Board members. In the event that none of the lists has yet elected a Board member or that all of them have elected the same number of Board members, the candidate from all such lists who has obtained the largest number of votes will be elected. In the event of equal list votes and equal quotient, a new vote will be taken by the entire shareholders' meeting and the candidate elected will be the one who obtains a simple majority of the votes;
3. to appoint Board members for any reason not covered by the terms of the aforementioned procedure, the shareholders' meeting will make a resolution with the majorities prescribed by the law.

17.4 The shareholders' meeting may, even during the Board's term of office, change the number of members of the Board of Directors, always within the limits set forth in paragraph 17.1 above, and make the relating appointments. Board members so elected will expire at the same time as the rest of the Board.

17.5 If during the term of office one or more members leave the Board, action will be taken in compliance with Article 2386 of the Civil Code with exception of the Board member appointed pursuant to Article 6.2 letter d) of these by-laws. If a majority of members leaves the Board, the whole Board will be considered lapsed and the Board must promptly call a shareholders' meeting to appoint a new Board.

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ARTICLE 18

18.1 If the shareholders' meeting has not appointed a Chairman, the Board will elect one of its members. The Director appointed pursuant to Article 6, second Paragraph, letter d) of the by-laws cannot be appointed as Chairman.

18.2 The Board, at the Chairman's proposal, appoints a Secretary, who need not belong to the company.

ARTICLE 19

19.1 The Board meets in the place indicated in the notice whenever the Chairman or, in case of absence or impediment, the Managing Director deems necessary, or when written application has been made by the majority of the members. The Board of Directors may be convened also pursuant to Article 28.4 of the by-laws. The Board of Directors' meetings may be held by video or teleconference if each of the participants to the meetings may be identified and if each is allowed to follow the discussion and take part to it in real time. If said conditions are met, the Meeting is considered duly held in the place where the Chairman and the Secretary are present.

19.2 Usually notice is given at least five days in advance. In cases of urgency notice may be sent earlier. The Board of Directors decides on how to convene its meetings.

19.3 The Board of Directors must likewise be convened when so requested by at least two Board members or by one member if the Board consists of three members to decide on a specific matter considered of particular importance, pertaining to management, matter to be indicated in the request.

ARTICLE 20

20.1 The Chairman of the Board or, in his absence, the oldest Board member in attendance chairs the Meeting.

ARTICLE 21

21.1 A majority of members of the Board having a voting right must be present for a Board meeting to be valid.

21.2 Resolutions are taken with the majority of votes of the Board members having a voting right present; should votes be equal, the person who chairs the Meeting has a casting vote.

ARTICLE 22

22.1 Resolutions of the Board are entered in the minutes, which are recorded in a book kept for that purpose pursuant to the law, and said minutes are signed by the Chairman of the Meeting and by the Secretary.

22.2 Copies of the minutes are bona fide if they are signed by the Chairman or the person acting for him and countersigned by the Secretary.

ARTICLE 23

23.1 The Board of Directors is invested with the fullest powers for ordinary and extraordinary management of the company and, in particular, the Board has the power to perform all acts it deems advisable for the implementation and achievement of the company objects, except for the acts that the law or these by-laws reserve for the shareholders' meeting.

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23.2 The Board of Directors is allowed to resolve on the following matters:

- the merger and the demerger of at least 90% directly owned subsidiaries;

- the establishment and winding up of branches;

- the amendment to the by-laws in order to comply with the current legislation.

23.3 The Board of Directors and the Managing Director report timely, at least every three months and however in the Board of Directors meetings, to the Board of Statutory Auditors on the activities and on the most relevant operations regarding the operational, economic and financial management of the company and its subsidiaries; in particular the Board of Directors and the Managing Director report to the Board of Statutory Auditors on operations entailing an interest on their behalf or on behalf of third parties.

ARTICLE 24

24.1 The Board of Directors delegates its powers to one of its members with the exception of the Director appointed pursuant Article 6, second Paragraph, letter d) of the by-laws, in compliance with the limits set forth in Article 2381 of the Civil Code. In addition the Board of Directors may delegate powers to the Chairman for researching and promoting integrated projects and strategic international agreements. The Board of Directors may at any time withdraw the delegations of powers hereon; if the Board of Directors withdraws powers delegated to the Managing Director, a new Managing Director is simultaneously appointed.
The Board of Directors, upon proposal of the Chairman and in agreement with the Managing Director, may confer powers for single acts or categories of acts to other members of the Board of Directors with the exception of the Director appointed pursuant Article 6, second Paragraph, letter d) of the by-laws. The Chairman and the Managing Director, in compliance with the limits of their delegations, may delegate and empower company employees or persons not belonging to the company to represent the company for single acts or specific categories of acts.

Further, on proposal of the Managing Director and in agreement with the Chairman, the Board of Directors may also appoint one or more General Managers and determines the powers to be conferred to them.

ARTICLE 25

25.1 Legal representation towards any judicial or administrative authority and towards third parties, together with the company signature, are vested either onto the Chairman or the Managing Director.

ARTICLE 26

26.1 The Chairman and the members of the Board are remunerated in an amount established by the ordinary shareholders' meeting. Said resolution, once taken, will remain valid for subsequent business years until the shareholders' meeting decides otherwise.

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ARTICLE 27

27.1 The Chairman:

a) represents the company according to the provisions of Article 25.1;

b) chairs the shareholders' meeting pursuant to Article 15.1;

c) convenes and chairs meetings of the Board of Directors pursuant to Articles 19.1 and 20.1;

d) ascertains whether Board resolutions have been implemented;

e) exercises the powers delegated to him by the Board of Directors pursuant to Article 24.1 of these by-laws.

ARTICLE 28

28.1 The Board of Statutory Auditors consists of five effective members and two alternate members. The Auditors shall have the professional and honour requirements set forth by the Ministerial Decree No. 162, dated March 30, 2000 issued by the Ministry of Justice.

Pursuant to the aforementioned Ministerial Decree, the matters strictly connected to those of interest of the Company are: companies law, business economics and corporate finance.

Pursuant to said Ministerial Decree, the sectors strictly connected with those of interest of the Company are the engineering and geological sectors.

Those who are already appointed effective auditor or supervisory board member or audit committee member in at least five companies with securities listed on regulated securities markets other than Eni S.p.A. subsidiaries may not be appointed Statutory Auditor; if elected, they will lapse.

28.2 The effective Auditors and the alternate Auditors are appointed by the shareholders' meeting on the basis of lists presented by the Shareholders; in such lists candidates are listed in numerical order. For the presentation, deposit and publication of candidate lists the procedures set forth in Article 17.3 shall apply.

Lists shall be divided into two sections: the first one for the candidates to be appointed effective Auditors and the second one for the candidates to be appointed alternate Auditors. At least the first candidate of each section shall be chartered accountant and have exercised audit activities for not less than three years.

Three effective Auditors and one alternate Auditor will be drawn from the list that obtains the majority of votes. The other two effective Auditors and the other alternate Auditor will be appointed pursuant to Article 17.3, letter b) of the by-laws. The procedure described in this last Article shall be applied to each section of the lists involved separately.

The shareholders’ meeting appoints the Chairman of the Board of Statutory Auditors among the effective Auditors appointed.

To appoint effective or alternate Auditors for any reason not elected according to the terms of the aforementioned procedure, the shareholders' meeting will resolve with the majorities prescribed by the law.

Should an effective Auditor drawn out from the candidate list that receives the majority of votes expressed by the Shareholders be replaced, he will be succeeded by the alternate Auditor drawn out from the same candidate list; should an effective Auditor drawn out from the other candidate list be replaced, he will be substituted pursuant to Article 17.3, letter b) of the by-laws.

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28.3 Retiring Auditors may be reelected.

28.4 Subject to a previous communication to the Chairman of the Board of Directors, the Board of Statutory Auditors is empowered to convene the shareholders' meeting and the Board of Directors. At least two effective Auditors are empowered to convene the shareholders' meeting and the Board of Directors, too.

ARTICLE 29

29.1 The business year ends on December 31 every year.

29.2 At the end of each business year, the Board of Directors sees to the preparation of the company financial statements in conformity with the law.

29.3 The Board of Directors may, during the course of the business year, pay interim dividends to the Shareholders.

ARTICLE 30

30.1 Dividends not collected within five years of the day on which they are payable will be prescribed in favour of the company and allocated to reserves.

ARTICLE 31

31.1 In the event the company is wound up, the shareholders' meeting will decide the manner of liquidation, appoint one or more liquidators and determine their powers and remuneration.

ARTICLE 32

32.1 For matters not expressly regulated by these by-laws, the norms of the Civil Code and specific laws concerning these matters will apply.

32.2 The Ministry of Economy and Finance may retain his shareholding in the company share capital in excess of the limit set forth in Article 6.1 of these by-laws and will not be subject to the provisions of said Article 6.1 for the period set by the law.

ARTICLE 33

33.1 The company retains all assets and liabilities held before its transformation by the public law agency Ente Nazionale Idrocarburi.

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PRESS RELEASE

 

Eni: presentation of the effects of the adoption of International Financial Reporting Standards (IFRS)

Eni has illustrated today the effects of the adoption of International Financial Reporting Standards (IFRS)² on its 2004 consolidated financial statements. Starting in 2005, companies with securities listed on regulated markets of Member States of the European Union are required to prepare their consolidated financial statements in accordance with international financial reporting standards.

The adoption of IFRS has no impact on Eni’s financial and industrial targets.

Following the adoption of IFRS, Eni prepared a consolidated opening balance sheet as of January 1,2004, applying the retrospective methodology³, which shows an increase in net capital employed of euro 2.6 billion with respect to the consolidated balance sheet as of December 31, 2003 (from euro 41.9 billion to euro 44.5 billion). This increase is primarily related to: (i) the review of the useful life of natural gas transport and distribution network and compression stations on a retrospective basis. This revision was carried out applying the useful life generally accepted internationally until year 1999 and the useful life assessed by the Authority for electricity and natural gas in its decision of May 2000 starting in year 2000 onwards (the impact of this revision amounts to euro 2.5 billion); (ii) the application of the weighted average cost method in the evaluation of hydrocarbon inventories instead of the previously applied Last In First Out (LIFO) method (with an impact of euro 0.8 billion); (iii) the capitalization of financial charges incurred that could have been saved if capital expenditure had not been made (with an impact of euro 0.6 billion); and (iv) the exclusion from consolidation, consistently with US GAAP, of certain joint ventures that were previously consolidated on a proportional basis (with an impact of euro 0.2 billion). These increases were partly offset by the recognition of deferred income taxes (with an impact of euro 1 billion) and the exclusion from consolidation of Saipem (euro 0.6 billion), due to the circumstance that for reporting purposes IFRS prohibit to consolidate on a line-by-line basis an affiliate of which the parent company does not hold the majority of voting rights (Eni’s share in Saipem is 43%), even though it exercises control at this affiliate’s Annual General Meetings due to a substantial ownership interest. This applies also to US GAAP.

 

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(2)		Data of 2004 income statement and opening balance sheet as of January 1, 2004 restated according to IFRS may be modified after the completion of the audit by Eni’s principal auditor PricewaterhouseCoopers.
(3)		Under the retrospective methodology, assets and liabilities are aligned to those book values that would have been determined if IFRS had been applied from their initial recognition.

 

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In connection with the adjustments described, with respect to Eni’s consolidated balance sheet as of December 31, 2003, at January 1, 2004 Eni’s shareholders’ equity, including minority interest, increases by euro 2.4 billion (from euro 28.3 billion to euro 30.7 billion), net borrowings increase by euro 0.2 billion (from euro 13.5 billion to euro 13.7 billion) and net income decreases by euro 0.2 billion (from euro 7.3 billion to euro 7.1 billion) due mainly to the adjustments of the consolidated opening balance sheet as of January 1, 2004.

Contacts

Internet page: www.eni.it

Telephone: +39-0659821

Toll-free number: 800940924

e-mailbox: segreteriasocietaria.azionisti@eni.it

 

Investor Relations Team:

Jadran Trevisan, Manager
Antonio Pinto - Marco Porro
e-mailbox: investor.relations@eni.it 
Eni S.p.A.
Piazza Vanoni, 1
20097 San Donato Milanese (MI) – Italia
tel.: 0252051651 - fax: 0252031929

 

Eni Press Room:

Luciana Santaroni, Manager

Domenico Negrini - Giuseppe Currà

tel.: 0252031287

luciana.santaroni@eni.it

domenico.negrini@eni.it

giuseppe.currà@eni.it

* * *

 

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Contents

 

Fact Book

2004

 

 

 

 

 

 

 

 

 

 

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Contents

Eni’s Fact Book is a supplement to Eni’s
2004 Annual Report and intends
to provide supplemental economic
and operating information.
It contains forward-looking statements
about return on capital employed,
capital expenditure, project
implementation, production
and sales growth. These statements
are based on current information,
industrial plans and expectations.
Actual results may differ materially,
and plans and expectations
could change, depending
on a variety of factors.
These factors could include: changes
in the demand for, supply of,
and market prices of crude oil,
natural gas and refined products;
changes in refining margins
and marketing margins;
success in partnering,
in implementing projects
and internal plans;
reliability of operating facilities
and external services; effects
of regulations of the hydrocarbon
and electricity generation industries
as well as environmental regulations;
success of commercial negotiations;
and political events.

April 29, 2005

 

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Contents

		5		Activities
		6		Integration
		7		Main data
Exploration & Production		10		Overview
		13		Production
		25		Exploration areas
		29		Development projects
		36		Main data
Gas & Power		42		Natural gas overview
		44		The Italian Natural Gas System
		51		Development projects
		54		Power generation overview
		55		Main data
Refining & Marketing		58		Overview
		60		Refining
		62		Logistics
		63		Marketing
		66		Other businesses
		67		Main data
Oilfield Services Construction		70		Oilfield Services and Construction
and Engineering		78		Engineering
New technologies		81		Overview
Tables		85		Financial data
		94		Employees
		95		Supplemental oil and gas information
		113		Energy conversion table
		114		Quarterly information
Abbreviations		bbls		barrels
		bbls/d		barrels/day
		bn		billion
		boe		barrels of oil equivalent
		boe/d		barrels of oil equivalent/day
		cm		cubic meters
		d		day
		EPC		Engineering Procurement Construction
		EPIC		Engineering Procurement Installation Construction
		FEED		Front End Engineering Design
		FPSO		Floating Production Storage and Offloading System
		GWh		gigawatthour
		km		kilometers
		ktoe		thousand tons of oil equivalent
		LNG		liquefied natural gas
		LPG		liquefied petroleum gas
		mn		million
		NLG		natural gas liquids
		no.		number
		PCA		Production Concession Agreement
		PMC		Project Management Consultant
		ppm		parts per million
		PSA		Production Sharing Agreement
		th		thousand
		ton		metric ton
		TWh		terawatthour
		y		year

 

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Eni		With a market capitalization amounting to over euro 69 billion as of December 31, 2004, Eni is one of the most important integrated energy companies in the world which operates in the oil and gas industry, power generation and oilfield services, construction and engineering. In these businesses it has a strong edge and leading international market positions.
STRATEGIES Growth in core business Continue the integration of core activities Focus on operating efficiency and efficacy Maximize return for shareholders		Eni’s strategic objective is to increase its producing scale in the oil & gas business, while, at the same time, developing midstream activities in order to support this growth. Eni intends to maintain strong hydrocarbon production growth by leveraging in particular on the contribution of large projects in the development phase and increasing efficiency both in exploration and in development/production through the selection of exploration projects, the geographic concentration of production, the rationalisation of marginal assets and assets with low development prospects, strengthening its role as operator. Special attention will be paid to reserve replacement in order to support the sustainability of long-term growth. In natural gas activities Eni intends to expand sales on European markets and implement a break-through strategy in the LNG business with the objective of attaining a worldwide presence and exploiting its natural gas reserves. Eni intends to maintain the leadership in the Italian natural gas market through a proactive approach towards the liberalization process ongoing, a higher degree of flexibility and the diversification of its import system, the gradual reduction of its presence in regulated businesses and the completion in time of the plan of expansion of power generation capacity. In downstream oil Eni intends to complete the strategic repositioning of its Agip branded distribution network in Italy, leveraging on the sale/closure of marginal service stations and developing non oil activities, while developing/consolidating its presence in target European markets where it can leverage on operating synergies and a well established brand. In refining Eni intends to increase the conversion rate and flexibility of refineries in order to produce high quality fuels anticipating the environmental requirements of new European regulations. In oilfield services, construction and engineering activities Eni intends to concentrate its presence in the strategic segment of large projects for the development of offshore hydrocarbon reserves and construction of industrial plants and infrastructure based on the application of technologies for hydrocarbon production, treatment and transmission and natural gas and heavy crudes upgrading. Key growth targets set for 2008 are the following: (i) daily hydrocarbon production of about 2 million boe corresponding to a compound average growth rate higher than 5% in the 2004-2008 period (net of the effects of portfolio rationalization); (ii) the sale of 92 billion cubic meters of gas in European markets. Overall natural gas sales, including natural gas volumes produced by the Exploration & Production segment outside Italy, are expected to reach 120 billion cubic meters in 2008 (102 billion in 2004); (iii) the reaching of an installed power generation capacity of about 5.3 gigawatts by 2007. Eni intends to reduce capital employed in non core businesses and to improve operational efficiency and efficacy targeting cost savings of about euro 3.4 billion at 2006 (over 80% of which already achieved in the 1999-2004 period). The improvement in competitive positioning will be achieved also through the integration of its core activities. Strong attention will be devoted to R&D, the key factor for the future development of the oil industry. Eni intends to invest over euro 1 billion in the next four years. Expenditure will be focused on those strategic projects through which Eni can achieve competitive advantages in the medium to long-term, in particular in the areas of exploration and recovery of hydrocarbons and of upgrading of heavy crudes and natural gas. Eni intends to support its growth strategy by implementing a four year capital expenditure plan of euro 26.9 billion, about 90% of which will be concentrated in the Exploration & Production, Gas & Power and Refining & Marketing segments.

 

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activities
exploration & production		Eni is engaged in exploration and production of hydrocarbons in Italy, North Africa, West Africa, the North Sea, the Gulf of Mexico and Australia. It is also engaged in areas with great development potential such as the Caspian Sea, the Middle and Far East. In 2004, Eni produced 1,624,000 boe per day and, at December 31, 2004, it had proved reserves of 7,218 million boe with a life index of 12.1 years.
gas & power		Eni is engaged in natural gas supply, transmission, distribution and sale. In 2004, sales of natural gas (including own consumption and Eni’s share of sales of affiliates) totaled 84.5 billion cubic meters. Eni’s gas pipeline network is about 30,000-kilometer long in Italy, while outside Italy Eni holds transmission rights on over 5,000 kilometers of pipelines. In 2004, Eni transported 80.41 billion cubic meters of natural gas on the Italian network, of which 28.26 billion on behalf of third parties. Through EniPower, Eni operates in electricity generation and sale with a total installed capacity of about 3.3 gigawatts. In 2004 Eni sold about 17 terawatthours of electricity (of which about 13.85 of produced electricity), corresponding to over 5% of the Italian domestic market, and 10 million tonnes of steam.
refining & marketing		Eni is engaged in the refining and marketing of refined products mainly in Italy and the rest of Europe. Through its Agip and IP brands, Eni is leader in the retail market in Italy, with a 36.3% market share. In 2004, sales of refined products totaled 53.5 million tonnes, of which 30.7 millions in Italy. At December 31, 2004 the balanced refining capacity of Eni’s wholly-owned refineries amounted to 504,000 barrels per day.
oilfield services construction and engineering		Eni through Saipem (Eni’s interest 43%) is one of the world leaders in the construction of large offshore projects for the oil industry and in subsea pipelaying and construction of production platforms. Eni owns and operates a fleet of world class marine service vessels, able to drill wells over 9,000 meters deep in water depths of up to over 3,000 meters and to lay pipelines in water depths up to 3,000 meters. Eni through Snamprogetti (Eni’s interest 100%) is one of the world’s largest operators in the construction of plants for the oil and petrochemical industries based on advanced operating and technological know-how in particular in hydrocarbon production, treatment and transmission as well as natural gas and heavy crudes upgrading.

 

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		integration
Eni’s business portfolio is characterized by a strong vertical integration, which allows for efficient long-term planning. This advantage is essential in the uncertain scenario of international oil prices and reduces the impact of price volatility on Eni’s results.

 

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Key financial data

(million euro)

			1993		1994		1995		1996		1997		1998		1999		2000		2001		2002		2003		2004

Net sales from operations			27,310			25,740			29,381			29,790			31,359			28,341			31,008			47,938			49,272			47,922			51,487			58,382
Operating income (1)			2,950			3,839			5,316			4,960			5,345			3,810			5,480			10,772			10,313			8,502			9,517			12,463
Exploration      & Production			1,536			1,924			2,094			2,612			2,590			594			2,834			6,603			5,984			5,175			5,746			8,017
Gas & Power			1,605			1,606			1,073			2,024			2,012			2,513			2,580			3,178			3,672			3,244			3,627			3,463
Refining & Marketing			553			316			456			214			578			730			478			986			985			321			583			965
Petrochemicals			(406	)		187			1,042			101			187			-			(362	)		4			(415	)		(126	)		(176	)		271
Oilfield Services      Construction      and Engineering			161			129			144			159			169			198			149			144			255			298			311			260
Other activities																														(214	)		(293	)		(244	)
Corporate and      financial companies			(315	)		(136	)		(118	)		(98	)		(138	)		(168	)		(199	)		(143	)		(168	)		(196	)		(281	)		(269	)
Activities to be divested			(184	)		(187	)		(5	)		(52	)		(53	)		(57	)
Net income			125			1,659			2,235			2,299			2,643			2,328			2,857			5,771			7,751			4,593			5,585			7,274
Net cash flow provided by operating activities			4,164			4,454			6,595			5,029			6,515			6,864			8,248			10,583			8,084			10,578			10,827			12,362
Capital expenditure and investments			5,251			3,773			3,977			3,959			4,362			5,589			5,597			9,815			11,270			9,414			13,057			7,819
Capital expenditure			5,064			3,523			3,680			3,792			4,169			5,152			5,483			5,431			6,606			8,048			8,802			7,503
Investments			187			250			297			167			193			437			114			4,384			4,664			1,366			4,255			316
Shareholders’ equity including minority interests			9,170			10,939			12,779			13,969			16,244			17,390			19,749			24,073			29,189			28,351			28,318			32,466
Net borrowings			16,605			14,062			10,789			9,559			8,050			7,070			6,267			7,742			10,104			11,141			13,543			10,228
Net capital employed (1)			25,775			25,001			23,568			23,528			24,294			24,460			26,016			31,815			39,293			39,492			41,861			42,694
Exploration      & Production			6,157			5,504			4,903			5,554			6,469			6,862			9,279			12,646			18,252			17,318			17,340			17,992
Gas & Power			7,372			7,996			8,191			8,121			8,518			8,289			8,481			10,721			12,777			12,488			15,617			16,160
Refining & Marketing			3,857			4,682			4,705			4,249			4,071			4,186			4,028			4,563			4,476			5,093			5,089			4,343
Petrochemicals			5,645			4,963			4,150			3,504			3,099			2,956			2,604			2,581			1,075			2,130			1,821			2,033
Oilfield Services      Construction      and Engineering			200			(57	)		(246	)		(63	)		195			392			1,103			1,395			1,635			2,335			2,119			2,084
Corporate and      financial companies      and other activities			2,544			1,913			1,865			2,163			1,942			1,775			521			(91	)		1,078			128			(125	)		82
Return On Average Capital Employed (ROACE)	(%)		3.7			8.8			11.5			11.4			12.2			10.7			12.5			21.5			23.9			13.7			15.6			18.8
Leverage			1.81			1.29			0.84			0.68			0.5			0.41			0.32			0.32			0.35			0.39			0.48			0.31

 

Key market indicators

			1993		1994		1995		1996		1997		1998		1999		2000		2001		2002		2003		2004

Average price of Brent dated crude oil (1)			17.00			15.82			17.04			20.67			19.10			12.74			17.87			28.39			24.46			24.98			28.84			38.22
Average EUR/USD exchange rate (2)			1.232			1.201			1.189			1.255			1.137			1.115			1.067			0.924			0.896			0.946			1.131			1.244
Average price in euro of Brent dated crude oil			13.89			13.17			14.33			16.47			16.80			11.43			16.75			30.73			27.30			26.41			25.50			30.72
Average European refining margin (3)			2.58			1.74			1.18			1.52			1.86			1.99			1.21			3.99			1.97			0.80			2.65			4.02
Euribor - three-month euro rate	(%)		10.3			8.6			10.3			8.8			6.9			5.0			3.0			4.4			4.3			3.3			2.3			2.1

 

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Key operating data

			1993		1994		1995		1996		1997		1998		1999		2000		2001		2002		2003		2004

Exploration & Production
Proved reserves of hydrocarbons at period end	(mn boe)		4,175			4,224			4,318			4,675			5,073			5,255			5,534			6,008			6,929			7,030			7,272			7,218
Reserve life index	(y)		12.8			12.4			11.9			13.1			13.6			13.4			14.0			14.0			13.7			13.2			12.7			12.1
Daily production of hydrocarbons	(th boe/d)		901			941			982			984			1,021			1,038			1,064			1,187			1,369			1,472			1,562			1,624
Gas & Power
Sales of natural gas to third parties	(bn cm)		48.65			47.43			52.55			56.03			55.94			58.41			62.92			62.63			63.72			64.12			69.49			73.43
Own consumption of natural gas	(bn cm)																							2.00			2.00			2.02			1.90			3.70
Sales to third parties and own consumption	(bn cm)																							64.63			65.72			66.14			71.39			77.13
Sales of natural gas of affiliates and relevant companies (Eni’s share)	(bn cm)								0.11			0.11			0.13			0.16			0.16			0.87			1.38			2.40			6.94			7.32
Total sales and own consumption of natural gas	(bn cm)		48.65			47.43			52.66			56.14			56.07			58.57			63.08			65.50			67.10			68.54			78.33			84.45
Natural gas transported on behalf of third parties in Italy	(bn cm)		1.28			1.32			1.48			2.42			4.35			6.07			6.90			9.45			11.41			19.11			24.63			28.26
Electricity production sold	(TWh)																							4.77			4.99			5.00			5.55			13.85
Refining & Marketing
Products available from processing	(mn ton)		33.70			40.50			38.10			37.80			36.40			40.10			38.31			38.89			37.78			35.55			33.52			35.75
Balanced capacity of wholly-owned refineries at period end	(th bbl/d)		824			824			824			664			664			664			664			664			664			504			504			504
Utilization rate of balanced capacity of wholly-owned refineries	(%)		90			89			86			87			94			103			96			99			97			99			100			100
Sales of refined products	(mn ton)		53.10			52.30			51.90			51.36			51.60			54.19			51.82			53.46			53.24			52.02			49.91			53.54
Service stations at period end (in Italy and outside Italy)	(units)		13,705			13,699			13,574			13,150			12,756			12,984			12,489			12,085			11,707			10,762			10,647			9,140
Average throughput per service station (in Italy and outside Italy)	(th liters/y)		1,399			1,402			1,431			1,448			1,463			1,512			1,543			1,555			1,621			1,674			1,771			1,967
Oilfield Services Construction and Engineering
Orders acquired	(mn euro)		1,586			2,710			2,616			2,965			3,865			3,248			2,600			4,726			3,716			7,852			5,876			5,784
Order backlog at period end	(mn euro)		2,598			3,471			4,035			4,374			5,180			4,934			4,439			6,638			6,937			10,065			9,405			8,521
Employees at period end	(units)		108,556			91,544			86,422			83,424			80,178			78,906			72,023			69,969			72,405			80,655			76,521			71,497

 

Share data

			1993		1994		1995		1996		1997		1998		1999		2000		2001		2002		2003		2004

Net income (1)	(euro)		0.03			0.41			0.56			0.57			0.66			0.58			0.71			1.44			1.98			1.20			1.48			1.93
Dividend	(euro)					0.121			0.222			0.248			0.289			0.310			0.362			0.424			0.750			0.750			0.750			0.90
Dividends paid (2)	(mn euro)					483			890			992			1,157			1,239			1,446			1,664			2,876			2,833			2,828			3,388
Cash flow	(euro)		1.04			1.11			1.65			1.26			1.63			1.72			2.06			2.65			2.07			2.76			2.87			3.28
Dividend yield (3)	(%)								4.0			3.1			2.8			2.9			3.4			3.2			5.6			5.2			5.1			4.9
Net income per ADS (4)	(US dollar)		0.18			2.48			3.41			3.65			3.60			3.40			3.61			6.79			8.82			6.29			9.31			13.05
Dividend per ADS (4)	(US dollar)					0.71			1.40			1.43			1.58			1.61			1.70			1.81			3.71			4.29			4.56			6.09
Cash flow per ADS (4)	(US dollar)		5.87			6.65			10.06			7.98			8.88			10.04			10.41			12.45			9.20			14.49			18.05			22.19
Dividend yield per ADS (3)	(%)								4.2			2.8			2.8			2.6			3.2			3.0			6.2			5.8			5.0			5.0
Pay-out	(%)					29			40			43			44			53			51			29			37			62			51			47
Number of shares at December 31 representing share capital	(106)		3,999.6			3,999.6			3,999.6			3,999.6			3,999.6			4,000.1			4,001.1			4,001.1			4,001.3			4,001.8			4,002.9			4,004.4
Average number of shares outstanding in the year (5)	(106)		3,999.6			3,999.6			3,999.6			3,999.6			3,999.6			4,000.1			4,001.3			3,995.1			3,911.9			3,826.9			3,778.4			3,771.7

 

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Share information

			1995 (1)		1996		1997		1998		1999		2000		2001		2002		2003		2004

Share price - Milan Stock Exchange
High	(euro)		5.78			8.33			11.36			13.80			12.60			14.50			15.60			17.15			15.75			18.75
Low	(euro)		5.09			5.67			8.06			9.19			10.18			9.54			11.56			12.94			11.88			14.72
Average	(euro)		5.47			7.05			9.79			11.28			11.40			11.78			14.10			15.29			13.64			16.94
End of period	(euro)		5.72			8.06			10.43			11.21			10.88			13.64			14.05			15.15			14.96			18.42
ADS price (2) - New York Stock Exchange
High	(US dollar)		34.38			53.00			63.13			73.50			69.00			64.88			69.70			82.11			94.98			126.45
Low	(US dollar)		30.88			34.38			48.13			50.50			52.38			46.56			52.50			60.90			66.15			92.35
Average	(US dollar)		32.85			44.16			55.62			63.04			60.94			54.18			63.22			72.20			77.44			105.60
End of period	(US dollar)		34.25			51.63			57.06			67.75			55.13			64.31			61.96			78.49			94.98			125.84
Average daily exchanged shares	(mn share)		6.9			5.9			7.9			11.1			12.3			17.3			17.4			19.4			22.0			20.0
Value	(mn euro)		38.3			42.7			78.8			126.0			141.0			203.9			245.0			295.4			298.5			338.7
Number of shares outstanding at period end (3)	(106)		3,999.6			3,999.6			3,999.6			4,000.1			4,001.1			3,956.7			3,846.9			3,795.1			3,772.3			3,770.0
Market capitalization: (4)
EUR	(billion)		22.9			32.2			41.7			44.8			43.5			54			54			57.5			56.4			69.4
USD	(billion)		27.9			40.9			45.5			52.5			44			50.7			48.1			60.4			71.1			94.9

 

Data on Eni share placements

													1995		1996		1997		1998		2001

Offer price	(euro/share)																	5.42			7.40			9.90			11.80			13.60
Number of shares placed	(106)																	601.9			647.5			728.4			608.1			200.1
of which through bonus shares	(106)																				1.9			15.0			24.4			39.6
Percentage of share capital (1)	(%)																	15.0			16.2			18.2			15.2			5.0
Proceeds	(mn euro)																	3,254			4,596			6,869			6,714			2,721

Methodological note: On June 1, 2001 Eni Shareholders’ Meeting resolved to convert the nominal value of Eni shares into euro and to group two shares of nominal value 0.5 euro into one share with nominal value one euro. In order to make an homogeneous comparison possible, data presented in the “Share data”, “Share Information” and “Data on Eni Share Placements” tables were calculated assuming that the above mentioned grouping occurred starting from the first year of each table.

 

 

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exploration & production

 

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MAIN RESULTS

Hydrocarbon production was 1,624,000 boe/day with a 62,000 boe increase over 2003 (up 4% which becomes 6.4% without taking into account the effect on prices in Production Sharing Agreements - PSA); in the fourth quarter of 2004 production amounted to 1.7 million boe/day. Eni intends to maintain a strong production growth rate in the medium-term leveraging in particular on the contribution of the great projects in the development phase and targeting a production level of approximately 2 million boe/day in 2008, with a compound average growth rate of over 5%

At December 31, 2004 Eni’s proved hydrocarbon reserves were 7,218 million boe with a replacement rate of 132% without taking into account the effects of higher realized oil prices in PSAs and asset divestment; this rate declines to 91% net of these effects. In the medium-term the replacement of reserves will be supported by the relevant mineral potential of Eni’s assets located in core areas such as the Caspian Sea, West and North Africa and the Norwegian section of the North Sea. The average reserve life index was 12.1 years

Within the North Caspian Sea PSA, in March 2005 Eni’s interest in the operated project increased from 16.67% to 18.52% following the pre-emptive right exercised in May 2003 for the purchase of the share of British Gas that left the project. The development plan of the Kashagan field, approved by the Kazakh authorities on February 25, 2004, to be implemented in multiple phases aims at the production of recoverable reserves up to 13 billion barrels by means of partial reinjection of natural gas by 2008 with a total expenditure amounting to dollar 29 billion (dollar 5.4 billion being Eni’s share). At March 2005 contracts for the development of this field had been awarded for a total of dollar 6.7 billion. Production plateau is targeted at 1.2 million barrels/day. Appraisal activities performed confirmed the mineral potential of the discoveries made in the area under contract

Within the Western Libyan Gas Project production started at the onshore gas and liquid Wafa field, while development of the offshore Bahr Essalam field is underway with start-up expected in the first half of 2005. The two fields, holding recoverable reserves of approximately 1,750 million boe, will have a target production of 10 billion cubic meters/year of natural gas, of which 8 billion (Eni’s interest is 50%) will be exported to European markets through the underwater Greenstream gasline

In Angola in Block 15 (Eni’s interest 20%) in August 2004 the Hungo and Chocalho oil fields (with recoverable reserves of approximately 880 million barrels) started production within Phase A of the development project for the fields discovered in the area called Kizomba. Production is expected to peak at 43,000 barrels/day net to Eni by 2006. In this same area Phase B is underway, aimed at the development of the Kissanje and Dikanza fields with recoverable reserves of about 910 million barrels. Production is expected to start in the second half of 2005 and to peak at 43,000 barrels/day net to Eni by 2007

In Iran in October 2004 production of the natural gas and condensate South Pars field phases 4 and 5 (Eni is operator with a 60% interest) started. When fully operational production is expected to reach 20 billion cubic meters/year of gas and, through separation, one million tonnes/year of propane and butane and 80,000 barrels/day of condensates

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In Kazakhstan in June 2004 within the development plan of the Karachaganak field (Eni co-operator with a 32.5% interest) the first supplies of liquids produced were delivered to the Novorossiysk terminal on the Russian coast of the Black Sea. In October liquid production reached the average level of 70,000 barrels/day net to Eni. The field, holding recoverable reserves of 3.6 billion boe, is planned to be developed in further stages with the objective of increasing natural gas production sold and maintaining peak production

In February 2004 production started from the offshore gas and liquid Bayu Undan field (Eni’s interest 12.04%) located in the international cooperation area between Australia and East Timor with recoverable reserves of over 900 million boe. The second phase of the project entails production and development of natural gas reserves through the construction of an onshore LNG plant near Darwin in Australia and the export of LNG to the Japanese market. Production is scheduled to peak at about 18,000 boe/day net to Eni in 2009

In October 2004 production of the ROD and satellites oil fields (Eni operator with a 63.96% interest in the production phase) in the Eastern Desert of Algeria with recoverable reserves of approximately 280 million barrels, started. Production makes use of the nearby Bir Rebaa oil center operated by Eni. Production net to Eni is expected to reach a 28,000 barrels/day peak in 2005

Development of the Kristin gas and oil field (Eni’s interest 9%) located in the Norwegian Sea continued. The field holds over 500 million boe of recoverable reserves, is expected to start-up in late 2005 and to peak at 19,000 boe/day net to Eni in 2006

Rationalization of Eni’s mineral portfolio, aimed at increasing its value by focusing on strategic areas with good growth potential and leaving marginal areas, continued with the sale of assets mainly in the North Sea, Italy, Azerbaijan, Gabon and Mauritania

A total of 66 new exploratory wells were drilled (29.5 of which represented Eni’s share). Overall success rate was 52.1% (57.3% representing Eni’s share). The major discoveries were achieved in the Caspian Sea (in the area of the North Caspian Sea PSA), Nigeria (onshore), Egypt (offshore in the Gulf of Suez and in the Nile Delta), Italy (onshore in Sicily and Central Italy), Norway (Norwegian Sea) and in the deep offshore of Angola and Congo

Main financial data

(million euro)

			1995		1996		1997		1998		1999		2000		2001		2002		2003		2004

Net sales from operations			5,664			6,578			6,897			5,206			6,840			12,308			13,960			12,877			12,746			15,349
Operating income			2,094			2,612			2,590			594			2,834			6,603			5,984			5,175			5,746			8,017
Exploration expenditure			396			555			677			755			636			811			757			902			635			499
Acquisition of proved and unproved properties			5			292			95			103			752			416			67			317			31
Development costs and capital goods			1,184			816			1,550			2,024			1,880			2,312			3,452			4,396			5,015			4,413
Investments			24												10			2,511			4,149			31			1,076			46

 

Main operating data

			1995		1996		1997		1998		1999		2000		2001		2002		2003		2004

Proved hydrocarbon reserves	(mn boe)		4,318			4,675			5,073			5,255			5,534			6,008			6,929			7,030			7,272			7,218
oil and      condensates	(mn bbls)		2,402			2,484			2,844			2,881			3,137			3,422			3,948			3,783			4,138			4,008
natural gas	(mn boe)		1,916			2,191			2,229			2,374			2,397			2,586			2,981			3,247			3,134			3,210
Daily hydrocarbon production	(th boe/d)		982			984			1,021			1,038			1,064			1,187			1,369			1,472			1,562			1,624
oil and      condensates	(th bbls/d)		612			614			646			653			674			748			857			921			981			1,034
natural gas	(th boe/d)		370			370			375			385			390			439			512			551			581			590
Reserve life index	(years)		11.9			13.1			13.6			13.4			14.0			14.0			13.7			13.2			12.7			12.1

 

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production

Italy

In 2004, Eni’s hydrocarbon production in Italy totaled 271,000 boe/day and represented 17% of Eni’s total production. Eni’s exploration and development interests in Italy are concentrated in the Adriatic Sea, the Central Southern Apennines, Sicily and the Sicilian offshore and the Po Valley. Natural gas production averaged 191,000 boe/day and represented approximately 70% of Eni’s hydrocarbon production in Italy. Eni’s principal natural gas fields are located in the Adriatic Sea (Barbara, Angela/Angelina, Porto Garibaldi/Agostino, Cervia/Arianna, Porto Corsini, Regina and Bonaccia which collectively accounted for 54% of Eni’s natural gas production in Italy in 2004) and in the Ionian Sea (Luna, which accounted for 9%).
Daily production of oil in Italy averaged 80,000 barrels. Eni’s three major oil fields, Val d’Agri in Southern Italy, Villafortuna in the Po Valley and Gela in Sicily, represented 75% of Eni’s total oil production in Italy in 2004. Other oil fields are Aquila in the Adriatic offshore of Southern Italy, Rospo in the Adriatic Sea, Prezioso and Vega offshore southern Sicily, Giaurone and Ragusa in Sicily.
In the Val d’Agri the fourth treatment train of the oil center was started-up and three new wells are being drilled that add up to the existing 33 (19 of these are in production). Production is expected to peak at 73,000 boe/day net to Eni in 2006.
Within its portfolio rationalization process in May 2004 Eni sold the assets in exploration and production of natural gas of Società Petrolifera Italiana pA - SPI (Eni’s interest 99%) whose production in 2003 amounted to about 5,000 boe/day, consisting mainly of natural gas.
The achievement of full production of the Val d’Agri fields and the maintenance initiatives for natural gas production will partly offset declines of mature fields.

 

 

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North Africa

Eni has been present in Egypt since 1954 and is the leading international oil operator. In 2004, fields operated by Eni with a production of 472,000 boe/day (200,000 net to Eni) accounted for 40% of Egypt’s total annual hydrocarbon production.

 

Eni started operations in Libya in 1959 and is the leading international operator, with oil fields operated by Eni accounting for approximately 19% of Libya’s annual oil production. In 2004 Eni’s hydrocarbon production averaged 97,000 boe/day, of these 92% was oil. The main oil fields operated by Eni are Bu-Attifel (Eni’s interest 50%) onshore in the central-eastern desert and Bouri (Eni’s interest 30%) in the Mediterranean offshore facing Tripoli which accounted for 73% of Eni’s production in Libya.
In September 2004 production of gas and liquids started at the Wafa onshore field in permit NC-169 A. By year end production reached approximately 45,000 boe/day net to Eni (about 50% was natural gas). Development of the Bahr Essalam field located in the NC-41 permit in the Mediterranean offshore is underway, production is expected to start in mid-2005 within the joint development of the two fields (Eni’s interest 50%) (see “Development Projects” below).

 

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Early production was started in January 2004 at the Elephant (El Feel) oil field in the NC-174 onshore permit (Eni operator with a 33.33% interest) at 6,000 barrels/day net to Eni. The development of this field aims at reaching peak production of 150,000 barrels/day (27,000 net to Eni) in 2007. Production will be delivered to the Mellitah terminal through a 725-kilometer long pipeline with a 30-inch diameter, currently under construction.
In the medium term the reaching of full production of fields under development will lead to a significant increase in Eni’s hydrocarbon production in Libya.

Eni has been present in Algeria since 1981. In 2004, Eni’s oil production averaged 66,000 barrels/day. The principal oil producing fields operated by Eni are located in the Bir Rebaa area in the south-eastern desert: (i) BRN, BRW, BRSW, HBN, ROM, ZEK, ZEA and ROME, which accounted for approximately 48% of Eni’s production in 2004; (ii) ROD and satellites (Eni operator of the production phase with a 63.96% interest); production from this field started in October 2004 at 8,000 barrels/day net to Eni and is delivered to the Bir Rebaa oil center, currently under completion; peak production is expected at 70,000 barrels/day (28,000 net to Eni) in 2005. Recoverable reserves amount to approximately 280,000 barrels.
Other interests held by Eni are HBNS (Eni’s interest 12.25%) and Ourhoud (Eni’s interest 4.59%), which in 2004 accounted for approximately 39% of Eni’s production in Algeria.
In the medium term Eni’s oil production is expected to increase.

 

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West Africa

Eni has been present in Nigeria since 1962. In 2004, Eni’s hydrocarbon production averaged 161,000 boe/day and accounted for approximately 10% of Nigeria’s hydrocarbon production.
Eni’s principal producing fields in Nigeria are located in: (i) four onshore blocks (OML 60, 61, 62 and 63) in the Niger Delta (Eni’s interest 20%), which in 2004 accounted for 22% of Eni’s production in Nigeria; (ii) the offshore OML 125 block (Eni’s interest 50.19%), where the Abo field is located which produced over 13,000 barrels/day net to Eni. The development of other levels of the Abo field will allow to reach a production peak of 45,000 barrels/day (18,000 net to Eni) in 2007; (iii) the offshore OML 119 block (former OPL 91), operated through a service contract, where the Okono and Okpoho oil fields are located, which produced at the end of 2004 approximately 55,000 barrels/day (27,000 net to Eni).
The Bonga oil field located in offshore block OML 118, where Eni holds a 12.5% interest, is under development and start-up is expected at the end of 2005 (see “Development Projects” below).
Eni also holds a 5% interest in the 36 onshore blocks of NASE, the largest oil joint venture in the country. In 2004 production net to Eni of this joint venture accounted for about 50% of Eni’s production in Nigeria. The major development projects underway are the Cawthorne Channel and Forcados/Yokri oil fields. Peak production of oil from these fields at 90,000 barrels/day (5,000 net to Eni) is expected in 2006. Natural gas produced will be supplied to the Bonny liquefaction plant, starting in March 2005 at Cawthorne Channel (3.8 million cubic meters/day) and in October 2005 at Forcados/Yokri (2.3 million cubic meters/day).
Development initiatives are ongoing for guaranteeing natural gas supplies to the six trains of the Bonny’s liquefaction plant (three already operating, two with start-up expected in 2005) which will bring the completed plant to a production capacity of 26.5 billion cubic meters/year of LNG in 2007 (Eni’s interest 10.4%, see “Gas & Power - Development Initiatives” below). When the plant is in full operation, Eni will supply 24.1 million cubic meters/day of its natural gas.

 

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West Africa

These fields hold recoverable reserves of approximately 430 million boe; peak production is targeted at 100,000 barrels/day (11,000 net to Eni) in 2007.
The main field in the deep waters of Block 14 is Kuito which in 2004 produced approximately 57,000 barrels/day (10,000 net to Eni). In this block development is underway of the Benguela/Belize and Lobito/Tomboco oil fields, with expected to start-up in 2006 (see “Development Projects” below).
In 2004 in the deep waters of Block 15 the Xikomba oil field produced 80,000 barrels/day (14,000 net to Eni). In August 2004 first oil was reached at the Kizomba A project (Hungo and Chocalho fields) at an initial level of 28,000 barrels/day net to Eni. Recoverable reserves amount to approximately 880 million barrels. Production is expected to peak at 250,000 barrels/day (43,000 net to Eni) in 2006.
In the medium term, the reaching of full production of fields started-up in 2004 and the contribution of new development projects will allow Eni’s production to increase significantly.

 

 

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Eni has been operating in Norway since 1964. In 2004 Eni’s hydrocarbon production averaged 143,000 boe/day. Eni’s principal producing interests are the Ekofisk field (12.39% interest) in the North Sea and the Aasgard (14.9%) and Norne (6.9%) fields in the Norwegian Sea which accounted for 85% of Eni’s production in Norway in 2004.
Development is underway at the Kristin gas and oil field (Eni’s interest 9%) located near Aasgard and Norne with production expected to start in late 2005 (see “Development Projects” below).
In the medium term, production is expected to remain stable.

 

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Rest of the World

 

Eni has been present in the United States since 1966 and holds various mineral interests in the Gulf of Mexico. In 2004 Eni’s hydrocarbon production averaged 44,000 boe/day. The main producing fields operated by Eni are Allegheny (Eni’s interest 100%) Morpeth (Eni’s interest 100%) and King Kong (Eni’s interest 50%) which accounted for 64% of Eni’s production in 2004.
Eni is operator in the development of the K2 oil field (Eni’s interest 18.17%) with start-up expected in 2005. A peak production of 32,000 barrels/day (5,000 net to Eni) is expected in late 2005.
In the medium term Eni’s production is expected to decline due to the decline in mature fields.

 

Eni has been present in Kazakhstan since 1992. Eni is co-operator with British Gas with a 32.5% interest of the Karachaganak oil, gas and condensate field with recoverable reserves of about 3.6 billion boe. In 2004 production from this field (net to Eni) averaged 54,000 barrels/day of liquids and 34,000 boe/day of natural gas. In June 2004 the export of liquids to Western markets through the Caspian Pipeline Consortium pipeline (Eni’s interest 2%) started. The pipeline connects the field to the Novorossiysk terminal on the Russian coast of the Black Sea. In the last months of 2004 total production from this field averaged 357,000 boe/day (108,000 net to Eni, of which 70,000 barrels/day of liquids). A further

 

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Rest of the World

Eni has been present in Pakistan since 2000. In 2004 production net to Eni averaged 46,000 boe/day, mainly of natural gas. The main natural gas producing fields operated by Eni are Bhit (Eni’s interest 40%) and Kadanwari (Eni’s interest 18.42%), which in 2004 accounted for 44% of Eni’s production in Pakistan. Eni also holds interests in the Sawan (23.68%), Zamzama (17.75%), and Miano (15.16%) fields. In the first quarter of 2005 the Rehmat field (Eni’s interest 30%) was started-up.
In the medium term Eni’s production in Pakistan is expected to increase.

 

Eni through a 50/50 joint venture with INA, the national Croatian company, operates the Ivana natural gas field, located 40 kilometers west of Pola in the Adriatic offshore in approximately 40 meter deep waters. The field is operated through a main production platform, called Ivana A and three satellite platforms, Ivana B, D and E. In 2004 the Marica gas field started production.
In the medium term the development of the other fields discovered in the area – Ivana C/K, Ika, Ida, Katarina and Annamaria – will allow to double Eni’s current production level of 6,000 boe/day by 2007.

 

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Rest of the World

Eni has been present in Australia since 2000. In 2004 hydrocarbon production net to Eni averaged 21,000 boe/day mainly of oil. Eni is operator with a 65% interest of the offshore Woollybutt oil field, which in 2004 accounted for 71% of Eni’s production in Australia.
In February 2004 the liquids and gas Bayu Undan field (Eni’s interest 12.04%) was started-up (see “Development projects” below).
Eni holds a 46.15% interest in the Blacktip field under development in the offshore Bonaparte basin with start-up expected in 2007. In November 2004 Eni signed a 20-year contract for the supply of 21.3 billion cubic meters of gas from this field to Alcan, an aluminum manufacturing company.
In the medium term Eni’s hydrocarbon production in Australia is expected to increase.

 

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exploration areas

        Farøe Islands
Eni is operator in 2 exploration permits off the coast with a 75% interest.


        Indonesia
Eni’s exploration activities in Indonesia focus on the deep offshore of East Kalimantan (Borneo). Eni holds interests in 8 exploration permits with interests ranging from 20% to 50% (Ganal, Rapak, Popodi, Papalang, Muara Bakau, Ambalat and Bukat), and with a 100% interest in the Bulungan Block in the Tarakan basin. Eni is operator of Muara Bakau, Ambalat, Bukat and Bulungan located in the Kutei and Tarakan oil basins.
In the Ganal permit, the Gehem-2 and Gehem-3 appraisal wells confirmed the extension of the gas and condensates bearing strata already identified by the discovery and identified a new oil bearing area. Appraisal activities on the Gula discovery had positive outcome. Development plans are being prepared for the discoveries made in the Kutei basin (Gendalo, Gandang, Gehem, Gula, Gada and Ranggas).
In the Bukat permit in Tarakan, Eni as operator made an oil and gas discovery, the first relevant one in this basin.



Exploration onshore and in conventional waters


        Saudi Arabia
In March 2004 Eni was awarded an exploration licence for exploration, development and production of natural gas in the so called C area covering approximately 52,000 square kilometers in the Rub al Khali basin at the border with Qatar and the United Arab Emirates (Eni operator with a 50% interest).


        Caspian Sea
Geologically the Caspian Sea is one of the most promising areas in the world for hydrocarbon exploration.
In Kazakhstan in 2004 the exploration campaign in the area of the North Caspian Sea PSA was completed with the testing of the sixth and last commitment well Kairan-1. The campaign had a 100% success rate. Appraisal activities of the other discoveries made in the area (Kalamkas, Kashagan SW, Aktote and Kairan) gave positive results with the Kashagan KE-6 and Aktote AK-2 Dir wells.

 

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        Australia
Eni holds interests in 9 exploration licenses in the north-western offshore, in seven of these is operator with interests ranging from 65% to 100%. Three of these are located in the Timor Sea (WA-280-P, AC/P-21 and TP-22), and four in the western offshore (WA-326-P, WA-328-P, WA-25-L and WA-22-L). In permit WA-25-L where the Woollybutt field is located, the drilling of the Scallybutt appraisal well gave positive results.


        Algeria
Appraisal activities of the BKNE 15 discovery in Block P 404 (Eni’s interest 15%) gave positive results.


        China
Within the CACT consortium Eni operates Block 16/19 in the South China Sea, where new studies for the definition of the exploration potential near existing facilities were started.


        Egypt
In Egypt exploration activity takes place in exploration permits and production concessions. The major exploration areas in geomineral terms are: (i) gas in the Nile Delta with interesting potential; (ii) oil in the Suez Gulf; (iii) oil, gas and condensates in the Western Desert.
In 2004 exploration gave positive results with 5 oil discoveries in the Gulf of Suez – Belayim Marine (Eni’s interests 50%) and Ashrafi (Eni’s interests 50%) concessions, and six gas discoveries in the Nile Delta offshore – Seth/Ras el Barr, Denise, Temsah and P. Fouad /N. Port Said concessions – and two discoveries in the Western Desert - Melehia.
In 2004, Eni was assigned three new areas in the Delta (Blocks 32, 24 and 26) and one in the Western Desert (Block 10).


        Italy
Exploration activities onshore yielded positive results with the wells operated by Eni: (i) Civita 1 Dir (Eni’s interest 70%) a gas bearing well located in the Civita concession in central Italy; (ii) Tresauro 1 Dir (Eni’s interest 45%) in the Tresauro concession in Sicily containing oil; (iii) Monte dell’Aquila 1 Dir (Eni’s interest 100%) in the Bronte S. Nicola concession in Sicily containing gas and condensates; (iv) the non operated Monte Guzzo 1 Dir well, in the Montegranaro concession (Eni’s interest 25%) containing gas in central Italy.


        Nigeria
Five discoveries were made in onshore production areas: (i) in the OML 60/61/62/63 permits (Eni operator with a 20% interest) with the Osiama Creek South 1 Dir and 2 Dir, Obutoru Creek 1 Dir ST1 and Obiafu 34 wells all containing mainly oil; (ii) in the OML 74 permit (Eni’s interest 12.86%) with the JKG1-X well containing oil and gas; (iii) in the OML 116 permit with the Agbara Deep 1 Dir ST1 Appr. A well deep levels mineralized with gas and condensates.

 

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exploration areas

        Pakistan
Eni is operator in the Manchar (Eni’s interest 55%) and Gorakh (Eni’s interest 92.5%) permits in the Kirthar Foldbelt area and holds interests between 30% and 40% in four exploration permits in the Middle Indus Basin. In February 2005, two permits were acquired in the Indus offshore (Blocks M and N, Eni’s interest 100%).


        Russia
Eni operates in the Volgo Donsky and Gashunsky permits (Eni’s interest 50%) located in the Rostov area in the Donbass Fold Belt. Two exploration wells are being drilled in the Volgo Donsky permit.


        Venezuela
Eni holds interests in two exploration permits: Gulf of Paria East (Eni’s interest 30%) and Gulf of Paria West (Eni’s interest 40%) both in conventional waters. In 2004 two hydrocarbon discoveries were made (Punta Sur and Tiburon) and an evaluation plan is being prepared.

 

 

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development projects

Eni is involved in a number of development projects that will contribute to the medium and long-term growth of its hydrocarbon production. What follows is an outline of the most important development projects.

 

Joint development of the gas, oil and condensate fields of Wafa, located in NC-169 A permit, 520 kilometers south west of Tripoli, and Bahr Essalam in the NC-41 permit, located in the Mediterranean offshore, 110 kilometers north of Tripoli is underway. These fields (where Eni is partner of the development with a 50% interest) hold recoverable reserves of 1.7 billion boe (about 950 million boe net to Eni). Within the development of the Wafa field 24 of the 30 planned producing wells have been completed, as well as the condensate treatment plant and the laying of the pipeline for the transmission of liquids and gas to the Mellitah treatment plant. In September the first gas shipments were made for the Greenstream gasline and the first shipments of liquids for the Mellitah plant. Within the development of the Bahr Essalam offshore field, 17 producing wells of the 27 planned were completed, the Sabratha platform is nearing completion along with the laying of the underwater pipeline for the transmission of liquids and gas to the Mellitah treatment plant. Production is expected to start in the first half of 2005. Peak production from the two fields at 240,000 boe/day (124,000 net to Eni) is expected in 2006. Eni’s share of capital expenditure amounts to approximately euro 3.1 billion only for the upstream phase.
Supply in Italy of natural gas through the underwater Greenstream gasline linking

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Mellitah to Gela in Sicily started on October 1. When fully operational the gasline will allow the export and sale to third parties of 8 of 10 billion cubic meters per year of natural gas produced from these two fields (see, Gas & Power).


        Angola - Block 15 - Kizomba phases B and C
Eni is engaged in the development of oil fields discovered in the Kizomba area situated in Block 15 (Eni’s interest 20%) in the deep offshore of Angola, the most important development project in the West African deep offshore. The project foresees three phases, A, B and C. Within phase A in August 2004 production started at the Hungo and Chocalho fields, containing recoverable reserves of about 880 million barrels. Peak production at 250,000 barrels/day (43,000 net to Eni) is expected in 2006.

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Phase B concerns the development and start-up of production of the Kissanje and Dikanza fields, with recoverable reserves of about 910 million barrels. The project provides for the drilling of 35 wells (19 producing and 16 injection) on Kissanje and 17 wells (10 producing and 7 injection) on Dikanza, the use of a Tension Leg Platform for Kissanje and an underwater production system for Dikanza. Production will be treated at an FPSO vessel common to both fields with a capacity of 250,000 barrels/day and a storage capacity of over 2 billion barrels. Four EPC contracts for the completion of the project have been assigned, while drilling of development wells is underway. Production start-up is scheduled before the end of 2005, peaking at 43,000 barrels/day net to Eni in 2007. Eni’s share of capital expenditure amounts to approximately dollar 700 million.
Phase C concerns the development of the Mondo, Saxi and Batuque fields. The Mondo field contains recoverable reserves amounting to 260 million barrels. The project provides for the drilling of 17 wells, 10 producing, 2 water injection and 5 water/gas injection wells and the installation of an FPSO vessel with a treatment capacity of 125,000 barrels/day. Production is expected to start in 2007, peaking at 18,000 barrels/day net to Eni in 2008. Eni’s share of capital expenditure amounts to approximately dollar 300 million.

 

The Benguela, Belize, Lobito and Tomboco oil fields hold recoverable reserves amounting to 440 million barrels and are located in the deep waters of Block 14 (Eni’s interest 20%). The project provides for two phases; the first one between 2005 and 2006 for the development of Benguela/Belize by means of the installation of a Compliant Piled Tower (CPT) at a depth of 400 meters; the second one between 2006 and 2007 for the development of Lobito/Tomboco through the drilling of underwater wells an their linkage to the production facilities of the CPT. A total of 52 development wells will be drilled (31 producing and 21 water injection wells). Production is scheduled to start in 2006 by means of the Kuito FPSO vessel, reaching a peak of 34,000 barrels/day net to Eni in 2008. Eni’s share of capital expenditure amounts to approximately dollar 440 million.

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The offshore Bayu Undan field (Eni’s interest 12.04%) containing gas and liquids with recoverable reserves amounting to over 900 million barrels is located in Block Zoca 91/12-13 in the international cooperation area between Australia and East Timor, at a water depth of 80 meters.
The project includes two phases. The first one, started in February 2004, for the development of liquids and the second one for the development of LNG. In phase 1 three production and treatment platforms, relevant facilities and an FSO vessel for the storage of liquids have been installed. The second phase entails the construction of a 26-inch diameter 500-kilometer long sealine that will link the field to Darwin where an onshore LNG plant with a 3.5 million tonnes/year capacity is under construction. Under a 17-year long contract, gas produced will be sold to two Japanese companies, Tokyo Electric and Tokyo Gas, that bought a 10.08% interest in the integrated project. LNG production is scheduled for the first quarter of 2006.
Production is scheduled to peak at about 160,000 boe/day (18,000 net to Eni) in 2008. Eni’s share of capital expenditure will be approximately dollar 400 million, of which 200 for the upstream portion.

 

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The Kristin gas and oil field (Eni’s interest 9%) with recoverable reserves of 520 million boe, is located in the PL 134 permit in the Haltenbanken area in the Norwegian Sea, where the Norne and Aasgard fields are in production. The development plan foresees the drilling of 12 underwater wells, the installation of a semi-submersible platform with treatment facilities and the laying of a gas pipeline connecting it with the Aasgard Transport Pipeline, 10-kilometer from Kristin, and of a 20-kilometer long oil pipeline to carry condensates to the Aasgard C storage vessel. Production is scheduled to start at the end of 2005 with a production peak of 211,000 boe/day (19,000 net to Eni) expected in 2006. Eni’s expenditure in this project amounts to approximately dollar 256 million.

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Proved oil and condensate reserves by geographic area

(million barrels)

(at December 31)			1995		1996		1997		1998		1999		2000		2001		2002		2003		2004

Italy			1,418			1,321			1,286			1,245			1,149			1,093			1,006			944			744			665
North Africa			111			467			544			662			778			890			951			961			944			1,124
West Africa			121			127			125			120			167			159			160			265			286			301
North Sea			209			227			226			233			229			245			327			327			383			357
Rest of World			57			49			48			114			74			199			537			750			777			763
Total outside Italy			498			870			943			1,129			1,248			1,493			1,975			2,303			2,390			2,545
			1,916			2,191			2,229			2,374			2,397			2,586			2,981			3,247			3,134			3,210

 

Proved natural gas reserves by geographic area (1)

(million boe)

(at December 31)			1995		1996		1997		1998		1999		2000		2001		2002		2003		2004

Italy			318			316			360			329			328			296			309			255			252			225
North Africa			869			953			985			1,024			1,071			1,039			1,171			1,072			1,080			993
West Africa			749			720			728			790			900			934			976			1,022			1,038			1,056
North Sea			375			416			428			433			417			455			552			498			529			450
Rest of World			91			79			343			305			421			698			940			936			1,239			1,284
Total outside Italy			2,084			2,168			2,484			2,552			2,809			3,126			3,639			3,528			3,886			3,783
			2,402			2,484			2,844			2,881			3,137			3,422			3,948			3,783			4,138			4,008

 

Proved hydrocarbon reserves by geographic area

(million boe)

(at December 31)			1995		1996		1997		1998		1999		2000		2001		2002		2003		2004

Italy			1,736			1,637			1,646			1,574			1,477			1,389			1,315			1,199			996			890
North Africa			980			1,420			1,530			1,686			1,849			1,929			2,122			2,033			2,024			2,117
West Africa			870			847			852			910			1,067			1,093			1,136			1,287			1,324			1,357
North Sea			584			643			655			666			646			700			879			825			912			807
Rest of World			148			128			390			419			495			897			1,477			1,686			2,016			2,047
Total outside Italy			2,582			3,038			3,427			3,681			4,057			4,619			5,614			5,831			6,276			6,328
			4,318			4,675			5,073			5,255			5,534			6,008			6,929			7,030			7,272			7,218

 

 

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Oil and condensate production by country

(thousand barrels/day)

			1995		1996		1997		1998		1999		2000		2001		2002		2003		2004

Italy			93			96			105			100			88			76			69			86			84			80
North Africa			214			218			212			213			221			227			228			252			250			261
Egypt			76			68			75			88			109			112			97			97			92			94
Libya			113			112			103			92			80			82			84			79			82			89
Algeria			7			22			20			19			18			21			35			65			65			66
Tunisia			18			16			14			14			14			12			12			11			11			12
West Africa			199			182			177			194			202			213			219			222			236			285
Nigeria			78			82			77			68			65			75			84			83			108			134
Angola			53			55			55			58			59			63			64			62			58			78
Congo			68			45			45			67			75			72			69			75			68			72
Gabon												1			3			3			2			2			2			1
North Sea			80			83			114			112			116			124			204			213			235			203
Norway			42			42			45			47			52			65			70			74			105			102
United Kingdom			38			41			69			65			64			59			134			139			130			101
Rest of World			26			35			38			34			47			108			137			148			176			205
Venezuela																					39			42			54			67
Kazakhstan			7			14			16			12			19			27			23			32			41			54
United States			10			7			6			4			5			38			26			29			25			25
Australia																											14			21
Ecuador															2			22			25			22			21			19
Iran																								3			9			9
China			9			14			13			12			14			14			12			10			7			5
Indonesia																					6			5			5			4
Pakistan																														1
Qatar									3			6			7			7			6			5
Total outside Italy			519			518			541			553			586			672			788			835			897			954
			612			614			646			653			674			748			857			921			981			1,034

 

Natural gas production by country

(thousand boe/day)

			1995		1996		1997		1998		1999		2000		2001		2002		2003		2004

Italy			320			309			299			294			270			257			239			230			216			191
North Africa			4			10			17			23			48			79			89			102			101			119
Egypt			4			10			17			23			48			77			83			95			95			106
Libya																					3			4			2			8
Tunisia																		2			3			3			3			3
Algeria																											1			2
West Africa			3			3			3			2			4			11			14			15			24			31
Nigeria			3			3			3			2			4			11			14			15			24			27
Angola																														2
Congo																														2
North Sea			28			31			40			44			38			44			84			95			110			105
United Kingdom			9			13			22			32			31			34			68			73			72			63
Norway			18			18			18			12			7			10			14			20			37			41
Netherlands																					2			2			1			1
Rest of World			15			17			16			22			30			48			86			109			130			144
Pakistan																					2			7			28			45
Kazakhstan												11			18			23			19			26			28			34
Indonesia																					41			39			36			30
United States			15			17			16			11			12			23			20			30			23			19
Trinidad & Tobago																								2			10			10
Croatia																		2			4			5			5			6
Total outside Italy			50			61			76			91			120			182			273			321			365			399
			370			370			375			385			390			439			512			551			581			590

                                                              

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Hydrocarbon production by country (1)

(thousand boe/day)

			1995		1996		1997		1998		1999		2000		2001		2002		2003		2004

Italy			413			406			403			394			358			333			308			316			300			271
North Africa			218			228			229			236			269			306			317			354			351			380
Egypt			80			78			92			111			157			189			180			192			187			200
Libya			113			112			103			92			80			82			87			83			84			97
Algeria			7			22			20			19			18			21			35			65			66			68
Tunisia			18			16			14			14			14			14			15			14			14			15
West Africa			202			184			180			196			206			224			233			237			260			316
Nigeria			81			84			80			70			69			86			98			98			132			161
Angola			53			55			55			58			59			63			64			62			58			80
Congo			68			45			45			67			75			72			69			75			68			74
Gabon												1			3			3			2			2			2			1
North Sea			108			114			155			156			154			168			288			308			345			308
United Kingdom			47			54			92			97			95			93			202			212			202			164
Norway			61			60			63			59			59			75			84			94			142			143
Netherlands																					2			2			1			1
Rest of World			41			52			54			56			77			156			223			257			306			349
Kazakhstan			7			14			16			23			37			50			42			58			69			88
Venezuela																					39			42			54			67
Pakistan																					4			7			28			46
United States			25			24			22			15			17			61			46			59			48			44
Indonesia																					47			44			41			34
Australia																											14			21
Ecuador															2			22			25			22			21			19
Trinidad & Tobago																								2			10			10
Iran																								3			9			9
Croatia																		2			2			5			5			6
China			9			14			13			12			14			14			12			10			7			5
Qatar									3			6			7			7			6			5
Total outside Italy			569			578			618			644			706			854			1,061			1,156			1,262			1,353
			982			984			1,021			1,038			1,064			1,187			1,369			1,472			1,562			1,624

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Hydrocarbon production sold

(million boe)

			1995		1996		1997		1998		1999		2000		2001		2002		2003		2004

Hydrocarbon production			358.4			360.3			372.5			378.8			388.4			434.5			499.7			537.3			570.0			594.6
Over/under lifting and other items			(4.9	)		0.9			(1.4	)		(3.3	)		(1.5	)		(1.9	)		(3.1	)		(4.0	)		(4.3	)		(4.2	)
Withdrawals from (input to) natural gas storage			(0.6	)		(4.0	)		(1.0	)		6.9			6.7			(4.6	)		9.1			(1.8	)
Own consumption of gas																					(6.0	)		(8.4	)		(9.5	)		(13.9	)
Hydrocarbon production sold			352.9			357.2			370.1			382.4			393.6			428.0			499.7			523.1			556.2			576.5

 

Principal oil and natural gas interests at December 31, 2004

		Commencement of operations		Number of interests		Net exploration (1) and development acreage		Net development acreage		Type of fields		Number of producing fields		Number of other fields
Italy		1926		214		33,635		13,184		Onshore/Offshore		81		85
North Africa
Algeria		1981		29		3,225		760		Onshore		20		12
Egypt		1954		40		12,429		1,881		Onshore/Offshore		34		27
Libya		1959		7		21,268		8,053		Onshore/Offshore		11		7
Tunisia		1961		11		3,784		1,888		Onshore/Offshore		8		5
				87		40,706		12,582				73		51
West Africa
Angola		1980		52		1,651		715		Offshore		32		37
Congo		1968		17		6,240		741		Offshore		16		8
Nigeria		1962		55		7,771		4,878		Onshore/Offshore		119		12
				124		15,662		6,334				167		173
North Sea
Norway		1965		50		7,086		316		Offshore		12		13
United Kingdom		1964		55		1,518		665		Offshore		28		16
				105		8,604		981				40		29
Rest of World
Australia		2001		13		16,968		1,643		Offshore		2		1
China		1983		4		218		106		Offshore		8		4
Croatia		1996		3		3,028		988		Offshore		2		6
Ecuador		1988		1		2,000		2,000		Onshore		1		1
Indonesia		2001		11		16,408		984		Onshore/Offshore		7		8
Iran		1957		4		423		423		Onshore/Offshore		4
Kazakhstan		1995		6		879		455		Onshore/Offshore		1		2
Pakistan		2000		13		8,050		635		Onshore		5		2
Trinidad & Tobago		1970		1		66		66		Offshore		3		2
United States		1968		299		2,240		373		Onshore/Offshore		14		5
Venezuela		1998		3		713		131		Onshore/Offshore		5		2
				358		50,993		7,804				52		33
Other				9		1,280		1,112						1
Other countries with only exploration activity				22		83,299
Outside Italy				705		200,544		28,813				332		287
Total				919		234,180		41,997				413		372

 

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Fields with residual proved reserves (net to Eni) amounting to over 50 million boe at December 31, 2004

Onshore/Offshore

Type of hydrocarbons

Type of contract (1)

Expiry of concession/contract

Expiry of production

Italy

Monte Alpi Enoc unif.

Onshore

oil/gas

C

2019

(2)

2025

Barbara

Offshore

gas

C

2018

(2)

2021

Egypt

Belayim Land

Onshore

oil

PSC

2020

2020

Port Fouad M. + SW

Offshore

condensates/gas

PSC

2021

2019

Belayim Marine

Offshore

oil

PSC

2020

2020

El Temsah

Offshore

condensates/gas

PSC

2026

2017

Libya

Bahr Essalam (C-NC41)

Offshore

condensates/gas

PSC

2031

(5)

2026

(3)

Wafa

Onshore

oil/condensates/gas

PSC

2031

(5)

2024

(3)

Bu Attifel

Onshore

oil/condensates

C

2016

2016

Gas Bu Attifel/Intisar

Onshore

gas

C

(4)

2028

Bouri

Offshore

oil

PSC

2029

(6)

2019

E-NC41

Offshore

condensates/gas

PSC

2031

(5)

2021

(3)

Iran

South-Pars

Offshore

condensates

SC

2011

Nigeria

Nase Oil

Onshore/Offshore

oil/gas

C

2019

2019

Naoc LNG

Onshore

oil/condensates/gas

C

2027

2027

Nase LNG

Onshore

oil/condensates/gas

C

2019

2019

Norway

Ekofisk 1.1.99

Offshore

oil/condensates/gas

C

2028

2028

Smorbukk (Aasgard)

Offshore

oil/condensates/gas

C

2027

2027

Midgard (Aasgard)

Offshore

oil/condensates/gas

C

2027

2027

UK

Elgin/Franklin 2004

Offshore

oil/gas

C

2025

2028

Australia

Bayu Undan

Offshore

condensates/gas

PSC

2025

2026

Ecuador

Villano

Onshore

oil

SC

2017

2017

Kazakhstan

Karachaganak

Onshore

condensates/gas

PSC

2038

2035

Kashagan

Offshore

oil/gas

PSC

2041

2035

(3)

Pakistan

Bhit

Onshore

gas/condensates

C

2020

2015

Venezuela

Dación West

Onshore

oil

SC

2018

2018

Dación East

Onshore

oil

SC

2018

2018

 

Exploration wells

(units)

			1995		1996		1997		1998		1999		2000		2001		2002		2003		2004

Wells drilled			95			113			127			121			60			95			110			120			105			66
Outside Italy			67			81			98			82			43			75			99			111			97			60
Italy			28			32			29			39			17			20			11			9			8			6
Wells drilled (net to Eni)			49			66			74			66			29			47			47			52			43			30
Outside Italy			28			41			52			35			16			30			37			45			36			26
Italy			21			25			22			31			13			17			10			7			7			4

 

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Reserve life index

(years)

			1995		1996		1997		1998		1999		2000		2001		2002		2003		2004

Italy		11.4			11.2			11.5			10.2			10.7			11.7			10.9			10.8			9.0			8.8
North Africa		12.3			16.7			18.0			19.3			18.6			17.5			18.4			15.8			15.9			15.5
West Africa		11.6			12.8			12.8			12.4			14.6			13.3			13.4			14.8			13.9			11.7
North Sea		14.6			15.4			11.0			11.7			12.0			11.4			8.4			7.4			7.2			7.2
Rest of World		9.1			6.7			19.7			20.9			16.8			15.6			18.0			17.1			18.1			16.1
		11.9			13.1			13.6			13.4			14.0			14.0			13.7			13.2			12.7			12.1

 

Reserve replacement ratio

(%)

			1995		1996		1997		1998		1999		2000		2001		2002		2003		2004

Italy		67			32			106			53			30			26			39			..			..			..
North Africa		93			618			229			277			265			172			267			30			93			168
West Africa		176			65			107			179			312			132			151			273			138			128
North Sea		246			244			120			119			113			185			271			53			168			6
Rest of World		311			(5	)		1,410			245			196			825			818			324			396			124
		126			200			207			147			171			210			282			119			142			91

 

Economic indicators per boe

(USD/boe)

			1995		1996		1997		1998		1999		2000		2001		2002		2003		2004

Revenues		17.30			20.66			19.02			13.68			16.95			24.67			21.52			22.07			24.82			31.22
Lifting cost (1)		3.72			3.97			3.98			3.56			3.64			3.75			4.02			3.87			4.09			4.80
Income		4.12			4.95			3.86			0.13			4.11			7.86			5.48			5.08			5.95			9.20
Exploration cost (three-year average) - discovery cost (2)		1.31			1.56			1.67			1.78			1.77			1.70			1.55			1.38			1.21			1.21
Finding and development cost (three-year average) (3)		4.27			4.33			4.72			5.16			5.43			5.35			5.33			5.67			6.53			7.26

 

Capital expenditure

(million euro)

			1995		1996		1997		1998		1999		2000		2001		2002		2003		2004

Exploration		396			555			677			755			636			811			757			902			635			499
Italy		143			192			178			191			132			156			80			66			59			51
Outside Italy		253			363			499			564			504			655			677			836			576			448
Acquisition of proved and unproved properties		5			292			95			103			752			416			67			317			30
Italy					55			48						54						13
Outside Italy		5			237			47			103			698			416			54			317			30
Development and capital goods		1,184			816			1,550			2,024			1,880			2,312			3,452			4,396			5,016			4,413
Italy		440			383			581			507			435			543			600			442			469			390
Outside Italy		744			433			969			1,517			1,445			1,769			2,852			3,954			4,547			4,023
		1,585			1,663			2,322			2,882			3,268			3,539			4,276			5,615			5,681			4,912

 

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MAIN RESULTS

With the starting of operations of the Greenstream (Eni’s interest 75%) underwater gasline in October 2004, supplies of natural gas from Libyan fields started and, when fully operational in 2006, will reach 8 billion cubic meters/year (of which 4 billion net to Eni), already booked under long-term contracts with operators of this segment

Eni continued its program for developing its electricity generation capacity targeted at 5.3 gigawatts of installed power by 2007 with total capital expenditure amounting to approximately euro 2.2 billion (of which 1.6 were already expensed). When fully operational the new gas fired combined cycle plants will allow to consume over 6 billion cubic meters/year of natural gas produced by Eni. In 2004, about 1.3 gigawatts were installed at the Ferrera Erbognone, Ravenna and Mantova power stations, thus bringing Eni’s total installed capacity to 3.3 gigawatts

Within its strategy of international expansion in natural gas, Eni and its partners in Nigeria LNG (Eni’s interest 10.4%) have approved expenditure plans for the construction of the sixth train for LNG production at the Bonny treatment plant, that, when fully operational in 2007, will have a production capacity of 26.5 billion cubic meters/year. This initiative will allow Eni to fully exploit its natural gas reserves in Nigeria

In March 2005 Eni signed a preliminary agreement for the purchase of a share of regasification capacity corresponding to 4 to 6 billion cubic meters/year of LNG at the Cameron terminal, under construction on the coast of Louisiana (USA) for a term of 20 years. The terminal is expected to be completed in 2008 with an initial capacity of 15 billion cubic meters/year. This deal provides Eni with access to the North American gas market which will absorb part of Eni’s African reserves

In January 2005 the first LNG shipping was delivered to the Damietta treatment plant (Eni’s interest 40%). When fully operational the plant will produce approximately 7 billion cubic meters/year of LNG mainly directed to the Spanish market

Eni sold shares corresponding to 9.054% of Snam Rete Gas share capital in partial execution of Law No. 290/2003 that prohibits companies operating in the natural gas business to hold interest higher than 20% in companies owning natural gas transmission network from July 1, 2007

In January 2005 Eni agreed a 14 year contract, starting in 2006, for the supply of 1.2 billion cubic meters/year of natural gas to the German company Wingas. The gas will be delivered at Eynatten at the German-Belgian border

 

Main financial data

(million euro)

			1995		1996		1997		1998		1999		2000		2001		2002		2003		2004

Net sales from operations			8,400			9,352			9,985			9,625			9,900			14,427			16,098			15,297			16,067			17,258
Operating income			1,703			2,024			2,012			2,513			2,580			3,178			3,672			3,244			3,627			3,463
Capital expenditure			1,232			1,207			881			921			906			794			1,065			1,315			1,760			1,446
Investments			146			5			17			34			17			1,180			128			158			3,156			177

 

Main operating data

			1995		1996		1997		1998		1999		2000		2001		2002		2003		2004

Sales of natural gas to third parties	(bn cm)		52.55			56.03			55.94			58.41			62.92			62.63			63.72			64.12			69.49			73.43
Own consumption of natural gas	(bn cm)																	2.00			2.00			2.02			1.90			3.70
Sales to third parties and own consumption	(bn cm)																	64.63			65.72			66.14			71.39			77.13
Sales of natural gas of Eni’s affiliates (net to Eni)	(bn cm)		0.11			0.11			0.13			0.16			0.16			0.87			1.38			2.40			6.94			7.32
Total sales and own consumption of natural gas	(bn cm)		52.66			56.14			56.07			58.57			63.08			65.50			67.10			68.54			78.33			84.45
Natural gas transported on behalf of third parties in Italy	(bn cm)		1.48			2.42			4.35			6.07			6.90			9.45			11.41			19.11			24.63			28.26
Electricity production sold	(TWh)																	4.77			4.99			5.00			5.55			13.85

 

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the Italian natural gas system

In the next decade world consumption of natural gas is expected to increase, due to: (i) the continuous improvement in technologies applicable to all phases of natural gas chain and capable of reducing distances between mineral assets and consumption areas (LNG, GTL, TAP); (ii) the higher environmental compatibility of natural gas as compared to other hydrocarbons in particular in electricity generation; (iii) the expected demographic, economic and social developments; (iv) the steady increase in natural gas reserves. Europe represents one of the areas with the highest growth rate, where the average increase in consumption is expected to be about 3% per year.
Given the recent regulatory and organizational developments, the Italian national natural gas system takes part in the structural change ongoing in Europe with the prospect of a single market for energy. In this context Italy will be able to make good use of its geographical position and its double integration with the European internal market and the Mediterranean area. Eni has the know-how and experience necessary for becoming a leader in this process of European development.
One of the new features of the development process ongoing in Europe is the importance acquired by international hubs, the major interconnection points in international transmission networks where volumes of natural gas are traded on a spot basis. The development of these hubs, currently located in Great Britain, Belgium and Germany, can be attributed to the progressive cancellation of the territorial destination clause in supply contracts, to the new regulations on third party access to transmission networks and to increased gas availability in markets. Hubs represent an opportunity for Eni for selling increasing gas volumes, as Eni can take advantage from its diversified supply portfolio and the flexibility provided by long-term supply contracts.



The demand for natural gas in Italy
With consumption amounting to 80 billion cubic meters in 2004 (increasing by over 3% over 2003) Italy is the third European market for natural gas after Great Britain and Germany. In 2004, about 20% of natural gas requirements were met through domestic production (including natural gas volumes withdrawn from storage), while imports covered 80%.
Eni expects natural gas consumption in Italy to reach about 91 billion cubic meters in 2010, corresponding to an annual average increase of about 2%. The share of natural gas on total domestic energy requirements is expected to reach nearly 36% as compared to the present 33%.
Most of this increase will concern natural gas used in electricity generation, because of the significant advantages of the use of natural gas in combined cycle plants, thanks to its lower investment cost, higher yields and reduced polluting emissions as compared to other fuels. Demand is expected to increase also from residential and commercial users, due to the increased use of natural gas in residential space heating in households and services, in large tertiary firms and as vehicle fuel.

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Supply of natural gas
In 2004, Eni’s requirements for natural gas are met for over 83% with supplies from foreign countries (mainly Algeria, Russia, the Netherlands and Norway) under long-term contracts. The remaining part is covered by gas supplied by Eni’s Exploration & Production segment. Eni is a party of long-term purchase contracts with producing countries that currently have a residual average term of approximately 16 years. Existing contracts, which in general contain take-or-pay clauses, will ensure a total of about 67.3 billion cubic meters of natural gas per year (Russia 28.5, Algeria 21.5, Netherlands 9.8, Norway 6 and Nigeria 1.5) by 2008. These contracts concern total volumes amounting to approximately 1,088 billion cubic meters.


Transmission, dispatching and regasification
Transmission, dispatching and regasification activities in Italy are carried out by Snam Rete Gas, a company listed on the Italian Stock Exchange (in which Eni holds a 50.07% interest). Eni’s primary transmission network was conferred to Snam Rete Gas in July 2001 in implementation of Legislative Decree No. 164/2000 concerning the Italian natural gas market, which provides for the separation of transmission, dispatching and regasification activities from all other activities in the natural gas segment. This Decree also establishes that transport activity qualifies as a public concern activity and consequently is regulated.
The Italian natural gas transmission system is made up of a national pipeline network and a regional pipeline network for a total length of 32,190 kilometers, of which 30,545 owned by Eni.

 

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The Italian national transmission network is made up of high pressure trunklines, mainly with a large diameter, which carry natural gas from the entry points to the system – import lines, storage sites and main Italian natural gas fields – to the linking points with the regional transmission network. The national network includes also some interregional lines reaching important markets.
The regional transmission network is made up of the remaining lines and allows the transmission of natural gas to industries, power stations and local distribution companies of the various local areas served.
At December 31, 2004 the national pipeline network owned by Eni extended for 8,196 kilometers. Underground pipelines have a maximum diameter of 48 inches and carry natural gas at pressures of 24 to 75 bars. The underwater pipeline crossing the Messina Strait has a diameter of 20 to 26 inches and carries natural gas at a pressure equal to or higher than 115 bars.
The major pipelines interconnected with import trunklines that are part of Eni’s national network are:

 

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(3)		At the end of 2004 the 69-kilometer long section of the triple line started operations. By 2007 a total of 290 kilometers are expected to be on triple line.

 

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In 2004 Eni’s national network increased by 203 kilometers due to the entry into service of: (i) a new line connecting Gela, entry point of the Greenstream gasline from Libya, to the national network near Enna. The 36-inch diameter pipe covers 66 kilometers and has a transport capacity of 25 million cubic meters/day; (ii) the completion of a 30-inch diameter line connecting Pontremoli to Parma for the transmission of natural gas from the Panigaglia regasification terminal to northern Italy (70 kilometers); (iii) a 32-kilometer line upgrading the pipeline for importing natural gas from Russia; (iv) the sections from Palmi to Martirano and from Campochiaro to Sulmona as part of the upgrade of the Transmed pipeline through a third line for a total length of 53 kilometers.
Eni’s regional transmission network is made up of pipes with smaller diameter than the national lines for a total length 22,349 kilometers. These pipes carry natural gas at pressures between 5 and 12 bars, between 12 and 24 bars and between 24 and 75 bars. In 2004, Eni’s regional network increased by 222 kilometers due to the entry into service of new lines, upgrades and of various connections to end users.
Eni’s system is completed by: (i) 11 compressor stations with a total power of 625 megawatts; (ii) 5 marine terminals linking underwater pipelines with the on-land network at Mazara del Vallo, Messina and Gela in Sicily and Favazzina and Palmi in Calabria.
The control room of the dispatching system is located in San Donato Milanese and oversees and monitors the whole transmission network in cooperation with peripheral units. In 2003 this system obtained the ISO 9001-2000 certification. Peripheral units are represented by 8 districts that monitor the transmission network through 69 centers that guarantee operation, maintenance and control of the whole system. Each unit is responsible for operations in accordance with technical specifications and applicable laws and regulations.
In addition to the international pipeline transmission system, natural gas enters Eni’s system also through the Panigaglia (Liguria) LNG terminal, which receives liquefied natural gas (LNG) carried by tanker ships. This terminal is the only one in Italy, at its maximum it can input 3.5 billion cubic meters/year into the transmission network. LNG is downloaded from tanker ships and stored, then vaporized in a regasification plant made up of cryogenic pumps and submerged flame vaporizers. When it has recovered the

 

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gaseous state, natural gas is input in the transmission network. In 2004, volumes of LNG regasified amounted to the equivalent of approximately 2.1 billion cubic meters of natural gas. Upgrading of this terminal is underway by means of an enhancement of the boil-off gas recovery system.
In 2004 a total of 80 billion cubic meters of natural gas were input in the national network, of these 65% were owned by Eni.
The Italian natural gas system is supplied for about 80% with imported gas, transmitted to Italy through a network of international high pressure pipelines for a total of over 4,300 kilometers; in which Eni owns transportation rights, in particular:

Eni plans to upgrade the TAG and TTPC pipelines in order to adjust import capacity to the expected increase in demand in Italy.
Eni holds a 50% interest in the Blue Stream underwater pipeline linking the Russian and Turkish coast of the Black Sea. When fully operational, this 774-kilometer long pipeline with a transmission capacity of 49 million cubic meters/day, will transport 16 billion cubic meters per year in 2010 (Eni’s share 8 billion) of Russian natural gas to be sold on the Turkish market (see “Development Projects” below).

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(4)		Transit capacity is the maximum daily capacity entering in different access points of a trunkline and carried to the next trunkline.

 

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Sales in Italy
In 2004, Eni’s natural gas sales in Italy amounted to 54.1 billion cubic meters (including own consumption). The Italian natural gas market is made up of three main segments: residential and commercial, industrial and thermoelectric. Customers can be divided into three groups: (i) high consumption final users directly linked to the national and regional natural gas networks; (ii) final customers such as residential and commercial users, hospital, schools, public utilities, small enterprises located in urban centers supplied by wholesalers through low pressure lines; (iii) wholesalers (mainly local distribution companies and distributors of natural gas for automotive use) purchasing natural gas to sell it to final customers.
In 2004, Eni’s natural gas sales to wholesalers amounted to 14.2 billion cubic meters (down 7.7% over 2003).
Natural gas consumption in the industrial segment amounted to approximately 22.6 billion cubic meters (29% of total final consumption), with a 3.5% increase over 2003. In 2004, Eni’s sales of natural gas to industrial users amounted to about 12.4 billion cubic meters (down 5.9% over 2003).
Natural gas consumption in the thermoelectric segment amounted to approximately 28 billion cubic meters (35% of total final consumption), with an approximately 9% increase over 2003. In 2004, Eni’s sales of natural gas to thermoelectric users amounted to 15.9 billion cubic meters (up 5.9% over 2003).
Natural gas consumption in the residential and commercial segment amounted to over 28 billion cubic meters (36% of total final consumption), with a 1% decrease over 2003 due to the effect of weather conditions. Following the merger of Italgas Più Eni manages directly over 5 million residential customers and in 2004 sales Eni’s sales amounted to 7.4 billion cubic meters (up 0.8% over 2003).
As a consequence of decisions of the Antitrust Authority (so called gas release plan) Eni sold 0.5 billion cubic meters to operators in the natural gas segment.
In 2004 own consumption amounted to 3.7 billion cubic meters and concerned essentially supplies to EniPower (2.6 billion cubic meters) and to Eni’s petrochemical plants and refineries.

Eni’s commercial structure is organized by branches in Italy in order to react promptly and efficiently to the requirements of large and medium enterprises, thermoelectric producers and wholesalers. Eni’s marketing policy towards clients of those segments provides for customized contractual options including, among others, various price formulas and types of indexations aimed at controlling price volatility, on the basis of purchase needs of clients. Eni’s commercial policy leverages on: (i) a dedicated sales team; (ii) a contact center business; (iii) a website providing new services of analysis and monitoring of costs and gas offtake; (iv) a portfolio of over 50 different kinds of technical assistance and consultancy services.
As a consequence of the merger with Italgas Più SpA, leader in Italy in retail sales of natural gas, Eni integrated its structure with a network of channels dedicated to households, public entities, the tertiary sector, condominiums, and small enterprises: the traditional counters, a network of contact centers, the website with an online opportunity for managing one’s contract and the network of franchisors under the “Assistenza Italgas Più” brand name, that in 2004 were 150.
Customers are offered a wide range of services. Residential users can contact the franchisor for supplies, installation and ordinary and extraordinary maintenance of their heating systems, while condominiums, public administrations and enterprises are offered a turn-key service for all what concerns their heating requirements.

 

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Distribution activities
Distribution involves the delivery of natural gas to residential and commercial users in urban centers through low pressure networks. Eni, through its 100% subsidiary Italgas and other subsidiaries, is engaged in the distribution activity in Italy serving 1,236 municipalities through a low pressure network consisting of over 47,000 kilometers of pipelines at December 31, 2004. Legislative Decree No. 164/2000 concerning the opening up of the natural gas market in Italy defines distribution a public service which is subject to regulation and its management is entrusted to natural gas companies by local governments exclusively under bid procedures. Concessions existing at the coming into force of the Decree and awarded with a bid procedure expire on December 31, 2012; all other concession expire on December 31, 2007 (with an optional one-year extension in case of public interest).


Sales in the rest of Europe
Eni signed seven long-term supply contracts with operators in the natural gas sector who in turn import supplied volumes of natural gas in Italy. These contracts, when fully operational in 2006, will enable Eni to supply about 15 billion cubic meters of natural gas per year, including 8 billion cubic meters (Eni’s share 4 billion) from the Libyan fields. Until the production from Libyan fields comes on stream, these supplies will be covered with gas derived from Eni’s wide and diversified portfolio of supply contracts.
In 2004 sales in European markets amounted to 28.5 billion cubic meters, including sales through affiliates; in particular: (i) 17.5 billion related to sales in target markets, among which the Iberian Peninsula (4.3 billion, of which 1.4 billion to the Spanish electric company Iberdrola and 0.70 billion cubic meters of LNG treated at the liquefaction plant of Nigeria LNG Ltd - Eni’s interest 10.4%), Germany (4 billion), Hungary (3.4 billion), Northern Europe (2.9 billion), Turkey (1.7 billion), France (0.70 billion cubic meters of LNG treated at the liquefaction plant of Nigeria LNG); (ii) over 10.4 billion related to the above-mentioned supply contracts with Italian operators in the natural gas sector.


Sales outside Europe
In 2004 Eni sold on extra-European markets 1.9 billion cubic meters of natural gas, including Eni’s share of sales of affiliates, in particular: (i) 1.6 billion cubic meters in Argentina (1.1 billion by Eni’s subsidiary Distribuidora de Gas Cuyana and 0.5 by Eni’s affiliate Distribuidora de Gas del Centro); (ii) 0.1 billion cubic meters in Brazil, through its subsidiary Gas Brasiliano Distribuidora; (iii) 0.2 billion cubic meters treated at the Nigeria LNG Ltd liquefaction plant (Eni’s interest 10.4%) sold on the US market.

 

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development projects

Eni is engaged in various development projects concerning the sale of natural gas in European markets and in the LNG business in order to compensate the lower growth opportunities on the domestic market, due to the limits set to operators by the sector regulation. In these European markets Eni can leverage on a favorable competitive positioning ensured by gas availability, access to infrastructure, long standing relations with producing countries and knowledge of markets. Eni intends to develop its presence also in the LNG business which provides interesting growth prospects, leveraging on the value of its assets, on its participation in liquefaction projects aimed at exploiting its natural gas reserves (mainly in North and West Africa, the Far East and Australia) and on the purchase of interests in regasification terminals located in strategic consumption markets (United States, United Kingdom, Far East).

GERMANY

Eni is present on the German natural gas market since late 2002 through GVS (Gasversorgung Süddeutschland GmbH) in which it acquired a 100% interest in joint venture with the German electricity operator EnBW. GVS is the sixth operator in the German gas market and the fourth in terms of volumes transported. Through a 1,863-kilometer long gas pipeline network (of these 1,750 are owned and 113 are managed) it transports and markets about 7 billion cubic meters of gas per year to local distribution companies serving about 750 municipalities in the south-western areas of the country.
In January 2005 Eni agreed a 14 year contract, starting in 2006, for the supply of 1.2 billion cubic meters/year of natural gas to the German company Wingas. The gas will be delivered at Eynatten at the German-Belgian border.
In 2008 Eni expects to sell over 6 billion cubic meters, of which 3.3 billion cubic meters of natural gas through GVS, corresponding to a 6% market share.

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IBERIAN PENINSULA

        Portugal
Eni operates on the Portuguese market through Galp Energia (Eni’s interest 33.34%). Eni and its other partners (the Portuguese Government with 34.81% and Energias de Portugal with 14.27%) are planning a restructuring of Galp’s activities. In 2004, Galp Energia sold about 4.4 billion cubic meters of natural gas to about 820,000 customers through a network of high, medium and low pressure pipelines about 11,700-kilometer long. Galp’s assets include among others interests in two import infrastructures, the Transmaghreb pipeline and the Sines LNG terminal, which provide an access to the Iberian market.


        Spain
Eni operates on the Spanish market through the Unión Fenosa Gas group (Eni’s interest 50%, the remaining 50% being held by Unión Fenosa SA) active in natural gas supply and sale to final users and to power generation companies. In 2004 natural gas sales of Unión Fenosa Gas amounted to 1.2 billion cubic meters. Unión Fenosa Gas active in LNG through an 80% interest in a liquefaction plant with a capacity of over 7 billion cubic meters per year, located at Damietta on the Egyptian coast that started operations in January 2005, and through a 7.36% interest in a liquefaction plant under construction in Oman, which is expected to start operations in 2006. In addition, it holds an 18.9% and a 42.5% interest in the El Ferrol and Sagunto regasification plants under construction, managed by the Reganosa and Saggas companies. The Sagunto plant is expected to start operations at the end of 2005, while the El Ferrol plant is expected to start operations in 2006.
Through Unión Fenosa Gas, Gas de Portugal and the development of direct sales, Eni targets to sell about 8 billion cubic meters by 2008 in the Iberian Peninsula, corresponding to an 18% market share.

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TURKEY - BLUE STREAM

Eni and Gazprom hold equal shares in Blue Stream Pipeline Company BV, which operates the Blue Stream transport system, that links the Russian (Dzhubga) to the Turkish (Samsun) coast of the Black Sea. The gasline transports natural gas produced in Russia which is sold jointly by Eni and Gazprom in Turkey to the Turkish company Botas under a long-term contract. In 2004 Botas withdrew approximately 3.2 billion cubic meters of natural gas (of which 1.6 billion were Eni’s share). Volumes transported and marketed will increase progressively in future years and are targeted to about 16 billion cubic meters per year (8 billion net to Eni) in 2010.

LNG

Eni is a party in various initiatives in the area of LNG. What follows is a description of the main ones.


        Nigeria
Eni holds a 10.4% interest in Nigeria LNG Ltd that manages the Bonny liquefaction plant for the treatment and export of LNG. The plant, made up of three treatment trains with an overall capacity of 11.2 billion cubic meters/year of liquefied natural gas is undergoing an upgrade by means of the installation of three further trains expected to be completed between 2005 and 2007, which will increase its capacity to 26.5 billion cubic meters by 2008.
Eni also takes part in a study for the construction of a liquefaction terminal at Brass on the Nigerian coast, about 100 kilometers west of Bonny. The plant will have a capacity of approximately 14 billion cubic meters/year of LNG (and 1.2 million tonnes/year of LPG). Natural gas supplies to this plant will derive from Eni’s production.


        Australia
Eni holds a 12.04% interest in the Bayu Undan project (see: “Exploration & Production - Development Projects”, above) which provides for the construction of a liquefaction plant for the production of approximately 4.5 billion cubic meters/year of LNG destined to the Japanese market.

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Natural gas supplies

(billion cubic meters)

			1995		1996		1997		1998		1999		2000		2001		2002		2003		2004

Italy			18.05			17.05			16.81			17.70			16.16			13.64			14.62			12.67			12.16			11.30
Russia for Italy			13.83			13.56			13.75			16.69			19.09			21.03			19.51			18.62			18.92			20.62
Russia for Turkey																											0.63			1.60
Algeria			17.43			18.55			16.02			16.83			20.40			21.56			18.39			16.35			16.53			18.86
Netherlands			3.62			4.45			5.00			3.02			2.87			6.09			7.00			7.55			7.41			8.45
Norway																					1.10			4.83			5.44			5.74
Croatia																								0.31			0.65			0.68
United Kingdom																								1.48			1.98			1.76
Hungary						2.80			2.79			2.73			2.67			2.67			3.11			3.05			3.56			3.57
Libya																														0.55
Algeria (LNG)			0.05						1.89			1.99			2.06			2.01			1.79			1.92			1.98			1.27
Others (LNG)																								0.30			0.72			1.00
Other supplies via gasline																														0.08
Other supplies									0.01			0.01			0.01			0.02			0.03			0.03			0.04			0.04
Others outside Europe																		0.94			0.96			0.96			1.14			1.20
Outside Italy			34.93			39.36			39.46			41.27			47.10			54.32			51.89			55.40			59.00			65.42
Total supplies			52.98			56.41			56.27			58.97			63.26			67.96			66.51			68.07			71.16			76.72
Withdrawals from (inputs to) storage																		(2.43	)		0.13			(1.43	)		0.84			0.93
Network losses and measurement differences			(0.43	)		(0.38	)		(0.33	)		(0.56	)		(0.34	)		(0.90	)		(0.92	)		(0.50	)		(0.61	)		(0.52	)
Available for sale			52.55			56.03			55.94			58.41			62.92			64.63			65.72			66.14			71.39			77.13

 

Natural gas sales

(billion cubic meters)

			1995		1996		1997		1998		1999		2000		2001		2002		2003		2004

Italy		52.55			53.23			53.10			55.62			60.19			57.82			56.74			50.43			50.86			50.39
Wholesalers		19.77			20.77			19.97			21.59			22.68			20.68			21.09			17.02			15.36			14.18
Gas release																													0.54
End customers		32.78			32.46			33.13			34.03			37.51			37.14			35.65			33.41			35.50			35.67
Industrial users		16.96			16.72			17.02			17.11			17.84			18.37			18.53			14.43			13.17			12.39
Thermoelectric users		9.79			9.47			10.14			10.47			13.01			12.27			12.21			12.48			15.03			15.92
Residential		6.03			6.27			5.97			6.45			6.66			6.50			4.91			6.50			7.30			7.36
Rest of Europe					2.80			2.84			2.79			2.73			3.90			6.05			12.77			17.54			21.87
Outside Europe																	0.91			0.93			0.92			1.09			1.17
Total sales to third parties		52.55			56.03			55.94			58.41			62.92			62.63			63.72			64.12			69.49			73.43
Own consumption																	2.00			2.00			2.02			1.90			3.70
Total sales to third parties and own consumption		52.55			56.03			55.94			58.41			62.92			64.63			65.72			66.14			71.39			77.13
Sales of natural gas of Eni’s affiliates (net to Eni)		0.11			0.11			0.13			0.16			0.16			0.87			1.38			2.40			6.94			7.32
Europe																	0.41			0.93			1.93			6.23			6.60
Outside Europe		0.11			0.11			0.13			0.16			0.16			0.46			0.45			0.47			0.71			0.72
Total sales of natural gas		52.66			56.14			56.07			58.57			63.08			65.50			67.10			68.54			78.33			84.45

 

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Natural gas transported in Italy (1)

(billion cubic meters)

			1995		1996		1997		1998		1999		2000		2001		2002		2003		2004

Eni		52.55			53.23			53.14			55.69			59.67			63.73			58.17			54.56			51.74			52.15
Third parties		1.48			2.42			4.35			6.07			6.90			9.45			11.41			19.11			24.63			28.26
Enel					0.52			2.48			4.04			4.50			6.27			6.28			8.28			9.18			9.25
Edison Gas											1.27			1.52			2.10			2.98			4.61			7.49			8.00
Other		1.48			1.90			1.87			0.76			0.88			1.08			2.15			6.22			7.96			11.01
		54.03			55.65			57.49			61.76			66.57			73.18			69.58			74.40			76.37			80.41

 

Transport infrastructure

Route		Length of main line (km)		Lines (units)		Diameter (inch)		Pressure min-max (bar)		Transport capacity (mn cm/d)		Transit capacity (mn cm/d)		Compressor stations (units)
Italy
Mazara del Vallo-Minerbio (under upgrading)		1,540		2/3		48/42		75		87.0				7
Tarvisio-Sergnano-Minerbio (under upgrading)		445		2/3		48/42/36/34		58/70		84.4				2
Passo Gries-Mortara		177		2		48/34		54/75		57.5				1
Outside Italy (1) (2)
TENP (Bocholtz-Wallbach)		500		1+1 468 km		36/38/40				66.0		44.0		4
Transitgas (Rodersdorf-Lostorf)		165		1+1 71 km + one 55 km		36/48				76.5		61.0		1
TAG (Baumgarten-Tarvisio) (under upgrading)		380		2+1 258 km		36/38/40/42				95.7		81.3		3
TTPC (Oued Saf Saf-Cap Bon)		371		2		48				79.3		78.2		3
TMPC (Cap Bon-Mazara del Vallo)		155		5		20/26				101.0		101.0
Greenstream (Mellitah-Gela) (3)		520		1		32				24.4		24.4		1
Blue Stream (Beregovaya-Samsun) (3)		391		1+1 383 km		24				49.0		49.0		1

 

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EniPower power stations

		Installed capacity at 2004 year end		Installed capacity in full operation (2007)		Effective/planned start-up		Fuel		Full production of electricity (2008)		Full production of steam (2008)
Power stations		(MW)		(MW)						(TWh/y)		(mn t/y)
Brindisi		302		1,321		2006		gas		7.6		1.4
Ferrera Erbognone (Pavia)		1,030		1,030		2004		gas/syngas		6.7		1.3
Livorno		199		199		2000		gas		1.4		1.8
Mantova		505		836		2005		gas		4.9		2.8
Ravenna		1,097		972		2004		gas		6.5		2.0
Taranto		87		75		2000		gas		0.4		1.2
Ferrara		80		841		2007		gas		5.0		0.9
		3,300		5,274						32.5		11.4

Full installed capacity net of standstill of obsolete plants.

 

Power generation

													2000		2001		2002		2003		2004

Purchases
Natural gas	(mn cm)								827			784			819			940			2,617
Other fuels	(th toe)								842			936			885			847			695
Sales
Electricity production sold	(TWh)								4.77			4.99			5.00			5.55			13.85
Electricity trading	(TWh)											1.56			1.74			3.10			3.10
Steam production sold	(th t)								9,535			10,025			9,302			9,303			10,040
Installed generation capacity	(GW)								1.0			1.0			1.0			1.9			3.3

 

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refining & marketing

 

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MAIN RESULTS

Within its strategy of improving fuel quality Eni launched the new BluSuper gasoline which reduces polluting emissions and guarantees better engine performance. This fuel anticipates the new EU requirements in force from 2009

The average throughput of Agip branded service stations in Italy increased by 4.5% (from 2.4 to 2.5 million liters) due to the network rationalization process, the commercial success of new fuels and of the Do-It-Yourself campaign that at year end had 3.8 million customers provided with fidelity cards

Within Eni’s initiatives for developing non oil activities, 103 service stations entered new franchising agreements under the “AgipCafè®” catering format

Retail sales of fuels on Eni’s network in the rest of Europe reached 4.4 billion liters, with a 15% increase over 2003 as a consequence of a selective development strategy in markets with interesting growth prospects where Eni can leverage on its well known brand name and on logistic and operational synergies

Eni sold its entire interest in Agip do Brasil, operating in the distribution of refined products through over 1,500 service stations and of bottled LPG

In April 2005 Eni defined an agreement for the sale of its 90% interest in Italiana Petroli (IP) with a call-and-put option for the remaining 10% to be exercised in the second half of 2010. The transaction amounts to euro 186 million for 100% of the shares and will be submitted to the approval of the Italian Antitrust Authority. In 2004 IP sold 2.6 billion liters of fuels with an average throughput of 896,000 liters; at year end IP’s network included 2,915 service stations, of these approximately 2,700 were leased

 

Main financial data

(million euro)

			1995		1996		1997		1998		1999		2000		2001		2002		2003		2004

Net sales from operations			10,594			11,326			11,834			10,374			14,415			25,462			22,083			21,546			22,148			26,094
Operating income			456			214			578			730			478			986			985			321			583			965
Capital expenditure			520			584			495			586			524			533			496			550			730			669
Investments			40			48			17			282			2			570			51			54			10			46

 

Main operating data

			1995		1996		1997		1998		1999		2000		2001		2002		2003		2004

Oil products available from processing	(mn ton)		38.10			37.80			36.40			40.10			38.31			38.89			37.78			35.55			33.52			35.75
Sales of petroleum products	(mn ton)		51.90			51.36			51.60			54.19			51.82			53.46			53.24			52.24			50.43			53.54
Italy	(mn ton)		37.62			37.56			36.15			36.00			35.45			35.54			34.99			31.54			29.76			30.69
Outside Italy	(mn ton)		14.28			13.80			15.45			18.19			16.37			17.92			18.25			20.70			20.67			22.85
Service stations at period end (in Italy and outside Italy)	(units)		13,529			13,150			12,756			12,984			12,489			12,085			11,707			10,762			10,647			9,140
Average throughput (in Italy and outside Italy)	(th liters/y)		1,431			1,448			1,463			1,512			1,543			1,555			1,621			1,674			1,771			1,967
Balanced refining capacity of wholly-owned refineries at period end	(th bbls/d)		824			664			664			664			664			664			664			504			504			504
Utilization rate of balanced refining capacity of wholly-owned refineries	(%)		86			87			94			103			96			99			97			99			100			100

 

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refining

Eni is engaged in refining activities in Italy and owns interests in refineries in Germany and the Czech Republic with a total refining capacity (balanced with conversion capacity) of 34 million tonnes (equal to 681,000 barrels/day) with 29.2 million tonnes capacity in Italy.

ITALY

Eni’s refining system in Italy is made up of five wholly owned refineries and a 50% interest in the Milazzo refinery in Sicily. In March 2005 Eni sold its 28% interest in Erg Raffinerie Mediterranee SpA (Priolo refinery) to Erg SpA. Eni’s wholly owned refineries in Italy had a balanced capacity of 25.2 million tonnes (equal to 504,000 barrels/day), corresponding to over a fourth of Italian capacity and a conversion capacity of approximately 16.4 million tonnes, with a 59.2% conversion equivalent capacity, one of the highest in Europe.
In 2004 total intake processing on own account amounted to 33.4 million tonnes (of these 8.1 million tonnes on refineries belonging to third parties, in particular Milazzo, Priolo and Saras). Total intake processing on wholly owned refineries amounted to 26.8 million tonnes with full utilization of balanced capacity.
Eni intends to consolidate its refining activity by: (i) increasing flexibility and conversion capacity with the aim of producing fuels adequate to demand and meeting European environmental standards, in particular Eni aims at increasing the conversion index of its wholly and partiality owned refineries in Italy from 61% in 2004 to 67% in 2008; (ii) reducing FOB refining capacity in order to dampen its exposition to the volatility of margins, typical of low complexity refineries located far from their end markets. The constant improvement in Eni’s refining system will allow it to increase its integration with the Exploration & Production segment in order to increase intake volumes of own crudes. The share of own crudes processed will increase from 33% in 2004 to over 36% in 2008.
Each of Eni’s Italian refineries is specialized based on its logistical configuration, geographic location and integration with other Eni business segments.
Sannazzaro, with a balanced primary refining capacity of 160,000 barrels/day and an equivalent conversion index of 42.5% is one of the most efficient refineries in Europe. Located in the south-west of the Po Valley, at the confluence of the rivers Po and Ticino, it produces mainly gasolines, gasoil and other light products for the supply of markets in north-western Italy, Switzerland and Bavaria. Besides its primary distillation plants, this refinery contains two catalytic reforming plants used to increase the octane number of gasolines, an isomerization plant and three desulfurization plants, which allow a high degree of flexibility of production related to market and environmental conditions. The conversion plants are: a fluid catalytic cracker (FCC), an HDCK middle distillate conversion, and a visbreaking thermal conversion unit. This refinery processes mainly oil from Russia, Africa and the North Sea, oil from Eni’s nearby Villafortuna field and, more recently, CPC Blend crude oil from the Caspian Sea carried through the CPC pipeline. From a logistical standpoint this refinery is located along the route of the Central Europe Pipeline, which

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links the Genova terminal with French speaking Switzerland and Bavaria. In 2004 works continued for the completion of the tar (heavy residue from visbreaking) gasification plant that will produce syngas that will be used to fire the nearby EniPower power station at Ferrera Erbognone.
In the medium term Eni plans an increase in the conversion capacity of this refinery by building a new hydrocracking unit (for the production of high quality diesel fuel, kerosene for aircrafts and lubricant bases for the Livorno refinery). Capital expenditure is expected to amount to euro 170 million.
Gela, with a balanced primary refining capacity of 100,000 barrels/day and an equivalent conversion index of 140.1% represents an upstream integrated pole with the production of heavy crudes obtained from nearby Eni fields offshore and onshore Sicily, while downstream it is integrated with Eni’s nearby petrochemical plants. Located on the southern coast of Sicily, it manufactures fuels for automotive use and residential heating purposes, as well as petrochemical feedstocks. Its high conversion level allows it to minimize the yield of fuel oil and semi-finished products. Besides its primary distillation plants, this refinery contains the following plants: an FCC unit with advanced technology for the conversion of low grade feedstocks and two coking plants for the vacuum conversion of heavy residues. All these plants are integrated in order to process heavy residues and feedstocks and manufacture valuable products. This refinery also contains modern residue and exhaust fume treatment plants which allow the complex to comply with the most exacting environmental standards. Oil and oil products are handled on land and by sea.
Taranto, with a balanced primary refining capacity of 90,000 barrels/day and an equivalent conversion index of 71.6%, can process a wide range of crudes and semi-finished products with great operational flexibility. It mainly produces fuels for automotive use and residential heating purposes for the south-eastern Italian markets. Besides its primary distillation plants, this refinery contains desulfurization plants and conversions plants such as: a two-stage thermal conversion plant (visbreaking/thermal cracking) and an RHU conversion plant, one of the most advanced plants in the world that allows to convert high sulphur content residues into valuable products with low environmental impact. It processes most of the oil produced in Eni’s Val d’Agri fields carried to Taranto through the Monte Alpi pipeline; in 2004 a total of 2.3 million tonnes of this oil were processed.
In the medium term Eni plans an increase of the conversion capacity of this refinery through the conversion of one of the four RHU reactors into a hydrocracking plant for the manufacture of high quality diesel fuel and virgin naphtha destined to Eni’s Brindisi petrochemical plant. Planned expenditure amounts to approximately euro 60 million.
Livorno, with a balanced primary refining capacity of 84,000 barrels/day and an equivalent conversion index of 11.4%, manufactures mainly gasolines, fuel oil for bunkering, specialty products and lubricant bases. Besides its primary distillation plants, this refinery contains two gasoline treatment plants, an isomerization plant and an octanization plant for the manufacture of highly environmental friendly gasolines, as well an advanced solvex cycle for lubricant manufacture. Its pipeline links with the local harbor and with the Florence storage sites allow the Livorno facility to operate with great efficiency as concerns reception, handling and distribution of products.
Porto Marghera, with a balanced primary refining capacity of 70,000 barrels/day and an equivalent conversion index of 22.8%, produces mainly gasolines and other light products for the supply of markets in north-eastern Italy, Austria, Slovenia and Croatia. Besides its primary distillation plants, this refinery contains a gasoline treatment plant, octanization plants and a two-stage thermal conversion plant (visbreaking/thermal cracking) for increasing yields of valuable products.

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OUTSIDE ITALY

In Germany Eni holds an 8.3% interest in the Schwedt refinery and a 20% interest in Bayernoil, an integrated industrial pole including the Ingolstadt, Vohburg and Neustadt refineries. Eni’s refining capacity in Germany amounts to approximately 70,000 barrels/day. Eni’s share of the production of the three integrated refineries and of the Schwedt refinery is mainly used to supply Eni’s distribution network in Bavaria and Eastern Germany.
Eni holds a 16.33% interest in Ceska Rafinerska which owns and manages two refineries, Kralupy and Litvinov, in the Czech Republic. Eni’s overall balanced conversion capacity from this refinery amounts to 27,000 barrels/day.
Eni is evaluating a restructuring of the Bayernoil refinery pole and the purchase of interests in strategically located refineries aimed at supporting growth in its distribution activities in the rest of Europe.











logistics

Eni is a leader in storage and transport of petroleum products in Italy. Its logistical integrated infrastructure consists of 12 directly managed storage sites and a network of petroleum product pipelines.
Eni holds interests in five companies established by the major Italian operators in the oil business in Vado Ligure-Genova (Petrolig), Arquata Scrivia (Sigemi), Venice (Petroven), Ravenna (Petra) and Trieste (DCT) aimed at reducing costs, increasing efficiency and providing integrated services to customers.
For the transport of refined products on land Eni also owns a pipeline network, integrated by leased pipelines extending over 3,210 kilometers, of these 1,513 are wholly owned.
Eni’s logistics system also makes use of a leased fleet of tanker ships and tanker trucks for the distribution of refined products on the retail and wholesale markets.
Eni also holds a 65% interest in Costiero Gas Livorno, a company that operates an underground storage facility in Livorno with the capacity to store 45,000 cubic meters of propane.
Eni intends to improve the efficiency of its logistics system also through the creation of joint ventures and agreements with other oil companies. In the short term actions are planned on the logistics systems of Rome, Naples and Trieste with the aim of cutting costs and expenditures.

 

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marketing

Retail sales

ITALY

In 2004 Eni sold 13.8 billion liters of fuels and its market share was 36.3%. At December 31, 2004, Eni’s retail distribution network consisted of 7,244 service stations (60% of which under the Agip brand).
Eni is implementing a process of requalification and strategic repositioning of its distribution network in Italy with the objective to reach European standards in terms of throughput and services provided to customers. To this end it intends to promote initiatives aimed at developing customer loyalty and developing non oil activities (catering and convenience stores) and to offer a range of different fuels. Eni targets for 2008 an Agip branded network consisting of 4,270 service stations with average throughput of about 2.8 million liters.

In 2004 Eni started to sell the new BluSuper gasoline, which guarantees better engine performance and efficiency and reduces polluting emissions, thanks to its high antidetonating power resulting from a higher octane number (98 as compared to 95 of ordinary gasolines) and its lack of sulfur. BluSuper complements BluDiesel, sold since 2002, and is part of Eni’s strategy to improve the quality of its fuels, anticipating their compliance with EU regulations (mandatory from 2009) and targeting its offer to customers’ requirements, leveraging on Eni’s integrated refining-logistics-distribution system. In 2004 BluSuper sales amounted to 83 million liters. At year end Agip branded service stations selling BluSuper were about 1,000 corresponding to about 23% of the network.

In 2004 markets confirmed the success of BluDiesel, with sales of 1.2 billion liters (up 37.8% over 2003), corresponding to 21% of total diesel fuel volumes sold on the Agip branded network (16% in 2003) and to 7% of all diesel fuel sales on the Italian market (5.2% in 2003). At the end of 2004 about 3,900 Agip branded service stations were selling BluDiesel, corresponding to about 90% of the Agip network.

In 2004 Eni carried out a Do-It-Yourself campaign which allowed customers accessing self-service outlets provided with an electronic card to obtain price discounts or gifts in proportion to the total amount of purchased fuel, plus a bonus for the most loyal customers and long-distance drivers. At year end the number of cards distributed exceeded 3.8 million. The amount of fuel purchased with these cards was about 30% of all fuel sold on Agip branded service stations. Service stations participating in this initiative were approximately 3,200. Points registered by fidelity cards increased by about 50% over 2003.
Eni continued also its AgipMaxi promotional initiative addressed to truck drivers who purchase diesel fuel at the approximately 800 Agip branded service stations participating in the program. Active fidelity cards were over 38,000.
The improvement in the quality of service to customers led to a further expansion of the automation process of the domestic network. At December 31, 2004 nearly all Agip branded service stations were provided with a corporate credit card system.
In 2004 Eni continued the development of the European Multicard Routex paying card

 

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addressed to professional transport (transporters and car fleets) with sales of 1.4 billion liters (up 9.2% over 2003), while the number of customers provided with this card increased by about 3,000 to 45,000 users at year end. Multicard is used internationally and is part of the international Routex consortium, made up by four oil companies.
Eni continued the development of its non oil retail activities aimed at promoting the development of its network in line with European standards, such as the diffusion of self-service facilities, high-tech car care systems, catering services and innovative commercial outlets. To this end Eni owns master franchisor rights with exclusive rights for the oil sector for some international brands of the restaurant and catering sector.
In 2004, a total of 103 new affiliations were added to the AgipCafè® branded outlets launched in 2003, and by year end 207 franchises were active, while 2 new Pans & Co outlets and 7 new convenience stores under the “SpazioAgip” brand name were opened. A total of 88 new car-wash facilities were opened on Agip branded service stations.
In the next four years Eni intends to continue the development of its non oil activities and expects to provide 70% of its Agip branded network with these structures by 2008 (50% in 2004).

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Wholesale marketing and other sales

Eni sells gasolines and fuels for automotive use and for heating purposes, fuels for agricultural vehicles and for vessels, gasolines and fuel oil. Major customers are wholesalers, the agricultural and manufacturing industries, public utilities and transports. Agricultural customers and fishing fleets are supplied directly at 60 agricultural centers and 100 owned or leased marine fuel outlets.

Eni provides its customers with its experience in the area of fuels with a wide range of products that cover all market requirements. Along with traditional products provided with the high quality Eni standard, there is also an innovative low environmental impact line, which includes Advancediesel and Biodiesel (with very low content of hydrogen sulphide, particulates and carbon dioxide) especially targeted for public and private transports and heating.
Customer care is provided by a very widespread commercial and logistical organization present all over Italy and articulated in local sales offices aided by a network of agents, sales persons and concessionaires.
Eni also sells jet fuel directly at 38 airports, of which 27 in Italy, and marine fuel (bunkering) directly at 38 ports, of which 23 in Italy.

 

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other businesses

LPG
In Italy Eni is a leader in the manufacture, distribution and sale of LPG. In 2004 Eni sold 676,000 tonnes of LPG for heating and automotive use, with a 19.1% market share. Additional 400,000 tonnes of LPG were sold through other channels mainly to oil companies and traders.
LPG activities in Italy derive their products from 5 Italian refineries and from imports received at the 3 coastal storage sites located in Livorno, Naples and Ravenna.
Product availability and customer requirements are met also with other 10 owned plants/storage sites in Italy and 45 contracts for bottling and storage with third parties’ facilities.
Eni’s LPG sales network is organized over seven sale areas with 19 direct sales offices, 17 agencies and 26 concessionaires. Products are sold also to over 145,000 customers owning small tanks, while the sale network of LPG bottles includes over 12,000 outlets.
In the past few years LPG pipelines were developed and over 12,000 customers are served through direct links with 95 storage facilities.
Following the sale of LPG activities in Brazil, Eni is present only in Ecuador with a 36.6% market share in 2004.


Lubricants
Eni operates 10 (owned and co-owned) blending plants, in Italy, Europe, North and South America, Africa and the Far East.
In Italy Eni is a market leader in lubricants with the manufacturing of base oils and with a range of products including over 650 different blends. Eni masters international state-of-the-art know-how for the formulation of products for vehicles (engine oil, special fluids and transmission oils) and industries (lubricants for hydraulic systems, industrial machinery and metal processing). Base oils are manufactured primarily at its refinery in Livorno. Eni owns a 33% interest in Viscolube, the main facility in Italy for the reprocessing of used oils. Eni owns two facilities for the production of additives and solvents. In 2004, retail and wholesale sales in Italy amounted to over 142,000 tonnes with a 25.8% market share. Eni also sold approximately 5,000 tonnes of special products (white oils, transformer oil and anti-freeze fluids). Outside Italy sales amounted to approximately 110,000 tonnes, of these about 50% were registered in Europe (mainly Germany, Netherlands and Spain) and 26% in the Americas (mainly United States and Argentina).


Oxygenates
Eni, through its subsidiary Ecofuel (Eni’s interest 100%), sells about 2 million tonnes/year of oxygenates mainly MTBE (8% of world demand) and methanol. About 71% of products are manufactured in Eni’s plants in Ravenna, Venezuela (in joint venture with Pequiven) and Saudi Arabia (in joint venture with Sabic), the remaining 29% is bought. In Venezuela Eni plans to convert its MTBE plants to the manufacture of isoethane, due to the environmental problems posed by MTBE.

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Refining system in 2004

Ownership share

Conversion equivalent

Primary balanced refining capacity Eni share

Primary balance refining capacity total

Fluid catalytic cracking FCC

Residue Conversion

Go-Finer

Mild Hydro- cracking/ Hydro- cracking

Visbreaking/ Thermal Cracking

Coking

		(%)		(%)		(bbls/d)		(bbls/d)		(bbls/d)		(bbls/d)		(bbls/d)		(bbls/d)		(bbls/d)		(bbls/d)
Wholly owned refineries				59.2		504		504		69		20		34		28		85		47
Italy
Sannazzaro		100.0		42.5		160		160		34						28		28
Gela		100.0		140.1		100		100		35				34						47
Taranto		100.0		71.6		90		90				20						35
Livorno		100.0		11.4		84		84
Porto Marghera		100.0		22.8		70		70										22
Partially owned refineries (1)				49.7		177		804		169		24		27		54		97
Italy
Milazzo		50.0		69.6		80		160		38		24				32
Germany						-
Ingolstadt/Vohburg/Neustadt (Bayernoil)		20.0		32.6		52		258		58								33
Schwedt		8.3		41.8		19		223		49				27				49
Czech Republic						-
Kralupy and Litvinov (Ceska Rafinerska)		16.3		28.8		27		163		24						22		14
Total Refineries				56.7		681		1,308		238		44		62		82		181		47

 

Refining capacity

			1995		1996		1997		1998		1999		2000		2001		2002		2003		2004

Balanced capacity at period end (1)	(th bbls/d)		977			897			853			859			859			859			814			654			681			681
Balanced capacity of wholly-owned refineries at period end	(th bbls/d)		824			664			664			664			664			664			664			504			504			504
Processing at wholly-owned refineries	(th bbls/d)		712			718			621			681			640			659			645			501			502			535
Balanced capacity utilization of wholly-owned refineries	(%)		86			87			94			103			96			99			97			99			100			100

 

Petroleum products availability

(million tons)

			1995		1996		1997		1998		1999		2000		2001		2002		2003		2004

Italy
Products processed in wholly-owned refineries			35.60			35.90			31.10			34.05			32.00			32.93			32.24			30.09			25.09			26.75
Products processed for third parties			(3.60	)		(3.50	)		(3.50	)		(3.24	)		(2.78	)		(3.41	)		(1.45	)		(1.88	)		(1.72	)		(1.50	)
Products processed in non owned refineries			4.80			4.80			8.00			7.90			8.08			8.41			5.92			6.27			8.43			8.10
Products consumed and lost			(2.00	)		(2.00	)		(2.00	)		(1.94	)		(2.07	)		(2.11	)		(1.95	)		(1.91	)		(1.64	)		(1.64	)
Products available			34.80			35.20			33.60			36.77			35.23			35.82			34.76			32.57			30.16			31.71
Purchases of finished products and change in inventories			5.92			5.16			6.75			5.74			5.45			4.30			5.19			6.27			5.86			5.07
Finished products transferred to foreign cycle			(3.10	)		(2.80	)		(4.20	)		(6.51	)		(5.23	)		(4.58	)		(4.96	)		(5.56	)		(5.19	)		(5.03	)
Consumption for power production																								(1.74	)		(1.07	)		(1.06	)
Sales			37.62			37.56			36.15			36.00			35.45			35.54			34.99			31.54			29.76			30.69
Outside Italy
Products available			3.30			2.60			2.80			3.33			3.08			3.07			3.02			2.98			3.36			4.04
Purchases and change in inventories			7.88			8.40			8.45			8.35			8.06			10.27			10.27			12.16			12.12			13.78
Finished products transferred from Italian cycle			3.10			2.80			4.20			6.51			5.23			4.58			4.96			5.56			5.19			5.03
Sales			14.28			13.80			15.45			18.19			16.37			17.92			18.25			20.70			20.67			22.85
Sales in Italy and outside Italy			51.90			51.36			51.60			54.19			51.82			53.46			53.24			52.24			50.43			53.54

 

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Oil products sales in Italy and outside Italy

(million tons)

			1995		1996		1997		1998		1999		2000		2001		2002		2003		2004

Retail sales			12.60			12.38			12.09			12.02			11.85			11.57			11.64			11.14			10.99			10.93
Wholesale sales			13.30			12.10			11.30			11.73			11.42			11.10			11.24			10.64			10.35			10.70
			25.90			24.48			23.39			23.75			23.27			22.67			22.88			21.78			21.34			21.63
Petrochemicals			6.61			6.18			5.97			5.75			5.38			4.93			4.23			3.82			2.79			3.05
Other sales (1)			5.11			6.90			6.79			6.50			6.80			7.94			7.88			5.94			5.63			6.01
Sales in Italy			37.62			37.56			36.15			36.00			35.45			35.54			34.99			31.54			29.76			30.69
Retail sales rest of Europe									2.25			2.35			2.36			2.35			2.47			2.57			3.02			3.47
Retail sales Africa and Brazil									0.68			1.11			1.55			1.43			1.71			1.44			1.18			0.57
			3.10			3.07			2.93			3.46			3.91			3.78			4.18			4.01			4.20			4.04
Wholesale sales			6.31			6.25			6.17			6.20			6.40			5.46			5.55			5.65			6.01			5.30
			9.41			9.32			9.10			9.66			10.31			9.24			9.73			9.66			10.21			9.34
Other sales (1)			4.87			4.48			6.35			8.53			6.06			8.68			8.52			11.04			10.46			13.51
Sales outside Italy			14.28			13.80			15.45			18.19			16.37			17.92			18.25			20.70			20.67			22.85
			51.90			51.36			51.60			54.19			51.82			53.46			53.24			52.24			50.43			53.54

 

Number of service stations

(units)

			1995		1996		1997		1998		1999		2000		2001		2002		2003		2004

Italy		11,234			10,958			10,615			9,828			9,425			9,045			8,351			7,710			7,290			7,244
of which ordinary stations		10,955			10,686			10,345			9,563			9,160			8,783			8,157			7,546			7,134			7,097
of which highway stations		279			272			270			265			265			262			194			164			156			147
Outside Italy		2,295			2,192			2,141			3,156			3,064			3,040			3,356			3,052			3,357			1,896
Central Europe		1,328			1,169			1,112			1,081			1,044			1,007			988			1,013			1,230			1,309
Iberian Peninsula		147			167			186			192			200			201			202			198			357			356
Eastern Europe		66			93			121			142			145			165			185			223			226			231
Africa		754			763			722			685			593			262			262
Latin America											1,056			1,082			1,405			1,719			1,618			1,544
		13,529			13,150			12,756			12,984			12,489			12,085			11,707			10,762			10,647			9,140

 

Average throughput

(thousand liters/number of service stations)

			1995		1996		1997		1998		1999		2000		2001		2002		2003		2004

Italy			1,382			1,376			1,405			1,475			1,530			1,565			1,643			1,707			1,813			1,863
Rest of Europe									2,042			2,141			2,200			2,210			2,303			2,276			2,378			2,393
Brazil												1,122			1,074			856			914			967			942
Africa									926			1,080			1,079			1,515			1,943
Average throughput outside Italy			1,665			1,824			1,753			1,661			1,586			1,524			1,563			1,585			1,671			2,393
Average throughput			1,431			1,448			1,463			1,512			1,543			1,555			1,621			1,674			1,771			1,967

 

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Market shares in Italy

(%)

			1995		1996		1997		1998		1999		2000		2001		2002		2003		2004

Retail			45.9			45.2			43.4			41.7			41.0			40.2			39.7			37.5			36.6			36.3
Gasoline			46.6			45.6			43.9			42.4			41.4			40.6			40.1			37.7			36.2			35.5
Gasoil			46.3			45.5			43.3			42.3			41.7			41.3			40.9			38.6			38.4			38.2
LPG (automotive)			32.6			36.0			37.7			27.9			28.3			26.6			25.4			23.8			22.0			20.0
Wholesale			25.7			23.7			23.1			23.3			24.4			24.0			25.6			23.9			24.1			27.0
Gasoil			42.4			37.3			35.5			35.5			35.0			34.5			35.4			34.7			33.1			33.0
Fuel oil			14.6			13.1			11.0			10.8			11.6			12.9			14.9			13.3			12.6			17.7
Domestic market share			32.7			31.2			30.5			30.1			30.9			30.4			31.5			29.5			29.5			31.3
Total market share (retail + wholesale)
Gasoline			46.9			45.8			43.9			43.6			42.2			41.3			40.8			38.3			36.8			36.0
Gasoil			43.9			40.5			38.6			38.5			38.0			37.6			38.1			36.8			35.9			35.9
LPG			29.0			30.0			29.8			24.8			22.9			22.0			22.0			20.9			19.4			19.1

 

Retail market shares outside Italy

(%)

									1998		1999		2000		2001		2002		2003		2004

Central Europe
Austria												8.1			7.7			7.1			7.7			8.1			8.2			8.0
Switzerland												6.4			6.6			6.8			6.4			6.0			5.7			5.7
Germany												2.6			2.6			2.6			2.7			2.6			3.1			3.8
France												0.4			0.4			0.4			0.6			0.8			1.1			1.2
Eastern Europe
Hungary												4.5			4.3			4.1			4.5			6.1			6.7			6.4
Czech Republic												4.2			4.3			4.3			4.3			5.7			4.9			5.2
Romania												1.0			0.9			1.0			1.1			1.1			0.9			..
Iberian Peninsula
Spain												1.7			1.7			1.8			1.6			1.6			2.2			3.0
Portugal												2.1			2.0			1.7			1.6			1.5			0.9			1.0
Africa
Nigeria												6.6			8.6			8.9			9.7			-			-			-
Zambia												9.3			9.9			6.9			9.7			-			-			-
South America
Brazil												2.3			2.8			2.6			3.8			3.9			4.2			-

 

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oilfield services construction and engineering

 

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Main financial data

(million euro)

			1995		1996		1997		1998		1999		2000		2001		2002		2003		2004

Net sales from operations			1,179			1,447			1,647			1,705			1,467			1,310			1,961			3,149			4,231			4,306
Operating income			115			124			138			160			108			141			256			302			304			293
Capital expenditure			144			132			228			334			412			231			289			211			261			199
Investments			2									10									69			1,052			13
Order backlog at December 31			1,803			1,919			2,346			2,463			2,588			2,630			2,853			5,158			5,225			5,306
Offshore construction			720			759			1,043			900			1,363			1,312			1,229			3,276			3,265			3,303
Offshore drilling			131			412			454			748			622			582			546			550			499			317
Leased FPSO																					184			170			142			117
Onshore construction			624			428			492			434			257			609			577			656			776			763
Onshore drilling			44			36			72			98			66			127			317			195			179			296
LNG																								250			318			447
Maintenance																								61			46			63
Infrastructure			284			284			285			283			280

 

Main operating data

			1995		1996		1997		1998		1999		2000		2001		2002		2003		2004

Offshore pipelines laid	(km)		1,067			804			1,610			2,009			979			276			781			1,798			1,409			1,634
Onshore pipelines laid	(km)		1,153			1,777			1,221			873			1,303			483			552			687			612			465
Offshore structures installed	(ton)		162,157			97,140			108,745			65,331			111,164			57,087			73,028			55,960			118,211			172,664
Onshore structures installed	(ton)		12,500			26,420			36,024			30,514			30,767			13,000			18,120			30,060			29,930			15,888
Offshore drilling	(km)		92			134			99			94			88			96			107			125			129			130
Onshore drilling	(km)		116			159			178			167			63			147			190			348			386			455
Offshore wells drilled	(units)		34			43			25			52			53			50			36			50			59			59
Onshore wells drilled	(units)		34			42			43			78			30			44			55			100			119			150

Business areas

OFFSHORE CONSTRUCTION

Saipem has gained a sound competitive positioning in the segment of large EPIC projects for the development of offshore hydrocarbon fields by integrating its technological and operational skills, supported by a world-class fleet, with engineering and project management capabilities acquired on the market (among which Bouygues Offshore, Moss Maritime, Petromarine, Idpe). The demand for these services is expected to increase in particular in West Africa, the Caspian Sea, the Far East, Russia and Asia Pacific, in accordance with plans for the development of hydrocarbon reserves announced by the major oil companies.
The development of offshore fields, especially in the deep offshore, is more and more frequently performed by means of floating production units (FPU), where Saipem has an excellent competitive positioning, while the demand for installation of fixed platforms is slowly declining. Among FPUs, FPSO vessels¹ offer the best development prospects due to their storage capacity, which allows to develop fields remote from transmission infrastructure, and to their versatility, which allows at the end of the useful life of a field to relocate vessels on other fields thus expanding their useful life.
Saipem is recognized as one of the leading international companies for the design, procurement and installation of fixed platforms, in particular in the segment of ultra heavy lifting, thanks to the technical features of its vessels. It is a world leader in the laying

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(1)		Other floating production units are semi-submersible platforms, tension leg platforms and submersible pipe alignment rigs.

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OFFSHORE DRILLING

Saipem provides offshore drilling services to oil companies mainly in key areas such as West Africa, the Middle East, the North Sea and North Africa. Its offshore drilling fleet consists of 10 advanced vessels properly equipped for its primary operations and some drilling plants installed on board of fixed offshore platforms. The technical features of its vessels allow Saipem to keep significant market positions in the most complex areas of deep and ultra deep waters. One of its most important offshore drilling vessels is the Saipem 10000, designed to explore and develop hydrocarbon reservoirs operating in excess of 3,000 meters water depth in full dynamic positioning. The ship has a storage capacity of 140,000 barrels and can maintain a steady operating position without anchor moorings by means of 6 computerized azimuth thrusters, which offset and correct the effect of wind, waves and current in real time. Capital expenditure for building this ship amounted to about dollar 300 million. The vessel is operating in ultra deep waters (over 1,000 meters) in West Africa.
Other relevant vessels are Scarabeo 5 and 7, third and fourth generation semi-submersible rigs able to operate at depths of 1,900 and 1,200 meters of water respectively.

LEASED FPSO

Saipem provides to oil companies services for the development of offshore hydrocarbon fields by leasing its fleet of FPSO vessels. Following its recent acquisitions (in particular Moss Maritime and Bouygues Offshore) Saipem significantly strengthened its design

 

 

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skills. The leasing of an FPSO represents an alternative to direct expenditure for oil companies. West Africa is the market with the highest expected growth rates due to the number of development projects announced or started-up by oil companies. Saipem’s main vessels are: (i) FPSO Firenze, a tanker ship which, after its conversion into a floating production and storage vessel, has been installed in Eni’s Aquila field, in the Adriatic Sea, where it operates at a depth of 850 meters; (ii) FPSO Mystras that has been installed since January 2004 in the Okono and Okpoho oil fields operated by Eni with a 100% interest in the deep offshore of Nigeria. Saipem intends to expand its market share in this business and plans to upgrade its offer by designing new generic FPSO vessels, designed and equipped in direct cooperation with the client in order to identify standard features that make the vessel easily employable in more than one development projects according to the client’s portfolio of assets.

ONSHORE CONSTRUCTION
Eni operates in the construction of plants for hydrocarbon production (separation, stabilization, collection of hydrocarbons, pumping stations, water injection) and treatment (removal and recovery of sulphur dioxide and carbon dioxide, fractioning of gaseous liquids, recovery of condensates) and in the installation of large onshore transmission systems (pipelines, compression stations, terminals). The demand for this kind of services from the oil industry is expected to increase in the medium term, in

 

 

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LNG

Saipem operates in the LNG segment following its purchase of Bouygues Offshore and Moss Maritime which contributed their excellent competence in the LNG chain, complementary to the onshore and offshore transmission of natural gas. The markets offering the highest potential are Asia, Europe and the Americas. Services provided by Saipem include: (i) the onshore segment which shows interesting growth prospects, where Saipem holds interesting positions in the design and construction of regasification terminals, storage tanks and vessels; (ii) the offshore segment, that includes FSRU (Floating Storage Regasification Units) and FNLG (Floating Liquefaction plants for Natural Gas) integrated systems which show interesting growth prospects in the medium term due to their lower environmental impact and greater flexibility as compared to other systems. Saipem has the know-how to become a leader in this segment.

MAINTENANCE, MODIFICATION & OPERATION

Saipem is also present in the MMO business which complements the company’s activities and provide interesting growth prospects for the increasing tendency of oil companies to outsource these services (both routine work and upgrading/revamping) and for the development of remote areas for hydrocarbon production. Saipem is capable of seizing the opportunities provided by this segment by leveraging on its specialized know-how also as project manager, on its resources and network of logistical bases.

 

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Construction vessels

Name		Type		Laying technique		Transport/ lifting capability		Maximum laying depth		Pipelaying maximum diameter
						(t)		(m)		(inches)
Castoro 2		Derrick/lay barge				1,000				60
Castoro 6		Semi-submersible large diameter pipelay vessel		S		300		1,150		60
Castoro 8		Crane and pipelay vessel		S		2,177		600		60
Castoro 9		Launching/cargo barge				5,000
Castoro 10		Trench/pipelay barge						300		40
Castoro XI		Launching/cargo barge				15,000
Crawler		Derrick/lay barge				540				48
Saipem 3000		Multipurpose monohull crane, DP (J, S, reel-lay) and lifting vessel		Reel, J, S		2,200		3,000		6
S. 42		Launching/cargo barge				8,000
S. 44		Launching/cargo barge				30,000
S. 45		Launching/cargo barge				20,000
Saipem 7000		Semi-submersible crane and pipelaying (J-lay) DP vessel		J		14,000		3,000		32
Semac 1		Semi-submersible pipelay barge		S		318		600		58
BAR Protector		DP dive support vessel
Saibos FDS		Multipurpose monohull dynamically positioned crane and pipelay (J-lay) vessel for the development of hydrocarbon fields in deep water		J		600		2,000		24
Saibos 230		Mobile crane barge for small-diameter pipelaying
Saibos 103		Launching/cargo barge
BOS 600		Launching/cargo barge				30,000
BOS 355		Crane and pipelay vessel				540				48

 

Drilling vessels

Name

Type

Drilling plant

Maximum depth

Drilling maximum

Other

Crew number maximum

(m)

(m)

Perro Negro 2

Self elevating, triangular, mobile drilling unit (Jack up)

Oilwell E 2000

90

6,500

Heliport provided

112

Perro Negro 3

Self elevating cantilever drilling platform (Jack up)

Ideco E 2100

90

6,000

Heliport provided

87

Perro Negro 4

Self elevating drilling platform (Jack up)

National 110 UE

45

5,000

Heliport provided

60

Perro Negro 5

Self elevating drilling platform (Jack up)

National 1320 UE

90

6,500

Heliport provided

72

Scarabeo 3

Semi-submersible drilling platform helped propulsion system

National 1625 DE

550

7,600

Heliport provided

90

Scarabeo 4

Semi-submersible drilling platform helped propulsion system

National 1625 DE

550

7,600

Heliport provided

90

Scarabeo 5

Semi-submersible drilling platform self propelled

Emsco C 3

1,900

8,000

Heliport provided

100

Scarabeo 6

Semi-submersible drilling platform self propelled

Oilwell E 3000

500

7,600

Heliport provided

91

Scarabeo 7

Semi-submersible drilling platform self propelled

Wirth SH 3000 EG

1,200

8,000

Heliport provided

107

Saipem 10000

Ultra deep water drillship, self propelled, dynamic positioning

Wirth GH 4500 EG

3,000

9,200

Oil storage capacity: 140,000 bbl; heliport provided

160

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oilfield services construction and engineering

 

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Main financial data

(million euro)

			1995		1996		1997		1998		1999		2000		2001		2002		2003		2004

Net sales from operations			1,054			1,109			1,265			1,675			1,535			847			1,166			1,422			2,093			2,197
Operating income			29			35			31			38			41			3						(4	)		7			(33	)
Capital expenditure			7			11			9			20			13			14			15			22			17			10
Investments			1						1						42			22			5			3			9
Order backlog at December 31			2,232			2,455			2,834			2,471			1,851			4,008			4,084			4,907			4,180			3,215
Oil & Gas and Refining			1,272			1,161			1,638			892			803			520			697			1,950			1,487			1,450
Chemical complexes			461			861			778			1,066			454			463			465			673			503			146
Field upstream facilities      and pipelines			478			417			363			459			554			593			610			299			597			398
Energy									46			45			38			138			96			54			31			19
Infrastructure																		2,290			2,213			1,924			1,547			1,102
Aquater - Environmental      Activities																														88
Other			21			16			9			9			1			4			3			7			15			12

Business areas

PLANTS

Oil & Gas. Snamprogetti has the world class know-how to carry out the most complex and technologically advanced projects in the area of plants for hydrocarbon production, natural gas treatment and upgrading, (LNG; recovery and fractioning of natural gas liquids). Based on the capital expenditure plans announced by oil companies, Snamprogetti expects a strong growth in the demand for services in these areas. In particular the segment of transport and treatment of natural gas seems the most dynamic due to the progressive globalization of demand and supply of natural gas. Snamprogetti intends to consolidate its know-how in natural gas treatment, where capital expenditures for expanding liquefaction and regasification capacity of about 100-120 million tonnes/year of LNG (equivalent to 140-170 billion cubic meters/year) are expected in the next four years.

Refining. In this area Snamprogetti has a sound competitive positioning in conventional areas, having built a number of grass root refineries and refining units, and is a leader in the segment of plants for the hydroconversion and hydrotreatment of heavy residues and distillates. Snamprogetti intends to seize the growth opportunities of the business of plants for heavy residue conversion and production of clean fuels. Growth in this business is supported by the wider availability of heavy crudes and by the increasingly stringent environmental requirements on emissions established worldwide. At Eni’s Taranto refinery the first demonstration plant with 1,200 barrels/day capacity based on the Eni Slurry Technology is nearing completion. This technology has a high strategic value and

 

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new technologies

 

Eni is aware of the key role innovative technologies play in the future development of the hydrocarbon industry, it therefore intends to develop key technologies that can contribute to the establishment of competitive advantages and to the meeting of its long to medium term growth and profitability objectives. Research projects are selected according to a strict evaluation of their return and are carefully monitored in light of the maximization of the value of Eni’s project portfolio.
In the next four years Eni intends to invest over euro one billion in R&D, balancing projects aimed at reaching short term objectives for business units with group-wide projects aimed at strengthening medium to long term business sustainability. In particular the main focus of Eni’s R&D lines are: (i) reserve replacement and reduction of mineral risk; (ii) production from non conventional hydrocarbon reserves and optimal management of reserves with high hydrogen sulphide and sulphur content; (iii) expansion in the natural gas market and utilization of associated gas and gas located in remote areas; (iv) improvement of quality and performance of fuels in light of the evolution of engines to increasingly perfected and efficient systems with lower impact on air quality; (v) efficient use of fossil fuels through an improvement in refining yields and an optimal use of each fuel with reduced environmental impact; (vi) mitigation of greenhouse effect, through the capture and geological sequestration of carbon dioxide.

Eni intends to search global alliances in order to participate in research projects that have a longer horizon than the four-year plan. Follows a brief description of the main techniques applied or under development.


Hydrocarbon exploration and production

INNOVATIVE TECHNOLOGIES FOR SUBSOIL SURVEY

In order to prepare a geological model of fields as near as possible to reality aimed at the simulation and monitoring of fields, Eni developed significant industrial applications of highly innovative technologies. The main objective of these technologies is the reduction of mineral risk and the optimization of processes for extracting and recovering hydrocarbons.
New and relevant developments have been reached in the 3D Common Reflection Surface (CRS) Stack, Deep Migration Phase Shift Plus Interpolation (PSPI) and Kirchoff True Amplitude (KTA) proprietary technologies, which allowed to obtain significantly higher results than conventional technologies. The relevant improvement of the final seismic imaging and the higher density and precision of information on the characteristics of subsoils of fields (in Italy, the Gulf of Mexico, West and North Africa) allowed to reduce the risk associated to the definition of geological models in the field’s development phase.
Significant developments and industrial applications derived also from advanced technologies for modeling and monitoring fields, such as: the integrated workflow for the characterization and study of fractured systems, cross-well seismics, 4D or time lapse seismics to monitor the behavior of producing fields over time.

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INNOVATIVE TECHNOLOGIES FOR THE TREATMENT OF FLUIDS

In the field of transmission and treatment of hydrocarbons Eni developed and applied innovative technologies with particular attention to multi-phase fluids (water, oil and/or gas) in order to optimize production and reduce its environmental impact. In particular, Eni successfully tested at its Cavone oil center a pilot plant for the removal of oils from layer waters which allows to reduce the residual concentration of hydrocarbons in water to less than 10 ppm, starting from an initial content of over 1,000 ppm. The system is based on the use of adsorbing polymers capable first to capture oil particles and then to release them favoring their coalescence and making them easier to separate. The system is currently being engineered in order to make it useable on platforms. Another ongoing project aims at optimizing new design centrifugal systems for the separation of water from oil and for the confirmation of innovative technologies for removing soluble organic compounds.
Also in the field of multiphase pumping Eni is applying innovative technologies as an alternative to traditional production systems in marginal fields, fields located in frontier areas or difficult contexts such as deep waters. The multiphase technology becomes extremely useful, in terms of economic benefits, in offshore applications where the possibility to transport production from the wells over long distances allows to transfer processing activities on existing facilities and infrastructure, thus significantly reducing technical costs for the development of fields. Infield applications of multiphase pumping have been recently installed offshore and onshore in the United Kingdom and Tunisia with other partners in order to obtain a higher recovery of hydrocarbons.


Integrated projects and corporate development projects

MANAGEMENT OF HYDROGEN SULPHIDE AND SULPHUR

The R&D project for the optimal management of reserves with high content of hydrogen sulphide and sulphur started in 2003 is continuing. The project aimed at developing innovative technologies and/or advanced processes able to manage the disposal and possible exploitation of high amounts of sour gas and sulphur that are co-produced with

 

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hydrocarbons, while respecting safety and the environment. In particular innovative processes for the separation of hydrogen sulphide and its conversion into plain sulphur and the storage and/or use of this sulphur are in the development phase. In parallel innovative processes are being studied for the reinjection of hydrogen sulphide into the field and its monitoring.

ENI SLURRY TECHNOLOGY

At Eni’s Taranto refinery the testing is ongoing of a Demonstration Plant with a 1,200 barrels/day capacity based on Eni Slurry Technology (EST) which, when demonstrated in 2005, will provide Eni with an important competitive lever. This is a strategically relevant technology because it allows a more economic use of heavy crudes and the total transformation of a barrel of oil into high quality fuels, avoiding the fatal production of fuel oil, otherwise destined to be used in electricity generation in Rankine cycles with low yield and high environmental impact. The subtraction of fuel oil from thermoelectric use will indirectly favor the penetration of combined cycle gas fired plants with high efficiency and very low environmental impact.

TRANSMISSION: TAP PROJECT

The TAP Project (High Pressure Transmission) aims at developing reliable technologies for making the transmission via pipeline of relevant amounts of natural gas from production areas to consuming markets economically viable, thus favoring the sale of gas produced by Eni’s upstream activities. This project was started in May 2003 and is aimed at developing the most advanced long distance, high capacity, high pressure and high grade solutions with relevant targets related to: (i) distances over 3,000 kilometers; (ii) natural gas volumes to be transported of about 20-30 billion cubic meters/year; (iii) pressure equal to or higher than 15 Mpa and (iv) use of high and very high grade steel (e.g. X100). In 2004 the construction phase started of an experimental pilot pipeline with 48-inch diameter in the utmost resistant steel, which will significantly contribute to reduce the time necessary for the development of the technology. Within this project also the construction of a 10-kilometer long portion of pipe in X80 steel started.

CONVERSION OF NATURAL GAS INTO LIQUIDS

Aim of the project is to exploit the relevant natural gas reserves that are not extracted because too far from end markets, through their conversion into high quality, synthetic oil products totally sulphur and aromatic free. At Eni’s Sannazzaro pilot plant, research on production of wax by means of Fischer-Tropsch technology was completed and validation activities are underway.

INNOVATIVE FUELS: CLEAN DIESEL FUEL PROGRAM

In 2004 Eni started to sell the new BluSuper gasoline, which guarantees better engine performance and efficiency and reduces polluting emissions, thanks to its high antidetonating power resulting from a higher octane number (98 as compared to 95 of ordinary gasolines) and its lack of sulfur. BluSuper complements BluDiesel, sold since 2002, and is part of Eni’s strategy to improve the quality of its fuels, anticipating their compliance with EU regulations (mandatory from 2009) and targeting its offer to customers’ requirements, leveraging on Eni’s integrated refining-logistics-distribution system.
Eni also continued R&D activities of various process lines aimed at improving the quality of its gasoil pool, among these a process for oxidating desulphurization in order to manufacture sulphur-free gasoil at competitive prices.

GHG PROGRAM: GEOLOGICAL SEQUESTRATION OF CARBON DIOXIDE

R&D in the field of environmental protection led to the start-up of an integrated research program Green House Gases (GHG), aimed at verifying the feasibility of the geological sequestration of CO₂ in depleted fields and salty aquifers. As for the former, the potentially employable fields have been identified and characterized. The definition of a pilot project

 

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will be completed in 2005. As part of the program, Eni decided to participate in the second phase of the CO₂ Capture project aimed at finding practical solutions for the capture and sequestration of CO₂.

HYDROGEN PROJECT

Eni’s interest in this field is aimed at the creation of a portfolio of technologies that may be employed in the production of hydrogen as energy vector from various primary energy sources. In 2004 Eni started the construction of a pilot plant for the development of a new type of multi-fuel reformer based on catalytic oxidation with low contact time of liquid and gaseous hydrocarbons. The aim is to produce hydrogen at competitive costs also in medium to small sized plants with high flexibility related to refinery feedstocks available.

STYRENE FROM ETHANE

In cooperation with Dow Chemical Co Eni is developing an innovative technology for the production of styrene monomer from ethane and benzene, that, compared to conventional techniques based on ethylene, will allow to reduce production costs, as confirmed by the demonstration plant, and to free the manufacturer from the need to locate the plant near a petrochemical complex producing ethylene, obtaining also greater flexibility.

 

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financial data

Results of operations

(million euro)

			1995		1996		1997		1998		1999		2000		2001		2002		2003		2004

Net sales from operations		29,381			29,790			31,359			28,341			31,008			47,938			49,272			47,922			51,487			58,382
Other income and revenues		668			665			616			727			952			905			921			1,080			913			1,298
Total revenues		30,049			30,455			31,975			29,068			31,960			48,843			50,193			49,002			52,400			59,680
Purchases, services and other		(18,176	)		(18,679	)		(19,811	)		(18,033	)		(20,000	)		(31,442	)		(32,110	)		(31,893	)		(34,566	)		(39,092	)
Payroll and related costs		(3,142	)		(3,081	)		(3,051	)		(2,917	)		(2,782	)		(2,786	)		(2,927	)		(3,103	)		(3,166	)		(3,264	)
Total operating costs		(21,318	)		(21,760	)		(22,862	)		(20,950	)		(22,782	)		(34,228	)		(35,037	)		(34,996	)		(37,732	)		(42,356	)
Depreciation, amortization and writedowns		(3,415	)		(3,735	)		(3,768	)		(4,308	)		(3,698	)		(3,843	)		(4,843	)		(5,504	)		(5,151	)		(4,861	)
Operating income		5,316			4,960			5,345			3,810			5,480			10,772			10,313			8,502			9,517			12,463
Net financial (expense) income		(698	)		(445	)		(229	)		(41	)		10			64			(295	)		(167	)		(154	)		(95	)
Net (expense) income from investments		(114	)		99			59			396			89			33			(7	)		43			(17	)		229
Income before extraordinary income and income taxes		4,504			4,614			5,175			4,165			5,579			10,869			10,011			8,378			9,346			12,597
Net extraordinary (expense) income		(248	)		(76	)		(198	)		(245	)		(528	)		(512	)		1,737			(29	)		49			(56	)
Income before income taxes		4,256			4,538			4,977			3,920			5,051			10,357			11,748			8,349			9,395			12,541
Income taxes		(1,904	)		(2,167	)		(2,254	)		(1,450	)		(2,054	)		(4,335	)		(3,529	)		(3,127	)		(3,241	)		(4,653	)
Income before minority interests		2,352			2,371			2,723			2,470			2,997			6,022			8,219			5,222			6,154			7,888
Minority interests		(117	)		(72	)		(80	)		(142	)		(140	)		(251	)		(468	)		(629	)		(569	)		(614	)
Net income		2,235			2,299			2,643			2,328			2,857			5,771			7,751			4,593			5,585			7,274

 

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Balance sheet

(million euro)

(at December 31)			1995		1996		1997		1998		1999		2000		2001		2002		2003		2004

Net fixed assets		20,953			20,440			20,641			20,871			23,074			26,797			33,851			33,693			36,360			37,616
Intangible assets		1,095			1,011			1,689			1,776			2,175			2,391			2,850			3,175			3,610			3,190
Investments		1,501			1,328			1,482			1,382			1,446			4,223			2,740			2,797			3,160			3,282
Accounts receivable financing and securities related to operations		1,583			1,565			1,352			1,453			1,670			1,659			1,630			1,408			983			772
Net accounts payable in relation to investments		(1,033	)		(955	)		(738	)		(746	)		(717	)		(825	)		(657	)		(870	)		(1,018	)		(972	)
Non current assets		24,099			23,389			24,426			24,736			27,648			34,245			40,414			40,203			43,095			43,888
Inventories		2,719			2,631			2,629			2,442			2,626			3,120			3,014			3,200			3,293			3,320
Trade accounts receivable		6,574			6,760			6,448			6,076			7,486			9,186			9,346			9,090			9,772			10,785
Trade accounts payable		(3,455	)		(3,485	)		(3,508	)		(3,517	)		(4,200	)		(4,903	)		(5,081	)		(5,579	)		(5,950	)		(6,353	)
Tax liabilities		(4,557	)		(4,249	)		(3,704	)		(3,083	)		(4,219	)		(5,629	)		(4,173	)		(2,978	)		(2,532	)		(3,102	)
Reserve for contingencies		(2,634	)		(2,656	)		(3,106	)		(3,246	)		(3,735	)		(5,702	)		(5,377	)		(5,522	)		(5,708	)		(6,102	)
Other operating assets (liabilities)		1,947			1,901			1,614			1,408			821			(602	)		1,636			1,585			446			848
Net working capital		594			902			373			80			(1,221	)		(1,973	)		(635	)		(204	)		(679	)		(604	)
Reserve for employee termination indemnities		(1,125	)		(763	)		(505	)		(356	)		(411	)		(457	)		(486	)		(507	)		(555	)		(590	)
Net capital employed		23,568			23,528			24,294			24,460			26,016			31,815			39,293			39,492			41,861			42,694
Shareholders’ equity (1)		11,893			13,084			15,324			16,156			18,398			22,401			27,483			26,257			26,696			30,338
Minority interest		886			885			920			1,234			1,351			1,672			1,706			2,094			1,622			2,128
		12,779			13,969			16,244			17,390			19,749			24,073			29,189			28,351			28,318			32,466
Net borrowings		10,789			9,559			8,050			7,070			6,267			7,742			10,104			11,141			13,543			10,228
Total liabilities and shareholders’ equity		23,568			23,528			24,294			24,460			26,016			31,815			39,293			39,492			41,861			42,694

 

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Cash flow statement and change in net borrowings

(million euro)

			1995		1996		1997		1998		1999		2000		2001		2002		2003		2004

Net income before minority interest		2,352			2,371			2,723			2,470			2,997			6,022			8,220			5,222			6,154			7,888
as adjusted:
- amortization and depreciation   and other non monetary items		3,610			3,514			4,056			4,468			3,869			4,307			4,841			5,682			5,493			5,245
- net gains on disposals of assets		(25	)		(139	)		(185	)		(443	)		(60	)		(82	)		(170	)		(152	)		(35	)		(374	)
- dividends, interest,   extraordinary income    (expense) and income taxes		2,948			2,727			2,706			1,743			2,618			4,990			2,164			3,305			3,268			4,935
Cash generated from operating income before changes in working capital		8,885			8,473			9,300			8,238			9,424			15,237			15,055			14,057			14,880			17,694
Changes in working capital related to operations		(457	)		(490	)		(268	)		785			(660	)		(1,592	)		(206	)		(510	)		(465	)		(564	)
Dividends received, taxes paid, interest and extraordinary income/expense (paid) received during the year		(1,833	)		(2,954	)		(2,517	)		(2,159	)		(516	)		(3,062	)		(6,765	)		(2,969	)		(3,588	)		(4,768	)
Net cash provided by operating activities		6,595			5,029			6,515			6,864			8,248			10,583			8,084			10,578			10,827			12,362
Capital expenditure		(3,680	)		(3,792	)		(4,169	)		(5,152	)		(5,483	)		(5,431	)		(6,606	)		(8,048	)		(8,802	)		(7,503	)
Acquisitions		(231	)		(352	)		(153	)		(407	)		(114	)		(3,483	)		(3,082	)		(1,315	)		(985	)		(316	)
Disposals		850			689			363			371			295			277			2,114			935			650			1,549
Other investments and divestments		(144	)		(6	)		(9	)		(118	)		(446	)		(69	)		(40	)		(319	)		1,110			82
Free cash flow		3,390			1,569			2,547			1,558			2,500			1,877			470			1,831			2,800			6,174
Borrowings (repayment) of debt related to financing activities		308			(727	)		66			2,019			(433	)		111			994			(1,171	)		1,400			131
Changes in short and long term financial debt		(3,133	)		45			(1,121	)		(3,715	)		(294	)		121			(490	)		3,736			1,629			(3,619	)
Dividends paid and changes in minority interests and reserves		(561	)		(833	)		(999	)		(645	)		(1,311	)		(2,118	)		(950	)		(3,846	)		(5,933	)		(3,165	)
Change in consolidation area and exchange differences		(7	)		(14	)		67			(24	)		(29	)		41			38			(64	)		(107	)		(17	)
NET CASH FLOW FOR THE PERIOD		(4	)		41			560			(807	)		433			32			62			486			(211	)		(496	)
Free cash flow		3,390			1,569			2,547			1,558			2,500			1,877			470			1,831			2,800			6,174
Net borrowings of acquired companies		(64	)		(10	)		1			(6	)					(901	)		(1,582	)		(51	)		(692	)
Net borrowings of divested companies		641			392			174			30			3			20			185			39			1			279
Exchange differences on net borrowings and other changes		(133	)		112			(213	)		43			(389	)		(353	)		(312	)		990			1,422			27
Dividends paid and changes in minority interests and reserves		(561	)		(833	)		(999	)		(645	)		(1,311	)		(2,118	)		(950	)		(3,846	)		(5,933	)		(3,165	)
CHANGE IN NET BORROWINGS		3,273			1,230			1,510			980			803			(1,475	)		(2,189	)		(1,037	)		(2,402	)		3,315

 

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Contents

Net sales from operations

(million euro)

			1995		1996		1997		1998		1999		2000		2001		2002		2003		2004

Exploration & Production		5,664			6,578			6,897			5,206			6,840			12,308			13,960			12,877			12,746			15,349
Gas & Power		8,400			9,352			9,985			9,625			9,900			14,427			16,098			15,297			16,067			17,258
Refining & Marketing		10,594			11,326			11,834			10,374			14,415			25,462			22,083			21,546			22,148			26,094
Petrochemicals		6,830			5,063			4,985			4,048			4,096			6,018			5,108			4,516			4,487			5,417
Oilfield Services Construction and Engineering		2,231			2,551			2,890			3,348			2,988			2,146			3,114			4,546			6,306			6,494
Other activities		297			290			417			552			555			608			695			1,449			1,178			1,279
Corporate and financial companies																							586			700			851
Activities to be divested		1,249			905			464			253			83
Consolidation adjustment		(5,884	)		(6,275	)		(6,113	)		(5,065	)		(7,869	)		(13,031	)		(11,786	)		(12,895	)		(12,145	)		(14,360	)
		29,381			29,790			31,359			28,341			31,008			47,938			49,272			47,922			51,487			58,382

 

Net sales to customers

(million euro)

			1995		1996		1997		1998		1999		2000		2001		2002		2003		2004

Exploration & Production		2,303			2,803			3,254			2,300			1,228			2,924			5,530			4,082			4,278			5,118
Gas & Power		7,834			8,776			9,563			9,272			9,532			13,714			15,430			14,674			15,617			16,808
Refining & Marketing		9,638			10,386			10,861			9,626			13,542			23,913			20,881			20,509			21,527			25,335
Petrochemicals		6,501			4,722			4,640			3,787			3,777			5,448			4,290			3,770			4,049			4,918
Oilfield Services Construction and Engineering		1,862			2,148			2,450			2,938			2,689			1,762			2,605			4,067			5,409			5,606
Other activities		88			84			129			166			157			177			89			701			445			479
Corporate and financial companies																				100			119			162			118
Activities to be divested		1,155			871			462			252			83
		29,381			29,790			31,359			28,341			31,008			47,938			49,272			47,922			51,487			58,382

 

Net sales by geographic area of destination

(million euro)

			1995		1996		1997		1998		1999		2000		2001		2002		2003		2004

Italy		19,255			19,288			19,914			18,059			18,813			27,184			27,591			23,797			25,491			27,096
Other European Union countries		4,654			4,051			4,182			3,339			4,191			6,944			8,226			8,974			10,785			13,469
Rest of Europe		1,393			1,662			1,785			1,737			1,551			2,711			3,136			4,188			3,303			3,743
Africa		828			1,004			1,167			1,160			1,496			2,083			2,180			2,478			5,854			4,105
Americas		2,014			2,265			2,334			2,432			3,148			6,034			6,169			5,317			2,778			5,790
Asia		1,165			1,402			1,958			1,596			1,795			2,959			1,949			3,154			3,245			3,631
Other areas		72			118			19			18			14			23			21			14			31			548
Total outside Italy		10,126			10,502			11,445			10,282			12,195			20,754			21,681			24,125			25,996			31,286
		29,381			29,790			31,359			28,341			31,008			47,938			49,272			47,922			51,487			58,382

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Contents

Purchases, services and other

(million euro)

			1995		1996		1997		1998		1999		2000		2001		2002		2003		2004

Production costs - raw, ancillary and consumable materials and goods		12,423			12,647			13,415			11,038			13,189			23,691			23,993			22,658			24,087			27,466
Production costs - services		4,942			5,061			5,330			6,173			6,035			6,513			7,507			8,614			10,431			10,675
Lease, rental and royalty expenses		955			969			1,155			1,048			941			1,203			1,242			1,454			1,407			1,600
Other expenses		888			1,038			1,239			1,232			1,022			1,518			1,302			1,575			1,423			1,536
less:
capitalized direct costs associated with self-constructed assets		(523	)		(562	)		(716	)		(805	)		(563	)		(616	)		(745	)		(842	)		(1,277	)		(1,010	)
services billed to joint venture partners		(509	)		(474	)		(612	)		(653	)		(624	)		(867	)		(1,189	)		(1,566	)		(1,505	)		(1,175	)
		18,176			18,679			19,811			18,033			20,000			31,442			32,110			31,893			34,566			39,092

 

Payroll and related costs

(million euro)

			1995		1996		1997		1998		1999		2000		2001		2002		2003		2004

Wages and salaries		2,278			2,244			2,226			2,234			2,134			2,175			2,271			2,441			2,412			2,481
Social security contributions		705			726			725			651			621			627			602			650			693			672
Employee termination indemnities		189			159			128			126			121			117			114			121			126			124
Employee retirement and similar obligations		3			6			17			11			16			11			12			15			31			58
Other costs		152			153			147			85			73			57			83			119			91			99
less:
revenues related to personnel costs		(36	)		(47	)		(39	)		(36	)		(33	)		(40	)		(51	)		(53	)		(26	)		(19	)
capitalized direct costs associated with self-constructed assets		(149	)		(160	)		(153	)		(154	)		(150	)		(161	)		(180	)		(190	)		(161	)		(151	)
		3,142			3,081			3,051			2,917			2,782			2,786			2,851			3,103			3,166			3,264

 

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Contents

Depreciation, amortization and writedowns

(million euro)

			1995		1996		1997		1998		1999		2000		2001		2002		2003		2004

Exploration & Production		1,428			1,542			1,810			1,897			1,654			2,364			3,163			3,552			3,133			3,021
Gas & Power		840			930			994			1,033			1,045			474			500			417			533			572
Refining & Marketing		461			434			420			459			476			502			508			490			493			465
Petrochemicals		339			281			259			251			284			273			323			125			125			107
Oilfield Services Construction and Engineering		74			81			87			107			109			144			203			267			271			251
Other activities		19			24			30			30			24			31			46			48			51			44
Corporate and financial companies																							63			104			106
Activities to be divested		39			17			10			1
Total depreciation and amortization		3,200			3,309			3,610			3,778			3,592			3,788			4,743			4,962			4,710			4,566
Writedowns		215			426			158			530			106			55			100			542			441			295
		3,415			3,735			3,768			4,308			3,698			3,843			4,843			5,504			5,151			4,861

 

Operating income by segment

(million euro)

			1995		1996		1997		1998		1999		2000		2001		2002		2003		2004

Exploration & Production		2,094			2,612			2,590			594			2,834			6,603			5,984			5,175			5,746			8,017
Gas & Power		1,703			2,024			2,012			2,513			2,580			3,178			3,672			3,244			3,627			3,463
Refining & Marketing		456			214			578			730			478			986			985			321			583			965
Petrochemicals		1,042			101			187						(362	)		4			(415	)		(126	)		(176	)		271
Oilfield Services Construction and Engineering		144			159			169			198			149			144			255			298			311			260
Other activities																							(214	)		(293	)		(244	)
Corporate and financial companies		(118	)		(98	)		(138	)		(168	)		(199	)		(143	)		(168	)		(196	)		(281	)		(269	)
Activities to be divested		(5	)		(52	)		(53	)		(57	)
		5,316			4,960			5,345			3,810			5,480			10,772			10,313			8,502			9,517			12,463

 

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Contents

Net financial (expense) income

(million euro)

			1995		1996		1997		1998		1999		2000		2001		2002		2003		2004

Interest and other financial income		852			623			579			485			339			501			539			512			436			451
Securities gains		237			302			246			176			197			116			95			44			34			31
Interest and other financial expense		(1,878	)		(1,386	)		(1,125	)		(790	)		(556	)		(791	)		(978	)		(738	)		(710	)		(667	)
Provision to the risk reserve																													(62	)
Exchange gain (loss), net		32			(35	)		33			49			(27	)		165			(10	)		(30	)					(2	)
less:
interest capitalized		59			51			38			39			57			73			49			43			86			154
		(698	)		(445	)		(229	)		(41	)		10			64			(295	)		(167	)		(154	)		(95	)
of which income on receivables related to operations and tax credits		263			227			197			195			254			201			170			122			116			108

 

Income (expense on) from investments

(million euro)

			1995		1996		1997		1998		1999		2000		2001		2002		2003		2004

Gains on sales		16			69			135			401			17			19			76			55			39			36
Dividends		14			23			42			67			63			44			40			32			22			72
Income from equity investments		147			66			91			68			108			147			158			184			189			200
Writedown of investments		(291	)		(59	)		(213	)		(143	)		(101	)		(178	)		(282	)		(245	)		(278	)		(82	)
Other		1			4			4			3			2			1			1			17			11			3
		(114	)		99			59			396			89			33			(7	)		43			(17	)		229

 

Net extraordinary income (expense)

(million euro)

			1995		1996		1997		1998		1999		2000		2001		2002		2003		2004

Gains on sales		248			245			67			57			77			86			3,473			257			290			661
of which gain on the public offering of Snam Rete Gas																				2,453									519
Other extraordinary income		59			100			76			351			26			146			177			112			273			44
Extraordinary income		307			345			143			408			103			232			3,650			369			563			705
Restructuring costs:
changes and provisions      to risk reserve		(289	)		(88	)		(207	)		(277	)		(330	)		(182	)		(885	)		(157	)		(248	)		(601	)
cost of redundancy incentives		(76	)		(205	)		(77	)		(129	)		(110	)		(202	)		(257	)		(114	)		(116	)		(54	)
writedowns of fixed assets      and losses from investments		(46	)		(65	)		(38	)		(183	)		(169	)		(34	)		(651	)		(55	)		(66	)		(20	)
		(411	)		(358	)		(322	)		(589	)		(609	)		(418	)		(1,793	)		(326	)		(430	)		(675	)
Other extraordinary expense		(144	)		(63	)		(19	)		(64	)		(22	)		(326	)		(120	)		(72	)		(84	)		(86	)
Extraordinary expense		(555	)		(421	)		(341	)		(653	)		(631	)		(744	)		(1,913	)		(398	)		(514	)		(761	)
Net extraordinary income (expense)		(248	)		(76	)		(198	)		(245	)		(528	)		(512	)		1,737			(29	)		49			(56	)

 

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Contents

Fixed assets

(million euro)

(at period end)			1995		1996		1997		1998		1999		2000		2001		2002		2003		2004

Fixed assets, gross:
Exploration & Production		13,804			14,837			17,633			18,878			23,329			28,220			38,667			38,534			38,811			39,479
Gas & Power		13,536			14,691			14,513			14,997			15,579			16,881			15,867			16,467			18,926			20,038
Refining & Marketing		7,986			7,526			7,852			8,316			8,620			8,854			9,083			8,172			8,652			9,002
Petrochemicals		4,642			4,030			4,163			4,356			4,611			4,618			5,862			4,169			4,266			4,252
Oilfield Services Construction      and Engineering		1,115			1,354			1,614			1,898			2,336			2,564			2,805			3,447			3,531			3,644
Other activities		163			167			227			239			202			224			241			2,472			2,403			2,359
Corporate and      financial companies																							132			149			194
Activities to be divested		731			581			424			340
		41,977			43,186			46,426			49,024			54,677			61,361			72,525			73,393			76,738			78,968
Fixed assets, net:
Exploration & Production		6,450			6,675			7,651			7,790			10,155			13,113			20,728			19,862			20,338			20,580
Gas & Power		7,074			7,473			6,624			6,419			6,142			7,068			6,598			7,191			9,500			10,445
Refining & Marketing		4,108			3,398			3,409			3,566			3,472			3,393			3,332			3,097			3,170			3,302
Petrochemicals		2,595			2,163			2,076			2,071			1,958			1,759			1,626			1,285			1,181			1,154
Oilfield Services Construction      and Engineering		485			546			718			919			1,257			1,370			1,467			1,758			1,741			1,732
Other activities		74			76			97			104			90			94			100			418			338			295
Corporate and      financial companies																							82			92			108
Activities to be divested		167			109			66			2
		20,953			20,440			20,641			20,871			23,074			26,797			33,851			33,693			36,360			37,616

 

Capital expenditure by segment

(million euro)

			1995		1996		1997		1998		1999		2000		2001		2002		2003		2004

Exploration & Production		1,584			1,663			2,322			2,882			3,268			3,539			4,276			5,615			5,681			4,912
Gas & Power		1,232			1,207			882			921			906			794			1,065			1,315			1,760			1,446
Refining & Marketing		520			584			495			586			524			533			496			550			730			669
Petrochemicals		133			158			180			331			289			265			390			145			141			99
Oilfield Services Construction and Engineering		151			143			237			354			425			245			304			233			278			209
Other activities		36			27			34			61			55			55			75			119			70			48
Corporate and financial companies																							71			142			120
Activities to be divested		24			10			19			17			16
		3,680			3,792			4,169			5,152			5,483			5,431			6,606			8,048			8,802			7,503

 

Capital expenditure by geographic area of origin

(million euro)

			1995		1996		1997		1998		1999		2000		2001		2002		2003		2004

Italy		2,336			2,365			2,246			2,535			2,238			2,206			2,436			2,396			2,708			2,613
Other European Union countries		458			300			478			439			320			439			595			567			1,067			370
Rest of Europe		184			242			306			465			390			283			249			284			302			387
Africa		583			671			904			1,103			1,159			1,186			1,405			2,497			3,026			2,626
Americas		76			86			144			261			1,095			753			923			721			369			756
Asia		39			127			90			345			280			562			923			1,333			795			1,073
Other areas		4			1			1			4			1			2			75			250			535			78
Total outside Italy		1,344			1,427			1,923			2,617			3,245			3,225			4,170			5,652			6,094			4,890
		3,680			3,792			4,169			5,152			5,483			5,431			6,606			8,048			8,802			7,503

 

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Net borrowings

(million euro)

(at period end)		Debt and bonds		Cash		Securities not related to operations		Accounts receivable financing not related to operations		Other, net		Total
1995
Short-term		7,360		(984)		(1,544)		(586)		(5)		4,241
Long-term		6,977				(429)						6,548
		14,337		(984)		(1,973)		(586)		(5)		10,789
1996
Short-term		8,339		(1,026)		(2,063)		(897)		42		4,395
Long-term		5,506				(351)				9		5,164
		13,845		(1,026)		(2,414)		(897)		51		9,559
1997
Short-term		7,924		(1,586)		(2,204)		(1,180)		(5)		2,949
Long-term		5,347				(156)		(91)		1		5,101
		13,271		(1,586)		(2,360)		(1,271)		(4)		8,050
1998
Short-term		4,948		(779)		(1,119)		(389)		(6)		2,655
Long-term		4,517				(85)				(17)		4,415
		9,465		(779)		(1,204)		(389)		(23)		7,070
1999
Short-term		4,764		(1,212)		(1,645)		(343)		26		1,590
Long-term		4,787				(85)				(25)		4,677
		9,551		(1,212)		(1,730)		(343)		1		6,267
2000
Short-term		5,928		(1,244)		(1,432)		(550)		(50)		2,652
Long-term		5,116				(24)				(2)		5,090
		11,044		(1,244)		(1,456)		(550)		(52)		7,742
2001
Short-term		6,464		(1,305)		(940)		(74)		(29)		4,116
Long-term		6,084				(312)						5,772
		12,819		(1,360)		(1,252)		(74)		(29)		10,104
2002
Short-term		8,870		(1,791)		(730)		(1,465)		(3)		4,881
Long-term		6,550				(290)						6,260
		15,420		(1,791)		(1,020)		(1,465)		(3)		11,141
2003
Short-term		7,918		(1,580)		(792)		(32)		(65)		5,449
Long-term		8,336				(2)		(240)				8,094
		16,254		(1,580)		(794)		(272)		(65)		13,543
2004
Short-term		5,051		(1,084)		(800)		(175)		(196)		2,796
Long-term		7,674				(2)		(240)				7,432
		12,725		(1,084)		(802)		(415)		(196)		10,228

 

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employees

Number of employees at year end

(units)

			1995		1996		1997		1998		1999		2000		2001		2002		2003		2004

Exploration & Production	Italy		5,856			5,750			5,912			5,444			5,294			5,014			4,495			4,617			4,555			4,539
	Outside Italy		2,884			2,691			2,666			2,726			2,479			2,727			3,038			3,098			3,163			3,166
			8,740			8,441			8,578			8,170			7,773			7,741			7,533			7,715			7,718			7,705
Gas & Power	Italy		17,355			16,341			14,474			13,977			13,669			13,175			11,704			10,852			10,302			10,216
	Outside Italy		217			3,784			3,432			3,132			2,806			2,925			2,582			2,465			2,680			2,627
			17,572			20,125			17,906			17,109			16,475			16,100			14,286			13,317			12,982			12,843
Refining & Marketing	Italy		13,838			12,662			11,543			11,176			10,341			9,760			8,638			7,332			6,882			6,879
	Outside Italy		7,173			7,003			6,897			7,230			6,720			6,370			6,534			6,425			6,395			2,345
			21,011			19,665			18,440			18,406			17,061			16,130			15,172			13,757			13,277			9,224
Petrochemicals	Italy		18,465			14,969			14,354			12,957			12,596			11,573			10,910			5,744			5,585			5,237
	Outside Italy		2,366			1,778			1,653			1,370			1,312			1,284			1,569			1,514			1,465			1,328
			20,831			16,747			16,007			14,327			13,908			12,857			12,479			7,258			7,050			6,565
Oilfield Services Construction and Engineering
Oilfield Services      and Construction	Italy		3,276			3,194			2,925			2,832			2,648			2,326			2,279			2,255			2,423			2,493
	Outside Italy		5,361			6,907			8,086			9,682			7,359			7,560			12,881			22,770			18,910			19,139
			8,637			10,101			11,011			12,514			10,007			9,886			15,160			25,025			21,333			21,632
Engineering	Italy		3,422			3,402			3,376			3,328			3,102			3,001			3,055			3,433			3,544			3,637
	Outside Italy		506			405			411			393			378			330			417			633			1,580			1,471
			3,928			3,807			3,787			3,721			3,480			3,331			3,472			4,066			5,124			5,108
Other activities	Italy		1,499			1,510			2,834			3,527			3,247			3,841			4,255			6,347			5,692			4,959
	Outside Italy		96			92			94			69			72			83			48			13			13			24
			1,595			1,602			2,928			3,596			3,319			3,924			4,303			6,360			5,705			4,983
Corporate and financial companies	Italy																							3,107			3,252			3,351
	Outside Italy																							50			80			86
																								3,157			3,332			3,437
Activities to be divested	Italy		4,105			2,936			1,521			1,063
	Outside Italy		3
			4,108			2,936			1,521			1,063
Total employees at year end	Italy		67,816			60,764			56,939			54,304			50,897			48,690			45,336			43,687			42,235			41,311
	Outside Italy		18,606			22,660			23,239			24,602			21,126			21,279			27,069			36,968			34,286			30,186
			86,422			83,424			80,178			78,906			72,023			69,969			72,405			80,655			76,521			71,497
of which senior managers (1)			2,165			2,012			1,992			1,914			1,788			1,683			1,438			1,537			1,733			1,760

 

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supplemental oil and gas information¹

Oil and natural gas reserves

Proved oil and gas reserves are the estimated quantities of crude oil, natural gas and natural gas liquids which geological and engineering data demonstrate with reasonable certainty to be recoverable in future years from known reservoirs under technical, contractual, economic and operating conditions existing at the time. Prices include consideration of changes in existing prices provided only by contractual arrangements, but not on escalations based upon future conditions. Proved reserves exclude royalties and interests owned by others.
Proved developed reserves are proved reserves that can be estimated to be recovered through existing wells with existing equipment and operating methods.
Proved undeveloped oil and gas reserves are reserves that are expected to be recovered from new wells on undrilled acreage, or from existing wells where a relatively major expenditure is required for completion.
Additional oil and gas reserves expected to be obtained through the application of fluid injection or other improved recovery techniques for supplementing natural forces and mechanisms of primary recovery are included as proved developed reserves only after testing by a pilot project or after the operation of an installed program has confirmed through production response that increased recovery will be achieved.
The estimates of Eni’s reserve quantities have been prepared in accordance with applicable U.S. Securities and Exchange Commission regulation. The estimates of proved reserves, developed and undeveloped are based on data prepared by Eni.
Eni operates under PSAs in several of the foreign jurisdictions where it has oil and gas exploration and production activities. In countries where Eni operates under PSAs, proved reserves are shown in accordance with Eni’s economic interest (pursuant to PSA contract terms) in the oil and gas reserve quantities estimated to be recoverable in future years. Such reserves include estimated quantities allocated to Eni for recovery of costs, income taxes owed by Eni but settled by its joint venture partners (which are state-owned entities) out of Eni’s share of production, and Eni’s net equity share after cost recovery. Proved oil and gas reserves associated with PSAs represent 43%, 46% and 51% of total proved reserves as of year-end 2002, 2003 and 2004, respectively, on an oil-equivalent basis.
Proved reserves include the volume of natural gas used for own consumption and volumes of natural gas held in certain Eni storage fields in Italy. Proved reserves attributable to these fields include: (i) the residual natural gas volumes of the reservoirs; (ii) natural gas volumes from other Eni fields input into these reservoirs in subsequent periods. Proved reserves do not include volumes owned by or acquired from third parties. Gas withdrawn from storage is produced and thereby detracted from proved reserves when it is sold to third parties.
Numerous uncertainties are inherent in estimating quantities of proved reserves and in projecting future rates of production and timing of development expenditures. The accuracy of any reserve estimate is a function of the quality of available data and engineering and geological interpretation and judgement. Results of drilling, testing and production after the date of the estimate may require substantial upward and downward revision. In addition, changes in oil and natural gas prices could have an effect on the quantities of Eni’s proved reserves because the estimates of reserves are based on prices and costs at the date when such estimates are made. Reserves estimates are also subject to revision as prices fluctuate due to the cost recovery feature under certain PSAs.
The following table presents yearly changes in estimated proved reserves, developed and undeveloped, of crude oil (including condensate and natural gas liquids) and natural gas.

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(1)		The following information is not audited and is presented in accordance with the Statement of Financial Accounting Standard No. 69 “Disclosures about Oil and Gas Producing Activities”.

 

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Contents

Proved hydrocarbon reserves (1)

(million boe)

Italy (2)

North Africa

West Africa

North Sea

Rest of World

Total

Reserves at December 31, 1995		1,736			980			870			584			148			4,318
Purchase of minerals in place		12			185			3			57						257
Revisions of previous estimates					(12	)		26			33			(2	)		45
Improved recovery								6			12						18
Extensions and discoveries		35			352			8			1			1			397
Production		(146	)		(85	)		(66	)		(41	)		(19	)		(357	)
Sales of minerals in place											(3	)					(3	)
Reserves at December 31, 1996		1,637			1,420			847			643			128			4,675
Purchase of minerals in place		37			1									254			292
Revisions of previous estimates		31			77			46			24			25			203
Improved recovery					1			2			14						17
Extensions and discoveries		83			117			24			44			5			273
Production		(142	)		(85	)		(67	)		(59	)		(20	)		(373	)
Sales of minerals in place					(1	)					(11	)		(2	)		(14	)
Reserves at December 31, 1997		1,646			1,530			852			655			390			5,073
Purchase of minerals in place
Revisions of previous estimates		13			126			65			41			(24	)		221
Improved recovery								17									17
Extensions and discoveries		68			118			49			27			73			335
Production		(153	)		(88	)		(73	)		(57	)		(20	)		(391	)
Sales of minerals in place
Reserves at December 31, 1998		1,574			1,686			910			666			419			5,255
Purchase of minerals in place		6			17						5			93			121
Revisions of previous estimates		24			208			48			28			(1	)		307
Improved recovery								3									3
Extensions and discoveries		11			37			180			1			14			243
Production		(138	)		(99	)		(74	)		(54	)		(30	)		(395	)
Sales of minerals in place
Reserves at December 31, 1999		1,477			1,849			1,067			646			495			5,534
Purchase of minerals in place					3			12			80			159			254
Revisions of previous estimates		15			86			56			32			231			419
Improved recovery					3			9									12
Extensions and discoveries		16			100			32			3			69			220
Production		(119	)		(111	)		(83	)		(62	)		(56	)		(430	)
Sales of minerals in place					(1	)											(1	)
Reserves at December 31, 2000		1,389			1,929			1,093			700			897			6,008
Purchase of minerals in place		3			118						206			437			764
Revisions of previous estimates		22			171			93			63			166			515
Improved recovery					11			16			6						33
Extensions and discoveries		21			8			24			9			58			120
Production		(120	)		(115	)		(86	)		(104	)		(81	)		(506	)
Sales of minerals in place								(4	)		(1	)					(5	)
Reserves at December 31, 2001		1,315			2,122			1,136			879			1,477			6,929
Purchase of minerals in place											27			12			39
Revisions of previous estimates		5			14			113			24			181			337
Improved recovery					14			1									15
Extensions and discoveries		29			12			124			31			142			338
Production		(111	)		(129	)		(87	)		(112	)		(93	)		(532	)
Sales of minerals in place		(39	)								(24	)		(33	)		(96	)
Reserves at December 31, 2002		1,199			2,033			1,287			825			1,686			7,030

 

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continues Proved hydrocarbon reserves (1)

(million boe)

Italy (2)

North Africa

West Africa

North Sea

Rest of World

Total

Reserves at December 31, 2002		1,199			2,033			1,287			825			1,686			7,030
Purchase of minerals in place		2									159			1			162
Revisions of previous estimates		(116	)		29			89			77			208			287
Improved recovery					15			16									31
Extensions and discoveries		22			74			27						232			355
Production		(111	)		(127	)		(95	)		(126	)		(111	)		(570	)
Sales of minerals in place											(23	)					(23	)
Reserves at December 31, 2003		996			2,024			1,324			912			2,016			7,272
Revisions of previous estimates					127			69			29			2			227
Improved recovery					11			50			4						65
Extensions and discoveries		8			94			34			10			183			329
Production		(101	)		(137	)		(116	)		(112	)		(128	)		(594	)
Sales of minerals in place		(13	)		(2	)		(4	)		(36	)		(26	)		(81	)
Reserves at December 31, 2004		890			2,117			1,357			807			2,047			7,218
Proved developed hydrocarbon reserves (1)
Reserves at December 31, 1995		1,174			800			495			373			64			2,906
Reserves at December 31, 1996		1,069			761			458			468			72			2,828
Reserves at December 31, 1997		1,018			734			454			423			73			2,702
Reserves at December 31, 1998		914			778			476			460			102			2,730
Reserves at December 31, 1999		921			796			586			416			202			2,921
Reserves at December 31, 2000		860			824			590			443			301			2,995
Reserves at December 31, 2001		825			875			640			773			654			3,767
Reserves at December 31, 2002		774			797			703			724			705			3,703
Reserves at December 31, 2003		702			806			710			822			1,190			4,230
Reserves at December 31, 2004		671			961			749			707			1,212			4,300

 

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Contents

Proved oil reserves (1)

(million barrels)

Italy

North Africa

West Africa

North Sea

Rest of World

Total

Reserves at December 31, 1995		318			869			749			375			91			2,402
Purchase of minerals in place		6			84			3			45						138
Revisions of previous estimates		8			1			19			21						49
Improved recovery								6			7						13
Extensions and discoveries		19			79			8			1			1			108
Production		(35	)		(80	)		(65	)		(30	)		(13	)		(223	)
Sales of minerals in place											(3	)					(3	)
Reserves at December 31, 1996		316			953			720			416			79			2,484
Purchase of minerals in place														254			254
Revisions of previous estimates		20			76			47			23			21			187
Improved recovery					1			2			12						15
Extensions and discoveries		61			34			24			26			5			150
Production		(37	)		(78	)		(65	)		(43	)		(14	)		(237	)
Sales of minerals in place					(1	)					(6	)		(2	)		(9	)
Reserves at December 31, 1997		360			985			728			428			343			2,844
Purchase of minerals in place
Revisions of previous estimates		(20	)		86			78			38			(25	)		157
Improved recovery								17									17
Extensions and discoveries		25			31			39			9						104
Production		(36	)		(78	)		(72	)		(42	)		(13	)		(241	)
Sales of minerals in place
Reserves at December 31, 1998		329			1,024			790			433			305			2,881
Purchase of minerals in place		6			13						1			79			99
Revisions of previous estimates		20			107			52			22			44			245
Improved recovery								3									3
Extensions and discoveries		5			8			126			2			11			152
Production		(32	)		(81	)		(71	)		(41	)		(18	)		(243	)
Sales of minerals in place
Reserves at December 31, 1999		328			1,071			900			417			421			3,137
Purchase of minerals in place					3			12			46			133			194
Revisions of previous estimates		(13	)		42			59			36			166			290
Improved recovery					2			9									11
Extensions and discoveries		9			6			32			1			17			65
Production		(28	)		(84	)		(78	)		(45	)		(39	)		(274	)
Sales of minerals in place					(1	)											(1	)
Reserves at December 31, 2000		296			1,039			934			455			698			3,422
Purchase of minerals in place					118						120			248			486
Revisions of previous estimates		29			79			91			37			20			256
Improved recovery					11			16			6						33
Extensions and discoveries		9			8			21			8			24			70
Production		(25	)		(84	)		(81	)		(74	)		(50	)		(314	)
Sales of minerals in place								(5	)								(5	)
Reserves at December 31, 2001		309			1,171			976			552			940			3,948
Purchase of minerals in place											13			12			25
Revisions of previous estimates		2			(31	)		112			4			(33	)		54
Improved recovery					14			1									15
Extensions and discoveries		11			10			14			18			104			157
Production		(30	)		(92	)		(81	)		(77	)		(54	)		(334	)
Sales of minerals in place		(37	)								(12	)		(33	)		(82	)
Reserves at December 31, 2002		255			1,072			1,022			498			936			3,783

 

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continues Proved oil reserves (1)

(million barrels)

Italy

North Africa

West Africa

North Sea

Rest of World

Total

Reserves at December 31, 2002		255			1,072			1,022			498			936			3,783
Purchase of minerals in place											86						86
Revisions of previous estimates		21			51			59			52			153			336
Improved recovery					15			16									31
Extensions and discoveries		6			32			28						214			280
Production		(30	)		(90	)		(87	)		(86	)		(64	)		(357	)
Sales of minerals in place											(21	)					(21	)
Reserves at December 31, 2003		252			1,080			1,038			529			1,239			4,138
Revisions of previous estimates		(1	)		(22	)		44			12			(18	)		15
Improved recovery					11			48			4						63
Extensions and discoveries		4			20			34			4			144			206
Production		(30	)		(94	)		(104	)		(74	)		(75	)		(377	)
Sales of minerals in place					(2	)		(4	)		(25	)		(6	)		(37	)
Reserves at December 31, 2004		225			993			1,056			450			1,284			4,008
Proved developed oil reserves
Reserves at December 31, 1995		253			755			470			249			43			1,770
Reserves at December 31, 1996		222			712			433			306			43			1,716
Reserves at December 31, 1997		226			680			429			287			50			1,672
Reserves at December 31, 1998		180			689			452			315			70			1,706
Reserves at December 31, 1999		172			681			473			276			148			1,750
Reserves at December 31, 2000		144			650			487			303			189			1,773
Reserves at December 31, 2001		171			685			539			476			443			2,314
Reserves at December 31, 2002		168			610			554			426			483			2,241
Reserves at December 31, 2003		173			640			560			464			610			2,447
Reserves at December 31, 2004		174			655			588			386			668			2,471

 

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Contents

Proved natural gas reserves

(million cubic meters)

Italy (1)

North Africa

West Africa

North Sea

Rest of World

Total

Reserves at December 31, 1995		225,027			18,157			19,786			34,328			9,344			306,642
Purchase of minerals in place		765			16,516						2,039						19,320
Revisions of previous estimates		(1,204	)		(2,050	)		1,228			2,002			(334	)		(358	)
Improved recovery											822						822
Extensions and discoveries		2,585			44,740						18			122			47,465
Production		(17,567	)		(806	)		(183	)		(1,939	)		(1,033	)		(21,528	)
Sales of minerals in place
Reserves at December 31, 1996		209,606			76,557			20,831			37,270			8,099			352,363
Purchase of minerals in place		5,900			117												6,017
Revisions of previous estimates		1,796			265			(189	)		89			619			2,580
Improved recovery											399						399
Extensions and discoveries		3,590			13,525						2,931			5			20,051
Production		(16,822	)		(1,158	)		(222	)		(2,713	)		(951	)		(21,866	)
Sales of minerals in place											(836	)					(836	)
Reserves at December 31, 1997		204,070			89,306			20,420			37,140			7,772			358,708
Purchase of minerals in place		5															5
Revisions of previous estimates		5,293			6,534			(2,150	)		589			71			10,337
Improved recovery
Extensions and discoveries		6,845			14,264			1,640			2,954			12,036			37,739
Production		(18,641	)		(1,535	)		(205	)		(2,493	)		(1,225	)		(24,099	)
Sales of minerals in place
Reserves at December 31, 1998		197,572			108,569			19,705			38,190			18,654			382,690
Purchase of minerals in place		53			538						617			2,288			3,496
Revisions of previous estimates		632			16,545			(790	)		1,057			(7,393	)		10,051
Improved recovery
Extensions and discoveries		927			4,850			8,734			61			349			14,921
Production		(16,834	)		(2,974	)		(344	)		(2,231	)		(1,826	)		(24,209	)
Sales of minerals in place		(11	)														(11	)
Reserves at December 31, 1999		182,339			127,528			27,305			37,694			12,072			386,938
Purchase of minerals in place											5,531			4,249			9,780
Revisions of previous estimates		4,435			7,242			(551	)		(654	)		10,722			21,194
Improved recovery					50												50
Extensions and discoveries		1,133			15,457						218			8,489			25,297
Production		(14,450	)		(4,383	)		(641	)		(2,646	)		(2,828	)		(24,948	)
Sales of minerals in place		(6	)														(6	)
Reserves at December 31, 2000		173,451			145,894			26,113			40,143			32,704			418,305
Purchase of minerals in place		485									14,181			30,939			45,605
Revisions of previous estimates		(1,041	)		15,254			355			4,190			23,580			42,338
Improved recovery											14						14
Extensions and discoveries		1,869			18			497			121			5,730			8,235
Production (2)		(15,048	)		(5,179	)		(755	)		(4,968	)		(5,011	)		(30,961	)
Sales of minerals in place											(114	)					(114	)
Reserves at December 31, 2001		159,716			155,987			26,210			53,567			87,942			483,422
Purchase of minerals in place											2,454						2,454
Revisions of previous estimates		604			7,281			216			3,266			35,061			46,428
Extensions and discoveries		2,946			269			18,008			2,095			6,316			29,634
Production (2)		(12,905	)		(6,006	)		(1,020	)		(5,697	)		(6,458	)		(32,086	)
Sales of minerals in place		(432	)								(1,918	)					(2,350	)
Reserves at December 31, 2002		149,929			157,531			43,414			53,767			122,861			527,502

 

---

Contents

continues Proved natural gas reserves

(million cubic meters)

Italy (1)

North Africa

West Africa

North Sea

Rest of World

Total

Reserves at December 31, 2002		149,929			157,531			43,414			53,767			122,861			527,502
Purchase of minerals in place		295									12,041			212			12,548
Revisions of previous estimates		(21,753	)		(3,469	)		4,873			3,923			9,197			(7,229	)
Extensions and discoveries		2,387			6,847						10			2,826			12,070
Production (2)		(12,892	)		(6,087	)		(1,390	)		(6,490	)		(7,795	)		(34,654	)
Sales of minerals in place											(310	)
Reserves at December 31, 2003		117,966			154,822			46,897			62,941			127,301			509,927
Revisions of previous estimates		2,992			23,016			3,653			2,151			2,388			34,200
Improved recovery								289									289
Extensions and discoveries		824			11,876						1,079			6,292			20,071
Production (2)		(11,586	)		(6,983	)		(1,874	)		(6,241	)		(8,581	)		(35,265	)
Sales of minerals in place		(2,072	)		(16	)					(1,841	)		(3,273	)		(7,202	)
Reserves at December 31, 2004		108,124			182,715			48,965			58,089			124,127			522,020
Proved developed natural gas reserves
Reserves at December 31, 1995		146,211			7,406			4,179			20,270			3,431			181,497
Reserves at December 31, 1996		134,405			8,044			4,144			26,629			4,789			178,011
Reserves at December 31, 1997		125,776			8,848			4,083			22,359			3,737			164,803
Reserves at December 31, 1998		116,524			14,627			3,870			23,740			5,202			163,963
Reserves at December 31, 1999		118,954			18,928			18,497			22,965			8,791			188,135
Reserves at December 31, 2000		113,601			28,570			16,861			22,926			18,389			200,347
Reserves at December 31, 2001		103,789			31,217			16,543			48,737			34,568			234,854
Reserves at December 31, 2002		96,206			30,690			24,429			48,899			36,335			236,559
Reserves at December 31, 2003		83,996			27,226			24,520			58,754			95,008			289,504
Reserves at December 31, 2004		80,719			49,833			26,154			52,249			88,409			297,364

 

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Contents

Results of operations from oil and gas producing activities (1)

(million euro)

Italy

North Africa

West Africa

North Sea

Rest of World

Total

Year ended December 31, 1995
Revenues:
sales and transfers to affiliates		2,411			744			116									3,271
sales to unaffiliated entities		27			267			864			523			185			1,866
		2,438			1,011			980			523			185			5,137
Production costs		(180	)		(396	)		(365	)		(159	)		(22	)		(1,122	)
Exploration expenses		(142	)		(64	)		(30	)		(52	)		(43	)		(331	)
Depreciation, amortization and writedowns		(456	)		(202	)		(229	)		(206	)		(79	)		(1,172	)
Other income (expense)		(65	)					100			31			(10	)		56
Pretax income from producing activities		1,595			349			456			137			31			2,568
Estimated income taxes		(855	)		(169	)		(203	)		(111	)		(8	)		(1,346	)
Results of operations from E&P activities		740			180			253			26			23			1,222
Year ended December 31, 1996
Revenues:
sales and transfers to affiliates		2,613			819			152						27			3,611
sales to unaffiliated entities		45			436			920			624			244			2,269
		2,658			1,255			1,072			624			271			5,880
Production costs		(222	)		(382	)		(324	)		(153	)		(59	)		(1,140	)
Exploration expenses		(175	)		(81	)		(35	)		(47	)		(50	)		(388	)
Depreciation, amortization and writedowns		(621	)		(198	)		(203	)		(218	)		(82	)		(1,322	)
Other income (expense)		(107	)		(17	)		(52	)		6			(20	)		(190	)
Pretax income from producing activities		1,533			577			458			212			60			2,840
Estimated income taxes		(803	)		(228	)		(269	)		(107	)		(23	)		(1,430	)
Results of operations from E&P activities		730			349			189			105			37			1,410
Year ended December 31, 1997
Revenues:
sales and transfers to affiliates		2,701			781			56						7			3,545
sales to unaffiliated entities		57			464			994			874			258			2,647
		2,758			1,245			1,050			874			265			6,192
Production costs		(306	)		(393	)		(316	)		(231	)		(58	)		(1,304	)
Exploration expenses		(151	)		(133	)		(63	)		(33	)		(97	)		(477	)
Depreciation, amortization and writedowns		(452	)		(273	)		(214	)		(422	)		(88	)		(1,449	)
Other income (expense)		(133	)		(19	)		(70	)		6			24			(192	)
Pretax income from producing activities		1,716			427			387			194			46			2,770
Estimated income taxes		(915	)		(225	)		(263	)		(99	)		(12	)		(1,514	)
Results of operations from E&P activities		801			202			124			95			34			1,256

 

---

Contents

continues Results of operations from oil and gas producing activities

(million euro)

Italy

North Africa

West Africa

North Sea

Rest of World

Total

Year ended December 31, 1998
Revenues:
sales and transfers to affiliates		2,216			573			20						3			2,812
sales to unaffiliated entities		57			256			711			674			185			1,883
		2,273			830			732			674			186			4,695
Production costs		(329	)		(364	)		(254	)		(211	)		(50	)		(1,208	)
Exploration expenses		(154	)		(95	)		(105	)		(35	)		(86	)		(475	)
Depreciation, amortization and writedowns		(787	)		(254	)		(512	)		(517	)		(92	)		(2,162	)
Other income (expense)		(98	)		(21	)		(102	)		(10	)		(51	)		(282	)
Pretax income from producing activities		905			95			(241	)		(99	)		(91	)		568
Estimated income taxes		(382	)		(58	)		(74	)		(7	)		(1	)		(522	)
Results of operations from E&P activities		523			37			(316	)		(106	)		(92	)		46
Year ended December 31, 1999
Revenues:
sales and transfers to affiliates		1,919			958			1,075			650			138			4,740
sales to unaffiliated entities		499			506			81			205			222			1,513
		2,418			1,464			1,156			855			360			6,253
Production costs		(352	)		(370	)		(353	)		(199	)		(52	)		(1,326	)
Exploration expenses		(120	)		(69	)		(61	)		(39	)		(83	)		(372	)
Depreciation, amortization and writedowns		(462	)		(316	)		(253	)		(336	)		(81	)		(1,448	)
Other income (expense)		(183	)		(99	)		(91	)		3			(77	)		(447	)
Pretax income from producing activities		1,301			610			398			284			67			2,660
Estimated income taxes		(542	)		(254	)		(219	)		(110	)		(19	)		(1,144	)
Results of operations from E&P activities		759			356			179			174			48			1,516
Year ended December 31, 2000
Revenues:
sales and transfers to affiliates		3,336			1,748			2,114			1,205			531			8,934
sales to unaffiliated entities		136			1,134			190			373			660			2,493
		3,472			2,882			2,304			1,578			1,191			11,427
Production costs		(399	)		(459	)		(517	)		(238	)		(125	)		(1,738	)
Exploration expenses		(192	)		(84	)		(60	)		(45	)		(180	)		(561	)
Depreciation, amortization and writedowns		(407	)		(393	)		(327	)		(358	)		(375	)		(1,860	)
Other income (expense)		(30	)		(196	)		(132	)		(55	)		(117	)		(530	)
Pretax income from producing activities		2,444			1,750			1,268			882			394			6,738
Estimated income taxes		(986	)		(877	)		(678	)		(479	)		(78	)		(3,098	)
Results of operations from E&P activities		1,458			873			590			403			316			3,640
Year ended December 31, 2001
Revenues:
sales and transfers to affiliates		3,160			1,440			1,807			1,265			322			7,994
sales to unaffiliated entities		140			1,181			169			1,250			1,271			4,011
		3,300			2,621			1,976			2,515			1,593			12,005
Operating expenses		(327	)		(337	)		(221	)		(495	)		(270	)		(1,650	)
Production taxes		(152	)		(124	)		(256	)		(27	)		(36	)		(595	)
Exploration expenses		(77	)		(104	)		(70	)		(51	)		(326	)		(628	)
Depreciation, amortization and writedowns		(474	)		(417	)		(315	)		(704	)		(612	)		(2,522	)
Other income (expense)		(87	)		(129	)		(129	)		(79	)		(214	)		(638	)
Pretax income from producing activities		2,183			1,510			985			1,159			135			5,972
Estimated income taxes		(877	)		(605	)		(628	)		(672	)		(136	)		(2,918	)
Results of operations from E&P activities		1,306			905			357			487			(1	)		3,054

 

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Contents

continues Results of operations from oil and gas producing activities

(million euro)

Italy

North Africa

West Africa

North Sea

Rest of World

Total

Year ended December 31, 2002
Revenues:
sales and transfers to affiliates		2,871			1,673			1,856			1,748			281			8,429
sales to unaffiliated entities		253			1,226			186			695			1,414			3,774
		3,124			2,899			2,042			2,443			1,695			12,203
Operating expenses		(218	)		(352	)		(317	)		(490	)		(237	)		(1,614	)
Production taxes		(138	)		(110	)		(210	)		(20	)		(47	)		(525	)
Exploration expenses		(80	)		(71	)		(116	)		(117	)		(294	)		(678	)
Depreciation, amortization and writedowns		(528	)		(532	)		(390	)		(863	)		(758	)		(3,071	)
Other income (expense)		(258	)		(186	)		(122	)		(47	)		(183	)		(796	)
Pretax income from producing activities		1,902			1,648			887			906			176			5,519
Estimated income taxes		(751	)		(852	)		(578	)		(445	)		(83	)		(2,709	)
Results of operations from E&P activities		1,151			796			309			461			93			2,810
Year ended December 31, 2003
Revenues:
sales and transfers to affiliates		2,609			1,469			1,946			1,913			345			8,282
sales to unaffiliated entities		153			1,188			164			822			1,595			3,922
		2,762			2,657			2,110			2,735			1,940			12,204
Operating expenses		(222	)		(316	)		(283	)		(446	)		(235	)		(1,502	)
Production taxes		(136	)		(97	)		(235	)		(11	)		(79	)		(558	)
Exploration expenses		(89	)		(70	)		(113	)		(96	)		(276	)		(644	)
Depreciation, amortization and writedowns		(458	)		(420	)		(377	)		(759	)		(734	)		(2,748	)
Other income (expense)		(170	)		(264	)		(121	)		14			(289	)		(830	)
Accretion of discount (SFAS 143) (2)		(37	)		(5	)		(14	)		(42	)		(4	)		(102	)
Pretax income from producing activities		1,650			1,485			967			1,395			323			5,820
Estimated income taxes		(629	)		(788	)		(617	)		(750	)		(111	)		(2,895	)
Results of operations from E&P activities		1,021			697			350			645			212			2,925
Year ended December 31, 2004
Revenues:
sales and transfers to affiliates		2,633			1,868			2,762			2,083			508			9,854
sales to unaffiliated entities		148			1,364			306			709			2,086			4,613
		2,781			3,232			3,068			2,792			2,594			14,467
Operating expenses		(223	)		(292	)		(322	)		(405	)		(289	)		(1,531	)
Production taxes		(118	)		(91	)		(379	)		(13	)		(163	)		(764	)
Exploration expenses		(57	)		(47	)		(71	)		(93	)		(155	)		(423	)
Depreciation, amortization and writedowns		(489	)		(437	)		(482	)		(687	)		(849	)		(2,944	)
Other income (expense)		(98	)		(368	)		(216	)		97			(208	)		(793	)
Accretion of discount (SFAS 143) (2)		(37	)		(5	)		(17	)		(15	)		(6	)		(80	)
Pretax income from producing activities		1,759			1,992			1,581			1,676			924			7,932
Estimated income taxes		(632	)		(994	)		(945	)		(948	)		(305	)		(3,824	)
Results of operations from E&P activities		1,127			998			636			728			619			4,108

 

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Contents

Capitalized costs (1)

(million euro)

Italy

North Africa

West Africa

North Sea

Rest of World

Total

At December 31, 1995
Proved mineral interests		4,625			3,148			3,002			2,123			543			13,441
Unproved mineral interests					25			237			4			40			306
Support equipment and facilities		353			81			114			48			13			609
Incomplete wells and other		643			189			66			403			39			1,340
Gross capitalized costs		5,621			3,443			3,419			2,578			635			15,696
Accumulated depreciation, depletion and amortization		(2,642	)		(1,673	)		(1,789	)		(1,046	)		(281	)		(7,431	)
Net capitalized costs		2,979			1,770			1,629			1,531			354			8,265
At December 31, 1996
Proved mineral interests		5,006			3,388			3,066			2,760			604			14,824
Unproved mineral interests					5			167						42			214
Support equipment and facilities		387			12			113			73			14			599
Incomplete wells and other		747			169			118			343			41			1,418
Gross capitalized costs		6,140			3,574			3,464			3,176			701			17,055
Accumulated depreciation, depletion and amortization		(3,181	)		(1,743	)		(1,877	)		(1,219	)		(354	)		(8,374	)
Net capitalized costs		2,959			1,831			1,587			1,957			347			8,681
At December 31, 1997
Proved mineral interests		5,393			4,166			3,734			3,270			763			17,326
Unproved mineral interests					7			188						58			253
Support equipment and facilities		427			15			139			105			17			703
Incomplete wells and other		991			236			321			494			36			2,078
Gross capitalized costs		6,811			4,424			4,382			3,869			874			20,360
Accumulated depreciation, depletion and amortization		(3,584	)		(2,267	)		(2,357	)		(1,725	)		(475	)		(10,408	)
Net capitalized costs		3,227			2,157			2,025			2,144			399			9,952
At December 31, 1998
Proved mineral interests		5,794			4,258			3,963			3,446			794			18,255
Unproved mineral interests					14			177						127			318
Support equipment and facilities		451			23			142			95			14			725
Incomplete wells and other		1,172			342			234			651			194			2,593
Gross capitalized costs		7,417			4,637			4,516			4,192			1,129			21,891
Accumulated depreciation, depletion and amortization		(4,272	)		(2,395	)		(2,689	)		(2,078	)		(500	)		(11,934	)
Net capitalized costs		3,145			2,242			1,827			2,114			629			9,957
At December 31, 1999
Proved mineral interests		6,255			5,480			5,117			4,299			1,529			22,680
Unproved mineral interests		2			130			230						381			743
Support equipment and facilities		487			29			179			149			18			862
Incomplete wells and other		1,077			337			181			649			414			2,658
Gross capitalized costs		7,821			5,976			5,707			5,097			2,342			26,943
Accumulated depreciation, depletion and amortization		(4,609	)		(3,095	)		(3,393	)		(2,610	)		(663	)		(14,370	)
Net capitalized costs		3,212			2,881			2,314			2,487			1,679			12,573

 

---

Contents

continues Capitalized costs (1)

(million euro)

Italy

North Africa

West Africa

North Sea

Rest of World

Total

At December 31, 2000
Proved mineral interests		6,509			6,339			5,885			5,395			3,009			27,137
Unproved mineral interests					175			281			101			646			1,203
Support equipment and facilities		241			30			170			49			28			518
Incomplete wells and other		1,195			413			316			547			688			3,159
Gross capitalized costs		7,945			6,957			6,652			6,092			4,371			32,017
Accumulated depreciation, depletion and amortization		(4,669	)		(3,718	)		(3,935	)		(2,893	)		(1,081	)		(16,296	)
Net capitalized costs		3,276			3,239			2,717			3,199			3,290			15,721
At December 31, 2001
Proved mineral interests		7,645			7,624			6,723			7,986			5,382			35,360
Unproved mineral interests					672			238			811			1,913			3,634
Support equipment and facilities		295			56			191			52			47			641
Incomplete wells and other		845			508			501			225			1,718			3,797
Gross capitalized costs		8,785			8,860			7,653			9,074			9,060			43,432
Accumulated depreciation, depletion and amortization		(5,109	)		(4,333	)		(4,378	)		(3,612	)		(1,894	)		(19,326	)
Net capitalized costs		3,676			4,527			3,275			5,462			7,166			24,106
At December 31, 2002
Proved mineral interests		8,030			6,782			6,377			8,112			5,638			34,939
Unproved mineral interests					527			130			684			1,593			2,934
Support equipment and facilities		251			43			174			49			51			568
Incomplete wells and other		773			889			795			147			1,958			4,562
Gross capitalized costs		9,054			8,241			7,476			8,992			9,240			43,003
Accumulated depreciation, depletion and amortization		(5,427	)		(4,090	)		(4,048	)		(4,192	)		(2,262	)		(20,019	)
Net capitalized costs		3,627			4,151			3,428			4,800			6,978			22,984
At December 31, 2003
Proved mineral interests		8,766			6,103			6,141			8,291			6,389			35,690
Unproved mineral interests					329			83			696			1,272			2,380
Support equipment and facilities		262			594			208			32			51			1,147
Incomplete wells and other		826			1,254			1,098			223			1,413			4,814
Gross capitalized costs		9,854			8,280			7,530			9,242			9,125			44,031
Accumulated depreciation, depletion and amortization		(6,186	)		(3,799	)		(3,785	)		(4,252	)		(2,657	)		(20,679	)
Net capitalized costs (2)		3,668			4,481			3,745			4,990			6,468			23,352
At December 31, 2004
Proved mineral interests		9,056			7,192			6,288			7,198			7,698			37,432
Unproved mineral interests					272			70			561			1,103			2,006
Support equipment and facilities		252			1,056			209			33			75			1,625
Incomplete wells and other		662			468			1,038			397			882			3,447
Gross capitalized costs		9,970			8,988			7,605			8,189			9,758			44,510
Accumulated depreciation, depletion and amortization		(6,416	)		(3,887	)		(3,907	)		(3,733	)		(3,252	)		(21,195	)
Net capitalized costs		3,554			5,101			3,698			4,456			6,506			23,315

 

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Contents

Costs incurred (1)

(million euro)

Italy

North Africa

West Africa

North Sea

Rest of World

Total

Year ended December 31, 1995
Proved property acquisitions		0.5												0.5			1
Unproved property acquisitions								4									4
Exploration		235			136			39			53			26			489
Development		430			238			118			280			60			1,126
		666			374			161			333			86			1,620
Year ended December 31, 1996
Proved property acquisitions		55			5			22			198						280
Unproved property acquisitions					7									5			12
Exploration		289			198			53			48			60			648
Development		351			163			132			254			67			967
		695			373			207			500			132			1,907
Year ended December 31, 1997
Proved property acquisitions		48			5			4						2			59
Unproved property acquisitions					5			16						15			36
Exploration		278			236			112			51			99			776
Development		558			212			288			394			66			1,518
		884			458			420			445			182			2,389
Year ended December 31, 1998
Proved property acquisitions					27			9						67			103
Unproved property acquisitions					12									82			94
Exploration		303			171			150			51			112			786
Development		488			353			367			583			197			1,988
		791			563			526			634			458			2,971
Year ended December 31, 1999
Proved property acquisitions		54			102			9						380			545
Unproved property acquisitions		2			102			34						234			372
Exploration		194			92			87			44			121			538
Development		433			356			357			400			318			1,864
		683			652			487			444			1,053			3,319
Year ended December 31, 2000
Proved property acquisitions					8			32			443			880			1,363
Unproved property acquisitions					30			11			67			149			257
Exploration		155			151			174			86			326			892
Development		567			415			372			346			617			2,317
		722			604			589			942			1,972			4,829
Year ended December 31, 2001 (2)
Proved property acquisitions		14			503						1,411			1,254			3,182
Unproved property acquisitions					438						495			704			1,637
Exploration		89			139			97			166			598			1,089
Development		600			498			698			328			1,337			3,461
		703			1,578			795			2,400			3,893			9,369

 

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Contents

continues Costs incurred (1)

(million euro)

Italy

North Africa

West Africa

North Sea

Rest of World

Total

Year ended December 31, 2002
Proved property acquisitions											104			24			128
Unproved property acquisitions											22			167			189
Exploration		69			116			203			84			430			902
Development		440			724			986			316			1,622			4,088
		509			840			1,189			526			2,243			5,307
Year ended December 31, 2003 (3)
Proved property acquisitions											308			8			316
Unproved property acquisitions											125			6			131
Exploration		67			80			138			125			243			653
Development (4)		449			1,106			1,268			286			1,454			4,563
Total costs incurred		516			1,186			1,406			844			1,711			5,663
Year ended December 31, 2004
Proved property acquisitions
Unproved property acquisitions
Exploration		64			104			71			66			194			499
Development (4)		431			965			881			391			1,407			4,075
Total costs incurred		495			1,069			952			457			1,601			4,574

 

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Contents

Standardized measure of discounted future net cash flows

Estimated future cash inflows represent the revenues that would be received from production and are determined by applying year end prices of oil and gas to the estimated future production of proved reserves. Future price changes are considered only to extent provided by contractual arrangements. Estimated future development and production costs are determined by estimating the expenditures to be incurred in developing and producing the proved reserves at the end of the year. Neither the effects of price and cost escalations nor expected future changes in technology and operating practices have been considered.
The standardized measure is calculated as the excess of future cash inflows from proved reserves less future costs of producing and developing the reserves, future income taxes and a yearly 10% discount factor.
Future cash flows include annual revenue payments from Eni’s Gas & Power segment and other transport and distribution gas companies which represent payments for modulation services to support demand delivery capability. Such capability is provided through utilization of gas withdrawn from producing fields and injected into depleted gas fields as storage.
Future production costs include the estimated expenditures related to the production of proved reserves plus any production taxes without consideration of future inflation. Future development costs include the estimated costs of drilling development wells and installation of production facilities, plus the net costs associated with dismantlement and abandonment of wells and facilities, under the assumption that year end costs continue without considering future inflation. Future income taxes were calculated in accordance with the tax laws of the countries in which Eni operates.
The standardized measure of discounted future net cash flows, related to the preceding proved oil and gas reserves, is calculated in accordance with the requirements of Statement of Financial Accounting Standard No. 69. The standardized measure does not purport to reflect realizable values or fair market value of Eni’s proved reserves. An estimate of fair value would also take into account, among other things, the expected recovery of reserves in excess of proved reserves, anticipated changes in future prices and costs and a discount factor representative of the risks inherent in producing oil and gas.

 

 

---

Contents

(million euro)

Italy

North Africa

West Africa

North Sea

Rest of World

Total

At December 31, 1995
Future cash inflows		26,338			12,578			10,600			7,863			1,758			59,137
Future production costs		(2,516	)		(5,726	)		(3,599	)		(2,341	)		(437	)		(14,619	)
Future development and abandonment costs		(2,068	)		(1,389	)		(968	)		(1,184	)		(289	)		(5,898	)
Future net inflows before income taxes		21,754			5,463			6,033			4,338			1,032			38,620
Future income taxes		(10,925	)		(1,825	)		(3,770	)		(1,765	)		(119	)		(18,404	)
Future net cash flows		10,829			3,638			2,263			2,573			913			20,216
10% discount		(4,144	)		(1,280	)		(881	)		(914	)		(325	)		(7,544	)
Standardized measure of discounted future net cash flows		6,685			2,358			1,382			1,659			588			12,672
At December 31, 1996
Future cash inflows		29,780			20,463			12,222			10,094			1,846			74,405
Future production costs		(3,062	)		(6,650	)		(3,537	)		(2,737	)		(347	)		(16,333	)
Future development and abandonment costs		(2,205	)		(3,260	)		(1,095	)		(1,037	)		(237	)		(7,834	)
Future net inflows before income taxes		24,513			10,553			7,590			6,320			1,262			50,238
Future income taxes		(12,451	)		(3,411	)		(4,827	)		(2,811	)		(182	)		(23,682	)
Future net cash flows		12,062			7,142			2,763			3,509			1,080			26,556
10% discount		(4,649	)		(3,830	)		(1,058	)		(1,225	)		(359	)		(11,121	)
Standardized measure of discounted future net cash flows		7,413			3,312			1,705			2,284			721			15,435
At December 31, 1997
Future cash inflows		27,586			20,370			10,989			9,407			4,895			73,247
Future production costs		(3,585	)		(6,994	)		(3,440	)		(2,674	)		(1,257	)		(17,950	)
Future development and abandonment costs		(2,489	)		(3,742	)		(1,318	)		(1,237	)		(1,183	)		(9,969	)
Future net inflows before income taxes		21,512			9,634			6,231			5,496			2,455			45,328
Future income taxes		(7,998	)		(2,615	)		(3,526	)		(2,290	)		(625	)		(17,054	)
Future net cash flows		13,514			7,019			2,705			3,206			1,830			28,274
10% discount		(5,024	)		(3,979	)		(1,009	)		(1,028	)		(1,116	)		(12,156	)
Standardized measure of discounted future net cash flows		8,490			3,040			1,696			2,178			714			16,118
At December 31, 1998
Future cash inflows		18,312			13,676			7,111			6,792			2,600			48,491
Future production costs		(3,134	)		(6,196	)		(2,978	)		(2,700	)		(836	)		(15,844	)
Future development and abandonment costs		(2,544	)		(3,704	)		(1,207	)		(895	)		(972	)		(9,322	)
Future net inflows before income taxes		12,634			3,776			2,926			3,197			792			23,325
Future income taxes		(4,489	)		(749	)		(1,198	)		(1,062	)		(192	)		(7,690	)
Future net cash flows		8,145			3,027			1,728			2,135			600			15,635
10% discount		(2,858	)		(2,027	)		(650	)		(608	)		(433	)		(6,576	)
Standardized measure of discounted future net cash flows		5,287			1,000			1,078			1,527			167			9,059
At December 31, 1999
Future cash inflows		29,900			34,457			21,177			12,831			9,181			107,546
Future production costs		(3,972	)		(7,782	)		(5,212	)		(3,528	)		(1,375	)		(21,869	)
Future development and abandonment costs		(2,264	)		(4,584	)		(2,711	)		(893	)		(1,731	)		(12,183	)
Future net inflows before income taxes		23,664			22,091			13,254			8,410			6,075			73,494
Future income taxes		(9,168	)		(10,662	)		(8,012	)		(4,006	)		(1,594	)		(33,442	)
Future net cash flows		14,496			11,429			5,242			4,404			4,481			40,052
10% discount		(5,618	)		(5,886	)		(2,238	)		(1,269	)		(2,288	)		(17,299	)
Standardized measure of discounted future net cash flows		8,878			5,543			3,004			3,135			2,193			22,753

 

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Contents

(million euro)

Italy

North Africa

West Africa

North Sea

Rest of World

Total

At December 31, 2000
Future cash inflows		50,505			39,551			22,057			16,761			17,778			146,652
Future production costs		(6,310	)		(9,770	)		(5,875	)		(3,349	)		(2,999	)		(28,303	)
Future development and abandonment costs		(2,310	)		(4,981	)		(2,708	)		(860	)		(2,504	)		(13,363	)
Future net inflows before income taxes		41,885			24,800			13,474			12,552			12,275			104,986
Future income taxes		(15,627	)		(11,524	)		(7,938	)		(6,365	)		(2,835	)		(44,289	)
Future net cash flows		26,258			13,276			5,536			6,187			9,440			60,697
10% discount		(12,203	)		(7,146	)		(2,370	)		(1,867	)		(4,410	)		(27,996	)
Standardized measure of discounted future net cash flows		14,055			6,130			3,166			4,320			5,030			32,701
At December 31, 2001
Future cash inflows		32,310			37,780			20,154			17,444			20,715			128,403
Future production costs		(5,344	)		(10,941	)		(5,779	)		(4,466	)		(5,073	)		(31,603	)
Future development and abandonment costs		(2,577	)		(5,284	)		(3,194	)		(1,593	)		(2,607	)		(15,255	)
Future net inflows before income taxes		24,389			21,555			11,181			11,385			13,035			81,545
Future income taxes		(8,918	)		(9,258	)		(6,374	)		(5,584	)		(3,119	)		(33,253	)
Future net cash flows		15,471			12,297			4,807			5,801			9,916			48,292
10% discount		(6,925	)		(6,612	)		(1,992	)		(1,611	)		(4,381	)		(21,521	)
Standardized measure of discounted future net cash flows		8,546			5,685			2,815			4,190			5,535			26,771
At December 31, 2002
Future cash inflows		32,809			41,797			29,242			19,645			26,500			149,993
Future production costs		(4,367	)		(10,354	)		(6,795	)		(4,748	)		(4,310	)		(30,574	)
Future development and abandonment costs		(2,755	)		(3,880	)		(2,706	)		(1,523	)		(2,459	)		(13,323	)
Future net inflows before income taxes		25,687			27,563			19,741			13,374			19,731			106,096
Future income taxes		(8,885	)		(12,164	)		(11,320	)		(7,598	)		(5,593	)		(45,560	)
Future net cash flows		16,802			15,399			8,421			5,776			14,138			60,536
10% discount		(7,471	)		(7,411	)		(3,534	)		(1,577	)		(6,063	)		(26,056	)
Standardized measure of discounted future net cash flows		9,331			7,988			4,887			4,199			8,075			34,480
At December 31, 2003
Future cash inflows		24,641			36,484			25,074			19,590			28,505			134,294
Future production costs		(3,879	)		(7,868	)		(5,847	)		(5,458	)		(4,763	)		(27,815	)
Future development and abandonment costs		(2,080	)		(3,762	)		(2,005	)		(1,084	)		(2,575	)		(11,506	)
Future net inflows before income taxes		18,682			24,854			17,222			13,048			21,167			94,973
Future income taxes		(6,113	)		(10,296	)		(8,979	)		(7,614	)		(6,073	)		(39,075	)
Future net cash flows		12,569			14,558			8,243			5,434			15,094			55,898
10% discount		(5,056	)		(6,646	)		(3,130	)		(1,872	)		(7,930	)		(24,634	)
Standardized measure of discounted future net cash flows		7,513			7,912			5,113			3,562			7,164			31,264
At December 31, 2004
Future cash inflows		28,582			40,373			28,395			20,435			32,619			150,404
Future production costs		(3,635	)		(7,237	)		(6,664	)		(5,082	)		(4,858	)		(27,476	)
Future development and abandonment costs		(2,210	)		(4,073	)		(1,873	)		(1,419	)		(2,873	)		(12,448	)
Future net inflows before income taxes		22,737			29,063			19,858			13,934			24,888			110,480
Future income taxes		(7,599	)		(11,487	)		(10,949	)		(8,824	)		(6,736	)		(45,595	)
Future net cash flows		15,138			17,576			8,909			5,110			18,152			64,885
10% discount		(6,006	)		(7,592	)		(3,267	)		(1,350	)		(9,412	)		(27,627	)
Standardized measure of discounted future net cash flows		9,132			9,984			5,642			3,760			8,740			37,258

 

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Contents

Changes in standardized measure of discounted future net cash flows

(million euro)

			1995		1996		1997		1998		1999		2000		2001		2002		2003		2004

Beginning of year		11,491			12,673			15,438			16,118			9,059			22,753			32,701			26,771			34,480			31,264
Increase (Decrease):
sales, net of production costs		(4,015	)		(4,740	)		(4,888	)		(3,486	)		(4,927	)		(9,689	)		(9,760	)		(10,064	)		(10,144	)		(12,172	)
net changes in sales      and transfer prices,      net of production costs		1,933			6,507			(5,034	)		(10,384	)		23,334			11,889			(16,754	)		18,936			(1,050	)		13,031
extensions, discoveries      and improved recovery,      net of future production      and development costs		831			1,077			1,112			666			1,144			1,623			1,027			1,810			1,855			2,806
changes in estimated      future development      and abandonment costs		(180	)		(588	)		(1,005	)		(642	)		(1,570	)		(1,061	)		(2,527	)		(2,697	)		(3,576	)		(3,437	)
development costs      incurred during the period      that reduced future      development costs		1,033			854			1,375			1,803			1,746			2,125			3,342			4,287			4,864			4,229
revisions of      quantity estimates		1,264			324			1,229			688			2,054			2,736			3,397			1,715			2,348			1,658
accretion      of discount		2,096			2,256			2,997			2,494			1,362			4,226			5,628			4,279			5,585			5,328
net change in      income taxes		(831	)		(3,145	)		4,773			4,819			(12,702	)		(4,102	)		5,618			(9,318	)		105			(4,805	)
purchase of      reserves in place		69			535			520						1,032			3,052			4,443			387			1,488
sale of reserves      in place		(12	)		(18	)		(80	)					(1	)		(7	)		(34	)		(646	)		(222	)		(727	)
changes in      production rates      (timing) and other		(1,006	)		(297	)		(319	)		(3,017	)		2,222			(844	)		(310	)		(980	)		(4,469	)		83
End of year		12,673			15,438			16,118			9,059			22,753			32,701			26,771			34,480			31,264			37,258

 

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Contents

energy conversion table

Oil	(average reference density 32.35 °API, relative density 0.8636)

1 barrel

(bbl)

158.987

l oil (1)

0.159

m3 oil

162.602

m3 gas

5,742

ft3 gas

5,800,000

btu

1 barrel/d

(bbl/d)

~50

t/year

1 cubic meter

(m3)

1,000

l oil

6.29

bbl

1,033

m3 gas

36,481

ft3 gas

1 tonne oil equivalent

(toe)

1,160.49

l oil

7.299

bbl

1.161

m3 oil

1,187

m3 gas

41,911

ft3 gas

 

Gas

1 cubic meter	(m3)	0.976		l oil	0.00615		bbl	35,314.67		btu				35.315		ft3 gas
1,000 cubic feet	(ft3)	27.637		l oil	0.1742		bbl	1,000,000		btu	27.317		m3 gas	0.02386		toe
1,000,000 british thermal unit	(btu)	27.4		l oil	0.17		bbl	0.027		m3 oil	28.3		m3 gas	1,000		ft3 gas
1 tonne LNG	(tLNG)	1.2		toe	8.9		bbl	52,000,000		btu				52,000		ft3 gas
														1,400		m3 gas

 

Electricity

1 megawatthour=1,000 kWh	(MWh)	93.532		l oil	0.5883		bbl	0.0955		m3 oil	96.621		m3 gas	3,412.14		ft3 gas
1 teraJoule	(TJ)	25,981.45		l oil	163.42		bbl	25.9814		m3 oil	26,839.46		m3 gas	947,826.7		ft3 gas
1,000,000 kilocalories	(kcal)	108.8		l oil	0.68		bbl	0.109		m3 oil	112.4		m3 gas	3,968.3		ft3 gas

 

Conversion of mass
			kilogram (kg)	pound (lb)	metric ton (t)
kg			1	2.2046	0.001
lb			0.4536	1	0.0004536
t			1,000	22,046	1
Conversion of length
		meter (m)	inch (in)	foot (ft)	yard (yd)
m		1	39.37	3.281	1.093
in		0.0254	1	0.0833	0.0278
ft		0.3048	12	1	0.3333
yd		0.9144	36	3	1
Conversion of volumes
		cubic foot (ft3)	barrel (bbl)	liter (l)	cubic meter (m3)
ft3		1	0.1781	28.32	0.02832
bbl		5.615	1	159	0.158984
l		0.035311	0.0063	1	0.001
m3		35.3107	6.2898	103	1

 

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Contents

quarterly information

Main financial data ⁽¹⁾

		2000		2001

I quarter

II quarter

III quarter

IV quarter

I quarter

II quarter

III quarter

IV quarter

Net sales from operations		11,814			10,759			10,730			14,635			47,938			13,882			12,136			10,682			12,572			49,272
Operating income:		3,514			1,818			2,017			3,423			10,772			3,706			2,413			1,644			2,550			10,313
Exploration & Production		2,047			1,081			1,283			2,192			6,603			1,975			1,510			1,144			1,355			5,984
Gas & Power		1,434			504			357			883			3,178			1,466			596			339			1,271			3,672
Refining & Marketing		99			188			381			318			986			294			372			266			53			985
Petrochemicals		(39	)		71			8			(36	)		4			(25	)		(71	)		(124	)		(195	)		(415	)
Oilfield Services Construction      and Engineering		15			19			37			73			144			42			48			52			113			255
Other activities
Corporate and financial companies		(42	)		(45	)		(49	)		(7	)		(143	)		(46	)		(42	)		(33	)		(47	)		(168	)
Net income
Capital expenditure		1,189			1,232			1,047			1,963			5,431			1,182			1,795			1,616			2,013			6,606
Investments (2)					683						3,701			4,384			4,160			233			142			129			4,664
Net borrowings at period end		4,703			5,820			7,060			7,742			7,742			9,188			9,105			10,809			10,104			10,104

 

		2002		2003

I quarter

II quarter

III quarter

IV quarter

I quarter

II quarter

III quarter

IV quarter

Net sales from operations		12,705			11,199			10,795			13,223			47,922			14,359			11,578			11,916			13,634			51,487
Operating income:		2,700			1,875			1,854			2,073			8,502			3,333			1,779			1,897			2,508			9,517
Exploration & Production		1,287			1,228			1,327			1,333			5,175			1,735			1,175			1,457			1,379			5,746
Gas & Power		1,426			577			375			866			3,244			1,529			539			390			1,169			3,627
Refining & Marketing		62			60			122			77			321			117			208			151			107			583
Petrochemicals		(68	)		31			50			(139	)		(126	)		(17	)		(34	)		(63	)		(62	)		(176	)
Oilfield Services Construction      and Engineering		86			73			73			66			298			60			79			81			91			311
Other activities		(45	)		(57	)		(72	)		(40	)		(214	)		(33	)		(130	)		(58	)		(72	)		(293	)
Corporate and financial companies		(48	)		(37	)		(21	)		(90	)		(196	)		(58	)		(58	)		(61	)		(104	)		(281	)
Net income		1,382			879			921			1,411			4,593			2,006			1,084			955			1,540			5,585
Capital expenditure		1,541			1,919			2,824			1,764			8,048			1,735			2,235			2,145			2,687			8,802
Investments (2)		196			22			952			196			1,366			3,512			54			537			152			4,255
Net borrowings at period end		6,713			8,486			9,272			11,141			11,141			11,708			12,795			13,044			13,543			13,543

 

		2004

		I quarter		II quarter		III quarter		IV quarter

Net sales from operations		14,710			13,520			13,695			16,457			58,382
Operating income:		3,173			2,609			2,987			3,694			12,463
Exploration & Production		1,569			1,790			2,360			2,298			8,017
Gas & Power		1,572			595			415			881			3,463
Refining & Marketing		103			205			247			410			965
Petrochemicals		2			50			68			151			271
Oilfield Services Construction      and Engineering		62			67			48			83			260
Other activities		(84	)		(33	)		(69	)		(58	)		(244	)
Corporate and financial companies		(51	)		(65	)		(82	)		(71	)		(269	)
Net income		2,145			1,279			1,670			2,180			7,274
Capital expenditure		1,741			2,022			1,699			2,041			7,503
Investments (2)		25			45			81			165			316
Net borrowings at period end		11,280			12,791			11,187			10,228			10,228

(1)		Quarterly data are unaudited.
(2)		Data for year 2000 refer to investments made in the first and second half respectively.

 

Key market indicators

		2000		2001

I quarter

II quarter

III quarter

IV quarter

I quarter

II quarter

III quarter

IV quarter

Average price of Brent dated crude oil (1)		26.90			26.69			30.44			29.54			28.39			25.84			27.33			25.30			19.38			24.46
Average EUR/USD exchange rate		0.987			0.934			0.904			0.870			0.924			0.923			0.873			0.891			0.896			0.896
Average price in euro of Brent dated crude oil (2)		27.25			28.58			33.67			33.95			30.73			28.00			31.31			28.40			21.63			27.30
Average European refining margins (3)		2.11			4.78			4.33			4.72			3.99			2.16			2.31			1.52			1.87			1.97
Euribor %		3.6			4.3			4.8			5.0			4.4			4.7			4.6			4.3			3.4			4.3

 

		2002		2003

I quarter

II quarter

III quarter

IV quarter

I quarter

II quarter

III quarter

IV quarter

Average price of Brent dated crude oil (1)		21.14			25.04			26.95			26.78			24.98			31.51			26.03			28.41			29.42			28.84
Average EUR/USD exchange rate		0.876			0.919			0.984			1.000			0.946			1.073			1.136			1.124			1.189			1.131
Average price in euro of Brent dated crude oil (2)		24.13			27.25			27.39			26.78			26.41			29.36			22.90			25.26			24.74			25.50
Average European refining margins (3)		0.21			0.73			0.75			1.49			0.80			3.81			2.17			2.28			2.34			2.65
Euribor %		3.4			3.4			3.4			3.1			3.3			2.7			2.4			2.1			2.2			2.3

 

		2004

		I quarter		II quarter		III quarter		IV quarter

Average price of Brent dated crude oil (1)		31.95			36.36			41.54			44.01			38.22
Average EUR/USD exchange rate		1.250			1.204			1.222			1.296			1.244
Average price in euro of Brent dated crude oil (2)		25.56			29.37			33.99			33.96			30.72
Average European refining margins (3)		2.21			5.26			4.28			4.32			4.02
Euribor %		2.1			2.1			2.1			2.2			2.1

 

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Contents

Main operating data

		2000		2001

I quarter

II quarter

III quarter

IV quarter

I quarter

II quarter

III quarter

IV quarter

Daily production of oil (th bbls/d)		741			761			745			748			748			861			847			838			883			857
Daily production of natural gas (th boe/d)		441			427			427			459			439			526			499			499			525			512
Daily production of hydrocarbons (th boe/d)		1,182			1,188			1,172			1,207			1,187			1,387			1,346			1,337			1,408			1,369
Italy		357			337			324			315			333			311			297			306			319			308
North Africa		289			307			304			324			306			315			312			320			322			317
West Africa		217			217			234			230			224			235			231			230			238			233
North Sea		179			165			155			173			168			278			280			284			308			288
Rest of World		140			162			155			165			156			248			226			197			221			223
Production sold (mn boe)		132.8			89.8			85.4			120.0			428.0			134.4			112.9			103.9			148.5			499.7
Sales of natural gas to third parties (bn cm)		23.11			12.01			10.36			17.15			62.63			21.65			11.82			10.10			20.15			63.72
Own consumption of natural gas (bn cm)		0.50			0.50			0.50			0.50			2.00			0.50			0.50			0.50			0.50			2.00
Sales to third parties and own consumption (bn cm)		23.61			12.51			10.86			17.65			64.63			22.15			12.32			10.60			20.65			65.72
Sales of natural gas of Eni’s affiliates (net to Eni) (bn cm)														0.87															1.38
Total sales and own consumption of natural gas (bn cm)		23.61			12.51			10.86			17.65			65.50			22.15			12.32			10.60			20.65			67.10
Volumes transported on behalf of third parties in Italy (bn cm)		2.36			2.44			2.28			2.37			9.45			2.43			2.44			2.61			3.93			11.41
Electricity sales (TWh)		1.05			1.29			1.13			1.30			4.77			1.32			1.34			1.02			1.31			4.99
Sales of refined products (mn ton):		12.60			13.27			12.84			14.75			53.46			12.61			13.24			13.55			13.84			53.24
Retail sales in Italy		2.72			2.92			3.04			2.89			11.57			2.78			2.98			2.98			2.90			11.64
Wholesale sales in Italy		2.86			1.33			2.73			3.05			11.10			2.69			2.62			2.82			3.11			11.24
Retail sales outside Italy		0.93			5.58			1.01			0.86			3.78			0.93			1.08			1.10			1.07			4.18
- Rest of Europe
- Africa and Brazil
Wholesale sales outside Italy		1.35			1.33			1.49			1.29			5.46			1.29			1.39			1.47			1.40			5.55
Other sales		4.74			5.58			4.57			6.66			21.55			4.92			5.17			5.18			5.36			20.63

 

		2002		2003

I quarter

II quarter

III quarter

IV quarter

I quarter

II quarter

III quarter

IV quarter

Daily production of oil (th bbls/d)		910			927			908			939			921			925			978			985			1,035			981
Daily production of natural gas (th boe/d)		531			541			543			588			551			573			578			571			602			581
Daily production of hydrocarbons (th boe/d)		1,441			1,468			1,451			1,527			1,472			1,498			1,556			1,556			1,637			1,562
Italy		311			315			320			316			316			310			302			295			293			300
North Africa		330			349			360			376			354			333			343			357			369			351
West Africa		237			238			240			235			237			235			262			265			278			260
North Sea		313			313			271			337			308			367			349			317			348			345
Rest of World		250			253			260			263			257			253			300			322			349			306
Production sold (mn boe)		132.8			123.3			124.7			142.5			523.3			128.6			138.7			141.2			147.7			556.2
Sales of natural gas to third parties (bn cm)		21.88			12.75			11.28			18.21			64.12			23.54			13.79			11.84			20.32			69.49
Own consumption of natural gas (bn cm)		0.51			0.50			0.50			0.51			2.02			0.51			0.39			0.40			0.60			1.90
Sales to third parties and own consumption (bn cm)		22.39			13.25			11.78			18.72			66.14			24.05			14.18			12.24			20.92			71.39
Sales of natural gas of Eni’s affiliates (net to Eni) (bn cm)														2.40			1.16			2.18			1.42			2.18			6.94
Total sales and own consumption of natural gas (bn cm)		22.39			13.25			11.78			18.72			68.54			25.21			16.36			13.66			23.10			78.33
Volumes transported on behalf of third parties in Italy (bn cm)		4.55			4.79			4.94			5.56			19.84			5.90			6.28			5.87			6.58			24.63
Electricity sales (TWh)		1.37			1.24			1.06			1.34			5.01			1.26			1.25			1.16			1.88			5.55
Sales of refined products (mn ton):		12.22			13.42			13.20			13.18			52.24			11.82			12.50			12.32			13.27			50.43
Retail sales in Italy		2.67			2.81			2.87			2.79			11.14			2.57			2.81			2.84			2.77			10.99
Wholesale sales in Italy		2.66			2.54			2.55			2.89			10.64			2.50			2.48			2.45			2.92			10.35
Retail sales outside Italy		0.96			1.05			1.00			1.00			4.01			0.88			1.02			1.18			1.12			4.20
- Rest of Europe		0.58			0.64			0.69			0.66			2.57			0.61			0.72			0.88			0.81			3.02
- Africa and Brazil		0.38			0.41			0.31			0.34			1.44			0.27			0.30			0.30			0.31			1.18
Wholesale sales outside Italy		1.29			1.32			1.59			1.45			5.65			1.44			1.57			1.55			1.45			6.01
Other sales		4.70			5.75			5.25			5.10			20.80			4.56			4.75			4.43			5.14			18.88

 

continues Main operating data

		2004

		I quarter		II quarter		III quarter		IV quarter

Daily production of oil (th bbls/d)		1,016			1,026			1,003			1,090			1,034
Daily production of natural gas (th boe/d)		612			595			542			614			590
Daily production of hydrocarbons (th boe/d)		1,628			1,621			1,545			1,704			1,624
Italy		278			263			271			272			271
North Africa		367			374			367			411			380
West Africa		301			302			320			339			316
North Sea		334			335			258			306			308
Rest of World		348			347			329			376			349
Production sold (mn boe)		143.3			140.5			139.8			152.9			576.5
Sales of natural gas to third parties (bn cm)		24.99			15.33			12.76			20.35			73.43
Own consumption of natural gas (bn cm)		0.79			0.87			0.99			1.05			3.70
Sales to third parties and own consumption (bn cm)		25.78			16.20			13.75			21.40			77.13
Sales of natural gas of Eni’s affiliates (net to Eni) (bn cm)		2.06			1.64			1.47			2.15			7.32
Total sales and own consumption of natural gas (bn cm)		27.84			17.84			15.22			23.55			84.45
Volumes transported on behalf of third parties in Italy (bn cm)		6.89			7.20			6.70			7.47			28.26
Electricity sales (TWh)		2.51			3.57			3.56			4.21			13.85
Sales of refined products (mn ton):		12.98			14.60			13.32			12.64			53.54
Retail sales in Italy		2.55			2.78			2.83			2.77			10.93
Wholesale sales in Italy		2.56			2.58			2.65			2.91			10.70
Retail sales outside Italy		1.08			1.15			0.93			0.88			4.04
- Rest of Europe		0.80			0.86			0.93			0.88			3.47
- Africa and Brazil		0.28			0.29									0.57
Wholesale sales outside Italy		1.39			1.65			1.10			1.16			5.30
Other sales		5.40			6.44			5.81			4.92			22.57

 

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Contents