Eni
Fact Book
2020
ENI AT A GLANCE | 2 |
Main data | 4 |
Eni share performance | 7 |
EXPLORATION & PRODUCTION | 9 |
GLOBAL GAS & LNG PORTFOLIO | 47 |
REFINING & MARKETING AND CHEMICALS | 54 |
Refining & Marketing | 55 |
Chemicals | 65 |
ENI GAS E LUCE, POWER & RENEWABLES | 69 |
Eni gas e luce | 69 |
Power | 71 |
Renewables | 72 |
TABLES | 75 |
Financial data | 75 |
Employees | 87 |
Quarterly information | 88 |
Disclaimer
Eni's Fact Book is a supplement to Eni's Annual Report and is designed to provide supplemental financial and operating information. It contains certain forward-looking statements regarding capital expenditures, dividends, buy-back programs, allocation of future cash flow from operations, financial structure evolution, future operating performance, targets of production and sale growth and the progress and timing of projects. By their nature, forward-looking statements involve risks and uncertainties because they relate to events and depend on circumstances that will or may occur in the future. Actual results may differ from those expressed in such statements, depending on a variety of factors, including the impact of the pandemic disease; the timing of bringing new oil and gas fields on stream; management's ability in carrying out industrial plans and in succeeding in commercial transactions; future levels of industry product supply; demand and oil and natural gas pricing; operational problems; general macroeconomic conditions; political stability and economic growth in relevant areas of the world; changes in laws and governmental regulations; development and use of new technology; changes in public expectations and other changes in business conditions; the actions of competitors.
Eni at a glance
2
Eni at a glance
Average Brent dated price | PSV | ||||||||||
($/BBL) | (€/kcm) | ||||||||||
I quarter 2020 | 50.26 | I quarter 2020 | 121 | ||||||||
II quarter 2020 | 29.20 | II quarter 2020 | 75 | ||||||||
III quarter 2020 | 43.00 | III quarter 2020 | 95 | ||||||||
IV quarter 2020 | 44.23 | IV quarter 2020 | 156 | ||||||||
SERM | Average exchange rate EUR/USD | |||||||||
($/BBL) | ||||||||||
I quarter 2020 | 3.6 | I quarter 2020 | 1.103 | |||||||
II quarter 2020 | 2.3 | II quarter 2020 | 1.101 | |||||||
III quarter 2020 | 0.7 | III quarter 2020 | 1.169 | |||||||
IV quarter 2020 | 0.2 | IV quarter 2020 | 1.193 | |||||||
The average price of the Brent benchmark crude oil decreased by 35% compared to the previous year, with an annual average of approximately 42 $/barrel; the price of natural gas at the Italian spot market "PSV" declined on average by 35% and the Standard Eni Refining Margin SERM recorded the worst performance (down by 60%).
The trading environment in 2020 saw the largest drop in oil demand in history (down by 9% y-o-y) driven by the lockdown measures implemented globally to contain the spread of the COVID-19 pandemic, Eni has promptly defined actions, leveraging on the energy, resources and flexibility of the operations.
Management took decisive actions according to three priorities: health and safety of our people and asset integrity, robustness of balance sheet, organizational structure. In particular, were implemented initiatives to safeguard each of the 60 thousand people that work in Eni and with Eni, in all the workplaces and operational sites, and to ensure continuity, without operational interruptions and asset integrity. During the peak of the downturn, clear priorities in the cash allocation were defined in order to strengthen financial resilience and capital resilience of the company.
The Company's strategy and plans for the short-to-medium term were revised, leveraging on a reduction of €8 billion in the outlays for expenses and capital expenditures in the two- year period 2020-2021, more exposed to the downturn, with the subsequent reshaping of the growth profile of production. In addition, established a new dividend policy based on a fixed component and a variable component linked to the scenario.
Thanks to these actions, the adjusted cash flow of €6.7 billion was able to finance 100% of net organic capex lowered to €5 billion (down by 35% vs. the original budget at constant exchange rates) due to the implemented optimizations, with a surplus of €1.7 billion. Opex were reduced by €1.9 billion compared to the pre-COVID-19 level, of which about 30% is structural.
As of December 31, 2020, leverage was confirmed at 0.3 and net borrowings were in line with the comparative period, also due to the issuance of two hybrid bonds for €3 billion.
2020: FAST REACTION TO COVID-19 CRISIS
PEOPLE HEALTH AND BUSINESS CONTINUITY
COSTS | PORTFOLIO | FINANCIALS | |||||||||||||||||||||||||||||
>35% capex reduction | FID rescheduling on | Leverage* in the comfort zone at about 0.3 | |||||||||||||||||||||||||||||
vs. original 2020 guidance | large upstream projects | ||||||||||||||||||||||||||||||
-€1,9 bln cost savings | Increased capex on | First issuance of hybrid | |||||||||||||||||||||||||||||
vs. pre‐COVID-19 level | green project | bonds of €3 bln | |||||||||||||||||||||||||||||
NEW COMPANY ORGANIZATION | |||||||||||||||||||||||||||||||
LONG-TERM DECARBONIZATION PLAN | |||||||||||||||||||||||||||||||
(*) Before IFRS 16. | |||||||||||||||||||||||||||||||
Capital expenditure | Cashflow | ||||||||||||||||||||||||||||||
(€ million) | E&P | GGP | R&MandC | EGL, P&R | (€ billion) | ||||||||||||||||||||||||||
2018 | |||||||||||||||||||||||||||||||
9,119 | 7,901 | 26 | 877 | 238 | |||||||||||||||||||||||||||
2019 | 8,376 | 6,996 | 15 | 933 | 357 | ||||||||||||||||||||||||||
2020 | 4,644 | 3,472 | 11 | 771 | 293 | CFFO | CAPEX | FCF | |||||||||||||||||||||||
6.7 | 5.0 | 1.7 | |||||||||||||||||||||||||||||
Eni Fact Book 2020 | |
3 | |
In June 2020, the Board redefined the organizational | efficiency activities, projects for CO2 capture and forestry |
structure of the Company with the establishment of | conservation (REDD+), and the Energy Evolution, which |
two Business Groups: Natural Resources, which will | will focus on growing the businesses of power generation, |
maximize the value of Eni's Oil & Gas upstream portfolio | transformation and marketing of products from fossil to |
from a sustainable perspective and develop energy | bio, blue and green. |
2020 RESULTS BY BUSINESS GROUPS
NATURAL RESOURCES
Production: 1,733 kboe/d
Discovered resources: 400 mmboe
Gas & LNG: EBIT €330 mln (+70%)
Forestry REDD+: offset 1.5 mmton CO2eq.; CCUS UK license awarded
ENERGY EVOLUTION
Renewables: 1 GW capacity installed and sanctioned
Entered world's largest offshore wind project in UK
Retail G&P: EBIT €330 mln (+17%)
Biorefining & Marketing: EBIT €550 mln (+27%)
The upstream business is strengthening its recovery, despite the capex reduction of approximately 50% from 2019. Added 400 mmboe of new resources at a competitive cost of 1.6 $/barrel, while E&P development helped to ensure a solid production level of 1.73 mmboe/day. The Global Gas & LNG Portfolio business reported an adjusted operating profit of €0.33 billion, higher than expected, notwithstanding the significant decline in European gas demand and the collapse in Asian LNG consumption during the peak of the crisis.
Within the REDD+ and CCS projects, in October, Eni was awarded by the UK Oil and Gas Authority a license for building a carbon storage project in the United Kingdom, while in November 2020, was achieved the first allowance of carbon credits by the REDD+ Luangwa Community Forest Project (LCFP) in Zambia to offset GHG emissions equivalent to 1.5 million tonnes of CO2.
The businesses in the production and sale of decarbonized products achieved excellent results, driven by a 17% increase in the adjusted operating profit from Eni gas e luce, and thanks to biorefining + marketing adjusted operating profit of €550
million. The solar and wind capacity already installed or under construction amounted to 1 GW. Eni has laid foundations for strong growth in renewables by entering two strategic markets such as the U.S. and the Dogger Bank project in the UK's North Sea offshore wind market, which will be the largest in the world in the sector.
Decarbonization path towards carbon neutrality
Eni started a new phase in the evolution of its business model, strongly oriented towards the creation of long-term value, combining economic/financial and environmental sustainability. To this purpose, Eni will pursue a strategy that aims to achieve by 2050 the net zero target on GHG Lifecycle Scope 1, 2 and 3 emissions and the associated emission intensity (Net Carbon Intensity), referred to the entire life cycle of the energy products sold, strengthening the intermediate decarbonization targets.
This path, achieved through existing technologies, will allow Eni to totally reduce its carbon footprint, both in terms of net emissions and in terms of net carbon intensity.
ENI NET ZERO EMISSIONS BY 2050
ABSOLUTE NET SCOPE 1+2+3 GHG EMISSIONS
-25%
-65%
NET
ZERO
LEVERS
Carbon free products and services Increased share of gas on total production Biomethane for domestic use and mobility Biorefineries and circular economy Blue and green hydrogen
CCS and REDD+ projects
2018 2030 2040 2050
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Eni S.p.A. published this content on 12 May 2021 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 12 May 2021 08:37:06 UTC.