Oil and Natural Gas Reserves

Eni's estimated proved reserves were determined taking into account Eni's share of proved reserves of equity accounted entities.

Movements in Eni's 2010 estimated proved reserves were as follows:

Additions to proved reserves booked in 2010 were 946 mmboe (including the impact of gas conversion factor update equal to 106 mmboe) and derived from:

• revisions of previous estimates were 680 mmboe mainly reported in Libya, Nigeria, Egypt, Iraq and Italy;
• extensions, discoveries and other factors were 252 mmboe, with major increases booked in Venezuela, the United Kingdom and Algeria;
• improved recovery were 14 mmboe mainly reported in Venezuela.

The unfavourable effect of higher oil prices on reserve entitlements in certain PSAs and service contracts (down 80 mmboe) resulted from higher oil prices from one year ago (the Brent prices used in the reserve estimation process was $79 per barrel in 2010 compared to $59.9 per barrel in 2009). Higher oil prices also resulted in upward revisions associated with improved economics of marginal productions. 
Sales of mineral-in-place resulted mainly from the divestment of wholly-owned subsidiary Società Padana Energia to Gas Plus, which holds exploration, development and production properties in Northern Italy.
In 2010, Eni achieved an all-sources reserve replacement ratio net of gas conversion factor update of 125%. Excluding price effects, the replacement ratio would be 135%. The reserve life index is 10.3 years (10.2 years in 2009).

Proved undeveloped reserves as of December 31, 2010 totalled 2,821 mmboe. At year-end, liquids proved undeveloped reserves amounted to 1,620 mmbbl, mainly concentrated in Africa and Kazakhstan. Natural gas proved undeveloped reserves accounted for 6,671 bcf, mainly located in Africa and Russia.
In 2010, total proved undeveloped reserves increased by 354 mmboe. The main reasons for the variation are revisions and new projects sanction, mainly in Libya, Venezuela and Iraq.
During 2010, Eni converted 295 mmboe of proved undeveloped reserves to proved developed reserves. The main reclassification to proved developed were related to development activities, revisions and production start-up of the following fields/projects: Cerro Falcone (Italy), M'Boundi (Congo), Wafa (Libya), Bhit and Sawan (Pakistan), Morvin (Norway), Tuna and Hapy (Egypt) and Karachaganak (Kazakhstan).
In 2010, capital expenditures amounted to approximately €1.7 billion and were made to progress the development of proved undeveloped reserves.