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Growth Strategy

2014 2Q results and strategy updateEni will continue pursuing growth and creating sustainable long-term shareholders' value through the following pillars:

  • to select and implement the best capital and investment opportunities;
  • to preserve a solid capital structure;
  • to pursue capital and operating efficiency;
  • to manage risks;
  • to leverage research and innovation;
  • to apply the highest ethical principles of business conduct;
  • to promote the sustainability of the business model.


BUSINESS STRATEGIES AND TARGETS

  • TargetsTargets
  • E&PE&P
  • G&PG&P
  • R&MR&M
  • Financial Strategy Financial Strategy

 

 

Leveraging its significant exploration success, Eni confirms a 3% increase in average annual hydrocarbon production between 2014 and 2017.

Eni will maximize the value of its portfolio through the:

  • timely development of new fields; in the 2014-2015 period, Eni will complete 15 projects that will contribute more than 70% of the new production targeted by 2017;
  • accelerated development of recent oil discoveries in Congo, Egypt and Nigeria, which will partially offset the impact of Kashagan and Angola LNG delays;
  • value creation from exploration, where Eni has a strategy of high initial exposure and subsequent dilution upon exploration success and appreciation of the asset.

 

Thanks to the renegotiation of long-term gas contracts and the strong performance of its business segments, Eni has brought forward operating profit and cash flow breakeven for the gas & power sector to 2014, despite deteriorating market conditions. The company continues to pursue the realignment of its gas supply to market prices. This is currently 60% complete and, as expected, will be fully achieved by 2016. Recent negotiations will also enable the full recovery by 2017 of gas pre-paid under take-or-pay contracts, with a cash benefit of €1.9 bn.

In a market characterized by a continuous margin decline and by excess European refining capacity, Eni has increased its capacity reduction goal from 35% to over 50%. This will be achieved by converting part of its plants in Italy and further reductions in the company’s presence across Europe. Eni is therefore able to confirm R&M operating cash flow breakeven by the end of 2015 and ebit breakeven by 2016, despite the worsening scenario.

 

Average annual operating cash flow in 2014-2015 will be higher than € 15 billion, an improvement on the target announced in February. This compares to the € 11 billion generated in 2013. Upstream growth, the turnaround in mid-downstream activities, rigorous control of costs and investments, and planned divestments will lead to a 20% increase in average annual free cash flow for the 2014-2015 period when compared to last year.

  • Thanks to recent exploration discoveries and to a greater focus on its core business, Eni is able to increase its 2014-17 divestiture program by € 2 billion for a total of € 11 billion, of which € 6 billion to be achieved between 2014 and 2015.
  • Eni has started a cost reduction program that focuses primarily on reducing business support expenses. Combined with the efficiencies created by the recent reorganization, this program will save € 250 million in 2014 and an aggregate of €1.7 billion in the 2014-17 period.



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Last updated on 12/08/14