- BOARD OF DIRECTOR'S COMMUNICATIONS
- ● PRICE SENSITIVE
Or , our new artificial intelligence tool.
Claudio Descalzi, Eni’s CEO, commented:
“We confirm our strategy to become a leader in the decarbonization process, notwithstanding the enduring impacts of the COVID-19 pandemic on the global economy and the Company. We are assessing how to speed up our plans. This ongoing evolution will allow the Company to achieve a better balanced portfolio, reducing the exposure to the volatility of hydrocarbon prices, while progressing towards our targets of sustainability and profitability. Our changed long-term assumptions, reached four months after the outbreak of the COVID-19 pandemic, reflect our current expectations about future prices and will be incorporated in our processes of capital allocation.”
Rome, 6 July 2020 – Following the assessment of the disruptions in the trading environment due to Covid-19 pandemic, Eni confirms the long-term strategy presented at the end of February 2020 setting out the evolution of the Company in the next 30 years that will allow Eni to be a leader in the market supplying decarbonised products and actively contributing to the energy transition process, thus combining targets of returns and environmental sustainability. The market developments linked to the spread of the COVID-19 pandemic have made even more compelling the robustness of our strategic path and of our long-term choices.
The distinctive element of this strategy – as Eni already announced to the market - is the fixed 2050 absolute emissions reduction target of 80% covering all of the Company’s products, which is well above the 70% threshold indicated by the IEA in the Sustainable Development Scenario that tracks the reduction of emissions compatible with the Paris Agreement. The even more sustainable evolution of Eni’s business model is underpinned by maintaining rigorous financial discipline in capital allocation and a robust capital structure.
Having considered the prospect of the pandemic having an enduring impact on the global economy and the energy scenario, Eni has revised its view of market fundamentals to factor in certain emerging trends. In Particular, the Company has revised its forecast for hydrocarbon prices, which are the main driver of capital allocation decisions and of the recoverability assessment of the book values of Eni’s non-current assets.
Revision of the 2020-2024 and long-term pricing scenario
The revised scenario adopted by Eni foresees a long-term price of the marker Brent of 60 $/barrel in 2023 real terms compared to the previous assumption of 70 $/barrel. For the years 2020-2022, Brent prices are expected respectively at 40, 48 and 55 $/barrel (compared to the previous assumptions of 45, 55 and 70 $/barrel).
The price of natural gas at the Italian spot market “PSV” is estimated at 5.5 $/mmBTU in real terms 2023 compared to the previous assumption of 7.8 $/mmBTU. For the years 2020-2022 it is expected respectively at 3.0, 4.6 e 5.2 $/mmBTU (previously 3.9, 5.1 and 7.3 $/mmBTU). Long-term refining margins in the Mediterranean area are confirmed slightly lower than 5 $/barrel.
Impact on the Group’s financial statements
Eni’s impairment assessments are in progress and it is not possible at this time to precisely determine the impact of the revised impairment testing price assumptions on the group’s financial statements.
Based on information available to management and on the current progress of assessments, Eni currently expects to record in the results of the second quarter 2020 estimated non-cash, post-tax impairment charges against non-current assets, including a devaluation of tax credits recorded in connection with tax-losses carryforwards, of € 3.5 billion, plus/minus 20%. At its mid-point, this estimation represents a limited decrease of around 4% in the value of non-current assets.
Pre-tax impairment charges estimated at € 2.8 billion relate for € 2 billion to upstream assets, with the remaining charges to be recorded in the refining business. Management does not expect any impairment charge against the value of explorations assets triggered by the revision of the pricing scenario.
The reduction in tax credits of € 0.7 billion is due to an impairment loss recorded at tax-losses carryforwards net of the tax effects associated with the charges recorded against the book values of property, plant and equipment.
The ultimate amount of the above mentioned estimated impairment losses are expected to be recorded in Eni’s consolidated results for the second-quarter 2020 due to be released on July 30, 2020 and in Eni’s interim consolidated financial report for the first half of 2020 due to be published by the first week of August upon completion of a limited review by the Group’s Independent external Auditors.
If you want to change topic, clear the chat and make a new query to receive more relevant results.
This will delete the question history.
If you want to change topic, clear the chat and make a new query to receive more relevant results. This will delete the question history.
Here you can find the full list of your queries.
The answers are generated by artificial intelligence, therefore they may contain inaccuracies. Please read the terms and conditions of use.
EnergIA is an innovative tool based on artificial intelligence capabilities, which can help you navigate the contents of eni.com, quickly finding answers to your questions. EnergIA can also perform a search on a specific topic, providing the most up-to-date data available, or it can invite you to delve deeper into a topic of your interest by suggesting links and specific readings. Start now!
EnergIA is an innovative tool based on artificial intelligence capabilities, which can help you navigate the contents of eni.com, quickly finding answers to your questions. Start now!
EnergIA (ener'dʒia) is a system based on Generative Artificial Intelligence.
Thanks to this technology, we can respond to your requests by querying the most relevant content and documents available on eni.com. (Note: financial documents from the last 12 months and press releases from the last 2 years are considered.)
Through EnergIA, you can delve into topics of interest and have a real-time window into the world of Eni.
If you wish to search for a specific document, press release or news, use the traditional search engine via the magnifying glass icon.
Like all systems that leverage Generative Artificial Intelligence, EnergIA may generate inaccurate or outdated responses. Always consult the sources that EnergIA proposes as the origin of the generated information.
If the system fails to find an exact match for the requested content, it still tends to provide a response.
If you find any inaccuracies in the provided response, please send us your feedback at the bottom of the page: it will be very helpful for us to improve.
Remember that the content generated by the system does not represent Eni’s official position. We therefore invite stakeholders to refer to their designated contacts for official statements: Press Office for journalists, Investor Relations for analysts and investors, Company Secretariat for shareholders etc..
EnergIA can understand questions posed in almost all languages, but we prefer to provide you with a response in English or Italian, the two languages available on eni.com. If you ask a question in Italian, the content on the site in Italian will be consulted. If you ask it in English or any other language, the content in English will be consulted. (Note: the language Eni uses for financial documents/content is predominantly English.)
If questions are formulated that violate the set security criteria, the system will not proceed with processing the response. Please remember not to send personal data.
By using this service, the users acknowledge that they have read and accepted the terms and conditions of use.
Search
EnergIA (ener'dʒia) is a system based on Generative Artificial Intelligence.
Thanks to this technology, we can respond to your requests by querying the most relevant content and documents available on eni.com. (Note: financial documents from the last 12 months and press releases from the last 2 years are considered.)
Through EnergIA, you can delve into topics of interest and have a real-time window into the world of Eni.
If you wish to search for a specific document, press release or news, use the traditional search engine via the magnifying glass icon.
Like all systems that leverage Generative Artificial Intelligence, EnergIA may generate inaccurate or outdated responses. Always consult the sources that EnergIA proposes as the origin of the generated information.
If the system fails to find an exact match for the requested content, it still tends to provide a response.
If you find any inaccuracies in the provided response, please send us your feedback at the bottom of the page: it will be very helpful for us to improve.
Remember that the content generated by the system does not represent Eni’s official position. We therefore invite stakeholders to refer to their designated contacts for official statements: Press Office for journalists, Investor Relations for analysts and investors, Company Secretariat for shareholders etc..
EnergIA can understand questions posed in almost all languages, but we prefer to provide you with a response in English or Italian, the two languages available on eni.com. If you ask a question in Italian, the content on the site in Italian will be consulted. If you ask it in English or any other language, the content in English will be consulted. (Note: the language Eni uses for financial documents/content is predominantly English.)
If questions are formulated that violate the set security criteria, the system will not proceed with processing the response. Please remember not to send personal data.
By using this service, the users acknowledge that they have read and accepted the terms and conditions of use.
A new window into Eni’s world, at your disposal. EnergIA is an innovative tool based on artificial intelligence capabilities, which can help you navigate the contents of eni.com, quickly finding answers to your questions.