La strategia Upstream: modello esplorativo di Eni

Upstream: our exploration model

Efficient exploration allows us to remain competitive even in the most challenging energy scenarios while continuing to reduce emissions.

A new organisation to create value sustainably

We have set up the Natural Resources Business Groups, one of the two Business Groups that make up our organisational structure, to enhance the value of our upstream Oil & Gas portfolio sustainably. The new division will also manage energy efficiency activities, CO₂ capture and storage projects and Forestry REDD+ projects, contributing to the full decarbonization of all our products by 2050.

Efficient exploration for faster time to market

Our upstream operation includes all of the activities upstream of the natural gas and oil production chain, prior to the transportation and commercialisation stages, including obtaining exploitation rights, exploration, development and production. Our operating model incorporates all of these stages, to increase speed and productivity, enabling us to react more quickly to energy demands and market trends. Our strengths remain our proprietary technologies and the expertise of our people, which enable us to identify new resources with great speed and precision.

Once again in 2021, exploration was confirmed as a growth driver for Eni and a distinctive feature of its upstream model. Furthermore, the results achieved over the last year earned us the title of “Explorer of the Year 2021” from the World Energy Capital Assembly. In addition to the discovery of 700 million boe of new resources at a competitive cost of $1,3/boe, the main success for 2021 was the discovery of the giant Baleine in the deep offshore in the Ivory Coast. With a mineral potential of over 2 billion barrels of oil in place and about 2.4 trillion cubic feet (TCF) of associated gas, which will be developed on a phased “fast-track” basis, this will be the first project to be developed on the African continent with net zero emissions (Scope 1 and 2).

Carbon neutrality will be achieved by leveraging a combination of emission offsetting from Improved Cookstoves distribution projects (Sustainable Development) and forest conservation (REDD+). The Baleine discovery confirms Eni’s commitment to generating value, whilst reducing the carbon footprint and focusing on improving time-to-market exploration discoveries.

In 2021, our exploration portfolio was reloaded with approximately 15,800 square kilometres of new leases in Angola, the Ivory Coast, Egypt, the UAE, Norway, the UK and Vietnam. Various significant near-field exploration discoveries were achieved in Angola, where the Cuica-1 oil discovery will ensure an extension to the useful life of the FPSO which operates the block, in Ghana, with the Eban oil discovery in the CTP 4 operated block near the Sankofa production hub, and in Mexico, with the oil discovery in the Sayuilta exploration prospect following the Saasken discovery made in 2020. Other significant exploration successes were achieved in Egypt, Indonesia, Norway and the United Kingdom.

Within the Strategic Plan 2022-2025, the exploration activities will continue to be a distinctive factor, and the main source of Eni’s diversification towards a portfolio marked by a definite presence of gas, a fast time to market and a low breakeven. Exploration will focus on near-field opportunities linked to existing infrastructures in proven fields with high gas potential.

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Circularity and upstream decarbonization

A platform from the Gulf of Mexico can be recovered and reused in Congo. A ship can be completely redeveloped in Singapore and become the technological centre of a large offshore hub anchored to the ocean floor in Angola. The circular economy and decarbonization are also core values for upstream: every asset is considered to be precious and every resource something to nurture, with a view to reducing climate-changing emissions.

In 2021, the volumes of hydrocarbons sent for routine flaring, equalling 1.16 billion Sm3, increased by 12% compared to 2020, mainly due to activities resuming at the Abu-Attifel and El Feel plants in Libya, which had been shut down for most of 2020. There has been an overall reduction of 31% from 2014, in line with the zero routine gas flaring target by 2025.

Once again in 2021, we reduced upstream fugitive methane emissions by 18% compared to 2020, thanks to the monitoring and maintenance activities as part of the LDAR (Leak Detection And Repair) campaigns that are carried out on a periodic basis.

Taking 2014 as a baseline, the overall reduction comes to 92%, confirming that we have already achieved an 80% reduction on the fugitive methane emissions reduction target that we set for 2025. As well as not being released into the environment this natural gas was sold, contributing to the company's cash flow: it’s a perfect example of the economic value of circularity and decarbonization. 

From field to final production

Everything we do from the exploration phases onwards is in preparation for the final production stage, including studies by our Research Centres using the analytical capabilities of the HPC5 to obtain preview information relating to the deposit and immediately start planning the development stage. The field is then gradually brought into production so that the new infrastructures can be incorporated and production capacity consequently increased. Exploring and extracting from the site quickly allows us to provide a rapid response to the demand for energy. With this in mind, the Dual Exploration Model, which is the sale of minority shares in deposits that are already at the exploration stage, allows us to generate cash in advance and therefore obtain funds to be reinvested, making the process even more efficient.

In more technical terms, the success of our development model is based on:

  • the parallelisation of phases (appraisal, pre-development, engineering)
  • a modular approach with accelerated start-up in early production and subsequent ramp-up
  • the minimisation of financial exposure
  • insourcing the critical project phases (detailed engineering, production supervision, commissioning/hook-up) where our expertise can be applied.

Development operations

The field must be put into production in order to retrieve the hydrocarbons, drilling an optimal number of production wells and installing the necessary equipment to remove any unwanted components (such as solid particles, water, salts, etc.) from the gas and oil and separate the liquid phase of the oil from the gas phase. Development operations at sea are more complex, with production wells being drilled from various kinds of fixed platforms (steel, concrete, semi-submersible or even anchored with cables) that are often extremely large and channelled in such a way as to drain the largest possible area from a single station.

Production operations

Production operations, whereby the hydrocarbons are extracted from the deposit, processed at the plants and sent to the market by pipeline or ship, follow the development stage. The productive life of a deposit can last for decades, during which it will be continuously monitored and work carried out within the wells to optimise production, sometimes including advanced recovery projects that involve injecting gas or water to increase the quantity of hydrocarbons that can be retrieved.