Eni is leveraging on its core strengths to build a broad portfolio of high margin opportunities, enabling it to capture upside as oil prices improve and defend value in future downturns.
The 2017-2020 plan will enable Eni to achieve superior cash flow growth by building a high margin portfolio based on material and conventional resources, designed to cost operations and high value assets.
Confirmed 2017 target of 0.8 bln boe of new resources, at a unitary discovery cost of approximately 1 $/bbl.
Confirmed FY production target of 1.84 mln boe/d (up by 5% from 2016) leveraging on new project start-ups and ramp-ups of fields entered into operations in 2016, mainly in Egypt, Kazakhstan, Angola, Indonesia and Norway. Other initiatives of production optimization are expected to be implemented, which were not included in the initial plans. These additions will absorb mature fields decline and Val d’Agri shutdown lasting up to 90 days. Actions are underway in order to reduce the expected downtime period.
Confirmed the target of structural break-even since 2017.
Planned cost position improvements by leveraging on long-term supply contracts revision and logistic cost reduction. Eni plans to retain market share in the large customers and retail segments, increasing the value of the existing customer base by developing innovative commercial initiatives, integrating services and optimizing operations.
Confirmed the target of breakeven refining margin at 3 $/barrel from 2018.
Refinery intakes on own account are expected to slightly decrease y-o-y due to the lack of availability of certain assets at the Sannazzaro Refinery, partially offset by higher volumes at Livorno and Milazzo refineries. Against a backdrop of strong competition, management expects to consolidate volume and market share in the Italian retail market by leveraging innovation and product and service differentiation. In the rest of Europe, sales are expected to remain stable, excluding the effects of asset disposals in Eastern Europe.
In the Chemical business, sales are expected to trend up, due to higher production supplies. Cracker and polyethylene margins are expected to decline, while a recovery is expected in the butadiene and styrenics businesses.
Confirmed the target of 18% reduction in capex y-o-y on a pro-forma basis, i.e. net of the capex which will be reimbursed in connection with asset disposals.
Cash neutrality: confirmed the organic coverage of capex and dividends at a Brent price of approximately 60 $/bbl in 2017.
Leverage at the end of 2017: projected to decline from 2016 level, also reflecting the expected closing of portfolio transactions, particularly the Mozambique deal.
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