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 2018-2020 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.
Hydrocarbon production is expected to grow by 3% per year across the 2017-2020 period. This will be achieved primarily by the ramp-up and start-up of new projects and the production optimization, which are expected to contribute around 850 kboed in 2020.
Exploration remains a fundamental value driver for the company. Throughout the plan, Eni expects to deliver new discoveries of 2-3 billion boe, almost two times the discoveries of the previous plan, by drilling around 120 wells in more than 20 countries. This will be achieved despite a 10% reduction in exploration CAPEX.
Eni’s portfolio flexibility, the success of its ongoing exploration strategy, synergies with existing assets and contract renegotiations will enable the average breakeven price of new projects to be approximately $30/bbl.
Eni’s G&P business is expected to reach breakeven in 2017 and positive later on as it benefits from the alignment of gas supply contracts to market conditions and a reduction in logistics costs.
The G&P business has a new strategy: to go from being a leading European player to becoming the company’s global gas and LNG marketing arm, with a more integrated relationship with Upstream producing benefits.
G&P's new strategy will focus on:
The EBIT from 2019 is expected to be in excess of €600 million.
In order to address the structural weaknesses in the Refining sector, Eni’s target is to reduce its breakeven margin to around $3/bbl by 2018. To do this, Eni will leverage on:
This will generate a cumulative €3.3 billion contribution to cash flow from operations and an EBIT increase of €300 mln over the plan period, at a constant 2017 scenario.
In Chemicals, Eni plans to achieve an EBIT of around €300 mln per year and a cumulative operating cash flow of €1.2 bln thanks to:
Investments over the four-year plan are focused on high value projects with accelerated returns and on the development of conventional assets. CAPEX of approximately €31.6 billion represents an 8% reduction at constant foreign exchange rates versus the previous plan, mostly related to upstream portfolio, project activity rescheduling and contract re-negotiations. This has been partially offset by the increased effort of around €500 mln in other businesses, mainly renewable energy, a growing component of Eni’s decarbonization strategy. Moreover, uncommitted CAPEX represents around 55% of total investments in 2019- 2020, and gives Eni’s portfolio significant flexibility should the oil price scenario turn negative again in the future. The new disposal program targets €5-7 billion of asset sales primarily through the dilution of exploration assets, in line with our “dual exploration” model.
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