In the table below, Eni’s top risks are presented with regard to the Company’s targets. For a detailed description of these risks, or, in addition, for further less relevant uncertainties factors, see the section “Risk factors and uncertainties”.
|Country||Country/Counterparty - Upstream||Country/Counterparty - Mid-downstream||Evolution in G&P legislation|
|Main risk events||Political and social instability in the countries of operations may lead to acts of internal conflicts, civil unrests, violence, sabotage and attacks, with consequent production interruptions and losses as well as interruptions in gas supplies via pipe and people and assets damages.||Upstream Credit and Financing risk partner related to the credit proceeds delay or cost recovery.||Mid-downstream business credit risk.||Potential deteriorating legislative/regulatory, national and international environment, in the Gas & Power segment with impacts to corporate profitability.|
|Treatment measures||- Geographic diversification of portfolio assets since the exploration phase and business diversification;
- Reduction of the exposure through the Dual Exploration Model;
- Keeping efficient and long-lasting relationships with producing countries and local stakeholders even throughout local social development and sustainability projects;
- Implementation of the security management system with the analysis of the preventive measures specific for site.
|- Finalization of specific agreements on repayment plans of third parties receivables;
- Securitization package with in-kind withdrawals negotiating and/or utilization of dedicated escrow account;
- Mitigation collaterals (sovereign guarantees, parent company guarantees, credit letters);
- Carry agreement negotiations.
|- Stricter selection for Retail and Business customers (credit line with a minimal rating threshold in the acquisition of customers);
- Mitigation collaterals (advance payment, credit letters, bank guarantees and/or Parent Company Guarantees);
- Receivables sold to financing institutions;
- Time to bill reduction and captive insurance.
|- Institutional actions on regulatory initiatives and potentially critical policies (i.e. further advocacy of Eni to European strategy to climate/ energy 2030 and 2050, also following the adoption of National Energy Strategy - NES);
- Constant dialogue with institutions and regulatory Authorities, also by category associations;
- Possibility of appeal against legislative and regulatory initiatives of Authorities in order to protect Eni's interests.
|Rif.||Integrated Annual Report 2017, Risk factors and uncertainties section pages 81-82||Integrated Annual Report 2017, Risk factors and uncertainties section page 88||Integrated Annual Report 2017, Risk factors and uncertainties section page 88||Integrated Annual Report 2017, Risk factors and uncertainties section page 83|
|Climate change||Commodity Price||Stakeholder||Gas contract|
|Main risk events||Climate change mainly referred to drivers of energy transition (market scenario, legislative and technologic evolution and reputation) and to the phisical drivers (extreme/chronical climatic events).||Oil global demand and supply imbalance risk.||Relationships with local and international stakeholders on oil&gas industry activities, with impacts also in the media.||Potential differences between the cost of supply and the minimum off take obligations in take-or-pay long-term gas supply contracts compared to current market conditions and management of arbitrations/negotiations with gas suppliers.|
|Treatment measures||- GHG action plan to 2025 approved by the Board of Directors and strengthening the Climate Change issue in the strategic plan, with medium-term targets and investments in line with the action plan to 2025. Commitment to the definition of a long-term decarbonization roadmap;
- Participation in the Preparer Forum for oil&gas, as part of the Task Force on Climate-related Financial Disclosures (TCFD), finalized to supporting the progressive and correct transposition of recommendations issued by TCFD;
- Strengthening the role of gas as pillar of the transition to low carbon, also through a concrete commitment in the reduction of methan emissions into the entire value chain;
- Sustainable development of green refinery business and targeted initiatives based on bio-chemistry, as well as business integration with renewable energy;
- Inclusion of a sensitivity on “Carbon Pricing” in the evaluation process for main investments and resilience analysis of portfolio applying the low carbon IEA scenario;
- Commitment to low carbon research through Energy Transition Program and partecipation in OGCI Climate Investments Fund.
|- Reduction of new projects break-even price; widespread efficiency initiatives and disposal plan.||- Integration of targets and sustainability projects (i.e. Community Investment) within the Strategic Plan and incentive program;
- Targeted communication plan and communication initiatives aimed at spreading Eni's strategy and activities, also through social media with a mainly institutional target;
- Meeting and dialogue with stakeholders initiatives and strengthening of presence in the critical areas in order to intensify the relationship management with local authorities;
- Development of measurement instruments and monitoring of corporate reputation (RepLab) for all stakeholders categories.
|- Prolonged supply portfolio restructuring process through the renegotiation of price-volume conditions;
- Portfolio balancing by the sale of volumes not intended to commercial segments to the financial markets (physical and liquid financial hub) both in Italy and in Northern Europe;
- Continuous control of management of arbitrations and negotiations by dedicated units.
|Rif.||Integrated Annual Report 2017, Risk factors and uncertainties section pages 85-86||Integrated Annual Report 2017, Risk factors and uncertainties section pages 75-76||Integrated Annual Report 2017, Risk factors and uncertainties section pages 81-82||Integrated Annual Report 2017, Risk factors and uncertainties section pages 82-83|
|Accidents||Proceedings on corruption||Environmental and health proceedings||Cyber security|
|Main risk events||Blow-out risks and other relevant accidents affecting the upstream assets, refineries and petrochemical plants, as well as the transportation of hydrocarbons by sea and land (i.e. fires/ explosions, etc.) with impact on people and assets damages, company profitability and reputation.||Negative impact on the Company reputation, profitability and business perspectives due to the lack in compliance (real or perceived) with the laws and rules, in particular on anti-corruption themes, on behalf of management, employees and contractors.||Environmental and health proceedings as well as evolution in HSE legislation may trigger contingent liabilities, impact on company profitability (costs for remediation activities)and on corporate reputation.||Cyber Security and industrial Espionage.|
|Treatment measures||- New methodology to classify complex wells and geologic “Real time monitoring” of well drilling phases;
- Development of innovative digital instruments and big data analyzers to improve operative performances and to support the preventive maintenance (i.e. real-time monitoring central room for productive assets);
- Asset Integrity Management;
- Specific technological development and emergency management plans; specific HSE audit and plants monitoring;
- Management and continuous monitoring of shipping operation and third operators, vetting activities.
|- Presence of the Code of Ethics and Model 231 and control of the correct application of the model (Watch Structure);
- Presence of the Integrated Compliance Department directly reporting to the CEO;
- Continuous monitoring of regulatory developments and a corresponding adaptation of the MSG and the Anti-Corruption Compliance Program;
- Continuing training for compliance/anti-corruption and higher management awareness on the culture of company ethic and integrity;
- Process of analysis and notices treatment, audit activity, continuing control on the management of legal proceedings performed by dedicated organizational structures.
|- Integrated System of HSEQ Management;
- Transversal organizational unit dedicated to legal assistance to HSE matters;
- Definition of paths with Public Authorities (program agreements, transactions, etc.);
- Monitoring of authorization processes of the remediation projects through a continuous dialogue with the stakeholders and the competent Authorities for the remediation activities;
- Technological development activities with international universities and partnerships with environmental engineering company.
|- Centralized governance model of Cyber Security, with units dedicated to cyber intelligence and prevention, monitoring and management of cyber attacks;
- Rules dedicated to IT security management and information protection;
- Operating plans aimed at increasing security of industrial sites, training and awareness initiatives dedicated to Eni's employees;
- Developing a methodology aimed at quantitative evaluation of residual Cyber Security risk.
|Rif.||Integrated Annual Report 2017, Risk factors and uncertainties section pages 77-80||Integrated Annual Report 2017, Risk factors and uncertainties section page 86||Integrated Annual Report 2017, Risk factors and uncertainties section pages 77-78||Integrated Annual Report 2017, Risk factors and uncertainties section pages 87-88|