Adding value to natural gas

Eni is focused on the organic growth of conventional assets, which represent 99 per cent of its equity production and almost its entire resources base of 38 billion barrels. Promoting the use of natural gas is a key element in meeting the energy demand of mature economies and the need for growth in developing countries. We aim to maximise the use of gas as the fuel of choice in a decarbonisation context, in particular in electricity generation but also increasingly in transport. Natural gas is the fossil fuel with the lowest carbon content and offers flexibility in electricity production, allowing it to complement the typically intermittent production of renewable sources. Renewable energies, despite having an increasingly important role to play in energy supply, cannot in the medium term replace hydrocarbons in full and natural gas in particular will continue to satisfy a critical proportion of the world's energy requirements. This is true even in scenarios with lower carbon intensity. Today 48 per cent of Eni's portfolio of certain reserves is made up of gas – a percentage that rises for probable and possible reserves. In 2015, the discovery of Zohr represented the largest gas discovery ever made in Egypt and the Mediterranean and will ensure the Egyptian demand for natural gas can be met for decades.

Conventional assets

The strength of the portfolio of conventional oil and gas assets at competitive costs – and the basic resources with early monetisation options ensure high profitability for the Eni upstream business. In addition to gas, Eni is focusing on the organic growth of conventional assets, which represent 99 per cent of the 2015 equity production of 1,760 kboe/d and almost the entire resources base of 38 billion barrels. This growth is supported by two important devices for managing long-term portfolio development: exploration efficiency and a low-cost structure. Eni has the most efficient cost structure among its peers at less than $20/b. The company’s exploration success guarantees it the lowest unit cost for development and operating expenses. We have discovered almost 12 billion BOE resources since 2008 at a unit cost of $1.2 per barrel.

Resilience of a low carbon portfolio

Over the past two to three years there has been increased attention from some investors to the concept of stranded assets. The risk of stranded assets is connected to oil with high production costs and the highest CO₂ content. Eni's strategy and the composition of the portfolio minimise this risk. This is due to our focus on the following factors:

Thanks to the business strategy adopted, the value of our assets will not be affected – even in the IEA450 scenario, where the temperature rise does not exceed 2°C.