Proved undeveloped reserves as of December 31, 2018 totalled 2,309 mmboe, of which 1,127 mmbbl of liquids mainly concentrated in Africa and Asia and 6,458 bcf of natural gas mainly located in Africa. Proved undeveloped reserves of consolidated subsidiaries amounted to 975 mmbbl of liquids and 6,121 bcf of natural gas. Movements in Eni’s 2018 proved undeveloped reserves were as follows:
|Proved undeveloped reserves as of December 31, 2017||2,629|
|Reclassification to proved developed reserves||(777)|
|Extensions and discoveries||166|
|Revisions of previous estimates||278|
|Purchases of minerals in place||280|
|Sales of minerals in place||(273)|
|Proved undeveloped reserves as of December 31, 2018||2,309|
In 2018, total proved undeveloped reserves decreased by 320 mmboe mainly due to: (i) progress in maturing PUDs to proved developed (down by 777 mmboe); (ii) extensions and discoveries (up by 166 mmBOE) due to the final investment decision made for the Area 1 project offshore Mexico and the Merakes project in Indonesia; (iii) revisions of previous estimates (up by 278 mmboe) mainly reported in Egypt due to the development activity of the Zohr project and included the de-booking of 106 mmboe of proved undeveloped reserves at a certain project driven by a deteriorating local operational environment; (iv) improved recovery (up by 6 mmboe) in particular in Iraq; (v) sales of minerals-in-place (down by 273 mmboe) related to disposals in Egypt and other minor assets as described above; and (vi) purchase of minerals-in-place (up by 280 mmboe) related to Abu Dhabi transaction and the business combination in Norway as above mentioned. During 2018, Eni matured 777 mmboe of proved undeveloped reserves to proved developed reserves due to progress in development activities, production start-ups and project revisions. The main reclassifications to proved developed reserves related to the following fields/projects: Zohr (Egypt), Kashagan (Kazakhstan), Bahr Essalam and Wafa (Libya) and Sankofa (Ghana). In 2018, capital expenditures amounted to approximately €6.2 billion and was made to progress the development of proved undeveloped reserves. Reserves that remain proved undeveloped for five or more years are a result of several factors that affect the timing of the projects development and execution, such as the complex nature of the development project in adverse and remote locations, physical limitations of infrastructures or plant capacity and contractual limitations that establish production levels. The Company estimates that approximately 0.6 bboe of proved undeveloped reserves have remained undeveloped for five years or more at the balance sheet date and decreased 0.4 bboe from 2017 due to the progress in development activities made in Kazakhstan, Iraq and Libya as well as the de-booking of of proved undeveloped reserves at a certain project driven by a deteriorating local operational environment. The proved undeveloped reserves that have remained undeveloped for five years or more at the balance sheet date mainly related to: (i) the Kashagan project in Kazakhstan (0.1 bboe) due to the completion of ongoing development activity (for further information see Main exploration and development projects - Kashagan); (ii) the Zubair field in Iraq (0.1 bboe), where development of PUDs has been conditioned by the drilling of additional production and injection wells to be linked to the production facilities, which were already completed to achieve the full field production plateau of 700 kbbl/d; and (iii) certain Libyan gas fields (0.4 bboe) where development completion and production start-ups are planned according to the delivery obligations set forth in a long-term gas supply agreements currently in force. In order to secure fulfillment of the contractual delivery quantities, Eni will implement phased production start-up from the relevant fields which are expected to be put in production over the next several years.
(4) Includes Eni’s share of proved reserves of equity accounted entities.
(5) The reports of independent engineers are available on Eni website eni.com section Publications/Annual Report 2018.
(6) Organic ratio of changes in proved reserves for the year resulting from revisions of previously reported reserves, improved recovery, extensions and discoveries, to production for the year.
All sources ratio includes sales or purchases of minerals in place. A ratio higher than 100% indicates that more proved reserves were added than produced in a year. The Reserves Replacement
Ratio is not an indicator of future production because the ultimate development and production of reserves is subject to a number of risks and uncertainties. These include the risks associated
with the successful completion of large-scale projects, including addressing ongoing regulatory issues and completion of infrastructure, as well as changes in oil and gas prices, political risks and
geological and environmental risks.