Overview

In detail:

  • performance data for 2016 in the Refining & Marketing sector
  • the 2016 Technical Investments Table in the Refining & Marketing sector

2016 Performance

PERFORMANCE - REFINING & MAKETING AND CHEMICALS
 201420152016
Employees at year end (number) 11.884 10.995 10.858
TRIR (Total Recordable Injury Rate) (recordable injuries/worked hours) x 1,000,000 1,51 1,07 0,38
of which: employees   1,60 0,97 0,44
contractors   1,40 1,17 0,32
Oil spills due to operations (> 1 barrel) (barrels) 225 427 134
Direct GHG emissions (mmtonnes CO2 eq) 8,45 8,19 8,50
SOx emissions (sulphur oxide) (ktonnes SO2 eq) 6,84 6,17 4,35
Refinery throughputs on own account (mmtonnes) 25,03 26,41 24,52
Retail market share in Italy (%) 25,5 24,5 24,3
Retail sales of petroleum products in Europe (mmtonnes) 9,21 8,89 8,59
Service stations in Europe at year end (number) 6.220 5.846 5.622
Average throughput of service stations in Europe (kliters) 1.725 1.754 1.742
Balanced capacity of refineries (kbbl/d) 617 548 548
Capacity of biorefineries (ktonnes/year) 360 360 360
Production of biofuels (ktonnes) 105 179 191
GHG emissions/refining throughputs (traditional refineries) (a) (tonnes CO2eq/kt) 287 237 272
Production of petrochemical products (ktonnes) 5.283 5.700 5.646
Sales of petrochemical products   3.463 3.801 3.759
Average plant utilization rate (%) 71 73 72


(a) Livorno, Sannazzaro, Taranto, Gela related to 2014 and Livorno, Sannazzaro e Taranto related to 2015.

  • in 2016 continued the positive trend in total recordable injury rate, down by 64% due to both employees (down by 54%) and contractors (down by 73%) contribution.
  • greenhouse gas emissions reported a decrease of 29.5% compared to 2015 driven by a different mix of processed fuels at Livorno, Taranto and Sannazzaro refineries; the trend was influenced by the shutdown of the Dunkerque plant (Versalis) in the second part of the year.
  • in 2016 the Refining & Marketing and Chemicals segment reported an adjusted operating profit of €583 million, down by €112 million, or 16,1% from the previous year. In 2016, the Refining & Marketing business reported an adjusted operating profit of €278 million, down by 28% from 2015. This reflected negative impact of an unfavourable refining margin scenario (Eni’s standard refining margin – SERM – in 2016 worsened to 4.2 $/bbl, compared to 8.3 $/bbl in 2015, down by 49.4%), the lower availability of domestic crude oil from the Val d’Agri field and higher incidence of scheduled standstills in 2016. These negatives were partly offset by improved plant efficiency and optimization. The refining break-even margin improved to 4.2 $/bbl yearly average from the 2016 target of 4.5 $/bbl. Results of the Marketing activity declined mainly due to lower margins reflecting the increasing competitive pressure and the assets disposals in Slovenia and Hungary. The Chemical business reported an adjusted operating profit of €305 million, barely unchanged from the full year 2015 with an adjusted operating profit of €308 million. The unfavourable trading environment with worsening margins of crackers, polyethylenes and styrenes was partially offset by steady sale volumes and efficiency and optimization actions.
  • in 2016 Eni’s refining throughputs amounted to 24.52 mmtonnes, lower y-o-y (down by 7.2%) due to unavailability of domestic crude oil of the Val d’Agri field at the Taranto plant and planned shutdowns at Livorno and Milazzo refineries. These negatives were partially offset by higher throughputs at the Sannazzaro refinery, despite the incident occurred at the EST plant in December 2016. On a homogeneous basis, when excluding the impact of the disposal of CRC refinery in the Czech Republic finalized on April 30, 2015, refining throughputs were down by 4.5%.
  • in 2016 biofuels produced from vegetable oil at the Venice Green Refinery amounted to 0.21 mmtonnes, up by 5% compared to a year earlier.
  • retail sales in Italy were 5.93 mmtonnes slightly decreasing from 2015 (down by approximately 30 ktonnes, or 0.5%).
  • retail sales in the Rest of Europe (2.66 mmtonnes) were down by 9.2% compared to the previous year, mainly due to assets disposals in the Czech Republic and Slovakia finalized in July 2015 as well as in Slovenia and Hungary in the second half of 2016. These negatives were partially offset by higher volumes traded in France, Austria and Germany.
  • sales of petrochemical products in Europe amounted to 3.76 mmtonnes, recording a slight reduction of 1.1% y-o-y, due to a slow recovery in consumptions. Higher intermediates sales were partially offset by lower sale volumes in the other businesses

Results

RESULTS - REFINING & MARKETING AND CHEMICALS
2014 (€ milioni)20152016Var. ass.Var. %
(2.811) Operating profit (loss)   (1.567) 723 2.290 ..
1.746 Exclusion of inventory holding (gains) losses   877 (406)    
653 Exclusion of special items:   1.385 266    
138 - environmental charges   137 104    
380 - impairments losses (impairment reversals), net  1.150 104    
43 - net gains on disposal of assets   (8) (8)    
  - risk provisions   (5) 28    
(4) - provision for redundancy incentives   8 12    
41 - commodity derivatives   68 (3)    
18 - exchange rate differences and derivatives   5 3    
37 - other   30 26    
(412) Adjusted operating profit (loss)   695 583 (112) (16,1)
(65) - Refining & Marketing   387 278 (109) (28,2)
(347) - Chemicals   308 305 (3) (1,0)
(12) Net finance income (expense) (a)   (2) 1 3  
64 Net income (expense) from investments (a)   69 32 (37)  
41 Income taxes (a)   (250) (197) 53  
Tax rate (%)   32,8 32,0 (0,8)  
(319) Adjusted net profit (loss)   512 419 (93) (18,2)

(a) Excluding special items.


In 2016, the Refining & Marketing and Chemicals segment reported an adjusted operating profit of €583 million, declining by €112 million from the previous year. The Refining & Marketing business reported an adjusted operating profit of €278 million, down by €109 million, or 28.2% compared to 2015. This decline was driven by an unfavorable refining margin scenario (the Eni’s standard refining margin – SERM – was down by 49.4% to 4.2 $/bbl in 2016 from 8.3 $/bbl in 2015), as well as, the scheduled maintenance activities at certain refineries. The refining break-even margin improved to 4.2 $/bbl, better than the planned target of 4.5 $/bbl. These negatives were partly offset by improved plant optimization and efficiency. Moreover, marketing recorded lower results reflecting weaker margins due to stronger competitive pressure and the subsidiaries disposal in Slovenia and Hungary. The Chemical business reported an adjusted operating profit of €305 million, almost unchanged y-o-y, due to an unfavorable trading environment, which hit commodity margins, mainly in feedstocks, polyethylenes and styrenics, and competitive pressure. The result also reflected lower products availability following unplanned shutdowns. These negatives were offset by efficiency actions implemented in previous years and reduction in depreciation due to the asset impairment recorded in 2015 to align assets book value to their fair value. Special charges excluded from adjusted operating profit amounted to a net positive of €266 million. This included impairment losses to write down capital expenditure of the period at assets impaired in previous reporting periods (€104 million), environmental charges (€104 million) as well as fair-value evaluation of certain commodity derivatives (charges of €3 million) lacking the formal criteria to be accounted as hedges under IFRS. Furthermore, special charges include the write-off related to the EST conversion plant, at Sannazzaro Refinery, affected by the event occurred in December 2016, and the environmental provision for removal and clean-up (a total amount of €217 million), partially offset by the insurance compensation paid by third parties which was recognized virtually certain at the closing date (€122 million). Adjusted net profit of €419 million reduced by €93 million reflecting the operating performance.

Capital Expenditure

CAPITAL EXPENDITURE - REFINING & MARKETING AND CHEMICALS
 (€ million)201420152016Change% Ch.
Refining   362 282 298 16 5,7
Marketing   175 126 123 (3) (2,4)
    537 408 421 13 3,2
Chemicals   282 220 243 23 10,5
    819 628 664 36 5,7

In 2016, capital expenditure in the Refining & Marketing and Chemicals segment amounted to €664 million and mainly related to:
  • refining activity in Italy and outside Italy (€298 million) aiming at maintain plants’ integrity, as well as initiatives in health, security and environment
  • marketing activity, mainly regulation compliance and stay in business initiatives in the refined product retail network in Italy and in the Rest of Europe (€123 million)
  • upgrading activities (€87 million). Upkeeping of plants (€75 milioni), maintenance (€38 milioni), as well as environmental protection, safety and environmental regulation (€37 milioni) in the Chemical business.
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