Eni

ENI S.p.A.

Type	Società per azioni (BIT: ENI, NYSE: E)
Industry	Petroleum industry
Founded	10 February 1953
Headquarters	Rome, Italy
Area served	Worldwide
Key people	Roberto Poli (Chairman), Paolo Scaroni (CEO)
Products	Oil and natural gas exploration, production, refining and marketing, electricity generation, oil and gas engineering and construction
Revenue	€84.35 billion (2009)[1]
Operating income	€12.06 billion (2009)[1]
Profit	€4.367 billion (2009)[1]
Employees	78,420 (2009)[1]
Subsidiaries	AGI, Distrigas, Italgas, Polimeri Europa, Saipem (43%), Snam Rete Gas (50%), Syndial,
Website	www.eni.it

Eni S.p.A. (BIT: ENI, NYSE: E) is an Italian multinational oil and gas company, present in 70 countries, and currently Italy's largest industrial company with a market capitalization of € 87.7 billion euros (US$138 billion), as of July 24, 2008.^[2] The Italian Government owns a 30% golden share in the company: 20% held through the state Treasury and 10% held through the Cassa depositi e prestiti.

Contents 1 History 1.1 Start and the early post-war years 1.2 The '50s and '60s 1.3 The '70s/'80s 1.4 The '90s 2 Current operations 2.1 Exploration and production 2.2 Gas 2.3 Power 2.4 Engineering and construction 3 Split proposal 4 Controversies 5 Subsidiaries 6 Notes 7 Bibliography 8 External links

History

Start and the early post-war years

The 1920/'30s - Italy Launches an Oil and Gas Policy

Incorporation of Agip. Exploration begun in Italy and foreign ventures initiated (Romania, Albania, Iraq). Exploration proceeds inside Italy and the Agip distribution network is created. After World War 2, Enrico Mattei is appointed Special Administrator to close down Agip but subsequent the discovery of the Caviaga gas field in the Po Valley, the process to liquidate Agip is halted.

The '50s and '60s

Incorporation Of Eni and Expansion Of Activities In Italy and Abroad

Despite initial postwar plans to break-up the Agip company, Agip's administrator Enrico Mattei converted it to a state monopoly, renamed Eni. The name derives from the initials of the company's original full title Ente Nazionale Idrocarburi, but is no longer used as an acronym. The Italian Government authorized its establishment on February 10, 1953 in order to implement a national energy strategy based on the concentration of all the activities in the energy sector into one group. Eni was to supply energy to Italy and contribute to the country's industrial development.

Eni broke the monopoly of the major oil companies by introducing a new contractual formula with the producer countries. This formula, which is first applied in Egypt and Iran, enabled Eni to share in the profits of oil and gas development. Discovery of the first European offshore gas field under the Adriatic Sea near Ravenna and discovery of the "El Borma" field in Tunisia, one of the largest reservoirs in Africa.

The head of Eni, Mattei, a center left politician, had developed cooperation with communist countries, and the import of oil from the Soviet Union became an important part of Eni's operations. At the same time, Eni was involved in a series of high profile political corruption scandals.

The '70s/'80s

Gas as a Solution to the Oil Crisis and the Algerian Gas Pipeline

Eni identifies natural gas as an energy source that can meet the crisis resulting from the first oil embargo. Agreements signed to import gas from the Soviet Union and the Netherlands. Using a new "gravity" platform Agip discovers and then brings into production the "Loango" field in offshore Congo. Agip drills to a record depth of 5,500 meters at the Malossa field (near Milan) and discovers a new reservoir. The first remote controlled platform is installed by Agip in the "Perla" field, offshore Sicily.

Snam inaugurates the Transmediterranean pipeline, transporting gas from the Hassi-R-Mel field in Algeria to the Po Valley. The more than 2,500 km-long gas pipeline starts in the Algerian desert, crosses Tunisia, the Sicilian Channel (at a water depth of over 650 metres) and proceeds through Sicily and up the length of the entire Italian peninsula. A new record in offshore drilling at sea-depths of over 800 metres is established with the discovery of a new field in the Otranto Channel. Onshore, a new record is achieved with the discovery of the "Villafortuna" reservoir at a depth of 6,000 metres near Novara in Northern Italy. The new SWACS system, using acoustic signals to operate underwater production valves, is put into operation.

The '90s

Eni becomes a joint stock company

From being a public corporation Eni is now transformed into a joint stock company, as most of Eni's Share capital is put on the market in four successive public issues.
Agip's international activities expand with new acquisitions in Algeria, China, Angola, the North Sea and Egypt, while new agreements are signed with Kazakhstan, Azerbaijan and for the Nigerian and Angolan deep water offshore. The "Aquila" deepwater field (Otranto Channel) is brought into production. Eni incorporates Agip, thus becoming directly an oil and gas producer.
Eni's daily oil and gas production reaches 1 million barrels of oil equivalent.

Current operations

Exploration and production

Eni operates in the exploration and production of hydrocarbons in Italy, North Africa, West Africa, the North Sea, the Gulf of Mexico and Australia. It also operates in areas with great exploration and production potential such as the Caspian Sea, the Middle and Far East, India and Alaska.

Its crude oil production comes primarily from Libya, Egypt, Nigeria, the Congo, the North Sea, and Angola, with smaller amounts of crude oil production in Tunisia and in the United States. Eni's China production began in 1992, although it currently amounts to only 1 percent of Eni's total crude oil production.

In 2007, oil and natural gas production for the full year averaged 1.74 millions boe per day, making Eni Europe's third largest refiner, after Royal Dutch Shell and Total S.A..

Estimated net proved reserves at December 31, 2007 were 6.37 billions boe determined based on a year-end Brent price of $96.02 per barrel. The amount of proved reserves comprised 30% of quantities of the three equity accounted Russian companies (SeverEnergia) purchased as part of a bid procedure for assets of bankrupt Yukos and participated by Eni with a 60% interest, considering that it is probable that Gazprom will exercise a call option to acquire a 51% interest in these companies.

Eni carried out several hydrocarbon discoveries in recent years; the main discoveries were made in: Angola, Brazil, Congo, Egypt, Indonesia, Nigeria, Norway, Pakistan, Scotland, the Gulf of Mexico and Alaska. In 2007, a total of 81 new exploratory wells were drilled (43.5 of which represented Eni's share). Moreover, the company acquired oil and gas assets in the Gulf of Mexico from Dominion Resources and in onshore Congo from Maurel & Prom with total expenditures amounting to €4.52 billion.

In January 2010 a consortium led by Eni was awarded a license to develop the Zubair field, one of the largest oil fields in Iraq.^[3]

Gas

Eni operates in the supply, transport, distribution and sale of natural gas. Gas sales reached 99 billion cubic meters in 2007. In June 2008 the company bought a 57% stake in Distrigas, a Belgian company that supplies natural gas to industries, resellers and electricity producers. ^[4] In March 2009 it bought the remaining 43%. As of June 30, 2009 Distrigas is a fully owned subsidiary of Eni.^[5]

Power

Eni's electricity generation sites in Italy, as of January 2010, are the following:

Natural Gas Power Plants

• Brindisi - 1321 MW
• Ferrara - 61 MW
• Ferrera Erbognone - 1030 MW
• Livorno - 199 MW
• Mantova - 836 MW
• Ravenna - 972 MW
• Taranto - 300 MW

Photovoltaic Power Plants

• Nettuno - 30 MW

Engineering and construction

Eni operates in engineering, oilfield services and construction both offshore and onshore through Saipem, a subsidiary listed on the Italian Stock Exchange (Eni's interest is 43%).

Split proposal

Activist asset manager Knight Vinke, which owns 1% of the outstanding shares of the company, in October 2009 has begun pressing Eni's management to operate a spin off of Eni’s gas activities. In its opinion this would solve the undervaluation of the company and release up to 50 billion euros ($70bn) of hidden value.^[6]

Controversies

The Central Energy Italian Gas Holding scandal in 2005 involved Eni, Gazprom and Silvio Berlusconi.^[7]

In 2009, the European Commission filed formal antitrust charges against Eni. The commission believes that Eni has conspired to keep competitors from using its gas pipelines.^[8]

Subsidiaries

• AGI (100% owned) - Agenzia Giornalistica Italia (Italian Journalist Agency) is one of the main Italian news agencies.
• Distrigas (100% owned) - a natural gas company based in Belgium
• Italgas (100% owned) - Italgas is a gas utility that supplies gas to industries and households in approximately 1500 municipalities. Sold to Snam Rete Gas in February 2009
• Polimeri Europa (100% owned) - Polimeri Europa is a petrochemical company that manages the production and marketing of petrochemical products such as olefines, aromatics and intermediates (base chemicals) , styrenes, elastomers and polyethylene, being also able to count on a range of proprietary technologies, advanced plant facilities and a broad-based distribution network.
• Saipem (43% owned) - Saipem is an oil and gas industry contractor. Saipem has contracted for designing and constructing several pipelines, including Blue Stream, Greenstream, Nord Stream and South Stream.
• Snam Rete Gas (50% owned) - Snam Rete Gas (BIT: SRG) owns Italy's largest natural gas pipeline system and is the only LNG operator in Italy.
• Eni UK - carries out operations in the British section of the North Sea, in the Irish Sea and off the coast of the Shetland Islands. Has been present in UK since 1964. In 2006 Eni UK's average net production of hydrocarbons was more than 141,000 boe/d.^[9]

Notes

Bibliography

External links

• Official website
• Eni from Yahoo! finance
• New Gas Routes to the European Union

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