Key performance/sustainability indicators

France

In December 2010, Eni increased its share in Altergaz, a company marketing natural gas in France to retail and middle market clients, to 55.2%, as the founding partners of the company exercised a put option on a 15% stake. Eni now controls the entity.

Brazil: divestment of interest in Gas Brasiliano Distribuidora

In May 2010, Eni signed a preliminary agreement with an affiliate of Petrobras for the divestment of its 100% interest in Gas Brasiliano Distribuidora, a company that markets and distributes natural gas in an area of the São Paulo State, Brazil. The completion of the transaction is subject to approval of the relevant Brazilian authorities.

Sale of 25% of the share capital of GreenStream BV

In April 2010, Eni sold to NOC (Libyan National Oil Corporation) a 25% stake in the share capital and the control of GreenStream BV, the company owning and managing the gas pipeline for importing to Italy natural gas produced in Libya.

New pricing and risk management model

Against the changed backdrop of the natural gas market, in 2010 Eni implemented new pricing and risk management strategies to manage economic margins and to optimize asset value (supply contracts, client base, capacity).

Divestment of international pipelines

Procedures for the divestment of Eni’s interests in the German TENP, the Swiss Transitgas and the Austrian TAG gas transport pipelines are progressing. The divestment is part of the commitments presented by Eni to the European Commission to settle an antitrust proceeding related to alleged anti-competitive behavior in the natural gas market ascribed to Eni without the ascertainment of any illicit behavior and consequently without imposition of any fines or sanctions. The Commission accepted Eni’s commitments as of September 29, 2010.

Status of Libyan situation

From February 22, 2011, supplies through the GreenStream pipeline have been suspended as a result of ongoing political instability and conflict in the Country. Eni continues to meet its contractual supply obligations to customers with other gas sources from its portfolio.

Financial and operating results

In 2010, adjusted net profit was €2,558 million, down 12.3% from 2009 due to a sharply lower operating performance of the Marketing business as a result of shrinking marketing margins and volume losses in Italy. Regulated businesses in Italy recorded steady results, while results of International Transport declined.

Worldwide gas sales: considering the risks associated with the natural gas market scenario in 2011 depending on the evolution of the Libyan crisis, in the medium term Eni expects to increase natural gas sales in Italy and in European target markets with a 5% average annual growth rate. The achievement of this target will be supported by strengthening the Company’s leadership on European markets, marketing actions intended to strengthen its customer base in the domestic market and renegotiating the Company’s long-term gas supply contracts.

Return On Average Capital Employed (ROACE) on an adjusted basis was 9.8% (12.3% in 2009).

Capital expenditures totaled €1,685 million and mainly related to the development and upgrading of Eni’s transport and distribution networks in Italy, the upgrading of storage capacity and the ongoing plan for improving power generation efficiency standards.

In 2010, sales of natural gas were 97.06 bcm, down 6.4%, mainly due to unfavorable trends on the Italian market.
This decline was driven by lower sales recorded in the power generation business, as clients opted to directly purchase gas on the marketplace, while lower sales to industrial customers and wholesalers were caused by increased competitive pressure fuelled by oversupply and weak demand. These negatives were offset by organic growth in some European markets.

Electricity volumes sold were 39.54 TWh, increasing by 5.58 TWh, or 16.4%, from 2009.

Natural gas volumes transported on the Italian network were 83.32 bcm, up 8.3% from 2009.

2010 Highlight