Mission
We are an energy company.
13 15
We concretely support a just energy transition,
with the objective of preserving our planet
7 12
and promoting an efficient and sustainable access to energy for all.
9
Our work is based on passion and innovation,
on our unique strengths and skills,
5 10
on the equal dignity of each person,
recognizing diversity as a key value for human development,
on the responsibility, integrity and transparency of our actions.
17
We believe in the value of long-term partnerships with the Countries
and communities where we operate, bringing long-lasting prosperity for all.
Global goals for a sustainable development
The 2030 Agenda for Sustainable Development, presented in September 2015, identifies the 17
-
Sustainable Development Goals (SDGs) which represent the common targets of sustainable develop-
-
ment on the current complex social problems. These goals are an important reference for the internatio-
nal community and Eni in managing activities in those Countries in which it operates.
Eni
Annual
Report
2021
Consolidated disclosure of Non-Financial Information
This Annual Report includes the consolidated Disclosure of Non-Fi nancial Information (NFI), prepared in accordance with Legislative De-
cree No. 254/2016, relating to the following topics: environment; social; people; human rights; anti-corruption. The disclosure on these
topics and KPIs included in this report are de fined in accordance with the “Sustainability Reporting Standards” published by the Global
Reporting Initiative (GRI Standards), for which NFI is subject to limited assurance. In addition, the Task force on Climate-related Financial
Disclosures (TCFD) recommendations and World Economic Forum (WEF) Core metrics were taken into account.
Integrated Annual Report
Eni’s 2021 Annual Report is prepared in accordance with principles included in the “International Framework”, published by International In-
tegrated Reporting Council (IIRC). It is aimed at representing financial and sustainability performance, underlining the existing connections
between competitive environment, group strategy, business model, integrated risk management and a stringent corporate governance
system.
The mission represents more explicitly the Eni’s path to face the global challenges, contributing to achieve the SDGs determined by the UN
in order to clearly address the actions to be implemented by all the involved players.
ESEF (European Single Electronic Format) requirements
This report has not been prepared in accordance with the EU Delegated Regulation 2019/815 (ESEF Regulation), implementing the Tran-
sparency Directive. The Annual Report in ESEF format (only in Italian language) is published in the specific section of the Company’s
website (www.eni.com, Publications) and is available at the centralized storage mechanism authorized by Consob “1Info” – (www.1info.it).
Disclaimer
This Annual Report contains certain forward-looking statements in particular under the section “Outlook” regarding capital expenditures,
dividends, buy-back programs, allocation of future cash flow from operations, financial structure evolution, future operating performance,
targets of production and sale growth and the progress and timing of projects. By their nature, forward-looking statements involve risks and
uncertainties because they relate to events and depend on circumstances that will or may occur in the future. Actual results may differ from
those expressed in such statements, depending on a variety of factors, including the impact of the pandemic disease; the timing of brin-
ging new oil and gas fields on stream; management’s ability in carrying out industrial plans and in succeeding in commercial transactions;
future levels of industry product supply; demand and oil and natural gas pricing; operational problems; general macroeconomic conditions;
political stability and economic growth in relevant areas of the world; changes in laws and governmental regulations; development and use
of new technology; changes in public expectations and other changes in business conditions; the actions of competitors. “Eni” means the
parent company Eni SpA and its consolidated subsidiaries.
Contents
1. MANAGEMENT REPORT
Activities
Business model
Responsible and sustainable approach
Letter to shareholders
Eni at a glance
Stakeholders engagement activities
Strategy
Integrated Risk Management
Governance
Operating review
Natural Resources
Exploration & Production
Global Gas & LNG Portfolio
Energy Evolution
Refining & Marketing and Chemicals
Plenitude & Power
Environmental activities
Financial review and other information
Financial review
Risk factors and uncertainties
Outlook
Consolidated disclosure of non-financial information (NFI)
Other information
Glossary
2. CONSOLIDATED FINANCIAL STATEMENTS
3. ANNEX
1
2
4
6
8
16
20
22
28
34
44
46
72
76
78
86
92
96
122
147
148
200
201
204
346
Activities
Eni is a global energy company with a high technological content, engaged in the entire
value chain: from the exploration, development and extraction of oil and natural gas, to the
generation of electricity from cogeneration and renewable sources, traditional and bio refining
and chemical, and the development of circular economy processes. Eni extends its reach to
end markets, marketing gas, power and products to local markets and to retail and business
customers also offering services of energy efficiency and sustainable mobility. Both CO2
capture and storage and Natural Climate Solutions initiatives will be implemented to absorb
residual emissions.
Consolidated expertise, technologies and geographical distribution of assets are Eni
levers to strengthen its presence along the value chain.
Along this path, Eni is committed to become a leading company in the production and sale
of decarbonized energy products, increasingly customer-oriented. Decarbonization will be
achieved through the implementation and strengthening existing technologies and activities
such as:
Efficiency and digitalization in operations and customer services;
Renewables through increased capacity and integration with the retail business;
Biorefineries with an increasing input of raw material from waste and from an integrated
agribio-feedstock production chain not in competition with food production;
Circular economy with increased production of biomethane, use of waste products and
recycling of end products;
Blue and green hydrogen to power highly energy-intensive industrial activities and
sustainable mobility;
Natural or artificial carbon capture to absorb residual emissions through Natural Climate
Solutions, including REDD+ forest conservation initiatives and CCS projects.
Gas will be an important support to intermittent sources in the energy transition.
1
1
5
6
8
11
8
18
AMERICA
EUROPE
7
COUNTRIES
3
0
7
14
26
COUNTRIES
2
9
9
15
AFRICA
ASIA AND OCEANIA
14
COUNTRIES
22
COUNTRIES
EXPLORATION
& PRODUCTION
GLOBAL GAS
& LNG PORTFOLIO
REFINING & MARKETING
AND CHEMICALS
PLENITUDE
& POWER
beyond
32,000
our employees
operating in
69
Countries
ENI'S ACTIVITIES
IN THE WORLD
42
exploration
& production
24
global gas
& lng portfolio
40
refining & marketing
and chemicals
11
plenitude
& power
Eni Annual Report 2021
3
EXPLORATION AND DEVELOPMENT
DEVELOPMENT OF
AGROBIO-FEEDSTOCK
SUPPLY CHAIN
PRODUCTION FROM
RENEWABLE SOURCES
OIL & GAS PRODUCTION
PURCHASE
OF GAS FROM
THIRD PARTIES
PURCHASE OF BIO AND
RENEWABLE RAW MATERIALS,
WASTE AND RESIDUES
TRANSMISSION
NETWORK
TRADING
& SHIPPING
CO2
CAPTURE, STORAGE
AND USE OF CO2
AND REDD+ PROJECTS
ELECTRICITY
GENERATION
TRADITIONAL AND
BIOREFINING
AND PETROCHEMICALS
REMEDIATION,
WATER & WASTE
INTO DEVELOPMENT
I
N
O
T
A
M
R
O
F
S
N
A
R
T
M
R
O
F
T
A
L
P
S
T
C
U
D
O
R
P
I
S
E
C
V
R
E
S
ELECTRICITY
OIL & GAS
TRADITIONAL
AND BIOCHEMICAL
PRODUCTS
LUBRICANTS
FUEL
BIOFUEL
PHOTOVOLTAIC
ENERGY
EFFICIENCY
E-MOBILITY
SUSTAINABLE
MOBILITY
SERVICES
FOOD
HOST
COUNTRIES
BUSINESS
MARKETS
RETAIL
MARKETS
MARKETS
Management report | Consolidated financial statements | Annex Business Model
Eni business model is aimed at the creation of value for all stakeholders
through a strong presence along the entire value chain of energy. Eni aims
to contribute, directly or indirectly, to the achievement of the Sustainable
Development Goals (SDGs) of the United Nations 2030 Agenda, supporting
a just energy transition, which responds with concrete and economically
sustainable solutions to the challenges of combating climate change and
giving access to energy in an efficient and sustainable way, for all.
Eni organically combines its business plan with the principles of environmental
and social sustainability, extending its range of action along three pillars:
1. Eni business is constantly focused on operational excellence. This
translates into an ongoing commitment to valuing people, safeguarding
both the health and safety of people and asset integrity, protecting
the environment, integrity and respect for human rights, resilience and
diversification of activities and ensuring sound financial discipline. These
elements allow the company to seize the opportunities related to the
possible evolutions of the energy market and to continue on the path of
transformation.
2. Eni’s business model envisages a decarbonization path towards carbon
neutrality by 2050 based on an approach oriented to emissions generated
throughout the life cycle of energy products and on a set of actions that
will lead to the total decarbonization of processes and products by 2050.
This path, achieved through existing technologies, will allow Eni to totally
reduce its carbon footprint, both in terms of net emissions and in terms of
net carbon intensity.
3. The third guideline refers to Alliances for the promotion of development
through the enhancement of the resources of the Countries where it
operates, promoting access to electricity and promoting Local Development
Programmes (LDPs) with a broad portfolio of initiatives in favour of
communities. This distinctive approach, referred to as Dual Flag, is based
on collaborations with other internationally recognized players in order to
identify the needs of communities in line with the National Development
Plans and the United Nations 2030 Agenda. Eni is also committed to
creating job opportunities and transferring its know-how and expertise to
its local partners.
Eni’s business model is developed along these three pillars by leveraging
internal expertise, the development and application of innovative technologies
and the digitalization process.
A fundamental element of the business model is the Corporate Governance
system, inspired by the principles of transparency and integrity, outlined further
in the “Governance” section.
Value creation
for stakeholders
OPERATIONAL
EXCELLENCE
CARBON
NEUTRALITY
BY 2050
ALLIANCES FOR
DEVELOPMENT
Competences,
technological innovation
and digitalization
Eni Annual Report 2021
5
VALUE CREATION FOR STAKEHOLDERS
Through an integrated presence all along the energy value chain
OPERATIONAL
EXCELLENCE
CARBON NEUTRALITY
BY 2050
ALLIANCES
FOR DEVELOPMENT
Health Safety and Environment
Human Rights & Integrity
Resilience and Diversification
Capital discipline
TRANSFORMATION
AND PORTFOLIO
FLEXIBILITY
Life cycle GHG emissions
approach
(Scope 1, 2 and 3)
Set of concrete actions for the entire
decarbonization of processes
and products
INTERMEDIATE OBJECTIVES
OF NET REDUCTION
IN ABSOLUTE TERMS AND
OF EMISSION INTENSITY
Dual Flag approach
Public-private partnerships
Job creation
and know-how transfer
LOCAL DEVELOPMENT
PROGRAMS IN ACCORDANCE
WITH THE UN 2030 AGENDA
COMPETENCES
TECHNOLOGICAL INNOVATION
AND DIGITALIZATION
Management report | Consolidated financial statements | Annex
Responsible
and Sustainable Approach
COMMITMENTS
MAIN RESULTS 2021
MAIN TARGETS
CARBON
NEUTRALITY
BY 2050
COMBAT
CLIMATE
CHANGE
Eni has defined a medium-long term plan to take full advantage of
the opportunities offered by the energy transition and progressively
reduce the carbon footprint of its activities, committing to achieve total
decarbonization of all its products and processes by 2050.
SDGs: 7 9 12 13 15 17
-25% GHG emission intensity index UPS vs. 2014
-31% volumes of hydrocarbons sent for routine flaring vs. 2014
-92% UPS fugitive methane emissions vs. 2014 (target achieved)
-26% UPS Net Carbon Footprint vs. 2018
-10% Net GHG Lifecycle Emissions vs. 2018
-2% Net Carbon Intensity vs. 2018
-43% GHG emission intensity index upstream in 2025 vs. 2014
Zero routine flaring in 2025
-80% UPS fugitive methane emissions in 2025 vs. 2014
Net Zero Carbon Footprint UPS in 2030 and Eni in 2035
Net Zero GHG Lifecycle Emissions and Carbon Intensity
in 2050
PEOPLE
HEALTH
SAFETY
Eni is committed to supporting the “Just Transition” process by
consolidating and developing skills, enhancing every (professional and
non-professional) dimension of its people and recognising the values of
diversity and inclusion of all diversities.
SDGs: 3 4 5 8 10
31,888 employees in service at 31 December (reported +3.6% vs. 2020)
+1.6 percentage point increase in women hired (26.2% in 2021)
~1.04 mln hours of training (-0,3% compared to 2020)
1,500 professional profiles mapped
Eni considers the protection of the health of its people, families and
communities in the Countries where it operates to be a fundamental
requirement and promotes their physical, psychological and social well-being.
SDGs: 2 3 6 8 17
379,481 health services provided
158,784 registrations to health promotion initiatives
11 agreements signed with local communities, 8 of which for health crisis
management
Increase by 3 percentage points vs. 2020 of women
employees by 2030
increase in the replacement rate with target >1 to 2025
age diversity: +5 p.p. vs. 2021 of the population under 30
by 2025
+20% hours of training in 2025 vs. 2021
Digital initiatives for monitoring and improving the
healthiness of indoor working environments
Improving access to community well-being and health
Development of initiatives to promote correct lifestyles
for employees
Eni considers workplace safety an essential value to be shared among
employees, contractors and local stakeholders and it is committed to
reduce incidents down to zero and to preserve assets integrity.
SDGs: 3 8
TRIR= 0.34; LTIF(a) = 0.23; FATALITY INDEX = 0
114 real emergency drills carried out with the involvement of personnel and
TRIR < 0.40; 0 fatal accidents
operational vehicles
Over 60 courses on behavioural safety delivered (> 15,000 hours)
Extension of digital initiatives in the field of safety to
contracting companies and digitalization of HSE processes
Process Safety: awareness raised for over 14,000 employees and 10,000
Focus on behavioural safety and the human factor
contractors
OPERATIONAL
EXCELLENCE
RESPECT FOR THE
ENVIRONMENT
Eni promotes the efficient management of natural resources and the
safeguard of protected and relevant to biodiversity areas through actions
aimed at improving energy efficiency and the transition to a circular
economy and identifying potential impacts and mitigation actions.
SDG: 3 6 9 11 12 14 15
91% reuse of fresh water
+10% fresh water withdrawn vs. 2020
+19% waste generated from production activities vs. 2020
-35% barrels spilled from operational oil spills vs. 2020
Extension of biodiversity mapping to renewable energy plants
HUMAN RIGHTS
Eni is committed to respecting Human Rights (HRs) in its activities
and to promoting their respect with partners and stakeholders. This
commitment is based on the dignity of every human being and the
responsibility of businesses to contribute to the well-being of individuals
and local communities.
SDGs: 1 2 3 4 6 8 10 16 17
SUPPLIERS
Develop a sustainable supply chain, generating and transferring value to
all stakeholders through the Sustainable Procurement Programme.
SDGs: 3 5 7 8 9 10 12 13 17
TRANSPARENCY,
ANTI-CORRUPTION
AND TAX STRATEGY
Eni carries out its business activities with loyalty, fairness, transparency,
honesty, integrity and in compliance with the laws.
SDGs: 16 17
Commitment to minimise fresh water withdrawals in
areas under water stress
Reuse of fresh water in line with the trend of the last 5
years
Re-injected production water in line with the trend of
the last 5 years net of the operating structure
Development of new technologies for waste recovery
and implementation on an industrial scale
Completion of the three-year business and HRs training
programme
Continue in the process of developing specific analysis
on 100% of new projects with HRs risks, including
agro-business projects
Keep 100% of new suppliers assessed according to
social criteria
Assessment of the sustainable development path for
all Eni strategic suppliers by 2025
23,893 hours of training provided in the year on HRs
100% of the professional procurement family trained on HRs
Reinforced clauses on HRs included since May 2021 in all contracts with
suppliers in the tender documentation and in all contractual standards
Processing and roll out of the work-related HRs Due Diligence Model
98% of security contracts with HRs clauses
Subscription of 2,500 qualified Eni suppliers to Open-es, in a path of growth
~1,000 suppliers invited to cyber-security training and self assessment
Application of sustainability safeguards in procurement procedures from April
Launch of the Sustainable Energy Basket Bond
Sustainability requirements in procurement procedures for ~ €2.5 bln
9 Countries where Eni supports EITI(b) Multi stakeholder Groups at local level
Provision to all employees of the new course “Code
20 internal audits conducted with anti-corruption checks
ISO 37001:2016 surveillance audit passed
of Ethics, Anti-Corruption and Corporate Social
Responsibility”
Anti-Corruption and Anti-Money Laundering module introduced to the new
ISO 37001:2016 certification maintained
e-learning course “Code of Ethics, Anti-Corruption and Corporate Responsibility”
Continuous improvement of the Anti-Corruption
Update of the Anti-Corruption MSG
Compliance Program
ALLIANCES FOR
DEVELOPMENT
COOPERATION
MODEL
The cooperation model integrated into the business model is a distinctive
feature of Eni, which aims to support Countries in achieving their
development goals.
SDGs: 1 2 3 4 5 6 7 8 9 10 13 15 17
€105.3 mln invested in local development
By 2025 ensure access: to energy for ~290K people; to
Cooperation agreements signed including UNDP (United Nations Development
Programme), AICS (Italian Agency for Cooperation and Development) and civil
education for ~72K students; to water services for ~95K
people; to economic diversification initiatives for ~17K(c)
society organizations
people; to health services for ~296K people
CROSS-CUTTING
THEMES
TECHNOLOGICAL
INNOVATION
For Eni, research, development and rapid implementation of new technologies
are an important strategic lever to drive business transformation.
SDGs: 7 9 12 13 17
€177 million invested in research and development
30 new applications for first patent filings, of which 11 related
Guarantee that 70% of investment in research
and development is spent on decarbonization
to renewable sources
issues
(a) Total Recordable Injury Rate and Lost Time Injury Frequency Rate.
(b) Extractive Industries Transparency Initiative, supported by Eni since 2005.
(c) The 17,000 beneficiaries include only people trained and/or supported for the start-up or strengthening of specific economic activities, not beneficiaries for infrastructure construction (roads, civil buildings, etc.)
or for new agro-business activities underway. In some cases beneficiaries are not trained but receive inputs, funds or other to start economic activities.
Eni Annual Report 2021
Eni’s Mission clearly expresses the commitment of Eni to play a decisive role in the “Just Transition” process to achieve the
goal of net-zero emissions by 2050, with a view to sharing social and economic benefits with workers, the supply chain,
communities and customers in an inclusive, transparent and socially equitable manner, contributing to the achievement of
the Sustainable Development Goals (SDGs).
7
COMMITMENTS
MAIN RESULTS 2021
MAIN TARGETS
CARBON
NEUTRALITY
BY 2050
COMBAT
CLIMATE
CHANGE
Eni has defined a medium-long term plan to take full advantage of
the opportunities offered by the energy transition and progressively
reduce the carbon footprint of its activities, committing to achieve total
decarbonization of all its products and processes by 2050.
SDGs: 7 9 12 13 15 17
-25% GHG emission intensity index UPS vs. 2014
-31% volumes of hydrocarbons sent for routine flaring vs. 2014
-92% UPS fugitive methane emissions vs. 2014 (target achieved)
-26% UPS Net Carbon Footprint vs. 2018
-10% Net GHG Lifecycle Emissions vs. 2018
-2% Net Carbon Intensity vs. 2018
-43% GHG emission intensity index upstream in 2025 vs. 2014
Zero routine flaring in 2025
-80% UPS fugitive methane emissions in 2025 vs. 2014
Net Zero Carbon Footprint UPS in 2030 and Eni in 2035
Net Zero GHG Lifecycle Emissions and Carbon Intensity
in 2050
PEOPLE
HEALTH
SAFETY
Eni is committed to supporting the “Just Transition” process by
consolidating and developing skills, enhancing every (professional and
non-professional) dimension of its people and recognising the values of
diversity and inclusion of all diversities.
SDGs: 3 4 5 8 10
31,888 employees in service at 31 December (reported +3.6% vs. 2020)
+1.6 percentage point increase in women hired (26.2% in 2021)
~1.04 mln hours of training (-0,3% compared to 2020)
1,500 professional profiles mapped
Eni considers the protection of the health of its people, families and
communities in the Countries where it operates to be a fundamental
requirement and promotes their physical, psychological and social well-being.
SDGs: 2 3 6 8 17
379,481 health services provided
158,784 registrations to health promotion initiatives
11 agreements signed with local communities, 8 of which for health crisis
management
Increase by 3 percentage points vs. 2020 of women
employees by 2030
increase in the replacement rate with target >1 to 2025
age diversity: +5 p.p. vs. 2021 of the population under 30
by 2025
+20% hours of training in 2025 vs. 2021
Digital initiatives for monitoring and improving the
healthiness of indoor working environments
Improving access to community well-being and health
Development of initiatives to promote correct lifestyles
for employees
Eni considers workplace safety an essential value to be shared among
employees, contractors and local stakeholders and it is committed to
reduce incidents down to zero and to preserve assets integrity.
SDGs: 3 8
TRIR= 0.34; LTIF(a) = 0.23; FATALITY INDEX = 0
114 real emergency drills carried out with the involvement of personnel and
operational vehicles
TRIR < 0.40; 0 fatal accidents
Extension of digital initiatives in the field of safety to
Over 60 courses on behavioural safety delivered (> 15,000 hours)
Process Safety: awareness raised for over 14,000 employees and 10,000
contracting companies and digitalization of HSE processes
Focus on behavioural safety and the human factor
contractors
OPERATIONAL
EXCELLENCE
RESPECT FOR THE
ENVIRONMENT
Eni promotes the efficient management of natural resources and the
safeguard of protected and relevant to biodiversity areas through actions
aimed at improving energy efficiency and the transition to a circular
economy and identifying potential impacts and mitigation actions.
SDG: 3 6 9 11 12 14 15
91% reuse of fresh water
+10% fresh water withdrawn vs. 2020
+19% waste generated from production activities vs. 2020
-35% barrels spilled from operational oil spills vs. 2020
Extension of biodiversity mapping to renewable energy plants
23,893 hours of training provided in the year on HRs
100% of the professional procurement family trained on HRs
Reinforced clauses on HRs included since May 2021 in all contracts with
suppliers in the tender documentation and in all contractual standards
Processing and roll out of the work-related HRs Due Diligence Model
98% of security contracts with HRs clauses
Subscription of 2,500 qualified Eni suppliers to Open-es, in a path of growth
~1,000 suppliers invited to cyber-security training and self assessment
Application of sustainability safeguards in procurement procedures from April
Launch of the Sustainable Energy Basket Bond
Sustainability requirements in procurement procedures for ~ €2.5 bln
Commitment to minimise fresh water withdrawals in
areas under water stress
Reuse of fresh water in line with the trend of the last 5
years
Re-injected production water in line with the trend of
the last 5 years net of the operating structure
Development of new technologies for waste recovery
and implementation on an industrial scale
Completion of the three-year business and HRs training
programme
Continue in the process of developing specific analysis
on 100% of new projects with HRs risks, including
agro-business projects
Keep 100% of new suppliers assessed according to
social criteria
Assessment of the sustainable development path for
all Eni strategic suppliers by 2025
9 Countries where Eni supports EITI(b) Multi stakeholder Groups at local level
20 internal audits conducted with anti-corruption checks
ISO 37001:2016 surveillance audit passed
Anti-Corruption and Anti-Money Laundering module introduced to the new
e-learning course “Code of Ethics, Anti-Corruption and Corporate Responsibility”
Provision to all employees of the new course “Code
of Ethics, Anti-Corruption and Corporate Social
Responsibility”
ISO 37001:2016 certification maintained
Continuous improvement of the Anti-Corruption
Update of the Anti-Corruption MSG
Compliance Program
ALLIANCES FOR
DEVELOPMENT
COOPERATION
feature of Eni, which aims to support Countries in achieving their
The cooperation model integrated into the business model is a distinctive
MODEL
development goals.
SDGs: 1 2 3 4 5 6 7 8 9 10 13 15 17
€105.3 mln invested in local development
Cooperation agreements signed including UNDP (United Nations Development
Programme), AICS (Italian Agency for Cooperation and Development) and civil
society organizations
By 2025 ensure access: to energy for ~290K people; to
education for ~72K students; to water services for ~95K
people; to economic diversification initiatives for ~17K(c)
people; to health services for ~296K people
CROSS-CUTTING
THEMES
TECHNOLOGICAL
INNOVATION
SDGs: 7 9 12 13 17
For Eni, research, development and rapid implementation of new technologies
are an important strategic lever to drive business transformation.
€177 million invested in research and development
30 new applications for first patent filings, of which 11 related
to renewable sources
Guarantee that 70% of investment in research
and development is spent on decarbonization
issues
(a) Total Recordable Injury Rate and Lost Time Injury Frequency Rate.
(b) Extractive Industries Transparency Initiative, supported by Eni since 2005.
(c) The 17,000 beneficiaries include only people trained and/or supported for the start-up or strengthening of specific economic activities, not beneficiaries for infrastructure construction (roads, civil buildings, etc.)
or for new agro-business activities underway. In some cases beneficiaries are not trained but receive inputs, funds or other to start economic activities.
HUMAN RIGHTS
Eni is committed to respecting Human Rights (HRs) in its activities
and to promoting their respect with partners and stakeholders. This
commitment is based on the dignity of every human being and the
responsibility of businesses to contribute to the well-being of individuals
and local communities.
SDGs: 1 2 3 4 6 8 10 16 17
SUPPLIERS
all stakeholders through the Sustainable Procurement Programme.
Develop a sustainable supply chain, generating and transferring value to
SDGs: 3 5 7 8 9 10 12 13 17
TRANSPARENCY,
Eni carries out its business activities with loyalty, fairness, transparency,
ANTI-CORRUPTION
honesty, integrity and in compliance with the laws.
AND TAX STRATEGY
SDGs: 16 17
Management report | Consolidated financial statements | Annex
Letter to shareholders
Dear Shareholders,
Eni is following with great attention and deep condolences the dramatic events of the conflict
in Ukraine and participates in the pain of people involved. Since 2014, when the international
sanctions regime against Russia was applied, we have implemented a policy of progressive
disengagement from upstream activities in the Country. Our current activities in Russia are
immaterial, limited to the interest in the Blue Stream pipeline for the export of Russian gas to
Turkey, of which we announced the divestment. In a context characterized by such magnitude
geopolitical crisis and potential huge “disruptions” in the raw material markets, we are making
great efforts with institutions and our partners to ensure the security of energy supplies to
Italy and our customers around the world in order to guarantee the normal course of civil life
and the economy.
In recent months, international gas supplies were regularly, thanks also to our diversified
portfolio; in any case, our company is preparing to manage possible extreme scenarios,
leveraging on the flexibility of gas supplies in our portfolio, on the availability of infrastructures
and important volumes of LNG, on the long-term relations with producing Countries
overlooking the Mediterranean area.
Looking at our results and what happened in 2021, our Company reacted quickly and
decisively to the deep social and economic crisis caused by COVID-19 pandemic, accelerating
the transformation of its business model for the leadership in the energy transition and pursue
the carbon neutrality strategy by 2050.
Strong attention has been paid to safeguarding capital and financial solidity through discipline
and redefinition of priorities in capital allocation.
With the mitigation of the health emergency followed by COVID-19 pandemic, the strong
macroeconomic restart of 2021, progressively extended from Asia to Western countries,
has driven the recovery of global oil & gas demand, rebounded synchronously in all the
geographies.
This generated tensions on unresponsive supply due to lower investments in the upstream
sector in the latest years, reproposing in all the critical issue of energy security.
In this framework, hydrocarbon prices reported a wide shoot with natural gas prices at an all-
time high and at four-fold increases compared to 2020, while Brent prices increased by 70%.
Leveraging on selective capex spending, cost reduction and portfolio optimizations, Eni has
been able to seize the strengthening of the scenario, reporting excellent operational and
financial results.
Eni reported an adjusted operating profit of €9.7 billion and an adjusted net profit of €4.3
billion. The robust adjusted cash generation of €12.7 billion easily funded organic capex
(€5.8 billion) to maintain the production plateau and to boost renewable business growth,
generating an organic free cash flow of €7.6 billion. Generated cash flows funded capex
focused on business’ transition (€2.1 billion), dividends payment and buyback program
(overall €2.8 billion) which returned to pre-pandemic levels and reduced net borrowings to €9
billion and leverage to 0.20 compared to 0.31 as of December 31, 2020.
Eni will continue to focus on financial discipline to limit cash neutrality currently at a Brent
of 40 $/bbl to cover organic capex and dividends, leveraging on technology to accelerate
decarbonisation and exploit value from the portfolio restructuring, considering the imminent
IPO of Plenitude’s retail & renewable business.
The upstream portfolio is confirmed to be an important lever of value creation for the energy
Lucia Calvosa
Presidente
Claudio Descalzi
Chief Executive Officer
and General Manager
Eni Annual Report 2021
Letter to shareholders
9
transition, as demonstrated, on the one hand, by the success of Vår Energi listing on the Norwegian stock
exchange, the largest IPO of an O&G company in over a decade, and, on the other hand, the set up together
with BP of a strategic vehicle in Angola, combining the operations of the two partners.
The public offering of Plenitude shares, of which we will retain control, is one of the strategic steps towards
zero Scope 3 emissions associated to our retail customers. Plenitude will be structured as a financially
autonomous entity to ensure a more efficient capital structure and will leverage a unique business model,
resulting from the synergic combination of the retail customer portfolio, renewables and charging points
for electric vehicles to accelerate the growth of green capacity by reducing its risk profile and increasing
the market share. The new entity laid the foundation on a solid base of 10 million customers and over 2
GW of renewable capacity, installed and under construction.
In 2021, we significantly progressed in our path to decarbonization thanks to our pragmatic approach in
addressing emissions reduction by enhancing existing technologies, assets and skills to offer immediately
applicable industrial and economic solutions, while investing in “break-through” technologies able to
change the energy paradigm in the long-term.
Together with the Commonwealth Fusion System, a spin-out company of MIT of which we are the
main partner, we achieved a breakthrough result in testing superconductors for the confinement of
the plasma from fusion, a technology that could represent a game changer in the decarbonization
path, being potentially able to produce huge amounts of energy, safely, virtually inexhaustible and zero
emissions. This achievement paves the way for the collection of net energy in a demonstration plant
that we aim to build by 2025.
In the United Kingdom, the Eni-led HyNet integrated project for the transport, capture and storage of CO2,
operated by a consortium of companies, has been granted access to priority public funding by the British
authorities, as part of the Country’s decarbonization plans. The start of activities is expected by 2025,
allowing the access to a tariff-regulated business model.
The development of biofuels is one of the drivers of Eni’s energy transition path based on the circular
economy. This target leverages on our two distinctive biorefineries in Gela and Venice, characterized by
cutting-edge proprietary technologies and steady product and process improvements.
In 2021, started the production of sustainable aviation fuels “SAF” (sustainable aviation fuels) from
“UCO” raw materials (waste oils and other waste) not in competition with the food chain, by applying the
proprietary technologies of traditional refining.
The production of SAF is expected to ramp-up with about 10 thousand tons/year through co-feeding of the
oil-loaded plants with UCO, until the start-up in 2024 of the Eni Biojet project at the Gela biorefinery. This
latter will allow to sale additional 150 thousand tons/year of SAF, being entirely produced from organic raw
materials, able to meet the potential obligation of the Italian market for 2025.
We confirm our commitment for palm-free biofuels by 2023, thanks to our continuous process innovations
and the entry into operation of the BTU unit at Gela which will able to significantly expand the flexibility of
feedstock processing chain. In 2021 we reduced by a third the incidence of palm oil.
In partnership with several African countries we operate in Angola, Benin, Congo, Ivory Coast, Mozambique,
Kenya and Ruanda, we are progressing projects based on biofuels to decarbonize the local energy mix,
through the set-up of integrated agro-biofeedstock supply chains to supply renewable feedstock to Eni bio-
refineries, without impacting the local food chain and promoting circular economy through the recovery
and valorization of non strategic area. Furthermore these agreements will allow to create new jobs and to
Management report | Consolidated financial statements | Annex 10
foster local development. In addition, these projects will be supported by Eni research, also by leveraging
on the agreement with the Bonifiche Ferraresi Group, aimed at establishing an equal joint venture for
the development of agricultural research and experimentation projects of oil plant seeds to be used as
feedstock in Eni’s biorefineries.
The sustainability of industrial operations is combined with financial sustainability.
In 2021 we adopted a set of guidelines on sustainable funding on the capital market (Sustainability-Linked
Financing Framework), the first in the world in the energy sector, providing for future financing contracts
and derivative instruments a reward mechanism, where possible, according to the achievement of one or
more decarbonization targets.
In application of this framework, in May 2021 we issued the first sustainability-linked bond in our sector,
worth €1 billion at a very competitive cost, linked to the achievement of Net Carbon Footprint Upstream
objectives (Scope 1 and 2) and the renewable installed capacity. The success of this operation reflects the
credibility of our emission targets and our ability to create value through the energy transition.
The progress of our decarbonisation strategy and the excellence of Eni’s sustainable performance are
recognised and appreciated by financial markets and ESG investors.
Eni has been included among the top ten companies in Euronext’s new MIB ESG index and has been
confirmed as a leader in the main ESG ratings and specialist indices (MSCI, Sustainalytics, V.E, FTSE4Good
Developed Index, World Benchmark Alliance), obtaining the Prime Status from the ISS ESG rating. Excellent
results were also achieved in climate-focused indices (Climate Action 100+ Net Zero Benchmark, Carbon
Tracker, Transition Pathway Initiative). Eni has been included for the first time in the Bloomberg’s Gender-
Equality Index (GEI), a market capitalization-weighted index monitoring the performance of listed
companies committed to transparency in the reporting of gender data. The index, which includes 418
companies in 45 countries and regions, measures gender equality based on five pillars: female leadership
and talent development, equal pay and gender pay, inclusive culture, anti-sexual harassment policies, and
pro-women brands.
Eni’s excellent 2021 results were driven by the robust performance of E&P segment, which reported an
EBIT of €9.3 billion, six times that of 2020, with a production of 1.68 million boe/d, in line with our plans.
Exploration activity is a driver of growth and value creation for Eni. In 2021, we discovered 700 million boe
of new resources at a competitive cost of 1.3 $/boe. The main success of the year was the discovery of
the giant Baleine in the deep offshore of the Ivory Coast, with a mineral potential of over 2 billion barrels of
oil in place and about 2.4 trillion cubic feet (TCF) of associated gas.
It is set to be developed with a phased fast-track approach and will be the first development in Africa at net
zero emissions (Scope 1 and 2). The importance of this discovery underpins any opportunities for early
monetization through the application of the dual-exploration model. Exploration in areas close to producing
assets (ILX – Infrastructure Led Exploration) continued to generate excellent returns in particular in Angola
in Block 15/06 with a sequence of satellite discoveries, in 2021 those of Cabaca N and Cuica, able to
maintain the plateau of the FPSO N’Goma operating the area, extending the useful life and cash flows.
Other important proximity discoveries were those of Sayulita in Mexico’s offshore Block 10, which boosts
the area’s commercial prospects, Eban, located offshore Ghana, CTP 4 block near the Sankofa production
hub, and Maha’s appraisal offshore Indonesia.
Our development phase creates value thanks to the integration with the exploration phase to maximize
synergies with existing assets, the parallelization of activities and the fast-track approach including the
start-up in early production and the subsequent ramp-up to reduce financial exposure. Leveraging this
model, we will develop through the “fast track” approach, the Baleine field expected to start-up in 2023,
while in 2021 the Cabaca N/Cuica discoveries in Angola, Merakes in Indonesia, Berkine in Algeria and
Mahani in UAE were started up.
Eni’s significant progress in reducing the time-to-market of reserves is underpinned by our Coral South
flagship project, approved in 2017 just thirty-six months after the finalization of the exploratory campaign
Eni Annual Report 2021 11
and now close to completion with the launch of the FLNG (Floating Liquefied Natural Gas) unit, the first
floating LNG plant, whose construction started in 2018 is aligned to the time schedules and budgets,
despite the pandemic. The FLNG has reached the Rovuma Basin, off the coast of Mozambique, where
it will be connected to underwater production wells by the second half of 2022 for first gas. The project
will generate significant revenues for the country, and will create more than 800 new jobs during the
operational period.
We intend to exploit value from our upstream portfolio through the set up with selected partners of
autonomous corporate vehicles, with strategic value able to grow and generate returns for shareholders.
Vår Energi, the JV established in 2018 by Eni and HitecVision, the largest independent company in the E&P
sector in Norway records the validity and robustness of our model.
The JV has grown by about 30% since 2018, currently producing 245,000 boe and distributing a stable flow
of dividends to shareholders.
The IPO on the Oslo Stock Exchange in February 2022 allowed us to monetize part of that unexpressed
value. On the basis of the Vår Energi model we are progressing terms for establishing a JV with BP in
Angola, which will combine the two partners’ assets and will become the top player in the Country.
The Global Gas/LNG portfolio “GGP” segment also recorded a record year with an EBIT of almost €600
million, against the backdrop of a very complex scenario characterized by a tight supply of gas at a global
level triggering unprecedented increases in spot prices at continental hubs, but with adverse trends as
highlighted by the reversal of the spreads between the price of Italian gas compared to European prices. In
this extreme volatile environment, the sector leveraged portfolio flexibilities and contractual renegotiations
that underpinned the excellent 2021 performance.
The set-up of a JV with a strategic partner such as Snam for the management of supply backbones from
Algeria is part of our strategy to exploit value from our asset portfolio by freeing up resources for the
energy transition.
The R&M business faced one of the most challenging refining scenarios in history with negative margins
throughout the year due to the delay in post-COVID recovery at key segments such as jet fuel and the
significant increase in CO2 costs. The good performance of the marketing activity and plants optimization
allowed us to achieve a substantial breakeven. Thanks to the acquisition of the Italian operator FRI-EL,
Eni entered the bioenergy sector and leveraging on the upgrading of the acquired assets, we expect to
produce biomethane.
The Chemical business, through Versalis, reported a solid performance with an EBIT of about €200 million
compared to a loss of the same amount in 2020, due to the increase in plant utilization rate granting
greater availability of product in a phase of strong recovery of the petrochemical cycle with periods of
tension on the supply side and very strong commodity margins.
We continued our strategy of repositioning the production mix reducing oil-linked petrochemicals by
increasing exposure to the specialty and green chemical segments. In this context, we acquired the control of
Finproject, consolidating our position in the field of applications of high-performance formulated polymers and
compounding, less subject to commodity fluctuations, and acquired technologies and plants of Ecoplastic, a
specialized company in the recovery chain of used plastics, with the aim of accelerating the growth of advanced
mechanical recycling and expanding the range of polymers for recycling Versalis Revive®.
In 2022 we will launch the restructuring of the Porto Marghera site with the conversion into a hub for
the production of plastics entirely obtained from recycled raw material. Proprietary technologies will play
a key role in accelerating the “green” conversion of Versalis by reducing dependence on oil feedstock;
among these, we focus on the chemical recycling of non-reusable plastics (HOOP technology), on the
enhancement of forest biomass for the production of bioethanol and biogas (PROESA technology) in
collaboration with qualified partners such as Saipem and BTS Biogas.
The Retail & Renewable segment managed by Plenitude achieved robust results with an Ebitda of €0.6
Management report | Consolidated financial statements | Annex 12
billion (+25% vs. 2020), a customer base of more than 10 million POD (+4% vs. December 31, 2020) and
a renewable capacity installed/under construction of over 2 GW, well above the initial guidance for 2021,
thanks to a number of targeted acquisitions of wind/PV plants in operation/under construction in Spain,
France and Italy, also exploiting synergies deriving from our retail business in these Countries, the expansion
in the USA and from organic growth. The acquired projects portfolio and the participation in all three A/B/C
phases of the Dogger Bank offshore wind project in the North Sea allow us to revise upwards our installed
capacity targets by 2025. Plenitude’s products and services offer has been enriched with the entry into the
segment of charging points for electric vehicles through the acquisition of BeCharge aiming at developing a
network of around 30 thousand charging points by 2025. The partnership between Eni, BeCharge and Enel X
for the interoperability of their respective charging networks will make our sustainable mobility strategy even
more solid, giving all customers the opportunity to access the service in a simple and economical way, also
including customers of the “eni Live Stations”. In our service stations we intend to install by 2050 about 1,000
fast/ultra-fast charging points to make them more and more “mobility” point”.
Strategy and 2022-2025 industrial plan
Over the next four years, we expect Brent prices to be supported by current market dynamics, with demand
recovering to pre-pandemic levels by 2022 and supply limited by production issues and financial discipline
of international oil and gas companies. Eni forecasts 80 $/bbl in 2022, 75 $/bbl in 2023 and over on a
stable price at 70 $/bbl.
In the long-term, crude oil price is expected to grow in line with inflation until 2035, and then decline due to
the progression of the energy transition. This scenario is subject to continuous monitoring in light of the
unpredictable evolution of the crisis between Russia and Ukraine.
For the next four years we expect a capex plan of €28 billion (on average about €7 billion/year) that
will be implemented according to our parameters of financial and operational discipline, in compliance
with minimum profitability thresholds, ensuring the consistency of emission profiles with long-term
decarbonization objectives and full funding through the operating cash flow. Organic free cash flow and
proceeds from the divestment plan, mainly the IPO of Plenitude and Vår Energi, will allow us to maintain a
robust capital structure and ensure competitive returns for our shareholders.
Our capital allocation processes take a further step towards the Paris objectives with a 25% share of the
capex plan, compared to 20% of the previous plan, to strengthen renewable generation capacity, grow the
circular economy of biofuels and green chemistry, “scale-up” of new energy solutions and services, as well
as energy efficiency and decarbonize legacy assets.
We confirm the role of our two business groups in implementing distinct but synergic paths of execution
of Eni’s net zero emission strategy by 2050: Natural Resources business groups is committed to maximize
value and decarbonize O&G assets; Energy Evolution business groups is engaged in the development of
renewables and circular economy businesses and in the industrial transformation of legacy assets.
We expect to further improve our emission reduction targets. We are committing to go even further by
reaching -35% by 2030 and -80% by 2040 in our net Absolute GHG Emissions (Scope 1+2+3) target,
compared to -25% and -65% reduction set respectively in 2030 and 2040 in our previous strategic plan.
Eni’s Net Zero emission (Scope 1+2) has been set at 2035, anticipated of 5 years (compared to the previous
2040) expecting a new intermediate target of -40% vs. 2018 by 2025.
In line with these guidelines, the E&P segment will be managed to maximize operating cash flow
while respecting financial discipline, to generate resources needed to fund the growth of the transition
businesses and to remunerate shareholders, while developing solutions for capture and storage of CO2
and Natural Climate Solutions initiatives to accelerate the achievement of the net zero target (Scope 1+2)
of the business.
Exploration is a strategic pillar of Eni’s decarbonization path. It plays a dual role: replacing produced
Eni Annual Report 2021 13
reserves and granting energy supplies that Eni will need in the transition phase and aligning our portfolio
of resources to the production mix target and to medium/long-term emission profiles consistent with our
net zero target by 2050.
The initiatives will be very selective to comply with the constraints of capital discipline with an average
annual spending of about €0.4 billion of which 90% related to near-field initiatives with fast economic
reward, while the remaining 10% allocated to selected high risk/high reward themes with a high share of
operatorship to be monetized in case of significant successes through our dual exploration model.
Approximately €4 billion/year will be allocated to development activities. Hydrocarbon production is
expected to increase by 3% per year over the plan period, up to 1.89 million boe/d by 2025 thanks to the
contribution of the start-ups and ramp-ups planned in the four-year period. These increases added to the
contribution of exploration of proximity will ensure about 800 kboe/d of new production, leveraging also on
the optimizations to extend the useful life of fields and offset natural declines. In 2022, we plan the relevant
start-up of Coral South LNG in Mozambique, while in 2023 we expect the start-up of Baleine in Ivory Coast
and of the LNG project in Congo.
Our upstream decarbonization plan is going on: by 2025 it will reach 65% of net zero emissions (Scope 1
and 2) calculated on equity productions, set for 2030; confirmed the target of reducing emission intensity
from operated production by 43% from 2014 thanks to planned energy efficiency actions, the zeroing of
routine gas flaring by 2025 and operations optimizations. Furthermore, emissions offset will be reached
through initiatives in the field of Natural Climate Solutions, whose carbon credits are certified from leading
audit firms. On the basis of the contractual provisions of initiatives in progress, we estimate a progressive
growth in emission credits to about 11 million tons by 2025.
Referring to CO2 capture projects, in 2025 is expected the start-up of the HyNet cluster located in Liverpool
Bay in the UK, the completion of the testing phase at Ravenna hub in 2023 and the evaluation/feasibility
study of other storage hubs.
Leveraging on the synergies with our biorefining, we will develop on an industrial scale the agribusiness in
certain partners countries in Africa, to produce crops to be applied as feedstock for HVO in compliance with
the highest sustainability standards. Kenya and Congo are the countries in the start-up phase, where pilot
projects have been started up at the beginning of 2022 and where are expected subsequent extensions of
crops up to the production of over 170 thousand tons in 2025.
GGP, whose asset base will be simplified thanks to the partial divestment of entities managing the supply
backbones from Algeria. Thus, leveraging a de-risky portfolio by mitigating exposure to the TTF vs. PSV
spread (Northern European markets vs. Italy) due to the 2021 renegotiations and trading skills, generating
stable and sustained EBIT and a robust cash flow. The other driver of value creation will be the growth in
the LNG market following the increased equity availability (in Indonesia with the Merakes project and in
Nigeria with the launch of new capacity at Bonny plant) and the maximization of the utilization rate of the
Damietta equity plant, and targeting contracted volumes of over 15 MTPA of LNG.
Plenitude, leveraging on its financial and operational autonomy, will be one of the drivers of the Group’s
decarbonization path, reaching the net zero target emissions for its customers by 2040 thanks to the
supply of gas and power from 100% renewable sources, bio or carbon neutral (hydrogen) and offsetting
residual emissions with green certificates. The four-year plan foresees by 2025 over 11 million delivery
points compared to the current 10 million, a three-fold increase in installed capacity to over 6 GW compared
to 2022 and the expansion of the EV re-charging network up to around 30 thousand units by 2025. The
driver of this development will be the integration between the production of renewable power and retail
customers, in particular in the countries of co-presence, which will allow to maximize synergies with an
always competitive and progressively greener offer.
The R&M business has defined a plan for the development of biorefining and the efficiency/optimization
Management report | Consolidated financial statements | Annex 14
of traditional assets and the evolution of the network toward a sustainable mobility. Biorefining capacity
is expected to reach 2 million tonnes by 2025 thanks to the conversion of an extra-European traditional
refinery in joint with other partners and the upgrading of the Venice plant. Another driver of value will be the
conversion plan of acquired plants for the production of electricity from bioenergy into biomethane with
the aim of injecting 200 mcm into the grid by 2025.
The sustainable mobility project will redesign our service stations transforming them into mobility
hubs, combining traditional fuels with the offer for zero-emission vehicles: charging stations, innovative
hydrogen fuels, bio lng, 100% HVO and battery replacement services for electric city cars. The service
station will become a multi-service hub to respond to customer needs by leveraging partnerships with
qualified operators (e-commerce, food & beverage, parking, rent-a-car, merchandise, cards).
Versalis will continue its transformation strategy to become a leading, diversified and sustainable chemical
company, applying proprietary technologies for reconversion and growth. The traditional plant set up
will be optimized and more efficient; the Porto Marghera hub will be converted into a production hub for
mechanical recycling plastics thanks to the integration of Ecoplastic, as well as in an incubator of new
businesses with the construction of the hydrogen IPA plant.
The specialization of Versalis portfolio will allow us to benefit from the strong growth expected in important
segments for the energy transition (premium elastomers for EV, polyethylene grades for photovoltaics)
and will be enhanced by the solid positioning in compounding, thanks to the integration of Finproject that
we fully acquired last year.
Eni technologies will play a key role in supporting the decarbonisation process and business growth,
contributing to create new attackable markets. One of the main action plan, will be the development of
magnetic confinement fusion technology after the excellent results of 2021, with the aim of entering into
operation SPARC by 2025, the first fusion plant in the world that will demonstrate net energy production,
able to pave the way for the next commercial phase scheduled for the early 30s.
Other actions concern circular economy, with the launch of the HOOP plant for the chemical recycling of
otherwise non-reusable plastics, the conversion of the wet fraction of waste into energy products (waste-
to-fuels/chemicals/hydrogen), the application of the proprietary PROESA technology for the enhancement
of forest biomass through conversion into bioethanol or biogas and new renewable technologies, such as
wave-energy exploitation (ISWEC), CO2 capture through biofixation by algae (mineralisation) and potential
developments in the thermoelectric energy production with intrinsic capture of CO2. The R&D expenditure
plan is about €1 billion over the four-year period.
Overall, the 2022-2025 action plan foresees a Group with robust fundamentals and growing profitability,
thanks to the transformation strategy adopted to face the downturn which, on the one hand, increased the
resilience of traditional businesses and their cash generation, and, on the other hand, laid the foundations
for a phase of strong development of the transition business hinging on the integration of technologies, on
new business models and on the close collaboration with our stakeholders.
The audience of our stakeholders will benefit from the Company’s increasingly sustainable industrial
action thanks to the progressive reduction of emissions, attention to local content, respect for human
rights in the supply chain, the quality of our products/services and the continuous development programs
of our people based on the enhancement of everyone’s contribution and engagement.
Results expected in the next four years will make our carbon neutrality strategy to 2050 even more robust
thanks to the growing visibility of intermediate targets and milestones. Financial discipline and selective
spending, cost control and margin expansion initiatives will allow us to further contain cash neutrality and
gain significant operating surplus of cash under our conservative Brent assumptions, which will fund the
acceleration of green businesses growth, maintain strong balance sheet ratios and ensure competitive
shareholder returns.
Eni Annual Report 2021 15
In view of the scale and complexity of the events surrounding the crisis between Russia and Ukraine, the
immediate issue of energy security and supply stability is a crucial factor in the definition of strategies and
operational plans in the near future.
At the end of a two-year period characterized, first, by a global crisis, then by a strong macroeconomic
recovery, in an always challenging and uncertain context, the Company is stronger and more resilient, able
to play a leading role in the economy transition process, and for all this, we give credit to the women and
men of Eni who, never as in this period, have shown team culture, flexibility, toughness and ability to better
implement our mission.
To all of them our heartfelt thanks.
Rome, March 17, 2022
On behalf of the Board of Directors
Lucia Calvosa
Chairman
Claudio Descalzi
Chief Executive Officer
and General Manager
Management report | Consolidated financial statements | Annex “During 2021, we delivered excellent
results and accelerated the pace
of our transformation strategy,
which leverages the integration of
technologies, new business models
and valuable relationships with our
stakeholders. The strict financial
discipline and cost efficiencies
we implemented to withstand
the downturn have allowed us to
best capture the strong economic
recovery of 2021. On the one hand,
our upstream segment has kept
generating the financial resources
needed to fund our decarbonization
strategy while, on the other, the
new energy transition businesses,
like those combined under our new
entity Plenitude, have performed
strongly. In this way, we have
reached a Group EBIT of €9.7
bln and adjusted net profit of
€4.3 bln. Robust cash generation,
underpinned by a selective
approach to making investment
decisions, has freed €7.6 bln of
organic free cash flow, which we
used to: boost the growth of green
businesses; fund dividends and a
share buy-back at pre-pandemic
levels; and deleverage the balance
sheet - achieving an indebtedness
ratio of 20% vs. 31% a year ago.
Our portfolio restructuring has
moved on to unlock value from our
businesses, optimize our cost of
capital and maximize growth [...]”
Claudio Descalzi CEO Eni
Eni at a glance
In 2021 Eni achieved one of the best economic and financial performance of the last ten
years and accelerated the transformation strategy towards an offer of decarbonized pro-
ducts and services. In 2021, once the emergency overcome, the macroeconomic reco-
very, progressively expanded from Asia to Western countries, has driven global oil & gas
demand which after the decline of the pandemic peak is bounced synchronously across
all the geographies, creating supply-side tensions due to investment cuts in the upstream
sector, re-proposing the issue of energy security.
Outstanding results: Thanks to the spending selectivity, cost reduction and
portfolio optimizations, Eni was able to capture the strengthening of the scena-
rio, reporting an excellent set of operating and financial results with an adjusted
operating profit of €9.7 bln (an increase of €7.8 bln vs. 2020, up by 400%). Cash
flow from operations of €12.7 bln financed net capex of €5.8 bln. Organic free
cash flow of €7.6 bln funded the payment of dividends and the buy-back (overall
€2.8 bln) and the portfolio operations to support the transition business (€2.1
bln). The capital structure remains solid and robust, reaching pre-crisis levels
with a reduction in net debt to €9 bln and the leverage ratio at 0.20 vs. 0.31 repor-
ted at the end of 2020.
Portfolio valorization: Eni implemented initiatives targeted to extract value from
the portfolio restructuring, through the creation of independent and focused vehicles
able to attract capital, create value and accelerate growth. As part of this strategy, lau-
nched the listing process of Plenitude, Eni’s subsidiary which integrates gas & power
retail activities, renewables and electric mobility with the target of decarbonizing Eni’s
customers portfolio. On February 16, 2022, was listed at the Norwegian stock market
a share of about 11.2% of Vår Energi (including the share of the greenshoe option),
representing the largest IPO in the European O&G sector for over a decade, enabling
Eni to enhance the investments made so far and ensuring the growth of the company
thanks to new possible capital contribution. On March 11, 2022, signed the agreement
with BP in Angola for the establishment of Azule Energy, a new controlled business
combination aimed at accelerate the development of assets in the country.
Business transformation: the transformation of our business model was ac-
celerated in 2021. The target of “Net Zero Scope 1+2+3 to 2050” will allow Eni’s cu-
stomers to move towards an offer of decarbonised products. Achieved a level of
Group’s installed capacity from renewables of approximately 1.2 GW, more than tri-
pled in 2021, exceeding the target of more than 2 GW of installed capacity including
assets under construction. In biorefining and production of related bio-feestocks
have been achieved important results, reducing the incidence of palm oil in the pro-
duction of biodiesel. In Africa in collaboration with the governments of Kenya, Ango-
la, Congo, Benin, Ivory Coast, Mozambique and Rwanda made progress in biofuel
projects through the creation of an integrated agro-biofeedstock supply chains not in
competition with the food chain to supply Eni’s biorefineries and decarbonize the lo-
cal energy mix. The expertise gained over the years have enabled Eni to achieve solid
results and to implement the transformation, ensuring excellent HSE performance in
health, safety and asset integrity.
Eni Annual Report 2021 Average Brent
dated price ($/BBL)
Average EUR/USD
exchange rate
64.30
70.73
1.119
1.142
SERM ($/BBL)
PSV gas price (€/kcm)
1.183
4.3
487
Average Brent
dated price ($/BBL)
Average EUR/USD
exchange rate
64.30
70.73
1.119
1.142
2019
41.67
SERM ($/BBL)
PSV gas price (€/kcm)
1.183
4.3
1.7
487
(0.9)
171
112
17
2020
2021
2019
2020
2021
2019
2020
2021
2019
2020
2021
1.7
(0.9)
171
112
2020
Prezzo medio del greggio Brent dated
2019
2021
2020
2021
2019
2020
PSV
2021
41.67
2019
2020
2021
2019
Prezzo medio del greggio Brent dated
0,00
10,00
20,00
30,00
40,00
50,00
60,00
Average Brent
dated price ($/BBL)
3
64.30
2
1
41.67
2019
2020
70.73
PSV
1.200
1.000
2021
800
0,00
10,00
20,00
30,00
40,00
600
400
200
Reported operating profit (€bln)
0
80,00
70,00
2012
2018
Reported operating profit (€bln)
Net borrowings (€bln)
2019
Average EUR/USD
exchange rate
1.119
1.142
1.183
SERM ($/BBL)
1.200
4.3
1.000
PSV (€/kcm)
487
800
600
400
200
0
1.7
(0.9)
171
112
2020
2021
2019
2020
1
2
3
2021
PSV
TTF
2019
2020
2021
2019
50,00
60,00
70,00
80,00
1
Net borrowings (€bln)
PSV
TTF
3
2
2012
2018
2019
2020
2021
0.0
5.0
10.0
15.0
0.0
5.0
10.0
15.0
2020
Shareholders remuneration (€bln)
Organic free cash flow (€bln)
-5.0
0.0
5.0
10.0
15.0
2021
2019
0.0
5.0
10.0
15.0
Shareholders remuneration (€bln)
Organic free cash flow (€bln)
2020
2012
2018
2019
2020
2021
0.20
leverage
-2% vs. 2020
Net Carbon Intensity of energy
products sold
0.34
TRIR
(Total Recordable Injury Rate)
11bln tons CO2 eq.
Net Carbon Footprint upstream
0.5 1.0 1.5 2.0 2.5 3.0 3.5
-2.0
0.0
2.0
4.0
6.0
8.0
Development in renewables business
0.0
0.5 1.0 1.5 2.0 2.5 3.0 3.5
-2.0
1200
0.0
2.0
4.0
6.0
8.0
Development in renewables business
1000
800
1,166
1.188
1.500
1.000
500
600
400
200
0
61
190
393
351
2019
2020
2021
Group’s renewables
installed capacity
(MW)
Group's energy
production from
renewables (GWh)
1.500
1.000
500
1,166
1.188
393
1,166 GWh
351
Energy production
from renewables
2020
2021
61
190
2019
585ktons
production of biofuels
Group’s renewables
installed capacity
(MW)
Group's energy
production from
renewables (GWh)
>2 GW
Renewables installed capacity
included asset under construction
1.1mln ton
Group’s renewables installed
capacity (MW)
2020
2012
2021
2018
-5.0
2019
2012
2021
2018
0.0
2019
2020
2021
3
2
1
2012
2018
2019
2020
2021
2019
2020
2021
1200
1000
800
600
400
200
0
Management report | Consolidated financial statements | Annex
18
FINANCIAL HIGHLIGHTS
Sales from operations
Operating profit (loss)
Adjusted operating profit (loss)(a)
Exploration & Production
Global Gas & LNG Portfolio
Refining & Marketing and Chemicals
Plenitude & Power
Adjusted net profit (loss)(a) (b)
Net profit (loss)(b)
Net cash provided by operating activities
Capital expenditure(c)
of which: exploration
development of hydrocarbon reserves
Dividend to Eni's shareholders pertaining to the year(d)
Cash dividend to Eni's shareholders
Total assets at year end
Shareholders' equity including non-controlling interests at year end
Net borrowings at year end before IFRS 16
Net borrowings at year end after IFRS 16
Net capital employed at year end
of which: Exploration & Production
Global Gas & LNG Portfolio
Refining & Marketing and Chemicals
Plenitude & Power
Share price at year end
Weighted average number of shares outstanding
Market capitalization(e)
SUMMARY FINANCIAL DATA
Net profit (loss)
- per share(a)
- per ADR(a) (b)
Adjusted net profit (loss)
- per share(a)
- per ADR(a) (b)
Cash flow
- per share(a)
- per ADR(a) (b)
Adjusted Return on average capital employed (ROACE)
Leverage before IFRS 16
Leverage after IFRS 16
Gearing
Coverage
Current ratio
Debt coverage
Net Debt/EBITDA adjusted
Dividend pertaining to the year
Total Share Return (TSR)
Dividend yield(c)
EMPLOYEES
Exploration & Production
Global Gas & LNG Portfolio
Refining & Marketing and Chemicals
Plenitude & Power
Corporate and other activities
Group
(€ million)
(€)
(million)
(€ billion)
(€)
($)
(€)
($)
(€)
($)
(%)
(€ per share)
(%)
(number)
2021
2020
76,575
12,341
9,664
9,293
580
152
476
4,330
5,821
12,861
5,313
391
3,443
3,022
2,358
43,987
(3,275)
1,898
1,547
326
6
465
(758)
(8,635)
4,822
4,644
283
3,077
1,286
1,965
2019
69,881
6,432
8,597
8,640
193
21
370
2,876
148
12,392
8,376
586
5,931
3,078
3,018
137,765
109,648
123,440
44,519
8,987
14,324
58,843
48,014
(823)
9,815
5,474
12.2
3,566.0
44
37,493
11,568
16,586
54,079
45,252
796
8,786
2,284
8.6
3,572.5
31
47,900
11,477
17,125
65,025
53,358
1,327
10,215
1,787
13.9
3,592.2
50
2021
2020
2019
1.60
3.78
1.19
2.81
3.61
8.54
8.4
20
32
24
15.7
1.3
89.8
83.7
0.86
52.4
7.1
(2.42)
(5.53)
(0.21)
(0.48)
1.35
3.08
(0.6)
31
44
31
(3.1)
1.4
29.1
174.1
0.36
(34.1)
4.2
0.04
0.09
0.80
1.79
3.45
7.72
5.3
24
36
26
7.3
1.2
72.4
100.7
0.86
6.7
6.3
2021
9,409
847
2020
9,815
700
2019
10,272
711
13,072
11,471
11,626
2,464
6,897
2,092
7,417
2,056
7,388
32,689
31,495
32,053
(a) Non-GAAP measures.
(b) Attributable to Eni’s shareholders.
(c) Includes reverse factoring
operations in 2021.
(d) The amount of dividend for the
year 2021 is based on the Board’s
proposal.
(e) Number of outstanding shares by
reference price at year end.
(a) Fully diluted. Ratio of net profit/
cash flow and average number of
shares outstanding in the period.
Dollar amounts are converted on
the basis of the average EUR/USD
exchange rate quoted by Reuters
(WMR) for the period presented.
(b) One American Depositary
Receipt (ADR) is equal to two Eni
ordinary shares.
(c) Ratio of dividend for the period
and the average price of Eni shares
as recorded in December.
Eni Annual Report 2021
19
INNOVATION
R&D expenditure
First patent filing application
2021
2020
2019
(€ million)
(number)
177
30
157
25
194
34
HEALTH, SAFETY AND ENVIRONMENT(a)
2021
2020
2019
TRIR (Total Recordable Injury Rate)
employees
contractors
Direct GHG emissions (Scope 1)
Indirect GHG emissions (Scope 2)
Indirect GHG emissions (Scope 3) from use of sold products(b)
Net GHG Lifecycle Emissions (Scope 1+2+3)(c)
Net Carbon Intensity (Scope 1+2+3)(c)
Net carbon footprint upstream (Scope 1+2)(c)
Net carbon footprint Eni (Scope 1+2)(c)
(total recordable injuries/
worked hours) x 1,000,000
(mmtonnes CO2eq.)
(gCO2 eq./MJ)
(mmtonnes CO2eq.)
Direct GHG emissions (Scope 1)/operated hydrocarbon gross
production (upstream)
(tonnes CO2eq./kboe)
0.34
0.40
0.32
40.1
0.81
176
456
67
11.0
33.6
20.2
32.0
9.2
1.2
0.36
0.37
0.35
37.8
0.73
185
439
68
11.4
33.0
20.0
31.6
11.2
1.0
0.34
0.21
0.39
41.2
0.69
204
501
68
14.8
37.6
19.6
31.4
21.9
1.2
(ktonnes CH4)
(billion Sm³)
(barrels)
4,406 6,824
7,265
3,051 5,866
6,232
1,355
958
1,033
(mmcm)
125
(%)
58
113
53
128
58
(kboe/d)
(mmboe)
(years)
(%)
($/boe)
(bcm)
(mmtonnes/year)
(ktonnes)
(%)
(mmtonnes)
(number)
(kliters)
(%)
(ktonnes)
(%)
(MW)
(GWh)
(bcm)
(TWh)
2021
2020
2019
1,682
6,628
10.8
55
4.8
7.5
1,733
6,905
10.9
43
3.8
6.5
1,871
7,268
10.6
92
7.7
6.4
20.4
17.6
15.5
70.45
36.88
33.57
10.9
1.1
585
65
22.3
7.23
5,314
1,521
76
8,476
66
1,137
986
7.85
16.49
22.36
28.54
64.99
37.30
27.69
9.5
1.1
622
63
23.2
6.61
5,369
1,390
69
8,073
65
335
340
7.68
12.49
20.95
25.33
72.85
37.98
34.87
10.1
1.1
256
44
23.6
8.25
5,411
1,766
88
8,068
67
174
61
8.62
10.92
21.66
28.28
Carbon efficiency index Group
Methane fugitive emissions (upstream)
(a) KPIs refer to 100% of the operated
assets, where not indicated.
(b) GHG Protocol Category 11 - Corporate
Volumes of hydrocarbon sent to routine flaring
Total volume of oil spills (> 1 barrel)
Value Chain (Scope 3) Standard.
of which: due to sabotage
Estimated on the basis of the upstream
operational
production (Eni’s share) in line with IPIECA
(c) KPIs are calculated on an equity bases.
methodologies.
Freshwater withdrawals
Re-injected production water
OPERATING DATA
EXPLORATION & PRODUCTION
Hydrocarbon production
Net proved reserves of hydrocarbons
Reserve life index
Organic reserve replacement ratio
Profit per boe(a) (c)
Opex per boe(b)
Finding & Development cost per boe(c)
GLOBAL GAS & LNG PORTFOLIO
Natural gas sales
of which: Italy
outside Italy
LNG sales
REFINING & MARKETING AND CHEMICALS
Capacity of biorefineries
Sold production of biofuels certified
Average bio refineries utilization rate
Retail market share in Italy
Retail sales of petroleum products in Europe
Service stations in Europe at year end
Average throughput of service stations in Europe
Average oil refineries utilization rate
Production of petrochemical products
Average petrochemical plant utilization rate
PLENITUDE & POWER
Renewable installed capacity at period end
(a) Related to consolidated
Energy production from renewable sources
subsidiaries.
Retail and business gas sales
(b) Includes Eni’s share in joint
ventures and equity-accounted
entities.
(c) Three-year average.
Retail and business power sales to end customers
Thermoelectric production
Power sales in the open market
Management report | Consolidated financial statements | Annex
20
Stakeholder engagement activities
Operating in 69 countries with different socio-economic contexts, the understanding of stakeholders’ points of view and
expectations as well as the inclusion and sharing of choices are for Eni fundamental elements for the creation of long-term value
by building relationships based on mutual trust, transparency and integrity. Since 2018, the understanding of local contexts and the
management of stakeholder expectations on sustainability issues have been supported by the use of the company’s IT platform
called “Stakeholder Management System” (SMS) that “maps” stakeholders according to their relevance and their disposition
towards the company’s activities, in the countries and territories where it operates. In addition, SMS tracks relationships with
stakeholders including requests, grievances and response actions undertaken, and supports the traceability required by internal
anti-corruption regulatory tools on relationships with relevant parties. In this way, the system allows to understand the main
issues relevant to stakeholders and the potential impacts on Human Rights, also identifying the possible presence of vulnerable
groups and areas listed cultural and/or natural interest sites by UNESCO (World Heritage Sites, WHS). The system is used for
activities and new projects in all Eni business lines, monitoring relations with about 4.800 stakeholders (+20% compared to 2020).
STAKEHOLDER CATEGORIES
MAIN STAKEHOLDER ENGAGEMENT ACTIVITIES DURING THE YEAR
PEOPLE
AND NATIONAL
AND INTERNATIONAL
UNIONS
FINANCIAL
COMMUNITY
LOCAL COMMUNITIES
AND COMMUNITY
BASED ORGANIZATIONS
CONTRACTORS,
SUPPLIERS
AND COMMERCIAL
PARTNERS
CUSTOMERS AND CONSUMERS
DOMESTIC, EUROPEAN
AND INTERNATIONAL
INSTITUTIONS
UNIVERSITIES
AND RESEARCH
CENTRES
Professional and training paths on emerging skills related to business strategies and expansion of skills
mapping.
Signing of the new agreement for smart working in Italy with new corporate welfare measures.
Agreement for integration into the GFA - of ILO Convention No.190 and ILO Recommendation No.206 on
Training initiatives to support inclusion and recognition of the value of all kinds of diversity and
eliminating violence and harassment in the workplace.
international initiatives supporting team building and innovation.
Expansion contract signed with the Trade Unions to promote generational turnover and initiatives for skills
updating.
Capital Markets Day (strategic plan 2021-24 and long term plan to 2050) and virtual Road-Show in major
Conference call on quarterly results.
financial centers and Capital Markets Day for Plenitude presentation.
Road-Shows with investors and proxy advisors on executive compensation 2021.
Participation of Top Management in thematic conferences organized by banks.
Participation in ESG thematic conferences.
Mapping of over 770 local communities (including indigenous ones) in the host countries and definition
of local engagement initiatives.
Consultations of local authorities and communities for new exploratory activities and/or for the
development of new projects, as well as for the planning and management of local development projects.
Management of requests and grievances expressed by the local communities.
Consultations with communities in countries where Human Rights Impact Assessments have
been conducted.
Involvement of suppliers in the energy transition path through 15 thematic workshops and participation
Due Diligence on Human rights: application of the risk-based model on the respect of human
in conferences and events.
Development and launch of Open-es, the platform open to all for the sustainable development of
companies through training and engagement initiatives (measurement of CO2 and drafting of the
sustainability report).
Meetings and workshops with Presidents, General Secretaries and Energy Managers of national and
local Consumer Associations (AdC) on topics such as sustainability, circular economy, remediation,
environmental restoration, energy transition, energy saving, customer service and new business initiatives.
Meetings and working tables with political and institutional representatives and local, national,
European and international organizations on energy, climate, energy transition, environment, sustainable
development, research and innovation, digitalization and the circular economy.
Participation in discussions on energy and environmental issues promoted by the italian Government
and Parliament, the european institutions, international bodies and foreign national institutions.
rights along the procurement process.
“Basket Bond - Sustainable Energy” program, an innovative finance tool targeting Eni qualified
suppliers and the energy chain, designed to allow companies engaged in energy transition to
implement projects and investments aimed at sustainable development.
Sponsorship of consumer association initiatives on sustainability and circular economy.
Territorial meetings with the regional consumer associations of the National Council of
Consumers and Users
Representation of Eni’s position on energy transition and decarbonization in the main international
multilateral fora (e.g., G20, B20, COP26).
Activities of engagement and institutional dialogue within the partnership/membership with think
tanks and national, european and international associated bodies and with international organisms
and/or promoted by European institutions on energy transition and related geopolitical issues.
Meetings with universities, Research centres and public bodies, consortia and third-party companies
Establishment with the CNR of 4 research centres in Southern Italy for sustainable environmental
with which Eni collaborates for the development of innovative technologies.
Agreements and collaborations with the Polytechnic of Milan and Turin, University of Bologna, Naples
(Federico II), Pavia, Padua, Milan Bicocca, MIT, CNR, INSTM, ENEA, RSE and INGV(a).
Collaborations with a) University of Basilicata to support the Master Geoscience for Energy Transitions
b) Enna Kore University for business training contributions for academic courses.
and economic development in Italy and worldwide.
With the Polytechnic of Milan: activated collaborations for the development of impact assessment
models (Local Content and SDGs) and for new editions of the Master Energy Innovation; joined the
Joint Hydrogen Research Platform “Hydrogen-JRP”; established a Joint Centre for “Acceleration
of the Energy Transition in the field of Technologies for the Environment and Energy”.
Membership and participation in OGCI, IPIECA, WBCSD, UN GLOBAL COMPACT, EITI(b); collaboration with
Meetings with Local Business Associations on the Eni Sustainable Supply Chain system and the
VOLUNTARY ADVOCACY
AND CATEGORY ORGANIZATIONS
AND INDUSTRY ASSOCIATIONS
Conferences, debates, events and training initiatives on sustainability issues (energy, circular economy,
remediation, corporate social responsibility); implementation of guidelines and sharing of best practices.
Meetings with associations and participation in working groups on strategic issues, monitoring any
IHRB(c) and other international human rights institutions.
legislative developments.
ORGANIZATIONS
FOR COOPERATION
AND DEVELOPMENT
Consolidation, through collaboration/partnership agreements, of the development activities carried out
together with international organizations. Agreements developed with United Nations Development
Programme – UNDP, United Nations Industrial Development Organization – UNIDO, World Bank.
(a) Massachusetts Institute of Technology; National Research Council; National Inter-University Consortium for Material Science
and Technology; National Agency for New Technologies, Energy and Sustainable Economic Development; Research on the Energy
System; National Institute of Geophysics and Volcanology.
company’s energy issues.
organized by Confindustria.
Presidency of the Action Council “Sustainability & Global Emergencies” within the B20 Italy 2021
Signing of: a) a collaboration agreement concerning the Confindustria Best Performer of the
Circular Economy Competition; b) “Work and Energy Manifesto for a sustainable transition”
between Confindustria Energia and Trade Unions.
Agreements with Italian and European institutions, development banks, the private sector, cooperation
bodies and agencies, faith-based organizations and civil society organisations: Cassa Depositi e
Prestiti - CDP, Standard Bank, Italian Agency for Development Cooperation - AICS, USAID, Ajuda
de Desenvolvimento de Povo para Povo - ADPP, AVSI, CUAMM, VIS, E4Impact Foundation, Banco
Alimentare, Don Bosco Institute of Maputo.
Eni Annual Report 2021
Occupational Health and Safety
Transparency, anti-corruption and tax strategy
Combat climate change/reduce GHG emissions
Reduce environmental impacts
Local development
Protection of human rights
Biodiversity
People and the Development of Human Capital
Innovation
Digitalization and Cyber Security
Relations with customers and consumers
Responsible Supply Chain Management
Diversity, inclusion and work-life balance
Local Content
Energy access
Circular economy
21
MAIN TOPICS ADDRESSED
PEOPLE
AND NATIONAL
AND INTERNATIONAL
UNIONS
FINANCIAL
COMMUNITY
LOCAL COMMUNITIES
AND COMMUNITY
BASED ORGANIZATIONS
CONTRACTORS,
SUPPLIERS
AND COMMERCIAL
PARTNERS
DOMESTIC, EUROPEAN
AND INTERNATIONAL
INSTITUTIONS
UNIVERSITIES
AND RESEARCH
CENTRES
Mapping of over 770 local communities (including indigenous ones) in the host countries and definition
of local engagement initiatives.
Consultations of local authorities and communities for new exploratory activities and/or for the
development of new projects, as well as for the planning and management of local development projects.
Development and launch of Open-es, the platform open to all for the sustainable development of
companies through training and engagement initiatives (measurement of CO2 and drafting of the
in conferences and events.
sustainability report).
CUSTOMERS AND CONSUMERS
Meetings and workshops with Presidents, General Secretaries and Energy Managers of national and
local Consumer Associations (AdC) on topics such as sustainability, circular economy, remediation,
environmental restoration, energy transition, energy saving, customer service and new business initiatives.
Meetings and working tables with political and institutional representatives and local, national,
European and international organizations on energy, climate, energy transition, environment, sustainable
development, research and innovation, digitalization and the circular economy.
Participation in discussions on energy and environmental issues promoted by the italian Government
and Parliament, the european institutions, international bodies and foreign national institutions.
Professional and training paths on emerging skills related to business strategies and expansion of skills
mapping.
Signing of the new agreement for smart working in Italy with new corporate welfare measures.
Agreement for integration into the GFA - of ILO Convention No.190 and ILO Recommendation No.206 on
Training initiatives to support inclusion and recognition of the value of all kinds of diversity and
eliminating violence and harassment in the workplace.
international initiatives supporting team building and innovation.
Expansion contract signed with the Trade Unions to promote generational turnover and initiatives for skills
updating.
Capital Markets Day (strategic plan 2021-24 and long term plan to 2050) and virtual Road-Show in major
financial centers and Capital Markets Day for Plenitude presentation.
Road-Shows with investors and proxy advisors on executive compensation 2021.
Conference call on quarterly results.
Participation of Top Management in thematic conferences organized by banks.
Participation in ESG thematic conferences.
Management of requests and grievances expressed by the local communities.
Consultations with communities in countries where Human Rights Impact Assessments have
been conducted.
Involvement of suppliers in the energy transition path through 15 thematic workshops and participation
Due Diligence on Human rights: application of the risk-based model on the respect of human
rights along the procurement process.
“Basket Bond - Sustainable Energy” program, an innovative finance tool targeting Eni qualified
suppliers and the energy chain, designed to allow companies engaged in energy transition to
implement projects and investments aimed at sustainable development.
Sponsorship of consumer association initiatives on sustainability and circular economy.
Territorial meetings with the regional consumer associations of the National Council of
Consumers and Users
Representation of Eni’s position on energy transition and decarbonization in the main international
multilateral fora (e.g., G20, B20, COP26).
Activities of engagement and institutional dialogue within the partnership/membership with think
tanks and national, european and international associated bodies and with international organisms
and/or promoted by European institutions on energy transition and related geopolitical issues.
Meetings with universities, Research centres and public bodies, consortia and third-party companies
Establishment with the CNR of 4 research centres in Southern Italy for sustainable environmental
with which Eni collaborates for the development of innovative technologies.
Agreements and collaborations with the Polytechnic of Milan and Turin, University of Bologna, Naples
(Federico II), Pavia, Padua, Milan Bicocca, MIT, CNR, INSTM, ENEA, RSE and INGV(a).
Collaborations with a) University of Basilicata to support the Master Geoscience for Energy Transitions
b) Enna Kore University for business training contributions for academic courses.
and economic development in Italy and worldwide.
With the Polytechnic of Milan: activated collaborations for the development of impact assessment
models (Local Content and SDGs) and for new editions of the Master Energy Innovation; joined the
Joint Hydrogen Research Platform “Hydrogen-JRP”; established a Joint Centre for “Acceleration
of the Energy Transition in the field of Technologies for the Environment and Energy”.
Membership and participation in OGCI, IPIECA, WBCSD, UN GLOBAL COMPACT, EITI(b); collaboration with
Meetings with Local Business Associations on the Eni Sustainable Supply Chain system and the
VOLUNTARY ADVOCACY
Conferences, debates, events and training initiatives on sustainability issues (energy, circular economy,
AND CATEGORY ORGANIZATIONS
AND INDUSTRY ASSOCIATIONS
remediation, corporate social responsibility); implementation of guidelines and sharing of best practices.
Meetings with associations and participation in working groups on strategic issues, monitoring any
IHRB(c) and other international human rights institutions.
legislative developments.
ORGANIZATIONS
FOR COOPERATION
AND DEVELOPMENT
Consolidation, through collaboration/partnership agreements, of the development activities carried out
together with international organizations. Agreements developed with United Nations Development
Programme – UNDP, United Nations Industrial Development Organization – UNIDO, World Bank.
company’s energy issues.
Presidency of the Action Council “Sustainability & Global Emergencies” within the B20 Italy 2021
organized by Confindustria.
Signing of: a) a collaboration agreement concerning the Confindustria Best Performer of the
Circular Economy Competition; b) “Work and Energy Manifesto for a sustainable transition”
between Confindustria Energia and Trade Unions.
Agreements with Italian and European institutions, development banks, the private sector, cooperation
bodies and agencies, faith-based organizations and civil society organisations: Cassa Depositi e
Prestiti - CDP, Standard Bank, Italian Agency for Development Cooperation - AICS, USAID, Ajuda
de Desenvolvimento de Povo para Povo - ADPP, AVSI, CUAMM, VIS, E4Impact Foundation, Banco
Alimentare, Don Bosco Institute of Maputo.
(b) Oil and Gas Climate Initiative; International Petroleum Industry Environmental Conservation Association; World Business
Council for Sustainable Development; Interministerial Committee on Human Rights; Extractive Industries Transparency Initiative.
(c) Institute for Human Rights and Business.
Management report | Consolidated financial statements | Annex Strategy
The war in Ukraine is
forcing us to reconsider the
world as we know it. It is a
humanitarian tragedy and
has created new threats
to energy security which
we must meet without
abandoning our ambitions
for a just transition.
Our strategy has made us
well prepared to address
these challenges. Our
immediate response to the
current crisis has been to
leverage our established
alliances with producing
countries to find replacement
energy sources for Europe’s
energy needs. We can make
available to the market more
than 14 TCF of additional
gas resources for the short to
medium term.
This complements our work
to develop new decarbonised
products and services
which can help deliver both
energy security and carbon
reduction by providing to
our customers a full set
of decarbonized energy
products and services.
The result of this strategic
approach underpins our
decision to accelerate our
pathway to net zero with
a 35% cut to Scope 1+2+3
emissions by 2030, and 80%
by 2040 compared to 2018.
[...]
Claudio Descalzi, Eni CEO
Accelerated emissions reduction
Net zero emissions by 2050, added new net absolute emission
(Scope 1, 2 and 3) reduction targets vs. 2018:
-35% by 2030 –– 80% by 2040
Net Carbon Footprint by 2035 (Scope 1 and 2):
40% by 2025 –– Net zero by 2035
Scope 1 and 2 GHG emissions Upstream:
-65% by 2025 (vs. 2018) –– Net zero emission by 2030
New Energy Solutions
Plenitude: green electricity for over 15 million customers
with more than 15 GW of renewable capacity by 2030
Biorefining: capacity growth up to 6 MTPA in the next decade
Hydrogen: contribution in our plan for around 4 MTPA by 2050
Magnetic fusion: the first commercial plant is expected in the next 10 years
Increased the share of investments directed at new energy solutions to almost
30% by 2025, 60% by 2030, and up to 80% by 2040.
Disciplined financial plan
Average yearly capex: around €7 bln; 2022 capex at around €7.7 bln
IRR of Upstream projects in execution: 21% @Eni Scenario
IRR of new renewable projects: +200 bps vs. Plenitude WACC
Cash Flow From Operations: €55 bln along the 4-year plan period @ Eni scenario
Sustainable Finance instruments: more than €13 bln in 2025
Value creation for shareholders
Annual total dividend: €0.88 per share, based on the
Brent reference between 80-90 $/bbl
Dividend payment: four equal quarterly instalments
in September and November 2022, March and May 2023
Share buyback program equal to €1.1 bln in 2022 at the Brent reference price
In July and October 2022, for scenarios above 90 $/bbl further buy-backs
equivalent to 30% of the associated incremental free cash flow
Eni Annual Report 2021
Net Absolute GHG Emissions (Scope 1+2+3)
MtCO2eq
Strategy 2021
Strategy 2022
Net Carbon Footprint Eni (Scope 1+2)
MtCO2eq
-40%
Strategy 2020
-35%
2018 (baseline)
2030
New energy solutions sold
-55%
Net zero
-80%
2040
Net zero
2050
POWER
RENEWABLES
BIO
PRODUCTS
HYDROGEN
2025
2030
2040
~30%
~60%
>80%
2025
2030
2040
2050
New Energy Solutions
Traditional
MAGNETIC FUSION
Commercial Plant
SUSTAINABLE INSTRUMENTS* € bln
2022-2025
Capex ~€7 bln
average/year
Committed
Uncommitted
0
2019
8
2021
FLEXIBLE CAPEX PLAN
*Include bonds, loans, bank credit lines and rate derivatives.
23
n
o
i
t
a
c
o
l
l
a
l
a
t
i
p
a
C
>13
2025
Annual total dividend: €0.88 per share, based on the
Brent reference between 80-90 $/bbl
Dividend payment: four equal quarterly instalments
in September and November 2022, March and May 2023
VALUE CREATION FOR SHAREHOLDERS
2022 DISTRIBUTION
UPSIDE
RESILIENCE
€0.88 dividend per share
€1.1 bln buyback
Additional buyback 30%
of incremental FCF for Brent above > 90 $/bbl
Simplified, enhanced dividend
per share sliding scale
Share buyback program equal to €1.1 bln in 2022 at the Brent reference price
Brent reference price @ 80 $/bbl
(New price assessment in July and October)
vs. previous policy
In July and October 2022, for scenarios above 90 $/bbl further buy-backs
equivalent to 30% of the associated incremental free cash flow
DIVIDEND PAID ON A QUARTERLY BASIS STARTING 3Q 2022
Management report | Consolidated financial statements | Annex
24
Strategic Plan 2022-2025
Eni's strategy is defined in a scenario for the next four years characterized by a Brent price
supported by current market dynamics, with a demand growth expected to recover pre-
pandemic levels by 2022 and a limited supply from the production issues and financial
discipline of the international oil companies.
In the long-term, the price of crude oil is expected to grow in line with inflation until 2035,
then decline following the progression of the energy transition. This scenario is subject to
continuous monitoring due to the unpredictable evolution of the crisis between Russia and
Ukraine. Financial discipline and spending selectivity, cost control and margins expansion will
allow Eni to further contain cash neutrality and generate significant operating cash surplus at
Eni’s conservative scenario Brent assumptions, which will be used to accelerate the growth
of green businesses and keep solid asset ratios.
In the four-year period, Eni's management foresees an investment plan of €28 billion (on
average about €7 billion/year) which will be implemented according to the parameters of
financial and operational discipline of the Group, in compliance with minimum profitability
thresholds, ensuring the consistency of emission profiles with long-term decarbonisation
objectives and full coverage through flow of operating cash. The organic free cash flow and
gains from the disposals, in particular Plenitude and Vår Energi IPOs on the stock exchange will
allow to maintain a solid capital structure and to ensure competitive returns to shareholders.
Capital allocation processes provide a further step forward, coherently with the Paris targets
with a 25% share of the capex plan, compared to a 20% share of the previous plan, aimed
at strengthening the renewable generation capacity, growing circular economy of biofuels
and green chemistry, to the "scaling up" of new energy solutions and services (CCS) and
energy efficiency and decarbonization of legacy assets. These objectives will be achievable
thanks to the two Business Groups able to implement distinct paths in synergy, aimed at
the execution of Eni's net zero emission strategy by 2050: the Natural Resources Business
Group committed to maximize value and decarbonize the O&G assets; the Energy Evolution
Business Group aimed at developing new businesses in renewables and circular economy
and implementing the industrial transformation of legacy assets.
Overall, the 2022-2025 plan projects a Group with robust fundamentals and growing
profitability, thanks to the transformation strategy implemented in response to downturn that,
on the one hand, increased the resilience of traditional businesses and their ability to generate
cash, and, on the other hand, created the conditions for a phase of strong development of the
transition business, based on the integration of technologies, on new business models and
on the closer collaboration with stakeholders. The expected results in the next four years will
make Eni's carbon neutrality strategy by 2050 more solid, thanks to the growing visibility of
the intermediate targets and the steps closer.
Eni Annual Report 2021 25
EXPLORATION & PRODUCTION
Eni's upstream strategy, in compliance with the target of footprint carbon reduction, aims
at the maximization of returns and cash generation, leveraging on the enhancement of
an optimized asset portfolio, exclusively based on conventional assets, characterized by
project modularity, accelerated time-to-market and limited exposure over the medium-term.
The evolution of the production mix foresees the gas component at 60% in 2030 and over
90% after the 2040. Net Scope 1 and 2 emissions of upstream assets calculated on the
basis of equity output are expected to zeroing in 2030, leveraging, in addition to energy
efficiency, on Natural Climate Solutions that will ensure the compensation of residual
emissions. Other driver for the achievement of the Group's decarbonization objectives are
the projects for CO2 capture and storage geological with a target of about 10 mmtons per
year by 2030 (Eni's share).
The 2022-25 Plan provides for the growth of cash generation and the progressive reduction
of the cash neutrality up to Brent levels of around $25/bbl through:
growth of production in the 2021-2025 period at a 3% average annual rate, thanks to the
contribution of projects already started or starting in the four-year period;
capital discipline with an average expenditure of about €4.5 billion per year over the 2022-
2025 period characterized by high flexibility (>45% capex uncommitted in the 2024-2025
period);
further development of integrated initiatives with the Global Gas & LNG Portfolio segment for
the gas equity enhancement;
maximizing efficiency and business continuity;
enhancement and rationalization of the exploration portfolio, with the aim of discovering 2.2
bln boe of resources at a unit cost of lower than $1.5 per barrel; exploration will be focused
(about 90%) in areas adjacent to near-field production fields and existing or soon to enter into
operation infrastructures and will be a strategic driver in the decarbonization path, aligning
the portfolio of resources with the objectives of production mix and the medium/long-term
emission profiles.
Cash generation will also be supported by portfolio transformation with the exit from marginal
and/or high break even assets and the focus on high cash generating assets and the creation
of the business combination in Angola and the listing of Vår Energi, in order to reduce
financial exposure and enable more accelerated asset growth. The overall contribution of the
abovementioned actions will allow to achieve a 2022-2025 cumulative organic free cash flow
equal to approximately €29 billion.
Management report | Consolidated financial statements | Annex 26
GLOBAL GAS & LNG PORTFOLIO
In the plan period, GGP will continue the strategy of maximizing returns, leveraging on the
flexibility of gas portfolio through optimization and renegotiation initiatives. In the current
situation, GGP will also leverage on portfolio, capabilities and business relationships to
strengthen and diversify the national supply. The other driver of growth and value creation
is the expansion in the LNG business through development in new premium and growing
markets in the Middle East/Far East and the increasing integration with the upstream business
for the enhancement of gas equity in Congo, Angola, Indonesia, Nigeria, Mozambique and
Egypt thanks to the strategic terminal of Damietta. The portfolio of contracted LNG volumes
is expected to exceed 15 mmtons/y by 2025. The valorization of gas pipeline interests will also
contribute to value creation. The abovementioned actions will allow to achieve a 2022-2025
cumulative free cash flow equal to approximately €2.7 billion.
REFINING & MARKETING
The strategy of the Refining & Marketing business is focused on the development of the
biorefining capacity, expected to almost double to 2 mmtons/y in 2025 and grow further
until reaching the capacity of 6 mmtons/y in the next decade; biorefineries will be supplied
exclusively with second and third generation palm oil free charges by 2023. In the retail
marketing is foresees the gradual mix evolution of products sold, reaching 100% of the sale of
decarbonized products by 2050.
The 2022-25 Plan provides:
the diversification of the green offer through (i) the strengthening of biorefining with
an increase of processing capacity up to 2 mmtons by 2025, palm oil free from 2023,
leveraging on second generation oils not in competition with the food chain and other
innovative feedstocks (waste/residues) that will cover approximately 90% of the feedstock
by 2025; (ii) the development of the biomethane business; (iii) the extension of the SAF
(Sustainable Aviation Fuel) production capacity;
the growth of marketing in Europe leveraging on the high margin segments, the strengthening
of the offer of alternative fuels, the further development of non-oil services in retail and,
more generally, the promotion of sustainable mobility through a dedicated entity.
CHEMICAL
Eni's long-term strategy aims to significantly reduce exposure of the chemical business to
the cycle volatility and the cost of the oil feedstock through the specialization of the product
portfolio and the development and integration of the chemical business from renewable
sources and chemical/mechanical recycling.
The 2022-25 Plan provides:
the progressive specialization of the polymer portfolio towards higher value added
products and extension of the downstream supply chain towards "compounding" to
reduce volatility margins;
the development of chemistry from renewables and the expansion of circular economy
initiatives, in particular mechanical and chemical recycling also through partnerships;
the progressive reduction of GHG emissions, increasing energy efficiency.
PLENITUDE
The main medium/long-term strategic lines aim to the development in synergy of the
renewable installed capacity with targets of 15 GW by 2030 and 45 GW by 2050 and the
retail customers portfolio up to exceed 20 million contracts by 2050 through the selection
Eni Annual Report 2021 27
of areas of renewables expansion linked to the presence of our customers as well as
the development of activities in areas where Eni already operates. In 2040, decarbonized
products from Eni’s portfolio (energy from renewables and biomethane) and new energy
services will be offered to retail customers.
The 2022-25 plan provides:
Plenitude's IPO and the creation of a unique business model which combines production
from renewables, energy sales and energy services to retail customers and a widespread
network recharging points for electric vehicles; the operation is one of the strategic steps
towards zero Scope 3 GHG emissions associated with our retail customers;
the installation of more than 6 GW of installed capacity by 2025;
growth of the customer portfolio with the aim of exceeding 11 million of delivery points by 2025,
leveraging on the international development and growth of the power customer portfolio;
the focus on business related to energy efficiency and distributed photovoltaic generation
and the development of the E-Mobility market with the aim of reaching around 30,000
recharging points by 2025.
POWER
The 2022-25 Plan provides:
the maximization of results, thanks to the flexibility and efficiency of the plants and
targeted investments;
the identification and development of new technological solutions with low carbon impact.
CAPEX PLAN
The four-year capex plan is focused on high-value projects with rapid return and includes an
overall investments of approximately €28 billion. The plan is characterized by high flexibility
with more than 55% of investments in the 2024-25 period not yet contracted. In line with
medium and long-term targets and to feed the process of decarbonization of the company,
Eni plans investments in renewable sources, efficiency energy, circular economy and flaring
reduction of over €7 billion.
Strategy execution combined with a strict financial discipline and the asset portfolio optimizations
will further strengthen the financial structure to support the acceleration of green businesses
growth and the remuneration of our shareholders on a top level in the industry.
REMUNERATION POLICY
Eni’s management is committed to guarantee competitive shareholders’ return by executing a
progressive shareholder remuneration policy, that is reflective of the volatility of crude oil prices.
It has been established a floor dividend of €0.36 per share that is paid with a Brent price
of at least 43 $/bbl. The floor dividend is complemented by a variable dividend which size
progresses alongside the rise in crude oil prices till 80 $/bbl, according to a preset scale of
amounts at various Brent prices ranges.
For 2022, having assessed the progress of the Company in executing its strategy, a solid
financial position and an improved outlook for crude oil prices, the management expects to
increase the annual total dividend to €0.88 per share, based on the assumption of a Brent
reference price of $80/bbl for the year and to activate share buy-back for €1.1 billion.
Furthermore, in case of crude oil prices above 90 $/bbl, management is expected to reassess
by July and again in October, the oil scenario. In case of an upward revision to the Brent
reference price assumption for the year, it will activate incremental buy-backs amounting to
30% of the excess cash from operations deriving from the updated Brent price.
Management report | Consolidated financial statements | Annex Integrated Risk Management
Integrated Risk Management Model
The IRM Model is characterized by a structured approach, based on international
best practices and considering the guidelines of the Internal Control and Risk
Management System (see page 42), that is structured on three control levels.
Risk Governance attributes a central role to the Board of Directors (BoD) which
defines the nature and level of risk in line with strategic targets, including in
evaluation process all the elements that can be relevant in a view of the Company’s
sustainable success.
The BoD, with the support of the Control and Risk Committee, outlines the guidelines
for risk management, so as to ensure that the main corporate risks are properly
identified and adequately assessed, managed and monitored, determining the
degree of compatibility with company management consistent with the strategic
targets. For this purpose, Eni’s CEO, through the IRM process, presents every three
months a review of the Eni’s main risks to the Board of Directors. The analysis
is based on the scope of the work and risks specific of each business area and
processes aiming at defining an integrated risk management policy; the CEO also
ensures the evolution of the IRM process consistently with business dynamics and
the regulatory environment. Furthermore, the Risk Committee, chaired by the CEO,
holds the role of consulting body for the latter with regards to major risks. For this
purpose, the Risk Committee evaluates and expresses opinions, at the instance of
CEO, related to the main results of the IRM process.
The Integrated Risk Management
(IRM) process is aimed at
ensuring that management takes
risk-informed decisions, with
adequate consideration of actual
and prospective risks, including
short, medium and long-term
ones, within the framework of an
organic and comprehensive vision.
The IRM Model is based on a
system of methodologies and
skills that leverages on principle
of the third parties assessments
(data quality, objectivity of the
detection and quantification of
the mitigation actions) in order
to improve the effectiveness of
the analyses, ensure an adequate
support for the main decision
making processes (definition of
the Strategic Plan and medium
and long-term objectives) and
guarantee the disclosure to
the administration and control
structures.
231
SUPERVISORY
BODY
BOARD OF DIRECTOR
CHAIRMAN
BOARD OF STATUTORY AUDITORS
CONTROL AND RISK COMMITTEE
CEO(a)
COMPLIANCE COMMITTEE
RISK COMMITTEE
FIRST LEVEL
OF CONTROL
SECOND LEVEL OF CONTROL
RISK
OWNER
Process Owner
Compliance/
Governance
Functions
identified in the
Compliance/
Governance
models
Financial
Reporting Officer
Process Owner
core business
and business
support
processes
Dedicated
/non-exclusively
-dedicated
functions (if any)
Risk specialist
Planning
and control
THIRD LEVEL
OF CONTROL
INTERNAL
AUDIT(C)
Integrated Compliance
Integrated Risk Management
Compliance Objectives(b)
Strategic, Operating and Reporting Objectives
(a) Director in charge of the internal control and risk management system.
(b) Including objectives on the reliability of financial reporting.
(c) Internal Audit Director reports hierarchically to the Board of Directors, and on its behalf, to the Chairman, without prejudice to the provisions relating to its
(c) Internal Audit Director reports hierarchically to the Board of Directors, and on its behalf, to the Chairman, without prejudice to the provisions
appointment, termination, remuneration and resources and his functional reporting to the Control and Risk Committee and to the CEO, as Director in charge of the
relating to its appointment, termination, remuneration and resources and his functional reporting to the Control and Risk Committee and to
internal control and risk management system.
(a) Director in charge of the Internal Control and Risk Management System.
(b) Including objectives on the reliability of financial reporting.
the CEO, as director in charge of the Internal Control and Risk Management System.
Eni Annual Report 2021 29
} Risk Governance,
methodologies and tools
} Risk Strategy
} Integrated Risk
Management
Integrated Risk Management Process
The IRM process ensures the detection, consolidation and analysis of all Eni’s risks and supports
the BoD to verify the compatibility of the risk profile with the strategic targets, also in a medium-long
term approach. The IRM supports management in the decision-making process by strengthening
awareness of the risk profile and the associated mitigations. The process, regulated by the
“Management System Guideline (MSG) Integrated Risk Management” is continuous, dynamic and
includes the following sub-processes: (i) risk governance, methodologies and tools (ii) risk strategy,
(iii) integrated risk management, (iv) risk knowledge, training and communication.
The IRM process starts from the contribution to the definition of medium and long-term plans and
Eni’s Strategic Plan (risk strategy) through the definition of proposals for de-risking targets and
strategic treatment actions, the analysis of the risk profile underlying the proposed Plan and the
identification of the main actions with effective de-risking of the company’s top risks. The results of
the activities were presented to the Administrative and Control structures in January 2021.
The “Integrated Risk Management” sub-process includes: periodic risk assessment and monitoring
cycles (Integrated Risk Assessment) in order to understand the risks taken on the basis of the strategic
and medium-long term targets and the initiatives defined to achieve them; contract risk management
and analysis aimed at the best allocation of the contractual responsibilities with the supplier and their
adequate management in the operational phase; integrated analysis of existing risks in the Countries
of presence or potential interest (ICR) which represents a reference for risk strategy, risk assessment
and project risk analysis activities; support to the decision-making process for the authorization of
investment projects and main transactions (Integrated Project Risk Management and M&A).
The risks are assessed with quantitative and qualitative tools considering both the likelihood of
occurrence and the impacts that would occur in a defined time horizon when the risk occurs.
The assessment is expressed following an inherent and a residual level (taking into account the
effectiveness of the mitigation actions) and allows to measure the impact with respect to the
achievement of the objectives of the Strategic Plan and for the whole life as regards the business.
The risks are represented on the basis of the likelihood of occurrence and the impact on matrices
that allow their comparison and classification by relevance.
Risks with economic/financial impact are also analyzed in an integrated perspective on the basis
of quantitative models that allow to define on a statistical basis the distribution of risk flows or to
simulate the aggregate impact of risks in the face of hypothetical future scenarios (what if analysis
or stress test).
In 2021, two assessment sessions were performed: the Annual Risk Profile Assessment performed
in the first half of the year, involving 125 subsidiaries in 43 Countries and the Interim Top Risk
Assessment performed in the second half of the year, relating to the update of the evaluation and
treatment of Eni’s top risks and the main business risks.
The two assessment results were submitted to Eni’s management and control bodies in July and
December 2021. In addition, three monitoring processes were performed on Eni’s top risks.
The monitoring of such risks and the relevant treatment plans allow to analyze the risks evolution
(through update of appropriate indicators) and the progress in the implementation of specific
treatment measures decided by management. The top risks monitoring results were submitted to
the management and control bodies in March, July and October 2021.
Management report | Consolidated financial statements | Annex 30
} Risk Knowledge,
training and
communication
The risk knowledge, training and communication sub-process is aimed at increasing the diffusion
of the culture of risk, at strengthening a common language among the resources that operate in
the risk management area across the different Eni businesses as well as sharing information and
experiences, also through the development of a community of practice.
Eni’s top risks portfolio consists of 20 risks classified in: (i) external risks, (ii) strategic risks and,
finally, (iii) operational risks (see Targets, risks and treatment measures on the following pages).
Targets, risks and treatment measures
SCENARIO MAIN RISK
EVENTS
Price Scenario, risk of unfavourable fluctuations in Brent and other commodities prices compared
to planning assumptions.
STRATEGIC RISK
TREATMENT
MEASURES
} Actions aimed at improving the resilience (reduction of cash neutrality), flexibility (in terms
of investment decisions) and efficiency (capital discipline and action on structural costs) of
the company;
increase in value through the growth of production, M&A actions and business combinations;
integration of gas portfolio with LNG activities also through the development of integrated
initiatives for the enhancement of gas equity (pipes and LNG) leveraging commercial skills,
access to the end and trading markets;
}
}
} targeted strategies for hedging the price of gas equity and hedging of commercial exposures
with Value At Risk Limits, approved by top management;
} maximize the optimization/ABT activities of the portfolio by fully capturing the value linked
to the increased volatility of the gas markets and the flexibility of physical withdrawals;
} maximization of synergies between the renewable capacity under development and power
customer portfolio (integrated energy management and hedging with customer portfolio);
} optimization of traditional production structures and green, organic and recycling business
development.
CLIMATE
CHANGE
MAIN RISK
EVENTS
Climate change referred to the possibility of change in scenario/climatic conditions which may
generate phisical risks and connected to energy transition (legislative, market, technological
and reputational risks) on Eni’s businesses in the short, medium and long-term.
TREATMENT
MEASURES
} Structured governance with the central role of the Board in managing main issues connected
with climate change, presence of specific committees;
} medium and long-term plan to 2050, which combines business development guidelines for
progressive industrial transformation with ambitious targets for reducing GHG emissions
associated with energy products sold by Eni as well as offsetting emissions; four-year plan
with provision for each business of operational actions to support and implement the industrial
transformation indicated in the medium and long-term plan;
} assessment of the resilience of the portfolio through stress tests based on low carbon scenarios;
} flexibility of strategy and investments;
} diversification with the development of new business/products;
} short-term and long-term management incentive plans that include objectives related to the
“climate strategy” consistent with the guidelines defined in the Strategic Plan;
leadership in disclosure and adherence to international initiatives;
}
} key role of low carbon research and technological development.
EXPOSURE TO
LONG-TERM
CONTRACTS
(LONG-TERM SUPPLY
GAS CONTRACTS)
MAIN RISK
EVENTS
Referred to the possible mismatch of the cost of supply and the minimum take constraints
envisaged by supply contracts with respect to current market conditions.
TREATMENT
MEASURES
} Diversified supply portfolio and prices-volumes renegotiation;
} portfolio balancing with sales to hubs (in Italy and in Northern Europe) of volumes not for
}
mainstream distribution channels;
legal defense, continuous control of arbitration management and negotiations by dedicated
organisational structures.
Eni’s target:
COMPANY PROFITABILITY
CORPORATE REPUTATION
RELATIONSHIP WITH STAKEHOLDERS, LOCAL DEVELOPMENT
Eni Annual Report 2021 31
STRATEGIC RISK
DECREASING
DEMAND/
COMPETITIVE
ENVIRONMENT
MAIN RISK
EVENTS
Contraction in demand/Competitive environment relating to the market demand and supply
imbalance or an increase in competitiveness leading to: i) reduction of sale volumes, ii) increase
difficulties in defending customer base/develop growth initiatives, iii) generate adverse dynamics in
the prices of finished products, iv) reduction of demand.
TREATMENT
MEASURES
} Optimization of portfolio management of equity volumes, also in relation to the different
dynamics of the end markets;
} alignment of the supply portfolio with market prices;
} maximization of the export volumes of the LNG plants in the portfolio;
} differentiated strategy of exposure coverage by commodity market and daily monitored;
}
integration of midstream and upstream activities and portfolio management of gas equity
volumes, to facilitate the maximization of their value; identification of projects with low break
even and fast time-to-market;
} consolidation of the Italian network market share with requalification of the Italian network of
properties on premium levels;
} evolution towards the Mobility Services station with an integrated offer of carriers and services;
} specialization in the chemical portfolio towards products with greater added value and
extension of the downstream supply chain towards compounding;
} development of chemical platforms from renewables and recycling;
} organic growth in the customer portfolio abroad and gas/power customer base rebalancing in
}
Italy with Anti-Churn actions;
loyalty of the retail customer base, also through the maximization of the contribution of
businesses related to the provision of services for energy efficiency and distributed generation
and E-mobility;
} consolidation of the market position in the renewable energy sector, in particular in the countries
}
of retail presence through the development of the pipeline of acquired projects;
increase in the flexibility of power plants through targeted investments, specialization in the
capacity market and development of new services, ensuring the best integration with other
business lines.
BIOLOGICAL MAIN RISK
BIOLOGICAL
EVENTS
Risk related to the spread of pandemics and epidemics and the deterioration of health
infrastructure and health response capacity.
EXTERNAL RISK
TREATMENT
MEASURES
} Eni Crisis Unit’s constant management and monitoring to align, coordinate and identify
reactions;
} preparation and implementation of a plan to react to health emergencies (Medical
Emergency Response Plan - MERP) to be adopted by all Eni subsidiaries and employers.
The plan is also aimed at defining a business continuity plan;
restrictive and preventive measures (also through alternative working methods) in offices
and operating sites;
}
} coordination and centralization of protection and medical devices procurement;
} centralized management of international health emergency services.
GEOPOLITICAL MAIN RISK
GEOPOLITICAL
EVENTS
Impact of geopolitical issues on strategic actions and business operations.
TREATMENT
MEASURES
}
Institutional activities with national and international players in order to overcome crisis
situations;
} continuous monitoring of the environment, mainly focused on the critical political/
institutional developments and regulatory aspects which can potentially affect the business;
} enhancement of Eni’s presence leveraging on economic and social issues of Countries where
Eni operates.
Eni’s target:
COMPANY PROFITABILITY
CORPORATE REPUTATION
RELATIONSHIP WITH STAKEHOLDERS, LOCAL DEVELOPMENT
Management report | Consolidated financial statements | Annex 32
COUNTRY MAIN RISK
COUNTRY
EVENTS
Political and social instability related to both political and social instability (in the countries
where the Group operates) and criminal/bunkering events against Eni and its subsidiaries, with
potential repercussions in terms of lower production, project delays, potential damage to people
and assets. Global security risk relates to actions or fraudulent events which may negatively
affect people and material and immaterial assets. Credit and Financing risk related to the credit
proceeds delay and the financial stress of the partners.
EXTERNAL RISK
TREATMENT
MEASURES
} Geographical diversification of the portfolio with exit from marginal assets as well as targeted
and synergic acquisitions of new assets;
institutional relations and negotiations with Ministries/Local Authorities;
}
} presence of a security risk management system supported by specific sites and Countries
analysis of the preventive measures; implementation of emergency plans aimed at maximum
safety of people and the management of activities and assets;
} signing of specific repayment plans for some countries, using already tested contractual or
financial instruments;
request for sovereign guarantees and letters of credit to protect credit positions.
}
ENERGY SECTOR
ENERGY SECTOR
REGULATION
REGULATION
MAIN RISK
EVENTS
Impacts on the operations and competitiveness of the businesses associated with the evolution
of the energy sector regulation.
TREATMENT
MEASURES
} Control of legislative and regulatory evolution; dialogue with institutions to represent Eni’s position;
} definition of strategic and operational actions in line with regulatory changes: increase in the
capacity of biorefineries and diversification of feedstock and products (phase out of palm
oil, agro biofeedstock, Biojet production in Livorno and Gela, biomethane development);
chemical development from renewable sources and development of products from advanced
mechanical recycling; supply to retail customers of energy efficiency services, distributed
generation development and synergies with the renewable business.
STAKEHOLDER MAIN RISK
STAKEHOLDER
EVENTS
Relationships with local stakeholders on Oil & Gas industry activities.
TREATMENT
MEASURES
}
Integration of targets and sustainability projects (i.e. Community Investment) within the
four-year strategic Plan and incentive program;
} stakeholder management through a sustainable approach to activities and social and
territorial development projects;
} enhancement of local content, collaboration agreements with international organizations
(FAO, UNDP, UNESCO, UNIDO...);
} continuous dialogue with local institutions and the territory;
}
respect for and promotion of Human Rights through the operation of the Human Rights
Management Model, analysis of the impact on human rights in business processes.
PERMITTING MAIN RISK
PERMITTING
EVENTS
Permitting, relating to the occurrence of possible delays or failure to issue authorizations,
renewals or permits by the Public Administration with impacts on project times and costs as well
as repercussions in social, environmental and image and reputation terms.
TREATMENT
MEASURES
} Constant dialogue with the institutions also with the aim of proposing legislation;
} hearings in parliamentary committees;
} continuous involvement from the early stages of the authorities and stakeholders on project
}
objectives and progress;
transfer and sharing of know-how with the bodies involved, also through greater involvement
of technical bodies;
} supervision and monitoring of sectoral authorization procedures with the competent Local Authorities;
} visits/inspections of representatives of the institutions to the sites concerned;
} acquisitions of renewable energy plants through strategic partnerships and M&A operations
of already authorized projects;
} start-up of Eni’s central platform functional to the management of the Permitting and
Environmental Compliance process of the operating sites.
Eni’s target:
COMPANY PROFITABILITY
CORPORATE REPUTATION
RELATIONSHIP WITH STAKEHOLDERS, LOCAL DEVELOPMENT
Eni Annual Report 2021 33
OPERATIONAL RISK
ACCIDENTS MAIN RISK
ACCIDENTS
EVENTS
Blowout risks and other accidents affecting the upstream assets, refineries and petrochemical
plants, as well as the transportation of hydrocarbons and derivatives by sea and land (i.e. fires,
explosions, etc.) with damages on people and assets and impact on company profitability and
reputation.
TREATMENT
MEASURES
Insurance coverage;
real time monitoring for wells;
}
}
} proactive monitoring of incidental events with identification of weak signals in the Process
Safety field and completion of the actions resulting from Audit and Risk Assessment related
to Process Safety issues;
technological and operational improvements and continuous implementation of the Asset
Integrity Management system to prevent accidents together with the increase in plant reliability;
}
} standard contractual specifications (EniVoy for spot trips and EniTime for charter trips),
sub-charters of Time Charter Ships to eligible counterparties and on the basis of international
contractual standards;
} vetting: management and coordination of activities relevant for the assessment, inspection,
technical selection of ships and operator ratings and assignment of a rating to operators;
} contract risk Management (Pre/Post award);
} continuing education.
CYBER SECURITY MAIN RISK
CYBER SECURITY
EVENTS
Cyber Security & Industrial espionage refers to cyber attacks aimed at compromising
information (ICT) and industrial (ICS) systems, as well as the subtraction of Eni’s sensitive data.
TREATMENT
MEASURES
} Centralized governance model of Cyber Security, with units dedicated to cyber intelligence
and prevention, monitoring and management of cyber attacks;
} strengthening of Cyber Security Operation infrastructures and services with a new
management model, the extension of services to the cloud and the strengthening of
technologies dedicated to the detection & reaction of attacks;
} cyber threat intelligence: analysis and investigations aimed at proactively identifying
anomalies, threats and cyber breaches concerning accounts, assets or corporate information;
} constant updating and alignment of the rules dedicated to the information security
management and data protection;
} strengthening of critical infrastructures in Italy through the execution of specific Cyber
Protection Programs and Technological Enforcement and monitoring for foreign subsidiaries
aimed at directing and implementing technological measures and solutions in the Field of
Cyber Security;
} strengthening of the corporate culture in the Cyber Security with particular focus to the
behaviors to be adopted (e.g. safe smart working).
INVESTIGATIONS
INVESTIGATIONS
AND PROCEEDINGS
AND PROCEEDINGS
MAIN RISK
EVENTS
Environmental, health and safety proceedings may trigger impacts on company profitability
(costs for remediation activities and/or plant implementation), operating activities and corporate
reputation. Involvement in anti-corruption investigations and proceedings.
TREATMENT
MEASURES
} Specialist assistance for Eni SpA and the Italian and foreign unlisted subsidiaries;
} continuous monitoring of regulatory developments and constant evaluation of the adequacy
of existing presidium and control models;
} enhancement of the process of assigning and managing assignments to external
professionals through new methods aimed at ensuring transparency and traceability;
internal training activities at all levels on the topics of interest;
}
} monitoring of relations with the Public Administration and definition of routes for the
management of relevant problems and for the development of the territory;
} constant discussion with the Ministry of the Environment on the authorization procedures as
a part of remediation activities;
focused communications;
} continuous monitoring of the efficacy and efficiency of reclamation activities;
}
} audit activities on compliance with anti-corruption regulations and 231 Legislative Decree;
} collaboration with stakeholders and the Public Administration (e.g. Ministries, Higher Institute
of Health, Universities).
Eni’s target:
COMPANY PROFITABILITY
CORPORATE REPUTATION
RELATIONSHIP WITH STAKEHOLDERS, LOCAL DEVELOPMENT
Management report | Consolidated financial statements | Annex Governance
Integrity and transparency are
the principles that have inspired
Eni in designing its corporate
governance system1, a key pillar
of the Company’s business model.
The governance system, flanking
our business strategy, is intended
to support the relationship of trust
between Eni and its stakeholders
and to help achieve business
goals, creating sustainable
value for the long-term. Eni is
committed to building a corporate
governance system founded
on excellence in our open
dialogue with the market and all
stakeholders.
Starting from January 1st, 2021, Eni
applies the recommendations of
the 2020 Corporate Governance
Code, which Eni's Board of
Directors adopted on December
23, 2020.
The Corporate Governance Code
identifies “sustainable success”
as the objective that must guide
the action of the management
body and which takes the form
of creating long-term value for
shareholders, taking into account
the interests of other relevant
stakeholders.
Eni, however, has been considering the interest of stakeholders other than shareholders
as one of the necessary elements Directors must evaluate in making informed
decisions since 2006.
With this in mind, we consider ongoing, transparent communication with stakeholders
an essential tool for better understanding their needs. It is part of our efforts to ensure
the effective exercise of shareholders’ rights. In 2021 Eni continued to pursue a dialogue
with the market on matters of governance and to seize the opportunities deriving
from studies and experience at the international level, in spite of the complications
associated with the health emergency which prevented more immediate contacts, in
particular with reference to the shareholders’ meeting. In any case, shareholders were
granted all legal rights and additional information tools in order to allow the greatest
possible involvement.
Furthermore, in line with the principles defined by the Board of Directors, Eni is
committed to creating a Corporate Governance system inspired by criteria of excellence,
also participating in initiatives to improve it. Initiatives in 2021 in particular include the
participation in working groups for in-depth study of issues related to the application of
the new Code, including the Observatory on engagement policies, set up by Assonime (the
Association of Italian joint stock companies) to offer a permanent forum for discussion
between listed companies called upon to define a policy of dialogue with shareholders,
as required by the Corporate Governance Code. The in-depth study of the issue, also
through the analysis of engagement policies adopted by institutional investors and asset
managers as well as by representative trade associations, led to the development of
an engagement policy approved on March 8, 2022 by Eni's Board of Directors, upon
proposal of the Chairman, in agreement with the Chief Executive Officer.
The Eni Corporate Governance
Eni Corporate Governance model
Eni’s Corporate Governance structure is based on the traditional Italian model,
which – without prejudice to the role of the Shareholders’ Meeting – assigns the
management of the Company to the Board of Directors, supervisory functions to the
Board of Statutory Auditors and statutory auditing to the Audit Firm.
Appointment and composition of corporate bodies
Eni’s Board of Directors and Board of Statutory Auditors, and their respective Chairmen, are
elected by the Shareholders’ Meeting. To ensure the presence of Directors and Statutory
Auditors selected by non-controlling shareholders a slate voting mechanism is used.
Eni’s Board of Directors and Board of Statutory Auditors2, whose term runs from May
2020 until the Shareholders’ Meeting called to approve the 2022 financial statements,
are made up of 9 and 5 members, respectively. Three directors and two standing
statutory auditors, including the Chairman of the Board of Statutory Auditors, are elected
(1) For more detailed information on the Eni Corporate Governance system, please see the Corporate
Governance and Shareholding Structure Report drafted in accordance with Article 123-bis of Legislative
Decree no. 58/1998 and published on the Company’s website in the Governance section.
(2) Following the resignation of a standing Statutory Auditor on September 1, 2020, replaced by an alternate
Auditor, the Shareholders' Meeting of May 12, 2021 appointed a Statutory Auditor and an alternate Auditor for
the duration of the term of the Board of Statutory Auditors in office, to restore full membership of the Board
of Statutory Auditors.
Eni Annual Report 2021 35
2.
2
3
by non-controlling shareholders, thereby giving minority shareholders a larger number of representatives
than that provided for under law. In deciding the composition of the Board of Directors, the Shareholders’
Meeting was able to take account of the guidance provided to investors by the previous Board with regard
to diversity, professionalism, experience and competence, also with reference to corporate strategies, the
Company’s transformation and energy transition. The outcome was a balanced and diversified Board of
Directors. The Board of Statutory Auditors also prepared new shareholders’ advice providing indications
on the composition of the body in relation to the tasks it is called upon to perform. The composition of
the Board of Directors and of the Board of Statutory Auditors is also more diversified in gender terms, in
accordance with the provisions of applicable law and the By-laws. The latter was promptly amended to be
compliant with the law in February 2020 in view of the renewal of the corporate bodies. In particular, for
6 consecutive terms the management and control bodies shall be composed of at least 2/5 of the less
represented gender. Furthermore, based on the assessments most recently carried out on February 17,
2022, the number of independent directors on the Board of Directors (73 of the 9 serving, of whom 8 are non-
executive directors including the Chairwoman) remains greater than the number provided for in the Bylaws
and by corporate governance best practices.
COMPOSITION OF THE BOARD OF DIRECTORS
Slate
6
Independence(a)
Gender diversity
Age(b)
3
7
2
5
4
4
majority
minority
independent
non-independent
male
female
40-50 years
51-60 years
61-70 years
(a) Independence as defined by applicable law and Corporate Governance Code.
(b) Figures at December 31, 2021.
The structure of the Board of Directors
The Board of Directors appointed a Chief Executive Officer on May 14, 2020 and established four
internal committees with advisory and recommendation functions: the Control and Risk Committee4, the
Remuneration Committee5,the Nomination Committee and the Sustainability and Scenarios Committee.
The Committees report, through their Chairmen, on the main issues they address at each meeting of the
Board of Directors.
The Board of Directors also retained the Chairman’s major role in internal controls, with specific regard
to the Internal Audit unit. In agreement with the Chief Executive Officer, the Chairman proposes the
(3) Independence as defined by applicable law, to which the Eni By-laws refer, and by the Corporate Governance Code.
(4) As regards the composition of the Control and Risk Committee, Eni requires that at least two members shall have appropriate
experience with accounting, financial or risk management issues, exceeding the provision of the 2018 Corporate Governance Code, in
force at the time of the appointment, confirmed by the new Corporate Governance Code, which recommends only one such member. In
this regard, on May 14, 2020 the Eni Board of Directors determined that 2 of the 4 members of the Committee, including the Chairman,
have the appropriate experience.
(5) In line with the Recommendation of the 2018 Corporate Governance Code, in force at the time of the appointment, confirmed by
the new Corporate Governance Code, the Rules of the Remuneration Committee require that at least one member shall have adequate
expertise and experience in finance or compensation policies. These qualifications are assessed by the Board of Directors at the time
of appointment. In this regard, on May 14, 2020 the Eni Board of Directors determined that all three members of the Committee have
the appropriate expertise and experience. The level of expertise and experience of the Committee members therefore exceeds that
provided for in the Committee Rules and Corporate Governance Code.
Management report | Consolidated financial statements | Annex 36
(a) Member appointed from the
majority list.
(b) Member appointed from the
majority list non-executive and
independent pursuant to law and,
from April 1, 2021, pursuant to
Corporate Governance Code.
(c) Member appointed from the
minority list and independent
pursuant to law and Corporate
Governance Code.
(d) Member appointed from the
majority list and independent
pursuant to law and Corporate
Governance Code.
(e) Member appointed from the
majority list, non-executive.
(f) Member appointed from the
majority list, independent pursuant
to law, and from February 17,
2022, pursuant to Corporate
Governance Code.
(g) Member appointed from the
minority list and independent
pursuant to law and Corporate
Governance Code. From April 29,
2021 he's lead independent
director.
(h) External member.
(i) Chairman of the Board of
Statutory Auditors.
Internal Audit Director.
(l)
(m) Member appointed on May 12,
2021 on the proposal of the
Ministry of Economy and Finance,
independent pursuant to law and
Corporate Governance Code.
*
Alternate Statutory Auditors:
Roberto Maglio - Member
appointed on May 12, 2021 on the
proposal of the Ministry of
Economy and Finance; Claudia
Mezzabotta - Member appointed
from the minority list.
** From April 1, 2021.
*** Also Integrated Compliance
Director.
**** From February 7, 2022, the Chief
Operating Officer Natural
Resources is Guido Brusco.
appointment, revocation and remuneration of its Head and the resources available to it, without prejudice
to the support to the Board of the Control and Risks Committee and the Nomination Committee, to the
extent of their competences, and having heard the Board of Statutory Auditors, and also directly manages
relations with the unit on behalf of the Board of Directors (without prejudice to the unit’s functional
reporting to the Control and Risk Committee and the Chief Executive Officer, as the director in charge of
the internal control and risk management system). The Chairman is also involved in the appointment of
the primary Eni officers responsible for internal controls and risk management, including the officer in
charge of preparing financial reports, the members of the Watch Structure, the Head of Integrated Risk
Management and the Head of Integrated Compliance.
Finally, the Board of Directors, acting on a recommendation of the Chairman, appoints the Secretary,
charged with providing assistance and advice to the Chairman, the Board of Directors and the individual
directors6. In view of this role, the Secretary, who reports to the Board of Directors and, on its behalf, to the
Chairman, must also meet professional requirements, as provided for in the Corporate Governance Code,
while the Chairman oversees his independence.
The following chart summarises the Company’s Corporate Governance structure as at December
31, 2021:
BOARD OF DIRECTORS
CHIEF EXECUTIVE
OFFICER (CEO)
Claudio Descalzi(a)
CHAIRMAN
Lucia Calvosa(b)
DIRECTORS (NON-EXECUTIVE)
} Ada Lucia De Cesaris(d)
C
} Filippo Giansante(e)
} Pietro A. Guindani(c)
C
} Karina A. Litvack(c)
C
} Emanuele Piccinno(f)
} Nathalie Tocci(d)
} Raphael Louis L. Vermeir(g)
C
CONTROL AND
RISK COMMITTEE
NOMINATION
COMMITTEE
SUSTAINABILITY AND
SCENARIOS COMMITTEE
REMUNERATION
COMMITTEE
C
CHAIRMAN
Eni SpA
Shareholders’
Meeting
BOARD OF STATUTORY AUDITORS
INTERNAL
AUDIT DIRECTOR
Gianfranco Cariola**
BOARD SECRETARY
AND COUNSEL
Luca Franceschini***
(Audit Committee SOA)
CHAIRMAN
Rosalba Casiraghi(c)
STATUTORY AUDITORS*
} Enrico Maria Bignami(c)
} Marcella Caradonna(m)
} Giovanna Ceribelli(d)
} Marco Seracini(d)
AUDIT FIRM
PwC SpA
MAGISTRATE OF
THE COURT
OF AUDITORS
Manuela Arrigucci
CHIEF OPERATING OFFICERS
Alessandro Puliti****
(Natural Resources)
Giuseppe Ricci
(Energy Evolution)
OFFICER IN CHARGE
OF PREPARING FINANCIAL REPORTS
Francesco Esposito
231 SUPERVISORY BODY
Attilio Befera (Chairman)(h)
Antonella Alfonsi(h)
Ugo Lecis(h)
Rosalba Casiraghi(i)
Gianfranco Cariola(l)
(6) The Charter of the Board Secretary and Board Counsel, attached to the Rules of the Board of Directors, is available on the Eni
website, in the Governance section.
Eni Annual Report 2021 37
(a) The Board Secretary and Counsel
reports hierarchically and functionally
to the Board of Directors and, on its
behalf, to the Chairman.
(b) The Internal Audit Director reports
hierarchically to the Board and, on its
behalf, to the Chairman, without
prejudice to its functional reporting to
the Control and Risk Committee and to
the CEO, in his capacity as director in
charge of establishing and maintaining
the Internal Control and Risk
Management System. From April 1,
2021 the Internal Audit Director is
Gianfranco Cariola; until March 31,
2021 the Internal Audit Director was
Marco Petracchini.
(c) From February 7, 2022 the Natural
Resources Chief Operating Officer is
Guido Brusco.
(d) Until March 4, 2022.
The following is a chart setting out the current macro-organizational structure of Eni SpA as at
December 31, 2021:
BOARD OF DIRECTORS
CHAIRMAN’S
OFFICE
Lucia Calvosa
Chairman of the Board
Claudio Descalzi
Chief Executive Officer
Office of the CEO
Luca Franceschini
Board Secretary
and Counsel(a)
Gianfranco Cariola
Internal Audit
Director(b)
Roberto Ulissi
Corporate Affairs
and Governance
Director
Luca Franceschini
Integrated Compliance
Director
Grazia Fimiani
Integrated
Risk Management
Director
Stefano Speroni
Legal Affairs and
Commercial Negotiations
Director
Claudio Granata
Human Capital &
Procurement Coordination
Director
Francesca Zarri
Technology,
R&D & Digital
Director
Lapo Pistelli
Public Affairs
Director
Erika Mandraffino
External Communication
Director
Alessandro Puliti
Natural Resources
Chief Operating Officer(c)
Francesco Gattei
Chief Financial
Officer
Giuseppe Ricci
Energy Evolution
Chief Operating Officer
Deputy Luca Bertelli
Deputy Cristian Signoretto
Deputy Umberto Carrara
Deputy Alberto Chiarini(d)
Decision making
The Board of Directors entrusts the management of the Company to the Chief Executive Officer,
while retaining key strategic, operational and organizational powers for itself, especially as regards
governance, sustainability7, internal control and risk management.
Organizational arrangements
In recent years, the Board of Directors has devoted special attention to the Company’s organizational
arrangements, including a number of important measures being taken with regard to the internal
control and risk management system and compliance.
More specifically, the Board decided that the Integrated Risk Management function reports directly
to the Chief Executive Officer and created an Integrated Compliance function, also reporting to
the Chief Executive Officer, separate from the Legal unit. Furthermore, in June 2020, the Board
redefined the organizational structure of the Company with the establishment of two General
Departments (Energy Evolution and Natural Resources), launching a new structure consistent
with the corporate mission and functional to the achievement of strategic objectives.
Among the Board of Directors’ most important duties is the appointment of people to key
management and control positions in the Company, such as the officer in charge of preparing
financial reports, the Head of Internal Audit, the members of the Watch Structure. In performing
these duties, the Board of Directors is supported by the Nomination Committee.
(7) For more information concerning non-financial disclosures, please see the section of the Report on the Consolidated Disclo-
sure of Non-Financial Information (NFI), pursuant to Legislative Decree No. 254/2016.
Management report | Consolidated financial statements | Annex
38
Reporting flows
In order for the Board of Directors to perform its duties as effectively as possible, the Directors
must be in a position to assess the decisions they are called upon to make, possessing appropriate
expertise and information. The current members of the Board of Directors, who have a diversified
range of skills and experience, including on the international stage, are well qualified to conduct
comprehensive assessments of the variety of issues they face from multiple perspectives. The
directors also receive timely complete briefings on the issues on the agenda of the meetings
of the Board of Directors. To ensure this operates smoothly, Board meetings are governed by
specific procedures that establish deadlines for providing members with documentation and the
Chairman ensures that each Director can contribute effectively to Board discussions. The same
documentation is provided to the Statutory Auditors. In addition to meeting to perform the duties
assigned to the Board of Statutory Auditors by Italian law, including in its capacity as the “Internal
Control and Audit Committee”, and by US law in its capacity as the “Audit Committee”, the Statutory
Auditors also participate in the meetings of the Board of Directors and, also through individual
members, at meetings of the Control and Risk Committee thus ensuring the timely exchange of key
information for the performance of their respective duties.
The adequacy and timeliness of reporting flows towards the Board of Directors is subject to periodic
review by the same Board as part of the annual self-assessment process (see next section).
Ongoing training and self-assessment
On an annual basis, the Board of Directors conducts a self-assessment (the Board Review)8, for
which benchmarking against national and international best practices and an examination of Board
dynamics are essential elements, also with a view to provide shareholders with guidance on the
most appropriate professional profiles for members of the Board. Following the Board Review, the
Board of Directors develops an action plan, if necessary, to improve the functioning of the Board
and its Committees.
In 2020, the self-assessment exercise – as reported in last year's Report – was concluded at the
meeting of May 27, 2021, with the presentation of the results of the self-assessment process,
as illustrated by the consultant, identifying, through the use of questionnaires and individual
interviews, role characteristics, responsibility, size, composition and functioning of the Board and
its Committees. In this meeting, based on the results of the self-assessment, an action plan was
approved with some evaluations and proposals for improving the Board activities.
In 2021, the self-assessment was carried out in continuity with the previous financial year, taking
inspiration from the results of the 2020 board review, as well as from the evaluations and proposals
for improvement of the Board activity included in the action plan. In the year 2021 it was decided
not to carry out the peer review.
The self-assessment process was carried out through questionnaires and interviews which
concerned in particular: (i) the size, functioning and composition of the Board and the Committees,
also taking into account elements such as professional characteristics, experience, including in
management, and diversity, including gender, of its members, as well as their seniority in office;
(ii) the strategic and Plan monitoring role, including ESG issues and the internal control and risk
management system. The self-assessment activity carried out for 2021 ended in the meeting
of February 17, 2022, with the presentation of the results of the process, as illustrated by the
consultant, confirming both the positive elements, already emerged from the previous 2020 board
review, and the realization of the improvement initiatives expressed in the action plan, and a further,
very positive evolution of all the issues subject to analysis and evaluation.
In addition, in determining the procedures for the performance of the Board Review, the Eni Board
also assesses whether to perform a Peer Review of the Directors, in which each director expresses
(8) For more information on the Board Review process, see the section devoted to that process in the 2021 Corporate Governance and
Shareholding Structure Report .
Eni Annual Report 2021 39
his or her view of the contribution made by the other Directors to the work of the Board. The
Peer Review, which has been completed five times in the last nine years and was completed,
most recently, in conjunction with the Board Review 2020, is best practice among Italian listed
companies. Eni was among the first Italian companies to perform one, starting in 2012. The peer
review carried out in 2020 highlighted the main dynamics that influence the functioning of the
team, also identifying several strengths as well as areas needing improvement. The Board of
Statutory Auditors also conducted its own self-assessment in 2021.
For a number of years now, Eni has supported the Board of Directors and the Board of Statutory
Auditors with an induction programme, which involves the presentation of the activities and
organization of Eni by top management. following the appointment of the Board of Directors and
the Board of Statutory Auditors, numerous induction sessions were held open to Directors and
Statutory Auditors, in the context of meetings of both the Board and the Board of Statutory Auditors
and the Board Committees, on issues under the remit of the Committees themselves. During
2020 and 2021, the training activity continued through ongoing training and induction activities. In
particular, the issues addressed include those relating to the corporate structure and its business
model, Eni’s mission and decarbonization path, sustainability, governance, compliance, the
internal control and risk management system, accounting and tax issues, remuneration policy and
human capital, as well as internal regulations on transactions with related parties, cybersecurity
and business strategies pursued by the Company in the most important sectors.
The governance of sustainability
Eni’s governance structure reflects the Company’s willingness to integrate sustainability,
including in the form of “sustainable success” as outlined in the Corporate Governance Code,
into its business model. The Board of Directors has a central role in defining sustainability
policies and strategies, acting upon proposal of the CEO, in the identification of annual, four-
year and long-term objectives shared between functions and subsidiaries and in verifying the
related results, which are also presented to the Shareholders’ Meeting. In detail, a central theme
in which the Board of Directors plays a key role is challenge related to the process of energy
transition to a low carbon future9.
In this regard, it should be noted that the self-assessment process relating to 2021, carried out with
the support of an independent external consultant and completed in February 202210, provided
the Directors with the opportunity to reflect specifically on ESG issues and their implementation
in internal policies, the energy transition plan and strategy, climate change, and sustainability in
general, issues on which the Board expressed extremely positive opinions. Furthermore, it should
be noted that even in the self-assessment process relating to 2020, which ended on May 27,
2021, ESG issues had represented a specific point of attention, and, in particular, there was a
positive opinion by the Board on the understanding and attention to these themes, which will be
continuously deepened and detailed.
Furthermore, with a view to pursuing sustainable success, Eni's Board of Directors, in line with the
2020 Corporate Governance Code, promotes dialogue with shareholders and other stakeholders
relevant to the Company. In particular, as already indicated, the Board, upon proposal of the
Chairman in agreement with the Chief Executive Officer, has adopted the policy for managing
dialogue with shareholders, also in order to ensure an orderly and consistent communication.
(9) For further information on the role of the Board of Directors in the process of energy transition and the pursuit of sustainable success,
see the section of this Report relating to the Consolidated Non-Financial Statement, pursuant to Legislative Decree no. 254/2016.
(10) On the basis of the results of the self-assessment process on the last year of term of the outgoing Board, also in relation to the issue
of climate change and the role of the Board in facing this future challenge, the outgoing Board prepared its advice to the Shareholders
on the composition of the future Board which highlighted the advisability of including members with, among other things, skills and
experience to fully understand the decarbonization process as well as, with specific reference to the issue of the energy transition and its
centrality in Eni’s strategic plan, the importance of professionalism with experience in contexts of strategic change of similar complexity
on a global scale, and “Soft skills” such as the ability to integrate sustainability issues into the business vision.
Management report | Consolidated financial statements | Annex 40
Another central issue of interest for the Board of Directors is respect for Human Rights: in 2021
Eni continued the path undertaken, that led to the approval of the Eni Declaration on respect for
human rights by Eni's Board of Directors in December 2018, also implementing a management
model aimed at ensuring the performance of the due diligence process according to the United
Nations Guiding Principles on Business and Human Rights (UNGP).
Furthermore, continuing on the path of transformation, in September 2019 Eni’s Board of Directors
approved a new corporate mission, which takes inspiration from the 17 United Nations Sustainable
Development Goals (SDGs) and highlights Eni’s values related to climate, the environment, access to
energy, cooperation and partnerships for development, respect for people and human rights. The mission
highlights the principles that underpin the Company’s business model aimed at integrating sustainability
into all Company’s activities, having regard not only for climate and environment but also for the
development, enhancement and training of human resources, considering diversity as an opportunity.
THE MAIN SUSTAINABILITY ISSUES ADDRESSED BY THE BOARD IN 2021
2021 Financial sustainability strategy and sustainability reporting
2020 Sustainability Report: “Eni For””
Update of the UK Modern Slavery Act and Australian “Modern Slavery Act” statement
2020 Financial Statements, including the consolidated Non-Financial Statement
The Remuneration Report, including sustainability targets in the definition of performance plans
2020 HSE Report
Four-year and long-term Plan (including non-financial targets)
Thanks to the growing commitment to transparency and to the business model built by Eni in
recent years to create long-term sustainable value, Eni’s stock has achieved the top positions in
the most popular ESG ratings and confirmed its presence in the main ESG indices11. In particular,
in 2021 Eni was included in the MIB® ESG index, the new Borsa Italiana index dedicated to blue
chips that excel in ESG performance.
The Sustainability and Scenarios Committee
In performing its duties in the field of sustainability, the Board is supported by the Sustainability
and Scenarios Committee, established for the first time in 2014 by the Board itself, which provides
advice and recommendations on scenario and sustainability issues. The Committee plays a key
role in addressing the sustainability issues integrated into the Company’s business model12.
(11) For timely updates on ESG indices and ratings of relevance to the financial markets, please refer to the Shareholder Relations page of
the 2021 Corporate Governance Report and to the Investor Relations page of the site.
(12) For more information on the Committee activities in 2020, please see the relevant section in the 2021 Corporate Governance Report.
Eni Annual Report 2021 41
Remuneration Policy
Eni’s Remuneration Policy for its Directors and top management contributes to the Company’s
strategy, through incentive plans which is linked to the achievement of results in terms of econom-
ic-financial profitability, social and environmental sustainability and energy transition, defined with
a long-term view, taking into account the stakeholder’s perspectives.
Eni’s Remuneration Policy is also consistent with the corporate governance model adopted and
with the recommendations of the Corporate Governance Code, providing in particular that the
remuneration of Directors, members of the Board of Statutory Auditors, General Managers and
Managers with strategic responsibilities is functional to the pursuit of sustainable success of the
Company and consider the need to dispose, retain and motivate people with competence and
professionalism required from the position held in the company (Principe XV of the Corporate
Governance Code).
For this purpose, the remuneration of Eni’s top management is established on the basis of the
position and the responsibilities assigned, with due consideration given to market benchmarks for
similar positions in national and international companies similar to Eni in business features, also
in relation to the reference sector and company size, through specific pay comparison carried out
with the support of international suppliers.
As part of Eni Remuneration Policy, considerable importance is given to the variable component,
also on a per-share basis, which is linked to the achievement of certain results, through incentive
plans connected to the fulfilment of preset, measurable and complementary targets which repre-
sent the main Company’s priorities in line with the Company’s Strategic Plan and the expectations
of shareholders and stakeholders, in order to promote a strong focus on results and combine the
operating, economic and financial soundness with social and environmental sustainability, coher-
ently with the long-term nature of the business and the related risk profiles.
The Policy defined for the next term 2020-2023 provides the confirmation, in the Short-Term Plan
of Incentive of Short Term with deferral, of a target related to environmental sustainability and
human capital (weight 25%), focused on safety and reduction of GHG emission intensity (Scope 1
+ Scope 2), as well as, from 2021, a specific target related to the increase of renewables installed
capacity (weight 12.5%).
The 2020-2022 Long-Term Equity Incentive Plan includes a target related to environmental sus-
tainability and energy transition (overall weight 35%), articulated on a series of goals linked to the
processes of decarbonization and energy transition and to the circular economy.
The Remuneration Policy is described in the first section of the Remuneration Report, available on
the Company’s website (www.eni.com) and is presented for a binding vote at the Shareholders’
Meeting, with the cadence required by its duration and in any case at least every three years or in
the event of changes to it13.
(13) In accordance with Art. 123 ter, paragraph 3 bis of the Italian Decree Law No. 58/98.
Management report | Consolidated financial statements | Annex 42
The internal control and risk management system14
Eni has adopted an integrated and comprehensive internal control and risk management system
at different levels of the organizational and corporate structure, based on a set of rules, procedures
and organizational structures aimed at allowing an effective identification, measurement,
management and monitoring of the main risks, in order to contribute to the sustainable success
of the Company.
The internal control and risk management system is also based on Eni’s Code of Ethics, which sets
out the rules of conduct for the appropriate management of the Company’s business and which
must be complied with by all the members of the Board, as well as of the other corporate bodies
and all other third parties working with or in name or for the interest of Eni. Eni has adopted rules
for the integrated governance of the internal control and risk management system, the guidelines
of which were approved by the Board.
Furthermore, on adopting the new Corporate Governance Code, Eni’s Board of Directors established
various actions and application and improvement methods to comply with the recommendations
on the internal control and risk management system (ICRMS), already generally accepted as in line
with the best practices of corporate governance15.
In this respect, in order to strengthen the integration between strategic planning and internal
controls and risk management, upon the proposal of the Chief Executive Officer and with the
support of the Control and Risks Committee, the Board of Directors has called for the definition
of "operational" guidelines for the ICRMS, that exceed the ICRMS model contained in internal
regulations, as part of the Strategic plan, in line with the strategies of the company.
It was also envisaged that the implementation of the operational guidelines of the ICRMS is subject
to periodic monitoring on the basis of a report by the Chief Executive Officer.
Eni has also equipped itself with a reference model for Integrated Compliance, which together with
Model 231 and the Code of Ethics, is aimed at ensuring that all Eni personnel who are contributing
to the achievement of business objectives operate in full compliance with the rules of integrity and
applicable laws and regulations in an increasingly complex national and international regulatory
framework, defining a comprehensive process, developed using a risk-based approach, for
managing activities to prevent non-compliance.
With this in mind, risk assessment methodologies were developed aimed at modulating controls,
calibrating monitoring activities and planning training and communication activities based on the
compliance risk underlying the various cases, to maximize their effectiveness and efficiency. The
Integrated Compliance process was designed to stimulate integration between those who work in
the business activities and the corporate functions that oversee the various compliance risks, both
internal or external to the Integrated Compliance unit.
Furthermore, acting on the proposal of the Chief Executive Officer, having obtained a favourable
opinion from the Control and Risk Committee, the Board of Directors of Eni approved the internal
rules concerning the Market Information Abuse (Issuers). These, by updating the previous Eni
rules for the aspects relating to “issuers”, incorporate the amendments introduced by Regulation
No. 596/2014/EU of April 16, 2014 and the associated implementing rules, as well as the national
regulations, taking account of Italian and foreign institutional guidelines on the matter.
The updated internal rules lay down principles of conduct for the protection of confidentiality
of corporate information in general, to promote maximum compliance, as also required by Eni’s
Code of Ethics and corporate security measures. Eni recognizes that information is a strategic
asset to be managed in such a way as to ensure the protection of the interests of the Company,
shareholders and the market.
(14) For more information, please see the 2021 Corporate Governance Report.
(15) For more information, please see the 2021 Corporate Governance Report.
Eni Annual Report 2021 43
In order to ensure the protection of corporate assets, of the interests of shareholders and the
market, as well as the transparency and integrity of conduct, Eni has adopted – in compliance
with Consob regulatory provisions – internal rules on transactions involving the interests of
directors and statutory auditors and transactions with related parties. These rules were most
recently updated in 2021 by the Board of Directors, with the unanimous and favourable opinion
of the Control and Risks Committee, with the aim of ensuring regulatory compliance, but also
taking into account the experience gained, as well as the indications of the Board Committees and
supervisory bodies.
An integral part of the Eni internal control system is the internal control system for financial
reporting, the objective of which is to provide reasonable certainty of the reliability of financial
reporting and the ability of the financial report preparation process to generate such reporting in
compliance with generally accepted international accounting standards.
Eni’s CEO, Chief Financial Officer (CFO) and Head of Accounting and Financial Statements and
budget manager, in his capacity as officer in charge of preparing financial reports, are responsible
for planning, establishing and maintaining the internal control system for financial reporting. A
central role in the Company’s internal control and risk management system is played by the Board
of Statutory Auditors, which in addition to the supervisory and control functions provided for in
the Consolidated Law on Financial Intermediation, also monitors the financial reporting process
and the effectiveness of the internal control and risk management systems, consistent with the
provisions of the Corporate Governance Code, including in its capacity as the “Internal Control and
Audit Committee” pursuant to Italian law and as the “Audit Committee” under US law.
Management report | Consolidated financial statements | Annex 44
Natural
Resources
Relazione sulla gestione | Bilancio consolidato | Bilancio di esercizio | Allegati 45
Eni Relazione Finanziaria Annuale 2021 46
Exploration & Production
>700 mmboe
new exploration equity resources
discovered at a competitive
cost of 1.3 $/barrel
HyNet Project
for the CO2 geological capture
and storage in the UK.
Signed 19 Memorandum
of Understanding with local
industries for the storage
of their emissions
Net carbon footprint
upstream -26% vs. 2018
In 2021 achieved progress in line with
new target of -65% in 2025
and net zero in 2030
KEY PERFORMANCE INDICATORS
2021
2020
2019
Total recordable incident rate (TRIR)(a)
(total recordable injuries/worked hours) X 1,000,000
of which: employees
contractors
Profit per boe(b)(c)
Opex per boe(d)
Cash flow per boe
Finding & Development cost per boe(c)(d)
Average hydrocarbon realization
Production of hydrocarbons(d)
Net proved reserves of hydrocarbons
Reserves life index
Organic reserves replacement ratio
Employees at year end
of which outside Italy
Direct GHG emissions (Scope 1)(a)
Direct GHG emissions (Scope 1)/operated hydrocarbon gross production(a)(e)
Methane fugitive emissions(a)
Volumes of hydrocarbon sent to routine flaring(a)
Net carbon footprint upstream (Scope 1+2)(f)
Oil spills due to operations (>1 barrel)(a)
Re-injected production water(a)
($/boe)
(kboe/d)
(mmboe)
(years)
(%)
(number)
(mmtonnes CO2eq.)
(tonnes CO2eq./kboe)
(ktonnes CH4)
(billion Sm³)
(mmtonnes CO2eq.)
(barrels)
(%)
0.25
0.09
0.30
4.8
7.5
20.6
20.4
51.49
1,682
6,628
10.8
55
9,409
6,045
22.3
20.2
9.2
1.2
11.0
436
58
0.28
0.18
0.31
3.8
6.5
9.8
17.6
28.92
1,733
6,905
10.9
43
9,815
6,123
21.1
20.0
11.2
1.0
11.4
882
53
0.33
0.18
0.37
7.7
6.4
18.6
15.5
43.54
1,871
7,268
10.6
92
10,272
6,781
22.8
19.6
21.9
1.2
14.8
988
58
(a) Calculated on 100% operated assets.
(b) Related to consolidated subsidiaries.
(c) Three-year average.
(d) Includes Eni’s share of equity-accounted entities.
(e) Hydrocarbon gross production from fields fully operated by Eni (Eni’s interest 100%) amounting to 1,041 mmboe, 1,009 mmboe and 1,114 mmboe in 2021, 2020 and 2019, respectively.
(f) Calculated on equity bases and included carbon sink.
Eni Annual Report 2021
47
Italy
Rest of Europe
North Africa
Egypt
Sub-Saharan Africa
Kazakhstan
Rest of Asia
Americas
Australia and Oceania
Liquids reserves
Natural gas reserves
3.26 bboe
3.37 bboe
Upstream intensity emission
(CO2eq./kboe)
-25%
Scenario vs. Performance
2014
2018
2021
2019
2020
2021
Direct GHG emission
(Scope 1)/operated hydrocarbons
gross production
Adjusted operating profit (€ bln)
Brent ($/b)
Eni - average price realization ($/boe)
Performance of the year
Total recordable injury rate (TRIR) was 0.25, down by 9%, confirming Eni’s commitment to reduce injuries in
each of its operations.
Direct GHG emissions (Scope 1) of the operated assets reported an increase of 6% from 2020, mainly due
to the resumption of activities.
Direct GHG emissions (Scope 1)/operated hydrocarbon gross production was 20.2 tonnes CO2 eq./ kboe,
substantially in line with 2020.
Methane fugitive emissions of the operated assets were down by 18% from 2020 mainly as result of the
constant commitment to periodic on-site monitoring and the related maintenance activities.
Net Carbon Footprint upstream (GHG emissions Scope 1 + Scope 2 accounted for on an equity basis net
of carbon sink) slightly decrease from 2020.
Volumes of hydrocarbon sent to routine flaring of the operated assets increased by 12% from 2020, mainly
due to the resumption of activities at the Abu-Attifel and El Feel plants in Libya, shut down in 2020.
Oil spills due to operations more than halved from 2020, leveraging on to the technical measures adopted
in the operating activities.
Re-injected production water increased from 2020 thanks to the complete recovery of the re-injection
activities in Congo and Libya.
Oil and natural gas production was 1.7 million boe/d before price effects. Growth was fueled by continued
production ramp-ups at the giant Zohr in Egypt and Merakes (Indonesia) gas fields, with the latter achieving
first gas in April. Performance was negative impacted by greater maintenance activity in Norway, Italy and
the UK, lower activity in Nigeria and mature fields decline.
Net proved reserves at December 31, 2021 amounted to 6.6 bboe based on a reference Brent price of 69
$/barrel. The all-sources replacement ratio was 55%; 73% three-year average all sources replacement ratio.
The reserves life index was 10.8 years (10.9 years in 2020).
Management report | Consolidated financial statements | Annex 48
Decarbonization initiatives
The projects of the CO2 geological capture and sequestration using depleted fields as well as reusing
in other production cycle are a key drivers of Eni transition strategy. In particular, the HyNet integrated
project in the United Kingdom where Eni operates (100% interest) the transport and storage of CO2
in depleted gas fields in the Liverpool Bay area. In October 2021 the project has been selected by UK
authorities between the two priority CCS projects in the country and granted access to priority public
funding by the UK government Carbon Capture Storage Infrastracture Fund (CCSIF) manage by BEIS
(Business, Energy & Industrial Strategy department) to support with £1 billion the realization in the
United Kingdom of at least 4 CCS hubs by 2030. The project will ensure significant support to the
UK’s decarbonisation process with 10 mmtonnes/year of CO2 storage at full capacity compared to
the recent ambition in the Net Zero Strategy (October 2021) of 20-30 mmtonnes/year of CO2 storage
capacity as well as with 80% to the 5 GW of low-carbon hydrogen, target set by the UK government
for 2030. Other ongoing initiative concerned a plan to build a hub for the capture and storage of CO2 in
depleted fields off the coast of Ravenna which will be designed to store 500 mmtonnes. Leveraging on
the development of CCS projects, the target is to reach a storage capacity of 7 mmtonnes/year net to
Eni in 2030.
Progressed Eni’s initiatives within the Natural Climate Solutions, such as projects focusing on the forest’s
protection, conservation and sustainable management, mainly in developing Countries, by means of the
REDD+ project scheme which was designed by the United Nations. In particular, in 2021, Eni launched other
projects in the Republic of Zambia and Tanzania, in addition to Luangwa Community Forest project. Eni
continues to evaluate further initiatives in different Countries by means of partnerships with governments
and international players in Africa, Latin America, and Asia. Planned and defined initiatives will ensure the
offsetting of residual emissions in the Eni’s decarbonization strategy.
In Africa signed agreements with the government of Kenya, Angola, Congo, Ivory Coast, Benin, Mozambique
and Rwanda for biofuel projects through the set-up of integrated agro-biofeedstock supply chains to supply
renewable feedstock to Eni’s biorefineries, without impacting the local food chain and to decarbonize the
local energy mix. In particular, these projects aimed at the production of such feedstock ensure security
and strategic supply of sustainable feedstock (Low ILUC) and de-risking with respect to market purchases.
The development model of these initiatives also enhances environmental issues, as it contributes to the
decarbonization of marketed products and allows the recovery of degraded land and tackle deforestation,
as well as social issues with positive impacts on the country such as employment, rural income and market
access for farmers. The model enhances human rights protections and promotes the health, food security
and access rights to land of country populations.
Finalized the agreement with the Bonifiche Ferraresi Group aimed at establishing an equal joint venture
for the development of agricultural research and experimentation projects of oil plant seeds to be used as
feedstock in Eni’s biorefineries. Based on the agreement, Eni purchased a minority stake in the subsidiary
of BF Bonifiche Ferraresi and in BF SpA.
Solenova, a joint venture between Eni and Sonangol, reached the Final Investment Decision (FID) and
signed the EPC contract for the first phase start-up of Caraculo’s photovoltaic project, located in Namibe,
Angola, to be launched in fourth quarter of 2022. The plant will have a total capacity of 50 MW and will be
implemented by stages, the first set to reach a capacity of 25 MW.
Signed a Memorandum of Understanding with the Australian company Santos to jointly seek cooperation
opportunities within CO2 capture and storage or utilization project and to enhance partnership in the
hydrocarbon developments in northern Australia. Other agreements finalized in Egypt and Norway.
Exploration
Exploration activity achieved excellent results in 2021 with the discovery of 700 mmboe of new resources
at a competitive cost of 1.3 $/boe. Exploration is still a distinctive approach of Eni’s upstream model, and
the achieved results have allowed Eni to get the title of “explorer of the Year 2021” by the World Energy
Capital Assembly.
Eni Annual Report 2021 49
Exploration confirmed its track-record with the Baleine discovery in the CI-101 operated block, in the
offshore Ivory Coast, which identified an estimated potential approximately 2 billion barrels of oil in
place and 2.4 trillion cubic feet (TCF) of associated gas. The final investment decision for Phase I
has been reached after five months from discovery. In particular, defined with the authorities of the
Country the development plan of the Baleine discovery, through a phased fast-track development plan,
with an expected start-up in early production in the first half of 2023 and a subsequent ramp-up. The
project will be a Scope 1 and 2 net-zero development, the first of this kind in Africa. Carbon neutrality
will leverage on certain emission reduction drivers by means of improved cookstoves (sustainable
development) and forest conservation (REDD+) initiatives. Baleine confirms Eni’s commitment to
generate high value while reducing the carbon footprint and focus to improve the time-to-market of
exploration discoveries.
Achieved near-field exploration successes in Angola, where the Cuica-1 oil discovery will ensure to extend the
useful life of the FPSO which operates the block, in Ghana, with the Eban oil discovery in the CTP 4 operated
block near to the Sankofa production hub, and in Mexico, with the oil discovery in the Sayuilta exploration
prospect following the Saasken discovery made in 2020. Other significant exploration successes were
made in Egypt, Indonesia, Norway and the United Kingdom.
Reloading exploration portfolio with the addition of approximately 15,800 square kilometers of new leases
in Angola, the Ivory Coast, Egypt, the UAE, Norway, the UK and Vietnam.
In 2021 exploration expenses were €558 million (€510 million in 2020) and included the write-off of
unsuccessful wells amounting to €364 million (€314 million in 2020), which also related to the write-off of
unproved exploration rights, if any, associated to projects with negative outcome. In particular, exploration
and appraisal activities comprised write-offs of unsuccessful exploration wells costs for €331 million
mainly in Gabon, Montenegro, Myanmar, Bahrain, Egypt and Angola. Write-offs of €35 million are related to
exploration licenses due mainly to exiting from marginal areas for geopolitical or environmental issues. In
addition, 100 exploratory drilled wells are in progress at year-end (52.4 net to Eni).
Development
Achieved production start-up of the following projects:
•
•
•
in Indonesia, in the operated East Seppingaan block (Eni’s interest 65%) in the deep offshore eastern
Kalimantan with the Merakes gas project;
in Angola, with the tie-in of the satellite discoveries of Cuica and Cabaca North in offshore operated
Block 15/06, leveraging on the existing FPSO in the area;
in the onshore Sharjah Emirate, with start-up of the Mahani gas and condensate project in the Area B
concession (Eni’s interest 50%), just two years after signing the concession agreement and one year
since discovery.
In Angola signed with BP an agreement for establishing the Azule Energy, a new jointly controlled venture,
which will combine the two partners’ upstream portfolio in the Country to accelerate the assets development.
Eni and the private equity fund HitecVision, shareholders of Vår Energi, have finalized the process of listing
the investee at the Norwegian stock exchange placing about 11.2% interest.
Development expenditure amounted to €3.4 billion, directed mainly outside Italy, in particular in Egypt,
Angola, the United States, Mexico, the United Arab Emirates, Indonesia and Iraq.
Eni progressed its commitment to initiatives and programs to promote local development through a
distinctive approach that is also based on collaborations with other internationally recognized players
as well as with public-private partnerships. In particular, in January 2022 signed an agreement with
the United Nations Educational, Scientific and Cultural Organization (UNESCO) in Mexico to identify
joint initiatives that contribute to the sustainable development of the domestic market; in February
2022 in collaboration with the European Union and UNICEF, launched a project in partnership with
the Governorate of Basra in Iraq, aimed at improving water quality. In addition, initiatives advanced in
Angola with Halo Trust, for the land demining in Benguela area, and the program with FAO to promote
water access in Nigeria.
In 2021, overall R&D expenditure amounted to €65 million (€59 million in 2020); a total of 6 new patents were filed.
Management report | Consolidated financial statements | Annex 50
RESERVES
OVERVIEW
The Company has adopted comprehensive classification criteria for the estimate of proved, proved
developed and proved undeveloped oil and gas reserves in accordance with applicable US Securities and
Exchange Commission (SEC) regulations, as provided for in Regulation S-X, Rule 4-10. Proved oil and gas
reserves are those quantities of liquids (including condensates and natural gas liquids) and natural gas
which, by analysis of geoscience and engineering data, can be estimated with reasonable certainty to
be economically producible from a given date forward, from known reservoirs, under existing economic
conditions, operating methods, and government regulations prior to the time at which contracts providing
the right to operate expire, unless evidence indicates that renewal is reasonably certain.
Oil and natural gas prices used in the estimate of proved reserves are obtained from the official survey
published by Platt’s Marketwire, except when their calculation derives from existing contractual conditions.
Prices are calculated as the unweighted arithmetic average of the first-day-of-the-month price for each
month within the 12-month period prior to the end of the reporting period. Prices include consideration of
changes in existing prices provided only by contractual arrangements.
Engineering estimates of the Company’s oil and gas reserves are inherently uncertain. Although
authoritative guidelines exist regarding engineering criteria that have to be met before estimated oil and
gas reserves can be designated as “proved”, the accuracy of any reserves estimate is a function of the
quality of available data and engineering and geological interpretation and evaluation. Consequently,
the estimated proved reserves of oil and natural gas may be subject to future revision and upward and
downward revisions may be made to the initial booking of reserves due to analysis of new information.
Proved reserves to which Eni is entitled under concession contracts are determined by applying Eni’s
equity interest to total proved reserves of the contractual area, until expiration of the relevant mineral right.
Eni’s proved reserves entitlements under PSAs are calculated so that the sale of production entitlements
cover expenses incurred by the Group for field development (Cost Oil) and recognize a share of profit set
contractually (Profit Oil). A similar scheme applies to service contracts.
RESERVES GOVERNANCE
Eni retains rigorous control over the process of booking proved reserves, through a centralized model of
reserves governance. The Reserves Department of the Exploration & Production segment is in charge of:
(i) ensuring the periodic certification process of proved reserves; (ii) updating the Company’s guidelines
on reserves evaluation and classification and the internal procedures; and (iii) providing training of staff
involved in the process of reserves estimation. Company guidelines have been reviewed by DeGolyer
and MacNaughton (D&M), an independent petroleum engineering company, which has stated that those
guidelines comply with the SEC rules1. D&M has also stated that the Company guidelines provide reasonable
interpretation of facts and circumstances in line with generally accepted practices in the industry whenever
SEC rules may be less precise. When participating in exploration and production activities operated by other
entities, Eni estimates its share of proved reserves on the basis of the above guidelines.
The process for estimating reserves, as described in the internal procedure, involves the following roles
and responsibilities: (i) the business unit managers (geographic units) and Local Reserves Evaluators
(LRE) are in charge with estimating and classifying gross reserves including assessing production
profiles, capital expenditure, operating expenses and costs related to asset retirement obligations; (ii)
the petroleum engineering department and the operations unit at the head office verify the production
profiles of such properties where significant changes have occurred and operating expenses, respectively;
(iii) geographic area managers verify the commercial conditions and the progress of the projects; (iv) the
Planning and Control Department provides the economic evaluation of reserves; and (v) the Reserves
Department, through the Headquarter Reserves Evaluators (HRE), provides independent reviews of
(1) The reports of independent engineers are available on Eni website eni.com section Publications/Integrated Annual Report 2016.
Eni Annual Report 2021 51
fairness and correctness of classifications carried out by the above mentioned units and aggregates
worldwide reserves data.
The head of the Reserves Department attended the “Politecnico di Torino” and received a Master of Science
degree in Mining Engineering in 2000. He has more than 20 years of experience in the oil and gas industry.
Staff involved in the reserves evaluation process fulfil the professional qualifications requested by the
role and comply with the required level of independence, objectivity and confidentiality in accordance
with professional ethics. Reserves Evaluators qualifications comply with international standards defined
by the Society of Petroleum Engineers.
RESERVES INDEPENDENT EVALUATION
Eni has its proved reserves audited on a rotational basis by independent oil engineering companies2. The
description of qualifications of the persons primarily responsible for the reserves audit is included in the
third-party audit report. In the preparation of their reports, independent evaluators rely, upon information
furnished by Eni without independent verifications with respect to property interests, production, current
costs of operations and development, sales agreements, prices and other factual information and data
that were accepted as represented by the independent evaluators. These data, equally used by Eni in its
internal process, include logs, directional surveys, core and PVT (Pressure Volume Temperature) analysis,
maps, oil/gas/water production/injection data of wells, reservoir studies, technical analysis relevant to
field performance, development plans, future capital and operating costs.
In order to calculate the net present value of Eni’s equity reserves, actual prices applicable to hydrocarbon
sales, price adjustments required by applicable contractual arrangements and other pertinent information
are provided by Eni to third party evaluators. In 20213 Ryder Scott Company, DeGolyer and MacNaughton
and Societé Generale de Surveillance provided an independent evaluation of approximately 27% of Eni’s
total proved reserves at December 31, 20214, confirming, as in previous years, the reasonableness of Eni
internal evaluation.
In the 2019-2021 three-year period, 93%5 of Eni total proved reserves were subject to an independent
evaluation. As at December 31, 2021, Belayim in Egypt and Area 1 in Mexico were the main Eni property,
which did not undergo an independent evaluation in the last three years.
MOVEMENTS IN NET PROVED RESERVES
Eni’s net proved reserves were determined taking into account Eni’s share of proved reserves of equity-
accounted entities. Movements in Eni’s 2021 proved reserves were as follows:
Estimated net proved reserves at December 31, 2020
5,984
921
(mmboe)
Consolidated
subsidiaries
Equity-accounted
entities
Extensions, discoveries, revisions of previous estimates
and improved recovery, excluding price effect
Price effect
Reserve additions, total
Portfolio
Production of the year
Estimated net proved reserves at December 31, 2021
Reserves replacement ratio, all sources
(%)
68
48
76
148
144
196
116
(3)
(526)
5,571
224
(88)
1,057
Total
6,905
340
(3)
(614)
6,628
55
(2) From 1991 to 2002, DeGolyer and MacNaughton; from 2003, also Ryder Scott. In 2018 e 2021, the Societé Generale de Surveillance (SGS)
Company also provided an independent certification.
(3) The reports of independent engineers are available on Eni website eni.com section Publications/Annual Report 2021.
(4) Includes Eni’s share of proved reserves of equity accounted entities.
(5) The share of reserve subjected to independent evaluation increases to 94% also including the third-party evaluation provided by the
Gaffney Cline company in 2020 on the reserves of the Angola LNG project (Eni’s interest 13.6%) required by the shareholders of the consortium
operating company.
Management report | Consolidated financial statements | Annex
52
ESTIMATED NET PROVED HYDROCARBONS RESERVES
Consolidated subsidiaries
Italy
Developed
Undeveloped
Rest of Europe
Developed
Undeveloped
North Africa
Developed
Undeveloped
Egypt
Developed
Undeveloped
Sub-Saharan Africa
Developed
Undeveloped
Kazakhstan
Developed
Undeveloped
Rest of Asia
Developed
Undeveloped
Americas
Developed
Undeveloped
Australia and Oceania
Developed
Undeveloped
Total consolidated subsidiaries
Developed
Undeveloped
Equity-accounted entities
Rest of Europe
Developed
Undeveloped
North Africa
Developed
Undeveloped
Sub-Saharan Africa
Developed
Undeveloped
Americas
Developed
Undeveloped
Total equity-accounted entities
Developed
Undeveloped
i
s
d
u
q
L
i
)
l
b
b
m
m
(
s
a
g
l
a
r
u
t
a
N
)
f
c
b
(
2021
197
146
51
34
34
393
225
168
210
164
46
589
435
154
710
641
69
476
262
214
237
164
73
1
1
918
729
189
247
242
5
2,272
781
1,491
4,152
3,656
496
2,953
1,759
1,194
1,705
1,705
1,522
971
551
274
210
64
428
266
162
s
n
o
b
r
a
c
o
r
d
y
H
)
e
o
b
m
m
(
369
283
86
81
80
1
820
373
447
992
852
140
1,145
766
379
1,032
963
69
762
445
317
288
203
85
82
51
31
i
s
d
u
q
L
i
)
l
b
b
m
m
(
s
a
g
l
a
r
u
t
a
N
)
f
c
b
(
2020
178
146
32
34
31
3
383
243
140
227
172
55
624
469
155
805
716
89
579
297
282
224
143
81
1
1
348
280
68
208
194
14
2,201
1,014
1,187
4,692
4,511
181
3,864
1,751
2,113
2,003
2,003
1,589
674
915
175
109
66
474
315
159
s
n
o
b
r
a
c
o
r
d
y
H
)
e
o
b
m
m
(
243
199
44
73
68
5
798
434
364
1,110
1,022
88
1,352
799
553
1,182
1093
89
879
424
455
256
162
94
91
60
31
i
s
d
u
q
L
i
)
l
b
b
m
m
(
s
a
g
l
a
r
u
t
a
N
)
f
c
b
(
2019
194
137
57
41
37
4
468
301
167
264
149
115
694
519
175
746
682
64
491
245
246
225
148
77
1
1
752
657
95
262
242
20
2,738
1,374
1,364
5,191
4,777
414
4,103
1,858
2,245
1,969
1,969
1,349
685
664
240
186
54
507
322
185
s
n
o
b
r
a
c
o
r
d
y
H
)
e
o
b
m
m
(
333
258
75
89
82
7
974
553
421
1,225
1033
192
1,453
863
590
1,108
1046
62
742
372
370
268
182
86
95
61
34
2,847
2,072
775
14,471
10,319
4,152
5,571
4,016
1,555
3,055
2,218
837
15,554
10,851
4,703
5,984
4,261
1,723
3,124
2,219
905
17,111
12,070
5,041
6,287
4,450
1,837
378
175
203
9
9
21
9
12
6
6
414
199
215
654
457
197
10
10
1,285
165
1,120
1,460
1,460
3,409
2,092
1,317
502
261
241
10
10
263
39
224
282
282
1,057
592
465
6,628
4,608
2,020
400
176
224
12
12
18
15
3
30
30
460
233
227
510
415
95
14
14
364
170
194
1,559
1,559
2,447
2,158
289
496
254
242
14
14
87
47
40
324
324
921
639
282
424
219
205
12
12
10
7
3
31
31
477
269
208
772
597
175
14
14
287
88
199
1,648
1,648
2,721
2,347
374
567
330
237
16
16
63
23
40
335
335
981
704
277
3,515
2,451
1,064
18,001
13,009
4,992
6,905
4,900
2,005
3,601
2,488
1,113
19,832
14,417
5,415
7,268
5,154
2,114
Total including equity-accounted entities
Developed
Undeveloped
3,261
2,271
990
17,880
12,411
5,469
Eni Annual Report 2021
53
Net proved reserves as of December 31, 2021 were 6,628 mmboe, of which 5,571 mmboe of consolidated
subsidiaries. Net additions to proved reserves were 340 mmboe and derived from: (i) revisions of previous
estimates were up by 258 mmboe, and mainly derived from the E Structure fields in Libya, the Val d’Agri field
in Italy, the Karachaganak field in Kazakhstan and the Zubair field in Iraq. Revisions to previous estimates
include a positive price effect of 196 mmboe, mainly due to an increased Brent reference price (from 41 $/
barrel in 2020 to 69 $/barrel in 2021) resulting in a recovery of volumes reserves which were uneconomical
in the 2020 scenario partially offset by net lower reserves entitlements under PSA contracts; (ii) extensions
and discoveries were up by 70 mmboe, mainly due to the final investment decision made for the New Gas
Consortium project as well as the Cuica and the Ndungu projects in the operated Block 15/06 in Angola;
the Tommeliten Alpha Development project in the PL044 license and other minor assets in Norway; and the
BKNEP, Zas and Ret project in the Berkine North in Algeria; and (iii) improved recovery of 12 mmboe mainly
related to the Oooguruk project in the United States.
Portfolio transactions include the disposal of the OML 17 block in Nigeria and acquisitions of the Lucius
field in the United States and the Conwy field in the United Kingdom.
The organic6 and all sources reserves replacement ratio was 55%. The reserves life index was 10.8 years
(10.9 years in 2020).
For further information, please see the additional information on Oil & Gas producing activities required by
the SEC in the notes to the consolidated financial statements.
PROVED UNDEVELOPED RESERVES
Proved undeveloped reserves as of December 31, 2021 totaled 2,020 mmboe, of which 990 mmbbl of liquids
mainly concentrated in Africa and Asia and 5,469 bcf of natural gas mainly located in Africa. Proved undeveloped
reserves of consolidated subsidiaries amounted to 775 mmbbl of liquids and 4,152 bcf of natural gas.
Movements in Eni’s 2021 proved undeveloped reserves were as follows:
(mmboe)
Proved undeveloped reserves as of December 31, 2020
Additions
Extensions and discoveries
Revisions of previous estimates
Improved recovery
Proved undeveloped reserves as of December 31, 2021
2,005
(232)
62
174
11
2,020
In 2021, Eni matured 232 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 are related to the following fields/projects: Merakes in Indonesia, Mitzon in
Mexico, as well as LNG project in Nigeria.
For further information, please see the additional information on Oil & Gas producing activities required
by the SEC in the notes to the consolidated financial statements.
In 2021, capital expenditures amounted to approximately €4.8 billion.
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 0.45 bboe of proved
undeveloped reserves have remained undeveloped for five years or more at the balance sheet date
(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.
Management report | Consolidated financial statements | Annex 54
and decreased from 2020. The proved undeveloped reserves that have remained undeveloped for five
years or more at the balance sheet date mainly related to: (i) the Zubair field in Iraq (0.10 bboe), where
development of PUDs area making continuing progress by means of drilling additional production wells
that were hooked to the existing treatment facilities, which have been already dimensioned based on
the expected full field production plateau of 700 kboe/d; (ii) certain Libyan gas fields (0.3 bboe) where
development completion and production start-ups are planned according to the delivery obligations set
forth in a long-term gas supply agreement currently in force and (iii) other fields in Italy (0.05 bboe) where
development activities are in progress.
DELIVERY COMMITMENTS
Eni, through consolidated subsidiaries and equity-accounted entities, sells crude oil and natural gas from its
producing operations under a variety of contractual obligations. Some of these contracts, mostly relating to
natural gas, specify the delivery of fixed and determinable quantities.
Eni is contractually committed under existing contracts or agreements to deliver in the next three years mainly
natural gas to third parties for a total of approximately 623 mmbboe from producing assets located mainly in
Algeria, Australia, Egypt, Ghana, Indonesia, Kazakhstan, Libya, Nigeria, Norway and Venezuela.
The sales contracts contain a mix of fixed and variable pricing formulas that are generally indexed to the
market price for crude oil, natural gas or other petroleum products. Management believes it can satisfy these
contracts from quantities available mainly from production of the Company’s proved developed reserves and
supplies from third parties based on existing contracts. Production is expected to account for approximately
93% of delivery commitments.
Eni has met all contractual delivery commitments as of December 31, 2021.
OIL AND GAS PRODUCTION
In 2021, oil and natural gas production averaged 1.682 mmboe/d, down by 2.2% from 2020, net of price
effects, due to higher maintenance activity at fields in Norway, Italy and the United Kingdom, lower activity in
Nigeria and mature fields decline. These decreases were partly offset by continuing production ramp-ups in
Egypt and Indonesia at the flagship projects of Zohr and Merakes, in a context of strong global demand for gas
and LNG and also thanks to the restart of the Damietta liquefaction plant, as well as the progressive easing of
OPEC+ production quotas particularly in the United Arab Emirates and Kazakhstan.
Liquids production amounted to 813 kbbl/d, down by 4% from 2020. The price effects, the reduction in Nigeria
and mature fields decline were partly offset by production growth in Egypt and the progressive easing of
OPEC+ production quotas.
Natural gas production amounted to 4,613 mmcf/d down by 2% compared to 2020. Mature fields decline and
lower production in Nigeria were partly offset by the ramp-ups at Zohr (Egypt) and Merakes (Indonesia) fields,
boosted by strong global demand.
Oil and gas production sold amounted to 567 mmboe. The 47 mmboe difference over production (614 mmboe)
mainly reflected volumes of natural gas consumed in operations (42 mmboe), changes in inventory levels and
other variations. Approximately 63% of liquids production sold (295 mmbbl) was destined to Eni’s Refining &
Marketing business. About 16% of natural gas production sold (1,444 bcf) was destined to Eni’s Global Gas &
LNG Portfolio segment.
Eni Annual Report 2021 ANNUAL OIL AND NATURAL GAS PRODUCTION(a)(b)
Consolidated subsidiaries
Italy
Rest of Europe
United Kingdom
North Africa
Algeria
Libya
Tunisia
Egypt
Sub-Saharan Africa
Angola
Congo
Ghana
Nigeria
Kazakhstan
Rest of Asia
China
Indonesia
Iraq
Pakistan
Timor Leste
Turkmenistan
United Arab Emirates
Americas
Ecuador
Mexico
United States
Australia and Oceania
Australia
Equity-accounted entities
Angola
Norway
Tunisia
Venezuela
55
s
n
o
b
r
a
c
o
r
d
y
H
)
e
o
b
m
m
(
45
20
20
138
30
106
2
129
133
42
32
15
44
55
66
1
21
15
7
3
19
24
2
1
21
10
10
s
n
o
b
r
a
c
o
r
d
y
H
)
e
o
b
m
m
(
39
19
19
93
30
61
2
106
127
37
27
15
48
60
64
17
17
5
4
3
18
28
5
23
6
6
i
s
d
u
q
L
i
)
l
b
b
m
m
(
s
a
g
l
a
r
u
t
a
N
)
f
c
b
(
2019
19
8
8
61
23
37
1
27
91
37
22
9
23
36
32
1
10
3
18
20
2
1
17
1
1
137
64
64
419
41
374
4
551
227
25
54
36
112
100
184
113
29
37
2
3
24
1
23
51
51
s
n
o
b
r
a
c
o
r
d
y
H
)
e
o
b
m
m
(
30
15
15
95
31
62
2
131
106
37
25
13
31
53
65
23
14
4
3
3
18
25
6
19
6
6
i
s
d
u
q
L
i
)
l
b
b
m
m
(
s
a
g
l
a
r
u
t
a
N
)
f
c
b
(
2020
17
8
8
41
19
21
1
24
80
33
18
9
20
40
32
11
1
3
17
21
4
17
116
58
58
278
56
218
4
440
249
22
48
32
147
103
170
91
28
28
17
2
4
36
4
32
33
33
i
s
d
u
q
L
i
)
l
b
b
m
m
(
s
a
g
l
a
r
u
t
a
N
)
f
c
b
(
2021
13
7
7
45
20
24
1
30
73
33
16
8
16
37
29
9
1
2
17
19
4
15
92
43
43
263
60
198
5
538
179
20
49
31
79
85
189
117
26
22
16
2
6
26
5
21
31
31
253
1,446
526
263
1,483
542
295
1,757
620
1
41
1
1
44
31
118
1
88
238
7
63
1
17
88
1
42
1
1
45
36
134
1
77
248
8
68
1
15
92
2
27
1
1
31
35
66
2
70
173
8
40
1
14
63
Total
297
1,684
614
308
1,731
634
326
1,930
683
(a) Includes Eni’s share of equity-accounted equities.
(b) Includes volumes of hydrocarbons consumed in operations (42, 45 and 45 mmboe in 2021, 2020 and 2019, respectively).
Management report | Consolidated financial statements | Annex
56
DAILY OIL AND NATURAL GAS PRODUCTION(a)(b)
Consolidated subsidiaries
Italy
Rest of Europe
United Kingdom
North Africa
Algeria
Libya
Tunisia
Egypt
Sub-Saharan Africa
Angola
Congo
Ghana
Nigeria
Kazakhstan
Rest of Asia
China
Indonesia
Iraq
Pakistan
Timor Leste
Turkmenistan
United Arab Emirates
Americas
Ecuador
Mexico
United States
Australia and Oceania
Australia
Equity-accounted entities
Angola
Norway
Tunisia
Venezuela
)
l
b
b
m
m
(
i
s
d
u
q
L
i
36
19
19
124
54
67
3
82
198
91
44
20
43
102
80
1
1
24
1
6
47
53
11
42
s
a
g
l
a
r
u
t
a
N
)
f
c
b
(
2021
251.0
119.3
119.3
720.1
165.1
541.7
13.3
1,474.8
489.5
53.9
135.5
83.8
216.3
233.0
516.5
321.2
70.7
59.8
42.5
6.3
16.0
73.0
14.8
58.2
85.0
85.0
s
n
o
b
r
a
c
o
r
d
y
H
)
e
o
b
m
m
(
83
41
41
259
85
168
6
360
291
101
70
36
84
146
177
1
61
37
11
9
7
51
67
14
53
16
16
)
l
b
b
m
m
(
i
s
d
u
q
L
i
47
23
23
112
53
56
3
64
218
89
49
24
56
110
88
1
1
31
2
7
46
57
12
45
s
a
g
l
a
r
u
t
a
N
)
f
c
b
(
2020
316.6
159.1
159.1
758.4
152.5
594.4
11.5
1,203.0
679.0
58.2
131.1
87.6
402.1
282.2
465.0
248.5
76.3
76.8
46.8
6.2
10.4
97.1
10.9
86.2
91.0
91.0
s
n
o
b
r
a
c
o
r
d
y
H
)
e
o
b
m
m
(
107
52
52
255
81
168
6
291
345
100
73
41
131
163
176
1
48
45
15
10
9
48
75
14
61
17
17
s
a
g
l
a
r
u
t
a
N
)
f
c
b
(
2019
376.4
174.6
174.6
1,149.2
111.8
1,025.8
11.6
1,509.0
621.2
67.3
147.7
97.9
308.3
272.4
502.7
308.1
78.7
101.2
6.0
8.7
66.8
2.8
64.0
139.6
139.6
s
n
o
b
r
a
c
o
r
d
y
H
)
e
o
b
m
m
(
123
55
55
379
83
291
5
354
363
113
87
42
121
150
179
1
59
41
19
8
51
68
6
4
58
28
28
)
l
b
b
m
m
(
i
s
d
u
q
L
i
53
23
23
166
62
101
3
75
249
102
59
24
64
100
86
1
2
27
7
49
55
6
4
45
2
2
694
3,962.2
1,440
719
4,051.4
1,481
809
4,811.9
1,699
3
111
3
2
119
85.8
322.7
3.2
239.2
650.9
19
172
3
48
242
4
116
2
2
124
98.8
365.0
2.9
211.0
677.7
23
185
2
42
252
4
74
3
3
84
97.3
182.4
3.4
192.0
475.1
23
108
3
38
172
Total
813
4,613.1
1,682
843
4,729.1
1,733
893
5,287.0
1,871
(a) Includes Eni’s share of equity-accounted equities.
(b) Includes volumes of hydrocarbons consumed in operations (116, 124 and 124 kboe/d in 2021, 2020 and 2019, respectively).
Eni Annual Report 2021
57
PRODUCTIVE WELLS
In 2021, oil and gas productive wells were 8,100 (2,788.6 of which represented Eni’s share). In particular, oil
productive wells were 6,649 (2,157.8 of which represented Eni’s share); natural gas productive wells amounted
to 1,451 (630.8 of which represented Eni’s share). The following table shows the number of productive wells in
the year indicated by the Group and its equity-accounted entities in accordance with the requirements of FASB
Extractive Activities Oil and Gas (Topic 932).
PRODUCTIVE OIL AND GAS WELLS(a)
Italy
Rest of Europe
North Africa
Egypt
Sub-Saharan Africa
Kazakhstan
Rest of Asia
Americas
Australia and Oceania
(units)
2021
Oil wells
Natural gas wells
Gross
201.0
655.0
620.0
1,263.0
2,401.0
208.0
1043.0
258.0
Net
155.2
115.2
262.2
539.8
506.5
56.9
388.6
133.4
Gross
331.0
184.0
132.0
134.0
199.0
1.0
183.0
285.0
2.0
Net
293.4
48.4
71.2
43.5
26.3
0.3
63.7
82.0
2.0
(a) Includes 1,198 gross (315.1 net) multiple completion wells (more than one producing into the same well bore). Productive wells are producing wells and wells
capable of production. One or more completions in the same bore hole are counted as one well.
6,649.0
2,157.8
1,451.0
630.8
DRILLING ACTIVITIES
EXPLORATION
In 2021, a total of 31 new exploratory wells were drilled (17.4 of which represented Eni’s share), as compared to 28
exploratory wells drilled in 2020 (13.8 of which represent Eni’s share) and 31 exploratory wells drilled in 2019 (16.3
of which represented Eni’s share).
The following tables show the number of net productive, dry and in progress exploratory wells in the years indicated
by the Group and its equity-accounted entities in accordance with the requirements of FASB Extractive Activities -
Oil and Gas (Topic 932). The overall commercial success rate was 54% (49% net to Eni) as compared to 28% (30%
net to Eni) in 2020 and 36% (47% net to Eni) in 2019.
EXPLORATORY WELL ACTIVITY
Net wells completed(a)
Wells in progress at Dec. 31(b)
2021
2020
2019
2021
(units)
productive
dry(c)
productive
dry(c)
productive
dry(c)
gross
Italy
Rest of Europe
North Africa
Egypt
Sub-Saharan Africa
Kazakhstan
Rest of Asia
Americas
Australia and Oceania
0.1
0.3
5.0
1.1
0.7
5.0
0.4
1.0
0.7
0.8
0.5
0.7
0.1
0.8
0.4
1.5
1.5
0.9
1.1
0.9
0.6
0.3
0.5
4.5
0.5
0.5
1.4
1.5
0.9
1.7
0.5
23.0
11.0
14.0
33.0
15.0
3.0
1.0
net
5.7
8.5
10.5
19.0
6.5
1.9
0.3
7.0
7.4
2.9
6.9
5.8
6.5
100.0
52.4
(a) Includes number of wells in Eni’s share.
(b) Includes temporary suspended wells pending further evaluation.
(c) A dry well is an exploratory, development, or extension well that proves to be incapable of producing either oil or gas sufficient quantities to justify completion
as an oil or gas well.
Management report | Consolidated financial statements | Annex
58
DEVELOPMENT
In 2021, a total of 154 development wells were drilled (47.7 of which represented Eni’s share) as compared
to 182 development wells drilled in 2020 (57.4 of which represented Eni’s share) and 241 development wells
drilled in 2019 (85.4 of which represented Eni’s share). The drilling of 80 development wells (25.3 of which
represented Eni’s share) is currently underway.
The following tables show the number of net productive, dry and in progress development wells in the
years indicated by the Group and its equity-accounted entities in accordance with the requirements of FASB
Extractive Activities - Oil and Gas (Topic 932).
DEVELOPMENT WELL ACTIVITY
Net wells completed(a)
Wells in progress at Dec. 31(b)
2021
2020
2019
2021
(units)
productive
dry(b)
productive
dry(b)
productive
dry(b)
gross
Italy
Rest of Europe
North Africa
Egypt
Sub-Saharan Africa
Kazakhstan
Rest of Asia
Americas
Australia and Oceania
0.8
4.8
2.5
17.0
3.8
14.9
3.9
2.8
4.3
23.2
1.2
0.3
23.2
2.0
0.4
3.0
3.3
5.0
33.5
7.0
0.9
27.3
2.1
1.1
2.2
28.0
1.0
9.0
6.0
1.0
31.0
4.0
net
5.5
0.5
3.8
1.2
0.3
10.0
4.0
(a) Includes number of wells in Eni’s share.
(b) A dry well is an exploratory, development, or extension well that proves to be incapable of producing either oil or gas sufficient quantities to justify
completion as an oil or gas well.
46.9
0.8
57.0
0.4
82.1
3.3
80.0
25.3
ACREAGE
In 2021, Eni performed its operations in forty-two Countries located in five continents. As of December 31, 2021,
Eni’s mineral right portfolio consisted of 771 exclusive or shared rights of exploration and development activities
for a total acreage of 335,501 square kilometers net to Eni (336,449 square kilometers net to Eni as of December
31, 2020), of which 577 square kilometers related to the CCUS activities in the United Kingdom. Developed
acreage was 27,697 square kilometers and undeveloped acreage was 307,804 square kilometers net to Eni.
In 2021, main changes derived from: (i) new leases were purchased or awarded in Vietnam, Angola, Norway, Ivory
Coast, the United Kingdom, the United Arab Emirates and Egypt for a total increase in acreage of approximately
17,100 square kilometers; (ii) relinquishment for the year related mainly to Myanmar, Ivory Coast, Pakistan, Egypt,
Norway, the United States, Italy and the United Kingdom covering an acreage of approximately 11,500 square
kilometers; (iii) interest increases were reported mainly in Angola, Timor Leste, Italy and the United States for
a total acreage of approximately 700 square kilometers; and (iv) partial relinquishment was reported mainly in
Morocco, Kenya, Italy, the United Arab Emirates and Mozambique for approximately 7,250 square kilometers.
The gross undeveloped acreages that will expire in the next three years are related to exploration leases,
blocks, concessions in: (i) Rest of Europe, in particular in Cyprus; (ii) Rest of Asia, in particular in Oman,
Vietnam, Russia, the United Arab Emirates and Myanmar; (iii) North Africa, in particular in Morocco and Libya;
(iv) Sub-Saharan Africa, in particular in Kenya, Mozambique and South Africa; and (v) Americas, in particular
in Mexico. In most cases extension or renewal options are contractually defined and may or may not be
exercised depending on the results of the studies and the planned activities. Management believes that a
significant amount of acreage will be maintained following extension or renewal.
Eni Annual Report 2021
OIL AND NATURAL GAS INTERESTS
December 31, 2020
December 31, 2021
59
)
a
(
e
g
a
e
r
c
a
t
e
n
l
a
t
o
T
39,841
13,632
26,209
587
13,988
1,909
614
6,253
975
1,883
129,167
31,033
4,732
13,294
10,755
2,252
7,384
90,750
5,639
1,306
2,931
495
3,372
43,948
4,349
6,439
22,271
154,845
1,947
152,898
2,858
11
14,184
446
1,461
10,015
58,955
2,313
17,975
1,620
180
18,680
20,956
3,244
9,719
3,106
1,198
1,066
4,349
2,877
2,877
f
o
r
e
b
m
u
N
t
s
e
r
e
t
n
I
308
123
185
1
7
2
1
138
34
2
277
75
51
11
1
12
56
146
66
21
3
3
5
6
10
31
1
70
7
63
1
3
13
1
2
2
3
13
2
4
1
12
5
1
112
10
90
6
6
4
4
l
d
e
p
o
e
v
e
d
s
s
o
r
G
)
b
(
)
a
(
e
g
a
e
r
c
a
14,224
8,087
6,137
5,218
919
48,879
12,068
6,809
1,963
3,296
4,983
31,828
10,680
1,164
226
19,758
l
d
e
p
o
e
v
e
d
n
u
)
a
(
e
g
a
e
r
c
a
s
s
o
r
G
65,679
6,810
58,869
587
25,474
4,890
1,228
22,709
1,280
2,701
s
s
o
r
g
l
a
t
o
T
)
a
(
e
g
a
e
r
c
a
79,903
14,897
65,006
587
25,474
4,890
1,228
27,927
2,199
2,701
l
d
e
p
o
e
v
e
d
t
e
N
)
b
(
)
a
(
e
g
a
e
r
c
a
8,246
6,786
1,460
836
624
l
d
e
p
o
e
v
e
d
n
u
t
e
N
)
a
(
e
g
a
e
r
c
a
31,612
5,332
26,280
587
)
a
(
e
g
a
e
r
c
a
t
e
n
l
a
t
o
T
39,858
12,118
27,740
587
13,988
13,988
1,909
614
6,436
863
1,883
1,909
614
7,272
1,487
1,883
233,042
281,921
12,896
115,290
128,186
48,201
3,982
24,673
16,730
2,816
13,729
60,269
10,791
26,636
16,730
6,112
18,712
171,112
202,940
22,749
33,429
1,320
2,931
930
3,840
50,677
24,782
8,206
55,677
2,484
2,931
1,156
3,840
50,677
24,782
27,964
55,677
15,943
267,694
283,637
2,391
3,853
6,244
13,552
263,841
277,393
62
4,778
1,074
4,009
412
200
3,017
2,217
14
942
1,261
728
728
2,858
2,858
62
16,499
21,277
3,653
7,192
1,074
3,653
7,192
102,016
102,016
53,930
2,200
29,603
31,290
14,600
14,813
5,455
520
1,543
7,295
2,608
2,608
4,009
53,930
2,612
200
32,620
31,290
14,600
17,030
5,469
1,462
2,804
7,295
3,336
3,336
5,292
2,851
958
1,483
1,782
5,822
2,010
678
100
3,034
4,964
442
4,522
10
2,441
446
1,072
122
180
251
1,003
14
492
497
588
588
22,483
1,914
12,336
7,529
704
4,994
87,813
8,800
628
2,931
395
3,385
41,892
4,171
3,340
22,271
27,775
4,765
13,294
7,529
2,187
6,776
93,635
10,810
1,306
2,931
495
3,385
41,892
4,171
6,374
22,271
150,518
155,482
1,505
1,947
149,013
153,535
2,858
11,743
1,461
4,113
58,955
17,975
1,806
18,520
28,338
3,244
8,267
3,092
259
569
4,347
2,117
2,117
2,858
10
14,184
446
1,461
4,113
58,955
1,072
17,975
1,928
180
18,771
28,338
3,244
9,270
3,106
751
1,066
4,347
2,705
2,705
EUROPE
Italy
Rest of Europe
Albania
Cyprus
Greenland
Montenegro
Norway
United Kingdom
Other Countries
AFRICA
North Africa
Algeria
Libya
Morocco
Tunisia
Egypt
Sub-Saharan Africa
Angola
Congo
Gabon
Ghana
Ivory Coast
Kenya
Mozambique
Nigeria
South Africa
ASIA
Kazakhstan
Rest of Asia
Bahrain
China
Indonesia
Iraq
Lebanon
Myanmar
Oman
Pakistan
Russia
Timor Leste
Turkmenistan
United Arab Emirates
Vietnam
Other Countries
AMERICAS
Mexico
United States
Venezuela
Other Countries
AUSTRALIA AND OCEANIA
Australia
Total
(a) Square kilometers.
(b) Developed acreage refers to those leases in which at least a portion of the area is in production or encompasses proved developed reserves.
336,449
771
81,991
583,836
665,827
27,697
307,804
335,501
Management report | Consolidated financial statements | Annex
60
MAIN PRODUCING ASSETS (GROUP SHARE IN %) AND THE YEAR IN WHICH ENI STARTED OPERATIONS
ITALY
(1926) Operated
Adriatic and
Ionian Sea
Barbara (100%), Annamaria (100%), Clara NW (51%), Hera Lacinia (100%) and
Bonaccia (100%)
Basilicata Region
Val d’Agri (61%)
Sicily
Gela (100%), Tresauro (45%), Giaurone (100%), Fiumetto (100%), Prezioso
(100%) and Bronte (100%)
REST
OF EUROPE
Norway(a)
(1965) Operated
Goliat (45.40%), Marulk (13.97%), Balder & Ringhorne (62.87%) and Ringhorne East (48.88%)
Non-operated Åsgard (15.41% ), Mikkel (33.79%), Great Ekofisk Area (8.65%), Snorre (12.96%), Ormen Lange (4.43%),
Statfjord Unit (14.92%), Statfjord Satellites East (10.16%), Statfjord Satellites North (17.46%), Statfjord
Satellites Sygna (14.67%), Grane (19.78%)
United
Kingdom
(1964) Operated
Liverpool Bay (100%) and Hewett Area (89.3%)
Non-operated Elgin/Franklin (21.87%), Glenelg (8%), J Block (33%), Jasmine (33%) and Jade (7%)
NORTH
AFRICA
Algeria(b)
(1981) Operated
Sif Fatima II (49%), Zemlet El Arbi (49%), Ourhoud II (49%), Blocks 403a/d (from 65% to 100%),
Block ROM North (35%), Blocks 401a/402a (55%), Block 403 (50%) and Block 405b (75%)
Non-operated Block 404 (12.25%) and Block 208 (12.25%)
Libya(b)
(1959) Non-operated Onshore contract
areas
Offshore contract
areas
Area A (former concession 82 - 50%), Area B (former concession 100/ Bu-Attifel
and Block NC 125 - 50%), Area E (El-Feel - 33.3%) and Area D (Block NC 169 - 50%)
Area C (Bouri - 50%) and Area D (Blocco NC 41 - 50%)
Tunisia
(1961) Operated
Maamoura (49%), Baraka (49%), Adam (25%), Oued Zar (50%), Djebel Grouz (50%), MLD (50%) and
El Borma (50%)
EGYPT(b)(c)
(1954) Operated
Shorouk (Zohr - 50%), Nile Delta (Abu Madi West/Nidoco - 75%), Sinai (Belayim Land, Belayim Ma-
rine and Abu Rudeis - 100%), Meleiha (76%), North Port Said (Port Fouad - 100%), Temsah (Tuna,
Temsah and Denise - 50%), Southwest Meleiha (100%), Baltim (50%), Ras Qattara (El Faras and
Zarif - 75%), West Abu Gharadig (Raml - 45%) and West Razzak (100%)
SUB-SAHARAN
AFRICA
Non-operated Ras el Barr (Ha’py and Seth - 50%) and South Ghara (25%)
Angola
(1980) Operated
Block 15/06 (36.84%)
Non-operated Block 0 (9.8%), Development Areas in the Block 3 and 3/05-A (12%), Development Areas in the Block
14 (20%), Lianzi Development Area in the Block 14 K/A IMI (10%) and Development Areas in the
Block 15 (18%)
Congo
(1968) Operated
Néné-Banga Marine and Litchendjili (Block Marine XII, 65%), Zatchi (55.25%), Loango (42.5%), Ikalou
(85%), Djambala (50%), Foukanda (58%), Mwafi (58%), Kitina (52%), Awa Paloukou (90%), M’Boundi
(83%) and Kouakouala (75%)
Ghana
Nigeria
Non-operated Yanga Sendji (29.75%) and Likouala (35%)
(2009) Operated
Offshore Cape Three Points (44.44%)
(1962) Operated
OMLs 60, 61, 62 and 63 (20%) and OML 125 (100%)
KAZAKHSTAN(b)
(1992) Operated(e)
Karachaganak (29.25%)
Non-operated Kashagan (16.81%)
Non-operated(d) OML 118 (12.5%)
REST OF ASIA
United Arab
Emirates
(2018) Non-operated Lower Zakum (5%), Umm Shaif and Nasr (10%) and Area B - Sharjah (50%)
Indonesia
(2001) Operated
Jangkrik (55%) and Merakes (65%)
Iraq
(2009) Non-operated(f) Zubair (41.56%)
Pakistan
(2000) Operated
Bhit/Bhadra (40%) and Kadanwari (18.42%)
Non-operated Latif (33.3%), Zamzama (17.75%) and Sawan (23.7%)
Turkmenistan (2008) Operated
Burun (90%)
AMERICAS
Mexico
(2019) Operated
Area 1 (100%)
United States
(1968) Operated
Gulf of Mexico
Allegheny (100%), Appaloosa (100%), Pegasus (85%), Longhorn (75%),
Devils Towers (75%) and Triton (75%)
Alaska
Nikaitchuq (100%) and Oooguruk (100%)
Non-operated Golfo del Messico
Europa (32%), Medusa (25%), Lucius (11.1%), K2 (13.4%), Frontrunner (37.5%)
and Heidelberg (12.5%)
Venezuela
(1998) Non-operated Perla (50%), Corocoro (26%) and Junín 5 (40%)
Texas
Alliance area (27.5%)
(a) Assets held by the Var energy equity-accounted entities (Eni’s interest 69.85%). Following the closing of the process of listing the investee on February 16, 2022, Eni’s interest in the
company is 64.255%.
(b) In certain extractive initiatives, Eni and the host Country agree to assign the operatorship of a given initiative to an incorporated joint venture, a so‐called operating company. The
operating company in its capacity as the operator is responsible of managing extractive operations. Those operating companies are not controlled by Eni.
(c) Eni’s working interests (and not participating interests) are reported. This includes Eni’s share of costs incurred on behalf of the first party accordingly to the terms of PSAs inforce in
the Country.
(d) As partners of SPDC JV, Eni holds a 5% interest in 16 onshore blocks and in 1 conventional offshore block and with a 12.86% in 2 conventional offshore blocks.
(e) Eni and Shell are co-operators.
(f) Eni is leading a consortium of partners including international companies and the national oil company Missan Oil within a Technical Service Contract as contractor.
Eni Annual Report 2021 61
MAIN EXPLORATION AND DEVELOPMENT PROJECTS
Eni’s exploration and production activities are conducted in many Countries and are therefore subject to a
broad range of legislation and regulations. These cover virtually all aspects of exploration and production
activities, including matters such as license acquisition, production rates, royalties, pricing, environmental
protection, export, taxes and foreign exchange. The terms and condition of the leases, licenses and contracts
under which these Oil & Gas interests are held vary from Country to Country. These leases, licenses and
contracts are generally granted by or entered into with a government entity or state company and are
sometimes entered into with private property owners. These contractual arrangements usually take the form
of concession agreements or production sharing agreements.
Concessions contracts. Eni operates under concession contracts mainly in Western Countries. Concessions
contracts regulate relationships between States and oil companies with regards to hydrocarbon exploration
and production activity. Contractual clauses governing mineral concessions, licenses and exploration permits
regulate the access of Eni to hydrocarbon reserves. The company holding the mining concession has an
exclusive right on exploration, development and production activities, sustaining all the operational risks and
costs related to the exploration and development activities, and it is entitled to the productions realized. As a
compensation for mineral concessions, pays royalties on production (which may be in cash or in-kind) and
taxes on oil revenues to the state in accordance with local tax legislation. Both exploration and production
licenses are granted generally for a specified period of time (except for production licenses in the United
States which remain in effect until production ceases): the term of Eni’s licenses and the extent to which these
licenses may be renewed vary by area. Proved reserves to which Eni is entitled are determined by applying
Eni’s share of production to total proved reserves of the contractual area, in respect of the duration of the
relevant mineral right.
Production Sharing Agreement (PSA). Eni operates under PSA in several of the foreign jurisdictions mainly in
African, Middle Eastern, Far Eastern Countries. The mineral right is awarded to the national oil company jointly
with the foreign oil company that has an exclusive right to perform exploration, development and production
activities and can enter into agreements with other local or international entities. In this type of contract,
the national oil company assigns to the international contractor the task of performing exploration and
production with the contractor’s equipment (technologies) and financial resources. Exploration risks are borne
by the contractor and production is divided into two portions: “Cost Oil” is used to recover costs borne by the
contractor and “Profit Oil” is divided between the contractor and the national company according to variable
schemes and represents the profit deriving from exploration and production. Further terms and conditions
of these contracts may vary from Country to Country. Pursuant to these contracts, Eni is entitled to a portion
of a field’s reserves, the sale of which is intended to cover expenditures incurred by the Company to develop
and operate the field. The Company’s share of production volumes and reserves representing the Profit Oil
includes the share of hydrocarbons which corresponds to the taxes to be paid, according to the contractual
agreement, by the national government on behalf of the Company. As a consequence, the Company has to
recognize at the same time an increase in the taxable profit, through the increase of the revenues, and a tax
expense. Proved reserves to which Eni is entitled under PSAs are calculated so that the sale of production
entitlements should cover expenses incurred by the Group to develop a field (Cost Oil) and recognize the Profit
Oil set contractually (Profit Oil). A similar scheme applies to some service contracts.
ITALY
Within Eni’s long-term strategy to minimize carbon footprint, a program was launched to build a hub for the
capture and storage of CO2 (Carbon Capture and Storage - CCS) in depleted fields off the coast of Ravenna
which will be designed to store 500 million tonnes of CO2. The development program includes a pilot project
with expected start-up in 2023, following all necessary authorizations. The development on an industrial scale
is expected in the next phase. The planned activities will benefit on the expected synergies on development
cost leveraging on the offshore infrastructure of depleted fields and in addition to be significant impacted on
the technology and competence areas.
In the gas assets of the Adriatic Sea, development activities concerned: (i) maintenance and production
Management report | Consolidated financial statements | Annex 62
optimization at offshore gas fields Annalisa (Eni’s interest 100%) and Calipso (Eni’s interest 51%); and
(ii) Decommissioning plan to plug-in depleted wells and to remove idle platforms progressed in the year
in compliance with Italian Ministerial Decree 15 February 2019 “Linee guida nazionali per la dismissione
mineraria delle piattaforme per la coltivazione in mare e delle infrastrutture connesse”. A total of six
offshore platforms to be removed are currently under the ministerial authorization process. In the circular
economy initiatives, a program in collaboration with national research institutions was launched to
redevelop asset in the decommissioning phase. Activities started up to convert an offshore platform into
a marine science park.
In 2021 the IX Collaboration Agreement was signed with the Municipality of Ravenna. The agreement
includes: (i) environmental projects by means of studies, monitoring program and environmental protection
activities at the coastline areas; (ii) energy efficiency measures; (iii) professional training initiatives, programs
to support local market and activities; and (iv) social projects and environmental education and sustainable
development projects in collaboration with several local stakeholders.
During 2021 the Val d’Agri production plant was shut down, being executed mandatory maintenance
activities to be performed every ten years, with the support of local stakeholders and in compliance with
relevant regulations and health, safety, and environmental protection issues. The activities were related
to inspections and maintenance as well as to execute intervention of improvement and upgrading of the
production facilities. The Energy Valley project activities progressed and concerned certain initiatives with
the support of local stakeholders, in the area nearby at the Val d’Agri Oil Center, relating to environmental
sustainability, innovation, rehabilitation and enhancement of the area, In particular: (i) in the agricultural
rehabilitation programs with the “Agricultural Center for Experimentation and Training” project launched
sustainable agricultural initiatives and the construction of agritech infrastructures; and (ii) start-up of
biomonitoring programs with innovative techniques.
Within the strategic partnership with stakeholder, Eni, Shell and the Basilicata Region, have signed Preliminary
Agreement to the Memorandum of Understanding of the Val d’Agri concession. The preliminary agreement,
currently under negotiation, defines the main terms of a clearing programs linked to the concession work
schedule in support of regional development, also by means of the action plan for the non-oil activities based
on the sustainability principles.
In Sicily, following the Memorandum of Understanding for the Gela area, signed with the Ministry of
Economic Development in November 2014, the construction activities of the gas treatment plant started up
at the Argo and Cassiopeia project development (Eni’s interest 60%). The project will be developed in about
3 years with an investment of over €700 million. Natural gas production start-up is expected in the first half
of 2024. The project, through a significant reduction of the environmental impact, expects to achieve the
carbon neutrality target.
Within the local support communities’ initiatives, the final framework agreement was ratified with Fondazione
Banco Alimentare Onlus, Banco Alimentare della Sicilia Onlus and the Municipality of di Gela to create a food
storage and distribution center for disadvantaged communities.
REST OF EUROPE
Norway Eni and the private equity fund HitecVision, shareholders of Vår Energi, have finalized the process of
listing the investee at the local stock exchange placing about 11.2% interest.
In September 2021, a Cooperation Agreement was signed with others Oil & Gas operators in the area to
asses the feasibility of the Barents Blu-Ammonia Project. The project provides for the monetization of gas
production at the Goliath field by means of the blue ammonia production and commercialization. The CO2
captured in the process will be transported and stored in a depleted offshore field.
Exploration activities yielded positive results with the offshore oil discovery of: (i) Isflak in the PL 532 license
(Eni’s interest, 21%) in Barents Sea. The discovery will be linked to the Johan Castberg production hub (Eni’s
interest, 20.96%) under development; (ii) Blasto in the PL 090/090I license (Eni’s interest, 17%), located in the
northern North Sea, near the facility production of the Fram project (Eni’s interest, 17.46%); (iii) Garantiana
West in the PL554 license (Eni’s interest 21%) in the North Sea. The activities provide the joint development
with the Garantiana field by means of the linkage to nearby facilities of the Snorre field (Eni’s interest 12.99%);
(iv) King and Prince in the PL027 license (Eni’s interest 62.86%) near to the Balder field (Eni’s interest 62.87%);
Eni Annual Report 2021 63
(v) Tyrihans North Ile in the PL073 license (Eni’s interest 8.4%) in the North Sea; and (vi) the Rodhette oil and
gas discovery in the PL901 license (Eni’s interest 34.9%) in the Barents Sea, located in the north of the Goliat
field (Eni’s interest 45.4%).
Recent discoveries confirm the successfully Infrastucture Led Exploration (“ILX”) strategy focused on
additional reserve with high value and shortly time-to-market.
The mineral interest portfolio increases were as follows: (i) in 2021 eight exploration licenses were acquired
as operator and five licenses in partnership, mainly located in the North Sea and the Barents Sea; and (ii) in
January 2022, 5 exploration licenses were acquired as operator and five licenses in partnership. The licenses
are distributed over the three main sections of the Norwegian continental shelf.
The new acquired licenses are located in both near-fields already in production or development areas with
high exploration mineral potential.
Development activities mainly concerned: (i) the Johan Castberg sanctioned project, with start-up expected
in 2024; (ii) the Balder X sanctioned project (Eni operator with a 62.87% interest) in the PL 001 license, located
in the North Sea. The Balder project scheme provides for drilling additional productive wells, to be linked to
an upgraded FPSO unit that will be relocated in the area. Production start-up is expected in 2023; (iii) the
Breidablikk sanctioned project with start-up in 2024. The project scheme provides for drilling production wells
to be linked to existing treatment facilities in the area. Leveraging on high energy and operational efficiency
technologies, the project development will minimize direct GHG emissions; and (iv) the final investment
decision (FID) was sanctioned for the Tommeliten Alpha Development gas and condensates project in the
PL044 licenses (Eni’s interest 6.38%), in the Norwegian section of the North Sea.
United Kingdom In January 2021, Eni was awarded a 100% interest and operatorship in the exploration
license P2511 in the North Sea and later a 50% farm-out agreement was finalized.
In July 2021, Eni finalized the acquisition of 100% interest in the Conwy production field located in the
Liverpool Bay area, near existing production facilities. This acquisition currently increases the production in
the Country by leveraging on the operational synergies while in the next years during the abandonment phase
this asset could be included in possible transitions to CO2 storage projects.
Exploration activity yielded positive results with the Talbot Appraisal (Eni’s interest 33%) and Jade South (Eni’s
interest 7%) wells. The development activities will leverage on the existing production facilities in the area.
Within the HyNet North West integrated project where Eni is engaged with a consortium of local industries
for the capture, transportation and storage of CO2 emitted by them and for the realization of a low carbon
hydrogen production plant in the future: (i) in March 2021, the project received funding of £33 million by the
UK Research and Innovation (UKRI), Country’s authority for research and innovation through the Industrial
Decarbonisation Challenge (IDC) fund, including £21 million to finance 50% of engineering studies for the
transport and storage phase; (ii) in May 2021, Eni signed a framework agreement with the Progressive
Energy Limited to accelerate the project. Based on the agreement, Eni will develop and operate both the
onshore and offshore transportation and storage of CO2 in its Liverpool Bay assets, while Progressive
Energy will lead and coordinate the CO2 capture and hydrogen production on behalf of the Hynet North
West consortium, thereby linking the CO2 emissions to Eni’s transportation and storage infrastructure; (iii)
in October 2021, the project has been selected by the UK authorities between the two priority CCS projects
in the country and granted access to priority public funding; (iv) signed 19 Memorandum of Understanding
with local industries (“Emitters”) to ensure the CO2 storage capacity of the project.
The HyNet North West project start-up is expected at the end of 2025 with an initial CO2 storage capacity of
4.5 mmtonnes/year, at a later stage from 2030 will be increased to reach 10 mmtonnes/year.
The HyNet North West project will support to achieve the decarbonisation goals define by the UK Government
at 2030; as well as also will contribute to the 80% production of the 5 GW low carbon hydrogen target at
2030, announced by the Country, for further decarbonization of transport, industry and household utilities
in the area.
In addition, in November 2021, Eni submitted to the UK authority of Oil & Gas (OGA) in the Country a request
to award a new license for possible realization of a CO2 storage project in Eni’s exhausted offshore fields
in the Hewett license, where production ended in 2020, to future develop the Bacton area as an hydrogen
production hub.
In 2021 Eni announced exiting the Net Zero Teesside (Eni’s interest 20%) and the North Endurance Partnership
(Eni’s interest 16.7%) projects where development activities are ongoing with other oil and gas partners in the
Management report | Consolidated financial statements | Annex 64
area, following Eni’s rationalization strategy of CCS projects in the United Kingdom based on focusing on its
operated upstream assets.
Other development activities mainly concerned: (i) production optimization, maintenance and asset
integrity programs at the Liverpool Bay operated field (Eni’s interest 100%); (ii) drilling of infilling wells and
maintenance activity at the Elgin/Franklin (Eni’s interest 21.87%) and J-Area (Eni’s interest 33%) fields; and
(iii) decommissioning activity of the Hewett Area project.
NORTH AFRICA
Algeria In March 2022 exploration activity yielded positive results with the HDLE oil and associated gas
discovery in the Zemlet el Arbi concession (Eni’s interest 49%), in the Berkine North area.
During 2021 Eni and Sonatrach signed several agreements in the exploration and production, research and
development as well as decarbonization initiatives. In particular: (i) upgrading exploration and development
activities in the Berkine area, also planning for the construction of an oil and gas development hub in synergy
with the existing MLE-CAFC facilities. In addition, in December 2021, a new PSA contract was signed for the
southern part of the Berkine area (Eni’s interest 75%), near operated production assets; (ii) signed a Memorandum
of Understanding to jointly develop initiatives in new technologies, renewable energies, hydrogen, CCUS project,
biorefining, and other fields in line with Eni’s commitment to achieve carbon neutrality in 2050.
Development activities mainly concerned: (i) the Berkine North area (Eni’s interest 49%) with the drilling and
hook-up of an additional gas production well and three additional oil production wells as well as workover
activities; (ii) production optimization at the Zea field in the Block 403 a/d (Eni’s interest from 65% to 100%)
and the BRN/BRW field in the Block 403 (Eni operator with a 50% interest) as well as the Block 405b (Eni
operator with a 75% interest) and the Block 404 (Eni’s interest 12.25%); and (iii) maintenance activity at the
Block 208 (Eni’s interest 12.5%).
EGYPT
In January 2022, Eni was awarded five exploration licenses, of which four as operator in the Egyptian offshore and
onshore, following the successful participation in the Egypt International Bid Round for Petroleum Exploration
and Exploitation 2021. The licenses are in mining basins of great interest to Eni: offshore East Mediterranean, the
Western Desert and the Gulf of Suez, for a total acreage of about 8,410 square kilometers.
In June 2021, Eni signed with the Egyptian General Petroleum Corporation (EGPC) and Lukoil a unitization
agreement and extension of exploitation rights until 2036 of the Meleiha and the Meleiha Deep contractual areas.
The agreement includes an option of additional extension term to 2041.
The agreement will allow to enhance the significant resource in the area by means of improved contractual terms
and adding new exploratory mineral potential. In addition, the construction of a new gas treatment plant, which will
be linked to the existing production facilities, will ensure a further possible development of the reserves in the area.
In July 2021 an agreement was signed with the State energy, electricity and natural gas companies to assess
the technical and commercial feasibility of projects for the blue and green hydrogen production also through the
storage of CO2 in depleted natural gas fields.
Exploration activities yielded positive results with near-field discoveries in: (i) the Sinai production concession
(Eni operator with a 100% interest) with the BLSE 1 oil exploration well. The exploration well was started up by
means of the linkage to the existing facilities; (ii) the Western Desert production concessions through eight oil
and natural gas discovery wells and already in production.
The new discoveries confirm the positive track-record of Eni’s exploration in the Country leveraging on the
continuous technology progress in exploration activities that allows to re-evaluate the residual mineral potential
in mature production areas.
During 2021 development activities concerned: (i) the completion of drilling development activities and
production start-up in the Sinai and Western Desert production concessions as well as production optimization
programs by means of work-over activities; (ii) asset integrity program in the Sinai concession with certain
activities to improve plant safety and to retain environmental standards; (iii) study activities start-up to develop a
photovoltaic plant of 15 MW in the area of the Abu Rudeis operated field (Eni’s interest 100%) in order to reduce
Eni Annual Report 2021 65
electricity expenses by the national grid and related CO2 emissions. Start-up is expected by the end of 2022; (iv)
a development drilling plan of the Baltim operated concession (Eni’s interest 50%); and (iv) the pre-FID activities
of the Meleiha Phase 2 project.
Development activities of the Zohr project concerned: (i) EPCI activities for the construction of new submarine
facilities and two additional treatment unit with a capacity of 6,000 barrels/d to manage and recovery production
water. The construction of further three units with a capacity of 9,000 barrels/d is being studied; and (ii) development
drilling activities with the completion of two additional production wells with start-up expected in 2022.
As of December 31, 2021, the aggregate development costs incurred by Eni for developing the Zohr project and
capitalized in the financial statements amounted to $5.6 billion (€5 billion at the EUR/USD exchange rate of
December 31, 2021). Development expenditure incurred in the year were €93 million. As of December 31, 2021,
Eni’s proved reserves booked at the Zohr field amounted to 706 mmboe.
Within the social responsibility initiatives, the programs defined by the Memorandum of Understanding
signed in 2017 are currently to be implemented. The agreement, which supports the development activities
of the Zohr project, defines two intervention projects to be implemented by the 2024. The first, already
completed, included the renovation of the El Garabaa hospital, located nearby the onshore Zohr production
facilities, and the supply of necessary medical equipment. The second project, for an overall expense of $20
million, includes socio-economic, health and training programs to support local communities. In particular:
(i) launched the phase 2 of the program upon completion of the health care center in Port Said in 2021.
Planned activities include hospital equipment, healthcare staff training and health awareness campaigns;
(ii) with the completion of youth center in 2020, Eni’s training programs has been implemented. In particular,
the Zohr Applied Technology School has been launched in partnership with the El Sewedy Electric
Foundation and in cooperation with the local authority. Civil infrastructure renovation activities started and
then completed during the first months of 2022; and (iii) at the end of 2021, a technical education program
was identified. Training activities is expected to be launched in 2022.
SUB-SAHARAN AFRICA
Angola In March 2022, Eni and BP signed an agreement to combine the respective upstream portfolios in the country,
aiming at establishing a new jointly controlled venture, Azule Energy. The agreement follows the memorandum of
understanding between the companies agreed in May 2021. In particular, the new venture will ensure significant
operational synergies, targeting an ambitious investment plan and increasing the growth rate in the area. The
transaction highlights both companies’ commitment to continue developing the country’s upstream potential and
to support the energy transition by means of natural gas and renewable energy developments projects. The closing
of the deal is subject to certain conditions precedent, including approval from the local authorities in charge.
In October 2021, Eni signed a Memorandum of Understanding with ANPG and Sonangol for joint development
of the circular economy and decarbonization projects, in particular by promoting agricultural initiatives for the
cultivation of oil plants to be used as feedstock for Eni’s biorefineries, without impacting the local food chain.
In December 2021, Eni finalized a twenty-year extension of the offshore Block 0 (Eni 9.8%), with expiring date
in 2050. Block 0 is located in the Cabinda area, in the north of the country.
In December 2021, the FID of Quiluma & Maboqueiro fields within the first development project of the New Gas
Consortium (Eni’s interest 25.6%) was sanctioned. The project includes two offshore platforms, an onshore gas
processing plant and connection to A-LNG for the marketing of gas via LNG cargo, and condensates.
Exploration activities yielded positive results in the operated Block 15/06 (Eni 36.84%): (i) in 2021 through the
Cuica-1 oil discovery in the Cabaça development area, so to extend the residual useful life of the FPSO which
operates the block; and (ii) in March 2022 with the Ndungu-2 delineation well which allows to boost to 800-1,000
million boe in place the field resources.
In 2021 production start-up was achieved at the Cuica field, just four months after the discovery, and the
Cabaça North field through the linkage to the Armada Olombendo FPSO targeting to increase and to support
production plateau of the operated Block 15/06 development. In February 2022, in the operated Block 15/06,
the Ndung Early Production project started up by means of linkage to the Ngoma FPSO. The Ngoma FPSO
is designed with treatment capacity of approximately 100 kbbl/d and with zero-water discharge and zero-
process flaring also through upgrading plant implemented in 2021, in line with Eni’s decarbonisation strategy
to achieve net zero.
Management report | Consolidated financial statements | Annex 66
Production start-up confirms the success of the Infrastructure Led Exploration (ILX) campaign progressed
in the Country also by means of a modular and simplified development approach ensuring a shortly time-to-
market of the discoveries.
Other development activities in the operated Block 15/06 concerned the Agogo Early Production Phase 2
development project with start-up of construction activities relating to the planned offshore facilities. The full
field development of the Agogo project provides for the construction of an additional FPSO. Concept definition
studies and FEED activity were completed and started up the activities for the assigning main contracts.
On the non-operated blocks, development activities progressed in the Block 0 with: (i) the Sanha Lean Gas
Connection and Booster Gas Compressor project increasing associated gas production to feed the A-LNG
liquefaction plant; (ii) the Lifua-A development project. The offshore facilities were completed, and start-up
is expected in 2022; (iii) the FEED activity of the South Ndola e Sanha-Mafumeira connector projects for the
construction of transportation facilities to put in production the residual reserves in the area.
Other development activities concerned: (i) the FEED activity of the Punja project in the Block 3/05-A (Eni’s
interest 12%); and (ii) reached the Final Investment Decision (FID) and signed the EPC contract for the first
phase start-up of Caraculo’s photovoltaic project, located in Namibe. The project follows the memorandum of
understanding signed with Sonangol in 2019 with establishing a new jointly controlled venture, Solenova for
the development of renewable energy projects. Start-up is expected in the fourth quarter of 2022. The plant
will have a total capacity of 50 MW and will be implemented by stages, the first set to reach a capacity of 25
MW. The project will ensure to reduce diesel consumption for electricity generation and so the GHG emissions
as well as supporting the Country’s energy transition. Planned activities also include certain initiatives in the
field of access to water, access to energy, health and education.
Local development programs and initiatives progressed during the year, in particular with: (i) the South West
integrated project in Huila and Namibe area, to support local communities affected by drought; (ii) access to
energy, with health centers electrification by means of solar panels installation; (iii) an agricultural development
program in the Cabinda area in partnership with local institutions; (iv) ongoing support of the Halo Trust
initiative for the f land demining in the Benguela province; and (v) several health initiatives in the Luanda,
Cabinda and Zaire areas with healthcare staff training programs as well as medical equipment supplies.
Congo In October 2021, Eni signed a Memorandum of Understanding with the Country’s authorities for joint
development of the circular economy and decarbonization projects, in particular by promoting agricultural
initiatives for the cultivation of oil plants to be used as feedstock for Eni’s biorefineries, without impacting the
local food chain.
In addition, during 2021: (i) Eni relinquished the Loango II (Enis’ interest 42.5%) and Zatchi II (Eni’s interest
55.25%) production assets, effective from 1 January 2022, in line with Eni’s strategy of production portfolio
rationalization; and (ii) the PSA contract of the Marine XII production block (Eni operator with a 65% interest)
was amended to include a new tax regime dedicated to LNG projects. Ongoing studies provides for a fast-track
development project to monetize the associated and non-associated gas in the area both for the domestic
power generation and LNG export, also targeting to support zero routine flaring. The export project consists of
two modular and in phases LNG liquefaction plants with a capacity of approximately 2 million tonnes/year at
plateau. Start-up is expected in 2023.
Other development activities concerned: (i) the additional development phase of the Nené-Banga production
field in the Marine XII block with a construction of a new production platform. Start-up is expected in the
second half of 2022; (ii) in the cultural initiatives to support local community, the construction activities
progressed at the Oyo research center which is expected to be opened and in operation in 2022; (iii) the
second phase of the Project Integrated Hinda (PIH) progressed with initiatives to support the economic and
agricultural development, access to water, education programs and sanitary service program development;
and (iv) the CATREP program to support domestic agricultural economy with initiatives in the innovative
agronomic techniques application aiming to integrate local producers into supply chain of agri-biofeedstock
within Memorandum of Understanding signed in 2021.
Mozambique In February 2022, Eni signed with the Ministry of Agriculture and Rural Development of the Republic
of Mozambique an agreement for cooperation and development of agricultural projects in the Country, promoting
agricultural initiatives for the cultivation of oil plants to be used as feedstock for biofuels production.
The development activities of Area 4 offshore (Eni’s interest 25%) concerned the Coral South gas project and the
Eni Annual Report 2021 67
gas discoveries of Mamba Complex where Eni is expected to coordinate the upstream phase and ExxonMobil
midstream phase (natural gas liquefaction).
The sanctioned Coral South project includes the construction, installation and commissioning and of an FLNG
vessel that will be linked to six subsea gas producing wells, where the gas will undergo treatment, liquefaction,
storage and export, with a capacity of approximately 3.4 mmtonnes/y of LNG. The development activities are
nearing completion. Production start-up is expected within 2022. The LNG produced will be sold by the Area 4
Concessionaires to BP under a long-term contract for a period of twenty years, with an option for an additional
ten-year term.
Within the Mamba Complex discoveries, the Rovuma LNG project provides for the development of the straddled
reserves of Area 1 according to its independent industrial plan, coordinated with the operator of Area 1 (TotalEnergies).
The development project will include also a part of non-straddled reserves. The project provides the construction of
two onshore LNG trains with capacity of approximately 7.6 mmtonnes/y each, fed by 24 subsea wells and facilities
for storing and exporting LNG. In 2019, the plan of development (POD) was approved by the relevant Authorities.
The Area 4 operators progressed with reassessment of the project, including maximizing synergies with Area 1, in
order to optimize costs.
In 2021, Eni’s programs to support the local communities of the Country progressed with: (i) programs to
support primary and infant scholarship. In particular, in city of Pemba, the infrastructural planned activities are
completed and launched training initiatives also with study grants; (ii) launched the second phase of access
to energy program also by means of clean cooking projects; (iii) support to disadvantaged populations in
particular in the Cabo Delgado area and in the Maputo area, also with food assistance; and (iv) within the Coral
South project development, certain activities were launched also through suppliers engagement aiming to
increase workforce of local small e medium-size companies.
Nigeria In January 2021, Eni and the partners divested the onshore production and development block OML 17
(Eni’s interest 5%).
Exploration activities yielded positive results in the operated OML 61 block (Eni’s interest 20%) with the Obiafu 42
gas and condensates exploration well.
Development activities concerned: (i) production optimization programs also with work-over activities at the
operated OMLs 60, 61, 62 and 63 blocks (Eni’s interest 20%), the Kolo Creek gas field in the OML 28 block (Eni’s
interest 5%), the Forkados Yokri oil field in the OML 43 Block (Eni’s interest 5%) and at the OML 118 block (Eni’s
interest 12.5%); and (ii) drilling of four oil wells in the OML 79, 35 and 36 blocks (Eni’s interest 5%) and of six gas
wells in the OML 21 and 22 blocks (Eni’s interest 5%) as well as in the Assa North and Enhwe fields.
In 2021 the collaboration with the Food and Agriculture Organization (FAO) progressed to foster access to safe
and clean water in Nigeria for local communities affected by humanitarian crisis in the north-east areas of Nigeria.
In particular, during the year, maintenance activities were completed to ensure sustainable use of infrastructures
implemented. Since 2018, start year of program, realized 22 wells powered with photovoltaic systems, both for
domestic use and irrigation purposes, to benefit approximately 67,000 people. In March 2022, Eni and FAO, in
partnership with NNPC, completed and delivered 11 water plants powered by photovoltaic systems in Borno
and Yobo States in northeastern Nigeria. In addition, initiatives progressed with: (i) infrastructures projects with
the realization of roads, schools, health centers, electrification and water works; (ii) training programs, also with
study grants; (iii) access to energy programs; and (iv) the Green River Project to support local producers.
Eni holds a 10.4% interest in the Nigeria LNG Ltd joint venture, which runs the Bonny liquefaction plant located
in the Eastern Niger Delta. The plant has a production capacity of 22 mmtonnes/y of LNG associated to
approximately 1,250 bcf/y of feed gas. Natural gas supplies to the plant are currently provided under a gas supply
agreement from the SPDC JV (Eni’s interest 5%), TEPNG JV and the NAOC JV (Eni’s interest 20%). In 2021, the
Bonny liquefaction plant processed approximately 970 bcf. LNG production is sold under long-term contracts
and exported mainly to the United States, Asian and European markets by the Bonny Gas Transport fleet, wholly
owned by Nigeria LNG, as well as is sold FOB by means of the fleet owned by third parties.
KAZAKHSTAN
Kashagan The development activities of the Kashagan field (Eni’s interest 16.81%) concerned the phased
expansion program of production capacity. The first development phase envisages increasing the production
Management report | Consolidated financial statements | Annex 68
capacity up to 450 kbbl/d by upgrading the existing associated gas compression handling. The ongoing
activities, sanctioned in 2020, mainly concerned: (i) increasing gas reinjection capacity by means of upgrading
the existing facilities; and (ii) delivering a part of gas volumes to a new onshore treatment unit operated by a
third party, currently under construction.
In addition, during the year the redevelopment activity was completed with energy efficiency of a school in
the Turkestan region, built in partnership with UNDP (United Nations Development Programme).
As of December 31, 2021, the aggregate costs incurred by Eni for the Kashagan project capitalized in the
financial statements amounted to $10 billion (€8.9 billion at the EUR/USD exchange rate of December
31, 2021). This capitalized amount included: (i) $7.4 billion relating to expenditure incurred by Eni for the
development of the oil field; and (ii) $2.6 billion relating primarily to accrued finance charges and expenditures
for the acquisition of interests in the Consortium from exiting partners upon exercise of pre-emption rights in
previous years. Cost incurred in the year were €66 million.
As of December 31, 2021, Eni’s proved reserves booked for the Kashagan field amounted to 633 mmboe,
decreasing from 2020 due to price effect.
Karachaganak Within the gas treatment expansion projects of the Karachaganak field, activities concerned:
(i) the Karachaganak Debottlenecking project was completed. The construction of a fourth gas reinjection
unit is currently being finalized; and (ii) the Karachaganak Expansion Project (KEP) to increase gas re-injection
capacity progressed. The project is scheduled to be achieved in several phases. The development program of
the first phase, sanctioned at the end of 2020, provides the construction of a sixth injection line, the drilling of
three additional injection wells and of a new gas compression unit. Start-up is expected in 2024. The project
includes an additional phase with the installation of a new treatment and compression units.
Eni continues its commitment to support local communities in the nearby area of the Karachaganak field.
In particular, initiatives progressed with: (i) professional training; and (ii) realization of kindergartens and
schools, roads maintenance, construction of sport centers; and (iii) medical-health support also by means of
the medicines distribution, following the health emergency resulting from the COVID-19 pandemic.
As of December 31, 2021, the aggregate costs incurred by Eni for the Karachaganak project capitalized in the
financial statements amounted to $4.4 billion (€3.9 billion at the EUR/USD exchange rate of December 31,
2021). Cost incurred in the year were €123 million.
As of December 31, 2021, Eni’s proved reserves booked for the Karachaganak field amounted to 399 mmboe,
decreasing from 2020 mainly due to price effect.
REST OF ASIA
Indonesia In June 2021, Eni signed a Memorandum of Understanding with the government entity SKK Migas
for a partnership in hydrocarbons exploration in the Country. The agreement provides for the use of Eni’s
proprietary technologies, including the calculation and processing techniques of the Green DataCenter, for
an exploration prospects interpretation data.
Exploration activities yielded positive results in the operated West Ganal block (Eni’s interest 40%) with the
Maha 2 delineation well, near the Jangkrik production field.
In 2021 production start-up was achieved at the offshore Merakes gas project in the operated East Sepinggan
block (Eni’s interest 65%), located in the deep offshore East Kalimantan. Production flows from five subsea
wells which are tied-back to the Floating Production Unit (FPU) of the Jangkrik producing field (Eni operator
with a 55% interest). Natural gas production is processed by the FPU and then delivered via pipeline to the
onshore plant, which is connected to the East Kalimantan transport system to feed the Bontang liquefaction
plant or sold to the domestic market.
Development activities comprised: (i) development program of the Merakes East and Maha projects with
the completion of the concept selection activity and the start-up of the concept definition activity; and
(ii) the activities and initiatives in the fields of access to water and renewable energy to support the local
development areas of Samoja, Kutai Kartanegara and East Kalimantan.
Iraq Development activities comprised the execution of an additional development phase of the ERP (Enhanced
Redevelopment Plan) at the Zubair field (Eni’s interest 41.56%), which will allow to achieve a production plateau
Eni Annual Report 2021 69
of 700 kbbl/d. The production capacity and main facilities to treat the production plateau target have already
been installed; the field reserves will be progressively put into production by drilling additional productive wells
over the next few years.
In February 2022, consistently with the sustainable development goals, Eni in collaboration with the European
Union and UNICEF, has launched a project in partnership with the Governorate of Basra, aimed at improving
quality of water for 850,000 people in the city of Basra, including over 160,000 children as direct beneficiaries.
Eni’s commitment continues with projects in the fields of education, health, environment and access to water.
In particular: (i) launched an integrated training program in the Zubair district, including specific training
initiatives for school staff and establishing online educational platform following the COVID-19 pandemic
impact; (ii) progressed construction activities of a new school in the Zubair area with completion expected
in 2023, as well as renovation and material supply initiatives; (iii) pediatric training project, renovation and
expansion of the Basra Cancer Children Hospital as well as the supply of specific medical oncology equipment;
and (iv) upgrading activity at the Al Barjazia drinking water plant in the Zubair area as well as the construction
of new plant in the Bassora area.
United Arab Emirates In 2022 exploration activities yielded positive results in the operated Block 2 (Eni’s
interest 70%) with the XF-002 well, in offshore Abu Dhabi. Drilling activities are ongoing, and upon completion
expected in the second quarter of 2022 the size of the discovery will be evaluated.
In April 2021, Eni was awarded the operatorship of the Exploration Block 7 onshore Ras Al Khaimah with a
90% participating interest. Existing gas treatment facilities in the area with spare capacity will ensure to put
in production any discoveries with shortly time-to-market.
In 2021, production start-up was achieved from the Mahani field located in the onshore Concession Area B
(Eni’s interest 50%) in the Emirate of Sharjah, just one year after Mahani 1 exploration well discovery and two
years after signing the concession agreement. Development activities, sanctioned with the final investment
decision, provide the progressive ramp-up with the tie-back of two additional productive wells.
During the year two development projects were sanctioned: the Dalma Gas Development in the offshore
Gasha concession (Eni’s interest 25%) and the Umm Shaif Long-Term Development Phase 1 in the Umm
Shaif concession (Eni’s interest 10%).
AMERICAS
Mexico In January 2022, was signed a four-year Memorandum of Understanding with the United Nations
Educational, Scientific, and Cultural Organization (UNESCO) to identify potential jointly initiatives supporting
local economy sustainable development by means of economic diversification, environmental and cultural
heritage protection, access to primary services, human rights respect and inclusion.
Exploration activities yielded positive results with: (i) the Sayulita oil discovery in the offshore operated Block
10 (Eni’s interest 65%) where the Saasken discovery was made in 2020. The new well identified 150-200
million barrels of oil in place that have boosted the commerciality prospects of the area; and (ii) the Yoti West
oil discovery in the OBO AC12 block (Eni’s interest 40%) with estimated resources in approximately 170 million
barrels of oil in place.
The development activities in the year mainly concerned the full field development program of the operated
license Area 1 (Eni’s interest 100%), already in production. In particular: (i) the conversion and upgrading of an
FPSO unit was completed including all linking facilities; (ii) the first production platform was installed in the
Amoca field; and (iii) the development drilling activities progressed at the Mizton production field while the
drilling activities started up in the Amoca field. The FPSO started operations on February 23, 2022 allowing
the production ramp-up. Other development phase includes the construction and installation of two additional
production platform at the Amoca and Teocalli field.
Within the cooperation agreement with the local Authorities to identify initiatives relating to health, education
and environment, as well as economic diversification initiatives to support employment, during the year the
activities concerned: (i) restructuring of school buildings and construction of roads; (ii) training and learning
activities to support school programs; (iii) initiatives to improve socio-economic conditions of communities
with development programs of fishing activity; (iv) completed the Human Rights Action Plan identifying
activities plan; and (v) awareness campaigns in the field of access to energy.
Management report | Consolidated financial statements | Annex 70
FORESTRY PROJECTS
In Eni’s decarbonization path, Natural Climate Solutions (NCS) area one of the levers in the residual emission
reduction. Among these, in 2019 Eni launched the forest protection, conservation and sustainable management
projects, in particular in developing Countries. The forest projects are considered the most significant at
internationally level within climate change mitigation strategies.
These projects are framed in the REDD+ (Reducing Emissions from Deforestation and forest Degradation)
scheme. The REDD+ scheme was designed by the United Nations (in particular within the UNFCCC - United
Nations Framework Convention on Climate Change) and involves conservation forest activities to reduce
emissions and improve the natural storage capacity of CO2, as well as supporting, with a different development
model, the local communities through socio-economic projects, in line with sustainable management, forest
protection and biodiversity conservation.
In this scheme, Eni’s protection forest activities support national governments, local communities and UN
agencies in the REDD+ strategies, in line with the NDCs (Nationally Determined Contributions) and National
Development Plans and, mainly, the Sustainable Development Goals (SDGs) of UN.
Eni built solid partnerships over time with recognized international developers of REDD+ projects, like BioCarbon
Partners, Terra Global, Peace Parks Foundation, First Climate, Carbonsink and Carbon Credits Consulting, which
allows to oversee every phase of the projects, from the design to the implementation up to verify the reduction
emissions, with an active role in the governance of the project. The Eni’s role is essential to allow the alignment
with the REDD+ scheme and also the with highest standards for certification of the carbon emissions reduction
and social and environmental effects (such as Verified Carbon Standard - VCS and Climate Community &
Biodiversity Standards - CCB), internationally recognized and in line with the qualitative standards, target to be
achieved by Eni.
Eni launched the forestry projects in 2019 by means of the agreement with BioCarbon Partners to became active
member in the governance of the Luangwa Community Forests Project (LCFP) in Zambia. The LCFP covers
an area of approximately 1 million hectares, involves approximately 200,000 beneficiaries, also with economic
diversification initiatives, and is currently one of the largest REDD + projects in Africa. The LCFP achieved the
CCB (Climate, Community and Biodiversity Standards) “triple gold” issued by international no-profit organization
Verra, leader in the carbon credits certifying, for its outstanding social and environmental impact. Eni committed
to purchase carbon credits generated by the LCFP project until 2038. During the year Eni finalized agreement
to support the development of the Ntakata Mountains project in Tanzania and the Lower Zambezi project in
Zambia, as well as launched the Amigos de Lakmul project in Mexico. In 2021 Eni achieved allowance of carbon
credits by the projects to offset GHG emissions equivalent to over 2 million tonnes of CO2.
Eni is currently considering further different initiatives in several countries, by means of partnerships with
governments and international developers in Africa, Latin America, and Asia. The medium-long term target is
a progressive growth of these initiatives and planned to reach a carbon credit portfolio on yearly basis to offset
over 20 million tonnes of CO2 in 2030.
AGRO-FEEDSTOCK PROJECTS
During the year Eni finalized agreement with the authorities of the Kenya, Congo, Angola, Rwanda and Ivory
Coast as well as in Mozambique and Benin in 2022 aiming to decarbonize the local energy mix by means
of biofuels value chain by promoting agricultural initiatives for the cultivation of oil plants to be used as
feedstock (Low ILUC feedstock – Indirect Land Use Change) for Eni’s biorefineries, enhancing marginal
areas not destined to the food chain.
The development activities plan is focused on vertical integration and includes agreements to produce
oilseeds by local farmers and cooperatives and the construction of oil collection and extraction centers by
Eni (Agri Hubs). The supply chain byproducts will be aimed for domestic market and also for export.
These initiatives will also support rural development, land restoration through sustainable and regenerative
agriculture, with positive impacts on socio-economic development and employment, access to market
opportunities as well as human rights protection, health and food security.
Further programs is being evaluated in other countries with a model in analogy to the ones applied.
In particular, in the first step, industrial production start-up is expected in: (i) Kenya, where development
program includes the construction of 20 agri ,hubs with start-up in 2022. In addition, the agreement provides
Eni Annual Report 2021 71
also for the engineering activities to conversion the Mombasa traditional refinery to biorefinery for HVO and
Biojet production; as well as the collection of UCO (Used Cooking Oil) to be used as feedstock; (ii) Congo
with activities start-up expected in 2023.
The full capacity production is expected to achieve 350 ktonnes from 2026 with engagement of 300,000
farmers. The overall production is expected to subsequently reach a agro-feedstock volume of over 800
thousand tonnes by 2030 leveraging on additional initiatives in other countries.
Within these development initiatives, in November 2021 Eni finalized strategic partnership agreement with
the Bonifiche Ferraresi Group aimed at establishing an equal joint venture. Based on the agreement, Eni
purchased a minority stake in the subsidiary of BF Bonifiche Ferraresi. In addition, the agreement include:
(i) research and experimentation projects of oil plant seeds to be used as feedstock in biorefineries; (ii)
support in the countries where Eni will develop agro-feedstock projects by means of know-how transfer and
agriculture seeds and products supplies.
Management report | Consolidated financial statements | Annex 72
Global Gas & LNG Portfolio
€ 580 mln
Adjusted operating profit
vs. 2020: +78%
70.45 bcm
Worldwide natural gas sales
vs. 2020: +8% thanks
to higher LNG sales
Agreement in Taiwan with
CPC Corporation
for the supply of a LNG cargo
certified carbon neutral
in accordance with PAS2060 standard
Achieved zero
injury target
in 2021
KEY PERFORMANCE INDICATORS
TRIR (Total Recordable Injury Rate)(a)
(total recordable injuries/worked hours) x 1,000,000
of which: employees
contractors
Natural gas sales(b)
Italy
Rest of Europe
of which: Importers in Italy
European markets
Rest of world
LNG sales(c)
Employees at year end
of which outside Italy
Direct GHG emissions (Scope 1)(a)
(a) Calculated on 100% operated assets.
(b) Data include intercompany sales.
(c) Refers to LNG sales of the GGP segment (included in worldwide gas sales).
Performance of the year
(bcm)
(number)
(mmtonnes CO2eq.)
2021
2020
2019
0.00
0.00
0.00
70.45
36.88
28.01
2.89
1.15
0.99
1.37
64.99
37.30
23.00
3.67
0.56
0.96
0.00
72.85
37.98
26.72
4.37
25.12
19.33
22.35
5.56
10.9
847
571
1.01
4.69
9.5
700
410
0.36
8.15
10.1
711
418
0.25
Achieved the zero-injury target for employees and contractors.
Direct GHG emissions (Scope 1) equal to 1.01 million mmtonnes CO2eq. reported an increase as a result of the growth in gas
volumes transported by TTPC and TMPC pipelines and the consolidation of Damietta liquefaction plant.
Eni worldwide gas sales amounted to 70.45 bcm, increased by 8% compared to 2020 (up by 5.46 bcm).
LNG sales amounted to 10.9 bcm, representing an increase of 14.7% compared to 2020.
Eni Annual Report 2021 73
PSV-TTF trend
Gas sales by geographic area
487 486
8%
4%
171
142
112 100
70.45 bcm
Italy
European markets
Importers in Italy
Extra Europe
2019
2020
2021
36%
52%
PSV (€/kcm)
TTF (€/kcm)
Spread PSV-TTF (€/kcm)
Adjusted operating profit (€ mln)
580
326
193
LNG sales (bcm)
10.1
4.6
9.5
4.7
10.9
5.5
5.5
4.8
5.4
Extra Europe
Europe
2019
2020
2021
2019
2020
2021
Business development
Signed an agreement with CPC Corporation, taiwanese utility, for the supply at the Yung An receiving terminal
(Taiwan) of a LNG cargo certified carbon neutral according to the internationally recognized PAS2060 standard,
sourced from the Bontang liquefaction terminal in Indonesia and supplied by the Jangkrik Eni’s gas field.
The GHG emissions related to the entire value chain of the LNG cargo, including gas production, transmission,
liquefaction, shipping, regasification, distribution and end use, were offset through the retirement of high quality
nature based credits. In particular, the credits have been sourced from two projects REDD+: Luangwa Community
Forest in Zambia and Kulera Landscape in Malawi.
As a part of the Eni’s portfolio optimization strategy, aimed at growth in the areas related to the energy transition,
was signed a sale agreement with Snam for the sale of 49.9% of Eni’s stake (directly or indirectly) in the companies
that manage the onshore gas pipelines running from the Algerian and Tunisian borders to Tunisia’s coast (TTPC)
and the offshore gas pipelines connecting the Tunisian coast to Italy (TMPC). The transaction includes the transfer
of these investments to a JV of which a 49.9% share will be sold to Snam for approximately €385 million (Eni will
continue to hold the remaining 50.1% stake). This operation allows to create synergies among the parties’ expertise
in gas transport on a strategic route for the security of the natural gas supply in Italy, enabling potential develop-
ment initiatives within the hydrogen value chain from North Africa.
Announced by the management, the sale of 50% stake of Blue Stream gas pipeline, which carries the Russian gas
marketed by Eni and Gazprom jointly, through Black Sea to Turkish State company Botas.
In march 2021 was completed the restructuring of Uniòn Fenosa Gas through the finalization of the agreements
with the authorities of the Arab Republic of Egypt (ARE) and the Spanish partner Naturgy for the settlement of
the Uniòn Fenosa Gas disputes with the Egyptian partners. The agreement included the 50% share recognition of
Damietta’s plant and the related liquefaction capacity, as well as the gas marketing activities in Spain held by UFG
and the restart of Damietta liquefaction plant.
Management report | Consolidated financial statements | Annex 74
NATURAL GAS
SUPPLY OF NATURAL GAS
Eni’s consolidated subsidiaries supplied 70.98 bcm of natural gas, increased by 8.82 bcm or by 14.2% from the
full year 2020. Gas volumes supplied outside Italy from consolidated subsidiaries (67.39 bcm), imported in Italy
or sold outside Italy, represented approximately 95% of total supplies, increased by 12.70 bcm or by 23% from
the full year 2020. This mainly reflected higher volumes purchased in Russia (up by 7.72 bcm), in Algeria (up by
4.90 bcm), in the UK (up by 1.03 bcm) and in Indonesia (up by 0.66 bcm), partly offset by lower purchases in
Libya (down by 1.26 bcm). Supplies in Italy (3.59 bcm) down by 51.9% from the full year 2020.
SUPPLY OF NATURAL GAS
ITALY
Russia
Algeria (including LNG)
Libya
Netherlands
Norway
United Kingdom
Indonesia (LNG)
Qatar (LNG)
Other supplies of natural gas
Other supplies of LNG
OUTSIDE ITALY
TOTAL SUPPLIES OF ENI'S CONSOLIDATED SUBSIDIARIES
Offtake from (input to) storage
Network losses, measurement differences and other changes
AVAILABLE FOR SALE BY ENI'S CONSOLIDATED SUBSIDIARIES
Available for sale by Eni's affiliates
TOTAL AVAILABLE FOR SALE
(bcm)
2021
3.59
30.21
10.12
3.18
1.41
7.52
2.65
1.81
2.30
2.39
5.80
67.39
70.98
(0.86)
(0.04)
70.08
0.37
2020
7.47
22.49
5.22
4.44
1.11
7.19
1.62
1.15
2.47
5.24
3.76
54.69
62.16
0.52
(0.03)
62.65
2.34
2019
5.57
24.36
6.66
5.86
4.12
6.43
1.75
1.58
2.79
7.90
3.40
64.85
70.42
0.08
(0.22)
70.28
Change
(3.88)
7.72
4.90
% Ch.
(51.9)
34.3
93.9
(1.26)
(28.4)
0.30
0.33
1.03
0.66
(0.17)
(2.85)
2.04
12.70
8.82
(1.38)
(0.01)
7.43
27.0
4.6
63.6
57.4
(6.9)
(54.4)
54.3
23.2
14.2
(265.4)
(33.3)
11.9
2.57
(1.97)
(84.2)
70.45
64.99
72.85
5.46
8.4
In 2021, main gas volumes from equity production derived from: (i) certain Eni fields located in the British and
Norwegian sections of the North Sea (2.6 bcm); (ii) Italian gas fields (2.2 bcm); (iii) Indonesia (0.9 bcm); (iv)
Libyan fields (0.7 bcm). Supplied gas volumes from equity production were 6.4 bcm representing around 9% of
total volumes available for sale. The available for sale by Eni’s affiliates amounted to 0.37 bcm (down by 84.2%
compared to 2020) and mainly referred to supplied volumes from Spain and Oman.
SALES
European gas market was characterised by extreme conditions due to tight supplies and uncertainties supply
flows from Russia. In this scenario the raising in demand has highlighted increase consumption about up by 7%
and up by 6% in Italy and in the European Union, respectively, compared to 2020, natural gas sales amounted to
70.45 bcm (including Eni’s own consumption, Eni’s share of sales made by equity-accounted entities), increased
by 5.46 bcm or 8.4% from the previous year due to higher sales in Turkey and higher volumes sales of LNG.
GAS SALES BY ENTITY
Total sales of subsidiaries
Italy (including own consumption)
Rest of Europe
Outside Europe
Total sales of Eni's affiliates (net to Eni)
Rest of Europe
Outside Europe
WORLDWIDE GAS SALES
(bcm)
2021
69.99
36.88
27.69
5.42
0.46
0.32
0.14
2020
62.58
37.30
21.54
3.74
2.41
1.46
0.95
2019
Change
% Ch.
70.17
37.98
25.21
6.98
2.68
1.51
1.17
7.41
(0.42)
6.15
1.68
(1.95)
(1.14)
(0.81)
5.46
11.8
(1.1)
28.6
44.9
(80.9)
(78.1)
(85.3)
8.4
70.45
64.99
72.85
Eni Annual Report 2021 Sales in Italy (36.88 bcm) decreased by 1.1% from 2020 mainly due to lower sales to hub and to thermoelectrical
and industrial segments, partly offset by higher sales in wholesalers segment. Sales to importers in Italy (2.89 bcm)
decreased by 21.3% from 2020 due to the lower availability of Libyan gas.
Sales in the European markets amounted to 25.12 bcm, an increase of 30% or 5.79 bcm from 2020.
Sales in the extra European markets of 5.56 bcm increased by 0.87 bcm or 18.6% from the previous year, due to higher
volumes marketed in the Asian markets.
75
GAS SALES BY MARKET
ITALY
Wholesalers
Italian gas exchange and spot markets
Industries
Power generation
Own consumption
INTERNATIONAL SALES
Rest of Europe
Importers in Italy
European markets:
Iberian Peninsula
Germany/Austria
Benelux
United Kingdom
Turkey
France
Other
Extra European markets
WORLDWIDE GAS SALES
LNG
LNG SALES
Europe
Outside Europe
TOTAL LNG SALES
(bcm)
2021
36.88
13.37
12.13
4.07
0.94
6.37
33.57
28.01
2.89
25.12
3.75
0.69
3.47
2.65
8.50
5.80
0.26
5.56
2020
37.30
12.89
12.73
4.21
1.34
6.13
27.69
23.00
3.67
19.33
3.94
0.35
3.58
1.62
4.59
5.01
0.24
4.69
2019
Change
37.98
13.08
12.13
4.62
1.90
6.25
34.87
26.72
4.37
22.35
4.22
2.19
3.78
1.75
5.56
4.47
0.38
8.15
(0.42)
0.48
(0.60)
(0.14)
(0.40)
0.24
5.88
5.01
(0.78)
5.79
(0.19)
0.34
(0.11)
1.03
3.91
0.79
0.02
0.87
5.46
% Ch.
(1.1)
3.7
(4.7)
(3.3)
(29.9)
3.9
21.2
21.8
(21.3)
30.0
(4.8)
97.1
(3.1)
63.6
85.2
15.8
8.3
18.6
8.4
70.45
64.99
72.85
(bcm)
2021
2020
2019
Change
% Ch.
5.4
5.5
10.9
4.8
4.7
9.5
5.5
4.6
10.1
0.6
0.8
1.4
12.5
17.0
14.7
In 2021, LNG sales (10.9 bcm, included in the worldwide gas sales) increased by 14.7% from 2020 and mainly
concerned LNG from Egypt, Qatar, Indonesia and Nigeria and marketed in Europe and Asia.
INTERNATIONAL TRANSPORT ACTIVITY
Eni, as shipper, has transport rights on a large European and North African networks for transporting natural gas in
Italy and Europe, which link key consumption basins with the main producing areas (Russia, Algeria, the North Sea,
including the Netherlands, Norway, and Libya).
The Company participates to both entities which operate the pipelines and entities which manage transport rights.
The main international pipelines currently participated or operated by Eni are: (i) the TTPC pipeline, 740-kilometer
long which transports natural gas from Algeria; (ii) the TMPC pipeline for the import of Algerian gas is 775-kilometer
long; (iii) the GreenStream pipeline for the import of Libyan gas (520-kilometer long); and (iv) Eni holds an interest in
the Blue Stream underwater pipeline linking the Russian coast to the Turkish coast of the Black Sea.
Management report | Consolidated financial statements | Annex 76
Energy
Evolution
Relazione sulla gestione | Bilancio consolidato | Bilancio di esercizio | Allegati 77
Eni Relazione Finanziaria Annuale 2021 78
Refining & Marketing and Chemicals
1.1 mmtonnes/y
Biorefinery capacity
€152 mln
Adjusted operating profit
vs. 2020: +€146 mln
4.5 mmtonnes
Sales of petrochemical products vs. 2020:
+3% thanks to the recover in demand
228
tonnes CO2eq./ktonnes
Direct GHG emissions
(Scope 1)/Refinery throughputs
(raw and semi-finished materials)
vs. 2020: -8%
KEY PERFORMANCE INDICATORS
2021
2020
2019
TRIR (Total Recordable Injury Rate)(a)
(total recordable injuries/worked hours) x 1,000,000
of which: employees
contractors
Bio throughputs
Capacity of biorefineries
Average biorefineries utilization rate
Conversion index of oil refineries
Average oil refineries utilization rate
Retail sales of petroleum products in Europe
Service stations in Europe at year end
Average throughput per service station in Europe
Retail efficiency index
Production of petrochemical products
Sale of petrochemical products
Average petrochemical plant utilization rate
Employees at year end
of which: outside Italy
Direct GHG emissions (Scope 1)(a)
Direct GHG emissions (Scope 1)/Refinery throughputs
(raw and semi-finished materials)
(a) Calculated on 100% operated assets.
0.80
1.13
0.49
665
1.1
65
49
76
7.23
5,314
1,521
1.19
8,476
4,451
66
0.80
1.17
0.48
710
1.1
63
54
69
6.61
5,369
1,390
1.22
8,073
4,339
65
0.27
0.24
0.29
311
1.1
44
54
88
8.25
5,411
1,766
1.23
8,068
4,295
67
(ktonnes)
(mmtonnes/year)
(%)
(mmtonnes)
(number)
(kliters)
(%)
(ktonnes)
(%)
(number)
13,072
11,471
11,626
4,044
2,556
2,591
(mmtonnes CO2eq.)
6.72
6.65
7.97
(tonnes CO2 eq./ktonnes)
228
248
248
Eni Annual Report 2021 79
Evolution of retail network in Italy
Biorefining system
4,184
4,134
23.6
1.23
23.2
1.22
4,078
22.3
1.19
2019
2020
2021
Service stations
Market share (%)
Retail efficiency index (%)
710
74
63
665
65
40
2020
2021
311
80
44
2019
Petrochemical production system
Refining energy efficiency
8,068
8,073
8,476
22.74
17.00
18.78
67.0
65.0
66.0
2019
2020
2021
Petrochemical production (kton)
Average plant utilization rate (%)
248
248
228
2019
2020
2021
Bio throughputs
(kton)
Average biorefineries
utilization rate (%)
Incidence
of palm oil (%)
Refinery throughputs on
own account in Italy
and abroad (mmtonnes)
Direct GHG emissions
(Scope 1)/Refinery
throughputs
(raw and semi-finished
materials)
(tonnes CO2eq./ktonnes)
Performance of the year
Total recordable injury rate (TRIR) of the workforce amounted to 0.80, substantially in line compared
to the previous year.
Direct GHG emissions (Scope 1) increased by 1% compared to 2020, following the resumption of
activities mainly in the chemical business.
Direct GHG emissions (Scope 1)/refining throughputs (raw and semi-finished materials) were down by
8% compared to the previous year, despite the increase of commodities processed at the Sannazzaro
and Livorno sites.
In 2021 Eni’s refining throughputs on own account amounted to 18.78 mmtonnes (excluding the
ADNOC Refining) up by 10.5% from 2020, benefitting from the 2021 economic recovery, supported by
the resumption of the activities negatively affected in 2020 by the partial lockdown.
Production of biofuels from vegetable oil amounted to 665 mmtonnes, down by 6% from 2020, affected
by a particularly depressed scenario.
Retail sales in Italy were 5.12 mmtonnes, increased by 12% from 2020 as a result of the progressive economy
reopening and greater mobility of people. Market share was 22.3% (23.2% in 2020).
Sales of petrochemical products were 4.45 mmtonnes, up by 3%, thanks to the macroeconomic
growth, rebound in demand of leading sectors, such as packaging and the recovery of the automotive
business.
Management report | Consolidated financial statements | Annex 80
Business developments and portfolio transaction
In order to expand the recycled polymers portfolio of Versalis Revive® and to consolidate the European
leadership in styrenic polymers, Versalis acquired the technology and plants of Ecoplastic, company
specialized in the recovery, recycling and transformation chain of styrenic polymers. This is the first step
of the transformation project of Porto Marghera plant, which includes the installation in the next year of
the plants acquired for the production of styrene polymers entirely obtained from recycle raw material. The
overall capacity of the first phase will be approximately 20 ktonnes per year.
In September Versalis finalized the acquisition of the control in Finproject, exercising the call option to buy
the remaining 60% of share capital, following the initial acquisition of a 40% participating interest in 2020. The
acquisition is complementary to Versalis’ specialties portfolio and will create an all-Italian leading platform
with high-performance formulated polymer applications and compounding, less influenced by commodity
fluctuations. In January Finproject has taken the ISCC Plus certification for compound productions and
products from renewable raw materials.
Circular economy and green chemicals
Finalized the full share acquisition of FRI-EL Biogas Holding, Italian leader in biogas’s production. The
company, renamed EniBioCh4in, owns plants generating electricity from biogas and a plant for processing
OFMSW, the organic fraction of municipal solid waste, which Eni intends to convert to produce biomethane,
that will supply in Eni service stations.
Versalis, coherently with the Eni’s decarbonization strategy, has launched a transformation plan which aims
to make its activities and products diversified and sustainable, in accordance with the principles of the
circular economy.
In 2021, Versalis expanded the “circular” products offering, manufactured with recycled raw materials. A
new product called Versalis Revive® PS Air F – Series Forever was added to Versalis Revive® product line.
It was addressed for food packaging and 75% made by recycled polystyrene from domestic waste sorting.
The new product developed by Versalis and Forever Plast SpA, is the result of collaboration with various
operators in the polystyrene industry such as Corepla, Pro Food e Unionplast.
Confirmed the commitment aimed at the development of sustainable innovative technologies, through the
agreement signed with BTS Biogas, an Italian company engaged in the design and realization of biogas
plants, to develop and market an innovative technology to produce biogas and biomethane from residual
lignocellulosic biomass. The technology will focus on Versalis’ technology integration for biomass thermo-
mechanical pretreatment, with the BTS Biogas technology for biogas and biomethane production via
fermentative ways.
Finally, signed an agreement between Matrìca, a JV Versalis/Novamont company, and Lanxess, a leader in
specialty chemicals for the production of biocides from renewable raw materials. In January 2022 started the
supply of renewable-source raw materials obtained from vegetable oils to the Porto Torres plant. Lanxess will
use these materials to produce biocidal industrial additives for the consumer goods sector.
Sustainable mobility
As part of Eni’s sustainable mobility growth strategy, signed an agreement in order to offer the battery
swapping service for XEV’s city car at the Eni service stations. In addition, from 2022, the XEV YOYO zero-
emission city car will become part of the Enjoy fleet.
In order to promote initiatives to decarbonize the aviation sector and accelerate the process of energy
transition of airports, signed an agreement with SEA, the Milan Malpensa and Milan Linate airports operator,
for the supply of sustainable fuels for aviation (SAF – Sustainable Aviation Fuel) and for ground handling
Eni Annual Report 2021 81
(HVO – Hydrotreated Vegetable Oil). This initiative is in line with the agreement finalized in January 2022
with Aeroporti di Roma which launched the first supplies of pure HVO hydrogenated biofuel, produced in
Eni’s biorefinery in Porto Marghera, to fuel the road vehicles for handling passengers with reduced mobility
at the airport.
SAF production started in October, are produced exclusively from waste and residues, in line with the
strategic decision of zeroing the use of palm oil from 2023.
As a step towards the transport decarbonization signed a letter of intent with Air Liquide for development
of hydrogen mobility in Italy, in particular a feasibility and sustainability study for the development of the
low carbon and renewable hydrogen supply chain to support the market of fuel cell vehicles for heavy and
light mobility.
Finally signed a strategic agreement with BASF, related to a new technology that produces advanced bio-
propanol from glycerin, obtained from the production of industrial biodiesel FAME (Fatty Acid Methil Esters),
intended for use as a bio component in fuel formulation.
Proprietary technologies
Proprietary technologies will play a key role in accelerating the “green” conversion of Versalis reducing
dependence on oil feedstock; Eni is engaged in the chemical recycling of non-reusable plastics (HOOP
technology) and the enhancement of forest biomass for production bioethanol and biogas (PROESA
technology) in collaboration with qualified partners such as Saipem and BTS Biogas. As part of the
valorization of proprietary technologies and the strengthening of Eni presence in the Asian continent,
Versalis has licensed the mass continuous technology to Supreme Petrochem Ltd, an Indian market-leader
in compact and expandable polystyrene, to create a plant in Maharashtra (India). This is a technology that
allows one to produce styrene polymers with reduced environmental impact, thanks to low emission and
low energy consumption.
REFINING & MARKETING
SUPPLY AND TRADING
In 2021, were purchased 18.85 mmtonnes of crude (compared with 17.37 mmtonnes in 2020), of which
3.85 mmtonnes by equity crude oil, 10.79 mmtonnes on the spot market and 4.21 mmtonnes by producer’s
Countries with term contracts. The breakdown by geographic area was as follows: 20% of purchased crude
came from the Middle East, 18% from Russia, 15% from Central Asia, 15% from North Africa, 11% from Italy,
11% from West Africa, 2% from North Sea and 8% from other areas.
PURCHASES
Equity crude oil
Other crude oil
Total crude oil purchases
Purchases of intermediate products
Purchases of products
TOTAL PURCHASES
Consumption for power generation
Other changes(a)
TOTAL AVAILABILITY
(mmtonnes)
2021
3.85
2020
3.55
4.24
2019
Change
% Ch.
15.00
13.82
19.19
18.85
17.37
23.43
0.26
0.11
0.26
10.66
10.31
11.45
29.77
27.79
35.14
(0.31)
(0.89)
(0.35)
(0.69)
(0.35)
(2.08)
0.30
1.18
1.48
0.15
0.35
1.98
0.04
8.5
8.5
8.5
136.4
3.4
7.1
11.4
(0.20)
(29.0)
28.57
26.75
32.71
1.82
6.8
(a) Include change in inventories, decrease due to transportation, consumption and losses.
Management report | Consolidated financial statements | Annex 82
REFINING
In 2021, Eni’s refining throughputs on own account were 18.78 mmtonnes increased by 10.5% from 2020, due
to the higher throughputs in Italy, in response to a lower impact of the COVID-19 pandemic compared to the
comparative period which was negatively affected by the partial lockdown of the economy, partly offset by the
impact of a depressed refining scenario.
In Italy, the refinery throughputs (16.51 mmtonnes) increased by 11.4% from 2020 following the depressed
refining scenario, due to higher volumes processed at Sannazzaro refinery.
Outside Italy, Eni’s refining throughputs on own account were 2.27 mmtonnes, up by approximately 90 ktonnes
or 4.1% as a result of lower standstill compared to the previous year, partly offset by negative scenario.
Total throughputs in wholly-owned refineries were 14.01 mmtonnes, increase by 1.29 mmtonnes or 10.1%
compared with 2020.
The refinery utilization rate, ratio between throughputs and refinery capacity, is 76%.
Approximately 21% of processed crude was supplied by Eni’s Exploration & Production segment, with a slight
decrease from 2020 (21.2%).
BIOREFINERY
The volumes of biofuels processed from vegetable oil were 665 mmtonnes down by 6% from the previous period
(40 ktonnes), as a result of standstill at Venezia biorefinery in a depressed scenario context.
In addition, the incidence rate of palm oil supplied for the production of biodiesel was reduced by approximately
34 percentage points compared to 2020, leveraging on the start-up of a new Biomass Treatment Unit (BTU) at
the Gela biorefinery, enabling the use of up to 100% of biomass not in competition with the food chain for the
production of biofuels. Confirmed the zeroing palm oil by 2023 in the refining processes.
In 2021 productions of biofuels (HVO) amounted to approximately 585 ktonnes (down by 6%) according to
certifications in use (European RED and related directives).
AVAILABILITY OF REFINED PRODUCTS
ITALY
At wholly-owned refineries
Less input on account of third parties
At affiliated refineries
Refinery throughputs on own account
Consumption and losses
Products available for sale
Purchases of refined products and change in inventories
Products transferred to operations outside Italy
Consumption for power generation
Sales of products
Bio throughputs
OUTSIDE ITALY
Refinery throughputs on own account
Consumption and losses
Products available for sale
Purchases of refined products and change in inventories
Products transferred from Italian operations
Sales of products
Refinery throughputs on own account in Italy and outside Italy
of which: refinery throughputs of equity crude on own account
Total sales of refined products in Italy and outside Italy
Crude oil sales
TOTAL SALES
(mmtonnes)
2021
2020
2019
Change
% Ch.
14.01
(1.71)
4.21
16.51
(1.11)
15.40
7.38
(0.67)
(0.31)
21.80
0.67
12.72
(1.75)
3.85
14.82
(0.97)
13.85
7.18
(0.66)
(0.35)
20.02
0.71
17.26
(1.25)
4.69
20.70
(1.38)
19.32
7.27
(0.68)
(0.35)
25.56
1.29
0.04
0.36
1.69
(0.14)
1.55
0.20
(0.01)
0.04
1.78
0.31
(0.04)
2.27
2.18
2.04
0.09
(0.18)
(0.17)
(0.18)
(0.01)
2.09
3.41
0.67
6.17
18.78
3.86
27.97
0.60
2.01
3.39
0.66
6.06
17.00
3.55
26.08
0.67
1.86
4.17
0.68
6.71
22.74
4.24
32.27
0.08
0.02
0.01
0.11
1.78
0.31
1.89
10.1
2.3
9.4
11.4
(14.8)
11.2
2.8
(1.5)
11.4
8.9
(5.6)
4.1
(5.9)
4.0
0.6
1.5
1.8
10.5
8.7
7.2
28.57
26.75
32.71
1.82
6.8
0.44
(0.07)
(10.4)
Eni Annual Report 2021
83
MARKETING OF REFINED PRODUCTS
In 2021, retail sales of refined products (27.97 mmtonnes) were up by 1.89 mmtonnes or by 7.2% from 2020,
due to the lower impact of COVID-19 crisis on mobility.
PRODUCT SALES IN ITALY AND OUTSIDE ITALY
(mmtonnes)
2021
2020
2019
Change
% Ch.
Retail
Wholesale
Petrochemicals
Other sales
Sales in Italy
Retail rest of Europe
Wholesale rest of Europe
Wholesale outside Europe
Other sales
Sales outside Italy
5.12
6.02
0.52
10.14
21.80
2.11
2.19
0.52
1.35
6.17
4.56
5.75
0.61
9.10
20.02
2.05
2.40
0.48
1.13
6.06
5.81
7.68
0.83
11.24
25.56
2.44
2.63
0.48
1.16
6.71
TOTAL SALES OF REFINED PRODUCTS IN ITALY AND OUSTIDE ITALY
27.97
26.08
32.27
0.56
0.27
12.3
4.7
(0.09)
(14.8)
1.04
1.78
0.06
(0.21)
0.04
0.22
0.11
1.89
11.4
8.9
2.9
(8.8)
8.3
19.5
1.8
7.2
Retail sales in Italy
In 2021, retail sales in Italy were 5.12 mmtonnes, with an increase compared to 2020 (0.56 mmtonnes or up
by 12.3%) as consequence of the restrictive measures implemented mainy in the second quarter during the
pandemic peak. Average throughput per service station (1,362 kliters) increased by 156 kliters from 2020
(1,206 kliters). Eni’s retail market share of 2021 was 22.3%, slightly down from 2020 (23.2%).
As of December 31, 2021, Eni’s retail network in Italy consisted of 4,078 service stations, lower by 56 units from
December 31, 2020 (4,134 service stations), resulting from the negative balance of acquisitions/releases of
lease concessions (65 units), a decrease of 4 motorway concession/acquisitions, partly offset by the positive
balance of acquisitions/releases of network owned stations (13 units).
RETAIL AND WHOLESALES SALES OF REFINED PRODUCTS
Italy
Retail sales
Gasoline
Gasoil
LPG
Others
Wholesale sales
Gasoil
Fuel Oil
LPG
Gasoline
Lubricants
Bunker
Jet fuel
Other
Outside Italy (retail+wholesale)
Gasoline
Gasoil
Jet fuel
Fuel Oil
Lubricants
LPG
Other
(mmtonnes)
2021
11.14
2020
10.31
5.12
1.38
3.38
0.31
0.05
6.02
3.11
0.03
0.17
0.34
0.08
0.59
0.92
0.78
4.82
1.06
2.78
0.07
0.08
0.11
0.53
0.19
4.56
1.16
3.10
0.27
0.03
5.75
3.11
0.02
0.18
0.30
0.08
0.63
0.70
0.73
4.93
1.13
2.73
0.09
0.13
0.09
0.50
0.26
2019
Change
% Ch.
13.49
5.81
1.44
3.95
0.38
0.04
7.68
3.41
0.06
0.18
0.47
0.08
0.77
1.92
0.79
5.55
1.31
3.02
0.29
0.09
0.09
0.50
0.25
0.83
0.56
0.22
0.28
0.04
0.02
0.27
0.00
0.01
(0.01)
0.04
0.00
(0.04)
0.22
0.05
(0.11)
(0.07)
0.05
(0.02)
(0.05)
0.02
0.03
8.1
12.3
19.0
9.0
14.8
66.7
4.7
0.0
50.0
(5.6)
13.3
0.0
(6.3)
31.4
6.8
(2.2)
(6.2)
1.8
(22.2)
(38.5)
22.2
6.0
(0.07)
(26.9)
TOTAL RETAIL AND WHOLESALES SALES
15.96
15.24
19.04
0.72
4.7
Management report | Consolidated financial statements | Annex 84
Retail sales in the Rest of Europe
Retail sales in the Rest of Europe were 2.11 mmtonnes, recorded an increase from 2020 (up by 2.9%) as
a result of higher sold volumes in Austria, France and Spain benefitting from the economic recovery and
greater mobility of people.
At December 31, 2021, Eni’s retail network in the Rest of Europe consisted of 1,236 units, increasing by 1 unit
from December 31, 2020, mainly in Spain balanced by the retail network closer in Switzerland and France. Average
throughput (2,025 kliters) increased by 45 kliters compared to 2020 (1,980 kliters).
Wholesale and other sales
Wholesale sales in Italy amounted to 6.02 mmtonnes, increasing by 4.7% from the full year of 2020, due to
lower impact of the restrictive measures and the resumption of air transport.
Wholesale sales in the Rest of Europe were 2.19 mmtonnes, down by 8.8% from 2020 particularly in Germany,
Switzerland and Austria.
Supplies of feedstock to the petrochemical industry (0.52 mmtonnes) decreased by 14.8%. Other sales in
Italy and outside Italy (11.49 mmtonnes) increased by 1.26 mmtonnes or up by 12.3% mainly due to higher
volumes sold to oil companies.
CHEMICALS
PRODUCT AVAILABILITY
Intermediates
Polymers
Biochem
Production of petrochemicals
Moulding & Compounding
Total productions
Consumption and losses
Purchases and change in inventories
Total availability
Intermediates
Polymers
Oilfield chemicals
Biochem
Sales of petrochemicals
Moulding & Compounding
TOTAL SALES
(ktonnes)
2021
6,284
2,184
8
2020
5,861
2,211
1
5,818
2,250
2019
Change
% Ch.
423
(27)
7
403
20
423
8,476
8,073
8,068
20
8,496
8,073
8,068
(4,590)
(4,366)
(4,307)
(224)
565
4,471
2,648
1,771
24
8
632
4,339
2,539
1,790
9
1
534
4,295
2,519
1,766
10
4,451
4,339
4,295
20
4,471
4,339
4,295
(67)
132
109
(19)
15
7
112
20
132
7.2
(1.2)
..
5.0
5.2
(5.1)
(10.6)
3.0
4.3
(1.1)
..
..
2.6
3.0
Petrochemical sales of 4,451 ktonnes slightly increased from 2020 (up by 112 ktonnes, or 2.6%) thanks
to the macroeconomic growth and the rebound in demand in leading sectors, such as packaging, durable
goods sector and the recovery of the automotive sector.
This performance also reflects the ability to capture additional sales volumes thanks to the greater
availability of the plants obtained by reprogramming the multi-year standstill, to reap the benefits from
the recovery in demand e and the reduction in imports from producer countries (USA and Middle East),
also as result of temporary product shortages.
Average unit sales prices of the intermediates business increased by 56.3% from 2020, with aromatics
and olefins up by 84.7% and 52.9%, respectively. The polymers reported an increase of 66.6% from 2020.
Eni Annual Report 2021
85
Petrochemical production of 8,476 ktonnes up by 403 ktonnes from 2020 due to higher production of inter-
mediates business (up by 423 ktonnes), in particular olefins; these higher volumes were partially offset by
lower productions of styrenics down by 78 ktonnes from 2020.
The main increases in production were registered at the Priolo site (up by 527 ktonnes) and in Dunkerque (up
by 221 ktonnes), offset by lower volumes processed at Brindisi (down by 201 ktonnes) and Porto Marghera
(down by 140 ktonnes).
Nominal capacity of plants were substantially unchanged from 2020. The average plant utilization rate calcu-
lated on nominal capacity was 66%, (65% in 2020).
BUSINESS TRENDS
Intermediates
Intermediates revenues (€2,166 million) increased by €837 million from 2020 (up by 63%) reflecting
both the increase of commodity prices scenario and the higher product availability. Sales increased,
in particular for olefins (up by 7.6%). Average unit prices increased by 56.3%, in particular aromatics
(up by 84.7%), olefins (up by 52.9%) and derivatives (up by 50.1%). Intermediates production (6,284
ktonnes) registered an increase of 7.2% from 2020. Significant increases were recorded in aromatics
(up by 14.2%) and in olefines (up by 7.2%). In reduction derivatives (down by 7.3%).
Polymers
Polymers revenues (€3,114 million) increased by €1,226 million or 64.9% from 2020 due to the decrease of
the average unit prices (up by 66.6%). The styrenics business benefitted of the increase of prices sale (up
by 68.9%) despite the decrease of sold volumes (-7.9%) due to the lower product availability as a result of
the maintenance standstills in Mantova.
The decrease of volumes were mainly attributable to GPPS (down by 23%), ABS (down by 16.6%) and compact
polystyrene (down by 3.3%), these lower volumes were partly offset by higher sales of styrene (up by 13.4%).
In the elastomers business, an increase of sold volumes (up by 11.4%) was attributable to lattices (up
by 23.6%), EPR (up by 40.5%), and SBR rubbers (up by 14.8%). Overall, the sold volumes of polyethylene
business reported a slight reduction (down by 1.4 %) with lower sales of HDPE and LDPE (down by
10.3% and 3.4%, respectively), partly offset by higher sales of EVA (up by 6.4%); in addition, average
sales prices increased (up by 73.9%). Polymers productions (2,184 ktonnes) decreased from the
2020 due to the lower productions of styrenics (down by 7.9%), partly offset by higher production of
elastomers (up by 13.4%).
Oilfield Chemicals, Biochem e Moulding & Compounding
Oilfiled chemicals revenues (€65 million) increased by 16.1% (up by €9 million compared to 2020) as a
result of the increase in sales volumes (15 ktonnes) following the effect of the new contracts signed.
Biochem business revenues (€60 million) increased by €54 million from 2020 and mainly refer to sales of
disinfectant produced at the Crescentino plant. The amount also includes the share of revenue from sales
of energy produced at the biomass power plant at the Crescentino hub.
Moulding & Compounding business revenues of €70 million refer to 20 ktonnes of products sold, following
the consolidation of the Finproject group on October 1, 2021. The amount includes compounding activities
for €21 million, moulding for €24 million and the Padanaplast activities for €25 million.
Management report | Consolidated financial statements | Annex 86
Plenitude & Power
Ebitda Plenitude
€0.6 bln
Achieved the target of >2GW of installed
capacity and under construction
7.85 bln cm
Retail gas sales vs. 2020: +2%
16.49 TWh
Retail power sales to end
customers vs. 2020: +32% thanks to the
growth of activities in Italy and abroad
986 GWh
Production from renewables sources
almost triplied vs. 2020
KEY PERFORMANCE INDICATORS
2021
2020
2019
Total recordable incident rate (TRIR)(a)
(total recordable injuries/worked hours) x 1,000,000
of which: employees
contractors
Plenitude
Retail and business gas sales
Retail and business power sales to end customers
Retail/business customers
Energy production from renewable sources
Installed capacity from renewables at period end
Power
Power sales in the open market
Thermoelectric production
Employees at year end
of which: outside Italy
Direct GHG emissions (Scope 1)(a)
Direct GHG emissions (Scope 1)/equivalent produced electricity
(Eni Power)(a)
(a) Calculated on 100% operated assets.
0.29
0.49
0.00
7.85
16.49
10.04
986
(bcm)
(TWh)
(milion of POD)
(GWh)
(MW)
1,137
(TWh)
(number)
(mmtonnes CO2eq.)
(gCO2eq./kWh eq.)
28.54
22.36
2,464
600
10.03
380
0.32
0.00
0.73
0.62
0.30
0.95
7.68
8.62
12.49
10.92
9.70
340
335
25.33
20.95
2,092
413
9.63
391
9.55
61
174
28.28
21.66
2,056
358
10.22
394
Eni Annual Report 2021
87
Italy
Australia
France
Pakistan
USA
Kazakhstan
Spain
Retail customers and business
(mln of POD)
9.5
9.7
10.0
Plenitude installed capacity
11%
8%
41%
2019
2020
2021
Clienti power
Clienti gas
Retail gas sales in Italy
1,137 MW
24%
1%
9%
6%
0.72
Evolution of EBIT adjusted (€ mln)
0.30
0.24
Resellers
Industries
Small and medium-sized
enterprises and services
465
476
370
5.14 bln mc
Residential
3.88
2019 2020 2021
Performance of the year
The total recordable injury rate (TRIR) of the workforce improved by 9.3% compared to the 2020, as a result of
the excellent performance obtained by contractors.
Direct GHG emissions (Scope 1) reported an increase (up by 4% compared to 2020), due to the growth of the
productions at the power generation sites.
Direct GHG emissions (Scope 1)/equivalent produced electricity reported a decreasing trend from 2020
(down by 3%) following the reduced use of syngas at the Ferrera Erbognone plant.
Energy production from renewable sources amounted to 986 GWh, almost triplied from the comparative
period (340 GWh in 2020) due to the contribution of the acquired assets in operation in Italy, the United States,
France and Spain.
As of December 31, 2021, the installed capacity from renewables was 1.137 MW: 51% attributable to wind
farms and 48% attributable to photovoltaic plants (installed storage capacity of 1%).
Retail and business gas sales amounted to 7.85 bcm, up by 2% compared to 2020, as a result of the lower
impact of COVID-19 and Aldro Energía acquisition.
Retail and business power sales to end customers amounted to 16.49 TWh, recording an increase of 32%
benefitting from Aldro Energía acquisition, as well as the development of the activities in Italy and abroad.
Power sales in the open market amounted to 28.54 TWh, up by 13% following the higher volumes sold to the
Power Exchange.
Portfolio valorization
As part of initiatives to extract value from portfolio restructuring by creating independent vehicles focused
on attracting capital, creating value and accelerating growth, started the listing process for Plenitude, the Eni’s
subsidiary which comprises Gas & Power retail activities, renewables and e-mobility, with the strategic goal of
Management report | Consolidated financial statements | Annex
88
decarbonizing Eni’s customer portfolio, contributing to achieve the reduction target on GHG Scope 3 emissions.
The establishment of the new company Plenitude is part of the Eni’s strategy and long-term commitment to be a
decarbonization energy company and focused on sustainability. The decision is in line with a favorable industrial
scenario, with the growth in demand of renewables energies and green energy products for retail client.
On 14 March 2022, Eni signed an agreement with the investment company Sixth Street for the sale of the 49%
share in EniPower which owns six gas power plants. This agreement, subject to certain conditions precedent and
authorizations of the competent Authorities, is part of Eni’s strategy to enhance its assets and generate resources for
the energy transition. Eni will mantain the operative control of EniPower as well as the consolidation of the company.
Portfolio developments
In line with the strategy of decarbonization and energy transition of product and process, finalized the acquisition
of 100% of Be Power Spa, a company that through its subsidiary Be Charge is the second Italian operator for
installing and operating EV charging columns with over 6,000 charging points. Be Power manages its own
charging stations and those of other operators through a proprietary technology platform and provides charging
services to drivers of electric vehicles on its own or third-party charging stations through a dedicated app.
Evolvere, Plenitude’s subsidiary, completed the acquisition of a 100% stake in PV Family, an innovative start-
up that manages My Solar Family, the largest digital community of prosumer (consumers/energy producers),
in Italy with over 80 thousand subscribers. The acquisition of the capital has the objective to combine the
Evolvere’s supply and digital community services, in a market context that promotes a new energy model
where the customer evolves from a consumer to an energy producer. With this acquisition Evolvere confirms
the leadership in distributed generation from renewable sources in Italy and reaffirms the promotion of a new
energy model, decentralized and sustainable, contributing to the ongoing energy transition.
Entry into the Iberian Peninsula through the 100% acquisition of Aldro Energía, active in the market of the sale
of electricity, gas and services in the residential segment with a portfolio of over 300,000 customers.
Eni and CDP Equity established GreenIT, a new joint venture for the development, construction and
management of plants for the production of electricity from renewable sources in Italy. The JV’s aim is to
reach a level of installed capacity of approximately 1 GW.
Business developments
Growth of the retail/business portfolio to 10 million points of delivery, up by over 300 thousand points
compared to December 31, 2020 (up 4%) leveraging on the growth in Greece and the acquisition of Aldro
Energía, engaged in the Spanish and Portuguese retail markets.
In 2021 continued the expansion in the national and international renewable energy market, with strong
acceleration in the build-up of renewable generation capacity, leveraging targeted tuck-in acquisitions that can
be quickly integrated into Eni’s portfolio:
In Italy finalized the acquisition from Glennmont Partners (“Glennmont”) and PGGM Infrastructure Fund
(“PGGM”) of a portfolio of 13 onshore wind farms in Italy, for a total capacity of 315 MW;
In Spain, finalized in October the acquisition from Azora Capital of 9 renewable energy projects consisting
of 3 wind facilities in operation and 1 under construction for a total of 234 MW and 5 photovoltaic projects
at an advanced stage of development for about 0.9 GW;
In France and Spain finalized in October the acquisition of Dhamma Energy Group, owner of a pipeline of
photovoltaic projects with a target installed capacity of about 3 GW, and installations already in operation
or under construction with a capacity of approximately 120 MW;
In Greece, in January 2022, acquired the Greek company Solar Konzept Greece “SKGR”, owner of a portfolio
of photovoltaic plants in Greece with a pipeline of projects targeting about 800 MW, which will form the
basis for further development of the renewable portfolio in the country;
In the UK offshore wind market finalized the agreement with Equinor and SSE Renewables for the acquisition
of the 20% interest in Dogger Bank C project worth (1.2 GW), the third phase of the largest offshore wind farm
in the world (3.6 GW) currently under construction in the UK North Sea. Production will start in different stages
in the 2023-2025 period.
Eni Annual Report 2021
89
In February 2022 was expanded portfolio of renewable capacity in the United States through the acquisition
from BayWa r.e. with a total capacity of 466 MW in Texas, of which 266 MW referred to Corazon I Solar plant.
The plant began operations in August 2021, it will produce about 500 GWh each year, equivalent to eliminating
about 250 ktonnes of CO2 emissions annually into the atmosphere. In the same location, acquired Guajillo
storage project, in advanced stage of development, with a capacity of around 200 MW/400 MWh.
In 2021, were signed a collaboration agreements to develop renewable plants with: Equinor (through
Vårgrønn) for the development of an offshore wind project in the Utsira Nord, with Red Rock Power in
order to make a joint bid to ScotWind proposition, and with Copenhagen Infrastructure Partners (CIP), as
part of the competition for allocation of marine concessions for the offshore wind farm development in
Polonia and for the subsequent participation in incentive mechanisms (contract-for-difference), which will
be auctioned between 2025 and 2027.
E-mobility
As a part of the initiative for the development of the e-mobility sector in Italy, signed an agreement with Hyundai with
the aim to expand the range of products for recharging electric cars and to encourage energy efficiency. Thanks
to this agreement, Hyundai dealers will be able to offer their customers the purchase and the installation of the
Plenitude E-start charging stations. Hyundai can also install charging stations and photovoltaic plants at their own
dealerships, and adopt Plenitude’s energy efficiency solutions.
The agreements signed in December with Enel X and Be Charge will permit to activate grid interoperability, allowing
access to the widest national charging network of about 20,000 charging points. This synergy is part of Eni’s
broader strategy for the mobility of the future, which includes the evolution of the current service stations, mobility
points at which we plan, among other things, to offer fast and ultra-fast charging for electric mobility.
PLENITUDE
RETAIL GAS & POWER
GAS DEMAND
Eni operates in a liberalized market where energy customers are allowed to choose the gas supplier and, according
to their specific needs, to evaluate the quality of services and offers. Overall Eni supplies 10 million retail clients (gas
and electricity) in Italy and Europe. In particular, clients located all over Italy are 7.8 million.
GAS SALES BY MARKET
ITALY
Resellers
Industries
Small and medium-sized enterprises and services
Residential
INTERNATIONAL SALES
European markets:
France
Greece
Other
RETAIL AND BUSINESS GAS SALES
(bcm)
2021
2020
2019
Change
% Ch.
5.14
0.24
0.30
0.72
3.88
2.71
2.17
0.39
0.15
7.85
5.17
0.23
0.28
0.70
3.96
2.51
2.08
0.34
0.09
7.68
5.49
0.33
0.30
0.87
3.99
3.13
2.69
0.35
0.09
8.62
(0.03)
(0.6)
0.01
0.02
0.02
(0.08)
0.20
0.09
0.05
0.06
0.17
4.3
7.1
2.9
(2.0)
8.0
4.3
14.7
66.7
2.2
RETAIL AND BUSINESS GAS SALES
In 2021, retail and business gas sales in Italy and in the rest of Europe amounted to 7.85 bcm, up by 0.17 bcm
or 2% from the previous year. Sales in Italy amounted to 5.14 bcm were substantially unchanged from 2020,
the reduction reported in the residential segment was mitigated by the higher volumes marketed at small and
medium enterprises and resellers segments.
Sales in the European markets (2.71 bcm) are increasing of 8% or 0.20 bcm compared to 2020. Highest
sales were recorded in France, Greece and Spain benefiting from the lower impact of the COVID-19 from the
comparative period as well as the acquisition of Aldro Energía.
Management report | Consolidated financial statements | Annex
90
RETAIL AND BUSINESS POWER SALES TO END CUSTOMERS
In 2021, retail power sales to end customers amounted to 16.49 TWh, managed by Plenitude and the
subsidiaries in France and Greece and Spain increase by 32% from 2020, due to growth of retail customers
portfolio (up by 4% customers vs. 2020) thanks to the acquisition of Aldro Energía and the development of
activities in Italy and abroad.
RENEWABLES
Eni is engaged in the renewable energy business (solar and wind) aiming at developing, constructing and
managing renewable energy producing plant. Eni’s targets in this field will be reached by leveraging on an
organic development of a diversified and balanced portfolio of assets, integrated with selective asset and
projects acquisitions as well as international strategic partnership.
ENERGY FROM RENEWABLE SOURCES
Energy production from renewable sources
(GWh)
of which: photovoltaic
wind
of which: Italy
outside Italy
of which: own consumption(*)
(*) Electricity for Eni’s production sites consumptions.
2021
2020
2019
Change
% Ch.
986
398
588
400
586
8%
340
223
116
112
227
23%
61
61
53
7
60%
646
175
472
288
359
..
..
..
..
Energy production from renewable sources amounted to 986 GWh (of which 398 GWh photovoltaic and 588
GWh wind) up by 646 GWh compared to 2020. The increase in production compared to the previous year
benefitted from the entry in operations of new capacity, mainly for the contribution of assets already operating
in Italy, France, Spain and United States.
Follows breakdown of the installed capacity by Country and technology:
INSTALLED CAPACITY AT PERIOD END (ENI’S SHARE)
Installed capacity from renewables at period end
(MW)
of which: photovoltaic
wind
installed storage capacity
2021
1,137
48%
51%
1%
2020
2019
Change
802
335
77%
20%
3%
174
76%
20%
4%
% Ch.
239.4
Italy
Outside Italy
Algeria(*)
Australia
France
Pakistan
Tunisia(*)
United States
TOTAL PHOTOVOLTAIC INSTALLED CAPACITY
Italy
Outside Italy
Kazakhstan
Spain
United States
TOTAL WIND INSTALLED CAPACITY
(technology)
fotovoltaic
fotovoltaic
fotovoltaic
fotovoltaic
fotovoltaic
fotovoltaic
fotovoltaic
wind
wind
wind
wind
(MW)
2021
2020
2019
116
436
64
108
10
254
552
350
235
91
129
15
585
112
160
5
64
10
9
72
82
58
5
39
10
4
272
140
63
48
15
63
34
34
34
TOTAL INSTALLED CAPACITY AT PERIOD END (INCLUDING INSTALLED STORAGE POWER)
of which installed storage power
(*) Assets transferred to other segments in the fourth quarter of 2021.
1,137
7
335
8
174
7
Eni Annual Report 2021
91
At the end of 2021, the total installed and sanctioned capacity amounted to 1,137 MW +802 MW from 2020
mainly relating to acquisition in Italy (+315 MW, onshore wind), Spain (+129 MW, onshore wind) e France
(+108 MW, photovoltaic), carried out during the second half of 2021, as well as the acquisition in United
States (+182 MW, photovoltaic), and the completion of three plants in Puglia (+35 MW, onshore wind).
E-MOBILITY
In a context of the mobility market that includes a constant increase in the number of electric vehicles in
circulation in Italy and in Europe, Plenitude, thanks to the acquisition of Be Charge, disposes one of the
largest and most widespread networks of public charging infrastructure for electric vehicles.
As of December 31, 2021, there are more than 6,200 charging points distributed throughout the country.
These stations are smart and user-friendly, monitored 24 hours a day by a help desk and accessible via the
mobile app. Within the sector chain, Be Charge plays both the role of manager and owner of the charging
infrastructure network (CPO - Charge Point Operator), and that of charging and electric mobility service
provider working directly with electric vehicle users (EMSP - Electric Mobility Service Provider). Be Charge
charging stations are Quick (up to 22 kW) alternating current, Fast (up to 150 kW) or HyperCharge (above
150 kW) direct current type.
POWER
AVAILABILITY OF ELECTRICITY
Eni’s power generation sites are located in Brindisi, Ferrera Erbognone, Ravenna, Mantova, Ferrara and
Bolgiano. As of December 31, 2021, installed operational capacity of Enipower’s power plants was 4.5
GW. In 2021, thermoelectric power generation was 22.36 TWh, increase 1.41 TWh from the previous year.
Electricity trading (22.79 TWh) reported an increase of 33% from 2020, thanks to the optimization of inflows
and outflows of power.
POWER SALES IN THE OPEN MARKET
In 2021, power sales in the open market were 28.54 TWh, representing an increase of 13% compared to 2020,
due to higher volumes marketed at Power Exchange.
Purchases of natural gas
Purchases of other fuels
Power generation
Steam
AVAILABILITY OF ELECTRICITY
Power generation
Trading of electricity(a)
Availability
(mmcm)
(ktoe)
(TWh)
(ktonnes)
2021
4,670
93
22.36
7,362
2020
4,346
160
20.95
7,591
2019
Change
% Ch.
4,410
276
21.66
7,646
324
(67)
1.41
(229)
7.5
(41.9)
6.7
(3.0)
(TWh)
2021
22.36
22.79
45.15
2020
20.95
17.09
38.04
21.66
17.83
39.49
2019
Change
% Ch.
1.41
5.70
7.11
3.21
6.7
33.4
18.7
12.7
Power sales in the open market
28.54
25.33
28.28
(a) Includes positive and negative imbalances (difference between the electricity effectively fed-in and as scheduled).
Management report | Consolidated financial statements | Annex 92
Environmental activities
around 2 mln tonnes
total waste managed
around 73% recovered
vs. recoverable waste
around 95% areas
with approved decree
on total contaminated areas
in sites of national priority
present in over 100
sites of regional
and national priority
Eni global contractor
The Group’s environmental activities are developed by Eni Rewind, the Eni’s company that operates
in line with the principles of the circular economy to give new life to land, water and waste resources,
industrial or deriving from reclamation activities, through sustainable reclamation and revaluation
projects, both in Italy and abroad.
Through its integrated end-to-end model, Eni Rewind guarantees the supervision of every phase of the
process reclamation and waste management, planning, from the early stages, the projects of enhancement
and reuse of resources (soils, water, waste), making them available for new development opportunities.
Reclamation activities
Coherently with the expertise gained and in agreement with the institutions and stakeholders, Eni Rewind
identifies the projects for enhancement and reuse of reclaimed areas, allowing the environmental
recovery of former industrial area and the resumption of the local economy. In this context, during
2021, were identified suitable areas for the installation of photovoltaic and wind plants.
In 2021, Eni Rewind, owner of the Ponticelle area in Ravenna, a disused industrial area outside the petrochemical
plant of Ravenna, obtained the certification for the activities of Permanent Safety Measures (MISP), with the
realization of a capping. In addition, was started a redevelopment plan production that includes the application
of innovative, sustainable and recovery technologies, as well as to the urbanization works of the area. In the
area object of MISP is planned the construction of a photovoltaic plant and a biorecovery platform for the
subsequent reuse of land and management of industrial waste. In particular, the latter will be managed by
HEA SpA, a joint venture between Eni Rewind and Herambiente Servizi Industriali established in March 2021.
Eni Annual Report 2021 93
Water reused for industrial
and environmental use
(mln cm)
9.1
5.1
6.1
2019
2020
2021
around 36 mln cm
of treated water
Water & Waste Management
Eni Rewind manages water treatment, aimed at reclamation activities, through an integrated aquifer
interception system and the conveyance of water for purification to treatment plants.
Currently 42 treatment plants are fully in operation and in Italy, with over 36 million cubic meters of treated
water in 2021. Continued the activities of automation and digitalization of groundwater treatment plants and
implementation of the remote control. The activity of recovery and reuse of treated water for the production
of demineralized water is ongoing for industrial use, as part of the operational plans for the remediation of
contaminated sites. In 2021 about 9 million cubic meters of water have been reused after treatment, with an
increase of over 3 million cubic meters compared to 2020.
During 2021, completed the installation of 44 devices using the proprietary technology E-Hyrec® for the
selective removal of hydrocarbons from groundwater, allowing the improvement of the effectiveness and
efficiency of groundwater reclamation, with significant reductions in extraction times and avoiding the disposal
of more than 1,000 tons of waste equivalent.
In addition, are ongoing the activities related to the application of Blue Water technology, aimed at treatment
and the recovery of production water deriving from crude oil extraction activities. It’s underway the preliminary
inquiry for obtaining authorizations from Local Authorities to carry out the first plant on an industrial scale in
the Val d’Agri Oil Center in Viggiano, in the Region of Basilicata.
Eni Rewind also operates as Eni’s competence center for management of waste deriving from Eni’s
environmental remediation activities and production activities in Italy, thanks to its model that, by
adopting the best technological solutions available on the market, allows to minimize costs and
environmental impacts.
Management report | Consolidated financial statements | Annex 94
During 2021, Eni Rewind managed a total of approximately 1.9 million tonnes1 of waste by sending for recovery
or disposal at external plants.
In particular, the recovery index (ratio of recovered/recoverable waste) in 2021 was 73%: the slight
decrease compared to 2020 (78%) is due to the qualitative and particle size characteristics of the
reclamation waste, detected during characterization, which prevented and/or limited its recovery
compared to the previous year, as well as a reduction in availability from external plants, in order to
recovery, in specific regions of Italy.
Relating to waste management in line with the principles of the circular economy, the valorization of
resources and synergy with the territory, continues the company’s commitment to the development of
the Eni’s proprietary ‘Waste to Fuel’ technology that treats the organic fraction of municipal waste to
produce bio-oil and biomethane, as well as recovering the water that constitutes the main component
of the so-called “wet”, for new industrial and irrigation uses.
Certification
In 2021 Eni Rewind obtained SOA Certification, the mandatory certification for participation in
tenders to execute public works contracts with a basic auction amount exceeding €150,000, for its
core activities in the OG 12 Reclamation and protection works and plants environmental and in the
specialized categories OS 22 Drinking water and purification plants and OS 14 – Waste disposal and
recovery plants.
Not-captive initiatives
Starting from 2020, Eni Rewind has expanded the scope of its activities outside the group. In 2021,
continued the activities related to the finalization of contracts with Edison, for the reclamation of
the Mantova site and Altomonte (Cosenza) and with Acciaierie d’Italia, for the design of reclamation
interventions of the former Ilva area in Taranto.
In addition completed the qualification processes as a supplier for important national and international
operators (Arcadis, MOL Group, Edison, Tamoil, TOTAL, Q8, ADNOC).
Started the participation in several tenders with leading national operators, awarding the contract with
ANAS, for survey and characterization services in the Adriatic area (Emilia Romagna, Marche, Abruzzo,
Molise, Puglia), where Eni Rewind will provide chemical analysis service, through its environmental
laboratories.
Signed collaboration agreements with main Italian companies that manage collection and processing
of urban waste and with key players in the supply chain (CONAI). These agreements are aimed at
assessing the opportunity of setting up new waste treatment and recovery plants on reclaimed land or
will become available following the progressive conversion of Eni’s refining and chemical sites.
(1) The volume includes waste deriving from the management of the environmental activities of the points of sale network (about 92 ktonnes),
whose “producer” is the same environmental company in charge of the execution out the work.
Eni Annual Report 2021 95
Eni Rewind outside Italy
Eni Rewind, starting from 2018, has made its expertise available to Eni’s subsidiaries located in foreign
countries for environmental issues, in particular for management and enhancement activities of the
water resource, soil, as well as training and knowledge sharing.
In January 2021, Eni Rewind signed a Memorandum of Understanding (MoU) with the National Authority
for oil and gas of the Kingdom of Bahrain (NOGA) with the target to identify and promote joint initiatives
for the management, recovery and reuse of water and soil resources and waste in the country. In October,
an assessment was carried out at the petrochemical plants and refining of the Kingdom of Bahrain which
has identified three possible areas of activity for Eni Rewind related to groundwater modeling, waste
management and field testing of the proprietary E-Hyrec® technology.
Eni Rewind obtained the qualification as a supplier to Abu Dhabi Oil Company (ADNOC) for the activities of
demolition and reclamation.
Completed the feasibility studies on the optimization of waste water management and process water
through its reuse for plants located in Algeria and Libya and extended the design services to foreign
subsidiaries for environmental activities and decommissioning of the operative and disposed points sales.
Management report | Consolidated financial statements | Annex
96
Financial review
Possible evolution in respect of the war in Ukraine
The crisis in the relationship between Russia and Ukraine that
in February 2022 gave rise to the Russian military invasion and
an open conflict on a large scale with violent armed clashes and
tragic loss of human lives, constitutes a macroeconomic risk.
Possible outcomes of this situation might include a prolonged
armed conflict, a possible escalation in the military action, risks
of expansion of the ongoing geopolitical crisis and a further
tightening up of the economic sanctions against Russia.
These factors could result in a scenario that could eventually
sap consumers’ confidence, deter investment decisions by
operators and cripple industrial activities derailing the global
recovery or, in the worst of the outcomes, triggering a new
worldwide recession. This scenario would drive a reduction in
hydrocarbons demands and of commodity prices and would
adversely and significantly affect our results of operations and
cash flow, as well as business prospects, with a possible lower
remuneration of our shareholders.
Shortly after the outbreak of hostilities with the Russian invasion
of Ukraine, the European Union, the USA, and the UK imposed a
raft of stringent economic and financial sanctions against Russia,
which have been added to those already in force since 2014.
The new restrictions have mainly targeted the Russian
financial sector, precluding access to funding from US and
EU-based financial institutions and several relevant Russian
entities operating in the Oil & Gas sector. Currently, the new
sanctions continue to permit the purchase of oil, natural gas
and refined products exported by Russian entities, or the
maintenance of business relationships with certain Russian
entities; however, as long as the conflict continues, it is
possible that increasingly tight sanctions could be imposed.
Furthermore, the situation in the marketplace has evolved
concurrently, as many Western traders, oil companies, refiners
and brokers have begun reducing purchases of crude oil from
Russia giving rise to a sort of a private market sanctioning
system. Finally, the President of the USA signed an executive
order to ban all imports of Russian energy products. Those
developments have destabilized energy markets as evidenced
by the material discount of the Ural Russian crude benchmark,
triggering a spike in market volatility and propelling the Brent
price at about 130 $/bbl in the last days of February and
into early March 2022. Natural gas prices for the continental
Europe spot benchmark surged to new all-time highs driven by
fears of supply disruptions (approximately €200 Mwh).
This volatility could increase counterparty and margining risks
(see the section “Risk factors and uncertainties”).
Eni’s current presence in Russia is insignificant. Exploration
projects in the Russian upstream are in a shut-down phase,
also due to certain sanctions already in force before the recent
crisis, and the related costs have been entirely impaired in
previous reporting periods. Eni holds a stake in the Blue Stream
pipeline that transports russian-sourced gas across the Black
Sea, jointly marketed by Eni and Gazprom to Turkey’s state-
owned company Botas. It represents a non-significant value
in Eni’s balance sheet. Management is considering different
options for a possible sale of this stake.
The most significant transactions between Eni and its Russian
counterparts concern the purchase of natural gas from the
Russian state company Gazprom on the basis of the long-term
take-or-pay contracts (in 2021 about 22 billion cubic meters
for the Italian market). Eni’s gas portfolio availability from
other geographies, access to transport capacities, contracts
flexibility and presence in the LNG segment (in particular
through the Damietta plant) as well as long-term relations with
producing countries (primarily Algeria and Libya) are all options
that the Company can activate in the event of unpredictable
scenarios of sanctions by the international community against
Russian Oil & Gas.
As far as crude oil supplies are concerned, although Eni’s
refining system has always processed Ural crudes, plants
flexibility and trading skills in the supply eventually allow us to
replace this crude oil in our processes.
Furthermore, in certain upstream projects in different countries
in the world the counterparties are Russian.
Any decision on such presence is on behalf of the State
Companies of the Countries where these initiatives are located.
Eni has taken the necessary measures to ensure that its
activities are carried out in accordance with the applicable
rules, ensuring continuous monitoring of the evolution of the
sanctioning framework, to adapt its activities on an ongoing
basis to the restrictions applicable from time to time.
Eni Annual Report 2021 97
Impacts of the COVID-19 pandemic
The macroeconomic environment has gradually improved
during 2021 due to the effective vaccination campaigns
against the COVID-19 disease, together with measures to
contain the spread of the virus, particularly in OECD Countries,
allowing for a phased reopening of the economic activities
and increasing mobility of people. The expansionary monetary
policies adopted by the central banks and the large scale
fiscal stimulus launched by the governments supported
consumptions and investments. In this context, the demand
for hydrocarbons and the prices of commodities, main driver
of the Group’s financial results, recorded a significant rebound.
Global energy demand first stabilized and then unexpectedly
increased in the last quarter of the year, driven by an acceleration
in the pace of the economic recovery, resulting in an increase in
the average price of oil for the year by 70% vs. 2020 at about 71
$/barrel, while natural gas prices recorded material increases
(in the order of several hundreds percentage points) due to a
particularly tight market. These trends were the basis of the
strong recovery in profitability in the Exploration & Production
and Global Gas & LNG Portfolio segments, and to a lesser
extent a solid performance of the chemical business line,
driven by a recovery in demand for commodities.
The Refining & Marketing business has continued to be
weighted down by the effects of the pandemic, due to
to significantly
weak demands for jet fuel that penalized the profitability
of traditional refineries by creating an oversupply of gasoil
leading
lower products spreads. The
profitability was also affected by the higher costs of gas-
indexed energy and plant utilities and the higher costs for
the purchase of emission allowances to comply with the
environmental obligations of the European ETS, which more
than doubled due to a recovery in industrial activities and as
consumption of coal increased signficantly due to its cost-
competitiveness against natural gas to fire power generation
and to produce steam.
Overall, 2021 saw a significant rebound in consolidated
results which closed with a profit of €5.82 billion compared
to a loss of €8.64 billion in 2020 and an operating cash flow
of €12.86 billion, which increased by approximately €8 billion
compared to 2020.
Looking to the future, the main risks for the Group’s financial
performance are linked to the possibility of the spread of
new vaccine-resistant variants of the virus, as well as the
resumption of inflation driven by the spill-over effects through
the supply chains of increased raw material costs as the
ultimate, unintended effect of accommodative monetary
policies and big tax measures adopted to help the economy
recover from the fallout of the pandemic.
Net impairment reversals (losses) of tangible and intangible
and right-of-use assets
Write-off of tangible and intangible assets
(167)
(387)
PROFIT AND LOSS ACCOUNT
Sales from operations
Other income and revenues
Operating expenses
Other operating income (expense)
Depreciation, depletion, amortization
Operating profit (loss)
Finance income (expense)
Income (expense) from investments
Profit (loss) before income taxes
Income taxes
Tax rate (%)
Net profit (loss)
attributable to:
- Eni's shareholders
- Non-controlling interest
(€ million)
2021
2020
2019
Change
% Ch.
76,575
43,987
69,881
32,588
1,196
960
1,160
236
74.1
24.6
(58,716)
(36,640)
(54,302)
(22,076)
(60.3)
903
(766)
287
(7,063)
(7,304)
(8,106)
(3,183)
(2,188)
12,341
(3,275)
(329)
(1,045)
(1,658)
(5,978)
..
(788)
(868)
10,685
(4,845)
45.3
5,840
(8,628)
(300)
6,432
(879)
193
5,746
97.3
155
(2,650)
(5,591)
1,669
241
3,016
(58)
15,616
257
790
16,663
(2,195)
14,468
5,821
(8,635)
148
14,456
19
7
7
12
..
3.3
94.8
(17.6)
..
24.6
47.6
..
(82.8)
..
..
..
Management report | Consolidated financial statements | Annex
98
Eni’s 2021 results were markedly influenced by the recovery in the
energy commodity price scenario. In 2021 the average reference
price of the Brent marker was 71 $/bbl, +70% compared to
2020. The European gas market was characterized by extreme
conditions due to the tight supply and uncertainties on supplies
from Russia: spot price at the continental hub “TTF” reached an
average of 46 €/MWh, increasing by more than 300%; aligned
values for the Italian spot price “PSV”.
Similar conditions were recorded in the wholesale electricity
market with the Italian “PUN” price at an average 125 €/MWh, +86%
compared to 2020, peaking at 440 €/MWh in the fourth quarter
of the year. Eni’s refining margin (Standard Eni Refining Margin)
continued to fell during the last year with the average of the period
falling to a negative -0.9 $/bbl (a positive 1.7 $/bbl in 2020).
The weak trend recorded during the year reached a further
bearish acceleration in the last quarter of the year, particularly
in the last month, due to the exceptional gas prices affecting
both the cost of processing and refinery utilities, in addition to
the pre-existing factors of recovery in the cost of the oil charge
supported by OPEC + production management and weakness
of some outlet markets depressing spreads of the products,
in particular jet fuel and diesel, due to oversupply. In addition,
recorded increased cost of emission allowances to comply
with the European ETS.
2021 cracker margin, reference marker for the chemical business,
declined by 11%; elastomers, styrenic and polyethylene spreads
were steady.
Average price of Brent dated crude oil in U.S. dollars(a)
Average EUR/USD exchange rate(b)
Average price of Brent dated crude oil in euro
Standard Eni Refining Margin (SERM)(c)
PSV(d)
TTF(d)
2021
70.73
1.183
59.80
(0.9)
487
486
2020
41.67
1.142
36.49
1.7
112
100
2019
64.30
1.119
57.44
4.3
171
142
% Ch.
69.7
3.6
63.9
(152.9)
334.8
386.0
(a) Price per barrel. Source: Platt’s Oilgram.
(b) Source: ECB.
(c) In $/BBL FOB Mediterranean Brent dated crude oil. Source: Eni calculations. Approximates the margin of Eni’s refining system in consideration of material balances and refineries’ product yields.
(d) €/kcm.
Adjusted results and breakdown of special items
Net profit attributable to Eni’s shareholders was €5,821
million in 2021 compared to a loss of €8,635 million in the
previous year. Financial discipline and cost reduction initiatives
implemented to withstand the enduring impact of COVID-19
enabled Eni to capture the full upside of 2021’s strong
economic recovery, allowing Eni to report excellent results
in a more favourable environment and in an energy scenario
with better fundamentals. Net profit recovered to pre-COVID
level, benefitting from the significant growth in operating profit
to €12,341 million compared to the operating loss of €3,275
million in 2020, affected by lockdown measures to contain the
spread of the COVID-19 pandemic. Finally, net income was
positively impacted by a tax rate returned to values in line with
the Group’s historical averages.
The following tables report the breakdown of the operating profit
by business:
Exploration & Production
Global Gas & LNG Portfolio
Refining & Marketing and Chemicals
Plenitude & Power
Corporate and other activities
Impact of unrealized intragroup profit elimination
Operating profit (loss)
(€ million)
2021
10,066
899
45
2,355
(816)
(208)
2020
(610)
(332)
(2,463)
660
(563)
33
2019
Change
% Ch.
7,417
10,676
431
(682)
74
(688)
(120)
1,231
2,508
1.695
(253)
(241)
..
..
..
..
(44.9)
12,341
(3,275)
6,432
15,616
..
Eni Annual Report 2021
99
Management determines adjusted
results excluding
extraordinary gains/charges or special items, in order to
improve understanding of the key businesses.
ADJUSTED RESULTS AND BREAKDOWN OF SPECIAL ITEM
(€ million)
2021
2020
2019
Change
% Ch.
Operating profit (loss)
Exclusion of inventory holding (gains) losses
Exclusion of special items
Adjusted operating profit (loss)
Breakdown by business segments:
Exploration & Production
Global Gas & LNG Portfolio
Refining & Marketing and Chemicals
Plenitude & Power
Corporate and other activities
Impact of unrealized intragroup profit elimination and other consolidation adjustments
Net profit (loss) attributable to Eni's shareholders
Exclusion of inventory holding (gains) losses
Exclusion of special items
Adjusted net profit (loss) attributable to Eni's shareholders
12,341
(1,491)
(1,186)
9,664
(3,275)
1,318
3,855
1,898
6,432
(223)
2,388
8,597
15,616
..
7,766
409.2
9,293
1,547
8,640
7,746
580
152
476
(593)
(244)
326
6
465
(507)
61
193
21
370
(602)
(25)
254
146
11
(86)
(305)
5,821
(8,635)
148
14,456
(1,060)
(431)
4,330
937
6,940
(758)
(157)
2,885
2,876
5,088
..
77.9
..
2.4
(17.0)
..
..
turned
In 2021, the adjusted operating profit was €9,664 million, a
recovery of significant proportions equal to an increase of
€7.8 billion or over 400% from 2020. This performance was
driven by the financial discipline and cost reduction initiatives
implemented to withstand the enduring impact of COVID-19
and enabled Eni to capture the recovery in energy scenario due
to a strong recovery in commodity prices driven by completely
different market conditions, which
to balanced/
undersupplied compared to oversupplied markets a year ago
impacted by the pandemic COVID-19, due to the reopening of
the economies and a strong macroeconomic cycle which drove
hydrocarbons demands and significant drawdowns at global oil
and products inventories. Commodities supply was impacted by
capex plan reduction of oil companies in response to the crisis
of the COVID-19.
These trends resulted in robust price increases for all energy
commodities (in the full year 2021, Brent price was 70.73 $/
bbl on average up 70%; the Italian reference spot price “PSV” of
natural gas was up 487 €/kcm, or 335%).
For a detailed disclosure of business performance, see “Results
by business segments”.
In 2021 Eni Group reported an adjusted net profit of €4,330
million driven by a better operating performance and a lower tax
rate (50% in 2021 compared to 175% in 2020).
Breakdown of special items
Net profit includes special items consisting of net gains of
€431 million, relating to the following:
i)
the accounting effect of certain fair-valued commodity
derivatives lacking the formal criteria to be classified as
ii)
iii)
iv)
v)
vi)
hedges, as well as the fair value of forward contracts to
sell volumes of gas which were not accounted based on
the own use exemption (gains of €2,139 million);
reversals of previously recognized impairment losses
for €1,244 million relating to gas fields in Italy and
fields in Congo, Libya, the USA and Algeria, driven by an
improved hydrocarbon pricing environment;
impairment losses at refineries (approximately €900
million) relating to the book value of operated plants
and managed through JV in Italy and in Europe, driven
by expected decreasing cash flows reflecting lowered
outlook for refining margins and the forecast of higher
expenses for emission allowances, as well as the write-
down of capital expenditure relating to certain Cash
Generating Units in the R&M business. These units were
impaired in previous reporting periods and continued to
lack any profitability prospects (for an overall impact of
approximately €300 million);
the impairment of exploration projects (€247 million)
due to the refocusing of the portfolio with the exiting
from marginal areas;
the impairment of Chemical assets due to a deteriorated
margin scenario (€163 million);
the difference between the value of gas inventories
accounted for under the weighted-average cost method
provided by IFRS and management’s own measure of
inventories, which moves forward at the time of inventory
drawdown the margins captured on volumes in inventories
above their normal levels leveraging the seasonal spread in
gas prices net of the effects of the associated commodity
derivatives (gains of €352 million);
Management report | Consolidated financial statements | Annex
100
vii) environmental provisions (€271 million) mainly in the
R&M and Chemical segment;
viii) provisions for redundancy incentives (€193 million);
ix)
x)
risk provisions (€142 million);
an allowance for doubtful accounts relating to receivables
net of finance expense (€109 million) in the E&P segment;
charges of €405 million relating to the JV Vår Energi,
mainly driven by impairment losses recorded at Oil & Gas
assets due to delays in the start-up of certain projects
and increasing opex as well as accrued currency
translation differences at finance debt denominated in
xi)
a currency other than the reporting currency for which
the reimbursement cash outflows are expected to be
matched by highly probable cash inflows from the sale
of production volumes, in the same currency as the
finance debt as part of a natural hedge relationship;
the alignment of raw material and products inventories
to their net realizable values at period end, impairments
and extraordinary charges at ADNOC Refining, for a
total charges of €244 million;
xii)
xiii) Eni’s share of non current charges/impairments relating
to Saipem.
BREAKDOWN OF SPECIAL ITEMS
Special items of operating profit (loss)
- environmental charges
- impairment losses (impairments reversal), net
- impairment of exploration projects
- net gains on disposal of assets
- risk provisions
- provision for redundancy incentives
- commodity derivatives
- exchange rate differences and derivatives
- other
Net finance (income) expense
of which:
- exchange rate differences and derivatives reclassified to operating profit (loss)
Net (income) expense from investments
of which:
- gains on disposal of assets
- impairments / revaluation of equity investments
Income taxes
Total special items of net profit (loss)
The breakdown by segment of the adjusted net profit is provided in the table below:
(€ million)
2021
(1,186)
271
167
247
(100)
142
193
(2,139)
183
(150)
(115)
2020
3,855
(25)
3,183
(9)
149
123
440
(160)
154
152
(183)
851
160
1,655
851
19
(431)
1,207
1,278
6,940
2019
2,388
338
2,188
(151)
3
45
(439)
108
296
(42)
(108)
188
(46)
148
351
2,885
2020
2019
Change
% Ch.
Exploration & Production
Global Gas & LNG Portfolio
Refining & Marketing and Chemicals
Plenitude & Power
Corporate and other activities
Impact of unrealized intragroup profit elimination and other consolidation adjustments(a)
Adjusted net profit (loss)
attributable to:
- Eni's shareholders
- Non-controlling interest
(€ million)
2021
5,543
169
62
327
124
211
(246)
329
(1,576)
(1,205)
(176)
4,349
36
(751)
3,436
5,419
100
(42)
275
(866)
(20)
2,883
(42)
308
(2)
(371)
(212)
5,100
4,330
(758)
2,876
5,088
19
7
7
12
..
(19.9)
..
(0.6)
(30.8)
..
..
..
(a) This item concerned mainly intragroup sales of commodities, services and capital goods recorded in the assets of the purchasing business segment as of end of the period.
Eni Annual Report 2021
PROFIT AND LOSS ANALYSIS
REVENUES
Exploration & Production
Global Gas & LNG Portfolio
Refining & Marketing and Chemicals
- Refining & Marketing
- Chemicals
- Consolidation adjustments
Plenitude & Power
- Plenitude
- Power
- Consolidation adjustments
Corporate and other activities
Consolidation adjustments
Sales from operations
Other income and revenues
Total revenues
101
% Ch.
60.0
195.6
59.3
58.9
65.0
48.4
23.8
..
8.9
74.1
24.6
73.0
(€ million)
2021
2020
2019
Change
21,742
20,843
40,374
36,501
5,590
(1,717)
11,187
7,452
3,996
(261)
1,698
13,590
7,051
25,340
22,965
3,387
23,572
11,779
42,360
39,836
4,123
(1,012)
(1,599)
7,536
6,020
1,894
(378)
1,559
8,448
6,424
2,476
(452)
1,676
(19,269)
(11,089)
(17,954)
76,575
43,987
69,881
1,196
960
1,160
8,152
13,792
15,034
13,536
2,203
3,651
1,432
2,102
139
(8,180)
32,588
236
77,771
44,947
71,041
32,824
Total revenues amounted to €77,771 million, reporting an
increase of 73% from 2020.
The acceleration of the global recovery, driven by the re-
opening of the world’s economies, spurred a pent-up demand
for all kinds of energy commodities across all geographies,
determining the boost in all commodity prices.
Sales from operations in the full year of 2021 (€76,575 million)
increased by €32,588 million or up by 74.1% from 2020, with
the following breakdown:
} revenues generated by the Exploration & Production
segment (€21,742 million) increased by 60% due to a better
price scenario, reflected on hydrocarbon realizations (up by
78% on average from 2020);
} revenues generated by the Global Gas & LNG Portfolio
segment (€20,843 million) increased by €13,792 million or
up by 196%, reflecting higher spot prices for natural gas,
significantly improved in the fourth quarter of 2021, due to
short supply and uncertainty on flows of supplied gas as
well as higher volumes marketed, in particular of LNG;
} revenues generated by the Refining & Marketing and
Chemicals segment (€40,374 million) increased by €15,034
million (up by approximately 60%) due to higher prices of
refined products (fuel up by 76% and gasoil up by 60%) and
plastics commodities, reflecting the economic recovery;
} revenues generated by the Plenitude & Power segment
(€11,187 million) increased by €3,651 million or up by 48%,
due to increased commodity prices following the economic
recovery, the acquisition of Aldro Energía and the positive
performance of the extracommodity business and the
increase in the number of customers.
OPERATING EXPENSES
Purchases, services and other
Impairment losses (impairment reversals) of trade and other receivables, net
Payroll and related costs
of which: provision for redundancy incentives and other
(€ million)
2021
2020
2019
Change
% Ch.
55,549
33,551
50,874
21,998
279
2,888
193
226
2,863
123
432
2,996
45
53
25
65.6
23.5
0.9
58,716
36,640
54,302
22,076
60.3
Management report | Consolidated financial statements | Annex
102
Operating expenses for 2021 (€58,716 million) increased by
€22,076 million from 2020, up by 60%. Purchases, services
and other (€55,549 million) were up by 66% vs. 2020,
mainly reflecting higher costs for hydrocarbon supplies
(gas under long-term supply contracts and refinery and
chemical feedstocks). Payroll and related costs (€2,888
million) were almost unchanged from 2020 (up by €25
million, or by 0.9%), mainly due to the appreciation of the
euro against the USD, partly offset by higher provision for
redundancy incentives.
DEPRECIATION, DEPLETION, AMORTIZATION, IMPAIRMENTS (REVERSALS) AND WRITE-OFF
Exploration & Production
Global Gas & LNG Portfolio
Refining & Marketing and Chemicals
- Refining & Marketing
- Chemicals
Plenitude & Power
- Plenitude
- Power
Corporate and other activities
Impact of unrealized intragroup profit elimination
Total depreciation, depletion and amortization
Impairment losses (impairment reversals) of tangible
and intangible and right of use assets, net
Depreciation, depletion, amortization, impairments and reversals, net
Write-off of tangible and intangible assets
(€ million)
2021
5,976
2020
6,273
2019
Change
% Ch.
7,060
(297)
174
512
417
95
286
241
45
148
(33)
125
575
488
87
217
172
45
146
(32)
124
620
530
90
190
135
55
144
(32)
49
(63)
(71)
8
69
69
2
(1)
(4.7)
39.2
(11.0)
(14.5)
9.2
31.8
40.1
1.4
7,063
7,304
8,106
(241)
(3.3)
167
3,183
2,188
(3,016)
(94.8)
7,230
10,487
10,294
(3,257)
(31.1)
387
329
300
58
17.6
7,617
10,816
10,594
(3,199)
(29.6)
Depreciation, depletion and amortization (€7,063 million)
decreased by 3.3% or €241 million from 2020, in particular in
the Exploration & Production segment mainly due to the lower
book value of Oil & Gas assets as consequence of impairments
recorded in 2020, lower production volumes as well as the
appreciation of the euro vs. the USD, partially offset by start-up
and ramp-up of new projects.
Net impairment losses (impairment reversals) of tangible and
intangible and right of use assets amounted to €167 million and
the disclosure is provided under the paragraph “special items”.
The breakdown by segment is provided below:
Exploration & Production
Global Gas & LNG Portfolio
Refining & Marketing and Chemicals
Plenitude & Power
Corporate and other activities
Impairment losses (impairment reversals) of tangible
and intangible and right of use assets, net
(€ million)
2021
(1,244)
26
1,342
20
23
2020
1,888
2
1,271
1
21
2019
Change
1,217
(3,132)
(5)
922
42
12
24
71
19
2
167
3,183
2,188
(3,016)
Write-off charges amounted to €387 million and mainly
related to the E&P segment. In 2021, exploration and
appraisal activities comprised write-offs of unsuccessful
exploration wells costs for €331 million mainly in Gabon,
Montenegro, Myanmar, Bahrain, Egypt and Angola.
Write-offs of €35 million related to exploration licenses due
mainly to the exiting from marginal areas due to geopolitical
or environmental issues.
Eni Annual Report 2021
(€ million)
FINANCE INCOME (EXPENSE)
Finance income (expense) related to net borrowings
- Interest expense on corporate bonds
- Net income from financial activities held for trading
- Interest expense for banks and other financing institutions
- Interest expense for lease liabilities
- Interest from banks
- Interest and other income from receivables and securities for non-financing operating activities
Income (expense) on derivative financial instruments
- Derivatives on exchange rate
- Derivatives on interest rate
Exchange differences, net
Other finance income (expense)
- Interest and other income from receivables and securities for financing operating activities
- Finance expense due to the passage of time (accretion discount)
- Other finance income (expense)
Finance expense capitalized
103
2019
Change
(962)
(618)
127
(122)
(378)
21
8
(14)
9
(23)
250
(246)
112
(255)
(103)
(972)
93
(879)
64
42
(20)
8
43
(6)
(3)
(657)
(713)
56
936
(81)
(30)
46
(97)
262
(5)
257
2021
(849)
(475)
11
(94)
(304)
4
9
(306)
(322)
16
476
(177)
67
(144)
(100)
(856)
68
2020
(913)
(517)
31
(102)
(347)
10
12
351
391
(40)
(460)
(96)
97
(190)
(3)
(1,118)
73
(788)
(1,045)
Net finance expenses were €788 million, a decrease of €257
million from 2020. The main drivers were: (i) recognition
of income on exchange rate (+€936 million) offset by the
negative change of fair-valued currency derivatives (down by
€713 million) lacking the formal criteria to be designated as
hedges under IFRS 9; (ii) decrease of interest expense (+€42
million) reflecting a reduction cost of finance debt due to a
lower benchmark interest rates, as well as the positive change
in the fair value of interest rate derivatives (+€56 million)
lacking the formal criteria to be designed as hedges; (iii)
lower interest expenses for lease liabilities due to exchange
rate effects (+€43 million). Other finance expense increased
by €97 million mainly due to a discounted receivable in the
E&P segment.
NET INCOME FROM INVESTMENTS
2021
Share of gains (losses) from equity-accounted investments
Dividends
Net gains (losses) on disposals
Other income (expense), net
(€ million)
Exploration
& Production
Global
Gas & LNG
Portfolio
Refining
& Marketing
and
Chemicals
8
171
1
180
(333)
59
3
(271)
(5)
(5)
Plenitude
& Power
Corporate and
other activities
Group
(766)
(1,091)
(3)
(3)
(3)
(769)
230
1
(8)
(868)
Net expense from investments amounted to €868 million
related to:
} a loss of €1,091 million due to the share of losses at equity-
accounted entities, mainly: (i) ADNOC Refining, due to the
accounting of extraordinary charges; and (ii) Eni’s interest
of the JV Saipem losses;
} dividends of €230 million paid by minor investments in
certain entities which were designated at fair value through
OCI under IFRS 9 except for dividends which are recorded
through profit. These entities mainly comprised Nigeria
LNG (€144 million) and Saudi European Petrochemical Co.
(€54 million).
Management report | Consolidated financial statements | Annex
104
The table below sets forth a breakdown of net income/loss from investments:
Share of gains (losses) from equity-accounted investments
Dividends
Net gains (losses) on disposals
Other income (expense), net
Income (expense) from investments
(€ million)
2021
2020
2019
Change
(1,091)
(1,733)
230
1
(8)
150
(75)
(868)
(1,658)
(88)
247
19
15
193
642
80
1
67
790
INCOME TAXES
In 2021, income taxes amounted to €4,845 million, an increase
of €2,195 million, with a profit before income taxes of €10,685
million (a loss before income taxes of €5,978 million in 2020).
In 2021, the Group’s tax rate was 45% (compared to
disproportionate value in 2020). The main driver of this
trend was the normalization of the E&P tax rate, which was
driven by a better geographical mix of profits on the back of
a strengthened scenario, which lowered the relative weight of
jurisdictions characterized by higher tax rates, as well as the
fact that the 2020 reporting period was affected by a number
of tax dis-optimizations resulting in a particularly high tax rate.
Adjusted tax rate was 50% due to the same drivers disclosed in
the reported tax rate disclosure.
Results by business segments1
EXPLORATION & PRODUCTION
Operating profit (loss)
Exclusion of special items:
- environmental charges
- impairment losses (impairment reversals), net
- impairment of exploration projects
- net gains on disposal of assets
- provision for redundancy incentives
- risk provisions
- exchange rate differences and derivatives
- other
Adjusted operating profit (loss)
Net finance (expense) income(a)
Net income (expense) from investments(a)
of which: Vår Energi
Income taxes(a)
Adjusted net profit (loss)
Results also include:
Exploration expenses:
‐ prospecting, geological and geophysical expenses
‐ write‐off of unsuccessful wells(b)
Average realizations
Liquids(c)
Natural gas
Hydrocarbons
2019
Change
% Ch.
10,676
..
(€ million)
2021
10,066
(773)
60
(1,244)
247
(77)
60
113
(3)
71
9,293
(313)
681
425
2020
(610)
2,157
19
1,888
1
34
114
13
88
1,547
(316)
262
193
7,417
1,223
32
1,217
(145)
23
(18)
14
100
8,640
(362)
312
122
7,746
3
419
(4,118)
(1,369)
(5,154)
(2,749)
5,543
124
3,436
5,419
558
194
364
66.62
6.64
51.49
510
196
314
37.06
3.76
28.92
489
275
214
59.26
4.94
43.54
48
(2)
50
29.56
2.88
22.57
($/bbl)
($/kcf)
($/boe)
..
..
9.4
(1.0)
15.9
79.8
76.6
78.0
(a) Excluding special items.
(b) Also includes write‐off of unproved exploration rights, if any, related to projects with negative outcome.
(c) Includes condensates.
(1) Other alternative performance indicators disclosed are accompanied by explanatory notes and tables in line with guidance provided by ESMA guidelines on alternative
performance measures (ESMA/2015/1415), published on October 5, 2015. For further information, see the section “Alternative performance measures” of this Annual
Report at subsequent pages.
Eni Annual Report 2021
105
In 2021, Exploration & Production reported an adjusted
operating profit of €9,293 million, up by €7,746 million y-o-y,
or 500% from 2020 which was affected by the pandemic.
This recovery was driven by an ongoing recovery in the oil
scenario. Against this backdrop, Eni’s realized prices of
liquids increased by 80%, whereas natural gas realized prices
increased by 77% compared to 2020.
These effects were partly offset by lower production volumes.
Adjusted operating profit excluded special gains of €773
million.
Adjusted net profit of €5,543 million reported a substantial
increase compared to net profit of €124 million of 2020,
benefitting from a reduction in the tax rate due to recovery in
the upstream scenario and a more favorable geographic mix
of profits (in terms of a reducing share of taxable income in
Countries with a higher tax rate), as well as to the fact that the
2020 reporting period was affected by a number of drivers
leading to tax dis-optimizations.
In 2021, Eni’s gas realizations for the full year increased on
average by 77% in dollar terms, driven by a recovery in trading
environment. Those were reduced on average by 0.1 $/kcf due
to the impact of hedges activated in the final months of 2021
on the sale of about 12 bcf. These transactions were part of
an hedging program relating to the sale of 157 bcf out of the
Company’s natural gas proved reserves in the period December
2021 to December 2022.
The following table reports the impact of cash flow hedge
derivatives as described above:
Natural gas
Sale volumes
Sale volumes hedged by derivatives (cash flow hedge)
Total price excluding derivatives
Realized gains (losses) on derivatives
Total average price
GLOBAL GAS & LNG PORTFOLIO
Operating profit (loss)
Exclusion of special items:
- impairment losses (impairment reversals), net
- provision for redundancy incentives
- commodity derivatives
- exchange rate differences and derivatives
- other
Adjusted operating profit (loss)
Net finance (expense) income(a)
Net income (expense) from investments(a)
Income taxes(a)
Adjusted net profit (loss)
(a) Excluding special items.
(billion cubic feet)
($/kcf)
2021
1,446
12
6.71
(0.07)
6.64
(€ million)
2021
899
(319)
26
5
(207)
206
(349)
580
(17)
(394)
169
2020
(332)
658
2
2
858
(183)
(21)
326
(15)
(100)
211
2019
Change
% Ch.
431
(238)
(5)
1
(576)
109
233
193
3
(21)
(75)
100
1,231
..
254
(17)
15
(294)
(42)
77.9
(19.9)
In 2021, the Global Gas & LNG Portfolio segment reported an
adjusted operating profit of €580 million, a robust growth
compared to 2020 (up by €254 million, or 78%). The positive
performance leveraged on the continuous initiatives of portfolio
optimization and renegotiations as well as higher gas volumes
sold. These positives were partially offset by higher provisions
due to an increased nominal value of trade receivables, and
a higher counterparty risks due to the financial difficulties of
industrial accounts pressured by rising energy costs, as well as
provisions for contractual claims.
Adjusted operating profit excluded special gains of €319
million.
Adjusted net profit was €169 million (net profit of €211
million in 2020).
Management report | Consolidated financial statements | Annex
106
REFINING & MARKETING AND CHEMICALS
Operating profit (loss)
Exclusion of inventory holding (gains) losses
Exclusion of special items:
- environmental charges
- impairment losses (impairment reversals), net
- net gains on disposal of assets
- risk provisions
- provision for redundancy incentives
- commodity derivatives
- exchange rate differences and derivatives
- other
Adjusted operating profit (loss)
- Refining & Marketing
- Chemicals
Net finance (expense) income(a)
Net income (expense) from investments(a)
of which: ADNOC Refining
Income taxes(a)
Adjusted net profit (loss)
(a) Excluding special items.
(€ million)
2021
2020
2019
Change
% Ch.
45
(2,463)
(1,455)
1,562
150
1,342
(22)
(4)
42
50
(14)
18
152
(46)
198
(32)
(4)
(76)
(54)
62
2,508
..
(682)
(318)
1,021
244
922
(5)
(2)
8
1,290
1,179
85
1,271
(8)
5
27
(185)
(118)
10
(26)
6
235
(229)
(7)
(161)
(167)
(84)
(246)
(5)
(23)
21
289
(268)
(36)
37
23
(64)
(42)
146
(281)
427
(25)
157
30
308
..
..
..
..
The Refining & Marketing business reported an adjusted
operating loss of €46 million, compared to an operating profit
of €235 million in 2020, due to the sharply decline of refining
margins, the worst of the last ten years and higher expenses
for the purchase of emission allowances. These negatives
were partly offset by plant optimizations and higher volumes
sold by the marketing business benefitting from the recovery
in products demand, the reopening of the economy and
increased people mobility.
that supported demands and margins of plastic commodities
softening competitive pressure, higher plant availability as well
as certain contingent issues reducing imports from non-EU
countries leading product shortages in the area, enabling the
business to capture market opportunities.
Adjusted operating profit of the R&M and Chemicals
segment of €152 million, excluded special items of €1,562
million and inventory holding gains of €1,455 million.
In 2021, the Chemical business reported an adjusted operating
profit of €198 million, a sharp improvement compared with a
loss of €229 million in 2020, due to a global economic recovery
On a net basis, the positive result of €62 million reported in
2021, compared to a loss of €246 million in 2020, due to the
better performance of the Chemical business.
PLENITUDE & POWER
Operating profit (loss)
Exclusion of special items:
- environmental charges
- impairment losses (impairment reversals), net
- net gains on disposal of assets
- risk provisions
- provision for redundancy incentives
- commodity derivatives
- exchange rate differences and derivatives
- other
Adjusted operating profit (loss)
- Plenitude
- Power
Net finance (expense) income(a)
Net income (expense) from investments(a)
Income taxes(a)
Adjusted net profit (loss)
(a) Excluding special items.
(€ million)
2021
2,355
(1,879)
20
(2)
(5)
2020
660
(195)
1
1
10
20
(1,982)
(233)
(6)
96
476
363
113
(2)
(3)
(144)
327
6
465
304
161
(1)
6
(141)
329
2019
Change
% Ch.
74
296
42
3
255
(10)
6
370
256
114
(1)
10
(104)
275
1,695
..
11
59
(48)
(1)
(9)
(3)
(2)
2.4
19.4
(29.8)
(0.6)
Eni Annual Report 2021
107
In 2021, Plenitude reported solid and growing performances
with an adjusted operating profit of €363 million, an increase of
€59 million (up by 19% compared to 2020), leveraging on gains
in the extra-commodity business, as well as benefits from the
integration of the distributed photovoltaic business (Evolvere),
marketing initiatives in Italy, the growth in customer base
following expansion in Greece, the acquisition of Aldro Energía
in Spain, and lower than expected credit losses, following an
improved economic cycle.
The Power business reported an adjusted operating profit of
€113 million (down by €48 million vs. 2020, or 30%), mainly due
to lower one-off items.
The Plenitude & Power segment reported an adjusted
operating profit of €476 million, which includes a negative
adjustment for special item of €1,879 million.
The Plenitude & Power segment reported an adjusted net
profit of €327 million, substantially unchanged from the 2020
result (adjusted net profit of €329 million).
CORPORATE AND OTHER ACTIVITIES
Operating profit (loss)
Exclusion of special items:
- environmental charges
- impairment losses (impairment reversals), net
- net gains on disposal of assets
- risk provisions
- provision for redundancy incentives
- other
Adjusted operating profit (loss)
Net finance (expense) income(a)
Net income (expense) from investments(a)
Income taxes(a)
Adjusted net profit (loss)
(a) Excluding special items.
2019
Change
(688)
(253)
% Ch.
(44.9)
(€ million)
2021
(816)
223
61
23
1
33
91
14
(593)
(539)
(691)
247
2020
(563)
56
(130)
21
(2)
20
40
107
(507)
(569)
(95)
(34)
86
62
12
(1)
23
10
(20)
(602)
(525)
43
218
(1,576)
(1,205)
(866)
(86)
30
(596)
281
(371)
(17.0)
(30.8)
The results of Corporate and other activities mainly include
costs of Eni’s headquarters net of services charged to
operational companies for the provision of general purposes
services, administration, finance, information technology,
human resources management, legal affairs, international
affairs, as well as operational costs of decommissioning
activities pertaining to certain businesses which Eni exited,
divested or shut down in past years, net of the margins of
captive subsidiaries providing specialized services to the
business (insurance, financial, recruitment).
Management report | Consolidated financial statements | Annex
108
SUMMARIZED GROUP BALANCE SHEET
The summarized Group balance sheet aggregates the
amount of assets and liabilities derived from the statutory
balance sheet in accordance with functional criteria which
considers the enterprise conventionally divided into the
three fundamental areas focusing on resource investments,
operations and financing. Management believes that this
summarized group balance sheet is useful information in
assisting investors to assess Eni’s capital structure and to
analyse its sources of funds and investments in fixed assets
and working capital. Management uses the summarized
group balance sheet to calculate key ratios such as the
return on invested capital (adjusted ROACE) and the financial
soundness/equilibrium (gearing and leverage).
SUMMARIZED GROUP BALANCE SHEET(a)
Fixed assets
Property, plant and equipment
Right of use
Intangible assets
Inventories - Compulsory stock
Equity-accounted investments and other investments
Receivables and securities held for operating purposes
Net payables related to capital expenditure
Net working capital
Inventories
Trade receivables
Trade payables
Net tax assets (liabilities)
Provisions
Other current assets and liabilities
Provisions for employee benefits
Assets held for sale including related liabilities
CAPITAL EMPLOYED, NET
Eni shareholders' equity
Non-controlling interest
Shareholders’ equity
Net borrowings before lease liabilities ex IFRS 16
Lease liabilities
- of which Eni working interest
- of which Joint operators' working interest
Net borrowings post lease liabilities ex IFRS 16
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY
Leverage
Gearing
(€ million) December 31, 2021 December 31, 2020
Change
56,299
4,821
4,799
1,053
7,181
1,902
(1,804)
74,251
6,072
15,524
(16,795)
(3,678)
(13,593)
(2,258)
(14,728)
(819)
139
58,843
44,437
82
44,519
8,987
5,337
3,653
1,684
14,324
58,843
0.32
0.24
53,943
4,643
2,936
995
7,706
1,037
(1,361)
69,899
3,893
7,087
(8,679)
(2,198)
(13,438)
(1,328)
(14,663)
(1,201)
44
54,079
37,415
78
37,493
11,568
5,018
3,366
1,652
16,586
54,079
0.44
0.31
2,356
178
1,863
58
(525)
865
(443)
4,352
2,179
8,437
(8,116)
(1,480)
(155)
(930)
(65)
382
95
4,764
7,022
4
7,026
(2,581)
319
287
32
(2,262)
4,764
(a) For a reconciliation to the statutory statement of cash flow see the paragraph “Reconciliation of Summarized Group Balance Sheet and Statement of Cash Flows to Statutory Schemes”.
As of December 31, 2021, fixed assets of €74,251 million
increased by €4,352 million from December 31, 2020: capital
expenditures and acquisitions during the year and the positive
impact of exchange rate differences were partly offset by DD&A
(the period-end exchange rate of EUR vs. USD was 1.133, down
7.7% compared to 1.227 at December 31, 2020).
Net working capital (-€14,728 million) was substantially
unchanged compared to December 31, 2020: the increased
value of oil and product inventories due to the weighted-average
cost method of accounting in an environment of rising prices
were partly offset by the recognition of income taxes for the year
of €1,480 million and by the increase of the other current assets
and liabilities (€930 million).
Eni Annual Report 2021
(€ million)
COMPREHENSIVE INCOME
Net profit (loss)
Items that are not reclassified to profit or loss
Remeasurements of defined benefit plans
Change of minor investments at fair value with effects
to other comprehensive income
Share of “Other comprehensive income” on equity-accounted investments
Tax effect
Items that may be reclassified to profit or loss
Currency translation differences
Change in the fair value of cash flow hedging derivatives
Share of "Other comprehensive income" on equity-accounted investments
Tax effect
Total other items of comprehensive income (loss)
Total comprehensive income (loss)
attributable to:
- Eni's shareholders
- Non-controlling interest
CHANGES IN SHAREHOLDERS’ EQUITY
(€ million)
Shareholders' equity at January 1st, 2020
Total comprehensive income (loss)
Dividends distributed to Eni's shareholders
Dividends distributed by consolidated subsidiaries
Net issue of perpetual subordinated bonds
Other changes
Total changes
Shareholders' equity at December 31, 2020
attributable to:
- Eni's shareholders
- Non-controlling interest
Shareholders' equity at January 1st, 2021
Total comprehensive income (loss)
Dividends distributed to Eni's shareholders
Dividends distributed by consolidated subsidiaries
Payments on perpetual subordinated bonds
Coupon of perpetual subordinated bonds
Costs for the issue of perpetual subordinated bonds
Buy-back program
Other changes
Total changes
Shareholders’ equity at December 31, 2021
attributable to:
- Eni’s shareholders
- Non-controlling interest
2021
5,840
149
119
105
2
(77)
1,902
2,828
(1,264)
(34)
372
2,051
7,891
7,872
19
(11,408)
(1,965)
(3)
2,975
(6)
7,891
(2,390)
(5)
2,000
(61)
(15)
(400)
6
109
2020
(8,628)
33
(16)
24
25
(2,813)
(3,314)
661
32
(192)
(2,780)
(11,408)
(11,415)
7
47,900
(10,407)
37,493
37,415
78
37,493
7,026
44,519
44,437
82
Shareholders’ equity (€44,519 million) increased by €7,026
million compared to December 31, 2020 due to the net profit
for the period (€5,840 million), the issuance in May 2021
of hybrid bonds for €2 billion and positive foreign currency
translation differences (+€2,828 million) reflecting the
appreciation of the US dollar vs. the euro as of December
31, 2021 vs. December 31, 2020, partly offset by the
distribution of dividends to Eni shareholders (balance of the
2020 dividend of €857 million and the 2021 interim dividend
of €1,533 million), the buy-back (€400 million) as well as a
negative change in the cash flow hedge reserve of -€1,264
million reflecting trends in gas prices.
Management report | Consolidated financial statements | Annex
110
LEVERAGE AND NET BORROWINGS
Leverage is a measure used by management to assess
the Company’s level of indebtedness. It is calculated as a
ratio of net borrowings which is calculated by excluding
cash and cash equivalents and certain very liquid assets
from financial debt to shareholders’ equity, including non-
interest. Management periodically
controlling
reviews
leverage in order to assess the soundness and efficiency of
the Group balance sheet in terms of optimal mix between
net borrowings and net equity, and to carry out benchmark
analysis with industry standards.
Total finance debt
- Short-term debt
- Long-term debt
Cash and cash equivalents
Securities held for trading
Financing receivables held for non-operating purposes
Net borrowings before lease liabilities ex IFRS 16
Lease Liabilities
- of which Eni working interest
- of which Joint operators' working interest
Net borrowings post lease liabilities ex IFRS 16
Shareholders' equity including non-controlling interest
Leverage before lease liability ex IFRS 16
Leverage after lease liability ex IFRS 16
(€ million) December 31, 2021 December 31, 2020
Change
27,794
4,080
23,714
(8,254)
(6,301)
(4,252)
8,987
5,337
3,653
1,684
14,324
44,519
0.20
0.32
26,686
4,791
21,895
(9,413)
(5,502)
(203)
11,568
5,018
3,366
1,652
16,586
37,493
0.31
0.44
1,108
(711)
1,819
1,159
(799)
(4,049)
(2,581)
319
287
32
(2,262)
7,026
0.11
0.12
As of December 31, 2021, net borrowings were €14,324
million decreasing by €2,262 million from 2020.
Total finance debt of €27,794 million consisted of €4,080
million of short-term debt (including the portion of long-
term debt due within twelve months of €1,781 million) and
€23,714 million of long-term debt.
The
in financing receivables held for non-
operating purposes was due to the material increase in
commodity prices and in commodity derivates exposure
which triggered requests from financial counterparts and
commodity exchanges to adjust the financial deposits to
increase
secure the derivatives transactions (margin calls). Those
deposit will be reimbursed to the Company upon settlement
of the underlying transactions.
When excluding the lease liabilities, net borrowings were
re-determined at €8,987 million reducing by €2,581 million
from 2020.
Leverage2 – the ratio of the borrowings to total equity – was
0.32 at December 31, 2021. The impact of the lease liability
pertaining to joint operators in Eni-led upstream unincorporated
joint ventures weighted on leverage for 4 points. Excluding the
impact of IFRS 16 altogether, leverage would be 0.20.
SUMMARIZED GROUP CASH FLOW STATEMENT
Eni’s Summarized Group Cash Flow Statement derives from
the statutory statement of cash flows. It enables investors to
understand the connection existing between changes in cash
and cash equivalents (deriving from the statutory cash flows
statement) and in net borrowings (deriving from the summarized
cash flow statement) that occurred in the reporting period. The
measure which links the two statements is represented by the
“free cash flow” which is calculated as difference between the
cash flow generated from operations and the net cash used in
investing activities. Starting from free cash flow it is possible to
determine either: (i) changes in cash and cash equivalents for
the period by adding/deducting cash flows relating to financing
debts/receivables (issuance/repayment of debt and receivables
related to financing activities), shareholders’ equity (dividends
paid, net repurchase of own shares, capital issuance) and
the effect of changes in consolidation and of exchange rate
differences; and (ii) change in net borrowings for the period by
adding/deducting cash flows relating to shareholders’ equity
and the effect of changes in consolidation and of exchange rate
differences.
(2) Other alternative performance indicators disclosed are accompanied by explanatory notes and tables in line with guidance provided by ESMA guidelines on alternative
performance measures (ESMA/2015/1415), published on October 5, 2015. For further information, see the section “Alternative performance measures” of this Annual
Report at subsequent pages.
Eni Annual Report 2021 SUMMARIZED GROUP CASH FLOW STATEMENT(a)
Net profit (loss)
Adjustments to reconcile net profit (loss) to net cash provided by operating activities:
- depreciation, depletion and amortization and other non monetary items
- net gains on disposal of assets
- dividends, interests, taxes and other changes
Changes in working capital related to operations
Dividends received by investments
Taxes paid
Interests (paid) received
Net cash provided by operating activities
Capital expenditure
Investments and purchase of consolidated subsidiaries and businesses
Disposals of consolidated subsidiaries, businesses, tangible and intangible assets and investments
Other cash flow related to investing activities
Free cash flow
Net cash inflow (outflow) related to financial activities
Changes in short and long-term financial debt
Repayment of lease liabilities
Net issue (repayment) of perpetual hybrid bond
Effect of changes in consolidation and exchange differences of cash and cash equivalent
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENT
Adjusted net cash before changes in working capital at replacement cost
Change in net borrowings
Free cash flow
Repayment of lease liabilities
Net borrowings of acquired companies
Net borrowings of divested companies
Exchange differences on net borrowings and other changes
Dividends paid and changes in non-controlling interest and reserves
Net issue (repayment) of perpetual hybrid bond
CHANGE IN NET BORROWINGS BEFORE LEASE LIABILITIES
IFRS 16 first application effect
Repayment of lease liabilities
Inception of new leases and other changes
Change in lease liabilities
CHANGE IN NET BORROWINGS AFTER LEASE LIABILITIES
111
(€ million)
2021
2020
2019
Change
5,840
(8,628)
155
14,468
8,568
(102)
5,334
(3,146)
857
12,641
10,480
(4,073)
(9)
3,251
(18)
509
(170)
6,224
(93)
2,083
366
(3,128)
1,346
348
(3,726)
(2,049)
(5,068)
(1,677)
(764)
(875)
(941)
12,861
4,822
12,392
(5,234)
(4,644)
(8,376)
111
8,039
(590)
(2,738)
(392)
(3,008)
(2,346)
404
289
5,582
(4,743)
(244)
(939)
28
(735)
(921)
1,156
3,115
(869)
1,924
52
(1,148)
12,711
2021
5,582
(939)
(777)
2,975
(69)
3,419
6,726
2020
(921)
(869)
(67)
(€ million)
504
(254)
1,258
376
1,024
6,503
(279)
(5,899)
(1,540)
(3,359)
(877)
(70)
(812)
(1,051)
1
121
(4,861)
(4,567)
11,700
5,985
2019
Var. ass.
6,503
(70)
(710)
1,258
(877)
13
(429)
759
(158)
(1,188)
(2,780)
(1,968)
(3,424)
(812)
1,924
2,581
2,975
(1,051)
(91)
(3,188)
2,672
(5,759)
939
869
877
(1,258)
(239)
(766)
(319)
2,262
630
539
(5,648)
(8,836)
Dividends paid and changes in non-controlling interests and reserves
(2,780)
(1,968)
(3,424)
(a) For a reconciliation to the statutory statement of cash flow see the paragraph “Reconciliation of Summarized Group Balance Sheet and Statement of Cash Flows to Statutory Schemes”.
Net cash provided by operating activities for the full year
of 2021 was €12,861 million, an increase of €8,039 million
compared to the full year of 2020, driven by a better scenario
in the upstream segment.
The cash flow benefitted from trade receivables (about
€2 billion) due in subsequent reporting periods divested
to financing institutions, up by approximately €0.7 billion
compared to the fourth quarter 2020.
The outflow related to the working capital of €3,146 million
was due to the change in the value of inventory holding,
the use of advances received by Egyptian state-owned
companies for financing the Zohr project, which were netted
against invoices for gas supplies and the adjustment of the
derivatives fair value.
Management report | Consolidated financial statements | Annex
112
The dividends received by equity investments mainly related
to Vår Energi.
Cash flow from operations before changes in working capital
at replacement cost was €12,711 million. This non-GAAP
measure includes net cash provided by operating activities
before changes in working capital excluding inventory holding
gains or losses relating to oil and products and provisions for
extraordinary credit losses and other charges, as well as the
fair value of commodity derivatives lacking the formal criteria
to be designated as hedges.
Net financial borrowings before IFRS16 decreased by €2,581
million mainly due to issuances of hybrid bonds for €2,000
million and the free cash flow provided by operating activities
(€5,582 million), partly offset by the payment of dividends to Eni’s
shareholders of approximately €2,358 million (the 2020 balance
dividend of €0.24 per share for a total amount of approximately
€854 million and the 2021 interim dividend of €0.43 per share
for a total amount of €1,504 million), the €400 million buy-back
program, the payment of lease liabilities for €939 million and the
consolidation of debt of acquired subsidiaries (€777 million).
A reconciliation of cash flow from operations before changes
in working capital at replacement cost to net cash provided
by operating activities for the full year of 2021, 2020 and 2019
is provided below:
Net cash provided by operating activities
Changes in working capital related to operations
Exclusion of commodity derivatives
Exclusion of inventory holding (gains) losses
Provisions for extraordinary credit losses and other charges
Adjusted net cash before changes in working capital at replacement cost
(€ million)
2021
2020
2019
Change
12,861
4,822
12,392
3,146
(2,139)
(1,491)
334
18
440
1,318
128
(366)
(439)
(223)
336
8,039
3,128
(2,579)
(2,809)
206
12,711
6,726
11,700
5,985
Eni Annual Report 2021 CAPITAL EXPENDITURE AND INVESTMENTS
Exploration & Production(a)
- acquisition of proved and unproved properties
- exploration
- oil and gas development
- CCUS and agro-biofeedstock projects
- other expenditure
Global Gas & LNG Portfolio
Refining & Marketing and Chemicals
- Refining & Marketing
- Chemicals
Plenitude & Power
- Plenitude
- Power
Corporate and other activities
Impact of unrealized intragroup profit elimination
Capital expenditure(a)
Investments and purchase of consolidated subsidiaries and businesses
Total capex and investments and purchase of consolidated subsidiaries and businesses
(a) Includes reverse factoring operations in 2021.
(€ million)
2021
3,940
17
391
2020
3,472
57
283
6,996
400
586
113
2019
Var. ass.
Var. %
468
(40)
108
366
37
(3)
8
(43)
(50)
7
150
125
25
80
6
669
2,346
3,015
13.5
(70.2)
38.2
11.9
..
(5.5)
72.7
(5.6)
(8.5)
3.8
51.2
51.9
48.1
74.8
14.4
..
59.9
3,443
3,077
5,931
37
52
19
728
538
190
443
366
77
187
(4)
5,313
2,738
8,051
55
11
771
588
183
293
241
52
107
(10)
4,644
392
79
15
933
815
118
357
315
42
89
(14)
8,376
3,008
5,036
11,384
Cash outflows for capital expenditure and investments
were €8,051 million, increasing by 60% from 2020 and
include the consideration relating the following acquisitions:
(i) Be Power, a company engaged in the installation and
management of a network of charging stations for electric
vehicles for which half of the price will be paid in 2022; (ii) a
20% stake in the Dogger Bank A/B offshore wind project in the
North Sea; (iii) the 100% stake in Aldro Energía in the retail gas
business; (iv) the 100% stake in Fri-El Biogas Holding engaged
in the bioenergy business in Italy; (v) the management control
of Finproject by exercising the purchase option on the
remaining 60% share of the share capital, following the initial
investment of the 40% interest in 2020; and (vi) a portfolio
of renewables assets operational/under construction in Italy
(wind power assets) and in Spain, France and the United
States (including wind and photovoltaic assets).
Net of the above-mentioned non-organic items and of
utilization of trade advances cashed by Egyptian partners
in previous reporting periods in relation to the financing of
the Zohr project (approximately €500 million), net capital
expenditures amounted to €5.8 billion. Net capex were fully
funded by the adjusted cash flow.
In 2021, capital expenditure amounted to €5,313 million
(€4,644 million in the full year of 2020) mainly related to:
} Oil & Gas development activities (€3,443 million) mainly
in Egypt, Angola, the United States, Mexico, the United
Arab Emirates, Italy, Indonesia and Iraq;
} refining activity in Italy and outside Italy (€390 million)
mainly relating to the activities to maintain plants’ integrity
and stay-in-business, as well as HSE initiatives; marketing
activity (€148 million) for regulation compliance and stay-
in-business initiatives in the retail network in Italy and in
the rest of Europe;
} initiatives relating to gas and power marketing in the
retail business and renewables activities (€366 million).
Management report | Consolidated financial statements | Annex 114
Non-GAAP measures (Alternative performance measures)
Management evaluates underlying business performance on the
basis of Non-GAAP financial measures, which are not provided
by IFRS (“Alternative performance measures”), such as adjusted
operating profit, adjusted net profit, which are arrived at by
excluding from reported results certain gains and losses, defined
special items, which include, among others, asset impairments,
including impairments of deferred tax assets, gains on disposals,
risk provisions, restructuring charges, the accounting effect of
fair-valued derivatives used to hedge exposure to the commodity,
exchange rate and interest rate risks, which lack the formal criteria
to be accounted as hedges, and analogously evaluation effects
of assets and liabilities utilized in a relation of natural hedge of
the above mentioned market risks. Furthermore, in determining
the business segments’ adjusted results, finance charges on
finance debt and interest income are excluded (see below). In
determining adjusted results, inventory holding gains or losses
are excluded from base business performance, which is the
difference between the cost of sales of the volumes sold in the
period based on the cost of supplies of the same period and the
cost of sales of the volumes sold calculated using the weighted
average cost method of inventory accounting as required by
IFRS, except in those business segments where inventories are
utilized as a lever to optimize margins.
Finally, the same special charges/gains are excluded from the
Eni’s share of results at JVs and other equity accounted entities,
including any profit/loss on inventory holding.
Management is disclosing Non-GAAP measures of performance
to facilitate a comparison of base business performance across
periods, and to allow financial analysts to evaluate Eni’s trading
performance on the basis of their forecasting models.
Non-GAAP financial measures should be read together with
information determined by applying IFRS and do not stand in
for them. Other companies may adopt different methodologies
to determine Non-GAAP measures. Follows the description of
the main alternative performance measures adopted by Eni.
The measures reported below refer to the performance of the
reporting periods disclosed in this press report.
Adjusted operating and net profit
Adjusted operating profit and adjusted net profit are determined
by excluding inventory holding gains or losses, special items
and, in determining the business segments’ adjusted results,
finance charges on finance debt and interest income. The
adjusted operating profit of each business segment reports
gains and losses on derivative financial instruments entered
into to manage exposure to movements in foreign currency
exchange rates, which impact industrial margins and translation
of commercial payables and receivables. Accordingly, also
currency translation effects recorded through profit and loss
are reported within business segments’ adjusted operating
profit. The taxation effect of the items excluded from adjusted
operating or net profit is determined based on the specific rate
of taxes applicable to each of them.
Finance charges or income related to net borrowings excluded
from the adjusted net profit of business segments are comprised
of interest charges on finance debt and interest income earned
on cash and cash equivalents not related to operations.
Therefore, the adjusted net profit of business segments includes
finance charges or income deriving from certain segment operated
assets, i.e., interest income on certain receivable financing and
securities related to operations and finance charge pertaining to
the accretion of certain provisions recorded on a discounted basis
(as in the case of the asset retirement obligations in the Exploration
& Production segment).
Inventory holding gain or loss
This is the difference between the cost of sales of the volumes sold
in the period based on the cost of supplies of the same period and
the cost of sales of the volumes sold calculated using the weighted
average cost method of inventory accounting as required by IFRS.
Special items
These include certain significant income or charges pertaining
to either: (i) infrequent or unusual events and transactions, being
identified as non-recurring items under such circumstances;
(ii) certain events or transactions which are not considered to
be representative of the ordinary course of business, as in the
case of environmental provisions, restructuring charges, asset
impairments or write ups and gains or losses on divestments
even though they occurred in past periods or are likely to occur
in future ones. Exchange rate differences and derivatives
relating to industrial activities and commercial payables and
receivables, particularly exchange rate derivatives to manage
commodity pricing formulas which are quoted in a currency
other than the functional currency are reclassified in operating
profit with a corresponding adjustment to net finance charges,
notwithstanding the handling of foreign currency exchange risks
is made centrally by netting off naturally-occurring opposite
positions and then dealing with any residual risk exposure in the
derivative market. Finally, special items include the accounting
effects of
to
fair-valued commodity derivatives
commercial exposures, in addition to those which lack the criteria
to be designed as hedges, also those which are not eligible for
the own use exemption, including the ineffective portion of cash
flow hedges, as well as the accounting effects of commodity
and exchange rates derivatives whenever it is deemed that the
underlying transaction is expected to occur in future reporting
periods. As provided for in Decision No. 15519 of July 27, 2006
of the Italian market regulator (CONSOB), non-recurring material
income or charges are to be clearly reported in the management’s
discussion and financial tables.
relating
Eni Annual Report 2021 115
Leverage
Leverage is a Non-GAAP measure of the Company’s financial
condition, calculated as the ratio between net borrowings
and shareholders’ equity, including non-controlling interest.
Leverage is the reference ratio to assess the solidity and
efficiency of the Group balance sheet in terms of incidence
of funding sources including third-party funding and equity
as well as to carry out benchmark analysis with industry
standards.
Gearing
Gearing is calculated as the ratio between net borrowings
and capital employed net and measures how much of capital
employed net is financed recurring to third-party funding.
Net cash provided by operating activities before changes in
working capital at replacement cost
Net cash provided from operating activities before changes in
working capital and excluding inventory holding gain or loss.
Free cash flow
Free cash flow represents the link existing between changes
in cash and cash equivalents (deriving from the statutory
cash flows statement) and in net borrowings (deriving from
the summarized cash flow statement) that occurred from the
beginning of the period to the end of period. Free cash flow is
the cash in excess of capital expenditure needs. Starting from
free cash flow it is possible to determine either: (i) changes
in cash and cash equivalents for the period by adding/
deducting cash flows relating to financing debts/ receivables
(issuance/repayment of debt and receivables related to
financing activities), shareholders’ equity (dividends paid, net
repurchase of own shares, capital issuance) and the effect of
changes in consolidation and of exchange rate differences;
(ii) changes in net borrowings for the period by adding/
deducting cash flows relating to shareholders’ equity and
the effect of changes in consolidation and of exchange rate
differences.
Net borrowings
Net borrowings is calculated as total finance debt less
cash, cash equivalents and certain very liquid investments
not related to operations, including among others non-
operating financing receivables and securities not related to
operations. Financial activities are qualified as “not related
to operations” when these are not strictly related to the
business operations.
Coverage
Financial discipline ratio, calculated as the ratio between
operating profit and net finance charges.
Current ratio
Measures the capability of the company to repay short-term
debt, calculated as the ratio between current assets and current
liabilities.
Debt coverage
Rating companies use the debt coverage ratio to evaluate
debt sustainability. It is calculated as the ratio between net
cash provided by operating activities and net borrowings, less
cash and cash-equivalents, securities held for non-operating
purposes and financing receivables for non-operating purposes.
EBITDA
Earnings Before Interest, Taxes, Depreciation and Amortization,
equal to operating profit plus amortization, depreciation and
impairments..
Net Debt/EBITDA adjusted
Net Debt/adjusted EBITDA is the ratio between the profit available
to cover the debt before interest, taxes, amortizations and
impairment. This index is a measure of the company’s ability pay
off its debt and gives an indication as to how long a company
would need to operate at its current level to pay off all its debt.
Profit per boe
Measures the return per oil and natural gas barrel produced. It
is calculated as the ratio between Results of operations from
E&P activities (as defined by FASB Extractive Activities - Oil and
Gas Topic 932) and production sold.
Opex per boe
Measures efficiency in the Oil & Gas development activities,
calculated as the ratio between operating costs (as defined
by FASB Extractive Activities - Oil and Gas Topic 932) and
production sold.
Finding & Development cost per boe
Represents Finding & Development cost per boe of new proved
or possible reserves. It is calculated as the overall amount of
exploration and development expenditure, the consideration
for the acquisition of possible and probable reserves as well as
additions of proved reserves deriving from improved recovery,
extensions, discoveries and revisions of previous estimates (as
defined by FASB Extractive Activities - Oil and Gas Topic 932).
ROACE Adjusted
Is the return on average capital invested, calculated as the ratio
between net income before minority interests, plus net financial
charges on net financial debt, less the related tax effect and net
average capital employed.
The following tables report the group operating profit and Group
adjusted net profit and their breakdown by segment, as well as is
represented the reconciliation with net profit attributable to Eni’s
shareholders of continuing operations.
Management report | Consolidated financial statements | Annex 116
RECONCILIATION TABLES OF NON-GAAP RESULTS TO THE MOST COMPARABLE MEASURES OF FINANCIAL PERFORMANCE DETERMINED IN
ACCORDANCE TO GAAPS
(€ million)
2021
Reported operating profit (loss)
Exclusion of inventory holding (gains) losses
Exclusion of special items:
- environmental charges
- impairment losses (impairments reversal), net
- impairment of exploration projects
- net gains on disposal of assets
- risk provisions
- provision for redundancy incentives
- commodity derivatives
- exchange rate differences and derivatives
- other
Special items of operating profit (loss)
Adjusted operating profit (loss)
Net finance (expense) income(a)
Net income (expense) from investments(a)
Income taxes(a)
Tax rate (%)
Adjusted net profit (loss)
of which attributable to:
- non-controlling interest
- Eni's shareholders
Reported net profit (loss) attributable to Eni's shareholders
Exclusion of inventory holding (gains) losses
Exclusion of special items
Adjusted net profit (loss) attributable to Eni's shareholders
(a) Excluding special items.
o
i
l
o
f
t
r
o
P
G
N
L
&
s
a
G
l
a
b
o
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l
899
26
5
(207)
206
(349)
(319)
580
(17)
n
o
i
t
c
u
d
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r
P
&
n
o
i
t
a
r
o
l
p
x
E
10,066
60
(1,244)
247
(77)
113
60
(3)
71
(773)
9,293
(313)
681
(4,118)
(394)
d
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a
g
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t
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k
r
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M
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45
g
n
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n
fi
e
R
(1,455)
150
1,342
(22)
(4)
42
50
(14)
18
20
(2)
(5)
(1,982)
(6)
96
1,562
(1,879)
152
(32)
(4)
(54)
476
(2)
(3)
(144)
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e
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C
e
d
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t
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e
P
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w
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P
&
2,355
(816)
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t
a
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m
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fi
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r
p
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r
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a
p
m
I
(208)
(36)
p
u
o
r
G
12,341
(1,491)
271
167
247
(100)
142
193
(2,139)
183
(150)
(1,186)
9,664
(903)
(17)
(244)
68
(4,395)
61
23
1
33
91
14
223
(593)
(539)
(691)
247
5,543
169
62
327
(1,576)
(176)
50.3
4,349
19
4,330
5,821
(1,060)
(431)
4,330
Eni Annual Report 2021
n
o
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t
c
u
d
o
r
P
&
n
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t
a
r
o
l
p
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n
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k
r
a
M
&
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l
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a
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m
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C
g
n
i
n
fi
e
R
(610)
(332)
(2,463)
19
1,888
1
114
34
13
88
2,157
1,547
(316)
262
(1,369)
2
2
858
(183)
(21)
658
326
(15)
(100)
1,290
85
1,271
(8)
5
27
(185)
10
(26)
1,179
6
(7)
(161)
(84)
e
d
u
t
i
n
e
P
l
r
e
w
o
P
&
660
1
1
10
20
(233)
6
(195)
465
(1)
6
(141)
s
e
i
t
i
v
i
t
c
a
r
e
h
t
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d
n
a
e
t
a
r
o
p
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C
(563)
(130)
21
(2)
20
40
107
56
(507)
(569)
(95)
(34)
117
p
u
o
r
G
(3,275)
1,318
(25)
3,183
(9)
149
123
440
(160)
154
3,855
1,898
(893)
(3)
n
o
i
t
a
n
m
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t
fi
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p
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z
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l
a
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r
n
u
f
o
33
28
t
c
a
p
m
I
61
(25)
(1,753)
124
211
(246)
329
(1,205)
36
175.0
(751)
7
(758)
(8,635)
937
6,940
(758)
2020
(€ million)
Reported operating profit (loss)
Exclusion of inventory holding (gains) losses
Exclusion of special items:
- environmental charges
- impairment losses (impairments reversal), net
- net gains on disposal of assets
- risk provisions
- provision for redundancy incentives
- commodity derivatives
- exchange rate differences and derivatives
- other
Special items of operating profit (loss)
Adjusted operating profit (loss)
Net finance (expense) income(a)
Net income (expense) from investments(a)
Income taxes(a)
Tax rate (%)
Adjusted net profit (loss)
of which attributable to:
- non-controlling interest
- Eni's shareholders
Reported net profit (loss) attributable to Eni's shareholders
Exclusion of inventory holding (gains) losses
Exclusion of special items
Adjusted net profit (loss) attributable to Eni's shareholders
(a) Excluding special items.
Management report | Consolidated financial statements | Annex
118
2019
(€ million)
Reported operating profit (loss)
Exclusion of inventory holding (gains) losses
Exclusion of special items:
- environmental charges
- impairment losses (impairments reversal), net
- net gains on disposal of assets
- risk provisions
- provision for redundancy incentives
- commodity derivatives
- exchange rate differences and derivatives
- other
Special items of operating profit (loss)
Adjusted operating profit (loss)
Net finance (expense) income(a)
Net income (expense) from investments(a)
Income taxes(a)
Tax rate (%)
Adjusted net profit (loss)
of which attributable to:
- non-controlling interest
- Eni's shareholders
Reported net profit (loss) attributable to Eni's shareholders
Exclusion of inventory holding (gains) losses
Exclusion of special items
Adjusted net profit (loss) attributable to Eni's shareholders
(a) Excluding special items.
n
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t
c
u
d
o
r
P
&
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t
a
r
o
l
p
x
E
7,417
32
1,217
(145)
(18)
23
14
100
1,223
8,640
(362)
312
(5,154)
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l
o
f
t
r
o
P
G
N
L
&
s
a
G
l
a
b
o
G
l
431
(5)
1
(576)
109
233
(238)
193
3
(21)
(75)
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n
a
g
n
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k
r
a
M
&
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l
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m
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g
n
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n
fi
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R
(682)
(318)
244
922
(5)
(2)
8
(118)
(5)
(23)
1,021
21
(36)
37
(64)
e
d
u
t
i
n
e
P
l
r
e
w
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P
&
74
42
3
255
(10)
6
296
370
(1)
10
(104)
s
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t
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t
c
a
r
e
h
t
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d
n
a
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t
a
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p
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C
(688)
62
12
(1)
23
10
(20)
86
(602)
(525)
43
218
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t
a
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m
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l
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t
fi
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r
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(120)
95
(25)
p
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6,432
(223)
338
2,188
(151)
3
45
(439)
108
296
2,388
8,597
(921)
381
5
(5,174)
3,436
100
(42)
275
(866)
(20)
64.2
2,883
7
2,876
148
(157)
2,885
2,876
Eni Annual Report 2021
RECONCILIATION OF SUMMARIZED GROUP BALANCE SHEET AND STATEMENT OF CASH FLOWS
TO STATUTORY SCHEMES
119
December 31, 2021
December 31, 2020
Notes to the
Consolidated
Financial Statement
Amounts from
statutory
scheme
Amounts of the
summarized
Group scheme
Amounts from
statutory
scheme
Amounts of the
summarized
Group scheme
(€ million)
SUMMARIZED GROUP BALANCE SHEET
Items of Summarized Group Balance Sheet
(where not expressly indicated, the item derives
directly from the statutory scheme)
Fixed assets
Property, plant and equipment
Right of use
Intangible assets
Inventories - Compulsory stock
Equity‐accounted investments and other investments
Receivables and securities held for operating activities
Net payables related to capital expenditure, made up of:
-liabilities for current investment assets
-liabilities for no current investment assets
- receivables related to disposals
- receivables related to disposals non‐current
- payables for purchase of non-current assets
Total fixed assets
Net working capital
Inventories
Trade receivables
Trade payables
Net tax assets (liabilities), made up of:
- current income tax payables
- non-current income tax payables
- other current tax liabilities
- deferred tax liabilities
- other non‐current tax liabilities
- current income tax receivables
- non-current income tax receivables
- other current tax assets
- deferred tax assets
- other non‐current tax assets
- receivables for Italian consolidated accounts
- payables for Italian consolidated accounts
Provisions
Other current assets and liabilities, made up of:
- short-term financial receivables for operating purposes
- receivables vs. partners for exploration and production activities and other
- other current assets
- other receivables and other assets non-current
- advances, other payables, payables vs. partners for exploration
and production activities and other
- other current liabilities
- other payables and other liabilities non-current
Total net working capital
Provisions for employee benefits
Assets held for sale including related liabilities
made up of:
- assets held for sale
- liabilities directly associated with held for sale
CAPITAL EMPLOYED, NET
Shareholders' equity including non‐controlling interest
Net borrowings
Total debt, made up of:
‐ long‐term debt
‐ current portion of long‐term debt
‐ short‐term debt
less:
Cash and cash equivalents
Securities held for trading
Financing receivables held for non‐operating purposes
Net borrowings before lease liabilities ex IFRS 16
Lease liabilities, made up of:
- long‐term lease liabilities
- current portion of long‐term lease liabilities
Total net borrowings post lease liabilities ex IFRS 16(a)
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY
(a) For details on net borrowings see also note 20 to the consolidated financial statements.
(see note 17)
(see note 11)
(see note 11)
(see note 8)
(see note 11)
(see note 18)
(see note 8)
(see note 18)
(see note 11)
(see note 11)
(see note 11)
(see note 11)
(see note 8)
(see note 18)
(see note 17)
(see note 8)
(see note 11)
(see note 11)
(see note 18)
(see note 11)
(see note 11)
(see note 17)
(16)
(87)
8
23
(1,732)
(648)
(374)
(1,435)
(4,835)
(27)
195
108
442
2,713
182
3
(2)
39
3,315
13,192
824
(3,191)
(14,305)
(2,132)
263
(124)
23,714
1,781
2,299
4,389
948
56,299
4,821
4,799
1,053
7,181
1,902
(1,804)
74,251
6,072
15,524
(16,795)
(3,678)
(13,593)
(2,258)
(14,728)
(819)
139
58,843
44,519
27,794
(8,254)
(6,301)
(4,252)
8,987
5,337
14,324
58,843
21
11
(1,393)
(243)
(360)
(1,124)
(5,524)
(26)
184
153
450
4,109
181
3
(1)
22
3,815
2,236
1,061
(2,863)
(3,748)
(1,851)
44
21,895
1,909
2,882
4,169
849
53,943
4,643
2,936
995
7,706
1,037
(1,361)
69,899
3,893
7,087
(8,679)
(2,198)
(13,438)
(1,328)
(14,663)
(1,201)
44
54,079
37,493
26,686
(9,413)
(5,502)
(203)
11,568
5,018
16,586
54,079
Management report | Consolidated financial statements | Annex
120
SUMMARIZED GROUP CASH FLOW STATEMENT
Items of Summarized Cash Flow Statement and
confluence/reclassification of items in the statutory scheme
Net profit (loss)
Adjustments to reconcile net profit (loss) to net cash provided by operating
activities:
Depreciation, depletion and amortization and other non monetary items
- depreciation, depletion and amortization
- impairment losses (impairment reversals) of tangible, intangible and right of use, net
- write-off of tangible and intangible assets
- share of profit (loss) of equity-accounted investments
- other changes
- net change in the provisions for employee benefits
Gains on disposal of assets, net
Dividends, interests, income taxes and other changes
- dividend income
- interest income
- interest expense
- income taxes
Cash flow from changes in working capital
- inventories
- trade receivables
- trade payables
- provisions for contingencies
- other assets and liabilities
Dividends received
Income taxes paid, net of tax receivables received
Interests (paid) received
- interest received
- interest paid
Net cash provided by operating activities
Investing activities
- tangible assets
- intangible assets
Investments and purchase of consolidated subsidiaries and businesses
‐ investments
‐ consolidated subsidiaries and businesses net of cash
and cash equivalent acquired
Disposals
- tangible assets
- intangible assets
- consolidated subsidiaries and businesses net of cash
and cash equivalent disposed of
- tax on disposals
- investments
Other cash flow related to capital expenditure, investments and disposals
- prepaid right of use
‐ investment of securities and financing receivables held for operating purposes
‐ change in payables in relation to investing activities
‐ disposal of securities and financing receivables held for operating purposes
‐ change in receivables in relation to disposals
Free cash flow
Free cash flow
2021
2020
Amounts from
statutory
scheme
Amounts of the
summarized
Group scheme
Amounts from
statutory
scheme
Amounts of the
summarized
Group scheme
(€ million)
7,063
167
387
1,091
(194)
54
(230)
(75)
794
4,845
(2,033)
(7,888)
7,744
(406)
(563)
28
(792)
(4,950)
(284)
(837)
(1,901)
207
1
76
(35)
155
(2)
(227)
386
141
(9)
5,840
8,568
(102)
5,334
(3,146)
857
(3,726)
(764)
12,861
(5,234)
(2,738)
404
(8,628)
12,641
(9)
3,251
(18)
509
(2,049)
(875)
4,822
(4,644)
(392)
28
7,304
3,183
329
1,733
92
(150)
(126)
877
2,650
1,054
1,316
(1,614)
(1,056)
282
53
(928)
(4,407)
(237)
(283)
(109)
12
16
289
(735)
(166)
(757)
136
52
5,582
5,582
(921)
(921)
Eni Annual Report 2021
continued SUMMARIZED GROUP CASH FLOW STATEMENT
Items of Summarized Cash Flow Statement and
confluence/reclassification of items in the statutory scheme
Net cash inflow (outflow) related to financial activities
- net change in securities and financing receivables held for non-operating
purposes
Changes in short and long‐term finance debt
- increase in long-term debt
- repayments of long-term debt
- increase (decrease) in short-term debt
Repayment of lease liabilities
Dividends paid and changes in non‐controlling interest and reserves
- purchase of treasury shares
- acquisition of additional interests in consolidated subsidiaries
‐ dividends paid to Eni's shareholders
‐ dividends paid to non‐controlling interest
Net issue (repayment) of perpetual hybrid bond
- issue of perpetual subordinated bonds
- coupon payment on perpetual subordinated bonds
Effect of changes in consolidation, exchange differences
and cash and cash equivalent
- effect of exchange rate changes on cash and cash equivalents and other changes
Net increase (decrease) in cash and cash equivalent
121
2021
2020
Amounts from
statutory
scheme
Amounts of the
summarized
Group scheme
Amounts from
statutory
scheme
Amounts of the
summarized
Group scheme
(€ million)
(4,743)
3,556
(2,890)
(910)
(400)
(17)
(2,358)
(5)
1,985
(61)
52
(4,743)
(244)
(939)
(2,780)
1,924
52
(1,148)
1,156
5,278
(3,100)
937
(1,965)
(3)
2,975
(69)
1,156
3,115
(869)
(1,968)
2,975
(69)
3,419
Management report | Consolidated financial statements | Annex
122
Risk factor and uncertainties
1 RISKS RELATED TO THE BUSINESS
ACTIVITIES AND INDUSTRIES OF ENI
AND ITS CONSOLIDATED SUBSIDIARIES
(TOGETHER, THE “GROUP”)
The Group’s performance is exposed to the volatility of the
prices of crude oil and natural gas and to changing margins
of refined products and chemical products
The price of crude oil is the main driver of the Company’s
operating performance and cash flow, given the current size
of Eni’s Exploration & Production segment relative to other
Company’s business segments. The price of crude oil has
a history of volatility because, like other commodities, it is
influenced by the ups and downs in the economic cycle and
several other macro-variables that are beyond management’s
control. Crude oil prices are mainly determined by the
balance between global oil supplies and demand, the global
levels of commercial inventories and producing countries’
spare capacity. In the short-term, worldwide demand for
crude oil is highly correlated to the macroeconomic cycle.
A downturn in economic activity normally triggers lower
global demand for crude oil and possibly a supply and/or an
inventory build-up, because in the short-term producers are
unable to respond to swings in demand quickly. Whenever
global supplies of crude oil outstrip demand, crude oil prices
weaken. Factors that can influence the global economic
activity in the short-term and demand for crude oil include
several, unpredictable events, like trends in the economic
growth which shape crude oil demand in big consuming
countries like China, India and the United States, financial
crisis, geo-political crisis, local conflicts and wars, social
instability, pandemic diseases, the flows of international
commerce, trade disputes and governments’ fiscal policies,
among others. All these events could influence demands
for crude oil. Long-term demands for crude oil is driven, on
the positive side, by demographic growth, improving living
standards and GDP expansion; on the negative side, factors
that in the long-term may significantly reduce demands for
crude oil include availability of alternative sources of energy
(e.g., nuclear and renewables), technological breakthroughs,
shifts in consumer preferences, and finally measures and
other initiatives adopted or planned by governments to tackle
climate change and to curb carbon-dioxide emissions (CO2
emissions), including stricter regulations and control on
production and consumption of crude oil. Many governments
and supranational institutions, with the USA and EU leading
the way, have begun implementing policies to transition
the economy towards a low carbon model of development
through various means and strategies, particularly by
supporting development of renewable energies and the
replacement of internal combustion engine vehicles with
electric vehicles, including the possible adoption of tougher
regulations on the use of hydrocarbons such as the taxation
of CO2 emissions as a mitigation action of the climate
change risk. According to Eni’s management, the push to
reduce worldwide greenhouse gas emissions and an ongoing
energy transition towards a low carbon economy are likely
to materially affect the worldwide energy mix in the long-
term and may lead to structural lower crude oil demands and
prices. Eni also believes that the COVID-19 pandemic could
have possibly accelerated those trends. See the section
dedicated to the discussion of climate-related risks below.
in US tight oil
Notwithstanding the significant growth
production since 2011, global oil supplies are still controlled to
a large degree by the Organization of the Petroleum Exporting
Countries (“OPEC”) cartel, which has recently extended
to include other important oil producers like Russia and
Kazakhstan to form the so-called OPEC+ alliance. Saudi Arabia
plays a crucial role within the cartel, because it is estimated
to hold huge amounts of reserves and a vast majority of
worldwide spare production capacity. This explains why
geopolitical developments in the Middle East and particularly
in the Gulf area, like regional conflicts, acts of war, strikes,
attacks, sabotages, and social and political tensions can have
a big influence on crude oil prices. Also, sanctions imposed
by the United States and the EU against certain producing
countries may influence trends in crude oil prices.
To a
lesser extent, extreme weather events, such as
hurricanes in areas of highly concentrated production like
the Gulf of Mexico, and operational issues at key petroleum
infrastructure may have an impact on crude oil prices.
The recovery of crude oil prices that commenced at the end of
2020 has strengthened throughout 2021 due to a favourable
combination of market and macro developments, most
notably a strong macroeconomic recovery that supported
crude oil consumption, continued financial discipline of
international oil companies, careful production management
on part of the alliance of OPEC+ producing countries in
Eni Annual Report 2021 123
adding new supplies and normalizing levels of commercial
inventories in OECD countries. The macroeconomic cycle has
been driven by the gradual reopening of the economies of the
USA and Europe due to the effectiveness of the vaccination
campaign against the COVID-19 disease, an acceleration in
the pace of economic activity in Asia, robust fiscal policies
adopted by governments to help economies emerge from the
fallout of the COVID recession and accommodative monetary
policies from central banks. Furthermore, the spread of new
virus variants, like the Delta one in summer, or the Omicron
variant in the final part of 2021, did not derail the recovery
because new lockdowns were averted thanks to improved
ways of restraining the pandemic and the resilience of the
vaccinated population. Strong demand from road transport,
maritime and petrochemicals sectors and for people mobility
resulted in an increase of approximately 5.5 million barrels/d in
global crude oil demand in 2021 from the historic low of 2020
of approximately 92 million barrels/d, more than offsetting
weak consumption in the civil airline sector which continued to
suffer from low activity levels. Global oil demand is expected
to recover to the pre-COVID pandemic level of 100 million
barrels/d reported in 2019 by end the second half of 2022,
absent any disruption in the recovery of the global economy.
The better fundamentals of the oil market in 2021 were
significantly and positively affected by a more disciplined
approach adopted by producers in adding new supplies.
Throughout 2021, the OPEC+ alliance has implemented
effective production management by gradually easing the
quotas agreed in May 2020 at the peak of the pandemic
crisis, to avoid risks of oversupplying the market by restoring
too hastily the full pre-COVID output. Differently from past oil
cycles, despite recovering prices, international oil companies
and listed shale producers in the USA have retained a prudent
approach to investing decisions, signalling a historic shift in
capital allocation policies driven by the need to repair balance
sheets and cash flows which were significantly impaired by
the pandemic downturn and by the need to boost financial
returns to shareholders. Pressured by investor demanding
higher returns and ESG considerations and, in the case of
European players, by the need to allocate more funds to the
businesses of the energy transition, Oil & Gas companies
have continued to constrain the spending in the traditional
upstream business, reinvesting in the business just a fraction
of the cash flows to maintain production, while returning
excess cash to shareholders via dividend increases and share
repurchases. According to market sources, global upstream’s
capital expenditures in 2021 have barely increased from
2020, which represented the lowest level in fifteen years at
about $350 billion and are projected to grow modestly in
2022. According to market intelligence, that level of global
upstream investment is insufficient to hold oil production
steady at 100 million barrels/d.
Modest growth in worldwide crude oil supplies has led to a
substantial drawdown in inventories, which have returned to
historic averages. Against this backdrop, in the final months
of 2021 many countries like China and Western European
countries have begun facing difficulties at meeting energy
needs of their economies due to a global shortage of natural
gas and coal to fire power generation, triggering a sharp rally
in energy commodities. The rally extended also to crude
oil prices due to increasing evidence of gas-to-oil switch to
produce electricity.
Due to a more constructive macro environment and better
energy fundamentals, in 2021 crude oil prices recovered
strongly with the Brent crude oil benchmark averaging about
71 $/bbl in the year, up by 70% compared to 2020. The uptrend
has continued in the first months of 2022, with Brent crude oil
prices climbing above the psychological threshold of 100 $/
bbl to reach the highest mark from 2008 at 120-130 $/bbl,
driven by the rising international tensions in connection with
the Russia-Ukraine conflict (see below).
in 2020 by the
Gas prices, also negatively affected
economic crisis due to COVID-19 pandemic, recorded an
even more significant recovery than oil, due to strengthened
fundamentals driven by a global demand recovery, unusual
seasonal factors and much tighter supplies than a year ago.
Particularly, on the supply side, the worldwide oversupply
of liquefied natural gas (“LNG”) which led to the gas
prices downturn in 2019-2020 was already expected to be
absorbed, in a typical cyclical business after the LNG wave
of the previous years, and maintenances deferred during the
previous year due to COVID-19 affected 2021 production.
This came on top of the financial discipline of the US
shale producers which reduced in 2020 the production of
associated gas. Moreover, in 2020 several LNG projects
that were under construction or in a pre-FID stage of
development have been delayed, revised or cancelled
due to a combination of lack of financial resources due
to the COVID-19 downturn, environmental and climate
considerations and producers’ capital discipline. This will
impact the global gas and LNG market balance which is
now expected to remain tight even in a mid-term horizon
(2022-2025). At the same time, global gas demand grew
significantly in 2021 driven by a strong macroeconomic
recovery and by contingent factors like a particularly cold
winter season in the South-East Asia and in Texas and
unexpectedly high demand in South America (Argentina
due to issues with domestic production and Brazil due to a
severe drought impacting power generation). The recovery
of gas prices, already remarkable in the first part of 2021,
accelerated dramatically during the summer months
and with the start of the winter season in the Northern
Hemisphere, driven by reduced supplies in Asia and Europe
Management report | Consolidated financial statements | Annex 124
and as storage levels at the peak of the injection campaign
in Europe were at alarmingly low levels and supplies from
Russia declined. Gas prices surged well above any market
expectations and forecast in the final part of 2021, with
spot prices at continental hubs in Europe and for spot LNG
cargos to Asia reaching all-time highs over 60 $/mmBTU,
which is more than ten times the average price recorded
in 2020. In 2021, on average the spot prices of natural
gas recorded at the main continental hubs in Europe more
than quadrupled compared to 2020: the price recorded at
the spot market in Italy “PSV” averaged 487 €/thousand
cubic meters (up by 335% compared to 2020, or about 17
$/mmBTU), a similar trend was recorded by the TTF spot
price at the continental hubs which directly benefited from
decreasing LNG import flows. Due to the recent spike in
market volatility following the outbreak of the Russia-
Ukraine conflict, natural gas prices have risen materially in
late February and in March.
Looking forward, we believe that the fundamentals of the
oil and gas markets will continue to be supported by tight
supplies due to the underinvestment in the upstream sectors
occurred in previous years, oil companies’ renewed focus
on financial discipline and shareholders’ returns which will
constrain capital budgets, production management on part of
OPEC+ alliance and the global economic recovery underway.
On the negative side, high energy costs could derail the macro
economic recovery by reducing consumers’ disposable
income and could lead to phenomena of demand destruction,
like the ones already observed in the final months of 2021
with several commodity producers (like metals and fertilizers)
halting plants operations. Finally, high energy costs could
drive up inflationary pressures and alter market expectations
about future inflationary rates pressuring central banks
to abandon loose monetary policies and to raise interest
rates, which could negatively impact economic growth and
hydrocarbons consumptions.
The growing geopolitical risk in connection with the Russia-
Ukraine conflict also represents a factor in the outlook
2022 because rising tensions between Russia and Western
countries, the enactment on part of the USA and European
countries of economic sanctions against Russia, and any
possible ground or military escalations could derail the
macroeconomic cycle by sapping consumers sentiment
or interfering with operators’ investment decisions and this
could lead to lower demands for hydrocarbons (see below).
translate into lower revenues recognised in the Company’s
Exploration & Production segment at the time of the price
change, whereas expenses in this segment are either fixed
or less sensitive to changes in crude oil prices than revenues.
With respect to our Brent crude oil price assumption of 80 $/
bbl for 2022, we estimate our cash from operations to vary by
approximately €140 million for each one-dollar change in the
price of the Brent crude oil.
Eni’s results of operations and cash flows are less sensitive
to movements in natural gas prices because a large part of
equity gas volumes are sold based on fixed pricing formulae
and also due to the forward sale executed in the final months
of 2021 of about 5 bcm of the expected 2022 equity production
at fixed prices as part of our risk management activities.
Finally, movements in hydrocarbons prices significantly affect
the reportable amount of production and proved reserves
under our production sharing agreements (“PSAs”), which
represented about 58% of our proved reserves as of end
of 2021. The entitlement mechanism of PSAs foresees the
Company is entitled to a portion of a field’s reserves, the sale
of which is intended to cover expenditures incurred by the
Company to develop and operate the field. The higher the
reference prices for Brent crude oil used to estimate Eni’s
proved reserves, the lower the number of barrels necessary
to recover the same amount of expenditure, and vice versa. In
2021 our reported production and reserves were lowered by
an estimated amount of respectively 13 KBOE/d and by 168
mmboe due to an increased Brent reference price. Considering
the current portfolio of oil&gas assets, the Company estimates
its production to vary by about 0.3 KBOE/d for each one-dollar
change in the price of the Brent crude oil.
Eni’s Refining & Marketing and Chemical businesses are
cyclical. Their results are impacted by trends in the supply
and demand of oil products and plastic commodities, which
are influenced by the macro-economic scenario and by
products margins. Generally speaking, margins for refined
and chemical products depend upon the speed at which
products’ prices adjust to reflect movements in oil prices.
All these risks may adversely and materially impact the
Group’s results of operations, cash flow, liquidity, business
prospects, financial condition, and shareholder returns,
including dividends, the amount of funds available for stock
repurchases and the price of Eni’s share.
The volatility of hydrocarbons prices significantly affects
the Group’s financial performance. Lower hydrocarbon
prices from one year to another negatively affect the Group’s
consolidated results of operations and cash flow; the opposite
occurs in case of a rise in prices. This is because lower prices
Risks in connection with the war in Ukraine
The crisis in the relationship between Russia and Ukraine that
in February 2022 gave rise to the Russian military invasion and
an open conflict on a large scale with violent armed clashes
and tragic loss of human lives, constitutes a macroeconomic
Eni Annual Report 2021 125
risk. Possible outcomes of this situation might include a
prolonged armed conflict, a possible escalation in the military
action, risks of enlargement of the ongoing geopolitical
crisis and a further tightening up of the economic sanctions
against Russia. These factors could result in a scenario
that could eventually sap consumers’ confidence, deter
investment decisions by operators and cripple industrial
activities derailing the global recovery or, in the worst of the
outcomes, triggering a new worldwide recession, while the
economy has been still recovering from the fallout of the
COVID-19 downturn. This scenario would drove a reduction in
hydrocarbons demands and of commodity prices and would
adversely and significantly affect our results of operations
and cash flow, as well as business prospects, with a possible
lower remuneration of our shareholders.
Shortly after the outbreak of hostilities with the Russian
military invasion of Ukraine, the European Union, the USA,
and the UK imposed a raft of tough economic and financial
sanctions against Russia, which have added up to those
already in force since 2014.
The new restrictions mainly targeted the Russian financial
sector, precluding access to funding from US and EU-based
financial institutions and several relevant Russian entities
operating in the Oil & Gas sector. This first round of sanctions
waivered the purchase of oil, natural gas and refined products
exported by Russian entities, or the maintenance of business
relationships with certain Russian entities. However, the
situation in the marketplace evolved unexpectedly, as many
Western traders, oil companies, refiners and brokers began
reducing purchases of crude oil from Russia giving rise to a
sort of spontaneous, auto-sanctioning system. Finally, the
President of the USA signed an executive order to ban all
imports of Russian energy products. Those developments
destabilized energy markets as evidenced by the material
discount of the Ural Russian crude benchmark vs. the Brent
above 20 $/bbl, triggering a spike in market volatility and
propelling the Brent price at about 130 $/bbl in the last days
of February and into early March 2022. Natural gas prices for
the continental Europe spot benchmark surged to new all-
time highs driven by fears of supply disruptions. If the conflict
continues, it is possible that increasingly tight sanctions
could be imposed.
This volatility is expected to significantly affect the Group’s
operating expenses and revenues in 2022. Furthermore, the
increased volatility could drive: (i) an increased counterparty
risk due to the significant expansion of the nominal value of
trading receivables.; (ii) a higher level of financial risk of the
Company due to the need of increasing the cash deposits
to guarantee the settlement of derivative transactions with
financial institutions and commodity exchanges to fulfil the
margining obligations (margin call). To counter the ongoing
phase of extreme volatility in the energy commodities market
the Group is planning to strengthen its financial headroom
by increasing the liquidity reserves (cash on hands and
committed borrowing facilities).
Eni’s assets in Russia are immaterial to the Group results and
business prospects. Our exploration projects in the Russian
Oil & Gas sector have been suspended indefinitely following
the previous sanction regime, and the expenditures incurred
in relation to those projects in past reporting periods have
been written off. Currently, we do not have booked reserves
in Russia.
The Group has announced the intention to divest its interest
in the Blue Stream joint operations which manages the gas
pipeline that transports natural gas produced in Russia to
Turkey through the Black Sea. Those volumes of gas are
jointly marketed by Eni and Gazprom to the Turkish state-
owned company Botas. This divestment is not expected to
have a significant effect on the Group consolidated results
and balance sheet; the book value of this asset was €40
million as of December 31, 2021. Furthermore, the Group has
decided to cease signing new supply contracts of Russian
crude oil. This decision is expected to negatively affect our
refining system. In 2021 the purchase of crude oil from Russia
represented 18% of the total volumes of crudes traded by Eni
to support its refining system.
Finally, Russian Oil & Gas companies are currently joint
operators in certain upstream projects where we have
a working
interest. Every possible decision about the
participation of the Russian counterparts to those projects
are in the power of the state-owned companies of the host
countries where such projects are located.
important transactions that
involve Russian
The most
counterparts relate to the purchase of natural gas from the
Russian state-owned company Gazprom, based on long-
term supply contracts with take-or-pay clauses. The volumes
supplied from Russia represent a material amount of our
global portfolio of natural gas supplies, being about 43% of
the total in 2021 (see table “Natural gas supply” in the Global
Gas & LNG Portfolio operating review). Eni has entered into
delivery commitments that rely in part on such supply of
natural gas. Although we have access to increased supplies
from other geographies in our portfolio and from producing
countries where we have established relationships, should
supplies from Gazprom and other Russian natural gas
suppliers be disrupted (including as a result of sanctions
prohibiting or restricting purchases of natural gas from
Russia) we may suffer adverse effects which we cannot
currently predict or quantify but could be material.
Management report | Consolidated financial statements | Annex 126
Eni has adopted all necessary measures to ensure its
activities comply with the sanction regime currently in force
against Russia and will adapt to any new developments on an
ongoing basis.
more profitable and scenario-resilient projects. The Company
believes that this development will be long-lasting and likely
drive increased competition among players to gain access
to relatively cheaper reserves (onshore vs. offshore; proven
areas vs. unexplored areas).
located
There is strong competition worldwide, both within the
oil industry and with other industries, to supply energy
and petroleum products to the industrial, commercial and
residential energy markets
The current competitive environment in which Eni operates
is characterised by volatile prices and margins of energy
commodities, limited product differentiation and complex
relationships with state-owned companies and national
agencies of the countries where hydrocarbons reserves
are
to obtain mineral rights. As commodity
prices are beyond the Company’s control, Eni’s ability to
remain competitive and profitable
in this environment
requires continuous focus on technological innovation, the
achievement of efficiencies in operating costs, effective
management of capital resources and the ability to provide
valuable services to energy buyers. It also depends on Eni’s
ability to gain access to new investment opportunities. The
economic crisis caused by the suppression of industrial
activity and travel in response to the COVID-19 pandemic
materially and negatively impacted demand for the Company’s
products, driving a strong increase in the level of competition
across all sectors where Eni operates. Eni believes that the
pandemic will have enduring effects on the competition within
the Oil & Gas sectors, including the refining and marketing of
fuels and other energy commodities and the supply of energy
products to the retail segment.
In the Exploration & Production segment, Eni is facing
competition from both international and state-owned oil
companies for obtaining exploration and development rights
and developing and applying new technologies to maximise
hydrocarbon recovery. Because of its smaller size relative to
other international oil companies, Eni may face a competitive
disadvantage when bidding for large scale or capital intensive
projects and it may be exposed to the risk of obtaining lower
cost savings in a deflationary environment compared to
its larger competitors given its potentially smaller market
power with respect to suppliers, whereas in case of rising
input costs due to a shortage of materials, labour and other
productive factors Eni may experience higher pressure
from its suppliers to raise the price of goods and services
to the Company compared to Eni’s larger competitors. Due
to those competitive pressures, Eni may fail to obtain new
exploration and development acreage, to apply and develop
new technologies and to control costs. The COVID-19
pandemic has caused Exploration & Production companies
to significantly reduce their capital investment in response
to lower cash flows from operations and to focus on the
In the Global Gas & LNG Portfolio business, Eni is facing
strong competition in the European wholesale markets to
sell gas to industrial customers, the thermoelectric sector
and retail companies from other gas wholesalers, upstream
companies, traders and other players. The results of Eni’s
wholesale gas business are affected by global and regional
dynamics of gas demand and supplies, as well as by the
constraints of its portfolio of long-term, take-or-pay supply,
whereby the Company is obligated to offtake minimum annual
volumes of gas or in case of failure to pay the corresponding
purchase price (see below). Due to the competitive nature
of the business, sales margins tend to be small. In 2021,
despite natural gas prices surging to record levels, our
wholesale margins were negatively affected by narrowing
spreads between prices at continental hubs, to which our gas
procurement costs are indexed, and spot prices for the main
Italian benchmark to which our selling prices are indexed. We
believe wholesale margins of gas to remain challenged in the
medium-term due to competitive pressures and as renewable
sources of energy continue growing their market share in
covering European energy needs.
The results of the LNG business are mainly influenced by the
global balance between demand and supplies, considering
the higher level of flexibility of LNG with respect to gas
delivered via pipeline.
In its Refining & Marketing segment, Eni is facing competition
both in the refining business and in the retail marketing of fuels.
feedstock and
Eni’s refining business has been negatively affected for
many years by structural headwinds due to muted trends
in the European demand for fuels, refining overcapacity and
continued competitive pressure from players in the Middle
East, the United States and Far East Asia. Those competitors
can leverage on larger plant scale and cost economies,
availability of cheaper
lower energy
expenses. This unfavourable competitive environment has
been exacerbated by the economic downturn triggered by
the COVID-19 pandemic in 2020 and the negative effects
of travel restrictions imposed by governments all over the
world to contain the spread of the virus, which were only
partially lifted during the course of 2021. The COVID-19
fallout has negatively affected Eni’s refining sector in two
ways. On one side, the cost of the oil-based feedstock has
recovered strongly from the second half of 2020 throughout
the whole of 2021 due to effective production management
Eni Annual Report 2021 127
by the OPEC+ producers alliance. On the other side, the
continuing downturn of the civil airline sector due to bans
on long-haul flights have left the market of refined products
with huge imbalances due to a depressed demand for
jet fuel and gasoil oversupplies. Finally, in the last part of
2021 escalating costs of natural gas which is a key input to
refining processes added more pressure to an already weak
margin backdrop.
Against the backdrop of these challenged fundamentals, in
2021 the Company’s own internal performance measure to
gauge the profitability of its refineries, the SERM, plunged to
historic lows, remaining into negative territory throughout the
year and averaging minus 0.9 $/bbl compared to positive 1.7 $/
bbl in 2020. Furthermore, operating expenses were negatively
affected by an increase in the cost for the purchase of emission
allowances to comply with the requirements of the European
ETS, which reached all-time highs due to a combination of
macroeconomic recovery which drove industrial production
and rising coal consumption to fire power generation due to a
shortage of gas supplies and cost competitiveness. The cost
for emission allowance was on average 53.4 €/tonn, more than
doubling versus 2020; this uptrend has strengthened further
in the first months of 2022 with the cost breaking above 90
€/tonn. On the basis of these developments in the trading
environment, management revised downwardly the projections
of refining margins in the short to medium-term, which together
with the forecast of higher compliance expenses to purchase
carbon emission allowances under the European Emission
Trading Schema led to the projections of materially lower
expected future cash flows associated with the refinery activity
driving assets impairment losses of approximately €0.9 billion.
These added to approximately €2 billion of impairment losses
recorded in the previous two reporting periods, writing-off the
entire book value of Eni’s European refineries.
Eni’s Chemical business has been facing for years strong
competition from well-established international players and
state-owned petrochemical companies, particularly in the
most commoditised market segments such as the production
of basic petrochemical products (like polyethylene), where
demand is a function of macroeconomic growth. Many of
these competitors based in the Far East and the Middle
East have been able to benefit from cost economies due
to larger plant scale, wide geographic moat, availability
of cheap feedstock and proximity to end-markets. Excess
worldwide capacity of petrochemical commodities has
also fuelled competition in this business. Furthermore,
petrochemical producers based in the United States have
regained market share, as their cost structure has become
competitive due to the availability of cheap feedstock
deriving from the production of domestic shale gas from
which ethane is derived, which is a cheaper raw material
for the production of ethylene than the oil-based feedstock
utilised by Eni’s petrochemical subsidiaries. Finally, it is
likely rising public concern about climate change and the
preservation of the environment will negatively affect the
consumption of single-use plastics going forward. In 2021
those challenged business fundamentals were mitigated by
the post-pandemic strong economic recovery, which drove
significant demands for all kinds of plastic products and
supply disruptions of global reach due to contingent events.
These developments supported petrochemical products
margins and the business performance, particularly in
the first part of the year. We expect products margins to
normalize in the near term, falling back to pre-pandemic
levels as more supplies come online.
Eni’s retail gas and power business engages in the supply
of gas and electricity to customers in the retail markets
mainly in Italy, France, Spain and other countries in Europe.
Customers include households, large residential accounts
(hospitals, schools, public administration buildings, offices)
and small and medium-sized businesses. The retail market
is characterised by strong competition among selling
companies which mainly compete in terms of pricing and
the ability to bundle valuable services with the supply of
the energy commodity. In this segment, competition has
intensified in recent years due to the progressive liberalisation
of the market and the ability of residential customers to
switch smoothly from one supplier to another.
Eni also engages in the business of producing gas-fired
electricity that is largely sold in the wholesale market and in
the balancing market (“Mercato dei Servizi di Dispacciamento
or “MSD”) to the manager of the national grid. As far as
the wholesale market is concerned, margins of electricity
production from gas-fired plants (“Clean Spark Spread” or
“CSS”) have experienced some fluctuations in recent years
due to oversupplies, weak economic growth, and inter-fuel
competition. Management believes that these factors will
progressively reduce the CSS in the future, whereas MSD
margins have shown higher resilience also in more stressed
conditions.
In case the Company is unable to effectively manage the
above described competitive risks, which may increase
in case of a weaker-than-anticipated recovery in the post-
pandemic economy or in a worst case scenario of the
imposition by governments of new lockdown measures
and other restrictions in response to the pandemic, the
Group’s future results of operations, cash flow, liquidity,
business prospects, financial condition, shareholder returns,
including dividends, the amount of funds available for stock
repurchases and the price of Eni’s shares may be adversely
and significantly affected.
Management report | Consolidated financial statements | Annex 128
In the final months of 2021, European energy producers and
traders have coped with an unprecedented level of volatility,
with price increases of – in some cases – several hundred
percent within a few months for natural gas and power. This
has led to a significant increase in Eni’s financial risks
In the course of the fourth quarter 2021, a strengthening
global macroeconomic recovery has driven pent-up demand
for energy commodities across all geographies, against
the backdrop of a challenged supply particularly of natural
gas due to the sharp cuts made by Oil & Gas companies to
capital expenditures to navigate the oil downturn, resulting in
a very tight market for gas and electricity. Market imbalances
have been particularly problematic in Europe because in
addition to global macroeconomic forces, the continent has
faced regional, specific issues. The final months of 2021
have been characterized by an apparent underperformance
of plants producing renewable electricity, while natural gas
storage levels were at historical lows in correspondence to
the injection peak season before the start of the seasonal
increase
in gas consumption. Markets have been also
pressured by uncertainties about the natural gas import
flows from Russia. Russia state-owned company, Gazprom
has been corresponding to their long-term supply contracts’
commitments with European traders, while limiting spot
supplies, against the backdrop of the complex regulatory
issue relating to the start-up of line 2 of the Nord Stream gas
pipeline, which would considerably increase the natural gas
flow to Europe. Finally, European gas production have been
decreasing steadily in recent years due to mature field decline,
while new developments have been constrained by the climate
targets and policies adopted by EU member states.
the buyers as guarantee in case the trader or the producer
cannot deliver. These down-payments which amount is linked
to the level and volatility of commodity prices are temporarily
and they are unwound on delivery of the commodity, with the
deposited money flowing back to the traders.
Under normal market conditions, this way of operating does
not entail financial risks. However, when commodity prices
rise sharply as was the case during the fourth quarter of
2021 with prices increasing many times over the recent few
months, the negative value of forward sales at fixed prices and
the negative value of short positions grow proportionally and
traders are required to deposit extra funds to cover payments
tied to commodity forward sales and the settlement of
derivatives, known as margin calls. Margin calls typically arise
when the gap between spot commodity prices and the level
at which traders have sold their commodity availability on a
forward basis becomes too wide, forcing them to post the
margin as proof that they can deliver in the event of default.
Due to the extreme market conditions experienced in the fourth
quarter 2021, especially during the month of December, Eni
substantially increased the Company’s financial headroom
to cope with the disbursements required by its margin calls.
The Group has drawn €4 billion from its available committed
credit facilities to manage the critical market phase. The
situation improved somewhat in the final business days of
the year due to a sharp correction in commodity prices. The
underlying commodity derivatives that triggered the margin
calls were accounted at fair value through profit and loss or
as cash flow hedges in 2021 accounts.
Those developments triggered an unprecedented volatility in
European commodity markets, with spot prices of natural gas
and power rising several hundred percentage points within
few months, setting all-times highs (the average spot price
of natural gas at the Dutch hub “TTF” increased by more than
500% in the fourth quarter 2021 vs. 2020).
Notwithstanding the Group retains a liquidity reserve, in case
of a prolonged phase of extreme volatility in the commodity
markets, the Group may be exposed to a financial risk of
being unable to cover its margin calls requirements, which
may force the Group to unwind positions at a loss or to sell
assets at a discount.
The spike in commodity prices caused financial tensions
at European energy players, like Eni, which are making use
of commodity forward sale contracts and commodity
financial derivatives to hedge commercial margins or also for
speculative objectives due to the requirements of margining
payments envisaged by contracts.
Financial institutions which are the counterparts of derivatives
contracts and wholesale and exchange-based commodity
markets of gas, power and other energy commodities
routinely require down payments for traders to cover open
liabilities or to settle derivative contracts. Selling forward
future commodity availability (from production or long-term
supply contracts) also requires down payments, in favour of
The outbreak of the conflict between Russia and Ukraine
triggered a spike in the volatility of commodity prices and this
could result in more financial risks to us.
Safety, security, environmental and other operational risk
The Group engages in the exploration and production of oil
and natural gas, processing, transportation and refining of
crude oil, transport of natural gas, storage and distribution
of petroleum products and the production of base chemicals,
plastics, and elastomers. By their nature, the Group’s
operations expose Eni to a wide range of significant health,
safety, security, and environmental risks. Technical faults,
malfunctioning of plants, equipment and facilities, control
systems failure, human errors, acts of sabotage, attacks,
Eni Annual Report 2021 129
loss of containment and climate-related hazards can trigger
adverse consequences such as explosions, blow-outs, fires,
oil and gas spills from wells, pipeline and tankers, release
of contaminants and pollutants in the air, the ground and in
the water, toxic emissions and other negative events. The
magnitude of these risks is influenced by the geographic
range, operational diversity, and technical complexity of Eni’s
activities. Eni’s future results of operations, cash flow and
liquidity depend on its ability to identify and address the risks
and hazards inherent to operating in those industries.
In the Exploration & Production segment, Eni faces natural
hazards and other operational risks including those relating
to the physical and geological characteristics of oil and
natural gas fields. These include the risks of eruptions of
crude oil or of natural gas, discovery of hydrocarbon pockets
with abnormal pressure, crumbling of well openings, oil spills,
gas leaks, risks of blowout, fire or explosion and risks of
earthquake in connection with drilling activities.
Eni’s activities in the Refining & Marketing and Chemical
segment entail health, safety and environmental risks related
to the handling, transformation and distribution of oil, oil
products and certain petrochemical products. These risks can
arise from the intrinsic characteristics and the overall lifecycle
of the products manufactured and the raw materials used
in the manufacturing process, such as oil-based feedstock,
catalysts, additives and monomer feedstock. These risks
comprise flammability, toxicity,
long-term environmental
impact such as greenhouse gas emissions and risks of
various forms of pollution and contamination of the soil and
the groundwater, emissions and discharges resulting from
their use and from recycling or disposing of materials and
wastes at the end of their useful life.
All of Eni’s segments of operations involve, to varying degrees,
the transportation of hydrocarbons. Risks in transportation
activities depend on several factors and variables, including
the hazardous nature of the products transported due to their
flammability and toxicity, the transportation methods utilised
(pipelines, shipping, river freight, rail, road and gas distribution
networks), the volumes involved and the sensitivity of the regions
through which the transport passes (quality of infrastructure,
population density, environmental considerations). All modes
of transportation of hydrocarbons are particularly susceptible
to risks of blowout, fire and loss of containment and, given that
normally high volumes are involved, could present significant
risks to people, the environment and the property.
the
Eni has material offshore operations relating
exploration and production of hydrocarbons.
In 2021,
approximately 70% of Eni’s total oil and gas production for
the year derived from offshore fields, mainly in Egypt, Norway,
Libya, Angola, Kazakhstan, Congo, Indonesia, the United
to
States, the United Arab Emirates and Venezuela. Offshore
operations in the oil and gas industry are inherently riskier
than onshore activities. Offshore accidents and spills could
cause damage of catastrophic proportions to the ecosystem
and to communities’ health and security due to the apparent
difficulties in handling hydrocarbons containment in the
sea, pollution, poisoning of water and organisms, length
and complexity of cleaning operations and other factors.
Furthermore, offshore operations are subject to marine risks,
including storms and other adverse weather conditions and
perils of vessel collisions, which may cause material adverse
effects on the Group’s operations and the ecosystem.
The Company has invested and will continue to invest
significant financial resources to continuously upgrade the
methods and systems for safeguarding the reliability of its
plants, production facilities, vessels, transport and storage
infrastructures, the safety and the health of its employees,
contractors, local communities and the environment, to
prevent risks, to comply with applicable laws and policies
and to respond to and learn from unforeseen incidents.
Eni seeks to manage these operational risks by carefully
designing and building facilities, including wells, industrial
complexes, plants and equipment, pipelines, storage sites
and other facilities, and managing its operations in a safe and
reliable manner and in compliance with all applicable rules
and regulations, as well as by applying the best available
techniques in the marketplace. However, these measures
may ultimately not be completely successful in preventing
and/or altogether eliminating risks of adverse events. Failure
to properly manage these risks as well as accidental events
like human errors, unexpected system failure, sabotages or
other unexpected drivers could cause oil spills, blowouts,
fire, release of toxic gas and pollutants into the atmosphere
or the environment or in underground water and other
incidents, all of which could lead to loss of life, damage to
properties, environmental pollution, legal liabilities and/or
damage claims and consequently a disruption in operations
and potential economic losses that could have a material
and adverse effect on the Group’s results of operations, cash
flow, liquidity, business prospects, financial condition, and
shareholder returns, including dividends, the amount of funds
available for stock repurchases and the price of Eni’s shares.
Eni also faces risks once production is discontinued because
Eni’s activities require the decommissioning of productive
infrastructures, well plugging and
the environmental
remediation and clean-up of industrial hubs and oil and gas
fields once production and manufacturing activities cease.
Furthermore, in certain situations where Eni is not the operator,
the Company may have limited influence and control over
third parties, which may limit its ability to manage and control
such risks. Eni retains worldwide third-party liability insurance
Management report | Consolidated financial statements | Annex 130
coverage, which is designed to hedge part of the liabilities
associated with damage to third parties, loss of value to
the Group’s assets related to unfavourable events and in
connection with environmental clean-up and remediation. As
of the date of this Base Prospectus, maximum compensation
allowed under such insurance coverage is equal to $1.2 billion
in case of offshore incident and $1.4 billion in case of incident
at onshore facilities (refineries). Additionally, the Company may
also activate further insurance coverage in case of specific
capital projects and other industrial initiatives. Management
believes that its insurance coverage is in line with industry
practice and is enough to cover normal risks in its operations.
However, the Company is not insured against all potential
risks. In the event of a major environmental disaster, such as
the incident which occurred at the Macondo well in the Gulf
of Mexico several years ago, Eni’s third-party liability insurance
would not provide any material coverage and thus the
Company’s liability would far exceed the maximum coverage
provided by its insurance. The loss Eni could suffer in case
of a disaster of material proportions would depend on all the
facts and circumstances of the event and would be subject
to a whole range of uncertainties, including legal uncertainty
as to the scope of liability for consequential damages, which
may include economic damage not directly connected to the
disaster. The Company cannot guarantee that it will not suffer
any uninsured loss and there can be no guarantee, particularly
in the case of a major environmental disaster or industrial
accident, that such a loss would not have a material adverse
effect on the Company.
The occurrence of any of the above mentioned risks could
have a material and adverse impact on the Group’s results of
operations, cash flow, liquidity, business prospects, financial
condition, and shareholder returns, including dividends, the
amount of funds available for stock repurchases and the price
of Eni’s shares and could also damage the Group’s reputation.
Risks deriving from Eni’s exposure to weather conditions
Significant changes in weather conditions in Italy and in
the rest of Europe from year to year may affect demand for
natural gas and some refined products.
In colder years, demand for such products is higher.
Accordingly, the results of operations of Eni’s businesses
engaged in the marketing of natural gas and, to a lesser
extent, the Refining & Marketing business, as well as the
comparability of results over different periods may be
affected by such changes in weather conditions. Over
recent years, this pattern could have been possibly affected
by the rising frequency of weather trends like milder winter
or extreme weather events like heatwaves or unusually
cold snaps, which are possible consequences of climate
change.
Risks associated with the exploration and production of oil
and natural gas
The exploration and production of oil and natural gas require
high levels of capital expenditures and are subject to natural
hazards and other uncertainties, including those relating
to the physical characteristics of oil and gas fields. The
exploration and production activities are subject to mining
risk and the risks of cost overruns and delayed start-up at
the projects to develop and produce hydrocarbons reserves.
Those risks could have an adverse, significant impact on Eni’s
future growth prospects, results of operations, cash flows,
liquidity, and shareholders’ returns.
The production of oil and natural gas is highly regulated and
is subject to conditions imposed by governments throughout
the world in matters such as the award of exploration and
production leases, the imposition of specific drilling and other
work obligations, higher-than-average rates of income taxes,
additional royalties and taxes on production, environmental
protection measures, control over the development and
decommissioning of fields and installations, and restrictions
on production. A description of the main risks facing the
Company’s business in the exploration and production of oil
and gas is provided below.
Exploratory drilling efforts may be unsuccessful
Exploration activities are mainly subject to mining risk, i.e.
the risk of dry holes or failure to find commercial quantities
of hydrocarbons. The costs of drilling and completing wells
have margins of uncertainty, and drilling operations may be
unsuccessful because of a large variety of factors, including
geological failure, unexpected drilling conditions, pressure
or heterogeneities in formations, equipment failures, well
control (blowouts) and other forms of accidents. A large part
of the Company exploratory drilling operations is located
offshore, including in deep and ultra-deep waters, in remote
areas and in environmentally-sensitive locations (such as the
Barents Sea, the Gulf of Mexico, deep water leases off West
Africa, Indonesia, the Mediterranean Sea and the Caspian
Sea). In these locations, the Company generally experiences
higher operational risks and more challenging conditions and
incurs higher exploration costs than onshore. Furthermore,
deep and ultra-deep water operations require significant time
before commercial production of discovered reserves can
commence, increasing both the operational and the financial
risks associated with these activities.
investments
Because Eni plans to make significant
in
executing exploration projects, it is likely that the Company
will incur significant amounts of dry hole expenses in future
years. Unsuccessful exploration activities and failure to
discover additional commercial reserves could reduce future
production of oil and natural gas, which is highly dependent
Eni Annual Report 2021 on the rate of success of exploration projects and could
have an adverse impact on Eni’s future performance, growth
prospects and returns.
Development projects bear significant operational risks
which may adversely affect actual returns
Eni’s future results of operations and business prospects
depend in a significant way on its ability to carry out
and operate its major projects to develop and market
hydrocarbons reserves as planned. Key factors that may
affect the economics of these projects include:
} the outcome of negotiations with joint venture partners,
governments and state-owned companies, suppliers and
potential customers to define project terms and conditions,
including, for example, Eni’s ability to negotiate favourable
long-term contracts to market gas reserves;
} timely issuance of permits and licenses by government
agencies, including obtaining all necessary administrative
authorisations
install producing
infrastructures, build pipelines and related equipment to
transport and market hydrocarbons;
locations,
to drill
} the ability to carry out the front-end engineering design in
order to prevent the occurrence of technical inconvenience
during the execution phase;
} timely manufacturing and delivery of critical plants and
equipment by contractors, like floating production storage
and offloading (FPSO) vessels and platforms. For example,
due to adoption of emergency measures to contain the
spread of the COVID-19 pandemic, activities have slowed
down at critical shipyards resulting in delays for the
execution of few projects in our portfolio;
131
Development projects normally have long lead times due
to complexity of the activities and tasks that need to be
performed before a project final investment decision is made
and commercial production can be achieved. Those activities
include the appraisal of a discovery to evaluate the technical
and economic feasibility of the development project, obtaining
the necessary authorisations from governments, state
agencies or national oil companies, signing agreements with
the first party regulating a project’s contractual terms such as
the production sharing and cost recovery, obtaining partners’
approval, environmental permits and other conditions, signing
long-term gas contracts, carrying out the concept design and
the front-end engineering and building and commissioning the
related plants and facilities. All these activities can take years
to be finalised. Moreover, projects executed with partners and
joint venture partners reduce the ability of the Company to
manage risks and costs, and Eni could have limited influence
over and control of the operations and performance of its
partners.
The occurrence of any of such risks may negatively affect the
time-to-market of the reserves and may cause cost overruns
and start-up delays, lengthening the project pay-back period.
Those would adversely affect the economic returns of Eni’s
development projects and the achievement of production
growth targets, also considering that those projects are
exposed to the volatility of oil and gas prices which may
be substantially different from those estimated when the
investment decision was made, thereby leading to lower
return rates.
} risks associated with the use of new technologies and the
inability to develop advanced technologies to maximise
the recoverability rate of hydrocarbons or gain access to
previously inaccessible reservoirs;
Finally, if the Company is unable to develop and operate major
projects as planned, it could incur significant impairment
losses of capitalised costs associated with reduced future
cash flows of those projects.
} delays in the commissioning and hook-up phase;
} changes in operating conditions and cost overruns. We
expect the prices of key input factors such as labour,
basic materials (steel, cement and other metals) and
utilities to increase meaningfully in the next year or two
due to rising inflationary pressures rippling through the
entire supply chain at our development projects driven
by higher worldwide demand for commodities and semi-
finished goods as well as a shortage of productive factors.
However, other input expenses like rental fees of rigs have
exhibited less dynamicity due to existence of idle capacity
driven by the low level of investments in capital projects in
the upstream sector;
} the actual performance of the reservoir and natural field
decline;
} and the ability and time necessary to build suitable
transport infrastructures to export production to final
markets.
Inability to replace oil and natural gas reserves could
adversely
impact results of operations and financial
condition, including cash flows
In case the Company’s exploration efforts are unsuccessful
at replacing produced oil and natural gas, its reserves will
decline. In addition to being a function of production, revisions
and new discoveries, the Company’s reserve replacement is
also affected by the entitlement mechanism in its production
sharing agreements (“PSAs”), whereby the Company is
entitled to a portion of a field’s reserves, the sale of which is
intended to cover expenditures incurred by the Company to
develop and operate the field. The higher the reference prices
for Brent crude oil used to estimate Eni’s proved reserves, the
lower the number of barrels necessary to recover the same
amount of expenditure, and vice versa.
Future oil and gas production is a function of the Company’s
Management report | Consolidated financial statements | Annex 132
ability to access new reserves through new discoveries,
application of improved techniques, success in development
activity, negotiations with national oil companies and other
owners of known reserves and acquisitions.
An inability to replace produced reserves by discovering,
acquiring and developing additional reserves could adversely
impact future production levels and growth prospects. If Eni
is unsuccessful in meeting its long-term targets of reserve
replacement, Eni’s future total proved reserves and production
will decline.
Uncertainties in estimates of oil and natural gas reserves
The accuracy of proved reserve estimates and of projections
of future rates of production and timing of development
costs depends on several factors, assumptions and variables,
including:
} the quality of available geological, technical and economic
data and their interpretation and judgment;
regarding
} management’s assumptions
future
rates
of production and costs and timing of operating and
development costs. The projections of higher operating
and development costs may impair the ability of the
Company to economically produce reserves leading to
downward reserve revisions;
} changes in the prevailing tax rules, other government
regulations and contractual terms and conditions;
} results of drilling, testing and the actual production
performance of Eni’s reservoirs after the date of the
estimates which may drive substantial upward or
downward revisions; and
} changes in oil and natural gas prices which could affect
the quantities of Eni’s proved reserves since the estimates
of reserves are based on prices and costs existing as of
the date when these estimates are made.
Lower oil prices may impair the ability of the Company to
economically produce reserves leading to downward reserve
revisions.
Many of the factors, assumptions and variables underlying
the estimation of proved reserves involve management’s
judgment or are outside management’s control (prices,
governmental regulations) and may change over time,
therefore affecting the estimates of oil and natural gas
reserves from year-to-year.
The prices used in calculating Eni’s estimated proved reserves
are, in accordance with the SEC requirements, calculated by
determining the unweighted arithmetic average of the first
day-of-the-month commodity prices for the preceding twelve
months. Accordingly, the estimated reserves reported as of
the end of any given year could be significantly different from
the quantities of oil and natural gas that will be ultimately
in Eni’s estimated
recovered. Any downward revision
quantities of proved reserves would indicate lower future
production volumes, which could adversely impact Eni’s
business prospects, results of operations, cash flows and
liquidity.
The development of the Group’s proved undeveloped
reserves may take longer and may require higher levels
of capital expenditures than it currently anticipates or the
Group’s proved undeveloped reserves may not ultimately be
developed or produced
As of December 31, 2021, approximately 30% of the Group’s
total estimated proved reserves (by volume) were undeveloped
and may not be ultimately developed or produced. Recovery of
undeveloped reserves requires significant capital expenditures
and successful drilling operations. The Group’s reserve
estimates assume it can and will make these expenditures and
conduct these operations successfully. These assumptions
may not prove to be accurate and are subject to the risk of
a structural decline in the prices of hydrocarbons due to a
possible acceleration towards a low carbon economy and
a shift in consumers’ behaviour and preferences. In case
of a prolonged decline in the prices of hydrocarbon the
Group may not have enough financial resources to make the
necessary expenditures to recover undeveloped reserves.
The Group’s reserve report as of December 31, 2021 includes
estimates of total future development and decommissioning
costs associated with the Group’s proved total reserves
of approximately €32.2 billion
including
consolidated subsidiaries and equity-accounted entities). It
cannot be certain that estimated costs of the development
of these reserves will prove correct, development will occur
as scheduled, or the results of such development will be as
estimated. In case of change in the Company’s plans to develop
those reserves, or if it is not otherwise able to successfully
develop these reserves as a result of the Group’s inability to
fund necessary capital expenditures or otherwise, it will be
required to remove the associated volumes from the Group’s
reported proved reserves.
(undiscounted,
The Oil & Gas industry is a capital-intensive business and
needs large amount of funds to find and develop reserves.
In case the Group does not have access to sufficient funds
its Oil & Gas business may decline
The Oil & Gas industry is capital intensive. Eni makes and
expects to continue to make substantial capital expenditures
in
its business for the exploration, development and
production of oil and natural gas reserves. Over the next four
years, the Company plans to invest in the Oil & Gas business
approximately €4.5 billion per year on average. Historically,
Eni’s capital expenditures have been financed with cash
generated from operations, proceeds from asset disposals,
borrowings under its credit facilities and proceeds from the
issuance of debt and bonds. The actual amount and timing
Eni Annual Report 2021 133
of future capital expenditures may differ materially from
Eni’s estimates as a result of, among other things, changes
in commodity prices, available cash flows, lack of access
to capital, actual drilling results, the availability of drilling
rigs and other services and equipment, the availability of
transportation capacity, and regulatory, technological and
competitive developments. Eni’s cash flows from operations
and access to capital markets are subject to several variables,
including but not limited to:
} the amount of Eni’s proved reserves;
} the volume of crude oil and natural gas Eni is able to
produce and sell from existing wells;
} the prices at which crude oil and natural gas are sold;
} Eni’s ability to acquire, find and produce new reserves; and
} the ability and willingness of Eni’s lenders to extend credit or
of participants in the capital markets to invest in Eni’s bonds.
If revenues or Eni’s ability to borrow decrease significantly
due to factors such as a prolonged decline in crude oil and
natural gas prices or a more stringent investment framework
on part of lenders and financing institutions due to ESG
considerations, Eni might have limited ability to obtain the
capital necessary to sustain its planned capital expenditures.
If cash generated by operations, cash from asset disposals,
or cash available under Eni’s liquidity reserves or its credit
facilities is not sufficient to meet capital requirements,
the failure to obtain additional financing could result in a
curtailment of operations relating to development of Eni’s
reserves, which in turn could adversely affect its results of
operations and cash flows and its ability to achieve its growth
plans. In addition, funding Eni’s capital expenditures with
additional debt will increase its leverage and the issuance
of additional debt will require a portion of Eni’s cash flows
from operations to be used for the payment of interest and
principal on its debt, thereby reducing its ability to use cash
flows to fund capital expenditures and dividends.
Oil & Gas activity may be subject to increasingly high levels
of income taxes and royalties
Oil & Gas operations are subject to the payment of royalties
and income taxes, which tend to be higher than those payable
in many other commercial activities. Furthermore, in recent
years, Eni has experienced adverse changes in the tax regimes
applicable to Oil & Gas operations in a number of countries
where the Company conducts its upstream operations. As
a result of these trends, management estimates that the
tax rate applicable to the Company’s Oil & Gas operations
is materially higher than the Italian statutory tax rate for
corporate profit, which currently stands at 24%. Management
believes that the marginal tax rate in the Oil & Gas industry
tends to increase in correlation with higher oil prices, which
could make it more difficult for Eni to translate higher oil
prices into increased net profit. However, the Company
does not expect that the marginal tax rate will decrease in
response to falling oil prices. Adverse changes in the tax rate
applicable to the Group’s profit before income taxes in its Oil &
Gas operations would have a negative impact on Eni’s future
results of operations and cash flows.
In the current uncertain financial and economic environment,
governments are facing greater pressure on public finances,
which may induce them to intervene in the fiscal framework for
the Oil & Gas industry, including the risk of increased taxation,
windfall taxes, and even nationalisations and expropriations.
Due to increasing public concern about rising energy costs in
connection with the announcement of strong profits for the
year 2021 by oil companies, governments may seek ways
to reduce the energy bill by increasing the fiscal take on oil
companies, also by enacting windfall taxes on companies’
extra-profits, or by introducing some forms of price controls.
In March 2022, the Italian government enacted a windfall
tax scheme on domestic extra-profits of energy companies.
Considering that further legislative and implementing steps
are required and since the full set of comparison data,
extending till March 2022, are not fully available, to date it not
feasible a reliable estimation of the possible impact which
however is expected non-significant at Group level.
The present value of future net revenues from Eni’s proved
reserves will not necessarily be the same as the current
market value of Eni’s estimated crude oil and natural gas
reserves
The present value of future net revenues from Eni’s proved
reserves may differ from the current market value of Eni’s
estimated crude oil and natural gas reserves. In accordance
with the SEC rules, Eni bases the estimated discounted
future net revenues from proved reserves on the 12-month
un-weighted arithmetic average of the first day of the month
commodity prices for the preceding twelve months. Actual
future prices may be materially higher or lower than the SEC
pricing used in the calculations. Actual future net revenues
from crude oil and natural gas properties will be affected by
factors such as:
} the actual prices Eni receives for sales of crude oil and
natural gas;
} the actual cost and timing of development and production
expenditures;
} the timing and amount of actual production; and
} changes in governmental regulations or taxation.
The timing of both Eni’s production and its incurrence of
expenses in connection with the development and production
of crude oil and natural gas properties will affect the timing
and amount of actual future net revenues from proved
reserves, and thus their actual present value. Additionally, the
10% discount factor Eni uses when calculating discounted
future net revenues may not be the most appropriate discount
Management report | Consolidated financial statements | Annex 134
factor based on interest rates in effect from time to time
and risks associated with Eni’s reserves or the crude oil and
natural gas industry in general.
flow, liquidity, business prospects, financial condition, and
shareholder returns, including dividends, the amount of funds
available for stock repurchases and the price of Eni’s shares.
Oil & Gas activity may be subject to increasingly high
levels of regulations throughout the world, which may
have an impact on the Group’s extraction activities and the
recoverability of reserves
The production of oil and natural gas is highly regulated and
is subject to conditions imposed by governments throughout
the world in matters such as the award of exploration and
production leases, the imposition of specific drilling and
other work obligations, environmental protection measures,
control over the development and abandonment of fields and
installations, and restrictions on production. These risks can
limit the Group’s access to hydrocarbons reserves or may
cause the Group to redesign, curtail or cease its Oil & Gas
operations with significant effects on the Group’s business
prospects, results of operations and cash flow.
In Italy, the activities of hydrocarbon development and
production are performed by oil companies in accordance with
concessions granted by the Ministry of Economic Development
in agreement with the relevant Region territorially involved in
the case of onshore concessions. Concessions are granted for
an initial twenty-year term; the concessionaire is entitled to a
ten-year extension and then to one or more five-year extensions
to fully recover a field’s reserves and investments on the
condition that the concessionaire has fulfilled all obligations
related to the work program agreed in the original concession
award. In case of delay in the award of an extension, the
original concession remains fully effective until completion of
the administrative procedure to grant an extension.
In February 2022, the Italian government adopted a national
plan designed to identify areas that are suitable for carrying
out exploration, development and production of hydrocarbons
in the national territory and offshore territorial waters, in
accordance with environmental and other sustainability
criteria. The granting of new concessions or the extension of
existing ones must comply with the plan criteria. However,
Eni’s ongoing development concessions located partially or
totally in environmentally-sensitive areas retains their efficacy
as far as the analysis of economic costs and benefits of the
petroleum initiative proves to yield a net benefit.
Eni’s future performance depends on its ability to identify and
mitigate the above-mentioned risks and hazards which are
inherent to its Oil & Gas business. Failure to properly manage
those risks, the Company’s underperformance at exploration,
development and reserve replacement activities or the
occurrence of unforeseen regulatory risks may adversely
and materially impact the Group’s results of operations, cash
Risks related to political considerations
As at 31 December 2021, 80% of Eni’s proved hydrocarbon
reserves were located in non-OECD (Organisation for Economic
Co-operation and Development) countries, mainly in Africa,
where the socio-political framework, the financial system and
the macroeconomic outlook are less stable than in the OECD
countries. In those non-OECD countries, Eni is exposed to a
wide range of political risks and uncertainties, which may
impair Eni’s ability to continue operating economically on a
temporary or permanent basis, and Eni’s ability to access oil
and gas reserves. Particularly, Eni faces risks in connection
with the following potential issues and risks:
} socio-political
leading to
instability
internal conflicts,
revolutions, establishment of non-democratic regimes,
protests, attacks, and other forms of civil disorder and
unrest, such as strikes, riots, sabotage, acts of violence
and similar events. These risks could result in disruptions
to economic activity, loss of output, plant closures and
shutdowns, project delays, loss of assets and threats to
the security of personnel. They may disrupt financial and
commercial markets, including the supply of and pricing
for oil and natural gas, and generate greater political and
economic instability in some of the geographical areas
in which Eni operates. Additionally, any possible reprisals
because of military or other action, such as acts of
terrorism in Europe, the United States or elsewhere, could
have a material adverse effect on the world economy and
hence on the global demand for hydrocarbons;
} lack of well-established and reliable legal systems and
uncertainties surrounding the enforcement of contractual
rights;
} unfavourable enforcement of
laws, regulations and
to
for example,
contractual arrangements
expropriation, nationalisation or forced divestiture of
assets and unilateral cancellation or modification of
contractual terms;
leading,
} sovereign default or financial instability due to the fact
that those countries rely heavily on petroleum revenues
to sustain public finance and petroleum revenues have
materially contracted in 2020 due plunging hydrocarbons
prices as a consequence of the global economic crisis
caused by the COVID-19 pandemic. Financial difficulties
at country level often translate into failure by state-owned
companies and agencies to fulfil their financial obligations
towards Eni relating to funding capital commitments in
projects operated by Eni or to timely paying for supplies of
equity oil and gas volumes;
} restrictions on exploration, production,
imports and
exports;
Eni Annual Report 2021 } tax or royalty increases (including retroactive claims);
} difficulties
in finding qualified
suppliers in critical operating environments; and
international or
local
} complex processes of granting authorisations or licences
affecting time-to-market of certain development projects.
Areas where Eni operates and where the Company is
particularly exposed to political risk include, but are not
limited to Libya, Venezuela and Nigeria.
Eni’s operations in Libya are currently exposed to significant
geopolitical risks. The social and political instability of the
Country dates back to the revolution of 2011 that brought a
change of regime and a civil war, triggering an uninterrupted
period of lack of well-established institutions and recurrent
events of internal conflict, clashes, disorders and other
forms of civil turmoil and unrest between the two conflicting
factions. In the year of the revolution, Eni’s operations in Libya
were materially affected by a full-scale war, which forced
the Company to shut down its development and extractive
activities for almost all of 2011, with a significant negative
impact on the Group’s results of operation and cash flow. In
subsequent years, Eni has experienced frequent disruptions
to its operations, albeit on a smaller scale than in 2011, due
to security threats to its installations and personnel. The
situation begun to improve in September 2020, thanks to a
peace agreement between the conflicting factions, which
enabled full resumption of operations at all Libyan oilfields,
revoking force majeure declared at the start of 2020. In 2021,
Eni’s production in Libya amounted to 168 kboe/d and was
in line with management’s plans. Despite this, management
believes that Libya’s geopolitical situation will continue to
represent a source of risk and uncertainty to Eni’s operations in
the country and to the Group’s results of operations and cash
flow. Currently, Libyan production represents approximately
10% of the Group’s total production; this percentage is
forecasted to decrease in the medium-term in line with the
expected implementation of the Group’s strategy intended to
diversify the Group’s geographical presence to better balance
the geopolitical risk of the portfolio by expanding the Group’s
presence in the United Arabian Emirates and Norway.
Venezuela is currently experiencing a situation of financial
stress, which has been exacerbated by the economic
recession caused by the effects of the COVID-19 pandemic.
Lack of financial resources to support the development of
the country’s hydrocarbons reserves has negatively affected
the country’s production levels and hence fiscal revenues.
The situation has been made worse by certain international
sanctions targeting the country’s financial system and its
ability to export crude oil to U.S. markets, which is the main
outlet of Venezuelan production.
Currently, the Company retains only one asset in Venezuela: the
50%-participated Cardón IV joint venture, which is operating
135
an offshore natural gas field and is supplying its production
to the national oil company, Petroleos de Venezuela SA
(“PDVSA”), under a long-term supply agreement. PDVSA has
failed to pay regularly the receivables for the gas volumes
supplied by Cardón IV and consequently a significant amount
of overdue receivables is outstanding at the closing date of
the financial year 2021 and a credit loss provision has been
booked to reflect the counterparty risk. The Company incurred
in past years significant impairment losses and reserves de-
bookings at the other main project in Venezuela relating to
the PetroJunín onshore oilfield; the residual book value of
the property was completely written off in 2021 due to lack
of any prospects of economic returns. As at December 31,
2021, Eni’s invested capital in Venezuela was approximately
€1.3 billion, mainly relating to trade receivable owed to us
by PDVSA for the supplies of volumes of equity natural gas
produced by the Cardón IV joint venture. Due to a tightening
of the international sanction regime, during the course of
2021, Eni was unable to obtain any in-kind reimbursement of
its outstanding trade receivables owed by PDVSA.
The Group has significant credit exposure to state-owned and
privately-held local companies in Nigeria, where the financial
and economic outlook of the country has been made worse
by the contraction of petroleum revenues due to the crisis
of the oil sector in 2020 caused by the COVID-19 pandemic.
Eni’s credit exposure amounting to about €0.7 billion relates
to the funding of the share of capital expenditures pertaining
to Nigerian joint operators at Eni-operated oil projects. Eni
has incurred significant credit losses because of the ongoing
difficulties of Eni’s Nigerian counterparts to reimburse
amounts past due.
In Nigeria, the Oil Prospecting License 245 held by Eni expired
in May 2021 and a request is pending to convert the license
into an oil mining license to start reserve development before
the Nigerian authorities in charge. The management believes
the request of conversion complies with the contractual terms,
deadline, and any other applicable conditions. However, the
Nigerian authorities are holding back the approval. Eni has
started an arbitration before an ICSID court to preserve the
value of its asset.
Sanction targets
The most relevant sanction programs for Eni are those issued
by the European Union and the United States of America and
in particular, as of today, the restrictive measures adopted by
such authorities in respect of Russia and Venezuela.
In response to the Russia-Ukraine crisis of 2014 and again
to the Russia invasion of Ukraine of February 2022, the
European Union and the United States have enacted a
broad regime of sanctions targeting, inter alia, the financial
Management report | Consolidated financial statements | Annex 136
and energy sectors in Russia by restricting the supply of
certain oil and gas items and services to Russia and certain
forms of financing and the other measures described in the
risk factor on the Russia-Ukraine war above. In response
to these restrictions, the Company has put on hold its
projects in the upstream sectors in Russia in past years
and currently is not engaged in any Oil & Gas project in the
country. It is not possible to rule out the possibility that
wider sanctions targeting the Russian energy, banking and/
or finance industries be implemented. Further sanctions
imposed on Russia, Russian citizens or Russian companies
by the international community, such as restrictions on
purchases of Russian gas by European companies or
measures restricting dealings with Russian counterparties,
could adversely impact Eni’s business, results of operations
and cash flow given Eni’s exposure to natural gas supplies
from Russia as further described in the risk factor on the
Russia Ukraine war above. Furthermore, an escalation of
the international crisis, resulting in a tightening of sanctions,
could entail a significant disruption of energy supply and
trade flows globally, which could have a material adverse
effect on the Group’s business, financial conditions, results
of operations and prospects.
From 2017, the United States have enacted a regime of
economic and financial sanctions against Venezuela. The
scope of the restrictions, initially targeting certain financial
instruments issued or sold by the Government of Venezuela, was
gradually expanded over 2017 and 2018 and then significantly
broadened during the course of 2019 when PDVSA, the main
national state-owned enterprise, has been added to the
“Specially Designated Nationals and Blocked Persons List” and
the Venezuelan government and its controlled entities became
subject to assets freeze in the United States. Even if such U.S.
sanctions are substantially “primary” and therefore dedicated
in principle to U.S. persons only, retaliatory measures and other
adverse consequences may also interest foreign entities which
operate with Venezuelan listed entities and/or in the oil sector
of the country. The U.S. sanction regime against Venezuela has
been further tightened in the final part of 2020 by restricting
any Venezuelan oil exports, including swap schemes utilised
by foreign entities to recover trade and financing receivables
from PDVSA and other Venezuelan counterparties. This latter
tightening of the sanction regime has reduced the Group’s
ability to collect the trade receivable owed to Eni for its activity
in the country in the course of 2021.
Eni carefully evaluates on a case by case basis the adoption of
adequate measures to minimise its exposure to any sanctions
risk which may affect its business operation. In any case, the U.S.
sanctions add stress to the already complex financial, political
and operating outlook of the country, which could further limit
the ability of Eni to recover its investments in Venezuela.
2 RISKS SPECIFIC TO THE COMPANY’S GAS
BUSINESS IN ITALY
in
trends
Current, negative
the gas competitive
environment in Europe may impair the Company’s ability to
fulfil its minimum off-take obligations in connection with
its take-or-pay, long-term gas supply contracts
Eni is currently party to a few long-term gas supply
contracts with state-owned companies of key producing
countries, from where most of the gas supplies directed to
Europe are sourced via pipeline (Russia, Algeria, Libya and
Norway). These contracts which were intended to support
Eni’s sales plan in Italy and in other European markets,
provide take-or-pay clauses whereby the Company has an
obligation to lift minimum, pre-set volumes of gas in each
year of the contractual term or, in case of failure, to pay the
whole price, or a fraction of that price, up to a minimum
contractual quantity. Similar considerations apply to ship-
or-pay contractual obligations which arise from contracts
with pipeline owners, which the Company has entered
into to secure long-term transport capacity. Long-term
gas supply contracts with take-or-pay clauses expose the
Company to a volume risk, as the Company is obligated
to purchase an annual minimum volume of gas, or in case
of failure, to pay the underlying price. The structure of the
Company’s portfolio of gas supply contracts is a risk to the
profitability outlook of Eni’s wholesale gas business due
to the current competitive dynamics in the European gas
markets. In past downturns of the gas sector, the Company
incurred significant cash outflows in response to its take-
or-pay obligations. Furthermore, the Company’s wholesale
business
is exposed to volatile spreads between the
procurement costs of gas, which are linked to spot prices
at European hubs or to the price of crude oil, and the selling
prices of gas which are mainly indexed to spot prices at the
Italian hub.
Eni’s management is planning to continue its strategy
of renegotiating the Company’s
long-term gas supply
contracts in order to constantly align pricing terms to
current market conditions as they evolve and to obtain
greater operational flexibility to better manage the take-
or-pay obligations (volumes and delivery points among
others), considering the risk factors described above. The
revision clauses included in these contracts state the right
of each counterparty to renegotiate the economic terms
and other contractual conditions periodically, in relation to
ongoing changes in the gas scenario. Management believes
that the outcome of those renegotiations is uncertain in
respect of both the amount of the economic benefits that
will be ultimately obtained and the timing of recognition of
profit. Furthermore, in case Eni and the gas suppliers fail
to agree on revised contractual terms, both parties can
Eni Annual Report 2021 137
start an arbitration procedure to obtain revised contractual
conditions. All these possible developments within the
renegotiation process could increase the level of risks and
uncertainties relating the outcome of those renegotiations.
Risks associated with the regulatory powers entrusted
to the Italian Regulatory Authority for Energy, Networks
and Environment in the matter of pricing to residential
customers
Eni’s wholesale gas and retail gas and power businesses are
subject to regulatory risks mainly in Italy’s domestic market.
The Italian Regulatory Authority for Energy, Networks and
Environment (the “Authority”) is entrusted with certain
powers in the matter of natural gas and power pricing.
Specifically, the Authority retains a surveillance power on
pricing in the natural gas market in Italy and the power
to establish selling tariffs for the supply of natural gas to
residential and commercial users until the market is fully
opened. Developments in the regulatory framework intended
to increase the level of market liquidity or of deregulation or
intended to reduce operators’ ability to transfer to customers
cost increases in raw materials may negatively affect future
sales margins of gas and electricity, operating results
and cash flow. In the current environment characterized
by rising energy costs, it is increasingly possible that the
Authority may enact measures intended to put a cap on the
wholesale prices of natural gas and electricity or to reduce
the indexation of the cost of the raw materials in pricing
formulae applied by retail companies that market natural
gas and electricity to residential customers. Our GGP
business that engages in the wholesale marketing of natural
gas and our Plenitude subsidiary that engages in the retail
marketing of natural gas and electricity are exposed to this
regulatory risk.
3 RISKS RELATED TO ENVIRONMENTAL,
HEALTH AND SAFETY REGULATIONS AND
LEGAL RISKS
Eni has incurred in the past, and will continue incurring,
material operating expenses and expenditures, and is
exposed to business risk in relation to compliance with
applicable environmental, health and safety regulations
in future years, including compliance with any national
or international regulation on greenhouse gas (GHG)
emissions
Eni is subject to numerous European Union, international,
national, regional and local laws and regulations regarding
the impact of its operations on the environment and on health
and safety of employees, contractors, communities and
on the value of properties. Laws and regulations intended
to preserve the environment and to safeguard health and
safety of workers and communities are particularly strict
in the Company’s businesses due to their inherent nature
because of flammability and toxicity of hydrocarbons and
of objective risks of industrial processes to develop, extract,
refine and transport oil, gas and products. Generally, these
laws and regulations require acquisition of a permit before
drilling for hydrocarbons may commence, restrict the types,
quantities and concentration of various substances that
can be released into the environment in connection with
including
exploration, drilling and production activities,
refinery and petrochemical plant operations, limit or prohibit
drilling activities in certain protected areas, require to remove
and dismantle drilling platforms and other equipment and
well plug-in once oil and gas operations have terminated,
provide for measures to be taken to protect the safety of the
workplace, the health of employees, contractors and other
Company collaborators and of communities involved by the
Company’s activities, and impose criminal or civil liabilities
for polluting the environment or harming employees’ or
communities’ health and safety as result from the Group’s
operations. These laws and regulations control the emission
of scrap substances and pollutants, discipline the handling
of hazardous materials and set limits to or prohibit the
discharge of soil, water or groundwater contaminants,
emissions of toxic gases and other air pollutants or can
impose taxes on carbon dioxide emissions, as in the case
of the European Trading Scheme that requires the payment
of a tax for each tons of carbon dioxide emitted in the
environment above a pre-set allowance, resulting from the
operation of oil and natural gas extraction and processing
plants, petrochemical plants, refineries, service stations,
vessels, oil carriers, pipeline systems and other facilities
owned or operated by Eni.
In addition, Eni’s operations are subject to laws and regulations
relating to the production, handling, transportation, storage,
disposal and treatment of waste. Breaches of environmental,
health and safety laws and regulations as in the case of
negligent or wilful release of pollutants and contaminants
into the atmosphere, the soil, water or groundwater or
exceeding the concentration thresholds of contaminants
set by the law expose the Company to the incurrence of
liabilities associated with compensation for environmental,
health or safety damage and expenses for environmental
remediation and clean-up. Furthermore, in the case of
violation of certain rules regarding the safeguard of the
environment and the health of employees, contractors and
other collaborators of the Company, and of communities,
the Company may incur liabilities in connection with the
negligent or wilful violation of laws by its employees as per
Italian Law Decree no. 231/2001.
Environmental, health and safety laws and regulations have a
substantial impact on Eni’s operations. Management expects
Management report | Consolidated financial statements | Annex 138
that the Group will continue to incur significant amounts
of operating expenses and expenditures in the foreseeable
future to comply with laws and regulations and to safeguard
the environment and the health and safety of employees,
contractors and communities involved by the Company
operations, including:
} costs to prevent, control, eliminate or reduce certain
types of air and water emissions and handle waste and
other hazardous materials, including the costs incurred
in connection with government action to address climate
change (see the specific section below on climate-related
risks);
} remedial and clean-up measures related to environmental
contamination or accidents at various sites, including
those owned by third parties;
} damage compensation claimed by individuals and entities,
including local, regional or state administrations, should Eni
cause any kind of accident, oil spill, well blowouts, pollution,
contamination, emission of air pollutants and toxic gases
above permitted levels or of any other hazardous gases,
water, ground or air contaminants or pollutants, as a
result of its operations or if the Company is found guilty of
violating environmental laws and regulations; and
} costs
in connection with the decommissioning and
removal of drilling platforms and other facilities, and well
plugging at the end of Oil & Gas field production.
As a further consequence of any new laws and regulations
or other factors, like the actual or alleged occurrence of
environmental damage at Eni’s plants and facilities, the
Company may be forced to curtail, modify or cease certain
operations or implement temporary shutdowns of facilities.
If any of the risks set out above materialise, they could
adversely impact the Group’s results of operations, cash
flow, liquidity, business prospects, financial condition, and
shareholder returns, including dividends, the amount of funds
available for stock repurchases and the price of Eni’s shares.
Climate change-related risks
Increasing worldwide efforts to tackle climate change may
lead to the adoption of stricter regulations to curb carbon
emissions and this may end up suppressing demands for
our products in medium-to-long-term
Governments of the nations that have signed the 2015
COP 21 Paris Agreement have been advancing plans and
initiatives intended to transition the economy towards a low
carbon model in the long run to pursue the objective to limit
the temperature increase to 1.5°C above pre-industrial levels
and tackle risks of structural modifications to the Earth
climate, which would pose serious threat to life on the planet.
The scientific community has been sounding alarms over
the potential, catastrophic consequences caused by rising
global temperatures to the environment and has established
that the release in the atmosphere of carbon dioxide (CO2)
as a result of burning fossil fuels and other human activities
and the emissions of other harmful gases like methane are
the main drivers of climate change. The rising in frequency
and dangerousness of many extreme weather events
has been widely recognized as a direct consequence of
the climate change such as floods, drought, hurricanes,
heat waves, cold snaps, rising sea levels, fires and other
environmental mutations, which have been causing material
damage to economies, loss of human lives and destruction
of ecosystems and other negative impacts. The energy
transition, as well as increasingly stricter regulations in the
field of CO2 emission, could adversely and materially affect
demands for the Group’s products and hence our business,
results of operations and prospects.
The dramatic fallout of the COVID-19 pandemic on economic
activity and people’s lifestyle could have possibly accelerated
the evolution toward a low carbon model of development. This
is because many governments and the EU deployed massive
amounts of resources to help the economy recover and a large
part of this economic stimulus has been or is planned to be
directed to help transitioning the economy and the energy mix
towards a low carbon model, as in the case of the EU’s recovery
fund, which provides for huge investments in the sector of
renewable energies and the green economy, including large-
scale adoption of hydrogen as a new energy source.
Those risks may emerge in the short, medium and long-term.
Eni expects that the achievement of the Paris Agreement goal
of limiting the rise in temperature to well below 2°C above pre-
industrial levels in this century, or the more ambitious goal of
limiting global warming to 1.5°C, will strengthen the global
response to the issue of climate change and spur governments
to introduce measures and policies targeting the reduction of
GHG emissions, which are expected to bring about a gradual
reduction in the use of fossil fuels over the medium-to-long-
term, notably through the diversification of the energy mix,
likely reducing local demand for fossil fuels and negatively
affecting global demand for oil and natural gas.
Although the Company is investing a significant amount of
resources to develop decarbonized products and to grow
the generation capacity of renewable power and other low
and zero carbon technologies to produce power or absorb
carbon dioxide (CO2) from the atmosphere, the Group’s
financial performance and business prospects still depends
in a substantial way on the legacy business of Exploration
& Production. In case demands for hydrocarbons decline
rapidly due to widespread adoption of regulations, rules or
Eni Annual Report 2021 139
international treaties designed to reduce GHG emissions,
our results of operations and business prospects may be
significantly and negatively affected.
Eni expects its operating and compliance expenses to
increase in the short-term due to the likely growing adoption
of carbon tax mechanisms. Some governments have already
introduced carbon pricing schemes, which can be an effective
measure to reduce GHG emissions at the lowest overall cost
to society. Currently, about half of the direct GHG emissions
coming from Eni’s operated assets are included in national
or supranational Carbon Pricing Mechanisms, such as the
European Emission Trading Scheme (ETS), which provides
an obligation to purchase, on the open market, emission
allowances in case GHG emissions exceed a pre-set amount
of emission allowances allotted for free. In 2021 to comply
with this carbon emissions scheme, Eni purchased on the
open market allowances corresponding to 12.42 million
tonnes of CO2 emissions incurring expenses of around
€660 million, which were significantly higher than in 2020
due to expectations of lower allotment of free allowances
by the EU going forward and rising costs of the emissions
permits. Due to the likelihood of new regulations in this area
and expectations of a reduction in free allowances under the
European ETS and the likely adoption of similar schemes by a
rising number of governments, Eni is aware of the risk that a
growing share of the Group’s GHG emissions could be subject
to carbon-pricing and other forms of climate regulation in
the near future, leading to additional compliance and cost
obligations with respect to the release in the atmosphere
of carbon dioxide. In the future, we could incur increased
investments and significantly higher operating expenses in
case the Company is unable to reduce the carbon footprint of
its operations. Eni also expects that governments will require
companies to apply technical measures to reduce their GHG
emissions.
Our portfolio of Oil & Gas properties features a large weight
of natural gas, the least GHG-emitting fossil energy source.
As of December 31, 2021, natural gas proved reserves
represented approximately 51% of Eni’s total proved reserves
of its subsidiary undertakings and joint ventures. The other
constituencies of our portfolio of Oil & Gas properties which
are mitigating the risk of stranded assets are the large weight
of conventional projects, featuring low CO2 intensity and
the low Brent price of breakeven. We estimate our reserves
to have an average breakeven price of about 20 $/bbl (this
estimation includes our proved reserves and a certain
amount of unproved reserves), thus underpinning a rapid
pay-back period as about 90% of the net present value of
those reserves (corresponding to 78% of the underlying boe)
is estimated to be recovered by 2035 under the Eni pricing
scenario assumptions.
in risky areas; a focus on
The low breakeven price of our reserves has been driven
by our exploration and development model that features:
effective exploration concentrated on near-field and
proven/mature plays to leverage on existing infrastructures
and readily put new reserves into production; selected
low-complexity
exploration
developments; and a phased approach to putting reserves
into production featuring early production start-up and
subsequent ramp up to reduce the financial exposure of
development projects and accelerate the time-to-market
and the pay-back period. Based on those drivers, we have
gradually reduced the breakeven price of our reserves and
improved the resilience to low carbon scenarios, which
considering also the emissive profiles of our assets are
expected to mitigate the risk of stranded reserves going
forward. The risk of stranded assets might emerge in case
of a structural decline in hydrocarbons demands because
of stricter global environmental constraints and regulations
and changing consumers’ preferences resulting in trends
like the mass adoption of electric vehicles or a lower weight
of hydrocarbons in the energy mix, or regulatory constraints
like a global adoption of carbon pricing schemes.
regulatory
Eni’s portfolio exposure to this risk is reviewed annually
against changing GHG
regimes, evolving
consumers’ preferences, technological developments, and
physical conditions to identify emerging risks. To test the
resilience of new capital projects, Eni assesses potential
costs associated with GHG emissions and how projects’
returns may be affected. The development process and
internal authorization procedures of each E&P capital project
feature several checks that may require additional and well
detailed GHG and energy management plans to address
potential risks of underperformance in relation to possible
scenarios of global or regional adoption of regulations
introducing mechanisms of carbon cap and trade or
carbon pricing. These processes and internal authorization
hurdles can lead to projects being stopped, designs being
changed, and potential GHG mitigation investments being
identified, in preparation for when the economic conditions
imposed by new regulations would make these investments
commercially compelling.
Management stress-tested the recoverability of the book
values of the Company’s Oil & Gas assets under the
assumptions set forth in the IEA SDS WEO 2021 and also
the IEA Net Zero “NZE 2050” scenarios to evaluate the
reasonableness of the outcome of the impairment review
of those assets under the base case management scenario
as well as possible risks of stranded assets. Those stress
tests covered the whole of the Oil & Gas cash generating
units (CGUs) that are regularly tested for impairment in
accordance with IAS 36. The IEA SDS sets out an energy
Management report | Consolidated financial statements | Annex 140
pathway consistent with the goal of achieving universal
energy access by 2030 and of reducing energy-related
CO2 emissions and air pollution in line with the goals of
the Paris Agreement, which endorse effective action to
combat climate change by holding the rise in global average
temperature in this century to well below 2°C with respect to
the baseline before the Industrial Revolution and to pursuing
efforts to limit it to 1.5°C.
The NZE 2050 scenario draws a roadmap to achieve net zero
emissions by 2050 (i.e. twenty years earlier than the SDS
scenario) under the assumptions of an immediate stop to
new Oil & Gas projects, a 75% reduction in global demands
for oil by 2050 and a strong push towards electrification,
energy efficiency and radical modifications in consumers’
behavior and preferences, calling for robust and concerted
action by governments across the world.
In the table below, the outcome of the stress-test analysis is
reported. Eni’s estimations of the value in use of its Oil & Gas
assets are performed at the management’s oil price scenario
and by valuing proved reserves and certain amounts of unproved
reserves. The sensitivity analysis performed utilizing the NZE
2050 scenario does not include any cost revisions or rephasing
or rescheduling of developing activities. Further information is
disclosed in the notes to the financial statements.
Value in use of the O&G CGUs
Headroom vs. Carrying amounts
Assumption at 2050 in real terms USD 2020
Tax-deductible
CO2 charges
Non tax-deductible
CO2 charges
Brent price
European
gas price
Cost of
CO2
Eni's scenario
IEA SDS WEO 2021 scenario
IEA NZE 2050 scenario
~90%
76%
35%
(*) Prices relating to advanced/emerging economies.
-
75%
32%
46 $/bbl
6.2 $/mmBTU
CO2 costs projections in the EU/ETS
+ projections of forestry costs
50 $/bbl
4.5 $/mmBTU
200-95 per tonne of CO2*
24 $/bbl
3.6 $/mmBTU
250-55 per tonne of CO2*
In the long-term demands for hydrocarbons may be
materially reduced by the projected mass adoption of
electric vehicles, the development of green hydrogen, the
deployment of massive investments to grow renewable
energies also supported by governments fiscal policies
and the development of other technologies to produce
clean feedstock, fuels and energy
In the long-term, the role of hydrocarbons in satisfying a
large portion of the energy needs of the global economy
may be displaced by the emergence of new products and
technologies, as well as by changing consumers’ preferences.
The automotive industry is investing material amounts of
resources to upgrade its assembly line to ramp up production
of electric vehicles (EVs) and to boost the EVs line-up, with
R&D efforts focused on reducing the performance and cost
gap with the internal-combustion-engine cars and light-duty
vehicles, particularly by extending batteries range. The EV
market has attracted large amounts of venture capital and
financing, which have propelled the growth of an entirely
new batch of pure-EV players, which are introducing smart
EV models to gain consumers preference and market share,
fuelling continuing innovation in the sector and accelerating
the strategic shift of well-established car companies. Sales
of EVs have grown exponentially in 2021, also thanks to
fiscal incentives designed to increase the affordability of
EVs by middle and low-income households, and according
to market projections sales of EVs will surpass internal-
combustion-engine sales by 2030 also helped by proposed
measures to be introduced by states and local administration
to ban sales of new internal-combustion-engine cars. This
trend could disrupt in the long-term the consumption of
gasoline which is one of the main drivers of global crude
oil demand. Other potentially disruptive
technologies
designated to produce clean energy and fuels are emerging,
driven by the development of hydrogen-based solutions as
an energy vector or the utilization of renewables feedstock
to manufacture fuels and other goods replacing oil-based
products. Production of hydrogen by means of green
technologies will also reduce hydrocarbons demands. The
electricity generation from wind power or solar technologies
is projected to grow massively in line with the stated targets
by several governments and institutions like the EU, the USA
and the UK to decarbonize the electricity sector in the next
one or two decades, replacing gas-fired generation.
These trends could disrupt demand for hydrocarbons in the
future, with many forecasters, both within the industry, or
state agencies and independent observers predicting peak
oil demand in the next ten years or earlier; some operators
still consider 2019 as the peak year for oil demand.
Eni Annual Report 2021 A large portion of Eni’s business depends on the global
demand for oil and natural gas. If existing or future laws,
regulations, treaties, or international agreements related
to GHG and climate change, including state incentives
to conserve energy or use alternative energy sources,
in the field of renewable
technological breakthroughs
energies, hydrogen, production of nuclear energy or mass
adoption of electric vehicles trigger a structural decline in
worldwide demand for oil and natural gas, Eni’s results of
operations and business prospects may be materially and
adversely affected.
from
representatives
Supranational institutions, like the United Nations, civil
society and the scientific community are calling for
bold action to tackle climate change and this may lead
governments to take extraordinary measures to cut carbon
emissions
the civil
The United Nations,
society, some Non-Governmental Organizations (“NGO”),
institutions and the scientific community
international
have become
increasingly vocal about the dramatic
consequences of climate change for the life on the planet,
warning about irreversible damages to the ecosystem and
calling for drastic and immediate actions by governments
to tackle the emergency. In a report issued on May 18, 2021
the International Energy Agency has claimed that to reach
net-zero GHG emissions by 2050 and commitments set out
in the Paris Agreement, there must be an immediate ban
on investments in new oil and gas projects. In response to
those requests for intervention, it is possible that certain
governments in jurisdictions where we operate may deny
permissions to start new oil and gas projects or may impose
further restrictions on drilling and other field activities
or ban Oil & Gas operations altogether. These possible
developments could significantly and negatively affect our
business’s prospects and results of operations.
We are exposed to growing legal risks in connection with
the hundreds of lawsuits pending in various jurisdictions
against Oil & Gas companies claiming compensation
for damages associated with climate change or other
restrictive measures
In May 2021, a Dutch court ordered Royal Dutch Shell
Plc to reduce its greenhouse gas emissions by a certain
amount by 2030 upholding requests of the claimants Dutch
environmentalist associations, arguing that the Company
had violated human rights and an unwritten principle of
duty of care towards the environment. This sentence could
pave the way for additional lawsuits against Oil & Gas
companies or influence the outcome of already pending
similar proceedings.
In some countries, governments, regulators, organizations,
141
NGOs and individuals have filed lawsuits seeking to hold Oil
& Gas companies liable for costs associated with climate
change. For example, we are defending in California against
claims of damage compensation from local administrations
and certain associations of individuals in connection with
alleged consequences of climate change which could have
disrupted economic activities and caused damage to the
environment.
risks
that governments,
regulators,
There are also
organizations, NGOs and individuals may sue us for alleged
crimes against the environment in connection with past and
present GHG emissions related to our operations and the
use of the products we have manufactured.
In case the Company is condemned to reduce its GHG
emissions at a much faster rate than planned by management
or to compensate for damage related to climate change as a
result of these ongoing or potential lawsuits, we could incur
a material adverse effect on our results of operations and
business’s prospects.
Asset managers, banks and other financing institutions
have been increasingly adopting ESG criteria in their
investment and financing decisions and this could reduce
the attractiveness of our share or limit our ability to access
the capital markets
Many professional investors like asset managers, mutual
funds, global allocation funds, generalist investors and
pensions funds have been reducing their exposure to
the fossil fuel industry due to the adoption of stricter
ESG criteria in selecting investing opportunities. In some
cases, those funds have adopted climate change targets in
determining their policies of asset allocations. Many of them
have announced plans to completely divest from the fossil
fuel industry. This trend could reduce the market for our
share and negatively affect shareholders’ returns. Likewise,
professional investors, banks, financing institutions and
also insurance companies are cutting exposure to the fossil
fuel industry due to the need to comply with ESG mandate
or to reach emission reduction targets in their portfolios
and this could limit our ability to access new financing,
could drive a rise in borrowing costs to us or increase the
costs of insuring our assets. During COP 26 at Glasgow
(UK), 450 financial institutions, mostly banks and pension
funds, in 45 countries with assets estimated at $130 trillion
have committed to limiting greenhouse gas emissions in
their portfolios. The finance pledge, known as the Glasgow
Financial Alliance for Net Zero (GFANZ), will mean that by
2050 all the assets under management by the institutions
that signed on can be counted toward a net-zero emission
pathway. However, this pledge does not preclude the
continued funding of fossil fuels for the foreseeable future.
Management report | Consolidated financial statements | Annex 142
As a result of these trends we expect the cost of capital to
the Company to rise in the future and less ability on part
of Eni to obtain financing for future projects or to obtain
it at competitive rates, which may reduce our investment
opportunities or drive an increase in financing expenses,
negatively affecting our results of operations and business
prospects.
Activist shareholders have been increasingly pressuring
Oil & Gas companies to accelerate the shift to renewable
energies and to reduce CO2 emissions and this may
interfere with management’s plans and lead to sub-optimal
investment decisions
In 2021, activist shareholders succeeded in passing a non-
binding shareholders resolution to force Chevron into cutting
its carbon emissions, including those relating to the products
the company sells to its customers. Similar resolutions were
also approved at other U.S. Oil & Gas companies.
Meanwhile, an activist hedge fund conducted a successful
proxy fight at ExxonMobil and won a few seats in its board
of directors. This will likely lead to greater scrutiny of the
company strategies and capital allocation plans by the
board.
These events underscore the growing pressure from investors
and capital markets on Oil & Gas companies towards a future
based on renewables energies and an acceleration in the
phase-out of investments into fossil fuels. We believe that our
company is exposed to that kind of risk.
Extreme weather phenomena, which has been widely
recognized as a direct consequence of climate change,
may disrupt our operations
The scientific community has concluded that increasing
global average temperature produces significant physical
effects, such as the increased frequency and severity of
hurricanes, storms, droughts, floods, or other extreme
climatic events that could interfere with Eni’s operations and
damage Eni’s facilities. Extreme and unpredictable weather
in material disruption to Eni’s
phenomena can result
operations, and consequent loss of or damage to properties
and facilities, as well as a loss of output, loss of revenues,
increasing maintenance and repair expenses and cash flow
shortfall.
We are exposed to reputational risks in connection with
the public perception of Oil & Gas companies as entities
primarily responsible for the climate change
There is a reputational risk linked to the fact that oil
companies are increasingly perceived by governments,
financial institutions and the general public as entities
to
primarily
for global warming due
responsible
GHG emissions across the hydrocarbon value chain,
particularly related to the use of energy products, and
as poorly-performing players alongside ESG dimensions.
This could possibly impair the company reputation and
the social license to operate. This could also make Eni’s
shares and debt instruments less attractive to banks,
funds and individual investors who have been increasingly
applying ESG criteria and have been growing cautions in
assessing the risk profile of oil and gas companies due
to their carbon footprint when making investment and
lending decisions.
As a result of these trends, climate-related risks could have
a material and adverse effect on the Group’s results of
operations, cash flow, liquidity, business prospects, financial
condition, and shareholder returns, including dividends, the
amount of funds available for stock repurchases and the
price of Eni’s shares.
Eni is exposed to the risk of material environmental
liabilities in addition to the provisions already accrued in
the consolidated financial statement
Eni has incurred in the past and may incur in the future
material environmental liabilities in connection with the
environmental impact of its past and present industrial
activities. Eni is also exposed to claims under environmental
requirements and, from time to time, such claims have been
made against it. Furthermore, environmental regulations
in Italy and elsewhere typically impose strict liability. Strict
liability means that in some situations Eni could be exposed
to liability for clean-up and remediation costs, environmental
damage, and other damages as a result of Eni’s conduct of
operations that was lawful at the time it occurred or of the
conduct of prior operators or other third parties. In addition,
plaintiffs may seek to obtain compensation for damage
resulting from events of contamination and pollution or
in case the Company is found liable for violations of any
environmental laws or regulations. In Italy, Eni is exposed
to the risk of expenses and environmental liabilities in
connection with the impact of its past activities at certain
industrial hubs where the Group’s products were produced,
processed, stored, distributed or sold, such as chemical
plants, mineral-metallurgic plants, refineries and other
facilities, which were subsequently disposed of, liquidated,
closed or shut down. At these industrial hubs, Eni has
initiatives to remediate and clean
undertaken several
up proprietary or concession areas that were allegedly
contaminated and polluted by the Group’s
industrial
activities. State or local public administrations have sued
Eni for environmental and other damages and for clean-
up and remediation measures in addition to those which
were performed by the Company, or which the Company
has committed to performing. In some cases, Eni has been
sued for alleged breach of criminal laws (for example for
Eni Annual Report 2021 143
liabilities
alleged environmental crimes such as failure to perform
soil or groundwater reclamation, environmental disaster
and contamination, discharge of toxic materials, amongst
others). Although Eni believes that it may not be held liable
for having exceeded in the past pollution thresholds that are
unlawful according to current regulations but were allowed
by laws then effective, or because the Group took over
operations from third parties, it cannot be excluded that Eni
could potentially incur such environmental liabilities. Eni’s
financial statements account for provisions relating to the
costs to be incurred with respect to clean ups and remediation
of contaminated areas and groundwater for which legal or
constructive obligations exist and the associated costs can
be reasonably estimated in a reliable manner, regardless
of any previous liability attributable to other parties. The
accrued amounts represent management’s best estimates
of the Company’s existing liabilities. Management believes
that it is possible that in the future Eni may incur significant
or material environmental expenses and
in
addition to the amounts already accrued due to: (i) the
likelihood of as yet unknown contamination; (ii) the results
of ongoing surveys or surveys to be carried out on the
environmental status of certain Eni’s industrial sites as
required by the applicable regulations on contaminated
sites; (iii) unfavourable developments in ongoing litigation
on the environmental status of certain of the Company’s
sites where a number of public administrations, the Italian
Ministry of the Environment or third parties are claiming
compensation for environmental or other damages such
as damages to people’s health and loss of property value;
(iv) the possibility that new litigation might arise; (v) the
probability that new and stricter environmental laws might
be implemented; and (vi) the circumstance that the extent
and cost of environmental restoration and remediation
programs are often inherently difficult to estimate leading
to underestimation of the future costs of remediation and
restoration, as well as unforeseen adverse developments
both in the final remediation costs and with respect to the
final liability allocation among the various parties involved at
the sites. As a result of these risks, environmental liabilities
could be substantial and could have a material adverse effect
on the Group’s results of operations, cash flow, liquidity,
business prospects, financial condition, and shareholder
returns, including dividends, the amount of funds available
for stock repurchases and the price of Eni’s shares.
Risks related to legal proceedings and compliance with
anti-corruption legislation
Eni is the defendant in a number of civil and criminal actions
and administrative proceedings. In future years Eni may
incur significant losses due to: (i) uncertainty regarding the
final outcome of each proceeding; (ii) the occurrence of
new developments that management could not take into
consideration when evaluating the likely outcome of each
proceeding in order to accrue the risk provisions as of the
date of the latest financial statements or to judge a negative
outcome only as possible or to conclude that a contingency
loss could not be estimated reliably; (iii) the emergence of
new evidence and information; and (iv) underestimation of
probable future losses due to circumstances that are often
inherently difficult to estimate. Certain legal proceedings and
investigations in which Eni or its subsidiaries or its officers
and employees are defendants involve the alleged breach
of anti-bribery and anti-corruption laws and regulations and
other ethical misconduct. Such proceedings are described
in the notes to the condensed consolidated interim financial
statements, under the heading “Legal Proceedings”. Ethical
misconduct and noncompliance with applicable laws and
regulations, including noncompliance with anti-bribery and
anti-corruption laws, by Eni, its officers and employees, its
partners, agents or others that act on the Group’s behalf,
could expose Eni and its employees to criminal and civil
penalties and could be damaging to Eni’s reputation and
shareholder value.
4 INTERNAL CONTROL RISKS
Risks from acquisitions
Eni is constantly monitoring the oil and gas market in search
of opportunities to acquire individual assets or companies
with a view of achieving its growth targets or complementing
its asset portfolio. Acquisitions entail an execution risk – the
risk that the acquirer will not be able to effectively integrate
the purchased assets so as to achieve expected synergies.
In addition, acquisitions entail a financial risk – the risk of not
being able to recover the purchase costs of acquired assets,
in case a prolonged decline in the market prices of oil and
natural gas occurs. Eni may also incur unanticipated costs
or assume unexpected liabilities and losses in connection
with companies or assets it acquires. If the integration and
financial risks related to acquisitions materialise, expected
synergies from acquisition may fall short of management’s
targets and Eni’s financial performance and shareholders’
returns may be adversely affected.
Eni’s crisis management systems may be ineffective
Eni has developed contingency plans to continue or recover
operations following a disruption or incident. An inability to
restore or replace critical capacity to an agreed level within
an agreed period could prolong the impact of any disruption
and could severely affect business, operations and financial
results. Eni has crisis management plans and the capability
to deal with emergencies at every level of its operations. If Eni
does not respond or is not seen to respond in an appropriate
manner to either an external or internal crisis, this could
Management report | Consolidated financial statements | Annex 144
adversely impact the Group’s results of operations, cash
flow, liquidity, business prospects, financial condition, and
shareholder returns, including dividends, the amount of funds
available for stock repurchases and the price of Eni’s shares.
Disruption to or breaches of Eni’s critical IT services or
digital infrastructure and security systems could adversely
affect the Group’s business, increase costs and damage
Eni’s reputation
The Group’s activities depend heavily on the reliability and
security of its information technology (IT) systems and digital
security. The Group’s IT systems, some of which are managed by
third parties, are susceptible to being compromised, damaged,
disrupted or shutdown due to failures during the process of
upgrading or replacing software, databases or components,
power or network outages, hardware failures, cyber-attacks
(viruses, computer intrusions), user errors or natural disasters.
The cyber threat is constantly evolving. The oil and gas
industry is subject to fast-evolving risks from cyber threat
actors, including nation states, criminals, terrorists, hacktivists
and insiders. Attacks are becoming more sophisticated with
regularly renewed techniques while the digital transformation
amplifies exposure to these cyber threats. The adoption of
new technologies, such as the Internet of Things (IoT) or the
migration to the cloud, as well as the evolution of architectures
for increasingly interconnected systems, are all areas where
cyber security is a very important issue. The Group and its
service providers may not be able to prevent third parties from
breaking into the Group’s IT systems, disrupting business
operations or communications infrastructure through denial-
of-service attacks, or gaining access to confidential or
sensitive information held in the system. The Group, like many
companies, has been and expects to continue to be the target
of attempted cybersecurity attacks. While the Group has not
experienced any such attack that has had a material impact
on its business, the Group cannot guarantee that its security
measures will be sufficient to prevent a material disruption,
breach or compromise in the future. As a result, the Group’s
activities and assets could sustain serious damage, services
to clients could be interrupted, material intellectual property
could be divulged and, in some cases, personal injury, property
damage, environmental harm and regulatory violations could
occur. If any of the risks set out above materialise, they could
adversely impact the Group’s results of operations, cash
flow, liquidity, business prospects, financial condition, and
shareholder returns, including dividends, the amount of funds
available for stock repurchases and the price of Eni’s share.
Violations of data protection laws carry fines and expose
the Company and/or its employees to criminal sanctions
and civil suits
Data protection laws and regulations apply to Eni and its joint
ventures and associates in the vast majority of countries
in which they do business. The General Data Protection
Regulation (EU) 2016/679 (GDPR) came into effect in May
2018 and increased penalties up to a maximum of 4% of
global annual turnover for breach of the regulation. The
GDPR requires mandatory breach notification, a standard
also followed outside of the EU (particularly in Asia). Non-
compliance with data protection laws could expose Eni
to regulatory investigations, which could result in fines
and penalties as well as harm the Company’s reputation.
In addition to imposing fines, regulators may also issue
orders to stop processing personal data, which could
disrupt operations. The Company could also be subject
to
from persons or corporations allegedly
affected by data protection violations. Violation of data
protection laws is a criminal offence in some countries, and
individuals can be imprisoned or fined. If any of the risks
set out above materialise, they could adversely impact the
Group’s results of operations, cash flow, liquidity, business
prospects, financial condition, and shareholder returns,
including dividends, the amount of funds available for stock
repurchases and the price of Eni’s shares.
litigation
5 RISKS RELATED TO FINANCIAL MATTERS
Exposure to financial risk - Eni is exposed to treasury and
trading risks, including liquidity risk, interest rate risk,
foreign exchange risk, commodity price risk and credit
risk and may incur substantial losses in connection with
those risks
Eni’s business is exposed to the risk that changes in interest
rates, foreign exchange rates or the prices of crude oil,
natural gas, LNG, refined products, chemical feedstocks,
power and carbon emission rights will adversely affect the
value of assets, liabilities or expected future cash flows.
its exposure to volatile
The Group does not hedge
hydrocarbons prices in its business of developing and
extracting hydrocarbons reserves and other types of
commodity exposures (e.g. exposure to the volatility
of refining margins and of certain portions of the gas
long-term supply portfolio) except for specific markets
or business conditions. The Group has established risk
management procedures and enters derivatives commodity
contracts to hedge exposure to the commodity risk relating
to commercial activities, which derives from different
indexation formulas between purchase and selling prices
of commodities. However, hedging may not function as
expected. In addition, Eni undertakes commodity trading
to optimise commercial margins or with a view of profiting
from expected movements in market prices. Although
Eni believes it has established sound risk management
procedures to monitor and control commodity trading, this
Eni Annual Report 2021 145
activity involves elements of forecasting and Eni is exposed
to the risks of incurring significant losses if prices develop
contrary to management expectations and of default of
counterparties.
Eni is exposed to the risks of unfavourable movements
in exchange rates primarily because Eni’s consolidated
financial statements are prepared in Euros, whereas Eni’s
main subsidiaries in the Exploration & Production sector
are utilising the U.S. dollar as their functional currency. This
translation risk is normally unhedged.
Furthermore, Eni’s euro-denominated subsidiaries
incur
revenues and expenses in currencies other than the euro
or are otherwise exposed to currency fluctuations because
prices of oil, natural gas and refined products generally are
denominated in, or linked to, the U.S. dollar, while a significant
portion of Eni’s expenses are incurred in euros and because
movements in exchange rates may negatively affect the fair
value of assets and liabilities denominated in currencies
other than the euro. Therefore, movements in the U.S. dollar
(or other foreign currencies) exchange rate versus the euro
affect results of operations and cash flows and year-on-
year comparability of the performance. These exposures
are normally pooled at Group level and net exposures to
exchange rate volatility are netted on the marketplace using
derivative transactions. However, the effectiveness of such
hedging activity is uncertain, and the Company may incur
losses also of significant amounts. As a rule of thumb, a
depreciation of the U.S. dollar against the euro generally has
an adverse impact on Eni’s results of operations and liquidity
because it reduces booked revenues by an amount greater
than the decrease in U.S. dollar-denominated expenses and
may also result in significant translation adjustments that
impact Eni’s shareholders’ equity.
Eni is exposed to fluctuations in interest rates that may affect
the fair value of Eni’s financial assets and liabilities as well
as the amount of finance expense recorded through profit.
Eni enters into derivative transactions with the purpose of
minimising its exposure to the interest rate risk.
a timely manner or meet their performance obligations
under contractual arrangements. These events could cause
the Company to recognise loss provisions with respect to
amounts owed to it by debtors of the Company. In recent
years, the Group has experienced a significant level of
counterparty default due to the severity of the economic
and financial downturn that has negatively affected several
Group counterparties, customers and partners and to the
fact that Italy, which is still the largest market to Eni’s gas
wholesale and retail businesses, has underperformed other
OECD countries in terms of GDP growth. Those trends have
been aggravated by the 2020 economic crisis triggered
by the COVID-19 pandemic, resulting in a significantly
deteriorated credit and financial profile of many of Eni’s
counterparties, including joint operators and national oil
companies in Eni’s upstream projects, retail customers
in the gas retail business and other industrial accounts.
In 2021, the enduring effects of the pandemic and, in the
final months of 2021 the significant rise in the volatility of
energy markets have weighed significantly on the capacity
of certain of Eni’s customers, joint operators or state-owned
companies to fulfil payments obligations towards the
Company.
Eni believes that the management of doubtful accounts
in the post pandemic environment and in a scenario
featured by greater commodity volatility represents a risk
to the Company, which will require management focus
and commitment going forward. Eni cannot exclude the
recognition of significant provisions for doubtful accounts in
future reporting periods. Management is closely monitoring
exposure to the counterparty risk in its Exploration &
Production business due to the magnitude of the exposure at
risk and to the long-lasting effects of the oil price downturn
on its industrial partners. Also the retail Gas & Power
business managed by Plenitude is particularly exposed to
credit risk due to its large and diversified customer base,
which includes a large number of medium and small-sized
businesses and retail customers whose financial condition
could deteriorate in case the Italian recovery is weaker than
anticipated.
Eni’s credit ratings are potentially exposed to risk from
possible reductions of sovereign credit rating of Italy. On
the basis of the methodologies used by Standard & Poor’s
and Moody’s, a potential downgrade of Italy’s credit rating
may have a potential knock-on effect on the credit rating of
Italian issuers such as Eni and make it more likely that the
credit rating of the debt instruments issued by the Company
could be downgraded.
Eni is exposed to credit risk. Eni’s counterparties could
default, could be unable to pay the amounts owed to it in
If any of the risks set out above materialises, this could
adversely impact the Group’s results of operations, cash
flow, liquidity, business prospects, financial condition, and
shareholder returns, including dividends, the amount of
funds available for stock repurchases and the price of Eni’s
shares.
Liquidity risk
Liquidity risk is the risk that suitable sources of funding
for the Group may not be available, or that the Group is
unable to sell its assets on the marketplace to meet short-
Management report | Consolidated financial statements | Annex 146
term financial requirements and to settle obligations. Such
a situation would negatively affect the Group’s results of
operations and cash flows as it would result in Eni incurring
higher borrowing expenses to meet its obligations or, under
the worst conditions, the inability of Eni to continue as a going
concern. Global financial markets are volatile due to several
macroeconomic risk factors, including the fiscal outlook of
the hydrocarbons-producing countries. In case new restrictive
measures in response to a resurgence of the pandemic or
the war in Ukraine lead to a double-dip in economic activity
and energy demand, in the event of extended periods of
constraints in the financial markets, or if Eni is unable to
access the financial markets (including cases where this is
due to Eni’s financial position or market sentiment as to Eni’s
prospects) at a time when cash flows from Eni’s business
operations may be under pressure, the Company may incur
significantly higher borrowing costs than in the past or
difficulties obtaining the necessary financial resources to fund
Eni’s development plans, therefore jeopardising Eni’s ability to
maintain long-term investment programs. Low investments
to develop Eni’s reserves may significantly and negatively
affect Eni’s business prospects, results of operations and
cash flows, and may impact shareholder returns, including
dividends or share price.
Eni Annual Report 2021 Outlook
147
For the main business and economic-financial evolutions
please refer to the following sections: Strategy, Financial
Review (Possible evolution in respect of the war in Ukraine) and
Risk factor and uncertainties.
Management report | Consolidated financial statements | Annex Eni's 2021 Consolidated
Disclosure of Non-Financial
Information (NFI) has been
drafted in accordance with
Legislative Decree 254/2016
and the “Sustainability
Reporting Standards"
published by the Global
Reporting Initiative (GRI).
Consolidated Disclosure of
Non-Financial Information
pursuant to Legislative Decree 254/2016
Eni's 2021 Consolidated Disclosure of Non-Financial Information (NFI) has been drafted in
accordance with Legislative Decree 254/2016 and the “Sustainability Reporting Standards"
published by the Global Reporting Initiative (GRI1) as indicated in the chapter "Reporting
Principles and Criteria". In 2021, the reporting obligations provided for in Article 8 of EU
Regulation 852/2020 entered into force as defined and coded in the relevant Commission
Disclosures Delegated Act, relating to economic activities and assets eligible for the purposes
of achieving the objectives of the Climate Change Mitigation and Adaptation Regulation.
These disclosure requirements apply to companies listed on regulated EU markets that are
required to draw up an NFS. In continuity with previous editions, the document is structured
according to the three levers of the integrated business model, Carbon Neutrality by 2050,
Operational Excellence and Alliances for Development, which aim to create long-term value
for all stakeholders. The contents of the “Carbon neutrality by 2050” chapter have been
organized according to the voluntary recommendations of the Task Force on Climate-related
Financial Disclosures (TCFD) of the Financial Stability Board, of which Eni has been a member
since its foundation, in order to provide even clearer and more in-depth disclosure on these
issues. In addition, the main United Nations Sustainable Development Goals (SDGs), that
constitute an important reference for Eni in the conduct of its activities, have been mentioned
in the various chapters.
The NFI is included in the Management Report in the Annual Report, to meet the information
needs of Eni stakeholders in a clear and concise manner, further favouring the integrated
disclosure of financial and non-financial information. In order to avoid duplication of
information and ensure that disclosures are as concise as possible, the NFI provides integrated
disclosures, which may include references to other sections of the Management Report, the
Corporate Governance and Shareholding Structure Report and the Report on remuneration
policy and remuneration paid, when the issues required by Legislative Decree 254/2016 are
already contained therein or for further details. Specifically, the Management Report describes
the Eni business model and governance, the main results and targets, the integrated risk
management system and the risk and uncertainty factors in which the main risks, possible
impacts and treatment actions are detailed, in line with the disclosure requirements of Italian
regulations. The NFI contains detailed information on corporate policies, management and
organizational models, an in-depth analysis of ESG (Environmental, Social and Governance)
risks, the strategy on the topics covered, the most important initiatives of the year, the main
performances with related comments and the 2021 materiality analysis. In the 2021 NFI, the
"core" metrics defined by the World Economic Forum2 (WEF) were also included in the 2020
White Paper "Measuring Stakeholder Capitalism - Towards Common Metrics and Consistent
Reporting of Sustainable Value Creation".
As in previous years, on the occasion of the Shareholders’ Meeting, Eni will also publish Eni
for, the voluntary sustainability report that aims to further enhance non-financial information.
The 2021 edition of Eni for will also include the annex "Carbon neutrality by 2050" and a report
dedicated to human rights (Eni for – Human Rights3). Below is a reconciliation table showing
the information content required by the Decree, the areas and relative positioning in the NFI,
the Management Report, the Corporate Governance and Shareholding Structure Report and
the Report on remuneration policy and remuneration paid.
(1) For further details, reference is made to the paragraph: “Reporting Principles and Criteria”.
(2) The reconciliation with the WEF core metrics is directly shown in the Content Index in a dedicated column.
(3) The update of the Eni for Human Rights report will be published subsequent to Eni for.
Eni Annual Report 2021
Y
T
I
L
A
R
T
U
E
N
N
O
B
R
A
C
0
5
0
2
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I
SCOPE OF
LEGISLATIVE
DECREE 254/2016
CROSS-
REFERENCES
TO ALL SCOPES
OF THE DECREE
CORPORATE MANAGEMENT
MODEL AND GOVERNANCE
POLICIES
APPLIED
RISK
MANAGEMENT MODEL
PERFORMANCE
INDICATORS
149
CGR
- Principles and
values. The Code of
Ethics; Eni Regulatory
System.
NFI - Management and organization
models, pp. 154-155; Sustainability
material topics, p. 191
AR
- Business model, pp. 4-5;
Responsible and Sustainable Approach,
pp. 6-7; Stakeholder engagement
activities, pp. 20-21; Strategy, pp. 22-27;
Governance, pp. 34-43.
CGR - Responsible and Sustainable
Approach; Corporate Governance
Model; Board of Directors; Board
Committees; Board of Statutory
Auditors; Model 231.
AR
-
Integrated Risk
Management, pp. 28-
33; Risk
factors and
uncertainties, pp. 122-146
AR - Responsible and
approach
sustainable
(2021
and
results
targets), pp. 6-7; Eni at a
glance, pp. 16-19
CLIMATE
CHANGE
Art. 3.2,
paragraphs a)
and b)
NFI - Carbon neutrality by 2050, pp.
158-164
AR - Strategy, pp. 22-27
CGR - Responsible and Sustainable
Approach
NFI - Main regulatory
tools, guidelines and ma-
nagement models related
to the scopes of Legisla-
tive Decree 254/2016, pp.
152-153
NFI - Main ESG risks and
related mitigation
the
actions pp. 156-157
AR - Responsible and
Sustainable Approach,
pp. 6-7
NFI - Carbon neutrality
by 2050, pp. 158-164
PEOPLE
Art. 3.2,
paragraphs c)
and d)
AR - Governance, pp. 34-43
NFI - People (employment, diversity
and inclusion, training, industrial rela-
tions, welfare and work-life balance, he-
alth), pp. 165-170; Safety, pp. 171-172
NFI - Main regulatory to-
ols, guidelines and mana-
gement models related to
the scopes of Legislative
Decree 254/2016, p. 152-
153
RESPECT
FOR THE
ENVIRONMENT
Art. 3.2, paragraphs
a), b) and c)
NFI - Respect for the environment
(circular economy, air, waste, water, oil
spills, biodiversity), pp. 172-178
HUMAN RIGHTS
Art. 3.2 paragraph
e)
NFI - Human Rights (security, training,
whistleblowing), pp. 178-181
CGR - Responsible and Sustainable
Approach
SUPPLIERS
Art. 3.1
paragraph c)
NFI - Human Rights, pp. 178-181; Sup-
pliers, pp. 182-183
NFI
- Main
guidelines
regulatory
and
models
the scopes
Legislative Decree
tools,
management
related
of
254/2016, pp. 152-153
to
NFI
- Main
regulatory
tools, guidelines and ma-
nagement models related
to the scopes of Legisla-
tive Decree 254/2016, pp.
152-153
NFI
- Main
regulatory
tools, guidelines and ma-
nagement models related
to the scopes of Legisla-
tive Decree 254/2016, pp.
152-153
NFI - Transparency, anti-corruption
and tax strategy, pp. 183-185
NFI - Alliances for development, pp.
186-187
TRANSPARENCY,
ANTI-
CORRUPTION
AND TAX
STRATEGY
Art. 3.2
paragraph f)
COMMUNITIES
Art. 3.2
paragraph d)
T LOCAL
N
E
M
P
O
L
E
V
E
D
R
O
F
S
E
C
N
A
I
L
L
A
NFI
- Main
regulatory
tools, guidelines and ma-
nagement models related
to the scopes of Legisla-
tive Decree 254/2016, pp.
152-153
CGR - Principles and
values. The Code of
Ethics; Anti-Corruption
Compliance Program
NFI
- Main
regulatory
tools, guidelines and ma-
nagement models related
to the scopes of Legisla-
tive Decree 254/2016, pp.
152-153
NFI - Main ESG risks and
related mitigation
the
actions pp. 156-157
AR - Responsible and
Sustainable Approach,
pp. 6-7
NFI - People, pp. 165-170;
Safety, pp. 171-172
RR
- Executive Sum-
mary
NFI - Main ESG risks and
related mitigation
the
actions pp. 156-157
AR - Responsible and
Sustainable Approach,
pp. 6-7
NFI - Respect for the en-
vironment, pp. 172-178
NFI - Main ESG risks and
related mitigation
the
actions pp. 156-157
AR - Responsible and
Sustainable Approach,
pp. 6-7
NFI - Human Rights, pp.
178-181
NFI - Main ESG risks and
related mitigation
the
actions pp. 156-157
AR - AR - Responsible
and Sustainable Appro-
ach, pp. 6-7
NFI - Human Rights, pp.
178-181; Suppliers, pp.
182-183
NFI - Main ESG risks and
related mitigation
the
actions pp. 156-157
AR - Responsible and
Sustainable Approach,
pp. 6-7
NFI
- Transparency,
anti-corruption and tax
strategy, pp. 183-185
NFI - Main ESG risks and
related mitigation
the
actions pp. 156-157
AR - Responsible and
Sustainable Approach,
pp. 6-7
NFI - Alliances for deve-
lopment, pp. 186-187
AR Annual Report 2021
CGR Corporate Governance and Shareholding Structure Report 2021
RR Report on remuneration policy and remuneration paid 2022
Sections/paragraphs providing the disclosures required by the Decree
Sections/paragraphs to which reference should be made for further details
Management report | Consolidated financial statements | Annex
150
The company mission and commitment to a Just Transition
The mission organically integrates the 17 SDGs to which Eni
intends to contribute, aware that business development can no
longer be separated from these. This cultural change constitues
a continous drive towards continuous innovation, respect and
promotion of human rights, considering diversity as a resource,
integrity in business management and environmental protection.
The mission confirms Eni's commitment to a Just Transition to
guarantee access to efficient and sustainable energy by achieving
the goal of net- zero emissions by 2050, with a view to sharing
social and economic benefits with workers, the value chain,
communities and customers in an inclusive, transparent and
socially equitable manner, taking into consideration the different
level of development of the countries in which it operates,
minimising existing inequalities. In addition, to contribute to the
achievement of the SDGs and to the growth of the countries in
which it operates, Eni is committed to building alliances with
national and international development cooperation actors, as
underlined by the Third International Conference on Investment
Financing for Development, organized by the United Nations
in Addis Ababa in July 2015. The approach highlighted by the
mission is also confirmed by the application from January 1st,
2021 of the 2020 Corporate Governance Code, which identifies
"sustainable success” as the objective that must guide the
action of the board of directors and consists of creating long-
term value for the benefit of shareholders, taking into account
the interests of other relevant stakeholders (see pp. 34-43).
Eni, however, has been considering the interest of stakeholders
other than shareholders as one of the necessary elements
directors must evaluate in making informed decisions since
2006. In compliance with the Code, on March 8th, 2022 the
Board of Directors also approved, at the proposal of the
Chairman, in agreement with the CEO, a policy for dialogue
with shareholders that identifies the parties responsible for
its management and the manner in which it is carried out
at the initiative of shareholders or the Company; the policy
also governs reporting to the Board on the development and
significant content of the dialogue that has taken place and the
manner in which it is disclosed and updated.
The effects and management of the COVID-19 pandemic
COVID-19 and its impacts on people and communities have
confirmed the importance of health and related issues as one
of the priorities on global policy agendas. In this crisis scenario,
the company has renewed its commitment to achieving the
2030 Agenda and has intervened on several fronts to manage
the consequences of COVID-19, exploiting its expertise in
order to protect the health of its employees and contractors.
Eni has also worked in synergy with governments, institutions
and local and international NGOs with the aim of preventing
and countering the spread of the pandemic and minimizing
its impact on local communities, both in Italy and abroad, and
improving the resilience of the most vulnerable communities.
Despite the scope and speed with which the pandemic spread,
Eni intervened promptly, also by virtue of the experience gained
managing past epidemics such as Sars-Cov-1 and Ebola,
and thanks to the regulatory, organizational and operational
tools it had already adopted in 2011 for the management of
epidemic and pandemic events, implementing its own risk
management model for Health, Safety, Environment, Security
and Public Health and Safety. In continuity with last year, and
based on the indications of the Crisis Unit, each employer
has put in place the appropriate measures and operational
actions with respect to its production unit taking into account
the specificities of the work environments, to counter and
contain the spread of the virus.
The main areas of activity were: (i) communication, information
and training; (ii) hygiene and prevention; (iii) management and
use of PPE (Personal Protective Equipment); (iv) sanitization of
work environments; (v) reorganization of work arrangements
and agile work; (vi) access to workplaces and aggregation
areas; (vii) management of suspected and confirmed cases;
(viii) health surveillance and protection of fragile workers; (ix)
maintenance of essential services and business continuity plan.
In 2021 all the activities continued with significant recourse
to Smart Working (remote working), in fact office working
was modulated according to the trend of the epidemiological
curve (with a range of between 20% and 40% of attendances).
During the year, Eni maintained a constant dialogue with the
trade unions through the Covid-Committee organization,
at various levels of the company organisation, for the
implementation of measures suitable for protecting the
health and safety of workers and ensuring the operational
continuity of the assets. Also at international level, the
industrial relations model continued with the constant
updating and the appropriate studies – carried out by specific
Covid Committees and within the EWC (European Works
Council) Restricted Committee – of the pandemic situation
in the various countries of presence and the main business
developments. Additional and complementary actions have
been activated in support of health institutions and important
initiatives have been put in place in favour of Eni's people
(see sections on People and Health, pp. 165-170) and in
support of Community Health (see section on Alliances for
Development, pp. 186-187). Finally, for more information on
the impact of the pandemic on Eni operating performance,
see pp. 97-98 and for impacts on non-financial indicators,
see the Metrics and Performance Comments sections of the
various topics covered in Non financial Declaration.
Eni Annual Report 2021 151
Main regulatory tools, guidelines and management models related to the scopes of Legislative
Decree 254/2016
In order to implement the mission in actual practice and to
ensure integrity, transparency, correctness and effectiveness
in its processes, Eni adopts rules for the performance of
corporate activities and the exercise of powers, ensuring
compliance with the general principles of traceability and
segregation.
All of Eni's operational activities can be grouped into a map of
processes functional to the Company’s activities and integrated
with control requirements and principles set out in the compliance
and governance models and based on the By-laws, the Code of
Ethics and the Corporate Governance Code 20204, the Model
2315, the SOA principles6 and the CoSO Report7.
BY-LAWS
CODE OF ETHICS
CORPORATE
GOVERNANCE CODE
MODEL 231
PRINCIPLES OF ENI’S CONTROL
SYSTEM OVER FINANCIAL REPORTS
CoSO REPORT FRAMEWORK
GENERAL OVERVIEW OF THE REGULATORY SYSTEM
I
L
O
R
T
N
O
C
D
N
A
N
O
T
A
N
D
R
O
O
C
T,
N
E
M
E
G
A
N
A
M
I
Policy
Management
System
Guideline
10 policy approved by the BoD
- Operation excellence; Our tangible and intangible assets; Our partners of the value chain;
Our institutional partners; The global compliance; Sustainability; Our people;
Information management; The integrity in our operations; Corporate Governance.
50 Management System Guideline ("MSG"):
- 1 MSG of Regulatory System defines the process for Regulatory System management;
- 36 MSG of Process define the guidelines for properly managing the relevant process and the related risks,
with an aim towards integrated compliance;
- 13 MSG of compliance and governance (approved by the BoD normally) define the general rules for ensuring
compliance with the law, regulations and corporate governance code: Code of commercial practices and advertising;
Compliance model regarding corporate responsibilities for Italian Subsidiaries of Eni - WS Composition; Compliance
model regarding corporate responsibilities for Foreign Subsidiaries of Eni; Corporate governance for Eni Companies;
Internal Control and Risk Management System; Market Information Abuse (Issuers); Anti-Corruption; Antitrust; Eni's
internal control system over financial reporting; Privacy and Data Protection; Economic and Financial Sanctions;
Transactions involving the interests of the Directors and Statutory Auditors and Transactions with Related
Parties; Market conducts and financial regulation
I
S
N
O
T
A
R
E
P
O
Procedure
- Define the operational methods to be implemented in executing the Company’s activities.
Operating Instruction
- Define in detail the operating procedures for a specific function, organisational unit or professional area/family.
With regard to the types of instruments that make up the
Regulatory System:
the Policies, approved by the BoD, are mandatory documents
that set out the principles and general rules of conduct on
which all the activities carried out by Eni must be based, in
order to guarantee the achievement of corporate objectives,
taking into account risks and opportunities. The Policies cut
across all processes and are focused on a key element of
business management; they apply to Eni SpA and, following the
implementation process, to all subsidiaries;
the Management System Guidelines (“MSGs”) are the guidelines
common to all Eni's companies and may be process or
compliance/governance guidelines (the latter normally approved
by the Board of Directors) and include sustainability aspects. The
individual MSGs issued by Eni SpA apply to subsidiaries, which
ensure their implementation, unless a derogation is needed;
the Procedures set out the operating procedures by which the
companies’ activities are to be carried out. They describe the
tasks and responsibilities of the organizational contacts involved,
management and control methods and communication flows.
They also regulate operations in order to pursue the objectives
of compliance with local regulations. The content is defined in
compliance with the Policies and MSGs as implemented by the
companies;
the Operating Instructions define the details of the operating
procedures referring to a specific function/organizational unit/
professional area or professional area, or to Eni's people and
functions involved in the fulfilments regulated therein.
The regulatory instruments are published on the Company’s
Intranet site and, in some cases, on the Company’s website. In
addition, in 2020 Eni updated its Code of Ethics in which it renewed
the corporate values that characterize the commitment of Eni
people and all third parties who work with the Company: integrity,
respect and protection of human rights, transparency, promotion
of development, operational excellence, innovation, teamwork
and collaboration. In the first of the two following tables (p. 152-
153), in addition to the Policies and the Code of Ethics, other Eni
regulatory instruments approved by the CEO and/or the Board of
Directors are also considered. On the other hand, the second table
(p. 154-155) shows the management and organization models,
including management systems, multi-year plans, processes and
cross-functional working groups.
(4) On December 23, 2020, the Eni Board of Directors resolved to adhere to the new Code, the recommendations of which are applicable as of January 1st, 2021. Therefore,
as from that date, roles, responsibilities and regulatory instruments must take into account the new recommendations on the subject provided for by the new Code, as
well as the decisions taken by the Board of Directors on how to apply these recommendations.
(5) On November 18, the BoD approved a new version of the Model 231 that – adapting the document to the changes in the organizational structure of Eni – rationalises
and enhances the internal control system and the various related compliance programmes in line with recent best practices in this field. In particular, also through an
express reference to the NFI, the systems that are further strengthened relate to the areas of the fight against corruption, environmental protection and safety (topics in
Italian Legislative Decree 254/2016).
(6) US Sarbanes-Oxley Act of 2002.
(7) Framework issued by the "Committee of Sponsoring Organizations of the Treadway Commission (CoSO)" in May 2013.
Management report | Consolidated financial statements | Annex
152
Eni's policy and public positions on the issues of Legislative Decree 254/2016
CLIMATE CHANGE
GOAL Combat climate change
CARBON NEUTRALITY BY 2050
PUBLIC DOCUMENTS
Eni's responsible engagement on climate change within business association; Policy "Sustainability"; Eni's position on biomass;
Strategic plan 2022-2025; Eni Code of Ethics.
PRINCIPLES
Total decarbonization of all products and processes by 2050 in line with the objectives of the Paris Agreement;
Ensure consistency and transparency in the activities of associations with Eni's strategy on climate change and energy transition, in line
with stakeholders' expectations;
Develop and implement new technologies for the reduction of climate-altering emissions and more efficient energy production;
Ensure sustainable biomass management along the entire supply chain;
Promote the role of Natural Climate Solutions as a lever for offsetting residual hard-to-abate GHG emissions;
Ensure transparency in reporting on climate change issues.
PEOPLE
GOAL Value Eni's people
OPERATIONAL EXCELLENCE
PUBLIC DOCUMENTS
“Our People” and “The Integrity in Our Operations” policies; Eni’s statement on Respect for Human Rights; Eni Policy Against Violence and
Harassment at Work; Eni Code of Ethics.
PRINCIPLES
Respect the dignity of each individual, valuing cultural, ethnic, gender, age, sexual orientation and different abilities;
Support organizational models that enhance cooperation between people from different cultures, perspectives and experiences;
Provide managers with tools and support for the management and development of people working for them;
Identify knowledge instrumental to the Company's growth and promote its enhancement, development and sharing;
Adopt fair remuneration systems that allow to motivate and retain people with skills that best suit the needs of the business;
Prohibit all forms of violence and harassment at work within the company, without exception.
HEALTH AND SAFETY
OPERATIONAL EXCELLENCE
GOAL To protect the health and safety of Eni's people and contractors
PUBLIC DOCUMENTS
“Integrity in our Operations” Policy; Eni statement on Respect for Human Rights; Eni Code of Ethics.
PRINCIPLES
The health and safety of Eni’s people, the community and its partners are a priority objective;
Adopt safety measures to protect people and assets with respect for the human rights of local communities;
Clearly and transparently inform our people, the community and our partners about the necessary preventive and protective measures to
be implemented, to eliminate the risks and criticalities of the processes and activities;
Consider protection of health as a fundamental requirement and promote the mental and physical well-being of its people;
Respect the rights of people and local communities in the countries in which it operates, with particular reference to the highest achievable
level of physical and mental health.
RESPECT FOR THE ENVIRONMENT
OPERATIONAL EXCELLENCE
GOAL Use resources efficiently and protect biodiversity and ecosystem services (BES)
PUBLIC DOCUMENTS
“Sustainability”; “Integrity in our Operations”; “Eni Biodiversity and Ecosystem Services” policies; “Eni’s commitment not to conduct
exploration and development activities within the boundaries of Natural Sites included in the UNESCO World Heritage List”; “Eni's Position
on Water”; Eni Code of Ethics.
PRINCIPLES
Consider, in project assessments and operations, the presence of UNESCO World Heritage Sites and other protected areas relevant to
biodiversity, identifying potential impacts and mitigation actions (risk-based approach);
Establish links between environmental and social aspects including the sustainable development of local communities;
Promote sustainable water resource management;
Optimise the control and reduction of emissions into the air, water and soil;
Act in a sustainable way, minimising environmental impacts and optimising the use of energy and natural resources;
Promote scientific and technological development aimed at protecting the environment.
Eni Annual Report 2021
HUMAN RIGHTS
GOAL Protect human rights
153
OPERATIONAL EXCELLENCE
PUBLIC DOCUMENTS
“Sustainability”; “Our People”; “Whistleblowing reports received, including anonymously, by Eni SpA and its subsidiaries in Italy and abroad”
policies; Eni statement on Respect for Human Rights; Supplier Code of Conduct; “Alaska Indigenous Peoples” policy; “Eni against Violence
and Harassment at Work” policy; Eni Code of Ethics.
PRINCIPLES
Respect human rights in the context of company activities and promote their respect among employees, partners and stakeholders, also
through training and awareness-raising activities;
Ensure a safe and healthy working environment and working conditions in line with international standards and ILO Convention no. 190 on
eliminating violence and harassment in the world of work;
Take into account Human Rights issues, from the very first feasibility evaluation phases of projects and respect the distinctive rights of
indigenous populations and vulnerable groups;
Minimize the necessity for intervention by state and/or private security forces to protect people and assets;
Select commercial partners that comply with the Eni Supplier Code of Conduct and that are committed to preventing or mitigating impacts
on human rights, refuse all forms of forced and/or child labour.
SUPPLIERS
GOAL Develop the sustainable supply chain
OPERATIONAL EXCELLENCE
PUBLIC DOCUMENTS
Supplier Code of Conduct, Eni’s position on Conflict Minerals; “Our Partners of the Value Chain” policy; Eni Code of Ethics; Eni statement on
Respect for Human Rights; Eni's Slavery and Human Trafficking Statement.
PRINCIPLES
Adopt accurate processes for the qualification, selection and monitoring of suppliers and partners, based on the principles of transparency
and integrity and, refusing to tolerate collusive practices, in full compliance with the law;
Define and disseminate policies, standards and rules that guide the action of suppliers and partners to respect Human Rights and the
sustainability principles of Eni;
Promote long-term strategic partnerships based on an integrated, coordinated and transparent approach, encouraging the fair sharing of
risks and opportunities;
Support the creation of a responsible workplace, recognising diversity;
Combat climate change and its effects;
Support the low carbon energy transition by safeguarding the environment and optimising the use of resources.
TRANSPARENCY, ANTI-CORRUPTION AND TAX STRATEGY
OPERATIONAL EXCELLENCE
GOAL Fight any form of corruption, with no exception
PUBLIC DOCUMENTS
“Anti-Corruption” Management System Guideline; “Whistleblowing reports received, including anonymously, by Eni SpA and its subsidiaries
in Italy and abroad”; “Our Partners in the Value Chain” policy; Tax Strategy Guideline; Eni's position on Contracts Transparency; Eni Code of
Ethics.
PRINCIPLES
Carry out business activities with fairness, correctness, transparency, honesty and integrity and in compliance with the law;
Prohibit bribery without exception;
Prohibit offering, promising, giving, paying, directly or indirectly, benefits of any nature to a public official or private person (active corruption);
Prohibit accepting, directly or indirectly, benefits of any kind from a Public Official or a private person (passive corruption);
Ensure that all Eni employees and partners comply with anti-corruption regulations.
LOCAL COMMUNITIES
ALLIANCES FOR DEVELOPMENT
GOAL Promote relations with local communities and contribute to their development also through public-private partnerships
PUBLIC DOCUMENTS
“Sustainability” policy; Eni statement on Respect for Human Rights; Eni Code of Ethics; “Alaska Indigenous Peoples” policy.
PRINCIPLES
Create growth opportunities and enhance the skills of people and local companies in the territories where Eni operates;
Involve local communities in order to consider their concerns on new projects, impact assessments and development initiatives, also with
reference to human rights;
Identify and assess the environmental, social, economic and cultural impacts generated by Eni activities, including those on indigenous
populations;
Promote free, prior and informed consultation with local communities;
Cooperate in initiatives to guarantee independent, long-lasting and sustainable local development.
Management report | Consolidated financial statements | Annex 154
MANAGEMENT AND ORGANISATION MODELS
CLIMATE
CHANGE
PEOPLE
Organization functional to the energy transition process with two Business Groups:
• Natural Resources, for the sustainable valorization of the Upstream Oil & Gas portfolio, for energy efficiency and CO2 capture;
• Energy Evolution, for the development of the production, transformation and marketing activities from fossil fuel based to bio, blue
and green products.
Dedicated central function that oversees the Company’s strategy and positioning on climate change;
Employment management and planning process to align skills to the technical and professional needs;
Management and development tools, aimed at professional involvement, growth and updating, inter-generational and inter-
cultural exchange of experiences, building of cross-cutting and professional managerial development pathways in core technical
areas valuing and including diversity;
Development of Innovative HR Management Tools;
Support and development of the distinctive skills necessary and consistent with corporate strategies, focusing on energy
transition and digital transformation issues, also through the use of Faculties/Academies;
HEALTH
Health system based on an operational platform of qualified health providers and collaborations with national and international
university and government institutions and research centres;
Occupational medicine for the protection of the health and safety of workers, in relation to the workplace, to occupational risk
factors and to the way in which work is carried out;
System of health assistance for the provision of health services consistent with the results of the analysis of needs and
epidemiological, operational and legislative contexts;
SAFETY
Integrated environment, health and safety management system for workers certified in accordance with the OHSAS 18001/ISO
45001 standard with the aim of eliminating or mitigating the risks to which workers are exposed during their work activities;
Process safety management system aimed at preventing major accidents by applying high technical and management standards
(application of best practices for asset design, operating management, maintenance and decommissioning);
RESPECT
FOR THE
ENVIRONMENT
Integrated environment, health and safety management system: adopted in all plants and production units and certified in
accordance with the ISO 14001:2015 environmental management standard;
Application of the ESHIA (Environmental Social & Health Impact Assessment) process to all projects;
Technical meetings for analysing and sharing experiences on specific environmental and energy issues;
Sustainable Procurement Programme (JUST): a set of initiatives aimed at involving the entire supply chain in the measurement
and management of the ESG performance of the Eni Supply Chain;
Site-specific circularity analysis: mapping of elements already present, measurement and identification of possible interventions
for improvement;
HUMAN
RIGHTS
Human Rights management process regulated by an internal regulatory instrument aligned with the United Nations Guiding
Principles (UNGP);
Inter-functional activities on Business and Human Rights to further align processes with key international standards and best
practices;
Human Rights Impact Assessment and Human Rights Risk Analysis with a risk-based prioritization model for industrial projects;
SUPPLIERS
Sustainable Procurement process designed to check suppliers' compliance with Eni requirements for reliability, ethical conduct
and integrity, economic, technical-operational, health, safety, environmental and human rights protection and Technological-Digital
excellence;
TRANSPARENCY,
ANTICORRUPTION
AND TAX
STRATEGY
Model 231: sets out responsibilities, sensitive activities and control protocols for crimes of corruption under Italian Legislative
Decree 231/01 (including environmental crimes and crimes related to workers' health and safety);
Anti-Corruption Compliance Programme: system of rules and controls to prevent corruption crimes;
Recognition for the Eni SpA Anti-Corruption Compliance Programme: certified pursuant to the ISO 37001:2016 standard;
Anti-corruption and anti-money laundering unit placed in the “Integrated Compliance” function reporting directly to the CEO;
LOCAL
COMMUNITIES
Sustainability liaison at local level, who interfaces with the Company headquarters to define Local Development Programmes in
line with national development plans integrating business processes;
Application of the ESHIA (Environmental Social & Health Impact Assessment) process to all business projects;
INNOVATION AND
DIGITALIZATION
Centralized Research & Development Function structured to ensure rapid and effective deployment of the technologies developed;
Management of Technological Innovation projects in line with best practices (step-by-step planning and control according to the
development of the technology);
Eni Annual Report 2021 155
Energy management systems coordinated with the ISO 50001 standard, included in the HSE regulatory system, for the improvement of energy
performance and already implemented at all major Mid-Downstream sites and being extended to all of Eni;
Organization of research and technological development aimed at the creation and application of low carbon footprint technologies, in full
integration with renewable sources, the use of biomass and the enhancement of waste materials in reference to their possible application in the
process of redefining the energy mix, as well as the development of technologies for the use of new forms of energy or energy carriers with reduced
or zero carbon footprint.
Training quality management system updated and compliant with ISO 9001:2015;
Knowledge management system for the integration and sharing of know-how and professional experiences;
National and international industrial relations management system: participative model and platform of operating tools to engage employees in
compliance with ILO (International Labour Organization) conventions and the guidelines of the Institute for Human Rights and Business;
Welfare system for the achievement of work-life balance and the enhancement of services for employees and their families.
Health emergency preparedness and response, including epidemic and pandemic response plans;
Health for communities and health impact assessment: initiatives aimed at maintaining, protecting and/or improving the health status of
communities;
Health promotion and communication for the provision of health services consistent with the results of the analysis of needs and epidemiological,
operational and legislative contexts.
Emergency preparedness and response with plans that put the protection of people and the environment first;
Product safety management system for the assessment of risks related to the production, import, sale, purchase and use of substances/mixtures
to ensure human health and environmental protection throughout their life cycle;
Methodology for the analysis and management of the Human Factor in accident prevention.
International Environmental Legislative Analysis: in-depth analysis of current national and international legislation by environmental matrix and
definition of a Ranking of regulatory development for each Country analysed;
Working groups for defining the strategic positioning and objectives of Eni for the protection of water resources and biodiversity;
Development of a single integrated methodology for environmental analysis, impact/risk assessment for the environment and organization, including
type 231, applicable in Italy and abroad;
Environmental Golden Rules: 4 principles and 6 golden rules to promote more conscious and responsible virtuous behaviours towards the
environment by Eni employees and suppliers.
Security management system aimed at ensuring respect of human rights in all countries, particularly in high-risk countries;
Whistleblowing process aimed also at the identification of whistleblowing reports concerning facts or behaviours contrary to (or in conflict with) the
responsibilities taken on by Eni to respect the human rights of Whistleblowing each individual or community and the adoption of actions aimed at
mitigating their impacts;
Three-year e-learning training plan on the main areas of interest on human rights.
Sustainable Procurement Programme (JUST): a set of initiatives aimed at involving the entire supply chain in the measurement and management
of the ESG performance of the Eni Supply Chain;
Vendor Development: unit dedicated to the development of suppliers through the definition of growth and transformation paths in the fields of
"Energy Transition and Sustainability", "Financial Economic Soundness" and "Digital Technological Excellence".
Eni participation in local Extractive Industries Transparency Initiative (EITI) activities at international level and multi stakeholder group activities
to promote responsible use of resources, fostering transparency;
Integrated compliance model: for the various areas of compliance, defines the activities at risk by evaluating, with a preventive approach, the level of
risk, modulating the controls from a risk-based perspective and monitoring their exposure over time.
Stakeholder Management System platform aimed at managing and monitoring relationships with local stakeholders and grievances;
Sustainability management process in the business cycle and design specifications according to international methods (e.g. Logical Framework).
Continuous updating of procedures relating to the protection of intellectual property and the identification of service/professional service providers.
Management report | Consolidated financial statements | Annex 156
Main ESG risks and the related mitigation actions
the main ESG
For the analysis and assessment of risks, Eni has adopted
an Integrated Risk Management Model with the aim of
allowing management to make informed decisions with
a comprehensive and forward-looking vision8. Risks are
assessed with quantitative and qualitative tools, taking
into account environmental, health and safety, social and
reputational impacts. The results of the risk assessment,
(Environmental, Social and
including
Governance) risks, are submitted to the Board of Directors
and the Control and Risk Committee on a half yearly basis.
In the current context, which sees further increased global
attention to climate change and and the emergence of
jurisprudential trends on corporate liability for climate change,
the climate change risk, already a top risk, remains relevant
also in light of the management’s commitment to achieve
carbon neutrality goals and keep global warming within the
threshold of 1,5°C. Although the progress of vaccination
campaigns contributes to mitigating clinical risk, the non-
uniform coverage rates and spread of new variants have kept
biological risk among the Top Risks, assessed both as a risk
to people’s health and as a systemic risk able to influence
the Eni risk portfolio as a whole and, in particular, market,
country and operational risks. The table below provides a
summary view of Eni ESG risks classified according to the
areas of Legislative Decree 254/2016. For each risk event,
the type of risk – top risk and non-top risk – and the page
references, where the main treatment actions are set out,
are indicated. For the potential effects of the Russia-Ukraine
crisis, reference should be made to the paragraph entitled
Possible consequences of the conflict between Russia and
Ukraine in the Management report. In the new international
scenario, Eni's strategy is aimed at ensuring the security and
sustainability of the energy system while maintaining a clear
focus on a fair energy transition and the creation of value
for stakeholders. In this regard, during the Capital Markets
Day on March 18, 2022, Eni in fact announced that it intends
to accelerate the path to zero absolute net Scope 1+2+3
emissions with new reduction targets of -35% by 2030 and
-80% by 2040 compared to 2018. For more information see
the section Carbon Neutrality to 2050.
RISK MANAGEMENT MODEL
SCOPEOF LEGISLATIVE
DECREE 254/2016
RISK EVENT
CROSS RISKS
Risks associated with research and development
activities
Cyber Security
Relations with local stakeholders
Political and social instability and Global security
risk
Climate change risk
• energy transition risks
• physical risks
CLIMATE
CHANGE
Art. 3.2,
paragraphs a)
and b)
Y
T
I
L
A
R
T
U
E
N
N
O
B
R
A
C
0
5
0
2
Y
B
Top risk
(8) For further details, refer to the Integrated Risk Management chapter on pp. 28-33.
TOP
RISK
MAIN TREATMENT
ACTIONS
NFI - Carbon neutrality, pp. 158-164;
Safety, pp. 171-172; Respect for the
environment, pp. 172-178.
AR - Integrated Risk Management,
pp. 28-33; Internal control risks, pp.
143-144
AR - Integrated Risk Management,
pp. 28-33; Risks related to political
considerations, pp. 134-136; Risks
associated with the exploration and
production of oil and natural gas, p. 130
NFI - Alliances for development, pp.
186-187
AR - Integrated Risk Management,
pp. 28-33; Risks related to political
considerations, pp.134-136
AR - Integrated Risk Management, p.
28-33; Safety, security, environmental
and other operational risks, pp. 128-
130; Climate change-related risks,
pp. 138-143
NFI - Carbon neutrality by 2050 (risk
management), pp. 158-164
Eni Annual Report 2021
RISK MANAGEMENT MODEL
SCOPEOF LEGISLATIVE
DECREE 254/2016
RISK EVENT
PEOPLE
Art. 3.2,
paragraphs c)
and d)
Biological Risk i.e. the spread of pandemics and
epidemics with potential impacts on people and
health systems and business
RESPECT FOR THE
ENVIRONMENT
Art. 3.2,
paragraphs a), b)
and c)
Risks regarding human health and safety:
• Accidents involving workers and contractors
• Process safety and asset integrity incidents
Risks related to the competency portfolio
Blow out
Process safety and asset integrity incidents
Regulatory risk energy sector
Permitting
Environmental risks (e.g. water scarcity, oil spills,
waste, biodiversity)
157
TOP
RISK
MAIN TREATMENT
ACTIONS
AR - Integrated Risk Management,
pp. 28-33; Risks associated with the
exploration and production of oil and
natural gas, p. 130; Operational risks
and related HSE risks, pp. 128-130;
COVID-19 emergency management,
pp. 97-98
NFI - People, pp. 165-170, Safety, pp.
171-172
AR - Integrated Risk Management,
pp. 28-33; Risks associated with the
exploration and production of oil and
natural gas, p. 130; Safety, security,
environmental and other operational
risks, pp. 128-130; Risks related to
Environmental, Health and Safety
regulations and legal risks, pp. 137-
138
NFI - Respect for the environment,
pp. 172-178
HUMAN RIGHTS
Art. 3.2
paragraph e)
Risks associated with the violation of human rights
(human rights in the supply chain, human rights
in security, human rights in the workplace, human
rights in local communities)
NFI - Human Rights (risk
management), pp. 178-181
SUPPLIERS
Art. 3.1 paragraph c)
TRANSPARENCY,
ANTI-
CORRUPTION
AND TAX
STRATEGY
Art. 3.2
paragraph f)
Risks associated with procurement activities
Investigations and litigation regarding:
• Environment, health and safety
• Corruption
Risks connected with Corporate Governance
COMMUNITIES
Art. 3.2 paragraph
d)
Risks connected with local content
NFI - Suppliers (risk management),
pp. 182-183
AR - Integrated Risk Management,
pp. 28-33; Risks related to legal
proceedings and compliance with
anti-corruption legislation p. 143
CGR - Internal control and risk
management system
NFI - Transparency, anti-corruption and
tax strategy, pp. 183-185
AR - Integrated Risk Management,
pp. 28-33; Risks related to political
considerations, pp. 134-136; Risks
associated with the exploration and
production of oil and natural gas, p.
130
NFI - Alliances for development, pp.
186-187
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Top risk
Management report | Consolidated financial statements | Annex
158
CARBON NEUTRALITY BY 2050
Eni, aware of the ongoing climate emergency, wants to be
an active part of a virtuous path of the energy sector to
contribute to carbon neutrality by 2050, in order to keep
average global warming within the threshold of 1.5°C at the
end of the century. Eni has long been committed to promoting
comprehensive and effective disclosure on climate change
and in this respect confirms its commitment to implementing
the recommendations of the Task Force on Climate Related
Financial Disclosure (TCFD) of the Financial Stability Board,
which Eni has adopted since 2017, the first year applicable for
reporting.
Leadership in disclosure – Transparency in climate related
disclosure and the strategy implemented by the Company have
enabled Eni to be confirmed, once again in 2021, as a leading
Company in the Climate Change disclosure programme of the
CDP. The A- rating achieved by Eni is higher than the overall
average rating of B9. In addition, in 2021, TPI10 assessment
awarded Eni the highest rating for management quality in
the strategic assessment of climate risks and opportunities,
and recognised, for the first time in the assessment relating
to carbon performance, the alignment of long-term emission
targets with the more ambitious objective of the Paris
Agreement to limit the increase in global average temperature
to 1.5°C by the end of the century. In the same year, Carbon
Tracker's11 research on Integrated Energy Companies (IEC)
placed Eni first among the peers for the completeness of
the GHG emissions accounting methodology, the medium/
long-term intermediate targets and the emission accounting
boundary extended to the entire company.
Commitment to partnerships – Partnerships are one of the
key elements of the decarbonization process, as Eni always
collaborated with academia, civil society,
institutions and
companies to facilitate the energy transition. Eni's CEO sits on the
Steering Committee of the "Oil and Gas Climate Initiative" (OGCI).
Established in 2014 by 5 Oil & Gas companies, including Eni,
OGCI now counts twelve companies, representing about
one-third of global hydrocarbon production. To reinforce its
commitment to reduce GHG emissions, OGCI announced in
2021 the new collective target of Net Zero Operations12, which
adds to the GHG emission intensity and methane intensity
reduction targets of the Upstream assets, announced
respectively in 2020 and 2018. In addition, Eni's commitment
continued to the joint investment in a fund of over 1 billion
dollars for the development of technologies to reduce GHG
emissions throughout the energy value chain at a global scale
and to promote, following the CCUS KickStarter initiative
launched in 2019, wide-scale marketing of CO2 capture,
use and storage technology (CCUS). Eni also promotes
the need for alignment among the methodologies for GHG
reporting in order to make the Oil & Gas sector performances
and decarbonization targets comparable. In this sense, Eni
collaborates in the Science Based Target Initiative (SBTi),
which is working on the definition of guidelines and standards
applicable to the sector to define decarbonization targets in
line with the objectives of the Paris Agreement.
Disclosure on Carbon neutrality by 2050
is organized
according to the four TCFD thematic areas: governance, risk
management, strategy and metrics and targets. In 2021, Eni
was recognised by TCFD13 as a best practice for disclosure
regarding the potential impacts of climate change risks on
its portfolio. The key elements of each area are presented
below; please see Eni for 2021 - Carbon Neutrality by 205014;
report for a complete analysis; further details will be available
through Eni’s disclosure to CDP Climate Change questionnaire
2022.
(9) On an assessment scale from D (minimum) to A (maximum).
(10) Transition Pathway Initiative, an investor-led global initiative that assesses companies' progress in the low carbon transition. The report published in November 2021
is an update of the TPI assessment published in 2020.
(11) Independent financial think tank that has been conducting analyses for years to assess the impact of the energy transition on carbon intensive companies and
financial markets.
(12) Referred to Scope 1+2 emissions of the operated assets within the terms established by the Paris Agreement.
(13) Guidance on Metrics, Targets, and Transition Plans, p. 54, TCFD 2021.
(14) This report will be published in the occasion of the Shareholders Meeting.
Eni Annual Report 2021 TCFD RECOMMENDATIONS
AR 2021
2021 SUSTAINABILITY REPORT(*)
Consolidated Disclosure
of Non-Financial Information
Addendum Eni For -
Carbon neutrality by 2050
159
GOVERNANCE
Disclose the organization’s governance
around climate-related risks and
opportunities.
a) Oversight
by the BoD
STRATEGY
Disclose the current and potential impacts
of climate-related risks and opportunities on
the organization’s businesses, strategy, and
financial planning where such information is
material.
√
Key elements
b) Role of the management
a) Climate-related risks and
opportunities
b) Incidence of risks and op-
portunities linked to climate
√
Key elements
c) Resilience of the strategy
RISK MANAGEMENT
Disclose how the organization identifies,
assesses, and manages risks related
to climate change.
a) Identification and
assessment processes
b) Management processes
c) Integration into overall risk
management
METRICS & TARGETS
Disclose the metrics and targets used to
assess and manage risks
and opportunities related to climate change
where such information is material.
a) Metrics used
b) GHG emissions
c) Targets
(*) The report will be released at the 2022 Shareholders' Meeting.
√
Key elements
√
Key elements
√
√
√
√
√
√
√
√
√
√
√
GOVERNANCE
Role of the BoD. Eni’s decarbonization strategy is part of a
structured system of Corporate Governance, in which the BoD
and the CEO play a central role in managing the main aspects
linked to climate change. Based on the CEO’s proposal, the
BoD examines and approves the Strategic Plan, which sets out
strategies and targets, including those related to climate change
and energy transition. Since 2014, the BoD has been supported
in performing its duties by the Sustainability and Scenarios
Committee (SSC), with whom it examines, on a periodic basis,
integration between strategy, future scenarios and the medium/
long-term sustainability of the business. During 2021, the
SSC explored topics related to climate change in all meetings,
including updates on the activities of the CFO Taskforce for
SDGs, the hydrogen supply chain and technologies, the Open-es15
platform, forestry activities, carbon pricing, Eni's commitment to
safeguarding water resources, Eni's results in the ESG indexes
and ratings (or sustainability ratings), the resolutions on climate
and the assembly disclosures of the reference peers with a focus
on "Say on climate"16, the insights on the activities of Carbon
Capture and Storage (CCUS) and human rights17.
As from 2019, the BoD examines and approves Eni’s short-
medium, long-term plan, aiming to guarantee the sustainability
of its business portfolio in a time frame up to 2050, in line
with what is provided for in the Four-Year Strategic Plan.
Furthermore, with reference to the composition of the Board, it
is reported that on the basis of the self-assessment conducted,
about 80% of the Board Members expressed their positive
opinion on the professionalism within the Board – understood
in terms of knowledge, experience and skills (with particular
regard to advisory, training and publication activities in the
energy and environmental field, participation in governmental
and non-governmental, national and international bodies that
deal with these issues) – and on the personal contribution that
the individual Board Members consider to make to the Board of
Directors in matters of sustainability, ESG and energy transition.
The commitment of the entire Board is unanimously recognised
on the issues of energy transition, climate change, sustainability
and ESG, as well as the specific support of the Sustainability and
Scenarios Committee – due to its specific functions, in terms
of the quality and depth of the discussion both on ESG and
sustainability issues and on those relating to energy transition
(15) For more information https://www.openes.io/it.
(16) Say on climate: the "Say On Climate" campaign, launched at the end of 2020, asks companies to put their Climate Action Plan to the advisory vote of the shareholders'
meeting.
(17) For further information, please refer to the "Sustainability and Scenarios Committee" paragraph of the 2021 Corporate Governance Report.
Management report | Consolidated financial statements | Annex 160
and climate change – seeking to maintain continuity of training
and discussion on these issues, which are unanimously seen
in prospective growth, along with strategy and business
issues. Immediately after the appointment of the Board of
Directors and the Board of Statutory Auditors, a board induction
programme was implemented for directors and statutory
auditors, which covered, among other topics, issues related to
the decarbonization process and the environmental and social
sustainability of Eni’s activities. Eni’s economic and financial
exposure to the risk deriving from the introduction of new
carbon pricing mechanisms is examined by the BoD both during
preliminary approval of the investment and in the following half-
year monitoring of the entire project portfolio. The BoD is also
informed annually on the results of the impairment test carried
out on the main Cash Generating Units in the E&P sector and
elaborated with the introduction of a carbon tax value aligned
with IEA18 Sustainable Development Scenario (SDS). From 2021,
the IEA's Net Zero Emissions (NZE) scenario is included in the
scenarios for portfolio evaluations (see pp. 138-143, par. "Climate
Change Risk"). Finally, the BoD is informed on a quarterly basis
on the results of the risk assessment and monitoring activities
related to Eni’s top risks, including climate change.
Role of management. All company structures are involved in
the definition or implementation of the carbon neutrality strategy
that is reflected in Eni's organizational structure with the two
business groups: Natural Resources, active in the sustainable
valorization of the upstream Oil & Gas portfolio, in marketing of
wholesale natural gas, in Natural Climate Solutions initiatives
and projects of carbon storage and Energy Evolution, to
support the development of the production, transformation and
marketing activities from fossil fuel based to bio, blue and green
products, also through the merge of the retail and renewable
businesses. As of 2019, climate strategy issues are part of long-
term planning and managed by the CFO area through dedicated
structures with the aim of overseeing the process of defining
Eni’s climate strategy and the related portfolio of initiatives,
in line with international climate agreements. The strategic
commitment in carbon footprint reduction is part of the
essential goals of the Company and is therefore also reflected
in the Variable Incentive Plans for the CEO and Company’s
management. In particular, the 2020-2022 Long-Term Stock-
based Incentive Plan provides for a specific objective on issues
of environmental sustainability and energy transition (total
weight 35%), based on the targets related to decarbonization,
energy transition and circular economy processes consistent
with the objectives communicated to the market and with a view
to aligning with the interests of all stakeholders.
The Short-Term deferral Incentive Plan (IBT) 2021 is closely
linked to the Company’s strategy, as it is aimed at measuring
the achievement of annual objectives in line with Eni’s new
decarbonization targets. In particular, the upstream emission
intensity on an equity basis is considered, which includes indirect
emissions (so-called Scope 2) and non-operated activities.
Starting from 2021, the IBT plan also includes the incremental
renewable installed capacity KPI, replacing the one related with
the exploration of resources, to support the energy transition
strategy. Each of these targets is assigned to the CEO with a
weight of 12.5% and to all the Company’s managers according
to percentages in line with the attributed responsibilities.
RISK MANAGEMENT
The process for identifying and assessing climate-related
risks and opportunities is part of Eni’s Integrated Risk
Management Model developed to ensure that management
makes decisions that take into account current and potential
risks, including medium- and long-term risks, and with an
integrated, comprehensive and prospective view. In light of
the link between risk and opportunity management and Eni’s
strategic objectives, the IRM process starts with a contribution
in defining Eni’s medium- and long-term plan and four-year plan
(objectives and actions with de-risking value), and continues
with supporting their implementation through periodic risk
assessments and monitoring cycles. The
IRM process
ensures the detection, consolidation and analysis of all Eni’s
risks and supports the BoD in checking the compatibility of
the risk profile with the strategic targets, also in a long-term
perspective. Risks are:
assessed with quantitative and qualitative tools considering
both the probability of occurrence and the impacts that will be
determined in a given time frame should the risk occur;
represented, based on the probability of occurrence and on the
impact, by matrices that allow comparison and classification
according to relevance.
Main risks and opportunities. Risks related to climate change
are analysed, assessed and managed by considering the aspects
identified in the TCFD recommendations, which refer both to the
risks related to energy transition (market scenario, regulatory
and technological evolution, reputation issues) and to physical
risk (acute and chronic) associated with climate change. The
analysis is carried out using an integrated and cross-cutting
approach that involves specialist departments and business
lines and considers the related risks and opportunities.
Market scenario. The global energy landscape is facing major
challenges in the coming years, balancing the growth in energy
consumption with the urgency of tackling climate change.
In order to model the evolution of the energy system in such
context, the International Energy Agency (IEA) develops a
series of reference scenarios, such as the Stated Policies
(STEPS) and the Announced Pledges (APS)19 and decarbonized
(18) International Energy Agency.
(19) STEPS includes all the policies implemented and planned by the Governments, while the APS considers the achievement of all the net zero objectives announced by
the Governments within the scheduled timeframe.
Eni Annual Report 2021 161
scenarios that use a backcasting logic20 to identify the
actions required to achieve the main energy and sustainable
development goals (including full access to energy and the
limiting the global average temperature increase). Among
these,
in the Sustainable Development Scenario (SDS),
considered by Eni as the main reference for assessing the
risks and opportunities associated with energy transition,
the global energy demand by 2040 is expected to decrease
compared to today (-5.3% vs. 2019). The energy mix will
move towards low carbon sources, with an increasing share
of nuclear and intermittent sources that will increase from
about 2% to 17% in 2040 and to 26% in 2050. Fossil sources
will maintain a central role in the energy mix (Oil & Gas equal to
40% of the mix in 2040 vs. 53% in 2020). In particular, natural
gas will count for about 20% in the energy mix as the fossil
fuel with the best future perspectives both for integration with
renewable sources and for replacement of other sources with
higher environmental impact. In this scenario, although the
demand for oil is expected to fall drastically (up to 47 Mb/g at
2050 vs. 97 Mb/d of 2019), significant upstream investments
are still needed to compensate the decline in production from
existing fields, although uncertainty remains on the influence
that regulatory changes and technological breakthroughs
could have on the scenario.
In 2021 IEA developed, for the first time, a path aimed at achieving
carbon neutrality by 2050, in line with a temperature increase of
1.5°C by the end of the century (NZE2050). This path is based
on levers such as electrification, efficiency and a radical change
in consumer behaviour, which demand an immediate change
in the energy paradigm. According to the NZE2050, in the next
ten years, emissions may be reduced by existing technologies
already established on the market, but in 2050 solutions that, at
this time, are still in the prototype or demonstration phase and
not yet available on a large scale will have to be adopted. Global
energy demand by 2040 is expected to decrease compared to
today (-13% vs. 2019), despite the projected doubling of the
global economy and a population growth of 2 billion.
Regulatory developments. Adoption of policies suitable to
sustain the energy transition towards low carbon sources could
have significant impacts on the evolution of Eni’s business
portfolio. In particular, at COP26, a package of decisions
(Glasgow Climate Act) was defined, representing an important
step forward in the climate negotiations. Among the most
important elements, the importance of relevance the increase
in temperature to 1.5°C by the end of the century compared
to the pre-industrial era is recognised, and to this end a goal
has been defined of reducing global CO2 emissions by 45% in
2030 vs. 2010 and achieving net zero "around the middle of the
century". At the same time, several countries have announced
net zero commitments that to date cover more than 90% of
world emissions. In this context, the EU has also committed to
achieving carbon neutrality by 2050 and has increased its GHG
emission reduction target from 40% to 55% in 2030, making
it binding with the Climate Law approved in June 2021. In the
same year, the European Commission published the Fit for 55
package, which revises the main climate directives in line with
the new 2030 target, within a broader review of its climate
policies (i.e. the EU regulation on taxonomy and hydrogen and
decarbonized gas packages).
Legal risk. Some public and private parties have begun
proceedings, legal or otherwise, against the major Oil &
Gas companies,
including companies belonging to Eni’s
Group, deeming them responsible for the impacts related
to climate change and human rights, as well as for so-
called “greenwashing”21. Eni has long been committed to
promoting a constant, open and transparent exchange of
views on climate change and human rights issues which
are an integral part of its strategy and therefore the subject
of communications to all stakeholders. This commitment is
part of a wider relationship that Eni has established with its
stakeholders on important sustainability issues with initiatives
on the subjects of governance, dialogue with investors and
targeted communication campaigns, as well as participation in
international initiatives and partnerships.
Technological developments. The need to build a final energy
consumption model with a low carbon footprint will favour
technologies for GHG emissions capture and reduction,
production of hydrogen from gas as well as technologies
that support methane emissions control along the Oil & Gas
production chain. In this way it will be possible to aspire to a rapid
and realistic transition from a predominantly fossil scenario to one
with a low carbon footprint. Furthermore, technological evolution
in the field of energy production and storage from renewable
sources and in the field of bio-based activities will be a key lever
for the industrial transformation of Eni's business. Scientific and
technological research is therefore one of the levers on which
Eni's decarbonization strategy is based which levers of action are
described in the Strategy and Targets section.
Reputation. Awareness-raising campaigns by NGOs and other
environmentalist organizations, shareholder resolutions during
meetings, disinvestments by some investors, class actions
by groups of stakeholders, are increasingly more oriented
towards greater transparency on the tangible commitments of
Oil & Gas companies towards energy transition.
In 2020, upholding requests from a number of investors, Eni
published its guidelines on responsible engagement on climate
change within business associations, in which it commits to
periodically check the consistency of its climate and energy
advocacy positions and those of the trade associations to
which it belongs.
(20) Defined-objective scenario.
(21) For details on the proceedings, see pp. 293-296 the section "Civil and administrative proceedings in the matters of environment, health and safety”.
Management report | Consolidated financial statements | Annex 162
Physical risks.
Intensification of extreme/chronic weather
phenomena in the medium/long-term could cause damage
to plants and infrastructures, resulting in an interruption of
industrial activities and increased recovery and maintenance
costs. Regarding extreme phenomena, such as hurricanes
or typhoons, Eni’s current portfolio of assets, designed in
accordance with applicable regulations to withstand extreme
environmental conditions, has a geographical distribution that
does not result in concentrations of high risk. With regard to
more gradual phenomena, such as sea level rise or coastal
erosion, vulnerability of Eni's assets affected by the phenomenon
is assessed through specific analysis, as in the case of Eni’s
assets in the Nile Delta area, where the impact is however limited
and it is therefore possible to plan and implement preventive
mitigation interventions to counter the phenomenon. In parallel
with its commitment to ensuring the integrity of its operations,
Eni is active on Climate Change adaptation, also with regard to
the socio-economic and environmental impacts in the Countries
where Eni operates. To this end, Eni completed a project in 2021,
in collaboration with FEEM (Fondazione Eni Enrico Mattei) and
Pisa Institute of Management (IDM), for the assessment of the
main risks/opportunities related to Climate Change, leading to
the development of guidelines and measures that will provide
methodological support for the identification and implementation
of adaptation actions in Countries of interest to Eni.
STRATEGY AND OBJECTIVES
Aware of the ongoing climate emergency, Eni wants to be an
active part of the energy sector's transition with a long-term
strategy towards carbon neutrality in 2050, in line with scenarios
compatible with keeping global warming within the 1.5°C
threshold at the end of the century. In 2022, Eni has accelerated
its transformation strategy, which will leverage the integration
of technologies, new business models and close collaboration
with stakeholders to develop an increasingly broad offer of
decarbonized solutions for its customers. Eni's decarbonization
path towards net zero in 2050 is traced through clear targets
inclusive of all GHG Scope 1+2+3 emissions, integrated and
reinforced by new short and medium term targets that confirm
Eni's commitment to further align the reduction trajectory to 1.5°C
scenarios:
-35% of Net GHG Lifecycle Emissions (Scope 1+2+3)
@2030 vs. 2018, -55% @2035 and -80% @2040;
-15% of Net Carbon Intensity of energy products sold
@2030 vs. 2018 and -50% @2040;
Net-zero Carbon Footprint Upstream (Scope 1+2) @2030,
with a new target of reducing by 65% @2025 vs. 2018;
Net-zero Carbon Footprint Eni (Scope 1+2) anticipated to
2035, with a new target of reducing by 40% @2025 vs. 2018.
The remaining emissions will be compensated through
offsets, mainly from Natural Climate Solutions, which will
contribute to about 5% of the overall reduction of the value
chain emissions in 2050.
Eni's decarbonization objectives are in fact underpinned by
an industrial transformation plan designed on concrete and
economically feasible solutions, driven by already available
technologies:
reduction of hydrocarbon production in the medium term,
with gradual growth of the gas share, which will reach
more than 90% by 2050;
conversion of traditional refining using circular economy
hubs, with an increase in “bio” refining capacity to 6 mln
ton by 2035, palm oil free starting from 2023;
progressive
increase
in Plenitude's green electricity
offerings as part of the growth in the customer base to 15
million with over 15 GW of installed renewable capacity
by 2030 and reach 60 GW in 2050;
business development for sustainable mobility with
30,000 EV charging points by 2025 and around 160,000
in 2050;
progressive increase in the production of new energy
carriers including hydrogen, which will contribute to
about 4MTPA from 2050, and magnetic fusion, with the
first operational plant expected in 10 years;
development of CO2 storage hubs for hard-to-abate
emissions both from Eni and third-party industrial sites,
reaching a storage capacity of over 50 MtCO2 in 2050.
The evolution towards a portfolio of totally decarbonised
products will be supported by a progressive growth of
investments dedicated to new energy solutions and services,
reaching 30% of total investments in 2025, 60% in 2030 and up
to 80% in 2040.
In ten years, these activities will generate positive Free Cash Flow
and reach 75% contribution to the group's cash flow from 2040.
For the next four-year period 2022-25, Eni has planned
in decarbonisation, circular economy and
investments
renewables equal to approximately €9.7 billion, including
scientific and technological research activities in these areas.
Eni is also committed to aligning its plans and investment
its decarbonisation strategy, progressively
decisions to
reducing the share of expenditures dedicated to O&G
activities, selecting investment projects according to strict
emission thresholds and gradually eliminating investments in
"unabated" activities or products as a necessary condition for
achieving carbon neutrality by mid-century.
The decarbonization plan is integrated into Eni's financing
strategy, which aligns economic and environmental sustainability,
with the issuance, in 2021, of the first sustainability-linked bond
of the O&G sector whose interest rate is linked to the energy
transition objectives announced by the company.
PERFORMANCE METRICS AND COMMENTS
Eni has historically been committed to reducing its direct GHG
emissions and was among the first in the industry to define,
Eni Annual Report 2021 163
starting in 2016, a series of objectives aimed at improving the
performances related to GHG emissions from operated assets,
with specific indicators that illustrate the progress achieved to
date in terms of reducing GHG emissions into the atmosphere.
In addition to these, in 2020 new targets were defined,
accounted for on an equity basis. These indicators refer to
a distinctive GHG accounting methodology that considers
all energy products managed by Eni's various businesses,
including purchases from third parties, and all the emissions
they generate along the entire supply chain (Scope 1+2+3),
according to a well-to-wheel approach. The resulting indicators
therefore trace Eni's path towards carbon neutrality both in
absolute terms (Net GHG Lifecycle Emisisons) and in terms of
intensity (Net Carbon Intensity).
The performance of the indicators relating to the medium/
long-term targets is shown below.
Net Zero GHG Lifecycle Emissions by 2050: the indicator
refers to all Scope 1, 2 and Scope 3 emissions associated
with Eni activities and products, along their value chain, net
of offsets mainly by Natural Climate Solutions. In 2021, it
increased mostly in relation to the resumption of activities
following the health emergency and greater sales of Oil & Gas
retail products.
Net Zero Carbon Intensity by 2050: the indicator is calculated as
the ratio between absolute net GHG emissions (Scope 1, 2 and
3) along the value chain of energy products and the amount of
energy they contain. In 2021 it decreased by 2% compared to
2020 thanks to the increase of the gas share in the energy mix
and the role of offsets.
These metrics are integrated by specific indicators to monitor
operational emissions:
Net Zero Carbon Footprint upstream by 2030: the indicator
considers Scope 1+2 emissions from all upstream assets,
operated by Eni and by third parties, net of offsets mainly
from Natural Climate Solutions. In 2021, the indicator is
substantially stable as the slight increase in emissions was
balanced by increased compensation through forestry credits
for 2 MtCO2eq.
Net Zero Carbon Footprint Eni by 2035: the indicator considers
Scope 1+2 emissions from activities carried out by Eni and third
parties, net of offsets mainly from Natural Climate Solutions.
The indicator is substantially stable as the slight increase in
emissions was partially balanced by increased compensation
through forestry credits for 2 MtCO2eq.
100% basis, the following is a summary of the results obtained
in 2021 and the progress towards defined targets.
Reduction of the upstream GHG emission intensity index
by 43% in 2025 vs. 2014: the upstream GHG intensity index,
expressed as the ratio between direct Scope 1 emissions and
operated gross production in 2021 was substantially stable
compared to 2020. The trend is related to an increase in
emissions mainly linked to emergency shutdowns in Nigeria
and Angola and the resumption of onshore activities in Libya,
partially offset by the reduction in fugitive emissions and a
general optimisation of consumptions. In 2021, the index
registered a value of 20.2 tonsCO2eq./mgl boe, up 1% vs. 2020.
The overall reduction vs. to 2014 is 25% and in line with the
2025 target.
Routine zero gas flaring in 2025 in upstream operated assets:
in 2021, the volumes of hydrocarbons sent to routine flaring, equal
to 1.16 billion Sm3, increased by 12% compared to 2020, mainly
due to the resumption of activities at the Abu-Attifel and El Feel
plants in Libya, which had been shutdown for most of 2020. The
overall reduction from 2014 is 31%, in line with the 2025 target.
Reduction of upstream methane fugitive emissions by 80% in
2025 vs. 2014: in 2021, upstream fugitive methane emissions
amounted to 9.2 ktCH4, a reduction of 18% compared to 2020
thanks to the monitoring and maintenance activities as part
of the LDAR (Leak Detection And Repair) campaigns that are
carried out on a periodic basis. The overall reduction compared
to 2014 is 92%, confirming the achievement starting 2019, of
the 80% reduction target set for 2025.
Average improvement of 2% per year in 2021 compared to
2014 in the operational efficiency index: the target extends
the GHG reduction commitment (Scope 1 and Scope 2) to all
business areas with an overall Eni index which in 2021 was
around 32 tonsCO2eq./mgl kboe, slightly increased compared
to 2020 mainly due to the resumption of activities, not yet fully
operational. This effect was partially offset by energy efficiency
projects started or completed during the year.
In 2021, Eni went ahead with its investment plan both in projects
aimed directly at increasing energy efficiency in assets (€10M)
and in development and revamping projects with significant
effects on the energy performance of operations.
Overall, direct GHG emissions deriving from the assets operated
by Eni in 2021 amounted to 40.1 million tons of CO2eq., up 6%
compared to 2020, mainly due to the resumption of activities in
the upstream and gas transport, power and chemical sectors.
to short-term decarbonization
With specific reference
targets, defined on operated assets and accounted for on a
In 2021, the Renewables business grew significantly, reaching an
installed capacity from renewable sources of 1,188 MW (more
Management report | Consolidated financial statements | Annex 164
than triple the result of 2020). This acceleration, obtained mainly
as a result of the recent acquisitions in Europe and the United
States, has also been carried out with the broader perspective of
integration with Plenitude's retail business, in order to exploit all
the possible synergies between the two businesses.
Renewable energy production reached 1,166 GWh (about
triple the result of 2020), due to the greater installed capacity
(in particular thanks to recent plant acquisitions in Europe
KPIS RELATED TO MEDIUM-LONG TERM TARGETS22
and the United States). Compared to 2020, the production
of biofuels has declined due to stops at the biorefinery in
Venice, in a less favourable scenario.
For 2021, the financial commitment of Eni in scientific research
and technological development amounted to €177 million, of
which 114 was spent on decarbonization and circular economy.
These investments are related to energy transition, bio-refinement,
green chemistry, production from renewable sources, reduction
of emissions and energy efficiency.
Net Carbon Footprint upstream (Scope 1+2)
(million tonnes CO2eq)
Net Carbon Footprint Eni (Scope 1+2)
Net GHG Lifecycle Emissions (Scope 1+2+3)
Net Carbon Intensity (Scope 1+2+3)
Renewable installed capacity(a)
Capacity of biorefineries
2021
2020
2019
11.0
33.6
456
67
11.4
33.0
439
68
351
1.11
14.8
37.6
501
68
190
1.11
(gCO2eq./MJ)
MW
1,188
(milion tonnes/year)
1.10
(a) This KPI represents Eni's share and relates primarily to Plenitude. 2020 and 2019 values have been appropriately restated.
KEY PERFORMANCE INDICATORS
Direct GHG emissions (Scope 1)
(million tonnes CO2eq.)
Target
UPS Net zero 2030
Eni Net zero 2035
Net zero 2050
Net zero 2050
60 GW 2050
6 million tonnes/year 2035
2021
2020
2019
of which fully
consolidated
entities
25.24
21.87
3.00
0.24
0.12
46.12
23.12
Total
37.76
29.70
6.13
1.64
0.29
Total
41.20
32.27
6.49
1.88
0.56
31.64
31.41
19.98
19.58
Total
40.08
30.58
7.14
2.12
0.24
(tonnes CO2eq./kboe)
31.95
20.19
(gCO2eq./kWheq)
379.6
379.4
391.4
394
(tonnes CO2eq./ktonnes)
228
(ktonnes CH4)
(billion Sm3)
(million tonnes CO2eq.)
9.2
2.2
1.2
0.81
176
(GWh)
1,166
(GJ/toe)
(toe/MWheq)
1.45
0.16
228
4.5
1.1
0.4
0.70
N.A.
880
N.A.
0.16
248
11.2
1.8
1.0
0.73
185
393
1.52
0.17
248
21.9
1.9
1.2
0.69
204
61
1.39
0.17
(%)
116.4
116.4
124.8
112.7
(€ million)
(number)
177
114
30
11
(ktonnes)
585
177
114
30
11
585
157
74
25
7
622
194
102
34
15
256
of which: CO2 equivalent from combustion and process
of which: CO2 equivalent from flaring(a)
of which: CO2 equivalent from venting
of which: CO2 equivalent from methane fugitive emissions
Carbon efficiency index (Scope 1 and 2)
Direct GHG emissions (Scope 1)/100% operated hydrocarbon
gross production
Direct GHG emissions (Scope 1)/Equivalent
electricity produced (EniPower)
Direct GHG emissions (Scope 1)/Refinery throughputs
(raw and semi-finished materials)
Methane fugitive emissions (upstream)
Volumes of hydrocarbon sent to flaring
of which: routine flaring
Indirect GHG emissions (Scope 2)
Indirect GHG emissions (Scope 3) from use of sold products(b)
Electricity produced from renewable sources(c)
Energy consumption from production activities/ 100% operated
hydrocarbon gross production (upstream)
Net consumption of primary resources/ Equivalent
electricity produced (EniPower)
Energy Intensity Index (refineries)
R&D expenditures
of which: related to decarbonization
First patent filing applications
of which: filed on renewable sources
Sold production of biofuels
Unless otherwise indicated, the emission and consumption KPIs refer to 100% data of the assets operated.
(a) From 2020, the indicator includes all Eni emissions deriving from flaring, also aggregating the contributions of Refining & Marketing and Chemistry, which until 2019 are accounted for in the
combustion and process category.
(b) Category 11 of the GHG Protocol – Corporate Value Chain (Scope 3) Standard. Estimates based on upstream (Eni's share) production sold in line with IPIECA methodologies.
(c) In line with the company's strategic objectives, this indicator is reported on an equity basis. This KPI represents Eni's share and relates primarily to Plenitude. 2020 and 2019 values have been
appropriately restated.
(22) Indicators accounted for on an equity basis.
Eni Annual Report 2021
OPERATIONAL EXCELLENCE
The operational excellence model is based on the constant
commitment to consolidating and developing skills in line
with new business needs, enhancing its people in all areas
(professional and non-professional), and ensuring health and
safety, environmental protection, respect and promotion of
human rights and attention to transparency and anti-corruption.
165
People
in
its
line with
The Eni business model is based on internal competencies,
an asset in which Eni continues to invest to ensure their
alignment with business needs,
long-
term strategy. Planned evolution of business activities,
strategic directions and the challenges posed by changes
in technology and the labour market in general imply an
important commitment to increase the value of human
capital over time through upskilling and reskilling initiatives,
aimed at enriching or redirecting the set of skills required.
Eni's commitment on human rights has also included an
instrument for monitoring of human rights in the workplace
(see chapter "Human rights").
A CULTURE OF PLURALITY
AND PEOPLE DEVELOPMENT
Eni's approach to Diversity & Inclusion (D&I) is based not
only on the fundamental principles of non-discrimination
and equal opportunities but on the active commitment to
creating a working environment where different personal
and cultural characteristics or orientations are considered a
source of mutual enrichment and an indispensable element
of business sustainability. Eni ensures that all its people are
treated fairly regardless of any differences in gender, religion,
nationality, political opinion, sexual orientation, social status,
physical abilities, medical conditions, family circumstances
and age and any other irrelevant aspects; furthermore, Eni
aims to establish working relationships free from any form of
discrimination, requiring that similar values are adopted by all
third parties working with Eni. Diversity is in fact a resource to
be safeguarded and enhanced both within the Company and
in all relations with external stakeholders, including suppliers,
commercial and industrial partners, as underlined by its mission
and Code of Ethics. To develop the business strategy on D&I
and coordinate the portfolio of initiatives, a unit dedicated to D&I
issues was established in 2021. To identify the priority objectives
in this area, listening initiatives have been activated by the top
management (D&I as a strategic lever for business objectives)
and Eni people (surveys, focus groups and the activation of a
direct communication channel with the people concerned) to
receive warning signals and thoughts on D&I. Activities for the
inclusion and enhancement and development of diversity in the
company are also ongoing, in particular Eni promotes cross
professional exchange through a series of processes, including
geographical mobility, as an important experience in the path
of personal growth. The consolidation over the years of the
processes of induction of new recruits, coaching, training and
sharing of skills and best practices with local personnel has
ensured continuity in operating activities, characterized by many
returns to headquarters and few expatriates in recent years.
With regard to gender diversity, Eni pays particular attention to
the promotion of initiatives to attract female talents at a national
and international level, and to the development of managerial
and professional growth paths for the women in the Company.
In this context, Eni organizes initiatives for high school students
in STEM (Science, Technology, Engineering and Mathematics)
subjects, with a focus on gender equality (Think About Tomorrow)
and participates in national and international initiatives23 with
the aim of constantly enhancing its processes and operating
practices with a view to gender equality. These activities have
continued throughout the year through the “dematerialization” of
events and meetings that has allowed reaching places, people
and realities inaccessible to date, breaking down language and
geographical barriers.
Remuneration policies for Eni employees are defined according
to an integrated model at global level and promote salary
progression linked exclusively to meritocratic criteria referring to
the skills expressed in the role held, the performance achieved
and the references of the local remuneration market. In order
to verify the implementation of these policies, since 2011, Eni
has annually monitored the remuneration gap between women
and men, noting the substantial alignment of remuneration
(total pay ratio Italy women vs. men equal to 101 for the fixed
(23) Inspiring Girls Project - International project against stereotypes about women; "Manifesto for women's employment" by Valore D - Programme document to enhance
female talent in businesses promoted by Valore D and sponsored by the Italian Presidency of G7 and the Department for Equal Opportunities of the Italian Prime Minister's
Office; Elis - Sistema Scuola Impresa Consortium; Fondazione Mondo Digitale; WEF - World Economic Forum; ERT - European Round Table.
Management report | Consolidated financial statements | Annex 166
salary and 98 for the total salary). In addition, in relation to ILO
(International Labour Organization) standards, Eni performs
annual analyses on the remuneration of local personnel in the
main Countries in which it operates, which show minimum
salary levels of Eni personnel significantly higher than both the
minimum legal salaries and the minimum market remuneration
levels, identified for each Country by international providers
(for further information, see Report on remuneration policy
and remuneration paid 2022). Relating to the professional
management of its resources, Eni has implemented managerial
development and excellence pathways aimed at the core
professional areas, which it supports through training activities,
mobility initiatives, job rotation and development tools. Eni uses
various assessment tools to support these pathways, including
the annual review, the performance and feedback process with
a focus on senior managers, middle managers and young
graduates and soft skills assessment processes. 2021 also
saw a reduction in mobility initiatives, especially international
ones, however, the internal growth and development continued,
held remotely. In 2021, the performance assessment and
management review process covered 94% while potential
assessment activities were 100% of the total programmed
with an overall improving trend (+5 p.p. vs. 2020); finally, senior
managers and middle managers were assessed using the
Management Appraisal methodology.
TRAINING
Also in 2021, the commitment to training activities continued with
a focus on transition and strategic and business development.
In fact, to support the process of corporate transformation,
the redevelopment process continued through upskilling and
reskilling initiatives (in 2021, for example, a training project
linked to the expansion contract was presented to the Ministry
of labour and social policies, consisting of various training paths)
to integrate new professional and behavioural skills necessary
for the evolution of businesses, or for the challenges posed
by technological evolution and the labour market. In order to
support people to best contribute to the profound business
transformation, two new training initiatives were developed in
2021: a leadership path aimed at managers and team leaders,
the other open to all Eni people with the use of a Web App. HSE
training initiatives also remain a priority for Eni through the timely
provision of mandatory training and the provision of additional
HSE training to support the Business. In addition, in May 2021 the
new MyChange digital platform was created, as a support tool
for Eni people for the change in progress, in which issues such as
the Eni Mission, energy transition, the Sustainable Development
Goals, Diversity & Inclusion and others are explored.
INDUSTRIAL RELATIONS
In December 2020, the protocol INSIEME, a model of industrial
relations to support the energy transition path was signed
with the national trade unions. With this protocol, Eni and the
in the following paragraph).
trade unions considered it increasingly important to accelerate
the energy transition process and shared that this process
will require a transparent sharing of information, goals and
initiatives and for this reason they considered that an even
more effective and participatory system of industrial relations
is necessary to accompany the transformation processes
that combine economic sustainability with the principles
of environmental and social sustainability. In April 2021, the
expansion contract was signed with the trade unions at the
Ministry of Labour and Social Policies, which made it possible
to promote generational change, with the introduction of new
skills and new trades, significant investment for the training
and retraining of Eni people, confirming the great strategic
importance that the company attributes to skills. In October
2021, the new agreement for Smart Working in Italy was
signed. With this agreement, organizational Smart Working
was strengthened (providing for 8 days/month for office
locations and 4 days/month for operational sites) with the
addition of new types of Smart Working to support corporate
welfare (described
In the
agreement, the workers’ fundamental right to disconnection is
ensured, introducing precise standards and basic measures to
be respected for remote work in order to support the correct
balance between working life and private life and avoid negative
effects that the prolonged use of digital tools can determine
on health and well-being, while trade union rights have been
guaranteed, also operating remotely, also strengthening the
measures to protect the safety of people.
In December 2021, the international industrial relations meetings
and the 24th meeting of the EWC of Eni employees, the European
Observatory for Health, Safety and the Environment and the
annual meeting provided for by the Global Framework Agreement
on International Industrial Relations and Social Responsibility of
the Company on the issues of sustainability, decarbonization,
health and safety of workers and with a focus on the theme of
diversity & inclusion, for the enhancement of diversity, as an
element of enrichment of experiences in the social and work
context. During the meeting, the Agreement for integration
into the GFA – Global Framework Agreement on International
Industrial Relations and Corporate Social Responsibility – of
ILO Convention No.190 and ILO Recommendation No. 206 on
eliminating violence and harassment in the world of work was
also signed.
CORPORATE WELFARE AND WORKLIFE BALANCE
Despite the difficult context,
in 2021, continuity was
guaranteed for services to people and a safe and compliant
way of organizing initiatives.
In the 2021 agreement on Smart Working, described in
the previous paragraph, new types of Smart Working have
been introduced that can be requested by Eni people to
support parenting, disability and that generally guarantee
greater attention to the needs of employees at different
Eni Annual Report 2021 167
stages of life: Smart Working to support pregnant women,
“welcome kid” and new-parent Smart Working for mothers
and fathers with children aged up to 3 years, “summer kid”
Smart Working to support the management of children in
the periods of school closure and Smart Working to protect
their own health or that of their children. Finally, again in
relation to parenting, in all countries where Eni operates, it
continues to recognise: 10 working days 100% paid to both
parents, 14 minimum weeks' leave for the primary carer as
per the ILO convention and the payment of an allowance
equal to at least 2/3 of the salary received in the previous
period. The training/information paths dedicated to parents
were also proposed again to support them in understanding
a constantly redefining context, while the fragility service
was confirmed, which through a contact centre provides
support and advice to caregivers to tackle problems related
to the management of elderly or dependent family members
and for the care of children and young people with specific
learning disorders. Also in 2021, Eni guaranteed support
for working parents by offering a nursery school service
by implementing all actions aimed at mitigating the risk
of infection and protecting the safety and organization of
summer camps with a revised proposal to ensure maximum
protection for participants without affecting the quality of
the proposals.
HEALTH
Eni considers health protection an essential requirement
and promotes the physical, psychological and social well-
being of its people, their families and the communities of
the Countries in which it operates (see chapter "Alliances for
development"). The extreme variability of working contexts
requires a constant effort to update health risk matrices and
makes it particularly challenging to guarantee health at every
stage of the business cycle. To rise to this challenge, Eni has
developed an operational platform that ensures services to
its people, covering occupational health, industrial hygiene,
traveller health, healthcare and medical emergency, as well
as the assessment of the impacts of business operations
on the health of communities, as well as health promotion
initiatives for Eni people and the communities in which it
operates. Eni's strategy for health management is oriented,
in addition to maintaining and continuously
improving
health services, to: (i) enhancing access to assistance for
all Eni people; interventions in favour of communities and
emergency provisions to support situations of fragility
created or aggravated by the pandemic; (ii) spreading the
culture of health through initiatives in favour of workers,
identified downstream
their families and communities
of risk assessment and impacts in the health field; (iii)
implementing occupational medicine activities also
in
consideration of the risks inherent to new projects, industrial
processes and the results of industrial hygiene activities;
(iv) promoting the digitalization of health processes and
services. In 2021, all of the Group companies continued the
implementation of health management systems with the
objective of promoting and maintaining the health and well-
being of Eni people and ensuring adequate risk management
in the workplace. Among the initiatives launched during
the year, we also highlight those aimed at supporting the
psychosocial well-being of Eni people, with the aim of
creating an environment attentive to the quality of life, inside
and outside the company: since February 1st, a psychological
listening service has been launched, active 24 hours a day, 7
days a week, dedicated to Eni people both in Italy and abroad;
since November 27 in conjunction with the international day
against gender violence, a counselling service has been
activated for victims of violence or gender harassment. In
the critical global health context, Eni has implemented a
series of prevention and assistance interventions in order to
support those in the front line managing health emergencies
and local health structures, also thanks to the numerous
experiences
in response to
epidemic events around the world24. In fact, the Eni centre of
competence for the management of health emergencies has
supported the business units through: (i) epidemiological
updates and new guidelines issued by international bodies,
(ii) hygiene measures for the prevention and containment
of outbreaks and epidemics/pandemics, (iii) clinical and
care flow management best practices, vaccinations and
recommendations for travel medicine and (iv) support in
defining technical specifications for services related to
emergency response.
in health projects gained
PERFORMANCE METRICS AND COMMENTS
EMPLOYMENT AND DIVERSITY
Overview - Overall employment amounts to 31,888 people, of
whom 20,632 in Italy (64.7% of Eni's employees) and 11,256
abroad (35.3% of Eni's employees). In 2021, employment at
global level grew by 1,113 people compared to 2020, equal to
+3.6%, with a decrease in Italy (-538 employees) and growth
abroad (+1,651 employees). Employment growth is linked to
Eni's development plans as part of the initiatives to support
the energy transition, also through the acquisition of new
companies operating in the renewable energy and circular
economy sectors. Despite the discontinuity of the energy
market, Eni continued to pursue its diversity objectives: in
(24) For health-related initiatives carried out in favour of the local community in Italy and abroad, see the chapter Alliances for development on pp. 186-187.
Management report | Consolidated financial statements | Annex 168
2021, the number of female employees grew by 1.6 percent
compared to 2020, with simultaneous growth also in positions
of responsibility (0.7 percent vs. 2020).
than the country of origin. Eni's population consists of 108
different nationalities.
Hires - Overall, in 2021, 1,305 people were hired, 967 of whom
with permanent contracts. About 81%25 of permanent contracts
involved employees up to the age of 40. Of the total number of
hires, approximately 58% in DG Energy Evolution (total 754 of
which 612 permanent and 142 permanent), 30% in the Natural
Resources Department (total 389 of which 233 permanent and
156 fixed-term) and the remaining 12% in Support Function
(total 162 of which 122 permanent and 40 fixed-term).
Terminations - 2,517 contracts were terminated (1,694
in Italy and 823 abroad), 2,275 of which were permanent
contracts26, and 27% regarded female employees.
In
2021, 25%25 of employees with permanent contracts who
ended their employment were under 50 years of age. Eni's
transformation process, which requires a strong skills
turnover, is also reflected in the trend in the turnover rate,
which in 2021 was the highest of the last 3 years (2019:
9.8%, 2020: 6.1%; 2021: 10.5%).
Diversity & Inclusion - In 2021, the percentage of female staff
grew by 1.6% compared to 2020 and stood at 26.2%, divided
as follows: 16.7% of executives, 28.5% of middle management,
30.1% of white collar workers, 14.7% of blue collar workers. The
overall percentage of women on the control bodies of subsidiaries
increased to 43% (37% in 2020), while the overall percentage of
women on the management bodies of subsidiaries decreased
slightly compared to the past to 24% in 2021 (26% in 2020). In
2021, the percentage of women in positions of responsibility
rose to 27.3% compared to 26.6% in 2020, in all, women
accounted for 26.22% of the total workforce. At Eni, 33% of the
figures reporting directly to the CEO are women. There were 314
permanent female hires in 2021 out of 967, counting for 32.46%,
down slightly on 2020 (approx. -2 p.p.).
The reason for this slight decrease is attributable mainly
to the extraordinary plan of the 2021 redundancies carried
out in Italy through the expansion contract that facilitated
the termination of female staff together with a targeted
and extremely selective recruitment of resources from the
external market with priority on business sectors and critical
activities (e.g. asset integrity, operational activities, etc.).
In recent years, approximately 20% of resources holding
positions of responsibility are non-Italian, with an increase of
2 p.p. in 2021 compared to 2020; this increase falls within
the scope of professional development paths that provide for
periods of activity in Eni offices in Italy or in countries other
(25) Figures not including Finproject group acquired during Q4 2021.
(26) Of these, about 68% were for retirement and 26% for resignation.
Employment in Italy - There were 596 hires in Italy, of which
460 permanent contracts (32.4% women). The reduction
in employment of -538 units (-3%), carried out through
an extraordinary exit plan, together with a selective and
punctual turnover plan, has allowed the population under
30 to increase by 4% in favour of a reduction in the senior
age groups: the population over 50 has decreased by 1.5%.
Again in Italy, in 2021 there were 1,694 terminations, 1,658 of
whom were permanently employed (of which 26% women).
Overall, in Italy at the end of 2021 there was a replacement
ratio between new hires and terminations of approximately
1:3.6 (1 hire vs. 3.6 terminations).
Employment abroad - Average presence of local employees
abroad is constant and around 86% in the last three years
on average, that confirms Eni commitment to local content
through the engagement of local communities in its business
activities in the Countries. Use of expatriate personnel is limited
to specific expertise and competences hardly available in the
Country. Abroad, in 2021, there were 709 new hires, of which
507 with permanent contracts (32.5% women). The population
of employees under the age of 30 has doubled (in part due to the
Finproject acquisition).
The balance between hires and terminations abroad at the end
of the year was -114 (+709 hires and -823 terminations) and
this trend is also attributable to contractual terminations of
international resources employed in the E&P business. There
were 823 terminations, 617 of whom permanently employed.
Of these, 40%25 regarded employees under the age of 40, and
29%25 were women. Abroad, there was an increase of 1,651
resources compared to the previous year (+17.2%), mainly
referring to +1,624 local resources (+19.5%), Italian expatriates
+24 (+2.5%) while the number of international expatriates
remained substantially stable +3 (+1%). The growth in local
personnel is mainly due to extraordinary M&A operations. A
total of 1,305 expatriates work abroad (992 Italians and 313
international expatriates).
Employment by business line - About 35% of permanent hires
were in the chemical sector, which has strengthened both in
countries with traditional activities (e.g. France, UK, Hungary)
and in countries with new activities (e.g. Mexico, India, Romania,
Vietnam). Growth also concerned the Retail G&P (France and
Greece) and GT/R&M (UK, Germany and Ecuador) business
areas, which further consolidated their competitive structure.
Terminations mainly concerned the Upstream (30%), Chemical
(24%) and GT/R&M (18%) businesses.
Eni Annual Report 2021
169
Average age - The average age of Eni’s people in the world
is 45.1 years (46.4 in Italy and 42.8 abroad): 49.3 years (50.1
in Italy and 47.2 abroad) for senior and middle managers,
44.4 years (45.5 in Italy and 42.3 abroad) for white collars
workers and 41.9 years (40.7 in Italy and 43.9 abroad) for
blue collars workers.
INDUSTRIAL RELATIONS
In Italy, 100% of employees are covered by collective bargaining
by virtue of current regulations. Abroad, in relation to the
specific regulations operating in the individual countries, this
percentage stands at 41.6%. In countries where employees are
not covered by collective bargaining, Eni ensures in any case full
compliance with international and local legislation applicable to
the employment relationship as well as some higher standards
of protection guaranteed by Eni throughout the group through
the application of its company policies worldwide.
TRAINING
In continuity with 2020, 2021 was still marked by a
predominance of distance learning compared to that in the
classroom, continuing to manage the pandemic emergency
(67% as in 2020). The total hours of training remained stable
compared to 2020 (-0.3%) with an increase in average
expenditure due to an increase in the training courses
designed for Businesses to also respond to the needs of the
expansion contract.
HEALTH
In 2021, the number of health services sustained by Eni was
379,481, of which 261,618 for employees, 43,835 for family
members, 70,970 for contractors and 3,058 for others (e.g.
visitors and external patients). The number of participants in
health promotion initiatives in 2021 was 158,784, of whom
85,776 were employees, 58,031 contractors and 14,977 family
members. As concerns occupational illnesses, in 2021 there
were 30 claims, of which 7 related to current employees
and 23 related to former employees. Of the 30 occupational
disease claims submitted in 2021, 4 were submitted by heirs
(all relating to former employees).
Finally, in 2021, with the aim of assessing the potential
impacts of the projects on the health of the communities
involved, Eni completed 10 HIAs (Health Impact Assessment),
of which 7 were integrated ESHIA preliminary studies
(Environmental, Social and Health Impact Assessment) and
3 as integrated ESHIA.
Management report | Consolidated financial statements | Annex 170
KEY PERFORMANCE INDICATORS
Employees(a)
2021
2020
2019
(number)
31,888
30,775
31,321
Women
Italy
Abroad
Africa
Americas
Asia
Australia and Oceania
Rest of Europe
Under 30(b)
30-50(b)
Over 50(b)
Local employees abroad
Employees by professional category:
Senior managers
Middle managers
White collars
Blue collars
Employees by educational qualification:
Degree
Secondary school diploma
Less than secondary school diploma
Employees with permanent contracts(c)
Employees with fixed term contracts(c)
Employees with full-time contracts
Employees with part-time contracts(d)
New hires with permanent contracts
Terminations of permanent contracts
Turnover rate(e)
Local senior managers & middle managers abroad
Non-italian employees in positions of responsibility
Seniority
Senior managers
Middle managers
White collars
Blue collars
Presence of women on the management bodies of Eni subsidiaries
Presence of women on the Boards of Statutory Auditors control bodies of Eni subsidiaries(f)
Training hours
Average training hours per employee by employee category(g)
Senior managers
Middle managers
White collars
Blue collars
Average training and development expenditure per full time employee(g)
Employees covered by collective bargaining
Italy
Abroad
Occupational illnesses allegations received
Employees
Previously employed
8,360
20,632
11,256
3,189
1,731
2,786
88
3,462
2,587
17,302
11,999
88
7,559
21,170
9,605
3,143
925
2,432
87
3,018
2,037
17,225
11,513
87
7,590
21,078
10,243
3,371
1,005
2,662
88
3,117
2,315
16,646
12,360
81
966
9,113
965
9,172
1,021
9,387
15,554
15,941
16,050
6,255
4,697
4,863
15,583
13,564
2,741
15,345
12,826
2,604
15,375
13,184
2,762
31,111
30,165
30,571
777
610
750
31,423
30,290
30,785
465
967
2,275
10.5
18.03
20.6
22.77
19.59
16.56
13.23
24
43
485
607
1,323
6.1
19.13
18.6
23.21
20.40
17.03
14.15
26
37
536
1,855
1,198
9.8
16.65
17.3
22.78
20.00
16.73
13.55
29
37
(%)
(number)
(%)
(years)
(%)
(number) 1,037,325 1,040,119 1,362,182
33.8
34.7
35.7
32.8
33.9
895.8
81.6
100
41.6
30
7
23
33.3
28.3
31.8
35.9
28.4
716.1
83.40
100
41.78
28
7
21
43.6
51.0
42.0
43.9
44.3
1,070.8
83.03
100
40.91
73
9
64
(€)
(%)
(number)
(a) The data differ from those published in the Financial Report (see p. 18), because they include only fully consolidated companies.
(b) The 2020 and 2019 values have been appropriately restated to comply with the GRI 405-1 requirement related to changing age groups.
(c) Net of extraordinary M&A operations, the breakdown of fixed-term/permanent contracts does not vary significantly either by gender or by geographical area with some exceptions including
China and Mozambique where it is common practice to hire local fixed-term resources and then stabilise them over a period of 1-3 years.
(d) There is a higher percentage of women (5% of the total number of women) with part-time contracts, compared to men, about 0.2% of the total number of men.
(e) Ratio of the number of Hires + Terminations of permanent contracts and the permanent employment contracts of the previous year.
(f) For abroad, only the companies in which a supervisory body similar to the Board of Statutory Auditors under Italian law operates were considered.
(g) The 2020 data has been updated due to an error in the formula used for the calculation.
Eni Annual Report 2021
171
Safety
including
Eni is constantly engaged in research and development for all
the necessary actions to be taken to ensure safety at work,
in particular in the development of organizational models
for risk assessment and management and in the promotion
of a culture of safety, in order to pursue its commitment
eliminating accidents.
In 2021, several projects and
initiatives were promoted mainly focused on the following
issues: (i) behavioural safety and Human Factor, with the
application at the operating sites of an Eni methodology
(THEME), developed in collaboration with the University
of Bologna, to identify and analyze incorrect behaviours
and habits,
the cultural and organizational
components, that characterize and influence the action of
workers, and strengthen the role of the person as an active
agent and first barrier in preventing any incidental event;
(ii) Digital Safety, through the creation of digital tools to
promote the HSE culture, facilitate the activities in the field
and support the analysis and reporting of HSE risks; (iii)
Process Safety Fundamentals, widespread dissemination,
through in-depth sessions dedicated to employees and
contractors, of the 10 Eni rules on the safety of processes
and assets. In addition to these innovative activities, Eni
continued to pay particular attention to reinforcing safety
during activities at operating sites, further standardizing in
special regulatory instruments, valid for all Eni entities, the
minimum basic principles to be applied in the most critical
activities and developing training courses to
increase
operators’ knowledge and awareness of the minimum safety
requirements. Regarding the management of contractors,
the 147 people of the Safety Competence Centre (SCC)27
continued to proactively monitor and support the process of
improvement of companies towards management models
characterised by a safety culture that is more preventive
than reactive, monitoring over 2,500 suppliers, equal to
70% of those with potential HSE criticalities in Italy, and
managing the anomalies detected with immediate corrective
actions and sharing innovative good practices. In addition,
agreements (so-called “Safety Pacts”) were developed with
various contractors operating in Nigeria, Tunisia, Congo and
Mexico. Furthermore, Eni applies the Asset Integrity process
to its assets and ensures they are well-designed, well-built
and with the most appropriate materials, well run, and
decommissioned properly, by managing residual risk with
the aim of guaranteeing maximum reliability and, above all,
safety of people and the environment. The Asset Integrity
Management System develops from the initial design stage
(Design Integrity), to procurement, construction, installation
and testing (Technical Integrity) through to operational and
decommissioning (Operating Integrity). During 2021, Eni
continued the organization of initiatives to further promote
the Asset Integrity culture with a cross and widespread
approach, also including the new energy transition supply
chains. With regard to industrial hygiene, great attention
was paid to the identification and management of personal
protective devices (PPE) and various specific training
initiatives were promoted for workers. Within the emergency
field, particular attention was paid to the prevention and
management of emergencies induced by natural risks and
in November 2021 a Memorandum of Understanding was
signed with the Department of Civil Protection, to further
strengthen cooperation relationships and define specific
emergency plans for each type of risk with an impact on the
continuity of energy supply on the national territory. The main
company objectives in 2021 in terms of industrial safety
and hygiene were: (i) the improvement of the SIR (Severity
Incident Rate), an internal Eni index weighted against the level
of severity of accidents and used in the short-term incentive
plan of the CEO and managers with strategic responsibilities,
in order to focus Eni's commitment on reducing the most
severe accidents; (ii) the consolidation of the Safety Culture
Programme, an indicator that monitors the level of pro-activity
through aspects of preventive safety management; (iii) the
application of the methodology for analysing the human
factor THEME in operational sites; (iv) the dissemination
and application of Eni risk management tools on operational
sites; (v) the continuation of the dissemination of the 10
Process Safety Fundamentals; (vi) the extension on all Eni
sites of projects that apply new technologies and new digital
devices to support safety; (vii) the strengthening of oversight
in specific areas of industrial hygiene.
PERFORMANCE METRICS AND COMMENTS
In 2021, the total recordable injury frequency ratio (TRIR)
of the workforce improved compared to 2020 (-4%), thanks
to the performance recorded by contractors (-10%), while
the employee ratio deteriorated due to the increase in the
number of accidents (33 compared to 30 in 2020).
The ratio for injuries at work with serious consequences is
null, since there were no events falling into this category
(i.e. no injuries with more than 180 days of absence or with
consequences such as total or partial permanent disability).
In addition, no fatal accidents were recorded.
(27) Eni Centre of Excellence on Safety, which supports Eni industrial sites in Italy and abroad in the coordination and supervision of contract work.
Management report | Consolidated financial statements | Annex
172
In Italy, the number of total recordable injuries increased (35
events compared to 27 in 2020, of which 21 employees and
14 contractors) and the total recordable injury frequency
ratio (TRIR) deteriorated (+26%); abroad, the number of
injuries decreased (53 events compared to 64 in 2020,
of which 12 employees and 41 contractors) and the total
recordable injury frequency ratio improved by 17%.
KEY PERFORMANCE INDICATORS
2021
2020
2019
TRIR (Total Recordable Injury Rate)
(total recordable
injuries/hours worked) x 1,000,000
Employees
Contractors
Number of fatalities as a result of work-related injury
(number)
Employees
Contractors
High-consequence work-related injuries rate
(excluding fatalities)
(high-consequence work-related
injuries/hours worked) x 1,000,000
Employees
Contractors
Near miss
Worked hours
Employees
Contractors
(number)
(million of hours)
of which fully
consolidated
entities
Total
Total
0.46
0.53
0.42
0.36
0.37
0.35
0
0
0
0
0
0
1
0
1
0
0
0
0.34
0.21
0.39
3
1
2
0.01
0
0.01
565
841
1,159
155.2
255.1
334.2
54.3
81.8
92.1
100.9
173.3
242.1
Total
0.34
0.40
0.32
0
0
0
0
0
0
780
256.5
82.9
173.6
Respect for the environment
Eni operates in very different geographical contexts, which
require specific assessments of the environmental aspects,
and is committed to strengthening control and monitoring of its
activities by adopting international technical and management
good practices and Best Available Technology. Particular
attention is paid to the efficient use of natural resources, like
water, to reducing oil spills, to managing waste, to managing
the interaction with biodiversity and ecosystem services. For
Eni, environmental culture is an important lever for the correct
management of environmental issues and for this reason in
2021 it continued with the awareness-raising activities that
involved the operating sites (with surveys on environmental
culture for employees, information sessions and site-specific
interventions on Environmental Cultural Engagement) and
environmental communication launched in 2020, to raise
awareness among all employees and strengthen commitment.
During the year, about 2,000 people participated in the
"Together for the environment" training course and about
300 people were updated on environmental risks; the new Eni
methodology for integrated risk assessment common to the
entire company was also presented via webinars in Italy and
abroad. In addition, the Environmental Golden Rules were also
developed and issued in 2021, to promote virtuous behaviours
of employees and suppliers, and the campaign for their
promotion among all Eni people, as well as suppliers, whose
activities must reflect Eni values, commitment and standards.
During the year, the dissemination of environmental culture led
to the signature of 15 Environment and Safety Pacts involving
several suppliers who have committed to implement tangible
improvement actions that can be measured through the Safety
and Environment Performance Index. In continuity with last
year, the company has continued the activities dedicated to
environmental digitisation for process optimisation through
the creation of IT tools for the management of environmental
Eni Annual Report 2021
173
requirements and deadlines deriving
compliance, including international compliance, and site-
specific technical-management assessment models. For
example, the Easy Permit platform has been developed in the
main operating sites to support the management of regulatory
obligations,
from
environmental authorization processes.
The transition path towards a circular economy represents
for Eni one of the main responses to current environmental
challenges, through the promotion of a regenerative model.
This approach is based on the revision of the Company’s
production processes and the management of its assets,
reducing the withdrawal of natural resources in favour of
materials from renewable sources in favour of sustainable
inputs, reducing and enhancing waste through recycling or
recovery actions and extending the useful life of products and
assets through reuse or reconversion actions; in the case of
CO2, also removing and offsetting the residual part present in
the atmosphere. For example, the conversion of refineries to
biorefineries plays a central role for the total decarbonization
of products and processes by 2050; it is also expected that
by 2023 palm oil will no longer be used in production cycles,
replaced by alternative (e.g. used and frying food oils, animal
fats and waste from the processing of vegetable oils) and
advanced products (e.g. lignocellulosic material, and bio-oils).
The production of biomethane also falls within the context of
the circular economy, allowing the enhancement of agricultural
and livestock waste and waste water. Eni has also developed
the Waste to Fuel technology for the transformation of organic
biomass into bio-oil and biomethane with recovery of the water
naturally contained in the wet waste. The bio-oil produced
can be mixed in the low-sulphur fuel for maritime transport
or refined to obtain biofuels, while the recovered water can
be used for industrial purposes. Eni has also developed
a Circularity analysis model, applied to different business
contexts, validated by a third-party certification body, which is
an essential tool for the control, management, transparency
and credibility of the goals and commitments undertaken on
the path towards a circular economy model.
Eni's waste management pays particular attention to the
traceability of the entire process and to the verification of
the parties involved in the disposal/recovery chain, in order
to ensure compliance with regulations and the environment.
Eni also envisages that all feasible solutions aimed at waste
prevention should be sought. Almost all Eni waste in Italy
is managed by Eni Rewind28 which in 2021 continued the
digitalization project launched in 2020 for the efficiency and
monitoring of its waste management process.
recovery/disposal solutions, prioritising
In order to limit the negative impacts related to waste (e.g.
loss of resources, possible contamination of environmental
matrices due to possible unapproved management, impacts
related to transport and treatment at the destination plants),
exclusive use is made of authorised parties, favouring recovery
over disposal, in line with the priority criteria indicated by
European and national regulations. Eni Rewind, on the basis of
the characteristics of the individual waste, selects technically
viable
recovery,
treatment operations that reduce the quantities to be sent for
final disposal and suitable plants at a shorter distance from
the waste production site; furthermore, audits are carried out
on environmental suppliers, to assess their operational waste
management.
With reference to water resources, Eni operates efficient
management by evaluating the use of water and the impacts
of its activities on water resources for the benefit of the
ecosystem, other users and the Company itself. Eni, especially
in stressed areas, carries out the mapping and monitoring of
water risks and drought scenarios to define short, medium
and long-term actions aimed at preventing and mitigating the
effects of climate change, also involving suppliers throughout
the procurement process, from selection and qualification to
the award of the contract. In 2021 Eni published its own position
on water resources29, in which it undertakes to pursue the CEO
Water Mandate and, in particular, to minimise its fresh water
withdrawals in areas under water stress. The commitments
undertaken lead Eni to seek a stewardship for optimal water
management also beyond the industrial boundary, integrated
into the territory and able to minimise the exposure of its
activities to water risk, through an integrated approach at river
basin level. In terms of transparency, also in 2021 Eni gave
a public response to the CDP Water Security questionnaire,
confirming the A- score obtained last year.
With regard to the management of risks associated
with oil spills, Eni is constantly engaged in every area
intervention: prevention, preparedness, followed by
of
mitigation, response and recovery. In the area of prevention,
in Italy the e-vpms®30 system was installed on the pipeline
that connects the Val d’Agri Oil Centre to the Taranto
Refinery and the maintenance and technological update
of this system on the pipeline network in Val d’Agri, and on
other installations, were completed. In Val d’Agri the advance
weather warning monitoring, Kassandra Meteo Forecast31,
was also implemented, applied not only to the continuous
control of pipeline losses, but also to hydrogeological risks,
the management of water discharges and the monitoring
(28) Eni Rewind is Eni’s environmental company that operates in line with the principles of the circular economy to enhance industrial land, water and waste, or those
derived from remediation activities, through sustainable remediation and recovery projects, both in Italy and abroad.
(29) https://www.eni.com/assets/documents/eng/just-transition/2021/eni-e-acqua-eng.pdf
(30) e-VPMS® is a technology for detecting vibro-acoustic variations in the structure of pipelines and in the fluid transported by the same, aimed at identifying potential
spills in progress and interference from third parties. The technological update covered aspects of digitalization and remote diagnostics.
(31) Advance warning system able to support the management of oil and gas pipeline integrity and forecast possible hydrogeological risks related to natural events
(flooding and landslides).
Management report | Consolidated financial statements | Annex 174
of agricultural crops. In Nigeria, where the e-vpms® system
is already operational on the Kwale-Akri and Ogboinbiri-
Tebidaba pipelines, the technological update programme
for the e-vpms® system began, while on the trunkline from
Clough Creek to Tebidaba (52 km), installation work will
continue in 2022. In the meantime, a plan was launched to
extend monitoring to the production network. As part of the
sustainable recovery of places that have been sabotaged,
remediation work is also being carried out using a technology
that makes use of plant species (phyto-remediation) and the
use of these plants is also being assessed for the production
of hydrogen from biomass and for the treatment of both
industrial waste water and contaminated groundwater.
Finally, on the R&D front, experiments continued with various
technologies, including those for monitoring the integrity of
pipelines and fluid storage tanks and tank interconnection
piping. In addition, the development of a methodology for
assessing the risks deriving from natural events, such as
landslides, floods and seismic events, which may involve
pipelines, has been launched. Collaborations continued with
IPIECA and IOGP32 in order to strengthen the capacity to
respond to marine pollution, both through the updating and
dissemination of Good Practices on Oil Spill Preparedness
& Response and in the context of the regional initiative
Global Initiative for West, Central and Southern Africa33, in
2021 some information events were held to increase and
raise awareness among stakeholders on the preparedness
and response to emergencies, also with the participation of
staff from the foreign branches. Finally, asset monitoring
continued within the framework of the OSPRI - Oil Spill
Preparedness Regional Initiative34, in the Caspian Sea, Black
Sea and Central Eurasia regions.
Eni's commitment to Biodiversity and Ecosystem Services
(BES) is an integral part of the Integrated HSE Management
System, confirming
its awareness of the risks for the
natural environment resulting from its sites and activities.
Operating on a global scale in environmental contexts with
different ecological sensitivities and regulatory systems, Eni
has adopted a specific BES management model that has
evolved over time thanks also to long-term collaborations
with recognized international organizations that are leaders
in biodiversity conservation. The BES management model
is aligned with the strategic objectives of the Convention on
Biological Diversity (CBD) and ensures that the interactions
between environmental aspects (such as BES, climate
change, water management) and social aspects (such as
local communities) are
the sustainable development of
identified and managed correctly from the early planning
stages. Through the application of the Mitigation Hierarchy,
Eni gives priority to preventive measures over corrective
ones with the primary objective of no net loss of biodiversity.
The active involvement of stakeholders is fundamental for
the implementation and continuous improvement in the
management of the BES issue and ensures the effective
application of the Mitigation Hierarchy. Consultation and
collaboration with local communities, indigenous peoples and
other local stakeholders helps to understand their expectations
and concerns, determine how ecosystem services and
biodiversity are being used, and identify management options
that include their needs. The involvement of key stakeholders
is an inclusive and transparent process that takes place from
the early stages of a project and continues throughout its life
cycle. Eni biodiversity risk exposure is periodically assessed
by mapping the geographical proximity to protected areas and
areas important for biodiversity conservation. This mapping
allows identifying priority sites where to take action with
higher resolution inquiries to characterize the operational
and environmental context and assess potential impacts to
be mitigated through Action Plans, thus ensuring effective
management of risk exposure. Moreover, since 2019, Eni
has committed not to conduct oil and gas exploration and
development activities within the boundaries of Natural Sites
included in the UNESCO World Heritage List. This commitment
confirms the Biodiversity and Ecosystem Services Policy that
Eni has been following for a long time in its operations, in line
with the corporate mission, and reaffirms both its approach
to nature conservation in every area with a high biodiversity
value and the spread of good management practices in joint
ventures where Eni is not operator. In 2020, Eni adhered to
the “Together with Nature” principles, committing, in addition
to recognizing the close link between climate change and
biodiversity loss, to minimizing risks and maximizing efforts
to protect and conserve existing ecosystems through the
application of Nature-based Solutions, based on rigorous
ecological principles.
PERFORMANCE METRICS AND COMMENTS
In 2021, seawater withdrawals were overall down 4%, due
to the significant decrease recorded at the R&MeC sector
(-188 Mm3) for the maintenance shutdown at the Brindisi
petrochemical plant and due to the end of the functionality
tests on the seawater network that in 2020 had led to an
(32) IPIECA - Association of sustainability on environmental and social issues in the Oil & Gas sector; IOGP - Association of upstream Oil & Gas producers for sharing best
practices on sustainability issues.
(33) Collaboration between the International Maritime Organization (IMO) and IPIECA to improve the capacity of partner Countries to prepare for and respond to marine
oil spills.
(34) Founded by a group of oil and gas companies, including Eni, it aims to encourage and support industry and governments in adopting proven, credible, integrated and
sustainable oil spill response capabilities at national, regional and international levels.
Eni Annual Report 2021 175
increase in the related withdrawals. Freshwater withdrawals,
accounting for about 7% of total water withdrawals and
over 73% attributable to the R&MeC sector, increased by
10%. The trend is mainly attributable to the petrochemical
plant in Mantua (+7 Mm3) where the withdrawals returned to
normal after the minimum of 2020 linked to the stress tests
carried out on site to verify which could be, in favourable
conditions, the minimum consumption of the plant. Eni's
freshwater reuse rate in 2021 remained stable at 91%. The
E&P sector’s produced water re-injection rate increased to
58% (53% in 2020), thanks to the complete resumption of
re-injection activities in Congo (Loango and Zatchi) and
Libya (Abu-Attifel and El Feel). Analysis of the stress level of
hydrographic basins35 and further studies carried out locally
shows that freshwater withdrawals from areas under stress
account for 1.5% of Eni total water withdrawals in 2021
(data unchanged compared to 2020). In 2021, in particular,
Eni withdrew 125 Mm3 of freshwater, of which 25.9 Mm3
from water-stressed areas (11.9 Mm3 from superficial water
bodies, 6.1 Mm3 from groundwater, 2.6 Mm3 from third
parties, 3.5 Mm3 from urban net and 1.8 Mm3 from TAF).
Onshore produced water in water-stressed areas was 22.7
Mm3. In 2021, Eni discharged 94 Mm3 of freshwater, of
which 19 Mm3 in water-stressed areas, equal to 20% as in
2020. In 2021 Eni's freshwater consumption was 40 Mm3 (of
which 12 Mm3 in water-stressed areas).
Spilled barrels following operational oil spills increased by 41%
compared to 2020 due to a spill of almost 900 barrels at the
Gela Refinery, due to an error during oil transfer operations from
tanks to ships (more than half of the barrels have already been
recovered). 73% of the barrels spilled are attributable to activities
in Italy, 15% to Nigeria. Overall, 51% of the operational oil spill
volumes were recovered. With regard to sabotage events, in
2021 there was an increase in events (+13% compared to 2020),
but almost half of the barrels spilled (-48% compared to the
previous year). All the sabotage events took place in Nigeria,
where the quantities spilled decreased by 31% compared to the
previous year and 83% of the volumes were recovered.
Volumes spilled as a result of chemical spills (68 total barrels)
are mainly attributable to Versalis' activities, in particular for
an event that occurred at the Grangemouth plant with a loss
of 55 barrels. In 2021, volumes spilled from operating spills
impacted 97% soil and 3% water bodies, while those from
sabotage impacted 99.8% soil and 0.2% water bodies.
Waste generated by Eni from production activities in 2021
increased by 19% compared to 2020, due to the growing
contribution of both non-hazardous waste (equal to 78% of the
total) and hazardous waste. The increase is mainly linked to the
E&P sector (which accounts for over 88% of Eni waste), where
a total of over 334,000 tonnes more were generated compared
to 2020, in line with the progressive resumption of activities
after the COVID-19 emergency. In the E&P sector, drilling
activities in Egypt, the USA, Vietnam, Mexico and Norway also
had an impact. Plenitude & Power and R&MeC also contributed
to the growing trend of non-hazardous waste, in particular the
EniPower plant in Ravenna (construction of new temporary
waste storage and start of piling-foundations of the new
boiler) and the Taranto refinery (progress of the Tempa Rossa
project). In 2021, recovered and recycled waste increased by
15% compared to 2020, representing 11% of the total waste
disposed36, for the growing contributions of both hazardous
and non-hazardous waste in the E&P and R&MeC sectors. In
2021, a total of 4.2 million tons of waste were generated by
remediation activities (of which 3.9 million from Eni Rewind),
consisting of over 89% of groundwater treated by TAF plants,
partly reused and partly returned to the environment; the
remaining volumes are handled and transferred to third-party
plants. Expenditure on remediation activities amounted to
€452 million.
Emissions of pollutants into the atmosphere increased, with
the exception of emissions of nitrogen oxides (NOx), which
decreased by 6% compared to the previous year, thanks to
the decrease in consumption of internal combustion engines
recorded in some operating entities of the E&P sector. The
increase in emissions of sulphur oxides (SOx) and volatile
organic compounds (NMVOC) are also mainly attributable to
the E&P sector: in particular, the increase in SOx is due to the
increase in the H2S content in the gas sent for flaring in KPO,
while the increase in NMVOC is linked to the increase in non-
routine flaring recorded in NAOC due to problems with the
compressors.
In 2021, Eni updated the assessment of exposure to
biodiversity risk to the concessions under development or
exploitation in the upstream sector and the operational sites
of the other Business Lines, in order to identify where Eni
activities fall, even only partially, within protected areas37 or key
biodiversity sites (KBA38). Compared to last year, the analysis
was also extended to wind and solar plants in Italy and abroad,
and to the recent acquisitions of biomethane production
plants in Italy. The analysis of the mapping of operational sites
(35) Water-stressed areas: areas with a Baseline Water Stress value over 40%. The indicator, defined by the World Resources Institute (WRI www.wri.org), measures the
exploitation of freshwater sources and indicates a stressful situation if withdrawals from a given river basin are greater than 40% of its renewable supply.
(36) Specifically, in 2021, 9% of the hazardous waste disposed of by Eni was recovered/recycled, 2% was subjected to chemical/physical/biological treatment, 38%
was incinerated, 1% was disposed of in landfill, while the remaining 50% was sent to other types of disposal (including transfer to temporary storage plants prior to final
disposal). With regard to non-hazardous waste, 12% was recovered/recycled, 4% was disposed of in landfill, while the remaining 84% was sent to other types of disposal
(including transfer to temporary storage plants prior to final disposal and incineration of a small quantity).
(37) World Database of Protected Areas.
(38) World Database of Key Biodiversity Areas. KBAs (Key Biodiversity Areas) are sites that contribute significantly to the global persistence of biodiversity, on land, in
freshwater or in the seas. These are identified through national processes by local stakeholders using a set of globally agreed scientific criteria. The KBAs analysed consist
of two subsets: 1) Important Bird and Biodiversity Areas; 2) Alliance for Zero Extinction Sites.
Management report | Consolidated financial statements | Annex 176
showed that there is overlap, even partial, with protected areas
or KBAs at 22 sites, all located in Italy with the exception of
two sites in Spain and one in France; another 45 sites in 10
countries (Italy, Australia, Austria, France, Germany, United
Kingdom, Spain, Switzerland, Tunisia, Hungary) border with
protected areas or KBAs, i.e. located at a distance of less than
1 km. As regards the Upstream sector, 73 concessions overlap
partially with protected areas or KBAs, 30 of which located in 6
countries (Italy, Nigeria, Pakistan, United States/Alaska, Egypt
and United Kingdom), have operations in the overlapping area.
In general, for all the Business Lines, the greatest exposure in
Italy and Europe is to the protected areas of the Natura 200039
Network, which is widespread across Europe; this exposure
is more accentuated than last year as a result of the new
acquisitions of the Eni New Energy company in the renewable
and biomethane production plants sector. On the other hand,
in the upstream sector there was a decrease in exposure
to protected areas and KBAs mainly due to modifications
(reduction in boundaries) of the concessions in Italy. In no
case, in Italy or abroad, there is an overlapping of operational
activities with natural sites belonging to the UNESCO World
Heritage (WHS40); only one upstream41 site is located near a
WHS natural site (Mount Etna) but there are no operational
activities within the protected area.
(39) Natura 2000 is the main tool of European Union policy for biodiversity conservation. It is a network of environmental habitats throughout the territory of the European
Union, set up pursuant to Directive 79/409/EEC of April 2nd, 1979 on conservation of wild birds and Directive 92/43/EEC "Habitat".
(40) WHS, World Heritage Site.
(41) Moreover, although it is not included among the consolidated entities, the Zubair field (Iraq) is located near the Ahwar site classified as a mixed WHS site (natural and
cultural). In this case too, no operational infrastructure or activity falls within this protected area.
Eni Annual Report 2021 KEY PERFORMANCE INDICATORS
2021
2020
2019
177
Total water withdrawals(a)
of which: sea water
of which: freshwater
of which: from superficial water bodies
of which: from subsoil
of which: from urban net or tanker
of which: polluted groundwater treated at TAF(b) plants and used in
the production cycle
of which: third-party water(c)
of which: withdrawal from other streams(d)
of which brackish water from subsoil or superficial water bodies
Total water withdrawals from area with water stress
Fresh water reused
Re-injected production water
Total water discharge(e)
of which: into the sea
of which: in superficial water bodies
of which: in sewerage
of which: given to third-party(f)
Fresh water discharge in area with water stress
Operational oil spills(g)
Total number of oil spills (> 1 barrel)
Volumes of oil spills (> 1 barrel)
Oil spills due to sabotage (including thefts)(g)
Total number of oil spills (> 1 barrel)
Volumes of oil spills (> 1 barrel)
Chemical spills
Total number of chemical spills
Volumes of chemical spills
Total waste from production activities
of which: hazardous waste
of which: non-hazardous waste
NOx (nitrogen oxides) emissions
SOx (sulphur oxides) emissions
NMVOC (Non Methan Volatile Organic Compounds) emissions
TSP (Total Suspended Particulate) emissions
Total
1,673
1,533
125
82
23
7
6
7
0
15
25.9
91
58
1,436
1,354
69
11
3
19
36
(million m3)
(%)
(million m3)
(number)
(barrels)
1,355
of which fully
consolidated
entities
Total
Total
1,627
1,723
1,597
1,515
1,599
1,451
110
113
128
72
20
6
5
7
0
2
71
21
7
4
10
0
11
21.5
26.5
92
37
91
53
90
20
8
3
6
1
18
-
89
58
1,434
1,583
1,432
1,354
1,501
1,334
69
9
3
67
11
4
18.7
18.3
31
1,308
46
958
79
14
5
-
67
1,033
(number)
124
124
110
140
(barrels)
3,051
3,051
5,866
6,232
(number)
(barrels)
(million of tonnes)
(ktonnes NO2eq.)
(ktonnes SO2eq.)
(ktonnes)
20
68
2.1
0.5
1.6
48.8
18.5
24
1.4
20
68
1.8
0.4
1.4
30.1
5.3
12.7
0.7
24
3
1.8
0.4
1.4
51.7
15.3
21.4
1.3
21
4
2.2
0.5
1.7
52.0
15.2
24.1
1.4
(a) In addition, it is reported that production water in 2021 was 58.2 Mm3.
(b) TAF: groundwater treatment facilities.
(c) Water withdrawal from third-party are exclusively related to fresh water.
(d) With the aim to further increase the accordance with "GRI 303: Water and effluents 2018" standard used by Eni starting from this year, data related to third party water is reported separately, while
in previous editions it was included in "of which freshwater withdrawal from other streams".
(e) It is reported that in 2021 re-injected and injected production water for disposal was equal to 33.5 Mm3. In addition, production water discharged into superficial water bodies and seawater or sent
to evaporation basins was 21.7 Mm3. 7% of the total water discharges is fresh water.
(f) It is water given for industrial use.
(g) The data in the 2020 Non-Financial Disclosure have been updated following the closure of some investigations after publication. This circumstance could also occur for the figure 2021.
Management report | Consolidated financial statements | Annex
178
NUMBER OF PROTECTED AREAS AND KBAS OVERLAPPING WITH R&M, VERSALIS, ENIPOWER
OPERATIONAL SITES AND UPSTREAM CONCESSIONS(a)
Eni Operational sites/Concessions(c)
(number)
UNESCO World Heritage Natural Sites (WHS)
(number)
Natura 2000
IUCN(d)
Ramsar(e)
Other Protected Areas
KBAs
OPERATIONAL SITES (non Upstream)
Upstream concessions
Overlapping with
operational sites
Adjacent to operational sites
(<1km)(b)
With operating activities
in the overlapping area
2021
2020
2019
2021
2020
2019
2021
2020
2019
22
0
14
4
0
5
9
11
11
0
5
4
0
2
5
0
5
4
0
2
6
45
0
42
21
3
8
15
18
0
19
13
3
8
8
15
0
21
11
3
3
11
30
0
15
2
2
10
9
30
0
16
2
3
11
12
31
0
15
3
2
12
13
(a) The reporting boundary, in addition to fully consolidated entities, includes also 4 upstream concessions belonging to operated companies in Egypt and 1 coastal deposit of R&M belonging to an
operated Company as well. For this analysis, the upstream concessions as of June 30 of the reporting year are considered.
(b) The relevant areas for biodiversity and the operational sites do not overlap but are at distance of less than 1 km.
(c)Eni's operational site/concession may result in overlapping/adjacent to more protected areas or KBAs.
(d) Protected areas with an assigned IUCN (International Union for Conservation of Nature) management category.
(e) List of wetlands of international importance identified by the Countries that signed the Ramsar Convention in Iran in 1971 and which aims to ensure the sustainable development and
conservation of biodiversity in these areas.
Human rights
Eni is committed to conducting its activities with respect
for human rights and expects its Business Partners to do
the same in carrying out the assigned activities or those
done in collaboration with and/or on behalf of Eni. This
commitment, based on the dignity of each human being and
on the responsibility of the Company to contribute to the
well-being of individuals and communities in the Countries
in which it operates, is set out in the Eni’s Statement on
Respect for Human Rights approved in December 2018 by
Eni's Board of Directors (BoD). The document highlights the
priority areas on which this commitment is focused and on
which Eni exercises in-depth due diligence, according to an
approach developed in line with the United Nations Guiding
Principles on Business and Human Rights (UNGPs)42 and
pursuing continuous
improvement. These aspects are
described within a dedicated report, Eni for Human Rights43,
published annually since 2019, which provides a full
representation of the management model adopted by Eni on
the issue and the activities carried out in recent years, using
the UNGP Reporting Framework to report commitments
and results. Human rights are one of the areas in which Eni’s
Sustainability and Scenarios Committee (SSC) performs
consultative and advisory functions for the BoD. Also in
2021, the SSC investigated the activities carried out during
the year, including the risk-based management model
adopted by Eni and the Slavery and Human Trafficking
Statement approved by the BoD in April 2021.
(42) UN Guiding Principles on Business and Human Rights (UNGPs).
(43) See: https://www.eni.com/assets/documents/eni-report-human-rights.pdf
In 2021, Eni further strengthened the process of awarding
management incentives linked to human rights performance,
assigning specific objectives to all managers reporting
directly to the CEO and other management levels. With
regard to training, following on with the internal human rights
awareness process launched in 2016 with an engagement
workshop held by the CEO, also in 2021 specific e-learning
courses were provided to the functions most involved, in
order to create a common and shared language and culture
throughout the Company and to improve the understanding
of the possible impacts of the business on human rights. In
particular, a general training module was developed for all
staff and in-depth courses were built on topics of interest to
individual activities/professional families.
Eni's commitment, the management model and the activities
carried out on human rights focus on the issues considered
most significant for the company – as also requested by
the UNGP – in light of the business activities conducted
and the contexts in which the company operates. 13 "salient
human rights issues" are identified by Eni, grouped into
4 categories: human rights (i) in the workplace; (ii) in the
communities hosting Eni activities; (iii) in business relations
(with suppliers, contactors and other business partners)
and (iv) in security services.
In 2020, an evaluation model was established for monitoring
human rights in the workplace.
This
"risk-based" model, which segments Eni
is a
Eni Annual Report 2021
179
subsidiaries according
to specific quantitative and
qualitative parameters aimed at outlining the issues and
risks to the country/operating context that are linked to
the human resources management process,
including
contrasting all forms of discrimination, gender equality,
working conditions, freedom of association and collective
bargaining. This approach identifies possible risk areas or
improvements, requiring specific actions to be defined and
monitored over time. During 2021, the model was extended
to all subsidiaries of the upstream business, expanding the
assessment of human rights monitoring in the workplace.
Eni is committed to preventing possible negative impacts
on the human rights of individuals and host communities
resulting from the implementation of industrial projects.
To this end, in 2018, Eni adopted a risk-based model that
uses elements related to the operating context, such as risk
indices of the data provider Verisk Maplecroft, and project
characteristics, in order to classify upstream business
projects according to potential human rights risks and to
identify appropriate management measures. Higher-risk
projects are specifically investigated through a "Human
Rights Impact Assessment" (HRIA) or a “Human Rights
Risk Analysis” (HRRA) – the latter carried out according to
a desk-based analysis methodology developed in 2021 – to
identify measures to prevent potential impacts on human
rights and manage the existing ones. In 2021, these analysis
were conducted for the seismic aquisition projects planned
in Cabinda Centro in Angola; on Block 47 in Oman; on the
Dumre block in Albania; on Area C of the Sharjah Emirate
(UAE). A number of recommendations have been identified
for each project to mitigate the potential negative impacts,
set out in Action Plans to be implemented in 2022. Again
with regard to industrial projects, in 2021 an in-depth study
was conducted on decommissioning activities, to develop a
methodology for analysing the potential impacts on human
rights in this phase and which will be consolidated over the
next two years. In some Countries, such as Norway, Australia
and Alaska, Eni operates in areas where indigenous peoples
are present, towards which it has adopted specific policies
to protect their rights, culture and traditions and to promote
their free, prior and informed consultation. The most recent
of these Policies, referring to the indigenous populations in
Alaska44 affected by the business activities carried out by
the Eni US Operating company in the area, was adopted in
2020 and renewed in 2021.
Respect for human rights in the supply chain is an essential
requirement for Eni and is ensured through the adoption of
transparent, impartial, consistent and non-discriminatory
conduct in the selection of suppliers, the evaluation of
offers and the verification of contractual activities (see
chapter "Suppliers"). Companies that collaborate with Eni
must share, by signing the Code of Conduct, principles of
social responsibility which, inter alia, include the following
protection of human rights. Suppliers, candidates for
the qualification and/or procurement procedures, are
responsible for fulfilling specific requirements, consistent
with the SA8000 international standards. In the procurement
process, the assessment model and oversight of the respect
for human rights45, based on a risk-based assessment,
segments qualified suppliers according to a potential risk
of human rights violations in consideration of Country and
product risk level46. High-risk activities are both industrial
activities, such as maintenance, construction, assembly,
logistics, and general goods and services, such as
cleaning services, catering, security services and property
management. The countries with the highest number of
suppliers at risk are Nigeria, Congo and Mozambique, for
a total of 1,266 high-risk suppliers and 1,214 medium/
high-risk suppliers. Based on the model, all suppliers are
periodically subject to due diligence, tender evaluation,
performance feedback and periodic updates with dedicated
questionnaires, towards direct suppliers and sub-suppliers.
In line with the risk-based approach, in addition to the social
responsibility checks carried out on all suppliers (over 6,000)
subjected to the qualification process, including updates,
as well as the evaluations carried out during the tender,
contractual feedback, in 2021 in-depth studies were carried
out on 24 relevant suppliers in terms of contractual value,
also through surveys during the contract execution phase,
plus a further 11 audits inspired by the SA8000 principles
on direct contractors and subcontractors, planned following
red flags relating to the timely payment of wages and
recognition of overtime, without recording any critical issues.
To promote knowledge of human rights safeguards, training
programmes were organized via webinars, which involved
all the resources of the professional procurement family,
in Italy and abroad. Human rights clauses in contractual
standards have also been strengthened. Further actions to
counteract forms of modern slavery and human trafficking
and to prevent the exploitation of minerals associated with
human rights violations in the supply chain are discussed
respectively
“Slavery and Human Trafficking
Statement”47 and the “Position on Conflict Minerals”48. The
Position on Conflict Minerals describes the policies and
systems for the procurement of "conflict minerals" (tantalum,
tin, tungsten and gold) by Eni, with the aim of minimising the
the
in
(44) See: https://www.eni.com/assets/documents/Indigenous%20Peoples%20Policy%201DEC2020_final.pdf
(45) In 2021, an Operating Instruction was issued for the Procurement professional area in order to strengthen the oversight on the subject.
(46) Based on vulnerabilities and probabilities related to specific conditions such as the level of training and skills needed, the level of work intensity, the use of manpower
agencies, HSE risks.
(47) In accordance with the English Modern Slavery Act 2015 and, from this year, the Australian Commonwealth Modern Slavery Act 2018.
(48) Compliance with the US SEC regulations.
Management report | Consolidated financial statements | Annex 180
is a multi-stakeholder
risk that the procurement of these minerals may contribute
to financing, directly or indirectly, human rights violations
in the countries concerned. Eni manages its security
operations in accordance with international principles,
including the Voluntary Principles on Security & Human
Rights, adhered to by Eni in 2020 as an “Engaged Corporate
Participant”. The VPI
initiative
dedicated to respect of human rights in the management of
Security operations that involves governments, companies
and NGOs. In February 2021, Eni prepared its first Annual
Report and in May it gave a Verification Presentation to the
Secretariat of the Voluntary Principles in which companies,
NGOs and Governments took part. On this occasion, Eni
was able to illustrate the activities carried out in terms of
Voluntary Principles on Security & Human Rights in the
first year after joining the VPI. As a result, Eni launched the
Implementation Plan, drawn up by the Steering Committee
and received by the VPI Secretariat, containing a series of
requested actions aimed at implementing Eni's activities
in the protection of Human Rights. In addition, in 2021 Eni
updated the "Human Rights due diligence" model, launched
in 2020 and aimed at identifying the risk of negative impact
on human rights of security activities and evaluating the use
of possible preventive and/or mitigation measures. In this
regard, a new indicator was introduced, relating to the risk
of involving the Business in the violation of Human Rights by
public and/or private Security Forces. Based on the results of
the application of the model, the "Security & Human Rights"
Action Plan was drawn up which, with reference to the first
10 countries resulting from the risk-based model, provided
for: (i) sampling of existing surveillance contracts, in order
to verify the presence or absence of human rights clauses in
them; (ii) verification of the allocation/use of security-related
goods and services made available to public and private
security forces. Eni's commitment to the dissemination of the
principles of human rights protection includes the creation of
the training and information workshop on "Security & Human
Rights" held in Mexico in November 2021.
Moreover, since 2006, Eni has adopted an
internal
procedure, updated over time and most recently in 2020,
also included in the Anti-Corruption Regulatory Instruments,
which regulates the process for receiving, analyzing and
processing whistleblowing reports, also related to human
rights, that are sent by or transmitted from anyone,
stakeholders, Eni’s People or other third parties, even if sent
anonymously or in confidence.
In April 2021, also on the input of Eni SpA's Watch Structure,
a multidisciplinary Working Group was established, to
promptly respond to the provisions of Convention no. 190
of the International Labour Organization on the elimination
of violence and harassment in the workplace (ratified by
Italy on January 4, 2021). Eni wanted to move forward on
an issue of central importance, using Convention no. 190 as
a starting point, which provides for a series of obligations
for companies to prevent violence and harassment at
work. To this end, on December 21, 2021, Annex E "Eni
against violence and harassment at work" was issued to
the "Internal Control and Risk Management System" MSG.
Finally, in line with the principles of "responsible contracting"
suggested by the best practices and international guidelines
on Business & Human Rights, Eni has prepared a series
of standard clauses on human rights compliance to be
included on the basis of a risk-based approach in the main
Eni contractual cases, and provides support to the business
for their definition and negotiation.
PERFORMANCE METRICS AND COMMENTS
Mandatory training for senior managers and middle
managers (Italy and abroad) of the 4 specific modules
continued in 2021: "Security and Human Rights", "Human
Rights and relations with Communities", "Human Rights
in the Workplace" and "Human rights in the Supply Chain".
In addition, the provision of sustainability and human
rights courses to the entire Eni population continued: the
reduction in hours of training on human rights is linked to the
scheduling of training activities over several years. However,
the overall percentage of users of the course increased to
94.2% (vs. 92% in 2020).
As regards the Security professional area, in 2021 the
percentage of personnel trained in human rights stood
at 90%. The percentage of Security Personnel who have
received training on human rights reflects the qualitative/
quantitative turnover of incoming and outgoing resources
from the Professional Area year on year.
In addition, since 2009 Eni has been conducting a training
programme for public and private security forces at its
subsidiaries, which was recognized as a best practice in
the 2013 joint publication by the Global Compact and the
Principles for Responsible Investment (PRI) of the United
Nations. In 2021, the training session was held in Mexico and
was attended in class by 88 representatives of the security
forces. The event was attended, in class or remotely, by 116
other people, including Eni's management and employees,
belonging to other oil companies and NGOs.
In 2021, two "Human Rights Impact Assessments" (HRIAs)
were conducted in Angola and Albania and two "Human
Rights Risk Analyses" (HRRAs) in Oman and the Emirate of
Sharjah (UAE). Furthermore, the implementation of the actions
provided for in the Action Plans relating to human rights
impact analyses, carried out during 2019 and 2018 on the
development of Area 1 in Mexico and on the development of
Area 4 in Mozambique, continued. All HRIA reports conducted
up to 2020 and the related Action Plans adopted, including
Eni Annual Report 2021
181
periodic reports on the progress of the Plans, are publicly
available on the Eni website49.
With regard to whistleblowing reports, in 2021 investigations
were completed on 74 files50, of which 3051 included human
rights aspects, mainly concerning potential
impacts on
workers' rights and occupational health and safety. Among
these, 40 assertions51 were verified; for 5 of these, the reported
facts were confirmed, even partially, and corrective actions
were taken to mitigate and/or minimise their impacts. In
particular, the following were undertaken: (i) actions on the
Internal Control and Risk Management System, relating to
the implementation and strengthening of controls in place; (ii)
actions against suppliers and (iii) actions against employees,
including disciplinary measures,
in accordance with the
collective labour agreement and other applicable national
laws. At the end of the year, 15 files were still open, 5 of which
referred to human rights aspects, mainly concerning potential
impacts on workers' rights.
KEY PERFORMANCE INDICATORS
Human rights training hours
In class
Distance
Employees trained on human rights(a)
Security personnel trained on human rights(b)
Security personnel (professional area) trained on human rights(c)
Security contracts containing clauses on human rights
2021
2020
2019
(number)
23,893
33,112
25,845
0
260
108
23,893
32,852
25,737
94
88
90
98
92
32
91
97
97
696
92
97
(%)
(number)
(%)
Whistleblowing files (assertions)(d) on human rights violations closed during the year
(number)
30 (40)
25 (28)
20 (26)
Founded assertions
Partially founded assertions
Unfounded assertions, with the adoption of corrective/improvement measures
Unfounded(e)/Not ascertainable(f)/Not applicable(g) assertions
2
3
7
28
11
7
9
8
8
11
(a) This percentage is calculated as the ratio between the number of registered employees who have completed a course and the total number of registered employees.
(b) The variations of the KPI Security personnel trained on human rights, in some cases even significant from one year and the next, are related to the different characteristics of the training
projects and to the operating contingencies.
(c) This data is a cumulative percentage value. From 2020, the data is calculated considering only Eni's employees, unlike the 2019 figure which also includes contractors. The Security Forces
include both private security personnel who work contractually for Eni, and personnel of the Public Security Forces, whether military or civilian, who carry out, also indirectly, security activities
and/or operations to protect Eni's people and assets.
(d) As of October 1st, 2021, a different classification of the results of the Files has been defined, ranging from 4 ("Founded", "Unfounded with Actions", "Unfounded" and "Not Applicable") to 5
categories ("Founded", "Partially Founded", "Unfounded", "Not Ascertainable" and "Not Applicable").
(e) Of which 1 relating to subsidiaries not consolidated with the integral method.
(f) Assertions that do not contain detailed, precise and/or sufficiently detailed elements and/or, for which on the basis of the investigative tools available, it is not possible to confirm or
exclude the validity of the facts reported therein.
(g) Of which 1 relating to subsidiaries not consolidated with the integral method. Classified as such are the assertions in which the reported facts coincide with the subject of pre-litigation,
disputes and investigation in progress by public authorities (for example, judicial, ordinary and special authorities, administrative bodies and independent authorities assigned to monitoring
and control). The assessment is carried out after obtaining the opinion of the Legal Affairs function or other relevant functions.
(49) https://www.eni.com/en-IT/just-transition/respect-for-human-rights.html.
(50) Whistleblowing report: is a document summarizing the investigations carried out regarding the Whistleblowing Report(s) (which may contain one or more detailed
and verifiable assertions) and that contains a summary of the investigation carried out regarding the facts of the Whistleblowing Report, the result of the investigations
carried out and any action plans that were identified.
(51) Of which 2 relating to subsidiaries not fully consolidated.
Management report | Consolidated financial statements | Annex
182
Suppliers
Eni has developed a procurement model, from the selection and
qualification of suppliers to tender procedures, which combines
economic-financial sustainability with social and environmental
sustainability, with the aim of promoting the generation of
shared and lasting value at the supply chain, thanks to an active
participation in the energy transition. Eni meets this commitment
by promoting its own values with its suppliers, involving them
in development initiatives and including them in risk prevention
activities. To this end, as part of the sustainable procurement
process, Eni: (i) periodically subjects all suppliers to qualification
and due diligence processes to verify their ethical, economic,
technical-operational reliability and supervision in the areas
of health, safety, the environment, cyber security and human
rights, to minimise the risks along the supply chain; (ii) requires
all suppliers to sign the Supplier Code of Conduct as a mutual
commitment to recognise and protect the value of all their
people, to commit to tackling climate change and its effects, to
operate with integrity, protect company resources, promoting the
adoption of these principles by their people and their supply chain;
(iii) monitors compliance with these commitments with periodic
checks to ensure that suppliers maintain their qualification and
tender requirements over time. To this end, both environmental52
and social53 issues are assessed throughout the procurement
process, consistent with a fair and sustainable approach to
energy transition and in line with the time and investment required
to design and implement new technologies and solutions;
(iv) if critical issues emerge, requires the implementation of
improvement actions or, if they do not meet the minimum
standards of acceptability where applicable, limits or inhibits
supplier invitations to to tender.
To promote the sustainable supply chain development, in
2021 Eni further strengthened the initiatives aimed at involving
suppliers in the fair and sustainable energy transition path,
enhancing the aspects of environmental protection, economic
development and social growth thanks to tools and initiatives for
the development of a sustainable supply chain. The Programme
(JUST – join us in sustainable transition) has made it possible
to: (i) define a systemic path through the launch of the Open-es
platform that already has more than 3,000 companies, of which
almost 2,500 belong to the Eni supply chain. This platform
provides industrial supply chains with concrete tools to improve
their ESG performance, based on the Stakeholder Capitalism
Metrics, the metrics defined by the World Economic Forum
(WEF). Participation in the initiative is an essential requirement
for evaluating and enhancing the commitment made by each
of Eni's suppliers in pursuing an equitable path of sustainable
development, with the aim of involving the entire supply chain;
(ii) deepen knowledge through workshops on ESG issues,
involving 350 qualified suppliers from a dozen different product
sectors, to share sustainability objectives.
Once the challenges that characterize the specific sector have
been identified, targets and action plans are defined to be
monitored over time. Moments of training and engagement
on digital issues were also organized, with particular focus
on cyber security, targeting about 1,000 suppliers and on CO2
measurement methods and drafting of the sustainability report;
(iii) strengthen the procedural framework through the inclusion of
cyber security safeguards, in qualification and tender procedures,
and sustainability in the standard tender and contractual
documentation; (iv) support the supply chain from a financial
point of view to reward the commitment in the energy transition
and promote the creation of sustainable business models with
the launch of the "Basket Bond - Sustainable Energy" Programme,
an innovative financing tool dedicated to Eni's direct and indirect
suppliers and the entire energy chain. In addition, specific clauses
have been included providing for the possibility of using factoring
services at advantageous conditions in the Request for Offer
standards; (v) enhance the commitment and encourage the
adoption of best practices by suppliers through the adoption of
sustainability criteria and rewarding mechanisms in the evaluation
of offers of over 280 procedures for approximately €2.5 billion in
value. In addition, specific contractual clauses were introduced
to monitor progress over time with respect to the improvement
plans that emerged during the qualification phase or participation
in the tender.
PERFORMANCE METRICS AND COMMENTS
During 2021, 6,31854 suppliers were subject to checks and
assessments with reference to environmental and social
sustainability aspects (including health, safety, environment,
human rights, anti-corruption and compliance). Potential
critical issues and/or areas for improvement were identified
for 8% (487) of the suppliers audited. The critical issues
mainly refer to shortcomings in compliance with health
and safety regulations and the principles established by the
Code of Conduct and the Code of Ethics. The total number
of suppliers involved decreased compared to 2020, the
year in which the critical issues recorded concerned the
numerous foreign branches of international suppliers. For
the same reason, there was a reduction in the number of
suppliers with whom relations were interrupted (34), due to
a negative evaluation during the qualification phase or due
to suspension or revocation of the qualification.
(52) Tender procedures have introduced rewarding requirements such as energy efficiency, use of energy produced from renewable sources, sustainability certifications,
vehicle fleet, use of recycled material, waste disposal methods, etc.
(53) In order to incentivize the vendor, for example, to ensure gender parity in the teams, maintenance of employment levels, etc.
(54) It also includes all new suppliers.
Eni Annual Report 2021 KEY PERFORMANCE INDICATORS
Suppliers subject to assessment on social responsibility aspects
of which: suppliers with criticalities/areas for improvement
of which: suppliers with whom Eni has terminated the relations
New suppliers assessed using social criteria
183
2021
2020
2019
(number)
6,318
5,655
5,906
487
34
100
828
124
100
898
96
100
(%)
Transparency, anti-corruption and tax strategy
Demonstrating its commitment to the 10 United Nations
Principles for Responsible Business, in 2020, Eni was confirmed
in the Global Compact LEAD. These principles, including the
repudiation of corruption, are reflected in Eni's Code of Ethics,
which is distributed to all employees at the time of hiring, and in
Model 231 of Eni SpA. Moreover, since 2009, Eni has designed
and developed the Anti-Corruption Compliance Program, in
compliance with the applicable provisions
in force and
international conventions and taking into account guidance and
best practices, as well as the policies adopted by leading
international organizations. It is an organic system of rules and
controls to prevent corrupt practices, and is also instrumental to
the prevention of the phenomenon of money laundering in the
context of the non-financial activities of Eni SpA and its
Subsidiaries. At regulatory level, the Anti-Corruption Compliance
Program is represented by the MSG Anti-Corruption55 and by
regulatory instruments that constitute the reference framework
in the identification of the activities at risk and the control tools
that Eni makes available to its people to prevent and counter the
risk of corruption and money laundering. All Eni's subsidiaries, in
Italy and abroad, must adopt, by resolution of their BoD56, all the
anti-corruption regulatory instruments issued by Eni SpA. In
addition, companies and entities in which it holds a non-
controlling interest are encouraged to comply with the standards
set forth in internal anti-corruption regulations by adopting and
maintaining an adequate internal control system consistent
with the requirements of the relevant laws. Eni's Anti-Corruption
Compliance Program has evolved over the years with the aim of
continuous improvement; in January 2017, Eni SpA was the first
Italian Company to achieve the ISO 37001:2016 “Anti-bribery
Management Systems” certification. In order to maintain this
certification, Eni cyclically undergoes surveillance and
recertification audits, which have always ended with a positive
outcome. In addition, in order to guarantee the effectiveness of
the Anti-Corruption Compliance Program, Eni, through its anti-
corruption unit, supports its subsidiaries in Italy and abroad,
providing specialized assistance in the activity of assessing the
reliability of potential counterparties at risk ( "due diligence"), the
management of any critical issues/red flags that emerge and
the development of the related contractual safeguards. In
particular, specific anti-corruption clauses are included in
contracts with counterparties, which also provide for a
commitment to view and abide by the principles contained in
Eni's Anti-Corruption regulations. The relevant activities in the
Anti-Corruption Compliance Program and the planning of such
activities for the subsequent periods are the subject of an annual
report that is an integral part of the Integrated Compliance
Report and follows the relative information flows addressed to
the Eni supervisory bodies. Every six months, unless
extraordinary events demand a different frequency, an update of
the report is also prepared on the activities carried out in the
reference six-month period and any significant events that
occurred during the period. Eni has also defined and implemented
a structured process of Compliance risk assessment and
monitoring aimed respectively at: (i) identifying, assessing and
tracking the risks of corruption in the context of its business
activities and for the definition and updating of the control
measures provided for
in the Anti-Corruption Regulatory
instruments; (ii) periodically analysing the trend of the corruption
risks identified, through specific controls and the analysis of risk
indicators aimed at ensuring compliance with the regulatory
requirements and the effectiveness of the models placed under
their control. The activities at risk identified by Eni through the
Compliance risk assessment, due to its operational and
organizational context, include, for example: (i) contracts with
Third Parties at Risk of corruption and money laundering (such
as, for example, business associates, joint venture partners,
brokers, counterparties in real estate management operations,
commercial network operators, suppliers, credit buyers/
assignees, etc.); (ii) transactions for the sale of corporate shares,
companies and business units, mining rights and securities, etc.
and joint venture contracts; (iii) non-profit initiatives, social
(55) The latest version of the Anti-Corruption MSG (which updates and replaces the previous version of 2014) was i) illustrated and submitted to the Eni SpA Control and
Risk Committee for prior opinion and for information to the Board of Statutory Auditors and the Eni SpA Watch Structure; ii) approved by the Eni SpA Board of Directors on
June 24, 2021. The Anti-Corruption MSG was published on July 19, 2021 and is available on the website https://www.eni.com/en-IT/home.html
(56) Or alternatively the equivalent body depending on the governance of the subsidiary.
Management report | Consolidated financial statements | Annex 184
(“Sales channels”,
“Consultants” and
projects and sponsorships; (iv) sale of goods and services (such
as, for example, contracts with commercial customers), trading
and/or shipping operations; (v) selection, hiring and management
of human resources; (vi) gifts and hospitality; (vii) relations with
Relevant Parties. Compliance risk assessment activities and
interventions are
anti-corruption Compliance Monitoring
planned annually according to a risk-based approach. During
2021, the anti-corruption Compliance Risk Assessments carried
out concerned the entire Anti-Corruption scope and the activity
at risk "Transactions for the purchase and sale of company
shares, companies and company branches, mining rights and
securities, etc. and joint venture contracts". In the light of the
results of these interventions, the level of risk of the scope of
corruption and the adequacy of the mitigation measures put in
place, identified in the previous activities carried out, were
confirmed and specific requirements regarding the assessed
activity at risk were also defined. In 2021, the Compliance
Monitoring interventions carried out in the Anti-Corruption field
concerned the activities at risk: “Joint Ventures” and “Business
Associates”
“Other
Business Associates”). The results of the audits showed a trend
in the level of risk of the activities in line with that recorded during
the Compliance Risk Assessment and confirmed
the
effectiveness of the compliance model adopted. Eni also
implements an anti-corruption training programme, both
through e-learning and with classroom events, general
workshops and job specific training. The workshops offer an
overview of the anti-corruption laws applicable to Eni, the risks
that could result from their infringement for natural and legal
persons and the Anti-Corruption Compliance Program adopted
to address
the workshops are
accompanied by job specific training, or training for professional
areas particularly at risk in terms of corruption. In order to
optimize the identification of the recipients of the various
training initiatives, a methodology has been defined for the
systematic segmentation of Eni's people based on specific
corruption risk drivers such as Country, qualification, and
professional area.
information and
In addition, periodic
updating activities continued through the preparation of short
information briefs on compliance, including any anti-corruption
issues. In addition, it should be noted that in 2020, on the
occasion of their inauguration, the members of the Board of
Directors of Eni SpA were shown the key elements of the Anti-
Corruption Compliance Program for training purposes, also in
terms of its consistency with international best practices.
During 2021, the following were brought to the attention of the
Board: (i) some revisions to the anti-corruption legislation,
aimed at incorporating some changes to the organizational
and process structure, as well as improvements gradually
made to the Anti-Corruption Regulatory Tools; (ii) some
these risks. Generally,
(57) Please see: https://www.eni.com/assets/documents/Tax-strategy_ENG.pdf
(58) Please see: https://www.oecd.org/daf/inv/mne/48004323.pdf
proposals for updating the Model 231 and the related sensitive
activities and control standards, for the purposes of regulatory
alignment and rationalisation and enhancement
in the
document, with a view to integrated compliance of the Eni
internal control system and the various related compliance
programs. As part of the anti-corruption training for third
parties, Eni has launched an online training program for
employees of Green-Stream BV (a company 50% owned by Eni
North Africa BV and 50% by the Libyan National Oil Corporation)
and for the associated businesses of Eni G&P France SA. Eni's
experience in the field of anti-corruption also matures through
continuous participation in international conferences, events
and working groups, which represent a tool for Eni to grow and
promote and disseminate its values. In this regard, in 2021, Eni
actively participated in the Partnering Against Corruption
Initiative (PACI) of the World Economic Forum, the O&G ABC
Compliance Attorney Group (discussion group on anti-
corruption issues in the Oil & Gas sector) and the B20 Italy
Integrity & Compliance Task Force. As part of the integrated
audit plan approved annually by the BoD, Eni carries out specific
checks in order to verify the fulfilment of the Compliance
Program’s provisions through dedicated audits and analyses
of processes and companies, identified according to the
relevant Country's Risk level and the related size of business,
as well as through checks on high-risk third parties, where
contractually foreseen. Moreover, since 2006 Eni has issued an
internal procedure, updated over time and most recently in
2020, aligned with national and international best practices as
well as with the Italian law (L. 179/2017), in order to manage
receiving, analysing and processing
the process of
whistleblowing reports received, even
in confidential or
anonymous form, by Eni SpA and its subsidiaries in Italy and
abroad. This regulation allows employees and third parties to
report facts pertaining to the Internal Control and Risk
Management System that concern behaviours in violation of
the Code of Ethics, any laws, regulations, provisions of
authorities, internal regulations, 231 Model or compliance
models for foreign subsidiaries that may cause damage or
prejudice to Eni, even if only to its public image. In this regard,
dedicated and easily accessible information channels have
been set up and are available on eni.com.
Eni's tax strategy, which has been approved by the Board of
Directors and is available on the Company’s website57, is based
on the principles of transparency, honesty, fairness and good
faith set forth in its Code of Ethics and in the “OECD Guidelines
for Multinational Enterprises”58 and has as its primary objective
the payment of taxes in the various Countries in which it
operates, in the knowledge that it can contribute significantly
to tax revenues in those Countries, supporting local economic
and social development.
Eni Annual Report 2021 185
Finally, anticipating by two years the reporting requirements on
transparency of payments to States in the exercise of extraction
activities introduced by the EU Directive 2013/34 EU (Accounting
Directive), Eni had begun in 2015 to provide disclosure on a
voluntary basis of a series of summary data on cash flows paid
to States in which it conducts hydrocarbon exploration and
production activities.
PERFORMANCE METRICS AND COMMENTS
In 2021 the anti-corruption checks, based on the Anti-
Corruption Compliance Program's provisions, have been
performed in 20 audits, carried out in 9 countries, moreover
22 supervisory activities were carried out on the 231/
Compliance Models of the Italian/foreign subsidiaries. As in
2020, the ascertained cases of corruption61 relating to Eni
Spa amounted to 0. For the proceedings in progress, ongoing
proceedings see the section "Legal Proceedings" on page 288.
In 2021, due to the emergency related to COVID-19, planned
classroom training events were conducted in distance mode.
In addition, in 2021, the online training continued on anti-
corruption issues according to the risk-based methodology
started in 2019, aimed at the entire corporate population.
Regarding the commitment with EITI, Eni follows the
activities conducted at international level and contributes
annually to preparation of the Reports in member Countries;
additionally, as a member, Eni takes part in the activities of
the Multi Stakeholder Groups in Congo, Ghana, Timor Est, and
the United Kingdom. In Kazakhstan, Indonesia, Mozambique,
Nigeria and Mexico, Eni's subsidiaries interface with the
local EITI Multi Stakeholder Groups through the industry
associations present in the Countries.
Eni has designed and implemented a Tax Control Framework
for which Eni's CFO is responsible, structured in a three-step
business process: (i) assessment of tax risk (Risk Assessment);
(ii) identification and establishment of controls to monitor risks;
(iii) verification of the effectiveness of controls and related
information flows (Reporting). As part of its tax and litigation
activities risk management, Eni adopts prior communication
with the tax authorities and maintains relations based on
transparency, dialogue and cooperation, participating, where
appropriate, in projects of enhanced cooperation (Co-operative
Compliance). True to the commitment to better governance and
greater transparency in the extraction sector, which is crucial
to foster responsible use of resources and prevent corruption,
Eni takes part in the Extractive Industries Transparency Initiative
(EITI) since 2005. In this context, Eni actively participates both at
local level, through the Multi-Stakeholder Groups in the member
Countries, and in the Board’s initiatives at international level.
In accordance with Italian Law no. 208/2015, Eni prepares the
“Country-by-Country Report” required by Action 13 of the “Base
erosion and profit shifting - BEPS” project, promoted by the OECD
with the sponsorship of the G-20, whose objective is to have the
profits of multinational companies declared in the jurisdictions
where the economic activities that generate them are carried
out, in proportion to the value generated. With a view to fostering
fiscal transparency for the benefit of all interested stakeholders,
this report is published voluntarily by Eni, although there are no
regulatory obligations in this regard59. The publication of this
report has been recognized as best practice by the EITI60. Also
in line with its support for the EITI, Eni has published a public
position on contract transparency in which governments are
encouraged to comply with the new requirement on contracts
publication and it is expressed the support to the mechanisms
and initiatives that will be launched by Countries to promote
transparency in this area.
KEY PERFORMANCE INDICATORS
Audits covering the anti-corruption checks
(number)
E-learning for resources in medium/high corruption risk context
(number of participants)
E-learning for resources in low corruption risk context
General Workshops
Job specific training
Countries where Eni supports EITI’s local Multi Stakeholder Groups
(number)
2021
2020
2019
of which fully
consolidated
entities
17
7,672
3,079
1,265
686
9
Total
20
7,800
3,088
1,284
702
9
Total
Total
31
3,388
3,769
904
568
9
27
13,886
9,461
1,237
1,108
9
(59) For more details please see the most recent edition of Country-by-Country Report published in 2021 for the year 2020:
https://www.eni.com/assets/documents/eng/reports/2020/Country-by-Country-2020_ENG.pdf
(60) EITI pointed out Eni and Shell as companies pioneering Country-by-Country reporting among Oil and Gas majors, see:
https://eiti.org/ news/extractives-companies-champion-tax-transparency
(61) Past convictions relating to criminal proceedings for domestic and/or international corruption.
Management report | Consolidated financial statements | Annex 186
ALLIANCES FOR DEVELOPMENT
One lever of Eni's business model is the promotion of local
development through continuous interactions with institutions
and local stakeholders to supply gas to the local market, promote
access to energy, along with a wide range of interventions
necessary to respond to the needs of communities. The resulting
development strategies are reinforced by the launch of public-
private partnerships and alliances with actors engaged in the
territory, from International Organizations to development banks,
from national institutions to the private sector, from universities
to research centres, from cooperation bodies to civil society
organizations. The added value of these collaborations allows
the sharing of resources not only economically but also in terms
of know-how and experience, contributes to the improvement of
people’s quality of life and the achievement of the Sustainable
Development Goals (SDGs). Starting from the analysis of the
local socio-economic context, which accompanies the various
business project phases in order to ensure greater efficiency and
systematicity in the decision-making approach, from the time of
license acquisition to decommissioning, Eni adopts tools and
methodologies consistent with the main international standards
to meet the needs of local populations. These activities, defined in
specific Local Development Programmes (LDPs) in line with the
United Nations 2030 Agenda, the National Development Plans,
the United Nations Guiding Principles on Business and Human
Rights (UNGPs) and the commitments under the Paris Agreement
(Nationally Determined Contributions - NDCs), include five lines
of action: (i) contribution to the socio-economic development
of local communities, in accordance with national legislation
and development plans, also based on the knowledge acquired.
These initiatives are aimed at improving access to off-grid energy
and clean cooking, economic diversification (e.g. agricultural
projects, micro-credit, infrastructure interventions) and forest
protection and conservation, education and vocational training,
access to water and sanitation and support of health services/
systems, as well as improving the health status of vulnerable
groups; (ii) Local Content: generation of added value through
the transfer of skills and know-how, activation of labour along
the local supply chain and the implementation of development
projects; (iii) Land management: optimal land management
starting from the assessment of the impacts deriving from the
acquisition of land on which Eni’s activities are carried out in
order to find possible alternatives and mitigation measures; Eni
undertakes to evaluate possible project alternatives with the aim
of pursuing the well-being of local communities; (iv) Stakeholder
engagement: the Company's ability to relate to stakeholders and
strengthen mutual understanding and trust is a fundamental
element for the definition and conduct of stakeholder dialogue
and involvement activities, as well as the best actions to be
implemented to achieve sustainable development in synergy
with local communities; (v) Human Rights: assessment of
potential or actual impacts attributable – directly or indirectly –
to Eni’s activities through HRIA or HRRA (see section "Human
Rights" above), definition of the related prevention or mitigation
measures, in line with the United Nations Guiding Principles
(UNGPs) and promotion of human rights through the Local
Development Projects mentioned above.
The definition of Local Development Programme implies the
commitment of Eni in the front line on site and alongside
other development players to contribute to the sustainable
development of Countries. Many of the partnerships developed
by Eni with International Organizations and – more generally
– of development cooperation move in this direction, such
as the agreements signed in 2021: in Angola with VIS for the
integrated project in Cabinda, with CUAMM (College of Aspiring
Missionary Doctors) for a project aimed at improving health
for communities in Cunene; the agreement was also renewed
with IIA (Instituto de Investigaçao Agronomica) and with ADPP
an agreement was signed for the installation of solar panels
in 4 health centres; in Mozambique with AVSI and CUAMM in
response to the humanitarian emergency and with UNILURIO
for the implementation of a climate change resilience project
for communities in the district of Mecufi; in Kenya a cooperation
agreement for the pilot installation of organic photovoltaic
panels (OPV) in a school in Kwale County; in Egypt a cooperation
agreement was signed for the start of the Zohr School of Applied
Technology in Port Said with Elsewedi Foundation, the Ministry of
Education and Technical Training, the Ministry of Oil and Mineral
Resources, the government of Port Said and the Egyptian Natural
Gas Holding Company; with AICS (Italian Agency for Cooperation
and Development) in Mozambique to collaborate in the fields
of education and technical training, food security and nutrition,
health, access to energy and economic diversification, with
particular reference to agriculture and in Kenya in key sectors
for the development of the country such as agriculture and value
chains in environment, health, training and vocational education,
as well as access to energy/green energy and innovation; in
Kazakhstan, a cooperation agreement with UNDP (United
Nations Development Programme) for the implementation of an
energy efficiency project and the installation of a solar thermal
plant in a school in the Turkistan region. In the various business
design phases, in line with internationally recognized standard
principles/methodologies, Eni has developed: (i) analysis tools
to better understand the reference context and appropriately
address local development projects, such as Social Context
Eni Annual Report 2021 187
analysis – also based on the global Multidimensional Poverty
Index (MPI) developed by UNDP (United Nations Development
Programme) and Oxford University – and the Human Rights
Impact Assessment (HRIA); (ii) management tools to map
the relationship with stakeholders and monitor the progress
of projects and the results achieved (including Stakeholder
Management System - SMS, Logical Framework Approach -
LFA and Monitoring, Evaluation and Learning - MEL); (iii) impact
assessment tools, useful for evaluating the direct, indirect and
induced benefits generated by Eni in the context of business
operations and through the cooperation model, such as Eni's
Local Content Evaluation - ELCE and Eni's Impact Tool62; (iv)
analyses to measure the percentage spent on local suppliers
at some relevant foreign upstream subsidiaries, which in 2021
amounted to about 35% of the total amount spent.
PERFORMANCE METRICS AND COMMENTS
In 2021, investments for local development amounted to around
€105.3663 million (Eni's share), about 95% of which in the area
of upstream activities. In Africa, a total of €37.1 million was
spent, of which €28.8 million in the Sub-Saharan area, mainly
in the area of development and maintenance of infrastructure,
particularly school buildings. In Asia, around €28 million was
spent, mainly on economic diversification, in particular for
the development and maintenance of infrastructures. In Italy,
€32.6 million was spent. Overall, approximately €39.8 million
was invested in infrastructure development activities, of which
€20.5 million in Asia, €14.3 million in Africa, and €5.0 million in
Central and South America. Key projects implemented in 2021
include initiatives to promote: (i) access to water through the
construction of a water treatment plant in Iraq; maintenance
of 10 wells fed by photovoltaic systems in North-East Nigeria,
the installation of seven water points in Ghana, maintenance of
existing water points and awareness activities about the use of
clean and drinking water in Angola; (ii) access to electricity in
Libya through support to Libyan General Electricity Company
(GECOL) in terms of spare parts and training; in Angola through
maintenance of solar energy systems installed in schools
and medical centres; activities have also been carried out
to facilitate access to clean cooking in Mozambique, Ghana
KEY PERFORMANCE INDICATORS
Local development investment
of which: infrastructure
and Angola through awareness campaigns and distribution
of improved cooking systems; (iii) economic diversification
both in the agricultural sector in Angola, Congo and Nigeria
and to support local and youth entrepreneurship in Ghana and
Egypt; (iv) access to education with activities for both students
and trainers in Angola, Egypt, Mozambique, Ghana, Iraq and
Mexico. As part of the interventions implemented in response
to health needs in 2021, Eni supported 11 initiatives against the
COVID-19 pandemic, in 8 foreign countries, aimed in particular
at local vulnerable groups, hospitals, health institutions and
ministries of health, providing: ventilators and respirators;
intensive care equipment and other medical equipment;
personal protective equipment. In addition, the emergency
response plan included: (i) implementation of community
awareness campaigns and “community engagement” actions
aimed at preventing the spread of the virus; (ii) distribution of
hygiene and health information and hand washing equipment;
(iii) social protection and food assistance measures such
as the distribution of meals for families and vulnerable
groups. In addition to support to combat the pandemic, Eni
has carried out 37 initiatives in 14 countries to improve the
health status of the populations of partner Countries as an
essential prerequisite for socio-economic development,
through the strengthening of the skills of health personnel,
the construction and rehabilitation of health facilities and
information,
their equipment, access to drinking water,
education and awareness-raising on health issues among the
populations involved. The total expenditure for community
health initiatives in 2021 was €11.6 million, of which €3.1
million for support to local communities in the context of the
COVID-19 emergency.
During 2021, 245 grievances64 were received, 53% of which
were resolved and closed. The complaints mainly concerned:
management of relations with the communities, management
of environmental aspects, land management, employment
development.
Finally, in 2021, with the aim of assessing the potential impacts
of the projects on the health of the communities involved, Eni
completed 10 HIAs (Health Impact Assessment), of which 7
were integrated ESHIA preliminary studies (Environmental,
Social and Health Impact Assessment) and 3 as integrated
ESHIA.
2021
2020
2019
of which fully
consolidated
entities
Total
Total
95.6
36.6
96.1
41.8
95.3
43.4
Total
105.3
39.8
(€ million)
(62) The ELCE (Eni Local Content Evaluation) Model was developed by Eni and validated by the Polytechnic of Milan to assess the direct, indirect and induced effects
generated by Eni’s activities at a local level in the areas in which it operates. Eni's Impact Tool is a methodology developed by Eni and validated by Polytechnic of Milan
that allows assessing the social, economic and environmental impacts of its activities at local level, quantifying the generated benefits and directing investment choices
for future initiatives.
(63) The data includes expenses for resettlement activities which in 2021 amounted to €5.9 million, of which: €5.8 million in Mozambique, €0.02 million in Ghana and
€0.04 million in Kazakhstan.
(64) Complaints made by an individual or a group of individuals relating to actual or perceived accidents or damage or other environmental or social impacts, whether
occurring, ongoing or potential, and determined by the activities of the company or by a contractor or supplier. A grievance is defined as “resolved” when the parties have
agreed on a proposed resolution.
Management report | Consolidated financial statements | Annex 188
TAXONOMY
Regulation EU 852/2020 of the European Parliament and of
the Council enacted in June 2020 has established the criteria
for determining whether an economic activity qualifies as
environmentally sustainable for the purposes of establishing the
degree to which an investment is environmentally sustainable.
Based on the Regulation, an economic activity qualifies as
environmentally sustainable where that economic activity:
(a) contributes substantially to one or more of the environmental
objectives of the EU (set out in article 9 of the Regulation);
(b) does not significantly harm any of the environmental
objectives;
(c) is carried out in compliance with the minimum safeguards
foreseen by
the Regulation, which are procedures
implemented by an undertaking that is carrying out an
economic activity to ensure the alignment with the OECD
Guidelines for Multinational Enterprises and the UN Guiding
Principles on Business and Human Rights, including the
principles and rights set out in the eight fundamental
conventions identified in the Declaration of the International
Labour Organisation on Fundamental Principles and Rights
at Work and the International Bill of Human Rights;
(d) complies with technical screening criteria that have
been established by the Commission, which define the
performance thresholds whereby an economic activity offers
a substantial contribution to an environmental objective and
at the same time does not hurt any of the other objectives.
The Taxonomy Regulation has established six environmental
objectives:
1. Climate change mitigation;
2. Climate change adaptation;
3. The sustainable use and protection of water and marine
resources;
4. The transition to a circular economy;
5. Pollution prevention and control;
6. The protection and restoration of biodiversity and ecosystems.
The technical screening criteria for each of the above-mentioned
environmental objectives are established by the Commission,
who adopts delegated acts based on the power conferred by the
Taxonomy Regulation and subject to the conditions laid down in
the Regulation itself.
A delegated act identifies the economic activities that are
eligible for an environmental objective and the performance
criteria to be verified so that each economic activity makes a
substantial contribution and does not significantly harm any of
other environmental objectives. Currently the Commission has
adopted the delegated acts relating to the objectives of climate
change mitigation and climate change adaptation.
This regulation applies to undertakings which are subject to the
obligation to publish a non-financial statement or a consolidated
non-financial statement pursuant to article 19a or article 29a of
Directive 2013/34/EU of the European Parliament and of the
Council, respectively.
Based on article 8 of the Regulation, non-financial undertakings
which are subject to the obligation to publish a non-financial
statement or a consolidated non-financial statement pursuant
to article 19a or article 29a of Directive 2013/34/EU of the
European Parliament and of the Council are required to comply
with a transparency regime by disclosing in their non-financial
statements three key performance indicators (KPI) relating
to the proportion of their turnover derived from products or
services associated with economic activities that qualify as
environmentally sustainable and the proportion of their capital
expenditure and the proportion of their operating expenditure
related to assets or processes associated with economic
activities that qualify as environmentally sustainable as per
the Regulation.
The Commission has adopted a delegated regulation (2178/2021)
specifying the content and presentation of information to be
disclosed by non-financial undertakings subject to articles 19a
or 29a of Directive 2013/34/EU concerning environmentally
sustainable economic activities, and specifying the methodology
to comply with that disclosure obligation.
The new reporting obligation is in force from the non-financial
disclosure for the financial year 2021.
For the first year, non-financial undertakings shall only disclose
the proportion of Taxonomy-eligible and Taxonomy non-
eligible economic activities in their total turnover, capital and
operational expenditure and certain qualitative information.
From 2022, the TSC shall be applied to determine the
percentage each eligible economic activity’s revenues, capex
and opex is fully aligned to the Taxonomy.
To report against the Taxonomy, Eni has performed an
assessment of the whole of the economic activities in which the
Group engages.
ENI’S MAIN ELIGIBLE ECONOMIC ACTIVITIES FOR THE
CLIMATE CHANGE MITIGATION OBJECTIVE.
3.10 Manufacture of hydrogen
3.14 Manufacture of organic basic chemicals
3.17 Manufacture of plastics in primary form
4.1
Electricity generation using solar photovoltaic
technology
Electricity generation from wind power
Electricity generation from ocean energy technologies
Electricity generation from bioenergy
4.3
4.4
4.8
4.13 Manufacture of biogas and biofuels for use in transport
and of bioliquids
Cogeneration of heat/cool and power from bioenergy
4.20
5.1-5.4 Construction, extension and operation of water
collection, treatment and supply systems and Renewal
of waste, water collection and treatment
Anaerobic digestion of bio-waste
Underground permanent geological storage of CO2
5.7
5.12
Eni Annual Report 2021 189
6.10
6.15
7.6
Sea and coastal freight water transport, vessels for
port operations and auxiliary activities
Infrastructure enabling road transport and public
transport
Installation, maintenance and repair of renewable
energy technologies
Those activities are eligible also for the climate change
adaptation objective.
Economic and financial data relating to Eni’s eligible
economic activities for calculating the proportion of eligible
turnover, capex and opex, have been extracted from the
Group accounting systems, the general ledger and the
management accounting systems, which are used to prepare
the separate financial statements of each consolidated
subsidiary undertakings, mostly of which are in accordance
with IFRS. Data extracted from separate financial statements
are adjusted to align with the IFRS utilized in the preparation
of the Group consolidate financial statements and for
the consolidation transactions (intercompany sales and
purchases, elimination of unrealized profit, etc.) to calculate
Eni’ eligible turnover, capex and opex proportion.
In case of mono-business consolidated subsidiary
undertakings performing a given eligible activity, relevant
economic and financial data per the calculation of the
Group eligible proportions have been extracted from the
general ledger and the financial accounting to retrieve
amounts of revenues, operating expenditures, additions to
property, plant and equipment (PP&E) and intangible assets,
additions to the right-of-use and additions to PP&E and
intangibles resulting from business combinations.
In case of multi-business subsidiary undertakings, relevant
data for calculating the Group eligible proportions have been
derived also from the systems of managerial that split the
accounts of the financial system and allocates revenues and
cost amounts to different reporting objects (products lines,
plants, projects, cost centers, etc.) to support management’s
understanding of the drivers of the financial performance and
cost control.
Allocating the relevant items of revenues, capex and
opex to Eni’s eligible economic activities the following
proportions to Group consolidated revenues, capex and
opex are obtained:
EU TAXONOMY ELIGIBILITY 2021
Eligible
Non - Eligible
Total
% Eligible
% Non - Eligible
(€ mln)
(€ mln)
(€ mln)
Turnover
5,530
71,045
76,575
7%
93%
Capex
1,653
6,128
7,781
21%
79%
Opex
535
3,157
3,692
14%
86%
The turnover of Eni’s eligible economic activities mainly
derived from:
sales electricity generated mainly by using photovoltaic
and onshore wind technologies in the Plenitude &
Power business segment through the subsidiary Eni
New Energy SpA and the operating subsidiaries in Italy,
France, Spain and the USA;
of the Fri-El group (now EniBioCh4in) acquired during the
year;
sales of electricity and cogenerative heat produced from
forest biomass by the Versalis plant in Crescentino;
sales of the production of organic basic chemicals and
primary form plastic products from Versalis, which are
transition activities.
sales of unblended biofuels, specifically Hydrogenated
Vegetable Oil produced by the Eni’s biorefineries and
sold on the FOB market;
electricity
bioenergy
(fermentation of agricultural biomass) by the companies
sales of
produced
from
In the event of applying the TSCs, with particular reference
to the transition activities of organic basic chemicals/
manufacturing of plastic products, the turnover proportion
would reduce significantly.
EU TAXONOMY OPEX
Operating expenses
Costs of R&D expensed through profit and loss
Total EU Taxonomy opex/denominator
(€ mln)
2021
3,515
177
3,692
Operating costs of Eni Group companies to define the proportion
of the opex of eligible activities to the Group total were determined
on the basis of the management’s accounting system and Eni’s
control model of fixed costs which, starting from accounting data
relating to purchases, services, labour costs and other charges,
excludes costs relating to purchasing of raw materials, variable
costs and products for resale. This model aggregates the cost
items based on the target criterion in relation to the different
measurement and control stages in the manufacturing/sale
process:
Management report | Consolidated financial statements | Annex 190
involved
fixed industrial costs which include the labour costs for
in the maintenance, operation and
personnel
servicing of industrial plants, external services (mainly
maintenance contracted to third parties), general plant costs,
consumables (spare parts and assets to modernise plants)
and include energy efficiency actions on buildings and other
properties, as well as the purchase of outputs from eligible
activities to achieve CO2 emission reductions;
non-capitalised research & development costs;
commercial fixed costs;
general and administrative costs.
For the purposes of reporting obligations, management has
identified industrial fixed costs and non-capitalised R&D costs
as the aggregate "opex" operating expenses corresponding to
the definition of the denominator adopted by the Delegated
Regulation on reporting.
In line with the provisions, the opex incurred to purchase enabling
products or in relation to enabling manufacturing processes
have been claimed by the economic activities carried out by
Eni in compliance with art. 16 of the Taxonomy Regulation so
that do not lead to a lock-in of assets that undermine long-term
environmental goals, considering their economic life.
In this context, the opex incurred by the E&P sector to
increase energy efficiency/reduce CO2 emissions from Oil
& Gas plants were excluded. This principle has also been
applied to capex.
In 2021, Eni incurred operating costs of €14 million to purchase
carbon credits as part of its financial involvement in FAO REDD+
certified forest conservation projects; these projects are part of
the drivers identified by management to execute the net zero
emission strategy for Eni products/processes by 2050.
For the reporting requirements set by the Taxonomy Regulation,
these charges are not considered eligible because these credits
are used to offset E&P emissions.
EU TAXONOMY CAPEX
Additions to property, plant and equipment
Additions to intangibles assets
Additions to rights to use leased assets
Add: purchase cost of subsidiary undertakings & goodwill
Less: goodwill
Total EU Taxonomy capex / denominator
(€ mln)
2021
4,950
284
1,104
3,017
(1,574)
7,781
Regarding the 21% proportion of capex, the Eni eligible
activities that in 2021 recorded increases in the property, plant
and equipment and intangibles items due to expenditures or
the allocation of the purchase cost of acquired companies
and businesses or incepted leased assets, mainly referred to:
Electricity generation from renewable sources (activities
4.1 and 4.3);
Chemicals transition activities;
Electricity generation from bioenergy;
Infrastructure for low carbon transport;
The geological storage and confinement of CO2;
The manufacture of biofuels.
The denominator for the capex proportion is to the sum of
the "increases in investments" and "changes in the scope of
consolidation" items relating to the property, plant and equipment
disclosed in Note 12 to the 2021 consolidated financial statements
and similar rights to use leased assets referred to in note 13, and
intangible assets items referred to in Note 14.
In particular, the increases recorded in activity 4.1 and
4.3 in the generation of electricity from renewables, partly
related to the progress/completion of sanctioned projects
to increase generation capacity and, to a greater extent, to
the PP&E allocation of the cost of acquisitions made during
the year (referred to in the notes to the consolidated financial
statements).
Applying the TSCs to the 2021 capex proportion, the impact on
the ratio would come down slightly mainly due to leased assets.
The R&D effort, mainly recognised through profit and loss,
referred primarily to:
technologies to manufacture hydrogen and storage;
technologies to generate electricity from solar panels and
storage;
testing of technology to generate electricity using the wave
motion of the sea;
the implementation of technologies for low carbon industrial
production;
technology to store and geologically confine CO2.
Eni Annual Report 2021 SUSTAINABILITY MATERIAL TOPICS
Each year, to identify the relevant issues for the Strategic Plan
and sustainability report, the materiality analysis is updated.
This analysis covers the following phases:
1. Identification of relevant aspects: through an analysis that,
in line with the concept of double materiality, considered
a double perspective: INSIDE-OUT: topics that reflect the
real or potential significant impacts, negative or positive,
connected to Eni's activities as well as its value chain, such
as: (i) main themes emerged both from the Stakeholder
Management System platform, (see pp. 20-21), and
through interviews with the internal functions that manage
the relationships with specific categories of stakeholders,
(ii) relevant topics following benchmark analysis of the
main peers, etc., OUTSIDE-IN: risks and sustainability
the development,
opportunities
performance and position of the organization, such as:
(i) results of ESG risk assessments emerged from the
Integrated Risk Management process, also considering the
evidence provided by external providers and (ii) historical
and current macro-trends relevant to the Eni sector.
that can
influence
191
2. Involvement of Top Management and the main stakeholders:
once the relevant aspects were identified, they were prioritised
through the direct involvement of Top Management and a
representative sample of Eni's main stakeholders, to whom an
online questionnaire was submitted.
3. Prioritisation of the relevant topics: the results of the
questionnaires, together with the results of the 2021 ESG
risk assessment activity (see Main ESG Risks pp. 156-157)
made it possible to assign an order of priority to the material
issues for the 2021 sustainability reporting, allowing them to
be represented in 3 TIERS of relevance.
4. Sharing and validation with the Governing Body: the
management involved in the non-financial reporting process
validated the material aspects, which, in turn, were presented
to the Sustainability and Scenarios Committee and the Board
of Directors. The Non-Financial Statement is presented to
the Sustainability and Scenarios Committee, the Control
and Risk Committee, the Board of Statutory Auditors and
approved by the Board of Directors.
PRIORITY MATERIAL TOPICS
TIER 1 TIER 2 TIER 3
CARBON
NEUTRALITY BY 2050
Combat climate change/Reduce GHG emissions
Low carbon technologies
OPERATIONAL
EXCELLENCE
Relations with clients
Development of human capital
Diversity, inclusion and work-life balance
Health and safety of workers
Asset integrity
Biodiversity
Reduction of environmental impacts
Circular economy
Protection of human rights
Responsible supply chain management
Transparency, anti-corruption and tax strategy
ALLIANCES FOR
DEVELOPMENT
Energy access
Local content
Local development
TRANSVERSAL
THEMES
Digitalization and Cyber Security
Innovation
Management report | Consolidated financial statements | Annex 192
REPORTING PRINCIPLES AND CRITERIA
Standards, guidelines
recommendations. The
and
Consolidated Non-Financial Information was prepared in
accordance with the Legislative Decree 254/2016 transposing
the European Directive on Non-Financial Information, and the
“Sustainability Reporting Standards”, published by the Global
Reporting Initiative (GRI Standards), with a level of adherence
“in accordance Core” and has been subject to a limited review
by the independent Company, which is also the auditor
of Eni’s Annual Report as of December 31, 2021. All GRI
indicators in the Content Index refer to the version of the GRI
Standards published in 2016, with the exception of those of: (i)
"Standard 403: Occupational Health and Safety", (ii) "Standard
303: Water and Effluents” – which refer to the 2018 edition
–, (iii) "Standard 207: Tax" of 2019 and (iv) "Standard 306:
Waste” of 2020. In addition, the recommendations reported
by ESMA (European Securities and Markets Authority) on
non-financial statements were
incorporated both within
the NFI and in the Management Report, as well as the set
of core metrics defined by the WEF in the September 2020
White Paper "Measuring Stakeholder Capitalism - Towards
Common Metrics and Consistent Reporting of Sustainable
Value Creation The Declaration includes the information
required by article 8 of Regulation (EU) 2020/852 of June 18,
2020 (the "Taxonomy Regulation") and the related Delegated
Regulations (EU) 2021/2178 and (EU) 2021/2139. The limited
examination carried out by the auditing firm (PwC SpA) on
the NFI does not extend to the information, provided pursuant
to the Taxonomy Regulation, contained in the dedicated
paragraph (pp. 188-190).
Performance indicators. KPIs are selected based on the
topics identified as most significant, are collected on an
annual basis according to the consolidation scope of the
reference year and refer to the period 2019-2021 period. In
general, trends in data and performance indicators are also
calculated using decimal places not shown in the document.
The data for the year 2021 are the best possible estimate with
the data available at the time of preparation of this report.
In addition, some data published in previous years may be
subject to restatement in this edition for one of the following
reasons: refinement/change in estimation or calculation
methods, significant changes in the consolidation scope, or if
significant updated information becomes available
If a restatement is made, the reasons for it are appropriately
disclosed in the text. Most of the KPIs presented are collected
and aggregated automatically through the use of specific
Company software.
Boundary. The scope of the performance indicators is aligned
with the objectives set by the company and represents the
potential impacts of the activities Eni manages. In particular:
(i) for KPIs relating to safety, the environment and climate,
the perimeter consists not only of Eni SpA's subsidiaries,
but also of the companies in joint operation, jointly
controlled or associated companies reported in note65;
(ii) the perimeter relating to KPIs relating to health is
also extended to companies in joint operation, jointly
controlled or associated companies in which Eni has
control of operations (with the sole exception of data
relating to reports of occupational illness, which refer only
to companies consolidated on a line-by-line basis);
(iii) with regard to data referring to anti-corruption training,
the perimeter includes Eni SpA and its subsidiaries;
(iv) with regard to data referring to investments for local
development, the perimeter includes Eni SpA, subsidiaries
and joint ventures;
(v) the perimeter referring to data relating to reporting files
includes Eni SpA and its subsidiaries;
(vi) finally, the perimeter of the data related to the audits
covering the anti-corruption checks includes controlled
subsidiaries, associated companies based on specific
agreements and third parties deemed to have a higher
risk, as provided for under the contracts entered with Eni.
The comments on performance refer to these perimeters. In
addition, these performance indicators are accompanied by
an additional view only relating to 2021 in which the data of
fully consolidated companies are presented.
With regard to all other KPIs/data, the perimeter, consistently
with the reference legislation, coincides with the companies
consolidated on a line-by-line basis for the purpose of preparing
the consolidated financial statements by the Eni Group.
(65) In addition to fully consolidated companies, the boundary includes the following companies: AGIBA PETROLEUM CO, CARDÓN IV, SA, Costiero Gas Livorno SpA, Eni
Gas Transport Services Srl, Eni, Iran B.V., Eni Ukraine LLC - IN LIQUIDATION, EniProgetti Egypt Ltd, ESACONTROL SA, Groupment Sonatrach-Eni, INDUSTRIA SICILIANA
ACIDO Fosforico - ISAF - SpA - in liquidation, Karachaganak, Petroleum Operating BV, LLC ''Eni Energhia'', LLC ''Eni-Nefto'', Mellitah Oil & Gas BV, Mozambique Rovuma
Venture SpA, Oleodotto DEL RENO SA, Olèoduc du Rhone SA, Petrobel Belayim Petroleum Co, SeaPad SpA, SEGAS Services SAE, Servizi Fondo Bombole Metano SpA,
Société Energies Renouvelables Eni - ETAP SA, Società EniPower Ferrara Srl, TECNOESA SA, Vår Energi AS, VERSALIS PACIFIC (INDIA) PRIVATE LIMITED.
Eni Annual Report 2021 193
KPIs
METHODOLOGY
CLIMATE CHANGE
GHG EMISSIONS
Scope 1: direct GHG emissions are those deriving from sources associated to the company's assets (e.g. combustion, flaring,
fugitive and venting), and include CO2, CH4 and N2O; the Global Warming Potential used for conversion to CO2 equivalent is 25
for CH4 and 298 for N2O. I. Contributions of biogenic CO2 emissions are not included.
Scope 2: are the indirect GHG emissions related to the generation of electricity, steam and heat purchased by third parties and
intended for internal consumption.
Scope 3: indirect GHG emissions associated with the value chain of Eni’s products, which involve an analysis by category of
activity. In the Oil & Gas sector, the most significant category is that related to the use of energy products (end-use), which Eni
calculates according to internationally consolidated methodologies (GHG Protocol and IPIECA), based on upstream production.
EMISSION
INTENSITY
Indicators consider the direct GHG emissions (Scope 1) related to assets operated by Eni, which include CO2, CH4 and N2O,
accounted for on a 100% basis.
Upstream: indicator focused on emissions associated to development and production of hydrocarbons. Denominator refers
to gross operated production.
R&M: indicator focused on emissions related to traditional and biorefineries. Denominator refers to refinery throughputs (raw
OPERATIONAL
EFFICIENCY
ENERGY
INTENSITY
NET CARBON
FOOTPRINT
NET GHG LIFECYCLE
EMISSIONS
NET CARBON
INTENSITY
RENEWABLE
INSTALLED
CAPACITY
and semi-finished materials).
EniPower: indicator focused on emissions related to electricity and steam production of thermoelectric plants. Denominator
refers to equivalent electricity produced (excluding the Bolgiano cogeneration plant).
Operational efficiency expresses the intensity of GHG emissions (Scope 1 and Scope 2 in tonCO2eq.) of the main industrial
activities operated by Eni divided by the productions (converted by homogeneity into barrels of oil equivalent using Eni’s
average conversion factors) of the single businesses of reference, thus measuring their degree of operating efficiency in a
decarbonization scenario. In particular, the following specifications apply:
Upstream: includes the hydrocarbon production and electricity plants;
R&M: includes only refineries;
Chemicals: includes all plants;
EniPower: includes thermoelectric plants except for the Bolgiano cogeneration plant.
Differently from the other emission intensity indicators, which refer to single businesses and consider only GHG Scope 1
emissions, the operating efficiency index effectively measures Eni’s commitment for reducing its GHG emission intensity by
including also Scope 2 emissions.
The refining energy intensity index represents the total amount of energy actually used in the reference year among the various
refinery processing plants, divided by the corresponding value of preset standard consumption values for each processing
plant. To allow comparison over the years, 2009 data is taken as a reference (100%). For other sectors, the index represents the
ratio between significant energy consumption associated to operated plants and the related production.
Eni net carbon footprint: the indicator considers GHG Scope 1+2 emissions associated to hydrocarbons development and
production activities, operated by Eni and by third parties, accounted for on an equity basis (Revenue Interest), net of offsets mainly
deriving from Natural Climate Solutions occurred in the reference reporting year.
Net carbon footprint upstream: the indicator considers the GHG Scope 1+2 emissions associated to hydrocarbon development
and production activities operated or not by Eni, accounted for on an equity basis (revenue interest) and net of the offsets mainly
deriving from Natural Climate Solutions occurred in the reference year.
The indicator refers to GHG Scope 1+2+3 emissions associated with the value chain of the energy products sold by Eni,
including both those deriving from own productions and those purchased from third parties, accounted for on an equity
basis, net of offsets mainly deriving from Natural Climate Solutions. Differently from Scope 3 end-use emissions, which
Eni reports based on upstream production, the Net GHG Lifecycle Emissions indicator considers a much wider perimeter,
including Scope 1, 2 and Scope 3 emissions referred to the whole value chain of energy products sold by Eni, thus including
Scope 3 end-use emissions associated to gas purchased by third parties and petroleum products sold by Eni.
The indicator, accounted for on an equity basis, is defined as the ratio between Net GHG Lifecycle Emissions (see Net GHG
Lifecycle Emissions definition) and the energy content of the products sold by Eni.
The indicator is measured as the maximum generating capacity of Eni’s share power plants that use renewable energy
sources (wind, solar and wave, and any other non-fossil fuel source of generation deriving from natural resources, excluding
nuclear energy) to produce electricity. The capacity is considered “installed” once the power plants are in operation or the
mechanical completion phase has been reached. The mechanical completion represents the final construction stage
excluding the grid connection.
PEOPLE, HEALTH AND SAFETY
INDUSTRIAL
RELATIONS
Regarding industrial relations, the minimum notice period for operational changes is in line with the provisions of the laws in
force and the trade union agreements signed in the Countries in which Eni operates.
Employees covered by collective bargaining: are those employees whose employment relationship is governed by collective
agreements or contracts, whether national, industry, Company or site. This is the only KPI dedicated to people that considers
role-based employees (Company with which the employee enters into the employment contract). All others, including indicators
on training, are calculated according to the utilisation method (Company where the work is actually done). It should be noted
that, using this second method, the two aspects (role companies and service) could coincide.
GENDER PAY
GAP RAW
The raw pay ratio is calculated as the ratio of the average pay of the female population to the average pay of the male population
for the individual job title and for the overall population.
SENIORITY
Average number of years worked by employees at Eni and its subsidiaries.
TRAINING
HOURS
Hours provided to Eni SpA and subsidiaries employees through training courses managed and carried out by Eni Corporate
University (classroom and remote) and through activities carried out by the organizational units of Eni's Business areas/
Companies independently, also through on-the-job training. Average training hours are calculated as total training hours divided
by the average number of employees in the year
Management report | Consolidated financial statements | Annex 194
KPIs
METHODOLOGY
LOCAL SENIOR AND
MIDDLE MANAGERS
ABROAD
TURNOVER
RATE
SAFETY
HEALTH
ENVIRONMENT
WATER
RESOURCES
BIODIVERSITY
Number of local senior managers + middle managers (employees born in the Country in which their main working activity is
based) divided by total employment abroad.
Ratio of the number of Hires + Terminations of permanent contracts and the permanent employment contracts of the previous
year.
Eni uses a large number of contractors to carry out the activities within its own sites.
TRIR: total recordable injury rate (injuries leading to days of absence, medical treatments and cases of work limitations).
Numerator: number of total recordable injuries; denominator: hours worked in the same period. Result of the ratio
multiplied by 1,000,000.
High-consequence work-related injuries rate: injuries at work with days of absence exceeding 180 days or resulting
in total or permanent disability. Numerator: number of injuries at work with serious consequences; denominator: hours
worked in the same period. Result of the ratio multiplied by 1,000,000.
Near miss: an incidental event, the origin, execution and potential effect of which is accidental in nature, but which
is however different from an accident only in that the result has not proved damaging, due to luck or favourable
circumstances, or to the mitigating intervention of technical and/or organizational protection systems.
Accidental events that do not turn into accidents or injuries are therefore considered to be near misses. The main hazards
detected in 2021 in Eni concern:
falling (ground level);
shock, impact, crushing during the use of equipment;
load lifting.
For the assessment of accident KPIs, in addition to the GRI standard, Eni adopts and integrates, through its own internal
procedures, the IOGP guidelines on work-relatedness events, also taking into account country risk.
Number of occupational disease claims filed by heirs: indicator used as a proxy for the number of deaths due to
occupational diseases.
Recordable cases of occupational diseases: number of occupational disease reports.
Main types of diseases: reports of suspected occupational disease made known to the employer concern pathologies
that may have a causal connection with the risk at work, as they may have been contracted in the course of work and
due to prolonged exposure to risk agents present in the workplace. The risk may be caused by the processing carried out,
or by the environment in which the processing takes place. The main risk agents whose prolonged exposure may lead
to an occupational disease are: (i) chemical agents (example of disease: neoplasms, respiratory system diseases, blood
diseases); (ii) biological agents (example of disease: malaria); (iii) physical agents (example of disease: hearing loss).
Water withdrawals: sum of sea water, freshwater, and brackish water from subsoil or surface withdrawn. TAF (groundwater
treatment plant) water represents the amount of polluted groundwater treated and reused in the production cycle. The
limit for freshwater, which is more conservative than that indicated by the GRI reference standard (equal to 1,000 ppm),
is 2,000 ppm TDS, as provided in the IPIECA/API/IOGP 2020 guidance.
Water discharges: The internal procedures relating to the operational management of water discharges regulate the
control of the minimum quality standards and the authorization limits prescribed for each operational site, ensuring that
they are respected and promptly resolved if they are exceeded.
Number of sites overlapping with protected areas and Key Biodiversity Areas (KBAs): R&M, Versalis and EniPower
operational sites and pipelines in Italy and abroad, which are located within (or partially within) the boundaries of one or
more protected areas or KBAs (December of each reference year).
Number of sites adjacent to protected areas or Key Biodiversity Areas (KBAs): R&M, Versalis and EniPower operational
sites in Italy and abroad which, although outside the boundaries of protected areas or KBA, are less than 1 km away
(December of each reference year).
Number of upstream concessions overlapping protected areas and Key Biodiversity Areas (KBAs), with activities in the
overlapping area: active national and international concessions, operated, under development or in production, present
in the Company's databases in June of each reference year that overlap one or more protected areas or KBAs, where
development/production operations (wells, sealines, pipelines and onshore and offshore installations as documented in
the Company's GIS geodatabase) are located within the intersection area.
Number of upstream concessions overlapping protected areas or Key Biodiversity Areas (KBAs), without activities
in the overlapping area: active national and international concessions, operated, under development or in production,
present in the Company's databases in June of each reference year that overlap one or more protected areas or
KBAs, where development/production operations (wells, sealines, pipelines and onshore and offshore installations as
documented in the Company's GIS geodatabase) are located outside the intersection area.
The sources used for the census of protected areas and KBAs are the "World Database on Protected Areas" and the
"World Database of Key Biodiversity Areas" respectively; the data was made available to Eni in the framework of its
membership in the UNEP-WCMC Proteus Partnership (UN Environment Programme – World Conservation Monitoring
Center). There are some limitations to consider when interpreting the results of this analysis:
it is globally recognized that there is an overlap between the different databases of protected areas and KBAs, which
may have led to a certain degree of duplication in the analysis (some protected areas/KBAs could be counted several
times);
the databases of protected or key biodiversity areas used for the analysis, while representing the most up-to-date
information available at global level, may not be complete for each Country.
SPILL
Spills from primary or secondary containment into the environment of oil or petroleum derivative from refining or oil
waste occurring during operation or as a result of sabotage, theft or vandalism.
Eni Annual Report 2021 195
KPIs
WASTE
AIR PROTECTION
HUMAN RIGHTS
SECURITY
CONTRACTS WITH
HUMAN RIGHTS
CLAUSES
WHISTLEBLOWING
REPORTS
SUPPLIERS
SUPPLIERS
SUBJECTED
TO ASSESSMENT
NEW SUPPLIERS
ASSESSED
ACCORDING
TO SOCIAL CRITERIA
METHODOLOGY
Waste from production: waste from production activities, including waste from drilling activities and construction sites.
Waste from remediation activities: this includes waste from soil securing and remediation activities, demolition and
groundwater classified as waste.
The waste disposal method is communicated to Eni by the third party authorised for disposal.
NOx: total direct emissions of nitrogen oxide due to combustion processes with air. It includes emissions of NOx from
flaring activities, sulphur recovery processes, FCC regeneration, etc. It includes emissions of NO and NO2, excluding N2O.
SOx: total direct emissions of sulphur oxides, including emissions of SO2 and SO3.
NMVOC: total direct emissions of hydrocarbons, hydrocarbon substitutes and oxygenated hydrocarbons that evaporate
at normal temperature. They include LPG and exclude methane.
PST: direct emissions of Total Suspended Particulates, finely divided solid or liquid material suspended in gaseous flows.
Standard emission factors.
The indicator "percentage of security contracts with human rights clauses" is obtained by calculating the ratio between
the "Number of security and security porter contracts with human rights clauses" and the "Total number of security and
security porter contracts".
The indicator refers to the whistleblowing files relating to Eni SpA and its subsidiaries, closed during the year and relating
to Human Rights; of the files thus identified, the number of separate assertion is reported as a result of the investigation
conducted on the facts reported (founded, partially founded, unfounded, not ascertainble and not applicable).
The indicator represents all suppliers subject to a Due Diligence or subject to a qualification process or subject to a
performance evaluation feedback on HSE or Compliance areas or subject to a feedback process or subject to an assessment
on human rights issues (inspired by the SA 8000 standard or similar certification), for which the Vendor Management
activities are centralized in Eni SpA (e.g. all Italian, mega and international suppliers) or are carried out locally by foreign
subsidiaries with a vendor management function and operating on VMS at least on the qualification module for more than
one year (Eni Ghana, Eni Pakistan, Eni US and Eni Angola, Eni México S. de RL de CV, IEOC, Eni Australia and Eni Nigeria
(NAOC)). The perimeter is progressively extended each year as the VMS system is deployed.
This indicator is included in the "Suppliers subject to assessment" indicator and represents all new suppliers subjected
to a new qualification process.
TRANSPARENCY, ANTI-CORRUPTION AND TAX STRATEGY
COUNTRY-
BY-COUNTRY
REPORT
The disclosure relating to the Country-by-Country report is covered by means of a reference to the last published
document (generally the financial year preceding the NFI reporting year) reporting the main information required by GRI
standard (207-4).
ANTI-CORRUPTION
TRAINING
E-learning for resources in a context at medium/high risk of corruption.
E-learning for resources in a context of low risk of corruption.
General workshop: classroom training events for staff in a context of high risk of corruption.
Job specific training: classroom training events for specific professional areas operating in contexts with a high risk of
corruption.
LOCAL DEVELOPMENT
LOCAL
DEVELOPMENT
INVESTMENTS
The indicator refers to the Eni share of spending in local development initiatives carried out by Eni in favour of local
communities to promote the improvement of the quality of life and sustainable socio-economic development of
communities in operational contexts.
SPENDING
TO LOCAL
SUPPLIERS
The indicator refers to the 2021 share of expenditure to local suppliers. "Spending to local suppliers" has been defined
according to the following alternative methods on the basis of the specific characteristics of the Countries analysed:
1)"Equity method" (Ghana): the share of expenditure towards local suppliers is determined on the basis of the percentage
of ownership of the corporate structure (e.g. for a Joint Venture with 60% local components, 60% of total expenditure
towards the Joint Venture is considered as expenditure towards local suppliers); 2) "Local currency method” (Angola,
Vietnam and the UK): the share paid in local currency is identified as expenditure towards local suppliers; 3) "Country
registration method" (Iraq, Indonesia, United Arab Emirates, Nigeria, Mozambique and the USA): the expenditure towards
suppliers registered in the Country and not belonging to international groups/mega suppliers (e.g. suppliers of drilling
services/auxiliary drilling services) is identified as local; 4) "Method of registration in the Country + local currency" (Congo
and Mexico): expenditure towards suppliers registered in the Country and not belonging to international groups/mega
suppliers (e.g. suppliers of drilling services) is identified as local. For the latter, spending in local currency is considered to
be local. The selected countries are Ghana, Angola, UK, Iraq, Nigeria, Congo, Mexico, Mozambique, USA, Indonesia, UAE
and Vietnam. The Countries selected are those most representative for Eni business from a strategic point of view and
in which a relevant procurement plan for the four-year period 21-24 has been recorded compared to the total spent by
the Eni Group.
Management report | Consolidated financial statements | Annex 196
GRI CONTENT INDEX
Material
Aspect/
Disclosure GRI
KPI Description/Disclosure GRI
Section and/or page number
Omission WEF - Core Topics and Metrics
ORGANIZATIONAL PROFILE
102-1
102-2
102-3
102-4
102-5
102-6
102-7
102-8
102-9
102-10
102-11
102-12
102-13
STRATEGY
102-14
Name of the organization
Annual Report 2021, p. 2
Activities, brands, products, and
services
Annual Report 2021, pp. 2-3
Location of headquarters
Annual Report 2021, retro cover
Location of operations
Annual Report 2021, p. 2
Owneship and legal form
Annual Report 2021, retro cover
https://www.eni.com/en-IT/about-us/governance.html
Market served
Annual Report 2021, p. 3
Scale of the organization
Annual Report 2021, pp. 16-19
Information on employees and other
workers
NFI 2021, pp. 165-170
Supply chain
NFI 2021, pp. 182-183
Significant changes to the
organization and its supply chain
Annual Report 2021, pp. 215-219; 387-389
Precaution Principle or approach
Annual Report 2021, pp. 28-33
External initiatives
Annual Report 2021, pp. 20-21
Membership of association
Annual Report 2021, pp. 20-21
Statement from senior
decision-maker
Annual Report 2021, pp. 8-15
102-15
Key impacts, risks, and opportunities Annual Report 2021, pp. 28-33; 122-146
Risk and opportunity oversight -
Integrating risk and opportunity into
business process
ETHICS AND INTEGRITY
102-16
Values, principles, standards, and
norms of behavior
Annual Report 2021, pp. 4-5; 39-43
Governing purpose - Setting purpose
NFI 2021, pp. 150; 152-153
Ethical behavior - Protected ethics
advice and reporting mechanisms
GOVERNANCE
102-18
Governance structure
Annual Report 2021, pp. 34-43
STAKEHOLDER ENGAGEMENT
102-40
102-41
102-42
102-43
List of stakeholders groups
Annual Report 2021, pp. 20-21
Collective bargain agreement
NFI 2021, pp. 170; 193
Indentifying and selecting
stakeholders
Approach to stakeholder
engagement
Annual Report 2021, pp. 20-21
Annual Report 2021, pp. 20-21
102-44
Key topics and concerns raised
Annual Report 2021, pp. 20-21
REPORTING PRACTICES
102-45
102-46
Entities included in the consolidated
financial statement
Annual Report 2021, pp. 348-389
Defining report content and topic
Boundaries
NFI 2021, p. 192
NFI 2021, pp. 192; 196-199
102-47
List of material topics
NFI 2021, pp. 191; 192
102-48
102-49
102-50
Restatements of information
NFI 2021, pp. 164; 170; 177
Changes in reporting
NFI 2021, pp. 192; 196-199
Reporting period
NFI 2021, p. 192
Stakeholder engagement - Material
issues impacting stakeholders
Stakeholder engagement - Material
issues impacting stakeholders
Eni Annual Report 2021
197
Material
Aspect/
Disclosure GRI
KPI Description/Disclosure GRI
Section and/or page number
Omission WEF - Core Topics and Metrics
102-51
Date of most recent reports
https://eni.com/en-IT/investors/financial-results-and-reports.
html
102-52
102-53
102-54/102-55
Reporting cycle
NFI 2021, p. 192
Contact point for question regarding
the report
Claims of reporting in accordance
with the GRI Standards / GRI content
index
https://eni.com/en-IT/just-transition.html
NFI 2021, pp. 192; 196-199
102-56
External assurance
Annual Report 2021
COUNTER CLIMATE CHANGE AND LOW CARBON TECHNOLOGIES
Reduction of GHG Emissions; Renewables; Biofuels and Green Chemistry; Hydrogen; Solutions for the storage of CO2; Customer relations
Economic performance - Management approach
(103-1; 103-2; 103-3)
Boundary: internal and external (Suppliers - RNES1;
customers - RNEC2)
NFI 2021, pp. 152-153; 154-155; 191; 197
201-2
Financial implications and other risks
and opportunities due to climate
change
Annual Report 2021, pp. 30; 138-143
NFI 2021, pp. 158-164
Emissions - Management approach
(103-1; 103-2; 103-3)
Boundary: internal and external
(Suppliers - RNEF1; clienti - RNEC2)
DNF, pp. 152-153; 154-155; 158-164; 191; 193; 197
Climate change - TCFD implementation
305-1
305-2
305-3
305-4
305-5
305-7
Direct GHG emissions (Scope 1)
NFI 2021, pp. 162-164; 193
Greenhouse gas emissions from
energy consumption (Scope 2)
NFI 2021, pp. 162-164; 193
Other indirect GHG emissions (Scope
3)
NFI 2021, pp. 162-164; 193
GHG emission intensity
NFI 2021, pp. 162-164; 193
Reduction of GHG emissions
NFI 2021, pp. 162-164; 193
Nitrogen oxides (NOx), sulfur oxides
(SOx), and other significant air
emissions
NFI 2021, pp. 174-177; 194-195
Energy - Management approach
(103-1; 103-2; 103-3)
Boundary: internal
NFI 2021, pp. 152-153; 158-164; 191; 193; 197
302-3
Energy intensity
NFI 2021, pp. 162-164; 193
PEOPLE
Employment; Diversity; inclusion and work-life balance; Training; Occupational health and local community’s health
Market presence - Management approach
(103-1; 103-2; 103-3)
Boundary: internal
NFI 2021, pp. 152-153; 165-170; 191; 193-194; 197
202-2
Proportion of senior management
hired from the local community
NFI 2021, pp. 167-170; 193-194
Employment - Management approach
(103-1; 103-2; 103-3)
Boundary: internal
NFI 2021, pp. 152-153; 165-170; 191; 193-194; 197
401-1
New employee hires and employee
turnover
NFI 2021, pp. 167-170; 193-194
Occupational health and safety - Management
approach (103-1; 103-2; 103-3; 403-1; 403-2; 403-3;
403-4; 403-5; 403-7)
Boundary: internal
NFI 2021, pp. 152-153; 165-170; 191; 193-194; 197
403-10
Work-related ill health
NFI 2021, pp. 167-170; 193-194
Trading and education - Management approach
(103-1; 103-2; 103-3)
Boundary: internal
NFI 2021, pp. 152-153; 165-170; 191; 193-194; 197
Climate change - Greenhouse gas
(GHG) emissions
Employment and wealth generation
- Absolute number and rate of
employment
404-1
404-3
Average hours of training per year
per employee
Percentage of employees receiving
regular performance and career
development reviews
NFI 2021, pp. 167-170; 193-194
Skills for the future - Training provided
NFI 2021, p. 166
Diversity and equal opportunity - Management
approach (103-1; 103-2; 103-3)
Boundary: internal
NFI 2021, pp. 152-153; 165-170; 191; 193-194; 197
Dignity and equality - Pay equality
Report on remuneration policy and
remuneration paid
Dignity and equality - Wage level
Report on remuneration policy and
remuneration paid
Management report | Consolidated financial statements | Annex
198
Material
Aspect/
Disclosure GRI
405-1
KPI Description/Disclosure GRI
Section and/or page number
Omission WEF - Core Topics and Metrics
Diversity of governance bodies and
employees
NFI 2021, pp. 167-170
Quality of governing body -
Governance body composition
Corporate Governance and Shareholding Structure
Report 2021, Board of Directors
Dignity and equality - Diversity and
inclusion
SAFETY
(People safety; Asset integrity)
Occupational health and safety - Management
approach (103-1; 103-2; 103-3; 403-1; 403-2; 403-4;
403-5; 403-6; 403-7)
Boundary: internal and external (Suppliers)
NFI 2021, pp. 152-153; 171-172; 191; 194; 198
403-9
Work-related injuries
NFI 2021, pp. 172; 193-194
REDUCTION OF ENVIRONMENTAL IMPACTS
Water resources; Biodiversity; Oil spill; Air quality; Remediation and waste; Circular economy
Water - Management approach
(103-1; 103-2; 103-3; 303-1; 303-2)
Boundary: internal
NFI 2021, pp. 152-153; 172-178; 191; 194; 198
303-3
Water withdrawal
NFI 2021, pp. 174-178; 194
303-4
Water discharge
NFI 2021, pp. 174-178; 194
Biodiversity - Management approach
(103-1; 103-2; 103-3)
Boundary: internal
NFI 2021, pp. 152-153; 172-178; 191; 194; 198
304-1
Operational sites owned, leased,
managed in, or adjacent to, protected
areas and areas of high biodiversity
value outside protected areas
NFI 2021, pp. 174-178; 194
Waste - Management approach
(103-1; 103-2; 103-3; 306-1; 306-2)
Boundary: internal
NFI 2021, pp. 152-153; 172-178; 191; 195; 198
306-3
306-4
306-5
Waste generated
NFI 2021, pp. 174-178; 195
Waste diverted from disposal
NFI 2021, pp. 174-178; 195
Waste directed to disposal
NFI 2021, pp. 174-178; 195
Environmental compliance - Management approach
(103-1; 103-2; 103-3)
Boundary: internal
NFI 2021, pp. 152-153; 172-178; 191; 194; 198
307-1
Evironmental compliance
Annual Report 2021, pp. 288-302
PROTECTION OF HUMAN RIGHTS
Human rights of workers and local communities, supply chain and security
Health and well being - Health and
safety
Health and well being - Health and
safety
Freshwater availability - Water
consumption and withdrawal in water-
stressed areas
Nature loss - Land use and ecological
sensitivity
Non-discrimination - Management approach
(103-1; 103-2; 103-3)
Boundary: internal and external (Local security
forces and Suppliers - RNES1)
Dignity and equality - Risk for incidents
of child, forced or compulsory labour
NFI 2021, pp. 152-153; 178-181; 191; 195; 198
406-1
Incidents of discrimination and
corrective actions taken
NFI 2021, pp. 180-181; 195
Security practices - Management approach
(103-1; 103-2; 103-3)
Boundary: internal and external (Local security
forces and Suppliers - RNES1)
NFI 2021, pp. 152-153; 178-181; 191; 195; 198
410-1
Security personnel trained in human
rights policies or procedures
NFI 2021, pp. 180-181; 195
Human rights assessment - Management approach
(103-1; 103-2; 103-3)
Boundary: internal and external (Local security
forces and Suppliers - RNES1)
412-2
Training on human rights
NFI 2021, pp. 180-181; 195
Suppliers and social assessment - Management
approach (103-1; 103-2; 103-3)
Boundary: internal and external (Local security
forces and Suppliers - RNES1)
NFI 2021, pp. 152-153; 178-181; 191; 195; 198
NFI 2021, pp. 152-153; 182-183; 191; 195; 198
414-1
New suppliers that were screened
using social criteria
NFI 2021, pp. 182-183; 195
INTEGRITY IN BUSINESS MANAGEMENT
Transparency, anti-corruption and tax strategy
Eni Annual Report 2021
199
Material
Aspect/
Disclosure GRI
KPI Description/Disclosure GRI
Section and/or page number
Omission WEF - Core Topics and Metrics
Anti-corruption - Management approach
(103-1; 103-2; 103-3)
Boundary: internal and external (Suppliers - RPES3)
NFI 2021, pp. 152-153; 183-185; 191; 195; 199
205-2
205-3
Communication and training
on anti-corruption policies and
procedures
NFI 2021, pp. 185; 195
Confirmed incidents of corruption
and actions taken
NFI 2021, pp. 185; 195
Tax - Management approach
(103-1; 103-2; 103-3; 207-1; 207-2; 207-3)
207-4
Tax: Country-by-Country reporting
Boundary: internal
NFI 2021, pp. 152-153; 183-185; 191; 195; 199
NFI 2021, pp. 183-185; 195. See Note 33 on the
Consolidated Financial Statements for further
information
Ethical behaviour - Anti-corruption
ACCESS TO ENERGY, LOCAL DEVELOPMENT THROUGH PUBLIC-PRIVATE PARTNERSHIPS
Economic diversification; Education and training; Access to water, energy and sanitation; Health; Forest and land protection and conservation; Public-private
partnerships
Indirect economic impacts - Management approach
(103-1; 103-2; 103-3)
Boundary: internal
NFI 2021, pp. 152-153; 186-187; 191; 195; 199
203-1
Infrastructure investments and
services supported
NFI 2021, pp. 186-187; 195
Boundary: internal
NFI 2021, pp. 152-153; 191; 199
Economic performance - Management approach
(103-1; 103-2; 103-3)
201-1
Direct economic value generated
and distributed
NFI 2021, p. 199
Local communities - Management approach (103-1;
103-2; 103-3)
Boundary: internal
NFI 2021, pp. 152-153; 186-187; 191; 195; 199
413-1
Operations with local community
engagement, impact assessments,
and development programs
NFI 2021, pp. 186-187; 195
LOCAL CONTENT
Responsible management of the supply chain; Business and added value created in countries of presence
Procurement practices - Management approach
(103-1; 103-2; 103-3)
Boundary: internal ed external (Suppliers - RNES1)
NFI 2021, pp. 152-153; 186-187; 191; 195; 199
204-1
Proportion of spending
on local suppliers
NFI 2021, pp. 186-187; 195
DIGITALIZATION, INNOVATION AND CYBER SECURITY
Technological innovation - Management approach
(103-1; 103-2; 103-3)
Boundary: internal
NFI 2021, pp. 152-153; 158-164; 191; 199
(1) RNES = Reporting not extended to suppliers.
(2) RNEC= Reporting not extended to customers.
(3) RPES = Reporting partially extended to suppliers.
Employment and wealth generation -
Financial investment contribution
In 2021, investments net of
depreciation amounted to €5,067
million and share buybacks plus
dividend payments amounted to €2,763
million.
Community and social vitality - Total
tax paid
Eni paid €3,726 million in taxes in 2021.
Employment and wealth generation -
Economic contribution
1) In 2021, Eni generated an economic
value of €78 billion of which €66 billion
were distributed, in particular: 84% are
operating costs, 4% wages and salaries
for employees, 6% payments to capital
suppliers, 6% payments to the Public
Administration.
2) In 2021, Eni received approximately
€84 million in financial assistance
from the Public Administration, mainly
abroad.
Innovation of better products and
services - Total R&D expenses
NFI 2021, p. 164
Management report | Consolidated financial statements | Annex 200
Other information
Acceptance of Italian responsible payments code
Coherently with Eni’s policy on transparency and accuracy
in managing its suppliers, Eni SpA adhered to the Italian
responsible payments code established by Assolombarda in
2014. In 2021, payments to Eni’s suppliers were made within
53 days, in line with contractual provisions.
Rules for transparency and substantial and procedural
fairness of transactions with related parties
The rules for transparency and substantial and procedural
fairness of transactions with related parties adopted by the
Company, in line with the Consob listing standards are available
on the Company’s website and in the Corporate Governance
and Shareholding Structure Report.
Article No. 15 (former Article No. 36) of Italian regulatory
exchanges (Consob Resolution No. 20249 published on
December 28, 2017). Continuing listing standards about
issuers that control subsidiaries incorporated or regulated
in accordance with laws of extra-EU Countries. Certain
provisions have been enacted to regulate continuing Italian
listing standards of issuers controlling subsidiaries that
are incorporated or regulated in accordance with laws of
extra-EU Countries, also having a material impact on the
consolidated financial statements of the parent company.
Regarding the aforementioned provisions, the Company
discloses that:
} as of December 31, 2020, 12 of Eni’s subsidiaries: NAOC
- Nigerian Agip Oil Co. Ltd, Eni Petroleum Co. Inc., Eni
Congo SA, Nigerian Agip Exploration Ltd, Eni Canada
Holding Ltd, Eni Ghana Exploration and Production Ltd,
Eni Trading & Shipping Inc., Eni UK Ltd, Eni Investments
Plc, Eni Lasmo Plc, Eni ULX Ltd, Eni UK Holding Plc;
} the Company has already adopted adequate procedures to
ensure full compliance with the new regulations.
Branches
In accordance with Article No. 2428 of the Italian Civil Code, it
is hereby stated that Eni has the following branches:
San Donato Milanese (MI) - Via Emilia, 1;
San Donato Milanese (MI) - Piazza Vanoni, 1.
Subsequent events
In March 2022, the Italian government enacted a law that imposes
a one-time expense on extra-profits of energy companies
determined on the basis of certain transactions for the six-months
ended March 31, 2022 compared to the same period in the prior
year. Considering that further legislative action and implementation
guidance are required and because the data required to determine
the extra-profit are not fully available, management is not able to
make a reliable estimate of the law’s impact on the consolidated
financial statements.
No further significant events were reported after December 31,
2021, apart from what is already included in the operating review of
this Annual Report.
Eni Annual Report 2021 201
Glossary
The glossary of Oil and Gas terms is available on Eni’s web
page at the address eni.com. Below is a selection of the most
frequently used terms.
sulfur oxides including SO2 and SO3 emissions. Main sources
are combustion plants, diesel engines (including maritime
engines), gas flaring (if the gas contains H2S), sulphur recovery
processes, FCC regeneration, etc.
2nd and 3rd generation feedstock Are feedstocks not in
competition with the food supply chain as the first generation
feedstock (vegetable oils). Second generation are mostly
agricultural non-food and agro/urban waste (such as animal
fats, used cooking oils and agricultural waste) and the third
generation feedstocks are non-agricultural high innovation
feedstocks (deriving from algae or waste).
Average reserve life index Ratio between the amount of
reserves at the end of the year and total production for the year.
Barrel/bbl Volume unit corresponding to 159 liters. A barrel of
oil corresponds to about 0.137 metric tonnes.
Boe (Barrel of Oil Equivalent) Is used as a standard unit
measure for oil and natural gas. Effective January 1, 2019,
Eni has updated the conversion rate of gas produced to 5,310
cubic feet of gas equals 1 barrel of oil.
Compounding Activity specialized in production of semi-
in granular form resulting from the
finished products
combination of two or more chemical products.
Conversion Refinery process allowing the transformation of
heavy fractions into lighter fractions. Conversion processes
are cracking, visbreaking, coking, the gasification of refinery
residues, etc. The ration of overall treatment capacity of these
plants and that of primary crude fractioning plants is the
conversion rate of a refinery. Flexible refineries have higher
rates and higher profitability.
Elastomers (or Rubber) Polymers, either natural or synthetic,
which, unlike plastic, when stress is applied, return, to a certain
degree, to their original shape, once the stress ceases to be
applied. The main synthetic elastomers are polybutadiene (BR),
styrene-butadiene rubber (SBR), ethylenepropylene rubber
(EPR), thermoplastic rubber (TPR) and nitrylic rubber (NBR).
Emissions of NOx (Nitrogen Oxides) Total direct emissions
of nitrogen oxides deriving from combustion processes in air.
They include NOx emissions from flaring activities, sulphur
recovery processes, FCC regeneration, etc. They include NO
and NO2 emissions and exclude N2O emissions.
Enhanced recovery Techniques used to increase or stretch
over time the production of wells.
Eni carbon efficiency index Ratio between GHG emissions
(Scope 1 and Scope 2 in tonnes CO2eq.) of the main industrial
activities operated by Eni divided by the productions (converted
by homogeneity into barrels of oil equivalent using Eni’s average
conversion factors) of the single businesses of reference.
Green House Gases (GHG) Gases
in the atmosphere,
transparent to solar radiation, that trap infrared radiation emitted
by the earth’s surface. The greenhouse gases relevant within
Eni’s activities are carbon dioxide (CO2), methane (CH4) and
nitrous oxide (N2O). GHG emissions are commonly reported in
CO2 equivalent (CO2eq.) according to Global Warming Potential
values in line with IPCC AR4, 4th Assessment Report.
Infilling wells Infilling wells are wells drilled in a producing area
in order to improve the recovery of hydrocarbons from the field
and to maintain and/or increase production levels.
LNG Liquefied Natural Gas obtained through the cooling of
natural gas to minus 160°C at normal pressure. The gas is
liquefied to allow transportation from the place of extraction to
the sites at which it is transformed and consumed. One ton of
LNG corresponds to 1,400 cubic meters of gas.
LPG Liquefied Petroleum Gas, a mix of light petroleum
fractions, gaseous at normal pressure and easily liquefied at
room temperature through limited compression.
Mineral Potential (potentially recoverable hydrocarbon
volumes) Estimated recoverable volumes which cannot
be defined as reserves due to a number of reasons,
such as the temporary lack of viable markets, a possible
commercial recovery dependent on the development of new
technologies, or for their location in accumulations yet to
be developed or where evaluation of known accumulations
is still at an early stage.
Moulding Activity of moulding of expanded polyolefins for
production of ultra-light products.
Emissions of SOx (Sulphur Oxides) Total direct emissions of
Natural gas liquids Liquid or liquefied hydrocarbons recovered
Management report | Consolidated financial statements | Annex 202
from natural gas through separation equipment or natural
gas treatment plants. Propane, normal-butane and isobutane,
isopentane and pentane plus, that used to be defined natural
gasoline, are natural gas liquids.
Net Carbon Footprint Overall Scope 1 and Scope 2 GHG
emissions associated with Eni’s operations, accounted for
on an equity basis, net of carbon sinks mainly from Natural
Climate Solutions.
Net Carbon Intensity Ratio between the Net GHG lifecycle
emissions and the energy products sold, accounted for on an
equity basis.
Net GHG Lifecycle Emissions GHG Scope 1+2+3 emissions
associated with the value chain of the energy products sold by
Eni, including both those deriving from own productions and
those purchased from third parties, accounted for on an equity
basis, net of offset mainly from Natural Climate Solutions.
Oil spills Discharge of oil or oil products from refining or oil
waste occurring in the normal course of operations (when
accidental) or deriving from actions
intended to hinder
operations of business units or from sabotage by organized
groups (when due to sabotage or terrorism).
Oilfield chemicals Innovative solutions for supply of chemicals
and related ancillary services for Oil & Gas business.
Olefins (or Alkenes) Hydrocarbons that are particularly
active chemically, used for this reason as raw materials in the
synthesis of intermediate products and of polymers.
Over/underlifting Agreements stipulated between partners
regulate the right of each to its share in the production of a
set period of time. Amounts different from the agreed ones
determine temporary over/underlifting situations.
Plasmix The collective name for the different plastics that
currently have no use in the market of recycling and can be used
as a feedstock in the new circular economy businesses of Eni.
Production Sharing Agreement (PSA) Contract in use in
African, Middle Eastern, Far Eastern and Latin American
Countries, among others, regulating relationships between
states and oil companies with regard to the exploration and
production of hydrocarbons. The mineral right is awarded to
the national oil company jointly with the foreign oil company
that has an exclusive right to perform exploration, development
and production activities and can enter into agreements with
other local or international entities. In this type of contract, the
national oil company assigns to the international contractor
the task of performing exploration and production with the
contractor’s equipment and financial resources. Exploration
risks are borne by the contractor and production is divided into
two portions: “cost oil” is used to recover costs borne by the
contractor and “profit oil” is divided between the contractor
and the national company according to variable schemes and
represents the profit deriving from exploration and production.
Further terms and conditions of these contracts may vary from
Country to Country.
Proved reserves Proved oil and gas reserves are those
quantities of oil and gas, which, by analysis of geoscience and
engineering data, can be estimated with reasonable certainty
to be economically producible from a given date forward, from
known reservoirs, and under existing economic conditions. The
project to extract the hydrocarbons must have commenced or
the operator must be reasonably certain that it will commence
the project within a reasonable time.
Renewable Installed Capacity Is measured as the maximun
generating capacity of Eni’s share of power plants that use
renewable energy sources (wind, solar and wave, and any
other non-fossil fuel source of generation deriving from
natural resources, excluding, from the avoidance of doubt,
nuclear energy) to produce electricity. The capacity
is
considered “installed” once the power plants are in operation
or the mechanical completion phase has been reached. The
mechanical completion represents the final construction
stage excluding the grid connection.
Reserves Quantities of oil and gas and related substances
anticipated to be economically producible, as of a given date, by
application of development projects to known accumulations.
In addition, there must exist, or there must be a reasonable
expectation that will exist, the legal right to produce or a revenue
interest in the production, installed means of delivering oil
and gas or related substances to market, and all permits and
financing required to implement the project. Reserves can be:
(i) developed reserves quantities of oil and gas anticipated to
be through installed extraction equipment and infrastructure
operational at the time of the reserves estimate; (ii) undeveloped
reserves: oil and gas expected to be recovered from new wells,
facilities and operating methods.
Scope 1 GHG Emissions Direct greenhouse gas emissions
from company’s operations, produced from sources that are
owned or controlled by the company.
Scope 2 GHG Emissions Indirect greenhouse gas emissions
resulting from the generation of electricity, steam and heat
purchased from third parties.
Scope 3 GHG Emissions Indirect GHG emissions associated
with the value chain of Eni’s products.
Eni Annual Report 2021 203
Ship-or-pay Clause included in natural gas transportation
contracts according to which the customer for which
the transportation is carried out is bound to pay for the
transportation of the gas also in case the gas is not transported.
Take-or-pay Clause included in natural gas purchase contracts
according to which the purchaser is bound to pay the contractual
price or a fraction of such price for a minimum quantity of the
gas set in the contract also in case it is not collected by the
customer. The customer has the option of collecting the gas
paid and not delivered at a price equal to the residual fraction of
the price set in the contract in subsequent contract years.
UN SDGs The Sustainable Development Goals (SDGs) are the
blueprint to achieve a better and more sustainable future for
all by 2030. Adopted by all United Nations Member States in
2015, they address the global challenges the world is facing,
including those related to poverty, inequality, climate change,
environmental degradation, peace and justice.
For further detail see the website https://unsdg.un.org
Upstream/downstream The term upstream refers to all
hydrocarbon exploration and production activities.
The term mid-downstream includes all activities inherent to oil
industry subsequent to exploration and production. Process
crude oil and oil-based feedstock for the production of fuels,
lubricants and chemicals, as well as the supply, trading and
transportation of energy commodities. It also includes the
marketing business of refined and chemical products.
Upstream GHG Emission Intensity Ratio between 100% Scope
1 GHG emissions from upstream operated assets and 100%
gross operated production (expressed in barrel of oil equivalent).
Wholesale sales Domestic sales of refined products to
wholesalers/distributors (mainly gasoil), public administrations
and end consumers, such as industrial plants, power stations
(fuel oil), airlines (jet fuel), transport companies, big buildings and
households. They do not include distribution through the service
station network, marine bunkering, sales to oil and petrochemical
companies, importers and international organizations.
Work-over Intervention on a well for performing significant
maintenance and substitution of basic equipment for the
collection and transport to the surface of liquids contained
in a field.
Abbreviations
/d
/y
bbbl
bbl
bboe
bcf
bcm
per day
per year
billion barrels
barrels
billion barrels of oil equivalent
billion cubic feet
billion cubic meters
bln liters
billion liters
bln tonnes billion tonnes
boe
cm
GWh
LNG
LPG
kbbl
kboe
barrels of oil equivalent
cubic meter
Gigawatt hour
Liquefield Natural Gas
Liquefield Petroleum Gas
thousand barrels
thousand barrels of oil equivalent
km
ktoe
ktonnes
mmbbl
mmboe
mmcf
mmcm
kilometers
thousand tonnes of oil equivalent
thousand tonnes
million barrels
million barrels of oil equivalent
milion cubic feet
million cubic meters
mmtonnes
million tonnes
MTPA
Million Tonnes Per Annum
No.
NGL
PCA
ppm
PSA
Tep
TWh
number
Natural Gas Liquids
Production Concession Agreement
parts per million
Production Sharing Agreement
Ton of equivalent petroleum
Terawatt hour
Management report | Consolidated financial statements | Annex Consolidated financial
statements
2021
1 MANAGEMENT REPORT
2 CONSOLIDATED FINANCIAL STATEMENTS
Financial statements
Notes on consolidated financial statements
Supplemental oil and gas information
Management’s certification
3 ANNEX
2
204
206
214
326
345
346
206
Consolidated balance sheet
(€ million)
ASSETS
Current assets
Cash and cash equivalents
Financial assets held for trading
Other current financial assets
Trade and other receivables
Inventories
Income tax receivables
Other current assets
Non-current assets
Property, plant and equipment
Right-of-use assets
Intangible assets
Inventory - Compulsory stock
Equity-accounted investments
Other investments
Other non-current financial assets
Deferred tax assets
Income tax receivables
Other non-current assets
Assets held for sale
TOTAL ASSETS
LIABILITIES AND EQUITY
Current liabilities
Short-term debt
Current portion of long-term debt
Current portion of long-term lease liabilities
Trade and other payables
Income tax payables
Other current liabilities
Non-current liabilities
Long-term debt
Long-term lease liabilities
Provisions
Provisions for employee benefits
Deferred tax liabilities
Income tax payables
Other non-current liabilities
Liabilities directly associated with assets held for sale
TOTAL LIABILITIES
Share capital
Retained earnings
Cumulative currency translation differences
Other reserves and equity instruments
Treasury shares
Profit (loss)
Equity attributable to equity holders of Eni
Non-controlling interest
TOTAL EQUITY
TOTAL LIABILITIES AND EQUITY
December 31, 2021
December 31, 2020
Note
Total amount
of which with
related parties
Total amount
of which with
related parties
41
802
145
766
74
52
54
2,100
452
112
23
(6)
(7)
(17)
(8)
(9)
(10)
(11) (24)
(12)
(13)
(14)
(9)
(16) (37)
(16)
(17)
(23)
(10)
(11) (24)
(25)
(19)
(19)
(13)
(18)
(10)
(11) (24)
(19)
(13)
(21)
(22)
(23)
(10)
(11) (24)
(25)
(26)
8,254
6,301
4,308
18,850
6,072
195
13,634
57,614
56,299
4,821
4,799
1,053
5,887
1,294
1,885
2,713
108
1,029
79,888
263
137,765
2,299
1,781
948
21,720
648
15,756
43,152
23,714
4,389
13,593
819
4,835
374
2,246
49,970
124
93,246
4,005
22,750
6,530
6,289
(958)
5,821
44,437
82
44,519
137,765
55
1,301
492
1,645
29
233
21
17
2,298
339
5
1
415
9,413
5,502
254
10,926
3,893
184
2,686
32,858
53,943
4,643
2,936
995
6,749
957
1,008
4,109
153
1,253
76,746
44
109,648
2,882
1,909
849
12,936
243
4,872
23,691
21,895
4,169
13,438
1,201
5,524
360
1,877
48,464
72,155
4,005
34,043
3,895
4,688
(581)
(8,635)
37,415
78
37,493
109,648
Eni Annual Report 2021
(12) (13) (14)
(7,063)
Consolidated profit and loss account
(€ million)
Sales from operations
Other income and revenues
REVENUES AND OTHER INCOME
Purchases, services and other
Net (impairments) reversals of trade and other receivables
Payroll and related costs
Other operating income (expense)
Depreciation and amortization
Net (impairments) reversals of tangible and intangible
assets and right-of-use assets
Write-off of tangible and intangible assets
OPERATING PROFIT (LOSS)
Finance income
Finance expense
Net finance income (expense) from financial assets held for
trading
Derivative financial instruments
FINANCE INCOME (EXPENSE)
Share of profit (loss) from equity-accounted investments
Other gain (loss) from investments
INCOME (EXPENSE) FROM INVESTMENTS
PROFIT (LOSS) BEFORE INCOME TAXES
Income taxes
PROFIT (LOSS)
Attributable to Eni
Attributable to non-controlling interest
Note
(29)
(30)
(8)
(30)
(24)
(15)
(12) (14)
(31)
(31)
(31)
(24) (31)
(16) (32)
(33)
Earnings (loss) per share (€ per share)
(34)
Basic
Diluted
207
2021
2020
2019
Total
amount
76,575
1,196
77,771
of which
with related
parties
Total
amount
of which
with related
parties
3,000
43,987
52
960
1,164
35
44,947
of which
with related
parties
1,248
4
Total
amount
69,881
1,160
71,041
(55,549)
(8,644)
(33,551)
(6,595)
(50,874)
(9,173)
(279)
(2,888)
903
(167)
(387)
12,341
3,723
(4,216)
11
(306)
(788)
(1,091)
223
(868)
10,685
(4,845)
5,840
5,821
19
1.61
1.60
28
(28)
19
96
(36)
(6)
(21)
735
79
(46)
(226)
(2,863)
(766)
(7,304)
(3,183)
(329)
(3,275)
3,531
(4,958)
31
351
(1,045)
(1,733)
75
(1,658)
(5,978)
(2,650)
(8,628)
(8,635)
7
(2.42)
(2.42)
(6)
(36)
13
114
(26)
(432)
(2,996)
287
(8,106)
(2,188)
(300)
6,432
3,087
(4,079)
127
(14)
(879)
(88)
281
193
5,746
(5,591)
155
148
7
0.04
0.04
Management report | Consolidated financial statements | Annex
208
Consolidated statement of comprehensive income
(€ million)
Profit (loss)
Other items of comprehensive income (loss)
Items that are not reclassified to profit or loss in later periods
Remeasurements of defined benefit plans
Share of other comprehensive income (loss) on equity-accounted investments
Change of minor investments measured at fair value with effects to OCI
Tax effect
Items that may be reclassified to profit or loss in later periods
Currency translation differences
Change in the fair value of cash flow hedging derivatives
Share of other comprehensive income (loss) on equity-accounted investments
Tax effect
Total other items of comprehensive income (loss)
Total comprehensive income (loss)
Attributable to Eni
Attributable to non-controlling interest
Note
(26)
(26)
(26)
(26)
(26)
(26)
(26)
(26)
2021
5,840
2020
(8,628)
119
2
105
(77)
149
2,828
(1,264)
(34)
372
1,902
2,051
7,891
7,872
19
(16)
24
25
33
(3,314)
661
32
(192)
(2,813)
(2,780)
(11,408)
(11,415)
7
2019
155
(42)
(7)
(3)
5
(47)
604
(679)
(6)
197
116
69
224
217
7
Eni Annual Report 2021
209
g
n
i
l
l
o
r
t
n
o
c
-
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N
t
s
e
r
e
t
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i
78
19
y
t
i
u
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l
a
t
o
T
37,493
5,840
42
2
105
149
2,828
(892)
(34)
1,902
7,891
(857)
19
Consolidated statement of changes in equity
Equity attributable to equity holders of Eni
n
o
i
t
a
l
s
n
a
r
t
y
c
n
e
r
r
u
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f
f
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v
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n
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r
a
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d
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i
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t
e
R
d
n
a
s
e
v
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e
s
e
r
r
e
h
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t
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e
m
u
r
t
s
n
i
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t
i
u
q
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a
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s
y
r
u
s
a
e
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l
a
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i
p
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a
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t
o
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s
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(
t
fi
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P
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a
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y
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f
l
a
t
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T
(26)
4,005
34,043
3,895
4,688
(581)
(8,635)
37,415
5,821
5,821
(€ million)
Balance at December 31, 2020
Profit (loss) for the year
Other items of comprehensive income (loss)
Remeasurements of defined benefit plans
net of tax effect
Share of “Other comprehensive income (loss)”
on equity-accounted investments
Change of minor investments measured
at fair value with effects to OCI
Items that are not reclassified to profit or loss
in later periods
Currency translation differences
Change in the fair value of cash flow hedge
derivatives net of tax effect
Share of “Other comprehensive income (loss)”
on equity-accounted investments
Items that may be reclassified to profit or loss
in later periods
Total comprehensive income (loss) of the year
Dividend distribution of Eni SpA
Interim dividend distribution of Eni SpA
Dividend distribution of other companies
Allocation of 2020 loss
Acquisition of treasury shares
Long-term share-based incentive plan
Increase in non‐controlling interest relating
to acquisition of consolidated entities
Issue of perpetual subordinated bonds
Coupon payment on perpetual subordinated bonds
Transactions with holders of equity instruments
Costs for the issue of perpetual subordinated bonds
Other changes
Other changes in equity
(26)
(26)
(26)
(26)
(26)
(26)
(26)
(26)
(26) (30)
(26)
(26)
429
(1,533)
(9,921)
(400)
16
(61)
(11,470)
(15)
192
177
Balance at December 31, 2021
(26)
4,005
22,750
42
2
105
149
2,828
(892)
(34)
1,902
7,872
(857)
42
2
105
149
(892)
(34)
2,828
2,828
(926)
2,828
(777)
400
(23)
(400)
23
2,000
5,821
(1,286)
9,921
(1,533)
(1,533)
(5)
(5)
(400)
16
2,000
(61)
(11)
(400)
16
(11)
2,000
(61)
2,377
(377)
8,635
(835)
(16)
(851)
1
1
(15)
(15)
(15)
1
(14)
1
1
6,289
(958)
5,821
44,437
82
44,519
(193)
(193)
6,530
Management report | Consolidated financial statements | Annex
210
continued Consolidated statement of changes in equity
(€ million)
Balance at December 31, 2019
Profit (loss) for the year
Other items of comprehensive income (loss)
Remeasurements of defined benefit plans
net of tax effect
Change of minor investments measured
at fair value with effects to OCI
Items that are not reclassified to profit or loss
in later periods
Currency translation differences
Change in the fair value of cash flow hedge
derivatives net of tax effect
Share of “Other comprehensive income (loss)”
on equity-accounted investments
Items that may be reclassified to profit or loss
in later periods
Total comprehensive income (loss) of the year
Dividend distribution of Eni SpA
Interim dividend distribution of Eni SpA
Dividend distribution of other companies
Allocation of 2019 net income
Cancellation of treasury shares
Long-term share-based incentive plan
Increase in non‐controlling interest relating
to acquisition of consolidated entities
Issue of perpetual subordinated bonds
Transactions with holders of equity instruments
Costs for the issue of perpetual subordinated bonds
Other changes
Other changes in equity
e
t
o
N
(26)
(26)
(26)
(26)
(26)
(26)
(26)
(26)
(27)
(26)
Equity attributable to equity holders of Eni
n
o
i
t
a
l
s
n
a
r
t
y
c
n
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r
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y
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4,005
35,894
7,209
1,564
(981)
148
47,839
(8,635)
(8,635)
61
7
47,900
(8,628)
9
24
33
(1)
469
32
500
533
(3,313)
(3,313)
(3,313)
9
24
33
9
24
33
(3,314)
(3,314)
469
32
469
32
(2,813)
(2,813)
(8,635)
(11,415)
7 (11,408)
1,542
(429)
(2,930)
7
(1,810)
(25)
(16)
(41)
(3,078)
(1,536)
(429)
2,930
(400)
400
3,000
2,600
400
(148)
(1)
(1)
(9)
(9)
7
3,000
1,042
(25)
(26)
(51)
(1,536)
(429)
(3)
7
15
3,000
1,054
(25)
(28)
(53)
37,493
(3)
15
12
(2)
(2)
78
Balance at December 31, 2020
(26)
4,005
34,043
3,895
4,688
(581)
(8,635)
37,415
Eni Annual Report 2021
continued Consolidated statement of changes in equity
211
g
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Equity attributable to equity holders of Eni
n
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a
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s
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a
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c
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4,005
35,189
6,605
1,672
(581)
4,126
51,016
57
51,073
(4)
(4)
4,005
35,185
6,605
1,672
(581)
4,126
51,012
148
148
(4)
51,069
155
57
7
(37)
(7)
(3)
(47)
(482)
(6)
(488)
(535)
604
604
604
(37)
(7)
(3)
(47)
604
(482)
(6)
116
217
148
(2,989)
(1,476)
(1,542)
(1,137)
400
(400)
(400)
9
400
27
(400)
(4,126)
(3,409)
19
1,513
(1,542)
1,137
(400)
9
717
(8)
4,005
35,894
7,209
1,564
(981)
148
47,839
(37)
(7)
(3)
(47)
604
(482)
(6)
116
224
(1,476)
(1,542)
(4)
(1)
(400)
9
(3,414)
21
47,900
7
(4)
(1)
(5)
2
61
(€ million)
Balance at December 31, 2018
Changes in accounting policies (IAS 28)
Balance at January 1, 2019
Profit (loss) for the year
Other items of comprehensive income (loss)
Remeasurements of defined benefit plans net
of tax effect
Share of “Other comprehensive income (loss)”
on equity-accounted investments
Change of minor investments measured
at fair value with effects to OCI
Items that are not reclassified to profit or loss
in later periods
Currency translation differences
Change in the fair value of cash flow hedge
derivatives net of tax effect
Share of “Other comprehensive income (loss)”
on equity-accounted investments
Items that may be reclassified to profit or loss
in later periods
Total comprehensive income (loss) of the year
Dividend distribution of Eni SpA
Interim dividend distribution of Eni SpA
Dividend distribution of other companies
Reimbursements to minority shareholders
Allocation of 2018 net income
Acquisition of treasury shares
Long-term share-based incentive plan
Transactions with shareholders
Other changes in shareholders’ equity
Balance at December 31, 2019
Management report | Consolidated financial statements | Annex
212
Consolidated statement of cash flows
(€ million)
Profit (loss)
Adjustments to reconcile profit (loss) to net cash provided by operating activities
Depreciation and amortization
Net Impairments (reversals) of tangible and intangible assets and right-of-use assets
Write-off of tangible and intangible assets
Share of (profit) loss of equity-accounted investments
Net gain on disposal of assets
Dividend income
Interest income
Interest expense
Income taxes
Other changes
Cash flow from changes in working capital
- inventories
- trade receivables
- trade payables
- provisions
- other assets and liabilities
Net change in the provisions for employee benefits
Dividends received
Interest received
Interest paid
Income taxes paid, net of tax receivables received
Net cash provided by operating activities
- of which with related parties
Cash flow from investing activities
- tangible assets
- prepaid right-of-use assets
- intangible assets
- consolidated subsidiaries and businesses net of cash and cash equivalent acquired
- investments
- securities and financing receivables held for operating purposes
- change in payables in relation to investing activities
Cash flow from disposals
- tangible assets
- intangible assets
Note
(12) (13) (14)
(15)
(12) (14)
(16) (32)
(32)
(33)
(36)
(12)
(13)
(14)
(27)
(16)
- consolidated subsidiaries and businesses net of cash and cash equivalent disposed of
(27)
- tax on disposals
- investments
- securities and financing receivables held for operating purposes
- change in receivables in relation to disposals
Net change in securities and financing receivables held for non-operating purposes
Net cash used in investing activities
- of which with related parties
2021
5,840
7,063
167
387
1,091
(102)
(230)
(75)
794
4,845
(194)
(3,146)
(2,033)
(7,888)
7,744
(406)
(563)
54
857
28
(792)
(3,726)
12,861
(4,331)
(7,815)
(4,950)
(2)
(284)
(1,901)
(837)
(227)
386
536
207
1
76
(35)
155
141
(9)
2020
(8,628)
7,304
3,183
329
1,733
(9)
(150)
(126)
877
2,650
92
(18)
1,054
1,316
(1,614)
(1,056)
282
509
53
(928)
(2,049)
4,822
(4,640)
(5,959)
(4,407)
(237)
(109)
(283)
(166)
(757)
216
12
16
136
52
1,156
(4,587)
(1,372)
2019
155
8,106
2,188
300
88
(170)
(247)
(147)
1,027
5,591
(179)
366
(200)
1,023
(940)
272
211
(23)
1,346
88
(1,029)
(5,068)
12,392
(6,356)
(11,928)
(8,049)
(16)
(311)
(5)
(3,003)
(237)
(307)
794
264
17
187
(3)
39
195
95
(279)
(11,413)
(2,912)
(4,743)
(12,022)
(976)
(36)
Eni Annual Report 2021
continued Consolidated statement of cash flows
(€ million)
Increase in long-term financial debt
Repayments of long-term financial debt
Payments of lease liabilities
Increase (decrease) in short-term financial debt
Dividends paid to Eni's shareholders
Dividends paid to non-controlling interest
Reimbursements to non-controlling interest
Acquisition of additional interests in consolidated subsidiaries
Acquisition of treasury shares
Issue of perpetual subordinated bonds
Coupon payment on perpetual subordinated bonds
Net cash used in financing activities
- of which with related parties
Effect of exchange rate changes and other changes on cash and cash equivalents
Net increase (decrease) in cash and cash equivalents
Cash and cash equivalents - beginning of the year
Cash and cash equivalents - end of the year(a)
Note
(19)
(19)
(13)
(19)
(26)
(26)
(26)
(36)
(6)
(6)
2021
3,556
(2,890)
(939)
(910)
(2,358)
(5)
(17)
(400)
1,985
(61)
(2,039)
(13)
52
(1,148)
9,413
8,265
2020
5,278
(3,100)
(869)
937
(1,965)
(3)
2,975
3,253
164
(69)
3,419
5,994
9,413
213
2019
1,811
(3,512)
(877)
161
(3,018)
(4)
(1)
(1)
(400)
(5,841)
(817)
1
(4,861)
10,855
5,994
(a) As of December 31, 2021, cash and cash equivalents included €11 million of cash and cash equivalents of consolidated subsidiaries held for sale that were reported in the item “Assets held
for sale”.
Management report | Consolidated financial statements | Annex
214
Notes on Consolidated
Financial Statements
RISKS AND UNCERTAINTIES
RISKS IN CONNECTION WITH THE WAR IN UKRAINE
The crisis in the relationships between Russia and Ukraine that in
February 2022 gave rise to the Russian military invasion and to an
open conflict on a large scale with violent armed clashes and loss
of human lives implies various risk areas in relation to the economic
and financial situation and the income prospects of the Group.
Macroeconomic risk
Possible outcomes of this situation might include a prolonged
armed conflict, a possible escalation in the military action, risks
of enlargement of the ongoing geopolitical crisis and a further
tightening up of the economic sanctions against Russia. These
factors could resultin in a scenario that could eventually sap
consumers’ confidence, deter investment decisions by operators
and cripple industrial activities derailing the global recovery or, in
the worst of the outcomes, triggering a new worldwide recession,
while the economy has been still recovering from the fallout of
the COVID-19 downturn. This scenario would drive a reduction
in hydrocarbons demand and of commodity prices and would
adversely and significantly affect our results of operations and
cash flow.
Shortly after the outbreak of hostilities with the Russian invasion of
Ukraine, the European Union, the USA, and the UK imposed a raft
of tough economic and financial sanctions against Russia, which
have added up to those already in force since 2014 as result of the
illegal annexation of Crimea.
Risks associated with the supply of natural gas and oil from
Russia
The restrictions imposed by the international community against
Russia have mainly targeted the Russian financial sector,
precluding access to funding from European and US-based
financial institutions. As for energy products imported from Russia,
many operators, traders, oil companies, refiners and others have
decided on a voluntary basis to suspend purchases of crude oil and
products from Russia, giving rise to an auto-sanctioning system;
also the President of the United States signed an executive order to
ban all imports of Russian energy products. As long as the conflict
continues, it is possible that new increasingly tight restrictions
could be imposed. At the moment, the flow of gas supplies from
Russia has continued regularly; purchases of natural gas from
Russia represent approximately 43% of the total procured by
Eni in 2021 (approximately 30 billion cubic meters, of which 22
destined to Italy). Management, in coordination with government
institutions, is evaluating plans aimed at diversifying/strengthening
alternative sources of supply by leveraging portfolio flexibility, equity
reserves, infrastructure availability and long-term relationships with
oil states overlooking the Mediterranean area. These options could
mitigate possible impacts, at the moment unpredictable, in case of
wider sanction scenarios adopted by the international community
against the Russian energy sector or supply disruptions.
Furthermore, at present the Group has decided to cease signing
new supply contracts of Russian crude oil. This decision is expected
to lead to a worsening of our refining system, supply downturn and
higher expenses which are not possible to quantify currently.
Financial risks associated with the volatility of commodity prices
Since the outbreak of the crisis, the energy commodity markets
have entered a phase of extreme tension and volatility due to the
uncertainties of European operators about the stability of gas
supplies via pipeline from Russia and possible restrictions on oil
flows. The spot prices of crude oil for the Brent benchmark and the
main benchmarks of the spot prices for natural gas in the European
markets recorded significant increases, reaching their highest levels
since 2008 for Brent (at about 130 $/bbl) and historical records for
gas. This volatility will significantly affect the Group’s operating
expenses and revenues in 2022, driven by possible higher prices
of energy commodities which might affect both revenues and
purchase costs of oil feedstocks and natural gas.
Furthermore, the increased volatility could drive: (i) an increased
counterparty risk due to the significant increase of the nominal
value of trading receivables and the difficulties of the industrial
sector in managing the significant increase in energy and raw
material costs caused by the crisis; (ii) a higher level of financial
risk of the Company in connection to the need to increase security
deposits to secure the settlement of derivative transactions to fulfill
the margining obligations (margin call). To counter the ongoing
phase of extreme volatility in the energy commodities market
the Group is planning to strengthen its financial headroom by
increasing the liquidity reserves (cash on hand and committed
borrowing facilities).
Possible impacts on the value of balance sheet assets
Eni's companies operating in Russia are indicated in note 37 - Other
information about investments. The Group has announced the
intention to divest its interest in the joint operation Blue Stream with
a carrying amount of €40 million (Eni’s share 50%) which manages
the gas pipeline that transports natural gas produced in Russia to
Turkey through the Black Sea. Those volumes of gas are jointly
marketed by Eni and Gazprom to the Turkish state-owned company
Botas. This divestment is not expected to have a significant impact
on the Group's consolidated results and balance sheet.
The Group does not hold any other significant assets in Russia.
The full effects of the crisis on the Group economic and financial
Eni Annual Report 2021
215
performance in 2022 and beyond are currently unpredictable.
1 SIGNIFICANT ACCOUNTING POLICIES,
ESTIMATES AND JUDGMENTS
IMPACT OF COVID-19 PANDEMIC
The macroeconomic environment has gradually improved during
2021 due to the effectiveness of the vaccination campaign against
COVID-19, together with measures to contain the spread of the virus,
particularly in OECD Countries, allowing for a phased reopening
of economic activities and increasing mobility of people. The
expansionary monetary policies adopted by the central banks and
the massive fiscal stimulus launched by governments supported
consumptions and investments. In this context, the demand for
hydrocarbons and the prices of commodities, the main driver of the
Group's financial results, recorded a significant rebound.
Global energy demand first stabilized and then unexpectedly
increased in the last quarter of the year, driven by an acceleration
in the pace of the economic recovery, resulting in an increase in
the price of oil of 70% vs. 2020 at about 71 $/barrel on an annual
average, while natural gas prices recorded material increases (in the
order of several hundred percentage points) due to a particularly
tight market. These trends were the basis of the strong recovery
in profitability in the Exploration & Production and Global Gas &
LNG Portfolio segments, together with the solid performance of
the chemical business line, driven by a recovery in demand for
commodities, and of the Plenitude businesses.
The Refining & Marketing business has continued to be weighted
down by the effects of the pandemic, which affected its
performance due to weak demand for jet fuel which penalized the
profitability of traditional refining by creating an oversupply of gasoil
leading to significantly lower products spreads. The profitability
was also affected by higher costs of gas-indexed utilities and the
higher costs for the purchase of emission allowances to comply
with the environmental obligations of the European ETS, which
more than doubled due to a recovery in industrial activities and
as consumption of coal increased signficantly due to its cost-
comptetitiveness against natural gas to fire power generation and
to produce steam.
Overall, 2021 saw a significant rebound in consolidated results
which closed with a profit of €5.8 billion compared to a loss of €8.6
billion in 2020 and an operating cash flow of €12.9 billion, which
increased by approximately €8 billion compared to 2020.
Looking to the future, the main risks for the Group's financial
performance are linked to the possibility of the spread of new
vaccine-resistant variants of the virus, as well as the resumption of
inflation driven by the spill-over effects through the supply chains of
increased raw material costs as the ultimate, unintended effect of
accomodative monetary policies and big tax measures adopted to
help the economy recover from the fallout of the pandemic.
BASIS OF PREPARATION
The Consolidated Financial Statements of Eni SpA and its
subsidiaries (collectively referred to as Eni or the Group) have
been prepared on a going concern1 basis in accordance with
International Financial Reporting Standards (IFRS)2 as issued
by the International Accounting Standards Board (IASB) and
adopted by the European Union (EU) pursuant to article 6 of the
EC Regulation No. 1606/2002 of the European Parliament and
of the Council of July 19, 2002, and in accordance with article 9
of the Italian Legislative Decree No. 38/053.
The Consolidated Financial Statements have been prepared
under the historical cost convention, taking into account, where
appropriate, value adjustments, except for certain items that
under IFRSs must be measured at fair value as described in the
accounting policies that follow. The principles of consolidation
and the significant accounting policies that follow have been
consistently applied to all years presented, except where
otherwise indicated.
The 2021 Consolidated Financial Statements, approved by the
Eni’s Board of Directors on March 17, 2022, were audited by the
external auditor PricewaterhouseCoopers SpA. The external
auditor of Eni SpA, as the main external auditor, is wholly in charge
of the auditing activities of the Consolidated Financial Statements.
Consolidated companies’ financial statements, as well as
their reporting packages prepared for use by the Group in
preparing the Consolidated Financial Statements, are audited
by external auditors; when there are other external auditors,
PricewaterhouseCoopers SpA takes the responsibility of their
work. The Consolidated Financial Statements are presented in
euros and all values are rounded to the nearest million euros (€
million), except where otherwise indicated.
SIGNIFICANT ACCOUNTING ESTIMATES
AND JUDGMENTS
The preparation of the Consolidated Financial Statements
requires the use of estimates and assumptions that affect the
assets, liabilities, revenues and expenses recognised in the
financial statements, as well as amounts included in the notes
thereto, including disclosure of contingent assets and contingent
liabilities. Estimates made are based on complex judgments
and past experience of other assumptions deemed reasonable
in consideration of the information available at the time. The
accounting policies and areas that require the most significant
judgments and estimates to be used in the preparation of the
Consolidated Financial Statements are in relation to the accounting
for oil and natural gas activities, specifically in the determination of
(1) With reference to the impacts of COVID-19, see information provided in the previous paragraph.
(2) IFRSs include also International Accounting Standards (IAS), currently effective, as well as the interpretations developed by the IFRS Interpretations Committee,
previously named International Financial Reporting Interpretations Committee (IFRIC) and initially Standing Interpretations Committee (SIC).
(3) As applied to Eni, there are no differences between IFRSs as issued by the IASB and those adopted by the EU, effective for the year 2021.
Management report | Consolidated financial statements | Annex 216
reserves, impairment of financial and non-financial assets, leases,
liabilities, environmental
restoration
decommissioning and
liabilities, business combinations, employee benefits, revenue
from contracts with customers, fair value measurements and
income taxes. Although the Company uses its best estimates
and judgments, actual results could differ from the estimates and
assumptions used. The accounting estimates and judgments
relevant for the preparation of the Consolidated Financial
Statement are described below.
SIGNIFICANT ACCOUNTING ESTIMATES AND JUDGMENTS
MADE IN ASSESSING THE IMPACTS OF CLIMATE-RELATED
RISKS
Significant accounting estimates and judgments made by
management for the preparation of the 2021 Consolidated
Financial Statements are affected by the effects of actions to
address climate change and by the potential impact of the energy
transition. In particular, the global pressure towards a low carbon
economy, increasingly restrictive regulatory requirements for oil
& gas activities and hydrocarbons consumption, carbon pricing
schemes, the technological evolution of alternative energy
sources for transportation, as well as changes in consumer
preferences could imply a structural decline of the demand for
hydrocarbons in the medium-long term, an increase in operating
costs and a higher risk of stranded assets for Eni.
The Eni strategy provides for the achievement of carbon neutrality
by 2050, in line with the provisions of the scenarios compatible
with maintaining global warming within the 1.5°C threshold;
furthermore, this strategy sets intermediate targets for 2030 and
2040 in terms of reduction in absolute emissions and carbon
intensity. Scenarios adopted by management take into account
policies, regulatory requirements and current and expected
developments in technology and set out a development path
of the future energy system, on the basis of an economic and
demographic framework, analysis of existing and announced
policies and technologies, identifying those which can reasonably
reach maturity within the considered time horizon. Price variables
reflect the best estimate by management of the fundamentals
of several energy markets, which incorporates the ongoing and
reasonably expected decarbonisation trends, and are subject to
continuous benchmarking with the views of market analysts and
peers.
Such scenarios represent the basis for significant estimates
and judgments relating to: (i) the assessment of the intention
to continue exploration projects; (ii) the assessment of the
recoverability of non-current assets and credit exposures towards
National Oil Companies; (iii) the definition of useful lives and
residual values of fixed assets; (iv) impacts on provisions.
For further information on sensitivity analyses performed on
the values of assets considering the low carbon scenarios of
international bodies, see the Management Report –Consolidated
disclosure of Non-Financial Information.
PRINCIPLES OF CONSOLIDATION
liabilities,
in each subsidiary
SUBSIDIARIES
The Consolidated Financial Statements comprise the financial
statements of the parent Company Eni SpA and those of its
subsidiaries, being those entities over which the Company has
control, either directly or indirectly, through exposure or rights to
their variable returns and the ability to affect those returns through
its power over the investees. To have power over an investee, the
investor must have existing rights that give it the current ability to
direct the relevant activities of the investee, i.e. the activities that
significantly affect the investee’s returns.
Subsidiaries are consolidated, on the basis of consistent
accounting policies, from the date on which control is obtained
until the date that control ceases.
Assets,
income and expenses of consolidated
subsidiaries are fully recognised with those of the parent in the
Consolidated Financial Statements, taking into account the
appropriate eliminations of intragroup transactions (see the
accounting policy for “Intragroup transactions”); the parent’s
investment
is eliminated against the
corresponding parent’s portion of equity of each subsidiary. Non-
controlling interests are presented separately on the balance
sheet within equity; the profit or loss and comprehensive income
attributable to non-controlling interests are presented in specific
line items, respectively, in the profit and loss account and in the
statement of comprehensive income.
Taking into account the lack of any material4 impact on the
representation of the financial position and performance of
the Group5, the Consolidated Financial Statements do not
consolidate: (i) some subsidiaries that are immaterial, both
individually and in the aggregate, and; (ii) subsidiaries acting as
sole-operator in the management of oil and gas contracts on
behalf of companies participating in a joint project. In the latter
case, the activities are financed proportionally based on a budget
approved by the participating companies upon presentation of
periodical reports of proceeds and expenses. Costs and revenue
and other operating data (production, reserves, etc.) of the project,
as well as the related obligations arising from the project, are
recognised directly in the financial statements of the companies
involved based on their own share.
When the proportion of the equity held by non-controlling interests
changes, any difference between the consideration paid/received
and the amount by which the related non-controlling interests
are adjusted is attributed to Eni owners’ equity. Conversely,
(4) According to IFRSs, information is material if omitting, misstating or obscuring it could reasonably be expected to influence decisions that the primary users of general-
purpose financial statements make on the basis of those financial statements.
(5) Unconsolidated subsidiaries are accounted for as described in the accounting policy for “The equity method of accounting”; for further information, see the annex “List
of companies owned by Eni SpA as of December 31, 2021”
Eni Annual Report 2021 217
the sale of equity interests with loss of control determines the
recognition in the profit and loss account of: (i) any gain or loss
calculated as the difference between the consideration received
and the corresponding transferred net assets; (ii) any gain or loss
recognised as a result of the remeasurement of any investment
retained in the former subsidiary at its fair value; and (iii) any
amount related to the former subsidiary previously recognised
in other comprehensive income which may be reclassified
subsequently to the profit and loss account6. Any investment
retained in the former subsidiary is recognised at its fair value
at the date when control is lost and shall be accounted for in
accordance with the applicable measurement criteria.
INTERESTS IN JOINT ARRANGEMENTS
Joint control is the contractually agreed sharing of control of an
arrangement, which exists only when decisions about the relevant
activities require the unanimous consent of the parties sharing
control.
A joint venture is a joint arrangement whereby the parties that
have joint control of the arrangement have rights to the net
assets of the arrangement. Investments in joint ventures are
accounted for using the equity method as described in the
accounting policy for “The equity method of accounting”. A joint
operation is a joint arrangement whereby the parties that have
joint control of the arrangement have enforceable rights to the
assets, and enforceable obligations for the liabilities, relating
to the arrangement; in the Consolidated Financial Statements,
Eni recognises its share of the assets/liabilities and revenues/
expenses of joint operations on the basis of its rights and
obligations relating to the arrangements.
After the initial recognition, the assets/liabilities and revenues/
expenses of the joint operations are measured in accordance with
the applicable measurement criteria. Immaterial joint operations
structured through a separate vehicle are accounted for using the
equity method or, if this does not result in a misrepresentation of
the Company’s financial position and performance, at cost less
any impairment losses.
Investments in joint ventures previously classified as joint
operations are measured on the date of change
in the
classification of the joint arrangement at the net amount of
the carrying amounts of the assets and liabilities that Eni had
previously recognised, line by line, on the basis of its rights and
obligations relating to the arrangement.
INVESTMENTS IN ASSOCIATES
An associate is an entity over which Eni has significant influence,
that is the power to participate in the financial and operating
policy decisions of the investee but is not control or joint control
of those policies. Investments in associates are accounted for
using the equity method as described in the accounting policy for
“The equity method of accounting”. Investments in subsidiaries,
joint arrangements and associates are presented separately in
the annex “List of companies owned by Eni SpA as of December
31, 2021”. This annex includes also the changes in the scope of
consolidation.
THE EQUITY METHOD OF ACCOUNTING
Investments in joint ventures, associates and immaterial
unconsolidated subsidiaries, are accounted for using the
equity method7.
Under the equity method, investments are initially recognised
at cost, allocating it, similarly to business combinations
procedures, to the investee’s identifiable assets/liabilities; any
excess of the cost of the investment over the share of the net
fair value of the investee’s identifiable assets and liabilities
is accounted for as goodwill, not separately recognised but
included in the carrying amount of the investment. If this
allocation is provisionally recognised at initial recognition,
it can be retrospectively adjusted within one year from the
acquisition date, to reflect new information obtained about
facts and circumstances that existed at the acquisition date.
Subsequently, the carrying amount is adjusted to reflect: (i)
the investor’s share of the profit or loss of the investee after
the date of acquisition, adjusted to account for depreciation,
losses of the equity-
impairment
amortization and any
accounted entity’s assets based on their fair values at the date
of acquisition; and (ii) the investor’s share of the investee’s
other comprehensive income. Distributions received from
an equity-accounted investee reduce the carrying amount of
the investment. In applying the equity method, consolidation
adjustments are considered (see also the accounting policy
for “Subsidiaries”). Losses arising from the application of
the equity method in excess of the carrying amount of the
investment, recognised in the profit and loss account within
“Income (Expense) from investments”, reduce the carrying
amount, net of the related expected credit losses (see
below), of any financing receivables towards the investee for
which settlement is neither planned nor likely to occur in the
foreseeable future (the so-called long-term interests), which
are, in substance, an extension of the investment in the investee.
The investor’s share of any losses of an equity-accounted
investee that exceeds the carrying amount of the investment
and any long-term interests (the so-called net investment), is
recognised in a specific provision only to the extent that the
investor has incurred legal or constructive obligations or made
payments on behalf of the investee.
Whenever there is objective evidence of impairment (e.g.
relevant breaches of contracts, significant financial difficulty,
(6) Conversely, any amount related to the former subsidiary previously recognised in other comprehensive income, which may not be reclassified
subsequently to the profit and loss account, are reclassified in another item of equity.
(7) Joint ventures, associates and immaterial unconsolidated subsidiaries are accounted for at cost less any impairment losses, if this does not result in a misrepresentation
of the Company’s financial position and performance.
Management report | Consolidated financial statements | Annex 218
probable default of the counterparty, etc.), the carrying amount
of the net investment, resulting from the application of the
abovementioned measurement criteria, is tested for impairment
by comparing it with the related recoverable amount, determined
by adopting the criteria indicated in the accounting policy for
“Impairment of non-financial assets”. When an impairment
loss no longer exists or has decreased, any reversal of the
impairment loss is recognised in the profit and loss account
within “Income (Expense) from investments”. The impairment
reversal of the net investment shall not exceed the previously
recognised impairment losses.
The sale of equity interests with loss of joint control or
significant
investee determines the
recognition in the profit and loss account of: (i) any gain or
loss calculated as the difference between the consideration
received and the corresponding transferred share; (ii) any
gain or loss recognised as a result of the remeasurement
of any investment retained in the former joint venture/
associate at its fair value8; and (iii) any amount related to
the former joint venture/associate previously recognised
in other comprehensive income which may be reclassified
subsequently to the profit and loss account9. Any investment
retained in the former joint venture/associate is recognised
at its fair value at the date when joint control or significant
influence is lost and shall be accounted for in accordance
with the applicable measurement criteria.
influence over the
BUSINESS COMBINATION
Business combinations are accounted for by applying the
acquisition method. The consideration transferred in a business
combination is the sum of the acquisition-date fair value of the
assets transferred, the liabilities incurred and the equity interests
issued by the acquirer. The consideration transferred includes
also the fair value of any assets or liabilities resulting from
contingent considerations, contractually agreed and dependent
upon the occurrence of specified future events. Acquisition
related costs are accounted for as expenses when incurred.
The acquirer shall measure the identifiable assets acquired and
liabilities assumed at their acquisition-date fair values10, unless
another measurement basis is required by IFRSs. The excess
of the consideration transferred over the Group’s share of the
acquisition-date fair values of the identifiable assets acquired
and liabilities assumed is recognised, on the balance sheet, as
goodwill; conversely, a gain on a bargain purchase is recognised
in the profit and loss account.
Any non-controlling
the
proportionate share in the recognised amounts of the
interests are measured as
acquiree’s identifiable net assets at the acquisition date
excluding the portion of goodwill attributable to them (partial
goodwill method). In a business combination achieved in
stages, the purchase price is determined by summing the
acquisition-date fair value of previously held equity interests
in the acquiree and the consideration transferred for obtaining
control; the previously held equity interests are remeasured
at their acquisition-date fair value and the resulting gain
or loss, if any, is recognized in the profit and loss account.
Furthermore, on obtaining control, any amount recognised in
other comprehensive income related to the previously held
equity interests is reclassified to the profit and loss account,
or in another item of equity when such amount may not be
reclassified to the profit and loss account.
If the
is
incomplete by the end of the reporting period in which the
combination occurs, the provisional amounts recognised at
the acquisition date shall be retrospectively adjusted within
one year from the acquisition date, to reflect new information
obtained about facts and circumstances that existed as of the
acquisition date.
The acquisition of interests in a joint operation whose activity
constitutes a business is accounted for applying the principles
on business combinations accounting. In this regard, if the entity
obtains control over a business that was a joint operation, the
previously held interest in the joint operation is remeasured at
the acquisition-date fair value and the resulting gain or loss is
recognised in the profit and loss account11.
initial accounting for a business combination
Significant accounting estimates and judgments:
investments and business
The assessment of the existence of control, joint control,
significant influence over an investee, as well as for joint
operations, the assessment of the existence of enforceable
rights to the investee’s assets and enforceable obligations for
the investee’s liabilities imply that management makes complex
judgments on the basis of the characteristics of the investee’s
structure, arrangements between parties and other relevant
facts and circumstances. Significant accounting estimates by
management are required also for measuring the identifiable
assets acquired and the liabilities assumed in a business
combination at their acquisition-date fair values. For such
measurement, to be performed also for the application of the
equity method, Eni adopts the valuation techniques generally
used by market participants taking into account the available
information; for the most significant business combinations, Eni
engages external independent evaluators.
(8) If the retained investment continues to be classified either as a joint venture or an associate and so accounted for using the equity method, no remeasurement at fair
value is recognised in the profit and loss account.
(9) Conversely, any amount related to the former joint venture/associate previously recognised in other comprehensive income, which may not be reclassified subsequently
to the profit and loss account, are reclassified in another item of equity.
(10) Fair value measurement principles are described in the accounting policy for “Fair value measurements”.
(11) If the entity acquires additional interests in a joint operation that is a business, while retaining joint control, the previously held interest in the joint operation is not
remeasured.
Eni Annual Report 2021 219
INTRAGROUP TRANSACTIONS
All balances and transactions between consolidated companies,
and not yet realised with third parties, including unrealised profits
arising from such transactions, have been eliminated.
Unrealised profits arising from transactions between the Group
and its equity-accounted entities are eliminated to the extent of
the Group’s interest in the equity-accounted entity. In both cases,
unrealised losses are not eliminated as the transaction provides
evidence of an impairment loss of the asset transferred.
FOREIGN CURRENCY TRANSLATION
The financial statements of foreign operations having a
functional currency other than the euro, that represents the
parent’s functional currency as well as the presentation currency
of the Consolidated Financial Statements, are translated into
euros using the spot exchange rates on the balance sheet date
for assets and liabilities, historical exchange rates for equity and
average exchange rates for the profit and loss account and the
statement of cash flows.
The cumulative resulting exchange differences are presented
in the separate component of Eni owners’ equity “Cumulative
currency translation differences”12. Cumulative amount of
exchange differences relating to a foreign operation are
reclassified to the profit and loss account when the entity
disposes the entire interest in that foreign operation or when
the partial disposal involves the loss of control, joint control
or significant influence over the foreign operation. On a partial
disposal that does not involve loss of control of a subsidiary
that includes a foreign operation, the proportionate share of
the cumulative exchange differences is reattributed to the
non-controlling interests in that foreign operation. On a partial
disposal of interests in joint arrangements or in associates that
does not involve loss of joint control or significant influence, the
proportionate share of the cumulative exchange differences is
reclassified to the profit and loss account. The repayment of
share capital made by a subsidiary having a functional currency
other than the euro, without a change in the ownership interest,
implies that the proportionate share of the cumulative amount
of exchange differences relating to the subsidiary is reclassified
to the profit and loss account.
The financial statements of foreign operations which are
translated into euro are denominated in the foreign operations’
functional currencies which generally is the U.S. dollar.
The main foreign exchange rates used to translate the
financial statements into the parent’s functional currency are
indicated below:
(currency amount for 1€)
U.S. Dollar
Pound Sterling
Australian Dollar
Annual average
exchange rate
2021
Exchange rate
at December
31, 2021
Annual average
exchange
rate 2020
Exchange rate
at December
31, 2020
Annual average
exchange
rate 2019
Exchange rate
at December
31, 2019
1.18
0.86
1.57
1.13
0.84
1.56
1.14
0.89
1.66
1.23
0.90
1.59
1.12
0.88
1.61
1.12
0.85
1.60
SIGNIFICANT ACCOUNTING POLICIES
The most significant accounting policies used
in the
preparation of the Consolidated Financial Statements are
described below.
OIL AND NATURAL GAS EXPLORATION,
APPRAISAL, DEVELOPMENT AND PRODUCTION
ACTIVITIES
Oil and natural gas exploration, appraisal and development
activities are accounted for using the principles of the
successful efforts method of accounting as described
below.
ACQUISITION OF EXPLORATION RIGHTS
Costs incurred for the acquisition of exploration rights
(or their extension) are initially capitalised within the line
item “Intangible assets” as “exploration rights - unproved”
pending determination of whether the exploration and
appraisal activities in the reference areas are successful
or not. Unproved exploration rights are not amortised, but
reviewed to confirm that there is no indication that the
carrying amount exceeds the recoverable amount. This
review is based on the confirmation of the commitment of
the Company to continue the exploration activities and on
the analysis of facts and circumstances that indicate the
absence of uncertainties related to the recoverability of the
carrying amount. If no future activity is planned, the carrying
amount of the related exploration rights is recognised in the
profit and loss account as write-off. Lower value exploration
rights are pooled and amortised on a straight-line basis
over the estimated period of exploration. In the event of
a discovery of proved reserves (i.e. upon recognition of
proved reserves and internal approval for development), the
(12) When the foreign subsidiary is partially owned, the cumulative exchange difference, that is attributable to the non-controlling interests, is allocated to and recognized
as part of “Non-controlling interest”.
Management report | Consolidated financial statements | Annex 220
carrying amount of the related unproved exploration rights
is reclassified to “proved exploration rights”, within the line
item “Intangible assets”. Upon reclassification, as well as
whether there is any indication of impairment, the carrying
amount of exploration rights to reclassify as proved is
tested for impairment considering the higher of their value
in use and their fair value less costs of disposal. From the
commencement of production, proved exploration rights
are amortised according to the unit of production method
(the so-called UOP method, described in the accounting
policy for “UOP depreciation, depletion and amortisation”).
and/or natural gas are determined, the relevant expenditure
recognised as unproved is reclassified to proved exploration
and appraisal costs within tangible assets in progress.
Upon reclassification, or when there is any indication of
impairment, the carrying amount of the costs to reclassify
as proved is tested for impairment considering the higher of
their value in use and their fair value less costs of disposal.
From the commencement of production, proved exploration
and appraisal costs are depreciated according to the UOP
method (see the accounting policy for “UOP depreciation,
depletion and amortisation”).
ACQUISITION OF MINERAL INTERESTS
Costs incurred for the acquisition of mineral interests are
capitalised in connection with the assets acquired (such as
exploration potential, possible and probable reserves and
proved reserves). When the acquisition is related to a set
of exploration potential and reserves, the cost is allocated
to the different assets acquired based on their expected
discounted cash flows.
Acquired exploration potential is measured in accordance
with the criteria illustrated in the accounting policy for
“Acquisition of exploration rights”. Costs associated with
proved reserves are amortised according to the UOP
method (see the accounting policy for “UOP depreciation,
depletion and amortisation”). Expenditure associated with
possible and probable reserves (unproved mineral interests)
is not amortised until classified as proved reserves; in case
of a negative result of the subsequent appraisal activities, it
is written off.
EXPLORATION AND APPRAISAL EXPENDITURE
Geological and geophysical exploration costs are recognised
as an expense as incurred.
Costs directly associated with an exploration well are
initially recognised within tangible assets in progress, as
“exploration and appraisal costs - unproved” (exploration
wells in progress) until the drilling of the well is completed
and can continue to be capitalised in the following 12-month
period pending the evaluation of drilling results (suspended
exploration wells). If, at the end of this period, it is ascertained
that the result is negative (no hydrocarbon found) or that
the discovery is not sufficiently significant to justify the
development, the wells are declared dry/unsuccessful and
the related costs are written-off. Conversely, these costs
continue to be capitalised if and until: (i) the well has found
a sufficient quantity of reserves to justify its completion as a
producing well, and (ii) the entity is making sufficient progress
assessing the reserves and the economic and operating
viability of the project; on the contrary, the capitalised costs
are recognised in the profit and loss account as write-off.
Analogous recognition criteria are adopted for the costs
related to the appraisal activity. When proved reserves of oil
related
including
the costs
DEVELOPMENT COSTS
to
Development costs,
unsuccessful and damaged development wells, are
capitalised as “Tangible asset
in progress - proved”.
Development costs are incurred to obtain access to proved
reserves and to provide facilities for extracting, treating,
gathering and storing the oil and gas. They are amortised,
from the commencement of production, generally on a
UOP basis. When development projects are unfeasible/not
carried on, the related costs are written off when it is decided
to abandon the project. Development costs are tested for
impairment in accordance with the criteria described in the
accounting policy for “Property, plant and equipment”.
UOP DEPRECIATION, DEPLETION AND AMORTISATION
Proved oil and gas assets are depreciated generally under
the UOP method, as their useful life is closely related to the
availability of proved oil and gas reserves, by applying, to
the depreciable amounts at the end of each quarter a rate
representing the ratio between the volumes extracted during
the quarter and the reserves existing at the end of the quarter,
increased by the volumes extracted during the quarter. This
method is applied with reference to the smallest aggregate
representing a direct correlation between expenditures to
be depreciated and oil and gas reserves. Proved exploration
rights and acquired proved mineral interests are amortised
over proved reserves; proved exploration and appraisal
costs and development costs are depreciated over
proved developed reserves, while common facilities are
depreciated over total proved reserves. Proved reserves
are determined according to US SEC rules that require the
use of the yearly average oil and gas prices for assessing
the economic producibility; material changes in reference
prices could result in depreciation charges not reflecting the
pattern in which the assets’ future economic benefits are
expected to be consumed to the extent that, for example,
certain non-current assets would be fully depreciated within
a short-term. In these cases the reserves considered in
determining the UOP rate are estimated on the basis of
economic viability parameters, reasonable and consistent
with management’s expectations of production, in order
Eni Annual Report 2021 221
to recognise depreciation charges that more appropriately
reflect the expected utilization of the assets concerned.
PRODUCTION COSTS
Production costs are those costs incurred to operate and
maintain wells and field equipment and are recognised as
an expense as incurred.
PRODUCTION SHARING AGREEMENTS AND SERVICE
CONTRACTS
Oil and gas reserves related to Production Sharing
Agreements are determined on the basis of contractual
terms related to the recovery of the contractor’s costs
to undertake and finance exploration, development and
production activities at its own risk (Cost Oil) and the
Company’s stipulated share of the production remaining
after such cost recovery (Profit Oil). Revenues from the sale
of the lifted production, against both Cost Oil and Profit Oil,
are accounted for on an accrual basis, whilst exploration,
development and production costs are accounted for
according to the above-mentioned accounting policies.
The Company’s share of production volumes and reserves
includes the share of hydrocarbons that corresponds to the
taxes to be paid, according to the contractual agreement,
by the national government on behalf of the Company. As
a consequence, the Company has to recognise at the same
time an increase in the taxable profit, through the increase
of the revenue, and a tax expense.
A similar scheme applies to service contracts.
PLUGGING AND ABANDONMENT OF WELLS
Costs expected to be incurred with respect to the plugging
and abandonment of a well, dismantlement and removal
of production facilities, as well as site restoration, are
capitalised, consistent with the accounting policy described
under “Property, plant and equipment”, and then depreciated
on a UOP basis.
Significant accounting estimates and judgments: oil and
natural gas activities
Engineering estimates of the Company’s oil and gas
reserves are inherently uncertain. Proved reserves are
the estimated volumes of crude oil, natural gas and gas
condensates, liquids and associated substances which
geological and engineering data demonstrate that can be
economically producible with reasonable certainty from
known reservoirs under existing economic conditions
and operating methods. Although there are authoritative
the engineering and geological
guidelines regarding
criteria that must be met before estimated oil and gas
reserves can be categorised as “proved”, the accuracy
of reserve estimates depends on a number of factors,
assumptions and variables, including: (i) the quality of
available geological, technical and economic data and
their interpretation and judgment; (ii) projections regarding
future rates of production and operating costs and
development costs; (iii) changes in the prevailing tax rules,
other government regulations and contractual conditions;
(iv) results of drilling, testing and the actual production
performance of Company’s reservoirs after the date of
the estimates which may drive substantial upward or
downward revisions; and (v) changes in oil and natural gas
commodity prices which could affect expected future cash
flows and the quantities of Company’s proved reserves
since the estimates of reserves are based on prices
and costs existing as of the date when these estimates
are made. Lower oil prices or the projections of higher
operating and development costs may impair the ability of
the Company to economically produce reserves leading to
downward reserve revisions.
Many of the factors, assumptions and variables involved in
estimating proved reserves are subject to change over time
and therefore affect the estimates of oil and natural gas
reserves. Similar uncertainties concern unproved reserves.
The determination of whether potentially economic oil
and natural gas reserves have been discovered by an
exploration well is made within a year after well completion.
The evaluation process of a discovery, which requires
performing additional appraisal activities on the potential
oil and natural gas field and establishing the optimum
development plans, can take
in most cases,
depending on the complexity of the project and on the size
of capital expenditures required. During this period, the
costs related to these exploration wells remain suspended
on the balance sheet. In any case, all such capitalised costs
are reviewed, at least, on an annual basis to confirm the
continued intent to develop, or otherwise to extract value
from the discovery.
Field reserves will be categorised as proved only when
all the criteria for attribution of proved status have been
met. Proved reserves can be classified as developed or
undeveloped. Volumes are classified into proved developed
reserves as a consequence of development activity.
Generally, reserves are booked as proved developed at the
start of production. Major development projects typically
take one to four years from the time of initial booking to the
start of production.
in determining
Estimated proved reserves are used
depreciation, amortisation and depletion charges (see
the accounting policy for “UOP depreciation, depletion
and amortisation”). Assuming all other variables are held
in estimated proved developed
constant, an
reserves for each field decreases depreciation, amortisation
and depletion charge under the UOP method. Conversely, a
decrease in estimated proved developed reserves increases
depreciation, amortisation and depletion charge.
increase
longer,
Management report | Consolidated financial statements | Annex 222
PROPERTY, PLANT AND EQUIPMENT
including
Property, plant and equipment,
investment
properties, are recognized using the cost model and initially
stated at their purchase price or construction cost including
any costs directly attributable to bringing the asset to the
location and condition necessary for it to be capable of
operating in the manner intended by management. For
assets that necessarily take a substantial period of time
to get ready for their intended use, the purchase price or
construction cost comprises the borrowing costs incurred
in the period to get the asset ready for use that would have
been avoided if the expenditure had not been made.
In the case of a present obligation for dismantling and
removal of assets and restoration of sites, the initial carrying
amount of an item of property, plant and equipment includes
the estimated (discounted) costs to be incurred when the
removal event occurs; a corresponding amount is recognised
as part of a specific provision (see the accounting policy for
“Decommissioning and restoration liabilities”). Analogous
approach is adopted for present obligations to realise social
projects in oil and gas development areas.
Property, plant and equipment are not revalued for financial
reporting purposes.
Expenditures on upgrading, revamping and reconversion
are recognised as items of property, plant and equipment
when it is probable that they will increase the expected future
economic benefits of the asset. Assets acquired for safety or
environmental reasons, although not directly increasing the
future economic benefits of any particular existing item of
property, plant and equipment, qualify for recognition as assets
when they are necessary for running the business.
Depreciation of tangible assets begins when they are available
for use, i.e. when they are in the location and condition
necessary for it to be capable of operating as planned. Property,
plant and equipment are depreciated on a systematic basis
over their useful life. The useful life is the period over which an
asset is expected to be available for use by the Company. When
tangible assets are composed of more than one significant part
with different useful lives, each part is depreciated separately.
The depreciable amount is the asset’s carrying amount less
its residual value at the end of its useful life, if it is significant
and can be reasonably determined. Land is not depreciated,
even when acquired together with a building. Tangible assets
held for sale are not depreciated (see the accounting policy for
“Assets held for sale and discontinued operations”). Changes
in the asset’s useful life, in its residual value or in the pattern of
consumption of the future economic benefits embodied in the
asset, are accounted for prospectively.
Assets to be handed over for no consideration are
depreciated over the shorter term between the duration of
the concession or the asset’s useful life.
Replacement costs of identifiable parts in complex assets
are capitalised and depreciated over their useful
life;
the residual carrying amount of the part that has been
substituted is charged to the profit and loss account. Non-
removable leasehold improvements are depreciated over
the earlier of the useful life of the improvements and the
lease term. Expenditures for ordinary maintenance and
repairs are recognised as an expense as incurred.
The carrying amount of property, plant and equipment is
derecognised on disposal or when no future economic
benefits are expected from its use or disposal; the arising
gain or loss is recognized in the profit and loss account.
LEASING13
A contract is, or contains, a lease, if the contract conveys
the right to control the use of an identified asset for a period
of time in exchange for consideration14; such right exists
whether, throughout the period of use, the customer has
both the right to obtain substantially all of the economic
benefits from use of the identified asset and the right to
direct the use of the identified asset.
At the commencement date of the lease (i.e. the date on which
the underlying asset is available for use), a lessee recognises
on the balance sheet an asset representing its right to use the
underlying leased asset (hereinafter also referred as right-of-use
asset) and a liability representing its obligation to make lease
payments during the lease term (hereinafter also referred as
lease liability15). The lease term is the non-cancellable period of a
contract, together with, if reasonably certain, periods covered by
extension options or by the non-exercise of termination options.
In particular, the lease liability is initially recognised at the
present value of the following lease payments16 that are
not paid at the commencement date: (i) fixed payments
(including in-substance fixed payments), less any lease
incentives receivable; (ii) variable lease payments that
depend on an index or a rate17; (iii) amounts expected to
(13) As expressly provided for in IFRS 16, this accounting policy does not apply to leases to explore for and extract resources such as those for oil and gas rights, leases
of land and any rights of way related to oil and gas activities.
(14) The assessment of whether the contract is, or contains, a lease is performed at the inception date, that is the earlier of the date of a lease agreement and the date of
commitment by the parties to the principal terms and conditions of the lease.
(15) Eni applies the recognition exemptions allowed for short-term leases (for certain classes of underlying assets) and low-value leases, by recognising the lease
payments associated with those leases as an expense on a straight-line basis over the lease term.
(16) Eni, in accordance with the practical expedient allowed by the accounting standard, does not separate non-lease components from lease components except for
main contracts related to upstream activities (drilling rigs), which provide for single payments relating to both lease and non-lease components.
(17) Conversely, the other kinds of variable lease payments (e.g. payments that depend on the use of an underlying leased asset) are not included in the carrying amount
of the lease liability, but are recognised in the profit and loss account as operating expenses over the lease term.
Eni Annual Report 2021 be payable by the lessee under residual value guarantees;
(iv) the exercise price of a purchase option if the lessee is
reasonably certain to exercise that option; and (v) payments
of penalties for terminating the lease, if the lease term
reflects the lessee exercising an option to terminate the
lease. The lease payments are discounted using the interest
rate implicit in the lease or, if that rate cannot be readily
determined, the lessee’s incremental borrowing rate. The
latter is determined considering the term of the lease, the
frequency and currency of the contractual lease payments,
as well as the features of the lessee’s economic environment
(reflected in the country risk premium assigned to each
country where Eni operates).
After the initial recognition, the lease liability is measured
on an amortised cost basis and is remeasured, normally, as
an adjustment to the carrying amount of the related right-
of-use asset, to reflect changes to the lease payments due,
essentially, to: (i) modifications in the lease contract not
accounted as a separate lease; (ii) changes in indexes or
rates (used to determine the variable lease payments); or
(iii) changes in the assessment of contractual options (e.g.
options to purchase the underlying asset, extension or
termination options).
The right-of-use asset is initially measured at cost, which
comprises: (i) the amount of the initial measurement of
the lease liability; (ii) any initial direct costs incurred by the
lessee18; (iii) any lease payments made at or before the
commencement date, less any lease incentives received;
and (iv) an estimate of costs to be incurred by the lessee
in dismantling and removing the underlying asset, restoring
the site on which it is located or restoring the underlying
asset to the condition required by the terms and conditions
of the lease. After the initial recognition, the right-of-use
is adjusted for any accumulated depreciation19,
asset
any accumulated impairment losses (see the accounting
policy for “Impairment of non-financial assets”) and any
remeasurement of the lease liability.
The depreciation charges of the right-of-use asset and the
interest expenses on the lease liability directly attributable
to the construction of an asset are capitalised as part of
the cost of such asset and subsequently recognised in the
profit and loss account through depreciation/impairments
or write-off, mainly in the case of exploration assets.
In the oil and gas activities, the operator of an unincorporated
joint operation which enters into a lease contract as the sole
signatory recognises on the balance sheet: (i) the entire
lease liability if, based on the contractual provisions and
any other relevant facts and circumstances, it has primary
responsibility for the liability towards the third-party supplier;
223
and (ii) the entire right-of-use asset, unless, on the basis of
the terms and conditions of the contract, there is a sublease
with the followers.
The followers’ share of the right-of-use asset, recognised
by the operator, will be recovered according to the joint
operation’s contractual arrangements by billing the project
costs attributable to the followers and collecting the
related cash calls. Costs recovered from the followers are
recognised as “Other income and revenues” in the profit
and loss account and as net cash provided by operating
activities in the statement of cash flows.
Differently, if a lease contract is signed by all the partners,
Eni recognises its share of the right-of-use asset and lease
liability on the balance sheet based on its working interest. If
Eni does not have primary responsibility for the lease liability
and, on the basis of the terms and conditions of the contract,
there is not a sublease, it does not recognise any right-of-
use asset and lease liability related to the lease contract.
When lease contracts are entered into by companies other
than subsidiaries that act as operators on behalf of the
other participating companies (the so-called operating
companies), consistent with the provision to recover from
the followers the costs related to the oil and gas activities,
the participating companies recognise their share of the
right-of-use assets and the lease liabilities based on their
working interest, defined according to the expected use, to
the extent that it is reliably determinable, of the underlying
assets.
to:
related
judgments
Significant accounting estimates and judgments: lease
transactions
With reference to lease contracts, management makes
(i)
significant estimates and
determining the lease term, making assumptions about
the exercise of extension and/or termination options; (ii)
determining the lessee’s incremental borrowing rate; (iii)
identifying and, where appropriate, separating non-lease
components from lease components, where an observable
stand-alone price is not readily available, taking into account
also the analysis performed with external experts; (iv)
recognising lease contracts, for which the underlying assets
are used in oil and gas activities (mainly drilling rigs and
FPSOs), entered into as operator within an unincorporated
joint operation, considering if the operator has primary
responsibility for the liability towards the third-party supplier
and the relationships with the followers; (v) identifying the
variable lease payments and the related characteristics
in order to include them in the measurement of the lease
liability.
(18) Initial direct costs are incremental costs of obtaining a lease that would not have been incurred if the lease had not been obtained.
(19) Depreciation charges are recognised on a systematic basis from the commencement date to the earlier of the end of the useful life of the right-of-use asset
or the end of the lease term. Nevertheless, if the lease transfers ownership of the underlying asset to the lessee by the end of the lease term, or if the cost of the
right-of-use asset reflects that the lessee will exercise a purchase option, the right-of-use asset is depreciated from the commencement date to the end of the
useful life of the underlying asset.
Management report | Consolidated financial statements | Annex 224
INTANGIBLE ASSETS
Intangible assets are
identifiable non-monetary assets
without physical substance, controlled by the Company and
able to produce future economic benefits, and goodwill. An
asset is classified as intangible when management is able
to distinguish it clearly from goodwill. Intangible assets are
initially recognized at cost as determined by the criteria used
for tangible assets and they are never revalued for financial
reporting purposes.
Intangible assets with finite useful lives are amortised on
a systematic basis over their useful life; the amount to be
amortised and the recoverability of the carrying amount are
determined in accordance with the criteria described in the
accounting policy for “Property, plant and equipment”.
Goodwill and intangible assets with indefinite useful lives
are not amortised. For the recoverability of the carrying
amounts of goodwill and other intangible assets see the
accounting policy for “Impairment of non-financial assets”.
Costs of obtaining a contract with a customer are recognised
on the balance sheet if the Company expects to recover
those costs. The intangible asset arising from those costs is
amortised on a systematic basis, that is consistent with the
transfer to the customer of the goods or services to which
the asset relates, and is tested for impairment.
Costs of technological development activities are capitalised
when: (i) the cost attributable to the development activity
can be measured reliably; (ii) there is the intention and
the availability of financial and technical resources to
make the asset available for use or sale; and (iii) it can be
demonstrated that the asset is able to generate probable
future economic benefits.
The carrying amount of intangible assets is derecognised
on disposal or when no future economic benefits are
expected from its use or disposal; any arising gain or loss is
recognised in the profit and loss account.
IMPAIRMENT OF NON-FINANCIAL ASSETS
Non-financial assets (tangible assets, intangible assets and
right-of-use assets) are tested for impairment whenever
events or changes in circumstances indicate that the
carrying amounts for those assets may not be recoverable.
The recoverability assessment is performed for each cash
generating unit (hereinafter also CGU) represented by the
smallest identifiable group of assets that generate cash
inflows that are largely independent of the cash inflows
from other assets or group of assets.
CGUs may include corporate assets which do not generate
cash inflows independently of other assets or group of assets,
allocable on a reasonable and consistent basis. Corporate
assets not attributable to a single CGU are allocated to a
group of CGUs. Goodwill is tested for impairment at least
annually, and whenever there is any indication of impairment,
at the lowest level within the entity at which it is monitored for
internal management purposes. Right-of-use assets, which
generally do not generate cash inflows independently of other
assets or groups of assets, are allocated to the CGU to which
they belong; the right-of-use assets which cannot be fully
attributed to a CGU are considered as corporate assets. The
recoverability of the carrying amount of common facilities
within the E&P operating segment is assessed by considering
the set of recoverable amounts of the CGUs benefiting from
the common facility.
The recoverability of a CGU is assessed by comparing its
carrying amount with the recoverable amount, which is the
higher of the CGU’s fair value less costs of disposal and its value
in use. Value in use is the present value of the future cash flows
expected to be derived from continuing use of the CGU and, if
significant and reliably measurable, the cash flows expected
to be obtained from its disposal at the end of its useful life,
after deducting the costs of disposal. The expected cash flows
are determined on the basis of reasonable and supportable
assumptions that represent management’s best estimate of the
range of economic conditions that will exist over the remaining
useful life of the CGU, giving greater weight to external evidence.
The value in use of CGUs which include material right-of-use
assets is calculated, normally, by ignoring lease payments
included in the measurement of the lease liabilities. With
reference to commodity prices, management uses the price
scenario adopted for economic and financial projections
and for the evaluation of investments over their entire life.
In particular, for the cash flows associated with oil, natural
gas and petroleum products prices (and prices derived
from them), the price scenario is approved by the Board
of Directors (see “Significant accounting estimates and
judgments used to take into account the impacts of climate-
related risks”).
For impairment test purposes, cash outflows expected
to be incurred to guarantee compliance with laws and
regulations regarding CO2 emissions (e.g. Emission Trading
Scheme) or on a voluntary basis (e.g. cash outflows related
to forestry certificates acquired or produced consistent with
the Company’s decarbonization strategy - hereinafter also
forestry) are taken into account.
In particular, in estimating value in use, the cash outflows for
forestry projects20 are included, consistent with the targets of
the decarbonization strategy, within the expected operating
cash outflows; in this regard, considering that the forestry
(20) For the recognition criteria of forestry certificates see the accounting policy for “Costs”.
Eni Annual Report 2021 projects can be developed in countries where Eni does
not carry out operating activities and given the difficulty to
allocate such cash outflows, on a reasonable and consistent
basis, to CGUs of the relevant operating segment, the related
discounted cash outflows are treated as a reduction of the
headroom of the E&P operating segment.
For the determination of value in use, the estimated future cash
flows are discounted using a rate that reflects a current market
assessment of the time value of money and of the risks specific
to the asset that are not reflected in the estimated future cash
flows. In particular, the discount rate used is the Weighted
Average Cost of Capital (WACC) adjusted for the specific
country risk of the CGU. These adjustments are measured
considering information from external parties. WACC differs
considering the risk associated with each operating segment/
business where the asset operates. In particular, for the assets
belonging to the Global Gas & LNG Portfolio (GGP) operating
segment, the Chemical business, the Power business and
Retail & Renewables business, the riskiness is determined
on the basis of a sample of comparable companies. For the
E&P operating segment and R&M business, the riskiness is
determined, on a residual basis, as the difference between the
risk of Eni as a whole and the risk of other operating segments/
businesses. Value in use is calculated net of the tax effect as
this method results in values similar to those resulting from
discounting pre-tax cash flows at a pre-tax discount rate
derived, through an iteration process, from a post-tax valuation.
When the carrying amount of the CGU, including goodwill
into account any
allocated
impairment loss of the non-current assets belonging to the
CGU, exceeds its recoverable amount, the excess is recognised
as an impairment loss. The impairment loss is allocated first to
reduce the carrying amount of goodwill; any remaining excess
is allocated to the other assets of the unit pro rata on the basis
of the carrying amount of each asset in the CGU, up to the
related recoverable amount.
When an impairment loss no longer exists or has decreased,
a reversal of the impairment loss is recognised in the profit
and loss account. The impairment reversal shall not exceed
the carrying amount that would have been determined, net
of depreciation, had no impairment loss been recognised for
the asset in prior years. An impairment loss recognised for
goodwill is not reversed in a subsequent period21.
thereto, determined
taking
GRANTS RELATED TO ASSETS
225
Company will comply with the conditions attaching to them
and the grants will be received.
INVENTORIES
Inventories, including compulsory stock, are measured at the
lower of purchase or production cost and net realisable value.
Net realisable value is the estimated selling price in the ordinary
course of business less the estimated costs of completion
and the estimated costs necessary to make the sale, or, with
reference to inventories of crude oil and petroleum products
already included in binding sale contracts, the contractual
selling price. Inventories which are principally acquired with
the purpose of selling in the near future and generating a
profit from fluctuations in price are measured at fair value
less costs to sell and any subsequent changes in fair value are
recognised in the profit and loss account. Materials and other
supplies held for use in production are not written down below
cost if the finished products in which they will be incorporated
are expected to be sold at or above cost.
inventories of hydrocarbons (crude oil,
The cost of
condensates and natural gas) and petroleum products is
determined by applying the weighted average cost method
on a three-month basis, or on a different time period (e.g.
monthly), when it is justified by the use and the turnover of
inventories of crude oil and petroleum products; the cost
of inventories of the Chemical business is determined by
applying the weighted average cost on an annual basis.
When take-or-pay clauses are included in long-term gas
purchase contracts, pre-paid gas volumes that are not
withdrawn to fulfill minimum annual take obligations are
measured using the pricing formulas contractually defined.
They are recognised within “Other assets” as "Deferred
costs”, as a contra to “Trade and other payables” or, after
settlement, to “Cash and cash equivalents”. The allocated
deferred costs are charged to the profit and loss account:
(i) when natural gas is actually withdrawn - the related
cost is included in the determination of the weighted
average cost of inventories; and (ii) for the portion which
is not recoverable, when it is not possible to withdraw the
previously pre-paid gas within the contractually defined
deadlines. Furthermore, the allocated deferred costs are
tested for economic recoverability by comparing the related
carrying amount and their net realisable value, determined
adopting the same criteria described for inventories.
Government grants related to assets are recognized by
deducting them in calculating the carrying amount of the
related assets when there is reasonable assurance that the
Significant accounting estimates and
impairment of non-financial assets
The recoverability of non-financial assets is assessed
judgments:
(21) Impairment losses recognised for goodwill in an interim period are not reversed also when, considering conditions existing in a subsequent interim period, they would
have been recognised in a smaller amount or would not have been recognized.
Management report | Consolidated financial statements | Annex 226
whenever events or changes in circumstances indicate that
carrying amounts of the assets may not be recoverable.
Such impairment indicators include changes in the Group’s
business plans, changes in commodity prices leading to
unprofitable performance, a reduced capacity utilisation of
plants and, for oil and gas properties, significant downward
revisions of estimated reserve quantities or significant
increase of the estimated development and production
costs. Determination as to whether and how much an asset is
impaired involves management estimates on highly uncertain
and complex matters such as future commodity prices, future
discount rates, future development costs and production
costs, the effects of inflation and technology improvements
on operating expenses, production profiles and the outlook
for global or regional market supply-and-demand conditions
also with reference to the decarbonization process and the
effects of changes in regulatory requirements. The definition
of CGUs and the identification of their appropriate grouping
for the purpose of testing for impairment the carrying amount
of goodwill, corporate assets as well as common facilities
within the E&P operating segment, require judgment by
management. In particular, CGUs are identified considering,
inter alia, how management monitors the entity’s operations
(such as by business lines) or how management makes
decisions about continuing or disposing of the entity’s assets
and operations.
Similar remarks are valid for assessing the physical
recoverability of assets recognised on the balance sheet
- see also the accounting policy for
(deferred costs
“Inventories”) related to natural gas volumes not withdrawn
under long-term supply contracts with take-or-pay clauses.
The expected future cash flows used for impairment analyses
are based on judgmental assessments of future production
volumes, prices and costs, considering available information
at the date of review and are discounted using a rate which
considers the risks specific to the asset.
For oil and natural gas properties, the expected future cash
flows are estimated based on proved and probable reserves,
including, among other elements, production taxes and the
costs to be incurred for the reserves yet to be developed. In
limited cases (e.g. for mineral interests acquired from third
parties as part of a business combination) the expected cash
flows may take into account also the risk-adjusted possible
reserves, if they are considered to determine the consideration
transferred. The estimate of the future rates of production is
based on assumptions related to future commodity prices,
operating costs, lifting and development costs, field decline
rates, market demand and other factors.
More details on the main assumptions underlying the
determination of the recoverable amount of tangible,
intangible and right-of-use assets are set out in note 15
– Impairment review of tangible and intangible assets and
right-of-use assets.
FINANCIAL INSTRUMENTS
FINANCIAL ASSETS
Financial assets are classified, on the basis of both
contractual cash flow characteristics and the entity’s
business model for managing them,
in the following
categories: (i) financial assets measured at amortised
cost; (ii) financial assets measured at fair value through
other comprehensive income (hereinafter also OCI); (iii)
financial assets measured at fair value through profit or loss
(hereinafter also FVTPL).
At initial recognition, a financial asset is measured at its
fair value plus, in the case of a financial asset not at FVTPL,
transaction costs that are directly attributable; at initial
recognition, trade receivables that do not have a significant
financing component are measured at their transaction
price.
After initial recognition, financial assets whose contractual
terms give rise to cash flows that are solely payments of
principal and interest on the principal amount outstanding
are measured at amortised cost if they are held within a
business model whose objective is to hold financial assets
in order to collect contractual cash flows (the so-called hold
to collect business model). For financial assets measured
at amortised cost, interest income determined using the
effective interest rate, foreign exchange differences and
any impairment losses22 (see the accounting policy for
“Impairment of financial assets”) are recognised in the profit
and loss account.
Conversely, financial assets that are debt instruments
are measured at fair value through OCI (hereinafter also
FVTOCI) if they are held within a business model whose
objective is achieved by both collecting contractual cash
flows and selling financial assets (the so-called hold to
collect and sell business model). In these cases: (i) interest
income determined using the effective interest rate, foreign
exchange differences and any impairment losses (see the
accounting policy for “Impairment of financial assets”) are
recognised in the profit and loss account; (ii) changes in
fair value of the instruments are recognised in equity, within
other comprehensive income. The accumulated changes in
fair value, recognised in the equity reserve related to other
comprehensive income, is reclassified to the profit and loss
(22) Receivables and other financial assets measured at amortised cost are presented on the balance sheet net of their loss allowance.
Eni Annual Report 2021 account when the financial asset is derecognised. Currently
the Group does not have any financial assets measured at
fair value through OCI.
A financial asset represented by a debt instrument that
is neither measured at amortised cost nor at FVTOCI, is
measured at FVTPL; financial assets held for trading fall
into this category. Interest income on assets held for trading
contributes to the fair value measurement of the instrument
and is recognised in “Finance income (expense)”, within
“Net finance income (expense) from financial assets held
for trading”.
When the purchase or sale of a financial asset is under a
contract whose terms require delivery of the asset within the
time frame established generally by regulation or convention
in the marketplace concerned, the transaction is accounted
for on the settlement date.
CASH AND CASH EQUIVALENTS
Cash and cash equivalents include cash on hand, demand
deposits, as well as financial assets originally due, generally,
up to three months, readily convertible to known amount of
cash and subject to an insignificant risk of changes in value.
to
(i)
the exposure
IMPAIRMENT OF FINANCIAL ASSETS
The expected credit loss model is adopted for the impairment
of financial assets that are debt instruments, but are not
measured at FVTPL23.
In particular, the expected credit losses are generally
the
measured by multiplying:
counterparty’s credit risk net of any collateral held and
other credit enhancements (Exposure At Default, EAD); (ii)
the probability that the default of the counterparty occurs
(Probability of Default, PD); and (iii) the percentage estimate
of the exposure that will not be recovered in case of default
(Loss Given Default, LGD), considering the past experiences
and the range of recovery tools that can be activated (e.g.
extrajudicial and/or legal proceedings, etc.).
With reference to trade and other receivables, Probabilities
of Default of counterparties are determined by adopting the
internal credit ratings already used for credit worthiness and
are periodically reviewed using, inter alia, backtesting analyses;
for government entities (e.g. National Oil Companies),
the Probability of Default, represented essentially by the
probability of a delayed payment, is determined by using, as
input data, the country risk premium adopted to determine
WACC for the impairment review of non-financial assets.
227
For customers without internal credit ratings, the expected
credit losses are measured by using a provision matrix,
defined by grouping, where appropriate, receivables into
adequate clusters to which apply expected loss rates defined
on the basis of their historical credit loss experiences,
adjusted, where appropriate, to take into account forward-
looking information on credit risk of the counterparty or
clusters of counterparties24. Considering the characteristics
of the reference markets, financial assets with more than
180 days past due or, in any case, with counterparties
undergoing litigation, restructuring or renegotiation, are
considered to be in default. Counterparties are considered
undergoing litigation when judicial/legal proceedings aimed
to recover a receivable have been activated or are going
to be activated. Impairment losses of trade and other
receivables are recognised in the profit and loss account,
net of any impairment reversal, within the line item of the
profit and loss account “Net (impairment losses) reversals
of trade and other receivables”.
The financing receivables held for operating purposes,
granted to associates and
joint ventures, for which
settlement is neither planned nor likely to occur in the
foreseeable future and which in substance form part of the
entity’s net investment in these investees, are tested for
impairment, first, on the basis of the expected credit loss
model and, then, together with the carrying amount of the
investment in the associate/joint venture, in accordance
with the criteria indicated in the accounting policy for “The
equity method of accounting”. In applying the expected
credit loss model, any adjustments to the carrying amount
of long-term interest that arise from applying the accounting
policy for “The equity method of accounting” are not taken
into account.
judgments:
Significant accounting estimates and
impairment of financial assets
Measuring impairment losses of financial assets requires
management evaluation of complex and highly uncertain
elements such as, for example, Probabilities of Default of
counterparties, the assessment of any collateral or other
credit enhancements, the expected exposure that will not
be recovered in case of default, as well as the definition of
customers’ clusters to be adopted.
Further details on the main assumptions underlying the
measurement of expected credit losses of financial assets
are provided in note 8 – Trade and other receivables.
(23) The expected credit loss model is also adopted for issued financial guarantee contracts not measured at FVTPL. Expected credit losses recognised on issued
financial guarantees are not material.
(24) For credit exposures arising from intragroup transactions, the recovery rate is normally assumed equal to 100% taking into account, inter alia, the Group central
treasury function which supports both financial and capital needs of subsidiaries.
Management report | Consolidated financial statements | Annex 228
in equity
income, without subsequent
INVESTMENTS IN EQUITY INSTRUMENTS
instruments that are not held
Investments
for trading are measured at fair value through other
comprehensive
transfer
of fair value changes to profit or loss on derecognition
of these investments; conversely, dividends from these
investments are recognised in the profit and loss account,
within the line item “Income (Expense) from investments”,
unless they clearly represent a recovery of part of the cost
of the investment. In limited circumstances, an investment
in equity instruments can be measured at cost if it is an
appropriate estimate of fair value.
FINANCIAL LIABILITIES
At initial recognition, financial liabilities, other than derivative
financial instruments, are measured at their fair value,
minus transaction costs that are directly attributable, and
are subsequently measured at amortised cost.
The sustainability-linked bonds, i.e. financial liabilities where
the interest rate is periodically adjusted to reflect changes in
the borrower’s performance relative to certain sustainability
targets (the so-called ESG metrics), are measured at
amortised cost.
Generally, changes in the interest rate result in an update of
the effective interest rate to be used for the recognition of
interest expense.
Significant judgments: financial liabilities
The Group’s companies can negotiate with suppliers an
extension of payment terms, without the involvement of
a financial institution. In such cases, management judges
whether or not payables towards suppliers have to be re-
classified as financial liabilities from trade/investing activity
payables. In order to make such judgment, management
considers if the payment terms differ from the ones that are
customary in the industry, any additional security is provided
as part of the arrangement as well as any other facts and
circumstances. The classification as a financial liability
determines: (i) upon reclassification/initial recognition of
the liability, a non-monetary change in financial liabilities,
with no impacts on the statement of cash flows; (ii) upon the
settlement of the liability, the classification of the payment
within net cash used in financing activities.
With reference to sustainability-linked bonds, management
assesses whether the non-compliance with an ESG metric
could adversely impact operations and, therefore, revenue
generation and creditworthiness of the Company.
DERIVATIVE FINANCIAL INSTRUMENTS AND HEDGE
ACCOUNTING
including embedded
instruments,
Derivative
derivatives (see below) that are separated from the host
financial
contract, are assets and liabilities measured at their fair
value. With reference to the defined risk management
objectives and strategy, the qualifying criteria for hedge
accounting requires: (i) the existence of an economic
relationship between the hedged item and the hedging
instrument in order to offset the related value changes
and the effects of counterparty credit risk do not dominate
the economic relationship between the hedged
item
and the hedging instrument; and (ii) the definition of the
relationship between the quantity of the hedged item
and the quantity of the hedging instrument (the so-called
hedge ratio) consistent with the entity’s risk management
objectives, under a defined risk management strategy; the
hedge ratio is adjusted, where appropriate, after taking into
account any adequate rebalancing. A hedging relationship is
discontinued prospectively, in its entirety or a part of it, when
it no longer meets the risk management objectives on the
basis of which it qualified for hedge accounting, it ceases
to meet the other qualifying criteria or after rebalancing it.
When derivatives hedge the risk of changes in the fair value
of the hedged items (fair value hedge, e.g. hedging of the
variability in the fair value of fixed interest rate assets/
liabilities), the derivatives are measured at fair value
through profit and loss. Consistently, the carrying amount
of the hedged item is adjusted to reflect, in the profit and
loss account, the changes in fair value of the hedged item
attributable to the hedged risk; this applies even if the
hedged item should be otherwise measured.
When derivatives hedge the exposure to variability in cash
flows of the hedged items (cash flow hedge, e.g. hedging the
variability in the cash flows of assets/liabilities as a result
of the fluctuations of exchange rate), the effective changes
in the fair value of the derivatives are initially recognised in
the equity reserve related to other comprehensive income
and then reclassified to the profit and loss account in the
same period during which the hedged transaction affects
the profit and loss account.
If a hedged forecast transaction subsequently results in
the recognition of a non-financial asset or a non-financial
liability, the accumulated changes in fair value of hedging
derivatives, recognised in equity, are included directly in the
carrying amount of the hedged non-financial asset/liability
(commonly referred to as a “basis adjustment”).
The changes in the fair value of derivatives that are not
designated as hedging instruments, including any ineffective
portion of changes in fair value of hedging derivatives, are
recognised in the profit and loss account. In particular,
the changes in the fair value of non-hedging derivatives
on interest rates and exchange rates are recognised in
the profit and loss account line item “Finance income
(expense)”; conversely, the changes in the fair value of non-
hedging derivatives on commodities are recognised in the
profit and loss account line item “Other operating (expense)
Eni Annual Report 2021 to
related
income”. Derivatives embedded in financial assets are not
accounted for separately; in such circumstances, the entire
hybrid instrument is classified depending on the contractual
cash flow characteristics of the financial instrument and the
business model for managing it (see the accounting policy
for “Financial assets”). Derivatives embedded in financial
liabilities and/or non-financial assets are separated if: (i)
the economic characteristics and risks of the embedded
derivative are not closely
the economic
characteristics and risks of the host contract; (ii) a separate
instrument with the same terms as the embedded derivative
would meet the definition of a derivative; and (iii) the entire
hybrid contract is not measured at FVTPL.
Eni assesses the existence of embedded derivatives to
be separated when it becomes party to the contract and,
afterwards, when a change in the terms of the contract that
modifies its cash flows occurs.
Contracts to buy or sell commodities entered into and
continued to be held for the purpose of their receipt or
delivery in accordance with the Group’s expected purchase,
sale or usage requirements are recognised on an accrual
basis (the so-called normal sale and normal purchase
exemption or own use exemption).
OFFSETTING OF FINANCIAL ASSETS AND LIABILITIES
Financial assets and liabilities are set off on the balance
sheet if the Group currently has a legally enforceable right to
set off and intends to settle on a net basis (or to realise the
asset and settle the liability simultaneously).
DERECOGNITION OF FINANCIAL ASSETS AND
LIABILITIES
Transferred financial assets are derecognised when the
contractual rights to receive the cash flows from the financial
assets expire or are transferred to another party. Financial
liabilities are derecognised when they are extinguished, or
when the obligation specified in the contract is discharged,
cancelled or expired.
PROVISIONS, CONTINGENT LIABILITIES AND
CONTINGENT ASSETS
A provision is a liability of uncertain timing or amount on
the balance sheet date. Provisions are recognised when:
(i) there is a present obligation, legal or constructive, as a
result of a past event; (ii) it is probable that an outflow of
resources embodying economic benefits will be required to
settle the obligation; and (iii) the amount of the obligation
can be reliably estimated. The amount recognised as a
provision is the best estimate of the expenditure required to
settle the present obligation or to transfer it to third parties
on the balance sheet date. The amount recognised for
229
onerous contracts is the lower of the cost necessary to fulfill
the obligations, net of expected economic benefits deriving
from the contracts, and any compensation or penalties
arising from failure to fulfill these obligations. Where the
effect of the time value is material, and the payment date
of the obligations can be reasonably estimated, provisions
to be accrued are the present value of the expenditures
expected to be required to settle the obligation at a discount
rate that reflects the Company’s average borrowing rate
taking into account the risks associated with the obligation.
The change in provisions due to the passage of time is
recognised within “Finance income (expense)”.
A provision for restructuring costs is recognised only when
the Company has a detailed formal plan for the restructuring
and has raised a valid expectation in the affected parties
that it will carry out the restructuring.
Provisions are periodically reviewed and adjusted to reflect
changes in the estimates of costs, timing and discount
rates. Changes in provisions are recognised in the same
profit and loss account line item where the original provision
was charged.
Contingent liabilities are: (i) possible obligations arising
from past events, whose existence will be confirmed only by
the occurrence or non-occurrence of one or more uncertain
future events not wholly within the control of the Company;
or (ii) present obligations arising from past events, whose
amount cannot be reliably measured or whose settlement
will probably not result in an outflow of resources embodying
economic benefits. Contingent liabilities are not recognised
in the financial statements but are disclosed. Contingent
assets, that are possible assets arising from past events and
whose existence will be confirmed only by the occurrence
or non-occurrence of one or more uncertain future events
not wholly within the control of the Company, are not
recognised in financial statements unless the realisation of
economic benefits is virtually certain. Contingent assets are
disclosed when an inflow of economic benefits is probable.
Contingent assets are assessed periodically to ensure that
developments are appropriately reflected in the financial
statements.
DECOMMISSIONING AND RESTORATION LIABILITIES
Liabilities for decommissioning and restoration costs are
recognized, together with a corresponding amount as part
of the related property, plant and equipment, when the
conditions indicated in the accounting policy “Provisions,
Contingent Liabilities And Contingent Assets” are met.
Considering the long-time span between the recognition of
the obligation and its settlement, the amount recognised
is the present value of the future expenditures expected to
be required to settle the obligation. Any change due to the
unwinding of discount on provisions is recognised within
“Finance income (expense)”.
Management report | Consolidated financial statements | Annex 230
Such liabilities are reviewed regularly to take into account
the changes in the expected costs to be incurred, contractual
obligations, regulatory requirements and practices in force
in the countries where the tangible assets are located.
The effects of any changes in the estimate of the liability
are recognised generally as an adjustment to the carrying
amount of the related property, plant and equipment;
however, if the resulting decrease in the liability exceeds
the carrying amount of the related asset, the excess is
recognised in the profit and loss account.
Analogous approach is adopted for present obligations to
realise social projects related to operating activities carried
out by the Company.
ENVIRONMENTAL LIABILITIES
Environmental liabilities are recognised when the Group
has a present obligation,
legal or constructive, relating
to environmental clean-up and remediation of soil and
groundwater in areas owned or under concession where the
Group performed in the past industrial operations that were
progressively divested, shut down, dismantled or restructured.
Liabilities for environmental costs are recognised when a
clean-up is probable and the associated costs can be reliably
estimated. The liability is measured on the basis of on the costs
expected to be incurred in relation to the existing situation at
the balance sheet date, considering virtually certain future
developments in technology and legislation that are known.
judgments:
Significant accounting estimates and
decommissioning and restoration liabilities, environmental
liabilities and other provisions
The Group holds provisions for dismantling and removing
items of property, plant and equipment, and restoring land
or seabed at the end of the oil and gas production activity.
Estimating obligations to dismantle, remove and restore
items of property, plant and equipment is complex. It requires
management to make estimates and judgments with respect
to removal obligations that will come to term many years into
the future and contracts and regulations are often unclear as
to what constitutes removal. In addition, the ultimate financial
impact of environmental laws and regulations is not always
clearly known as asset removal technologies and costs
constantly evolve in the countries where Eni operates, as do
political, environmental, safety and public expectations.
The discount rate used to determine the provision and the
timing of future cash outflows, as well as any related update,
are based on complex managerial judgments.
Decommissioning and restoration provisions, recognised
in the financial statements, include, essentially, the present
value of the expected costs for decommissioning oil and
natural gas facilities at the end of the economic lives of
fields, well-plugging, abandonment and site restoration
of the Exploration & Production operating segment. Any
decommissioning and restoration provisions associated
with the other operating segments’ assets, given their
indeterminate settlement dates, also considering
the
strategy to reconvert plants in order to produce low carbon
products, are recognised when it is possible to make a
reliable estimate of the discounted abandonment costs. In
this regard, Eni performs periodic reviews for any changes
in facts and circumstances that might require recognition of
a decommissioning and restoration provision.
Eni is subject to numerous EU, national, regional and local
environmental laws and regulations concerning its oil and
gas operations, production and other activities. They include
legislations that implement international conventions or
protocols. Environmental liabilities are recognised when
it becomes probable that an outflow of resources will be
required to settle the obligation and such obligation can be
reliably estimated25.
The reliable determinability is verified on the basis of the
available information such as, for example, the approval
or filing of the environmental projects to the relevant
administrative authorities or the making of a commitment
to the relevant administrative authorities, where supported
by adequate estimates.
the actions already
Management, considering
taken,
insurance policies obtained to cover environmental risks
and provisions already recognised, does not expect any
material adverse effect on Eni’s consolidated results of
operations and financial position as a result of such laws
and regulations. However, there can be no assurance
that there will not be a material adverse impact on Eni’s
consolidated results of operations and financial position
due to: (i) the possibility of an unknown contamination; (ii)
the results of the ongoing surveys and other possible effects
of statements required by applicable laws; (iii) the possible
effects of future environmental legislations and rules; (iv)
the effects of possible technological changes relating to
future remediation; and (v) the possibility of litigation and
the difficulty of determining Eni’s liability, if any, against
other potentially responsible parties with respect to such
litigations and the possible reimbursements.
(25) With reference to the environmental liabilities assumed, the expected operating costs to be incurred for managing groundwater treatment plants are not included
in the estimates of environmental liabilities because it is not possible to reliably define a time horizon within which the operations of the plant will be terminated. In this
regard, Eni performs periodic reviews for any changes in facts and circumstances, including changes in regulatory framework and technology, that might require the
recognition of the environmental liability.
Eni Annual Report 2021 231
In addition to environmental and decommissioning and
restoration liabilities, Eni recognises provisions primarily
related to legal and trade proceedings. These provisions are
estimated on the basis of complex managerial judgments
related to the amounts to be recognised and the timing of
future cash outflows. After the initial recognition, provisions
are periodically reviewed and adjusted to reflect the current
best estimate.
EMPLOYEE BENEFITS
including
Employee benefits are considerations given by the Group
in exchange for service rendered by employees or for the
termination of employment.
Post-employment benefit plans,
informal
arrangements, are classified as either defined contribution
plans or defined benefit plans depending on the economic
substance of the plan as derived from its principal terms
and conditions. Under defined contribution plans, the
Company’s obligation, which consists in making payments
to the State or to a trust or a fund, is determined on the basis
of contributions due.
The liabilities related to defined benefit plans, net of any
plan assets, are determined on the basis of actuarial
assumptions and charged on an accrual basis during the
employment period required to obtain the benefits. Net
interest includes the return on plan assets and the interest
cost. Net interest is measured by applying to the liability, net
of any plan assets, the discount rate used to calculate the
present value of the liability; net interest of defined benefit
plans is recognised in “Finance income (expense)”.
liability,
Remeasurements of the net defined benefit
comprising actuarial gains and
losses, resulting from
changes in the actuarial assumptions used or from changes
arising from experience adjustments, and the return on
plan assets excluding amounts included in net interest,
are recognised within the statement of comprehensive
income. Remeasurements of the net defined benefit liability,
recognised within other comprehensive income, are not
reclassified subsequently to the profit and loss account.
Obligations for long-term benefits are determined by adopting
actuarial assumptions. The effects of remeasurements are
taken to profit and loss account in their entirety.
The liabilities for termination benefits are recognised at the
earlier of the following dates: (a) when the entity can no
longer withdraw the offer of those benefits; and (b) when
the entity recognises costs for a restructuring that involves
the payment of termination benefits. Such liabilities are
measured in accordance with the nature of the employee
benefit. Liabilities for termination benefits are determined
applying the requirements: (i) for short-term employee
benefits, if the termination benefits are expected to be
settled wholly before twelve months after the end of the
annual reporting period in which the termination benefits are
recognised; or (ii) for long-term benefits if the termination
benefits are not expected to be settled wholly before twelve
months after the end of the annual reporting period.
SHARE-BASED PAYMENTS
The line item “Payroll and related costs” includes the cost
of the share-based incentive plan, consistent with its actual
remunerative nature. The cost of the share-based incentive
plan is measured by reference to the fair value of the equity
instruments granted and the estimate of the number of
shares that eventually vest; the cost is recognised on an
accrual basis pro rata temporis over the vesting period, that
is the period between the grant date and the settlement
date. The fair value of the shares underlying the incentive
plan is measured at the grant date, taking into account the
estimate of achievement of market conditions (e.g. Total
Shareholder Return), and is not adjusted in subsequent
periods; when the achievement is linked also to non-
market conditions, the number of shares expected to vest
is adjusted during the vesting period to reflect the updated
estimate of these conditions. If, at the end of the vesting
period, the incentive plan does not vest because of failure
to satisfy the performance conditions, the portion of cost
related to market conditions is not reversed to the profit and
loss account
judgments:
Significant accounting estimates and
employee benefits and share-based payments
Defined benefit plans are evaluated with reference to
uncertain events and based upon actuarial assumptions
including, among others, discount rates, expected rates
of salary increases, mortality rates, estimated retirement
dates and medical cost trends. The significant assumptions
used to account for defined benefit plans are determined
as follows: (i) discount and inflation rates are based on the
market yields on high quality corporate bonds (or, in the
absence of a deep market of these bonds, on the market
yields on government bonds) and on the expected inflation
rates in the reference currency area; (ii) the future salary
levels of the individual employees are determined including
an estimate of future changes attributed to general
price levels (consistent with inflation rate assumptions),
productivity, seniority and promotion; (iii) healthcare cost
trend assumptions reflect an estimate of the actual future
changes in the cost of the healthcare related benefits
provided to the plan participants and are based on past
and current healthcare cost trends, including healthcare
Management report | Consolidated financial statements | Annex 232
inflation, changes in healthcare utilisation, changes in
health status of the participants and the contributions paid
to health funds; and (iv) demographic assumptions such as
mortality, disability and turnover reflect the best estimate of
these future events for individual employees involved.
Differences in the amount of the net defined benefit liability
(asset), deriving from the remeasurements, comprising,
among others, changes in the current actuarial assumptions,
differences in the previous actuarial assumptions and what
has actually occurred and differences in the return on plan
assets, excluding amounts included in net interest, usually
occur. Similar to the approach followed for the fair value
measurement of financial instruments, the fair value of the
shares underlying the incentive plans is measured by using
complex valuation techniques and
identifying, through
structured judgments, the assumptions to be adopted.
EQUITY INSTRUMENTS
TREASURY SHARES
Treasury shares, including shares held to meet the future
requirements of the share-based
incentive plans, are
recognised as deductions from equity at cost. Any gain or
loss resulting from subsequent sales is recognised in equity.
HYBRID BONDS
The perpetual subordinated hybrid bonds are classified in the
financial statements as equity instruments considering that
the issuer has the unconditional right to defer, until the date
of its own liquidation, the repayment of the principal amount
and the payment of accrued interest26. Therefore, the issuer
recognises the cash received from the bondholders, net of
costs incurred in issuing the hybrid bonds, as an increase in
Eni owners’ equity; differently, the repayments of the principal
amount and the payments of accrued interest (upon the
arising of the related contractual payment obligation) are
accounted for as a decrease in Eni owners’ equity.
REVENUE FROM CONTRACTS WITH
CUSTOMERS
Revenue from contracts with customers is recognised
on the basis of the following five steps: (i) identifying the
contract with the customer; (ii) identifying the performance
obligations, that are promises in a contract to transfer
goods and/or services to a customer; (iii) determining the
transaction price; (iv) allocating the transaction price to
each performance obligation on the basis of the relative
stand-alone selling prices of each good or service; and (v)
recognising revenue when (or as) a performance obligation
is satisfied, that is when a promised good or service is
transferred to a customer. A promised good or service is
transferred when (or as) the customer obtains control of it.
Control can be transferred over time or at a point in time.
With reference to the most important products sold by Eni,
revenue is generally recognised for:
} crude oil, upon shipment;
} natural gas and electricity, upon delivery to the customer;
} petroleum products sold to retail distribution networks,
upon delivery to the service stations, whereas all other
sales of petroleum products are recognised upon
shipment;
} chemical products and other products, upon shipment.
Revenue from crude oil and natural gas production from
properties in which Eni has an interest together with other
producers is recognised on the basis of the quantities
actually lifted and sold (sales method); costs are recognised
on the basis of the quantities actually sold.
Revenue is measured at the fair value of the consideration
to which the Company expects to be entitled in exchange
for transferring promised goods and/or services to a
customer, excluding amounts collected on behalf of third
parties. In determining the transaction price, the promised
amount of consideration is adjusted for the effects of the
time value of money if the timing of payments agreed to
by the parties to the contract provides the customer or the
entity with a significant benefit of financing the transfer of
goods or services to the customer. The promised amount of
consideration is not adjusted for the effect of the significant
financing component if, at contract inception, it is expected
that the period between the transfer of a promised good or
service to a customer and when the customer pays for that
good or service will be one year or less. If the consideration
promised in a contract includes a variable amount, the
Company estimates the amount of consideration to which
it will be entitled in exchange for transferring the promised
goods and/or services to a customer; in particular, the
amount of consideration can vary because of discounts,
refunds,
incentives, price concessions, performance
bonuses, penalties or if the price is contingent on the
occurrence or non-occurrence of future events.
If, in a contract, the Company grants a customer the option
to acquire additional goods or services for free or at a
discount (e.g. sales incentives, customer award points, etc.),
this option gives rise to a separate performance obligation
in the contract only if the option provides a material right
to the customer that it would not receive without entering
into that contract. When goods or services are exchanged
for goods or services which are of a similar nature and
value, the exchange is not regarded as a transaction which
generates revenue.
(26) The payment of accrued interest is required upon the occurrence of events under the issuer’s control such as, for example, a distribution of dividends to shareholders.
Eni Annual Report 2021 233
Significant accounting estimates and judgments: revenue
from contracts with customers
Revenue from sales of electricity and gas to retail
customers includes the amount accrued for electricity and
gas supplied between the date of the last invoiced meter
reading (actual or estimated) of volumes consumed and
the end of the year. These estimates consider information
provided by the grid managers about the volumes allocated
among the customers of the secondary distribution network,
about the actual and estimated volumes consumed by
customers, as well as internal estimates about volumes
consumed by customers. Therefore, revenue is accrued
as a result of a complex estimate based on the volumes
distributed and allocated, communicated by third parties,
likely to be adjusted, according to applicable regulations,
within the fifth year following the one in which they are
accrued, as well as on estimates about volumes consumed
by customers. Considering the contractual obligations
on the supply delivery points, revenue from sales of
electricity and gas to retail customers includes costs for
transportation and dispatching and in these cases the
gross amount of consideration to which the Company is
entitled is recognised.
COSTS
Costs are recognised when the related goods and services
are sold or consumed during the year, when they are allocated
on a systematic basis or when their future economic benefits
cannot be
identified. Costs associated with emission
quotas, incurred to meet the compliance requirements (e.g.
Emission Trading Scheme) and determined on the basis of
market prices, are recognised in relation to the amounts of
the carbon dioxide emissions that exceed free allowances.
Costs related to the purchase of the emission rights that
exceed the amount necessary to meet regulatory obligations
are recognised as intangible assets. Revenue related to
emission quotas is recognised when they are sold. Emission
rights held for trading are recognised within inventories. The
costs incurred on a voluntary basis for the acquisition or
production of forestry certificates, also taking into account
the absence of an active market, are recognised in the profit
and loss account when incurred.
The costs for the acquisition of new knowledge or
discoveries, the study of products or alternative processes,
new techniques or models, the planning and construction
of prototypes or, in any case, costs incurred for other
scientific research activities or technological development,
which cannot be capitalised (see also the accounting policy
for “Intangible assets”), are included in the profit and loss
account when they are incurred.
EXCHANGE DIFFERENCES
Revenues and costs associated with transactions in foreign
currencies are translated into the functional currency by
applying the exchange rate at the date of the transaction.
Monetary assets and liabilities denominated in foreign
currencies are translated into the functional currency at
the spot exchange rate on the balance sheet date and any
resulting exchange differences are included in the profit
and loss account within “Finance income (expense)” or, if
designated as hedging instruments for the foreign currency
risk, in the same line item in which the economic effects of
the hedged item are recognised. Non-monetary assets and
liabilities denominated in foreign currencies, measured at
cost, are not retranslated subsequent to initial recognition.
Non-monetary items measured at fair value, recoverable
amount or net realisable value are retranslated using the
exchange rate at the date when the value is determined.
DIVIDENDS
Dividends are recognised when the right to receive payment
of the dividend is established.
Dividends and interim dividends to owners are shown
as changes in equity when the dividends are declared by,
respectively, the shareholders’ meeting and the Board of
Directors.
INCOME TAXES
Current income taxes are determined on the basis of
estimated taxable profit. Current income tax assets and
liabilities are measured at the amount expected to be paid
to (recovered from) the taxation authorities, using the tax
rates and tax laws that have been enacted or substantively
enacted by the end of the reporting period.
liabilities are recognised for
Deferred tax assets and
the carrying
temporary differences arising between
amounts of the assets and liabilities and their tax bases,
based on tax rates and tax laws that are expected to apply
to the period when the asset is realised or the liability is
settled, based on tax rates and tax laws that have been
enacted or substantively enacted by the end of the reporting
period. Deferred tax assets are recognised when their
recoverability is considered probable, i.e. when it is probable
that sufficient taxable profit will be available in the same
year as the reversal of the deductible temporary difference.
Similarly, deferred tax assets for the carry-forward of
unused tax credits and unused tax losses are recognised to
the extent that their recoverability is probable. The carrying
amount of the deferred tax assets is reviewed, at least, on
an annual basis.
Management report | Consolidated financial statements | Annex 234
If there is uncertainty over income tax treatments, if the
company concludes it is probable that the taxation authority
will accept an uncertain tax treatment, it determines the
(current and/or deferred) income taxes to be recognised in
the financial statements consistent with the tax treatment
used or planned to be used in its income tax filings.
Conversely, if the company concludes it is not probable that
the taxation authority will accept an uncertain tax treatment,
the company reflects the effect of uncertainty in determining
the (current and/or deferred) income taxes to be recognised
in the financial statements.
Relating to the taxable temporary differences associated
with investments in subsidiaries and associates, and
interests in joint arrangements, the related deferred tax
liabilities are not recognised if the investor is able to control
the timing of the reversal of the temporary differences and
it is probable that the temporary differences will not reverse
in the foreseeable future. Deferred tax assets and liabilities
are presented within non-current assets and liabilities and
are offset at a single entity level if related to offsettable
taxes. The balance of the offset, if positive, is recognised
in the line item “Deferred tax assets” and, if negative, in
the line item “Deferred tax liabilities”. When the results
of transactions are recognised in other comprehensive
income or directly in equity, the related current and deferred
taxes are also recognised in other comprehensive income
or directly in equity.
taxes
involves
Significant accounting estimates and judgments: income
taxes
The computation of
the
income
interpretation of applicable tax laws and regulations in
many jurisdictions throughout the world. Although Eni aims
to maintain a relationship with the taxation authorities
characterised by transparency, dialogue and cooperation
(e.g. by not using aggressive tax planning and by using, if
available, procedures intended to eliminate or reduce tax
litigations), there can be no assurance that there will not
be a tax litigation with the taxation authorities where the
legislation could be open to more than one interpretation.
The resolution of tax disputes, through negotiations with
relevant taxation authorities or through litigation, could
take several years to complete. The estimate of liabilities
related to uncertain tax treatments requires complex
judgments by management. After the initial recognition,
these liabilities are periodically reviewed for any changes
in facts and circumstances.
Management makes complex judgments regarding mainly
the assessment of the recoverability of deferred tax assets,
related both to deductible temporary differences and unused
tax losses, which requires estimates and evaluations about
the amount and the timing of future taxable profits.
ASSETS HELD FOR SALE AND DISCONTINUED
OPERATIONS
Non-current assets and current and non-current assets
included within disposal groups are classified as held for sale
if their carrying amounts will be recovered principally through
a sale transaction rather than through continuing use. This
condition is regarded as met only when the sale is highly
probable and the asset or the disposal group is available for
immediate sale in its present condition. When there is a sale
plan involving loss of control of a subsidiary, all the assets
and liabilities of that subsidiary are classified as held for sale,
regardless of whether a non-controlling interest in its former
subsidiary will be retained after the sale.
Non-current assets held for sale, current and non-current
assets included within disposal groups that have been
classified as held for sale and the
liabilities directly
associated with them are recognised on the balance sheet
separately from other assets and liabilities.
Immediately before the initial classification of a non-
current asset and/or a disposal group as held for sale, the
non-current asset and/or the assets and liabilities in the
disposal group are measured in accordance with applicable
IFRSs. Subsequently, non-current assets held for sale are
not depreciated or amortised and they are measured at the
lower of the fair value less costs to sell and their carrying
amount. If an equity-accounted investment, or a portion of
that investment meets the criteria to be classified as held for
sale, it is no longer accounted for using the equity method
and it is measured at the lower of its carrying amount at the
date the equity method is discontinued, and its fair value less
costs to sell. Any retained portion of the equity-accounted
investment that has not been classified as held for sale is
accounted for using the equity method until disposal of the
portion that is classified as held for sale takes place.
Any difference between the carrying amount of the non-
current assets and the fair value less costs to sell is taken
to the profit and loss account as an impairment loss; any
subsequent reversal is recognised up to the cumulative
impairment losses, including those recognised prior to
qualification of the asset as held for sale. Non-current
assets classified as held for sale and disposal groups are
considered a discontinued operation if they, alternatively: (i)
represent a separate major line of business or geographical
area of operations; (ii) are part of a disposal program of
a separate major line of business or geographical area of
operations; or (iii) are a subsidiary acquired exclusively with
a view to resale. The results of discontinued operations,
as well as any gain or loss recognised on the disposal,
are indicated in a separate line item of the profit and loss
account, net of the related tax effects; the economic figures
of discontinued operations are indicated also for prior
periods presented in the financial statements.
Eni Annual Report 2021 235
If events or circumstances occur that no longer allow to
classify a non-current asset or a disposal group as held
for sale, the non-current asset or the disposal group is
reclassified into the original line items of the balance sheet
and measured at the lower of: (i) its carrying amount at
the date of classification as held for sale adjusted for any
depreciation, amortisation, impairment losses and reversals
that would have been recognised had the asset or disposal
group not been classified as held for sale, and (ii) its
recoverable amount at the date of the subsequent decision
not to sell.
FAIR VALUE MEASUREMENTS
Fair value is the price that would be received to sell an
asset or paid to transfer a liability in an orderly transaction
between market participants (not in a forced liquidation
or a distress sale) at the measurement date (exit price).
Fair value measurement is based on the market conditions
existing at the measurement date and on the assumptions
of market participants (market-based measurement). A
fair value measurement assumes that the transaction to
sell the asset or transfer the liability takes place in the
principal market for the asset or liability, or in the absence
of a principal market, in the most advantageous market
to which the entity has access, independently from the
entity’s intention to sell the asset or transfer the liability to
be measured.
A fair value measurement of a non-financial asset takes into
account a market participant’s ability to generate economic
benefits by using the asset in its highest and best use or
by selling it to another market participant that would use
the asset in its highest and best use. Highest and best use
is determined from the perspective of market participants,
even if the entity intends a different use; an entity’s current
use of a non-financial asset is presumed to be its highest
and best use, unless market or other factors suggest that
a different use by market participants would maximise the
value of the asset.
The fair value of a liability, both financial and non-financial,
or of the Company’s own equity instrument, in the absence
of a quoted price, is measured from the perspective of
a market participant that holds the identical item as an
asset at the measurement date. The fair value of financial
instruments takes into account the counterparty’s credit risk
for a financial asset (Credit Valuation Adjustment, CVA) and
the Company’s own credit risk for a financial liability (Debit
Valuation Adjustment, DVA). In the absence of available
market quotation, fair value is measured by using valuation
techniques that are appropriate in the circumstances,
maximising the use of relevant observable inputs and
minimising the use of unobservable inputs.
Significant accounting estimates and judgments: fair
value
Fair value measurement, although based on the best
available
information and on the use of appropriate
valuation techniques, is inherently uncertain, requires the
use of professional judgment and could result in expected
values other than the actual ones.
2 PRIMARY FINANCIAL STATEMENTS
Assets and liabilities on the balance sheet are classified as
current and non-current. Items in the profit and loss account
are presented by nature.
The statement of comprehensive income (loss) shows net
profit integrated with income and expenses that are not
recognised directly in the profit and loss account according
to IFRSs.
The statement of changes in equity includes the total
comprehensive income (loss) for the year, transactions with
owners in their capacity as owners and other changes in
equity. The statement of cash flows is presented using the
indirect method, whereby net profit (loss) is adjusted for the
effects of non-cash transactions.
3 CHANGES IN ACCOUNTING POLICIES
Starting from 2021, the amendments to IFRS 9, IAS 39, IFRS
7, IFRS 4 and IFRS 16 “Interest Rate Benchmark Reform -
Phase 2” (hereinafter the amendments) are effective. The
amendments provide practical expedients and temporary
exceptions from the application of some IFRS requirements
related to financial instruments measured at amortised cost
and/or hedging relationships modified as a consequence
of the interest rate benchmark reform. This reform, still
ongoing, provides for the replacement of some benchmark
interest rates, e.g. LIBOR (London Interbank Offered Rate),
with alternative risk-free rates.
With reference to the Eni Group, an internal working group
has been set up to monitor the regulatory and market
developments, as well as to support the assessment of
the impacts arising from the reform, the measurement
of the exposures to benchmark rates to be replaced, the
identification of the changes to be implemented (e.g.
renegotiation of loans with counterparties, implementation
of fallback clauses, updating of information systems, etc.)
and the transition to alternative risk-free rates.
As December 31, 2021, the Group holds, principally, financial
instruments indexed to USD LIBOR benchmark rates, affected
by the reform, which will be replaced by June 30, 2023 with
SOFR (Secured Overnight Financing Rate). Such financial
instruments are essentially represented by bonds relating
to the Euro Medium Term Notes program for an amount
Management report | Consolidated financial statements | Annex 236
of 1,750 million of US dollars. The Group has adhered, in
December 2021, to the IBOR fallbacks protocol published by
the International Swaps and Derivatives Association (ISDA).
The other amendments to IFRSs effective from January 1,
2021 and adopted by Eni did not have a material impact on
the Consolidated Financial Statements.
} the amendments to IAS 8 (hereinafter the amendments),
which introduce the definition of accounting estimates
essentially to clarify how to distinguish changes
in accounting policies from changes in accounting
estimates. The amendments shall be applied for
annual reporting periods beginning on or after January
1st, 2023.
4 IFRSs NOT YET EFFECTIVE
IFRSs ISSUED BY THE IASB AND ADOPTED BY THE EU
By the Commission Regulation No. 2021/1080 issued on
June 28, 2021, the European Commission adopted:
} the amendments to IAS 37, aimed to provide clarifications
for the purpose of assessing whether a contract is
onerous;
} the amendments to IAS 16, aimed to state that the
proceeds from selling items produced while the company
is preparing the asset for its intended use shall be
recognised in the profit and loss account, together with
the related production costs;
} the amendments to IFRS 3, aimed to: (i) replace all
remaining references to the previous versions of the
IFRS Framework with references to the new Conceptual
Framework for Financial Reporting included in IFRS 3; (ii)
provide clarifications on the requirements for recognising,
at the acquisition date, provisions, contingent liabilities
and levies assumed in a business combination; (iii) state
explicitly that a contingent asset acquired in a business
combination cannot be recognised;
} the document “Annual Improvements to IFRS Standards
2018-2020 Cycle”, which includes, basically, technical
and editorial changes to existing standards.
Such amendments shall be applied for annual reporting
periods beginning on or after January 1, 2022.
By the Commission Regulation No. 2021/2036 issued by
the European Commission on November 19, 2021, IFRS
17 “Insurance Contracts” (hereinafter IFRS 17), as well as
the related amendments issued in 2020 providing, among
others, the deferral of the effective date of IFRS 17 by two
years, were adopted. In particular, IFRS 17, which replaces
IFRS 4 “Insurance Contracts”, sets out the accounting for the
insurance contracts issued and the reinsurance contracts
held. IFRS 17, shall be applied for annual reporting periods
beginning on or after January 1, 2023.
By the Commission Regulation No. 2022/357 issued on
March 2nd, 2022, the European Commission adopted:
} the amendments to IAS 1 and IFRS Practice Statement
2 (hereinafter the amendments), aimed to provide
clarifications on
identifying the material accounting
policies to be disclosed in the financial statements.
The amendments shall be applied for annual reporting
periods beginning on or after January 1st, 2023;
IFRSs ISSUED BY THE IASB AND NOT YET ADOPTED
BY THE EU
On January 23, 2020, the IASB issued the amendments to
IAS 1 “Classification of Liabilities as Current or Non-current”
(hereinafter the amendments), which clarify how to classify
debt and other liabilities as current or non-current. Because of
further amendments issued on July 15, 2020 (“Classification
of Liabilities as Current or Non-current - Deferral of Effective
Date”), the amendments shall be applied for annual reporting
periods beginning on or after January 1st, 2023.
On May 7, 2021, the IASB issued the amendments to IAS 12
“Deferred Tax related to Assets and Liabilities arising from
a Single Transaction” (hereinafter the amendments), aimed
to require companies to recognise deferred tax on particular
transactions that, on initial recognition, give rise to equal
amounts of taxable and deductible temporary differences.
The amendments shall be applied for annual reporting
periods beginning on or after January 1st, 2023.
Eni is currently reviewing the IFRSs not yet adopted in order
to determine the likely impact on the Consolidated Financial
Statements.
to
investment held
the classification of
Change in the classification of the joint arrangement
Mozambique Rovuma Venture SpA
As part of the continuous monitoring of facts and
circumstances relevant
joint
arrangements, starting from December 31, 2021 the
in Mozambique
classification of the
Rovuma Venture SpA was changed from joint operation to
joint venture. The company has entered a new phase marked
by an evolution of the business in terms of greater number
and complexity of projects managed with the strengthening
of the management and financial autonomy.
The elements considered by management to support this
change in the classification of the investment include,
among other things: (i) the substantial completion of the
Coral South project and the substantially certain sale of
LNG to a third party unrelated to the shareholders; and (ii)
the extension in the scope of the company with forecasts
of new investments in other projects with different degrees
of maturity and a high mining potential, in particular the
gradual progression in the relevant project Mamba resulting
from the commercial declaration of further reserves
in Area 4, whose reserves are planned to be developed
Eni Annual Report 2021 independently by the venture of Area 4 and coordinatedly
with the operator of the adjacent Area 1 subsequent to the
unification of the two development areas. For this reason,
the interest of the shareholders must be considered in all
respects in relation to the net assets of the company (as
a result of the several projects managed) and no longer
in relation to the rights on the assets and the obligations
for liabilities. Therefore, as of December 31, 2021, the
investment in Mozambique Rovuma Venture SpA was
recognized at an amount equal to the carrying amount of
the net assets (€355 million), previously recognized, line by
line, on the basis of the shares attributable to Eni.
237
(€ million)
Cash and cash equivalents
Other current assets
Current assets
Property, plant and equipment
Other non-current assets
Non-current assets
TOTAL ASSETS
Current financial liabilities
Other current liabilities
Current liabilities
Non-current financial liabilities
Provisions
Other non-current liabilities
Non-current liabilities
TOTAL LIABILITIES
TOTAL NET ASSETS
Effect of the change in the classification
of Mozambique Rovuma Venture SpA
29
43
72
1,318
42
1,360
1,432
2
56
58
1,008
7
4
1,019
1,077
355
Management report | Consolidated financial statements | Annex 238
5 BUSINESS COMBINATIONS AND OTHER SIGNIFICANT TRANSACTIONS
BUSINESS COMBINATIONS
In 2021 Eni completed several business combinations for a total
consideration of €2,222 million and the assumption of net financial
liabilities for €614 million of which cash and cash equivalents
totaled €163 million.
On March 10, 2021 an agreement was finalized with the Arab
Republic of Egypt (ARE) and the Spanish partner Naturgy for the
resolution of all pending issues relating to the supply of feed-gas
to the Damietta plant owned by the former join venture Unión
Fenosa Gas SA and the settlement of the liquefaction fees by the
Egyptian state companies. As a result of these agreements and
the restructuring of Unión Fenosa Gas, Eni acquired a 50% stake in
the Damietta plant and the related liquefaction capacity (5.4 million
TPA of 100% LNG), as well as 100% of the marketing activities of
gas in Spain managed by Unión Fenosa Gas Comercializadora
SA (now Eni España Comercializadora De Gas SAU), a subsidiary
of Unión Fenosa Gas SA before the transaction. The transaction
resulted in a total cash adjustment in favor of Eni of €32 million
related to the disposals and the assumption of net financial
liabilities of €128 million of which cash and cash equivalents
totaled €42 million. The price allocation of net assets acquired of
€200 million was made on a definitive basis with recognition of
goodwill for €2 million.
On April 7, 2021 Eni finalized the acquisition of 100% of Aldro
Energía Y Soluciones SLU, a company operating in the retail
market for the sale of electricity, gas and energy services with a
portfolio of approximately 250,000 retail customers of power,
natural gas and services, primarily in Spain and Portugal, as part of
the growth and integration strategy between retail and renewable
energy production with the Plenitude business line. The total cash
consideration of the transaction amounted to €221 million with the
assumption of net financial liabilities for €36 million of which cash
and cash equivalents totaled €7 million. The price allocation of net
assets acquired was made on a definitive basis with recognition of
goodwill for €168 million.
On June 3, 2021 Eni finalized the acquisition of 100% of FRI-EL
Biogas Holding (now EniBioCh4in SpA), a leader in the Italian
bioenergy production sector. FRI-EL Biogas Holding owns 21 plants
each with a nominal power of 2 megawatts. The assets acquired
include a plant for processing OFMSW - the organic fraction of
municipal solid waste. The deal is part of Eni’s decarbonization
strategy and involves the conversion of the acquired capacity
into biomethane production units with the Refining & Marketing
business line. The transaction resulted in a total cash consideration
of €132 million with acquisition of net financial liabilities for €14
million of which cash and cash equivalents for €13 million. The
price allocation of net assets acquired was made on a provisional
basis with recognition of goodwill for €80 million.
On July 29, 2021 Eni finalized the acquisition of a portfolio of 13
onshore wind farms in Italy, for a total capacity of 315 MW already
in operation, from Glennmont Partners and PGGM Infrastructure
Fund. The operation resulted in a total cash consideration of €485
million with the assumption of net financial liabilities for €215
million of which cash and cash equivalents totaled €41 million. The
price allocation of net assets acquired was made on a provisional
basis with recognition of goodwill for €302 million. The acquisition
is part of the Plenitude business line.
On October 4, 2021 Eni finalized the acquisition of Dhamma
Energy Group. The group holds a platform for the development
of solar plants in France and Spain. Dhamma’s asset portfolio
comprises a pipeline of projects in France and Spain at various
stages of development for almost 3 GW and includes plants
already in operation or in advanced development for around 120
MW. The transaction resulted in a total cash consideration of €140
million with assumption of net financial liabilities totaled €101
million of which cash and cash equivalents for €10 million. The
price allocation of net assets acquired was made on a provisional
basis with recognition of goodwill for €120 million. The acquisition
is part of the Plenitude business line.
On October 22, 2021 Eni finalized the acquisition from Azora
Capital of a portfolio of nine renewable energy projects in Spain.
The transaction involved three wind farms in service and a wind
farm under construction, for a total of 234 MW, and five solar
projects in advanced development for around 0.9 GW. The
transaction resulted in a total cash consideration of €118 million
with the assumption of net financial liabilities for €32 million of
which cash and cash equivalents totaled €5 million. The price
allocation of net assets acquired was made on a provisional basis
with recognition of goodwill for €81 million. The acquisition is part
of the Plenitude business line.
On October 28, 2021, Eni finalized the acquisition of the control of
Finproject by exercising the call option to buy the remaining 60% of
the shares in order to raise its stake to 100%. The acquisition aims
to complement the Eni’s portfolio of chemical specialties managed
by Versalis to create an all-Italian leading platform, leveraging the
synergy between Versalis’ technological and industrial leadership
in the chemical industry and Finproject’s positioning in the
market of high added value applications, with a business that is
resilient to the volatility of the chemical industry scenario. The
acquisition resulted in a cash consideration of €149 million with
the assumption of net financial liabilities for €85 million, of which
cash and cash equivalents totaled €21 million. The allocation of
the acquisition price (€149 million) and of the fair value of the stake
already owned (€99 million) of the net assets acquired was made
on a definitive basis with recognition of goodwill for €93 million.
On November 2, 2021 Eni finalized the acquisition from Zouk
Capital and Aretex of Be Power, a company operating in the
segment of charging infrastructures for electric mobility with
approximately 6,000 charging points for electric vehicles,
becoming the second operator in Italy as a consequence of
the co-branding agreement already in place for the charging
Eni Annual Report 2021 stations Be Charge. The deal is part of Eni’s decarbonization
strategy within the Plenitude business line. The consideration
for the transaction of €764 million was paid for the 50% at the
closing while the remaining part will be paid in 2022; furthermore,
Eni assumed net financial assets of €9 million of which cash
and cash equivalents totaled €24 million. The price allocation
of net assets acquired was made on a provisional basis with
recognition of goodwill for €728 million.
Balance sheet values at the acquisition date of the business
combinations realized in 2021 are shown in the following table:
239
(€ million)
Cash and cash equivalents
Current financial assets
Other current assets
Current assets
Property, plant and equipment
Goodwill
Other non-current assets
Non-current assets
TOTAL ASSETS
Current financial liabilities
Other current liabilities
Current liabilities
Non-current financial liabilities
Provisions
Deferred tax liabilities
Other non-current liabilities
Non-current liabilities
TOTAL LIABILITIES
Equity attributable to Eni
Non-controlling interest
TOTAL EQUITY
TOTAL LIABILITIES AND EQUITY
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h
D
p
u
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r
G
10
29
2
41
119
120
15
254
295
4
4
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g
r
e
n
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e
l
b
a
w
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n
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r
e
n
i
n
f
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l
o
f
t
r
o
P
s
t
c
e
o
r
p
j
5
6
7
18
57
81
25
163
181
4
2
6
140
39
8
148
152
140
3
143
295
8
10
57
63
118
118
181
i
d
n
w
e
r
o
h
s
n
o
s
e
i
t
i
l
i
c
a
f
41
150
32
223
423
302
43
768
991
79
22
101
327
4
62
12
405
506
485
485
991
A
p
S
t
c
e
o
r
p
n
j
i
F
21
92
113
35
93
205
333
446
102
54
156
4
1
35
2
42
198
248
248
446
s
n
o
i
t
i
s
i
u
q
c
a
r
e
h
t
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s
e
s
s
e
n
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s
u
B
d
n
a
6
6
l
a
t
o
T
163
208
632
1,003
30
1,066
1,574
436
3,076
4,079
267
380
647
718
8
135
246
1,107
1,754
2,321
4
2,325
4,079
13
43
49
12
24
36
36
13
13
49
r
e
w
o
P
e
B
24
23
22
69
29
728
10
767
836
30
30
38
2
2
42
72
764
764
836
The qualitative factors that make up the goodwill recognized
within the Plenitude business line are disclosed in Note 14 -
Intangible assets.
For transactions where the purchase allocations are provisional
as of December 31, 2021, not all relevant information has been
obtained by the Company in order to finalize related estimates
of the fair values of assets acquired.
OTHER SIGNIFICANT TRANSACTIONS
On February 26, 2021 Eni finalized the acquisition from Equinor
and SSE Renewables of a 20% stake in the UK Dogger Bank (A
and B), the world’s largest offshore wind project of its kind for
a total capacity of 2.4 GW at full capacity. The construction will
be completed by 2023 and 2024. With this acquisition Eni adds
480 MW of renewable energy to its target of decarbonisation.
The transaction resulted in a total cash consideration and
recognition of an equity investment of €480 million.
6 CASH AND CASH EQUIVALENTS
Cash and cash equivalents of €8,254 million (€9,413 million
at December 31, 2020) included financial assets with maturity
of up to three months at the date of inception amounting to
€5,496 million (€6,913 million at December 31, 2020) and mainly
included deposits with financial institutions, having notice of
more than 48 hours.
Expected credit losses on deposits with banks and financial
institutions measured at amortized cost are immaterial.
Cash and cash equivalents consist essentially of deposits
in euros (€5,589 million) and in U.S. dollars (€2,415 million)
representing the use of cash on hand in the market for the
financial needs of the Group.
Restricted cash amounted to approximately €115 million (€198
million at December 31, 2020) in relation to foreclosure measures
by third parties and obligations relating to the payment of debts.
The average maturity of financial assets originally due within 3
months was 15 days with a negative effective interest rate of
0.6% for bank deposits in euros (€4,160 million) and 7 days with
an effective interest rate of 0.1% for bank deposits in U.S. dollars
(€1,336 million).
Management report | Consolidated financial statements | Annex
240
7 FINANCIAL ASSETS HELD FOR TRADING
(€ million)
Bonds issued by sovereign states
Other
December 31, 2021
December 31, 2020
1,149
5,152
6,301
1,223
4,279
5,502
The Company has established a liquidity reserve as part of its
internal targets and financial strategy with a view of ensuring an
adequate level of flexibility to the Group development plans and
of coping with unexpected fund requirements or difficulties in
accessing financial markets. The management of this liquidity
reserve is performed through trading activities in view of the
optimizing returns, within a predefined and authorized level of
risk threshold, targeting the preservation of the invested capital
and the ability to promptly convert it into cash.
Financial assets held for trading include securities subject
to lending agreements of €1,398 million (€1,361 million at
December 31, 2020). The breakdown by currency is provided below:
(€ million)
Euro
U.S. dollars
Other currencies
The breakdown by issuing entity and credit rating is presented below:
Quoted bonds issued by sovereign states
Fixed rate bonds
Italy
Chile
United States of America
Other(*)
Floating rate bonds
Italy
Switzerland
Other
Total quoted bonds issued by sovereign states
Other Bonds
Fixed rate bonds
Quoted bonds issued by industrial companies
Quoted bonds issued by financial and insurance companies
Other bonds
Floating rate bonds
Quoted bonds issued by industrial companies
Quoted bonds issued by financial and insurance companies
Other bonds
Total other bonds
Total other financial assets held for trading
(*) Amounts included herein are lower than €50 million.
December 31, 2021
December 31, 2020
3,913
2,336
52
6,301
3,731
1,688
83
5,502
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from AAA to A-
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from Aaa to Baa2
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392
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432
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1,833
from Aa1 to Baa3
from AA+ to BBB-
from Aaa to Baa3
from AAA to BBB-
from Aaa to Baa3
from AAA to BBB-
955
293
3,081
540
from Aa1 to Baa3
from AA+ to BBB-
1,215
from Aa1 to Baa3
from AA+ to BBB-
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2,071
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1,133
1,792
942
290
3,024
537
1,205
315
2,057
5,081
6,214
Eni Annual Report 2021
The fair value hierarchy is level 1 for €5,749 million and level 2 for €552 million. During 2021, there were no significant transfers
between the different hierarchy levels of fair value.
241
8 TRADE AND OTHER RECEIVABLES
(€ million)
Trade receivables
Receivables from divestments
Receivables from joint ventures in exploration and production activities
Other receivables
December 31, 2021
December 31, 2020
15,524
8
1,888
1,430
18,850
7,087
21
2,293
1,525
10,926
Generally, trade receivables do not bear interest and provide
payment terms within 180 days.
The increase in trade receivables of €8,437 million referred to the
segments Global Gas & LNG Portfolio for €5,636 million, Refining
& Marketing and Chemical for €1,405 million and Plenitude &
Power for €1,039 million and reflected the noticeable increase
in the prices of energy commodities, in particular gas, which
increased the nominal value of the receivables.
At December 31, 2021, Eni sold without recourse receivables
due in 2022 with a nominal value of €2,059 million (€1,377
million at December 31, 2020 due in 2021). Derecognized
receivables in 2021 related to the segments Global Gas & LNG
Portfolio for €893 million, Refining & Marketing and Chemical
segment for €770 million and Plenitude & Power segment for
€396 million.
Receivables from joint ventures in exploration and production
activities included amounts due by partners in unincorporated
joint operations in Nigeria of €681 million (€1,015 million at
December 31, 2020). Those receivables were in respect to the
share of development costs attributable to the joint operators in
oil projects operated by Eni, where the Company bears upfront
all the costs of the initiative and charges these costs back to
the partners through the cash call mechanism. At the balance
sheet date, the overdue amount relating to net receivables
due to Eni by the Nigerian state oil company NNPC was €474
million (€605 million at December 31, 2020). Approximately
50% of this amount related to past reporting years and was
covered by a “Repayment Agreement”, whereby Eni is to be
reimbursed through the sale of the entitlement attributable to
NNPC in certain rig-less petroleum initiatives with low mineral
risk, with a completion of the reimbursement plan expected
within the next two years based on Eni’s Brent price scenario.
The overdue receivable is stated net of a discount factor equal
to 8%, calculated based on the risk of the underlying mineral
initiative. The other 50% related to net receivables accrued for
the operations of 2021. A significant progress in the repayment
was noted in the final part of the year.
A cash call exposure towards a privately held Nigerian
oil company amounted to €195 million (€134 million at
from other counterparties comprised:
December 31, 2020) which were past due at the reporting
date. The amounts were stated net of a provision based on
the loss given default (LGD) defined by Eni for international
oil companies in a default state and on the basis of specific
factors. During the 2021, the partner suspended the payments
of the cash calls, making a claim against the amounts billed.
Arbitration procedures have been started for the resolution of
the dispute.
(i)
Receivables
the recoverable amount of €538 million (€376 million at
December 31, 2020) of overdue trade receivables owed to
Eni by the state-owned oil company of Venezuela, PDVSA, in
relation to equity volumes of natural gas supplied by the joint
venture Cardón IV, equally participated by Eni and Repsol.
Those trade receivables were divested by the joint venture
to the two shareholders. The receivables were stated net of
an allowance for doubtful accounts estimated on the basis
of average recovery percentages obtained by creditors in the
context of sovereign defaults, adjusted to reflect the strategic
value of the Oil & Gas sector, and also applied for assessing
the recoverability of the carrying amount of the investment
and the long-term interest in the initiative, as described in
note 17 - Other financial assets. Risks associated with the
complex financial outlook of the country and the deteriorated
operating environment were taken into account
in the
estimation of the expected loss by assuming a deferral in
the timing of collection of future revenues and overdue credit
amounts which resulted in an expected credit loss rate of
about 53%. The tightening of the US sanction framework
against Venezuela has prevented the implementation of the
mechanism of credit offsetting through in-kind refunds with
assignments to Eni of oil products of PDVSA. Therefore, the
amount of the receivable increased compared to the end of
2020; (ii) amounts to be received from customers following
the triggering of the take-or-pay clause of long-term gas
supply contracts for €325 million at December 31, 2020 were
collected during 2021.
Trade and other receivables stated in euro and U.S. dollars
amounted to €12,275 million and €5,222 million, respectively.
Management report | Consolidated financial statements | Annex
242
Credit risk exposure and expected losses relating to trade and other receivables has been prepared on the basis of internal ratings
as follows:
(€ million)
December 31, 2021
Business customers
National Oil Companies and Public Administrations
Other counterparties
Gross amount
Allowance for doubtful accounts
Net amount
Expected loss (% net of counterpart risk mitigation factors)
December 31, 2020
Business customers
National Oil Companies and Public Administrations
Other counterparties
Gross amount
Allowance for doubtful accounts
Net amount
Expected loss (% net of counterpart risk mitigation factors)
Performing receivables
Low
risk
Medium
Risk
High
Risk
Defaulted
receivables
Plenitude
customers
4,348
6,628
331
1,854
6,533
(25)
6,508
0.4
884
311
7,823
(416)
7,407
5.3
1,398
2,746
841
1,243
3,482
(32)
620
450
3,816
(21)
3,450
3,795
0.9
0.6
818
1
16
835
(69)
766
8.3
432
7
28
467
(29)
438
6.2
1,560
2,674
137
4,371
(2,209)
2,162
50.5
1,351
2,653
141
4,145
(2,429)
1,716
58.6
Total
13,354
3,890
4,919
2,601
2,601
22,163
(594)
(3,313)
2,007
18,850
22.8
14.9
5,927
4,121
4,035
2,173
2,173
14,083
(646)
(3,157)
1,527
10,926
29.7
22.4
the definition of
The classification of the Company’s customers and
counterparties and
the classes of
counterparty risk are disclosed in note 1 - Significant
accounting policies.
The assessments of the recoverability of trade receivables
for the supply of hydrocarbons, products and power to
retail, business customers and national oil companies and
of receivables towards joint operators of the Exploration &
Production segment for cash calls (national oil companies,
local private operators or international oil companies) are
reviewed at each annual deadline to reflect the scenario
and the current business trends, as well as any higher
counterparty risks. The gradual recovery of worldwide
economies from the fallout caused by COVID-19 crisis and
the improvement in the oil scenario have lessened the debt
burden of many state oil companies, with the exception of
Venezuela due to specific factors relating to the sanctioning
framework. On the other hand, the significant increase in the
prices of natural gas and electricity significantly increased
the exposures towards large industrial customers, requiring
a revision in the credit loss rate upwards to incorporate an
increased economic risk. With regard to customers of the
Plenitude business line, the recoverability assessments
incorporate the most updated information relating to the
performance in credit collection and the ageing of overdue
amounts.
Eni Annual Report 2021
The exposure to credit risk and expected losses relating to customers of Plenitude was assessed based on a provision
matrix as follows:
243
(€ million)
December 31, 2021
Plenitude customers:
- Retail
- Middle
- Other
Gross amount
Allowance for doubtful accounts
Net amount
Expected loss (%)
December 31, 2020
Plenitude customers:
- Retail
- Middle
- Other
Gross amount
Allowance for doubtful accounts
Net amount
Expected loss (%)
Not-past due
from 0
to 3 months
from 3
to 6 months
from 6
to 12 months
over
12 months
Total
Ageing
1,291
424
57
1,772
(63)
1,709
3.6
1,155
75
61
1,291
(46)
1,245
3.6
70
22
43
135
(22)
113
16.3
105
16
121
(23)
98
19.0
55
5
6
66
(27)
39
40.9
50
3
53
(22)
31
41.5
92
7
1
100
(52)
48
52.0
102
8
110
(57)
53
51.8
337
188
3
1,845
646
110
528
2,601
(430)
(594)
98
2,007
81.4
22.8
366
232
1,778
334
61
598
2,173
(498)
100
83.3
(646)
1,527
29.7
Trade and other receivables are stated net of the allowance
for doubtful accounts which has been determined
considering actions to mitigate counterparty risk amounting
to €5,350 million (€1,016 million at December 31, 2020):
(€ million)
Allowance for doubtful accounts - beginning of the year
Additions on trade and other performing receivables
Additions on trade and other defaulted receivables
Deductions on trade and other performing receivables
Deductions on trade and other defaulted receivables
Other changes
Allowance for doubtful accounts - end of the year
2021
3,157
202
348
(135)
(421)
162
3,313
2020
3,246
112
231
(82)
(275)
(75)
3,157
Additions to allowance for doubtful accounts on trade and
other performing receivables related to: (i) the Global Gas &
LNG Portfolio segment for €94 million (€7 million in 2020)
for supplies to large industrial customers as a consequence
of the noticeable increase in the exposure due to market
conditions; (ii) the Plenitude business line for €71 million (€84
million in 2020), mainly in the retail business.
Additions to allowance for doubtful accounts on trade and
other defaulted receivables related to: (i) the Exploration &
Production segment for €229 million (€118 million in 2020) for
receivables towards joint operators, State oil Companies and
local private companies for cash calls in oil projects operated
by Eni; (ii) to the Plenitude business line for €101 million (€97
million in 2020), particularly in the retail business.
Utilizations of allowance for doubtful accounts on trade and
other performing and defaulted receivables amounted to
€556 million (€357 million in 2020) and mainly related to: (i)
the Plenitude business line for €239 million (€200 million in
2020), in particular utilizations against charges of €196 million
(€178 million in 2020) mainly related to the retail business;
(ii) the Exploration & Production segment for €233 million
(€101 million in 2020) essentially related to redetermination
of receivables from the Nigerian state-owned company NNPC
due to a settlement which recognized Eni’s rights to recover
investment costs made, subject to arbitration, as part of a
larger agreement defining the extension and revision of the
contractual terms of the license. The credit recovery will be
reimbursed through attribution to Eni and the other partners of
a share of the state company’s oil entitlements in the project.
Management report | Consolidated financial statements | Annex
244
Net (impairment losses) reversals of trade and other receivables are disclosed as follows:
(€ million)
Net (impairment losses) reversals of trade and other receivables
New or increased provisions
Net credit losses
Reversals
2021
2020
2019
(550)
(66)
337
(279)
(343)
(36)
153
(226)
(620)
(45)
233
(432)
Receivables with related parties are disclosed in note 36 - Transactions with related parties.
9 CURRENT AND NON-CURRENT INVENTORIES
Current inventories are disclosed as follows:
(€ million)
Raw and auxiliary materials and consumables
Consumables for infrastructure and facility maintenance of perforation activities
Finished products and goods
Other
Raw and auxiliary materials and consumables include oil-based
feedstock and other consumables pertaining to refining and
chemical activities.
Materials and supplies include materials to be consumed in
drilling activities and spare parts to the Exploration & Production
segment for €1,481 million (€1,463 million at December 31, 2020).
Finished products and goods included natural gas and oil
products for €2,414 million (€874 million at December 31,
2020) and chemical products for €626 million (€443 million at
December 31, 2020).
Inventories are stated net of write-down provisions of €570
million (€348 million at December 31, 2020).
10 INCOME TAX RECEIVABLES AND PAYABLES
December 31, 2021
December 31, 2020
1,001
1,611
3,452
8
6,072
706
1,580
1,603
4
3,893
Inventories held for compliance purposes of €1,053 million
Italian
(€995 million at December 31, 2020) related to
subsidiaries for €1,032 million (€977 million at December 31,
2020) in accordance with minimum stock requirements for oil
and petroleum products set forth by applicable laws.
The increase in current and non-current inventories was
essentially due to the recovery in oil and hydrocarbons prices.
Natural gas inventories of €269 million were pledged to
guarantee the potential imbalance exposure towards Snam
Rete Gas SpA.
(€ million)
Income taxes
Current Non-current
Current Non-current
Current Non-current
Current Non-current
195
108
648
374
184
153
243
360
December 31, 2021
December 31, 2020
Receivables
Payables
Receivables
Payables
Income taxes are described in note 33 - Income tax expense.
Non-current income tax payables include the likely outcome of
pending litigation with tax authorities in relation to uncertain
tax matters relating to foreign subsidiaries of the Exploration
& Production segment for €230 million (€254 million at
December 31, 2020).
Eni Annual Report 2021 245
11 OTHER ASSETS AND LIABILITIES
December 31, 2021
December 31, 2020
Assets
Liabilities
Assets
Liabilities
(€ million)
Current Non-current
Current Non-current
Current Non-current
Current Non-current
Fair value of derivative financial instruments
12,460
51
12,911
Contract liabilities
Other Taxes
Other
442
732
182
796
482
1,435
928
13,634
1,029
15,756
115
726
27
1,378
2,246
1,548
450
688
152
181
920
2,686
1,253
1,609
1,298
1,124
841
4,872
162
394
26
1,295
1,877
The fair value related to derivative financial instruments is
disclosed in note 24 - Derivative financial instruments and
hedge accounting.
Assets related to other taxes included VAT for €498 million,
of which €340 million are current, and advances made in
December (€475 million at December 31, 2020, of which €315
million current).
Other assets include: (i) gas volumes prepayments that were
made in previous years due to the take-or-pay obligations in
relation to the Company’s long-term supply contracts, whose
underlying current portion Eni plans to recover within the next 12
months for €41 million (€53 million at December 31, 2020), and
beyond 12 months for €94 million (€651 million at December
31, 2020). The reduction was due to the withdrawal of prepaid
gas volumes; (ii) underlifting positions of the Exploration &
Production segment of €316 million (€338 million at December
31, 2020); (iii) non-current receivables for investing activities
for €23 million (€11 million at December 31, 2020).
Current contract liabilities decreased due to the settlement of
advances in local currency offset by supplies of equity gas,
which were originally received from the Egyptian state-owned
companies to finance the development of reserves as part of
the Concession Agreements in the country, among which in
particular, the progress of the Zohr project, considering the
substantial completion of the investment activities (€546
million at December 31, 2020). Other contract liabilities
included: (i) advances received by Engie SA (former Suez)
relating to a long-term agreement for supplying natural
gas and electricity. The current portion amounted to €60
million (€62 million at December 31, 2020), the non-current
portion amounted to €333 million (€393 million at December
31, 2020); (ii) advances received from Società Oleodotti
Meridionali SpA for the infrastructure upgrade of the crude
oil transport system at the Taranto refinery for €391 million
(€394 million at December 31, 2020).
Revenues recognized during the year related to contract
liabilities stated at December 31, 2021 are indicated in note
29 - Revenues and other income.
Liabilities related to other current taxes include excise
duties and consumer taxes for €700 million (€516 million at
December 31, 2020) and VAT liabilities for €248 million (€212
million at December 31, 2020).
Other liabilities included: (i) overlifting imbalances of the
Exploration & Production segment for €630 million (€559
million at December 31, 2020); (ii) prepaid revenues and
income for €361 million (€398 million at December 31, 2020),
of which current for €90 million (€75 million at December 31,
2020); (iii) cautionary deposits for €268 million (€261 million
at December 31, 2020), of which €223 million from retail
customers for the supply of gas and electricity (€228 million
at December 31, 2020); (iv) the value of gas not withdrawn
by customers due to the triggering of the take-or-pay clause
provided for by the relevant long-term contracts for €112
million (€437 million at December 31, 2020), of which the
underlying volumes are expected to be withdrawn within the
next 12 months for €73 million (€65 million at December 31,
2020) and beyond 12 months for €39 million (€372 million at
December 31, 2020). The decrease was due to withdrawals of
prepaid gas volume; (v) payables related to investing activities
for €103 million.
Transactions with related parties are described in note 36 -
Transactions with related parties.
Management report | Consolidated financial statements | Annex
246
12 PROPERTY, PLANT AND EQUIPMENT
s
g
n
i
d
l
i
u
b
d
n
a
d
n
a
L
1,128
18
(49)
(101)
(1)
2
22
50
2
1,071
4,175
3,104
1,218
12
(55)
13
(82)
t
n
a
l
p
,
s
l
l
e
w
P
&
E
y
r
e
n
i
h
c
a
m
d
n
a
39,648
8
(5,421)
1,080
(90)
2,956
200
3,841
120
42,342
149,117
106,775
46,492
6
(5,642)
183
(1,551)
(€ million)
2021
Net carrying amount - beginning of the year
Additions
Depreciation capitalized
Depreciation(*)
Reversals
Impairment
Write-off
Currency translation differences
Initial recognition and changes in estimates
Changes in the scope of consolidation
Transfers
Other changes
Net carrying amount - end of the year
Gross carrying amount - end of the year
Provisions for depreciation and impairments
2020
Net carrying amount - beginning of the year
Additions
Depreciation capitalized
Depreciation(*)
Reversals
Impairment
Write-off
Currency translation differences
(2)
(3,325)
Initial recognition and changes in estimates
Transfers
Other changes
Net carrying amount - end of the year
Gross carrying amount - end of the year
Provisions for depreciation and impairments
(*) Before capitalization of depreciation of tangible assets.
39
(15)
1,128
4,082
2,954
870
2,677
(62)
39,648
136,468
96,820
l
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l
p
x
e
P
&
E
1,341
380
28
(331)
106
(9)
(199)
(44)
(28)
1,244
1,244
1,563
265
4
(296)
(119)
(9)
(47)
(20)
1,341
1,341
s
t
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7,118
3,413
90
337
(85)
(18)
546
4
(1,119)
(3,797)
56
6,545
10,485
3,940
7,412
3,127
100
98
(567)
(7)
(605)
94
(2,630)
96
7,118
11,169
4,051
d
n
a
t
n
a
l
p
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O
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n
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c
a
m
3,299
277
(496)
118
(768)
(2)
66
1,001
409
(54)
3,850
30,618
26,768
3,632
229
(508)
342
(972)
(1)
(75)
755
(103)
3,299
28,839
25,540
s
s
e
r
g
o
r
p
n
i
s
t
e
s
s
a
s
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c
n
a
v
d
a
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n
a
l
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b
g
n
a
t
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h
t
O
1,409
854
(582)
12
43
(459)
(30)
1,247
3,107
1,860
1,875
768
12
(582)
(1)
(14)
(794)
145
1,409
2,742
1,333
l
a
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53,943
4,950
118
(5,966)
1,535
(1,626)
(352)
3,688
195
(252)
66
56,299
198,746
142,447
62,192
4,407
104
(6,205)
648
(3,754)
(305)
(4,140)
955
41
53,943
184,641
130,698
Capital expenditures included capitalized finance expenses of
€68 million (€73 million in 2020) related to the Exploration &
Production segment for €54 million (€51 million in 2020). The
interest rate used for capitalizing finance expense ranged from
0.4% to 2.1% (1.3% to 2.2% at December 31, 2020).
Capital expenditures primarily related to the Exploration &
Production segment for €3,843 million (€3,444 million in 2020).
Capital expenditures by industry segment and geographical
area of destination are reported in note 35 - Segment
information and information by geographical area.
Eni Annual Report 2021
The main depreciation rates used were substantially unchanged from the previous year and ranged as follows:
(%)
Buildings
Mineral exploration wells and plants
Refining and chemical plants
Gas pipelines and compression stations
Power plants
Other plant and machinery
Industrial and commercial equipment
Other assets
247
2 - 10
UOP
3 - 17
4 - 12
3 - 5
6 - 12
5 - 25
10 - 20
The criteria adopted by Eni for determining impairment
losses and reversal is reported in note 15 - Impairment review
of tangible and intangible assets and right-of-use assets.
Currency translation differences related to subsidiaries which
utilize the U.S. dollar as functional currency (€3,603 million).
Initial recognition and change in estimates include the increase
in the asset retirement cost of Exploration & Production
segment mainly due to the cost reduction, partially offset
by the increase in discount rates and in estimated costs for
social projects to be incurred in respect to the commitments
being formalized between Eni SpA and the Basilicata region,
following to the development plan of oilfields in Val d’Agri
relating to royalties for mineral concessions (€134 million).
Changes in the scope of consolidation related to: (i) the
deconsolidation of Mozambique Rovuma Venture SpA
following the change from joint operation to joint venture
for €1,318 million; (ii) the acquisition of companies by the
Plenitude business line for €658 million referring in particular
to onshore wind assets already in operation in Italy (€423
million); (iii) the acquisition of Spanish Egyptian Gas Co SAE
(now Damietta LNG (DLNG) SAE) for €176 million as part
of the restructuring of the formerly equity-accounted Unión
Fenosa Gas SA. More information on business combinations
is provided in note 5 - Business combinations and other
significant transactions.
Transfers from E&P tangible assets in progress to E&P UOP
wells, plant and machinery related for €3,556 million to the
commissioning of wells, plants and machinery primarily in
Indonesia, Egypt, Kazakhstan, United States, Angola, Italy,
Iraq and Mexico.
In 2021, exploration and appraisal activities comprised write-offs
of unsuccessful exploration wells costs for €331 million mainly
in Gabon, Montenegro, Myanmar, Bahrain, Egypt and Angola.
Other changes
include the carrying amount of a 5%
participating interest in the OML 17 property in Nigeria, which
has been divested to a local operator. The transaction is
currently being reviewed by the Nigerian antitrust authorities
for alleged lack of communication regarding the transaction.
Exploration and appraisal activities related for €1,101
million to the costs of suspended exploration wells pending
final determination of commerciality and management’s
continuing commitment and for €136 million to costs of
exploration wells in progress at the end of the year. Changes
relating to suspended wells are reported below:
(€ million)
Costs for exploratory wells suspended - beginning of the year
Increases for which is ongoing the determination of proved reserves
Amounts previously capitalized and expensed in the year
Reclassification to successful exploratory wells following the estimation of proved reserves
Disposals
Changes in the scope of consolidation
Currency translation differences
Other changes
Costs for exploratory wells suspended - end of the year
2021
1,268
288
(286)
(43)
(3)
(199)
100
(24)
1,101
2020
1,246
408
(226)
(48)
2019
1,101
368
(183)
(46)
(15)
(112)
21
1,268
1,246
Management report | Consolidated financial statements | Annex
248
The following information relates to the stratification of the suspended wells pending final determination (ageing):
Costs capitalized and suspended
for exploratory well activity
- within 1 year
- between 1 and 3 years
- beyond 3 years
Costs capitalized for suspended wells
- fields including wells drilled over the last 12 months
- fields for which the delineation campaign is in progress
- fields including commercial discoveries that proceeds
to sanctioning
2021
2020
2019
(number
of wells in Eni’s
interest)
(€ million)
(number of
wells in Eni’s
interest)
(number of
wells in Eni’s
interest)
(€ million)
(€ million)
175
269
657
1,101
175
567
359
1,101
4.0
12.2
19.7
35.9
4.0
17.9
14.0
35.9
157
250
861
1,268
157
631
480
1,268
6.7
11.0
19.3
37.0
6.7
14.9
15.4
37.0
185
171
890
1,246
185
556
505
1,246
7.7
6.4
26.4
40.5
7.7
11.3
21.5
40.5
Suspended wells costs awaiting a final investment decision
amounted to €359 million and primarily related to several
initiatives in the main countries of presence (Angola, Congo,
Egypt, Indonesia and Nigeria).
Unproved mineral interests, comprised in assets in progress
of the Exploration & Production segment, include the purchase
price allocated to unproved reserves following business
combinations or acquisition of individual properties. Unproved
mineral interests were as follows:
(€ million)
2021
o
g
n
o
C
a
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g
N
i
Carrying amount - beginning of the year
203
860
Additions
Net (impairments) reversals
Reclassification to Proved Mineral Interest
Currency translation differences
Carrying amount - end of the year
2020
(1)
16
218
(48)
80
892
n
a
t
s
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n
e
m
k
r
u
T
3
3
A
S
U
114
3
35
(92)
8
68
Carrying amount - beginning of the year
253
939
139
162
Additions
Net (impairments) reversals
Reclassification to Proved Mineral Interest
Currency translation differences
Carrying amount - end of the year
(25)
(25)
203
(134)
(37)
(2)
(3)
(11)
114
(79)
860
a
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r
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g
A
l
100
6
8
114
115
55
(61)
(9)
100
b
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A
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t
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n
U
s
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t
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r
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m
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l
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t
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T
468
1,763
9
35
(141)
153
1,819
2,162
57
(196)
(90)
(170)
1,763
40
508
535
(25)
(42)
468
t
p
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E
18
(2)
(1)
1
16
19
2
(2)
(1)
18
Unproved mineral interests comprised the Oil Prospecting
License 245 property (“OPL 245”), offshore Nigeria, for €867
million corresponding to the price paid in 2011 to the Nigerian
Government to acquire a 50% interest in the property, with
another international oil company acquiring the remaining
50%. As of December 31, 2021, the net book value of the
property amounted to €1,176 million, including capitalized
exploration costs and pre-development costs. The acquisition
of OPL 245 is subject to judicial proceedings in Italy and
in Nigeria for alleged corruption and money laundering in
respect of the Resolution Agreement signed on April 29,
2011, relating to the purchase of the license. This proceeding
is disclosed in note 28 - Guarantees, Commitments and Risks
- legal proceedings. The exploration period of the license OPL
245 expired on May 11, 2021. Eni is awaiting the conversion
of the license into an Oil Mining Lease (OML) from the
Eni Annual Report 2021
249
relevant Nigerian authorities to start the development of the
reserves, having submitted an application for the conversion
within the contractual terms and having verified compliance
with all conditions and requirements provided for. Based
on these considerations, Eni believes to have acquired
the right to conversion. Consistently, the assessment of
the recoverability of the asset book value was made in
accordance with its value-in-use, which confirmed the book
value also incorporating a stress test assuming possible
delays in the start of production activities. In September 2020
Eni started an arbitration at ICSID, the International Centre for
Settlement of Investment Disputes, to protect the value of its
asset. In case of refusal to conversion, a continuing deadlock
by the Nigerian authorities or other action suggesting an
expropriation, in the next financial reports the Company will
consider a reclassification of the asset in a dedicated line item
and the evaluation of the underlying right for compensation.
13 RIGHT-OF-USE ASSETS AND LEASE LIABILITIES
impairments amounted to
Accumulated provisions for
€20,796 million (€20,343 million at December 31, 2020).
Property, plant and equipment include assets subject to
operating leases for €372 million, essentially relating to
service stations of the Refining & Marketing business line.
At December 31, 2021, Eni pledged property, plant and
equipment for €24 million to guarantee payments of excise
duties (same amount as of December 31, 2020).
Government grants recorded as a decrease of property, plant
and equipment amounted to €105 million (€103 million at
December 31, 2020).
Contractual commitments related to the purchase of property,
plant and equipment are disclosed in note 28 - Guarantees,
commitments and risks - Liquidity risk.
Property, plant
equipment
arrangements are described
commitments and risks.
concession
in note 28 - Guarantees,
under
and
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2,672
(217)
244
215
(170)
213
12
(1)
(118)
2,667
3,366
699
3,153
79
(232)
(251)
(77)
2,672
3,107
435
183
572
389
313
193
(189)
(13)
(60)
244
528
284
446
583
(274)
(25)
11
(166)
575
1,268
693
497
281
(252)
(13)
(67)
446
927
481
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424
104
(63)
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(8)
454
666
212
460
49
(57)
(21)
(7)
424
573
149
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23
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29
18
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652
34
(122)
8
(6)
52
618
948
330
707
65
(118)
(8)
6
652
859
207
(€ million)
2021
Net carrying amount - beginning of the year
Additions
Depreciation(a)
Impairment
Currency translation differences
Changes in the scope of consolidaion
Other changes
Net carrying amount at the end of the year
Gross carrying amount at the end of the year
Provisions for depreciation and impairment
2020
Net carrying amount - beginning of the year
Additions
Depreciation(a)
Impairment
Currency translation differences
Other changes
Net carrying amount at the end of the year
Gross carrying amount at the end of the year
Provisions for depreciation and impairment
(a) Before capitalization of depreciation of tangible assets.
l
s
e
c
h
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V
i
32
40
(22)
(2)
48
84
36
32
24
(22)
(2)
32
65
33
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e
h
t
O
l
a
t
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162
105
(49)
(14)
6
116
(64)
262
433
171
181
95
(56)
(11)
(7)
(40)
162
293
131
4,643
1,104
(928)
(59)
253
110
(302)
4,821
7,403
2,582
5,349
808
(928)
(47)
(292)
(247)
4,643
6,381
1,738
Management report | Consolidated financial statements | Annex
250
Right-of-use assets (RoU) related: (i) for €3,195 million (€3,274
million at December 31, 2020) to the Exploration & Production
segment and mainly comprised leases of certain FPSO vessels
hired in connection with operations at offshore development
projects in Ghana (OCTP) and Angola (Block 15/06 West and
East hub) with expiry date between 8 and 15 years including a
renewal option and in addition the lease component of long-
term leases of offshore rigs; (ii) for €765 million (€788 million at
December 31, 2020) to the Refining & Marketing and Chemical
segment relating to motorway concessions, land leases,
leases of service stations for the sale of oil products, leasing
of vessels for shipping activities and the car fleet dedicated
to the car sharing business; (iii) for €541 million (€526 million
at December 31, 2020) to the Corporate and other activities
segment mainly regarding property rental contracts.
The increase recorded in 2021 mainly referred to: (i) the
Exploration & Production segment for €392 million relating to
the rental of drilling rigs (€215 million) and vessels and related
logistics for Oil & Gas transport (€159 million); (ii) the Global
Gas & LNG Portfolio business line for €343 million relating
to LNG transport vessels (€331 million); (iii) the Refining &
Marketing business line for €251 million relating to leases
of vessels for shipping and storage activities of Eni Trade &
Biofuels SpA (€108 million) and new motorway concessions,
price extensions/reviews of contracts, land leases, leases
of service stations, car fleet dedicated to the car sharing
business (€122 million); (iv) the Corporate and other activities
segment for €104 million relating to two aircraft sold and
repurchased through a leaseback agreement (€69 million)
and leasing of assets for staff activities (company cars, IT,
real estate, for €32 million).
The change in the scope of consolidation referred to the
Plenitude business line for €75 million.
The main leasing contracts signed for which the asset is not
yet available concerns: (i) a contract with a nominal value of
€1.8 billion relating to an FPSO vessel that will be deployed for
the development of Area 1 in Mexico. The asset is expected
to enter under the Group’s control and be accounted as RoU
in 2022, expiring in 2040; (ii) a contract with a nominal value
of €437 million relating to leasing of office buildings with
an expiry date of 20 years including an extension option of
6 years; (iii) storage capacity and time charter vessel rental
contracts of €311 million.
Main future cash outflows potentially due not reflected in the
measurements of lease liabilities related to: (i) options for the
extension or termination of lease for office buildings of €302
million; (ii) extension options related to service stations for
the sale of oil products of €130 million; (iii) other extension
options related to ancillary assets in the upstream business
for €67 million.
Liabilities for leased assets were as follows:
(€ million)
2021
Book amount at the beginning of the year
Additions
Decreases
Currency translation differences
Changes in the scope of consolidation
Other changes
Book amount at the end of the year
2020
Book amount at the beginning of the year
Additions
Decreases
Currency translation differences
Other changes
Book amount at the end of the year
e
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4,169
1,102
(5)
231
89
(1,197)
4,389
4,759
808
(3)
(269)
(1,126)
4,169
l
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5,018
1,102
(939)
269
103
(216)
5,337
5,648
808
(869)
(309)
(260)
5,018
Eni Annual Report 2021
251
Lease liabilities related for €1,684 million (€1,652 million at
December 31, 2020) to the portion of the liabilities attributable
to joint operators in Eni-led projects which will be recovered
through the mechanism of the cash calls.
Total cash outflows for leases consisted of the following: (i) cash
payments for the principal portion of the lease liability for €939
million; (ii) cash payments for the interest portion of €307 million.
Lease liabilities stated in U.S. dollars and euro amounted to
€3,690 million and €1,495 million, respectively.
The change in the scope of consolidation referred to the
Plenitude business line for €72 million.
Other changes in right-of-use assets and lease liabilities
essentially related to early termination or renegotiation of
lease contracts.
Liabilities for leased assets with related parties are described
in note 36 - Transactions with related parties.
The amounts recognised in the profit and loss account consist of the following:
(€ million)
Other income and revenues
Income from remeasurement of lease liabilitiies
Purchases, services and other
Short-term leases
Low-value leases
Variable lease payments not included in the measurement of lease liabilities
Capitalised direct cost associated with self-constructed assets - tangible assets
Depreciation and impairments
Depreciation of RoU leased assets
Capitalised direct cost associated with self-constructed assets - tangible assets
Impairment losses of RoU leased assets
Finance income (expense) from leases
Interests on lease liabilities
Capitalised finance expense of ROU leased assets - tangible assets
Net currency translation differences on lease liabilities
2021
2020
2019
18
18
85
31
14
(4)
126
928
(110)
59
877
(304)
5
(34)
(333)
12
12
67
37
7
(2)
109
928
(96)
47
879
6
6
115
39
16
(2)
168
999
(210)
41
830
(347)
(378)
7
24
17
(6)
(316)
(367)
Management report | Consolidated financial statements | Annex
252
14 INTANGIBLE ASSETS
(€ million)
2021
Net carrying amount - beginning of the year
Additions
Amortization
Impairment
Reversals
Write-off
Changes in the scope of consolidation
Currency translation differences
Other changes
Net carrying amount at the end of the year
Gross carrying amount at the end of the year
Provisions for amortization and impairment
2020
Net carrying amount - beginning of the year
Additions
Amortization
Impairment
Reversals
Write-off
Changes in the scope of consolidation
Currency translation differences
Other changes
Net carrying amount at the end of the year
Gross carrying amount at the end of the year
Provisions for amortization and impairment
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12
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1,707
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(66)
888
1,613
725
162
28
(89)
(2)
11
45
155
1,709
1,554
195
23
(92)
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41
162
1,623
1,461
589
244
(168)
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226
2
(34)
845
4,843
3,998
568
196
(130)
(7)
24
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589
4,399
3,810
1,639
284
(287)
(16)
21
(35)
237
59
11
1,913
8,259
6,346
1,794
237
(275)
(30)
24
(24)
7
(69)
(25)
1,639
7,635
5,996
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1,297
(22)
1,574
13
2,862
24
4,799
1,265
(24)
70
(14)
1,297
3,059
237
(275)
(54)
24
(24)
77
(83)
(25)
2,936
Exploration rights comprised the residual book value of license
and leasehold property acquisition costs relating to areas with
proved reserves, which are amortized based on UOP criteria
and are regularly reviewed for impairment. Furthermore, they
include the cost of unproved areas which are suspended
pending a final determination of the success of the exploration
activity or until management confirms its commitment to the
initiative. Additions for the year related to signature bonuses
paid for the acquisition of new exploration acreage in Angola
and Ivory Coast.
The breakdown of exploration rights by type of asset was as
follows:
(€ million)
Proved licence and leasehold property acquisition costs
Unproved licence and leasehold property acquisition costs
Other mineral interests
December 31, 2021
December 31, 2020
236
677
913
225
653
10
888
Industrial patents and intellectual property rights mainly
regarded the acquisition and
internal development of
software and rights for the use of production processes and
software.
Write-offs of €35 million related to exploration licenses due
primarily to the abandonment of underlying initiatives for
geopolitical and environmental factors.
Other intangible assets comprised: (i) customer acquisition costs
relating to Plenitude business line for €348 million (€262 million
at December 31, 2020); (ii) concessions, licenses, trademarks and
Eni Annual Report 2021
253
similar items for €139 million (€88 million at December 31, 2020)
comprised transmission rights for natural gas imported from
Algeria for €32 million (€25 million at December 31, 2020); (iii)
customer relationship for €109 million recognized following the
acquisition of Finproject group; (iv) capital expenditures in progress
on natural gas pipelines for which Eni has acquired transport rights
for €78 million (same amount as of December 31, 2020).
Other intangible assets with an indefinite useful life related to the
acquisition of Finproject’s brands XL EXTRALIGHT and Levirex.
The main amortization rates used were substantially unchanged
from the previous year and ranged as follows:
(%)
Exploration rights
Transport rights of natural gas
Other concessions, licenses, trademarks and similar items
Industrial patents and intellectual property rights
Capitalized costs for customer acquisition
Other intangible assets
UOP
3
3 - 33
20 - 33
17 - 33
4 - 20
Cumulative impairments charges of goodwill at the end of
the year amounted to €2,500 million.
The breakdown of goodwill by segment and business line is
provided below:
(€ million)
Plenitude
Refining & Marketing
Exploration & Production
Chemical
Corporate and Other activities
December 31, 2021
December 31, 2020
2,446
173
139
93
11
2,862
1,047
93
146
11
1,297
An impairment loss of goodwill in 2021 was essentially
recorded in relation to the Exploration & Production segment.
Changes in the scope of consolidation of goodwill related:
(i) for €728 million to the acquisition of 100% of Be Power
SpA which, through the subsidiary Be Charge, is the second
Italian operator in the segment of charging infrastructures for
electric mobility; (ii) for €168 million to the 100% acquisition
of Aldro Energía y Soluciones SLU, a company operating in
the Iberian retail market for the sale of electricity, gas and
energy services; (iii) for €302 million to the acquisition of
Eolica Lucana Srl, Green Energy Management Services Srl
(GEMS), Finpower Wind Srl, Società Energie Rinnovabili SpA
(SER), Società Energie Rinnovabili 1 SpA (SER1) owning
wind farms onshore in service; (iv) for €120 million to the
acquisition of Dhamma Energy Group, owner of a platform
for the development of photovoltaic plants in France and
Spain; (v) for €93 million to the acquisition of the control of
Finproject by Versalis; (vi) for €81 million to the acquisition
from Azora Capital of a portfolio of renewable energy
projects under development and capacity in service; (vii) for
€80 million to the 100% acquisition of FRI-EL Biogas Holding
(now EniBioCh4in SpA), a company operating in the Italian
bioenergy sector.
Information about the allocations of goodwill deriving from
business combinations are provided in note 5 - Business
combinations and other significant transactions.
Goodwill acquired through business combinations has been
allocated to the CGUs that are expected to benefit from the
synergies of the acquisition.
With regard to the Plenitude business line engaged in the
retail sale of natural gas and electricity, with significant
allocated values of goodwill, in consideration of the high
integration between the countries in which the Plenitude
Group operates and the possible transnational synergies, the
CGU defined for the recoverability valuation of the goodwill
for a total of €1,214 million deriving from the acquisitions
was extended from Italy to the entire perimeter of the
Retail business and renamed Domestic-Foreign market.
That goodwill concerns: the buy-out of the minorities of the
former Italgas in 2003 (€706 million), the acquisition of local
Italian companies synergic to Eni’s main areas of activity
in previous years (€198 million), the acquisition in 2021 of
100% of Aldro Energía y Soluciones SLU active in the Iberian
market (€168 million), as well as the pre-existing goodwill of
Eni Gas & Power France SA (€95 million), and other minor
amounts. The impairment review performed at the balance
sheet date confirmed the recoverability of the carrying
amount of this second-level CGU comprising the goodwill.
The
impairment review of the CGU Domestic-Foreign
market, including goodwill, was performed by comparing
the carrying amount to the value in use of the CGU, which
was estimated based on the cash flows of the four-year
Management report | Consolidated financial statements | Annex
254
plan approved by management and on a terminal value
calculated as the perpetuity of the cash flow of the last year
of the plan by assuming a nominal long-term growth rate
equal to zero, unchanged from the previous year. These
cash flows were discounted by using the post-tax WACC
of the retail business adjusted considering the country
risks of operation equal to an average of 4.9%. There are
no reasonable assumptions of changes in the discount
rate, growth rate, profitability or volumes that would lead to
zeroing the headroom amounting to about €5 billion of the
value in use of the CGU Retail with respect to its book value,
including the allocated goodwill.
In the renewable business of Plenitude, the CGUs have
been identified at a significant project level, in some cases
grouped at company level for projects/plants characterized
by relevant synergies. Cash flows included both those
relating to existing assets (acquired or build internally)
and those associated with the repowering process in the
case of acquired assets. For the acquisitions of 2021, the
impairment was assessed by updating the valuation model
used for the acquisition which confirmed the recoverability
of the goodwill allocated to the complex of the CGUs.
Goodwill of the E-mobility business of Plenitude recognized
in connection with the acquisition in 2021 of the entire
share capital of Be Power SpA, which through the subsidiary
Be Charge is the second Italian operator in the segment of
charging infrastructures for electric mobility (€728 million),
was assessed by updating the valuation model of the
operation.
15 IMPAIRMENT REVIEW OF TANGIBLE AND
INTANGIBLE ASSETS AND RIGHT-OF-USE
ASSETS
The impairment test assumptions of the Plenitude & Power
operating segment are disclosed in note 14 - Intangible assets.
The recoverability test of carrying amounts of Oil & Gas cash
genenerating units (CGUs) is the most important of the critical
accounting estimates in the preparation of Eni’s consolidated
financial statements. This owes to the relative weight of the
invested capital in the Oil & Gas sector with respect to the total
consolidated assets and to the complexity of thee estimation
process of the values-in-use (VIUs) of Oil & Gas CGUs.
Future expected cash flows associated with the use of Oil
& Gas assets are based on management’s judgment and
subjective evaluation about highly uncertain matters like
future, long-term hydrocarbons prices, assets’ useful lives,
projections of future operating and capital expenditures,
the volumes of reserves that will ultimately be recovered
and costs of decommissioning Oil & Gas assets at the
end of their useful lives. Among all these variables, future
hydrocarbons prices are the main value driver and because
we are in a commodity business, they tend to be very volatile
and unpredictable due both to the number of driving forces
underlying long-term trends in demands and supplies of
hydrocarbons, and to the trend of financial markets.
Forecasts of hydrocarbons prices adopted by Eni’s
management for the purpose of evaluating both Oil & Gas
assets recoverability and of making final investment decisions
are estimated on the basis of management’s view of a number
of fundamental trends, namely the expected evolution of the
global energy mix in the next twenty-to-thirty years in line
with the decarbonization goals of countries conference last
year, the pace of the energy transition, the enduring impacts
of the COVID-19 pandemic, technology developments, long-
term trends in demand and supplies of hydrocarbons, global
macroeconomic and demographic growth, the evolution of
technologies and climate policies, together with the evolution
in consumers’ and investors’ preferences.
In the short-term, Eni’s hydrocarbons forecasts also consider
market forward prices of crude oil and natural gas, as well
as projections made by investment banks and other market
observatories.
Eni recognizes and fully endorses the transition of the
economy towards a low carbon development model and
the goals of the Paris COP21 agreements and based on this
has designed a strategy to achieve the decarbonization of
the Company’s products and industrial processes targeting
net zero emissions in Scope 1+2+3 by 2050. Consistently
with this long-term path which is factoring possible trends
in markets, technologies and a gradual evolution in the
Company’s products, management is assuming a long-term
price of the Brent crude oil benchmark of 62 $/barrel in 2020
USD until the year 2035 and then a declining trend to 46 $/
barrel in 2050 due to the expected phase-out of crude oil
from the global energy mix in view of achieving the goals of
the Paris agreement. In the year 2022-2023, management
is projecting nominal prices of 80 $ and 75 $/barrel,
respectively, considering a strong macroeconomic cycle,
financial discipline and consequent limitation of investments
by listed oil companies and production issues in countries of
the OPEC+ alliance. The corresponding pricing assumptions
in the 2020 financial statements were 55 $ and 60 $/barrel.
Regarding natural gas future prices, while in the short-to-
medium term the benchmark price for spot sales at the
Euroepan continental hub “TTF” is forecast to strengthen
considerably due to tight supplies at 21.2 $ and 14.4 $/
mmBTU in 2022 and 2023, respectively (in the 2020 financial
statements the corresponding projections were 4.7 $ and 4.9 $/
mmBTU), in the long-term management expects a decline due
to the assumption of increasing competition from renewable
energies and consumption efficiency for a TTF price forecast
of 8.5 $/mmBTU in real currency 2020 in the period 2025-2045
and a further decline to 6.2 $/mmBTU in 2050. Short-term
forecasts are exposed to the unpredictable consequences of
Eni Annual Report 2021 255
the ongoing conflict between Russia and Ukraine, which up to
date has caused an unprecedented phase of volatility in the
energy commodity market.
The post-tax, discount rate of future expected cash flows
associated with the use of Oil & Gas CGUs was estimated
based on the weighted average cost of equity (Ke) and of
financial debt, in line with the methodology recommended by
the capital asset pricing model. The cost of equity considers
a market risk premium measured on the basis of the long-
term returns of the S&P 500 and an additional premium which
was estimated by management to discount the operational
risks of the countries of activity and the risks of the energy
transition. As a result of these assumptions, our cost of
equity is estimated at about 10%, counterbalancing a decline
in yields of risk-free assets, which are incorporated both in
the cost of equity and in cost of the financial debt. Overall,
our risk-adjusted weighted average cost of capital (adjusted
WACC) was about 7% in 2021.
In 2021, management has recognized reversals at previously
impaired Oil & Gas CGUs driven by strengthened hydrocarbons
prices, particularly gas prices. The main amounts regarded
gas fields in Italy and fields in Congo, Libya, USA, Algeria,
Turkmenistan, Nigeria and East Timor. The post-tax, risk-
adjusted WACC that were used in the impairment review ranged
between 10.7% and 6.5%. In the case of a reversal higher than
€100 million, a risk-adjusted post-tax WACC of 6.8% was used,
which redetermines to about 18% pre-tax.
The VIU of the whole portfolio of Oil & Gas CGUs estimated
under management’s pricing and other operating assumptions
shows a headroom greater than 90% of the underlying book
values, also discounting the expected expenses associated
with the purchase of carbon credits as part of the Company’s
strategy to decarbonize its products/processes through the
participation to forestry conservation projects, which belong
to the REDD+ framework defined by the United Nations. The
calculation included all the assets of consolidated companies,
joint ventures and associates excluding Vår Energi AS and an
asset under arbitration procedure.
Considering the level of judgment in the estimation process of
the VIUs ofOil & Gas assets, management has prepared a stress-
test analysis utilizing alternative decarbonization scenario as
adopted by the IEA in its SDS WEO ’21 and net zero emissions
2050 (NZE 2050) scenarios. The sensitivity tests to the IEA SDS
and NZE 2050 scenario consider energy commodity pricing
assumptions different from those adopted by the management
and the utilization of a cost for carbon emissions across all
geographic areas where Eni operates its oil & gas activities
based on the prices reported in the following table:
Value in use of the O&G CGUs
Headroom vs. Carrying amounts
Assumption at 2050 in real terms USD 2020
Tax-deductible
CO2 charges
Non tax-deductible
CO2 charges
Brent price
European
gas price
Cost of
CO2
Eni's scenario
IEA SDS WEO 2021 scenario
IEA NZE 2050 scenario
~90%
76%
35%
(*) Prices relating to advanced/emerging economies.
-
75%
32%
46 $/bbl
6.2 $/mmBTU
CO2 costs projections in the EU/ETS
+ projections of forestry costs
50 $/bbl
4.5 $/mmBTU
200-95 per tonne of CO2*
24 $/bbl
3.6 $/mmBTU
250-55 per tonne of CO2*
In relation to the NZE 2050 scenario, for which possible value
recovery actions are not considered, such as rescheduling/
cancellation of planned development activities, contractual
renegotiations, effect on costs or actions aimed at
accelerating the pay-back period, a headroom is determined,
that is, the excess of the total value-in-use compared to the
corresponding book value of the E&P CGU, consistent and in
excess of more than 30% compared to the book value.
The 2021 valuation of the recoverability of the assets also
resulted in the write-down of the residual book value of the
refineries and the joint operations in Italy and Europe for
an amount of €1,179 million (including the stay-in-business
investments of the CGUs previously impaired). The driver of
this loss is the significant decline in margins, compressed
by the worsening of crack spreads for the products and the
increase in the cost of gas-indexed utilities, and the reduced
profitability prospects of Eni’s CGUs due to structural
weaknesses in the European refining sector (suboptimal size
of the plants and competitive pressure from more efficient
refiners) and the projections of limited recovery in the demand
for fuels also due to competition from electric mobility. In
addition, operating costs are penalized by the increase in
charges for the purchase of emission certificates under the
European Emission Trading System scheme.
Management report | Consolidated financial statements | Annex 256
16 INVESTMENTS
EQUITY-ACCOUNTED INVESTMENTS
d
e
l
l
o
r
t
n
o
c
s
e
i
t
i
t
n
e
n
i
s
t
n
e
m
t
s
e
v
n
I
d
e
t
a
d
i
l
o
s
n
o
c
n
u
i
n
E
y
b
80
1
(21)
6
(3)
(25)
5
2
(1)
44
2021
s
e
r
u
t
n
e
v
t
n
i
o
J
2,832
558
(231)
31
(910)
(586)
355
83
(75)
s
e
t
a
i
c
o
s
s
A
3,837
103
(133)
165
(381)
(16)
296
(85)
2,057
3,786
d
e
l
l
o
r
t
n
o
c
s
e
i
t
i
t
n
e
n
i
s
t
n
e
m
t
s
e
v
n
I
d
e
t
a
d
i
l
o
s
n
o
c
n
u
i
n
E
y
b
2020
s
e
r
u
t
n
e
v
t
n
i
o
J
s
e
t
a
i
c
o
s
s
A
l
a
t
o
T
86
2
3
(2)
(5)
3
(4)
(3)
80
4,592
4,357
9,035
75
(3)
21
198
(1)
14
275
(4)
38
(1,399)
(332)
(1,733)
(296)
30
(254)
66
2,832
(13)
1
(345)
(42)
3,837
(314)
34
(603)
21
6,749
l
a
t
o
T
6,749
662
(385)
202
(1,294)
(627)
360
381
(161)
5,887
(€ million)
Carrying amount - beginning of the year
Additions and subscriptions
Divestments and reimbursements
Share of profit of equity-accounted
investments
Share of loss of equity-accounted
investments
Deduction for dividends
Changes in the scope of consolidation
Currency translation differences
Other changes
Carrying amount - end of the year
Acquisitions and share capital increases mainly related for
€480 million to the acquisition of a 20% stake in Doggerbank
Offshore Wind Farm Project 1 Holdco Ltd and Doggerbank
Offshore Wind Farm Project 2 Holdco Ltd, which are
developing the Dogger Bank (A and B) offshore wind power
generation project in the British North Sea.
Divestments and reimbursement essentially related to the
sale of Unión Fenosa Gas SA for €232 million to the Spanish
partner Naturgy following the corporate restructuring
through the splitting of the assets of the venture among the
shareholders, as well as a capital reimbursement made by
Angola Lng Ltd for €130 million.
Eni’s share of the results of entities accounted for under the
equity method mainly comprised a loss incurred at: (i) Saipem
SpA for €752 million due to operating losses on contracts
and to the recognition of extraordinary and restructuring
charges. The loss was estimated by management on the
basis of the best information available on the market and
on the preliminary results of 2021 announced; (ii) Abu Dhabi
Oil Refining Co (TAKREER) for €362 million relating to the
loss of the year mainly due to the recognition of write-
downs of plants due to lower profitability prospects and
decommissioning provisions due to the closure of some
production lines.
Share of losses of equity-accounted investments included a
loss of €78 million accounted at the joint venture Cardón IV
SA (Eni’s interest 50%) which is operating the Perla gas field
in Venezuela, affected by the slowdown in the gas supplies to
the buyer PDVSA due to a deteriorated operating environment
and credit losses. The residual value of €51 million of the
investment in the PetroJunín project was canceled due to the
lack of profitability prospects of the project.
Deduction for dividends related for €561 million to Vår
Energi AS.
Eni Annual Report 2021
Net carrying amount related to the following companies:
(€ million)
Investments in unconsolidated entities controlled by Eni
Eni BTC Ltd
Other
Joint ventures
Vår Energi AS
Mozambique Rovuma Venture SpA
Cardón IV SA
Doggerbank Offshore Wind Farm Project 1 Holdco Ltd
Doggerbank Offshore Wind Farm Project 2 Holdco Ltd
Saipem SpA
Lotte Versalis Elastomers Co Ltd
Società Oleodotti Meridionali - SOM SpA
PetroJunín SA
Unión Fenosa Gas SA
Gas Distribution Company of Thessaloniki - Thessaly SA
Other
Associates
Abu Dhabi Oil Refining Co (Takreer)
Angola LNG Ltd
Coral FLNG SA
Novis Renewables Holdings LLC
United Gas Derivatives Co
Bluebell Solar Class A Holdings II LLC
ADNOC Global Trading Ltd
Finproject SpA
Other
257
December 31, 2021
December 31, 2020
Net carrying
amount
% of the
investment
Net carrying
amount
% of the
investment
2
42
44
645
355
279
246
238
137
54
27
76
2,057
2,151
1,084
156
75
75
71
42
132
3,786
5,887
100.00
69.85
35.71
50.00
20.00
20.00
31.20
50.00
70.00
40.00
20.00
13.60
25.00
49.00
33.33
99.00
20.00
24
56
80
1,144
199
908
51
32
50
242
140
66
2,832
2,335
1,039
138
65
58
73
129
3,837
6,749
100.00
69.85
50.00
31.08
50.00
70.00
40.00
50.00
49.00
20.00
13.60
25.00
49.00
33.33
20.00
40.00
The interest held in Mozambique Rovuma Venture SpA,
previously accounted for as a joint operation, was reclassified
as joint venture. More information is disclosed in note 4 -
IFRSs not yet adopted - Change in the classification of the joint
arrangement Mozambique Rovuma Venture SpA.
The results of equity-accounted investments by segment are
disclosed in note 35 - Segment information and information
by geographical area.
The carrying amounts of equity-accounted investments
included differences between the purchase price of acquired
interests and their underlying book value of net assets
amounting to €487 million mainly relating to Doggerbank
Offshore Wind Farm Project 1 Holdco Ltd and Doggerbank
Offshore Wind Farm Project 2 Holdco Ltd for €483 million.
Such surplus was driven by the long-term profitability outlook
of the acquired company at the time of the acquisition.
As of December 31, 2021, the market value of the investments
listed in regulated stock markets was as follows:
Number of shares held
% of the investment
Share price (€)
Market value (€ million)
Book value (€ million)
Additional information is included in note 37 - Other information about investments.
Saipem SpA
308,767,968
31.20
1.845
570
137
Management report | Consolidated financial statements | Annex
258
OTHER INVESTMENTS
(€ million)
Carrying amount - beginning of the year
Additions and subscriptions
Change in the fair value with effect to OCI
Divestments and reimbursements
Currency translation differences
Other changes
Carrying amount - end of the year
2021
957
175
105
57
1,294
2020
929
8
24
(12)
(61)
69
957
The fair value of the main non-controlling interests in non-listed
investees on regulated markets, classified within level 3 of the
fair value hierarchy, was estimated based on a methodology
that combines future expected earnings and the sum-of-the-
parts methodology (so-called residual
income approach)
and takes into account, inter alia, the following inputs: (i)
expected net profits, as a gauge of the future profitability of the
investees, derived from the business plans, but adjusted, where
appropriate, to include the assumptions that market participants
would incorporate; (ii) the cost of capital, adjusted to include the
risk premium of the specific country in which each investee
operates. A stress test based on a 1% change in the cost of
capital considered in the valuation did not produce significant
changes at the fair value valuation.
Acquisitions and subscriptions concerned the payment of
advances for the purchase of investments for €120 million.
The fair value measurement with effect to OCI referred for €106
million to Novamont SpA.
Dividend income from these investments is disclosed in note 32
- Income (expense) from investments.
The investment book value as of December 31, 2021 primarily
related to Nigeria LNG Ltd for €637 million (€579 million at
December 31, 2020), Saudi European Petrochemical Co “IBN
ZAHR” for €124 million (€115 million at December 31, 2020)
and Novamont SpA for €183 million (€77 million at December
31, 2020).
17 OTHER FINANCIAL ASSETS
(€ million)
Long-term financing receivables held for operating purposes
Short-term financing receivables held for operating purposes
Financing receivables held for non-operating purposes
Securities held for operating purposes
Changes in allowance for doubtful accounts were as follows:
(€ million)
Carrying amount at the beginning of the year
Additions
Deductions
Currency translation differences
Other changes
Carrying amount at the end of the year
December 31, 2021
December 31, 2020
Current
Non-current
Current
Non-current
17
39
56
4,252
4,308
4,308
1,832
1,832
1,832
53
1,885
29
22
51
203
254
254
953
953
953
55
1,008
2021
2020
352
41
(15)
25
403
379
7
(7)
(26)
(1)
352
Eni Annual Report 2021
259
Financing receivables held for operating purposes related
principally to funds provided to joint ventures and associates
in the Exploration & Production segment (€1,763 million) to
execute capital projects of interest to Eni. These receivables
are long-term interests in the initiatives funded. The main
exposure is towards: (i) the joint venture Mozambique Rovuma
Venture SpA for €1,008 million; (ii) Coral FLNG SA for €383
million (€288 million at December 31, 2020); (iii) Cardón IV
SA (Eni’s interest 50%), the joint venture which is currently
operating the Perla offshore gas field in Venezuela, for €199
million (€383 million at December 31, 2020).
Financing receivables held for operating purposes due beyond
five years amounted to €399 million (€771 million at December
31, 2020).
The fair value of non-current financing receivables held for
operating purposes of €1,832 million has been estimated
based on the present value of expected future cash flows
discounted at rates ranging from -0.3% to 1.7% (-0.5% and
1.4% at December 31, 2020).
In addition to the expected credit loss model, the recoverability
of the financial loan granted to the joint venture Cardón IV
SA was assessed on the basis of the recoverability of the
investment made by the JV for the development of the Perla
field corresponding to the future cash flows of the project
adjusted to price possible difficulties in converting future gas
sales into cash, essentially assuming a deferral in the timing of
revenues collection.
The recoverability of other long-term financial assets was
assessed by considering the expected probability default in the
next twelve months only, as the creditworthiness suffered no
significant deterioration in the reporting period.
Financing receivables held for non-operating purposes related
for €4,233 million (€203 million at December 31, 2020)
restricted deposits in escrow to guarantee transactions on
derivative contracts mainly referred to Global Gas & LNG
Portfolio segment and for €19 million bank deposits with the
purpose to invest cash surpluses.
Financing receivables were denominated in euro and U.S.
dollar for €3,729 million and €1,980 million, respectively.
Securities held for operating purposes related to listed bonds
issued by sovereign states.
Securities for €20 million (same amount at December 31, 2020)
were pledged as guarantee of the deposit for gas cylinders as
provided for by the Italian law.
The following table analyses securities per issuing entity:
t
s
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c
d
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m
A
)
n
o
l
i
m
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(
24
16
11
2
53
e
u
l
a
v
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i
a
n
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o
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)
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o
i
i
m
€
(
24
16
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2
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e
u
l
a
V
r
i
a
F
)
n
o
i
i
m
€
(
24
16
11
2
53
e
t
a
r
l
i
a
n
m
o
N
n
r
u
t
e
r
f
o
%
e
t
a
d
y
t
i
r
u
t
a
M
’
s
y
d
o
o
M
-
g
n
i
t
a
R
P
&
S
-
g
n
i
t
a
R
from 0.0 to 1.75
from 2022 to 2031
Baa3
BBB
from 0.0 to 0.20
from 2023 to 2025
from Aa3 to Baa1
from AA to A
from 0.22 to 0.43
from 2022 to 2025
1.10
2022
Baa3
Baa2
BBB
BBB
Sovereign states
Fixed rate bonds
Italy
Others (*)
Floating rate bonds
Italy
Others
Total sovereign states
(*) Amounts included herein are lower than €10 million.
All securities have maturity within five years.
The fair value of securities was derived from quoted market
prices.
Receivables with related parties are described in note 36 -
Transactions with related parties.
Management report | Consolidated financial statements | Annex
260
18 TRADE AND OTHER PAYABLES
(€ million)
Trade payables
Down payments and advances from joint ventures in exploration & production activities
Payables for purchase of non-current assets
Payables due to partners in exploration & production activities
Other payables
December 31, 2021
December 31, 2020
16,795
552
1,732
1,188
1,453
21,720
8,679
417
1,393
1,120
1,327
12,936
The increase in trade payables of €8,116 million refers to Global
Gas & LNG Portfolio segment for €6,626 million and to Refining
& Marketing and Chemical segment for €1,220 million.
Other payables included: (i) payroll payables for €328 million
(€255 million at December 31, 2020); (ii) the amounts still due
to the triggering of the take-or-pay clause of the long-term
supply contracts for €185 million (€376 million at December
31, 2020); (iii) payables for social security contributions for
€112 million (€92 million at December 31, 2020).
Trade and other payables were denominated in euro for
€14,250 million and in U.S. dollar for €5,864 million.
Because of the short-term maturity and conditions of
remuneration of trade payables, the fair values approximated
the carrying amounts.
Trade and other payables due to related parties are described
in note 36 - Transactions with related parties.
19 FINANCE DEBTS
(€ million)
Banks
Ordinary bonds
Convertible bonds
Sustainability-Linked Bond
Commercial papers
Other financial institutions
t
b
e
d
m
r
e
t
-
t
r
o
h
S
362
836
1,101
December 31, 2021
December 31, 2020
t
b
e
d
m
r
e
t
-
g
n
o
l
f
o
n
o
i
t
r
o
p
t
n
e
r
r
u
C
347
913
399
2
m
r
e
t
-
g
n
o
L
t
b
e
d
l
a
t
o
T
t
b
e
d
m
r
e
t
-
t
r
o
h
S
4,650
5,359
337
t
b
e
d
m
r
e
t
-
g
n
o
l
f
o
n
o
i
t
r
o
p
t
n
e
r
r
u
C
759
m
r
e
t
-
g
n
o
L
t
b
e
d
3,193
18,049
18,962
1,140
18,280
996
399
998
836
396
2,233
312
10
26
120
19
1,240
l
a
t
o
T
4,289
19,420
396
2,233
348
2,299
1,781
23,714
27,794
2,882
1,909
21,895
26,686
Finance debts increased by €1,108 million is disclosed in table
“Changes in liabilities arising from financing activities” detailed
at the end of this paragraph.
Commercial papers were issued by the Group’s financial
subsidiaries.
As of December 31, 2021,
include
sustainability-linked financial contracts with leading banking
institutions which provide for an adjustment mechanism
of the funding cost linked to the achievement of certain
sustainability targets for €1,300 million (this amount does
not consider the undrawn committed borrowing facilities as
of December 31, 2021).
finance debts
Eni entered into long-term borrowing facilities with the
European Investment Bank. These borrowing facilities are
subject to the retention of a minimum level of credit rating.
According to the agreements, should the Company lose the
minimum credit rating, new guarantees could be required
to be agreed upon with the European Investment Bank. At
December 31, 2021, debts subjected to restrictive covenants
amounted to €899 million (€1,051 million at December 31,
2020). Eni was in compliance with those covenants.
Ordinary bonds consisted of bonds issued within the Euro
Medium Term Notes Program for a total of €15,542 million and
other bonds for a total of €3,420 million.
Eni Annual Report 2021
The following table provides a breakdown of ordinary bonds by issuing entity, maturity date, interest rate and currency as of
December 31, 2021:
261
(€ million)
Issuing entity
Euro Medium Term Notes
Eni SpA
Eni SpA
Eni SpA
Eni SpA
Eni SpA
Eni SpA
Eni SpA
Eni SpA
Eni SpA
Eni SpA
Eni SpA
Eni SpA
Eni SpA
Eni SpA
Eni SpA
Eni Finance International SA
Eni Finance International SA
Other bonds
Eni SpA
Eni SpA
Eni SpA
Eni SpA
Eni USA Inc
CEF3 Wind Energy SpA
d
n
o
b
n
o
t
n
u
o
c
s
D
i
d
e
u
r
c
c
a
d
n
a
e
u
s
s
i
e
s
n
e
p
x
e
t
n
u
o
m
A
y
c
n
e
r
r
u
C
l
a
t
o
T
y
t
i
r
u
t
a
M
%
e
t
a
R
from
to
from
to
1,000
1,200
1,000
1,000
1,000
1,000
1,000
900
800
750
750
750
700
650
600
1,545
795
29
15
13
10
10
3
1
(1)
1
11
7
(4)
3
4
(3)
(4)
7
1,029
1,215
1,013
1,010
1,010
1,003
1,001
899
801
761
757
746
703
654
597
1,541
802
15,440
102
15,542
883
883
883
309
353
99
3,410
18,850
7
4
1
(2)
10
890
887
883
310
353
97
3,420
112
18,962
EUR
EUR
EUR
EUR
EUR
EUR
EUR
EUR
EUR
EUR
EUR
EUR
EUR
EUR
EUR
USD
EUR
USD
USD
USD
USD
USD
EUR
2029
2025
2023
2026
2031
2030
2026
2024
2028
2024
2027
2034
2022
2025
2028
2027
2043
2023
2028
2029
2040
2027
2025
3.625
3.750
3.250
1.500
2.000
0.625
1.250
0.625
1.625
1.750
1.500
1.000
0.750
1.000
1.125
variable
1.275
5.441
4.000
4.750
4.250
5.700
7.300
2.010
2026
2025
As of December 31, 2021, ordinary bonds maturing within 18
months amounted to €703 million. During 2021, Eni did not
issue new ordinary bonds.
The following table provides a breakdown of convertible bonds
issued by Eni SpA as of December 31, 2021:
(€ million)
Eni SpA
d
n
o
b
n
o
t
n
u
o
c
s
D
i
d
e
u
r
c
c
a
d
n
a
e
u
s
s
i
e
s
n
e
p
x
e
t
n
u
o
m
A
400
(1)
y
c
n
e
r
r
u
C
y
t
i
r
u
t
a
M
%
e
t
a
R
EUR
2022
0.000
l
a
t
o
T
399
Management report | Consolidated financial statements | Annex
262
This is a non-dilutive equity-linked bond, which provides for a
redemption value linked to the market price of Eni’s shares. The
bondholders can exercise their conversion rights at certain expiry
dates and/or in the presence of certain events, while the bonds will
be cash-settled. Accordingly, to hedge its exposure, Eni purchased
cash-settled call options relating to Eni shares that will be settled
on a net cash basis. The bond conversion price is equal €17.62 and
includes a 35% premium with respect to the Eni’s share reference
price at the date of issuance. The convertible bond is measured at
amortized cost. The conversion option, embedded in the financial
instrument issued, and the call option on Eni’s shares acquired
are valued at fair value with effects recognized through profit and
loss. The bond expires within the next 12 months.
As part of the Euro Medium Term Notes program, during
2021 Eni issued a sustainability-linked bond for a nominal
amount of €1 billion linked to the achievement of the following
sustainability targets: (i) Net Carbon Footprint upstream (GHG
emission Scope 1 and 2) equal to or lower than 7.4 million
tons of CO2 equivalent by 2024; (ii) renewable energy installed
capacity equal to or greater than 5 GW by 2025. If one of the
targets is not achieved, a step-up mechanism will be applied,
increasing the interest rate.
Information relating to the sustainability-linked bond is as
follows:
(€ million)
Eni SpA
d
n
o
b
n
o
t
n
u
o
c
s
D
i
d
e
u
r
c
c
a
d
n
a
e
u
s
s
i
e
s
n
e
p
x
e
t
n
u
o
m
A
1,000
(2)
y
c
n
e
r
r
u
C
y
t
i
r
u
t
a
M
%
e
t
a
R
EUR
2028
0.375
l
a
t
o
T
998
Eni has in place a program for the issuance of Euro Medium
Term Notes up to €20 billion, of which €16.4 billion were drawn
as of December 31, 2021.
The following table provides a breakdown by currency of finance
debt and the related weighted average interest rates:
December 31, 2021
December 31, 2020
t
b
e
d
m
r
e
t
-
t
r
o
h
S
)
n
o
i
l
l
i
m
€
(
1,356
928
15
2,299
e
t
a
r
e
g
a
r
e
v
A
)
%
(
0.2
(0.3)
n
o
i
t
r
o
p
t
n
e
r
r
u
c
d
n
a
t
b
e
d
m
r
e
t
-
g
n
o
l
f
o
t
b
e
d
m
r
e
t
-
g
n
o
L
)
n
o
i
l
l
i
m
€
(
20,399
5,096
25,495
e
t
a
r
e
g
a
r
e
v
A
)
%
(
1.5
3.8
t
b
e
d
m
r
e
t
-
t
r
o
h
S
)
n
o
i
l
l
i
m
€
(
1,004
1,870
8
2,882
e
t
a
r
e
g
a
r
e
v
A
)
%
(
1.1
(0.5)
n
o
i
t
r
o
p
t
n
e
r
r
u
c
d
n
a
t
b
e
d
m
r
e
t
-
g
n
o
l
f
o
t
b
e
d
m
r
e
t
-
g
n
o
L
)
n
o
i
l
l
i
m
€
(
19,142
4,522
140
23,804
e
t
a
r
e
g
a
r
e
v
A
)
%
(
1.7
4.6
4.3
Euro
U.S. dollar
Other currencies
As of December 31, 2021, Eni retained undrawn uncommitted
short-term borrowing facilities amounting to €6,207 million
(€7,183 million at December 31, 2020) and undrawn committed
borrowing facilities of €2,835 million, of which €2,820 million
due beyond 12 months (€5,295 million at December 31,
2020, of which €4,750 million due beyond 12 months). Those
facilities bore interest rates reflecting prevailing conditions
in the marketplace. As of December 31, 2021, committed
borrowing facilities, used and unused, include sustainability-
linked contracts for €4,850 million. Borrowing facilities were
used to fulfill the obligations to maintain an adequate amount
of financial deposits (margin calls) to guarantee the settlement
of derivative transactions on commodities in relation to the
material increases in the spot and forward prices of natural
gas and electricity registered in December 2021.
As of December 31, 2021, Eni was in compliance with
covenants and other contractual provisions in relation to
borrowing facilities.
Eni Annual Report 2021
263
Fair value of long-term debt, including the current portion of long-term debt is described below:
(€ million)
Ordinary bonds and Sustainability-Linked Bond
Convertible bonds
Banks
Other financial institutions
December 31, 2021
December 31, 2020
23,070
513
5,029
138
28,750
22,429
497
4,008
36
26,970
Fair value of finance debts was calculated by discounting the
expected future cash flows at discount rates ranging from
-0.3% to 1.7% (-0.5% and 1.4% at December 31, 2020).
Because of the short-term maturity and conditions of
remuneration of short-term debts, the fair value approximated
the carrying amount.
CHANGES IN LIABILITIES ARISING FROM FINANCING ACTIVITIES
(€ million)
Carrying amount at December 31, 2020
Cash flows
Currency translation differences
Changes in the scope of consolidation
Other non-monetary changes
Carrying amount at December 31, 2021
Carrying amount at December 31, 2019
Cash flows
Currency translation differences
Changes in the scope of consolidation
Other non-monetary changes
Carrying amount at December 31, 2020
t
b
e
d
m
r
e
t
-
g
n
o
L
t
b
e
d
m
r
e
t
-
g
n
o
l
t
n
e
r
r
u
c
d
n
a
f
o
n
o
i
t
r
o
p
23,804
666
255
545
225
25,495
22,066
2,178
(348)
64
(156)
t
b
e
d
m
r
e
t
-
t
r
o
h
S
2,882
(910)
153
160
14
2,299
2,452
937
(528)
22
(1)
23,804
2,882
f
o
n
o
i
t
r
o
p
t
n
e
r
r
u
c
e
s
a
e
l
m
r
e
t
-
g
n
o
l
d
n
a
m
r
e
t
-
g
n
o
L
s
i
t
e
i
l
i
b
a
i
l
5,018
(939)
303
103
852
5,337
5,648
(869)
(333)
4
568
5,018
l
a
t
o
T
31,704
(1,183)
711
808
1,091
33,131
30,166
2,246
(1,209)
90
411
31,704
Changes in the scope of consolidation referred to the Plenitude
business line for €474 million and to the Refining & Marketing
business line for €213 million.
Other non-monetary changes include €1,102 million of lease
liabilities assumptions (€808 million at December 31, 2020).
Lease liabilities are described in note 13 - Right-of-use assets
and lease liabilities.
Transactions with related parties are described in note 36 -
Transactions with related parties.
Management report | Consolidated financial statements | Annex
264
20 INFORMATION ON NET BORROWINGS
The analysis of net borrowings, as defined in the “Financial Review”, was as follows:
(€ million)
A. Cash
B. Cash equivalents
C. Other current financial assets
D Liquidity (A+B+C)
E. Current financial debt
F. Current portion of non-current financial debt
G. Current financial indebtedness (E+F)
H. Net current financial indebtedness (G-D)
I. Non-current financial debt
J. Debt instruments
K. Non‐current trade and other payables
L. Non-current financial indebtedness (I+J+K)
M. Total financial indebtedness (H+L)
December 31, 2021
December 31, 2020
2,758
5,496
10,553
18,807
3,613
1,415
5,028
(13,779)
9,058
19,045
28,103
14,324
2,500
6,913
5,705
15,118
4,022
1,618
5,640
(9,478)
7,388
18,676
26,064
16,586
Cash and cash equivalent include approximately €115 million
subject to foreclosure measures and payment guarantees.
The increase in other current financial assets was due to the
fulfillment of the obligations towards financial institutions and
commodity-based exchanges to increase financial deposits
to guarantee the settlement of transactions in commodity
derivatives as consequence of the material increase in the spot
and forward prices of natural gas and electricity registered in
Europe in December 2021 (margin call).
Other current financial assets include: (i) financial assets held
for trading, disclosed in note 7 - Financial assets held for trading;
(ii) financing receivables, disclosed in note 17 - Other financial
assets. Finance debts are disclosed in note 19 - Finance debts.
Current portion of non-current financial debt and non-current
financial debt include lease liabilities of €948 million and
€4,389 million (€849 million and €4,169 million at December
31, 2020, respectively) of which €1,684 million (€1,652 million
at December 31, 2020) related to the share of joint operators
in upstream projects operated by Eni which will be recovered
through a partner cash-call billing process. More information
on lease liabilities is reported in note 13 - Right-of-use assets
and lease liabilities.
21 PROVISIONS
(€ million)
t
n
e
m
n
o
d
n
a
b
a
,
n
o
i
t
a
r
o
t
s
e
r
e
t
i
s
r
o
f
s
n
o
s
i
v
o
r
P
i
s
t
c
e
o
r
p
j
l
i
a
c
o
s
d
n
a
l
a
t
n
e
m
n
o
r
i
v
n
E
s
n
o
s
i
i
v
o
r
p
Carrying amount at December 31, 2020
9,362
2,263
New or increased provisions
Initial recognition and changes in estimates
Accretion discount
Reversal of utilized provisions
Reversal of unutilized provisions
Currency translation differences
Other changes
289
(9)
(313)
(10)
2
(16)
195
153
(469)
445
(65)
Carrying amount at December 31, 2021
9,621
2,206
s
n
o
i
t
a
g
i
t
i
l
r
o
f
s
n
o
s
i
i
v
o
r
P
s
e
x
a
t
e
m
o
c
n
i
n
a
h
t
r
e
h
t
o
s
e
x
a
t
r
o
f
s
n
o
s
i
i
v
o
r
P
d
n
a
s
t
n
e
m
t
s
u
d
a
s
s
o
L
j
s
n
o
s
i
i
v
o
r
p
l
a
i
r
a
u
t
c
a
e
c
n
a
r
u
s
n
i
s
’
i
n
E
r
o
f
s
e
i
n
a
p
m
o
c
385
234
170
34
(90)
(72)
21
(26)
452
(9)
(8)
8
16
211
258
102
(63)
(2)
295
n
o
s
e
s
s
o
l
r
o
f
s
n
o
s
i
i
v
o
r
P
s
t
n
e
m
t
s
e
v
n
i
198
15
(16)
3
(5)
195
L
I
O
r
o
f
s
n
o
s
i
i
v
o
r
P
r
e
v
o
c
e
c
n
a
r
u
s
n
i
95
2
(4)
1
(1)
93
s
e
v
i
t
n
e
c
n
i
y
c
n
a
d
n
u
d
e
r
r
o
f
s
n
o
s
i
i
v
o
r
P
53
1
(3)
(36)
r
e
h
t
O
654
219
l
a
t
o
T
13,438
896
195
144
(308)
(1,255)
(45)
8
(23)
(191)
488
(122)
15
505
13,593
Provisions for site restoration, abandonment and social
projects include the present value of the estimated costs that
the Company expects to incur for dismantling oil and natural
gas production facilities at the end of the producing lives of
fields, well-plugging, site clean-up and restoration for €8,580
million. Initial recognitions and changes in estimates include
an increase in the asset retirement cost of the tangible assets
in the Exploration & Production sector, mainly due to a cost
Eni Annual Report 2021
265
revision. The provision also includes the estimate of the costs
for social projects to be incurred following the commitments
between Eni SpA and the Basilicata region in relation to the
oil development program in the Val d’Agri concession area
(€134 million). The unwinding of discount recognized through
profit and loss for €153 million was determined based on
discount rates ranging from -0.4% to 3.8% (from -0.2% to 3.7%
at December 31, 2020). Main expenditures associated with
decommissioning operations are expected to be incurred over
a fifty-year period.
Provisions for environmental risks included the estimated
costs for environmental clean-up and remediation of soil and
groundwater in areas owned or under concession where the
Group performed in the past industrial operations that were
progressively divested, shut down, dismantled or restructured.
The provision was accrued because at the balance sheet date
there is a legal or constructive obligation for Eni to carry out
environmental clean-up and remediation and the expected
costs can be estimated reliably. The provision included the
expected charges associated with strict liability related to
obligations of cleaning up and remediating polluted areas
that met the parameters set by the law at the time when the
pollution occurred but presently are no more in compliance
with current environmental laws and regulations, or because
Eni assumed the liability borne by other operators when the
Company acquired or otherwise took over site operations.
Those environmental provisions are recognized when an
environmental project is approved by or filed with the relevant
administrative authorities or a constructive obligation has
arisen whereby the Company commits itself to performing
certain cleaning-up and restoration projects and a reliable cost
estimation is available. At December 31, 2021, environmental
provision primarily related to Eni Rewind SpA for €1,532 million
and to the Refining & Marketing business line for €376 million.
Litigation provisions comprised expected liabilities associated
with legal proceedings and other matters arising from
contractual claims, including arbitrations, fines and penalties
due to antitrust proceedings and administrative matters.
These provisions represent the Company’s best estimate of
the expected and probable liabilities associated with ongoing
litigation and related to the Exploration & Production segment
for €258 million. Reversals of utlized provisions related for
€61 million to the Exploration & Production segment in
relation to the settlement of contractual disputes.
Provisions for uncertain taxes matters related to the estimated
losses that the Company expects to incur to settle tax litigations
and tax claims pending with tax authorities in relation to
uncertainties in applying rules in force were in respect of the
Exploration & Production segment for €186 million.
Loss adjustments and actuarial provisions of Eni’s insurance
company Eni Insurance DAC represented the estimated
liabilities accrued on the basis for third party claims. Against
such liability was recorded receivables of €94 million recognized
towards insurance companies for reinsurance contracts.
Provisions for losses on investments included provisions
relating to investments whose loss exceeds the equity and
primarily related to Industria Siciliana Acido Fosforico - ISAF -
SpA (in liquidation) for €144 million.
Provisions for the OIL mutual insurance scheme included
insurance premiums which will be charged to Eni in the next
five years by the mutual insurance company OIL Insurance Ltd
in which Eni partipates together with other oil companies.
Provisions for redundancy incentives were recognized mainly
due to a restructuring program involving the Italian personnel
related to past reporting periods.
22 PROVISIONS FOR EMPLOYEE BENEFITS
(€ million)
Italian defined benefit plans
Foreign defined benefit plans
FISDE, foreign medical plans and other
Defined benefit plans
Other benefit plans
Provision for employee benefits
December 31, 2021
December 31, 2020
227
129
162
518
301
819
258
493
182
933
268
1,201
The liability relating to Eni’s commitment to cover the healthcare
costs of personnel is determined based on the contributions
paid by the Company.
Other employee benefit plans related to deferred monetary
incentive plans for €124 million, contratti di espansione (agreed
redundancy plans for workers) for €69 million, isopensione
plans (a post retirement benefit plan applicable to a specific
category of employees) of Eni gas e luce SpA Società Benefit
for €66 million, jubilee awards for €29 million and other long-
term plans for €13 million.
Management report | Consolidated financial statements | Annex 266
Present value of employee benefits, estimated by applying actuarial techniques, consisted of the following:
2021
2020
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258
1,140
182
1,580
268
1,848
269
1,044
177
1,490
278
1,768
1
1
16
24
(118)
(1)
(3)
3
1
(6)
(4)
20
26
49
69
26
(124)
(11)
(135)
2
5
23
27
48
(8)
(1)
(9)
(3)
(10)
(1)
(111)
3
(109)
2
(107)
9
71
2
(4)
(5)
(7)
(12)
(19)
(1)
(13)
1
1
107
107
1
1
1
1
(2)
1
1
(36)
(39)
(8)
(83)
(56)
(139)
(20)
(33)
3
(263)
(10)
(270)
(56)
(326)
2
32
3
2
13
2
13
(2)
(9)
(4)
26
31
66
(11)
93
(16)
(2)
1
1
50
1
4
2
5
(3)
20
76
32
70
(9)
98
(19)
18
1
1
(62)
(63)
(125)
30
(22)
8
(€ million)
Present value of benefit liabilities
at beginning of year
Current service cost
Interest cost
Remeasurements:
- actuarial (gains) losses due to changes
in demographic assumptions
- actuarial (gains) losses due to changes
in financial assumptions
- experience (gains) losses
Past service cost and (gain) loss
on settlements
Plan contributions:
- employee contributions
Benefits paid
Currency translation differences and other
changes
Present value of benefit liabilities at end
of year (a)
227
Plan assets at beginning of year
Interest income
Return on plan assets
Past service cost and (gains) losses
settlements
Plan contributions:
- employee contributions
- employer contributions
Benefits paid
Currency translation differences and other
changes
Plan assets at end of year (b)
Asset ceiling at beginning of year
Change in asset ceiling
Asset ceiling at end of year (c)
761
648
12
(5)
15
1
14
(28)
(9)
633
1
1
162
1,150
301
1,451
258
1,140
182
1,580
268
1,848
648
12
(5)
15
1
14
(28)
(9)
633
1
1
648
12
(5)
15
1
14
(28)
(9)
633
1
1
632
15
51
(3)
15
1
14
(21)
(41)
648
1
1
632
15
51
(3)
15
1
14
(21)
(41)
648
1
1
632
15
51
(3)
15
1
14
(21)
(41)
648
1
1
Net liability recognized at end of year (a-b+c)
227
129
162
518
301
819
258
493
182
933
268
1,201
Employee benefit plans included the actuarial liability, net of
plan assets, attributable to partners operating in exploration
and production activities of €1 million (€268 million at
December 31, 2020). Eni recorded a receivable for an
amount equivalent to such liability.
The decrease in the net liability of €267 million is essentially
due to the recalculation of the actuarial liability with new
parameters.
Eni Annual Report 2021
Costs charged to the profit and loss account, valued using actuarial assumptions, consisted of the following:
(€ million)
2021
Current service cost
Past service cost and (gains) losses on settlements
Interest cost (income), net:
- interest cost on liabilities
- interest income on plan assets
Total interest cost (income), net
- of which recognized in "Payroll and related cost"
- of which recognized in "Financial income (expense)"
Remeasurements for long-term plans
Total
- of which recognized in "Payroll and related cost"
- of which recognized in "Financial income (expense)"
2020
Current service cost
Past service cost and (gains) losses on settlements
Interest cost (income), net:
- interest cost on liabilities
- interest income on plan assets
Total interest cost (income), net
- of which recognized in "Payroll and related cost"
- of which recognized in "Financial income (expense)"
Remeasurements for long-term plans
Total
- of which recognized in "Payroll and related cost"
- of which recognized in "Financial income (expense)"
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1
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2
2
2
2
2
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fi
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16
24
(12)
12
12
28
16
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23
1
27
(15)
12
12
36
24
12
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14
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20
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1
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(15)
16
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43
27
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107
(11)
145
145
50
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1
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1
4
75
75
Costs of defined benefit plans recognized in other comprehensive income consisted of the following:
(€ million)
Remeasurements
Actuarial (gains)/losses due to changes in demographic assumptions
Actuarial (gains)/losses due to changes in financial assumptions
Experience (gains) losses
Return on plan assets
Change in asset ceiling
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(1)
(1)
2
2021
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(3)
(111)
(4)
5
(4)
(8)
3
(109)
(5)
(7)
5
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I
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fi
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(3)
9
(1)
(113)
(6)
(119)
5
2020
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fi
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d
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F
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(10)
71
(13)
(51)
1
(2)
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d
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2
13
(2)
13
267
l
a
t
o
T
69
107
26
(12)
14
14
(11)
179
165
14
76
21
32
(15)
17
1
16
4
118
102
16
l
a
t
o
T
(11)
93
(16)
(51)
1
16
Management report | Consolidated financial statements | Annex
268
Plan assets consisted of the following:
(€ million)
December 31, 2021
Plan assets with a quoted market price
Plan assets without a quoted market price
December 31, 2020
Plan assets with a quoted market price
Plan assets without a quoted market price
h
s
a
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d
n
a
h
s
a
C
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s
t
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a
v
i
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95
95
117
117
s
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s
y
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43
43
38
38
s
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i
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c
e
s
t
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299
299
297
297
e
t
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R
8
8
8
8
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3
3
2
2
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A
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a
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1
1
76
76
23
4
27
20
3
23
r
e
h
t
O
l
a
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157
629
4
157
633
87
645
3
87
648
The main actuarial assumptions used in the measurement of the liabilities at year-end and in the estimate of costs expected for
2022 consisted of the following:
2021
Discount rate
Rate of compensation increase
Rate of price inflation
Life expectations on retirement at age 65
2020
Discount rate
Rate of compensation increase
Rate of price inflation
Life expectations on retirement at age 65
d
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n
fi
e
d
n
a
i
l
a
t
I
l
s
n
a
p
t
fi
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n
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b
1.0
2.8
1.8
0.3
1.8
0.8
d
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fi
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d
n
g
e
r
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F
i
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s
n
a
p
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fi
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n
e
b
i
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g
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r
o
f
,
E
D
S
F
I
s
n
a
p
l
l
i
a
c
d
e
m
r
e
h
t
o
d
n
a
0.3-15.3
1.5-12.5
0.7-13.3
13-25
0.1-14.7
1.3-12.5
0.8-12.2
13-26
1.0
1.8
24
0.3
0.8
24
t
fi
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n
e
b
r
e
h
t
O
s
n
a
p
l
0.0-1.0
1.8
0.0-0.3
0.8
(%)
(%)
(%)
(years)
(%)
(%)
(%)
(years)
The following is an analysis by geographical area related to the main actuarial assumptions used in the valuation of the principal
foreign defined benefit plans:
2021
Discount rate
Rate of compensation increase
Rate of price inflation
Life expectations on retirement at age 65
2020
Discount rate
Rate of compensation increase
Rate of price inflation
Life expectations on retirement at age 65
a
e
r
a
o
r
u
E
0.9-1.2
1.5-3.0
1.5-1.9
21-23
0.4-0.8
1.3-3.0
1.3-1.9
21-22
f
o
t
s
e
R
e
p
o
r
u
E
a
c
i
r
f
A
0.3-1.9
3.0-15.3
2.5-4.0
1.9-12.5
0.7-3.5
3.0-13.3
23-25
13-15
s
a
e
r
a
r
e
h
t
O
6.7
5.0
3.0
0.1-1.4
2.6-14.7
2.5-3.6
2.0-12.5
0.8-3.1
2.6-12.2
23-26
13-17
6.4-9.8
5.0-9.8
3.0-5.0
i
n
g
e
r
o
F
d
e
n
fi
e
d
t
fi
e
n
e
b
s
n
a
p
l
0.3-15.3
1.5-12.5
0.7-13.3
13-25
0.1-14.7
1.3-12.5
0.8-12.2
13-26
(%)
(%)
(%)
(years)
(%)
(%)
(%)
(years)
Eni Annual Report 2021
269
The effects of a possible change in the main actuarial assumptions at the end of the year are listed below:
(€ million)
December 31, 2021
Italian defined benefit plans
Foreign defined benefit plans
FISDE, foreign medical plans and other
Other benefit plans
December 31, 2020
Italian defined benefit plans
Foreign defined benefit plans
FISDE, foreign medical plans and other
Other benefit plans
Discount rate
Rate of price
inflation
Rate of
increases in
pensionable
salaries
Healthcare
cost trend rate
Rate of
increases to
pensions in
payment
0.5%
Increase
0.5%
Decrease
0.5%
Increase
0.5%
Increase
0.5%
Increase
0.5%
Increase
(9)
(49)
(10)
(4)
(10)
(84)
(10)
(3)
9
55
11
1
6
92
7
1
6
34
1
7
47
1
11
25
10
11
28
67
The sensitivity analysis was performed based on the results
for each plan through assessments calculated considering
modified parameters.
The amount of contributions expected to be paid for employee
benefit plans in the next year amounted to €123 million, of
which €40 million related to defined benefit plans.
The following is an analysis by maturity date of the liabilities
for employee benefit plans and their relative weighted average
duration:
(€ million)
December 31, 2021
2022
2023
2024
2025
2026
2027 and thereafter
Weighted average duration
(years)
December 31, 2020
2021
2022
2023
2024
2025
2026 and thereafter
Weighted average duration
(years)
d
e
n
fi
e
d
n
a
i
l
a
t
I
l
s
n
a
p
t
fi
e
n
e
b
16
16
18
20
20
137
9.8
12
13
17
20
21
175
8.2
d
e
n
fi
e
d
n
g
e
r
o
F
i
l
s
n
a
p
t
fi
e
n
e
b
23
24
29
24
25
4
17.6
44
42
50
63
67
227
19.1
i
n
g
e
r
o
f
,
E
D
S
F
I
s
n
a
p
l
l
i
a
c
d
e
m
r
e
h
t
o
d
n
a
9
7
7
7
7
125
13.6
8
7
7
7
7
146
13.7
t
fi
e
n
e
b
r
e
h
t
O
s
n
a
p
l
83
80
69
25
11
33
3.1
71
66
63
16
12
40
2.8
Management report | Consolidated financial statements | Annex
270
23 DEFERRED TAX ASSETS AND LIABILITIES
(€ million)
Deferred tax liabilities before offsetting
Deferred tax assets available for offset
Deferred tax liabilities
Deferred tax assets before offsetting (net of accumulated write-down provisions)
Deferred tax liabilities available for offset
Deferred tax assets
December 31, 2021
December 31, 2020
10,668
(5,833)
4,835
8,546
(5,833)
2,713
8,581
(3,057)
5,524
7,166
(3,057)
4,109
The most significant temporary differences giving rise to net deferred tax assets and liabilities are disclosed below:
(€ million)
Deferred tax liabilities
- Accelerated tax depreciation
- Leasing
- Derivative financial instruments
- Difference between the fair value and the carrying amount of assets acquired
- Site restoration and abandonment (tangible assets)
- Application of the weighted average cost method in evaluation of inventories
- Other
Deferred tax assets, gross
- Carry-forward tax losses
- Site restoration and abandonment (provisions for contingencies)
- Timing differences on depreciation and amortization
- Impairment losses
- Accruals for impairment losses and provisions for contingencies
- Leasing
- Derivative financial instruments
- Over/Under lifting
- Employee benefits
- Unrealized intercompany profits
- Other
Accumulated write-downs of deferred tax assets
Deferred tax assets, net
Carrying amount at
December 31, 2021
Carrying amount at
December 31, 2020
7,346
1,076
916
408
166
87
669
10,668
(7,374)
(2,400)
(2,354)
(1,417)
(1,095)
(1,091)
(343)
(219)
(155)
(71)
(631)
(17,150)
8,604
(8,546)
6,171
1,089
27
415
199
56
624
8,581
(6,983)
(2,211)
(2,206)
(1,213)
(1,371)
(1,113)
(2)
(211)
(213)
(117)
(591)
(16,231)
9,065
(7,166)
The following table summarizes the changes in deferred tax liabilities and assets:
(€ million)
Carrying amount at December 31, 2020
Additions
Deductions
Currency translation differences
Other changes
Carrying amount at December 31, 2021
Carrying amount at December 31, 2019
Additions
Deductions
Currency translation differences
Other changes
Carrying amount at December 31, 2020
Deferred tax
liabilities, gross
Deferred tax
assets, gross
Accumulated
write-downs
of deferred tax assets
Deferred tax assets,
net of impairments
8,581
1,977
(765)
683
192
10,668
9,583
960
(1,326)
(725)
89
8,581
(16,231)
(1,783)
1,804
(682)
(258)
(17,150)
(15,767)
(2,649)
1,357
742
86
(16,231)
9,065
270
(863)
186
(54)
8,604
6,744
2,638
(130)
(192)
5
9,065
(7,166)
(1,513)
941
(496)
(312)
(8,546)
(9,023)
(11)
1,227
550
91
(7,166)
Eni Annual Report 2021 271
Carry-forward tax losses amounted to €27,948 million, of
which €19,515 million can be carried forward indefinitely.
Carry-forward tax losses were €16,260 million and €11,688
million at
Italian subsidiaries and foreign subsidiaries,
respectively. Deferred tax assets gross of accumulated write-
downs recognized on these losses amounted to €3,914 million
and €3,460 million, respectively.
Italian taxation law allows the carry-forward of tax losses
indefinitely. Foreign taxation laws generally allow the carry-
forward of tax losses over a period longer than five years, and
in many cases, indefinitely. A tax rate of 24% was applied to tax
losses of Italian subsidiaries to determine the portion of the
carry-forwards tax losses. The corresponding average rate for
foreign subsidiaries was 29.6%.
Accumulated write-downs of deferred tax assets related to
Italian companies for €6,609 million and non-Italian companies
for €1,995 million.
Taxes are also described in note 33 - Income taxes.
24 DERIVATIVE FINANCIAL INSTRUMENTS AND HEDGE ACCOUNTING
(€ million)
Non-hedging derivatives
Derivatives on exchange rate
- Currency swap
- Interest currency swap
- Outright
Derivatives on interest rate
- Interest rate swap
Derivatives on commodities
- Future
- Over the counter
- Other
Trading derivatives
Derivatives on commodities
- Over the counter
- Future
- Options
Cash flow hedge derivatives
Derivatives on commodities
- Over the counter
- Future
Derivatives on interest rate
- Interest rate swap
Options
- Option embedded in convertible bonds
- other options
Gross amount
Offsetting
Net amount
Of which:
- current
- non-current
December 31, 2021
December 31, 2020
Fair value
asset
Fair value
liability
Level of Fair
value
Fair value
asset
Fair value
liability
Level of
Fair value
113
30
3
146
13
13
603
102
1
706
865
39
7
11
57
43
43
496
121
55
672
772
12,050
6,555
11,939
5,002
18,605
16,941
7
193
200
735
1,672
2,407
3
3
200
2,410
62
62
20,185
(7,159)
13,026
12,911
115
19,670
(7,159)
12,511
12,460
51
2
2
2
2
1
2
2
2
1
2
1
2
3
125
128
4
257
23
23
418
89
5
512
792
1,167
440
4
1,611
209
119
328
328
2
2
2,733
(1,033)
1,700
1,548
152
127
2
7
136
74
74
447
77
524
734
1,451
525
3
1,979
30
8
38
38
2
51
53
2,804
(1,033)
1,771
1,609
162
2
2
2
2
1
2
2
2
1
2
2
1
2
3
Management report | Consolidated financial statements | Annex
272
During 2021, Eni entered into sustainability-linked interest
currency swaps with leading banking institutions which provide
for a cost adjustment mechanism linked to the achievement of
certain sustainability targets. At December 31, 2021, the fair
value of these contracts amounted to €1 million.
Eni is exposed to the market risk, which is the risk that changes
in prices of energy commodities, exchange rates and interest
rates could reduce the expected cash flows or the fair value
of the assets. Eni enters into financial and commodities
derivatives traded on organized markets (like MTF and OTF)
and into commodities derivatives traded over the counter
(swaps, forward, contracts for differences and options on
commodities) to reduce this risk in relation to the underlying
commodities, currencies or interest rates and, to a limited
extent, in compliance with internal authorization thresholds, with
speculative purposes to profit from expected market trends.
Derivatives fair values were estimated based on market quotations
provided by primary info-provider or, alternatively, appropriate
valuation techniques generally adopted in the marketplace.
Fair values of non-hedging derivatives related to derivatives
that did not meet the formal criteria to be designated as
hedges under IFRS.
Fair values of trading derivatives comprised forward sale
contracts of natural gas for physical delivery which were not
entitled to the own use exemption, as well as derivatives for
proprietary trading activities.
Fair values of cash flow hedge derivatives essentially related
to commodity hedges were entered into by the Global Gas
& LNG Portfolio segment. These derivatives were entered
into to hedge variability in future cash flows associated with
highly probable future trade transactions of gas or electricity
or on already contracted trades due to different indexation
mechanisms of supply costs versus selling prices. A similar
scheme applies to exchange rate hedging derivatives. The
existence of a relationship between the hedged item and the
hedging derivative is checked at inception to verify eligibility for
hedge accounting by observing the offset in changes of the fair
values at both the underlying commodity and the derivative.
The hedging relationship is also stress-tested against the level
of credit risk of the counterparty in the derivative transaction.
The hedge ratio is defined consistently with the Company’s risk
management objectives, under a defined risk management
strategy. The hedging relationship is discontinued when it
ceases to meet the qualifying criteria and the risk management
objectives on the basis of which hedge accounting has initially
been applied.
The effects of the measurement at fair value of cash flow
hedge derivatives are given in note 26 - Equity. Information
on hedged risks and hedging policies is disclosed in note 28 -
Guarantees, commitments and risks - Risk factors.
In 2021, the exposure to the exchange rate risk deriving from
securities denominated in U.S. dollars included in the strategic
liquidity portfolio amounting to €2,109 million was hedged by
using, in a fair value hedge relationship, negative exchange
differences for €153 million resulting on a portion of bonds
denominated in U.S. dollars amounting to €2,083 million.
Options embedded in convertible bonds at December 31,
2020, related to equity-linked cash settled. More information is
disclosed in note 19 - Finance debts.
The offsetting of financial derivatives related to Eni Global
Energy Markets.
During 2021, there were no transfers between the different
hierarchy levels of fair value.
Hedging derivative instruments are disclosed below:
(€ million)
Cash flow hedge derivatives
Derivatives on commodity
- Over the counter
- Future
Derivatives on interest rate
- Interest rate swap
December 31, 2021
December 31, 2020
Nominal
amount of the
hedging
instrument
Change in
fair value
(effective
hedge)
Change in
fair value
(ineffective
hedge)
Nominal
amount of the
hedging
instrument
Change in
fair value
(effective
hedge)
Change in
fair value
(ineffective
hedge)
(461)
(364)
(825)
84
84
(2,016)
534
(1,482)
3
3
(46)
(5)
(51)
821
541
1,362
(438)
158
(280)
(1)
(1)
(741)
(1,479)
(51)
1,362
(280)
(1)
Eni Annual Report 2021
273
The breakdown of the underlying asset or liability by type of risk hedged under cash flow hedge is provided below:
(€ million)
Cash flow hedge derivatives
Commodity price risk
- Planned sales
Derivatives on interest rate
- hedged flows
December 31, 2021
December 31, 2020
Change of the
underlying asset used
for the calculation of
hedging ineffectiveness
Reclassifica-
tion
adjustments
Change of the
underlying asset used
for the calculation of
hedging ineffectiveness
CFH reserve
Reclassifica-
tion
adjustments
CFH reserve
86
86
(3)
(3)
83
(1,272)
(1,272)
(215)
(215)
284
284
(7)
(7)
(941)
(941)
3
3
(1,269)
(215)
284
(7)
(941)
More information is reported in note 28 - Guarantees, Commitments and Risks - Financial risks.
EFFECTS RECOGNIZED IN OTHER OPERATING PROFIT (LOSS)
Other operating profit (loss) related to derivative financial instruments on commodity was as follows:
(€ million)
Net income (loss) on cash flow hedging derivatives
Net income (loss) on other derivatives
2021
(51)
954
903
2020
(1)
(765)
(766)
2019
(2)
289
287
Net income (loss) on cash flow hedging derivatives related to
the ineffective portion of the hedging relationship on commodity
derivatives was recognized through profit and loss.
Net income (loss) on other derivatives included the fair value
measurement and settlement of commodity derivatives which
could not be elected for hedge accounting under IFRS because
they related to net exposure to commodity risk and derivatives
for trading purposes and proprietary trading.
EFFECTS RECOGNIZED IN FINANCE INCOME (LOSS)
(€ million)
Derivatives on exchange rate
Derivatives on interest rate
2021
(322)
16
(306)
2020
391
(40)
351
2019
9
(23)
(14)
Net financial income from derivative financial instruments
was recognized in connection with the fair value valuation
of certain derivatives which lacked the formal criteria to be
treated in accordance with hedge accounting under IFRS, as
they were entered into for amounts equal to the net exposure
to exchange rate risk and interest rate risk, and as such, they
cannot be referred to specific trade or financing transactions.
Exchange rate derivatives were entered into in order to
manage exposures to foreign currency exchange rates arising
from the pricing formulas of commodities.
More information is disclosed in note 36 - Transactions with
related parties.
Management report | Consolidated financial statements | Annex
274
25 ASSETS HELD FOR SALE AND LIABILITIES DIRECTLY ASSOCIATED WITH ASSETS HELD FOR SALE
As of December 31, 2021, assets held for sale and directly
associated liabilities of €263 million (€44 million at December 31,
2020) and €124 million, respectively, related to: (i) an agreement
for the sale of the entire Pakistan assets to Prime International
Oil & Gas Company involving the 100% stake of the consolidated
companies Eni AEP Ltd, Eni Pakistan Ltd, Eni Pakistan (M) Ltd
Sàrl and Eni New Energy Pakistan (Private) Ltd. The activities
covered by the agreement include interests in eight development
and production licenses in the Kithar Fold Belt, and the Middle
Indus Basins and four exploration licenses in the Middle Insud
and the Indus Offshore Basins. The carrying amount of assets
held for sale and liabilities directly associated amounted to €114
million (of which current assets for €81 million) and €124 million
(of which current liabilities for €34 million), respectively; (ii) the
sale of the investment Gas Distribution Company of Thessaloniki
- Thessaly SA, operating in the gas distribution business in
Greece for €135 million; (iii) the sale of tangible assets for a total
carrying amount of €14 million.
26 EQUITY
EQUITY ATTRIBUTABLE TO EQUITY HOLDERS OF ENI
(€ million)
Share capital
Retained earnings
Cumulative currency translation differences
Other reserves and equity instruments:
- Perpetual subordinated bonds
- Legal reserve
- Reserve for treasury shares
- Reserve for OCI on cash flow hedging derivatives net of the tax effect
- Reserve for OCI on defined benefit plans net of tax effect
- Reserve for OCI on equity-accounted investments
- Reserve for OCI on other investments valued at fair value
- Other reserves
Treasury shares
Net profit (loss) for the year
December 31, 2021
December 31, 2020
4,005
22,750
6,530
5,000
959
958
(896)
(117)
54
141
190
(958)
5,821
44,437
4,005
34,043
3,895
3,000
959
581
(5)
(158)
85
36
190
(581)
(8,635)
37,415
SHARE CAPITAL
As of December 31, 2021, the parent company’s issued share
capital consisted of €4,005,358,876 (same amount as of
December 31, 2020) represented by 3,605,594,848 ordinary
shares without nominal value (same amount at December 31,
2020).
On May 12, 2021, Eni’s Shareholders’ Meeting declared: (i) to
distribute a dividend of €0.24 per share, with the exclusion of
treasury shares held at the ex-dividend date, in full settlement
of the 2020 dividend of €0.36 per share, of which €0.12 per
share paid as interim dividend. The balance was paid on May
26, 2021, to shareholders on the register on May 24, 2021,
record date on May 25, 2021; (ii) to authorize the Board of
Directors pursuant to and for art. 2357 of the Civil Code to
proceed, within 18 months from the date of the resolution,
with the purchase of a maximum number of shares equal to
7% of the ordinary shares (and 7% of the share capital) of the
Company (without calculating treasury shares already owned),
for a total amount up to €1,600 million. In execution of this
resolution, at December 31, 2021, 34,106,871 shares were
acquired, for a total value of €400 million.
RETAINED EARNINGS
Retained earnings include the interim dividend distribution
effect for 2021 amounting to €1,533 million corresponding to
€0.43 per share, as resolved by the Board of Directors on July
29, 2021, in accordance with article 2433-bis, paragraph 5 of the
Italian Civil Code; the dividend was paid on September 22, 2021.
CUMULATIVE FOREIGN CURRENCY TRANSLATION DIFFERENCES
The cumulative foreign currency translation differences arose
from the translation of financial statements denominated in
currencies other than euro.
Eni Annual Report 2021
275
issued
PERPETUAL SUBORDINATED HYBRID BONDS
In 2021, Eni
two euro-denominated perpetual
subordinated hybrid bonds for an aggregate nominal amount
of €2 billion; issuing costs amounted to €15 million.
The hybrid bonds are governed by English law and are traded
on the regulated market of the Luxembourg Stock Exchange.
As of December 31, 2021, hybrid bonds amounted to €5 billion.
The key characteristics of the two bonds are: (i) an issue of
€1.5 billion perpetual 5.25-year subordinated non-call hybrid
notes with a re-offer price of 99.403% and an annual fixed
coupon of 2.625% until the first reset date of January 13, 2026.
As from such date, unless it has been redeemed in whole on
or before the first reset date, which is the last day for the first
optional redemption, the bond will bear interest per annum
determined according to the relevant 5-year Euro Mid Swap
rate plus an initial spread of 316.7 basis points, increased by
an additional 25 basis points as from January 13, 2031 and
a subsequent increase of additional 75 basis points as from
January 13, 2046; (ii) an issue of €1.5 billion perpetual 9-year
subordinated non-call hybrid notes with a re-offer price of
100% and an annual fixed coupon of 3.375% until the first reset
date of October 13, 2029. As from such date, unless it has been
redeemed in whole on or before the first reset date, which is
the last day for the first optional redemption, the bond will bear
interest per annum determined according to the relevant 5-year
Euro Mid Swap rate plus an initial spread of 364.1 basis points,
increased by additional 25 basis points as from October 13,
2034 and a subsequent increase of additional 75 basis points
as from October 13, 2049; (iii) an issue of €1 billion perpetual
6-year subordinated non-call hybrid notes with a re-offer price
of 100% and an annual fixed coupon of 2.000% until the first
reset date of May 11, 2027. As from such date, unless it has
been redeemed in whole on or before the first reset date, which
is the last day for the first optional redemption, the bond will
bear interest per annum determined according to the relevant
5-year Euro Mid Swap rate plus an initial spread of 220.4 basis
points, increased by additional 25 basis points as from May 11,
2032 and a subsequent increase of additional 75 basis points
as from May 11, 2047; (iv) an issue of €1 billion perpetual
9-year subordinated non-call hybrid notes with a re-offer price
of 99.607% and an annual fixed coupon of 2.750% until the first
reset date of May 11, 2030. As from such date, unless it has
been redeemed in whole on or before the first reset date, which
is the last day for the first optional redemption, the bond will
bear interest per annum determined according to the relevant
5-year Euro Mid Swap rate plus an initial spread of 277.1 basis
points, increased by additional 25 basis points as from May 11,
2035 and a subsequent increase of additional 75 basis points
as from May 11, 2050.
LEGAL RESERVE
This reserve represents earnings restricted from the payment
of dividends pursuant to Article 2430 of the Italian Civil Code.
The legal reserve has reached the maximum amount required
by the Italian Law.
RESERVE FOR TREASURY SHARES
The reserve for treasury shares represents the reserve that
was established in previous reporting periods to repurchase
the Company shares in accordance with resolutions at Eni’s
Shareholders’ Meetings.
RESERVES FOR OTHER COMPREHENSIVE INCOME
(€ million)
Reserve for OCI on cash flow
hedge derivatives
Reserve for OCI on defined benefit
plans
Gross
reserve
Deferred
tax
Net
reserve
Gross
reserve
Deferred tax
liabilities
Net
reserve
Reserve for OCI
on equity
accounted
investments(*)
Reserve for OCI
on investments
valued
at fair value
Reserve as of December 31, 2020
(7)
2
(5)
(205)
47
(158)
Changes of the year
(1,479)
434
(1,045)
Currency translation differences
Reversal to inventories adjustments
Reclassification adjustments
Reserve as of December 31, 2021
Reserve as of December 31, 2019
Changes of the year
Currency translation differences
Reversal to inventories adjustments
Reclassification adjustments
Reserve as of December 31, 2020
2
215
(1,269)
(656)
(280)
(12)
941
(7)
(1)
(62)
373
191
81
3
(273)
2
(465)
(199)
(9)
668
(5)
119
2
(77)
(3)
42
(1)
1
153
(896)
(84)
(33)
(117)
(183)
(16)
(6)
17
25
5
(166)
9
(1)
* Reserve for OCI on equity-accounted investments at December 31, 2021 includes €-4 million relating to defined benefit plans (€-7 million at December 31, 2020).
(205)
47
(158)
85
36
85
(32)
1
54
53
32
36
105
141
12
24
Management report | Consolidated financial statements | Annex
276
OTHER RESERVES
Other reserves related to a reserve of €127 million representing
the increase in equity attributable to Eni associated with a
business combination under common control, whereby the
parent company Eni SpA divested its subsidiaries.
TREASURY SHARES
A total of 65,838,173 of Eni’s ordinary shares (33,045,197 at
December 31, 2020) were held in treasury for a total cost of
€958 million (€581 million at December 31, 2020).
During 2021, 34,106,871 shares were acquired, for a total value
of €400 million, and 1,313,895 treasury shares were assigned
free of charge to Eni executives, following the conlcusion of
the Vesting Period as required by the “Long-Term Monetary
Incentive Plan 2017-2019” approved by Eni’s Shareholders’
Meeting of April 13, 2017.
On May 13, 2021, the Shareholders Meeting approved the Long-
Term Monetary Incentive Plan 2020-2022 and empowered
the Board of Directors to execute the Plan by authorizing it to
dispose up to a maximum of 20 million of treasury shares in
service of the Plan.
DISTRIBUTABLE RESERVES
As of December 31, 2021, equity attributable to Eni included distributable reserves of approximately €34 billion.
RECONCILIATION OF NET PROFIT AND EQUITY ATTRIBUTABLE TO ENI OF THE PARENT COMPANY ENI SPA
TO CONSOLIDATED NET PROFIT AND EQUITY ATTRIBUTABLE TO ENI
(€ million)
As recorded in Eni SpA's Financial Statements
Excess of net equity stated in the separate accounts of consolidated subsidiaries
over the corresponding carrying amounts of the parent company
Consolidation adjustments:
- difference between purchase cost and underlying carrying amounts of net equity
- adjustments to comply with Group accounting policies
- elimination of unrealized intercompany profits
- deferred taxation
Non-controlling interest
As recorded in Consolidated Financial Statements
Net profit (loss)
Shareholders’ equity
2021
7,675
2020
1,607
(3,324)
(10,660)
1,855
(176)
(190)
5,840
(19)
5,821
(6)
264
88
79
(8,628)
(7)
(8,635)
December 31,
2021
December 31,
2020
51,039
(9,910)
153
4,266
(654)
(375)
44,519
(82)
44,437
44,707
(8,839)
193
2,086
(478)
(176)
37,493
(78)
37,415
Eni Annual Report 2021
27 OTHER INFORMATION
SUPPLEMENTAL CASH FLOW INFORMATION
(€ million)
Investment in consolidated subsidiaries and businesses
Current assets
Non-current assets
Net borrowings
Current and non-current liabilities
Net effect of investments
Fair value of investments held before the acquisition of control
Non-controlling interests
Purchase price
Cash and cash equivalents acquired
Consolidated subsidiaries and businesses net of cash and cash equivalent acquired
Disposal of consolidated subsidiaries and businesses
Current assets
Non-current assets
Net borrowings
Current and non-current liabilities
Net effect of disposals
Reclassification of foreign currency translation differences among other items of OCI
Gain (loss) on disposal
Selling price
Cash and cash equivalents sold
Consolidated subsidiaries and businesses net of cash and cash equivalent disposed of before business combination
Business combination Unión Fenosa Gas
Investment in Unión Fenosa Gas sold
Investments and businesses acquired
Current assets
Non-current assets
Net borrowings
Long-term and short-term liabilities
Total investments and businesses acquired
Total net disposals
Cash and cash equivalents acquired
Business combination Unión Fenosa Gas net of cash and cash equivalent acquired
Consolidated subsidiaries and businesses net of cash and cash equivalent disposed of
277
2021
2020
2019
15
193
(64)
(17)
127
(15)
112
(3)
109
262
2,698
(486)
(349)
2,125
(99)
(4)
2,022
(121)
1,901
2
2
2
2
232
370
378
(128)
(420)
200
32
42
74
76
1
12
(6)
7
(2)
5
5
77
188
11
(57)
219
(24)
16
211
(24)
187
187
Investments in 2021 are disclosed in note 5 - Business
Combinations and other significant transactions.
Disposals in 2021 concerned the restructuring of Unión Fenosa
Gas SA following the agreement signed with the authorities of the
Arab Republic of Egypt (ARE) and the Spanish company Naturgy
for the resolution of all pending issues with the Egyptian partners
relating to the joint venture Unión Fenosa Gas which resulted in a
cash adjustment to Eni, included in the divestments.
Investments in 2020 related to the acquisition by Eni gas e luce
SpA Società Benefit of a 70% controlling stake in Evolvere, a
group operating in the business of distributed generation from
renewable sources for €97 million, net of acquired cash of €3
million, and to the acquisition by Eni New Energy SpA of the
whole capital of three companies holding authorization rights
for the construction of three wind projects in Puglia for €12
million. The allocation of the purchase price of both business
combinations is final.
Investments in 2019 concerned: (i) the acquisition of a 60%
stake of SEA SpA, which supplies services and solutions for
energy efficiency in the residential and industrial segments
in Italy; (ii) the acquisition of the residual 32% interest in the
joint operation Petroven Srl, which operates storage facilities
of petroleum products.
Disposals in 2019 concerned the sale of 100% of the stake of
Agip Oil Ecuador BV, which retains a service contract for the
development of the Villano oil field.
Management report | Consolidated financial statements | Annex
278
28 GUARANTEES, COMMITMENTS AND RISKS
GUARANTEES
(€ million)
Consolidated subsidiaries
Unconsolidated subsidiaries
Joint ventures and associates
Others
December 31, 2021
December 31, 2020
6,432
190
3,358
180
10,160
4,758
176
3,800
150
8,884
Guarantees issued on behalf of consolidated subsidiaries primarily
consisted of: (i) guarantees given to third parties relating to bid
bonds and performance bonds for €3,601 million (€3,209 million
at December 31, 2020); (ii) independent guarantee contracts
issued by the Exploration & Production segment primarily in
relation to Oil & Gas activities for €943 million; (iii) independent
guarantee contracts issued to third parties for the purchase
of equity investments for €913 million. At December 31, 2021,
the underlying commitment issued on behalf of consolidated
subsidiaries covered by such guarantees was €6,267 million
(€4,520 million at December 31, 2020).
Guarantees issued on behalf of joint ventures and associates
primarily consisted of: (i) unsecured guarantees and other
guarantees for €1,413 million (€1,533 million at December 31, 2020)
issued towards banks and other lending institutions in relation to
loans and lines of credit received related to guarantees issued
as part of the Coral development project offshore Mozambique
with respect to the financing agreements of the project with
Export Credit Agencies and banks (€1,304 million at December
31, 2020); (ii) guarantees given to third parties relating to bid
bonds and performance bonds for €1,764 million (€1,544 million
at December 31, 2020), of which €1,260 million (€1,079 million
at December 31, 2020) related to guarantees issued towards the
contractors who are building a floating vessel for gas liquefaction
and exportation (FLNG) as part of the Coral development project
offshore Mozambique; (iii) during 2021 the unsecured guarantee
of €499 million as of December 31, 2020, given by Eni SpA on
behalf of the participated Saipem joint venture to Treno Alta
Velocità - TAV SpA (now RFI - Rete Ferroviaria Italiana SpA) for
the proper and timely completion of a project for the construction
of the Milan-Bologna fast track railway by the CEPAV (Consorzio
Eni per l’Alta Velocità) Uno was canceled; (iv) a guarantee issued
in favor of Gulf LNG Energy and Gulf LNG Pipeline and on behalf
of Angola LNG Supply Service Llc (Eni’s interest 13.60%) to cover
contractual commitments of paying re-gasification fees for
€179 million (€165 million at December 31, 2020). At December
31, 2021, the underlying commitment issued on behalf of joint
ventures and associates covered by such guarantees was €1,816
million (€1,898 million at December 31, 2020).
Guarantees issued on behalf of third parties related for €157
million (€145 million at December 31, 2020) to the share of the
guarantee attributable to the State oil Company of Mozambique
ENH, which was assumed by Eni in favor of the consortium
financing the construction of the Coral project FLNG vessel.
At December 31, 2021, the underlying commitment issued on
behalf of third parties covered by such guarantees was €124
million (€87 million at December 31, 2020).
As provided by the contract that regulates the petroleum
activities in Area 4 offshore Mozambique, Eni SpA in its capacity
as parent company of the operator has provided concurrently
with the approval of the development plan of the reserves which
are located exclusively within the concession area, an irrevocable
and unconditional parent company guarantee in respect of any
possible claims or any contractual breaches in connection with
the petroleum activities to be carried out in the contractual
area, including those activities in charge of the special purpose
entities like Coral FLNG SA, to the benefit of the Government of
Mozambique and third parties. The obligations of the guarantor
towards the Government of Mozambique are unlimited (non-
quantifiable commitments), whereas they provide a maximum
liability of €1,324 million in respect of third-parties claims.
This guarantee will be effective until the completion of any
decommissioning activity related to both the development plan
of Coral as well as any development plan to be executed within
Area 4 (particularly the Mamba project). This parent company
guarantee issued by Eni covering 100% of the aforementioned
obligations was taken over by the other concessionaires (Kogas,
Galp and ENH) and by ExxonMobil and CNPC shareholders of the
joint venture Mozambique Rovuma Venture SpA, in proportion
to their respective participating interest in Area 4.
COMMITMENTS AND RISKS
(€ million)
Commitments
Risks
December 31, 2021
December 31, 2020
75,201
934
76,135
69,998
600
70,598
Eni Annual Report 2021 279
Commitments related to: (i) parent company guarantees that
were issued in connection with certain contractual commitments
for hydrocarbon exploration and production activities and
quantified, based on the capital expenditures to be incurred,
to be €70,039 million (€64,294 million at December 31, 2020).
The increase of €5,745 million was essentially determined by
exchange rate differences; (ii) a parent company guarantee of
€3,532 million (€3,260 million at December 31, 2020) given on
behalf of Eni Abu Dhabi Refining & Trading BV following the
Share Purchase Agreement to acquire from Abu Dhabi National
Oil Company (ADNOC) a 20% equity interest in ADNOC Refining
and the set-up of ADNOC Global Trading Ltd dedicated to
marketing petroleum products. The parent company guarantee
still outstanding has been issued to guarantee the obligations
set out in the Shareholders Agreements and will remain in
force as long as the investment is maintained; (iii) during 2021,
the commitment of €1,672 mllion as of December 31, 2020,
assumed by Eni USA Gas Marketing Llc towards Angola LNG
Supply Service Llc for the purchase of volumes of re-gasified
gas at the Pascagoula plant (United States) over a twenty-year
period (until 2031) was ended definitively; (iv) a commitment of
€385 million for the sale to Snam Rete Gas SpA of 49.9% of the
investments held in Trans Tunisian Pipeline Company SpA and
Transmediterranean Pipeline Co Ltd, companies that manage
the international gas pipelines that connect Algeria to Italy; (v)
a commitment of €262 million for the purchase of 20% of the
project relating to Dogger Bank (C) wind farm in the North Sea;
(vi) commitments of the Plenitude business line for the purchase
of renewable energy projects in Spain and Greece for €250
million; (vii) the memorandum of intent signed with the Basilicata
Region, whereby Eni has agreed to invest €106 million (€108
million at December 31, 2020) in the future, also on account of
Shell Italia E&P SpA, in connection with Eni’s development plan
of oilfields in Val d’Agri. The commitment has been included in
the off-balance sheet contractual commitments in the following
paragraph “Liquidity risk”; (viii) a commitment for €99 million of
EniPower SpA for the purchase of two new gas turbines.
Risks relate to potential risks associated with: (i) contractual
assurances given to acquirers of certain investments and
businesses of Eni for €246 million (€230 million at December
31, 2020); (ii) assets of third parties under the custody of Eni
for €688 million (€370 million at December 31, 2020).
OTHER COMMITMENTS AND RISKS
A parent company guarantee was issued on behalf of Cardón
IV SA (Eni’s interest 50%), a joint venture operating the Perla
gas field located in Venezuela, for the supply to PDVSA GAS
of the volumes of gas produced by the field until the end of
the concession agreement (2036). In case of failure on part
of the operator to deliver the contractual gas volumes out of
production, the claim under the guarantee will be determined
by applying the local legislation. Eni’s share (50%) of the
contractual volumes of gas to be delivered to PDVSA GAS
amounted to a total of around €11 billion. Notwithstanding this
amount does not properly represent the guarantee exposure,
nonetheless such amount represents the maximum financial
exposure at risk for Eni. A similar guarantee was issued by
PDVSA on behalf of Eni for the fulfillment of the purchase
commitments of the gas volumes by PDVSA GAS.
Other commitments include the agreements entered into for
forestry initiatives, implemented within the low carbon strategy
defined by the Company, concerning the commitments for the
purchase, until 2038, of carbon credits produced and certified
according to international standards by subjects specialized in
forest conservation programs.
In the final months of 2021, the Saipem investment, jointly
controlled by Eni (31.2%) and the Italian agency CDP, experienced
a significant deterioration in the industrial performance as a
consequence of incurred large contract works losses and
assets impairment charges, which materially eroded net equity
and negatively affected solvency and indebtdeness ratios.
The worsening of the results compared to expectations was
communicated to the market at the beginning of 2022. A new
management team was appointed in March 2022 to prepare
an industrial plan to restore profitability, boost the cash
generation and reduce net borrowings. On those basis, the new
management team is expected to design a financial and equity
restructuring of the venture, which will entail a capital increase
of €2 billion by the end of the year to which Eni will contribute in
proportion to its interest (approximately €0.61 billion).
On February 5, 2021, EniServizi SpA (EniServizi) signed on behalf
of Eni SpA (Eni) an addendum to the lease contract of a property
to be built signed between Eni and the management company of
the real estate investment fund owner of the new complex under
construction in San Donato Milanese (the Property), including
the postponement of the delivery date of the property from
July 28, 2020 to December 31, 2021. Since this new delivery
date has not been met either, starting from January 1, 2022 Eni
would have the right to apply penalties to the Property. In this
context, the Property complained that the delays would not be
entirely attributable to itself, at least for the construction of the
building complex (not also for the public works), as the works
were slowed down by several factors: (i) effects of the pandemic
crisis; (ii) alleged defects found in relation to the preparatory
works for the sale of the area; (iii) alleged design defects. Also
on the basis of these complaints, with communications dated
November and December 2021, the Property expressed its
intention to charge EniServizi and/or Eni at least part of the
requests that its contractor formulated towards the Property,
equal to approximately €117 million at the balance sheet date.
In this regard, confirming the complete impartiality and neutrality
of Eni and EniServizi with respect to the contractual relationships
between the Property and its contractor (confirmed in several
communications), the Company reaffirms the following:
} the delays relating to points i) and ii) have already been
object of a settlement in the aforementioned agreement of
Management report | Consolidated financial statements | Annex 280
February 5, 2021 and therefore reabsorbed in the delivery
date of December 31, 2021;
} with regard to point iii), the Property in the purchase contract
of the area declared to accept the project without any
reservation or exception assuming all the consequent risks
and responsibilities, as well as to not to be entitled to any
higher payment, compensation or extension of terms for
errors, omissions or other defects in the project.
The above concerns out-of-court communications between
the parties, as no litigation has been initiated to date. At the
moment, therefore, it is not known what could be the object,
the reasons or the probative allegations of a possible legal
action brought by the counterparty.
Eni is liable for certain non-quantifiable risks related to
contractual guarantees given to acquirers of certain Eni
assets,
investments, against
certain contingent liabilities deriving from tax, social security
issues and other matters
contributions, environmental
applicable to periods during which such assets were operated
by Eni. Eni believes such matters will not have a material
adverse effect on Eni’s results of operations and cash flow.
including businesses and
RISK FACTORS
The following is the description of financial risks and their
management and control. With reference to the issues related
to credit risk, the parameters adopted for the determination
of expected losses and, in particular, the estimates of the
probability of default and the loss given default have been
updated to take into account the impacts of COVID-19 and its
related effects on the economic context.
As of December 31, 2021, the Company retains liquidity
reserves that management deems enough to meet the financial
obligations due in the next eighteen months. No significant
effects were reported on hedging transactions connected to
the impacts of COVID-19 on the economic context.
FINANCIAL RISKS
Financial risks are managed in respect of the guidelines issued
by the Board of Directors of Eni SpA in its role of directing
and setting the risk limits, targeting to align and centrally
coordinate Group companies’ policies on financial risks
(“Guidelines on financial risks management and control”). The
“Guidelines” define for each financial risk the key components
of the management and control process, such as the target of
the risk management, the valuation methodology, the structure
of limits, the relationship model and the hedging and mitigation
instruments.
MARKET RISK
Market risk is the possibility that changes in currency exchange
rates, interest rates or commodity prices will adversely affect
the value of the Group’s financial assets, liabilities or expected
future cash flows. The Company actively manages market risk
in accordance with a set of policies and guidelines that provide
a centralized model of handling finance, treasury and risk
management transactions based on the Company’s departments
of operational finance: the parent company’s (Eni SpA) finance
department, Eni Finance International SA and Banque Eni SA,
which is subject to certain bank regulatory restrictions preventing
the Group’s exposure to concentrations of credit risk, and Eni
Trade & Biofuels SpA and Eni Global Energy Markets SpA that
are in charge to execute certain activities relating to commodity
derivatives. In particular, Eni Corporate finance department and
Eni Finance International SA manage subsidiaries’ financing
requirements in and outside Italy, respectively, covering funding
requirements and using available surpluses. All transactions
concerning currencies and derivative contracts on interest rates
and currencies different from commodities of Eni are managed
by Eni Corporate finance department, while Eni Trade & Biofuels
SpA and Eni Global Energy Markets SpA execute the negotiation
of commodity derivatives over the market. Eni SpA, Eni Trade &
Biofuels SpA and Eni Global Energy Markets SpA (also through
the subsidiary Eni Trading & Shipping Inc) perform trading
activities in financial derivatives on external trading venues, such
as European and non-European regulated markets, Multilateral
Trading Facility (MTF), Organized Trading Facility (OTF), or
similar and brokerage platforms (i.e. SEF), and over the counter
on a bilateral basis with external counterparties. Other legal
entities belonging to Eni that require financial derivatives enter
into these transactions through Eni Trade & Biofuels SpA, Eni
Global Energy Markets SpA and Eni SpA based on the relevant
asset class expertise. Eni uses derivative financial instruments
(derivatives) in order to minimize exposure to market risks related
to fluctuations in exchange rates relating to those transactions
denominated in a currency other than the functional currency
(the euro) and interest rates, as well as to optimize exposure to
commodity prices fluctuations taking into account the currency
in which commodities are quoted. Eni monitors every activity in
derivatives classified as risk-reducing directly or indirectly related
to covered industrial assets, so as to effectively optimize the risk
profile to which Eni is exposed or could be exposed. If the result of
the monitoring shows those derivatives should not be considered
as risk reducing, these derivatives are reclassified in proprietary
trading. As proprietary trading is considered separately from the
other activities in specific portfolios of Eni Trade & Biofuels SpA
and Eni Global Energy Markets SpA, their exposure is subject to
specific controls, both in terms of Value at Risk (VaR) and stop
loss and in terms of nominal gross value. For Eni, the gross
nominal value of proprietary trading activities is compared
with the limits set by the relevant international standards. The
framework defined by Eni’s policies and guidelines provides that
the valuation and control of market risk is performed on the basis
of maximum tolerable levels of risk exposure defined in terms
of limits of stop loss, which expresses the maximum tolerable
amount of losses associated with a certain portfolio of assets
over a pre-defined time horizon; limits of revision strategy, which
Eni Annual Report 2021 281
consist in the triggering of a revision process of the strategy in
the event of exceeding the level of profit and loss given and VaR,
which measures the maximum potential loss of the portfolio,
given a certain confidence level and holding period, assuming
adverse changes in market variables and taking into account the
correlation among the different positions held in the portfolio.
Eni’s finance department defines the maximum tolerable levels
of risk exposure to changes in interest rates and foreign currency
exchange rates in terms of VaR, pooling Group companies’ risk
positions maximizing, when possible, the benefits of the netting
activity. Eni’s calculation and valuation techniques for interest rate
and foreign currency exchange rate risks are in accordance with
banking standards, as established by the Basel Committee for
bank activities surveillance. Tolerable levels of risk are based on
a conservative approach, considering the industrial nature of the
Company. Eni’s guidelines prescribe that Eni Group companies
minimize such kinds of market risks by transferring risk exposure
to the parent company finance department. Eni’s guidelines
define rules to manage the commodity risk aiming at optimizing
core activities and pursuing preset targets of stabilizing industrial
and commercial margins. The maximum tolerable level of risk
exposure is defined in terms of VaR, limits of revision strategy,
stop loss and volumes in connection with exposure deriving
from commercial activities, as well as exposure deriving from
proprietary trading, exclusively managed by Eni Trade & Biofuels
SpA and Eni Global Energy Markets SpA. Internal mandates
to manage the commodity risk provide for a mechanism of
allocation of the Group maximum tolerable risk level to each
business unit. In this framework, Eni Trade & Biofuels SpA and
Eni Global Energy Markets SpA, in addition to managing risk
exposure associated with their own commercial activity and
proprietary trading, pool the requests for negotiating commodity
derivatives and execute them in the marketplace.
According to the targets of financial structure included in the
financial plan approved by the Board of Directors, Eni decided to
retain a cash reserve to face any extraordinary requirement. Eni’s
finance department, with the aim of optimizing the efficiency
and ensuring maximum protection of capital, manages such
reserve and its immediate liquidity within the limits assigned. The
management of strategic cash is part of the asset management
pursued through transactions on own risk in view of optimizing
financial returns, while respecting authorized risk
levels,
safeguarding the Company’s assets and retaining quick access
to liquidity. The four different market risks, whose management
and control have been summarized above, are described below.
relevant contractual terms (economic risk) and conversion of
foreign currency-denominated trade and financing payables
and receivables (transactional risk). Exchange rate fluctuations
affect the Group’s reported results and net equity as financial
statements of subsidiaries denominated in currencies other
than euro are translated from their functional currency into
euro. Generally, an appreciation of U.S. dollar versus euro
has a positive impact on Eni’s results of operations, and vice
versa. Eni’s foreign exchange risk management policy is to
minimize transactional exposures arising from foreign currency
movements and to optimize exposures arising from commodity
risk. Eni does not undertake any hedging activity for risks
deriving from the translation of foreign currency denominated
profits or assets and liabilities of subsidiaries, which prepare
financial statements in a currency other than euro, except for
single transactions to be evaluated on a case-by-case basis.
Effective management of exchange rate risk is performed
within Eni’s finance departments, which pool Group companies’
positions, hedging the Group net exposure by using certain
derivatives, such as currency swaps, forwards and options. Such
derivatives are evaluated at fair value based on market prices
provided by specialized info-providers. The VaR techniques
are based on variance/covariance simulation models and are
used to monitor the risk exposure arising from possible future
changes in market values over a 24-hour period within a 99%
confidence level and a 20-day holding period.
MARKET RISK - INTEREST RATE
Changes in interest rates affect the market value of financial
assets and liabilities of the Company and the level of finance
charges.
Eni’s interest rate risk management policy is to minimize risk
with the aim to achieve financial structure objectives defined
and approved in management’s “Finance plan”. The Group’s
central departments pool borrowing requirements of the Group
companies in order to manage net positions and fund portfolio
developments consistent with management plan, thereby
maintaining a level of risk exposure within prescribed limits.
Eni enters into interest rate derivative transactions, in particular
interest rate swaps, to effectively manage the balance between
fixed and floating rate debt. Such derivatives are evaluated at fair
value based on market prices provided from specialized sources.
VaR deriving from interest rate exposure is measured daily based
on a variance/covariance model, with a 99% confidence level and
a 20-day holding period.
MARKET RISK - EXCHANGE RATE
Exchange rate risk derives from the fact that Eni’s operations
are conducted in currencies other than euro (mainly U.S. dollar).
Revenues and expenses denominated in foreign currencies
may be significantly affected by exchange rate fluctuations
due to conversion differences on single transactions arising
from the time lag existing between execution and definition of
MARKET RISK - COMMODITY
Price risk of commodities is identified as the possibility that
fluctuations in the price of materials and basic products produce
significant changes in Eni’s operating margins, determining
an impact on the economic result such as to compromise the
targets defined in the four-year plan and in the budget. The
commodity price risk arises in connection with the following
Management report | Consolidated financial statements | Annex 282
exposures: (i) strategic exposure: exposures directly identified
by the Board of Directors as a result of strategic investment
decisions or outside the planning horizon of risk management.
These exposures include, for example, exposures associated
with the program for the production of Oil & Gas reserves,
long-term gas supply contracts for the portion not balanced
by sales contracts (already stipulated or expected), the margin
deriving from the chemical transformation process, the refining
margin and long-term storage functional to the logistic-industrial
activities; (ii) commercial exposure: concerns the exposures
related to components underlying the contractual arrangements
of industrial and commercial (contracted exposure) activities
normally related to the time horizon of the four-year plan and
budget, components not yet under contract but which will be
with reasonable certainty (commitment exposure) and the
relevant activities of risk management. Commercial exposures
are characterized by a systematic risk management activity
conducted based on risk/return assumptions by implementing
one or more strategies and subjected to specific risk limits
(VaR, revision strategy limits and stop loss). In particular, the
commercial exposures include exposures subjected to asset-
backed hedging activities, arising from the flexibility/optionality
of assets; (iii) proprietary trading exposure: transactions carried
out autonomously for speculative purposes in the short term and
normally not aimed at delivery with the intention of exploiting
favorable price movements, spreads and/or volatility implemented
autonomously and carried out regardless of the exposures of
the commercial portfolio or physical and contractual assets.
They are usually carried out in the short term, not necessarily
aimed at the delivery and carried out by using financial or similar
instruments in accordance with specific limits of authorized risk
(VaR, stop loss). Strategic risk is not subject to systematic activity
of management/coverage that is eventually carried out only in
case of specific market or business conditions. Because of the
extraordinary nature, hedging activities related to strategic risks
are delegated to the top management, previously authorized by
the Board of Directors. With prior authorization from the Board
of Directors, the exposures related to strategic risk can be used
in combination with other commercial exposures in order to
exploit opportunities for natural compensation between the risks
(natural hedge) and consequently reduce the use of financial
derivatives (by activating logics of internal market). With regard to
exposures of a commercial nature, Eni’s risk management target
is to optimize the “core” activities and preserve the economic/
financial results. Eni manages the commodity risk through the
trading units (Eni Trade & Biofuels SpA and Eni Global Energy
Markets SpA) and the exposure to commodity prices through
the Group’s finance departments by using financial derivatives
traded on the regulated markets MTF, OTF and financial
derivatives traded over the counter (swaps, forward, contracts
for differences and options on commodities) with the underlying
commodities being crude oil, gas, refined products, power or
emission certificates. Such financial derivatives are valued at fair
value based on market prices provided from specialized sources
or, absent market prices, based on estimates provided by brokers
or suitable valuation techniques. VaR deriving from commodity
exposure is measured daily based on a historical simulation
technique, with a 95% confidence level and a one-day holding
period.
MARKET RISK - STRATEGIC LIQUIDITY
Market risk deriving from liquidity management is identified as
the possibility that changes in prices of financial instruments
(bonds, money market instruments and mutual funds) affect
the value of these instruments in case of sale or when they are
valued at fair value in the financial statements. The setting up
and maintenance of the liquidity reserve are mainly aimed to
guarantee a proper financial flexibility. Liquidity should allow Eni
to fund any extraordinary need (such as difficulty in access to
credit, exogenous shock, macroeconomic environment, as well
as merger and acquisitions) and must be dimensioned to provide
a coverage of short-term debts and of medium and long-term
finance debts due within a time horizon of 24 months. In order
to manage the investment activity of the strategic liquidity, Eni
defined a specific investment policy with aims and constraints in
terms of financial activities and operational boundaries, as well
as governance guidelines regulating management and control
systems. In particular, strategic liquidity management is regulated
in terms of VaR (measured based on a parametrical methodology
with a one-day holding period and a 99% confidence level), stop
loss and other operating limits in terms of concentration, issuing
entity, business segment, country of emission, duration, ratings
and type of investing instruments in portfolio, aimed to minimize
market and liquidity risks. Financial leverage or short selling is
not allowed. Activities in terms of strategic liquidity management
started in the second half of the year 2013 (Euro portfolio) and
throughout the course of the year 2017 (U.S. dollar portfolio). In
2021, the Strategic liquidity investment portfolio has maintained
an average credit rating of A-/BBB+, in line with the year 2020.
The following tables show amounts in terms of VaR, recorded in
2021 (compared with 2020), relating to interest rate and exchange
rate risks in the first section and commodity risk (aggregated
by type of exposure). Regarding the management of strategic
liquidity, the table reports the sensitivity to changes in interest rate.
Eni Annual Report 2021 283
(Value at risk - Parametric method variance/covariance; holding period: 20 days; confidence level: 99%)
(€ million)
Interest rate(a)
Exchange rate(a)
2021
Low
1.29
0.11
High
11.04
0.28
Average
At year end
3.32
0.18
3.66
0.12
High
7.39
0.48
2020
Low
1.18
0.10
Average
At year end
2.93
0.28
1.34
0.18
(a) Value at risk deriving from interest and exchange rates exposures include the following finance departments: Eni Corporate Finance Department, Eni Finance International SA, Banque Eni
SA and Eni Finance USA Inc.
(Value at risk - Historic simulation method; holding period: 1 day; confidence level: 95%)
(€ million)
Commercial exposures - Management
Portfolio(a)
Trading(b)
High
42.76
1.03
2021
Low
2.91
0.12
Average
At year end
23.80
0.37
2.91
0.20
High
16.10
1.57
2020
Low
3.02
0.10
Average
At year end
8.50
0.52
3.02
0.25
(a) Refers to Global Gas & LNG Portfolio business area, Power Generation & Marketing, Green\Traditional Refining & Marketing, Eni gas e luce, Eni Trading & Biofuels, Eni Global Energy Markets
(commercial portfolio). VaR is calculated on the so-called Statutory view, with a time horizon that coincides with the year considering all the volumes delivered in the year and the relevant financial
hedging derivatives. Consequently, during the year the VaR pertaining to GGP, Power G&M, GTR&M and EGL during the year presents a decreasing trend following the progressive reaching of the
maturity of the positions within the annual horizon.
(b) Cross-commodity proprietary trading, through financial instruments, refers to Eni Trading & Biofuels and Eni Global Energy Markets (London-Bruxelles-Singapore) and Eni Trading & Shipping
Inc (Houston).
(Sensitivity - Dollar value of 1 basis point - DVBP)
2021
2020
(€ million)
Strategic liquidity(a)
High
0.40
Low
0.29
Average
At year end
0.33
0.30
High
0.37
Low
0.29
Average
At year end
0.32
0.30
(a) Management of strategic liquidity portfolio starting from July 2013.
(Sensitivity - Dollar value of 1 basis point - DVBP)
2021
2020
(€ million)
Strategic liquidity(a)
High
0.14
Low
0.05
Average
At year end
0.11
0.13
High
0.07
Low
0.03
Average
At year end
0.05
0.05
(a) Management of strategic liquidity portfolio in $ currency starting from August 2017.
CREDIT RISK
Credit risk is the potential exposure of the Group to losses in case
counterparties fail to perform or pay amounts due. Eni defined
credit risk management policies consistent with the nature and
characteristics of the counterparties of commercial and financial
transactions regarding the centralized finance model.
The Company adopted a model to quantify and control the credit
risk based on the evaluation of the expected loss which represents
the probability of default and the capacity to recover credits in
default that is estimated through the so-called Loss Given Default.
In the credit risk management and control model, credit
exposures are distinguished by commercial nature, in relation to
sales contracts on commodities related to Eni’s businesses, and
by financial nature, in relation to the financial instruments used by
Eni, such as deposits, derivatives and securities.
CREDIT RISK FOR COMMERCIAL EXPOSURES
Credit risk arising from commercial counterparties is managed
by the business units and by the specialized corporate finance
and dedicated administration departments and is operated
based on formal procedures for the assessment of commercial
counterparties, the monitoring of credit exposures, credit
recovery activities and disputes. At a corporate level, the
general guidelines and methodologies for quantifying and
controlling customer risk are defined, in particular the riskiness
of commercial counterparties is assessed through an internal
rating model that combines different default factors deriving
indicators, payment
from economic variables, financial
experiences and information from specialized primary info
providers. The probability of default related to State Entities or
their closely related counterparties (e.g. National Oil Company),
Management report | Consolidated financial statements | Annex
284
essentially represented by the probability of late payments,
is determined by using the country risk premiums adopted
for the purposes of the determination of the WACCs for the
impairment of non-financial assets. Finally, for retail positions
without specific ratings, risk is determined by distinguishing
customers in homogeneous risk clusters based on historical
series of data relating to payments, periodically updated.
CREDIT RISK FOR FINANCIAL EXPOSURES
With regard to credit risk arising from financial counterparties
deriving from current and strategic use of liquidity, derivative
contracts and transactions with underlying financial assets
valued at fair value, Eni has established internal policies
through
providing exposure control and concentration
maximum credit risk limits corresponding to different classes
of financial counterparties defined by the Company’s Board of
Directors and based on ratings provided for by primary credit
rating agencies. Credit risk arising from financial counterparties
is managed by the Eni’s operating finance departments, Eni
Global Energy Markets SpA (EGEM), Eni Trade & Biofuels SpA
(ETB) and Eni Trading & Shipping Inc (ETS Inc) specifically for
commodity derivatives transactions, as well as by companies
and business areas limitedly to physical transactions with
financial counterparties, consistently with the Group centralized
finance model. Eligible financial counterparties are closely
monitored by each counterpart and by group of belonging
to check exposures against the limits assigned daily and the
expected loss analysis and the concentration periodically.
LIQUIDITY RISK
Liquidity risk is the risk that suitable sources of funding for the
Group may not be available, or the Group is unable to sell its
assets in the marketplace in order to meet short-term finance
requirements and to settle obligations. Such a situation
would negatively affect Group results, as it would result in the
Company incurring higher borrowing expenses to meet its
obligations or under the worst of conditions the inability of the
Company to continue as a going concern.
Eni’s risk management targets include the maintaining of
an adequate level of liquidity readily available to deal with
external shocks (drastic changes in the scenario, restrictions
on access to capital markets, etc.) or to ensure an adequate
level of operational flexibility for the development programs
of the Company. The strategic liquidity reserve is employed in
short-term marketable financial assets, favoring investments
with very low risk profile. At present, the Group believes to have
access to sufficient funding to meet the current foreseeable
borrowing requirements due to available cash on hand financial
assets and lines of credit and the access to a wide range of
funding opportunities which can be activated at competitive
costs through the credit system and capital markets.
Due to the increased volatility of commodity markets and
the related higher financial commitment linked to the margin
of commodity derivatives, Eni has further strengthened its
financial flexibility through the activation of new financing lines.
Eni has in place a program for the issuance of Euro Medium
Term Notes up to €20 billion, of which about €16.4 billion
were drawn as of December 31, 2021 (€14.1 billion drawn
by Eni SpA). The Group has credit ratings of A- outlook
Stable and A-2, respectively, for long and short-term debt,
assigned by Standard & Poor’s; Baa1 outlook stable and
P-2, respectively, for long and short-term debt, assigned
by Moody’s; A- outlook stable and F1, respectively for long
and short-term debt, assigned by Fitch. Eni’s credit rating is
linked, in addition to the Company’s industrial fundamentals
and trends in the trading environment, to the sovereign credit
rating of Italy. Based on the methodologies used by the
credit rating agencies, a downgrade of Italy’s credit rating
may trigger a potential knock-on effect on the credit rating
of Italian issuers such as Eni. During 2021, S&P revised Eni’s
outlook from negative to stable.
In May 2021, Eni placed two euro-denominated perpetual
subordinated hybrid bond issues for an aggregate nominal
amount of €2 billion, in addition to those already issued in
October 2020 for an aggregate nominal amount of €3 billion.
These are perpetual instruments with an early repayment
option in favor of the issuer and classified under IFRS as
equity instruments. The rating agencies assigned to the
bonds the following ratings Baa3 / BBB / BBB (Moody’s /
S&P / Fitch) and an “equity credit” of 50%.
As part of the Euro Medium Term Notes program, in 2021, Eni
issued a sustainability-linked bond for a nominal amount of
€1 billion linked to the achievement of sustainability targets
concerning Net Carbon Footprint Upstream (Scope 1 and 2)
and renewable energy installed capacity.
As of December 31, 2021, Eni maintained short-term
uncommitted unused borrowing facilities of €6,207 million.
Total committed credit lines amounted to €5,114 million (of
which €5,000 million pertaining to Eni SpA) of which €2,835
million unused. These facilities bore interest rates and fees for
unused facilities that reflected prevailing market conditions.
Eni Annual Report 2021 285
EXPECTED PAYMENTS FOR TRADE AND FINANCIAL DEBTS AND LEASE LIABILITIES
The table below summarizes the Group main contractual
obligations for finance debt and lease liability repayments,
including expected payments for interest charges and liabilities
for derivative financial instruments.
(€ million)
December 31, 2021
Non-current financial liabilities (including the current portion)
Current financial liabilities
Lease liabilities
Fair value of derivative instruments
Interest on finance debt
Interest on lease liabilities
Financial guarantees
December 31, 2020
Non-current financial liabilities (including the current portion)
Current financial liabilities
Lease liabilities
Fair value of derivative instruments
Interest on finance debt
Interest on lease liabilities
Financial guarantees
Maturity year
2022
2023
2024
2025
2026
2027 and
thereafter
Total
1,903
2,299
920
12,911
18,033
475
282
757
1,599
4,339
2,272
2,616
3,910
10,668
25,708
688
3
565
61
508
481
23
2,147
28
5,030
2,898
3,124
4,414
12,843
462
247
709
386
214
600
359
184
543
286
155
441
905
681
1,586
2,299
5,309
13,026
46,342
2,873
1,763
4,636
1,599
2021
2022
2023
2024
2025
2026 and
thereafter
Total
Maturity year
1,697
2,882
815
1,609
7,003
502
295
797
1,072
1,518
3,469
2,049
2,730
12,232
23,695
593
26
503
13
442
50
413
2,218
73
2,882
4,984
1,771
2,137
3,985
2,541
3,143
14,523
33,332
473
252
725
461
219
680
387
192
579
360
165
525
1,164
748
1,912
3,347
1,871
5,218
1,072
Liabilities for leased assets including interest charges for
€2,370 million (€2,429 million at December 31, 2020) per-
tained to the share of joint operators participating in unincor-
porated joint operation operated by Eni which will be recov-
ered through a partner-billing process.
The table below presents the timing of the expenditures for trade and other payables.
(€ million)
December 31, 2021
Trade payables
Other payables and advances
December 31, 2020
Trade payables
Other payables and advances
Maturity year
2022
2023 - 2026
16,795
4,925
21,720
112
112
Maturity year
2021
2022 - 2025
2027 and
thereafter
109
109
2026 and
thereafter
8,679
4,257
12,936
111
111
94
94
Total
16,795
5,146
21,941
Total
8,679
4,462
13,141
Management report | Consolidated financial statements | Annex
286
EXPECTED PAYMENTS UNDER CONTRACTUAL OBLIGATIONS27
In addition to lease, financial, trade and other liabilities represented
in the balance sheet, the Company is subject to non-cancellable
contractual obligations or obligations, the cancellation of which
requires the payment of a penalty. These obligations will require
cash settlements in future reporting periods. These liabilities
are valued based on the net cost for the company to fulfill the
contract, which consists of the lowest amount between the costs
for the fulfillment of the contractual obligation and the contractual
compensation/penalty in the event of non-performance.
The Company’s main contractual obligations at the balance
sheet date comprise take-or-pay clauses contained in the
Company’s gas supply contracts or shipping arrangements,
whereby the Company obligations consist of off-taking
minimum quantities of product or service or, in case of
failure, paying the corresponding cash amount that entitles
the Company the right to collect the product or the service in
future years. The amounts due were calculated on the basis
of the assumptions for the gas prices and services included
in the four-year industrial plan approved by the Company’s
management and for subsequent years on the basis of
management’s long-term assumptions.
The table below summarizes the Group principal contractual
obligations for the main existing contractual obligations as
of the balance sheet date, shown on an undiscounted basis.
Amounts expected to be paid in 2022 for decommissioning Oil
& Gas assets and for environmental clean-up and remediation
are based on management’s estimates and do not represent
financial obligations at the closing date.
(€ million)
Decommissioning liabilities(a)
Environmental liabilities
Purchase obligations(b)
- Gas
Take-or-pay contracts
Ship-or-pay contracts
- Other purchase obligations
Other obligations
- Memorandum of intent - Val d’Agri
Maturity year
2022
370
376
2023
298
346
2024
448
297
2025
377
245
2027 and
thereafter
10,594
706
2026
436
178
Total
12,523
2,148
28,862
20,394
17,062
13,873
11,157
67,751
159,099
25,874
19,547
16,344
13,483
10,934
67,377
866
2,122
2
2
487
360
443
275
379
11
217
6
351
23
104
104
153,559
2,743
2,797
106
106
Total(c)
(a) Represents the estimated future costs for the decommissioning of oil and natural gas production facilities at the end of the producing lives of fields, well-plugging, abandonment and site
173,876
17,807
14,495
29,610
79,155
11,771
21,038
restoration.
(b) Represents any agreement to purchase goods or services that is enforceable and legally binding and that specifies all significant terms.
(c) Total future payments for contractual commiments includes obligations of companies held for sale for €67 million.
CAPITAL INVESTMENT AND CAPITAL EXPENDITURE
COMMITMENTS
In the next four years, Eni expects capital investments
and capital expenditures of €28.1 billion. The table below
summarizes Eni’s full-life capital expenditure commitments
for property, plant and equipment and capital projects at the
closing date. A project is considered to be committed when
it has received the appropriate level of internal management
approval and for which procurement contracts have usually
already been awarded or are being awarded.
The amounts shown in the table below include committed
expenditures to execute certain environmental projects.
(€ million)
Committed projects
Maturity year
2022
5,107
2023
3,712
2024
2,273
2026 and
thereafter
2,336
2025
1,420
Total
14,848
(27) Contractual obligations related to employee benefits are indicated in note 22 - Provisions for employee benefits.
Eni Annual Report 2021
OTHER INFORMATION ABOUT FINANCIAL INSTRUMENTS
2021
2020
Income (expense) recognized in
Income (expense) recognized in
287
(€ million)
Financial instruments at fair value with effects recognized
in profit and loss account
- Financial assets held for trading(a)
- Non-hedging and trading derivatives(b)
Other investments valued at fair value(c)
Receivables and payables and other assets/liabilities valued
at amortized cost
- Trade receivables and other(d)
- Financing receivables(e)
- Securities(a)
- Trade payables and other(a)
- Financing payables(f)
Carrying
amount
Profit and loss
account
Carrying
amount
Profit and loss
account
OCI
6,301
(611)
1,294
19,124
6,140
53
21,941
27,794
11
597
230
(226)
39
(80)
(250)
(215)
5,502
(19)
957
10,955
1,207
55
13,141
26,686
(52)
105
(1,264)
31
(415)
150
(213)
99
(31)
(632)
(941)
OCI
24
661
Net assets (liabilities) for hedging derivatives(g)
(a) Income or expense were recognized in the profit and loss account within “Finance income (expense)”.
96
(b) In the profit and loss account, economic effects were recognized as income within “Other operating income (loss)” for €903 million (expense for €766 million in 2020) and as expense within
“Finance income (expense)” for €306 million (income for €351 million in 2020).
(c) Income or expense were recognized in the profit and loss account within “Income (expense) from investments - Dividends”.
(d) Income or expense were recognized in the profit and loss account as net impairment losses within “Net (impairment losses) reversal of trade and other receivables” for €279 million (net
impairment losses for €226 million in 2020) and as income within “Finance income (expense)” for €53 million (income for €13 million in 2020), including interest income calculated on the basis
of the effective interest rate of €18 million (interest income for €22 million in 2020).
(e) In the profit and loss account, income or expense were recognized as income within “Finance income (expense)”, including interest income calculated on the basis of the effective interest
rate of €53 million (income for €92 million in 2020) and net impairment losses for €25 million (net impairment losses for €1 million in 2020).
(f) In the profit and loss account, income or expense were recognized as expense within “Finance income (expense)”, including interest expense calculated on the basis of the effective interest rate of €487
million (€531 million in 2020).
(g) In the profit and loss account, income or expense were recognized within “Sales from operations” and “Purchase, services and other”.
DISCLOSURES ABOUT THE OFFSETTING OF FINANCIAL INSTRUMENTS
(€ million)
December 31, 2021
Financial assets
Trade and other receivables
Other current assets
Other non-current assets
Financial liabilities
Trade and other liabilities
Other current liabilities
Other non-current liabilities
December 31, 2020
Financial assets
Trade and other receivables
Other current assets
Other non-current assets
Financial liabilities
Trade and other liabilities
Other current liabilities
Other non-current liabilities
Gross amount
of financial assets and
liabilities
Gross amount
of financial assets and
liabilities subject to
offsetting
Net amount
of financial assets and
liabilities
20,461
20,791
1,031
23,331
22,913
2,248
11,681
3,719
1,253
13,691
5,905
1,877
1,611
7,157
2
1,611
7,157
2
755
1,033
755
1,033
18,850
13,634
1,029
21,720
15,756
2,246
10,926
2,686
1,253
12,936
4,872
1,877
The offsetting of financial assets and liabilities related to: (i)
receivables and payables pertaining to the Exploration & Production
segment towards state entities for €1,540 million (€753 million
at December 31, 2020) and trade receivables and trade payables
pertaining to Eni Trading & Shipping Inc for €71 million (€2 million
at December 31, 2020); (ii) other current and non-current assets
and liabilities for derivative financial instruments of €7,159 million
(€1,033 million at December 31, 2020).
Management report | Consolidated financial statements | Annex
288
Legal Proceedings
Eni is a party in a number of civil actions and administrative
arbitral and other judicial proceedings arising in the ordinary
course of business. Based on information available to date,
taking into account the existing risk provisions disclosed in note
21 - Provisions and that in some instances it is not possible to
make a reliable estimate of contingency losses, Eni believes that
the foregoing will likely not have a material adverse effect on the
Group Consolidated Financial Statements.
In addition to proceedings arising in the ordinary course of
business referred to above, Eni is party to other proceedings,
and a description of the most significant proceedings currently
pending is provided in the following paragraphs. Generally, and
unless otherwise indicated, these legal proceedings have not
been provisioned because Eni believes a negative outcome to
be unlikely or because the amount of the provision cannot be
estimated reliably.
1. Environment, health and safety
iii)
1.1 Criminal proceedings in the matters of environment,
health and safety
i)
Eni Rewind SpA (company incorporating EniChem
Agricoltura SpA – Agricoltura SpA in liquidation –
EniChem Augusta Industriale Srl – Fosfotec Srl) –
Proceeding about the industrial site of Crotone. In 2010
a criminal proceeding started before the Public Prosecutor
of Crotone relating to allegations of environmental
disaster, poisoning of substances used in the food chain
and omitted clean-up due to the activity at a landfill site
which was taken over by Eni in 1991. Subsequently
to Eni’s takeover, any activity for waste conferral was
stopped. The defendants are certain managers of Eni
Group companies, that have managed the landfill since
1991. The Municipality of Crotone is acting as plaintiff. In
March 2019, the public prosecutor requested the acquittal
of all defendants. The proceeding is ongoing. Although
the public prosecutor requested the acquittal of all the
defendants, on January 17, 2020, the Court asked the
Public Prosecutor to amend the charges in order to clarify
the modalities and timing of each alleged conduct. At the
preliminary hearing of July 1, 2020, the Court acquitted
all the defendants, some for not having committed the
alleged crime and others for expiration of the statute of
limitations. The Company therefore decided to appeal
the decision to obtain an acquittal on the merits also in
relation to the positions of the former managers of the
Eni Group acquitted due to expiration of the statute of
limitations. The decision on the appeal is pending.
ii)
Eni Rewind SpA – Crotone omitted clean-up. In
April 2017, a new criminal case was opened by the
Public Prosecutor of Crotone relating to reclamation
activities at the Crotone site. Meanwhile, in the first
half of 2018, the new clean-up project presented by the
Company was deemed feasible by the Italian Ministry
for the Environment. Pending the decision of the Public
Prosecutor, a defense brief was filed to summarize the
activity carried out by the subsidiary Eni Rewind SpA
(former Syndial SpA) in terms of reclamation, pointing
to willingness of executing a decisive plan of action,
and to obtain the dismissal of the criminal proceedings.
On March 3rd, 2020, the Ministerial Decree approving
the POB Phase 2 was issued. The Public Prosecutor
has submitted a filing request and the judge for the
preliminary investigations has set a chamber hearing.
By a court order of January 10, 2022, new investigations
have been requested, assigning a four-month term to the
Public Prosecutor for their conduct.
Eni Rewind SpA and Versalis SpA – Porto Torres dock.
In 2012, following a request of the Public Prosecutor of
Sassari, an Italian court ordered presentation of evidence
relating to the functioning of the hydraulic barrier of Porto
Torres site (ran by Eni Rewind SpA) and its capacity to
avoid the dispersion of contamination released by the site
into the nearby sea. Eni Rewind and Versalis were notified
that its chief executive officers and certain other managers
were being investigated. The Public Prosecutor of the
Municipality of Sassari requested that these individuals
stand trial. The plaintiffs, the Ministry for Environment
and the Sardinia Region claimed environmental damage
in an amount of €1.5 billion. Other parties referred to
the judge’s equitable assessment. At a hearing in July
2016, the court acquitted all defendants of Eni Rewind
and Versalis with respect to the crimes of environmental
disaster. Three Eni Rewind managers were found guilty
of environmental disaster relating to the period limited to
August 2010-January 2011 and sentenced to one-year
prison, with a suspended sentence. Eni Rewind filed an
appeal against this decision.
The trial before the Second Instance Court of Cagliari
ended on December 14, 2021 with the confirmation of
first-degree sentence, also in relation to the civil rulings.
The merits of the sentence are yet to be made public for
the purposes of the related appeal.
iv)
Eni Rewind SpA – The illegal landfill in Minciaredda
area, Porto Torres site. The Court of Sassari, on request
of the Public Prosecutor, seized the Minciaredda landfill
area, near the western border of the Porto Torres site
(Minciaredda area). All the indicted have been served
a notice of investigation for alleged crimes of carrying
out illegal waste disposal and environmental disaster.
The seizure order also involved Eni Rewind pursuant to
Eni Annual Report 2021
v)
Legislative Decree no. 231/01, whereby companies are
liable for the crimes committed by their employees when
performing their duties. The court determined that Eni
Rewind can be sued for civil liability and resolved that all
defendants and the Eni subsidiary be put on trial before
the Court of Sassari.
Upon start of the trial, the Italian Ministry for Energy
Transition (MITE) was allowed to enter the judgment as
plaintiff and the Court declared invalid the indictment
decree against Eni Rewind as entity liable pursuant to
Legislative Decree no. 231/01, returning the case to
the judge of the preliminary hearing, who subsequently
issued the decree setting a new preliminary hearing
scheduled for March 31, 2022. The hearing against the
defendants is in progress.
Eni Rewind SpA – The Phosphate deposit at Porto Torres
site. In 2015, the Court of Sassari, accepting a request of
the Public Prosecutor of Sassari, seized — as a preventive
measure — the area of “Palte Fosfatiche” (phosphates
deposit) located on the territory of Porto Torres site, in
relation to alleged crimes of environmental disaster,
carrying out of unauthorized disposal of hazardous wastes
and other environmental crimes. Eni Rewind SpA is being
investigated pursuant to Legislative Decree no. 231/01. In
November 2019, a request for referral to trial was served
on the Eni subsidiary. The preliminary hearing was held
on September 9, 2020. At the outcome of the preliminary
hearing, during which the municipality of Porto Torres
filed a civil action, the Judge pronounced against all the
defendants a sentence of no place to proceed due to the
statute of limitation in relation to the crimes of unauthorized
management of landfills and disposal of hazardous wastes
as well as against Eni Rewind SpA in relation to the liability
pursuant to Legislative Decree no. 231/01. The Judge also
ordered the indictment of the defendants before the Court
of Sassari, at the hearing on May 28, 2021, limited to the
alleged crime of environmental disaster.
Upon start of the trial, the MITE was allowed to enter the
judgment as plaintiff. The Court, accepting the defense’s
objections, declared the indictment invalid and returned
the case to the judge of the preliminary hearing. A hearing
before the judge is pending.
289
75 alleged victims. The plaintiffs include relatives of the
alleged victims, various local administrations, and other
institutional bodies, including local trade unions. Eni
Rewind asserted the statute of limitations as a defense
to the instance of environmental disaster for certain
instances of diseases and deaths. The court at Ravenna
decided that all defendants would stand trial and held that
the statute of limitations only applied with reference to
certain instances of crime of culpable injury. Eni Rewind
reached some settlements. In November 2016, the Judge
acquitted the defendants in all the contested cases
except for one, an asbestos case, for which a conviction
was handed down. The defendants, the Prosecutor and
the plaintiffs appealed the decision; the second instance
judge ordered a complex inquiry. Eni’s defenders recused
a member of the expert panel who conducted the inquiry,
and the Second Instance Court rejected the request
for recusal with an order subsequently canceled by the
Third Instance Court. On the referral, at the request of
Eni’s lawyers, the Court of Appeals of Bologna, given
the different composition of the judging panel, ordered
the renewal of the appeal trial and, consequently, the
subsequent revocation of the order with which it had
initially ordered the inquiry. On May 25, 2020 the Court
acquitted the defendants and the persons sued for
damages in relation to 74 cases of mesothelioma, lung
cancer, pleural plaques and asbestosis, took note of the
res judicata with regards to the acquittal for the disaster
complaint while confirming the conviction for one case
of asbestosis. The Court also declared inadmissible the
appeal of several claimants. The Company filed an appeal
with the Third Instance Court against the conviction for
asbestosis; some claimants challenged the acquittal for
the other pathologies.
On November 24, 2021, the Third Instance Court: (i)
annulled, without postponement, the contested sentence
against a defendant for extinction of the crime; (ii) annulled
without referral to the criminal effects the sentence
contested for the crime of negligent injury in relation to
the case of asbestosis because it fell under statute of
limitations, rejecting the appeals of Eni’s lawyers for civil
purposes; (iii) rejected the appeals of the civil parties.
Therefore, the criminal proceeding is closed but any
subsequent litigation for civil liability may be initiated.
vi)
Eni Rewind SpA – Proceeding relating to the asbestos
at the Ravenna site. A criminal proceeding is pending
before the Tribunal of Ravenna relating to the crimes
of culpable manslaughter, injuries and environmental
disaster, which have been allegedly committed by
former Eni Rewind employees at the site of Ravenna.
The site was acquired by Eni Rewind following a number
of corporate mergers and acquisitions. The alleged
crimes date back to 1991. In the proceeding there are
vii)
Raffineria di Gela SpA and Eni Mediterranea Idrocarburi
SpA – Alleged environmental disaster. A criminal
proceeding is pending in relation to crimes allegedly
committed by the managers of the Raffineria di Gela
SpA and EniMed SpA relating to environmental disaster,
unauthorized waste disposal and unauthorized spill
of industrial wastewater. The Gela Refinery has been
prosecuted for administrative offence pursuant to
Management report | Consolidated financial statements | Annex
ix)
x)
290
Legislative Decree no. 231/01. This criminal proceeding
initially regarded soil pollution allegedly caused by spills
from 14 tanks of the refinery storage, which had not been
provided with double bottoms, and pollution of the sea
water near the coastal area adjacent to the site due to the
failure of the barrier system implemented as part of the
clean-up activities conducted at the site. At the closing
of the preliminary investigation, the Public Prosecutor of
Gela merged into this proceeding the other investigations
related to the pollution that occurred at the other sites of
the Gela refinery as well as hydrocarbon spills at facilities
of EniMed. The proceeding is ongoing.
viii) Val d’Agri. In March 2016, the Public Prosecutors of
Potenza started a criminal investigation into alleged
illegal handling of waste material produced at the
Viggiano oil center (COVA), part of the Eni operated
Val d’Agri oil complex. After a two-year investigation,
the Prosecutors ordered the house arrest of 5 Eni
employees and the seizure of certain plants functional
to the production activity of the Val d’Agri complex
the
which, consequently, was shut down. From
commencement of the investigation, Eni has carried
out several technical and environmental surveys, with
the support of independent experts of international
standing, who found a full compliance of the plant
and the industrial process with the requirements of
the applicable laws, as well as with best available
international best practices. The
technologies and
Company implemented certain corrective measures
to upgrade plants which were intended to address the
claims made by the Public Prosecutor about an alleged
operation of blending which would have occurred during
normal plant functioning. Those corrective measures
were favorably reviewed by the Public Prosecutor. The
Company restarted the plant in August 2016. In relation
to the criminal proceeding, the Public Prosecutor’s Office
requested the indictment of all the defendants for alleged
illegal trafficking of waste, violation of the prohibition of
mixing waste, unauthorized management of waste and
other violations, and the Company for administrative
offenses pursuant to Legislative Decree no. 231/01. The
trial started in November 2017. At the conclusion of the
preliminary hearings, the Court of Potenza, on March
10, 2021, acquitted all the defendants in relation to the
allegation of false statements in an administrative deed,
while in relation to the alleged administrative offenses,
the Court found that there was no need to proceed due
to the statute of limitations. Finally, in relation to the
alleged crime of illegal trafficking of waste, the Court
acquitted two former employees of the Southern District
for not having committed the crime, convicted six
former officials of the same District with suspension of
the sentence and sentenced Eni pursuant to Legislative
Decree no. 231/01 to pay a fine of €700,000, with the
contextual confiscation of a sum of € 44,248,071
deemed to constitute the unfair profit obtained from the
crime, from which Eni will deduct the amount incurred
for the plant upgrade carried out in 2016.
Following the filing of the merits of the sentence by
the Court, an appeal was promptly filed against all the
condemnations and the setting of the appeal judgment is
pending.
Eni SpA – Health investigation related to the COVA
center. Beside the criminal proceeding for
illegal
trafficking of waste, the Public Prosecutor of Potenza
started another investigation in relation to alleged health
violations. The Public Prosecutor requested the formal
opening of an investigation with respect to nine people
in relation to alleged violations of the rules providing for
the preparation of a Risk Assessment Document of the
working conditions at the Val d’Agri Oil Center (COVA). In
March 2017, following the request of the consultant of
the Prosecutor, the Labor Inspectorate of Potenza issued
a fine against the employers of the COVA for omitted and
incomplete assessment of the chemical risks for the
COVA center. In October 2017, the Prosecutor’s Office
changed the criminal allegations to disaster, murder and
negligent personal injury, also alleging breaches of health
and safety regulations. The proceeding is ongoing.
Proceeding Val d’Agri – Tank spill. In February 2017, the
Italian police department of Potenza found a stream of
water contaminated by hydrocarbon traces of unknown
origin, flowing inside a small shaft located outside
the COVA. Eni carried out activities at the COVA aimed
at determining the origin of the contamination and
identified the cause in a failure of a tank (the “D” tank)
outside of the COVA, that presented a risk of extension
of the contamination in the downstream area of the
plant. In executing these activities, Eni performed all
the communications provided for by Legislative Decree
no. 152/06 and started certain emergency safe-keeping
operations at the areas subject to potential contamination
outside the COVA. Furthermore, the characterization plan
of the areas inside and outside the COVA was approved
by the relevant authorities, to which the Risk Analysis
document was subsequently submitted. Following this
event, a criminal investigation was initiated in order to
ascertain whether there had been illegal environmental
disaster by the former COVA officers, the Operation
Managers in charge since 2011 and the HSE Manager in
charge at the time of the accident, and also against Eni
in relation to the same offense pursuant to Legislative
Decree no. 231/01 and of some public officials belonging
Eni Annual Report 2021
to local administrations for official misconduct, false and
fraudulent public statements committed in 2014 and
of the crime for environmental disaster and of culpable
conduct committed in February 2017. The Company
has paid damages of an immaterial amount almost to
all the landlords of areas close to the COVA, which were
affected by a spillover. Discussions are ongoing with
other claimants. The likely disbursements relating to
these transactions have been provisioned. In February
2018, Eni contested the reports presented in October and
in December 2017 by the Italian Fire Department stating
that it does not consider itself obliged to carry out the
integration required, considering that the data acquired in
the area affected by the event indicate, according to Eni’s
assessments, that the loss was promptly and efficiently
controlled and there were no situations of serious danger
to human health and the environment. In April 2019,
precautionary measures were ordered against three Eni
employees at the COVA which, following an appeal, were
canceled by the Third Instance Court. In September 2019,
the Public Prosecutor requested one of those employees
to be put on trial with expedited proceeding, accepted by
the Judge for preliminary investigations. The judgment
was suspended in order to allow the continuation of the
environmental clean-up and reclamation of the site. As
part of the concomitant procedure against the remaining
employees and Eni as the legal entity being held liable
pursuant to Legislative Decree no. 231/01, the Public
Prosecutor, after issuing a notice of conclusion of the
preliminary investigations, made a request for indictment.
At the outcome of the preliminary hearing, with reference
to the imputation to Eni pursuant to Legislative Decree no.
231/01, the judge of the preliminary issued a sentence
not to prosecute the Company for the events up to 2015
because the fact was not envisaged by the law as a
crime to claim a legal entity liable for. With reference to
the events subsequent to 2015, the judge acknowledged
the nullity of the request for indictment, thus returning the
documents to the Public Prosecutor. Finally, the judge of
the preliminary hearing approved to put on trial two Eni
employees before the Court of Potenza, establishing the
hearing on June 27, 2022, with the allegation of unnamed
disaster, rejecting the request of the Public Prosecutor for
qualifying the alleged crime as a new type of legal offence
(environmental disaster).
xi)
Raffineria di Gela SpA and Eni Mediterranea Idrocarburi
SpA – Waste management of the landfill Camastra.
In June 2018, the Public Prosecutor of Palermo (Sicily)
notified Eni’s subsidiaries Raffineria di Gela SpA and Eni
Mediterranea Idrocarburi SpA of a criminal proceeding
relating to allegations of unlawful disposal of industrial
waste resulting from the reclaiming activities of soil,
xii)
291
which were discharged at a landfill owned by a third party.
The Prosecutor charged the then chief executive officers
of the two subsidiaries, and the legal entities have been
charged with the liability pursuant to Legislative Decree
no. 231/01. The alleged wrongdoing related to the
willful falsification of the waste certification for purpose
of discharging at the landfill. The charges against the
CEO of the Refinery of Gela SpA and the company itself
were dismissed, while a request to put on trial the CEO
of EniMed SpA and the company was approved. The
proceeding is in progress before the Court of Agrigento,
to which the proceeding has been transferred due to
territorial jurisdiction.
Versalis SpA – Preventive seizure at the Priolo Gargallo
plant. In February 2019, the Court of Syracuse at the
request of the Public Prosecutor of Siracusa ordered the
seizure of the Priolo/Gargallo plant as part of an ongoing
investigation concerning the offenses of dangerous
disposal of materials and environmental pollution, by the
former plant manager of Versalis, pursuant to Legislative
Decree no. 231/01. The Public Prosecutor’s thesis,
according to the consultants, is that the seized plants
have points of emissions that do not comply with the
Best Available Techniques (BAT), therefore resulting in
violation of the applicable legislation. Versalis has already
implemented certain plant upgrades designed to comply
with measures requested by the Public Prosecutor and
its consultants. Based on this, an appeal was filed against
the measure of precautionary seizure of the plant, which
determined the revocation of the seizure of the plants on
March 26, 2019. In March 2021, a notice of conclusion
of the preliminary investigations was notified, with the
formulation by the Public Prosecutor of the allegations
already previously stated.
xiii) Eni SpA – Fatal accident Ancona offshore platform. On
March 5, 2019, a fatal accident occurred at the Barbara F
platform in the offshore of Ancona. During the unloading
phase of a tank from the platform to a supply vessel,
there was a sudden failure of a part of the structure on
which a crane was installed, causing the death of an Eni
employee who was inside the control cabin of the crane
and injuries to two other workers. The Public Prosecutor of
Ancona initially opened an investigation against unknown
persons and ordered further technical appraisals relating
to the crane. As part of the technical assessment of the
incident, the Public Prosecutor resolved to put under
investigation two Eni employees who were in charge of
safety standards at the involved facility. Also the Company
has been put under investigation as entity liable pursuant
to Legislative Decree no. 231/01, and two employees of
the contractor company that owned the boat. In May 2021
Management report | Consolidated financial statements | Annex 292
the Public Prosecutor Office of Ancona issued a notice of
conclusion of the preliminary investigations and, following
the subsequent formulation of the request for indictment,
a preliminary hearing was set for June 27, 2022.
xiv) Raffineria di Gela SpA and Eni Rewind SpA –
Groundwater pollution survey and
reclamation
process of the Gela site. Following complaints made
by former contractors, the Public Prosecutor of Gela
ordered an inspection and seizure of the area called
Isola 32 within the refinery of Gela, where old and new
monitored landfills are located. The proceeding concerns
criminal allegations of environmental pollution, omitted
clean-up, negligent personal injury and illegal waste
management, as part of the execution of clean-up of soil
and groundwater as well as decommissioning activities
in the area currently managed by Eni Rewind SpA, also
on behalf of the companies Raffineria di Gela SpA, ISAF
SpA (in liquidation) and Versalis SpA with respect to
the efficiency and efficacy of the barrier system. The
Public Prosecutor acquired documents and evidence
at the Syndial office in Gela and at the refinery of Gela,
which, during the period January 1, 2017-March 20,
2019, managed the facilities involved in cleaning up
the groundwater area (TAF Syndial, site TAF-TAS and
pumping wells and hydraulic barrier). Subsequently a
decree was issued for the seizure of 11 piezometers of
the hydraulic barrier system with contextual guarantee
notice, issued by the Public Prosecutor of Gela against
nine employees of the Gela Refinery and four employees
of Syndial SpA.
Upon conclusion of unrepeatable technical investigations
and analyses both on the piezometers placed under
seizure, and on the TAF and TAS plants, on October 11,
2021, a preventive seizure order was notified by the judge
of the preliminary investigations of Gela, at the request
of the Public Prosecutor’s Office, with reference to the
plants used for the remediation of the site’s underground
water (groundwater extraction wells and TAF treatment)
managed today by Eni Rewind as well as the plant areas
intended for the implementation of the groundwater
remediation project. A
judicial administrator was
appointed to manage those facilities. Eni companies are
collaborating with the Judge to continue the remediation
activities and to provide a clear picture of the correctness
of their actions.
xv)
investigation.
Eni Rewind SpA and Versalis SpA – Mantua.
In August and
Environmental crime
September 2020, the Public Prosecutor of Mantua
notified the conclusion of the preliminary investigations
to several criminal proceedings. Several
relating
employees of the Eni’s subsidiaries Versalis SpA and
Eni Rewind SpA as well as of the third-party company
Edison SpA were notified of being under investigation.
Furthermore, the above-mentioned entities were being
investigated for administrative offences pursuant to
Legislative Decree no. 231/01. The Public Prosecutor is
alleging, with respect to some specific areas related to
the Mantua industrial hub, the crimes of unauthorized
waste management, environmental damage and
pollution, omitted communication of environmental
contamination and omitted clean-up. Following the filing
of defense briefs, the case has been dismissed against
some individuals and archived. The Public Prosecutor’s
Office then requested the indictment of the remaining
defendants. During the Preliminary Hearing, the MITE,
the Province of Mantua, the Municipality of Mantua
and Mincio Regional Park were allowed in the trial as
plaintiffs, while the companies Eni Rewind, Versalis and
Edison were sued as civil parties. The preliminary hearing
is in progress.
xvi) Versalis SpA – Brindisi plant factory flares and odor.
On May 18, 2018 the manager of the Versalis plant in
Brindisi and two other employees were summoned in
order to provide information regarding two episodes that
occurred in April 2018 which led to the activation of the
plant torches. The company cooperated with the judicial
authorities to provide information and exclude that such
events had a negative impact on air quality. Moreover,
the Company is reviewing available data and carrying
out upgrading to minimize any detrimental effect, even
if only visual, of the flaring phenomenon through the
construction of a new ground torch facility. At the end
of May 2020, in conjunction with a scheduled shutdown
of the plant, anomalous concentrations of benzene
and toluene were detected; on that basis, the mayor
of Brindisi ordered the plant shutdown. The order was
issued without any technical check on the real correlation
between the peaks detected in the air and the activities
in progress at the plant. After a close discussion with
the authorities in charge, the order was revoked. The
Public Prosecutor of Brindisi acquired information and
documents, also produced by the Company, related to
the aforementioned order to verify, also from a criminal
point of view, any connection or responsibilities. The
proceeding subsequently started a proceeding against
unknown persons.
The Company has provided all the competent local
Authorities, including the Public Prosecutor’s Office,
with all the information and data useful for the correct
reconstruction of the facts. Subsequently, in the context
of the criminal proceedings, the two pro-tempore
directors of the plant and the Operations manager
for the crimes referred to the disposal of hazardous
Eni Annual Report 2021
wastes. The proceeding is pending in the preliminary
investigation phase.
preliminary investigations. Subsequently, the summons
to trial was notified with the first hearing set for
September 8, 2022.
293
xvii) Eni SpA R&M Depot of Civitavecchia – Criminal
proceedings for groundwater pollution. In the period in
which Eni was in charge of the Civitavecchia storage hub
(2008-2018), pending the approval of a characterization
plan of the environmental status of the site, the Company,
in coordination with public authorities, adopted measures
to preserve the safety of the groundwaters and to pursue
the clean-up process of the site until its disposal.
The Public Prosecutor of Civitavecchia issued a notice of
conclusion of the preliminary investigations, contesting,
among others, the former manager of the Eni fuel storage
hub of Civitavecchia, the alleged crime of environmental
pollution in relation to the mismanagement of the hydraulic
barrier placed over the site aimed at putting under
emergency safety the contaminated groundwater, as part
of the clean-up process in progress. This circumstance
would have been reported by officials of a local authority
(ARPA), to whom technical feedback has been provided
several times over the years. Eni is under investigation
pursuant to Legislative Decree no. 231/01. The prosecutor
made a request for indictment. At the preliminary hearing a
procedural defect was detected, and the documents were
again sent to the Public Prosecutor’s Office.
Following the renewed preliminary hearing of February
10, 2022, the judge ordered the indictment of the people
involved, setting the hearing for June 26, 2023 and declared
the nullity of the request for indictment for legal persons,
due to lack of notification committal for trial, thus returning
the documents to the Public Prosecutor for its renewal.
xviii) Eni SpA R&M Refinery of Livorno – Criminal proceedings
for accidents at work. On October 20, 2020, a notice was
served at the Livorno refinery for Eni as entity subjected
to preliminary investigations in the context of a criminal
proceeding pending before the Public Prosecutor’s Office
of Livorno, in relation to an accident at work occurred in
summer of 2019 at an electrical substation of the Refinery
and as consequence two employees were injured. The
allegation is of aggravated personal injury while the
Company is accused of being the entity liable pursuant to
Legislative Decree no. 231/01.
The Judicial Police, delegated by the Public Prosecutor’s
Office, has made requests for documentary presentation
in order to acquire useful elements for assessing whether
the company has adopted a suitable 231 model with the
related procedures and management and organization
systems to prevent the alleged crime.
The Company collected and promptly provided the
required documentation. In September 2021, the Public
Prosecutor’s Office issued a notice of conclusion of the
1.2 Civil and administrative proceedings in the matters of
environment, health and safety
i)
Eni Rewind SpA – Versalis SpA – Eni SpA (R&M) –
Augusta Harbor. The Italian Ministry for the Environment
with various administrative acts required companies that
were operating plants in the petrochemical site of Priolo
to perform safety and environmental remediation works
in the Augusta harbor. Companies involved include Eni
subsidiaries Versalis, Eni Rewind and Eni’s Refining &
Marketing Division. Pollution has been detected in this
area primarily due to a high mercury concentration that is
allegedly attributed to the industrial activity of the Priolo
petrochemical site. The above-mentioned companies
contested
these administrative actions, objecting
in particular to the nature of the remediation works
decided and the methods whereby information on the
pollutants concentration has been gathered. A number of
administrative proceedings started on this matter were
subsequently merged before the Regional Administrative
Court. In October 2012, the Court ruled in favor of Eni’s
subsidiaries against the Ministry’s requirements for
the removal of the pollutants and the construction of a
physical barrier. In September 2017, the Ministry served
all the companies involved with a formal notice for the
start of remediation and environmental restoration of
the Augusta harbor within 90 days, basing its request on
an alleged ascertainment of liability on the basis of the
2012 provision of Regional Administrative Court. In June
2019, the Italian Ministry for the Environment set up a
permanent technical committee to review the matter of
the clean-up and reclamation of the Augusta harbor. The
report, recalling the warning of 2017, confirmed the thesis
of the parties on the responsibility of the companies co-
located for the contamination of the Rada and affirmed a
breach of the aforementioned warning by the companies,
also communicated to the Public Prosecutor’s Office. In
agreement with all the other companies involved, this
report and other parallel internal technical investigations
were challenged for defensive purposes. Eni’s subsidiaries
to
proposed
start a collaboration with other interested parties to
find remediation measures based on new available
environmental data collected by independent agencies,
without prejudice to the need for the parties to correctly
identify the legal entity responsible for the contamination
detected. In the meantime, the Company requested,
in full compliance with applicable environmental laws,
to establish a roadmap for identifying the companies
Italian Environmental Ministry
the
to
Management report | Consolidated financial statements | Annex
294
accountable for the environmental pollution and their
respective shares of responsibility in order to implement a
clean-up and remediation project.
In September 2020, the Company took part in the
Investigation Services Conference convened by the
Ministry of the Environment on the results of the technical
investigations and exhibited, together with its consultants,
the in-depth analyzes on the environmental state of the
Rada and its observations to the report which would lead to
the exclusion of any involvement of the Group companies
in the contamination detected.
On September 23, 2020 the company took part to a
preliminary investigation with the Italian MITE and the
competent bodies, and presented, together with the
technical consultants in charge, important insights on
the issue of the environmental state of the Augusta
harbor. In January 2021, the Company, having received
communication of the calling of a second environmental
review of the same subject to the first scheduled for
February 10, 2021, requested also to take part to this second
review and to be able to view the technical documents
subject to discussion. However, in February 2021, the
General Directorate for Environmental Remediation of the
Ministry deemed the request unacceptable.
Following a decision-making conference, in April 2021,
the Ministry decided that it could intervene in the
procedure aimed at identifying any reclamation and
clean-up activities to be carried out in the harbor which
costs are to be charged to the companies operating in the
area, on the basis of questionable assumptions, such as
the alleged non-compliance of those companies with the
formal notice of September 7, 2017 which had ordered
those companies to commence reclamation and clean-up
activities. The company filed an appeal and urged the Free
Consortium of Syracuse (LCCS) to start the process of
identifying the responsible for the pollution. Interlocutions
are underway with the Ministry and the LCCS to solicit a
response to this request.
ii) Eni SpA – Eni Rewind SpA (former Syndial SpA) –
Raffineria di Gela SpA – Claim for preventive technical
inquiry. In February 2012, Eni’s subsidiaries Raffineria di
Gela SpA and Eni Rewind SpA and the parent company
Eni SpA (involved in this matter through the operations of
the Refining & Marketing Division) were notified of a claim
issued by the parents of children with birth defects in the
Municipality of Gela between 1992 and 2007. The claim
called for an inquiry aimed at determining any causality
between the birth defects suffered by these children
and any environmental pollution caused by the Gela site,
quantifying the alleged damages suffered and eventually
identifying the terms and conditions to settle the claim.
The same issue was the subject of previous criminal
proceedings, of which one closed without determining any
illegal behavior on the part of Eni or its subsidiaries, while
a further criminal proceeding is still pending. In December
2015, the three companies involved were sued in relation
to a total of 30 cases of compensation for damages in civil
proceedings. In May 2018, the Court issued a first instance
judgment concerning one case. The Judge rejected the
claim for damages, acknowledging the arguments of
the defendant companies in relation to the absence of
evidence concerning the existence of a causal link between
the birth defects and the alleged industrial pollution.
The judgment has been appealed by the claimants.
In June 2021 the Civil Court of Gela issued a second
judgment rejecting the claim for compensation, recognizing
the validity of the arguments of the defendant companies
regarding the lack of evidence on the existence of a cause
between the pathology and the alleged industrial pollution.
The counterparties filed an appeal and a hearing was set
for March 17, 2022, then postponed to April 20, 2022.
iii) Environmental claim relating to the Municipality of
Cengio. Since 2008 a brought by the Italian Ministry for
the Environment and the Delegated Commissioner for
Environmental Emergency in the territory of the Municipality
of Cengio is pending at first instance before the Court of
Genoa. Those parties summoned Eni Rewind before a Civil
Court and demanded that Eni’s subsidiary compensate for
the environmental damage relating to the site of Cengio.
The request for environmental damage amounted to €250
million plus an additional amount for health damage to be
quantified during the proceeding. The plaintiffs accused
Eni Rewind of negligence in performing the clean-up and
remediation of the site.
Between 2014 and 2021, Eni and the Ministry of the
Environment tried to settle the proceeding, without however
reaching a definitive agreement. The Judge restarted the
proceeding with the filing, on December 30, 2021 of the
definitive technical review from an appointed consultant.
This review is particularly positive for Eni Rewind as it
highlights the story of the contamination, setting the
baseline at 1989/1990 (date of Enimont transfer) and
considering there was no subsequent deterioration. The
appraisal, among other things, highlights the Ministry’s
negligence towards the settlement proposals advanced by
Eni and which would have brought benefits to the territory.
At the hearing of February 24, 2022, following a request for
filing of documentation received by the plaintiff, the judge
ordered the admission of part of the documentation and
withheld the case for decision, allowing the parties 60 days
for the filing of final briefs and 20 days for the reply notes.
Meanwhile, on July 3rd, 2020, the EU infringement procedure
on area A1 (initiated voluntarily by the Company and at the
request of the Ministry of the Environment) was concluded
Eni Annual Report 2021
and the Company was able to remedy the initial failure
to make the clean-up plan of the industrial site of Cengio
undergo a full environmental appraisal. The Company’s
position on the adequacy of the environmental intervention
measures adopted was therefore further strengthened.
In March 2021, the Inspection Commission also issued
a test certificate for the works carried out on the soils,
thereby further strengthening the restorative suitability of
the measures carried out by the Company.
On August 10, 2021, the Company filed an extraordinary
appeal to the President of the Republic to eliminate the
part in which the Company was requested to start a new
remediation procedure in order to rebuild, in the light of
an alleged contamination, the model and the consequent
interventions aimed at its containment/ elimination, as well
as against the opinion of ISPRA-ARPA Liguria on the health
risk analysis for a portion of the site of Cengio.
iv) Val d’Agri – Eni/Vibac. In September 2019 a claim was
brought in the Court of Potenza against Eni. The plaintiffs
are 80 people, living in different municipalities of the
Val d’Agri area, who are complaining of economic, non-
economic, biological and moral damages, all deriving
from the presence of Eni’s oil facilities in the territory. In
particular, the claim refers to certain events which allegedly
caused damage to the local community and the territory
(such as a 2017 spill, flaring events since 2014, smelly and
noisy emissions). The Judge has been asked to ascertain
Eni’s responsibility for causing emissions of polluting
substances into the atmosphere. The plaintiffs have also
requested that Eni be ordered to interrupt any polluting
activity and be allowed to resume industrial activities on
condition that all the necessary remediation measures
be implemented to eliminate all of the alleged dangerous
situations. Finally, they are asking that Eni compensate all
direct and indirect property damages, current and future, to
an extent that will be quantified in the course of the case.
At the end of the trial phase, the Judge submitted to the
parties the proposal for an extra-judicial settlement, fixing
a deadline to present further proposals on the matter.
The parties did not adhere to the conciliatory proposal.
During the last hearing on February 19, 2021, the Judge
set the hearing for the clarification of the conclusions on
June 30, 2023.
v) Eni SpA – Climate change. In 2017 and 2018, local
government authorities and a fishing association brought
in the courts of the State of California seven proceedings
against Eni subsidiary Eni Oil & Gas Inc. and other
companies. These proceedings claim compensation for
the damages attributable to the increase in sea level and
temperature, as well as to hydrogeological instability. The
cases have been transferred, by request of the defendants,
295
from the State Courts to the Federal Courts. A specific
request has been filed, highlighting the lack of jurisdiction
of the State Courts.
In 2019, the Federal Court referred the cases to the State
Courts. The defendants then appealed to the Ninth Circuit
Court of Appeals, challenging the order for postponement.
All proceedings were suspended pending the appeal
before the Ninth Circuit Court. On May 26, 2020 the
proceedings resumed in the State Courts. On July 9, 2020,
Eni Oil & Gas Inc., together with other defendants, signed a
petition for rehearing “en blanc” to request a review of the
postponement decision by the competent 9th Circuit Court.
The dispute was suspended until a decision is made on
the petition for rehearing. The Court rejected the petition
for rehearing en banc but, at the request of the defendants,
granted a suspension of the proceedings for 120 days
(until January 2021) to allow the defendants to present a
petition for certiorari to the Supreme Court of the United
States in order to obtain the revision of the rejection. The
petition was then presented in January 2021. The Supreme
Court, accepting the petition, ordered Ninth Circuit Court to
reconsider the question of jurisdiction by evaluating all the
legal arguments in favor of federal jurisdiction.
In June 2021, defendants filed a motion (“Consent Motion”)
in the Ninth Circuit Court setting out arguments in favor of
federal jurisdiction in addition to the initial defenses.
In early July 2021, Consent Motion was rejected. Pending
the decision of the Ninth Circuit Court – which is expected
within one year and which, as indicated by the Supreme
Court, will in any case have to take into consideration
all the potential legal bases of federal jurisdiction – the
proceedings remain suspended.
vi) Eni Rewind/Province of Vicenza – Clean-up process
for Trissino site. On May 7, 2019 the Province of Vicenza
issued a warning, imposing on certain individuals and
companies as MITENI SpA in bankruptcy, Mitsubishi
and ICI the obligation to clean-up the Trissino site where
MITENI carried out its industrial activity. Based on the
analysis carried out by administrative parties, significant
concentrations of substances considered highly toxic and
carcinogenic were allegedly discovered in groundwater
and in surface water at this site. The analysis carried out by
the Province of Vicenza with the direct involvement of the
Istituto Superiore di Sanità reported the presence of these
substances in the blood of about 53,000 people in the
area. The action of health analysis and monitoring by the
institutions is expected to increase. The Province warned
some individuals, including a former employee who served
between 1988 and 1996 as CEO of a company that was
subsequently acquired by Eni Rewind.
initial phase of the administrative procedure,
In an
there were no references to former company Enichem
Management report | Consolidated financial statements | Annex
296
Synthesis, which Eni Rewind acquired, therefore the legal
assistance and the defense strategy were concentrated
supporting only the persons involved. However, Eni Rewind
was called into question as the “successor” of Enichem in
several appeals before the Regional Administrative Court
as the majority shareholder of MITENI. In February 2020,
the Province extended the proceeding also to Eni Rewind,
which filed a counterclaim for having its position taken out
of the procedure.
However, on October 5, 2020 the Province summoned Eni
Rewind to take part in the remediation interventions on
the site, including participation in technical meetings and
at the conferences that would be convened by the public
entities in relation to the site remediation activities.
Eni Rewind appealed to a Regional Administrative Court
against the Province claims and orders. Eni Rewind
is participating
in these meetings, carrying out the
environmental interventions and has made itself available
to carry out – as part of the project approved by the
territorial administrations in charge – further anti-pollution
interventions on a voluntary basis and without giving any
acquiescence with respect to the liability charges for the
pollution by chemical agents. A provision for risks has been
accrued for the execution of these interventions.
2. Proceedings
concerning
criminal/administrative
corporate responsibility
i) Block OPL 245 – Nigeria. A first-degree judgment of
acquittal was issued by a tribunal in Milan in March 2021 in
a criminal case pending against certain of Eni’s employees
and the Company itself as entity liable as per Italian
Legislative Decree no. 231/01 for alleged international
corruption in connection with the acquisition in 2011 of
the OPL 245 exploration block in Nigeria. The case dates
back to July 2014, when the Public Prosecutor of Milan
served Eni with a notice of investigation pursuant to
Italian Legislative Decree no. 231/01. The proceeding was
commenced following a claim filed by NGO ReCommon
relating to alleged corruptive practices which, according
to the Public Prosecutor, allegedly involved the Resolution
Agreement made on April 29, 2011 relating to the so-
called Oil Prospecting License of the offshore oilfield that
was discovered in OPL 245. Eni fully cooperated with
the Public Prosecutor and promptly filed the requested
documentation. Furthermore, Eni voluntarily reported the
matter to the US Department of Justice (“DoJ”) and the
US SEC. In July 2014, Eni’s Board of Statutory Auditors
jointly with the Eni Watch Structure resolved to engage an
independent, US-based law firm, expert in anticorruption, to
conduct a forensic, independent review of the matter, upon
informing the Judicial Authorities. After reviewing the matter,
the US lawyers concluded that they detected no evidence of
wrongdoing by Eni in relation to the 2011 transaction with
the Nigerian government for the acquisition of the OPL 245
license. In September 2014, the Public Prosecutor notified
Eni of a restraining order issued by a British judge who
ordered the seizure of a bank account not pertaining to Eni
domiciled at a British bank following a request from the
Public Prosecutor. Since the act had also been notified to
some individuals, including the CEO of Eni and the former
Chief Development, Operation & Technology Officer of Eni
and the former CEO of Eni, it was assumed that the same
had been registered in the register of suspects at the Milan
Prosecutor’s office. During a hearing before a court in
London in September 2014, Eni and its current executive
officers stated their non-involvement in the matter regarding
the seized bank account. Following the hearing, the Court
reaffirmed the seizure. In December 2016, the Public
Prosecutor of Milan notified Eni of the conclusion of the
preliminary investigation and requested Eni’s CEO, the Chief
Development, Operations and Technological Officer and
the Executive Vice President for international negotiations
to stand trial, as well as Eni’s former CEO and Eni SpA,
pursuant to Italian Legislative Decree no. 231/01. Upon
the notification to Eni of the conclusion of the preliminary
investigation by the Public Prosecutor, the independent US-
based law firm was requested to assess whether the new
documentation made available from Italian prosecutors
could modify the conclusions of the prior review. The US
law firm was also provided with the documentation filed in
the Nigerian proceeding mentioned below. The independent
US law firm concluded that the reappraisal of the matter
in light of the new documentation available did not alter
the outcome of the prior review. In September 2019, the
DoJ notified Eni that based on the information it currently
possessed, the DoJ was closing its investigation of Eni in
connection with OPL 245 without the filing of any charges.
In December 2017, the Judge for preliminary investigation
indictment of all the parties mentioned
ordered the
above, and other parties under investigation by the Public
Prosecutor, before the Court of Milan. The request of the
Federal Government of Nigeria (FGN) for admission as
a civil claimant in the proceedings was granted in July
2018. The first instance trial of the Milan Prosecutor’s OPL
245 charges began before the Court of Milan on June 20,
2018. Following the discussion of the parties, in response
to the Milan Prosecutor’s request of conviction of all the
individuals and companies involved, at the hearing of March
17, 2021 the judge fully acquitted all the defendants, on the
ground that there was no case.
In June 2021, the Second Instance Court of Milan also
acquitted on the same grounds certain third party defendant
unrelated to Eni who had opted for a shortened procedure
and had been convicted in the first acquittal. This latter
decision has become final.
Eni Annual Report 2021
297
On July 29, 2021 the Public Prosecutor of Milan and the
plaintiff, Government of Nigeria, filed an appeal against the
first-degree sentence of March 17, 2021. The hearing is
scheduled July 19, 2022.
In January 2017, Eni’s subsidiary Nigerian Agip Exploration
Ltd (“NAE”) became aware of an Interim Order of Attachment
(“Order”) issued by the Nigerian Federal High Court upon
request from the Nigerian Economic and Financial Crimes
Commission (EFCC), attaching OPL 245 temporarily pending
a proceeding in Nigeria relating to alleged corruption and
money laundering. In March 2017, the Nigerian Court revoked
the Order accepting the recourse filed by NAE and its partner.
Subsequently Eni became aware of the filing of the objections
formulated by the EFCC and made a copy available to the
US lawyers in charge of the aforementioned independent
verification. The latter have concluded that these further
analyses confirm the conclusions of the previous ones, on
the basis of which no evidence of unlawful conduct by Eni
emerged in relation to the acquisition of the OPL 245 license
from the Nigerian government.
In November 2018, Eni SpA and its subsidiaries NAE, NAOC
and AENR (as well as some companies of the Shell Group)
were notified of the intention of the Federal Government of
Nigeria “FGN” to bring a civil claim before an English court to
obtain compensation for damages allegedly deriving from
the transaction that resulted in assignment of the OPL 245
to NAE and Shell subsidiary SNEPCO. On April 15, 2019 the
Nigerian subsidiaries NAE, NAOC and AENR received formal
notification of the commencement of the proceeding, while
similar notification was received by Eni SpA on May 16,
2019. In the introductory deeds of the proceeding, the claim
is set at $1,092 million or at any other amount that will be
established during the proceedings. The FGN has based its
assessment on an estimated fair value of the asset of $3.5
billion. Eni’s interest in the asset is 50%. As the FGN is also
acting as claimant in the Italian proceeding before the Court
of Milan, this claim appears to duplicate the claims made
before the Milan Court against Eni employees. On May 22,
2020, the Judge accepted the argument presented by Eni
and declined to exercise jurisdiction over the case, because
the same case was pending before an Italian tribunal. The
Judge also denied the FGN permission to appeal against
the decision. Similarly, the Appeal Court rejected the FGN’s
claim to appeal the latter decision of the Judge, thus making
it definitive.
On January 20, 2020, NAE was notified of the beginning of
a new criminal case before the Federal High Court in Abuja.
The proceeding, mainly focused on the accusations against
Nigerian persons (including the Minister of Justice in office
in 2011, at the time of the disputed facts), involves NAE
and SNEPCO as co-holders of the OPL 245 license. These
Nigerian persons were accused in 2011 of illicit corruption,
which NAE and SNEPCO allegedly unlawfully facilitated.
The beginning of the trial, originally scheduled for the end
of March 2020, was postponed as a result of the closure of
judicial offices in Nigeria due to the COVID-19 emergency
and resumed at the beginning of 2021.
ii) Congo. In March 2017, the Italian Finance Police served
Eni with an information request in accordance with the
Italian Code of Criminal Procedure in connection with an
investigative file opened by the Public Prosecutor of Milan
against unknown persons. The request related in particular
to the agreements signed by Eni Congo SA with the Ministry
for Hydrocarbons of the Republic of Congo in 2013, 2014
and 2015 in relation to exploration, development and
production activities concerning certain permits held by Eni
Congo SA for Congolese projects and Eni’s relationships
with Congolese companies that hold stakes in those
projects. In July 2017, the Italian Financial Police, on behalf
of the Public Prosecutor of Milan, served Eni with another
information request and a notice of investigation pursuant
to Legislative Decree no. 231/01 for alleged international
corruption. The request expressly stated that it was
based in part on the March 2017 information request and
concerned the relationship of Eni and its subsidiaries with
certain third-party companies from 2012 to the present.
Eni produced all of the documentation requested in March
and July 2017 and voluntarily disclosed this matter to the
relevant US authorities (SEC and DoJ). In January 2018, the
Public Prosecutor’s Office requested a six-month extension
of the deadline for conducting its preliminary investigation
into this matter, from January 31, 2018 until July 30, 2018.
Subsequently in July 2018, the Public Prosecutor requested
a second extension until February 28, 2019. In April 2018,
the Public Prosecutor of Milan served Eni SpA with a
further request for documentation and notified a former Eni
employee, who was the then Chief Development, Operation
& Technology Officer, of a search order stating that he and
another Eni employee had been placed under investigation.
In October 2018, the Public Prosecutor ordered the seizure
of an e-mail account of another Eni manager who was
formerly the general director of Eni in Congo during the
period 2010-2013. In December 2018 and subsequently in
May, September and December 2019, Eni was notified by
the Public Prosecutor of Milan of a request for documents
in accordance with the Italian Code of Criminal Procedure,
concerning certain economic transactions between Eni
Group companies and certain third-party companies. All the
required documentation has been produced to the Judge.
In September 2019, the Company was informed that the
Company’s CEO was served with a search decree and an
investigation decree in connection with an alleged violation
of article 2629 bis of the Italian Civil Code which penalizes
directors of listed companies, who fail to communicate
conflicts of interest. The alleged omission relates to the
Management report | Consolidated financial statements | Annex
298
supply of logistics and transportation services to certain
Eni’s subsidiaries operating in Africa, including Eni Congo
SA, by third-party companies owned by Petroserve Holding
BV, in the period 2007-2018. The claims are based on the
allegations that the wife of the Company’s CEO retained
a shareholding of the above-mentioned holding company
during part of the period of time under investigation. The
Board of Directors of Eni SpA has never been involved in
any resolution concerning the suppliers under investigation.
Subsequently, on June 15, 2020, the company was informed
that an extension of the investigations relating to these
allegations was requested until December 21, 2020.
In April 2018, the Board of Statutory Auditors, the Watch
Structure and the Control and Risk Committee of Eni jointly
appointed an independent law firm and a professional
consulting company, knowledgeable in the matter of anti-
corruption, to carry out a forensic review of facts relating
to Eni’s work in Congo. Such review did not find any factual
evidence as to the involvement of Eni, nor of any Eni
employees and key managers, in the alleged crimes.
In November 2019, following the notification of further
investigative documents, the Board of Statutory Auditors,
the Watch Structure of Eni and the Control and Risk
Committee asked the professional consultants, which
had been engaged in 2018, also to review the conclusions
reached, in the light of the documentation made available
following the decree notified to the CEO in September 2019.
The second report of the consultants, which was delivered
in July 2020, integrates the findings achieved in the first
report, particularly indicating that: (i) it is probable that
the CEO’s wife retained a shareholding in the Petroserve
Group for a few years, at least, starting from 2009 until
2012; (ii) there is an absence of evidence to contradict the
statements made by the CEO as to his lack of knowledge
of his wife’s interests in the ownership of Petroserve Group,
and; (iii) there is an absence of evidence that the activity of
the abovementioned people was carried out in the interest
of Eni.
On September 9, 2020, Eni was notified of a decree, setting
a hearing due to the filing by the Public Prosecutor of Milan
requesting a restrictive measure pursuant to Legislative
Decree no. 231/01, relating to some oilfields in Congo. In
particular, the Judge requested Eni to be banned from
exploiting Djambala II, Foukanda II, Mwafi II, Kitina II, Marine
VI Bis, Loango, Zatchi oilfields for 2 years and subordinately
the appointment of a judicial commissioner to manage
those oilfields.
In the decree setting the hearing for September 21, 2020,
the judge for preliminary investigations stated that the
public prosecutor’s injunction request was time-barred by
a five-year statute of limitations. The claim had expired on
July 14, 2020, since the Public Prosecutor alleged that the
conduct in question was committed only until July 14, 2015.
However, this five-year limitation period had been suspended
until September 16, 2020 due to recent legislation regarding
the COVID-19 pandemic. The Judge also stated that a claim
was pending before the Constitutional Court about the
constitutional legitimacy of the aforementioned COVID-19
legislation, with particular reference to the principle of
non-retroactivity of an unfavorable rule. Therefore, the
hearing first set for September 21, 2020 was postponed
initially to December 10, 2020 pending the resolution of the
Constitutional Court case and then, once the Constitutional
Court declared the COVID-19 rule valid, to February 17,
2021, in order to await the entry of the opinion explaining
the Constitutional Court’s reasoning.
On March 15, 2021, the Board of Directors of Eni SpA
approved a settlement with
the Public Prosecutor
amounting to a €11.8 million fine. At the hearing on March
25, 2021 the Judge for Preliminary Investigations approved
the settlement and the Prosecutor also revoked the request
for restrictive measures for Eni SpA.
3. Other proceedings concerning criminal matters
i) Eni SpA (R&M) – Criminal proceedings on fuel excise tax. A
criminal proceeding is currently pending, relating to alleged
evasion of excise taxes in the context of retail sales in the
fuel market. In particular, the claim states that the quantity
of oil products marketed by Eni was larger than the quantity
subjected to the excise tax. This proceeding (no. 7320/2014
RGNR) concerns the combination of distinct investigations:
(i) a first proceeding, opened by the Public Prosecutor’s
Office of Frosinone involved a company (Turrizziani Petroli)
purchaser of Eni’s fuel. This investigation was subsequently
extended to Eni. The Company fully cooperated and
provided all data and information concerning the excise
tax obligations for the quantities of fuel coming from the
storage sites of Gaeta, Naples and Livorno. Such proceeding
referred to quantities of oil products sold by Eni, allegedly
larger than the quantity subjected to the excise tax; (ii) a
second proceeding concerning an investigation by the
Public Prosecutor’s Office of Prato, commenced in regard
to the deposit of Calenzano and relates to abduction of fuel
through manipulation of the fuel dispensers, subsequently
extended also to the Refinery of Stagno (Livorno); (iii) a
third proceeding, opened by the Public Prosecutor’s Office
of Rome, concerns alleged missing payment of excise tax
on the surplus of the unloading products, as the quantity of
such products was larger than he quantity reported in the
supporting fiscal documents. This proceeding represents a
development of the first proceeding mentioned above and
substantially concerns similar facts presenting, however,
some differences with regard to the nature of the alleged
crimes and the responsibility. The Public Prosecutor’s
Office of Rome has alleged the existence of a criminal
Eni Annual Report 2021
299
conspiracy aimed at habitual abduction of oil products
at all of the 22 storage sites which are operated by Eni
in Italy. Eni is cooperating with the Prosecutor in order to
defend the correctness of its operation. In September 2014,
a search was conducted at the office of the former chief
of the R&M Division in Rome. The reasons for the search
are the same as the above-mentioned proceeding as the
ongoing investigations also relate to a period of time when
the officer was in charge at Eni’s R&M Division. In March
2015, the Prosecutor of Rome ordered a search at all the
storage sites of Eni’s network in Italy as part of the same
proceeding. The search was intended to verify the existence
of fraudulent practices aimed at tampering with measuring
systems functional to the tax compliance of excise duties in
relation to fuel handling at the storage sites. In September
2015, the Public Prosecutor of Rome requested a one-off
technical appraisal aimed to verify the compliance of the
software installed at certain metric heads previously seized
with those lodged by the manufacturer at the Ministry for
Economic Development. The technical appraisal verified
the compliance of the software tested. The proceeding was
then extended to a large number of employees and former
employees of the Company. Eni has continued to provide
full cooperation to the authorities.
During 2018, as part of the proceeding no. 7320/2014,
the Public Prosecutor of Rome notified the conclusion of
the preliminary investigations in relation to the criminal
proceeding concerning the Calenzano, Pomezia, Naples,
Gaeta and Ortona storage sites and the Livorno and
Sannazzaro refineries. Based on the outcome of the
investigations, as far as Eni is concerned, the proceeding
involves former managers and directors of the logistic
sites and refineries indicated above concerning alleged
aggravated and continuous non-payment of excise duties,
alteration and removal of seals, use and possession of false
measures and weights instruments. In addition, for the
Calenzano site, three employees and their manager of the
storage site were accused of alleged procedural fraud.
In September 2018, Eni received, as injured party, the
notification of the schedule of hearing issued by the Court
of Rome, in relation to criminal association and other minor
claims, against numerous persons under investigation –
including over forty Eni employees – subject of a separated
proceeding (no. 22066/17 RGNR), for which, in May 2017,
the Public Prosecutor’s Office had requested the dismissal.
At the end of the hearing in December 2018, the Judge
accepted the request for dismissal for several persons
under investigation, including 13 Eni employees. The
Judge also initially rejected the request of indictment for
criminal association relating to 28 Eni employees (including
the former managers of the R&M Division). Following
the preliminary hearing, a sentence not to prosecute was
achieved in December 2019 for all the defendants.
During 2019, also in relation to tax pending, a definition was
reached, and Eni made the payments for the higher excise
duties and other taxes for which it was not possible to
reconstruct the related justification.
For the main proceedings (no. 7320/2014 RGNR), in 2019
a detailed preliminary hearing was held before the Judge
of the preliminary hearing of Rome who, following the
outcome of the discussions, ordered the indictment for all
the defendants.
Since 2020, the first instance judgment is pending before
the Monocratic Court of Rome for offenses relating to
excise duties, forgery, and procedural fraud. The trial is
underway with witnesses and technical consultants.
ii) Eni SpA – Public Prosecutor of Milan – Criminal proceeding
no. 12333/2017. In February 2018, Eni was notified of
a search and seizure decree in relation to allegations of
associative crime aimed at slander and at reporting false
information to a Public Prosecutor. In the decree, the
Prosecutor of Milan included, among the other persons
under investigation, a former external lawyer and a former
Eni manager, at the time of the facts holding a strategic
position with the Company. According to the decree, the
association was allegedly aimed at interfering with the
judicial activity in certain criminal proceedings involving,
among others, Eni and some of its directors and managers.
Eni’s Control and Risks Committee, having consulted the
Board of Statutory Auditors, and together with the Watch
Structure, agreed to engage an auditing firm to perform
an internal audit of relevant facts and circumstances and
records and documentation relating to the matter with
respect to the events of the aforementioned proceeding,
including a forensic review. The final report, submitted
to the Control and Risk Committee, the Watch Structure
and the Board of Statutory Auditors on September 12,
2018, concluded that following the review carried out with
respect to the allegations made by the Public Prosecutor
of Milan, there was not sufficient factual evidence to prove
the involvement of the aforementioned former manager of
Eni in the alleged crimes. On April 19, 2018, the Board of
Directors appointed two external consultants, a criminal
lawyer and a civil lawyer to provide independent legal
advice in relation to the facts under investigation. Their
report, dated November 22, 2018, did not find facts that
could suggest any involvement of any Eni employees in
the crimes alleged by the Public Prosecutor. On June 4,
2018, Consob, the Italian markets regulator, requested to
be informed about the above-mentioned proceeding. The
request was addressed to the Company and to its Board of
Statutory Auditors.
Specifically, Consob asked about the outcome of the
forensic review and to be updated about any other audit
action taken in relation to the matter by the Company and
Management report | Consolidated financial statements | Annex
300
by its Board of Statutory Auditors. The Board of Statutory
Auditors was also requested to report about the findings
of the additional audit program agreed with an external
auditor regarding the matter and to keep Consob updated
about any further initiatives adopted. The Company
answered the request on June 11, 2018. Subsequently,
the Company finalized
response by sending
its
further documentation including the final report of the
independent third party and the reports of the consultants
of the Board of Directors. The Board of Statutory Auditors
has periodically updated Consob on the initiatives taken as
part of the Board’s monitoring responsibilities with several
communications, the last of which was on July 25, 2020.
On June 13, 2018, Eni was notified of a request from the
Prosecutor’s Office to transmit certain documentation in
accordance with the Italian Code of Criminal Procedure.
The request targeted evidence and documents relating
to the internal audit performed by the Company and any
possible external review concerning certain tasks that had
been assigned to the former external lawyer with respect
to Eni. This lawyer appears to be under investigation as
part of this proceeding. The reports of the independent
third party and of the consultant of the Board of Directors
were also sent to the Public Prosecutor.
In May and June 2019, in the context of the same
proceeding, the Court of Milan notified Eni and three of its
subsidiaries (ETS SpA, Versalis SpA, Ecofuel SpA) of various
requests for documentation in accordance with the Italian
Code of Criminal Procedure. At the same time, on May
23, 2019, Eni was served a notice that the Company was
being investigated for administrative offences pursuant
to Legislative Decree no. 231/01, with reference to the
crime sanctioned by the Italian Penal Code concerning
“inducement not to make statements or to make false
statements to the judicial authority”.
The object of the aforementioned requests particularly
concerned the relations with two business partners,
access to Eni offices of certain third parties, also on
behalf of one of the above-mentioned business partners,
the mailbox of some employees and former employees,
the documentation concerning the relations (and the
interruption of those relations) with the former external
lawyer investigated in the proceeding, the internal audit
reports and the reports of the Company’s bodies that dealt
with assessing these relationships. Following internal
audits, on June 21, 2019, the Company sued for fraud a
former employee at its subsidiary ETS, who was fired on
May 28, 2019, and also filed a complaint before the Judicial
Authority to ascertain possible complicity in fraud of other
third parties. On August 14, 2019, the Italian tax police
sent a new request for information to Eni, concerning the
economic relations between Eni Group companies and an
external professional.
In November 2019, Eni received a notice of extension of
the preliminary investigations. The notice also covered
the investigations of the alleged breach by Eni of certain
provisions of Legislative Decree no. 231/01 until May 2020.
Furthermore, certain former Eni employees have been
charged with various criminal allegations. Those employees
were a former manager of Eni’s legal department, the
former Chief Upstream Officer of Eni and an employee
that was fired in 2013. A number of third parties have also
been indicted, among them, two former legal consultants
of Eni. On January 23, 2020, a search decree and an
indictment were notified to the Company’s Chief Services &
Stakeholder Relations Officer, the Senior Vice President for
Security and a manager of the legal department. Following
the requests for review of the aforementioned decree,
the material deposited by the Public Prosecutor’s Office
was made available to the Company, which requested its
examination by the same consultants appointed in 2018
to examine the documentation. Subsequently, in June,
July and September 2020, Eni was notified by the Public
Prosecutor of Milan of several requests for documentation
concerning, in particular: the results of the inquiries
carried out by the internal audit department following an
anonymous report relating to a hospitality event in 2017;
some clarifications regarding an invoice issued by an
external law firm; the internal audit report on relations
with a commercial third party; work commitments of the
Chief Services & Stakeholder Relations Officer relating to
certain dates of 2014 and 2016; and the documentation
concerning the dismissal of a former Eni employee. All the
required documentation has been produced over time to
the Judicial Authority.
On November 9, 2020, the Company was informed that
Eni’s CEO was notified about his right to participate, through
its technical consultant, in the scheduled technical review of
the content of a telephone device seized from a former Eni
employee.
In relation to what was previously requested by the Judicial
Authorities in July 2020 and to supplement the already
produced information, in the period January-March 2021 all
the additional documentation concerning an ongoing dispute
with a commercial counterpart was delivered over time.
On December 10, 2021, a notice of conclusion of the
preliminary
twelve
individuals and five companies. A former Eni executive
fired in 2013 and a former external Eni lawyer are accused
of having slandered the Chief Executive Officer and the
Human Capital Director & Procurement Coordination of Eni.
The Chief Executive Officer, the Human Capital Director &
Procurement Coordination, the Senior Vice President for
Security and Eni SpA itself, however, do not appear in the
request for indictment.
The Eni subsidiary, ETS, has been charged as entity liable
investigations was sent against
Eni Annual Report 2021
301
in connection with the crime of inducement at omitting
information and/or rendering misleading
to provide
information to the judicial authority, for which also the
former top manager is being investigated. ETS has already
been placed in voluntary liquidation with a resolution of Eni’s
Board of Directors of July 2020 which became effective on
January 1st, 2021.
water and substances destined for food against the former
plant manager of Eni Rewind SpA in Porto Torres, and
subsequently against Eni Rewind itself and Versalis SpA as
alleged civil parties. The proceeding ended with a sentence
of no place to proceed due to a statute of limitations, which
has become final.
4. Tax proceedings
i) Dispute for omitted payment of a property tax for some
oil offshore platforms located in territorial waters. Tax
disputes are pending with some Italian local authorities
regarding whether Oil & Gas offshore platforms located
within territorial boundaries should be subject to a property
tax in the period 2016-2019. In 2016 the tax regulatory
framework changed due to enactment of Law no. 208/2015,
which excluded from the scope of the property tax the value
of plants instrumental to specific production processes. In
addition, the Finance Department recognized that offshore
platforms met the requirements for classification as
instrumental plants and consequently are excluded from the
scope of the property tax (resolution no. 3 of June 1st, 2016).
Based on this interpretation, Eni did not pay any property
tax for the years 2016-2019. However, the ruling of the
Department of Finance is not binding for local authorities
with taxing powers as recognized by the Third Instance
Court and some of these have issued assessment notices
for 2016-2019. The Company filed an appeal against these
notices. Although Eni believes that oil platforms located in
the territorial sea should be excluded from the tax base of
the property tax on the base of the interpretation of the law
in the light of the resolution of the Department of Finance,
having assessed the risks of losing in pending disputes,
the Company accrued a risk provision, the amount of
which excludes fines since Eni’s conduct was based on the
administrative resolution, as well as taking into account the
reduction of the tax base excluding the “plant component”
as provided by the law. The proceeding is still ongoing.
Law Decree 124/19 (enacted with Law 157/19) has
established, starting from 2020, that marine platforms are
subject to a new property tax that will replace and supersede
any other ordinary local property tax eventually levied on
these plants up to 2019. This rule has therefore sanctioned,
starting from 2020, the existence of the tax requirement for
these plants.
5. Settled proceedings
i) Eni Rewind SpA and Versalis SpA – Porto Torres
– Prosecuting body: Public Prosecutor of Sassari.
Proceedings initiated in 2011 by the Public Prosecutor of
Sassari for alleged environmental disaster and poisoning of
ii) Eni Rewind SpA – Summon for alleged environmental
damage caused by DDT pollution in Lake Maggiore.
In May 2003, the Italian Ministry for the Environment
claimed compensation from Eni Rewind for alleged
environmental damage caused by the activity at the Pieve
Vergonte plant in the years 1990 through 1996. In July
2008, the District Court of Turin ordered Eni Rewind to pay
environmental damages amounting to €1,833.5 million,
plus interests accrued from the filing of the decision. Eni
and its subsidiary deemed the amount of the environmental
damage to be absolutely groundless as the sentence lacked
sufficient elements to support such a material amount of
the liability from the volume of pollutants ascertained by
the Italian Environmental Ministry. During the proceedings
the technical appraisal requested by the Court validated
the activities of the technical discussions carried out by
the Company and concluded that: (i) no further measure
for environmental restoration is required; (ii) there was no
significant and measurable impact on the environment
of the ecosystem, therefore no restoration or damage
compensation should be claimed; the only impact seen
concerned fishing activity, with an estimated damage of
€7 million which could be already restored through the
measures proposed by Eni Rewind, and; (iii) the necessity
and convenience of dredging should be excluded, both
from the legal and scientific point of view, while confirming
technical and scientific correctness of the Eni Rewind’s
approach based on the monitoring of the process of natural
recovery, which is estimated to require 20 years.
In March 2017, the Second Instance Court: (i) excluded
the application of compensation for monetary equivalent,
and (ii) annulled the monetary compensation of €1.8 billion
requesting Eni Rewind to perform the already approved
clean-up project of the polluted areas, which comprise
groundwater, as well as compensatory remediation works.
The value of these compensatory works required by the
Court, in case of Eni Rewind’s failure or misperformance, is
estimated at €9.5 million. The clean-up project filed by Eni
Rewind was ratified by the authorities and is currently being
executed. Expenditures expected to be incurred have been
provisioned in the environmental provision; (iii) rejected all
other claims filed by the Ministry (including compensation
for non-material damage).
In April 2018, the Ministry for the Environment filed an
appeal to the Third Instance Court. Following this appeal,
the Company appeared in Court.
Management report | Consolidated financial statements | Annex
302
With sentence no. 18811 filed on July 2nd, 2021, the Third
Instance Court definitively ruled on the dispute regarding
environmental damage and the site of Pieve Vergonte,
rejecting the appeal presented by the Ministry of the
Environment, confirming the reasons of the Second Instance
Court. In particular, the Court confirmed the validity of the
defensive positions presented by the Company in terms of
restoration, also by implementing natural solutions, and in-
kind compensation for environmental damage.
clauses
contractual
Assets under concession arrangements
Eni operates under concession arrangements mainly in
the Exploration & Production segment and the Refining &
Marketing business line. In the Exploration & Production
segment,
governing mineral
concessions, licenses and exploration permits regulate the
access of Eni to hydrocarbon reserves. Such clauses can
differ in each country. In particular, mineral concessions,
licenses and permits are granted by the legal owners and,
generally, entered into with government entities, State oil
companies and, in some legal contexts, private owners.
Pursuant to the assignment of mineral concessions, Eni
sustains all the operational risks and costs related to the
exploration and development activities and it is entitled
to the productions realized. In respect of the mining
concessions received, Eni pays royalties in accordance with
the tax legislation in force in the country and is required
to pay the income taxes deriving from the exploitation of
the concession. In production sharing agreement and
service contracts, realized productions are defined based
on contractual agreements with State oil companies,
which hold the concessions. Such contractual agreements
regulate the recovery of costs incurred for the exploration,
development and operating activities (Cost Oil) and give
entitlement to the own portion of the realized productions
(Profit Oil). In the Refining & Marketing business line, several
service stations and other auxiliary assets of the distribution
service are located in the motorway areas and they are
granted by the motorway concession operators following
a public tender for the sub-concession of the supplying of
oil products distribution service and other auxiliary services.
In exchange for the granting of the services described
above, Eni provides to the motorway companies fixed and
variable royalties based on quantities sold. At the end of the
concession period, all non-removable assets are transferred
to the grantor of the concession for no consideration.
Environmental regulations
In the future, Eni will sustain significant expenses in relation
to compliance with environmental, health and safety laws
and regulations and for reclaiming, safety and remediation
works of areas previously used for industrial production and
dismantled sites. In particular, regarding the environmental
risk, management does not currently expect any material
adverse effect upon Eni’s Consolidated Financial Statements,
taking account of ongoing remediation actions, existing
insurance policies and the environmental risk provision
accrued in the Consolidated Financial Statements. However,
management believes that it is possible that Eni may incur
material losses and liabilities in future years in connection
with environmental matters due to: (i) the possibility of
as yet unknown contamination; (ii) the results of ongoing
surveys and other possible effects of statements required
by Legislative Decree no. 152/2006; (iii) new developments
in environmental regulation (i.e. Law no. 68/2015 on crimes
against the environment and European Directive 2015/2193
on medium combustion plants); (iv) the effect of possible
technological changes relating to future remediation; and (v)
the possibility of litigation and the difficulty of determining
Eni’s liability, if any, as against other potentially responsible
parties with respect to such litigation and the possible
insurance recoveries.
Emission trading
From 2021, the fourth phase of the European Union
Emissions Trading Scheme (EU-ETS) came in force. The
award of free emission allowances is performed based on
emission benchmarks defined at European level specific
to each industrial segment, except for the electric power
generation sector that is not eligible for allocations for no
consideration. This regulatory scheme implies for Eni’s
plants subject to emission trading a lower assignment of
emission permits compared to the emissions recorded in the
relevant year and, consequently, the necessity of covering
the amounts in excess by purchasing the relevant emission
allowances on the open market. In 2021, the emissions of
carbon dioxide from Eni’s plants were higher than the free
allowances assigned to Eni. Against emissions of carbon
dioxide amounting to approximately 17.74 million tonnes,
Eni was awarded free emission allowances of 5.34 million
tonnes, determining a deficit of 12.40 million tonnes. This
deficit was entirely covered through the purchase of emission
allowances in the open market.
Eni Annual Report 2021 29 REVENUES AND OTHER INCOME
SALES FROM OPERATIONS
(€ million)
2021
Sales from operations
Products sales and service revenues:
Sales of crude oil
Sales of oil products
Sales of natural gas and LNG
Sales of petrochemical products
Sales of other products
Services
Transfer of goods/services
Goods/Services transferred in a specific moment
Goods/Services transferred over a period of time
2020
Sales from operations
Products sales and service revenues:
Sales of crude oil
Sales of oil products
Sales of natural gas and LNG
Sales of petrochemical products
Sales of other products
Services
Transfer of goods/services
Goods/Services transferred in a specific moment
Goods/Services transferred over a period of time
2019
Sales from operations
Products sales and service revenues:
Sales of crude oil
Sales of oil products
Sales of natural gas and LNG
Sales of petrochemical products
Sales of other products
Services
Transfer of goods/services
Goods/Services transferred in a specific moment
Goods/Services transferred over a period of time
303
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517
3,505
113
255
9,024
11,852
20
3,277
36
728
5,000
(2)
364
6,359
5,362
24,937
5,896
463
5,239
123
24,639
298
2,741
2,366
2,028
7,135
7,135
10,993
12,369
11,266
3,296
2,515
3,548
43,987
42,987
1,000
19
2
173
194
78
116
10,499
9,230
41,976
7,972
204
69,881
3,505
1,189
5,454
68
283
10,499
9,946
553
17,361
19,615
214
4,088
16
682
41,976
41,727
249
8,881
349
9,230
9,117
113
3,373
2,503
2,096
7,972
7,972
20,866
20,804
17,922
4,110
2,593
3,586
69,881
68,848
1,033
22
6
176
204
86
118
Management report | Consolidated financial statements | Annex
304
(€ million)
Revenues associated with contract liabilities at the beginning of the period
Revenues associated with performance obligations totally or partially satisfied in previous years
2021
658
30
2020
818
2019
747
10
Sales from operations by industry segment and geographical
area of destination are disclosed in note 35 - Segment
information and information by geographical area.
Sales from operations with related parties are disclosed in
note 36 - Transactions with related parties.
OTHER INCOME AND REVENUES
(€ million)
Gains from sale of assets and businesses
Other proceeds
2021
107
1,089
1,196
2020
10
950
960
2019
152
1,008
1,160
Other proceeds include €281 million (€357 million in 2020 and
€368 million in 2019) related to the recovery of the cost share
of right-of-use assets pertaining to partners of unincorporated
joint operations operated by Eni.
Other income and revenues with related parties are disclosed
in note 36 - Transactions with related parties.
30 COSTS
PURCHASE, SERVICES AND OTHER CHARGES
(€ million)
Production costs - raw, ancillary and consumable materials and goods
Production costs - services
Lease expense and other
Net provisions for contingencies
Other expenses
less:
- capitalized direct costs associated with self-constructed assets - tangible assets
- capitalized direct costs associated with self-constructed assets - intangible assets
2021
41,174
10,646
1,233
707
1,983
55,743
(185)
(9)
55,549
2020
21,432
9,710
876
349
1,317
33,684
(128)
(5)
33,551
2019
36,272
11,589
1,478
858
879
51,076
(197)
(5)
50,874
Purchase, services and other charges included geological
and geophysical costs of exploration activities for €194
million (€196 million and €275 million in 2020 and 2019,
respectively).
Costs incurred in connection with research and development
activities expensed through profit and loss, as they did not
meet the requirements to be recognized as long-lived assets,
amounted to €177 million (€157 million and €194 million in
2020 and 2019, respectively).
Royalties on the extraction rights of hydrocarbons amounted
to €946 million (€673 million and €1,183 million in 2020 and
2019, respectively).
Additions to provisions net of reversal of unused provisions
mainly related to net additions for environmental liabilities
amounting to €279 million (net reversals of €15 million and
net additions of €329 million in 2020 and 2019, respectively)
and net additions for litigations amounting to €162 million
(net additions of €76 million and €60 million in 2020 and
2019, respectively). More information is provided in note
21 - Provisions. Net additions to provisions by segment are
disclosed in note 35 - Segment information and information
by geographical area.
Information about leases is disclosed in note 13 - Right-of-
use assets and lease liabilities.
Eni Annual Report 2021
PAYROLL AND RELATED COSTS
(€ million)
Wages and salaries
Social security contributions
Cost related to employee benefit plans
Other costs
less:
- capitalized direct costs associated with self-constructed assets - tangible assets
- capitalized direct costs associated with self-constructed assets - intangible assets
305
2019
2,417
449
85
213
3,164
(152)
(16)
2,996
2021
2,182
455
165
204
3,006
(111)
(7)
2,888
2020
2,193
458
102
239
2,992
(118)
(11)
2,863
Other costs comprised provisions for redundancy incentives
of €94 million (€105 million and €45 million in 2020 and
2019, respectively) and costs for defined contribution plans
of €97 million (€96 million and €99 million in 2020 and 2019,
respectively).
Cost related to employee benefit plans are described in note
22 - Provisions for employee benefits.
Costs with related parties are disclosed in note 36 - Transactions
with related parties.
AVERAGE NUMBER OF EMPLOYEES
The Group average number and breakdown of employees by category is reported below:
(number)
Senior managers
Junior managers
Employees
Workers
2021
2020
2019
Subsidiaries Joint operations
Subsidiaries Joint operations
Subsidiaries Joint operations
966
9,143
15,747
5,476
31,332
18
78
380
284
760
993
9,280
15,995
4,780
31,048
17
73
349
287
726
1,014
9,267
15,945
4,910
31,136
16
77
361
287
741
The average number of employees was calculated as the
average between the number of employees at the beginning
and the end of the period. The average number of senior
managers included managers employed in foreign countries,
whose position is comparable to a senior manager’s status.
LONG-TERM MONETARY INCENTIVE PLAN FOR THE MANAGERS OF ENI
On April 13, 2017 and on May 13, 2020, the Shareholders
Meeting approved the Long-Term Monetary Incentive Plan 2017-
2019 and 2020-2022 and empowered the Board of Directors to
execute the Plan by authorizing it to dispose up to a maximum
of 11 million of treasury shares in service of the plan 2017-2019
and 20 million in service of the plan 2020-2022.
The Long-Term Monetary Incentive plans provide for three
annual awards (2017, 2018 and 2019 and 2020, 2021 and
2022, respectively) and are intended for the Chief Executive
Officer of Eni and for the managers of Eni and its subsidiaries
who qualify as “senior managers deemed critical for the
business”, selected among those who are in charge of tasks
directly linked to the Group results or of strategic clout to the
business. The Plans provide the granting of Eni shares for no
consideration to eligible managers after a three-year vesting
period under the condition that they would remain in office
until vesting. Considering that these incentives fall within
the category of employee compensation, in accordance
with IFRS, the cost of the plans is determined based on
the fair value of the financial instruments awarded to the
beneficiaries and the number of shares that are granted at
the end of the vesting period; the cost is accruing along the
vesting period.
With reference to the 2017-2019 Plan, the number of shares
that will be granted at the end of the vesting period will
depend: (i) for 50%, on the market condition in terms of Total
Shareholder Return (TSR) of the Eni share compared to the
TSR of the FTSE Mib index of the Italian Stock Exchange
Management report | Consolidated financial statements | Annex
306
Market, and to a group of Eni’s competitors (“Peer Group”)28
and the TSR of their corresponding stock exchange market29;
(ii) for 50%, on the growth in the Net Present Value (NPV)
of proved reserves benchmarked against the Peer Group.
With reference to the 2020-2022 Plan, the number of shares
that will be granted at the end of the vesting period will
depend: (i) for 25% on a market objective measured as the
difference between the Total Shareholder Return (TSR)
of Eni Shares and the TSR of the FTSE Mib Index of Italian
Stock Exchange on a three-year period, adjusted with Eni’s
correlation index, compared with similar differences for each
company of the Eni’s group of competitors (Peer Group); (ii)
for 20% on a relative parameter represented by an industrial
objective measured in terms of annual unit value ($/boe) of
the Net Present Value of Proven Reserves (NPV) compared
with the analogous value of each company in the Peer Group,
with a final outcome equal to the average annual results over
the three-year period; (iii) for 20% on an absolute parameter
represented by an economic-financial objective measured as
the Organic Free Cash Flow accumulated in the three-year
reference period, compared to the equivalent accumulated
value provided for in the first three years of the Strategic
Plan approved by the Board of Directors in the year of
award and kept unchanged during the performance period.
The verification of CFC targets is conducted net of external
variables, using a gap-analysis approach approved by the
Remuneration Committee, in order to assess the effective
corporate performance deriving from the management
action; (iv) for the remaining 35% on an environmental
sustainability and energy transition objective in a three-year
period consisting of three absolute objectives as follows: (a)
for 15% to a decarbonisation objective measured in terms
of Upstream Scope 1 and Scope 2 CO2eq. equity emissions
(tCO2eq./kboe) at the end of the three-year period compared
with the same value expected in the third year of the Strategic
Plan approved by the Board of Directors in the year of award
and kept unchanged during the performance period; (b) for
10% on an energy transition objective measured in megawatts
(MW) of
installed capacity of power generation from
renewable sources, at the end of the three-year performance
period, compared with the same value expected in the third
year of the Strategic Plan approved by the Board of Directors
COMPENSATION OF KEY MANAGEMENT PERSONNEL
regarding
techniques
in the year of award and kept unchanged in the performance
period; (c) for 10% on a circular economy objective measured
in terms of progress of three important projects at the end
of the three-year performance period, compared with the
progress expected in the third year of the Strategic Plan
approved by the Board of Directors in the year of award and
kept unchanged during the performance period.
Depending on the performance of the parameters mentioned
above, the number of shares that will vest after three years
may range between 0% and 180% of the initial award.
Furthermore, 50% of the shares that will eventually vest is
subject to a lock-up clause of one year after the vesting date.
The number of shares awarded at the grant date was: (i)
2,365,581 shares in 2021, with a weighted average fair value of
€8.15 per share; (ii) 2,922,749 shares in 2020, with a weighted
average fair value of €4.67 per share; (iii) 1,759,273 shares in
2019, with a weighted average fair value of €9.88 per share.
The estimation of the fair value was calculated by adopting
specific valuation
the different
performance parameters provided by the plan (the stochastic
method for the component related to the TSR and the Black-
Scholes model for the component related to the NPV of the
reserves, for the 2017-2019 Plan; the stochastic method for
the 2020-2022 Plan), taking into account the fair value of the
Eni share at the grant date (between €11.642 and €12.164
depending on the grant date in relation to the 2021 award;
between €5.885 and €8.303 depending on the grant date
in relation to the 2020 award; €13.714 per share in 2019),
reduced by dividends expected along the vesting period
(between 7.1% and 7.4% of the share price at vesting date
in 2021; 7.1% and 10.0% of the share price at vesting date
in 2020; 6.1% of the share price at vesting date in 2019),
considering the volatility of the stock (between 44% and
45% in relation to the 2021 award; 41% and 44% in relation
to the 2020 award; 19% for attribution 2019), the forecasts
for the performance parameters, as well as the lower value
attributable to the shares considering the lock-up period at
the end of the vesting period.
In 2021, the costs related to the Long-Term Monetary
Incentive Plan, recognized as a component of the payroll
cost, amounted to €16 million (€7 million in 2020; €9 million
in 2019) with a contra-entry to equity reserves.
Compensation,
including contributions and collateral
expenses, of personnel holding key positions in planning,
directing and controlling the Eni Group subsidiaries, including
executive and non-executive officers, general managers and
managers with strategic responsibilities in office during the
year consisted of the following:
(28) The Peer group consists of the following oil companies: Apache, BP, Chevron, ConocoPhillips, Equinor, ExxonMobil, Marathon Oil, Occidental, Royal Dutch Shell and Total.
(29) The performance condition connected with the TSR in accordance with the international accounting standards represents a so-called market condition.
Eni Annual Report 2021 (€ million)
Wages and salaries
Post-employment benefits
Other long-term benefits
Indemnities upon termination of employment
307
2021
2020
2019
29
3
15
47
30
2
12
21
65
28
2
12
12
54
COMPENSATION OF DIRECTORS AND STATUTORY AUDITORS OF ENI SPA
Compensation of Directors amounted to €10.13 million,
€7.54 million and €9.2 million in 2021, 2020 and 2019,
respectively. Compensation of Statutory Auditors amounted
to €0.550 million, €0.571 million and €0.613 million in 2021,
2020 and 2019, respectively.
Compensation included emoluments and social security
benefits due for the office as Director or Statutory Auditor
held at the parent company Eni SpA or other Group
subsidiaries, which was recognized as a cost to the Group,
even if not subject to personal income tax.
31 FINANCE INCOME (EXPENSE)
(€ million)
Finance income (expense)
Finance income
Finance expense
Net finance income (expense) from financial assets held for trading
Income (expense) from derivative financial instruments
The analysis of finance income (expense) was as follows:
(€ million)
Finance income (expense) related to net borrowings
- Interest and other finance expense on ordinary bonds
- Net finance income (expense) on financial assets held for trading
- Interest and other expense due to banks and other financial institutions
- Interest on lease liabilities
- Interest from banks
- Interest and other income on financial receivables and securities held for non-operating purposes
Exchange differences
Income (expense) from derivative financial instruments
Other finance income (expense)
- Interest and other income on financing receivables and securities held for operating purposes
- Capitalized finance expense
- Finance expense due to the passage of time (accretion discount)(a)
- Other finance income (expense)
(a) The item related to the increase in provisions for contingencies that are shown at present value in non-current liabilities.
2021
2020
2019
3,723
(4,216)
11
(306)
(788)
3,531
(4,958)
31
351
(1,045)
3,087
(4,079)
127
(14)
(879)
2021
2020
2019
(475)
11
(94)
(304)
4
9
(849)
476
(306)
67
68
(144)
(100)
(109)
(788)
(517)
31
(102)
(347)
10
12
(913)
(460)
351
97
73
(190)
(3)
(23)
(1,045)
(618)
127
(122)
(378)
21
8
(962)
250
(14)
112
93
(255)
(103)
(153)
(879)
Information about leases is disclosed in note 13 - Right-of-
use assets and lease liabilities.
The analysis of derivative financial income (expense) is
disclosed in note 24 - Derivative financial instruments and
hedge accounting.
Finance income (expense) with related parties are disclosed
in note 36 - Transactions with related parties.
Management report | Consolidated financial statements | Annex
308
32 INCOME (EXPENSE) FROM INVESTMENTS
SHARE OF PROFIT (LOSS) OF EQUITY-ACCOUNTED INVESTMENTS
More information is provided in note 16 - Investments.
Share of profit or loss of equity accounted investments by
industry segment is disclosed in note 35 - Segment information
and information by geographical area.
OTHER GAIN (LOSS) FROM INVESTMENTS
(€ million)
Dividends
Net gain (loss) on disposals
Other net income (expense)
2021
230
1
(8)
223
2020
150
(75)
75
2019
247
19
15
281
Dividend income primarily related to Nigeria LNG Ltd for €144
million (€113 million in 2020 and €186 million in 2019) and to
Saudi European Petrochemical Co ‘IBN ZAHR’ for €54 million
(€28 million in 2020 and €46 million in 2019).
33 INCOME TAXES
(€ million)
Current taxes:
- Italian subsidiaries
- subsidiaries of the Exploration & Production segment - outside Italy
- other subsidiaries - outside Italy
Net deferred taxes:
- Italian subsidiaries
- subsidiaries of the Exploration & Production segment - outside Italy
- other subsidiaries - outside Italy
2021
2020
2019
439
3,609
157
4,205
(45)
552
133
640
4,845
199
1,517
84
1,800
672
73
105
850
2,650
347
4,729
152
5,228
599
(172)
(64)
363
5,591
Current income taxes payable by Italian subsidiaries include
foreign taxes for €214 million and the effect of the additional
Corporate tax as per Law 7/2009 for €97 million.
The reconciliation between the statutory tax charge calculated
by applying the Italian statutory tax rate of 24% (same amount
in 2020 and 2019) and the effective tax charge is the following:
(€ million)
Profit (loss) before taxation
Tax rate (IRES) (%)
Statutory corporation tax charge (credit) on profit or loss
Increase (decrease) resulting from:
- higher tax charges related to subsidiaries outside Italy
- effect of the valuation of the investments under the equity method
- Italian regional income tax (IRAP)
- effect additional tax Law no 7/2009
- impact pursuant to foreign tax effects of italian entities
- tax effects related to previous years
- effect due to the tax regime provided for intercompany dividends
- impact pursuant to the write-down of deferred tax assets
- other adjustments
Effective tax charge
2021
10,685
24.0
2,564
2,301
180
140
97
108
52
54
(666)
15
2,281
4,845
2020
(5,978)
24.0
(1,435)
1,980
97
107
108
(30)
96
1,785
(58)
4,085
2,650
2019
5,746
24.0
1,379
2,934
9
25
105
147
65
938
(11)
4,212
5,591
Eni Annual Report 2021
309
The higher tax charges at non-Italian subsidiaries related to the
Exploration & Production segment for €2,040 million (€1,777
million and €2,934 million in 2020 and in 2019, respectively).
In 2020, the Group incurred income taxes, despite a pre-
tax loss of €5,978 million, due to the economic crisis
caused by the COVID-19 having an enduring impact on the
hydrocarbons demand and by the revision of the long-term
prices and of future cash flows in Eni’s activities. The lower
projections of future taxable income had two impacts: the
recognition of tax charges due to a write-down of deferred
tax assets and a reduced capacity to recognize deferred
taxes on the losses of the period.
34 EARNINGS (LOSS) PER SHARE
Basic earnings (loss) per ordinary share are calculated by
dividing net profit (loss) for the period attributable to Eni’s
shareholders by the weighted average number of ordinary
shares issued and outstanding during the period, excluding
treasury shares.
Diluted earnings (loss) per share are calculated by dividing the
net profit (loss) of the period attributable to Eni’s shareholders
by the weighted average number of shares fully-diluted,
excluding treasury shares, and including the number of
potential shares to be issued.
As of December 31, 2021, the shares that could be potentially
issued related the estimation of new shares that will vest in
connection with the 2017-2019 and 2020-2022 Long-Term
Monetary Incentive Plans.
In determining basic and diluted earnings (loss) per share,
the net profit (loss) for the period attributable to Eni is
adjusted to take into account the remuneration of perpetual
subordinated bonds, net of tax effect, calculated by using
the amortized cost method.
Reconciliation of the weighted average number of shares used
for the calculation for both basic and diluted earnings (loss)
per share was as follows:
Weighted average number of shares used for basic earnings (loss) per share
3,565,973,883
3,572,549,651
3,592,249,603
Potential shares to be issued for ILT incentive plan
7,598,593
2,251,406
Weighted average number of shares used for diluted earnings per share
3,573,572,476
3,572,549,651
3,594,501,009
2021
2020
2019
Eni’s net profit (loss)
Remunaration of subordinated perpetual bonds net of tax effect
Eni’s net profit (loss) for basic and diluted earnings (loss) per share
Basic earnings (loss) per share
Diluted earnings (loss) per share
(€ million)
(€ million)
(€ million)
(€ per share)
(€ per share)
5,821
(95)
5,726
1.61
1.60
(8,635)
(8,635)
(2.42)
(2.42)
148
148
0.04
0.04
Management report | Consolidated financial statements | Annex
310
35 SEGMENT INFORMATION AND INFORMATION BY GEOGRAPHIC AREA
SEGMENT INFORMATION
Eni’s segmental reporting reflects the Group’s operating
segments, whose results are regularly reviewed by the Chief
Operating Decision Maker (the CEO) to assess segment
performance and to make decisions about resources to be
allocated to each segment.
The organization is based on two General Departments:
} Natural Resources, to build up the value of Eni’s Oil &
Gas upstream portfolio, with the objective of reducing
its carbon footprint by scaling up energy efficiency and
expanding production in the natural gas business, and
its position in the wholesale market. Furthermore, it will
focus its actions on the development of carbon capture
and compensation projects. The General Department
incorporates the Company’s Oil & Gas exploration,
development and production activities, natural gas
wholesale via pipeline and LNG, forests conservation
(REDD+) and CO2 storage projects;
} Energy Evolution, focused on the evolution of the businesses
of power generation, transformation and marketing of
products from fossil to bio and blue. the responsibility of
this Department include the growth of power generation
from renewable energy and biomethane, the coordination
of the bio and circular evolution of the Company’s refining
system and chemical business, and the development of Eni’s
retail portfolio, providing increasingly more decarbonized
products for mobility, household consumption and small
enterprises. The General Department incorporates the
activities of power generation from natural gas and
renewables, the refining and chemicals businesses, Retail
Gas & Power and mobility Marketing. The companies
Versalis (chemical products), Eni Rewind (environmental
activities) and Eni gas e luce, in their current structure, are
consolidated in this General Department.
In relation to financial reporting purposes, management
evaluated that the components of the Company whose
operating results are regularly reviewed by the Chief Operating
Decision Maker (CEO) to make decisions about the allocation
of resources and to assess performances would continue
being the single business units which are comprised in the
two newly-established General Departments, rather than the
two groups themselves. Therefore, in order to comply with
the provisions of the international reporting standard that
regulates the segment reporting (IFRS 8), the new reportable
segments of Eni, substantially confirming the pre-existing
setup, are identified as follows:
Exploration & Production:
research, development and
production of oil, condensates and natural gas, forestry
conservation (REDD+) and CO2 capture and storage projects.
Global Gas &LNG Portfolio (GGP): supply and sale of
wholesale natural gas via pipeline, international transport
and purchase and marketing of LNG. It includes gas trading
activities finalized to hedging and stabilizing the trade margins,
as well as optimising the gas asset portfolio.
Refining & Marketing and Chemicals: supply, processing,
distribution and marketing of fuels and chemicals. The results
of the Chemicals segment were aggregated with the Refining &
Marketing performance in a single reportable segment, because
these two operating segments have similar economic returns. It
comprises the activities of trading oil and products with the aim
to execute the transactions on the market in order to balance
the supply and stabilize and cover the commercial margins.
Plenitude & Power: retail sales of gas, electricity and related
services, production and wholesale sales of electricity from
thermoelectric and renewable plants, services for E-mobility.
It includes trading activities of CO2 emission certificates and
forward sale of electricity with a view to hedging/optimising
the margins of the electricity.
Corporate and Other activities: includes the main business
support functions, in particular holding, central treasury, IT,
human resources, real estate services, captive insurance
activities, research and development, new technologies,
business digitalization and
the environmental activity
developed by the subsidiary Eni Rewind.
Segment information presented to the CEO (i.e. the Chief
Operating Decision Maker, ex IFRS 8) includes: revenues,
operating profit and directly attributable assets and liabilities.
Eni Annual Report 2021 Segment Information:
(€ million)
2021
Sales from operations including intersegment sales
Less: intersegment sales
Sales from operations
Operating profit
Net provisions for contingencies
Depreciation and amortization
Impairments of tangible and intangible assets and right-of-use assets
Reversals of tangible and intangible assets
Write-off of tangible and intangible assets
Share of profit (loss) of equity-accounted investments
Identifiable assets(a)
Unallocated assets(b)
Equity-accounted investments
Identifiable liabilities(a)
Unallocated liabilities(b)
2020
Sales from operations including intersegment sales
Less: intersegment sales
Sales from operations
Operating profit
Net provisions for contingencies
Depreciation and amortization
Impairments of tangible and intangible assets and right-of-use assets
Reversals of tangible and intangible assets
Write-off of tangible and intangible assets
Share of profit (loss) of equity-accounted investments
Identifiable assets(a)
Unallocated assets(b)
Equity-accounted investments
Identifiable liabilities(a)
Unallocated liabilities(b)
2019
Sales from operations including intersegment sales
Less: intersegment sales
Sales from operations
Operating profit
Net provisions for contingencies
Depreciation and amortization
Impairments of tangible and intangible assets and right-of-use assets
Reversals of tangible and intangible assets
Write-off of tangible and intangible assets
311
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21,742
20,843
40,374
11,187
1,698
(12,896)
(3,870)
(323)
(670)
(1,510)
8,846
16,973
40,051
10,517
188
76,575
10,066
(221)
(5,976)
(194)
1,438
(384)
8
899
(139)
(174)
(137)
(512)
(28)
(1,342)
2
(2)
(333)
45
2,355
(1)
(286)
(132)
112
(1)
61,753
10,022
13,326
8,343
(816)
(186)
(148)
(27)
4
(766)
1,439
2,639
17
17,046
10,072
2,366
6,796
667
198
3,786
3,338
(49)
40,989
52,257
13,590
7,051
25,340
7,536
1,559
(7,231)
(1,689)
(403)
(401)
(1,365)
6,359
5,362
24,937
7,135
194
43,987
(610)
(98)
(6,273)
(2,170)
282
(322)
(980)
(332)
(2,463)
(64)
(125)
(118)
(575)
(2)
(1,605)
334
(15)
(363)
660
2
(217)
(56)
55
(7)
6
59,439
4,020
10,716
4,387
(563)
(26)
(146)
(22)
1
(381)
1,444
2,680
259
17,501
3,785
2,605
5,460
217
988
2,426
3,316
(83)
32,405
39,750
23,572
11,779
42,360
8,448
1,676
(13,073)
(2,549)
(384)
(476)
(1,472)
10,499
9,230
41,976
7,972
204
7,417
(97)
(7,060)
(1,347)
130
(292)
431
(234)
(124)
5
(682)
(276)
(620)
(1,127)
205
(6)
(63)
74
5
(190)
(83)
41
(1)
10
(688)
(307)
(144)
(13)
1
(1)
(21)
(120)
51
32
69,881
6,432
(858)
(8,106)
(2,570)
382
(300)
(88)
(208)
12,341
(23)
(707)
33
(7,063)
(1,723)
1,556
(387)
(1,091)
(591)
94,292
43,473
5,887
33
(3,275)
(45)
(349)
32
(7,304)
(3,855)
672
(329)
(1,733)
(402)
79,604
30,044
6,749
Capital expenditure in tangible and intangible assets
3,861
19
728
443
187
(4)
5,234
Capital expenditure in tangible and intangible assets
3,472
11
771
293
107
(10)
4,644
Share of profit (loss) of equity-accounted investments
7
(21)
Identifiable assets(a)
Unallocated assets(b)
Equity-accounted investments
Identifiable liabilities(a)
Unallocated liabilities(b)
68,915
4,092
13,569
4,068
1,643
(492)
91,795
4,108
346
20,164
3,836
3,107
6,272
141
2,380
1,333
3,890
31,645
9,035
(141)
36,401
39,139
Capital expenditure in tangible and intangible assets
6,980
15
933
357
89
(14)
8,360
(a) Include assets/liabilities directly associated with the generation of operating profit.
(b) Include assets/liabilities not directly associated with the generation of operating profit.
Management report | Consolidated financial statements | Annex
312
INFORMATION BY GEOGRAPHICAL AREA
Identifiable assets and investments by geographical area of origin
(€ million)
2021
Identifiable assets(a)
Capital expenditure in tangible and intangible assets
2020
Identifiable assets(a)
Capital expenditure in tangible and intangible assets
2019
Identifiable assets(a)
Capital expenditure in tangible and intangible assets
(a) Include assets directly associated with the generation of operating profit.
n
a
e
p
o
r
u
E
n
o
i
n
U
r
e
h
t
O
y
l
a
t
I
23,718
1,333
17,228
1,198
19,346
1,402
6,902
199
4,159
152
7,237
306
f
o
t
s
e
R
e
p
o
r
u
E
6,114
202
3,174
119
1,151
9
s
a
c
i
r
e
m
A
5,718
659
4,485
441
5,230
1,017
a
i
s
A
a
c
i
r
f
A
17,483
33,499
1,203
1,604
16,360
33,341
1,267
1,443
17,898
40,021
1,685
3,886
s
a
e
r
a
r
e
h
t
O
858
34
857
24
912
55
Sales from operations by geographical area of destination:
(€ million)
Italy
Other European Union
Rest of Europe
Americas
Asia
Africa
Other areas
2021
29,968
14,671
12,470
4,420
7,891
7,040
115
2020
14,717
9,508
8,191
2,426
4,182
4,842
121
l
a
t
o
T
94,292
5,234
79,604
4,644
91,795
8,360
2019
23,312
18,567
6,931
3,842
8,102
8,998
129
76,575
43,987
69,881
36 TRANSACTIONS WITH RELATED PARTIES
In the ordinary course of its business, Eni enters into
transactions mainly regarding:
(a) Purchase/supply of goods and services and the provision
joint ventures, associates and non-
of financing to
consolidated subsidiaries;
(b) Purchase/supply of goods and services to entities
controlled by the Italian Government;
(c) Purchase/supply of goods and services to companies
related to Eni SpA through members of the Board of
Directors. Most of these transactions are exempt from
the application of the Eni internal procedure “Transactions
involving interests of Directors and Statutory Auditors and
transactions with related parties” pursuant to the Consob
Regulation, since they relate to ordinary transactions
conducted at market or standard conditions, or because
they fall below the materiality threshold provided for by the
procedure;
(d) contributions to non-profit entities correlated to Eni
with the aim to develop solidarity, culture and research
initiatives. In particular these related to: (i) Eni Foundation,
established by Eni as a non-profit entity with the aim of
pursuing exclusively solidarity initiatives in the fields
of social assistance, health, education, culture and
environment, as well as scientific and technological
research; and (ii) Eni Enrico Mattei Foundation, established
by Eni with the aim of enhancing, through studies,
research and training initiatives, knowledge enrichment in
the fields of economics, energy and environment, both at
the national and international level.
Transactions with related parties were conducted in the
interest of Eni companies and, with exception of those with
entities whose aim is to develop charitable, cultural and
research initiatives, are related to the ordinary course of
Eni’s business.
joint arrangements and
Investments
associates as of December 31, 2021 are presented separately
in the annex “List of companies owned by Eni SpA as of
December 31, 2021”.
in subsidiaries,
Eni Annual Report 2021
TRANSACTIONS AND BALANCES WITH RELATED PARTIES
313
December 31, 2021
2021
(€ million)
Receivables
and other
assets
Payables
and other
liabilities
Guarantees
Revenues
Costs
Other operating
(expense)
income
Name
Joint ventures and associates
Agiba Petroleum Co
Angola LNG Ltd
Angola LNG Supply Services Llc
Coral FLNG SA
Saipem Group
Karachaganak Petroleum Operating BV
Mellitah Oil & Gas BV
Petrobel Belayim Petroleum Co
Société Centrale Electrique du Congo SA
Società Oleodotti Meridionali SpA
Vår Energi AS
Other(*)
Unconsolidated entities controlled by Eni
Eni BTC Ltd
Industria Siciliana Acido Fosforico - ISAF SpA (in liquidation)
Other
Entities controlled by the Government
Enel Group
Italgas Group
Snam Group
Terna Group
GSE - Gestore Servizi Energetici
Other(*)
Other related parties
Groupement Sonatrach - Agip «GSA» and Organe Conjoint
des Opérations «OC SH/FCP»
Total
(*) Each individual amount included herein was lower than €50 million.
13
17
4
24
65
24
50
6
62
137
402
124
10
134
536
583
1
160
51
311
10
1,116
170
1,822
57
134
213
290
391
396
526
53
2,060
1
5
6
2,066
461
49
152
85
125
33
905
2
79
179
1,260
9
495
2
1,945
179
1
10
190
2,135
189
73
174
989
263
651
12
2,224
234
4,809
10
10
43
28
3
2
66
18
104
95
359
13
8
21
(409)
(409)
380
4,819
(409)
41
3
159
203
2,216
20
2,642
30
417
560
1,013
309
1,238
60
3,597
33
222
373
1
4
766
1,144
3,052
2,135
3,052
8,671
735
Management report | Consolidated financial statements | Annex
314
Name
Joint ventures and associates
Agiba Petroleum Co
Angola LNG Supply Services Llc
Coral FLNG SA
Gas Distribution Company of Thessaloniki - Thessaly SA
Saipem Group
Karachaganak Petroleum Operating BV
Mellitah Oil & Gas BV
Petrobel Belayim Petroleum Co
Società Oleodotti Meridionali SpA
Société Centrale Electrique du Congo SA
Unión Fenosa Gas SA
Vår Energi AS
Other(*)
Unconsolidated entities controlled by Eni
Eni BTC Ltd
Industria Siciliana Acido Fosforico - ISAF SpA (in liquidation)
Other
Entities controlled by the Government
Enel Group
Italgas Group
Snam Group
Terna Group
GSE - Gestore Servizi Energetici
Other(*)
Other related parties
Groupement Sonatrach - Agip «GSA» and Organe Conjoint
des Opérations «OC SH/FCP»
December 31, 2020
2020
(€ million)
Receivables
and other
assets
Payables
and other
liabilities
Guarantees
Revenues
Costs
Other operating
(expense)
income
6
6
87
25
54
65
3
48
11
39
72
52
13
254
141
250
467
399
4
190
24
165
1,079
509
57
456
1
49
18
2
20
57
9
85
66
416
1,794
2,267
306
165
1
10
176
2,443
112
5
117
533
104
1
189
46
52
8
400
1
87
1
23
24
1,818
165
177
211
62
37
49
701
4
52
201
52
350
816
156
556
15
1,126
167
3,439
9
9
(3)
(118)
(121)
11
4
15
321
3,448
(121)
51
3
45
152
586
20
857
2
19
551
714
1,012
225
309
63
2,874
53
262
86
8
40
134
Total
1,021
2,575
2,443
1,199
6,637
13
(*) Each individual amount included herein was lower than €50 million.
Eni Annual Report 2021
December 31, 2019
2019
(€ million)
Receivables
and other
assets
Payables
and other
liabilities
Guarantees
Revenues
Costs
Other operating
(expense)
income
315
Name
Joint ventures and associates
Agiba Petroleum Co
Angola LNG Supply Services Llc
Coral FLNG SA
Gas Distribution Company of Thessaloniki - Thessaly SA
Saipem Group
Karachaganak Petroleum Operating BV
Mellitah Oil & Gas BV
Petrobel Belayim Petroleum Co
Unión Fenosa Gas SA
Vår Energi AS
Other(*)
Unconsolidated entities controlled by Eni
Eni BTC Ltd
Industria Siciliana Acido Fosforico - ISAF SpA (in liquidation)
Other
Entities controlled by the Government
Enel Group
Italgas Group
Snam Group
Terna Group
GSE - Gestore Servizi Energetici
Other
Other related parties
Groupement Sonatrach - Agip «GSA» and Organe Conjoint
des Opérations «OC SH/FCP»
3
15
75
33
57
50
8
32
106
379
101
5
106
485
185
3
278
40
26
10
542
2
75
71
13
227
198
171
1,130
1
143
29
181
1,168
510
57
482
1
1,983
2,399
180
3
14
197
2,596
1
25
26
2,009
284
154
229
45
24
19
755
3
74
229
53
503
1,134
365
1,590
6
1,481
87
5,448
18
18
71
27
1
3
7
1
63
112
285
14
6
20
305
5,466
105
1
71
171
549
12
909
5
33
602
677
1,208
223
468
35
3,213
37
457
63
(64)
(1)
(1)
(8)
17
11
20
19
Total
1,104
2,841
2,596
1,252
9,173
(*) Each individual amount included herein was lower than €50 million.
joint ventures,
The most significant transactions with
associates and unconsolidated subsidiaries concerned:
} Eni’s share of expenses incurred to develop oil fields from
Agiba Petroleum Co, Karachaganak Petroleum Operating
BV, Mellitah Oil & Gas BV, Petrobel Belayim Petroleum Co,
Groupement Sonatrach - Agip «GSA», Organe Conjoint
des Opérations «OC SH/FCP» and, only for Karachaganak
Petroleum Operating BV, purchase of crude oil by Eni Trade
& Biofuels SpA; services charged to Eni’s associates are
invoiced on the basis of incurred costs;
} purchase of LNG from Angola LNG Ltd;
} a guarantee issued on behalf of Angola LNG Supply
Services Llc to cover the commitments relating to the
payment of the regasification fee;
} supply of upstream specialist services and a guarantee
issued on a pro quota basis granted to Coral FLNG SA
on behalf of the Consortium TJS for the contractual
obligations assumed following the award of the EPCIC
contract for the construction of a floating gas liquefaction
plant (for more information see note 28 - Guarantees,
commitments and risks);
} engineering, construction and drilling services by Saipem
Group mainly for the Exploration & Production segment;
} the sale of gas to Société Centrale Electrique du Congo SA;
} advances received from Società Oleodotti Meridionali
SpA for the infrastructure upgrade of the crude oil
transport system at the Taranto refinery;
} guarantees
issued
in compliance with contractual
agreements in the interest of Vår Energi AS, the supply of
upstream specialist services, the purchase of crude oil,
condensates and gas and the realized part of the forward
contracts for the purchase of gas;
} a guarantee issued in relation to the construction of an oil
pipeline on behalf of Eni BTC Ltd;
} services for environmental restoration to
Industria
Siciliana Acido Fosforico - ISAF SpA (in liquidation).
Management report | Consolidated financial statements | Annex
316
The most significant transactions with entities controlled by
the Italian Government concerned:
} sale of fuel, sale and purchase of gas, acquisition of power
distribution services and fair value of derivative financial
instruments with Enel Group;
} acquisition of natural gas transportation, distribution and
storage services with Snam Group and Italgas Group
on the basis of the tariffs set by the Italian Regulatory
Authority for Energy, Networks and Environment and
purchase and sale with Snam Group of natural gas
for granting the system balancing on the basis of
prices referred to the quotations of the main energy
commodities;
entered to hedge the price risk related to the utilization of
transport capacity rights with Terna Group;
} sale and purchase of electricity, gas, environmental
certificates, fair value of derivative financial instruments,
sale of oil products and storage capacity with GSE -
Gestore Servizi Energetici for the setting-up of a specific
stock held by the Organismo Centrale di Stoccaggio
Italiano (OCSIT) according to the Legislative Decree no.
249/12; the contribution to cover the charges deriving
from the performance of OCSIT functions and activities
and the contribution paid to GSE for the use of biomethane
and other advanced biofuels in the transport sector.
} acquisition of domestic electricity transmission service
and sale and purchase of electricity for granting the system
balancing based on prices referred to the quotations of the
main energy commodities, and derivatives on commodities
Transactions with other related parties concerned:
} provisions to pension funds managed by Eni of €25 million;
} contributions and service provisions to Eni Enrico Mattei
Foundation for €5 million and to Eni Foundation for €3 million.
FINANCING TRANSACTIONS AND BALANCES WITH RELATED PARTIES
Name
Joint ventures and associates
Cardón IV SA
Coral FLNG SA
Coral South FLNG DMCC
Mozambique Rovuma Venture SpA
Other(*)
Unconsolidated entities controlled by Eni
Other
Entities controlled by the Government
Enel Group
Other
Total
(*) Each individual amount included herein was lower than €50 million.
December 31, 2021
2021
(€ million)
Receivables
Payables
Guarantees
Gains
Charges
199
383
1,008
70
1,660
38
38
2
2
1,700
2
72
43
117
34
34
109
17
126
277
1,413
1,413
37
4
2
35
78
1
1
1,413
79
1
43
44
1
1
1
1
46
Eni Annual Report 2021
Name
Joint ventures and associates
Angola LNG Ltd
Cardón IV SA
Coral FLNG SA
Coral South FLNG DMCC
Saipem Group
Société Centrale Electrique du Congo SA
Other
Unconsolidated entities controlled by Eni
Other
Entities controlled by the Government
Other
Total
Name
Joint ventures and associates
Angola LNG Ltd
Cardón IV SA
Coral FLNG SA
Coral South FLNG DMCC
Société Centrale Electrique du Congo SA
Other
Unconsolidated entities controlled by Eni
Other
Entities controlled by the Government
Other
Total
317
December 31, 2020
2020
(€ million)
Receivables
Payables
Guarantees
Gains
Charges
228
1,304
1
1,533
57
22
7
27
113
1
1
383
288
2
83
15
771
36
36
167
12
179
28
28
11
11
807
218
1,533
114
1
6
18
25
1
1
26
December 31, 2019
2019
(€ million)
Receivables
Payables
Guarantees
Gains
Charges
563
253
85
18
919
48
48
4
4
971
5
14
19
28
28
12
12
59
249
1,425
2
1,676
2
20
14
36
77
18
95
1
1
1,676
96
36
The most significant transactions with joint ventures, associa-
tes and unconsolidated subsidiaries concerned:
} the financing loan granted to Cardón IV SA for the exploration
and development activities of a gas field in Venezuela;
} the financing loan granted to Coral FLNG SA for the con-
struction of a floating gas liquefaction plant in Area 4 offsho-
re Mozambique;
} a bank debt guarantee issued on behalf of Coral South
FLNG DMCC as part of the project financing of the Coral
FLNG development project (for more information see note
28 - Guarantees, commitments and risks);
} the loan granted to Mozambique Rovuma Venture SpA for
the development of gas reserves offshore Mozambique.
The most significant transactions with entities controlled by the
Italian Government concerned:
} financial debts towards Enel group for margins on derivative
contracts.
Management report | Consolidated financial statements | Annex
318
IMPACT OF TRANSACTIONS AND POSITIONS WITH RELATED PARTIES ON THE BALANCE SHEET, PROFIT
AND LOSS ACCOUNT AND STATEMENT OF CASH FLOWS
The impact of transactions and positions with related parties on the balance sheet accounts consisted of the following:
(€ million)
Other current financial assets
Trade and other receivables
Other current assets
Other non-current financial assets
Other non-current assets
Short-term debt
Current portion of long-term debt
Current portion of non-current lease liabilities
Trade and other payables
Other current liabilities
Long-term debt
Non-current lease liabilities
Other non-current liabilities
December 31, 2021
December 31, 2020
Total
4,308
18,850
13,634
1,885
1,029
2,299
1,781
948
21,720
15,756
23,714
4,389
2,246
Related
parties
Impact %
55
1,301
492
1,645
29
233
21
17
2,298
339
5
1
1.28
6.90
3.61
87.27
2.82
10.13
1.18
1.79
10.58
2.15
0.02
0.02
415
18.48
Total
254
10,926
2,686
1,008
1,253
2,882
1,909
849
12,936
4,872
21,895
4,169
1,877
Related
parties
Impact %
41
802
145
766
74
52
54
2,100
452
112
23
16.14
7.34
5.40
75.99
5.91
1.80
6.36
16.23
9.28
2.69
1.23
The impact of transactions with related parties on the profit and loss accounts consisted of the following:
(€ million)
Sales from operations
Other income and revenues
2021
Related
parties
3,000
52
Total
76,575
1,196
Impact %
3.92
4.35
Total
43,987
960
2020
Related
parties
1,164
35
Impact %
2.65
3.65
Total
69,881
1,160
2019
Related
parties
1,248
4
Purchases, services and other
(55,549)
(8,644)
15.56
(33,551)
(6,595)
19.66
(50,874)
(9,173)
Net (impairment losses) reversals of trade and
other receivables
Payroll and related costs
Other operating income (expense)
Finance income
Finance expense
(279)
(2,888)
903
3,723
(4,216)
(6)
(21)
735
79
(46)
2.15
(226)
0.73
81.40
2.12
1.09
(2,863)
(766)
3,531
(4,958)
(6)
(36)
13
114
(26)
2.65
1.26
..
3.23
0.52
(432)
(2,996)
287
3,087
(4,079)
28
(28)
19
96
(36)
Impact %
1.79
0.34
18.03
..
0.93
6.62
3.11
0.88
Main cash flows with related parties are provided below:
(€ million)
Revenues and other income
Costs and other expenses
Other operating (expense) income
Net change in trade and other receivables and payables
Net interests
Net cash provided from operating activities
Capital expenditure in tangible and intangible assets
Net change in accounts payable and receivable in relation to investments
Change in financial receivables
Net cash used in investing activities
Change in financial and lease liabilities
Net cash used in financing activities
Total financial flows to related parties
2021
3,052
2020
1,199
2019
1,252
(7,814)
(5,789)
(6,869)
735
(342)
38
13
(136)
73
(4,331)
(4,640)
19
(839)
81
(6,356)
(2,332)
(339)
(241)
(842)
(370)
(160)
(1,372)
(2,912)
164
164
(817)
(817)
(851)
(20)
(105)
(976)
(13)
(13)
(5,320)
(5,848)
(10,085)
Eni Annual Report 2021
319
The impact of cash flows with related parties consisted of the following:
(€ million)
2021
Related
parties
Total
Net cash provided from operating activities
12,861
(4,331)
Net cash used in investing activities
Net cash used in financing activities
(12,022)
(2,039)
(976)
(13)
Impact %
..
8.12
0.64
Total
4,822
(4,587)
3,253
2020
Related
parties
(4,640)
(1,372)
164
Impact %
..
Total
12,392
29.91
(11,413)
5.04
(5,841)
2019
Related
parties
(6,356)
(2,912)
(817)
Impact %
..
25.51
13.99
37 OTHER INFORMATION ABOUT INVESTMENTS30
INFORMATION ON ENI’S CONSOLIDATED SUBSIDIARIES WITH SIGNIFICANT NON-CONTROLLING INTEREST
In 2021 and 2020, Eni did not own any consolidated
subsidiaries with a significant non-controlling interest.
Equity pertaining to minority interests as of December 31, 2021,
amounted to €82 million (€78 million December 31, 2020).
CHANGES IN THE OWNERSHIP INTEREST WITHOUT LOSS OF CONTROL
In 2021 and in 2020 Eni did not report any changes in ownership interest without loss or acquisition of control.
PRINCIPAL JOINT VENTURES, JOINT OPERATIONS AND ASSOCIATES AS OF DECEMBER 31, 2021
Registered office
Country
of operation
Business segment
% ownership
interest
Eni’s %
of the
investment
Venezuela
Exploration & Production
50.00
50.00
Company name
Joint venture
Cardón IV SA
Doggerbank Offshore Wind Farm
Project 1 Holdco Ltd
Doggerbank Offshore Wind Farm
Project 2 Holdco Ltd
Mozambique Rovuma Venture SpA
Saipem SpA
Vår Energi AS
Joint Operation
Damietta LNG (DLNG) SAE
GreenStream BV
Raffineria di Milazzo ScpA
Associates
Abu Dhabi Oil Refining Co (Takreer)
Angola LNG Ltd
Coral FLNG SA
UK
UK
Plenitude
Plenitude
Mozambique
Exploration & Production
Corporate and financial
companies
Exploration & Production
Global Gas & LNG Portfolio
Global Gas & LNG Portfolio
Refining & Marketing
Caracas
(Venezuela)
Reading
(UK)
Reading
(UK)
San Donato Milanese (MI)
(Italy)
San Donato Milanese (MI)
(Italy)
Sandnes
(Norway )
Damietta
(Egypt)
Amsterdam
(Netherlands)
Milazzo (ME)
(Italy)
Abu Dhabi
(United Arab Emirates)
Hamilton
(Bermuda)
Maputo
(Mozambique)
Italy
Norway
Egypt
Libya
Italy
United Arab
Emirates
Angola
Refining & Marketing
20.00
20.00
Exploration & Production
13.60
13.60
Mozambique
Exploration & Production
25.00
25.00
20.00
20.00
35.71
30.54
69.85
50.00
50.00
50.00
20.00
20.00
35.71
31.20
69.85
50.00
50.00
50.00
(30) Investments in subsidiaries, joint arrangements and associates as of December 31, 2021 are presented in the annex “List of companies owned by Eni SpA as of
December 31, 2021”.
Management report | Consolidated financial statements | Annex
320
Main line items of profit and loss and balance sheet related to the principal joint ventures, represented by the amounts
included in the reports accounted under IFRS of each company, are provided in the table below:
(€ million)
Current assets
- of which cash and cash equivalent
Non-current assets
Total assets
Current liabilities
- current financial liabilities
Non-current liabilities
- non-current financial liabilities
Total liabilities
Net equity
Eni’s % of the investment
Book value of the investment
Revenues and other income
Operating expense
Other operating profit (loss)
Depreciation, amortization and impairments
Operating profit (loss)
Finance income (expense)
Income (expense) from investments
Profit (loss) before income taxes
Income taxes
Net profit (loss)
Other comprehensive income (loss)
Total other comprehensive income (loss)
Net profit (loss) attributable to Eni
Dividends received from the joint venture
A
S
V
I
n
ó
d
r
a
C
i
d
n
W
e
r
o
h
s
f
f
O
1
t
c
e
j
o
r
P
m
r
a
F
k
n
a
b
r
e
g
g
o
D
d
t
L
o
c
d
l
o
H
i
d
n
W
e
r
o
h
s
f
f
O
2
t
c
e
j
o
r
P
m
r
a
F
k
n
a
b
r
e
g
g
o
D
d
t
L
o
c
d
l
o
H
285
3
1,947
2,232
373
4
1,301
430
1,674
558
50.00
279
686
(546)
(98)
42
(67)
(25)
(131)
(156)
39
(117)
(78)
22
20
1,935
1,957
95
1,548
1,414
1,643
314
20.00
246
(1)
(1)
(1)
31
30
12
9
1,306
1,318
59
1,085
908
1,144
174
20.00
238
(1)
(1)
(1)
(9)
(10)
2021
e
r
u
t
n
e
V
a
m
u
v
o
R
i
e
u
q
b
m
a
z
o
M
A
p
S
202
82
3,810
4,012
162
4
2,856
2,823
3,018
994
35.71
355
A
p
S
m
e
p
i
a
S
6,819
1,632
4,723
11,542
6,844
1,256
4,347
2,679
11,191
351
31.20
137
6,880
(8,532)
2
(616)
(2,266)
(140)
9
(2,397)
(70)
(2,467)
(117)
(2,584)
(752)
S
A
i
g
r
e
n
E
r
å
V
1,382
198
16,589
17,971
2,148
390
14,900
4,160
17,048
923
69.85
645
5,191
(1,207)
(51)
(1,825)
2,108
(350)
1,758
(1,729)
29
61
90
20
t
n
o
i
j
r
e
h
t
O
s
e
r
u
t
n
e
v
632
88
714
1,346
853
296
193
22
1,046
300
157
341
(315)
4
(39)
(9)
(22)
(31)
(3)
(34)
5
(29)
(97)
561
25
Eni Annual Report 2021
(€ million)
Current assets
- of which cash and cash equivalent
Non-current assets
Total assets
Current liabilities
- current financial liabilities
Non-current liabilities
- non-current financial liabilities
Total liabilities
Net equity
Eni’s % of the investment
Book value of the investment
Revenues and other income
Operating expense
Depreciation, amortization and impairments
Operating profit (loss)
Finance income (expense)
Income (expense) from investments
Profit (loss) before income taxes
Income taxes
Net profit (loss)
Other comprehensive income (loss)
Total other comprehensive income (loss)
Net profit (loss) attributable to Eni
Dividends received from the joint venture
n
o
i
t
u
b
i
i
r
t
s
D
s
a
G
f
o
y
n
a
p
m
o
C
i
k
i
l
n
o
a
s
s
e
h
T
A
S
y
l
a
s
s
e
h
T
-
A
S
V
I
n
ó
d
r
a
C
235
2,040
2,275
262
1,615
785
1,877
398
50.00
199
612
(453)
(95)
64
(98)
(34)
(58)
(92)
(35)
(127)
(46)
31
10
344
375
38
11
51
39
89
286
49.00
140
62
(19)
(16)
27
(1)
26
(6)
20
20
10
9
321
-
n
e
v
t
n
o
i
j
r
e
h
t
O
s
e
r
u
t
858
43
924
1,782
1,022
90
333
237
1,355
427
188
286
(304)
(85)
(103)
(21)
(124)
(4)
(128)
(25)
(153)
(93)
2020
A
p
S
m
e
p
a
S
i
6,411
1,687
4,831
a
s
o
n
e
F
i
n
ó
n
U
A
S
s
a
G
599
36
717
11,242
1,316
4,903
609
3,391
2,827
8,294
2,948
31.08
908
7,408
(6,980)
(1,273)
(845)
(166)
37
(974)
(143)
(1,117)
46
(1,071)
(354)
311
99
501
421
812
504
50.00
242
854
(805)
(108)
(59)
(29)
3
(85)
(2)
(87)
(33)
(120)
(68)
S
A
i
g
r
e
n
E
r
å
V
804
222
16,042
16,846
189
33
15,019
4,389
15,208
1,638
69.85
1,144
2,450
(980)
(3,425)
(1,955)
31
(1,924)
603
(1,321)
(273)
(1,594)
(918)
3
274
10
Management report | Consolidated financial statements | Annex
322
Main line items of profit and loss and balance sheet related to the principal associates represented by the amounts included
in the reports accounted under IFRS of each company are provided in the table below:
(€ million)
Current assets
- of which cash and cash equivalent
Non-current assets
Total assets
Current liabilities
- current financial liabilities
Non-current liabilities
- non-current financial liabilities
Total liabilities
Net equity
Eni’s % of the investment
Book value of the investment
Revenues and other income
Operating expense
Other operating income (expense)
Depreciation, amortization and impairments
Operating profit (loss)
Finance income (expense)
Income (expense) from investments
Profit (loss) before income taxes
Income taxes
Net profit (loss)
Other comprehensive income (loss)
Total other comprehensive income (loss)
Net profit (loss) attributable to Eni
Dividends received from the joint venture
2021
d
t
L
G
N
L
a
l
o
g
n
A
1,234
808
9,736
10,970
1,061
122
1,935
696
2,996
7,974
13.60
1,084
l
i
O
i
b
a
h
D
u
b
A
o
C
g
n
i
n
fi
e
R
)
R
E
E
R
K
A
T
(
3,070
153
16,936
20,006
3,042
6,208
5,164
9,250
10,756
20.00
2,151
21,758
(20,429)
2,739
(2,316)
(3,054)
(1,725)
(85)
(1,810)
(1,810)
892
(918)
(362)
307
730
(61)
669
669
623
1,292
90
A
S
G
N
L
F
l
a
r
o
C
88
8
6,320
6,408
391
1
5,392
5,384
5,783
625
25.00
156
46
46
s
e
t
a
i
c
o
s
s
a
r
e
h
t
O
2,855
419
4,842
7,697
2,577
139
3,857
3,632
6,434
1,263
393
20,098
(19,785)
(117)
(40)
156
(5)
52
203
(16)
187
74
261
52
16
Eni Annual Report 2021
(€ million)
Current assets
- of which cash and cash equivalent
Non-current assets
Total assets
Current liabilities
- current financial liabilities
Non-current liabilities
- non-current financial liabilities
Total liabilities
Net equity
Eni’s % of the investment
Book value of the investment
Revenues and other income
Operating expense
Depreciation, amortization and impairments
Operating profit (loss)
Finance income (expense)
Income (expense) from investments
Profit (loss) before income taxes
Income taxes
Net profit (loss)
Other comprehensive income (loss)
Total other comprehensive income (loss)
Net profit (loss) attributable to Eni
Dividends received from the joint venture
2020
d
t
L
G
N
L
a
o
g
n
A
l
618
428
8,633
9,251
424
101
1,187
999
1,611
7,640
13.60
1,039
976
(548)
(508)
(80)
(96)
(176)
(176)
(710)
(886)
(24)
A
S
G
N
L
F
l
a
r
o
C
133
83
4,777
4,910
172
4,186
4,186
4,358
552
25.00
138
1
1
(11)
(10)
2
(8)
(48)
(56)
(2)
l
i
O
i
b
a
h
D
u
b
A
o
C
g
n
i
n
fi
e
R
)
R
E
E
R
K
A
T
(
1,391
97
17,938
19,329
4,897
4,404
2,757
456
7,654
11,675
20.00
2,335
11,933
(12,370)
(851)
(1,288)
(91)
(1,379)
4
(1,375)
(1,101)
(2,476)
(275)
323
s
e
t
a
i
c
o
s
s
a
r
e
h
t
O
623
303
4,072
4,695
656
263
3,068
2,928
3,724
971
321
954
(917)
(75)
(38)
(13)
16
(35)
(9)
(44)
(60)
(104)
(26)
13
38 PUBLIC ASSISTANCE - ITALIAN LAW NO. 124/2017 AND SUBSEQUENT MODIFICATIONS
Under art. 1, paragraphs 125 and 126, of the Italian Law no.
124/2017 and subsequent modifications, the disclosures
about (i) assistances received by Eni SpA and its consolidated
subsidiaries from Italian public authorities and entities with
the exclusion of listed public controlled companies and their
subsidiaries; (ii) assistances granted by Eni SpA and by its fully
consolidated subsidiaries to companies, persons and public
and private entities31, are provided below.
Furthermore, it should be underlined that when Eni acts as
operator32 of unincorporated joint ventures33, a type of joint
venture constituted for the management of oil projects, each
consideration made directly by Eni is reported in its full amount,
regardless of whether Eni is reimbursed proportionally by the non-
operating partners through the mechanism of the cash calls.
The following disclosure requirements do not apply to: (i)
incentives/subventions granted to all those entitled in accordance
with a general assistance aid scheme; (ii) consideration in
exchange for supplied goods/services, included sponsorships;
(iii) reimbursements and indemnities paid to persons engaged
in professional and orientation trainings; (iv) continuous training
contributions to companies granted by inter-professional funds
established in the legal form of association; (v) membership fees
for the participation to industry trade and territorial associations,
as well as to foundations or similar organizations, which perform
activities linked with the Company’s business; (vi) costs incurred
with reference to social projects linked to the investing activities
of the Company.
Assistances are identified on a cash basis34. The disclosure
includes assistance equal or exceeding €10,000, even though
they are granted through several payments during 2021.
Under art. 1, subsection 125-quinquies of Law no. 124/2017,
for received assistance see the information included in the
Italian State aid Register, prepared in accordance with the art.
52 of the Italian Law 24 December 2012, no. 234.
(31) The following disclosures do not include assistance granted by foreign subsidiaries to foreign beneficiaries.
(32) In the oil projects, the operator is the subject who in accordance with the contractual agreements manages the exploration activities and in this role fulfills
the payments due.
(33) ‘Unincorporated joint ventures’ mean a grouping of companies that operate jointly within the project in accordance with a contract.
(34) In case of non-monetary economic benefits, the cash basis must be assumed substantially referring to the year in which the benefit was enjoyed.
Management report | Consolidated financial statements | Annex
324
The granted assistance provided herein is mainly referred to foundations, associations and other entities for reputational purposes,
donations and support for charitable and solidarity initiatives:
Granted subject
Fondazione Eni Enrico Mattei (FEEM)(*)
Fondazione Teatro alla Scala
Eni Foundation
Fondazione Giorgio Cini
Presidio Ospedaliero "Vittorio Emanuele" di Gela
WEF - World Economic Forum
Ministero della Salute dell’Angola (MINSA)
Fondazione Campagna Amica
The Halo Trust
Ara Pacis Initiative For Peace ONLUS
Presidio Ospedaliero di Villa d'Agri "Ospedale San Pio da Pietrelcina"
Croce Rossa di Ancona, Pesaro, Chieti e Pubblica Assistenza città di Ravenna
Lebanese Armed Forces (LAF)
ONG Volontariato Internazionale per lo Sviluppo (VIS)
Atlantic Council
Famiglia di un dipendente scomparso
World Business Council for Sustainable Development
La Semente - Società Agricola Cooperativa Sociale
Council on Foreign Relations
Associazione Pionieri e Veterani Eni
Indian Red Cross Society (IRCS)
Extractive Industries Transparency Initiative (EITI)
Bruegel
Cotec - Fondazione per l'innovazione tecnologica
IFRI - Institut français des relations internationales
Carnegie Endowment for International Peace (CEIP)
Parrocchia di Santa Barbara - San Donato Milanese
Aspen Institute Italia
E4Impact Foundation
Italiadecide
Center for Strategic and International Studies
Global Reporting Initiative
CENSIS - Fondazione Centro Studi Investimenti Sociali
Institute for Human Rights and Business (IHRB)
AMICAL
Associazione CILLA Liguria
Associazione Amici della Luiss
Centro Studi Americani
Scuola materna "Sacro Cuore e Maria Ausiliatrice"
Parrocchia San Domenico Savio - Gela
Parrocchia di San Giacomo Maggiore Apostolo - Caviaga
Ospedale "Santo Spirito" e ASL di Pescara
Voluntary Principles Association (VPA)
Harvard University
Parks - Liberi e Uguali
Sport Insieme Livorno ONLUS
TDS - Toscana Disabili Sport ASD
Associazione di Volontariato e di promozione Sociale Pro Loco Sannazzaro
(*) The amount also includes the contribution relating to the protocol between Eni and the Basilicata Region.
Amount paid (€)
5,125,000
3,088,384
2,653,205
500,000
393,255
279,408
265,000
200,000
169,084
149,755
114,660
92,250
90,000
84,542
82,771
75,000
74,335
70,000
62,331
57,000
52,434
51,147
50,000
50,000
50,000
42,082
40,000
35,000
35,000
35,000
29,349
27,500
25,000
23,452
22,641
21,000
20,000
20,000
20,000
20,000
20,000
20,000
11,339
10,221
10,000
10,000
10,000
10,000
Eni Annual Report 2021 325
39 SIGNIFICANT NON-RECURRING EVENTS AND OPERATIONS
In 2021, in 2020 and 2019, Eni did not report any non-recurring events and operations.
40 POSITIONS OR TRANSACTIONS DERIVING FROM ATYPICAL AND/OR UNUSUAL OPERATIONS
In 2021, in 2020 and 2019, no transactions deriving from atypical and/or unusual operations were reported.
41 SUBSEQUENT EVENTS
In March 2022, the Italian Government enacted a law that
imposes a one-time expense on extra-profits of energy
companies determined on the basis of certain transactions for
the six-months ended March 31, 2022 compared to the same
period in the prior year. Considering that further legislative action
and implementation guidance are required and because the
data required to determine the extra-profit are not fully available,
management is not able to make a reliable estimate of the
impact of the law on the consolidated financial statements.
No further significant events were reported after December 31,
2021, apart from what is already included in the notes to these
Financial Statements.
Management report | Consolidated financial statements | Annex 326
Supplemental Oil & Gas information (unaudited)
information prepared
The following
in accordance with
“International Financial Reporting Standards” (IFRS) is presented
based on the disclosure rules of the FASB Extractive Activities -
Oil and Gas (Topic 932). Amounts related to minority interests
are immaterial.
CAPITALIZED COSTS
Capitalized costs represent the total expenditures for proved
and unproved mineral properties and related support equipment
and facilities utilized in oil and gas exploration and production
activities, together with related accumulated depreciation,
depletion and amortization. Capitalized costs by geographical
area consist of the following:
(€ million)
2021
Consolidated subsidiaries
Proved property
Unproved property
Support equipment and facilities
Incomplete wells and other
Italy
Rest of
Europe
North
Africa
Sub - Saharan
Egypt
Africa Kazakhstan
Rest
of Asia
America
Australia and
Oceania
Total
18,644
6,953
16,218
21,125
43,947
12,606
12,947
16,407
1,413
150,260
20
308
735
322
22
133
492
1,552
1,293
34
248
237
2,306
1,342
1,562
11
121
958
1,518
38
1,073
878
21
719
193
12
53
5,774
3,664
6,763
Gross Capitalized Costs
19,707
7,430
19,555 21,644
49,157
13,696 15,576
18,025
1,671
166,461
Accumulated depreciation, depletion
and amortization
Net Capitalized Costs consolidated
subsidiaries(a)
Equity-accounted entities
Proved property
Unproved property
Support equipment and facilities
Incomplete wells and other
Gross Capitalized Costs
Accumulated depreciation, depletion
and amortization
Net Capitalized Costs equity-accounted
entities(a)
2020
Consolidated subsidiaries
Proved property
Unproved property
Support equipment and facilities
Incomplete wells and other
(15,506)
(6,194)
(14,244)
(14,209)
(36,317)
(3,514)
(10,443)
(13,874)
(902)
(115,203)
4,201
1,236
5,311
7,435
12,840
10,182
5,133
4,151
769
51,258
11,483
2,235
36
3,179
16,933
(7,387)
9,546
128
8
9
145
(63)
82
1,517
3
1,323
2,843
(313)
2,530
12
1,987
7
227
12
2,221
(1,324)
12
897
15,115
2,247
54
4,738
22,154
(9,087)
13,067
18,456
6,465
14,596
19,081
39,848
11,278
10,662
14,567
1,359
136,312
20
300
671
311
20
147
454
1,424
1,094
33
216
193
2,163
1,226
2,551
10
109
1,411
34
1,064
1,469
896
20
458
179
11
39
5,477
3,360
7,686
Gross Capitalized Costs
19,447
6,943
17,568 19,523
45,788
12,461 13,576
15,941
1,588
152,835
Accumulated depreciation, depletion
and amortization
Net Capitalized Costs consolidated
subsidiaries(a)
Equity-accounted entities
Proved property
Unproved property
Support equipment and facilities
Incomplete wells and other
Gross Capitalized Costs
Accumulated depreciation, depletion
and amortization
(15,565)
(5,597)
(12,793)
(12,161)
(32,248)
(2,839)
(9,003)
(12,612)
(805)
(103,623)
3,882
1,346
4,775
7,362
13,540
9,622
4,573
3,329
783
49,212
11,466
2,131
23
1,566
15,186
(6,196)
68
8
9
85
(59)
1,384
17
1,401
(343)
11
1,833
6
209
11
2,048
(1,076)
14,751
2,142
37
1,801
18,731
(7,674)
Net Capitalized Costs equity-accounted
entities(a)
(a) The amounts include net capitalized financial charges totalling €767 million in 2021 and €843 million in 2020 for the consolidates subsidiaries and €360 million in 2021 and €170 million in
11,057
8,990
1,058
972
26
11
2020 for equity-accounted entities.
Eni Annual Report 2021
COSTS INCURRED
Costs
incurred represent amounts both capitalized and
expensed in connection with oil and gas producing activities.
Costs incurred by geographical area consist of the following:
327
Italy
Rest of
Europe
North
Africa
Sub - Saharan
Egypt
Africa Kazakhstan
Rest
of Asia
America
Australia and
Oceania
Total
(€ million)
2021
Consolidated subsidiaries
Proved property acquisitions
Unproved property acquisitions
Exploration
Development(a)
Total costs incurred consolidated
subsidiaries
Equity-accounted entities
Proved property acquisitions
Unproved property acquisitions
Exploration
Development(b)
Total costs incurred equity-accounted
entities
2020
Consolidated subsidiaries
Proved property acquisitions
Unproved property acquisitions
Exploration
Development(a)
Total costs incurred consolidated
subsidiaries
Equity-accounted entities
Proved property acquisitions
Unproved property acquisitions
Exploration
Development(b)
Total costs incurred equity-accounted
entities
2019
Consolidated subsidiaries
Proved property acquisitions
Unproved property acquisitions
Exploration
Development(a)
Total costs incurred consolidated
subsidiaries
Equity-accounted entities
Proved property acquisitions
Unproved property acquisitions
Exploration
Development(b)
Total costs incurred equity-accounted
entities(c)
16
182
198
96
96
92
936
1,028
19
472
491
20
235
255
47
1,481
1,528
62
230
292
1,054
1,178
125
1,574
3,931
20
1,098
1,118
3
185
188
188
785
973
7
196
203
176
1,024
1,200
57
452
509
2
67
422
491
6
33
497
536
59
59
55
69
278
402
3
3
136
842
978
4
4
61
620
681
6
6
135
101
749
1
94
1,589
985
1,684
206
1,959
2,165
15
481
496
4
4
5
5
23
232
1,199
1,454
1,226
(1)
(1)
37
37
8
3
83
657
751
2
2
63
437
500
14
14
144
97
106
879
1
27
28
1
10
11
39
43
82
8
9
613
3,627
4,257
92
1,001
1,093
57
483
3,694
4,234
47
1,504
1,551
144
256
875
8,227
9,502
1,054
1,178
124
1,620
3,976
(a) Includes the abandonment costs of the assets for €62 million in 2021, €516 million in 2020 and €2,069 million in 2019.
(b) Includes the abandonment decrease of the assets for €464 million in 2021, costs €424 million in 2020 and costs €838 million in 2019.
(c) Includes allocation at fair value of the assets purchased by Vår Energi AS.
Management report | Consolidated financial statements | Annex
328
RESULTS OF OPERATIONS FROM OIL AND GAS PRODUCING ACTIVITIES
Results of operations from oil and gas producing activities
represent only those revenues and expenses directly
associated with such activities,
including operating
overheads. These amounts do not include any allocation
of interest expenses or general corporate overheads and,
therefore, are not necessarily indicative of the contributions
to consolidated net earnings of Eni. Related income taxes
are calculated by applying the local income tax rates to the
pre-tax income from production activities. Eni is party to
certain Production Sharing Agreements (PSAs), whereby a
portion of Eni’s share of oil and gas production is withheld
and sold by its joint venture partners which are state owned
entities, with proceeds being remitted to the state to fulfil
Eni’s PSA related tax liabilities. Revenue and income taxes
include such taxes owed by Eni but paid by state-owned
entities out of Eni’s share of oil and gas production. Results
of operations from oil and gas producing activities by
geographical area consist of the following:
(€ million)
2021
Consolidated subsidiaries
Revenues:
- sales to consolidated entities
- sales to third parties
Total revenues
Production costs
Transportation costs
Production taxes
Exploration expenses
D.D. & A. and Provision for abandonment(a)
Other income (expenses)
Pretax income from producing activities
Income taxes
Results of operations from E&P activities
of consolidated subsidiaries
Equity-accounted entities
Revenues:
- sales to consolidated entities
- sales to third parties
Total revenues
Production costs
Transportation costs
Production taxes
Exploration expenses
D.D. & A. and Provision for abandonment
Other income (expenses)
Pretax income from producing activities
Income taxes
Results of operations from E&P activities
of equity-accounted entities
(a) Includes asset net reversal amounting to €1,263 million.
Italy
Rest of
Europe
North
Africa
Sub - Saharan
Egypt
Africa Kazakhstan
Rest
of Asia
America
Australia and
Oceania
Total
1,680
1,680
(326)
(4)
(128)
(16)
(31)
(395)
780
(198)
790
36
826
(147)
(35)
(72)
(196)
11
387
(156)
1,133
2,602
3,735
(581)
(45)
(192)
(27)
(357)
557
3,090
(1,450)
3,637
3,637
(399)
(10)
(47)
(990)
(310)
1,881
(848)
3,782
930
4,712
(816)
(20)
(379)
(238)
(1,468)
(330)
1,461
(708)
1,391
2,020
704
380
2,095
(211)
(150)
(1)
(431)
(120)
1,182
(394)
2,400
(251)
(5)
(230)
(135)
(665)
(173)
941
(739)
582
231
1,640
1,033
753
788
202
12
12
(6)
(1)
(2)
(3)
1,831
1,756
3,587
(388)
(140)
(35)
(879)
(287)
1,858
(1,237)
621
365
365
(25)
(12)
(112)
42
(158)
100
100
734
351
1,085
(288)
(11)
(28)
(21)
(243)
(132)
362
(17)
345
367
367
(15)
(88)
(154)
(197)
(87)
(66)
(1)
(1)
(1)
(153)
4
11,534
108
112
(17)
(1)
(69)
(2)
23
(15)
8,748
20,282
(3,036)
(280)
(957)
(558)
(4,450)
(894)
10,107
(4,525)
8
5,582
1,831
2,500
4,331
(434)
(153)
(202)
(35)
(994)
(643)
1,870
(1,303)
567
Eni Annual Report 2021
Italy
Rest of
Europe
North
Africa
Sub - Saharan
Rest
Egypt
Africa Kazakhstan
of Asia America
Australia and
Oceania
Total
329
(€ million)
2020
Consolidated subsidiaries
Revenues:
- sales to consolidated entities
- sales to third parties
Total revenues
Production costs
Transportation costs
Production taxes
Exploration expenses
799
799
(332)
(4)
(111)
(19)
D.D. & A. and Provision for abandonment(a)
(1,149)
Other income (expenses)
(255)
Pretax income from producing activities
(1,071)
Income taxes
Results of operations from E&P activities
of consolidated subsidiaries
219
(852)
Equity-accounted entities
Revenues:
- sales to consolidated entities
- sales to third parties
Total revenues
Production costs
Transportation costs
Production taxes
Exploration expenses
D.D. & A. and Provision for abandonment
Other income (expenses)
Pretax income from producing activities
Income taxes
Results of operations from E&P activities
of equity-accounted entities
(a) Includes asset net impairment amounting to €1,865 million.
334
53
387
(139)
(30)
(14)
(252)
(45)
(93)
69
(24)
862
782
1,644
(350)
(161)
(35)
(1,163)
(90)
(155)
469
314
616
1,610
2,478
2,226
(371)
(39)
(135)
(124)
(1,158)
(360)
39
(671)
2,478
(367)
(11)
(56)
(848)
(204)
992
(519)
(632)
473
10
10
(7)
(1)
(2)
(1)
(1)
(2)
1
(1)
2,315
784
3,099
(782)
(21)
(295)
(77)
788
547
1,335
(246)
(164)
(3)
1,333
179
1,512
(236)
(4)
(133)
(104)
(2,187)
(454)
(1,070)
(153)
315
(134)
(90)
(125)
(193)
434
204
638
(272)
(12)
(13)
(112)
(678)
(71)
(520)
86
1
109
110
(17)
(1)
(65)
6
33
(11)
6,620
5,964
12,584
(2,762)
(285)
(687)
(510)
(7,861)
(1,147)
(668)
(1,187)
181
(318)
(434)
22
(1,855)
307
307
(18)
(76)
(50)
(146)
17
(29)
(12)
(2)
(2)
(2)
862
1,230
2,092
(398)
(173)
(81)
(35)
(1,283)
(274)
(152)
441
289
25
(238)
(33)
(271)
131
131
(23)
(11)
(3)
(69)
(35)
(10)
(10)
Management report | Consolidated financial statements | Annex
330
(€ million)
2019
Italy
Rest of
Europe
North
Africa
Sub - Saharan
Rest
Egypt
Africa Kazakhstan
of Asia America
Australia and
Oceania
Total
1,493
1,493
(391)
(5)
(183)
(25)
(944)
(337)
(392)
148
(244)
Consolidated subsidiaries
Revenues:
- sales to consolidated entities
- sales to third parties
Total revenues
Production costs
Transportation costs
Production taxes
Exploration expenses
D.D. & A. and Provision for abandonment(a)
Other income (expenses)
Pretax income from producing activities
Income taxes
Results of operations from E&P activities
of consolidated subsidiaries(b)
Equity-accounted entities
Revenues:
- sales to consolidated entities
- sales to third parties
Total revenues
Production costs
Transportation costs
Production taxes
Exploration expenses
D.D. & A. and Provision for abandonment
Other income (expenses)
Pretax income from producing activities
Income taxes
Results of operations from E&P activities
of equity-accounted entities
(a) Includes asset net impairment amounting to €1,217 million.
1,081
4,084
5,165
(520)
(60)
(263)
(30)
(839)
(452)
3,001
(2,561)
3,715
3,715
(330)
(10)
(10)
(978)
(433)
1,954
(839)
440
1,115
15
15
(8)
(1)
(2)
(1)
(1)
2
(2)
618
30
648
(181)
(31)
(51)
(201)
(16)
168
(11)
157
1,080
677
1,757
(336)
(84)
(47)
(722)
(237)
331
(179)
152
4,576
944
5,520
(847)
(39)
(483)
(90)
(3,060)
(502)
499
(268)
231
207
207
(24)
(11)
(7)
(70)
(28)
67
67
1,195
2,367
766
149
1,961
(255)
(158)
(39)
(444)
(71)
994
2,516
(256)
(4)
(252)
(170)
(820)
(76)
938
(326)
(719)
668
219
(3)
(3)
(3)
825
180
1,005
(273)
(15)
(7)
(31)
(607)
(86)
(14)
(5)
(19)
315
315
(25)
(81)
(51)
(133)
25
(54)
(29)
5
227
232
(43)
(6)
(43)
(97)
(1)
42
(31)
12,160
10,095
22,255
(3,096)
(322)
(1,194)
(489)
(7,990)
(1,974)
7,190
(4,612)
11
2,578
1,080
1,214
2,294
(393)
(96)
(90)
(47)
(844)
(402)
422
(235)
187
(b) Results of operations exclude revenues, D.D. & A. and income taxes associated with 3.8 million boe as part of a long-term supply agreement to a state-owned national oil company, whereby the
buyer has paid the price without lifting the underlying volume in exercise of the take-or-pay clause. The price collected by the buyer has been recognized as revenues in the segment information of
the E&P sector prepared in accordance with IFRS and D.D. & A. and income taxes have been accrued accordingly, because the Group performance obligation under the contract has been fulfilled
and it is very likely that the buyer will not redeem its contractual right to lift within the contractual terms.
Eni Annual Report 2021
331
PROVED RESERVES OF OIL AND NATURAL GAS
Eni’s criteria concerning evaluation and classification of
proved developed and undeveloped reserves comply with
Regulation S-X 4-10 of the U.S. Securities and Exchange
Commission and have been disclosed in accordance with
FASB Extractive Activities - Oil and Gas (Topic 932).
Proved oil and gas reserves are those quantities of oil and
gas, which, by analysis of geoscience and engineering
data, can be estimated with reasonable certainty to be
economically producible, from a given date forward, from
known reservoirs, and under existing economic conditions,
operating methods, and government regulations, prior to
the time at which contracts providing the right to operate
expire, unless evidence indicates that renewal is reasonably
certain, regardless of whether deterministic or probabilistic
methods are used for the estimation. The project to extract
the hydrocarbons must have commenced or the operator
must be reasonably certain that it will commence the project
within a reasonable time. Existing economic conditions
include prices and costs at which economic producibility
from a reservoir is to be determined. The price shall be the
average price during the 12-month period prior to the ending
date of the period covered by the report, determined as an
un-weighted arithmetic average of the first-day-of-the-month
price for each month within such period, unless prices are
defined by contractual arrangements, excluding escalations
based upon future conditions.
In 2021, the average price for the marker Brent crude oil was
$69 per barrel. Net proved reserves exclude interests and
royalties owned by others.
Proved reserves are classified as either developed or
undeveloped.
Developed oil and gas reserves are reserves that can be
expected to be recovered through existing wells with existing
equipment and operating methods or in which the cost of the
required equipment is relatively minor compared to the cost
of a new well.
Undeveloped oil and gas reserves are reserves of any
category that are expected to be recovered from new
wells on undrilled acreage, or from existing wells where a
relatively major expenditure is required for recompletion.
Eni has its proved reserves audited on a rotational basis by
independent oil engineering companies35. The description
of qualifications of the person primarily responsible of the
reserves audit is included in the third-party audit report36.
In the preparation of their reports, independent evaluators
rely, without independent verification, upon data furnished
by Eni with respect to property interest, production, current
costs of operation and development, sale agreements, prices
and other factual information and data that were accepted
independent evaluators. These
as represented by the
data, equally used by Eni in its internal process, include
logs, directional surveys, core and PVT (Pressure Volume
Temperature) analysis, maps, oil/gas/water production/
injection data of wells, reservoir studies and technical analysis
relevant to field performance, long-term development plans,
future capital and operating costs.
In order to calculate the economic value of Eni equity
reserves, actual prices applicable to hydrocarbon sales, price
adjustments required by applicable contractual arrangements,
and other pertinent information are provided. In 2021, Ryder
Scott Company, DeGolyer and MacNaughton and Societé
Generale de Surveillance provided an independent evaluation
of about 27% of Eni’s total proved reserves as of December 31,
202137, confirming, as in previous years, the reasonableness
of Eni’s internal evaluations.
In the three-year period from 2019 to 2021, 93%38 of Eni’s total
proved reserves were subject to independent evaluation. As
of December 31, 2021, the principal properties which did not
undergo an independent evaluation in the last three years
were Belayim in Egypt and the fields of Area 1 in Mexico.
Eni operates under production sharing agreements in several
of the foreign jurisdictions where it has oil and gas exploration
and production activities. Reserves of oil and natural gas to
which Eni is entitled under PSA arrangements are shown in
accordance with Eni’s economic interest in the volumes of oil
and natural gas estimated to be recoverable in future years.
Such reserves include estimated quantities allocated to Eni
for recovery of costs, income taxes owed by Eni but settled by
its joint venture partners (which are state-owned entities) out
of Eni’s share of production and Eni’s net equity share after
cost recovery. Proved oil and gas reserves associated with
PSAs represented 58%, 57% and 57% of total proved reserves
as of December 31, 2021, 2020 and 2019 respectively, on an
oil-equivalent basis. Similar effects as PSAs apply to service
contracts; proved reserves associated with such contracts
represented 3%, 4%, and 3% of total proved reserves on an
oil-equivalent basis as of December 31, 2021, 2020 and 2019,
respectively.
Oil and gas reserves quantities include: (i) oil and natural gas
quantities in excess of cost recovery which the company
has an obligation to purchase under certain PSAs with
governments or authorities, whereby the company serves
(35) From 1991 to 2002 DeGolyer and McNaughton, from 2003 also Ryder Scott. In 2018 and 2021 an independent evaluation was provided also by Societé Generale
de Surveillance (SGS).
(36) The reports of independent engineers are available on Eni website eni.com, section Publications/Annual Report 2021.
(37) Including reserves of equity-accounted entities.
(38) The percentage increases to 94% considering the certification of A-LNG conducted by Gaffney Cline for the shareholders of the A-LNG Consortium (Eni 13.6%).
Management report | Consolidated financial statements | Annex 332
as producer of reserves. Reserves volumes associated with
oil and gas deriving from such obligation represent 4%, 3%
and 4% of total proved reserves as of December 31, 2021,
2020 and 2019, respectively, on an oil equivalent basis; (ii)
volumes of proved reserves of natural gas to be consumed
in operations amounted to approximately 2,335 BCF at 2021
year-end (2,337 BCF and 2,330 BCF respectively at 2020 and
2019 year-end); (iii) the quantities of hydrocarbons related to
the Angola LNG plant.
Numerous uncertainties are inherent in estimating quantities
of proved reserves, in projecting future productions and
development costs. The accuracy of any reserve estimate
is a function of the quality of available data and engineering
and geological interpretation and evaluation. The results of
drilling, testing and production after the date of the estimate
may require substantial upward or downward revisions. In
addition, changes in oil and natural gas prices have an effect
on the quantities of Eni’s proved reserves since estimates of
reserves are based on prices and costs relevant to the date
when such estimates are made. Consequently, the evaluation
of reserves could also significantly differ from actual oil and
natural gas volumes that will be produced.
PROVED UNDEVELOPED RESERVES
Proved undeveloped reserves as of December 31, 2021
totalled 2,020 mmboe, of which 990 mmbbl of liquids mainly
concentrated in Africa and Asia and 5,469 BCF of natural gas
particularly located in Africa. Proved undeveloped reserves of
consolidated subsidiaries amounted to 775 mmbbl of liquids
and 4,152 BCF of natural gas. Changes in Eni’s 2021 proved
undeveloped reserves were as follows:
(mmboe)
Proved undeveloped reserves as of December 31, 2020
Transfer to proved developed reserves
Extensions and discoveries
Revisions of previous estimates
Improved recovery
Proved undeveloped reserves as of December 31, 2021
In 2021, total proved undeveloped reserves increased by
15 mmboe (proved undeveloped reserves of consolidated
companies decreased by 168 mmboe, while those of joint
ventures and associates increased by 183 mmboe).
Main changes derived from:
(i) proved undeveloped
reserves matured
to proved
developed reserves amounted to -232 mmboe, and were
driven by progress in development activities, production
start-ups and project revisions. The main reclassifications
to proved developed reserves related to the fields of
Merakes in Indonesia (55 mmboe), LNG project in Nigeria
(45 mmboe), Mizton in Mexico (23 mmboe), Snorre in
Norvay (13 mmboe), Karachaganak in Kazakhstan (11
mmboe) e Zubair in Iraq (8 mmboe);
(ii) new discoveries and extensions of 62 mmboe, of which
19 mmbbl of oil and 230 BCF of natural gas. The increase
in oil reserves of 19 mmbbl was driven by the FIDs made
for the New Gas Consortium in Angola (6 mmbbl), Cuica
2,005
(232)
62
174
11
2,020
e Ndungu in Block 15/06 in Angola (5 mmbbl) and Berkine
North project in Algeria (5 mmbbl). The increase of 230
BCF of natural gas was due to the New Gas Consortium
in Angola;
(iii) revisions of previous estimates were positive for 174
mmboe, of which 9 mmbbl of oil and 882 BCF of natural
gas. Positive revisions of 334 mmBOE mainly refer to
increased entitlements in area D in Libya (74 mmboe)
and Val d’Agri in Italy (23 mmboe), as well as the progress
of development activities at Zohr in Egypt (58 mmboe)
and the finalization of gas commercial agreements in
Nigeria (30 mmboe). Negative revisions of 160 mmboe
mainly refer to the price effect relating to Zubair in Iraq
(-56 mmboe), Area 1 in Mexico (-13 mmboe), Coral in
Mozambique (-13 mmboe), Belayim in Egypt (-13 mmboe)
and the price effect on Merakes in Indonesia (-11 mmboe);
(iv) improved recoveries of 12 mmboe mainly referred to the
Oooguruk field in United States.
Eni Annual Report 2021 333
PROVED RESERVES OF CRUDE OIL (INCLUDING CONDENSATE AND NATURAL GAS LIQUIDS)
Main changes in proved reserves of crude oil (including
condensates and natural gas liquids) reported in the tables
above for the period 2021, 2020 and 2019 are discussed
below:
(million barrels)
2021
Consolidated subsidiaries
Reserves at December 31, 2020
of which: developed
undeveloped
Purchase of Minerals in Place
Revisions of Previous Estimates
Improved Recovery
Extensions and Discoveries
Production
Sales of Minerals in Place
Reserves at December 31, 2021
Equity-accounted entities
Reserves at December 31, 2020
of which: developed
undeveloped
Purchase of Minerals in Place
Revisions of Previous Estimates
Improved Recovery
Extensions and Discoveries
Production
Sales of Minerals in Place
Reserves at December 31, 2021
Reserves at December 31, 2021
Developed
consolidated subsidiaries
equity-accounted entities
Undeveloped
consolidated subsidiaries
equity-accounted entities
Italy
Rest of
Europe
North
Africa
Sub - Saharan
Egypt
Africa Kazakhstan
Rest
of Asia
America
Australia and
Oceania
Total
178
146
32
32
(13)
197
197
146
146
51
51
34
31
3
8
(1)
(7)
34
400
176
224
17
2
(41)
378
412
209
34
175
203
203
383
243
140
227
172
55
49
11
6
(45)
2
(30)
393
210
12
12
(2)
(1)
9
402
234
225
9
168
168
210
164
164
46
46
624
469
155
21
2
16
(72)
(2)
589
18
15
3
4
(1)
21
610
444
435
9
166
154
12
805
716
89
579
297
282
(58)
(74)
224
143
81
1
21
10
(37)
(29)
(19)
1
1
3,055
2,218
837
1
10
12
23
(252)
(2)
710
476
237
1
2,847
30
30
(23)
(1)
6
243
170
164
6
73
73
460
233
227
(4)
2
(44)
414
3,261
2,271
2,072
199
990
775
215
1
1
1
710
641
641
69
69
476
262
262
214
214
Management report | Consolidated financial statements | Annex
334
(million barrels)
2020
Consolidated subsidiaries
Reserves at December 31, 2019
of which: developed
undeveloped
Purchase of Minerals in Place
Revisions of Previous Estimates
Improved Recovery
Extensions and Discoveries
Production
Sales of Minerals in Place
Reserves at December 31, 2020
Equity-accounted entities
Reserves at December 31, 2019
of which: developed
undeveloped
Purchase of Minerals in Place
Revisions of Previous Estimates
Improved Recovery
Extensions and Discoveries
Production
Sales of Minerals in Place
Reserves at December 31, 2020
Reserves at December 31, 2020
Developed
consolidated subsidiaries
equity-accounted entities
Undeveloped
consolidated subsidiaries
equity-accounted entities
Italy
Rest of
Europe
North
Africa
Sub - Saharan
Egypt
Africa Kazakhstan
Rest
of Asia
America
Australia and
Oceania
Total
194
137
57
1
(17)
178
178
146
146
32
32
41
37
4
1
(8)
34
424
219
205
(11)
30
(43)
400
434
207
31
176
227
3
224
468
301
167
264
149
115
694
519
175
746
682
64
491
245
246
225
148
77
1
1
(44)
(14)
10
100
114
16
(41)
(23)
(80)
(41)
(32)
5
1
4
(21)
3,124
2,219
905
184
5
5
(263)
383
227
624
805
579
224
1
3,055
12
12
12
395
255
243
12
140
140
227
172
172
55
55
10
7
3
9
(1)
18
642
484
469
15
158
155
3
31
31
(1)
30
254
173
143
30
81
81
477
269
208
(2)
30
(45)
460
3,515
2,451
2,218
233
1,064
837
227
1
1
1
805
716
716
89
89
579
297
297
282
282
Eni Annual Report 2021
335
Italy
Rest of
Europe
North
Africa
Sub - Saharan
Egypt
Africa Kazakhstan
Rest
of Asia
America
Australia and
Oceania
Total
208
156
52
5
(19)
194
194
137
137
57
57
48
44
4
1
(8)
41
297
154
143
109
45
6
(27)
(6)
424
465
256
37
219
209
4
205
493
317
176
279
153
126
37
10
2
(27)
(62)
468
264
11
11
2
(1)
12
480
313
301
12
167
167
264
149
149
115
115
718
551
167
46
21
(90)
(1)
694
12
8
4
(2)
10
704
526
519
7
178
175
3
704
587
117
476
252
224
79
45
2
(32)
(37)
746
491
746
682
682
64
64
491
245
245
246
246
252
143
109
29
(16)
9
(20)
(29)
225
37
32
5
(5)
(1)
31
256
179
148
31
77
77
5
5
(4)
3,183
2,208
975
29
203
34
(295)
(30)
1
3,124
357
205
152
109
42
6
(31)
(6)
477
3,601
2,488
2,219
269
1,113
905
208
1
1
1
(million barrels)
2019
Consolidated subsidiaries
Reserves at December 31, 2018
of which: developed
undeveloped
Purchase of Minerals in Place
Revisions of Previous Estimates
Improved Recovery
Extensions and Discoveries
Production
Sales of Minerals in Place(a)
Reserves at December 31, 2019
Equity-accounted entities
Reserves at December 31, 2018
of which: developed
undeveloped
Purchase of Minerals in Place
Revisions of Previous Estimates
Improved Recovery
Extensions and Discoveries
Production
Sales of Minerals in Place
Reserves at December 31, 2019
Reserves at December 31, 2019
Developed
consolidated subsidiaries
equity-accounted entities
Undeveloped
consolidated subsidiaries
equity-accounted entities
(a) Includes 0.6 Mboe as part of a long-term supply agreement to a state-owned national oil company, whereby the buyer has paid the price without lifting the underlying volume in exercise of
the take-or-pay clause because it is very likely that the buyer will not redeem its contractual right to lift (make up) the volume paid.
Main changes in proved reserves of crude oil (including
condensates and natural gas liquids) reported in the tables
above for the period 2019-2021 are discussed below.
CONSOLIDATED SUBSIDIARIES
Purchase of Minerals in Place
In 2019, purchase of proved reserves (29 mmbbl) related to the
acquisition of 100% of the Oooguruk production field in Alaska.
In 2020, no purchases were made.
In 2021, there are two acquisitions (totaling 1 mmboe) of
Lucius fields in the U.S. and Conwy in the U.K.
Revisions of Previous Estimates
In 2019, revisions of previous estimates amounted to
203 mmbbl and were mainly due to: (i) positive revisions
of 79 mmbbl in Kazakhstan in relation to the progress in
development activities of the Kashagan and Karachaganak
fields; (ii) positive revisions of 37 mmbbl in North Africa
primarily in relation to the development of the Berkine
Nord project in Algeria and, to a lesser extent,contributions
from development projects in Libya; (iii) positive revisions
of 46 mmbbl in the Sub-Saharan Africa in relation to the
progress in development activities of projects in Nigeria
and Angola; and (iv) 45 mmbbl of upward revisions in the
rest of Asia were due to the progress of development in the
Umm Shaiff and other projects in UAE (25 mmbbl) and to
entitlement effects in Iraq, Turkmenistan and Timor Leste.
Upward revisions also include 6 mmbbl in Italy and Rest of
Europe and 4 mmbbl in the USA. Downward revisions (total
24 mmbbl) are related to Mexico Area 1 (20 mmbbl) due
to the removal of uneconomic volumes and for 4 mmbbl
in Australia.
In 2020, revisions of previous estimates amounted to an
increase of 184 mmbbl. Positive revisions of 100 mmbbl
reported in Kazakhstan were driven by higher entitlements and
progress in development activities. In the rest of Asia, positive
revisions of 114 mmbbl were due to higher entitlements in
Iraq (74 mmbbl) and progress at a few projects, among which
the most important was the Umm Shaif/Nasr concession in
the United Arab Emirates. In the Sub-Saharan Africa positive
revisions of 10 mmbbl were due to higher entitlements in Nigeria
(14 mmbbl), Angola (8 mmbbl ) and Ghana (3 mmbbl), partly
offset by negative revisions due to the debooking of the Loango
and Zatchi fields reserves in Congo (-18 mmbbl). In America,
positive revisions of 16 mmbbl were due to higher entitlements
Management report | Consolidated financial statements | Annex
336
in Mexico (25 mmbbl), partially offset by the removal of non-
economic reserves at various fields in the United States. In
Egypt, negative revisions of 14 mmbbl were mainly due to the
Abu Rudeis project. In North Africa negative revisions of 44
mmbbl were driven by price effects and capital expenditures
curtailments in Libya (-30 mmbbl) and Algeria (-17 mmbbl).
In 2021, revisions of previous estimates are 10 mmbbl detailed
as follows. In Italy there are positive revisions of 32 mmbbl
mainly due to the Val d’Agri project. In the Rest of Europe 8
mmbbl of positive revisions were registered, mainly in the
United Kingdom. In the Rest of North Africa revisions totaled
49 mmbbl, comprising positive revisions (+62 mmbbl) of
which +42 mmbbl in Libya (mainly in Area D) and +18 mmbbl
in Algeria (BRN +5 mmbbl and other minor fields) and negative
revisions (-13 mmbbl) mainly in Algeria (BRW -4 mmbbl) and
other minor fields. In Egypt there were revisions of 11 mmbbl,
consisting of positive revisions (21 mmbbl) mainly in Meleiha
and negative revisions (-10 mmbbl) mainly in Belayim. In Sub-
Saharan Africa, revisions totaled +21 mmbbl, consisting of
positive revisions (+74 mmbbl) primarily in Nigeria (+42 mmbbl)
and Angola (+22 mmbbl) and negative revisions (-53 mmbbl)
including -23 mmbbl in Congo and -13 mmbbl in Nigeria. In
Kazakhstan, revisions are negative 58 mmbbl, mainly related
to the Karachaganak field. In the Rest of Asia revisions (-74
mmbbl) are due to positive revisions (+21 mmbbl) in the United
Arab Emirates and negative revisions (-95 mmbbl) mainly in
Iraq. In the Americas there were total revisions of 21 mmbbl,
comprising positive revisions (+38 mmbbl) in the United States
and negative revisions (-17 mmbbl) in Mexico.
Improved Recovery
In 2019, no improved recoveries were reported.
In 2020, improved recoveries of 5 mmbbl related to the Burun
project in Turkmenistan.
In 2021, 12 mmbbl are totaled from recovery-assisted
improvements primarily on the Oooguruk field in the U.S.
Extensions and Discoveries
In 2019, new discoveries and extensions of 34 mmbbl
were driven for 21 mmbbl by the final investment decisions
relating to the Assa North field in Nigeria and the Agogo field
in the operated Block 15/06 offshore Angola. The remaining
extensions and discoveries related to certain fields in USA (9
mmbbl in total, relating to Nikaitchuq and Pegasus-2 fields)
and 4 mmbbl in North Africa and Middle East Region driven
by incremental near-field discoveries.
In 2020, new discoveries and extensions added 5 mmbbl
related to the Pegasus and Front Runner fields in the United
States and the Mahani field in the United Arab Emirates.
In 2021, new discoveries and extensions total 23 million
barrels, primarily related to Cuica and Ndungu in Block 15/06
and the New Gas Consortium project in Angola and the
BKNEP, Zas and Ret projects in Algeria.
Sales of Minerals in Place
In 2019, the sale of 29 mmbbl related for 28 mmbbl to the
sale of the entire interest in the production assets in Ecuador.
In 2020, no sales of oil properties were reported.
In 2021, there is a sale of OML 17 in Nigeria for 2 mmbbl.
EQUITY-ACCOUNTED ENTITIES
Purchase of Minerals in Place
In 2019, purchase of 109 mmbbl related to the acquisition
of assets of ExxonMobil in Norway by the joint venture Vår
Energi.
In 2020 and 2021, no purchases of proved reserves were made.
Revisions of Previous Estimates
In 2019, positive revisions of previous estimates for 42 mmbbl
mainly related to the Rest of Europe area (45 mmbbl) due to
development activities of the Balder X project in Norway.
In 2020, negative revisions of previous estimates amounted
to 2 mmbbl. In the Rest of Europe negative revisions for
11 mmbbl were reported mainly at the Ringhorne East
and Ekofisk fields in Norway driven by price effects. These
were partially offset by positive revisions reported in the
Sub-Saharan Africa up by 9 mmbbl driven by an improved
performance at the Angola LNG project.
In 2021, revisions were negative 4 mmbbl, mainly located in
the Rest of Europe (+17 mmbbl) in Norway and the Americas
(-23 mmbbl in Venezuela). Minor revisions in Angola, Tunisia
and Mozambique.
Extensions and Discoveries
In 2019, extensions and new discoveries of 6 mmbbl related
to the development of the Trestakk field in Norway.
In 2020, extensions and new discoveries of 30 mmbbl were
reported as a result of the final investment decision for the
Bredaiblikk project in Norway.
In 2021, extensions and new discoveries total 2 mmbbl and
are located in Norway.
Sales of Minerals in Place
In 2019, sales of 6 mmbbl related to the divestment of minor
assets in Norway.
In 2020 and 2021, no sales of proved reserves were made.
Eni Annual Report 2021 PROVED RESERVES OF NATURAL GAS
337
Italy
Rest of
Europe
North
Africa
Sub - Saharan
Egypt
Africa Kazakhstan
Rest
of Asia
America
Australia and
Oceania
Total
(billion cubic feet)
2021
Consolidated subsidiaries
Reserves at December 31, 2020
of which: developed
undeveloped
Purchase of Minerals in Place
348
280
68
208
194
14
2,201
1,014
1,187
4,692
4,511
181
3,864
1,751
2,113
2,003
2,003
1,589
674
915
Revisions of Previous Estimates
661
78
321
(2)
(903)
(213)
120
Improved Recovery
Extensions and Discoveries
Production(a)
Sales of Minerals in Place
5
(44)
(91)
13
(263)
(538)
Reserves at December 31, 2021
918
247
2,272
4,152
Equity-accounted entities
Reserves at December 31, 2020
of which: developed
undeveloped
Purchase of Minerals in Place
Revisions of Previous Estimates
Improved Recovery
Extensions and Discoveries
Production(b)
Sales of Minerals in Place
Reserves at December 31, 2021
Reserves at December 31, 2021
Developed
consolidated subsidiaries
equity-accounted entities
Undeveloped
consolidated subsidiaries
equity-accounted entities
510
415
95
234
28
(118)
654
901
699
242
457
202
5
197
918
729
729
189
189
14
14
(3)
(1)
10
2,282
791
781
10
1,491
1,491
4,152
3,656
3,656
496
496
(a) It includes production volumes consumed in operations equal to 208 Bcf.
(b) It includes production volumes consumed in operations equal to 15 Bcf.
186
(179)
(15)
2,953
364
170
194
952
(31)
1,285
4,238
1,924
1,759
165
2,314
1,194
1,120
175
109
66
1
125
474
315
159
(15)
15,554
10,851
4,703
1
172
206
2
(85)
(189)
(27)
(31)
(1,447)
(15)
1,705
1,522
274
428
14,471
1,559
1,559
(12)
(87)
1,460
1,734
1,670
210
1,460
64
64
2,447
2,158
289
1,171
28
(237)
3,409
17,880
12,411
10,319
2,092
5,469
4,152
1,317
428
266
266
162
162
1,705
1,522
1,705
1,705
971
971
551
551
Management report | Consolidated financial statements | Annex
338
(billion cubic feet)
2020
Consolidated subsidiaries
Reserves at December 31, 2019
of which: developed
undeveloped
Purchase of Minerals in Place
Italy
Rest of
Europe
North
Africa
Sub - Saharan
Egypt
Africa Kazakhstan
Rest
of Asia
America
Australia and
Oceania
Total
752
657
95
262
242
20
2,738
1,374
1,364
5,191
4,777
414
4,103
1,858
2,245
1,969
1,969
1,349
685
664
240
186
54
507
322
185
17,111
12,070
5,041
Revisions of Previous Estimates
(288)
5
(259)
(65)
9
138
356
(33)
Improved Recovery
Extensions and Discoveries
Production(a)
Sales of Minerals in Place
(116)
(59)
(278)
(440)
(248)
(104)
(170)
6
54
4
(36)
(137)
64
(33)
(1,484)
Reserves at December 31, 2020
348
208
2,201
4,692
3,864
2,003
1,589
175
474
15,554
Equity-accounted entities
Reserves at December 31, 2019
of which: developed
undeveloped
Purchase of Minerals in Place
Revisions of Previous Estimates
Improved Recovery
Extensions and Discoveries
Production(b)
Sales of Minerals in Place
Reserves at December 31, 2020
Reserves at December 31, 2020
Developed
consolidated subsidiaries
equity-accounted entities
Undeveloped
consolidated subsidiaries
equity-accounted entities
772
597
175
(128)
(134)
510
718
609
194
415
109
14
95
348
280
280
68
68
14
14
1
(1)
14
2,215
1,028
1,014
14
1,187
1,187
4,692
4,511
4,511
181
181
287
88
199
113
(36)
364
4,228
1,921
1,751
170
2,307
2,113
194
1,648
1,648
(12)
(77)
1,559
1,734
1,668
109
1,559
66
66
2,721
2,347
374
(26)
(248)
2,447
18,001
13,009
10,851
2,158
4,992
4,703
289
474
315
315
159
159
2,003
1,589
2,003
2,003
674
674
915
915
(a) It includes production volumes consumed in operations equal to 223 Bcf.
(b) It includes production volumes consumed in operations equal to 16 Bcf.
Eni Annual Report 2021
Italy
Rest of
Europe
North
Africa
Sub - Saharan
Egypt
Africa Kazakhstan
Rest
of Asia
America
Australia and
Oceania
Total
339
(billion cubic feet)
2019
Consolidated subsidiaries
Reserves at December 31, 2018
of which: developed
undeveloped
Purchase of Minerals in Place
Revisions of Previous Estimates
Improved Recovery
Extensions and Discoveries
Production(a)
Sales of Minerals in Place(b)
1,199
980
219
(310)
320
300
20
4
2
2,890
1,447
1,443
5,275
3,331
1,944
3,506
1,871
1,635
1,989
1,846
143
1,217
822
395
267
467
747
79
104
(137)
(64)
(419)
(551)
277
154
123
7
(23)
4
(24)
(1)
240
1,716
1,716
1
(69)
1,648
1,888
1,834
186
1,648
54
54
651
452
199
17,324
11,203
6,121
7
(108)
1,227
358
(36)
(1,738)
(67)
507
17,111
2,400
2,063
337
405
91
(2)
(173)
2,721
19,832
14,417
12,070
2,347
5,415
5,041
374
507
322
322
185
185
78
(210)
(18)
4,103
310
57
253
13
(36)
287
4,390
1,946
1,858
88
2,444
2,245
199
274
(99)
(198)
(48)
1,969
1,349
1,969
1,349
1,969
1,969
685
685
664
664
Reserves at December 31, 2019
752
262
2,738
5,191
Equity-accounted entities
Reserves at December 31, 2018
of which: developed
undeveloped
Purchase of Minerals in Place
Revisions of Previous Estimates
Improved Recovery
Extensions and Discoveries
Production(c)
Sales of Minerals in Place
Reserves at December 31, 2019
Reserves at December 31, 2019
Developed
consolidated subsidiaries
equity-accounted entities
Undeveloped
consolidated subsidiaries
equity-accounted entities
360
276
84
405
76
(2)
(67)
772
1,034
839
242
597
195
20
175
752
657
657
95
95
14
14
1
(1)
14
2,752
1,388
1,374
14
1,364
1,364
5,191
4,777
4,777
414
414
(a) It includes production volumes consumed in operations equal to 231 Bcf.
(b) Includes 498 Mscms as part of a long-term supply agreement to a state-owned national oil company, whereby the buyer has paid the price without lifting the underlying volume in exercise
of the take-or-pay clause because it is very likely that the buyer will not redeem its contractual right to lift (make up) the volume paid.
(c) It includes production volumes consumed in operations equal to 11 Bcf.
Main changes in proved reserves of natural gas reported
in the tables above for the period 2019-2021 are discussed
below.
CONSOLIDATED SUBSIDIARIES
Purchase of Minerals in Place
In 2019, purchase of 7 BCF related to the Oooguruk field in
Alaska.
In 2020, no purchases were made.
In 2021, 1 BCF of acquisition related to the Lucius field in the
United States is recorded.
Revisions of Previous Estimates
In 2019, positive revisions of previous estimates of 1,227
BCF mainly related to: (i) the Sub-Saharan Africa area for
747 BCF following the final investment decision for the
upgrading of the LNG Bonny project in Nigeria (Eni’s interest
10.4%); (ii) Egypt for 467 BCF following the progress in
development activities of the Zohr field and other minor
projects; (iii) upward revisions of 267 BCF were reported
in North Africa and were mainly driven by progress in the
development at Berkine North fields in Algeria (227 BCF),
while the remaining volumes related to the progress of
activities in Lybia and other fields in Algeria; (iv) in Kazakhstan
we recorded upward revisions of 79 BCF due to better field
performance; (v) in the Rest of Asia the upward revisions
related to Pakistan (23 BCF relating to over nine fields),
United Arab Emirates (13 BCF in three fields), Indonesia at
the Jangkrik field (15 BCF) and Iraq at the Zubair Field (15
BCF) mainly driven by progress in development activities.
Other revisions for 11 BCF were recorded in U.K. and U.S.
In 2020, revisions of previous estimates were a net negative
of 137 BCF. In Italy, 288 BCF of negative revisions were
reported mainly at the Hera Lacina-Linda, Cervia-Arianna,
Luna, Annamaria, Val d’Agri and Porto Garibaldi-Agostino
projects and other gas fields in the Adriatic sea due to price
effects. In North Africa, 259 BCF of negative revisions were
Management report | Consolidated financial statements | Annex
340
driven by price effects in Libya (-287 BCF) in particular at
Bahr Essalam and Area E fields and in various fields in
Algeria (+18 BCF). In Egypt, 65 BCF of negative revisions
were recorded at the Tuna due to performance revision
and at Zohr field due to price effect. In America, 33 BCF of
negative revision were due to price effects at various US gas
fields (-78 BCF), mainly Alliance fields, partially offset by
Area 1 in Mexico (46 BCF).
Revisions were positive for 356 BCF in the Rest of Asia driven
by a better performance at the Merakes projects in Indonesia
(227 BCF) and at the Zubair field in Iraq (97 BCF) due to
improved production expectations. In Kazakhstan, positive
revisions of 138 BCF were reported at the Karachaganak
project due to technical appraisal and higher entitlements.
In 2021, total revisions are 172 BCF as follows: Italy (661
BCF) mainly due to recovery of non-economic cutoffs;
Rest of Europe (78 BCF) in the United Kingdom mainly due
to recovery of non-economic cutoffs; Rest of North Africa
(321 BCF) mainly in Libya due to price effect; Egypt (-2 BCF),
consisting of positive revisions of 110 BCF meters mainly
in Baltim SW and negative revisions 112 BCF mainly in
Port Fouad; Sub-Saharan Africa total revisions of -903 BCF,
primarily linked to the reclassification of the Mozambique
project from a consolidated company to a equity-accounted
company (-993 BCF) and positive revisions of 274 BCF,
primarily in Nigeria. In Kazakhstan, reductions of 213 BCF
were recorded mainly in Karachaganak due to the PSA
effect; in the Rest of Asia, positive revisions of 120 BCF
meters were mainly located in Indonesia (Merakes); in the
Americas, revisions of 125 BCF occurred mainly in the
United States due to the recovery of non-economic cutoffs;
in Australia and Oceania, revisions totaled -15 BCF mainly
related to the Blacktip project.
Improved Recovery
In 2019, 2020 and 2021, no material improved recoveries
were recorded.
Extensions and Discoveries
In 2019, new discoveries and extensions of 358 BCF mainly
related to the Rest of Asia (274 BCF) following to the final
investment decision for the Udr-Ghasha project in the
offshore of the United Arab Emirates.
In 2020, new discoveries and extensions of 64 BCF mainly
related to the Rest of Asia (with an upward revision of 54 BCF)
following the final investment decision for the Mahani field
in the United Arab Emirates, with production started-up in
January 2021, and Egypt for the near-field discoveries in the
Bashrush and Abu Madi West concessions.
In 2021, new discoveries and extensions total 206 BCF and
relate primarily to the New Gas Consortium project in Angola
and to a lesser extent the Berkine North project in Algeria.
Sales of Minerals in Place
In 2019, sales of 67 BCF mainly related to the Rest of Asia
area (48 BCF) following the sale of the 20% stake in the
Merakes discovery in Indonesia.
In 2020, no sales were made.
In 2021, there are divestments of 15 BCF related to the exit
from OML 17 in Nigeria.
EQUITY-ACCOUNTED ENTITIES
Purchase of Minerals in Place
In 2019, purchase of 405 BCF related to the acquisition of
assets of ExxonMobil in Norway by the joint venture Vår
Energi.
In 2020 and 2021, no purchases were made.
Revisions of Previous Estimates
In 2019, positive revisions of previous estimates of 91 BCF
essentially related to the Rest of Europe (76 BCF) following
the progress in the Balder X project and the Snorre and
Smørbukk fields in Norway.
In 2020, negative revisions of previous estimates of 26 BCF
essentially related to the Rest of Europe (128 BCF) mainly in
relation to the Grane and Midgard projects in Norway. In Sub-
Saharan Africa, 113 BCF of positive revisions were reported
at the Angola LNG project due to a better performance.
In 2021, revisions to previous estimates are 1,171 BCF, primarily
due to the reclassification of the Mozambique project from a
consolidated company to a equity-accounted company.
Extensions and Discoveries
In 2019 and 2020, there were no extensions or new relevant
discoveries.
In 2021, 28 BCF of extensions and new discoveries
are recorded, mainly due to the investment decision in
Tommeliten Alpha in Norway.
Sales of Minerals in Place
In 2019 sales were not material in Rest of Asia and Europe,
respectively, while in 2020 and 2021 no sales were made.
Eni Annual Report 2021 341
STANDARDIZED MEASURE OF DISCOUNTED FUTURE NET CASH FLOWS
Estimated future cash inflows represent the revenues that would
be received from production and are determined by applying the
year-end average prices during the years ended.
Future price changes are considered only to the extent provided
by contractual arrangements. Estimated future development and
production costs are determined by estimating the expenditures
to be incurred in developing and producing the proved reserves
at the end of the year. Neither the effects of price and cost
escalations nor expected future changes in technology and
operating practices have been considered.
The standardized measure is calculated as the excess of
future cash inflows from proved reserves less future costs of
producing and developing the reserves, future income taxes and
a yearly 10% discount factor.
Future production costs include the estimated expenditures
related to the production of proved reserves plus any production
inflation. Future
taxes without consideration of
future
development costs include the estimated costs of drilling
development wells and installation of production facilities, plus
the net costs associated with dismantlement and abandonment
of wells and facilities, under the assumption that year-end costs
continue without considering future inflation. Future income
taxes were calculated in accordance with the tax laws of the
countries in which Eni operates.
The standardized measure of discounted future net cash flows,
related to the preceding proved oil and gas reserves, is calculated
in accordance with the requirements of FASB Extractive Activities
- Oil and Gas (Topic 932). The standardized measure does not
purport to reflect realizable values or fair market value of Eni’s
proved reserves. An estimate of fair value would also take into
account, among other things, hydrocarbon resources other than
proved reserves, anticipated changes in future prices and costs
and a discount factor representative of the risks inherent in the
oil and gas exploration and production activity.
The standardized measure of discounted future net cash flows by geographical area consists of the following:
(€ million)
December 31, 2021
Consolidated subsidiaries
Future cash inflows
Future production costs
Future development and abandonment
costs
Future net inflow before income tax
Future income tax
Future net cash flows
10 % discount factor
Standardized measure of discounted
future net cash flows
Equity-accounted entities
Future cash inflows
Future production costs
Future development and abandonment
costs
Future net inflow before income tax
Future income tax
Future net cash flows
10 % discount factor
Standardized measure of discounted
future net cash flows
Total consolidated subsidiaries
and equity-accounted entities
Italy
Rest of
Europe
North
Africa
Sub - Saharan
Egypt
Africa Kazakhstan
Rest
of Asia
America
Australia and
Oceania
Total
18,933
4,679
33,142
31,344
40,929
36,430 32,594
13,607
1,511
213,169
(6,929)
(1,496)
(6,325)
(9,726)
(13,196)
(7,343)
(9,578)
(4,189)
(251)
(59,033)
(4,104)
(865)
(4,688)
(2,036)
(5,117)
(1,750)
(4,278)
(2,298)
(288)
(25,424)
7,900
2,318
22,129
19,582
(2,037)
(1,001)
(12,345)
(6,736)
5,863
(2,112)
1,317
(170)
9,784
12,846
(4,516)
(4,211)
22,616
(8,372)
14,244
(5,608)
27,337 18,738
7,120
(6,301)
(12,899)
(2,386)
21,036
5,839
4,734
972
(75)
897
128,712
(52,152)
76,560
(10,703)
(2,295)
(1,980)
(350)
(31,945)
3,751
1,147
5,268
8,635
8,636
10,333
3,544
2,754
547
44,615
28,037
(8,316)
(6,566)
13,155
(8,591)
4,564
(1,462)
3,102
230
(120)
(85)
25
(9)
16
16
32
8,884
(1,590)
(95)
7,199
(1,286)
5,913
(3,498)
2,415
5,971
(1,454)
(77)
4,440
(1,309)
3,131
(1,399)
1,732
43,122
(11,480)
(6,823)
24,819
(11,195)
13,624
(6,343)
7,281
3,751
4,249
5,300
8,635
11,051
10,333
3,544
4,486
547
51,896
Management report | Consolidated financial statements | Annex
342
(€ million)
December 31, 2020
Consolidated subsidiaries
Future cash inflows
Future production costs
Future development and abandonment
costs
Future net inflow before income tax
Future income tax
Future net cash flows
10 % discount factor
Standardized measure of discounted
future net cash flows
Equity-accounted entities
Future cash inflows
Future production costs
Future development and abandonment
costs
Future net inflow before income tax
Future income tax
Future net cash flows
10 % discount factor
Standardized measure of discounted
future net cash flows
Total consolidated subsidiaries
and equity-accounted entities
(€ million)
December 31, 2019
Consolidated subsidiaries
Future cash inflows
Future production costs
Future development and abandonment
costs
Future net inflow before income tax
Future income tax
Future net cash flows
10 % discount factor
Standardized measure of discounted
future net cash flows
Equity-accounted entities
Future cash inflows
Future production costs
Future development and abandonment
costs
Future net inflow before income tax
Future income tax
Future net cash flows
10 % discount factor
Standardized measure of discounted
future net cash flows
Total consolidated subsidiaries
and equity-accounted entities
Italy
Rest of
Europe
North
Africa
Sub - Saharan
Egypt
Africa Kazakhstan
Rest
of Asia
America
Australia and
Oceania
Total
6,120
(3,587)
1,737
(753)
19,780
26,003
26,901
21,519
22,528
6,638
1,599
132,825
(5,431)
(7,515)
(10,909)
(6,224)
(7,241)
(3,382)
(265)
(45,307)
(1,925)
(756)
(4,378)
(1,638)
(4,257)
(1,743)
(4,511)
(1,786)
(246)
(21,240)
608
(170)
438
(33)
405
228
(61)
167
108
275
15,306
(5,942)
(6,244)
3,120
(576)
2,544
(1,055)
1,489
9,971
16,850
(4,946)
(5,320)
5,025
11,530
(2,413)
(4,101)
11,735
(2,988)
8,747
(3,714)
13,552
10,776
(2,313)
(6,774)
11,239
4,002
(6,040)
(1,681)
1,470
(441)
1,029
(482)
1,088
66,278
(140)
(23,153)
948
43,125
(383)
(18,739)
2,612
7,429
5,033
5,199
2,321
547
565
24,386
251
(98)
(29)
124
(54)
70
(43)
27
1,253
(982)
(46)
225
(3)
222
(110)
112
6,291
(1,641)
(137)
4,513
(1,375)
3,138
(1,460)
1,678
23,101
(8,663)
(6,456)
7,982
(2,008)
5,974
(2,668)
3,306
405
1,764
2,639
7,429
5,145
5,199
2,321
2,225
565
27,692
Italy
Rest of
Europe
North
Africa
Sub - Saharan
Egypt
Africa Kazakhstan
Rest
of Asia
America
Australia and
Oceania
Total
12,363
3,268
38,083
37,020
48,778
36,435
31,220
11,378
1,686
220,231
(5,078)
(1,175)
(6,944)
(10,934)
(15,534)
(8,239)
(8,888)
(5,060)
(293)
(62,145)
(3,551)
(1,338)
(4,985)
(1,591)
(6,265)
(2,362)
(6,047)
(2,629)
(225)
(28,993)
3,734
(796)
2,938
(466)
2,472
755
(249)
506
63
569
25,094
(6,953)
(6,519)
11,622
(7,020)
4,602
(1,544)
3,058
26,154
24,495
(13,632)
(7,829)
12,522
16,666
(5,852)
(5,822)
26,979
(9,926)
17,053
(6,604)
25,834
16,285
3,689
1,168
129,093
(5,485)
(11,379)
(1,034)
(143)
(50,473)
20,349
4,906
2,655
1,025
78,620
(10,832)
(1,990)
(1,187)
(443)
(33,133)
6,670
10,844
10,449
9,517
2,916
1,468
582
45,487
380
(113)
(23)
244
(77)
167
(88)
79
1,787
(863)
(59)
865
(225)
640
(322)
318
7,730
(2,038)
(145)
5,547
(1,783)
3,764
(1,809)
1,955
34,991
(9,967)
(6,746)
18,278
(9,105)
9,173
(3,763)
5,410
2,472
3,627
6,749
10,844
10,767
9,517
2,916
3,423
582
50,897
Eni Annual Report 2021
343
CHANGES IN STANDARDIZED MEASURE OF DISCOUNTED FUTURE NET CASH FLOWS
Changes in standardized measure of discounted future net cash flows for the years ended December 31, 2021, 2020 and 2019, are
as follows:
(€ million)
2021
Consolidated
subsidiaries
Equity-accounted
entities
Total
Standardized measure of discounted future net cash flows at December 31, 2020
24,386
3,306
27,692
Increase (Decrease):
- sales, net of production costs
- net changes in sales and transfer prices, net of production costs
- extensions, discoveries and improved recovery, net of future production and development costs
- changes in estimated future development and abandonment costs
- development costs incurred during the period that reduced future development costs
- revisions of quantity estimates
- accretion of discount
- net change in income taxes
- purchase of reserves in-place
- sale of reserves in-place
- changes in production rates (timing) and other
Net increase (decrease)
Standardized measure of discounted future net cash flows at December 31, 2021
(€ million)
2020
(16,402)
40,864
1,304
(2,737)
2,877
1,963
3,810
(14,022)
27
(28)
2,573
20,229
44,615
(3,381)
(19,783)
9,256
142
(734)
1,385
1,665
514
50,120
1,446
(3,471)
4,262
3,628
4,324
(5,216)
(19,238)
27
(28)
2,917
24,204
51,896
344
3,975
7,281
Consolidated
subsidiaries
Equity-accounted
entities
Total
Standardized measure of discounted future net cash flows at December 31, 2019
45,487
5,410
50,897
Increase (Decrease):
- sales, net of production costs
- net changes in sales and transfer prices, net of production costs
- extensions, discoveries and improved recovery, net of future production and development costs
- changes in estimated future development and abandonment costs
- development costs incurred during the period that reduced future development costs
- revisions of quantity estimates
- accretion of discount
- net change in income taxes
- purchase of reserves in-place
- sale of reserves in-place
- changes in production rates (timing) and other
Net increase (decrease)
Standardized measure of discounted future net cash flows at December 31, 2020
(10,046)
(34,188)
123
792
4,147
36
7,136
13,336
(2,437)
(21,101)
24,386
(1,490)
(5,324)
142
(834)
1,192
(285)
1,065
3,814
(384)
(2,104)
3,306
(11,536)
(39,512)
265
(42)
5,339
(249)
8,201
17,150
(2,821)
(23,205)
27,692
Management report | Consolidated financial statements | Annex
344
(€ million)
2019
Consolidated
subsidiaries
Equity-accounted
entities
Total
Standardized measure of discounted future net cash flows at December 31, 2018
52,411
5,241
57,652
Increase (Decrease):
- sales, net of production costs
- net changes in sales and transfer prices, net of production costs
- extensions, discoveries and improved recovery, net of future production and development costs
- changes in estimated future development and abandonment costs
- development costs incurred during the period that reduced future development costs
- revisions of quantity estimates
- accretion of discount
- net change in income taxes
- purchase of reserves in-place
- sale of reserves in-place(a)
- changes in production rates (timing) and other
Net increase (decrease)
Standardized measure of discounted future net cash flows at December 31, 2019
(18,236)
(14,972)
1,240
(1,157)
5,128
5,573
8,666
6,013
260
(429)
990
(6,924)
45,487
(1,675)
(2,247)
86
(916)
687
1,377
1,050
(761)
2,579
(88)
77
169
5,410
(19,911)
(17,219)
1,326
(2,073)
5,815
6,950
9,716
5,252
2,839
(517)
1,067
(6,755)
50,897
(a) Includes volume as part of a long-term supply agreement to a state-owned national oil company, whereby the buyer has paid the price without lifting the underlying volume in exercise of the
take-or-pay clause because it is very likely that the buyer will not redeem its contractual right to lift (make up) the volume paid.
Eni Annual Report 2021 345
Certification pursuant to rule 154-bis, paragraph 5
of the Legislative Decree No. 58/1998
(Testo Unico della Finanza)
1. The undersigned Claudio Descalzi and Francesco Esposito, in their quality as Chief Executive Officer and Officer responsible
for the preparation of financial reports of Eni, also pursuant to article 154-bis, paragraphs 3 and 4 of Legislative Decree No.
58 of February 24, 1998, certify that internal controls over financial reporting in place for the preparation of the consolidated
financial statements as of December 31, 2021 and during the period covered by the report, were:
adequate to the Company structure, and
effectively applied during the process of preparation of the report.
}
}
2.
Internal controls over financial reporting in place for the preparation of the 2021 consolidated financial statements have been
defined and the evaluation of their effectiveness has been assessed based on principles and methodologies adopted by Eni
in accordance with the Internal Control-Integrated Framework Model issued by the Committee of Sponsoring Organizations
of the Treadway Commission, which represents an internationally-accepted framework for the internal control system.
3. The undersigned officers also certify that:
3.1 2021 consolidated financial statements:
a) have been prepared in accordance with applicable international accounting standards adopted by the European Community
pursuant to Regulation (CE) n. 1606/2002 of the European Parliament and European Council of July 19, 2002;
b) correspond to the accounting books and entries;
c)
fairly and truly represent the financial position, the performance and the cash flows of the issuer and the companies
included in the consolidation as of, and for, the period presented in this report.
3.2 The operating and financial review provides a reliable analysis of business trends and results, including trend analysis of the
issuer and the companies included in the consolidation, as well as a description of the main risks and uncertainties to which
they are exposed.
March 17, 2022
/s/ Claudio Descalzi
Claudio Descalzi
Chief Executive Officer
/s/ Francesco Esposito
Francesco Esposito
Head of Accounting
and Financial Statements
Annex
2021
1 MANAGEMENT REPORT
2 CONSOLIDATED FINANCIAL STATEMENTS
3 ANNEX
List of companies owned by Eni SpA as of December 31, 2021
Investments owned by Eni as of December 31, 2021
Changes in the scope of consolidation for 2021
Independent auditor’s report on the consolidated non-financial statement
Independent auditor’s report on the consolidated financial statements
2
204
346
348
348
387
390
394
348
List of companies owned by Eni SpA
as of December 31, 2021
INVESTMENTS OWNED BY ENI AS OF DECEMBER
31, 2021
In accordance with the provisions of articles 38 and 39 of the
Legislative Decree No. 127/1991 and Consob communication
No. DEM/6064293 of July 28, 2006, the list of subsidiaries, joint
arrangements and associates and significant investments
owned by Eni SpA as of December 31, 2021, is presented
below. Companies are divided by business segment and, within
each segment, they are ordered between Italy and outside
Italy and alphabetically. For each company are indicated:
company name, registered head office, operating office,
share capital, shareholders and percentage of ownership;
for consolidated subsidiaries is indicated the equity ratio
attributable to Eni; for unconsolidated investments owned by
consolidated companies is indicated the valuation method. In
the footnotes are indicated which investments are quoted in
the Italian regulated markets or in other regulated markets of
the European Union and the percentage of the ordinary voting
rights entitled to shareholders if different from the percentage
of ownership. The currency codes indicated are reported in
accordance with the International Standard ISO 4217.
As of December 31, 2021, the breakdown of the companies
owned by Eni is provided in the table below:
Subsidiaries
Joint arrangements
and associates
Other significant investments(a)
Italy
Outside
Italy
Total
Italy
Outside
Italy
Total
Italy
Outside
Italy
Total
Fully consolidated subsidiaries
73
202
275
Consolidated joint operations
3
7
10
Investments owned by consolidated companies(b)
Equity-accounted investments
Investments at cost net of impairment losses
Investments at fair value
Investments owned by unconsolidated companies
Owned by controlled companies
Owned by joint arrangements
5
5
10
33
5
38
6
6
38
10
48
6
6
25
4
29
54
26
79
30
80
109
4
4
8
4
4
8
4
4
22
22
26
26
Total
83
246
329
32
95
127
4
22
26
(a) Relates to investments other than subsidiaries, joint arrangements and associates with an ownership interest greater than 2% for listed companies or 10% for unlisted companies.
(b) Investments in subsidiaries accounted for using the equity method and at cost net of impairment losses relate to non-significant companies.
SUBSIDIARIES AND JOINT ARRANGEMENTS
RESIDENT IN STATES OR TERRITORY WITH
A PRIVILEGED TAX REGIME
The Legislative Decree of 29 November 2018, No. 241,
enforcing the EU Directive rules in the matter of tax avoidance
practices, modified the definition of a State or territory with
a privileged tax regime pursuant to art. 47-bis of the D.P.R.
December 22, 1986, No. 917. Following the aforementioned
amendments and the amendments to art. 167 of the D.P.R.
December 22, 1986, No. 917, the provisions regarding foreign
subsidiaries, CFC, are applied if the non-resident controlled
entities jointly present the following conditions: a) they are
subject to an effective taxation of less than half to which
they would have been subject if they were resident in Italy;
b) more than one third of the proceeds fall into one or more
of the following categories: interests, royalties, dividends,
financial leasing income, income from insurance and banking
activities, income and sale from intra-group services with
low or zero added economic value.
As of December 31, 2021, Eni controls 5 companies that
benefit from a privileged tax regime. These 5 companies
are subject to taxation in Italy because they are included in
Eni's tax return. No subsidiary that benefits from a privileged
tax regime has issued financial instruments. All the financial
statements for 2021 are subject to external audit.
Eni Annual Report 2021
Management report | Consolidated financial statements | Annex
PARENT COMPANY
y
n
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Eni SpA(#)
Rome
Italy
EUR
4,005,358,876
Cassa Depositi e Prestiti SpA
Ministero dell'Economia e delle Finanze
Eni SpA
Other shareholders
SUBSIDIARIES
Exploration & Production
IN ITALY
y
n
a
p
m
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e
m
a
n
Eni Angola SpA
Eni Mediterranea Idrocarburi SpA
Eni Mozambico SpA
Eni Natural Energies SpA
Eni Timor Leste SpA
Eni West Africa SpA
Floaters SpA
Ieoc SpA
Società Petrolifera Italiana SpA
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San Donato
Milanese (MI)
Gela
(CL)
San Donato
Milanese (MI)
San Donato
Milanese (MI)
San Donato
Milanese (MI)
San Donato
Milanese (MI)
San Donato
Milanese (MI)
San Donato
Milanese (MI)
San Donato
Milanese (MI)
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%
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%
Angola
EUR
20,200,000
Eni SpA
100.00
100.00
Italy
EUR
5,200,000
Eni SpA
100.00
100.00
Mozambique
EUR
200,000
Eni SpA
100.00
100.00
Italy
EUR
100,000
Eni SpA
100.00
100.00
East Timor
EUR
4,386,849
Eni SpA
100.00
100.00
Angola
EUR
1,000,000
Eni SpA
100.00
100.00
Italy
Egypt
Italy
EUR
200,120,000
Eni SpA
100.00
100.00
EUR
EUR
7,518,000
Eni SpA
100.00
100.00
8,034,400
Eni SpA
Third parties
99.96
0.04
99.96
349
p
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%
25.96
4.37
1.83
67.84
)
*
(
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F.C.
F.C.
F.C.
F.C.
F.C.
F.C.
F.C.
F.C.
F.C.
(*) F.C. = full consolidation, J.O. = joint operation, Eq. = equity-accounted, Co. = valued at cost, F.V. = valued at fair value
(#) Company with shares quoted in the regulated market of Italy or of other EU countries
350
OUTSIDE ITALY
y
n
a
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Agip Caspian Sea BV
Agip Energy and Natural
Resources (Nigeria) Ltd
Agip Karachaganak BV
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Amsterdam
(Netherlands)
Abuja
(Nigeria)
Amsterdam
(Netherlands)
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e
n
w
O
%
o
i
t
a
r
y
t
i
u
q
E
%
Kazakhstan
EUR
20,005
Eni International BV
100.00
100.00
Nigeria
NGN
5,000,000
Eni International BV
Eni Oil Holdings BV
100.00
95.00
5.00
Kazakhstan
EUR
20,005
Eni International BV
100.00
100.00
Burren Energy (Bermuda) Ltd(1)
Hamilton
(Bermuda)
United
Kingdom
USD
12,002
Burren Energy Plc
100.00
100.00
Burren Energy (Egypt) Ltd
Burren Energy Congo Ltd(2)
Burren Energy India Ltd
Burren Energy Plc
Burren Shakti Ltd(1)
Eni Abu Dhabi BV(3)
Eni AEP Ltd
Eni Albania BV
Eni Algeria Exploration BV
Eni Algeria Ltd Sàrl
Eni Algeria Production BV
Eni Ambalat Ltd
Eni America Ltd
Eni Angola Exploration BV
Eni Angola Production BV
Eni Argentina Exploración
y Explotación SA
Eni Arguni I Ltd
Eni Australia BV
London
(United Kingdom)
Tortola
(British Virgin
Islands)
Egypt
GBP
2
Burren Energy Plc
100.00
Republic
of the Congo
USD
50,000
Burren En.(Berm)Ltd
100.00
100.00
London
(United Kingdom)
United
Kingdom
London
(United Kingdom)
United
Kingdom
Hamilton
(Bermuda)
United
Kingdom
Amsterdam
(Netherlands)
United Arab
Emirates
GBP
2
Burren Energy Plc
100.00
100.00
GBP
28,819,023
Eni UK Holding Plc
Eni UK Ltd
99.99
(..)
100.00
USD
213,138
Burren En. India Ltd
100.00
100.00
EUR
20,000
Eni International BV
100.00
100.00
London
(United Kingdom)
Amsterdam
(Netherlands)
Amsterdam
(Netherlands)
Luxembourg
(Luxembourg)
Amsterdam
(Netherlands)
London
(United Kingdom)
Dover
(USA)
Amsterdam
(Netherlands)
Amsterdam
(Netherlands)
Buenos Aires
(Argentina)
London
(United Kingdom)
Amsterdam
(Netherlands)
Pakistan
GBP
471,000
Eni UK Ltd
100.00
100.00
Albania
EUR
20,000
Eni International BV
100.00
100.00
Algeria
EUR
20,000
Eni International BV
100.00
100.00
Algeria
USD
20,000
Eni Oil Holdings BV
100.00
100.00
Algeria
EUR
20,000
Eni International BV
100.00
100.00
Indonesia
GBP
1
Eni Indonesia Ltd
100.00
100.00
USA
USD
72,000
Eni UHL Ltd
100.00
100.00
Angola
EUR
20,000
Eni International BV
100.00
100.00
Angola
EUR
20,000
Eni International BV
100.00
100.00
Argentina
ARS
31,997,266
Eni International BV
Eni Oil Holdings BV
95.00
5.00
100.00
Indonesia
GBP
1
Eni Indonesia Ltd
100.00
100.00
Australia
EUR
20,000
Eni International BV
100.00
100.00
)
*
(
d
o
h
t
e
m
n
o
i
t
a
t
u
l
a
v
r
o
n
o
i
t
a
d
i
l
o
s
n
o
C
F.C.
F.C.
F.C.
F.C.
Eq.
F.C.
F.C.
F.C.
F.C.
F.C.
F.C.
F.C.
F.C.
F.C.
F.C.
F.C.
F.C.
F.C.
F.C.
F.C.
F.C.
F.C.
(*) F.C. = full consolidation, J.O. = joint operation, Eq. = equity-accounted, Co. = valued at cost, F.V. = valued at fair value.
(1) Company that benefits from a privileged tax regime pursuant to art. 167, paragraph 4 of the D.P.R. of December 22, 1986, n. 917: the income attributable to the
Group is subject to taxation in Italy.
(2) Company that does not benefit from a privileged tax regime pursuant to art. 167, paragraph 4 of the D.P.R. of December 22, 1986, n. 917: the company operates
with permanent establishment in Congo and the tax rate is not lower than 50% of that current in Italy.
(3) Company that does not benefit from a privileged tax regime pursuant to art. 167, paragraph 4 of the D.P.R. of December 22, 1986, n. 917: the company operates
with permanent establishment in the United Arab Emirates and the nominal tax rate is not lower than 50% of that current in Italy.
Eni Annual Report 2021
Management report | Consolidated financial statements | Annex
y
n
a
p
m
o
C
e
m
a
n
Eni Australia Ltd
Eni Bahrain BV
Eni BB Petroleum Inc
Eni BTC Ltd
Eni Bukat Ltd
Eni Canada Holding Ltd
Eni CBM Ltd
Eni China BV
Eni Congo SA
Eni Côte d'Ivoire Ltd
Eni Cyprus Ltd
Eni Denmark BV
Eni do Brasil Investimentos
em Exploração e Produção de
Petróleo Ltda
Eni East Ganal Ltd
Eni East Sepinggan Ltd
Eni Elgin/Franklin Ltd
Eni Energy Russia BV
Eni Exploration & Production
Holding BV
Eni Gabon SA
Eni Ganal Ltd
Eni Gas & Power LNG Australia BV
e
c
ffi
o
d
e
r
e
t
s
i
g
e
R
London
(United
Kingdom)
Amsterdam
(Netherlands)
Dover
(USA)
n
o
i
t
a
r
e
p
o
f
o
y
r
t
n
u
o
C
y
c
n
e
r
r
u
C
l
a
t
i
p
a
C
e
r
a
h
S
s
r
e
d
l
o
h
e
r
a
h
S
p
i
h
s
r
e
n
w
O
%
o
i
t
a
r
y
t
i
u
q
E
%
Australia
GBP
20,000 ,000
Eni International BV
100.00
100.00
Bahrain
EUR
20,000
Eni International BV
100.00
100.00
USA
USD
1,000
Eni Petroleum Co Inc
100.00
100.00
London
(United Kingdom)
United
Kingdom
GBP
London
(United Kingdom)
Indonesia
GBP
1
1
Eni International BV
100.00
Eni Indonesia Ltd
100.00
100.00
Calgary
(Canada)
London
(United Kingdom)
Amsterdam
(Netherlands)
Point-Noire
(Republic of the
Congo)
London
(United Kingdom)
Nicosia
(Cyprus)
Amsterdam
(Netherlands)
Rio de Janeiro
(Brazil)
London
(United Kingdom)
London
(United Kingdom)
Canada
USD 3,938,200,001
Eni International BV
100.00
100.00
Indonesia
USD
2,210,728
Eni Lasmo Plc
100.00
China
EUR
20,000
Eni International BV
100.00
100.00
Republic
of the Congo
USD
17,000,000
Eni E&P Holding BV
Eni Int. NA NV Sàrl
Eni International BV
100.00
99.99
(..)
(..)
Ivory Coast
GBP
1
Eni Lasmo Plc
100.00
100.00
Cyprus
EUR
2,008
Eni International BV
100.00
100.00
Greenland
EUR
20,000
Eni International BV
100.00
Brazil
BRL
1,593,415,000
Eni International BV
Eni Oil Holdings BV
99.99
(..)
Indonesia
GBP
Indonesia
GBP
1
1
Eni Indonesia Ltd
100.00
100.00
Eni Indonesia Ltd
100.00
100.00
London
(United Kingdom)
United
Kingdom
GBP
100
Eni UK Ltd
100.00
100.00
Amsterdam
(Netherlands)
Amsterdam
(Netherlands)
Libreville
(Gabon)
London
(United Kingdom)
Amsterdam
(Netherlands)
Netherlands
EUR
20,000
Eni International BV
100.00
100.00
Netherlands
EUR
29,832,777.12
Eni International BV
100.00
100.00
Gabon
XAF
4,000,000,000
Eni International BV
100.00
100.00
Indonesia
GBP
2
Eni Indonesia Ltd
100.00
100.00
Australia
EUR
1,013,439
Eni International BV
100.00
100.00
Eni Ghana Exploration and
Production Ltd
Accra
(Ghana)
Ghana
GHS
21,412,500
Eni International BV
100.00
100.00
351
)
*
(
d
o
h
t
e
m
n
o
i
t
a
t
u
l
a
v
r
o
n
o
i
t
a
d
i
l
o
s
n
o
C
F.C.
F.C.
F.C.
Eq.
F.C.
F.C.
Eq.
F.C.
F.C.
F.C.
F.C.
Eq.
Eq.
F.C.
F.C.
F.C.
F.C.
F.C.
F.C.
F.C.
F.C.
F.C.
(*) F.C. = full consolidation, J.O. = joint operation, Eq. = equity-accounted, Co. = valued at cost, F.V. = valued at fair value.
352
y
n
a
p
m
o
C
e
m
a
n
Eni Hewett Ltd
e
c
ffi
o
d
e
r
e
t
s
i
g
e
R
n
o
i
t
a
r
e
p
o
f
o
y
r
t
n
u
o
C
y
c
n
e
r
r
u
C
l
a
t
i
p
a
C
e
r
a
h
S
s
r
e
d
l
o
h
e
r
a
h
S
p
i
h
s
r
e
n
w
O
%
o
i
t
a
r
y
t
i
u
q
E
%
Aberdeen
(United Kingdom)
United
Kingdom
GBP
3,036,000
Eni UK Ltd
100.00
100.00
Eni Hydrocarbons Venezuela Ltd
London
(United Kingdom)
Venezuela
GBP
8,050,500
Eni Lasmo Plc
100.00
Eni India Ltd
Eni Indonesia Ltd
Eni Indonesia Ots 1 Ltd(4)
Eni International NA NV Sàrl
Eni Investments Plc
Eni Iran BV
Eni Iraq BV
Eni Ireland BV
Eni Isatay BV
Eni JPDA 03-13 Ltd
Eni JPDA 06-105 Pty Ltd
Eni JPDA 11-106 BV
Eni Kenya BV
Eni Krueng Mane Ltd
Eni Lasmo Plc
Eni Lebanon BV
Eni Liverpool Bay Operating Co Ltd
Eni LNS Ltd
Eni Marketing Inc
Eni Maroc BV
Eni México S. de RL de CV
London
(United Kingdom)
India
GBP
44,000,000
Eni Lasmo Plc
100.00
London
(United Kingdom)
Grand Cayman
(Cayman Islands)
Indonesia
GBP
100
Eni ULX Ltd
100.00
100.00
Indonesia
USD
1.01
Eni Indonesia Ltd
100.00
100.00
Luxembourg
(Luxembourg)
United
Kingdom
London
(United Kingdom)
United
Kingdom
Iran
Iraq
USD
25,000
Eni International BV
100.00
100.00
GBP
750,050,000
Eni SpA
Eni UK Ltd
99.99
(..)
100.00
EUR
20,000
Eni International BV
100.00
EUR
20,000
Eni International BV
100.00
100.00
Ireland
EUR
20,000
Eni International BV
100.00
100.00
Kazakhstan
EUR
20,000
Eni International BV
100.00
100.00
Australia
GBP
250,000
Eni International BV
100.00
100.00
Australia
AUD
80,830,576
Eni International BV
100.00
100.00
Australia
EUR
50,000
Eni International BV
100.00
100.00
Kenya
EUR
20,000
Eni International BV
100.00
100.00
Indonesia
GBP
2
Eni Indonesia Ltd
100.00
100.00
Amsterdam
(Netherlands)
Amsterdam
(Netherlands)
Amsterdam
(Netherlands)
Amsterdam
(Netherlands)
London
(United Kingdom)
Perth
(Australia)
Amsterdam
(Netherlands)
Amsterdam
(Netherlands)
London
(United Kingdom)
London
(United Kingdom)
United
Kingdom
GBP 337,638,724.25
Eni Investments Plc
Eni UK Ltd
99.99
(..)
100.00
Amsterdam
(Netherlands)
Lebanon
EUR
20,000
Eni International BV
100.00
100.00
London
(United Kingdom)
United
Kingdom
London
(United Kingdom)
United
Kingdom
GBP
GBP
1
1
Eni UK Ltd
100.00
Eni UK Ltd
100.00
100.00
Dover
(USA)
Amsterdam
(Netherlands)
Mexico City
(Mexico)
USA
USD
1,000
Eni Petroleum Co Inc
100.00
100.00
Morocco
EUR
20,000
Eni International BV
100.00
100.00
Mexico
MXN
3,000
Eni International BV
Eni Oil Holdings BV
99.90
0.10
100.00
Eni Middle East Ltd
London
(United Kingdom)
United
Kingdom
GBP
1
Eni ULT Ltd
100.00
100.00
)
*
(
d
o
h
t
e
m
n
o
i
t
a
t
u
l
a
v
r
o
n
o
i
t
a
d
i
l
o
s
n
o
C
F.C.
Eq.
Eq.
F.C.
F.C.
F.C.
F.C.
Eq.
F.C.
F.C.
F.C.
F.C.
F.C.
F.C.
F.C.
F.C.
F.C.
F.C.
Eq.
F.C.
F.C.
F.C.
F.C.
F.C.
(*) F.C. = full consolidation, J.O. = joint operation, Eq. = equity-accounted, Co. = valued at cost, F.V. = valued at fair value.
(4) Company that does not benefit from a privileged tax regime pursuant to art. 167, paragraph 4 of the D.P.R. of December 22, 1986, n. 917: the company is fiscally
resident in the United Kingdom and operates with a permanent establishment in Indonesia with a tax rate not lower than 50% of that current in Italy.
Eni Annual Report 2021
Management report | Consolidated financial statements | Annex
y
n
a
p
m
o
C
e
m
a
n
Eni MOG Ltd
(in liquidation)
Eni Montenegro BV
Eni Mozambique Engineering Ltd
Eni Mozambique LNG Holding BV
Eni Muara Bakau BV
Eni Myanmar BV
Eni New Energy Egypt SAE
Eni North Africa BV
Eni North Ganal Ltd
Eni Oil & Gas Inc
Eni Oil Algeria Ltd
Eni Oil Holdings BV
Eni Oman BV
Eni Pakistan Ltd
Eni Pakistan (M) Ltd Sàrl
Eni Petroleum Co Inc
Eni Petroleum US Llc
Eni Qatar BV
Eni RAK BV(5)
Eni Rapak Ltd
Eni RD Congo SA
Eni Rovuma Basin BV
Eni Sharjah BV(5)
e
c
ffi
o
d
e
r
e
t
s
i
g
e
R
n
o
i
t
a
r
e
p
o
f
o
y
r
t
n
u
o
C
London
(United Kingdom)
United
Kingdom
Amsterdam
(Netherlands)
Republic of
Montenegro
London
(United Kingdom)
United
Kingdom
y
c
n
e
r
r
u
C
GBP
l
a
t
i
p
a
C
e
r
a
h
S
s
r
e
d
l
o
h
e
r
a
h
S
p
i
h
s
r
e
n
w
O
%
o
i
t
a
r
y
t
i
u
q
E
%
0(a)
Eni Lasmo Plc
Eni LNS Ltd
99.99
(..)
100.00
EUR
20,000
Eni International BV
100.00
100.00
GBP
1
Eni Lasmo Plc
100.00
100.00
Amsterdam
(Netherlands)
Amsterdam
(Netherlands)
Amsterdam
(Netherlands)
Cairo
(Egypt)
Amsterdam
(Netherlands)
London
(United Kingdom)
Dover
(USA)
London
(United Kingdom)
Amsterdam
(Netherlands)
Amsterdam
(Netherlands)
London
(United Kingdom)
Luxembourg
(Luxembourg)
Dover
(USA)
Dover
(USA)
Amsterdam
(Netherlands)
Netherlands
EUR
20,000
Eni International BV
100.00
100.00
Indonesia
EUR
20,000
Eni International BV
100.00
100.00
Myanmar
EUR
20,000
Eni International BV
100.00
100.00
Egypt
EGP
250,000
Eni International BV
Ieoc Exploration BV
Ieoc Production BV
99.98
0.01
0.01
Libya
EUR
20,000
Eni International BV
100.00
100.00
Indonesia
GBP
1
Eni Indonesia Ltd
100.00
100.00
USA
USD
100,800
Eni America Ltd
100.00
100.00
Algeria
GBP
1,000
Eni Lasmo Plc
100.00
100.00
Netherlands
EUR
450,000
Eni ULX Ltd
100.00
100.00
Oman
EUR
20,000
Eni International BV
100.00
100.00
Pakistan
GBP
90,087
Eni ULX Ltd
100.00
100.00
Pakistan
USD
20,000
Eni Oil Holdings BV
100.00
100.00
USA
USA
USD
156,600,000
Eni SpA
Eni International BV
63.86
36.14
100.00
USD
1,000
Eni BB Petroleum Inc
100.00
100.00
Netherlands
EUR
20,000
Eni International BV
100.00
Amsterdam
(Netherlands)
United Arab
Emirates
EUR
20,000
Eni International BV
100.00
100.00
London
(United Kingdom)
Kinshasa
(Democratic
Republic
of the Congo )
Amsterdam
(Netherlands)
Indonesia
GBP
2
Eni Indonesia Ltd
100.00
100.00
Democratic
Republic
of the Congo
CDF
750,000,000
Eni International BV
Eni Oil Holdings BV
99.99
(..)
Mozambique EUR
20,000
Eni Mozambique LNG
H. BV
100.00
100.00
Amsterdam
(Netherlands)
United Arab
Emirates
EUR
20,000
Eni International BV
100.00
100.00
353
)
*
(
d
o
h
t
e
m
n
o
i
t
a
t
u
l
a
v
r
o
n
o
i
t
a
d
i
l
o
s
n
o
C
F.C.
F.C.
F.C.
F.C.
F.C.
F.C.
Eq.
F.C.
F.C.
F.C.
F.C.
F.C.
F.C.
F.C.
F.C.
F.C.
F.C.
Eq.
F.C.
F.C.
Eq.
F.C.
F.C.
(*) F.C. = full consolidation, J.O. = joint operation, Eq. = equity-accounted, Co. = valued at cost, F.V. = valued at fair value.
(a) Shares without nominal value.
(5) Company that does not benefit from a privileged tax regime pursuant to art. 167, paragraph 4 of the D.P.R.of December 22, 1986, n.917: the company operates
with a permanent establishment in the United Arab Emirates and carries out an effective economic activity.
354
y
n
a
p
m
o
C
e
m
a
n
e
c
ffi
o
d
e
r
e
t
s
i
g
e
R
n
o
i
t
a
r
e
p
o
f
o
y
r
t
n
u
o
C
y
c
n
e
r
r
u
C
l
a
t
i
p
a
C
e
r
a
h
S
s
r
e
d
l
o
h
e
r
a
h
S
p
i
h
s
r
e
n
w
O
%
o
i
t
a
r
y
t
i
u
q
E
%
Eni South Africa BV
Amsterdam
(Netherlands)
Republic of
South Africa
EUR
20,000
Eni International BV
100.00
100.00
Eni South China Sea Ltd Sàrl
Luxembourg
(Luxembourg)
China
USD
20,000
Eni International BV
100.00
Eni TNS Ltd
Eni Tunisia BV
Eni Turkmenistan Ltd(6)
Eni UHL Ltd
Eni UK Holding Plc
Eni UK Ltd
Eni UKCS Ltd
Aberdeen
(United Kingdom)
United
Kingdom
GBP
1,000
Eni UK Ltd
100.00
100.00
Amsterdam
(Netherlands)
Hamilton
(Bermuda)
Tunisia
EUR
20,000
Eni International BV
100.00
100.00
Turkmenistan
USD
20,000
Burren En.(Berm) Ltd
100.00
100.00
London
(United Kingdom)
United
Kingdom
London
(United Kingdom)
United
Kingdom
London
(United Kingdom)
United
Kingdom
London
(United Kingdom)
United
Kingdom
GBP
1
Eni ULT Ltd
100.00
100.00
GBP
424,050,000
Eni Lasmo Plc
Eni UK Ltd
99.99
(..)
100.00
GBP
50,000,000
Eni International BV
100.00
100.00
GBP
100
Eni UK Ltd
100.00
100.00
Eni Ukraine Holdings BV
Eni Ukraine Llc
(in liquidation)
Amsterdam
(Netherlands)
Kiev
(Ukraine)
Eni Ukraine Shallow Waters BV
(in liquidation)
Amsterdam
(Netherlands)
Netherlands
EUR
20,000
Eni International BV
100.00
Ukraine
UAH
98,419,627.51
Eni Ukraine Hold.BV
Eni International BV
99.99
0.01
Ukraine
EUR
20,000
Eni Ukraine Hold.BV
100.00
Eni ULT Ltd
Eni ULX Ltd
London
(United Kingdom)
United
Kingdom
London
(United Kingdom)
United
Kingdom
GBP
93,215,492.25
Eni Lasmo Plc
100.00
100.00
GBP
200,010,000
Eni ULT Ltd
100.00
100.00
Eni US Operating Co Inc
Eni USA Gas Marketing Llc
Eni USA Inc
Eni Venezuela BV
Eni Venezuela E&P Holding SA
Dover
(USA)
Dover
(USA)
Dover
(USA)
Amsterdam
(Netherlands)
Bruxelles
(Belgium)
USA
USA
USA
USD
1,000
Eni Petroleum Co Inc
100.00
100.00
USD
10,000
Eni Marketing Inc
100.00
100.00
USD
1,000
Eni Oil & Gas Inc
100.00
100.00
Venezuela
EUR
20,000
Eni Venezuela E&P H.
100.00
100.00
Eni Ventures Plc
(in liquidation)
Eni Vietnam BV
Eni West Ganal Ltd
Eni West Timor Ltd
Eni Yemen Ltd
Belgium
USD
254,443,200
Eni International BV
Eni Oil Holdings BV
London
(United Kingdom)
United
Kingdom
GBP
0(a)
Eni International BV
Eni Oil Holdings BV
100.00
99.99
(..)
99.99
(..)
Amsterdam
(Netherlands)
London
(United Kingdom)
London
(United Kingdom)
Vietnam
EUR
20,000
Eni International BV
100.00
100.00
Indonesia
GBP
Indonesia
GBP
1
1
Eni Indonesia Ltd
100.00
100.00
Eni Indonesia Ltd
100.00
100.00
London
(United Kingdom)
United
Kingdom
GBP
1,000
Burren Energy Plc
100.00
)
*
(
d
o
h
t
e
m
n
o
i
t
a
t
u
l
a
v
r
o
n
o
i
t
a
d
i
l
o
s
n
o
C
F.C.
Eq.
F.C.
F.C.
F.C.
F.C.
F.C.
F.C.
F.C.
Eq.
F.C.
F.C.
F.C.
F.C.
F.C.
F.C.
F.C.
Co.
F.C.
F.C.
F.C.
Eq.
(*) F.C. = full consolidation, J.O. = joint operation, Eq. = equity-accounted, Co. = valued at cost, F.V. = valued at fair value.
(6) Company that does not benefit from a privileged tax regime pursuant to art. 167, paragraph 4 of the D.P.R. of December 22, 1986, n. 917: the company operates
with permanent establishment in Turkmenistan and the nominal tax rate is not lower than 50% of that current in Italy.
(a) Shares without nominal value.
Eni Annual Report 2021
Management report | Consolidated financial statements | Annex
n
o
i
t
a
r
e
p
o
f
o
y
r
t
n
u
o
C
y
c
n
e
r
r
u
C
l
a
t
i
p
a
C
e
r
a
h
S
s
r
e
d
l
o
h
e
r
a
h
S
p
i
h
s
r
e
n
w
O
%
o
i
t
a
r
y
t
i
u
q
E
%
Algeria
DZD
1,000,000
Eni Algeria Ltd Sàrl
100.00
Algeria
USD
1
Eni Canada Hold. Ltd
FCP Partner Co ULC
99.99
0.01
100.00
Canada
CAD
10
Eni Canada Hold. Ltd
100.00
100.00
Egypt
EUR
20,000
Eni International BV
100.00
Egypt
EUR
20,000
Eni International BV
100.00
100.00
Indonesia
USD
12,000
Eni Lasmo Plc
100.00
100.00
y
n
a
p
m
o
C
e
m
a
n
Eurl Eni Algérie
First Calgary Petroleums LP
e
c
ffi
o
d
e
r
e
t
s
i
g
e
R
Algiers
(Algeria)
Wilmington
(USA)
First Calgary Petroleums Partner
Co ULC
Calgary
(Canada)
Amsterdam
(Netherlands)
Amsterdam
(Netherlands)
Hamilton
(Bermuda)
Ieoc Exploration BV
Ieoc Production BV
Lasmo Sanga Sanga Ltd(7)
Liverpool Bay CCS Ltd
Liverpool Bay Ltd
Llc "Eni Energhia"
London
(United Kingdom)
United
Kingdom
London
(United Kingdom)
United
Kingdom
GBP
10,000
Eni Lasmo Plc
100.00
USD
1
Eni ULX Ltd
100.00
Moscow
(Russia)
Russia
RUB
2,000,000
Mizamtec Operating Company
S. de RL de CV
Mexico City
(Mexico)
Mexico
MXN
3,000
Nigerian Agip CPFA Ltd
Nigerian Agip Exploration Ltd
Nigerian Agip Oil Co Ltd
Zetah Congo Ltd(8)
Zetah Kouilou Ltd(8)
Lagos
(Nigeria)
Abuja
(Nigeria)
Abuja
(Nigeria)
Nassau
(Bahamas)
Nassau
(Bahamas)
Nigeria
NGN
1,262,500
Nigeria
NGN
5,000,000
Nigeria
NGN
1,800,000
Republic
of the Congo
USD
Republic
of the Congo
USD
300
2,000
Eni Energy Russia BV
Eni Oil Holdings BV
Eni US Op. Co Inc
Eni Petroleum Co Inc
NAOC Ltd
Agip En Nat Res.Ltd
Nigerian Agip E. Ltd
Eni International BV
Eni Oil Holdings BV
Eni International BV
Eni Oil Holdings BV
Eni Congo SA
Burren En.Congo Ltd
Eni Congo SA
Burren En.Congo Ltd
Third parties
100.00
100.00
100.00
99.90
0.10
99.90
0.10
98.02
0.99
0.99
99.99
0.01
99.89
0.11
66.67
33.33
54.50
37.00
8.50
355
)
*
(
d
o
h
t
e
m
n
o
i
t
a
t
u
l
a
v
r
o
n
o
i
t
a
d
i
l
o
s
n
o
C
Eq.
F.C.
F.C.
Eq.
F.C.
F.C.
Eq.
Eq.
Eq.
F.C.
Co.
F.C.
F.C.
Co.
Co.
(*) F.C. = full consolidation, J.O. = joint operation, Eq. = equity-accounted, Co. = valued at cost, F.V. = valued at fair value.
(7) Company that does not benefit from a privileged tax regime pursuant to art. 167, paragraph 4 of the D.P.R. of December 22, 1986, n. 917: the company is fiscally
resident in the United Kingdom and operates with permanent establishment in Indonesia and the nominal tax rate is not lower than 50% of that current in Italy.
(8) Company that benefits from a privileged tax regime pursuant to art. 167, paragraph 4 of the D.P.R. of December 22, 1986, n. 917: the income attributable to the Group
is subject to taxation in Italy.
356
GLOBAL GAS & LNG PORTFOLIO
IN ITALY
y
n
a
p
m
o
C
e
m
a
n
Eni Corridor Srl
Eni Gas Transport Services Srl
e
c
ffi
o
d
e
r
e
t
s
i
g
e
R
San Donato
Milanese (MI)
San Donato
Milanese (MI)
Eni Global Energy Markets SpA
Rome
LNG Shipping SpA
Trans Tunisian Pipeline Co SpA
San Donato
Milanese (MI)
San Donato
Milanese (MI)
n
o
i
t
a
r
e
p
o
f
o
y
r
t
n
u
o
C
Italy
Italy
Italy
Italy
y
c
n
e
r
r
u
C
l
a
t
i
p
a
C
e
r
a
h
S
s
r
e
d
l
o
h
e
r
a
h
S
p
i
h
s
r
e
n
w
O
%
o
i
t
a
r
y
t
i
u
q
E
%
EUR
50,000
Eni SpA
EUR
120,000
Eni SpA
100.00
100.00
EUR
41,233,720
Eni SpA
100.00
100.00
EUR
240,900,000
Eni SpA
100.00
100.00
Tunisia
EUR
1,098,000
Eni SpA
100.00
100.00
OUTSIDE ITALY
y
n
a
p
m
o
C
e
m
a
n
e
c
ffi
o
d
e
r
e
t
s
i
g
e
R
n
o
i
t
a
r
e
p
o
f
o
y
r
t
n
u
o
C
y
c
n
e
r
r
u
C
l
a
t
i
p
a
C
e
r
a
h
S
s
r
e
d
l
o
h
e
r
a
h
S
p
i
h
s
r
e
n
w
O
%
o
i
t
a
r
y
t
i
u
q
E
%
Eni España Comercializadora
De Gas SAU
Madrid
(Spain)
Eni G&P Trading BV
Eni Gas Liquefaction BV
Société de Service du Gazoduc
Transtunisien SA - Sergaz SA
Société pour la Construction
du Gazoduc Transtunisien
SA - Scogat SA
Amsterdam
(Netherlands)
Amsterdam
(Netherlands)
Tunis
(Tunisia)
Tunis
(Tunisia)
Spain
EUR
2,340,240
Eni SpA
100.00
100.00
Turkey
EUR
70,000
Eni International BV
100.00
100.00
Netherlands
EUR
20,000
Eni International BV
100.00
100.00
Tunisia
TND
99,000
Tunisia
TND
200,000
Eni International BV
Third parties
Eni International BV
Eni SpA
LNG Shipping SpA
Trans Tunis. P. Co SpA
66.67
100.00
66.67
33.33
99.85
0.05
0.05
0.05
)
*
(
d
o
h
t
e
m
n
o
i
t
a
t
u
l
a
v
r
o
n
o
i
t
a
d
i
l
o
s
n
o
C
Eq.
Co.
F.C.
F.C.
F.C.
)
*
(
d
o
h
t
e
m
n
o
i
t
a
t
u
l
a
v
r
o
n
o
i
t
a
d
i
l
o
s
n
o
C
F.C.
F.C.
F.C.
F.C.
F.C.
(*) F.C. = full consolidation, J.O. = joint operation, Eq. = equity-accounted, Co. = valued at cost, F.V. = valued at fair value.
Eni Annual Report 2021
Management report | Consolidated financial statements | Annex
REFINING & MARKETING AND CHEMICAL
Refining & Marketing
IN ITALY
y
n
a
p
m
o
C
e
m
a
n
Ecofuel SpA
Eni Fuel SpA
Eni Trade & Biofuels SpA
Eni4Cities SpA
EniBioCh4in Alexandria Srl
Società Agricola
EniBioCh4in Annia Srl
Società Agricola
EniBioCh4in Appia Srl
Società Agricola
EniBioCh4in Aprilia Srl
EniBioCh4in Briona Srl
Società Agricola
e
c
ffi
o
d
e
r
e
t
s
i
g
e
R
San Donato
Milanese (MI)
Rome
Rome
San Donato
Milanese (MI)
San Donato
Milanese (MI)
San Donato
Milanese (MI)
San Donato
Milanese (MI)
San Donato
Milanese (MI)
San Donato
Milanese (MI)
EniBioCh4in Calandre Energia Srl
Società Agricola
San Donato
Milanese (MI)
EniBioCh4in Gardilliana
Società Agricola Srl
EniBioCh4in Grupellum
Società Agricola Srl
EniBioCh4in Jonica Srl
EniBioCh4in Maddalena
Società Agricola Srl
EniBioCh4in Medea Srl
Società Agricola
EniBioCh4in Momo
Società Agricola Srl
EniBioCh4in Mortara
Società Agricola Srl
EniBioCh4in Pannellia
BioGas Srl Società Agricola
EniBioCh4in Plovera
Società Agricola Srl
EniBioCh4in Quadruvium Srl
Società Agricola
EniBioCh4in Rhodigium
Società Agricola Srl
EniBioCh4in San Benedetto
Po Srl Società Agricola
San Donato
Milanese (MI)
San Donato
Milanese (MI)
San Donato
Milanese (MI)
San Donato
Milanese (MI)
San Donato
Milanese (MI)
San Donato
Milanese (MI)
San Donato
Milanese (MI)
San Donato
Milanese (MI)
San Donato
Milanese (MI)
San Donato
Milanese (MI)
San Donato
Milanese (MI)
San Donato
Milanese (MI)
n
o
i
t
a
r
e
p
o
f
o
y
r
t
n
u
o
C
Italy
Italy
Italy
Italy
Italy
Italy
Italy
Italy
Italy
Italy
Italy
Italy
Italy
Italy
Italy
Italy
Italy
Italy
Italy
Italy
Italy
Italy
y
c
n
e
r
r
u
C
l
a
t
i
p
a
C
e
r
a
h
S
s
r
e
d
l
o
h
e
r
a
h
S
p
i
h
s
r
e
n
w
O
%
o
i
t
a
r
y
t
i
u
q
E
%
EUR
52,000,000
Eni SpA
100.00
100.00
EUR
59,944,310
Eni SpA
100.00
100.00
EUR
22,568,759
Eni SpA
100.00
100.00
EUR
50,000
Ecofuel SpA
100.00
EUR
50,000
EniBioCh4in SpA
Third parties
70.00
30.00
70.00
EUR
50,000
EniBioCh4in SpA
100.00
100.00
EUR
10,000
EniBioCh4in SpA
100.00
100.00
EUR
10,000
EniBioCh4in SpA
100.00
100.00
EUR
20,000
EniBioCh4in SpA
100.00
100.00
EUR
10,000
EniBioCh4in SpA
100.00
100.00
EUR
50,000
EniBioCh4in SpA
100.00
100.00
EUR
100,000
EniBioCh4in SpA
Third parties
98.00
2.00
98.00
EUR
20,000
EniBioCh4in SpA
100.00
100.00
EUR
50,000
EniBioCh4in SpA
100.00
100.00
EUR
50,000
EniBioCh4in SpA
100.00
100.00
EUR
20,000
EUR
20,000
EniBioCh4in SpA
Third parties
EniBioCh4in SpA
Third parties
95.00
5.00
95.00
5.00
95.00
95.00
EUR
50,000
EniBioCh4in SpA
100.00
100.00
EUR
20,000
EniBioCh4in SpA
Third parties
98.00
2.00
98.00
EUR
50,000
EniBioCh4in SpA
100.00
100.00
EUR
20,000
EniBioCh4in SpA
100.00
100.00
EUR
10,000
EniBioCh4in SpA
100.00
100.00
(*) F.C. = full consolidation, J.O. = joint operation, Eq. = equity-accounted, Co. = valued at cost, F.V. = valued at fair value.
357
)
*
(
d
o
h
t
e
m
n
o
i
t
a
t
u
l
a
v
r
o
n
o
i
t
a
d
i
l
o
s
n
o
C
F.C.
F.C.
F.C.
Eq.
F.C.
F.C.
F.C.
F.C.
F.C.
F.C.
F.C.
F.C.
F.C.
F.C.
F.C.
F.C.
F.C.
F.C.
F.C.
F.C.
F.C.
F.C.
358
y
n
a
p
m
o
C
e
m
a
n
e
c
ffi
o
d
e
r
e
t
s
i
g
e
R
EniBioCh4in Service BioGas Srl
EniBioCh4in Società Agricola
Il Bue Srl
EniBioCh4in SpA
EniBioCh4in Vigevano Srl
Società Agricola
EniBioCh4in Villacidro Agricole
Società Agricola a responsabilità
limitata
San Donato
Milanese (MI)
San Donato
Milanese (MI)
San Donato
Milanese (MI)
San Donato
Milanese (MI)
San Donato
Milanese (MI)
Petroven Srl
Genova
Po' Energia Srl Società Agricola
Bolzano
Raffineria di Gela SpA
Gela (CL)
SeaPad SpA
Servizi Fondo Bombole
Metano SpA
Genova
Rome
OUTSIDE ITALY
y
n
a
p
m
o
C
e
m
a
n
Eni Abu Dhabi Refining
& Trading BV
Eni Abu Dhabi Refining
& Trading Services BV
Eni Austria GmbH
Eni Benelux BV
Eni Deutschland GmbH
Eni Ecuador SA
Eni Energy (Shanghai) Co Ltd
(former Eni Lubricants Trading
(Shanghai) Co Ltd)
Eni France Sàrl
e
c
ffi
o
d
e
r
e
t
s
i
g
e
R
Amsterdam
(Netherlands)
Wien
(Austria)
Rotterdam
(Netherlands)
Munich
(Germany)
Quito
(Ecuador)
Shanghai
(China)
Lyon
(France)
n
o
i
t
a
r
e
p
o
f
o
y
r
t
n
u
o
C
Italy
Italy
Italy
Italy
Italy
Italy
Italy
Italy
Italy
Italy
n
o
i
t
a
r
e
p
o
f
o
y
r
t
n
u
o
C
y
c
n
e
r
r
u
C
l
a
t
i
p
a
C
e
r
a
h
S
s
r
e
d
l
o
h
e
r
a
h
S
p
i
h
s
r
e
n
w
O
%
o
i
t
a
r
y
t
i
u
q
E
%
EUR
50,000
EniBioCh4in SpA
100.00
100.00
EUR
10,000
EniBioCh4in SpA
100.00
100.00
EUR
2,500,000
Ecofuel SpA
100.00
100.00
EUR
100,000
EniBioCh4in SpA
100.00
100.00
EUR
10,000
EniBioCh4in SpA
100.00
100.00
EUR
918,520
Ecofuel SpA
100.00
100.00
EUR
10,000
EniBioCh4in SpA
100.00
100.00
EUR
15,000,000
Eni SpA
100.00
100.00
EUR
12,400,000
Ecofuel SpA
Third parties
EUR
13,580,000.20
Eni SpA
80.00
20.00
100.00
y
c
n
e
r
r
u
C
l
a
t
i
p
a
C
e
r
a
h
S
s
r
e
d
l
o
h
e
r
a
h
S
p
i
h
s
r
e
n
w
O
%
o
i
t
a
r
y
t
i
u
q
E
%
Netherlands
EUR
20,000
Eni International BV
100.00
100.00
Amsterdam
(Netherlands)
United Arab
Emirates
EUR
20,000
Eni Abu Dhabi R&T BV
100.00
Austria
EUR
78,500,000
Eni International BV
Eni Deutsch. GmbH
75.00
25.00
100.00
Netherlands
EUR
1,934,040
Eni International BV
100.00
100.00
Germany
EUR
90,000,000
Ecuador
USD
103,142.08
Eni International BV
Eni Oil Holdings BV
Eni International BV
Esain SA
89.00
11.00
99.93
0.07
100.00
100.00
China
EUR
5,000,000
Eni International BV
100.00
100.00
France
EUR
56,800,000
Eni International BV
100.00
100.00
F.C.
)
*
(
d
o
h
t
e
m
n
o
i
t
a
t
u
l
a
v
r
o
n
o
i
t
a
d
i
l
o
s
n
o
C
F.C.
F.C.
F.C.
F.C.
F.C.
F.C.
F.C.
F.C.
Eq.
Co.
)
*
(
d
o
h
t
e
m
n
o
i
t
a
t
u
l
a
v
r
o
n
o
i
t
a
d
i
l
o
s
n
o
C
F.C.
Eq.
F.C.
F.C.
F.C.
F.C.
F.C.
(*) F.C. = full consolidation, J.O. = joint operation, Eq. = equity-accounted, Co. = valued at cost, F.V. = valued at fair value.
Eni Annual Report 2021
Management report | Consolidated financial statements | Annex
y
n
a
p
m
o
C
e
m
a
n
Eni Iberia SLU
Eni Marketing Austria GmbH
Eni Mineralölhandel GmbH
Eni Schmiertechnik GmbH
Eni Suisse SA
Eni Trading & Shipping Inc
Eni Transporte y Suministro
México S. de RL de CV
Eni USA R&M Co Inc
Esacontrol SA
Esain SA
Llc "Eni-Nefto"
Oléoduc du Rhône SA
Tecnoesa SA
e
c
ffi
o
d
e
r
e
t
s
i
g
e
R
Alcobendas
(Spain)
Wien
(Austria)
Wien
(Austria)
Wurzburg
(Germany)
Lausanne
(Switzerland)
Dover
(USA)
Mexico City
(Mexico)
Wilmington
(USA)
Quito
(Ecuador)
Quito
(Ecuador)
Moscow
(Russia)
Bovernier
(Switzerland)
Quito
(Ecuador)
359
)
*
(
d
o
h
t
e
m
n
o
i
t
a
t
u
l
a
v
r
o
n
o
i
t
a
d
i
l
o
s
n
o
C
F.C.
F.C.
F.C.
F.C.
F.C.
F.C.
Eq.
Eq.
Eq.
n
o
i
t
a
r
e
p
o
f
o
y
r
t
n
u
o
C
y
c
n
e
r
r
u
C
l
a
t
i
p
a
C
e
r
a
h
S
s
r
e
d
l
o
h
e
r
a
h
S
p
i
h
s
r
e
n
w
O
%
o
i
t
a
r
y
t
i
u
q
E
%
Spain
EUR
17,299,100
Eni International BV
100.00
100.00
Austria
EUR
19,621,665.23
Eni Mineralölh.GmbH
Eni International BV
99.99
(..)
100.00
Austria
EUR
34,156,232.06
Eni Austria GmbH
100.00
100.00
Germany
EUR
2,000,000
Eni Deutsch. GmbH
100.00
100.00
Switzerland
CHF
102,500,000
Eni International BV
100.00
100.00
USA
USD
1,000,000
ET&B SpA
100.00
100.00
Mexico
MXN
3,000
Eni International BV
Eni Oil Holdings BV
99.90
0.10
USA
USD
11,000,000
Eni International BV
100.00
Ecuador
USD
60,000
Ecuador
USD
30,000
Russia
RUB
1,010,000
Eni Ecuador SA
Third parties
Eni Ecuador SA
Tecnoesa SA
Eni International BV
Eni Oil Holdings BV
87.00
13.00
99.99
(..)
99.01
0.99
Switzerland
CHF
7,000,000
Eni International BV
100.00
Ecuador
USD
36,000
Eni Ecuador SA
Esain SA
99.99
(..)
100.00
F.C.
Eq.
Eq.
Eq.
(*) F.C. = full consolidation, J.O. = joint operation, Eq. = equity-accounted, Co. = valued at cost, F.V. = valued at fair value.
360
Chemical
IN ITALY
y
n
a
p
m
o
C
e
m
a
n
Finproject SpA
Padanaplast Srl
Versalis SpA
OUTSIDE ITALY
y
n
a
p
m
o
C
e
m
a
n
Asian Compounds Ltd
Dunastyr Polisztirolgyártó
Zártkörûen Mûködõ
Részvénytársaság
Finproject Asia Ltd
e
c
ffi
o
d
e
r
e
t
s
i
g
e
R
Morrovalle
(MC)
Roccabianca
(PR)
San Donato
Milanese (MI)
e
c
ffi
o
d
e
r
e
t
s
i
g
e
R
Hong Kong
(Hong Kong)
Budapest
(Hungary)
Hong Kong
(Honk Kong)
n
o
i
t
a
r
e
p
o
f
o
y
r
t
n
u
o
C
Italy
Italy
Italy
n
o
i
t
a
r
e
p
o
f
o
y
r
t
n
u
o
C
y
c
n
e
r
r
u
C
l
a
t
i
p
a
C
e
r
a
h
S
s
r
e
d
l
o
h
e
r
a
h
S
p
i
h
s
r
e
n
w
O
%
o
i
t
a
r
y
t
i
u
q
E
%
EUR
18,500,000
Versalis SpA
100.00
100.00
EUR
18,000,000
Finproject SpA
100.00
100.00
EUR 446,050,728.65
Eni SpA
100.00
100.00
y
c
n
e
r
r
u
C
l
a
t
i
p
a
C
e
r
a
h
S
s
r
e
d
l
o
h
e
r
a
h
S
p
i
h
s
r
e
n
w
O
%
o
i
t
a
r
y
t
i
u
q
E
%
Honk Kong
HKD
1,000
Finproject Asia Ltd
100.00
100.00
)
*
(
d
o
h
t
e
m
n
o
i
t
a
t
u
l
a
v
r
o
n
o
i
t
a
d
i
l
o
s
n
o
C
F.C.
F.C.
F.C.
)
*
(
d
o
h
t
e
m
n
o
i
t
a
t
u
l
a
v
r
o
n
o
i
t
a
d
i
l
o
s
n
o
C
F.C.
Hungary
HUF
1,577,971.20
Versalis SpA
Versalis Deutschland GmbH
Versalis International SA
96.34
1.83
1.83
100.00
F.C.
Honk Kong
USD
1,000
Finproject SpA
100.00
100.00
F.C.
Finproject Brasil Industria
De Solados Eireli
Franca
(Brazil)
Brazil
BRL
1,000,000
Finproject SpA
100.00
100.00
F.C.
Finproject Guangzhou Trading
Co Ltd
Guangzhou
(China)
China
USD
180,000
Finproject SpA
100.00
100.00
F.C.
Finproject India Pvt Ltd
Jaipur
(India)
India
INR
100,000,000
Asian Compounds Ltd
Finproject Asia Ltd
99.00
1.00
100.00
F.C.
Finproject Romania Srl
Finproject Singapore Pte Ltd
Valea Lui Mihai
(Romania)
Singapore
(Singapore)
Romania
RON
67,730
Finproject SpA
100.00
100.00
F.C.
Singapore
SGD
100
Finproject Asia Ltd
100.00
100.00
F.C.
Finproject Viet Nam Company
Limited
Hai Phong
(Vietnam)
Vietnam
VND 19,623,250,000
Finproject Asia Ltd
100.00
100.00
F.C.
(*) F.C. = full consolidation, J.O. = joint operation, Eq. = equity-accounted, Co. = valued at cost, F.V. = valued at fair value.
Eni Annual Report 2021
Management report | Consolidated financial statements | Annex
y
n
a
p
m
o
C
e
m
a
n
e
c
ffi
o
d
e
r
e
t
s
i
g
e
R
n
o
i
t
a
r
e
p
o
f
o
y
r
t
n
u
o
C
y
c
n
e
r
r
u
C
l
a
t
i
p
a
C
e
r
a
h
S
s
r
e
d
l
o
h
e
r
a
h
S
p
i
h
s
r
e
n
w
O
%
o
i
t
a
r
y
t
i
u
q
E
%
Foam Creations (2008) Inc
Quebec City
(Canada)
Canada
CAD
1,215,000
Finproject SpA
100.00
100.00
361
)
*
(
d
o
h
t
e
m
n
o
i
t
a
t
u
l
a
v
r
o
n
o
i
t
a
d
i
l
o
s
n
o
C
F.C.
Foam Creations México
SA de CV
León
(Mexico)
Mexico
MXN
19,138,165
Foam Creations (2008)
Finproject SpA
99.99
(..)
100.00
F.C.
USA
USD
70,000
Finproject SpA
100.00
100.00
F.C.
Germany
EUR
25,000
Padanaplast Srl
100.00
100.00
F.C.
Padanaplast America Llc
Padanaplast Deutschland GmbH
Versalis Americas Inc
Versalis Congo Sarlu
Wilmington
(USA)
Hannover
(Germany)
Dover
(USA)
USA
USD
100,000
Versalis International SA
100.00
100.00
Pointe-Noire
(Republic
of the Congo)
Republic
of the Congo
XAF
1,000,000
Versalis International SA
100.00
100.00
Versalis Deutschland GmbH
Versalis France SAS
Versalis International SA
Eschborn
(Germany)
Mardyck
(France)
Bruxelles
(Belgium)
Germany
EUR
100,000
Versalis SpA
100.00
100.00
France
EUR
126,115,582.90
Versalis SpA
100.00
100.00
Belgium
EUR
15,449,173.88
Versalis SpA
Versalis Deutschland GmbH
Dunastyr Zrt
Versalis France
59.00
23.71
14.43
2.86
100.00
Versalis Kimya Ticaret Limited
Sirketi
Istanbul
(Turkey)
Turkey
TRY
20,000
Versalis International SA
100.00
100.00
Versalis México S. de R.L. de CV
Mexico City
(Mexico)
Mexico
MXN
1,000
Versalis Pacific (India) Private Ltd Mumbai
India
INR
238,700
Versalis International SA
Versalis SpA
Versalis Singapore P. Ltd
Third parties
99.00
1.00
99.99
(..)
100.00
Versalis Pacific Trading
(Shanghai) Co Ltd
Versalis Singapore Pte Ltd
Versalis UK Ltd
Versalis Zeal Ltd
(India)
Shanghai
(China)
Singapore
(Singapore)
London
(United
Kingdom)
Tokoradi
(Ghana)
China
CNY
1,000,000
Versalis SpA
100.00
100.00
Singapore
SGD
80,000
Versalis SpA
100.00
100.00
United
Kingdom
GBP
4,004,042
Versalis SpA
100.00
100.00
Ghana
GHS
5,650,000
Versalis International SA
Third parties
80.00
20.00
80.00
F.C.
F.C.
F.C.
F.C.
F.C.
F.C.
F.C.
F.C.
Eq.
F.C.
F.C.
F.C.
(*) F.C. = full consolidation, J.O. = joint operation, Eq. = equity-accounted, Co. = valued at cost, F.V. = valued at fair value.
362
PLENITUDE & POWER
Plenitude
IN ITALY
y
n
a
p
m
o
C
e
m
a
n
4Energia Srl
Be Charge Srl
e
c
ffi
o
d
e
r
e
t
s
i
g
e
R
Milan
Milan
Be Charge Valle d'Aosta Srl
Milan
Be Power SpA
CEF 3 Wind Energy SpA
Milan
Milan
CGDB Enrico Srl
CGDB Laerte Srl
Eni gas e luce SpA Società Benefit
Eni New Energy SpA
San Donato
Milanese (MI)
San Donato
Milanese (MI)
San Donato
Milanese (MI)
San Donato
Milanese (MI)
Eolica Lucana Srl
Milan
Evolvere SpA Società Benefit
Milan
Evolvere Venture SpA
Finpower Wind Srl
Green Energy Management
Services Srl
SEA SpA
Milan
Milan
Rome
L'Aquila
Società Energie Rinnovabili 1 SpA
Rome
Società Energie Rinnovabili SpA
Palermo
Wind Park Laterza Srl
San Donato
Milanese (MI)
n
o
i
t
a
r
e
p
o
f
o
y
r
t
n
u
o
C
Italy
Italy
Italy
Italy
Italy
Italy
Italy
Italy
Italy
Italy
Italy
Italy
Italy
Italy
Italy
Italy
Italy
Italy
y
c
n
e
r
r
u
C
l
a
t
i
p
a
C
e
r
a
h
S
s
r
e
d
l
o
h
e
r
a
h
S
p
i
h
s
r
e
n
w
O
%
o
i
t
a
r
y
t
i
u
q
E
%
EUR
400,000
Be Power SpA
100.00
100.00
EUR
500,000
Be Power SpA
100.00
100.00
EUR
10,000
Be Charge Srl
100.00
100.00
EUR
698,251
Eni gas e luce SpA SB
Third parties
(a) 100.00
99.19
0.81
EUR
101,000
Eni New Energy SpA
100.00
100.00
EUR
10,000
Eni New Energy SpA
100.00
100.00
EUR
10,000
Eni New Energy SpA
100.00
100.00
EUR
770,000,000
Eni SpA
100.00
100.00
EUR
9,296,000
Eni gas e luce SpA SB
100.00
100.00
EUR
100,000
Eni New Energy SpA
100.00
100.00
EUR
1,130,000
Eni gas e luce SpA SB
Third parties
70.52
29.48
70.52
EUR
50,000
Evolvere SpA Soc. Ben.
100.00
70.52
EUR
10,000
Eni New Energy SpA
100.00
100.00
EUR
10,000
Eni New Energy SpA
100.00
100.00
EUR
100,000
EUR
120,000
Eni gas e luce SpA SB
Third parties
SER SpA
CEF 3 Wind Energy
60.00
40.00
96.00
4.00
60.00
100.00
EUR
121,636
CEF 3 Wind Energy
100.00
100.00
EUR
10,000
Eni New Energy SpA
100.00
100.00
)
*
(
d
o
h
t
e
m
n
o
i
t
a
t
u
l
a
v
r
o
n
o
i
t
a
d
i
l
o
s
n
o
C
F.C.
F.C.
F.C.
F.C.
F.C.
F.C.
F.C.
F.C.
F.C.
F.C.
F.C.
F.C.
F.C.
F.C.
F.C.
F.C.
F.C.
F.C.
(*) F.C. = full consolidation, J.O. = joint operation, Eq. = equity-accounted, Co. = valued at cost, F.V. = valued at fair value.
(a) Controlling interest:
Eni gas e luce SpA SB
100.00
Eni Annual Report 2021
Management report | Consolidated financial statements | Annex
OUTSIDE ITALY
y
n
a
p
m
o
C
e
m
a
n
e
c
ffi
o
d
e
r
e
t
s
i
g
e
R
n
o
i
t
a
r
e
p
o
f
o
y
r
t
n
u
o
C
y
c
n
e
r
r
u
C
l
a
t
i
p
a
C
e
r
a
h
S
s
r
e
d
l
o
h
e
r
a
h
S
p
i
h
s
r
e
n
w
O
%
o
i
t
a
r
y
t
i
u
q
E
%
Adriaplin Podjetje za distribucijo
zemeljskega plina doo Ljubljana
Ljubljana
(Slovenia)
Slovenia
EUR
12,956,935
Eni gas e luce SpA SB
Third parties
51.00
49.00
51.00
Aldro Energía y Soluciones SLU
Aleria Solar SAS
Alpinia Solar SLU
Argon SAS
Arm Wind Llp
Athies-Samoussy Solar PV1 SAS
Athies-Samoussy Solar PV2 SAS
Athies-Samoussy Solar PV3 SAS
Athies-Samoussy Solar PV4 SAS
Athies-Samoussy Solar PV5 SAS
Belle Magiocche Solaire SAS
Bonete Solar SLU
Brazoria Class B Member Llc
Brazoria County Solar Project Llc
Brazoria HoldCo Llc
Camelia Solar SLU
Celtis Solar SLU
Torrelavega
(Spain)
Bastia
(France)
Madrid
(Spain)
Argenteuil
(France)
Nur-Sultan
(Kazakhstan)
Argenteuil
(France)
Argenteuil
(France)
Argenteuil
(France)
Argenteuil
(France)
Argenteuil
(France)
Bastia
(France)
Madrid
(Spain)
Dover
(USA)
Dover
(USA)
Dover
(USA)
Madrid
(Spain)
Madrid
(Spain)
Spain
EUR
3,192,000
Eni gas e luce SpA SB
100.00
100.00
France
EUR
100
Dhamma Energy SAS
100.00
100.00
Spain
EUR
3,000
Dhamma Energy Group
100.00
100.00
France
EUR
180,000
Dhamma Energy SAS
100.00
100.00
Kazakhstan
KZT 19,069,100,000
Eni Energy Solutions BV
100.00
100.00
France
EUR
68,000
Krypton SAS
100.00
100.00
France
EUR
40,000
Krypton SAS
100.00
100.00
France
EUR
36,000
Krypton SAS
100.00
100.00
France
EUR
14,000
Xenon SAS
100.00
100.00
France
EUR
14,000
Xenon SAS
100.00
100.00
France
EUR
10,000
Dhamma Energy SAS
100.00
100.00
Spain
EUR
3,000
Dhamma Energy Group
100.00
100.00
USA
USA
USA
USD
USD
USD
1,000
Eni New Energy US Inc
100.00
1,000
Eni New Energy US Hold
100.00
100.00
1,000
Brazoria Class B
100.00
Spain
EUR
3,000
Dhamma Energy Group
100.00
100.00
Spain
EUR
3,000
Dhamma Energy Group
100.00
100.00
Desarrollos Empresariales Illas SL Madrid
(Spain)
Spain
EUR
3,000
Desarrollos Energéticos
Riojanos SL
Villarcayo de
Merindad de
Castilla la Vieja
(Spain)
Spain
EUR
876,042
Dhamma Energy Group
Third parties
Eni gas e luce SpA SB
Energías Amb. Outes
55.00
45.00
60.00
40.00
55.00
100.00
Dhamma Energy Development SAS Argenteuil
France
EUR
51,000
Dhamma Energy Group
100.00
100.00
Dhamma Energy Group Sàrl
(France)
Dudelange
(Luxembourg)
Luxembourg
EUR
10,253,560
Eni gas e luce SpA SB
100.00
100.00
363
)
*
(
d
o
h
t
e
m
n
o
i
t
a
t
u
l
a
v
r
o
n
o
i
t
a
d
i
l
o
s
n
o
C
F.C.
F.C.
F.C.
F.C.
F.C.
F.C.
F.C.
F.C.
F.C.
F.C.
F.C.
F.C.
F.C.
Eq.
F.C.
F.C.
F.C.
F.C.
F.C.
F.C.
F.C.
(*) F.C. = full consolidation, J.O. = joint operation, Eq. = equity-accounted, Co. = valued at cost, F.V. = valued at fair value.
364
y
n
a
p
m
o
C
e
m
a
n
e
c
ffi
o
d
e
r
e
t
s
i
g
e
R
n
o
i
t
a
r
e
p
o
f
o
y
r
t
n
u
o
C
y
c
n
e
r
r
u
C
l
a
t
i
p
a
C
e
r
a
h
S
s
r
e
d
l
o
h
e
r
a
h
S
p
i
h
s
r
e
n
w
O
%
o
i
t
a
r
y
t
i
u
q
E
%
Dhamma Energy Management SLU Madrid (Spain)
Spain
EUR
6,680
Dhamma Energy Group
100.00
100.00
Dhamma Energy Rooftop SAS
Dhamma Energy SAS
Argenteuil
(France)
Argenteuil
(France)
France
EUR
40,000
Dhamma Energy Group
100.00
100.00
France
EUR
1,116,489.72
Dhamma Energy Group
100.00
100.00
Ecovent Parc Eolic SAU
Madrid (Spain)
Spain
EUR
1,037,350
Eni gas e luce SpA SB
100.00
100.00
Energías Ambientales de Outes
SLU
Madrid (Spain)
Spain
EUR
643,451.49
Eni gas e luce SpA SB
100.00
100.00
Energías Alternativas Eolicas
Riojanas SL
Logroño
(Spain)
Spain
EUR
2,008,901.71
Eni gas e luce SpA SB
Desarrollos Energéticos
Riojanos SL
57.50
42.50
100.00
Eni Energy Solutions BV
Amsterdam
(Netherlands)
Netherlands
EUR
20,000
Eni gas e luce SpA SB
100.00
100.00
Eni Gas & Power France SA
Levallois Perret
(France)
France
EUR
29,937,600
Eni gas e luce SpA SB
Third parties
99.87
0.13
99.87
Eni New Energy Australia Pty Ltd
Eni New Energy Batchelor Pty Ltd
Eni New Energy Katherine Pty Ltd
Perth
(Australia)
Perth
(Australia)
Perth
(Australia)
Australia
AUD
Australia
AUD
Australia
AUD
Eni New Energy Manton Dam Pty
Ltd
Perth
(Australia)
Australia
AUD
4
1
1
1
Eni gas e luce SpA SB
100.00
Eni New Energ. Austr.
100.00
Eni New Energ. Austr.
100.00
Eni New Energ. Austr.
100.00
)
*
(
d
o
h
t
e
m
n
o
i
t
a
t
u
l
a
v
r
o
n
o
i
t
a
d
i
l
o
s
n
o
C
F.C.
F.C.
F.C.
F.C.
F.C.
F.C.
F.C.
F.C.
Eq.
Eni New Energy Pakistan (Private)
Ltd
Saddar
Town-Karachi
(Pakistan)
Pakistan
PKR 1,252,000,000
Eni International BV
Eni Oil Holdings BV
Eni Pakistan Ltd (M)
100.00
F.C.
Eni New Energy US Holding Llc
Eni New Energy US Inc
Eni New Energy US Investing Inc
Eni North Sea Wind Ltd
Estanque Redondo Solar SLU
Dover
(USA)
Dover
(USA)
Dover
(USA)
London
(United
Kingdom)
Madrid
(Spain)
Gas Supply Company
Thessaloniki - Thessalia SA
Thessaloniki
(Greece)
Holding Lanas Solar Sàrl
Instalaciones Martínez Díez SLU
Ixia Solar SLU
Krypton SAS
Lanas Solar SAS
Argenteuil
(France)
Torrelavega
(Spain)
Madrid
(Spain)
Argenteuil
(France)
Argenteuil
(France)
USA
USA
USA
United
Kingdom
Spain
Greece
France
Spain
USD
USD
USD
100
Eni New Energy US Inc
Eni New Energy US Inv. Inc
100.00
100
Eni gas e luce SpA SB
100.00
100.00
1,000
Eni New Energy US Inc
100.00
100.00
GBP
10,000
Eni Energy Solutions BV
100.00
100.00
EUR
3,000
Dhamma Energy Group
100.00
100.00
EUR
13,761,788
Eni gas e luce SpA SB
100.00
100.00
EUR
100
Dhamma Energy SAS
100.00
100.00
EUR
18,030
Eni gas e luce SpA SB
100.00
100.00
Spain
EUR
3,000
Dhamma Energy Group
100.00
100.00
France
EUR
180,000
Dhamma Energy SAS
100.00
100.00
France
EUR
100
Holding Lanas Solar
100.00
100.00
F.C.
F.C.
F.C.
F.C.
F.C.
F.C.
F.C.
F.C.
F.C.
F.C.
F.C.
99.98
0.01
0.01
99.00
1.00
(*) F.C. = full consolidation, J.O. = joint operation, Eq. = equity-accounted, Co. = valued at cost, F.V. = valued at fair value.
Eni Annual Report 2021
Management report | Consolidated financial statements | Annex
y
n
a
p
m
o
C
e
m
a
n
Membrio Solar SLU
Olea Solar SLU
Opalo Solar SLU
Pistacia Solar SLU
POP Solar SAS
Tebar Solar SLU
Xenon SAS
Zinnia Solar SLU
n
o
i
t
a
r
e
p
o
f
o
y
r
t
n
u
o
C
y
c
n
e
r
r
u
C
l
a
t
i
p
a
C
e
r
a
h
S
s
r
e
d
l
o
h
e
r
a
h
S
p
i
h
s
r
e
n
w
O
%
o
i
t
a
r
y
t
i
u
q
E
%
Spain
EUR
3,000
Dhamma Energy Group
100.00
100.00
Spain
EUR
3,000
Dhamma Energy Group
100.00
100.00
Spain
EUR
3,000
Dhamma Energy Group
100.00
100.00
Spain
EUR
3,000
Dhamma Energy Group
100.00
100.00
France
EUR
1,000
Dhamma Energy Group
100.00
100.00
Spain
EUR
3,000
Dhamma Energy Group
100.00
100.00
France
EUR
1,500,100
Dhamma Energy SAS
Third parties
(a) 100.00
0.01
99.99
Spain
EUR
3,000
Dhamma Energy Group
100.00
100.00
e
c
ffi
o
d
e
r
e
t
s
i
g
e
R
Madrid
(Spain)
Madrid
(Spain)
Madrid
(Spain)
Madrid
(Spain)
Argenteuil
(France)
Madrid
(Spain)
Argenteuil
(France)
Madrid
(Spain)
365
)
*
(
d
o
h
t
e
m
n
o
i
t
a
t
u
l
a
v
r
o
n
o
i
t
a
d
i
l
o
s
n
o
C
F.C.
F.C.
F.C.
F.C.
F.C.
F.C.
F.C.
F.C.
(*) F.C. = full consolidation, J.O. = joint operation, Eq. = equity-accounted, Co. = valued at cost, F.V. = valued at fair value.
(a) Controlling interest:
Dhamma Energy SAS
100.00
366
Power
IN ITALY
y
n
a
p
m
o
C
e
m
a
n
EniPower Mantova SpA
EniPower SpA
e
c
ffi
o
d
e
r
e
t
s
i
g
e
R
San Donato
Milanese (MI)
San Donato
Milanese (MI)
n
o
i
t
a
r
e
p
o
f
o
y
r
t
n
u
o
C
Italy
Italy
y
c
n
e
r
r
u
C
l
a
t
i
p
a
C
e
r
a
h
S
s
r
e
d
l
o
h
e
r
a
h
S
p
i
h
s
r
e
n
w
O
%
o
i
t
a
r
y
t
i
u
q
E
%
EUR
144,000,000
EniPower SpA
Third parties
86.50
13.50
86.50
)
*
(
d
o
h
t
e
m
n
o
i
t
a
t
u
l
a
v
r
o
n
o
i
t
a
d
i
l
o
s
n
o
C
F.C.
EUR
944,947,849
Eni SpA
100.00
100.00
F.C.
(*) F.C. = full consolidation, J.O. = joint operation, Eq. = equity-accounted, Co. = valued at cost, F.V. = valued at fair value.
Eni Annual Report 2021
Management report | Consolidated financial statements | Annex
CORPORATE AND OTHER ACTIVITIES
Corporate and financial companies
IN ITALY
y
n
a
p
m
o
C
e
m
a
n
e
c
ffi
o
d
e
r
e
t
s
i
g
e
R
Agenzia Giornalistica Italia SpA
Rome
D-Service Media Srl
(in liquidation)
D-Share SpA
Eni Corporate University SpA
Eni Energia Italia Srl
Eni Nuova Energia Srl
Eni Trading & Shipping SpA
(in liquidation)
EniProgetti SpA
EniServizi SpA
Serfactoring SpA
Servizi Aerei SpA
Milan
Milan
San Donato
Milanese (MI)
San Donato
Milanese (MI)
San Donato
Milanese (MI)
Rome
Venezia
Marghera (VE)
San Donato
Milanese (MI)
San Donato
Milanese (MI)
San Donato
Milanese (MI)
OUTSIDE ITALY
y
n
a
p
m
o
C
e
m
a
n
Banque Eni SA
D-Share USA Corp.
Eni Finance International SA
e
c
ffi
o
d
e
r
e
t
s
i
g
e
R
Bruxelles
(Belgium)
New York
(USA)
Bruxelles
(Belgium)
n
o
i
t
a
r
e
p
o
f
o
y
r
t
n
u
o
C
Italy
Italy
Italy
Italy
Italy
Italy
Italy
Italy
Italy
Italy
Italy
n
o
i
t
a
r
e
p
o
f
o
y
r
t
n
u
o
C
y
c
n
e
r
r
u
C
l
a
t
i
p
a
C
e
r
a
h
S
s
r
e
d
l
o
h
e
r
a
h
S
p
i
h
s
r
e
n
w
O
%
o
i
t
a
r
y
t
i
u
q
E
%
EUR
2,000,000
Eni SpA
100.00
100.00
EUR
75,000
D-Share SpA
100.00
EUR
121,719.25
AGI SpA
100.00
100.00
EUR
3,360,000
Eni SpA
100.00
100.00
EUR
EUR
EUR
50,000
Eni SpA
50,000
Eni SpA
334,171
Eni SpA
100.00
100.00
100.00
EUR
2,064,000
Eni SpA
100.00
100.00
EUR
13,427,419.08
Eni SpA
100.00
100.00
EUR
5,160,000
Eni SpA
100.00
100.00
EUR
48,205,536
Eni SpA
100.00
100.00
y
c
n
e
r
r
u
C
l
a
t
i
p
a
C
e
r
a
h
S
s
r
e
d
l
o
h
e
r
a
h
S
Belgium
EUR
50,000,000
Eni International BV
Eni Oil Holdings BV
USA
USD
0(a)
D-Share SpA
p
i
h
s
r
e
n
w
O
%
o
i
t
a
r
y
t
i
u
q
E
%
100.00
99.90
0.10
100.00
Belgium
USD
1,480,365,336
Eni International BV
Eni SpA
66.39
33.61
100.00
367
)
*
(
d
o
h
t
e
m
n
o
i
t
a
t
u
l
a
v
r
o
n
o
i
t
a
d
i
l
o
s
n
o
C
F.C.
Eq.
F.C.
F.C.
Co.
Co.
Co.
F.C.
F.C.
F.C.
F.C.
)
*
(
d
o
h
t
e
m
n
o
i
t
a
t
u
l
a
v
r
o
n
o
i
t
a
d
i
l
o
s
n
o
C
F.C.
Co.
F.C.
(*) F.C. = full consolidation, J.O. = joint operation, Eq. = equity-accounted, Co. = valued at cost, F.V. = valued at fair value.
(a) Shares without nominal value.
368
y
n
a
p
m
o
C
e
m
a
n
Eni Finance USA Inc
Eni Insurance DAC
Eni International BV
e
c
ffi
o
d
e
r
e
t
s
i
g
e
R
Dover
(USA)
Dublin
(Ireland)
Amsterdam
(Netherlands)
n
o
i
t
a
r
e
p
o
f
o
y
r
t
n
u
o
C
y
c
n
e
r
r
u
C
l
a
t
i
p
a
C
e
r
a
h
S
s
r
e
d
l
o
h
e
r
a
h
S
p
i
h
s
r
e
n
w
O
%
o
i
t
a
r
y
t
i
u
q
E
%
USA
USD
15,000,000
Eni Petroleum Co Inc
100.00
100.00
Ireland
EUR
500,000,000
Eni SpA
100.00
100.00
Netherlands EUR
641,683,425
Eni SpA
100.00
100.00
Eni International Resources Ltd
London
(United Kingdom)
United
Kingdom
GBP
50,000
Eni SpA
Eni UK Ltd
99.99
(..)
100.00
Eni Next Llc
EniProgetti Egypt Ltd
Dover
(USA)
Cairo
(Egypt)
USA
USD
100
Eni Petroleum Co Inc
100.00
100.00
Egypt
EGP
50,000
Eni Progetti SpA
Eni SpA
99.00
1.00
)
*
(
d
o
h
t
e
m
n
o
i
t
a
t
u
l
a
v
r
o
n
o
i
t
a
d
i
l
o
s
n
o
C
F.C.
F.C.
F.C.
F.C.
F.C.
Eq.
(*) F.C. = full consolidation, J.O. = joint operation, Eq. = equity-accounted, Co. = valued at cost, F.V. = valued at fair value.
Eni Annual Report 2021
Management report | Consolidated financial statements | Annex
Other activities
IN ITALY
y
n
a
p
m
o
C
e
m
a
n
e
c
ffi
o
d
e
r
e
t
s
i
g
e
R
n
o
i
t
a
r
e
p
o
f
o
y
r
t
n
u
o
C
y
c
n
e
r
r
u
C
l
a
t
i
p
a
C
e
r
a
h
S
s
r
e
d
l
o
h
e
r
a
h
S
Eni Rewind SpA
Industria Siciliana Acido
Fosforico - ISAF - SpA
(in liquidation)
San Donato
Milanese (MI)
Gela (CL)
Italy
Italy
EUR
281,857,871.44
EUR
1,300,000
Eni SpA
Third parties
Eni Rewind SpA
Third parties
369
)
*
(
d
o
h
t
e
m
n
o
i
t
a
t
u
l
a
v
r
o
n
o
i
t
a
d
i
l
o
s
n
o
C
F.C.
Eq.
o
i
t
a
r
y
t
i
u
q
E
%
100.00
p
i
h
s
r
e
n
w
O
%
99.99
(..)
52.00
48.00
Ing. Luigi Conti Vecchi SpA
Assemini (CA)
Italy
EUR
5,518,620.64
Eni Rewind SpA
100.00
100.00
F.C.
OUTSIDE ITALY
y
n
a
p
m
o
C
e
m
a
n
e
c
ffi
o
d
e
r
e
t
s
i
g
e
R
n
o
i
t
a
r
e
p
o
f
o
y
r
t
n
u
o
C
y
c
n
e
r
r
u
C
l
a
t
i
p
a
C
e
r
a
h
S
s
r
e
d
l
o
h
e
r
a
h
S
p
i
h
s
r
e
n
w
O
%
o
i
t
a
r
y
t
i
u
q
E
%
Eni Rewind International BV
Oleodotto del Reno SA
Amsterdam
(Netherlands)
Coira
(Switzerland)
Netherlands
EUR
20,000
Eni International BV
100.00
Switzerland
CHF
1,550,000
Eni Rewind SpA
100.00
)
*
(
d
o
h
t
e
m
n
o
i
t
a
t
u
l
a
v
r
o
n
o
i
t
a
d
i
l
o
s
n
o
C
Eq.
Eq.
(*) F.C. = full consolidation, J.O. = joint operation, Eq. = equity-accounted, Co. = valued at cost, F.V. = valued at fair value.
370
JOINT ARRANGEMENTS AND ASSOCIATES
Exploration & Production
IN ITALY
y
n
a
p
m
o
C
e
m
a
n
Agri-Energy Srl(†)
Mozambique Rovuma Venture SpA(†)
e
c
ffi
o
d
e
r
e
t
s
i
g
e
R
Jolanda di
Savoia
(FE)
San Donato
Milanese (MI)
n
o
i
t
a
r
e
p
o
f
o
y
r
t
n
u
o
C
y
c
n
e
r
r
u
C
l
a
t
i
p
a
C
e
r
a
h
S
s
r
e
d
l
o
h
e
r
a
h
S
p
i
h
s
r
e
n
w
O
%
o
i
t
a
r
y
t
i
u
q
E
%
Italy
EUR
50,000
Mozambique
EUR
20,000,000
Eni Natural
Energies SpA
Third parties
Eni SpA
Third parties
50.00
50.00
35.71
64.29
OUTSIDE ITALY
y
n
a
p
m
o
C
e
m
a
n
Agiba Petroleum Co(†)
Angola LNG Ltd
e
c
ffi
o
d
e
r
e
t
s
i
g
e
R
Cairo
(Egypt)
Hamilton
(Bermuda)
n
o
i
t
a
r
e
p
o
f
o
y
r
t
n
u
o
C
y
c
n
e
r
r
u
C
l
a
t
i
p
a
C
e
r
a
h
S
s
r
e
d
l
o
h
e
r
a
h
S
p
i
h
s
r
e
n
w
O
%
o
i
t
a
r
y
t
i
u
q
E
%
Egypt
EGP
20,000
Angola
USD
8,817,000,000
Ashrafi Island Petroleum Co
(in liquidation)
Cairo
(Egypt)
Egypt
EGP
20,000
Barentsmorneftegaz Sàrl(†)
Luxembourg
(Luxembourg)
Russia
USD
20,000
Cabo Delgado Gas Development
Limitada(†)
Maputo
(Mozambique)
Mozambique MZN
2,500,000
Cardón IV SA(†)
Compañia Agua Plana SA
Coral FLNG SA
Caracas
(Venezuela)
Caracas
(Venezuela)
Maputo
(Mozambique)
Venezuela
VED
Venezuela
VED
0
0
Eni Venezuela BV
Third parties
Eni Venezuela BV
Third parties
Mozambique MZN
100,000,000
Coral South FLNG DMCC Dubai (United
Arab Emirates)
United Arab
Emirates
AED
500,000
East Delta Gas Co
(in liquidation)
East Kanayis Petroleum Co(†)
East Obaiyed Petroleum Co(†)
Cairo
(Egypt)
Cairo
(Egypt)
Cairo
(Egypt)
Egypt
EGP
20,000
Egypt
EGP
20,000
Egypt
EGP
20,000
Ieoc Production BV
Third parties
Eni Angola Prod. BV
Third parties
Ieoc Production BV
Third parties
Eni Energy Russia BV
Third parties
Eni Mozambique LNG
H. BV
Third parties
Eni Mozambique LNG
H. BV
Third parties
Eni Mozambique LNG
H. BV
Third parties
Ieoc Production BV
Third parties
Ieoc Production BV
Third parties
Ieoc Production BV
Third parties
50.00
50.00
13.60
86.40
25.00
75.00
33.33
66.67
50.00
50.00
50.00
50.00
26.00
74.00
25.00
75.00
25.00
75.00
37.50
62.50
50.00
50.00
50.00
50.00
(*) F.C. = full consolidation, J.O. = joint operation, Eq. = equity-accounted, Co. = valued at cost, F.V. = valued at fair value.
(†) Jointly controlled entity.
)
*
(
d
o
h
t
e
m
n
o
i
t
a
t
u
l
a
v
r
o
n
o
i
t
a
d
i
l
o
s
n
o
C
Eq.
Eq.
)
*
(
d
o
h
t
e
m
n
o
i
t
a
t
u
l
a
v
r
o
n
o
i
t
a
d
i
l
o
s
n
o
C
Co.
Eq.
Co.
Eq.
Co.
Eq.
Co.
Eq.
Eq.
Co.
Co.
Co.
Eni Annual Report 2021
Management report | Consolidated financial statements | Annex
y
n
a
p
m
o
C
e
m
a
n
El Temsah Petroleum Co
El-Fayrouz Petroleum Co(†)
(in liquidation)
Fedynskmorneftegaz Sàrl(†)
Isatay Operating Company Llp(†)
Karachaganak Petroleum
Operating BV
Khaleej Petroleum Co Wll
Liberty National
Development Co Llc
Mediterranean Gas Co
Meleiha Petroleum Company(†)
Mellitah Oil & Gas BV(†)
Nile Delta Oil Co Nidoco
e
c
ffi
o
d
e
r
e
t
s
i
g
e
R
Cairo
(Egypt)
Cairo
(Egypt)
Luxembourg
(Luxembourg)
Nur-Sultan
(Kazakhstan)
Amsterdam
(Netherlands)
Safat
(Kuwait)
Wilmington
(USA)
Cairo
(Egypt)
Cairo
(Egypt)
Amsterdam
(Netherlands)
Cairo
(Egypt)
North Bardawil Petroleum Co
North El Burg Petroleum Co
Petrobel Belayim Petroleum Co(†)
PetroBicentenario SA(†)
PetroJunín SA(†)
PetroSucre SA
Pharaonic Petroleum Co
Point Resources FPSO AS
Cairo
(Egypt)
Cairo
(Egypt)
Cairo
(Egypt)
Caracas
(Venezuela)
Caracas
(Venezuela)
Caracas
(Venezuela)
Cairo
(Egypt)
Sandnes
(Norway)
n
o
i
t
a
r
e
p
o
f
o
y
r
t
n
u
o
C
y
c
n
e
r
r
u
C
l
a
t
i
p
a
C
e
r
a
h
S
s
r
e
d
l
o
h
e
r
a
h
S
p
i
h
s
r
e
n
w
O
%
o
i
t
a
r
y
t
i
u
q
E
%
Egypt
EGP
20,000
Egypt
EGP
20,000
Russia
USD
20,000
Kazakhstan
KZT
400,000
Kazakhstan
EUR
20,000
Kuwait
KWD
250,000
Ieoc Production BV
Third parties
Ieoc Exploration BV
Third parties
Eni Energy Russia BV
Third parties
Eni Isatay
Third parties
Agip Karachaganak BV
Third parties
Eni Middle E. Ltd
Third parties
USA
USD
0(a)
Eni Oil & Gas Inc
Third parties
Egypt
EGP
20,000
Egypt
EGP
20,000
Libya
EUR
20,000
Egypt
EGP
20,000
Ieoc Production BV
Third parties
Ieoc Production BV
Third parties
Eni North Africa BV
Third parties
Ieoc Production BV
Third parties
Egypt
EGP
20,000
Egypt
EGP
20,000
Egypt
EGP
20,000
Ieoc Exploration BV
Third parties
Ieoc Production BV
Third parties
Ieoc Production BV
Third parties
Venezuela
VED
Venezuela
VED
Venezuela
VED
0
Eni Lasmo Plc
Third parties
0.02
Eni Lasmo Plc
Third parties
0
Eni Venezuela BV
Third parties
Egypt
EGP
20,000
Ieoc Production BV
Third parties
25.00
75.00
50.00
50.00
33.33
66.67
50.00
50.00
29.25
70.75
49.00
51.00
32.50
67.50
25.00
75.00
50.00
50.00
50.00
50.00
37.50
62.50
14.20
85.80
30.00
70.00
25.00
75.00
50.00
50.00
40.00
60.00
40.00
60.00
26.00
74.00
25.00
75.00
Norpipe Terminal HoldCo Ltd
London
(United Kingdom)
Norway
GBP
55.69
Eni SpA
Third parties
Norway
NOK
150,100,000
PR FPSO Holding AS
100.00
Point Resources FPSO Holding
AS
Sandnes
(Norway)
Port Said Petroleum Co(†)
Cairo
(Egypt)
Norway
Egypt
NOK
EGP
60,000
Vår Energi AS
100.00
20,000
Ieoc Production BV
Third parties
50.00
50.00
(*) F.C. = full consolidation, J.O. = joint operation, Eq. = equity-accounted, Co. = valued at cost, F.V. = valued at fair value.
(†) Jointly controlled entity.
(a) Shares without nominal value.
371
)
*
(
d
o
h
t
e
m
n
o
i
t
a
t
u
l
a
v
r
o
n
o
i
t
a
d
i
l
o
s
n
o
C
Co.
Eq.
Co.
Co.
Eq.
Eq.
Co.
Co.
Co.
Co.
Eq.
Co.
Co.
Eq.
Eq.
Eq.
Co.
Co.
372
y
n
a
p
m
o
C
e
m
a
n
PR Jotun DA
Raml Petroleum Co
Ras Qattara Petroleum Co
Rovuma LNG Investment
(DIFC) Ltd
Rovuma LNG SA
Shorouk Petroleum Company
Société Centrale Electrique
du Congo SA
Société Italo Tunisienne
d’Exploitation Pétrolière SA(†)
Sodeps - Société de Developpement
et d’Exploitation du Permis du Sud
SA(†)
Solenova Ltd(†)
Thekah Petroleum Co
(in liquidation)
United Gas Derivatives Co
Vår Energi AS(†)
Vår Energi Marine AS
VIC CBM Ltd(†)
Virginia Indonesia Co CBM Ltd(†)
e
c
ffi
o
d
e
r
e
t
s
i
g
e
R
Sandnes
(Norway)
Cairo
(Egypt)
Cairo
(Egypt)
Dubai
(United Arab
Emirates)
Maputo
(Mozambique)
Cairo
(Egypt)
Pointe-Noire
(Republic
of the Congo)
Tunis
(Tunisia)
Tunis
(Tunisia)
Cairo
(Egypt)
New Cairo
(Egypt)
Sandnes
(Norway)
Sandnes
(Norway)
London
(United Kingdom)
London
(United Kingdom)
n
o
i
t
a
r
e
p
o
f
o
y
r
t
n
u
o
C
y
c
n
e
r
r
u
C
l
a
t
i
p
a
C
e
r
a
h
S
s
r
e
d
l
o
h
e
r
a
h
S
p
i
h
s
r
e
n
w
O
%
o
i
t
a
r
y
t
i
u
q
E
%
Norway
NOK
0(a) PR FPSO AS
PR FPSO Holding AS
Egypt
EGP
20,000
Egypt
EGP
20,000
Mozambique USD
50,000
Mozambique
MZN
100,000,000
Egypt
EGP
20,000
Republic
of the Congo
XAF
44,732,000,000
Tunisia
TND
5,000,000
Tunisia
TND
100,000
London
(United Kingdom)
Angola
USD
1,580,000
Egypt
EGP
20,000
Egypt
USD
153,000,000
Norway
NOK
399,425,000
Ieoc Production BV
Third parties
Ieoc Production BV
Third parties
Eni Mozambique
LNG H. BV
Third parties
Eni Mozambique
LNG H. BV
Third parties
Ieoc Production BV
Third parties
Eni Congo SA
Third parties
Eni Tunisia BV
Third parties
Eni Tunisia BV
Third parties
Eni E&P Holding BV
Third parties
Ieoc Exploration BV
Third parties
Eni International BV
Third parties
Eni International BV
Third parties
95.00
5.00
22.50
77.50
37.50
62.50
25.00
75.00
25.00
75.00
25.00
75.00
20.00
80.00
50.00
50.00
50.00
50.00
50.00
50.00
25.00
75.00
33.33
66.67
69.85
30.15
Norway
NOK
61,000,000
Vår Energi AS
100.00
Indonesia
USD
52,315,912
Indonesia
USD
25,631,640
Eni Lasmo Plc
Third parties
Eni Lasmo Plc
Third parties
Ieoc Exploration BV
Third parties
50.00
50.00
50.00
50.00
50.00
50.00
West Ashrafi Petroleum Co(†)
(in liquidation)
Cairo
(Egypt)
Egypt
EGP
20,000
)
*
(
d
o
h
t
e
m
n
o
i
t
a
t
u
l
a
v
r
o
n
o
i
t
a
d
i
l
o
s
n
o
C
Co.
Co.
Eq.
Eq.
Co.
Eq.
Eq.
Co.
Eq.
Eq.
Eq.
Eq.
Eq.
(*) F.C. = full consolidation, J.O. = joint operation, Eq. = equity-accounted, Co. = valued at cost, F.V. = valued at fair value.
(†) Jointly controlled entity.
(a) Shares without nominal value.
Eni Annual Report 2021
373
)
*
(
d
o
h
t
e
m
n
o
i
t
a
t
u
l
a
v
r
o
n
o
i
t
a
d
i
l
o
s
n
o
C
Eq.
Eq.
)
*
(
d
o
h
t
e
m
n
o
i
t
a
t
u
l
a
v
r
o
n
o
i
t
a
d
i
l
o
s
n
o
C
Eq.
Management report | Consolidated financial statements | Annex
GLOBAL GAS & LNG PORTFOLIO
IN ITALY
y
n
a
p
m
o
C
e
m
a
n
e
c
ffi
o
d
e
r
e
t
s
i
g
e
R
n
o
i
t
a
r
e
p
o
f
o
y
r
t
n
u
o
C
y
c
n
e
r
r
u
C
l
a
t
i
p
a
C
e
r
a
h
S
s
r
e
d
l
o
h
e
r
a
h
S
Mariconsult SpA(†)
Milan
Italy
EUR
120,000
Transmed SpA(†)
Milan
Italy
EUR
240,000
Eni SpA
Third parties
Eni SpA
Third parties
o
i
t
a
r
y
t
i
u
q
E
%
p
i
h
s
r
e
n
w
O
%
50.00
50.00
50.00
50.00
OUTSIDE ITALY
y
n
a
p
m
o
C
e
m
a
n
Angola LNG Supply Services Llc
Blue Stream Pipeline Co BV(†)
Damietta LNG (DLNG) SAE(†)
GreenStream BV(†)
Premium Multiservices SA
SAMCO Sagl
SEGAS Services SAE(†)
e
c
ffi
o
d
e
r
e
t
s
i
g
e
R
Wilmington
(USA)
Amsterdam
(Netherlands)
Damietta
(Egypt)
Amsterdam
(Netherlands)
Tunis
(Tunisia)
Lugano
(Switzerland)
Damietta
(Egypt)
n
o
i
t
a
r
e
p
o
f
o
y
r
t
n
u
o
C
y
c
n
e
r
r
u
C
l
a
t
i
p
a
C
e
r
a
h
S
s
r
e
d
l
o
h
e
r
a
h
S
p
i
h
s
r
e
n
w
O
%
o
i
t
a
r
y
t
i
u
q
E
%
USA
USD
19,278,782
Russia
USD
22,000
Egypt
USD
375,000,000
Libya
EUR
200,000,000
Tunisia
TND
200,000
Switzerland CHF
20,000
Egypt
USD
1,000,000
Eni USA Gas M. Llc
Third parties
Eni International BV
Third parties
Eni Gas Liquef. BV
Third parties
Eni North Africa BV
Third parties
Sergaz SA
Third parties
Transmed.Pip.Co Ltd
Eni International BV
Third parties
Damietta LNG
Eni Gas Liquef. BV
Third parties
Eni International BV
Third parties
Eni SpA
Third parties
13.60
86.40
50.00
50.00
50.00
50.00
50.00
50.00
49.99
50.01
90.00
5.00
5.00
98.00
1.00
1.00
50.00
50.00
50.00
50.00
74.62(a)
J.O.
50.00
50.00
J.O.
J.O.
Eq.
Eq.
50.00
J.O.
Eq.
J.O.
50.00
Société Energies Renouvelables
Eni-ETAP SA(†)
Tunis
(Tunisia)
Transmediterranean
Pipeline Co Ltd(†)(9)
St. Helier
(Jersey)
Tunisia
TND
1,000,000
Jersey
USD
10,310,000
(*) F.C. = full consolidation, J.O. = joint operation, Eq. = equity-accounted, Co. = valued at cost, F.V. = valued at fair value
(†) Jointly controlled entity.
(a) Equity ratio equal to the Eni's working interest.
(9) Company that benefits from a privileged tax regime pursuant to art. 167, paragraph 4 of the D.P.R. of December 22, 1986, n. 917: the company is subjected to tax-
ation in Italy because it is included in Eni's tax return. The company is considered as a controlled entity pursuant to art. 167, paragraph 2 of the TUIR.
374
REFINING & MARKETING AND CHEMICAL
Refining & Marketing
IN ITALY
y
n
a
p
m
o
C
e
m
a
n
e
c
ffi
o
d
e
r
e
t
s
i
g
e
R
n
o
i
t
a
r
e
p
o
f
o
y
r
t
n
u
o
C
y
c
n
e
r
r
u
C
l
a
t
i
p
a
C
e
r
a
h
S
s
r
e
d
l
o
h
e
r
a
h
S
p
i
h
s
r
e
n
w
O
%
o
i
t
a
r
y
t
i
u
q
E
%
Arezzo Gas SpA(†)
Arezzo
Italy
EUR
394,000
CePIM Centro Padano
Interscambio Merci SpA
Fontevivo (PR)
Italy
EUR
6,642,928.32
Consorzio Operatori GPL di Napoli
Napoli
Costiero Gas Livorno SpA(†)
Livorno
Italy
Italy
EUR
102,000
EUR
26,000,000
Disma SpA
Segrate (MI)
Italy
EUR
2,600,000
Eni Fuel SpA
Third parties
Ecofuel SpA
Third parties
Eni Fuel SpA
Third parties
Eni Fuel SpA
Third parties
Eni Fuel SpA
Third parties
Livorno LNG Terminal SpA
(in liquidation)
Livorno
Porto Petroli di Genova SpA
Genova
Italy
Italy
EUR
200,000
Costiero Gas L. SpA
Third parties
EUR
2,068,000
Raffineria di Milazzo ScpA(†)
Milazzo (ME)
Italy
EUR
171,143,000
Seram SpA
Fiumicino (RM)
Italy
EUR
852,000
Ecofuel SpA
Third parties
Eni SpA
Third parties
Eni SpA
Third parties
Ecofuel SpA
Third parties
Eni SpA
Third parties
Eni SpA
Third parties
EUR
3,326,900
EUR
3,085,000
EUR
10,000
Sigea Sistema Integrato
Genova Arquata SpA
Società Oleodotti
Meridionali - SOM SpA(†)
Genova
Rome
South Italy Green Hydrogen Srl(†)
Rome
OUTSIDE ITALY
y
n
a
p
m
o
C
e
m
a
n
e
c
ffi
o
d
e
r
e
t
s
i
g
e
R
Italy
Italy
Italy
n
o
i
t
a
r
e
p
o
f
o
y
r
t
n
u
o
C
y
c
n
e
r
r
u
C
l
a
t
i
p
a
C
e
r
a
h
S
s
r
e
d
l
o
h
e
r
a
h
S
Abu Dhabi Oil Refining Company
(TAKREER)
ADNOC Global Trading Ltd
Abu Dhabi
(United Arab
Emirates)
Abu Dhabi
(United Arab
Emirates)
United Arab
Emirates
United Arab
Emirates
AED
500,000,000
USD
100,000,000
Eni Abu Dhabi R&T
Third parties
Eni Abu Dhabi R&T
Third parties
(*) F.C. = full consolidation, J.O. = joint operation, Eq. = equity-accounted, Co. = valued at cost, F.V. = valued at fair value.
(†) Jointly controlled entity.
)
*
(
d
o
h
t
e
m
n
o
i
t
a
t
u
l
a
v
r
o
n
o
i
t
a
d
i
l
o
s
n
o
C
Eq.
Eq.
Co.
65.00
J.O.
Eq.
Co.
Eq.
50.00
J.O.
Eq.
Eq.
Eq.
Eq.
)
*
(
d
o
h
t
e
m
n
o
i
t
a
t
u
l
a
v
r
o
n
o
i
t
a
d
i
l
o
s
n
o
C
Eq.
Eq.
o
i
t
a
r
y
t
i
u
q
E
%
50.00
50.00
44.78
55.22
25.00
75.00
65.00
35.00
25.00
75.00
50.00
50.00
40.50
59.50
50.00
50.00
25.00
75.00
35.00
65.00
70.00
30.00
50.00
50.00
p
i
h
s
r
e
n
w
O
%
20.00
80.00
20.00
80.00
Eni Annual Report 2021
Management report | Consolidated financial statements | Annex
y
n
a
p
m
o
C
e
m
a
n
e
c
ffi
o
d
e
r
e
t
s
i
g
e
R
n
o
i
t
a
r
e
p
o
f
o
y
r
t
n
u
o
C
y
c
n
e
r
r
u
C
l
a
t
i
p
a
C
e
r
a
h
S
s
r
e
d
l
o
h
e
r
a
h
S
AET -
Raffineriebeteiligungsgesellschaft
mbH(†)
Schwedt
(Germany)
Bayernoil Raffineriegesellschaft
mbH(†)
Vohburg
(Germany)
City Carburoil SA(†)
Egyptian International
Gas Technology Co
ENEOS Italsing Pte Ltd
Fuelling Aviation Services GIE
Mediterranée Bitumes SA
Routex BV
Saraco SA
Monteceneri
(Switzerland)
New Cairo
(Egypt)
Singapore
(Singapore)
Tremblay-en-
France
(France)
Tunis
(Tunisia)
Amsterdam
(Netherlands)
Meyrin
(Switzerland)
Germany
EUR
27,000
Germany
EUR
10,226,000
Switzerland
CHF
6,000,000
Egypt
EGP
100,000,000
Singapore
SGD
12,000,000
Eni Deutsch. GmbH
Third parties
Eni Deutsch. GmbH
Third parties
Eni Suisse SA
Third parties
Eni International BV
Third parties
Eni International BV
Third parties
France
EUR
0
Eni France Sàrl
Third parties
Tunisia
TND
1,000,000
Netherlands
EUR
67,500
Switzerland
CHF
420,000
Eni International BV
Third parties
Eni International BV
Third parties
Eni Suisse SA
Third parties
Supermetanol CA(†)
Jose Puerto La
Cruz (Venezuela)
Venezuela
VED
0
Ecofuel SpA
Supermetanol CA
Third parties
TBG Tanklager
Betriebsgesellschaft GmbH(†)
Salzburg
(Austria)
Austria
EUR
43,603.70
Weat Electronic Datenservice
GmbH
Düsseldorf
(Germany)
Germany
EUR
409,034
Eni Marketing A. GmbH
Third parties
Eni Deutsch. GmbH
Third parties
p
i
h
s
r
e
n
w
O
%
33.33
66.67
20.00
80.00
49.91
50.09
40.00
60.00
22.50
77.50
25.00
75.00
34.00
66.00
20.00
80.00
20.00
80.00
(a)
34.51
30.07
35.42
50.00
50.00
20.00
80.00
375
)
*
(
d
o
h
t
e
m
n
o
i
t
a
t
u
l
a
v
r
o
n
o
i
t
a
d
i
l
o
s
n
o
C
Eq.
o
i
t
a
r
y
t
i
u
q
E
%
20.00
J.O.
Eq.
Co.
Eq.
Co.
Eq.
Eq.
Co.
50.00
J.O.
Eq.
Eq.
(*) F.C. = full consolidation, J.O. = joint operation, Eq. = equity-accounted, Co. = valued at cost, F.V. = valued at fair value.
(†) Jointly controlled entity.
(a) Controlling interest:
Ecofuel SpA
Third parties
50.00
50.00
376
Chemical
IN ITALY
y
n
a
p
m
o
C
e
m
a
n
e
c
ffi
o
d
e
r
e
t
s
i
g
e
R
n
o
i
t
a
r
e
p
o
f
o
y
r
t
n
u
o
C
y
c
n
e
r
r
u
C
l
a
t
i
p
a
C
e
r
a
h
S
s
r
e
d
l
o
h
e
r
a
h
S
p
i
h
s
r
e
n
w
O
%
o
i
t
a
r
y
t
i
u
q
E
%
Brindisi Servizi Generali Scarl
Brindisi
Italy
EUR
1,549,060
IFM Ferrara ScpA
Ferrara
Italy
EUR
5,270,466
Matrìca SpA(†)
Porto Torres
(SS)
Italy
EUR
37,500,000
Priolo Servizi ScpA
Melilli (SR)
Italy
EUR
28,100,000
Ravenna Servizi Industriali ScpA
Ravenna
Italy
EUR
5,597,400
Servizi Porto Marghera Scarl
Venezia
Marghera (VE)
Italy
EUR
8,695,718
Versalis SpA
Eni Rewind SpA
EniPower SpA
Third parties
Versalis SpA
Eni Rewind SpA
S.E.F. Srl
Third parties
Versalis SpA
Third parties
Versalis SpA
Eni Rewind SpA
Third parties
Versalis SpA
EniPower SpA
Ecofuel SpA
Third parties
Versalis SpA
Eni Rewind SpA
Third parties
49.00
20.20
8.90
21.90
19.74
11.58
10.70
57.98
50.00
50.00
37.22
5.65
57.13
42.13
30.37
1.85
25.65
48.44
38.39
13.17
OUTSIDE ITALY
y
n
a
p
m
o
C
e
m
a
n
Lotte Versalis Elastomers Co Ltd(†)
Versalis Chem-invest LLP(†)
e
c
ffi
o
d
e
r
e
t
s
i
g
e
R
Yeosu
(South Korea)
Uralsk City
(Kazakhstan)
n
o
i
t
a
r
e
p
o
f
o
y
r
t
n
u
o
C
y
c
n
e
r
r
u
C
l
a
t
i
p
a
C
e
r
a
h
S
s
r
e
d
l
o
h
e
r
a
h
S
South Korea
KRW 551,800,000,000
Versalis SpA
Third parties
o
i
t
a
r
y
t
i
u
q
E
%
p
i
h
s
r
e
n
w
O
%
50.00
50.00
Kzakhstan
KZT
64,194,000
Versalis International SA
Third parties
49.00
51.00
VPM Oilfield Specialty Chemicals
Llc(†)
Abu Dhabi
(United Arab
Emirates)
United Arab
Emirates
AED
1,000,000
Versalis International SA
Third parties
49.00
51.00
)
*
(
d
o
h
t
e
m
n
o
i
t
a
t
u
l
a
v
r
o
n
o
i
t
a
d
i
l
o
s
n
o
C
Eq.
Eq.
Eq.
Eq.
Eq.
Eq.
)
*
(
d
o
h
t
e
m
n
o
i
t
a
t
u
l
a
v
r
o
n
o
i
t
a
d
i
l
o
s
n
o
C
Eq.
Eq.
Eq.
(*) F.C. = full consolidation, J.O. = joint operation, Eq. = equity-accounted, Co. = valued at cost, F.V. = valued at fair value.
(†) Jointly controlled entity.
Eni Annual Report 2021
Management report | Consolidated financial statements | Annex
PLENITUDE & POWER
Plenitude
IN ITALY
y
n
a
p
m
o
C
e
m
a
n
e
c
ffi
o
d
e
r
e
t
s
i
g
e
R
n
o
i
t
a
r
e
p
o
f
o
y
r
t
n
u
o
C
y
c
n
e
r
r
u
C
l
a
t
i
p
a
C
e
r
a
h
S
s
r
e
d
l
o
h
e
r
a
h
S
p
i
h
s
r
e
n
w
O
%
o
i
t
a
r
y
t
i
u
q
E
%
E-Prosume Srl(†)
Milan
Italy
EUR
100,000
Evogy Srl Società Benefit
Seriate (BG)
Italy
EUR
11,785.71
Evolvere Venture SpA
Third parties
Evolvere Venture SpA
Third parties
Eni gas e luce SpA SB
Third parties
Evolvere Venture SpA
Third parties
Evolvere Venture SpA
Third parties
50.00
50.00
45.45
54.55
51.00
49.00
40.00
60.00
36.00
64.00
EUR
50,000
EUR
200,000
EUR
408,509.29
GreenIT SpA(†)
San Donato
Milanese (MI)
Renewable Dispatching Srl
Milan
Tate Srl
Bologna
OUTSIDE ITALY
y
n
a
p
m
o
C
e
m
a
n
e
c
ffi
o
d
e
r
e
t
s
i
g
e
R
Italy
Italy
Italy
n
o
i
t
a
r
e
p
o
f
o
y
r
t
n
u
o
C
y
c
n
e
r
r
u
C
l
a
t
i
p
a
C
e
r
a
h
S
s
r
e
d
l
o
h
e
r
a
h
S
p
i
h
s
r
e
n
w
O
%
o
i
t
a
r
y
t
i
u
q
E
%
Bluebell Solar Class A Holdings
II Llc
Wilmington
(USA)
USA
USD
82,351,634
Clarensac Solar SAS
Doggerbank Offshore Wind Farm
Project 1 Holdco Ltd(†)
Doggerbank Offshore Wind Farm
Project 2 Holdco Ltd(†)
Enera Conseil SAS(†)
Fotovoltaica Escudero SL
Gas Distribution Company of
Thessaloniki - Thessaly SA(†)
Novis Renewables Holdings Llc
Meyreuil
(France)
Reading
(United
Kingdom)
Reading
(United
Kingdom)
Clichy
(France)
Valencia
(Spain)
Ampelokipi-
Menemeni
(Greece)
Wilmington
(USA)
France
EUR
25,000
Eni New Energy US Inc
Third parties
Dhamma Energy SAS
Third parties
United
Kingdom
United
Kingdom
GBP
1,000
Eni North Sea Wind
Third parties
GBP
1,000
Eni North Sea Wind
Third parties
France
EUR
9,690
Eni G&P France SA
Third parties
Spain
EUR
3,000
Dhamma Energy Group
Third parties
Greece
EUR
247,127,605
Eni gas e luce SpA SB
Third parties
USA
USD
100
Eni New Energy US Inc
Third parties
99.00
1.00
40.00
60.00
20.00
80.00
20.00
80.00
51.00
49.00
45.00
55.00
49.00
51.00
49.00
51.00
(*) F.C. = full consolidation, J.O. = joint operation, Eq. = equity-accounted, Co. = valued at cost, F.V. = valued at fair value.
(†) Jointly controlled entity.
377
)
*
(
d
o
h
t
e
m
n
o
i
t
a
t
u
l
a
v
r
o
n
o
i
t
a
d
i
l
o
s
n
o
C
Eq.
Eq.
Eq.
Eq.
Eq.
)
*
(
d
o
h
t
e
m
n
o
i
t
a
t
u
l
a
v
r
o
n
o
i
t
a
d
i
l
o
s
n
o
C
Eq.
Eq.
Eq.
Eq.
Eq.
Eq.
Co.
Eq.
378
y
n
a
p
m
o
C
e
m
a
n
Novis Renewables Llc(†)
OVO Energy (France) SAS
Vårgrønn AS(†)
e
c
ffi
o
d
e
r
e
t
s
i
g
e
R
Wilmington
(USA)
Paris
(France)
Stavanger
(Norway)
n
o
i
t
a
r
e
p
o
f
o
y
r
t
n
u
o
C
y
c
n
e
r
r
u
C
l
a
t
i
p
a
C
e
r
a
h
S
s
r
e
d
l
o
h
e
r
a
h
S
USA
USD
100
France
EUR
66,666.66
Norway
NOK
100,000
Eni New Energy US Inc
Third parties
Eni gas e luce SpA SB
Third parties
Eni Energy Solutions BV
Third parties
)
*
(
d
o
h
t
e
m
n
o
i
t
a
t
u
l
a
v
r
o
n
o
i
t
a
d
i
l
o
s
n
o
C
Eq.
Eq.
Eq.
o
i
t
a
r
y
t
i
u
q
E
%
p
i
h
s
r
e
n
w
O
%
50.00
50.00
25.00
75.00
69.60
30.40
(*) F.C. = full consolidation, J.O. = joint operation, Eq. = equity-accounted, Co. = valued at cost, F.V. = valued at fair value.
(†) Jointly controlled entity.
Eni Annual Report 2021
Management report | Consolidated financial statements | Annex
Power
IN ITALY
y
n
a
p
m
o
C
e
m
a
n
e
c
ffi
o
d
e
r
e
t
s
i
g
e
R
n
o
i
t
a
r
e
p
o
f
o
y
r
t
n
u
o
C
y
c
n
e
r
r
u
C
l
a
t
i
p
a
C
e
r
a
h
S
s
r
e
d
l
o
h
e
r
a
h
S
p
i
h
s
r
e
n
w
O
%
o
i
t
a
r
y
t
i
u
q
E
%
Società EniPower Ferrara Srl(†)
San Donato
Milanese (MI)
Italy
EUR
140,000,000
EniPower SpA
Third parties
51.00
49.00
51.00
379
)
*
(
d
o
h
t
e
m
n
o
i
t
a
t
u
l
a
v
r
o
n
o
i
t
a
d
i
l
o
s
n
o
C
J.O.
(*) F.C. = full consolidation, J.O. = joint operation, Eq. = equity-accounted, Co. = valued at cost, F.V. = valued at fair value.
(†) Jointly controlled entity.
380
CORPORATE AND OTHER ACTIVITIES
Corporate and financial companies
IN ITALY
y
n
a
p
m
o
C
e
m
a
n
e
c
ffi
o
d
e
r
e
t
s
i
g
e
R
n
o
i
t
a
r
e
p
o
f
o
y
r
t
n
u
o
C
y
c
n
e
r
r
u
C
l
a
t
i
p
a
C
e
r
a
h
S
s
r
e
d
l
o
h
e
r
a
h
S
Consorzio per l'attuazione del
Progetto Divertor Tokamak Test
DTT Scarl(†)
Saipem SpA(#)(†)
Frascati (RM)
Italy
EUR
1,000,000
San Donato
Milanese (MI)
Italy
EUR
2,191,384,693
Eni SpA
Third parties
Eni SpA
Saipem SpA
Third parties
o
i
t
a
r
y
t
i
u
q
E
%
p
i
h
s
r
e
n
w
O
%
25.00
75.00
(a)
30.54
2.12
67.34
OUTSIDE ITALY
y
n
a
p
m
o
C
e
m
a
n
e
c
ffi
o
d
e
r
e
t
s
i
g
e
R
n
o
i
t
a
r
e
p
o
f
o
y
r
t
n
u
o
C
y
c
n
e
r
r
u
C
l
a
t
i
p
a
C
e
r
a
h
S
s
r
e
d
l
o
h
e
r
a
h
S
p
i
h
s
r
e
n
w
O
%
o
i
t
a
r
y
t
i
u
q
E
%
Commonwealth Fusion Systems Llc Wilmington
USA
USD
215,000,514.83
CZero Inc
Form Energy Inc
Obantarla Corp.
sHYp BV PBC
Tecninco Engineering
Contractors Llp(†)
Thiozen Inc
(USA)
Wilmington
(USA)
Somerville
(USA)
Wilmington
(USA)
Wilmington
(USA)
Aksai
(Kazakhstan)
Wilmington
(USA)
USA
USA
USA
USA
USD
8,116,660.78
USD
328,901,396.67
USD
20,499,995
USD
3,000,000
Kazakhstan
KZT
29,478,455
USA
USD
2,999,987.81
Eni Next Llc
Third parties
Eni Next Llc
Third parties
Eni Next Llc
Third parties
Eni Next Llc
Third parties
Eni Next Llc
Third parties
EniProgetti SpA
Third parties
Eni Next Llc
Third parties
49.00
51.00
)
*
(
d
o
h
t
e
m
n
o
i
t
a
t
u
l
a
v
r
o
n
o
i
t
a
d
i
l
o
s
n
o
C
Co.
Eq.
)
*
(
d
o
h
t
e
m
n
o
i
t
a
t
u
l
a
v
r
o
n
o
i
t
a
d
i
l
o
s
n
o
C
Eq.
Eq.
Eq.
Eq.
Eq.
Eq.
Eq.
(*) F.C. = full consolidation, J.O. = joint operation, Eq. = equity-accounted, Co. = valued at cost, F.V. = valued at fair value.
(#) Company with shares quoted in the regulated market of Italy or of other EU countries.
(†) Jointly controlled entity.
(a) Controlling interest:
Eni SpA
Third parties
31.20
68.80
Eni Annual Report 2021
Management report | Consolidated financial statements | Annex
Other activities
IN ITALY
y
n
a
p
m
o
C
e
m
a
n
e
c
ffi
o
d
e
r
e
t
s
i
g
e
R
n
o
i
t
a
r
e
p
o
f
o
y
r
t
n
u
o
C
y
c
n
e
r
r
u
C
l
a
t
i
p
a
C
e
r
a
h
S
s
r
e
d
l
o
h
e
r
a
h
S
HEA SpA(†)
Bologna
Italy
EUR
50,000
Progetto Nuraghe Scarl
Porto Torres (SS)
Italy
EUR
10,000
Eni Rewind SpA
Third parties
Eni Rewind SpA
Third parties
381
)
*
(
d
o
h
t
e
m
n
o
i
t
a
t
u
l
a
v
r
o
n
o
i
t
a
d
i
l
o
s
n
o
C
Co.
Eq.
o
i
t
a
r
y
t
i
u
q
E
%
p
i
h
s
r
e
n
w
O
%
50.00
50.00
48.55
51.45
(*) F.C. = full consolidation, J.O. = joint operation, Eq. = equity-accounted, Co. = valued at cost, F.V. = valued at fair value.
(†) Jointly controlled entity.
382
OTHER SIGNIFICANT INVESTMENTS
Exploration & Production
IN ITALY
y
n
a
p
m
o
C
e
m
a
n
BF SpA(#)
Consorzio Universitario in Ingegneria
per la Qualità e l’Innovazione
OUTSIDE ITALY
y
n
a
p
m
o
C
e
m
a
n
Administradora del Golfo de Paria Este SA
Brass LNG Ltd
Darwin LNG Pty Ltd
New Liberty Residential Co Llc
Nigeria LNG Ltd
North Caspian Operating Co NV
e
c
ffi
o
d
e
r
e
t
s
i
g
e
R
Jolanda di Savoia
(FE)
Pisa
e
c
ffi
o
d
e
r
e
t
s
i
g
e
R
Caracas
(Venezuela)
Lagos
(Nigeria)
West Perth
(Australia)
West Trenton
(USA)
Port Harcourt
(Nigeria)
The Hague
(Netherlands)
n
o
i
t
a
r
e
p
o
f
o
y
r
t
n
u
o
C
Italy
Italy
n
o
i
t
a
r
e
p
o
f
o
y
r
t
n
u
o
C
y
c
n
e
r
r
u
C
l
a
t
i
p
a
C
e
r
a
h
S
s
r
e
d
l
o
h
e
r
a
h
S
EUR
187,059,565
Eni Natural Energies SpA
Third parties
EUR
138,000
Eni SpA
Third parties
y
c
n
e
r
r
u
C
Venezuela
VED
Nigeria
USD
1,000,000
Australia
AUD
187,569,921.42
l
a
t
i
p
a
C
e
r
a
h
S
0
s
r
e
d
l
o
h
e
r
a
h
S
Eni Venezuela BV
Third parties
Eni Int. NA NV Sàrl
Third parties
Eni G&P LNG Aus. BV
Third parties
USA
USD
0(a) Eni Oil & Gas Inc
Third parties
Nigeria
USD
1,138,207,000
Kazakhstan
EUR
128,520
Eni Int. NA NV Sàrl
Third parties
Agip Caspian Sea BV
Third parties
Eni Angola Prod. BV
Third parties
)
*
(
d
o
h
t
e
m
n
o
i
t
a
t
u
l
a
v
r
o
n
o
i
t
a
d
i
l
o
s
n
o
C
F.V.
F.V.
)
*
(
d
o
h
t
e
m
n
o
i
t
a
t
u
l
a
v
r
o
n
o
i
t
a
d
i
l
o
s
n
o
C
F.V.
F.V.
F.V.
F.V.
F.V.
F.V.
F.V.
F.V.
F.V.
F.V.
p
i
h
s
r
e
n
w
O
%
3.32
96.68
16.67
83.33
p
i
h
s
r
e
n
w
O
%
19.50
80.50
20.48
79.52
10.99
89.01
17.50
82.50
10.40
89.60
16.81
83.19
13.60
86.40
19.50
80.50
10.57
89.43
12.50
87.50
OPCO - Sociedade Operacional Angola LNG SA Luanda
(Angola)
Angola
AOA
7,400,000
Petrolera Güiria SA
SOMG - Sociedade de Operações
e Manutenção de Gasodutos SA
Torsina Oil Co
Caracas
(Venezuela)
Luanda
(Angola)
Cairo
(Egypt)
Venezuela
VED
0
Eni Venezuela BV
Third parties
Angola
AOA
7,400,000
Egypt
EGP
20,000
Eni Angola Prod. BV
Third parties
Ieoc Production BV
Third parties
(*) F.C. = full consolidation, J.O. = joint operation, Eq. = equity-accounted, Co. = valued at cost, F.V. = valued at fair value.
(#) Company with shares quoted in the regulated market of Italy or of other EU countries.
(a) Shares without nominal value.
Eni Annual Report 2021
Management report | Consolidated financial statements | Annex
GLOBAL GAS & LNG PORTFOLIO
OUTSIDE ITALY
y
n
a
p
m
o
C
e
m
a
n
Norsea Gas GmbH
e
c
ffi
o
d
e
r
e
t
s
i
g
e
R
n
o
i
t
a
r
e
p
o
f
o
y
r
t
n
u
o
C
y
c
n
e
r
r
u
C
l
a
t
i
p
a
C
e
r
a
h
S
s
r
e
d
l
o
h
e
r
a
h
S
p
i
h
s
r
e
n
w
O
%
Friedeburg-Etzel
(Germany)
Germany
EUR
1,533,875.64
Eni International BV
Third parties
13.04
86.96
383
)
*
(
d
o
h
t
e
m
n
o
i
t
a
t
u
l
a
v
r
o
n
o
i
t
a
d
i
l
o
s
n
o
C
F.V.
(*) F.C. = full consolidation, J.O. = joint operation, Eq. = equity-accounted, Co. = valued at cost, F.V. = valued at fair value.
384
REFINING & MARKETING AND CHEMICAL
Refining & Marketing
OUTSIDE ITALY
y
n
a
p
m
o
C
e
m
a
n
e
c
ffi
o
d
e
r
e
t
s
i
g
e
R
n
o
i
t
a
r
e
p
o
f
o
y
r
t
n
u
o
C
y
c
n
e
r
r
u
C
l
a
t
i
p
a
C
e
r
a
h
S
s
r
e
d
l
o
h
e
r
a
h
S
BFS Berlin Fuelling Services GbR
Berlin
(Germany)
Germany
EUR
89,199
Compañia de Economia Mixta “Austrogas” Cuenca
Ecuador
USD
6,863,493
Dépôts Pétroliers de Fos SA
Dépôt Pétrolier de la Côte d’Azur SAS
(Ecuador)
Fos-Sur-Mer
(France)
Nanterre
(France)
France
EUR
3,954,196.40
France
EUR
207,500
Eni Deutsch. GmbH
Third parties
Eni Ecuador SA
Third parties
Eni France Sàrl
Third parties
Eni France Sàrl
Third parties
Joint Inspection Group Ltd
Cambourne
(United Kingdom)
United
Kingdom
GBP
0(a)
Eni SpA
Third parties
Saudi European Petrochemical Co
IBN ZAHR
Al Jubail
(Saudi Arabia)
Saudi
Arabia
SAR
1,200,000,000
S.I.P.G. Société Immobilière Pétrolière
de Gestion Snc
Sistema Integrado de Gestion
de Aceites Usados
Tanklager - Gesellschaft Tegel (TGT) GbR
TAR - Tankanlage Ruemlang AG
Tema Lube Oil Co Ltd
Tremblay-en-
France
(France)
Madrid
(Spain)
Hamburg
(Germany)
Ruemlang
(Switzerland)
Accra
(Ghana)
France
EUR
40,000
Spain
EUR
175,713
Germany
EUR
4,953
Switzerland
CHF
3,259,500
Ghana
GHS
258,309
Ecofuel SpA
Third parties
Eni France Sàrl
Third parties
Eni Iberia SLU
Third parties
Eni Deutsch. GmbH
Third parties
Eni Suisse SA
Third parties
Eni International BV
Third parties
)
*
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F.V.
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p
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%
12.50
87.50
13.38
86.62
16.81
83.19
18.00
82.00
12.50
87.50
10.00
90.00
12.50
87.50
15.45
84.55
12.50
87.50
16.27
83.73
12.00
88.00
(*) F.C. = full consolidation, J.O. = joint operation, Eq. = equity-accounted, Co. = valued at cost, F.V. = valued at fair value .
(a) Shares without nominal value.
Eni Annual Report 2021
Management report | Consolidated financial statements | Annex
Chemical
IN ITALY
y
n
a
p
m
o
C
e
m
a
n
e
c
ffi
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Novamont SpA
Novara
Italy
EUR
13,333,500
Versalis SpA
Third parties
385
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25.00
75.00
(*) F.C. = full consolidation, J.O. = joint operation, Eq. = equity-accounted, Co. = valued at cost, F.V. = valued at fair value.
386
CORPORATE AND OTHER ACTIVITIES
Other activities
IN ITALY
y
n
a
p
m
o
C
e
m
a
n
e
c
ffi
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r
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r
a
h
S
p
i
h
s
r
e
n
w
O
%
Ottana Sviluppo ScpA
(in bankruptcy)
Nuoro
Italy
EUR
516,000
Eni Rewind SpA
Third parties
30.00
70.00
)
*
(
d
o
h
t
e
m
n
o
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F.V.
(*) F.C. = full consolidation, J.O. = joint operation, Eq. = equity-accounted, Co. = valued at cost, F.V. = valued at fair value .
Eni Annual Report 2021
Management report | Consolidated financial statements | Annex
CHANGES IN THE SCOPE OF CONSOLIDATION FOR 2021
Fully consolidated subsidiaries
COMPANIES INCLUDED (No. 91)
4Energia Srl
Milan
Aldro Energía y Soluciones SLU
Torrelavega
Aleria Solar SAS
Alpinia Solar SLU
Argon SAS
Asian Compounds Ltd
Athies-Samoussy Solar PV1 SAS
Athies-Samoussy Solar PV2 SAS
Athies-Samoussy Solar PV3 SAS
Athies-Samoussy Solar PV4 SAS
Athies-Samoussy Solar PV5 SAS
Be Charge Srl
Be Charge Valle d'Aosta Srl
Be Power SpA
Belle Magiocche Solaire SAS
Bonete Solar SLU
Brazoria County Solar Project Llc
Camelia Solar SLU
CEF 3 Wind Energy SpA
Celtis Solar SLU
Desarrollos Empresariales Illas SL
Desarrollos Energéticos Riojanos SL
Dhamma Energy Development SAS
Dhamma Energy Group Sàrl
Dhamma Energy Management SLU
Dhamma Energy Rooftop SAS
Dhamma Energy SAS
Ecovent Parc Eolic SAU
Energias Alternativas Eolicas Riojanas SL
Energías Ambientales de Outes SLU
Eni España Comercializadora De Gas SAU
Bastia
Madrid
Argenteuil
Hong Kong
Argenteuil
Argenteuil
Argenteuil
Argenteuil
Argenteuil
Milan
Milan
Milan
Bastia
Madrid
Dover
Madrid
Milan
Madrid
Madrid
Villarcayo de Merindad de
Castilla la Vieja
Argenteuil
Dudelange
Madrid
Argenteuil
Argenteuil
Madrid
Logroño
Madrid
Madrid
Plenitude
Plenitude
Plenitude
Plenitude
Plenitude
Chemical
Plenitude
Plenitude
Plenitude
Plenitude
Plenitude
Plenitude
Plenitude
Plenitude
Plenitude
Plenitude
Plenitude
Plenitude
Plenitude
Plenitude
Plenitude
Plenitude
Plenitude
Plenitude
Plenitude
Plenitude
Plenitude
Plenitude
Plenitude
Plenitude
387
Acquisition
Acquisition
Acquisition
Acquisition
Acquisition
Acquisition of the control
Acquisition
Acquisition
Acquisition
Acquisition
Acquisition
Acquisition
Acquisition
Acquisition
Acquisition
Acquisition
Acquisition
Acquisition
Acquisition
Acquisition
Acquisition
Acquisition
Acquisition
Acquisition
Acquisition
Acquisition
Acquisition
Acquisition
Acquisition
Acquisition
Eni Natural Energies SpA
San Donato Milanese
Exploration & Production
Constitution
Eni New Energy US Holding Llc
Eni New Energy US Investing Inc
Eni North Sea Wind Ltd
Dover
Dover
London
Plenitude
Plenitude
Plenitude
Constitution
Constitution
Relevancy
Global Gas & LNG Portfolio
Acquisition
388
EniBioCh4in Alexandria Srl Società Agricola
San Donato Milanese
Refining & Marketing
EniBioCh4in Annia Srl Società Agricola
San Donato Milanese
Refining & Marketing
EniBioCh4in Appia Srl Società Agricola
San Donato Milanese
Refining & Marketing
EniBioCh4in Aprilia Srl
San Donato Milanese
Refining & Marketing
EniBioCh4in Briona Srl Società Agricola
San Donato Milanese
Refining & Marketing
EniBioCh4in Calandre Energia Srl Società
Agricola
San Donato Milanese
Refining & Marketing
EniBioCh4in Gardillana Società Agricola Srl
San Donato Milanese
Refining & Marketing
EniBioCh4in Grupellum Società Agricola Srl
San Donato Milanese
Refining & Marketing
EniBioCh4in Jonica Srl
San Donato Milanese
Refining & Marketing
EniBioCh4in Maddalena Società Agricola Srl
San Donato Milanese
Refining & Marketing
EniBioCh4in Medea Srl Società Agricola
San Donato Milanese
Refining & Marketing
EniBioCh4in Momo Società Agricola Srl
San Donato Milanese
Refining & Marketing
EniBioCh4in Mortara Società Agricola Srl
San Donato Milanese
Refining & Marketing
EniBioCh4in Pannellia BioGas Srl Società
Agricola
San Donato Milanese
Refining & Marketing
EniBioCh4in Plovera Società Agricola Srl
San Donato Milanese
Refining & Marketing
EniBioCh4in Quadruvium Srl Società Agricola
San Donato Milanese
Refining & Marketing
EniBioCh4in Rhodigium Società Agricola Srl
San Donato Milanese
Refining & Marketing
EniBioCh4in San Benedetto Po Srl Società
Agricola
San Donato Milanese
Refining & Marketing
EniBioCh4in Service BioGas Srl
San Donato Milanese
Refining & Marketing
EniBioCh4in Società Agricola Il Bue Srl
San Donato Milanese
Refining & Marketing
EniBioCh4in SpA
San Donato Milanese
Refining & Marketing
EniBioCh4in Vigevano Srl Società Agricola
San Donato Milanese
Refining & Marketing
San Donato Milanese
Refining & Marketing
EniBioCh4in Villacidro Agricole Società
Agricola a responsabilità limitata
Eolica Lucana Srl
Estanque Redondo Solar SLU
Finpower Wind Srl
Finproject Asia Ltd
Milan
Madrid
Milan
Hong Kong
Finproject Brasil Industria De Solados Eireli
Franca
Finproject Guangzhou Trading Co Ltd
Guangzhou
Finproject India Pvt Ltd
Finproject Romania Srl
Finproject Singapore Pte Ltd
Finproject SpA
Finproject Viet Nam Company Limited
Foam Creations (2008) Inc
Foam Creations México SA de CV
Green Energy Management Services Srl
Holding Lanas Solar Sàrl
Instalaciones Martínez Díez SLU
Ixia Solar SLU
Jaipur
Valea Lui Mihai
Singapore
Morrovalle
Hai Phong
Quebec City
León
Rome
Argenteuil
Torrelavega
Madrid
Plenitude
Plenitude
Plenitude
Chemical
Chemical
Chemical
Chemical
Chemical
Chemical
Chemical
Chemical
Chemical
Chemical
Plenitude
Plenitude
Plenitude
Plenitude
Acquisition
Acquisition
Acquisition
Acquisition
Acquisition
Acquisition
Acquisition
Acquisition
Acquisition
Acquisition
Acquisition
Acquisition
Acquisition
Acquisition
Acquisition
Acquisition
Acquisition
Acquisition
Acquisition
Acquisition
Acquisition
Acquisition
Acquisition
Acquisition
Acquisition
Acquisition
Acquisition of the control
Acquisition of the control
Acquisition of the control
Acquisition of the control
Acquisition of the control
Acquisition of the control
Acquisition of the control
Acquisition of the control
Acquisition of the control
Acquisition of the control
Acquisition
Acquisition
Acquisition
Acquisition
Eni Annual Report 2021 Management report | Consolidated financial statements | Annex
Krypton SAS
Lanas Solar SAS
Membrio Solar SLU
Olea Solar SLU
Opalo Solar SLU
Argenteuil
Argenteuil
Madrid
Madrid
Madrid
Padanaplast America Llc
Wilmington
Padanaplast Deutschland GmbH
Hannover
Padanaplast Srl
Pistacia Solar SLU
Po' Energia Srl Società Agricola
POP Solar SAS
Roccabianca
Madrid
Bolzano
Argenteuil
Società Energie Rinnovabili 1 SpA
Rome
Società Energie Rinnovabili SpA
Tebar Solar SLU
Xenon SAS
Zinnia Solar SLU
Palermo
Madrid
Argenteuil
Madrid
Plenitude
Plenitude
Plenitude
Plenitude
Plenitude
Chemical
Chemical
Chemical
Plenitude
Refining & Marketing
Plenitude
Plenitude
Plenitude
Plenitude
Plenitude
Plenitude
389
Acquisition
Acquisition
Acquisition
Acquisition
Acquisition
Acquisition of the control
Acquisition of the control
Acquisition of the control
Acquisition
Acquisition
Acquisition
Acquisition
Acquisition
Acquisition
Acquisition
Acquisition
COMPANIES EXCLUDED (No. 5)
Eni Hydrocarbons Venezuela Ltd
Eni Trading & Shipping SpA
(in liquidation)
London
Rome
Exploration & Production
Irrelevancy
Global Gas & LNG Portfolio
Irrelevancy
Eni Ukraine Holdings BV
Amsterdam
Exploration & Production
Irrelevancy
Evolvere Smart Srl
Llc "Eni Energhia"
Milan
Moscow
Plenitude
Cancellation
Exploration & Production
Irrelevancy
Consolidated joint operations
COMPANIES INCLUDED (No. 2)
SEGAS Services SAE
Damietta LNG (DLNG) SAE
Damietta
Damietta
Global Gas & LNG Portfolio
Acquisition of joint control
Global Gas & LNG Portfolio
Acquisition of joint control
COMPANIES EXCLUDED (No. 1)
Mozambique Rovuma Venture SpA
San Donato Milanese
Exploration & Production
Change of the joint
arrangement
390
Independent auditor’s report on the consolidated
non-financial statement
Eni Annual Report 2021 Management report | Consolidated financial statements | Annex
391
392
Eni Annual Report 2021 Management report | Consolidated financial statements | Annex
393
394
Independent auditor’s report on the consolidated financial
statements
Independent auditor’s report
in accordance with article 14 of Legislative Decree No. 39 of
January 27, 2010 and article 10 of Regulation (EU) No. 537/2014
Eni SpA
Consolidated Financial Statements as of
December 31 2021
Eni Annual Report 2021
Management report | Consolidated financial statements | Annex
395
Independent auditor’s report
in accordance with article 14 of Legislative Decree No. 39 of 27 January 2010 and article 10 of
Regulation (EU) No. 537/2014
To the shareholders of
Eni SpA
Report on the Audit of the Consolidated Financial Statements
Opinion
We have audited the consolidated financial statements of Eni Group (the Group), which comprise the
consolidated balance sheet as of December 31, 2021, the consolidated profit and loss account, the
consolidated statement of comprehensive income, the consolidated statement of changes in equity, the
consolidated statement of cash flows for the year then ended, and notes to the consolidated financial
statements, including a summary of significant accounting policies.
In our opinion, the consolidated financial statements give a true and fair view of the financial position
of the Group as of December 31, 2021, and of the result of its operations and cash flows for the year
then ended in accordance with International Financial Reporting Standards as adopted by the
European Union, as well as with the regulations issued to implement article 9 of Legislative Decree
No. 38/05.
Basis for Opinion
We conducted our audit in accordance with International Standards on Auditing (ISA Italia).
Our responsibilities under those standards are further described in the Auditor’s Responsibilities for
the Audit of the Consolidated Financial Statements section of this report. We are independent of Eni
SpA (the Company) pursuant to the regulations and standards on ethics and independence applicable
to audits of financial statements under Italian law. We believe that the audit evidence we have
obtained is sufficient and appropriate to provide a basis for our opinion.
Key Audit Matters
Key audit matters are those matters that, in our professional judgement, were of most significance in
our audit of the consolidated financial statements of the current period. These matters were addressed
in the context of our audit of the consolidated financial statements as a whole, and in forming our
opinion thereon, and we do not provide a separate opinion on these matters.
396
Key Audit Matters
Evaluation of hydrocarbon reserves,
measurement of mineral assets and of
other financial statement line items
related thereto
Note 1 “Significant accounting policies, estimates
and judgements”, Note 12 “Property, plant and
equipment”, Note 13 “Right-of-use assets and
lease liabilities”, Note 14 “Intangible assets”, Note
15 “Impairment review of tangible and
intangible assets and right-of-use assets”, Note
16 “Investments” and Note 21 “Provisions” of the
consolidated financial statements
The items “Property, plant and equipment”,
“Right-of-use assets” and “Intangible assets”
include significant amounts related to mineral
assets, more specifically referring to mineral
exploitation wells and plant of the Exploration &
Production (E&P) segment in an amount of Euro
42,342 million, E&P exploration assets and
appraisal amounting to Euro 1,244 million, E&P
tangible assets in progress equal to Euro 6,545
million, Right-of-use assets amounting to Euro
3,195 million, Exploration rights in an amount of
Euro 913 million.
The carrying amount of the mineral assets also
comprises estimated costs for site restoration and
abandonment and social projects, the provision of
which amounted to Euro 8,580 million at
December 31, 2021.
Furthermore, the Group holds investments in the
E&P segment, accounted for with the equity
method, for a total amount of Euro 2,639 million
at December 31, 2021.
Mineral assets are depreciated according to the
unit of production method (also UOP method)
based on the units produced during the year and
the estimated hydrocarbon reserves that can be
produced. At December 31, 2021 depreciation of
mineral assets related to the E&P segment
amounted to Euro 5,976 million.
Auditing procedures performed in
response to key audit matters
Our audit procedures consisted in the
comprehension, assessment and verification
of the operating efficacy of relevant controls
implemented by management in respect of
the measurement of hydrocarbon reserves,
the measurement of mineral assets, of
investments in the E&P segment accounted
for under the equity method and of other
additional financial statement items related
thereto.
The audit procedures on the estimate of the
hydrocarbon reserves included, inter alia, the
analysis of the movements in reserves during
the year also compared to the year in which
these reserves were set up, an understanding
of the main assumptions and verification of
their reasonableness.
With reference to the estimate of
abandonment costs, the following additional
audit procedures were also carried out:
(i) We obtained an understanding of the
legislative and regulatory framework
and of the underlying mineral
arrangements;
(ii) We compared the costs and related
times of expenses at year-end with the
previous year’s forecasts and, when
significant, we investigated the
differences identified and we also
verified the consistency of the expected
2 of 7
Eni Annual Report 2021
Management report | Consolidated financial statements | Annex
397
Key Audit Matters
At year-end mineral assets recognised in the
consolidated financial statements are tested for
impairment, if changes or circumstances have
highlighted that (i) their carrying value may no
longer be recoverable and/or (ii) impairments
recognised in previous years have ceased to
obtain or their amount has changed. The
recoverable amount of mineral assets is generally
taken as being equal to their value in use and
determined discounting the expected future cash
flows from the use of the assets.
As at December 31, 2021 net reversals related to
the mineral assets of the E&P segment, marked by
the upside in hydrocarbon prices expected in the
short/medium term, amounted to Euro 1,244
million.
The estimate of hydrocarbon reserves and the
determination of the value of mineral assets and
of the related items are based on a series of
factors, assumptions and variables, such as:
(i)
(ii)
accuracy of the estimate of the reserves
which depends on the quality of the
available geological, technical and economic
data, as well as the related interpretation
and evaluation by the Group’ internal and
external experts;
the estimate of future production units and
related flows of operating income and
expense, of development and abandonment
costs, as well as the timing these costs are
incurred;
(iii) long-term price projections of
hydrocarbons, which include the possible
impacts linked to the energy transition,
reflected in the 2022 – 2025 Strategic Plan,
and which management considers to be
consistent with the goals of the 2015 Cop21
Paris Agreement on climate and reasserted
by the Cop26 summit in Glasgow;
(iv) changes in the tax legislation, in
(v)
administrative regulations and changes in
the underlying contract types;
the production of oil and natural gas
extracted and subsequent reservoir analyses,
which can entail significant revisions; and
Auditing procedures performed in
response to key audit matters
expenses and times in comparison with
actual data.
Regarding the valuation of Exploration rights
and Exploration activities and E&P appraisal,
we discussed the prospects of the main
exploration projects with management, for
which we verified the consistency with the
planned investment provided in the Group’s
forecast plans including, among others, the
achievement of the decarbonization targets
set by the Group.
The audit procedures relating to depreciation
and amortization also included verifying the
use of the UOP rates resulting from the
valuation of the reserves and re-calculations,
on a sample basis, of
amortization/depreciation charges.
With regard to the impairment test the
following additional audit procedures were
also carried out:
(i) We verified the consistency of the
method used by the Group with the
requirements of IAS 36 and particularly
the appropriateness of the cash flows
used and related consistency with the
Group’s forecast plans;
(ii) For a sample of CGUs, we verified the
reasonableness of the assumptions used
by management to estimate cash flows
and we checked they were in line with
the estimated reserves and site
abandonment and restoration costs;
(iii) We verified the sensitivity analysis
performed by the Group.
We evaluated the technical expertise and
objectivity of the Group’s internal and
external experts involved in the valuation
process, as well as the methods used by them.
Our Valuation & Economics experts and those
of the Enterprise Risk Management function
supported us in the verification of the
3 of 7
398
Key Audit Matters
(vi) the discount rate used.
We paid special attention to the risk of incorrect
quantification of the estimates carried out by
management in relation to the valuation of
hydrocarbon reserves and the measurement of
mineral assets and the other financial statement
line items related thereto considering (i) the high
degree of uncertainty of the estimates and
measurements (ii) the technical complexity of the
valuation models used and (iii) the materiality of
the related financial statement line items.
Auditing procedures performed in
response to key audit matters
consistency of the assumptions contained in
the 2022 – 2025 Strategic Plan with the
changed macroeconomic perspectives of the
E&P segment, also in relation to the effects of
the post-COVID-19 rally in demand for
hydrocarbons, and in particular (i) the
examination of the different valuation models
used, (ii) the verification of the methods
adopted to estimate a sample of
medium/long-term prices of commodities
including the verification of the consistency of
such prices with the most recent market
consensus, (iii) the verification of inflation
rates, also in comparison with the market
prices and those expressed by sector analysts
and (iv) the examination of the different
discount rates adopted.
Finally, we verified the disclosures provided
in the notes to the financial statements on all
the above-reported matters relating to
mineral assets and the other financial
statement line items related thereto, as well
as their consistency, where applicable, with
the information contained in the consolidated
non-financial statement on the achievement
of carbon neutrality and the related climate
risks.
Responsibilities of the Directors and the Board of Statutory Auditors for the
Consolidated Financial Statements
The directors are responsible for the preparation of consolidated financial statements that give a true
and fair view in accordance with International Financial Reporting Standards as adopted by the
European Union, as well as with the regulations issued to implement article 9 of Legislative Decree
No. 38/05 and, in the terms prescribed by law, for such internal control as they determine is necessary
to enable the preparation of consolidated financial statements that are free from material
misstatement, whether due to fraud or error.
The directors are responsible for assessing the Group’s ability to continue as a going concern and, in
preparing the consolidated financial statements, for the appropriate application of the going concern
basis of accounting, and for disclosing matters related to going concern. In preparing the consolidated
financial statements, the directors use the going concern basis of accounting unless they either intend
to liquidate Eni SpA or to cease operations or have no realistic alternative but to do so.
The board of statutory auditors is responsible for overseeing, in the terms prescribed by law, the
Group’s financial reporting process.
4 of 7
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Management report | Consolidated financial statements | Annex
399
Auditor’s Responsibilities for the Audit of the Consolidated Financial Statements
Our objectives are to obtain reasonable assurance about whether the consolidated financial statements
as a whole are free from material misstatement, whether due to fraud or error, and to issue an
auditor’s report that includes our opinion. Reasonable assurance is a high level of assurance but is not
a guarantee that an audit conducted in accordance with International Standards on Auditing (ISA
Italia) will always detect a material misstatement when it exists. Misstatements can arise from fraud or
error and are considered material if, individually or in the aggregate, they could reasonably be
expected to influence the economic decisions of users taken on the basis of the consolidated financial
statements.
As part of our audit conducted in accordance with International Standards on Auditing (ISA Italia), we
exercised professional judgement and maintained professional scepticism throughout the audit.
Furthermore:
●
●
●
●
●
●
We identified and assessed the risks of material misstatement of the consolidated financial
statements, whether due to fraud or error; we designed and performed audit procedures
responsive to those risks; we obtained audit evidence that is sufficient and appropriate to
provide a basis for our opinion. The risk of not detecting a material misstatement resulting
from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery,
intentional omissions, misrepresentations, or the override of internal control;
We obtained an understanding of internal control relevant to the audit in order to design audit
procedures that are appropriate in the circumstances, but not for the purpose of expressing an
opinion on the effectiveness of the Group’s internal control;
We evaluated the appropriateness of accounting policies used and the reasonableness of
accounting estimates and related disclosures made by the directors;
We concluded on the appropriateness of the directors’ use of the going concern basis of
accounting and, based on the audit evidence obtained, whether a material uncertainty exists
related to events or conditions that may cast significant doubt on the Group’s ability to
continue as a going concern. If we conclude that a material uncertainty exists, we are required
to draw attention in our auditor’s report to the related disclosures in the consolidated financial
statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are
based on the audit evidence obtained up to the date of our auditor’s report. However, future
events or conditions may cause the Group to cease to continue as a going concern;
We evaluated the overall presentation, structure and content of the consolidated financial
statements, including the disclosures, and whether the consolidated financial statements
represent the underlying transactions and events in a manner that achieves fair presentation.
We obtained sufficient appropriate audit evidence regarding the financial information of the
entities or business activities within the Group to express an opinion on the consolidated
financial statements. We are responsible for the direction, supervision and performance of the
group audit. We remain solely responsible for our audit opinion on the consolidated financial
statements.
We communicated with those charged with governance, identified at an appropriate level as required
by ISA Italia regarding, among other matters, the planned scope and timing of the audit and
significant audit findings, including any significant deficiencies in internal control that we identified
during our audit.
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We also provided those charged with governance with a statement that we complied with the
regulations and standards on ethics and independence applicable under Italian law and communicated
with them all relationships and other matters that may reasonably be thought to bear on our
independence, and where applicable, related safeguards.
From the matters communicated with those charged with governance, we determined those matters
that were of most significance in the audit of the consolidated financial statements of the current
period and are therefore the key audit matters. We described these matters in our auditor’s report.
Additional Disclosures required by Article 10 of Regulation (EU) No. 537/2014
On May 10, 2018, the shareholders of Eni SpA in general meeting engaged us to perform the statutory
audit of the Company’s and the consolidated financial statements for the years ending December 31,
2019, to December 31, 2027.
We declare that we did not provide any prohibited non-audit services referred to in article 5,
paragraph 1, of Regulation (EU) No. 537/2014 and that we remained independent of the Company in
conducting the statutory audit.
We confirm that the opinion on the consolidated financial statements expressed in this report is
consistent with the additional report to the board of statutory auditors, in its capacity as audit
committee, prepared pursuant to article 11 of the aforementioned Regulation.
Report on Compliance with other Laws and Regulations
Opinion on compliance with the provisions of Commission Delegated Regulation (EU)
2019/815
The directors of Eni SpA are responsible for the application of the provisions of Commission Delegated
Regulation (EU) 2019/815 concerning regulatory technical standards on the specification of a single
electronic reporting format (ESEF - European Single Electronic Format) (hereinafter, the
“Commission Delegated Regulation”) to the consolidated financial statements, to be included in the
annual report.
We have performed the procedures specified in auditing standard (SA Italia) No. 700B in order to
express an opinion on the compliance of the consolidated financial statements with the provisions of
the Commission Delegated Regulation.
In our opinion, the consolidated financial statements have been prepared in XHTML format and have
been marked up, in all significant respects, in compliance with the provisions of the Commission
Delegated Regulation.
Opinion in accordance with Article 14, paragraph 2, letter e), of Legislative Decree
No. 39/10 and Article 123-bis, paragraph 4, of Legislative Decree No. 58/98
The directors of Eni SpA are responsible for preparing a report on operations and a report on the
corporate governance and ownership structure of the Eni Group as of December 31, 2021, including
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Eni Annual Report 2021
Management report | Consolidated financial statements | Annex
401
their consistency with the relevant consolidated financial statements and their compliance with the
law.
We have performed the procedures required under auditing standard (SA Italia) No. 720B in order to
express an opinion on the consistency of the report on operations and of the specific information
included in the report on corporate governance and ownership structure referred to in article 123-bis,
paragraph 4, of Legislative Decree No. 58/98, with the consolidated financial statements of the Eni
Group as of December 31, 2021, and on their compliance with the law, as well as to issue a statement
on material misstatements, if any.
In our opinion, the report on operations and the specific information included in the report on
corporate governance and ownership structure mentioned above are consistent with the consolidated
financial statements of Eni Group as of December 31, 2021 and are prepared in compliance with the
law.
With reference to the statement referred to in article 14, paragraph 2, letter e), of Legislative Decree
No. 39/10, issued on the basis of our knowledge and understanding of the Company and its
environment obtained in the course of the audit, we have nothing to report.
Statement in accordance with article 4 of Consob’s Regulation implementing
Legislative Decree No. 254 of 30 December 2016
The directors of Eni SpA are responsible for the preparation of the non-financial statement pursuant to
Legislative Decree No. 254 of 30 December 2016.
We have verified that the directors approved the non-financial statement.
Pursuant to article 3, paragraph 10, of Legislative Decree No. 254 of 30 December 2016, the non-
financial statement is the subject of a separate statement of compliance issued by ourselves.
Rome, April 8, 2022
PricewaterhouseCoopers SpA
Signed by
Massimo Rota
(Partner)
As disclosed by the Directors, the accompanying consolidated financial statements of Eni SpA
constitute a non-official version which is not compliant with the provisions of the Commission
Delegated Regulation (EU) 2019/815. This independent auditor’s report has been translated into the
English language solely for the convenience of international readers. Accordingly, only the original
text in Italian language is authoritative.
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Mission
We are an energy company.
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We concretely support a just energy transition,
with the objective of preserving our planet
9
Our work is based on passion and innovation,
on our unique strengths and skills,
5 10
on the equal dignity of each person,
7 12
and promoting an efficient and sustainable access to energy for all.
recognizing diversity as a key value for human development,
on the responsibility, integrity and transparency of our actions.
17
We believe in the value of long-term partnerships with the Countries
and communities where we operate, bringing long-lasting prosperity for all.
Global goals for a sustainable development
The 2030 Agenda for Sustainable Development, presented in September 2015, identifies the 17
Sustainable Development Goals (SDGs) which represent the common targets of sustainable develop-
ment on the current complex social problems. These goals are an important reference for the internatio-
-
-
nal community and Eni in managing activities in those Countries in which it operates.
Eni
2021
Relazione Finanziaria Annuale
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