21 Other non-current receivables

Receivables originated from divestments amounted to €702 million (€752 million at December 31, 2012) and included: (i) the residual outstanding amount of €166 million recognized following the compensation agreed with the Republic of Venezuela for the expropriated Dación oilfield in 2006. The receivable accrues interests at market conditions as the collection has been fractionated in instalments. In 2013, reimbursements amounted to €68 million (US $90 million). Negotiations for further compensations are ongoing; (ii) the long-term portion of a receivable of €341 million related to the divestment of the 1.71% interest in the Kashagan project to the local partner KazMunaiGas on the basis of the agreements defined with the international partners of the North Caspian Sea PSA and the Kazakh government, which became effective from January 1, 2008. The reimbursement of the receivable is provided for in three annual instalments starting from the date when the production will reach a commercial level. The receivable accrues interest income at market rates; (iii) the long-term portion of a receivable of €46 million related to the divestment of the 3.25% interest in the Karachaganak project (equal to the Eni’s 10% interest) to the Kazakh partner KazMunaiGas as part of an agreement reached in December 2011 between the Contracting Companies of the Final Production Sharing Agreement (FPSA) and Kazakh Authorities which settled disputes on the recovery of the costs incurred by the International Consortium to develop the field, as well as a certain tax claims. The agreement, effective from June 28, 2012, entailed a net cash consideration to Eni, to be paid in cash in three years through monthly instalments starting in July 2012. The receivable accrues interest income at market rates. In 2013, reimbursements amounted to €82 million. The short-term portion is disclosed in Note 10 – Trade and other receivables.

Receivables with related parties are described in Note 43 – Transactions with related parties.

The fair value of non-hedging derivative contracts was as follows:

Derivative fair values are calculated basing on market quotations provided by primary info-provider, or in the absence of market information, appropriate valuation techniques generally adopted in the marketplace.

Fair values of non-hedging derivatives of €256 million (€429 million at December 31, 2012) consisted of derivatives that did not meet the formal criteria to be designated as hedges under IFRS because they were entered into in order to manage net exposures to foreign currency exchange rates, interest rates and commodity prices. Therefore, such derivatives did not relate to specific trade or financing transactions.

Fair value of cash flow hedge derivatives of €6 million (€2 million at December 31, 2012) related to hedges entered by the Gas & Power segment. Further information is disclosed in Note 14 – Other current assets. Fair value related to the contracts expiring beyond 2014 is disclosed in Note 31 – Other non-current liabilities; fair value related to the contracts expiring in 2014 is disclosed in Note 14 – Other current assets and in Note 26 – Other current liabilities. The effects of fair value evaluation of cash flow hedges are disclosed in Note 33 – Shareholders’ equity and Note 37 – Operating expenses.

Nominal values of cash flow hedge derivatives for sale commitments were €132 million (purchase and sale commitments of €21 million and €60 million at December 31, 2012, respectively).

Information on the hedged risks and the hedging policies is disclosed in Note 35 – Guarantees, commitments and risks – Risk factors.

Other non-current asset amounted to €2,106 million (€2,563 million at December 31, 2012), of which €1,892 million (€2,367 million at December 31, 2012) were deferred costs relating to the obligation to pay in advance the contractual price of the volumes which the Company failed to collect up to the minimum contractual take in order to fulfil the take-or-pay clause provided by the relevant long-term supply contracts (see Other payables of Note 23 – Trade and other payables). The reduction from the previous year is due to the collection of a part of the prepaid volumes as a consequence of the benefits deriving from the renegotiations that ensured improved flexibility. Those prepayments were classified as non-current assets, as the Company plans to collect the prepaid quantities beyond the term of 12 months. In accordance with those arrangements, the Company is contractually required to collect minimum annual quantities of gas, or in case of failure, is contractually obliged to pay the whole price or a fraction of it for the uncollected volumes up to the minimum annual quantity. The Company is entitled to collect the prepaid volumes in future years alongside contract execution, up to contract expiration or in a shorter term as the case may be. Those deferred costs, which are equivalent to a receivable in-kind, are stated at the purchase cost or the net realizable value, whichever is lower. Prior-years impairment losses are reversed up to the purchase cost, whenever market conditions indicate that impairment no longer exits or may have decreased. The amount of pre-paid volumes reflects ongoing weak market conditions in the European gas sector due to declining demand and strong competitive pressures fuelled by oversupplies. Those trends prevented Eni from fulfilling its minimum take obligations associated with its gas supply contracts. Management plans to recover those pre-paid volumes over the long-term by leveraging on a projected sales expansion in target European Markets and in Italy supported by the Company’s strengthening market leadership and improved competitiveness of the Company’s cost position considering the expected benefits of ongoing and planned contract renegotiations and the expected benefits associated with the reduction of minimum take quantities in future years and other operating flexibilities (i.e. changes in delivery points and LNG supplies in place of those by pipeline) which the Company plans to achieve as a result of ongoing and planned contract renegotiations, including the non renewing of expiring contracts.