28 Provisions for contingencies

Provisions for site restoration, abandonment and social projects amounted to €6,902 million. Those provisions comprised the discounted estimated costs that the Company expects to incur for decommissioning oil and natural gas production facilities at the end of the producing lives of fields, well-plugging, abandonment and site restoration (€6,534 million). Initial recognition and changes in estimates amounted to €191 million and were primarily due to estimates’ revisions of decommissioning costs, changes in discount rates and new liabilities of the year in the Exploration & Production segment. The accreation discount recognized in the profit and loss account for €241 milllion was determined by adopting discount rates ranging from 0.7% to 9.4% (from 1.4% to 9.3% at December 31, 2012). Main expenditures associated with site restoration and decommissioning operations are expected to be incurred over a 30-year period starting from 2017.

Provisions for environmental risks amounted to €2,862 million. Those provisions comprised the estimated costs for environmental clean-up and restoration of certain industrial sites which were owned or held in concession by the Company, and subsequently divested, shut-down or liquidated. 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 perform certain cleaning-up and restoration projects and a reliable cost estimation is available. At December 31, 2013, provisions for environmental risks primarily related to Syndial SpA (€2,353 million) and the Refining & Marketing segment (€381 million). Additions of €158 million primarily related to the Refining & Marketing segment (€75 million) and Syndial SpA (€62 million). Utilizations of €182 million primarily related to Syndial SpA (€96 million) and the Refining & Marketing segment (€66 million).

Provisions for legal and other proceedings of €860 million comprised the expected liabilities due to failure to perform certain contractual obligations and estimated future losses on pending litigation including legal risks of liability, antitrust proceedings, administrative matters and commercial arbitration proceedings. These provisions represented the Company’s best estimate of the expected probable liabilities associated with pending litigation and commercial proceedings and primarily related to the Gas & Power segment (€440 million) and Syndial SpA (€157 million). Additions and utilizations of €431 million and €781 million, respectively, mainly related to the Gas & Power segment and were recognized to take account of gas price revisions at both long-term supply and sale contracts, including the settlement of certain arbitrations. Reversals of unutilized provision of €209 million were primarily made by the Gas & Power segment.

Provisions for taxes of €477 million included the estimated charges that the Company expects to incur for unsettled tax claims in connection with uncertainties in the application of tax rules at certain Italian and foreign subsidiaries in the Exploration & Production segment (€396 million) and the Engineering & Construction segment (€55 million).

Provisions for redundancy incentives of €407 million were recognized due to a restructuring program involving the Italian personnel for the period 2010-2011 and 2013-2014 in compliance with Law No. 223/1991. Additions of €251 million related to the restructuring program for the period 2013-2014.

Provisions for onerous contracts of €372 million related to the execution of contracts where the expected costs exceed the relevant benefits. In particular, the provision comprised the estimated expected losses on a re-gasification project in the United States and on an unutilized infrastructure for gas transportation.

Loss adjustments and actuarial provisions of Eni’s insurance company Eni Insurance Ltd of €358 million represented the estimated liabilities accrued on the basis for third parties claims. Against such liability was recorded a receivable of €152 million recognized towards insurance companies for reinsurance contracts.

Provisions for green certificates of €275 million included additional charges that electric power producers must sustain for using non-renewable sources of energy.

Provisions for losses on investments of €177 million were made with respect to certain investees for which expected or incurred losses exceeded carrying amounts.

Provisions for disposal and restructuring of €96 million essentially related to the Versalis segment (€56 million) and Syndial SpA (€28 million).

Provisions for the Oil mutual insurance scheme of €93 million included the estimated future increase of insurance premiums which will be charged to Eni in the next five years and that accrued at the reporting date because of the effective accident rate occurred in past reporting periods.

Provisions for long-term construction contracts of €83 million related to the Engineering & Construction segment.