43 Transactions with related parties

In the ordinary course of its business Eni enters into transactions regarding:

1. exchanges of goods, provision of services and financing with joint ventures, associates and non-consolidated subsidiaries;
2. exchanges of goods and provision of services with entities controlled by the Italian Government;
3. contributions to entities with a non-company form 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 research and development; (ii) Eni Enrico Mattei Foundation established by Eni with the aim of enhancing, through studies, research and training initiatives, knowledge 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 with the aim to develop solidarity, culture and research initiatives, on arm’s length basis.

Trade and other transactions with related parties

Most significant transactions with joint ventures, associates and unconsolidated subsidiaries concerned:

• sale of gas outside Italy to EnBW Eni Verwaltungsgesellschaft mbH and Unión Fenosa Gas Comercializadora SA;
• provisions of specialized services in upstream activities and Eni’s share of expenses incurred to develop oil fields from Agiba Petroleum Co, Agip Kazakhstan North Caspian Operating Co NV, Karachaganak Petroleum Operating BV, Mellitah Oil & Gas BV, Petrobel Belayim Petroleum Co and, only with Karachaganak Petroleum Operating BV, purchase of oil products and with Agip Kazakhstan North Caspian Operating Co NV, provisions of services by the Engineering & Construction segment; services charged to Eni’s associates are invoiced on the basis of incurred costs;
• payments for refining services to Bayernoil Raffineriegesellschaft mbH and Raffineria di Milazzo ScpA on the basis of incurred costs;
• acquisition of natural gas transport services outside Italy from Blue Stream Pipeline Co BV and GreenStream BV;
• supply of oil products from Raffineria di Milazzo ScpA on the basis of prices referred to the quotations on international oil markets, as they would be conducted on an arm’s length basis;
• transactions related to the planning and the construction of the tracks for high speed/high capacity trains from Milan to Bologna with CEPAV (Consorzio Eni per l’Alta Velocità) Uno and related guarantees;
• transactions related to the planning and the construction of the tracks for high speed/high capacity trains from Milan to Verona with CEPAV (Consorzio Eni per l’Alta Velocità) Due;
• transactions with InAgip doo related to the redetermination of the interest in an offshore field located in the Adriatic Sea;
• planning, construction and technical assistance to support by KWANDA – Suporte Logistico Lda and Petromar Lda;
• guarantees issued on behalf of Petromar Lda and Saipon Snc in relation to contractual commitments related to the execution of project planning and realization;
• mainly dividends receivables to be cashed in from PetroSucre SA;
• supply of petrochemical products from Supermetanol CA on the basis of prices referred to the quotations on international markets;
• performance guarantees given on behalf of Unión Fenosa Gas SA in relation to contractual commitments related to the results of operations and sales of LNG;
• guarantees issued in relation to the construction of an oil pipeline on behalf of Eni BTC Ltd;
• services for the environmental restoration to Industria Siciliana Acido Fosforico – ISAF – SpA (in liquidation).

The most significant transactions with entities controlled by the Italian Government concerned:

• sale of fuel oil, sale and purchase of electricity, acquisition of electricity transmission services and fair value of derivative financial instruments with Enel Group;
• a long-term contract for the maintenance at the Group’s combined-cycle power plants with Finmeccanica Group;
• acquisition of natural gas transportation, distribution and storage services from Snam Group on the basis of tariffs set by the Authority for Electricity and Gas;
• supply of natural gas to Snam Group on the basis of prices referred to the quotations of the main energy commodities, as they would be conducted on an arm’s length basis;
• sale and purchase of electricity and green certificates with GSE – Gestore Servizi Energetici;
• sale and purchase of electricity, the acquisition of domestic electricity transmission service and the fair value of derivative financial instruments included in the prices of electricity related to sale/purchase transactions with Terna Group.

Transactions with pension funds and foundation concerned:

• provisions to pension funds for €41 million;
• contributions to Eni Foundation for €10 million and to Eni Enrico Mattei Foundation for €4 million.

Financing transactions with related parties

Most significant transactions with joint ventures, associates and unconsolidated subsidiaries concerned:

• a cash deposit at Eni’s financial companies on behalf of Blue Stream Pipeline Co BV and Unión Fenosa Gas SA;
• bank debt guarantees issued on behalf of CEPAV (Consorzio Eni per l’Alta Velocità) Due and Raffineria di Milazzo ScpA;
• financing loans granted to Bayernoil Raffineriegesellschaft mbH for capital expenditures in refining plants, to CARDÓN IV SA for the exploration and development activities of a gas field and to Société Centrale Electrique du Congo SA for the construction of an electric plant in Congo;
• financing loans granted to GreenStream BV for the construction of natural gas transmission facilities and transport services;
• financing loans granted to Matrica SpA in relation to the “Green Chemistry” project at the Porto Torres plant;
• financing loans granted to Shatskmorneftegaz Sarl in relation to exploration activities in the Black Sea.

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 consisted of the following:

The impact of transactions with related parties on the profit and loss accounts consisted of the following:

Transactions with related parties were part of the ordinary course of Eni’s business and were mainly conducted on an arm’s length basis.

Main cash flows with related parties are provided below:

The impact of cash flows with related parties consisted of the following: