Eni’s strategy

The 2013 results were achieved in a scenario of increased political instability in certain Countries with Eni’s presence in upstream and difficult conditions in the European midstream and downstream markets, particularly in Italy, affected by demand downturn in the challenging competitive environment characterized by lack of profitability.

In order to tackle with this scenario, management has planned a number of actions that are intended to help the Company to achieve robust performances, against cautious assumptions about the external context whereby we do not anticipate any meaningful improvement in market conditions and have projected flat production profiles in the Company’s main Countries at risk of political instability (Libya, Nigeria and Algeria).

Eni set-up its Action Plan on the base of the following strategic guidelines:

• growth in the upstream supported by monetization of non-core exploration assets;
• continuous engagement in rationalization, rightsizing and modernization in the mid and downstream European markets where Eni is present, selective development of activities in extra European markets with a better perspective growth; as well as
• profitability recovery in the Engineering & Construction segment.

Compared to 2013, management expects robust cash generation, up by 40% in the period 2014-2015 and by 55% in the period 2016-2017. Assuming a Brent price of $90 a barrel for the full year 2017, our projected operating cash flows will provide enough resources to maintain the leverage below the ceiling of 0.30, to finance the planned capital expenditure (€54 billion) and to ensure a progressive increase in the cash returned to shareholders also through the flexible tool of the buyback program.