Eni S.p.A Industry 4.0:
Supercomputer for Digital Geoscience & Subsurface
Mid Term Assignment
System and Information Technology
Student:
Tri Prasetiyo Cahyo Nugroho (NRP. 6032202072)
Lecturer:
Erma Suryani, ST, MT, Ph.D
Magister Management of Technology –
Institute Technology Sepuluh Nopember
Surabaya
May 2021
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Table of Contents
Table of Contents ....................................................................................................................... 2
Executive Summary ................................................................................................................... 3
1. Introduction ..................................................................................................................... 4
2. Smart Industry 4.0 for Circular Economy ....................................................................... 8
3. HCP 5 SUPERCOMPUTER IMPACT FOR GEOSCIENCE AND SUBSURFACE BUSINESS ......... 11
4. Analyse Opportunities Industry 4.0 .............................................................................. 19
5. Conclusion ..................................................................................................................... 23
6. Reference & Disclaimer ................................................................................................ 26
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Executive Summary
Industry 4.0 is assumed to yield extensive industry-spanning opportunities. However,
exploiting these opportunities requires a targeted implementation of Industry 4.0. The purpose
of this report is to generate a deeper understanding of relevant implementation action that has
been taken and planned by Eni S.p.A as one of the biggest oil and gas producer company.
The report is semi-structured in-depth expert review as the source of empirical data. The
reviews were conducted the Digital Initiative that has been taken by Eni as a Company that
start to adopt Industry 4.0 for the Oil & Gas Industry.
The report reveals relevant and targeted aspects for Industry 4.0 implementation: the
development of Industry 4.0-specific know-how, securing financial resources, integrating all
business approaches into the implementation process and establishing an open-minded and
flexible corporate culture. Further aspects include comprehensive planning processes,
cooperation with external partners, proper handling of data interfaces, interdisciplinary
communication, an adaptable organizational structure and data security.
The report is limited to Eni S.p.A enterprises and might have a different standard approach
from other industries and country.
The study supports the Company to effectively implement Industry 4.0 within their
organizations and consequently benefit from Industry 4.0 and derives recommendations for
future research.
The report finds that, implementation of Industry 4.0 thru Hyper Super Computer would make
better planning of decision making which is a critical part of investment management. Having
a proper set up of and faster study using the HPC5, allows Eni S.p.A to accelerate all business
process, as well as eliminate any potential turnover of operations and production. This Digital
Impact also speed up the Company transformation into a Green Energy Producer that shall be
CO2 free in 20250. At the end of the report it is also shown that the financial growth will also
have a positive impact by having the Industry 4.0 adoption in Digital Technology and
Information System.
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1.
Introduction
Eni is a global energy company, 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 biorefining and chemicals, and the
development of circular economy processes. Eni extends its reach to end markets, selling gas,
electricity and products to retail and business customers and local markets. Both CO2 capture
and storage
initiatives and forest conservation projects (REDD+ initiatives) will be
implemented to absorb residual emissions (Eni, 2018).
Company mission is inspired by the UN 2030 Agenda, which was launched in September
2015, when more than 150 world leaders met to support global development, promote human
wellbeing and protect the environment. The UN 2030 Agenda is an action plan that
incorporates 17 Sustainable Development Goals, embracing all aspects of social, economic
and environmental development in an organic and integrated way.
Claudio Descalzi, Eni’s Chief Executive Officer stated that: “Eni is determined to be a force
for good in contributing to the achievement of the UN’s Sustainable Development Goals and
bring about a just transition, ur global presence makes us acutely aware of the challenges the
world faces today: our new mission sets out the values and principles which will drive us in
helping tackle those challenges” .
The new mission is giving the highest recognition to the principles that are the foundation of
the company’s business model, which focuses on long-term investments both in operational
and in social terms and looks beyond short-term profit priorities. It builds sustainability into
all of the company’s activities. Aside from climate and the environment, it has a particular
focus on the development of people and recognizes diversity as a valuable opportunity.
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Figure 1. Corporate Mission
The values that inspire our new mission are reflected in our business model, itself based on
three pillars of long-term carbon neutrality, operational excellence and the creation of
alliances for local development. Visit the Just Transition section to find out more or explore
examples of current local development activities and projects in the Global Presence section.
The new Mission goes beyond the previous version, adopted in 2016, updating it and
reinforcing it. Approved by the Board of Directors, it will serve as a set of principles for the
company and its over 30,000 employees across 67 countries.
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Figure 2. Corporate Mission
“Research”, “development” and “technology” have always been imprinted in Eni's DNA. Eni
has grown and developed also thanks to a strong focus and investment in these areas, which
today are even more a priority in the energy transition path. Digital transformation is part of
this path, to ensure long-term competitiveness and sustainable growth by targeting Eni's
strategic objectives.
The creation, in the summer of 2020, of the new Technology, R&D, Digital function gave
even greater impetus to innovation by creating the conditions for Eni's research and
development and technological and digital innovation to be essential levers to create value,
transform its business and grow, thanks to common strategic objectives, maximization of
synergies and their rapid implementation in the field on an industrial scale.
In particular, the Digital & Information Technology unit stands alongside business to achieve
strategic and sustainability objectives, with a transversal and integrated approach, from the
promotion of innovation and the introduction of new digital solutions to their
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industrialization, with a strong focus on aspects of infrastructure resilience, operational
excellence and security.
Figure 3. Corporate Value Foundation
Eni Digital Business Unit was created at the end of 2018 with the goal of defining a digital
strategy and carrying out a comprehensive transformation of all aspects of the company. This
division identifies digital initiatives and, at the same time, promotes open innovation channels
in order to expand the contribution of both academic and entrepreneurial centers of excellence
in Italy and abroad.
What Eni does to develop advanced analytic tools is truly an innovative approach. Thus, the
digital transformation in the field of drilling (Drilling and completion), for example, is based
on three factors: artificial intelligence to support production decision-making, virtual reality
for modeling, and advanced robotics for automation of operations. This transformation is
already helping to achieve three main goals: improving the safety of the facility, performance
improvement, and improved well planning.
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Figure 4. Eni in Numbers
2.
Smart Industry 4.0 for Circular Economy
Too often, transitioning to a circular business model is viewed primarily as an investment in
the company’s image. While there surely is an advantage in that sense, this type of thinking
misses the point. Going circular in industrial settings means saving a considerable amount of
time, raw materials and money, while opening up all kinds of opportunities to innovate,
diversify and develop additional revenue streams.
Figure 5. Key Elements for Digitalization
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Today’s connected/smart industry solutions allow companies to easily monitor, optimize and
improve their production processes. Industrial Internet of Things (IIoT) devices such as
sensors and connected systems provide decision-makers with new sets of data, shedding new
insights on KPIs, primary products, by-products and waste management. By taking advantage
of these tools, companies can increase their competitiveness along their entire value chain,
ultimately leading to higher profits, all while helping the environment.
As explained by the Ellen MacArthur Foundation, IoT and smart devices in industrial settings
help companies unlock the circular economy potential thanks to three main value drivers:

Knowledge of the location of the asset

Knowledge of the condition of the asset

Knowledge of the availability of the asset
Having an overview on these data in real time is of immense value to businesses. For instance,
knowing the location of an asset allows for optimized routes for loading/unloading,
maintenance and storage of spares.
Knowing the condition of an asset – let’s say, that of an industrial machine monitored by a
connected device – can lead to high uptime, as it allows for predictive maintenance instead of
routine interventions. Parallelly, downtime is quickly detected and handled more efficiently.
Thirdly, knowing the availability of an asset allows companies to optimize energy and other
resources like raw materials based on usage patterns. But the sky really is the limit: It all
comes down to using the new insights to rethink the production process and set more granular
KPIs.
Tapping into these sets of data, which were seldom available before the advent of IoT,
empowers businesses to perform all kinds of optimizations. What’s more, IT companies such
as IBM, Oracle and SAP are also offering supply chain analytics solutions to analyze data and
further identify optimization opportunities.
Going circular is not just about saving money. It also opens new and exciting business
opportunities for companies to increase their competitiveness and identify additional revenue
streams.
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For instance, a growing number of companies are transitioning to circular business models by
offering turnkey solutions to their existing customers. It is the case of PaaS, “product-as-aservice” business model, in which businesses offer clients a subscription to use their goods,
taking charge of the entire product lifecycle: maintenance, repairing and recycling.
Due to their convenience, these solutions are highly attractive for both consumer and business
customers. After the initial investment, they can be more profitable for manufacturers, as they
retain ownership of the products all while gathering data about their usage, which is used to
further optimize design and production processes. Similarly, companies can develop tighter
relationships with customers by providing the added value of a consultancy service.
Improving products and processes and creating long-lasting relationships with end customers
is everything companies need to future-proof their businesses in a highly volatile global
market.
As consumers, we are already experiencing the growing success of the sharing economy, in
which goods are not owned, but leased for a period of time. This type of business model
maximizes the use of assets, practically eliminating downtime. A 2015 PwC study forecasted
that global revenues for the sharing economy in five key sectors have the potential to increase
from approximately $15 billion USD in 2015 to $335 billion USD by 2025. The growing
success of companies such as AirBnb, Uber, WeWork and others show that the general public
is highly interested in shared solutions, especially in urban settings where space is scarce.
High inventory yields will provide an enterprise with stockout protection with wide variety
and selection, short lead time since the material ready on the shelf, lower cost per unit
purchased, large lot production and transportation economics and potential inflation hedging.
Conflicting with low inventory yield, that would allow low holding cost and enterprise will be
very focus on the quality of execution in order to eliminate error due to limited stock.
A number of companies around the world have seized the opportunities offered by the
Industry 4.0 to transition to the circular economy, even at an enterprise level. Whirlpool
Corporation, for instance, integrated energy monitoring equipment down to the individual
machine level in their production plants to obtain an accurate picture of energy usage. In one
of their plants, this has led to reducing consumption by 750,000 kWh per year.
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Employees in another Whirlpool facility noticed one of their processes was consuming more
energy due to heat loss, so they implemented thermal blankets, a move that saved the
company an additional 1 million kWh per year. The company is also collecting data on
material composition in a global online tool that’s used by engineers to make sustainable
choices at the design level. This enhancement helps fulfill their commitment to use 100%
recycled content on major plastic components by 2025.
Figure 6. Digitalization Enhancing Value
3.
HCP 5 SUPERCOMPUTER IMPACT FOR GEOSCIENCE AND SUBSURFACE BUSINESS
HPC5 is a set of parallel computing units with a peak processing power of 51.7 petaFlops.
Combined with the supercomputing system in operation since 2018 (HPC4), the peak
computational capacity of the infrastructure totals 70 petaFlops: that is, 70 million billion
mathematical operations performed in a single second. Its full name is High Performance
Computing - layer 5. It is our latest-generation supercomputer. In June 2020, it entered the
TOP500 list, ranking as the world’s sixth most powerful supercomputer, and the most
powerful in Europe. It is still the leader among non-governmental computers. Again in June
2020, it entered the Green500 special list, taking the same position as the world’s sixth most
energy efficient supercomputer. Ignoring experimental computers and considering only true
supercomputer systems with a consumption level of over 1MW, it has ranked as the secondbest computer in the world for energy savings. A single watt of electricity enables it to
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perform almost twenty billion operations per second. The performance level of this computer
means it can use extremely sophisticated in-house algorithms to process subsoil data. The
geophysical and seismic information we collect from all over the world is sent to HPC5 for
processing. Using this data, the system develops extremely in-depth subsoil models, and on
the basis of these, we can determine what is hidden many kilometres below the surface:
indeed, this is how we found Zohr, the largest gas field ever discovered in the Mediterranean.
Figure 7. HPC5 Super Computer
While the production of gas and oil continues in the energy industry's traditional geographic
areas, the next frontier of exploration is shifting towards increasingly remote places, and
going deeper and deeper underground. And all this is occurring while the demand for global
energy calls for rapid response times. In this environment, identifying new resources and
bringing them into production as fast as possible becomes a serious challenge. The use of a
supercomputer like HPC5 enables us to increase the accuracy of our studies of underground
rocks, reducing the margin for error in prospecting operations and decreasing time-to-market,
or the time between the identification of the field and the launch of production. This also has a
positive impact on sustainability, as it reduces waste, both in terms of energy and resources.
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HPC5 is a computing cluster, or in other words, a set of computers that work together to
multiply overall performance. The power of this supercomputer is three times that of its
predecessor, HPC4. To keep energy consumption to a minimum, a hybrid architecture has
been selected to optimise performance: as such, HPC5 and HPC4 use GPU computation
(graphic processing units - GPUs - optimised for calculating large volumes of data in
parallel), and these are very energy efficient. Indeed, with just one watt of power, a GPU can
carry out over 10,000 million billion mathematical operations. In addition, every single
computer has two CPU sockets; HPC4 also has two sockets for graphics accelerators, while
HPC5 has four sockets. In total, the machine has access to more than 3400 computing
processors and 10,000 graphics cards. This type of hardware, coupled with our proprietary
algorithms, enables us to produce three-dimensional models of the subsoil that lie at a depth
of 10-15 km, with a surface area of hundreds of km2 and a resolution of a few dozen metres.
Once the hydrocarbons have been found, our geologists again use supercomputers to model
the deposits and optimise their exploitation. Equally important was the contribution to the
launch of the new EST reactor, which converts heavy refining residues into high quality light
products. Moreover, from a strategic point of view, the memory of this computing behemoth
stores the data of all the explorations and all the fields discovered by Eni in over sixty years of
history, and this provides the basis for the development of the best methods for extracting the
hydrocarbons that these areas still contain.
Figure 8. Seismic Geodata Imaging
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HCP5 performed the simulation and done within 9hours, others done in 15days. Zohr Field:
the largest reservoir in Egypt and Mediterranean Sea and only need 2years from Discovery to
Production (Accelerate the FID – Financial Investment Decision).
Enhancement research that can be taken from HPC5 installation:

A single watt of electricity enables it to perform 20billions operations per second.

Sophisticated in-house algorithms to process subsoil data from geophysical and
seismic information to determine what is hidden many kilometers below the
surface/seabed.

Increase the accuracy of its studies of underground rocks & produce 3-dimensional
models of the subsoil that lie at a depth of 10-15 km.

Reducing the margin for error in prospecting operations.

Decreasing time-to-market, speeding up decision making (FID).

A positive impact on sustainability, as it reduces waste, both in terms of energy and
resources.

Acceleration of the company’s transformation and the development of new energy
sources and related processes; the generation of energy from the sea, the magnetic
confinement fusion, as well as other climate and environmental technologies thru
algorithm operations and solution.
Figure 9. Selective Capex and High Value Portfolio
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But HPC5 and HPC4 are not just used to discover new deposits, to model existing discoveries
or to improve refining, but will also be used more and more for the energies of tomorrow The
two supercomputers run original programs for research into magnetic confinement fusion:
development of superconducting magnets in the joint Eni-CNR research centre in Gela and
the study of plasmas in the research centre in San Donato Milanese. This is where the
theoretical modelling takes place of the photoactive molecules and polymers that are at the
core of new technologies for capturing solar: OPV organic solar panels and LSC luminescent
solar concentrators. Lastly, Eni supercomputers are used to build advanced mathematical
models combining meteorological and marine information with information on the behaviour
of Marenergy technologies, such as ISWEC or Power Buoy, which generate electricity from
wave motion. Meanwhile, detailed weather and climate models of the Arctic on a continental
scale are developed at the joint Eni-CNR research centre in Lecce – with the essential support,
of course, of the computing power of our supercomputers. Finally, the supercomputer will be
fundamental in the development of our artificial intelligence projects, a new line of research
that we are working on with IBM.
Figure 10. Cash Flow Growth
HPC5 helps us to progressively improve our environmental performance, because increasing
the efficiency of what we do allows us to reduce waste: in terms of energy, resources and
time. In additions, 10-15% of the power provided to HPC4 is delivered by a photovoltaic
system with 1MW of power, consisting of 2968 solar tracker photovoltaic modules distributed
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over 106 strings, part of our Progetto Italia initiative. Moreover, courtesy of its special
environmentally-friendly design, the Green Data Center that houses the supercomputer
enables us to save around 4500 tons of CO2 per year compared to a normal data centre.
Today, for 92% of the year, the machines are cooled via the low-speed circulation of air,
thanks to a system of pipes that intercepts air from the surrounding environment and filters it,
before returning it cleaner than before. Accordingly, the use of air conditioning is minimal.
Figure 11. Time to Market Efficiency
The main goal of all our digital geoscience technologies is simple yet demanding: going
faster. By speeding up our processing of the seismic and geological data we get from subsoil
surveys, we not only shorten times of modelling fields, but also increase their resolution,
because we can use new and increasingly powerful algorithms. To reach this goal, we focus
on integrating and standardising data from the whole Upstream chain, within the special
architecture of our supercomputer. From the great raft of information we gather, we develop
useful simulators of our own, which rely on all the geological and geophysical skills our
specialists working around the world. It is a challenging road, but thanks to these continuous
efforts we can count on excellence in operations and make a difference. Both hardware and
software are constantly updated to remain in step with the latest technological developments.
This lets us support a “fast-track” approach in which exploration, engineering, development
and supply are also improved. This speeds up the launch of projects and reduces costs and
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risks. Exploration activity achieved excellent results in 2020 despite the capex reduction of
approximately 50% from 2019. Added 400 mmboe of new resources at a competitive cost of
1.6 $/barrel. Exploration is still a distinctive approach of Eni’s upstream model, maintaining
a solid track record of production replacement with resources discovered equal to over 6 bboe
in the last seven years, well above than the cumulative production in the period, at a unit cost
lower than 1.5 $/barrel.
Achieved near-field exploration successes ensuring a fast contribution to cash flows. In this
context, main near-field discoveries were in Egypt and then in Tunisia, Norway, Algeria and
Angola, where the Ago- go appraisal well estimated 1 billion boe in place. Significant results
reached also in frontier exploration area with the Mahani gas and condensate discovery in the
onshore of the Emirate of Sharjah (UAE), just one year since the signing of the contracts, the
appraisal of the Ken Bau field offshore Vietnam, which allowed to outline a giant field, and
the Saasken discovery, offshore Mexico, which strenght Eni’s activity in the Country. These
exploration successes create opportunities to early monetization fuelling the dual exploration
model using the HPC-5 Super Computer for iteration of data seismic.
Figure 12. Time to Market Efficiency
Starting from 2016, Eni was among the first in the industry, to committ to targets aimed at
improving the performance related to operational GHG emissions of the operated assets, with
specific indicators showing the progress achieved so far in terms of reduction of GHG
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emissions into the atmosphere, use and consumption of energy resources from primary
sources and production of energy from renewable sources.
In addition to these, in 2020 new medium and long-term targets, accounted for on an equity
basis, were defined and in 2021 they have been relaunched during the presentation of the
strategy, in which Eni announced the target of net zero emissions (Scope 1, 2 and 3) by
2050. Below are Eni’s main long-term objectives and the performance of the associated
indicators:

Net-zero Carbon Footprint upstream by 2030: the indicator considers Scope 1+2
emissions from all upstream assets, op- erated by Eni and by third parties, net of
carbon sinks, which in 2020, was down by 23% compared to 2019 due to both the
pro- duction declines occured in relation to the health emergency and the offsetting
through forestry credits equal to 1.5 million tonnes of CO2eq.

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 carbon sinks and in 2020 it was down by 13% mainly due to the decrease in
production and sales in all sectors related to the health emergency.

Zero Net Carbon Intensity by 2050: the indicator is calculat- ed 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 2020 it was essentially sta- ble as
the decrease in emissions across all sectors was ac- companied by a proportional
decrease in production related to the decline in activities due to the health emergency.
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Figure 13. Roadmap to Digitalization
4.
Analyse Opportunities Industry 4.0
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 Com- mission (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 pub- lished 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 exist- ing prices provided
only by contractual arrangements.
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Figure 14. Renewable Energy Growth
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 conces- sion 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.
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Figure 15. 4Year Plan Energy Transition
In 2020, natural gas sales in Italy and in the rest of Europe amounted to 7.68 bcm, down by
0.94 bcm or 10.9% from the previous year. Sales in Italy amounted to 5.17 bcm down by
5.8% compared to 2019, the reduction was mainly due to lower volumes marketed at small
and medium enterprises and resellers segments; the reduction reported in the residential
segment was mitigated by the positive weather effect mainly in the last quarter of the year.
Sales in the European markets (2.51 bcm) reported a reduction of 19.8% or 0.62 bcm
compared to 2019. In France, sales decreased by 22.7% due to lower volumes marketed to
industrial customers. In Greece and Slove- nia sales were substantially in line with the
comparative period.
In 2020, retail power sales to end customers, managed by Eni gas e luce and the subsidiaries
in France and Greece, amounted to 12.49 TWh, an increase by 14.4% from 2019, due to
growth of retail customers portfolio (up by 270,000 customers vs. 2019) and higher volumes
sold to the retail and industrial segments in Europe.
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Eni’s power generation sites are located in Brindisi, Ferrera Erbognone, Ravenna, Mantova,
Ferrara and Bolgiano. As of December 31, 2020, installed operational capacity of Enipower’s
power plants was 4.6
GW. In 2020, thermoelectric power generation was 20.95 TWh,
substantially in line compared to 2019. Electricity trading (17.09 TWh) reported a decrease of
4.2% from 2019, thanks to the optimization of inflows and outflows of power. In 2020,
power sales in the open market were 25.33 TWh, representing a reduction of 10.4% compared
to 2019, due to economic downturn.
Figure 16. Enhanced remuneration policy
We have defined an innovative dividend policy, based on a fixed component, which will be
reassessed going forward based on the achievement of Eni’s indus- trial objectives, and a
variable component linked to the scenario, in order to adapt the dividend to market volatility,
while the buy-back has been suspended.
Thanks to these actions, we were able to generate an adjusted cash flow of €6.7 billion, able to
fund 100% of our organic capital expenditure, which were revised to €5 billion, leaving a
surplus of €1.7 billion despite the large impact of the crisis on our cash receipts which
contracted by around €6 billion compared to the forecasts at the beginning of the year.
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5.
Conclusion
In a year like no other in the history of the energy industry, Eni has proven the robustness and
flexibility of its business model by reacting swiftly and effectively to the extraordinary crisis
context, while progressing the Company’s irreversible path for the energy transition. In the
space of a few months after the outbreak of the pandemic we reduced capital spending and
limited the impact of the sharp drop in crude oil prices on the cash flow, strengthening our
liquidity and preserving the robustness of our balance sheet. The upstream business is
strengthening its recovery, while our businesses in the production and sale of decarbonized
products achieved excellent results in the year, driven by a 17% Ebit increase from Eni gas e
luce, a 130% increase in biorefining processing and 1 GW of new solar and wind generation
capacity already installed or sanctioned. We laid foundations for strong growth in renewables
by entering two strategic markets, the US and the Dogger Bank wind project in the UK’s
North Sea offshore wind market, which will be the largest in the world in the sector. Through
leveraging the actions we put in place, our 2020 adjusted cash flow of €6.7 billion was able to
finance our capex, with a surplus of €1.7 billion. Net borrowings (before IFRS 16) are at the
same level as at the end of 2019, and leverage is at around 30%”.
Management took decisive actions according to three priorities:

Health and safety of our people and asset integrity: implemented initiatives to
safeguard each of the 60 thousand people that work in Eni and with Eni, in all the
work places and operational sites. Very quickly, smart working was adopted by 99%
of Eni employees in the main offices and by 70% of people engaged in our operational
sites. These measures allowed to ensure continuity, without operational interruptions
and asset integrity.

Robustness of balance sheet: during the pandemic peak, management took decisive
actions to increase the fi- nancial resiliency and strengthen the balance sheet, defining
clear priorities in cash allocation. The Company is set to resume growing once the
macro backdrop normalizes. Revised the Company’s strategy and plans for the shortto-medium term leveraging on a reduction of €8 billion in the outlays for expenses and
capital expenditures in
the two-year period 2020-2021, more exposed to the
downturn, with the subsequent reshaping of the growth profile of production and the
definition of a dividend policy based on a fixed component, subject to a continuous reevaluation process, following the achievement of certain Eni’s industrial targets and a
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variable component indexed to the scenario, in order to adapt the dividend to market
volatility; the share buy-back program is temporarily suspended.

Organizational structure: in June 2020, Eni created a new organizational setup by
establishing two business groups: the Natural Resources business which has the task
of valorizing the Oil & Gas portfolio in a sustainable way and of managing the energy
efficiency activities, the projects of CO2 capture; and the Energy Evolution business
which has the task of managing the evolution of businesses of power generation,
manufacturing and marketing of products from fossil to bio, blue and green. The two
business groups will work in synergy with R&D and digitalization department to
realize Eni’s plans and achieve the decarbonization targets to 2050.
Leading energy transition
Decarbonization of operations and products to deliver a mix of entirely
decarbonized
products:

Net Zero Emissions at 2050, introducing new targets for net absolute emissions
(Scope 1, 2 and 3): -25% at 2030 vs. 2018 and -65% at 2040.
Stakeholder Value Creation
Enhanced remuneration policy:

Dividend floor set at €0.36 per share at 43 $/bbl vs. the previous level of 45 $/bbl

300 mln/year buy-back to re-start at 56 $/bbl. Confirmed buy-back at €400 mln/year
from 61 $/bbl and €800 mln/year from 66 $/bbl
Exploration & Production
Maximizing returns and cash generation by leveraging on the enhancement of the current
asset portfolio, exclusively conventional, with lower break even, phased projects, accelerated
time-to-market and limited exposure beyond the medium term.
Global Gas & LNG Portfolio

The expected contracted LNG volume portfolio will be equal to 14 million tons/y in
2024 (up 45% vs. 2020) with a gas equity share higher than 70%.

The aforementioned actions will allow to achieve a 2021-2024 cumulative free cash
flow of €0.8 billion.
Refining & Marketing

Focused on the development of biorefinery capacity, expected to almost double to 2
million tonnes by 2024 and further grow to 5-6 million tonnes/y in 2050.
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Power & Renewables

Provide for the synergic development of installed capacity for the production of
renewable energy targeting 15 GW by 2030 and 60 GW by 2050 and the enhancement
of retail customer base up to exceeding 20 million of customers by 2050 through the
selection of areas of expansion in the renewables leveraging on the presence of our
customers as well as the development of activities in Eni’s countries of operation.
Financial

The four-year capex plan focused on high-value fast-return projects, is expected to be
€27 billion. This capital plan retains some degree of flexibility because about 55% of
capex expected in 2023-2024 remain uncommitted.

The 65% of the group capex plan is expected to be focused on the upstream segment
and is well diversified geographically thanks to developments in the Middle East,
Africa and Mexico.

Eni’s capex plan is a high value programme and is resilient even in a challenging
scenario. The current portfolio of upstream projects in progress has a break even price
of 28 $/barrel by 2024 and an overall IRR of about 18%.

Regarding renewables projects the unlevered internal rate of return is between 6 and
9% and, through financing operations, it will be able to reach a double-digit level;
while IRR for biorefineries is envisaged at 15%.
Figure 17. INDUSTRY 4.0 to Eni Energy Transformation
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6.
Reference & Disclaimer
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Disclaimer
This document contains forward-looking statements regarding future events and the future results of Eni that are based on
current expectations, estimates, forecasts, and projections about the industries in which Eni operates and the beliefs and
assumptions of the management of Eni.
The information provided in this presentation is for study purpose for the subject of System and Information Technology only
and not to be shared and/or distributed out of the forum without approval consent from the Company.
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