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and Exchange Commission.
1
R&M Business Trends
Mario Taraborrelli
Chief Operating Officer
Refining & Marketing Division
London, 1th March, 2005
European Scenario
Reduction of gasoline consumption
Growth of diesel consumption
Reduction of fuel oil consumption
Widening heavy sour-light sweet crude differential
Fuels quality
Environment
3
Eni Strategy in R&M confirmed
REFINING
MARKETING
Improve flexibility
Improve diesel conversion
ITALY
Continuing retail network enhancement
Improve fuel quality
OTHER EUROPEAN COUNTRIES
Expansion in selected regions
EFFICIENCY
Focus on costs
4
Refining
Refining System in Europe
Mton
43.4
39.6
3.2
Retail expansion
areas
Refineries
38.4
4.3
4.5
63%
56.7%
48.4%
40.2
35.3
33.9
1999
2004
2008
Throughput Italy
Throughput Europe
Conversion Index
Balancing refining capacity vs retail sales
Increasing conversion capacity
6
Improving Refining Performance
Refineries in Italy
Competitive
conversion
index
67%
61%
50%
1999
Increasing
equity crude oil
run
2004
29.4%
30.9%
1999
2004
2008
36.3 %
Higher
integration
with E&P
division
2008
7
Improving Refining Performance
Improved diesel conversion in Italy
∆ 2008-2004
40.2
36%
14%
35.3
33.9
41%
44%
13%
11%
Middle
Distillate
Fuel Oil
1999
2004
2008
Througput (Mton)
8
Investing in Refining Technology
New units in Italy
Sannazaro
To be
completed
within 2005
Total Capex
2005-2008:
Kton/y
H.P. Hydrocracker Unit
Tar Gasification
1500
500
BDA
1000
Taranto
H.P. Hydrocracker Unit
Kton/y
900
430 mln €
9
Retail
Network
Retail Sales in Europe
bln lt
Drivers in
marketing
Network
enhancement
Expansion
abroad
Improve fuel
quality
18.5
3.0
18.4
19.1
4.4
7.1
(mln lt/ss)
2.8
1.7
2.0
15.5
14.0
12.0
1999
2004
2008
Italy
Other Europe
Average throughput
11
Network Enhancement
1999
2004
2008
10,814
9,138
6,870
• Agip Brand Italy
5,961
4,329
4,270
• European Network
1,389
1,894
2,600
• IP Brand
3,484
2,915
--
Service stations (n.)
Non oil activities
from 50% of service
stations in ‘04 to
81% in ‘08
Ongoing bid
for IP
disposal
12
Improving Retail Performance
Italy
100
1.6
1999
126
140
2.8
1.9
Agip Brand 2.6
2004
2008
(mln lt/s.s.)
180
Other
European
Regions
100
2.2
1999
Productivity index ( kton/man)
117
2.4
2004
2.8
2008
Average Throughput
13
Premium Products (Brand named)
Better environmental ( sulphur free) and engine performance
Target for BluDiesel >20% of gasoil sales
Target for BluSuper >12 % of gasoline sales
High quality lube oils
14
Capital Expenditure
Mln €/y
Excluding
portfolio
operations
625
509
53%
47%
47%
53%
1996
2000
680
600
35%
35%
Safety, maintenance
and environment
65%
65%
Development
2004
A v. 05-08
15