Eni — Regulatory Filings 2011

Aug 3, 2011

6-K 1 sj0711en6k.htm HTML PUBLIC "-//IETF//DTD HTML//EN" sj0711en6k

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SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549

Form 6-K

REPORT OF FOREIGN ISSUER Pursuant to Rule 13a-16 or 15d-16 of the Securities Exchange Act of 1934

For the month of July 2011

Eni S.p.A. (Exact name of Registrant as specified in its charter)

Piazzale Enrico Mattei 1 - 00144 Rome, Italy (Address of principal executive offices)

(Indicate by check mark whether the registrant files or will file annual reports under cover of Form 20-F or Form 40-F.)

Form 20-F x Form 40-F o

(Indicate by check mark whether the registrant by furnishing the information contained in this Form is also thereby furnishing the information to the Commission pursuant to Rule 12g3-2b under the Securities Exchange Act of 1934.)

Yes o No x

(If “Yes” is marked, indicate below the file number assigned to the registrant in connection with Rule 12g3-2(b): )

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Press Release dated July 29, 2011

Press Release dated July 29, 2011

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, hereunto duly authorised.

Eni S.p.A.
Name: Antonio Cristodoro
Title:	Deputy Corporate Secretary

Date: July 31, 2011

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ENI ANNOUNCES RESULTS FOR THE SECOND QUARTER AND THE FIRST HALF OF 2011

San Donato Milanese, July 29, 2011 - Eni, the international oil and gas company, today announces its group results for the second quarter and the first half of 2011 (unaudited).

Financial Highlights

| • | Adjusted
operating profit: euro 9.1 billion in the first half (up
8%); euro 4 billion in the quarter (down 3%). |
| --- | --- |
| • | Adjusted
net profit: euro 3.63 billion in the first half (up 4%);
euro 1.44 billion in the quarter (down 14%). |
| • | Net
profit: euro 3.8 billion in the first half (down 6%);
euro 1.25 billion in the quarter (down 31%). |
| • | Cash flow:
euro 8.6 billion in the first half; euro 4.41 billion in
the quarter. |
| • | Interim
dividend proposal of euro 0.52 per share. |

Operational Highlights

| • | Oil and
gas production affected by the prolonged crisis in Libya:
down by 15% for the second quarter to 1.489 mmboe/d (down
by 12% for the first half). When excluding the impact of
the production loss in Libya and price effects, the
decline was 2% for the quarter (down by 1% for the first
half). |
| --- | --- |
| • | Gas sales:
up by 9% for the second quarter to 21 bcm (up by 7% in
the first half). |
| • | In the
first half 4 new fields have been put into production, in
the USA, Congo and Italy. |
| • | Granted
new growth opportunities in East-South Asia by acquiring
exploration acreage in Indonesia and an interest in two
gas discoveries in the Australian Timor Sea. |
| • | Finalized
a deal with Sonatrach to pursue development of gas shale
plays in Algeria. |
| • | Continued
exploration success in Norway, USA, Ghana, Venezuela, UK,
Angola and Egypt added 415 million barrels to the
Company’s resource base in the first half. |

Paolo Scaroni, Chief Executive Officer, commented: "The main feature impacting Eni’s results in the first half of 2011 was the disruption in supply of oil and gas from Libya, which affected all of our business activities. G&P results also suffered from the high supply costs of natural gas, which currently take no account of the expected retroactive benefits of ongoing renegotiations. In this context, Eni delivered solid results, benefiting in particular from improved profitability in E&P. In the first half of the year we have strengthened our growth prospects through the progress on key development projects, continuing exploration success and new agreements which secure access to resources in core and new high potential areas. Management’s expectations for solid full-year results and the Company’s growth and profitability outlook underpin our dividend policy and our proposal for an interim dividend of euro 0.52 per share."

On the same occasion of reviewing this press release, the Board has approved the interim consolidated report as of June 30, 2011, which has been prepared in accordance to Italian listing standards as per Article 154-ter of the Code for securities and exchanges (Testo Unico della Finanza). The document was immediately submitted to the Company’s external auditor. Publication of the interim consolidated report is scheduled within the first half of August 2011 alongside completion of the auditor’s review.

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Financial Highlights

Second Quarter 2010 First Quarter 2011 Second Quarter 2011 % Ch. 2 Q. 11 vs. 10 First Half 2010 First Half 2011 % Ch.

| 4,305 | 5,638 | 3,810 | (11.5 | ) | SUMMARY GROUP RESULTS — Operating
profit | 9,152 | 9,448 | 3.2 | |
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
| 4,128 | 5,099 | 4,003 | (3.0 | ) | Adjusted operating profit (a) | 8,459 | 9,102 | 7.6 | |
| 1,824 | 2,547 | 1,254 | (31.3 | ) | Net profit (b) | 4,046 | 3,801 | (6.1 | ) |
| 0.50 | 0.70 | 0.35 | (30.0 | ) | - per share (euro) (c) | 1.12 | 1.05 | (6.3 | ) |
| 1.27 | 1.91 | 1.01 | (20.5 | ) | - per ADR ($) (c) (d) | 2.97 | 2.95 | (0.7 | ) |
| 1,667 | 2,198 | 1,436 | (13.9 | ) | Adjusted net profit (a) (b) | 3,489 | 3,634 | 4.2 | |
| 0.46 | 0.61 | 0.40 | (13.0 | ) | - per
share (euro) (c) | 0.96 | 1.00 | 4.2 | |
| 1.17 | 1.67 | 1.15 | (1.7 | ) | - per ADR ($) (c) (d) | 2.55 | 2.81 | 10.2 | |

i	i	i
(a)	i	For a
detailed explanation of adjusted operating profit and net
profit see paragraph "Reconciliation of reported
operating and net profit to results on an adjusted
basis" page 27.
(b)	i	Profit
attributable to Eni’s shareholders.
(c)	i	Fully
diluted. Dollar amounts are converted on the basis of the
average EUR/USD exchange rate quoted by the ECB for the
periods presented.
(d)	i	One ADR
(American Depositary Receipt) is equal to two Eni
ordinary shares.

Adjusted operating profit Eni reported lowered adjusted operating profit for the second quarter of 2011 at euro 4 billion, down by 3% from the year-earlier quarter, dragged down by a weak performance of the downstream businesses. The Gas & Power division’s profit fell by 60% from a year ago driven by reduced marketing margins on gas sales due to strong competitive pressures and a weak trading environment. The division’s performance did not take into account the possible benefit associated with ongoing renegotiations of the Company’s long-term gas purchase contracts which may become effective earlier than the end of June 2011. The Refining & Marketing and Petrochemical divisions both reported widening operating losses driven by high costs for oil-based feedstock only partially transferred to end prices. On the positive side, the Exploration & Production division delivered an improved performance (up by 11% from a year ago) driven by a strong oil price environment, partly offset by the impact associated with a lowered Libyan output and the appreciation of the euro vs. the US dollar (up by 13%). Also the Engineering & Construction segment posted higher profit (up 10%) helped by a stronger turnover and higher margins on works. For the first half of 2011, the Group reported an improved operating profit compared to the first half of 2010 (up by 8% to euro 9.1 billion) on the back of better performances reported by the Exploration & Production and, to a lesser extent, the Engineering & Construction segment, partly offset by weak trends in the Company’s downstream businesses.

Adjusted net profit Adjusted net profit for the second quarter of 2011 was euro 1.44 billion, a decrease of 14% compared with the second quarter of 2010 as a result of the decreased operating performance and 2 percentage points increase of the Group tax rate. Adjusted net profit for the first half of 2011 was euro 3.63 billion (up 4% from the first half of 2010) driven by a better operating performance, also helped by a slight decrease in the Group tax rate (down by a half percentage point).

Capital expenditure Capital expenditure was euro 3,740 million for the quarter and euro 6,615 million for the first half mainly relating to continuing development of oil and gas reserves, the upgrading of rigs and offshore vessels in the Engineering & Construction segment and of the gas transport infrastructures.

Cash flow In the second quarter of 2011 net cash generated by operating activities amounted to euro 4,411 million (euro 8,596 million in the first half). Cash flow from operating activities of the quarter benefited from a cash inflow of euro 248 million associated with transferring trade receivables due beyond March 31, 2011, to factoring institutions amounting to euro 932 million in the first quarter 2011, while the current quarter benefited from transferring euro 1,180 million of trade receivables due beyond June 30, 2011, to the same institutions. These inflows were used to fund part of the financing requirements associated with capital expenditure incurred in the period and dividend payment, which included payment of balance dividend for the fiscal year 2010 to Eni’s shareholders for euro 1,811 million and to non-controlling interests by consolidated entities (euro 397 million). As a result, net borrowings 1 as of June 30, 2011, amounted to euro 25,978 million, representing a slight decrease of euro 141 million from December 31, 2010, and an increase of euro 1,027 million from March 31, 2011.

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(1) Information on net borrowings composition is furnished on page 36.

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Financial Ratios Return on Average Capital Employed (ROACE) 2 calculated on an adjusted basis for the twelve-month period to June 30, 2011, was 10.9% (9.7% at June 30, 2010). Ratio of net borrowings to shareholders’ equity including non-controlling interest – leverage 2 – was 0.47 at June 30, 2011, unchanged from December 31, 2010. This indicator was positively influenced by net profit for the period and the slight decrease of net borrowings which effects were absorbed by the appreciation of the euro against the US dollar as recorded at period end exchange rates (up 8%) which reduced shareholders’ equity by euro 2.37 billion, as well as dividend payment.

Interim dividend 2011 In light of the financial results achieved for the first half of 2011 and management’s expectations for the full-year results, the interim dividend proposal to the Board of Directors on September 8, 2011, will amount to euro 0.52 per share (euro 0.50 per share in 2010). The interim dividend is payable on September 22, 2011, being September 19, 2011 the ex dividend date.

Operational highlights and trading environment

Second Quarter 2010 First Quarter 2011 Second Quarter 2011 % Ch. 2 Q. 11 vs. 10 First Half 2010 First Half 2011 % Ch.

1,758	1,684	1,489	(15.3	)	Production of oil and natural gas	(kboe/d)	1,800	1,586	(11.9	)
980	899	793	(19.1	)	- Liquids	(kbbl/d)	995	846	(15.0	)
4,319	4,356	3,867	(9.8	)	- Natural gas	(mmcf/d)	4,466	4,110	(7.9	)
19.19	32.33	21.00	9.4		Worldwide
gas sales	(bcm)	49.70	53.33	7.3
9.61	9.68	9.66	0.5		Electricity sales	(TWh)	18.61	19.34	3.9
2.94	2.64	2.90	(1.4	)	Retail
sales of refined products in Europe	(mmtonnes)	5.62	5.54	(1.4	)

Exploration & Production Eni reported liquids and gas production of 1,489 kboe/d for the second quarter of 2011 (1,586 kboe/d in the first half of 2011), down by 15% from the second quarter of 2010 (down by 12% from the first half of 2010). The magnitude of this reduction was the result of the shutdown of activities at all Eni’s producing sites in Libya and the closure of the GreenStream pipeline transporting gas from Libya to Italy, with the sole exception of the Wafa field which has been flowing at a level of approximately 50 kboe/d net to Eni with the full supply supporting local production of electricity. Performance for the quarter was also negatively impacted by lower entitlements in the Company’s PSAs due to higher oil prices with an overall effect of 36 kboe/d compared to the year-earlier quarter (approximately 30 kboe/d from the first half of 2010), in addition to the above mentioned loss of Libyan output amounting to approximately 200 kboe/d compared to the second quarter of 2010 (down by approximately 170 kboe/d from the first half of 2010). Net of those effects, production for the quarter decreased by 2 percentage points (down 1 percentage point in the first half of 2011) mainly due to planned facility downtime in particular in Italy. Production decline at mature fields was absorbed by continuing production ramp up in Norway, Egypt and Iraq.

Gas & Power In the second quarter of 2011 Eni’s gas sales were 21 bcm, an increase of 9% compared with the second quarter of 2010 (up 7% from the first half of 2010) which reflected an improved performance both in Europe and the domestic market. Volumes gains in European markets (up by 2.29 bcm in the quarter of 2011, or 26%; up by 19% in the first half of 2011) were driven by growth registered in Turkey, Germany/Austria, Belgium, UK/Northern Europe and France. In Italy volume increases (up by 0.84 bcm in the quarter of 2011, or 13%; up by 11% in the first half of 2011) were driven by client additions and higher off-takes in power generation, wholesalers and industrial segments which gave a boost to Eni’s market share. These increases were partly offset by lower sales to shippers which import gas to Italy (down by 74% and 55% in the second quarter and first half of 2011, respectively) due to reduced off-takes and lower availability of Libyan gas resulting from the closure of the GreenStream importing pipeline.

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(2) Non-GAAP financial measures disclosed throughout this press release are accompanied by explanatory notes and tables to help investors to gain a full understanding of said measures in line with guidance provided for by CESR Recommendation No. 2005-178b. See pages 36 and 37 for leverage and ROACE, respectively.

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Refining & Marketing In the second quarter of 2011, the benchmark refining margin on TRC Brent crude was unprofitable (down by 68% to 1.1 $/barrel from the second quarter of 2010; down by 51% from the first half of 2010 to 1.4 $/barrel) as high costs of oil-based feedstock were only partially transferred to product prices pressured by weak demand, high inventory levels and excess capacity. In addition refinery utilities expenses registered large increases as they are indexed to the cost of oil. Against this backdrop, Eni’s realized margins fell sharply although Eni’s complex cycles were helped by widening sweet-sour crude price differentials on the marketplace and higher premium prices on gasoline and gasoil compared to fuel oil. In the second quarter of 2011, sales volumes on the Italian retail market decreased by 1.4% from a year ago (down by 2.4 in the first half of 2011) due to a large drop in fuel consumption (down by 1.9%). Market share for the period increased by 0.1 percentage points to 30.2% compared to the same period of the previous year. Also retail sales on European market were weaker in the quarter due to lower demand and higher competitive pressure (down by 1.3% in the quarter; however they were up 1.4% in the first half) with reductions in Germany, France and Eastern Europe. These negatives were partly offset by the purchase of a network of service stations in Austria closed during 2010.

Currency Results of operations for the second quarter and first half of 2011 were negatively impacted by the appreciation of the euro vs the US dollar (up 13% and 5.6% in the quarter and in the first half of 2011, respectively).

Update on Libyan situation

All of Eni’s producing facilities came to halt including export through the GreenStream gas pipeline, with the sole exception of the Wafa field where it is supporting local production of electricity. Plants and pipelines were put into safety status and no damage has been reported. Eni is technically able to resume the gas output at a level similar to the pre-crisis flows in 2010 once the situation has returned to normal. Since March 2011 Eni has evacuated all its personnel and suspended ongoing exploration and development activities. Eni’s production in Libya is currently flowing at a rate of approximately 50 kboe/d, down from the expected level of 280 kboe/d for the year. As of June 30, 2011, Eni’s net capital employed in Libya amounted to $2.04 billion ($2.5 billion as of December 31, 2010), including a 50% interest in GreenStream BV.

Portfolio developments

Algeria In April 2011, Eni signed a cooperation agreement with Sonatrach to explore for and develop unconventional hydrocarbons, particularly shale gas plays.

Australia In May 2011, Eni signed an agreement with MEO Australia Ltd to farm-in the Heron and Blackwood gas discoveries in permit NT/P-68, located in the Timor Sea. Eni will acquire a 50% stake and operatorship in the first gas discovery by financing exploration activities relating to the drilling of two appraisal wells. Eni was granted an option to earn a 50% stake in Blackwood discovery by drilling one appraisal well in the area and performing seismic surveys. The agreement also provides an option to acquire an additional 25% in both the discoveries by financing the development plan required to reach a Final Investment Decision (FID).

Indonesia In May 2011, Eni was awarded rights to explore and the operatorship of the Arguni I block with a 100% interest, located in the Bintuni basin, with high mineral potential. The agreement foresees drilling 2 wells to be carried out in the first 3 years of exploration license.

South Africa In June 2011, Eni signed a Memorandum of Understanding with South Africa’s State-owned oil company PetroSA to promote common opportunities to jointly expand operations in conventional and unconventional hydrocarbons in South Africa and in Africa. The parties will also study joint initiatives to evaluate long-term LNG supplies for power generation and gas-to-liquids (GTL) as well as refined products to be provided by Eni.

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In addition, Eni will support the construction of new power plants aimed at guaranteeing economic development of the country. In addition, Eni and PetroSA will also evaluate leasing options to use storage facilities in Saldanha, located strategically between the Asian, American and European markets.

Bio-based chemical In June 2011, through its subsidiary Polimeri Europa, Eni signed a cooperation agreement with Novamont SpA to convert Eni’s Porto Torres chemical plant into an innovative bio-based chemical complex to produce bio-plastics and other bio-based petrochemical products (bio-lubricants and bio-additives) for which significant growth is expected in the medium-long term. The project will be supported by an integrated supply chain and raw materials of vegetable origin. Novamont will contribute its technologies and skills in the bio-plastics and bio-based chemical sector. Eni will contribute to the joint entity the Porto Torres plant, infrastructure and professional staff as well as its industry and technical-engineering and commercial know-how in the petrochemical sector. In addition, Eni foresees to build a biomass power plant and to carry out a number of projects for environmental restoration and clean-up activities. Eni plans to make capital expenditure totaling approximately euro 1.2 billion in the 2011-2016 period to execute the above mentioned projects directly or through the joint entity.

Egypt In July 2011, Eni and the Egyptian Authorities reaffirmed their upstream commitment in the country, particularly in the Western Desert, the Mediterranean Sea and the Sinai basins. The program of activity foresees a development plan including the drilling of additional wells and the fast track of recent discoveries as well as an exploration plan including the drilling of 12 wells. In addition, Eni will provide for a number of sustainable initiatives designed to support the country’s population.

Belgium In July 2011, Eni signed an agreement with NV Noun Energy for the acquisition of the subsidiary Noun Belgium NV. The company supplies gas and electricity to the industrial and residential segments in Belgium. The agreement is subject to the approval of the relevant Authorities.

Exploration activities

| Exploration activities yielded positive
results in: | |
| --- | --- |
| (i) | Norway, with the Skrugard
oil and gas discovery to be readily put in production in
the PL 532 (Eni’s interest 30%), with initial
recoverable reserves of approximately 250 mmbbl; |
| (ii) | USA, in the Gulf of Mexico,
with the Hadrian North appraisal well containing oil and
natural gas resources in Block KC919 (Eni’s interest
25%); |
| (iii) | Ghana, with the appraisal
well Sankofa-2 and Gye Nyame discovery containing oil and
gas resources in the offshore license Cape Three Points
(Eni 47.22%, operator); |
| (iv) | Venezuela, with the Perla 4
and 5 appraisal wells in Block Cardon IV (Eni’s
interest 50%) that have been successfully drilled. The
results exceeded the initial resource estimation to more
than approximately 16,000 bcf. The development plan
provides for a production target of approximately 300
mmcf/d in 2013; |
| (v) | the United Kingdom with the
appraisal of the Culzean gas and liquids discovery
(Eni’s interest 16.95%); |
| (vi) | Angola, in Block 15/06 (Eni
operator with a 35% interest) with the Mukuvo-1 discovery
and Cinguvu-2 appraisal oil wells, within the West Hub
project sanctioned in 2010. Planned activities progressed
and start-up is expected in 2013 with peak production at
22 kbbl/d; |
| (vii) | Egypt, with near field
activities in: (i) the Belayim concession (Eni’s
interest 100%) with the BB-10 and BLNE-1 oil discoveries
that were linked to existing facilities; (ii) the
development lease Abu Madi West (Eni’s interest 75%)
with the Nidoco West and Nidoco East gas discoveries.
Their linking to the existing facilities progressed;
(iii) the development lease Meleiha (Eni’s interest
56%) with the Aman SW and Dorra-1X oil discoveries that
were started-up; |
| (viii) | Pakistan, with the
Kadanwari-27 exploration well (Eni’s interest
18.42%), in the Kadanwari permit. |

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Main production start-ups
In line with the Company’s
production plans, production was started at the following
main fields:
(i)	Capparuccia (Eni’s
interest 77.8%) in Italy, with an initial production of
approximately 4 kboe/d;
(ii)	Libondo (Eni’s interest
35%), offshore Congo;
(iii)	Nikaitchuq (Eni operator
with a 100% interest), offshore Alaska. Peak production
is expected at 28 kbbl/d;
(iv)	Appaloosa (Eni’s
interest 100%) in the Gulf of Mexico, with a production
of approximately 7 kbbl/d.

Divestment of international pipelines

As part of the agreement signed with the European Commission for the divestment of Eni’s interests in the German TENP, the Swiss Transitgas and the Austrian TAG gas transport pipelines, interconnected with the Italian transport system, on June 10, 2011, Eni entered a purchase agreement with Italian Cassa Depositi e Prestiti SpA ("CDP") for the sale of its whole interest in Trans Austria Gasleitung GmbH representing 89% of outstanding shares, which give right to 94% of the entity's earnings. Trans Austria Gasleitung GmbH is the company which owns the transport rights for the Austrian section of the pipeline that connects Russia to Italy. The divestment, subject to approval of the European Commission, provides for the payment of euro 483 million, plus the reimbursement of a shareholder loan granted by Eni to the company equal to euro 192 million. These amounts will be subject to review at the closing date as per market practice. The parties have also agreed upon earn-out mechanisms linked to the occurrence of certain events. The transaction, once finalized, will leave unaffected the ship-or-pay contract signed by Eni with TAG. Procedures are progressing for the divestment of Eni’s interest in the other two gas transport pipelines, the German TENP and the Swiss Transitgas .

Outlook

Management expects that the global economic recovery will continue to progress at a modest pace during the year 2011. Nonetheless, the 2011 outlook is also characterized by a certain degree of uncertainty and volatility in light of ongoing macroeconomic and geopolitical developments, particularly the evolution of the Libyan crisis. Eni forecasts an upward trend for Brent crude oil prices also supported by healthier global oil demand. For its short-term economic and financial projections, Eni assumes an average Brent price of 115 $/bbl for the full year 2011. Management expects that the European gas market will remain weak as sluggish demand growth is insufficient to absorb current oversupplies and ongoing competitive pressures undermine gas operators’ profitability. Refining margins are expected to remain at unprofitable levels due to weak underlying fundamentals (sluggish demand and excess capacity) and high feedstock costs. Against this backdrop, management expectations about the main trends in the Company’s businesses for 2011 are disclosed below.

| - | Production of liquids and
natural gas is forecast to decline from 2010 (1.815
million boe/d was the actual level in 2010 at 80 $/bbl)
at the Company’s pricing scenario of 115 $/bbl for
the full year. The decline is expected as a result of
volume losses in Libya following the shutdown of almost
all of the Company’s production facilities. Better
production performance at the Company’s assets
elsewhere in the world will help partly offset the impact
associated with rising crude oil prices on PSAs
entitlements. Assuming the actual production level at 50
kboe/d in Libya for the remainder of 2011, management
forecasts a 10 percentage points reduction in the
expected production plateau for the full year at a
constant pricing scenario. Management has been
implementing its plans to target production growth in the
Company’s assets by ramping up fields that were
started in 2010, starting up new fields in the USA,
Australia, Egypt, Italy and Algeria, as well as executing
production optimizations in particular in Nigeria,
Norway, Egypt, Angola and the United Kingdom; |
| --- | --- |
| - | Worldwide gas sales are expected to grow from 2010 (in 2010 actual sales
amounted to 97.06 bcm), in spite of sales losses to
certain Italian importers due to lower availability of
gas from Libya. Management plans to drive volume growth
in Italy, leveraging clients additions in the power
generation, industrial and wholesale segments, as well as
regaining significant market share, and capitalizing on
organic growth in key European markets. Considering
mounting competitive pressure in the gas market, the
achievement of the planned volume targets will be
underpinned by strengthening the Company’s
leadership on the European market; marketing actions
intended to strengthen the customer base in the domestic
market and renegotiating the Company’s long-term gas
purchase contracts. The cash flow impact associated with
lower sales to Italian shippers will be offset by
expected lower cash outflows associated with the
Company’s take-or-pay gas purchase contracts as the |

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| | Company is planning to meet
lower availability of Libyan gas with gas from other
sources in its portfolio; |
| --- | --- |
| - | Regulated businesses in
Italy will benefit from the pre-set regulatory return
on new capital expenditure and continuing efficiency
actions; |
| - | Refining throughputs on
Eni’s account are expected to slightly decline
compared to 2010 (actual throughputs in 2010 were 34.8
mmtonnes). The decline is mainly expected at the Venice
refinery due to difficulties in supplying Libyan crude
oil. Higher volumes are expected to be processed at the
Sannazzaro and Taranto refineries and optimization of
refinery cycles, as well as efficiency actions are
expected to be implemented in response to a negative
trading environment; |
| - | Retail sales of refined
products in Italy and the rest of Europe are expected
to be slightly lower than in 2010 (11.73 mmtonnes in
2010) against the backdrop of weaker demand. Management
plans to counteract that negative trend by leveraging
selective pricing and marketing initiatives, developing
the "non-oil" business and service upgrade; |
| - | The Engineering &
Construction business confirms solid results due to
increasing turnover and a robust order backlog. |

In 2011, management plans to make capital expenditure broadly in line with 2010 (euro 13.87 billion was invested in 2010) mainly directed to developing giant fields and starting production at new important fields in the Exploration & Production division, refinery upgrading related in particular to the realization of the EST project, completing the program of enhancing Saipem’s fleet of vessels and rigs, and upgrading the natural gas transport infrastructures. Assuming a Brent price of 115 $/barrel and the planned divestment of certain assets, management forecasts that the ratio of net borrowings to total equity (leverage) at year-end will be lower than in 2010.

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This press release has been prepared on a voluntary basis in accordance with the best practices in the marketplace. It provides data and information on the Company’s business and financial performance for the second quarter and the first half of 2011 (unaudited). Results of operations for the first half of 2011 and material business trends have been extracted from the interim consolidated report 2011 which has been prepared in compliance with Article 154-ter of the Italian code for securities and exchanges ("Testo Unico della Finanza" - TUF) and approved by the Company’s Board of Directors today. The interim report has been transmitted to the Company’s external auditor as provided by applicable regulations. Publication of the interim report is scheduled in the first half of August, alongside the Company’s external auditor report upon completion of relevant audits. In this press release results and cash flows are presented for the second quarter and the first half of 2011 and for the second quarter and the first half of 2010. Information on liquidity and capital resources relates to the end of the periods as of June 30, 2011, March 31, 2011 and December 31, 2010. Tables contained in this press release are comparable with those presented in management’s disclosure section of the Company’s annual report and interim report. Quarterly and semi-annual accounts set forth herein have been prepared in accordance with the evaluation and recognition criteria set by the International Financial Reporting Standards (IFRS) issued by the International Accounting Standards Board (IASB) and adopted by the European Commission according to the procedure set forth in Article 6 of the European Regulation (CE) No. 1606/2002 of the European Parliament and European Council of July 19, 2002. Non-GAAP financial measures and other performance indicators disclosed throughout this press release are accompanied by explanatory notes and tables to help investors to gain a full understanding of said measures in line with guidance provided by recommendation CESR/05-178b.

Eni’s Chief Financial Officer, Alessandro Bernini, in his position as manager responsible for the preparation of the Company’s financial reports, certifies pursuant to rule 154-bis paragraph 2 of Legislative Decree No. 58/1998, that data and information disclosed in this press release correspond to the Company’s evidence and accounting books and entries.

Cautionary statement This press release, in particular the statements under the section "Outlook", contains certain forward-looking statements particularly those regarding capital expenditure, development and management of oil and gas resources, dividends, allocation of future cash flow from operations, future operating performance, gearing, targets of production and sales growth, new markets, and the progress and timing of projects. By their nature, forward-looking statements involve risks and uncertainties because they relate to events and depend on circumstances that will or may occur in the future. Actual results may differ from those expressed in such statements, depending on a variety of factors, including the timing of bringing new fields on stream; management’s ability in carrying out industrial plans and in succeeding in commercial transactions; future levels of industry product supply; demand and pricing; operational problems; general economic conditions; political stability and economic growth in relevant areas of the world; changes in laws and governmental regulations; development and use of new technology; changes in public expectations and other changes in business conditions; the actions of competitors and other factors discussed elsewhere in this document. Due to the seasonality in demand for natural gas and certain refined products and the changes in a number of external factors affecting Eni’s operations, such as prices and margins of hydrocarbons and refined products, Eni’s results from operations and changes in net borrowings for the first half of the year cannot be extrapolated on an annual basis.

Contacts E-mail: segreteriasocietaria.azionisti@eni.com

Investor Relations E-mail : investor.relations@eni.com Tel.: +39 0252051651 - Fax: +39 0252031929

Eni Press Office E-mail : ufficiostampa@eni.com Tel.: +39 0252031287 - +39 0659822040

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Eni Società per Azioni, Rome, Piazzale Enrico Mattei, 1 Share capital : euro 4,005,358,876 fully paid Tax identification number 00484960588 Tel.: +39 0659821 - Fax: +39 0659822141

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This press release for the second quarter and the first half of 2011 (unaudited) is also available on the Eni web site: eni.com .

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Table of Contents

| Quarterly consolidated
report |
| --- |
| Summary results for the second
quarter and first half of 2011 |
| (euro million) |

Second Quarter 2010 First Quarter 2011 Second Quarter 2011 % Ch. 2 Q. 11 vs. 10 First Half 2010 First Half 2011 % Ch.

| 22,902 — 4,305 | | 28,779 — 5,638 | | 24,596 — 3,810 | | 7.4 — (11.5 | ) | Net sales from operations — Operating
profit | | 47,706 — 9,152 | | 53,375 — 9,448 | | 11.9 — 3.2 | |
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
| (368 | ) | (669 | ) | (240 | ) | | | Exclusion of inventory holding (gains) losses | | (777 | ) | (909 | ) | | |
| 191 | | 130 | | 433 | | | | Exclusion
of special items | | 84 | | 563 | | | |
| | | | | | | | | of which: | | | | | | | |
| | | | | 69 | | | | -
non-recurring items | | | | 69 | | | |
| 191 | | 130 | | 364 | | | | - other special items | | 84 | | 494 | | | |
| 4,128 | | 5,099 | | 4,003 | | (3.0 | ) | Adjusted
operating profit (a) | | 8,459 | | 9,102 | | 7.6 | |
| | | | | | | | | Breakdown by division: | | | | | | | |
| 3,442 | | 4,120 | | 3,826 | | 11.2 | | Exploration
& Production | | 6,560 | | 7,946 | | 21.1 | |
| 629 | | 958 | | 251 | | (60.1 | ) | Gas & Power | | 1,896 | | 1,209 | | (36.2 | ) |
| (52 | ) | (176 | ) | (114 | ) | (119.2 | ) | Refining
& Marketing | | (146 | ) | (290 | ) | (98.6 | ) |
| (11 | ) | (12 | ) | (30 | ) | (172.7 | ) | Petrochemicals | | (70 | ) | (42 | ) | 40.0 | |
| 343 | | 342 | | 378 | | 10.2 | | Engineering
& Construction | | 632 | | 720 | | 13.9 | |
| (51 | ) | (45 | ) | (60 | ) | (17.6 | ) | Other activities | | (108 | ) | (105 | ) | (2.8 | ) |
| (75 | ) | (84 | ) | (69 | ) | (8.0 | ) | Corporate
and financial companies | | (140 | ) | (153 | ) | 9.3 | |
| (97 | ) | (4 | ) | (179 | ) | | | Impact of
unrealized intragroup profit elimination (b) | | (165 | ) | (183 | ) | | |
| (309 | ) | (83 | ) | (292 | ) | | | Net
finance (expense) income (a) | | (554 | ) | (375 | ) | | |
| 311 | | 265 | | 414 | | | | Net income from investments (a) | | 521 | | 679 | | | |
| (2,348 | ) | (2,671 | ) | (2,443 | ) | | | Income
taxes (a) | | (4,625 | ) | (5,114 | ) | | |
| 56.9 | | 50.6 | | 59.2 | | | | Adjusted tax rate | (%) | 54.9 | | 54.4 | | | |
| 1,782 | | 2,610 | | 1,682 | | (5.6 | ) | Adjusted
net profit | | 3,801 | | 4,292 | | 12.9 | |
| 1,824 | | 2,547 | | 1,254 | | (31.3 | ) | Net profit attributable to Eni ’ s
shareholders | | 4,046 | | 3,801 | | (6.1 | ) |
| (250 | ) | (474 | ) | (170 | ) | | | Exclusion
of inventory holding (gains) losses | | (530 | ) | (644 | ) | | |
| 93 | | 125 | | 352 | | | | Exclusion of special items | | (27 | ) | 477 | | | |
| | | | | | | | | of
which: | | | | | | | |
| | | | | 69 | | | | - non recurring items | | | | 69 | | | |
| 93 | | 125 | | 283 | | | | - other
special items | | (27 | ) | 408 | | | |
| 1,667 | | 2,198 | | 1,436 | | (13.9 | ) | Adjusted net profit attributable to Eni ’ s
shareholders | | 3,489 | | 3,634 | | 4.2 | |
| | | | | | | | | Net
profit attributable to Eni ’ s shareholders | | | | | | | |
| 0.50 | | 0.70 | | 0.35 | | (30.0 | ) | per share | (euro) | 1.12 | | 1.05 | | (6.3 | ) |
| 1.27 | | 1.91 | | 1.01 | | (20.5 | ) | per
ADR | ($) | 2.97 | | 2.95 | | (0.7 | ) |
| | | | | | | | | Adjusted net profit attributable to Eni ’ s
shareholders | | | | | | | |
| 0.46 | | 0.61 | | 0.40 | | (13.0 | ) | per
share | (euro) | 0.96 | | 1.00 | | 4.2 | |
| 1.17 | | 1.67 | | 1.15 | | (1.7 | ) | per ADR | ($) | 2.55 | | 2.81 | | 10.2 | |
| 3,622.4 | | 3,622.5 | | 3,622.6 | | | | Weighted
average number of outstanding shares (c) | | 3,622.4 | | 3,622.6 | | | |
| 4,585 | | 4,185 | | 4,411 | | (3.8 | ) | Net cash provided by operating activities | | 9,139 | | 8,596 | | (5.9 | ) |
| 4,328 | | 2,875 | | 3,740 | | (13.6 | ) | Capital
expenditure | | 7,107 | | 6,615 | | (6.9 | ) |

| (a) | Excluding
special items. For a detailed explanation of adjusted net
profit by division see page 27. |
| --- | --- |
| (b) | This item
mainly pertained to intra-group sales of commodities,
services and capital goods recorded in the assets of the
purchasing business segment as of the end of the period. |
| (c) | Fully diluted
(million shares). |

i
Trading environment
indicators

Second Quarter 2010 First Quarter 2011 Second Quarter 2011 % Ch. 2 Q. 11 vs. 10 First Half 2010 First Half 2011 % Ch.

78.30	104.97	117.36	49.9		Average price of Brent dated crude oil (a)		77.27	111.16	43.9
1.273	1.367	1.439	13.0		Average
EUR/USD exchange rate (b)		1.328	1.403	5.6
61.51	76.79	81.56	32.6		Average price in euro of Brent dated crude oil		58.19	79.23	36.2
3.39	1.74	1.09	(67.8	)	Average
European refining margin (c)		2.90	1.41	(51.4	)
4.56	3.35	2.20	(51.8	)	Average European refining margin Brent/Ural (c)		3.89	2.77	(28.8	)
5.68	9.09	9.36	64.8		NBP gas
price (d)		5.64	9.23	63.7
2.66	1.27	0.75	(71.8	)	Average European refining margin in euro		2.18	1.00	(54.1	)
0.7	1.1	1.4	100.0		Euribor -
three-month euro rate	(%)	0.9	1.3	44.4
0.4	0.3	0.3	(25.0	)	Libor - three-month dollar rate	(%)	0.3	0.3

| (a) | In USD
dollars per barrel. Source: Platt’s Oilgram. |
| --- | --- |
| (b) | Source: ECB. |
| (c) | In USD per
barrel FOB Mediterranean Brent dated crude oil. Source:
Eni calculations based on Platt’s Oilgram data. |
| (d) | In USD per
million btu. |

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Group results Eni reported lowered net profit attributable to Eni’s shareholders for the second quarter of 2011 at euro 1,254 million, down euro 570 million, or 31.3%, from the year-earlier quarter. The decline reflected a reduced operating performance (down by 11.5%) dragged down by weak trends in Eni’s downstream businesses, whose effects were partly offset by an improved performance from the Exploration & Production and Engineering & Construction divisions. The quarterly results were negatively affected by a higher consolidated tax rate, up by approximately 6 percentage points, mainly due to certain tax items unrelated to the Group profit for the period, namely tax charges on intercompany dividends and a non deductible tax item related to an antitrust provision. Net profit attributable to Eni’s shareholders for the first half of 2011 amounted to euro 3,801 million, down euro 245 million from 2010, or 6.1%, due to a higher share of profit attributable to non-controlling interests (euro 346 million) and higher income taxes (down euro 468 million) with an increased Group tax rate (up by two percentage points). Those negatives were partly offset by an improved operating performance (up by 3.2%) mainly in the Exploration & Production division reflecting higher oil prices, as well as lowered net finance and exchange rate expenses (up euro 224 million) reflecting a positive change in fair value evaluation of certain commodity derivatives which did not meet the formal criteria for hedge accounting.

In the second quarter of 2011 adjusted net profit attributable to Eni’s shareholders amounted to euro 1,436 million, down euro 231 million from the second quarter of 2010 (down 13.9%). In the first half of 2011 adjusted net profit was euro 3,634 million, up euro 145 million (up 4.2% from the first half of 2010). Adjusted net profit for the quarter was calculated excluding an inventory holding gain amounting to euro 170 million and special charges amounting to euro 352 million, resulting in a positive adjustment of euro 182 million. In the first half of 2011, an inventory holding gain of euro 644 million and special charges of euro 477 million resulted in a negative adjustment of euro 167 million.

In the first half of 2011, special charges on the operating profit included: (i) impairment charges amounting to euro 265 million and relating to mineral assets in the Exploration & Production segment, as certain gas properties in the USA were impaired due to negative reserve revisions and a reduced outlook for gas prices as well as certain capital expenditure made in the period for safety reasons in the Refining & Marketing and Petrochemical division plants which was written off as it related to assets totally impaired in previous reporting periods; (ii) a provision amounting to euro 69 million was accrued with regard to an antitrust proceeding in the European sector of elastomers following a decision by the European Court of Justice; (iii) negative fair value evaluation of certain commodity derivatives which did not meet the formal criteria for hedge accounting provided by IAS 39 (euro 160 million); (iv) environmental provisions and provisions for redundancy incentives (euro 42 million and euro 34 million, respectively). Special gains in the period mainly related to gains on disposal of marginal assets in the Exploration & Production division.

Results by division The decrease in the Group adjusted net profit reported in the second quarter of 2011 (down 13.9%) reflected lower adjusted operating profit (down 3%) from the Gas & Power, Refining & Marketing and Petrochemical divisions, partly offset by higher results in the Exploration & Production division and, to a lesser extent, the Engineering & Construction segment. In the first half of 2011, the Group adjusted net profit increased by 4.2%, reflecting higher operating profit (up 7.6%) mainly due to better performance reported by the Exploration & Production division and, to a lesser extent, the Engineering & Construction segment.

Gas & Power In the second quarter of 2011, the Gas & Power division reported lower adjusted operating profit which was down by 60.1% from the second quarter of 2010 (down by 36.2% in the first half of 2011). The result was negatively affected by a severe contraction in the performance of the Marketing business which suffered a loss of euro 383 million in the second quarter of 2011 compared to a profit of euro 51 million in the year ago quarter (down by euro 760 million from the first half of 2010). The Marketing business was affected by sharply lower gas margins both in Italy and Europe, which were dragged down by strong competitive pressure and oversupply. Also the quarterly performance was impacted by sales losses to shippers which import Libyan gas due to the unavailability of the raw material, lower seasonal sales and negative scenario impacts as well as lower margins on power generation. The lower results of the Marketing business were partly offset by the better operating performance of the Regulated Businesses in Italy (up by 4.6% in the quarter; up by 4.2% in the first half) and

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the improved result of the International Transport business (up by 35.1% in the quarter; up by 13.8% in the first half). Adjusted net profit of the division was euro 239 million in the first quarter (down by 54.1%) and euro 1,002 million in the first half (down by 32.1%).

Refining & Marketing In the second quarter of 2011 the Refining & Marketing division reported widening adjusted operating losses amounting to euro 114 million (a loss of euro 290 million for the first half of 2011), representing a decrease of euro 62 million from the second quarter of 2010 (down by euro 144 million from the first half of 2010). Losses were driven by sharply lower refining margins, which effects were partially offset by continuing optimization and efficiency efforts as well as a steady performance in the Marketing business. Net adjusted loss for the second quarter and first half of 2011 widened by euro 60 million and euro 127 million, respectively as a result of the negative trends in the operations.

Petrochemicals In the second quarter of 2011 the Petrochemical division reported widening adjusted operating losses, down by euro 19 million (from -euro 11 million to -euro 30 million). This trend was negatively impacted by lower margins as high supply costs of oil-based feedstock were not fully recovered in sales prices on end markets, and a substantial decrease in demand due to expectations for a reduction of prices of petrochemical commodities on the marketplace. The Petrochemicals results for the first half of 2011 benefited from the good performance achieved in the first quarter of the year with the operating loss decreasing by 40% (from -euro 70 million to -euro 42 million). Adjusted net profit was stable in the second quarter of 2011 and almost halved in the first half of 2011.

Exploration & Production In the second quarter of 2011, the Exploration & Production division reported improved adjusted operating profit, which was up by 11.2% to euro 3,826 million (up 21.1% in the first half) driven by higher hydrocarbon realizations in dollars (up by 38.7% and 31.5% on average, in the second quarter and the first half, respectively). These positives were partly offset by the impact associated with a lowered Libyan output and the appreciation of the euro vs. the US dollar (up by 13%). Adjusted net profit for the second quarter of 2011 was up by 17% to euro 1,684 million and by 31% to euro 3,517 million for the first half of 2011.

Engineering & Construction The Engineering & Construction segment reported a solid operating performance amounting to euro 378 million and euro 720 million in the second quarter and first half of 2011, respectively (up by 10.2% and 13.9%) driven by revenue gains and higher profitability of works executed in the Engineering & Construction business. Adjusted net profit increased by 1.5% and 14%, respectively in the two reporting periods.

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Liquidity and capital resources Summarized Group Balance Sheet 3

(euro million) Dec. 31, 2010 March 31, 2011 June 30, 2011 Change vs Dec. 31, 2010 Change vs Mar. 31, 2011

| Fixed assets — Property,
plant and equipment | 67,404 | | 65,949 | | 67,162 | | (242 | ) | 1,213 | |
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
| Other properties | | | | | | | | | | |
| Inventories
- compulsory stock | 2,024 | | 2,312 | | 2,370 | | 346 | | 58 | |
| Intangible assets | 11,172 | | 11,072 | | 10,891 | | (281 | ) | (181 | ) |
| Equity-accounted
investments and other investments | 6,090 | | 6,132 | | 6,079 | | (11 | ) | (53 | ) |
| Receivables and securities held for operating
purposes | 1,743 | | 1,675 | | 1,746 | | 3 | | 71 | |
| Net
payables related to capital expenditures | (970 | ) | (732 | ) | (1,130 | ) | (160 | ) | (398 | ) |
| | 87,463 | | 86,408 | | 87,118 | | (345 | ) | 710 | |
| Net
working capital | | | | | | | | | | |
| Inventories | 6,589 | | 6,414 | | 6,911 | | 322 | | 497 | |
| Trade
receivables | 17,221 | | 17,665 | | 15,277 | | (1,944 | ) | (2,388 | ) |
| Trade payables | (13,111 | ) | (11,665 | ) | (11,293 | ) | 1,818 | | 372 | |
| Tax
payables and provisions for net deferred tax liabilities | (2,684 | ) | (4,374 | ) | (3,753 | ) | (1,069 | ) | 621 | |
| Provisions | (11,792 | ) | (11,501 | ) | (11,743 | ) | 49 | | (242 | ) |
| Other
current assets and liabilities | (1,286 | ) | (521 | ) | (180 | ) | 1,106 | | 341 | |
| | (5,063 | ) | (3,982 | ) | (4,781 | ) | 282 | | (799 | ) |
| Provisions
for employee post-retirement benefits | (1,032 | ) | (1,019 | ) | (1,064 | ) | (32 | ) | (45 | ) |
| Net assets held for sale including net
borrowings | 479 | | 410 | | 409 | | (70 | ) | (1 | ) |
| Capital
employed, net | 81,847 | | 81,817 | | 81,682 | | (165 | ) | (135 | ) |
| Shareholders’ equity: | | | | | | | | | | |
| - Eni
shareholders’ equity | 51,206 | | 51,966 | | 50,942 | | (264 | ) | (1,024 | ) |
| - Non-controlling interest | 4,522 | | 4,900 | | 4,762 | | 240 | | (138 | ) |
| | 55,728 | | 56,866 | | 55,704 | | (24 | ) | (1,162 | ) |
| Net borrowings | 26,119 | | 24,951 | | 25,978 | | (141 | ) | 1,027 | |
| Total
liabilities and shareholders’ equity | 81,847 | | 81,817 | | 81,682 | | (165 | ) | (135 | ) |
| Leverage | 0.47 | | 0.44 | | 0.47 | | | | 0.03 | |

The appreciation of the euro versus the US dollar as at June 30, 2001 from December 31, 2010 (the EUR/USD exchange rate was 1.445 as of June 30, 2011, as compared to 1.336 as of December 31, 2010, up by 8%) reduced net capital employed, net equity and net borrowings by euro 2,766 million, euro 2,374 million, and euro 392 million, respectively, due to exchange rate translation differences. The appreciation of the euro vs. the US dollar from March 31, 2011 was lower (up by 2%), resulting in a reduction of net capital employed, net equity and net borrowings of euro 586 million, euro 494 million, and euro 92 million, respectively compared to that date.

The decrease in net equity due to currency translation differences coupled with dividend payment was absorbed by net profit for the period and the slight decrease in net borrowings, resulting in the Group leverage being unchanged at 0.47 as of June 30, 2011 compared to the level as at December 31, 2010. The Group leverage increased (by 0.03) compared to the level of March 31, 2011 due to the higher level of net borrowings registered in the second quarter in relation to dividend payment.

Fixed assets amounted to euro 87,118 million, representing a decrease of euro 345 million from December 31, 2010, reflecting negative exchange rate translation differences, which were partly offset by the positive balance of capital expenditure incurred in the period (euro 6,615 million) and depreciation, depletion, amortization and impairment charges (euro 4,278 million).

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(3) The summarized group balance sheet aggregates the amount of assets and liabilities derived from the statutory balance sheet in accordance with functional criteria which consider the enterprise conventionally divided into the three fundamental areas focusing on resource investments, operations and financing. Management believes that this summarized group balance sheet is useful information in assisting investors to assess Eni’s capital structure and to analyze its sources of funds and investments in fixed assets and working capital. Management uses the summarized group balance sheet to calculate key ratios such as return on capital employed (ROACE) and the proportion of net borrowings to shareholders’ equity (leverage) intended to evaluate whether Eni’s financing structure is sound and well-balanced.

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Net working capital amounted to a negative euro 4,781 million, representing a slight increase of euro 282 million from the closing balance as of December 31, 2010. This was due to increased current and non current other assets and liabilities (up euro 1,106 million) mainly reflecting payment of payables in respect of the Company’s gas suppliers outstanding as the end of 2010 due to the take-or-pay position accrued in 2010 (euro 170 million) and a higher balance of receivables and payables from joint-venture partners and dividend receivables from entities accounted at cost in the Exploration & Production division (for a total amount of approximately euro 300 million). This increase was partly offset by higher tax payables and net provisions for deferred tax liabilities accrued in the quarter (down euro 1,069 million). The reduction of trade receivables of euro 1,944 million was absorbed by a similar amount relating to the reduction of trade payables (euro 1,818 million).

Net assets held for sale including related liabilities (euro 409 million) mainly related to the following assets: the subsidiary Gas Brasiliano Distribuidora SA and the associate TAG Gmbh, both of which are in the final stage of the divestment process as preliminary agreements have already been signed with third parties, and Eni’s subsidiaries and associates engaged in gas transport in Germany and Switzerland for which divestment plans have been progressing in accordance with Eni’s commitments with the European Commission.

Shareholders’ equity including non-controlling interest of euro 55,704 million was barely unchanged from 2010. The comprehensive income for the period of euro 2,156 million which consisted of net profit for the period (euro 4,459 million), partly offset by negative exchange rate translation differences (down euro 2,374 million) and other items, was absorbed by dividend payments to Eni’s shareholders (euro 1,811 million) and non-controlling interests, mainly Snam Rete Gas and Saipem (euro 397 million).

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Summarized Group Cash Flow Statement 4 (euro million)

Second Quarter 2010 First Quarter 2011 Second Quarter 2011 First Half 2010 First Half 2011

1,939		2,959		1,500		Net profit	4,358		4,459
						Adjustments
to reconcile net profit to cash provided by operating
activities:
2,502		2,003		1,939		- depreciation, depletion and amortization and
other non monetary items	4,403		3,942
(75	)	(19	)	(9	)	- net
gains on disposal of assets	(244	)	(28	)
2,362		2,907		2,280		- dividends, interests, taxes and other changes	4,833		5,187
483		(1,729	)	1,367		Changes in
working capital related to operations	113		(362	)
(2,626	)	(1,936	)	(2,666	)	Dividends received, taxes paid, interests (paid)
received during the period	(4,324	)	(4,602	)
4,585		4,185		4,411		Net
cash provided by operating activities	9,139		8,596
(4,328	)	(2,875	)	(3,740	)	Capital expenditure	(7,107	)	(6,615	)
(76	)	(41	)	(87	)	Investments
and purchase of consolidated subsidiaries and businesses	(115	)	(128	)
66		26		77		Disposals	795		103
(88	)	(195	)	295		Other cash
flow related to capital expenditure, investments and
disposals	(206	)	100
159		1,100		956		Free cash flow	2,506		2,056
94		(67	)	47		Borrowings
(repayment) of debt related to financing activities	6		(20	)
1,118		(637	)	750		Changes in short and long-term financial debt	(366	)	113
(2,161	)	5		(2,181	)	Dividends
paid and changes in non-controlling interest and reserves	(2,148	)	(2,176	)
20		(28	)	(20		Effect of changes in consolidation and exchange
differences	69		(48	)
(770	)	373		(448	)	NET
CASH FLOW FOR THE PERIOD	67		(75	)

Change in net borrowings (euro million)

Second Quarter 2010 First Quarter 2011 Second Quarter 2011 First Half 2010 First Half 2011

159		1,100	956		Free cash flow	2,506		2,056
(288	)	63	198		Exchange
differences on net borrowings and other changes	(645	)	261
(2,161	)	5	(2,181	)	Dividends paid and changes in non-controlling
interest and reserves	(2,148	)	(2,176	)
(2,290	)	1,168	(1,027	)	CHANGE
IN NET BORROWINGS	(287	)	141

Net cash provided by operating activities amounted to euro 8,596 million in the first half of 2011. Proceeds from divestments amounted to euro 103 million. Those cash inflows were used to fund cash outflows relating to capital expenditure totaling euro 6,615 million and dividend payments amounting to euro 2,208 million (which included payment of the balance of the 2010 dividend to Eni’s shareholders amounting to euro 1,811 million and the remaining amount to minorities, particularly Saipem and Snam Rete Gas) and helped to pay down finance debt (down by euro 141 million from December 31, 2010). Divestments mainly related to non-strategic assets in the Exploration & Production division.

Net cash provided by operating activities in the first half was negatively affected by lower cash inflow of euro 99 million associated with transferring trade receivables due beyond December 31, 2010 to factoring institutions amounting to euro 1,279 million in the fourth quarter of 2010, while the current half benefited from transferring euro 1,180 million of trade receivables due beyond June 30, 2011 to the same institutions.

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(4) Eni’s summarized group cash flow statement derives from the statutory statement of cash flows. It enables investors to understand the link existing between changes in cash and cash equivalents (deriving from the statutory cash flows statement) and in net borrowings (deriving from the summarized cash flow statement) that occurred from the beginning of the period to the end of period. The measure enabling such a link is represented by the free cash flow which is the cash in excess of capital expenditure needs. Starting from free cash flow it is possible to determine either: (i) changes in cash and cash equivalents for the period by adding/deducting cash flows relating to financing debts/receivables (issuance/repayment of debt and receivables related to financing activities), shareholders’ equity (dividends paid, net repurchase of own shares, capital issuance) and the effect of changes in consolidation and of exchange rate differences; (ii) change in net borrowings for the period by adding/deducting cash flows relating to shareholders’ equity and the effect of changes in consolidation and of exchange rate differences. The free cash flow is a non-GAAP measure of financial performance.

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Other information

Continuing listing standards provided by Article No. 36 of Italian exchanges regulation about issuers that control subsidiaries incorporated or regulated in accordance with laws of extra-EU Countries.

Certain provisions have been enacted regulating continuing Italian listing standards of issuers controlling subsidiaries that are incorporated or regulated in accordance with laws of extra-EU Countries, also having a material impact on the consolidated financial statements of the parent company. Regarding the aforementioned provisions, as of June 30, 2011, nine of Eni’s subsidiaries – Burren Energy (Bermuda) Ltd, Eni Congo SA, Eni Norge AS, Eni Petroleum Co Inc, NAOC-Nigerian Agip Oil Co Ltd, Nigerian Agip Exploration Ltd, Trans Tunisian Pipeline Co Ltd, Burren Energy (Congo) Ltd and Eni Finance USA Inc – fall within the scope of the new continuing listing standard as stated in the quarterly consolidated report as of March 31, 2011. Eni has already adopted adequate procedures to ensure full compliance with the new regulation.

Financial and operating information by division for the second quarter and the first half of 2011 is provided in the following pages.

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Exploration & Production

Second Quarter 2010 First Quarter 2011 Second Quarter 2011 % Ch. 2 Q. 11 vs. 10 First Half 2010 First Half 2011 % Ch.

| 7,184 | | 7,474 | | 6,778 | (5.7 | ) | RESULTS — Net
sales from operations | (euro million) | 14,569 | | 14,252 | (2.2 | ) |
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
| 3,401 | | 4,106 | | 3,693 | 8.6 | | Operating profit | | 6,698 | | 7,799 | 16.4 | |
| 41 | | 14 | | 133 | | | Exclusion
of special items: | | (138 | ) | 147 | | |
| 29 | | | | 141 | | | - asset impairments | | 29 | | 141 | | |
| (7 | ) | (17 | ) | (11 | ) | | - gains
on disposal of assets | | (167 | ) | (28 | ) | |
| 6 | | 2 | | 2 | | | - provision for redundancy incentives | | 8 | | 4 | | |
| 13 | | 29 | | 1 | | | -
re-measurement gains/losses on commodity derivatives | | (8 | ) | 30 | | |
| 3,442 | | 4,120 | | 3,826 | 11.2 | | Adjusted operating profit | | 6,560 | | 7,946 | 21.1 | |
| (57 | ) | (57 | ) | (59 | ) | | Net
financial income (expense) (a) | | (106 | ) | (116 | ) | |
| 199 | | 117 | | 295 | | | Net income (expense) from investments (a) | | 266 | | 412 | | |
| (2,145 | ) | (2,347 | ) | (2,378 | ) | | Income
taxes (a) | | (4,036 | ) | (4,725 | ) | |
| 59.8 | | 56.1 | | 58.5 | | | Tax rate (%) | | 60.1 | | 57.3 | | |
| 1,439 | | 1,833 | | 1,684 | 17.0 | | Adjusted
net profit | | 2,684 | | 3,517 | 31.0 | |
| | | | | | | | Results also include: | | | | | | |
| 1,778 | | 1,588 | | 1,580 | (11.1 | ) | -
amortization and depreciation | | 3,458 | | 3,168 | (8.4 | ) |
| | | | | | | | of which: | | | | | | |
| 318 | | 266 | | 310 | (2.5 | ) | exploration
expenditures | | 630 | | 576 | (8.6 | ) |
| 184 | | 163 | | 234 | 27.2 | | - amortization of exploratory drilling
expenditures and other | | 415 | | 397 | (4.3 | ) |
| 134 | | 103 | | 76 | (43.2 | ) | -
amortization of geological and geophysical exploration
expenses | | 215 | | 179 | (16.7 | ) |
| 3,186 | | 1,952 | | 2,767 | (13.2 | ) | Capital expenditure | | 5,150 | | 4,719 | (8.4 | ) |
| | | | | | | | of
which: | | | | | | |
| 259 | | 236 | | 253 | (2.3 | ) | - exploratory expenditure (b) | | 515 | | 489 | (5.0 | ) |
| | | | | | | | Production (c) (d) | | | | | | |
| 980 | | 899 | | 793 | (19.1 | ) | Liquids (e) | (kbbl/d) | 995 | | 846 | (15.0 | ) |
| 4,319 | | 4,356 | | 3,867 | (9.8 | ) | Natural
gas | (mmcf/d) | 4,466 | | 4,110 | (7.9 | ) |
| 1,758 | | 1,684 | | 1,489 | (15.3 | ) | Total hydrocarbons | (kboe/d) | 1,800 | | 1,586 | (11.9 | ) |
| | | | | | | | Average
realizations | | | | | | |
| 72.33 | | 95.36 | | 108.59 | 50.1 | | Liquids (e) | ($/bbl) | 71.63 | | 101.89 | 42.2 | |
| 5.81 | | 5.99 | | 6.34 | 9.3 | | Natural
gas (e) | ($/mmcf) | 5.77 | | 6.15 | 6.7 | |
| 55.06 | | 66.62 | | 76.39 | 38.7 | | Total hydrocarbons | ($/boe) | 54.26 | | 71.34 | 31.5 | |
| | | | | | | | Average
oil market prices | | | | | | |
| 78.30 | | 104.97 | | 117.36 | 49.9 | | Brent dated | ($/bbl) | 77.27 | | 111.16 | 43.9 | |
| 61.51 | | 76.79 | | 81.56 | 32.6 | | Brent
dated | (euro/bbl) | 58.19 | | 79.23 | 36.2 | |
| 77.78 | | 93.98 | | 102.44 | 31.7 | | West Texas Intermediate | ($/bbl) | 78.23 | | 98.21 | 25.5 | |
| 152.56 | | 146.91 | | 153.97 | 0.9 | | Gas Henry
Hub | ($/kcm) | 167.39 | | 150.79 | (9.9 | ) |

| (a) | Excluding
special items. |
| --- | --- |
| (b) | Includes
exploration bonuses. |
| (c) | Supplementary
operating data is provided on page 46. |
| (d) | Includes
Eni’s share of equity-accounted entities production. |
| (e) | Includes
condensates. |

Results

In the second quarter of 2011 , the Exploration & Production division reported an adjusted operating profit amounting to euro 3,826 million, increasing by euro 384 million, or 11.2%, from the second quarter of 2010, driven by higher oil and gas realizations (oil up 50.1%; natural gas up 9.3%). These positive factors were partly offset by the impact associated with lower Libyan output and by the appreciation of the euro vs the US dollar (down approximately euro 300 million).

Special charges excluded from adjusted operating profit amounted to euro 133 million in the second quarter 2011 (euro 147 million in the first half) and consisted mainly of impairment charges of oil&gas properties in the USA, reflecting a reduced outlook for gas prices and downward reserve revisions, gains on the divestment of non-strategic assets as well as the re-measurement gains recorded on fair value evaluation of the ineffective

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portion of certain cash flow hedge commodity derivatives. Adjusted net profit for the second quarter of 2011 was up by euro 245 million, or 17%, to euro 1,684 million due to an improved operating performance and higher results from equity-accounted and cost-accounted entities.

Adjusted operating profit for the first half of 2011 was euro 7,946 million, representing an increase of euro 1,386 million from the first half of 2010, up 21.1%, driven by higher oil and gas realizations (oil up 42.2% and natural gas 6.7%), partly offset by the impact associated with lower Libyan output. In addition, the result of the division was negatively impacted by the appreciation of the euro vs the US dollar (down approximately euro 270 million).

Adjusted net profit for the first half of 2011 increased by euro 833 million to euro 3,517 million from the first half of 2010, up by 31%, due to an improved operating performance and higher results from equity-accounted or cost-accounted entities. The increase was also supported by a lower tax rate (down 3 percentage points) mainly due to non-taxable dividends from cost-accounted entities earned in the period and the reversal to profit of certain provisions which were taxed in previous quarters.

Operating review

Eni reported liquids and gas production of 1,489 kboe/d for the second quarter of 2011 , down by 15.3% from the second quarter of 2010. The magnitude of this reduction was the result of the shutdown of activities at almost all Eni producing sites in Libya and the closure of the GreenStream pipeline transporting gas from Libya to Italy. Performance for the quarter was also negatively impacted by lower entitlements in the Company’s PSAs due to higher oil prices with an overall effect of 36 kboe/d compared to the year-earlier quarter, in addition to the above mentioned loss of Libyan output amounting to approximately 200 kboe/d compared to the first quarter of 2010. Net of those effects, production for the quarter decreased by 2 percentage points due to planned facility downtime mainly in Italy. Production decline at mature fields was absorbed by continuing production ramp up in Norway, Egypt and Iraq.

Liquids production (793 kbbl/d) decreased by 187 kbbl/d, or 19.1% due to production losses in Libya and lower entitlements in the Company’s PSAs and planned facility downtime. The main increases were registered in Iraq due to start-up in the Zubair field (Eni 32.8%) and an improved performance in Norway. Natural gas production (3,867 mmcf/d) decreased by 452 mmcf/d (down 9.8%) due to production losses in Libya.

Eni reported liquids and gas production of 1,586 kboe/d in the first half of 2011 down by 11.9% from the first half of 2010 due to production losses in Libya. Performance for the first half was also negatively impacted by lower entitlements in the Company’s PSAs due to higher oil prices with an overall effect of 30 kboe/d from the first half of 2010, in addition to the above mentioned loss of Libyan output amounting to approximately 170 kboe/d. Net of these effects, production for the first half decreased by 1 percentage point mainly due to planned facility downtime. Production decline at mature fields was absorbed by continuing production ramp up in Norway, Egypt and Iraq.

Liquids production (846 kbbl/d) decreased by 149 kbbl/d, or 15% due to production losses in Libya and lower entitlements in the Company’s PSAs and planned facility downtime, partly offset by the growth registered in Norway and Iraq. Natural gas production (4,110 mmcf/d) decreased by 356 mmcf/d (down 7.9%) due to production losses in Libya.

Liquids and gas realizations for the second quarter increased by 50.1% on average in dollar terms (up by 42.2% in the first half), driven by higher oil prices for market benchmarks (the Brent crude price increased by 49.9% in the quarter; 43.9% in the first half). Eni’s average liquids realizations decreased by 1.69 $/bbl in the second quarter (1.50 $/bbl in the first half) due to the settlement of certain commodity derivatives relating to the sale of 2.3 mmbbl in the quarter (4.5 mmbbl in the first half). This was part of a derivative transaction the Company entered into in order to hedge exposure to the variability in future cash flows expected from the sale of a portion of the Company’s proved reserves for an original amount of approximately 125.7 mmbbl in

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the 2008-2011 period, decreasing to approximately 4.5 mmbbl as of the end of June 2011. Eni’s average gas realizations increased at a slower pace in the quarter (up 9.3% in the quarter; up 6.7% in the first half), due to time lags in oil-linked pricing formulae and weak spot price in some areas (in particular USA).

Second Quarter 2010 First Quarter 2011 Second Quarter 2011 First Half 2010 First Half 2011

| 86.4 | | 75.7 | | 73.9 | | LIQUIDS — Sales
volumes | (mmbbl) | 172.2 | | 149.6 | |
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
| 7.1 | | 2.2 | | 2.3 | | Sales volumes hedged by derivatives (cash flow
hedge) | | 14.2 | | 4.5 | |
| 73.64 | | 96.66 | | 110.28 | | Total
price per barrel, excluding derivatives | ($/bbl) | 72.85 | | 103.39 | |
| (1.31 | ) | (1.30 | ) | (1.69 | ) | Realized gains (losses) on derivatives | | (1.22 | ) | (1.50 | ) |
| 72.33 | | 95.36 | | 108.59 | | Total
average price per barrel | | 71.63 | | 101.89 | |

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Gas & Power

Second Quarter 2010 First Quarter 2011 Second Quarter 2011 % Ch. 2 Q. 11 vs. 10 First Half 2010 First Half 2011 % Ch.

| 5,960 | | 10,614 | | 6,235 | | 4.6 | | RESULTS — Net
sales from operations | (euro million) | 14,668 | | 16,849 | | 14.9 | |
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
| 592 | | 910 | | 184 | | (68.9 | ) | Operating profit | | 1,908 | | 1,094 | | (42.7 | ) |
| (25 | ) | (41 | ) | (12 | ) | | | Exclusion
of inventory holding (gains) losses | | (106 | ) | (53 | ) | | |
| 62 | | 89 | | 79 | | | | Exclusion of special items: | | 94 | | 168 | | | |
| (1 | ) | 1 | | 3 | | | | -
environmental charges | | 4 | | 4 | | | |
| | | | | | | | | - asset impairments | | 10 | | | | | |
| 1 | | | | 5 | | | | - gains
on disposal of assets | | 1 | | 5 | | | |
| 2 | | 3 | | 3 | | | | - provision for redundancy incentives | | 8 | | 6 | | | |
| 60 | | 80 | | 74 | | | | -
re-measurement gains/losses on commodity derivatives | | 71 | | 154 | | | |
| | | 5 | | (6 | ) | | | - other | | | | (1 | ) | | |
| 629 | | 958 | | 251 | | (60.1 | ) | Adjusted
operating profit | | 1,896 | | 1,209 | | (36.2 | ) |
| 51 | | 288 | | (383 | ) | .. | | Marketing | | 665 | | (95 | ) | .. | |
| 481 | | 554 | | 503 | | 4.6 | | Regulated
businesses in Italy | | 1,014 | | 1,057 | | 4.2 | |
| 97 | | 116 | | 131 | | 35.1 | | International transport | | 217 | | 247 | | 13.8 | |
| 9 | | 5 | | 16 | | | | Net
finance income (expense) (a) | | 7 | | 21 | | | |
| 95 | | 116 | | 103 | | | | Net income from investments (a) | | 195 | | 219 | | | |
| (212 | ) | (316 | ) | (131 | ) | | | Income
taxes (a) | | (622 | ) | (447 | ) | | |
| 28.9 | | 29.3 | | 35.4 | | | | Tax rate | (%) | 29.6 | | 30.8 | | 4.1 | |
| 521 | | 763 | | 239 | | (54.1 | ) | Adjusted
net profit | | 1,476 | | 1,002 | | (32.1 | ) |
| 367 | | 279 | | 446 | | 21.5 | | Capital expenditures | | 677 | | 725 | | 7.1 | |
| | | | | | | | | Natural
gas sales | (bcm) | | | | | | |
| 6.27 | | 11.98 | | 7.11 | | 13.4 | | Italy | | 17.14 | | 19.09 | | 11.4 | |
| 12.92 | | 20.35 | | 13.89 | | 7.5 | | International
sales | | 32.56 | | 34.24 | | 5.2 | |
| 10.87 | | 18.28 | | 11.59 | | 6.6 | | - Rest of Europe | | 28.48 | | 29.87 | | 4.9 | |
| 0.71 | | 1.32 | | 1.59 | | 123.9 | | - Extra
European markets | | 1.14 | | 2.91 | | 155.3 | |
| 1.34 | | 0.75 | | 0.71 | | (47.0 | ) | - E&P sales in Europe and in the Gulf of
Mexico | | 2.94 | | 1.46 | | (50.3 | ) |
| 19.19 | | 32.33 | | 21.00 | | 9.4 | | WORLDWIDE
GAS SALES | | 49.70 | | 53.33 | | 7.3 | |
| | | | | | | | | of which: | | | | | | | |
| 15.81 | | 28.77 | | 18.15 | | 14.8 | | - Sales of
consolidated subsidiaries | | 42.26 | | 46.92 | | 11.0 | |
| 2.04 | | 2.81 | | 2.14 | | 4.9 | | - Eni’s share of sales of natural gas of
affiliates | | 4.50 | | 4.95 | | 10.0 | |
| 1.34 | | 0.75 | | 0.71 | | (47.0 | ) | - E&P
sales in Europe and in the Gulf of Mexico | | 2.94 | | 1.46 | | (50.3 | ) |
| 9.61 | | 9.68 | | 9.66 | | 0.5 | | Electricity sales | (TWh) | 18.61 | | 19.34 | | 3.9 | |
| 6.76 | | 6.25 | | 6.77 | | 0.1 | | - Free
market | | 12.97 | | 13.02 | | 0.4 | |
| 1.70 | | 2.41 | | 1.70 | | 0.0 | | - Italian Exchange for electricity | | 3.54 | | 4.11 | | 16.1 | |
| 0.81 | | 0.83 | | 0.75 | | (7.4 | ) | -
Industrial plants | | 1.56 | | 1.58 | | 1.3 | |
| 0.34 | | 0.19 | | 0.44 | | 29.4 | | - Other (b) | | 0.54 | | 0.63 | | 16.7 | |
| 19.04 | | 23.59 | | 18.31 | | (3.8 | ) | Gas
volumes transported in Italy | (bcm) | 43.02 | | 41.90 | | (2.6 | ) |

| (a) | Excluding
special items. |
| --- | --- |
| (b) | Including
positive and negative imbalances. |

Results

In the second quarter of 2011 , the Gas & Power division reported adjusted operating profit of euro 251 million, a decrease of euro 378 million from the second quarter of 2010, down 60.1% dragged down by a sharply lower performance in the Marketing business. The Marketing business results did not take into account the possible benefit associated with ongoing renegotiations of the Company’s long-term gas purchase contracts which may become effective earlier than end of June 2011. These results were also affected by gains on non-hedging commodity derivatives amounting to euro 52 million which could be associated with future sales of gas and electricity, while the second quarter of 2010 did not take into account derivative gains amounting to euro 61 million recognized in previous reporting periods, which could be associated with the sale of gas and electricity occurred in the 2010 second quarter. As those derivatives did not meet the formal criteria to be designated as hedges under IFRS, the Company was barred from applying hedge accounting and thus gains and losses associated with those derivatives cannot be brought forward to the reporting periods when the associated sales occur. However, in assessing the underlying performance of the Marketing business, management calculates the EBITDA pro-forma adjusted which represents those derivatives as being hedges with associated gains and losses recognized in the reporting period

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when the relevant sales occur. Management believes that disclosing this measure is helpful in assisting investors to understand these particular business trends (see page 23). The EBITDA pro-forma adjusted also includes Eni’s share of results of entities which are equity-accounted for statutory reporting purposes and confirms the size of the decline of the Marketing activity reflecting underlying business trends. Special items excluded from operating profit amounted to net charges of euro 79 million for the quarter (euro 168 million in the first half). These mainly related to negative fair value evaluation of certain commodity derivatives (euro 74 million and euro 154 million, respectively) which did not meet the formal criteria for hedge accounting provided by IAS 39. Adjusted net profit for the second quarter of 2011 was euro 239 million, a decrease of euro 282 million from 2010 (down by 54.1%) due to lowered operating performance.

In the first half of 2011 , the Gas & Power division reported adjusted operating profit of euro 1,209 million, a decrease of euro 687 million from the first half of 2010, down 36.2%. The decrease was due to sharply lower results delivered by the Marketing business, partly offset by positive results of the Regulated Businesses in Italy and International Transport. The Marketing business results did not take into account the possible benefit associated with ongoing renegotiations of the Company’s long-term gas purchase contracts which may become effective earlier than end of June 2011. These were also affected by higher gains on non-hedging commodity derivatives amounting to euro 111 million which could be associated with future sales of gas and electricity. The first half of 2010 results did not take into account commodity derivative gains of euro 82 million accrued in previous reporting periods. The EBITDA pro-forma adjusted which represents those derivatives as being hedges with associated gains and losses recognized in the reporting period when the relevant sales showed a wider decline (down 38.3 from the first half of 2010) of the Marketing activity reflecting underlying business trends. The EBITDA pro-forma adjusted also includes Eni’s share of results of entities which are equity-accounted for statutory reporting purposes. Adjusted net profit for the first half of 2011 was euro 1,002 million, a decrease of euro 474 million from the first half of 2010 (down by 32.1%) due to a lowered operating performance.

Operating review

Marketing In the second quarter of 2011 , the Marketing business reported sharply lower results due to an adjusted operating loss of euro 383 million, from a profit of euro 51 million registered in the second quarter of 2010 (down by euro 434 million). Marketing results were negatively impacted by:

| (i) | weaker margins on gas sales
registered in Italy and European markets, due to
increasing competitive pressures, a prevailing oversupply
in the marketplace as well as weak demand trends which
negatively impacted selling prices; |
| --- | --- |
| (ii) | lower margins on power
generation sales; |
| (iii) | reduced sales of Libyan gas
to shippers to Italy; |
| (iv) | lower seasonal gas sales and
unfavorable scenario effects. |

These negative trends were partly offset by higher gas sales achieved by consolidated subsidiaries (up by 14.8% for the quarter). Performance for the quarter also included a loss of euro 10 million recorded on fair value evaluation of certain commodity derivatives the Company entered into to manage economic margins as provided by the new business model of the Marketing activity.

In the first half of 2011 , net operating loss amounted to euro 95 million, a decrease of euro 760 million from the same period of the previous year, due to the same drivers described in the disclosure on the second quarter results.

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NATURAL GAS SALES BY MARKET (bcm)

Second Quarter 2010 First Quarter 2011 Second Quarter 2011 % Ch. 2 Q. 11 vs. 10 First Half 2010 First Half 2011 % Ch.

6.27	11.98	7.11	13.4		ITALY	17.14	19.09	11.4
0.65	2.24	0.84	29.2		-
Wholesalers	2.58	3.08	19.4
0.14			(100.0	)	- Gas release	0.54
0.71	1.6	1.19	67.6		- Italian
exchange for gas and spot markets	1.75	2.79	59.4
1.51	1.99	1.75	15.9		- Industries	3.09	3.74	21.0
0.14	0.46	0.09	(35.7	)	-
Medium-sized enterprises and services	0.66	0.55	(16.7	)
0.83	1.17	1.17	41.0		- Power generation	1.58	2.34	48.1
0.76	2.87	0.54	(28.9	)	-
Residential	3.87	3.41	(11.9	)
1.53	1.65	1.53			- Own consumption	3.07	3.18	3.6
12.92	20.35	13.89	7.5		INTERNATIONAL
SALES	32.56	34.24	5.2
10.87	18.28	11.59	6.6		Rest of Europe	28.48	29.87	4.9
2.13	1.85	0.56	(73.7	)	-
Importers in Italy	5.35	2.41	(55.0	)
8.74	16.43	11.03	26.2		- European markets	23.13	27.46	18.7
1.7	2.04	1.71	0.6		Iberian
Peninsula	3.33	3.75	12.6
1.25	2.07	1.67	33.6		Germany-Austria	3.07	3.74	21.8
2.64	4.02	3.06	15.9		Belgium	7.86	7.08	(9.9	)
0.26	1.07	0.27	3.8		Hungary	1.35	1.34	(0.7	)
0.88	1.67	1.26	43.2		Northern
Europe	2.29	2.93	27.9
0.47	1.86	1.41	200.0		Turkey	1.45	3.27	125.5
1.24	2.55	1.58	27.4		France	3.01	4.13	37.2
0.3	1.15	0.07	(76.7	)	Other	0.77	1.22	58.4
0.71	1.32	1.59	123.9		Extra
European markets	1.14	2.91	155.3
1.34	0.75	0.71	(47.0	)	E&P sales in Europe and in the Gulf of
Mexico	2.94	1.46	(50.3	)
19.19	32.33	21.00	9.4		WORLDWIDE
GAS SALES	49.70	53.33	7.3

Sales of natural gas for the second quarter of 2011 were 21 bcm (including Eni’s own consumption, Eni’s share of sales made by equity-accounted entities and upstream sales in Europe and the Gulf of Mexico) registering an increase of 1.81 bcm, up 9.4%, which reflected an improved performance both in Europe and the domestic market. Sales volumes in the Italian market amounted to 7.11 bcm, up 0.84 bcm or 13.4%, due to higher spot volumes on the PVS (up 0.48 bcm), as a number of importers to Italy requested gas supplies to replace the Libyan gas, as well as client additions and higher gas off-takes in the power generation (up 0.34 bcm), wholesalers (up 0.19 bcm) and industrial segments (up 0.24 bcm) which gave a boost to Eni’s market share. The residential segment registered a decrease due to lower seasonal consumption (down 0.22 bcm). Sales to shippers which import gas to Italy decreased by 1.57 bcm (down 73.7%) due to reduced gas off-takes as well as lower availability of Libyan gas resulting from the closure of the GreenStream importing pipeline. Sales in the European market increased by 2.29 bcm (or 26.2%) in particular in Turkey (up 0.94 bcm), Germany/Austria (up 0.42 bcm), Belgium (up 0.42 bcm), UK/Northern Europe (up 0.38 bcm) and France (up 0.34 bcm).

Sales of natural gas (including Eni’s own consumption, Eni’s share of sales made by accounted entities and upstream sales in Europe and the Gulf of Mexico) for the first half of 2011 were 53.33 bcm registering an increase of 3.63 bcm, up 7.3% from the first half of 2010. Sales in Italy were 19.09 bcm increasing by 1.95 bcm from the first half 2010 (up 11.4%) due to higher spot sales on the PVS (up 1.04 bcm) and positive effects of marketing activities aimed at recapturing clients and increasing market share in main utilization segments coupled with higher off-takes by large industrial clients (power generation up 0.76 bcm; industrial up 0.65 bcm; wholesalers up 0.50 bcm). The residential segment registered a decrease due to lower seasonal consumption (down 0.46 bcm). Sales to shippers which import gas to Italy decreased by 2.94 bcm (down 55%). This was due to reduced gas off-takes and lower availability of Libyan gas resulting from the closure of the GreenStream importing pipeline.

Sales increased in all European markets to 27.46 bcm (up 4.33 bcm, or 18.7% from the first half of 2010) except for sales in Belgium decreasing by 0.78 bcm due to lower seasonal gas sales and increasing competitive pressure. Main increases were recorded in the target markets of Turkey (up 1.82 bcm), France (up 1.12 bcm), Germany/Austria (up 0.67 bcm), UK/Northern Europe (up 0.64 bcm) and Iberian Peninsula (up 0.42 bcm).

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Electricity sales for the second quarter of 2011 were nearly unchanged (at 9.66 TWh, up 0.5%). In the first half of 2011 electricity sales increased by 3.9% to 19.34 TWh due to a partial recovery in power generation demand, an increase in clients portfolio as well as higher volumes traded on the Italian power exchange (up 0.57 from the first half of 2010).

Regulated Businesses in Italy In the second quarter of 2011 , these businesses reported an adjusted operating profit of euro 503 million, up euro 22 million from the same period a year-ago, or 4.6%, due to improved results in all regulated businesses. In particular, notwithstanding lower transported volumes due to a decrease in natural gas demand in Italy, the Transport business registered an improved operating performance (up euro 7 million, or 2.2%) reflecting higher yields of new capital expenditure and efficiency actions. These trends have driven the performance of the Distribution business (up euro 14 million), positively influenced also by the impact associated with a new tariff regime set by the Authority for Electricity and Gas intended to cover amortization charges. The Storage businesses reported an adjusted operating profit amounting to euro 45 million, with a slight increase from the second quarter of 2010 (euro 44 million).

In the first half of 2011 , these businesses reported an adjusted operating profit of euro 1,057 million, up euro 43 million, or 4.2%, mainly due to the improved results achieved by the Distribution (up euro 25 million) and Transport businesses (up euro 9 million) and due to the same factors described above. The Storage businesses reported an adjusted operating profit amounting to euro 143 million, increasing by euro 9 million from the first half of 2010 (euro 134 million).

Volumes of gas transported in Italy (18.31 bcm in the second quarter of 2011 and 41.90 bcm in the first half of 2011) registered a decrease when compared to the corresponding periods of 2010 (down 0.73 bcm in the quarter and down 1.12 bcm in the first half) mainly due to lower natural gas demand in Italy.

International Transport This business reported an adjusted operating profit of euro 131 million for the second quarter of 2011 (euro 247 million for the first half) representing an increase of euro 34 million from the second quarter of 2010, or 35.1%, (up euro 30 million, or 13.8%, from the first half of 2010), mainly due to an improved profitability, partly offset by the closure of the GreenStream importing pipeline.

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Other performance indicators

Follows a breakdown of the pro-forma adjusted EBITDA by business:

(euro million)

Second Quarter 2010 First Quarter 2011 Second Quarter 2011 % Ch. 2 Q. 11 vs. 10 First Half 2010 First Half 2011 % Ch.

825	1,054		338		(59.0	Pro-forma adjusted EBITDA	2,257	1,392		)
299	456		(234	)	..	Marketing	1,155	222	(80.8	)
61	(59	)	(52	)		of which: +/(-) adjustment on commodity
derivatives	82	(111	)
350	393		367		4.9	Regulated
businesses in Italy	729	760	4.3
176	205		205		16.5	International transport	373	410	9.9

EBITDA (Earnings Before Interest, Taxes, Depreciation and Amortization charges) on an adjusted basis is calculated by adding amortization and depreciation charges to adjusted operating profit which is also modified to take into account the impact associated with certain derivatives instruments as discussed below. This performance indicator includes the adjusted EBITDA of Eni’s wholly owned subsidiaries and Eni’s share of adjusted EBITDA generated by certain associates which are accounted for under the equity method for IFRS purposes. Snam Rete Gas’ EBITDA is included according to Eni’s share of equity (55.54% as of June 30, 2011, which takes into account the amount of own shares held in treasury by the subsidiary itself) although this Company is fully consolidated when preparing consolidated financial statements in accordance with IFRS, due to its listed company status. Italgas SpA and Stoccaggi Gas Italia SpA results are also included according to the same share of equity as Snam Rete Gas, due to the restructuring of Eni’s regulated business in the Italian gas sector whereby the parent company Eni SpA divested the entire share capital of the two subsidiaries to Snam Rete Gas. In order to calculate the EBITDA pro-forma adjusted, the adjusted operating profit of the Marketing business has been modified to take into account the impact of the settlement of certain commodity and exchange rate derivatives that do not meet the formal criteria to be classified as hedges under the IFRS. These are entered into by the Company in view of certain amounts of gas and electricity that the Company expects to supply at fixed prices during future periods. The impact of those derivatives has been allocated to the EBITDA pro-forma adjusted relating to the reporting periods during which those supplies at fixed prices are recognized. Management believes that the EBITDA pro-forma adjusted is an important alternative measure to assess the performance of Eni’s Gas & Power division, taking into account evidence that this division is comparable to European utilities in the gas and power generation sector. This measure is provided in order to assist investors and financial analysts in assessing the Eni Gas & Power divisional performance as compared to its European peers, as EBITDA is widely used as the main performance indicator for utilities. The EBITDA pro-forma adjusted is a non-GAAP measure under IFRS.

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Refining & Marketing

Second Quarter 2010 First Quarter 2011 Second Quarter 2011 % Ch. 2 Q. 11 vs. 10 First Half 2010 First Half 2011 % Ch.

| 10,909 — 255 | | 11,806 — 303 | | 13,015 — 73 | | 19.3 — (71.4 | ) | Net sales from operations — Operating
profit | | 20,255 — 360 | | 24,821 — 376 | | 22.5 — 4.4 | |
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
| (305 | ) | (508 | ) | (229 | ) | | | Exclusion of inventory holding (gains) losses | | (537 | ) | (737 | ) | | |
| (2 | ) | 29 | | 42 | | | | Exclusion
of special items: | | 31 | | 71 | | | |
| 17 | | 14 | | 12 | | | | - environmental charges | | 34 | | 26 | | | |
| 11 | | 16 | | 22 | | | | - asset
impairments | | 33 | | 38 | | | |
| | | (4 | ) | (5 | ) | | | - gains on disposal of assets | | (10 | ) | (9 | ) | | |
| | | | | 5 | | | | - risk
provisions | | | | 5 | | | |
| 4 | | 3 | | 5 | | | | - provision for redundancy incentives | | 6 | | 8 | | | |
| (34 | ) | (2 | ) | (4 | ) | | | -
re-measurement gains/losses on commodity derivatives | | (32 | ) | (6 | ) | | |
| | | 2 | | 7 | | | | - other | | | | 9 | | | |
| (52 | ) | (176 | ) | (114 | ) | (119.2 | ) | Adjusted
operating profit | | (146 | ) | (290 | ) | (98.6 | ) |
| | | | | | | | | Net finance income (expense) (a) | | | | | | | |
| 21 | | 27 | | 11 | | | | Net income
(expense) from investments (a) | | 66 | | 38 | | | |
| 12 | | 52 | | 24 | | | | Income taxes (a) | | 31 | | 76 | | | |
| 38.7 | | 34.9 | | 23.3 | | | | Tax
rate | (%) | 38.8 | | 30.2 | | | |
| (19 | ) | (97 | ) | (79 | ) | 315.8 | | Adjusted net profit | | (49 | ) | (176 | ) | (259.2 | ) |
| 149 | | 132 | | 184 | | 23.5 | | Capital
expenditure | | 267 | | 316 | | 18.4 | |
| | | | | | | | | Global indicator refining margin | | | | | | | |
| 3.39 | | 1.74 | | 1.09 | | (67.8 | ) | Brent | ($/bbl) | 2.90 | | 1.41 | | (51.4 | ) |
| 2.66 | | 1.27 | | 0.75 | | (71.8 | ) | Brent | (euro/bbl) | 2.18 | | 1.00 | | (54.1 | ) |
| 4.56 | | 3.35 | | 2.20 | | (51.8 | ) | Brent/Ural | ($/bbl) | 3.89 | | 2.77 | | (28.8 | ) |
| | | | | | | | | REFINING THROUGHPUTS AND SALES | (mmtonnes) | | | | | | |
| 6.54 | | 5.96 | | 5.26 | | (19.6 | ) | Refining
throughputs of wholly-owned refineries | | 12.40 | | 11.22 | | (9.5 | ) |
| 8.73 | | 8.14 | | 7.63 | | (12.6 | ) | Refining throughputs on own account | | 16.87 | | 15.77 | | (6.5 | ) |
| 7.42 | | 7.03 | | 6.30 | | (15.1 | ) | - Italy | | 14.30 | | 13.33 | | (6.8 | ) |
| 1.31 | | 1.11 | | 1.33 | | 1.5 | | - Rest of Europe | | 2.57 | | 2.44 | | (5.1 | ) |
| 2.94 | | 2.64 | | 2.90 | | (1.4 | ) | Retail
sales | | 5.62 | | 5.54 | | (1.4 | ) |
| 2.17 | | 1.94 | | 2.14 | | (1.4 | ) | - Italy | | 4.18 | | 4.08 | | (2.4 | ) |
| 0.77 | | 0.70 | | 0.76 | | (1.3 | ) | - Rest of
Europe | | 1.44 | | 1.46 | | 1.4 | |
| 3.30 | | 3.00 | | 3.19 | | (3.3 | ) | Wholesale sales | | 6.20 | | 6.19 | | (0.2 | ) |
| 2.33 | | 2.19 | | 2.22 | | (4.7 | ) | - Italy | | 4.37 | | 4.41 | | 0.9 | |
| 0.97 | | 0.81 | | 0.97 | | | | - Rest of Europe | | 1.83 | | 1.78 | | (2.7 | ) |
| 0.11 | | 0.10 | | 0.11 | | | | Wholesale
sales outside Europe | | 0.20 | | 0.21 | | 5.0 | |

(a) Excluding special items.

Results

In the second quarter of 2011 the Refining & Marketing business reported widening adjusted operating losses down by euro 62 million from the same period of 2010, or 119%, to euro 114 million. This poor performance reflected continuing unprofitable refining margins due to high costs for oil feedstock which were only partially transferred to product prices pressured by weak demand and capacity oversupply recorded in the Mediterranean area. In addition, performance for the quarter was hit by rising costs for plant utilities which are indexed to the cost of crude oil, as well as the depreciation of the US dollar vs the euro. These negatives were mitigated by an improved profitability of Eni’s complex refineries helped by widening price differentials between sweet and sour crudes, higher pricing premiums for gasoline and gasoil compared to fuel oil as well as efficiency improvements and optimization of refinery cycles. Marketing activities benefited by higher sales margins positively influenced by commercial and pricing initiatives. In the second quarter of 2011 special charges excluded from adjusted operating loss amounted to euro 42 million (euro 71 million for the first half of 2011) and mainly related to impairment charges of capital expenditures made for safety reasons on refining and retail assets impaired in previous reporting periods, and environmental provisions.

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In the second quarter of 2011, adjusted net loss was euro 79 million (down euro 60 million from the second quarter of 2010) mainly due to a lower operating performance.

In the first half of 2011 the Refining & Marketing business reported an adjusted operating loss amounting to euro 290 million, down euro 144 million from the same period of 2010, driven by sharply lower refining margins on the back of an unfavorable scenario, partly offset by the positive results recorded by the marketing activities. In the first half of 2011, adjusted net loss was euro 176 million (down euro 127 million from the first half of 2010).

Operating review

Eni’s refining throughputs for the second quarter of 2011 were 7.63 mmtonnes (15.77 mmtonnes in the first half of 2011) decreasing by 12.6% from the year-ago second quarter (down by 6.5% from the first half of 2010). In Italy processed volumes for the second quarter decreased by 15.1% from the year earlier quarter (down by 6.8% in the first half) reflecting lower volumes at the Livorno and Gela refineries due to planned facility downtimes and lower capacity utilization in response to a weak market environment at the Venezia refinery. These negatives were partly offset by the higher volumes processed at the Sannazzaro, Milazzo and Taranto refineries reflecting lower facility downtimes. Outside Italy, Eni’s refining throughputs slightly increased from the second quarter of 2010 (down 5.1% from the first half of 2010). Retail sales in Italy amounted to 2.14 mmtonnes in the second quarter of 2011 (4.08 mmtonnes in the first half of 2011) decreasing by approximately 30 ktonnes, or 1.4% (down 2.4% in the first half of 2011) due to a lower consumption (down 1.9%). Eni's average market share for the first half of 2011 was 30.1%, down 0.2 percentage points from the first half of 2010. Market share for the second quarter of 2011 was 30.2%, up 0.1 percentage points from the second quarter of 2010. Wholesale sales in Italy (2.22 mmtonnes) decreased by approximately 110 ktonnes, down 4.7% from the second quarter of 2010, due to lower demand of engines gasoil, marine bunkering and fuel oil from industrial clients. In the period were registered higher sales of jet fuel for the aviation segment. In the first half of 2011 wholesale sales in Italy registered a slight increase from 2010 (up approximately 40 ktonnes, or 0.9%) mainly due to higher sales of jet fuel for the aviation segment, bitumen and coke, partly offset by lower sales of gasoil, marine bunkering and fuel oil in relation to lower demand for products. Retail sales in the rest of Europe amounting to approximately 760 ktonnes in the second quarter of 2011 (1.46 mmtonnes in the first half of 2011) were weaker in the quarter due to lower demand and higher competitive pressure (down by 1.3% in the quarter; however they were up 1.4% in the first half) with reductions in Germany, France and Eastern Europe. These negatives were partly offset by the purchase of a network of service stations in Austria closed during 2010. Wholesale sales in the Rest of Europe were approximately 970 ktonnes (1.78 mmtonnes in the first half of 2010) and were stable in the quarter while experienced a slight decrease in the first half mainly due to lower sales in Czech Republic, Germany, Slovenia, Hungary and France, mainly in bitumen, partly offset by higher sales volumes in Austria, Switzerland and Romania.

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Summarized Group profit and loss account

(euro million)

Second Quarter 2010 First Quarter 2011 Second Quarter 2011 % Ch. 2 Q. 11 vs. 10 First Half 2010 First Half 2011 % Ch.

| 22,902 — 252 | | 28,779 — 233 | | 24,596 — 357 | | 7.4 — 41.7 | | Net sales from operations — Other
income and revenues | | 47,706 — 537 | | 53,375 — 590 | | 11.9 — 9.9 | |
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
| (16,569 | ) | (21,222 | ) | (19,005 | ) | (14.7 | ) | Operating expenses | | (34,665 | ) | (40,227 | ) | (16.0 | ) |
| | | | | (69 | ) | | | of
which non-recurring items | | | | (69 | ) | | |
| (5 | ) | (28 | ) | 16 | | | | Other operating income (expense) | | 33 | | (12 | ) | | |
| (2,275 | ) | (2,124 | ) | (2,154 | ) | 5.3 | | Depreciation,
depletion, amortization and impairments | | (4,459 | ) | (4,278 | ) | 4.1 | |
| 4,305 | | 5,638 | | 3,810 | | (11.5 | ) | Operating profit | | 9,152 | | 9,448 | | 3.2 | |
| (356 | ) | (83 | ) | (294 | ) | 17.4 | | Finance
income (expense) | | (601 | ) | (377 | ) | 37.3 | |
| 447 | | 291 | | 430 | | (3.8 | ) | Net income from investments | | 672 | | 721 | | 7.3 | |
| 4,396 | | 5,846 | | 3,946 | | (10.2 | ) | Profit
before income taxes | | 9,223 | | 9,792 | | (6.2 | ) |
| (2,457 | ) | (2,887 | ) | (2,446 | ) | 0.4 | | Income taxes | | (4,865 | ) | (5,333 | ) | (9.6 | ) |
| 55.9 | | 49.4 | | 62.0 | | | | Tax
rate | (%) | 52.7 | | 54.5 | | | |
| 1,939 | | 2,959 | | 1,500 | | (22.6 | ) | Net profit, attributable to: | | 4,358 | | 4,459 | | 2.3 | |
| 1,824 | | 2,547 | | 1,254 | | (31.3 | ) | - Eni ’ s
shareholders | | 4,046 | | 3,801 | | (6.1 | ) |
| 115 | | 412 | | 246 | | 113.9 | | - Non controlling interest | | 312 | | 658 | | 110.9 | |
| 1,824 | | 2,547 | | 1,254 | | (31.3 | ) | Net
profit attributable to Eni ’ s shareholders | | 4,046 | | 3,801 | | (6.1 | ) |
| (250 | ) | (474 | ) | (170 | ) | | | Exclusion of inventory holding (gains) losses | | (530 | ) | (644 | ) | | |
| 93 | | 125 | | 352 | | | | Exclusion
of special items | | (27 | ) | 477 | | | |
| | | | | | | | | of which: | | | | | | | |
| | | | | 69 | | | | -
non-recurring items | | | | 69 | | | |
| 93 | | 125 | | 283 | | | | - other special items | | (27 | ) | 408 | | | |
| 1,667 | | 2,198 | | 1,436 | | (13.9 | ) | Adjusted
net profit attributable to Eni ’ s shareholders (a) | | 3,489 | | 3,634 | | 4.2 | |

(a) For a detailed explanation of adjusted operating profit and adjusted net profit see the paragraph "Reconciliation of reported operating profit and reported net profit to results on an adjusted basis".

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NON-GAAP measures

Reconciliation of reported operating profit and reported net profit to results on an adjusted basis Management evaluates Group and business performance on the basis of adjusted operating profit and adjusted net profit, which are arrived at by excluding inventory holding gains or losses and special items. Furthermore, finance charges on finance debt, interest income, gains or losses deriving from the evaluation of certain derivative financial instruments at fair value through profit or loss (as they do not meet the formal criteria to be assessed as hedges under IFRS, excluding commodity derivatives), and exchange rate differences are all excluded when determining adjusted net profit of each business segment. The taxation effect of the items excluded from adjusted operating or net profit is determined based on the specific rate of taxes applicable to each of them. The Italian statutory tax rate is applied to finance charges and income (34% is applied to charges recorded by companies in the energy sector, whilst a tax rate of 27.5% is applied to all other companies). Adjusted operating profit and adjusted net profit are non-GAAP financial measures under either IFRS, or US GAAP. Management includes them in order to facilitate a comparison of base business performance across periods and allow financial analysts to evaluate Eni’s trading performance on the basis of their forecasting models. In addition, management uses segmental adjusted net profit when calculating return on average capital employed (ROACE) by each business segment.

The following is a description of items that are excluded from the calculation of adjusted results.

Inventory holding gain or loss is the difference between the cost of sales of the volumes sold in the period based on the cost of supplies of the same period and the cost of sales of the volumes sold calculated using the weighted average cost method of inventory accounting.

Special items include certain significant income or charges pertaining to either: (i) infrequent or unusual events and transactions, being identified as non-recurring items under such circumstances; or (ii) certain events or transactions which are not considered to be representative of the ordinary course of business, as in the case of environmental provisions, restructuring charges, asset impairments or write ups and gains or losses on divestments even though they occurred in past periods or are likely to occur in future ones. As provided for in Decision No. 15519 of July 27, 2006, of the Italian market regulator (CONSOB), non-recurring material income or charges are to be clearly reported in the management’s discussion and include gains and losses on re-measurement at fair value of certain commodity derivatives, which do not meet formal criteria to the classified as hedges under IFRS, including the ineffective portion of cash flow hedges.

Finance charges or income related to net borrowings excluded from the adjusted net profit of business segments are comprised of interest charges on finance debt and interest income earned on cash and cash equivalents not related to operations. In addition gains or losses on the fair value evaluation of the aforementioned derivative financial instruments, excluding commodity derivatives, and exchange rate differences are excluded from the adjusted net profit of business segments. Therefore, the adjusted net profit of business segments includes finance charges or income deriving from certain segment-operated assets, i.e., interest income on certain receivable financing and securities related to operations and finance charge pertaining to the accretion of certain provisions recorded on a discounted basis (as in the case of the asset retirement obligations in the Exploration & Production division). Finance charges or interest income and related taxation effects excluded from the adjusted net profit of the business segments are allocated on the aggregate Corporate and financial companies. For a reconciliation of adjusted operating profit and adjusted net profit to reported operating profit and reported net profit see tables below.

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First Half 2011 E&P G&P R&M Petrochemicals Engineering & Construction Other activities Corporate and financial companies Impact of unrealized intragroup profit elimination Group

Reported operating profit	7,799		1,094		376		(5	)	720		)	(188	)	(183	)	9,448
Exclusion
of inventory holding (gains) losses			(53	)	(737	)	(119	)								(909	)
Exclusion of special items
of
which:
Non-recurring (income) charges							10			59						69
Other
special (income) charges:	147		168		71		72			1		35				494
environmental
charges			4		26					12						42
asset
impairments	141				38		70		14	2						265
gains on disposal
of assets	(28	)	5		(9	)			3							(29	)
risk
provisions					5					(1	)					4
provision for
redundancy incentives	4		6		8		2		1	1		12				34
re-measurement
gains/losses on commodity derivatives	30		154		(6	)			(18	)						160
other			(1	)	9					(13	)	23				18
Special
items of operating profit	147		168		71		82			60		35				563
Adjusted operating profit	7,946		1,209		(290	)	(42	)	720	(105	)	(153	)	(183	)	9,102
Net
finance (expense) income (a)	(116	)	21							4		(284	)			(375	)
Net income from investments (a)	412		219		38		1		9							679
Income
taxes (a)	(4,725	)	(447	)	76		13		(193	)		94		68		(5,114	)
Tax rate (%)	57.3		30.8		..				26.5							54.4
Adjusted
net profit	3,517		1,002		(176	)	(28	)	536	(101	)	(343	)	(115	)	4,292
of which:
- Adjusted
net profit of non-controlling interest																658
- Adjusted net profit attributable to Eni ’ s
shareholders																3,634
Reported
net profit attributable to Eni ’ s shareholders																3,801
Exclusion of inventory holding (gains) losses (b)																(644	)
Exclusion
of special items																477
- non-recurring (income) charges																69
- other
special (income) charges																408
Adjusted net profit attributable to
Eni’s shareholders																3,634

i	i	i
(a)	i	Excluding
special items.
(b)	i	Including
euro 67 million related to equity-accounted entities.

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(euro million)

First Half 2010 E&P G&P R&M Petrochemicals Engineering & Construction Other activities Corporate and financial companies Impact of unrealized intragroup profit elimination Group

Reported operating profit	6,698		1,908		360		53		625		(175	)	(152	)	(165	)	9,152
Exclusion
of inventory holding (gains) losses			(106	)	(537	)	(134	)									(777	)
Exclusion of special items:
environmental
charges			4		34						53						91
asset impairments	29		10		33		9				8						89
gains
on disposal of assets	(167	)	1		(10	)											(176	)
risk provisions											6						6
provision
for redundancy incentives	8		8		6		2		7		1		12				44
re-measurement
gains/losses on commodity derivatives	(8	)	71		(32	)											31
other											(1	)					(1	)
Special items of operating profit	(138	)	94		31		11		7		67		12				84
Adjusted
operating profit	6,560		1,896		(146	)	(70	)	632		(108	)	(140	)	(165	)	8,459
Net finance (expense) income (a)	(106	)	7						47		(10	)	(492	)			(554	)
Net income
from investments (a)	266		195		66		2		(3	)	(4	)	(1	)			521
Income taxes (a)	(4,036	)	(622	)	31		2		(206	)			144		62		(4,625	)
Tax
rate (%)	60.1		29.6		..				30.5								54.9
Adjusted net profit	2,684		1,476		(49	)	(66	)	470		(122	)	(489	)	(103	)	3,801
of
which:
- Adjusted net profit of non-controlling
interest																	312
-
Adjusted net profit attributable to Eni ’ s
shareholders																	3,489
Reported net profit attributable to Eni ’ s
shareholders																	4,046
Exclusion
of inventory holding (gains) losses (b)																	(530	)
Exclusion of special items																	(27	)
Adjusted
net profit attributable to Eni’s shareholders																	3,489

i	i	i
(a)	i	Excluding
special items.
(b)	i	Including
euro 33 million related to equity-accounted entities.

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(euro million)

Second Quarter 2011 E&P G&P R&M Petrochemicals Engineering & Construction Other activities Corporate and financial companies Impact of unrealized intragroup profit elimination Group

Reported operating profit	3,693		184		73		(113	)	366		)	(76	)	(179	)	3,810
Exclusion
of inventory holding (gains) losses			(12	)	(229	)	1									(240	)
Exclusion of special items
of
which:
Non-recurring (income) charges							10			59						69
Other
special (income) charges:	133		79		42		72		12	19		7				364
environmental
charges			3		12					12						27
asset
impairments	141				22		70		14	1						248
gains on disposal
of assets	(11	)	5		(5	)			2							(9	)
risk
provisions					5					(1	)					4
provision for
redundancy incentives	2		3		5		2		1	1		8				22
re-measurement
gains/losses on commodity derivatives	1		74		(4	)			(5	)						66
other			(6	)	7					6		(1	)			6
Special
items of operating profit	133		79		42		82		12	78		7				433
Adjusted operating profit	3,826		251		(114	)	(30	)	378	(60	)	(69	)	(179	)	4,003
Net
finance (expense) income (a)	(59	)	16							4		(253	)			(292	)
Net income from investments (a)	295		103		11		1		4							414
Income
taxes (a)	(2,378	)	(131	)	24		6		(105	)		74		67		(2,443	)
Tax rate (%)	58.5		35.4		..				27.5							59.2
Adjusted
net profit	1,684		239		(79	)	(23	)	277	(56	)	(248	)	(112	)	1,682
of which:
- Adjusted
net profit of non-controlling interest																246
- Adjusted net profit attributable to Eni ’ s
shareholders																1,436
Reported
net profit attributable to Eni ’ s shareholders																1,254
Exclusion of inventory holding (gains) losses (b)																(170	)
Exclusion
of special items																352
- non-recurring (income) charges																69
- other
special (income) charges																283
Adjusted net profit attributable to
Eni’s shareholders																1,436

i	i	i
(a)	i	Excluding
special items.
(b)	i	Including
euro 17 million related to equity-accounted entities.

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(euro million)

Second Quarter 2010 E&P G&P R&M Petrochemicals Engineering & Construction Other activities Corporate and financial companies Impact of unrealized intragroup profit elimination Group

Reported operating profit	3,401		592		255		17		334		)	(82	)	(97	)	4,305
Exclusion
of inventory holding (gains) losses			(25	)	(305	)	(38	)								(368	)
Exclusion of special items:
environmental
charges			(1	)	17					53						69
asset impairments	29				11		9			8						57
gains
on disposal of assets	(7	)	1													(6	)
risk provisions										6						6
provision
for redundancy incentives	6		2		4		1		7			7				27
re-measurement
gains/losses on commodity derivatives	13		60		(34	)			2							41
other										(3	)					(3	)
Special items of operating profit	41		62		(2	)	10		9	64		7				191
Adjusted
operating profit	3,442		629		(52	)	(11	)	343	(51	)	(75	)	(97	)	4,128
Net finance (expense) income (a)	(57	)	9						47	(10	)	(298	)			(309	)
Net income
from investments (a)	199		95		21		2		(5	)		(1	)			311
Income taxes (a)	(2,145	)	(212	)	12		(14	)	(112	)		87		36		(2,348	)
Tax
rate (%)	59.8		28.9		..				29.1							56.9
Adjusted net profit	1,439		521		(19	)	(23	)	273	(61	)	(287	)	(61	)	1,782
of
which:
- Adjusted net profit of non-controlling
interest																115
-
Adjusted net profit attributable to Eni ’ s
shareholders																1,667
Reported net profit attributable to Eni ’ s
shareholders																1,824
Exclusion
of inventory holding (gains) losses (b)																(250	)
Exclusion of special items																93
Adjusted
net profit attributable to Eni’s shareholders																1,667

i	i	i
(a)	i	Excluding
special items.
(b)	i	Including
euro 16 million related to equity-accounted entities.

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(euro million)

First Quarter 2011 E&P G&P R&M Petrochemicals Engineering & Construction Other activities Corporate and financial companies Impact of unrealized intragroup profit elimination Group

Reported operating profit	4,106		910		303		108		354		(27	)	(112	)	(4	)	5,638
Exclusion
of inventory holding (gains) losses			(41	)	(508	)	(120	)									(669	)
Exclusion of special items:
environmental
charges			1		14												15
asset impairments					16						1						17
gains
on disposal of assets	(17	)			(4	)			1								(20	)
provision for
redundancy incentives	2		3		3								4				12
re-measurement
gains/losses on commodity derivatives	29		80		(2	)			(13	)							94
other			5		2						(19	)	24				12
Special
items of operating profit	14		89		29				(12	)	(18	)	28				130
Adjusted operating profit	4,120		958		(176	)	(12	)	342		(45	)	(84	)	(4	)	5,099
Net
finance (expense) income (a)	(57	)	5										(31	)			(83	)
Net income from investments (a)	117		116		27				5								265
Income
taxes (a)	(2,347	)	(316	)	52		7		(88	)			20		1		(2,671	)
Tax rate (%)	56.1		29.3		..				25.4								50.6
Adjusted
net profit	1,833		763		(97	)	(5	)	259		(45	)	(95	)	(3	)	2,610
of which:
- Adjusted
net profit of non-controlling interest																	412
- Adjusted net profit attributable to Eni ’ s
shareholders																	2,198
Reported
net profit attributable to Eni ’ s shareholders																	2,547
Exclusion of inventory holding (gains) losses (b)																	(474	)
Exclusion
of special items																	125
Adjusted net profit attributable to Eni ’ s
shareholders																	2,198

i	i	i
(a)	i	Excluding
special items.
(b)	i	Including
euro 50 million related to equity-accounted entities.

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Table of Contents

Breakdown of special items (euro million)

Second Quarter 2010 First Quarter 2011 Second Quarter 2011 First Half 2010 First Half 2011

				69		Non-recurring charges (income)			69
				69		of
which: - settlement/payments on antitrust and other
Authorities proceedings			69
191		130		364		Other special charges (income):	84		494
69		15		27		-
environmental charges	91		42
57		17		248		- asset impairments	89		265
(6	)	(20	)	(9	)	- gains on
disposal of assets	(176	)	(29	)
6				4		- risk provisions	6		4
27		12		22		-
provisions for redundancy incentives	44		34
41		94		66		- re-measurement gains/losses on commodity
derivatives	31		160
(3	)	12		6		- other	(1	)	18
191		130		433		Special items of operating profit	84		563
47				2		Net
finance (income) expense	47		2
(118	)	24		1		Net income from investments	(118	)	25
						of
which:
(140	)					- gains on disposal of assets	(140	)
20						-
impairments	20
(27	)	(29	)	(84	)	Income taxes	(40	)	(113	)
						of
which:
42		27		44		- re-allocation of tax impact on Eni SpA
dividends and other special items	42		71
(69	)	(56	)	(128	)	- taxes
on special items of operating profit	(82	)	(184	)
93		125		352		Total special items of net profit	(27	)	477

Net sales from operations (euro million)

Second Quarter 2010 First Quarter 2011 Second Quarter 2011 % Ch. 2 Q. 11 vs. 10 First Half 2010 First Half 2011 % Ch.

7,184		7,474		6,778		)	Exploration & Production	14,569		14,252		)
5,960		10,614		6,235	4.6		Gas &
Power	14,668		16,849	14.9
10,909		11,806		13,015	19.3		Refining & Marketing	20,255		24,821	22.5
1,698		1,797		1,747	2.9		Petrochemicals	3,174		3,544	11.7
2,496		2,785		2,920	17.0		Engineering & Construction	5,008		5,705	13.9
27		25		20	(25.9	)	Other
activities	52		45	(13.5	)
332		303		341	2.7		Corporate and financial companies	634		644	1.6
(171	)	(101	)	(57	)		Impact of
unrealized intragroup profit elimination	(107	)	(158	)
(5,533	)	(5,924	)	(6,403	)		Consolidation adjustment	(10,547	)	(12,327	)
22,902		28,779		24,596	7.4			47,706		53,375	11.9

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Operating expenses (euro million)

Second Quarter 2010 First Quarter 2011 Second Quarter 2011 % Ch. 2 Q. 11 vs. 10 First Half 2010 First Half 2011 % Ch.

15,415	20,103	17,862	15.9		Purchases, services and other	32,466	37,965	16.9
					of
which:
		69			- non-recurring (income) charges		69
60	3	51			- other
special items	97	54
1,154	1,119	1,143	(1.0	)	Payroll and related costs	2,199	2,262	2.9
					of
which:
27	12	22			- provision for redundancy incentives	44	34
16,569	21,222	19,005	14.7			34,665	40,227	16.0

Gains and losses on non-hedging commodity derivate instruments (euro million)

Second Quarter 2010 First Quarter 2011 Second Quarter 2011 First Half 2010 First Half 2011

(14	)	(29	)	(1	)	Exploration & Production	7		(30	)
(1	)					-
settled transactions	(1	)
(13	)	(29	)	(1	)	- re-measurement gains/losses	8		(30	)
(30	)	4		(3	)	Gas &
Power	(11	)	1
30		84		71		- settled transactions	60		155
(60	)	(80	)	(74	)	-
re-measurement gains/losses	(71	)	(154	)
45		(76	)	11		Refining & Marketing	40		(65	)
11		(78	)	7		-
settled transactions	8		(71	)
34		2		4		- re-measurement gains/losses	32		6
		2				Petrochemicals	1		2
		2				- settled transactions	1		2
						-
re-measurement gains/losses
(6	)	12		2		Engineering & Construction	(4	)	14
(4	)	(1	)	(3	)	-
settled transactions	(4	)	(4	)
(2	)	13		5		- re-measurement gains/losses			18
(5	)	(87	)	9		Derivatives
lacking formal criteria for hedging accounting	33		(78	)
36		7		75		- settled transactions	64		82
(41	)	(94	)	(66	)	-
re-measurement gains/losses	(31	)	(160	)
		59		7		Trading derivatives Gas & Power			66
(5	)	(28	)	16		Total	33		(12	)

Depreciation, depletion, amortization and impairments (euro million)

Second Quarter 2010 First Quarter 2011 Second Quarter 2011 % Ch. 2 Q. 11 vs. 10 First Half 2010 First Half 2011 % Ch.

1,749		1,588		1,439		)	Exploration & Production	3,429		3,027		)
226		248		218	(3.5	)	Gas &
Power	470		466	(0.9	)
87		92		83	(4.6	)	Refining & Marketing	167		175	4.8
20		22		24	20.0		Petrochemicals	39		46	17.9
122		145		138	13.1		Engineering & Construction	236		283	19.9
					..		Other
activities	1			(100.0	)
19		17		18	(5.3	)	Corporate and financial companies	37		35	(5.4	)
(5	)	(5	)	(6	)		Impact of
unrealized intragroup profit elimination	(9	)	(11	)
2,218		2,107		1,914	(13.7	)	Total depreciation, depletion and
amortization	4,370		4,021	(8.0	)
57		17		240	321.1		Impairments	89		257	188.8
2,275		2,124		2,154	(5.3	)		4,459		4,278	(4.1	)

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Net income from investments

(euro million) First Half 2011 Exploration & Production Gas & Power Refining & Marketing Engineering & Construction Other activities Group

| Share of gains (losses) from equity-accounted
investments | 63 | 160 | 74 | 9 | (24 | ) | 282 |
| --- | --- | --- | --- | --- | --- | --- | --- |
| Dividends | 343 | 60 | 31 | | 3 | | 437 |
| Net gains on disposal | | | | | 1 | | 1 |
| Other
income (expense), net | 2 | | | | (1 | ) | 1 |
| | 408 | 220 | 105 | 9 | (21 | ) | 721 |

Income taxes (euro million)

Second Quarter 2010 First Quarter 2011 Second Quarter 2011 First Half 2010 First Half 2011 Change

690	1,312	16	Profit before income taxes — Italy	1,841	1,328	(513	)
3,706	4,534	3,930	Outside Italy	7,382	8,464	1,082
4,396	5,846	3,946		9,223	9,792	569
			Income taxes
393	538	206	Italy	843	744	(99	)
2,064	2,349	2,240	Outside Italy	4,022	4,589	567
2,457	2,887	2,446		4,865	5,333	468
			Tax rate (%)
57.0	41.0	..	Italy	45.8	56.0	10.2
55.7	51.8	57.0	Outside Italy	54.5	54.2	(0.3	)
55.9	49.4	62.0		52.7	54.5	1.8

Adjusted net profit (euro million)

Second Quarter 2010 First Quarter 2011 Second Quarter 2011 % Ch. 2 Q. 11 vs. 10 First Half 2010 First Half 2011 % Ch.

| 1,439 — 521 | | 1,833 — 763 | | 1,684 — 239 | | 17.0 — (54.1 | ) | Exploration & Production — Gas &
Power | 2,684 — 1,476 | | 3,517 — 1,002 | | 31.0 — (32.1 | ) |
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
| (19 | ) | (97 | ) | (79 | ) | (315.8 | ) | Refining & Marketing | (49 | ) | (176 | ) | (259.2 | ) |
| (23 | ) | (5 | ) | (23 | ) | | | Petrochemicals | (66 | ) | (28 | ) | 57.6 | |
| 273 | | 259 | | 277 | | 1.5 | | Engineering & Construction | 470 | | 536 | | 14.0 | |
| (61 | ) | (45 | ) | (56 | ) | 8.2 | | Other
activities | (122 | ) | (101 | ) | 17.2 | |
| (287 | ) | (95 | ) | (248 | ) | 13.6 | | Corporate and financial companies | (489 | ) | (343 | ) | 29.9 | |
| (61 | ) | (3 | ) | (112 | ) | | | Impact of
unrealized intragroup profit elimination | (103 | ) | (115 | ) | | |
| 1,782 | | 2,610 | | 1,682 | | (5.6 | ) | | 3,801 | | 4,292 | | (12.9 | ) |
| | | | | | | | | Attributable
to: | | | | | | |
| 115 | | 412 | | 246 | | 113.9 | | - Eni’s shareholders | 312 | | 658 | | (110.9 | ) |
| 1,667 | | 2,198 | | 1,436 | | (13.9 | ) | - Non
controlling interest | 3,489 | | 3,634 | | 4.2 | |

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Leverage and net borrowings

Leverage is a measure used by management to assess the Company’s level of indebtedness. It is calculated as a ratio of net borrowings – which is calculated by excluding cash and cash equivalents and certain very liquid assets from financial debt to shareholders’ equity, including minority interest. Management periodically reviews leverage in order to assess the soundness and efficiency of the Group balance sheet in terms of optimal mix between net borrowings and net equity, and to carry out benchmark analysis with industry standards.

(euro million) Dec. 31, 2010 March 31, 2011 June 30, 2011 Change vs Dec. 31, 2010 Change vs March 31, 2011

Total debt	27,783		27,058		27,594		(189	)	536
Short-term
debt	7,478		6,156		5,573		(1,905	)	(583	)
Long-term debt	20,305		20,902		22,021		1,716		1,119
Cash and
cash equivalents	(1,549	)	(1,922	)	(1,474	)	75		448
Securities held for non-operating purposes	(109	)	(110	)	(131	)	(22	)	(21	)
Financing
receivables for non-operating purposes	(6	)	(75	)	(11	)	(5	)	64
Net borrowings	26,119		24,951		25,978		(141	)	1,027
Shareholders’
equity including non-controlling interest	55,728		56,866		55,704		(24	)	(1,162	)
Leverage	0.47		0.44		0.47				0.03

Bonds maturing in the 18-month period starting on June 30, 2011 (euro million)

| Issuing entity | Amounts at June 30,
2011 (a) |
| --- | --- |
| Eni
Coordination Center SA | 43 |
| Eni Coordination Center SA | 26 |
| | 69 |

(a) Amounts include interest accrued and discount on issue.

Bonds issued in the first half of 2011

Issuing entity Nominal amount (million) Currency Amounts at March 31, 2011 (a) (euro million) Maturity Rate %

Eni Coordination Center SA
112

(a) Amounts include interest accrued and discount on issue.

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ROACE (Return On Average Capital Employed)

Return on Average Capital Employed for the Group, on an adjusted basis is the return on the Group average capital invested, calculated as ratio of net adjusted profit before minority interests, plus net finance charges on net borrowings net of the related tax effect, to net average capital employed. The tax rate applied on finance charges is the Italian statutory tax rate of 34%. The capital invested, as of the period end, used for the calculation of net average capital invested is obtained by deducting inventory gains or losses in the period, net of the related tax effect. ROACE by division is determined as ratio of adjusted net profit to net average capital invested pertaining to each division and rectifying the net capital invested as of period-end, from net inventory gains or losses (after applying the division specific tax rate).

(euro million)

Calculated on a 12-month period ending on June 30, 2011 Exploration & Production Gas & Power Refining & Marketing Group

Adjusted net profit	6,433	2,084	(176	)	8,425
Exclusion
of after-tax finance expense/interest income	-	-	-		409
Adjusted net profit unlevered	6,433	2,084	(176	)	8,834
Adjusted
capital employed, net:
- at the beginning of period	38,847	25,524	8,533		80,717
- at the
end of period	36,487	27,325	8,508		80,958
Adjusted average capital employed, net	37,667	26,425	8,521		80,838
Adjusted
ROACE (%)	17.1	7.9	(2.1	)	10.9

(euro million)

Calculated on a 12-month period ending on June 30, 2010 Exploration & Production Gas & Power Refining & Marketing Group

Adjusted net profit	4,646	2,907	(215	)	6,841
Exclusion
of after-tax finance expense/interest income	-	-	-		341
Adjusted net profit unlevered	4,646	2,907	(215	)	7,182
Adjusted
capital employed, net:
- at the beginning of period	30,489	23,614	7,359		68,564
- at the
end of period	38,847	25,539	7,932		80,048
Adjusted average capital employed, net	34,668	24,577	7,646		74,306
Adjusted
ROACE (%)	13.4	11.8	(2.8	)	9.7

(euro million)

Calculated on a 12-month period ending on December 31, 2010 Exploration & Production Gas & Power Refining & Marketing Group

Adjusted net profit	5,600	2,558	(49	)	7,934
Exclusion
of after-tax finance expense/interest income	-	-	-		337
Adjusted net profit unlevered	5,600	2,558	(49	)	8,271
Adjusted
capital employed, net:
- at the beginning of period	32,455	24,754	8,105		73,106
- at the
end of period	37,646	27,270	7,859		81,237
Adjusted average capital employed, net	35,051	26,012	7,982		77,172
Adjusted
ROACE (%)	16.0	9.8	(0.6	)	10.7

• 37 -

Table of Contents

GROUP BALANCE SHEET (euro million)

Dec. 31, 2010 Mar. 31, 2011 June 30, 2011

ASSETS
Current
assets
Cash and cash equivalents	1,549		1,922		1,474
Other
financial assets held for trading or available for sale	382		387		360
Trade and other receivables	23,636		24,274		22,180
Inventories	6,589		6,414		6,911
Current tax assets	467		269		231
Other
current tax assets	938		936		864
Other current assets	1,350		1,664		1,358
	34,911		35,866		33,378
Non-current assets
Property,
plant and equipment	67,404		65,949		67,162
Inventory - compulsory stock	2,024		2,312		2,370
Intangible
assets	11,172		11,072		10,891
Equity-accounted investments	5,668		5,725		5,704
Other
investments	422		407		375
Other financial assets	1,523		1,520		1,578
Deferred
tax assets	4,864		4,186		5,028
Other non-current receivables	3,355		3,520		3,713
	96,432		94,691		96,821
Assets held for sale	517		458		480
TOTAL
ASSETS	131,860		131,015		130,679
LIABILITIES AND SHAREHOLDERS’ EQUITY
Current
liabilities
Short-term debt	6,515		5,196		4,357
Current
portion of long-term debt	963		960		1,216
Trade and other payables	22,575		20,235		20,022
Income
taxes payable	1,515		2,108		2,100
Other taxes payable	1,659		2,474		2,271
Other
current liabilities	1,620		1,930		1,480
	34,847		32,903		31,446
Non-current
liabilities
Long-term debt	20,305		20,902		22,021
Provisions
for contingencies	11,792		11,501		11,743
Provisions for employee benefits	1,032		1,019		1,064
Deferred
tax liabilities	5,924		5,344		5,803
Other non-current liabilities	2,194		2,432		2,827
	41,247		41,198		43,458
Liabilities directly associated with assets
held for sale	38		48		71
TOTAL
LIABILITIES	76,132		74,149		74,975
SHAREHOLDERS’ EQUITY
Non-controlling
interest	4,522		4,900		4,762
Eni shareholders ’ equity:
Share
capital	4,005		4,005		4,005
Reserves	49,450		52,169		49,890
Treasury
shares	(6,756	)	(6,755	)	(6,754	)
Interim dividend	(1,811	)
Net profit	6,318		2,547		3,801
Total Eni shareholders’ equity	51,206		51,966		50,942
TOTAL
SHAREHOLDERS’ EQUITY	55,728		56,866		55,704
TOTAL LIABILITIES AND SHAREHOLDERS’
EQUITY	131,860		131,015		130,679

• 38 -

Table of Contents

Group profit and loss account (euro million)

Second Quarter 2010 First Quarter 2011 Second Quarter 2011 First Half 2010 First Half 2011

| 22,902 | | 28,779 | | 24,596 | | REVENUES — Net sales
from operations | 47,706 | | 53,375 | |
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
| 252 | | 233 | | 357 | | Other income and revenues | 537 | | 590 | |
| 23,154 | | 29,012 | | 24,953 | | Total
revenues | 48,243 | | 53,965 | |
| | | | | | | OPERATING EXPENSES | | | | |
| 15,415 | | 20,103 | | 17,862 | | Purchases,
services and other | 32,466 | | 37,965 | |
| | | | | 69 | | - of which non recurring (income) expense | | | 69 | |
| 1,154 | | 1,119 | | 1,143 | | Payroll
and related costs | 2,199 | | 2,262 | |
| (5 | ) | (28 | ) | 16 | | OTHER OPERATING (CHARGE) INCOME | 33 | | (12 | ) |
| 2,275 | | 2,124 | | 2,154 | | DEPRECIATION,
DEPLETION, AMORTIZATION AND IMPAIRMENTS | 4,459 | | 4,278 | |
| 4,305 | | 5,638 | | 3,810 | | OPERATING PROFIT | 9,152 | | 9,448 | |
| | | | | | | FINANCE
INCOME (EXPENSE) | | | | |
| 2,297 | | 3,117 | | (259 | ) | Finance income | 3,660 | | 2,858 | |
| (2,508 | ) | (3,397 | ) | (63 | ) | Finance
expense | (3,930 | ) | (3,460 | ) |
| (145 | ) | 197 | | 28 | | Derivative financial instruments | (331 | ) | 225 | |
| (356 | ) | (83 | ) | (294 | ) | | (601 | ) | (377 | ) |
| | | | | | | INCOME (EXPENSE) FROM INVESTMENTS | | | | |
| 108 | | 200 | | 82 | | Share of
profit (loss) of equity-accounted investments | 292 | | 282 | |
| 339 | | 91 | | 348 | | Other gain (loss) from investments | 380 | | 439 | |
| 447 | | 291 | | 430 | | | 672 | | 721 | |
| 4,396 | | 5,846 | | 3,946 | | PROFIT BEFORE INCOME TAXES | 9,223 | | 9,792 | |
| (2,457 | ) | (2,887 | ) | (2,446 | ) | Income
taxes | (4,865 | ) | (5,333 | ) |
| 1,939 | | 2,959 | | 1,500 | | Net profit | 4,358 | | 4,459 | |
| | | | | | | Attributable
to: | | | | |
| 1,824 | | 2,547 | | 1,254 | | - Eni’s shareholders | 4,046 | | 3,801 | |
| 115 | | 412 | | 246 | | -
Non-controlling interest | 312 | | 658 | |
| 1,939 | | 2,959 | | 1,500 | | | 4,358 | | 4,459 | |
| | | | | | | Earnings
per share attributable to Eni’s shareholders (euro per share) | | | | |
| 0.51 | | 0.70 | | 0.35 | | Basic | 1.12 | | 1.05 | |
| 0.51 | | 0.70 | | 0.35 | | Diluted | 1.12 | | 1.05 | |

• 39 -

Table of Contents

Comprehensive income (euro million)

First Half 2010 First Half 2011

Net profit	4,358		4,459
Other
items of comprehensive income:
- foreign currency translation differences	4,974		(2,374	)
-
change in the fair value of available-for-sale securities			(6	)
- change in the fair value of cash flow
hedging derivatives	342		120
- share
of " Other comprehensive income " on equity-accounted entities	(16	)	5
- taxation	(134	)	(48	)
Total
changes	5,166		(2,303	)
Total comprehensive income	9,524		2,156
Attributable
to:
- Eni’s shareholders	9,118		1,549
-
Non-controlling interest	406		607

Changes in shareholders' equity (euro million)

| Shareholders’ equity at December 31,
2010 — Total
comprehensive income | 2,156 | | |
| --- | --- | --- | --- |
| Dividends paid to Eni’s shareholders | (1,811 | ) | |
| Dividends
paid by consolidated subsidiaries to non-controlling
interest | (397 | ) | |
| Stock options expired | (6 | ) | |
| Cost
related to stock options | 2 | | |
| Other changes | 32 | | |
| Total
changes | | (24 | ) |
| Shareholders’ equity at June 30, 2011 | | 55,704 | |
| Attributable
to: | | | |
| - Eni ’ s shareholders | | 50,942 | |
| -
Non-controlling interest | | 4,762 | |

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Table of Contents

Group cash flow statement (euro million)

Second Quarter 2010 First Quarter 2011 Second Quarter 2011 First Half 2010 First Half 2011

1,939		2,959		1,500		Net profit	4,358		4,459
						Adjustments
to reconcile net profit to net cash provided by operating
activities:
2,218		2,107		1,914		Depreciation, depletion and amortization	4,370		4,021
57		17		240		Impairments
of tangible and intangible assets, net	89		257
(108	)	(200	)	(82	)	Share of loss of equity-accounted investments	(292	)	(282	)
(75	)	(19	)	(9	)	Gain on
disposal of assets, net	(244	)	(28	)
(199	)	(114	)	(323	)	Dividend income	(242	)	(437	)
(25	)	(25	)	(25	)	Interest
income	(64	)	(50	)
129		159		182		Interest expense	274		341
2,457		2,887		2,446		Income
taxes	4,865		5,333
322		86		(128	)	Other changes	227		(42	)
						Changes in
working capital:
(1,070	)	(270	)	(577	)	- inventories	(1,190	)	(847	)
2,810		(601	)	2,312		- trade
receivables	86		1,711
(854	)	(1,222	)	(284	)	- trade payables	947		(1,506	)
(2	)	(48	)	215		-
provisions for contingencies	54		167
(401	)	412		(299	)	- other assets and liabilities	216		113
483		(1,729	)	1,367		Cash
flow from changes in working capital	113		(362	)
13		(7	)	(5	)	Net change in the provisions for employee
benefits	9		(12
353		118		336		Dividends
received	388		454
27		(14	)	19		Interest received	74		5
(265	)	(216	)	(322	)	Interest
paid	(408	)	(538	)
(2,741	)	(1,824	)	(2,699	)	Income taxes paid, net of tax receivables
received	(4,378	)	(4,523	)
4,585		4,185		4,411		Net
cash provided from operating activities	9,139		8,596
						Investing activities:
(3,968	)	(2,533	)	(3,338	)	- tangible
assets	(6,415	)	(5,871	)
(360	)	(342	)	(402	)	- intangible assets	(692	)	(744	)
				(22	)	-
consolidated subsidiaries and businesses			(22	)
(76	)	(41	)	(65	)	- investments	(115	)	(106	)
(9	)	(8	)	(32	)	-
securities	(13	)	(40	)
(270	)	(513	)	(107	)	- financing receivables	(636	)	(620	)
64		(225	)	285		- change
in payables and receivables in relation to investments
and capitalized depreciation	(40	)	60
(4,619	)	(3,662	)	(3,681	)	Cash flow from investments	(7,911	)	(7,343	)
						Disposals:
10		7		78		- tangible assets	213		85
5		18		(10	)	-
intangible assets	5		8
48				1		- consolidated subsidiaries and businesses	48		1
3		1		8		-
investments	529		9
20				52		- securities	26		52
189		480		38		-
financing receivables	495		518
12		4		106		- change in payables and receivables in relation
to disposals	(32	)	110
287		510		273		Cash
flow from disposals	1,284		783
(4,332	)	(3,152	)	(3,408	)	Net cash used in investing activities (*)	(6,627	)	(6,560	)

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continued Group cash flow statement (euro million)

Second Quarter 2010 First Quarter 2011 Second Quarter 2011 First Half 2010 First Half 2011

| 346 — 1,051 | | 771 — (308 | ) | 2,279 — (749 | ) | Proceeds from long-term debt — Repayments
of long-term debt | 368 — (1,147 | ) | 3,050 — (1,057 | ) |
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
| (279 | ) | (1,100 | ) | (780 | ) | Increase (decrease) in short-term debt | 413 | | (1,880 | ) |
| 1,118 | | (637 | ) | 750 | | | (366 | ) | 113 | |
| | | 6 | | 21 | | Net capital contributions by non-controlling
interest | | | 27 | |
| 3 | | 7 | | 6 | | Net
acquisition of treasury shares different from Eni SpA | 16 | | 13 | |
| | | (8 | ) | | | Acquisition of additional interests in
consolidated subsidiaries | | | (8 | ) |
| (1,811 | ) | | | (1,811 | ) | Dividends
paid to Eni's shareholders | (1,811 | ) | (1,811 | ) |
| (353 | ) | | | (397 | ) | Dividends paid by consolidated subsidiaries to
non-controlling interest | (353 | ) | (397 | ) |
| (1,043 | ) | (632 | ) | (1,431 | ) | Net
cash used in financing activities | (2,514 | ) | (2,063 | ) |
| | | (6 | ) | (1 | ) | Effect of change in consolidation
(inclusion/exclusion of significant/insignificant
subsidiaries) | | | (7 | ) |
| 20 | | (22 | ) | (19 | ) | Effect of
exchange rate changes on cash and cash equivalents and
other changes | 69 | | (41 | ) |
| (770 | ) | 373 | | (448 | ) | Net cash flow for the period | 67 | | (75 | ) |
| 2,445 | | 1,549 | | 1,922 | | Cash
and cash equivalents - beginning of the period | 1,608 | | 1,549 | |
| 1,675 | | 1,922 | | 1,474 | | Cash and cash equivalents - end of the period | 1,675 | | 1,474 | |

(*) Net cash used in investing activities included investments in certain financial assets to absorb temporary surpluses of cash or as a part of our ordinary management of financing activities. Due to their nature and the circumstance that they are very liquid, these financial assets are netted against finance debt in determining net borrowings. Cash flows of such investments were as follows:

(euro million) — Second Quarter 2010	First Quarter 2011	Second Quarter 2011	First Half 2010	First Half 2011

| i — i | i — i | i (13 | (3 | ) | (21 | Financing investments: — -
securities | (13 | ) | (24 | ) |
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
| i | i | i 104 | (77 | ) | 34 | - financing receivables | (2 | ) | (43 | ) |
| i | i | i 91 | (80 | ) | 13 | | (15 | ) | (67 | ) |
| i | i | i | | | | Disposal of financing investments: | | | | |
| i | i | 2 i | | | | -
securities | 8 | | | |
| i | i | 1 | 13 | | 34 | - financing receivables | 13 | | 47 | |
| i | i | 3 | 13 | | 34 | | 21 | | 47 | |
| i | i | 94 | (67 | ) | 47 | Net cash flows from financing activities | 6 | | (20 | ) |

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Supplemental information (euro million)

Second Quarter 2010 First Quarter 2011 Second Quarter 2011 First Half 2010 First Half 2011

| 72 | | Effect of investment in companies included in
consolidation and businesses — Current
assets | 72 | |
| --- | --- | --- | --- | --- |
| 2 | 22 | Non-current assets | 2 | 22 |
| 11 | | Net
borrowings | 11 | |
| (63 | ) | Current and non-current liabilities | (63 | ) |
| 22 | 22 | Net
effect of investments | 22 | 22 |
| (11 | ) | Fair value of investments held before the
acquisition of control | (11 | ) |
| 11 | 22 | Purchase
price | 11 | 22 |
| | | less: | | |
| (11 | ) | Cash
and cash equivalents | (11 | ) |
| | 22 | Cash flow on investments | | 22 |
| | | Effect
of disposal of consolidated subsidiaries and businesses | | |
| 80 | | Current assets | 80 | |
| 696 | 1 | Non-current
assets | 696 | 1 |
| (282 | ) | Net borrowings | (282 | ) |
| (136 | ) | Current
and non-current liabilities | (136 | ) |
| 358 | 1 | Net effect of disposals | 358 | 1 |
| (149 | ) | Fair value
of non-controlling interest retained after disposals | (149 | ) |
| 140 | | Gain on disposal | 140 | |
| (46 | ) | Non-controlling
interest | (46 | ) |
| 303 | 1 | Selling price | 303 | 1 |
| | | less: | | |
| (255 | ) | Cash and cash equivalents | (255 | ) |
| 48 | 1 | Cash
flow on disposals | 48 | 1 |

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Capital expenditure (euro million)

Second Quarter 2010 First Quarter 2011 Second Quarter 2011 % Ch. 2 Q. 11 vs. 10 First Half 2010 First Half 2011 % Ch.

3,186	1,952	2,767	(13.2	)	Exploration & Production	5,150	4,719	(8.4	)
367	279	446	21.5		Gas &
Power	677	725	7.1
149	132	184	23.5		Refining & Marketing	267	316	18.4
45	39	76	68.9		Petrochemicals	71	115	62.0
380	345	206	(45.8	)	Engineering & Construction	792	551	(30.4	)
10	2	1	(90.0	)	Other
activities	19	3	(84.2	)
33	40	22	(33.3	)	Corporate and financial companies	50	62	24.0
158	86	38			Impact of
unrealized intragroup profit elimination	81	124
4,328	2,875	3,740	(13.6	)		7,107	6,615	(6.9	)

| In the first half of 2011,
capital expenditure amounting to euro 6,615 million
related mainly to: | |
| --- | --- |
| - | development activities (euro
3,432 million) deployed mainly in Algeria, Kazakhstan,
Norway, the Unites States, Italy and Congo as well as
blocks and interests in licenses awarded amounting to
euro 757 million, mainly in Nigeria and exploratory
activities (euro 489 million) of which 96% was spent
outside Italy, primarily in Angola, Ghana, Australia, the
United States, Egypt, Indonesia and Norway; |
| - | development and upgrading of
Eni’s natural gas transport network in Italy (euro
374 million) and distribution network (euro 152 million),
as well as development as well as the increase of storage
capacity (euro 131 million); |
| - | projects aimed at improving
the conversion capacity and flexibility of refineries
(euro 249 million), as well as building and upgrading
service stations in Italy and outside Italy (euro 61
million); |
| - | upgrading of the fleet used
in the Engineering & Construction division (euro 551
million). |

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Table of Contents

Capital expenditure by division

EXPLORATION & PRODUCTION

Second Quarter 2010 First Quarter 2011 Second Quarter 2011 First Half 2010 First Half 2011

175	164	198	Italy	327	362
254	330	369	Rest of
Europe	431	699
1,247	426	412	North Africa	1,692	838
635	488	1,114	West
Africa	1,223	1,602
284	217	255	Kazakhstan	507	472
136	112	119	Rest of
Asia	252	231
385	153	276	America	632	429
70	62	24	Australia
and Oceania	86	86
3,186	1,952	2,767		5,150	4,719

GAS & POWER

Second Quarter 2010 First Quarter 2011 Second Quarter 2011 First Half 2010 First Half 2011

68	18	45	Marketing and Power generation	110	63
293	260	397	Regulated
businesses in Italy	561	657
178	157	217	- Transport	342	374
65	64	88	-
Distribution	123	152
50	39	92	- Storage	96	131
6	1	4	International
transport	6	5
367	279	446		677	725

REFINING & MARKETING

Second Quarter 2010 First Quarter 2011 Second Quarter 2011 First Half 2010 First Half 2011

106	107	142	Refining, Supply and Logistic	201	249
40	20	41	Marketing	57	61
3	5	1	Other activities	9	6
149	132	184		267	316

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Exploration & Production

PRODUCTION OF OIL AND NATURAL GAS BY REGION

Second Quarter 2009 First Quarter 2010 Second Quarter 2010 First Half 2009 First Half 2010

| 1,758 | 1,684 | 1,489 | Production of oil and natural gas (a)
(b) | (kboe/d) | 1,800 | 1,586 |
| --- | --- | --- | --- | --- | --- | --- |
| 185 | 186 | 172 | Italy | | 184 | 179 |
| 208 | 224 | 221 | Rest of Europe | | 225 | 223 |
| 583 | 505 | 384 | North
Africa | | 586 | 444 |
| 388 | 375 | 356 | West Africa | | 395 | 365 |
| 107 | 117 | 106 | Kazakhstan | | 114 | 112 |
| 123 | 120 | 104 | Rest of Asia | | 123 | 111 |
| 139 | 131 | 122 | America | | 149 | 127 |
| 25 | 26 | 24 | Australia and Oceania | | 24 | 25 |
| 154.1 | 145.7 | 129.1 | Production
sold (a) | (mmboe) | 312.7 | 274.8 |

PRODUCTION OF LIQUIDS BY REGION

Second Quarter 2009 First Quarter 2010 Second Quarter 2010 First Half 2009 First Half 2010

980	899	793	Production of liquids (a)	995	846
63	67	52	Italy	61	59
113	123	122	Rest of Europe	122	123
306	239	189	North
Africa	296	214
318	286	265	West Africa	329	275
63	71	65	Kazakhstan	68	68
39	38	29	Rest of Asia	37	34
69	67	63	America	73	65
9	8	8	Australia and Oceania	9	8

PRODUCTION OF NATURAL GAS BY REGION

Second Quarter 2009 First Quarter 2010 Second Quarter 2010 First Half 2009 First Half 2010

4,319	4,356	3,867	Production of natural gas (a) (b)	4,466	4,110
676	661	665	Italy	682	663
530	563	549	Rest of Europe	573	556
1,539	1,474	1,080	North
Africa	1,609	1,276
390	496	509	West Africa	364	502
241	257	227	Kazakhstan	256	242
471	452	411	Rest of Asia	475	431
386	353	335	America	420	344
86	100	91	Australia and Oceania	87	96

| (a) | Includes
Eni’s share of production of equity-accounted
entities. |
| --- | --- |
| (b) | Includes
volumes of gas consumed in operations (305 and 307 mmcf/d
in the second quarter 2011 and 2010, respectively, 313
and 312 mmcf/d in the first half 2011 and 2010,
respectively, and 321 mmcf/d in the first quarter 2011). |

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Petrochemicals

Second Quarter 2010 First Quarter 2011 Second Quarter 2011 First Half 2010 First Half 2011

| 810 | 847 | 823 | Sales of petrochemical products — Basic
petrochemicals | (euro million) — 1,483 | 1,670 |
| --- | --- | --- | --- | --- | --- |
| 838 | 903 | 876 | Polymers | 1,596 | 1,779 |
| 50 | 47 | 48 | Other
revenues | 95 | 95 |
| 1,698 | 1,797 | 1,747 | | 3,174 | 3,544 |
| | | | Production | (ktonnes) | |
| 1,295 | 1,171 | 1,036 | Basic petrochemicals | 2,536 | 2,207 |
| 605 | 553 | 587 | Polymers | 1,212 | 1,140 |
| 1,900 | 1,724 | 1,623 | | 3,748 | 3,347 |

Engineering & Construction (euro million)

Second Quarter 2010 First Quarter 2011 Second Quarter 2011 First Half 2010 First Half 2011

| 818 | 1,727 | 1,535 | Orders acquired — Engineering
& Construction Offshore | 1,923 | 3,262 |
| --- | --- | --- | --- | --- | --- |
| 3,534 | 933 | 1,144 | Engineering & Construction Onshore | 4,781 | 2,077 |
| 9 | 75 | 274 | Offshore
drilling | 149 | 349 |
| 20 | 173 | 145 | Onshore drilling | 206 | 318 |
| 4,381 | 2,908 | 3,098 | | 7,059 | 6,006 |

| (euro
million) | Dec. 31, 2010 | June 30, 2011 |
| --- | --- | --- |
| Order backlog | 20,505 | 20,490 |

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The Board of Directors of Eni establishes the Nomination Committee

San Donato Milanese (Milan), July 29, 2011 - The Board of Directors of Eni established the Nomination Committee, led by the Chairman of the Board of Directors, Giuseppe Recchi, and composed by the Chairmen of the other Board Committees: Alessandro Lorenzi (Chairman of the Internal Control Committee) Alessandro Profumo (Chairman of the Oil-Gas Energy Committee) and Mario Resca (Chairman of the Compensation Committee). The Committe resolves on the basis of the proposals of the CEO, who takes part to its meetings.

The members of the Nomination Committee are all non-executive directors. The majority of them are independent in accordance with the recommendations of the Corporate Governance Code of Borsa Italiana.

In addition to the tasks set by Eni's Corporate Governance Code, the Committee has the authority to propose and consult the Board in relation to: appointment, under the Board’s competence, of the managers of the Company and of the members of the bodies of the subsidiaries; the succession plans for the managers with strategic responsibilities of the Company; the Board and its committees annual review; the guidelines regarding the maximum number of offices of the directors; the evaluation of their requirements, as well as of any business they may carry on in competition.

Company Contacts:

Press Office: +39.0252031875 - +39.0659822030 Freephone for shareholders (from Italy): 800940924 Freephone for shareholders (from abroad): +39. 800 11 22 34 56 Switchboard: +39-0659821

ufficio.stampa@eni.com segreteriasocietaria.azionisti@eni.com investor.relations@eni.com

Website: www.eni.com