- Eni presented its integrated model for developing sustainable energy and addressing the challenges of maximizing energy access and fighting climate change.
- Key parts of Eni's model include managing risks, leveraging competencies and innovation, pursuing carbon reduction and renewables commitments, and international cooperation on energy and development projects.
- Eni aims to transition to a lower carbon future through increasing natural gas production and reserves, energy efficiency improvements, carbon pricing policies, and investing in its Energy Solutions department for renewable energy and green conversion projects.
2. 1IEA New Policies Scenario UNFCCC
Two main challenges for the future
Maximising access to energy
2°C Carbon Budget: 2,900 Gton CO2
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14
16
18
2013 2020 2025 2030 2035 2040
+32%
2040
vs
2013
Fighting climate change
1.3 billion people
without access to electricity
2.7 billion cooking
with biomass
under INDCs,
carbon budget will be
exhausted within 2040
Gtoe
emitted until 2011 remaining
3. 2
Eni integrated model
Long term value creation for stakeholders
Financial robustness Social & environmental sustainability
STRATEGIC GOAL
Key Pillars
Risk
management
Competences
&
Innovation
Compliance
Co-operation model Operating model Path to decarbonization
Levers
4. Eni governance on risks and compliance
1st line
“Line”
managers –
risk owners
2nd line
Risk & Control
functions
3rd line
Internal Audit
Chairman
Board
Control and Risk Committee/Board
of Auditors
Risk Committee
Compliance
Committee
Integrated
Compliance
Integrated Risk
Management
CEO
~20 top risks out of around 150 risks identified
Nearly 80 indicators for top risks quarterly monitoring
Strategic Risks
External Risks
Operational
Risks
Price scenario, Climate change,
Stakeholder’s relationship
Country political & social
instability
Credit & Financial risk
Regulatory evolution – HSE and
gas & power
Blow out/accidents
Investigations and legal
proceedings
Cyber Security and other process
risks
ENI TOP RISKS
ENHANCED GOVERNANCE ON RISKS &
COMPLIANCE
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5. 4
carbon footprint
reduction
commitment on
renewables
Reduction of GHG emissions:
• Reduction of routine flaring
• Minimise fugitive methane
emissions
• Energy efficiency
Carbon pricing policies
• Public advocacy for carbon pricing
• Internal carbon pricing sensitivity
large share of natural
gas reserves
portfolio resilience at
450 ppm scenario
low carbon portfolio
Energy Solutions Department
Green conversion of
downstream assets: green
refinery and biofuels
Research focus on energy mix
diversification and green
businesses
Eni acknowledges the need to limit the temperature increase below 2°C
International engagement for joint action
An integrated strategy for decarbonization
6. 5
Portfolio resilience is enhanced by gas and cost competitiveness
new projects 2P res | Bep $/boe
$30
$15
$30
onshore
deep
water
shallow
water
0
50
100
150
2014 2016 2018 2020 2022 2024 2026 2028 2030 2032 2034
Brent Eni IEA 450 scenario
oil price scenario | $/bbl
Eni oil price
scenario is
lower than the
IEA 2°C
assumptions
Eni applies
carbon pricing
sensitivity
$ 40/ton in
real terms
avg 27 $/boe no risk of stranded assets
8. 7
PRODUCTION FOR DOMESTIC MARKET
ACCESS TO ELECTRICITY
ENERGY MIX
ECONOMIC DIVERSIFICATION
LOCAL DEVELOPMENT
HEALTH AND EDUCATION
BEING LOCAL
CREATING A LONG TERM PARTNERSHIP
Long-term value creation - our flagship model
FULL PARTNERSHIP
Transfer of KNOW HOW
UNINTERRUPTED PRESENCE
9. 8
Providing energy to foster development
Power generation
4 gas power plants supplying:
60% of power in Congo
20% in Nigeria
Off-grid power in Congo and Nigeria
Access to energy for 18 million people
Gas to local markets
43 bcm of production to domestic markets
In 10 countries 100% of production sold
locally
= existing gas power plan
= new power generation projects
Libya
Egypt
Tunisia
Algeria
Pakistan
Mozambique
Angola
Nigeria
Congo
Ghana
Venezuela
= 100% gas production to local
market/primary suppliers
= 100% future gas production to local
market/primary suppliers
10. 9
Development projects for local communities
Infrastructure
Economic diversification Health care Access to water
Education
2010-2019
Investments for ~1 Bln €*
≈ 550,000 people involved in
agricultural projects mainly in
Congo, Tunisia and Nigeria
≈ 900,000 patients examined
more than 1 mln vaccinations
mainly in Angola, Congo and
Pakistan
≈90,000 students reached
mainly in Kazakhstan, Italy,
Mozambique and Nigeria
≈500,000 beneficiaries of
transportation projects reached
mainly in Kazakhstan and Nigeria
≈130,000 people reached mainly
in Congo, Kazakhstan,
Mozambique and Nigeria
*including off-grid projects
11. Empowering local workforce
10* Direct Managed workforce – Consolidated and Unconsolidated Subsidiaries (excluding Italy)
66% of 2015 total procurement spent on
local suppliers
In the last 5 years, local employment*
increased by 21%
13. Continuous improvement on environmental impact
FLARING DOWN
REINJECTION
OF PRODUCED WATER
UPSTREAM METHANE
EMISSIONS
SAFETY
Eni top performer
since 2013
Volume of flared gas:
-73% from 2007
56% reinjection of
produced water in
2015
Target: Zero routine
flaring by 2025
Target: 64%
reinjected by 2019
Target: -80%
reduction by 2025
-47% reduction from
2007
2015 vs 2014
-37% TRIR
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14. Eni’s unique exploration track record and model
*peers = BP, CVX, RDS, REP, TOT, XOM
peers* average: 0.3x
Cumulative discovered resources | bln boe Discoveries vs production 2008-15 | bln boe
0.4 0.3 0.4 0.4 0.2 1.0
Discoveries
2008-15
Discoveries /
production ratio
1.4
10.5
2.4
yearly additions
cumulative
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15. Exploration risk evaluation
Basin
Geometry
Temperature
& Pressure
Source Rock
Geochemistry
Generation
& Expulsion
Migration
& Trapping
Exploration
Risk
Evaluation
HC Migration Paths Gas filling probability map Histogram of filling probability
Green Data Center
7,700 physical and virtual servers
4.5 Petaflop of computation capacity
Petroleum System Modelling
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16. Strong interfunctional
integration from exploration to
start-up
Working in parallel rather than
sequentially
Risk reduction through reservoir
uncertainties quantification
3D reservoir models developed
during exploration stages
Conventionalproject
schedule
Phased/fasttrack
projectschedule
Workflows: faster time-to-market from reserves to resources
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17. 16
Our development model
Phaseable development
Design-to-cost approach
Strict control on execution
Integration with commissioning
and operations
People&Processes
Knowledgemanagement
A simpler and manageable operating model
18. 17
Marine XII and Nooros: examples of our integrated approach
Marine XII
Minsala
Dev/Prod areas
Exploration area
Litchendjili Marine
Nenè Marine
Minsala Marine
Nooros
Equity production (kboed)
Nenè 78
Marine XII 150
July
2015
Sept
2015
July
2016
Oct
2016
70
kboed
130
kboed
19. 18
Minimising our operational risks
Competences
Training
Know how
Safety culture
Technologies
Processes
Organization model
Best Practices & Procedure
Rig Inspections
MSG Operations
Real Time Monitoring
OPERATIONAL RISKS
1994 2001 20152000 20092005
50 patents to enhance safety and performance
Automatic
Drilling
Downhole
Isolation
Packer
New
Wellhead
Safety Valve
Eni Rapid
Cube
Eni Dual ROV
Killing System
Casing
valve
2014 2016 2017
Additional Well Barriers
20. 19
Offshore production activity limited to all-year-round ice-free conditions
Safety for people
Protecting Arctic environment
Technologies and competencies
Oil Spill Prevention
Working together with local communities
Our policy
Our drivers
Focus: our Arctic operations
Weather base Design: FPSO design and operation limits defined to tolerate
extreme weather conditions
Emission reduction: FPSO powered from shore and associated gas re-
injection
Oil Spill Detection & Response: Intervention capability increased by
novel technology (i.e. Stand by vessel Esvagt Aurora provided with the best
technologies for oil detection and spill response)
Specific risk mitigations: Goliat
Setting the standards for offshore Arctic production
22. 21
The role of gas in the energy transition process
18%
1%
52%
29%
26%
4%
50%
20%
Other (Biomass + Hydro + Nuke)
Wind & Solar
O&G
Coal
2030
2015
Costs
Emissions
Environmental
impact
Reliability
Security of
supply
Gas Coal Oil
Wind &
Solar
-
- -
IEA scenario Role of gas
23. 22
GHG emissions | tCO2 eq/toe
GHG intensity reduction
2025 vs 2014: -43%
-2%/y
-3.5%/y
-4%/y
GHG reduction targets
Methane
fugitives
Main projects: Nigeria, Congo, Libya
GHG reductions: -5 Mton CO2
Flaring
down
Energy
efficiency
Initiatives in existing sites & new plants
GHG reductions: -2 Mton CO2
Monitoring/control campaigns in 50 sites
GHG reductions: -2 Mton CO2
24. 23
Brownfields
asset transition
Greenfields
new cooperation model
Competitive skills
Global presence and large portfolio of industrial assets
Know-how in managing complex and hybrid projects
Excellence in R&D
Multiple and flexible financial levers
Energy Solutions business model
25. 24
Energy Solutions: map of activities
220 MWp of capacity installed in Italy by 2022
Reclaim and convert existing industrial areas in Italy
implementing large-scale renewables energy plants
160 MWp of capacity installed abroad by 2018
Integrating renewable with oil & gas assets
6 FIDs planned by end 2016 for fast-track
development in Egypt, Algeria and selected Italian
sites, for a total capacity of about 150 MWp
On average 0.3 Mtons/y of CO2 emissions
avoided for 20 years
Ongoing Projects
TARGET:
maximize the use of renewables to meet the energy needs of our facilities and
reduce CO2 emissions
26. 25
Eni’s new mission
We are an energy company
We are working to build
a future where everyone can access energy
efficiently and sustainably
Our work is based on passion and innovation,
on our unique strengths and skills, on the quality of our people
and in recognising that diversity across all aspects of our operations
and organisation is something to be cherished
We believe in the value of long term partnerships
with the countries and communities where we operate
Hinweis der Redaktion
Good morning and thank you for being here today.
The main objective of this meeting is to give you an update on our Environmental, Social and Governance model.
Since last time we met, many things have happened and Eni’s model has been improved and adjusted in order to face this different scenario.
And now I’d like to give you some elements to define the context and the future challenges we are going to face.
The key future challenge for the energy sector is to achieve a balance between:
maximising access to energy, and
fighting climate change.
Today 2/3 of our carbon budget, equivalent to 2.9 Trillion tons of CO2, has already been used.
Over the coming decades, the World’s population will grow from 7 to 9 billion and energy demand will increase by around 30%. There will be also a geographical shift in consumption and 70% of energy demand will come from non-OECD countries, which represent around 85% of the world’s population.
A major priority is how to extend access to affordable energy. Today there are 1.3 billion people with no access to electricity, half of them in Sub-Saharan Africa, and 2.7 billion people still using biomass for domestic cooking and heating.
However, if the global temperature increase is to stay below 2°, we cannot give access to energy and satisfy the increasing energy demand with the current carbon intensive energy mix.
The solution to this equation will provide the basis for energy transition, although this process will take time, at least until there is a technological breakthrough.
The challenge therefore is to change the energy mix, thinking in terms of priorities, feasibility, long term planning and the world’s carbon budget.
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And now let’s focus on the first of our operating levers, our model of cooperation and development in host countries.
We can see this model in this short video
INFOGRAPHIC
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Thank you Claudio.
The second lever is our operating model, which is characterized by a continuous effort in minimizing risks along the whole production cycle.
On this, specific risk evaluation and management is carried out in all operations to support decision making and efficiency.
Focus on minimizing risks and safeguarding people and the environment, is a must in our operating model and one of the main targets of each phase of the production cycle.
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As i said earlier In 2008, we made the strategic decision to change our approach in exploration and to develop internal competences and proprietary technologies.
These last 8 years, we have spent more than 200 Mln € in Geophysical and Geological Research to develop our own proprietary technologies for Seismic imaging and Petroleum System Modelling in order to:
Better quantify geological uncertainties
De-risk Exploration,
De-risk the Asset Life cycle
These technologies are based on complex algorithms and implemented on our high-performance hardware platform located in our Green Data Center, where we can call on 4,5 petaflops of computing capacity.
With this, we can process about 90% of the depth imaging projects in-house, savings on the cost of licenses.
All of this is also instrumental in fast tracking the transformation of discovered resources into reserves, but we will come back to this later on.
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The close integration from exploration to start-up means fast-tracking resources into reserves. Indeed, to mitigate risks associated to development activities, reduce costs and enhance the time to market, we pursue a simpler, more effective and manageable approach composed of the following elements:
Firstly, a phased approach. This gives us a better time to market of our projects and accelerates start-up and ramp-up;
Second is design to cost. This is where the project is optimised to reduce development costs whilst making sure the facilities are energy efficient and environmentally safe,
Third is the strict control on project execution: contractual strategies, design freezes, and maintaining high level of supervision by using our own people.Finally, a closer integration between commissioning and operations;
This approach resulted in an average upstream cost of our new projects from 30$/boe level of 2014 to around 20 $/boe.
Furthermore an other important element is a high level of operatorship, which will reach 90% in our start-ups in the next 4 years, putting us in a position to strictly control risks, costs and time.
Let me give you some examples of our integrated approach to exploration and development, Marine XII in Congo and Noroos in Egypt.
Both Marine XII and Noroos come from our near-field exploration strategy, which is leading to a rapid development of these new discoveries thanks to synergies with the existing production infrastructure with an exceptional time-to-market.
In Congo we reached first oil just 11 months after discovery.The huge potential of this play is now about 5.5 billion boe of resources and we expect further upsides reaching overall production of 150 kboe at the end of this decade.
In Egypt, the Nooros field has reached in only 13 Months a production level of 128,000 boepd. We expect to reach a production level of 160,000 boepd early next year.
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Let’s start with the role of gas in the transition process.
The promotion of gas is key to our decarbonization strategy, which in turn is based on the ideal energy mix of the future.
According to the IEA scenario, global energy demand in 2030 will increase by 21% with respect to the current levels, reaching 16 Gtoe. However, this growth will only involve minor changes in the energy mix. Coal will still play a major role, satisfying 20% of total demand, while modern renewables will contribute just 4%. As a consequence, this will cause a further increase of total GHG emissions, from 32 Gton in 2013 to 35 Gton in 2030.
If we do not intervene to change the energy mix, we will not be able to reach the goals of meeting energy needs and safeguarding the environment.
We all know that modern renewables, like solar and wind, have a very positive impact on the environment but today they still suffer from several limitations:
extended areas that are needed for installation; a wind field for example, needs 200 times the space of a gas power plant;
intermittence, subject to the availability of the natural source and to climate conditions;
low utilization factor, and
geographical misfit, meaning high potential areas are often far from consumption areas, and require large investments in infrastructures.
When considering the pros and cons of the different sources of energy, it is clear that today the best partner for renewables is gas.
From an environmental perspective gas-fired power plants are more efficient and produce about half of CO2 emissions with respect to a coal plant, and none of the other pollutants as SOX, NOX and fine dust.
In terms of costs, gas is a highly competitive resource as well as being reliable and secure. Gas is therefore the best energy source as it can supply power systems with baseload profiles and considerable flexibility.
We also have to remember that gas is largely available and easily accessible, with current estimates of proved worldwide reserves around 203,000 bcm.
In this transition process towards renewables, natural gas is the ideal fuel for electricity generation, and has an important role to play also in transport.
Today, 58% of Eni’s portfolio is made up of gas and the forthcoming projects in Mozambique, Egypt and Indonesia confirm Eni’s commitment on this front.
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To conclude our presentation I’d like to share with you our brand new mission statement which is the perfect way to summarize the essence of our ESG efforts.
- “We are an energy company”.
- “We are working to build a future where everyone can access energy efficiently and sustainably”.
- “Our work is based on passion and innovation, on our unique strengths and skills, on the quality of our people and in recognising that diversity across all aspects of our operations and organisation is something to be cherished”.
“We believe in the value of long term partnerships with the countries and communities where we operate”.
The key words in this mission statement are :
1 ) access to energy , which means development and building a better future for humanity
2) Diversity, which means respect for others and inclusion, enhancing all the potential around us
3) Stakeholder engagement which means creating long term value
Thank you for listening, and now we will answer your questions.