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Oil and natural gas reserves

Eni’s criteria concerning evaluation and classification of proved developed and undeveloped reserves follow Regulation S-X 4-10 of the US Securities and Exchange Commission and have been disclosed in accordance with FASB Extractive Activities - Oil & Gas (Topic 932). Proved oil and gas reserves are those quantities of oil and gas, which, by analysis of geoscience and engineering data, can be estimated with reasonable certainty to be economically producible, from a given date forward, from known reservoirs, and under existing economic conditions, operating methods, and government regulations, prior to the time at which contracts providing the right to operate expire, unless evidence indicates that renewal is reasonably certain, regardless of whether deterministic or probabilistic methods are used for the estimation. The project to extract the hydrocarbons must have commenced or the operator must be reasonably certain that it will commence the project within a reasonable time. Existing economic conditions include prices and costs at which economic producibility from a reservoir is to be determined. The price shall be the average price during the 12-month period prior to the ending date of the period covered by the report, determined as an un-weighted arithmetic average of the first-day-of-the-month price for each month within such period, unless prices are defined by contractual arrangements, excluding escalations based upon future conditions. In 2011, the marker price for Brent was $111 per barrel. Net proved reserves exclude interests and royalties owned by others. Proved reserves are classified as either developed or undeveloped. Developed oil and gas reserves are reserves that can be expected to be recovered through existing wells with existing equipment and operating methods or in which the cost of the required equipment is relatively minor compared to the cost of a new well. Undeveloped oil and gas reserves are reserves of any category that are expected to be recovered from new wells on undrilled acreage, or from existing wells where a relatively major expenditure is required for recompletion. Since 1991, Eni has requested qualified independent oil engineering companies to carry out an independent evaluation1 of part of its proved reserves on a rotational basis. The description of qualifications of the person primarily responsible of the reserve audit is included in the third party audit report2.

In the preparation of their reports, independent evaluators rely, without independent verification, upon data furnished by Eni with respect to property interest, production, current cost of operation and development, sale agreements, prices and other factual information and data that were accepted as represented by the independent evaluators. These data, equally used by Eni in its internal process, include logs, directional surveys, core and PVT (Pressure Volume Temperature) analysis, maps, oil/gas/water production/injection data of wells, reservoir studies and technical analysis relevant to field performance, long-term development plans, future capital and operating costs. In order to calculate the economic value of Eni equity reserves, actual prices applicable to hydrocarbon sales, price adjustments required by applicable contractual arrangements, and other pertinent information are provided. In 2011, Ryder Scott Company and DeGolyer and MacNaughton2 provided an independent evaluation of almost 32% of Eni’s total proved reserves as of December 31, 20113, confirming, as in previous years, the reasonableness of Eni’s internal evaluations. In the three year period from 2009 to 2011, 85% of Eni’s total proved reserves were subject to independent evaluation. As of December 31, 2011, the principal property not subjected to independent evaluation in the last three years is Kashagan (Kazakhstan). Eni operates under Production Sharing Agreements, PSAs, in several of the foreign jurisdictions where it has oil and gas exploration and production activities. Reserves of oil and natural gas to which Eni is entitled under PSA arrangements are shown in accordance with Eni’s economic interest in the volumes of oil and natural gas estimated to be recoverable in future years. Such reserves include estimated quantities allocated to Eni for recovery of costs, income taxes owed by Eni but settled by its joint venture partners (which are state-owned entities) out of Eni’s share of production and Eni’s net equity share after cost recovery. Proved oil and gas reserves associated with PSAs represented 57%, 55% and 49% of total proved reserves as of December 31, 2009, 2010 and 2011, respectively, on an oil-equivalent basis. Similar effects as PSAs apply to service and “buy-back” contracts; proved reserves associated with such contracts represented 2%, 3% and 1% of total proved reserves on an oil-equivalent basis as of December 31, 2009, 2010 and 2011, respectively. Oil and gas reserve quantities include: (i) oil and natural gas quantities in excess of cost recovery which the company has an obligation to purchase under certain PSAs with governments or authorities, whereby the company serves as producer of reserves. Reserve volumes associated with oil and gas deriving from such obligation represent 0.3%, 0.6% and 0.8% of total proved reserves as of December 31, 2009, 2010 and 2011, respectively, on an oil-equivalent basis; (ii) volumes of natural gas used for own consumption; (iii) the quantities of hydrocarbons related to the Angola LNG plant; and (iv) volumes of natural gas held in certain Eni storage fields in Italy. Proved reserves attributable to these fields include: (a) the residual natural gas volumes of the reservoirs; and (b) natural gas volumes from other Eni fields input into these reservoirs in subsequent periods. Proved reserves do not include volumes owned by or acquired from third parties. Gas withdrawn from storage is produced and thereby removed from proved reserves when sold. Numerous uncertainties are inherent in estimating quantities of proved reserves, in projecting future productions and development expenditures. The accuracy of any reserve estimate is a function of the quality of available data and engineering and geological interpretation and evaluation.

(1) From 1991 to 2002, DeGolyer and MacNaughton, from 2003 also Ryder Scott.
(2) The reports of independent engineers are available on Eni website eni.com, section Publications/Annual Report 2011.
(3) Including reserves of equity-accounted entities.

The results of drilling, testing and production after the date of the estimate may require substantial upward or downward revisions. In addition, changes in oil and natural gas prices have an effect on the quantities of Eni’s proved reserves since estimates of reserves are based on prices and costs relevant to the date when such estimates are made. Consequently, the evaluation of reserves could also significantly differ from actual oil and natural gas volumes that will be produced.

The following table presents yearly changes in estimated proved reserves, developed and undeveloped, of crude oil (including condensate and natural gas liquids) and natural gas as of December 31, 2009, 2010 and 2011.

Movements in net proved hydrocarbons reserves (mmboe)
2009 Italy(a) Rest of Europe North Africa Sub-Saharan
Africa
Kazakhstan Rest of Asia(b) America Australia
and Oceania
Total
Consolidated subsidiaries 
Reserves at December 31, 2008 681 525 1,922 1,146 1,336 265 235 132 6,242
of which: developed 465 417 1,229 827 647 168 133 62 3,948
undeveloped 216 108 693 319 689 97 102 70 2,294
Purchase of minerals in place 2 24 26
Revisions of previous estimates 74 65 76 102 (72) (26) 44 (2) 261
Improved recovery 13 10 14 37
Extensions and discoveries 10 79 121 6 44 13 9 282
Production (62) (91) (207) (129) (43) (47) (53) (6) (638)
Sales of minerals in place (1) (1)
Reserves at December 31, 2009 703 590 1,922 1,141 1,221 236 263 133 6,209
Equity-accounted entities
Reserves at December 31, 2008 17 8 622 19 666
of which: developed 13 4 83 7 107
undeveloped 4 4 539 12 559
Purchase of minerals in place
Revisions of previous estimates 1 2 3
Improved recovery      
Extensions and discoveries 1 14 15
Production (3) (1) (1) (3) (8)
Sales of minerals in place (314) (314)
Reserves at December 31, 2009 15 22 309 16 362
Reserves at December 31, 2009 703 590 1,937 1,163 1,221 545 279 133 6,571
Developed 490 432 1,278 804 614 183 181 122 4,104
consolidated subsidiaries 490 432 1,266 799 614 139 168 122 4,030
equity-accounted entities 12 5 44 13 74
Undeveloped 213 158 659 359 607 362 98 11 2,467
consolidated subsidiaries 213 158 656 342 607 97 95 11 2,179
equity-accounted entities 3 17 265 3 288
  1. Including approximately 746 and 769 bcf of natural gas held in storage at December 31, 2008 and 2009, respectively.
  2. Proved reserves of equity-accounted entities at year end 2008 include 60% of the three former Yukos companies. From 2009, after the 51% call option exercised by Gazprom, values are reported at 29.4%.
Movements in net proved hydrocarbons reserves (mmboe)
2010 Italy(a) Rest of Europe North Africa Sub-Saharan
Africa
Kazakhstan Rest of Asia America Australia
and Oceania
Total
Consolidated subsidiaries 
Reserves at December 31, 2009 703 590 1,922 1,141 1,221 236 263 133 6,209
of which: developed 490 432 1,266 799 614 139 168 122 4,030
undeveloped 213 158 656 342 607 97 95 11 2,179
Purchase of minerals in place
Revisions of previous estimates 97 34 353 116 (56) 104 13 661
Improved recovery 1 1 2
Extensions and discoveries 57 39 22 1 2 4 125
Production (67) (80) (218) (145) (39) (46) (48) (10) (653)
Sales of minerals in place (9) (1) (2) (12)
Reserves at December 31, 2010 724 601 2,096 1,133 1,126 295 230 127 6,332
Equity-accounted entities
Reserves at December 31, 2009 15 22 309 16 362
of which: developed 12 5 44 13 74
undeveloped 3 17 265 3 288
Purchase of minerals in place
Revisions of previous estimates 9 1 10 (1) 19
Improved recovery 12 12
Extensions and discoveries 1 6 120 127
Production (2) (1) (2) (4) (9)
Sales of minerals in place
Reserves at December 31, 2010 23 28 317 143 511
Reserves at December 31, 2010 724 601 2,119 1,161 1,126 612 373 127 6,843
Developed 554 405 1,237 817 543 182 167 117 4,022
consolidated subsidiaries 554 405 1,215 812 543 139 141 117 3,926
equity-accounted entities 22 5 43 26 96
Undeveloped 170 196 882 344 583 430 206 10 2,821
consolidated subsidiaries 170 196 881 321 583 156 89 10 2,406
equity-accounted entities 1 23 274 117 415
  1. Including approximately 769 and 767 bcf of natural gas held in storage at December 31, 2009 and 2010, respectively.
Movements in net proved hydrocarbons reserves (mmboe)
2011 Italy(a) Rest of Europe North Africa Sub-Saharan
Africa
Kazakhstan Rest of Asia America Australia
and Oceania
Total
Consolidated subsidiaries 
Reserves at December 31, 2010 724 601 2,096 1,133 1,126 295 230 127 6,332
of which: developed 554 405 1,215 812 543 139 141 117 3,926
undeveloped 170 196 881 321 583 156 89 10 2,406
Purchase of minerals in place 2 2
Revisions of previous estimates 48 94 88 12 (137) (26) 10 17 106
Improved recovery 2 2 2 6
Extensions and discoveries 1 13 3 14 40 71
Production (68) (78) (158) (133) (39) (39) (42) (11) (568)
Sales of minerals in place (2) (7) (9)
Reserves at December 31, 2011 707 630 2,031 1,021 950 230 238 133 5,940
Equity-accounted entities
Reserves at December 31, 2010 23 28 317 143 511
of which: developed 22 5 43 26 96
undeveloped 1 23 274 117 415
Purchase of minerals in place
Revisions of previous estimates 37 73 13 123
Improved recovery 1 1
Extensions and discoveries 19 268 233 520
Production (2) (1) (2) (4) (9)
Sales of minerals in place
Reserves at December 31, 2011 21 83 656 386 1,146
Reserves at December 31, 2011 707 630 2,052 1,104 950 886 624 133 7,086
Developed 540 374 1,194 746 482 134 188 112 3,770
consolidated subsidiaries 540 374 1,175 742 482 129 162 112 3,716
equity-accounted entities 19 4 5 26 54
Undeveloped 167 256 858 358 468 752 436 21 3,316
consolidated subsidiaries 167 256 856 279 468 101 76 21 2,224
equity-accounted entities 2 79 651 360 1,092
  1. Including approximately 767 and 767 billion cubic feet of natural gas held in storage at December 31, 2010 and 2011.
Movements in net proved liquids reserves (mmbbl)
2009 Italy Rest of Europe North Africa Sub-Saharan
Africa
Kazakhstan Rest of Asia (a) America Australia
and Oceania
Total
Consolidated subsidiaries 
Reserves at December 31, 2008 186 277 823 783 911 106 131 26 3,243
of which: developed 111 222 613 576 298 92 74 23 2,009
undeveloped 75 55 210 207 613 14 57 3 1,234
Purchase of minerals in place 2
Revisions of previous estimates 57 40 129 78 (36) (35) 36 1 270
Improved recovery 8 10 15 33
Extensions and discoveries 10 74 38 5 44 12 8 191
Production (20) (48) (105) (113) (26) (21) (26) (3) (362)
Sales of minerals in place
Reserves at December 31, 2009 233 351 895 770 849 94 153 32 3,377
Equity-accounted entities
Reserves at December 31, 2008 14 8 101 19 142
of which: developed 11 4 11 7 33
undeveloped 3 4 90 12 109
Purchase of minerals in place
Revisions of previous estimates
Improved recovery
Extensions and discoveries 1 1
Production (2) (1) (3) (6)
Sales of minerals in place (51) (51)
Reserves at December 31, 2009 13 7 50 16 86
Reserves at December 31, 2009 233 351 908 777 849 144 169 32 3,463
Developed 141 218 669 548 291 52 93 23 2,035
consolidated subsidiaries 141 218 659 544 291 45 80 23 2,001
equity-accounted entities 10 4 7 13 34
Undeveloped 92 133 239 229 558 92 76 9 1,428
consolidated subsidiaries 92 133 236 226 558 49 73 9 1,376
equity-accounted entities 3 3 43 3 52
  1. Proved reserves of equity-accounted entities at year end 2008 include 60% of the three former Yukos companies. From 2009, after the 51% call option exercised by Gazprom, values are reported at 29.4%.
Movements in net proved liquids reserves (mmbbl)
2010 Italy Rest of Europe North Africa Sub-Saharan
Africa
Kazakhstan Rest of Asia America Australia
and Oceania
Total
Consolidated subsidiaries 
Reserves at December 31, 2009 233 351 895 770 849 94 153 32 3,377
of which: developed 141 218 659 544 291 45 80 23 2,001
undeveloped 92 133 236 226 558 49 73 9 1,376
Purchase of minerals in place
Revisions of previous estimates 38 17 178 75 (37) 62 2 335
Improved recovery 1 1 2
Extensions and discoveries 25 13 22 1 61
Production (23) (44) (108) (116) (24) (17) (22) (3) (357)
Sales of minerals in place (1) (2) (3)
Reserves at December 31, 2010 248 349 978 750 788 139 134 29 3,415
Equity-accounted entities
Reserves at December 31, 2009 13 7 50 16 86
of which: developed 10 4 7 13 34
undeveloped 3 3 43 3 52
Purchase of minerals in place
Revisions of previous estimates 8 (6) (2)
Improved recovery 12 12
Extensions and discoveries 117 117
Production (2) (1) (4) (7)
Sales of minerals in place
Reserves at December 31, 2010 19 6 44 139 208
Reserves at December 31, 2010 248 349 997 756 788 183 273 29 3,623
Developed 183 207 674 537 251 44 87 20 2,003
consolidated subsidiaries 183 207 656 533 251 39 62 20 1,951
equity-accounted entities 18 4 5 25 52
Undeveloped 65 142 323 219 537 139 186 9 1,620
consolidated subsidiaries 65 142 322 217 537 100 72 9 1,464
equity-accounted entities 1 2 39 114 156
Movements in net proved liquids reserves (mmbbl)
2011 Italy Rest of Europe North Africa Sub-Saharan
Africa
Kazakhstan Rest of Asia America Australia
and Oceania
Total
Consolidated subsidiaries 
Reserves at December 31, 2010 248 349 978 750 788 139 134 29 3,415
of which: developed 183 207 656 533 251 39 62 20 1,951
undeveloped 65 142 322 217 537 100 72 9 1,464
Purchase of minerals in place
Revisions of previous estimates 34 58 10 14 (112) (20) 1 (15)
Improved recovery 2 2 2 6
Extensions and discoveries 9 2 11 17 39
Production (23) (44) (75) (100) (23) (13) (20) (4) (302)
Sales of minerals in place (2) (7) (9)
Reserves at December 31, 2011 259 372 917 670 653 106 132 25 3,134
Equity-accounted entities
Reserves at December 31, 2010 19 6 44 139 208
of which: developed 18 4 5 25 52
undeveloped 1 2 39 114 156
Purchase of minerals in place
Revisions of previous estimates 11 6 11 28
Improved recovery 1 1
Extensions and discoveries 6 60 4 70
Production (2) (1) (4) (7)
Sales of minerals in place
Reserves at December 31, 2011 17 22 110 151 300
Reserves at December 31, 2011 259 372 934 692 653 216 283 25 3,434
Developed 184 195 638 487 215 34 117 25 1,895
consolidated subsidiaries 184 195 622 483 215 34 92 25 1,850
equity-accounted entities 16 4 25 45
Undeveloped 75 177 296 205 438 182 166 1,539
consolidated subsidiaries 75 177 295 187 438 72 40 1,284
equity-accounted entities 1 18 110 126 255
Movements in net proved natural gas reserves (bcf)
2009 Italy(a) Rest of Europe North Africa Sub-Saharan
Africa
Kazakhstan Rest of Asia(a) America Australia
and Oceania
Total
Consolidated subsidiaries 
Reserves at December 31, 2008 2,844 1,421 6,311 2,084 2,437 911 600 606 17,214
of which: developed 2,031 1,122 3,537 1,443 2,005 439 340 221 11,138
undeveloped 813 299 2,774 641 432 472 260 385 6,076
Purchase of minerals in place 1 136 137
Revisions of previous estimates 97 149 (309) 142 (204) 52 43 (17) (47)
Improved recovery 25 25
Extensions and discoveries 1 26 479 2 7 4 519
Production (238) (239) (587) (100) (94) (151) (155) (18) (1,582)
Sales of minerals in place (2) (2) (4)
Reserves at December 31, 2009 2,704 1,380 5,894 2,127 2,139 814 629 575 16,262
Equity-accounted entities
Reserves at December 31, 2008 13 2 3,000 3,015
of which: developed 11 1 408 420
undeveloped 2 1 2,592 2,595
Purchase of minerals in place
Revisions of previous estimates 3 3 10 2 18
Improved recovery
Extensions and discoveries 80 80
Production (2) (12) (14)
Sales of minerals in place (1,511) (1,511)
Reserves at December 31, 2009 14 85 1,487 2 1,588
Reserves at December 31, 2009 2,704 1,380 5,908 2,212 2,139 2,301 631 575 17,850
Developed 2,001 1,231 3,498 1,468 1,859 756 506 565 11,884
consolidated subsidiaries 2,001 1,231 3,486 1,463 1,859 539 506 565 11,650
equity-accounted entities 12 5 217 234
Undeveloped 703 149 2,410 744 280 1,545 125 10 5,966
consolidated subsidiaries 703 149 2,408 664 280 275 123 10 4,612
equity-accounted entities 2 80 1,270 2 1,354
  1. Including approximately 746 and 769 bcf of natural gas held in storage at December 31, 2008 and 2009.
  2. Proved reserves of equity-accounted entities at year end 2008 include 60% of the three former Yukos companies. From 2009, after the 51% call option excercised by Gazprom, values are reported at 29.4%.
Movements in net proved natural gas reserves (bcf)
2010 Italy(a) Rest of Europe North Africa Sub-Saharan
Africa
Kazakhstan Rest of Asia America Australia
and Oceania
Total
Consolidated subsidiaries                   
Reserves at December 31, 2009 2,704 1,380 5,894 2,127 2,139 814 629 575 16,262
of which: developed 2,001 1,231 3,486 1,463 1,859 539 506 565 11,650
undeveloped 703 149 2,408 664 280 275 123 10 4,612
Purchase of minerals in place
Revisions of previous estimates 234 48 778 161 (179) 211 41 (18) 1,276
Improved recovery
Extensions and discoveries 177 146 4 5 22 354
Production (246) (204) (609) (161) (86) (158) (145) (35) (1,644)
Sales of minerals in place (48) (2) (50)
Reserves at December 31, 2010 2,644 1,401 6,207 2,127 1,874 871 530 544 16,198
Equity-accounted entities
Reserves at December 31, 2009 14 85 1,487 2 1,588
of which: developed 12 5 217 234
undeveloped 2 80 1,270 2 1,354
Purchase of minerals in place
Revisions of previous estimates 6 (1) 44 2 51
Improved recovery
Extensions and discoveries 6 34 18 58
Production (2) (11) (13)
Sales of minerals in place
Reserves at December 31, 2010 24 118 1,520 22 1,684
Reserves at December 31, 2010 2,644 1,401 6,231 2,245 1,874 2,391 552 544 17,882
Developed 2,061 1,103 3,122 1,554 1,621 774 437 539 11,211
consolidated subsidiaries 2,061 1,103 3,100 1,550 1,621 560 431 539 10,965
equity-accounted entities 22 4 214 6 246
Undeveloped 583 298 3,109 691 253 1,617 115 5 6,671
consolidated subsidiaries 583 298 3,107 577 253 311 99 5 5,233
equity-accounted entities 2 114 1,306 16 1,438
  1. Including, approximately 769 and 767 bcf of natural gas held in storage at December 31, 2009 and 2010, respectively.
Movements in net proved natural gas reserves (bcf)
2011 Italy (a) Rest of Europe North Africa Sub-Saharan
Africa
Kazakhstan Rest of Asia America Australia
and Oceania
Total
Consolidated subsidiaries 
Reserves at December 31, 2010 2,644 1,401 6,207 2,127 1,874 871 530 544 16,198
of which: developed 2,061 1,103 3,100 1,550 1,621 560 431 539 10,965
undeveloped 583 298 3,107 577 253 311 99 5 5,233
Purchase of minerals in place 9
Revisions of previous estimates 80 199 436 (11) (142) (38) 51 96 671
Improved recovery 3 3
Extensions and discoveries 4 18 9 18 131 180
Production (246) (196) (462) (185) (84) (148) (122) (36) (1,479)
Sales of minerals in place
Reserves at December 31, 2011 2,491 1,425 6,190 1,949 1,648 685 590 604 15,582
Equity-accounted entities
Reserves at December 31, 2010 24 118 1,520 22 1,684
of which: developed 22 4 214 6 246
undeveloped 2 114 1,306 16 1,438
Purchase of minerals in place 2 2
Revisions of previous estimates (2) 147 372 11 528
Improved recovery
Extensions and discoveries 74 1,150 1,274 2,498
Production (2) (1) (9) (12)
Sales of minerals in place
Reserves at December 31, 2011 2 20 338 3,033 1,307 4,700
Reserves at December 31, 2011 2,491 1,427 6,210 2,287 1,648 3,718 1,897 604 20,282
Developed 1,977 995 3,087 1,441 1,480 552 393 491 10,416
consolidated subsidiaries 1,977 995 3,070 1,437 1,480 528 385 491 10,363
equity-accounted entities 17 4 24 8 53
Undeveloped 514 432 3,123 846 168 3,166 1,504 113 9,866
consolidated subsidiaries 514 430 3,120 512 168 157 205 113 5,219
equity-accounted entities 2 3 334 3,009 1,299 4,647
  1. Including, approximately 767 and 767 bcf of natural gas held in storage at December 31, 2010 and 2011, respectively.
Results of operations from oil and gas producing activities (a) (€ million)
2009 Italy Rest of Europe North Africa Sub-Saharan
Africa
Kazakhstan Rest of Asia America Australia
and Oceania
Total
Consolidated subsidiaries 
Revenues:
- sales to consolidated entities 2,274 2,583 1,738 4,386 245 41 808 29 12,104
- sales to third parties 540 5,037 586 739 1,208 639 181 8,930
Total revenues 2,274 3,123 6,775 4,972 984 1,249 1,447 210 21,034
Operations costs (271) (517) (553) (749) (153) (78) (273) (41) (2,635)
Production taxes (148) (20) (445) (34) (647)
Exploration expenses (40) (114) (319) (451) (20) (204) (341) (62) (1,551)
D.D. & A. and Provision for abandonment (b) (463) (921) (956) (1,502) (78) (535) (1,108) (186) (5,749)
Other income (expenses) (125) (134) (471) (467) (186) (17) 170 (47) (1,277)
Pretax income from producing activities 1,227 1,437 4,456 1,358 547 381 (105) (126) 9,175
Income taxes (467) (833) (3,010) (1,042) (180) (67) (2) 23 (5,578)
Results of operations from E&P activities
of consolidated subsidiaries(c)
760 604 1,446 316 367 314 (107) (103) 3,597
Equity-accounted entities
Revenues:
- sales to consolidated entities
- sales to third parties 15 45 49 123 232
Total revenues 15 45 49 123 232
Operations costs (11) (7) (7) (9) (34)
Production taxes (3) (41) (44)
Exploration expenses (6) (1) (8) (26) (41)
D.D. & A. and Provision for abandonment (1) (15) (35) (25) (76)
Other income (expenses) 1 6 (11) (37) (41)
Pretax income from producing activities (5) 28 (12) (15) (4)
Income taxes 4 (14) (10) (20) (40)
Results of operations from E&P activities
of equity-accounted entities(c)
(1) 14 (22) (35) (44)
  1. Results of operations from oil and gas producing activities, represent only those revenues and expenses directly associated with such activities, including operating overheads. These amounts do not include any allocation of interest expense or general corporate overhead and, therefore, are not necessarily indicative of the contributions to consolidated net earnings of Eni. Related income taxes are computed by applying the local income tax rates to the pre-tax income from producing activities. Eni is a party to certain Production Sharing Agreements (PSAs), whereby a portion of Eni’s share of oil and gas production is withheld and sold by its joint venture partners which are state-owned entities, with proceeds being remitted to the state in satisfaction of Eni’s PSA related tax liabilities. Revenue and income taxes include such taxes owed by Eni but paid by state-owned entities out of Eni’s share of oil and gas production.
  2. Includes asset impairments amounting to €576 million in 2009.
  3. The “Successful Effort Method” application would have led to an increase of result of operations of €320 million for the consolidated subsidiaries and an increase of €26 million for equity-accounted entities.
Results of operations from oil and gas producing activities  (€ million)
2010 Italy Rest of Europe North Africa Sub-Saharan
Africa
Kazakhstan Rest of Asia America Australia
and Oceania
Total
Consolidated subsidiaries 
Revenues:
- sales to consolidated entities 2,725 3,006 2,094 5,314 324 34 1,139 69 14,705
- sales to third parties 263 6,604 1,696 890 1,429 562 289 11,733
Total revenues 2,725 3,269 8,698 7,010 1,214 1,463 1,701 358 26,438
Operations costs (278) (555) (593) (902) (184) (150) (292) (69) (3,023)
Production taxes (184) (300) (700) (37) (1,221)
Exploration expenses (35) (116) (85) (465) (6) (263) (204) (25) (1,199)
D.D. & A. and Provision for abandonment(a) (621) (615) (1,063) (1,739) (84) (696) (872) (84) (5,774)
Other income (expenses) (560) 254 (392) (219) (161) (138) (45) (25) (1,286)
Pretax income from producing activities 1,047 2,237 6,265 2,985 779 179 288 155 13,935
Income taxes (382) (1,296) (4,037) (1,962) (291) (119) (154) (36) (8,277)
Results of operations from E&P activities
of consolidated subsidiaries(b)
665 941 2,228 1,023 488 60 134 119 5,658
Equity-accounted entities
Revenues:
- sales to consolidated entities
- sales to third parties 16 65 69 206 356
Total revenues 16 65 69 206 356
Operations costs (16) (9) (7) (9) (41)
Production taxes (3) (69) (72)
Exploration expenses (4) (2) (4) (35) (45)
D.D. & A. and Provision for abandonment (4) (26) (25) (17) (72)
Other income (expenses) 6 12 (10) (67) (59)
Pretax income from producing activities (5) 40 23 9 67
Income taxes 4 (20) (17) (33) (66)
Results of operations from E&P activities
of equity-accounted entities(b)
(1) 20 6 (24) 1
  1. Includes asset impairments amounting to €123 million.
  2. The “Successful Effort Method” application would have led to a decrease of €385 million for the consolidated subsidiaries and a decrease of €5 million for equity-accounted entities.
Results of operations from oil and gas producing activities (€ million)
2011 Italy Rest of Europe North Africa Sub-Saharan
Africa
Kazakhstan Rest of Asia America Australia
and Oceania
Total
Consolidated subsidiaries 
Revenues:
- sales to consolidated entities 3,583 3,695 1,956 5,945 411 178 1,634 93 17,495
- sales to third parties 514 5,090 1,937 1,268 1,233 132 344 10,518
Total revenues 3,583 4,209 7,046 7,882 1,679 1,411 1,766 437 28,013
Operations costs (284) (566) (483) (830) (171) (183) (364) (88) (2,969)
Production taxes (245) (165) (853) (37) (1,300)
Exploration expenses (38) (113) (128) (509) (6) (177) (136) (58) (1,165)
D.D. & A. and Provision for abandonment (a) (606) (704) (843) (1,435) (112) (486) (901) (103) (5,190)
Other income (expenses) (562) 142 (508) (314) (160) (151) 125 8 (1,420)
Pretax income from producing activities 1,848 2,968 4,919 3,941 1,230 377 490 196 15,969
Income taxes (761) (2,043) (3,013) (2,680) (413) (157) (184) (120) (9,371)
Results of operations from E&P activities
of consolidated subsidiaries(b)
1,087 925 1,906 1,261 817 220 306 76 6,598
Equity-accounted entities
Revenues:
- sales to consolidated entities
- sales to third parties 2 19 93 89 262 465
Total revenues 2 19 93 89 262 465
Operations costs (11) (10) (9) (17) (47)
Production taxes (1) (4) (113) (118)
Exploration expenses (6) (5) (8) (9) (28)
D.D. & A. and Provision for abandonment (1) (24) (23) (21) (69)
Other income (expenses) (4) 6 11 (20) (51) (58)
Pretax income from producing activities (9) 9 65 29 51 145
Income taxes (4) (35) (32) (4) (75)
Results of operations from E&P activities
of equity-accounted entities(b)
(9) 5 30 (3) 47 70
  1. Includes asset impairments amounting to €189 million.
  2. The “Successful Effort Method” application would have led to an increase of €118 million for the consolidated subsidiaries and an increase of €20 million for equity-accounted entities.
Capitalized costs(a) (€ million)
2010 Italy Rest of Europe North Africa Sub-Saharan
Africa
Kazakhstan Rest of Asia America Australia
and Oceania
Total
Consolidated subsidiaries 
Proved mineral interests 10,576 10,616 14,051 17,057 1,989 5,552 6,617 1,674 68,132
Unproved mineral interests 32 320 570 2,006 39 1,561 1,979 42 6,549
Support equipment and facilities 270 33 1,391 716 70 21 53 6 2,560
Incomplete wells and other 909 584 2,069 1,089 4,644 107 1,444 84 10,930
Gross capitalized costs 11,787 11,553 18,081 20,868 6,742 7,241 10,093 1,806 88,171
Accumulated depreciation, depletion and
amortization
(8,020) (7,771) (8,558) (11,067) (756) (4,699) (5,591) (522) (46,984)
Net capitalized costs consolidated
subsidiaries(b)(c)
3,767 3,782 9,523 9,801 5,986 2,542 4,502 1,284 41,187
Equity-accounted entities
Proved mineral interests 79 191 479 178 927
Unproved mineral interests 469 469
Support equipment and facilities 7 6 3 16
Incomplete wells and other 332 139 197 668
Gross capitalized costs 86 523 1,093 378 2,080
Accumulated depreciation, depletion and
amortization
(73) (103) (350) (66) (592)
Net capitalized costs equity-accounted
entities(b)(c)
13 420 743 312 1,488
2011  
Consolidated subsidiaries 
Proved mineral interests 11,356 11,481 15,519 19,539 2,523 6,136 8,976 1,889 77,419
Unproved mineral interests 31 325 582 2,893 40 1,543 1,409 204 7,027
Support equipment and facilities 285 34 1,442 923 85 41 61 13 2,884
Incomplete wells and other 956 1,778 2,755 898 5,333 136 1,029 12,885
Gross capitalized costs 12,628 13,618 20,298 24,253 7,981 7,856 11,475 2,106 100,215
Accumulated depreciation, depletion and
amortization
(8,633) (8,582) (9,750) (13,069) (906) (5,411) (6,806) (650) (53,807)
Net capitalized costs consolidated
subsidiaries(b)(c)
3,995 5,036 10,548 11,184 7,075 2,445 4,669 1,456 46,408
Equity-accounted entities
Proved mineral interests 2 80 240 698 330 1,350
Unproved mineral interests 44 271 315
Support equipment and facilities 8 6 3 17
Incomplete wells and other 2 1 1,011 185 223 1,422
Gross capitalized costs 48 89 1,251 1,160 556 3,104
Accumulated depreciation, depletion and
amortization
(2) (74) (131) (388) (89) (684)
Net capitalized costs equity-accounted
entities(b)(c)
46 15 1,120 772 467 2,420
  1. Capitalized costs represent the total expenditures for proved and unproved mineral interests and related support equipment and facilities utilized in oil and gas exploration and production activities, together with related accumulated depreciation, depletion and amortization.
  2. The amounts include net capitalized financial charges totalling €591 million in 2010 and €614 million in 2011 for the consolidated subsidiaries and €6 million in 2010 and €11 million in 2011 for equity-accounted entities.
  3. The amounts do not include costs associated with exploration activities which are capitalized in order to reflect their investment nature and amortized in full when incurred. The “Successful Effort Method” application would have led to an increase in net capitalized costs of €3,410 million in 2010 and €3,608 million in 2011 for the consolidated subsidiaries and of €76 million in 2010 and €101 million in 2011 for equity-accounted entities.
Costs incurred (a) (€ million)
2009 Italy Rest of Europe North Africa Sub-Saharan
Africa
Kazakhstan Rest of Asia America Australia
and Oceania
Total
Consolidated subsidiaries
Proved property acquisitions 298 27 11 131 467
Unproved property acquisitions 54 42 83 43 222
Exploration 40 114 317 284 20 159 242 52 1,228
Development(b) 742 727 1,401 2,121 1,086 423 858 462 7,820
Total costs incurred
consolidated subsidiaries
782 841 2,070 2,474 1,106 676 1,274 514 9,737
Equity-accounted entities
Proved property acquisitions
Unproved property acquisitions
Exploration 6 1 9 25 41
Development© 3 62 94 47 206
Total costs incurred
equity-accounted entities
9 63 103 72 247
2010
Consolidated subsidiaries
Proved property acquisitions
Unproved property acquisitions
Exploration 34 114 84 406 6 223 119 26 1,012
Development(b) 579 890 2,674 1,909 1,031 359 1,309 160 8,911
Total costs incurred
consolidated subsidiaries
613 1,004 2,758 2,315 1,037 582 1,428 186 9,923
Equity-accounted entities
Proved property acquisitions
Unproved property acquisitions
Exploration 4 2 4 35 45
Development(c) 7 200 46 114 367
Total costs incurred
equity-accounted entities
11 202 50 149 412
2011
Consolidated subsidiaries
Proved property acquisitions
Unproved property acquisitions 57 697 754
Exploration 38 100 128 482 6 156 60 240 1,210
Development(b) 815 1,921 1,487 1,698 935 385 971 70 8,282
Total costs incurred
consolidated subsidiaries
853 2,021 1,672 2,877 941 541 1,031 310 10,246
Equity-accounted entities
Proved property acquisitions
Unproved property acquisitions
Exploration 5 5 8 9 27
Development(c) 2 3 659 68 154 886
Total costs incurred
equity-accounted entities
7 3 664 76 163 913
  1. Costs incurred represent amounts both capitalized and expensed in connection with oil and gas producing activities.
  2. Includes the abandonment costs of the assets for €301 million in 2009, €269 million in 2010 and €918 million in 2011.
  3. Includes the abandonment costs of the assets for - €6 million in 2009, - €3 million in 2010 and €15 million in 2011.

www.eni.com

  • Eni S.p.a. – Registered head office
    Piazzale Enrico Mattei, 1 00144 Roma

  • Vat number
    n. 00905811006

  • Company share capital
    € 4.005.358.876,00 paid up

  • Rome Company Register
    n. 00484960588

  • Branches
    Via Emilia, 1, e Piazza Ezio Vanoni, 1
    20097 – San Donato
    Milanese (MI)