Disclaimer This presentation contains forward-looking statements regarding future events and the future results of Eni that are based on current

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1 Disclaimer This presentation contains forward-looking statements regarding future events and the future results of Eni that are based on current expectations, estimates, forecasts, and projections about the industries in which Eni operates and the beliefs and assumptions of the management of Eni. In particular, among other statements, certain statements with regard to management objectives, trends in results of operations, margins, costs, return on equity, risk management and competition are forward-looking in nature. Words such as expects, anticipates, targets, goals, projects, intends, plans, believes, seeks, estimates, variations of such words, and similar expressions are intended to identify such forward-looking statements. These forward-looking statements are only predictions and are subject to risks, uncertainties, and assumptions that are difficult to predict because they relate to events and depend on circumstances that will occur in the future. Therefore, Eni s actual results may differ materially and adversely from those expressed or implied in any forward-looking statements. Factors that might cause or contribute to such differences include, but are not limited to, economic conditions globally, the impact of competition, political and economic developments in the countries in which Eni operates, regulatory developments in Italy and internationally and changes in oil prices and in the margins for Eni products. Any forward-looking statements made by or on behalf of Eni speak only as of the date they are made. Eni does not undertake to update forward-looking statements to reflect any changes in Eni s expectations with regard thereto or any changes in events, conditions or circumstances on which any such statement is based. The reader should, however, consult any further disclosures Eni may make in documents it files with the US Securities and Exchange Commission. 1

2 G&P Business Trends Luciano Sgubini Chief Operating Officer Gas & Power Division London, 27 th February, 2004

3 Gas & Power Strategic Guidelines PRIORITIES Italy Europe! Leverage on gas demand growth respecting ceilings! Integrate commercial presence! Organic growth in power generation business! Reduce presence in regulated business! Increase market share in attractive and fast growing markets! Develop profitable projects leveraging on upstream and downstream gas integration! Developing LNG business Sustain attractive returns 3

4 2003 Results Highlights

5 G&P: 2003 achievements consistent with strategic guidelines in Natural Gas Market Billion cubic meters 78.4 Abroad Italy * * Growth in natural gas sales 14.1% * Including self consumption for 2 bcm 5

6 G&P: levers to sustain returns in 2003 Bcm Thermoelec %* 77.1 Demand growth in Italy Industry Resid.& Comm *+5.3% Normalized for weather effect +17% +1% +10% Eni natural gas sales in Italy in line with ceilings (input and final market) Final customers** Wholesalers 15.3 Cap 73% Eni 68% Cap 50% Eni 48% ** Including Italgas sales

7 Italian Liberalization Process: AVERAGE* SALES PRICE SHARES* Structural Reduction net of scenario 15% 30% % Wholesales Import 3% % 19 Companies 16.5 bcm 34 Companies * 25% Industry - 45% Residential & commercial 30% Powergen Eni Others * Source: AEEG Annual Report

8 G&P: levers to sustain returns in 2003 Bcm Eni higher sales abroad Main companies Associates Consolidated Shippers % Pro quota volume sales! GVS (50%)! Galp (33.3%)! UF Gas (50%)! Iberdrola! Tigaz! North Sea G&P! Turkey! Secondary distribution in Latin America 2002** 2003** ** Not including E&P direct sales of equity gas (for: 6 bcm in 2002 and 5 bcm in 2003) 8

9 Eni Ongoing Expansion in the Italian power market Year 2003:! One new CCGT unit in operation (0.4 GW)! Start up (first firing) of two new Gas Turbine units! POWER CAPACITY:! ELECTRICITY PRODUCTION:! ELECTRICITY SALES:! STEAM SALES: 2002 ~ 1,000 MW 5.0 TWh (2% of Italian gross production) 6.7 TWh 9,300 kt 2003 ~ 1,400 MW* 5.6 TWh (2% of Italian gross production) 8.7 TWh 9,300 kt * Additional 500 MW first firing 9

10 : Gas & Power Strategic Targets

11 Italy: increase in gas demand driven by powergeneration sector Bcm CAGR % % E 2010E Res & Comm Industry Thermoelectric 11

12 Commercial Integration Strategy: today Present diversified model Eni Gas & Power Division Activities! Gas sales! Electricity sales Company & Organization! Gas & Power Division! Italgas Più! Enipower trading! Partecipated companies Processes Network Holdings Foreign Gas Commercial Holdings Commercial activities Italgas Italgas Più Italian Gas Holdings Gas Distribution in Italy and Abroad Enipower Enipower Trading Generation Holdings Operational activities 12

13 Commercial Integration Strategy: coming future Asset Development & Management Eni Gas & Power Division Integrated business model Activities! Dual fuel offer Pipeline Integrated Companies EniPower Plants Integrated Commercial Activities Single commercial unit Commercial know-how & skills integration Synergies confirmed: NPV 200 mln ITALY & ABROAD 13

14 EniPower Ongoing Expansion in the Italian Market Capacity and production developement CAPACITY GW Ferrera Erbognone and Ravenna Brindisi and Mantova Ferrara TWh PRODUCTION Final Final market market share share from from 3% 3% in in to to 10% 10% in in

15 Europe: leveraging on upstream and downstream gas integration to sustain returns TARGET 2007 Gas availability Network! Monetizing equity gas! Competitive long term diversified supply portfolio! No territorial sales restriction clauses! Implementing new infrastructures for new markets Total supply 97 Bcm (Equity & Contracted) 23 Bcm/y (Greenstream Blustream and Damietta LNG) Markets! Developing in attractive and growing markets DOUBLE DIGIT IRR ON PROJECTS Sales in target markets 24 Bcm 15

16 European G&P Strategy confirmed: to become a major player in natural gas business European sales (bcm) Eni is free to resell gas supplied by Gazprom outside Italy according to territorial restrictions clause cancellation (EU committments) CAGR +12% * Including Libyan gas in 2007 ** Including E&P direct sales ! Target markets! Iberian peninsula! Germany! Turkey! Hungary (secondary distribution)! Shippers *! Equity ** Associates Consolidated G&P E&P 16

17 Turkey: develop supply in growing market Bcm Eni sales Target TURKEY bcm Consolidated Equity Method Consolidation of transportation activity! Gas flow in line with new build up: 1.2 bcm in 2003 GAS DEMAND GROWTH* CAGR 03/10: +6.7% ! Confirming supply of Turkish market with 16 bcm/y of gas from Russia by 2010, 8 of which are Eni s quota * Eni estimates on WoodMackenzie data 17

18 Libya: integrating upstream and downstream gas bcm Eni Target Consolidated Start up IV Q 2004 confirmed Total physical progress is 84% 8 bcm sold at the Italian border to Italian players with take or pay long term contracts (20 years) LIBYA Transportation activity fully consolidated 18

19 Developing in Large Markets: Germany and North Europe Eni Targets Achievements Germany and North Europe Eni sales Target bcm bcm , , , , Associates Consolidated! Maximize margins and sales leveraging on equity and long term supply portfolio! Strengthen GVS growth and Eni position in the German market GVS in 2003*! Sales: 7 bcm! Market share: 7.5%! Ebit: 68 million! Net Income: 38 million! In February 04 Eni started direct supply to GVS. Volumes delivered will grow from 0.4 bcm to about 1 bcm beyond 2010 * Financial year ended at 30/09/03 19

20 Expanding in Growing Market: Iberian peninsula Bcm Eni sales Target 6.7! UF Gas! Galp/GDP Galp/ GDP Union Fenosa Gas Associates Consolidated ! Iberdrola Strong growth in demand* Residential / Commercial CAGR 03/10: +7% Industry Power Generation Eni presence: 14% market share by E 2005E 2007E 2010E * Source Wood MacKenzie 20

21 Portugal: Eni future role in gas market Current GALP shareholding 1st phase Eni to acquire 33.33% of Gas de Portugal REN EDP Eni Iberdrola Gov. REN EDP Eni 18.3% 14.3% 33.34% 4.0% 30.0% 33.33% % % GALP GDP GDP Petrogal! Wholesales! Transport (HP)! Distribution 21

22 Portugal: Eni future role in gas market Current GALP shareholding 2nd phase Unbundling of domestic High Pressure Network Exit of REN REN EDP Eni Iberdrola Gov. REN EDP Eni 18.3% 14.3% 33.34% 4.0% 30.0% 100% 51% 49% GDP GALP Petrogal Regulated transport high pressure gas network New GDP! Wholesales! Distribution 22

23 LNG: Eni integrated Presence in Iberian Peninsula Under construction Reganosa Sines In operation Sagunto Reganosa bcm/y start: 1Q % Union Fenosa 21% Endesa 10% Sonatrach 50% Financial institutions & Others Sagunto bcm/y start: 3Q2005 Sines 6 bcm/y start: 4Q % GalpEnergia/GDP Projects on track 50% Union Fenosa 30% Iberdrola 20% Endesa Damietta LNG Plant-Egypt (100% UF Gas) Total capacity: 7 bcm On stream: 1Q

24 LNG Prospects Direct sales bcm Egypt Algeria Nigeria Oman Through associates Indonesia Om an Egypt Nigeria bcm Indonesia Algeria Nigeria

25 G&P: Capex profile Billion SRG Powergen Marketing Transportation abroad 2 1, ,6 1, ,2 1 0,8 0, % 26% 27% ~1.1! Snam Rete Gas deconsolidation! Powergen: maintenance capex only (< 50 million ) 0,4 0,2 43% Aver Investments: ~ mln in

26 EBIT by Activity Areas Million Transport abroad 3,373 8% 3,661 7% SRG equity method consolidation Marketing & Disribution (Italy-abroad) 56% 58% Transportation abroad 18% 19% Powergen Powergen ~1% 1% Snam Rete Gas 35% 2002* 34% 2003* 63% 2007E Marketing & distribution (Italy-Abroad) * Before non recurring items 26

27 Pre Goodwill Net Contribution from Associates Million Goodwill No goodwill amortization from 2005 according to IAS CAGR : >40% Powergen 1% % 26% 66% SRG 34% 17% 48% Marketing & distribution (Italy-Abroad) 20% 7% % 2003 Transportation abroad 2007E 27