----

**UNITEDSTATESSECURITIES AND EXCHANGE COMMISSION**Washington, D.C. 20549***————————————————————*******Form 20-F**

| (Mark One) |
|------------|

|      |   | REGISTRATION STATEMENT PURSUANT TO SECTION 12(b)        or (g) OF THE SECURITIES EXCHANGE ACT OF 1934                                                              |
|------|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| OR   |
| **** |   | **ANNUAL REPORT        PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES        EXCHANGE ACT OF 1934         For the fiscal year ended December 31, 2012**         |
| OR   |
|      |   | TRANSITION REPORT PURSUANT        TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF        1934        For the transition period from _____ to _____        |
| OR   |
|      |   | SHELL COMPANY REPORT        PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES        EXCHANGE ACT OF 1934        Date of event requiring this shell company report |

**Commission file number:1-14090*****——————————*********Eni SpA**(Exact name ofRegistrant as specified in its charter) **Republic of Italy**(Jurisdiction ofincorporation or organization) **1, piazzaleEnrico Mattei - 00144 Roma - Italy**(Address of principal executive offices)**Massimo MondazziEni SpA1, piazza Ezio Vanoni20097 San Donato Milanese (Milano) - ItalyTel +39 02 52041730 - Fax +39 02 52041765**(Name, Telephone, Email and/or Facsimile number and Addressof Company Contact Person)***————————————————————*****Securitiesregistered or to be registered pursuant to Section 12(b) of theAct.

| Title of each class                                      |    | Name of each exchange on        which registered                                                                                                                                            |
|----------------------------------------------------------|--------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| **Shares        American Depositary Shares**             |    | **New York Stock Exchange*        New York Stock Exchange**                                                                                                                                 |
| (Which represent the right to receive two        Shares) |    | * Not for        trading, but only in connection with the registration of        American Depositary Shares, pursuant to the requirements        of the Securities and Exchange Commission. |

Securities registered or to beregistered pursuant to Section 12(g) of the Act:**None**Securities for which there is a reporting obligation pursuantto Section 15(d) of the Act:**None**

Indicate the number of outstanding shares ofeach of the issuer’s classes of capital or common stock asof the close of the period covered by the annual report.                                        **Ordinary shares**                                                                                                                                                                **3,634,185,330**

| Indicate by check mark if        the registrant is a well-known seasoned issuer, as        defined in Rule 405 of the Securities Act. |
|---------------------------------------------------------------------------------------------------------------------------------------|

| Yes  |  |     |  No  |  |
|-----------|--|--------------------|----------------|--|

|          If this report is an annual or transition report,        indicate by check mark if the registrant is not required        to file reports pursuant to Section 13 or 15(d) of the        Securities Exchange Act of 1934. |
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| Yes  |  |     |  No  |  |
|-----------|--|--------------------|----------------|--|

| Note - Checking the box        above will not relieve any registrant required to file        reports pursuant to Section 13 or 15(d) of the Securities        Exchange Act of 1934 from their obligations under those        Sections.        Indicate by check mark whether the registrant (1) has        filed all reports required to be filed by Section 13 or        15(d) of the Securities Exchange Act of 1934 during the        preceding 12 months (or for such shorter period that the        registrant was required to file such reports), and (2)        has been subject to such filing requirements for the past        90 days. |
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| Yes  |  |     |  No  |  |
|-----------|--|--------------------|----------------|--|

|          Indicate by check mark whether the registrant (1) has        filed all reports required to be filed by Section 13 or        15(d) of the Securities Exchange Act of 1934 during the        preceding 12 months (or for such shorter period that the        registrant was required to file such reports), and (2)        has been subject to such filing requirements for the past        90 days. |
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| Yes  |  |     |  No  |  |
|-----------|--|--------------------|----------------|--|

|          Indicate by check mark whether the registrant have        submitted electronically and posted on their corporate        Web sites, if any, every Interactive Data File required        to be submitted and posted pursuant to Rule 405 of        Regulation S-T (§ 232.405 of this chapter) during the        preceding 12 months (or for such shorter period that the        registrant was required to submit and post such files).* |
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| Yes  |  |     |  No  |  |
|-----------|--|--------------------|----------------|--|

| * This requirement does        not apply to the registrants in respect of this filing.         Indicate by check mark if the registrant is a large        accelerated filer, an accelerated filer, or a non        accelerated filer. See definition of "accelerated        filer and large accelerated filer" in Rule 12b-2 of        the Exchange Act. (Check one): |
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| Large accelerated filer |  | Accelerated filer |  | Non-accelerated filer |  |
|-------------------------|--|-------------------|--|-----------------------|--|

|          Indicate by check mark which basis of accounting the        registrant has used to prepare the financial statements        included in this filing: |
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| U.S. GAAP |  | International Financial        Reporting Standards as issued by the International        Accounting Standards Board |  | Other |  |
|-----------|--|---------------------------------------------------------------------------------------------------------------------|--|-------|--|

|          If "Other" has been checked in response to the        previous question, indicate by check mark which financial        statement item the registrant has elected to follow. |
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| Item        17 |  |     |  Item        18 |  |
|----------------|--|--------------------|----------------------|--|

|          If this is an annual report, indicate by check mark        whether the registrant is a shell company (as defined in        Rule 12b-2 of the Exchange Act). |
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| Yes  |  |     |  No  |  |
|-----------|--|--------------------|----------------|--|

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##### **TABLE OF CONTENTS**

|                                            | I | **Page** |
|-------------------------------------------------|---|----------|
| Certain defined terms                           | I | ii       |
| Presentation of financial and other information | I | ii       |
| Statements regarding competitive position       | I | ii       |
| Glossary                                        | I | iii      |
| Abbreviations and conversion table              | I | vi       |

| II | I | I | III | I |
|----|---|---|-----|---|

| **PART I**    | I |                                                                                                                                                       | I |   |
|---------------|---|------------------------------------------------------------------------------------------------------------------------------------------------------------|---|--------|
| Item 1.       | I | IDENTITY OF        DIRECTORS, SENIOR MANAGEMENT AND ADVISORS                                                                                               | I | 1      |
| Item 2.       | I | OFFER        STATISTICS AND EXPECTED TIMETABLE                                                                                                             | I | 1      |
| Item 3.       | I | KEY        INFORMATION                                                                                                                                     | I | 1      |
| I             | I | Selected        financial information                                                                                                                      | I | 1      |
| I             | I | Selected        operating information                                                                                                                      | I | 4      |
| I             | I | Exchange        rates                                                                                                                                      | I | 5      |
| I             | I | Risk factors                                                                                                                                               | I | 6      |
| Item 4.       | I | INFORMATION        ON THE COMPANY                                                                                                                          | I | 28     |
| I             | I | History and        development of the Company                                                                                                              | I | 28     |
| I             | I | Business        overview                                                                                                                                   | I | 32     |
| I             | I | Exploration        & Production                                                                                                                        | I | 32     |
| I             | I | Gas &        Power                                                                                                                                     | I | 62     |
| I             | I | Refining        & Marketing                                                                                                                            | I | 73     |
| I             | I | Engineering        & Construction                                                                                                                      | I | 79     |
| I             | I | Chemicals                                                                                                                                                  | I | 82     |
| I             | I | Corporate and        Other activities                                                                                                                      | I | 84     |
| I             | I | Research and        development                                                                                                                            | I | 85     |
| I             | I | Insurance                                                                                                                                                  | I | 87     |
| I             | I | Environmental        matters                                                                                                                               | I | 87     |
| I             | I | Regulation of        Eni’s businesses                                                                                                                 | I | 95     |
| I             | I | Property,        plant and equipment                                                                                                                       | I | 101    |
| I             | I | Organizational        structure                                                                                                                            | I | 101    |
| Item 4A.      | I | UNRESOLVED        STAFF COMMENTS                                                                                                                           | I | 101    |
| Item 5.       | I | OPERATING AND        FINANCIAL REVIEW AND PROSPECTS                                                                                                        | I | 102    |
| I             | I | Executive        summary                                                                                                                                   | I | 102    |
| I             | I | Critical        accounting estimates                                                                                                                       | I | 104    |
| I             | I | 2010-2012        Group results of operations                                                                                                               | I | 107    |
| I             | I | Liquidity and        capital resources                                                                                                                     | I | 121    |
| I             | I | Recent        developments                                                                                                                                 | I | 128    |
| I             | I | Management's        expectations of operations                                                                                                             | I | 128    |
| Item 6.       | I | DIRECTORS,        SENIOR MANAGEMENT AND EMPLOYEES                                                                                                          | I | 137    |
| I             | I | Directors and        Senior Management                                                                                                                     | I | 137    |
| I             | I | Compensation                                                                                                                                               | I | 144    |
| I             | I | Board        practices                                                                                                                                     | I | 154    |
| I             | I | Employees                                                                                                                                                  | I | 161    |
| I             | I | Share        ownership                                                                                                                                     | I | 164    |
| Item 7.       | I | MAJOR        SHAREHOLDERS AND RELATED PARTY TRANSACTIONS                                                                                                   | I | 165    |
| I             | I | Major        Shareholders                                                                                                                                  | I | 165    |
| I             | I | Related party        transactions                                                                                                                          | I | 165    |
| Item 8.       | I | FINANCIAL        INFORMATION                                                                                                                               | I | 166    |
| I             | I | Consolidated        Statements and other financial information                                                                                             | I | 166    |
| I             | I | Significant        changes                                                                                                                                 | I | 166    |
| Item 9.       | I | THE OFFER AND        THE LISTING                                                                                                                           | I | 167    |
| I             | I | Offer and        listing details                                                                                                                           | I | 167    |
| I             | I | Markets                                                                                                                                                    | I | 168    |
| Item 10.      | I | ADDITIONAL        INFORMATION                                                                                                                              | I | 170    |
| I             | I | Memorandum        and Articles of Association                                                                                                              | I | 170    |
| I             | I | Material        contracts                                                                                                                                  | I | 176    |
| I             | I | Exchange        controls                                                                                                                                   | I | 176    |
| I             | I | Taxation                                                                                                                                                   | I | 177    |
| I             | I | Documents on        display                                                                                                                                | I | 181    |
| Item 11.      | I | QUANTITATIVE        AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK                                                                                          | I | 182    |
| Item 12.      | I | DESCRIPTION        OF SECURITIES OTHER THAN EQUITY SECURITIES                                                                                              | I | 183    |
| 12A.          | I | Debt        securities                                                                                                                                     | I | 183    |
| 12B.          | I | Warrants and        rights                                                                                                                                 | I | 183    |
| 12C.          | I | Other        securities                                                                                                                                    | I | 183    |
| 12D.          | I | American        Depositary Shares                                                                                                                          | I | 183    |
| II            | I | I                                                                                                                                                          | I | I      |
| **PART II**   | I | I                                                                                                                                                          | I | I      |
| Item 13.      | I | DEFAULTS,        DIVIDEND ARREARAGES AND DELINQUENCIES                                                                                                     | I | 185    |
| Item 14.      | I | MATERIAL        MODIFICATIONS TO THE RIGHTS OF SECURITY HOLDERS AND USE        OF PROCEEDS                                                                 | I | 185    |
| Item 15.      | I | CONTROLS AND        PROCEDURES                                                                                                                             | I | 185    |
| Item 16.      | I | I                                                                                                                                                          | I | II     |
| 16A.          | I | Board of        Statutory Auditors financial expert                                                                                                        | I | 186    |
| 16B.          | I | Code of        Ethics                                                                                                                                      | I | 186    |
| 16C.          | I | Principal        accountant fees and services                                                                                                              | I | 186    |
| 16D.          | I | Exemptions        from the Listing Standards for Audit Committees                                                                                          | I | 187    |
| 16E.          | I | Purchases of        equity securities by the issuer and affiliated purchasers                                                                              | I | 187    |
| 16F.          | I | Change in        Registrant’s Certifying Accountant                                                                                                   | I | 188    |
| 16G.          | I | Significant        Differences in Corporate Governance practices as per        Section 303A.11 of the New York Stock Exchange Listed        Company Manual | I | 188    |
| 16H.          | I | Mine safety        disclosure                                                                                                                              | I | 190    |
| **PART III**I | I | I                                                                                                                                                          | I | II     |
| Item 17.      | I | FINANCIAL        STATEMENTS                                                                                                                                | I | 191    |
| Item 18.      | I | FINANCIAL        STATEMENTS                                                                                                                                | I | 191    |
| Item 19.      | I | EXHIBITS                                                                                                                                                   | I | 191    |

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##### Table of Contents

*Certain disclosures contained herein including, withoutlimitation, information appearing in "Item 4 –Information on the Company", and in particular "Item 4– Exploration & Production", "Item 5 –Operating and Financial Review and Prospects" and "Item11 – Quantitative and Qualitative Disclosures about MarketRisk" contain forward-looking statements regarding futureevents and the future results of Eni that are based on currentexpectations, estimates, forecasts, and projections about theindustries in which Eni operates and the beliefs and assumptionsof the management of Eni. Eni may also make forward-lookingstatements in other written materials, including other documentsfiled with or furnished to the U.S. Securities and ExchangeCommission (the "SEC"). In addition, Eni’s seniormanagement may make forward-looking statements orally toanalysts, investors, representatives of the media and others. Inparticular, among other statements, certain statements withregard to management objectives, trends in results of operations,margins, costs, return on capital, risk management andcompetition are forward looking in nature. Words such as‘expects’, ‘anticipates’,‘targets’, ‘goals’, ‘projects’,‘intends’, ‘plans’, ‘believes’,‘seeks’, ‘estimates’, variations of suchwords, and similar expressions are intended to identify suchforward-looking statements. These forward-looking statements areonly predictions and are subject to risks, uncertainties, andassumptions that are difficult to predict because they relate toevents and depend on circumstances that will occur in the future.Therefore, Eni’s actual results may differ materially andadversely from those expressed or implied in any forward-lookingstatements. Factors that might cause or contribute to suchdifferences include, but are not limited to, those discussed inthis Annual Report on Form 20-F under the section entitled"Risk Factors" and elsewhere. Any forward-lookingstatements made by or on behalf of Eni speak only as of the datethey are made. Eni does not undertake to update forward-lookingstatements to reflect any changes in Eni’s expectations withregard thereto or any changes in events, conditions orcircumstances on which any such statement is based. The readershould, however, consult any further disclosures Eni may make indocuments it files with the SEC.*

 

**CERTAIN DEFINED TERMS**

In this Form 20-F, the terms "Eni", the"Group", or the "Company" refer to the parentcompany Eni SpA and its consolidated subsidiaries and, unless thecontext otherwise requires, their respective predecessorcompanies. All references to "Italy" or the"State" are references to the Republic of Italy, allreferences to the "Government" are references to thegovernment of the Republic of Italy. For definitions of certainoil and gas terms used herein and certain conversions, see"Glossary" and "Conversion Table".

 

**PRESENTATION OF FINANCIAL AND OTHERINFORMATION**

The Consolidated Financial Statements of Eni, included in thisannual report, have been prepared in accordance with IFRS issuedby the International Accounting Standards Board (IASB).

Unless otherwise indicated, any reference herein to"Consolidated Financial Statements" is to theConsolidated Financial Statements of Eni (including the Notesthereto) included herein.

Unless otherwise specified or the context otherwise requires,references herein to "dollars", "$","U.S. dollars" and "U.S. $" are to thecurrency of the United States, and references to "euro"and "€" are to the currency of the EuropeanMonetary Union.

Unless otherwise specified or the context otherwise requires,references herein to "division" and "segment"are to Eni’s business activities: Exploration &Production, Gas & Power, Refining & Marketing,Engineering & Construction, Petrochemicals and otheractivities.

 

**STATEMENTS REGARDING COMPETITIVE POSITION**

Statements made in "Item 4 – Information on theCompany" referring to Eni’s competitive position arebased on the Company’s belief, and in some cases rely on arange of sources, including investment analysts’ reports,independent market studies and Eni’s internal assessment ofmarket share based on publicly available information about thefinancial results and performance of market participants. Marketshare estimates contained in this document are based onmanagement estimates unless otherwise indicated.

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##### Table of Contents

****GLOSSARY****

A glossary of oil and gas terms is available on Eni’s webpage at the address eni.com. Below is a selection of the mostfrequently used terms.

| ***Financial        terms***                      |               |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |
|---------------------------------------------------|--------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|                                    |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |
| *Leverage*                                        |               | A non-GAAP measure of the        Company’s financial condition, calculated as the        ratio between net borrowings and shareholders’        equity, including minority interest. For a discussion of        management’s view of the usefulness of this measure        and its reconciliation with the most directly comparable        GAAP measure which in the case of the Company refers to        IFRS, see "Item 5 – Financial Condition".                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |
|                                    |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |
| *Net borrowings*                                  |               | Eni evaluates its financial        condition by reference to "net borrowings",        which is a non-GAAP measure. Eni calculates net        borrowings as total finance debt less: cash, cash        equivalents and certain very liquid investments not        related to operations, including among others        non-operating financing receivables and securities not        related to operations. Non-operating financing        receivables consist of amounts due to Eni’s        financing subsidiaries from banks and other financing        institutions and amounts due to other subsidiaries from        banks for investing purposes and deposits in escrow.        Securities not related to operations consist primarily of        government and corporate securities. For a discussion of        management’s view of the usefulness of this measure        and its reconciliation with the most directly comparable        GAAP measure which in the case of the Company refers to        IFRS, see "Item 5 – Financial Condition". |
|                                    |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |
| *TSR        (Total Shareholder Return)*           |               | Management uses this measure        to asses the total return of the Eni share. It is        calculated on a yearly basis, keeping account of changes        in prices (beginning and end of year) and dividends        distributed and reinvested at the ex-dividend date.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |
|                                    |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |
| ***Business        terms***                       |               |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |
|                                    |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |
| *AEEG (Authority for        Electricity and Gas)* |               | The Regulatory Authority for        Electricity and Gas is the Italian independent body which        regulates, controls and monitors the electricity and gas        sectors and markets in Italy. The Authority’s role        and purpose is to protect the interests of users and        consumers, promote competition and ensure efficient,        cost-effective and profitable nationwide services with        satisfactory quality levels.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |
|                                    |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |
| *Associated gas*                                  |               | Associated gas is a natural        gas found in contact with or dissolved in crude oil in        the reservoir. It can be further categorized as Gas-Cap        Gas or Solution Gas.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |
|                                    |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |
| *Average reserve life        index*               |               | Ratio between the amount of        reserves at the end of the year and total production for        the year.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |
|                                    |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |
| *Barrel/BBL*                                      |               | Volume unit corresponding to        159 liters. A barrel of oil corresponds to about 0.137        metric tons.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |
|                                    |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |
| *BOE*                                             |               | Barrel of Oil Equivalent. It        is used as a standard unit measure for oil and natural        gas. The latter is converted from standard cubic meters        into barrels of oil equivalent using a certain        coefficient (see "Conversion Table").                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |
|                                    |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |
| *Concession contracts*                            |               | Contracts currently applied        mainly in Western countries regulating relationships        between states and oil companies with regards to        hydrocarbon exploration and production. The company        holding the mining concession has an exclusive on        exploration, development and production activities and        for this reason it acquires a right to hydrocarbons        extracted against the payment of royalties on production        and taxes on oil revenues to the state.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |
|                                    |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |
| *Condensates*                                     |               | Condensates is a mixture of        hydrocarbons that exists in the gaseous phase at original        reservoir temperature and pressure, but that, when        produced, is in the liquid phase at surface pressure and        temperature.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |
|                                    |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |
| *Conversion capacity*                             |               | Maximum amount of feedstock        that can be processed in certain dedicated facilities of        a refinery to obtain finished products. Conversion        facilities include catalytic crackers, hydrocrackers,        visbreaking units, and coking units. Balanced conversion        capacity of a refinery is a measure of a refinery        capacity to process raw materials averaging both capacity        at topping and capacity at conversion plants that        normally have smaller capacity.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |
|                                    |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |
| *Conversion index*                                |               | Ratio of capacity of        conversion facilities to primary distillation capacity.        The higher the ratio, the higher is the capacity of a        refinery to obtain high value products from the heavy        residue of primary distillation.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |

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##### Table of Contents

| *Deep waters*                                           |               | Waters deeper than 200        meters.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |
|---------------------------------------------------------|--------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|                                          |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |
| *Development*                                           |               | Drilling and other        post-exploration activities aimed at the production of        oil and gas.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |
|                                          |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |
| *Enhanced recovery*                                     |               | Techniques used to increase        or stretch over time the production of wells.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |
|                                          |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |
| *EPC*                                                   |               | Engineering, Procurement and        Construction.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |
|                                          |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |
| *EPIC*                                                  |               | Engineering, Procurement,        Installation and Construction.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |
|                                          |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |
| *Exploration*                                           |               | Oil and natural gas        exploration that includes land surveys, geological and        geophysical studies, seismic data gathering and analysis        and well drilling.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |
|                                          |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |
| *FPSO*                                                  |               | Floating Production Storage        and Offloading System.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |
|                                          |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |
| *FSO*                                                   |               | Floating Storage and        Offloading System.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |
|                                          |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |
| *Infilling wells*                                       |               | Infilling wells are wells        drilled in a producing area in order to improve the        recovery of hydrocarbons from the field and to maintain        and/or increase production levels.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |
|                                          |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |
| *LNG*                                                   |               | Liquefied Natural Gas        obtained through the cooling of natural gas to minus 160        °C at normal pressure. The gas is liquefied to allow        transportation from the place of extraction to the sites        at which it is transformed back into its natural gaseous        state and consumed. One tonne of LNG corresponds to 1,400        cubic meters of gas.                                                                                                                                                                                                                                                                                                          |
|                                          |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |
| *LPG*                                                   |               | Liquefied Petroleum Gas, a        mix of light petroleum fractions, gaseous at normal        pressure and easily liquefied at room temperature through        limited compression.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |
|                                          |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |
| *Margin*                                                |               | The difference between the        average selling price and direct acquisition cost of a        finished product or raw material excluding other        production costs (e.g. refining margin, margin on        distribution of natural gas and petroleum products or        margin of petrochemical products). Margin trends reflect        the trading environment and are, to a certain extent, a        gauge of industry profitability.                                                                                                                                                                                                                                                |
|                                          |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |
| *Mineral Potential*                                     |               | (Potentially        recoverable hydrocarbon volumes) Estimated recoverable        volumes which cannot be defined as reserves due to a        number of reasons, such as the temporary lack of viable        markets, a possible commercial recovery dependent on the        development of new technologies, or for their location in        accumulations yet to be developed or where evaluation of        known accumulations is still at an early stage.                                                                                                                                                                                                                                |
|                                          |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |
| *Mineral Storage*                                       |               | According to Legislative        Decree No. 164/2000, these are volumes required for        allowing optimal operation of natural gas fields in Italy        for technical and economic reasons. The purpose is to        ensure production flexibility as required by long-term        purchase contracts as well as to cover technical risks        associated with production.                                                                                                                                                                                                                                                                                                             |
|                                          |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |
| *Modulation Storage*                                    |               | According to Legislative        Decree No. 164/2000, these are volumes required for        meeting hourly, daily and seasonal swings in demand.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |
|                                          |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |
| *Natural gas liquids (NGL)*                             |               | Liquid or liquefied        hydrocarbons recovered from natural gas through        separation equipment or natural gas treatment plants.        Propane, normal-butane and isobutane, isopentane and        pentane plus, that were previously defined as natural        gasoline, are natural gas liquids.                                                                                                                                                                                                                                                                                                                                                                                   |
|                                          |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |
| *Network Code*                                          |               | A code containing norms and        regulations for access to, management and operation of        natural gas pipelines.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |
|                                          |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |
| *Over/Under lifting*                                    |               | Agreements stipulated        between partners which regulate the right of each to its        share in the production for a set period of time. Amounts        lifted by a partner different from the agreed amounts        determine temporary Over/Under lifting situations.                                                                                                                                                                                                                                                                                                                                                                                                                |
|                                          |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |
| *Possible reserves*                                     |               | Possible reserves are those        additional reserves that are less certain to be recovered        than probable reserves.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |
|                                          |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |
| *Probable reserves*                                     |               | Probable reserves are those        additional reserves that are less certain to be recovered        than proved reserves but which, together with proved        reserves, are as likely as not to be recovered.                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |
|                                          |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |
| *Primary balanced refining        capacity*             |               | Maximum amount of feedstock        that can be processed in a refinery to obtain finished        products measured in BBL/d.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |
|                                          |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |
| *Production Sharing        Agreement ("PSA")* |               | Contract in use in African,        Middle Eastern, Far Eastern and Latin American countries,        among others, regulating relationships between states and        oil companies with regard to the exploration and        production of hydrocarbons. The mineral right is awarded        to the national oil company jointly with the foreign oil        company that has an exclusive right to perform        exploration, development and production activities and        can enter into agreements with other local or        international entities. In this type of contract the        national oil company assigns to the international        contractor the task of performing |

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|                        |               | exploration and production        with the contractor’s equipment and financial        resources. Exploration risks are borne by the contractor        and production is divided into two portions: "cost        oil" is used to recover costs borne by the        contractor and "profit oil" is divided between        the contractor and the national company according to        variable schemes and represents the profit deriving from        exploration and production. Further terms and conditions        of these contracts may vary from country to country.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |
|-----------------------------|--------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|              |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |
| *Proved reserves*           |               | 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 unweighted 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. Reserves are classified as either        developed and undeveloped. Proved 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, and through installed extraction        equipment and infrastructure operational at the time of        the reserves estimate if the extraction is by means not        involving a well. Proved 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. |
|              |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |
| *Reserves*                  |               | Reserves are estimated        remaining quantities of oil and gas and related        substances anticipated to be economically producible, as        of a given date, by application of development projects        to known accumulations. In addition, there must exist, or        there must be a reasonable expectation that there will        exist, the legal right to produce or a revenue interest        in the production, installed means of delivering oil and        gas or related substances to market, and all permits and        financing required to implement the project.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |
|              |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |
| *Reserve life index*        |               | Ratio between the amount of        proved reserves at the end of the year and total        production for the year.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |
|              |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |
| *Reserve replacement ratio* |               | Measure of the reserves        produced replaced by proved reserves. Indicates the        company’s ability to add new reserves through        exploration and purchase of property. A rate higher than        100% indicates that more reserves were added than        produced in the period. The ratio should be averaged on a        three-year period in order to reduce the distortion        deriving from the purchase of proved property, the        revision of previous estimates, enhanced recovery,        improvement in recovery rates and changes in the amount        of reserves – in PSAs – due to changes in        international oil prices.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |
|              |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |
| *Ship-or-pay*               |               | Clause included in natural        gas transportation contracts according to which the        customer is requested to pay for the transportation of        gas whether or not the gas is actually transported.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |
|              |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |
| *Strategic Storage*         |               | According to Legislative        Decree No. 164/2000, these are volumes required for        covering lack or reduction of supplies from        extra-European sources or crises in the natural gas        system.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |
|              |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |
| *Take-or-pay*               |               | Clause included in natural        gas supply contracts according to which the purchaser is        bound to pay the contractual price or a fraction of such        price for a minimum quantity of gas set in the contract        whether or not the gas is collected by the purchaser. The        purchaser has the option of collecting the gas paid for        and not delivered at a price equal to the residual        fraction of the price set in the contract in subsequent        contract years.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |
|              |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |
| *Upstream/Downstream*       |               | The term upstream refers to        all hydrocarbon exploration and production activities.        The term downstream includes all activities inherent to        the oil and gas sector that are downstream of exploration        and production activities.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |

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**ABBREVIATIONS**

| mmCF               | =                  | million cubic feet                       |               | ktonnes            | =                  | thousand tonnes                                   |
|--------------------|--------------------|------------------------------------------|--------------------|--------------------|--------------------|---------------------------------------------------|
|     |     |                           |     |     |     |                                    |
| BCF                | =                  | billion cubic feet                       |               | mmtonnes           | =                  | million tonnes                                    |
|     |     |                           |     |     |     |                                    |
| mmCM               | =                  | million cubic meters                     |               | MW                 | =                  | megawatt                                          |
|     |     |                           |     |     |     |                                    |
| BCM                | =                  | billion cubic meters                     |               | GWh                | =                  | gigawatthour                                      |
|     |     |                           |     |     |     |                                    |
| BOE                | =                  | barrel of oil equivalent                 |               | TWh                | =                  | terawatthour                                      |
|     |     |                           |     |     |     |                                    |
| kBOE               | =                  | thousand barrel of oil        equivalent |               | /d                 | =                  | per day                                           |
|     |     |                           |     |     |     |                                    |
| mmBOE              | =                  | million barrel of oil        equivalent  |               | /y                 | =                  | per year                                          |
|     |     |                           |     |     |     |                                    |
| BBOE               | =                  | billion barrel of oil        equivalent  |               | E&P            | =                  | the Exploration &        Production segment   |
|     |     |                           |     |     |     |                                    |
| BBL                | =                  | barrels                                  |               | G&P            | =                  | the Gas & Power segment                       |
|     |     |                           |     |     |     |                                    |
| kBBL               | =                  | thousand barrels                         |               | R&M            | =                  | the Refining & Marketing        segment       |
|     |     |                           |     |     |     |                                    |
| mmBBL              | =                  | million barrels                          |               | E&C            | =                  | the Engineering &        Construction segment |
|     |     |                           |     |     |     |                                    |
| BBBL               | =                  | billion barrels                          |               |               |               |                                              |

 

**CONVERSION TABLE**

| 1 acre                               | =                  | 0.405 hectares                                         |               |                                                                                  |
|--------------------------------------|--------------------|--------------------------------------------------------|--------------------|---------------------------------------------------------------------------------------|
|                       |     |                                         |     |                                                                        |
| 1 barrel                             | =                  | 42 U.S. gallons                                        |               |                                                                                  |
|                       |     |                                         |     |                                                                        |
| 1 BOE                                | =                  | 1 barrel of crude oil                                  | =                  | 5,492 cubic feet of natural        gas*                                               |
|                       |     |                                         |     |                                                                        |
| 1 barrel of crude oil per        day | =                  | approximately 50 tonnes of        crude oil per year   |               |                                                                                  |
|                       |     |                                         |     |                                                                        |
| 1 cubic meter of natural gas         | =                  | 35.3147 cubic feet of        natural gas               |               |                                                                                  |
|                       |     |                                         |     |                                                                        |
| 1 cubic meter of natural gas         | =                  | approximately 0.00643        barrels of oil equivalent |               |                                                                                  |
|                       |     |                                         |     |                                                                        |
| 1 kilometer                          | =                  | approximately 0.62 miles                               |               |                                                                                  |
|                       |     |                                         |     |                                                                        |
| 1 short ton                          | =                  | 0.907 tonnes                                           | =                  | 2,000 pounds                                                                          |
|                       |     |                                         |     |                                                                        |
| 1 long ton                           | =                  | 1.016 tonnes                                           | =                  | 2,240 pounds                                                                          |
|                       |     |                                         |     |                                                                        |
| 1 tonne                              | =                  | 1 metric ton                                           | =                  | 1,000 kilograms                                                                       |
|                                 |               |                                                   | =                  | approximately 2,205 pounds                                                            |
|                       |     |                                         |     |                                                                        |
| 1 tonne of crude oil                 | =                  | 1 metric ton of crude oil                              | =                  | approximately 7.3 barrels of        crude oil (assuming an API gravity of 34 degrees) |

 

----

| (*) |   | In presenting        data on production volumes and reserves for total        hydrocarbons, natural gas volumes have been converted to        oil-equivalent barrels on the basis of a certain        equivalency. From July 1, 2012, as part of an ongoing        review of the yields at the Company’s gas fields        currently in production, Eni has updated the conversion        rate of gas to 5,492 cubic feet of gas equals 1 barrel of        oil (it was 5,550 cubic feet of gas per barrel in        previous reporting periods). The effect of this update on        production expressed in BOE was 9 kBOE/d for the full        year 2012 and the change in the initial reserves balance        as of January 1, 2012 amounted to 40 mmBOE. Prior-year        converted amounts were left unchanged. Other per-BOE        indicators were only marginally affected by the update        (e.g. realization prices, costs per BOE) and also        negligible was the impact on depreciation and depletion        charges. Other oil companies may use different conversion        rates. |
|-----|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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**PART I**

**Item 1. IDENTITY OF DIRECTORS, SENIORMANAGEMENT AND ADVISORS**NOT APPLICABLE

 

**Item 2. OFFER STATISTICS AND EXPECTEDTIMETABLE**NOT APPLICABLE

 

**Item 3. KEY INFORMATION**

**Selected financial information**

The Consolidated Financial Statements of Eni have beenprepared in accordance with IFRS issued by the InternationalAccounting Standards Board (IASB). The tables below present Eniselected historical financial data prepared in accordance withIFRS as of and for the years ended December 31, 2008, 2009, 2010,2011 and 2012. In accordance with the guidelines of IFRS 5,results of Snam SpA and its subsidiaries (Snam) which manage theItalian regulated businesses of gas infrastructures have beenreported as discontinued operations due to Eni’s plan todivest the business. Eni lost control over the entity in October2012 as part of a transaction to divest 30% interestless one share in Snam to an Italian entity, Cassa Depositi ePrestiti which is a related party of Eni as both entities areunder the common control of the Italian Ministry for Economy andFinance. The divestment took place in accordance to Law No. 27 ofMarch 24, 2012 which mandated the ownership unbundling of Snamfrom Eni. Prior year data have been reclassified in accordancewith guidelines of IFRS 5. The residual interest of Eni in Snamequal to 20.2% of the share capital of the investee as of thebalance sheet date was accounted as a financial asset because Eni is forbidden from exercising theunderlying voting rights by applicable laws and therefore cannotinfluence the financial and operating policy decisions of theinvestee. Furthermore, under applicable rules, Eni is mandated todivest any residual interest in the entity. See Item 5 and Item 7– Related party transactions for more information on thetransaction.

The selected historical financial data presented herein arederived from Eni’s Consolidated Financial Statementsincluded in Item 18.

All such data should be read in connection with theConsolidated Financial Statements and the related notes theretoincluded in Item 18.

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##### Table of Contents

|   | **Year ended December 31,** |
|--------|-----------------------------|
|   |                             |

|   | **2008** |   | **2009** |   | **2010** |   | **2011** |   | **2012** |
|--------|----------|--------|----------|--------|----------|--------|----------|--------|----------|
|   |          |   |          |   |          |   |          |   |          |

|   | **(euro        million except data per share and per ADR)** |
|--------|-------------------------------------------------------------|

| **CONSOLIDATED PROFIT STATEMENT DATA**                                                                                                     |   |    |   |   |   |   |   |   |   |   |    |   |   |    |   |
|--------------------------------------------------------------------------------------------------------------------------------------------|--------|---------|--------|--------|--------|--------|--------|--------|--------|--------|---------|--------|--------|---------|--------|
| Net sales        from continuing operations                                                                                                |   | 106,978 |   |   | 81,932 |   |   | 96,617 |   |   | 107,690 |   |   | 127,220 |   |
| Operating profit by segment from continuing        operations                                                                              |   |    |   |   |   |   |   |   |   |   |    |   |   |    |   |
|      Exploration        & Production                                                                          |   | 16,239  |   |   | 9,120  |   |   | 13,866 |   |   | 15,887  |   |   | 18,451  |   |
|      Gas & Power (1)                                                                                          |   | 2,330   |   |   | 1,914  |   |   | 896    |   |   | (326    | )      |   | (3,221  | )      |
|      Refining        & Marketing                                                                              |   | (988    | )      |   | (102   | )      |   | 149    |   |   | (273    | )      |   | (1,303  | )      |
|      Chemicals                                                                                                    |   | (845    | )      |   | (675   | )      |   | (86    | )      |   | (424    | )      |   | (683    | )      |
|      Engineering        & Construction                                                                        |   | 1,045   |   |   | 881    |   |   | 1,302  |   |   | 1,422   |   |   | 1,433   |   |
|      Other activities                                                                                             |   | (466    | )      |   | (436   | )      |   | (1,384 | )      |   | (427    | )      |   | (302    | )      |
|      Corporate        and financial companies                                                                     |   | (623    | )      |   | (420   | )      |   | (361   | )      |   | (319    | )      |   | (345    | )      |
|      Impact of        unrealized intragroup profit elimination and other        consolidation adjustments (2) (3) |   | 1,690   |   |   | 1,513  |   |   | 1,100  |   |   | 1,263   |   |   | 996     |   |
| Operating        profit from continuing operations                                                                                         |   | 18,382  |   |   | 11,795 |   |   | 15,482 |   |   | 16,803  |   |   | 15,026  |   |
| Net profit attributable to Eni from continuing        operations                                                                           |   | 8,996   |   |   | 4,488  |   |   | 6,252  |   |   | 6,902   |   |   | 4,198   |   |
| Net profit        (loss) attributable to Eni from discontinued operations        (4)                                                       |   | (171    | )      |   | (121   | )      |   | 66     |   |   | (42     | )      |   | 3,590   |   |
| Net profit attributable to Eni                                                                                                             |   | 8,825   |   |   | 4,367  |   |   | 6,318  |   |   | 6,860   |   |   | 7,788   |   |
| **Data        per ordinary share**(euro)(5)                                                                                                |   |    |   |   |   |   |   |   |   |   |    |   |   |    |   |
| Operating profit:                                                                                                                          |   |    |   |   |   |   |   |   |   |   |    |   |   |    |   |
| - basic                                                                                                                                    |   | 5.05    |   |   | 3.26   |   |   | 4.27   |   |   | 4.64    |   |   | 4.15    |   |
| - diluted                                                                                                                                  |   | 5.05    |   |   | 3.26   |   |   | 4.27   |   |   | 4.64    |   |   | 4.15    |   |
| Net profit        attributable to Eni basic and diluted from continuing        operations                                                  |   | 2.47    |   |   | 1.24   |   |   | 1.72   |   |   | 1.90    |   |   | 1.16    |   |
| Net profit (loss) attributable to Eni basic and        diluted from discontinued operations                                                |   | (0.05   | )      |   | (0.03  | )      |   | 0.02   |   |   | (0.01   | )      |   | 0.99    |   |
| Net profit        attributable to Eni basic and diluted                                                                                    |   | 2.43    |   |   | 1.21   |   |   | 1.74   |   |   | 1.89    |   |   | 2.15    |   |
| **Data per ADR**($)(5) (6)                                                                                                                 |   |    |   |   |   |   |   |   |   |   |    |   |   |    |   |
| Operating        profit:                                                                                                                   |   |    |   |   |   |   |   |   |   |   |    |   |   |    |   |
| - basic                                                                                                                                    |   | 14.86   |   |   | 9.08   |   |   | 11.33  |   |   | 12.92   |   |   | 10.67   |   |
| - diluted                                                                                                                                  |   | 14.86   |   |   | 9.08   |   |   | 11.33  |   |   | 12.92   |   |   | 10.67   |   |
| Net profit attributable to Eni basic and diluted        from continuing operations                                                         |   | 7.27    |   |   | 3.45   |   |   | 4.59   |   |   | 5.32    |   |   | 2.98    |   |
| Net profit        (loss) attributable to Eni basic and diluted from        discontinued operations                                         |   | (0.15   | )      |   | (0.08  | )      |   | 0.05   |   |   | (0.03   | )      |   | 2.54    |   |
| Net profit attributable to Eni basic and diluted                                                                                           |   | 7.14    |   |   | 3.36   |   |   | 4.62   |   |   | 5.26    |   |   | 5.53    |   |
|                                                                                                                                       |   |         |        |   |        |        |   |        |        |   |         |        |   |         |        |

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| (1) |         | Following the        divestment of a significant stake in Snam and its        deconsolidation closed in 2012, results of the G&P        business segment include Marketing and International        transport activities. To allow a homogeneous comparison,        the presentation of prior year data has been modified        accordingly.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |
|-----|--------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| (2) |    | 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.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |
| (3) |         | In the        circumstances of discontinued operations, the        International Financial Reporting Standards require that        the profits earned by continuing and discontinued        operations are those deriving from transactions external        to the Group. Therefore, profits earned by the        discontinued operations, in this case Snam operations, on        sales to the continuing operations are eliminated on        consolidation from the discontinued operations and        attributed to the continuing operations and vice versa.        This representation does not indicate the profits earned        by continuing and Snam operations, as if they were stand        alone entities, for past periods or likely to be earned        in future periods. Results attributable to individual        segments are not affected by this representation.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |
| (4) |    | In 2012, net        profit attributable to Eni from discontinued operations        includes post-tax gains on the disposal of a 30% stake        and the revaluation of the residual interest in Snam.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |
| (5) |         | Euro per        share or U.S. dollars per American Depositary Receipt        (ADR), as the case may be. One ADR represents two Eni        shares. The dividend amount for 2012 is based on the        proposal of Eni’s management which is submitted to        approval at the Annual General Shareholders’ Meeting        scheduled on May 10, 2013.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |
| (6) |         | Eni’s        financial statements are stated in euro. The translations        of certain euro amounts into U.S. dollars are included        solely for the convenience of the reader. The convenient        translations should not be construed as representations        that the amounts in euro have been, could have been, or        could in the future be, converted into U.S. dollars at        this or any other rate of exchange. Data per ADR, with        the exception of dividends, were translated at the        EUR/USD average exchange rate as recorded by in the        Federal Reserve Board official statistics for each year        presented (see the table on page 5). Dividends per ADR        for the years 2008 through 2011 were translated into U.S.        dollars for each year presented using the Noon Buying        Rate on payment dates, as recorded on the payment date of        the interim dividend and of the balance to the full-year        dividend, respectively.        The dividend for 2012 based on the management’s        proposal to the General Shareholders’ Meeting and        subject to approval was translated as per the portion        related to the interim dividend (euro 1.08 per ADR) at        the Noon Buying Rate recorded on the payment date on        October 11, 2012, while the balance of euro 1.08 per ADR        was translated at the Noon Buying Rate as recorded on        December 31, 2012. The balance dividend for 2012 once the        full-year dividend is approved by the Annual General        Shareholders’ Meeting is payable on May 23, 2013 to        holders of Eni shares, being the ex-dividend date May 20,        while ADRs holders will be paid late on June 7, 2013. |

2

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##### Table of Contents

|   | **As of December 31,** |
|--------|------------------------|
|   |                        |

|   | **2008** |   | **2009** |   | **2010** |   | **2011** |   | **2012** |
|--------|----------|--------|----------|--------|----------|--------|----------|--------|----------|
|   |          |   |          |   |          |   |          |   |          |

|   | **(euro million except        data per share and per ADR)** |
|--------|-------------------------------------------------------------|

| **CONSOLIDATED BALANCE SHEET DATA**                                                                   |   |    |   |   |    |   |   |    |   |   |    |   |   |    |   |
|-------------------------------------------------------------------------------------------------------|--------|---------|--------|--------|---------|--------|--------|---------|--------|--------|---------|--------|--------|---------|--------|
| Total        assets                                                                                   |   | 116,673 |   |   | 117,529 |   |   | 131,860 |   |   | 142,945 |   |   | 139,641 |   |
| Short-term and long-term debt                                                                         |   | 20,837  |   |   | 24,800  |   |   | 27,783  |   |   | 29,597  |   |   | 24,463  |   |
| Capital        stock issued                                                                           |   | 4,005   |   |   | 4,005   |   |   | 4,005   |   |   | 4,005   |   |   | 4,005   |   |
| Minority interest                                                                                     |   | 4,074   |   |   | 3,978   |   |   | 4,522   |   |   | 4,921   |   |   | 3,514   |   |
| Shareholders’        equity - Eni share                                                          |   | 44,436  |   |   | 46,073  |   |   | 51,206  |   |   | 55,472  |   |   | 59,199  |   |
| Capital expenditures from continuing operations                                                       |   | 12,935  |   |   | 12,216  |   |   | 12,450  |   |   | 11,909  |   |   | 12,761  |   |
| Weighted        average number of ordinary shares outstanding (fully        diluted - shares million) |   | 3,639   |   |   | 3,622   |   |   | 3,623   |   |   | 3,623   |   |   | 3,623   |   |
| Dividend per share (euro) (1)                                                                         |   | 1.30    |   |   | 1.00    |   |   | 1.00    |   |   | 1.04    |   |   | 1.08    |   |
| Dividend        per ADR ($) (1)        (2)                                                            |   | 3.72    |   |   | 2.91    |   |   | 2.64    |   |   | 2.73    |   |   | 2.82    |   |
|                                                                                                  |   |         |        |   |         |        |   |         |        |   |         |        |   |         |        |

----

| (1) |   | Euro per        share or U.S. dollars per American Depositary Receipt        (ADR), as the case may be. One ADR represents two Eni        shares. The dividend amount for 2012 is based on the        proposal of Eni’s management which is submitted to        approval at the Annual General Shareholders’ Meeting        scheduled on May 10, 2013.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |
|-----|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| (2) |   | Eni’s        financial statements are stated in euro. The translations        of certain euro amounts into U.S. dollars are included        solely for the convenience of the reader. The convenient        translations should not be construed as representations        that the amounts in euro have been, could have been, or        could in the future be, converted into U.S. dollars at        this or any other rate of exchange. Data per ADR, with        the exception of dividends, were translated at the        EUR/USD average exchange rate as recorded by in the        Federal Reserve Board official statistics for each year        presented (see the table on page 5). Dividends per ADR        for the years 2008 through 2011 were translated into U.S.        dollars for each year presented using the Noon Buying        Rate on payment dates, as recorded on the payment date of        the interim dividend and of the balance to the full-year        dividend, respectively.        The dividend for 2012 based on the management’s        proposal to the General Shareholders’ Meeting and        subject to approval was translated as per the portion        related to the interim dividend (euro 1.08 per ADR) at        the Noon Buying Rate recorded on the payment date on        October 11, 2012, while the balance of euro 1.08 per ADR        was translated at the Noon Buying Rate as recorded on        December 31, 2012. The balance dividend for 2012 once the        full-year dividend is approved by the Annual General        Shareholders’ Meeting is payable on May 23, 2013 to        holders of Eni shares, being the ex-dividend date May 20,        while ADRs holders will be paid late on June 7, 2013. |

 

3

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##### Table of Contents

**Selected operating information**

The tables below set forth selected operating information withrespect to Eni’s proved reserves, developed and undeveloped,of crude oil (including condensates and natural gas liquids) andnatural gas, as well as other data as of and for the years endedDecember 31, 2008, 2009, 2010, 2011 and 2012. Data on productionof oil and natural gas and hydrocarbon production sold includesEni’s share of production of affiliates and joint venturesaccounted for under the equity method. In presenting data onproduction volumes and reserves for total hydrocarbons, naturalgas volumes have been converted to oil-equivalent barrels on thebasis of a certain equivalency. From July 1, 2012, as part of anongoing review of the yields at the Company’s gas fieldscurrently in production, Eni has updated the conversion rate ofgas to 5,492 cubic feet of gas equals 1 barrel of oil (it was5,550 cubic feet of gas per barrel in previous reportingperiods). The effect of this update on production expressed inBOE was 9 kBOE/d for the full year 2012 and the change in theinitial reserves balance as of January 1, 2012 amounted to 40mmBOE. Prior-year converted amounts were left unchanged. Otherper-BOE indicators were only marginally affected by the update(e.g. realization prices, costs per BOE) and also negligible wasthe impact on depreciation and depletion charges. Other oilcompanies may use different conversion rates.

|   | **Year ended December 31,** |
|--------|-----------------------------|
|   |                             |

|   | **2008** |   | **2009** |   | **2010** |   | **2011** |   | **2012** |
|--------|----------|--------|----------|--------|----------|--------|----------|--------|----------|
|   |          |   |          |   |          |   |          |   |          |

| Proved reserves of liquids of consolidated        subsidiaries at period end (mmBBL)           |   | 3,243    |   |   | 3,377    |   |   | 3,415    |   |   | 3,134    |   |   | 3,084   |   |
|------------------------------------------------------------------------------------------------|--------|----------|--------|--------|----------|--------|--------|----------|--------|--------|----------|--------|--------|---------|--------|
| *of        which developed*                                                                    |   | *2,009*  |   |   | *2,001*  |   |   | *1,951*  |   |   | *1,850*  |   |   | *1,762* |   |
| Proved reserves of liquids of equity-accounted        entities at period end (mmBBL)           |   | 142      |   |   | 86       |   |   | 208      |   |   | 300      |   |   | 266     |   |
| *of        which developed*                                                                    |   | *33*     |   |   | *34*     |   |   | *52*     |   |   | *45*     |   |   | *44*    |   |
| Proved reserves of natural gas of consolidated        subsidiaries at period end (BCF) (1)     |   | 17,214   |   |   | 16,262   |   |   | 16,198   |   |   | 15,582   |   |   | 14,190  |   |
| *of        which developed*                                                                    |   | *11,138* |   |   | *11,650* |   |   | *10,965* |   |   | *10,363* |   |   | *8,965* |   |
| Proved reserves of natural gas of        equity-accounted entities at period end (BCF)         |   | 3,015    |   |   | 1,588    |   |   | 1,684    |   |   | 4,700    |   |   | 6,767   |   |
| *of        which developed*                                                                    |   | *420*    |   |   | *234*    |   |   | *246*    |   |   | *53*     |   |   | *424*   |   |
| Proved reserves of hydrocarbons of consolidated        subsidiaries in mmBOE at period end (1) |   | 6,242    |   |   | 6,209    |   |   | 6,332    |   |   | 5,940    |   |   | 5,667   |   |
| *of        which developed*                                                                    |   | *3,948*  |   |   | *4,030*  |   |   | *3,926*  |   |   | *3,716*  |   |   | *3,394* |   |
| Proved reserves of hydrocarbons of        equity-accounted entities in mmBOE at period end     |   | 666      |   |   | 362      |   |   | 511      |   |   | 1,146    |   |   | 1,499   |   |
| *of        which developed*                                                                    |   | *107*    |   |   | *74*     |   |   | *96*     |   |   | *54*     |   |   | *122*   |   |
| Reserves replacement ratio (2)                                                                 |   | 135      |   |   | 96       |   |   | 125      |   |   | 142      |   |   | 107     |   |
| Average        daily production of liquids        (kBBL/d) (3)                                 |   | 1,026    |   |   | 1,007    |   |   | 997      |   |   | 845      |   |   | 882     |   |
| Average daily production of natural gas        available for sale (mmCF/d)(3)                  |   | 4,143    |   |   | 4,074    |   |   | 4,222    |   |   | 3,763    |   |   | 4,118   |   |
| Average        daily production of hydrocarbons available for sale (kBOE/d)(3)                 |   | 1,748    |   |   | 1,716    |   |   | 1,757    |   |   | 1,523    |   |   | 1,631   |   |
| Hydrocarbon production sold        (mmBOE)                                                     |   | 632.0    |   |   | 622.8    |   |   | 638.0    |   |   | 548.5    |   |   | 598.7   |   |
| Oil and        gas production costs per BOE(4)                                                 |   | 7.65     |   |   | 7.41     |   |   | 8.89     |   |   | 10.86    |   |   | 10.82   |   |
| Profit per barrel of oil equivalent (5)                                                        |   | 16.00    |   |   | 8.14     |   |   | 11.91    |   |   | 16.98    |   |   | 15.95   |   |
|                                                                                           |   |          |        |   |          |        |   |          |        |   |          |        |   |         |        |

----

| (1) |    | Includes        approximately 746, 769, 767 and 767 BCF of natural gas        held in storage in Italy as of December 31, 2008, 2009,        2010 and 2011, respectively.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |
|-----|--------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| (2) |         | Referred to        Eni’s subsidiaries and its equity-accounted        entities. Consists of: (i) the increase in proved        reserves of consolidated subsidiaries attributable to:        (a) purchases of minerals in place; (b) revisions of        previous estimates; (c) improved recovery; and (d)        extensions and discoveries, less sales of minerals in        place; divided by (ii) production during the year as set        forth in the reserve tables, in each case prepared in        accordance with Topic 932. See the unaudited supplemental        oil and gas information in "Item 18 – Notes to        the Consolidated Financial Statements". Expressed as        a percentage. |
| (3) |    | Referred to        Eni’s subsidiaries and its equity-accounted        entities. Natural gas production volumes exclude gas        consumed in operations (281, 300, 318, 321 and 383 mmCF/d        in 2008, 2009, 2010, 2011 and 2012, respectively).                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |
| (4) |         | Expressed in        U.S. dollars. Consists of production costs of        consolidated subsidiaries (costs incurred to operate and        maintain wells and field equipment including also        royalties) prepared in accordance with IFRS divided by        production on an available-for-sale basis, expressed in        barrels of oil equivalent. See the unaudited supplemental        oil and gas information in "Item 18 – Notes to        the Consolidated Financial Statements".                                                                                                                                                                                                                           |
| (5) |         | Expressed in        U.S. dollars. Results of operations from oil and gas        producing activities of consolidated subsidiaries,        divided by actual sold production, in each case prepared        in accordance with IFRS to meet ongoing U.S. reporting        obligations under Topic 932. See the unaudited        supplemental oil and gas information in "Item 18        – Notes to the Consolidated Financial        Statements" for a calculation of results of        operations from oil and gas producing activities.                                                                                                                                                                                 |

4

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##### Table of Contents

**Selected operating information*******continued*

|   | **Year ended December 31,** |
|--------|-----------------------------|
|   |                             |

|   | **2008** |   | **2009** |   | **2010** |   | **2011** |   | **2012** |
|--------|----------|--------|----------|--------|----------|--------|----------|--------|----------|
|   |          |   |          |   |          |   |          |   |          |

| Sales of natural gas to third parties (1)                                                       |   | 83.69  |   |   | 83.79  |   |   | 75.81  |   |   | 78.16  |   |   | 78.24  |   |
|-------------------------------------------------------------------------------------------------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|
| Natural        gas consumed by Eni (1)                                                          |   | 5.63   |   |   | 5.81   |   |   | 6.19   |   |   | 6.21   |   |   | 6.43   |   |
| Sales of natural gas of affiliates (Eni’s        share) (1)                                |   | 8.91   |   |   | 7.95   |   |   | 9.41   |   |   | 9.53   |   |   | 7.92   |   |
| Total        sales and own consumption of natural gas of the Gas &        Power segment (1) |   | 98.23  |   |   | 97.55  |   |   | 91.41  |   |   | 93.90  |   |   | 92.59  |   |
| E&P natural gas sales in Europe and in the        Gulf of Mexico (1)                        |   | 6.00   |   |   | 6.17   |   |   | 5.65   |   |   | 2.86   |   |   | 2.73   |   |
| Worldwide        natural gas sales (1)                                                          |   | 104.23 |   |   | 103.72 |   |   | 97.06  |   |   | 96.76  |   |   | 95.32  |   |
| Electricity sold (2)                                                                            |   | 29.93  |   |   | 33.96  |   |   | 39.54  |   |   | 40.28  |   |   | 42.58  |   |
| Refinery        throughputs (3)                                                                 |   | 35.84  |   |   | 34.55  |   |   | 34.80  |   |   | 31.96  |   |   | 30.01  |   |
| Balanced capacity of wholly-owned refineries (4)                                                |   | 544    |   |   | 554    |   |   | 564    |   |   | 574    |   |   | 767    |   |
| Retail        sales (in Italy and rest of Europe) (3)                                           |   | 12.03  |   |   | 12.02  |   |   | 11.73  |   |   | 11.37  |   |   | 10.87  |   |
| Number of service stations at period end (in        Italy and rest of Europe)                   |   | 5,956  |   |   | 5,986  |   |   | 6,167  |   |   | 6,287  |   |   | 6,384  |   |
| Average        throughput per service station (in Italy and rest of        Europe) (5)          |   | 2,502  |   |   | 2,477  |   |   | 2,353  |   |   | 2,206  |   |   | 2,064  |   |
| Chemical production (3)                                                                         |   | 7.37   |   |   | 6.52   |   |   | 7.22   |   |   | 6.25   |   |   | 6.09   |   |
| Engineering        & Construction order backlog at period end (6)                           |   | 19,105 |   |   | 18,730 |   |   | 20,505 |   |   | 20,417 |   |   | 19,739 |   |
| Employees at period end (units)(7)                                                              |   | 71,741 |   |   | 71,461 |   |   | 73,768 |   |   | 72,574 |   |   | 77,838 |   |
|                                                                                            |   |        |        |   |        |        |   |        |        |   |        |        |   |        |        |

----

| (1) | i | Expressed in        BCM.                                            |
|-----|---|---------------------------------------------------------------------|
| (2) | i | Expressed in        TWh.                                            |
| (3) | i | Expressed in        mmtonnes.                                       |
| (4) | i | Expressed in        kBBL/d.                                         |
| (5) | i | Expressed in        thousand liters per day.                        |
| (6) | i | Expressed in        euro million.                                   |
| (7) | i | Relating to        continuing operations for all periods presented. |

 

 

**Exchange rates**

The following tables set forth, for the periods indicated,certain information regarding the Noon Buying Rate in U.S.dollars per euro, rounded to the second decimal (Source: TheFederal Reserve Board).

|   | **High** |   | **Low** |   | **Average**(1) |   | **At period end** |
|--------|----------|--------|---------|--------|----------------|--------|-------------------|
|   |          |   |         |   |                |   |                   |

|   | **(U.S.        dollars per euro)** |
|--------|------------------------------------|

| Year ended December 31, |   |   |   |   |   |   |   |   |
|-------------------------|--------|--------|--------|--------|--------|--------|--------|--------|
| 2008                    |   | 1.60   |   | 1.24   |   | 1.47   |   | 1.39   |
| 2009                    |   | 1.51   |   | 1.25   |   | 1.39   |   | 1.44   |
| 2010                    |   | 1.46   |   | 1.19   |   | 1.33   |   | 1.34   |
| 2011                    |   | 1.49   |   | 1.29   |   | 1.39   |   | 1.29   |
| 2012                    |   | 1.35   |   | 1.21   |   | 1.29   |   | 1.32   |
|                    |   |        |   |        |   |        |   |        |

----

| (1) |   | Average of        the Noon Buying Rates for the last business day of each        month in the period. |
|-----|--------|-------------------------------------------------------------------------------------------------------|

5

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##### Table of Contents

|   | **High** |   | **Low** |   | **At period end** |
|--------|----------|--------|---------|--------|-------------------|
|   |          |   |         |   |                   |

|   | **(U.S.        dollars per euro)** |
|--------|------------------------------------|

| October 2012         |   | 1.31 |   | 1.29 |   | 1.30 |
|----------------------|--------|------|--------|------|--------|------|
| November        2012 |   | 1.30 |   | 1.27 |   | 1.30 |
| December 2012        |   | 1.33 |   | 1.29 |   | 1.32 |
| January        2013  |   | 1.36 |   | 1.31 |   | 1.36 |
| February 2013        |   | 1.37 |   | 1.31 |   | 1.31 |
| March 2013           |   | 1.31 |   | 1.28 |   | 1.28 |
|                 |   |      |   |      |   |      |

Fluctuations in the exchange rate between the euro and thedollar affect the dollar equivalent of the euro price of theShares on the Telematico and the dollar price of the ADRs on theNYSE. Exchange rate fluctuations also affect the dollar amountsreceived by owners of ADRs upon conversion by the Depository ofcash dividends paid in euro on the underlying Shares. The NoonBuying Rate on April 5, 2013 was $1.3027 per euro 1.00.

 

**Risk factors**

> 
***Competition***

*There is strong competition worldwide, both within the    oil industry and with other industries, to supply energy to    the industrial, commercial and residential energy markets*

| Eni faces strong competition in each of        its business segments.
In the current uncertain        financial and economic environment, we expect that prices        of energy commodities, in particular oil and gas, will be        very volatile, with average prices and margins influenced        by changes in the global supply and demand for energy and        market dynamics. This is likely to increase competition        in all our businesses, which may impact costs and        margins. |
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| • |   | In the Exploration &        Production segment Eni faces competition from both        international oil companies and state-owned oil companies        for obtaining exploration and development rights, and        developing and applying new technologies to maximize        hydrocarbon recovery. Furthermore, Eni may face a        competitive disadvantage because of its relatively        smaller size compared to other international oil        companies, particularly when bidding for large scale or        capital intensive projects, and may be exposed to        industry-wide cost increases to a greater extent compared        to its larger competitors given its potentially smaller        market power with respect to suppliers. If, as a result        of those competitive pressures, Eni fails to obtain new        exploration and development acreage, to apply and develop        new technologies, and to control cost increases, its        growth prospects and future results of operations and        cash flows may be adversely affected.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |
|--------|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| • |   | In the Gas & Power        segment, Eni is facing increasingly strong competition on        both the Italian market and the European market due to        continuing slowdown in demand and macroeconomic        uncertainties in the face of large gas availability on        the marketplace which has driven the development of very        liquid continental hubs to trade spot gas. Gas supplies        to Europe were fuelled by material additions to global        LNG availability by upstream producers and large upgrades        of existing pipelines and construction of new backbones        on several European routes over the latest few years to        expand the import capacity from Russia and Algeria. Those        developments were compounded by very significant        increases in the production of shale gas in the United        States which reduced the Country’s dependence on        imported gas and resulted in diversion of important LNG        volumes to Europe. In 2012, those fundamental shifts in        market dynamics coupled with a demand downturn triggered        intense pricing competition among gas operators which        negatively affected profitability. Additionally, gas        marketing operators, including Eni, were hit by diverging        trends in the cost of gas supplies compared to selling        prices. In fact, procurement costs of those operators        were mainly indexed to the price of oil and its        derivatives as provided by pricing formulas in long-term        supply contracts, whereas selling prices were determined        on the basis of spot prices at continental hubs which        were pressured by weak demands, oversupplies and        competition. Those trends resulted in the Company’s        Gas & Power segment reporting sharply higher        operating losses in 2012 (down to euro 3,221 million        compared to a loss of euro 326 million in 2011). We        believe that the outlook for our gas marketing business        will remain weak in the short to medium term as the        ongoing trends affecting the sector will take time to be        reversed. Management forecasts that a better balance        between demand and supply on the European market is        unlikely to be achieved before 2014 or 2015. The        described trends may negatively affect the Company’s        future results of operations and cash flows in its        natural gas business, also taking into account the        Company’s contractual obligations to off-take        minimum annual volumes of natural gas in accordance to        its long-term gas supply contracts that include        take-or-pay clauses. See the sector-specific risk section        below. |

6

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| • |   | Eni also faces competition        from large, well-established European utilities and other        international oil and gas companies in growing its market        share and acquiring or retaining clients. A number of        large clients, particularly electricity producers and        large industrial buyers, in both the domestic market and        other European markets have entered the wholesale market        of natural gas by directly purchasing gas from producers        or sourcing it at the continental spot markets adding        further pressures on the economics of gas operators,        including Eni. Management believes that this trend will        continue in the future. At the same time, a number of        national gas producers from countries with large gas        reserves are planning to sell natural gas directly to        final clients, which would threaten the market position        of companies like Eni which resell gas purchased from        producing countries to final customers. These        developments may increase the level of competition in        both the Italian and other European markets and reduce        Eni’s expected operating profit and cash flows in        the gas business. Finally, following a law decree enacted        in March 2012 from the Italian Government to spur        competition in the Italian gas sector, management expects        that the Company’s selling margins will likely come        under pressure on sales at the regulated residential and        service segments due to the implementation of a less        favorable indexation mechanism of the raw material cost        in supplies to such customers than in the past. This will        be achieved by progressively introducing a spot-based        indexation mechanism of the cost of gas replacing the        current oil-linked formula which mirrors a basket of        long-term supply contracts. We expect that similar        measures will be introduced by other market regulators in        European countries where Eni engages in selling gas to        residential clients (see sector-specific risk factors        below). |
|--------|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| • |   | In its domestic electricity        business, Eni competes with other producers and traders        from Italy or outside of Italy who sell electricity on        the Italian market. Going forward, the Company expects        continuing competition due to the projections of weak        economic growth in Italy and Europe over the foreseeable        future, also causing outside players to place excess        production on the Italian market.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |
| • |   | In the retail marketing of        refined products both in Italy and abroad, Eni competes        with third parties (including international oil companies        and local operators such as supermarket chains) to obtain        concessions to establish and operate service stations.        Eni’s service stations compete primarily on the        basis of pricing, services and availability of        non-petroleum products. In Italy, there is an ongoing        pressure from political and administrative entities,        including the Italian Antitrust Authority, to increase        the level of competition in the retail marketing of        fuels. The above mentioned law decree of March 2012        targeted the Italian fuel retail market, by relaxing        commercial ties between independent operators of service        stations and oil companies, enlarging options to build        and operate fully-automated service stations, and opening        up the merchandising of various kinds of goods and        services at service stations. Eni expects developments in        this field to further increase pressure on selling        margins in the retail marketing of fuels and to reduce        opportunities of increasing market share in Italy.        Furthermore, the ongoing demand downturn in the Italian        fuel market is expected to exacerbate competition among        oil companies and other retail operators due to large        product availability on the marketplace.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |
| • |   | In the Chemical segment, we        are facing strong competition from well-established        international players and state-owned petrochemical        companies, particularly in the most commoditized market        segments such as production of basic petrochemicals        products and plastics. Many of those competitors based in        the Far East and Middle East are able to benefit from        cost advantages due to larger scale, looser environmental        regulations, availability of cheaper feedstock, and more        favorable location and proximity to end-markets. Excess        capacity and sluggish economic growth may exacerbate        competitive pressures. Furthermore, we expect that        petrochemicals producers based in the U.S. will regain        market share in the next future leveraging on a        competitive cost structure due to the increasing        availability of cheap feedstock deriving from the        production of domestic shale gas. The Company expects        continuing margin pressures in the foreseeable future as        a result of those trends.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |
| • |   | Competition in the oil field        services, construction and engineering industries is        primarily based on technical expertise, quality and        number of services and availability of technologically        advanced facilities (for example, vessels for offshore        construction). Lower oil prices could result in lower        margins and lower demand for oil services.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |

The Company’s failure or inability to respond effectivelyto competition could adversely impact the Company’s growthprospects, future results of operations and cash flows.

 

> 
***Safety, security, environmental and other    operational risks***

The Group engages in the exploration and production of oil andnatural gas, processing, transportation, and refining of crudeoil, storage and distribution of petroleum products, productionof base chemicals and special products. By their nature theGroup’s operation expose us to a wide range of significanthealth, safety, security and environmental risks. The magnitudeof these risks is influenced by the geographic range, operationaldiversity and technical complexity of our activities. Eni’sfuture results from operations and liquidity depend on ourability to identify and mitigate the risks and hazards inherentto operating in those industries.

In exploration and production, we face natural hazards andother operational risks including those relating to the physicalcharacteristics of oil and natural gas fields. These include therisks of eruptions of crude oil or of natural gas, discovery ofhydrocarbon pockets with abnormal pressure, crumbling of wellopenings, leaks that can harm the 

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environment and risks of fire or explosion. Accidents at asingle well can lead to loss of life, damage or destruction toproperty, environmental damage and consequently potentialeconomic losses that could have a material and adverse effect onthe business, results of operation, liquidity, reputation andprospects of the Group.

Eni’s activities in the Refining & Marketing andChemical segments also entail health, safety and environmentalrisks related to the overall life cycle of the productsmanufactured, and to raw materials used in the manufacturingprocess, such as catalysts, additives and monomer feedstock.These risks can arise from the intrinsic characteristics of theproducts involved (flammability, toxicity, or long-termenvironmental impacts such as greenhouse gas emissions), theiruse, emissions and discharges resulting from their manufacturingprocess, and from recycling or disposing of materials and wastesat the end of their useful life.

In the transportation area, the type of risk depends not onlyon the hazardous nature of the products transported, but also onthe transportation methods used (mainly pipelines, maritime,river-maritime, rail, road, gas distribution networks), thevolumes involved and the sensitivity of the regions throughwhich the transport passes (quality of infrastructure, populationdensity, environmental considerations). All modes oftransportation of hydrocarbons are particularly susceptible to aloss of containment of hydrocarbons and other hazardousmaterials, and, given the high volumes involved, could present asignificant risk to people and the environment.

The Company dedicates a great deal of efforts and attention tosafety, health, the environment and the prevention of risks; inpursuing compliance with applicable laws and policies; and inresponding and learning from unexpected incidents. We seek tominimize these operational risks by carefully designing andbuilding our facilities, including wells, industrial complexes,plants and equipment, pipelines, storage sites and distributionnetworks, and managing its operations in a safe, compliant andreliable manner. Failure to manage these risks effectively couldresult in unexpected incidents, including releases, oil spills,explosions, fire, mechanical failures and other incidentsresulting in personal injury, loss of life, environmental damage,legal liabilities and/or damage claims, destruction of crude oilor natural gas wells as well as equipment and other property, allof which could lead to a disruption in operations. Our operationsare often conducted in difficult or environmentally sensitivelocations such as the Gulf of Mexico, the Caspian Sea and theArctic, in which the consequences of any incident could begreater than in other locations. We also face risks onceproduction is discontinued, because our activities requireenvironmental site remediation.

Furthermore, in certain situations where Eni is not theoperator, the Company may have limited influence and control overthird parties, which may limit its ability to manage and controlsuch risks. Eni maintains insurance coverage that includecoverage for physical damage to our assets, third partyliability, workers’ compensation, pollution and other damageto the environment and other coverage. Our insurance is subjectto caps, exclusion and limitation, and there is no assurance thatsuch coverage will adequately protect us against liabilities fromall potential consequences and damages. In light of the accidentat the Macondo well in the Gulf of Mexico, we may not be able tosecure similar coverage for the same costs. Future insurancecoverage for our industry could increase in cost and may includehigher retentions. Also, some forms of insurance may becomeunavailable in the future or unavailable on terms that we believeare economically acceptable.

The occurrence of the above mentioned events could have amaterial adverse impact on the Group business, competitiveposition, cash flow, results of operations, liquidity, futuregrowth prospects, shareholders’ return and damage to theGroup reputation.

 

> 
***Risks associated with the exploration and production    of oil and natural gas***

The exploration and production of oil and natural gas requireshigh levels of capital expenditures and are subject to naturalhazards and other uncertainties, including those relating to thephysical characteristics of our oil and gas fields. A descriptionof the main risks facing our business in the exploration andproduction of oil and gas is provided below.

 

> 
*i) Our oil and natural gas offshore operations are    particularly exposed to health, safety, security and    environmental risks*

We have material operations relating to the exploration andproduction of hydrocarbons located offshore. In 2012,approximately 52% of our total oil and gas production for theyear derived from offshore fields, mainly in Egypt, Libya,Norway, Italy, Angola, the Gulf of Mexico, Congo, UK and Nigeria.Offshore operations in the oil and gas industry are inherentlyriskier than onshore activities. As the Macondo accident occurredin the Gulf of Mexico has shown, the potential impacts ofoffshore accidents and spills to health, safety, security and theenvironment can be catastrophic due to the objective difficultiesin handling hydrocarbons containment and other factors. Alsooffshore operations are subject to marine perils, includingsevere storms and other adverse weather conditions and vesselcollisions, as well as interruptions or termination bygovernmental authorities based on safety, environmental and otherconsiderations. Failure to manage these risks could result ininjury or loss of life, damage to property, environmental damage,and could 

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result in regulatory action, legal liability, loss of revenuesand damage to our reputation and could have a material adverseeffect on our operations or financial condition. In 2012, a gasleak following a well operation occurred at a wellhead platformof the Elgin/Franklin gas field, located in the UK North Sea. Thefield was operated by an international oil company with Eniholding 21.87% interest in the field. We incurred costs torestart the platform operations and reported a significant lossof production for the year (down by 7 mmBBL). We may also incurenvironmental liabilities which may arise from the incident.

 

> 
*ii) Exploratory drilling efforts may be unsuccessful*

Exploration drilling for oil and gas involves numerous risksincluding the risk of dry holes or failure to find commercialquantities of hydrocarbons. The costs of drilling, completing andoperating wells have margins of uncertainty, and drillingoperations may be unsuccessful as a result of a variety offactors, including unexpected drilling conditions, pressure orheterogeneities in formations, equipment failures, blow-outs andother forms of accidents, marine risks such as collisions andadverse weather conditions and shortages or delays in thedelivery of equipment. Exploration drilling in offshore areas,particularly in deep waters, is generally more challenging andriskier than in onshore areas; the same is true for exploratoryactivity in remote areas or in challenging environmentalconditions in environmentally-sensitive locations such as thosewe are experiencing in the Barents Sea. Failure to discovercommercial quantities of oil and natural gas could have anadverse impact on Eni’s future growth prospects, results ofoperations and liquidity. Because Eni plans to make significantinvestments in executing high-risk exploration projects, it islikely that Eni will incur significant exploration and dry holeexpenses in future years. Eni plans to explore for oil and gasonshore and offshore. A number of exploration projects areplanned in deep and ultra-deep waters or at deep drilling depths,where operations are more challenging and costly than in otherareas. Deep water operations generally may require significanttime before commercial production of reserves can commence,increasing both the operational and financial risks associatedwith these activities. The Company plans to conduct explorationprojects offshore West Africa (Angola, Nigeria, Congo, Liberia,Ghana and Gabon), East Africa (Mozambique), the South-East Asia(Indonesia, Vietnam and other locations), Australia, the BarentsSea and the Black Sea. In 2012, the Company spent approximatelyeuro 1.8 billion to conduct exploration projects and it plans tospend approximately euro 1.4 billion on average in the nextfour-year plan on exploration activities.

Unsuccessful exploration activities and failure to findadditional commercial reserves could reduce future production ofoil and natural gas which is highly dependent on the rate ofsuccess of exploratory activity.

 

> 
*iii) Development projects bear significant operational    risks which may adversely affect actual returns*

| Eni is conducting several development        projects to produce and market hydrocarbon reserves.        Certain projects target to develop reserves in high-risk        areas, particularly offshore and in remote and hostile        environments or environmentally sensitive locations.        Eni’s future results of operations and liquidity        depend heavily on our ability to implement, develop and        operate major projects as planned. Key factors that may        affect the economics of these projects include: |
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| • |   | the outcome of negotiations        with co-venturers, governments and state-owned companies,        suppliers, customers or others, including, for example,        Eni’s ability to negotiate favorable long-term        contracts to market gas reserves; |
|--------|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| • |   | the development of reliable        spot markets that may be necessary to support the        development of particular production projects, or        commercial arrangements for pipelines and related        equipment to transport and market hydrocarbons;   |

| • |   | timely issuance of permits        and licenses by government agencies;                                                                                                                                                                                                                                                                                                                                                                                                                                 |
|--------|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| • |   | the Company’s relative        size compared to its main competitors which may prevent        it from participating in large-scale projects or affect        its ability to reap benefits associated with economies of        scale, for example by obtaining more favorable        contractual terms by suppliers of goods and services;                                                                                                                                                          |
| • |   | the ability to design        development projects so as to prevent the occurrence of        technical inconvenience;                                                                                                                                                                                                                                                                                                                                                                                   |
| • |   | delays in manufacturing and        delivery of critical equipment, or shortages in the        availability of such equipment, causing cost overruns and        delays;                                                                                                                                                                                                                                                                                                                                 |
| • |   | risks associated with the        use of new technologies and the inability to develop        advanced technologies to maximize the recoverability rate        of hydrocarbons or gain access to previously inaccessible        reservoirs;                                                                                                                                                                                                                                                             |
| • |   | poor performance at project        execution on the part of international contractors who        are awarded project construction activities generally        based on the EPC (engineering, procurement, construction)        – turn key contractual scheme. We believe that this        is mainly due to lack of contractual flexibility, poor        quality of front-end design engineering and commissioning        delays;                                                                  |
| • |   | changes in operating        conditions and cost overruns. In recent years, the        industry has been impacted by escalating costs of certain        critical productive factors including specialized        workforce, procurement costs and costs for leasing third        party equipment or purchase services such as drilling        rigs as a result of industry-wide cost inflation,        bottlenecks and other constraints in the worldwide        production capacity available to build |

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|   |   | critical equipment and        facilities and growing complexity and scale of projects,        including environmental and safety costs. Furthermore,        there has been an evolution in the location of our        projects, as we have been discovering increasingly        important volumes of reserves in remote and harsh        locations or environmentally sensitive locations (i.e.        the Barents Sea, Alaska, the Jamal Peninsula, the Caspian        Sea) where we are experiencing significantly higher        operating costs and environmental, safety and other costs        than in other locations. The Company expects that costs        in its upstream operations will continue to rise in the        foreseeable future; |
|--------|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| • |   | the actual performance of        the reservoir and natural field decline; and                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |
| • |   | the ability and time        necessary to build suitable transport infrastructures to        export production to final markets.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |

Poor project execution, delays in the achievement of criticalevents and production start-up, differences between scheduled andactual timing, as well as cost overruns may adversely affect theeconomic returns of our development projects. Failure to delivermajor projects successfully could negatively impact our resultsof operations, cash flow and short-term targets of productiongrowth. Finally, developing and marketing hydrocarbons reservestypically requires several years after a discovery is made. Thisis because a development project involves an array of complex andlengthy activities, including appraising a discovery in order toevaluate its commercial potential, sanctioning a developmentproject and building and commissioning related facilities. As aconsequence, rates of return for such long-lead-time projects areexposed to the volatility of oil and gas prices and costs whichmay be substantially different from the prices and costs assumedwhen the investment decision was actually made, leading to lowerrates of return. In addition, projects executed with partners andco-venturers reduce the ability of the Company to manage risksand cost, and Eni could have limited influence over and controlof the operations, behaviors and performance of its partners.Furthermore, Eni may not have full operation control of the jointventures in which participates and may have exposure tocounterparty credit risk and disruption of operation andstrategic objectives due to the nature of its relationships.

We have incurred material cost overruns and substantial delayin the scheduling of production start-up at the Kashaganoilfield, where development is ongoing. These negative trendswere driven by a number of factors including depreciation of theU.S. dollar versus the euro and other currencies; cost escalationof goods and services required to execute the project; anoriginal underestimation of the costs and complexity to operatein the North Caspian Sea due to lack of benchmarks; designchanges to enhance the operability and safety standards of theoffshore facilities. The partners of the venture are currentlytargeting the achievement of the first commercial production bythe first half of 2013 in accordance to the updated developmentplan covering Phase 1 of the field development which was agreedwith the Kazakh Authorities in the course of 2012. See "Item4 – Exploration & Production – Caspian Sea"for a full description of the material terms of the Kashaganproject.

We have also experienced a few delays at a number ofdevelopment projects located mainly in Algeria, the UK, Angolaand Norway. Those delays were attributable to execution issuesand delivery of critical equipment reflecting capacityconstraints. These events will impact the timing profile of ourplanned production growth in the short term.

In case the Company is unable to develop and operate majorprojects as planned, particularly if the Company fails toaccomplish budgeted costs and time schedules, it could incursignificant impairment charges associated with reduced futurecash flows of those projects on capitalized costs.

 

> 
*iv) Inability to replace oil and natural gas reserves    could adversely impact results of operations and financial    condition*

Eni’s results of operations and financial condition aresubstantially dependent on its ability to develop and sell oiland natural gas. Unless the Company is able to replace producedoil and natural gas, its reserves will decline. In addition tobeing a function of production, revisions and new discoveries,the Company’s reserve replacement is also affected by theentitlement mechanism in its Production Sharing Agreements("PSAs") and similar contractual schemes. In accordanceto such contracts, Eni is entitled to a portion of a field’sreserves, the sale of which is intended to cover expendituresincurred by the Company to develop and operate the field. Thehigher the reference prices for Brent crude oil used to estimateEni’s proved reserves, the lower the number of barrelsnecessary to recover the same amount of expenditures. In 2012,the Company’s reserve replacement was negatively affected bylower entitlements in its PSAs and in the economics of marginalproductions for an estimated amount of 62 mmBOE, which howeverdid not impair the Company’s ability to fully replacereserves produced in the year. See "Item 4 – Businessoverview – Exploration & Production" and"Item 5 – Management’s expectations ofoperations". Future oil and gas production is dependent onthe Company’s ability to access new reserves through newdiscoveries, application of improved techniques, success indevelopment activity, negotiation with countries and other ownersof known reserves and acquisitions. In a number of reserve-richcountries, national oil companies control a large portion of oiland gas reserves that remain to be developed. To the extent thatnational oil companies decide to develop those reserve withoutthe participation of international oil companies or if ourCompany fails to establish partnership with national oilcompanies, our ability to access or develop additional reserveswill be limited.

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An inability to replace produced reserves by finding,acquiring and developing additional reserves could adverselyimpact future production levels and growth prospects. If we areunsuccessful, we may not meet our long-term targets of productiongrowth and reserve replacement, and our future total provedreserves and production will decline, negatively affectingEni’s future results of operations and financial condition.

 

> 
*v) Changes in crude oil and natural gas prices may    adversely affect Eni’s results of operations*

| The exploration and production of oil        and gas is a commodity business with a history of price        volatility. The single largest variable that affects the        Company’s results of operations and financial        condition is crude oil prices. Lower crude oil prices        have an adverse impact on Eni’s results of        operations and cash flows. Eni generally does not hedge        exposure of the Group reserves to fluctuations in future        cash flows due to crude oil price movements. As a        consequence, Eni’s profitability depends heavily on        crude oil and natural gas prices. Crude oil and natural        gas prices are subject to international supply and demand        and other factors that are beyond Eni’s control,        including among other things: |
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (i)   |   | the control on production        exerted by the Organization of the Petroleum Exporting        Countries ("OPEC") member countries which        control a significant portion of the world’s supply        of oil and can exercise substantial influence on price        levels;                                                                                                       |
|-------|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| (ii)  |   | global geopolitical and        economic developments, including sanctions imposed on        certain oil-producing countries on the basis of        resolutions of the United Nations or bilateral sanctions;                                                                                                                                                                                          |
| (iii) |   | global and regional dynamics        of demand and supply of oil and gas; we believe that the        current economic slowdown may have affected global demand        for oil. In 2012, gas demand in Europe and Italy fell        sharply due to the economic downturn. This trend        negatively affected gas prices at our North Sea fields;                                                     |
| (iv)  |   | prices and availability of        alternative sources of energy. We believe that gas demand        in Europe has been impacted by a shift to the use of coal        in firing power plants due to cost advantages compared to        gas, as well as the rising contribution of renewable        energies in satisfying energy requirements. We expect        those trends to continue in the future; |
| (v)   |   | governmental and        intergovernmental regulations, including the        implementation of national or international laws or        regulations intended to limit greenhouse gas emissions,        which could impact the prices of hydrocarbons; and                                                                                                                                              |
| (vi)  |   | success in developing and        applying new technology.                                                                                                                                                                                                                                                                                                                                             |

All these factors can affect the global balance between demandand supply for oil and prices of oil.

Lower oil and gas prices over prolonged periods may alsoadversely affect Eni’s results of operations and cash flowsby: (i) reducing rates of return of development projects eitherplanned or being implemented, leading the Company to reschedule,postpone or cancel development projects, or accept a lower rateof return on such projects; (ii) reducing the Group’sliquidity, entailing lower resources to fund expansion projects,further dampening the Company’s ability to grow futureproduction and revenues; and (iii) triggering a review of futurerecoverability of the Company’s carrying amounts of oil andgas properties, which could lead to the recognition ofsignificant impairment charges.

 

> 
*vi) We expect that tightening regulation in oil and gas    activities following the Macondo accident will lead to rising    compliance costs and other restrictions*

The production of oil and natural gas is highly regulated andis subject to conditions imposed by governments throughout theworld in matters such as the award of exploration and productioninterests, the imposition of specific drilling and other workobligations, income taxes and taxes on production, environmentalprotection measures, control over the development and abandonmentof fields and installations, and restrictions on production.Following the Macondo accident in the Gulf of Mexico, we expectthat governments throughout the world will implement stricterregulation on environmental protection, risk prevention and otherforms of restrictions to drilling and other well operations.These new regulations and legislation, as well as evolvingpractices, could increase the cost of compliance and may alsorequire changes to our drilling operations and exploration anddevelopment plans and may lead to higher royalties and taxes.

 

> 
*vii) Uncertainties in estimates of oil and natural gas    reserves*

| Several uncertainties are inherent in        estimating quantities of proved reserves and in        projecting future rates of production and timing of        development expenditures. The accuracy of proved reserve        estimates depends on a number of factors, assumptions and        variables, among which the most important are the        following: |
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| • |   | the quality of available        geological, technical and economic data and their        interpretation and judgment; |
|--------|--------|-----------------------------------------------------------------------------------------------------------------------|
| • |   | projections regarding future        rates of production and timing of development        expenditures;                |

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| • |   | whether the prevailing tax        rules, other government regulations and contractual        conditions will remain the same as on the date estimates        are made; |
|--------|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| • |   | results of drilling, testing        and the actual production performance of Eni’s        reservoirs after the date of the estimates which may        require substantial upward or downward revisions; and                                       |
|--------|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| • |   | changes in oil and natural        gas prices which could affect the quantities of        Eni’s proved reserves since the estimates of        reserves are based on prices and costs existing as of the        date when these estimates are made. |

In particular the reserve estimates are subject to revisionsas prices fluctuate due to the cost recovery mechanism under theCompany’s PSAs and similar contractual schemes.

Many of these factors, assumptions and variables involved inestimating proved reserves are beyond Eni’s control and maychange over time and impact the estimates of oil and natural gasreserves. Accordingly, the estimated reserves could besignificantly different from the quantities of oil and naturalgas that will ultimately be recovered. Additionally, any downwardrevision in Eni’s estimated quantities of proved reserveswould indicate lower future production volumes, which couldadversely impact Eni’s results of operations and financialcondition.

 

> 
*viii) Oil and gas activity may be subject to    increasingly high levels of income taxes*

The oil and gas industry is subject to the payment ofroyalties and income taxes which tend to be higher than thosepayable in many other commercial activities. In addition, inrecent years, Eni has experienced adverse changes in the taxregimes applicable to oil and gas operations in a number ofcountries where the Company conducts its upstream operations. Asa result of these trends, management estimates that the tax rateapplicable to the Company’s oil and gas operations ismaterially higher than the Italian statutory tax rate forcorporate profit which currently stands at 44%. The tax rate ofthe Company’s Exploration & Production segment for thefiscal year 2012 was approximately 60%.

Management believes that the marginal tax rate in the oil andgas industry tends to increase in correlation with higher oilprices which could make it more difficult for Eni to translatehigher oil prices into increased net profit. However, the Companydoes not expect that the marginal tax rate will decrease inresponse to falling oil prices. Adverse changes in the tax rateapplicable to the Group profit before income taxes in its oil andgas operations would have a negative impact on Eni’s futureresults of operations and cash flows.

In the current uncertain financial and economic environment,governments are facing greater pressure on public finances, whichmay increase their motivation to intervene in the fiscalframework for the oil and gas industry, including the risk ofincreased taxation, nationalization and expropriations.

Eni’s results depend on its ability to identify andmitigate the above mentioned risks and hazards which are inherentto Eni’s operation.

 

> 
***Political considerations***

A substantial portion of our oil and gas reserves and gassupplies are located in countries which are politically, sociallyand economically less stable than OECD countries. Therefore weare exposed to risks of material disruptions to our operations inthose less stable countries. As of December 31, 2012,approximately 80% of Eni’s proved hydrocarbon reserves werelocated in such countries and 59% of Eni’s supplies ofnatural gas came from countries outside OECD countries. See"Item 4 – Exploration & Production and Gas &Power" for more information about the Group reservelocations and natural gas supplies.

| Adverse political, social and economic        developments in any of those less stable countries may        negatively affect Eni’s ability to continue        operating in an economic way, either temporarily or        permanently, and Eni’s ability to access oil and gas        reserves. In particular, Eni faces risks in connection        with the following issues: |
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (i)   |   | lack of well-established and        reliable legal systems and uncertainties surrounding        enforcement of contractual rights;                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |
|-------|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| (ii)  |   | unfavorable developments in        laws, regulations and contractual arrangements leading,        for example, to expropriations or forced divestitures of        assets and unilateral cancellation or modification of        contractual terms.        Eni is facing increasing competition from state-owned oil        companies who are partnering with Eni in a number of oil        and gas projects and properties in the host countries        where Eni conducts its upstream operations. These        state-owned oil companies can change contractual terms        and other conditions of oil and gas projects in order to        obtain a larger profit share from a given project,        thereby reducing Eni’s profit share. Furthermore, as        of the balance sheet date receivables for euro 481        million relating to cost recovery under a petroleum        contract in a non-OECD country were the subject of an        arbitration proceeding; |
| (iii) |   | restrictions on exploration,        production, imports and exports;                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |
| (iv)  |   | tax or royalty increases        (including retroactive claims); and                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |

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| (v) |   | civil and social unrest        leading to sabotages, acts of violence and incidents. For        example, we experienced continuing acts of sabotage and        theft in Nigeria which caused significant production        losses and negatively affected our results of operations        in the Country for the year 2012. |
|-----|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

See "Item 4 – Exploration & Production –Oil and natural gas reserves".

While the occurrence of those events is unpredictable, it islikely that the occurrence of such events could cause Eni toincur material losses or facility disruptions, by this wayadversely impacting Eni’s results of operations and cashflows.

 

> 
*Risks associated with continuing political instability    in North Africa and Middle East*

As of end of 2012, approximately 30% of the Company’sproved oil and gas reserves were located in North Africa andMiddle East. In 2011, several North African and Middle Easternoil producing countries experienced an extreme level of politicalinstability that has resulted in changes in governments, unrestand violence and consequential economic disruptions. Thisinstability is currently continuing to affect the region. The2011 situation was particularly serious in Libya where thepolitical instability escalated to turn out into an internalrevolution and conflict which caused material disruptions to ouroperations in the country for a period of eight months. After theend of the conflict in late 2011, Eni was able to restart its allfields, producing facilities and gas exports through theGreenStream pipeline. In the course of 2012, the Company hasprogressively built up production volumes and achieved a level ofapproximately 258 kBOE/d on average for the year. However, wewere unable to restore the full production plateau at our fieldscontrary to our initial planning assumptions, due to thecomplexity of the transition period which the Country iscurrently undergoing.

We believe that the political outlook in North Africa andMiddle East remains an area of risks for our operations, resultsand strategic development.

 

> 
***Risks associated with our presence in sanction    targets***

> 
*Our activities in Iran could lead to sanctions under    relevant U.S. legislation*

Eni is currently conducting oil and gas operations in Iran.The legislation and other regulations of the United States thattarget Iran and persons who have certain dealings with Iran maylead to the imposition of sanctions on any persons doing businessin Iran or with Iranian counterparties.

The United States enacted the Iran Sanctions Act of 1996 (asamended, "ISA"), which required the President of theUnited States to impose sanctions against any entity that isdetermined to have engaged in certain activities, includinginvestment in Iran’s petroleum sector. The ISA was amendedin July 2010 by the Comprehensive Iran Sanctions, Accountabilityand Divestment Act of 2010 ("CISADA"). As a result, inaddition to sanctions for knowingly investing in Iran’spetroleum sector, parties engaging in business activities in Irannow may be sanctioned under the ISA for knowingly providing toIran refined petroleum products, and for knowingly providing toIran goods, services, technology, information or support thatcould directly and significantly either: (i) facilitate themaintenance or expansion of Iran’s domestic production ofrefined petroleum products, or (ii) contribute to the enhancementof Iran’s ability to import refined petroleum products.CISADA also expanded the menu of sanctions available to thePresident of the United States by three, from six to nine, andrequires the President to impose three of the nine sanctions, asopposed to two of six, if the President has determined that aparty has engaged in sanctionable conduct. The new sanctionsinclude a prohibition on transactions in foreign exchange by thesanctioned company, a prohibition of any transfers of credit orpayments between, by, through or to any financial institution tothe extent the interest of a sanctioned company is involved, anda requirement to "block" or "freeze" anyproperty of the sanctioned company that is subject to thejurisdiction of the United States. Investments in the petroleumsector that commenced prior to the adoption of CISADA appear toremain subject to the pre-amended version of the ISA, except forthe mandatory investigation requirements described below, but nodefinitive guidance has been given. The new sanctions added byCISADA would be available to the President with respect to newinvestments in the petroleum sector or any other sanctionableactivity occurring on or after July 1, 2010. CISADA also adoptedmeasures designed to reduce the President’s discretion inenforcement under the ISA, including a requirement for thePresident to undertake an investigation upon being presented withcredible evidence that a person is engaged in sanctionableactivity. CISADA also added to the ISA provisions that aninvestigation need not be initiated, and may be terminated oncebegun, if the President certifies in writing to the U.S. Congressthat the person whose activities in Iran were the basis for theinvestigation is no longer engaging in those activities or hastaken significant steps toward stopping the activities, and thatthe President has received reliable assurances that the personwill not knowingly engage in any sanctionable activity in thefuture. The President also may waive sanctions, subject tocertain conditions and limitations.

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The United States maintains broad and comprehensive economicsanctions targeting Iran that are administrated by the U.S.Treasury Department’s Office of Foreign Assets Control("OFAC sanctions"). These sanctions generally restrictthe dealings of U.S. citizens and persons subject to thejurisdiction of the United States. In addition, we are aware ofinitiatives by certain U.S. states and U.S. institutionalinvestors, such as pension funds, to adopt or consider adoptinglaws, regulations or policies requiring divestment from, orreporting of interests in, companies that do business withcountries designated as states sponsoring terrorism. CISADAspecifically authorized certain state and local Iran relateddivestment initiatives. If our operations in Iran are determinedto fall within the scope of divestment laws or policies, salesresulting from such divestment laws and policies, if significant,could have an adverse effect on our share price. Even if ouractivities in and with respect to Iran do not subject us tosanctions or divestment, companies with investments in the oiland gas sectors in Iran may suffer reputational harm as a resultof increased international scrutiny.

With regard to the trading of crude oil, the above mentionedmeasures (in particular, the Iran Threat Reduction and SyrianHuman Rights Acts of August 10, 2012, and the National DefenseAuthorization Acts 2012) provide for a ban on carrying outtransactions associated with the purchase of crude oil and a banon owning, operating or insuring any vessels used to transportIranian crude. Both bans may be granted a waiver by the U.S.State Department (based on the National Defense Authorization Actfor the Fiscal Year 2012) covering the home-country of an entityor the country of destination of the crude oil. A waiver grantedto Italy and other EU Member States in March 2012 and lastly renewed on March 13,2013 for a further 180-day period.

Other sanctions programs have been adopted by variousgovernments and regulators with respect to Iran, including aseries of resolutions from the United Nations Security Council,and measures imposed by various countries based on and toimplement these United Nations Security Council resolutions. OnJuly 26, 2010, the European Union adopted new restrictivemeasures regarding Iran (referred to as the "EUmeasures"). Among other things, the supply of equipment andtechnology in the following sectors of the oil and gas industryin Iran are prohibited: refining, liquefied natural gas,exploration and production. The prohibition extends to technicalassistance, training and financing and financial assistance inconnection with such items. Extension of loans or credit to,acquisition of shares in, entry into joint ventures with or otherparticipation in enterprises in Iran (or Iranian ownedenterprises outside of Iran) engaged in any of the targetedsectors also is prohibited.

On March 23, 2012 the Council of the European Union enactedregulation prohibiting the import, transport and purchase ofIranian crude oil and petroleum products. The rules allow for theperformance of contracts, entered into before January 23, 2012,whereby the supply of Iranian crude oil and petroleum products isintended to reimburse outstanding receivables due to entitiesunder the jurisdiction of EU Member States.

| In the last months of 2012, the Council        of the European Union adopted new measures providing for        additional restrictive measures against Iran including: |
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| • |   | export prohibition on key        naval equipment and technology for ship-building,        maintenance or refit;                                         |
|--------|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------|
| • |   | prohibition in trade in        graphite, raw or semi-finished metals, such as aluminum        and steel, and software for certain industrial processes; |
| • |   | ban on the import, purchase        or transport of Iranian natural gas;                                                                                 |
| • |   | prohibitions on the        provision of flagging and classification services to        Iranian oil tankers and cargo vessels; and                       |
| • |   | prohibition on the supply of        vessels designed for the transport or storage of Iranian        oil and petrochemical products.                     |

The new measures also prohibit transactions between theEuropean Union and Iranian banks and financial institutions,unless an authorization is granted in advance by the relevantMember State and include an embargo on the supply to Iran and usein Iran of key equipment or technology which could be used in thesectors of the oil, natural gas and petrochemical industries,starting from April 15, 2013.

Furthermore, the new measures designate new Iranian entitiesas subject to the asset freeze, including the Iranian oil gasindustry companies (the National Iranian Oil Co and itssubsidiary operating companies).

The European measures provide a waiver of certain prohibitions(i.e. embargo on oil and gas key technologies, prohibition tosupply of vessels for the purpose of transporting Iranian oil,asset freeze of the National Iranian Corp and its subsidiaries)in order to perform obligations under contracts entered intobefore January 23, 2012, which provide for the supply of Iraniancrude oil and petroleum products as a reimbursement ofoutstanding receivables due to entities under the jurisdictionsof EU member states by Iranian counterparties (such as the caseof Eni service contracts described therein). Under this waiverEni is allowed to carry out its upstream and oil importactivities. In this respect, Eni is in close contact with thecompetent European authorities in order to obtain the relevantauthorizations, certain of which have already been received.

Eni Exploration & Production segment has been operating inIran for several years under four Service Contracts (South Pars,Darquain, Dorood and Balal, these latter two projects beingoperated by another international oil company) 

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entered into with the National Iranian Oil Co (NIOC) between1999 and 2001, and no other exploration and development contractshave been entered into since then. Under such Service Contracts,Eni has carried out development operations in respect of certainoil fields, and is entitled to recovery of expenditures made, aswell as a service fee. The service contracts do not provide forpayments to be made by Eni, as contractor, to the IranianGovernment (e.g. leasing fees, bonuses, significant amounts oflocal taxes); all material future cash flows relate to thepayment to Eni of its dues. All projects mentioned above havebeen completed or substantially completed; the Darquain project,is in the process of final commissioning and is being handed overto the NIOC. In this respect, we expect to incur operating costsin the range of approximately $10 to $20 million per year overthe next few years for contractual support activities andservices. In 2012, we incurred $22 million to provide suchactivities and services.

Eni Exploration & Production projects in Iran arecurrently in the cost recovery phase. Therefore, Eni has ceasedmaking any further investment in the country and is not planningto make additional capital expenditures in Iran in future years.

In 2012, Eni’s production in Iran averaged 3 kBOE/d,representing less than 1% of the Eni Group’s totalproduction for the year. Eni’s entitlement in 2012represented less than 3% of the overall production from the oiland gas fields that we have developed in Iran. Eni believes thatthe results from its Iranian exploration and production areimmaterial to the Group’s results.

After passage of CISADA, Eni engaged in discussions withofficials of the U.S. State Department, which administers theISA, regarding Eni’s activities in Iran. On September 30,2010, the U.S. State Department announced that the U.S.Government, pursuant to a provision of the ISA added by CISADAthat allows it to avoid making a determination of sanctionabilityunder the ISA with respect to any party that provides certainassurances, would not make such a determination with respect toEni based on Eni’s commitment to end its investments inIran’s energy sector and not to undertake new energy-relatedactivity. The U.S. State Department further indicated at thattime that, as long as Eni acts in accordance with thesecommitments, we will not be regarded as a company of concern forour past Iran related activities.

Between the end of 2011 and the beginning of 2013, theUnited States adopted new measures designed to intensify thescope of U.S. sanctions against Iran, in particular related tothe Iran’s energy and financial sectors.

Such restrictive measures are: the Executive Orders 13590 ofNovember 21, 2011 and 13622 of July 31, 2012 and the Iran ThreatReduction and Syrian Human Rights Acts of August 10, 2012("ITRSHRA"), which expanded the ISA/CISADA scope by increasingfrom three to five the minimum number of sanctions to be imposedin case of violations of the energy sector restrictions; the NationalDefense Authorization Acts - 2012, related to transactions withthe Iranian Central Bank and transactions for the acquisition ofIranian crude oil and the National Defense Authorization Acts -2013, which, inter alia, adds the shipbuilding sector among thosesubject to sanctions.

The new provisions impose, inter alia, sanctions on personsthat are determined to have engaged in certain activities insupport of Iran’s energy and petrochemicals sector that arenot specifically targeted by the ISA, as amended by CISADA.

| Those activities include: |
|---------------------------|

| • |   | the provision of goods,        services, technology or support that have a fair market        value above certain monetary thresholds and that could        directly and significantly contribute to the maintenance        or enhancement of Iran’s ability to develop its        petroleum resources or to the maintenance or expansion of        Iran’s domestic production of petrochemical        products; |
|--------|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| • |   | the purchase of        petrochemical products from Iran, and the supply of        financial, material, technological support for, or goods        or services in support of the National Iranian Oil Co        (NIOC); and                                                                                                                                                                                                 |
| • |   | the participation in a joint        oil and gas development venture with Iran, outside Iran,        if that venture was established after January 1, 2002.                                                                                                                                                                                                                                                                 |

As discussed above, pursuant to the Darquain service contract,entered into prior to the date of these measures, Eni isproviding services in advance of the hand over of the oilfield toNIOC and retains certain technical assistance and serviceobligations, and an obligation to provide, upon request, spareparts and supplies for field maintenance and operations. We donot believe that Eni’s activities in Iran (the completion ofexisting contracts which has already been notified to the U.S.administration when the Special Rule was applied) aresanctionable under the mentioned measures. However, Eni has noformal assurances that the U.S. State Department’s 2010determination of non-sanctionability under the ISA wouldsimilarly extend to sanctions under such measures. If sanctionswere imposed, their impact could be material and adverse to Eni.

Our Refining & Marketing segment has historicallypurchased amounts of Iranian crude oil under a term contract withthe NIOC and on a spot basis. We purchased 1.63 mmtonnes, 976ktonnes and 498 ktonnes in 2010, 2011 and 2012, respectively. Wepaid NIOC $888 million in 2010, $742 million in 2011 and $396million in 2012, for those purchases.

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In addition, in 2010 we purchased crude oil from internationaltraders and oil companies who, based on bills of loading andshipping documentation available to us, we believe purchased thecrude oil from Iranian companies. Purchases were mainly on spotbasis. In 2010, we purchased 2.09 mmtonnes of crude oil amountingto $1.1 billion.

Also as a consequence of EU restrictive measures, in June 2012Eni ceased to import Iranian crude oil with the exception ofthose volumes necessary to collect outstanding receivablestowards Iranian counterparties, as allowed by the European Unionsanctions regime.

Eni has no involvement in Iran’s refined petroleum sectorand does not export refined petroleum to Iran.

Finally, our Chemical segment licensed a number oftechnologies in Iran in past years, relating toplastics/elastomers and relevant raw materials, but it neversupplied equipment or materials for plant construction. Eni plansto suspend all contracts by April 2013 to comply with EUrestrictions.

We will continue to monitor closely legislative and otherdevelopments in the United States and the European Union in orderto determine whether our remaining interests in Iran couldsubject us to application of either current or future sanctionsunder the OFAC sanctions, the ISA, the EU Measures or otherwise.If any of our activities in and with respect to Iran are found tobe in violation of any Iran-related sanctions, and sanctions areimposed on Eni, it could have an adverse effect on our business,plans to raise financing, sales and reputation.

 

> 
*We have commercial transactions with Syria where we    mainly purchase from time to time volumes of crude oil*

Our operations in Syria have mainly been limited totransactions carried out by our Refining & Marketing segmentwith Syrian Petrol Co, an entity controlled by the SyrianGovernment, for the purchase of crude oil under term purchasecontracts or on a spot basis, based on prevailing marketconditions.

We purchased 321 ktonnes and 243 ktonnes in 2010 and 2011,respectively. We paid Syrian Petrol Co $163 million in 2010 and$175 million in 2011, for those purchases. No crude oil purchaseswere made in 2012.

We also purchased small amounts of crude oil frominternational traders who, based on bills of lading and shippingdocumentation available to us, we believe purchased those rawmaterials from Syrian companies.

In 2010, our Engineering & Construction segment wasawarded by Dijla Petroleum Co, an affiliate of the SyrianNational Oil Co, a contract for the central processing facilityto be installed at the Khurbet East oil field, on Block 26.

Other than as described above, Eni is not currently investingin the country, and it has no contractual arrangements in placeto invest in the Country.

 

> 
*We have a limited presence in the Democratic Republic    of Congo*

In August 2010, we signed a farm-in agreement with theUK-based Surestream Petroleum to acquire the 55% interest and theoperatorship in the Ndunda Block in the Democratic Republic ofCongo. Currently we are not conducting any activity in thisCountry.

 

> 
***Cyclicality of the petrochemical industry***

The petrochemical industry is subject to fluctuations indemand in response to macroeconomic cycles, leading to volatileresults of operations and cash flow. It is a highly competitiveindustry due to lack of entry barriers, product commoditizationand excess capacity, which may exacerbate the impact of anydemand downturns on the results reported by our Chemicalsbusiness. Eni’s chemical operations have been facingincreasing competition from Asian companies and the petrochemicalarm of national oil companies based in the Middle East which canleverage on long-term competitive advantages in terms of loweroperating costs and cheaper feedstock costs. In particular,Eni’s competitors based in the Middle East are benefitingfrom the large availability of gas-based feedstock which providesa cost advantage compared to the oil-based feedstock used atEni’s operations. Management also expects that U.S.-basedpetrochemical companies will regain competitiveness in the mediumterm leveraging on the large domestic availability of rawmaterials which can be extracted from shale gas.

Our chemical operations are located mainly in Italy andWestern Europe where the expenses to comply with environmental,safety and security rules may be higher than in most Asiancountries due to an established regulatory framework and publicenvironmental sensitivity. Additionally, our petrochemicaloperations lack sufficient scale and 

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competitiveness at a number of sites owing also to geographiclocation and other structural weaknesses. Due to poor industryfundamentals, intense competitive pressures, high feedstockcosts, coupled with company-specific factors, our chemicaloperations incurred substantial operating losses in recent years.In 2012, our chemicals operations reported sharply higheroperating losses compared to the year earlier, down to euro 683million (down by 61%) driven by unprofitable product marginsparticularly in the basic petrochemicals and polyethylenebusinesses which were impaired by high oil-based feedstock costs,and lower sales volumes amidst a demand downturn. Lookingforward, management expects that in the foreseeable futureresults and cash flow at our chemical business could be adverselyaffected by a weak economic outlook in Italy and Europe.Furthermore, rising costs of oil-based feedstock represent a riskto the profitability of the Company’s petrochemicaloperations as it may be difficult to preserve products marginsdue to the high level of competition in the industry and thecommoditized nature of many of Eni’s products.

 

> 
***Risks in the Company Gas & Power business***

***i) Risks associated with the trading environment and    competition in the industry***

*In 2012, the Company’s gas marketing business    reported sharply lower operating losses due to a demand    downturn and increasing competitive pressures arising from    large gas availability in the marketplace. We expect negative    market conditions to affect results and liquidity in 2013 and    beyond*

The Company’s gas marketing business has reportedoperating losses and negative cash flow in 2012 and 2011 due to ademand downturn and changed competitive dynamics in the Europeangas sector. Gas demand has been severely hit by the economicslowdown and lower consumption in the thermoelectric sector. Thelatter trend was affected by an ongoing expansion of renewablesources of electricity and a shift away from gas to the use ofcoal in firing power plants due to cost advantages. In the faceof weak demand, supplies on the marketplace have continued toincrease fuelled by pipeline upgrades, growing availability ofLNG and the fact that the U.S. have reduced their dependence onLNG imports due to large development of domestic production ofshale gas further adding to global LNG supplies. Those trendshave driven the expansion of very liquid continental hubs wherespot prices have become the prevailing benchmark of salecontracts, particularly in the industrial and thermoelectricsegments. Spot prices have been on a downtrend over the latestfew years reflecting oversupplies and weak demand. This trend hashit the profitability at European gas marketing operators,including Eni. Those operators procured their gas supplies underlong-term contracts with producing countries whereby the cost ofgas is generally indexed to the price of crude oil and otherderivatives and margins were squeezed due to a decoupling betweenspot prices and the oil-linked costs of purchased gas. Adding tothe pressure was the circumstance that reduced salesopportunities forced operators to aggressively compete on pricingto limit the financial risks associated with the take-or-payclause provided by the long-term supply contracts. On their part,large clients adopted opportunistic supply patterns, in order totake advantage of the large availability of spot gas. Finallygovernmental administrations in several European countries havecommenced to review the indexation mechanism of supply tariffs inthe retail sector in order to make residential customers benefitfrom the ongoing trend in gas spot markets. Against thisbackdrop, our gas marketing business reported sharply higheroperating losses down to euro 3,221 million due also to materialimpairment charges to align the asset book values to their lowervalues-in-use to reflect a reduced profitability outlook.

Management expects industrial conditions in the gas sector inItaly and Europe to remain unfavorable over the short to themedium term due to continuing market imbalances and strongcompetition. We forecasts that weak gas demand due to the currenteconomic downturn and uncertainties, the persistence ofoversupplies and strong competition will represent risk factorsto the profitability outlook of the Company gas marketingbusiness over the next two to three years. Short-termperspectives are anticipated to be highly adverse in Italy wherethe economic recovery is feeble, the price of gas to industrialand other large clients is likely to align to the pricing levelat the continental hubs and finally gas margins are expected tobe affected by the liberalization measures enacted by the ItalianGovernment intended to reduce the cost of gas to residentialusers (see below). We believe that those trends will negativelyimpact the gas marketing business future results of operationsand cash flows by reducing gas selling prices and margins, alsoconsidering Eni’s obligations under its take-or-pay supplycontracts (see below).

 

> 
*We are seeking to improve our cost competitiveness by    renegotiating more favorable contractual terms with our    long-term suppliers. If we fail to achieve this our    profitability could be adversely affected*

Our long-term supply contracts provide clauses whereby theparties are entitled to renegotiate pricing terms and othercontractual conditions from time to time to reflect in a changedmarket environment. We are seeking to renegotiate better termsand pricing of our long-term supply contracts in the next futureyears to align our cost structure to prices prevailing in themarketplace in order to preserve the profitability of our gasoperations. If we fail to obtain the planned benefits, our futureresults and cash flow could be adversely affected. Furthermore,we believe that our results will become more volatile andunpredictable in future years as contractual renegotiations taketime to define, possibly leading to large one-off priceadjustments recorded in the reporting period when the new termsare agreed upon. In addition, in case the parties are entitled tofail to arrange renewed contractual terms, both of them may seekan 

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arbitration ruling, which increases the uncertainty regardinga final outcome of the renegotiation process. Similarly, weexpect that a number of our clients whom we supply to onlong-term basis, will request price revisions and othercontractual changes.

 

> 
*We expect that current imbalances between demand and    supply in the European gas market will persist for sometime*

| In 2012, gas demand fell by 2% in        Europe and by 4% in Italy due to the economic downturn        and sharply lower gas consumptions in the thermoelectric        sector. Management estimates that gas demand will grow at        an average rate of approximately 1.7% in Italy and Europe        until 2020. Those estimates have been revised downward        from previous management projections to factor in the        risks associated with a number of ongoing trends: |
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| • |   | uncertainties and volatility        in the macroeconomic cycle; particularly the current        downturn in Europe will weigh on the short-term        perspectives of a rapid recovery in gas demand;                                |
|--------|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| • |   | growing adoption of        consumption patterns and life-styles characterized by        wider sensitivity to energy efficiency; and                                                                                                   |
| • |   | EU policies intended to        reduce GHG emissions and promote renewable energy        sources. For further information about the Company’s        outlook for gas demand see "Item 4 – Gas &        Power". |

The projected moderate dynamics in demand will not be enoughto balance current oversupplies on the marketplace over the nexttwo to three years according to management’s estimates. Gasoversupplies have been increasing in recent years as new, largeinvestments to upgrade import pipelines to Europe have comeonline from Russia and Algeria, and large availability of LNG ona worldwide scale has found an outlet at the European continentalhubs driving the development of very liquid spot gas markets.Furthermore, in the near future management expects the start-upof new infrastructures in various European entry points whichwill add large amounts of new import capacity over the next fewyears. Those include a new line of the Nord Stream pipelineconnecting Russia to Germany through the Baltic Sea as well asnew LNG facilities. In Italy, the gas offered will increasemoderately in the next future as a new LNG plant is expected tostart operations at Livorno with a 4 BCM treatment capacity andeffects are in place of Law Decree No. 130/2010 about storagecapacity which is expected to increase by 4 BCM by 2015.

These developments will be tempered by an expected increase inworldwide gas demand driven by economic growth in China and otheremerging economies, a slowdown in additions of new worldwide LNGcapacity, and mature field decline in Europe.

Those trends represent risks to the Company’s futureresults of operations and cash flows in its gas business. See"Item 4 – Gas & Power" for further informationabout our long-term expectations on gas demand and supply.

 

> 
*Current, negative trends in gas demands and supplies    may impair the Company’s ability to fulfill its minimum    off-take obligations in connection with its take-or-pay,    long-term gas supply contracts*

In order to secure long-term access to gas availability,particularly with a view of supplying the Italian gas market, Enihas signed a number of long-term gas supply contracts with keyproducing countries that supply the European gas markets. Thesecontracts have been ensuring approximately 80 BCM of gasavailability from 2010 (including the Distrigas portfolio ofsupplies and excluding Eni’s other subsidiaries andaffiliates) with a residual life of approximately 16 years and apricing mechanism that indexes the cost of gas to the price ofcrude oil and its products (gasoil, fuel oil, etc.). Thesecontracts include take-or-pay clauses whereby the Company isrequired to off-take minimum pre-determined volumes of gas ineach year of the contractual term or, in case of failure, to paythe whole price, or a fraction of that price, up to the minimumcontractual quantity. The take-or-pay clause entitles the Companyto off-take pre-paid volumes of gas in later years during theperiod of contract execution. Amounts of cash prepayments andtime schedules for off-taking pre-paid gas vary from contract tocontract. Generally, cash prepayments are calculated on the basisof the energy prices current in the year when the Company isscheduled to purchase the gas, with the balance due in the yearwhen the gas is actually purchased. Amounts of pre-payments rangefrom 10 to 100 percent of the full price.

The right to off-take pre-paid gas expires within a ten-yearterm in some contracts or remains in place until contractexpiration in other arrangements. In addition, the right tooff-take the pre-paid gas can be exercised in future yearsprovided that the Company has fulfilled its minimum takeobligation in a given year and within the limit of the maximumannual quantity. In this case, Eni will pay the residual pricecalculating it as the percentage that complements 100%, based onthe arithmetical average of monthly base prices current in theyear of the off-take. Similar considerations apply to ship-or-paycontractual obligations.

Management believes that the current outlook pointing to weakgas demand growth and large gas availability on the marketplace,the possible evolution of sector-specific regulation, as well asstrong competitive pressures on the 

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marketplace represent risk factors to the Company’sability to fulfill its minimum take obligations associated withits long-term supply contracts.

Since the beginning of the downturn in the European gas marketlate in 2009, Eni has triggered the take-or-pay clause as theCompany collected lower volumes than its minimum take obligationsin each of those years accumulating deferred costs amounting toeuro 2.37 billion and has paid almost the whole of the relevantcash advances.

Considering ongoing market trends and the Company’soutlook for its sales volumes which are anticipated to remainstable in 2013 and to increase at a moderate pace in subsequentyears, as well as the expected benefit associated with contractrenegotiations which may temporarily reduce the annual minimumtake and other commercial initiatives, management believes thatthe Company’s exposure to take-or-pay contracts will needcontinuing monitoring and will continue to give rise to financialrisk in future years.

In addition to the financial risk, failure to off-take thecontractual minimum amounts exposes the Company to a price risk,because the purchase price Eni will ultimately be required to payis based on future energy prices which may be higher than theenergy prices prevailing when the off-take obligation arose. Inaddition, Eni is subject to the risk of not being able to disposeof pre-paid volumes should the total addressable market besmaller than the Company’s gas availability in the relevantperiod. Finally, the Company expects to incur financing costsconsidering the cash advances already paid to its suppliers. As aresult, the Company’s selling margins, results of operationsand cash flow may be negatively affected. For further informationon the Company’s take-or-pay contracts see "Item 4– Gas & Power – Purchases".

 

> 
*Eni plans to increase natural gas sales in Europe. If    Eni fails to achieve projected growth targets, this could    adversely impact future results of operations and liquidity*

Over the medium term, Eni plans to increase its natural gassales in Europe leveraging on its natural gas availability undertake-or-pay purchase contracts, availability of transport rightsand storage capacity, and widespread commercial presence inEurope. Should Eni fail to increase natural gas sales in Europeas planned due to poor strategy execution or competition,Eni’s future growth prospects, results of operations andcash flows might be adversely affected also taking account thatEni might be unable to fulfill its contractual obligations topurchase certain minimum amounts of natural gas based on itstake-or-pay purchase contracts currently in force.

 

> 
***ii) Risks associated with sector-specific    regulations in Italy***

*Risks associated with the regulatory powers entrusted    to the Italian Authority for Electricity and Gas in the    matter of pricing to residential customers*

The Authority for Electricity and Gas is entrusted withcertain powers in the matters of natural gas pricing.Specifically, the Authority for Electricity and Gas holds ageneral surveillance power on pricing in the natural gas marketin Italy and the power to establish selling tariffs for thesupply of natural gas to residential and commercial usersconsuming less than 50,000 CM/y (as provided for by ResolutionARG/gas No. 64/2009) taking into account the public goal ofcontaining the inflationary pressure due to rising energy costs.Accordingly, decisions of the Authority for Electricity and Gason these matters may limit the ability of Eni to pass an increasein the cost of the raw material onto final consumers of naturalgas. The indexation mechanism set by the Authority forElectricity and Gas basically provides that the cost of the rawmaterial in the pricing formula to the residential sector beindexed to movements in a basket of hydrocarbons. The Authorityfor Electricity and Gas modified in a few occasions thatindexation mechanism by introducing price adjustments to benefitthe residential customers.

Finally, the Italian law decree on liberalizations enacted inMarch 2012 entrusted the AEEG with the task to gradually introducereference to the price of certain benchmarks quoted atcontinental hubs in the indexation mechanism of the cost of gasin the pricing of sales to the above mentioned customers.In compliance with the recently enacted law, the AEEG published a consultationdocument regarding the reform of the gas retail prices proposing,starting from April 2013, 20% of the retail gas price rawmaterial component shall be linked to spot prices (up from current5%). Starting from October 2013, the raw material component isplanned to be 100% spot based; this should be partially offset bythe introduction of new tariff components, applicable for the nexttwo thermal years, in order to grant a gradual transition fromoil-linked prices to spot market determined prices, to cover thecosts of the transition to new supply formulas and to favor aneffective renegotiation of long-term contracts for importing gas.Management believes that this development will negatively affectthe profitability of the Company sales in the residential marketin Italy because we expect that trends in spot prices will beless favorable than the oil-linked cost of gas supplies to theGroup, thus limiting our ability to pass cost increases to ourclients. This will adversely affect our future results and cashflow.

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> 
*Recent liberalization measures in the gas storage    sector*

| At the beginning of 2013, the Minister        of Economic Development and the Italian Authority for        Electricity and Gas introduced new criteria for the        allocation of gas storage capacities pursuant to Article        14 of Law Decree No. 1/2012. In particular: |
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| • |   | the natural gas storage        capacity which becomes available as a result of the        decreased amount of strategic storage and of new methods        for calculating the modulation storage obligations is        assigned to industrial companies and regasifiers; and |
|--------|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| • |   | the modulation storage        capacity for the needs of "vulnerable        customers" is assigned partly with competitive        bidding procedures, and partly under existing        procedures.                                                             |

> 
 

*The Italian Government has taken steps to increase    competition in the Italian natural gas market. Further    regulatory developments are possible in the future which may    adversely affect Eni’s results of operations and cash    flows*

The Italian Government has long supported a higher degree ofcompetition in the Italian natural gas market and this mayproduce significant developments in this area.

In March 2012, a law decree on liberalizations was enactedwhich established new measures to enhance competition in theItalian natural gas market. Among those measures, there was aprovision that required Eni to divest its shareholding in Snam,the Italian dominant player in the field of gas transportation,distribution and storage. The divestiture of a significant stakein Snam was made to an entity controlled by the Italian State,effective October 15, 2012; as part of the transaction Eni lostcontrol over the investee.

Management believes the institutional debate on the degree ofcompetition in the Italian natural gas market and the regulatoryactivity to be areas of concern and cannot exclude negativeimpacts deriving from developments on these matters on Eni’sfuture results of operations and cash flows.

For more information on these issues see "Item 4 –Regulation of Eni’s businesses – Gas & Power".

 

> 
***Antitrust and competition law***

The Group’s activities are subject to antitrust andcompetition laws and regulations in many countries of operations,especially in Europe. It is possible that the Group may incursignificant loss provisions in future years relating to ongoingantitrust proceedings or new proceedings that may possibly arise.The Group is particularly exposed to this risk in its naturalgas, refining and marketing and petrochemicals activities due tothe fact that Eni is the incumbent operator in those markets inItaly and a large European player. See "Item 18 – note34 of the Notes to the Consolidated Financial Statements"for a full description of Eni’s main pending antitrustproceedings. Furthermore, based on the findings of antitrustproceedings, plaintiffs could seek payment to compensate for anyalleged damages as a result of antitrust business practices onpart of Eni. Both these risks could adversely affect theGroup’s future results of operations and cash flows.

 

> 
***Environmental, health and safety regulation***

*Eni has incurred in the past and will incur material    operating expenses and expenditures in relation to compliance    with applicable environmental, health and safety regulations    in future years*

Eni is subject to numerous EU, international, national,regional and local environmental, health and safety laws andregulations concerning its oil and gas operations, products andother activities. Generally, these laws and regulations requirethe acquisition of a permit before drilling for hydrocarbons maycommence, restrict the types, quantities and concentration ofvarious substances that can be released into the environment inconnection with exploration, drilling and production activities,as well as refining, petrochemicals and other Group operations,limit or prohibit drilling activities in certain protected areas,require to remove and dismantle drilling platforms and otherequipment and well plug-in once oil and gas operations haveterminated, provide for measures to be taken to protect thesafety of the workplace and health of communities involved by theCompany’s activities, and impose criminal or civilliabilities for polluting the environment or harmingemployees’ or communities’ health and safety resultingfrom oil, natural gas, refining, petrochemical and otherGroup’s operations.

These laws and regulations also regulate emissions ofsubstances and pollutants, handling of hazardous materials anddischarges to surface and subsurface of water resulting from theoperation of oil and natural gas extraction and processingplants, petrochemical plants, refineries, service stations,vessels, oil carriers, pipeline systems and other 

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facilities owned by Eni. In addition, Eni’s operationsare subject to laws and regulations relating to the production,handling, transportation, storage, disposal and treatment ofwaste materials.

Breach of environmental, health and safety laws exposes theCompany’s employees to criminal and civil liability and theCompany to the incurrence of liabilities associated withcompensation for environmental, health or safety damage as wellas damage to its reputation. Additionally, in the case ofviolation of certain rules regarding the safeguard of theenvironment and safety in the workplace, the Company can beliable due to negligent or willful conduct on part of itsemployees as per Law Decree No. 231/2001.

| Environmental, health and safety laws        and regulations have a substantial impact on Eni’s        operations. Management expects that the Group will        continue to incur significant amounts of operating        expenses and expenditures to comply with laws and        regulations addressing safeguard of the environment,        safety on the workplace, health of employees and        communities involved by the Company operations,        including: |
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| • |   | costs to prevent, control,        eliminate or reduce certain types of air and water        emissions and handle waste and other hazardous materials,        including the costs incurred in connection with        government action to address climate change; |
|--------|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| • |   | remedial and clean-up        measures related to environmental contamination or        accidents at various sites, including those owned by        third parties (see discussion below);                                                                         |
| • |   | damage compensation claimed        by individuals and entities, including local, regional or        state administrations, caused by our activities or        accidents; and                                                                                     |
| • |   | costs in connection with the        decommissioning and removal of drilling platforms and        other facilities, and well plugging.                                                                                                                            |

In addition, growing public concerns in the EU and globallythat rising greenhouse gas emissions and climate change maysignificantly affect the environment and society could adverselyaffect our businesses, including the possible enactment ofstricter regulations that increase our operating costs, affectproduct sales and reduce profitability. For more discussion aboutthis topic see "Item 4 – Environmentalregulations".

| Furthermore, in the countries where we        operate or expect to operate in the near future, new laws        and regulations, the imposition of tougher license        requirements, increasingly strict enforcement or new        interpretations of existing laws and regulations or the        discovery of previously unknown contamination may also        cause us to incur material costs resulting from actions        taken to comply with such laws and regulations,        including: |
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| • |   | modifying operations;                               |
|--------|--------|-----------------------------------------------------|
| • |   | installing pollution control        equipment;      |
| • |   | implementing additional        safety measures; and |
| • |   | performing site clean-ups.                          |

As a further result of any new laws and regulations or otherfactors, we may also have to curtail, modify or cease certainoperations or implement temporary shutdowns of facilities, whichcould diminish our productivity and materially and adverselyimpact our results of operations, including profits.

Security threats require continuous assessment and responsemeasures. Acts of terrorism against our plants and offices,pipelines, transportation or computer systems could severelydisrupt businesses and operations and could cause harm to people.

 

> 
*Eni has incurred in the past and may incur in the    future material environmental liabilities in connection to    the environmental impact of its past and present industrial    activities. Also plaintiffs may seek to obtain compensation    for damage resulting from events of contamination and    pollution*

Risks of environmental, health and safety incidences andliabilities are inherent in many of Eni’s operations andproducts. Notwithstanding management’s beliefs that Eniadopts high operational standards to ensure safety of itsoperations and to protect the environment and health of peopleand employees, it is possible that incidents like blow-outs, oilspills, contaminations and similar events could occur that wouldresult in damage to the environment, employees and communities.The occurrence of any such events could have a material adverseimpact on the Group business, competitive position, cash flow,results of operations, liquidity, future growth prospects,shareholders’ return and damage to the Group reputation.

Environmental laws also require the Company to remediate andclean-up the environmental impacts of prior disposals or releasesof chemicals or petroleum substances and pollutants by theCompany. Such contingent liabilities may exist at various sitesthat the Company disposed of, closed or shut down in prior yearswhere the Group products have been produced, processed, stored,distributed or sold, such as chemicals plants,mineral-metallurgic plants, refineries and other facilities. TheCompany is particularly exposed to the risk of environmentalliabilities in Italy where several industrial installationsoperated by Eni were located which were subsequently divested,closed, liquidated or shut down. At those industrial locationsEni has commenced a number of initiatives to restore and clean-upproprietary 

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or concession areas that were allegedly contaminated andpolluted by the Group’s industrial activities.Notwithstanding the Group claimed that it cannot be held liablefor such past contaminations as permitted by applicableregulations in case of declaration rendered by a guiltless owner– particularly regulations that enacted into Italianlegislation the Directive No. 2004/35/EC – plaintiffs andseveral public administrations have been acting against Eni toclaim both the environmental damage and measures to performadditional clean-up and remediation projects in a number of civiland administrative proceedings. Remedial and clean-up activitieswith respect to the Company’s sites are expected to continuein the foreseeable future, impacting our liquidity as withreference to the balance sheet date the Group has accrued riskprovisions to cope with all existing environmental liabilitieswhereby both a legal or constructive obligation to perform aclean-up or other remedial actions is in place and the associatedcosts can be reasonably estimated. The accrued amounts representthe management’s best estimates of the Company’sliability.

Management believes that it is possible that in the future Enimay incur significant environmental expenses and liabilities inaddition to the amounts already accrued due to: (i) thelikelihood of as yet unknown contamination; (ii) the results ofongoing surveys or surveys to be carried out on the environmentalstatus of certain Eni’s industrial sites as required by theapplicable regulations on contaminated sites; (iii) unfavorabledevelopments in ongoing litigation on the environmental status ofcertain Company’s site where a number of publicadministrations and the Italian Ministry for the Environment actas plaintiffs; (iv) the possibility that new litigation mightarise; (v) the probability that new and stricter environmentallaws might be implemented; and (vi) the circumstance that theextent and cost of future environmental restoration andremediation programs are often inherently difficult to estimate.

 

> 
***Legal Proceedings***

Eni is defendant in a number of civil actions andadministrative proceedings arising in the ordinary course ofbusiness. In addition to existing provisions accrued as of thebalance sheet date to account for ongoing proceedings, it ispossible that in future years Eni may incur significant losses inaddition to amounts already accrued in connection with pendinglegal proceedings due to: (i) uncertainty regarding the finaloutcome of each proceeding; (ii) the occurrence of newdevelopments that management could not take into considerationwhen evaluating the likely outcome of each proceeding in order toaccrue the risk provisions as of the date of the latest financialstatements; (iii) the emergence of new evidence and information;and (iv) underestimation of probable future losses due to thecircumstance that they are often inherently difficult toestimate. For more information see disclosure of pendinglitigation in "Item 18 – note 34 of the Notes to theConsolidated Financial Statements".

 

> 
***Risks related to changes in the price of oil,    natural gas, refined products and chemicals***

Operating results in Eni’s Exploration & Production,Refining & Marketing, and Chemical segments are affected bychanges in the price of crude oil and by the impacts of movementsin crude oil prices on margins of refined and petrochemicalproducts.

 

> 
*Eni’s results of operations are affected by    changes in international oil prices*

Overall, lower oil prices have a net adverse impact onEni’s results of operations. The effect of lower oil priceson Eni’s average realizations for produced oil is generallyimmediate. Furthermore, Eni’s average realizations forproduced oil differ from the price of Brent crude markerprimarily due to the circumstance that Eni’s productionslate, which also includes heavy crude qualities, has a lower APIgravity compared with Brent crude (when processed the latterallows for higher yields of valuable products compared to heavycrude qualities, hence higher market price).

 

> 
*The favorable impact of higher oil prices on Eni’s    results of operations may be offset in part by opposite    trends in margins for Eni’s downstream businesses*

The impact of changes in crude oil prices on Eni’sdownstream businesses, including the Gas & Power, theRefining & Marketing and the Chemicals businesses, dependsupon the speed at which the prices of gas and products adjust toreflect movements in oil prices.

In the Gas & Power segment, increases in oil pricerepresent a risk to the profitability of the Company sales as gassupplies are mainly indexed to the cost of oil and certainrefined products, while selling prices, particularly outsideItaly, are increasingly benchmarked to gas spot prices quoted atcontinental hubs. In the current trading environment, spot pricesat those hubs are particularly depressed due to oversupplyconditions. In 2012, the de-coupling between trends in theoil-linked costs of supplies and spot prices of gas sales was themain driver of the operating loss incurred 

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by our gas marketing business. We expect that such unfavorabletrend will continue in 2013 and beyond due to ongoing risingtrends in crude oil prices and weak spot prices pressured bysluggish industry fundamentals and competition.

In addition, the Italian Authority for Electricity and Gas andother European regulatory authorities may limit the ability ofthe Company to pass cost increases linked to higher oil pricesonto selling prices in supplies to residential customers andsmall businesses as we expect a shift to spot prices in theindexation mechanism of the raw material cost which may replacethe oil-linked indexation in selling formulas to those customers.See the paragraph "Risks in the Company’s gasbusiness" above for more information.

In addition, in light of the changed European gas marketenvironment, Eni has adopted new risk management policies. Thesepolicies contemplate the use of derivative contracts to mitigatethe exposure of Eni’s future cash flows to future changes ingas prices; such exposure had been exacerbated in recent years bythe fact that spot prices at European gas hubs have ceased totrack the oil prices to which Eni’s long-term supplycontracts are linked.

These policies also contemplate the use of derivativecontracts for speculative purposes whereby Eni is seeking toprofit from opportunities available in the gas market based,among other things, on its expectations regarding future prices.These contracts may lead to gains as well as losses, which, ineach case, may be significant. All derivative contracts that arenot entered into for hedging purposes in accordance with IFRSwill be accounted through profit and loss, resulting in highervolatility of the gas business’ operating profit. Please see"Item 5 – Financial review – Management’sexpectations of operations" and "Item 11 –Quantitative and qualitative disclosures about market risk".

In the Refining & Marketing and Chemicals businesses atime lag exists between movements in oil prices and in prices offinished products.

 

> 
*Eni’s results of operations are affected by    changes in European refining margins*

Results of operations at Eni’s Refining & Marketingsegment are substantially affected by changes in Europeanrefining margins which reflect changes in relative prices ofcrude oil and refined products. The prices of refined productsdepend on global and regional supply/demand balances, inventorylevels, refinery operations, import/export balances and weather.Furthermore, Eni’s realized margins are also affected byrelative price movements of heavy or sour crude qualities versuslight or sweet crude qualities, taking into account the abilityof Eni’s refineries to process complex crudes that representa cost advantage when market prices of heavy crudes arerelatively cheaper than the marker Brent price.

In 2012, Eni’s refining margins were unprofitable as thehigh cost of oil was only partially transferred to final pricesof fuels pressured by weak demand, high worldwide and regionalinventory levels and excess refining capacity particularly in theMediterranean area. Furthermore, the profitability of complexcycles was impaired due to shrinking price differentials betweenheavy crudes versus light ones. Management does not expect anysignificant recovery in industry fundamentals over the short tomedium term. The sector as a whole will continue to suffer fromweak demand and excess capacity, while the cost of oil feedstockmay continue rising and price differentials may remaincompressed.

In this context, management expects that the Company’srefining margins will remain at unprofitable levels in 2013 andpossibly beyond. In addition, due to a reduced outlook forrefining margins and the persistence of weak industryfundamentals, management took substantial impairment chargesamounting to euro 846 million before tax to align the book valueof the Company’s refining plants to their lowervalues-in-use which impacted 2012 results of operations.

 

> 
*Eni’s results of operations are affected by    changes in petrochemical margins*

Eni’s margins on petrochemical products are affected bytrends in demand for petrochemical products and movements incrude oil prices to which purchase costs of petroleum-basedfeedstock are indexed. Given the commoditized nature of Enipetrochemical products, it is difficult for the Company totransfer higher purchase costs for oil-based feedstock to sellingprices to customers. In 2012, Eni’s petrochemicals businessreported sharply higher operating losses down to euro 683 milliondue to unprofitable margins on basic petrochemicals products,mainly the margin on cracker, reflecting high oil-based feedstockcosts and as demand for petrochemicals commodities plunged due tothe economic downturn. A weak demand outlook and rising oil-basedfeedstock costs will continue to adversely affect Eni’sresults of operations and liquidity in this business segment in2013 and possibly beyond.

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> 
***Risks from acquisitions***

Eni constantly monitors the oil and gas market in search ofopportunities to acquire individual assets or companies in orderto achieve its growth targets or complement its asset portfolio.Acquisitions entail an execution risk – a significant risk,among other matters, that the acquirer will not be able toeffectively integrate the purchased assets so as to achieveexpected synergies. In addition, acquisitions entail a financialrisk – the risk of not being able to recover the purchasecosts of acquired assets, in case a prolonged decline in themarket prices of oil and natural gas occurs. We also may incurunanticipated costs or assume unexpected liabilities and lossesin connection with companies or assets we acquire. If theintegration and financial risks connected to acquisitionsmaterialize, our financial performance and shareholders’returns may be adversely affected.

 

> 
***Risks deriving from Eni’s exposure to weather    conditions***

Significant changes in weather conditions in Italy and in therest of Europe from year to year may affect demand for naturalgas and some refined products; in colder years, demand is higher.Accordingly, the results of operations of the Gas & Powersegment and, to a lesser extent, the Refining & Marketingsegment, as well as the comparability of results over differentperiods may be affected by such changes in weather conditions. Ingeneral, the effects of climate change could result in lessstable weather patterns, resulting in more severe storms andother weather conditions that could interfere with our operationsand damage our facilities. Furthermore, our operations,particularly offshore production of oil and natural gas, areexposed to extreme weather phenomena that can result in materialdisruption to our operations and consequent loss or damage ofproperties and facilities.

 

> 
***Our crisis management systems may be ineffective***

We have developed contingency plans to continue or recoveroperations following a disruption or incident. An inability torestore or replace critical capacity to an agreed level within anagreed time frame could prolong the impact of any disruption andcould severely affect business and operations. Likewise, we havecrisis management plans and capability to deal with emergenciesat every level of our operations. If we do not respond or are notseen to respond in an appropriate manner to either an external orinternal crisis, our business and operations could be severelydisrupted.

 

> 
***Exposure to financial risk***

Eni’s business activities are inherently exposed tofinancial risk. This includes exposure to the market risk,including commodity price risk, interest rate risk and foreigncurrency risk, as well as liquidity risk, and credit risk.

Our primary source of exposure to financial risk is thevolatility in commodity prices. Generally, the Group does nothedge its strategic exposure to the commodity risk associatedwith its plans to find and develop oil and gas reserves, volumeof gas purchased under its long-term gas purchase contracts whichare not covered by contracted sales, its refining margins andother activities. The Group’s risk management objectives inaddressing commodity risk are to optimize the risk profile of itscommercial activities by effectively managing economic marginsand safeguarding the value of Eni assets. To achieve this, weexecute risk management activities seeking both to hedgeGroup’s exposures and to profit from short-term marketopportunities and trading. The Group’s risk management hasevolved particularly in response to the deep changes occurred inthe competitive landscape of the gas marketing business, gasvolatile margins and development of liquid gas spot markets.

We are engaged in substantial trading and commercialactivities in the physical markets. We also use financialinstruments such as futures, options, over the counter (OTC)forward contracts, market swaps and contracts for differencesrelated to crude oil, petroleum products, natural gas andelectricity in order to manage the commodity risk exposure. Wealso use financial instruments to manage foreign exchange andinterest rate risk.

The Group’s approach to risk management includesidentifying, evaluating and managing the financial risk using atop-down approach whereby the Board of Directors is responsiblefor establishing the Group risk management strategy and settingthe maximum tolerable amounts of risk exposure. The Group’schief executive officer is responsible for implementing the Grouprisk management strategy, while the Group’s chief financialofficer is in charge of defining policies and tools to manage theGroup’s exposure to financial risk, as well as monitoringand reporting activities. Various Groups’ committees are incharge of defining internal criteria, guidelines and targets ofrisk management activities consistent with the strategy andlimits defined at Eni’s top level, to be used by theGroup’s business units, including monitoring and controllingactivities. Although we believe we have established sound riskmanagement procedures, trading activities involve elements offorecasting and Eni is exposed to the risks of market movements,of incurring significant losses if prices develop contrary tomanagement expectations and of default of counterparties.

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> 
***Commodity risk***

Commodity risk is the risk associated with fluctuations in theprice of commodities which may impact the Group’s results ofoperations and cash flow. Exposure to commodity risk is both of astrategic and commercial nature. Generally, the Group does nothedge its strategic exposure to commodity risk. For furtherdiscussion on this issues see paragraph "Changes in crudeoil and natural gas prices may adversely affect Eni’sresults of operations" above and "Item 11 –Quantitative and qualitative disclosures about market risk".

| On the other hand, the Group        actively manages its exposure to commercial risk which        arises when a contractual sale of a commodity has        occurred or it is highly probable that it will occur and        the Group aims at locking in the associated commercial        margin. The Group’s risk management objectives are        to optimize the risk profile of its commercial activities        by effectively managing economic margins and safeguarding        the value of Eni assets. Also, as part of its risk        management activities the Group enters trading activities        in order to seek to profit from short-term market        opportunities. The Group’s risk management has        evolved particularly in response to the deep changes        occurred in the competitive landscape of the gas        marketing business, gas volatile margins and development        of liquid markets to trade spot gas. To achieve those        targets, Eni enters into commodity derivatives        transactions in both commodity and financial markets: |
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (i)  |   | to hedge the risk of        variability in future cash flows on already contracted or        highly probable future sales exposed to commodity risk        depending on the circumstance that costs of supplies may        be indexed to different market and oil benchmarks        compared to the indexing of selling prices. As tight        correlation exists between such commodity derivatives        transactions and underlying physical contracts, those        derivatives are treated in accordance with hedging        accounting in compliance with IAS 39, where possible; and |
|------|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| (ii) |   | to pursue speculative        purposes such as altering the risk profile associated        with a portfolio of contracts (purchase contracts,        transport entitlements, storage capacity) or leveraging        any pricing differences in the marketplace, seeking to        increase margins on existing assets in case of favorable        trends in the commodity pricing environment or seeking a        potential profit based on expectations of trends in        future prices.                                                                                                    |

Furthermore, the Company is implementing strategies ofasset-backed trading in order to maximize the economic value ofthe flexibilities associated with its assets. Price risks relatedto asset backed trading activities are mitigated by the naturalhedge granted by the assets’ availability. 

These derivative contracts entered to for trading purposes maylead to gains as well as losses, which, in each case, may besignificant. Those derivatives are accounted for through profitand loss, resulting in higher volatility in Eni’s operatingprofit, particularly in the gas marketing business.

 

> 
***Exchange rate risk***

Movements in the exchange rate of the euro against the U.S.dollar can have a material impact on Eni’s results ofoperations. Prices of oil, natural gas and refined productsgenerally are denominated in, or linked to, U.S. dollars, while asignificant portion of Eni’s expenses are denominated ineuros. Similarly, prices of Eni’s petrochemical products aregenerally denominated in, or linked to, the euro, whereasexpenses in the Chemical segment are denominated both in eurosand U.S. dollars. Accordingly, a depreciation of the U.S. dollaragainst the euro generally has an adverse impact on Eni’sresults of operations and liquidity because it reduces bookedrevenues by an amount greater than the decrease in U.S.dollar-denominated expenses and may also result in significanttranslation adjustments that impact Eni’s shareholders’equity. The Exploration & Production segment is particularlyaffected by movements in the U.S. dollar versus the euro exchangerates as the U.S. dollar is the functional currency of a largepart of its foreign subsidiaries and therefore movements in theU.S. dollar versus the euro exchange rate affect year-on-yearcomparability of results of operations.

 

> 
***Susceptibility to variations in sovereign rating    risk***

Eni’s credit ratings are potentially exposed to risk inreductions of sovereign credit rating of Italy. On the basis ofthe methodologies used by Standard & Poor’s andMoody’s, a potential downgrade of Italy’s credit ratingmay have a potential knock-on effect on the credit rating ofItalian issuers such as Eni and make it more likely that thecredit rating of the notes or other debt instruments issued bythe Company could be downgraded.

 

> 
***Interest rate risk***

Interest on Eni’s debt is primarily indexed at a spreadto benchmark rates such as the Europe Interbank Offered Rate,"Euribor", and the London Interbank Offered Rate,"Libor". As a consequence, movements in interest ratescan 

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have a material impact on Eni’s finance expense inrespect to its debt. Additionally, spreads offered to the Companymay rise in connection with variations in sovereign rating risksor company rating risks, as well as the general conditions ofcapital markets.

 

> 
***Liquidity risk***

Liquidity risk is the risk that suitable sources of fundingfor the Group may not be available, or the Group is unable tosell its assets on the marketplace in order to meet short-termfinancial requirements and to settle obligations. Such asituation would negatively impact the Group results of operationsand cash flows as it would result in Eni incurring higherborrowing expenses to meet its obligations or, under the worstconditions, the inability of Eni to continue as a going concern.European and global financial markets are currently subject tovolatility amid concerns over the European sovereign debt crisisand weak macroeconomic growth, particularly in the Euro-zone. Ifthere are extended periods of constraints in the financialmarkets, or if we are unable to access the financial markets,including due to our financial position or market sentiment as toour prospects, at a time when cash flows from our businessoperations may be under pressure, our ability to maintain ourlong-term investment program may be impacted with a consequenteffect on our growth rate, and may impact shareholder returns,including dividends or share price.

 

> 
***Credit risk***

Credit risk is the potential exposure of the Group to lossesin case counterparties fail to perform or pay due amounts. Creditrisks arise from both commercial partners and financial ones. Inrecent years, the Group has experienced a higher than normallevel of counterparty failure due to the severity of the economicand financial downturn. In Eni’s 2012 Consolidated FinancialStatements, Eni accrued an allowance against doubtful accountsamounting to euro 164 million, mainly relating to the Gas &Power business. Management believes that this business isparticularly exposed to credit risks due to its large anddiversified customer base which include a large number of middleand small businesses and retail customers who are particularlyimpacted by the current global financial and economic downturn.

 

> 
***Critical accounting estimates***

The preparation of the Consolidated Financial Statementsrequires the use of estimates and assumptions that affect theassets, liabilities, revenues and expenses reported in thefinancial statements, as well as amounts included in the notesthereto, including discussion and disclosure of contingentliabilities. Estimates made are based on complex or subjectivejudgments and past experience and other assumptions deemedreasonable in consideration of the information available at thetime. The accounting policies and areas that require the mostsignificant judgments and estimates to be used in the preparationof the Consolidated Financial Statements are in relation to theaccounting for oil and natural gas activities, specifically thedetermination of proved and proved developed reserves, impairmentof fixed assets, intangible assets and goodwill, asset retirementobligations, business combinations, pensions and otherpost-retirement benefits, recognition of environmentalliabilities and other risk provisions, and recognition ofrevenues in the oilfield services construction and engineeringbusinesses. Although management believes these estimates torepresent the best outcome of the estimation process, actualresults could differ from such estimates, due to, among otherthings, the following factors: uncertainty, lack or limitedavailability of information, availability of new informativeelements, variations in economic conditions such as prices,costs, and other significant factors including evolution intechnologies, industrial practices and standards (e.g. removaltechnologies) and the final outcome of legal, environmental orregulatory proceedings. See "Item 5 – Criticalaccounting estimates".

 

> 
*Digital infrastructure is an important part of    maintaining our operations, and a breach of our digital    security could result in serious damage to business    operations, personal injury, damage to assets, harm to the    environment, breaches of regulations, litigation, legal    liabilities and reparation costs*

The reliability and security of our digital infrastructure arecritical to maintaining the availability of our businessapplications, including the reliable operation of technology inour various business operations and the collection and processingof financial and operational data, as well as the confidentialityof certain third-party information. A breach of our digitalsecurity, either due to intentional actions or due to negligence,could cause serious damage to business operations and, in somecircumstances, could result in injury to people, damage toassets, harm to the environment, breaches of regulations,litigation, legal liabilities and reparation costs.

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> 
*Our auditor, like all other independent registered    public accounting firms operating in Italy, is not permitted    to be subject to inspection by the Public Company Accounting    Oversight Board, and accordingly, investors may be deprived    of the benefits of such inspection*

The independent registered public accounting firm that issuesthe audit reports included in our annual reports filed with theSEC, as auditor of companies that are traded publicly in theUnited States and firms registered with the Public CompanyAccounting Oversight Board, or PCAOB, is required by the laws ofthe United States to undergo regular inspections by the PCAOB toassess its compliance with SEC rules and PCAOB professionalstandards.

Because our auditor is a registered public accounting firm inItaly, a jurisdiction where the PCAOB is currently unable underItalian law to conduct inspections pending the mutual agreementbetween the PCAOB and the Italian authorities, our auditor, likeall other independent registered public accounting firms inItaly, is currently not inspected by the PCAOB. Inspections ofaudit firms that the PCAOB has conducted where allowed haveidentified deficiencies in those firms’ audit procedures andquality control procedures, which may be addressed as part of theinspection process to improve future audit quality. The lack ofPCAOB inspections in Italy prevents the PCAOB from regularlyevaluating our auditor’s audits and quality controlprocedures. As a result, the inability of the PCAOB to conductinspections of auditors in Italy may deprive investors of thebenefits of PCAOB inspections.

 

 

 

 

 

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**Item 4. INFORMATION ON THE COMPANY**

**History and development of the Company**

Eni SpA with its consolidated subsidiaries engages in the oiland gas exploration and production, gas marketing operations,power generation, chemicals, oilfield services and engineeringindustries. Eni has operations in 90 countries and 77,838employees as of December 31, 2012.

Eni, the former Ente Nazionale Idrocarburi, a public lawagency, established by Law No. 136 of February 10, 1953, wastransformed into a joint stock company by Law Decree No. 333published in the Official Gazette of the Republic of Italy No.162 of July 11, 1992 (converted into law on August 8, 1992, byLaw No. 359, published in the Official Gazette of the Republic ofItaly No. 190 of August 13, 1992). The Shareholders’ Meetingof August 7, 1992 resolved that the company be called Eni SpA.Eni is registered at the Companies Register of Rome, register taxidentification number 00484960588, R.E.A. Rome No. 756453. Eni isexpected to remain in existence until December 31, 2100; itsduration can however be extended by resolution of theshareholders.

| Eni’s registered head office is        located at Piazzale Enrico Mattei 1, Rome, Italy        (telephone number: +39-0659821). Eni branches are located        in: |
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| • |   | San Donato Milanese (Milan),        Via Emilia, 1; and     |
|--------|--------|------------------------------------------------------------|
| • |   | San Donato Milanese (Milan),        Piazza Ezio Vanoni, 1. |

| Internet address: eni.com |
|---------------------------|

The name of the agent of Eni in the United States is StefanoLucchini, 485 Madison Avenue, New York, NY 10002.

Eni’s principal segments of operations are describedbelow.

Eni’s Exploration & Production segment engages in oiland natural gas exploration and field development and production,as well as LNG operations in 43 countries, including Italy,Libya, Egypt, Norway, the UK, Angola, Congo, the United States,Kazakhstan, Russia, Algeria, Australia, Venezuela, Iraq andMozambique. In 2012, Eni average daily production amounted to1,631 kBOE/d on an available-for-sale basis. As of December 31,2012, Eni’s total proved reserves amounted to 7,166 mmBOE;proved reserves of subsidiaries totaled 5,667 mmBOE; Eni’sshare of reserves of equity-accounted entities was 1,499 mmBOE.In 2012, Eni’s Exploration & Production segment reportednet sales from operations (including inter-segment sales) of euro35,881 million and operating profit of euro 18,451 million.

Eni’s Gas & Power segment engages in supply, tradingand marketing of gas and electricity, international gas transportactivities, and LNG supply and marketing. This segment alsoincludes the activity of electricity generation that is ancillaryto the marketing of electricity. Following the divestment of astake of 30% less one share in Snam and deconsolidation of the regulatedbusiness of gas infrastructures in Italy effective in 2012, theGas & Power segment includes only results and activities ofthe Marketing of gas and the International transport activity. In2012, Eni’s worldwide sales of natural gas amounted to 95.32BCM, including 2.73 BCM of gas sales made directly by Eni’sExploration & Production segment in Europe and in the UnitedStates. Sales in Italy amounted to 34.78 BCM, while sales inEuropean markets were 51.02 BCM that included 2.73 BCM of gassold to certain importers to Italy. 

Eni produces power and steam at a number of operated sites inItaly with a total installed capacity of 5.3 GW as of December31, 2012. In 2012, sales of power totaled 42.58 TWh. In 2012,Eni’s Gas & Power segment reported net sales fromoperations (including inter-segment sales) of euro 36,200 millionand operating loss of euro 3,221 million.

Eni’s Refining & Marketing segment engages in crudeoil supply, refining and marketing of petroleum products mainlyin Italy and in the rest of Europe. In 2012, processed volumes ofcrude oil and other feedstock amounted to 30.01 mmtonnes andsales of refined products were 48.33 mmtonnes, of which 23.79mmtonnes in Italy. Retail sales of refined products at operatedservice stations amounted to 10.87 mmtonnes including Italy andthe rest of Europe. In 2012, Eni’s retail market share inItaly through its "Eni" and "Agip" brandednetwork of service stations was 31.2%. In 2012, Eni’sRefining & Marketing segment reported net sales fromoperations (including inter-segment sales) of euro 62,656 millionand operating loss of euro 1,303 million.

Eni also engages in commodity risk management and asset backedtrading activities. Through the Trading department of the parentcompany and its wholly-owned subsidiary Eni Trading &Shipping SpA, the Group engages in derivative activitiestargeting the full spectrum of energy commodities on both thephysical and financial trading venues. The objective of thisactivity is both to hedge part of the Group exposure to thecommodity risk and to optimize commercial margins by enteringspeculative derivative transactions. Eni Trading & ShippingSpA and its subsidiaries also provide Group companies with crudeoil and products supply, trading and shipping services. Theresults of this entity are reported within the Gas & Powersegment with regard to the results recorded on commodity riskmanagement activities relating to gas and electricity; while theportion of results which pertains to oil and products tradingderivatives and supply and shipping services are reported withinthe Refining & Marketing segment.

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Eni’s chemical activities include production of olefinsand aromatics, basic intermediate products, polyethylene,polystyrenes, and elastomers. Eni’s chemical operations areconcentrated in Italy and Western Europe. In 2012, Eni sold 3.95mmtonnes of chemical products. In 2012, Eni’s Chemicalsegment reported net sales from operations (includinginter-segment sales) of euro 6,418 million and operating loss ofeuro 683 million.

Eni engages in oilfield services, construction and engineeringactivities through its partially-owned subsidiary Saipem andSaipem’s controlled entities (Eni’s interest being42.91%). Saipem provides a full range of engineering, drillingand construction services to the oil and gas industry anddownstream refining and petrochemicals sectors, mainly in thefield of performing large EPC (engineering, procurement andconstruction) contracts offshore and onshore for the constructionand installation of fixed platforms, sub-sea pipe laying andfloating production systems and onshore industrial complexes. In2012, Eni’s Engineering & Construction segment reportednet sales from operations (including intra-group sales) of euro12,771 million and operating profit of euro 1,433 million.

A list of Eni’s subsidiaries is included as an exhibit tothis Annual Report on Form 20-F.

 

> 
***Strategy***

Eni’s strategy is to grow the Company’s mainbusinesses over both the medium and the long term, with improvingprofitability.

| • |   | In the Exploration &        Production business we plan to grow profitably oil and        gas production and to fully replace produced reserves. We        intend to boost returns by focusing on delivering the        planned projects on time and on budget as well as        increasing the share of operated production in the        Company’s portfolio. Project operatorship enables        the Company to better schedule and control project        execution, expenditures and timely achievement of project        milestones. In addition, the Company plans to seek cost        efficiencies through greater deployment of proprietary        technologies designed to maximize the rate of hydrocarbon        recovery from reservoirs, the reduction of drilling costs        and ongoing operational improvement. This growth strategy        will be underpinned by continuing risk mitigation as we        are exposed to political risks and operational risks        relating to increasingly high complexity of our projects        and environmental challenges. See "Item 3 –        Risk factors – Risks associated with the exploration        and production of oil and natural gas"; |
|--------|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| • |   | We intend to improve the        profitability of our operations in the Gas & Power        segment by renegotiating our long-term supply contracts        in order to enhance the competitiveness of the        Company’s gas offer and to mitigate the take-or-pay        risk to our liquidity as we manage through the downturn.        We plan to retain our market share in Italy and Europe by        leveraging the expected improved costs in procurement and        logistics and effective commercial actions. The return to        profitability will be helped by developing LNG sales in        international markets and optimizing margins by means of        our trading activities;                                                                                                                                                                                                                 |
|--------|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| • |   | Our priority in the Refining        & Marketing segment is to restore profitability        against the backdrop of weak industry fundamentals and an        unfavorable trading environment. We plan to steep up cost        reduction initiatives, energy saving and optimization of        plant operations, in order to drive margin expansions.        Management plans to implement selective capital projects        for upgrading refinery complexity and securing the safety        and reliability of our assets. In the marketing business        in Italy we plan to enhance profitability through a        number of initiatives for improving service quality and        client retention and non-oil profit contribution taking        into account a weak outlook for fuel consumption. Outside        Italy, Eni plans to grow selectively in target European        markets and divest marginal assets; |
| • |   | Our Engineering &        Construction segment is expected to be adversely impacted        by a slowdown in activities due to macroeconomic        headwinds and lower profitability at newly acquired        orders. However we believe that the business remains well        positioned to return to revenue and profitability growth        in the medium term leveraging on technologically-advanced        assets and competencies in engineering and project        management and execution of large and complex oil and gas        developments;                                                                                                                                                                                                                                                                                                                                                                  |
| • |   | In the Chemical segment, we        plan to recover profitability by progressively reducing        the exposure to loss-making commodity chemicals while at        the same time developing innovative and niche        productions. We intend to grow the green chemistry        business leveraging on the ongoing project of converting        the Porto Torres site in a modern plant for the        manufacture of eco-compatible chemical products and to        expand operations in international markets leveraging our        technologies and know-how in the field of elastomers.                                                                                                                                                                                                                                                                                                                                 |

In executing this strategy, management intends to pursueintegration opportunities among segments and within each segmentto strongly focus on efficiency improvement through technologyupgrading, cost efficiencies, commercial and supply optimizationand continuing process streamlining across all segments. Over thenext four years, Eni plans to execute a capital expenditureprogram amounting to euro 56.8 billion to support continuingorganic growth in its segments, mainly the Exploration &Production which will absorb 83% of planned expenditures. Thatamount includes funds destined to joint venture projects andassociates.

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For the full year 2013, management expects a capital budget inline with 2012 (in 2012 capital expenditure from continuingoperations amounted to euro 12.76 billion, while expendituresincurred in joint venture initiatives and other investmentsamounted to euro 0.57 billion).

Eni plans to focus on preserving a balancedand well established financial structure. In 2012, following thedivestment of a significant stake in Snam, which resulted in theexclusion of Snam’s net indebtedness from the Group’sconsolidated financial statements, and the sale of part of theGroup interest in Galp, Eni achieved a stronger balance sheetthan in 2011, in line with the Company’s new businessprofile, more exposed to the Exploration & Productionbusiness. Looking forward, management will seek to maintain theratio of net borrowings to total equity within a target range of0.1-0.3 under the assumption of a Brent price scenario of 90$/BBL flat in the next four year period and other tradingassumptions, as well as the commitments of funding capitalexpenditure plans and implementing the Company’s progressivedividend policy (see "Item 5 – Operating and financialreview and prospects – Management’s expectations ofoperations" and "Item 3 – Risk factors"). 

For fiscal year 2012, management plans to distribute adividend of euro 1.08 a share subject to approval from theGeneral Shareholders’ Meeting scheduled on May 10, 2013; the2012 dividend represents a 4% increase from the previous year. 

Further details on each business segment strategy arediscussed throughout this item. For a description of risks anduncertainties associated with the Company’s outlook, and thecapital expenditure program see "Item 5 – Operating andfinancial review and prospects – Management’sexpectations of operations".

In the next four-year period, Eni plans to make expendituresdedicated to technological research and innovation activitiesamounting to euro 1.1 billion. Management believes thattechnological developments may secure long-term competitiveadvantages to the Company. For more information on Research andDevelopment activity see page 84.

 

> 
***S******ignificant business and    portfolio developments***

| The significant business and portfolio        developments that occurred in 2012 and to date in 2013        were the following: |
|---------------------------------------------------------------------------------------------------------------------------------|

| • |   | On October 15, 2012,        following the satisfaction of certain conditions        precedent, including, in particular, antitrust approval,        we finalized the sale to Cassa Depositi e Prestiti SpA        ("CDP"), an entity controlled by the Italian        Ministry of Economy and Finance, of 1,013,619,522        ordinary shares of Snam SpA, corresponding to 30% less 1        share of the voting shares at a price of euro 3.47 per        share, as provided for by the sale and purchase agreement        dated June 15, 2012. The total consideration of euro        3,517 million was paid for 75% within the balance sheet        date. The remaining 25% amounting to euro 879 million has        been paid on February 28, 2013. The exclusion of Snam        from the Group’s scope of consolidation effective        from the last quarter of 2012 resulted in a reduction of        financial debt by euro 12.45 billion. Prior to the        divestment, Snam had already reimbursed intercompany        loans via third-party financing. The transaction        implements the provisions of Law No. 27/2012, pursuant to        which Eni was mandated to divest the control in Snam in        accordance with Legislative Decree No. 93/2011. Including        the sale of a further 5% interest in Snam to        institutional investors in July 2012, the residual        interest of Eni in Snam equal to 20.2% of the share        capital was accounted as a financial instrument because        Eni cannot exercise the underlying voting rights pursuant        to applicable laws and therefore cannot influence the        financial and operating policy decisions of Snam.        Furthermore, under applicable rules, Eni was mandated to        divest any residual interest in Snam following loss of        control on the entity. In January 2013, Eni finalized the        divestment of a further portion of its interest in Snam        with the placement of euro 1,250 million aggregate        principal amount of senior, unsecured bonds, exchangeable        into ordinary shares of Snam. The bonds have a maturity        of 3 years and pay a coupon of 0.625% per year. The bonds        will be exchangeable into Snam ordinary shares at an        exchange price of euro 4.33 per Snam ordinary share, up        to a maximum of approximately 288.7 million ordinary        shares of Snam, corresponding to approximately 8.54% of        the currently outstanding share capital of Snam. |
|--------|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| • |   | On July 20, 2012, as part of        the agreements signed on March 29, 2012 by Eni and the        other relevant shareholders of the Portuguese company        Galp Energia, Amorim Energia and Caixa Geral de        Depòsitos SA, we sold a 5% interest in Galp Energia to        Amorim Energia. The transaction covered 41.5 million        shares at the price of euro 14.25 a share, for a total        consideration of euro 582 million and a capital gain        registered in profit of euro 288 million. Following the        sale we ceased to be a party to the existing        shareholders’ agreement governing Galp Energia and        our residual interest of 28.34% was stated as a financial        instrument.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |
| • |   | The exploration campaign        carried out in 2012 in the operated Area 4 offshore the        Rovuma basin in Mozambique resulted in a significant discovery at the        Mamba Gas complex. A total of 7 exploration and appraisal        wells were drilled in the area and new, very large        exploration opportunities have been identified at the        Coral and Mamba North-East prospects, which are        independent from Mamba’s structure. In December        2012, Eni signed an agreement with Anadarko Petroleum        Corp establishing basic principles for the coordinated        development of common offshore activities in Area 4,        operated by Eni and Area 1, operated by Anadarko.        Furthermore, we will jointly plan and construct onshore        LNG liquefaction facilities in Northern Mozambique.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |

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| • |   | On June 28, 2012, the        international contractor companies of the final        production sharing agreement of the giant Karachaganak        gas-condensate field and the Republic of Kazakhstan        closed a settlement agreement to all pending claims        relating to the recovery of costs incurred to develop the        field as well as minor tax issues. The contractor        companies divested 10% of their rights and interest in        the project to Kazakhstan’s KazMunaiGas for a $1        billion net cash consideration ($325 million being        Eni’s share). From the effective date, Eni’s        interest in the Karachaganak project has been reduced to        29.25% from the 32.5% previously held. |
|--------|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| • |   | In 2012, Eni has launched a        reorganization to integrate the supply activities of the        Gas & Power and Refining & Marketing segments        together with the trading, risk management and the        wholesale activities of gas and LNG. This integration        will allow Eni to capture opportunities from market        trends and synergies in commodity risk management.                                                                                                                                                                                                                                                                                                                                                        |
| • |   | Eni signed a trilateral        agreement with Korea Gas Corp and the Japanese company        Chubu Electric Power Co for the sale of 28 loads of LNG        corresponding to 1.7 mmtonnes of        LNG in the 2013-2017 period.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |
| • |   | In October 2012, the Green        Refinery project was launched, which targets the        conversion of the Venice plant into a        "bio-refinery" to produce bio-fuels. The        project will involve an estimated investment of        approximately euro 100 million leveraging the Ecofining        technology developed and licensed by Eni. Bio-fuel        production will start from January 1, 2014 and will grow        progressively as new facilities enter into operation. The        new facilities to be built under the project will be        completed in the first half of 2015.                                                                                                                                          |
| • |   | In October 2012, Versalis,        Eni’s chemical subsidiary, signed agreements to        establish two joint ventures with major chemicals        operators in South Korea and Malaysia to build and        operate facilities for the production of elastomers        incorporating Versalis proprietary technologies and        know-how. These initiatives are part of Versalis strategy        of international expansion in Asian markets with        interesting growth prospect where Versalis can leverage        on its technological and industrial leadership in        elastomers.                                                                                                                                                         |

| • |   | In January 2013, Versalis        signed a strategic partnership with Yulex for the        manufacture of bio-rubber materials for consumer, medical        and industrial markets and the construction of an        industrial production complex in Southern Europe. The        partnership will leverage on Yulex’s agronomical        competencies and bio-rubber extraction technologies to        boost Versalis’ green products portfolio.             |
|--------|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| • |   | In March 2013, Eni signed a        Memorandum of Understanding with Pirelli related to        a joint research project for the use of guayule-based        natural rubber in tire production. On an exclusivity        basis, Versalis will provide an innovative range of        guayule-based natural rubber materials, while Pirelli        will carry out trial tests to validate the performance of        the materials for tire production on industrial basis. |

|                                                       |
|------------------------------------------------------------|
| In addition, Eni closed the following        transactions: |

| • |   | In January 2013, Exploration        and Production Sharing Contracts were signed with the        Republic of Cyprus, for Blocks 2, 3 and 9 located in the        Cypriot deep offshore portion of the Levantine Basin,        which encompass an area of around 12,530 square        kilometers, thus marking the entry of Eni in the Country.        Eni was awarded the three blocks whilst leading the        consortium with an 80% interest.                                                                                                                                            |
|--------|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| • |   | In December 2012, Eni signed        an agreement with the Pakistani Authorities and the state        oil and gas company OGDCL for the acquisition of 25% and        the operatorship of the Indus Block G exploration        license. The contractual area is located offshore in        ultra-deep waters and covers approximately 7,500 square        kilometers.                                                                                                                                                                                                                         |
| • |   | In August 2012, Eni and its        partner Vitol signed a Memorandum of Understanding with        the Government of Ghana and Ghana National Petroleum Corp        for the development and marketing of gas reserves        discovered in the Offshore Cape Three Points Block in the        Tano Basin operated by Eni (47.22% interest).                                                                                                                                                                                                                                                   |
| • |   | In August 2012, Eni acquired        a 25% interest in three blocks offshore Liberia covering        an area of 8,145 square kilometers at a maximum water        depth of 3,000 meters. The joint venture is operated by        another international oil company. This operation marks        Eni’s entry into Liberia.                                                                                                                                                                                                                                                                |
| • |   | In July 2012, Eni was        awarded three product sharing contracts by the Government        of Kenya. The contracts relate to the L-21, L-23 and L-24        exploration blocks which are located in the deep and        ultra-deep waters of the Lamu Basin covering an area of        approximately 36,000 square kilometers.                                                                                                                                                                                                                                                            |
| • |   | In June and July 2012, Eni        acquired the operatorship (50% interest) of three        exploration blocks located offshore Vietnam, in the Song        Hong and Phu Khanh basins. The three blocks cover        approximately 21,000 square kilometers of acreage. These        basins are estimated to contain 10% of Vietnam’s        hydrocarbon resources, mainly gas. In January 2013, Eni        and the Vietnamese national oil company PetroVietnam        signed a Memorandum of Understanding for the development        of business opportunities in Vietnam and abroad. |
| • |   | In June 2012, Eni signed a        Share Purchase Agreement with Ukrainian state-owned        National Joint Stock Co, Nak Nadra Ukrayny, and Cadogan        Petroleum Plc to acquire a 50.01% interest and        operatorship of the Ukrainian company Westgasinvest Llc        which currently holds subsoil rights to nine        unconventional (shale) gas license areas in the Lviv        Basin of Ukraine. These licenses cover approximately        3,800 square kilometers of acreage.                                                                                             |

In 2012, capital expenditures of continuing operationsamounted to euro 12,761 million, of which 89% related toExploration & Production, Gas & Power and Refining &Marketing businesses, and primarily related to:(i) development of oil and gas reserves (euro 8,304 million)deployed mainly in Norway, the United States, Congo, Italy,Kazakhstan, Angola and Algeria, and exploration projects (euro1,850 million) carried out mainly in Mozambique, Liberia, Ghana,Indonesia, Nigeria, Angola and Australia; (ii) upgrading of thefleet used in the Engineering & Construction segment(euro 1,011 million); (iii) refining, supply and logistics withprojects designed to improve the conversion rate and flexibility of refineries(euro 622 million), in particular at the Sannazzaro refinery, as

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well as upgrading and rebranding of the refined product retailnetwork (euro 220 million); and (iv) initiatives to improveflexibility of the combined cycle power plants (euro 131million). There were no significant acquisitions in the year.

In 2011, capital expenditures of continuing operationsamounted to euro 11,909 million, of which 88% related toExploration & Production, Gas & Power and Refining &Marketing businesses, and primarily regarded: (i) the developmentof oil and gas reserves (euro 7,357 million) deployed mainly inNorway, Kazakhstan, Algeria, United States, Congo and Egypt, andexploration projects (euro 1,210 million) carried out mainly inAustralia, Angola, Mozambique, Indonesia, Ghana, Egypt, Nigeriaand Norway; (ii) projects aimed at improving the conversioncapacity and flexibility of refineries, and at building andupgrading service stations in Italy and outside Italy (totalingeuro 629 million); and (iii) the upgrading of the fleet used inthe Engineering & Construction segment (euro 1,090 million).There were no significant acquisitions in the year.

In 2010, capital expenditures of continuing operationsamounted to euro 12,450 million, of which 78% related toExploration & Production, Gas & Power and Refining &Marketing businesses, and primarily related to: (i) thedevelopment of oil and gas reserves (euro 8,578 million) deployedmainly in Egypt, Kazakhstan, Congo, United States and Algeria,and exploration projects (euro 1,012 million) carried out mainlyin Angola, Nigeria, United States, Indonesia and Norway; (ii)projects aimed at improving the conversion capacity andflexibility of refineries, and at building and upgrading servicestations in Italy and outside Italy (totaling euro 692 million);and (iii) the upgrading of the fleet used in the Engineering& Construction segment (euro 1,552 million). There were nosignificant acquisitions in the year.

 

**BUSINESS OVERVIEW**

**Exploration & Production**

Eni’s Exploration & Production segment engages in oiland natural gas exploration and field development and production,as well as LNG operations, in 43 countries, including Italy,Libya, Egypt, Norway, the UK, Angola, Congo, the United States,Kazakhstan, Russia, Algeria, Australia, Venezuela, Iraq andMozambique. In 2012, Eni average daily production amounted to1,631 kBOE/d on an available-for-sale basis. As of December 31,2012, Eni’s total proved reserves amounted to 7,166 mmBOE;proved reserves of subsidiaries totaled 5,667 mmBOE; Eni’sshare of reserves of equity-accounted entities stood to 1,499mmBOE.

Eni’s strategy in its Exploration & Productionoperations is to pursue profitable production growth leveragingon its strong asset base and market position in a number of coremineral basins. We plan to achieve a production growth rate ofmore than 4% on average in the 2013-2016 period, based on ourlong-term Brent price assumptions of 90 $/BBL and certain othertrading environment assumptions, including an indication ofEni’s production volume sensitivity to oil prices which aredisclosed under "Item 5 – Management’sexpectations of operations".

Management plans to achieve the target production growth rateby continuing development activities and new project start-ups inthe main areas of operations including North Africa, Sub-SaharanAfrica, Venezuela, the Barents Sea, the Yamal Peninsula,Kazakhstan, Iraq and the Far East, leveraging Eni’s vastknowledge of reservoirs and geological basins, as well astechnical and producing synergies. 65% of these new projects havealready been sanctioned and management plans to reach 90% bythe end of 2013.

Management plans to maximize the production recovery rate atour current fields by counteracting natural field depletion. Thiswill require intense development activities of work-over andinfilling. We expect that continuing technological innovation andcompetence build-up will drive increasing rates of reserverecovery.

Management plans to invest euro 39.9 billion to developreserves over the next four years. An important share of theseexpenditures will be allocated to certain development projectswhich will support the Company’s long-term productionplateau, in particular we plan to start developing the recent gasdiscovery offshore Mozambique and to progress large andcomplex projects in the Barents Sea, Nigeria and Indonesia. Weare also planning to maintain a prevailing share of projectsregulated by production sharing agreements in our portfolio; thiswill shorten the cost recovery in an environment of high crudeoil prices. 

Approximately euro 1.8 billion will be spent to execute development projects throughequity-accounted entities.

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Exploration projects will attract some euro 5.5 billion toappraise the latest discoveries made by the Company and tosupport continuing reserve replacement over the next four years.The most important amounts of exploration expenses will beincurred in Angola, Russia, United States, Nigeria, Egypt, Norwayand Indonesia; important resources will be dedicated to explorenew areas (Kenya, Vietnam, Ukraine and Cyprus) and onunconventional plays. Management plans to achieve a balancebetween exploration projects in conventional fields versusprojects in high risk/high reward basins.

Management believes that in the 2013-2016 period Eni’sexploration and production activities will retain significantrisks relating to our strong presence in countries which webelieve to be politically less stable than OECD Countries and ourexposure to complex projects because they are conducted in harsh,remote and environmentally-sensitive areas (Arctic, Gulf ofMexico, deep offshore, etc.). Management plans to mitigate thoserisks by expanding the geographic reach of our operations andcontinuing deployment of the Eni cooperation model with hostcountries based on the commitment to maximize the benefitsdelivered to local communities by our upstream activities andinvest in initiatives that improve socio-economic standards overthe long term (access to energy, education, health). FurthermoreEni intends to minimize financial exposure in countries withpolitical risk through well-designed agreements and a selectedplan of cash-outs for each project.

Management intends to implement a number of initiatives tosupport profitability in its upstream operations by exercisingtight control on project time schedules and costs and reducingthe time span which is necessary to develop and market reserves.We acknowledge that our results of operations and productionlevels for the year have been adversely impacted by delays andcost overruns at a number of projects. We plan to mitigate thoserisks in the future by: (i) in-sourcing critical engineering andproject management activities also redeploying to other areas keycompetences which will be freed with the start-up of certainstrategic projects and increase direct control and governance onconstruction activities; and (ii) signing framework agreementswith major suppliers, using standardized specifications to speedup pre-award process for critical equipment and plants,increasing focus on supply chain programming to optimize orderflows. We expect that costs to develop and operate fields willincrease in the next years due to sector-specific inflation, andgrowing complexity of new projects. We plan to counteract thosecost increases by leveraging on cost efficiencies associatedwith: (i) increasing the scale of our operations as weconcentrate our resources on larger fields than in the past wherewe plan to achieve economies of scale; (ii) expanding projectswhere we serve as operator. We believe operatorship will enablethe Company to exercise better cost control, effectively managereservoir and production operations, and deploy our safetystandards and procedures to minimize risks; and (iii) applyingour technologies which we believe can reduce drilling andcompletion costs.

We plan to mitigate the operational risk relating to drillingactivities by applying Eni’s rigorous procedures throughoutthe engineering and execution stages, by leveraging onproprietary drilling technologies, excellent skills and know-how,increased control of operations and by deploying technologieswhich we believe to be able to reduce blow-out risks and toenable the Company to respond quickly and effectively in case ofemergencies.

Eni will pursue further growth options by developingunconventional plays, gas-to-LNG projects and integrated gasprojects. Finally, we intend to optimize our portfolio ofdevelopment properties by focusing on areas where our presence iswell established, and divesting non-strategic or marginal assets.

For the year 2013, management plans to spend approximatelyeuro 11 billion in reserves development and exploration projects.

 

> 
***Disclosure of reserves***

> 
***Overview***

The Company has adopted comprehensive classification criteriafor the estimate of proved, proved developed and provedundeveloped oil and gas reserves in accordance with applicableU.S. Securities and Exchange Commission (SEC) regulations, asprovided for in Regulation S-X, Rule 4-10. Proved oil and gasreserves are those quantities of liquids (including condensatesand natural gas liquids) and natural gas which, by analysis ofgeoscience and engineering data, can be estimated with reasonablecertainty to be economically producible from a given dateforward, from known reservoirs, under existing economicconditions, operating methods, and government regulations priorto the time at which contracts providing the right to operateexpire, unless evidence indicates that renewal is reasonablycertain.

Oil and natural gas prices used in the estimate of provedreserves are obtained from the official survey published byPlatt’s Marketwire, except when their calculation derivesfrom existing contractual conditions. Prices are calculated asthe unweighted arithmetic average of the first-day-of-the-monthprice for each month within the 12-month period prior to the endof the reporting period. Prices include consideration of changesin existing prices provided only by contractual arrangements.

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Engineering estimates of the Company’s oil and gasreserves are inherently uncertain. Although authoritativeguidelines exist regarding engineering criteria that have to bemet before estimated oil and gas reserves can be designated as"proved", the accuracy of any reserve estimate is afunction of the quality of available data and engineering andgeological interpretation and evaluation. Consequently, theestimated proved reserves of oil and natural gas may be subjectto future revision and upward and downward revisions may be madeto the previous booking of reserves due to analysis of newinformation.

Proved reserves to which Eni is entitled under concessioncontracts are determined by applying Eni’s share ofproduction to total proved reserves of the contractual area, inrespect of the duration of the relevant mineral right. Provedreserves to which Eni is entitled under PSAs are calculated sothat the sale of production entitlements should cover expensesincurred by the Group to develop a field (Cost Oil) and recognizethe Profit Oil set contractually (Profit Oil). A similar schemeapplies to buy-back and service contracts.

 

> 
***Reserves governance***

Eni retains rigorous control over the process of bookingproved reserves, through a centralized model of reservesgovernance. The Reserves Department of the Exploration &Production Division is entrusted with the task of:(i) ensuring the periodic certification process of provedreserves; (ii) continuously updating the Company’sguidelines on reserves evaluation and classification and theinternal procedures; and (iii) providing training of staffinvolved in the process of reserves estimation. 

Company guidelines have been reviewed by DeGolyer andMacNaughton (D&M), an independent petroleum engineeringcompany, which has stated that those guidelines comply with theSEC rules1. D&M has also stated that the Companyguidelines provide reasonable interpretation of facts andcircumstances in line with generally accepted practices in theindustry whenever SEC rules may be less precise. Whenparticipating in exploration and production activities operatedby others entities, Eni estimates its share of proved reserves onthe basis of the above guidelines.

The process for estimating reserves, as described in theinternal procedure, involves the following roles andresponsibilities: (i) the business unit managers (geographicunits) and Local Reserves Evaluators (LRE) are in charge withestimating and classifying gross reserves including assessingproduction profiles, capital expenditure, operating expenses andcosts related to asset retirement obligations; (ii) the petroleumengineering department at the head office verifies the productionprofiles of such properties where significant changes haveoccurred; (iii) geographic area managers verify the commercialconditions and the progress of the projects; (iv) the Planningand Control Department provides the economic evaluation ofreserves; and (v) the Reserves Department, through the DivisionReserves Evaluators (DRE), provides independent reviews offairness and correctness of classifications carried out by theabove mentioned units and aggregates worldwide reserves data.

The head of the Reserves Department attended the"Politecnico di Torino" and received a Master ofScience degree in Mining Engineering in 1985. She has more than25 years of experience in the oil and gas industry and more than15 years of experience in evaluating reserves.

Staff involved in the reserves evaluation process fulfils theprofessional qualifications requested and maintains the highestlevel of independence, objectivity and confidentiality inaccordance with professional ethics. Reserves Evaluatorsqualifications comply with international standards defined by theSociety of Petroleum Engineers.

 

> 
***Reserves independent evaluation***

Since 1991, Eni has requested qualified independent oilengineering companies to carry out an independent evaluation2of part of its proved reserves on a rotational basis. Thedescription of qualifications of the persons primarilyresponsible for the reserves audit is included in the third partyaudit report3. In the preparation of their reports,independent evaluators rely upon information furnished by Eni,without independent verification, with respect to propertyinterests, production, current costs of operations anddevelopment, sale agreements, prices and other factualinformation and data that were accepted as represented by theindependent evaluators. These data, equally used by Eni in itsinternal process, include logs, directional surveys, core and PVT(Pressure Volume Temperature) analysis, maps, oil/gas/waterproduction/injection data of wells, reservoir studies, technicalanalysis relevant to field performance, long-term developmentplans, future capital and operating costs.

In order to calculate the economic value of Eni’s equityreserves, actual prices applicable to hydrocarbon sales, priceadjustments required by applicable contractual arrangements andother pertinent information are provided by Eni 

----

| (1) | i       | See        "Item 19 – Exhibits" in the Annual Report        on Form 20-F 2009. |
|-----|---------|-----------------------------------------------------------------------------------------------|
| (2) | i       | From 1991 to        2002, DeGolyer and MacNaughton; from 2003, also Ryder        Scott.       |
| (3) |  i | See        "Item 19 – Exhibits".                                               |

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to third party evaluators. In 2012, Ryder Scott Co andDeGolyer and MacNaughton provided an independent evaluation ofapproximately 33% of Eni’s total proved reserves at December31, 20124, confirming, as in previous years, thereasonableness of Eni internal evaluation5.

In the 2010-2012 period, 92% of Eni total proved reserves weresubject to an independent evaluation. As at December 31, 2012,the principal Eni properties not subjected to independentevaluation in the last three years were Bouri and Bu Attifel(Libya) and M’Boundi (Congo).

 

> 
***Summary of proved oil and gas reserves***

The tables below provide a summary of proved oil and gasreserves of the Group companies and its equity-accounted entitiesby geographic area for the three years ended December 31, 2012,2011 and 2010. Net proved reserves are set out in more detailunder the heading "Supplemental oil and gasinformation" on page F-116.

| **HYDROCARBONS******(mmBOE) |   | **Italy** |   | **Rest         of Europe** |   | **North Africa** |   | **Sub-Saharan Africa** |   | **Kazakhstan** |   | **Rest of Asia** |   | **Americas** |   | **Australia and Oceania** |   | **Total reserves** |
|-----------------------------|--------|-----------|--------|----------------------------|--------|------------------|--------|------------------------|--------|----------------|--------|------------------|--------|--------------|--------|---------------------------|--------|--------------------|
|                        |   |           |   |                            |   |                  |   |                        |   |                |   |                  |   |              |   |                           |   |                    |

| **Consolidated subsidiaries**       |   |    |   |    |   |      |   |      |   |      |   |    |   |    |   |    |   |      |
|-------------------------------------|--------|---------|--------|---------|--------|-----------|--------|-----------|--------|-----------|--------|---------|--------|---------|--------|---------|--------|-----------|
| **Year        ended Dec. 31, 2010** |   | **724** |   | **601** |   | **2,096** |   | **1,133** |   | **1,126** |   | **295** |   | **230** |   | **127** |   | **6,332** |
| Developed                           |   | 554     |   | 405     |   | 1,215     |   | 812       |   | 543       |   | 139     |   | 141     |   | 117     |   | 3,926     |
| Undeveloped                         |   | 170     |   | 196     |   | 881       |   | 321       |   | 583       |   | 156     |   | 89      |   | 10      |   | 2,406     |
| **Year ended Dec. 31, 2011**        |   | **707** |   | **630** |   | **2,031** |   | **1,021** |   | **950**   |   | **230** |   | **238** |   | **133** |   | **5,940** |
| Developed                           |   | 540     |   | 374     |   | 1,175     |   | 742       |   | 482       |   | 129     |   | 162     |   | 112     |   | 3,716     |
| Undeveloped                         |   | 167     |   | 256     |   | 856       |   | 279       |   | 468       |   | 101     |   | 76      |   | 21      |   | 2,224     |
| **Year        ended Dec. 31, 2012** |   | **524** |   | **591** |   | **1,915** |   | **1,048** |   | **1,041** |   | **184** |   | **236** |   | **128** |   | **5,667** |
| Developed                           |   | 406     |   | 349     |   | 1,080     |   | 716       |   | 458       |   | 108     |   | 170     |   | 107     |   | 3,394     |
| Undeveloped                         |   | 118     |   | 242     |   | 835       |   | 332       |   | 583       |   | 76      |   | 66      |   | 21      |   | 2,273     |
|                                |   |         |   |         |   |           |   |           |   |           |   |         |   |         |   |         |   |           |
| **Equity-accounted entities**       |   |    |   |    |   |      |   |      |   |      |   |    |   |    |   |    |   |      |
| **Year        ended Dec. 31, 2010** |   |    |   |    |   | **23**    |   | **28**    |   |      |   | **317** |   | **143** |   |    |   | **511**   |
| Developed                           |   |    |   |    |   | 22        |   | 5         |   |      |   | 43      |   | 26      |   |    |   | 96        |
| Undeveloped                         |   |    |   |    |   | 1         |   | 23        |   |      |   | 274     |   | 117     |   |    |   | 415       |
| **Year ended Dec. 31, 2011**        |   |    |   |    |   | **21**    |   | **83**    |   |      |   | **656** |   | **386** |   |    |   | **1,146** |
| Developed                           |   |    |   |    |   | 19        |   | 4         |   |      |   | 5       |   | 26      |   |    |   | 54        |
| Undeveloped                         |   |    |   |    |   | 2         |   | 79        |   |      |   | 651     |   | 360     |   |    |   | 1,092     |
| **Year        ended Dec. 31, 2012** |   |    |   |    |   | **20**    |   | **81**    |   |      |   | **668** |   | **730** |   |    |   | **1,499** |
| Developed                           |   |    |   |    |   | 20        |   |      |   |      |   | 82      |   | 20      |   |    |   | 122       |
| Undeveloped                         |   |    |   |    |   |      |   | 81        |   |      |   | 586     |   | 710     |   |    |   | 1,377     |
|                                |   |         |   |         |   |           |   |           |   |           |   |         |   |         |   |         |   |           |
| **Consolidated subsidiaries**       |   |    |   |    |   |      |   |      |   |      |   |    |   |    |   |    |   |      |
| **and equity-accounted entities**   |   |    |   |    |   |      |   |      |   |      |   |    |   |    |   |    |   |      |
| **Year        ended Dec. 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     |
| Undeveloped                         |   | 170     |   | 196     |   | 882       |   | 344       |   | 583       |   | 430     |   | 206     |   | 10      |   | 2,821     |
| **Year ended Dec. 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     |
| Undeveloped                         |   | 167     |   | 256     |   | 858       |   | 358       |   | 468       |   | 752     |   | 436     |   | 21      |   | 3,316     |
| **Year        ended Dec. 31, 2012** |   | **524** |   | **591** |   | **1,935** |   | **1,129** |   | **1,041** |   | **852** |   | **966** |   | **128** |   | **7,166** |
| Developed                           |   | 406     |   | 349     |   | 1,100     |   | 716       |   | 458       |   | 190     |   | 190     |   | 107     |   | 3,516     |
| Undeveloped                         |   | 118     |   | 242     |   | 835       |   | 413       |   | 583       |   | 662     |   | 776     |   | 21      |   | 3,650     |
|                                |   |         |   |         |   |           |   |           |   |           |   |         |   |         |   |         |   |           |

 

----

| (4) |  i | Includes        Eni’s share of proved reserves of equity-accounted        entities. |
|-----|---------|------------------------------------------------------------------------------------------|
| (5) |  i | See        "Item 19 – Exhibits".                                          |

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| **LIQUIDS**(mmBBL) |   | **Italy** |   | **Rest         of Europe** |   | **North Africa** |   | **Sub-Saharan Africa** |   | **Kazakhstan** |   | **Rest of Asia** |   | **Americas** |   | **Australia and Oceania** |   | **Total reserves** |
|--------------------|--------|-----------|--------|----------------------------|--------|------------------|--------|------------------------|--------|----------------|--------|------------------|--------|--------------|--------|---------------------------|--------|--------------------|
|               |   |           |   |                            |   |                  |   |                        |   |                |   |                  |   |              |   |                           |   |                    |

| **Consolidated subsidiaries**       |   |    |   |    |   |    |   |    |   |    |   |    |   |    |   |   |   |      |
|-------------------------------------|--------|---------|--------|---------|--------|---------|--------|---------|--------|---------|--------|---------|--------|---------|--------|--------|--------|-----------|
| **Year        ended Dec. 31, 2010** |   | **248** |   | **349** |   | **978** |   | **750** |   | **788** |   | **139** |   | **134** |   | **29** |   | **3,415** |
| Developed                           |   | 183     |   | 207     |   | 656     |   | 533     |   | 251     |   | 39      |   | 62      |   | 20     |   | 1,951     |
| Undeveloped                         |   | 65      |   | 142     |   | 322     |   | 217     |   | 537     |   | 100     |   | 72      |   | 9      |   | 1,464     |
| **Year ended Dec. 31, 2011**        |   | **259** |   | **372** |   | **917** |   | **670** |   | **653** |   | **106** |   | **132** |   | **25** |   | **3,134** |
| Developed                           |   | 184     |   | 195     |   | 622     |   | 483     |   | 215     |   | 34      |   | 92      |   | 25     |   | 1,850     |
| Undeveloped                         |   | 75      |   | 177     |   | 295     |   | 187     |   | 438     |   | 72      |   | 40      |   |   |   | 1,284     |
| **Year        ended Dec. 31, 2012** |   | **227** |   | **351** |   | **904** |   | **672** |   | **670** |   | **82**  |   | **154** |   | **24** |   | **3,084** |
| Developed                           |   | 165     |   | 180     |   | 584     |   | 456     |   | 203     |   | 41      |   | 109     |   | 24     |   | 1,762     |
| Undeveloped                         |   | 62      |   | 171     |   | 320     |   | 216     |   | 467     |   | 41      |   | 45      |   |   |   | 1,322     |
|                                |   |         |   |         |   |         |   |         |   |         |   |         |   |         |   |        |   |           |
| **Equity-accounted entities**       |   |    |   |    |   |    |   |    |   |    |   |    |   |    |   |   |   |      |
| **Year        ended Dec. 31, 2010** |   |    |   |    |   | **19**  |   | **6**   |   |    |   | **44**  |   | **139** |   |   |   | **208**   |
| Developed                           |   |    |   |    |   | 18      |   | 4       |   |    |   | 5       |   | 25      |   |   |   | 52        |
| Undeveloped                         |   |    |   |    |   | 1       |   | 2       |   |    |   | 39      |   | 114     |   |   |   | 156       |
| **Year ended Dec. 31, 2011**        |   |    |   |    |   | **17**  |   | **22**  |   |    |   | **110** |   | **151** |   |   |   | **300**   |
| Developed                           |   |    |   |    |   | 16      |   | 4       |   |    |   |    |   | 25      |   |   |   | 45        |
| Undeveloped                         |   |    |   |    |   | 1       |   | 18      |   |    |   | 110     |   | 126     |   |   |   | 255       |
| **Year        ended Dec. 31, 2012** |   |    |   |    |   | **17**  |   | **16**  |   |    |   | **114** |   | **119** |   |   |   | **266**   |
| Developed                           |   |    |   |    |   | 17      |   |    |   |    |   | 8       |   | 19      |   |   |   | 44        |
| Undeveloped                         |   |    |   |    |   |    |   | 16      |   |    |   | 106     |   | 100     |   |   |   | 222       |
|                                |   |         |   |         |   |         |   |         |   |         |   |         |   |         |   |        |   |           |
| **Consolidated subsidiaries**       |   |    |   |    |   |    |   |    |   |    |   |    |   |    |   |   |   |      |
| **and equity-accounted entities**   |   |    |   |    |   |    |   |    |   |    |   |    |   |    |   |   |   |      |
| **Year        ended Dec. 31, 2010** |   | **248** |   | **349** |   | **997** |   | **756** |   | **788** |   | **183** |   | **273** |   | **29** |   | **3,623** |
| Developed                           |   | 183     |   | 207     |   | 674     |   | 537     |   | 251     |   | 44      |   | 87      |   | 20     |   | 2,003     |
| Undeveloped                         |   | 65      |   | 142     |   | 323     |   | 219     |   | 537     |   | 139     |   | 186     |   | 9      |   | 1,620     |
| **Year ended Dec. 31, 2011**        |   | **259** |   | **372** |   | **934** |   | **692** |   | **653** |   | **216** |   | **283** |   | **25** |   | **3,434** |
| Developed                           |   | 184     |   | 195     |   | 638     |   | 487     |   | 215     |   | 34      |   | 117     |   | 25     |   | 1,895     |
| Undeveloped                         |   | 75      |   | 177     |   | 296     |   | 205     |   | 438     |   | 182     |   | 166     |   |   |   | 1,539     |
| **Year        ended Dec. 31, 2012** |   | **227** |   | **351** |   | **921** |   | **688** |   | **670** |   | **196** |   | **273** |   | **24** |   | **3,350** |
| Developed                           |   | 165     |   | 180     |   | 601     |   | 456     |   | 203     |   | 49      |   | 128     |   | 24     |   | 1,806     |
| Undeveloped                         |   | 62      |   | 171     |   | 320     |   | 232     |   | 467     |   | 147     |   | 145     |   |   |   | 1,544     |
|                                |   |         |   |         |   |         |   |         |   |         |   |         |   |         |   |        |   |           |

 

 

 

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| **NATURAL        GAS******(BCF) |   | **Italy** |   | **Rest         of Europe** |   | **North Africa** |   | **Sub-Saharan Africa** |   | **Kazakhstan** |   | **Rest of Asia** |   | **Americas** |   | **Australia and Oceania** |   | **Total reserves** |
|---------------------------------|--------|-----------|--------|----------------------------|--------|------------------|--------|------------------------|--------|----------------|--------|------------------|--------|--------------|--------|---------------------------|--------|--------------------|
|                            |   |           |   |                            |   |                  |   |                        |   |                |   |                  |   |              |   |                           |   |                    |

| **Consolidated subsidiaries**       |   |      |   |      |   |      |   |      |   |      |   |      |   |      |   |    |   |       |
|-------------------------------------|--------|-----------|--------|-----------|--------|-----------|--------|-----------|--------|-----------|--------|-----------|--------|-----------|--------|---------|--------|------------|
| **Year        ended Dec. 31, 2010** |   | **2,644** |   | **1,401** |   | **6,207** |   | **2,127** |   | **1,874** |   | **871**   |   | **530**   |   | **544** |   | **16,198** |
| 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      |
| **Year ended Dec. 31, 2011**        |   | **2,491** |   | **1,425** |   | **6,190** |   | **1,949** |   | **1,648** |   | **685**   |   | **590**   |   | **604** |   | **15,582** |
| Developed                           |   | 1,977     |   | 995       |   | 3,070     |   | 1,437     |   | 1,480     |   | 528       |   | 385       |   | 491     |   | 10,363     |
| Undeveloped                         |   | 514       |   | 430       |   | 3,120     |   | 512       |   | 168       |   | 157       |   | 205       |   | 113     |   | 5,219      |
| **Year        ended Dec. 31, 2012** |   | **1,633** |   | **1,317** |   | **5,558** |   | **2,061** |   | **2,038** |   | **562**   |   | **449**   |   | **572** |   | **14,190** |
| Developed                           |   | 1,325     |   | 925       |   | 2,720     |   | 1,429     |   | 1,401     |   | 372       |   | 334       |   | 459     |   | 8,965      |
| Undeveloped                         |   | 308       |   | 392       |   | 2,838     |   | 632       |   | 637       |   | 190       |   | 115       |   | 113     |   | 5,225      |
|                                |   |           |   |           |   |           |   |           |   |           |   |           |   |           |   |         |   |            |
| **Equity-accounted entities**       |   |      |   |      |   |      |   |      |   |      |   |      |   |      |   |    |   |       |
| **Year        ended Dec. 31, 2010** |   |      |   |      |   | **24**    |   | **118**   |   |      |   | **1,520** |   | **22**    |   |    |   | **1,684**  |
| Developed                           |   |      |   |      |   | 22        |   | 4         |   |      |   | 214       |   | 6         |   |    |   | 246        |
| Undeveloped                         |   |      |   |      |   | 2         |   | 114       |   |      |   | 1,306     |   | 16        |   |    |   | 1,438      |
| **Year ended Dec. 31, 2011**        |   |      |   | **2**     |   | **20**    |   | **338**   |   |      |   | **3,033** |   | **1,307** |   |    |   | **4,700**  |
| Developed                           |   |      |   |      |   | 17        |   | 4         |   |      |   | 24        |   | 8         |   |    |   | 53         |
| Undeveloped                         |   |      |   | 2         |   | 3         |   | 334       |   |      |   | 3,009     |   | 1,299     |   |    |   | 4,647      |
| **Year        ended Dec. 31, 2012** |   |      |   |      |   | **16**    |   | **353**   |   |      |   | **3,043** |   | **3,355** |   |    |   | **6,767**  |
| Developed                           |   |      |   |      |   | 16        |   |      |   |      |   | 402       |   | 6         |   |    |   | 424        |
| Undeveloped                         |   |      |   |      |   |      |   | 353       |   |      |   | 2,641     |   | 3,349     |   |    |   | 6,343      |
|                                |   |           |   |           |   |           |   |           |   |           |   |           |   |           |   |         |   |            |
| **Consolidated subsidiaries**       |   |      |   |      |   |      |   |      |   |      |   |      |   |      |   |    |   |       |
| **and equity-accounted entities**   |   |      |   |      |   |      |   |      |   |      |   |      |   |      |   |    |   |       |
| **Year        ended Dec. 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     |
| Undeveloped                         |   | 583       |   | 298       |   | 3,109     |   | 691       |   | 253       |   | 1,617     |   | 115       |   | 5       |   | 6,671      |
| **Year ended Dec. 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     |
| Undeveloped                         |   | 514       |   | 432       |   | 3,123     |   | 846       |   | 168       |   | 3,166     |   | 1,504     |   | 113     |   | 9,866      |
| **Year        ended Dec. 31, 2012** |   | **1,633** |   | **1,317** |   | **5,574** |   | **2,414** |   | **2,038** |   | **3,605** |   | **3,804** |   | **572** |   | **20,957** |
| Developed                           |   | 1,325     |   | 925       |   | 2,736     |   | 1,429     |   | 1,401     |   | 774       |   | 340       |   | 459     |   | 9,389      |
| Undeveloped                         |   | 308       |   | 392       |   | 2,838     |   | 985       |   | 637       |   | 2,831     |   | 3,464     |   | 113     |   | 11,568     |
|                                |   |           |   |           |   |           |   |           |   |           |   |           |   |           |   |         |   |            |

Volumes of oil and natural gas applicable to long-term supplyagreements with foreign governments in mineral assets where Eniis operator totaled 648 mmBOE as of December 31, 2012 (647 and683 mmBOE as of December 31, 2011 and 2010, respectively). Saidvolumes are not included in reserves volumes shown in the tableherein.

|   | **Subsidiaries** |   | **Equity-accounted        entities** |
|--------|------------------|--------|--------------------------------------|
|   |                  |   |                                      |

|   | **2010** |   | **2011** |   | **2012** |   | **2010** |   | **2011** |   | **2012** |
|--------|----------|--------|----------|--------|----------|--------|----------|--------|----------|--------|----------|
|   |          |   |          |   |          |   |          |   |          |   |          |

|   | **(mmBOE)** |
|--------|-------------|

| Additions to proved reserves                               |   | 776    |   |   | 176    |   |   | 337    |   |   | 158    |   |   | 644    |   |   | 366    |   |
|------------------------------------------------------------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|
| *of        which purchases and sales of reserves-in-place* |   | *(12*  | *)*    |   | *(7*   | *)*    |   | *(212* | *)*    |   |   |   |   |   |   |   | *(38*  | *)*    |
| Production for the year                                    |   | (653   | )      |   | (568   | )      |   | (610   | )      |   | (9     | )      |   | (9     | )      |   | (13    | )      |
|                                                       |   |        |        |   |        |        |   |        |        |   |        |        |   |        |        |   |        |        |
|                                                       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |

|   | **Subsidiaries and        equity-accounted entities** |
|--------|-------------------------------------------------------|
|   |                                                       |

|   | **2010** |   | **2011** |   | **2012** |
|--------|----------|--------|----------|--------|----------|
|   |          |   |          |   |          |

|   | **(%)** |
|--------|---------|

| Proved reserves replacement ratio of        subsidiaries and equity-accounted entities |   | 125 |   | 142 |   | 107 |
|----------------------------------------------------------------------------------------|--------|-----|--------|-----|--------|-----|
|                                                                                   |   |     |   |     |   |     |

Eni’s proved reserves as of December 31, 2012 totaled7,166 mmBOE (liquids 3,350 mmBBL; natural gas 20,957 BCF) andincluded the impact of the gas conversion factor update (40mmBOE). Eni’s proved reserves reported an increase of 80mmBOE, or 1.1%, from December 31, 2011. All sources additions toproved reserves booked in 2012 were 703 mmBOE, of which 337 mmBOEcame from Eni’s subsidiaries and 366 mmBOE from Eni’sshare of equity-accounted entities.

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In spite of stable Brent prices at $111 per barrel in 2012(also $111 in 2011), all sources additions were adverselyaffected by the unfavorable movements in oil and gas prices onreserves entitlements in certain PSAs and service contracts andin the economics of marginal productions (down 62 mmBOE).

The methods (or technologies) used in the Eni’s provedreserves assessment depend on stage of development, quality andcompleteness of data, and production history availability. Themethods include volumetric estimates, analogies, reservoirmodeling, decline curve analysis or a combination of suchmethods. The data considered for these analyses are obtained froma combination of reliable technologies that produce consistentand repeatable results including well or field measurements (i.e.logs, core samples, pressure information, fluid samples,production test data and performance data) and indirectmeasurements (i.e. seismic data). However for each reservoirassessment the most suitable combination of technologies andmethods is applied providing a high degree of confidence inestablishing reliable reserves estimates.

The reserves replacement ratio achieved by Eni’ssubsidiaries and equity-accounted entities was 107% in 2012 (142%in 2011 and 125% in 2010). The ratio did not include the impactassociated with adoption of a new conversion factor of naturalgas to barrel-of-oil equivalent on the initial balances of provedreserves as of January 1, 2012 estimated at 40 mmBOE asmanagement believes that change did not pertain to theCompany’s reserve performance for the year. The reservesreplacement ratio was calculated by dividing additions to provedreserves by total production, each as derived from the tables ofchanges in proved reserves prepared in accordance with FASBExtractive Activities - Oil & Gas (Topic 932) (see thesupplemental oil and gas information in "Item 18 –Financial Statements"). The reserves replacement ratio is ameasure used by management to assess the extent to which producedreserves in the year are replaced by booked reserves additions.Management considers the reserves replacement ratio to be animportant indicator of the Company’s ability to sustain itsgrowth perspectives. However, this ratio measures pastperformances and is not an indicator of future production becausethe ultimate recovery of reserves is subject to a number of risksand uncertainties. These include the risks associated with thesuccessful completion of large-scale projects, includingaddressing ongoing regulatory issues and completion ofinfrastructures, as well as changes in oil and gas prices,political risks and geological and environmental risks.Specifically, in recent years Eni’s reserves replacementratio has been affected by the impact of changes in hydrocarbonprices on reserves entitlements in the Company’s ProductionSharing Agreements and similar contractual schemes. In accordancewith such contracts, Eni is entitled to a portion of fieldreserves, the sale of which should cover expenditures incurred bythe Company to develop and operate the field. The higher thereference hydrocarbon prices used to determine year-end amountsof Eni’s proved reserves, the lower the number of barrelsnecessary to cover the same amount of expenditures. See"Item 3 – Risks associated with the exploration andproduction of oil and natural gas - Uncertainties in estimates ofoil and natural gas reserves".

The average reserves life index of Eni’s proved reserveswas 11.5 years as of December 31, 2012 (12.3 years as of December31, 2011) which included reserves of both subsidiaries andequity-accounted entities.

 

> 
***Eni’s subsidiaries***

Eni’s subsidiaries added 337 mmBOE of proved oil and gasreserves in 2012 (176 mmBOE in 2011). This comprised 266 mmBBL ofliquids and 224 BCF of natural gas. Additions to proved reservesderived from: (i) revisions of previous estimates were 321 mmBOEmainly reported in Kazakhstan, Nigeria and Egypt; (ii)extensions, discoveries and others were 200 mmBOE, with majorincreases booked in Kazakhstan and Angola; (iii) improvedrecovery were 28 mmBOE mainly reported in Algeria and Nigeria;and (iv) sales of mineral-in-place were 213 mmBOE and resultedfrom the disposals of Snam (in particular the divestment of 139mmBOE of gas storage in Italy) and other non-strategic assets aswell as the change of the working interest in the Karachaganakfield (48 mmBOE).

 

> 
***Eni’s share of equity-accounted entities***

Eni reported an increase of 366 mmBOE in its share ofequity-accounted entities’ proved oil and gas reserves in2012 (644 mmBOE in 2011). This comprised mainly 2,100 BCF ofnatural gas. Additions to proved reserves derived from: (i)revisions of previous estimates were 254 mmBOE mainly reported inVenezuela; (ii) extensions, discoveries and other factors were149 mmBOE, with major increases booked in Venezuela and Russia;and (iii) sales of mineral-in-place were 38 mmBOE resulting fromthe divestment of Galp.

 

> 
***Proved undeveloped reserves***

Proved undeveloped reserves as of December 31, 2012 totaled3,650 mmBOE (including the impact of the gas conversion factorupdate equal to 20 mmBOE). At year end, proved undevelopedreserves of liquids amounted to 1,544 mmBBL, mainly concentratedin Africa and Kazakhstan. Proved undeveloped reserves of naturalgas amounted to 

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11,568 BCF, mainly located in Africa, Russia and Venezuela.Proved undeveloped reserves of consolidated subsidiaries amountedto 1,322 mmBBL of liquids and 5,225 BCF of natural gas.

In 2012, total proved undeveloped reserves increased by 334mmBOE due to new projects sanctions mainly in Venezuela, Angolaand Congo (approximately 438 mmBOE) as well as due to upwards anddownwards revisions mainly related to contractual and technicalrevisions, price effect and portfolio operations.

During 2012, Eni converted 227 mmBOE of proved undevelopedreserves to proved developed reserves due to developmentactivities, production start-ups and revisions. The mainreclassifications to proved developed reserves are related to thefollowing fields/projects: Samburgskoye (Russia), CAFC and MLE(Algeria), Seth (Egypt), Marulk and Tyrihans (Norway),M’Boundi (Congo), Clochas (Angola), Zubair (Iraq) andNikaitchuq (USA).

In 2012, capital expenditure amounted to approximately euro1.9 billion and was made to progress the development of provedundeveloped reserves.

Reserves that remain proved undeveloped for five or more yearsare a result of several factors that affect the timing of theprojects development and execution, such as the complex nature ofthe development project in adverse and remote locations, physicallimitations of infrastructures or plant capacity and contractuallimitations that establish production levels. The Companyestimates that approximately 1.1 BBOE of proved undevelopedreserves have remained undeveloped for five years or more withrespect to the balance sheet date, mainly related to: (i) theKashagan project in Kazakhstan (approximately 0.6 BBOE) wheredevelopment activities are progressing and production start-up istargeted by the end of the first half 2013. Such PUD reserveswill be produced within the limits of the oil processing capacitythat is planned to be available at end of the ongoing developingphase (Phase 1 or Experimental Program). For more detailsregarding this project please refer to part 1, Item 4, page 54,where the project is disclosed; (ii) some Libyan gas fields (0.27BBOE) where development completion and production start-up areplanned according to the delivery obligations set forth in along-term gas supply agreement currently in force. In order tosecure fulfillment of the contractual delivery quantities, Eniwill implement phased production start-up from the relevantfields, which are expected to be put in production over the nextseveral years; and (iii) other projects including a gas assetlocated in Siberia where development activities are progressingand we are targeting production start-up in the short-to-mediumterm (see also our discussion under the "Item 3 – Riskfactors" section about risks associated with oil and gasdevelopment projects on page 9).

Eni remains strongly committed to put these projects intoproduction over the next few years. The length of the developmentperiod is a function of a range of external factors, such as forexample the type of development, the location and physicaloperating environment of the field or the absence ofinfrastructure, considering that the majority of our projects areinfrastructure-driven, and not a function of internal factors,such as an insufficient devotion of resources by Eni or adiminished commitment on the part of Eni to complete the project.

 

> 
***Delivery commitments***

Eni sells crude oil and natural gas from its producingoperations under a variety of contractual obligations. Some ofthese contracts, mostly relating to natural gas, specify thedelivery of fixed and determinable quantities.

Eni is contractually committed under existing contracts oragreements to deliver in the next three years mainly natural gasto third parties for a total of approximately 431 mmBOE fromproducing assets located mainly in Australia, Egypt, Libya,Nigeria, Norway and Russia.

The sales contracts contain a mix of fixed and variablepricing formulas that are generally referenced to the marketprice for crude oil, natural gas or other petroleum products. 

Management believes it can satisfy these contracts fromquantities available from production of the Company’s proveddeveloped reserves and supplies from third parties based onexisting contracts. Production will account for approximately 72%of delivery commitments.

Eni has met all contractual delivery commitments as ofDecember 31, 2012.

 

> 
***Oil and gas production, production prices and    production costs***

*The matters regarding future production, additions toreserves and related production costs and estimated reservesdiscussed below and elsewhere herein are forward-lookingstatements that involve risks and uncertainties that could causethe actual results to differ materially from those in suchforward-looking statements. Such risks and uncertainties relatingto future production and additions to reserves include politicaldevelopments affecting the award*

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*of exploration or production interests or world supply andprices for oil and natural gas, or changes in the underlyingeconomics of certain of Eni’s important hydrocarbonsprojects. Such risks and uncertainties relating to futureproduction costs include delays or unexpected costs incurred inEni’s production operations.*

In 2012, oil and natural gas production available for saleaveraged 1,631 kBOE/d (1,523 kBOE/d in 2011). Production for theyear expressed in barrel-of-oil equivalent was calculatedassuming a natural gas conversion factor which was updated to5,492 CF of gas equaling 1 barrel of oil. On a comparable basis,i.e. when excluding the effect of updating the gas conversionfactor, production reported an increase of 7% for the full year.The performance was driven by an ongoing recovery in Libyanproduction and continuing field start-up and ramp-up mainly inRussia and Australia as well as increased production in Iraq.These positives were partly offset by the temporary shutdown ofthe Elgin/Franklin field (Eni’s interest 21.87%) in the UKdue to a gas leak, losses in Nigeria due to force majeure andmature field declines. 

Liquids production (882 kBBL/d) increased by 37 kBBL/d, or4.4%, due the ramp-up of Libyan production and growth registeredmainly in: (i) Australia, due to the ramp-up of the Kitan field(Eni operator with a 40% interest); and (ii) Iraq, due toincreased production at the Zubair field (Eni’s interest32.8%). Production declined in the United Kingdom and Nigeriafollowing the driver described above and mature field declines,mainly in Angola.

Natural gas production (4,118 mmCF/d) increased by 355 mmCF/d,or 9.4%. The performance was driven by the ramp-up of Libyanproduction and start-ups in: (i) Samburgskoye field (Eni’sinterest 29.4%) in Russia, by means of start-up of the first andthe second train with an expected production level of 95 kBOE/d(28 kBOE/d net to Eni); and (ii) Seth field in the Ras el Barroffshore concession (Eni’s interest 50%) in Egypt.Production plateau is expected at approximately 170 mmCF/d(approximately 11 kBOE/d net to Eni). These positives were partlyoffset by lower production in the United Kingdom and facilitiesdowntime in the United States.

Oil and gas production sold amounted to 598.7 mmBOE. The 23.9mmBOE difference over production (622.6 mmBOE) reflected mainlyvolumes of natural gas consumed in operations (25.5 mmBOE). 

Approximately 57% of liquids production sold (325.4 mmBBL) wasdestined to Eni’s Refining & Marketing Division (ofwhich 25% was processed in Eni’s refineries); about 29% ofnatural gas production sold (1,501 BCF) was destined toEni’s Gas & Power Division.

The tables below provide Eni subsidiaries and itsequity-accounted entities’ production, by final product soldof liquids and natural gas by geographical area of each of thelast three fiscal years.

**LIQUIDS PRODUCTION**

|   |   | **2010** |   | **2011** |   | **2012** |
|--------|--------|----------|--------|----------|--------|----------|
|   |   |          |   |          |   |          |

| (kBBL/d) |   | **Eni consolidated        subsidiaries** |   | **Eni share of        equity-accounted entities** |   | **Eni consolidated        subsidiaries** |   | **Eni share of        equity-accounted entities** |   | **Eni consolidated        subsidiaries** |   | **Eni share of        equity-accounted entities** |
|----------|--------|------------------------------------------|--------|---------------------------------------------------|--------|------------------------------------------|--------|---------------------------------------------------|--------|------------------------------------------|--------|---------------------------------------------------|
|     |   |                                          |   |                                                   |   |                                          |   |                                                   |   |                                          |   |                                                   |

| Italy                        |   | 61      |   |   |   | 64      |   |   |   | 63      |   |   |
|------------------------------|--------|---------|--------|--------|--------|---------|--------|--------|--------|---------|--------|--------|
| Rest of        Europe        |   | 121     |   |   |   | 120     |   |   |   | 95      |   |   |
| North Africa                 |   | 297     |   | 4      |   | 204     |   | 5      |   | 267     |   | 4      |
| Sub-Saharan        Africa    |   | 318     |   | 3      |   | 275     |   | 3      |   | 245     |   | 2      |
| Kazakhstan                   |   | 65      |   |   |   | 64      |   |   |   | 61      |   |   |
| Rest of        Asia          |   | 47      |   | 1      |   | 33      |   | 1      |   | 41      |   | 3      |
| Americas                     |   | 60      |   | 11     |   | 55      |   | 10     |   | 72      |   | 11     |
| Australia        and Oceania |   | 9       |   |   |   | 11      |   |   |   | 18      |   |   |
|                         |   | **978** |   | **19** |   | **826** |   | **19** |   | **862** |   | **20** |
|                         |   |         |   |        |   |         |   |        |   |         |   |        |

 

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**NATURAL GAS PRODUCTION AVAILABLE FOR SALE**(1)

|   |   | **2010** |   | **2011** |   | **2012** |
|--------|--------|----------|--------|----------|--------|----------|
|   |   |          |   |          |   |          |

| (mmCF/d) |   | **Eni consolidated        subsidiaries** |   | **Eni share of        equity-accounted entities** |   | **Eni consolidated        subsidiaries** |   | **Eni share of        equity-accounted entities** |   | **Eni consolidated        subsidiaries** |   | **Eni share of        equity-accounted entities** |
|----------|--------|------------------------------------------|--------|---------------------------------------------------|--------|------------------------------------------|--------|---------------------------------------------------|--------|------------------------------------------|--------|---------------------------------------------------|
|     |   |                                          |   |                                                   |   |                                          |   |                                                   |   |                                          |   |                                                   |

| Italy                        |   | 648       |   |   |   | 648       |   |   |   | 667       |   |   |
|------------------------------|--------|-----------|--------|--------|--------|-----------|--------|--------|--------|-----------|--------|--------|
| Rest of        Europe        |   | 517       |   |   |   | 498       |   |   |   | 421       |   |   |
| North Africa                 |   | 1,556     |   | 3      |   | 1,165     |   | 4      |   | 1,589     |   | 3      |
| Sub-Saharan        Africa    |   | 365       |   |   |   | 422       |   |   |   | 444       |   |   |
| Kazakhstan                   |   | 221       |   |   |   | 212       |   |   |   | 202       |   |   |
| Rest of        Asia          |   | 412       |   | 24     |   | 378       |   | 20     |   | 355       |   | 68     |
| Americas                     |   | 385       |   |   |   | 323       |   |   |   | 273       |   |   |
| Australia        and Oceania |   | 91        |   |   |   | 93        |   |   |   | 96        |   |   |
|                         |   | **4,195** |   | **27** |   | **3,739** |   | **24** |   | **4,047** |   | **71** |
|                         |   |           |   |        |   |           |   |        |   |           |   |        |

----

| (1) |    | It excludes        production volumes of natural gas consumed in operations.        Said volumes were 383, 321 and 318 mmCF/d in 2012, 2011        and 2010, respectively. |
|-----|--------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

Volumes of oil and natural gas purchased under long-termsupply contracts with foreign governments or similar entities inproperties where Eni acts as producer totaled 78 kBOE/d, 28kBOE/d and 105 kBOE/d in 2012, 2011 and 2010, respectively.

The tables below provide Eni subsidiaries and itsequity-accounted entities’ average sales prices per unit ofliquids and natural gas by geographical area for each of the lastthree fiscal years. Also Eni subsidiaries and itsequity-accounted entities’ average production cost per unitof production are provided. The average production cost does notinclude any ad valorem or severance taxes.

**AVERAGE SALES PRICES AND PRODUCTIONCOST PER UNIT OF PRODUCTION**

| ($)    |   | **Italy** |   | **Rest of Europe** |   | **North Africa** |   | **Sub-Saharan Africa** |   | **Kazakhstan** |   | **Rest of Asia** |   | **America** |   | **Australia and Oceania** |   | **Total** |
|--------|--------|-----------|--------|--------------------|--------|------------------|--------|------------------------|--------|----------------|--------|------------------|--------|-------------|--------|---------------------------|--------|-----------|
|   |   |           |   |                    |   |                  |   |                        |   |                |   |                  |   |             |   |                           |   |           |

| **2010**                                |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |       |
|-----------------------------------------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|------------|
| **Consolidated        subsidiaries**    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |       |
| Oil and condensate, per BBL             |   | 72.19  |   | 67.26  |   | 70.96  |   | 78.23  |   | 66.74  |   | 75.20  |   | 72.84  |   | 73.00  |   | **72.95**  |
| Natural        gas, per kCF             |   | 8.71   |   | 7.40   |   | 6.87   |   | 1.87   |   | 0.49   |   | 4.35   |   | 4.70   |   | 7.40   |   | **6.01**   |
| Average production cost, per BOE        |   | 9.42   |   | 9.42   |   | 5.63   |   | 15.19  |   | 6.40   |   | 5.62   |   | 8.15   |   | 9.75   |   | **8.89**   |
| **Equity-accounted        entities**    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |       |
| Oil and condensates, per BBL            |   |   |   |   |   | 16.09  |   | 77.78  |   |   |   | 57.05  |   | 71.70  |   |   |   | **58.86**  |
| Natural        gas, per kCF             |   |   |   |   |   |   |   |   |   |   |   | 9.87   |   |   |   |   |   | **8.73**   |
| Average production cost, per BOE        |   |   |   |   |   | 13.53  |   | 9.73   |   |   |   | 5.05   |   | 27.78  |   |   |   | **17.45**  |
| **2011**                                |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |       |
| **Consolidated subsidiaries**           |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |       |
| Oil and        condensates, per BBL     |   | 101.20 |   | 97.56  |   | 97.63  |   | 110.09 |   | 98.68  |   | 101.09 |   | 101.15 |   | 98.05  |   | **102.47** |
| Natural gas, per kCF                    |   | 11.56  |   | 9.72   |   | 5.95   |   | 1.97   |   | 0.57   |   | 5.27   |   | 4.02   |   | 7.38   |   | **6.44**   |
| Average        production cost, per BOE |   | 11.17  |   | 10.31  |   | 5.96   |   | 18.32  |   | 6.37   |   | 8.28   |   | 12.38  |   | 12.14  |   | **10.86**  |
| **Equity-accounted entities**           |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |       |
| Oil and        condensates, per BBL     |   |   |   | 97.18  |   | 17.98  |   | 108.92 |   |   |   | 74.98  |   | 93.03  |   |   |   | **84.78**  |
| Natural gas, per kCF                    |   |   |   | 10.65  |   | 5.39   |   |   |   |   |   | 15.68  |   |   |   |   |   | **13.89**  |
| Average        production cost, per BOE |   |   |   | 26.91  |   | 10.82  |   | 11.43  |   |   |   | 7.68   |   | 46.77  |   |   |   | **26.76**  |
| **2012**                                |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |       |
| **Consolidated        subsidiaries**    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |       |
| Oil and condensates, per BBL            |   | 100.52 |   | 100.67 |   | 103.63 |   | 108.34 |   | 102.25 |   | 103.44 |   | 85.94  |   | 102.06 |   | **103.06** |
| Natural        gas, per kCF             |   | 10.68  |   | 10.13  |   | 8.13   |   | 2.16   |   | 0.67   |   | 5.94   |   | 2.90   |   | 7.73   |   | **7.14**   |
| Average production cost, per BOE        |   | 11.60  |   | 13.43  |   | 6.28   |   | 18.65  |   | 6.73   |   | 8.37   |   | 10.46  |   | 13.23  |   | **10.82**  |
| **Equity-accounted        entities**    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |       |
| Oil and condensates, per BBL            |   |   |   | 93.11  |   | 17.93  |   | 112.28 |   |   |   | 40.36  |   | 93.45  |   |   |   | **77.94**  |
| Natural        gas, per kCF             |   |   |   | 11.64  |   | 4.91   |   |   |   |   |   | 6.17   |   |   |   |   |   | **6.16**   |
| Average production cost, per BOE        |   |   |   | 30.10  |   | 10.35  |   | 10.60  |   |   |   | 4.37   |   | 46.01  |   |   |   | **20.21**  |
|                                    |   |        |   |        |   |        |   |        |   |        |   |        |   |        |   |        |   |            |

> 
 

***Development activities***

In 2012, a total of 351 development wells were drilled (163.6of which represented Eni’s share) as compared to 407development wells drilled in 2011 (186.1 of which representedEni’s share) and 399 development wells drilled in 2010 (178of which represented Eni’s share). The drilling of 109 wells(36.9 of which represented Eni’s share) is currentlyunderway.

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The table below summarizes the number of the Company’snet interests in productive and dry development wells completedin each of the past three years and the status of theCompany’s development wells in the process of being drilledas of December 31, 2012. A dry well is one found to be incapableof producing either oil or gas in sufficient quantities tojustify completion as an oil or gas well.

**DEVELOPMENT WELL ACTIVITY**

|   |   | **Net wells completed** |   | **Wells in progress at        Dec. 31** |
|--------|--------|-------------------------|--------|-----------------------------------------|
|   |   |                         |   |                                         |

|   |   | **2010** |   | **2011** |   | **2012** |   | **2012** |
|--------|--------|----------|--------|----------|--------|----------|--------|----------|
|   |   |          |   |          |   |          |   |          |

| (units) |   | **Productive** |   | **Dry** |   | **Productive** |   | **Dry** |   | **Productive** |   | **Dry** |   | **Gross** |   | **Net** |
|---------|--------|----------------|--------|---------|--------|----------------|--------|---------|--------|----------------|--------|---------|--------|-----------|--------|---------|
|    |   |                |   |         |   |                |   |         |   |                |   |         |   |           |   |         |

| Italy                                         |   | 23.9      |   | 1.0     |   | 25.3      |   |    |   | 18.0      |   | 1.0     |   | 3.0       |   | 2.6      |
|-----------------------------------------------|--------|-----------|--------|---------|--------|-----------|--------|---------|--------|-----------|--------|---------|--------|-----------|--------|----------|
| Rest of        Europe                         |   | 2.9       |   | 0.2     |   | 3.3       |   | 0.3     |   | 2.9       |   | 0.6     |   | 9.0       |   | 1.8      |
| North Africa                                  |   | 44.3      |   | 0.3     |   | 55.9      |   | 1.1     |   | 46.0      |   | 1.6     |   | 19.0      |   | 8.1      |
| Sub-Saharan        Africa                     |   | 28.0      |   | 2.5     |   | 28.2      |   | 1.0     |   | 27.4      |   | 0.3     |   | 19.0      |   | 4.4      |
| Kazakhstan                                    |   | 1.8       |   |    |   | 1.3       |   |    |   | 1.4       |   |    |   | 16.0      |   | 2.9      |
| Rest of        Asia                           |   | 41.7      |   | 1.8     |   | 39.2      |   | 2.5     |   | 41.2      |   | 0.1     |   | 36.0      |   | 14.2     |
| Americas                                      |   | 27.6      |   | 0.5     |   | 27.6      |   |    |   | 23.1      |   |    |   | 7.0       |   | 2.9      |
| Australia        and Oceania                  |   | 1.5       |   |    |   | 0.4       |   |    |   |      |   |    |   |      |   |     |
| **Total including equity-accounted entities** |   | **171.7** |   | **6.3** |   | **181.2** |   | **4.9** |   | **160.0** |   | **3.6** |   | **109.0** |   | **36.9** |
|                                          |   |           |   |         |   |           |   |         |   |           |   |         |   |           |   |          |

> 
 

***Exploration activities***

In 2012, a total of 60 new exploratory wells were drilled(34.1 of which represented Eni’s share), which includesdrilled exploratory wells that have been suspended pendingfurther evaluation, as compared to 56 exploratory wells drilledin 2011 (28 of which represented Eni’s share) and 47exploratory wells drilled in 2010 (23.8 of which representedEni’s share).

The overall commercial success rate was 40% (40.8% net to Eni)as compared to 42% (38.6% net to Eni) and 41% (39% net to Eni) in2011 and 2010, respectively.

The following table summarizes the Company’s netinterests in productive and dry exploratory wells completed ineach of the last three fiscal years and the number of exploratorywells in the process of being drilled and evaluated as ofDecember 31, 2012. A dry well is one found to be incapable ofproducing either oil or gas in sufficient quantities to justifycompletion as an oil or gas well.

**EXPLORATORY WELL ACTIVITY**

|   |   | **Net wells completed** |   | **Wells in progress         at Dec. 31** (a) |
|--------|--------|-------------------------|--------|----------------------------------------------|
|   |   |                         |   |                                              |

|   |   | **2010** |   | **2011** |   | **2012** |   | **2012** |
|--------|--------|----------|--------|----------|--------|----------|--------|----------|
|   |   |          |   |          |   |          |   |          |

| (units) |   | **Productive** |   | **Dry** |   | **Productive** |   | **Dry** |   | **Productive** |   | **Dry** |   | **Gross** |   | **Net** |
|---------|--------|----------------|--------|---------|--------|----------------|--------|---------|--------|----------------|--------|---------|--------|-----------|--------|---------|
|    |   |                |   |         |   |                |   |         |   |                |   |         |   |           |   |         |

| Italy                                         |   |     |   | 0.5      |   |    |   |     |   | 1.0      |   |     |   | 5.0       |   | 3.4      |
|-----------------------------------------------|--------|----------|--------|----------|--------|---------|--------|----------|--------|----------|--------|----------|--------|-----------|--------|----------|
| Rest of        Europe                         |   | 1.7      |   | 1.1      |   | 0.3     |   | 0.7      |   | 1.0      |   | 1.0      |   | 19.0      |   | 7.2      |
| North Africa                                  |   | 9.3      |   | 8.1      |   | 6.2     |   | 3.4      |   | 6.3      |   | 11.3     |   | 17.0      |   | 11.7     |
| Sub-Saharan        Africa                     |   | 2.3      |   | 4.7      |   | 0.6     |   | 2.6      |   | 4.5      |   | 5.1      |   | 57.0      |   | 24.2     |
| Kazakhstan                                    |   |     |   |     |   |    |   |     |   |     |   | 0.8      |   | 8.0       |   | 1.4      |
| Rest of        Asia                           |   | 1.0      |   | 2.8      |   | 0.2     |   | 7.6      |   | 0.5      |   | 0.6      |   | 27.0      |   | 11.2     |
| Americas                                      |   |     |   | 6.3      |   | 2.5     |   |     |   |     |   | 0.1      |   | 10.0      |   | 2.4      |
| Australia        and Oceania                  |   | 1.0      |   | 0.4      |   |    |   | 1.4      |   |     |   | 0.4      |   | 1.0       |   | 0.5      |
| **Total including equity-accounted entities** |   | **15.3** |   | **23.9** |   | **9.8** |   | **15.7** |   | **13.3** |   | **19.3** |   | **144.0** |   | **62.0** |
|                                          |   |          |   |          |   |         |   |          |   |          |   |          |   |           |   |          |

----

| (a) |   | Includes        temporary suspended wells pending further evaluation. |
|-----|--------|-----------------------------------------------------------------------|

> 
 

***Oil and gas properties, operations and acreage***

As of December 31, 2012, Eni’s mineral right portfolioconsisted of 1,072 exclusive or shared rights for exploration anddevelopment in 43 countries on five continents for a totalacreage of 251,170 square kilometers net to Eni of whichdeveloped acreage of 40,939 square kilometers and undevelopedacreage of 210,231 square kilometers.

42

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In 2012, changes in total net acreage mainly derived from: (i)new leases mainly in China, Indonesia, Kenya, Liberia, Norway,Pakistan and Ukraine for a total acreage of approximately 51,000square kilometers; (ii) partial relinquishment or interestreduction in Algeria, Australia, Egypt, India, Ireland, Nigeria,Timor Leste, the United States, the United Kingdom and Pakistancovering an acreage of approximately 22,000 square kilometers;and (iii) the total relinquishment of leases in Brazil and Malifor a total acreage of approximately 22,000 square kilometers.

The table below provides certain information about theCompany’s oil and gas properties. It provides the totalgross and net developed and undeveloped oil and natural gasacreage in which the Group and its equity-accounted entities hadinterest as of December 31, 2012. A gross acreage is one in whichEni owns a working interest.

|   | **December 31, 2011** |   | **December        31, 2012** |
|--------|-----------------------|--------|------------------------------|
|   |                       |   |                              |

|   |   | **Total net acreage**(a) |   | **Number         of interests** |   | **Gross developed**        (b)**acreage**(a) |   | **Gross undeveloped        acreage**(a) |   | **Total gross acreage**(a) |   | **Net         developed** (b)**acreage**(a) |   | **Net undeveloped********acreage**(a) |   | **Total net acreage**(a) |
|--------|--------|--------------------------|--------|---------------------------------|--------|----------------------------------------------|--------|-----------------------------------------|--------|----------------------------|--------|---------------------------------------------|--------|---------------------------------------|--------|--------------------------|
|   |   |                          |   |                                 |   |                                              |   |                                         |   |                            |   |                                             |   |                                       |   |                          |

| **EUROPE**                       |   | **26,023**  |   | **288**   |   | **17,191**  |   | **27,199**  |   | **44,390**  |   | **11,150** |   | **16,273**  |   | **27,423**  |
|----------------------------------|--------|-------------|--------|-----------|--------|-------------|--------|-------------|--------|-------------|--------|------------|--------|-------------|--------|-------------|
| **Italy**                        |   | **16,872**  |   | **151**   |   | **10,847**  |   | **11,438**  |   | **22,285**  |   | **9,011**  |   | **8,545**   |   | **17,556**  |
| **Rest of Europe**               |   | **9,151**   |   | **137**   |   | **6,344**   |   | **15,761**  |   | **22,105**  |   | **2,139**  |   | **7,728**   |   | **9,867**   |
| Croatia                          |   | 987         |   | 2         |   | 1,975       |   |        |   | 1,975       |   | 987        |   |        |   | 987         |
| Norway                           |   | 2,335       |   | 52        |   | 2,264       |   | 6,226       |   | 8,490       |   | 346        |   | 2,330       |   | 2,676       |
| Poland                           |   | 1,968       |   | 3         |   |        |   | 1,968       |   | 1,968       |   |       |   | 1,968       |   | 1,968       |
| United Kingdom                   |   | 1,014       |   | 65        |   | 2,055       |   | 647         |   | 2,702       |   | 776        |   | 138         |   | 914         |
| Ukraine                          |   | 45          |   | 12        |   | 50          |   | 3,840       |   | 3,890       |   | 30         |   | 1,911       |   | 1,941       |
| Other Countries                  |   | 2,802       |   | 3         |   |        |   | 3,080       |   | 3,080       |   |       |   | 1,381       |   | 1,381       |
| **AFRICA**                       |   | **137,220** |   | **287**   |   | **64,075**  |   | **192,079** |   | **256,154** |   | **19,891** |   | **122,905** |   | **142,796** |
| **North Africa**                 |   | **30,532**  |   | **119**   |   | **31,988**  |   | **17,691**  |   | **49,679**  |   | **14,066** |   | **7,324**   |   | **21,390**  |
| Algeria                          |   | 9,065       |   | 41        |   | 2,640       |   | 1,158       |   | 3,798       |   | 1,071      |   | 161         |   | 1,232       |
| Egypt                            |   | 5,898       |   | 57        |   | 4,937       |   | 7,845       |   | 12,782      |   | 1,771      |   | 2,819       |   | 4,590       |
| Libya                            |   | 13,295      |   | 10        |   | 17,947      |   | 8,688       |   | 26,635      |   | 8,950      |   | 4,344       |   | 13,294      |
| Tunisia                          |   | 2,274       |   | 11        |   | 6,464       |   |        |   | 6,464       |   | 2,274      |   |        |   | 2,274       |
| **Sub-Saharan        Africa**    |   | **106,688** |   | **168**   |   | **32,087**  |   | **174,388** |   | **206,475** |   | **5,825**  |   | **115,581** |   | **121,406** |
| Angola                           |   | 6,218       |   | 78        |   | 4,804       |   | 20,037      |   | 24,841      |   | 636        |   | 5,443       |   | 6,079       |
| Congo                            |   | 5,020       |   | 26        |   | 1,835       |   | 7,681       |   | 9,516       |   | 1,027      |   | 4,008       |   | 5,035       |
| Democratic Republic of Congo     |   | 263         |   | 1         |   |        |   | 478         |   | 478         |   |       |   | 263         |   | 263         |
| Gabon                            |   | 7,615       |   | 6         |   |        |   | 7,615       |   | 7,615       |   |       |   | 7,615       |   | 7,615       |
| Ghana                            |   | 1,885       |   | 2         |   |        |   | 5,144       |   | 5,144       |   |       |   | 1,885       |   | 1,885       |
| Kenya                            |   |        |   | 3         |   |        |   | 35,724      |   | 35,724      |   |       |   | 35,724      |   | 35,724      |
| Liberia                          |   |        |   | 3         |   |        |   | 8,145       |   | 8,145       |   |       |   | 2,036       |   | 2,036       |
| Mozambique                       |   | 9,502       |   | 1         |   |        |   | 12,956      |   | 12,956      |   |       |   | 9,069       |   | 9,069       |
| Nigeria                          |   | 8,491       |   | 41        |   | 25,448      |   | 10,838      |   | 36,286      |   | 4,162      |   | 3,484       |   | 7,646       |
| Togo                             |   | 6,192       |   | 2         |   |        |   | 6,192       |   | 6,192       |   |       |   | 6,192       |   | 6,192       |
| Other Countries                  |   | 61,502      |   | 5         |   |        |   | 59,578      |   | 59,578      |   |       |   | 39,862      |   | 39,862      |
| **ASIA**                         |   | **55,284**  |   | **73**    |   | **17,126**  |   | **101,554** |   | **118,680** |   | **5,778**  |   | **52,264**  |   | **58,042**  |
| **Kazakhstan**                   |   | **880**     |   | **6**     |   | **324**     |   | **4,609**   |   | **4,933**   |   | **95**     |   | **774**     |   | **869**     |
| **Rest of        Asia**          |   | **54,404**  |   | **67**    |   | **16,802**  |   | **96,945**  |   | **113,747** |   | **5,683**  |   | **51,490**  |   | **57,173**  |
| China                            |   | 5,365       |   | 11        |   | 200         |   | 10,456      |   | 10,656      |   | 39         |   | 10,456      |   | 10,495      |
| India                            |   | 9,206       |   | 11        |   | 206         |   | 16,546      |   | 16,752      |   | 109        |   | 6,099       |   | 6,208       |
| Indonesia                        |   | 17,719      |   | 13        |   | 1,735       |   | 28,490      |   | 30,225      |   | 656        |   | 19,078      |   | 19,734      |
| Iran                             |   | 820         |   | 4         |   | 1,456       |   |        |   | 1,456       |   | 820        |   |        |   | 820         |
| Iraq                             |   | 352         |   | 1         |   | 1,074       |   |        |   | 1,074       |   | 352        |   |        |   | 352         |
| Pakistan                         |   | 9,289       |   | 19        |   | 8,430       |   | 20,210      |   | 28,640      |   | 2,478      |   | 8,055       |   | 10,533      |
| Russia                           |   | 1,469       |   | 4         |   | 3,501       |   | 1,495       |   | 4,996       |   | 1,029      |   | 440         |   | 1,469       |
| Timor        Leste               |   | 6,740       |   | 2         |   |        |   | 5,148       |   | 5,148       |   |       |   | 4,118       |   | 4,118       |
| Turkmenistan                     |   | 200         |   | 1         |   | 200         |   |        |   | 200         |   | 200        |   |        |   | 200         |
| Other        Countries           |   | 3,244       |   | 1         |   |        |   | 14,600      |   | 14,600      |   |       |   | 3,244       |   | 3,244       |
| **AMERICAS**                     |   | **10,209**  |   | **409**   |   | **4,571**   |   | **14,180**  |   | **18,751**  |   | **3,074**  |   | **6,001**   |   | **9,075**   |
| Brazil                           |   | 795         |   |      |   |        |   |        |   |        |   |       |   |        |   |        |
| Ecuador                          |   | 1,985       |   | 1         |   | 1,985       |   |        |   | 1,985       |   | 1,985      |   |        |   | 1,985       |
| Trinidad        & Tobago     |   | 66          |   | 1         |   | 382         |   |        |   | 382         |   | 66         |   |        |   | 66          |
| United States                    |   | 5,123       |   | 393       |   | 1,826       |   | 6,206       |   | 8,032       |   | 925        |   | 3,707       |   | 4,632       |
| Venezuela                        |   | 914         |   | 6         |   | 378         |   | 2,427       |   | 2,805       |   | 98         |   | 968         |   | 1,066       |
| Other Countries                  |   | 1,326       |   | 8         |   |        |   | 5,547       |   | 5,547       |   |       |   | 1,326       |   | 1,326       |
| **AUSTRALIA        AND OCEANIA** |   | **25,685**  |   | **15**    |   | **1,980**   |   | **23,102**  |   | **25,082**  |   | **1,046**  |   | **12,788**  |   | **13,834**  |
| Australia                        |   | 25,647      |   | 14        |   | 1,980       |   | 22,338      |   | 24,318      |   | 1,046      |   | 12,750      |   | 13,796      |
| Other        Countries           |   | 38          |   | 1         |   |        |   | 764         |   | 764         |   |       |   | 38          |   | 38          |
| **Total**                        |   | **254,421** |   | **1,072** |   | **104,943** |   | **358,114** |   | **463,057** |   | **40,939** |   | **210,231** |   | **251,170** |
|                             |   |             |   |           |   |             |   |             |   |             |   |            |   |             |   |             |

----

| (a) |    | Square        kilometers.                                                                                                                                        |
|-----|--------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| (b) |    | Developed        acreage refers to those leases in which at least a        portion of the area is in production or encompasses        proved developed reserves. |

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The table below provides the number of gross and netproductive oil and natural gas wells in which the Group companiesand its equity-accounted entities had an interest as of December31, 2012. A gross well is a well in which Eni owns a workinginterest. The number of gross wells is the total number of wellsin which Eni owns a whole or fractional working interest. Thenumber of net wells is the sum of the whole or fractional workinginterests in a gross well. One or more completions in the samebore hole are counted as one well. Productive wells are producingwells and wells capable of production. The total number of oiland natural gas productive wells is 8,512 (3,213.1 of whichrepresent Eni’s share).

**Productive oil and gas wells at Dec. 31, 2012**(a)

|   |   | **Oil wells** |   | **Natural gas wells** |
|--------|--------|---------------|--------|-----------------------|
|   |   |               |   |                       |

| (units) |   | **Gross** |   | **Net** |   | **Gross** |   | **Net** |
|---------|--------|-----------|--------|---------|--------|-----------|--------|---------|
|    |   |           |   |         |   |           |   |         |

| Italy                                         |   | 242.0       |   | 196.1       |   | 621.0       |   | 536.6       |
|-----------------------------------------------|--------|-------------|--------|-------------|--------|-------------|--------|-------------|
| Rest of        Europe                         |   | 460.0       |   | 69.7        |   | 180.0       |   | 89.2        |
| North Africa                                  |   | 1,447.0     |   | 702.3       |   | 154.0       |   | 59.2        |
| Sub-Saharan        Africa                     |   | 2,858.0     |   | 542.2       |   | 383.0       |   | 27.6        |
| Kazakhstan                                    |   | 102.0       |   | 29.1        |   |        |   |        |
| Rest of        Asia                           |   | 642.0       |   | 404.1       |   | 889.0       |   | 336.6       |
| Americas                                      |   | 169.0       |   | 90.5        |   | 344.0       |   | 122.8       |
| Australia        and Oceania                  |   | 7.0         |   | 3.8         |   | 14.0        |   | 3.3         |
| **Total including equity-accounted entities** |   | **5,927.0** |   | **2,037.8** |   | **2,585.0** |   | **1,175.3** |
|                                          |   |             |   |             |   |             |   |             |

----

| (a) |    | Multiple        completion wells included above: approximately 2,203        (747.7 net to Eni). |
|-----|--------------|-------------------------------------------------------------------------------------------------|

Eni’s principal oil and gas properties are describedbelow. In the discussion that follows, references to hydrocarbonproduction are intended to represent hydrocarbon productionavailable for sale.

 

> 
*Italy*

Eni has been operating in Italy since 1926. In2012, Eni’s oil and gas production amounted to 184 kBOE/d.Eni’s activities in Italy are deployed in the Adriatic andIonian Sea, the Central Southern Apennines, mainland and offshoreSicily and the Po Valley. Eni’s exploration and developmentactivities in Italy are regulated by concession contracts (54operated onshore and 61 operated offshore).

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| The Adriatic and Ionian Sea represents        Eni’s main production area for gas, accounting for        50% of Eni’s domestic production in 2012. Main        operated fields are Barbara, Annamaria, Angela-Angelina,        Porto Garibaldi, Cervia, Bonaccia, Luna and Hera Lacinia. |
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|                                                                                                                                                                                                                                                                                              |

| Eni is the operator of the        Val d’Agri concession (Eni’s interest 60.77%)        in the Basilicata Region in Southern Italy. Production        from the Monte Alpi, Monte Enoc and Cerro Falcone fields        is fed by 26 production wells representing 30% of        Eni’s production in Italy and is treated by the        Viggiano oil center. Oil produced is carried to        Eni’s refinery in Taranto via a 136-kilometer long        pipeline. Gas produced is delivered to the national grid        system.
Other main fields are Gela, Ragusa, Tresauro,        Giaurone, Fiumetto and Prezioso in Sicily, which in 2012        accounted for approximately 10% of Eni’s production        in Italy.

The development activity for the year was focused on        maintenance and optimization of producing fields and        existing facilities.

In the Val d’Agri concession the development plan        is ongoing as agreed with the Basilicata Region in 1998.        The construction of a new gas treatment unit started at        the end of 2012, targeting a production capacity of 104        kBBL/d.

Other development activities concerned:        (i) production optimization at the Antonella,        Barbara, Basil, Brenda, Gela, Naomi & Pandora and        Porto Corsini |   |  |
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|--|

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fields; (ii) upgrading of compression and hydrocarbontreatment facilities at the production platform of the Barbarafield; and (iii) linkage to the existing production facilities ofthe Colle Sciarra well (Eni’s interest 50%).

In the medium-term, management expects a stable productionplateau driven by continuing ramp-up at the Val d’Agrifields, new field projects and production optimization activitiesoffsetting mature field declines.

> 
*Rest of Europe*

Eni’s operations in the Rest of Europe are conductedmainly in Croatia, Norway and the UK. In 2012, the Rest of Europeaccounted for 11% of Eni’s total worldwide production of oiland natural gas.

*Croatia.* Eni has been present in Croatia since 1996. In2012, Eni’s production of natural gas averaged 23 mmCF/d.Activities are deployed in the Adriatic Sea near the city ofPula.

Exploration and production activities in Croatia are regulatedby PSAs.

The main producing gas fields are Annamaria, Ivana, Ika &Ida, Ana, Vesna, Irina, Marica and Katarina and are operated byEni through a 50/50 joint operating company with the Croatian oilcompany INA.

*Cyprus.* In January 2013, Exploration and ProductionSharing Contracts were signed with the Republic of Cyprus, forBlocks 2, 3 and 9 located in the Cypriot deep offshore portion ofthe Levantine Basin. The new acreage encompasses an area ofaround 12,530 square kilometers, and marks the entry of Eni inthe Country. Eni was awarded the three blocks as operator with an80% interest.

*Norway.* Eni has been operating in Norway since 1965.Eni’s activities are performed in the Norwegian Sea, in theNorwegian section of the North Sea and in the Barents Sea.Eni’s production in Norway amounted to 123 kBOE/d in 2012.

Exploration and production activities in Norway are regulatedby Production Licenses (PL). According to a PL, the holder isentitled to perform seismic surveys and drilling and productionactivities for a given number of years with possible extensions.

Eni currently holds interests in 10 production areas in theNorwegian Sea. The principal producing fields are Åsgard(Eni’s interest 14.82%), Kristin (Eni’s interest8.25%), Heidrun (Eni’s interest 5.17%), Mikkel (Eni’sinterest 

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14.9%), Tyrihans (Eni’s interest 6.2%), Marulk (Enioperator with a 20% interest) and Morvin (Eni’s interest30%) which in 2012 accounted for 78% of Eni’s production inNorway.

Eni holds interests in 5 production licenses in the Norwegiansection of the North Sea. The main producing field is Ekofisk(Eni’s interest 12.39%) in PL 018, which in 2012 producedapproximately 27 kBOE/d net to Eni and accounted for 22% ofEni’s production in Norway. The license expires in 2028, andnegotiations are ongoing to grant an extension. Activities wereperformed during the year to maintain and optimize the productionrate by means of infilling wells, the development of the SouthArea extension, upgrading of existing facilities and optimizationof water injection.

Eni is currently performing exploration and developmentactivities in the Barents Sea. Operations have been focused ondeveloping the Goliat discovery made in 2000 at a water depth of370 meters in PL 229 (Eni operator with a 65% interest). Thelicense expires in 2042. The project is progressing; theproduction start-up is expected in 2014 with the productionplateau of 100 kBBL/d.

In April 2012, Eni signed with Solveig Gas Norway AS anagreement for the sale of its 1.43% interest in the Gassled JV, anetwork of gas pipelines and terminals for natural gastransportation. The sale was closed at the end of 2012 with aconsideration amount of approximately euro 130 million.

Eni was awarded four exploration licenses: (i) the PL091Dlicense (Eni’s interest 7.9%) in the Norwegian Sea; and (ii)PL697 (Eni operator with a 65% interest), the PL657 (Eni operatorwith an 80% interest) and the PL696 license (Eni’s interest30%) in the Barents Sea.

Exploration activities yielded positive results in the: (i)PL532 license (Eni’s interest 30%) with the appraisalcampaign for the assessment of mineral potential of the oil andgas Skrugard discovery and the new Havis oil and gas discovery.Both fields are planned to be put in production by means of afast-track synergic development; and (ii) PL 533 license(Eni’s interest 40%) with the gas and condensate Salinadiscovery.

*Ukraine.*In June 2012, Eni signed a Share PurchaseAgreement with Ukrainian state-owned National Joint Stock Co, NakNadra Ukrayny, and Cadogan Petroleum Plc to acquire a 50.01%interest and operatorship of the Ukrainian company WestgasinvestLlc which currently holds subsoil rights to nine unconventional(shale) gas license areas in the Lviv Basin of Ukraine. Theselicenses cover approximately 3,800 square kilometers of acreage.

| *United Kingdom.* Eni        has been present in the UK since 1964. Eni’s        activities are carried out in the British section of the        North Sea and the Irish Sea. In 2012, Eni’s net        production of oil and gas averaged 44 kBOE/d.
Exploration        and production activities in the UK are regulated by        concession contracts.

Eni holds interests in 13 production areas; in 1 of        these, the Hewett Area, Eni is operator with an 89%        interest. The other main fields are Elgin/Franklin        (Eni’s interest 21.87%), West Franklin (Eni’s        interest 21.87%), Liverpool Bay (Eni’s interest        53.9%), J Block Area (Eni’s interest 33%), Flotta        Catchment Area (Eni’s interest 20%) and MacCulloch        (Eni’s interest 40%), which in 2012 accounted for        91% of Eni’s production in the UK.

In 2012, Eni signed an agreement for the divestment of        the following development/production assets: Mariner        (Eni’s interest 20%), Andrew (Eni’s interest        16.21%), Kinnoul (Eni’s interest 16.67%), Flotta        Catchment Area (Eni’s interest 20%) and a few minor        ones. At the end of the year the sale of Mariner was        completed. The completion date for the other assets is        expected in 2013. 

Main development activities in 2012 were: (i) the        construction of production and treatment facilities for        the gas and liquids Jasmine field (Eni’s interest        33%). Start-up is expected in 2013; and (ii) the        construction of production platforms and linkage to        nearby treatment facilities for the West Franklin field        (Eni’s interest 21.9%).

During 2012, a gas leak occurred on a well at the        Elgin/Franklin field. Production for the field operated        by an international oil company was stopped at the end of        March. |   |  |
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|--|

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Production resumed during the first quarter of 2013. Theimpact on 2012 production was estimated at approximately 7 mmBBL.

*North Africa*

Eni’s operations in North Africa are conducted inAlgeria, Egypt, Libya and Tunisia. In 2012, North Africaaccounted for 34% of Eni’s total worldwide production of oiland natural gas.

| *Algeria.*Eni has        been present in Algeria since 1981. In 2012, Eni’s        oil and gas production averaged 71 kBOE/d.
Operated and        participated activities are located in the Bir Rebaa area        in the South-Eastern Desert: (i) Blocks 403a/d        (Eni’s interest 100%); (ii) Block Rom North        (Eni’s interest 35%); (iii) Blocks 401a/402a        (Eni’s interest 55%); (iv) Blocks 403 (Eni’s        interest 50%) and 404 (Eni’s interest 12.25%, non        operated); (v) Block 212 (Eni’s interest 22.38%)        with discoveries already made; and (vi) Blocks 208        (Eni’s interest 12.25%, non operated) and 405b        (Eni’s interest 75%) with ongoing development        activities.

Exploration and production activities in Algeria are        regulated by Production Sharing Agreements and concession        contracts.

Production in Block 403a/d and Rom North comes mainly        from the HBN and Rom and satellite fields and represented        approximately 21% of Eni’s production in Algeria in        2012. Zero gas flaring, in compliance with applicable        country law, had been achieved in 2012.

Production in Blocks 401a/402a comes mainly from the        ROD/SFNE and satellite fields and accounted for        approximately 24% of Eni’s production in Algeria in        2012. 

The main fields in Block 403 are BRN, BRW and BRSW        which accounted for approximately 18% of Eni’s        production in Algeria in 2012.

The main fields in Block 404 are HBN and HBNS and        satellites which accounted for approximately 37% of        Eni’s production in Algeria in 2012. |   |  |
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|--|

In 2013, production started at the MLE field part of theMLE-CAFC integrated project in Block 405b (Eni’s interest75%). A natural gas treatment plant started operations with agross production and export capacity of approximately 320 mmCF/dof gas, 15 kBBL/d of oil and condensates and 12 kBBL/d of GPL.Four export pipelines link it to the national grid system.Development activities progressed at the CAFC oil project. Theproject includes the construction of an oil treatment plant andsynergies with the MLE production facilities. Production start-upis expected in 2015. The MLE-CAFC integrated project targets aproduction plateau of approximately 33 kBOE/d net to Eni by 2016.

Block 208 is located South of Bir Rebaa where the El Merkproject is progressing. The development program provides for theconstruction of a gas treatment plant for the liquid extractionwith a gross capacity of approximately 600 mmCF/d, two oil trainswith a gross capacity of 65 kBBL/d each and three exportpipelines targeting a production plateau at approximately 18kBBL/d net to Eni in 2015. Start-up is expected in 2013.

*Egypt.*Eni has been present in Egypt since 1954. In2012, Eni’s share of production in this Country amounted to223 kBOE/d and accounted for 14% of Eni’s total annualhydrocarbon production. Eni’s main producing liquid fieldsare located in the Gulf of Suez, primarily the Belayim field(Eni’s interest 100%), and in the Western Desert mainly theMelehia (Eni’s interest 56%) and the Ras Qattara (Eni’sinterest 75%) concessions. Gas production mainly comes from theoperated or participated concession of North Port Said(Eni’s interest 100%), El Temsah (Eni’s interest 50%),Baltim (Eni’s interest 50%) and Ras el Barr (Eni’sinterest 50%, non operated), located offshore the Nile Delta. In2012, production from these large concessions accounted forapproximately 94% of Eni’s production in Egypt.

Exploration and production activities in Egypt are regulatedby Production Sharing Agreements.

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|  |   | In 2012, Eni started-up the        gas offshore Seth field located in the Ras el Barr        concession (Eni’s interest 50%). Production is        processed at the El Gamil onshore plant. Production        plateau is expected at approximately 170 mmCF/d        (approximately 11 kBOE/d net to Eni).
Other activities        for the year concerned the upgrading of the El Gamil and        Abu Madi plants by adding new compression capacity to        support production.

Through its affiliate Unión Fenosa Gas, Eni has an        indirect interest in the Damietta natural gas        liquefaction plant with a producing capacity of 5.1        mmtonnes/y of LNG corresponding to approximately 268        BCF/y of feed gas. Eni, together with other international        oil company, have entered into an agreement to supply 310        mmCF/d for 17-year period. Natural gas supplies derived        from the Taurt and Denise fields with 17 kBOE/d net to        Eni of feed gas.

Exploration activities yielded positive results in        the: (i) Belayim concession with the BLNE-2 and BMSW-1        oil discoveries that were linked to the existing        facilities; (ii) Nile Delta offshore with the gas        discoveries of Ha’py-12, Taurt North-1, Seth        South-1, Plio-1C and Nile Delta onshore with the El Qara        N-2 gas discovery; (iii) Meleiha development lease        with the Rosa North-1X, Emry Deep 1X and 4X oil        discoveries. The Emry Deep field started-up with        approximately 18 kBBL/d (approximately 6 kBBL/d net to        Eni); and (iv) West Razzak development lease with        the Aghar NN-1X oil discovery. |
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| *Libya.* Eni started        operations in Libya in 1959. In 2012, Eni’s oil and        gas production averaged 252 kBOE/d.
Production activity        is carried out in the Mediterranean Sea near Tripoli and        in the Libyan Desert area and includes six contract        areas. Onshore contract areas are: (i) Area A consisting        in the former concession 82 (Eni’s interest 50%);        (ii) Area B, former concessions 100 (Bu Attifel field)        and the NC 125 Block (Eni’s interest 50%);        (iii) Area E with El Feel (Elephant) field        (Eni’s interest 33.3%); and (iv) Area F with Block        118 (Eni’s interest 50%). Offshore contract areas        are: (i) Area C with the Bouri oil field (Eni’s        interest 50%); and (ii) Area D with Blocks NC 41 and        NC 169 (onshore) that feed the Western Libyan Gas Project        (Eni’s interest 50%). 

In the exploration phase, Eni is operator of four        onshore blocks in the Kufra area (186/1, 2, 3 & 4)        and in the contract Areas A, B and D.

Exploration and production activities in Libya are        regulated by six Exploration and Production Sharing        contracts (EPSA). The licenses of Eni’s assets in        Libya expire in 2042 and 2047 for oil and gas properties,        respectively.

In the Offshore Area D, Eni was the first IOC to        restart exploration activity after revolution, with the        acquisition of about 2,600 square kilometers of 3D        seismic survey from February to April 2012.

The onshore exploration activity was resumed in        December 2012 by drilling the A1-108/4 exploration well        that will reach a total depth of approximately 4,420        meters. This is the first well of an onshore exploration        campaign that will continue in 2013 marking a relevant        step in the full recovery of Eni’s upstream activity        in Libya. |   |        |

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Management plans to complete the recovery of the fullproduction plateau at its Libyan assets in the short term andthen to assess possible options to upgrade certain projects.

*Tunisia.* Eni has been present in Tunisia since 1961. In2012, Eni’s production amounted to 15 kBOE/d. 

Eni’s activities are located mainly in the SouthernDesert areas and in the Mediterranean offshore facing Hammamet.

Exploration and production in this Country are regulated byconcessions.

Production mainly comes from operated Maamoura and Barakaoffshore blocks (Eni’s interest 49%) and the Adam (Enioperator with a 25% interest), Oued Zar (Eni operator with a 50%interest), MLD (Eni’s interest 50%) and El Borma (Eni’sinterest 50%) onshore blocks.

Production optimization was carried out at the Baraka, OuedZar, MLD and Adam fields.

*Sub-Saharan Africa*

Eni’s operations in Sub-Saharan Africa are conductedmainly in Angola, Congo and Nigeria. In 2012, Sub-Saharan Africaaccounted for 20% of Eni’s total worldwide production of oiland natural gas.

*Angola.*Eni has been present in Angola since 1980. In2012, Eni’s production averaged 80 kBOE/d. Eni’sactivities are concentrated in the conventional and deepoffshore.

The main producing blocks with Eni’s participation are:(i) Block 0 in Cabinda (Eni’s interest 9.8%) in the North ofthe Angolan coast; (ii) Development Areas in the former Block 3(Eni’s interest ranging from 12% to 15%) in the offshore ofthe Congo Basin; (iii) Development Areas in the former Block 14(Eni’s interest 20%) in the deep offshore west of Block 0;and (iv) Development Areas in the former Block 15 (Eni’sinterest 20%) in the deep offshore of the Congo Basin. 

| Eni retains interests in        other non-producing concessions, particularly the Lianzi        Development Area (Block 14K/A IMI Unit Area - Eni’s        interest 10%), Block 35/11 (Eni operator with a 35%        interest) and in Block 3/05-A (Eni’s interest 12%),        onshore Cabinda North (Eni’s interest 15%) and the        Open Areas of Block 2 awarded to the Gas Project        (Eni’s interest 20%).
In the exploration and        development phase, Eni operates Block 15/06 (Eni’s        interest 35%), where development is ongoing at the West        Hub project. Project start-up is expected by mid 2014        with production peaking at 84 kBBL/d (25 kBBL/d net to        Eni) in 2016.

Exploration and production activities in Angola are        regulated by concessions and PSAs.

Production started at the satellites Kizomba Phase 1        project in the Development Areas of former Block 15 with        peak production at 72 kBBL/d (12 kBBL/d net to Eni)        expected in 2013.

In 2012, three development projects have been        sanctioned: (i) the second phase of Kizomba satellites.        The project includes the linkage of three additional        discoveries to the existing FPSO. Start-up is expected in        2015; (ii) the Mafumeira field in Area A of Block 0.        Development activities are in progress and start-up is        expected in 2015; and (iii) the Lianzi discovery.

As part of the activities designed to reduce gas        flaring in Block 0, activity progressed at the Nemba        field in Area B, with completion expected in 2014. Once        completed flared gas is expected to decrease by        approximately 85% from current level. Other ongoing        projects include the installation of a second compression        unit at the Nemba platform. |   |  |
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Eni holds a 13.6% interest in the Angola LNG Ltd (A-LNG),consortium responsible for the construction of an LNG plant witha processing capacity of approximately 1.1 BCF/d of natural gas,producing 5.2 mmtonnes/y of LNG and over 50 kBBL/d of condensatesand LPG. The project has been sanctioned by the relevant AngolanAuthorities. It envisages the development of 10,594 BCF of gas in30 years. Exports start-up is expected in 2013. In the year a newagreement has been reached by the partners and local authoritiesfor the sale of LNG on Asian and European markets.

In addition, Eni is part of the Gas Project, a second gasconsortium with the Angolan national company and other partnersthat will explore further potential gas discoveries to supportthe feasibility of a second LNG train or other marketing projectsto monetize gas and associated liquids.

Exploration activities yielded positive results in: (i) Block15/06 with the oil Vandumbu 1 discovery, first commitment well ofthe second exploration period; and (ii) Block 2 with the EteleTampa 7 well containing gas and condensates.

In the medium term, management expects to increase Eni’sproduction to approximately 160 kBBL/d reflecting additions fromongoing development projects.

*Congo.* Eni has been present in Congo since 1968. In2012, production averaged 98 kBOE/d net to Eni. Eni’sactivities are concentrated in the conventional and deep offshorefacing Pointe-Noire and onshore.

Eni’s main operated oil producing interests in Congo arethe Zatchi (Eni’s interest 65%), Loango (Eni’s interest50%), Ikalou (Eni’s interest 100%), Djambala, Foukanda andMwafi (Eni’s interest 65%), Kitina (Eni’s interest35.75%), Awa Paloukou (Eni’s interest 90%), M’Boundi(Eni’s interest 83%), Kouakouala (Eni’s interest 75%),Zingali and Loufika (Eni’s interest 85%) fields.

Other relevant producing areas are a 35% interest in thePointe-Noire Grand Fond, PEX and Likouala permits.

In the exploration phase, Eni also holds interests in the MerTrès Profonde Sud deep offshore block (Eni’s interest 30%),the Noumbi onshore permit (Eni’s interest 37%) and theMarine XII offshore permit (Eni operator with a 65% interest).

|  |   | Exploration and production        activities in Congo are regulated by Production Sharing        Agreements.
Activities on the M’Boundi field moved        forward with the application of Eni advanced recovery        techniques and a design to monetize associated gas within        the activities aimed at zero gas flaring by 2013. Gas is        sold under long-term contracts to power plants in the        area including the CEC Centrale Electrique du Congo        (Eni’s interest 20%) a 300 MW generation capacity.        These facilities will also receive in the future gas from        the offshore discoveries of the Marine XII permit. In        2012, M’Boundi contractual supplies were        approximately 106 mmCF/d (approximately 17 kBOE/d net to        Eni). 

In 2012, the development project for the gas and        condensates Litchendjili field in Block Marine XII has        been sanctioned. The project provides for the        installation of a production platform, the construction        of transport facilities and of an onshore treatment        plant. Production will also feed the CEC power station.

Other activities in the area concerned the        optimization of producing fields of Foukanda and Mwafi by        means of Eni’s enhanced recovery technology.

Exploration activities yielded positive results in        offshore Block Marine XII with the Nene Marine 1 gas        discovery.

In the medium term, management expects to increase        Eni’s production in Congo due to the integration and        development of recently acquired assets as well as        projects underway, targeting a level in excess of 120        kBOE/d by 2016.

*Democratic Republic of Congo.* Eni has been        present in the Democratic Republic of Congo since 2010        where it retains |
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a 55% interest and operatorship in Ndunda Block. At present norelevant activities are conducted in this Country.

*Ghana.*Eni has been present in Ghana since 2009 andcurrently is the operator of the Offshore Cape Three Points(Eni’s interest 47.22%) and Offshore Keta Contract Area(Eni’s interest 35%) exploration permits.

Exploration activities yielded positive results in theOffshore Cape Three Points license with the: (i) Sankofa East-1Xwell, the first commercial oil discovery in the area that flowedat approximately 5 kBBL/d of high quality oil in test production;and (ii) the Sankofa East-2A appraisal well that confirmed thehigh mineral potential of the western area. Studies for a fasttrack commercial development are underway.

In July 2012, Eni and its partners in the OCPT license, signeda Memorandum of Understanding with the Ministry of Energy ofGhana for the development and marketing of discovered gasresources. 

*Kenya.*In July 2012, Eni was awarded three productsharing contracts by the Government of Kenya. The contractsrelate to the L-21, L-23 and L-24 exploration blocks which arelocated in the deep and ultra-deep waters of the Lamu Basincovering an area of approximately 36,000 square kilometers.

*Liberia.* In August 2012, Eni acquired a 25% interest inthree blocks offshore Liberia covering an area of 8,145 squarekilometers at a maximum water depth of 3,000 meters. The jointventure is operated by another international oil company. Thisoperation marks Eni’s entry into Liberia.

*Mozambique.*Eni has been present in Mozambique since2006, following the acquisition of the Area 4 block located inthe offshore Rovuma Basin. The Exploration Period expires in2015, and a 30 years duration is awarded in respect of anyapproved Development and Production Area.

In 2011, Eni made the important Mamba gas discovery.

On March 13, 2013, Eni signed an agreement withCNPC/Petrochina to sell 28.57% of the share capital of thesubsidiary Eni East Africa SpA, which currently owns 70% interestin Area 4 for an agreed price equal to $4,210 million. The dealis subject to approval by relevant authorities. Once finalized,CNPC indirectly acquires, through its 28.57% equity investment inEni East Africa, a 20% interest in Area 4, while Eni will retainthe 50% interest through the remaining controlling stake in EniEast Africa.

In 2012, exploration and appraisal campaigns achieved newexploration successes in Area 4 with the Mamba South 2, MambaNorth 1, Mamba North East 1 and 2 as well as Coral 1 and 2 gasdiscoveries. The latest Mamba North East and Coral discoveriesare particularly significant since they confirm a new explorationplay in Area 4, which is independent from Mamba’s newdiscovery structure. Management believes that this explorationarea contains a large amount of gas resources. The finalinvestment decision is expected in 2014.

In early 2013, a new exploration success was achieved with thedelineation of the Coral 3 gas well that is estimated to improvethe mineral potential of the area operated by Eni. The wells,drilled at the Coral prospect, showed excellent results duringthe production test.

Eni plans to drill a further delineation well, Mamba South 3before moving back to exploration drilling in the Southern sectorof Area 4.

In December 2012, Eni signed an agreement with AnadarkoPetroleum Corp establishing basic principles for the coordinateddevelopment of common offshore activities in Area 4, operated byEni and Area 1, operated by Anadarko. Furthermore, the twocompanies plan to jointly design and construct onshore LNGliquefaction facilities in Northern Mozambique.

*Nigeria.* Eni has been present in Nigeria since 1962. In2012, Eni’s oil and gas production averaged 149 kBOE/dlocated mainly onshore and offshore the Niger Delta.

In 2012, Eni completed the divestment of a 5% stake in BlocksOMLs 30, 34 and 40.

In the development/production phase Eni operates onshore OilMining Leases (OML) 60, 61, 62 and 63 (Eni’s interest 20%)and offshore OPL 245 (Eni’s interest 50%), OML 125(Eni’s interest 85%), holding interests in OML 118(Eni’s interest 12.5%) and in OML 119 and 116 ServiceContracts. As partners of SPDC JV, the largest joint venture inthe Country, Eni also holds a 5% interest in 25 onshore blocksand a 12.86% interest in 5 conventional offshore blocks.

In the exploration phase Eni operates offshore Oil ProspectingLeases (OPL) 244 (Eni’s interest 60%), OML 134 (Eni’sinterest 85%) and OPL 2009 (Eni’s interest 49%); and onshoreOPL 282 (Eni’s interest 90%) and OPL 135 (Eni’sinterest 48%). Eni also holds a 12.5% interest in OML 135.

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Exploration and production activities in Nigeria are regulatedmainly by Production Sharing Agreements and concession contractsas well as service contracts, in two blocks, where Eni acts ascontractor for the state-owned company.

Starting from March 21, 2013, the oil production of the onshoreSwamp area mainly in the Bayelsa State in Nigeria has beentemporarily shut down due to the increasing bunkering andsabotage acts on the oil trunk lines. Currently, the areaproduces from 9 fields through 4 flow stations (Ogbainbiri,Tebidaba, Clough Creek, Obama). A detailed survey of the linesaffected by the bunkering is in progress in order to identify andrepair the damages suffered. 

In service contract OML 119, Phase 2A achieved productionstart-up and is expected to peak at 15 kBBL/d.

In Blocks OMLs 60, 61, 62 and 63, activities progressed tosupport gas production to feed the Bonny liquefaction plant.Development activities concerned the Tuomo gas field aimed atsupplying 170 mmCF/d net to Eni of feed gas to the sixth trainfor 20 years. The flowstation at Ogbainbiri is nearingcompletion. This facility will ensure approximately 310 mmCF/d offeed gas to the fourth and the fifth trains. Flaring down programcontinued with the upgrading of the flowstation at the Idu fieldwith a decline in flared gas of 45 mmCF/d NAOC JV share.

In Block OML 28 (Eni’s interest 5%) the integrated oiland natural gas project in the Gbaran-Ubie area is underway. Thedevelopment plan provides for the construction of a CentralProcessing Facility (CPF) with treatment capacity ofapproximately 1 BCF/d of gas and 120 kBBL/d of liquids in orderto feed gas the Bonny liquefaction plant.

Activities progressed at the Abo Phase 3 project in Block OML125. Start-up is expected in 2013.

Eni holds a 10.4% interest in the Nigeria LNG Ltd which runsthe Bonny liquefaction plant, located in the Eastern Niger Delta.The plant has a design treatment capacity of approximately 1,236BCF/y of feed gas corresponding to a production of 22 mmtonnes/yof LNG on six trains. The seventh unit is being engineered as itis in the planning phase. When fully operational, total capacitywill amount to approximately 30 mmtonnes/y of LNG, correspondingto a feedstock of approximately 1,624 BCF/y. Natural gas suppliesto the plant are provided under gas supply agreements with a20-year term from the SPDC joint venture (Eni’s interest 5%)and the NAOC JV, the latter operating the OMLs 60, 61, 62 and 63blocks with an overall amount of 2,825 mmCF/d (268 mmCF/d net toEni corresponding to 

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approximately 49 kBOE/d). LNG production is sold underlong-term contracts and exported to European and American marketsby the Bonny Gas Transport fleet, wholly owned by Nigeria LNG Co.

Eni holds a 17% interest in Brass LNG Ltd Co for theconstruction of a natural gas liquefaction plant to be built nearthe existing Brass terminal, 100-kilometer west of Bonny. Thisplant is expected to start operating in 2017 with a productioncapacity of 10 mmtonnes/y of LNG corresponding to 590 BCF/y(approximately 45 net to Eni) of feed gas on two trains fortwenty years. Supply to this plant will derive from thecollection of associated gas from nearby producing fields andfrom the development of gas reserves in the onshore OMLs 60 and61.

Exploration activities yielded positive results in: (i) BlockOPL 282 with the Tinpa 1 well containing oil; and (ii) BlockOPL 2009 with the Afiando 1 and 2 oil wells.

In the medium term, management expects to increase Eni’sproduction in Nigeria to approximately 190 kBOE/d, reflecting thedevelopment of gas reserves.

*Kazakhstan*

Eni has been present in Kazakhstan since 1992. Eni isco-operator of the Karachaganak field and partner in the NorthCaspian Sea Production Sharing Agreement (NCSPSA). In 2012,Eni’s operations in Kazakhstan accounted for 6% of its totalworldwide production of oil and natural gas.

*Kashagan.*Eni holds a 16.81% working interest in theNorth Caspian Sea Production Sharing Agreement (NCSPSA). TheNCSPSA defines terms and conditions for the exploration anddevelopment of the Kashagan field which was discovered in theNorthern section of the contractual area in the year 2000 over anundeveloped area extending for 4,600 square kilometers.Management believes this field contains a large amount ofhydrocarbon resources which will eventually be developed inphases. Development activities are ongoing at the Kashagan field,targeting the production start-up by mid-2013. The NCSPSA willexpire at the end of 2041.

The participating interest in the NCSPSA has been redefined,effective as of January 1, 2008, in line with an agreement signedin October 2008 with Kazakh Authorities which proportionallydiluted the participating interest of the international companiesby transferring a 10% stake in the project to the Kazakh nationaloil company, KazMunaiGas. In addition to Eni, the partners of theconsortium are the Kazakh national oil company, KazMunaiGas, andthe international oil companies Total, Shell and ExxonMobil, eachwith a participating interest currently of 16.81%, ConocoPhillipswith 8.40%, and Inpex with 7.56%.

The exploration and development activities of the Kashaganfield and the other discoveries made in the contractual area areexecuted through an operating model which entails an increasedrole of the Kazakh partner and defines the internationalparties’ responsibilities in executing the subsequentdevelopment phases of the project once they are sanctioned. TheNorth Caspian Operating Co (NCOC) BV, participated by the sevenpartners of the consortium has taken over the operatorship of theproject. Subsequently development, drilling and productionactivities have been delegated by NCOC BV to the main partners ofthe Consortium: Eni has retained the responsibility for thedevelopment of Phase 1 of the project (the so-called"Experimental Program") and, when sanctioned, theonshore part of Phase 2. 

On May 23, 2012, the Consortium partners and the Authority ofthe Republic of Kazakhstan signed an agreement to amend thesanctioned development plan at the Experimental Program of theKashagan field (Amendment 4) which included an update to theproject schedule, a revision of investment estimates and asettlement agreement of all pending claims relating torecoverable costs and other tax matters. The amendment alsoincluded a commercial framework to supply a share of the naturalgas produced from Kashagan to the domestic market and anagreement whereby the international partners of the Consortiumshall finance the share of project cost to be borne by the KazakhKMG partner, in excess to the amounts sanctioned in the originalbudget costs (Amendment 3).

In 2012, the Experimental Program progressed at the last phaseof mechanical completion while commissioning and pre-start upactivities achieved an advanced stage. Production plants areplanned to be handed over to the production organization andtested. Start-up and commercial production is expected by the endof the first half of 2013, as agreed with the Republic ofKazakhstan. 

The Phase 1 (Experimental Program) is targeting an initialproduction capacity of 150 kBBL/d; by 2014 a second treatmenttrain and compression facilities for gas reinjection will becompleted and put online enabling to increase the productioncapacity up to 370 kBBL/d. The partners are planning to furtherincrease available production capacity up to 450 kBBL/d byinstalling additional gas compression capacity for re-injectionin the reservoir. The partners submitted the scheme of thisadditional phase to the relevant Kazakh Authorities and sanctionis expected in 2013 to start-up with the FEED phase.

Management believes that significant capital expenditures willbe required in case the partners of the venture would sanction asecond development phase and possibly other additional phases.Eni will fund those investments in proportion to itsparticipating interest of 16.81%. However, taking into accountthat future development expenditures 

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will be incurred over a long time horizon and subsequent tothe production start-up, management does not expect any materialimpact on the Company’s liquidity or its ability to fundthese capital expenditures. In addition to the expenditures fordeveloping the field, further capital expenditures will berequired to build the infrastructures needed for exporting theproduction to international markets.

As of December 31, 2012, Eni’s proved reserves booked atthe Kashagan field amounted to 568 mmBOE, recording an increasecompared to 2012 reflecting the settlement agreement signed withKazakh Authority whereby Eni will be able to produce and marketvolumes of natural gas from Kashagan.

As of December 31, 2011, Eni’s proved reserves booked forthe Kashagan field amounted to 449 mmBOE, recording a decrease of120 mmBOE compared to 2010 mainly due to a higher Brent markerprice and downward revisions.

As of December 31, 2010, Eni’s proved reserves booked forthe Kashagan field amounted to 569 mmBOE, recording a decrease of19 mmBOE with respect 2009 mainly due to price effect.

As of December 31, 2012, the aggregate costs incurred by Enifor the Kashagan project capitalized in the financial statementsamounted to $7.5 billion (euro 5.7 billion at the EUR/USDexchange rate of December 31, 2012). This capitalized amountincluded: (i) $5.7 billion relating to expenditure incurred byEni for the development of the oilfield; and (ii) $1.8 billionrelating primarily to accrue finance charges and expenditures forthe acquisition of interests in the North Caspian Sea PSAConsortium from exiting partners upon exercise of pre-emptionrights in previous years.

| As of December 31, 2011, the        aggregate costs incurred by Eni for the Kashagan project        capitalized in the Consolidated Financial Statements        amounted to $6.7 billion (euro 5.2 billion at the EUR/USD        exchange rate of December 31, 2011). This capitalized        amount included: (i) $5.1 billion relating to expenditure        incurred by Eni for the development of the oil field; and        (ii) $1.6 billion relating primarily to accrue finance        charges and expenditures for the acquisition of interests        in the North Caspian Sea PSA Consortium from exiting        partners upon exercise of pre-emption rights in previous        years.
*Karachaganak.* Located onshore in West        Kazakhstan, Karachaganak is a liquid and gas field.        Operations are conducted by the Karachaganak Petroleum        Operating Consortium (KPO) and are regulated by a PSA        lasting 40 years, until 2037. Eni and British Gas are        co-operators of the venture. On June 28, 2012, the        international Contracting Companies of the Final        Production Sharing Agreement (FPSA) of the giant        Karachaganak gas-condensate field and the Republic of        Kazakhstan closed a settlement agreement of all pending        claims relating to the recovery of costs incurred to        develop the field and certain tax matters. The        contracting companies transferred 10% of their rights and        interest in the project to Kazakhstan’s KazMunaiGas        for $1 billion net cash consideration ($325 million being        Eni’s share). From the effective date of June 28,        2012, Eni’s interest in the Karachaganak project has        been reduced to 29.25% from the 32.5% previously held.        The agreement also includes the allocation of an        additional 2 mmtonnes/y capacity in the Caspian Pipeline.

In 2012, production of the Karachaganak field averaged        239 kBBL/d of liquids (61 net to Eni) and 788 mmCF/d of        natural gas (202 net to Eni). This field is developed by        producing liquids from the deeper layers of the reservoir        and re-injecting the associated gas in the higher layers.        Approximately 90% of liquid production are stabilized at        the Karachaganak Processing Complex (KPC) with a capacity        of approximately 250 kBBL/d and exported to Western        markets through the Caspian Pipeline Consortium        (Eni’s interest 2%) and the Atyrau-Samara pipeline.        The remaining volumes of non-stabilized liquid production        and associated raw gas not re-injected in the reservoir        are marketed at the Russian terminal in Orenburg. |   |  |
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Phase 3 of the Karachaganak project is currently under study.The project is aimed at further developing gas and condensatesreserves by means of the installation, in stages, of gastreatment plants and re-injection facilities to increase gassales and liquids production. The development plan is currentlyin the phase of technical and marketing definition to bepresented to the relevant Authorities.

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As of December 31, 2012, Eni’s proved reserves booked forthe Karachaganak field amounted to 473 mmBOE, reporting aslightly decrease from 2011 deriving mainly from the divestmentof Eni’s stake in the project, partly offset by upwardsrevisions.

As of December 31, 2011, Eni’s proved reserves booked forthe Karachaganak field amounted to 500 mmBOE based on a 32.5%working interest, corresponding to the pre-divestment share. The57 mmBOE decrease derives from the price effect and production ofthe year in part compensated for upwards revisions.

As of December 31, 2010, Eni’s proved reserves booked forthe Karachaganak field amounted to 557 mmBOE, recording adecrease of 76 mmBOE with respect to 2009 due to price effect andproduction of the year.

*Rest of Asia*

In 2012, Eni’s operations in the rest of Asia accountedfor 8% of its total worldwide production of oil and natural gas.

*China.*Eni has been present in China since 1984 and itsactivities are located in the South China Sea. In 2012,Eni’s production amounted to 9 kBOE/d.

Exploration and production activities in China are regulatedby Production Sharing Agreements.

In March 2013, Eni and CNPC signed a joint study agreement forthe development of the Rongchang Block with shale gas resources,over an area of approximately 2,000 square kilometers, located inthe Sichuan Basin, in China.

Hydrocarbons are produced from the offshore Blocks 16/08 and16/19 through eight platforms connected to an FPSO. Natural gasproduction from the HZ21-1 field is delivered through a sealineto the Zhuhai Terminal and sold to the Chinese National Co CNOOC.Oil is mainly produced from HZ25-4 field (Eni’s interest49%). Activity is operated by the CACT-Operating Group(Eni’s interest 16.33%). 

In April 2012, Eni and CNOOC signed a Production SharingContract for the exploration of offshore Block 30/27, located inthe South China Sea. The exploration commitment provides for theacquisition of a 3D seismic survey and the drilling of one wellto be performed during the first exploration period. Eni will bethe Operator of the project, with a 100% interest. In the case ofa discovery, CNOOC has a back-in right up to 51%.

| *India.* Eni has been        present in India since 2005 and its activities are        located in the offshore Cauvery Basin near the        South-Eastern coast. In 2012, Eni’s production        amounted to 2 kBOE/d.
Production mainly comes from the        PY-1 gas field which is operated by Eni’s subsidiary        Hindustan Oil Exploration Co Ltd (Eni’s interest        47.18%). Gas production is sold to the National oil        company.

*Indonesia.*Eni has been present in Indonesia        since 2001. In 2012, Eni’s production mainly        composed of gas, amounted to 14 kBOE/d. Activities are        concentrated in the Eastern offshore and onshore of East        Kalimantan, offshore Sumatra, and offshore and onshore of        West Timor and West Papua; in total, Eni holds interests        in 13 blocks.

Exploration and production activities in Indonesia are        regulated by PSAs.

In May 2012, Eni was awarded the East Sepinggan Block        (Eni’s interest 100%), located offshore in Kutei        Basin supported by the nearby Bontang LNG processing        facility. The commitment activity foresees performing of        geological and geophysical studies, acquisition of        seismic data and the drilling of one well over the next        three years.

The development plan of the operated Jangkrik        (Eni’s interest 55%) and Jau (Eni’s interest        85%) offshore fields progressed. The Jangkrik project        includes linkage of production wells to a Floating        Production Unit for gas and |   |  |
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|--|

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condensate treatment and the construction of a transportationfacility to the Bontang liquefaction plant. Start-up is expectedin 2016 with a production peak of 80 kBOE/d (41 kBOE/d net toEni). The Jau project provides for the drilling of productionwells and the linkage to onshore plants via pipeline. 

Appraisal activities related to a coal bed methane projectprogressed at the Sanga Sanga PSC (Eni’s interest 37.8%).Predevelopment activities are underway leveraging on the synergyopportunities provided by the existing production and treatmentfacilities also including the Bontang LNG plant. 

Development activities are underway at the Indonesia DeepwaterDevelopment project (Eni’s interest 20%), located in EastKalimantan, to ensure gas supplies to the Bontang plant. Theproject initially provides for the linkage of the Bangka field toexisting facilities, then for the integrated development of fourfields through a first Hub serving Gendalo, Gandang, Maha and asecond Hub for Gehem.

*Iran.*Eni has been operating in Iran for several yearsunder four Service Contracts (South Pars, Darquain, Dorood andBalal, the latter two projects being operated by anotherinternational oil company) entered into with the National IranianOil Co (NIOC) between 1999 and 2001, and no other exploration anddevelopment contracts have been entered into since then. All theabove mentioned projects have been completed or substantiallycompleted; the last one, the Darquain project, is being handedover to NIOC. Operatorship has already been transferred to a NIOCaffiliate. When the final hand over of operations will becompleted, Eni’s involvement will essentially consist ofbeing reimbursed for its past investments. In 2012, Eni’scontractual reimbursement were equivalent to a production of 3kBOE/d, lower than 1% of the Group’s worldwide production.Eni does not believe that its activities in Iran have a materialimpact on the Group’s results. See "Item 3 – Riskfactors – Political consideration – Iran" for afull discussion of risks involved by our presence in Iran.

| *Iraq.*Eni has been        present in Iraq since 2009. Eni, leading a consortium of        partners including international companies and the        national oil company Missan Oil, holds 32.8% interests in        Zubair oil field.
Development and production activities        in Iraq are regulated by a Technical Service Contract.        This contractual term establishes an oil entitlement        mechanism and associated risk profile similar to those        applicable in Production Sharing Contracts.

In 2012, production of the Zubair field averaged 262        kBBL/d (18 kBBL/d net to Eni).

Development activities progressed at the Zubair oil        field. The contracts have been awarded for the first        expansion of the actual production capacity to double the        current production level in 2014. 

*Pakistan.* Eni has been present in Pakistan        since 2000. In 2012, Eni’s production mainly        composed of gas amounted to 55 kBOE/d.

Exploration and production activities in Pakistan are        regulated by concessions (onshore) and PSAs (offshore).

Eni’s main permits in the Country are Bhit (Eni        operator with a 40% interest), Sawan (Eni’s interest        23.68%) and Zamzama (Eni’s interest 17.75%), which        in 2012 accounted for 76% of Eni’s production in        Pakistan.

In December 2012, Eni signed an agreement with the        Pakistani Authorities and the state oil and gas company        OGDCL for the acquisition of a 25% stake and the        operatorship of exploration license Indus Block G,        located in ultra deep water offshore of the Indus Basin        over an area of approximately 7,500 square kilometers. |   |  |
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|        |   | Exploration activity yielded        positive results with a relevant gas discovery in the        onshore concession Badhra Area B. A further outline of        the discovery will require additional wells. 
In 2012,        the Badhra B North-1 well has been linked to the Bhit        plant and started-up in October 2012, flowing at        approximately 14 mmCF/d of gas net to Eni.

*Russia.*Eni has been present in Russia since        2007 following the acquisition of Lot 2 in the        liquidation procedure of bankrupt Russian company Yukos.        Eni acquired a 29.4% interest in the joint venture        Severenergia which currently owns important amounts of        proved undeveloped gas reserves in the Yamal Peninsula in        Siberia.

In 2012, Eni’s production mainly composed of gas        amounted to 11 kBOE/d. Following start-up of the first        and the second train of the Samburgskoye field, a        production level is expected at 95 kBOE/d (28 kBOE/d net        to Eni). Development activities progressed with        completion expected in 2015 and production peak of 146        kBOE/d (43 kBOE/d net to Eni) in 2016. The gas production        is sold to Gazprom under an agreement signed in September        2011 while the condensate production is sold to Novatek        under the relevant agreement signed in 2012. Eni retains        the right to lift its share of natural gas and sell it to        any third parties in the domestic market. |
|--------|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |

| Planned activities        progressed at the sanctioned Urengoiskoye field        (Eni’s interest 29.4%). Start-up is expected in        2014.
In April 2012, Eni and Rosneft signed an        agreement related to a strategic cooperation whereby the        two companies will set up joint ventures (Eni 33.33%) for        the exploration and development of the Fedynsky and        Tsentralno-Barentsevsky licenses, located offshore Russia        in the Barents Sea, and Zapadno-Cernomorsky, located        offshore Russia in the Black Sea. Finalization is        expected in 2013.

*Turkmenistan.* Eni started its activities in        Turkmenistan with the purchase of the British company        Burren Energy plc in 2008. Activities are focused in the        Western part of the Country. In 2012, Eni’s        production averaged 10 kBOE/d.

Exploration and production activities in Turkmenistan        are regulated by PSAs.

Eni is operator of the Nebit Dag producing block (with        a 100% interest). Production derives mainly from the        Burun oil field. Oil production is shipped to the        Turkmenbashi refinery plant. Eni receives, by means of a        swap with the Turkmen Authorities, an equivalent amount        of oil at the Okarem terminal, close to the South coast        of the Caspian Sea. Eni’s entitlement is sold FOB.        Associated natural gas is used for own consumption and        gas lift system. The remaining amount is delivered to        Turkmenneft, via national grid.

*Vietnam.* In June and July 2012, Eni acquired        the operatorship (50% interest) of three exploration        blocks located offshore Vietnam, in the Song Hong and Phu        Khanh basins. The three blocks cover approximately 21,000        square kilometers of acreage. These basins are estimated        to contain 10% of Vietnam’s hydrocarbon resources,        mainly gas. The |   |  |
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Company plans to make significant investment to explore forhydrocarbons in the acquired acreage by drilling four wells. 

In January 2013, Eni and the Vietnamese national oil companyPetroVietnam signed a Memorandum of Understanding for thedevelopment of business opportunities in Vietnam and abroad.

*Americas*

In 2012, Eni’s operations in the Americas accounted for8% of its total worldwide production of oil and natural gas.

*Ecuador.* Eni has been present in Ecuador since 1988.Operations are performed in Block 10 (Eni’s interest 100%)located in the Oriente Basin, in the Amazon forest. In 2012,Eni’s production averaged 25 kBBL/d.

Exploration and production activities in Ecuador are regulatedby a service contract, due to expire in 2023.

Production deriving solely from the Villano field is processedby means of a Central Production Facility and transported via apipeline network to the Pacific Coast.

*Trinidad and Tobago.* Eni has been present in Trinidadand Tobago since 1970. In 2012, Eni’s production averaged 59mmCF/d and its activity is concentrated offshore North ofTrinidad.

Exploration and production activities in Trinidad and Tobagoare regulated by PSAs.

Production is provided by the Chaconia, Ixora, Hibiscus,Poinsettia, Bougainvillea and Heliconia gas fields in the NorthCoast Marine Area 1 Block (Eni’s interest 17.3%). Productionis supported by two fixed platforms linked to the Hibiscusprocessing facility. Natural gas is used to feed trains 2, 3 and4 of the Atlantic LNG liquefaction plant on Trinidad’s costand sold under long-term contracts. LNG production is manly soldin the United States. Additional cargoes are sent to alternativedestinations on a spot basis.

*United States.*Eni has been present in the UnitedStates since 1968. Activities are performed in the conventionaland deep offshore in the Gulf of Mexico and more recently onshoreand offshore in Alaska.

In 2012, Eni’s oil and gas production mainly derived fromthe Gulf of Mexico with an average of 86 kBOE/d.

Exploration and production activities in the United States areregulated by concessions.

Eni holds interests in 281 exploration and production blocksin the Gulf of Mexico of which 172 are operated by Eni.

The main fields operated by Eni are Allegheny, Appaloosa andMorpeth (Eni’s interest 100%), Longhorn-Leo, Devils Towersand Triton (Eni’s interest 75%) as well as Pegasus(Eni’s interest 58%). Eni also holds interests in the Medusa(Eni’s interest 25%), Europa (Eni’s interest 32%) andThunderhawk (Eni’s interest 25%) fields.

Development activities mainly concerned: (i) drillingactivities at the Allegheny, Appaloosa and Devils Towers operatedfields; (ii) production optimization of the Front Runner(Eni’s interest 37.5%), Europa, Popeye (Eni’s interest50%) and Thunderhawk fields; and (iii) the start-up of drillingprograms at the Hadrian South (Eni’s interest 30%) and St.Malo (Eni’s interest 1.25%) fields.

Exploration outlining activity of the Heidelberg oil discovery(Eni’s interest 12.5%) in the Gulf of Mexico yieldedpositive results. Studies are underway for a fast trackdevelopment.

In order to achieve the highest security standards ofoperations, Eni entered the HWGC consortium of Gulf of Mexicooperators. The HWGC provides resources, coordination and performscertain activities associated with underwater containment oferupting wells, evacuation of hydrocarbon on the sea surface,storage and transport to the coastline. For further informationon this matter see "Item 3 – Risk factors".

Development activity progressed at the Alliance area(Eni’s interest 27.5%), in the Fort Worth Basin in Texas.This area, including gas shale reserves, was acquired following astrategic partnership between Eni and Quicksilver. In particular,12 new wells entered in production and contributed to a totalproduction of approximately 10 kBOE/d net to Eni in the year.

In March 2013, Eni was awarded five offshore blocks located inMississippi Canyon and Desoto Canyon, in the Gulf of Mexico.

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Eni holds interests in 111 exploration and development blocksin Alaska, with interests ranging from 10 to 100% and for 54 ofthese blocks, Eni is the operator.

The main fields are Nikaitchuq (Eni operator with a 100%interest) and Oooguruk (Eni’s interest 30%) with an overallproduction of 9 kBBL/d net to Eni in 2012.

Development activities mainly concerned drilling activities atthe Nikaitchuq and Oooguruk fields.

*Venezuela.*Eni has been present in Venezuela since1998. In 2012, Eni’s production averaged 9 kBBL/d.

Activity is concentrated in the Gulf of Venezuela, in theGulfo de Paria and onshore in the Orinoco Oil Belt.

Exploration and production of oil fields are regulated by theterms of the so-called Empresa Mixta. Under the new legalframework, only a company incorporated under the law of Venezuelais entitled to conduct petroleum operations. A stake of at least60% in the capital of such company is held by an affiliate of theVenezuela state oil company, PDVSA, preferably CorporaciónVenezuelana de Petróleo (CVP).

In March 2013, production started-up at the giant Junin 5field (Eni’s interest 40%) with 35 BBBL of certified heavyoil in place, located in the Orinoco oil belt. Early productionof the first phase is expected at plateau of 75 kBBL/d in 2015,targeting a long-term production plateau of 240 kBBL/d to bereached by 2018. The project provides also for the constructionof a refinery with a capacity of approximately 350 kBBL/d. Thedrilling activity started during the year. Eni agreed to financepart of PDVSA’s development costs for the early productionphase and engineering activity of refinery plant up to $1.74billion. Eni signed a loan agreement in the fourth quarter 2012.

Venezuelan relevant Authority sanctioned the development planof the Perla gas discovery, located in the Cardón IV Block(Eni’s interest 50%), in the Gulf of Venezuela. PDVSAexercised its 35% back-in right in 2012 and the completion of thestake transfer is expected in 2013. Eni retains a 32.5% jointcontrolled interest in the company. 

The early production phase includes the utilization of thealready successfully drilled discovery/appraisal wells and theinstallation of production platforms linked by pipelines to theonshore treatment plant. Target production of approximately 300mmCF/d is expected in 2015. The development program will continuewith the drilling of additional 

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wells and the upgrading of treatment facilities to reach aproduction plateau of approximately 1,200 mmCF/d. In 2012, theFIDs of the further phases were sanctioned.

Activity progressed at the Corocoro producing field(Eni’s interest 26%), in the Gulfo de Paria. In 2012, thestart-up of the Central Production Facility (CPF) allowed toachieve a production peak of approximately 42 kBBL/d(approximately 11 kBBL/d net to Eni).

Eni is also participating with a 19.5% interest in the Gulfode Paria Centrale offshore oil exploration block, where the PuntaSur oil discovery is located and with a 40% interest in PuntaPescador and Gulfo de Paria Ovest, the latter coinciding with theCorocoro oil field area.

*Australia and Oceania*

Eni’s operations in Australia and Oceania area areconducted mainly in Australia. In 2012, the area of Australia andOceania accounted for 2% of Eni’s total worldwide productionof oil and natural gas.

*Australia.* Eni has been present in Australia since2001. In 2012, Eni’s production of oil and natural gasaveraged 36 kBOE/d. Activities are focused on conventional anddeep offshore fields.

Exploration and production activities in Australia areregulated by concession agreements, whereas in the cooperationzone between Timor Leste and Australia (Joint PetroleumDevelopment Area - JPDA) they are regulated by PSAs.

The main production blocks in which Eni holds interests areWA-33-L (Eni’s interest 100%), JPDA 03-13 (Eni’sinterest 10.99%) and JPDA 06-105 (Eni operator with a 40%interest). In the appraisal and development phase Eni holdsinterests in NT/P68 (Eni’s interest 50%) and NT/P48(Eni’s interest 32.5%). In addition, Eni holds interest in 9exploration licenses.

 

> 
***Capital expenditures***

See "Item 5 – Liquidity and capital resources –Capital expenditures by segment".

 

> 
***Disclosure pursuant to Section 13(r) of theExchange Act***

The Iran Threat Reduction and Syria Human Rights Act of2012 (“ITRA”) created a new subsection (r) in Section 13 ofthe Exchange Act which requires a reporting issuer to providedisclosure if the issuer or any of its affiliates engaged incertain enumerated activities relating to Iran, includingactivities involving the Government of Iran. Disclosureresponsive to this requirement is presented under “Item 3 –Political considerations – Risks associated with our presencein sanction targets” and below in this section.

In accordance with our general business principles and Codeof Ethics, Eni seeks to comply with all applicable internationaltrade laws including applicable sanctions and embargoes.

The activities referred to below have been conducted outsidethe U.S. by non-U.S. Eni subsidiaries. For purposes of the disclosurebelow, amounts have been converted into U.S. dollars at the averageor spot exchange rate, as appropriate. We do not believe that any ofthe transactions or activities listed below violated U.S. sanctionsalso considering the waiver that we were granted by relevant U.S.Authorities, including the U.S. Department of State, in relation tocertain Iran-related activities. For more information please referto “Item 3 – Risk factors – Political considerations – Risksassociated with our presence in sanction targets”.

As described in more detail under “Item 3 – Risk factors –Political considerations – Risks associated with our presencein sanction targets”, in 2012 Eni carried out support activitiesand services in respect of certain oil fields in Iran pursuant tocertain legacy Service Contracts. Eni’s operating expenses pursuantto those contracts in 2012 amounted to approximately $22 million. In addition,in connection with its remaining Iranian operations, in 2012 Enipaid approximately $6 million for social security, withholding tax,corporate tax and rental tax.

In 2012, Eni’s production in Iran averaged 3 kBOE/d, representingless than 1% of the Eni’s total production for the year. We bookedrevenues of $128 million in 2012 in connection with our share of equityproduction and we reported a net loss of $69 million at our Iranian operations.As of the balance sheet date Eni had outstanding trade receivables amountingto euro 270 million towards Iranian oil national companies which were recordedin connection with revenues recognized in 2012 and in previous reportingperiods. In 2012, we collected cash payments for a total of $107 million. Those revenues and tradereceivables related to the recovery of the costs incurred by Eni in its

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performance of petroleum projects, mainly pertaining to the ongoingDarquain project as disclosed under “Item 3 – Risk factors– Political considerations – Risks associated with ourpresence in sanction targets”. We had no payables towardsIranian national oil companies as of the balance sheet date. We had apayable amounting to $44 million relating to health and social securityinsurance due to the Iranian Social Security Organization, which willbe settled upon termination of our oil projects.

Eni Exploration & Production projects in Iran are currentlyin the cost recovery phase. Therefore, Eni has ceased makingany further investment in the country and is not planning tomake additional capital expenditures in Iran in future years.In addition, in 2012 we purchased 498 ktonnes of Iranian crudeoil from NIOC and we paid NIOC $396 million in 2012, for thosepurchases. We believe that we made no profits on those purchasesas our refining margins for the year 2012 were unprofitable onaverage. Those purchase transactions were entered into pursuantto a waiver granted by the U.S. Department of State as disclosedunder “Item 3 – Risk factors – Political considerations – Risksassociated with our presence in sanction targets”. Also as aconsequence of EU restrictive measures, in June 2012 Eni ceasedto import Iranian crude oil with the exception of those volumesnecessary to collect outstanding receivables towards Iraniancounterparties, as allowed by the European Union sanctions regime.

 

**Gas & Power**

Eni’s Gas & Power segment engages in supply, tradingand marketing of gas and electricity, international transport,and LNG supply and marketing. This segment also includes theactivities of electricity generation. In 2012, Eni’sworldwide sales of natural gas amounted to 95.32 BCM, including2.73 BCM of gas sales made directly by Eni’s Exploration& Production segment. Sales in Italy amounted to 34.78 BCM,while sales in European markets were 51.02 BCM that included 2.73BCM of gas sold to certain importers to Italy. 

In 2012, following the divestment of a significant interest inSnam, Eni lost control on activities related to the transport,regasification, storage and distribution of natural gas in Italy.

 

> 
***Marketing of natural gas***

The outlook in the Europe on gas sector remains challenging asthe current economic downturn will weigh on the prospects of asolid recovery in gas demand, while we expect strong competitivepressure fuelled by a supply overhang. 

Management expects that continuing margin pressures will erodethe business’s profitability in 2013 and beyond,particularly in the Italian market. A weaker-than-anticipateddemand growth over the short term and rising competitivepressures fuelled by ongoing oversupplies in the European marketwill reduce sales opportunities and trigger pricing competitionalso fuelled by rigidities at long-term supply contracts withtake-or-pay clauses. In fact, we expect that minimum off-takeobligations in connection with take-or-pay, long-term gas supplycontracts and the necessity to minimize the associated financialexposure will force gas operators to compete more aggressively onpricing in consideration of lower selling opportunities, withnegative effects on selling prices and profitability. Unitmargins are expected to remain under pressure due to depressedspot prices at continental hubs which have become the contractualbenchmark in selling formulas outside Italy. In addition, as longas the cost of gas supplies to the Group remains indexed to oilprices, the Company will be exposed to the risk of rising oilprices. 

In Italy we expect that gas margins will weaken too, due to anumber of negative catalysts including competitive pressure, anongoing shift to index selling prices to hub benchmarks at largeclient segments, the current level of minimum take volumes atItalian operators which are well above market dimension, andfinally the expected measures to be implemented by the Italianadministration to cut the gas tariffs to residential customers.See also the other risk factors described in Item 3. Thesedrivers will substantially reduce spot prices in the Italianmarket and negatively impact the profitability at our Italianoperations.

Against this scenario the Company set the followingpriorities: preserve the operating cash flow during the worstphase of the downturn which is expected to continue well in 2013and recover the profitability in subsequent years leveragingcontract renegotiations, an expected realignment of actual marketimbalances and a gradual recovery in the spreads between theoil-linked cost of gas supplies and selling prices at spotmarkets.

The main driver to recover profitability in the Company’sgas marketing business is the renegotiation of pricing and otherconditions of our supply contracts. In fact, take-or-pay supplycontracts include revisions clauses allowing the counterpartiesto renegotiate the economic terms and other conditionsperiodically, in relation to ongoing changes in the gas scenario.Currently management is seeking to renegotiate about 80% of theCompany’s supplies in order to reduce the purchase costs byaligning them to the spot prices at continental hub and improvecontractual flexibility targeting to mitigate the take-or-payrisk. 

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In a scenario of continuing weak demand and strongcompetition, management plans to retain the Company’s marketshare in Italy and Europe by leveraging improved costs inprocurement and logistics, and effective commercial actions. 

The Company intends to boost sales to business clients,including utilities, large industrial accounts and medium andsmall enterprises, leveraging the Company’s multiplepresence across various markets and expertise in delivering 

innovative and tailor-made offering structures to best suitcustomers’ needs by providing complex pricing formulas withflexibility on volumes and different ways to manage pricing.

The other leg of the Company’s marketing effort willaddress retail customers across Europe targeting to enhance theongoing strong customer base. The drivers to achieve this will bea strategy of customer retention centered on brand identity, adistinctive offer and competitive cost to serve; a wide range ofsale channels and continuing innovation in processes, promotionand customer care and post-sale assistance. The internationalexpansion in the LNG business is expected to continue by boostingthe Company’s presence in the more lucrative Far Eastmarkets.

Based on the above outlined trends and industrial actions,management believes that profitability in the Company’s gasmarketing business will gradually recover along the plan period,albeit the visibility into future results of operations isconstrained by the ongoing volatility in marketing margins. Ourprofitability outlook factors in the expected benefits of ongoingrenegotiations at the Company long-term supply contracts, as wellas the other risk factors described in Item 3.

For a description of uncertainties and risks associated withthis strategy see "Item 3 – Risk factors" and"Item 5 – Operating and financial review andprospects".

*The matters regarding future natural gas demand and salestarget discussed in this section and elsewhere herein areforward-looking statements that involve risks and uncertaintiesthat could cause the actual results to differ materially fromthose in such forward-looking statements. Such risks anduncertainties relating to future natural gas demand includechanges in underlying economic factors, changes in regulation,population growth or shrinkage, changes in the relative mix ofdemand for natural gas and its principal competing fuels, andunexpected developments in the markets for natural gas and itsprincipal competing fuels.*

 

> 
***Demand and supply outlook***

| In 2012, gas demand in Europe declined        by 2% (down by 4% in Italy) due to declining consumption        in all market segments on the back of the economic        downturn. The power generation segment recorded the        steepest fall, hit by an ongoing expansion in the use of        renewable sources and a shift to coal as feedstock for        power plants due to cost advantages. Due to the severity        of the contraction in European gas demand and ongoing        uncertainties in the macroeconomic outlook, management        has revised down its projections of gas demand over the        medium to long term to factor in a number of trends: |
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| • |   | uncertainties and volatility        in the current macroeconomic cycle;                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |
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| • |   | growing adoption of        consumption patterns and life-styles characterized by        wider sensitivity to energy efficiency; and                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |
| • |   | EU policies intended to        reduce GHG emissions and promoting renewable energy        sources, following prescriptions set by the Climate        Change and Renewable Energy package (the so-called PEE        20-20-20). The package includes a commitment to reduce        greenhouse gas (GHG) emissions by 20% by 2020 compared to        emission levels recorded in 1990 (the target being 30% if        an international agreement is reached), as well as        improved energy efficiency within the EU Member States of        20% by 2020 and a 20% renewable energy target by 2020.        Furthermore, the Energy Roadmap to 2050 set a target of        reducing the level of carbon emissions made in 1990 by 80        to 95%. |

Management now expects EU demand to increase from around 478BCM in 2012 to around 526 BCM by 2016, and to close to 552 BCM in2020, corresponding to an average growth rate of approximately1.8% along the period. Gas demand in Italy is expected to growwith an average rate of approximately 1.7% in the same period.The projected level of gas demand in 2016 is significantly belowthe level recorded in the pre-crisis years.

On the plus side, the ongoing changes in the energy policiesof the Euro-zone and other important countries like Japan andTaiwan, also as a result of the nuclear accident at the Fukushimaplant in Japan, could accelerate a recovery in gas consumption.In addition, the fiscal policies of the EU Member States couldaffect the composition of the energy mix through the introductionof penalties on the use of the most inefficient and pollutantsources in energy production. Examples of these trends are aproposed European directive to enact a carbon tax to be levied onthose sectors which do not participate in the ETS mechanism aswell as a proposal to enact certain fiscal adjustments to put afloor to the price of carbon dioxide emissions in the UK.

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On the supply-side, gas availability remains abundant as largeinvestments to upgrade import pipelines to Europe have comeonline from Russia and Algeria. These include the Medgaz pipelineconnecting Algeria to the Iberian Peninsula, the North Streampipeline connecting Russia to Germany through the Baltic Sea aswell as new LNG facilities. Further 27 BCM of new supplies willbe secured by a second line of the North Stream in the nextfuture and new storage capacity will come online. In Italy, thegas offer will grow moderately in the next future as a new LNGplant is expected to start operations at Livorno with a 4 BCMtreatment capacity and effects are in force of Law Decree No.130/2010 concerning storage capacity (see below) which isexpected to increase by 4 BCM by 2015. Large availability of LNGon a worldwide scale has found an outletat the European continental hubs driving the development of veryliquid spot gas markets driven by the ramp-up of importantupstream projects which added an estimated 65 BCM of liquefactioncapacity in the 2008-2010 period. Adding to the supply overhang,the United States has reduced the Country’s dependence onLNG imports due to commercial development of largenon-conventional gas resources. As a result of those drivers, weexpect that current market imbalances will continue over the nexttwo to three years. Looking beyond, however, we expect theEuropean market to rebalance due to a growing energy demandcoming from the developing economies in China, India and otheremerging countries in East Asia, Middle East and South Americawhere, between now and 2015, we expect that consumption willincrease significantly mainly driven by robust rates of economicdevelopment. This will help absorb part of worldwide LNG supplieswhich are currently being delivered to Europe. Additionally weexpect that gas production in Europe will progressively declinedue to mature field depletion. However there are also some risksin the demand scenario. In fact, management believes that it ispossible that the U.S. Administration might speed up the processto monetize the Country’s large reserve base of shale gas bygiving permission to reconvert re-gasification plants into LNGexport facilities. Furthermore, new upstream projects might bestarted up in the long run adding to global LNG supplies(particularly the projects to develop gas reserves inMozambique). Finally, it is difficult to estimate the long-termimpact of the current European economic slowdown on gas demand,the effectiveness of EU Member States initiatives to achieve thecommitted targets in reducing energy intensity and the evolutionof the role of renewables in the production of electricity.

 

> 
***Planned actions in marketing of natural gas***

| Over the 2013-2016 period, Eni’s        strategy will focus on certain distinct commercial        objectives to recover profitability in a difficult        market: |
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| • |   | to maintain its leadership        in the Italian market mainly by strengthening the        customer base in the valuable segments of retail        consumers and small and medium businesses;                   |
|--------|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| • |   | to consolidate Eni’s        position in Europe in the business gas market, where the        Company has a well balanced portfolio in terms of        geographies, customer segments and contract duration; |
| • |   | to focus on more profitable        segments;                                                                                                                                                                    |
| • |   | to increase LNG sales in        profitable markets outside Europe; and                                                                                                                                          |
| • |   | maximize sales volumes in        order to mitigate the take-or-pay risk.                                                                                                                                        |

In particular management plans to regain market share in Italyand to expand sales in European target markets by leveragingfirst of all on the improved competitiveness of theCompany’s cost position reflecting the benefit of therenegotiation of its supply contracts, the quality of its offer,including risk management and transport and storage contracts,pricing formulas and commercial options that are designed to suitcustomers’ needs. In particular, in the retail segment inItaly Eni’s campaign will focus on a combined commercialoffer "luce, gas, carburanti" (electricity, gas andfuels) and the adoption of lean marketing procedures tofacilitate customers’ tasks and optimization of commercialchannels (such as agencies, remote selling, energy stores) with astrong focus on web channels.

In order to increase exposure to the retail segment,management plans to expand its customer base in Italy and outsideItaly, by almost 3 million clients in the next four years toreach a total of 14 million customers by 2016, strengtheningEni’s position in this segment in particular in Italy,through our distinctive offer "eni 3" (gas, electricityand fuels) and innovative sales channels. To retain moresophisticated customers in both the large and medium to smallenterprises segment across Europe, the Company is ready to launchnew innovative commercial offers based on multiple pricingoptions and volume flexibility.

 

> 
***Supply of natural gas***

In 2012, Eni’s consolidated subsidiaries supplied 86.74BCM of natural gas, representing an increase of 3.36 BCM, or 4%from 2011.

Gas volumes supplied outside Italy (79.19 BCM fromconsolidated companies), imported in Italy or sold outside Italy,represented approximately 91% of total supplies, an increase of3.03 BCM, or 4%, from 2011, mainly reflecting higher volumespurchased from Libya (up 4.23 BCM), almost tripled from 2011 whenthe GreenStream gas pipeline had been shutdown.

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Increased volumes were purchased also from the Netherlands (up0.95 BCM), and from Algeria (up 0.51 BCM). Declines were recordedin gas purchases from Russia (down 1.17 BCM) due to the recoveryof Libyan supplies, the UK (down 0.37 BCM) and Norway (down 0.17BCM). Supplies in Italy (7.55 BCM) increased slightly from 2011also due to higher domestic production that offset the decline ofmature fields. In 2012, main gas volumes from equity productionderived from: (i) Italian gas fields (6.7 BCM); (ii) certain Enifields located in the British and Norwegian sections of the NorthSea (1.9 BCM); (iii) Libyan fields (1.8 BCM) increasing by almost1.2 BCM due to the effect of force majeure registered in 2011;(iv) the United States (1.6 BCM); and (v) other European areas(Croatia with 0.2 BCM).

Considering also direct sales of the Exploration &Production Division and LNG supplied from the Bonny liquefactionplant in Nigeria, supplied gas volumes from equity productionwere approximately 18 BCM representing 18% of total volumesavailable for sale.

The table below sets forth Eni’s purchases of natural gasby source for the periods indicated.

| **Natural        gas supply** |   | **2010** |   | **2011** |   | **2012** |
|-------------------------------|--------|----------|--------|----------|--------|----------|
|                          |   |          |   |          |   |          |

|   |   | **(BCM)** |
|--------|--------|-----------|

| **Italy**                                                        |   | **7.29**  |   |   | **7.22**  |   |   | **7.55**  |   |
|------------------------------------------------------------------|--------|-----------|--------|--------|-----------|--------|--------|-----------|--------|
| **Outside        Italy**                                         |   | **75.20** |   |   | **76.16** |   |   | **79.19** |   |
| *Russia*                                                         |   | *14.29*   |   |   | *21.00*   |   |   | *19.83*   |   |
| *Algeria        (including LNG)*                                 |   | *16.23*   |   |   | *13.94*   |   |   | *14.45*   |   |
| *Libya*                                                          |   | *9.36*    |   |   | *2.32*    |   |   | *6.55*    |   |
| *the        Netherlands*                                         |   | *10.16*   |   |   | *11.02*   |   |   | *11.97*   |   |
| *Norway*                                                         |   | *11.48*   |   |   | *12.30*   |   |   | *12.13*   |   |
| *the        United Kingdom*                                      |   | *4.14*    |   |   | *3.57*    |   |   | *3.20*    |   |
| *Hungary*                                                        |   | *0.66*    |   |   | *0.61*    |   |   | *0.61*    |   |
| *Qatar        (LNG)*                                             |   | *2.90*    |   |   | *2.90*    |   |   | *2.88*    |   |
| *Other supplies of natural gas*                                  |   | *4.42*    |   |   | *6.16*    |   |   | *5.43*    |   |
| *Other        supplies of LNG*                                   |   | *1.56*    |   |   | *2.34*    |   |   | *2.14*    |   |
| **Total supplies of subsidiaries**                               |   | **82.49** |   |   | **83.38** |   |   | **86.74** |   |
| Withdrawals        from (input to) storage                       |   | (0.20     | )      |   | 1.79      |   |   | (1.35     | )      |
| Network losses, measurement differences and        other changes |   | (0.11     | )      |   | (0.21     | )      |   | (0.28     | )      |
| **Volumes        available for sale of Eni’s subsidiaries** |   | **82.18** |   |   | **84.96** |   |   | **85.11** |   |
| **Volumes available for sale of Eni’s        affiliates**   |   | **9.23**  |   |   | **8.94**  |   |   | **7.48**  |   |
| **E&P        volumes**                                       |   | **5.65**  |   |   | **2.86**  |   |   | **2.73**  |   |
|                                                             |   |           |        |   |           |        |   |           |        |
| **Total volumes available for sale**                             |   | **97.06** |   |   | **96.76** |   |   | **95.32** |   |
|                                                             |   |           |        |   |           |        |   |           |        |

In order to secure long-term access to gas availability,particularly with a view to supplying the Italian gas market, Enihas signed a number of long-term gas supply contracts with keyproducing countries that supply the European gas markets. Thesecontracts have been ensuring approximately 80 BCM of gasavailability from 2010 (including the Distrigas portfolio ofsupplies and excluding Eni’s other subsidiaries andaffiliates) with a residual life of approximately 16 years and apricing mechanism that indexed to the cost of gas to the price ofcrude oil and its derivatives (gasoil, fuel oil, etc.). Thesecontracts provide take-or-pay clauses whereby the Company isrequired to collect minimum pre-determined volumes of gas in eachyear of the contractual term or, in case of failure, to pay thewhole price, or a fraction of that price, applied to uncollectedvolumes up to the minimum contractual quantity. The take-or-payclause entitles the Company to collect pre-paid volumes of gas inlater years during the period of contract execution. In thecurrent industry downturn, the Company has failed to off-takesthe annual minimum quantities of gas provided by the contractualtake-or-pay clause, being forced to pre-pay the underlying gasvolumes.

Management believes that the weak industry outlook weigheddown by declining demand and large gas availability on themarketplace, the possible evolution of sector-specific regulationand strong competitive pressures represent risk factors to theCompany’s ability to fulfill its minimum take obligationsassociated with its long-term supply contracts. From thebeginning of the downturn in the European gas market up to date,Eni has incurred the take-or-pay clause as the Company off-tooklower volumes than its minimum take obligations accumulatingdeferred costs for an amount of euro 2.37 billion (net of limitedamounts of volume make-up) paying the associated cash advances toits gas suppliers. Considering the Company’s outlook for itssales volumes which are anticipated to remain stable in 2013 andto grow at a moderate pace in subsequent years, managementintends to adopt adequate initiatives to mitigate the financialexposure related to take-or-pay obligations mainly in thedomestic market where the expected volume of demand is lower incomparison with the minimum contracted supplies which Italian gasintermediaries are obliged to fulfill. The initiatives tomitigate the take-or-pay risk include contract renegotiationswhich may temporarily reduce the annual minimum take, moreflexible off-take conditions such as change in the delivery pointor the possibility to replace supplies via pipeline withequivalent volumes of LNG. Based on the Company’s sellingprograms and higher flexibility already achieved or to beachieved through the above mentioned renegotiations, managementbelieves that it is likely 

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that in the 2013-2016 period Eni willmanage to fulfill its minimum take obligations associated withits supply contracts thus minimizing the risk on liquidity.

These projections could be subject to the risks of furthercontraction in demand or total addressable market. As to thedeferred costs stated in the balance sheet, based onmanagement’s outlook for gas demand and offer in Europe, andprojections for sales volumes and unit margins in future years,the Company believes that the pre-paid volumes of gas due to theincurrence of the take-or-pay clause will beoff-taken in the long term in accordance to contractual term thusrecovering the cash advances paid to suppliers.

This forecast is subject to the risk factors described in"Item 3 – Risk factors" and in our outlook in"Item 5 – Operating and financial review andprospects".

 

> 
***Sales of natural gas***

In 2012, sales of natural gas were 95.32 BCM, down 1.44 BCM or1.5% from 2011. Sales included Eni’s own consumption,Eni’s share of sales made by equity-accounted entities andE&P sales in Europe and in the Gulf of Mexico.

Despite a 4% decline in natural gas demand, sales volumes onthe Italian market were substantially stable at 34.78 BCM (up0.10 BCM, or 0.3% from 2011). Lower sales to the power generationsegment (down 1.76 BCM), industrial customers (down 0.28 BCM) andwholesalers (down 0.51 BCM), due to the negative scenario andincreasing competitive pressure, were offset by higher sales onthe Italian exchange for gas and spot markets (up 2.28 BCM) andat a lower extent to the residential segment (up 0.22 BCM)reflecting efficient commercial initiatives.

Sales to shippers were down 0.51 BCM, or 15.7%, due to therelease of certain supply contracts despite the recovery ofLibyan supplies.

Sales on target markets in Europe of 48.29 BCM showed a slightdecline from 2011 (down 2.9%). This decline was mainly due to adecline in sales in Benelux (down 3.53 BCM) and in the IberianPeninsula (down 1.19 BCM) due to the exclusion of Galp salesafter the loss of control offset only in part by increasesrecorded in France (up 1.35 BCM) also and Germany/Austria (up1.31 BCM) due commercial initiatives.

Sales to markets outside Europe increased by 0.55 BCM due tohigher LNG sales in the Far East, in particular in Japan.

E&P sales in Northern Europe and in the United States(2.73 BCM) declined by 0.13 BCM due to lower sales in the NorthSea.

The tables below set forth Eni’s sales of natural gas byprincipal market for the periods indicated.

| **Natural        gas sales by entities** |   | **2010** |   | **2011** |   | **2012** |
|------------------------------------------|--------|----------|--------|----------|--------|----------|
|                                     |   |          |   |          |   |          |

|   |   | **(BCM)** |
|--------|--------|-----------|

| **Total sales of subsidiaries**                                    |   | **82.00** |   | **84.37** |   | **84.67** |
|--------------------------------------------------------------------|--------|-----------|--------|-----------|--------|-----------|
| *Italy        (including own consumption)*                         |   | *34.23*   |   | *34.60*   |   | *34.66*   |
| *Rest of Europe*                                                   |   | *46.74*   |   | *45.16*   |   | *44.94*   |
| *Outside        Europe*                                            |   | *1.03*    |   | *4.61*    |   | *5.07*    |
| **Total sales of Eni’s affiliates**        (Eni’s share) |   | **9.41**  |   | **9.53**  |   | **7.92**  |
| *Italy*                                                            |   | *0.06*    |   | *0.08*    |   | *0.12*    |
| *Rest of Europe*                                                   |   | *7.78*    |   | *7.82*    |   | *6.08*    |
| *Outside        Europe*                                            |   | *1.57*    |   | *1.63*    |   | *1.72*    |
| **Total sales of G&P**                                         |   | **91.41** |   | **93.90** |   | **92.59** |
| E&P in        Europe and in the Gulf of Mexico (a)             |   | 5.65      |   | 2.86      |   | 2.73      |
| **Worldwide gas sales**                                            |   | **97.06** |   | **96.76** |   | **95.32** |
|                                                               |   |           |   |           |   |           |

----

| (a) |   | E&P sales        include volumes marketed by the Exploration &        Production division in Europe (2.33, 2.29 and 2.06 BCM in        2010, 2011 and 2012, respectively) and in the Gulf of        Mexico (3.32, 0.57 and 0.67 BCM in 2010, 2011 and 2012,        respectively). |
|-----|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

 

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| **Natural        gas sales by market** |   | **2010** |   | **2011** |   | **2012** |
|----------------------------------------|--------|----------|--------|----------|--------|----------|
|                                   |   |          |   |          |   |          |

|   |   | **(BCM)** |
|--------|--------|-----------|

| **ITALY**                                       |   | **34.29** |   | **34.68** |   | **34.78** |
|-------------------------------------------------|--------|-----------|--------|-----------|--------|-----------|
| Wholesalers                                     |   | 4.84      |   | 5.16      |   | 4.65      |
| Gas release                                     |   | 0.68      |   |      |   |      |
| Italian        gas exchange and spot markets    |   | 4.65      |   | 5.24      |   | 7.52      |
| Industries                                      |   | 6.41      |   | 7.21      |   | 6.93      |
| Medium-sized        enterprises and services    |   | 1.09      |   | 0.88      |   | 0.81      |
| Power generation                                |   | 4.04      |   | 4.31      |   | 2.55      |
| Residential                                     |   | 6.39      |   | 5.67      |   | 5.89      |
| Own consumption                                 |   | 6.19      |   | 6.21      |   | 6.43      |
| **INTERNATIONAL        SALES**                  |   | **62.77** |   | **62.08** |   | **60.54** |
| **Rest of Europe**                              |   | **54.52** |   | **52.98** |   | **51.02** |
| Importers        in Italy                       |   | 8.44      |   | 3.24      |   | 2.73      |
| European markets                                |   | 46.08     |   | 49.74     |   | 48.29     |
| *Iberian        Peninsula*                      |   | *7.11*    |   | *7.48*    |   | *6.29*    |
| *Germany-Austria*                               |   | *5.67*    |   | *6.47*    |   | *7.78*    |
| *Benelux*                                       |   | *15.64*   |   | *13.84*   |   | *10.31*   |
| *Hungary*                                       |   | *2.36*    |   | *2.24*    |   | *2.02*    |
| *UK-Northern        Europe*                     |   | *4.45*    |   | *4.21*    |   | *4.75*    |
| *Turkey*                                        |   | *3.95*    |   | *6.86*    |   | *7.22*    |
| *France*                                        |   | *6.09*    |   | *7.01*    |   | *8.36*    |
| *Other*                                         |   | *0.81*    |   | *1.63*    |   | *1.56*    |
| **Extra        European markets**               |   | **2.60**  |   | **6.24**  |   | **6.79**  |
| **E&P in Europe and in the Gulf of Mexico** |   | **5.65**  |   | **2.86**  |   | **2.73**  |
| **WORLDWIDE        GAS SALES**                  |   | **97.06** |   | **96.76** |   | **95.32** |
|                                            |   |           |   |           |   |           |

> 
 

***European markets***

A review of Eni’s presence in the key European markets ispresented below.

*Benelux.*Eni’s holds a leadership position in theBenelux countries (Belgium, the Netherlands and Luxembourg)granted by a direct presence, the integration withDistrigas’ operations, the presence in the retail and middlemarket and its significant exposure to spot markets in WesternEurope. In 2012, sales in Benelux were mainly directed toindustrial companies, power generation and wholesalers andamounted to 10.31 BCM (13.84 BCM in 2011), down by 3.53 BCM, or25.5%, due to rising competitive pressure, in particular in thewholesalers segment. In 2012, Eni launched its brand in thebusiness and retail gas and power market in Belgium. The Enibrand substituted that of local operators acquired in the pastfew years with the aim of consolidating its leadership on themarket.

*France.*Eni sells natural gas to industrial clients,wholesalers and power generation as well as to the segments ofretail and middle market. Eni is present in the French marketthrough its direct commercial activities and through itssubsidiary. Management plans to expand sales in France over theplan period growing volumes supplied to the business segments andincreasing retail customers. In 2012, sales in France amounted to8.36 BCM (7.01 BCM in 2011), an increase of 1.35 BCM, or 19.3%,from a year ago. In 2012, Eni launched its brand in France,substituting the local operators acquired in the past few yearswith the aim of becoming one of the major retail operators in theCountry.

*Germany-Austria.* Eni is present in the natural gasmarket through a direct marketing structure which sold in 2012approximately 4.40 BCM in Germany and 0.94 BCM in Austria throughits associate GVS (GasVersorgung Süddeutschland GmbH - Eni 50%)which sold approximately 4.48 BCM in 2012 (2.24 BCM beingEni’s share). Management plans to drive growth in directsales leveraging on the quality of its commercial offer, aprojected expansion in its business customer base and theenhancement of direct presence on the market. In 2012, totalsales in the Germany/Austria market amounted to 7.78 BCM, anincrease of 1.31 BCM, or 20.2%, from a year ago.

*Iberian Peninsula*

*Portugal.* From the second half of 2012 due to thedivestment of a stake in Galp and exit from theshareholders’ pact, Eni ceased reporting the share of gasvolumes marketed by Galp in the Portuguese market due to the lossof significant influence on the investee.

*Spain.* Eni operates in the Spanish gas market through adirect marketing structure that markets its portfolio of LNG andthrough Unión Fenosa Gas (UFG) (Eni’s interest 50%) whichmainly supplies natural gas to industrial clients, wholesalersand power generation utilities. In 2012, UFG gas sales in Europeamounted to 4.82 BCM (2.41 BCM Eni’s share). UFG holds an80% interest in the Damietta liquefaction plant, on the Egyptiancoast (see below), and a 7.36%

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interest in a liquefaction plant in Oman. In addition, itholds interests in the Sagunto (Valencia) and El Ferrol (Galicia)re-gasification plants (42.5% and 18.9%, respectively). In 2012,Eni sales in Spain amounted to 5.24 BCM decreasing from a yearago. In 2012, total sales in the Iberian Peninsula amounted to6.29 BCM, a decrease of 1.19 BCM, or 15.9%, from a year ago.

*Turkey.*Eni sells gas supplied from Russia andtransported via the Blue Stream pipeline. In 2012, sales amountedto 7.22 BCM, an increase of 0.36 BCM, or 5.2% from a year ago.

*UK-Northern Europe.* Eni through its subsidiary ETSmarkets in the UK the equity gas produced at Eni’s fields inthe North Sea and operates in the main continental natural gashubs (NBP, Zeebrugge, TTF). In 2012, sales amounted to 4.75 BCM,an increase of 12.8% from a year ago.

The Deborah Gas Storage Project (DGSP) is a seasonal gasstorage development planned for the Deborah reservoir (located inUKCS Block 48/30a) which will be connected to the NationalTransmission System at Bacton, via the Company’s existingproduction terminal.

FEED activities, as well as site activities (i.e. onshoresurveys) were carried out throughout 2010-2011. Concerning thepermits and consents, an agreement to lease the offshore fieldhas been reached with The Crown Estate and a Gas Storage Licensehas been granted by DECC while the North Norfolk District Council(NNDC) has approved the Deborah Project planning applicationsubject to conditions. Appraisal works on the Deborah reservoirwere also progressed throughout 2010, including the drilling andcompletion of an appraisal well and the related tests. Anapproved equity sales process to dilute the Eni stake wasconducted throughout 2011, as well as a market based long termcapacity allocation process in 2010. Ongoing work with UKgovernment ministries and regulatory agencies continued in 2011and across 2012 in order to promote the continued role of naturalgas within the UK energy mix and support the economic case forthe DGSP. The aim being to secure a support mechanismguaranteeing reasonable revenues to underwrite the DGSPinvestment. At the end of 2012 the Department of Energy andClimate Change published its Gas Generation Strategy and receivedOfgem’s Security of Supply report. It has now launched itsown deep analysis of the costs and benefits of an intervention tosupport Gas Storage investment aiming to deliver itsrecommendations in Spring 2013.

However, Government legislation is not expected to come into force until 2014, Eni therefore targets apossible FID in 2014-2015.

 

> 
**The LNG business**

Eni operates in all phases of the LNG business: gas feeding,liquefaction, shipping, re-gasification and sale through operatedactivities or interests in joint ventures and associates.Eni’s presence in the business is tied to the Company’splans to develop its large gas reserve base in Africa andelsewhere in the world. The LNG business has not been impacted bythe economic downturn and oversupply affecting the European gasmarket, as well as by structural modifications in the U.S.market. LNG flexibility allowed to adapt the business model tothe new scenario and to increase the value of the commodityentering in new markets.

Eni’s main assets and projects in the LNG business aredescribed below.

*Qatar.* Through its subsidiary Distrigas, Eni increasedits development opportunities in the LNG business with access tonew supply sources mainly from Qatar, under a 20-year agreementwith RasGas (owned by Qatar Petroleum with a 70% interest andExxonMobil with a 30% interest) and the Zeebrugge LNG terminal onthe Western coast of Belgium.

*Egypt.* Eni, through its interest in Unión Fenosa Gas,owns a 40% interest in the Damietta liquefaction plant with acapacity of approximately 5 mmtonnes/y of LNG which equates to afeedstock of 7.56 BCM/y in natural gas out of which the Gas &Power segment interest is up to 2.2 BCM/y to be marketed inEurope.

*Spain.* Eni through Unión Fenosa Gas holds a 21.25%interest in the Sagunto re-gasification plant, near Valencia,with a capacity of 8.8 BCM/y and a LNG storage capacity of450,000 CM which will be increased to 600,000 CM after theongoing construction of a fourth tank. At present, Eni’sre-gasification capacity entitlement amounts to 1.9 BCM/y of gas.

Eni through Unión Fenosa Gas also holds a 9.45% interest inthe El Ferrol re-gasification plant, located in Galicia, with atreatment capacity of approximately 3.6 BCM/y, of which 0.34BCM/y being Eni’s capacity entitlements. The LNG storagecapacity of the plant is 300,000 CM in two tanks.

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*USA*

*Cameron.* The Cameron LNG terminal is located on thecoastline of Louisiana. The facility where Eni owns a capacityentitlement to treat LNG was completed in the third quarter of2009. In consideration of a changed demand outlook, on March 1,2010, Eni renegotiated certain terms of the contract with theU.S. company Cameron LNG, relating to the farming out of a shareof re-gasification capacity resulting in an entitlement to Eni ofa daily send-out of 572,000 mmbtu (approximately 5.7 BCM/y).Considering current oversupply conditions in the U.S. gas market,the Brass project (West Africa) for developing gas reserves tofuel the Cameron plant has been rescheduled with start-up in2017.

*Pascagoula.* This project is part of an upstreamdevelopment project related to the construction of an LNG plantin Angola designed to produce 5.2 mmtonnes of LNG (approximately7.3 BCM/y) destined to the North American market in order tomonetize part of the Company’s gas reserves. As part of thedownstream leg of the project, Eni signed a 20-year contract withGulf LNG to buy 5.8 BCM/y of the re-gasification capacity of theplant under construction near Pascagoula in Mississippi. There-gasification facility is in operation from the last quarter of2012.

Eni USA Gas Marketing Llc also signed a 20-year contract topurchase approximately 0.9 BCM/y of re-gasified gas downstreamthe terminal owned by Angola Supply Services, a company whosepartners also own Angola LNG. In 2012, the partners and localauthorities reached an agreement for the sale of LNG on Asian andEuropean markets due to the changed gas demand outlook in theU.S. market.

| **LNG        sales** |   | **2010** |   | **2011** |   | **2012** |
|----------------------|--------|----------|--------|----------|--------|----------|
|                 |   |          |   |          |   |          |

|   |   | **(BCM)** |
|--------|--------|-----------|

| **G&P sales**                           |   | **11.2** |   | **11.8** |   | **10.5** |
|---------------------------------------------|--------|----------|--------|----------|--------|----------|
|                                        |   |          |   |          |   |          |
| Italy                                       |   | 0.2      |   |     |   |     |
| Rest of Europe                              |   | 9.8      |   | 9.8      |   | 7.6      |
| Extra        European markets               |   | 1.2      |   | 2.0      |   | 2.9      |
| **E&P sales**                           |   | **3.8**  |   | **3.9**  |   | **4.1**  |
|                                        |   |          |   |          |   |          |
| Liquefaction        plants:                 |   |     |   |     |   |     |
| - Bontang (Indonesia)                       |   | 0.7      |   | 0.6      |   | 0.6      |
| - Point        Fortin (Trinidad and Tobago) |   | 0.6      |   | 0.4      |   | 0.5      |
| - Bonny (Nigeria)                           |   | 2.2      |   | 2.5      |   | 2.7      |
| - Darwin        (Australia)                 |   | 0.3      |   | 0.4      |   | 0.3      |
|                                        |   |          |   |          |   |          |
|                                        |   | **15.0** |   | **15.7** |   | **14.6** |
|                                        |   |          |   |          |   |          |

> 
 

**Electricity sales and power generation**

***Electricity sales***

As part of its marketing activities in Italy, Eni engages inselling electricity on the Italian market principally on the openmarket, at industrial sites and on the Italian Exchange forelectricity. Supplies of electricity include both own productionvolumes through gas-fired, combined-cycle facilities andpurchases on the open market. This activity has been developed inorder to capture further value along the gas value-chainleveraging on the Company’s large gas availability. Inaddition, with the aim of developing and retaining valuablecustomers in the residential space and middle to large industrialusers, the Company has been developing a commercial offer thatprovides the combined supply of gas, power and fuels.

In 2012, the program for upgrading and improving flexibilityof the combined cycle power plants progressed in accordance withthe Company’s developing plans.

In 2012, electricity sales (42.58 TWh) were directed to thefree market (75%), the Italian power exchange (14%), industrialsites (8%) and others (3%). In 2012, electricity sales increasedby 5.7% due to an increased client base thanks to effectivemarketing policies in spite of weak domestic demand.

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| **Power        availability** |   | **2010** |   | **2011** |   | **2012** |
|-------------------------------|--------|----------|--------|----------|--------|----------|
|                          |   |          |   |          |   |          |

|   |   | **(TWh)** |
|--------|--------|-----------|

| Power generation sold                   |   | 25.63     |   | 25.23     |   | 25.67     |
|-----------------------------------------|--------|-----------|--------|-----------|--------|-----------|
| Trading of        electricity (a)       |   | 13.91     |   | 15.05     |   | 16.91     |
|                                    |   |           |   |           |   |           |
|                                    |   | **39.54** |   | **40.28** |   | **42.58** |
|                                    |   |           |   |           |   |           |
| **Power        sales by market**        |   |      |   |      |   |      |
| Free market (b)                         |   | 27.84     |   | 27.25     |   | 31.84     |
| Italian        Exchange for electricity |   | 7.13      |   | 8.67      |   | 6.10      |
| Industrial plants                       |   | 3.21      |   | 3.23      |   | 3.30      |
| Other (a)        (b)                    |   | 1.36      |   | 1.13      |   | 1.34      |
|                                    |   |           |   |           |   |           |
|                                    |   | **39.54** |   | **40.28** |   | **42.58** |
|                                    |   |           |   |           |   |           |

----

| (a) |    | Include        positive and negative imbalances.                    |
|-----|--------------|---------------------------------------------------------------------|
| (b) |    | Network        losses have been restated from other to free market. |

> 
 

**Power generation**

Eni’s main power generation plants are located in FerreraErbognone, Ravenna, Livorno, Taranto, Mantova, Brindisi, Ferraraand in various photovoltaic parks.

In 2012, power production was 25.67 TWh, down 0.44 TWh, or1.7% from 2011, mainly due to increased production at the Ferraraplant, offset in part by decreases at the Ferrera Erbognone andRavenna plants.

As of December 31, 2012, installed operational capacity was5.3 GW (5.3 GW as of December 31, 2011).

Power availability in 2012 was supported by the growth inelectricity trading activities (up 1.86 TWh, or 12.4%) due tohigher volumes traded on the Italian power exchange benefitingfrom lower purchase prices.

By 2015, Eni expects to complete its plans for capacityexpansion targeting an installed capacity of 5.4 GW. In themedium term, Eni intends to consolidate operations at its powergeneration plants and to enhance the flexibility of assets inorder to better meet market needs. Furthermore Eni intends todevelop the production from renewable sources focusing onphotovoltaic power plants, and on the Company’s "GreenChemistry" project for the remediation of the Porto Torressite, where it will be also build a bio-mass power plant.Development activities are currently underway at the Bolgiano(Eni 100%) plant.

Supplies of natural gas are expected to amount toapproximately 6 BCM/y from Eni’s diversified supplyportfolio.

New installed generation capacity uses the combined cycle gasfired technology (CCGT) and produces electricity combined withheat ("cogeneration") used to feed industrial processesand district heating networks, ensuring a high level ofefficiency and low environmental impact. In particular,management estimates that for a given amount of energy(electricity and heat) produced, using the CCGT technologyinstead of conventional power generation technology, the emissionof carbon dioxide reduces by approximately 5 mmtonnes, on anenergy production of 26.5 TWh.

The electricity acknowledged as produced in cogenerationbenefits from the exemption from the legal provision of buyinggreen certificates. According to this legal provision, powerproducers has to input a certain percentage of energy fromrenewable sources in proportion to the energy produced fromfossil-fuel or, as an alternate measure, to purchase greencertificates. The recently enacted Legislative Decree No. 28/2011provides for a gradual reduction of the share of electricityproduction currently covered by obligation of buying greencertificates, until it is completely cancelled in 2015. Eni andother cogeneration producers are involved in a legal argumentwith the Italian state-owned company promoting and supportingrenewable energy resources (GSE - Gestore Servizi Elettrici),which is in charge of controlling the compliance of obligation,concerning the way of assessing energy acknowledged as producedin cogeneration. Position supported by GSE implies that producershave to buy a greater amount of green certificates because theyare not allowed to assess the amount of electricity fromcogeneration according to the AEEG’s decision 42/02.

With a further administrative measure, the electricityproduced from cogeneration has been considered eligible to beawarded with "white certificates", in proportion toprimary energy saving granted to the system. Power plants builtbefore 2007 will be entitled to gain white certificates in ameasure equivalent to 30% of the amount awarded to a new project.

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In spite of these incentives, we believe that in the next fouryears our expenses to comply with environmental regulation willtrend higher as a result of stricter rules that will apply to theaward of emission allowances in the EU emission tradingmechanism, causing the Company to increase its purchases ofallowance on the free market.

The main assets of Eni power generation activities in Italyare provided in the table below.

| **Site** |   | **Total installed capacity        in 2012**(a)(MW) |   | **Technology** |   | **Fuel** |
|----------|--------|----------------------------------------------------|--------|----------------|--------|----------|
|     |   |                                                    |   |                |   |          |

| Brindisi                 |   | 1,321     |   | CCGT          |   | gas                 |
|--------------------------|--------|-----------|--------|---------------|--------|---------------------|
| Ferrera        Erbognone |   | 1,030     |   | CCGT          |   | gas/syngas          |
| Livorno                  |   | 199       |   | Power station |   | gas/fuel oil        |
| Mantova                  |   | 836       |   | CCGT          |   | gas                 |
| Ravenna                  |   | 972       |   | CCGT          |   | gas                 |
| Taranto                  |   | 75        |   | Power station |   | gas/fuel oil        |
| Ferrara                  |   | 841       |   | CCGT          |   | gas                 |
| Bolgiano                 |   | 30        |   | Power station |   | gas                 |
| Photovoltaic parks       |   | 4         |   | Power station |   | photovoltaic energy |
|                     |   |           |   |               |   |                     |
|                     |   | **5,308** |   |          |   |                |
|                     |   |           |   |          |   |                |

----

| (a) |   | Capacity        available after completion of dismantling of obsolete        plants. |
|-----|--------|--------------------------------------------------------------------------------------|

 

| **Power        generation** |   | **2010** |   | **2011** |   | **2012** |
|-----------------------------|--------|----------|--------|----------|--------|----------|
|                        |   |          |   |          |   |          |

| **Purchases**                            |   |      |   |    |   |    |   |    |
|------------------------------------------|--------|-----------|--------|---------|--------|---------|--------|---------|
| Natural        gas                       |   | (mmCM)    |   | 5,154   |   | 5,008   |   | 5,206   |
| Other fuels                              |   | (ktoe)    |   | 547     |   | 528     |   | 462     |
| *- of        which steam cracking*       |   |      |   | *103*   |   | *99*    |   | *98*    |
| **Production**                           |   |      |   |    |   |    |   |    |
| Electricity                              |   | (TWh)     |   | 25.63   |   | 25.23   |   | 25.67   |
| Steam                                    |   | (ktonnes) |   | 10,983  |   | 14,401  |   | 12,603  |
| **Installed        generation capacity** |   | (GW)      |   | **5.3** |   | **5.3** |   | **5.3** |
|                                     |   |      |   |         |   |         |   |         |

> 
 

**Infrastructures**

Eni has transport rights on a large European network ofintegrated infrastructure for transporting natural gas, whichlinks key consumption basins with the main producing areas(Russia, Algeria, Libya and the North Sea).

The main assets of Eni transport activities are provided inthe table below.

**International transport infrastructure**

| **Route** |   | **Lines**   |   | **Total length** |   | **Diameter** |   | **Transport capacity**(1) |   | **Transit capacity**(2) |   | **Compression stations** |
|-----------|--------|-------------|--------|------------------|--------|--------------|--------|---------------------------|--------|-------------------------|--------|--------------------------|
|      |   |             |   |                  |   |              |   |                           |   |                         |   |                          |
|      |   | **(units)** |   | **(km)**         |   | **(inch)**   |   | **(BCM/y)**               |   | **(BCM/y)**             |   | **(No.)**                |

| TTPC (Oued Saf Saf-Cap Bon)            |   | 2 lines        of km 370 |   | 740 |   | 48    |   | 34.0 |   | 33.2 |   | 5      |
|----------------------------------------|--------|--------------------------|--------|-----|--------|-------|--------|------|--------|------|--------|--------|
| TMPC (Cap        Bon-Mazara del Vallo) |   | 5 lines of km 155        |   | 775 |   | 20/26 |   | 33.5 |   | 33.5 |   |   |
| GreenStream (Mellitah-Gela)            |   | 1 line        of km 520  |   | 520 |   | 32    |   | 8.0  |   | 8.0  |   | 1      |
| Blue        Stream (Beregovaya-Samsun) |   | 2 lines of km 387        |   | 774 |   | 24    |   | 16.0 |   | 16.0 |   | 1      |

|   |   |  |   |  |   |  |   |  |   |  |   |  |
|--------|--------|--|--------|--|--------|--|--------|--|--------|--|--------|--|

----

| (1) | i | Includes both        transit capacity and volumes of natural gas destined to        local markets and withdrawn at various points along the        pipeline. |
|-----|---|--------------------------------------------------------------------------------------------------------------------------------------------------------------|
| (2) | i | The maximum        volume of natural gas which is input at various entry        points along the pipeline and transported to the next        pipeline.       |

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> 
***International transport activities***

Eni owns capacity entitlements in an extensive network ofinternational high pressure enabling the Company to importnatural gas produced in Russia, Algeria, the North Sea, includingthe Netherlands and Norway, and Libya to Italy. The Companyparticipates to both entities which own and operate thepipelines, the pipeline owners, and entities which managetransport rights, the carriers. For financial reporting purposes,such entities are either fully-consolidated or equity-accounteddepending on the Company’s interest or agreements with othershareholders.

The structure of the Company’s interests in thoseentities has significantly changed in 2011 following thedivestment of Eni’s interests in importing pipelines ofnatural gas from Northern Europe (TENP and Transitgas) and Russia(TAG) and related carrier companies, as part of the agreementssigned on September 29, 2010 with the European Commission tosettle an antitrust proceeding related to allegedanti-competitive behavior in the natural gas market. In light ofthe strategic importance of the Austrian TAG pipeline to thesupply of the Italian system, which transports gas from Russia toItaly, Eni divested its stake to an entity controlled by theItalian State. However, Eni retained its gas transport rights inthe divested assets.

A description of the main international pipelines currentlyparticipated or operated by Eni is provided below.

The TTPC pipeline, 740-kilometer long, made up of two linesthat are each 370-kilometer long with a transport capacity of33.2 BCM/y and five compression stations. This pipelinetransports natural gas from Algeria across Tunisia from Oued SafSaf at the Algerian border to Cap Bon on the Mediterranean coastwhere it links with the TMPC pipeline. The pipeline was recentlyupgraded by increasing compression capacity in order to enabletransportation of an additional 6.5 BCM/y. The upgrade wasfinalized in 2008 and became fully-operational during 2009.

The TMPC pipeline for the import of Algerian gas is775-kilometer long and consists of five lines that are each155-kilometer long with a transport capacity of 33.5 BCM/y. Itcrosses the underwater Sicily Channel from Cap Bon to Mazara delVallo in Sicily, the point of entry into the Italian natural gastransport system.

The GreenStream pipeline, jointly-owned with the LibyanNational Oil Co, started operations in October 2004 for theimport of Libyan gas produced at Eni operated fields Bahr Essalamand Wafa. It is 520-kilometer long with a transport capacity of11 BCM/y and crosses underwater in the Mediterranean Sea fromMellitah on the Libyan coast to Gela in Sicily, the point ofentry into the Italian natural gas transport system.

Eni holds a 50% interest in the Blue Stream underwaterpipeline (water depth greater than 2,150 meters) linking theRussian coast to the Turkish coast of the Black Sea. Thispipeline is 774-kilometer long on two lines and has transportcapacity of 16 BCM/y. It is part of a joint venture to sell gasproduced in Russia on the Turkish market.

 

> 
***The South Stream project***

Eni and Gazprom are jointly assessing the technical andeconomic feasibility of a project to build a new import route toEurope to market gas produced in Russia (the so-called South Stream project). 

The South Stream pipeline will provide transport capacity of63 BCM/y and is expected to be composed by two sections: (i) anoffshore section crossing the Black Sea from the Russian coastat Anapa (in the same Southern Russian area of Beregovaya,the starting point of the Blue Stream pipeline) to the Bulgariancoast at Varna; and (ii) an onshore section crossing Bulgaria forwhich two options are currently being evaluated: one pointingNorth West and another one pointing South West. 

Eni is involved only in the offshore section of the project.

In September 2011, Eni and Gazprom in the context of their strategicpartnership signed a series of agreements in areas of common interestincluding the development of the offshore section of the South Streamproject through the definition of terms for the participation to theproject of gas operators Wintershall and EDF, each with a 15% stake;Gazprom and Eni hold 50% and 20% interests, respectively.

On November 14, 2012, in accordance with the shareholdersagreement the partners confirmed that South Stream project will proceed accordingto the agreed schedule aiming at transporting the first gas throughthe Black Sea by the end of 2015. Pursuant the shareholder agreementthe minority shareholders including Eni have the right to leave theproject in case certain future conditions are not satisfied.

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> 
***Capital expenditures***

See "Item 5 – Liquidity and capital resources –Capital expenditures by segment".

 

**Refining & Marketing**

Eni’s Refining & Marketing segment engages in thesupply of crude oil, refining and marketing of refined products,trading and shipping of crude oil and refined products primarilyin Italy and in Central-Eastern Europe. In Italy, Eni is thelargest refining and marketing operator in terms of capacity andmarket share. The Company’s operations are fully integratedthrough refining, supply, trading, logistics and marketing so asto maximize cost efficiencies and effectiveness of operations.

The outlook in the Refining & Marketing segment remains adepressed one as management does not expect any meaningfulimprovement in the trading environment over the next four yearsof the industrial plan. The ongoing economic downturn isanticipated to weigh on the recovery of demand for fuels, whilehigh costs of the crude oil feedstock and energy utilities willcontinue squeezing refining margins. On the supply side, it isunlikely that ongoing capacity rationalization will help absorbproduct surpluses on the short term. Also retail and wholesalemarketing activities of refined products will be affected bysluggish demand and product oversupply that is expected totrigger pricing competition. See "Item 3 – Riskfactors" and "Regulation" below.

| Due to the challenging market        environment and industry downturn, we plan to implement        all available levers to improve operations efficiency and        profitability. The main planned initiatives in our        refining operations are: |
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| • |   | to pursue better integration        of refineries and logistic assets and seek synergies with        the Exploration & Production segment to monetize        equity crudes and proprietary technologies; |
|--------|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| • |   | to maximize refinery        flexibility and conversion to extract value from heavy        crudes;                                                                                                                 |
| • |   | to convert the Venice plant        into a "bio-refinery" to produce bio-fuels;                                                                                                                          |
| • |   | to achieve energy efficiency        initiatives and ensure higher rates of plant reliability;                                                                                                                     |
| • |   | to rationalize logistic        costs and implement other cost-saving measures;                                                                                                                                    |
| • |   | to strictly select capital        expenditures; and                                                                                                                                                               |
| • |   | to boost margins leveraging        on risk management activities.                                                                                                                                                 |

|                                                                        |
|-----------------------------------------------------------------------------|
| In the marketing activity, we plan to        preserve our profitability by: |

| • |   | strengthening our leadership        in the Italian retail market leveraging on opportunities        deriving from the liberalization process (i.e.        rationalizing stations with low throughput, boosting full        "iperself" mode and development of non-oil        activities); |
|--------|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| • |   | preserving our customer base        by effective marketing actions, rolling out our        "eni" brand and service excellence;                                                                                                                                                            |
| • |   | boosting margins by        increasing the number of fully automated outlets and the        contribution from non-oil products and services; and                                                                                                                                                     |
| • |   | selectively growing our        market share in European markets.                                                                                                                                                                                                                                    |

In the 2013-2016 period, we plan to make capital expendituresamounting to euro 2.4 billion carefully selecting capitalprojects. Management plans to invest approximately euro 1.7billion to convert the Venice plant into a bio-refinery, upgradethe Company’s best refineries mainly by completing andstarting-up the EST (Eni Slurry Technology) project at theSannazzaro unit which will upgrade the conversion capacity of therefinery, as well as improving plant efficiency and reliability.Retail activities will attract some 25% of the plannedexpenditure which will be mainly directed to upgrade andmodernize our service stations in Italy and in selected Europeancountries, and to complete the network rebranding.

Based on the planned initiatives, management expectsEni’s refining and marketing operations to break-evenin the next four-year period assuming a constant tradingenvironment.

*The matters regarding future plans discussed in thissection and elsewhere herein are forward-looking statements thatinvolve risks and uncertainties that could cause the actualresults to differ materially from those in such forward lookingstatements. Such risks and uncertainties include difficulties inobtaining approvals from relevant Antitrust Authorities anddevelopments in the relevant market.*

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> 
***Supply***

In 2012, a total of 62.21 mmtonnes of crude were purchased bythe Refining & Marketing segment (59.02 mmtonnes in 2011),of which 26.92 mmtonnes from Eni’s Exploration &Production segment, 24.95 mmtonnes on the spot market and 10.34mmtonnes were purchased under long-term supply contracts withproducing countries. Approximately 25% of crude purchased in 2012came from Russia, 19% from West Africa, 12% from the North Sea,10% from North Africa, 8% from the Middle East, 6% from Italy and20% from other areas. In 2012, some 36.56 mmtonnes of crudepurchased were marketed (down 4.46 mmtonnes from 2011, or 13.9%).In addition, 4.53 mmtonnes of intermediate products werepurchased (4.26 mmtonnes in 2011) to be used as feedstock inconversion plants and 20.52 mmtonnes of refined products (15.85mmtonnes in 2011) were purchased to be sold on markets outsideItaly (17.24 mmtonnes) and on the domestic market (3.28 mmtonnes)as a complement to available production.

 

> 
***Refining***

In 2012, Eni’s refining system had total refinerycapacity (balanced with conversion capacity) of approximately38.3 mmtonnes (equal to 767 kBBL/d) and a conversion index of61%. Conversion index let to evaluate refinery complexity. Thehigher the index, the wider the spectrum of crude qualities andfeedstock that a refinery is able to process thus enabling it tobenefit from the cost economies which the Company generallyexpects to achieve as certain qualities of crude (particularlythe heavy ones) may trade at discount with reference to the lightcrude Brent benchmark. Eni’s five 100% owned refinerieshave balanced capacity of 28.7 mmtonnes (equal to 574 kBBL/d),with a 64% conversion index. In 2012, Eni’s refineriesthroughputs in Italy and outside Italy was 30.01 mmtonnes.

The table below sets forth certain statistics regardingEni’s refineries as of December 31, 2012.

**Refining system in 2012**

|   |   | Ownership share        (%) |   | Distillation capacity        (total)        (kBBL/d) |   | Distillation capacity        (Eni’s share)        (kBBL/d) |   | Primary balanced refining        capacity (Eni’s share)        (kBBL/d) |   | Conversion index (1)        (%) |   | Fluid catalytic cracking -        FCC (2)        (kBBL/d) |   | Residue conversion        (kBBL/d) |   | Go-Finer        (kBBL/d) |   | Mild Hydro- cracking/        Hydro- cracking        (kBBL/d) |   | Visbreaking/ thermal        cracking        (kBBL/d) |   | Coking        (kBBL/d) |   | Distillation capacity        utilization rate        (Eni’s share)        (%) |   | Balanced refining capacity        utilization rate        (Eni’s share)        (%) |
|--------|--------|----------------------------|--------|------------------------------------------------------|--------|-----------------------------------------------------------------|--------|------------------------------------------------------------------------------|--------|---------------------------------|--------|-----------------------------------------------------------|--------|------------------------------------|--------|--------------------------|--------|--------------------------------------------------------------|--------|------------------------------------------------------|--------|------------------------|--------|------------------------------------------------------------------------------------|--------|-----------------------------------------------------------------------------------------|

|   |   |  |   |  |   |  |   |  |   |  |   |  |   |  |   |  |   |  |   |  |   |  |   |  |   |  |
|--------|--------|--|--------|--|--------|--|--------|--|--------|--|--------|--|--------|--|--------|--|--------|--|--------|--|--------|--|--------|--|--------|--|

| **Wholly owned refineries**                                       |   |   |   | **685**   |   | **685** |   | **574** |   | **64** |   | **69**  |   | **42** |   | **37** |   | **29**  |   | **89**  |   | **46** |   | **61** |   | **73**  |
|-------------------------------------------------------------------|--------|--------|--------|-----------|--------|---------|--------|---------|--------|--------|--------|---------|--------|--------|--------|--------|--------|---------|--------|---------|--------|--------|--------|--------|--------|---------|
| Italy                                                             |   |   |   |      |   |    |   |    |   |   |   |    |   |   |   |   |   |    |   |    |   |   |   |   |   |    |
|      Sannazzaro                          |   | 100    |   | 223       |   | 223     |   | 190     |   | 59     |   | 34      |   | 12     |   |   |   | 29      |   | 29      |   |   |   | 75     |   | 88      |
|      Gela                                |   | 100    |   | 129       |   | 129     |   | 100     |   | 142    |   | 35      |   |   |   | 37     |   |    |   |    |   | 46     |   | 33     |   | 42      |
|      Taranto                             |   | 100    |   | 120       |   | 120     |   | 120     |   | 72     |   |    |   | 30     |   |   |   |    |   | 38      |   |   |   | 66     |   | 66      |
|      Livorno                             |   | 100    |   | 106       |   | 106     |   | 84      |   | 11     |   |    |   |   |   |   |   |    |   |    |   |   |   | 76     |   | 96      |
|      Porto Marghera                      |   | 100    |   | 107       |   | 107     |   | 80      |   | 20     |   |    |   |   |   |   |   |    |   | 22      |   |   |   | 44     |   | 59      |
| **Partially        owned refineries** (3)                         |   |   |   | **874**   |   | **245** |   | **193** |   | **51** |   | **167** |   | **25** |   |   |   | **99**  |   | **27**  |   |   |   | **79** |   | **100** |
| Italy                                                             |   |   |   |      |   |    |   |    |   |   |   |    |   |   |   |   |   |    |   |    |   |   |   |   |   |    |
|      Milazzo                             |   | 50     |   | 248       |   | 124     |   | 80      |   | 76     |   | 45      |   | 25     |   |   |   | 32      |   |    |   |   |   | 73     |   | 113     |
| Germany                                                           |   |   |   |      |   |    |   |    |   |   |   |    |   |   |   |   |   |    |   |    |   |   |   |   |   |    |
|      Vohburg/Neustadt        (Bayernoil) |   | 20     |   | 215       |   | 43      |   | 41      |   | 36     |   | 49      |   |   |   |   |   | 43      |   |    |   |   |   | 92     |   | 96      |
|      Schwedt                             |   | 8.33   |   | 231       |   | 19      |   | 19      |   | 42     |   | 49      |   |   |   |   |   |    |   | 27      |   |   |   | 101    |   | 104     |
| Czech        Republic                                             |   |   |   |      |   |    |   |    |   |   |   |    |   |   |   |   |   |    |   |    |   |   |   |   |   |    |
|      Kralupy e Litvinov                  |   | 32.4   |   | 180       |   | 58      |   | 53      |   | 30     |   | 24      |   |   |   |   |   | 24      |   |    |   |   |   | 75     |   | 83      |
| **Total        refineries**                                       |   |   |   | **1,559** |   | **930** |   | **767** |   | **61** |   | **236** |   | **67** |   | **37** |   | **128** |   | **116** |   | **46** |   | **72** |   | **80**  |

|   |   |  |   |  |   |  |   |  |   |  |   |  |   |  |   |  |   |  |   |  |   |  |   |  |   |  |
|--------|--------|--|--------|--|--------|--|--------|--|--------|--|--------|--|--------|--|--------|--|--------|--|--------|--|--------|--|--------|--|--------|--|

----

| (1) |    | Stated in        fluid catalytic cracking equivalent/topping (% by        weight), based on 100% of balanced primary distillation        capacity.                                                                                                      |
|-----|--------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| (2) |    | Conversion        plant where vacuum feedstock undergoes cracking at high        pressure and moderate temperature thus producing mostly        high quality gasoline. This kind of plant guarantees high        operating flexibility to the refinery. |
| (3) |    | Capacity of        conversion plant is 100%.                                                                                                                                                                                                            |

> 
*Italy*

Eni’s refining system in Italy is composed of five whollyowned refineries and a 50% share in the Milazzo refinery inSicily. Eni’s refineries in Italy operate and plan in orderto maximize asset value according to the markets and theintegration with Eni’s other activities.

**Sannazzaro** refinery has balanced refining capacity of190 kBBL/d and a conversion index of 59%. Management believesthat this site is one of the most efficient refineries in Europe.Located in the Po Valley, it mainly supplies markets inNorth-Western Italy and Switzerland. The high flexibility andconversion capacity of this refinery allows it to process a widerange of feedstock. From a logistical standpoint this refinery islocated along the route of the Central Europe Pipeline, whichlinks the Genoa terminal with French speaking Switzerland. Thisrefinery contains two primary distillation plants and relevantfacilities, including three desulphurization units. Conversion isobtained through a fluid catalytic cracker (FCC), twohydrocrackers (HdC), the last unit entered into operations inJune 2009, which enable middle distillate conversion and avisbreaking thermal conversion unit with a gasification facilityloaded with heavy residue from visbreaking unit (tar) to producesyn-gas to feed the nearby EniPower power plant at FerreraErbognone. The most important currently underway project is EST(Eni Slurry Technology) a conversion plant with a 23 kBBL/d 

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capacity in order to process extra heavy crude with highsulphur content increasing middle distillates, reducing fuel oil.Start-up of this facility is scheduled by 2013. Therefore, Eni isdeveloping conversion technology of Slurry Dual Catalyst (anevolution of EST), based on a combination of two nano-catalysts,could lead to a relevant breakthrough in the EST process,increasing its productivity and improving product quality,reducing expenditure and operating costs.

A further project is the proprietary process for hydrogenproduction, Hydrogen SCT-CPO (Short Contact Time-CatalyticPartial Oxidation) and the design is nearly over. This reformingtechnology transforms gaseous and liquid hydrocarbons (alsoderived from bio-mass) into synthetic gas (carbon monoxide andhydrogen) at competitive costs.

**Taranto** refinery has balanced refining capacity of 120kBBL/d and a conversion index of 72%. This refinery process mostof oil produced in Eni’s Val d’Agri fields carried toTaranto through the Monte Alpi pipeline (in 2012 a total of 2.26mmtonnes of this oil were processed). It principally producesfuels for automotive use and residential heating purposes for theSouthern Italian markets.

The complexity is achieved through a Residue HydroconversionUnit (RHU) - Hydrocracking process and a "Two Stage"Visbreaking-Thermal Cracking unit.

**Gela** refinery has balanced refining capacity of 100kBBL/d and a conversion index of 142%. Located on the Southerncoast of Sicily, it is integrated with upstream operationsprocessing heavy crude produced from Eni’s nearby offshoreand onshore fields. Its high conversion level is ensured by anFCC unit with go-finer for feedstocks upgrading and two cokingplants enabling conversion of heavy residues topping or vacuumresidues. In order to achieve full compliance with the tightestenvironmental standards, in the power station there is SNOx plantto remove suphur dioxide, nitrogen oxides and particulates fromflue gases. An underway refurbishment of the Gela power plant,substantially renewing pet-coke boilers, will increaseprofitability maximizing synergies from refining and powergeneration.

**Livorno** refinery, with balanced refining capacity of 84kBBL/d and a conversion index of 11%, manufactures mainlygasoline, fuel oil for bunkering and lubricant bases. Besides itsprimary distillation plants, this refinery contains two lubricantmanufacturing lines. Its infrastructures including highways,railways and pipeline connecting the site with the local harborand with the Florence storage sites through two pipelinesoptimizing intake, handling and distribution of products.

**Porto Marghera** refinery, with balanced refiningcapacity of 80 kBBL/d and a conversion index of 20%, suppliesmainly markets in North-Eastern Italy and Austria. Besides itsprimary distillation plants, this refinery contains a two-stagethermal conversion plant (visbreaking/thermal cracking) toincrease yields of valuable products.

Eni will turn the refinery into a "bio-refinery"based on proprietary technology for the production of bio-dieselbased on its Ecofining technology. The conversion to a GreenRefinery will begin in the second quarter of 2013 and startbio-fuel production in 2014 and will be associated with alogistics center.

> 
*Outside Italy*

In Germany, Eni’s share in the Schwedt refinery is 8.3%and 20% in Bayernoil, an integrated industrial hub that includesVohburg and Neustadt refineries. Eni’s refining capacity inGermany is approximately 60 kBBL/d mainly to supply Eni’sdistribution network in Bavaria and Eastern Germany. In CzechRepublic, Eni’s share is 32.4% in Ceska Rafinerska, thatincludes two refineries, Kralupy and Litvinov. Eni’srefining capacity amounts to about 53 kBBL/d to supply EasternEurope.

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Table below sets forth Eni’s products availabilityfigures for the periods indicated.

| **Availability        of refined products** |   | **2010** |   | **2011** |   | **2012** |
|---------------------------------------------|--------|----------|--------|----------|--------|----------|
|                                        |   |          |   |          |   |          |

|   |   | **(mmtonnes)** |
|--------|--------|----------------|

| **ITALY**                                                              |   |      |   |   |      |   |   |      |   |
|------------------------------------------------------------------------|--------|-----------|--------|--------|-----------|--------|--------|-----------|--------|
| **Refinery        throughputs**                                        |   |      |   |   |      |   |   |      |   |
| At wholly-owned refineries                                             |   | 25.70     |   |   | 22.75     |   |   | 20.84     |   |
| Less input        on account of third parties                          |   | (0.50     | )      |   | (0.49     | )      |   | (0.47     | )      |
| At affiliated refineries                                               |   | 4.36      |   |   | 4.74      |   |   | 4.52      |   |
| **Refinery        throughputs on own account**                         |   | **29.56** |   |   | **27.00** |   |   | **24.89** |   |
| Consumption and losses                                                 |   | (1.69     | )      |   | (1.55     | )      |   | (1.34     | )      |
| **Products        available for sale**                                 |   | **27.87** |   |   | **25.45** |   |   | **23.55** |   |
| Purchases of refined products and change in        inventories         |   | 4.24      |   |   | 3.22      |   |   | 3.35      |   |
| Products        transferred to operations outside Italy                |   | (4.18     | )      |   | (1.77     | )      |   | (2.36     | )      |
| Consumption for power generation                                       |   | (0.92     | )      |   | (0.89     | )      |   | (0.75     | )      |
| **Sales        of products**                                           |   | **27.01** |   |   | **26.01** |   |   | **23.79** |   |
| **OUTSIDE ITALY**                                                      |   |      |   |   |      |   |   |      |   |
| **Refinery        throughputs on own account**                         |   | **5.24**  |   |   | **4.96**  |   |   | **5.12**  |   |
| Consumption and losses                                                 |   | (0.24     | )      |   | (0.23     | )      |   | (0.23     | )      |
| **Products        available for sale**                                 |   | **5.00**  |   |   | **4.73**  |   |   | **4.89**  |   |
| Purchases of finished products and change in        inventories        |   | 10.61     |   |   | 12.51     |   |   | 17.29     |   |
| Products        transferred from Italian operations                    |   | 4.18      |   |   | 1.77      |   |   | 2.36      |   |
| **Sales of products**                                                  |   | **19.79** |   |   | **19.01** |   |   | **24.54** |   |
|                                                                   |   |           |        |   |           |        |   |           |        |
| **Refinery        throughputs on own account**                         |   | **34.80** |   |   | **31.96** |   |   | **30.01** |   |
| *of which: refinery throughputs of equity        crude on own account* |   | *5.02*    |   |   | *6.54*    |   |   | *6.39*    |   |
|                                                                   |   |           |        |   |           |        |   |           |        |
| **Total        sales of refined products**                             |   | **46.80** |   |   | **45.02** |   |   | **48.33** |   |
| **Crude oil sales**                                                    |   | **36.17** |   |   | **32.10** |   |   | **36.56** |   |
|                                                                   |   |           |        |   |           |        |   |           |        |
| **TOTAL        SALES**                                                 |   | **82.97** |   |   | **77.12** |   |   | **84.89** |   |
|                                                                   |   |           |        |   |           |        |   |           |        |

In 2012, refining throughput was 30.01 mmtonnes, decreased of1.95 mmtonnes, or 6.1% versus 2011. Processed volumes in Italy,decreased of 7.8% compared to 2011, due to scheduled shutdowns inorder to mitigate negative scenario impact mainly in Gela(shutdown of two production lines since June 2012) and Taranto(TSTC shutdown). Throughput reduction is partly offset by highervolumes processed in Venice ( shutdown from November 2011 toApril 2012). Outside Italy, Eni’s refining throughputsincreased by 3.2% (approximately 160 ktonnes) in particular inCRC for the Litvinov refinery shutdown in 2011. Wholly-ownedrefineries throughput is 20.84 mmtonnes, decreased of 1.91mmtonnes (down 8.4%) versus 2011 with a refinery utilization rateof 73%, in reduction versus 2011 according to negative scenario.Approximately 22.8% was supplied by segment representing a 0.5percentage point increase from 2011 (22.3%).

Eni’s Exploration & Production segment suppliedapproximately 22.8% of crudes, up 0.5% versus 2011.

 

> 
***Logistics***

Eni is a primary operator in storage and transport ofpetroleum products in Italy with its logistical integratedinfrastructure consisting of 20 directly managed storage sitesand a network of petroleum product pipelines for products saleand storage of LPG and crude. Located in the Vado Ligure-Genova(Petrolig), Arquata Scrivia (Sigemi), Venice (Petroven), Ravenna(Petra) and Trieste (DCT) sites, they reduce logistic costs, andincrease efficiency.

Eni’s logistic model is based on a hub structure coveringfive main areas. These hubs monitor and centralize products flowsin order to lower collection and delivery costs. Eni holds fivepartnerships with major Italian operators.

Eni operates in oil and refined products transport: (i) by seathrough spot and long-term contracts of tanker ships; and (ii)through an owned pipeline network extending approximately1,447-kilometer long.

Secondary distribution to retail and wholesale markets iscarried out through outsourcing to little tanker owners andrepresent leading market positions in their own geographicalarea.

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> 
**Marketing**

Eni markets a wide range of refined petroleum products,primarily in Italy, through an extensive operated network ofservice stations, franchises and other distribution systems.

The table below sets forth Eni’s sales of refinedproducts by distribution channel for the periods indicated.

| **Oil        products sales in Italy and outside Italy** |   | **2010** |   | **2011** |   | **2012** |
|----------------------------------------------------------|--------|----------|--------|----------|--------|----------|
|                                                     |   |          |   |          |   |          |

|   |   | **(mmtonnes)** |
|--------|--------|----------------|

| *Italy*                |   |      |   |      |   |      |
|------------------------|--------|-----------|--------|-----------|--------|-----------|
| Retail                 |   | 8.63      |   | 8.36      |   | 7.83      |
| Wholesale              |   | 9.45      |   | 9.36      |   | 8.62      |
|                   |   | **18.08** |   | **17.72** |   | **16.45** |
| Petrochemicals         |   | 1.72      |   | 1.71      |   | 1.26      |
| Other        sales     |   | 7.21      |   | 6.58      |   | 6.08      |
| **Total**              |   | **27.01** |   | **26.01** |   | **23.79** |
| *Outside        Italy* |   |      |   |      |   |      |
| Retail                 |   | 3.10      |   | 3.01      |   | 3.04      |
| Wholesale              |   | 4.30      |   | 4.27      |   | 4.38      |
|                   |   | **7.40**  |   | **7.28**  |   | **7.42**  |
| Other        sales     |   | 12.39     |   | 11.73     |   | 17.12     |
| **Total**              |   | **19.79** |   | **19.01** |   | **24.54** |
|                   |   |           |   |           |   |           |
| **TOTAL        SALES** |   | **46.80** |   | **45.02** |   | **48.33** |
|                   |   |           |   |           |   |           |

In 2012, sales volumes of refined products (48.33 mmtonnes)increased by 3.31 mmtonnes from 2011, up 7.4%, due mainly toincreased volumes sold to oil companies and traders outsideItaly.

 

> 
***Retail sales in Italy***

In 2012, retail sales in Italy of 7.83 mmtonnes decreased byapproximately 530 ktonnes, down 6.3%, from 2011 driven by lowerconsumption of gasoil and gasoline, in particular in highwayservice stations related to the decline in freighttransportation. Average gasoline and gasoil throughput (1,976kliters) decreased by approximately 197 kliters from 2011.Eni’s retail market share for 2012 was 31.2%, up 0.7percentage points from 2011.

At December 31, 2012, Eni’s retail network in Italyconsisted of 4,780 service stations, 79 more than at December 31,2011 (4,701 service stations), resulting from the positivebalance of acquisitions/releases of lease concessions (92 units)and the opening of new service stations (10 units), partly offsetby the closing of service stations with low throughput (23units).

In 2012, sales of premium fuels (fuels of the "EniBlu+" line with high performance and lower environmentalimpact) were also affected by the decline in domestic consumptionand were lower than the previous year. In particular, sales ofEni bludiesel+ amounted to approximately 292 ktonnes(approximately 350 mmliters) with a decline of approximately 201ktonnes from 2011 and represented 6% of volumes of gasoilmarketed by Eni’s retail network. At December 31, 2012,service stations marketing BluDiesel+ totaled 4,123 units (4,130at 2011 year-end) covering approximately 86% of Eni’snetwork. Retail sales of BluSuper+ amounted to 35 ktonnes(approximately 47 mmliters), decreasing by 27 ktonnes from 2011,and covered 1.5% of gasoline sales on Eni’s retail network(down 0.9% from a year ago). At December 31, 2012, servicestations marketing BluSuper+ totaled 2,505 units (2,703 atDecember 31, 2011), covering approximately 52% of Eni’snetwork.

Within the initiatives aimed to spur consumption in a negativeeconomic scenario and create sounder customer relationships, Enilaunched two relevant campaigns: (i) in the summer of 2012 fortwelve weekends in Eni stations the "riparti con eni"initiative provided customers in the hyperself mode of service anexceptionally lower price equal all over the Country; and (ii)the launch of a new "loyalty card", consisting inreloadable, prepaid and credit card versions, through whichcustomers can accumulate many more points in the Eni and Agipbranded service stations that can be used for all daily purchasesmade outside of the Eni network in over 30 million stores.

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> 
***Retail sales in the rest of Europe***

Eni’s strategy in the rest of Europe is focused onselectively growing its market share, particularly in Germany,Austria and Eastern Europe (e.g. Czech Republic) leveraging onthe synergies ensured by the proximity of these markets toEni’s production and logistic facilities.

In 2012, retail sales of refined products marketed in the restof Europe (3.04 mmtonnes) were basically stable (up 1%). Volumeadditions in Austria and Switzerland reflecting successfulcommercial policies were almost completely offset by lower salesin Eastern Europe due to declining demand.

At December 31, 2012, Eni’s retail network in the rest ofEurope consisted of 1,604 service stations, an increase of 18units from December 31, 2011 (1,586 service stations). Thenetwork evolution was as follows: (i) the closing of 28 lowthroughput service stations mainly in Austria and France; (ii)the positive balance of acquisitions/releases of leaseconcessions (33 units) in particular in Austria; (iii) thepurchase of 11 service stations, in particular in Austria; and(iv) the opening of 2 new outlets. Average throughput (2,319kliters) increased by 20 kliters from 2011 (2,299 kliters).

The key markets of Eni’s presence are: Austria with a11.7% market share, Hungary with 11.9%, Czech Republic with10.8%, Slovakia with 9.7%, Switzerland with 7.1% and Germany witha 3.2% on national base. These market shares were calculated byEni based on public data on national consumption and Eni’ssales volumes. Non-oil activities in the rest of Europe arepresent in 1,083 service stations (Eni owned network), of which320 are in Germany, 208 in Austria and 135 in France, with avirtually complete of owned stations.

 

> 
***Other businesses***

*Wholesale*

Eni markets gasoline and other fuels on the wholesale marketin Italy, including diesel fuel for automotive use and forheating purposes, for agricultural vehicles and for vessels andfuel oil. Major customers are resellers, agricultural users,manufacturing industries, public utilities and transports, aswell as final users (transporters, condominiums, farmers,fishers, etc.). Eni provides its customers with its expertise inthe area of fuels with a wide range of products that cover allmarket requirements. Along with traditional products providedwith the high quality Eni standard, there is also an innovativelow environmental impact line, which includes AdvanceDieselespecially targeted for heavy duty public and private transports.Customer care and product distribution is supported by awidespread commercial and logistical organization presence allover Italy and articulated in local marketing offices and anetwork of agents and concessionaires.

In 2012, sales volumes on wholesale markets in Italy (8.62mmtonnes) declined by approximately 740 ktonnes, down 7.9%,mainly due declining sales of gasoline and gasoil related to adecline in demand from transports and industrial customers due toa generalized slowdown and lower jet fuel sales related todeclining demand. Bitumen sales increased due increased productavailability of Eni products related to downtime in competingrefineries, in particular in the final part of the year. Averagemarket share in 2012 was 29.5% (28.6% in 2011). Supplies offeedstock to the petrochemical industry (1.26 mmtonnes) droppedfrom 2011 (down 450 ktonnes) due to lower demand from industrialcustomers. Wholesale sales in the rest of Europe of approximately3.96 mmtonnes increased by 3.1% from 2011 due to increased salesin Switzerland, the Czech Republic, Slovenia and France. Salesdeclined in Hungary, Austria and Germany. Other sales (23.20mmtonnes) increased by 4.89 mmtonnes, or 27%, mainly due tohigher sales volumes to oil companies.

Eni also markets jet fuel directly at 45 airports, of which 26are in Italy. In 2012, these sales amounted to 2.0 mmtonnes (ofwhich 1.6 mmtonnes are in Italy). Eni is also active in theinternational market of bunkering, marketing marine fuel mainlyin 106 ports, of which 72 are in Italy. In 2012, marine fuelsales were 1.75 mmtonnes (1.67 mmtonnes in Italy).

 

> 
*LPG*

In Italy, Eni is leader in LPG production, marketing and salewith 614 ktonnes sold for heating and automotive use equal to a19.8% market share. An additional 206 ktonnes of LPG weremarketed through other channels mainly to oil companies andtraders. LPG activities in Italy are supported by directproduction, availability from 5 bottling plants and 4 ownedstorage sites, in addition to products imported at coastalstorage sites located in Livorno, Naples and Ravenna.

Outside Italy, LPG sales in 2012 amounted to 515 ktonnes ofwhich 389 ktonnes in Ecuador where LPG market share is around37.8%.

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> 
*Lubricants*

Eni operates six (owned and co-owned) blending plants, inItaly, Europe, North and South America, Africa and the Far East.With a wide range of products composed of over 650 differentblends Eni masters international state-of-art know-how for theformulation of products for vehicles (engine oil, special fluidsand transmission oils) and industries (lubricants for hydraulicsystems, industrial machinery and metal processing). In Italy,Eni is leader in the manufacture and sale of lubricant bases.Base oils are manufactured primarily at Eni’s refinery inLivorno. Eni also owns one facility for the production ofadditives and solvents in Robassomero. In 2012, retail andwholesale sales in Italy amounted to 96 ktonnes with a 24.3%market share. Eni also sold approximately 4 ktonnes of specialproducts (white oils, transformer oil and anti-freeze fluids).Outside Italy sales amounted to approximately 140 ktonnes, ofthese about 60% were registered in Europe (mainly Spain, Germany,Austria and France).

 

> 
*Oxygenates*

Eni, through its subsidiary Ecofuel (100% Eni’s share),sells approximately 1.10 mmtonnes/y of oxygenates, mainly ethers(approximately 3.1% of world demand) and methanol (approximately0.6% of world demand). About 76% of oxygenates are produced inEni’s plants in Italy (Ravenna), in Venezuela (in jointventure with Pequiven) and Saudi Arabia (in joint venture withSabic) and the remaining 24% is bought and resold. Enidistributes bio-ETBE in the Italian market in compliance with thenew legislation indicating minimum content of bio-fuels. Bio-ETBElike MTBE is an octane booster gained a relevant position in theformulation of gasoline in European Union, because it is producedfrom ethanol from agricultural crops and qualified asbio-component in European directive on bio-fuels. Starting fromMarch 1, 2010, Italian regulation on bio-fuels minimum contentchanged from 3% to 3.5%.

From January 1, 2012, the compulsory content of bio-fuelsincreases to 4.5% from 2011 4% and through Bio-ETBE andbio-diesel (of 1st and 2nd generation)blending into fossil fuels Eni covered the compliance within109.6% in 2012.

Eni plans to cover compliance through Bio-ETBE, FAME, greendiesel from Porto Marghera site, and direct blending of ethanolin gasoline in particular in some extents of Sannazzaro refineryinland.

 

> 
***Capital expenditures***

See "Item 5 – Liquidity and capital resources –Capital expenditures by segment".

 

**Engineering & Construction**

Eni engages in engineering, construction and drilling bothoffshore and onshore for the oil&gas industry through Saipem,a subsidiary listed on the Italian Stock Exchange (Eni’sinterest is 43%), and Saipem’s controlled entities. Saipemboasts a strong competitive position in the market for servicesto the oil industry, particularly in executing large, complex EPCcontracts for the construction of offshore and onshore facilitiesand systems to develop hydrocarbons reserves as well as LNG,refining and petrochemicals plants, pipeline laying and offshoreand onshore drilling services. The Company owes its marketposition to technological and operational skills which we believeare acknowledged in the marketplace due to its capabilities tooperate in frontier areas and complex ecosystems, efficiently andeffectively managing large projects, engineering competencies andavailability of technologically-advanced vessels and rigs whichhave been upgraded in recent years through a large capitalexpenditure plan. Despite the above mentioned factors, in theshort term the profitability prospects of this business areexpected to be adversely affected by the conclusion ofhighly-profitable projects, an anticipated slowdown in orderacquisitions and the start of lower margin projects in theOnshore and Offshore Engineering & Construction businesses.

Management expects a weak profitability outlook in 2013 due tothe completion of highly-profitable orders, a slowdown inactivities at the Onshore and Offshore construction businessunits as well as the start-up of low-margin works. 

However management believes that medium to long-term prospectsof the business remains sound.

Management expects to preserve Saipem’s competitiveposition in the medium term, leveraging on its business modelarticulated across various market sectors combined with a strongcompetitive position in frontier areas, which are traditionallyless exposed to the cyclical nature of this market. In particularSaipem plans to implement the following 

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strategic guidelines: (i) to maximize efficiency in allbusiness areas at the same time maintaining top execution andsecurity standards, preserve competitive supply costs, optimizethe utilization rate of the fleet, increase structure flexibilityin order to mitigate the effects of negative business cycles aswell as develop and promote a company culture that will permitidentification and management of risks and businessopportunities; (ii) to continue focusing on the more complex anddifficult projects in the strategic segments of deepwater, FPSO,heavy crude and LNG (offshore and onshore, for the gasmonetization) upgrading; (iii) to promote local content in termsof employment of local contractors and assets in strategiccountries where large projects are carried out supporting thedevelopment of delocalized logistic hubs and construction yardswhen requested by clients in order to achieve a long-termconsolidation of its market position in those countries; (iv) toleverage on the capacity to execute internally more phases oflarge projects on an EPC and EPIC basis, pursuing better controlof costs and terms of execution adapting with flexibility toclients’ needs, thus expanding the Company’s valueproposition; and (v) to complete the expansion and revampingprogram of its construction and drilling fleet in considerationof the future needs of the oil&gas industry, in order toconfirm the Company’s leading position in the segment ofcomplex projects with high profitability.

Saipem expects to invest approximately euro 2.8 billion overthe next four years to complete the upgrading program of itsfleet of vessels and rigs, further expanding the operationalfeatures, the dimension and the geographical reach and of itsfleet as well as to support the activities related to theexecution of projects in portfolio and the acquisition of neworders.

Orders acquired amounted to euro 13,391 million as of December31, 2012 (euro 12,505 million as of December 31, 2011), of theseprojects to be carried out outside Italy represented 96%, whileorders from Eni companies amounted to 5% of the total. Orderbacklog amounted to euro 19,739 million at December 31, 2012(euro 20,417 million at December 31, 2011), of these projects tobe carried out outside Italy represented 91%, while orders fromEni companies amounted to 13% of the total.

|   |   | **2010** |   | **2011** |   | **2012** |
|--------|--------|----------|--------|----------|--------|----------|
|   |   |          |   |          |   |          |

| **Orders acquired**                                |   | (euro million) |   | **12,935** |   | **12,505** |   | **13,391** |
|----------------------------------------------------|--------|----------------|--------|------------|--------|------------|--------|------------|
| Engineering        & construction offshore     |   |           |   | 4,600      |   | 6,131      |   | 7,477      |
| Engineering & construction onshore             |   |           |   | 7,744      |   | 5,006      |   | 3,972      |
| Offshore        drilling                           |   |           |   | 326        |   | 780        |   | 1,025      |
| Onshore drilling                                   |   |           |   | 265        |   | 588        |   | 917        |
| Originated        by Eni companies                 |   | (%)            |   | 7          |   | 7          |   | 5          |
| To be carried out outside Italy                    |   | (%)            |   | 94         |   | 91         |   | 96         |
| **Order        backlog and breakdown by business** |   | (euro million) |   | **20,505** |   | **20,417** |   | **19,739** |
| Engineering & construction offshore            |   |           |   | 5,544      |   | 6,600      |   | 8,721      |
| Engineering        & construction onshore      |   |           |   | 10,543     |   | 9,604      |   | 6,701      |
| Offshore drilling                                  |   |           |   | 3,354      |   | 3,301      |   | 3,238      |
| Onshore        drilling                            |   |           |   | 1,064      |   | 912        |   | 1,079      |
| Originated by Eni companies                        |   | (%)            |   | 16         |   | 14         |   | 13         |
| To be        carried out outside Italy             |   | (%)            |   | 94         |   | 91         |   | 91         |
|                                               |   |           |   |            |   |            |   |            |

 

> 
*Engineering & Construction offshore*

Saipem is well positioned in the market of large, complexprojects for the development of offshore hydrocarbon fieldsleveraging on its technical and operational skills, supported bya technologically-advanced fleet, the ability to operate incomplex environments, and engineering and project managementcapabilities acquired on the marketplace over recent years.Saipem intends to consolidate its market share strengthening itsEPIC oriented business model and leveraging on its satisfactorylong-term relationships with the major oil companies and NationalOil Companies ("NOCs"). Higher levels of efficiency andflexibility are expected to be achieved by reaching thetechnological excellence and the highest economies of scale inits engineering hubs employing local resources in contexts wherethis represents a competitive advantage, integrating in its ownbusiness model the direct management of construction processthrough the creation of a large construction yard in South-EastAsia and revamping/upgrading its construction fleet. Over thenext years, Saipem will invest in the upgrading of its fleet, theconstruction of a large construction yard in Brazil and theacquisition of new rigs in the drilling segments.

Saipem’s offshore construction fleet is made up 35vessels and a large number of robotized vehicles able to performadvanced sub-sea operations. Its major vessels are: (i) theSaipem 7000 semi-submersible dynamic positioned vessel, with 14ktonnes of lift capacity, capable to lay pipelines using theJ-lay technique to the maximum depth of 3,000 meters; (ii) theField Development Ship for the development of underwater fieldsin dynamic positioning, provided with cranes lifting up to 600tonnes and a system for J-lay pipe laying to a depth of 2,000meters; (iii) the Castoro 6 semi-submersible vessel, capable oflaying pipes in waters up to 1,000 meters deep; (iv) the Saipem3000 self-propelled dynamically positioned derrick crane ship,capable of laying flexible pipes and umbilicals in deep watersand of lifting structures weighing up to 2,200 tonnes; and (v)the Semac semi-submersible vessel used for large 

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diameter underwater pipe laying. The fleet also includesremotely operated vehicles (ROV), highly sophisticated andadvanced underwater robots capable of performing complexinterventions in deep waters.

The most significant orders awarded in 2012 in Engineering& Construction offshore construction were: (i) the EPCIcontract with INPEX for the installation of an underwaterpipeline 889-kilometer long linking the offshore Ichthys fieldwith the onshore shut-off valves in the area of Darwin,Australia; (ii) an EPCI contract with Lukoil for the installationof two underwater pipelines linking the offshore VladimirFilanovsky block in the northern area of the Caspian Sea, withthe onshore facility 20 kilometers inland in the Russian Republicof Kalmyk. Works offshore will be performed mainly by thepipelaying barge Castoro 12 and the trenching vessel Castoro 16;and (iii) an EPIC contract with Petrobras for the projectSapinhoa Norte and Cernambi Sul, within the development of thePre-Salt Risers in the Santos Basin, approximately 300-kilometeroff the coasts of the Rio de Janeiro and Sao Paulo states,Brazil, in water depths of 2,200 meters.

 

> 
*Engineering & Construction onshore*

In the Engineering & Construction onshore constructionbusiness, Saipem is one of the largest operators on turnkeycontract base at a worldwide level in the oil&gas segment,especially through the acquisition of Snamprogetti. Saipemoperates in the construction of plants for hydrocarbon production(extraction, separation, stabilization, collection ofhydrocarbons, water injection) and treatment (removal andrecovery of sulphur dioxide and carbon dioxide, fractioning ofgaseous liquids, recovery of condensates) and in the installationof large onshore transport systems (pipelines, compressionstations, terminals). Saipem preserves its own competitivenessthrough its technology excellence granted by its engineeringhubs, its distinctive know-how in the construction of projects inthe high-tech market of LNG and the management of large parts ofengineering activities in cost efficient areas. In the mediumterm, underpinning upward trends in the oil service market,Saipem will be focused on taking advantage of the opportunitiesarising from the market in the plant and pipeline segmentsleveraging on its solid competitive position in the realizationof complex projects in the strategic areas of Middle-East,Caspian Sea, Northern and Western Africa and Russia.

The most significant orders awarded in 2012 in Engineering& Construction onshore were: (i) a turn-key contract forShell concerning the SSAGS (Southern Swamp Associated Gas)project related to the construction of four compression stationsand new production facilities for the treatment of collected gasin various areas of the Delta State in Nigeria; (ii) an EPCcontract for Saudi Aramco and Sumitomo Chemical for the Naphthaand Aromatics Package (RP2) of the Rabigh II project whichprovides for the expansion of the integrated petrochemical andrefining complex of Rabigh, a city located on the western coastof Saudi Arabia; and (iii) an EPC contract for Transportadora deGas Natural Norte-Noroeste (a wholly-owned Transcanadasubsidiary) for a 30 inches in diameter and approximately550-kilometer long pipeline between El Encino, located in theChihuahua State, to Topolobampo, in the Sinaloa State on thewestern coast of Mexico.

 

> 
*Offshore drilling*

Saipem is the only engineering and construction contractorthat provides also offshore and onshore drilling services to oilcompanies. In the offshore drilling segment Saipem mainlyoperates in West Africa, the North Sea, Mediterranean Sea and theMiddle East and boasts significant market positions in the mostcomplex segments of deep and ultra-deep offshore, leveraging onthe outstanding technical features of its drilling platforms andvessels, capable of drilling exploration and development wells ata maximum depth of 9,200 meters. In order to better meet industrydemands, Saipem is finalizing an upgrading program of itsdrilling fleet providing it with state-of-art rigs to enhance itsrole as high quality player capable of operating also in complexand harsh environments. In parallel, investments are ongoing torenew and to keep up the production capacity of other fleetequipment (upgrade equipment to the characteristics of projectsor to clients’ needs and purchase of support equipment).

Saipem’s offshore drilling fleet consists of 18 vesselsfully equipped for its primary operations and some drillingplants installed on board of fixed offshore platforms. Its majorvessels are: the Saipem 12000 and Saipem 10000, designed toexplore and develop hydrocarbon reservoirs operating in excess of3,600 and 3,000 meter water depth, respectively in full dynamicpositioning. In 2010, those vessels operated in West Africa andFar East. Other relevant vessels are Scarabeo 8 and 9, sixthgeneration semi-submersible rigs able to operate at depths of3,000 and 3,600 meters of water, respectively. Averageutilization of drilling vessels in 2012 stood at 100% (100% in2011).

The most significant orders awarded in 2012 in Offshoredrilling were: (i) the 15-month extension of the drillingcontract of the Scarabeo 7 operating offshore Indonesia; (ii) the24-month extension of the contract of the Perro Negro jack-upoperating offshore Italy; and (iii) the 36-month lease contractof Scarabeo 5 operating in the Northern Sea.

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> 
*Onshore drilling*

Saipem operates in this area as a main contractor for themajor international oil companies and NOCs executing its activitymainly in South America, Saudi Arabia, North Africa and, at alower extent, in Europe. In this area Saipem can leverage itsknowledge of the market, long-term relations with customers andsynergies and integration with other business areas. Saipemboasts a solid track record in remote areas (in particular in theCaspian Sea), leveraging on its own operational skills and itsability to operate in complex environments.

Average utilization of rigs in 2012 stood at 97.2% (96.1% in2011). The 92 rigs (in addition to 5 rigs under completion) ownedby Saipem at year end were located as follows: 28 in Venezuela,18 in Peru, 12 in Saudi Arabia, 7 in Colombia, 6 in Algeria, 5 inKazakhstan, 4 in Bolivia, 4 in Ecuador, 3 in Brazil, 2 in Congo,1 in Italy, 1 in Ukraine and 1 in Mauritania and Saipem also usedrigs owned by third parties (6 in Peru, 3 in Kazakhstan and 1 inCongo) as well as rigs owned by the joint company Saipar.

The most significant orders awarded in 2012 in Onshoredrilling were: (i) a contract on behalf of Saudi Aramco for thelease of 15 facilities for a term ranging from three to fiveyears in Saudi Arabia; and (ii) the contracts for 8 facilities tobe employed in South America, Saudi Arabia, Kazakhstan, Algeria,Mauritania and Italy for periods ranging from 2 months to twoyears.

 

> 
***Capital expenditures***

See "Item 5 – Liquidity and capital resources –Capital expenditures by segment".

 

**Chemicals**

Eni operates in the businesses of olefins and aromatics, basicand intermediate products, polystyrene, elastomers andpolyethylene. Its major production sites are located in Italy andWestern Europe.

Eni’s strategy in its chemical business is to effectivelyand efficiently manage operations in order to lower thebreak-even considering the volatility of costs of oil-basedfeedstock, cyclicality in demand, strong competitive pressuresfrom operators with lower cost structure especially in the Middleand Far East, taking into account the commoditized nature of manyof Eni’s products.

In fact, Eni’s profitability in the petrochemicalbusinesses is particularly sensitive to movements in productmargins that are mainly affected by changes in oil-basedfeedstock costs and the speed at which product prices adjust tohigher oil prices. See "Item 3 – Risk factors".

In 2012, the Chemical segment reported sharply higheroperating losses from 2011 mainly reflecting the fall incommodities demand due to the economic downturn and theunprofitable product margins of oil-based commodities which weresqueezed by high crude oil costs.

Management expects that a weak macroeconomic outlook for 2013which will weigh on a rebound in demand for petrochemicalproducts while ongoing trends in crude oil prices could pressureunit margins of commodities. In light of this, management isplanning to implement a strategy intended to refocusing thechemical business, reducing the exposure to loss-making commoditychemicals while at the same time developing innovative and nicheproductions which are expected to yield better returns such aselastomers and the expansion of the specialties segment.

We intend to grow the green chemistry business leveraging onthe ongoing project of converting our Porto Torres site in amodern plant for the manufacture of eco-compatible chemicalproducts. This will allow us to: (i) diversify its petrochemicalcore business in the direction of an innovative sector with veryhigh potential, supplying products with low environmental impact;and (ii) settle the issues at critical industrial sites,re-qualifying and restructuring them.

In 2012 Matrìca SpA, a new 50-50 joint venture with Novamont,started the construction of the first two plants of the GreenPole project (bio-monomers and bio-lubricants). When fullyoperational in 2016-2017, the pole will include 7 plants and oneresearch centre, with a total expenditure of approximately euro500 million (including interventions on local infrastructure).New research lines have been activated in the area of productsfrom renewable sources. In this field, Eni signed an agreementwith Genomatica, a company active in bio-technologies.

Management expects sales of higher value added and bio-basedproducts to improve consistently, with a contribution on totalsales amounting to 50% in a long-term scenario.

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The Company will also leverage on international expansionespecially in Asia and Latin America trough licensing activities,product alliances and joint ventures. In 2012, Versalis signedstrategic alliances in Asia, supported by our technologicalknow-how and the enhancement of Eni’s proprietary technologyplatform.

The Company’s strategy will also continue to leverage onefficiency actions to reduce operating costs and on therationalization program of our plants in order to improve yieldsand efficiency, restructuring our unprofitable sites, inparticular cutting the Company’s ethylene and polyethylenecapacity.

Based on the planned initiatives, management expects itschemical operations to break-even in the next four-year period.

To target those objectives, management plans to make selectivecapital expenditures amounting to approximately euro 1.9 billionover the next four year. The main investment will target theconversion of the Porto Torres unit in Sardinia, Italy, into aninnovative bio-based chemical complex to produce bio-plastics andother bio-based chemical products. In addition, the Company plansto develop the product line in the elastomers and intermediatesbusinesses, upgrade and revamp the Company’s cracking unitsas well as complying with all applicable regulations onenvironment, health and safety issues.

In 2012, sales of chemical products (3,953 ktonnes) decreasedby 87 ktonnes (down 2.1%) from 2011 mainly due to a substantialdecrease in demand reflecting the current economic downturn inthe main reference markets. Average unit sales prices increasedslightly (up 1.3%) from 2011, in particular aromatics (up 12%),phenol derivatives (up 10%) and styrene (up 6%). Elastomeraverage unit prices declined (down 1.3%).

Chemical production (6,090 ktonnes) decreased by 155 ktonnesfrom 2011, or 2.5%. Main decreases were registered in styrenesand elastomers (down 10.3% and 9.4%, respectively). Excluding theshutdown of the Porto Torres plant (except for nytrilic rubber)for the start of the green chemistry project and the divestmentof the Feluy plant, volumes increased by approximately 2%.

Outside Italy, production increased at the Dunkerque site (up20%) that in 2011 had been affected by a slow start of the newEVA/LDPE swing line. Nominal capacity of plants declined from theprevious year due to the mentioned divestment of the Feluy plantand the shutdown of the Porto Torres plant, while the averageplant utilization rate, calculated on nominal capacity, was 66.7%(65.3% in 2011).

The table below sets forth Eni’s main chemical productsavailability for the periods indicated.

|   | **Year ended December 31,** |
|--------|-----------------------------|
|   |                             |

|   |   | **2010** |   | **2011** |   | **2012** |
|--------|--------|----------|--------|----------|--------|----------|
|   |   |          |   |          |   |          |

|   |   | **(ktonnes)** |
|--------|--------|---------------|

| Itermediates                        |   | 4,860     |   |   | 4,101     |   |   | 4,112     |   |
|-------------------------------------|--------|-----------|--------|--------|-----------|--------|--------|-----------|--------|
| Polymers                            |   | 2,360     |   |   | 2,144     |   |   | 1,978     |   |
|                                |   |           |        |   |           |        |   |           |        |
| **Total production**                |   | **7,220** |   |   | **6,245** |   |   | **6,090** |   |
|                                |   |           |        |   |           |        |   |           |        |
| Consumption        and losses       |   | (2,912    | )      |   | (2,631    | )      |   | (2,545    | )      |
| Purchases and change in inventories |   | 423       |   |   | 426       |   |   | 408       |   |
|                                |   | **4,731** |   |   | **4,040** |   |   | **3,953** |   |
|                                |   |           |        |   |           |        |   |           |        |

The table below sets forth Eni’s main petrochemicalproducts revenues for the periods indicated.

|   | **Year ended December 31,** |
|--------|-----------------------------|
|   |                             |

|   |   | **2010** |   | **2011** |   | **2012** |
|--------|--------|----------|--------|----------|--------|----------|
|   |   |          |   |          |   |          |

|   |   | **(euro million)** |
|--------|--------|--------------------|

| Itermediates              |   | 2,833     |   |   | 2,987     |   |   | 3,110     |   |
|---------------------------|--------|-----------|--------|--------|-----------|--------|--------|-----------|--------|
| Polymers                  |   | 3,126     |   |   | 3,299     |   |   | 3,128     |   |
| Other revenues            |   | 182       |   |   | 205       |   |   | 180       |   |
|                      |   |           |        |   |           |        |   |           |        |
| **Total        revenues** |   | **6,141** |   |   | **6,491** |   |   | **6,418** |   |
|                      |   |           |        |   |           |        |   |           |        |

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> 
*Intermediate*

Intermediate revenues (euro 3,110 million) increased by euro123 million from 2011 (up 4%) due to the positive performance ofderivatives, reflecting increased sales volumes (up 21%) andaverage unit prices (up 10%) due to a more dynamic market andproduct availability. Sales volumes of olefins and aromaticsdeclined (down 2% and 4.5%, respectively) due to the shutdown ofthe polyethylene line in the Sicilian plants due to their lack ofprofitability and demand decline. Average unit prices of olefinswere stable, while aromatics prices increased by 12% driven bythe price of benzene (up 18.7%).

Intermediates production (4,112 ktonnes) was in line with lastyear (up 0.3%). An increase was registered in derivatives (up12%) for phenol derivatives and styrene monomer that last yearhad been affected by the planned facility downtimes at theMantova plant.

Production of olefins and aromatics declined (down 2.7% and5.4%, respectively). The latter were affected by the plannedfacility downtime at the Sarroch plant and the decline inactivity at the Priolo plant aimed at countering the negativescenario.

 

> 
*Polymers*

Polymer revenues (euro 3,128 million) decreased by euro 171million from 2011 (down 5.2%) due to decreased sales volumes(down 5.8%) resulting from a steep decline in demand inparticular on Italian and European markets, offset in part byslight increases in the markets of Eastern Europe.

Unit prices of elastomers declined (down 1.3%) due to lowerunit prices for SBR rubbers, affected by the downturn of theautomotive industry and of polyethylene (down 0.4%), despite animprovement in the second part of the year. Average styreneprices increased by 6%, driven by the price of expandablepolystyrene.

Polymer production (1,978 ktonnes) decreased by 167 ktonnesfrom 2011 (down 7.8%), due mainly to a decline in elastomerproduction (down 9.4%) at Ravenna and Ferrara for the downturn ofthe automotive industry and of polyethylene (down 6%). At thebeginning of the year production at the Sicilian plants wasshutdown, including the cracker, due to the sharp decline indemand for polyethylene.

The decline in styrene production (down 10.3%) was due to thedivestment of compact and expandable polystyrene plant of Feluy(Belgium) at the end of 2011.

 

> 
***Capital expenditures***

See "Item 5 – Liquidity and capital resources –Capital expenditures by segment".

 

**Corporate and Other activities**

| These activities include the following        businesses: |
|-----------------------------------------------------------|

| • |   | the "Other        activities" segment comprises results of operations        of Eni’s subsidiary Syndial which runs minor        petrochemical activities and reclamation and        decommissioning activities pertaining to certain        businesses which Eni exited, divested or shut down in        past years; and                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |
|--------|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| • |   | the "Corporate and        financial companies" segment comprises results of        operations of Eni’s headquarters and certain Eni        subsidiaries engaged in treasury, finance and other        general and business support services. Eni’s        headquarters is a department of the parent company Eni        SpA and performs Group strategic planning, human        resources management, finance, administration,        information technology, legal affairs, international        affairs and corporate research and development functions.        Through Eni’s subsidiaries Eni Adfin SpA, Eni        Finance International SA, Banque Eni SA, Eni        International BV, Eni Finance USA Inc and Eni Insurance        Ltd, Eni carries out cash management activities lending,        factoring, leasing, financing Eni’s projects around        the world and insurance activities, principally on an        inter-company basis. EniServizi, Eni Corporate        University, AGI and other minor subsidiaries are engaged        in providing Group companies with diversified services        (mainly services including training, business support,        real estate and general purposes services to Group        companies). Management does not consider Eni’s        activities in these areas to be material to its overall        operations. |

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> 
***Seasonality***

Eni’s results of operations reflect the seasonality indemand for natural gas and certain refined products used inresidential space heating, the demand for which is typicallyhighest in the first quarter of the year, which includes thecoldest months and lowest in the third quarter, which includesthe warmest months. Moreover, year-to-year comparability ofresults of operations is affected by weather conditions affectingdemand for gas and other refined products in residential spaceheating. In colder years that are characterized by lowertemperatures than historical average temperatures, demand for gasand products is typically higher than normal consumptionpatterns, and vice versa.

 

**Research and development**

Technological research and development ("R&D")and continuous innovation represent key success factors inimplementing Eni’s business strategies as they support ourlong-term competitive performance.

| The Company believes that the oil        industry has to face a number of challenges in the near        future and that technology will play a vital role in        helping it to effectively manage them. In particular: |
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| • |   | continuing uncertainty about        the future evolution of prices and demand for        oil&gas;                                                                                                              |
|--------|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| • |   | limited access to new        hydrocarbon resources, with the consequent problems for        production growth and reserve replacement; increasing        role for unconventional oil&gas resources and basins; |
| • |   | a growing importance of        renewable sources in satisfying energy need; and                                                                                                                                    |
| • |   | greater attention to        operations safety and energy efficiency increase in the        industry.                                                                                                               |

|                                                                |
|---------------------------------------------------------------------|
| Eni has identified a number of key        technological guidelines: |

| • |   | improving the ability to        describe the subsoil and to estimate the amount and        quality of fluids contained in sedimentary fields, with        special focus on the most complex areas;                                         |
|--------|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| • |   | targeting operating        excellence, in particular in frontier fields, in terms of        operational safety and reduced environmental impact;                                                                                           |
| • |   | increasing the hydrocarbon        recovery factor, both in conventional and unconventional        oil reservoirs;                                                                                                                          |
| • |   | exploiting unconventional        and marginal gas reservoirs, as well as allowing the        up-grading of poor gas (for example with high CO2        content);                                                                            |
| • |   | allowing the upgrading of        unconventional oil (extra-heavy crude and bitumen),        increasing the yield and quality of the distillates and        at the same time eliminating the production of fuel oil        and by-products; |
| • |   | producing high quality fuels        with low environmental impact, as well as developing        bio-fuels that do not compete with the food supply chain;                                                                                  |
| • |   | reducing the polluting        potential of the hydrocarbon operating activities both        locally (e.g. treatment of production water and        industrial waste, sludge management) and globally        (reduction of CO2 emissions);  |
| • |   | efficiently and effectively        converting renewable energy sources, especially solar and        bio-mass energy, into electrical energy or energy        vectors; and                                                                  |
| • |   | promoting the Sustainable        Chemistry business, for example by introducing        bio-components into the pool of petrochemical products.                                                                                             |

In 2012, Eni filed 74 patent applications (79 in 2011), 44 ofthese coming from Eni’s segments and Eni Corporate, 17 fromVersalis and 13 from the Engineering & Constructionactivities of Saipem.

In 2012, Eni’s overall expenditure in R&D amounted toeuro 211 million which were almost entirely expensed as incurred(euro 190 million in 2011 and euro 218 million in 2010).

The overall expenditure toward academic institutions andresearch centers amounted to euro 30 million in 2012. In 2011,Eni signed a new agreement with Stanford University which willdevelop a research program focused on oil&gas technologiesand environmental issues for an overall expenditure of $10million over the next four years. At the beginning of 2013, theagreement between Eni and MIT was renewed for 4 years and a totalamount of $20 million.

At December 31, 2012, a total of 975 persons were employed inresearch and development activities. Below, we describe the mainresults achieved in the development and application of innovativetechnologies in 2012.

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> 
**Exploration & Production**

*- Eni Common Reflection Surface Stack (e-crsTM).*The proprietary seismic processing technology enhances thesignal/noise ratio in challenging imaging areas. In 2012, itsapplication in Pakistan allowed the successful placement of thediscovery well Badhra B North-1.

*- Reverse Time Migration (RTM)@60Hz.*The Eniproprietary technology for seismic data processing was enhancedto process high frequency seismic data. This technology allowedthe reconstruction of the subsoil image in highly complex areas,where the potentially mineralogical structure is"hidden" by layers of salt, faults, or overlyingchannels. In 2012, the new version was successfully applied inAngola and Ghana.

*- Coastal Oil Spill Preparedness Improvement Program in theBarents Sea and sub-Arctic areas.* The emergency plandeveloped for the Goliat field in the Barents Sea was completedand tested, verifying all the operative phases needed to containan oil spill. The test involved the operator Eni, the partner,and the Norwegian Clean Seas Association for Operating Companies(NOFO) as well as other staff and resources of the private andpublic sectors. In particular, coast cleaning methods were testedand new methodologies for a rapid response were implemented byusing vessels normally dedicated to fishing activities. TheNorwegian Authorities appointed the Goliath project as areference standard for future initiatives in the area.

*- Pump power supply in desert locations using photovoltaicsystems.* The realization of a hybrid fossil/solar plant,located in the Aghar field (Egypt), was completed for the powersupply of artificial lift systems (Sucker Rod Pumps). Thistechnology allows fuel savings during the production phasethrough the parallel use of photovoltaic panels and traditionalpower generator.

 

> 
**Gas & Power**

*- Eni Kassandra Meteo Forecast (e-kmTM).* Since2009, Eni has been developing a short-long term proprietarymeteorological forecast system in collaboration with EPSON Meteo,which can be used for managing energy resources and improving thepower generation process. This system for forecastingtemperatures trend on global and regional scale, from 1 to 90days, provides an innovative solution towards statisticalsystems. In 2012, the system was further developed to expand thegeographical coverage in Europe, and it was used by allEniPower’s power plants and the gas market selling in Italy.

*- Eni Vibroacoustic Pipeline Monitoring System(e-vpmsTM).* The Eni proprietary technology allows acontinuous detection of third-party intrusions and leaks in fluidfilled pipelines by a remote control station. In 2012, thetechnology has been successfully tested in Italy ontransportation pipelines for crude oil, products and natural gas.

 

> 
**Refining & Marketing**

*- Green Refinery.* The project Green Refinery waslaunched for the conversion of the Venice plant into a"bio-refinery", using the EcofiningTMtechnology, (co-patented by Eni and UOP), aimed at the productionof innovative and high quality bio-fuels by the conversion ofvarious organic feedstock (such as vegetable oils, animal fats,cooking oils, oils from algae). The project, which investment isestimated in euro 100 million, is the first case in the world forthe conversion of a conventional refinery into a bio-refinery.

*- Zero Waste.*The technology is based on a thermalprocess for the treatment of industrial oily and biologicalresidues generated by the petroleum industry productionactivities. The process was validated on a pilot scale plant. Themain environmental benefits obtained are: (i) a reduction of thewaste to be disposed >90%; and (ii) a production of a syngascapable both to thermally self-support the process and (in caseof surplus with respect to the self-sustaining) to recoverhydrocarbons from the sludge.

 

> 
**Versalis**

*Joint venture Genomatica-Novamont.*In June 2012, aMemorandum of Understanding was signed with Genomatica andNovamont, for the creation of a joint venture based in Italy. Thejoint research program, which will last four years, focuses onthe development of a new technology for the production ofbutadiene from renewable sources. The joint venture will alsohold exclusive rights for the industrial exploitation of researchresults including the licensing activities of the technology to athird party.

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> 
**Eni Corporate**

*- Photoactive materials.* A Luminescent SolarConcentrator consists of a slab of transparent material (acrylicor glassy) to which fluorescent molecules, patented by Eni, areadded acting as microscopic light emitters. The emitted radiationis partially confined within the slab by total internalreflections and is waveguided and concentrated toward its edgeswhere PV cells are placed. The positive results obtained at lablevel allowed the construction of the first demonstration unit,which consists in a photovoltaic shelter to park and re-chargeelectrical bicycles.

 

**Insurance**

In order to control the insurance costs incurred by each ofEni’s business units, the Company constantly assesses itsrisk exposure in both Italian and foreign activities. The Companyhas established a captive subsidiary, Eni Insurance Ltd, in orderto efficiently manage transactions with mutual entities and thirdparties providing insurance policies. Internal insurance riskmanagers work in close contact with business units in order toassess potential underlying business and other types of risks andpossible financial impacts on the Group results of operations andliquidity. This process allows Eni to accept risks inconsideration of results of technical and risk mitigationstandards and practices, to define the appropriate level of riskretention and, finally, the amount of risk to be transferred tothe market.

Eni enters into insurance arrangements through itsshareholding in the Oil Insurance Ltd ("OIL") and withother insurance partners in order to limit possible economicimpacts associated with damages to both third parties and theenvironment occurring in case of both onshore and offshoreaccidents. The main part of this insurance portfolio is relatedto operating risks associated with oil&gas operations whichare insured making use of insurance policies provided by the OIL,a mutual insurance and re-insurance company that provides itsmembers a broad coverage of insurance services tailored to thespecific requirements of oil and energy companies. In addition,Eni makes recourse to insurance companies who we believe areestablished in the marketplace. Insured liabilities varydepending on the nature and type of circumstances; howeverunderlying amounts represent significant shares of the plafondgranted by insuring companies. In particular, in the case of oilspills and other environmental damage, current insurance policiescover costs of cleaning-up and remediating polluted sites, damageto third parties and containment of physical damage up to $1.1billion for offshore events and $1.5 billion for onshore plants(refineries). These are complemented by insurance policies thatcover owners, operators and renters of vessels with the followingmaximum amounts: $1 billion for the fleet owned by the subsidiaryLNG Shipping in the Gas & Power segment and FPSOs used by theExploration & Production segment for developing offshorefields; $500 million for time charters.

Management believes that the level of insurance maintained byEni is generally appropriate for the risks of its businesses.However considering the limited capacity of the insurance market,we believe that Eni could be exposed to material uninsured lossesin case of catastrophic incidents, like the one occurred in theGulf of Mexico in 2010 which could have a material impact on ourresults and liquidity. See "Item 3 – Risk factors– Risk associated with the exploration & production ofoil and natural gas".

 

**Environmental matters**

> 
***Environmental regulation***

Eni is subject to numerous EU, international, national,regional and local environmental, health and safety laws andregulations concerning its oil and gas operations, products andother activities, including legislation that implementsinternational conventions or protocols. In particular, these lawsand regulations require the acquisition of a permit beforedrilling for hydrocarbons may commence, restrict the types,quantities and concentration of various substances that can bereleased into the environment in connection with exploration,drilling and production activities, limit or prohibit drillingactivities on certain protected areas, provide for measures to betaken to protect the safety of the workplace and health ofcommunities affected by the Company’s activities, and imposecriminal or civil liabilities for pollution resulting from oil,natural gas, refining and petrochemical operations. These lawsand regulations may also restrict emissions and discharges tosurface and subsurface water resulting from the operation ofnatural gas processing plants, petrochemical plants, refineries,pipeline systems and other facilities that Eni owns. In addition,Eni’s operations are subject to laws and regulationsrelating to the production, handling, transportation, storage,disposal and treatment of waste materials. Environmental laws andregulations have a substantial impact on Eni’s operations.Some risk of environmental costs and liabilities is inherent incertain operations and products of Eni, and there can be noassurance that material costs and liabilities will not beincurred.

We believe that the Company will continue incurringsignificant amounts of expenses to comply with pendingregulations in the matter of environmental, health an safetyprotection and safeguard, particularly to achieve any mandatoryor voluntary reduction in the emission of greenhouse gases in theatmosphere and cope with climate change.

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A brief description of major environmental, health and safetylaws impacting Eni’s activities located in Italy andEuropean Union is outlined below.

 

> 
**Italy**

The majority of Italian environmental legislation is containedin the Environmental Code approved by Legislative Decree No. 152of April 3, 2006 (Environmental Code). The Environmental Codesets up rules that refer to: Environmental Impact Assessment(EIAs), the Integrated Prevention and Pollution Control (IPPC),procedures for Strategic Environment Assessment (SEA), soil andwater protection, air pollution and reduction of emissions, wastemanagement and remediation of contaminated sites, environmentalliability and sustainable development. The Environmental Code hasbeen subject to a number of amendments. The most importantchanges introduced regarded reclamation and remediationactivities as this Decree provided a site-specific risk-basedapproach to determine objectives of reclamation and remediationprojects, cost-effective analysis required to evaluateremediation solutions, and criteria for waste classification. In2012 the application of the Integrated Environmental permit underIPPC regulation was extended to all off-shore Italian platforms.Furthermore, by the end of 2013, the environmental law will beupdated again in order to transpose the Directive on industrialemissions No. 2010/75/UE (IED directive).

In 2012, Law No. 35 of April 4, 2012, was enacted tointroduce certain innovations in the environmental regulationregarding administrative procedures (with particular reference toIntegrated Environmental Authorization and Environmental ImpactAssessment). The law delegates the Government to approve aregulation on the unique environmental authorization to simplifyprocedures and reduce costs for small and medium-sizedenterprises. In fact such a regulation was approved in February2013, and a Unique Environmental Authorization (AUA) is now inforce. AUA is dedicated to environmental businesses andinstallations not subject to integrated environmentalauthorization and greatly simplifies the administrative burden,in particular for small and medium-sized enterprises; the newauthorization replaces up to seven different procedures.

Other significant legislation includes Criminal offencesrelating to the environment – Legislative Decree No. 231 ofJune 8, 2001, as recently amended by Legislative Decree No. 121of July 7, 2011, which provides for monetary sanctions for legalentities in cases of criminal offences concerning theenvironment. This decree introduced into Italian law theliability of legal entities in relation to the crimes committedby employees against the environment. Particularly, the Italianlegislator broadened the scope of corporations’ liabilitiesfor the crimes committed by employees to include crimes relatingthe illicit discharge of industrial waste water, violations inreporting, record keeping and other omitted evidence in thematter of waste, unauthorized waste management, illegaltrafficking of waste, as well as crimes relating the applicationin Italy of the Convention on International Trade in animal andplant species threatened with extinction, violations of measuresintended to protect stratospheric ozone and the environment andpollution caused by ships.

Decree No. 155/2010 adopted in the Italian law the Europeanprescriptions on ambient air quality, established by theDirective No. 2008/50/EC. Its main innovation is the definitionof monitoring criteria and emission limits for fine particulatesubstances (PM 2.5), to be achieved by January 1, 2015. OnFebruary 12, 2013, Legislative Decree No. 250/2012 amendingLegislative Decree No. 155/2010 transposing Directive No.250/2008/EC on air quality entered in force. The changesintroduced by the new decree were necessary to overcome somecritical points appeared in the first phase of application of thenew discipline and to better regulate the relations with localgovernments and to better define the role of the Institute forEnvironmental Protection and Research (ISPRA).

Italy has regulated the Emission Trading System by LegislativeDecree No. 216 of April 4, 2006, amended by Legislative DecreeNo. 257 of December 30, 2010, transposing requirements ofDirective No. 2008/101/EC. In 2012, a pattern of legislativedecree implementing Directive No. 2009/29/EC (amending DirectiveNo. 2003/87/EC to extend the Community trading system of CO2emission) was prepared and is expected to be approved by theGovernment. Moreover on November 13, 2012, the National Committeeon implementation of the Directive No. 2003/87/EC has approvedthe Deliberation No. 27 on monitoring and communication of GHGaccording to Commission Regulation No. 601/2012.

Decree No. 205/2010 implemented the Directive No. 2008/98/ECabout waste and adopted SISTRI (an automated tracking system ofspecial and hazardous waste). This new system aimed at real timemonitoring of the route of waste from production throughdisposal/recycling, also prosecuting any unlawful act in wastemanagement, and was expected to be fully implemented by June2012. Law No. 234/2012 extended the application of the previousdocumental tracking system, in order to check the adequacy of theimplemented choices, forwarding the start-up of the new system upto June 30, 2013.

On October 5, 2011, Legislative Decree No. 162/2011implementing Directive No. 2009/31/EC (CCS Directive) came intoforce. The decree represents a key point to launch and support,from an institutional point of view, the implementation ofdemonstrative projects which are finalized to investigate andanalyze from a scientific point of view, the technologicalaspects of the CCS, in order to optimize current technologies orto find new solutions with a marginal and sustainable economicimpact for the capture and storage processes.

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Legislative Decree No. 81/2008 concerned the protection ofhealth and safety in the work place and was designed to regulatethe work environments, equipments and individual protectiondevices, physical agents (noise, mechanical vibrations,electromagnetic fields, optical radiations, etc.), dangeroussubstances (chemical agents, carcinogenic substances, etc.),biological agents and explosive atmosphere, the system of signs,video terminals. Eni worked on the implementation of the generalframework regulations on health and safety concerning preventionand protection of workers at national and European level to beapplied to all kinds of workers and employees.

On November 23, 2011, the legislation regulating works inconfined spaces has come into effect (Decree No. 177/2011), inapplication of Legislative Decree No. 81/2008.

| Moreover, during 2012 some specific        decrees were published to implement the Legislative        Decree No. 81/2008: |
|---------------------------------------------------------------------------------------------------------------------------|

| • |   | Ministerial Decree of        November 30, 2012 implementing Article 29 of Legislative        Decree No. 81/2008, on standardization of the evaluation        methods for health and safety risk assessment; |
|--------|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| • |   | Ministerial Decree of August        6, 2012 which replaces the previous Annex XXXVIII to        Legislative Decree No. 81/2008, on limit values of        professional exposure to some substances; and     |
| • |   | Ministerial Decree of        February 16, 2012, No. 51, implementing Article 3 of        Legislative Decree No. 81/2008 on health and safety        protection at the workplace abroad.                     |

Furthermore, as to Legislative Decree No. 81/2008, at the endof 2011 a specific Italian national agreement (between differentgovernment bodies) on training on health and safety at workentered into force. As a consequence, in 2012 Eni has defined adedicated compulsory training model and started the relatedtraining activities, which were dedicated to the variousCompany’s roles (e.g. Safety managers – as defined bythe Italian legislation – managers and employees) anddifferentiated according to the levels of risk of Company’sactivities.

Moreover, it is important to note that at regional levelItalian local authorities are appealing more often to HealthImpact Assessment (HIA) and are integrating this procedure withEnvironmental Impact Assessment (EIA) and Strategic ImpactAssessment (SIA). During 2012, a strong correlation has beenobserved between health issues and environmental aspects. Infact, various HIA, SIA and EIA methodologies are being developedas a unique regulation (e.g. "Cervellera Law" in PugliaRegion). Eni is involved in an internal multidisciplinary projecton health and environmental assessment of plants impacts.

| The complexity and scale of situations        and contexts where Eni is operating requires the adoption        of business processes, guidelines and principles for        improving its performance in health and prevention. To        this end Eni upholds: |
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| • |   | clear policies;                                                 |
|--------|--------|-----------------------------------------------------------------|
| • |   | an ethical code;                                                |
| • |   | endorsement of international        conventions and principles; |
| • |   | guidelines and procedures;        and                           |
| • |   | sharing of knowledge.                                           |

> 
 

**European Union**

Since January 2012, according to the Directive No.2008/101/EC, emissions from international aviation are includedin the EU Emission Trading System (EU ETS). Like industrialinstallations covered by the EU ETS, airlines receive tradableallowances covering a certain level of CO2 emissionsfrom their flights per year.

On June 21, 2012, the Commission adopted two Regulations onmonitoring and reporting of greenhouse gas emissions and onverification and accreditation of verifiers under the EUEmissions Trading System. Both Regulations form part of the setof implementing rules for the third trading period of the EU ETSand entered in force in January 2013.

On July 20, 2012, Regulation EU No. 530/2012 on theaccelerated phasing-in of double-hull or equivalent designrequirements for single-hull oil tankers entered in force. Thenew Regulation prohibits the transport to or from EU ports ofheavy grades of oil in single-hull oil tankers as decided by theMarpol Convention 73/78.

On October 26, 2012, the Commission adopted a proposal for anew directive on EIA (Environmental Impact Assessment) that wouldamend the current Directive. The proposal is intended tofacilitate the assessment of potential impacts, without weakeningexisting environmental safeguards and to reinforce thedecision-making process and improve current levels ofenvironmental protection. Moreover a new proposal updates EIAwith emerging challenges in areas like resource efficiency,climate change, biodiversity and disaster prevention that will bereflected in the assessment process.

On December 17, 2012, the Directive No. 2012/33/EC on sulphurcontent in marine fuels has entered into force. The directivemodifies the Directive No. 1999/32/EC and brings EU regulationsin line with current International Maritime Organization (IMO)regulations for sulphur emissions from ships under Marpol AnnexVI. The new directive has not only updated with IMO limits forsulphur in emission control areas (ECA), but it also promotes a 

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stronger monitoring and enforcement regime to improvecompliance, possibly with stricter penalties, along with areference to IMO procedures for sulphur verification that opensthe door to a stricter interpretation of what is common in theEU at present.

According to the new directive, the sulphur limit in ECAs isnow 1.00%, falling to 0.10% in 2015 (before it was 1.5%) andmarine fuels used in the EU must meet the global 3.50% sulphurlimit, except for on ships using an exhaust gas cleaning system(EGCS) operating in closed mode.

Member States have time until June 18, 2014 to bring intoforce the laws, regulations and administrative provisionsnecessary to comply with the revised sulphur directive.

On November 15, 2012, European Commission presented aBlueprint to Safeguard Europe’s Water Resources thatoutlines actions that concentrate on better implementation ofcurrent water legislation, integration of water policy objectivesinto other policies, and filling the gaps in particular asregards water quantity and efficiency.

In November 2012, the European Parliament rejected theproposal for a moratorium on shale gas and endorsed two reports:on the environmental impacts of shale gas extraction and on itsindustrial and energy aspects. Studies carried out indicate thatthere are a number of uncertainties or gaps in current EUlegislation and the Commission intends to deliver next year aframework to manage risks, address regulatory shortcomings, andto provide maximum clarity and predictability to market operatorsand citizens across the EU.

On October 25, 2012, the EU adopted the Directive No.2012/27/EU on energy efficiency which establishes a commonframework of measures for the promotion of energy efficiencywithin the Union in order to ensure the achievement of theEU’s 20-20-20 headline target on energy efficiency. Thedirective is a game-changer for energy companies, which are nowrequired to achieve 1.5% energy savings every year among theirfinal clients. The EU law is also expected to trigger the largestrevamp of Europe’s existing building stock to date and setnew standards for public procurement and energy audits. EUcountries are requested to draw up a roadmap to make the entirebuildings sector more energy efficient by 2050 (commercial,public and private households included). In the first half of2014, the Commission will review the progress towards the 20%energy-efficiency target, report on it and assess whether furthermeasures are needed.

On June 1, 2007, the REACH regulation of the European Union(EC No. 1907/2006 of December 18, 2006) entered into force. REACHstands for Registration, Evaluation, Authorization andRestriction of Chemical and was adopted to improve the protectionof human health, safety and the environment from the risks thatcan be posed by chemicals, while enhancing the competitiveness ofthe EU chemicals industry. It also promotes alternative methodsfor the assessment of hazardous substances in order to reduce thenumber of tests on animals. REACH places the burden of proof oncompanies. To comply with the regulation, companies must identifyand manage the risks linked to the substances they manufactureand market in the EU. They have to demonstrate to EuropeanChemicals Agency (ECHA) how thesubstance can be safely used and they must communicate the riskmanagement measures to the users. If the risks cannot be managed,authorities can restrict the use of substances in different ways.Over time, the hazardous substances should be substituted withless dangerous ones. The deadline of REACH registration dependson the tonnage band of a substance and the classification of asubstance; next deadline is 2013 and the last one 2018. Enirecognizes the importance of the Regulation REACH (CE) 1907/2006,the general principles of which are already an intrinsic part ofthe Company’s commitment to sustainability and are anintegral part of the culture and history of the Company. Thecompliance with the REACH requirements and the involvement of allthe interested parties in the Company are coordinated andsupervised by the HSEQ function. In particular, Eni is involvedin the registration of substances and compounds to ECHA that regards a complex series ofinformation about the characteristics of such substances andtheir uses and in another fundamental aspects that concerns theexchange of information between producers and importers, as wellas the users of chemical substances ("downstreamusers").

The CLP Regulation (Classification, Labeling and Packaging)entered into force in January 2009 (Regulation EC No. 1272/2008on the classification, labeling and packaging of substances andmixtures), and the method of classifying and labeling chemicalsintroduced is based on the United Nations’ GloballyHarmonized System (GHS). The Regulation will replace two previouspieces of legislation, the Dangerous Substances Directive and theDangerous Preparations Directive. There is a transition perioduntil 2015. The CLP Regulation ensures that the hazards presentedby chemicals are clearly communicated to workers and consumers inthe European Union through classification and labeling ofchemicals. Before placing chemicals on the market, the industrymust establish the potential risks to human health and theenvironment of such substances and mixtures, classifying them inline with the identified hazards. The hazardous chemicals alsohave to be labeled according to a standardized system so thatworkers and consumers know about their effects before they handlethem.

The European Commission has put forward its new Energy Policyfor Europe - EPE, so-called "20-20 by 2020", afar-reaching package of proposals that will deliver on theEuropean Union’s ambitious commitments to fight climatechange, promote renewable energy and increase energy security.The following regulations were published in order to define thecriteria for cutting emissions cost-effectively by 2020 comparedwith levels recorded in 2005:

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| • |   | Directive No. 2009/28/EC:        fixing target of 20% share of energy from renewable        sources in 2020. It creates cooperation mechanisms so        that the EU can achieve the targets in a cost effective        way. It also includes a flat 10% target for renewables in        transport (bio-fuels, "green" electricity,        etc.); this legislation also sets out sustainability        criteria that bio-fuels should meet to ensure they        deliver real environmental benefits.                                                                                                                                                                                                                                                                                       |
|--------|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| • |   | Directive No. 2009/29/EC:        improves and extends to the third phase (2013-2020) the        greenhouse gas emission allowance trading scheme of the        European Community to provide for a more efficient,        homogeneous and fair system. It defines criteria and        targets for cutting GHG emissions from the sectors        covered by the system (energy and manufacturing        industries) by 21% by 2020 compared with levels in 2005.        The Auctioning Regulation contains a set of rules for the        auctioning processes that should be undertaken for the        auction of allowances from 2013. On December 14, 2010,        Climate Change Committee voted the benchmark decision,        which describes the rules for the free allocation from        2013. |
| • |   | Directive No. 2009/30/EC:        defines the fuel quality and places an obligation on        suppliers to reduce greenhouse gases from the entire fuel        life cycle of 6% by 2020, mostly by an increased use of        bio-fuels.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |
| • |   | Decision 2011/278/EU:        implements transitional Union-wide rules for harmonized        free allocation of emission allowances pursuant to        Article 10a of Directive No. 2003/87/EC: legislation that        set the benchmark for the quantification of the free        allowances allocated to the industry. For industry and        heating sectors, allowances will be allocated for free        based on ambitious (greenhouse gas performance-based)        benchmarks. Installations that meet the benchmarks (and        thus are among the most efficient installations in the        EU) will in principle receive all allowances they need.                                                                                                                                      |
| • |   | Directive No. 2009/31/EC:        defines a scenario in order to promote the development        and safe use of Carbon Capture & Storage (CCS), a        suite of technologies that allows the carbon dioxide        emitted by industrial processes to be captured and stored        underground.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |
| • |   | Regulation 443/2009/EC: sets        emissions standards for new passenger cars and targets a        reduction to an average of 120 g CO2/km by        2015, decreasing to a stringent long-term target of 95 g        CO2/km by 2020.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |
| • |   | Decision 406/2009/EC:        defines, for sectors not included in the EU ETS, such as        transport, housing, agriculture and waste, emissions        reduction target of 10% from 2005 levels by 2020 (the        Italian reduction target is fixed at 13%).                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |
| • |   | Decision 540/2011/EC:        amending Decision 2007/589/EC as regards the inclusion of        monitoring and reporting guidelines for greenhouse gas        emissions from new activities and gases.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |
| • |   | Decision 2012/432/EC: on        recognition of the "REDcert" scheme for        demonstrating compliance with the sustainability of        bio-fuels.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |

On December 17, 2010, the Directive No. 2010/75/EC onindustrial emissions (IED) was published in the Official Journalof the European Union No. 334. The objective of the new directiveis to avoid or to minimize polluting emissions in the atmosphere,water and soil, as well as waste from industrial and agriculturalinstallations, and to achieve a high level of environmental andhealth protection. The Directive brings together the IPPCDirective (Directive No. 2008/1/EC) and six other sector-specificDirectives (Large Combustion Plants, VOC – Volatile OrganicCompounds – emissions, incineration of waste and titaniumindustry). The Directive contains special provisions for thecombustion plants with thermal input below 50 MW. Any industrialinstallation which carries out the activities listed in Annex Imust meet certain obligations, as preventive measures takenagainst pollution, minimum emission values, apply the bestavailable techniques (BAT), monitoring rules and permit andreporting conditions. The Article 14 of the new Directive definesthe permit necessary measures (as emission limit values forpolluting substances, rules guaranteeing protecting of soil,water and air, suitable emission monitoring measures, wastemonitoring and management measures, communication of monitoringresults to the competent national authorities, requirementsconcerning the maintenance and surveillance of soil andgroundwater, measures relating to exceptional circumstances asleaks, malfunctions, momentary or definitive stoppages, etc.).The Directive defines more restricting emission limits to beobserved by the end of 2012, although includes some derogation,as the TNP Transitional National Plan and the option Opt-Out forthose installations that are going to shut down their operationsby 2023. On February 28, 2011, the European IPPC Bureau (EIPPCB)started the review process of the Reference Documents on BestAvailable Techniques for Large Combustion Plants"BREF-LCP" and in 2012 the consultation process wascompleted. On February 10, 2012, the Commission approved aimplementing Decision 2012/119/EU laying down rules concerningguidance on the collection of data and on the drawing up of BATreference documents and on their quality assurance referred to inDirective No. 2010/75/EU. Also on February 2012, the Commissionimplementing decision laying down rules concerning thetransitional national plans referred to in Directive No.2010/75/EU was published. Moreover in 2012, the EIPPCB publishedthe Draft 2 Refining Bref and related BAT conclusion, which willbe completed by the end of 2013 with the BAT conclusion. TheMember States have to transpose the IED Directive into nationallegislation by December 2012. The Italian Government will adoptthe IED directive into the Legislative Decree No. 152/2006"Environment Regulation".

| With the aim of taking the lead in the        negotiations on the Climate Agreement after 2012, on        March 15, 2011, the European Commission presented a        Roadmap for transforming the European Union into the        worldwide forerunner of low carbon economy by 2050. The        Roadmap objective is cutting greenhouse gas emissions by        80-95% versus 1990 levels within 2050, by implementing        cost effective measures aiming mostly at improving energy        efficiency. The analysis takes into consideration costs        and savings related to potential measures such as sector        policies, national and regional low carbon strategies and        long-term investments. On December 15, 2011, the European        Commission adopted the Communication "Energy Roadmap        2050". This Communication takes into account        "decarbonization scenarios": |
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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| • |   | energy efficiency scenario;                                                                               |
|--------|--------|-----------------------------------------------------------------------------------------------------------|
| • |   | diversified supply        technologies scenario;                                                          |
| • |   | high renewable energy        scenario;                                                                    |
| • |   | delayed carbon capture and        storage (CCS) scenario (a "high nuclear"        pathway); and |
| • |   | low nuclear scenario (a        "high CCS" pathway).                                             |

Following the incident at the Macondo well in the Gulf ofMexico the U.S. Government and other governments have adoptedmore stringent regulations targeting safety and reliable oil andgas operations in the United States and elsewhere, particularlyrelating to environmental and health and safety protectioncontrols and oversight of drilling operations, as well as accessto new drilling areas. Italian Authorities as well have passedlegislation with Law Decree No. 128 on June 29, 2010 thatintroduces certain restrictions to activities for exploring andproducing hydrocarbons, that are still in place.

Also the European institutions have increased their activitiesin the area of environmental protection in the field ofhydrocarbon extraction.

| Following a resolution of the European        Parliament of one year earlier, rejecting a moratorium on        new oil platforms and requiring a single European system        for prevention and response to intra-community oil        spills, on October 27, 2011, the European Parliament        proposed a new law which will ensure that European        offshore oil and gas production will respect the        world’s highest safety, health and environmental        standards everywhere in the EU. On February 21, 2013, the        European Union reached preliminary agreement on a        Directive specifying toughened rules for offshore oil and        gas operations. The proposed directive is expected to be        formally approved in coming months (first 2013 semester)        by EU member countries and the European Parliament, and        implemented within 2 years after being approved. The main        elements of the preliminary EU directive are the        following: |
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| • |   | The directive introduces        licensing rules for effective prevention of and response        to a major accident. The licensing authority in Member        States will have to make sure that only operators with        proven technical and financial capacities are allowed to        explore and produce oil and gas in EU waters. Public        participation is expected before exploratory drilling        starts in previously un-drilled areas.                                                                                                                        |
|--------|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| • |   | Independent national        competent authorities, responsible for the safety of        installations, will verify the provisions for safety,        environmental protection, and emergency preparedness of        rigs and platforms and the operations conducted on them.        Enforcement actions and penalties will be implemented if        companies do not respect the minimum standards.                                                                                                                                                                                |
| • |   | Obligatory emergency        planning calls for companies to prepare reports on major        hazards, containing an individual risk assessment and        risk-control measures, and an emergency response plan        before exploration or production begins. These plans will        need to be submitted to national authorities.                                                                                                                                                                                                                                               |
| • |   | Technical solutions        presented by the operator need to be verified        independently prior to and periodically after the        installation is taken into operation.                                                                                                                                                                                                                                                                                                                                                                                                     |
| • |   | Companies will publish on        their websites information about standards of performance        of the industry and the activities of the national        competent authorities. The confidentiality of        whistle-blowers will be protected. Operators will be        requested to submit reports of incidents overseas to        enable key safety lessons to be studied.                                                                                                                                                                                                  |
| • |   | Companies will prepare        emergency response plans based on their rig or platform        risk assessments and keep resources at hand to be able to        put them into operation when necessary. EU member states        will likewise take full account of these plans when they        compile national emergency plans. The plans will be        periodically tested by the industry and national        authorities.                                                                                                                                                      |
| • |   | Oil and gas companies will        be fully liable for environmental damage caused to the        protected marine species and natural habitats. For damage        to waters, the geographical zone will be extended to        cover all EU waters including the exclusive economic zone        (about 370 km from the coast) and the continental shelf,        where the coastal Member States exercise jurisdiction.        For water damage, the present EU legal framework for        environmental liability is restricted to territorial        waters (about 22 km offshore). |
| • |   | Offshore inspectors from        Member States will work together to ensure effective        sharing of best practices and contribute to developing        and improving safety standards.                                                                                                                                                                                                                                                                                                                                                                                          |
| • |   | The EU Commission will work        with its international partners to promote the        implementation of the highest safety standards across the        world. Operators working in the EU will be expected to        demonstrate they apply the same accident-prevention        policies overseas as they apply in their EU operations.                                                                                                                                                                                                                                         |

Adoption of stricter regulation both at national and Europeanor international level and the expected evolution in industrialpractices could trigger cost increases to comply with new HSEstandards. Eni exploration and development plans to producehydrocarbons reserves and drilling programs could also beaffected by changing HSE regulations and industrial practices.Lastly, the Company expects that production royalties and incometaxes in the oil&gas industry will likely increase in futureyears.

Moreover, in order to achieve the highest safety standards ofour operations in the Gulf of Mexico, eni entered into aconsortium led by Helix that worked at the containment of the oilspill at the Macondo well. The Helix Fast Response System (HFRS)performs certain activities associated with underwatercontainment of erupting wells, evacuation of hydrocarbon on thesea surface, storage and transport to the coastline.

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As to major accidents, the Seveso III (Directive No.2012/18/EU) was adopted on July 4, 2012 and entered into force onAugust 13, 2012. Member States have to transpose and implementthe Directive by June 1, 2015.

| The main changes in comparison to the        previous Seveso Directive are: |
|-----------------------------------------------------------------------------|

| • |   | technical updates to take        into account the changes in EU chemicals classification,        mainly regarding the 2008 European Regulation on the        Classification, Labeling and Packaging (CLP) of        substances and mixtures; |
|--------|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| • |   | expanded public information        about risks resulting from Company activities;                                                                                                                                                            |
| • |   | modified rules in        participation by the public in land-use planning projects        related to Seveso plants; and                                                                                                                      |
| • |   | stricter standards for        inspections of Seveso establishments.                                                                                                                                                                          |

Eni is starting the initial activities aimed at guaranteeingthe compliance of its own industrial sites.

 

> 
***HSE activity for the year 2012***

Eni is committed to continuously improve its model formanaging health, safety and environment issues across all itsbusinesses in order to minimize risks associated with itsindustrial activities, ensure reliability of its industrialoperations and comply with all applicable rules and regulations.

In 2012, Eni’s business units continued to obtaincertifications of their management systems, industrialinstallations and operating units according to the most stringentinternational standards. The total number of certificationsachieved was 330 (303 in 2011), of which 106 certificationsaccording to the ISO 14001 standard, 10 registrations accordingto the EMAS regulation (EMAS is the Environmental Management andAudit Scheme recognized by the European Union) and 97 accordingto the OHSAS 18001 standard (Occupational Health and Safetymanagement Systems - requirements).

In 2012, Eni total HSE expenses (including cross-cuttingissues such as HSE management systems implementation andcertification, etc.) amounted to euro 1,486 million, in line withthe 2011 figure.

*Environment.* In 2012, Eni incurred total expendituresamounting to euro 743.6 million for the protection of theenvironment (with a reduction of 17% with respect to 2011).Current environmental expenses decreased by approximately 16%from 2011, and mainly related to costs incurred with respect toremediation and reclamation activities, carried out mainly inItaly. Capitalized environmental expenditure decreased by 19.5%and mainly related to remediation and reclamation activities andenergy efficiency and climate change. Eni expects to continueincurring amount of environmental expenditures and expenses inline with or above 2012 levels in future years.

S*afety.* Eni is committed to safeguard the safety of ouremployees and contractors as well as of all people living in theareas where our activities are conducted and our assets located.In 2012, the new legislation didn’t have significant impacton the procedures already in place for safety in the workplace.

The improvement and dissemination of safety awareness throughall levels of the Company’s organization continued in 2012;this is one of the foundations of Eni’s safety strategy,through a large communication campaign, launched in 2012, withthe target of improving the conduct of employees/workers in thespecific field of safety in the workplace. The campaign, willspan over three years involving progressively the enterprise topmanagement, the managers of operating sites and all theEni’s employees. Moreover, in 2012 Eni has started itssafety roadshow, a series of meetings of the Company’s topmanagement with the industrial sites personnel (employees andcontractors), dedicated to the sharing of the Company’ssafety targets and commitment, focusing also on the HSE aspectsof the new process of qualification of vendors.

Results of efforts to achieve a better safety in allactivities has brought an improvement of Eni employee lost timeinjury frequency to 0.57 and of the severity rate to 0.026, thefirst one decreasing by 12% and the second one slightlyincreasing (4%) from 2011.

As to emergency preparedness, Eni has joint the Oil SpillResponse Joint Industry Project (OSR-JIP) launched in December2011 by OGP (International Association of oil&gas Producers)and IPIECA (International Petroleum Industry EnvironmentalConservation Association). This JIP will execute, over athree-year period, the outstanding recommendations from thereport produced by the Global Industry Response Group (GIRG) setup after the Macondo accident. The existence of a JIP makes iteasier for national administrations, intergovernmentalorganizations and willing third parties to participate in thestudies and therefore to build their confidence in the results ofthe commissioned investigations and research. The OSR JIP carriesout specific projects dealing with exercise planning, in situburning, dispersants advocacy-subsea efficacy-post spillmonitoring, upstream risk assessment and response capability,etc.

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Costs incurred in 2012 to support the safety levels ofoperations and to comply with applicable rules and regulationswere euro 371 million, up 12% from 2011. Eni expects to continueincurring amounts of expenses for safety which will be in linewith 2012 levels in future years.

| *Health.*Eni’s activities for        protecting health aim at the continuous improvement of        work conditions. Results have been achieved, as in the        past years, through: |
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| • |   | efficiency and reliability        of plants;                                                                                                                                                                                |
|--------|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| • |   | promotion and dissemination        of knowledge, adoption of best practices and operating        management systems based on advanced criteria of        protection of health and internal and external        environment; |
| • |   | certification programs of        management systems for production sites and operating        units;                                                                                                                        |
| • |   | identified indicators in        order to monitor exposure to chemical and physical        agents;                                                                                                                           |
| • |   | strong engagement in health        protection for workers operating outside Italy,        identifying international health centers capable of        guaranteeing a prompt and adequate response to any        emergency;   |
| • |   | identification of an        effective organization of health centers, in Italy and        abroad; and                                                                                                                       |
| • |   | training programs for medics        and paramedics.                                                                                                                                                                         |

To protect the health and safety of its employees, Eni relieson a network of more than 424 health care centers located in itsmain operating areas. A set of international agreements with thebest local and international health centers ensures efficientservices and timely responses to emergencies.

Eni is engaged to the elaboration of Health Impact Assessment(HIA) and relative standards to be applied to all new projects ofevaluation of working exposure to environment, in Italy andabroad. The main aim of Health Impact Assessment is to avoid anynegative impacts and maximize any positive impacts of the projecton the host community and it is usually carried out as part of orin conjunction with the Environmental and a Social ImpactAssessment process. Its results are used to develop appropriatemitigation measures and an improvement plan with the hostcommunity.

In 2012, Eni incurred a total expense of euro 48.3 million,down 39% from 2011, to protect the health of its employees. The2012, figure is in line with the level of expenditure of 2010.Eni expects to continue incurring amounts of expenses for healthwhich will be in line with 2012 levels in future years.

 

> 
***Managing GHG emissions and implementation of the    Kyoto Protocol***

In December 2012 in Doha, the 18th Conference ofthe Parties to UNFCCC has achieved an agreement on the secondcommitment of the Kyoto Protocol, thus extending the formerinternational agreement after 2012 and until 2020.

Only some industrialized parties to the Kyoto Protocol haveextended their commitments and, in particular, the EU will reducein 2020 its GHG emissions by 20% compared to 1990 levels. Partiesshould define a new regime for post 2020 by 2015.

Regarding GHG emissions mitigation, Eni’s managementbelieves that the best solutions for mitigating GHG emissions arethe use of low emission energy sources and the adoption of highlyefficient technologies. Therefore Eni has carried out a detailedanalysis and identified a number of projects aiming at energysaving and emission reductions from its plants. In particular,significant projects are being implemented in order toeconomically exploit gas associated with the production ofliquids and reduce gas flaring. The Company plans to investapproximately euro 470 million over the next four years in Libya,Congo and Nigeria, to execute projects intended to monetize thereserves of associated gas and cut volumes of flared gas.Particularly in the period 2013-2016, Eni plans to cut by 71% thevolumes of gas flaring compared to 2007 levels. Moreover, Eni isimplementing measures targeting energy efficiency in variousinstallations and facilities including refineries, petrochemicalsplants and electricity plants, and actions to better manage gasemissions in transport and distribution activities.

Italy is subject to the European Union Emission Trading Scheme(EU-ETS) that was established by Directive No. 2003/87/EC.Effective from January 1, 2005, EU-ETS is the largest carbonmarket in the world for exchanging emission allowances targetingindustrial installations with high carbon dioxide emissions.

As required by the Directive, Italy has approved two NationalAllocation Plans (NAP) covering the periods 2005-2007 and2008-2012 which set out the allowances issued to each sector andinstallation. The EU-ETS Directive provides that each MemberState shall ensure that any operator, who produces GHG emissionsin excess of the amounts allowed on the base of nationalallocation plan, is required to acquire allowances on the marketto cover the excess emissions or to pay a penalty. The excessemissions penalty for the period 2008-2012 amounts to euro 100for each tonne of carbon dioxide equivalent produced in excess ofthe allowances acquired on the market. The payment of the penaltyshall not release the operator from the obligation to surrenderan amount of allowances equal to those excess emissions whensurrendering allowances in relation to the following calendaryear. All companies are expected to identify and carry outprojects for emission reductions.

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Eni participates in the ETS scheme with 36 plants in Italy and3 outside Italy, which collectively represent more than 40% ofall greenhouse gas emissions generated by Eni’s plantsworldwide. In the period 2008-2012 Eni was entitled to allowancesequal to 122.9 mmtonnes of carbon dioxide for existinginstallations and further 3.3 mmtonnes in relation to newinstallations for the 2008-2012 period. Based on theimplementation of projects designed to reduce emissions,particularly the start-up of high efficiency combined cycles forthe cogeneration of electricity and steam, the amount of carbondioxide emitted by Eni’s plants has complied with mandatorylimits in each of the reported periods up to 2012.

Due to stricter allocation rules in the third phase(2013-2020) of the Emissions Trading Scheme, Eni shall receive alower amount of free allowances. As a consequence, in the nextfour-year period (2013-2016), Eni shall buy on the market anhigher amount of allowances to cover GHG emissions of itsindustrial plants. The majority of the deficit (over 85%) isconcentrated in the power sector, because electricity producerswill not receive any free allowances in the third phase.Nevertheless, current wholesale power prices are incorporating CO2cost, and Eni has a very modern and efficient fleet, so theexpectation is to be able to reflect the cost of CO2in the price of electricity sold. On the other hand, theremaining Eni sectors will incur in a higher CO2 cost.This cost will be mainly incurred in the period 2014-2016,because in 2013 Eni’s installations can benefit from theallowances in banking coming from the 2012. The total cost in2014-2016 can be estimated in euro 80 million6.

To ensure comprehensive, transparent and accurate reportingfor GHG emissions, Eni introduced in 2005 its own Protocol foraccounting and reporting greenhouse gas emissions (GHG Accountingand Reporting Protocol), which is an essential requirement foremission certification. Indeed, accurate reporting supports thestrategic management of risks and opportunities related togreenhouse gases, the definition of objectives and the assessmentof progress. Eni GHG Protocol has been updated in 2012 to be incompliance with the new Monitoring and Reporting Guideline(European Regulation No. 601/2012) and with the best practicesreference document (American Petroleum Industry Compendium -August 2009). For safer and more accurate management of GHGemissions and with a view to supporting effective reporting, Eniprovided all its business units with a dedicated database, inorder to gather and report GHG emissions according to theProtocol and to ensure completeness, accuracy, transparency andconsistency of GHG accounting as required by certification needs.To improve the Eni accounting and reporting process, in 2012 Eniprovided independent verification of its 2011 equivalent CO2emissions data, as submitted to the Carbon Disclosure Project,and obtain the verification statement in accordance with ISO14063-3.

In the medium term, work is underway on the separation ofcarbon dioxide and its permanent storage in geologic reservoirs,a part of the CO2 Capture Project, an internationalR&D program carried out in conjunction with other oilcompanies. Eni is currently implementing Italy’s first CO2injection project in Cortemaggiore.

In both the medium and long term, management believes thatcompliance with changes in laws, regulations and obligationsrelating to climate change could result in substantial capitalexpenditure, taxes, reduced profitability from changes inoperating costs, and revenue generation and strategic growthopportunities being impacted. Eni’s commitment to thetransition to a lower-carbon economy may create expectations forour activities and related liabilities, and the level ofparticipation in alternative energies carries reputational,economic and technology risks.

 

**Regulation of Eni’s businesses**

> 
***Overview***

*The matters regarding the effects of recent or proposedchanges in Italian legislation and regulations or EU directivesdiscussed below and elsewhere herein are forward-lookingstatements and involve risks and uncertainties that could causethe actual results to differ materially from those in suchforward-looking statements. Such risks and uncertainties includethe precise manner of the interpretation or implementation ofsuch legal and regulatory changes or proposals, which may beaffected by political and other developments.*

 

> 
***Regulation of exploration and production activities***

Eni’s exploration and production activities are conductedin many countries and are therefore subject to a broad range oflegislation and regulations. These cover virtually all aspects ofexploration and production activities, including matters such aslicense acquisition, production rates, royalties, pricing,environmental protection, export, taxes and foreign exchange. Theterms and conditions of the leases, licenses and contracts underwhich these oil and gas interests are held vary from country tocountry. These leases, licenses and contracts are generallygranted by or entered into with 

----

| (6) |    | Total deficit        2015-2016 (excluding power sector): euro 5.7 million        allowances. Average price CO2 2014-2016: 14        euro/t (Eni scenario - October 2012). |
|-----|--------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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a government entity or state company and are sometimes enteredinto with private property owners. These arrangements usuallytake the form of licenses or production sharing agreements. See"Regulation of the Italian hydrocarbons industry" and"Environmental matters" for a description of thespecific aspects of the Italian regulation and of environmentalregulation concerning Eni’s exploration and productionactivities.

Licenses (or concessions) give the holder the right to explorefor and exploit a commercial discovery. Under a license, theholder bears the risk of exploration, development and productionactivities and provides the financing for these operations. Inprinciple, the license holder is entitled to all production minusany royalties that are payable in kind. A license holder isgenerally required to pay production taxes or royalties, whichmay be in cash or in kind. Both exploration and productionlicenses are generally for a specified period of time (except forproduction licenses in the United States which remain in effectuntil production ceases). The term of Eni’s licenses and theextent to which these licenses may be renewed vary by area.

In Product Sharing Agreements (PSA), entitlements toproduction volumes are defined on the basis of contractualagreements drawn up with state oil companies which hold theconcessions. Such contractual agreements regulate the recovery ofcosts incurred for the exploration, development and operatingactivities (Cost Oil) and give entitlement to a portion of theproduction volumes exceeding volumes destined to cover costsincurred (Profit Oil).

A similar scheme to PSA applies to Service and"Buy-Back" contracts.

In general, Eni is required to pay income tax on incomegenerated from production activities (whether under a license orPSA). The taxes imposed upon oil and gas production profits andactivities may be substantially higher than those imposed onother businesses.

 

> 
***Regulation of the Italian hydrocarbons industry***

*The matters regarding the effects of recent or proposedchanges in Italian legislation and regulations or EU directivesdiscussed below and elsewhere herein are forward-lookingstatements and involve risks and uncertainties that could causethe actual results to differ materially from those in suchforward-looking statements. Such risks and uncertainties includethe precise manner of the interpretation or implementation ofsuch legal and regulatory changes or proposals, which may beaffected by political and other developments.*

 

> 
***Exploration & Production***

The Italian hydrocarbons industry is regulated by acombination of constitutional provisions, statutes, governmentaldecrees and other regulations that have been enacted and modifiedfrom time to time, including legislation enacted to implement EUrequirements (collectively, the "Hydrocarbons Laws").

*Exploration permits and production concessions.*Pursuant to the Hydrocarbons Laws, all hydrocarbons existing intheir natural condition in strata in Italy or beneath itsterritorial waters (including its continental shelf) are theproperty of the State. Exploration activities require anexploration permit, while production activities require aproduction concession, in each case granted by the Ministry ofProductive Activities through competitive auctions. The initialduration of an exploration permit is six years, with thepossibility of obtaining two three-year extensions and anadditional one-year extension to complete activities underway.Upon each of the three-year extensions, 25% of the area underexploration must be relinquished to the State. The initialduration of a production concession is 20 years, with thepossibility of obtaining a ten-year extension and additionalfive-year extensions until the field depletes.

*Royalties.* The Hydrocarbons Laws require the payment ofroyalties for hydrocarbon production. As per Legislative DecreeNo. 625 of November 25, 1996 and subsequent modifications andintegrations, royalties are equal to 10% onshore and 7% offshoreboth for gas and oil production; particularly in 2012 theroyalties for offshore production have been increased from 4% to7%.

 

> 
***Gas & Power***

**Natural gas market in Italy**

*Legislative Decree No. 130 of August 13, 2010    containing measures for increasing competition in the natural    gas market and transferring the ensuing benefits to final    customers according to Article 30, lines 6 and 7, of Law July    23, 2009, No. 99*

In 2011, Legislative Decree No. 130 of August 13, 2010 titled"New measures to improve competitiveness in the natural gasmarket and to ensure the transfer of economic benefits to finalcustomers" becameeffective. This new regulation replaced the previous system ofgas antitrust thresholds defined by Legislative Decree No. 164 ofMay 23, 2000 by introducing a 40% ceiling to the wholesale marketshare of each Italian gas operator who inputs gas into the

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| Italian backbone network. In the frame of Legislative        Decree No. 130/2010 Eni has committed itself to build        new storage capacity for 4 BCM        within five years from the enactment of the decree; as a        consequence the cap provided by the Legislative Decree        No. 130/2010 to its market share in Italy rises from 40%        to 55%. In the case of violations of the mandatory        threshold, Eni will be obliged to execute gas release        measures at regulated prices up to 4 BCM over a two-year        period following the ascertainment of the breach. Access        to the new storage capacity is reserved to industrial        customers and their consortium (3 BCM, already allocated)        and to gas fired power plants (1 BCM). Furthermore, the        decree establishes that upon request, industrial        customers are granted, for the new storage capacity which        is not yet at their disposal: |
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| • |   | up to March 2012, a        financial anticipation of the benefit they will have once        disposing of the new storage capacity (i.e. the gap        between summer and winter gas prices minus the cost of        storage services); and                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |
|--------|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| • |   | starting from April 2012 a        "virtual storage service", which consists of        the possibility to deliver gas in summer to a        "virtual storage operator" at a European hub        – TTF, Zeebrugge or PSV – and to be        re-delivered equivalent gas quantities in winter at the        Italian PSV, paying for the service a fee equivalent to        the cost of storage plus transmission costs, if any. The        Italian Gestore of Servizi Energetici has elected certain        virtual storage operators to be the providers of those        services. Industrial investors will then benefit from the        price differentials due to the seasonal swings of gas        demand. Eni, in compliance with Legislative Decree No.        130/2010 provisions, participated to the tender procedure        for the selection of "virtual storage        operators" for 50% of the requested quantities,        bidding a price fixed by the Italian Regulator (AEEG). |

Eni’s management is monitoring this issue with a view ofassessing any possible financial or economic impact associatedwith the enacted measures and their evolution. Management alsobelieves that this new gas regulation will increase competitionin the wholesale natural gas market in Italy leading to furthermargin pressures.

 

> 
*Law Decree No. 1 of January 24, 2012 for new    liberalization measures in Italy*

Law Decree No. 1 enacted by the Italian Government on January24, 2012, the so called Liberalization Decree was converted toLaw No. 20 on March 24, 2012.

| This Law aimed to: |
|--------------------|

| • |   | enhance competitiveness in        gas tariffs to residential customers and in the        distribution of refined products. The Italian Regulator        (AEEG), in charge with setting pricing mechanisms for        supplies to users starting from the second quarter of        2012, updated the indexation mechanism by increasing the        weight of spot prices in the indexation of the supply        costs of gas. In particular, spot prices have represented        a share of 3 and 4% of the cost of gas in the second and        third quarter 2012, respectively, and 5% in the period        October 2012-March 2013, with        the remaining part indexed to the supply cost provided by        a panel of oil-linked long-term contracts. The AEEG also        intends to progressively align the cost component        relating to the raw material to spot prices, granting to        operators with long-term contracts a component of price        related to the security of supply. Similarly other        regulatory authorities in European countries where Eni        operates are planning to issue a regulation aimed at        introducing a hub component in the pricing formulas        related to retail clients as well as measures to boost        liquidity and competitiveness in the gas market; and |
|--------|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| • |   | reduce the cost of natural        gas for industrial customers by giving them direct access        to storage capacity. This will be possible with a        redefinition of the binding modulation for residential        customers in case of rigid winter conditions and by        freeing up a percentage of strategic storage volumes. For        this purpose, the Ministry for Economic Development        enacted a Law Decree on February 15, 2013, introducing        changes to the criteria of assignment of storage capacity        in application of Article 14 of Law Decree No. 1, 2012        setting forth that:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |

|   |   | - |   | the storage capacity that        would be available as a result of new mechanisms for        determining the volumes of strategic storage, as well as        new modalities of calculation of obligation limitations        based on the criteria issued by the Ministry for the        Economic Development, are assigned, for a space        determined by the Ministry itself, for the offer to        industrial sector, integrated transportation services        through International pipelines and re-gasification,        including natural gas storage, allowing the supplies of        natural gas from abroad, in accordance with security        criteria requested, as well as by re-gasification        companies, as a guaranty for the respect of        re-gasification programs of their customers when non        predictable events occur; and |
|--------|--------|---|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   |   | - |   | is determined part of the        space of modulation storage devoted to the needs of        "vulnerable events", to be assigned, for the        needs of the clients themselves, with procedure of        competitive bid, and the part of the same space of        storage modulation to be assigned with ongoing        allocation procedures. |
|--------|--------|---|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

Based on the principles described above, at the beginningof 2013 the Minister of Economic Development and the ItalianAuthority for Electricity and Gas introduced new criteria for theallocation of gas storage capacities for the thermal year2013-2014. In particular, the decree on gas storage capacityallocation rules that, starting from the period April 1, 2013 toMarch 31, 2014, 4.2 BCM of storage is to be allocated throughauction, of which 2.5 BCM is reserved to domestic users and 1.7BCM for other users, including those without domestic consumersin their portfolios.

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A further 4.2 BCM of storage capacity reserved to domesticusers would still be allocated through the current system, whichassigns pro-rata storage volumes to operators based on the sizeof the market they cover.

 

> 
*Mandatory disposal of Eni’s interest in Snam*

On October 15, 2012, following the satisfaction of certainconditions precedent, including, in particular, antitrustapproval, Eni finalized the divestment to Cassa Depositi ePrestiti SpA ("CDP"), an entity controlled by theItalian Ministry of Economy and Finance, of 1,013,619,522ordinary shares of Snam SpA, corresponding to 30% less 1 share ofthe voting shares at a price of euro 3.47 a share, as providedfor by the sale and purchase contract of June 15, 2012.

The transaction implemented the provisions of Article 15 ofLaw Decree No. 1 of January 24, 2012 (enacted into Law No. 27 ofMarch 24, 2012), pursuant to which Eni divested its shareholdingin Snam in accordance with the model of ownership unbundling setout in Article 19 of Legislative Decree No. 93 of June 1, 2011,and in accordance with the criteria, terms and conditions definedin the Decree of the President of the Council of Ministers issuedon May 25, 2012 (the "DPCM") and designed to ensure thecomplete independence of Snam from the largest gas production andsale Company in Italy.

Furthermore, the DPCM provided the divestment of the residualshareholding of Eni in Snam through transparent andnon-discriminatory sales procedures targeted to both retail andinstitutional investors. On July 18, 2012, Eni finalized the saleof a further 5% interest in Snam (178,559,406 ordinary shares)through an accelerated book-building procedure reserved toItalian and foreign institutional investors.

The mandatory disposal of Eni’s interest in Snam SpA wasoriginally provided by Italian Law No. 290/2003 which prohibitsvertically-integrated companies operating in the natural gas andpower industries to retain an interest in excess of 20% in theshare capital of companies owning and managing national networksfor the transmission of natural gas and power. 

 

> 
*Negotiation platform for gas trading*

In compliance with the provisions of Law No. 99 of July 23,2009, on March 18, 2010, the Ministry for Economic Developmentpublished a Decree that implements a trading platform for naturalgas starting from May 10, 2010 aimed at increasing competitionand flexibility on wholesale markets. Management and organizationof this platform are entrusted to an independent operator, theGME (Gestore dei Mercati Energetici). On this platform are tradedalso volumes of gas corresponding to the legal obligations onpart of Italian importers and producers as per Law Decree No.7/2007. Under these provisions, importers were expected to supplygiven amounts of gas (from 5% to 10% of total gas import) to thevirtual exchange in order to receive permission to import, aswell as volumes corresponding to royalties due by owners ofmineral rights to the Italian State (and to Basilicata andCalabria Regions). Eni was required to offer at that platformabout 200 mmCM related to the residual obligation for volumesimported in thermal year October 1, 2008-September 30, 2009, andto the offer obligation for the October 1, 2009-September 30,2010 thermal year, as well as approximately 215 mmCM related toroyalties due for 2009 full year. Operators, also non-importers,are allowed to negotiate additional gas volumes over thecompulsory amounts on the platform according to the supply rulesdetermined by the AEEG. Since December 2010, the GME is alsotrader’s counterparty in transactions on the spot market fornatural gas (divided into day-ahead market and intraday market).We believe that these measures have increased the level ofliquidity in the Italian spot market of gas.

 

> 
*Natural gas prices*

Following the liberalization of the natural gas sectorintroduced in 2000 by Decree No. 164, prices of natural gas soldto industrial and power generation customers as well as towholesalers are freely negotiated. However the AEEG holds a powerof surveillance on this matter (see below) under Law No. 481/1995(establishing the AEEG) and Legislative Decree No. 164/2000.

Furthermore, the AEEG has been entrusted by the PresidentialDecree dated October 31, 2002 with the power of regulatingnatural gas prices to residential and commercial customers, alsowith a view of containing inflationary pressure deriving fromincreasing energy costs. Consistently with those provisions,companies which engage in selling natural gas through localnetworks are currently required to offer to those customers theregulated tariffs set by AEEG beside their own price proposals.Clients who are currently eligible to the safeguard regime set bythe Authority are those residential clients who did not opt forchoosing a supplier at the opening of the market in 2003(including those who consume less than 200,000 CM/y andresidential buildings). The above mentioned Legislative DecreeNo. 

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130/2010 enlarged this category by including all customersconsuming less than 50,000 CM/y and certain public services (forexample hospitals and other assistance facilities).

The pricing mechanism established by the AEEG indexes the costof gas to a predetermined basket of hydrocarbons for the purposeof setting tariffs to customers. Also a floor has beenestablished in the form of a fixed amount that applies only atcertain low level of international prices of hydrocarbons. LawDecree No. 1 enacted by the Italian Government on January 24,2012 (the so-called Liberalization Decree), converted to Law No.20 on March 24, 2012, has put the AEEG in charge with the task ofgradually introducing reference to the price of certainbenchmarks quoted at continental hubs in the indexation mechanismof the cost of gas in the pricing of sales to the above mentionedcustomers from the second quarter of 2012. The AEEG has updatedthe indexation mechanism by increasing the weight of spot pricesin the indexation of the supply costs of gas whereby spot priceshave represented a share of 3% and 4% of the cost of gas in thesecond and third quarter of 2012, respectively, and 5% in theperiod October 2012-March 2013, with the remaining part indexedto the supply cost provided by a panel of oil-linked long-termcontracts. Furthermore, the AEEG is planning to progressivelyalign the cost component relating to the raw material to spotprices, granting to operators with long-term contracts acomponent of price related to the security of supply. Similarlyother regulatory authorities in European countries where Eni ispresent are planning to issue a regulation aimed at introducing ahub component in the pricing formulas related to retail clientsas well as measures to boost liquidity and competitiveness in thegas market.

The same decree on liberalizations provides a measure intendedto reduce the supply cost of gas to businesses by enabling themto directly access certain new storage capacity. This newcapacity would be available as a result of new mechanisms fordetermining the volumes of strategic storage and storage capacitythat operators engaged in natural gas marketing are obliged toset aside to cover demand peaks from households and residentialclients during wintertime. This additional flexibility would makeavailable an integrated set of services from transport to storageto businesses in compliance with the public criteria of supplysecurity.

 

> 
***Refining and marketing of petroleum products***

*Refining.* The regulations introduced with Law No.9/1991 and No. 239/2004 (Article 1, paragraphs 56, 57 and 58)significantly changed the norms introduced in the 1930’sthat required that any refining activity be handled under aconcession from the state. Today an authorization is required toset up new processing and storage plants and for any change inthe capacity of mineral processing plants, while all otherchanges that do not affect capacity can be freely implemented.Another simplification measure has been introduced by Law DecreeNo. 5/2012 that defined mineral oil processing and storage plantsas "strategic settlements" that need authorization fromthe State, in agreement with the relevant Region, and imposes asingle process of authorization that must be closed within 180days. Management expects no material delays in obtaining relevantconcessions for the upgrading of the Sannazzaro and Tarantorefineries as planned in the medium term.

*Marketing.* Following the enactment of the abovementioned Law Decree No. 1 on January 24, 2012, certain measuresare expected to be introduced in order to increase levels ofcompetition in the retail marketing of fuels. The rulesregulating relations between oil companies and managers ofservice stations have been changed introducing the differencebetween principal and non-principal of a service station.Starting from June 30, 2012 principals will be allowed to supplyfreely up to 50% of their requirements. In such case thedistributing company will have the option to renegotiate termsand conditions of supplies and brand name use. As fornon-principals, the law allows the parties to renegotiate termsand conditions at the expiration of existing contracts and newcontractual forms can be introduced in addition to the only oneallowed so far, i.e. exclusive supply. The law also provides foran expansion of non-oil sales. Eni expects developments on thisissue to further increase pressure on selling margins in theretail marketing of fuels and to reduce opportunities ofincreasing Eni’s market share in Italy.

*Service stations.* Legislative Decree No. 32 of February11, 1998, as amended by Legislative Decree No. 346 of September8, 1999 and Law Decree No. 383 of October 29, 1999, as convertedin Law No. 496 of December 28, 1999, significantly changedItalian regulation of service stations. Legislative Decree No. 32replaces the system of concessions granted by the Ministry ofIndustry, regional and local authorities with an authorizationgranted by city authorities while the Legislative Decree No. 112of March 31, 1998 still confirms the system of such concessionsfor the construction and operation of service stations onhighways and confers the power to grant to Regions. Decree No. 32also provides for: (i) the testing of compatibility of existingservice stations with local planning and environmentalregulations and with those concerning traffic safety to beperformed by city authorities; (ii) upon the closure of at least7,000 service stations, the option to extend by 50% the openinghours (currently 52 hours per week) and a generally increasedflexibility in scheduling opening hours; (iii) simplification ofregulations concerning the sale of non-oil products and thepermission to perform simple maintenance and repair operations atservice stations; and (iv) the opening up of the logisticssegment by permitting third party access to unused storagecapacity for petroleum products. With the same goal of renewingthe Italian distribution network, Law No. 57 of March 5, 2001provides that the Ministry of Productive Activities is to prepareguidelines for the modernization of the network, and the Regionsshall follow those guidelines in the preparation of regionalplans. The subsequent Ministerial Decree of October 31, 2001 

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establishes the criteria for the closing down of incompatiblestations, the approval of the plan, the renewal of the network,the opening up of new stations and the regulations of theoperations of service stations on matters such as automation,working hours and non-oil activities.

After the approval of Law No. 133/2008, Article 28 of LawDecree No. 98/2011 converted into Law No. 111/2011, contains newguidelines for improving market efficiency and service qualityand increasing competition. Among other things it provides thatwithin July 6, 2012 all service stations must be provided withself-service equipment and that Regions will update theirregulations in order to allow the sale of non-oil products in allservice stations. Law Decree No. 1/2012 also allowed theinstallation of fully automated service stations with prepayment,but only outside city areas.

Law No. 133 of August 6, 2008, by intervening in competitionprovisions, removes some national and regional regulations whichmight prejudice the liberty of establishment and introduces newprovisions particularly concerning the elimination ofrestrictions concerning distances between service stations, theobligation to undertake non-oil activities and the liberalizationof opening hours. Management believes that those measures willfavor competition in the Italian retail market and supportefficient operators.

*Petroleum product prices.*Petroleum product prices werecompletely deregulated in May 1994 and are now freely establishedby operators. Oil and gas companies periodically report theirrecommended prices to the Ministry of Productive Activities; suchrecommendations are considered by service station operators inestablishing retail prices for petroleum products.

*Compulsory stocks.* According to Legislative Decree ofJanuary 31, 2001, No. 22 ("Decree 22/2001") enactingDirective No. 1993/98/EC (which regulates the obligation ofMember States to keep a minimum amount of stocks of crude oiland/or petroleum products) compulsory stocks, must be at leastequal to the quantities required by 90 days of consumption of theItalian market (net of oil products obtained by domesticallyproduced oil). In order to satisfy the agreement with theInternational Energy Agency (Law No. 883/1977), Decree No.22/2001 increased the level of compulsory stocks to reach atleast 90 days of net import, including a 10% deduction forminimum operational requirements. Decree No. 22/2001 states thatcompulsory stocks are determined each year by a decree of theMinister for Economic Development based on domestic consumptiondata of the previous year, defining also the amounts to be heldby each oil company on a site-by-site basis.

The Legislative Decree No. 249/2012, entered into force onFebruary 10, 2013 to implement the Directive No. 2009/119/EC(imposing an obligation on Member States to maintain minimumstocks of crude oil and/or petroleum products), sets forth inparticular: (a) that a high level of oil security of supplythrough a reliable mechanism to assure the physical access to oilemergency and specific stocks shall be kept; and (b) theinstitution of a Central Stockholding Entity under the control ofthe Ministry for Economic Development that should be in chargeof: (i) the purchase, holding, sell and transportation ofspecific stocks of products; (ii) the stocktaking; (iii) thestatistics on emergency, specific and commercial stocks; and,eventually (iv) the storage and transportation service ofemergency and commercial stocks in favor of sellers of petroleumproducts not vertically integrated in the oil chain.

As of December 31, 2012, Eni owned 6.2 mmtonnes of oilproducts inventories, of which 4.2 mmtonnes as "compulsorystocks", 1.6 mmtonnes related to operating inventories inrefineries and depots (including 0.2 mmtonnes of oil productscontained in facilities and pipelines) and 0.4 mmtonnes relatedto specialty products.

Eni’s compulsory stocks (as of December 31, 2012) wereheld in term of crude oil (31.5%), light and medium distillates(47%), fuel oil (17%) and other products (4.5%) and they werelocated throughout the Italian territory both in refineries (79%)and in storage sites (21%).

 

> 
***Competition***

Like all Italian companies, Eni is subject to Italian and EUcompetition rules. EU competition rules are set forth in Articles101 and 102 of the Lisbon Treaty on the Functioning of theEuropean Union entered into force on December 1, 2009("Article 101" and "Article 102",respectively being the result of the new denomination of formerArticles 81 and 82 of the Treaty of Rome as amended by the Treatyof Amsterdam dated October 2, 1997 and entered into force on May1, 1999) and EU Merger Control Regulation No. 139 of 2004("EU Regulation 139"). Article 101 prohibits collusionamong competitors that may affect trade among Member States andthat has the object or effect of restricting competition withinthe EU. Article 102 prohibits any abuse of a dominant positionwithin a substantial part of the EU that may affect trade amongMember States. EU Regulation 139 sets certain turnover limits forcross-border transactions, above which enforcement authorityrests with the European Commission and below which enforcement iscarried out by national competition authorities, such as theAntitrust Authority in the case of Italy. On May 1, 2004, a newregulation of the European Council came into force (No. 1/2003)which substitutes Regulation No. 17/1962 on the implementation ofthe rules on competition laid down in Articles 101 and 102 of theTreaty. In order to simplify the procedures required ofundertakings in case of conducts that potentially fall within thescope of Article 101 and 102 of 

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| the Treaty, the new regulation        substitutes the obligation to inform the Commission with        a self assessment by the undertakings that such conducts        does not infringe the Treaty. In addition, the burden of        proving an infringement of Article 101(1) or of Article        102 of the Treaty shall rest on the party or the        authority alleging the infringement. The undertaking or        association of undertakings claiming the benefit of        Article 101(3) of the Treaty shall bear the burden of        proving that the conditions of that paragraph are        fulfilled. The regulation defines the functions of        Authorities guaranteeing competition in Member States and        the powers of the Commission and of national courts. The        competition Authorities of the Member States shall have        the power to apply Articles 101 and 102 of the Treaty in        individual cases. For this purpose, acting on their own        initiative or on a complaint, they may take the following        decisions: |
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| • |   | requiring that an        infringement be brought to an end;                                                      |
|--------|--------|------------------------------------------------------------------------------------------------------------------|
| • |   | ordering interim measures;                                                                                       |
| • |   | accepting commitments; and                                                                                       |
| • |   | imposing fines, periodic        penalty payments or any other penalty provided for in        their national law. |

National courts shall have the power to apply Articles 101 and102 of the Treaty. Where the Commission, acting on a complaint oron its own initiative, finds that there is an infringement ofArticle 101 or of Article 102 of the Treaty, it may: (i) requirethe undertakings and associations of undertakings concerned tobring such infringement to an end; (ii) order interimmeasures; (iii) make commitments offered by undertakings to meetthe concerns expressed to them by the Commission binding on theundertakings; and (iv) find that Articles 101 and 102 of theTreaty are not applicable to an agreement for reasons ofCommunity public interest.

Eni is also subject to the competition rules established bythe Agreement on the European Economic Area (the "EEAAgreement"), which are analogous to the competition rules ofthe Lisbon Treaty (ex Treaty of Rome) and apply to competition inthe European Economic Area (which consists of the EU and Norway,Iceland and Liechtenstein). These competition rules are enforcedby the European Commission and the European Free Trade AreaSurveillance Authority.

In addition, Eni’s activities are subject to Law No. 287of October 10, 1990 (the "Italian Antitrust Law"). Inaccordance with the EU competition rules, the Italian AntitrustLaw prohibits collusion among competitors that restrictscompetition within Italy and prohibits any abuse of a dominantposition within the Italian market or a significant part thereof.However, the Italian Antitrust Authority may exempt for a limitedperiod agreements among companies that otherwise would beprohibited by the Italian Antitrust Law if such agreements havethe effect of improving market conditions and ultimately resultin a benefit for consumers.

 

**Property, plant and equipment**

Eni has freehold and leasehold interests in real estate innumerous countries throughout the world. Management believes thatcertain individual petroleum properties are of major significanceto Eni as a whole. Management regards an individual petroleumproperty as material to the Group in case it contains 10% or moreof the Company’ worldwide proved oil and gas reserves andmanagement is committed to invest material amounts ofexpenditures in developing it in the future. See"Exploration & Production" above for a descriptionof Eni’s both material and other properties and reserves andsources of crude oil and natural gas.

 

**Organizational structure**

Eni SpA is the parent company of the Eni Group. As of December31, 2012, there were 252 fully consolidated subsidiaries and 62associates that were accounted for under the equity or costmethod. For a list of subsidiaries of the Company, see"Exhibit 8. List of Eni’s fully consolidatedsubsidiaries for year 2012".

 

**Item 4A. UNRESOLVED STAFF COMMENTS**

***None.***

 

 

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**Item 5. OPERATING AND FINANCIAL REVIEW ANDPROSPECTS**

*This section is the Company’s analysis of itsfinancial performance and of significant trends that may affectits future performance. It should be read in conjunction with theKey Information presented in Item 3 and the ConsolidatedFinancial Statements and related Notes thereto included in Item18. The Consolidated Financial Statements are prepared inaccordance with International Financial Reporting Standards(IFRS) as issued by the IASB.*

In the Group’s 2012 financial statements the Italianregulated businesses managed by Snam SpA and its subsidiaries(Snam) have been reported as discontinued operations because theyrepresented a major line of business and Eni was mandated todivest the control over and any residual interest in the investeeto comply with provisions of the Italian Law on LiberalizationsNo. 27/2012 requiring the ownership unbundling of Eni from Snam.On October 15, 2012 Eni divested a 30% interest less one share in Snam to anItalian entity "Cassa Depositi e Prestiti" andrelinquished control over the entity as part of the transaction.The residual interest of Eni in Snam was equal to 20.2% of theshare capital of the investee as of the balance sheet date. Eniis forbidden from exercising the underlying voting rights byapplicable laws and therefore cannot influence the financial andoperating policy decisions of the investee. The Company also hasthe intention to dispose of the residual 20.2% interest and as aresult this was accounted for as a financial instrument atDecember 31, 2012, as described in "Item 18 – note 17– Financial instrument – Investments – Otherinvestments – of the Notes to the Consolidated FinancialStatements".

*This section contains forward-looking statements which aresubject to risks and uncertainties. For a list of importantfactors that could cause actual results to differ materially fromthose expressed in the forward-looking statements, see thecautionary statement concerning forward-looking statements onpage ii.*

 

**Executive summary**

Eni reported net profit from continuing operations of euro4,198 million for the year ended December 31, 2012, representinga decrease of 39.2% from 2011. That amount represented net profitfrom continuing operations attributable to Eni’sshareholders.

The Group’s operating profit from continuing operationsfor the year ended December 31, 2012 amounted to euro 15,026million, down 10.6% from 2011 mainly due to sharply higheroperating losses reported by the Gas & Power, Refining &Marketing and Chemical segments. Those losses were driven by theeconomic downturn in Europe and continuing margin decline due torising costs of oil-based raw materials, oversupplies and ongoingtough competition. Additionally, the reduced profitabilityoutlook in those businesses led management to recognize materialamounts of asset impairments in the region of euro 4 billion toalign the book values of goodwill and other intangible commercialassets in the gas business and refineries to their lowervalues-in-use. Also, operating profit was impacted by therecognition of a lower inventory holding gain amounting to euro17 million (euro 1,113 million in 2011). Further information oninventory holding gains and losses is provided on page 117.

These negative factors were partly offset by higher operatingprofit reported by the Exploration & Production segment, upby 16.1% due to an ongoing recovery in Libyan activities and theappreciation of the dollar over the euro.

Eni’s net profit from continuing operations for 2012benefited from gains in the range of euro 2 billion which wererecorded with respect to its Galp shareholding reflecting thedivestment of part of Eni’s interest in the investee, therevaluation at fair market value of the residual stake and othertransactions. In 2011, Eni recorded significant gains on thedivestment of certain international gas pipelines (euro 1,044million).

Finally, income taxes increased by euro 1,756 million drivenby higher taxes currently payable recorded by the Exploration& Production segment reflecting increased taxable profit anda write down of deferred tax assets (euro 1,030 million) incurredat Italian subsidiaries. This impairment was recognized toreflect a lower likelihood that deferred tax assets of Italiansubsidiaries can be recovered in future periods due to anexpected reduction in taxable income generated in Italy, and asEni has lost the availability of Snam taxable profit againstwhich Italian tax assets can be utilized following thedeconsolidation of Snam.

Management also evaluated the Company’s performance ofcontinuing operations in 2012 by excluding certain losses, mainlyasset impairments, risk and other provisions and the abovementioned write down of deferred tax assets, capital andrevaluation gains on the interest in Galp and other capital gainson the divestment of minor assets from net profit. Under thisassumption, net profit would have been slightly better than theprevious year.

Net cash provided by operating activities from continuingoperations amounted to euro 12,356 million for the year endedDecember 31, 2012 and proceeds from divestments amounted to euro6,014 million. Those cash inflows funded cash outflows relatingto capital expenditure totaling euro 12,761 million andinvestments (euro 569 million) relating to the acquisition ofNuon in Belgium and joint venture projects, as well as dividendpayments amounting to euro 4,379 million (of which euro 1,956million relating to the 2012 interim dividend, euro 1,884 millionto the balance of the 

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dividend for fiscal year 2011 to Eni’s shareholders andthe remaining part related to other dividend payments mainlyrelating Saipem and Snam).

Disposals of assets primarily related to the divestment of a30% interest less one share in Snam to Cassa Depositi e Prestiti(euro 3,517 million), two tranches of the interest in Galp for anoverall amount of euro 963 million (a 5% interest sold to AmorimBV and a 4% sold through an accelerated book-building procedure),a 10% interest in the Karachaganak field (euro 500 million) andother non-strategic assets in the Exploration & Productionsegment (euro 695 million). The proceeds on the sale of a 5%interest in Snam to institutional investors (euro 612 million)before loss of control over the investee, were recognized as anequity transaction, without impact on the profit and loss.

As of December 31, 2012 net borrowings amounted to euro 15,511million, a decrease of euro 12,521 million from December 31,2011, reflecting the divestment of a 30% interest in Snam toCassa Depositi e Prestiti (euro 3,517 million) and, following theloss of control in this entity, the deconsolidation of Snam netborrowings of euro 12,448 million.

In 2012, oil and natural gas production available for saleaveraged 1,631 kBOE/d. Production for the year expressed inbarrel-of-oil equivalent was computed assuming a natural gasconversion factor which was updated to 5,492 cubic feet of gasequals 1 barrel of oil. See disclosure in the footnote to the"Conversion Table" on page vi. On a comparable basis,i.e. when excluding the effect of updating the gas conversionfactor, production showed an increase of 7% for the full year.Production growth was driven by an ongoing recovery in Libyanproduction and continuing production start-up and ramp-upparticularly in Russia, Australia and Iraq. Those additions werepartly offset by unplanned downtime at the Elgin/Franklin field(Eni’s interest 21.87%) in the UK due to a gas leak, lossesin Nigeria due to force majeure and mature field declines.

Worldwide gas sales in 2012 amounted to 95.32 BCM, a decreaseof 1.44 BCM from 2011 or 1.5%, reflecting an ongoing demanddownturn. Natural gas sales in Italy were substantially unchangedfrom 2011, while lower volumes were recorded in a number ofEuropean markets (down by 1.96 BCM, or 3.7%) such as Benelux andthe Iberian Peninsula due to the exclusion of Galp sales afterloss of significant influence on the investee (for more detailedinformation see "Item 4 – Portfoliodevelopments"). Sales increased in France, Germany/Austria,and in the LNG business in Extra-European Markets.

| In 2012, capital expenditures of        continuing operations amounted to euro 12,761 million        (euro 11,909 million in 2011) and mainly related to: |
|-----------------------------------------------------------------------------------------------------------------------------------------------------------|

| • |   | oil and gas development        activities (euro 8,304 million) deployed mainly in        Norway, the United States, Congo, Italy, Kazakhstan,        Angola and Algeria;                                                                                                                                          |
|--------|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| • |   | exploration projects (euro        1,850 million) of which 98% was spent outside Italy,        primarily in Mozambique, Liberia, Ghana, Indonesia,        Nigeria, Angola and Australia;                                                                                                                           |
| • |   | upgrading the fleet used in        the Engineering & Construction segment (euro 1,011        million); and                                                                                                                                                                                                    |
| • |   | refining, supply and        logistics with projects designed to improve the        conversion rate and flexibility of refineries (euro 622        million), in particular at the Sannazzaro refinery, as        well as upgrading and rebranding of the refined product        retail network (euro 220 million). |

During the 2013-2016 four-year period, Eni expects to investapproximately euro 56.8 billion in capital expenditures andexploration projects to implement its growth strategy, based onthe assumptions discussed below under "Management’sexpectation of operations".

 

> 
***Trading environment***

|   |   | **2010** |   | **2011** |   | **2012** |
|--------|--------|----------|--------|----------|--------|----------|
|   |   |          |   |          |   |          |

| Average price of Brent dated crude oil in U.S.        dollars (1) |   | 79.47 |   | 111.27 |   | 111.58 |
|-------------------------------------------------------------------|--------|-------|--------|--------|--------|--------|
| Average        price of Brent dated crude oil in euro (2)         |   | 59.89 |   | 79.94  |   | 86.83  |
| Average EUR/USD exchange rate (3)                                 |   | 1.327 |   | 1.392  |   | 1.285  |
| Average        European refining margin in U.S. dollars (4)       |   | 2.66  |   | 2.06   |   | 4.83   |
| Euribor - three month euro rate % (3)                             |   | 0.8   |   | 1.4    |   | 0.6    |
|                                                              |   |       |   |        |   |        |

----

| (1) | i | Price per        barrel. Source: Platt’s Oilgram.                                                                                                                                                       |
|-----|---|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| (2) | i | Price per        barrel. Source: Eni’s calculations based on        Platt’s Oilgram data for Brent prices and the        EUR/USD exchange rate reported by the European Central        Bank (ECB). |
| (3) | i | Source: ECB.                                                                                                                                                                                                 |
| (4) | i | Price per        barrel. FOB Mediterranean Brent dated crude oil. Source:        Eni calculations based on Platt’s Oilgram data.                                                                        |

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When the term margin is used in the following discussion, itrefers to the difference between the average selling price anddirect acquisition cost of a finished product or raw materialexcluding other production costs (e.g. refining margin, margin ondistribution of natural gas and petroleum products or margin ofpetrochemicals products). Margin trends reflect the tradingenvironment and are, to a certain extent, a gauge of industryprofitability.

Eni’s results of operations and the year to yearcomparability of its financial results are affected by a numberof external factors which exist in the industry environment,including changes in oil, natural gas and refined productsprices, industry-wide movements in refining and petrochemicalmargins and fluctuations in exchange rates and interest rates.Changes in weather conditions from year to year can influencedemand for natural gas and some petroleum products, thusaffecting results of operations of the natural gas business and,to a lesser extent, of the refining and marketing business. See"Item 3 – Risk factors".

In 2012, Eni’s results were achieved in a tradingenvironment characterized by a marker Brent price of $111.58 perbarrel, almost in line with 2011. The gas market was influencedby weak demand as a consequence of the European economicslowdown. At the same time, the marketplace was well supplied,with very liquid continental hubs for spot transactions. Pricecompetition among operators has been stiff taking into accountminimum off-take obligations provided by gas purchase take-or-paycontracts and reduced sales opportunities. Spot prices in Europeincreased by 5% from 2011, although this was not reflected in gasmargins because of higher oil-linked supply costs and increasingcompetitive pressure. Refining margins showed a recovery from thedepressed levels in 2011 (the benchmark margin on Brent crudeaveraged $4.83 per barrel, up $2.77 per barrel). However themargins remained unprofitable due to the volatility of thetrading environment and weak fuel demand on the back of theeconomic downturn, excess capacity, competitive pressures andhigh costs of oil feedstock and oil-linked energy utilities.Furthermore, Eni’s complex refineries were impacted bynarrowing price differentials between light and heavy crudes.Results were helped by the appreciation of the U.S. dollar overthe euro (up 7.7%).

 

> 
***Key consolidated financial data***

|   |   | **2010** |   | **2011** |   | **2012** |
|--------|--------|----------|--------|----------|--------|----------|
|   |   |          |   |          |   |          |

|   |   | **(euro million)** |
|--------|--------|--------------------|

| Net sales from operations from continuing        operations                                                                |   |             |   | 96,617 |   | 107,690 |   |   | 127,220 |
|----------------------------------------------------------------------------------------------------------------------------|--------|------------------|--------|--------|--------|---------|--------|--------|---------|
| Operating        profit from continuing operations                                                                         |   |             |   | 15,482 |   | 16,803  |   |   | 15,026  |
| Net profit attributable to Eni from continuing        operations                                                           |   |             |   | 6,252  |   | 6,902   |   |   | 4,198   |
| Net profit        attributable to Eni from discontinued operations                                                         |   |             |   | 66     |   | (42     | )      |   | 3,590   |
| Net profit attributable to Eni                                                                                             |   |             |   | 6,318  |   | 6,860   |   |   | 7,788   |
| Net cash        provided by operating activities - continuing operations                                                   |   |             |   | 14,140 |   | 13,763  |   |   | 12,356  |
| Capital expenditures - continuing operations                                                                               |   |             |   | 12,450 |   | 11,909  |   |   | 12,761  |
| Acquisitions        of investments and businesses                                                                          |   |             |   | 410    |   | 360     |   |   | 569     |
| Shareholders’ equity including        non-controlling interest at year end                                            |   |             |   | 55,728 |   | 60,393  |   |   | 62,713  |
| Net        borrowings at year end                                                                                          |   |             |   | 26,119 |   | 28,032  |   |   | 15,511  |
| Net profit attributable to Eni basic and diluted        from continuing operations                                         |   | (euro per share) |   | 1.72   |   | 1.90    |   |   | 1.16    |
| Net profit        attributable to Eni basic and diluted from discontinued        operations                                |   |             |   | 0.02   |   | (0.01   | )      |   | 0.99    |
| Net profit attributable to Eni basic and diluted                                                                           |   |             |   | 1.74   |   | 1.89    |   |   | 2.15    |
| Dividend        per share                                                                                                  |   | (euro per share) |   | 1.00   |   | 1.04    |   |   | 1.08    |
| Ratio of net borrowings to total        shareholders’ equity including non-controlling        interest (leverage) (1) |   |             |   | 0.47   |   | 0.46    |   |   | 0.25    |
|                                                                                                                       |   |             |   |        |   |         |        |   |         |

----

| (1) |    | For a        discussion of the usefulness of and a reconciliation of        these non-GAAP financial measures with the most directly        comparable GAAP financial measures see - "Liquidity        and capital resources - Financial conditions" below. |
|-----|--------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

 

**Critical accounting estimates**

The preparation of the Consolidated Financial Statementsrequires the use of estimates and assumptions that affect theassets, liabilities, revenues and expenses reported in thefinancial statements, as well as amounts included in the notesthereto, including discussion and disclosure of contingentliabilities. Estimates made are based on complex or subjectivejudgments and past experience of other assumptions deemedreasonable in consideration of the information available at thetime. The accounting policies and areas that require the mostsignificant judgments and estimates to be used in the preparationof the Consolidated Financial Statements are in relation to theaccounting for oil and natural gas activities, specifically inthe determination of proved and proved developed reserves,impairment of fixed assets, 

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intangible assets and goodwill, asset retirement obligations,business combinations, pensions and other post-retirementbenefits, recognition of environmental liabilities andrecognition of revenues in the oilfield services construction andengineering businesses. Although the Company uses its bestestimates and judgments, actual results could differ from theestimates and assumptions used. A summary of significantestimates follows.

 

> 
***Oil and gas activities***

Engineering estimates of the Company’s oil and gasreserves are inherently uncertain. Proved reserves are theestimated volumes of crude oil, natural gas and gas condensates,liquids and associated substances which geological andengineering data demonstrate that can be economically produciblewith reasonable certainty from known reservoirs under existingeconomic conditions and operating methods. Although there areauthoritative guidelines regarding the engineering and geologicalcriteria that must be met before estimated oil and gas reservescan be designated as "proved", the accuracy of anyreserve estimate is a function of the quality of available data,engineering and geological interpretation and judgment. Fieldreserves will only be categorized as proved when all the criteriafor attribution of proved status have been met. At this stage,all booked reserves are classified as proved undeveloped. Volumesare subsequently reclassified from proved undeveloped to proveddeveloped as a consequence of development activity. The firstproved developed bookings occur at the point of first oil or gasproduction. Major development projects typically take one to fouryears from the time of initial booking to the start ofproduction. Eni reassesses its estimate of proved reservesperiodically. The estimated proved reserves of oil and naturalgas may be subject to future revision and upward and downwardrevision may be made to the initial booking of reserves due toproduction, reservoir performance, commercial factors,acquisition and divestment activity and additional reservoirdevelopment activity. In particular, changes in oil and naturalgas prices could impact the amount of Eni’s proved reservesin regards to the initial estimate and, in the case ofproduction-sharing agreements and buy-back contracts, the shareof production and reserves to which Eni is entitled. Accordingly,the estimated reserves could be materially different from thequantities of oil and natural as that ultimately will berecovered. Oil and natural gas reserves have a direct impact oncertain amounts reported in the Consolidated FinancialStatements. Estimated proved reserves are used in determiningdepreciation and depletion expenses and impairment expense.Depreciation rates on oil and gas assets using the UOP basis aredetermined from the ratio between the amount of hydrocarbonsextracted in the quarter and proved developed reserves existingat the end of the quarter increased by the amounts extractedduring the quarter. Assuming all other variables are heldconstant, an increase in estimated proved developed reserves foreach field decreases depreciation, depletion and amortizationexpense. Conversely, a decrease in estimated proved developedreserves increases depreciation, depletion and amortizationexpense. In addition, estimated proved reserves are used tocalculate future cash flows from oil and gas properties, whichserve as an indicator in determining whether or not propertyimpairment is to be carried out. The larger the volume ofestimated reserves, the lower the likelihood of asset impairment.

 

> 
***Impairment of assets***

Assets, including goodwill, are impaired when there are eventsor changes in circumstances that indicate the carrying values ofthe assets are not recoverable. Such impairment indicatorsinclude changes in the Group’s business plans, changes incommodity prices leading to unprofitable performance, a reducedutilization of the plants and, for oil and gas properties,significant downward revisions of estimated proved reservequantities or significant increase of the estimated developmentcosts. Determination as to whether and how much an asset isimpaired involves management estimates on highly uncertain andcomplex matters such as future commodity prices, the effects ofinflation and technology improvements on operating expenses,production profiles and the outlook for global or regional marketsupply and demand conditions for crude oil, natural gas,commodity chemicals and refined products. Similar remarks arevalid for the physical recoverability of assets recognized in thebalance sheet (deferred costs – see also item "Currentassets") related to natural gas volumes not collected underlong-term purchase contracts with take-or-pay clauses as well as in order totest the recoverability of deferred tax assets. The amountof an impairment loss is determined by comparing the book valueof an asset with its recoverable amount. The recoverableamount is the greater of fair value net of disposal cost or thevalue in use. The estimated value in use is based on the presentvalues of expected future cash flows net of disposal costs. Theexpected future cash flows used for impairment analyses are basedon judgmental assessments of future production volumes, pricesand costs, considering available information at the date ofreview and are discounted by using a rate related to the activityinvolved. For oil and natural gas properties, the expected futurecash flows are estimated principally based on developed andnon-developed proved reserves including, among other elements,production taxes and the costs to be incurred for the reservesyet to be developed. Oil, natural gas and petroleum productprices (and prices from products which are derived there from)used to quantify the expected future cash flows are estimatedbased on forward prices prevailing in the marketplace for thefirst four years and management’s long-term planningassumptions thereafter. The estimate of the future amount ofproduction is based on assumptions related to the commodityfuture prices, lifting and development costs, field declinerates, market demand and other factors. The discount ratereflects the current market valuation of the time value of moneyand of the specific risks of the asset not reflected in theestimate of the future cash flows. Goodwill and other intangibleassets with an indefinite useful life are not subject toamortization. The Company tests for impairment such assets at thecash 

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generating unit level on an annual basis and whenever there isan indication that they may be impaired. In particular, goodwillimpairment is based on the lowest level (cash generating unit) towhich goodwill can be allocated on a reasonable and consistentbasis. A cash generating unit is the smallest aggregate on whichthe Company, directly or indirectly, evaluates the return on thecapital expenditure. If the recoverable amount of a cashgenerating unit is lower than the carrying amount, goodwillattributed to that cash generating unit is impaired up to thatdifference; if the carrying amount of goodwill is less than theamount of impairment, assets of the cash generating unit areimpaired pro-rata on the basis of their carrying amount for theresidual difference.

 

> 
***Asset retirement obligations***

Obligations to remove tangible equipment and restore land orseabed require significant estimates in calculating the amount ofthe obligation and determining the amount required to be recordedpresently in the Consolidated Financial Statements. Estimatingfuture asset retirement obligations is complex. It requiresmanagement to make estimates and judgments with respect toremoval obligations that will come to term many years into thefuture and contracts and regulations are often unclear as to whatconstitutes removal. In addition, the ultimate financial impactof environmental laws and regulations is not always clearly knownas asset removal technologies and costs constantly evolve in thecountries where Eni operates, as do political, environmental,safety and public expectations. The subjectivity of theseestimates is also increased by the accounting method used thatrequires entities to record the fair value of a liability for anasset retirement obligation in the period when it is incurred(typically, at the time the asset is installed at the productionlocation). When liabilities are initially recorded, the relatedfixed assets are increased by an equal corresponding amount. Theliabilities are updated with the passage of time (i.e. interestaccretion) and any change in the estimates following themodification of future cash flows and discount rate adopted. Therecognized asset retirement obligations are based on futureretirement cost estimates and incorporate many assumptions suchas: expected recoverable quantities of crude oil and natural gas,abandonment time, future inflation rates and the risk-free rateof interest adjusted for the Company’s credit costs.

 

> 
***Business combinations***

Accounting for business combinations requires the allocationof the purchase price to the various assets and liabilities ofthe acquired business at their respective fair values. Anypositive residual difference is recognized as"Goodwill". Negative residual differences are creditedto the profit and loss account. Management uses all availableinformation to make these fair value determinations and, formajor business combinations, typically engages independentexternal advisors to assist in the fair value determination ofthe acquired assets and liabilities.

 

> 
***Environmental liabilities***

Together with other companies in the industries in which itoperates, Eni is subject to numerous EU, national, regional andlocal environmental laws and regulations concerning its oil andgas operations, production and other activities. They includelegislations that implement international conventions orprotocols. Environmental costs are recognized when it becomesprobable that a liability has been incurred and the amount can bereasonably estimated. Management, considering the actions alreadytaken, insurance policies obtained to cover environmental risksand provision for risks accrued, does not expect any materialadverse effect on Eni’s consolidated results of operationsand financial position as a result of such laws and regulations.However, there can be no assurance that there will not be amaterial adverse impact on Eni’s consolidated results ofoperations and financial position due to: (i) the possibility ofan unknown contamination; (ii) the results of the ongoing surveysand other possible effects of statements required by applicablelaws; (iii) the possible effects of future environmentallegislations and rules; (iv) the effects of possibletechnological changes relating to future remediation; and (v) thepossibility of litigation and the difficulty of determiningEni’s liability, if any, against other potentiallyresponsible parties with respect to such litigations and thepossible insurance recoveries.

 

> 
***Employee benefits***

Defined benefit plans are evaluated with reference touncertain events and based upon actuarial assumptions includingamong others discount rates, expected rates of return on planassets, expected rates of salary increases, medical cost trends,estimated retirement dates and mortality rates. The significantassumptions used to account for defined benefit plans aredetermined as follows: (i) discount and inflation rates reflectthe rates at which benefits could be effectively settled, takinginto account the duration of the obligation. Indicators used inselecting the discount rate include market yields on high qualitycorporate bonds. The inflation rates reflect market conditionsobserved Country 

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by Country; (ii) the future salary levels of the individualemployees are determined including an estimate of future changesattributed to general price levels (consistent with inflationrate assumptions), productivity, seniority and promotion; (iii)healthcare cost trend assumptions reflect an estimate of theactual future changes in the cost of the healthcare relatedbenefits provided to the plan participants and are based on pastand current healthcare cost trends including healthcareinflation, changes in healthcare utilization and changes inhealth status of the participants; (iv) demographicassumptions such as mortality, disability and turnover reflectthe best estimate of these future events for individual employeesinvolved; and (v) determination of the expected rates of returnon assets is made through compound averaging. For each plan, thedistribution of investments among bonds, equity and cash andtheir specific average expected rate of return is taken intoaccount. Differences between expected and actual costs andbetween the expected return and the actual return on plan assetsroutinely occur and are called actuarial gains and losses. Eniapplies the corridor method to amortize its actuarial losses andgains. This method amortizes on a pro-rata basis the netcumulative unrecognized actuarial gains and losses at the end ofthe previous reporting period that exceed the greater of 10% of:(i) the present value of the defined benefit obligation; and (ii)the fair value of plan assets, over the average expectedremaining working lives of the employees participating in theplan. Additionally, obligations for other long-term benefits aredetermined by adopting actuarial assumptions. The effects ofchanges in actuarial assumptions or a change in thecharacteristics of the benefit are taken to the profit or loss intheir entirety.

 

> 
***Contingencies***

In addition to accruing the estimated costs for environmentalliabilities, asset retirement obligation and employee benefits,Eni accrues for all contingencies that are both probable andestimable. These other contingencies are primarily related tolitigation and tax issues. Determining the appropriate amount toaccrue is a complex estimation process that includes subjectivejudgments of the management.

 

> 
***Revenue recognition in the Engineering &    Construction segment***

Revenue recognition in the Engineering & Constructionsegment is based on the stage of completion of a contract asmeasured on the cost-to-cost basis applied to contractualrevenues. Use of the stage of completion method requiresestimates of future gross profit on a contract by contract basis.The future gross profit represents the profit remaining afterdeducting costs attributable to the contract from revenuesprovided for in the contract. The estimate of future gross profitis based on a complex estimation process that includesidentification of risks related to the geographical region wherethe activity is carried out, market conditions in that region andany assessment that is necessary to estimate with sufficientprecision the total future costs as well as the expectedtimetable to the end of the contract. Additional income, derivedfrom a change in the scope of work, is included in the totalamount of revenues when it is probable that the customer willapprove the variation and the related amount. Claims derivingfrom additional costs incurred for reasons attributable to thecustomer are included in the total amount of revenues when it isprobable that the counterparty will accept them.

 

**2010-2012 Group results of operations**

> 
***Overview of the profit and loss account for three    years ended December 31, 2010, 2011 and 2012***

The table below sets forth a summary of Eni’s profit andloss account for the periods indicated. All line items includedin the table below are derived from the Consolidated FinancialStatements prepared in accordance with IFRS. Eni’s financialstatements include Snam Group in the manner discussed above.Previous periods have been restated accordingly.

 

 

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|   | **Year ended December 31,** |
|--------|-----------------------------|
|   |                             |

|   |   | **2010** |   | **2011** |   | **2012** |
|--------|--------|----------|--------|----------|--------|----------|
|   |   |          |   |          |   |          |

|   |   | **(euro million)** |
|--------|--------|--------------------|

| Net sales from operations                                    |   | 96,617     |   |   | 107,690    |   |   | 127,220    |   |
|--------------------------------------------------------------|--------|------------|--------|--------|------------|--------|--------|------------|--------|
| Other        income and revenues (1)                         |   | 967        |   |   | 926        |   |   | 1,546      |   |
|                                                         |   |            |        |   |            |        |   |            |        |
| Total revenues                                               |   | 97,584     |   |   | 108,616    |   |   | 128,766    |   |
| Operating        expenses                                    |   | (73,202    | )      |   | (83,199    | )      |   | (100,021   | )      |
| Other operating (expense) income                             |   | 131        |   |   | 171        |   |   | (158       | )      |
| Depreciation,        depletion, amortization and impairments |   | (9,031     | )      |   | (8,785     | )      |   | (13,561    | )      |
|                                                         |   |            |        |   |            |        |   |            |        |
| **OPERATING PROFIT**                                         |   | **15,482** |   |   | **16,803** |   |   | **15,026** |   |
| Finance        income (expense)                              |   | (749       | )      |   | (1,146     | )      |   | (1,307     | )      |
| Income (expense) from investments                            |   | 1,112      |   |   | 2,123      |   |   | 2,881      |   |
|                                                         |   |            |        |   |            |        |   |            |        |
| **PROFIT        BEFORE INCOME TAXES**                        |   | **15,845** |   |   | **17,780** |   |   | **16,600** |   |
| Income taxes                                                 |   | (8,581     | )      |   | (9,903     | )      |   | (11,659    | )      |
|                                                         |   |            |        |   |            |        |   |            |        |
| **Net        profit - continuing operations**                |   | **7,264**  |   |   | **7,877**  |   |   | **4,941**  |   |
| **Net profit - discontinued operations**                     |   | **119**    |   |   | **(74**    | **)**  |   | **3,732**  |   |
|                                                         |   |            |        |   |            |        |   |            |        |
| **Net        profit**                                        |   | **7,383**  |   |   | **7,803**  |   |   | **8,673**  |   |
| Attributable to:                                             |   |       |   |   |       |   |   |       |   |
| Eni’s        shareholders:                              |   | 6,318      |   |   | 6,860      |   |   | 7,788      |   |
| - continuing operations                                      |   | 6,252      |   |   | 6,902      |   |   | 4,198      |   |
| -        discontinued operations                             |   | 66         |   |   | (42        | )      |   | 3,590      |   |
| Non-controlling interest:                                    |   | 1,065      |   |   | 943        |   |   | 885        |   |
| -        continuing operations                               |   | 1,012      |   |   | 975        |   |   | 743        |   |
| - discontinued operations                                    |   | 53         |   |   | (32        | )      |   | 142        |   |
|                                                         |   |            |        |   |            |        |   |            |        |

----

| (1) |    | Includes,        among other things, contract penalties, income from        contract cancellations, gains on disposal of mineral        rights and other fixed assets, compensation for damages        and indemnities and other income. |
|-----|--------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

The table below sets forth certain income statement items as apercentage of net sales from operations for the periodsindicated.

|   | **Year ended December 31,** |
|--------|-----------------------------|
|   |                             |

|   |   | **2010** |   | **2011** |   | **2012** |
|--------|--------|----------|--------|----------|--------|----------|
|   |   |          |   |          |   |          |

|   |   | **(%)** |
|--------|--------|---------|

| Operating expenses                                           |   | 75.8     |   | 77.3     |   | 78.6     |
|--------------------------------------------------------------|--------|----------|--------|----------|--------|----------|
| Depreciation,        depletion, amortization and impairments |   | 9.3      |   | 8.2      |   | 10.7     |
| **OPERATING PROFIT**                                         |   | **16.0** |   | **15.6** |   | **11.8** |
|                                                         |   |          |   |          |   |          |

 

| *2012 compared to 2011.*Net profit        attributable to Eni’s shareholders from continuing        operations in 2012 was euro 4,198 million, a decrease of        euro 2,704 million from 2011, or 39.2%. This decrease was        driven by: |
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (i)   |   | a lower operating        performance (down by euro 1,777 million, or 10.6% from        2011) which was mainly reported by the Gas & Power,        Refining & Marketing and Chemical segments due to a        downturn in demand, competitive pressure and unprofitable        unit margins. Results also reflected higher impairments        of property, plant and equipment and intangible assets,        mostly in the gas marketing and refining businesses due        to a reduced profitability outlook on the back of the        ongoing European downturn. The negative factors were        partly offset by better results reported by the        Exploration & Production segment (up by 16.1%); |
|-------|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| (ii)  |   | the lower operating        performance was also affected by the recognition of lower        inventory holding gains in particular in the Refining        & Marketing and, to a minor extent, Gas & Power        segments (down euro 1,096 million from a year ago).        Further information on inventory holding gains and losses        is provided on page 117; and                                                                                                                                                                                                                                                                                                                                       |
| (iii) |   | higher income taxes (up euro        1,756 million compared to 2011 full year) currently        payable by subsidiaries in the Exploration &        Production segment operating outside Italy due to higher        taxable profit. The Company also recognized a write down        of euro 1,030 million to reflect a lower likelihood that        certain deferred tax assets of Italian subsidiaries can        be recovered in future periods due to an expected        reduction in taxable income generated in Italy, and as        Eni has lost the availability of Snam taxable profit        against which Italian tax assets can be utilized        following the deconsolidation of Snam.                |

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These decreases were partly offset by higher profits reportedfrom equity-accounted and cost-accounted entities andfinancial assets, mainly reflecting therecording of gains on disposal and revaluation of interestsrelating to the divestment of part of Eni’s interest in Galp(an overall gain of approximately euro 2 billion). These gainswere partly offset by the fact that in 2011 Eni benefited fromgains recorded on the divestment of Eni’s interests ininternational gas pipelines (euro 1,044 million).

| *2011 compared to 2010.*Net profit        attributable to Eni’s shareholders from continuing        operations in 2011 was euro 6,902 million, an increase of        euro 650 million from 2010, or 10.4%. This increase was        driven by: |
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (i)   |   | an improved operating        performance (up by 8.5% from 2010) which was mainly        related to the results reported by the Exploration        & Production segment (up by 14.6%), reflecting a        favorable trading environment and by the Engineering        & Construction segment due to strong business        trends. These positive factors were partly offset by        sharply lower results reported by the Gas & Power,        the Chemical and the Refining & Marketing segments        due to a downturn in demand and unprofitable unit        margins; |
|-------|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| (ii)  |   | recognition of higher        inventory holding gains in particular in the Refining        & Marketing segment; and                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |
| (iii) |   | higher profits reported from        equity-accounted and cost-accounted entities, mainly        reflecting the gains recorded on the divestment of        international pipelines (euro 1,044 million).                                                                                                                                                                                                                                                                                                                                                                                                |

These increases were partly offset by higher income taxes (upeuro 1,322 million compared to 2010 full year) currently payableby subsidiaries in the Exploration & Production segmentoperating outside Italy due to higher taxable profit. The Companyalso recognized an adjustment to deferred taxation (euro 573million) due to a changed tax rate applicable to a productionsharing agreement in the Exploration and Production segment.

The table below sets forth, for the periods indicated, detailsof certain gains and charges included in net profit attributableto Eni’s shareholders from continuing operations.

|   | **Year ended December 31,** |
|--------|-----------------------------|
|   |                             |

| **Eni        Group** |   | **2010** |   | **2011** |   | **2012** |
|----------------------|--------|----------|--------|----------|--------|----------|
|                 |   |          |   |          |   |          |

|   |   | **(euro million)** |
|--------|--------|--------------------|

| Profit (loss) on stock                                                           |   | 881        |   |   | 1,113    |   |   | 17         |   |
|----------------------------------------------------------------------------------|--------|------------|--------|--------|----------|--------|--------|------------|--------|
| Provisions        for Antitrust and other Authorities proceedings                |   | 246        |   |   | (69      | )      |   |       |   |
| Environmental provisions                                                         |   | (1,360     | )      |   | (176     | )      |   | (63        | )      |
| Impairment        losses                                                         |   | (692       | )      |   | (1,031   | )      |   | (4,029     | )      |
| Net gains on disposal of assets                                                  |   | 252        |   |   | 57       |   |   | 548        |   |
| Risk        provisions                                                           |   | (95        | )      |   | (88      | )      |   | (945       | )      |
| Provision for redundancy incentives                                              |   | (400       | )      |   | (203     | )      |   | (64        | )      |
| Fair value        gains/losses on commodity derivatives                          |   | 2          |   |   | (15      | )      |   | 1          |   |
| Other                                                                            |   | 19         |   |   | (100     | )      |   | (271       | )      |
|                                                                             |   |            |        |   |          |        |   |            |        |
| **Net        (charges) gains in operating profit**                               |   | **(1,147** | **)**  |   | **(512** | **)**  |   | **(4,806** | **)**  |
|                                                                             |   |            |        |   |          |        |   |            |        |
| Capital gains and revaluation gains on Galp                                      |   |       |   |   |     |   |   | 2,011      |   |
| Other        capital gains/write downs on investments                            |   | 324        |   |   | 879      |   |   | (73        | )      |
| Write down of deferred tax assets/recognition of        deferred tax liabilities |   |       |   |   | (552     | )      |   | (803       | )      |
| Tax        effects on the above listed items                                     |   | 340        |   |   | 151      |   |   | 864        |   |
| Other                                                                            |   | (35        | )      |   | (2       | )      |   | (123       | )      |
|                                                                             |   |            |        |   |          |        |   |            |        |
| **Net        (charges) gains in net profit**                                     |   | **(518**   | **)**  |   | **(36**  | **)**  |   | **(2,930** | **)**  |
|                                                                             |   |            |        |   |          |        |   |            |        |

 

> 
***Discontinued operations***

In accordance with IFRS 5, results of the Italian regulatedbusinesses managed by Snam have been reported as discontinuedoperations throughout the whole of 2012 until loss of control onthe entity which occurred in October 2012 as part of atransaction to divest a 30% interest less one share inSnam to an Italian entity, Cassa Depositi e Prestiti. Thedivestment took place in accordance with Article 15 of Law DecreeNo. 1 of January 24, 2012, enacted into Law No. 27 of March 24,2012 which mandated the ownership unbundling of Snam. Prior yeardata have been modified accordingly.

In accordance with the guidelines of IFRS 5, assets andliabilities, results of operations and cash flow of thediscontinued operations are reported separately from theGroup’s continuing operations, including gains on thedisposal and the revaluation of the residual interest. IFRS alsorequires that the profits earned by the discontinued operations,in this case the Snam operations, on sales to the continuingoperations be eliminated on consolidation from the discontinuedoperations and attributed to the continuing operations and viceversa. This representation does not indicate 

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the profits earned by continuing or discontinued operations,as if they were standalone entities. To allow a like-for-likecomparison, results of the previous reporting periods have beenmodified accordingly.

The table below sets forth net profit from discontinuedoperations for the periods indicated.

|        | **Year ended December 31,** |
|--------|-----------------------------|
|   |                             |

|   |   | **2010** |   | **2011** |   | **2012** |
|--------|--------|----------|--------|----------|--------|----------|
|   |   |          |   |          |   |          |

|   |   | **(euro million)** |
|--------|--------|--------------------|

| **Net profit - discontinued operations** |   | **119** |   | **(74** | **)**  |   | **3,732** |
|------------------------------------------|--------|---------|--------|---------|--------|--------|-----------|
| attributable        to:                  |   |    |   |    |   |   |      |
| - Eni                                    |   | 66      |   | (42     | )      |   | 3,590     |
| -        non-controlling interest        |   | 53      |   | (32     | )      |   | 142       |
|                                     |   |         |   |         |        |   |           |

In 2012, discontinued operations earned net profit of euro3,732 million which mainly comprised the capital gain on thedivestment of a 30% interest less one share in Snam toCassa Depositi e Prestiti for euro 2,019 million and arevaluation gain of euro 1,451 million on the residual interest;both gains were subject to a limited tax under current Italiantax rules.

Profit earned by discontinued operations in previous reportingperiods reflected the fact that Snam and its subsidiaries deriveda large part of their revenues from intercompany transactionswhich profit margins were eliminated upon consolidation. As aresult, the underlying profit or loss earned by the discontinuedoperations represented only profit or loss earned by the Group ontransactions with third parties.

 

> 
***Analysis of the line items of the profit and loss    account of continuing operations***

***a) Total revenues***

Eni’s revenues from continuing operations were euro128,766 million, euro 108,616 million and euro 97,584 million forthe year ended December 31, 2012, 2011 and 2010, respectively.Total revenues consist of net sales from operations and otherincome and revenues. Eni’s net sales from operations fromcontinuing operations amounted to euro 127,220 million, euro107,690 million and euro 96,617 million for the year endedDecember 31, 2012, 2011 and 2010, respectively, and its otherincome and revenues totaled euro 1,546 million, euro 926 millionand euro 967 million, respectively, in these periods.

 

 

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> 
*Net sales from operations from continuing operations*

The table below sets forth, for the periods indicated, the netsales from operations from continuing operations generated byeach of Eni’s business segments including intra-group sales,together with consolidated net sales from operations.

|   | **Year ended December 31,** |
|--------|-----------------------------|
|   |                             |

|   |   | **2010** |   | **2011** |   | **2012** |
|--------|--------|----------|--------|----------|--------|----------|
|   |   |          |   |          |   |          |

|   |   | **(euro million)** |
|--------|--------|--------------------|

| Exploration & Production                                  |   | 29,497     |   |   | 29,121      |   |   | 35,881      |   |
|---------------------------------------------------------------|--------|------------|--------|--------|-------------|--------|--------|-------------|--------|
| Gas &        Power (1)                                    |   | 27,806     |   |   | 33,093      |   |   | 36,200      |   |
| Refining & Marketing                                      |   | 43,190     |   |   | 51,219      |   |   | 62,656      |   |
| Chemicals                                                     |   | 6,141      |   |   | 6,491       |   |   | 6,418       |   |
| Engineering & Construction                                |   | 10,581     |   |   | 11,834      |   |   | 12,771      |   |
| Other        activities                                       |   | 105        |   |   | 85          |   |   | 119         |   |
| Corporate and financial companies                             |   | 1,386      |   |   | 1,365       |   |   | 1,369       |   |
| Impact of        unrealized intragroup profit elimination (2) |   | 100        |   |   | (54         | )      |   | (75         | )      |
| Consolidation adjustment (3)                                  |   | (22,189    | )      |   | (25,464     | )      |   | (28,119     | )      |
|                                                          |   |            |        |   |             |        |   |             |        |
| **NET        SALES FROM OPERATIONS**                          |   | **96,617** |   |   | **107,690** |   |   | **127,220** |   |
|                                                          |   |            |        |   |             |        |   |             |        |

----

| (1) |    | Following the        deconsolidation of Snam in 2012, the Gas & Power        segment only includes the results of the Marketing and        the International transport activities for all periods        presented.                                                                                                                                                                                                                                                                                                           |
|-----|--------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| (2) |    | This item        mainly concerned intra-group sales of goods, services and        capital assets recorded at period end in the assets of        the purchasing business segment.                                                                                                                                                                                                                                                                                                                                                  |
| (3) |    | Intragroup        sales are included in net sales from operations in order        to give a more meaningful indication as to the volume of        the activities to which sales from operations by segment        may be related. The most substantial intragroup sales are        recorded by the Exploration & Production segment. See        "Item 18 – note 35 of the Notes to the        Consolidated Financial Statements" for a breakdown        of intragroup sales by segment for the reported years. |

*2012 compared to 2011.*Eni’s net sales fromoperations (revenues) from continuing operations for 2012 (euro127,220 million) increased by euro 19,530 million from 2011 (orup 18.1%) primarily reflecting higher realizations on oil,products and natural gas in dollar terms and the positive impactof the appreciation of the U.S. dollar against the euro.

Revenues generated by the Exploration & Production segment(euro 35,881 million) increased by euro 6,760 million (or up23.2%) due to higher volumes of production sold following aproduction recovery in Libya, higher realizations in dollar terms(oil up 0.5%; natural gas up 9.9%) as well as currencytranslation effects.

Revenues generated by the Gas & Power segment (euro 36,200million) increased by euro 3,107 million (or up 9.4%) due totrends in energy parameters which are reflected in gas prices tothe retail segment mainly in Italy where retail prices are linkedto the price of oil and certain refined products with certaintime lags. Also a slight recovery in spot prices recorded atEuropean continental hubs benefited revenues in this segment.

Revenues generated by the Refining & Marketing segment(euro 62,656 million) increased by euro 11,437 million (or up22.3%) mainly reflecting higher average selling prices of refinedproducts and the positive impact of the appreciation of the U.S.dollar against the euro, as well as higher sales volumes (up 3.31mmtonnes, or 7.4%).

Revenues generated by the Chemical segment (euro 6,418million) decreased by euro 73 million (or down 1.1%) from 2011mainly due to a decline in volumes sold (down 2.1%) reflectingcontinuing weakness in commodity demand, which was partly offsetby slightly better average sale prices.

Revenues generated by the Engineering & Constructionsegment (euro 12,771 million) increased by euro 937 million, or7.9%, as a result of increased activities in the Engineering& Construction business, mainly in the Middle and Far East.

*2011 compared to 2010.* Eni’s net sales fromoperations (revenues) from continuing operations for 2011 (euro107,690 million) increased by euro 11,073 million from 2010 (orup 11.5%) primarily reflecting higher realizations on oil,products and natural gas in dollar terms.

Revenues generated by the Exploration & Production segment(euro 29,121 million) were down by euro 376 million (down by1.3%) due to a disruption in production flows from Eni’sactivities in Libya. This negative was partly offset by higherrealizations in dollar terms (oil up 40.3%; natural gas up 7.7%).The settlement of certain commodity derivatives relating to thesale of 9 mmBBL in 2011 lowered Eni’s average liquidrealizations by 1.50 $/BBL to 102.11 $/BBL.

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Revenues generated by the Gas & Power segment (euro 33,093million) increased by euro 5,287 million (or up 19%) mainly dueto higher spot and oil-linked gas prices which are reflected inEni’s revenues and increased volumes sold in Italy (up 0.39BCM, or 1.1%) and in key European markets (up 3.66 BCM, or 7.9%).

Revenues generated by the Refining & Marketing segment(euro 51,219 million) increased by euro 8,029 million (or up18.6%) mainly reflecting higher average selling prices of refinedproducts partly offset by lower sales volumes (down by 1.78mmtonnes, or 3.8%).

Revenues generated by the Chemical segment (euro 6,491million) increased by euro 350 million (up 5.7%) due to anaverage 20% increase in prices of petrochemical commodities whichwere partly offset by a decline in volumes sold (down 15%, inparticular polyethylene) due to weak demand.

Revenues generated by the Engineering & Constructionbusiness (euro 11,834 million) increased by euro 1,253 million,or 11.8%, from 2010, as a result of increased activities in theOnshore and Offshore Engineering & Constructionbusinesses.

 

> 
***b) Operating expenses***

The table below sets forth the components of Eni’soperating expenses for the periods indicated.

|   | **Year ended December 31,** |
|--------|-----------------------------|
|   |                             |

|   |   | **2010** |   | **2011** |   | **2012** |
|--------|--------|----------|--------|----------|--------|----------|
|   |   |          |   |          |   |          |

|   |   | **(euro million)** |
|--------|--------|--------------------|

| Purchases, services and other    |   | 68,774     |   | 78,795     |   | 95,363      |
|----------------------------------|--------|------------|--------|------------|--------|-------------|
| Payroll        and related costs |   | 4,428      |   | 4,404      |   | 4,658       |
|                             |   |            |   |            |   |             |
| **Operating expenses**           |   | **73,202** |   | **83,199** |   | **100,021** |
|                             |   |            |   |            |   |             |

*2012 compared to 2011.* Operating expenses fromcontinuing operations for the year (euro 100,021 million)increased by euro 16,822 million from 2011, up 20.2%, primarilyreflecting higher supply costs of purchased gas, and refinery andpetrochemical feedstock reflecting trends in the oil environmentand the appreciation of the dollar against the euro.

Purchases, services and other costs included risk provisionsamounting to euro 945 million incurred in connection with pricerevisions at long-term gas purchase contracts relating to gasvolumes purchased in previous reporting periods, including theprovision relating to the settlement of an arbitration proceedingwith GasTerra (for detailed information see "Item 4 –Gas & Power"), as well as environmental and other riskprovisions. The unfavorable ruling in the arbitration proceedingwith GasTerra also impacted the cost of gas volumes purchased inthe year, as well as the cost that the Company expects to incurin future reporting periods unless Eni is successful inrenegotiating pricing terms.

Payroll and related costs (euro 4,658 million) increased byeuro 254 million, or 5.8%, from 2011 due to a higher averagenumber of employees outside Italy (following higher activitylevels in the Engineering & Construction and Exploration& Production segments) and higher unit labor cost outsideItaly and the appreciation of the dollar against the euro. Theseincreases were partly offset by a reduction in the average numberof employees in Italy and a lower provision for redundancyincentives.

*2011 compared to 2010.* Operating expenses fromcontinuing operations for the year (euro 83,199 million)increased by euro 9,997 million from 2010, up 13.7%, reflectingprimarily higher supply costs of purchased gas, and refinery andpetrochemical feedstock reflecting trends in the oil environment.

Purchases, services and other costs included environmental andother risk provisions amounting to euro 344 million.Particularly, the Group took a provision of euro 69 millionrelating to an antitrust proceeding in the area of elastomersbased on an adverse ruling of the European Court of Justice whichis disclosed in more detail in "Item 18 – note 34 -Guarantees, commitments and risks - Legal Proceedings – ofthe Notes to the Consolidated Financial Statements".

Payroll and related costs (euro 4,404 million) weresubstantially in line with the previous year (down by 0.5%).Higher per-employee labor costs in Italy and outside Italy(mitigated by the positive impact of exchange rates), and anincreased average number of employees outside Italy (followinghigher activity levels in the Engineering 

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& Construction segment), were partly offset by areduction in the average number of employees in Italy and a lowerprovision for redundancy incentives.

 

> 
***c) Depreciation, depletion, amortization and    impairments***

The table below sets forth a breakdown of depreciation,amortization and impairments by business segment for the periodsindicated.

|   | **Year ended December 31,** |
|--------|-----------------------------|
|   |                             |

|   |   | **2010** |   | **2011** |   | **2012** |
|--------|--------|----------|--------|----------|--------|----------|
|   |   |          |   |          |   |          |

|   |   | **(euro million)** |
|--------|--------|--------------------|

| Exploration & Production (1)                              |   | 6,928     |   |   | 6,251     |   |   | 7,988      |   |
|---------------------------------------------------------------|--------|-----------|--------|--------|-----------|--------|--------|------------|--------|
| Gas &        Power (2)                                    |   | 425       |   |   | 413       |   |   | 405        |   |
| Refining & Marketing                                      |   | 333       |   |   | 351       |   |   | 331        |   |
| Chemicals                                                     |   | 83        |   |   | 90        |   |   | 90         |   |
| Engineering & Construction                                |   | 513       |   |   | 596       |   |   | 683        |   |
| Other        activities                                       |   | 2         |   |   | 2         |   |   | 1          |   |
| Corporate and financial companies                             |   | 79        |   |   | 75        |   |   | 65         |   |
| Impact of        unrealized intragroup profit elimination (3) |   | (20       | )      |   | (23       | )      |   | (25        | )      |
|                                                          |   |           |        |   |           |        |   |            |        |
| **Total depreciation, depletion and        amortization**     |   | **8,343** |   |   | **7,755** |   |   | **9,538**  |   |
| Impairments                                                   |   | 688       |   |   | 1,030     |   |   | 4,023      |   |
|                                                          |   |           |        |   |           |        |   |            |        |
|                                                          |   | **9,031** |   |   | **8,785** |   |   | **13,561** |   |
|                                                          |   |           |        |   |           |        |   |            |        |

|    |    |                                                                                                                                                                                                               |
|--------------|--------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| (1)          |    | Exploration        expenditures of euro 1,835 million, euro 1,165 million        and euro 1,199 million are included in these amounts        relating to the years 2012, 2011 and 2010, respectively.                   |
| (2)          |    | Following the        deconsolidation of Snam in 2012, the Gas & Power        segment only includes the results of the Marketing and        the International transport activities for all periods        presented. |
| (3)          |    | This item        concerned mainly intragroup sales of capital goods which        were recorded at period end in the assets of the        purchasing business segment.                                                   |

*2012 compared to 2011.* In 2012, depreciation, depletionand amortization charges (euro 9,538 million) increased by euro1,783 million from 2011, or 23%, mainly in the Exploration &Production segment (up euro 1,737 million) reflecting higheroutput levels in Libya, following an ongoing recovery inactivities, rising capitalized expenses incurred in connectionwith ongoing exploration activities, the start-up of new fieldsand the appreciation of the U.S. dollar against the euro (up7.7%). The increase recorded in the Engineering &Construction business (up euro 87 million, or 14.6%) was due tonew vessels and rigs which were brought into operations.

In 2012, impairments charges of euro 4,023 million mainlyrelated to goodwill and other intangible assets in the gasMarketing activity (euro 2,494 million) and impairment losses ofrefining plants (euro 843 million). In performing the impairmentreview, management assumed a reduced profitability outlook inthose businesses driven by a deteriorating European macroeconomicenvironment, volatility in commodity prices and margins, andrising competitive pressures. Other impairment losses wereincurred at a number of proved and unproved properties in theExploration & Production segment (euro 547 million)reflecting downward reserves revisions, price changes and revisedprofitability outlook mainly at certain oil and gas assets in theUnited States, a gas asset in India and an oil asset inTurkmenistan as well as marginal lines of business in theChemical segment (euro 112 million) due to lack of profitabilityprospects.

*2011 compared to 2010.* In 2011, depreciation, depletionand amortization charges (euro 7,755 million) decreased by euro588 million from 2010, or 7%, mainly in the Exploration &Production segment (down euro 677 million) reflecting a loweredoutput in Libya and negative currency translation differences dueto the appreciation of the euro over the dollar (up 4.9%). TheEngineering & Construction business recorded higher charges(up euro 83 million) as new vessels and rigs were brought intooperations.

In 2011, impairments charges of euro 1,030 million mainlyregarded impairment losses of refining plants (euro 488 million)based on management’s medium term forecast that points tocontinuing weak fundamentals and unprofitable margins resultingin the projection of lower future cash flows of those assets.Impairment charges of oil and gas properties in the Exploration& Production segment (euro 189 million) were triggered by achanged pricing environment and downward reserve revisions. Animpairment charge amounting to euro 149 million was recognized onthe goodwill allocated to the European Market cash generatingunit in the Gas & Power Marketing business segment. Inperforming the impairment review of the business, managementrevised downwardly the profitability expectations 

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driven by continuing margin pressure and declining salesopportunities against the backdrop of weak fundamentals. Minorimpairment losses related to marginal lines of business in theChemical segment.

 

> 
***d) Operating profit by segment***

The table below sets forth Eni’s operating profit fromcontinuing operations by business segment for the periodsindicated.

|   | **Year ended December 31,** |
|--------|-----------------------------|
|   |                             |

|   |   | **2010** |   | **2011** |   | **2012** |
|--------|--------|----------|--------|----------|--------|----------|
|   |   |          |   |          |   |          |

|   |   | **(euro million)** |
|--------|--------|--------------------|

| Exploration & Production                              |   | 13,866     |   |   | 15,887     |   |   | 18,451     |   |
|-----------------------------------------------------------|--------|------------|--------|--------|------------|--------|--------|------------|--------|
| Gas &        Power (1)                                |   | 896        |   |   | (326       | )      |   | (3,221     | )      |
| Refining & Marketing                                  |   | 149        |   |   | (273       | )      |   | (1,303     | )      |
| Chemicals                                                 |   | (86        | )      |   | (424       | )      |   | (683       | )      |
| Engineering & Construction                            |   | 1,302      |   |   | 1,422      |   |   | 1,433      |   |
| Other        activities                                   |   | (1,384     | )      |   | (427       | )      |   | (302       | )      |
| Corporate and financial companies                         |   | (361       | )      |   | (319       | )      |   | (345       | )      |
| Impact of        unrealized intragroup profit elimination |   | 1,100      |   |   | 1,263      |   |   | 996        |   |
|                                                      |   |            |        |   |            |        |   |            |        |
| **Operating profit**                                      |   | **15,482** |   |   | **16,803** |   |   | **15,026** |   |
|                                                      |   |            |        |   |            |        |   |            |        |

----

| (1) |    | Following the        deconsolidation of Snam in 2012, the Gas & Power        segment only include the results of the Marketing and the        International transport activities for all periods        presented. |
|-----|--------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

The table below sets forth operating profit from continuingoperations for each of Eni’s business segments as apercentage of each segment’s net sales from operations fromcontinuing operations (including intragroup sales) for theperiods presented.

|   | **Year ended December 31,** |
|--------|-----------------------------|
|   |                             |

|   |   | **2010** |   | **2011** |   | **2012** |
|--------|--------|----------|--------|----------|--------|----------|
|   |   |          |   |          |   |          |

|   |   | **(%)** |
|--------|--------|---------|

| Exploration & Production      |   | 47.0     |   |   | 54.6     |   |   | 51.4     |   |
|-----------------------------------|--------|----------|--------|--------|----------|--------|--------|----------|--------|
| Gas &        Power            |   | 3.2      |   |   | (1.0     | )      |   | (8.9     | )      |
| Refining & Marketing          |   | 0.3      |   |   | (0.5     | )      |   | (2.1     | )      |
| Chemicals                         |   | (1.4     | )      |   | (6.5     | )      |   | (10.6    | )      |
| Engineering & Construction    |   | 12.3     |   |   | 12.0     |   |   | 11.2     |   |
| Other        activities           |   |     |   |   |     |   |   |     |   |
| Corporate and financial companies |   | (26.0    | )      |   | (23.4    | )      |   | (25.2    | )      |
|                              |   |          |        |   |          |        |   |          |        |
| **Group**                         |   | **16.0** |   |   | **15.6** |   |   | **11.8** |   |
|                              |   |          |        |   |          |        |   |          |        |

*Exploration & Production.* Operating profit in 2012amounted to euro 18,451 million, up euro 2,564 million from 2011,or 16.1%, due to an ongoing recovery in Libyan activities whichcame almost to a halt in 2011. In fact the 2011 productionperformance was negatively impacted by disruptions in theCompany’s output from Libya fields due to the internalconflict that occurred in 2011 and the consequent declaration offorce majeure on the execution of the petroleum contracts inCountry throughout the duration of the internal crisis.

The 2012 result of the Exploration & Production segmentalso benefited from the appreciation of the dollar over the eurofor an estimated amount of approximately euro 1,100 million.These positives were partly offset by higher exploration costsincurred due to increased activities as well as higher operatingcosts and depreciation charges in connection with new fieldstart-ups/ramp-ups.

In 2012, the Company’s liquids and gas realizationsincreased on average by 1.6% in dollar terms, driven by oilprices for market benchmarks (Brent crude price increased by0.3%). Eni’s average oil realizations increased on averageby 0.5%. Eni’s average gas realizations increased by 9.9%,due to time lags in oil-linked pricing formulas which wererecorded in certain geographic areas, whereas gas spot pricesdeclined in other areas, mainly in the U.S. market.

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Operating profit in 2011 amounted to euro 15,887 million, upeuro 2,021 million from 2010, or 14.6%. The increase in operatingprofit was driven by higher liquids and gas realizations indollar terms (up by 40.3% and 7.7%, respectively). The negativedrivers were: (i) a disruption in the Company’s output fromLibya due to the conflict that occurred in that Country in 2011(an estimated loss of production of 200 kBOE/d); and (ii) theappreciation of the euro against the U.S. dollar for an estimatedamount of euro 490 million. The impact on operating profit ofhigher oil and gas dollar realizations outweighed the negativedrivers; however revenues for the year were mainly impacted bythose negative factors and the Company reported a declinecompared to the prior year (down by 1.3%).

In 2011, the Company’s liquids and gas realizationsincreased on average by 30% in dollar terms, driven by higher oilprices for market benchmarks (Brent crude price increased by40%). Eni’s average oil realizations increased on average by40.3%. Eni’s average liquids realizations were reduced onaverage by 1.50 $/BBL due to the settlement of certain commodityderivatives relating to the sale of 9 mmBBL in the year atcontractually fixed prices. This was the last portion of amulti-year derivative transaction the Company entered into inorder to hedge exposure to the variability in cash flows on thesale of a portion of the Company’s proved reserves for anoriginal amount of approximately 125.7 mmBBL in the 2008-2011period.

The operating profit of Exploration & Production segmentincluded the following gains and charges:

| **Exploration        & Production** | **Year ended December 31,** |
|-----------------------------------------|-----------------------------|
|                                    |                             |

|   |   | **2010** |   | **2011** |   | **2012** |
|--------|--------|----------|--------|----------|--------|----------|
|   |   |          |   |          |   |          |

|   |   | **(euro million)** |
|--------|--------|--------------------|

| Environmental provisions                                |   | (30     | )      |   |     |   |   |    |   |
|---------------------------------------------------------|--------|---------|--------|--------|----------|--------|--------|---------|--------|
| Impairment        losses                                |   | (127    | )      |   | (190     | )      |   | (550    | )      |
| Risk provisions                                         |   |    |   |   |     |   |   | (7      | )      |
| Net gains        on disposal of assets                  |   | 241     |   |   | 63       |   |   | 542     |   |
| Provision for redundancy incentives                     |   | (97     | )      |   | (44      | )      |   | (6      | )      |
| Fair value        gains/losses on commodity derivatives |   |    |   |   | (1       | )      |   | (1      | )      |
| Other                                                   |   | (5      | )      |   | (18      | )      |   | (54     | )      |
|                                                    |   |         |        |   |          |        |   |         |        |
|                                                    |   | **(18** | **)**  |   | **(190** | **)**  |   | **(76** | **)**  |
|                                                    |   |         |        |   |          |        |   |         |        |

In reviewing the performance of the Company’s businesssegments, management generally excludes the gains and losseslisted above in order to assess the underlying industrial trendsand obtain a better comparison of base business performanceacross reporting periods.

*Gas & Power.*Following the divestment anddeconsolidation of Snam, from 2012 the Gas & Power segmentincludes results of operations of the gas marketing business andthe international transport business. Prior year results havebeen presented on a comparable basis, i.e. excluding theperformance of the regulated gas business in Italy managed bySnam and its subsidiaries.

In 2012, the Gas & Power segment reported an operatingloss of euro 3,221 million, materially down from 2011 when thissegment reported an operating loss of euro 326 million. Thosesharply higher losses were mainly incurred by the Marketingbusiness, while the International Transport business remainedprofitable albeit reporting a lower profits compared to 2011 dueto the divestment of Eni’s interests in the entities engagedin the transport of gas from Northern Europe and Russia which wascompleted in 2011.

The negative performance in the Marketing business was drivenby a demand downturn and escalating competitive pressures fuelledby oversupplies in the marketplace which impacted our operationsboth in Italy and outside Italy. The reduced profitabilityoutlook in this business due to changed underlying fundamentalsalso resulted in the write down of goodwill and other intangibleswhich were recognized as part of certain business combinations,among which Distrigas in 2008 and other minor European gasmarketing companies in later years (Altergaz in France).Operating profit was also impacted by the negative effects ofprice revisions at certain long-term gas suppliers and customers;this was also due to the settlement of a number of arbitrationproceedings, including settlement of an arbitration proceedingwith GasTerra.

However, excluding impairment losses and the risk provisionsaccrued in connection with the above mentioned arbitrationproceedings involving price revisions for gas volumes purchasedin previous reporting periods, the Gas Marketing businessunderlying results improved compared to 2011. Those trendsbenefited from the renegotiation of better economic terms forcertain supply contracts, including the recognition of bettersupply costs retroactive to the beginning of 2011, and an ongoingrecovery in Libyan supplies which improved the average costs ofgas supplies to the Company compared to the 2011 performance.

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In 2011, the Gas & Power segment reported an operatingloss of euro 326 million, materially lower than 2010 when thissegment reported an operating profit of euro 896 million, due to anoperating loss of euro 710 million incurred by the Marketingbusiness compared to the prior-year profit of euro 555 million(down by euro 1,265 million). This negative was partly offset bya better performance achieved by the International Transportbusiness (up by 12.6%).

The negative performance in the Marketing business was drivenby a demand downturn and escalating competitive pressures fueledby oversupplies in the marketplace which impacted our operationsboth in Italy and outside Italy. Those trends contributed to thevery strong contraction reported in selling margins due to risingcosts of gas supplies indexed to the price of oil and certainrefined products, which increases were only in part absorbed byselling prices at continental spot markets capped by competition.Another important factor which influenced the loss was thedisruption in the supplies of Libyan gas, which negativelyimpacted both the supply mix and sales to shippers. Finally,there were negative trends in the energy parameters and exchangerates to which gas purchase costs and selling prices are indexedconsidering the time lags of contractual formulas and unusualwinter weather conditions impacting seasonal sales, as well as atariff freeze to residential customers in certain Europeancountries. The results of the Marketing business did not fullybenefit from the ongoing renegotiation of gas supply contracts ascertain renegotiations were rescheduled, thus postponing therecognition of the economic effect. An agreement on suchrenegotiations was reached early in 2012 leading to recognitionof the benefit retroactive by from the beginning of 2011, in 2012profit.

The table below sets forth the break-down of operating profit(loss) by businesses in the Gas & Power segment:

|   | **Year ended December 31,** |
|--------|-----------------------------|
|   |                             |

|   |   | **2010** |   | **2011** |   | **2012** |
|--------|--------|----------|--------|----------|--------|----------|
|   |   |          |   |          |   |          |

|   |   | **(euro million)** |
|--------|--------|--------------------|

| Marketing                                                  |   | 555     |   |   | (710     | )      |   | (3,531     | )      |
|------------------------------------------------------------|--------|---------|--------|--------|----------|--------|--------|------------|--------|
| International        transport                             |   | 341     |   |   | 384      |   |   | 310        |   |
|                                                       |   |         |        |   |          |        |   |            |        |
| **Operating profit of the Gas & Power        segment** |   | **896** |   |   | **(326** | **)**  |   | **(3,221** | **)**  |
|                                                       |   |         |        |   |          |        |   |            |        |

The operating profit of the Gas & Power segment includedthe following gains and charges: 

| **Gas        & Power** | **Year ended December 31,** |
|----------------------------|-----------------------------|
|                       |                             |

|   |   | **2010** |   | **2011** |   | **2012** |
|--------|--------|----------|--------|----------|--------|----------|
|   |   |          |   |          |   |          |

|   |   | **(euro million)** |
|--------|--------|--------------------|

| Profit (loss) on stock                                                    |   | 117      |   |   | 166      |   |   | (163       | )      |
|---------------------------------------------------------------------------|--------|----------|--------|--------|----------|--------|--------|------------|--------|
| Settlement/payments        on Antitrust and other Authorities proceedings |   | 270      |   |   |     |   |   |       |   |
| Environmental provisions                                                  |   | (16      | )      |   |     |   |   | 2          |   |
| Impairment        losses                                                  |   | (426     | )      |   | (154     | )      |   | (2,494     | )      |
| Net gains on disposal of assets                                           |   |     |   |   |     |   |   | 3          |   |
| Risk        provisions                                                    |   | (78      | )      |   | (77      | )      |   | (831       | )      |
| Provision for redundancy incentives                                       |   | (52      | )      |   | (34      | )      |   | (5         | )      |
| Fair value        gains/losses on commodity derivatives                   |   | (30      | )      |   | (45      | )      |   |       |   |
| Other                                                                     |   | 38       |   |   | (17      | )      |   | (138       | )      |
|                                                                      |   |          |        |   |          |        |   |            |        |
|                                                                      |   | **(177** | **)**  |   | **(161** | **)**  |   | **(3,626** | **)**  |
|                                                                      |   |          |        |   |          |        |   |            |        |

In reviewing the performance of the Company’s businesssegments, management generally excludes the gains and losseslisted above in order to assess the underlying industrial trendsand obtain a better comparison of base business performanceacross reporting periods. We note the unprecedented amount ofimpairment losses of euro 2,494 million which were recorded atthe Company’s cash generating unit European market impactinggoodwill and other intangibles which were recognized upon prioryears’ business combinations. The driver of those losseswere a reduced profitability outlook in the business due tocontinuing demand weakness, strong competitive pressures andongoing oversupplies which are expected to hurt theCompany’s prices and selling margins for the foreseeablefuture. Also, in evaluating the terminal value of the cashgenerating unit management adopted a cyclical view of thebusiness leading to a reduction in the commercial margins of theperpetual cash flow. For further information see "Item 18– note 16 – Intangible assets – of the Notes tothe Consolidated Financial Statements". Risk provisionspresented in the table above mainly related to price revisions onthe renegotiation of certain long-term supply contracts whichcontractual time span for price revisions expired in previousperiods and within limits of volumes purchased in prior reportingperiods, also due to the settlement of arbitration proceedings.

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*Refining & Marketing.* In 2012, the Refining &Marketing segment reported an operating loss of euro 1,303million, down by euro 1,030 million, compared to a loss of euro273 million in 2011. The loss was driven by unprofitable refiningmargins due to an ongoing demand downturn for refined products,particularly in Italy, and excess capacity which preventedproduct prices from fully absorbing high supply costs ofoil-based feedstock and oil-linked plant utilities. The 2012operating loss in the Refining & Marketing segment was alsoaffected by material impairment losses (down by euro 846 million)which were recorded at refining plants due to management’sbusiness outlook that points to continuing weak fundamentals andunprofitable margins resulting in the projection of lower futurecash flows. Furthermore, the segment reported a much lowerinventory holding gain (stock profit) from 2011, down to euro 29million from euro 907 million. However, excluding assetimpairments and a negative change in the inventory holding gain,the segment underlying results of operations improved compared to2011. That trend reflected a slightly more favorable refiningscenario as the benchmark margin on 2012 Brent crude rose by 2.77$/BBL from 2011 and as management continued to focus on achievingefficiency gains, optimization measures and reduced refinerydowntime. The Marketing activity reported lower results, due tolower retail and wholesale demand for gasoline and gasoil, andother products impacted by the economic downturn and highcompetitive pressure. Results were also affected by increasedexpenses associated with certain marketing initiatives includinga special discount on prices at the pump during the summerweek-ends in Italy.

Inventory holding gains or losses represent the differencebetween the cost of sales of the volumes sold during the periodcalculated using the cost of supplies incurred during the sameperiod and the cost of sales calculated using the weightedaverage cost method. Under the weighted average cost method,which we use for IFRS reporting, the cost of inventory charged tothe income statement is based on its historic cost of purchase,or manufacture, rather than its replacement cost. In volatileenergy markets, this can have a significant distorting effect onreported income. The amounts disclosed represent the differencebetween the charge (to the income statement) for inventory on aweighted average cost method basis (after adjusting for anyrelated movements in net realizable value provisions) and thecharge that would have arisen if an average cost of supplies wasused for the period. For this purpose, the average cost ofsupplies during the period is principally calculated on aquarterly or monthly basis by dividing the total cost ofinventory acquired in the period by the number of barrelsacquired. The amounts disclosed are not separately reflected inthe financial statements as a gain or loss. No adjustment is madein respect of the cost of inventories held as part of a tradingposition and certain other temporary inventory positions.

In 2011, the Refining & Marketing segment reported anoperating loss of euro 273 million, reversing a prior-year profitof euro 149 million. The segment suffered from unprofitablerefining margins due to rising costs of oil-based feedstock andenergy utilities that could not be transferred to final pricespressured by weak demand and excess capacity in the MediterraneanBasin. In addition, Eni’s complex refineries were hit byshrinking price differentials between light and heavy crudeswhich reduced the conversion premium. These negatives were offsetin part by efficiency enhancement measures, the optimization ofsupply activities and lower throughputs at the weakestrefineries. The Marketing results albeit positive, declined dueto lower retail and wholesale demand for gasoline and gasoil, andother products destined to industries affected by the economicdownturn, and competitive pressures. The operating profit of theRefining & Marketing segment included the following gains andcharges:

| **Refining        & Marketing** | **Year ended December 31,** |
|-------------------------------------|-----------------------------|
|                                |                             |

|   |   | **2010** |   | **2011** |   | **2012** |
|--------|--------|----------|--------|----------|--------|----------|
|   |   |          |   |          |   |          |

|   |   | **(euro million)** |
|--------|--------|--------------------|

| Profit (loss) on stock                           |   | 659     |   |   | 907     |   |   | 29       |   |
|--------------------------------------------------|--------|---------|--------|--------|---------|--------|--------|----------|--------|
| Environmental        provisions                  |   | (169    | )      |   | (34     | )      |   | (40      | )      |
| Impairment losses                                |   | (76     | )      |   | (488    | )      |   | (846     | )      |
| Net gains        on disposal of assets           |   | 16      |   |   | (10     | )      |   | (5       | )      |
| Risk provisions                                  |   | (2      | )      |   | (8      | )      |   | (49      | )      |
| Provision        for redundancy incentives       |   | (113    | )      |   | (81     | )      |   | (19      | )      |
| Fair value gains/losses on commodity derivatives |   | 10      |   |   | 3       |   |   |     |   |
| Other                                            |   | (5      | )      |   | (27     | )      |   | (53      | )      |
|                                             |   |         |        |   |         |        |   |          |        |
|                                             |   | **320** |   |   | **262** |   |   | **(983** | **)**  |
|                                             |   |         |        |   |         |        |   |          |        |

In reviewing the performance of the Company’s businesssegments, management generally excludes the gains and losseslisted above in order to assess the underlying industrial trendsand obtain a better comparison of base business performanceacross reporting periods. We note that losses listed aboveinclude material impairment losses of refining plants due to themanagement’s business outlook that points to continuing weakfundamentals and unprofitable margins resulting in the projectionof lower future cash flows. Furthermore, we regard the inventoryholding gain as lacking correlation to the underlying businessperformance which we track by matching revenues with currentcosts of supplies.

*Chemicals.* In 2012, the Chemical segment incurred alarger operating loss, down by euro 259 million, or 61.1%,compared to 2011 (from a loss of euro 424 million in 2011 to aloss of euro 683 million in 2012). This negative 

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performance was driven by falling commodity demand due to theeconomic downturn and unprofitable product margins of oil-basedcommodities which were squeezed by high crude oil costs, assignaled by a negative benchmark margin of cracking. Salesvolumes decreased by 2.1%.

In 2011, the Chemical segment incurred a deeper operatingloss, down by euro 338 million from a year-earlier (from a lossof euro 86 million in 2010 to a loss of euro 424 million in2011). This trend was negatively impacted by falling productmargins, with the cracker margin severely hit by higher supplycosts of oil-based feedstock which were not recovered in salesprices on end markets pressured by weak demand for commoditiesparticularly in the final quarter of the year as the economicactivity registered a sharp contraction. Also sale volumes werelower (down 14.6% compared to 2010). 

| **Chemicals** | **Year ended December 31,** |
|---------------|-----------------------------|
|          |                             |

|   |   | **2010** |   | **2011** |   | **2012** |
|--------|--------|----------|--------|----------|--------|----------|
|   |   |          |   |          |   |          |

|   |   | **(euro million)** |
|--------|--------|--------------------|

| Profit (loss) on stock                                                    |   | 105    |   |   | 40       |   |   | (63      | )      |
|---------------------------------------------------------------------------|--------|--------|--------|--------|----------|--------|--------|----------|--------|
| Settlement/payments        on Antitrust and other Authorities proceedings |   |   |   |   | (10      | )      |   |     |   |
| Environmental provisions                                                  |   |   |   |   | (1       | )      |   |     |   |
| Impairment        losses                                                  |   | (52    | )      |   | (160     | )      |   | (112     | )      |
| Risk provisions                                                           |   |   |   |   |     |   |   | (18      | )      |
| Net gains        on disposal of assets                                    |   |   |   |   |     |   |   | (1       | )      |
| Provision for redundancy incentives                                       |   | (26    | )      |   | (17      | )      |   | (14      | )      |
| Fair value        gains/losses on commodity derivatives                   |   |   |   |   |     |   |   | (1       | )      |
| Other                                                                     |   |   |   |   | (3       | )      |   |     |   |
|                                                                      |   |        |        |   |          |        |   |          |        |
|                                                                      |   | **27** |   |   | **(151** | **)**  |   | **(209** | **)**  |
|                                                                      |   |        |        |   |          |        |   |          |        |

In reviewing the performance of the Company’s businesssegments, management generally excludes the gains and losseslisted above in order to assess the underlying industrial trendsand obtain a better comparison of base business performanceacross reporting periods.

*Engineering & Construction.*Operating profit in2012 amounted to euro 1,433 million, substantially in line withthe previous year result (up euro 11 million, or 0.8% compared to2011). This result reflected higher revenues and better marginson the works executed, mainly in the third quarter of 2012, inthe Engineering & Construction business unit, in the Middleand Far East, as well as in Offshore Drilling, where the Scarabeo8 and Scarabeo 9 activity compensated the negative impact of theupgrade shutdown of the semi-submersible platforms Scarabeo 3 andScarabeo 6. However, from the second half of 2012, businesstrends commenced to reverse due to reduced activity and aslowdown in new orders acquisitions mainly in the onshore andoffshore construction businesses, leading the Company tonegatively revise the profitability outlook for 2013.

Operating profit in 2011 amounted to euro 1,422 million, anincrease of euro 120 million, or 9.2% compared to 2010. Thisimprovement was driven by revenue growth and a higherprofitability of acquired orders, primarily in the Onshore andOffshore Engineering & Construction businesses, reflectinghigher level of activities in Middle East, Canada and Australia,and in the Offshore Drilling business due to the full operationof the drillships Saipem 10000 and 12000 and of the Perro Negro8, which partly offset the negative impact of the Scarabeo 5planned maintenance.

The operating profit of Engineering & Construction segmentincluded the following gains and charges:

| **Engineering        & Construction** | **Year ended December 31,** |
|-------------------------------------------|-----------------------------|
|                                      |                             |

|   |   | **2010** |   | **2011** |   | **2012** |
|--------|--------|----------|--------|----------|--------|----------|
|   |   |          |   |          |   |          |

|   |   | **(euro million)** |
|--------|--------|--------------------|

| Loss provisions on Antitrust and other        Authorities proceedings |   | (24     | )      |   |    |   |   |    |   |
|-----------------------------------------------------------------------|--------|---------|--------|--------|---------|--------|--------|---------|--------|
| Impairment        losses                                              |   | (3      | )      |   | (35     | )      |   | (25     | )      |
| Net gains on disposal of assets                                       |   | (5      | )      |   | (4      | )      |   | (3      | )      |
| Provision        for redundancy incentives                            |   | (14     | )      |   | (10     | )      |   | (7      | )      |
| Fair value gains/losses on commodity derivatives                      |   | 22      |   |   | 28      |   |   | 3       |   |
|                                                                  |   |         |        |   |         |        |   |         |        |
|                                                                  |   | **(24** | **)**  |   | **(21** | **)**  |   | **(32** | **)**  |
|                                                                  |   |         |        |   |         |        |   |         |        |

*Other activities.* This reporting segment includes theresults of operations of Eni’s subsidiary Syndial which runsminor petrochemical activities and reclamation anddecommissioning activities pertaining to certain businesses whichEni exited, divested or liquidated in past years.

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This subsidiary reported operating losses of euro 302 millionfor 2012, euro 427 million for 2011 and euro 1,384 million for2010. The magnitude of losses was mainly influenced by therecognition of risk provisions mainly related to environmentalissues and litigation whose break-down is provided below. See"Item 4 – Environmental regulation" for furtherdetails.

| **Other        activities** | **Year ended December 31,** |
|-----------------------------|-----------------------------|
|                        |                             |

|   |   | **2010** |   | **2011** |   | **2012** |
|--------|--------|----------|--------|----------|--------|----------|
|   |   |          |   |          |   |          |

|   |   | **(euro million)** |
|--------|--------|--------------------|

| Loss provisions on Antitrust and other        Authorities proceedings |   |       |   |   | (59      | )      |   |    |   |
|-----------------------------------------------------------------------|--------|------------|--------|--------|----------|--------|--------|---------|--------|
| Environmental        provisions                                       |   | (1,145     | )      |   | (141     | )      |   | (25     | )      |
| Impairment losses                                                     |   | (8         | )      |   | (4       | )      |   | (2      | )      |
| Net gains on        disposal of assets                                |   |       |   |   | 7        |   |   | 12      |   |
| Risk provisions                                                       |   | (7         | )      |   | (9       | )      |   | (35     | )      |
| Provision for        redundancy incentives                            |   | (10        | )      |   | (8       | )      |   | (2      | )      |
| Other                                                                 |   | (9         | )      |   | 13       |   |   | (26     | )      |
|                                                                  |   |            |        |   |          |        |   |         |        |
|                                                                  |   | **(1,179** | **)**  |   | **(201** | **)**  |   | **(78** | **)**  |
|                                                                  |   |            |        |   |          |        |   |         |        |

In addition to the above listed charges, losses for thereporting periods presented derived from a marginal line ofbusiness that the Company is planning to shut down.

*Corporate and financial companies.*These activities aremainly cost centers which comprise corporate activities andcentral treasury departments and financial and other subsidiariesthat provide a range of financial and business support servicesto Group companies, including financing of Eni’s projectsaround the world, information technology, employee selection,training and retention, real estate and other general purposeservices.

The aggregate Corporate and financial companies reported anoperating loss of euro 345 million for 2012, representing anincrease of euro 26 million, compared to the loss recorded in2011 (euro 319 million), mainly reflecting the recognition ofother risk provisions which were partly offset by theimplementation of cost efficiency measures.

The aggregate Corporate and financial companies reported anoperating loss of euro 319 million for 2011, representing areduction of euro 42 million, compared to the loss recorded in2010 (euro 361 million), mainly reflecting the implementation ofcost efficiency measures.

 

> 
***e) Net finance expense***

The table below sets forth a breakdown of Eni’s netfinancial expense for the periods indicated:

|   | **Year ended December 31,** |
|--------|-----------------------------|
|   |                             |

|   |   | **2010** |   | **2011** |   | **2012** |
|--------|--------|----------|--------|----------|--------|----------|
|   |   |          |   |          |   |          |

|   |   | **(euro million)** |
|--------|--------|--------------------|

| Gains (losses) on derivative financial        instruments |   | (131     | )      |   | (112       | )      |   | (251       | )      |
|-----------------------------------------------------------|--------|----------|--------|--------|------------|--------|--------|------------|--------|
| Exchange        differences, net                          |   | 92       |   |   | (111       | )      |   | 131        |   |
| Interest income                                           |   | 17       |   |   | 22         |   |   | 27         |   |
| Finance        expense on short and long-term debt        |   | (765     | )      |   | (922       | )      |   | (980       | )      |
| Finance expense due to the passage of time                |   | (236     | )      |   | (235       | )      |   | (308       | )      |
| Other        finance income and expense, net              |   | 124      |   |   | 100        |   |   | (76        | )      |
|                                                      |   | **(899** | **)**  |   | **(1,258** | **)**  |   | **(1,457** | **)**  |
| Finance        expense capitalized                        |   | 150      |   |   | 112        |   |   | 150        |   |
|                                                      |   |          |        |   |            |        |   |            |        |
|                                                      |   | **(749** | **)**  |   | **(1,146** | **)**  |   | **(1,307** | **)**  |
|                                                      |   |          |        |   |            |        |   |            |        |

*2012 compared to 2011.* In 2012, net finance expense waseuro 1,307 million, up by euro 161 million compared to 2011 dueto negative estimate revisions of certain discounted provisionsdue to a changed interest rate environment recorded in the lineitem "Finance expense due to the passage of time" (downby euro 73 million), higher finance charges (down by euro 58million) and other finance expense (down by euro 176 million)reflecting finance charges accrued on amounts due to certain gassuppliers following the definition of contractual pricerevisions. The higher balance of gains and losses due to exchangedifferences (up by euro 242 million) was partly offset by losseson exchange rate derivatives (down euro 166 million, from a gainof euro 29 million to a loss of euro 137 million) 

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recognized through profit as lacking the formal criteria forhedge accounting. Finally, a loss of euro 26 million wasrecognized on the fair value evaluation of a call option embeddedin a convertible bond whose underlying shares were represented bya stake in Galp equaling to 8% of the share capital of theinvestee. This loss was matched by a market fair value gainthrough profit which was recorded on the Galp shares underlyingthe convertible bond and reported in the line item "Incomeon investments". More information on this transaction isreported in "Item 4 – Significant business andportfolio developments".

*2011 compared to 2010.* In 2011, net finance expense waseuro 1,146 million, up by euro 397 million compared to 2010.Higher finance charges (up by euro 157 million) were recorded,driven by the increased level of average net borrowings andhigher borrowing costs driven by movements in both key marketbenchmarks and spreads applicable to the Company, particularly oneuro-denominated loans (the Euribor rate was up by 0.6 percentagepoints). Higher losses were recognized in connection with thefair value valuation through profit and loss of certainderivative instruments on interest rates (down by euro 102million) which did not meet all formal criteria to be designatedas hedges under IFRS. Lower negative exchange differences net(down by euro 203 million) were partly offset by gains onexchange rate derivatives (from a loss of euro 111 million to again of euro 29 million) recognized through profit and loss aslacking the formal criteria for hedge accounting.

 

> 
***f) Net income from investments***

*2012 compared to 2011.* Net income from investments in2012 was a net gain of euro 2,881 million and mainly related to:(i) Eni’s share of profit of entities accounted for underthe equity-accounting method (euro 278 million) mainly in the Gas& Power segment; (ii) dividends received by entitiesaccounted for at cost (euro 431 million); (iii) gains ondisposal of assets (euro 349 million) mainly relating to thedivestment of a 9% interest in Galp (euro 311 million) in twotranches (a 5% interest sold to Amorim BV and a 4% sold toinstitutional investors through an accelerated book-buildingprocedure in November 2012); and (iv) other net income (euro1,823 million) which reflected revaluation gains recorded on theCompany’s interest in Galp. Those gains are furtherexplained in "Item 18 – note 17 – Investments– of the Notes to the Consolidated FinancialStatements". 

*2011 compared to 2010.* Net income from investments in2011 was a net gain of euro 2,123 million and mainly related to:(i) gains on disposal of assets (euro 1,121 million) mainlyrelated to a gain of euro 1,044 million recorded on thedivestment of Eni’s interests in the international pipelineswhich transport gas from Northern Europe and Russia and in GasBrasiliano Distribuidora (euro 50 million); (ii) dividendsreceived by entities accounted for at cost (euro 659 million),mainly relating to Nigeria LNG Ltd; (iii) Eni’s share ofprofit of entities accounted for with the equity method (euro 500million), mainly in the Gas & Power, Exploration &Production and Refining & Marketing segments; and(iv) an impairment loss of an interest in a refinery plantin Eastern Europe reflecting a reduced profitability outlook(euro 157 million).

 

> 
***g) Taxes***

*2012 compared to 2011.* In 2012, income taxes amountedto euro 11,659 million, up by euro 1,756 million compared to2011, or 17.7%, mainly reflecting higher income taxes currentlypayable by subsidiaries in the Exploration & Productionsegment operating outside Italy due to higher taxable profit anda write down of euro 1,030 million which was recorded at deferredtax assets of Italian subsidiaries.

| The Group’s consolidated tax rate        increased compared to 2011, up from 55.7% to 70.2% (up        14.5 percentage points). This increase was due to: |
|----------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (i)   |   | a write down of euro 1,030        million which was recognized to reflect a lower        likelihood that certain deferred tax assets of Italian        subsidiaries can be recovered in future periods due to an        expected reduction in taxable income generated in Italy,        and as Eni has lost the availability of Snam taxable        profit against which Italian tax assets can be utilized        following the deconsolidation of Snam; |
|-------|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| (ii)  |   | a shift from profit earned        by associates to increased taxable income reported by the        Exploration & Production segment, subject to higher        tax rates; and                                                                                                                                                                                                                                                                          |
| (iii) |   | the significant amount of        non-deductible charges (mainly the goodwill impairment of        the European market cash generating unit).                                                                                                                                                                                                                                                                                                              |

These negatives were partly offset by the non-taxable gainswhich were recorded on the Galp interest and the fact that basedon the accounting provided by IFRS 5 the Group taxable incomefrom continuing operations benefited from Snam’s margins onintercompany transactions which are deprived of any tax impact.

Excluding the deferred tax assets write down which was anon-recurring item, as well as capital and revaluation gains oninvestments and goodwill impairments which are non-taxable,non-deductible items, management estimated that the Groupunderlying tax rate increased in 2012 compared to 2011 due to ahigher share of taxable profit earned by 

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the Exploration & Production segment which normally incursan above-average rate of taxes compared to the rest of the Groupoperations. We expect that in the short-to-medium term the Groupunderlying tax rate will continue trending higher due to anincreasing share of taxable profit earned by the Exploration& Production segment. Subsequently, we expect that improvedprofitability at other Group segments will partly rebalance thattrend.

*2011 compared to 2010.*In 2011, income taxes amountedto euro 9,903 million, up by euro 1,322 million from a year ago,or 15.4%, mainly reflecting higher income taxes currently payableby subsidiaries in the Exploration & Production segmentoperating outside Italy due to higher taxable profit.

The Group consolidated tax rate increased compared to 2010, upfrom 54.2% to 55.7% (up 1.5 percentage points). This increase wasdue to the recognition of higher deferred taxes (euro 573million) due to a changed tax rate applicable to a productionsharing agreement, including an adjustment to deferred taxationwhich was recognized upon allocation of the purchase price aspart of a business combination when the mineral interest wasacquired by Eni.

These negatives were partly offset by the above mentionedgains on international transport interests (euro 1,044 million)which were non-taxable items, as well as lower non-deductible taxcharges (in particular impairment of goodwill).

 

> 
***h) Non-controlling interest***

*2012 compared to 2011.* Net profit pertaining tonon-controlling interest was euro 743 million and concernedprimarily Saipem SpA (euro 627 million).

*2011 compared to 2010.* Net profit pertaining tonon-controlling interest was euro 975 million and concernedprimarily Saipem SpA (euro 552 million).

 

**Liquidity and capital resources**

Eni’s cash requirements for working capital, dividends toshareholders, capital expenditures and acquisitions over the pastthree years were financed primarily by a combination of fundsgenerated from operations, borrowings and divestments ofnon-strategic assets. The Group continually monitors the balancebetween cash flow from operating activities and net expenditurestargeting a sound and well-balanced financing structure.

 

 

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The following table summarizes the Group cash flows and theprincipal components of Eni’s change in cash and cashequivalent for the periods indicated.

|   | **Year ended December 31,** |
|--------|-----------------------------|
|   |                             |

|   |   | **2010** |   | **2011** |   | **2012** |
|--------|--------|----------|--------|----------|--------|----------|
|   |   |          |   |          |   |          |

|   |   | **(euro million)** |
|--------|--------|--------------------|

| **Net profit - continuing operations**                                                            |   | **7,264**   |   |   | **7,877**   |   |   | **4,941**   |   |
|---------------------------------------------------------------------------------------------------|--------|-------------|--------|--------|-------------|--------|--------|-------------|--------|
| *Adjustments        to reconcile net profit to net cash provided by operating        activities:* |   |        |   |   |        |   |   |        |   |
| - amortization and depreciation charges,        impairment losses and other non monetary items    |   | 8,521       |   |   | 8,606       |   |   | 11,354      |   |
| - net gains        on disposal of assets                                                          |   | (558        | )      |   | (1,176      | )      |   | (875        | )      |
| - dividends, interest, taxes and other changes                                                    |   | 8,829       |   |   | 9,918       |   |   | 11,923      |   |
| Changes in        working capital related to operations                                           |   | (1,158      | )      |   | (1,696      | )      |   | (3,373      | )      |
| Dividends received, taxes paid, interest (paid)        received during the period                 |   | (8,758      | )      |   | (9,766      | )      |   | (11,614     | )      |
| **Net cash        provided by operating activities - continuing operations**                      |   | **14,140**  |   |   | **13,763**  |   |   | **12,356**  |   |
|                                                                                              |   |             |        |   |             |        |   |             |        |
| Net cash provided by operating activities -        discontinued operations                        |   | 554         |   |   | 619         |   |   | 15          |   |
| **Net cash        provided by operating activities**                                              |   | **14,694**  |   |   | **14,382**  |   |   | **12,371**  |   |
|                                                                                              |   |             |        |   |             |        |   |             |        |
| **Capital expenditures - continuing operations**                                                  |   | **(12,450** | **)**  |   | **(11,909** | **)**  |   | **(12,761** | **)**  |
| Capital        expenditures - discontinued operations                                             |   | (1,420      | )      |   | (1,529      | )      |   | (756        | )      |
| **Capital expenditures**                                                                          |   | **(13,870** | **)**  |   | **(13,438** | **)**  |   | **(13,517** | **)**  |
| Investments        and purchases of consolidated subsidiaries and businesses                      |   | (410        | )      |   | (360        | )      |   | (569        | )      |
| Disposals                                                                                         |   | 1,113       |   |   | 1,912       |   |   | 6,014       |   |
| Other cash        flow related to investing activities (*)                                        |   | 202         |   |   | 668         |   |   | (219        | )      |
| Changes in short and long-term finance debt                                                       |   | 2,272       |   |   | 1,104       |   |   | 5,947       |   |
| Dividends        paid and changes in non-controlling interests and        reserves                |   | (4,099      | )      |   | (4,327      | )      |   | (3,746      | )      |
| Effect of changes in consolidation and exchange        differences                                |   | 39          |   |   | 10          |   |   | (16         | )      |
|                                                                                              |   |             |        |   |             |        |   |             |        |
| **Change in        cash and cash equivalent for the year**                                        |   | **(59**     | **)**  |   | **(49**     | **)**  |   | **6,265**   |   |
|                                                                                              |   |             |        |   |             |        |   |             |        |
| Cash and cash equivalent at the beginning of the        year                                      |   | 1,608       |   |   | 1,549       |   |   | 1,500       |   |
| Cash and cash        equivalent at year end                                                       |   | 1,549       |   |   | 1,500       |   |   | 7,765       |   |
|                                                                                              |   |             |        |   |             |        |   |             |        |

----

| (*)          |    | Net cash used        in investing activities included investments in certain        financial assets to absorb temporary surpluses of cash or        as 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. For        the definition of net borrowings, see "Financial        condition" below. Cash flows of such investments        were as follows: |
|--------------|--------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|    |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |

|         |    | (euro million) |   |    ** ** |   | **2010** |   | **2011** |   | **2012** |
|--------------|--------------|----------------|--------|------------------------------|--------|----------|--------|----------|--------|----------|
|    |    |           |   |                         |   |          |   |          |   |          |

|   |   | Financing investments:                       |   |    |   |   |    |   |   |       |   |
|--------|--------|----------------------------------------------|--------|---------|--------|--------|---------|--------|--------|------------|--------|
|   |   | -        securities                          |   | (50     | )      |   | (21     | )      |   |       |   |
|   |   | - financing receivables                      |   | (13     | )      |   | (26     | )      |   | (1,131     | )      |
|   |   |                                         |   | **(63** | **)**  |   | **(47** | **)**  |   | **(1,131** | **)**  |
|   |   | Disposal of financing investments:           |   |    |   |   |    |   |   |       |   |
|   |   | -        securities                          |   | 5       |   |   | 71      |   |   | 4          |   |
|   |   | - financing receivables                      |   | 32      |   |   | 17      |   |   | 1,044      |   |
|   |   |                                         |   | **37**  |   |   | **88**  |   |   | **1,048**  |   |
|   |   | **Net cash flows from financing activities** |   | **(26** | **)**  |   | **41**  |   |   | **(83**    | **)**  |
|   |   |                                         |   |         |        |   |         |        |   |            |        |

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The table below sets forth the principal components ofEni’s change in net borrowings (1) for theperiods indicated.

|   | **Year ended December 31,** |
|--------|-----------------------------|
|   |                             |

|   |   | **2010** |   | **2011** |   | **2012** |
|--------|--------|----------|--------|----------|--------|----------|
|   |   |          |   |          |   |          |

|   |   | **(euro million)** |
|--------|--------|--------------------|

| **Net cash provided by operating activities**                                       |   | **14,694** |   |   | **14,382** |   |   | **12,371** |   |
|-------------------------------------------------------------------------------------|--------|------------|--------|--------|------------|--------|--------|------------|--------|
| Capital        expenditures                                                         |   | (13,870    | )      |   | (13,438    | )      |   | (13,517    | )      |
| Acquisitions of investments and businesses                                          |   | (410       | )      |   | (360       | )      |   | (569       | )      |
| Disposals                                                                           |   | 1,113      |   |   | 1,912      |   |   | 6,014      |   |
| Other cash flow related to capital expenditures,        investments and divestments |   | 228        |   |   | 627        |   |   | (136       | )      |
| Net        borrowings (1) of acquired companies                                     |   | (33        | )      |   |       |   |   | (2         | )      |
| Net borrowings (1) of divested        companies                                     |   |       |   |   | (192       | )      |   | 12,446     |   |
| Exchange        differences on net borrowings and other changes                     |   | (687       | )      |   | (517       | )      |   | (340       | )      |
| Dividends paid and changes in minority interest        and reserves                 |   | (4,099     | )      |   | (4,327     | )      |   | (3,746     | )      |
|                                                                                |   |            |        |   |            |        |   |            |        |
| **Change in        net borrowings**(1)                                              |   | **(3,064** | **)**  |   | **(1,913** | **)**  |   | **12,521** |   |
|                                                                                |   |            |        |   |            |        |   |            |        |
| Net borrowings (1) at the beginning        of the year                              |   | 23,055     |   |   | 26,119     |   |   | 28,032     |   |
| Net        borrowings (1) at year end                                               |   | 26,119     |   |   | 28,032     |   |   | 15,511     |   |
|                                                                                |   |            |        |   |            |        |   |            |        |

----

| (1) |    | Net        borrowings is a non-GAAP financial measure. For a        discussion of the usefulness of net borrowings and its        reconciliation with the most directly comparable GAAP        financial measures see "Financial condition"        below. |
|-----|--------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

 

> 
***Analysis of certain components of Eni’s change    in net borrowings***

In 2012, adjustments to reconcile net profit from continuingoperations to net cash provided by operating activities fromcontinuing operations mainly related to non-monetary charges andgains amounting to euro 11,354 million, which primarily relatedto depreciation, depletion amortization and impairment charges oftangible and intangible assets (euro 13,561 million). Adjustmentsto net profit from continuing operations also included gains ondisposals (euro 875 million) and movements in net working capital(euro 3,373 million), while the difference between accruedamounts of income taxes, interest expenses and other items asopposed to amounts actually disbursed was immaterial.

In 2011, adjustments to reconcile net profit from continuingoperations to net cash provided by operating activities fromcontinuing operations mainly related to non-monetary charges andgains amounting to euro 8,606 million, which primarily regardeddepreciation, depletion amortization and impairment charges oftangible and intangible assets (euro 8,785 million). Adjustmentsto net profit also included gains on disposals (euro 1,176million), movements in net working capital (euro 1,696 million),income taxes (euro 9,893 million) and interest expenses (euro 927million) accrued in the year as opposed to amounts actually paid.

 

> 
***a) Changes in working capital related to operations***

In 2012, changes in working capital absorbed cash flowsamounting to a negative euro 3,373 million as a result of: (i)increasing inventories (up euro 1,395 million) mainly related tohigher contract work in progress in the Engineering &Construction segment due to the fact that clients at certainimportant contracts have yet to formally accept the work inprogress due to project complexity and, in certain otherprojects, important changes in work orders have been recognizedbut formal acceptance by the client remains pending; (ii)increased trade receivables net of increased trade payables (upby euro 1,155 million) which were mainly recorded in the Gas& Power segment due to a deteriorating credit environment;and (iii) and cash pre-payments amounting to approximately euro500 million made to the Company’s gas suppliers which wererecorded on the take-or-pay position accrued in 2012 includingpayment of outstanding receivables at the beginning of the year.For further details on that asset see "Item 18 – note14 - Other non current assets – of the Notes to theConsolidated Financial Statements".

In 2011, changes in working capital absorbed cash flowsamounting to a negative euro 2,176 million as a result of: (i)increasing oil, gas and petroleum products inventories (up euro1,422 million) due to the impact of rising oil prices oninventories stated at the weighted average cost; (ii) cashpre-payments amounting to euro 324 million made to theCompany’s suppliers of gas under long-term gas supplycontracts whereby the Company has the contractual obligation tolift minimum annual quantities of gas or in case of failure,pre-pay the whole price or a fraction of those quantities asprovided by the so-called take-or-pay clause. The amount was netof certain limited volumes make-up in the year. For furtherdetails on that asset see "Item 18 – note 14 - Othernon current assets – of the Notes to the ConsolidatedFinancial Statements"; and (iii) an increasing balance oftrade receivables versus payables towards certain joint venturepartners in the Exploration & Production segment.

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These negatives were partly offset by a reduced balancebetween trade payables and receivables also resulting from ahigher volume of trade receivables due beyond the balance sheetdate which were transferred without recourse to factoringinstitutions, amounting to euro 1,779 million in 2011 compared toeuro 1,279 million at December 31, 2010.

 

***b) Investing activities***

|   | **Year ended December 31,** |
|--------|-----------------------------|
|   |                             |

|   |   | **2010** |   | **2011** |   | **2012** |
|--------|--------|----------|--------|----------|--------|----------|
|   |   |          |   |          |   |          |

|   |   | **(euro million)** |
|--------|--------|--------------------|

| Exploration & Production                              |   | 9,690      |   |   | 9,435      |   |   | 10,307     |   |
|-----------------------------------------------------------|--------|------------|--------|--------|------------|--------|--------|------------|--------|
| Gas &        Power                                    |   | 265        |   |   | 192        |   |   | 225        |   |
| Refining & Marketing                                  |   | 711        |   |   | 866        |   |   | 842        |   |
| Chemicals                                                 |   | 251        |   |   | 216        |   |   | 172        |   |
| Engineering & Construction                            |   | 1,552      |   |   | 1,090      |   |   | 1,011      |   |
| Other        activities                                   |   | 22         |   |   | 10         |   |   | 14         |   |
| Corporate and financial companies                         |   | 109        |   |   | 128        |   |   | 152        |   |
| Impact of        unrealized intragroup profit elimination |   | (150       | )      |   | (28        | )      |   | 38         |   |
|                                                      |   |            |        |   |            |        |   |            |        |
| **Capital expenditures - continuing operations**          |   | **12,450** |   |   | **11,909** |   |   | **12,761** |   |
| Capital        expenditures - discontinued operations     |   | 1,420      |   |   | 1,529      |   |   | 756        |   |
| **Capital expenditures**                                  |   | **13,870** |   |   | **13,438** |   |   | **13,517** |   |
| **Acquisitions        of investments and businesses**     |   | **410**    |   |   | **360**    |   |   | **569**    |   |
|                                                      |   |            |        |   |            |        |   |            |        |
|                                                      |   | **14,280** |   |   | **13,798** |   |   | **14,086** |   |
|                                                      |   |            |        |   |            |        |   |            |        |
| **Disposals**                                             |   | **(1,113** | **)**  |   | **(1,912** | **)**  |   | **(6,014** | **)**  |
|                                                      |   |            |        |   |            |        |   |            |        |

Capital expenditures totaled euro 13,517 million and euro13,438 million, respectively in 2012 and in 2011.

For a discussion of capital expenditures by business segmentand a description of year-on-year changes see "Capitalexpenditures by segment".

Acquisitions of investments and businesses totaled euro 569million in 2012 and euro 360 million in 2011.

In 2012, disposals amounted to euro 6,014 million and mainlyrelated to: (i) the divestment of 30% interest less one share inSnam to Cassa Depositi e Prestiti (euro 3,517 million); (ii) thesale in two tranches of the interest in Galp for an overallamount of euro 963 million (a 5% interest sold to Amorim BV and a4% sold through an accelerated book-building procedure); (iii)the disposal of a 10% interest in the Karachaganak field (euro500 million); (iv) the disposal of a 1.43% interest in theGassled JV, a network of gas pipelines and terminals for naturalgas transportation (euro 130 million); and (v) the disposal ofother non-strategic assets in the Exploration & Productionsegment (euro 565 million). The proceeds on the divestment of aninterest of 5% in Snam before loss of control to institutionalinvestors (euro 612 million) were recognized as an equitytransaction.

In 2011, disposals amounted to euro 1,912 million and mainlyrelated to: (i) the divestment of the Company’s interests inthe entities engaged in the international transport of gas fromNorthern Europe and Russia (euro 1,463 million); (ii) thedivestment of the 100% stake in Gas Brasiliano Distribuidora,engaged in the distribution activities in Brazil (euro 167million); and (iii) non-strategic assets in the Exploration &Production segment (euro 154 million).

 

> 
***c) Dividends paid and changes in non-controlling    interests and reserves***

In 2012, dividends paid and changes in non-controllinginterests and reserves (euro 3,746 million) mainly related to:(i) cash dividends to Eni shareholders (euro 3,695 million, whicheuro 1,956 million relating to 2012 interim dividend and euro1,884 million to the balance dividend for fiscal year 2011 toEni’s shareholders); and (ii) the distribution of dividendsto non-controlling interests by Snam SpA and Saipem SpA (euro 486million) and other consolidated subsidiaries (euro 53 million).Those outflows were partly absorbed by an equity transactioninvolving 5% of the share capital of Snam which was divested tothird-party investors before loss of control for euro 612million.

In 2011, dividends paid and changes in non-controllinginterests and reserves (euro 4,327 million) mainly related to:(i) cash dividends to Eni shareholders (euro 3,695 million, ofwhich euro 1,811 million related to the balance for the 

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dividend relating the fiscal year 2010 and euro 1,884 millionas an interim dividend for fiscal year 2011); and (ii) thedistribution of dividends to non-controlling interests by SnamRete Gas SpA and Saipem SpA (euro 518 million) and otherconsolidated subsidiaries (euro 34 million).

 

> 
***Financial condition***

Management assesses the Group capital structure and capitalcondition by tracking net borrowings, which is a non-GAAPfinancial measure. Eni calculates net borrowings as total financedebt (short-term and long-term debt) derived from itsConsolidated Financial Statements prepared in accordance withIFRS less: cash, cash equivalents and certain highly liquidinvestments not related to operations including, among others,non-operating financing receivables and securities not related tooperations. Non-operating financing receivables consist mainly ofdeposits with banks and other financing institutions and depositsin escrow. Securities not related to operations consist primarilyof government bonds and securities from financing institutions.These assets are generally intended to absorb temporary surplusesof cash as part of the Company’s ordinary management offinancing activities.

Management believes that net borrowings is a useful measure ofEni’s financial condition as it provides insight on thesoundness of Eni’s capital structure and the ways in whichEni’s operating assets are financed. In addition, managementutilizes the ratio of net borrowings to total shareholders’equity including non-controlling interest (leverage) to assessEni’s capital structure, to analyze whether the ratiobetween finance debt and shareholders’ equity is wellbalanced according to industry standards and to trackmanagement’s short-term and medium-term targets. Managementcontinuously monitors trends in net borrowings and trends inleverage in order to optimize the use of internally-generatedfunds versus funds from third parties. The measure calculated inaccordance with IFRS that is most directly comparable to netborrowings is total debt (short-term and long-term debt). Themost directly comparable measure, derived from IFRS reportedamounts, to leverage is the ratio of total debt toshareholders’ equity (including non-controlling interest).Eni’s presentation and calculation of net borrowings andleverage may not be comparable to that of other companies.

The tables below set forth the calculations of net borrowingsand leverage for the periods indicated and their reconciliationto the most directly comparable GAAP measure.

|   | **As of December 31,** |
|--------|------------------------|
|   |                        |

|   |   | **2010** |   | **2011** |   | **2012** |
|--------|--------|----------|--------|----------|--------|----------|
|   |   |          |   |          |   |          |

|   |   | **Short-term** |   | **Long-term** |   | **Total** |   | **Short-term** |   | **Long-term** |   | **Total** |   | **Short-term** |   | **Long-term** |   | **Total** |
|--------|--------|----------------|--------|---------------|--------|-----------|--------|----------------|--------|---------------|--------|-----------|--------|----------------|--------|---------------|--------|-----------|
|   |   |                |   |               |   |           |   |                |   |               |   |           |   |                |   |               |   |           |

|   | **(euro        million)** |
|--------|---------------------------|

| **Total debt (short-term and long-term debt)** |   | **7,478** |   |   | **20,305** |   | **27,783** |   |   | **6,495** |   |   | **23,102** |   | **29,597** |   |   | **5,184**  |   |   | **19,279** |   | **24,463** |   |
|------------------------------------------------|--------|-----------|--------|--------|------------|--------|------------|--------|--------|-----------|--------|--------|------------|--------|------------|--------|--------|------------|--------|--------|------------|--------|------------|--------|
| Cash and        cash equivalents               |   | (1,549    | )      |   |       |   | (1,549     | )      |   | (1,500    | )      |   |       |   | (1,500     | )      |   | (7,765     | )      |   |       |   | (7,765     | )      |
| Securities not related to operations           |   | (109      | )      |   |       |   | (109       | )      |   | (37       | )      |   |       |   | (37        | )      |   | (34        | )      |   |       |   | (34        | )      |
| Non-operating        financing receivables     |   | (6        | )      |   |       |   | (6         | )      |   | (28       | )      |   |       |   | (28        | )      |   | (1,153     | )      |   |       |   | (1,153     | )      |
|                                           |   |           |        |   |            |   |            |        |   |           |        |   |            |   |            |        |   |            |        |   |            |   |            |        |
| **Net borrowings**                             |   | **5,814** |   |   | **20,305** |   | **26,119** |   |   | **4,930** |   |   | **23,102** |   | **28,032** |   |   | **(3,768** | **)**  |   | **19,279** |   | **15,511** |   |
|                                           |   |           |        |   |            |   |            |        |   |           |        |   |            |   |            |        |   |            |        |   |            |   |            |        |

|   | **As of December 31,** |
|--------|------------------------|
|   |                        |

|   |   | **2010** |   | **2011** |   | **2012** |
|--------|--------|----------|--------|----------|--------|----------|
|   |   |          |   |          |   |          |

| **Shareholders’ equity including        non-controlling interest as per Eni’s Consolidated        Financial Statements prepared in accordance with IFRS**                         |   | (euro million) |   | **55,728** |   |   | **60,393** |   |   | **62,713** |   |
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|----------------|--------|------------|--------|--------|------------|--------|--------|------------|--------|
| *Ratio        of total debt to total shareholders’ equity        including non-controlling interest*                                                                                   |   |           |   | *0.50*     |   |   | *0.49*     |   |   | *0.39*     |   |
| *Less: ratio of cash, cash equivalents and        certain liquid investments not related to operations to        total shareholders’ equity including non-controlling        interest* |   |           |   | *(0.04*    | *)*    |   | *(0.03*    | *)*    |   | *(0.14*    | *)*    |
| *Ratio        of net borrowing to total shareholders’ equity        including non-controlling interest (leverage)*                                                                     |   |           |   | *0.46*     |   |   | *0.46*     |   |   | *0.25*     |   |
|                                                                                                                                                                                        |   |           |   |            |        |   |            |        |   |            |        |

In 2012, net borrowings amounted to euro 15,511 million,representing a euro 12,521 million decrease from 2011. Thisdecrease was mainly due to the divestment of a 30% interest inSnam to Cassa Depositi e Prestiti (euro 3,517 

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million) and, following the loss of control in this entity,the deconsolidation of Snam net borrowings of euro 12,448million, which entered finance arrangements with third-partylenders to reimburse intercompany loans.

Non-operating financing receivables related to a short-termfinancing granted to Cassa Depositi e Prestiti as part of atransaction to divest a 30% stake in Snam and related agreementsto defer part of the cash consideration. The financing wasreimbursed early in 2013.

Net cash provided by operating activities of continuingoperations (euro 12,356 million) and proceeds from disposals ofeuro 6,014 million funded cash outflows relating to capitalexpenditures totaling euro 12,761 million and investments (euro569 million) relating to the acquisition of Nuon in Belgium andjoint venture projects, as well as dividend payments toshareholders.

The Group leverage was 0.25 at December 31, 2012 decliningfrom 0.46 as of end of 2011 due to the lower level of netborrowings. The Group total equity increased due to net profitfor the year, the revaluation of Eni’s residual interests inGalp and Snam at fair market value through equity at period end(up euro 133 million and euro 8 million, respectively) as theywere classified as a financial instrument excluding thoseportions of interest revaluation that were recognized throughprofit because management elected the fair value option for theshares underlying convertible bonds in accordance with IFRS.Total equity also increased due to the divestment of a 5%non-controlling interest in Snam to institutional investors thatoccurred in July 2012, i.e. before loss of control which alsodetermined an increase in the Group’s equity as thetransaction consideration was higher than the corresponding bookvalue disposed of (euro 371 million). On the negative side,shareholders’ equity was impacted by foreign currencytranslation differences (euro 713 million) in translating to euroamounts the net equity of subsidiaries whose functional currencyis the U.S. dollar due to the dollar revaluation in exchangerates recorded at year end (up by 2% due to the exchange raterecorded on December 31, 2012 at euro 1= $1.32 compared to euro1= $1.294 at December 31, 2011).

Total debt of euro 24,463 million consisted of euro 5,184million of short-term debt (including the portion of long-termdebt due within twelve months equal to euro 2,961 million) andeuro 19,279 million of long-term debt.

Total debt included bonds for euro 16,824 million (includingaccrued interest and discount on issuance). Bonds maturing in thenext 18 months amounted to euro 3,051 million (including accruedinterest and discount). Bonds issued in 2012 amounted to euro1,864 million (including accrued interest and discount). Totaldebt was denominated in the following currencies: euro (87%),U.S. dollar (9%), pound sterling (3%) and 1% in other currencies.

In 2011, net borrowings amounted to euro 28,032 million,representing a euro 1,913 million increase from 2010. Thisincrease was mainly due to the large amount of capitalexpenditures made in the year and dividend payments toshareholders. These outflows were partially funded with cashflows from operations and divestments. However, the Groupleverage was 0.46 at December 31, 2011 declining from 0.47 as ofend of 2010 due to the fact that the higher level of netborrowings was balanced by a greater total equity. The Grouptotal equity increased due to net profit for the year andcurrency translation differences recorded in translating to euroamounts the net equity of subsidiaries whose functional currencyis the U.S. dollar due to the dollar revaluation in exchangerates recorded at year end (up by 3.1% due to the exchange raterecorded on December 31, 2011 at euro 1= $1.294 compared to euro1= $1.336 at December 31, 2010).

 

> 
*Capital expenditures by segment*

*Exploration & Production.* In 2012, capitalexpenditures of the Exploration & Production segment amountedto euro 10,307 million, representing an increase of euro 872million, or 9.2%, from 2011 mainly related to the development ofoil and gas reserves (euro 8,304 million). Significantexpenditures were directed mainly outside Italy, in particularNorway, the United States, Congo, Kazakhstan, Angola and Algeria.Development expenditures in Italy concerned the well drillingprogram and facility upgrading in Val d’Agri as well assidetrack and infilling activities in mature fields. About 98% ofexploration expenditures that amounted to euro 1,850 million weredirected outside Italy in particular in Mozambique, Liberia,Ghana, Indonesia, Nigeria, Angola and Australia.

In 2011, capital expenditures of the Exploration &Production segment amounted to euro 9,435 million, representing adecrease of euro 255 million, or 2.6%, from 2010 mainly due tothe development of oil and gas reserves (euro 7,357 million).Significant expenditures were directed mainly outside Italy, inparticular Norway, Kazakhstan, Algeria, the United States, Congoand Egypt as well as blocks and interests in licenses awardedamounting to euro 754 million, mainly in Nigeria. Developmentexpenditures in Italy concerned well drilling program andfacility upgrading in Val d’Agri as well as sidetrack andinfilling activities in mature fields. About 97% of explorationexpenditures that amounted to euro 1,210 million were directedoutside Italy in particular in Australia, Angola, Mozambique,Indonesia, Ghana, Egypt, Nigeria and Norway.

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*Gas & Power.* In 2012, capital expenditures in theGas & Power segment totaled euro 225 million and mainlyrelated to initiatives to improve flexibility of the combinedcycle power plants (euro 131 million) and to develop the gasmarketing activity (euro 81 million).

In 2011, capital expenditures in the Gas & Power segmenttotaled euro 192 million and mainly related to initiatives toimprove flexibility of the combined cycle power plants (euro 87million) and to develop the gas marketing activity (euro 97million).

*Refining & Marketing.* In 2012, capital expendituresin the Refining & Marketing segment amounted to euro 842million and mainly related to: (i) refining, supply and logisticswith projects designed to improve the conversion rate andflexibility of refineries (euro 622 million), in particular atthe Sannazzaro refinery; and (ii) upgrading and rebranding of therefined product retail network (euro 220 million).

In 2011, capital expenditures in the Refining & Marketingsegment amounted to euro 866 million and mainly related to: (i)refining, supply and logistics in Italy and outside Italy (euro629 million), with projects designed to improve the conversionrate and flexibility of refineries, in particular the Sannazzarorefinery, as well as expenditures on health, safety andenvironmental upgrades; and (ii) upgrade and rebranding of therefined product retail network in Italy (euro 168 million) and inthe rest of Europe (euro 60 million).

*Chemicals.* In 2012, capital expenditures in theChemical segment amounted to euro 172 millionand mainly related to: (i) plant upgrades (euro 53million) in particular in Ravenna; (ii) energy recovery (euro 41million), mainly related to energy savings projects aimed atreducing CO2 emissions; (iii) environmentalprotection, safety and environmental regulation (euro 38million), relating primarily to the optimization of dischargewater treatment; and (iv) upkeep of plants (euro 25 million).

In 2011, capital expenditures in the Chemical segment amountedto euro 216 million and mainly related to: (i) upkeep (euro59 million); (ii) plant upgrades (euro 53 million), mainlyregarding the project "Management of fugitiveemissions" aimed at identifying the number of sites ofpotential emissions where the Company operates, putting PolimeriEuropa in a leading position at international level; (iii)environmental protection, safety and environmental regulation(euro 46 million); and (iv) energy recovery project (euro 42million), mainly related to energy savings projects aimed atreducing CO2 emissions.

*Engineering & Construction.* In 2012, capitalexpenditures in the Engineering & Construction segment (euro1,011 million) mainly related to: (i) construction of a newpipelayer, the construction of a new fabrication yard inIndonesia, the construction of a new fabrication yard in Braziland upkeep works in the Engineering & Construction Offshorebusiness; (ii) activities for the completion of the constructionof the Scarabeo 8 and the upgrading of the Scarabeo 6 to make itcapable of drilling up into 1,100 meters of water; (iii)realization/development of operating structures in the OffshoreDrilling business unit; and (iv) purchase of materials andequipment and planned upkeep of the current asset base in theOnshore Drilling business.

In 2011, capital expenditures in the Engineering &Construction segment (euro 1,090 million) mainly related to:(i) construction of a new pipelayer, the ultra-deep FieldDevelopment Ship FDS 2, activities for the conversion of a tankerinto an FPSO and the construction of a new fabrication yard inIndonesia; (ii) activities for the completion of Saipem 12000, anew ultra-deep water drilling ship, construction of the Scarabeo8 and 9 semi-submersible rigs and of the Perro Negro 6 jack-up;and (iii) realization/development of operating structures in theOnshore Drilling business unit.

 

 

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**Recent developments**

The table below sets forth certain indicators of the tradingenvironment for the periods indicated:

|   |   | **Three months        ended March 31,** |
|--------|--------|-----------------------------------------|
|   |   |                                         |

|   |   | **2012** |   | **2013** |
|--------|--------|----------|--------|----------|
|   |   |          |   |          |

| Average price of Brent dated crude oil in U.S.        dollars (1) |   | 118.49 |   | 112.60 |
|-------------------------------------------------------------------|--------|--------|--------|--------|
| Average        price of Brent dated crude oil in euro (2)         |   | 90.38  |   | 84.66  |
| Average EUR/USD exchange rate (3)                                 |   | 1.311  |   | 1.330  |
| Average        European refining margin in U.S. dollars (4)       |   | 2.92   |   | 3.92   |
| EURIBOR - three month euro rate % (3)                             |   | 1.0    |   | 0.2    |
|                                                              |   |        |   |        |

----

| (1) |    | Price per        barrel. Source: Platt’s Oilgram.                                                                                                                                                       |
|-----|--------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| (2) |    | Price per        barrel. Source: Eni’s calculations based on        Platt’s Oilgram data for Brent prices and the        EUR/USD exchange rate reported by the European Central        Bank (ECB). |
| (3) |    | Source: ECB.                                                                                                                                                                                                 |
| (4) |    | Price per        barrel. FOB Mediterranean Brent dated crude oil. Source:        Eni calculations based on Platt’s Oilgram data.                                                                        |

 

> 
***Significant transactions***

On March 13, 2013, Eni signed an agreement withCNPC/Petrochina to sell 28.57% of the share capital of thesubsidiary Eni East Africa, which currently owns 70% interest inArea 4 for an agreed price equal to $4,210 million. The deal issubject to approval by relevant authorities. Once finalized, CNPCwill indirectly acquire, through its 28.57% equity investment inEni East Africa, a 20% interest in Area 4, while Eni will retainthe 50% interest through the remaining controlling stake in EniEast Africa.

The Company’s Annual General Shareholders Meetingscheduled on May 10, 2013, is due to approve the full yeardividend proposal. Eni expects to pay the balance of the dividendfor fiscal year 2012 amounting to euro 0.54 per share in May2013. The total cash-out is estimated at euro 1.96 billion.

 

**Management’s expectations of operations**

Management expects an uncertain macroeconomic outlook in 2013,particularly in the Euro-zone where businesses and households arecautious about investments and consumption decisions. We expectthat a number of factors will support the price of crude oilincluding ongoing geopolitical risks as well as an improvedbalance between world demand and supplies of crude oil. Forinvestment evaluation purposes and short-term financialprojections, Eni assumes a full-year average price of $90 abarrel for the Brent crude benchmark. Management expectscontinuing weak conditions in the European gas, refining andmarketing of fuels and chemical sectors. Demand for energycommodities is anticipated to remain sluggish due to the ongoingeconomic stagnation; unit margins are exposed to competitivepressures and the risk of new increases in the costs of oil-basedraw materials in an extremely volatile environment. In thisscenario, the recovery of profitability in the Gas & Power,Refining & Marketing and Chemical segments will dependgreatly on management actions to optimize operations and improvethe cost position.

Management expects that year-on-year comparability of resultsfrom continuing operations in 2013 will be affected by the factthat in 2012 Snam margins on intra-group transactions relating tothe supply of gas transport and other services have beeneliminated upon consolidation, while in 2013 those transactionswill be accounted as third-party transactions, thus affecting theGroup operating costs and profits.

 

> 
*Exploration & Production*

The outlook of the production of liquids and natural gas ispositive in 2013. Management expects to grow production by ramping-up fieldsstarted in 2012 and major project start-ups in 2013, mainlyKashagan in Kazakhstan, Angola LNG and the gas assets in Algeria.Based on those ongoing trends, we expect that oil and gasproduction will grow in 2013 compared to 2012.

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According to management’s plans, production growth willcontinue in the coming years as the Company is targeting anannual growth rate higher than 4% on average in the next2013-2016 four-year period, based on our long-term Brent priceassumptions of 90 $/BBL. Oil price assumptions are particularlysignificant when it comes to assessing the Company’s futureproduction performance considering the entitlement mechanismunder Eni’s PSAs and similar contractual schemes. TheCompany estimates that production entitlements in its PSAs willdecrease on average by approximately 1,000 BBL/d for a $1increase in oil prices compared to current Eni’s assumptionsfor oil prices. Our production growth target factors in anaverage decline rate of 4% per annum at our currently producingfields throughout the plan period. To achieve that decline rate,we plan to carry out effective reservoir management and intenseproduction optimization activities. The main driver of futuregrowth will be the start-up of new fields which we estimate toadd more than 700 kBOE/d of new production by the end of the planhorizon. We have a good level of visibility on those new projectsas we have already sanctioned 65% of these projects and we expectto arrive at 90% by the end of 2013.

Management will focus on delivering the planned projects ontime and on budget. We acknowledge that most of our projects arecomplex due to scale and reach of operations,environmentally-sensitive or remote locations, harsh externalconditions, industry limits and other considerations includingthe risk factors described in Item 3. We plan to mitigate thoserisks in the future by continuing deployment of our capabilitiesand operational excellence and managing the industry constraintsby means of: (i) in-sourcing critical engineering and projectmanagement activities and redeploying to other areas keycompetences which will be freed with the start-up of certainstrategic projects and increasing direct control and governanceon construction activities; and (ii) entering into frameworkagreements with major suppliers, using standardizedspecifications to speed up pre-award process for criticalequipment and plants and increasing focus on supply chainprogramming to optimize order flows.

Management expects that a number of factors will drive costincrease in the Exploration & Production operations overfuture years. Those factors include: (i) the growing complexityand scale of the Company’s planned development projects dueto the circumstance that several planned or ongoing projects willbe executed offshore or in remote/hostile environments where theCompany has been experiencing above-average cost increases; (ii)increasing investing activities that are necessary to supportproduction plateaus at existing fields and counteract naturaldepletion; and (iii) steady trends in costs for purchasingupstream goods and services. Due to those trends, operating costsand depreciation and amortization charges might trend higher infuture years. We believe that a number of actions will help theCompany absorb inflationary and cost pressures including tightercost control, operation efficiency and increasing exposure tolarge fields which enable the Company to benefit from economiesdue to scale of operations. Management also plans to increase theshare of operated production in the Company’s portfolio.Project operatorship enables the Company to better schedule andcontrol project execution, expenditures and timely achievement ofproject milestones. In addition, the Company plans to seek costefficiencies due to greater deployment of proprietarytechnologies designed to maximize the rate of hydrocarbonrecovery from reservoirs and reduce drilling costs as well ascontinuing operational improvement.

 

> 
*Gas & Power*

The outlook for natural gas sales is uncertain in 2013 due tomacroeconomic headwinds, weak demand growth, continuingoversupplies and strong competition. Against this backdrop,management expects to achieve stable natural gas sales in 2013compared to 2012 on a homogeneous basis, i.e. excluding theimpact of the Galp divestment whereby Eni ceased reporting itsshare of Galp sales by mid-2012, having lost significantinfluence over the investee and other changes (91.46 BCM in 2012,including consolidated sales and Eni share of the jointventures).

Management expects that continuing margin pressures will erodethe business’s profitability in 2013 and beyond,particularly in the Italian market. A weaker-than-anticipateddemand growth over the short-term and rising competitivepressures fuelled by ongoing oversupplies in the European marketwill reduce sales opportunities and trigger pricing competitionalso fuelled by rigidities at long-term supply contracts withtake-or-pay clauses. We expect that minimum off-take obligationsin connection with take-or-pay, long-term gas supply contractsand the necessity to minimize the associated financial exposurewill force gas operators to compete more aggressively on pricingin consideration of lower selling opportunities, with negativeeffects on selling prices and profitability. Unit margins areexpected to remain under pressure due to depressed spot prices atcontinental hubs which have become the contractual benchmark inselling formulas outside Italy. In addition, as long as the costof gas supplies to the Group remains indexed to oil prices, theCompany will be exposed to the risk of rising oil prices.

In Italy we expect that gas margins will also weaken, due to anumber of negative catalysts including competitive pressure, anongoing shift to index selling prices to hub benchmarks at largeclient segments, the current level of minimum take volumes atItalian operators which are well above market dimension, andfinally the expected measures to be implemented by the Italianadministration to cut the gas tariffs to residential customers.See also the other risk factors described in Item 3. Thesedrivers will substantially reduce spot prices in the Italianmarket and negatively impact the profitability at our Italianoperations.

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Against this scenario the Company has set the followingpriorities: preserve the operating cash flow during the worstphase of the downturn which is expected to continue well into2013 and recover profitability in subsequent years as a result ofcontract renegotiations and an expected realignment of actual marketimbalances.

The main driver to recover profitability in the Company’sgas marketing business is the renegotiation of pricing and otherconditions of our supply contracts. In fact, take-or-pay supplycontracts include revisions clauses allowing the counterpartiesto renegotiate the economic terms and other conditionsperiodically, in relation to ongoing changes in the gas scenario.Currently management is seeking to renegotiate approximately 80%of the Company’s supplies in order to reduce the purchasecosts by aligning them to the spot prices at continental hubs.This can be achieved by increasing the exposure to spot gas inthe indexation mechanism in the pricing formulas of gas supplied.

The outcome of those renegotiations is uncertain in respect ofboth the amount of the economic benefits that will be ultimatelyachieved and the timing of recognition in profit. Furthermore incase counterparties fail to arrange revised contractual terms,ongoing supply contracts provide a chance to each of them torecur to an arbitration proceeding for a definition of acommercial transaction. This adds to the level of uncertaintysurrounding the outcome of those renegotiations. Considering alsoongoing price renegotiations with Eni long-term clients, resultsof Gas Marketing activities are subject to an increasing rate ofvolatility and unpredictability.

Difficult market conditions in the European gas sector areexpected to continue at least over the next two years. Lookingbeyond, management expects that a number of positive trends mighthelp rebalance the European market. European gas demand isexpected to recover in the long run driven by continuingexpansion in the use of gas in electricity production, alsobenefiting from possible tighter European regulations on GHGemissions and the use of coal in firing power plants; in additionmacroeconomic stability will help demand. Possible reductions inthe role of nuclear energy in crucial countries like Japan,Taiwan and in Europe might support long-term trends in gasdemand. In addition, excess supplies of LNG will be absorbed bycontinuing growing energy needs from the developing economies ofChina, India and other emerging countries in East Asia, theMiddle East and South America. On the supply side, productionrates at European fields are projected to decline, thusincreasing the need for gas import requirements. However, thereexist a number of downside risks to this outlook, particularlythe possible long-term impacts on gas demand associated with thecurrent economic downturn, an ongoing shift to renewable sourcesin the production of electricity and home heating and the otherrisk factors described in Item 3. Also it is possible that theUnited States government might accelerate the process to monetizethe country’s large reserve base of shale gas by givingpermission to reconvert existing re-gasification plants into LNGexport facilities. Finally, new upstream projects might bestarted up in the long run adding to global LNG supplies(particularly the projects to develop gas reserves inMozambique).

In a scenario of continuing weak demand and strongcompetition, management plans to seek to retain theCompany’s market share in Italy and Europe by leveraging onimproved costs in procurement and logistics, and effectivecommercial actions.

The Company intends to increase sales to business clients,including thermoelectric utilities, large industrial accounts andmedium and small enterprises, leveraging on the Company’smultiple presence across various markets and expertise indelivering innovative and tailor-made offering structures to bestsuit customers’ needs by providing complex pricing formulasand flexibility in volumes off-takes (see "Item 4 – Gas& Power"). The second leg of the Company’smarketing effort will address retail customers across Europe witha view to enhancing the existing customer base. Thedrivers to achieve this will be a strategy of customer retentioncentered on brand identity, a distinctive offer and competitivecost to serve; a wide range of sale channels and continuinginnovation in processes, promotion and customer care andpost-sale assistance. Thirdly we are targeting continuingexpansion in the LNG international business by boosting theCompany’s presence in the more profitable markets of the FarEast and South America. Finally, the Gas & Power segment willcontinue to benefit from the stable profit stream coming from thesemi-regulated international, transport activity.

Based on the above outlined trends and industrial actions,management believes that profitability in the Company’s gasmarketing business will gradually recover along the plan period,however the visibility into future results of operations isconstrained by the ongoing volatility in marketing margins. Ourprofitability outlook factors in the expected benefits of ongoingrenegotiations at the Company long-term supply contracts whichthe Company is seeking to finalize over time during the planperiod, as well as other circumstances subject to risks anduncertainties described in Item 3. Management will also seek toimprove profitability by means of cost efficiencies, streamliningbusiness support activities and reducing marketing and generaland administrative costs. In addition, the Company intends tocapture margins improvements by means of trading activities byentering derivative contracts both in the commodity and thefinancial trading venues in order to capture possible favorabletrends in market prices, within the limits set by internalpolicies and guidelines that define the maximum tolerable levelof market risk. As part of this strategy, the Company intends toimprove results of operations by effectively managing theflexibilities associated with the Company’s assets (gassupply contracts, transportation rights, customer base and marketposition). This can be achieved through strategies ofasset-backed trading by entering into arbitrage contracts toleverage on commodity price volatility exploiting the flexibilityprovided by the Company’s assets. For further information onthe market risk and how the 

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Company manages it see "Item 11 – Quantitative andqualitative disclosures about market risk" and "Item 18– note 34 of the Notes to the Consolidated FinancialStatements".

Management believes that the weak industry outlook adverselyaffected by declining demand and large gas availability on themarketplace, the possible evolution of sector-specific regulationand strong competitive pressures represent risk factors to theCompany’s ability to fulfill its minimum take obligationsassociated with its long-term supply contracts. From thebeginning of the downturn in the European gas market to date, Enihas triggered the take-or-pay clause as the Company off-tooklower volumes than its minimum take obligations accumulatingdeferred costs for an amount of euro 2.37 billion (net of limitedamounts of volume make-up) paying the associated cash advances toits gas suppliers. Considering the Company’s outlook for itssales volumes which are expected to remain stable in 2013 and togrow at a moderate pace in the subsequent years, managementintends to adopt the necessary initiatives to mitigate thefinancial risk related to take-or-pay obligations mainly in thedomestic market where the expected volume of demand is lower incomparison with the minimum contracted supplies which Eni andother Italian gas importers are obliged to fulfill. Theinitiatives to mitigate the take-or-pay risk include the benefitsexpected from contract renegotiations which may temporarilyreduce the annual minimum take, and provide more flexibleoff-take conditions such as changes in the delivery point or thepossibility to replace supplies via pipeline with equivalentvolumes of LNG. Based on the Company’s selling programs andhigher flexibility already achieved or to be achieved through theabove mentioned renegotiations, management believes that it islikely that in the next four year plan 2013-2016 Eni will manageto fulfill its minimum take obligations associated with itssupply contracts thus minimizing the risk to liquidity.

These projections could be subject to the risks of furthercontraction in demand or the total addressable market. As to thedeferred costs stated in the balance sheet, based onmanagement’s outlook for gas demand and offer in Europe, andprojections for sales volumes and unit margins in future years,the Company believes that the pre-paid volumes of gas due to theincurrence of the take-or-pay clause will be off-taken in thelong term in accordance with contractual terms thus recoveringthe cash advances paid to suppliers. For more information see thespecific risk paragraph in "Item 3 – Riskfactors".

For a discussion of certain risks relating to the impact ofthe evolution of Italian regulation of the natural gas sector onEni’s take-or-pay contracts see "Item 3 – Riskfactors – Natural gas market".

 

> 
*Refining & Marketing*

Management expects that the trading environment will showlimited improvement throughout the next four years covered by theindustrial plan. This business segment will continue facing achallenging refining outlook due to an anticipated weak demand,excess capacity and risks of margin pressure in case of upwardtrends in oil-linked raw material costs. As a result of thosetrends, we expect refining margins to remain at unprofitablelevels in the foreseeable future. Furthermore, compresseddifferentials between heavy and light crudes will continueeroding Eni’s advantage of having complex refining capacityin place.

In the refining activity Eni will seek to mitigate theexpected impacts of a negative scenario by stepping up effortsto: (i) optimize plant set-up and logistics operations by meansof higher flexibility and process integration; (ii) improveefficiency by cutting fixed and logistics costs and pursue energysavings; (iii) make selective capital expenditure mainly aimed atupgrading conversion capacity and improving asset integrity. Inparticular we expect that the coming online of the EST (EniSlurry Technology) plant in the Sannazzaro refinery aimed at thefull conversion of the barrel will improve the competitiveness ofour refining system; and (iv) implement a project to convert theVenice plant into a "bio-refinery" to produce bio-fuelsand a logistic hub, as well as licensing proprietarytechnologies.

In Marketing activities, we expect a gradual improvement inresults of operations leveraging effective marketing initiativesto retain customers by product innovation and a continuing focuson the quality of service and attractive promotional campaigns,the strength of the Eni brand targeting to complete therebranding of the network, the automation of petrol stations andthe expansion of non-oil activities. Management plans to improvethe efficiency of the retail network by closing low-throughputoutlets and other rationalizations. Our aim is to maintain thecurrent market share in the Italian network market along the planperiod. Retail operations abroad will be developed selectively.

With respect to short-term targets, management expectsrefining throughputs on Eni’s account to remainsubstantially in line with those processed in 2012 (30.01mmtonnes in 2012). This projection assumes the restart of theGela plant in June 2013 and the start-up of the new ESTtechnology conversion plant at Sannazzaro, as well as theshut-down of the Venice plant to start the Green Refineryproject. Retail sales of refined products in Italy and the Restof Europe are expected to be in line with those of 2012 (10.87mmtonnes, 2012 total), net of the effect of the "riparti conEni" marketing campaign which was executed in the summer of2012. Management expects a fall in domestic retail volumes due toan anticipated contraction in domestic demand, the effect ofwhich will be absorbed by the expected increase in sales in theRest of Europe.

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Based on the planned industrial actions, management expectsthe Refining & Marketing business to break even by 2014,assuming the same trading environment as in 2012.

 

> 
*Engineering & Construction*

The Engineering & Construction segment is expected to facea declining profitability in 2013 compared to 2012. This trendwill be negatively affected by the conclusion ofhighly-profitable projects, an anticipated slowdown in orderacquisitions and the start of lower-margin projects in theOnshore and Offshore Engineering & Construction businesses.

Over the four year plan we confirm the segment’s targetof consolidating the global competitive position achieved in theoffshore and onshore businesses and its role as high-qualityniche player in the deepwater drilling business. Saipem willleverage on the enhancement of the EPC(I)-oriented businessmodel, its world-class technology, engineering and deliveringskills, its strong local presence and established relationshipswith other major oil companies and national oil companies toregain profitability. In this light, Saipem aims to strengthenits construction ability particularly in large, highly-complexprojects, in harsh environments, keeping a selective commercialapproach.

 

> 
*Chemicals*

Eni’s petrochemical operations are exposed to volatilecosts of oil-based feedstock and the cyclicality of demand due tothe commoditized nature of Eni’s product portfolio andunderlying weaknesses in the industry. In 2012, Eni’schemicals business reported wider operating losses of euro 485million due to falling commodity demand due to the economicdownturn and unprofitable product margins.

Short-to-medium term prospects of the business remainuncertain due to a weak macroeconomic outlook which will hamper asustainable recovery in demand and ongoing trends in crude oilprices. Against this backdrop management intends to recoverprofitability by progressively reducing the exposure toloss-making commodity chemicals while at the same time developinginnovative and niche productions which are expected to yieldbetter returns, such as elastomers, with targeted productiongrowth of over 60% to 2016 and the expansion of the specialtiessegment including bio-chemicals. Particularly, Eni intends togrow the latter business leveraging on the ongoing project ofconverting its Porto Torres site into a modern plant for themanufacture of eco-compatible chemical products. Management plansto continue efficiency actions and rationalization initiativesinvolving loss-making plants.

Eni is committed to expand its best production lines in emergingmarkets through strategic partnerships to which the Company plansto contribute technological know-how and Eni’s proprietarytechnologies. Management expects to achieve the break-even in thechemical business by end of the plan period also assuming thetrading environment to be  as unfavorable as in 2012.

 

> 
*Capital expenditure plan*

Over the next four years, the Company plans to invest euro56.8 billion in its businesses to support continued organicgrowth; approximately 83%, 2%, 4%, 6% and 4% of planned capitalexpenditures is expected to be directed to the Exploration &Production, Gas & Power, Refining & Marketing,Engineering & Construction and Chemical segments,respectively. The planned amounts of expenditures also includecapital allocation to joint venture projects and associates.

We plan to allocate the largest portion of resources amountingto some euro 39.9 billion to continuing development activities inour Exploration & Production segment to fuel productiongrowth.

Project start-ups and plateau enhancement at existing fieldswill be geographically diversified and executed mainly inNigeria, Angola, Norway, Venezuela, Mozambique, Indonesia andIraq.

Exploration projects will be allocated approximately euro 5.5billion, which are intended to pursue finding projects inwell-established basins and in high potential frontier areasincluding in Angola, Russia, the United States, Nigeria, Egypt,Norway, Indonesia and Libya.

In the Gas & Power business the main investment projectswill target the improvement of combined cycle power plants’flexibility and initiatives in marketing activities in Italy andabroad.

In the Refining & Marketing segment we plan to makeselective capital expenditure mainly targeted to refinery upgradeof conversion capacity and flexibility as well as plantreliability and security. We plan to finalize the project to 

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convert the Venice plant into a "bio-refinery" toproduce bio-fuels. Other capital projects will be directed tonetwork upgrading and the completion of the rebranding of servicestations to the "Eni" logo.

In the Chemical business we plan to selectively expandcapacity in the best positioned lines of business (namelyelastomers), while targeting plant efficiency, reliability andenergy savings in other areas, including the restructuring andupgrading of the loss-making sites. We plan to finalize theproject to convert the Porto Torres plant into a bio-chemicalcomplex and to develop strategic initiatives in the field ofelastomers in emerging markets.

Finally, in the Engineering & Construction businesssegment we plan to complete the construction of certain rigs andvessels and continuously enhance our fleet and logistic centers.

Eni’s capital expenditure program is expected to be inline with the previous industrial plan. Excluding the impact ofthe assumption of a stronger U.S. dollar exchange rateversus the euro compared to the previous industrial plan, thecapital expenditure program shows an increase of euro 1.6billion, or less than 3%. The increase is due to the pursuing ofnew growth opportunities in the Exploration & Productionsegment, including cash-outs dedicated to projects which willcontribute beyond the plan horizon.

In the year 2013, management expects a capital budget in linewith 2012 (euro 12.76 billion in capital expenditure and euro0.57 billion in financial investments in 2012, relating tocontinuing operations). In 2013, management plans to focus on thedevelopment of hydrocarbons reserves in West and North Africa,Norway, Iraq and Venezuela, the exploration projects in WestAfrica, Egypt, the United States and emerging areas, as well asoptimization and selective growth initiatives in other sectors,the start-up of the Green Refinery works in Venice, andelastomers and green businesses in the Chemical sector.

Management expects to pursue strict capital discipline whenassessing individual capital projects. Management assumed an oilprice of 90 $/BBL in the next four-year period; longer-termmanagement assumed an oil price of 90 $/BBL that is adjusted totake account of expected inflation from 2017 onwards. Theinternal rate of return of each project is compared to therelevant hurdle rate, differentiated by business segment andcountry of operation.

These hurdle rates are calculated taking into account: (i) theweighted average cost of capital to the Group. In 2012,management assessed that the cost of capital to the Groupmarginally decreased from the previous year reflecting areduction in the financial parameters used for assessing the costof capital: cost of borrowings to Eni determined by expectedtrends for borrowing spreads and management’s estimatesabout the composition of the Company’s financial debt andreduced risk-free yields reflecting an expected decline in therisk premium of Italy. Those positive factors were partiallyabsorbed by the increased weight of net equity in thedetermination of the cost of capital to the Group as the Board ofDirectors has reassessed the optimal mix betweeninternally-generated funds versus third parties borrowingsfollowing the divestment of Snam. Management notes that theincreased equity risk of Eni shares due to the divestment of abusiness with low volatility had no impact on the assessment ofthe cost of capital used for the capital evaluations in theExploration & Production, Refining & Marketing andChemical segments. This conclusion is supported by the fact thatin the past management adopted discount rates which excluded themitigating effect of the lower volatility of Snam in theEni’s portfolio; (ii) an appreciation of the country riskwhich factors in the perceived level of risk associated with eachcountry of operations in terms of current trends and conditionsin the macroeconomic, business, regulatory and socio-politicalframework as well as the consensus outlook; and (iii) a premiumfor the business risk.

 

> 
*Liquidity and leverage*

In the foreseeable future, management is focused onpreserving a solid balance sheet and strengthening theCompany’s financial structure. Following the divestment of asignificant interest in Snam and deconsolidation of theinvestee’s net borrowings as well as the transactioninvolving Eni’s interest in Galp, the Group achieved asubstantial improvement in its leverage at 2012 year end down to0.25. Management believes that this improved financial positionis consistent with the Company’s new business profile, whichfeatures greater exposure to the Exploration & Productionsegment. See "Item 4 – Business developments".

For planning purposes, management projected the Company’sexpected cash flows assuming a scenario of Brent prices at 90$/BBL for the years 2013-2016 to assess the financialcompatibility of its capital expenditure programs and dividendpolicy with internal targets of ratio of total equity to netborrowing. Under that assumption, in 2013 the ratio of netborrowings to total equity is projected to be substantially inline with the level achieved at the end of 2012 leveraging on cashflows from operations and portfolio management.

Going forward, management currently expects to seek tomaintain this ratio within a target range of 0.1-0.3. This rangewill allow us to absorb temporary fluctuations in oil prices, themarket environment and business results. The projected futurecash flow from operations are estimated to fully fund capitalexpenditure plans. Furthermore management expects to deliver morethan euro 10 billion of additional cash flows from assetdisposal, mainly the divestment of the residual interest of Eniin Snam and Galp, the announced divestment of the 28.57% interestin Eni 

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East Africa and other marginal assets in the Exploration &Production segment. See "Item 5 – Materialdevelopments". Our cash flow projections are based on ourBrent scenario of 90 $/BBL flat in the next four years. We notethat the Brent price in the period January 1 to March 28, 2013 was112.60 $/BBL on average. We estimated that our cash flow fromoperations may improve by around euro 120 million for each dollarincrease in Brent prices on a yearly basis.

For planning purposes, management assumed an average exchangerate of approximately 1.30 U.S. dollars per euro in the 2013-2016period. Given the sensitivity of Eni’s results of operationsto movements in the euro versus the U.S. dollar exchange rate,trends in the currency market represent a factor of risk anduncertainty. See "Item 3 – Risk factors".

 

> 
*Dividend policy*

Management plans to pay a dividend of euro 1.08 a share forfiscal year 2012 subject to approval from the GeneralShareholders’ Meeting scheduled for May 10, 2013. Of this,euro 0.54 per share was paid in September 2012 as an interimdividend with the balance of euro 0.54 per share expected to bepaid in late May 2013. The dividend for fiscal year 2012represents an increase of 4% compared to the 2011 dividend.

Given the Company’s changed business profile whichentails both more growth options and more volatile results, aswell as an improved balance sheet, management plans to distributecash to shareholders by means of a revised dividend policy andshare repurchases.

The new dividend policy contemplates a progressive, growingdividend at a rate which is expected to be determinedyear-to-year taking into account Eni’s underlying earningsand cash flow growth as well as capital expenditure requirementsand the targeted financial structure. Management will alsoevaluate the achievement of the targeted production levels in theExploration & Production segment, the status ofrenegotiations at gas long-term supply contracts in the Gas& Power segment and the delivery on efficiency gains inthe downstream businesses. This dividend policy is based onmanagement’s planning assumptions for oil prices at 90 $/BBLin the 2013-2016 period and a gradual European demand recovery.

In future years, management expects to continue paying interimdividends for each fiscal year, with the balance for thefull-year dividend paid in the following year.

Management plans to commence a new buyback program, which hasbeen authorized by the Shareholders Meeting for a total amount ofeuro 6 billion, at management’s sole discretion and when anumber of conditions are met. These include, but are not limitedto, a level of leverage which management assesses to be soundenough given market conditions and well within our target rangelimit of 0.3, and full funding of capital expenditurerequirements and dividends throughout the plan period. In 2013,management would consider the activation of the buyback program,provided oil prices remain at current levels and Eni makes goodprogress on its business and cash flow targets.

The expectations described above are subject to risks,uncertainties and assumptions associated with the oil and gasindustry, and economic, monetary and political developments inItaly and globally that are difficult to predict. There are anumber of factors that could cause actual results anddevelopments to differ materially, including, but not limited to,political instability in Libya and other countries, crude oil andnatural gas prices; demand for oil and gas in Italy and othermarkets; developments in electricity generation; pricefluctuations; drilling and production results; refining marginsand marketing margins; currency exchange rates; general economicconditions; political and economic policies and climates incountries and regions where Eni operates; regulatorydevelopments; the risk of doing business in developing countries;governmental approvals; global political events and actions,including war, terrorism and sanctions; project delays; materialdifferences from reserves estimates; inability to find anddevelop reserves; technological development; technicaldifficulties; market competition; the actions of field partners,including the inability of joint venture partners to fund theirshare of operating or developments activities; industrial actionsby workers; environmental risks, including adverse weather andnatural disasters; and other changes to business conditions.Please refer to "Item 3 – Risk factors".

 

> 
***Off-balance sheet arrangements***

Eni has entered into certain off-balance sheet arrangements,including guarantees, commitments and risks, as described in"Item 18 – note 34 of the Notes to the ConsolidatedFinancial Statements". Eni’s principal contractualobligations, including commitments under take-or-pay orship-or-pay contracts in the gas business, are described under"Contractual Obligations" below. See the Glossary for adefinition of take-or-pay or ship-or-pay clauses.

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Off-balance sheet arrangements comprise those arrangementsthat may potentially impact Eni’s liquidity, capitalresources and results of operations, even though sucharrangements are not recorded as liabilities under generallyaccepted accounting principles. Although off-balance sheetarrangements serve a variety of Eni’s business purposes, Eniis not dependent on these arrangements to maintain its liquidityand capital resources; nor is management aware of anycircumstances that are reasonably likely to cause the off-balancesheet arrangements to have a material adverse effect on thecompany’s financial condition, results of operations,liquidity or capital resources.

Eni has provided various forms of guarantees on behalf ofunconsolidated subsidiaries and affiliated companies, mainlyrelating to guarantees for loans, lines of credit and performanceunder contracts. In addition, Eni has provided guarantees on thebehalf of consolidated companies, primarily relating toperformance under contracts. These arrangements are described in"Item 18 – note 34 - Guarantees, commitments and risks– of the Notes to the Consolidated FinancialStatements".

 

> 
***Contractual obligations***

Amounts in the table refer to expected payments, undiscounted,by period under existing contractual obligations commitments.

|   | **Maturity        year** |
|--------|--------------------------|
|   |                          |

|   | **Total** |   | **2013** |   | **2014** |   | **2015** |   | **2016** |   | **2017** |   | **2018 and thereafter** |
|--------|-----------|--------|----------|--------|----------|--------|----------|--------|----------|--------|----------|--------|-------------------------|
|   |           |   |          |   |          |   |          |   |          |   |          |   |                         |

|   | **(euro        million)** |
|--------|---------------------------|

| **Total debt**                                                                           |   | **25,429**  |   | **5,703**  |   | **2,222**  |   | **4,030**  |   | **2,182**  |   | **2,967**  |   | **8,325**   |
|------------------------------------------------------------------------------------------|--------|-------------|--------|------------|--------|------------|--------|------------|--------|------------|--------|------------|--------|-------------|
| Long-term        finance debt                                                            |   | 21,997      |   | 2,555      |   | 2,090      |   | 3,941      |   | 2,180      |   | 2,956      |   | 8,275       |
| Short-term finance debt                                                                  |   | 2,223       |   | 2,223      |   |       |   |       |   |       |   |       |   |        |
| Fair value        of derivative instruments                                              |   | 1,209       |   | 925        |   | 132        |   | 89         |   | 2          |   | 11         |   | 50          |
| **Interest on finance debt**                                                             |   | **4,693**   |   | **840**    |   | **725**    |   | **622**    |   | **550**    |   | **465**    |   | **1,491**   |
| **Guarantees        to banks**                                                           |   | **212**     |   | **212**    |   |       |   |       |   |       |   |       |   |        |
| **Non-cancelable operating lease obligations**(1)                                        |   | **2,571**   |   | **722**    |   | **515**    |   | **323**    |   | **250**    |   | **201**    |   | **560**     |
| **Decommissioning        liabilities**(2)                                                |   | **15,048**  |   | **174**    |   | **198**    |   | **85**     |   | **259**    |   | **555**    |   | **13,777**  |
| **Environmental liabilities**(3)****                                                     |   | **1,777**   |   | **362**    |   | **375**    |   | **260**    |   | **160**    |   | **69**     |   | **551**     |
| **Purchase        obligations**(4)                                                       |   | **263,753** |   | **20,761** |   | **19,486** |   | **19,394** |   | **17,815** |   | **16,482** |   | **169,815** |
| Natural gas to be purchased in connection with        take-or-pay contracts (5)          |   | 247,324     |   | 18,463     |   | 17,763     |   | 17,840     |   | 16,377     |   | 15,094     |   | 161,787     |
| Natural        gas to be transported in connection with ship-or-pay        contracts (5) |   | 12,105      |   | 1,746      |   | 1,303      |   | 1,263      |   | 1,159      |   | 1,119      |   | 5,515       |
| Other take-or-pay and ship-or-pay obligations                                            |   | 1,715       |   | 171        |   | 170        |   | 163        |   | 156        |   | 146        |   | 909         |
| Other        purchase obligations (6)                                                    |   | 2,609       |   | 381        |   | 250        |   | 128        |   | 123        |   | 123        |   | 1,604       |
| **Other obligations**(7)                                                                 |   | **139**     |   | **4**      |   | **3**      |   | **3**      |   | **3**      |   | **3**      |   | **123**     |
| *of        which:*                                                                       |   |        |   |       |   |       |   |       |   |       |   |       |   |        |
| *- Memorandum of intent relating to Val        d’Agri*                              |   | *139*       |   | *4*        |   | *3*        |   | *3*        |   | *3*        |   | *3*        |   | *123*       |
|                                                                                     |   |             |   |            |   |            |   |            |   |            |   |            |   |             |
| **Total**                                                                                |   | **313,622** |   | **28,778** |   | **23,524** |   | **24,717** |   | **21,219** |   | **20,742** |   | **194,642** |
|                                                                                     |   |             |   |            |   |            |   |            |   |            |   |            |   |             |

----

| (1) |    | Operating        leases primarily regarded assets for drilling activities,        time charter and long-term rentals of vessels, lands,        service stations and office buildings. Such leases did        not include renewal options. There are no significant        restrictions provided by these operating leases which        limit the ability of the Company to pay dividends, use        assets or to take on new borrowings.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |
|-----|--------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| (2) |    | Represents        the estimated future costs for the decommissioning of oil        and natural gas production facilities at the end of the        producing lives of fields, well-plugging, abandonment and        site restoration.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |
| (3) |    | Environmental        liabilities do not include the environmental charge        amounting to euro 1,109 million for the proposal to the        Italian Ministry for the Environment to enter into a        global transaction related to nine sites of national        interest because the dates of payment cannot be        reasonably estimated.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |
| (4) |    | Represents        any agreement to purchase goods or services that is        enforceable and legally binding and that specifies all        significant terms.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |
| (5) |    | Such        arrangements include non-cancelable, long-term        contractual obligations to secure access to supply and        transport of natural gas, which include take-or-pay        clauses whereby the Company obligations consist of        offtaking minimum quantities of product or service or        paying the corresponding cash amount that entitles the        Company to off-take the product in future years. Future        obligations in connection with these contracts were        calculated by applying the forecasted prices of energy or        services included in the four-year business plan approved        by the Company’s Board of Directors and on the basis        of the long-term market scenarios used by Eni for        planning purposes to minimum take and minimum ship        quantities. See "Item 4 – Gas & Power        – Natural gas purchases" and "Item 3        – Risk factors – Liberalization of the Italian        natural gas market" for a discussion of nature and        importance of Eni’s take-or-pay contracts and the        related risks from the evolving regulatory environment        that could negatively impact Eni’s results. |
| (6) |    | Mainly refers        to arrangements to purchase capacity entitlements at        certain re-gasification facilities in the United States        of euro 2,113 million.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |
| (7) |    | In addition        to these amounts, Eni has certain obligations that are        not contractually fixed as to timing and amount,        including contributions to defined benefit pension plans        (see "Item 18 – note 22 of the Notes to the        Consolidated Financial Statements").                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |

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The table below summarizes Eni’s capitalexpenditure commitments for property, plant and equipment as ofDecember 31, 2012. Capital expenditures are considered to becommitted when the project has received the appropriate level ofinternal management approval. Such costs are included in theamounts shown.

|   | **Total** |   | **2013** |   | **2014** |   | **2015** |   | **2016** |   | **2017 and thereafter** |
|--------|-----------|--------|----------|--------|----------|--------|----------|--------|----------|--------|-------------------------|
|   |           |   |          |   |          |   |          |   |          |   |                         |

|   | **(euro        million)** |
|--------|---------------------------|

| Committed on major projects     |   | 37,125     |   | 6,718      |   | 7,680      |   | 6,897     |   | 3,991     |   | 11,839     |
|---------------------------------|--------|------------|--------|------------|--------|------------|--------|-----------|--------|-----------|--------|------------|
| Other        committed projects |   | 21,902     |   | 6,940      |   | 3,782      |   | 1,584     |   | 1,100     |   | 8,496      |
|                            |   |            |   |            |   |            |   |           |   |           |   |            |
| **Total**                       |   | **59,027** |   | **13,658** |   | **11,462** |   | **8,481** |   | **5,091** |   | **20,335** |
|                            |   |            |   |            |   |            |   |           |   |           |   |            |

> 
 

***Liquidity risk***

Liquidity risk is the risk that suitable sources of fundingfor the Group may not be available, or the Group is unable tosell its assets on the market place as to be unable to meetshort-term finance requirements and to settle obligations. Such asituation would negatively impact Group results as it wouldresult in the Company incurring higher borrowing expenses to meetits obligations or under the worst of conditions the inability ofthe Company to continue as a going concern. At present, the Groupbelieves it has access to sufficient funding and has also bothcommitted and uncommitted borrowing facilities to meet currentlyforeseeable borrowing requirements. For a description of how theCompany manages the liquidity risk see "Item 18 – note34 of the Notes to the Consolidated Financial Statements".

At December 31, 2012, Eni maintained short-term committed anduncommitted unused borrowing facilities of euro 12,173 million,of which euro 1,241 million were committed, and long-termcommitted unused borrowing facilities of euro 6,928 million.These facilities bore interest rates that reflected prevailingmarket conditions. Fees charged for unused facilities wereimmaterial. Eni has in place a program for the issuance of EuroMedium Term Notes up to euro 15 billion, of which about euro 12.3billion were drawn as of December 31, 2012.

 

> 
***Working capital***

Management believes that, taking into account unutilizedcredit facilities, Eni’s credit rating and access to capitalmarkets, Eni has sufficient working capital for its foreseeablerequirements.

 

> 
***Credit risk***

Credit risk is the potential exposure of the Group to lossesin case counterparties fail to perform or pay amounts due.

For a description of how the Company manages the credit risksee "Item 18 – note 34 of the Notes to the ConsolidatedFinancial Statements".

For information about credit losses in 2012 and the allowancefor doubtful accounts see "Item 18 – note 9 of theNotes to the Consolidated Financial Statements".

 

> 
***Market risk***

In the normal course of its operations, Eni is exposed tomarket risks deriving from fluctuations in commodity prices andchanges in the euro versus other currencies exchange rates,particularly the U.S. dollar, and in interest rates. For adescription of how the Company manages the Market risk see"Item 18 – note 34 of the Notes to the ConsolidatedFinancial Statements".

 

> 
***Research and development***

For a description of Eni’s research and developmentoperations in 2012, see "Item 4 – Research anddevelopment".

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**Item 6. DIRECTORS, SENIOR MANAGEMENT ANDEMPLOYEES**

**Directors and Senior Management**

The following table lists the Company’s Board ofDirectors as at April 2013:

| **Name**           |   | **Position** |   | **Year        elected or appointed** |   | **Age** |
|--------------------|--------|--------------|--------|--------------------------------------|--------|---------|
|                    |   |              |   |                                      |   |         |
| Giuseppe Recchi    |   | Chairman     |   | 2011                                 |   | 49      |
| Paolo Scaroni      |   | CEO          |   | 2005                                 |   | 66      |
| Mario Resca        |   | Director     |   | 2002                                 |   | 67      |
| Paolo Marchioni    |   | Director     |   | 2008                                 |   | 43      |
| Francesco Taranto  |   | Director     |   | 2008                                 |   | 72      |
| Carlo Cesare Gatto |   | Director     |   | 2011                                 |   | 71      |
| Alessandro Lorenzi |   | Director     |   | 2011                                 |   | 64      |
| Roberto Petri      |   | Director     |   | 2011                                 |   | 63      |
| Alessandro Profumo |   | Director     |   | 2011                                 |   | 56      |
|                    |   |              |   |                                      |   |         |

In accordance with Article 17.1 of Eni’s By-laws, theBoard of Directors is made up of 3 to 9 members.

The current Board of Directors was elected by the ordinaryShareholders’ Meeting held on May 5, 2011, which alsoestablished the number of Directors at nine for a term of threefinancial years. The Board’s term will therefore expire withthe Shareholders’ Meeting called to approve the financialstatements for the year ending December 31, 2013.

The Board of Directors is appointed by means of a slate votingsystem: slates may be presented by the shareholders representingat least 0.5% of share capital. One third of the Board isappointed from among the candidates of the non-controllingshareholders.

Giuseppe Recchi, Paolo Scaroni, Carlo Cesare Gatto, PaoloMarchioni, Roberto Petri and Mario Resca were candidates of theMinistry of the Economy and Finance. Alessandro Lorenzi,Alessandro Profumo and Francesco Taranto were candidates ofinstitutional investors (non-controlling shareholders).

The Shareholders’ Meeting appointed Giuseppe Recchi asthe Chairman of the Board of Directors and, on May 6, 2011, theBoard appointed Paolo Scaroni as the Chief Executive Officer ofthe Company.

On the basis of Italian laws regulating the special powers ofthe State (see "Item 10 – Stock ownership limitationand voting rights restrictions"), the Minister of theEconomy and Finance, in agreement with the Minister for EconomicDevelopment, may appoint another member of the Board ofDirectors, without voting rights, in addition to those appointedby the Shareholders’ Meeting. On the occasion of the lastBoard appointment, the Minister of the Economy and Finance optednot to exercise that power. Law Decree No. 21 of March 15, 2012,ratified with amendments by Law No. 56 of May 11, 2012, modifiedItalian legislation governing the special powers of the State tocomply with European rules. The previous provisions (Article 2 ofLaw Decree No. 332/1994 ratified by Law No. 474/1994 and itsimplementing decrees), as well as the provisions of the By-lawswhich are inconsistent with the new rules, will be repealed bythe last of the implementing ministerial regulations in the areasof energy, transport and communications. At the date of thefiling of the present Form, the ministerial regulations had notbeen issued. Among the provisions to be repealed, those governingenforcement of Law No. 474/1994 related to Eni have beenexpressly identified. Albeit with some amendments, the provisionsregarding the stock ownership limitations and voting rightsrestrictions pursuant to Article 3 of Law No. 474/1994 are stillin force.

The following provides details on the personal andprofessional profiles of the Directors.

**Giuseppe Recchi** was born in 1964 and has been Chairmanof the Board of Eni since May 2011. He is also Vice Chairman ofGE Capital Interbanca SpA; a member of the board of directors andof the audit committee of Exor SpA; a member of the EuropeanAdvisory Board of Blackstone and a member of the MassachusettsInstitute of Technology E.I. External Advisory Board. He is alsoa member of the Italian Corporate Governance Committee, of theexecutive committees of Confindustria (where he chairs theForeign Investment Committee), Assonime (Association of ItalianJoint Stock Companies), Aspen Institute Italia; a member of theboard of directors of FEEM-Eni Enrico Mattei Foundation, of theItalian Institute of Technology and of the LUISS Business SchoolAdvisory Board. He is co-Chair of the B20 Task Force on ImprovingTransparency and Anti-Corruption and director of the WorldEconomic Forum Partnering Against Corruption Initiative. He holdsa degree in Engineering from the Polytechnic of Turin. In 1989 hestarted his career as entrepreneur at Recchi SpA, a generalcontractor active in 25 countries in the construction of 

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high-tech public infrastructure. Since 1994 he has served asExecutive Chairman of Recchi America Inc., the U.S. branch ofRecchi Group. In 1999 he joined General Electric, where he heldseveral management positions in Europe and in the United States.He served as Director of GE Capital Structure Finance Group;Managing Director for Industrial M&A and Business Developmentfor GE EMEA; President & CEO of GE Italy. Until May 2011 hewas President & CEO of GE South Europe. Mr. Recchi was amember of the Organizing Committee for the Rome Candidacy for the2020 Olympic Games, a member of the board of Permasteelisa SpA amember of the Advisory Board of Invest Industrial (privateequity) and visiting professor in Structured Finance at TurinUniversity.

**Paolo Scaroni** has been Chief Executive Officer of Enisince June 2005. He is currently a Non-Executive Director ofAssicurazioni Generali, Non-Executive Deputy Chairman of theLondon Stock Exchange Group and a Non-Executive Director ofVeolia Environnement. He also sits on the Board of Overseers ofColumbia Business School and of Fondazione Teatro alla Scala.After receiving a degree in economics and business from LuigiBocconi University in Milan in 1969, he worked for three years atChevron, before obtaining an MBA from Columbia University, NewYork, and continuing his career at McKinsey. In 1973 he joinedSaint Gobain, where he held a series of management positions inItaly and abroad, until his appointment as head of the glassdivision in Paris in 1984. From 1985 to 1996 he was deputychairman and CEO of Techint. In 1996 he moved to the UK andserved as CEO of Pilkington until May 2002. From May 2002 to May2005 he served as Chief Executive Officer and General Manager ofEnel. From 2005 to July 2006 he was Chairman of Alliance Unichem.In May 2004 he was decorated as *Cavaliere del Lavoro* ofthe Italian Republic. In November 2007 he was decorated as an *Officier*of the French*Légion d’Honneur*.

**Mario Resca** was born in 1945 and has been a Director ofEni since May 2002. He graduated from the Università LuigiBocconi of Milan with a degree in Economics and Business. He isalso Chairman of Confimprese, Deputy Chairman of SestoImmobiliare SpA and Director of Mondadori SpA. After graduatinghe joined Chase Manhattan Bank. In 1974 he was appointed managerof Saifi Finanziaria (Fiat Group) and from 1976 to 1991 he was apartner at Egon Zehnder. In this period he was appointed Directorof Lancôme Italia and of companies belonging to the RCS Corrieredella Sera Group and the Versace Group. From 1995 to 2007 he wasChairman and Chief Executive Officer of McDonald’s Italia.He was also Chairman of Sambonet SpA and Kenwood Italia SpA, afounding partner of Eric Salmon & Partners, Chairman of theAmerican Chamber of Commerce, General Director of ItalianHeritage and Antiquities in the Ministry of Cultural Heritage andActivities and Chairman of Convention Bureau Italia SpA. He wasdecorated as a *Cavaliere del Lavoro* in June 2002.

**Paolo Marchioni** was born in 1969 and has been aDirector of Eni since June 2008. He is a lawyer specializing incriminal and administrative law, and has been admitted to arguebefore the Supreme Court and the higher Courts. He has beenChairman of the Board of Directors of Finpiemonte partecipazioniSpA since August 2010. He serves as a consultant to governmentagencies and business organizations on business, corporate,administrative and local government law. He was Mayor of Baveno(Verbania) from April 1995 to June 2004 and Chairman of theAssembly of Mayors of Con.Ser.Vco from September 1995 to June1999. Until June 2004 he was a member of the Assembly of Mayorsof the Asl 14 health authority, the steering committee of theVerbania health district, the Assembly of Mayors of the ValleOssola waste water consortium, the Assembly of Mayors of theVerbania social services consortium. From April 2005 to January2008 he was a member of the Stresa (VB) city council. FromOctober 2001 to April 2004 he was a Director of CIM SpA of Novara(merchandise interport centre) and from December 2002 to December2005 a Director and executive committee member of FinpiemonteSpA. From June 2005 to June 2008 he was a Director of Consip SpA.He was Vice President and Provincial Councillor in charge of thebudget, financial reporting, property, legal affairs andproductive activities of the Province of Verbano-Cusio-Ossolafrom June 2009 to October 2011. He was Director of the ProvincialBoard of the Province of Verbano-Cusio-Ossola from October 2011to November 2012.

**Francesco Taranto** was born in 1940 and has been aDirector of Eni since June 2008. He is currently Vice Chairman ofBanca CR Firenze SpA (Cassa di Risparmio di Firenze SpA). He isalso a Director and member of the Executive Committee ofRimorchiatori Riuniti SpA. He started working in 1959 in a stockbrokerage in Milan. From 1965 to 1982, he worked at Banco diNapoli as deputy manager of the stock market and securitiesdepartment. He held a series of management positions in the assetmanagement field, notably as manager of securities funds atEurogest from 1982 to 1984, and General Manager of InterbancariaGestioni from 1984 to 1987. After moving to the Prime group (1987to 2000), he was Chief Executive Officer of the parent companyfor an extended period of time. He was Director of ERSEL S.I.M.,member of the steering council of Assogestioni and of theCommittee for the Corporate Governance of listed companies formedby Borsa Italiana. He was a Director of Enel from October 2000 toJune 2008.

**Carlo Cesare Gatto** was born in 1941 and has been aDirector of Eni since May 2011. He graduated from the Universityof Turin with a degree in Economics and Business. He is acertified public auditor. He is currently Chairman of the Boardof Statutory Auditors of RAI SpA, Natuzzi SpA, Difesa ServiziSpA, Rainet SpA and Director of Arcese Trasporti SpA. He hastaught courses in Finance, Administration and Control at theIsvor Fiat SpA training institute. In 1968 he was hired byImpresit as Chief Accountant, where he managed the financedepartment of the local branch in Jordan. He joined the FiatGroup in 1969 where over the years he held a series positions ofincreasing responsibility in the area of finance, administrationand control. From 1979 to 1990 he was in charge of FinancialReporting at the Fiat Group and was also responsible forcontrolling of the transport companies of the Fiat Groupoperating public transport concessions (Sapav, Sadem, Sita) andoversaw their subsequent sale. In 1990 he was appointed JointManager of Finance and Control of the Fiat Group, beforebecoming, in 1998, Chief Administration Officer (CAO). From 2000to 

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2004, he was Chief Executive Officer and Deputy Chairman ofBusiness Solutions, a new sector created by Fiat to providebusiness services. In 1993 he was the Italian Representative to theEuropean Commission for the fiscal harmonization of the MemberStates. In 1992 he was decorated as *Cavaliere Ordine al Merito*of the Italian Republic and, in 1995, an *Ufficiale Ordine alMerito* of the Italian Republic.

**Alessandro Lorenzi** was born in 1948 and has been aDirector of Eni since May 2011. He is currently a foundingpartner of Tokos Srl, a securities investment consulting firm,and Chairman of Società Metropolitana Acque Torino SpA, and aDirector of Ersel SIM SpA, Millbo SpA and Sicme Motori Srl. Hebegan his career at SAIAG SpA, in the Administration and Controlarea. In 1975 he joined Fiat Iveco SpA where he held a series ofpositions: Controller of Fiat V.I. SpA, Head of Administration,Finance and Control, head of Personnel of Orlandi SpA in Modena(1977-1980) and Project Manager (1981-1982). In 1983 he joinedthe GFT Group, where he was head of Administration, Finance andControl of Cidat SpA, a GFT SpA subsidiary (1983-1984), CentralController of the GFT Group (1984-1988), Head of Finance andControl of the GFT Group (1989-1994) and Managing Director of GFTSpA, with ordinary and extraordinary powers over all operatingactivities (1994-1995). In 1995 he was appointed Chief ExecutiveOfficer of SCI SpA, where he oversaw the restructuring process.In 1998 he was appointed Central Manager and, subsequently,Director of Ersel SIM SpA, a position he held until June 2000. In2000 he became Central Manager of Planning and Control at theFerrero Group and General Manager of Soremartec, the technicalresearch and marketing company of the Ferrero Group. In May 2003he was appointed CFO of the Coin Group. In 2006 he became CentralCorporate Manager at Lavazza SpA, serving as a member of theBoard of Directors from 2008 to June 2011.

**Roberto Petri** was born in 1949 and has been a Directorof Eni since May 2011. He graduated with a degree in law from theUniversità degli Studi "Gabriele D’Annunzio" ofChieti and Pescara. He has been member of the Board of Directorsof the Ravenna Festival since 2007 and he has been Chairman ofItalimmobili Srl since 2011. In 1976 he was hired by BancaNazionale del Lavoro (BNL) where he held a series of positions:head of the "Lending Advisory" of BNL in Busto Arsizio(1982), Deputy Manager for the industrial division at the BNLbranch in Ravenna (1983-1987), Area Chief of BNL in Venice(1987-1989) and Joint Manager of the central office of BNL inRome (1989-1990). In 1990 he was appointed commercial manager atBanca Popolare and in 1994 transferred, holding the sameposition, to Cassa di Risparmio di Ravenna Group (Carisp Ravennaand Banca di Imola). From 2001 to 2006 he was Chief Secretary tothe Under-Secretary of Defence, where he was mainly involved inthe Defence Ministry’s contacts with industry andinternational relations. From 2008 to 2011 he was Chief Secretaryof the Minister of Defence. From 2003 to 2006 he was a Directorof Fintecna SpA and from 2005 to 2008 a Director of FinmeccanicaSpA.

**Alessandro Profumo** was born in 1957 and has beenDirector of Eni since May 2011. He received a degree in BusinessAdministration from Università Luigi Bocconi of Milan. He iscurrently Chairman of Banca Monte dei Paschi di Siena, of AppealStrategy & Finance Srl and member of the Supervisory Board ofSberbank. He is also member of the Board of Directors of theBocconi University in Milan. He began his career in 1977 at theBanco Lariano, becoming Branch Manager in Milan. In 1987 hejoined McKinsey where he was Project Manager in the strategy areafor the finance sector. In 1989 he was appointed Head ofrelations with financial institutions and integrated developmentprojects at Bain, Cuneo e Associati firm (now Bain & Co). In1991 he left the consulting field to join RAS, Riunione Adriaticadi Sicurtà, where he was given responsibility, as GeneralManager, for the banking and parabanking sectors. He was also incharge of expanding the revenues of that group’s bank and ofthe other group companies operating in the field of assetmanagement. In 1994 he joined Credito Italiano as Joint CentralManager, with responsibility for Programming and Control,becoming General Manager in 1995. In 1997 he was appointed ChiefExecutive Officer of Credito Italiano and subsequently ofUnicredit, a position he held until September 2010. On aninternational level he was Chairman of the European BankingFederation in Bruxelles and Chairman of the Internal MonetaryConference Washington. In May 2004 he was decorated as a *Cavalieredel Lavoro*.

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> 
*Senior Management*

The table below sets forth the composition of Eni’sSenior Management as at December 31, 2012. It includes the CEO,as General Manager of Eni SpA, the Chief Operating Officers, theChief Financial Officer, the Chief Corporate Operations Officerand the Executives who report directly to the CEO.

| **Name** |   | **Management        position** |   | **Year first appointed        to current         position** |   | **Total number        of years of service at Eni** |   | **Age** |
|----------|--------|--------------------------------|--------|-------------------------------------------------------------|--------|----------------------------------------------------|--------|---------|
|          |   |                                |   |                                                             |   |                                                    |   |         |

| Paolo Scaroni          |   | General Manager of Eni                                                                             |   | 2005   |   | 8      |   | 66     |
|------------------------|--------|----------------------------------------------------------------------------------------------------|--------|--------|--------|--------|--------|--------|
|                   |   |                                                                                               |   |   |   |   |   |   |
| Claudio Descalzi       |   | Exploration & Production        Chief Operating Officer                                        |   | 2008   |   | 32     |   | 57     |
|                   |   |                                                                                               |   |   |   |   |   |   |
| Angelo Fanelli         |   | Refining & Marketing        Chief Operating Officer                                            |   | 2010   |   | 32     |   | 60     |
|                   |   |                                                                                               |   |   |   |   |   |   |
| Umberto Vergine (a)    |   | Gas & Power Chief        Operating Officer                                                     |   | 2012   |   | 29     |   | 55     |
|                   |   |                                                                                               |   |   |   |   |   |   |
| Alessandro Bernini (b) |   | Chief Financial Officer                                                                            |   | 2008   |   | 17     |   | 52     |
|                   |   |                                                                                               |   |   |   |   |   |   |
| Massimo Mondazzi (c)   |   | Chief Financial Officer                                                                            |   | 2012   |   | 21     |   | 49     |
|                   |   |                                                                                               |   |   |   |   |   |   |
| Salvatore Sardo        |   | Chief Corporate Operations        Officer                                                          |   | 2008   |   | 8      |   | 60     |
|                   |   |                                                                                               |   |   |   |   |   |   |
| Stefano Lucchini       |   | International Relations and        Communication        Senior Executive Vice President            |   | 2005   |   | 8      |   | 50     |
|                   |   |                                                                                               |   |   |   |   |   |   |
| Massimo Mantovani      |   | General Counsel Legal        Affairs         Senior Executive Vice President                       |   | 2006   |   | 20     |   | 49     |
|                   |   |                                                                                               |   |   |   |   |   |   |
| Roberto Ulissi         |   | Company Secretary         Corporate Affairs and Governance         Senior Executive Vice President |   | 2006   |   | 7      |   | 50     |
|                   |   |                                                                                               |   |   |   |   |   |   |
| Marco Petracchini      |   | Internal Audit        Senior Executive Vice President                                              |   | 2011   |   | 14     |   | 48     |
|                   |   |                                                                                               |   |   |   |   |   |   |
| Marco Alverà      |   | Trading         Senior Executive Vice President (*)                                                |   | 2012   |   | 8      |   | 37     |
|                   |   |                                                                                               |   |   |   |   |   |   |
| Salvatore Meli         |   | Research and Technological        Innovation         Executive Vice President                      |   | 2011   |   | 31     |   | 59     |
|                   |   |                                                                                               |   |   |   |   |   |   |
| Leonardo Bellodi (d)   |   | Government Affairs         Executive Vice President                                                |   | 2012   |   | 7      |   | 47     |
|                   |   |                                                                                               |   |   |   |   |   |   |
| Stefano Leofreddi (e)  |   | Integrated Risk Management        Senior Vice President                                            |   | 2012   |   | 27     |   | 52     |
|                   |   |                                                                                               |   |   |   |   |   |   |
| Raffaella Leone        |   | Executive Assistant to the        CEO                                                              |   | 2005   |   | 8      |   | 50     |
|                        |   |                                                                                                    |   |        |   |        |   |        |

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| (a) |    | Since        December 5, 2012, Paolo Scaroni has been Gas & Power        Chief Operating Officer ad interim. |
|-----|--------------|------------------------------------------------------------------------------------------------------------------|
| (b) |    | Until        December 5, 2012.                                                                                   |
| (c) |    | As of        December 5, 2012.                                                                                   |
| (d) |    | As of July 2,        2012.                                                                                       |
| (e) |    | As of April        10, 2012.                                                                                     |
| (*) |    | As of March        15, 2013, the Department has been renamed        "Optimization & Trading".      |

The Chief Operating Officers, the Chief Financial Officer, theChief Corporate Operations Officer and the Executive Assistant tothe CEO, the Senior Executive Vice Presidents and the GovernmentAffairs Executive Vice President and the Chief Executive Officerof Versalis SpA7 are permanent members of theManagement Committee8, which advises and supports theCEO. The Chief Operating Officers, the Chief Financial Officerand the Senior Executive Vice President of the Internal AuditDepartment are appointed by the Board of Directors, acting upon aproposal of the CEO in agreement with the Chairman. Other membersof Eni’s senior management are appointed by Eni’s CEOand may be removed without cause, except for the Senior ExecutiveVice President of the Internal Audit Department and the CompanySecretary, who are appointed by the Board of Directors, thelatter upon a proposal of the Chairman.

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| (7) |    | In May 2012,        Polimeri Europa SpA changed its company name to Versalis        SpA.                                                                                 |
|-----|--------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| (8) |    | The Internal        Audit Senior Executive Vice President attends the meeting        of the Management Committee only for matters that lie        within his competence. |

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> 
*Senior Managers*

**Claudio Descalzi** was born in Milan in 1955. He receiveda degree in Physics in 1979 from the Politecnico University ofMilan. He joined the Eni in 1981 as an Oil-Gas field petroleumengineering and project manager, following the development of theNorth Sea, Libya, Nigeria, and Congo. In 1990 he was appointedhead of reservoir and operating activities for Italy. In 1994 hewas named Managing Director of the Eni subsidiary in Congo and in1998 became Vice Chairman and Managing Director of Naoc,Eni’s subsidiary in Nigeria. From 2000 to 2001 he held theposition of Executive Vice President for Africa, Middle East andChina. From 2002 to 2005 he was Executive Vice President forItaly, Africa, Middle East while also covering the role ofChairman of the Board of several Eni subsidiaries in the area. In2006 he was appointed Deputy Chief Operating Officer of the EniExploration & Production Division. In 2012 he was awarded the"Charles F. Rand Memorial Gold Medal 2012" award by theSociety of Petroleum Engineers and the American Institute ofMining Engineers. Since 2006 he has been President ofAssomineraria and Vice President of Confindustria Energy. SinceJuly 30, 2008 he has been Chief Operating Officer of EniExploration & Production Division.

**Angelo Fanelli** was born in Rome in 1952. He has adegree in mechanical engineering from the University La Sapienzain Rome. After gaining experience at other companies, he joinedthe Eni Group in 1981, and in the first seven years held"field" positions in the Extra-network and Networkmarkets as Technical Assistant, Lubricants and Sales Promoter onthe Motorway Network. From 1988 to 1993 he was Head of theBologna and Florence sales areas. From 1994 to 2004 he held anumber of positions in the Network sector. He was appointed Headof Road Network Management, Head of the Ordinary Network andsubsequently Head of Business Network Italy and Head of the AgipRoad Transport Division, before becoming Head of Retail Businessat the R&M Division. From 2003 to 2004 he was Chairman andManaging Director of AgipRete SpA. In 2004 he was appointedCommercial Director Italy, a job he held until 2005 when he tookup the position of Head of Logistics at the Genoa headquarters.In 2006 he was appointed Commercial Director (Executive VicePresident) of the Refining & Marketing Division. Since 2008he has been a member of the board of Europia in Brussels. SinceApril 2010 he has been Chairman of Eni Trading & ShippingSpA. Since June 2012 he has been member of the steering councilof AISCAT. On April 6, 2010 he was appointed Chief OperatingOfficer of Eni SpA - Refining & Marketing.

**Umberto Vergine** was born in Milan in 1957. He is aChartered Civil Engineer from Politecnico University of Milan andjoined Eni in 1984. Having started his career at Agip as aPetroleum Engineer, he worked between 1985 and 1991 in Norway onthe Ekofisk field, in Angola in Cabinda and in Libya in Tripoli.He then took the position of Production Manager of the CremaDistrict in the North of Italy. Between 1993 and 2001, he heldvarious leading positions overseas, managing different EniE&P companies: District Manager of Agip UK in Aberdeen,District General Manager of Nigerian Agip Oil Co (NAOC) in PortHarcourt and General Manager of Petrobel Co in Egypt. In 2001 hewas Managing Director of Lasmo Venezuela in Caracas. At the endof 2002 he was appointed Managing Director of Ieoc in Cairo.Returning to Italy in 2004, he held the following positions inthe Eni E&P Division: Regional Vice President West Africa andEgypt; Senior Vice President for North Sea, Americas, Russia, FarEast and Pacific; Senior Vice President Technologies &Services and Executive Vice President for South Europe, CentralAsia, Far East and Pacific. In 2010 he was appointed Eni SpASenior Executive Vice President for Studies and Research. He hasbeen member of the Board of Directors of Saipem SpA, of EniTrading and Shipping, of Eni Foundation and Eni’srepresentative on the Board of the Fondazione Politecnico ofMilan. From January 2012 until December 5, 2012 was been ChiefOperating Officer of the Gas & Power Division9. OnDecember 5, 2012 he was appointed Chief Executive Officer andnon-independent executive Director of the Board of Directors ofSaipem SpA.

**Alessandro Bernini** was born in 1960 in Borgonuovo ValTidone, in the province of Piacenza, Italy. He started his careerin 1979 at Neutra Revisioni Sas, based in Milan, first as JuniorAccountant in the Auditing Activities Department then asAccountant in Charge. In 1981, he joined Ernst & Youngthereafter becoming Senior, Supervisor and Manager. On January 1,1995 he was appointed Partner of the Company and CharteredAccountant Manager for the Areas of Piacenza, Parma and Cremonaand Technical Manager for the branch based in Brescia. In thesame period he was also engaged as a Lecturer for post-graduateMaster’s Degree courses at the Universities of Pavia andParma. On September 1, 1996 he joined the Eni Group asAdministration Department Manager for Saipem SpA. In 2006 he wasappointed Group Chief Financial Officer for Saipem SpA. He hasheld executive management roles in many important companies ofthe Saipem Group. From August 1, 2008 until December 5, 2012 hewas Chief Financial Officer of the Eni Group.

**Massimo Mondazzi** was born in Monza in 1963. He receiveda degree in Business Administration from the University L.Bocconi in Milan in 1987. Before joining Eni in 1992, his earlycareer was spent gaining professional experience in industrialand consulting firms. He worked in the Administration and Controlarea of the Eni Exploration and Production Division until 2006,where he reached the level of Director. From 2006 to 2009, he wasthe Director of Planning and Control for the Eni Group, beforereturning to the Exploration & Production Division as theExecutive Vice President for Central Asia, Far East and PacificRegion. In the last three years of his tenure as Executive VicePresident for Central Asia, Far East and Pacific Region, hecontributed to the consolidation of Eni’s activities in theExploration and Production Division, to the launch of newdevelopment projects and to Eni’s entry into new countries. 

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| (9) |    | Since        December 5, 2012, Paolo Scaroni has been Chief Operating        Officer of Eni Gas & Power Division ad interim. |
|-----|--------------|----------------------------------------------------------------------------------------------------------------------------------|

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Since December 5, 2012 he has been Chief Financial Officer ofthe Eni Group and the officer responsible for preparing financialreporting documents pursuant to Article 154-*bis* of ItalianLegislative Decree No. 58/1998.

**Salvatore Sardo** was born in Turin in 1952. He has beenChief Corporate Operations Officer of Eni SpA since November2008, reporting directly to the Chief Executive Officer withresponsibility for policies and control of procurement, thedepartment of human resources and organization, the department ofInformation & Communication Technology, Health, Safety,Environment & Quality, Security, Compensation & Benefitsand the subsidiary EniServizi. Since April 8, 2009, he has alsobeen the Chairman of Eni Corporate University. From April 27,2010 to October 15, 2012 he was also Chairman of Snam SpA10.He graduated with a degree in Economics from the University ofTurin. He is also a Chartered Accountant and Auditor. From 1976to 1981 he worked with Coopers & Lybrand as auditor, risingthe position of supervisor. From 1981, he served at Stet as Headof Control for manufacturing. In 1991 he was appointed to theposition of co-central director and, from 1992 to 1996, centraldirector of Planning and Control. He was appointed in 1997 asdeputy general manager of finance, administration and control atTelecom Italia. From 1998 to June 2001, he was Chairman of SeatPagine Gialle SpA. From October 1999 he served as operationalhead of the Real Estate Department of Telecom Italia. He has beenChairman of EMSA, Chairman and CEO of EMSA Servizi and Chairmanand CEO of IMMSI, a company listed on the Milan Stock Exchange,as well as operational Chairman of TELIMM, IMSER and Telemaco,companies operating in the same sector. From November 2000, heserved as head of the Real Estate and Services business unit ofTelecom Italia. From October 2001 he was head of the Real Estateand General Services operating unit, reporting to the ChiefExecutive Officer of Telecom Italia. From February 2003 he workedas group head of Procurement, Services and Security of Enel SpA,reporting directly to the Chief Executive Officer, with a volumeof procurement of over euro 3 billion. In 2005, he was appointedSenior Executive Vice President Human Resources and BusinessServices of Eni SpA, reporting to the Chief Executive Officer,with responsibility for policies and control of the Information& Communication Technology department and the subsidiaryEniServizi. In July 2011 he was decorated as *Grande Ufficialedell’Ordine al merito* of the Italian Republic. On June2008 he was decorated as *Commendatore dell’Ordine almerito* of the Italian Republic. From April 2008 to April 2011he was a member of the Board of Directors and the RemunerationCommittee of Saipem. He has also served as a standing statutoryauditor of Italtel, Finsiel and Telecom Italia.

**Stefano Lucchini** was born in Rome in 1962. He ismarried with two children and has a degree in Economics from theLUISS University of Rome. His first job was in the researchdepartment at Montedison. After a period as assistant to theChairman of the Energy and Commerce Committee of the U.S.Congress in Washington D.C., he served as director ofcommunications at Montedison USA in New York. Returning to Italyin 1993, he was responsible for financial communications andinvestor relations for the Montedison Group. He joined Enel in1997 as Head of corporate communications, and investor relations(where he oversaw the company’s IPO) and subsequently as theGroup’s head of external relations. He has also been thehead of external relations for Confindustria, the Italianemployers’ federation. In June 2002 he was appointed head ofexternal relations for the Banca Intesa Group. In July 2005 hewas appointed as Eni’s Senior Executive Vice President ofpublic affairs and corporate communication and, since July 2012,he has been Senior Executive Vice President of internationalrelations and communication and chairman of Eni USA Inc. Heteaches at the Advanced School of Journalism at the CatholicUniversity of Milan, of which he is also a member of theevaluation committee. Since 2007 he has been a member of theSupervisory Board of Confindustria and of the executive board ofUPA. He is also a member of the boards of Censis, Fondazione EniEnrico Mattei (FEEM) and Eni Foundation. Since 2005 he has been amember of the Board of Directors of AGI. He is a Grand Officer ofOrder of Merit of the Italian Republic and was awarded the SilverCross Medal by the Italian Red Cross. He is a Member of theAdvisory Board LUISS MBA Program and member of the Board ofDirectors both of the American Chamber of Commerce in Italy andUnindustria and a director of the Energy Foundation. He is avisiting fellow at Oxford University.

**Massimo Mantovani** was born in Milan in 1963. He has adegree in Law from the Università Statale di Milano and a Masterin Law (LLM) from the University of London. He is registered topractice law in Italy and in England as solicitor. For around 5years he worked for a number of law firms in Milan and Londonbefore joining the legal department of Snam SpA in 1993. InOctober 2005 he was appointed as Legal Affairs Senior ExecutiveVice President of Eni SpA after a period in which he was legaldirector of the Gas & Power Division of Eni. Since 2005 hehas been a member of the Board of Directors of Snam Rete Gas SpA11and is a member of the Watch Structure of Eni SpA.

**Roberto Ulissi** was born in Rome in 1962. He isqualified as a lawyer. After a number of years spent as a lawyerat the Bank of Italy, in 1998 he was appointed General Manager atthe Ministry of the Economy and Finance, head of the Banking andFinancial System and Legal Affairs Department. He was a directorof Telecom Italia, Ferrovie dello Stato, Alitalia, Fincantieriand a government representative on the Governing Council of theBank of Italy. He was also a member of numerous Italian andEuropean commissions representing the Ministry of the Economy,including, at a national level, the Commission for the Reform ofCorporate Law and, at the EU level, the Financial Services PolicyGroup, the Banking Advisory Committee, the European BankingCommittee, the European Securities Committee, and the FinancialServices Committee. He was also special professor of banking lawat the University of Cassino. He is a 

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| (10) |    | Until January        1, 2012 the company name was Snam Rete Gas SpA.                   |
|------|--------------|----------------------------------------------------------------------------------------|
| (11) |    | From January        1, 2012 Snam Rete Gas changed its company name in Snam        SpA. |

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*Grande Ufficiale* of the Italian Republic. Since 2006 hehas been Senior Executive Vice President Corporate Affairs andGovernance and Company Secretary of Eni. He is also a director ofEni International BV.

**Marco Petracchini** was born in Rome in 1964. Hegraduated *cum laude* in economics from the University LaSapienza in Rome in 1989. After graduation, he was hired by EssoItaliana where he held a number of positions in the IT, Financeand Auditing sectors. He joined Eni in 1999, where he was rapidlypromoted in the Internal Audit Department. He is currently SeniorExecutive Vice President of the Internal Auditing Department andsupervisor of the Internal Control function. He is also a memberof the Control Body and Secretary of the Internal ControlCommittee of Eni SpA. He holds international qualifications,including that of Certified Internal Auditor (CIA), awarded bythe Institute of Internal Auditors with which he also gained anhonorable mention, and Certified Fraud Examiner (CFE), awarded bythe Association of Certified Fraud Examiners.

**Marco Alverà** graduated from the London School ofEconomics in 1997 with a degree in Philosophy and Economics. Heis currently an Associate Fellow at the Oxford University Centrefor Corporate Reputation, where he specializes in developing andteaching case studies on doing business in Africa. He started hiscareer at Goldman Sachs in London in 1997 in M&A and PrivateEquity. In 2000 he co-founded Netesi, Italy’s firstbroadband ADSL company. From 2002 to 2005 he joined Enel as Headof Group Corporate Strategy before becoming in 2004 ChiefFinancial Officer of Wind Telecom, overseeing the sale of Wind toOrascom. He joined Eni in 2005 as Assistant to the CEO forspecial initiatives. In 2006 he was appointed Director of Supply& Portfolio Development at Eni Gas & Power Division andChief Executive Officer of Bluestream and Promgas. In 2008 hemoved to Eni Exploration & Production Division where he wasappointed Executive Vice President for Russia, North Europe andAmericas. In these countries he managed operations and lednegotiations with governments and other international oilcompanies. Since 2010 he has been Chief Executive Officer of EniTrading and Shipping SpA, which manages all the commodity tradingand shipping activities for Eni. As of January 16, 2012 he isalso Senior Executive Vice President of Eni Trading Business Unit12.He has served on the Board of Gazprom Neft and is Chairman of theBoard of Eni’s Russian subsidiaries.

**Salvatore Meli** was born in Torre del Greco in 1953.After earning his degree in Chemical Engineering, in 1980 hebegan his career as a researcher, gradually taking on positionsof greater responsibility until 1992, when he became Head ofApplied Research in Engineering at Eni Research. In 1998 hebecame Head of Research of Eni Technologies and took overresponsibility for the entire Department of Engineering, Modelingand Pilot Systems, a position he retained until 2003. In January2004 he was appointed Head of Planning Technology and Developmentat Eni Corporate, and then, in August 2006, he took the positionof Director of Research and Technological Innovation of theE&P Division, with the aim of enhancing the role oftechnological innovation as a lever in strengthening thecompetitive position of the E&P business. On January 1, 2008he was appointed Head of Technologies in Strategic Management andResearch at Eni Corporate, with responsibility for monitoring thedevelopment of technologies of interest to Eni’s activitiesand for identifying development opportunities for newtechnologies and new energy sources. In this position, particularemphasis was placed on activities enhancing intellectual propertythrough a significant increase in the number and quality ofpatents filed. On June 10, 2009, as part of Eni CorporateManagement Studies and Research, he was appointed Executive VicePresident of Research & Technological Innovation; sinceAugust 2, 2011 he has been reporting directly to the ChiefExecutive Officer under the aegis of the Research &Technological Innovation Department.

**Leonardo Bellodi** was born in Venice in 1965. Aftergraduating with a degree in law, he worked at the United Nationsand for international law firms. He is the author of numerouspublications and has taught international and EU law. In 1998 hewas hired as Head of the Eni Delegation to the European Union.Since his return from Brussels in 2006, he has held positions ofincreasing responsibility at Eni’s Department of PublicAffairs and Communication, and in 2011 he was appointed as PublicAffairs Executive Vice President. Since July 2012 he has beenExecutive Vice President of Government Affairs, reportingdirectly to the Chief Executive Officer of Eni SpA. Since 2009 hehas also been Chairman of the Board of Directors of Syndial SpA.

**Stefano Leofreddi** was born in Rome in 1960. Hegraduated with a degree in economics and, after experience as aresearcher at the International Trade Centre (UN/WTO) in Geneva,he joined Eni in 1986, working in planning and control atEniChem, where he remained until 1998, in positions of increasingresponsibility. Then, at Eni Corporate, he was in charge of majorinnovation projects in the administration and control area until2001, when he was appointed Head of Administration and Control atStogit, where he contributed to the company’s start up.Returning to Eni Corporate in 2007, he coordinated the Eni gasinfrastructure functional unbundling program (Snam13,Italgas, Stogit). In 2009 he was appointed Head of Risk Controland Financial Systems. He is currently Senior Vice President ofIntegrated Risk Management, reporting directly to the ChiefExecutive Officer.

**Raffaella Leone** with Eni since 2005, she is theExecutive Assistant to the CEO of Eni. She is President ofServizi Aerei SpA, Vice President of Eni Foundation, member ofthe Board of Directors of the news agency AGI (AgenziaGiornalistica Italia) and of the Board of Directors of FondazioneEni Enrico Mattei. Previously, she was the Executive Assistant tothe CEOs of Enel (from May 2002 to 2005) and of Pilkington (from1996 to May 2002).

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| (12) |    | As of March        15, 2013, the Department has been renamed        "Optimization & Trading". |
|------|--------------|-------------------------------------------------------------------------------------------------------------|
| (13) |    | As of January        1, 2012, the company name was Snam Rete Gas SpA.                                       |

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**Compensation**

Board members’ emoluments are determined by theShareholders’ Meeting, while the emoluments of the Chairmanand CEO, in relation to the powers entrusted to them, aredetermined by the Board of Directors considering relevantproposals made by the Compensation Committee and afterconsultation with the Board of Statutory Auditors.

Moreover, in accordance with the applicable legal andregulatory duties (Article 123-*ter* of Legislative DecreeNo. 58 of February 24, 1998 and Article 84-*quater* ofConsob Decision No. 11971 of May 14, 1999, and subsequentmodifications) and in line with the Corporate Governance Coderecommendations, the Board of Directors approves and submits tothe annual Shareholders’ Meeting, the guidelines for theremuneration of Directors, Chief Operating Officers of EniDivision and other Managers with strategic responsibilities.

Main elements of the remuneration policy defined for 2013 andof the 2012 compensation of the Chairman, the CEO, other Boardmembers and Eni’s three General Managers are describedbelow.

 

CHAIRMAN OF THE BOARD OF DIRECTORS

*Shareholder established remuneration*The Shareholders’ Meeting of May 5, 2011, setremuneration of the Chairman of the Board of Directors,envisaging a fixed gross annual compensation for the mandateequal to euro 265,000, unchanged with respect to the previousmandate. In addition, the Shareholders’ Meeting resolved asfor the other Directors, an annual bonus connected to theEni’s performance in terms of total return to shareholders,as benchmarked to that achieved by the other seven largestinternational oil companies in terms of market capitalization(Exxon, Shell, Chevron, British Petroleum, Total, Conoco, andStatoil). The incentive is paid in the amount of euro 80,000 oreuro 40,000, unchanged with respect to the previous mandate, incase Eni ranks first or second, or third or fourth, respectivelyin a given year. In the absence of such results, the bonus is notpaid. In 2012, the Company did not meet the performanceconditions to award the bonus.

*Remuneration for powers delegated*On June 1, 2011, the Board of Directors defined an additionalremuneration for the powers delegated to the Chairman inconformity with the Company’s By-laws. To that end, a fixedannual emolument in the amount of euro 500,000 gross wasestablished, unchanged from the previous mandate, as well as avariable annual component with a minimum, target and a maximumincentive level respectively set at 51%, 60% and 78% of the fixedemolument established for the delegated powers. The objectivesfor the incentives that will be paid in 2013 are focused onEni’s economic/financial and operational/industrialperformance results achieved by Eni during the year prior to thatof the payment and on the implementation of the strategic andsustainability guidelines defined in the Strategic Plan. Studiesare in progress regarding the introduction of specific objectiveson the activities carried out by the Chairman to ensure theeffective functioning of the Board of Directors, for theincentive that will be paid in 2014.

*Treatments established in the event of termination ofoffice or employment*No specific treatments are envisaged upon the termination ofthe office of the Chairman or agreements that envisageindemnities in the case of early termination of the mandate. Inany case, the Committee is entitled to propose to the Board thepossible payment of an indemnity, upon completion of the mandate,commensurate with the compensation received and with theachievement of performance of particular relevance to Eni.

*Benefits*Insurance related benefit, including the case of risk ofdeath and disability, are envisaged for the Chairman.

 

NON-EXECUTIVE DIRECTORS

*Shareholder established remuneration*The Shareholders’ Meeting of May 5, 2011, setremuneration of the Directors for the 2011-2014 mandate,envisaging a fixed gross annual compensation for the mandateequal to euro 115,000, unchanged from the previous mandate. Inaddition, the Shareholders’ Meeting resolved an annual bonusconnected to Eni’s performance in terms of total returnto shareholders, as benchmarked to that achieved by the otherseven largest international oil companies in terms of marketcapitalization (Exxon, Shell, Chevron, British Petroleum, Total,Conoco and Statoil). The incentive is paid in the amount of euro 20,000 oreuro 10,000, unchanged with respect to the previous mandate, incase Eni ranks first or second, or third or fourth, respectivelyin a given year. Absent such results, the bonus is not paid. In2012, the Company did not meet the performance conditions toaward the bonus.

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| *Compensation for participation in        Board committees*For non-executive and/or independent Directors, it is        confirmed the payment of additional annual compensation        for participation in Board committees, as follows: |
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| • |   | for the Control and Risk        Committee, compensation equal to euro 45,000 for the        Chairman and euro 35,000 for other members was envisaged,        with regards to the more significant role played by the        Committee in supervising company risk; |
|--------|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| • |   | for the Compensation        Committee and the Oil-Gas Energy Committee compensation,        equal to euro 30,000 for the Chairman and euro 20,000 for        other members, already envisaged in the previous mandate;        and                                  |
| • |   | for participation on the        Nominating Committee, established in July 2011, no        compensation is paid.                                                                                                                                                    |

In the case of participation on more than one Committee (withthe exception of the Nominating Committee), a 10% reduction willapply.

*Treatments established in the event of termination ofoffice or employment*No specific treatments are envisaged upon the termination ofoffice of the non-executive Directors or agreements that envisageindemnities in the case of early termination of the mandate.

 

CHIEF EXECUTIVE OFFICER AND GENERAL MANAGERThe remuneration structure for the Chief Executive Officer andGeneral Manager for the current mandate was approved by the Boardof Directors on June 1, 2011, in relation to the powers delegatedto him and incorporates both the compensation determined by theShareholders’ Meeting on May 5, 2011 for Directors, as wellas compensation that would possibly be due for positions held atthe Board of Directors of subsidiaries or associated companies.

*Fixed remuneration*Fixed remuneration is set at an annual gross amount of euro1,430,000, of which euro 430,000 for the role of Chief ExecutiveOfficer, and euro 1,000,000 for the role of General Manager.These amounts are unchanged with respect to the previous mandate,in consideration of the continuity of the powers delegated tohim.

In addition, in his role as Eni Executive, the General Manageris also entitled to receive the indemnities due for travel, bothin Italy and abroad. This is in line with applicable provisionsin the relevant national collective labor agreement for managersand in the complementary company level agreements.

*Annual variable incentives*The annual variable incentive plan envisages compensationdetermined with reference to a minimum(performance = 85), a target (performance = 100) and amaximum incentive level (performance = 130), set at 87.5%, 110%and 155% of the total fixed remuneration, respectively, based onthe results achieved by Eni in the previous year, as measuredaccording to a performance scale 70÷130, in relation to theweight assigned to each (below 70 points the performance of eachobjective is considered zero and the minimum overall performanceis set at 85 points).

The objectives set for the incentives which will be paid in2013, are focused on: (i) the implementation of strategic,financial and sustainability policies (30%) in terms of reserveallocation, increase in exploration resources, optimization ofbusiness activities, financial leverage, maintenance of Eni'spresence in the "Ftse4good" index and the "DowJones Sustainability Index"; (ii) the operating performanceof the Divisions (30%); (iii) adjusted EBIT (30%); and (iv) theefficiency program (weight 10%).

The Company’s Compensation Committee is entitled topropose to the Board of Directors extra compensation to the ChiefExecutive Officer and General Manager in the case of achievementof strategic transactions or arrangements that strengthen theCompany’s competitive position over the medium-long term.

| *Long-term variable incentives*The long-term variable component consists of two        distinct plans: |
|--------------------------------------------------------------------------------------------------------|

| • |   | Deferred Monetary Incentive        Plan (DMI), also envisaged for managers of the Company,        with three annual assignments, starting in 2012 based on        Company performance measured in terms of EBITDA (*Earnings        before interest, tax, depreciation and amortization*).        This parameter is generally used in the oil&gas        sector as an indicator of performance and is in line with        Eni's growth and consolidation strategy for the Company's        current placement in business areas. The assignment and        payment of the incentive after a three-year vesting        period, are subject to the following conditions: (i) the        incentive to be assigned each year is determined in        relation to the EBITDA results carried out by the Company        during the previous year, measured on a performance scale        70÷130, with a minimum, target and maximum value of        38.5%, 55% and 71.5%, respectively of total fixed        remuneration. Where results are below the minimum        performance level, no assignment is made; and (ii) the        incentive to be paid at the end of the three-year vesting        period is determined on the basis of the average annual        EBITDA results achieved during the vesting period, as a        percentage between zero and 170% of the assigned value.        The annual performance is evaluated on a scale between        70% and 170% (below the minimum threshold of 70%,        performance is assumed to be zero). Should the |
|--------|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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|   |   | current office not be        renewed, the payment of each incentive assigned will        occur at the natural expiry of the relative vesting        period, in accordance with the performance conditions        defined in the Plan.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |
|--------|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| • |   | Long-Term Monetary Incentive        Plan (LTMI) linked to the results of profitability        achieved by the Company in connection with its main        international competitors, and extended to all critical        managerial resources to the business. This Plan, adopted        in the previous mandate in place of the Stock Option Plan        which has not been operational since 2009, was confirmed        by the Board of Directors on June 1, 2011, at the last        renewal of the company's bodies. For the Chief Executive        Officer and General Manager three annual assignments are        envisaged, as of 2011, subject to the following        conditions: (i) the target incentive to be assigned each        year is determined on the basis of a valorization process        of the previous Stock Option Plan, performed by        specialized external companies on the basis of procedures        and criteria established by the Board, taking into        account the value of Eni share; and (ii) the incentive to        be paid at the end of the three-year vesting period is        determined in relation to the results achieved in terms        of variation of the Adjusted Net Profit + Depletion        Depreciation & Amortization (DD&A) parameter        recorded in the three-year period, in relative terms,        with respect to other major international companies,        based on capitalization (Exxon, Shell, Chevron, British        Petroleum, Total, Conoco). This incentive is defined as a        percentage of the amount assigned according to the        average annual placements achieved in the vesting period        of the companies in the peer group according to the        following scale: 1st place = 130%; 2nd        place = 115%, 3rd place = 100%; 4th        place = 85%; 5th place = 70%; 6th        and 7th place = 0%. Should the current office        not be renewed, the payment of each incentive assigned        will occur at the natural expiry of the relative vesting        period, in accordance with the performance conditions        defined in the Plan. |

|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| *Treatments established in the event        of termination of office or employment*The following is envisaged for the Chief Executive        Officer and General Manager, in accordance with the        practices of the reference market and unchanged from the        previous mandate, also considering the entitlements        already accrued within the employment relationship,        established before March 31, 2010, and due to which, in        accordance with the Corporate Governance Code, the        recommendations pursuant to criteria 6.C.1, letter f) of        the same Code results not applicable: |

| • |   | upon termination of the        employment relationship, in connection with the expiry or        early termination of the current mandate, an indemnity is        envisaged, in addition to the severance pay due upon        termination of employment and in lieu of any obligations        regarding prior notice, defined as a fixed component of        euro 3,200,000 and a variable component based on the        value of the annual variable incentive calculated with        respect to the average of Eni performance in the        three-year period 2011-2013; the indemnity is undue        should the termination of the employment relationship        meets the requirements of due cause, in case of death and        of resignation from office for reasons other than an        essential reduction of the powers currently attributed; |
|--------|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| • |   | at the end of the mandate,        it is recognized a treatment which, in relation to fixed        remuneration and to the 50% of the maximum variable        remuneration earned for the administrative role alone,        guarantees a social security contribution and severance        pay equal to that paid by Eni for the management        employment relationship; and                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |
| • |   | in relation to the        obligation assumed by the Chief Executive Officer and        General Manager to not carry out any type of activities        that could be in competition with that performed by Eni        for a period of one year after termination of the        employment relationship, in all of Italy, Europe, and        North America, the payment of a fee equal to euro        2,219,000 is envisaged.                                                                                                                                                                                                                                                                                                                                                                                                                                |

In any case, the Committee is entitled to propose to theBoard, upon the conclusion of the mandate, a possible increase tothe amounts due upon termination of office, in the case that,over the course of the three-year period, notable results wereobtained.

*Benefits*For the Chief Executive Officer and General Manager,unchanged from the previous mandate and the policy enacted in2012, insurance related benefits, also in the case of risk ofdeath or disability, are envisaged, and, in respect of theprovisions of the relevant national collective labor agreementand the complementary Company level agreement for Eni seniormanagers ("Dirigenti"), enrolment in the supplementarypension plan (FOPDIRE) as well as in the supplementary healthplan (FISDE) is envisaged, together with the use of a companycar.

 

CHIEF OPERATING OFFICERS OF DIVISIONS AND OTHER MANAGERS WITH STRATEGIC RESPONSIBILITIES

*Fixed remuneration*Fixed remuneration is determined on the basis of the role andthe responsibilities assigned, considering the averagecompensation levels seen in the market of large national andinternational companies for roles of a similar level ofresponsibility and complexity and that may be updatedperiodically, in the context of the annual salary review processthat involves all managerial staff. The Guidelines for 2013, inconsideration of the reference context and current market trends,envisage selective criteria, while in any case maintainingappropriate levels for competitiveness and motivation. Inparticular, the actions proposed regard: (i) interventions toupdate the fixed amount aimed at holders of roles that increasedtheir area of responsibility or with positioning below theaverage of the reference market; and (ii) one-time extraordinaryinterventions connected to achieving results or projects orparticular importance during the year.

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In addition, like all other senior managers, the ChiefOperating Officers of Divisions and other Managers with strategicresponsibilities are also entitled to receive the indemnities duefor travel, both in Italy and abroad, in line with the applicableprovisions in the relevant national collective labor contract forsenior managers and in the complementary company levelagreements.

*Annual variable incentives*The annual variable incentive plan envisages compensationdetermined with reference to the Eni, business area, andindividual performance results for the previous year and measuredin accordance with a performance scale of 70÷130 with a minimumincentive level equal to 85 points, below which no incentive isdue, as already described for the Chief Executive Officer andGeneral Manager. The target incentive level (performance = 100)is differentiated based on the role held, up to a maximum equalto 60% of the fixed remuneration.

With regards to the Chief Operating Officers and otherManagers with strategic responsibilities, the objectives aredetermined on the basis of those assigned to the Chief ExecutiveOfficer and General Managers, and are focused, for each businessarea, on economic/financial, operational and industrialperformance, on internal efficiency, and issues of sustainability(in terms of health and safety, environmental protection,relations with stakeholders) as well as on individual objectivesassigned in relation to the area of responsibility for the roleheld, in accordance with the Company’s Strategic Plan.

| *Long-term variable incentives*Chief Operating Officers and other Managers with        strategic responsibilities, in line with that envisaged        for the Chief Executive Officer and General Manager,        participate in the Long-Term Incentive Plans approved by        the Board of Directors on March 15, 2012, with the        following characteristics: |
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| • |   | Deferred Monetary Incentive        Plan (DMI), designed for the managerial resources who        have delivered performance results envisaged within the        annual variable incentive plan. The 2012-2014 Plan        envisages three annual assignments, as of 2012 with the        same performance conditions and characteristics as        described above for the Plan of the Chief Executive        Officer and General Manager. For Chief Operating Managers        and other Managers with strategic responsibilities, the        incentive to be assigned each year is determined in        relation to the EBITDA results achieved by the Company in        the previous year, measured on a performance scale of        70-130. The target incentive level is differentiated        based on the role up to a maximum of 40% of the fixed        remuneration. The incentive to be paid at the end of the        three-year vesting period is determined on the basis of        the average annual EBITDA results achieved during the        three-year period as a percentage between zero and 170%        of the assigned value; and |
|--------|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| • |   | Long-Term Monetary Incentive        Plan (LTMI), designed for critical managerial resources.        The 2012-2014 envisages three annual assignments, as of        2012, with the same performance conditions and        characteristics as envisaged in the Plan of the Chief        Executive Officer and General Manager. For Chief        Operating Officers and other Managers with strategic        responsibilities, the incentive to be assigned at target        level is differentiated by role, up to a maximum of 50%        of the fixed remuneration. The incentive to be paid at        the end of the three-year period in question is        determined as a percentage of the amount assigned on the        basis of the average annual placement in the three-year        period with respect to other companies of the peer group,        between zero and 130% of the assigned value.                                                                                                                                                                                                                                           |

Both Plans provide for clauses aimed at promoting retention ofemployees, envisaging, in the case of consensual contractresolution, or transfer or loss of control on the part of Eni ofthe Company of which the individual in question is an employeeduring the course of the vesting period, that the employee inquestion conserves the right to the incentive in the measuredecreased by the period between the award of the base incentiveand the occurrence of said events, or no payment in the case ofunilateral termination.

*Treatments established in the event of termination ofoffice or employment*For Chief Operating Officers and other Managers withstrategic responsibilities, the employment termination treatmentsestablished in the relevant national collective labor contractare provided, together with any other additional severanceindemnity agreed on an individual basis upon termination,according to the criteria established by Eni for cases of earlyresolutions and/or retirement; these criteria take into accountthe retirement age and actual age of the manager at the time oftermination of employment and the remuneration received annually.Specific compensation for cases in which it is necessary tostipulate non-competition agreements may also be envisaged.

*Benefits*For the Chief Operating Officers of Eni Divisions and otherManagers with strategic responsibilities, unchanged from thepolicy enacted in 2012, and in respect of the provisions of therelevant national collective labor agreement and thecomplementary company level agreements for Eni senior managers,insurance related benefits, also in case of death and disability,and the enrolment in the supplementary pension plan (FOPDIRE) aswell as in the supplementary health plan (FISDE) are envisaged,together with the use of a company car.

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MARKET REFERENCES AND PAY MIX

The remuneration benchmarks used for the various types ofroles, are indicated as follows: (i) for the Chairman andnon-executive Directors, references relative to similar roles inthe largest national listed companies by capitalization; (ii) forthe Chief Executive Officer and General Manager, benchmarksrelative to similar roles in national and European largest listedcompanies by capitalization and in the main internationalcompanies in the Oil sector; and (iii) for Chief OperatingOfficers of Divisions and Managers with strategicresponsibilities, benchmarks relative to roles with the samelevel of responsibility and managerial complexity in largenational and international industrial companies.

The 2013 remuneration policy guidelines lead to a remunerationmix in line with the management positions held, with greaterweight given to the variable component, in particular over thelong term, for those position having a greater impact on Companyresults.

With the exception of the CEO as described above, none of theDirectors of Eni has service contracts with the Company or any ofits subsidiaries providing for benefits upon termination ofemployment.

Pursuant to Article 84-*quater* of Consob Decision No.11971 of May 14, 1999, and subsequent modifications, the tablebelow reports individual remuneration earned in 2012 by eachMember of the Board of Directors, Statutory Auditors, and ChiefOperating Officers. The overall amount earned by other Managerswith strategic responsibilities is reported too.

Following the mentioned amendment, the table reports the totalamount of emoluments paid during the year 2012.

(euro thousand)

|   |   |   |   |   |   |   |   |   |   |   |   |   | **Variable non-equity        remuneration** |   |   |   |   |   |   |   |   |   |   |
|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|---------------------------------------------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|
|   |   |   |   |   |   |   |   |   |   |   |   |   |                                             |   |   |   |   |   |   |   |   |   |   |

| **Name** | **Notes** |   | **Office** |   | **Term of office** |   | **Office expiry****(*)** |   | **Fixed remuneration** |   | **Committee        membership remuneration** |   | **Bonuses and other        incentives** |   | **Profit sharing** |   | **Non-monetary        benefits** |   | **Other remuneration** |   | **Total        2012** |   | **Fair value of        equity remuneration** |   | **Severance indemnity        for end of office or termination of employment** |
|----------|-----------|--------|------------|--------|--------------------|--------|--------------------------|--------|------------------------|--------|----------------------------------------------|--------|-----------------------------------------|--------|--------------------|--------|----------------------------------|--------|------------------------|--------|-----------------------|--------|----------------------------------------------|--------|-------------------------------------------------------------------------------|
|          |           |   |            |   |                    |   |                          |   |                        |   |                                              |   |                                         |   |                    |   |                                  |   |                        |   |                       |   |                                              |   |                                                                               |

| Giuseppe Recchi           |  (1) |   | Chairman                        |   | 01.01-12.31 |   | 04.2014 |   | 765   |  (a) |   |   |      |   | 245    |  (b) |   |   |   | 4      |   |   |   |   | 1,014 |   |   |   |   |   |
|---------------------------|-----------|--------|---------------------------------|--------|-------------|--------|---------|--------|-------|-----------|--------|--------|-----------|--------|--------|-----------|--------|--------|--------|--------|--------|--------|--------|--------|-------|--------|--------|--------|--------|--------|
| Paolo Scaroni             |  (2) |   | CEO and         General Manager |   | 01.01-12.31 |   | 04.2014 |   | 1,430 |  (a) |   |   |      |   | 4,952  |  (b) |   |   |   | 15     |   |   |   |   | 6,397 |   |   |   |   |   |
| Carlo Cesare Gatto        |  (3) |   | Director                        |   | 01.01-12.31 |   | 04.2014 |   | 115   |  (a) |   | 50     |  (b) |   |   |      |   |   |   |   |   |   |   |   | 165   |   |   |   |   |   |
| Alessandro        Lorenzi |  (4) |   | Director                        |   | 01.01-12.31 |   | 04.2014 |   | 115   |  (a) |   | 59     |  (b) |   |   |      |   |   |   |   |   |   |   |   | 174   |   |   |   |   |   |
| Paolo Marchioni           |  (5) |   | Director                        |   | 01.01-12.31 |   | 04.2014 |   | 115   |  (a) |   | 50     |  (b) |   |   |      |   |   |   |   |   |   |   |   | 165   |   |   |   |   |   |
| Roberto Petri             | (6)       |   | Director                        |   | 01.01-12.31 |   | 04.2014 |   | 115   |  (a) |   | 36     |  (b) |   |   |      |   |   |   |   |   |   |   |   | 151   |   |   |   |   |   |
| Alessandro Profumo        |  (7) |   | Director                        |   | 01.01-12.31 |   | 04.2014 |   | 115   |  (a) |   | 45     |  (b) |   |   |      |   |   |   |   |   |   |   |   | 160   |   |   |   |   |   |
| Mario Resca               |  (8) |   | Director                        |   | 01.01-12.31 |   | 04.2014 |   | 115   |  (a) |   | 45     |  (b) |   |   |      |   |   |   |   |   |   |   |   | 160   |   |   |   |   |   |
| Francesco Taranto         |  (9) |   | Director                        |   | 01.01-12.31 |   | 04.2014 |   | 115   |  (a) |   | 50     |  (b) |   |   |      |   |   |   |   |   |   |   |   | 165   |   |   |   |   |   |

|  |  |   |  |   |  |   |  |   |  |   |  |   |  |   |  |   |  |   |  |   |  |   |  |   |  |
|--|--|--------|--|--------|--|--------|--|--------|--|--------|--|--------|--|--------|--|--------|--|--------|--|--------|--|--------|--|--------|--|

| **Board of Statutory********Auditors** |
|----------------------------------------|

| Ugo Marinelli           |  (10) |   | Chairman |   | 01.01-12.31 |   | 04.2014 |   | 115 |  (a) |   |   |   |   |   |   |   |   |   |   |   |   |   |   | 115 |   |   |   |   |   |
|-------------------------|------------|--------|----------|--------|-------------|--------|---------|--------|-----|-----------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|-----|--------|--------|--------|--------|--------|
| Roberto        Ferranti |  (11) |   | Auditor  |   | 01.01-12.31 |   | 04.2014 |   | 80  |  (a) |   |   |   |   |   |   |   |   |   |   |   |   |   |   | 80  |   |   |   |   |   |
| Paolo Fumagalli         |  (12) |   | Auditor  |   | 01.01-12.31 |   | 04.2014 |   | 80  |  (a) |   |   |   |   |   |   |   |   |   |   |   |   |   |   | 80  |   |   |   |   |   |
| Renato        Righetti  |  (13) |   | Auditor  |   | 01.01-12.31 |   | 04.2014 |   | 80  |  (a) |   |   |   |   |   |   |   |   |   |   |   |   |   |   | 80  |   |   |   |   |   |
| Giorgio Silva           |  (14) |   | Auditor  |   | 01.01-12.31 |   | 04.2014 |   | 80  |  (a) |   |   |   |   |   |   |   |   |   |   |   |   |   |   | 80  |   |   |   |   |   |

|  |  |   |  |   |  |   |  |   |  |   |  |   |  |   |  |   |  |   |  |   |  |   |  |   |  |
|--|--|--------|--|--------|--|--------|--|--------|--|--------|--|--------|--|--------|--|--------|--|--------|--|--------|--|--------|--|--------|--|

| **Chief Operating        Officers** |
|-------------------------------------|

| Claudio Descalzi | (15) |   | E&P Division |   | 01.01-12.31 |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|------------------|------|--------|------------------|--------|-------------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|

| *Remuneration in the        company preparing the financial statements* |   | 773    |  (a) |   |   |   |   | 1,171  |  (b) |   |   |   | 13     |   |   |      |   | 1,957 |   |   |   |   |   |
|-------------------------------------------------------------------------|--------|--------|-----------|--------|--------|--------|--------|--------|-----------|--------|--------|--------|--------|--------|--------|-----------|--------|-------|--------|--------|--------|--------|--------|
| *Remuneration        from subsidiaries and associates*                  |   |   |      |   |   |   |   |   |      |   |   |   |   |   | 599    |  (c) |   | 599   |   |   |   |   |   |

|            |       |   |                    |   |        |   | Total  |   | 773 |      |   |   |   |   | 1,171 |      |   |   |   | 13 |   | 599    |   |   | 2,556 |   |   |   |   |   |
|-----------------|------------|--------|-------------------------|--------|-------------|--------|--------|--------|-----|-----------|--------|--------|--------|--------|-------|-----------|--------|--------|--------|----|--------|--------|--------|--------|-------|--------|--------|--------|--------|--------|
| Umberto Vergine |  (16) |   | G&P Division        |   | 01.01-12.04 |   |   |   | 372 |  (a) |   |   |   |   | 335   |  (b) |   |   |   | 10 |   |   |   |   | 717   |   |   |   |   |   |
| Angelo Fanelli  |  (17) |   | R&M        Division |   | 01.01-12.31 |   |   |   | 559 |  (a) |   |   |   |   | 533   |  (b) |   |   |   | 14 |   |   |   |   | 1,106 |   |   |   |   |   |

|  |  |   |  |   |  |   |  |   |  |   |  |   |  |   |  |   |  |   |  |   |  |   |  |   |  |
|--|--|--------|--|--------|--|--------|--|--------|--|--------|--|--------|--|--------|--|--------|--|--------|--|--------|--|--------|--|--------|--|

| **Other Managers with strategic        responsibilities** (**) | (18)   |                                                   | *Remuneration        in the company preparing the financial statements* |   | 4,613     |   |   |   |   |   | 6,189     |   |   |   |   | 124    |   | 120       |   |   | 11,046 |   |   |   | 2,917     |   |
|----------------------------------------------------------------|--------|--------------------------------------------------------|-------------------------------------------------------------------------|--------|-----------|--------|--------|--------|--------|--------|-----------|--------|--------|--------|--------|--------|--------|-----------|--------|--------|--------|--------|--------|--------|-----------|--------|
|                                                           |   | *Remuneration from        subsidiaries and associates* |                                                                    | 819    |      |   |   |   |   | 408    |      |   |   |   | 9      |   | 25     |      |   | 1,261  |   |   |   |   |      |
|                                                           |   | Total                                                  |                                                                    | 5,432  |  (a) |   |   |   |   | 6,597  |  (b) |   |   |   | 133    |   | 145    |  (c) |   | 12,307 |   |   |   | 2,917  |  (d) |

|  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |   |  |   |  |   |  |
|--|--|--|--|--|--|--|--|--|--|--|--|--|--|--|--|--|--|--|--|--------|--|--------|--|--------|--|

|   |   |   |   |   |   |   |   | **10,571** |   |   | **335** |   | **13,833** |   |   |   |   | **189** |   | **744** |   |   | **25,672** |   |   |   | **2,917** |   |
|--------|--------|--------|--------|--------|--------|--------|--------|------------|--------|--------|---------|--------|------------|--------|--------|--------|--------|---------|--------|---------|--------|--------|------------|--------|--------|--------|-----------|--------|

|  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |   |  |   |  |   |  |
|--|--|--|--|--|--|--|--|--|--|--|--|--|--|--|--|--|--|--|--|--------|--|--------|--|--------|--|

| Notes |
|-------|

| (*)    |    | The term of        office expires with the Shareholders' Meeting approving        the financial statements for the year ending December 31,        2013.                                                                                                                                                                                                                                                                                                                                                                                                                                                            |
|--------|--------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| (**)   |    | Managers who,        during the course of the year and with the Chief        Executive Officer and Chief Operating Officers of        Eni’s Divisions, were permanent members of the        Company Management Committee and the ones who report        directly to the Chief Executive Officer (thirteen        managers).                                                                                                                                                                                                                                                                                    |
| (1)    |    | **Giuseppe        Recchi - Chairman of the Board of Directors**                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |
|   |    | (a) The        amount includes the fixed remuneration of euro 265        thousand established by the Shareholders' Meeting of May        5, 2011 and the fixed remuneration of euro 500 thousand        for the powers granted by the Board of Directors on June        1, 2011.                                                                                                                                                                                                                                                                                                                                    |
|   |    | (b) The        amount refers to the annual variable incentive paid        pro-rata from May 6, 2011.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |
| (2)    |    | **Paolo        Scaroni - CEO and General Manager**                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |
|   |    | (a) The        amount includes the fixed remuneration of euro 430        thousand for the role of Chief Executive Officer (which        incorporates the remuneration established by the        Shareholders' Meeting of May 5, 2011 as Director) and the        fixed remuneration of euro 1 million as General Manager;        indemnities owed for travel, in Italy and abroad, in line        with the provisions of the relevant national collective        labor agreement for senior managers and of the other        Company's agreements are added to this amount for a total        of euro 139 thousand. |

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|   |    | (b) The        amount includes variable annual incentive of euro 2,110        thousand, deferred monetary incentive of euro 1,022        thousand assigned in 2009 and paid in 2012, and long-term        monetary incentive of euro 1,820 thousand assigned in        2009 and paid in 2012.                                                                                                                                                      |
|--------|--------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| (3)    |    | **Carlo        Cesare Gatto - Director**                                                                                                                                                                                                                                                                                                                                                                                                           |
|   |    | (a) The        amount corresponds with the fixed annual remuneration        which was not changed by the Shareholders’ Meeting        of May 5, 2011.                                                                                                                                                                                                                                                                                         |
|   |    | (b) The        amount includes euro 31.5 thousand for participation in        the Control and Risk Committee, and euro 18 thousand for        the Compensation Committee.                                                                                                                                                                                                                                                                          |
| (4)    |    | **Alessandro        Lorenzi - Director**                                                                                                                                                                                                                                                                                                                                                                                                           |
|   |    | (a) The        amount corresponds with the fixed annual remuneration        which was not changed by the Shareholders’ Meeting        of May 5, 2011.                                                                                                                                                                                                                                                                                         |
|   |    | (b) The        amount includes euro 40.5 thousand for participation in        the Control and Risk Committee, and euro 18 thousand for        the Oil-Gas Energy Committee.                                                                                                                                                                                                                                                                        |
| (5)    |    | **Paolo        Marchioni - Director**                                                                                                                                                                                                                                                                                                                                                                                                              |
|   |    | (a) The        amount corresponds with the fixed annual remuneration        which was not changed by the Shareholders’ Meeting        of May 5, 2011.                                                                                                                                                                                                                                                                                         |
|   |    | (b) The        amount includes euro 31.5 thousand for participation in        the Control and Risk Committee, and euro 18 thousand for        the Oil-Gas Energy Committee.                                                                                                                                                                                                                                                                        |
| (6)    |    | **Roberto        Petri - Director**                                                                                                                                                                                                                                                                                                                                                                                                                |
|   |    | (a) The        amount corresponds with the fixed annual remuneration        which was not changed by the Shareholders’ Meeting        of May 5, 2011.                                                                                                                                                                                                                                                                                         |
|   |    | (b) The        amount includes euro 18 thousand for participation in the        Compensation Committee, and euro 18 thousand for the        Oil-Gas Energy Committee.                                                                                                                                                                                                                                                                              |
| (7)    |    | **Alessandro        Profumo - Director**                                                                                                                                                                                                                                                                                                                                                                                                           |
|   |    | (a) The        amount corresponds with the fixed annual remuneration        which was not changed by the Shareholders’ Meeting        of May 5, 2011.                                                                                                                                                                                                                                                                                         |
|   |    | (b) The        amount includes euro 18 thousand for participation in the        Compensation Committee, and euro 27 thousand for the        Oil-Gas Energy Committee.                                                                                                                                                                                                                                                                              |
| (8)    |    | **Mario        Resca - Director**                                                                                                                                                                                                                                                                                                                                                                                                                  |
|   |    | (a) The        amount corresponds with the fixed annual remuneration        which was not changed by the Shareholders’ Meeting        of May 5, 2011.                                                                                                                                                                                                                                                                                         |
|   |    | (b) The        amount includes euro 27 thousand for participation in the        Compensation Committee, and euro 18 thousand for the        Oil-Gas Energy Committee.                                                                                                                                                                                                                                                                              |
| (9)    |    | **Francesco        Taranto - Director**                                                                                                                                                                                                                                                                                                                                                                                                            |
|   |    | (a) The        amount corresponds with the fixed annual remuneration        which was not changed by the Shareholders’ Meeting        of May 5, 2011.                                                                                                                                                                                                                                                                                         |
|   |    | (b) The        amount includes euro 31.5 thousand for participation in        the Control and Risk Committee, and euro 18 thousand for        the Oil-Gas Energy Committee.                                                                                                                                                                                                                                                                        |
| (10)   |    | **Ugo        Marinelli - Chairman of the Board of Statutory Auditors**                                                                                                                                                                                                                                                                                                                                                                             |
|   |    | (a) The        amount corresponds with the fixed annual remuneration        which was not changed by the Shareholders’ Meeting        of May 5, 2011.                                                                                                                                                                                                                                                                                         |
| (11)   |    | **Roberto        Ferranti - Auditor**                                                                                                                                                                                                                                                                                                                                                                                                              |
|   |    | (a) The        amount corresponds with the fixed annual remuneration        which was not changed by the Shareholders’ Meeting        of May 5, 2011, entirely paid to the Ministry for Economy        and Finance.                                                                                                                                                                                                                           |
| (12)   |    | **Paolo        Fumagalli - Auditor**                                                                                                                                                                                                                                                                                                                                                                                                               |
|   |    | (a) The        amount corresponds with the fixed annual remuneration        which was not changed by the Shareholders’ Meeting        of May 5, 2011.                                                                                                                                                                                                                                                                                         |
| (13)   |    | **Renato        Righetti - Auditor**                                                                                                                                                                                                                                                                                                                                                                                                               |
|   |    | (a) The        amount corresponds with the fixed annual remuneration        which was not changed by the Shareholders’ Meeting        of May 5, 2011.                                                                                                                                                                                                                                                                                         |
| (14)   |    | **Giorgio        Silva - Auditor**                                                                                                                                                                                                                                                                                                                                                                                                                 |
|   |    | (a) The        amount corresponds with the fixed annual remuneration        which was not changed by the Shareholders’ Meeting        of May 5, 2011.                                                                                                                                                                                                                                                                                         |
| (15)   |    | **Claudio        Descalzi - Chief Operating Officer E&P Division**                                                                                                                                                                                                                                                                                                                                                                             |
|   |    | (a) To the        amount of euro 773 thousand as Gross Annual Salary are        added the indemnities owed for the travel performed, in        Italy and abroad, in line with the provisions of the        relevant national collective labor agreement for senior        managers and by the Company’s additional agreements,        for a total amount of euro 153 thousand.                                                                |
|   |    | (b) The        amount includes the payment of euro 442 thousand relating        the deferred monetary incentive assigned in 2009.                                                                                                                                                                                                                                                                                                                  |
|   |    | (c) Amount        relative to remuneration for the position as Chairman of        Eni UK.                                                                                                                                                                                                                                                                                                                                                          |
| (16)   |    | **Umberto        Vergine - Chief Operating Officer G&P Division**                                                                                                                                                                                                                                                                                                                                                                              |
|   |    | (a) To the        amount of euro 372 thousand as Gross Annual Salary up to        December 4, 2012, are added the indemnities owed for the travel        performed, in Italy and abroad, in line with the        provisions of the relevant national collective labor        agreement for senior managers and by the Company’s        additional agreements, for a total amount of euro 9,000.                                               |
|   |    | (b) The        amount includes the payment of euro 144 thousand relating        the deferred monetary incentive granted in 2009.                                                                                                                                                                                                                                                                                                                   |
| (17)   |    | **Angelo        Fanelli - Chief Operating Officer R&M Division**                                                                                                                                                                                                                                                                                                                                                                               |
|   |    | (a) To the        amount of euro 559 thousand as Gross Annual Salary are        added the indemnities owed for the travel performed, in        Italy and abroad, in line with the provisions of the        relevant national collective labor agreement for senior        managers and by the Company’s additional agreements,        for a total amount of euro 3.000.                                                                       |
|   |    | (b) The        amount includes the payment of euro 164 thousand relating        the deferred monetary incentive assigned in 2009.                                                                                                                                                                                                                                                                                                                  |
| (18)   |    | **Other        Managers with strategic responsibilities**                                                                                                                                                                                                                                                                                                                                                                                          |
|   |    | (a) To the        amount of euro 5,432 thousand as Gross Annual Salary, as        indemnities owed for the travel performed, in Italy and        abroad, in line with the provisions of the relevant        national collective labor agreement for senior managers        and by the Company’s additional agreements as well        as other indemnities related to the employment contract,        for a total amount of euro 622 thousand. |
|   |    | (b) The        amount includes euro 2,866 thousand relating to deferred        monetary incentive assigned in 2009 as well as the        pro-rata amounts of the Long Term Incentive Plans (DMI        and LTMI) paid upon termination of the employment        relationship, in relation to the vesting period expired        as defined in the respective Plan Regulations.                                                                      |
|   |    | (c) Amounts        related to the roles held by Managers with strategic        responsibilities in the Watch Structure established        pursuant to the Company's Model 231, to the role of        Manager responsible for the preparation of the company's        financial statements and to the compensation received for        positions held in subsidiaries or associated companies of        Eni.                                        |
|   |    | (d) The        amount includes severance amounts and early resolution        indemnities paid in relation to the termination of the        employment relationship.                                                                                                                                                                                                                                                                                |

|           |
|----------------|
| In particular: |

| • |   | the column "Fixed        remuneration" reports, following the criteria of        competence, fixed remuneration and fixed salary from        employment due for the year, gross of social security and        tax expenses to be paid by the employee; it excludes        attendance fees, as they are not envisaged. Details on        compensation are provided in the notes, as well as        separate indication of any indemnities or payments        referred to the employment relationship;                           |
|--------|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| • |   | the column "Committee        membership remuneration" reports, following the        criteria of competence, the compensation due to the        Directors for participation in the Committees established        by the Board. In the notes, compensation for each        Committee on which each Director participates is        indicated separately;                                                                                                                                                                         |
| • |   | the column "Variable        non-equity remuneration - Bonuses and other        incentives" reports the incentives paid during the        year due to rights vested following the assessment and        approval of the relative performance results by the        relevant company bodies, in accordance with that        specified, in greater detail, in the Table of page 151 on        monetary incentive plans for Directors, Chief Operating        Officers, and other Managers with strategic        responsibilities; |
| • |   | the column "Profit        sharing", does not include any figures, as no form        of profit-sharing is envisaged;                                                                                                                                                                                                                                                                                                                                                                                                            |
| • |   | the column        "Non-monetary benefits" reports, in accordance        with competence and taxability criteria, the value of        fringe benefits awarded;                                                                                                                                                                                                                                                                                                                                                                  |
| • |   | the column "Other        remuneration" reports, in accordance with the        criteria of competence, any other remuneration deriving        from other services provided;                                                                                                                                                                                                                                                                                                                                                     |
| • |   | the column "Total"        reports the sum of the amounts of all the previous items;                                                                                                                                                                                                                                                                                                                                                                                                                                            |
| • |   | the column "Fair value        of equity remuneration" reports the fair value of        competence of the year related to the existing stock        option plans, estimated in accordance with international        accounting standards which assign the relevant cost in        the vesting period; and                                                                                                                                                                                                                       |
| • |   | the column "Severance        indemnities for end of office or termination of        employment" reports the indemnities accrued, even if        not yet paid, for the terminations which occurred during        the course of financial year considered or in relation to        the end of the office and/or employment.                                                                                                                                                                                                      |

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> 
***2012 performance variable incentives of the CEO and    other top managers***

*Annual variable incentives*The incentive for the 2012 annual plan was paid, with regardsto the top management positions, in the face of evaluation of theCompany performance in relation to verification of resultsregarding the objectives defined for 2011 in accordance with theStrategic Plan and the annual budget, in terms of: (i)implementation of strategic and financial guidelines, taking intoaccount the evaluation expressed by the Compensation Committee;(ii) operational performance of Eni Divisions; (iii) EBITadjusted; and (iv) reduction of costs. Eni results in 2011,evaluated using a constant scenario approved by the Board at themeeting of March 15, 2012 and following a proposal by theCompensation Committee, led to a performance score of 125 pointsin the measurement scale used which envisaged a target andmaximum performance level of 100 and 130 points, respectively.With regards to the Chief Operating Officers of the Divisions,the incentive was paid on the basis of the economic andoperational performance obtained in their respective businesssectors, including evaluation of the achievement of specificsustainability objectives (in terms of health and safety,environmental protection and relation with stakeholders). Withregards to other Managers with strategic responsibilities, thevariable incentive paid in 2012 was connected to Company resultsand a series of individual objectives assigned in relation to thearea of responsibility for the role held, in line with thatenvisaged in the Eni 2011 performance Plan.

| For the purposes of the variable        remuneration to be paid in 2012, the performance score        determined: |
|-------------------------------------------------------------------------------------------------------------------|

| • |   | for the Chairman, the        payment of a bonus equal to 75% of the fixed        remuneration, taking into account the target (60%) and        maximum (78%) incentive levels assigned (bonus paid        pro-rata with respect to the period for which the office        was held in 2011);         |
|--------|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| • |   | for the Chief Executive        Officer, the payment of a bonus equal to 147.5% of the        fixed remuneration taking into account the target (110%)        and maximum (155%) incentive levels assigned; and                                                                                       |
| • |   | for the Chief Operating        Officers of Divisions and Managers with strategic        responsibilities, the payment of bonuses determined in        relation to the specific performance achieved, in        accordance with incentive levels differentiated on the        basis of the role held. |

*Deferred Monetary Incentive Plan*At its meeting of March 15, 2012, the Board of Directors,following the review and proposal of the Compensation Committee,determined achievement of a 2011 EBITDA result (evaluated using aconstant scenario) at the target level.

Therefore, for the Chief Executive Officer and Chief OperatingOfficer General Manager, the Board determined the assignment ofthe 2012 base incentive in the amount of euro 786,500 (55% of thefixed remuneration). For Chief Operating Officers of EniDivisions and other Managers with strategic responsibilities, theincentive amounts defined as "target" were assigned,differentiated by the level of the role up to a maximum equal to40% of the fixed remuneration.

In addition, in 2012 the deferred monetary incentive assignedin 2009 to the Chief Executive Officer and Chief OperatingOfficer, to the Chief Operating Officers of the Divisions, and toother Managers with strategic responsibilities reached maturity.At its meeting of March 15, 2012, the Board of Directors, on thebasis of Eni’s EBITDA results during the 2009-2011 period,approved, based on a proposal from the Compensation Committee,the multiplier to be applied to the base incentive assigned forthe purposes of calculating the amount to be paid, in the amountof 130%.

Specifically, an incentive equal to euro 1,022,450 was paid tothe Chief Executive Officer (equal to 130% of the base incentiveof euro 786,500 assigned in 2009).

*Long-Term Monetary Incentive Plan*At its meeting of September 20, 2012, for the Chief ExecutiveOfficer and General Manager, the Board of Directors, inaccordance with the verification and proposal of the CompensationCommittee, approved the assignment of the 2012 base incentivefrom the Long-Term Monetary Incentive Plan envisaged in the Boardresolution of June 1, 2011, replacing the previous stock optionplan, which was not implemented after 2009. The incentiveassigned was defined at euro 2,363,013 in accordance with thecriteria and the methods of valorization approved by the Boarditself and with the assistance of specialized external providers.

For Chief Operating Officers of Eni Divisions and otherManagers with strategic responsibilities, the amounts weredetermined in accordance with the target incentive level,differentiated by the level of the role, up to a maximum equal to50% of the fixed remuneration.

In addition, in 2012 the long-term monetary incentive assignedin 2009 to the Chief Executive Officer and the General Managerreached maturity. At its meeting on March 15, 2012, the Board ofDirectors, on the basis of Eni’s results relating to thevariation of the Adjusted Net Profit + DD&A recorded in theperiod 2009-2011 and the corresponding annual placement with thereference peer group, approved, based on a proposal by theCompensation Committee, the multiplier to be applied to theamount awarded for the purposes of calculating the amount to bepaid, in the amount of 67%. As a result, an incentive of euro1,819,982 was paid to the Chief Executive Officer (equal to 67%of the base incentive of euro 2,716,319 awarded in 2009).

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The table below indicates, by name, the variable monetaryincentives, both short and long term, envisaged for theDirectors, the Chief Operating Officers of the Divisions and, atan aggregate level, for other Managers with strategicresponsibilities (including all those individuals who, during thecourse of the period, filled said roles, even if for only afraction of the year).

**Monetary incentive plans for Directors,Chief Operating Officers, and other Managers with strategicresponsibilities**

| (euro        thousand) |   |   |   |   |   | **Bonuses of the year** |   | **Bonuses of previous        years** |   |   |
|------------------------|--------|--------|--------|--------|--------|-------------------------|--------|--------------------------------------|--------|--------|
|                   |   |   |   |   |   |                         |   |                                      |   |   |

| **Name** |   | **Office** |   | **Plan** |   | **payable/paid** |   | **deferred** |   | **deferral period** |   | **no longer payable** |   | **payable/paid******(1) |   | **still deferred** |   | **Other bonuses** |
|----------|--------|------------|--------|----------|--------|------------------|--------|--------------|--------|---------------------|--------|-----------------------|--------|-------------------------|--------|--------------------|--------|-------------------|
|          |   |            |   |          |   |                  |   |              |   |                     |   |                       |   |                         |   |                    |   |                   |

| Giuseppe Recchi        |   | Chairman                                                    |   | Annual Monetary Incentive Plan 2012 BoD March        15, 2012                                                  |   | 245       |   |      |   |       |   |    |   |      |   |      |   |    |
|------------------------|--------|-------------------------------------------------------------|--------|----------------------------------------------------------------------------------------------------------------|--------|-----------|--------|-----------|--------|------------|--------|---------|--------|-----------|--------|-----------|--------|---------|
|                        |   |                                                             |   |                                                                                                                |   |           |   |           |   |            |   |         |   |           |   |           |   |         |
| **Total**              |   |                                                        |   |                                                                                                           |   | **245**   |   |      |   |       |   |    |   |      |   |      |   |    |
|                        |   |                                                             |   |                                                                                                                |   |           |   |           |   |            |   |         |   |           |   |           |   |         |
| Paolo Scaroni          |   | CEO and         General Manager                             |   | Annual Monetary Incentive Plan 2012 BoD March        15, 2012                                                  |   | 2,110     |   |      |   |       |   |    |   |      |   |      |   |    |
|                   |   |                                                        |   | Deferred        Monetary Incentive Plan 2012 BoD March 15, 2012                                                |   |      |   | 787       |   | three-year |   |    |   |      |   |      |   |    |
|                   |   |                                                        |   | Long-Term Monetary Incentive Plan 2012 BoD        September 20, 2012                                           |   |      |   | 2,363     |   | three-year |   |    |   |      |   |      |   |    |
|                   |   |                                                        |   | Deferred        Monetary Incentive Plan 2011 BoD March 10, 2011                                                |   |      |   |      |   |       |   |    |   |      |   | 787       |   |    |
|                   |   |                                                        |   | Long-Term Monetary Incentive Plan 2011 BoD        October 27, 2011                                             |   |      |   |      |   |       |   |    |   |      |   | 2,447     |   |    |
|                   |   |                                                        |   | Deferred        Monetary Incentive Plan 2010 BoD July 28, 2010                                                 |   |      |   |      |   |       |   |    |   |      |   | 787       |   |    |
|                   |   |                                                        |   | Long-Term Monetary Incentive Plan 2010 BoD        September 9, 2010                                            |   |      |   |      |   |       |   |    |   |      |   | 2,501     |   |    |
|                   |   |                                                        |   | Deferred        Monetary Incentive Plan 2009 Award: BoD July 30,        2009 Payment: BoD March 15, 2012       |   |      |   |      |   |       |   |    |   | 1,022     |   |      |   |    |
|                   |   |                                                        |   | Long-Term Monetary Incentive Plan 2009         Award: BoD November 18, 2009 Payment: BoD March 15,        2012 |   |      |   |      |   |       |   | 896     |   | 1,820     |   |      |   |    |
|                        |   |                                                             |   |                                                                                                                |   |           |   |           |   |            |   |         |   |           |   |           |   |         |
| **Total**              |   |                                                        |   |                                                                                                           |   | **2,110** |   | **3,150** |   |       |   | **896** |   | **2,842** |   | **6,522** |   |    |
|                        |   |                                                             |   |                                                                                                                |   |           |   |           |   |            |   |         |   |           |   |           |   |         |
| Claudio Descalzi       |   | Chief Operating Officer         E&P Division            |   | Annual Monetary Incentive Plan 2012                                                                            |   | 579       |   |      |   |       |   |    |   |      |   |      |   |    |
|                   |   |                                                        |   | Deferred        Monetary Incentive Plan 2012 BoD March 15, 2012                                                |   |      |   | 387       |   | three-year |   |    |   |      |   |      |   |    |
|                   |   |                                                        |   | Long-Term Monetary Incentive Plan 2012 BoD        September 20, 2012                                           |   |      |   | 356       |   | three-year |   |    |   |      |   |      |   |    |
|                   |   |                                                        |   | Deferred        Monetary Incentive Plan 2011 BoD March 10, 2011                                                |   |      |   |      |   |       |   |    |   |      |   | 309       |   |    |
|                   |   |                                                        |   | Long-Term Monetary Incentive Plan 2011 BoD        October 27, 2011                                             |   |      |   |      |   |       |   |    |   |      |   | 363       |   |    |
|                   |   |                                                        |   | Deferred        Monetary Incentive Plan 2010 BoD July 28, 2010                                                 |   |      |   |      |   |       |   |    |   |      |   | 275       |   |    |
|                   |   |                                                        |   | Long-Term Monetary Incentive Plan 2010 BoD        September 9, 2010                                            |   |      |   |      |   |       |   |    |   |      |   | 347       |   |    |
|                   |   |                                                        |   | Deferred        Monetary Incentive Plan 2009 Award: BoD July 30,        2009 Payment: BoD March 15, 2012       |   |      |   |      |   |       |   |    |   | 442       |   |      |   |    |
|                        |   |                                                             |   |                                                                                                                |   |           |   |           |   |            |   |         |   |           |   |           |   |         |
| **Total**              |   |                                                        |   |                                                                                                           |   | **579**   |   | **743**   |   |       |   |    |   | **442**   |   | **1,294** |   | **150** |
|                        |   |                                                             |   |                                                                                                                |   |           |   |           |   |            |   |         |   |           |   |           |   |         |
| Umberto        Vergine |   | Chief        Operating Officer         G&P Division (2) |   | Annual        Monetary Incentive Plan 2012                                                                     |   | 191       |   |      |   |       |   |    |   |      |   |      |   |    |
|                   |   |                                                        |   | Deferred Monetary Incentive Plan 2012 BoD March        15, 2012                                                |   |      |   | 180       |   | three-year |   |    |   |      |   |      |   |    |
|                   |   |                                                        |   | Long-Term        Monetary Incentive Plan 2012 BoD September 20, 2012                                           |   |      |   | 207       |   | three-year |   |    |   |      |   |      |   |    |
|                   |   |                                                        |   | Deferred Monetary Incentive Plan 2011 BoD March        10, 2011                                                |   |      |   |      |   |       |   |    |   |      |   | 100       |   |    |
|                   |   |                                                        |   | Long-Term        Monetary Incentive Plan 2011 BoD October 27, 2011                                             |   |      |   |      |   |       |   |    |   |      |   | 124       |   |    |
|                   |   |                                                        |   | Deferred Monetary Incentive Plan 2010 BoD July        28, 2010                                                 |   |      |   |      |   |       |   |    |   |      |   | 95        |   |    |
|                   |   |                                                        |   | Long-Term        Monetary Incentive Plan 2010 BoD September 9, 2010                                            |   |      |   |      |   |       |   |    |   |      |   | 128       |   |    |
|                   |   |                                                        |   | Deferred Monetary Incentive Plan 2009        Award: BoD July 30, 2009 Payment: BoD March 15, 2012              |   |      |   |      |   |       |   |    |   | 144       |   |      |   |    |
|                        |   |                                                             |   |                                                                                                                |   |           |   |           |   |            |   |         |   |           |   |           |   |         |
| **Total**              |   |                                                        |   |                                                                                                           |   | **191**   |   | **387**   |   |       |   |    |   | **144**   |   | **447**   |   |    |
|                        |   |                                                             |   |                                                                                                                |   |           |   |           |   |            |   |         |   |           |   |           |   |         |

----

| (1) |    | Payment        relative to deferred monetary incentive assigned in 2009.       |
|-----|--------------|--------------------------------------------------------------------------------|
| (2) |    | Chief        Operating Officer G&P Division until December 4,        2012. |

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**Monetary incentive plans for Directors,Chief Operating Officers, and other Managers with strategicresponsibilities***continued*

| (euro        thousand) |   |   |   |   |   | **Bonuses of the year** |   | **Bonuses of previous        years** |   |   |
|------------------------|--------|--------|--------|--------|--------|-------------------------|--------|--------------------------------------|--------|--------|
|                   |   |   |   |   |   |                         |   |                                      |   |   |

| **Name** |   | **Office** |   | **Plan** |   | **payable/paid** |   | **deferred** |   | **deferral period** |   | **no longer payable** |   | **payable/paid******(1) |   | **still deferred** |   | **Other bonuses** |
|----------|--------|------------|--------|----------|--------|------------------|--------|--------------|--------|---------------------|--------|-----------------------|--------|-------------------------|--------|--------------------|--------|-------------------|
|          |   |            |   |          |   |                  |   |              |   |                     |   |                       |   |                         |   |                    |   |                   |

| Angelo Fanelli |   | Chief Operating Officer        R&M Division |   | Annual Monetary Incentive Plan 2012                                                                      |   | 369    |   |   |   |       |   |   |   |   |   |   |   |   |   |   |
|----------------|--------|-------------------------------------------------|--------|----------------------------------------------------------------------------------------------------------|--------|--------|--------|--------|--------|------------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|
|           |   |                                            |   | Deferred        Monetary Incentive Plan 2012 BoD March 15, 2012                                          |   |   |   | 224    |   | three-year |   |   |   |   |   |   |   |   |   |   |
|           |   |                                            |   | Long-Term Monetary Incentive Plan 2012 BoD        September 20, 2012                                     |   |   |   | 257    |   | three-year |   |   |   |   |   |   |   |   |   |   |
|           |   |                                            |   | Deferred        Monetary Incentive Plan 2011 BoD March 10, 2011                                          |   |   |   |   |   |       |   |   |   |   |   |   |   | 224    |   |   |
|           |   |                                            |   | Long-Term Monetary Incentive Plan 2011 BoD        October 27, 2011                                       |   |   |   |   |   |       |   |   |   |   |   |   |   | 263    |   |   |
|           |   |                                            |   | Deferred        Monetary Incentive Plan 2010 BoD July 28, 2010                                           |   |   |   |   |   |       |   |   |   |   |   |   |   | 194    |   |   |
|           |   |                                            |   | Long-Term Monetary Incentive Plan 2010 BoD        September 9, 2010                                      |   |   |   |   |   |       |   |   |   |   |   |   |   | 244    |   |   |
|           |   |                                            |   | Deferred        Monetary Incentive Plan 2009 Award: BoD July 30,        2009 Payment: BoD March 15, 2012 |   |   |   |   |   |       |   |   |   |   | 164    |   |   |   |   |   |

|  |   |  |   |  |   |  |   |  |   |  |   |  |   |  |   |  |   |  |
|--|--------|--|--------|--|--------|--|--------|--|--------|--|--------|--|--------|--|--------|--|--------|--|

| **Total** |   |   |   |   |   | **369** |   | **481** |   |   |   |   |   |   | **164** |   |   | **925** |   |   |
|-----------|--------|--------|--------|--------|--------|---------|--------|---------|--------|--------|--------|--------|--------|--------|---------|--------|--------|---------|--------|--------|

|  |   |  |   |  |   |  |   |  |   |  |   |  |   |  |   |  |   |  |
|--|--------|--|--------|--|--------|--|--------|--|--------|--|--------|--|--------|--|--------|--|--------|--|

| Other        Managers with strategic responsibilities (2) |   | Annual        Monetary Incentive Plan 2012 |   | 3,281 |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|-----------------------------------------------------------|--------|--------------------------------------------|--------|-------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|

|   |   |   |   | Deferred Monetary Incentive Plan 2012 BoD March        15, 2012                                   |   |   |   | 1,326  |   | three-year |   | 210    |  (3) |   | 90    |  (4) |   |   |   |   |
|--------|--------|--------|--------|---------------------------------------------------------------------------------------------------|--------|--------|--------|--------|--------|------------|--------|--------|-----------|--------|-------|-----------|--------|--------|--------|--------|
|   |   |   |   | Long-Term        Monetary Incentive Plan 2012 BoD September 20, 2012                              |   |   |   | 1,590  |   | three-year |   | 242    |  (3) |   | 104   |  (4) |   |   |   |   |
|   |   |   |   | Deferred Monetary Incentive Plan 2011 BoD March        10, 2011                                   |   |   |   |   |   |       |   | 150    |  (3) |   | 150   |  (4) |   | 1,291  |   |   |
|   |   |   |   | Long-Term        Monetary Incentive Plan 2011 BoD October 27, 2011                                |   |   |   |   |   |       |   | 229    |  (3) |   | 123   |  (4) |   | 1,567  |   |   |
|   |   |   |   | Deferred Monetary Incentive Plan 2010 BoD July        28, 2010                                    |   |   |   |   |   |       |   | 80     |  (3) |   | 187   |  (4) |   | 1,018  |   |   |
|   |   |   |   | Long-Term        Monetary Incentive Plan 2010 BoD September 9, 2010                               |   |   |   |   |   |       |   | 203    |  (3) |   | 135   |  (4) |   | 1,340  |   |   |
|   |   |   |   | Deferred Monetary Incentive Plan 2009        Award: BoD July 30, 2009 Payment: BoD March 15, 2012 |   |   |   |   |   |       |   |   |      |   | 2,077 |      |   |   |   |   |

|  |   |  |   |  |   |  |   |  |   |  |   |  |   |  |   |  |   |  |
|--|--------|--|--------|--|--------|--|--------|--|--------|--|--------|--|--------|--|--------|--|--------|--|

| **Total** |   |   |   |   |   | **3,281** |   | **2,916** |   |   |   | **1,114** |   |   | **2,866** |   |   | **5,216** |   | **450** |
|-----------|--------|--------|--------|--------|--------|-----------|--------|-----------|--------|--------|--------|-----------|--------|--------|-----------|--------|--------|-----------|--------|---------|

|  |   |  |   |  |   |  |   |  |   |  |   |  |   |  |   |  |   |  |
|--|--------|--|--------|--|--------|--|--------|--|--------|--|--------|--|--------|--|--------|--|--------|--|

|   |   |   |   |   |   | **6,775** |   | **7,677** |   |   |   | **2,010** |   |   | **6,458** |   |   | **14,404** |   | **600** |
|--------|--------|--------|--------|--------|--------|-----------|--------|-----------|--------|--------|--------|-----------|--------|--------|-----------|--------|--------|------------|--------|---------|

|  |   |  |   |  |   |  |   |  |   |  |   |  |   |  |   |  |   |  |
|--|--------|--|--------|--|--------|--|--------|--|--------|--|--------|--|--------|--|--------|--|--------|--|

----

| (1) |    | Payment        relative to deferred monetary incentive assigned in 2009.                                                                                                                                                                                                                                                         |
|-----|--------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| (2) |    | Managers who,        during the course of the year and with the Chief        Executive Officer and Chief Operating Officers of        Eni’s Divisions, were permanent members of the        Company Management Committee and the ones who report        directly to the Chief Executive Officer (thirteen        managers). |
| (3) |    | Pro-rata        amount no longer payable, following the termination of        the employment relationship, in relation to the vesting        period expired, as foreseen in the Plan Regulations.                                                                                                                                |
| (4) |    | Pro-rata        amount paid, following the termination of the employment        relationship, in relation to the vesting period expired,        as foreseen in the Plan Regulations.                                                                                                                                             |

|           |
|----------------|
| In particular: |

| • |   | the column "Bonuses of        the year - payable/paid" reports the short-term        variable incentive paid during the year on the basis of        the verification of the performance carried out by the        relevant company bodies relative to the objectives        defined for the previous year;                                                                                   |
|--------|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| • |   | the column "Bonuses of        the year - deferred" reports the amount of the base        incentive assigned during the year in implementation of        the long-term monetary incentive plans;                                                                                                                                                                                              |
| • |   | the column "Bonuses of        the year - Deferral period" reports the duration of        the period of the vesting for the long-term incentives        assigned during the year;                                                                                                                                                                                                             |
| • |   | the column "Bonuses of        previous years - no longer payable" indicates the        long-term incentives no longer payable in relation to the        verified performance conditions for the vesting period,        or the incentives that expired due to events pertaining        to the employment relationships as foreseen by the        Regulations of the Plans;                    |
| • |   | the column "Bonuses of        previous years - payable/paid" indicates the        long-term incentives paid during the year, matured on the        basis of verification of the performance conditions for        the vesting period, or the incentive options disbursed        due to events pertaining to the employment relationships        as foreseen by the Regulations of the Plans; |
| • |   | the column "Bonuses of        previous years - still deferred" reports incentives        assigned in previous years, in implementation of        long-term Plans, which have not yet vested; and                                                                                                                                                                                             |
| • |   | the column "Other        bonuses" includes incentives paid on a one-time        extraordinary basis, connected to the achievement of        particularly important results of projects during the        year.                                                                                                                                                                               |

The Total of the columns "Bonuses of the year -payable/paid", "Bonuses of previous years -payable/paid" and "Other bonuses" is the same asthat indicated in the column "Bonuses and otherincentives" in the Compensation table.

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*Severance indemnity for end of office or termination ofemployment*In the course of 2012, severance indemnity for the end ofoffice were not approved and/or paid in favor of the Directorsand/or Chief Operating Officers of Eni's Divisions. With regardsto other Managers with strategic responsibilities, amounts werepaid as defined in accordance with Company policy for earlyresolutions in addition to contractual and legal obligations.

*Accrued compensation*Total compensation accrued in the year 2012 pertaining to allthe Board members amounted to euro 13.2 million; it amounted toeuro 467,000 in the case of the Statutory Auditors. Such amountsinclude, in addition to each item of emolument reported in thetable above, amounts accrued in the year for pension benefits,social security contributions and other elements of theremuneration associated with roles performed, which represent acost for the Company.

For the year ended December 31, 2012, remuneration of personsin key positions in planning, direction and control functions ofEni Group Companies, including executive and non-executiveDirectors, Chief Operating Officers and other Managers withstrategic responsibilities amounted to euro 33 million and wasaccrued in Eni’s Consolidated Financial Statements for theyear ended December 31, 2012. The break-down is as follow:

|   | **2012**           |
|--------|--------------------|
|   |                    |
|   | **(euro million)** |

| Fees and salaries                               |   | 21     |
|-------------------------------------------------|--------|--------|
| Post        employment benefits                 |   | 1      |
| Other long-term benefits                        |   | 11     |
| Indemnity        upon termination of the office |   |   |
|                                            |   | **33** |
|                                            |   |        |

The above amounts include salaries, fees forattending meetings, lump-sum amounts paid in lieu of expensereimbursements, stock-based compensation and other deferredincentive bonuses, health and pension contributions and amountsaccrued to the reserve for employee termination indemnities,which is used to pay severance pay as required by Italian law toemployees upon termination of employment. The members of theBoard of Directors in their capacity as such are not entitled toreceive such severance pay. As of December 31, 2012, the totalamount accrued to the reserve for employee terminationindemnities with respect to members of the Board of Directors whowere also employees of Eni, the three Divisional Chief OperatingOfficers and Eni’s senior managers was euro 1,536 thousand.

| **Name** | **(euro thousand)** |
|----------|---------------------|
|     |                     |

| Paolo Scaroni              |   | CEO and General Manager of Eni                         |   | 182       |
|----------------------------|--------|--------------------------------------------------------|--------|-----------|
| Claudio        Descalzi    |   | Chief        Operating Officer of the E&P Division |   | 333       |
| Angelo Fanelli             |   | Chief Operating Officer of the R&M Division        |   | 240       |
| Senior        managers (a) |   |                                                   |   | 781       |
|                       |   |                                                   |   |           |
|                       |   |                                                   |   | **1,536** |
|                       |   |                                                   |   |           |

----

| (a) |   | No. 12        managers. |
|-----|--------|-------------------------|

> 
 

***Stock options***

At December 31, 2012, a total of 8,259,520 options wereoutstanding for the purchase of an equal amount of Eni ordinaryshares without nominal value. The Company discontinued anystock-based compensation scheme in 2009; as such, optionsoutstanding as of the end of the year pertained to stock optionsschemes adopted in previous reporting periods.

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The following table shows the evolution of stock optionactivity in 2011 and 2012.

|   | **2011** |   | **2012** |
|--------|----------|--------|----------|
|   |          |   |          |

|   | **Number of shares** |   | **Weighted average        exercise price**(euro) |   | **Market price**(euro) |   | **Number of shares** |   | **Weighted average        exercise price**(euro) |   | **Market price******(euro) |
|--------|----------------------|--------|--------------------------------------------------|--------|------------------------|--------|----------------------|--------|--------------------------------------------------|--------|----------------------------|
|   |                      |   |                                                  |   |                        |   |                      |   |                                                  |   |                            |

| **Options as of January 1**                      |   | **15,737,120** |   |   | **23.005** |   | **16.398** |   | **11,873,205** |   |   | **23.101** |   | **15.941** |
|--------------------------------------------------|--------|----------------|--------|--------|------------|--------|------------|--------|----------------|--------|--------|------------|--------|------------|
| Options        exercised in the period           |   | (208,900       | )      |   | 14.333     |   | 16.623     |   | (93,000        | )      |   | 16.576     |   | 16.873     |
| Options cancelled in the period                  |   | (3,655,015     | )      |   | 23.187     |   | 17.474     |   | (3,520,685     | )      |   | 22.233     |   | 16.637     |
| **Options        outstanding as of December 31** |   | **11,873,205** |   |   | **23.101** |   | **15.941** |   | **8,259,520**  |   |   | **23.545** |   | **18.457** |
| **of which exercisable as of December 31**       |   | **11,863,335** |   |   | **23.101** |   | **15.941** |   | **8,243,205**  |   |   | **23.544** |   | **18.457** |
|                                             |   |                |        |   |            |   |            |   |                |        |   |            |   |            |

Pursuant to Article 84-*quater* of Consob Decision No.11971 of May 14, 1999, and subsequent modifications, the tablebelow indicates, by name, the stock options assigned to the ChiefExecutive Officer and General Manager, to the Chief OperatingOfficers of the Divisions and, at an aggregate level, to otherManagers with strategic responsibilities (including all thoseindividuals who, during the course of the 2012 period, filledsaid roles, even if for only a fraction of the year).

In particular, the purchase rights (options) for Eni shares orfor subsidiaries, which can be exercised after three years fromthe date granted are indicated, in relation to the existing stockincentive plans, the last of which was granted in 2008. The dataare shown in accordance with the criteria of aggregaterepresentation, as these are incentive plans which are now onlyresidual.

> 
**Stock options granted to Directors, Chief Operating    Officers, and other Managers with strategic responsibilities**

| **Name**                                                          |                   | **Paolo Scaroni**              |      | **Claudio Descalzi**                                   |    | **Umberto Vergine**                                       |   | **Angelo Fanelli**                                     |   | **Other Managers with        strategic responsibilities** (2) |
|-------------------------------------------------------------------|------------------------|--------------------------------|-----------|--------------------------------------------------------|---------|-----------------------------------------------------------|--------|--------------------------------------------------------|--------|---------------------------------------------------------------|
|                                                              |                   |                                |      |                                                        |    |                                                           |   |                                                        |   |
| **Office**                                                        |                   | **CEO and General Manager**    |      | **Chief Operating Officer        of E&P Division** |    | **Chief Operating Officer        of G&P Division**(1) |   | **Chief Operating Officer        of R&M Division** |   |
|                                                              |                   |                           |      |                                                   |    |                                                      |   |                                                   |   |                                                               |
| Plan                                                              |                   | Eni         Stock Option Plans |      | Eni         Stock Option Plans                         |    | Eni         Stock Option Plans                            |   | Eni         Stock Option Plans                         |   | Eni Stock Option Plans                                        |
|                                                              |                   |                                |      |                                                        |    |                                                           |   |                                                        |   |                                                               |
| **Options held at the start of the year**                         |                   |                           |      |                                                   |    |                                                      |   |                                                   |   |                                                          |   |
| Number of        options                                          |                   |                           | 1,608,705 |                                                   | 144,355 |                                                      | 53,290 |                                                   | 71,595 |                                                          | 858,335 |
| Average exercise price                                            | (euro)                 |                           | 23.373    |                                                   | 23.679  |                                                      | 23.741 |                                                   | 23.688 |                                                          | 23.595 |
| Average        maturity                                           | (months)               |                           | 19        |                                                   | 20      |                                                      | 22     |                                                   | 21     |                                                          | 21 |
| **Options granted during the year**                               |                   |                           |      |                                                   |    |                                                      |   |                                                   |   |                                                          |   |
| Number of        options                                          |                   |                           |      |                                                   |    |                                                      |   |                                                   |   |                                                          |   |
| Exercise price                                                    | (euro)                 |                           |      |                                                   |    |                                                      |   |                                                   |   |                                                          |   |
| Period of        possible exercise                                | (from-to)              |                           |      |                                                   |    |                                                      |   |                                                   |   |                                                          |   |
| Fair value on grant date                                          | (euro)                 |                           |      |                                                   |    |                                                      |   |                                                   |   |                                                          |   |
| Grant date                                                        |                   |                           |      |                                                   |    |                                                      |   |                                                   |   |                                                          |   |
| Market price of underlying shares upon granting        of options | (euro)                 |                           |      |                                                   |    |                                                      |   |                                                   |   |                                                          |   |
| **Options        exercised during the year**                      |                   |                           |      |                                                   |    |                                                      |   |                                                   |   |                                                          |   |
| Number of options                                                 |                   |                           |      |                                                   |    |                                                      |   |                                                   |   |                                                          |   |
| Exercise        price                                             | (euro)                 |                           |      |                                                   |    |                                                      |   |                                                   |   |                                                          |   |
| Market price of underlying shares on exercise        date         | (euro)                 |                           |      |                                                   |    |                                                      |   |                                                   |   |                                                          |   |
| **Options        expired during the year**                        |                   |                           |      |                                                   |    |                                                      |   |                                                   |   |                                                          |   |
| Number of options                                                 |                   |                           | 320,070   |                                                   | 35,720  |                                                      | 9,870  |                                                   | 16,685 |                                                          | 200,850 |
| **Options        held at the end of the year**                    |                   |                           |      |                                                   |    |                                                      |   |                                                   |   |                                                          |   |
| Number of options                                                 |                   |                           | 1,288,635 |                                                   | 108,635 |                                                      | 43,420 |                                                   | 54,910 |                                                          | 657,485 |
| **Options        relevant to the year**                           |                   |                           |      |                                                   |    |                                                      |   |                                                   |   |                                                          |   |
| Fair value                                                        | (euro        thousand) |                           |      |                                                   |    |                                                      |   |                                                   |   |                                                          |   |
|                                                              |                   |                           |           |                                                   |         |                                                      |        |                                                   |        |                                                          |  |

----

| (1) |    | Chief        Operating Officer of G&P Division until December 4,        2012.                                                                                                                                                                                                                                                |
|-----|--------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| (2) |    | Managers who,        during the course of the year and with the Chief        Executive Officer and Chief Operating Officers of        Eni’s Divisions, were permanent members of the        Company Management Committee and the ones who report        directly to the Chief Executive Officer (thirteen        managers). |

> 
 

**Board practices**

*Corporate Governance*The corporate governance structure of Eni SpA follows theItalian traditional management and control model, wherebycorporate management is the responsibility of the Board ofDirectors, which is the core of the organizational system, whilesupervisory control functions are allocated to the Board ofStatutory Auditors. The Company's accounts are also independentlyaudited by an accredited Audit Firm appointed by theShareholders’ Meeting. On April 26, 2012, 

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Eni completed the adoption of the recommendations of the newCorporate Governance Code for listed companies (on the ItalianStock Exchange) of December 2011 (hereinafter "CorporateGovernance Code"), which replaced the previous 2006 editionof the Corporate Governance Code.

The names of Eni’s Directors, their positions, the yearwhen each of them was initially appointed as a Director and theirages are reported in the related table above.

*Board of Directors’ duties and responsibilities*The Board of Directors has the widest powers for the ordinaryand extraordinary administration of the Company in relation toits purpose. In a resolution dated May 6, 2011, the Board, whileexclusively reserving to itself the most important strategic,operational and organizational powers in addition to those thatcannot be delegated by law, appointed Paolo Scaroni as CEO andGeneral Manager, entrusting him with the widest powers for theordinary and extraordinary administration of the Company. In thesame resolution, the Board delegated to the Chairman, GiuseppeRecchi, powers to identify and promote integrated projects andinternational agreements of strategic importance, in accordancewith Article 24 of the By-laws.

In particular, exercising the powers as set out in theCorporate Governance Code – and in consultation with therelevant committees, the CEO, and/or the Chairman whereapplicable – the Board, among other tasks: defines thesystem of corporate governance of the Company and the Group;establishes the internal committees of the Board; assigns andrevokes powers granted to the CEO and to the Chairman and definesthe limits and procedures for exercising such powers; establishesthe fundamental guidelines for the organizational, administrativeand accounting structure of the Company and the internal controlsystem and risk management; examines and approves the Company andGroup’s strategic, industrial and financial plans andagreements, annual budgets and the semi-annual financial reportand the interim reports, as well as the Sustainability Report;receives information from Directors with proxies relative toactivities implemented during the exercising of their powers andreceives periodic half-year information from the internalcommittees of the Board; assesses the general management trendsof the Company and of the Group paying particular attention toconflicts of interest; examines and approves the operations ofthe Company and its subsidiaries which are significant from astrategic, economic and financial perspective, particularly withregards to situations in which one or more Directors retainpersonal or third party interests as well as related partiestransactions14; appoints and dismisses the ChiefOperating Officers, the Officer in charge of preparing financialreports and a Senior Executive Vice President of Internal Audit;defines a remuneration plan for top management of the Company andthe Group; resolves on the exercise of voting rights and on theappointment of members of corporate bodies of the primarysubsidiaries; formulates the proposals to present to theShareholders’ Meeting; and examines and decides on otherissues which Directors with delegated powers believe it isappropriate to present to the Board due to their particularrelevance or sensitivity. In accordance with Article 23.2 of theBy-laws, the Board also decides on: mergers and proportionaldemergers of companies in which Eni holds an equity interest ofmore than 90%; on the establishment and closing of branches; andon the amendment of the By-laws to comply with the provisions oflaw.

In accordance with the By-laws, the Chairman and the ChiefExecutive Officer retain representative powers for the Company.

*Directors’ independence*During its meeting of May 6, 2011 and, after an investigationby the Nomination Committee, at its meeting of February 14, 2012,the Board of Directors determined that the non-executiveDirectors Gatto, Lorenzi, Marchioni, Petri, Profumo, Resca andTaranto were independent.

These determinations were made by the Board on the basis ofstatements made by the Directors and other information availableto the Company, and taking into account the criteria ofindependence established in Italian regulations and the CorporateGovernance Code in force at that time. Director Resca wasconfirmed as being independent under the terms of the CorporateGovernance Code in force at that time as well, even though he hasheld the position for over nine years in the last twelve years15,because of his recognized independence of judgment. Withreference to the marital relationship of the Director Profumowith an employee of the Company, the Board believes that thisrelationship does not compromise the independence requirementsrequested by Corporate Governance Code in force at that time, inview of his ethical and professional integrity of this Directorand his international reputation. Director Gatto was confirmed asbeing independent even though he was appointed Chairman of theBoard of the Statutory Auditors of RAI SpA, company under commoncontrol with Eni by the Ministry of the Economy and Finance,because of the independence required to the Board of StatutoryAuditors and also for the particular discipline applicable to RAIwhich limits the power of control of the Ministry of the Economyand Finance.

----

| (14) |    | The Board of        Directors, on November 18, 2010, approved the Management        System Guideline (MSG) "Transactions involving        interests of directors and statutory auditors and        transactions with related parties", which has been        applied since January 1, 2011, to ensure transparency and        substantial and procedural fairness of transactions with        related parties. The Board modified this MSG on January        19, 2012. |
|------|--------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| (15) |    | Resca was        appointed Director of the Board for the first time in        2002.                                                                                                                                                                                                                                                                                                                                                                                              |

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After the evaluation of the Board at the meeting of February14, 2012, in compliance with the independence requirementscontained in the Corporate Governance Code (Article 3C4) whichestablishes that the Board of Directors shall assess theindependence of a Director every time a material circumstanceoccurs, the Nomination Committee investigated, in its meetings ofSeptember 20, 2012 and October 18, 2012, the independence ofDirector Profumo, who was appointed Chairman of the Board ofDirectors of Monte dei Paschi di Siena on April 27, 2012, takinginto account the business relations between Eni and that Bank.The Nomination Committee acquired documentation concerning thefinancial relationships between Eni and Monte dei Paschi di Sienaand the other information available to the Company, and confirmed16the independence of Director Profumo, determining that thesebusiness relations were not sufficient to undermine theindependence requirements set out in the Corporate GovernanceCode. The Board of Directors, on the basis of the investigationof the Nomination Committee, confirmed, on October 29, 2012, thatDirector Profumo was independent.

The Board of Statutory Auditors has always monitored thecorrect application of the criteria and procedures adopted by theBoard for assessing the independence of its members. Thoseindependence criteria may not be equivalent to the independencecriteria set forth by the NYSE listing standards applicable to aU.S. domestic company.

*Board Committees*The Board of Directors has established four internalcommittees to provide it with recommendations and advice: (a) theControl and Risk Committee17; (b) the CompensationCommittee; (c) the Nomination Committee; and (d) the Oil-GasEnergy Committee. The Control and Risk Committee, theCompensation Committee and the Nomination Committee arerecommended by the Corporate Governance Code. The composition,duties and operational procedures of these committees aregoverned by their rules, which are approved by the Board, incompliance with the criteria outlined in the Corporate GovernanceCode.

The committees provided for by the Corporate Governance Code(Control and Risk Committee, Nomination Committee andCompensation Committee) are composed of no fewer than threemembers and, in any case, less than a majority of members of theBoard. The Control and Risk Committee, the Compensation Committeeand the Oil-Gas Energy Committee are made up of non-executive,independent Directors. The Nomination Committee is made up ofnon-executive Directors, a majority of whom are independent incompliance with the Corporate Governance Code. In the exercise oftheir functions, the committees have the right to access anyinformation and Company functions necessary to perform theirduties. They are also provided with adequate financial resources,in accordance with the terms established by the Board ofDirectors, and can avail themselves of external advisers.

The Chairman of the Board of Statutory Auditors or a StatutoryAuditor designated by him, may participate in Control and RiskCommittee meetings. The Chairman of the Board, the CEO, the otherstanding Statutory Auditors and the Magistrate of the ItalianCourt of Auditors may also attend the Control and Risk Committeemeetings. Furthermore, the Committee may, through its Chairman,invite other persons, including other member of the Board ofDirectors or the Company structure, to attend the meetings inrelation to individual items on the agenda.

The Chairman of the Board of Statutory Auditors, or a standingStatutory Auditor designated by him, are invited to participatein Compensation Committee meetings. Other Statutory Auditors mayalso attend meetings in which the Committee is addressing issuesabout which the Board of Directors is required to obtain anopinion from the Board of Statutory Auditors. Company managers orother persons who, at the invitation of the Chairman of theCommittee, are called to provide information and or opinionsbased on their expertise on specific items on the agenda may alsoattend the meetings. No Director may take part in meetings of theCommittee during which Board proposals regarding his compensationare being discussed.

The Chairman of the Board of Directors and the CEO are invitedto attend Oil-Gas Energy Committee meetings and other Directorsmay also participate. The Chairman of the Board of StatutoryAuditors – or another standing Statutory Auditor designatedby the former – may also participate as well as otherindividuals, who need not be affiliated with Eni, at theinvitation of the Committee with regard to the specific items inthe agenda.

The CEO attends the Nomination Committee meetings. TheChairman of the Board of Statutory Auditors, or a StatutoryAuditor designated by him, may participate in Committee meetingsfor matters within the competence of the Board of StatutoryAuditors as well as other persons who, at the invitation of theCommittee itself, are called to provide information and oropinions based on their expertise on specific items in theagenda.

Minutes of all committee meetings are drafted by therespective secretaries. The current members of the Control andRisk Committee, Compensation Committee, Oil-Gas Energy Committeewere appointed by the Board of Directors on May 6, 2011. Thecurrent members of the Nomination Committee were appointed by theBoard of Directors on July 28, 2011.

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| (16) |    | The Director        involved in the investigation performed by the Nomination        Committee did not take part in the meeting.                                                                                                                |
|------|--------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| (17) |    | The Internal        Control Committee, created within the Board of Directors        for the first time on February 9, 1994, changed its name        to the "Control and Risk Committee" with a        Resolution dated July 31, 2012. |

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*Compensation Committee*Members: Mario Resca (Chairman), Carlo Cesare Gatto, RobertoPetri and Alessandro Profumo.

Established by the Board of Directors for the first time in1996, in accordance with the By-laws, the Committee providesrecommendations and advice to the Board of Directors. Morespecifically, the Committee: a) submits to the Board of Directorsfor its approval the Remuneration Report and, in particular, theremuneration policy for Directors and managers with strategicresponsibilities to be presented to the Shareholders’Meeting called to approve the financial statements, as providedfor by applicable law; b) presents proposals for the remunerationof the Chairman of the Board and the Chief Executive Officer,covering the various forms of compensation and benefits awarded;c) presents proposals for the remuneration of members of theBoard’s internal committees; d) examines the CEO’sindications and presents proposals for: (i) general criteria forcompensation of the managers with strategic responsibilities;(ii) annual and long-term incentive plans, including equity-basedplans; (iii) establishing performance targets and assessingresults for performance plans in connection with thedetermination of the variable portion of the compensation forDirectors with delegated powers and with the implementation ofincentive plans; e) monitors the execution of Board resolutionsregarding remuneration matters; f) periodically evaluates theadequacy, overall consistency and actual implementation of theadopted policy, as described in letter a) above, formulatingproposals on the topic for the Board of Directors;g) performs the tasks required under the Company’sprocedures for handling related party transactions; h) reports tothe Board, at least once every six months and no later than thedeadline for the approval of the annual financial statements andthe semi-annual financial report, on its activities at the Boardmeeting indicated by the Chairman of the Board of Directors; andi) reports through its Chairman or another Committee memberdesignated by the Chairman on its operational procedures to theShareholders’ Meeting called to approve the financialstatements.

During 2012, the Compensation Committee met four times, withan attendance rate of 100% of its members and the main topicsdiscussed in the first part of the year were: (i) periodicalevaluation of the remuneration policy carried out in 2011, evenfor the definition of the proposal guidelines of remunerationpolicy 2012; (ii) evaluation of the attainment of Eni’s 2011management objectives and definition of 2012 performanceobjectives for the purposes of variable Incentive Plans; (iii)establishment of the proposal regarding the 2012 DeferredMonetary Incentive Plan for the CEO and General Manager and forother executives; and (iv) examination of the remuneration report2012. During the second part of the year, the Committee examinedthe results of the vote of the Shareholder’s Meeting on theremuneration policy for 2012 and the planned guidelines for thepreparation of the 2013 Remuneration Report. The Committee alsoformulated the proposal concerning the fulfillment of theLong-Term Monetary Incentive Plan for the CEO and General Managerand for critical management personnel.

The composition and appointment, as well as duties andoperational rules, of the Committee are governed by rulesapproved by the Board of Directors on June 1, 2011, and amendedon December 15, 2011 and on October 29, 2012.

*Control and Risk Committee*18Members: Alessandro Lorenzi (Chairman), Carlo Cesare Gatto,Paolo Marchioni and Francesco Taranto.

The Control and Risk Committee is entrusted with supporting,on the basis of an appropriate control process, the Board ofDirectors in evaluating and making decisions concerning theinternal control and risk management system and in approving theperiodic financial reports. It is entirely made up ofnon-executive and independent Directors19 who possessthe necessary expertise consistent with the duties they arerequired to perform20.

The Committee advises the Board of Directors and specificallyissues its prior opinion: a) and drafts recommendationsconcerning the guidelines for the internal control and riskmanagement system so that the main risks faced by the Company andits subsidiaries can be correctly identified and appropriatelymeasured, managed and monitored, and determines the degree ofcompatibility of such risks with the management of the Company ina manner consistent with its stated strategic objectives; b) onthe evaluation, performed at least once a year, of the adequacyof the internal control and risk management system, takingaccount of the characteristics of the Company and its riskprofile, as well as its effectiveness. To this end, at least onceevery six months it reports to the Board of Directors, on theoccasion of the approval of the annual and semi-annual financialreports, on its activities and on the adequacy of the internalcontrol and risk management system at the meeting of the Board ofDirectors indicated by the Chairman of the Board of Directors; c)on the approval, at least once a year, of the Audit Plan preparedby the Senior Executive Vice President of the Internal AuditDepartment; d) on the description, in the annual CorporateGovernance Report, of the main features of the internal controland risk management system, providing its evaluation of theoverall adequacy of 

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| (18) |    | The Internal        Control Committee, created within the Board of Directors        for the first time on February 9, 1994, changed its name        to "Control and Risk Committee" on July 31,        2012.                                                                                                                                                                                                                                                                                                                                         |
|------|--------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| (19) |    | In accordance        with the rules of the Control and Risk Committee, the        Committee is made up of three to four non-executive        Directors, all of whom are independent. Alternatively,        the Committee may be made up of non-executive Directors a        majority of whom shall be independent. In the latter        case, the Chairman of the Committee shall be chosen from        among the independent Directors. In any case, the number        of members shall be fewer than the number representing a        majority on the Board. |
| (20) |    | The        governance system put in place by Eni establishes that at        least two members of the Committee – and not just        one as recommend by the Corporate Governance Code for        listed companies – must possess adequate experience        on financial and accounting matters, as assessed by the        Board of Directors at the time of their appointment.                                                                                                                                                                     |

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the system itself; e) on the evaluation of the findingsreported by the Audit Firm in the recommendations letter it mayissue and in the latter’s report on the main issues arisingduring the audit; g) on specific aspects concerning theidentification of the main risks faced by the Company as well ason the design, implementation and management of the internalcontrol and risk management system; and h) on the adoption andamendment of the rules on the transparency and the substantiveand procedural fairness of transactions with related parties andthose in which a Director or Statutory Auditor holds a personalinterest or an interest on behalf of a third party, whileperforming the additional duties assigned it by the Board ofDirectors, including examining and issuing an evaluation onspecific types of transactions, except for those relating tocompensation.

In addition, the Committee, in assisting the Board ofDirectors: (i) evaluates, together with the officer in charge ofpreparing financial reports and after having consulted the AuditFirm and the Board of Statutory Auditors, the proper applicationof accounting standards and their consistency in preparing theconsolidated financial statements, prior to their approval by theBoard of Directors; (ii) examines and evaluates theappropriateness of the powers and resources assigned to theofficer in charge of preparing financial reports and, also forthe purposes of overseeing the proper application of accountingstandards and their consistency, performs the duties assigned itunder the MSG on "Eni’s internal control system overfinancial reporting", including examining the report on theinternal control system for financial reporting prepared by theofficer in charge of preparing financial reports at the time ofthe approval of the consolidated annual and semi-annual financialstatements; and (iii) monitors the independence, adequacy,efficiency and effectiveness of the Internal Audit Department andoversees its activities with respect to the Board ofDirectors’ duties in this area, ensuring that they areperformed with the necessary independence and required level ofobjectivity, competence and professional diligence, in accordancewith the Code of Ethics of Eni SpA and international standards.Among its other duties, the Committee examines: a) the periodicreport prepared by the Senior Executive Vice President of theInternal Audit Department containing adequate information on theactivities carried out, on the manner in which risk management isconducted and on compliance with risk containment plans, as wellas the assessment of the appropriateness of the internal controland risk management system; b) the reports prepared promptly bythe Senior Executive Vice President of the Internal AuditDepartment on events of particular importance; and c) theinformation received from the Senior Executive Vice President ofthe Internal Audit Department and promptly reports its assessmentto the Board of Directors in the case of significant deficienciesin the system for preventing irregularities and fraudulent acts,and irregularities or fraudulent acts committed by managementpersonnel or by employees that perform important roles in thedesign or operation of the internal control and risk managementsystem.

The Committee may also ask the Internal Audit Department toperform audits of specific operational areas, providingsimultaneous notice to the Chairman of the Board of StatutoryAuditors. The Committee also examines and assesses: (i)communications and information received from the Board ofStatutory Auditors and its members regarding the internal controland risk management system, including those concerning thefindings of enquiries conducted by the Internal Audit Departmentin connection with reports received (whistleblowing), includinganonymous reports; (ii) periodic reports issued byEni’s Watch Structure, including in its capacity asGuarantor of the Code of Ethics; (iii) information on theinternal control and risk management system, including thatprovided in the course of periodic meetings with the competentCompany structures; and (iv) enquiries and reviews concerning theinternal control and risk management system carried out by thirdparties.

The composition and appointment, as well as duties andoperational procedures of the Committee, are governed by rulesapproved by the Board of Directors on June 1, 2011 and amended onJuly 31, 2012.

 

*Nomination Committee*Members: Giuseppe Recchi (Chairman), Alessandro Lorenzi,Alessandro Profumo and Mario Resca.

On July 28, 2011, the Board of Directors of Eni establishedthe Nomination Committee, chaired by the Chairman of the Board ofDirectors. The Committee is made up of three to four Directors, amajority of whom are independent.

The Committee provides the Board of Directors withrecommendations and advice. In particular the Committee:a) assists the Board of Directors in formulating thecriteria for the appointment of persons indicated in followingletter b) and of members of the other boards and bodies ofEni’s subsidiaries and associated companies; b) providesevaluations to the Board of Directors on the appointment ofexecutives and members of the boards and bodies of the Companyand of its subsidiaries, proposed by the Chief Executive Officer,whose appointment fall under the Boards’ responsibility andoversees the associated succession plans. Where possible andappropriate, in relation with the shareholders’ structure,the Committee proposes to the Board of Directors the successionplan concerning the Chief Executive Officer; c) acting uponproposal of the Chief Executive Officer, examines and evaluatescriteria governing the succession plan for the Company’s keymanagement personnel; d) proposes candidates to serve asDirectors on the Board of Directors in the event one or morepositions need to be filled during the course of the financialyear (Article 2386, first paragraph, of the Italian Civil Code),ensuring compliance with the requirements on the minimum numberof independent Directors and of the percentage reserved for theless represented gender; e) proposes to the Board of Directorscandidates for the position of Director to be submitted to theShareholders’ Meeting of the Company, taking account of anyrecommendation received from shareholders, in the event it is notpossible to draw the required number 

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of Directors from the slates presented by shareholders; f)oversees the annual self-assessment program on the performance ofthe Board of Directors and its Committees, in compliance with theCorporate Governance Code, and on the basis of the results of theself-assessment, provides its opinions to the Board of Directorsregarding the size and composition of the Board or its Committeesas well as the skills and professional qualifications it feelsshould be represented on the same, so that the Board itself cangive its opinion to the shareholders prior to the appointment ofthe new Board; g) proposes to the Board of Directors the slate ofcandidates for the position of Director, to be submitted to theShareholders’ Meeting if the Board decides to opt for theprocess envisaged in Article 17.3 of the By-laws; h) incompliance with the Corporate Governance Code, proposes to theBoard of Directors guidelines regarding the maximum number ofpositions of Director or statutory auditor that a CompanyDirector may hold and performs the associated periodic checks andevaluations to be submitted to the Board; i) periodicallyverifies that the Directors satisfy the independence andintegrity requirements and ascertains the absence ofcircumstances that would render them incompatible or ineligible;j) provides its opinion to the Board of Directors on anyactivities carried out by the Directors in competition with theCompany; and k) reports to the Board of Directors, at least onceevery six months and not later than the deadline for the approvalof the Annual Financial Statements and of the semi-annualFinancial Report, on the activity carried out, as well as on theadequacy of the appointment system, at the Board meetingindicated by the Chairman of the Board of Directors.

The composition, appointment, duties and operationalprocedures of the Nomination Committee are governed by rulesapproved by the Board of Directors on September 29, 2011 andamended on October 29, 2012.

 

*Board of Statutory Auditors*The current Board of Statutory Auditors was appointed by theOrdinary Shareholders’ Meeting of May 5, 2011 for a term ofthree financial years. The Board’s term will thereforeexpire with the Shareholders’ Meeting called to approve theFinancial Statements for the year ending December 31, 2013.

| **Name**               |   | **Position**             |   | **Year first appointed to Board        of Statutory Auditors** |
|------------------------|--------|--------------------------|--------|----------------------------------------------------------------|
|                        |   |                          |   |                                                                |
| Ugo        Marinelli   |   | Chairman                 |   | 2008                                                           |
| Roberto Ferranti       |   | Auditor                  |   | 2008                                                           |
| Paolo        Fumagalli |   | Auditor                  |   | 2011                                                           |
| Renato Righetti        |   | Auditor                  |   | 2011                                                           |
| Giorgio        Silva   |   | Auditor                  |   | 2005                                                           |
| Francesco Bilotti      |   | Alternate Auditor        |   | 2005                                                           |
| Maurizio        Lauri  |   | Alternate        Auditor |   | 2011                                                           |
|                        |   |                          |   |                                                                |

Roberto Ferranti, Paolo Fumagalli, Renato Righetti andFrancesco Bilotti were candidates in the list presented by theMinistry of the Economy and Finance; Ugo Marinelli, Giorgio Silvaand Maurizio Lauri were candidates in the list presented bynon-controlling shareholders (institutional investors).

The Auditors are appointed by means of a slate voting system:the lists are presented by shareholders representing at least0.5% of the share capital. Two standing Statutory Auditors andone Alternate Auditor are selected from among the candidates ofthe non-controlling shareholders. The Chairman of the Board ofStatutory Auditors is appointed by the Shareholders’ Meetingfrom among the Auditors elected by the non-controllingshareholders.

The Auditors must satisfy the independence, professional andintegrity requirements established by Italian regulations.Article 28 of the By-laws specifies that the professionalismrequirements may be fulfilled by having at least three years in:(i) professional or teaching activities pertaining to commerciallaw, business economics and corporate finance, or (ii) experiencein executive positions in the fields of engineering and geology.U.S. regulations for Audit Committees require that at least onemember of the Board of Statutory Auditors shall be a financialexpert and have adequate knowledge of the functions of the AuditCommittee and experience in the analysis and application ofgenerally accepted accounting standards, preparation and auditingof financial statements and internal control processes.

Pursuant to the Consolidated Law on Financial Intermediation,the Board of Statutory Auditors monitors: (i) compliancewith the law and the Company’s By-laws; (ii) observance ofthe principles of sound administration; (iii) theappropriateness of the Company’s organizational structurefor matters within the scope of the Board’s authority, theadequacy of the internal control system and the administrativeand accounting system and the reliability of the latter inaccurately representing the Company’s transactions; (iv) theprocedures for implementing the corporate governance rulesprovided for in the Corporate Governance Code, which the Companyhas adopted; and (v) the adequacy of the instructions imparted bythe Company to its subsidiaries, in order to guarantee fullcompliance with legal reporting requirements.

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In addition, pursuant to Article 19 of Legislative Decree No.39/2010, in its role as the "internal control and financialauditing committee" the Board of Statutory Auditors overseesthe following: a) the financial reporting process; b) theefficacy of internal control, internal audit (where applicable)and risk management systems; c) the auditing of the annualfinancial statements and consolidated financial statements; andd) the independence of the external auditor or the Audit Firm, inparticular with regard to the provision of non-audit services tothe entity subject to financial auditing.

The responsibilities assigned under the Decree to the"internal control and financial auditing committee" areconsistent and substantively in line with the duties alreadyassigned to the Board of Statutory Auditors of Eni, with specificconsideration of its role as Audit Committee pursuant to the"U.S. Sarbanes-Oxley Act" (discussed in greater detailbelow).

As already set forth in the Consolidated Law on FinancialIntermediation and currently regulated by Article 13 ofLegislative Decree No. 39/2010, the Board of Statutory Auditorssubmits a reasoned opinion to the Shareholders’ Meeting onthe selection of the external auditors and the determination ofthe associated fees.

| Furthermore, pursuant to Article 19,        paragraph 1, letters c) and d) of Legislative Decree No.        39/2010, the Board of Statutory Auditors supervises the        auditing activities and the independence of the Audit        Firm, verifying compliance with all applicable        regulations as well as the nature and scale of any        services other than financial auditing services provided        to the Eni Group, either directly or through companies        belonging to its network. In accordance with Article 153        of the Consolidated Law on Finance, the Board of        Statutory Auditors presents the results of its        supervisory activity in a report. This report is made        available in its entirety to the public within the time        limits applicable to the financial statements. On March        22, 2005, the Board of Directors, electing the exemption        granted by the U.S. Securities and Exchange Commission        (SEC) applicable to foreign issuers listed on the        regulated U.S. markets, designated the Board of Statutory        Auditors as the body that, as from June 1, 2005,        performs, to the extent permitted under Italian        regulations, the functions attributed to the Audit        Committee of foreign issuers by the Sarbanes-Oxley Act        and SEC rules. On June 15, 2005, the Board of Statutory        Auditors approved the internal rules concerning its        performance of the duties assigned to it under that U.S.        legislation, the text of which is available on Eni’s        website. The key functions performed by the Board of        Statutory Auditors acting as an audit committee as        provided for by SEC rules are as follows: |
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| • |   | evaluating the offers        submitted by external auditors for their engagement and        providing a reasoned recommendation to the        Shareholders’ Meeting concerning the engagement or        removal of the external auditor;                                                                                                                                                                                                                                                                                                                                                                        |
|--------|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| • |   | overseeing the work of the        external auditor engaged to audit the account or        performing other audit, review or certification services;                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |
| • |   | making recommendations to        the Board of Directors on the resolution of disagreements        between management and the auditor regarding financial        reporting;                                                                                                                                                                                                                                                                                                                                                                                                                                           |
| • |   | approving the procedures        for: (a) the receipt, retention, and treatment of        complaints received by the Company regarding accounting,        internal accounting controls, or auditing matters; and        (b) the confidential, anonymous submission by employees        of the Company of concerns regarding questionable        accounting or auditing matters;                                                                                                                                                                                                                                       |
| • |   | approving the procedures for        the pre-approval of specifically identified admissible        non-audit services and examining the disclosures on the        execution of the authorized services;                                                                                                                                                                                                                                                                                                                                                                                                               |
| • |   | evaluating requests to use        the external auditor firm engaged to perform audit        services for admissible non-audit services and providing        its opinion to the Board of Directors;                                                                                                                                                                                                                                                                                                                                                                                                                   |
| • |   | examining the periodical        reports from the external auditor relating to: (a) all        critical accounting policies and practices to be used;        (b) all alternative treatments of financial information        within generally accepted accounting principles that have        been discussed with management officials of the Company,        ramifications of the use of such alternative disclosures        and treatments, and the treatment preferred by the        external auditor; and (c) other material written        communication between the external auditor and        management; |
| • |   | examining reports from the        CEO and the CFO concerning any significant deficiency in        the design or operation of internal controls which are        reasonably likely to adversely affect the Company’s        ability to record, process, summarize and report        financial information and any material weakness in        internal controls; and                                                                                                                                                                                                                                             |
| • |   | examining reports from the        CEO and the CFO concerning any fraud that involves        management or other employees who have a significant role        in the Company’s internal controls.                                                                                                                                                                                                                                                                                                                                                                                                                |

The Board of Statutory Auditors, in the execution of itsfunctions, is supported by Company’s departments, inparticular the Internal Audit Department and the Administrativeand Financial Statement Department.

 

*Eni Watch Structure and Model 231*In accordance with the Italian regulations concerning the"administrative liability of legal entities deriving fromcriminal offences", contained in Legislative Decree No. 231of June 8, 2001 (henceforth, "Legislative Decree No.231/2001"), legal entities, including corporations, may beheld liable – and consequently fined or subject toprohibitions – in relation to certain crimes attempted orcommitted in Italy or abroad in the interest or for the benefitof the Company by individuals in high-ranking positions and/orpersons managed or supervised by an individual in an high-rankingposition. The companies may, in any case, adopt organizational,management and control models designed to prevent these crimes.With regards to this issue, Eni SpA’s Board of Directors– in its meetings of December 15, 2003 and 

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January 28, 2004 – approved an organizational, managerialand control model pursuant to Legislative Decree No. 231 of 2001("Model 231") and created the associated WatchStructure. Moreover, as a result of changes in the Italianlegislation governing the matter and of the Companyorganizational structures, on March 14, 2008, the Board ofDirector updated Model 231 and adopted Eni’s Code of Ethics– replacing the previous version of the Eni Code of Conductof 1998 – which represents a clear definition of the valuesystem that Eni recognizes, accepts and upholds and theresponsibilities that Eni assumes internally and externally inorder to ensure that all business activities are conducted incompliance with laws, in a context of fair competition, withhonesty, integrity, correctness and in good faith, respecting thelegitimate interests of all stakeholders with which Eni relateson an ongoing basis: shareholders, employees, suppliers,customers, commercial and financial partners, and the localcommunities and institutions of the countries where Eni operates.The synergies between the Code of Ethics – an integral partand essential general principle of Model 231 – and Model 231are highlighted by the assignment to the Eni Watch Structureestablished by Model 231 the function of Guarantor of the Code ofEthics. The composition of the Eni Watch Structure, initiallycomposed of only three members, was modified in 2007 with theinclusion of two external members, one of whom was appointed asChairman of the Eni Watch Structure selected from amongacademics, professionals of proven authority and expertise ineconomic and business management issues. The internal members arethe Senior Executive Vice President Legal Affairs, Executive VicePresident Human Resources and Organization and Senior ExecutiveVice President Internal Audit of the Company. On May 19, 2011,the Board of Directors, with the favorable opinion of the Boardof Statutory Auditors, appointed the current members of the WatchStructure.

 

*Audit Firm*The auditing of the Company’s accounts is entrusted, inaccordance with the law, to an independent Audit Firm appointedby the Shareholders’ Meeting on the basis of a reasonedrecommendation of the Board of Statutory Auditors.

In addition to the obligations set forth in national auditingregulations, Eni’s listing on the New York Stock Exchangerequires that the Audit Firm issue a report on the Annual Reporton Form 20-F, in compliance with the auditing principlesgenerally accepted in the United States. Moreover, the Audit Firmis required to issue an opinion on the efficacy of the internalcontrol system applied to financial reporting.

For the most part, the subsidiaries’ financial statementsare subject to auditing by Eni’s Audit Firm. Moreover,Eni’s Audit Firm, for the purpose of issuing an opinion onthe consolidated financial statements, assumes responsibility forthe auditing activities performed by other audit firms withrespect to subsidiaries’ financial statements, which, takentogether, account for an immaterial share of consolidated assetsand revenues.

Acting on the Board of Statutory Auditors’ reasonedproposal, the Shareholders’ Meeting of April 29, 2010appointed Reconta Ernst & Young SpA for the financial years2010-2018.

 

*Court of Auditors ("Corte dei conti")*The financial management of Eni is subject to the control ofthe Court of Auditors ("Corte dei conti") in order topreserve the integrity of the public finances. This work isperformed by the magistrate of the Court of Auditors, RaffaeleSquitieri (whose alternate is Amedeo Federici), on the basis ofthe resolution approved on October 28, 2009 by the PresidentialCouncil of the Court of Auditors. Magistrate of the Court attendsthe meetings of the Board of Directors, of the Board of StatutoryAuditors and of the Control and Risk Committee.

 

**Employees**

As of December 31, 2012, Eni had a total of 77,838 employees,an increase of 5,264 employees, or up 7.3% from December 31,2011, which reflects an increase of 5,518 employees workingoutside Italy and a decrease of 254 employees hired in Italy.

During the year, 1,599 persons left their job at Eni in Italy(2.1% of all Group employees), of these 937 had an open-endcontract and 662 a fixed-term contract. Declines were registeredin all business Divisions due to efficiency actions.

The process of improvement in the quality mix of employeescontinued in 2012 with the hiring of 1,601 persons, of which 605had fixed-term contracts. A total of 996 persons were hired withopen-ended and apprenticeship contracts, most of them withuniversity qualifications (697 persons).

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Employees hired and working outside Italy were 51,034 (65.6%of all Group employees), an increase of 5,518 persons, mainly inthe Engineering & Construction segment due to new contracts,in Exploration & Production segment due to the expansion ofsome operating units and in sourcing of contract people, and inBelgium in the Gas & Power segment (Nuon Belgium).

|   |   | **2010** |   | **2011** |   | **2012** |
|--------|--------|----------|--------|----------|--------|----------|
|   |   |          |   |          |   |          |

|   |   | **(units)** |
|--------|--------|-------------|

| Exploration & Production      |   | 10,276     |   | 10,425     |   | 11,304     |
|-----------------------------------|--------|------------|--------|------------|--------|------------|
| Gas &        Power (1)        |   | 5,072      |   | 4,795      |   | 4,752      |
| Refining & Marketing          |   | 8,022      |   | 7,591      |   | 7,125      |
| Chemicals                         |   | 5,972      |   | 5,804      |   | 5,668      |
| Engineering & Construction    |   | 38,826     |   | 38,561     |   | 43,387     |
| Other        activities           |   | 939        |   | 880        |   | 871        |
| Corporate and financial companies |   | 4,661      |   | 4,518      |   | 4,731      |
|                              |   |            |   |            |   |            |
|                              |   | **73,768** |   | **72,574** |   | **77,838** |
|                              |   |            |   |            |   |            |

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| (1) |    | Following the        divestment of a significant stake in Snam and its        deconsolidation closed in 2012, employees of the G&P        business segment include Marketing and International        transport activities. To allow a homogeneous comparison,        the presentation of prior year date has been modified        accordingly. |
|-----|--------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

 

 

 

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The table below sets forth Eni’s employees as of December31, 2010, 2011 and 2012 in Italy and outside Italy:

|   |   | **2010** |   | **2011** |   | **2012** |
|--------|--------|----------|--------|----------|--------|----------|
|   |   |          |   |          |   |          |

|   |   | **(units)** |
|--------|--------|-------------|

| Exploration & Production      | Italy                |   | 3,906      |   | 3,797      |   | 3,933      |
|-----------------------------------|----------------------|--------|------------|--------|------------|--------|------------|
|                              | Outside        Italy |   | 6,370      |   | 6,628      |   | 7,371      |
|                              |                 |   |            |   |            |   |            |
|                              |                 |   | 10,276     |   | 10,425     |   | 11,304     |
|                              |                 |   |            |   |            |   |            |
| Gas &        Power (1)        | Italy                |   | 2,479      |   | 2,310      |   | 2,126      |
|                              | Outside Italy        |   | 2,593      |   | 2,485      |   | 2,626      |
|                              |                 |   |            |   |            |   |            |
|                              |                 |   | 5,072      |   | 4,795      |   | 4,752      |
|                              |                 |   |            |   |            |   |            |
| Refining & Marketing          | Italy                |   | 6,162      |   | 5,790      |   | 5,505      |
|                              | Outside        Italy |   | 1,860      |   | 1,801      |   | 1,620      |
|                              |                 |   |            |   |            |   |            |
|                              |                 |   | 8,022      |   | 7,591      |   | 7,125      |
|                              |                 |   |            |   |            |   |            |
| Chemicals                         | Italy                |   | 4,903      |   | 4,750      |   | 4,606      |
|                              | Outside Italy        |   | 1,069      |   | 1,054      |   | 1,062      |
|                              |                 |   |            |   |            |   |            |
|                              |                 |   | 5,972      |   | 5,804      |   | 5,668      |
|                              |                 |   |            |   |            |   |            |
| Engineering & Construction    | Italy                |   | 4,915      |   | 5,197      |   | 5,186      |
|                              | Outside        Italy |   | 33,911     |   | 33,364     |   | 38,201     |
|                              |                 |   |            |   |            |   |            |
|                              |                 |   | 38,826     |   | 38,561     |   | 43,387     |
|                              |                 |   |            |   |            |   |            |
| Other        activities           | Italy                |   | 939        |   | 880        |   | 871        |
|                              | Outside Italy        |   | -          |   | -          |   | -          |
|                              |                 |   |            |   |            |   |            |
|                              |                 |   | 939        |   | 880        |   | 871        |
|                              |                 |   |            |   |            |   |            |
| Corporate and financial companies | Italy                |   | 4,497      |   | 4,334      |   | 4,577      |
|                              | Outside        Italy |   | 164        |   | 184        |   | 154        |
|                              |                 |   |            |   |            |   |            |
|                              |                 |   | 4,661      |   | 4,518      |   | 4,731      |
|                              |                 |   |            |   |            |   |            |
| **Total**                         | Italy                |   | 27,801     |   | 27,058     |   | 26,804     |
|                              | Outside Italy        |   | 45,967     |   | 45,516     |   | 51,034     |
|                              |                 |   |            |   |            |   |            |
|                              |                 |   | **73,768** |   | **72,574** |   | **77,838** |
|                              |                 |   |            |   |            |   |            |
| of which senior managers          |                 |   | 1,454      |   | 1,468      |   | 1,474      |
|                              |                 |   |            |   |            |   |            |

----

| (1) |    | Following the        divestment of a significant stake in Snam and its        deconsolidation closed in 2012, employees of the G&P        business segment include Marketing and International        transport activities. To allow a homogeneous comparison,        the presentation of prior year date has been modified        accordingly. |
|-----|--------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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**Share ownership**

As of February 28, 2013, the cumulative number of shares ownedby Eni’s directors, statutory auditors and senior managers,including the three Chief Operating Officers, was 305,696 lessthan 0.1% of Eni’s share capital outstanding as of the samedata. Eni issues only ordinary shares, each bearing one-voteright; therefore shares held by those persons have no differentvoting rights. The break-down of share ownership for each ofthose persons is provided below.

| **Name** | **Position** | **Number of shares owned** |   | **Options granted** |
|----------|--------------|----------------------------|--------|---------------------|
|     |         |                            |   |                     |

| **Board        of Directors**          |   |                                                   |   |       |   |        |
|----------------------------------------|--------|--------------------------------------------------------|--------|------------|--------|-------------|
| Giuseppe Recchi                        |   | Chairman                                               |   | 42,000     |   |        |
| Paolo        Scaroni                   |   | CEO and        COO of Eni                              |   | 91,250     |   | 1,288,635   |
| Carlo Cesare Gatto                     |   | Director                                               |   | 6,800      |   |        |
| Paolo        Marchioni                 |   | Director                                               |   | 1,500      |   |        |
| Alessandro Profumo                     |   | Director                                               |   |       |   | 7,195       |
| Mario        Resca                     |   | Director                                               |   | 3,900      |   |        |
| Francesco Taranto                      |   | Director                                               |   | 500        |   |        |
| **Chief        Executive Officers**    |   |                                                   |   |       |   |        |
| Claudio Descalzi                       |   | Chief Operating Officer        of the E&P Division |   | 39,455     |   | 108,635     |
| Angelo        Fanelli                  |   | Chief        Operating Officer of the R&M Division |   | 30,800     |   | 4,910       |
| Umberto Vergine (*)                    |   | Chief Operating Officer        of the G&P Division |   | 13,764     |   | 43,420      |
| **Board        of Statutory Auditors** |   |                                                   |   | **7,454**  |   |        |
| **Senior managers**                    |   |                                                   |   | **68,273** |   | **657,485** |
|                                        |   |                                                        |   |            |   |             |

----

| (*) | i | In charge        until December 5, 2012. |
|-----|---|------------------------------------------|

 

 

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**Item 7. MAJOR SHAREHOLDERS AND RELATED PARTYTRANSACTIONS**

**Major Shareholders**

The Ministry of Economy and Finance controls Eni as a resultof shares held directly and indirectly through Cassa Depositi ePrestiti SpA ("CDP"), in which the Ministry of Economyand Finance holds a 70% stake. As of March 18, 2013, the totalamount of Eni SpA’s voting securities owned by theseshareholders was:

| **Title        of class** |   | **Number of shares owned** |   | **Percent of class** |
|---------------------------|--------|----------------------------|--------|----------------------|
|                           |   |                            |   |                      |

| Ministry of Economy and Finance      |   | 157,552,137 |   | 4.34  |   |
|--------------------------------------|--------|-------------|--------|-------|--------|
| Cassa        Depositi e Prestiti SpA |   | 936,179,478 |   | 25.76 |   |

|  |   |  |   |  |
|--|--------|--|--------|--|

The following table shows the percentage of Eni’s sharecapital owned directly or indirectly by subjects that as of March18, 2013 have notified that their holding exceeds the thresholdof 2% pursuant to Article 120 of Italian ConsolidatedLaw on Financial Intermediation and to Consob Resolution No.11971/99 (Consob Regulations on Issuers). Holdings notifiedbefore July 16, 2012 have been recalculated (see figures initalics) based on No. 3,634,185,330 shares representingEni’s current share capital following the cancellation oftreasury shares approved by the Eni Shareholders’ Meeting ofJuly 16, 2012.

| **Title        of class** |   | **Number of shares owned** |   | **Percent of class** |
|---------------------------|--------|----------------------------|--------|----------------------|
|                           |   |                            |   |                      |

| BNP        Paribas Group |   | 91,529,423 |   | 2.52 |  (a) |
|--------------------------|--------|------------|--------|------|-----------|

|  |   |  |   |  |
|--|--------|--|--------|--|

----

| (a) | i | Direct and        indirect holdings, of which 0.42% without voting        rights. |
|-----|---|-----------------------------------------------------------------------------------|

The Ministry of Economy and Finance, in agreement with theMinistry of Economic Development, pursuant to Article 6.2 of theBy-laws and to the special rules set out in Law No. 474/1994,retains certain special powers over Eni. See "Item 10 –Additional information – Limitations on changes in controlof the Company (Special Powers of the Italian State)". As ofMarch 18, 2013 there were 35,890,018 ADRs, each representing twoEni ordinary shares outstanding corresponding to approximately2.0% of Eni’s share capital. See "Item 9 – Theoffer and the listing".

 

**Related party transactions**

In the ordinary course of its business, Eni enters intotransactions concerning the exchange of goods, provision ofservices and financing with non-consolidated subsidiaries andaffiliates as well as other companies owned or controlled by theItalian Government. All such transactions are conducted on anarm’s length basis and in the interest of Eni companies.

Amounts and types of trade and financial transactions withrelated parties and their impact on consolidated earnings andcash flow, and on the Group’s assets and financial conditionare reported in "Item 18 – note 42 of the Notes to theConsolidated Financial Statements".

On October 15, 2012, Eni divested a stake of 30% less one shareof the voting capital in its Snam subsidiary to Cassa Depositi ePrestiti SpA (CDP), an entity controlled by the Italian Ministryof Economy and Finance. At the date of the transaction, thecounterparty CDP held a stake in Eni that gave CDP a significantinfluence over the Company and was under common control of theItalian Ministry for Economy and Finance’s. Consequently,the transaction qualified as material transaction with a relatedparty. Furthermore, because the value of the transaction wasabove certain established thresholds applicable to transactionswith related parties pursuant to Italian listing standardsprovided by the Consob Regulation (No. 17221 of March 12, 2010 asupdated by Regulation No. 17389 of June 23, 2012), thetransaction was reviewed in accordance to the internal proceduresthat the Company has adopted to ensure fairness, transparency andcorrectness for similar transactions in line with Consobguidelines. That procedure is retrievable at the Company websiteeni.com in the section "Corporate Governance". For afull description of the transaction with CDP see "Item 4– Significant transactions".

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**Item 8. FINANCIAL INFORMATION**

**Consolidated Statements and other financialinformation**

See "Item 18 – Financial Statements".

 

> 
***Legal proceedings***

Eni is a party to a number of civil actions and administrativearbitral and other judicial proceedings arising in the ordinarycourse of business. Based on information available to date, andtaking into account the existing risk provisions, Eni believesthat the foregoing will not have an adverse effect on Eni’sConsolidated Financial Statements.

For a description of legal proceedings in which Eni isinvolved and which may affect Eni’s financial position andresults of operations see "Item 18 – note 34 of theNotes to the Consolidated Financial Statements".

 

> 
***Dividends***

Eni’s dividend policy in future periods, and thesustainability of the current amount of dividends over the nextfour-year period, will depend upon a number of factors includingfuture levels of profitability and cash flow provided byoperating activities, a sound balance sheet structure, capitalexpenditures and development plans, in light of the "Riskfactors" set out in Item 3. The parent company’s netprofit and, therefore, the amounts of earnings available for thepayment of dividends will also depend on the level of dividendsreceived from Eni’s subsidiaries. However, given theCompany’s changed business profile which entails both moregrowth options and more volatile results, as well as and improvedbalance sheet, management plans to implement a new dividendpolice. The new dividend policy contemplates a progressive,growing dividend at a rate which is expected to be set takinginto account Eni’s underlying earnings and cash flow growthas well as capital expenditure requirements and the targetedfinancial structure. Management will also evaluate theachievement of the targeted production levels in the Exploration& Production segment, the status of renegotiations at gaslong-term supply contracts in the Gas & Power segment and thedelivery on efficiency gains in the downstream businesses. Thisdividend policy is based on management’s planningassumptions for oil prices at 90 $/BBL in the 2013-2016 periodand a gradual European demand recovery.

Management intends to propose to the Annual Shareholders’Meeting scheduled on May 10, 2013, the distribution of a dividendof euro 1.08 per share for fiscal year 2012, of which euro 0.54was already paid as interim dividend in September 2012. Totalcash outlay for the 2012 dividend is expected at approximatelyeuro 3.9 billion (including euro 1.96 billion already paid inSeptember 2012) in case the Annual Shareholders’ Meetingapproves the annual dividend. In future years, management expectsto continue paying interim dividends for each fiscal year, withthe balance to the full-year dividend to be paid in eachfollowing year. For further information about the Company’sdividend policy see "Item 5 – Management’sexpectations of operations".

 

**Significant changes**

See "Item 5 – Recent developments" for adiscussion of significant events occurred after 2012 year end upto the latest practicable date.

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**Item 9. THE OFFER AND THE LISTING**

**Offer and listing details**

The principal trading market for the ordinary shares of EniSpA ("Eni"), without indication of par value (the"Shares"), is the Mercato Telematico Azionario(Electronic Share Market or "MTA"). MTA, which is theprincipal trading market for shares in Italy, is a regulatedmarket organized and managed by Borsa Italiana SpA ("BorsaItaliana"). Eni’s American Depositary Receipts("ADRs"), each representing two Shares, are listed onthe New York Stock Exchange. The ratio has changed from one ADRper five Shares to one ADR per two Shares, effective January 10,2006.

The table below sets forth the reported high and low referenceprices of Shares on MTA and of ADRs on the New York StockExchange, respectively. See "Item 3 – Key information -Exchange rates" regarding applicable exchange rates duringthe periods indicated below.

|   | **MTA** |   | **New York        Stock Exchange** |
|--------|---------|--------|------------------------------------|
|   |         |   |                                    |

|   | **High** |   | **Low** |   | **High** |   | **Low** |
|--------|----------|--------|---------|--------|----------|--------|---------|
|   |          |   |         |   |          |   |         |

|   | **(euro per share)** |   | **($ per ADR)** |
|--------|----------------------|--------|-----------------|

| 2008                                       |   | 26.930 |   | 13.798 |   | 84.140 |   | 37.220 |
|--------------------------------------------|--------|--------|--------|--------|--------|--------|--------|--------|
| 2009                                       |   | 18.350 |   | 12.300 |   | 54.450 |   | 31.070 |
| 2010                                       |   | 18.560 |   | 14.610 |   | 53.890 |   | 35.370 |
| 2011                                       |   | 18.420 |   | 12.170 |   | 53.740 |   | 32.980 |
| 2012                                       |   | 18.700 |   | 15.250 |   | 49.440 |   | 36.850 |
| **2011**                                   |   |   |   |   |   |   |   |   |
| First quarter                              |   | 18.420 |   | 16.420 |   | 50.300 |   | 43.990 |
| Second        quarter                      |   | 18.050 |   | 15.580 |   | 53.740 |   | 44.040 |
| Third quarter                              |   | 16.550 |   | 12.170 |   | 48.120 |   | 32.980 |
| Fourth        quarter                      |   | 16.670 |   | 12.950 |   | 47.420 |   | 33.790 |
| **2012**                                   |   |   |   |   |   |   |   |   |
| First        quarter                       |   | 18.670 |   | 16.200 |   | 49.440 |   | 41.420 |
| Second quarter                             |   | 17.570 |   | 15.340 |   | 46.960 |   | 37.920 |
| Third        quarter                       |   | 18.700 |   | 15.250 |   | 48.970 |   | 36.850 |
| Fourth quarter                             |   | 18.540 |   | 17.020 |   | 49.220 |   | 43.890 |
| **2013**                                   |   |   |   |   |   |   |   |   |
| First quarter                              |   |   |   |   |   |   |   |   |
| January        2013                        |   | 19.480 |   | 18.400 |   | 52.120 |   | 49.270 |
| February 2013                              |   | 18.490 |   | 17.010 |   | 50.660 |   | 44.360 |
| March 2013        (through March 18, 2013) |   | 18.490 |   | 17.230 |   | 47.930 |   | 45.060 |
|                                       |   |        |   |        |   |        |   |        |

Until January 17, 2012, JPMorgan Chase Bank NA has functionedas depositary banking issuing ADRs pursuant to a depositagreement among Eni, the depositary bank and the beneficialowners and registered holders from time of ADRs issued hereunder.

Effective January 18, 2012, The Bank of New York Mellon (the"Depositary") functions as depositary bank issuing ADRspursuant to a deposit agreement (the "DepositAgreement") among Eni, the Depositary and the beneficialowners ("Beneficial Owners") and registered holdersfrom time to time of ADRs issued hereunder.

As of March 18, 2013 there were 35,890,018 ADRs outstanding,representing 71,780,036 ordinary shares or approximately 2% ofall Eni’s shares outstanding, held by 112 holders of record(including the Depository Trust Company) in the United States,109 of which are U.S. residents. Since certain of such ADRs areheld by nominees, the number of holders may not be representativeof the number of Beneficial Owners in the United States orelsewhere.

The Shares are included in the FTSE MIB Index (the "FTSEMIB"), the primary benchmark index for the Italian stockmarket. Capturing approximately 80% of the domestic marketcapitalization, the FTSE MIB measures the performance of 40highly liquid, leading companies across leading industries listedon MTA and the Investment Vehicles Market ("MIV") andseeks to replicate the broad sector weights of the Italian stockmarket. The constituents of the FTSE MIB are selected accordingto the following criteria: market capitalization of free-floatShares and liquidity. The FTSE MIB is market cap-weighted afteradjusting constituents for float. Since June 1, 2009 the FTSE MIB(previously S&P/MIB Index) is the principal indicator used totrack the performance of the Italian stock market and is 

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the basis for future and option contracts traded in theItalian Derivatives Market ("IDEM") managed by BorsaItaliana. The Shares are the first largest component of the FTSEMIB, with a weighting of approximately 15%, as established byFTSE after the quarterly rebalancing for FTSE MIB effective March18, 2013.

Trading in the MTA is allowed in any quantity of the Shares aswell as other financial instruments. Where necessary, BorsaItaliana may specify a minimum lot for each financial instrument.Since March 28, 2000, a three-day rolling cash settlement hasbeen applied to all trades of equity securities in Italy, insteadof the previous five-day settlement. In addition, future andoption contracts on the Shares are traded on IDEM and securitizedderivatives based on the Shares are traded on the ItalianSecuritized Derivatives Market ("SeDeX"). IDEMfacilitates the trading of future and option contracts on indexand shares issued by companies that meet certain requiredcapitalization and liquidity thresholds. SeDeX is the BorsaItaliana electronic regulated market where it is possible totrade securitized derivatives (covered warrants andcertificates).

Borsa Italiana disseminates daily market data and news foreach listed security, including volume traded and high and lowprices. At the end of each trading day an "officialprice", calculated as the weighted average price of thetotal volume of each security traded in the market during thesession, and a "reference price", calculated as theclosing auction price, are reported by Borsa Italiana. For thepurposes of the automatic control of the regularity of trading onMTA, the following price variation limits shall apply tocontracts concluded on shares making up the FTSE MIB, effectiveMarch 18, 2013: (i) ± 5.0% (or such other amount established byBorsa Italiana in the "Guide to the Parameters" fortrading on the regulated markets organized and managed by BorsaItaliana) with respect to the static price (the static priceshall be the previous day’s reference price, in the openingauction, or the auction price, in the continuous trading phase);and (ii) ± 3.5% (or such other amount established by BorsaItaliana in the "Guide to the Parameters") with respectto the dynamic price (the price of the last contract concludedduring the continuous trading phase). Where the price of acontract that is being concluded exceeds one of the pricevariation limits referred to above, trading in that security willbe automatically suspended and a volatility auction phase begunfor a certain period of time.

 

**Markets**

The Commissione Nazionale per le Società e la Borsa (theNational Commission for Companies and the Stock Exchange or"Consob"), is the public authority responsible forregulating and supervising the Italian securities markets toensure the transparency and regularity of the dealings andprotect the investing public. Borsa Italiana, which is part ofLondon Stock Exchange Group, following the merger effectiveOctober 1, 2007, is a joint stock company authorized by Consob tooperate regulated markets in Italy; it is responsible for theorganization and management of the Italian stock exchange. One ofthe fundamental characteristics of the financial marketorganization in Italy is the separation of responsibility forsupervision (Consob and the Bank of Italy) from that of marketmanagement (Borsa Italiana). Main responsibilities of BorsaItaliana are the admission, exclusion and suspension of financialinstruments and intermediaries to and from trading and thesurveillance of the markets.

According to Consob Regulations, Borsa Italiana has issuedrules governing the organization and management of the ItalianRegulated Markets it is responsible for, which are MTA (shares,convertible bonds, pre-emptive rights, warrants and Funds),ETFplus (Exchange Traded Funds and Exchange Traded Commoditiesmarket), IDEM (index and stock derivatives market), SeDeX(covered warrants and certificates), MOT (bond market) and MIV,as well as the admission to listing on and trading on thesemarkets.

According to EU Markets in Financial Instruments Directive(No. 2004/39/EC) ("MiFID") and Consob Regulations,orders can be routed not only to Regulated Markets but also toeither Multilateral Trading Facilities ("MTF"s) orSystematic Internalisers. A MTF is a multilateral system,operated by an investment firm or a market operator, which bringstogether multiple third-party buying and selling interests infinancial instruments – in the system and in accordance withnon-discretionary rules – in a way that results in acontract. A Systematic Internaliser is an investment firm or abank which deals on own account by executing client ordersoutside a Regulated Market or a MTF. Outside Regulated Markets,block trading is also permitted for orders that meet certainminimum size requirements and must be notified to Consob andBorsa Italiana.

According to Legislative Decree No. 58 of February 24, 1998("Decree No. 58"), the Consolidated Law on FinancialIntermediation, the provision of investment services andactivities to the public on a professional basis is reserved tobanks and investment firms ("authorized persons"). TheBank of Italy and Consob shall exercise supervisory powers overauthorized persons. They shall each supervise the observance ofregulatory and legislative provisions according to theirrespective responsibilities. In particular, in connection withthe pursuance of the safeguarding of faith in the financialsystem, the protection of investors, the stability and correctoperation of the financial system, the competitiveness of thefinancial system and the observance of financial provisions, theBank of Italy shall be responsible for risk containment, assetstability and the sound and prudent management of intermediarieswhilst Consob shall be responsible for the transparency andcorrectness of conduct.

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The Bank of Italy, in agreement with Consob, also regulatesthe operation of the clearing and settlement service fortransactions involving financial instruments. The regulations andmeasures of general application adopted by Consob and the Bank ofItaly are available on the website of Consob (www.consob.it) orBank of Italy (www.bancaditalia.it). 

The regulations adopted by Borsa Italiana are available on itswebsite (www.borsaitaliana.it).

 

 

 

 

 

 

 

 

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**Item 10. ADDITIONAL INFORMATION**

**Memorandum and Articles of Association**

> 
***Register office***

"Eni SpA" results from the privatization of EnteNazionale Idrocarburi, a public agency, established by Law No.136 of February 10, 1953 and it is registered in the RomeCompanies Register, with identification number (and tax number)00484960588, and VAT number 0090581106. The Company’sregistered office is located in Rome, Italy, and the Company hastwo branch offices in San Donato Milanese (Milan).

The full text of Eni’s By-laws is attached as an exhibitto this annual report (last amended on February 14, 2013). See"Exhibit 1".

 

*Company objects and purpose*In accordance with Article 4 of Eni’s By-laws, theCompany purpose includes the direct and/or indirect exercise,through equity holdings in companies or other entities of:activities in the field of hydrocarbons and natural gases, incompliance with the terms of concessions provided for by law;activities in the field of chemicals, nuclear fuels, geothermalenergy, renewable energy sources and energy in general, in thedesign and construction of industrial plants in the miningindustry, in the metallurgy industry, in the textile machineryindustry, in the water sector, including water diversion,potabilization, purification, distribution and reuse; in theenvironmental protection sector and in the treatment and disposalof waste, as well as any other economic activity that isinstrumental, ancillary or complementary to the afore mentionedactivities. The Company performs and manages the technical andfinancial coordination of subsidiaries and associated companiesand provides financial assistance to them. Moreover, the Companymay acquire equity holdings and interests in other companies orenterprises with corporate purposes that are similar, related orcomplementary to its own or those of companies in which it hasequity holdings, either in Italy or abroad, and it may providesecured and/or unsecured guarantees for its own and others’obligations, including, in particular, sureties.

 

> 
***Directors’ issues***

The Eni’s Board of Directors is invested with the fullestpowers for the ordinary and extraordinary management of theCompany and, in particular, the Board has the power to performall acts it deems advisable for the implementation andachievement of the corporate purpose, with the sole exception ofacts that the law or Eni’s By-laws reserve to theShareholders’ Meeting.

If the Shareholders’ Meeting has not appointed a Chairmanof the Board, the Board shall elect one from among its members.

The Board of Directors appoints a Chief Executive Officer anddelegates to him all necessary powers for the management of theCompany, with the exception of those powers that cannot bedelegated in accordance with current legislation and thoseretained exclusively by the Board of Directors on mattersregarding major strategic, operational and organizationaldecisions.

According to Eni’s By-laws, the Board of Directors maydelegate powers to the Chairman to identify and promoteintegrated projects and international agreements of strategicimportance.

The Board of Directors may at any time revoke the powersdelegated, proceeding, in the case of revocation of the powersdelegated to the Chief Executive Officer, to appoint anotherChief Executive Officer at the same time.

The Board of Directors, acting upon a proposal of the Chairmanand in agreement with the Chief Executive Officer, may conferpowers for individual acts or categories of acts on other membersof the Board of Directors.

In accordance with Eni’s By-laws, for a Board meeting tobe valid, a majority of serving Directors with voting rights mustbe present. Resolutions shall be approved by a majority of thevotes of the Directors with voting rights present; in the eventof a tie, the person who chairs the meeting shall have a castingvote.

 

*Interests in Company’s transactions*As provided by the Italian Civil Code, when a Directorretains a personal interest or an interest on behalf of thirdparties in Company transactions, he shall disclose it to theBoard of Directors and to the Board of Statutory Auditors,specifying the nature, terms, origin and extent of such interest.Based on this provision and in compliance with the ConsobRegulation on transactions with related parties, the Board ofDirectors – on November 18, 2010 – unanimously 

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approved the Management System Guidelines (MSG)"Transactions involving interests of directors and statutoryauditors and transactions with related parties"21,which has been in effect from January 1, 201122 toensure the transparency and substantial and procedural fairnessof transactions with related parties and with parties that are ofinterest to Eni’s Directors and Statutory Auditors, carriedout by Eni itself or its subsidiaries. This MSG and thesubsequent amendments received the preliminary favorable opinion,expressed unanimously, of the Control and Risk Committee,composed entirely of independent Directors as per therequirements set out in the Corporate Governance Code, which Enihas adopted, and in accordance with the Consob Regulation. TheMSG sets out monitoring and evaluation requirements for thepreliminary phase and for carrying out a transaction with a partyin which a Director or Statutory Auditor has an interest. In thisregard, both in the preliminary and deliberation phase, athorough, documented examination of the reasons for thetransaction, highlighting the Company’s interest in carryingit out and the soundness and fairness of the underlying terms, isrequired. Directors involved in matters subject to Boardresolution normally shall not participate in the relevantdiscussion and decision and must leave the room during theseprocedures. If the person involved is the Chief Executive Officerand the transaction falls under his duties, he shall in any caseabstain from taking part in the transaction and shall entrust thematter to the Board of Directors (as provided by Article 2391 ofthe Italian Civil Code). In any case, if the transaction is theresponsibility of the Board of Directors of Eni, a non-bindingopinion from the Control and Risk Committee is required.

Moreover, to ensure compliance with the investigation andresolution procedures envisaged by the above mentioned MSG,Directors and Statutory Auditors issue a declaration, every sixmonths and/or when there is any change, in which they explaintheir potential interests related to Eni and its subsidiaries,and in any case they inform the CEO (or the Chairman, in the casethe CEO holds an interest) about individual transactions that Eniintends to carry out in which they have an interest; the CEO (orChairman) will then inform the other Directors and the Board ofStatutory Auditors.

 

*Compensation*Directors’ compensation shall be determined by theShareholders’ Meeting, as required by Italian law, while thecompensation of Directors assigned particular duties inaccordance with the By-laws (such as the Board Chairman and theCEO), or that participate in Board Committees, shall bedetermined by the Board of Directors, upon the proposal of theCompensation Committee, after consultation with the Board ofStatutory Auditors (for more details about the compensationpolicy in 2012, see "Item 6 – Compensation").

 

*Borrowing powers*The Company purpose includes the power to borrow. Moreover,in accordance with Article 11 of the By-laws, the Company mayissue bonds, including convertibles bonds and warrants, incompliance with the law.

 

*Retirement and shareholdings*There are no provisions in the By-laws relating to eitherretirement based on age-limit requirements and the number ofshares required for a Director to qualify.

 

> 
***Company’s shares***

In accordance with Article 5 of the By-laws, theCompany’s share capital amounts to euro 4,005,358,876.00,fully-paid, and is represented by 3,634,185,330 ordinaryregistered shares without indication of par value. As required bythe Italian law on the dematerialization of financialinstruments, Eni’s shares must be held with "MonteTitoli SpA" (the Italian Central Depository for financialinstruments) and their beneficial owners may exercise theirrights through special deposit accounts opened with authorizedintermediaries, such as banks, brokers and securities dealers.

Shares are indivisible and each share is entitled to one vote.Shareholders are allowed to vote at ordinary and extraordinaryShareholders’ Meeting, including by proxy or by mail or, ifenvisaged in the notice calling the meeting, by electronic means.

Moreover, in accordance with Article 9 of the By-laws, theShareholders’ Meeting may resolve to increase the Companyshare capital by issuing shares, including shares of differentclasses, to be granted for no consideration to Eni employees,pursuant to Article 2349 of the Italian Civil Code. This powerhas not been exercised.

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| (21) |    | The Board of        Directors modified this Management System Guideline on        January 19, 2012.                                                                                                                                                                                                          |
|------|--------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| (22) |    | This MSG        replaced the previous regulation issued by the Board of        Directors on the matter on February 12, 2009. The new        provisions regarding information to be provided to the        public, under both the Consob Regulation and the MSG, are        applicable from December 1, 2010. |

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In 1995, Eni established a sponsored ADR (American DepositaryReceipts) program directed at U.S. investors.

Each Eni ADR is equal to two Eni ordinary shares; Eni ADRs arelisted on the New York Stock Exchange.

 

*Dividend rights*Shareholders have the right to participate in profits and anyother rights as provided by the law and subject to any applicablelegal limitations: specifically, the ordinary Shareholders’Meeting called to approve the annual financial statements mayallocate the net income resulting after allotment to the legalreserve to the payment of a final dividend per share. Inaddition, during the course of the financial year, the Board ofDirectors may distribute, as allowed by the By-laws, interimdividends to the shareholders. Entitlement to dividends notcollected within five years of the day on which they becomepayable shall lapse in favor of the Company and such dividendsshall be allocated to reserves.

 

*Voting rights*The general provisions on share "voting rights" aredescribed at the paragraph "Shareholders’ Meeting"below. In relation to the appointment of the Board of Directors(Eni’s Board is not a "staggered board") and theBoard of Statutory Auditors (see Item 6), Eni’s By-lawsprovide for a slate voting system. In particular, pursuant toArticle 17 of the By-laws and in accordance with applicable law,slates may be presented both by shareholders, either severally orjointly, representing at least 1% of the share capital, or anyother threshold established by Consob (the public authorityresponsible for regulating the Italian securities market) in itsregulation, or by the Board of Directors. Each shareholder may,severally or jointly, submit and vote on a single slate only.

There are no provisions in Eni’s By-laws relating to:rights to share in Company profits; redemption provisions;sinking fund provisions; liability to further capital calls bythe Company.

 

*Liquidation rights*In the event the Company is wound up, the Shareholders’Meeting shall decide the manner of its liquidation and appointone or more liquidators, establishing their powers andremuneration. In accordance with Italian law, shareholders wouldbe entitled to the distribution of the remaining liquidatedassets of the Company in proportion to their shareholdings, onlyafter payment of all the Company’s liabilities andsatisfaction of all other creditors.

 

> 
***Change in shareholders’ rights***

A shareholders’ resolution is required to make changes inshareholders’ rights. Italian law gives shareholders theright to withdraw in the event of an amendment of the provisionsof the By-laws relating to, among other matters, voting anddividend rights, approved by resolution of the Shareholders’Meeting with the attendance and decision-making quorumestablished by law for extraordinary meetings.

 

> 
***Shareholders’ Meeting***

The Shareholders’ Meeting resolves on the issues setforth by applicable law and Eni’s By-laws, in"ordinary" or "extraordinary" form.Resolutions of ordinary and extraordinary Shareholders’Meetings in first, second or third call must be passed with themajorities required by law in each case. The Board of Directorsmay, if deemed necessary, establish that both the ordinary andthe extraordinary Shareholders’ Meeting be held after asingle call. In the case of a single call, the majoritiesrequired by law in this case shall apply.

Shareholders’ Meetings shall normally be held at theCompany’s registered office, unless otherwise decided by theBoard of Directors, provided however they are held in Italy.

The Shareholders’ Meeting shall be called by way of anotice published on the Company website, as well as in accordancewith the procedures specified in Consob regulations, by thestatutory deadlines and in accordance with applicable law. Thenotice calling the meeting, which content is defined by the lawand Eni’s By-laws, contains all the information forattending and voting at the meeting, including information onproxy voting and voting by correspondence (the information isalso available on the Company’s website) and, if envisaged,it may include instructions for participating in theShareholders’ Meeting by means of telecommunication systemsand exercise the right to vote by electronic means. By the samedate of the publication of the notice calling the meeting, theBoard of Directors shall make a report on each of the items onthe agenda available to the public at the Company's registered 

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office, on the Company website and by other means envisaged byConsob regulation. Specific legal provisions may require otherterms of publication of the Board of Directors report (i.e. incase of extraordinary transactions). An ordinaryShareholders’ Meeting shall be called at least once a year,within 180 days of the end of the Company’s financial year(on December 31), to approve the financial statements, since theCompany is required to draw up consolidated financial statements.

Entitlement to attend and cast a vote at theShareholders’ Meeting shall be certified by a statementsubmitted by an authorized intermediary on the basis of itsaccounting records to the Company on behalf of the personentitled to vote. The statement shall be issued by theintermediary on the basis of the balances on the accountsrecorded at the end of the seventh trading day prior to the dateof the Shareholders’ Meeting. Credit and debit recordsentered on the accounts after this deadline shall not beconsidered for the purpose of determining entitlement to exercisevoting rights at the Shareholders’ Meeting. The statementissued by the authorized intermediary must reach the Company bythe end of the third trading day prior to the date of theShareholders’ Meeting, or by any other deadline establishedby Consob regulations issued in agreement with the Bank of Italy.Shareholders shall nevertheless be entitled to attend the meetingand cast a vote if the statements are received by the Companyafter the deadlines indicated above, provided they are receivedbefore the start of proceedings of the given call. For thepurposes of these provisions, reference is made to the date offirst call, provided that the dates of any subsequent calls areindicated in the notice calling the meeting; otherwise, the dateof each call is deemed the reference date.

Those persons who are entitled to vote may appoint a party torepresent themselves at the Shareholders’ Meeting by meansof a written proxy or in electronic form in the manner set forthby current law. Electronic notification of the proxy may be madethrough a special section of the Company website as indicated inthe notice calling the meeting. In order to simplify proxy votingby shareholders who are employees of the Company or of itssubsidiaries and belong to shareholders’ associations thatmeet applicable statutory requirements, locations forcommunications and collecting proxies shall be made available tosaid associations in accordance with the terms and conditionsagreed from time to time with the legal representatives of saidassociations.

The right to vote may also be exercised by correspondence inaccordance with the applicable provisions of laws andregulations. If envisaged in the notice calling the meeting,those persons entitled to vote may participate in theShareholders’ Meeting by means of telecommunication systemsand exercise their right to vote by electronic means inaccordance with the provisions of the law, applicable regulationsand the Shareholders’ Meeting Rules.

The Company may designate a person for each Shareholders’Meeting to whom the shareholders may confer a proxy with votinginstructions on all or some of the items on the agenda, asprovided for by law and regulations, by the end of the secondtrading day preceding the date set for the Shareholders’Meeting including for calls subsequent to the first. Such proxyshall not be valid for items in respect of which no votinginstructions have been provided.

The Chairman of the meeting shall verify the validity ofproxies and, in general, entitlement to participate in theMeeting.

The Shareholders’ Meetings are governed by theShareholders’ Meeting Rules as approved by resolution of theordinary Shareholders’ Meeting on December 4, 1998, in orderto guarantee an efficient conduct of meetings and the right ofeach shareholder to express his/her opinion on the items on theagenda.

During Shareholders’ Meetings, the Board of Directorsprovides broad disclosure on items examined and shareholders canrequest information on issues in the agenda. Information isprovided taking into account applicable rules on insideinformation.

 

> 
***Stock ownership limitation and voting rights    restrictions***

There are no limitations imposed by Italian law or byEni’s By-laws on the rights of non-residents in Italy orforeign people to hold shares or vote other than the limitationsdescribed below (which are equally applicable to residents andnon-residents in Italy).

In accordance with Article 6 of the By-laws, and applying thespecial rules pursuant to Article 323 of Decree LawNo. 332 of May 31, 1994, ratified with amendments by Law No. 474of July 30, 1994 (Law No. 474/1994), no shareholder may hold, inany capacity, directly or indirectly, more than 3% of theCompany’s share capital. Any voting rights and any othernon-financial rights attached to shares held in excess of themaximum limit indicated above may not be exercised and the votingrights of each shareholder to whom such limit applies shall bereduced in proportion, unless otherwise jointly specified inadvance by the parties involved.

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| (23) |    | This        provision has been modified by the Decree Law No. 21 of        March 15, 2012, ratified with amendments by Law No. 56 of        May 11, 2012. For more details see the paragraph        "Limitation on changes in control of the Company        (Special Powers of the Italian State)" below. |
|------|--------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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Pursuant to Article 32 of the By-laws and the above mentionedprovision of law, shareholdings owned by the Ministry of theEconomy and Finance, public entities or organization controlledby them are exempt from this ban.

Finally, this special rule provides that the clause regardingshareholding limits will lose effect if the limit is exceeded asa result of a take-over bid, provided that, as a result of thetakeover, the bidder will own a shareholding of at least 75% ofthe share capital with the right to vote on resolutionsconcerning the appointment or dismissal of Directors.

 

> 
***Limitation on changes in control of the Company    (Special Powers of the Italian State)***

Pursuant to Article 6.2 of the By-laws and to the specialrules set out in Law No. 474/1994, the Minister of the Economyand Finance, in agreement with the Minister of EconomicDevelopment, retains special powers that can be exercised inaccordance with the criteria set out in the Decree issued by thePresident of the Council of Ministers on June 10, 2004.

| These special powers are briefly the        following: |
|--------------------------------------------------------|

| (a) |   | power of opposition to the        acquisition of material shareholdings (i.e. shareholdings        that represent, directly and indirectly, at least 3% of        the share capital and consist of shares with the right to        vote in ordinary Shareholders’ Meetings). The        opposition, duly justified, must be expressed if the        transaction is deemed to be prejudicial to the vital        interests of the State, within ten days of the date of        the notice to be filed by the Directors at the time        request is made for registration in the        shareholders’ register. Pending expiry of the        ten-day term, the voting rights and other rights, except        for the right to participate in profits, attached to the        shares that represent the material shareholding may not        be exercised. In the event the right of opposition is        exercised, by means of a duly justified decision based on        the actual prejudicial effect caused by the transaction        to the vital interests of the State, the transferee may        not exercise the voting rights or any other non-financial        rights attached to the shares representing the material        shareholding, and must dispose of said shares within one        year. In the event of a failure to comply, the Court,        upon appeal of the Minister of the Economy and Finance,        shall order the disposal of the shares representing the        material shareholding in accordance with the procedures        set out in Article 2359-*ter* of the Italian Civil        Code; |
|-----|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| (b) |   | power of opposition to the        conclusion of shareholders’ agreements, as referred        to in Article 122 of the Consolidated Law on Finance,        involving at least 3% of the share capital with voting        rights at the ordinary Shareholders’ Meetings. For        the purpose of exercising said power of opposition,        Consob shall notify the Minister of the Economy and        Finance of any such agreements notified to it pursuant to        Article 122 of the Consolidated Law on Finance. The power        of opposition shall be exercised within ten days of the        date of the notice from Consob. Pending expiry of the        ten-day term, the voting rights and other non-financial        rights attached to the shares held by the shareholders        who have entered into such shareholders’ agreements        may not be exercised. If the power of opposition is        exercised, with a measure duly explicating the prejudice        that the aforesaid agreements may cause to the vital        interests of the Italian State, the shareholders’        agreement shall be null and void. If the conduct during        the Shareholders’ Meeting of the shareholders bound        by the agreement reveals that the undertakings given        under an agreement pursuant to the aforesaid Article 122        of the Consolidated Law on Finance have been maintained,        any resolutions passed with the casting vote of these        same shareholders may be challenged;                                                                              |
| (c) |   | power of veto, duly        justified by the effective prejudice to the vital        interests of the Italian State, with respect to        resolutions to wind up the Company, to transfer the        business, to merge, to demerge, to transfer the        Company’s registered office abroad, to change the        Company purpose or to amend the By-laws so as to        eliminate or modify the powers set out in letters (a),        (b), (c) and in the subsequent letter (d); and                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |
| (d) |   | power of appointment of one        non-voting Director.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |

The decisions for exercising the powers detailed in letters(a), (b) and (c) may be challenged, within sixty days, by theparties entitled to do so, before the Regional AdministrativeCourt of Lazio.

The special powers shall be exercisable with regard tosignificant and binding cases of general interest (public order,public security, public health and defense) in an appropriate wayand measure and proportionally to the safeguarding of theseinterests, even by means of necessary time limits, withoutprejudice to compliance with national and European principlesand, in particular, with the non-discrimination principle.

The Decree of the Italian Prime Minister of May 20, 2010,following on certain decisions of the European Court of Justice,repealed Article 1, paragraph 2 of the Decree issued by theItalian Prime Minister on June 10, 2004, related to the specificcircumstances in which the special powers may be exercised.

The Law Decree No. 21 of March 15, 2012, ratified withamendments by Law No. 56 of May 11, 2012, modified Italianlegislation governing the special powers of the State to complywith European rules. The previous provisions (Article 2 of LawDecree No. 332/1994 ratified by Law No. 474/1994 and itsimplementing decrees), as well as the provisions of the By-lawswhich are inconsistent with the new rules, will be repealed bythe last of the implementing 

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ministerial regulations in the areas of energy, transport andcommunications. At the date of the filing of the present Form,the ministerial regulations had not been issued. Among theprovisions to be repealed, those governing enforcement of Law No.474/1994 related to Eni have been expressly identified. Albeitwith some amendments, the provisions regarding the stockownership limitations and voting rights restrictions pursuant toArticle 3 of Law No. 474/1994 are still in force.

In order to "promote privatization and the spread ofinvestment in shares" of companies in which the ItalianState has a significant shareholding, Article 1, paragraphs 381to 384 of Law No. 266 of 2005 (2006 Financial Law) introduced thepower to add provisions to the By-laws of privatized companiesprimarily controlled by the Italian State, like Eni, which allowshares or participating financial instruments to be issued thatgrant the special meeting of its holders the right to requestthat new shares, even at par value, or new financial instrumentsbe issued to them with the right to vote in ordinary andextraordinary Shareholders’ Meetings. Making this amendmentto the By-laws would lead to the shareholding limit referred toin Article 6.1 of the By-laws being removed. At the present time,however, Eni’s By-laws do not contain such any provision.

 

> 
***Shareholder ownership thresholds***

There are no By-law provisions governing the disclosure of theownership threshold because the matter is regulated by Italianlaw. Pursuant to the Consolidated Law on Finance24 andConsob Regulation25, any direct or indirect holding inthe voting shares of an Italian listed company in excess of 2%26,5%, 10%, 15%, 20%, 25%, 30%, 50%, 66.6%, 90% and 95% must benotified to the investee company and to Consob. The samedisclosure requirements refer to holdings that drop below one ofthe specified thresholds. Due declarations shall be made withinfive trading days of the date of the transaction triggering theobligation to notify, regardless of the date on which it iscarried out, using the forms established in Annex 4A to the abovementioned Regulation.

The relevant thresholds noted above shall be calculatedincluding: (i) shares owned by the reporting person, even if thevoting rights belong or are assigned to third parties, or aresuspended, as well as shares in which the voting rights belong orare assigned to him; and (ii) shares held through third parties(and shares whose voting rights are assigned to such thirdparties) such as nominees, trustees or subsidiary companies. Theobligation to notify also applies to any direct or indirectholding owned through ADRs. Specific disclosure requirements(with partially different thresholds) are connected to so-called"potential holdings" (such as holdings of derivativesor other equity-linked securities).

Voting rights attached to listed shares which have not beennotified pursuant to the above mentioned disclosure requirementsmay not be exercised. Any resolution or act adopted in violationof such limitation, with the contribution of those undisclosedshares, could be voided if challenged in Court, under the ItalianCivil Code.

The Consolidated Law on Finance regulates cross-ownershipmatters as follows.

Cross-ownership between listed companies may not exceed 2% ofthe shares. The company that last exceeds the limit of 2% may notexercise the voting rights attached to the shares held in excessof such threshold and must sell such shares within the following12 months. In the event of failure to dispose of the shares bysuch time limit, the voting rights shall be suspended withrespect to the entire shareholding, and any resolution or actadopted with the contribution of the relevant shares may bechallenged under the Italian Civil Code. If a person holds aninterest exceeding 2% of the share capital of a listed company,such listed company or any entity controlling such listed companymay not acquire an interest exceeding 2% of the share capital ofa listed company controlled by the former. If the foregoing limitis exceeded, the person who last exceeded the foregoing limit (orboth holders, if it is not possible to ascertain which of the twopersons was the last to exceed the limit) may not exercise thevoting rights attached to the shares exceeding the foregoinglimit. In the event of non-compliance, the voting rights attachedto the shares held in excess of the limit specified shall besuspended and any resolution or act adopted with the contributionof the relevant shares may be challenged under the Italian CivilCode. The limitations described above are not applicable in thecase of a takeover bid or exchange tender offer to acquire atleast 60% of the ordinary shares of a listed company.

Under the Consolidated Law on Finance, any agreement, inwhatever form, regarding the exercise of voting rights in alisted company or in its parent company, must be, within fivedays of stipulation: (i) notified to Consob; (ii) publishedin abstract form, in the Italian daily press; (iii) filed in theRegister of Companies in which the listed company is registered;and (iv) notified to the company with listed shares. In the eventof non-compliance with these requirements, the agreements shallbe null and void and the voting rights attached to the relevantshares may not be exercised and any resolution or act adoptedwith the contribution of such shares may be challenged under theItalian Civil Code.

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| (24) |    | Legislative        Decree No. 58 of February 24, 1998, with specific        reference to Articles 120-122.                                                                                                                                                                                                                                                                                                                      |
|------|--------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| (25) |    | Article 117        of Consob Decision No. 11971/1999 and subsequently        amendments.                                                                                                                                                                                                                                                                                                                                        |
| (26) |    | Moreover,        Consob may, by means of measures justified by the need to        protect investors, as well as corporate control market        and capital market efficiency and transparency, envisage        – for a limited period of time – thresholds        lower than 2% by its decree for companies with an        elevated current market value and, particularly,        extensive shareholding structure. |

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The same provisions also apply to agreements, in whateverform, that: (a) create obligations of consultation prior to theexercise of voting rights in a listed company and in itscontrolling companies; (b) set limits on the transfer of therelated shares or of other financial instruments that entitleholders to buy or subscribe them; (c) provide for the purchase ofthe shares or of above mentioned financial instruments; (d) haveas their object or effect the exercise, jointly or otherwise, ofdominant influence on such companies; and (d-*bis*) whichaim to encourage or frustrate a takeover bid or an exchangetender offer, including commitments relating to non-participationin a takeover bid.

Moreover, under the Italian Civil Code (Article 2359-*bis*),a subsidiary may acquire shares of the parent company only withinthe limits of distributable profits and available reserves asresulting from the last approved balance sheet. Only fully-paidshares can be purchased. The purchase must be approved by theShareholders’ Meeting and, in any case, the nominal value ofshares purchased may not exceed one-fifth of the capital of theparent company – if the latter is a listed company –taking into account for this purpose the shares held by the sameparent company or its subsidiaries.

Finally, in accordance with Law No. 287 of October 10, 1990,any merger or acquisition of sole or joint control over a companythat would create or strengthen a dominant position in thedomestic market in a manner that eliminates or significantlyreduces competition is prohibited and mergers and acquisition ofspecified dimension must be subject to the prior authorization ofthe Italian Antitrust Authority27. However, if theacquiring party and the company to be acquired operate in morethan one EU Member State and together exceed certain revenuethresholds, the antitrust approval for the acquisition fallsunder the exclusive jurisdiction of the European Commission.

 

> 
***Changes in share capital***

Eni’s By-laws do not provide for more stringentconditions than are required by law.

Share capital increases are resolved by a shareholders’resolution at an extraordinary Shareholders’ Meeting. UnderItalian law, shareholders have a pre-emptive right to subscribenew issues of shares and corporate bonds convertible into sharesin proportion to their respective shareholdings. If theCompany’s interest so requires, the pre-emptive right may bewaived or limited by the shareholders’ resolutionauthorizing the share capital increase. The shareholders’pre-emptive right is also waived if the shareholders’resolution authorizing the share capital increase provides forthe subscription of new issues of shares in the form ofcontributions in-kind.

 

**Material contracts**

None.

 

**Exchange controls**

There are no exchange controls in Italy. Residents andnon-residents in Italy may effect any investments, divestmentsand other transactions that entail a transfer of assets to orfrom Italy, subject only to the reporting, record-keeping anddisclosure requirements described below. In particular, residentsof Italy may hold foreign currency and foreign securities of anykind, within and outside Italy, while non-residents may invest inItalian securities without restriction and may export from Italycash, instruments of credit or payment and securities, whether inforeign currency or euro, representing interest, dividends, otherasset distributions and the proceeds of dispositions.

Updated reporting and record-keeping requirements are containedin the Italian legislation which implements an EU directive regardingthe free movement of capital. Such legislation requires that transfersinto or out of Italy of cash or securities in excess of euro 12.5thousand be reported in writing to the Relevant Authority (Ministryfor Economy and Finance) by residents or non-residents that effectsuch transfers directly, or by banks, securities dealers or PosteItaliane SpA (Italian Mail) that effect such transactions on theirbehalf. In addition, banks, securities dealers or Poste ItalianeSpA effecting such transactions on behalf of residents or non-residentsof Italy are required to maintain records of such transactions forfive years, which records may be inspected at any time by Italiantax and judicial authorities.

Non-compliance with these reporting and record-keeping requirementsmay result in administrative fines or, in the case of false reportingand in certain cases of incomplete reporting, criminal penalties.

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| (27) |    | Autorità        garante per la concorrenza ed il mercato (AGCM -        www.agcm.it). |
|------|--------------|--------------------------------------------------------------------------------------------|

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**Taxation**

*The information set forth below is a summary only, andItalian, the United States and other tax laws may change fromtime to time. Holders of shares and ADRs should consult withtheir professional advisors as to the tax consequences of theirownership and disposition of the shares and ADRs, including, inparticular, the effect of tax laws of any other jurisdiction.*

 

> 
***Italian taxation***

The following is a summary of the material Italian taxconsequences of the ownership and disposition of shares or ADRsas at the date hereof and does not purport to be a completeanalysis of all potential tax effects relevant to the ownershipor disposition of shares or ADRs.

 

*Income tax*Dividends received by Italian resident individuals inrelation to interest exceeding 2% of the voting rights or 5% ofthe share capital ("substantial interest") are includedin the taxable income subject to personal income tax to theextent of 49.72% of their amount. Personal income tax applies atprogressive rates ranging from 23% to 43% plus local surtaxes.Dividends received by Italian resident individuals in relation tonon-substantial interest not related to the conduct of a businessare subject to a substitute tax of 20% withheld at the source bythe dividend paying agent. This being the case, the dividend isnot to be included in the individual’s tax return. If thenon-substantial interest is related to the conduct of a business,dividends received in respect of 2011 profits are included in thetaxable business income to the extent of 49.72% of their amount.

Despite the above statement, dividends are included in thetaxable income at 40% to the extent they relate to un-distributedprofit of 2007 and previous years.

Dividends received by Italian investment funds, foreignopen-ended investment funds authorized to market their securitiesin Italy pursuant to the Law Decree June 6, 1956, No. 476,converted into Law July 25, 1956, No. 786, and *società diinvestimento a capitale variabile* ("SICAV") are notsubject to substitute tax but are included in the aggregateincome of the investment fund or SICAV. The investment fund orSICAV will not be subject to tax on the dividends. A withholdingtax of 20% may apply on income of the investment fund or SICAVderived by unitholders or shareholders through distributionand/or upon redemption or disposal of the units and shares.

Dividends received by real estate funds to which theprovisions of Law Decree No. 351 of September 25, 2001, assubsequently amended, apply, are not subject to any substitutetax nor to any other income tax in the hands of the fund.

The income of the real estate fund is subject to tax, in thehands of the unitholder, depending on status and percentage ofparticipation, or, when earned by the fund, through distributionand/or upon redemption or disposal of the units. 

Dividends received by a pension fund (subject to the regimeprovided for by Article 17 of the Italian Legislative Decree No.252 of December 5, 2005) and deposited with an authorizedintermediary, will not be subject to substitute tax, but must beincluded in the result of the relevant portfolio accrued at theend of the tax period, to be subject to an 11% substitute tax.

Dividends paid to non-Italian residents are subject to thesame substitute tax levied at source by the dividend paying agentat the rate of 20%, provided that the interest is not connectedto an Italian permanent establishment. Up to one fourth of thesubstitute tax withheld might be recovered by the non-residentshareholder from the Italian Tax Authorities upon provision ofevidence of full payment of income tax on such dividend inhis/her country of residence in an amount at least equal to thetotal refund claimed.

Dividends are subject to the 1.375% substitute tax introducedby Financial Bill for 2008 where the conditions in Article 27,paragraph 3-*ter*, Presidential Decree No. 600 of 1973 aremet, i.e. dividends are paid to companies and entities subject toa corporate income tax in a European Union member state or inNorway.

The substitute tax may also be reduced under the tax treaty inforce between Italy and the country of residence of theBeneficial Owner of the dividend. Italy has executed income taxtreaties with approximately 70 foreign countries, including allEU Member States, Argentina, Australia, Brazil, Canada, Japan,New Zealand, Norway, Switzerland, the United States and somecountries in Africa, the Middle East and the Far East. Generallyspeaking, it should be noted that tax treaties are not applicablewhere the holder is a tax-exempt entity or, with few exceptions,a partnership or a trust.

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In order to obtain the treaty benefit (reduced substitute taxrate) at the same time of payment, the Beneficial Owner must filean application to the dividend paying agent chosen by theDepositary stating the existence of the conditions for theapplicability of the treaty benefit, together with acertification issued by the foreign Tax Authorities stating thatthe shareholder is a resident of that country for treatypurposes.

Under the tax treaty between the United States and Italy,dividends derived and beneficially owned by a U.S. resident whoholds less than 25% of the Company’s shares are subject toan Italian withholding or substitute tax at a reduced rate of15%, provided that the interest is not effectively connected witha permanent establishment in Italy through which the U.S.resident carries on a business or a fixed establishment in Italythrough which such U.S. resident performs independent personalservices (for further details please refer to the relevantprovisions set forth in the Italy-U.S. Tax Treaty). In theabsence of such conditions, the dividend paying agent will deductfrom the gross amount of the dividend the substitute tax at thestatutory rate of 20%. Based on the certification procedurerequired by the Italian Tax Authorities, to benefit from thedirect application of the 15% substitute tax the U.S. shareholdermust provide the dividend paying agent with a certificateobtained from the U.S. Internal Revenue Service (the"IRS") with respect to each dividend payment. Therequest for that certificate must include a statement, signedunder penalties for perjury, to the effect that the shareholderis a U.S. resident individual or corporation, and does notmaintain a permanent establishment in Italy, and must set forthother required information. The normal time for processingrequests for certification by the IRS is normally about six toeight weeks.

Where the Beneficial Owner has not provided the abovementioned documentation, the dividend paying agent will deductfrom the gross amount of the dividend the substitute tax at thestatutory rate of 20%. The U.S. recipient will then be entitledto claim from the Italian Tax Authorities the difference("treaty refund") between the domestic rate and thetreaty one by filing specific forms (certificate) with theItalian Tax Authorities.

As reflected in the Deposit Agreement, if any tax or othergovernmental charge shall become payable by or on behalf of theCustodian or the Depositary with respect to an ADR, any DepositedSecurities represented by the ADSs, such tax or othergovernmental charge shall be paid by the Holder hereof to theDepositary. The Depositary may refuse to effect any registration,registration of transfer, split-up or combination hereof or anywithdrawal of such Deposited Securities until such payment ismade. The Depositary may also deduct from any distributions on orin respect of Deposited Securities, or may sell by public orprivate sale for the account of the Holder hereof any part or allof such Deposited Securities (after attempting by reasonablemeans to notify the Holder hereof prior to such sale), and mayapply such deduction or the proceeds of any such sale in paymentof such tax or other governmental charge, the Holder hereofremaining liable for any deficiency, and shall reduce the numberof ADSs to reflect any such sales of shares. Pursuant to theDeposit Agreement, the Depositary and the Custodian may make andmaintain arrangements to enable persons that are consideredUnited States residents for purposes of applicable law to receiveany tax rebates (pursuant to an applicable treaty or otherwise)or other tax related benefits relating to distributions on theADSs to which such persons are entitled. Notwithstanding anyother terms of the Deposit Agreement or the ADR, absent the grossnegligence or bad faith of, respectively, the Depositary and theCompany, the Depositary and the Company assume no obligation, andshall not be subject to any liability, for the failure of anyHolder or Beneficial Owner, or its agent or agents, to receiveany tax benefit under applicable law or tax treaties. TheDepositary shall not be liable for any acts or omissions of anyother party in connection with any attempts to obtain any suchbenefit, and Holders and Beneficial Owners hereby agree that eachof them shall be conclusively bound by any deadline establishedby the Depositary in connection therewith.

 

*Capital gains tax*This paragraph applies with respect to capital gains out ofthe scope of a business activity carried out in Italy.

Gains realized by Italian resident individuals upon the saleof substantial interest is included in the taxable base subjectto personal income tax to the extent of 49.72% of their amount,while gains realized upon the sale of non-substantial interest issubject to a substitute tax at a 20% rate.

| For gains deriving from the sale of        non-substantial interest, two different systems may be        applied at the option of the shareholder as an        alternative to the filing of the tax return: |
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| • |   | the so-called        "administered savings" tax regime (*risparmio        amministrato*), based on which intermediaries acting        as shares depositaries shall apply a substitute tax (20%)        on each gain, on a cash basis. If the sale of shares        generated a loss, said loss may be carried forward up to        the fourth following year; and |
|--------|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| • |   | the so-called        "portfolio management" tax regime (*risparmio        gestito*) which is applicable when the shares form        part of a portfolio managed by an Italian asset        management company. The accrued net profit of the        portfolio is subject to a 20% substitute tax to be        applied by the portfolio. |
|--------|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

Gains realized by non-residents from non-substantial interestin listed companies are deemed not to be realized in Italy andconsequently are not subject to the capital gains tax.

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On the contrary, gains realized by non-residents fromsubstantial interest even in listed companies are deemed to berealized in Italy and consequently they are subject to thecapital gains tax.

However, double taxation treaties may eliminate the capitalgains tax. Under the income tax convention between the UnitedStates and Italy, a U.S. resident will not be subject to thecapital gains tax unless the shares or ADRs form part of thebusiness property of a permanent establishment of the holder inItaly or pertain to a fixed establishment available to ashareholder in Italy for the purposes of performing independentpersonal services. U.S. residents who sell shares may be requiredto produce appropriate documentation establishing that the abovementioned conditions of non-taxability pursuant to the conventionhave been satisfied.

 

*Financial Transactions Tax*Italian Law No. 228 of December 24, 2012, has introduced aTax on Financial Transactions which applies to the transfer ofshares, ADR and other financial instrumentsissued by companies resident inItaly.The tax rateapplicable for financial year 2013 is 0.12% for ADR negotiated inregulated markets (like NYSE). For further years tax rate will bereduced to 0.10%. Tax applies to transactions realized from March1, 2013. 

Non-Italian intermediaries, involved in the transactions ofEni ADR, must withhold and pay the Tax on Financial Transactions.For this purpose, non-Italian intermediaries can appoint anItalian Tax Representative, according to the Italian tax law.

 

| *Inheritance and gift tax*Pursuant to Law Decree No. 262 of October 3, 2006,        converted with amendments by Law No. 286 of November 24,        2006 effective from November 29, 2006, and Law No. 296 of        December 27, 2006, the transfers of any valuable assets        (including shares) as a result of death or donation (or        other transfers for no consideration) and the creation of        liens on such assets for a specific purpose are taxed as        follows: |
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (a) |   | 4 per cent: if the transfer        is made to spouses and direct descendants or ancestors;        in this case, the transfer is subject to tax on the value        exceeding euro 1,000,000 (per beneficiary);        |
|-----|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| (b) |   | 6 per cent: if the transfer        if made to brothers and sisters; in this case, the        transfer is subject to the tax on the value exceeding        euro 100,000 (per beneficiary);                             |
| (c) |   | 6 per cent: if the transfer        is made to relatives up to the fourth degree, to persons        related by direct affinity as well as to persons related        by collateral affinity up to the third degree; and |
| (d) |   | 8 per cent: in all other        cases.                                                                                                                                                                                |

If the transfer is made in favor of persons with severedisabilities, the tax applies on the value exceeding euro1,500,000. Moreover, an anti-avoidance rule is provided for byLaw No. 383 of October 18, 2001 for any gift of assets (includingshares) which, if sold for consideration, would give rise tocapital gains subject to a substitute tax (imposta sostitutiva)provided for by Decree No. 461 of November 21, 1997. Inparticular, if the donee sells the shares for considerationwithin five years from the receipt thereof as a gift, the doneeis required to pay a relevant substitute tax on capital gains asif the gift had never taken place.

 

> 
***United States taxation***

The following is a summary of certain U.S. federal income taxconsequences to U.S. Holders (as defined below) of the ownershipand disposition of Shares or ADSs. This summary is addressed toU.S. Holders that hold Shares or ADSs as capital assets, and doesnot purport to address all material tax consequences of theownership of Shares or ADSs. The summary does not address specialclasses of investors, such as tax-exempt entities, dealers insecurities, traders in securities that elect to mark-to-market,certain insurance companies, broker-dealers, investors liable foralternative minimum tax, investors that actually orconstructively own 10% or more of Eni SpA’s Shares, a personthat purchases or sells Shares or ADSs as part of a wash sale forU.S. federal income tax purposes, investors that hold Shares orADSs as part of a straddle or a hedging or conversion transactionand investors whose "functional currency" is not theU.S. dollar.

This summary is based on the tax laws of the United States(including the Internal Revenue Code of 1986, as amended, (the"Code"), its legislative history, existing and proposedregulations thereunder, published rulings and court decisions) asin effect on the date hereof, and which are subject to change (orchanges in interpretation), possibly with retroactive effect. Thesummary is based in part on representations of the Depositary andassumes that each obligation in the Deposit Agreement and anyrelated agreement will be performed in accordance with its terms.U.S. Holders should consult their own tax advisors to determinethe U.S. federal, state and local and foreign tax consequences tothem of the ownership and disposition of Shares or ADSs.

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If a partnership holds the Shares or ADSs, the U.S. federalincome tax treatment of a partner will generally depend on thestatus of the partner and the tax treatment of the partnership. Apartner in a partnership holding the Shares or ADSs shouldconsult its tax advisor with regard to the U.S. federal incometax treatment of an investment in the Shares or ADSs.

As used in this section, the term "U.S. Holder"means a beneficial owner of Shares or ADSs that is: (i) a citizenor resident of the United States; (ii) a domestic corporation;(iii) an estate the income of which is subject to the U.S.federal income tax without regard to its source; or (iv) a trustif a court within the United States is able to exercise primarysupervision over the administration of the trust and one or moreU.S. persons have the authority to control all substantialdecisions of the trust.

The discussion does not address any aspects of U.S. taxationother than U.S. federal income taxation. In particular, U.S.Holders are urged to confirm their eligibility for benefits underthe income tax convention between the United States and Italywith their advisors and to discuss with their advisors anypossible consequences of their failure to qualify for suchbenefits.

In general, and taking into account the earlier assumptions,for U.S. federal income tax purposes, U.S. Holders who own ADRsevidencing ADSs will be treated as owners of the underlyingShares. Exchanges of Shares for ADRs and ADRs for Sharesgenerally will not be subject to U.S. federal income tax.

 

*Dividends*Subject to the passive foreign investment company, or PFIC, rulesdiscussed below, distributions paid on the shares generally willbe treated as dividends for U.S. federal income tax purposes tothe extent paid out of Eni SpA’s current or accumulatedearnings and profits as determined for U.S. federal income taxpurposes, but will not be eligible for the dividends-receiveddeduction generally allowed to U.S. corporations. To the extentthat a distribution exceeds Eni SpA’s earnings and profits,it will be treated, first, as a non-taxable return of capital tothe extent of the U.S. Holder’s tax basis in the Shares orADSs, and thereafter as capital gain. A U.S. Holder will besubject to U.S. federal taxation, on the date of actual orconstructive receipt by the U.S. Holder (in the case of Shares)or by the Depositary (in the case of ADSs) with respect to thegross amount of any dividends, including any Italian tax withheldtherefrom, without regard to whether any portion of such tax maybe refunded to the U.S. Holder by the Italian tax Authorities. Ifyou are a non-corporate U.S. Holder, dividends paid to you thatconstitute qualified dividend income will be taxable to you atthe preferential rates applicable to long-term capital gainsprovided that you hold the Shares or ADSs for more than 60 daysduring the 121-day period beginning 60 days before theex-dividend date and meet other holding period requirements.Dividends we pay with respect to the Shares or ADSs generallywill be qualified dividend income. The amount of the dividenddistribution that you must include in your income as a U.S.Holder will be the U.S. dollar value of the euro payments made,determined at the spot euro/$ rate on the date the dividenddistribution is includible in your income, regardless of whetherthe payment is in fact converted into U.S. dollars. Generally,any gain or loss resulting from currency exchange fluctuationsduring the period from the date you include the dividend paymentin income to the date you convert the payment into U.S. dollarswill be treated as ordinary income or loss and will not beeligible for the special tax rate applicable to qualifieddividend income. The gain or loss generally will be income orloss from sources within the United States for foreign tax creditlimitation purposes.

Subject to certain conditions and limitations, Italian taxwithheld from dividends will be treated as a foreign income taxeligible for credit against the U.S. Holder’s U.S. federalincome tax liability. Special rules apply in determining theforeign tax credit limitation with respect to dividends that aresubject to the preferential rates. To the extent a refund of thetax withheld is available to a U.S. Holder under Italian law orunder the income tax convention between the United States andItaly, the amount of tax withheld that is refundable will not beeligible for credit against your U.S. federal income taxliability. See "Italian taxation – Income tax"above, for the procedures for obtaining a tax refund. For foreigntax credit purposes, dividends paid on the shares will be incomefrom sources outside the United States and will, depending onyour circumstances, be either "passive" or"general" income for purposes of computing the foreigntax credit allowable to you.

*Sale or exchange of shares*Subject to the PFIC rules discussed below, a U.S. Holdergenerally will recognize gain or loss for U.S. federal income taxpurposes on the sale or exchange of Shares or ADSs equal to thedifference between the U.S. Holder’s adjusted basis in theShares or ADSs (determined in U.S. dollars), as the case may be,and the amount realized on the sale or exchange (or if the amountrealized is denominated in a foreign currency its U.S. dollarequivalent, determined at the spot rate on the date ofdisposition). Generally, such gain or loss will be treated ascapital gain or loss if the Shares or ADSs are held as capitalassets and will be a long-term capital gain or loss if the Sharesor ADSs have been held for more than one year on the date of suchsale or exchange. Long-term capital gain of a non-corporate U.S.Holder is generally taxed at preferential rates. In addition, anysuch gain or loss realized by a U.S. Holder generally will betreated as U.S. source income or loss for U.S. foreign tax creditpurposes.

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*PFIC rules*Eni SpA believes that Shares and ADSs should not be treatedas stock of a PFIC for U.S. federal income tax purposes, but thisconclusion is a factual determination that is made annually andthus may be subject to change. If Eni SpA were to be treated as aPFIC, unless a U.S. Holder elects to be taxed annually on amark-to-market basis with respect to the Shares or ADSs, gainrealized on the sale or other disposition of your Shares or ADSswould in general not be treated as capital gain. Instead, if youare a U.S. Holder, you would be treated as if you had realizedsuch gain and certain "excess distributions" ratablyover your holding period for the Shares or ADSs and would betaxed at the highest tax rate in effect for each such year towhich the gain or distribution was allocated, together with aninterest charge in respect of the tax attributable to each suchyear. With certain exceptions, your Shares or ADSs will betreated as stock in a PFIC if Eni SpA were a PFIC at any timeduring your holding period in your Shares or ADSs. Dividends thatyou receive from Eni SpA will not be eligible for thepreferential tax rates applicable to qualified dividend income ifEni SpA is treated as a PFIC with respect to you either in thetaxable year of the distribution or the preceding taxable year,but instead will be taxable at rates applicable to ordinaryincome.

 

**Documents on display**

Eni’s Annual Report and Accounts and any other documentconcerning the Company are also available online on the Companywebsite at:

http://www.eni.com/en_IT/documentation/documentation.page?type=bilrap&header=documentazione&doc_from=hpeni_header.

The Company is subject to the information requirements of theU.S. Security Exchange Act of 1934 applicable to foreign privateissuers.

In accordance with these requirements, Eni files its annualreport on Form 20-F and other related documents with the SEC.It’s possible to read and copy documents that have beenfiled with the SEC at the SEC’s public reference roomlocated at 100 F Street NE, Washington, DC 20549, USA.

You may also call the SEC at +1 800-SEC-0330 or log on towww.sec.gov.

It is also possible to read and copy documents referred to inthis annual report on Form 20-F at the New York Stock Exchange,20 Broad Street, 17th floor, New York, USA.

 

 

 

 

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**Item 11. QUANTITATIVE AND QUALITATIVEDISCLOSURES ABOUT MARKET RISK**

Market risk is the possibility that the exposure tofluctuations in currency exchange rates, interest rates orcommodity prices will adversely affect the value of theGroup’s financial assets, liabilities or expected futurecash flows. Eni’s financial performance is particularlysensitive to changes in the price of crude oil and movements inthe euro/$ exchange rate. Overall, a rise in the price of crudeoil has a positive effect on Eni’s results from operationsand liquidity due to increased revenues from oil and gasproduction. Conversely, a decline in crude oil prices reducesEni’s results from operations and liquidity.

The impact of changes in crude oil prices on theCompany’s downstream gas and refining and marketingbusinesses and petrochemical operations depends upon the speed atwhich the prices of finished products adjust to reflect changesin crude oil prices. In addition, the Group’s activitiesare, to various degrees, sensitive to fluctuations in the euro/$exchange rate as commodities are generally priced internationallyin U.S. dollars or linked to dollar denominated products as inthe case of gas prices. Overall, an appreciation of the euroagainst the dollar reduces the Group’s results fromoperations and liquidity, and vice versa.

As part of its financing and cash management activities, theCompany uses derivative instruments to manage its exposure tochanges in interest rates and foreign exchange rates. Theseinstruments are principally interest rate and currency swaps. TheCompany also enters into commodity derivatives as part of itsordinary commercial, trading activities and risk management andoptimization activities as well as, from time to time, to hedgethe exposure to variability in future cash flows due to movementsin commodity prices, in view of pursuing acquisitions of oil andgas reserves as part of the Company’s ordinary assetportfolio management or other strategic initiatives.

Due to a changed competitive environment in the European gasmarket and also considering the development of highly liquid spotmarkets for gas and volatile gas margins, management hasimplemented through 2011 new risk management policies andinstruments to safeguard the value of the Company’s assetsin the gas value chain and to seek to profit from market andtrading opportunities. As part of its risk management strategy,the Company actively manages exposure to the commodity risk byentering into commodity derivatives transactions on bothfinancial and physical trading venues targeting differentobjectives.

| (i)  |   | On one hand, management        enters commodity derivative transactions to hedge the        risk of variability in future cash flows on already        contracted or highly probable future sales exposed to        commodity risk depending on the circumstance that costs        of supplies may be indexed to different market and oil        benchmarks compared to the indexing of selling prices.        Management has been implementing tight correlation        between such commodity derivatives transactions and        underlying physical contracts in order to account for        those derivatives in accordance with hedging accounting        in compliance with IAS 39, where possible; and                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |
|------|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| (ii) |   | on the other hand,        management enters purchase/sale commodity contracts for        speculative purposes in order to alter the risk profile        associated with a portfolio of assets (purchase        contracts, transport entitlements, storage capacity) or        leverage any price differences in the marketplace,        seeking to increase margins on existing assets in case of        favorable trends in the commodity pricing environment or        seeking a potential profit based on expectations of        future trends in prices. These contracts may lead to        gains as well as losses, which, in each case, may be        significant. Those derivatives will be accounted through        profit and loss, resulting in higher volatility in the        gas business’ operating profit. These trading        activities are executed within limits set by internal        policies and guidelines that define the maximum tolerable        level of market risk. Furthermore the Company intends to        optimize the value of its assets (gas supply contracts,        storage sites, transportation rights, customer base, and        market position) by effectively managing the        flexibilities associated with them. This can be achieved        through strategies of asset-backed trading where the        underlying items are represented by the Company’s        assets. We believe that the risk associated with asset        backed trading activities is mitigated by the natural        hedge granted by the assets’ availability. In 2012,        Eni’s risk management activities helped reduce the        Group exposure to the commodity risk: Furthermore trading        activities including asset-backed activities reported        positive contribution to the Group results of operations.        We are planning to expand those trading activities both        in the Gas & Power and the Refining & Marketing        businesses. In fact, in 2012 the Company started a        reorganization to integrate the supply activities of the        Gas & Power and Refining & Marketing        segments together with our trading, risk management and        the wholesale activities of gas and LNG. This integration        will allow us to capture opportunities from market trends        and synergies in commodity risk management. |

Please refer to "Item 18 – note 34 of the Notes tothe Consolidated Financial Statements" for a qualitative andquantitative discussion of the Company’s exposure to marketrisks. Please also refer to "Item 18 – notes 13, 20, 25and 30 of the Notes to the Consolidated FinancialStatements" for details of the different derivatives ownedby the Company in these markets.

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**Item 12. DESCRIPTION OF SECURITIES OTHERTHAN EQUITY SECURITIES**

**Item 12A. Debt securities**

Not applicable.

 

**Item 12B. Warrants and rights**

Not applicable.

 

**Item 12C. Other securities**

Not applicable.

 

**Item 12D. American Depositary Shares**

In the United States, Eni’s securities are traded in theform of ADSs (American Depositary Shares) which are listed on theNew York Stock Exchange. ADSs are evidenced by AmericanDepositary Receipts (ADRs), and each ADR represents two Eniordinary shares. Since January 18, 2012, Eni’s ADRs areissued, cancelled and exchanged at the office of Bank of New YorkMellon, PO Box 358516 Pittsburgh, PA 15252-8516, as depositary(the "Depositary") under the Deposit Agreement betweenEni, the Depositary and the holders of ADRs.

Bank of New York Mellon is also the transfer agent forEni’s ADRs.

Société Générale Securities Services SpA and UniCredit SpAare the custodians (the "Custodian") on behalf of theholders of Eni’s ADRs, and their principal offices arelocated in Milan, Italy.

 

*Fees and charges paid by ADR holders*The Depositary collects fees for delivery and surrender ofADSs directly from investors depositing shares or surrenderingADSs for the purpose of withdrawal or from intermediaries actingon their behalf. The Depositary collects fees for makingdistributions to investors by deducting those fees from theamounts distributed or by selling a portion of distributableproperty to pay the fees.

 

 

 

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The table below sets forth all fees and charges that a holderof Eni’s ADRs may have to pay, either directly orindirectly, to Bank of New York Mellon, as Depositary.

| **Type        of service**                                  |   | **Amount        of fees or charges**(1)                                   |   | **Depositary        Actions**                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |
|-------------------------------------------------------------|--------|---------------------------------------------------------------------------|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|                                                             |   |                                                                           |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |
| (a)        Depositing or substituting the underlying shares |   | $5.00        (or less) for each 100 ADSs         (or portion of 100 ADSs) |   | Each        person to whom ADRs are issued against deposits of        shares, including deposits and issuances in respect of:         • Share distributions, stock split, rights, merger.         • Exchange of securities or any other transaction or        event or other distribution affecting the ADSs or the        Deposited Securities.                                                                                                                                                                                                                                             |
|                                                             |   |                                                                           |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |
| (b)        Selling or exercising rights                     |   | $5.00        (or less) for each 100 ADSs         (or portion of 100 ADSs) |   | Distribution        or sale of securities, the fee being in an amount equal        to the fee for the execution and delivery of ADSs which        would have been charged as a result of the deposit of        such securities.                                                                                                                                                                                                                                                                                                                                                                        |
|                                                             |   |                                                                           |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |
| (c)        Withdrawing an underlying security               |   | $5.00        (or less) for each 100 ADSs         (or portion of 100 ADSs) |   | Acceptance        of ADRs surrendered for withdrawal of deposited        securities.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |
|                                                             |   |                                                                           |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |
| (d)        Transferring, splitting or grouping receipts     |   | Registration        or transfer fees                                      |   | Transfers,        combining or grouping of depositary receipts.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |
|                                                             |   |                                                                           |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |
| (e)        Expenses of the depositary                       |   | Varied        charges                                                     |   | Expenses        incurred on behalf of holders in connection with:         • The depositary’s or its custodian’s        compliance with applicable law, rule or regulation.         • Stock transfer or other taxes and other        governmental charges.         • Cable, telex, facsimile transmission/delivery.         • Expenses of the depositary in connection with the        conversion of foreign currency into U.S. dollars (which        are paid out of such foreign currency).         • Any other charge payable by Depositary or its        agents. |
|                                                             |   |                                                                           |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |
| (f)        Distribution of cash                             |   | $0.02        (or less) per ADS                                            |   | Any        cash distribution to ADS registered holders.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |
|                                                             |   |                                                                           |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |
| (g)        Depositary services                              |   | $0.02        (or less) per ADS         per calendar year                  |   | Depositary        services.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |
|                                                             |   |                                                                           |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |

----

| (1) |   | All fees and        charges are paid by ADR holders to Bank of New York        Mellon as Depositary and Transfer agent. |
|-----|--------|-------------------------------------------------------------------------------------------------------------------------|

 

*Fees and payments made by the Depositary to the issuer*The Depositary has agreed to reimburse certain companyexpenses related to the ADR Program and incurred in connectionwith the program and the listing of Eni’s ADSs on the NewYork Stock Exchange. These expenses are mainly related to legaland accounting fees incurred in connection with the preparationof regulatory filings and other documentation related to ongoingSEC compliance, NYSE listing fees, listing and custodian bankfees, advertising, certain investor relationship programs orspecial investor relations activities.

For the year 2012, as agreed in the Deposit Agreement with theprevious depositary bank, JPMorgan Chase Bank of New York, andsubsequent amendments, the Depositary will reimburse to Eni up to$1,500,000 in connection with above mentioned expenditures.

 

*Expenses waived or paid directly to third parties by theDepositary*For the year 2012, the depositary has agreed to waive feesfor standard costs associated with the administration of the adsprogram and has paid certain expenses directly to third partieson behalf of Eni SpA. These waived fees amounted to $117,487.39.

|   |   | **2012** |
|--------|--------|----------|
|   |   |          |
|   |   | **($)**  |

| Fees paid to third parties             |   | 7,487.39       |
|----------------------------------------|--------|----------------|
| BNYMellon        Products and Services |   | 110,000.00     |
| **Total**                              |   | **117,487.39** |
|                                   |   |                |

 

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**PART II**

**Item 13. DEFAULTS, DIVIDEND ARREARAGES ANDDELINQUENCIES**

None.

 

 

**Item 14. MATERIAL MODIFICATIONS TO THERIGHTS OF SECURITY HOLDERS AND USE OF PROCEEDS**

None.

 

 

**Item 15. CONTROLS AND PROCEDURES**

*Disclosure controls and procedures*In designing and evaluating the Company’s disclosurecontrols and procedures (as defined in Rules 13a-15(e) and15d-15(e) under the Securities Exchange Act of 1934 (the"Exchange Act"), the Company’s management,including the Chief Executive Officer and the Chief FinancialOfficer, recognized that any controls and procedures, no matterhow well designed and operated, can provide only reasonableassurance of achieving the desired control objectives, and theCompany’s management necessarily was required to apply itsjudgment in evaluating the cost benefit relationship of possiblecontrols and procedures. Because of the inherent limitations inall control systems, no evaluation of controls can provideabsolute assurance that all control issues and instances offraud, if any, within the Company have been detected.

It should be noted that the Company has investments in certainnon-consolidated entities. As the Company does not control ormanage these entities, its disclosure controls and procedureswith respect to such entities are necessarily more limited thanthose it maintains with respect to its consolidated subsidiaries.

The Company’s management, with the participation of theprincipal executive officer and principal financial officer, hasevaluated the effectiveness of the design and operation of itsdisclosure controls and procedures pursuant to Rule 13a-14(c)under the Exchange Act as of the end of the period covered bythis Annual Report on Form 20-F. Based on that evaluation, theprincipal executive officer and principal financial officer haveconcluded that these disclosure controls and procedures areeffective.

 

*Management’s Annual Report on Internal Control overFinancial Reporting*The Company’s management is responsible for establishingand maintaining adequate internal control over financialreporting as defined in Exchange Act Rules 13a-15(f). Because ofits inherent limitations, internal control over financialreporting may not prevent or detect misstatements and even whendetermined to be effective can only provide reasonable assurancewith respect to financial statement preparation and presentation.Also, the effectiveness of an internal control system may changeover time.

The Internal Control Committee assists the Board of Directorsin setting out the main principles for the internal controlsystem so as to appropriately identify and adequately evaluate,manage, and monitor the main risks related to the Company and itssubsidiaries, by laying down the compatibility criteria betweensaid risks and sound corporate management. In addition thisCommittee assesses, at least annually, the adequacy,effectiveness, and actual operations of the internal controlsystem.

The Company’s management, including the Chief ExecutiveOfficer and the Chief Financial Officer, conducted an evaluationof the effectiveness of its internal control over financialreporting based on the Internal Control – IntegratedFramework issued by the Committee of Sponsoring Organizations ofthe Treadway Commission ("COSO"). Based on the resultsof this evaluation, the Group’s management concluded thatits internal control over financial reporting was effective as ofDecember 31, 2012.

The effectiveness of the Company’s internal control overfinancial reporting as of December 31, 2012, has been audited byReconta Ernst & Young SpA, an independent registered publicaccounting firm, as stated in its report that is included onpage F-2 of this Annual Report on Form 20-F.

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*Changes in Internal Control over Financial Reporting*There have not been changes in the Company’s internalcontrol over financial reporting that occurred during the periodcovered by this Form 20-F that have materially affected, or arereasonably likely to materially affect, the Company’sinternal control over financial reporting.

 

**Item 16A. Board of Statutory Auditorsfinancial expert**

Eni’s Board of Statutory Auditors has determined that thefive members of Eni’s Board of Statutory Auditors are"audit committee financial expert". These five membersare: Ugo Marinelli, who is the Chairman of the Board, RobertoFerranti, Paolo Fumagalli, Renato Righetti and Giorgio Silva. Allmembers are independent.

 

**Item 16B. Code of Ethics**

Eni adopted a Code of Ethics that applies to all Eni’semployees including Eni’s principal executive officer,principal financial officer and principal accounting officer. Enipublished its Code of Ethics on Eni’s website. It isaccessible at www.eni.com, under the section CorporateGovernance. A copy of this Code of Ethics is included as anexhibit to this Annual Report on Form 20-F.

Eni’s Code of Ethics contains ethical guidelines,describes corporate values and requires standards of businessconduct and moral integrity. The ethical guidelines are designedto deter wrongdoing and to promote honest and ethical conduct,compliance with applicable laws and regulations and internalreporting of violations of the guidelines. The code affirms theprinciples of accounting transparency and internal control andendorses human rights and the issue of the sustainability of thebusiness model.

 

**Item 16C. Principal accountant fees andservices**

Reconta Ernst & Young SpA has served as Eni’sprincipal independent public auditor for fiscal years 2012 and2011 for which audited Consolidated Financial Statements appearin this Annual Report on Form 20-F.

The following table shows total fees paid by Eni, itsconsolidated and non-consolidated subsidiaries and Eni’sshare of fees incurred by joint ventures for services provided byEni to its public auditors Reconta Ernst & Young SpA and itsrespective member firms, for the years ended December 31, 2012and 2011, respectively:

|   | **Year ended December 31,** |
|--------|-----------------------------|
|   |                             |

|   |   | **2011** |   | **2012** |
|--------|--------|----------|--------|----------|
|   |   |          |   |          |

|   |   | **(euro thousand)** |
|--------|--------|---------------------|

| Audit fees                |   | 22,031     |   | 23,042     |
|---------------------------|--------|------------|--------|------------|
| Audit-related        fees |   | 1,113      |   | 1,351      |
| Tax fees                  |   | 323        |   | 25         |
| All other        fees     |   | -          |   | 3          |
| **Total**                 |   | **23,467** |   | **24,421** |
|                      |   |            |   |            |

Audit fees include professional services rendered by theprincipal accountant for the audit of the registrant’sannual financial statements or services that are normallyprovided by the accountant in connection with statutory andregulatory filings or engagements, including the audit on theCompany’s internal control over financial reporting.

Audit-related fees include assurance and related services bythe principal accountant that are reasonably related to theperformance of the audit or review of the registrant’sfinancial statements and are not reported as Audit fees in thisItem. The fees disclosed in this category mainly include auditsof pension and benefit plans, merger and acquisition due 

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diligence, audit and consultancy services rendered inconnection with acquisition deals, certification services notprovided for by law and regulations and consultations concerningfinancial accounting and reporting standards.

Tax fees include professional services rendered by theprincipal accountant for tax compliance, tax advice, and taxplanning. The fees disclosed in this category mainly include feesbilled for the assistance with compliance and reporting of incomeand value added taxes, assistance with assessment of new orchanging tax regimes, tax consultancy in connection with mergerand acquisition deals, services rendered in connection with taxrefunds, assistance rendered on occasion of tax inspections andin connection with tax claims and recourses and assistance withassessing relevant rules, regulations and facts going into Enicorrespondence with tax authorities.

All other fees include products and services provided by theprincipal accountant, other than the services reported in Auditfees, Audit-related fees and Tax fees of this Item and consistsprimarily of fees billed for consultancy services related to ITand secretarial services that are permissible under applicablerules and regulations.

 

*Pre-approval policies and procedures of the InternalControl Committee*The Board of Statutory Auditors has adopted a pre-approvalpolicy for audit and non-audit services that set forth theprocedures and the conditions pursuant to which services proposedto be performed by the principal auditors may be pre-approved.Such policy is applied to entities within the Eni Group which areeither controlled or jointly-controlled (directly or indirectly)by Eni SpA. According to this policy, permissible services withinthe other audit services category are pre-approved by the Boardof Statutory Auditors. The Board of Statutory Auditors approvalis required on a case-by-case basis for those requests regarding:(i) audit-related services; and (ii) non-audit services to beperformed by the external auditors which are permissible underapplicable rules and regulations. In such cases, theCompany’s internal audit department is charged withperforming an initial assessment of each request to be submittedto the Board of Statutory Auditors for approval. The internalaudit department periodically reports to Eni’s Board ofStatutory Auditors on the status of both pre-approved servicesand services approved on a case-by-case basis rendered by theexternal auditors.

During 2012, no audit-related fees, tax fees or othernon-audit fees were approved by the Board of Statutory Auditorspursuant to the de minimis exception to the pre-approvalrequirement provided by paragraph (c)(7)(i) (c) of Rule 2-01 ofRegulation S-X.

 

**Item 16D. Exemptions from the ListingStandards for Audit Committees**

Making use of the exemption provided by Rule 10A-3(c)(3) fornon-U.S. private issuers, Eni has identified the Board ofStatutory Auditors as the body that, starting from June 1, 2005,is performing the functions required by the SEC rules and theSarbanes-Oxley Act to be performed by the audit committees ofnon-U.S. companies listed on the NYSE (see "Item 6 –Board of Statutory Auditors" above).

 

**Item 16E. Purchases of equity securities bythe issuer and affiliated purchasers**

The issuer and its affiliated purchasers have not executed anypurchase of equity securities of the issuer since the beginningof 2009 up as of the date of the 20-F filing for the year endedDecember 31, 2012. 

On July 16, 2012, the Extraordinary and OrdinaryShareholders’ meeting resolved to authorize the Board ofDirectors to purchase – in one or more transactions and inany case within 18 months from the date of the resolution –up to a maximum number of 363,000,000 ordinary Eni shares on theMercato Telematico Azionario and up to a total amount of euro6,000 million. The Board of Directors resolved to propose to theannual Shareholders’ Meeting scheduled on May 10, 2013 togrant a proxy to the Board of Directors to continue the purchaseprogram of treasury shares for a period of 18 months beginningfrom the date of the grant.

As of December 31, 2012, Eni’s treasury shares inportfolio amounted to No. 11,388,287 corresponding to 0.31% ofshare capital of Eni, for a total book value of euro 201 million.The decrease of No. 371,266,546 shares held in treasury fromDecember 31, 2011 (No. 382,654,833 shares) related to thecancellation of No. 371,173,546 shares, as resolved by theExtraordinary and Ordinary Shareholders’ meeting held onJuly 16, 2012 and to the sale of No. 93,000 shares following 2004stock option plan.

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**Item 16F. Change in Registrant’sCertifying Accountant**

Not applicable.

 

**Item 16G. Significant differences inCorporate Governance practices as per Section 303A.11 of the NewYork Stock Exchange Listed Company Manual**

*Corporate governance.*Eni’s governance structurefollows the traditional model as defined by the Italian CivilCode which provides for two main separate corporate bodies, theBoard of Directors and the Board of Statutory Auditors to whommanagement and monitoring duties are respectively entrusted.

This model differs from the U.S. one-tier model in which theBoard of Directors is the sole corporate body responsible formanagement, with an Audit Committee established within the Boardperforming monitoring activities.

The following offers a description of the most significantdifferences between corporate governance practices adopted byU.S. domestic companies under the NYSE standards and thosefollowed by Eni, also with reference to Corporate Governance Codefor listed companies, which Eni has adopted (hereinafter theCorporate Governance Code).

 

> 
**Independent Directors**

*NYSE standards.*In accordance with NYSE standards, themajority of the members on the Boards of Directors of U.S.companies must be independent. A Director qualifies asindependent when the Board affirmatively determines that suchDirector does not have a material relationship with the listedcompany (and its subsidiaries), either directly, or indirectly.In particular, a Director may not be deemed independent if he/sheor an immediate family member has a certain specific relationshipwith the issuer, its auditors or companies that have materialbusiness relationships with the issuer (e.g. he/she is anemployee of the issuer or a partner of the auditor).

In addition, a Director cannot be considered independent inthe three-year "cooling-off" period following thetermination of any relationship that compromised aDirector’s independence.

*Eni standards.* In Italy, the Consolidated Law onFinancial Intermediation states that at least one of theDirectors or two, if the Board is composed of more than sevenmembers, must meet the independence requirements for StatutoryAuditors of listed companies.

In particular, a Director may not be deemed independent ifhe/she or an immediate family member has relationships with theissuer, with its Directors or with the companies in the samegroup of the issuer that could influence the independence oftheir judgment.

Eni’s By-laws require that at least one Director –if the Board has no more than five members – or at leastthree Directors – if the Board is composed of more than fivemembers – must satisfy the independence requirements.

Corporate Governance Code provides for additional independencerequirements, recommending that the Board of Directors includesan adequate number of independent non-executive Directors. Inparticular, for issuers belonging to FTSE-Mib index of theItalian Stock Market, like Eni, the Corporate Governance Coderecommends that at least one third of the members of the Board ofDirectors shall be independent Directors. In any event,independent Directors shall not be fewer than two. Independenceis defined as not being currently or recently involved in anydirect or indirect relationship with the issuer or other partiesassociated with the issuer and which may influence his/herindependent judgment.

After the appointment of a Director who qualifieshimself/herself as independent and subsequently, upon theoccurrence of circumstances affecting the independencerequirements and in any case at least once a year, the Board ofDirectors assesses the independence of the Director. The Board ofStatutory Auditors verifies the correct application of thecriteria and procedures adopted by the Board of Directors toevaluate the independence of its members.

The Board of Directors shall disclose the result of itsevaluations, after the appointment, through a press release tothe market and, subsequently, in the Annual Corporate GovernanceReport.

In accordance with Eni’s By-laws, if a Director does notor no longer satisfies the independence requirements or theminimum number of independent Directors fall below the thresholdset by Eni’s By-laws, the Board declares the 

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Director disqualified and provides for his/her substitution.Directors shall notify the Company if they should no longersatisfy the independence and integrity requirements or if causefor ineligibility or incompatibility should arise.

 

> 
**Meetings of non-executive Directors**

*NYSE standards.* Non-executive Directors, includingthose who are not independent, must meet on a regular basiswithout the executive Directors.

In addition, if the group of non-executive Directors includesDirectors who are not independent, independent Directors shouldmeet separately at least once a year.

*Eni standards.* Pursuant to Corporate Governance Code,independent Directors shall meet at least once a year without theother Directors. During 2012, Eni’s independent Directorshad numerous opportunities to meet, formally and informally, tohold discussions and exchange opinions.

 

> 
**Audit Committee**

*NYSE standards.* Listed U.S. companies must have anaudit committee that satisfies the requirements of Rule 10A-3under the Securities Exchange Act of 1934 and that complies withthe provisions of the Sarbanes-Oxley Act and of Section 303A.07of the NYSE Listed Company Manual.

*Eni standards.* At its Meeting of March 22, 2005, theBoard of Directors, as permitted by the rules of the U.S.Securities and Exchange Commission applicable to foreign issuerslisted on regulated U.S. markets, assigned the Board of StatutoryAuditors, effective from June 1, 2005 and within the limits setby Italian law, the functions specified and the responsibilitiesassigned to the Audit Committee of such foreign issuers by theSarbanes-Oxley Act and the SEC rules (see "Item 6 –Board of Statutory Auditors" earlier).

Under Section 303A.07 of the NYSE Listed Company Manual, auditcommittees of U.S. companies have additional functions and dutieswhich are not mandatory for non-U.S. private issuers and whichare therefore not included in the list of functions reported in"Item 6 – Board of Statutory Auditors".

 

> 
**Nominating/Corporate Governance Committee**

*NYSE standards.*U.S. listed companies must have anominating/corporate governance committee (or equivalent body)composed entirely of independent Directors whose functionsinclude, but are not limited to, selecting qualified candidatesfor the office of Director for submission to theShareholders’ Meeting, as well as developing andrecommending corporate governance guidelines to the Board ofDirectors. This provision is not binding for non-U.S. privateissuers. 

*Eni standards.* Pursuant to the Corporate GovernanceCode, the Board of Directors shall establish among its members anomination committee the majority of whose member shall beindependent Directors.

On July 28, 2011, the Board of Directors of Eni establishedthe Nomination Committee, chaired by the Chairman of the Board ofDirectors, Giuseppe Recchi, and composed of the Chairmen of theother Board Committees: Alessandro Lorenzi (Chairman of theControl and Risk Committee), Alessandro Profumo (Chairman of theOil-Gas Energy Committee) and Mario Resca (Chairman of theCompensation Committee). The Nomination Committee is made up ofthree to four Directors, a majority of whom are independent inaccordance with the recommendations of the Corporate GovernanceCode28. Further details on this Committee are reportedin the Item 6.

 

> 
**Code of Business Conduct and Ethics**

*NYSE standards.*The NYSE listing standards require eachU.S. listed company to adopt a code of business conduct andethics for its Directors, officers and employees, and to promptlydisclose any waivers of the code for Directors or executiveofficers.

----

| (28) |    | The Committee        is currently made up of four Directors, three of whom are        independent. The Chairman is not independent pursuant to        the Corporate Governance Code which provides that the        Chairman of the Board of Directors shall not be        considered independent being a "significant        representative" of the Company. |
|------|--------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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*Eni standards.* At its meetings of December 15, 2003,and January 28, 2004, the Board of Directors of Eni approved anorganizational, management and control model pursuant to ItalianLegislative Decree No. 231 of 2001 (hereinafter "Model231") and established the associated Eni Watch Structure.Moreover, after subsequent approvals of the updates to Model 231in response to changes in the Italian legislation governing thematter and in the Company organizational structures, on March 14,2008, the Board of Directors approved the overall revision ofModel 231 and adopted Eni’s Code of Ethics – replacingthe previous version of Eni’s Code of Conduct of 1998.Eni’s Code of Ethics, which is an integral part of Model231, sets out a clear definition of the value system that Enirecognizes, accepts and upholds and the responsibilities that Eniassumes internally and externally in order to ensure that all itsbusiness activities are conducted in compliance with the law, ina context of fair competition, with honesty, integrity,correctness and in good faith, respecting the legitimateinterests of all the stakeholders with whom Eni interacts onongoing basis: shareholders, employees, suppliers, customers,commercial and financial partners, and the local communities andinstitutions of the countries where Eni operates. All the peopleworking for Eni, without exception or distinction, starting withDirectors, senior management and members of the Company’sbodies, as also required under SEC rules and the Sarbanes-OxleyAct, are committed to observing and enforcing the principles setout in the Code of Ethics in the performance of their functionsand duties. The synergies between the Code of Ethics and Model231 are underscored by the designation of the Eni WatchStructure, established under Model 231, as the Guarantor of theCode of Ethics. The Guarantor of the Code of Ethics acts toensure the protection and promotion of the above principles.Every six months, it presents a report on the implementation ofthe Code to the Control and Risk Committee, to the Board ofStatutory Auditors and to the Chairman and the CEO, who in turnreports on this to the Board of Directors. The composition of theModel 231 Watch Structure – initially formed of only threemembers – was modified in 2007 with the inclusion of twoexternal members, one of whom was appointed the Chairman of theWatch Structure itself, selected from among academics andprofessionals with proven experience in economic and businessmanagement matters. The internal members are the Senior ExecutiveVice President Legal Affairs, Executive Vice President HumanResources and Organization and Senior Executive Vice PresidentInternal Audit of the Company. On May 19, 2011, the Board ofDirectors, with the favorable opinion of the Board of StatutoryAuditors, appointed the current members of the Watch Structure.

 

**Item 16H. Mine safety disclosure**

Not applicable since Eni does not engage in mining operations.

 

 

 

 

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**PART III**

**Item 17. FINANCIAL STATEMENTS**

Not applicable.

 

 

**Item 18. FINANCIAL STATEMENTS**

Index to Financial Statements:

|                                                                                                                               | **Page** |
|------------------------------------------------------------------------------------------------------------------------------------|----------|
| Report of Independent        Registered Public Accounting Firm                                                                     | F-1      |
| Consolidated Balance Sheet as of December 31, 2012 and        2011                                                                 | F-3      |
| Consolidated profit and loss account for the years ended        December 31, 2012, 2011 and 2010                                   | F-4      |
| Consolidated Statements of comprehensive income for the        years ended December 31, 2012, 2011 and 2010                        | F-5      |
| Consolidated Statements of changes in shareholder’s        equity for the years ended December 31, 2012, 2011 and        2010 | F-6      |
| Consolidated Statement of cash flows for the years ended        December 31, 2012, 2011 and 2010                                   | F-9      |
| Notes to the Consolidated Financial Statements                                                                                     | F-11     |

 

 

**Item 19. EXHIBITS**

1. By-laws of Eni SpA

8. List of subsidiaries

11. Code of Ethics

Certifications:

12.1. Certification pursuant to Rule13a-14(a) of the Securities Exchange Act12.2. Certification pursuant to Rule 13a-14(a)of the Securities Exchange Act

13.1. Certification furnished pursuant toRule 13a-14(b) of the Securities Exchange Act (such certificateis not deemed filed for purpose of Section 18 of the Exchange Actand not incorporated by reference with any filing under theSecurities Act)13.2. Certification furnished pursuant to Rule13a-14(b) of the Securities Exchange Act (such certificate is notdeemed filed for purpose of Section 18 of the Exchange Act andnot incorporated by reference with any filing under theSecurities Act)

15.a(i) Report of DeGolyer and MacNaughton15.a(ii) Report of Ryder Scott Co

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**REPORT OF INDEPENDENT REGISTERED PUBLICACCOUNTING FIRM**

> 
 

**To the Board of Directors and Shareholders of Eni S.p.A.**

We have audited the accompanying consolidated balancesheets of Eni S.p.A. as of December 31, 2012 and 2011, and therelated consolidated profit and loss account and consolidatedstatements of comprehensive income, changes in shareholders’ equity,and cash flows for each of the three years in the period ended December 31, 2012.These financial statements are the responsibility of the Company’s management.Our responsibility is to express an opinion on these financial statementsbased on our audits.

We conducted our audits in accordance with the standardsof the Public Company Accounting Oversight Board (United States).Those standards require that we plan and perform the audit to obtainreasonable assurance about whether the financial statements are freeof material misstatement. An audit includes examining, on a test basis,evidence supporting the amounts and disclosures in the financial statements.An audit also includes assessing the accounting principles used andsignificant estimates made by management, as well as evaluating theoverall financial statement presentation. We believe that our auditsprovide a reasonable basis for our opinion.

In our opinion, the financial statements referred to abovepresent fairly, in all material respects, the consolidated financialposition of Eni S.p.A. at December 31, 2012 and 2011, and the consolidatedresults of its operations and its cash flows for each of the three years inthe period ended December 31, 2012, in conformity with International FinancialReporting Standards as issued by the International Accounting Standards Board.

We also have audited, in accordance with the standards of the PublicCompany Accounting Oversight Board (United States), Eni S.p.A.’s internalcontrol over financial reporting as of December 31, 2012, based on criteriaestablished in Internal Control-Integrated Framework issued by the Committeeof Sponsoring Organizations of the Treadway Commission and our report datedApril 9, 2013 expressed an unqualified opinion thereon.

/s/ Reconta Ernst & Young S.p.A.

Rome, Italy

April 9, 2013

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**REPORT OF INDEPENDENT REGISTERED PUBLICACCOUNTING FIRM**

> 
 

**To the Board of Directors and Shareholders of Eni S.p.A.**

We have audited Eni S.p.A.’s internal control over financialreporting as of December 31, 2012, based on criteria established in InternalControl–Integrated Framework issued by the Committee of Sponsoring Organizationsof the Treadway Commission (the COSO criteria). Eni S.p.A. management isresponsible for maintaining effective internal control over financial reporting,and for its assessment of the effectiveness of internal control over financialreporting included in the accompanying Management’s Annual Report on InternalControl over Financial Reporting on page 185. Our responsibility is to expressan opinion on the company’s internal control over financial reporting basedon our audit.

We conducted our audit in accordance with the standardsof the Public Company Accounting Oversight Board (United States).Those standards require that we plan and perform the audit to obtainreasonable assurance about whether effective internal control overfinancial reporting was maintained in all material respects. Our auditincluded obtaining an understanding of internal control over financialreporting, assessing the risk that a material weakness exists, testingand evaluating the design and operating effectiveness of internal controlbased on the assessed risk, and performing such other procedures as weconsidered necessary in the circumstances. We believe that our auditprovides a reasonable basis for our opinion.

A company’s internal control over financial reporting isa process designed to provide reasonable assurance regarding thereliability of financial reporting and the preparation of financialstatements for external purposes in accordance with generally acceptedaccounting principles. A company’s internal control over financialreporting includes those policies and procedures that (1) pertain tothe maintenance of records that, in reasonable detail, accurately andfairly reflect the transactions and dispositions of the assets of thecompany; (2) provide reasonable assurance that transactions are recordedas necessary to permit preparation of financial statements in accordancewith generally accepted accounting principles, and that receipts andexpenditures of the company are being made only in accordance withauthorizations of management and directors of the company; and (3)provide reasonable assurance regarding prevention or timely detectionof unauthorized acquisition, use, or disposition of the company’s assetsthat could have a material effect on the financial statements.

Because of its inherent limitations, internal control over financialreporting may not prevent or detect misstatements. Also, projectionsof any evaluation of effectiveness to future periods are subject tothe risk that controls may become inadequate because of changes inconditions, or that the degree of compliance with the policies orprocedures may deteriorate.

In our opinion, Eni S.p.A. maintained, in all material respects,effective internal control over financial reporting as of December 31,2012, based on the COSO criteria.

We also have audited, in accordance with the standards of the PublicCompany Accounting Oversight Board (United States), the consolidatedbalance sheets of Eni S.p.A. as of December 31, 2012 and 2011, and therelated consolidated profit and loss account and consolidated statementsof comprehensive income, changes in shareholders’ equity, and cash flowsfor each of the three years in the period ended December 31, 2012 and ourreport dated April 9, 2013 expressed an unqualified opinion thereon.

/s/ Reconta Ernst & Young S.p.A.

Rome, Italy

April 9, 2013

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**CONSOLIDATED BALANCE SHEET****(euro million)**

|   |   | **Dec. 31, 2011** |   | **Dec. 31, 2012** |
|--------|--------|-------------------|--------|-------------------|
|   |   |                   |   |                   |

|   | **  ** | **Note** | **  ** | **Total amount** | **  ** | ***of which with         related parties*** | **  ** | **Total amount** | **  ** | ***of which with         related parties*** |
|--------|------------------|----------|------------------|------------------|------------------|---------------------------------------------|------------------|------------------|------------------|---------------------------------------------|
|   |             |          |             |                  |             |                                             |             |                  |             |                                             |

| **ASSETS**                                                                |   |   |   |        |   |   |    |   |        |   |   |    |
|---------------------------------------------------------------------------|--------|--------|--------|-------------|--------|--------|---------|--------|-------------|--------|--------|---------|
| **Current        assets**                                                 |   |   |   |        |   |   |    |   |        |   |   |    |
| Cash and cash equivalents                                                 |   | (7)    |   | 1,500       |   |   |    |   | 7,765       |   |   |    |
| Other        financial assets available for sale                          |   | (8)    |   | 262         |   |   |    |   | 235         |   |   |    |
| Trade and other receivables                                               |   | (9)    |   | 24,595      |   |   | *1,496* |   | 28,621      |   |   | *2,714* |
| Inventories                                                               |   | (10)   |   | 7,575       |   |   |    |   | 8,496       |   |   |    |
| Current tax assets                                                        |   | (11)   |   | 549         |   |   |    |   | 771         |   |   |    |
| Other        current tax assets                                           |   | (12)   |   | 1,388       |   |   |    |   | 1,230       |   |   |    |
| Other current assets                                                      |   | (13)   |   | 2,326       |   |   | *2*     |   | 1,624       |   |   | *8*     |
|                                                                      |   |   |   | **38,195**  |   |   |    |   | **48,742**  |   |   |    |
| **Non-current assets**                                                    |   |   |   |        |   |   |    |   |        |   |   |    |
| Property,        plant and equipment                                      |   | (14)   |   | 73,578      |   |   |    |   | 63,466      |   |   |    |
| Inventory - compulsory stock                                              |   | (15)   |   | 2,433       |   |   |    |   | 2,538       |   |   |    |
| Intangible        assets                                                  |   | (16)   |   | 10,950      |   |   |    |   | 4,487       |   |   |    |
| Equity-accounted investments                                              |   | (17)   |   | 5,843       |   |   |    |   | 4,265       |   |   |    |
| Other        investments                                                  |   | (17)   |   | 399         |   |   |    |   | 5,085       |   |   |    |
| Other financial assets                                                    |   | (18)   |   | 1,578       |   |   | *704*   |   | 1,229       |   |   | *642*   |
| Deferred        tax assets                                                |   | (19)   |   | 5,514       |   |   |    |   | 4,913       |   |   |    |
| Other non-current receivables                                             |   | (20)   |   | 4,225       |   |   | *3*     |   | 4,400       |   |   | *43*    |
|                                                                      |   |   |   | **104,520** |   |   |    |   | **90,383**  |   |   |    |
| **Assets held for sale**                                                  |   | (31)   |   | **230**     |   |   |    |   | **516**     |   |   |    |
| **TOTAL        ASSETS**                                                   |   |   |   | **142,945** |   |   |    |   | **139,641** |   |   |    |
| **LIABILITIES AND SHAREHOLDERS’ EQUITY**                             |   |   |   |        |   |   |    |   |        |   |   |    |
| **Current        liabilities**                                            |   |   |   |        |   |   |    |   |        |   |   |    |
| Short-term debt                                                           |   | (21)   |   | 4,459       |   |   | *503*   |   | 2,223       |   |   | *403*   |
| Current        portion of long-term debt                                  |   | (26)   |   | 2,036       |   |   |    |   | 2,961       |   |   |    |
| Trade and other payables                                                  |   | (22)   |   | 22,912      |   |   | *1,446* |   | 23,581      |   |   | *1,616* |
| Income        taxes payable                                               |   | (23)   |   | 2,092       |   |   |    |   | 1,622       |   |   |    |
| Other taxes payable                                                       |   | (24)   |   | 1,896       |   |   |    |   | 2,162       |   |   |    |
| Other        current liabilities                                          |   | (25)   |   | 2,237       |   |   |    |   | 1,437       |   |   | *6*     |
|                                                                      |   |   |   | **35,632**  |   |   |    |   | **33,986**  |   |   |    |
| **Non-current        liabilities**                                        |   |   |   |        |   |   |    |   |        |   |   |    |
| Long-term debt                                                            |   | (26)   |   | 23,102      |   |   |    |   | 19,279      |   |   |    |
| Provisions        for contingencies                                       |   | (27)   |   | 12,735      |   |   |    |   | 13,603      |   |   |    |
| Provisions for employee benefits                                          |   | (28)   |   | 1,039       |   |   |    |   | 982         |   |   |    |
| Deferred        tax liabilities                                           |   | (29)   |   | 7,120       |   |   |    |   | 6,740       |   |   |    |
| Other non-current liabilities                                             |   | (30)   |   | 2,900       |   |   |    |   | 1,977       |   |   | *16*    |
|                                                                      |   |   |   | **46,896**  |   |   |    |   | **42,581**  |   |   |    |
| **Liabilities directly associated with assets        held for sale**      |   | (31)   |   | **24**      |   |   |    |   | **361**     |   |   |    |
| **TOTAL        LIABILITIES**                                              |   |   |   | **82,552**  |   |   |    |   | **76,928**  |   |   |    |
| **SHAREHOLDERS’ EQUITY**                                             |   | (32)   |   |        |   |   |    |   |        |   |   |    |
| **Non-controlling        interest**                                       |   |   |   | **4,921**   |   |   |    |   | **3,514**   |   |   |    |
| **Eni shareholders’ equity**                                         |   |   |   |        |   |   |    |   |        |   |   |    |
| Share        capital                                                      |   |   |   | 4,005       |   |   |    |   | 4,005       |   |   |    |
| Reserve related to cash flow hedging derivatives        net of tax effect |   |   |   | 49          |   |   |    |   | (16         | )      |   |    |
| Other        reserves                                                     |   |   |   | 53,195      |   |   |    |   | 49,579      |   |   |    |
| Treasury shares                                                           |   |   |   | (6,753      | )      |   |    |   | (201        | )      |   |    |
| Interim        dividend                                                   |   |   |   | (1,884      | )      |   |    |   | (1,956      | )      |   |    |
| Net profit                                                                |   |   |   | 6,860       |   |   |    |   | 7,788       |   |   |    |
| **Total        Eni shareholders’ equity**                            |   |   |   | **55,472**  |   |   |    |   | **59,199**  |   |   |    |
| **TOTAL SHAREHOLDERS’ EQUITY**                                       |   |   |   | **60,393**  |   |   |    |   | **62,713**  |   |   |    |
| **TOTAL        LIABILITIES AND SHAREHOLDERS’ EQUITY**                |   |   |   | **142,945** |   |   |    |   | **139,641** |   |   |    |

|   |   |  |   |  |   |  |   |  |   |  |
|--------|--------|--|--------|--|--------|--|--------|--|--------|--|

F-3

----

##### Table of Contents

**CONSOLIDATED PROFIT AND LOSSACCOUNT****(****euro million****except as otherwise stated)**

|   |   | **2010** |   | **2011** |   | **2012** |
|--------|--------|----------|--------|----------|--------|----------|
|   |   |          |   |          |   |          |

|   | **  ** | **Note** | **  ** | **Total amount** | **  ** | ***of which with         related parties*** | **  ** | **Total amount** | **  ** | ***of which with         related parties*** | **  ** | **Total amount** | **  ** | ***of which with         related parties*** |
|--------|------------------|----------|------------------|------------------|------------------|---------------------------------------------|------------------|------------------|------------------|---------------------------------------------|------------------|------------------|------------------|---------------------------------------------|
|   |             |          |             |                  |             |                                             |             |                  |             |                                             |             |                  |             |                                             |

| **REVENUES**                                                              |   | (35)         |   |       |   |   |    |   |   |        |   |   |    |   |   |        |   |   |    |   |
|---------------------------------------------------------------------------|--------|--------------|--------|------------|--------|--------|---------|--------|--------|-------------|--------|--------|---------|--------|--------|-------------|--------|--------|---------|--------|
| Net sales        from operations                                          |   |    |   | 96,617     |   |   | *2,905* |   |   | 107,690     |   |   | *3,477* |   |   | 127,220     |   |   | *3,783* |   |
| Other income and revenues                                                 |   |         |   | 967        |   |   | *57*    |   |   | 926         |   |   | *41*    |   |   | 1,546       |   |   | *56*    |   |
|                                                                      |   |         |   | **97,584** |   |   |    |   |   | **108,616** |   |   |    |   |   | **128,766** |   |   |    |   |
| **OPERATING EXPENSES**                                                    |   | (36)         |   |       |   |   |    |   |   |        |   |   |    |   |   |        |   |   |    |   |
| Purchases,        services and other                                      |   |         |   | 68,774     |   |   | *5,820* |   |   | 78,795      |   |   | *5,880* |   |   | 95,363      |   |   | *6,604* |   |
| *- of which non-recurring charge (income)*                                |   | (43)         |   | *(246*     | *)*    |   |    |   |   | *69*        |   |   |    |   |   |        |   |   |    |   |
| Payroll        and related costs                                          |   |         |   | 4,428      |   |   | *28*    |   |   | 4,404       |   |   | *33*    |   |   | 4,658       |   |   | *21*    |   |
| **OTHER OPERATING (EXPENSE) INCOME**                                      |   | (36)         |   | **131**    |   |   | *41*    |   |   | **171**     |   |   | *32*    |   |   | **(158**    | **)**  |   | *10*    |   |
| **DEPRECIATION,        DEPLETION, AMORTIZATION AND IMPAIRMENTS**          |   | (36)         |   | **9,031**  |   |   |    |   |   | **8,785**   |   |   |    |   |   | **13,561**  |   |   |    |   |
| **OPERATING PROFIT**                                                      |   |         |   | **15,482** |   |   |    |   |   | **16,803**  |   |   |    |   |   | **15,026**  |   |   |    |   |
| **FINANCE        INCOME (EXPENSE)**                                       |   | (37)         |   |       |   |   |    |   |   |        |   |   |    |   |   |        |   |   |    |   |
| Finance income                                                            |   |         |   | 6,109      |   |   | *41*    |   |   | 6,376       |   |   | *49*    |   |   | 7,218       |   |   | *53*    |   |
| Finance        expense                                                    |   |         |   | (6,727     | )      |   |    |   |   | (7,410      | )      |   | *(1*    | *)*    |   | (8,274      | )      |   | *(4*    | *)*    |
| Derivative financial instruments                                          |   |         |   | (131       | )      |   |    |   |   | (112        | )      |   |    |   |   | (251        | )      |   |    |   |
|                                                                      |   |         |   | **(749**   | **)**  |   |    |   |   | **(1,146**  | **)**  |   |    |   |   | **(1,307**  | **)**  |   |    |   |
| **INCOME (EXPENSE) FROM INVESTMENTS**                                     |   | (38)         |   |       |   |   |    |   |   |        |   |   |    |   |   |        |   |   |    |   |
| Share of        profit (loss) of equity-accounted investments             |   |         |   | 493        |   |   |    |   |   | 500         |   |   |    |   |   | 278         |   |   |    |   |
| Other gain (loss) from investments                                        |   |         |   | 619        |   |   |    |   |   | 1,623       |   |   | *338*   |   |   | 2,603       |   |   |    |   |
|                                                                      |   |         |   | **1,112**  |   |   |    |   |   | **2,123**   |   |   |    |   |   | **2,881**   |   |   |    |   |
| **PROFIT BEFORE INCOME TAXES**                                            |   |         |   | **15,845** |   |   |    |   |   | **17,780**  |   |   |    |   |   | **16,600**  |   |   |    |   |
| Income        taxes                                                       |   | (39)         |   | (8,581     | )      |   |    |   |   | (9,903      | )      |   |    |   |   | (11,659     | )      |   |    |   |
| **Net profit for the year - Continuing        operations**                |   |         |   | **7,264**  |   |   |    |   |   | **7,877**   |   |   |    |   |   | **4,941**   |   |   |    |   |
| **Net        profit (loss) for the year - Discontinued operations**       |   | (31)         |   | **119**    |   |   | *365*   |   |   | **(74**     | **)**  |   | *400*   |   |   | **3,732**   |   |   | *2,234* |   |
| **Net profit for the year**                                               |   |         |   | **7,383**  |   |   |    |   |   | **7,803**   |   |   |    |   |   | **8,673**   |   |   |    |   |
| **Attributable        to Eni**                                            |   |         |   |       |   |   |    |   |   |        |   |   |    |   |   |        |   |   |    |   |
| Continuing operations                                                     |   |         |   | 6,252      |   |   |    |   |   | 6,902       |   |   |    |   |   | 4,198       |   |   |    |   |
| Discontinued        operations                                            |   | (31)         |   | 66         |   |   |    |   |   | (42         | )      |   |    |   |   | 3,590       |   |   |    |   |
|                                                                      |   |         |   | **6,318**  |   |   |    |   |   | **6,860**   |   |   |    |   |   | **7,788**   |   |   |    |   |
| **Attributable        to non-controlling interest**                       |   | (32)         |   |       |   |   |    |   |   |        |   |   |    |   |   |        |   |   |    |   |
| Continuing operations                                                     |   |         |   | 1,012      |   |   |    |   |   | 975         |   |   |    |   |   | 743         |   |   |    |   |
| Discontinued        operations                                            |   | (31)         |   | 53         |   |   |    |   |   | (32         | )      |   |    |   |   | 142         |   |   |    |   |
|                                                                      |   |         |   | **1,065**  |   |   |    |   |   | **943**     |   |   |    |   |   | **885**     |   |   |    |   |
| **Earnings        per share attributable to Eni**        (euro per share) |   | (40)         |   |       |   |   |    |   |   |        |   |   |    |   |   |        |   |   |    |   |
| Basic                                                                     |   |         |   | 1.74       |   |   |    |   |   | 1.89        |   |   |    |   |   | 2.15        |   |   |    |   |
| Diluted                                                                   |   |         |   | 1.74       |   |   |    |   |   | 1.89        |   |   |    |   |   | 2.15        |   |   |    |   |
| **Earnings per share attributable to Eni**                                |   |         |   |       |   |   |    |   |   |        |   |   |    |   |   |        |   |   |    |   |
| **-        Continuing operations**(euro per        share)                 |   | (40)         |   |       |   |   |    |   |   |        |   |   |    |   |   |        |   |   |    |   |
| Basic                                                                     |   |         |   | 1.72       |   |   |    |   |   | 1.90        |   |   |    |   |   | 1.16        |   |   |    |   |
| Diluted                                                                   |   |         |   | 1.72       |   |   |    |   |   | 1.90        |   |   |    |   |   | 1.16        |   |   |    |   |
|                                                                      |   |              |   |            |        |   |         |        |   |             |        |   |         |        |   |             |        |   |         |        |

F-4

----

##### Table of Contents

**CONSOLIDATED****STATEMENTOF COMPREHENSIVE INCOME****(euro million)**

|   |   | **Note** |   | **2010** |   | **2011** |   | **2012** |
|--------|--------|----------|--------|----------|--------|----------|--------|----------|
|   |   |          |   |          |   |          |   |          |

| **Net profit**                                                                      |   |   |   | **7,383** |   |   | **7,803** |   |   | **8,673** |   |
|-------------------------------------------------------------------------------------|--------|--------|--------|-----------|--------|--------|-----------|--------|--------|-----------|--------|
| **Other        items of comprehensive income**                                      |   |   |   |      |   |   |      |   |   |      |   |
| Foreign currency translation differences                                            |   | (32)   |   | 2,169     |   |   | 1,031     |   |   | (717      | )      |
| Change in        the fair value of investments                                      |   | (32)   |   |      |   |   |      |   |   | 141       |   |
| Change in the fair value of other        available-for-sale financial instruments   |   | (32)   |   | (9        | )      |   | (6        | )      |   | 16        |   |
| Change in        the fair value of cash flow hedging derivatives                    |   | (32)   |   | 443       |   |   | 352       |   |   | (102      | )      |
| Share of "Other comprehensive income"        on equity-accounted entities |   | (32)   |   | (10       | )      |   | (13       | )      |   | 7         |   |
| Taxation                                                                            |   | (32)   |   | (175      | )      |   | (128      | )      |   | 32        |   |
| **Total other items of comprehensive income**                                       |   |   |   | **2,418** |   |   | **1,236** |   |   | **(623**  | **)**  |
| **Total        comprehensive income**                                               |   |   |   | **9,801** |   |   | **9,039** |   |   | **8,050** |   |
| **Attributable to:**                                                                |   |   |   |      |   |   |      |   |   |      |   |
| Eni                                                                                 |   |   |   | 8,699     |   |   | 8,097     |   |   | 7,183     |   |
| Non-controlling interest                                                            |   |   |   | 1,102     |   |   | 942       |   |   | 867       |   |
|                                                                                |   |   |   | **9,801** |   |   | **9,039** |   |   | **8,050** |   |
|                                                                                |   |        |   |           |        |   |           |        |   |           |        |

 

 

 

F-5

----

##### Table of Contents

**CONSOLIDATED STATEMENTSOF CHANGES IN SHAREHOLDERS’ EQUITY****(euro million)**

|   | **Eni shareholders’ equity** |   |
|--------|-----------------------------------|--------|
|   |                                   |   |

|   |   | Share capital |   | Legal reserve of Eni SpA |   | Reserve for treasury shares |   | Reserve related to the fair value of cash flow        hedging derivatives net of tax effect |   | Reserve related to the fair value of        available-for-sale financial instruments net of tax        effect |   | Other reserves |   | Cumulative currency translation        differences |   | Treasury shares |   | Retained earnings |   | Interim dividend |   | Net profit for the year |   | Total |   | Non-        controlling interest |   | Total shareholders’ equity |
|--------|--------|---------------|--------|--------------------------|--------|-----------------------------|--------|---------------------------------------------------------------------------------------------|--------|---------------------------------------------------------------------------------------------------------------|--------|----------------|--------|----------------------------------------------------|--------|-----------------|--------|-------------------|--------|------------------|--------|-------------------------|--------|-------|--------|----------------------------------|--------|---------------------------------|
|   |   |               |   |                          |   |                             |   |                                                                                             |   |                                                                                                               |   |                |   |                                                    |   |                 |   |                   |   |                  |   |                         |   |       |   |                                  |   |                                 |

| **Balance at December 31, 2009**                                                                                                     |   | **4,005** |   |   | **959** |   |   | **6,757** |   |   | **(439** | **)**  |   | **5**  |   |   | **1,492** |   |   | **(1,665** | **)**  |   | **(6,757** | **)**  |   | **39,160** |   |   | **(1,811** | **)**  |   | **4,367**  |   |   | **46,073** |   |   | **3,978** |   |   | **50,051** |   |
|--------------------------------------------------------------------------------------------------------------------------------------|--------|-----------|--------|--------|---------|--------|--------|-----------|--------|--------|----------|--------|--------|--------|--------|--------|-----------|--------|--------|------------|--------|--------|------------|--------|--------|------------|--------|--------|------------|--------|--------|------------|--------|--------|------------|--------|--------|-----------|--------|--------|------------|--------|
| **Net        profit of the year**                                                                                                    |   |      |   |   |    |   |   |      |   |   |     |   |   |   |   |   |      |   |   |       |   |   |       |   |   |       |   |   |       |   |   | **6,318**  |   |   | **6,318**  |   |   | **1,065** |   |   | **7,383**  |   |
| **Other items of comprehensive income**                                                                                              |   |      |   |   |    |   |   |      |   |   |     |   |   |   |   |   |      |   |   |       |   |   |       |   |   |       |   |   |       |   |   |       |   |   |       |   |   |      |   |   |       |   |
| Foreign        currency translation differences                                                                                      |   |      |   |   |    |   |   |      |   |   | (2       | )      |   |   |   |   |      |   |   | 2,204      |   |   |       |   |   | (75        | )      |   |       |   |   |       |   |   | 2,127      |   |   | 42        |   |   | 2,169      |   |
| Change in the fair value of cash flow hedging        derivatives net of tax effect                                                   |   |      |   |   |    |   |   |      |   |   | 267      |   |   |   |   |   |      |   |   |       |   |   |       |   |   |       |   |   |       |   |   |       |   |   | 267        |   |   |      |   |   | 267        |   |
| Change in        the fair value of other available-for-sale financial        instruments net of tax effect                           |   |      |   |   |    |   |   |      |   |   |     |   |   | (8     | )      |   |      |   |   |       |   |   |       |   |   |       |   |   |       |   |   |       |   |   | (8         | )      |   |      |   |   | (8         | )      |
| Share of "Other comprehensive income"        on equity-accounted entities                                                  |   |      |   |   |    |   |   |      |   |   |     |   |   |   |   |   | (5        | )      |   |       |   |   |       |   |   |       |   |   |       |   |   |       |   |   | (5         | )      |   | (5        | )      |   | (10        | )      |
|                                                                                                                                 |   |      |   |   |    |   |   |      |   |   | **265**  |   |   | **(8** | **)**  |   | **(5**    | **)**  |   | **2,204**  |   |   |       |   |   | **(75**    | **)**  |   |       |   |   |       |   |   | **2,381**  |   |   | **37**    |   |   | **2,418**  |   |
| **Total comprehensive income of the year**                                                                                           |   |      |   |   |    |   |   |      |   |   | **265**  |   |   | **(8** | **)**  |   | **(5**    | **)**  |   | **2,204**  |   |   |       |   |   | **(75**    | **)**  |   |       |   |   | **6,318**  |   |   | **8,699**  |   |   | **1,102** |   |   | **9,801**  |   |
| **Transactions        with shareholders**                                                                                            |   |      |   |   |    |   |   |      |   |   |     |   |   |   |   |   |      |   |   |       |   |   |       |   |   |       |   |   |       |   |   |       |   |   |       |   |   |      |   |   |       |   |
| Dividend distribution of Eni SpA (euro 0.50 per        share in settlement of 2009 interim dividend of euro 0.50        per share)   |   |      |   |   |    |   |   |      |   |   |     |   |   |   |   |   |      |   |   |       |   |   |       |   |   |       |   |   | 1,811      |   |   | (3,622     | )      |   | (1,811     | )      |   |      |   |   | (1,811     | )      |
| Interim        dividend distribution of Eni SpA (euro 0.50 per share)                                                                |   |      |   |   |    |   |   |      |   |   |     |   |   |   |   |   |      |   |   |       |   |   |       |   |   |       |   |   | (1,811     | )      |   |       |   |   | (1,811     | )      |   |      |   |   | (1,811     | )      |
| Dividend distribution of other companies                                                                                             |   |      |   |   |    |   |   |      |   |   |     |   |   |   |   |   |      |   |   |       |   |   |       |   |   |       |   |   |       |   |   |       |   |   |       |   |   | (514      | )      |   | (514       | )      |
| Allocation        of 2009 net profit                                                                                                 |   |      |   |   |    |   |   |      |   |   |     |   |   |   |   |   |      |   |   |       |   |   |       |   |   | 745        |   |   |       |   |   | (745       | )      |   |       |   |   |      |   |   |       |   |
| Effect related to the purchase of Italgas SpA        and Stogit SpA by Snam SpA                                                      |   |      |   |   |    |   |   |      |   |   |     |   |   |   |   |   | 56        |   |   |       |   |   |       |   |   |       |   |   |       |   |   |       |   |   | 56         |   |   | (56       | )      |   |       |   |
| Treasury        shares sold following the exercise of stock options by        Eni managers                                           |   |      |   |   |    |   |   | (1        | )      |   |     |   |   |   |   |   |      |   |   |       |   |   | 1          |   |   | 1          |   |   |       |   |   |       |   |   | 1          |   |   |      |   |   | 1          |   |
| Treasury shares sold following the exercise of        stock options by Saipem and Snam managers                                      |   |      |   |   |    |   |   |      |   |   |     |   |   |   |   |   |      |   |   |       |   |   |       |   |   | 10         |   |   |       |   |   |       |   |   | 10         |   |   | 27        |   |   | 37         |   |
| Non-controlling        interest recognized following the acquisition of the        control stake in the share capital of Altergaz SA |   |      |   |   |    |   |   |      |   |   |     |   |   |   |   |   |      |   |   |       |   |   |       |   |   |       |   |   |       |   |   |       |   |   |       |   |   | 7         |   |   | 7          |   |
| Non-controlling interest excluded following the        divestment of the control stake in the share capital of        GreenStream BV |   |      |   |   |    |   |   |      |   |   |     |   |   |   |   |   |      |   |   |       |   |   |       |   |   |       |   |   |       |   |   |       |   |   |       |   |   | (37       | )      |   | (37        | )      |
|                                                                                                                                 |   |      |   |   |    |   |   | **(1**    | **)**  |   |     |   |   |   |   |   | **56**    |   |   |       |   |   | **1**      |   |   | **756**    |   |   |       |   |   | **(4,367** | **)**  |   | **(3,555** | **)**  |   | **(573**  | **)**  |   | **(4,128** | **)**  |
| **Other changes in shareholders’ equity**                                                                                       |   |      |   |   |    |   |   |      |   |   |     |   |   |   |   |   |      |   |   |       |   |   |       |   |   |       |   |   |       |   |   |       |   |   |       |   |   |      |   |   |       |   |
| Cost        related to stock options                                                                                                 |   |      |   |   |    |   |   |      |   |   |     |   |   |   |   |   |      |   |   |       |   |   |       |   |   | 7          |   |   |       |   |   |       |   |   | 7          |   |   |      |   |   | 7          |   |
| Stock options expired                                                                                                                |   |      |   |   |    |   |   |      |   |   |     |   |   |   |   |   |      |   |   |       |   |   |       |   |   | (6         | )      |   |       |   |   |       |   |   | (6         | )      |   |      |   |   | (6         | )      |
| Stock        warrants on Altergaz SA                                                                                                 |   |      |   |   |    |   |   |      |   |   |     |   |   |   |   |   | (25       | )      |   |       |   |   |       |   |   |       |   |   |       |   |   |       |   |   | (25        | )      |   |      |   |   | (25        | )      |
| Other changes                                                                                                                        |   |      |   |   |    |   |   |      |   |   |     |   |   |   |   |   |      |   |   |       |   |   |       |   |   | 13         |   |   |       |   |   |       |   |   | 13         |   |   | 15        |   |   | 28         |   |
|                                                                                                                                 |   |      |   |   |    |   |   |      |   |   |     |   |   |   |   |   | **(25**   | **)**  |   |       |   |   |       |   |   | **14**     |   |   |       |   |   |       |   |   | **(11**    | **)**  |   | **15**    |   |   | **4**      |   |
| **Balance at December 31, 2010**                                                                                                     |   | **4,005** |   |   | **959** |   |   | **6,756** |   |   | **(174** | **)**  |   | **(3** | **)**  |   | **1,518** |   |   | **539**    |   |   | **(6,756** | **)**  |   | **39,855** |   |   | **(1,811** | **)**  |   | **6,318**  |   |   | **51,206** |   |   | **4,522** |   |   | **55,728** |   |
|                                                                                                                                 |   |           |        |   |         |        |   |           |        |   |          |        |   |        |        |   |           |        |   |            |        |   |            |        |   |            |        |   |            |        |   |            |        |   |            |        |   |           |        |   |            |        |

F-6

----

##### Table of Contents

**CONSOLIDATED****STATEMENTSOF CHANGES IN SHAREHOLDERS’ EQUITY***continued***(euro million)**

|   | **Eni shareholders’ equity** |   |
|--------|-----------------------------------|--------|
|   |                                   |   |

| Note   |   | Share capital |   | Legal reserve of Eni SpA |   | Reserve for treasury shares |   | Reserve related to the fair value of cash flow        hedging derivatives net of tax effect |   | Reserve related to the fair value of        available-for-sale financial instruments net of tax        effect |   | Other reserves |   | Cumulative currency translation        differences |   | Treasury shares |   | Retained earnings |   | Interim dividend |   | Net profit for the year |   | Total |   | Non-controlling interest |   | Total shareholders’ equity |
|--------|--------|---------------|--------|--------------------------|--------|-----------------------------|--------|---------------------------------------------------------------------------------------------|--------|---------------------------------------------------------------------------------------------------------------|--------|----------------|--------|----------------------------------------------------|--------|-----------------|--------|-------------------|--------|------------------|--------|-------------------------|--------|-------|--------|--------------------------|--------|---------------------------------|
|   |   |               |   |                          |   |                             |   |                                                                                             |   |                                                                                                               |   |                |   |                                                    |   |                 |   |                   |   |                  |   |                         |   |       |   |                          |   |                                 |

| **Balance at December 31, 2010**                                                                                                                                             |   |   | **4,005** |   |   | **959** |   |   | **6,756** |   |   | **(174** | **)**  |   | **(3** | **)**  |   | **1,518** |   |   | **539**   |   |   | **(6,756** | **)**  |   | **39,855** |   |   | **(1,811** | **)**  |   | **6,318**  |   |   | **51,206** |   |   | **4,522** |   |   | **55,728** |   |
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|--------|-----------|--------|--------|---------|--------|--------|-----------|--------|--------|----------|--------|--------|--------|--------|--------|-----------|--------|--------|-----------|--------|--------|------------|--------|--------|------------|--------|--------|------------|--------|--------|------------|--------|--------|------------|--------|--------|-----------|--------|--------|------------|--------|
| **Net        profit of the year**                                                                                                                                            |   |   |      |   |   |    |   |   |      |   |   |     |   |   |   |   |   |      |   |   |      |   |   |       |   |   |       |   |   |       |   |   | **6,860**  |   |   | **6,860**  |   |   | **943**   |   |   | **7,803**  |   |
| **Other items of comprehensive income**                                                                                                                                      |   |   |      |   |   |    |   |   |      |   |   |     |   |   |   |   |   |      |   |   |      |   |   |       |   |   |       |   |   |       |   |   |       |   |   |       |   |   |      |   |   |       |   |
| Foreign        currency translation differences                                                                                                                              | (32)   |   |      |   |   |    |   |   |      |   |   |     |   |   |   |   |   |      |   |   | 1,000     |   |   |       |   |   | 31         |   |   |       |   |   |       |   |   | 1,031      |   |   |      |   |   | 1,031      |   |
| Change in the fair value of cash flow hedging        derivatives net of tax effect                                                                                           | (32)   |   |      |   |   |    |   |   |      |   |   | 223      |   |   |   |   |   |      |   |   |      |   |   |       |   |   |       |   |   |       |   |   |       |   |   | 223        |   |   |      |   |   | 223        |   |
| Change in        the fair value of other available-for-sale financial        instruments net of tax effect                                                                   | (32)   |   |      |   |   |    |   |   |      |   |   |     |   |   | (5     | )      |   |      |   |   |      |   |   |       |   |   |       |   |   |       |   |   |       |   |   | (5         | )      |   |      |   |   | (5         | )      |
| Share of "Other comprehensive income"        on equity-accounted entities                                                                                          | (32)   |   |      |   |   |    |   |   |      |   |   |     |   |   |   |   |   | (12       | )      |   |      |   |   |       |   |   |       |   |   |       |   |   |       |   |   | (12        | )      |   | (1        | )      |   | (13        | )      |
|                                                                                                                                                                         |   |   |      |   |   |    |   |   |      |   |   | **223**  |   |   | **(5** | **)**  |   | **(12**   | **)**  |   | **1,000** |   |   |       |   |   | **31**     |   |   |       |   |   |       |   |   | **1,237**  |   |   | **(1**    | **)**  |   | **1,236**  |   |
| **Total comprehensive income of the year**                                                                                                                                   |   |   |      |   |   |    |   |   |      |   |   | **223**  |   |   | **(5** | **)**  |   | **(12**   | **)**  |   | **1,000** |   |   |       |   |   | **31**     |   |   |       |   |   | **6,860**  |   |   | **8,097**  |   |   | **942**   |   |   | **9,039**  |   |
| **Transactions        with shareholders**                                                                                                                                    |   |   |      |   |   |    |   |   |      |   |   |     |   |   |   |   |   |      |   |   |      |   |   |       |   |   |       |   |   |       |   |   |       |   |   |       |   |   |      |   |   |       |   |
| Dividend distribution of Eni SpA (euro 0.50 per        share in settlement of 2010 interim dividend of euro 0.50        per share)                                           |   |   |      |   |   |    |   |   |      |   |   |     |   |   |   |   |   |      |   |   |      |   |   |       |   |   |       |   |   | 1,811      |   |   | (3,622     | )      |   | (1,811     | )      |   |      |   |   | (1,811     | )      |
| Interim        dividend distribution of Eni SpA (euro 0.52 per share)                                                                                                        | (32)   |   |      |   |   |    |   |   |      |   |   |     |   |   |   |   |   |      |   |   |      |   |   |       |   |   |       |   |   | (1,884     | )      |   |       |   |   | (1,884     | )      |   |      |   |   | (1,884     | )      |
| Dividend distribution of other companies                                                                                                                                     |   |   |      |   |   |    |   |   |      |   |   |     |   |   |   |   |   |      |   |   |      |   |   |       |   |   |       |   |   |       |   |   |       |   |   |       |   |   | (571      | )      |   | (571       | )      |
| Allocation        of 2010 net profit                                                                                                                                         |   |   |      |   |   |    |   |   |      |   |   |     |   |   |   |   |   |      |   |   |      |   |   |       |   |   | 2,696      |   |   |       |   |   | (2,696     | )      |   |       |   |   |      |   |   |       |   |
| Payments by minority shareholders                                                                                                                                            |   |   |      |   |   |    |   |   |      |   |   |     |   |   |   |   |   |      |   |   |      |   |   |       |   |   |       |   |   |       |   |   |       |   |   |       |   |   | 26        |   |   | 26         |   |
| Acquisition        of non-controlling interest relating to Altergaz SA and        Tigáz Zrt                                                                             | (32)   |   |      |   |   |    |   |   |      |   |   |     |   |   |   |   |   | (94       | )      |   |      |   |   |       |   |   | (25        | )      |   |       |   |   |       |   |   | (119       | )      |   | (7        | )      |   | (126       | )      |
| Effect related to the purchase of Italgas SpA by        Snam SpA                                                                                                             | (32)   |   |      |   |   |    |   |   |      |   |   |     |   |   |   |   |   | (5        | )      |   |      |   |   |       |   |   |       |   |   |       |   |   |       |   |   | (5         | )      |   | 5         |   |   |       |   |
| Treasury        shares sold following the exercise of stock options        exercised by Eni managers                                                                         | (32)   |   |      |   |   |    |   |   | (3        | )      |   |     |   |   |   |   |   |      |   |   |      |   |   | 3          |   |   | 3          |   |   |       |   |   |       |   |   | 3          |   |   |      |   |   | 3          |   |
| Treasury shares sold following the exercise of        stock options by Saipem and Snam managers                                                                              | (32)   |   |      |   |   |    |   |   |      |   |   |     |   |   |   |   |   | 14        |   |   |      |   |   |       |   |   | (10        | )      |   |       |   |   |       |   |   | 4          |   |   | 13        |   |   | 17         |   |
| Non-controlling        interest excluded following the sale of Acqua Campania        SpA and the divestment of the control stake in the share        capital of Petromar Lda |   |   |      |   |   |    |   |   |      |   |   |     |   |   |   |   |   |      |   |   |      |   |   |       |   |   |       |   |   |       |   |   |       |   |   |       |   |   | (10       | )      |   | (10        | )      |
|                                                                                                                                                                         |   |   |      |   |   |    |   |   | **(3**    | **)**  |   |     |   |   |   |   |   | **(85**   | **)**  |   |      |   |   | **3**      |   |   | **2,664**  |   |   | **(73**    | **)**  |   | **(6,318** | **)**  |   | **(3,812** | **)**  |   | **(544**  | **)**  |   | **(4,356** | **)**  |
| **Other        changes in shareholders’ equity**                                                                                                                        |   |   |      |   |   |    |   |   |      |   |   |     |   |   |   |   |   |      |   |   |      |   |   |       |   |   |       |   |   |       |   |   |       |   |   |       |   |   |      |   |   |       |   |
| Cost related to stock options                                                                                                                                                |   |   |      |   |   |    |   |   |      |   |   |     |   |   |   |   |   |      |   |   |      |   |   |       |   |   | 2          |   |   |       |   |   |       |   |   | 2          |   |   |      |   |   | 2          |   |
| Stock        options expired                                                                                                                                                 |   |   |      |   |   |    |   |   |      |   |   |     |   |   |   |   |   |      |   |   |      |   |   |       |   |   | (7         | )      |   |       |   |   |       |   |   | (7         | )      |   |      |   |   | (7         | )      |
| Other changes                                                                                                                                                                |   |   |      |   |   |    |   |   |      |   |   |     |   |   |   |   |   |      |   |   |      |   |   |       |   |   | (14        | )      |   |       |   |   |       |   |   | (14        | )      |   | 1         |   |   | (13        | )      |
|                                                                                                                                                                         |   |   |      |   |   |    |   |   |      |   |   |     |   |   |   |   |   |      |   |   |      |   |   |       |   |   | **(19**    | **)**  |   |       |   |   |       |   |   | **(19**    | **)**  |   | **1**     |   |   | **(18**    | **)**  |
| **Balance at December 31, 2011**                                                                                                                                             | (32)   |   | **4,005** |   |   | **959** |   |   | **6,753** |   |   | **49**   |   |   | **(8** | **)**  |   | **1,421** |   |   | **1,539** |   |   | **(6,753** | **)**  |   | **42,531** |   |   | **(1,884** | **)**  |   | **6,860**  |   |   | **55,472** |   |   | **4,921** |   |   | **60,393** |   |

|   |   |   |  |  |   |  |  |   |  |  |   |  |  |   |  |  |   |  |  |   |  |  |   |  |  |   |  |  |   |  |  |   |  |  |   |  |  |   |  |  |   |  |  |
|--------|--------|--------|--|--|--------|--|--|--------|--|--|--------|--|--|--------|--|--|--------|--|--|--------|--|--|--------|--|--|--------|--|--|--------|--|--|--------|--|--|--------|--|--|--------|--|--|--------|--|--|

F-7

----

##### Table of Contents

**CONSOLIDATED****STATEMENTSOF CHANGES IN SHAREHOLDERS’ EQUITY***continued***(euro million)**

|   | **Eni shareholders’ equity** |   |
|--------|-----------------------------------|--------|
|   |                                   |   |

| Note   |   | Share capital |   | Legal reserve of Eni SpA |   | Reserve for treasury shares |   | Reserve related to the fair value of cash flow        hedging derivatives net of tax effect |   | Reserve related to the fair value of        available-for-sale financial instruments net of tax        effect |   | Other reserves |   | Cumulative currency translation        differences |   | Treasury shares |   | Retained earnings |   | Interim dividend |   | Net profit for the year |   | Total |   | Non-controlling interest |   | Total shareholders’ equity |
|--------|--------|---------------|--------|--------------------------|--------|-----------------------------|--------|---------------------------------------------------------------------------------------------|--------|---------------------------------------------------------------------------------------------------------------|--------|----------------|--------|----------------------------------------------------|--------|-----------------|--------|-------------------|--------|------------------|--------|-------------------------|--------|-------|--------|--------------------------|--------|---------------------------------|
|   |   |               |   |                          |   |                             |   |                                                                                             |   |                                                                                                               |   |                |   |                                                    |   |                 |   |                   |   |                  |   |                         |   |       |   |                          |   |                                 |

| **Balance at December 31, 2011**                                                                                                           | (32)   |   | **4,005** |   |   | **959** |   |   | **6,753** |   |   | **49**  |   |   | **(8**  | **)**  |   | **1,421**  |   |   | **1,539** |   |   | **(6,753** | **)**  |   | **42,531** |   |   | **(1,884** | **)**  |   | **6,860**  |   |   | **55,472** |   |   | **4,921**  |   |   | **60,393** |   |
|--------------------------------------------------------------------------------------------------------------------------------------------|--------|--------|-----------|--------|--------|---------|--------|--------|-----------|--------|--------|---------|--------|--------|---------|--------|--------|------------|--------|--------|-----------|--------|--------|------------|--------|--------|------------|--------|--------|------------|--------|--------|------------|--------|--------|------------|--------|--------|------------|--------|--------|------------|--------|
| **Net        profit of the year**                                                                                                          |   |   |      |   |   |    |   |   |      |   |   |    |   |   |    |   |   |       |   |   |      |   |   |       |   |   |       |   |   |       |   |   | **7,788**  |   |   | **7,788**  |   |   | **885**    |   |   | **8,673**  |   |
| **Other items of comprehensive income**                                                                                                    |   |   |      |   |   |    |   |   |      |   |   |    |   |   |    |   |   |       |   |   |      |   |   |       |   |   |       |   |   |       |   |   |       |   |   |       |   |   |       |   |   |       |   |
| Foreign        currency translation differences                                                                                            | (32)   |   |      |   |   |    |   |   |      |   |   |    |   |   |    |   |   |       |   |   | (596      | )      |   |       |   |   | (104       | )      |   |       |   |   |       |   |   | (700       | )      |   | (17        | )      |   | (717       | )      |
| Change in the fair value of investments                                                                                                    | (32)   |   |      |   |   |    |   |   |      |   |   |    |   |   | 138     |   |   |       |   |   |      |   |   |       |   |   |       |   |   |       |   |   |       |   |   | 138        |   |   |       |   |   | 138        |   |
| Change in        the fair value of other available-for-sale financial        instruments net of tax effect                                 | (32)   |   |      |   |   |    |   |   |      |   |   |    |   |   | 14      |   |   |       |   |   |      |   |   |       |   |   |       |   |   |       |   |   |       |   |   | 14         |   |   |       |   |   | 14         |   |
| Change in the fair value of cash flow hedging        derivatives net of tax effect                                                         | (32)   |   |      |   |   |    |   |   |      |   |   | (65     | )      |   |    |   |   |       |   |   |      |   |   |       |   |   |       |   |   |       |   |   |       |   |   | (65        | )      |   |       |   |   | (65        | )      |
| Share of        "Other comprehensive income" on        equity-accounted entities                                                 | (32)   |   |      |   |   |    |   |   |      |   |   |    |   |   |    |   |   | 8          |   |   |      |   |   |       |   |   |       |   |   |       |   |   |       |   |   | 8          |   |   | (1         | )      |   | 7          |   |
|                                                                                                                                       |   |   |      |   |   |    |   |   |      |   |   | **(65** | **)**  |   | **152** |   |   | **8**      |   |   | **(596**  | **)**  |   |       |   |   | **(104**   | **)**  |   |       |   |   |       |   |   | **(605**   | **)**  |   | **(18**    | **)**  |   | **(623**   | **)**  |
| **Total        comprehensive income of the year**                                                                                          |   |   |      |   |   |    |   |   |      |   |   | **(65** | **)**  |   | **152** |   |   | **8**      |   |   | **(596**  | **)**  |   |       |   |   | **(104**   | **)**  |   |       |   |   | **7,788**  |   |   | **7,183**  |   |   | **867**    |   |   | **8,050**  |   |
| **Transactions with shareholders**                                                                                                         |   |   |      |   |   |    |   |   |      |   |   |    |   |   |    |   |   |       |   |   |      |   |   |       |   |   |       |   |   |       |   |   |       |   |   |       |   |   |       |   |   |       |   |
| Dividend        distribution of Eni SpA (euro 0.52 per share         in settlement of 2011 interim dividend of euro 0.52 per        share) | (32)   |   |      |   |   |    |   |   |      |   |   |    |   |   |    |   |   |       |   |   |      |   |   |       |   |   |       |   |   | 1,884      |   |   | (3,768     | )      |   | (1,884     | )      |   |       |   |   | (1,884     | )      |
| Interim dividend distribution of Eni SpA (euro        0.54 per share)                                                                      | (32)   |   |      |   |   |    |   |   |      |   |   |    |   |   |    |   |   |       |   |   |      |   |   |       |   |   |       |   |   | (1,956     | )      |   |       |   |   | (1,956     | )      |   |       |   |   | (1,956     | )      |
| Dividend        distribution         of other companies                                                                                    |   |   |      |   |   |    |   |   |      |   |   |    |   |   |    |   |   |       |   |   |      |   |   |       |   |   |       |   |   |       |   |   |       |   |   |       |   |   | (686       | )      |   | (686       | )      |
| Allocation of 2011 net profit                                                                                                              |   |   |      |   |   |    |   |   |      |   |   |    |   |   |    |   |   |       |   |   |      |   |   |       |   |   | 3,092      |   |   |       |   |   | (3,092     | )      |   |       |   |   |       |   |   |       |   |
| Effect        related to the sale         of Snam SpA                                                                                      |   |   |      |   |   |    |   |   |      |   |   |    |   |   |    |   |   |       |   |   |      |   |   |       |   |   | 371        |   |   |       |   |   |       |   |   | 371        |   |   | (1,602     | )      |   | (1,231     | )      |
| Acquisition of non-controlling interest relating        to Altergaz SA and Tigáz Zrt                                                  | (32)   |   |      |   |   |    |   |   |      |   |   |    |   |   |    |   |   | (4         | )      |   |      |   |   |       |   |   |       |   |   |       |   |   |       |   |   | (4         | )      |   | (3         | )      |   | (7         | )      |
| Treasury        shares sold following the exercise of stock options        exercised by Eni managers                                       | (32)   |   |      |   |   |    |   |   | (1        | )      |   |    |   |   |    |   |   |       |   |   |      |   |   | 1          |   |   | 1          |   |   |       |   |   |       |   |   | 1          |   |   |       |   |   | 1          |   |
| Treasury shares sold following the exercise of        stock options         by Saipem managers                                             | (32)   |   |      |   |   |    |   |   |      |   |   |    |   |   |    |   |   | 7          |   |   |      |   |   |       |   |   |       |   |   |       |   |   |       |   |   | 7          |   |   | 22         |   |   | 29         |   |
|                                                                                                                                       |   |   |      |   |   |    |   |   | **(1**    | **)**  |   |    |   |   |    |   |   | **3**      |   |   |      |   |   | **1**      |   |   | **3,464**  |   |   | **(72**    | **)**  |   | **(6,860** | **)**  |   | **(3,465** | **)**  |   | **(2,269** | **)**  |   | **(5,734** | **)**  |
| **Other changes         in shareholders’ equity**                                                                                     |   |   |      |   |   |    |   |   |      |   |   |    |   |   |    |   |   |       |   |   |      |   |   |       |   |   |       |   |   |       |   |   |       |   |   |       |   |   |       |   |   |       |   |
| Elimination        of treasury shares                                                                                                      |   |   |      |   |   |    |   |   | (6,551    | )      |   |    |   |   |    |   |   |       |   |   |      |   |   | 6,551      |   |   |       |   |   |       |   |   |       |   |   |       |   |   |       |   |   |       |   |
| Reconstitution of the reserve         for treasury share                                                                                   |   |   |      |   |   |    |   |   | 6,000     |   |   |    |   |   |    |   |   |       |   |   |      |   |   |       |   |   | (6,000     | )      |   |       |   |   |       |   |   |       |   |   |       |   |   |       |   |
| Stock        options expired                                                                                                               |   |   |      |   |   |    |   |   |      |   |   |    |   |   |    |   |   |       |   |   |      |   |   |       |   |   | (7         | )      |   |       |   |   |       |   |   | (7         | )      |   |       |   |   | (7         | )      |
| Other changes                                                                                                                              |   |   |      |   |   |    |   |   |      |   |   |    |   |   |    |   |   | (1,140     | )      |   |      |   |   |       |   |   | 1,156      |   |   |       |   |   |       |   |   | 16         |   |   | (5         | )      |   | 11         |   |
|                                                                                                                                       |   |   |      |   |   |    |   |   | **(551**  | **)**  |   |    |   |   |    |   |   | **(1,140** | **)**  |   |      |   |   | **6,551**  |   |   | **(4,851** | **)**  |   |       |   |   |       |   |   | **9**      |   |   | **(5**     | **)**  |   | **4**      |   |
| **Balance at December 31, 2012**                                                                                                           | (32)   |   | **4,005** |   |   | **959** |   |   | **6,201** |   |   | **(16** | **)**  |   | **144** |   |   | **292**    |   |   | **943**   |   |   | **(201**   | **)**  |   | **41,040** |   |   | **(1,956** | **)**  |   | **7,788**  |   |   | **59,199** |   |   | **3,514**  |   |   | **62,713** |   |
|                                                                                                                                       |   |   |           |        |   |         |        |   |           |        |   |         |        |   |         |        |   |            |        |   |           |        |   |            |        |   |            |        |   |            |        |   |            |        |   |            |        |   |            |        |   |            |        |

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**CONSOLIDATED STATEMENTOF CASH FLOWS******(euro million)**

|   |   |    ** ****Note**** ** |   | **2010** |   | **2011** |   | **2012** |
|--------|--------|------------------------------------------------|--------|----------|--------|----------|--------|----------|
|   |   |                                                |   |          |   |          |   |          |

| Net profit of the year - Continuing operations                                                     |   |   |   | 7,264  |   |   | 7,877  |   |   | 4,941  |   |
|----------------------------------------------------------------------------------------------------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|
| **Adjustments        to reconcile net profit to net cash provided by operating        activities** |   |   |   |   |   |   |   |   |   |   |   |
| Depreciation and amortization                                                                      |   | (36)   |   | 8,343  |   |   | 7,755  |   |   | 9,538  |   |
| Impairments        of tangible and intangible assets, net                                          |   | (36)   |   | 688    |   |   | 1,030  |   |   | 4,023  |   |
| Share of (profit) loss of equity-accounted        investments                                      |   | (38)   |   | (493   | )      |   | (500   | )      |   | (278   | )      |
| Gain on        disposal of assets, net                                                             |   |   |   | (558   | )      |   | (1,176 | )      |   | (875   | )      |
| Dividend income                                                                                    |   | (38)   |   | (264   | )      |   | (659   | )      |   | (431   | )      |
| Interest        income                                                                             |   |   |   | (95    | )      |   | (99    | )      |   | (108   | )      |
| Interest expense                                                                                   |   |   |   | 607    |   |   | 773    |   |   | 803    |   |
| Income        taxes                                                                                |   | (39)   |   | 8,581  |   |   | 9,903  |   |   | 11,659 |   |
| Other changes                                                                                      |   |   |   | (39    | )      |   | 331    |   |   | (1,945 | )      |
| Changes in        working capital:                                                                 |   |   |   |   |   |   |   |   |   |   |   |

| *- inventories*                         |   |   |   | *(1,141* | *)*    |   | *(1,400* | *)*    |   | *(1,395* | *)*    |
|-----------------------------------------|--------|--------|--------|----------|--------|--------|----------|--------|--------|----------|--------|
| *- trade        receivables*            |   |   |   | *(1,923* | *)*    |   | *218*    |   |   | *(3,184* | *)*    |
| *- trade payables*                      |   |   |   | *2,811*  |   |   | *34*     |   |   | *2,029*  |   |
| *-        provisions for contingencies* |   |   |   | *575*    |   |   | *109*    |   |   | *338*    |   |
| *- other assets and liabilities*        |   |   |   | *(1,480* | *)*    |   | *(657*   | *)*    |   | *(1,161* | *)*    |

| Cash flow        from changes in working capital                                                                      |   |   |   | (1,158       | )       |   | (1,696      | )       |   | (3,373       | )       |
|-----------------------------------------------------------------------------------------------------------------------|--------|--------|--------|--------------|---------|--------|-------------|---------|--------|--------------|---------|
| Net change in the provisions for employee        benefits                                                             |   |   |   | 22           |    |   | (10         | )       |   | 16           |    |
| Dividends        received                                                                                             |   |   |   | 766          |    |   | 955         |    |   | 988          |    |
| Interest received                                                                                                     |   |   |   | 124          |    |   | 99          |    |   | 91           |    |
| Interest        paid                                                                                                  |   |   |   | (630         | )       |   | (927        | )       |   | (825         | )       |
| Income taxes paid, net of tax receivables        received                                                             |   |   |   | (9,018       | )       |   | (9,893      | )       |   | (11,868      | )       |
| **Net        cash provided by operating activities - Continuing        operations**                                   |   |   |   | **14,140**   |    |   | **13,763**  |    |   | **12,356**   |    |
| **Net cash provided by operating activities -        Discontinued operations**                                        |   | (31)   |   | **554**      |    |   | **619**     |    |   | **15**       |    |
| **Net        cash provided by operating activities**                                                                  |   |   |   | **14,694**   |    |   | **14,382**  |    |   | **12,371**   |    |
| ***- of which with related parties*****                                                                               |   | (42)   |   | ***(2,229*** | ***)*** |   | ***(639***  | ***)*** |   | ***(1,542*** | ***)*** |
| Investing        activities:                                                                                          |   |   |   |         |    |   |        |    |   |         |    |
| *- tangible assets*                                                                                                   |   | (14)   |   | *(12,308*    | *)*     |   | *(11,658*   | *)*     |   | *(11,222*    | *)*     |
| *-        intangible assets*                                                                                          |   | (16)   |   | *(1,562*     | *)*     |   | *(1,780*    | *)*     |   | *(2,295*     | *)*     |
| *- consolidated subsidiaries and businesses*                                                                          |   | (33)   |   | *(143*       | *)*     |   | *(115*      | *)*     |   | *(178*       | *)*     |
| *-        investments*                                                                                                |   | (17)   |   | *(267*       | *)*     |   | *(245*      | *)*     |   | *(391*       | *)*     |
| *- securities*                                                                                                        |   |   |   | *(50*        | *)*     |   | *(62*       | *)*     |   | *(17*        | *)*     |
| *-        financing receivables*                                                                                      |   |   |   | *(866*       | *)*     |   | *(715*      | *)*     |   | *(1,634*     | *)*     |
| *- change in payables and receivables in        relation to investing activities and capitalized        depreciation* |   |   |   | *261*        |    |   | *379*       |    |   | *54*         |    |
| Cash flow        from investing activities                                                                            |   |   |   | (14,935      | )       |   | (14,196     | )       |   | (15,683      | )       |
| Disposals:                                                                                                            |   |   |   |         |    |   |        |    |   |         |    |
| *-        tangible assets*                                                                                            |   |   |   | *272*        |    |   | *154*       |    |   | *1,229*      |    |
| *- intangible assets*                                                                                                 |   |   |   | *57*         |    |   | *41*        |    |   | *61*         |    |
| *-        consolidated subsidiaries and businesses*                                                                   |   | (33)   |   | *215*        |    |   | *1,006*     |    |   | *3,521*      |    |
| *- investments*                                                                                                       |   |   |   | *569*        |    |   | *711*       |    |   | *1,203*      |    |
| *-        securities*                                                                                                 |   |   |   | *14*         |    |   | *128*       |    |   | *52*         |    |
| *- financing receivables*                                                                                             |   |   |   | *841*        |    |   | *695*       |    |   | *1,578*      |    |
| *-        change in payables and receivables in relation to        disposals*                                         |   |   |   | *2*          |    |   | *243*       |    |   | *(252*       | *)*     |
| Cash flow from disposals                                                                                              |   |   |   | 1,970        |    |   | 2,978       |    |   | 7,392        |    |
| **Net        cash used in investing activities**                                                                      |   |   |   | **(12,965**  | **)**   |   | **(11,218** | **)**   |   | **(8,291**   | **)**   |
| ***- of which with related parties*****                                                                               |   | (42)   |   | ***(1,626*** | ***)*** |   | ***(800***  | ***)*** |   | ***1,535***  |    |
|                                                                                                                  |   |        |   |              |         |   |             |         |   |              |         |

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**CONSOLIDATED STATEMENT OFCASH FLOWS*****continued*****(euro million)**

|   |   |    ** ****Note**** ** |   | **2010** |   | **2011** |   | **2012** |
|--------|--------|------------------------------------------------|--------|----------|--------|----------|--------|----------|
|   |   |                                                |   |          |   |          |   |          |

| Proceeds from long-term debt                                                                                    |   | (26)   |   | 2,953      |    |   | 4,474      |   |   | 10,484    |    |
|-----------------------------------------------------------------------------------------------------------------|--------|--------|--------|------------|---------|--------|------------|--------|--------|-----------|---------|
| Repayments        of long-term debt                                                                             |   | (26)   |   | (3,327     | )       |   | (889       | )      |   | (3,784    | )       |
| Increase (decrease) in short-term debt                                                                          |   | (21)   |   | 2,646      |    |   | (2,481     | )      |   | (753      | )       |
|                                                                                                            |   |   |   | **2,272**  |    |   | **1,104**  |   |   | **5,947** |    |
| Net capital contributions by non-controlling        interest                                                    |   |   |   |       |    |   | 26         |   |   |      |    |
| Sale of        treasury shares                                                                                  |   |   |   |       |    |   | 3          |   |   |      |    |
| Net acquisition of treasury shares different        from Eni SpA                                                |   |   |   | 37         |    |   | 17         |   |   | 29        |    |
| Acquisition        of additional interests in consolidated subsidiaries                                         |   |   |   |       |    |   | (126       | )      |   | 604       |    |
| Dividends paid to Eni’s shareholders                                                                       |   |   |   | (3,622     | )       |   | (3,695     | )      |   | (3,840    | )       |
| Dividends        paid to non-controlling interest                                                               |   |   |   | (514       | )       |   | (552       | )      |   | (539      | )       |
| **Net cash used in financing activities**                                                                       |   |   |   | **(1,827** | **)**   |   | **(3,223** | **)**  |   | **2,201** |    |
| ***- of        which with related parties***                                                                    |   | (42)   |   | ***(23***  | ***)*** |   | ***348***  |   |   | ***(94*** | ***)*** |
| Effect of change in consolidation        (inclusion/exclusion of significant/insignificant        subsidiaries) |   |   |   |       |    |   | (7         | )      |   | (4        | )       |
| Effect of        exchange rate changes on cash and cash equivalents and        other changes                    |   |   |   | 39         |    |   | 17         |   |   | (12       | )       |
| **Net cash flow of the year**                                                                                   |   |   |   | **(59**    | **)**   |   | **(49**    | **)**  |   | **6,265** |    |
| **Cash        and cash equivalents - beginning of the year**                                                    |   | (7)    |   | **1,608**  |    |   | **1,549**  |   |   | **1,500** |    |
| **Cash and cash equivalents - end of the year**                                                                 |   | (7)    |   | **1,549**  |    |   | **1,500**  |   |   | **7,765** |    |
|                                                                                                            |   |        |   |            |         |   |            |        |   |           |         |

 

 

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##### Table of Contents

**Notes to the Consolidated FinancialStatements**

**1 Basis of presentation**

The Consolidated Financial Statements of Eni Group have beenprepared in accordance with International Financial ReportingStandards (IFRS) as issued by the International AccountingStandards Board (IAS B). Oil and natural gas exploration andproduction activity is accounted for in conformity withinternationally accepted accounting principles. Specifically,this concerns the determination of the amortization expensesusing the unit-of-production method and the recognition of theproduction-sharing agreement and buy-back contracts. TheConsolidated Financial Statements have been prepared on ahistorical cost basis, taking into account where appropriate ofany value adjustments, except for certain items that under IFRSmust be recognized at fair value as described in the summary ofsignificant accounting policies paragraph.

The Consolidated Financial Statements include the statutoryaccounts of Eni SpA and the accounts of subsidiaries where theCompany holds the right to directly or indirectly exercisecontrol, determine financial and operating policies and obtaineconomic benefits from their activities. For entities acting assole-operator in the management of oil and gas contracts onbehalf of companies participating in a joint venture, theactivities are financed proportionately based on a budgetapproved by the participating companies upon presentation ofperiodical reports of proceeds and expenses. Costs and revenuesand other operating data (production, reserves, etc.) of theproject, as well as the related obligations arising from theproject, are recognized proportionally directly in the financialstatements of the companies involved. The exclusion fromconsolidation of some subsidiaries, which are not material eitherindividually or overall, has not produced significant1economic and financial effects on the Consolidated FinancialStatements. These interests are accounted for as described belowunder the item "Financial fixed assets".

Subsidiaries’ financial statements are audited by theindependent auditors who examine and certify also the informationrequired for the preparation of the Consolidated FinancialStatements. The 2012 Consolidated Financial Statements approvedby Eni’s Board of Directors on March 14, 2013, were auditedby the independent auditor Reconta Ernst & Young SpA. Theindependent auditor of Eni SpA, as the main auditor, is wholly incharge of the auditing activities of the Consolidated FinancialStatements; when there are other independent auditors, it takesthe responsibility of their work. Amounts in the financialstatements and in the notes are expressed in millions of euros(euro million).

 

**2 Principles of consolidation**

**Interests in consolidated companies**Assets and liabilities, revenues and expenses relatedto fully consolidated subsidiaries are wholly incorporated in theConsolidated Financial Statements; the book value of thesesubsidiaries is eliminated against the corresponding share of theshareholders’ equity by attributing to each of the balancesheet items its fair value.

Business combination transactions are recognized by applyingthe acquisition method. The consideration transferred in abusiness combination is measured at the acquisition date and isthe sum of the fair value of the assets transferred, theliabilities assumed or incurred, as well as any equityinstruments issued by the acquirer. Acquisition-related costs arerecognized in profit and loss account when they are incurred.

When acquired, the equity of subsidiaries is initiallyrecognized at fair value. The excess of the purchase price of anacquired entity over the total fair value assigned to assetsacquired and liabilities assumed is recognized as goodwill;negative goodwill is recognized in the profit and loss account.

Equity and net profit of non-controlling interests areincluded in specific lines of equity and profit and loss account.If the partial control is acquired, this share of equity isdetermined using the proportionate share of the fair value ofassets and liabilities, excluding any related goodwill, at thetime when control is acquired (partial goodwill method); as analternative, it is allowed the recognition of the entire amountof goodwill deriving from the acquisition, taking into accounttherefore also the portion attributable to the non-controllinginterests (full goodwill method); in the latter case, thenon-controlling interests are measured at their total fair valuewhich therefore 

----

| (1) |    | According to        the requirements of the Framework of international        accounting standards, information is material if its        omission or misstatement could influence the economic        decisions that users make on the basis of the financial        statements. |
|-----|--------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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##### Table of Contents

includes the goodwill attributable to them2. Themethod of measuring goodwill (partial goodwill method or fullgoodwill method) is selective for each business combination.

In a business combination achieved in stages, the purchaseprice is determined by summing the fair value of previously heldequity interest in the acquiree and the consideration transferredfor the acquisition of control; the previously held equityinterest is remeasured at its acquisition date fair value and theresulting gain or loss is recognized in profit and loss account;furthermore, on acquisition of control, any component of theacquiree previously recognized in other comprehensive income ischarged to the profit and loss account.

The purchase of additional equity interests in subsidiariesfrom non-controlling interests is recognized in the Groupshareholders’ equity and represents the excess of the amountpaid over the carrying value of the non-controlling interestsacquired; similarly, the effects of the sale of non-controllinginterests in subsidiaries without loss of control are recognizedin equity. Conversely, the sale of equity interests with loss ofcontrol determines the recognition in the profit and lossaccount: (i) of any gain/loss calculated as the differencebetween the consideration received and the correspondingtransferred share of equity; (ii) of the amount of any gain orloss recognized as a result of remeasuring to fair value anyinvestment retained in the former subsidiary; and (iii) of anycomponent related to the former subsidiary previously recognizedin other comprehensive income. The retained investment isremeasured to its fair value at the date when control is lost andshall be accounted for in accordance with the applicablemeasurement criteria3.

**Intercompany transactions**Intercompany transactions and balances, includingunrealized profits arising from intragroup transactions have beeneliminated. Unrealized profits with companies accounted for usingthe equity method are eliminated for the share of the Groupshareholders’ equity. In both cases, unrealized losses arenot eliminated as evidence of an impairment of the assettransferred.

**Foreign currency translation**Financial statements of foreign companies having afunctional currency other than the euro, that represents theGroup’s functional currency, are translated into euro usingthe rates of exchange ruling at the balance sheet date for assetsand liabilities, historical exchange rates for equity accountsand average rates for the profit and loss account (source: Bankof Italy). Cumulative exchange rate differences resulting fromthis translation are recognized in shareholders’ equityunder "Other reserves" in proportion to theGroup’s interest and under "Non-controllinginterest" for the portion related to non-controllinginterests. Cumulative exchange rate differences are charged tothe profit and loss account when the entity disposes the entireinterest in a foreign operation or at the loss of control of aforeign subsidiary. On the partial disposal, without losingcontrol, the proportionate share of cumulative amount of exchangedifferences related to the disposed interest is recognized inequity to non-controlling interests. Financial statements offoreign subsidiaries which are translated into euro aredenominated in the functional currencies of the Countries wherethe entities operate. The U.S. dollar is the prevalent functionalcurrency for the entities that do not use the euro.

The main foreign exchange rates used to translate thefinancial statements adopting a different functional currency areindicated below:

| (currency        amount for euro 1) | **Annual average        exchange rate 2010** |   | **Exchange rate at         Dec. 31, 2010** |   | **Annual average        exchange rate 2011** |   | **Exchange rate at         Dec. 31, 2011** |   | **Annual average        exchange rate 2012** |   | **Exchange rate at         Dec. 31, 2012** |
|-------------------------------------|----------------------------------------------|--------|--------------------------------------------|--------|----------------------------------------------|--------|--------------------------------------------|--------|----------------------------------------------|--------|--------------------------------------------|
|                                |                                              |   |                                            |   |                                              |   |                                            |   |                                              |   |                                            |

| U.S. dollar              |   | 1.33   |   | 1.34   |   | 1.39   |   | 1.29   |   | 1.28   |   | 1.32   |
|--------------------------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|
| Pound        sterling    |   | 0.86   |   | 0.86   |   | 0.87   |   | 0.84   |   | 0.81   |   | 0.82   |
| Norwegian Krone          |   | 8.00   |   | 7.80   |   | 7.79   |   | 7.75   |   | 7.48   |   | 7.35   |
| Australian        dollar |   | 1.44   |   | 1.31   |   | 1.35   |   | 1.27   |   | 1.24   |   | 1.27   |
| Hungarian forint         |   | 275.48 |   | 277.95 |   | 279.37 |   | 314.58 |   | 289.25 |   | 292.30 |
|                     |   |        |   |        |   |        |   |        |   |        |   |        |

 

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| (2) |    | The choice        between partial goodwill and full goodwill method is        available also for business combinations resulting in the        recognition of a "negative goodwill" in profit        or loss account (gain on bargain purchase). |
|-----|--------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| (3) |    | Same criteria        are applicable to sales implying the loss of joint        control or significant influence over an investee.                                                                                                                          |

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##### Table of Contents

**3 Summary of significant accounting policies**

The most significant accounting policies used in thepreparation of the Consolidated Financial Statements aredescribed below.

**Current assets**Cash and cash equivalents include cash on hand, demanddeposits, as well as financial assets originally due within 90days, readily convertible to known amount of cash and subject toan insignificant risk of changes in value.

Held for trading financial assets and available-for-salefinancial assets are measured at fair value with gains or lossesrecognized in the profit and loss account under "Financialincome (expense)" and to the equity reserve related to othercomprehensive income, respectively. Changes in fair value ofavailable-for-sale financial assets recognized in equity arecharged to the profit and loss account when the assets arederecognized or impaired. The objective evidence that animpairment loss has occurred is verified considering, interalia,significant breaches of contracts, serious financial difficultiesor the risk of insolvency of the counterparty; asset write downsare included in the carrying amount. Available-for-sale financialassets include financial assets other than derivative financialinstruments, loans and receivables, held for trading financialassets and held-to-maturity financial assets. The fair value offinancial instruments is determined by market quotations or,where there is no active market, it is estimated adoptingsuitable financial valuation models which take into account allthe factors adopted by market operators and prices obtained insimilar recent transactions in the market.

Interests and dividends on available-for-sale financial assetsare accounted for on an accrual basis in "Financial income(expense)" and "Other gain (loss) frominvestments", respectively. When the purchase or sale of afinancial asset is under a contract whose terms require deliveryof the asset within the time frame generally established byregulation or convention in the market place concerned, thetransaction is accounted for on the settlement date. Receivablesare measured at amortized cost (see item "Financial fixedassets" below). Transferred financial assets arederecognized when the contractual rights to receive the cashflows of the financial assets are transferred together with therisks and rewards of the ownership. Inventories, includingcompulsory stocks and excluding construction contracts, arestated at the lower of purchase or production cost and netrealizable value. Net realizable value is the net amount expectedto be realized from the sale of inventories in the normal courseof business, or, with reference to inventories of crude oil andpetroleum products already included in binding sale contracts,the contractual sale price. Inventories of natural gas which areprincipally acquired with the purpose of selling in the nearfuture and generating a profit from fluctuations in price aremeasured at fair value less costs to sell.

The cost for inventories of hydrocarbons (crude oil,condensates and natural gas) and petroleum products is determinedby applying the weighted-average cost method on a three-monthbasis, or monthly, when it is justified by the use and theturnover of inventories of crude oil and petroleum products; thecost for inventories of the Chemical segment is determined byapplying the weighted-average cost on an annual basis.

Construction contracts are measured using the cost-to-costmethod, whereby contract revenue is recognized by reference tothe stage of completion of the contract matching it with thecontract costs incurred in reaching that stage of completion.Advances are deducted from inventories within the limits ofaccrued contractual considerations; any excess of such advancesover the value of the inventories is recorded as a liability.Losses related to construction contracts are recognizedimmediately as an expense when it is probable that total contractcosts will exceed total contract revenues. Construction contractnot yet invoiced, whose payment will be made in a foreigncurrency, is translated into euro using the rates of exchangeruling at the balance sheet date and the effect of rate changesis reflected in the profit and loss account. When take-or-payclauses are included in long-term natural gas purchase contracts,uncollected gas volumes which imply the "pay" clause,measured using the price formulas contractually defined, arerecognized under "Other assets" as "Deferredcosts" as an offset to "Other payables" or, afterthe settlement, to "Cash and cash equivalents". Theallocated deferred costs are charged to the profit and lossaccount: (i) when natural gas is actually delivered – therelated cost is included in the determination of theweighted-average cost of inventories; and (ii) for the portionwhich is not recoverable, when it is not possible to collect gasthat was previously uncollected within the contractually defineddeadlines. Furthermore, the allocated deferred costs are testedfor economic recoverability by comparing the related carryingamount and their net realizable value, determined adopting thesame criteria described for inventories. Hedging instruments aredescribed in the section "Derivative instruments".

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**Non-current assets**

**Property, plant and equipment**4Tangible assets, including investment properties, are recognizedusing the cost model and stated at their purchase orself-construction cost including any costs directly attributableto bringing the asset into operation. In addition, when asubstantial period of time is required to make the asset readyfor use, the purchase price or self-construction cost includesthe borrowing costs incurred that could have otherwise been savedhad the investment not been made.

In the case of a present obligation for the dismantling andremoval of assets and the restoration of sites, the carryingvalue includes, with a corresponding entry to a specificprovision, the estimated (discounted) costs to be incurred at themoment the asset is retired.

Changes in estimate of the carrying amounts of provisions dueto the passage of time and changes in discount rates arerecognized under "Provisions for contingencies"5.Property, plant and equipment are not revalued for financialreporting purposes.

Assets carried under financial leasing or concerningarrangements that do not take the legal form of a finance leasebut substantially transfer all the risks and rewards of ownershipof the leased asset are recognized at fair value, net of grantsattributable to the lessee or, if lower, at the present value ofthe minimum lease payments. Leased assets are included withinproperty, plant and equipment. A corresponding financial debtpayable to the lessor is recognized as a financial liability.These assets are depreciated using the criteria described below.When the renewal is not reasonably certain, leased assets aredepreciated over the shorter of the lease term or the estimateduseful life of the asset.

Expenditures on renewals, improvements and transformationswhich provide additional economic benefits are recognized asitems of property, plant and equipment when it is probable thatthey will increase the expected future economic benefits of theasset. Tangible assets, from the moment they begin or shouldbegin to be used, are depreciated systematically using astraight-line method over their useful life which is an estimateof the period over which the assets will be used by the Company.When tangible assets are composed of more than one significantelement with different useful lives, each component isdepreciated separately. The amount to be depreciated is the bookvalue less the estimated net realizable value at the end of theuseful life, if it is significant and can be reasonablydetermined. Land is not depreciated, even when purchased with abuilding. Tangible assets held for sale are not depreciated (seeitem "Assets held for sale and discontinued operations"below). Any change to the depreciation plan, deriving fromchanges in the asset’s useful life, in its residual value orin the pattern of consumption of the economic benefits embodiedin the asset, shall be recognized prospectively.

Assets that can be used free of charge by third parties aredepreciated over the shorter term of the duration of theconcession or the asset’s useful life. Replacement costs ofidentifiable components in complex assets are capitalized anddepreciated over their useful life; the residual book value ofthe component that has been substituted is charged to the profitand loss account. Expenditures for ordinary maintenance andrepairs are expensed as incurred. The carrying value of property,plant and equipment is reviewed for impairment whenever eventsindicate that the carrying amounts for those assets may not berecoverable. The recoverability of an asset is assessed bycomparing its carrying value with the recoverable amount, whichis the higher of fair value less costs to sell or its value inuse. If there is no binding sales agreement, fair value isestimated on the basis of market values, recent transactions, orthe best available information that shows the proceeds that theCompany could reasonably expect to collect from the disposal ofthe asset. Value in use is the present value of the future cashflows expected to be derived from the use of the asset and, ifsignificant and reasonably determinable, the cash flows derivingfrom its disposal at the end of its useful life, net of disposalcosts. Expected cash flows are determined on the basis ofreasonable and documented assumptions that represent the bestestimate of the future economic conditions during the remaininguseful life of the asset, giving more importance to independentassumptions. Oil, natural gas and petroleum products prices (andto prices for products which derive there from) used to quantifythe expected future cash flows are estimated based on forwardprices prevailing in the marketplace for the first four years andmanagement’s long-term planning assumptions thereafter.Discounting is carried out at a rate that reflects a currentmarket valuation of the time value of money and of those specificrisks of the asset that are not reflected in the estimate of thefuture cash flows. In particular, the discount rate used is theWeighted Average Cost of Capital (WACC) adjusted for the specificCountry risk of the activity. The evaluation of the specificCountry risk to be included in the discount rate is provided byexternal parties. The WACC differs considering the riskassociated with 

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| (4) |    | Recognition        and evaluation criteria of exploration and production        activities are described in the section "Exploration        and production activities" below. |
|-----|--------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (5) |    | The Company        recognizes material provisions for the retirement of        assets in the Exploration & Production segment. No        significant asset retirement obligations associated with        any legal obligations to retire refining, marketing and        transportation (downstream) and chemical long-lived        assets are generally recognized, as undetermined        settlement dates for asset retirements do not allow a        reasonable estimate of the fair value of the associated        retirement obligation. The Company performs periodic        reviews of its downstream and chemical long-lived assets        for any changes in facts and circumstances that might        require recognition of a retirement obligation. |
|-----|--------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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individual operating segments; in particular for the assetsbelonging to the Gas & Power and Engineering& Construction segments, taking into account theirdifferent risk compared with Eni, specific WACC rates have beendefined (for Gas & Power segment on the basis of a sample ofcompanies operating in the same segment; for Engineering &Construction segment on the basis of the market quotation); WACCused for impairments in the Gas & Power segment is adjustedto take into consideration the risk premium of the specificCountry of the activity while WACC used for impairments in theEngineering & Construction segment is not adjusted forCountry risk as most of the assets are not located in a specificCountry. For the other segments, a single WACC is usedconsidering that the risk is the same to that of Eni as a whole.Value in use is calculated net of the tax effect as this methodresults in values similar to those resulting from discountingpre-tax cash flows at a pre-tax discount rate deriving, throughan iteration process, from a post-tax valuation. Valuation iscarried out for each single asset or, if the recoverable amountof a single asset cannot be determined, for the smallestidentifiable group of assets that generates independent cashinflows from their continuous use, the so-called "cashgenerating unit". When the reasons for their impairmentcease to exist, Eni makes a reversal that is recognized in theprofit or loss account as income from asset revaluation. Thisreversed amount cannot exceed the carrying amount that would havebeen determined, net of depreciation, had no impairment loss beenrecognized for the asset in prior years.

**Intangible assets**Intangible assets are identifiable assets withoutphysical substance, controlled by the Company and able to producefuture economic benefits, and goodwill acquired in businesscombinations. An asset is classified as intangible whenmanagement is able to distinguish it clearly from goodwill. Thiscondition is normally met when: (i) the intangible assetarises from contractual or legal rights, or (ii) the asset isseparable, i.e. can be sold, transferred, licensed, rented orexchanged, either individually or as an integral part of otherassets. An entity controls an asset if it has the power to obtainthe future economic benefits flowing from the underlying assetand to restrict the access of others to those benefits.Intangible assets are initially stated at cost as determined bythe criteria used for tangible assets and they are not revaluedfor financial reporting purposes. Intangible assets with adefinite useful life are amortized systematically over theiruseful life estimated as the period over which the assets will beused by the Company; the amount to be amortized and therecoverability of the carrying amount are determined inaccordance with the criteria described in the section"Property, plant and equipment".

Goodwill and other intangible assets with an indefinite usefullife are not amortized. The recoverability of their carryingvalue is reviewed at least annually and whenever events orchanges in circumstances indicate that the carrying value may notbe recoverable. Goodwill is tested for impairment at the lowestlevel within the entity at which it is monitored for internalmanagement purposes. When the carrying amount of the cashgenerating unit, including goodwill allocated thereto, calculatedconsidering any impairment loss of the non-current assetsbelonging to the cash generating unit, exceeds its recoverableamount6, the excess is recognized as an impairmentloss. The impairment loss is first allocated to reduce thecarrying amount of goodwill; any remaining excess to be allocatedto the assets of the unit is applied pro-rata on the basis of thecarrying amount of each asset in the unit. Impairment chargesagainst goodwill are not reversed7. Costs oftechnological development activities are capitalized when:(i) the cost attributable to the development activity can bereliably determined; (ii) there is the intention, availability offinancial and technical resources to make the asset available foruse or sale; and (iii) it can be demonstrated that the asset isable to generate future economic benefits.

Intangible assets also include public to private serviceconcession arrangements concerning the development, financing,operation and maintenance of infrastructures under concession, inwhich the grantor: (i) controls or regulates what services theoperator must provide with the infrastructure, and at what price;and (ii) controls – by the ownership, beneficial entitlementor otherwise – any significant residual interest in theinfrastructure at the end of the concession arrangement.According to the agreements, the operator has the right tooperate the infrastructure, controlled by the grantor, in orderto provide the public service8.

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| (6) |    | For the        definition of recoverable amount see item "Property,        plant and equipment". |
|-----|--------------|------------------------------------------------------------------------------------------------------------|

| (7) |    | Impairment        charges recognized in an interim period are not reversed        also when, considering conditions existing in a        subsequent interim period, they would have been        recognized in a smaller amount or would not have been        recognized.                                                 |
|-----|--------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| (8) |    | When the        operator has an unconditional contractual right to        receive cash or another financial asset from or at the        direction of the grantor, considerations received or        receivable by the operator for construction or upgrade of        infrastructure are recognized as a financial asset. |

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**Exploration and production activities**910 

*Acquisition of mineral rights*Costs associated with the acquisition of mineral rights arecapitalized in connection with the assets acquired (such asexploratory potential, probable and possible reserves and provedreserves). When the acquisition is related to a set ofexploratory potential and reserves, the cost is allocated to thedifferent assets acquired on the basis of the value of therelevant discounted cash flows. Expenditure for the exploratorypotential, represented by the costs for the acquisition of theexploration permits and for the extension of existing permits, isrecognized under "Intangible assets" and is amortizedon a straight-line basis over the period of the exploration ascontractually established. If the exploration is abandoned, theresidual expenditure is charged to the profit and loss account.Acquisition costs for proved reserves and for possible andprobable reserves are recognized in the balance sheet as assets.Costs associated with proved reserves are amortized on a UOPbasis, as detailed in the section "Development",considering both developed and undeveloped reserves. Expendituresassociated with possible and probable reserves are not amortizeduntil classified as proved reserves; in case of a negativeresult, the costs are charged to the profit and loss account.

*Exploration*Costs associated with exploratory activities for oil and gasproducing properties incurred both before and after theacquisition of mineral rights (such as acquisition of seismicdata from third parties, test wells and geophysical surveys) areinitially capitalized in order to reflect their nature as aninvestment and subsequently amortized in full when incurred.

*Development*Development expenditures are those costs incurred to obtainaccess to proved reserves and to provide facilities forextracting, gathering and storing oil and gas. They are thencapitalized within property, plant and equipment and amortizedgenerally on a UOP basis, as their useful life is closely relatedto the availability of feasible reserves. This method providesfor residual costs at the end of each quarter to be amortized ata rate representing the ratio between the volumes extractedduring the quarter and the proved developed reserves existing atthe end of the quarter, increased by the volumes extracted duringthe quarter. This method is applied with reference to thesmallest aggregate representing a direct correlation betweendevelopment expenditures and proved developed reserves. Costsrelated to unsuccessful development wells or damaged wells areexpensed immediately as losses on disposal. Impairments andreversal of impairments of development costs are made on the samebasis as those for tangible assets.

*Production*Production costs are those costs incurred to operate andmaintain wells and field equipment and are expensed as incurred.

*Production-sharing agreements and buy-back contracts*Oil and gas reserves related to production-sharing agreementsand buy-back contracts are determined on the basis of contractualclauses related to the repayment of costs incurred for theexploration, development and production activities executedthrough the use of Company’s technologies and financing(Cost Oil) and the Company’s share of production volumes notdestined to cost recovery (Profit Oil). Revenues from the sale ofthe production entitlements against both Cost Oil and Profit Oilare accounted for on an accrual basis whilst exploration,development and production costs are accounted for according tothe policies mentioned above. The Company’s share ofproduction volumes and reserves representing the Profit Oilincludes the share of hydrocarbons which corresponds to the taxesto be paid, according to the contractual agreement, by thenational government on the behalf of the Company. As aconsequence, the Company has to recognize at the same time anincrease in the taxable profit, through the increase of therevenues, and a tax expense.

*Retirement*Costs expected to be incurred with respect to the retirementof a well, including costs associated with removal of productionfacilities, dismantlement and site restoration, are capitalized,consistently with the policy described under "Property,plant and equipment", and then amortized on a UOP basis.

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| (9)  |    | IFRS does not        have specific criteria for hydrocarbon exploration and        production activities. Eni continues to use existing        accounting policies for exploration and evaluation of        assets previously applied before the introduction of IFRS        6 "Exploration for and evaluation of mineral        resources".                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |
|------|--------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| (10) |    | With        reference to the preparation of the 2012 Consolidated        Financial Statements, prospectively starting from July 1,        2012, Eni has updated the conversion rate of natural gas        to 5,492 cubic feet of gas equals 1 barrel of oil (it was        5,550 cubic feet of gas per barrel in previous reporting        periods). This update reflected changes in Eni’s gas        properties that took place in the last three years and        was assessed by collecting data on the heating power of        gas in all Eni’s gas fields currently on stream. The        effect of this update on production expressed in BOE was        9 kBOE/d for the full year 2012. Other per-BOE indicators        were only marginally affected by the update (e.g.        realization prices, costs per BOE) and also negligible        was the impact on depletion charges. Other oil companies        may use different conversion rates. |

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**Grants****Grants related to assets are recognized as a reduction ofpurchase price or production cost of the related assets whenthere is reasonable assurance that all the required conditionsattached to them, agreed upon with government entities, have beenmet. Grants not related to capital expenditure are recognized inthe profit and loss account on an accrual basis matching therelated costs when incurred.

**Financial fixed assets**

*Investments*Investments in subsidiaries excluded from consolidation,jointly controlled entities and associates are accounted forusing the equity method11. Under the equity method,investments are initially recognized at cost and subsequentlyadjusted to reflect: (i) the investor’s share of thepost-acquisition profit or loss of the investee; and(ii) the investor’s share of the investee’s othercomprehensive income. The changes in the equity of investeesaccounted for using the equity method, not arising from theprofit or loss or from the other comprehensive income, arerecognized in the investor’s profit and loss account, asthey represent, basically, a gain or loss from a disposal of aninterest of the investee’s equity. Distributions receivedfrom an investee are recorded as a reduction of the carryingamount of the investment. In applying the equity method,consolidations adjustments are considered (see also"Principles of consolidation" paragraph). When there isobjective evidence of impairment (see also section "Currentassets"), the recoverability is tested by comparing thecarrying amount and the related recoverable amount determined byadopting the criteria indicated in the section "Property,plant and equipment". Subsidiaries excluded fromconsolidation, jointly controlled entities and associates areaccounted for at cost, adjusted for impairment losses if thisdoes not result in a misrepresentation of the Company’sfinancial condition. When the reasons for their impairment ceaseto exist, investments are revalued within the limit of theimpairment made and their effects are included in "Othergain (loss) from investments". Other investments, includedin non-current assets, are recognized at their fair value andtheir effects are included in the equity reserve related to othercomprehensive income; the changes in fair value recognized inequity are charged to the profit and loss account when it isimpaired or realized. Galp and Snam shares related to convertiblebonds are measured at fair value through profit and loss account,under the fair value option, in order to significantly reduce theaccounting mismatch with the recognition of the option embeddedin the convertible bond, measured at fair value through profitand loss account.

When investments are not traded in a public market and theirfair value cannot be reasonably determined, they are accountedfor at cost, adjusted for impairment losses; impairment lossesshall not be reversed12.

The investor’s share of losses of an investee, thatexceeds its interest in the investee, is recognized in a specificprovision only to the extent the investor is required to fulfilllegal or constructive obligations of the investee or to cover itslosses.

*Receivables and financial assets to be held to maturity*Receivables and financial assets to be held to maturity arestated at cost represented by the fair value of the initialexchanged amount adjusted to take into account direct externalcosts related to the transaction (e.g. fees of agents orconsultants, etc.).

The initial carrying value is then adjusted to take intoaccount principal repayments, reductions for impairment oruncollectibility and amortization of any difference between thematurity amount and the initial amount. Amortization is carriedout on the basis of the effective interest rate of returnrepresented by the rate that equalizes, at the moment of theinitial recognition, the present value of expected cash flows tothe initial carrying amount (so called "amortized costmethod"). Receivables for finance leases are recognized atan amount equal to the present value of the lease payments andthe purchase option price or any residual value; the amount isdiscounted at the interest rate implicit in the lease. If thereis objective evidence that an impairment loss has been incurred(see also point "Current assets"), the impairment lossis measured by comparing the carrying value with the presentvalue of the expected cash flows discounted at the effectiveinterest rate as defined at initial recognition, or at the momentof its updating to reflect re-pricings contractually established.Receivables and financial assets to be held to maturity arerecognized net of the allowance for impairment losses; when theimpairment loss is definite the allowance for impairment lossesis reversed for charges, otherwise for excess. Changes to thecarrying amount of receivables or financial assets in accordancewith the amortized cost method are recognized as "Financialincome (expense)".

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| (11) |    | In the case        of step acquisition of a significant influence (or joint        control), the investment is recognized, at the        acquisition date of significant influence (joint        control), at the amount deriving from the use of the        equity method assuming the adoption of this method since        initial acquisition; the "step-up" of the        carrying amount of interests owned before the acquisition        of significant influence (joint control) is taken to        equity. |
|------|--------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (12) |    | Impairment        charges recognized in an interim period are not reversed        also when, considering conditions existing in a        subsequent interim period, they would have been        recognized in a smaller amount or would not have been        recognized. |
|------|--------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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**Assets held for sale and discontinuedoperations**Non-current assets and current and non-current assetsincluded within disposal groups, are classified as held for saleif their carrying amount will be recovered principally through asale transaction rather than through their continuing use. Forthis to be the case, the sale must be highly probable and theasset or the disposal group must be available for immediate salein its present condition.

Non-current assets held for sale, current and non-currentassets included within disposal groups that have been classifiedas held for sale and the liabilities directly associated withthem are recognized in the balance sheet separately from theentity’s other assets and liabilities. Non-current assetsheld for sale are not depreciated and they are measured at thelower of the fair value less costs to sell and their carryingamount. The classification as held for sale of equity-accountedinvestments determines the interruption of equity methodaccounting; therefore, in this case, the book value of theinvestment in accordance with the equity method represents thecarrying amount for the measurement as non-current assetsheld-for sale.

Any difference between the carrying amount and the fair valueless costs to sell is taken to the profit or loss account as animpairment loss; any subsequent reversal is recognized up to thecumulative impairment losses, including those recognized prior toqualification of the asset as held for sale.

Non-current assets and current and non-current assets includedwithin disposal groups, classified as held for sale, areconsidered a discontinued operation if, alternatively: (i)represent a separate major line of business or geographical areaof operations; (ii) are part of a disposal program of a separatemajor line of business or geographical area of operations; or(iii) are a subsidiary acquired exclusively with a view toresale. The results of discontinued operations, as well as anygain or loss recognized on the disposal, are indicated in aseparate profit and loss account item, net of the related taxeffects.

When there is a sale plan involving loss of control of asubsidiary, all the assets and liabilities of that subsidiary areclassified as held for sale, regardless of whether anon-controlling interest in its former subsidiary will be retainafter the sale.

**Financial liabilities**Debt is measured at amortized cost (see item"Financial fixed assets" above). Financial liabilitiesare derecognized when they are extinguished, or when theobligation specified in the contract is discharged or cancelledor expires.

**Provisions fo****r contingencies**Provisions for contingencies are liabilities for expenses andcharges of a definite nature and whose existence is certain orprobable but for which at year end the timing or amount of futureexpenditure is uncertain. Provisions are recognized when: (i)there is a present obligation, legal or constructive, as a resultof a past event; (ii) it is probable that the settlement of thatobligation will result in an outflow of resources embodyingeconomic benefits; and (iii) the amount of the obligationcan be reliably estimated. The amount recognized as a provisionis the best estimate of the expenditure required to settle thepresent obligation at the balance sheet date or to transfer it tothird parties at that time. The amount recognized for onerouscontracts is the lower of the cost necessary to fulfill theobligations, net of expected economic benefits deriving from thecontracts, and any indemnity or penalty arising from failure tofulfill these obligations. If the effect of the time value ismaterial, and the payment date of the obligations can bereasonably estimated, provisions to be accrued are the presentvalue of the expenditures expected to be required to settle theobligation at a discount rate that reflects the Company’saverage borrowing rate taking into account the risks associatedwith the obligation. The increase in the provision due to thepassage of time is recognized as "Financial income(expense)". When the liability regards a tangible asset(e.g. site dismantling and restoration), the provision is statedwith a corresponding entry to the asset to which it refers.Charges to the profit and loss account are made with theamortization process. Costs that the Company expects to bear inorder to carry out restructuring plans are recognized when theCompany has a detailed formal plan for the restructuring and hasraised a valid expectation in the affected parties that it willcarry out the restructuring. Provisions are periodically reviewedand adjusted to reflect changes in the estimates of costs, timingand discount rates. Changes in provisions are recognized in thesame profit and loss account item that had previously held theprovision, or, when the liability regards tangible assets (i.e.site dismantling and restoration), changes in the provision arerecognized with a corresponding entry to the assets to which theyrefer, to the extent of the assets’ carrying amounts; anyexcess amount is recognized to the profit and loss account.

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In note 27, the following contingent liabilities aredescribed: (i) possible, but not probable obligations arisingfrom past events, whose existence will be confirmed only by theoccurrence or non-occurrence of one or more uncertain futureevents not wholly within the Company’s control; and (ii)present obligations arising from past events whose amount cannotbe reliably measured or whose settlement will probably not resultin an outflow of resources embodying economic benefits.

**Provisions for employee benefits**Post-employment benefit plans, including informalarrangements, are classified as either defined contribution plansor defined benefit plans depending on the economic substance ofthe plan as derived from its principal terms and conditions. Inthe first case, the Company’s obligation, which consists ofmaking payments to the State or a trust or a fund, is determinedon the basis of contributions due. The liabilities related todefined benefit plans, net of any plan assets, are determined onthe basis of actuarial assumptions and charged on an accrualbasis during the employment period required to obtain thebenefits. The actuarial gains and losses of defined benefit plansare recognized pro-rata on service, in the profit and lossaccount using the corridor method, if and to the extent that netcumulative unrecognized actuarial gains and losses at the end ofthe previous reporting period exceed the greater of 10% of thepresent value of the defined benefit obligation or 10% of thefair value of the plan assets, over the expected averageremaining working lives of the employees participating in theplan. Such actuarial gains and losses derive from changes in theactuarial assumptions used or from a change in the conditions ofthe plan. Obligations for long-term benefits are determined byadopting actuarial assumptions. The effect of changes inactuarial assumptions or a change in the characteristics of thebenefit is taken to the profit or loss in its entirety.

**Treasury shares**Treasury shares are recognized as deductions fromequity at cost. Gains or losses resulting from subsequent salesare recognized in equity.

| **Revenues and costs**                                                                                                                                                                                                                                                                                                                                      |
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| Revenues associated with sales of        products and services are recognized when significant        risks and rewards of ownership have passed to the        customer or when the transaction can be considered        settled and the associated revenue can be reliably        measured. In particular, revenues are recognized for the        sale of: |

| • |   | crude oil, generally upon        shipment;                                                                                                                                                                                      |
|--------|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| • |   | natural gas, upon delivery        to the customer;                                                                                                                                                                              |
| • |   | petroleum products sold to        retail distribution networks, generally upon delivery to        the service stations, whereas all other sales of        petroleum products are generally recognized upon        shipment; and |
| • |   | chemical products and other        products, generally upon shipment.                                                                                                                                                           |

Revenues are recognized upon shipment when, at that date,significant risks are transferred to the buyer. Revenues fromcrude oil and natural gas production from properties in which Enihas an interest together with other producers are recognized onthe basis of Eni’s net working interest in those properties(entitlement method). Differences between Eni’s net workinginterest volume and actual production volumes are recognized atcurrent prices at year end. Income related to partially renderedservices is recognized in the measurement of accrued income ifthe stage of completion can be reliably determined and there isno significant uncertainty as to the collectability of the amountand the related costs. When the outcome of the transaction cannotbe estimated reliably, revenue is recognized only to the extentof the expenses recognized that are recoverable. Revenues accruedduring the year related to construction contracts are recognizedon the basis of contractual revenues with reference to the stageof completion of a contract measured on the cost-to-cost basis.For service concession arrangements (see item "Intangibleassets" above) in which customers fees do not provide areliable distinction between the compensation forconstruction/update of the infrastructure and the compensationfor operating it and in the absence of external benchmarks,revenues recognized during the construction/update phase arelimited to the amount of the costs incurred. Additional revenues,derived from a change in the scope of work, are included in thetotal amount of revenues when it is probable that the customerwill approve the variation and the related amount. Claimsderiving from additional costs incurred for reasons attributableto the customer are included in the total amount of revenues whenit is probable that the counterparty will accept them. Tangibleassets, different from an infrastructure used in serviceconcession arrangements, transferred from customers (orconstructed using cash transferred from customers) and used toconnect them to a network to supply goods and services, arerecognized at their fair value as an offset to revenues. Whenmore than one separately identifiable service is provided (forexample, connection to a network and supply of goods) the entityshall assess for which one service it receives the transferredasset from the customer and it shall consistently recognize arevenue when the connection is delivered or over the lesserperiod between the 

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length of the supply and the useful life of the transferredasset. Revenues are measured at the fair value of theconsideration received or receivable net of returns, discounts,rebates, bonuses and direct taxation. Award credits, related tocustomer loyalty programs, are recognized as a separate componentof the sales transaction which grant the right to customers.Therefore, the portion of revenues related to the fair value ofaward credits granted is recognized as an offset to the item"Other liabilities". The liability is charged to theprofit and loss account in the period in which the award creditsare redeemed by customers or the related right is lost. Theexchange of goods and services of a similar nature and value donot give rise to revenues and costs as they do not represent saletransactions. Costs are recorded when the related goods andservices are sold or consumed during the year or systematicallyallocated or when their future economic benefits cannot beidentified. Costs associated with emission quotas, determined onthe basis of the market prices, are recognized in relation to theamount of the carbon dioxide emissions that exceed the amountassigned. Costs related to the purchase of the emission rightsare recorded as intangible assets net of any negative differencebetween the amount of emissions and the quotas assigned. Revenuesrelated to emission quotas are recognized when they are realizedthrough a sale transaction. In case of sale, if applicable, theacquired emission rights are considered as the first to be sold.Monetary receivables granted as a substitution of emission rightsawarded free of charge are recognized as an offset to item"Other income" of the profit and loss account.Operating lease payments are recognized in the profit and lossaccount over the length of the contract. Labor costs includestock options granted to managers, consistent with their actualremunerative nature. The instruments granted are recorded at fairvalue on the vesting date and are not subject to subsequentadjustments; the current portion is calculated pro-rata over thevesting period13. The fair value of stock options isdetermined using valuation techniques which consider conditionsrelated to the exercise of options, current share prices,expected volatility and the risk-free interest rate. The fairvalue of stock options is recorded as a charge to "Otherreserves". The costs for the acquisition of new knowledge ordiscoveries, the study of products or alternative processes, newtechniques or models, the planning and construction of prototypesor, in any case, costs incurred for other scientific researchactivities or technological development, which cannot becapitalized (see item "Intangible assets" above), areincluded in the profit and loss account.

**Exchange rate differences**Revenues and costs associated with transactions incurrencies other than the functional currency are translated intothe functional currency by applying the exchange rate at the dateof the transaction. Monetary assets and liabilities denominatedin currencies other than functional currency are converted byapplying the year end exchange rate and the effect is stated inthe profit and loss account. Non-monetary assets and liabilitiesdenominated in currencies other than the functional currencyvalued at cost are translated at the initial exchange rate.Non-monetary items that are measured at fair value, recoverableamount or net realizable value are translated using the exchangerate at the date when the value is determined.

**Dividends**Dividends are recognized at the date of the generalshareholders’ meeting in which they were declared, exceptwhen the sale of shares before the ex-dividend date is certain.

**Inco****me taxes**Current income taxes are determined on the basis of estimatedtaxable income. The estimated liability is included in"Income taxes payable". Current income tax assets andliabilities are measured at the amount expected to be paid to(recovered from) the tax authorities, using tax rates and the taxlaws that have been enacted or substantively enacted by the endof the reporting period. Deferred tax assets or liabilities arerecognized for temporary differences arising between the carryingamounts of the assets and liabilities and their tax bases, basedon tax rates and tax laws that have been enacted or substantivelyenacted for future years. Deferred tax assets are recognized whentheir recoverability is considered probable; in particular,deferred tax assets are recoverable when it is probable thattaxable income will be available in the same year as the reversalof the deductible temporary difference. Similarly, deferred taxassets for the carryforward of unused tax credits and unused taxlosses are recognized to the extent that the recoverability isprobable. Relating to the temporary differences associated withinvestments in subsidiaries, jointly controlled entities andassociates, the related deferred tax liabilities are notrecognized if the investor is able to control the timing ofreversal of the temporary differences and it is probable that thetemporary difference will not reverse in the foreseeable future.Deferred tax assets and liabilities are included in non-currentassets and liabilities and are offset at a single entity level ifrelated to offsettable taxes. The balance of the offset, ifpositive, is recognized in the item "Deferred taxassets"; if negative, in the item "Deferred tax 

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| (13) |    | The period        between the date of the award and the date at which the        option can be exercised. |
|------|--------------|-----------------------------------------------------------------------------------------------------------|

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liabilities". When the results of transactions arerecognized directly in shareholders’ equity, the relatedcurrent and deferred taxes are also charged to theshareholders’ equity.

**Derivatives**Derivatives, including embedded derivatives which areseparated from the host contract, are assets and liabilitiesmeasured at their fair value which is estimated by using thecriteria described in the item "Current assets". Whenthere is objective evidence that an impairment loss has occurredfor reasons different from fair value decreases (see item"Current assets"), derivative are recognized net of theallowance for impairment losses.

Derivatives are designated as hedging instruments when therelationship between the derivative and the hedged item isformally documented and the hedge is highly effective andregularly reviewed. When hedging instruments hedge the risk ofchanges of the fair value of the hedged item (fair value hedge,e.g. hedging of the variability on the fair value of fixedinterest rate assets/liabilities), the derivatives are measuredat fair value through profit and loss account. Hedged items areconsistently adjusted to reflect, in the profit and loss account,the changes of fair value associated with the hedged risk; thisapplies even if the hedged item should be otherwise measured.

When derivatives hedge the cash flow variability risk of thehedged item (cash flow hedge, e.g. hedging the variability on thecash flows of assets/liabilities as a result of the fluctuationsof exchange rate), the changes in the fair value of thederivatives, considered an effective hedge, are initiallyrecognized in the equity reserve related to other comprehensiveincome and then reclassifies to profit and loss account in thesame period during which the hedged transaction affects theprofit and loss account.

The changes in the fair value of derivatives that do not meetthe conditions required to qualify for hedge accounting arerecognized in the profit and loss account. In particular, thechanges in the fair value of non-hedging derivatives on interestrates and exchange rates are recognized in the profit and lossaccount item "Financial income (expense)"; conversely,the changes in the fair value of non-hedging derivatives oncommodities are recognized in the profit and loss account item"Other operating (expense) income". Economic effects oftransactions to buy or sell commodities entered into to meet theentity’s normal operating requirements and for which thesettlement is provided with the delivery of the underlying, arerecognized on an accrual basis (the so-called normal sale andnormal purchase exemption or own use exemption).

 

**4 Financial statements**14

Assets and liabilities on the balance sheet are classified ascurrent and non-current. Items on the profit and loss account arepresented by nature15. The statement of comprehensiveincome shows net profit integrated with income and expenses thatare recognized directly in equity according to IFRS. Thestatement of changes in shareholders’ equity includes profitand loss for the year, transactions with shareholders and otherchanges in shareholders’ equity. The statement of cash flowsis presented using the indirect method, whereby net profit isadjusted for the effects of non-cash transactions.

 

**5 Use of accounting estimates**

The preparation of the Consolidated Financial Statementsrequires the use of estimates and assumptions that affect theassets, liabilities, revenues and expenses reported in thefinancial statements, as well as amounts included in the notesthereto, including discussion and disclosure of contingentliabilities. Estimates made are based on complex or subjectivejudgments and past experience of other assumptions deemedreasonable in consideration of the information available at thetime. The accounting policies and areas that require the mostsignificant judgments and estimates to be used in the preparationof the Consolidated Financial Statements are in relation to theaccounting 

----

| (14) |    | The financial        statements are the same reported in the Annual Report        2011, except for the presentation of Snam Group as        discontinued operations due to the sale of 30% less one        share of the outstanding shares of Snam SpA to Gruppo        Cassa Depositi e Prestiti. After the disposal, Eni exits        the regulated businesses in Italy. The effects of the        presentation as discontinued operations are indicated in        note 31 – "Discontinued operations, assets held        for sale and liabilities directly associated with assets        held for sale". |
|------|--------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| (15) |    | Further        information on financial instruments as classified in        accordance with IFRS is provided in note 34 –        "Guarantees, commitments and risks - Other        information about financial instruments".                                                                                                                                                                                                                                                                                                                                                                                |

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for oil and natural gas activities, specifically in thedetermination of proved and proved developed reserves, impairmentof fixed assets, intangible assets and goodwill, asset retirementobligations, business combinations, pensions and otherpost-retirement benefits, recognition of environmentalliabilities and recognition of revenues in the oilfield servicesconstruction and engineering businesses. Although the Companyuses its best estimates and judgments, actual results coulddiffer from the estimates and assumptions used. A summary ofsignificant estimates follows.

**Oil and gas activities**Engineering estimates of the Company’s oil andgas reserves are inherently uncertain. Proved reserves are theestimated volumes of crude oil, natural gas and gas condensates,liquids and associated substances which geological andengineering data demonstrate that can be economically produciblewith reasonable certainty from known reservoirs under existingeconomic conditions and operating methods. Although there areauthoritative guidelines regarding the engineering and geologicalcriteria that must be met before estimated oil and gas reservescan be designated as "proved", the accuracy of anyreserve estimate is a function of the quality of available data,engineering and geological interpretation and judgment. Fieldreserves will only be categorized as proved when all the criteriafor attribution of proved status have been met. At this stage,all booked reserves are classified as proved undeveloped. Volumesare subsequently reclassified from proved undeveloped to proveddeveloped as a consequence of development activity. The firstproved developed bookings occur at the point of first oil or gasproduction. Major development projects typically take one to fouryears from the time of initial booking to the start ofproduction. Eni reassesses its estimate of proved reservesperiodically. The estimated proved reserves of oil and naturalgas may be subject to future revision and upward and downwardrevision may be made to the initial booking of reserves due toproduction, reservoir performance, commercial factors,acquisition and divestment activity and additional reservoirdevelopment activity. In particular, changes in oil and naturalgas prices could impact the amount of Eni’s proved reservesin regards to the initial estimate and, in the case ofproduction-sharing agreements and buy-back contracts, the shareof production and reserves to which Eni is entitled. Accordingly,the estimated reserves could be materially different from thequantities of oil and natural as that ultimately will berecovered. Oil and natural gas reserves have a direct impact oncertain amounts reported in the Consolidated FinancialStatements. Estimated proved reserves are used in determiningdepreciation and depletion expenses and impairment expense.Depreciation rates on oil and gas assets using the UOP basis aredetermined from the ratio between the amount of hydrocarbonsextracted in the quarter and proved developed reserves existingat the end of the quarter increased by the amounts extractedduring the quarter. Assuming all other variables are heldconstant, an increase in estimated proved developed reserves foreach field decreases depreciation, depletion and amortizationexpense. Conversely, a decrease in estimated proved developedreserves increases depreciation, depletion and amortizationexpense. In addition, estimated proved reserves are used tocalculate future cash flows from oil and gas properties, whichserve as an indicator in determining whether or not propertyimpairment is to be carried out. The larger the volume ofestimated reserves, the lower the likelihood of asset impairment.

**Impairment of assets**Assets are impaired when there are events or changes incircumstances that indicate the carrying values of the assets arenot recoverable. Such impairment indicators include changes inthe Group’s business plans, changes in commodity pricesleading to unprofitable performance, a reduced utilization of theplants and, for oil and gas properties, significant downwardrevisions of estimated proved reserve quantities or significantincrease of the estimated development costs. Determination as towhether and how much an asset is impaired involves managementestimates on highly uncertain and complex matters such as futurecommodity prices, the effects of inflation and technologyimprovements on operating expenses, production profiles and theoutlook for global or regional market supply and demandconditions for crude oil, natural gas, commodity chemicals andrefined products. Similar remarks are valid for the physicalrecoverability of assets recognized in the balance sheet(deferred costs – see also item "Current assets")related to natural gas volumes not collected under long-termpurchase contracts with take-or-pay clauses as well as for therecoverability of deferred tax assets. The amount of animpairment loss is determined by comparing the book value of anasset with its recoverable amount. The recoverable amount is thegreater of fair value net of disposal cost or the value in use.The estimated value in use is based on the present values ofexpected future cash flows net of disposal costs. The expectedfuture cash flows used for impairment analyses are based onjudgmental assessments of future production volumes, prices andcosts, considering available information at the date of reviewand are discounted by using a rate related to the activityinvolved. For oil and natural gas properties, the expected futurecash flows are estimated principally based on developed andnon-developed proved reserves including, among other elements,production taxes and the costs to be incurred for the reservesyet to be developed. Oil, natural gas and petroleum productprices (and prices from products which are derived there from)used to quantify the expected future cash flows are estimatedbased on forward prices prevailing in the marketplace for thefirst four years and management’s long-term planningassumptions thereafter. The estimate of the future 

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amount of production is based on assumptions related to thecommodity future prices, lifting and development costs, fielddecline rates, market demand and other factors. The discount ratereflects the current market valuation of the time value of moneyand of the specific risks of the asset not reflected in theestimate of the future cash flows. Goodwill and other intangibleassets with an indefinite useful life are not subject toamortization. The Company tests for impairment such assets at thecash-generating unit level on an annual basis and whenever thereis an indication that they may be impaired. In particular,goodwill impairment is based on the lowest level (cash generatingunit) to which goodwill can be allocated on a reasonable andconsistent basis. A cash generating unit is the smallestaggregate on which the Company, directly or indirectly, evaluatesthe return on the capital expenditure. If the recoverable amountof a cash generating unit is lower than the carrying amount,goodwill attributed to that cash generating unit is impaired upto that difference; if the carrying amount of goodwill is lessthan the amount of impairment, assets of the cash generating unitare impaired pro-rata on the basis of their carrying amount forthe residual difference.

**Asset retirement obligations**Obligations to remove tangible equipment and restoreland or seabed require significant estimates in calculating theamount of the obligation and determining the amount required tobe recorded presently in the Consolidated Financial Statements.Estimating future asset retirement obligations is complex. Itrequires management to make estimates and judgments with respectto removal obligations that will come to term many years into thefuture and contracts and regulations are often unclear as to whatconstitutes removal. In addition, the ultimate financial impactof environmental laws and regulations is not always clearly knownas asset removal technologies and costs constantly evolve in theCountries where Eni operates, as do political, environmental,safety and public expectations. The subjectivity of theseestimates is also increased by the accounting method used thatrequires entities to record the fair value of a liability for anasset retirement obligation in the period when it is incurred(typically, at the time the asset is installed at the productionlocation). When liabilities are initially recorded, the relatedfixed assets are increased by an equal corresponding amount. Theliabilities are updated with the passage of time (i.e. interestaccretion) and any change in the estimates following themodification of future cash flows and discount rate adopted. Therecognized asset retirement obligations are based on futureretirement cost estimates and incorporate many assumptions suchas: expected recoverable quantities of crude oil and natural gas,abandonment time, future inflation rates and the risk-free rateof interest adjusted for the Company’s credit costs.

**Business combinations**Accounting for business combinations requires theallocation of the purchase price to the various assets andliabilities of the acquired business at their respective fairvalues. Any positive residual difference is recognized as"Goodwill". Negative residual differences are creditedto the profit and loss account. Management uses all availableinformation to make these fair value determinations and, formajor business combinations, typically engages independentexternal advisors to assist in the fair value determination ofthe acquired assets and liabilities.

**Environmental liabilities**Together with other companies in the industries inwhich it operates, Eni is subject to numerous EU, national,regional and local environmental laws and regulations concerningits oil and gas operations, production and other activities. Theyinclude legislations that implement international conventions orprotocols. Environmental costs are recognized when it becomesprobable that a liability has been incurred and the amount can bereasonably estimated. Management, considering the actions alreadytaken, insurance policies obtained to cover environmental risksand provision for risks accrued, does not expect any materialadverse effect on Eni’s consolidated results of operationsand financial position as a result of such laws and regulations.However, there can be no assurance that there will not be amaterial adverse impact on Eni’s consolidated results ofoperations and financial position due to: (i) the possibility ofan unknown contamination; (ii) the results of the ongoing surveysand other possible effects of statements required by applicablelaws; (iii) the possible effects of future environmentallegislations and rules; (iv) the effects of possibletechnological changes relating to future remediation; and (v) thepossibility of litigation and the difficulty of determiningEni’s liability, if any, against other potentiallyresponsible parties with respect to such litigations and thepossible insurance recoveries.

**Provision****s for employeebenefits**Defined benefit plans are evaluated with reference touncertain events and based upon actuarial assumptions includingamong others discount rates, expected rates of return on planassets, expected rates of salary increases, medical cost trends,estimated retirement dates and mortality rates. The significantassumptions used to account for 

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defined benefit plans are determined as follows: (i) discountand inflation rates reflect the rates at which benefits could beeffectively settled, taking into account the duration of theobligation. Indicators used in selecting the discount rateinclude market yields on high quality corporate bonds. Theinflation rates reflect market conditions observed country bycountry; (ii) the future salary levels of the individualemployees are determined including an estimate of future changesattributed to general price levels (consistent with inflationrate assumptions), productivity, seniority and promotion; (iii)healthcare cost trend assumptions reflect an estimate of theactual future changes in the cost of the healthcare relatedbenefits provided to the plan participants and are based on pastand current healthcare cost trends including healthcareinflation, changes in healthcare utilization and changes inhealth status of the participants; (iv) demographic assumptionssuch as mortality, disability and turnover reflect the bestestimate of these future events for individual employeesinvolved; and (v) determination of the expected rates of returnon assets is made through compound averaging. For each plan, thedistribution of investments among bonds, equity and cash andtheir specific average expected rate of return is taken intoaccount. Differences between expected and actual costs andbetween the expected return and the actual return on plan assetsroutinely occur and are called actuarial gains and losses. Eniapplies the corridor method to amortize its actuarial losses andgains. This method amortizes on a pro-rata basis the netcumulative unrecognized actuarial gains and losses at the end ofthe previous reporting period that exceed the greater of 10% of:(i) the present value of the defined benefit obligation; and (ii)the fair value of plan assets, over the average expectedremaining working lives of the employees participating in theplan. Additionally, obligations for other long-term benefits aredetermined by adopting actuarial assumptions. The effects ofchanges in actuarial assumptions or a change in thecharacteristics of the benefit are taken to the profit or loss intheir entirety.

**Contingencies**In addition to accruing the estimated costs forenvironmental liabilities, asset retirement obligation andemployee benefits, Eni accrues for all contingencies that areboth probable and estimable. These other contingencies areprimarily related to litigation and tax issues. Determining theappropriate amount to accrue is a complex estimation process thatincludes subjective judgments of the management.

**Revenue recognition in the Engineering &Construction segment**Revenue recognition in the Engineering &Construction segment is based on the stage of completion of acontract as measured on the cost-to-cost basis applied tocontractual revenues. Use of the stage of completion methodrequires estimates of future gross profit on a contract bycontract basis. The future gross profit represents the profitremaining after deducting costs attributable to the contract fromrevenues provided for in the contract. The estimate of futuregross profit is based on a complex estimation process thatincludes identification of risks related to the geographicalregion where the activity is carried out, market conditions inthat region and any assessment that is necessary to estimate withsufficient precision the total future costs as well as theexpected timetable to the end of the contract. Additional income,derived from a change in the scope of work, is included in thetotal amount of revenues when it is probable that the customerwill approve the variation and the related amount. Claimsderiving from additional costs incurred for reasons attributableto the customer are included in the total amount of revenues whenit is probable that the counterparty will accept them.

 

**6 Recent accounting principles**

**Accounting standards and interpretationsissued by the IASB/IFRIC and endorsed by the EU**By Commission Regulation (EU) No. 475/2012 of June 5,2012, the Amendments to IAS 1 "Presentation of FinancialStatements - Presentation of Items of Other ComprehensiveIncome" (hereinafter "Amendments to IAS 1") havebeen endorsed. The Amendments to IAS 1 require, interalia,entities to group items presented in other comprehensive incomeon the basis of whether they are potentially reclassifiable tothe profit and loss account subsequently, according to applicableIFRSs (reclassification adjustments). The Amendments to IAS 1shall be applied for annual periods beginning on or after July 1,2012 (for Eni: 2013 financial statements).

By Commission Regulation (EU) No. 475/2012 of June 5, 2012,the revised IAS 19 "Employee Benefits" (hereinafter"IAS 19") has been endorsed. The document requires,interalia: (i) to recognize actuarial gains and losses in othercomprehensive income, eliminating the possibility to adopt thecorridor approach. Actuarial gains and losses recognized in othercomprehensive income will not be recycled through profit and lossaccount in subsequent periods; and (ii) to replace the separatepresentation of the expected return on plan assets and theinterest cost, with a single "net interest expense orincome". This aggregate is determined by applying thediscount rate used 

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to measure the defined benefit obligation to the net definedbenefit liability. The new provisions require, interalia,additional disclosures with reference to defined benefit plans.IAS 19 shall be applied for annual periods beginning on or afterJanuary 1, 201316.

By Commission Regulation (EU) No. 1254/2012 of December 11,2012, IFRS 10 "Consolidated Financial Statements"(hereinafter "IFRS 10") and the revised IAS 27"Separate Financial Statements" (hereinafter"revised IAS 27") have been endorsed. The documentsstate, respectively, the provisions for the presentation and thepreparation of consolidated and separate financial statements.IFRS 10 provide, interalia, a new definition of control to beconsistently applied to all entities (included vehicles).According to this definition, an entity controls an investee whenit is exposed, or has rights, to its (positive and negative)returns from its involvement and has the ability to affect thosereturns through its power over the investee. The standardprovides some indicators to be considered in assessing controlwhich include, interalia, potential voting rights, protectiverights, the presence of agency relationships and franchiseagreements. Furthermore, the new provisions acknowledge theexistence of control of an investee even if the investor holdsless than majority of voting rights due to shareholdingdispersion or passive attitude of other shareholders. IFRS 10 andthe revised IAS 27 shall be applied for annual periods beginningon or after January 1, 2014.

By Commission Regulation (EU) No. 1254/2012 of December 11,2012, IFRS 11 "Joint Arrangements" (hereinafter"IFRS 11") and the revised IAS 28 "Investments inAssociates and Joint Ventures" (hereinafter "revisedIAS 28") have been endorsed. Depending on the rights andobligations of the parties arising from arrangements, IFRS 11classifies joint arrangements into two types – jointoperations and joint ventures – and states the requiredaccounting treatment. With reference to joint ventures, the newprovisions require to account for them using the equity method,eliminating proportionate consolidation. A joint operatoraccounts for assets/liabilities and expenses/revenues relating tothe joint operation on the basis of its rights and obligationsdetermined and specified in the contractual arrangements, ratherthan basing on its ownership interest in the joint operation. Therevised IAS 28 defines, interalia, the accounting treatment to beadopted on disposal of an equity interest, or a portion of anequity interest, in a joint venture or an associate. IFRS 11 andthe revised IAS 28 shall be applied for annual periods beginningon or after January 1, 2014.

By Commission Regulation (EU) No. 1254/2012 of December 11,2012, IFRS 12 "Disclosure of Interests in OtherEntities" (hereinafter "IFRS 12") has beenendorsed. The standard combines all the disclosures to beprovided in financial statements regarding subsidiaries, jointarrangements, associates and unconsolidated structured entities.IFRS 12 shall be applied for annual periods beginning on or afterJanuary 1, 2014.

By Commission Regulation (EU) No. 1255/2012 of December 11,2012, IFRS 13 "Fair Value Measurement" (hereinafter"IFRS 13") has been endorsed. The standard defines aframework for fair value measurements, required or permitted byother IFRSs, and the required disclosures about fair valuemeasurements. Fair value is defined as the price that would bereceived to sell an asset (or paid to transfer a liability) in anorderly transaction between market participants at themeasurement date. IFRS 13 shall be applied for annual periodsbeginning on or after January 1, 2013.

By Commission Regulation (EU) No. 1256/2012 of December 13,2012, the Amendments to IAS 32 "Financial Instruments:Presentation – Offsetting Financial Assets and FinancialLiabilities" (hereinafter "the Amendments to IAS32") and the Amendments to IFRS 7 "FinancialInstruments: Disclosures – Offsetting Financial Assets andFinancial Liabilities" (hereinafter "the Amendments toIFRS 7") have been endorsed. The documents state,respectively, the requirements for offsetting financial assetsand financial liabilities and the related disclosures. Inparticular, the Amendments to IAS 32 state that: (i) in order toset off financial assets and liabilities, the right of set-offmust be legally enforceable in all circumstances, such as in thenormal course of business, in the event of default or in theevent of insolvency or bankruptcy, of one or all of thecounterparties; and (ii) in presence of specific characteristics,the gross simultaneous settlement of financial assets andliabilities, that eliminate or result in insignificant credit andliquidity risk, may be considered equivalent to net settlement.The Amendments to IFRS 7 relating to disclosures shall be appliedfor annual periods beginning on or after January 1, 2013.Conversely, the Amendments to IAS 32 shall be applied for annualperiods beginning on or after January 1, 2014.

 

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| (16) |    | Under the        transition requirements of IAS 19, the new provisions        shall be applied retrospectively starting from January 1,        2013, by adjusting the opening balance sheet as of        January 1, 2012 and the 2012 profit and loss account as        if the new provisions of IAS 19 had always been applied.        Currently, Eni estimates that the application of the new        provisions leads a pre-tax and post-tax effect amounting        to, respectively: (i) a decrease of equity as of January        1, 2012 of euro 123 and euro 61 million; and (ii) a        decrease of equity as of December 31, 2012 of euro 269        and euro 155 million, whose euro 149 and euro 96 million,        related to the 2012 actuarial gains and losses recognized        in other comprehensive income. The effect on the 2012        profit and loss account is not material. |
|------|--------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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**Accounti****ng standards andinterpretations issued by the IASB/IFRIC and not yet endorsed bythe EU**On November 12, 2009, the IASB issued IFRS 9 "FinancialInstruments" (hereinafter "IFRS 9") which changesrecognition and measurement criteria of financial assets andtheir classification in the financial statements. In particular,the new provisions require, interalia, a classification andmeasurement model of financial assets based exclusively on thefollowing categories: (i) financial assets measured at amortizedcost; and (ii) financial assets measured at fair value. The newprovisions also require that investments in equity instruments,other than subsidiaries, joint ventures or associates, shall bemeasured at fair value with effects taken to the profit and lossaccount. If these investments are not held for trading purposes,subsequent changes in the fair value can be recognized in othercomprehensive income, even if dividends are taken to the profitand loss account. Amounts taken to other comprehensive incomeshall not be subsequently transferred to the profit or lossaccount even at disposal. In addition, on October 28, 2010, theIASB updated IFRS 9 by incorporating the recognition andmeasurement criteria of financial liabilities. In particular, thenew provisions require, interalia, that if a financial liabilityis measured at fair value through profit or loss, subsequentchanges in the fair value attributable to changes in the owncredit risk shall be presented in other comprehensive income; thecomponent related to own credit risk is recognized in profit andloss account if the treatment of the changes in own credit riskwould create or enlarge an accounting mismatch. On December 16,2011, the IASB issued the document "Mandatory effective dateand transition disclosures" which defer the effective dateof IFRS 9 provisions to annual periods beginning on or afterJanuary 1, 2015 (previously January 1, 2013).

On June 28, 2012, the IASB issued the document"Consolidated Financial Statements, Joint Arrangements andDisclosure of Interests in Other Entities: Transition Guidance(Amendments to IFRS 10, IFRS 11 and IFRS 12)", whichprovides some clarifications and relieves on the transitionrequirements of IFRS 10, IFRS 11 and IFRS 12. The provisionsshall be applied for annual periods beginning on or after January1, 2013.

On May 17, 2012, the IASB issued the document "AnnualImprovements to IFRSs 2009-2011 Cycle", which includes,basically, technical and editorial changes to existing standards.The provisions shall be applied for annual periods beginning onor after January 1, 2013.

Eni is currently reviewing these new IFRS to determine thelikely impact on the Group’s results.

 

 

 

 

 

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**Current assets****7 Cash and cash equivalents**Cash and cash equivalents of euro 7,765 million (euro 1,500million at December 31, 2011) included financing receivablesoriginally due within 90 days amounting to euro 5,861 million(euro 323 million at December 31, 2011). Cash and cashequivalents increased as a consequence of the reimbursement ofintercompany loans mainly made by Snam prior to the divestment.The latter were related to amounts on deposit with financialinstitutions accessible only on a 48-hour notice. Restricted cashamounted to euro 84 million and referred to the Saipem segment asa consequence of judicial investigations and commercialproceedings. More information about the judicial investigationsis disclosed in note 34 – Guarantees, commitments and risks– Algeria – Corruption investigation. The averagematurity of financing receivables due within 90 days was 23 daysand the effective average interest rate amounted to 0.5% (1.1% atDecember 31, 2011).

**8 Other financial assets available forsale**

| (euro million) |   | **Dec. 31, 2011** |   | **Dec. 31, 2012** |
|----------------|--------|-------------------|--------|-------------------|
|           |   |                   |   |                   |

| **Securities held for operating purposes**                |   |    |   |    |
|-----------------------------------------------------------|--------|---------|--------|---------|
| Listed        bonds issued by sovereign states            |   | 173     |   | 174     |
| Listed securities issued by financial        institutions |   | 47      |   | 22      |
| Non-quoted        securities                              |   | 5       |   | 5       |
|                                                      |   | **225** |   | **201** |
| **Securities        held for non-operating purposes**     |   |    |   |    |
| Listed bonds issued by sovereign states                   |   | 16      |   | 13      |
| Listed        securities issued by financial institutions |   | 21      |   | 21      |
|                                                      |   | **37**  |   | **34**  |
|                                                      |   | **262** |   | **235** |
|                                                      |   |         |   |         |

At December 31, 2011 and December 31, 2012, no financialassets were held for trading.

At December 31, 2012, bonds issued by sovereign statesamounted to euro 187 million (euro 189 million at December 31,2011). A break-down by country is presented below:

|   |   | **Nominal value**(euro million) |   | **Fair value**(euro million) |   | **Nominal rate         of return**(%) |   | **Maturity date** |   | **Rating - Moody’s** |   | **Rating - S&P** |
|--------|--------|---------------------------------|--------|------------------------------|--------|---------------------------------------|--------|-------------------|--------|---------------------------|--------|----------------------|
|   |   |                                 |   |                              |   |                                       |   |                   |   |                           |   |                      |

| **Sovereign states**            |   |    |   |    |   |              |   |              |   |   |   |   |
|---------------------------------|--------|---------|--------|---------|--------|-------------------|--------|-------------------|--------|--------|--------|--------|
| ***Fixed        rate bonds***   |   |    |   |    |   |              |   |              |   |   |   |   |
| Belgium                         |   | 28      |   | 31      |   | from 2.35 to 4.38 |   | from 2014 to 2021 |   | Aa3    |   | AA     |
| Italy                           |   | 23      |   | 23      |   | from 2.50 to 5.25 |   | from 2013 to 2034 |   | Baa2   |   | BBB+   |
| Austria                         |   | 17      |   | 17      |   | from 1.57 to 3.15 |   | from 2013 to 2015 |   | Aaa    |   | AA+    |
| Portugal                        |   | 24      |   | 23      |   | from 2.73 to 3.83 |   | from 2013 to 2019 |   | Ba3    |   | BB     |
| Spain                           |   | 14      |   | 14      |   | from 3.00 to 3.83 |   | from 2014 to 2018 |   | Baa3   |   | BBB-   |
| Netherlands                     |   | 12      |   | 13      |   | from 2.46 to 3.02 |   | from 2013 to 2016 |   | Aaa    |   | AAA    |
| Germany                         |   | 10      |   | 10      |   | from 2.67 to 2.78 |   | from 2014 to 2015 |   | Aaa    |   | AAA    |
| France                          |   | 10      |   | 10      |   | from 2.20 to 3.01 |   | from 2013 to 2014 |   | Aa1    |   | AA+    |
| Finland                         |   | 2       |   | 1       |   | 1.60              |   | 2015              |   | Aaa    |   | AAA    |
| Slovakia                        |   | 14      |   | 15      |   | from 0.34 to 4.81 |   | from 2013 to 2017 |   | A2     |   | A      |
| Ireland                         |   | 13      |   | 13      |   | from 4.61 to 4.68 |   | from 2019 to 2020 |   | Ba1    |   | BBB+   |
| United        States of America |   | 15      |   | 12      |   | from 2.54 to 3.54 |   | from 2014 to 2019 |   | Aaa    |   | AA+    |
| ***Floating rate bonds***       |   |    |   |    |   |              |   |              |   |   |   |   |
| Italy                           |   | 5       |   | 5       |   |              |   | 2013              |   | Baa2   |   | BBB+   |
| **Total sovereign states**      |   | **187** |   | **187** |   |              |   |              |   |   |   |   |
|                            |   |         |   |         |   |                   |   |                   |   |        |   |        |

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Securities amounting to euro 48 million wereissued by financial institutions with a rating ranging from Aaato Baa3 (Moody’s) and from AAA to BBB- (S&P).

The effects of fair value evaluation ofsecurities are set out below:

| (euro        million) |   | **Carrying amount at Dec.        31, 2011** |   | **Changes recognized in        equity** |   | **Carrying amount at Dec.        31, 2012** |
|-----------------------|--------|---------------------------------------------|--------|-----------------------------------------|--------|---------------------------------------------|
|                  |   |                                             |   |                                         |   |                                             |

| Fair value                                      |   | (9     | )      |   | 16     |   |   | 7     |   |
|-------------------------------------------------|--------|--------|--------|--------|--------|--------|--------|-------|--------|
| Deferred        tax liabilities                 |   | 1      |   |   | (2     | )      |   | (1    | )      |
| **Other reserves of shareholders’ equity** |   | **(8** | **)**  |   | **14** |   |   | **6** |   |
|                                            |   |        |        |   |        |        |   |       |        |

Securities held for operating purposes of euro 201 million(euro 225 million at December 31, 2011) were designed to hedgethe loss provisions of the Group’s insurance company EniInsurance Ltd for euro 196 million (euro 220 million at December31, 2011).

The break-down by currency of other financial assets held fortrading or available for sale is presented below:

| (euro million) |   | **Dec. 31, 2011** |   | **Dec. 31, 2012** |
|----------------|--------|-------------------|--------|-------------------|
|           |   |                   |   |                   |

| Euro               |   | 193     |   | 179     |
|--------------------|--------|---------|--------|---------|
| U.S.        Dollar |   | 51      |   | 38      |
| Indian Rupee       |   | 18      |   | 18      |
|               |   | **262** |   | **235** |
|               |   |         |   |         |

The fair value of securities was calculated basing on quotedmarket prices.

**9 Trade and other receivables**

| (euro million) |   | **Dec. 31, 2011** |   | **Dec. 31, 2012** |
|----------------|--------|-------------------|--------|-------------------|
|           |   |                   |   |                   |

| **Trade receivables**                                                             |   | **17,709** |   | **19,966** |
|-----------------------------------------------------------------------------------|--------|------------|--------|------------|
| Financing        receivables:                                                     |   |       |   |       |
| - for operating purposes - short-term                                             |   | 468        |   | 440        |
| - for        operating purposes - current portion of long-term        receivables |   | 162        |   | 228        |
| - for non-operating purposes                                                      |   | 28         |   | 1,153      |
|                                                                              |   | **658**    |   | **1,821**  |
| Other receivables:                                                                |   |       |   |       |
| - from        disposals                                                           |   | 169        |   | 209        |
| - other                                                                           |   | 6,059      |   | 6,625      |
|                                                                              |   | **6,228**  |   | **6,834**  |
|                                                                              |   | **24,595** |   | **28,621** |
|                                                                              |   |            |   |            |

Receivables are stated net of the valuationallowance for doubtful accounts of euro 1,636 million (euro 1,651million at December 31, 2011):

| (euro        million) |   | **Carrying amount at Dec. 31, 2011** |   | **Additions** |   | **Deductions** |   | **Other changes** |   | **Carrying amount at Dec. 31, 2012** |
|-----------------------|--------|--------------------------------------|--------|---------------|--------|----------------|--------|-------------------|--------|--------------------------------------|
|                  |   |                                      |   |               |   |                |   |                   |   |                                      |

| Trade receivables            |   | 1,067     |   | 164     |   | (169     | )      |   | (6     | )      |   | 1,056     |
|------------------------------|--------|-----------|--------|---------|--------|----------|--------|--------|--------|--------|--------|-----------|
| Financing        receivables |   | 6         |   |    |   |     |   |   |   |   |   | 6         |
| Other receivables            |   | 578       |   | 7       |   | (11      | )      |   |   |   |   | 574       |
|                         |   | **1,651** |   | **171** |   | **(180** | **)**  |   | **(6** | **)**  |   | **1,636** |
|                         |   |           |   |         |   |          |        |   |        |        |   |           |

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At the balance sheet date, Eni had in place transactions totransfer to factoring institutions certain trade receivableswithout recourse due in 2013 for euro 2,054 million of whichwithout notification for euro 1,709 million (euro 1,779 millionat December 31, 2011 without notification, due in 2012).Transferred receivables mainly related to the Refining &Marketing segment (euro 1,225 million), the Gas & Powersegment (euro 754 million) and the Chemical segment (euro 75million). Following the contractual arrangements with thefinancing institutions relating to receivables withoutnotification, Eni collects the transferred receivables andtransfers the collected amounts to those institutions.Furthermore, Engineering & Construction transferredwithout notification certain trade receivables without recoursedue in 2013 for euro 149 million through Eni’s subsidiarySerfactoring SpA (euro 188 million at December 31, 2011, due in2012).

The increase in trade receivables from the prior year balancesheet date of euro 2,257 million mainly related to increases inthe Gas & Power segment (euro 2,843 million) and theExploration & Production segment (euro 482 million) and adecrease of euro 976 million as a consequence of thedeconsolidation of Snam and its subsidiaries.

Trade and other receivables were as follows:

|   |   | **Dec. 31, 2011** |   | **Dec. 31, 2012** |
|--------|--------|-------------------|--------|-------------------|
|   |   |                   |   |                   |

| (euro million) |   | **Trade receivables** |   | **Other receivables** |   | **Total** |   | **Trade receivables** |   | **Other receivables** |   | **Total** |
|----------------|--------|-----------------------|--------|-----------------------|--------|-----------|--------|-----------------------|--------|-----------------------|--------|-----------|
|           |   |                       |   |                       |   |           |   |                       |   |                       |   |           |

| **Neither impaired nor past due**                          |   | **14,505** |   | **5,062** |   | **19,567** |   | **16,859** |   | **5,714** |   | **22,573** |
|------------------------------------------------------------|--------|------------|--------|-----------|--------|------------|--------|------------|--------|-----------|--------|------------|
| **Impaired        (net of the valuation allowance)**       |   | **977**    |   | **221**   |   | **1,198**  |   | **1,257**  |   | **204**   |   | **1,461**  |
| Not impaired and past due in the following        periods: |   |       |   |      |   |       |   |       |   |      |   |       |
| - within        90 days                                    |   | 953        |   | 86        |   | 1,039      |   | 1,295      |   | 84        |   | 1,379      |
| - 3 to 6 months                                            |   | 360        |   | 61        |   | 421        |   | 216        |   | 22        |   | 238        |
| - 6 to 12        months                                    |   | 441        |   | 190       |   | 631        |   | 159        |   | 239       |   | 398        |
| - over 12 months                                           |   | 473        |   | 608       |   | 1,081      |   | 180        |   | 571       |   | 751        |
|                                                       |   | **2,227**  |   | **945**   |   | **3,172**  |   | **1,850**  |   | **916**   |   | **2,766**  |
|                                                       |   | **17,709** |   | **6,228** |   | **23,937** |   | **19,966** |   | **6,834** |   | **26,800** |
|                                                       |   |            |   |           |   |            |   |            |   |           |   |            |

Trade receivables not impaired and past due primarilypertained to high-credit-rating public administrations and otherhighly-reliable counterparties for oil, natural gas and chemicalproducts supplies.

Additions to the allowance reserve for doubtful tradereceivable accounts amounted to euro 164 million (euro 167million in 2011) and primarily related to the Gas & Powersegment (euro 118 million), the Refining & Marketing segment(euro 18 million) and Chemical segment (euro 17 million).Deductions amounted to euro 169 million (euro 52 million in2011) and related to the Gas & Power segment(euro 132 million) and the Refining & Marketing segment(euro 26 million).

Trade receivables included amounts withheld to guaranteecertain contract work in progress for euro 178 million (euro 103million at December 31, 2011).

Trade receivables in currencies other than euro amounted toeuro 7,236 million.

Receivables related to divesting activities of euro 209million (euro 169 million at December 31, 2011) included thecurrent portion of receivables relating to the divestment of a1.71% interest in the Kashagan project for euro 114 million andto the divestment of a 3.25% interest in the Karachaganak project(equal to Eni’s 10% interest) to the Kazakh partnerKazMunaiGas for euro 82 million. A description of bothtransactions is reported in note 20 – Other non-currentreceivables.

Other receivables of euro 6,625 million (euro 6,059 million atDecember 31, 2011) included receivables for euro 481 million(euro 504 million at December 31, 2011) relating to the recoveryof costs incurred to develop an oil&gas project in theExploration & Production segment that is currently undergoingarbitration procedure and for euro 333 million amounts of gas tobe delivered to gas customers which off-took lower gas volumesthan the contractual minimum take thus triggering the take-or-payclause provided for by the relevant long-term sales contracts.Deferred revenues amounting to euro 522 million are stated amongother current and non-current liabilities.

Financing receivables associated with financing operatingactivities of euro 668 million (euro 630 million at December 31,2011) included loans made to unconsolidated subsidiaries, jointventures and associates for executing 

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industrial project for euro 351 million (euro 345 million atDecember 31, 2011), cash deposits to hedge the loss provisionmade by Eni Insurance Ltd for euro 280 million (euro 250 millionat December 31, 2011) and receivables for financial leasing foreuro 26 million (euro 31 million at December 31, 2011). Moreinformation about receivables for financial leasing is disclosedin note 18 – Other financial assets.

Financing receivables not related to operating activitiesamounted to euro 1,153 million (euro 28 million at December 31,2011) and primarily related to: (i) receivables from CassaDepositi e Prestiti for euro 883 million, of which euro 879million as settlement of the total consideration of euro 3,517million relating to the divestment of 1,013,619,522 ordinaryshares of Snam SpA and euro 4 million of interests on delay inpayment; (ii) residual receivables from Snam SpA for euro 141million; (iii) restricted deposits in escrow for euro 93 millionof Eni Trading & Shipping SpA of which euro 72 millionwith Citigroup Global Markets Ltd and euro 21 million withcommercial counterparts relating to derivatives; and (iv)restricted deposits in escrow of receivables of the Engineering& Construction segment for euro 25 million (euro 28million at December 31, 2011).

Financing receivables in currencies other than euro amountedto euro 331 million.

Other receivables were as follows:

| (euro million) |   | **Dec. 31, 2011** |   | **Dec. 31, 2012** |
|----------------|--------|-------------------|--------|-------------------|
|           |   |                   |   |                   |

| **Receivables originated from divestments**                    |   | **169**   |   | **209**   |
|----------------------------------------------------------------|--------|-----------|--------|-----------|
| Accounts        receivable from:                               |   |      |   |      |
| - joint venture operators in exploration and        production |   | 3,827     |   | 4,217     |
| -        non-financial government entities                     |   | 62        |   | 33        |
| - insurance companies                                          |   | 171       |   | 176       |
| -        prepayments for services                              |   | 837       |   | 616       |
| - from factoring arrangements                                  |   | 150       |   | 130       |
| - other        receivables                                     |   | 1,012     |   | 1,453     |
|                                                           |   | **6,059** |   | **6,625** |
|                                                           |   | **6,228** |   | **6,834** |
|                                                           |   |           |   |           |

Receivables deriving from factoring arrangements of euro 130million (euro 150 million at December 31, 2011) related toSerfactoring SpA and consisted primarily of advances forfactoring arrangements with recourse and receivables forfactoring arrangements without recourse.

Other receivables in currencies other than euro amounted toeuro 5,737 million.

Receivables with related parties are described in note 42– Transactions with related parties.

Because of the short-term maturity of trade receivables, thefair value approximated their carrying amount.

**10 Inventories**

|   |   | **Dec. 31, 2011** |   | **Dec. 31, 2012** |
|--------|--------|-------------------|--------|-------------------|
|   |   |                   |   |                   |

| (euro million) |   | **Crude oil, gas and petroleum products** |   | **Chemical products** |   | **Work in progress** |   | **Other** |   | **Total** |   | **Crude oil, gas and petroleum products** |   | **Chemical products** |   | **Work in progress** |   | **Other** |   | **Total** |
|----------------|--------|-------------------------------------------|--------|-----------------------|--------|----------------------|--------|-----------|--------|-----------|--------|-------------------------------------------|--------|-----------------------|--------|----------------------|--------|-----------|--------|-----------|
|           |   |                                           |   |                       |   |                      |   |           |   |           |   |                                           |   |                       |   |                      |   |           |   |           |

| Raw and auxiliary materials and consumables                |   | 892       |   | 172       |   |    |   | 1,722     |   | 2,786     |   | 948       |   | 190       |   |      |   | 1,748     |   | 2,886     |
|------------------------------------------------------------|--------|-----------|--------|-----------|--------|---------|--------|-----------|--------|-----------|--------|-----------|--------|-----------|--------|-----------|--------|-----------|--------|-----------|
| Products        being processed and semi-finished products |   | 127       |   | 25        |   |    |   | 1         |   | 153       |   | 133       |   | 15        |   |      |   | 1         |   | 149       |
| Work in progress                                           |   |      |   |      |   | 869     |   |      |   | 869       |   |      |   |      |   | 1,595     |   |      |   | 1,595     |
| Finished        products and goods                         |   | 2,892     |   | 804       |   |    |   | 71        |   | 3,767     |   | 2,912     |   | 891       |   |      |   | 63        |   | 3,866     |
|                                                       |   | **3,911** |   | **1,001** |   | **869** |   | **1,794** |   | **7,575** |   | **3,993** |   | **1,096** |   | **1,595** |   | **1,812** |   | **8,496** |
|                                                       |   |           |   |           |   |         |   |           |   |           |   |           |   |           |   |           |   |           |   |           |

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Work in progress increased by euro 726 million since theamount of work done was higher than the amount invoiced accordingto contractual terms.

Contract works in progress for euro 1,595 million (euro 869million at December 31, 2011) are stated net of prepayments foreuro 7 million (euro 11 million at December 31, 2011) whichcorresponded to the amount of the works executed and accepted bycustomers.

Changes in inventories and in the loss provision were asfollows:

| (euro million) |   | **Carrying amount at the        beginning of the year** |   | **Additions** |   | **New or increased        provisions** |   | **Deductions** |   | **Changes in the scope of        consolidation** |   | **Currency translation        differences** |   | **Other changes** |   | **Carrying amount at the        end of the year** |
|----------------|--------|---------------------------------------------------------|--------|---------------|--------|----------------------------------------|--------|----------------|--------|--------------------------------------------------|--------|---------------------------------------------|--------|-------------------|--------|---------------------------------------------------|
|           |   |                                                         |   |               |   |                                        |   |                |   |                                                  |   |                                             |   |                   |   |                                                   |

| **December 31, 2011**          |   |      |   |   |      |   |   |    |   |   |   |   |   |     |   |   |    |   |   |    |   |   |      |   |
|--------------------------------|--------|-----------|--------|--------|-----------|--------|--------|---------|--------|--------|--------|--------|--------|----------|--------|--------|---------|--------|--------|---------|--------|--------|-----------|--------|
| Gross        carrying amount   |   | 6,694     |   |   | 1,091     |   |   |    |   |   |   |   |   | (20      | )      |   | 38      |   |   | (42     | )      |   | 7,761     |   |
| Loss provision                 |   | (105      | )      |   |      |   |   | (94     | )      |   | 20     |   |   |     |   |   | (2      | )      |   | (5      | )      |   | (186      | )      |
| **Net        carrying amount** |   | **6,589** |   |   | **1,091** |   |   | **(94** | **)**  |   | **20** |   |   | **(20**  | **)**  |   | **36**  |   |   | **(47** | **)**  |   | **7,575** |   |
| **December 31, 2012**          |   |      |   |   |      |   |   |    |   |   |   |   |   |     |   |   |    |   |   |    |   |   |      |   |
| Gross        carrying amount   |   | 7,761     |   |   | 1,158     |   |   |    |   |   |   |   |   | (226     | )      |   | (18     | )      |   | (9      | )      |   | 8,666     |   |
| Loss provision                 |   | (186      | )      |   |      |   |   | (58     | )      |   | 64     |   |   | 10       |   |   | 1       |   |   | (1      | )      |   | (170      | )      |
| **Net        carrying amount** |   | **7,575** |   |   | **1,158** |   |   | **(58** | **)**  |   | **64** |   |   | **(216** | **)**  |   | **(17** | **)**  |   | **(10** | **)**  |   | **8,496** |   |
|                           |   |           |        |   |           |        |   |         |        |   |        |        |   |          |        |   |         |        |   |         |        |   |           |        |

Additions for the year amounting to euro 1,158 million wererecorded in the Engineering & Construction segment (euro 762million) and the Refining & Marketing segment (euro 252million). Changes in the scope of consolidation of euro 216million related for euro 215 million to the deconsolidation ofSnam and its subsidiaries as a consequence of the loss ofcontrol.

**11 Current income tax assets******

| (euro million) |   | **Dec. 31, 2011** |   | **Dec. 31, 2012** |
|----------------|--------|-------------------|--------|-------------------|
|           |   |                   |   |                   |

| Italian subsidiaries        |   | 399     |   | 487     |
|-----------------------------|--------|---------|--------|---------|
| Foreign        subsidiaries |   | 150     |   | 284     |
|                        |   | **549** |   | **771** |
|                        |   |         |   |         |

Income taxes are described in note 39 – Income taxexpense.

**12 Other current tax assets**

| (euro million) |   | **Dec. 31, 2011** |   | **Dec. 31, 2012** |
|----------------|--------|-------------------|--------|-------------------|
|           |   |                   |   |                   |

| VAT                              |   | 581       |   | 862       |
|----------------------------------|--------|-----------|--------|-----------|
| Excise and        customs duties |   | 239       |   | 197       |
| Other taxes and duties           |   | 568       |   | 171       |
|                             |   | **1,388** |   | **1,230** |
|                             |   |           |   |           |

The decrease in other taxes and duties amountingto euro 397 million was mainly related to foreign subsidiaries ofthe Exploration & Production segment (euro 323 million).

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**13 Other current assets**

| (euro million) |   | **Dec. 31, 2011** |   | **Dec. 31, 2012** |
|----------------|--------|-------------------|--------|-------------------|
|           |   |                   |   |                   |

| Fair value of non-hedging and trading        derivatives |   | 1,562     |   | 916       |
|----------------------------------------------------------|--------|-----------|--------|-----------|
| Fair value        of cash flow hedge derivatives         |   | 157       |   | 31        |
| Other current assets                                     |   | 607       |   | 677       |
|                                                     |   | **2,326** |   | **1,624** |
|                                                     |   |           |   |           |

The fair value of non-hedging derivativecontracts and derivatives contracts held for trading is presentedbelow:

|   |   | **Dec. 31, 2011** |   | **Dec. 31, 2012** |
|--------|--------|-------------------|--------|-------------------|
|   |   |                   |   |                   |

| (euro        million) |    | **Fair value** | **  ** | **Purchase        commitments** | **  ** | **Sale        commitments** | **  ** | **Fair value** | **  ** | **Purchase        commitments** | **  ** | **Sale        commitments** |
|-----------------------|--------------|----------------|------------------|---------------------------------|------------------|-----------------------------|------------------|----------------|------------------|---------------------------------|------------------|-----------------------------|
|                  |         |                |             |                                 |             |                             |             |                |             |                                 |             |                             |

| **Derivatives on exchange rate**        |   |      |   |       |   |      |   |    |   |      |   |       |
|-----------------------------------------|--------|-----------|--------|------------|--------|-----------|--------|---------|--------|-----------|--------|------------|
| Interest        currency swap           |   | 16        |   | 50         |   |      |   | 8       |   | 44        |   |       |
| Currency swap                           |   | 204       |   | 5,819      |   | 833       |   | 158     |   | 3,349     |   | 4,597      |
| Outright                                |   | 2         |   | 116        |   |      |   | 3       |   | 215       |   | 8          |
|                                    |   | **222**   |   | **5,985**  |   | **833**   |   | **169** |   | **3,608** |   | **4,605**  |
| **Derivatives        on interest rate** |   |      |   |       |   |      |   |    |   |      |   |       |
| Interest rate swap                      |   | 6         |   |       |   | 1,885     |   | 1       |   | 23        |   |       |
|                                    |   | **6**     |   |       |   | **1,885** |   | **1**   |   | **23**    |   |       |
| **Derivatives on commodities**          |   |      |   |       |   |      |   |    |   |      |   |       |
| Over the        counter                 |   | 1,181     |   | 5,644      |   | 4,378     |   | 713     |   | 3,648     |   | 9,505      |
| Future                                  |   | 68        |   | 452        |   | 438       |   | 26      |   | 825       |   | 9          |
| Other                                   |   | 85        |   |       |   | 581       |   | 7       |   | 30        |   | 1          |
|                                    |   | **1,334** |   | **6,096**  |   | **5,397** |   | **746** |   | **4,503** |   | **9,515**  |
|                                    |   | **1,562** |   | **12,081** |   | **8,115** |   | **916** |   | **8,134** |   | **14,120** |
|                                    |   |           |   |            |   |           |   |         |   |           |   |            |

Derivative fair values were estimated on the basis of marketquotations provided by primary info-provider, or in the absenceof market information, appropriate valuation methods commonlyused on the marketplace.

Fair values of non-hedging and trading derivatives of euro 916million (euro 1,562 million at December 31, 2011) consisted of:(i) euro 564 million (euro 1,450 million at December 31, 2011) ofderivatives that did not meet the formal criteria to bedesignated as hedges under IFRS because they were entered into inorder to manage net exposures to movements in foreign currencies,interest rates or commodity prices. Therefore, such derivativeswere not related to specific trade or financing transactions; and(ii) euro 352 million (euro 112 million at December 31, 2011) ofcommodity and trading derivatives entered by the Gas & Powersegment in order to optimize the economic margin and by EniTrading & Shipping SpA for trading purposes.

Fair value of cash flow hedge derivatives of euro 31 million(euro 157 million at December 31, 2011) pertained to the Gas& Power segment. These derivatives were entered into to hedgevariability in future cash flows associated to highly probablefuture sale transactions of gas or electricity or on alreadycontracted sales due to different indexation mechanism of supplycosts versus selling prices. A similar scheme applies to exchangerate hedging derivatives. Negative fair value of contractsexpiring by 2013 is disclosed in note 25 – Other currentliabilities; positive and negative fair value of contractsexpiring beyond 2013 is disclosed in note 20 – Othernon-current receivables and in note 30 – Other non-currentliabilities. The effects of the evaluation at fair value of cashflow hedge derivatives are given in note 32 –Shareholders’ equity and in note 36 – Operatingexpenses.

Purchase and sale commitments of cash flow hedge derivativesamounted to euro 31 million and euro 510 million, respectively(purchase and sale commitments of euro 3,297 million and euro 610million, respectively, at December 31, 2011).

Information on hedged risks and hedging policies is disclosedin note 34 – Guarantees, commitments and risks - Riskfactors.

Other assets amounted to euro 677 million (euro 607 million atDecember 31, 2011) and included: (i) prepayments and accruedincome for euro 146 million (euro 260 million at December 31,2011); (ii) prepayments of euro 129 million that were made to gassuppliers upon triggering the take-or-pay clause provided by therelevant 

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long-term supply arrangements to be collected within 2013;(iii) rentals for euro 51 million (euro 18 million at December31, 2011); and (iv) insurance premiums for euro 49 million (euro64 million at December 31, 2011).

Transactions with related parties are described in note 42– Transactions with related parties.

**Non-current assets****14 Property, plant and equipment**

| (euro million) |   | **Net book amount at the        beginning of the year** |   | **Additions** |   | **Depreciation** |   | **Impairments** |   | **Changes in the scope of        consolidation** |   | **Currency translation        differences** |   | **Reclassification to        assets held for sale** |   | **Other changes** |   | **Net book amount at the        end of the year** |   | **Gross book amount at the        end of the year** |   | **Provisions for        depreciation and impairments** |
|----------------|--------|---------------------------------------------------------|--------|---------------|--------|------------------|--------|-----------------|--------|--------------------------------------------------|--------|---------------------------------------------|--------|-----------------------------------------------------|--------|-------------------|--------|---------------------------------------------------|--------|-----------------------------------------------------|--------|--------------------------------------------------------|
|           |   |                                                         |   |               |   |                  |   |                 |   |                                                  |   |                                             |   |                                                     |   |                   |   |                                                   |   |                                                     |   |                                                        |

| **December 31, 2011**                    |   |       |   |   |       |   |   |       |   |   |       |   |   |        |   |   |      |   |   |     |   |   |    |   |   |       |   |   |        |   |   |       |   |
|------------------------------------------|--------|------------|--------|--------|------------|--------|--------|------------|--------|--------|------------|--------|--------|-------------|--------|--------|-----------|--------|--------|----------|--------|--------|---------|--------|--------|------------|--------|--------|-------------|--------|--------|------------|--------|
| Land                                     |   | 665        |   |   | 9          |   |   |       |   |   |       |   |   | 100         |   |   | (9        | )      |   | (2       | )      |   | 8       |   |   | 771        |   |   | 799         |   |   | 28         |   |
| Buildings                                |   | 832        |   |   | 305        |   |   | (131       | )      |   | (40        | )      |   |        |   |   | 12        | )      |   | (9       | )      |   | 458     |   |   | 1,427      |   |   | 3,544       |   |   | 2,117      |   |
| Plant and        machinery               |   | 42,991     |   |   | 3,704      |   |   | (6,094     | )      |   | (601       | )      |   | 16          |   |   | 866       |   |   | (209     | )      |   | 6,821   |   |   | 47,494     |   |   | 121,166     |   |   | 73,672     |   |
| Industrial and commercial equipment      |   | 991        |   |   | 383        |   |   | (206       | )      |   | (2         | )      |   |        |   |   | (5        | )      |   |     |   |   | (702    | )      |   | 459        |   |   | 1,789       |   |   | 1,330      |   |
| Other        assets                      |   | 1,172      |   |   | 117        |   |   | (113       | )      |   | (5         | )      |   | (116        | )      |   | 6         |   |   | (1       | )      |   | (231    | )      |   | 829        |   |   | 2,308       |   |   | 1,479      |   |
| Tangible assets in progress and advances |   | 20,753     |   |   | 7,140      |   |   |       |   |   | (243       | )      |   |        |   |   | 523       |   |   |     |   |   | (5,575  | )      |   | 22,598     |   |   | 24,257      |   |   | 1,659      |   |
|                                     |   | **67,404** |   |   | **11,658** |   |   | **(6,544** | **)**  |   | **(891**   | **)**  |   |        |   |   | **1,393** |   |   | **(221** | **)**  |   | **779** |   |   | **73,578** |   |   | **153,863** |   |   | **80,285** |   |
| **December 31, 2012**                    |   |       |   |   |       |   |   |       |   |   |       |   |   |        |   |   |      |   |   |     |   |   |    |   |   |       |   |   |        |   |   |       |   |
| Land                                     |   | 771        |   |   | 5          |   |   |       |   |   |       |   |   | (109        | )      |   | (8        | )      |   | (8       | )      |   | 4       |   |   | 655        |   |   | 678         |   |   | 23         |   |
| Buildings                                |   | 1,427      |   |   | 61         |   |   | (108       | )      |   | (45        | )      |   | (316        | )      |   | (2        | )      |   | (7       | )      |   | 148     |   |   | 1,158      |   |   | 3,150       |   |   | 1,992      |   |
| Plant and        machinery               |   | 47,494     |   |   | 1,546      |   |   | (7,012     | )      |   | (1,079     | )      |   | (9,719      | )      |   | (313      | )      |   | (304     | )      |   | 8,283   |   |   | 38,896     |   |   | 112,170     |   |   | 73,274     |   |
| Industrial and commercial equipment      |   | 459        |   |   | 74         |   |   | (112       | )      |   | (3         | )      |   | (62         | )      |   | 3         |   |   |     |   |   | 3       |   |   | 362        |   |   | 1,660       |   |   | 1,298      |   |
| Other        assets                      |   | 829        |   |   | 89         |   |   | (103       | )      |   | (75        | )      |   | (12         | )      |   | (7        | )      |   |     |   |   | 5       |   |   | 726        |   |   | 2,239       |   |   | 1,513      |   |
| Tangible assets in progress and advances |   | 22,598     |   |   | 9,447      |   |   |       |   |   | (407       | )      |   | (2,207      | )      |   | (187      | **)**  |   | (130     | **)**  |   | (7,445  | )      |   | 21,669     |   |   | 23,400      |   |   | 1,731      |   |
|                                     |   | **73,578** |   |   | **11,222** |   |   | **(7,335** | **)**  |   | **(1,609** | **)**  |   | **(12,425** | **)**  |   | **(514**  | **)**  |   | **(449** | **)**  |   | **998** |   |   | **63,466** |   |   | **143,297** |   |   | **79,831** |   |
|                                     |   |            |        |   |            |        |   |            |        |   |            |        |   |             |        |   |           |        |   |          |        |   |         |        |   |            |        |   |             |        |   |            |        |

Capital expenditures by segment were the following:

| (euro        million) |   | **2011** |   | **2012** |
|-----------------------|--------|----------|--------|----------|
|                  |   |          |   |          |

| **Capital expenditures**                  |   |       |   |   |       |
|-------------------------------------------|--------|------------|--------|--------|------------|
| Exploration        & Production       |   | 8,162      |   |   | 8,407      |
| Gas & Power                           |   | 128        |   |   | 156        |
| Refining        & Marketing           |   | 860        |   |   | 836        |
| Chemicals                                 |   | 216        |   |   | 163        |
| Engineering        & Construction     |   | 1,084      |   |   | 998        |
| Corporate and financial companies         |   | 73         |   |   | 71         |
| Other        activities - Snam (a)        |   | 1,153      |   |   | 539        |
| Other activities                          |   | 10         |   |   | 14         |
| Elimination        of intra-group profits |   | (28        | )      |   | 38         |
|                                      |   | **11,658** |   |   | **11,222** |
|                                      |   |            |        |   |            |

|    |    |                                                                                                                                                    |
|--------------|--------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------|
| (a)          |    | Capital        expenditures for 2011 pertaining to the segment Other        activities - Snam has been reclassified from the Gas        & Power segment. |

Capital expenditures included capitalized finance expenses ofeuro 173 million, of which euro 26 million relating todiscontinued operations (euro 147 million in 2011, of which euro36 million relating to discontinued operations) and related tothe Exploration & Production segment (euro 105 million), theRefining & Marketing segment (euro 39 million) and theChemical segment (euro 3 million). The interest rates used forcapitalizing finance expense ranged from 2.1% to 5.1% (1.0% and3.7% at December 31, 2011).

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The main depreciation rates used ranged as follows:

| (%)                                 |   |   |   |   |   |   |   |   |   |
|-------------------------------------|--------|--------|--------|--------|--------|--------|--------|--------|--------|
| Buildings                           |   |   |   |   | 2      |   | -      | 10     |   |
| Plant and machinery                 |   |   |   |   | 2      |   | -      | 10     |   |
| Industrial and commercial equipment |   |   |   |   | 4      |   | -      | 33     |   |
| Other assets                        |   |   |   |   | 6      |   | -      | 33     |   |

The break-down of impairments losses recorded in 2012amounting to euro 1,609 million (euro 891 million in 2011) andthe associated tax effect is provided below:

| (euro        million) |   | **2011** |   | **2012** |
|-----------------------|--------|----------|--------|----------|
|                  |   |          |   |          |

| **Impairment losses**                           |   |    |   |      |
|-------------------------------------------------|--------|---------|--------|-----------|
| Refining        & Marketing                 |   | 484     |   | 843       |
| Exploration & Production                    |   | 189     |   | 547       |
| Chemicals                                       |   | 174     |   | 112       |
| Gas & Power                                 |   | 5       |   | 80        |
| Other        segments                           |   | 39      |   | 27        |
|                                            |   | **891** |   | **1,609** |
| **Tax        effects**                          |   |    |   |      |
| Refining & Marketing                        |   | 194     |   | 96        |
| Exploration        & Production             |   | 65      |   | 154       |
| Chemicals                                       |   | 47      |   | 33        |
| Gas &        Power                          |   | 2       |   | 21        |
| Other segments                                  |   | 1       |   | 2         |
|                                            |   | **309** |   | **306**   |
| **Impairments net of the relevant tax effects** |   |    |   |      |
| Refining        & Marketing                 |   | 290     |   | 747       |
| Exploration & Production                    |   | 124     |   | 393       |
| Chemicals                                       |   | 127     |   | 79        |
| Gas & Power                                 |   | 3       |   | 59        |
| Other        segments                           |   | 38      |   | 25        |
|                                            |   | **582** |   | **1,303** |
|                                            |   |         |   |           |

In assessing whether impairment is required, the carryingvalues of property, plant and equipment are compared with theirrecoverable amounts. The recoverable amount is the higher of anasset’s fair value less costs to sell and its value-in-use.Given the nature of Eni’s activities, information on assetfair value is usually difficult to obtain unless negotiationswith a potential buyer are ongoing. Therefore, the recoverabilityis verified by using the value-in-use which is calculated bydiscounting the estimated cash flows arising from the continuinguse of an asset. The valuation is carried out for individualasset or for the smallest identifiable group of assets thatgenerates cash inflows that are largely independent of the cashinflows from other assets or groups of assets (cash generatingunit - CGU). The Group has identified its main CGUs: (i) in theExploration & Production segment, individual oilfields orpools of oilfields whereby technical, economic or contractualfeatures make underlying cash flows interdependent; (ii) in theRefining & Marketing segment, refining plants, warehouses andcommercial facilities relating to each distribution channels andby Country (ordinary network, high-ways network, and wholesaleactivities); (iii) in the Chemical segment, production plants bybusiness and related facilities; and (iv) in the Engineering& Construction segment, the business units Offshore E&Cand Onshore E&C, onshore drilling facilities and individualrigs for offshore operations. The recoverable amount iscalculated by discounting the estimated cash flows deriving fromthe continuing use of the CGU and, if significant and reasonablydeterminable, the cash flows deriving from its disposal at theend of its useful life. Cash flows are determined on the basis ofthe best information available at the moment of the assessmentderiving: (i) for the first four years of each projection, fromthe Company’s four-year plan adopted by the top managementwhich provides information on expected oil and gas productionvolumes, sales volumes, capital expenditures, operating costs andmargins and industrial and marketing set-up, as well as trends onthe main macroeconomic variables, including inflation, nominalinterest rates and exchange rates; (ii) beyond the four-year planhorizon, cash flow projections are estimated based onmanagement’s long-term assumptions regarding the mainmacroeconomic variables (inflation rates, commodity prices, etc.)and along a time horizon which considers the following factors:(a) for the oil&gas CGUs, the residual life of the reservesand the associated projections of operating costs and developmentexpenditures; (b) for the CGUs of the Refining & Marketingsegment and the Chemical segment, the economical and technicallife of the plants and associated projections of operating costs,expenditures to support plant efficiency, refining and marketingmargins and, in the case of chemical plants their 

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normalized operating results before depreciation, interest andtaxes; and (c) for the CGUs of the gas market and the Engineering& Construction segment, the perpetuity method of thelast-year-plan by using a nominal growth rate ranging from 0% to2% considering possible adjustments to reflect any cyclicalityobserved in the business; and (iii) commodity prices areestimated on the basis of the forward prices prevailing in themarketplace as of the balance sheet date for the first four yearsof the cash flow projections and the long-term price assumptionsadopted by the Company’s management for strategic planningpurposes and capital budget allocation (see note 3 – Summaryof significant accounting policies). In particular, the long-termprice of oil adopted for assessing the future cash flows of theoil&gas CGUs was $90 per barrel which is adjusted to takeinto account the expected inflationary rate from 2016 onwards.

Values-in-use are estimated by discounting post-tax cash flowsat a rate which corresponds for the Exploration & Production,Refining & Marketing and Chemical segments to theCompany’s weighted average cost of capital net of the riskfactors attributable to Saipem and the G&P segment which areassessed on a stand alone basis. Then the discount rates areadjusted to factor in risks specific to each Country of activity(adjusted post-tax WACC). In 2012, the adjusted post-tax ratesused for assessing values-in-use marginally decreased from theprevious year reflecting a reduction in the financial parametersused for assessing the cost of capital: cost of borrowings to Enidetermined by expected trends for borrowing spreads andmanagement’s estimates about the composition of theCompany’s finance debt and risk-free yields reflecting anexpected decline in the risk premium of Italy. Those positivefactors were partially absorbed by the increased weight of netequity in the determination of the cost of capital to the Groupas the Board of Directors has reassessed the optimal mix betweeninternally-generated funds versus third parties borrowingsfollowing the divestment of Snam. It is worth mentioning that theincreased equity risk of the Eni share due to the divestment of abusiness with low volatility had no impact on the assessment ofthe cost of capital used for the impairment evaluations in theExploration & Production, Refining & Marketing andChemical segments. This conclusion is underpinned by the factthat in the past management adopted discount rates which excludedthe mitigating effect of the lower volatility of Snam in theEni’s portfolio. In 2012, the adjusted WACC used forimpairment test purposes ranged from 7.2% to 13.0%.

Post-tax cash flows and discount rates were adopted as theyresulted in an assessment that substantially approximated apre-tax assessment.

The amount of impairment losses recorded in the Refining &Marketing segment of euro 843 million reflected management’sexpectations of a reduced profitability outlook due to continuingweak trading conditions in the refining business negativelyaffected by rising feedstock costs, higher costs for energyutilities which are indexed to the price of crude oil, excesscapacity in the Mediterranean area and anticipated poor demandfor fuels on the back of the economic downturn. Based on thesedrivers, management recognized impairment losses at theCompany’s refining plants by adjusting their book value totheir lower values-in-use considering expectations ofunprofitable margins in the long term. Other minor impairmentswere recorded at a retail network, marginal lines of business andcertain safety and maintenance expenditures incurred in theperiod that were written-off because they related to assetspreviously impaired. The largest impairment losses were recordedat two refineries which were tested for impairment using apost-tax discount rate of 7.6%, corresponding to a pre-taxdiscount rate of 10.2% and 9.0%, respectively.

The Exploration & Production segment recorded assetimpairments amounting to euro 547 million of which euro 350million related to proved properties and euro 197 million tounproved properties. The main drivers were downward reserverevisions and decreasing prices of oil and gas properties locatedin USA, of a gas property located in India and changed economicsof an oil property located in Turkmenistan. These impairmentlosses were assessed using a post-tax discount rate of: (i) 7.3%,corresponding to a pre-tax discount rate of 10.9%, for an assetlocated in USA; (ii) 8.2%, corresponding to a pre-tax discountrate of 13.6%, for an asset located in India; and(iii) 8.3%, corresponding to a pre-tax discount rate of15.7%, for an asset located in Turkmenistan.

In the Chemical segment impairment losses amounted to euro 112million and related to loss-making business lines producingolefins and polyethylene at the Brindisi (Italy) and Dunkerque(France) plants and expenditures incurred in the period that werewritten-off because they related to assets previously impaired.

The Gas & Power segment recorded impairment losses of euro80 million relating for euro 71 million to the tangible assetsexisting at an offshore storage field in the British section ofthe North Sea which development project has been suspended in thelight of continuing weakness in the gas scenario.

Change in the scope of consolidation of euro 12,425 millioncomprised the deconsolidation of Snam following the sale to CassaDepositi e Prestiti SpA of a 30% stake and loss of controltherein (euro 12,432 million) and the inclusion in the scope ofconsolidation following the finalization of the 100% acquisitionof Nuon Belgium NV (now merged in Eni Gas & Power NV) andNuon Power Generation Walloon NV (now Eni Power Generation NV)which markets gas and electricity mainly to residential andbusiness customers in Belgium (euro 7 million).

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Foreign currency translation differences of euro 514 millionwere primarily related to translations of entities accountsdenominated in U.S. dollar (euro 759 million), partially offsetby translations of entities accounts denominated in Norwegiankrone (euro 207 million).

The reclassification to assets held for sale of euro 449million comprised certain non-strategic assets of the Exploration& Production segment (euro 434 million).

Other changes of euro 998 million related to the initialrecognition and change in estimates of the costs for dismantlingand site restoration of euro 1,418 million, of which euro 1,351million regarded the Exploration & Production segment.Such increase was partially offset by sales for a book value ofeuro 515 million and by depreciations related to the discontinuedoperations for euro 194 million. Sales of euro 515 millionrelated to certain non-strategic assets of the Exploration &Production segment for euro 467 million, of which euro 163million relating to the sale of the 3.25% interest in theKarachaganak project (equal to the Eni’s 10% interest). Moreinformation is disclosed in note 20 – Other non-currentreceivables.

Unproved mineral interests included in tangible assets inprogress and advances are presented below:

| (euro        million) |    | **Book amount         at the beginning        of the year** |   | **Acquisitions** |   | **Impairment losses** |   | **Transfers to proved mineral interest** |   | **Other changes and currency translation        differences** |   | **Book amount         at the end        of the year** |
|-----------------------|--------------|-------------------------------------------------------------|--------|------------------|--------|-----------------------|--------|------------------------------------------|--------|---------------------------------------------------------------|--------|-------------------------------------------------------|
|                  |         |                                                             |   |                  |   |                       |   |                                          |   |                                                               |   |                                                       |

| **December 31, 2011**        |   |      |   |   |    |   |   |     |   |   |     |   |   |    |   |   |      |   |
|------------------------------|--------|-----------|--------|--------|---------|--------|--------|----------|--------|--------|----------|--------|--------|---------|--------|--------|-----------|--------|
| Congo                        |   | 1,248     |   |   |    |   |   |     |   |   | (8       | )      |   | 40      |   |   | 1,280     |   |
| Nigeria                      |   |      |   |   | 697     |   |   |     |   |   |     |   |   | 61      |   |   | 758       |   |
| Turkmenistan                 |   | 688       |   |   |    |   |   |     |   |   | (70      | )      |   | 17      |   |   | 635       |   |
| Algeria                      |   | 446       |   |   | 57      |   |   |     |   |   | (34      | )      |   | 16      |   |   | 485       |   |
| USA                          |   | 718       |   |   |    |   |   | (64      | )      |   | (458     | )      |   | 21      |   |   | 217       |   |
| India                        |   | 55        |   |   |    |   |   |     |   |   |     |   |   | (7      | )      |   | 48        |   |
| Other        countries       |   | 106       |   |   |    |   |   |     |   |   | (34      | )      |   | 1       |   |   | 73        |   |
|                         |   | **3,261** |   |   | **754** |   |   | **(64**  | **)**  |   | **(604** | **)**  |   | **149** |   |   | **3,496** |   |
| **December        31, 2012** |   |      |   |   |    |   |   |     |   |   |     |   |   |    |   |   |      |   |
| Congo                        |   | 1,280     |   |   |    |   |   |     |   |   | (2       | )      |   | (24     | )      |   | 1,254     |   |
| Nigeria                      |   | 758       |   |   |    |   |   |     |   |   |     |   |   | (15     | )      |   | 743       |   |
| Turkmenistan                 |   | 635       |   |   |    |   |   | (109     | )      |   | (1       | )      |   | (9      | )      |   | 516       |   |
| Algeria                      |   | 485       |   |   |    |   |   |     |   |   | (124     | )      |   | (6      | )      |   | 355       |   |
| USA                          |   | 217       |   |   |    |   |   | (62      | )      |   | (51      | )      |   | 42      |   |   | 146       |   |
| India                        |   | 48        |   |   |    |   |   | (26      | )      |   |     |   |   |    |   |   | 22        |   |
| Other countries              |   | 73        |   |   |    |   |   |     |   |   | (44      | )      |   |    |   |   | 29        |   |
|                         |   | **3,496** |   |   |    |   |   | **(197** | **)**  |   | **(222** | **)**  |   | **(12** | **)**  |   | **3,065** |   |
|                         |   |           |        |   |         |        |   |          |        |   |          |        |   |         |        |   |           |        |

Impairment losses of euro 197 million arediscussed in the previous paragraph.

Accumulated provisions for impairments amounted to euro 6,816million and euro 8,058 million at December 31, 2011 and 2012,respectively.

At December 31, 2012, Eni pledged property, plant andequipment for euro 21 million primarily as collateral againstcertain borrowings (euro 27 million as of December 31, 2011).

Government grants recorded as a decrease of property, plantand equipment amounted to euro 132 million (euro 724 million atDecember 31, 2011). The decrease of euro 592 million related foreuro 524 million to the deconsolidation of Snam.

Assets acquired under financial lease agreements amounted toeuro 39 million (euro 19 million at December 31, 2011), of whicheuro 29 million related to service stations in the Refining &Marketing segment and euro 10 million related to FPSO ships usedby the Exploration & Production segment to support oilproduction and treatment activities.

Contractual commitments related to the purchase of property,plant and equipment are disclosed in note 34 – Guarantees,commitments and risks - Liquidity risk.

Property, plant and equipment under concession arrangementsare described in note 34 – Guarantees, commitments and risks- Asset under concession arrangements.

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**Property, plant and equipment by segment**

| (euro million) |   | **Dec. 31, 2011** |   | **Dec. 31, 2012** |
|----------------|--------|-------------------|--------|-------------------|
|           |   |                   |   |                   |

| **Property, plant and equipment, gross**                                |   |        |   |   |        |   |
|-------------------------------------------------------------------------|--------|-------------|--------|--------|-------------|--------|
| Exploration        & Production                                     |   | 96,561      |   |   | 103,369     |   |
| Gas & Power                                                         |   | 4,206       |   |   | 4,373       |   |
| Refining        & Marketing                                         |   | 14,884      |   |   | 15,744      |   |
| Chemicals                                                               |   | 5,438       |   |   | 5,589       |   |
| Engineering        & Construction                                   |   | 11,809      |   |   | 12,621      |   |
| Corporate and financial companies                                       |   | 422         |   |   | 470         |   |
| Other        activities - Snam (a)                                      |   | 19,449      |   |   |        |   |
| Other activities                                                        |   | 1,617       |   |   | 1,617       |   |
| Elimination        of intra-group profits                               |   | (523        | )      |   | (486        | )      |
|                                                                    |   | **153,863** |   |   | **143,297** |   |
| **Accumulated        depreciation, amortization and impairment losses** |   |        |   |   |        |   |
| Exploration & Production                                            |   | 51,034      |   |   | 55,836      |   |
| Gas &        Power                                                  |   | 1,705       |   |   | 1,961       |   |
| Refining & Marketing                                                |   | 10,126      |   |   | 11,305      |   |
| Chemicals                                                               |   | 4,478       |   |   | 4,661       |   |
| Engineering & Construction                                          |   | 3,840       |   |   | 4,408       |   |
| Corporate        and financial companies                                |   | 226         |   |   | 243         |   |
| Other activities - Snam (a)                                             |   | 7,433       |   |   |        |   |
| Other        activities                                                 |   | 1,541       |   |   | 1,541       |   |
| Elimination of intra-group profits                                      |   | (98         | )      |   | (124        | )      |
|                                                                    |   | **80,285**  |   |   | **79,831**  |   |
| **Property, plant and equipment, net**                                  |   |        |   |   |        |   |
| Exploration        & Production                                     |   | 45,527      |   |   | 47,533      |   |
| Gas & Power                                                         |   | 2,501       |   |   | 2,412       |   |
| Refining        & Marketing                                         |   | 4,758       |   |   | 4,439       |   |
| Chemicals                                                               |   | 960         |   |   | 928         |   |
| Engineering        & Construction                                   |   | 7,969       |   |   | 8,213       |   |
| Corporate and financial companies                                       |   | 196         |   |   | 227         |   |
| Other        activities - Snam (a)                                      |   | 12,016      |   |   |        |   |
| Other activities                                                        |   | 76          |   |   | 76          |   |
| Elimination        of intra-group profits                               |   | (425        | )      |   | (362        | )      |
|                                                                    |   | **73,578**  |   |   | **63,466**  |   |
|                                                                    |   |             |        |   |             |        |

|    |    |                                                                                                                                                                             |
|--------------|--------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| (a)          |    | Property,        plant and equipment as of December 31, 2011, pertaining        to the segment Other activities - Snam has been        reclassified from the Gas & Power segment. |

**15********Inventory - compulsory stock**

| (euro million) |   | **Dec. 31, 2011** |   | **Dec. 31, 2012** |
|----------------|--------|-------------------|--------|-------------------|
|           |   |                   |   |                   |

| Crude oil and petroleum products |   | 2,284     |   | 2,538     |
|----------------------------------|--------|-----------|--------|-----------|
| Natural        gas               |   | 149       |   |      |
|                             |   | **2,433** |   | **2,538** |
|                             |   |           |   |           |

Compulsory inventories were primarily held by Italiansubsidiaries (euro 2,418 million and euro 2,525 million atDecember 31, 2011 and 2012, respectively) in accordance withminimum stock requirements of oil, petroleum products and naturalgas set forth by applicable laws. Compulsory stock of natural gaswent to zero at period-end as a consequence of thedeconsolidation of Snam.

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**16 Intangible assets**

| (euro million) |   | **Net book amount at the        beginning of the year** |   | **Additions** |   | **Amortization** |   | **Impairment losses** |   | **Changes in the scope of        consolidation** |   | **Currency translation        differences** |   | **Other changes** |   | **Net book amount at the        end of the year** |   | **Gross book amount at the        end of the year** |   | **Provisions for        depreciation and impairments** |
|----------------|--------|---------------------------------------------------------|--------|---------------|--------|------------------|--------|-----------------------|--------|--------------------------------------------------|--------|---------------------------------------------|--------|-------------------|--------|---------------------------------------------------|--------|-----------------------------------------------------|--------|--------------------------------------------------------|
|           |   |                                                         |   |               |   |                  |   |                       |   |                                                  |   |                                             |   |                   |   |                                                   |   |                                                     |   |                                                        |

| **December 31, 2011**                                      |   |       |   |      |   |       |   |   |       |   |   |       |   |   |   |   |   |     |   |   |       |   |       |   |      |
|------------------------------------------------------------|--------|------------|--------|-----------|--------|------------|--------|--------|------------|--------|--------|------------|--------|--------|--------|--------|--------|----------|--------|--------|------------|--------|------------|--------|-----------|
| **Intangible        assets with finite useful lives**      |   |       |   |      |   |       |   |   |       |   |   |       |   |   |   |   |   |     |   |   |       |   |       |   |      |
| Exploration expenditures                                   |   | 538        |   | 1,245     |   | (1,244     | )      |   |       |   |   |       |   |   | 17     |   |   | 8        |   |   | 564        |   | 2,634      |   | 2,070     |
| Industrial        patents and intellectual property rights |   | 150        |   | 37        |   | (85        | )      |   | (2         | )      |   |       |   |   | (1     | )      |   | 57       |   |   | 156        |   | 1,474      |   | 1,318     |
| Concessions, licenses, trademarks and similar        items |   | 575        |   | 10        |   | (159       | )      |   |       |   |   |       |   |   |   |   |   | 421      |   |   | 847        |   | 2,827      |   | 1,980     |
| Service        concession arrangements                     |   | 3,562      |   | 308       |   | (142       | )      |   |       |   |   |       |   |   | (13    | )      |   | (25      | )      |   | 3,690      |   | 6,361      |   | 2,671     |
| Intangible assets in progress and advances                 |   | 658        |   | 171       |   |       |   |   |       |   |   |       |   |   |   |   |   | (581     | )      |   | 248        |   | 254        |   | 6         |
| Other        intangible assets                             |   | 1,514      |   | 9         |   | (128       | )      |   |       |   |   |       |   |   | 7      |   |   | 20       |   |   | 1,422      |   | 2,074      |   | 652       |
|                                                       |   | **6,997**  |   | **1,780** |   | **(1,758** | **)**  |   | **(2**     | **)**  |   |       |   |   | **10** |   |   | **(100** | **)**  |   | **6,927**  |   | **15,624** |   | **8,697** |
| **Intangible        assets with indefinite useful lives**  |   |       |   |      |   |       |   |   |       |   |   |       |   |   |   |   |   |     |   |   |       |   |       |   |      |
| Goodwill                                                   |   | 4,175      |   |      |   |       |   |   | (152       | )      |   |       |   |   | 2      |   |   | (2       | )      |   | 4,023      |   |       |   |      |
|                                                       |   | **11,172** |   | **1,780** |   | **(1,758** | **)**  |   | **(154**   | **)**  |   |       |   |   | **12** |   |   | **(102** | **)**  |   | **10,950** |   |       |   |      |
| **December 31, 2012**                                      |   |       |   |      |   |       |   |   |       |   |   |       |   |   |   |   |   |     |   |   |       |   |       |   |      |
| **Intangible        assets with finite useful lives**      |   |       |   |      |   |       |   |   |       |   |   |       |   |   |   |   |   |     |   |   |       |   |       |   |      |
| Exploration expenditures                                   |   | 564        |   | 1,871     |   | (1,886     | )      |   |       |   |   |       |   |   | (10    | )      |   | 9        |   |   | 548        |   | 2,653      |   | 2,105     |
| Industrial        patents and intellectual property rights |   | 156        |   | 59        |   | (58        | )      |   | (1         | )      |   | (74        | )      |   | 1      |   |   | 55       |   |   | 138        |   | 1,197      |   | 1,059     |
| Concessions, licenses, trademarks and similar        items |   | 847        |   | 18        |   | (134       | )      |   | (1         | )      |   | (46        | )      |   |   |   |   | (1       | )      |   | 683        |   | 2,516      |   | 1,833     |
| Service        concession arrangements                     |   | 3,690      |   | 170       |   | (3         | )      |   | (37        | )      |   | (3,716     | )      |   | (2     | )      |   | (70      | )      |   | 32         |   | 101        |   | 69        |
| Intangible assets in progress and advances                 |   | 248        |   | 159       |   |       |   |   | (1         | )      |   | (57        | )      |   |   |   |   | (86      | )      |   | 263        |   | 269        |   | 6         |
| Other        intangible assets                             |   | 1,422      |   | 18        |   | (127       | )      |   | (1,030     | )      |   | 40         |   |   | 7      |   |   | 32       |   |   | 362        |   | 2,144      |   | 1,782     |
|                                                       |   | **6,927**  |   | **2,295** |   | **(2,208** | **)**  |   | **(1,070** | **)**  |   | **(3,853** | **)**  |   | **(4** | **)**  |   | **(61**  | **)**  |   | **2,026**  |   | **8,880**  |   | **6,854** |
| **Intangible        assets with indefinite useful lives**  |   |       |   |      |   |       |   |   |       |   |   |       |   |   |   |   |   |     |   |   |       |   |       |   |      |
| Goodwill                                                   |   | 4,023      |   |      |   |       |   |   | (1,347     | )      |   | (216       | )      |   | 2      |   |   | (1       | )      |   | 2,461      |   |       |   |      |
|                                                       |   | **10,950** |   | **2,295** |   | **(2,208** | **)**  |   | **(2,417** | **)**  |   | **(4,069** | **)**  |   | **(2** | **)**  |   | **(62**  | **)**  |   | **4,487**  |   |       |   |      |
|                                                       |   |            |   |           |   |            |        |   |            |        |   |            |        |   |        |        |   |          |        |   |            |   |            |   |           |

Capitalized exploration expenditures at the end of the year ofeuro 548 million mainly related to the residual book value oflicense acquisition costs that are amortized on a straight-linebasis over the contractual term of the exploration lease or fullywritten off against profit and loss upon expiration of terms ormanagement’s decision to cease any exploration activities.Additions for the year of euro 1,871 million included explorationdrilling expenditures which are fully capitalized to reflecttheir investment nature and then entirely amortized for euro1,650 million (euro 973 million in 2011) and license acquisitioncosts of euro 221 million (euro 270 million in 2011) primarilyrelated to the acquisition of new exploration acreage in Liberia,Indonesia and Kenya.

Concessions, licenses, trademarks and similar items for euro683 million primarily comprised transmission rights for naturalgas imported from Algeria (euro 614 million) and concessions formineral exploration (euro 47 million).

Service concession arrangements of euro 32 million primarilypertained to foreign gas distribution activities (euro 3,690million, of which euro 3,618 million in Italy at December 31,2011). The decrease of euro 3,658 million was essentially aconsequence of the deconsolidation of Snam (euro 3,716 million).

Other intangible assets with finite useful lives of euro 362million decreased by euro 1,060 million due to impairment lossesrecorded at intangible assets in the Gas & Power segment. Aloss of euro 774 million (euro 511 million net of tax effect) wasrecorded on the customer relationship which was recognized uponthe business combination of Distrigas NV (now Eni Gas & PowerNV) and then allocated to the European market CGU. The impairmentreview to test the recoverability of the book value of such CGUbrought to a lower value-in-use which was partly attributed tosaid customer relationship. In particular, the driver of theimpairments was affected by a continuing loss of customers inBenelux, primarily in the wholesaler segment, considering thereduced profitability outlook in the light of continuing demandweakness, rising competitive pressure and oversupplies, asdescribed below in the commentary about the impairment lossattributed to the European market CGU. The residual book 

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value of the customer relationship amounted to euro 168million (euro 111 million net of taxes) at the balance sheet dateand will continue being amortized in accordance to the supplycontract having the longest term (19 years at inception). Animpairment loss of euro 256 million was recorded to write off thebook value of an option to develop an offshore storage facilityfor commercial modulation of gas in the British North Sea, whichwas recognized upon the acquisition of Eni Hewett Ltd, driven bycontinuing weakness in the European gas scenario.

Other intangible assets also comprised: (i) royalties for theuse of licenses by Versalis SpA amounting to euro 56 million(euro 60 million at December 31, 2011); and (ii) estimated costsfor Eni’s social responsibility projects in relation to oildevelopment programs in Val d’Agri and in North Adriaticarea connected to mineral rights under concession for euro 44million (euro 50 million at December 31, 2011) followingcommitments made with the Basilicata Region, the Emilia RomagnaRegion and the Province and Municipality of Ravenna.

The main amortization rates used were as follows:

| (%)                                                        |   |   |   |   |   |   |   |   |   |
|------------------------------------------------------------|--------|--------|--------|--------|--------|--------|--------|--------|--------|
| Exploration expenditures                                   |   |   |   |   | 14     |   | -      | 33     |   |
| Industrial patents and        intellectual property rights |   |   |   |   | 20     |   | -      | 33     |   |
| Concessions, licenses, trademarks and similar        items |   |   |   |   | 3      |   | -      | 33     |   |
| Service concession        arrangements                     |   |   |   |   | 2      |   | -      | 4      |   |
| Other intangible assets                                    |   |   |   |   | 4      |   | -      | 25     |   |

Impairment losses of intangible assets with indefinite usefullife (goodwill) amounted to euro 1,347 million and pertained tothe Gas & Power segment.

Changes in the scope of consolidation of intangible assetswith indefinite useful life (goodwill) of euro 216 millioncomprised the deconsolidation of Snam Group following the loss ofcontrol (euro 314 million) and the inclusion of Nuon Belgium NV(now merged in Eni Gas & Power NV) and Nuon Power GenerationWalloon NV (now Eni Power Generation NV) following the 100%acquisition (euro 98 million).

The carrying amount of goodwill at the end of the year waseuro 2,461 million (euro 4,023 million at December 31, 2011) netof cumulative impairments amounting to euro 2,075 million (euro726 million at December 31, 2011). The break-down of goodwill byoperating segment is as follows:

| (euro million) |   | **Dec. 31, 2011** |   | **Dec. 31, 2012** |
|----------------|--------|-------------------|--------|-------------------|
|           |   |                   |   |                   |

| Gas & Power                       |   | 2,531     |   | 1,286     |
|---------------------------------------|--------|-----------|--------|-----------|
| Engineering        & Construction |   | 749       |   | 750       |
| Exploration & Production          |   | 270       |   | 265       |
| Refining        & Marketing       |   | 159       |   | 160       |
| Other activities - Snam (a)           |   | 314       |   |      |
|                                  |   | **4,023** |   | **2,461** |
|                                  |   |           |   |           |

|    |    |                                                                                                                                                        |
|--------------|--------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| (a)          |    | Goodwill as        of December 31, 2011, pertaining to the segment Other        activities - Snam has been reclassified from the Gas        & Power segment. |

Goodwill acquired through business combinations has beenallocated to the cash generating units ("CGUs") thatare expected to benefit from the synergies of the acquisition.The CGUs of the Gas & Power segment are represented by suchcommercial business units whose cash flows are largelyinterdependent and therefore benefit from acquisition synergies.The recoverable amounts of the CGUs are determined by discountingthe future cash flows deriving from the continuing use of theCGUs and, if significant and reasonably determinable, the cashflows deriving from their disposal at the end of the useful life.For the determination of the cash flows see note 14 –Property, plant and equipment.

Values-in-use are determined by discounting post-tax cashflows at a rate which corresponds: (i) in Exploration &Production, Refining & Marketing and Chemical segments to theCompany’s weighted average cost of capital net of the riskfactors attributable to Saipem and the Gas & Power segmentwhich are assessed on a stand alone basis. Then the discountrates are adjusted to factor in risks specific to each Country ofactivity (adjusted post-tax WACC). In 2012, the adjusted post-taxrates used for assessing values-in-use marginally decreased fromthe previous year reflecting a reduction in the financialparameters used for assessing the cost of capital: cost ofborrowings to Eni determined by expected trends for borrowingspreads and management’s estimates about the composition ofthe Company’s finance debt and reduced risk-free yieldsreflecting an expected decline in the risk premium of Italy. 

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Those positive factors were partially absorbed by theincreased weight of net equity in the determination of the costof capital to the Group as the Board of Directors has reassessedthe optimal mix between internally-generated funds versus thirdparties borrowings following the divestment of Snam. It is worthmentioning that the increased equity risk of the Eni share due tothe divestment of a business with low volatility had no impact onthe assessment of the cost of capital used for the impairmentevaluations in the Exploration & Production, Refining &Marketing and Chemical segments. This conclusion is underpinnedby the fact that in the past management adopted discount rateswhich excluded the mitigating effect of the lower volatility ofSnam in the Eni’s portfolio. In 2012, the adjusted WACC usedfor impairment test purposes ranged from 7.2% to 13.0%; and (ii)the impairment test rate for the Gas & Power segment wasestimated on the basis of a sample of comparable companies in theutility industry. The impairment test rate for the Engineering& Construction segment was derived from market data. Ratesused in the Gas & Power segment were adjusted to take intoconsideration risks specific to each Country of activity, whilerates used in the Engineering & Construction segment did notreflect any Country risks as most of the Company assets are notpermanently located in a specific Country. Rates for the Gas& Power segment ranged from 6.9% to 8.5%, substantiallyunchanged from the previous year. In the Engineering &Construction segment, the discount rate was 7.8%, with a decreaseof 0.7 percentage points from the previous year due to a lowerequity risk.

Post-tax cash flows and discount rates were adopted as theyresulted in an assessment that substantially approximated apre-tax assessment.

Goodwill has been allocated to the following CGUs:

**Gas & Power segment**

| (euro million) |   | **Dec. 31, 2011** |   | **Dec. 31, 2012** |
|----------------|--------|-------------------|--------|-------------------|
|           |   |                   |   |                   |

| Domestic gas market          |   | 767       |   | 767       |
|------------------------------|--------|-----------|--------|-----------|
| Foreign        gas market    |   | 1,763     |   | 519       |
| *- of which European market* |   | *1,668*   |   | *511*     |
| Other                        |   | 1         |   |      |
|                         |   | **2,531** |   | **1,286** |
|                         |   |           |   |           |

Goodwill allocated to the CGU domestic gas market wasrecognized upon the buy-out of Italgas SpA minorities in 2003through a public offering (euro 706 million). This CGU engages insupplying gas to residential customers and small businesses. Theimpairment review performed at the balance sheet date confirmedthe recoverability of the carrying amount of that CGU, includingthe allocated goodwill.

Goodwill allocated to the CGU European Market was mainlyrecognized upon the purchase price allocations in the businesscombinations mainly of Distrigas NV (now Eni Gas & Power NV)in Belgium and other smaller entities (Altergaz SA, now Eni Gas& Power France SA in France) in previous years and, inJanuary 2012, the 100% acquisition of Nuon Belgium NV (now mergedin Eni Gas & Power NV) and Nuon Power Generation Walloon NV(now Eni Power Generation NV), companies marketing gas andelectricity mainly to residential and professional customers inBelgium (euro 98 million). The CGU European Market comprises gasmarketing activities managed by the companies acquired and gasmarketing activities managed directly or indirectly by the Gas& Power Division of the parent company Eni SpA (North-WestEurope area, France, Germany, Benelux, United Kingdom,Switzerland and Austria). Those business units jointly benefitedfrom the business combination synergies. In performing theimpairment review of the recoverability of the CGU carryingamount at the balance sheet date, management recognized animpairment loss amounting to euro 1,255 million considering areduced profitability outlook and fundamental modificationspointing to a higher cyclicality of the gas business.

The key assumptions adopted in assessing future cash flowprojections of both the CGUs Domestic Market and European Marketincluded marketing margins, forecast sales volumes, the discountrate and the growth rates adopted to determine the terminalvalue. Information on these drivers was derived from thefour-year plan approved by the Company’s top managementwhich reduced with respect to past reviews the projected returnsand cash flows particularly in the European Market, driven byexpectations for continuing demand weakness on the back of thecurrent economic downturn and rising competitive pressures. TheEuropean Market CGU is expected to be negatively affected bydeclining marketing margins due to continuing weak trends in spotprices of gas against which selling prices in the Europeanmarkets are benchmarked, and the projections in 2013 of negativespreads towards the oil-linked costs of gas supplies. Otherelements of risk are tied with ongoing development in pricingregulation in the retail segment across several Europeancountries driven by growing pressure by administrativeauthorities. In the light of the expected trends in the gasmarket, management planned to renegotiate the economic terms andflexibility conditions at the Company’s main long-termsupply contracts. The expected results of these 

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renegotiations are factored in the economic and financialprojections of the four-year plan adopted by the management forthe gas business. For the European market CGU, management is nowassuming in the updated plan with respect to the previous plan:(i) a reduction of 33% on average in unit marketing margins usedto assess the European market CGU in the four-year period of theplan and a one-third reduction in unit marketing margins used inthe perpetuity to assess the terminal value of the CGU on thebasis of the business cyclicality; (ii) a decline of 3% in salesvolumes over the plan period; (iii) a slightly lower discountrate; and (iv) to assess the terminal value, a growth rate forthe long period of the perpetuity of the last-year equal to zero,unchanged from previous assumptions.

Value in use of the CGU European Market was assessed bydiscounting the associated post-tax cash flows at a post-tax rateof 7.3% corresponding to the pre-tax rate of 12.0% (7.5% and9.3%, respectively in 2011). Value-in-use of the CGU ItalianMarket was assessed by discounting the associated post-tax cashflows at a post-tax rate of 6.9% corresponding to the pre-taxrate of 14.0% (7.0% and 13.1%, respectively in 2011).

The excess of the recoverable amount of the CGU domestic gasmarket over its carrying amount including the allocated portionof goodwill (headroom) amounting to euro 549 million would bereduced to zero under each of the following alternativehypothesis: (i) a decrease of 32.3% on average in the projectedcommercial margins; (ii) a decrease of 32.3% on average in theprojected sales volumes; (iii) an increase of 8.2 percentagepoints in the discount rate; and (iv) a negative nominal growthrate of 13.2%. The recoverable amount of the CGU and the relevantsensitivity analysis were calculated solely on the basis ofretail margins, thus excluding wholesale and business clientmargins (industrial, thermoelectric and others).

Furthermore, Eni recorded impairments of the goodwillallocated to marginal activities of the gas segment (Tigáz inHungary, Adriaplin in Slovenia and other subsidiaries inArgentina) as a consequence of the lack of profitabilityprospects in the relevant local markets due to tariff revisionsand other factors (euro 44 million) and, as well, of the Hewettproject in the North Sea due to the drivers described above (euro48 million).

**Engineering & Construction segment**

| (euro million) |   | **Dec. 31, 2011** |   | **Dec. 31, 2012** |
|----------------|--------|-------------------|--------|-------------------|
|           |   |                   |   |                   |

| Offshore E&C |   | 415     |   | 415     |
|------------------|--------|---------|--------|---------|
| Onshore E&C  |   | 315     |   | 316     |
| Other            |   | 19      |   | 19      |
|             |   | **749** |   | **750** |
|             |   |         |   |         |

The segment goodwill of euro 750 million was mainly recognizedfollowing the acquisition of Bouygues Offshore SA, now Saipem SA(euro 710 million) and allocated to the CGUs Offshore E&C andOnshore E&C. The impairment review performed at the balancesheet date confirmed the recoverability of the carrying amountsof both those CGUs, including the allocated portions of goodwill.

The key assumptions adopted for assessing the recoverableamounts of those two CGUs which exceeded their respectivecarrying amounts related to operating results, the discount rateand the growth rates adopted to determine the terminal value.Information on those drivers were collected from thefour-year-plan approved by the Company’s top management,while the terminal value was estimated by using a perpetualnominal growth rate of 2% applied to the cash flow of the lastyear in the four-year plan normalized. Value in use of both CGUswas assessed by discounting the associated post-tax cash flows ata post-tax rate of 7.8% (8.5% in 2011) which corresponds to thepre-tax rate of 9.9% and 10.7% for the Offshore E&C businessunit and the Onshore E&C one, respectively (11.1% and 12.1%,respectively in 2011). The headroom of the Offshore E&Cbusiness unit of euro 3,224 million would be reduced to zerounder each of the following alternative changes in the abovementioned assumptions: (i) a decrease of 44% in the operatingresult of the four-year plan; (ii) an increase of about 4percentage points in the discount rate; and (iii) negative realgrowth rate. Changes in each of the assumptions that would causethe headroom of the Onshore E&C business unit to be reducedto zero are greater than those applicable to the Offshore E&Cconstruction CGU described above.

The Exploration & Production and the Refining &Marketing segments tested their goodwill, yielding the followingresults: (i) in the Exploration & Production segment withgoodwill amounting to euro 265 million, management believes thatthere are no reasonably possible changes in the pricingenvironment and production/cost profiles that would cause theheadroom of the relevant CGUs to be reduced to zero. Goodwillmainly refers to the portion of the purchase price that was notallocated to proved or unproved properties in the businesscombinations Lasmo, Burren Energy (Congo) and First Calgaryexecuted in previous reporting periods; and (ii) in the Refining 

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& Marketing segment goodwill amounted to euro 160million at the balance sheet date. Goodwill amounting to euro 141million pertained to retail networks acquired in previous yearsin Austria, Czech Republic, Hungary and Slovakia for whichprofitability expectations have remained unchanged from theprevious-year impairment review and marginal lines of business inItaly and Europe for euro 19 million.

**17 Investments**

**Investments accounted for using the equity method**

| (euro million) |   | **Book amount at the        beginning of the year** |   | **Additions** |   | **Divestments and        reimbursements** |   | **Share of profit of        equity-accounted investments** |   | **Share of loss of        equity-accounted investments** |   | **Deduction for dividends** |   | **Changes in the scope of        consolidation** |   | **Currency translation        differences** |   | **Other changes** |   | **Book amount at the end        of the year** |
|----------------|--------|-----------------------------------------------------|--------|---------------|--------|-------------------------------------------|--------|------------------------------------------------------------|--------|----------------------------------------------------------|--------|-----------------------------|--------|--------------------------------------------------|--------|---------------------------------------------|--------|-------------------|--------|-----------------------------------------------|
|           |   |                                                     |   |               |   |                                           |   |                                                            |   |                                                          |   |                             |   |                                                  |   |                                             |   |                   |   |                                               |

| **December 31, 2011**                                           |   |      |   |   |    |   |   |     |   |   |    |   |   |     |   |   |     |   |   |     |   |   |    |   |   |     |   |   |      |   |
|-----------------------------------------------------------------|--------|-----------|--------|--------|---------|--------|--------|----------|--------|--------|---------|--------|--------|----------|--------|--------|----------|--------|--------|----------|--------|--------|---------|--------|--------|----------|--------|--------|-----------|--------|
| Investments        in unconsolidated entities controlled by Eni |   | 256       |   |   | 8       |   |   | (19      | )      |   | 35      |   |   | (7       | )      |   | (39      | )      |   |     |   |   | 4       |   |   | (16      | )      |   | 222       |   |
| Joint ventures                                                  |   | 2,735     |   |   | 93      |   |   | (35      | )      |   | 376     |   |   | (68      | )      |   | (276     | )      |   |     |   |   | 45      |   |   | (268     | )      |   | 2,602     |   |
| Associates                                                      |   | 2,677     |   |   | 134     |   |   | (34      | )      |   | 267     |   |   | (31      | )      |   | (138     | )      |   |     |   |   | 45      |   |   | 99       |   |   | 3,019     |   |
|                                                            |   | **5,668** |   |   | **235** |   |   | **(88**  | **)**  |   | **678** |   |   | **(106** | **)**  |   | **(453** | **)**  |   |     |   |   | **94**  |   |   | **(185** | **)**  |   | **5,843** |   |
| **December        31, 2012**                                    |   |      |   |   |    |   |   |     |   |   |    |   |   |     |   |   |     |   |   |     |   |   |    |   |   |     |   |   |      |   |
| Investments in unconsolidated entities        controlled by Eni |   | 222       |   |   | 6       |   |   | (11      | )      |   | 37      |   |   | (4       | )      |   | (36      | )      |   | 29       |   |   | (2      | )      |   | (26      | )      |   | 215       |   |
| Joint        ventures                                           |   | 2,602     |   |   | 185     |   |   | (1       | )      |   | 319     |   |   | (78      | )      |   | (265     | )      |   | (473     | )      |   | (23     | )      |   | (19      | )      |   | 2,247     |   |
| Associates                                                      |   | 3,019     |   |   | 139     |   |   | (321     | )      |   | 170     |   |   | (151     | )      |   | (129     | )      |   | (48      | )      |   | (32     | )      |   | (844     | )      |   | 1,803     |   |
|                                                            |   | **5,843** |   |   | **330** |   |   | **(333** | **)**  |   | **526** |   |   | **(233** | **)**  |   | **(430** | **)**  |   | **(492** | **)**  |   | **(57** | **)**  |   | **(889** | **)**  |   | **4,265** |   |
|                                                            |   |           |        |   |         |        |   |          |        |   |         |        |   |          |        |   |          |        |   |          |        |   |         |        |   |          |        |   |           |        |

Additions of euro 330 million mainly related to a capitalcontribution made to Angola LNG Ltd (euro 108 million) which iscurrently engaged in building a liquefaction plant in order tomonetize Eni’s gas reserves in that Country (Eni’sinterest in the project being 13.6%). Other capital contributionsrelated to the subscription of the new companies Gas Bridge 1 BVand Gas Bridge 2 BV by Snam SpA for a total amount of euro 133million.

Divestments and reimbursements of euro 333 million related tothe sale of 5% of the share capital of Galp Energia SGPS SA toAmorim Energia BV with a book value of euro 294 million. Furtherinformation about this transaction is disclosed in the commentaryof other changes.

Eni’s share of profit of equity-accounted investments anddividend decrease pertained to the following entities:

| (euro        million) |    | **Dec. 31, 2011** |         | **Dec. 31, 2012** |
|-----------------------|--------------|-------------------|--------------|-------------------|
|             |    |                   |    |                   |

| **  ** | **  ** | **Share of profit of        equity-accounted investments** | **  ** | **Deduction for        dividends** | **  ** | **Eni’s interest**        (%) | **  ** | **Share of profit of        equity-accounted investments** | **  ** | **Deduction for        dividends** | **  ** | **Eni’s interest**(%) |
|------------------|------------------|------------------------------------------------------------|------------------|------------------------------------|------------------|------------------------------------|------------------|------------------------------------------------------------|------------------|------------------------------------|------------------|----------------------------|
|             |             |                                                            |             |                                    |             |                                    |             |                                                            |             |                                    |             |                            |

| Unión Fenosa Gas SA                    |   | 152     |   | 148     |   | 50.00  |   | 149     |   | 108     |   | 50.00  |
|---------------------------------------------|--------|---------|--------|---------|--------|--------|--------|---------|--------|---------|--------|--------|
| Galp        Energia SGPS SA (a)             |   | 144     |   | 39      |   | 33.34  |   | 80      |   | 55      |   | 24.34  |
| United Gas Derivatives Co                   |   | 49      |   | 44      |   | 33.33  |   | 68      |   | 60      |   | 33.33  |
| Blue        Stream Pipeline Co BV           |   | 34      |   | 9       |   | 50.00  |   | 39      |   | 44      |   | 50.00  |
| Unimar Llc                                  |   | 32      |   |    |   | 50.00  |   | 38      |   | 78      |   | 50.00  |
| Eni BTC        Ltd                          |   | 28      |   | 34      |   | 100.00 |   | 30      |   | 31      |   | 100.00 |
| Supermetanol CA                             |   | 17      |   | 25      |   | 34.51  |   | 18      |   | 15      |   | 34.51  |
| Saipon Snc                                  |   | 31      |   |    |   | 60.00  |   | 10      |   |    |   | 60.00  |
| PetroSucre SA                               |   | 37      |   |    |   | 26.00  |   | 3       |   |    |   | 26.00  |
| Azienda        Energia e Servizi Torino SpA |   | 23      |   | 26      |   | 49.00  |   |    |   |    |   |   |
| Other investments                           |   | 131     |   | 128     |   |   |   | 91      |   | 39      |   |   |
|                                        |   | **678** |   | **453** |   |   |   | **526** |   | **430** |   |   |
|                                        |   |         |   |         |   |        |   |         |   |         |   |        |

|   |   |                                                                                                                    |
|--------|--------|-------------------------------------------------------------------------------------------------------------------------|
| (a)    |   | The        investment was accounted for under the equity method        until the date of loss of significant influence. |

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Eni’s share of losses of equity-accounted investmentsrelated to the following entities:

| (euro million) |   | **Dec. 31, 2011** |   | **Dec. 31, 2012** |
|----------------|--------|-------------------|--------|-------------------|
|           |   |                   |   |                   |

|   |   | **Share of loss of equity-accounted        investments** |   | **Eni’s interest** (%) |   | **Share of loss of equity-accounted        investments** |   | **Eni’s interest**(%) |
|--------|--------|----------------------------------------------------------|--------|-----------------------------|--------|----------------------------------------------------------|--------|----------------------------|
|   |   |                                                          |   |                             |   |                                                          |   |                            |

| EnBW Eni Verwaltungsgesellschaft mbH      |   | 30      |   | 50.00  |   | 82      |   | 50.00  |
|-------------------------------------------|--------|---------|--------|--------|--------|---------|--------|--------|
| Zagoryanska        Petroleum BV           |   |    |   |   |   | 50      |   | 60.00  |
| Angola LNG Ltd                            |   |    |   |   |   | 35      |   | 13.60  |
| Distribuidora        de Gas del Centro SA |   |    |   |   |   | 12      |   | 31.35  |
| Pokrovskoe Petroleum BV                   |   | 9       |   | 30.00  |   | 8       |   | 30.00  |
| Artic        Russia BV                    |   | 7       |   | 60.00  |   | 7       |   | 60.00  |
| Enirepsa Gas Ltd                          |   | 14      |   | 50.00  |   | 6       |   | 50.00  |
| Inversora        de Gas del Centro SA     |   |    |   |   |   | 5       |   | 25.00  |
| PetroJunin SA                             |   |    |   |   |   | 5       |   | 40.00  |
| South        Stream Transport BV          |   |    |   |   |   | 5       |   | 20.00  |
| GreenStream BV                            |   | 23      |   | 50.00  |   | 1       |   | 50.00  |
| CARDÓN IV        SA                  |   | 12      |   | 50.00  |   |    |   |   |
| Other investments                         |   | 11      |   |   |   | 17      |   |   |
|                                      |   | **106** |   |   |   | **233** |   |   |
|                                      |   |         |   |        |   |         |   |        |

Losses at equity-accounted investments were driven by: (i) areduced profitability outlook at EnBW Eni VerwaltungsgesellschaftmbH which led to write down the expected synergies deriving fromthe business combination (euro 82 million); (ii) a downwardreserve revision of a joint project in the Ukraine at ZagoryanskaPetroleum BV (euro 50 million); (iii) non-capitalizableexploration and pre-production expenses at Angola LNG Ltd (euro35 million); and (iv) reduced expectations for a tariff increasein local markets driving down future cash flows at Distribuidorade Gas del Centro SA (euro 12 million) and Inversora de Gas delCentro SA (euro 5 million).

Changes in the scope of consolidation of equity-accountedinvestments of euro 521 million related to deconsolidation ofSnam.

Other changes of euro 889 million mainly related to the factthat the book value of Galp Energia SGPS SA amounting to euro1,669 million was reclassified to other investments due to lossof significant influence on the investees as a consequence of thesale of 5% of the share capital of the entities to Amorim EnergiaBV, thus sanctioning Eni’s exit from the currentshareholders’ agreement governing Galp. The transaction wasexecuted on July 20, 2012 and involved the sale of 41.5 millionshares of Galp at a price of euro 14.25 a share, for a totalconsideration of euro 582 million that correspond to a book valueof euro 294 million. Eni’s interest in Galp Energiadecreased to 28.34% and was stated as an available-for-salefinancial asset. On the other hand, prior to the describedtransaction, Eni had recorded an increase in the book value ofGalp amounting to euro 835 million driven by a capital increasemade by Galp’s subsidiary Petrogal whereby a new shareholdersubscribed for its share of the capital increase by contributinga cash amount which was fairly in excess of the net book value ofthe interest acquired.

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List of equity-accounted investments: 

| (euro        million) | **Dec. 31, 2011** |   | **Dec. 31, 2012** |
|-----------------------|-------------------|--------|-------------------|
|                  |                   |   |                   |

|   | **Net carrying amount** |   | **Number of shares held** |   | **Eni’s interest**(%) |   | **Net carrying amount** |   | **Number of shares held** |   | **Eni’s interest**(%) |
|--------|-------------------------|--------|---------------------------|--------|----------------------------|--------|-------------------------|--------|---------------------------|--------|----------------------------|
|   |                         |   |                           |   |                            |   |                         |   |                           |   |                            |

| **Investments in unconsolidated entities        controlled by Eni** |   |      |   |          |   |   |   |      |   |          |   |   |
|---------------------------------------------------------------------|--------|-----------|--------|---------------|--------|--------|--------|-----------|--------|---------------|--------|--------|
| Eni BTC        Ltd                                                  |   | 100       |   | 34,000,000    |   | 100.00 |   | 97        |   | 34,000,000    |   | 100.00 |
| Other investments (*)                                               |   | 122       |   |          |   |   |   | 118       |   |          |   |   |
|                                                                |   | **222**   |   |          |   |   |   | **215**   |   |          |   |   |
| **Joint ventures**                                                  |   |      |   |          |   |   |   |      |   |          |   |   |
| Unión        Fenosa Gas SA                                     |   | 465       |   | 273,100       |   | 50.00  |   | 507       |   | 273,100       |   | 50.00  |
| Blue Stream Pipeline Co BV                                          |   | 476       |   | 1,000         |   | 50.00  |   | 461       |   | 1,000         |   | 50.00  |
| Artic        Russia BV                                              |   | 428       |   | 12,000        |   | 60.00  |   | 436       |   | 12,000        |   | 60.00  |
| Raffineria di Milazzo ScpA                                          |   | 130       |   | 175,000       |   | 50.00  |   | 132       |   | 175,000       |   | 50.00  |
| Eteria        Parohis Aeriou Thessalonikis AE                       |   | 130       |   | 116,546,500   |   | 49.00  |   | 131       |   | 116,546,500   |   | 49.00  |
| GreenStream BV                                                      |   | 128       |   | 100,000,000   |   | 50.00  |   | 125       |   | 100,000,000   |   | 50.00  |
| CARDÓN IV        SA                                            |   | 74        |   | 6,455         |   | 50.00  |   | 73        |   | 6,455         |   | 50.00  |
| Unimar Llc                                                          |   | 111       |   | 50            |   | 50.00  |   | 70        |   | 50            |   | 50.00  |
| Supermetanol        CA                                              |   | 59        |   | 49,000        |   | 34.51  |   | 62        |   | 49,000        |   | 34.51  |
| Eteria Parohis Aeriou Thessalias AE                                 |   | 45        |   | 38,445,008    |   | 49.00  |   | 46        |   | 38,445,008    |   | 49.00  |
| Petromar        Lda                                                 |   | 23        |   | 1             |   | 70.00  |   | 42        |   | 1             |   | 70.00  |
| Est Reti Elettriche SpA (ex Est PiÓ SpA)                       |   | 30        |   | 2,940,000     |   | 70.00  |   | 12        |   | 1,221,500     |   | 70.00  |
| Saipon Snc                                                          |   | 30        |   | 12,000        |   | 60.00  |   | 9         |   | 12,000        |   | 60.00  |
| Azienda Energia e Servizi Torino SpA                                |   | 169       |   | 54,150,000    |   | 49.00  |   |      |   |          |   |   |
| Toscana        Energia SpA                                          |   | 159       |   | 70,304,854    |   | 48.08  |   |      |   |          |   |   |
| Zagoryanska Petroleum BV                                            |   | 32        |   | 10,800        |   | 60.00  |   |      |   | 10,800        |   | 60.00  |
| Other        investments (*)                                        |   | 113       |   |          |   |   |   | 141       |   |          |   |   |
|                                                                |   | **2,602** |   |          |   |   |   | **2,247** |   |          |   |   |
| **Associates**                                                      |   |      |   |          |   |   |   |      |   |          |   |   |
| Angola LNG Ltd                                                      |   | 1,008     |   | 1,141,284,004 |   | 13.60  |   | 1,060     |   | 1,279,887,652 |   | 13.60  |
| PetroSucre        SA                                                |   | 244       |   | 5,727,800     |   | 26.00  |   | 242       |   | 5,727,800     |   | 26.00  |
| EnBW Eni Verwaltungsgesellschaft mbH                                |   | 237       |   | 1             |   | 50.00  |   | 163       |   | 1             |   | 50.00  |
| United Gas        Derivatives Co                                    |   | 102       |   | 950,000       |   | 33.33  |   | 106       |   | 950,000       |   | 33.33  |
| Fertilizantes Nitrogenados de Oriente CEC                           |   | 68        |   | 1,933,662,121 |   | 20.00  |   | 68        |   | 1,933,662,121 |   | 20.00  |
| Rosetti        Marino SpA                                           |   | 25        |   | 800,000       |   | 20.00  |   | 29        |   | 800,000       |   | 20.00  |
| Termica di Milazzo Srl                                              |   | 26        |   | 9,296,400     |   | 40.00  |   | 23        |   | 9,296,400     |   | 40.00  |
| Distribuidora        de Gas del Centro SA                           |   | 31        |   | 50,303,329    |   | 31.35  |   | 14        |   | 50,303,329    |   | 31.35  |
| Galp Energia SGPS SA                                                |   | 1,103     |   | 276,472,161   |   | 33.34  |   |      |   |          |   |   |
| ACAM Gas        SpA                                                 |   | 48        |   | 3,336,410     |   | 49.00  |   |      |   |          |   |   |
| Gaz de Bordeaux SAS                                                 |   | 26        |   | 257,576       |   | 34.00  |   |      |   |          |   |   |
| Other        investments (*)                                        |   | 101       |   |          |   |   |   | 98        |   |          |   |   |
|                                                                |   | **3,019** |   |          |   |   |   | **1,803** |   |          |   |   |
|                                                                |   | **5,843** |   |          |   |   |   | **4,265** |   |          |   |   |
|                                                                |   |           |   |               |   |        |   |           |   |               |   |        |

|    |    |                                                                            |
|--------------|--------------|--------------------------------------------------------------------------------------|
| (*)          |    | Each        individual amount included herein was lower than euro 25        million. |

Carrying amounts of investments in unconsolidated entitiescontrolled by Eni, joint ventures and associates, includeddifferences between the purchase price and the corresponding netequity amounting to euro 275 million, of which euro 195 millionreferred to Unión Fenosa Gas SA (goodwill) and euro 80 millionto EnBW Eni Verwaltungsgesellschaft mbH (of which goodwill euro16 million).

The table below sets out the provisions for losses included inthe provisions for contingencies of euro 176 million (euro 151million at December 31, 2011), primarily related to the followingequity-accounted investments:

| (euro million) |   | **Dec. 31, 2011** |   | **Dec. 31, 2012** |
|----------------|--------|-------------------|--------|-------------------|
|           |   |                   |   |                   |

| Industria Siciliana Acido Fosforico - ISAF - SpA        (in liquidation) |   | 100     |   | 102     |
|--------------------------------------------------------------------------|--------|---------|--------|---------|
| Société        Centrale Electrique du Congo SA                 |   |    |   | 19      |
| Southern Gas Constructors Ltd                                            |   | 11      |   | 10      |
| Charville        - Consultores e Serviços Lda                       |   | 7       |   | 7       |
| Other investments                                                        |   | 33      |   | 38      |
|                                                                     |   | **151** |   | **176** |
|                                                                     |   |         |   |         |

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**Other investments**

| (euro        million) |   | **Net book amount at the        beginning of the year** |   | **Additions** |   | **Divestments** |   | **Valuation at fair value** |   | **Currency translation        differences** |   | **Other changes** |   | **Value at the end of the        year** |   | **Gross book amount at the        end of the year** |   | **Accumulated impairment        charges** |
|-----------------------|--------|---------------------------------------------------------|--------|---------------|--------|-----------------|--------|-----------------------------|--------|---------------------------------------------|--------|-------------------|--------|-----------------------------------------|--------|-----------------------------------------------------|--------|-------------------------------------------|
|                  |   |                                                         |   |               |   |                 |   |                             |   |                                             |   |                   |   |                                         |   |                                                     |   |                                           |

| **December 31, 2011**                                           |   |    |   |   |   |   |   |     |   |   |      |   |   |   |   |   |      |   |   |      |   |   |      |   |   |   |
|-----------------------------------------------------------------|--------|---------|--------|--------|--------|--------|--------|----------|--------|--------|-----------|--------|--------|--------|--------|--------|-----------|--------|--------|-----------|--------|--------|-----------|--------|--------|--------|
| Investments        in unconsolidated entities controlled by Eni |   | 29      |   |   | 2      |   |   |     |   |   |      |   |   | (1     | )      |   | (27       | )      |   | 3         |   |   | 3         |   |   |   |
| Associates                                                      |   | 10      |   |   |   |   |   |     |   |   |      |   |   | (10    | )      |   | 13        |   |   | 13        |   |   | 21        |   |   | 8      |
| Other        investments                                        |   | 383     |   |   | 8      |   |   |     |   |   |      |   |   | 7      |   |   | (15       | )      |   | 383       |   |   | 390       |   |   | 7      |
|                                                            |   | **422** |   |   | **10** |   |   |     |   |   |      |   |   | **(4** | **)**  |   | **(29**   | **)**  |   | **399**   |   |   | **414**   |   |   | **15** |
| **December        31, 2012**                                    |   |    |   |   |   |   |   |     |   |   |      |   |   |   |   |   |      |   |   |      |   |   |      |   |   |   |
| Investments in unconsolidated entities        controlled by Eni |   | 3       |   |   | 12     |   |   |     |   |   |      |   |   |   |   |   |      |   |   | 15        |   |   | 16        |   |   | 1      |
| Associates                                                      |   | 13      |   |   |   |   |   | (13      | )      |   |      |   |   |   |   |   | 12        |   |   | 12        |   |   | 12        |   |   |   |
| Other investments                                               |   | 383     |   |   | 49     |   |   | (503     | )      |   | 2,528     |   |   | (3     | )      |   | 2,604     |   |   | 5,058     |   |   | 5,059     |   |   | 1      |
|                                                            |   | **399** |   |   | **61** |   |   | **(516** | **)**  |   | **2,528** |   |   | **(3** | **)**  |   | **2,616** |   |   | **5,085** |   |   | **5,087** |   |   | **2**  |
|                                                            |   |         |        |   |        |        |   |          |        |   |           |        |   |        |        |   |           |        |   |           |        |   |           |        |   |        |

Investments in unconsolidated entities controlled by Eni andassociates are stated at cost net of impairment losses. Otherinvestments, for which fair value cannot be reliably determined,were recognized at cost and adjusted for impairment losses.

Additions of euro 61 million mainly related to the acquisitionof a 15% interest in the share capital of Novamont SpA for euro35 million and of the 5.2% of the share capital of Genomatica Incfor euro 12 million and to a capital contribution made toServizio Fondo Bombole Metano SpA for euro 12 million.

Divestments of euro 516 million related for euro 358 millionto the sale through an accelerated book-building procedure withinstitutional investors of 4% of the share capital of GalpEnergia SGPS SA for a total consideration of euro 381 million anda gain on divestment of euro 23 million (further information isdisclosed in the next paragraph) and to the sale ofInterconnector (UK) Ltd for euro 136 million.

Valuation at fair value of euro 2,528 million related to theinitial recognition and subsequent measurement at market pricesof the interests in Snam SpA (euro 1,465 million) and GalpEnergia SGPS SA (euro 1,063 million) that, as a consequence ofthe loss of control on Snam following the transaction with CassaDepositi e Prestiti (see note 31 – Discontinued operations,assets held for sale and liabilities directly associated withassets held for sale) and the loss of significant influence onGalp following Eni’s exit from the shareholders’ pact,were stated as financial investment in the item "Otherinvestments". The initial recognition corresponded to themarket prices recorded on the date of sale of control/significantinfluence which occurred on October 15, 2012 and July 20, 2012,respectively. The difference between the initial measurement atmarket prices and the book value of the underlying interests wasreported through profit. The subsequent changes in the marketprices of the share from the initial recognition to the balancesheet date were reported in comprehensive income, with theexception of the shares underlying convertible bonds whichchanges in market prices were reported through profit asmanagement elected to apply the fair value option provided by IAS39 in order to eliminate an accounting mismatch deriving from themeasurement at fair value through profit of the options embeddedin the convertible bonds. More explicitly: (i) at the dateof loss of control the residual interest in Snam amounted to683.9 million of shares equal to 20.23% of the share capitalwhich were initially recognized at a market fair value of euro2,394 million, calculated at the price of euro 3.5 a sharecurrent at the date of loss of control which resulted in arevaluation gain of euro 1,451 million reported as discontinuedoperation. The fair value option was applied to 288.7 millionshares underlying a convertible bond issued on January 15, 2013which resulted in a fair value gain through the income statementof euro 6 million reported as continuing operation following there-measurement at market fair value at the balance sheet date;positive changes in fair value of the residual interest in Snamof euro 8 million was recorded in other components ofcomprehensive income. At December 31, 2012, the residual interestin Snam, equal to 20.23% of the share capital, was stated at afair value of euro 2,408 million at the current market price ofeuro 3.52 a share; and (ii) at the date of loss ofEni’s significant influence the residual interest in Galpamounted to 235 million of shares equal to 28.34% of the sharecapital which were initially recognized at a market fair value ofeuro 2,534 million, measured at the market price of euro 10.78 ashare current at the date of loss of significance influence whichbrought to profit a revaluation gain of euro 865 million. OnNovember 27, 2012, through an accelerated book-buildingprocedure, Eni sold 33.2 million shares of Galp Energia,corresponding to 4% of its share capital at a price of euro 11.48a share with a gain of euro 23 million. The fair value option wasapplied to 66.3 million shares, equal to the 8% of share capitalof Galp, which were underlying a convertible bond issued at thesame time as the 4% sale. At December 31, 2012, the residualinterest in Galp of 201.84 million of shares equal to 24.34% ofthe share capital 

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was stated at a market value of euro 2,374 million at themarket price of euro 11.76 a share. The fair value option on partof the interest in Galp brought profit a gain of euro 65 millionrelating to the share underlying the convertible bond; a positivechange in market value at the residual interest in Galp wasbrought to other components of comprehensive income (euro 133million).

Other changes of euro 2,616 million related to thereclassification from investments accounted for using the equitymethod of Galp Energia SGPS SA for euro 1,669 million and thebook value of Snam SpA before fair value valuation for euro 943million.

The net carrying amount of other investments of euro 5,085million (euro 399 million at December 31, 2011) was related tothe following entities:

| (euro        million) | **Dec. 31, 2011** |   | **Dec. 31, 2012** |
|-----------------------|-------------------|--------|-------------------|
|                  |                   |   |                   |

|   | **Net carrying amount** |   | **Number of shares held** |   | **Eni’s interest**(%) |   | **Net carrying amount** |   | **Number of shares held** |   | **Eni’s interest**(%) |
|--------|-------------------------|--------|---------------------------|--------|----------------------------|--------|-------------------------|--------|---------------------------|--------|----------------------------|
|   |                         |   |                           |   |                            |   |                         |   |                           |   |                            |

| Investments in unconsolidated entities        controlled by Eni (*) |   | **3**   |   |        |   |   |   | **15**    |   |        |   |   |
|---------------------------------------------------------------------|--------|---------|--------|-------------|--------|--------|--------|-----------|--------|-------------|--------|--------|
| Associates                                                          |   | **13**  |   |        |   |   |   | **12**    |   |        |   |   |
| Other investments:                                                  |   |    |   |        |   |   |   |      |   |        |   |   |
| - Snam SpA                                                          |   |    |   |        |   |   |   | 2,408     |   | 683,936,947 |   | 20.23  |
| - Galp Energia SGPS SA                                              |   |    |   |        |   |   |   | 2,374     |   | 201,839,604 |   | 24.34  |
| - Nigeria        LNG Ltd                                            |   | 91      |   | 118,373     |   | 10.40  |   | 90        |   | 118,373     |   | 10.40  |
| - Darwin LNG Pty Ltd                                                |   | 73      |   | 213,995,164 |   | 10.99  |   | 65        |   | 213,995,164 |   | 10.99  |
| - Novamont        SpA                                               |   |    |   |        |   |   |   | 35        |   | 3,530       |   | 15.00  |
| - Interconnector (UK) Ltd                                           |   | 136     |   | 2,050,017   |   | 16.07  |   |      |   |        |   |   |
| - other        (*)                                                  |   | 83      |   |        |   |   |   | 86        |   |        |   |   |
|                                                                |   | **383** |   |        |   |   |   | **5,058** |   |        |   |   |
|                                                                |   | **399** |   |        |   |   |   | **5,085** |   |        |   |   |
|                                                                |   |         |   |             |   |        |   |           |   |             |   |        |

|    |    |                                                                            |
|--------------|--------------|--------------------------------------------------------------------------------------|
| (*)          |    | Each        individual amount included herein was lower than euro 25        million. |

Provisions for losses related to otherinvestments, included within the provisions for contingencies,amounted to euro 18 million (euro 21 million at December 31,2011) and were primarily in relation to the following entities:

| (euro million) |   | **Dec. 31, 2011** |   | **Dec. 31, 2012** |
|----------------|--------|-------------------|--------|-------------------|
|           |   |                   |   |                   |

| Caspian Pipeline Consortium R - Closed Joint        Stock Co |   | 16     |   | 14     |
|--------------------------------------------------------------|--------|--------|--------|--------|
| Other        investments                                     |   | 5      |   | 4      |
|                                                         |   | **21** |   | **18** |
|                                                         |   |        |   |        |

**Other information about investments**The following table summarizes key financial data, net toEni, as disclosed in the latest available financial statements ofunconsolidated entities controlled by Eni, joint ventures andassociates:

| (euro million) |   | **Dec. 31, 2011** |   | **Dec. 31, 2012** |
|----------------|--------|-------------------|--------|-------------------|
|           |   |                   |   |                   |

|   |   | **Unconsolidated entities controlled         by Eni** | ** ** | **Joint ventures** | ** ** | **Associates** | ** ** | **Unconsolidated entities controlled         by Eni** | ** ** | **Joint ventures** | ** ** | **Associates** |
|--------|--------|-------------------------------------------------------|------------|--------------------|------------|----------------|------------|-------------------------------------------------------|------------|--------------------|------------|----------------|
|   |   |                                                       |       |                    |       |                |       |                                                       |       |                    |       |                |

| Total assets              |   | 2,393 |   |   | 5,655 |   | 6,165 |   | 1,604 |   | 5,032 |   | 3,223 |
|---------------------------|--------|-------|--------|--------|-------|--------|-------|--------|-------|--------|-------|--------|-------|
| Total        liabilities  |   | 2,279 |   |   | 3,085 |   | 3,144 |   | 1,497 |   | 2,827 |   | 1,429 |
| Net sales from operations |   | 86    |   |   | 3,011 |   | 6,347 |   | 97    |   | 2,971 |   | 1,889 |
| Operating        profit   |   | (2    | )      |   | 484   |   | 316   |   | 5     |   | 475   |   | 259   |
| Net profit                |   | 41    |   |   | 299   |   | 234   |   | 39    |   | 237   |   | 170   |
|                      |   |       |        |   |       |   |       |   |       |   |       |   |       |

Total assets and liabilities of unconsolidatedcontrolled entities of euro 1,604 million and euro 1,497 million,respectively (euro 2,393 million and euro 2,279 million atDecember 31, 2011) pertained to entities acting assole operator in the management of oil and gas contracts foreuro 1,249 million and euro 1,249 million (euro 2,027 

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million and euro 2,027 million at December 31,2011). The residual amount pertained to not significant entitiesthat were excluded from the scope of consolidation for thereasons described in note 1 – Basis of presentation.

**18 Other financial assets**

| (euro million) |   | **Dec. 31, 2011** |   | **Dec. 31, 2012** |
|----------------|--------|-------------------|--------|-------------------|
|           |   |                   |   |                   |

| Receivables for financing operating activities |   | 1,516     |   | 1,160     |
|------------------------------------------------|--------|-----------|--------|-----------|
| Securities        held for operating purposes  |   | 62        |   | 69        |
|                                           |   | **1,578** |   | **1,229** |
|                                           |   |           |   |           |

Receivables for financing operating activities are stated netof the valuation allowance for doubtful accounts of euro 30million (euro 32 million at December 31, 2011).

Operating financing receivables of euro 1,160 million (euro1,516 million at December 31, 2011) primarily pertained to loansgranted by the Exploration & Production segment (euro 567million), the Gas & Power segment (euro 429 million) and theRefining & Marketing segment (euro 98 million) andreceivables for financial leasing for euro 21 million (euro 47million at December 31, 2011). Financing receivables granted tounconsolidated subsidiaries, joint ventures and associatesamounted to euro 642 million.

Receivables for financial leasing pertained to the disposal ofthe Belgian gas network by Finpipe GIE.

The following table shows principal receivable by maturitydate, which was obtained by summing future lease paymentreceivables discounted at the effective interest rate, interestand the nominal value of future lease receivables:

| (euro        million) |   | **Maturity range** |   |
|-----------------------|--------|--------------------|--------|
|                  |   |                    |   |

| **  ** | **  ** | **Within 12 months** | **  ** | **Between one         and five years** | **  ** | **Total** |
|------------------|------------------|----------------------|------------------|----------------------------------------|------------------|-----------|
|             |             |                      |             |                                        |             |           |

| Principal receivable                        |   | 26     |   | 21 |   | 47 |
|---------------------------------------------|--------|--------|--------|----|--------|----|
| Interests                                   |   |   |   | 3  |   | 3  |
| Undiscounted value of future lease payments |   | 26     |   | 24 |   | 50 |
|                                        |   |        |   |    |   |    |

Receivables with a maturity date within one year is disclosedamong current assets in the item trade receivables for operatingpurposes - current portion of long-term receivables in note 9– Trade and other receivables.

Receivables for financing operating activities in currenciesother than euro amounted to euro 999 million (euro 1,338 millionat December 31, 2011).

Receivables for financing operating activities due beyond fiveyears amounted to euro 624 million (euro 896 million at December31, 2011).

The valuation at fair value of financing receivables of euro1,217 million has been determined based on the present value ofexpected future cash flows discounted at rates ranging from 0.4%to 3.3% (0.7% and 3.1% at December 31, 2011).

Securities of euro 69 million (euro 62 million at December 31,2011), designated as held-to-maturity investments, are listedbonds issued by sovereign states (euro 65 million) and by theEuropean Investment Bank (euro 4 million). 

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The following table analyses securities per issuing entity:

|   |   | **Amortized cost**(euro million) |   | **Nominal value**(euro million) |   | **Fair value**(euro million) |   | **Nominal rate         of return**(%) |   | **Maturity date** |   | **Rating - Moody’s** |   | **Rating - S&P** |
|--------|--------|----------------------------------|--------|---------------------------------|--------|------------------------------|--------|---------------------------------------|--------|-------------------|--------|---------------------------|--------|----------------------|
|   |   |                                  |   |                                 |   |                              |   |                                       |   |                   |   |                           |   |                      |

| **Sovereign states**                |   |   |   |   |   |   |   |              |   |              |   |   |   |   |
|-------------------------------------|--------|--------|--------|--------|--------|--------|--------|-------------------|--------|-------------------|--------|--------|--------|--------|
| ***Fixed        rate bonds***       |   |   |   |   |   |   |   |              |   |              |   |   |   |   |
| Italy                               |   | 20     |   | 21     |   | 21     |   | from 3.75 to 4.75 |   | from 2013 to 2021 |   | Baa2   |   | BBB+   |
| Slovenia                            |   | 9      |   | 9      |   | 9      |   | from 3.42 to 4.88 |   | from 2013 to 2014 |   | Baa2   |   | A-     |
| ***Floating rate bonds***           |   |   |   |   |   |   |   |              |   |              |   |   |   |   |
| Italy                               |   | 12     |   | 12     |   | 12     |   |              |   | from 2014 to 2016 |   | Baa2   |   | BBB+   |
| Belgium                             |   | 7      |   | 7      |   | 7      |   |              |   | 2016              |   | Aa3    |   | AA     |
| France                              |   | 5      |   | 5      |   | 5      |   |              |   | 2014              |   | Aa1    |   | AA+    |
| Spain                               |   | 10     |   | 9      |   | 9      |   |              |   | from 2014 to 2015 |   | Baa3   |   | BBB-   |
| Slovakia                            |   | 2      |   | 2      |   | 2      |   |              |   | 2015              |   | A2     |   | A      |
| **Total sovereign states**          |   | **65** |   | **65** |   | **65** |   |              |   |              |   |   |   |   |
| **European        Investment Bank** |   | **4**  |   | **4**  |   | **4**  |   |              |   | 2018              |   | Aaa    |   | AAA    |
|                                |   | **69** |   | **69** |   | **69** |   |              |   |              |   |   |   |   |
|                                |   |        |   |        |   |        |   |                   |   |                   |   |        |   |        |

Securities with a maturity beyond five years amounted to euro12 million.

The valuation at fair value of financial securities hasresulted in marginal effects. The fair value of securities wasderived from quoted market prices.

Receivables with related parties are described in note 42– Transactions with related parties.

**19 Deferred tax assets**

Deferred tax assets are stated net of amounts of deferred taxliabilities that can be offset for euro 3,630 million (euro 4,045million at December 31, 2011).

| (euro million) | **Amount        at Dec. 31, 2011** |   | **Additions** |   | **Deductions** |   | **Changes in the scope of        consolidation** |   | **Currency translation        differences** |   | **Other changes** |   | **Amount         at Dec. 31, 2012** |
|----------------|------------------------------------|--------|---------------|--------|----------------|--------|--------------------------------------------------|--------|---------------------------------------------|--------|-------------------|--------|-------------------------------------|
|           |                                    |   |               |   |                |   |                                                  |   |                                             |   |                   |   |                                     |

|   |   | **5,514** |   | 1,642 |   | (1,326) |   | (1,208) |   | (58) |   | 349 |   | **4,913** |
|--------|--------|-----------|--------|-------|--------|---------|--------|---------|--------|------|--------|-----|--------|-----------|
|   |   |           |   |       |   |         |   |         |   |      |   |     |   |           |

The deductions of euro 1,326 million comprised a write down ofeuro 1,030 million that was recognized on deferred tax assetsrecorded by the parent company Eni SpA and other Italiansubsidiaries which were part of the consolidated accounts forItalian tax purposes. Management recorded a write down on thosedeferred tax assets to reflect a lower likelihood that thosedeferred tax assets can be recovered in future periods due to anexpected reduction in taxable income generated in Italy, and asEni has lost the availability of Snam taxable profit againstwhich Italian tax assets can be utilized following thedeconsolidation of Snam.

Deferred tax assets are described in note 29 – Deferredtax liabilities.

Income taxes are described in note 39 – Income taxexpense.

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**20 Other non-current receivables**

| (euro million) |   | **Dec. 31, 2011** |   | **Dec. 31, 2012** |
|----------------|--------|-------------------|--------|-------------------|
|           |   |                   |   |                   |

| Tax receivables from:                                       |   |      |   |      |
|-------------------------------------------------------------|--------|-----------|--------|-----------|
| - Italian        tax authorities                            |   |      |   |      |
| *. income tax*                                              |   | *16*      |   | *113*     |
| *.        interest on tax credits*                          |   | *66*      |   | *62*      |
|                                                        |   | **82**    |   | **175**   |
| - foreign        tax authorities                            |   | 72        |   | 118       |
|                                                        |   | **154**   |   | **293**   |
| Other        receivables:                                   |   |      |   |      |
| - related to divestments                                    |   | 535       |   | 752       |
| - other        non-current                                  |   | 258       |   | 361       |
|                                                        |   | **793**   |   | **1,113** |
| Fair value        of non-hedging derivatives                |   | 714       |   | 429       |
| Fair value of cash flow hedge derivative        instruments |   | 33        |   | 2         |
| Other        asset                                          |   | 2,531     |   | 2,563     |
|                                                        |   | **4,225** |   | **4,400** |
|                                                        |   |           |   |           |

The increase in income tax receivables from Italian taxauthorities of euro 97 million related to Eni SpA for euro 85million and comprised the tax relief provided for by Article 2,paragraph 1, of the Law Decree No. 201/2011 that allow to refundof tax payments of Ires made in excess in fiscal years prior to2012 as a consequence of the non-deductibility of payroll costsrelating to Irap.

Receivables originated from divestments amounted to euro 752million (euro 535 million at December 31, 2011) and comprised:(i) the residual outstanding amount of euro 236 millionrecognized following the compensation agreed with the Republic ofVenezuela for the expropriated Dación oilfield in 2006. Thereceivable accrues interests at market conditions as thecollection has been fractionated in installments. As agreed bythe parties, the reimbursement can be made in kind throughequivalent assignment of volumes of crude oil. In 2012, thereimbursement amounted to euro 71 million ($92 million).Negotiations for further compensations are ongoing; (ii) thelong-term portion of a receivable of euro 229 million related tothe divestment of the 1.71% interest in the Kashagan project tothe local partner KazMunaiGas on the basis of the agreementsdefined with the international partners of the North Caspian SeaSpA and the Kashagan government, which became effective fromJanuary 1, 2008. The reimbursement of the receivable is providedfor in three annual installments commencing from the date of theproduction start-up which is planned within June 2013. Thereceivable accrues interest income at market rates. Theshort-term portion is disclosed in note 9 – Trade and otherreceivables; and (iii) the long-term portion of a receivable ofeuro 130 million related to the divestment of the 3.25% interestin the Karachaganak project (equal to the Eni’s 10%interest) to the Kazakh partner KazMunaiGas as part of anagreement reached in December 2011 between the ContractingCompanies of the Final Production Sharing Agreement (FPSA) andKazakh Authorities which settled disputes on the recovery of thecosts incurred by the International Consortium to develop thefield, as well as a certain tax claims. The agreement, effectivefrom June 28, 2012, entailed a net cash consideration to Eni, tobe paid in cash in three years through monthly installmentsstarting from July 2012. The receivable accrues interest incomeat market rates. In the second half of 2012, reimbursementsamounted to euro 41 million. The short-term portion is disclosedin note 9 – Trade and other receivables.

Receivables with related parties are described in note 42– Transactions with related parties.

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The fair value of non-hedging derivative contracts was asfollows:

|   |   | **Dec. 31, 2011** |   | **Dec. 31, 2012** |
|--------|--------|-------------------|--------|-------------------|
|   |   |                   |   |                   |

| (euro        million) |    | **Fair value** | **  ** | **Purchase        commitments** | **  ** | **Sale        commitments** | **  ** | **Fair value** | **  ** | **Purchase        commitments** | **  ** | **Sale        commitments** |
|-----------------------|--------------|----------------|------------------|---------------------------------|------------------|-----------------------------|------------------|----------------|------------------|---------------------------------|------------------|-----------------------------|
|                  |         |                |             |                                 |             |                             |             |                |             |                                 |             |                             |

| **Derivatives on exchange rate**      |   |    |   |      |   |      |   |    |   |      |   |      |
|---------------------------------------|--------|---------|--------|-----------|--------|-----------|--------|---------|--------|-----------|--------|-----------|
| Interest        currency swap         |   | 277     |   | 948       |   | 219       |   | 235     |   | 868       |   | 284       |
| Currency swap                         |   | 16      |   | 197       |   |      |   | 29      |   | 714       |   | 645       |
|                                  |   | **293** |   | **1,145** |   | **219**   |   | **264** |   | **1,582** |   | **929**   |
| **Derivatives on interest rate**      |   |    |   |      |   |      |   |    |   |      |   |      |
| Interest        rate swap             |   | 82      |   | 713       |   | 300       |   | 80      |   | 736       |   | 2         |
|                                  |   | **82**  |   | **713**   |   | **300**   |   | **80**  |   | **736**   |   | **2**     |
| **Derivatives        on commodities** |   |    |   |      |   |      |   |    |   |      |   |      |
| Over the counter                      |   | 326     |   | 3,010     |   | 922       |   | 80      |   | 581       |   | 547       |
| Future                                |   | 2       |   | 120       |   |      |   | 5       |   | 147       |   | 4         |
| Other                                 |   | 11      |   |      |   | 116       |   |    |   |      |   |      |
|                                  |   | **339** |   | **3,130** |   | **1,038** |   | **85**  |   | **728**   |   | **551**   |
|                                  |   | **714** |   | **4,988** |   | **1,557** |   | **429** |   | **3,046** |   | **1,482** |
|                                  |   |         |   |           |   |           |   |         |   |           |   |           |

Derivative fair values are calculated basing on marketquotations provided by primary info-provider, or in the absenceof market information, appropriate valuation techniques generallyadopted in the marketplace.

Fair values of non-hedging derivatives of euro 429 million(euro 714 million at December 31, 2011) consisted of derivativesthat did not meet the formal criteria to be designated as hedgesunder IFRS because they were entered into in order to manage netexposures to foreign currency exchange rates, interest rates andcommodity prices. Therefore, such derivatives did not related tospecific trade or financing transactions.

Fair value of cash flow hedge derivatives of euro 2 million(euro 33 million at December 31, 2011) related to the Gas &Power segment. Further information is disclosed in note 13 –Other current assets. Fair value related to the contractsexpiring beyond 2013 is disclosed in note 30 – Othernon-current liabilities; fair value related to the contractsexpiring in 2013 is disclosed in note 13 – Other currentassets and in note 25 – Other current liabilities. Theeffects of fair value evaluation of cash flow hedges aredisclosed in note 32 – Shareholders’ equity and note 36– Operating expenses.

The nominal values of cash flow hedge derivatives for purchaseand sale commitments were euro 21 million and euro 60 million,respectively (euro 204 million and euro 379 million at December31, 2011, respectively).

Information on the hedged risks and the hedging policies isdisclosed in note 34 – Guarantees, commitments and risks -Risk factors.

Other non-current asset amounted to euro 2,563 million (euro2,531 million at December 31, 2011), of which euro 2,367 million(euro 2,227 million at December 31, 2011) were deferred costsrelating to gas quantities which, although not off-taken, theCompany has obligation to prepay by disbursing the wholecontractual price of a fraction of it in order to fulfill thetake-or-pay clauses provided by the relevant long-term supplycontracts (see "Other payables" of note 22 – Tradeand other payables). In accordance to those arrangements, theCompany is contractually required to off-take minimum annualquantities of gas, or in case of failure is held to pay the wholeprice or a fraction of it for the uncollected volumes up to theminimum annual quantity. The Company is entitled to off-take thepre-paid volumes in future years alongside the contractexecution, for its entire duration or a shorter term as the casemay be. Those prepayments were classified as non-current assets,as the Company plans to off-take the prepaid quantities beyondthe term of 12 months. The increase of euro 140 million fromDecember 31, 2011 was due to the gas volumes for which thetake-or-pay obligation has been triggered in 2012; such increasewas partially offset by the renegotiation of certain contractswhich were finalized in 2012 with effects retroactive to thebeginning of 2011 and provided for a reduction in the contractualminimum take. Those deferred costs, which are equivalent to areceivable in-kind, are stated at the purchase cost or the netrealizable value, whichever is lower. Prior-years impairmentlosses are reversed up to the purchase cost, whenever marketconditions indicate that impairment no longer exits or may havedecreased. The amount of pre-paid volumes reflects ongoing weakmarket conditions in the European gas sector due to decliningdemand and strong competitive pressures fuelled by oversupplies.Those trends prevented Eni from fulfilling its minimum takeobligations associated with its gas supply contracts. Managementplans to recover those pre-paid volumes over the long-termleveraging on: (i) the expected developing trends in long-termgas demand; (ii) a projected sales expansion in target Europeanmarkets and Italy supported by the Company’s strengtheningmarket leadership and an improved competitiveness of theCompany’s cost position 

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considering the expected benefits of ongoing and plannedcontract renegotiations; and (iii) the expected benefitsassociated with the reduction of minimum take quantities infuture years and other operating flexibilities (i.e. changes indelivery points and LNG supplies in place of those by pipeline)which the Company has already achieved or plans to achieve as aresult of ongoing and planned contract renegotiations, includingthe no renewal of expiring contracts.

**Current liabilities****21 Short-term debt**

| (euro million) |   | **Dec. 31, 2011** |   | **Dec. 31, 2012** |
|----------------|--------|-------------------|--------|-------------------|
|           |   |                   |   |                   |

| Banks                        |   | 786       |   | 253       |
|------------------------------|--------|-----------|--------|-----------|
| Commercial        papers     |   | 2,997     |   | 1,481     |
| Other financial institutions |   | 676       |   | 489       |
|                         |   | **4,459** |   | **2,223** |
|                         |   |           |   |           |

The decrease in short-term debt of euro 2,236 million includednet repayments for euro 753 million and the deconsolidation ofthe financial debts pertaining to Snam (more information isprovided in note 26 – Long-term debt and current maturitiesof long-term debt – Information on net borrowings).Commercial papers of euro 1,481 million (euro 2,997 million atDecember 31, 2011) were issued by the Group’s financialsubsidiaries Eni Finance USA Inc (euro 1,357 million) and EniFinance International SA (euro 124 million).

The break-down by currency of short-term debt is providedbelow:

| (euro million) |   | **Dec. 31, 2011** |   | **Dec. 31, 2012** |
|----------------|--------|-------------------|--------|-------------------|
|           |   |                   |   |                   |

| Euro               |   | 2,896     |   | 219       |
|--------------------|--------|-----------|--------|-----------|
| U.S.        dollar |   | 1,430     |   | 1,815     |
| Other currencies   |   | 133       |   | 189       |
|               |   | **4,459** |   | **2,223** |
|               |   |           |   |           |

In 2012, the weighted average interest rate on short-term debtwas 1.5% (1.1% in 2011).

At December 31, 2012, Eni had undrawn committed anduncommitted borrowing facilities amounting to euro 1,241 millionand euro 10,932 million, respectively (euro 2,551 million andeuro 9,346 million at December 31, 2011). Those facilities boreinterest rates reflecting prevailing conditions on themarketplace. Charges for unutilized facilities were immaterial.

Payables due to related parties are described in note 42– Transactions with related parties.

At December 31, 2012, Eni did not report any default oncovenants or other contractual provisions in relation toborrowing facilities.

The fair value of short-term debts matched their respectivecarrying amounts considering the short-term maturity.

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**22 Trade and other payables**

| (euro million) |   | **Dec. 31, 2011** |   | **Dec. 31, 2012** |
|----------------|--------|-------------------|--------|-------------------|
|           |   |                   |   |                   |

| Trade payables                           |   | 13,436     |   | 14,993     |
|------------------------------------------|--------|------------|--------|------------|
| Advances                                 |   | 2,313      |   | 2,247      |
| Other payables:                          |   |       |   |       |
| - related        to capital expenditures |   | 2,280      |   | 2,103      |
| - others                                 |   | 4,883      |   | 4,238      |
|                                     |   | **7,163**  |   | **6,341**  |
|                                     |   | **22,912** |   | **23,581** |
|                                     |   |            |   |            |

Increased trade receivables amounting to euro 1,557 millionprimarily related to the Gas & Power segment (euro 1,252million), Exploration & Production (euro 374 million),Refining & Marketing (euro 306 million) and, as decrease, tothe change in the scope of consolidation following thedeconsolidation of Snam (euro 446 million).

Advances of euro 2,247 million (euro 2,313 million at December31, 2011) related to prepayments and advances on contract work inprogress for euro 865 million and for euro 814 million,respectively (euro 795 million and euro 1,037 million at December31, 2011, respectively) and other advances for euro 568 million(euro 481 million at December 31, 2011). Advances on contractwork in progress were in respect of the Engineering& Construction segment.

Other payables were as follows:

| (euro million) |   | **Dec. 31, 2011** |   | **Dec. 31, 2012** |
|----------------|--------|-------------------|--------|-------------------|
|           |   |                   |   |                   |

| **Payables related to capital expenditures due        to**              |   |      |   |      |
|-------------------------------------------------------------------------|--------|-----------|--------|-----------|
| Suppliers        in relation to investing activities                    |   | 1,544     |   | 1,626     |
| Joint venture operators in exploration and        production activities |   | 468       |   | 440       |
| Other                                                                   |   | 268       |   | 37        |
|                                                                    |   | **2,280** |   | **2,103** |
| **Other        payables due to**                                        |   |      |   |      |
| Joint venture operators in exploration and        production activities |   | 2,356     |   | 2,375     |
| Employees                                                               |   | 589       |   | 372       |
| Social security entities                                                |   | 269       |   | 223       |
| Non-financial        government entities                                |   | 137       |   | 243       |
| Other                                                                   |   | 1,532     |   | 1,025     |
|                                                                    |   | **4,883** |   | **4,238** |
|                                                                    |   | **7,163** |   | **6,341** |
|                                                                    |   |           |   |           |

Other payables decreased of euro 822 million following thedeconsolidation of Snam (euro 638 million).

Other payables due to others of euro 1,025 million (euro 1,532million at December 31, 2011) included payables due to gassuppliers for euro 542 million (euro 719 million at December 31,2011) relating to the triggering of the take-or-pay clause, netof the amounts paid by Eni for the year. Payments to gassuppliers decreased by euro 177 million reflecting the economicbenefits associated with the renegotiations of certaintake-or-pay contracts which were finalized in 2012 which effectswere retroactive to the beginning of 2011 and provided for areduction in the contractual minimum take. The decrease waspartially offset by increased receivables due to the take-or-payvolumes accrued in 2012, net of amounts paid in the course of theyear. For further information see note 20 – Othernon-current receivables.

Payables to related parties are described in note 42 –Transactions with related parties.

The fair value of trade and other payables matched theirrespective carrying amounts considering the short-term maturityof trade payables.

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**23 Income taxes payable**

| (euro million) |   | **Dec. 31, 2011** |   | **Dec. 31, 2012** |
|----------------|--------|-------------------|--------|-------------------|
|           |   |                   |   |                   |

| Italian subsidiaries        |   | 390       |   | 156       |
|-----------------------------|--------|-----------|--------|-----------|
| Foreign        subsidiaries |   | 1,702     |   | 1,466     |
|                        |   | **2,092** |   | **1,622** |
|                        |   |           |   |           |

Income taxes are described in note 39 – Income taxexpense.

**24 Other taxes payable**

| (euro million) |   | **Dec. 31, 2011** |   | **Dec. 31, 2012** |
|----------------|--------|-------------------|--------|-------------------|
|           |   |                   |   |                   |

| Excise and customs duties     |   | 1,049     |   | 1,286     |
|-------------------------------|--------|-----------|--------|-----------|
| Other        taxes and duties |   | 847       |   | 876       |
|                          |   | **1,896** |   | **2,162** |
|                          |   |           |   |           |

**25 Other current liabilities**

| (euro million) |   | **Dec. 31, 2011** |   | **Dec. 31, 2012** |
|----------------|--------|-------------------|--------|-------------------|
|           |   |                   |   |                   |

| Fair value of non-hedging and trading        derivatives |   | 1,668     |   | 888       |
|----------------------------------------------------------|--------|-----------|--------|-----------|
| Fair value        of cash flow hedge derivatives         |   | 121       |   | 32        |
| Fair value of fair value hedge derivatives               |   |      |   | 5         |
| Other        liabilities                                 |   | 448       |   | 512       |
|                                                     |   | **2,237** |   | **1,437** |
|                                                     |   |           |   |           |

The fair value of non-hedging derivativecontracts and derivatives contracts held for trading is presentedbelow:

|   |   | **Dec. 31, 2011** |   | **Dec. 31, 2012** |
|--------|--------|-------------------|--------|-------------------|
|   |   |                   |   |                   |

| (euro        million) |    | **Fair value** | **  ** | **Purchase        commitments** | **  ** | **Sale        commitments** | **  ** | **Fair value** | **  ** | **Purchase        commitments** | **  ** | **Sale        commitments** |
|-----------------------|--------------|----------------|------------------|---------------------------------|------------------|-----------------------------|------------------|----------------|------------------|---------------------------------|------------------|-----------------------------|
|                  |         |                |             |                                 |             |                             |             |                |             |                                 |             |                             |

| **Derivatives on exchange rate**        |   |      |   |      |   |       |   |    |   |       |   |      |
|-----------------------------------------|--------|-----------|--------|-----------|--------|------------|--------|---------|--------|------------|--------|-----------|
| Currency        swap                    |   | 448       |   | 3,979     |   | 8,076      |   | 180     |   | 7,531      |   | 1,291     |
| Interest currency swap                  |   | 6         |   | 116       |   |       |   |    |   |       |   |      |
| Other                                   |   | 1         |   |      |   | 23         |   | 1       |   | 102        |   |      |
|                                    |   | **455**   |   | **4,095** |   | **8,099**  |   | **181** |   | **7,633**  |   | **1,291** |
| **Derivatives        on interest rate** |   |      |   |      |   |       |   |    |   |       |   |      |
| Interest rate swap                      |   | 3         |   |      |   | 735        |   | 1       |   |       |   | 88        |
|                                    |   | **3**     |   |      |   | **735**    |   | **1**   |   |       |   | **88**    |
| **Derivatives on commodities**          |   |      |   |      |   |       |   |    |   |       |   |      |
| Over the        counter                 |   | 1,066     |   | 3,829     |   | 4,620      |   | 684     |   | 8,311      |   | 2,969     |
| Future                                  |   | 63        |   | 418       |   | 173        |   | 11      |   | 382        |   | 43        |
| Other                                   |   | 81        |   |      |   | 548        |   | 11      |   |       |   | 2         |
|                                    |   | **1,210** |   | **4,247** |   | **5,341**  |   | **706** |   | **8,693**  |   | **3,014** |
|                                    |   | **1,668** |   | **8,342** |   | **14,175** |   | **888** |   | **16,326** |   | **4,393** |
|                                    |   |           |   |           |   |            |   |         |   |            |   |           |

Derivative fair values were estimated on the basis of marketquotations provided by primary info-provider, or in the absenceof market information, appropriate valuation techniques commonlyused on the marketplace.

Fair values of non-hedging and trading derivatives of euro 888million (euro 1,668 million at December 31, 2011) consisted of:(i) euro 538 million (euro 1,587 million at December 31, 2011) ofderivatives that did not meet 

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the formal criteria to be designated as hedges under IFRSbecause they were entered into in order to manage net exposuresto movements in foreign currencies, interest rates or commodityprices. Therefore, such derivatives were not related to specifictrade or financing transactions; (ii) euro 349 million (euro 80million at December 31, 2011), of commodity and tradingderivatives entered by the Gas & Power segment in order tooptimize the economic margin and by Eni Trading & ShippingSpA for trading purposes; and (iii) euro 1 million (same amountas of December 31, 2011), of derivatives embedded in the pricingformulas of certain long-term supply contracts of gas in theExploration & Production segment.

The fair value of cash flow hedge derivatives amounted to euro32 million (euro 121 million at December 31, 2011) andessentially pertained to the Gas & Power segment. Thosederivatives were designated to hedge exchange rate and commodityrisk exposures as described in note 13 – Other currentassets. Fair value of contracts expiring by end of 2013 isdisclosed in note 13 – Other current assets; fair value ofcontracts expiring beyond 2013 is disclosed in note 30 –Other non-current liabilities and in note 20 – Othernon-current receivables. The effects of the evaluation at fairvalue of cash flow hedge derivatives are disclosed in note 32– Shareholders’ equity and in note 36 – Operatingexpenses.

The nominal value of cash flow hedge derivatives referred topurchase and sale commitments for euro 341 million and euro 271million, respectively (euro 3,409 million and euro 452 million atDecember 31, 2011, respectively).

The fair value of fair value hedge derivatives amounted toeuro 5 million and pertained to derivatives entered into duringthe 2012 in order to hedge certain contracts for the sale andpurchase of oil products.

The nominal value of fair value hedge derivatives referred topurchase and sale commitments for euro 24 million while salecommitments were not recorded.

Information on hedged risks and hedging policies is disclosedin note 34 – Guarantees, commitments and risks - Riskfactors.

Other current liabilities of euro 512 million (euro 448million at December 31, 2011) included advances cashed in fromgas customers (euro 142 million) who off-took lower volumes thanthe contractual minimum take provided by the relevant long-termsupply contract with the Company. The classification reflects theCompany’s belief that the underlying volumes will beoff-taken the next year.

**Non-current liabilities****26 Long-term debt and current maturitiesof long-term debt**

| (euro million) |   | **At December 31,** |   |   |   | **Long-term maturity** |
|----------------|--------|---------------------|--------|--------|--------|------------------------|
|           |   |                     |   |   |   |                        |

|   |   | **Maturity range** |   | **2011** |   | **2012** |   | **Current maturity 2013** |   | **2014** |   | **2015** |   | **2016** |   | **2017** |   | **After** |   | **Total** |
|--------|--------|--------------------|--------|----------|--------|----------|--------|---------------------------|--------|----------|--------|----------|--------|----------|--------|----------|--------|-----------|--------|-----------|
|   |   |                    |   |          |   |          |   |                           |   |          |   |          |   |          |   |          |   |           |   |           |

| Banks                               |   | **2013-2027** |   | 9,654      |   | 4,016      |   | 913       |   | 694       |   | 621       |   | 622       |   | 227       |   | 939       |   | 3,103      |
|-------------------------------------|--------|---------------|--------|------------|--------|------------|--------|-----------|--------|-----------|--------|-----------|--------|-----------|--------|-----------|--------|-----------|--------|------------|
| Ordinary        bonds               |   | **2013-2040** |   | 15,049     |   | 16,824     |   | 2,006     |   | 1,331     |   | 2,222     |   | 1,494     |   | 2,650     |   | 7,121     |   | 14,818     |
| Convertible bonds                   |   | **2015**      |   |       |   | 990        |   |      |   |      |   | 990       |   |      |   |      |   |      |   | 990        |
| Other        financial institutions |   | **2013-2025** |   | 435        |   | 410        |   | 42        |   | 53        |   | 47        |   | 50        |   | 50        |   | 168       |   | 368        |
|                                |   |          |   | **25,138** |   | **22,240** |   | **2,961** |   | **2,078** |   | **3,880** |   | **2,166** |   | **2,927** |   | **8,228** |   | **19,279** |
|                                |   |               |   |            |   |            |   |           |   |           |   |           |   |           |   |           |   |           |   |            |

The decrease in long-term debt, including the current portionof long-term debt, of euro 2,898 million included new issuancesfor euro 10,484 million and repayments for euro 3,784 million andthe deconsolidation of Snam as described in the followingparagraph "Information on net borrowings".

Debt due to banks of euro 4,016 million (euro 9,654 million atDecember 31, 2011) included amounts against committed borrowingfacilities for euro 5 million.

Debt due to other financial institutions of euro 410 million(euro 435 million at December 31, 2011) comprised euro 31 millionof finance lease transactions (euro 15 million at December 31,2011).

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Eni entered into long-term borrowing facilities with theEuropean Investment Bank. These borrowing facilities are subjectto the maintenance of certain financial ratios based onEni’s Consolidated Financial Statements or a minimum levelof credit rating. According to the agreements, should the Companylose the minimum credit rating, new guarantees would be requiredto be agreed upon with the European Investment Bank. In addition,Eni entered into long and medium term facilities with CitibankEurope Plc providing for conditions similar to those applied bythe European Investment Bank. At December 31, 2012 and 2011,debts subjected to restrictive covenants amounted to euro 1,994million and euro 2,316 million, respectively. A possiblenon-compliance with those covenants would be immaterial to theCompany’s ability to finance its operations. As of thebalance sheet date, Eni was in compliance with those covenants.

Bonds of euro 16,824 million (euro 15,049 million at December31, 2011) consisted of bonds issued within the Euro Medium TermNotes Program for a total of euro 12,579 million and other bondsfor a total of euro 4,245 million.

The following table provides a break-down of bonds by issuingentity, maturity date, interest rate and currency as of December31, 2012:

|   |   | **Amount** |   | **Discount on bond issue and accrued        expense** |   | **Total** |   | **Currency** |   | **Maturity** |   | **% rate** |
|--------|--------|------------|--------|-------------------------------------------------------|--------|-----------|--------|--------------|--------|--------------|--------|------------|
|   |   |            |   |                                                       |   |           |   |              |   |              |   |            |

| (euro        million) |   |   |   |   |   |   |   |   |   | from |   | to |   | from |   | to |
|-----------------------|--------|--------|--------|--------|--------|--------|--------|--------|--------|------|--------|----|--------|------|--------|----|
|                  |   |   |   |   |   |   |   |   |   |      |   |    |   |      |   |    |

| **Issuing entity**                    |   |       |   |    |   |   |       |   |   |   |   |   |   |   |   |   |     |
|---------------------------------------|--------|------------|--------|---------|--------|--------|------------|--------|--------|--------|--------|--------|--------|--------|--------|--------|----------|
| *Euro        Medium Term Notes:*      |   |       |   |    |   |   |       |   |   |   |   |   |   |   |   |   |     |
| - Eni SpA                             |   | 1,500      |   | 63      |   |   | 1,563      |   | EUR    |   |   |   | 2016   |   |   |   | 5.000    |
| - Eni SpA                             |   | 1,500      |   | 46      |   |   | 1,546      |   | EUR    |   |   |   | 2013   |   |   |   | 4.625    |
| - Eni SpA                             |   | 1,500      |   | 10      |   |   | 1,510      |   | EUR    |   |   |   | 2019   |   |   |   | 4.125    |
| - Eni SpA                             |   | 1,250      |   | 69      |   |   | 1,319      |   | EUR    |   |   |   | 2014   |   |   |   | 5.875    |
| - Eni SpA                             |   | 1,250      |   |    |   |   | 1,250      |   | EUR    |   |   |   | 2017   |   |   |   | 4.750    |
| - Eni SpA                             |   | 1,000      |   | 33      |   |   | 1,033      |   | EUR    |   |   |   | 2020   |   |   |   | 4.250    |
| - Eni SpA                             |   | 1,000      |   | 28      |   |   | 1,028      |   | EUR    |   |   |   | 2018   |   |   |   | 3.500    |
| - Eni SpA                             |   | 1,000      |   | 18      |   |   | 1,018      |   | EUR    |   |   |   | 2020   |   |   |   | 4.000    |
| - Eni SpA                             |   | 750        |   | 10      |   |   | 760        |   | EUR    |   |   |   | 2019   |   |   |   | 3.750    |
| - Eni        Finance International SA |   | 551        |   | 12      |   |   | 563        |   | GBP    |   | 2018   |   | 2021   |   | 4.750  |   | 6.125    |
| - Eni Finance International SA        |   | 370        |   | 9       |   |   | 379        |   | EUR    |   | 2017   |   | 2032   |   | 3.750  |   | 5.600    |
| - Eni        Finance International SA |   | 361        |   | 2       |   |   | 363        |   | YEN    |   | 2013   |   | 2037   |   | 1.150  |   | 2.810    |
| - Eni Finance International SA        |   | 193        |   | 4       |   |   | 197        |   | USD    |   | 2013   |   | 2015   |   | 4.450  |   | 4.800    |
| - Eni        Finance International SA |   | 34         |   |    |   |   | 34         |   | USD    |   |   |   | 2013   |   |   |   | variable |
| - Eni Finance International SA        |   | 16         |   |    |   |   | 16         |   | EUR    |   |   |   | 2015   |   |   |   | variable |
|                                  |   | **12,275** |   | **304** |   |   | **12,579** |   |   |   |   |   |   |   |   |   |     |
| *Other bonds:*                        |   |       |   |    |   |   |       |   |   |   |   |   |   |   |   |   |     |
| - Eni SpA                             |   | 1,109      |   | (2      | )      |   | 1,107      |   | EUR    |   |   |   | 2017   |   |   |   | 4.875    |
| - Eni SpA                             |   | 1,000      |   | 13      |   |   | 1,013      |   | EUR    |   |   |   | 2015   |   |   |   | 4.000    |
| - Eni SpA                             |   | 1,000      |   | 3       |   |   | 1,003      |   | EUR    |   |   |   | 2015   |   |   |   | variable |
| - Eni SpA                             |   | 341        |   | 2       |   |   | 343        |   | USD    |   |   |   | 2020   |   |   |   | 4.150    |
| - Eni SpA                             |   | 265        |   |    |   |   | 265        |   | USD    |   |   |   | 2040   |   |   |   | 5.700    |
| - Eni SpA                             |   | 215        |   | (1      | )      |   | 214        |   | EUR    |   |   |   | 2017   |   |   |   | variable |
| - Eni USA        Inc                  |   | 303        |   | (3      | )      |   | 300        |   | USD    |   |   |   | 2027   |   |   |   | 7.300    |
|                                  |   | **4,233**  |   | **12**  |   |   | **4,245**  |   |   |   |   |   |   |   |   |   |     |
|                                  |   | **16,508** |   | **316** |   |   | **16,824** |   |   |   |   |   |   |   |   |   |     |
|                                  |   |            |   |         |        |   |            |   |        |   |        |   |        |   |        |   |          |

As of December 31, 2012, ordinary bonds maturing within 18months (euro 3,051 million) were issued by Eni SpA (euro 2,865million), Eni Finance International SA (euro 186 million). During2012, new bonds of euro 1,864 million were issued by Eni SpA andEni Finance International SA (euro 1,793 million and euro 71million, respectively).

Convertible bonds of euro 990 million comprised unsecuredbonds exchangeable into ordinary Galp Energia SGPS SA shares foreuro 1,028 million. The bonds have maturity of 3 years and pay acoupon of 0.25 per cent per annum. Underlying the exchangeablebonds are approximately 66.3 million ordinary shares of Galp,corresponding to approximately 8% of the current outstandingshare capital of Galp. The bonds will be exchangeable into Galpordinary shares at a strike price of approximately euro 15.50 ashare, representing a 35% premium to market prices current at thedate of the issuance. The bonds are stated at amortized cost,while the call option embedded in the bonds is measured at fairvalue through profit. Changes in fair value of the sharesunderlying the bonds were reported through profit as opposed toequity based on the fair value option provided by IAS 39 frominception (for more information see note 17 – Investments).

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The following table provides a break-down by currency oflong-term debt and its current portion and the related weightedaverage interest rates.

|   |   | **Dec. 31, 2011******(euro million) |   | **Average rate**        (%) |   | **Dec. 31, 2012******(euro million) |   | **Average rate**        (%) |
|--------|--------|-------------------------------------|--------|-----------------------------|--------|-------------------------------------|--------|-----------------------------|
|   |   |                                     |   |                             |   |                                     |   |                             |

| Euro                |   | 22,196     |   | 3.2    |   | 19,413     |   | 3.6    |
|---------------------|--------|------------|--------|--------|--------|------------|--------|--------|
| U.S.        dollar  |   | 1,926      |   | 5.0    |   | 1,899      |   | 5.3    |
| British pound       |   | 551        |   | 5.3    |   | 564        |   | 5.3    |
| Japanese        yen |   | 462        |   | 2.0    |   | 363        |   | 2.1    |
| Other currencies    |   | 3          |   | 6.3    |   | 1          |   | 6.7    |
|                |   | **25,138** |   |   |   | **22,240** |   |   |
|                |   |            |   |        |   |            |   |        |

As of December 31, 2012, Eni had undrawn long-term committedborrowing facilities of euro 6,928 million (euro 3,201 million atDecember 31, 2011). Those facilities bore interest rates andcharges for unutilized facilities reflecting prevailingconditions on the marketplace.

Eni has in place a program for the issuance of Euro MediumTerm Notes up to euro 15 billion, of which about euro 12.3billion were drawn as of December 31, 2012. The Group has creditratings of A and A-1, respectively for long and short-term debtassigned by Standard & Poor’s and A3 and P-2 for longand short-term debt assigned by Moody’s; the outlook isnegative in both ratings.

Fair value of long-term debt, including the current portion oflong-term debt amounted to euro 24,937 million (euro 27,103million at December 31, 2011):

| (euro million) |   | **Dec. 31, 2011** |   | **Dec. 31, 2012** |
|----------------|--------|-------------------|--------|-------------------|
|           |   |                   |   |                   |

| Ordinary bonds                      |   | 16,895     |   | 19,239     |
|-------------------------------------|--------|------------|--------|------------|
| Banks                               |   | 9,727      |   | 4,171      |
| Convertible bonds                   |   |       |   | 1,059      |
| Other        financial institutions |   | 481        |   | 468        |
|                                |   | **27,103** |   | **24,937** |
|                                |   |            |   |            |

Fair value was calculated by discounting the expected futurecash flows at discount rates ranging from 0.4% to 3.3% (0.7% and3.1% at December 31, 2011). The fair value of convertible bondswas determined on the basis of the market quotation.

At December 31, 2012, Eni did not pledge restricted depositsas collateral against its borrowings.

**Information on net borrowings**In assessing its capital structure, Eni uses netborrowings, which is a non-GAAP financial measure. Eni calculatesnet borrowings as total finance debt (short-term and long-termdebt) derived from its Consolidated Financial Statements preparedin accordance with IFRS as endorsed by IASB less: cash, cashequivalents and certain highly liquid investments not related tooperations including, among others, non-operating financingreceivables and securities not related to operations.Non-operating financing receivables consist mainly of depositswith banks and other financing institutions and deposits inescrow. Securities not related to operations consist primarily ofgovernment bonds and securities from financing institutions.These assets are generally intended to absorb temporary surplusesof cash as part of the Company’s ordinary management offinancing activities.

Management believes that net borrowings is an useful measureof Eni’s financial condition as it provides insight aboutthe soundness of Eni’s capital structure and the ways bywhich Eni’s operating assets are financed. In addition,management utilizes the ratio of net borrowings to totalshareholders’ equity including non-controlling interest(leverage) to assess Eni’s capital structure, to analyzewhether the ratio between finance debt and shareholders’equity is well balanced according to industry standards and totrack management’s short-term and medium-term targets.Management continuously monitors trends in net borrowings andtrends in leverage in order to optimize the use ofinternally-generated funds versus funds from third parties. Themeasure calculated in accordance with IFRS that is most directlycomparable to net borrowings is total debt (short-term andlong-term debt). The most directly comparable measure, derivedfrom IFRS reported amounts, to calculate leverage is the ratio oftotal debt to shareholders’ equity (includingnon-controlling interest). Eni’s presentation andcalculation of net borrowings and leverage may not be comparableto that of other companies.

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| (euro million) |   | **Dec. 31, 2011** |   | **Dec. 31, 2012** |
|----------------|--------|-------------------|--------|-------------------|
|           |   |                   |   |                   |

|   |   | **Current** |   | **Non-current** |   | **Total** |   | **Current** |   | **Non-current** |   | **Total** |
|--------|--------|-------------|--------|-----------------|--------|-----------|--------|-------------|--------|-----------------|--------|-----------|
|   |   |             |   |                 |   |           |   |             |   |                 |   |           |

| A.     | Cash and cash equivalents                      |   | 1,500     |   |       |   | 1,500      |   | 7,765       |   |       |   | 7,765      |
|--------|------------------------------------------------|--------|-----------|--------|------------|--------|------------|--------|-------------|--------|------------|--------|------------|
| B.     | Available-for-sale        securities           |   | 37        |   |       |   | 37         |   | 34          |   |       |   | 34         |
| **C.** | **Liquidity (A+B)**                            |   | **1,537** |   |       |   | **1,537**  |   | **7,799**   |   |       |   | **7,799**  |
| **D.** | **Financing        receivables**               |   | **28**    |   |       |   | **28**     |   | **1,153**   |   |       |   | **1,153**  |
| E.     | Short-term debt towards banks                  |   | 786       |   |       |   | 786        |   | 253         |   |       |   | 253        |
| F.     | Long-term        debt towards banks            |   | 1,601     |   | 8,053      |   | 9,654      |   | 913         |   | 3,103      |   | 4,016      |
| G.     | Bonds                                          |   | 397       |   | 14,652     |   | 15,049     |   | 2,006       |   | 15,808     |   | 17,814     |
| H.     | Short-term        debt towards related parties |   | 503       |   |       |   | 503        |   | 403         |   |       |   | 403        |
| I.     | Other short-term debt                          |   | 3,170     |   |       |   | 3,170      |   | 1,567       |   |       |   | 1,567      |
| L.     | Other        long-term debt                    |   | 38        |   | 397        |   | 435        |   | 42          |   | 368        |   | 410        |
| **M.** | **Total borrowings (E+F+G+H+I+L)**             |   | **6,495** |   | **23,102** |   | **29,597** |   | **5,184**   |   | **19,279** |   | **24,463** |
| **N.** | **Net        borrowings (M-C-D)**              |   | **4,930** |   | **23,102** |   | **28,032** |   | **(3,768)** |   | **19,279** |   | **15,511** |
|   |                                           |   |           |   |            |   |            |   |             |   |            |   |            |

The decrease in consolidated net borrowings of euro 12,521million comprised the effects of the deconsolidation of thefinance debt held by Snam amounting to euro 12,448 million,following Eni’s loss of control on the investee. Snamarranged financing with third-party lenders in order to reimburseintercompany loans.

Available-for-sale securities of euro 34 million (euro 37million at December 31, 2011) were held for non-operatingpurposes. The Company held at the reporting date certainheld-to-maturity and available-for-sale securities which weredestined to operating purposes amounting to euro 270 million(euro 287 million at December 31, 2011), of which euro 196million (euro 220 million at December 31, 2011) were held tohedge the loss reserve of Eni Insurance Ltd. Those securities areexcluded from the calculation above.

Financing receivables of euro 1,153 million (euro 28 millionat December 31, 2011) were held for non-operating purposes andcomprised euro 883 million of Cassa Depositi e Prestiti SpA ofwhich euro 879 million relating to the residual amount of thetotal consideration (euro 3,517 million) for the transactioncovering 1,013.6 million ordinary shares of Snam and euro 4million of relevant accrued interests. The Company held at thereporting date certain financing receivables which were destinedfor operating purposes amounting to euro 668 million (euro 630million at December 31, 2011), of which euro 351 million (euro345 million at December 31, 2011) were in respect of financinggranted to unconsolidated entities which executed capitalprojects and investments on behalf of Eni’s Group companiesand a euro 280 million cash deposit (euro 250 million at December31, 2011) to hedge the loss reserve of Eni Insurance Ltd. Thosefinancing receivables are excluded from the calculation above.

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**27 Provisions for contingencies**

| (euro million) |   | **Carrying amount at Dec.        31, 2011** |   | **New or increased        provisions** |   | **Initial recognition and        changes        in estimates** |   | **Accretion discount** |   | **Reversal of utilized        provisions** |   | **Reversal of unutilized        provisions** |   | **Currency translation        differences** |   | **Changes in the scope of        consolidation** |   | **Other changes** |   | **Carrying amount at Dec.        31, 2012** |
|----------------|--------|---------------------------------------------|--------|----------------------------------------|--------|----------------------------------------------------------------|--------|------------------------|--------|--------------------------------------------|--------|----------------------------------------------|--------|---------------------------------------------|--------|--------------------------------------------------|--------|-------------------|--------|---------------------------------------------|
|           |   |                                             |   |                                        |   |                                                                |   |                        |   |                                            |   |                                              |   |                                             |   |                                                  |   |                   |   |                                             |

| Provision for site restoration, abandonment and        social projects              |   | 6,780      |   |   |      |   |   | 1,451     |   |   | 263     |   |   | (300       | )      |   | (4       | )      |   | (14     | )      |   | (378     | )      |   | (391     | )      |   | 7,407      |   |
|-------------------------------------------------------------------------------------|--------|------------|--------|--------|-----------|--------|--------|-----------|--------|--------|---------|--------|--------|------------|--------|--------|----------|--------|--------|---------|--------|--------|----------|--------|--------|----------|--------|--------|------------|--------|
| Provision        for environmental risks                                            |   | 3,084      |   |   | 91        |   |   |      |   |   | 22      |   |   | (195       | )      |   | (24      | )      |   |    |   |   | (140     | )      |   | 90       |   |   | 2,928      |   |
| Provision for legal and other proceedings                                           |   | 1,074      |   |   | 669       |   |   |      |   |   |    |   |   | (247       | )      |   | (173     | )      |   | (1      | )      |   | (72      | )      |   | (9       | )      |   | 1,241      |   |
| Provision        for taxes                                                          |   | 344        |   |   | 91        |   |   |      |   |   |    |   |   | (33        | )      |   |     |   |   | (5      | )      |   |     |   |   | (2       | )      |   | 395        |   |
| Loss adjustments and actuarial provisions for        Eni’s insurance companies |   | 343        |   |   | 136       |   |   |      |   |   |    |   |   | (142       | )      |   |     |   |   |    |   |   |     |   |   | 6        |   |   | 343        |   |
| Provision        for redundancy incentives                                          |   | 163        |   |   | 24        |   |   |      |   |   | 22      |   |   | (5         | )      |   | (1       | )      |   |    |   |   |     |   |   | (1       | )      |   | 202        |   |
| Provision for losses on investments                                                 |   | 172        |   |   | 30        |   |   |      |   |   |    |   |   |       |   |   | (18      | )      |   | (1      | )      |   |     |   |   | 11       |   |   | 194        |   |
| Provision        for sale price revisions                                           |   | 22         |   |   | 195       |   |   |      |   |   |    |   |   | (29        | )      |   | (3       | )      |   | (1      | )      |   |     |   |   | (6       | )      |   | 178        |   |
| Provision for OIL insurance cover                                                   |   | 98         |   |   | 10        |   |   |      |   |   |    |   |   |       |   |   | (1       | )      |   |    |   |   | (1       | )      |   |     |   |   | 106        |   |
| Provision        for onerous contracts                                              |   | 125        |   |   | 1         |   |   |      |   |   |    |   |   | (71        | )      |   |     |   |   |    |   |   |     |   |   | (1       | )      |   | 54         |   |
| Provision for long-term construction contracts                                      |   | 60         |   |   | 27        |   |   |      |   |   |    |   |   | (33        | )      |   | (2       | )      |   |    |   |   |     |   |   |     |   |   | 52         |   |
| Provision        for the supply of goods                                            |   | 28         |   |   | 24        |   |   |      |   |   |    |   |   | (27        | )      |   | (1       | )      |   |    |   |   |     |   |   |     |   |   | 24         |   |
| Provision for coverage of unaccounted-for gas                                       |   | 54         |   |   |      |   |   |      |   |   |    |   |   |       |   |   |     |   |   |    |   |   | (54      | )      |   |     |   |   |       |   |
| Other        (*)                                                                    |   | 388        |   |   | 256       |   |   |      |   |   | 1       |   |   | (117       | )      |   | (28      | )      |   | (1      | )      |   | (28      | )      |   | 8        |   |   | 479        |   |
|                                                                                |   | **12,735** |   |   | **1,554** |   |   | **1,451** |   |   | **308** |   |   | **(1,199** | **)**  |   | **(255** | **)**  |   | **(23** | **)**  |   | **(673** | **)**  |   | **(295** | **)**  |   | **13,603** |   |
|                                                                                |   |            |        |   |           |        |   |           |        |   |         |        |   |            |        |   |          |        |   |         |        |   |          |        |   |          |        |   |            |        |

|    |    |                                                                            |
|--------------|--------------|--------------------------------------------------------------------------------------|
| (*)          |    | Each        individual amount included herein was lower than euro 50        million. |

Provisions for site restoration, abandonment and socialprojects amounted to euro 7,407 million. Those provisionscomprised the discounted estimated costs that the Company expectsto incur for decommissioning oil and natural gas productionfacilities at the end of the producing lives of fields,well-plugging, abandonment and site restoration (euro 7,026million). Initial recognition and changes in estimates amountedto euro 1,451 million and were primarily due to estimatesrevisions of decommissioning costs in the Exploration &Production segment for euro 1,381 million and costs associatedwith certain social projects agreed with the Basilicata Italianregion as part of the oil development plans in that region foreuro 3 million. Changes in the scope of consolidation of euro 378million related to the deconsolidation of Snam. Other changes ofeuro 391 million comprised the reclassification to liabilitiesdirectly associated with assets held for sale of provisions fordecommissioning relating to Exploration & Productionassets (euro 361 million). An amount of euro 263 million wasrecognized through profit and loss as unwinding of discount ofthe year. The discount rates adopted ranged from 0.7% to 9.4%(from 1.4% to 9.3% at December 31, 2011). Main expendituresassociated with site restoration and decommissioning operationsare expected to be incurred over a 30-year period starting from2017.

Provisions for environmental risks amounted to euro 2,928million. Those provisions comprised the estimated costs forenvironmental clean-up and restoration of certain industrialsites which were owned or held in concession by the Company, andsubsequently divested, shut-down or liquidated. Thoseenvironmental provisions are recognized when an environmentalproject is approved by or filed with the relevant administrativeauthorities or a constructive obligation has arisen whereby theCompany commits itself to perform certain cleaning-up andrestoration projects and reliable cost estimation is available.At December 31, 2012, provisions for environmental risksprimarily related to Syndial SpA (euro 2,423 million) and theRefining & Marketing segment (euro 373 million). Additions ofeuro 91 million primarily related to Syndial SpA (euro 41million) and the Refining & Marketing segment (euro 38million). Reversal of utilized provisions of euro 195 millionprimarily related to Syndial SpA (euro 109 million) and theRefining & Marketing segment (euro 67 million). Changes inthe scope of consolidation of euro 140 million related to thedeconsolidation of Snam. Other changes of euro 90 millioncomprised the economic effects relating to discontinuedoperations (euro 69 million).

Provisions for legal and other proceedings of euro 1,241million comprised the expected liabilities due to failure toperform certain contractual obligations and estimated futurelosses on pending litigation including legal, 

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antitrust, administrative matters and arbitration proceedings.These provisions represented the Company’s best estimate ofthe expected probable liabilities associated with pendinglitigation and primarily related to the Gas & Powersegment (euro 661 million) and Syndial SpA (euro 294 million).Additions and reversal of utilized provisions of euro 669 millionand euro 247 million, respectively, mainly related to the Gas& Power segment and were recognized to take account of gasprice revisions at both purchase and sale contracts, alsoincluding the settlement of few arbitrations. Reversals ofunutilized provision of euro 173 million were primarily made bythe Gas & Power segment due to lower than anticipated chargesfor price revisions at certain long-term gas purchase contracts.Changes in the scope of consolidation of euro 72 million relatedto the deconsolidation of Snam.

Provisions for taxes of euro 395 million included theestimated charges that the Company expects to incur for unsettledtax claims in connection with uncertainties in the application oftax rules at certain Italian and foreign subsidiaries in theExploration & Production segment (euro 322 million) and theEngineering & Construction segment (euro 44 million).

Loss adjustments and actuarial provisions of Eni’sinsurance company Eni Insurance Ltd of euro 343 millionrepresented the expected liabilities accrued on the basis forthird parties claims. Against such liability was recorded areceivable of euro 124 million recognized towards insurancecompanies for reinsurance contracts.

Provisions for redundancy incentives of euro 202 million wererecognized due to a restructuring program involving the Italianpersonnel for the period 2010-2011 in compliance with Law No.223/1991 and further provisions provided for by Law No. 228/2012which provided a scheme for early retirement.

Provisions for losses on investments of euro 194 million weremade with respect to certain investees for which expected orincurred losses exceeded carrying amounts.

Provisions for the OIL mutual insurance scheme of euro 106million included the estimated future increase of insurancecharges, as a result of accidents that occurred in past periodsthat will be recognized to the mutual insures over the next 5years by Eni.

Provisions for onerous contracts of euro 54 million related tothe execution of contracts where the expected costs exceed therelevant benefits. In particular, the provision comprised theestimated expected losses on a re-gasification project in theUnited States.

Provisions for long-term construction contracts of euro 52million related to the Engineering & Construction segment.

Provisions for the supply of goods in the amount of euro 24million included the estimated costs of supply contract revisionsmade by Eni SpA.

**28 Provisions for employee benefits**

| (euro million) |   | **Dec. 31, 2011** |   | **Dec. 31, 2012** |
|----------------|--------|-------------------|--------|-------------------|
|           |   |                   |   |                   |

| TFR                                                                                           |   | 394       |   | 294     |
|-----------------------------------------------------------------------------------------------|--------|-----------|--------|---------|
| Foreign        pension plans                                                                  |   | 334       |   | 400     |
| Supplementary medical reserve for Eni managers        (FISDE) and other foreign medical plans |   | 104       |   | 99      |
| Other        benefits                                                                         |   | 207       |   | 189     |
|                                                                                          |   | **1,039** |   | **982** |
|                                                                                          |   |           |   |         |

Provisions for benefits upon termination of employmentprimarily related to a provisions accrued by Italian companiesfor employee retirement, determined using actuarial techniquesand regulated by Article 2120 of the Italian Civil Code. Thebenefit is paid upon retirement as a lump sum, the amount ofwhich corresponds to the total of the provisions accrued duringthe employees’ service period based on payroll costs asrevalued until retirement. Following the changes in the lawregime, from January 1, 2007 accruing benefits have beencontributing to a pension fund or a treasury fund held by theItalian administration for post-retirement benefits (Inps). Forcompanies with less than 50 employees, it will be possible tocontinue the scheme as in previous years. Therefore,contributions of future TFR provisions to pension funds or theInps treasury fund determines that these amounts will be treatedin 

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accordance to a defined contribution scheme. Amounts alreadyaccrued before January 1, 2007 continue to be accounted for asdefined benefits to be assessed based on actuarial assumptions.

Pension funds are defined benefit plans provided by foreignsubsidiaries located mainly in Nigeria, Germany and UnitedKingdom. Benefits under these plans consist of payments based onseniority and the salary paid in the last year of service, oralternatively, the average annual salary over a defined periodprior to the retirement.

Group companies provide healthcare benefits to retiredmanagers. Liability to these plans (FISDE and other foreignhealthcare plans) and the current cost are limited to thecontributions made by the Company.

Other benefits primarily consisted of monetary and long-termincentive schemes to Group managers both of which normally vestover a three-year period upon fulfillment of certain performanceconditions. Provisions for the monetary incentive scheme areassessed based on the estimated bonuses which will be granted tothose managers who will achieve certain individual performancegoals weighted with the likelihood that the Company delivers theplanned profitability targets upon the same period. Provisionsfor the long-term incentive scheme are assessed on the basis ofthe estimated trends of a performance indicator as benchmarkedagainst a group of international oil companies. Jubilee awardsare benefits due following the attainment of a minimum period ofservice and, for the Italian companies, consist of an in-kindremuneration.

Present value of employee benefits, estimated by applyingactuarial techniques, consisted of the following:

|   | **Foreign pension plans** |   |
|--------|---------------------------|--------|
|   |                           |   |

| (euro        million) |   | **TFR** | ** ** | **Gross liability** | ** ** | **Plan assets** | ** ** | **FISDE        and other foreign medical plans** | ** ** | **Other benefits** | ** ** | **Total** |
|-----------------------|--------|---------|------------|---------------------|------------|-----------------|------------|--------------------------------------------------|------------|--------------------|------------|-----------|
|                  |   |         |       |                     |       |                 |       |                                                  |       |                    |       |           |

| **2011**                                                                                    |   |    |   |   |      |   |   |     |   |   |    |   |   |    |   |   |      |   |
|---------------------------------------------------------------------------------------------|--------|---------|--------|--------|-----------|--------|--------|----------|--------|--------|---------|--------|--------|---------|--------|--------|-----------|--------|
| **Present        value of benefit liabilities and plan assets at beginning        of year** |   | **433** |   |   | **1,109** |   |   | **(468** | **)**  |   | **120** |   |   | **206** |   |   | **1,400** |   |
| Current cost                                                                                |   |    |   |   | 41        |   |   |     |   |   | 2       |   |   | 53      |   |   | 96        |   |
| Interest        cost                                                                        |   | 20      |   |   | 39        |   |   |     |   |   | 6       |   |   | 4       |   |   | 69        |   |
| Amendments                                                                                  |   |    |   |   | 6         |   |   |     |   |   |    |   |   |    |   |   | 6         |   |
| Expected        return on plan assets                                                       |   |    |   |   |      |   |   | (17      | )      |   |    |   |   |    |   |   | (17       | )      |
| Employee contributions                                                                      |   |    |   |   |      |   |   | (36      | )      |   |    |   |   |    |   |   | (36       | )      |
| Actuarial        gains/losses                                                               |   | (13     | )      |   | (24       | )      |   | (7       | )      |   | 3       |   |   |    |   |   | (41       | )      |
| Benefits paid                                                                               |   | (50     | )      |   | (26       | )      |   | 15       |   |   | (12     | )      |   | (55     | )      |   | (128      | )      |
| Currency        translation differences and other changes                                   |   | 1       |   |   | (35       | )      |   | (57      | )      |   | (1      | )      |   | (1      | )      |   | (93       | )      |
| **Present value of benefit liabilities and plan        assets at end of year**              |   | **391** |   |   | **1,110** |   |   | **(570** | **)**  |   | **118** |   |   | **207** |   |   | **1,256** |   |
| **2012**                                                                                    |   |    |   |   |      |   |   |     |   |   |    |   |   |    |   |   |      |   |
| **Present value of benefit liabilities and plan        assets at beginning of year**        |   | **391** |   |   | **1,110** |   |   | **(570** | **)**  |   | **118** |   |   | **207** |   |   | **1,256** |   |
| Current        cost                                                                         |   |    |   |   | 43        |   |   |     |   |   | 1       |   |   | 53      |   |   | 97        |   |
| Interest cost                                                                               |   | 15      |   |   | 41        |   |   |     |   |   | 5       |   |   | 5       |   |   | 66        |   |
| Expected        return on plan assets                                                       |   |    |   |   |      |   |   | (22      | )      |   |    |   |   |    |   |   | (22       | )      |
| Employee contributions                                                                      |   |    |   |   |      |   |   | (27      | )      |   |    |   |   |    |   |   | (27       | )      |
| Actuarial        gains/losses                                                               |   | 63      |   |   | 63        |   |   | (2       | )      |   | 22      |   |   | (2      | )      |   | 144       |   |
| Benefits paid                                                                               |   | (34     | )      |   | (35       | )      |   | 20       |   |   | (7      | )      |   | (47     | )      |   | (103      | )      |
| Curtailments        and settlements                                                         |   |    |   |   | (3        | )      |   |     |   |   |    |   |   |    |   |   | (3        | )      |
| Currency translation differences and other        changes                                   |   | (81     | )      |   | 74        |   |   | (18      | )      |   | (4      | )      |   | (27     | )      |   | (56       | )      |
| **Present        value of benefit liabilities and plan assets at end of        year**       |   | **354** |   |   | **1,293** |   |   | **(619** | **)**  |   | **135** |   |   | **189** |   |   | **1,352** |   |
|                                                                                        |   |         |        |   |           |        |   |          |        |   |         |        |   |         |        |   |           |        |

Negative currency translation differences and other changesfor euro 56 million included the deconsolidation of Snam for euro113 million.

Other benefits of euro 189 million (euro 207 million atDecember 31, 2011) primarily concerned the deferred monetaryincentive plan for euro 107 million (euro 118 million at December31, 2011), Jubilee awards for euro 56 

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million (euro 61 million at December 31, 2011) and thelong-term incentive plan for euro 11 million (euro 7 million atDecember 31, 2011).

The reconciliation analysis of benefit obligations and planassets was as follows:

|   |   | **TFR** |   | **Foreign pension plans** |   | **FISDE and other foreign medical plans** |   | **Other benefits** |
|--------|--------|---------|--------|---------------------------|--------|-------------------------------------------|--------|--------------------|
|   |   |         |   |                           |   |                                           |   |                    |

| (euro        million) |   | **Dec. 31, 2011** |   | **Dec. 31, 2012** |   | **Dec. 31, 2011** |   | **Dec. 31, 2012** |   | **Dec. 31, 2011** |   | **Dec. 31, 2012** |   | **Dec. 31, 2011** |   | **Dec. 31, 2012** |
|-----------------------|--------|-------------------|--------|-------------------|--------|-------------------|--------|-------------------|--------|-------------------|--------|-------------------|--------|-------------------|--------|-------------------|
|                  |   |                   |   |                   |   |                   |   |                   |   |                   |   |                   |   |                   |   |                   |

| Present value of benefit obligations with plan        assets              |   |    |   |    |   |   | 877     |   |   | 1,009   |   |   |    |   |   |    |   |   |    |   |    |
|---------------------------------------------------------------------------|--------|---------|--------|---------|--------|--------|---------|--------|--------|---------|--------|--------|---------|--------|--------|---------|--------|--------|---------|--------|---------|
| Present        value of plan assets                                       |   |    |   |    |   |   | (570    | )      |   | (619    | )      |   |    |   |   |    |   |   |    |   |    |
| **Net present value of benefit obligations with        plan assets**      |   |    |   |    |   |   | **307** |   |   | **390** |   |   |    |   |   |    |   |   |    |   |    |
| **Present        value of benefit obligations without plan assets**       |   | **391** |   | **354** |   |   | **233** |   |   | **284** |   |   | **118** |   |   | **135** |   |   | **207** |   | **189** |
| Actuarial gains (losses) not recognized                                   |   | 3       |   | (60     | )      |   | (139    | )      |   | (212    | )      |   | (11     | )      |   | (34     | )      |   |    |   |    |
| Past        service cost not recognized                                   |   |    |   |    |   |   | (67     | )      |   | (62     | )      |   | (3      | )      |   | (2      | )      |   |    |   |    |
| **Net liabilities recognized in provisions for        employee benefits** |   | **394** |   | **294** |   |   | **334** |   |   | **400** |   |   | **104** |   |   | **99**  |   |   | **207** |   | **189** |
|                                                                      |   |         |   |         |        |   |         |        |   |         |        |   |         |        |   |         |        |   |         |   |         |

The net liability for foreign employee pension plans of euro400 million (euro 334 million at December 31, 2011) included theliabilities related to joint ventures operating in explorationand production activities for euro 149 million and euro 182million at December 31, 2011 and 2012, respectively. A receivableof an amount equivalent to such liability was recorded.

Costs charged to the profit and loss account net ofdiscontinued operations were as follows:

| (euro        million) |   | **TFR** |   | **Foreign pension plans** |   | **FISDE and other foreign medical plans** |   | **Other benefits** |   | **Total** |
|-----------------------|--------|---------|--------|---------------------------|--------|-------------------------------------------|--------|--------------------|--------|-----------|
|                  |   |         |   |                           |   |                                           |   |                    |   |           |

| **2011**                                      |   |   |   |   |   |   |   |   |   |   |   |   |   |    |   |
|-----------------------------------------------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|---------|--------|
| Current        cost                           |   |   |   |   | 41     |   |   | 2      |   |   | 48     |   |   | 91      |   |
| Interest cost                                 |   | 16     |   |   | 39     |   |   | 6      |   |   | 4      |   |   | 65      |   |
| Expected        return on plan assets         |   |   |   |   | (17    | )      |   |   |   |   |   |   |   | (17     | )      |
| Amortization of actuarial gains/losses        |   |   |   |   | 8      |   |   |   |   |   | (1     | )      |   | 7       |   |
| Effect of        curtailments and settlements |   |   |   |   | 2      |   |   |   |   |   |   |   |   | 2       |   |
|                                          |   | **16** |   |   | **73** |   |   | **8**  |   |   | **51** |   |   | **148** |   |
| **2012**                                      |   |   |   |   |   |   |   |   |   |   |   |   |   |    |   |
| Current cost                                  |   |   |   |   | 43     |   |   | 1      |   |   | 53     |   |   | 97      |   |
| Interest        cost                          |   | 15     |   |   | 41     |   |   | 5      |   |   | 5      |   |   | 66      |   |
| Expected return on plan assets                |   |   |   |   | (22    | )      |   |   |   |   |   |   |   | (22     | )      |
| Amortization        of actuarial gains/losses |   |   |   |   | 11     |   |   | 1      |   |   | (2     | )      |   | 10      |   |
| Effect of curtailments and settlements        |   |   |   |   | (3     | )      |   |   |   |   |   |   |   | (3      | )      |
|                                          |   | **15** |   |   | **70** |   |   | **7**  |   |   | **56** |   |   | **148** |   |
|                                          |   |        |        |   |        |        |   |        |        |   |        |        |   |         |        |

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The main actuarial assumptions used in the evaluation ofpost-retirement benefit obligations at year end and in theestimate of costs expected for 2013 were as follows:

| (%)    |   | **TFR** |   | **Foreign pension plans** |   | **FISDE and other foreign medical plans** |   | **Other benefits** |
|--------|--------|---------|--------|---------------------------|--------|-------------------------------------------|--------|--------------------|
|   |   |         |   |                           |   |                                           |   |                    |

| **2011**                                                    |   |   |   |     |   |   |   |    |
|-------------------------------------------------------------|--------|--------|--------|----------|--------|--------|--------|---------|
| Discount        rate                                        |   | 4.8    |   | 2.6-15.5 |   | 4.8    |   | 3.6-4.8 |
| Weighted average expected return rate on plan        assets |   |   |   | 3.2-12.3 |   |   |   |    |
| Rate of        compensation increase                        |   | 3.0    |   | 2.0-12.3 |   |   |   |    |
| Rate of price inflation                                     |   | 2.0    |   | 0.1-13.8 |   | 2.0    |   | 2.0     |
| **2012**                                                    |   |   |   |     |   |   |   |    |
| Discount rate                                               |   | 3.0    |   | 1.9-15.5 |   | 3.0    |   | 1.2-3.0 |
| Weighted        average expected return rate on plan assets |   |   |   | 2.9-10.6 |   |   |   |    |
| Rate of compensation increase                               |   | 3.0    |   | 2.0-14.0 |   |   |   |    |
| Rate of        price inflation                              |   | 2.0    |   | 0.5-13.8 |   | 2.0    |   | 2.0     |
|                                                        |   |        |   |          |   |        |   |         |

Italian plans were based on mortality tables prepared byRagioneria Generale dello Stato (RG48), with the exception of themedical plan FISDE for which were adopted mortality tablesprepared by Istat (Istat Proiettate e Selezionate - IPS55).Expected return rates by plan assets have been determined byreference to quoted prices expressed in regulated markets.

Plan assets consisted of the following:

| (%)    |   | **Plan assets** |   | **Expected return** |
|--------|--------|-----------------|--------|---------------------|
|   |   |                 |   |                     |

| Securities  |   | 11.3      |   | 4.5-13.0 |
|-------------|--------|-----------|--------|----------|
| Bonds       |   | 56.4      |   | 1.5-11.0 |
| Real estate |   | 4.7       |   | 5.2-5.7  |
| Other       |   | 27.6      |   | 0.5-10.0 |
|        |   | **100.0** |   |     |
|        |   |           |   |          |

The actual return of the plan assets amounted to euro 24million (the same amount as of December 31, 2011).

With reference to healthcare plans, the effects deriving froma 1% change of the actuarial assumptions of medical costs were asfollows:

| (euro million) |   | **1% Increase** |   | **1% Decrease** |
|----------------|--------|-----------------|--------|-----------------|
|           |   |                 |   |                 |

| Impact on current costs and interest costs |   | 1  |   | (1  | ) |
|--------------------------------------------|--------|----|--------|-----|---|
| Impact on        net benefit obligation    |   | 19 |   | (16 | ) |

|   |   |  |   |  |
|--------|--------|--|--------|--|

The amount expected to be accrued to employee benefit plansfor 2013 amounted to euro 114 million, of which euro 66 millionreferred to defined benefit plans.

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The break-down of changes in the actuarial estimates of thenet liability with respect to prior year amounts due to thedifference between actual data at the end of the reporting periodand the corresponding prior year actuarial assumptions isprovided below:

| (euro        million) |   | **TFR** |   | **Foreign pension plans** |   | **FISDE and other foreign medical plans** |   | **Other benefits** |
|-----------------------|--------|---------|--------|---------------------------|--------|-------------------------------------------|--------|--------------------|
|                  |   |         |   |                           |   |                                           |   |                    |

| **2008**                                |   |   |   |   |   |   |   |   |   |   |   |   |
|-----------------------------------------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|
| Impact on        net benefit obligation |   | 7      |   |   | 15     |   |   | 3      |   |   | 1      |   |
| Impact on plan assets                   |   |   |   |   | (62    | )      |   |   |   |   |   |   |
| **2009**                                |   |   |   |   |   |   |   |   |   |   |   |   |
| Impact on net benefit obligation        |   | (7     | )      |   | 4      |   |   | 3      |   |   | 2      |   |
| Impact on        plan assets            |   |   |   |   | (16    | )      |   |   |   |   |   |   |
| **2010**                                |   |   |   |   |   |   |   |   |   |   |   |   |
| Impact on        net benefit obligation |   | (1     | )      |   | (31    | )      |   | 1      |   |   | 4      |   |
| Impact on plan assets                   |   |   |   |   | 3      |   |   |   |   |   |   |   |
| **2011**                                |   |   |   |   |   |   |   |   |   |   |   |   |
| Impact on net benefit obligation        |   | 3      |   |   | (21    | )      |   | 2      |   |   |   |   |
| Impact on        plan assets            |   |   |   |   | 10     |   |   |   |   |   |   |   |
| **2012**                                |   |   |   |   |   |   |   |   |   |   |   |   |
| Impact on        net benefit obligation |   | 3      |   |   | 16     |   |   | (3     | )      |   | (5     | )      |
| Impact on plan assets                   |   |   |   |   | (2     | )      |   |   |   |   |   |   |
|                                    |   |        |        |   |        |        |   |        |        |   |        |        |

The present value of liabilities for employeebenefit plans and the fair value of plan assets consisted of thefollowing:

| (euro        million) |   | **Dec. 31, 2008** |   | **Dec. 31, 2009** |   | **Dec. 31, 2010** |   | **Dec. 31, 2011** |   | **Dec. 31, 2012** |
|-----------------------|--------|-------------------|--------|-------------------|--------|-------------------|--------|-------------------|--------|-------------------|
|                  |   |                   |   |                   |   |                   |   |                   |   |                   |

| **Present value of liabilities**             |   |      |   |   |      |   |   |      |   |   |      |   |   |      |   |
|----------------------------------------------|--------|-----------|--------|--------|-----------|--------|--------|-----------|--------|--------|-----------|--------|--------|-----------|--------|
| TFR                                          |   | 443       |   |   | 447       |   |   | 433       |   |   | 391       |   |   | 354       |   |
| Foreign pension plans                        |   | 802       |   |   | 1,146     |   |   | 1,109     |   |   | 1,110     |   |   | 1,293     |   |
| FISDE and        other foreign medical plans |   | 94        |   |   | 115       |   |   | 120       |   |   | 118       |   |   | 135       |   |
| Other benefits                               |   | 168       |   |   | 188       |   |   | 206       |   |   | 207       |   |   | 189       |   |
|                                         |   | **1,507** |   |   | **1,896** |   |   | **1,868** |   |   | **1,826** |   |   | **1,971** |   |
| **Fair value of plan assets**                |   |      |   |   |      |   |   |      |   |   |      |   |   |      |   |
| Foreign        pension plans                 |   | (453      | )      |   | (500      | )      |   | (468      | )      |   | (570      | )      |   | (619      | )      |
|                                         |   | **(453**  | **)**  |   | **(500**  | **)**  |   | **(468**  | **)**  |   | **(570**  | **)**  |   | **(619**  | **)**  |
| **Present        value of net liabilities**  |   |      |   |   |      |   |   |      |   |   |      |   |   |      |   |
| TFR                                          |   | 443       |   |   | 447       |   |   | 433       |   |   | 391       |   |   | 354       |   |
| Foreign        pension plans                 |   | 349       |   |   | 646       |   |   | 641       |   |   | 540       |   |   | 674       |   |
| FISDE and other foreign medical plans        |   | 94        |   |   | 115       |   |   | 120       |   |   | 118       |   |   | 135       |   |
| Other        benefits                        |   | 168       |   |   | 188       |   |   | 206       |   |   | 207       |   |   | 189       |   |
|                                         |   | **1,054** |   |   | **1,396** |   |   | **1,400** |   |   | **1,256** |   |   | **1,352** |   |
|                                         |   |           |        |   |           |        |   |           |        |   |           |        |   |           |        |

 

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**29 Deferred tax liabilities******Deferred tax liabilities were recognized net of theamounts of deferred tax assets which can be offset for euro 3,630million (euro 4,045 million at December 31, 2011).

| (euro million) | **Amount         at Dec. 31, 2011** |   | **Additions** |   | **Deductions** |   | **Currency translation        differences** |   | **Changes in the scope of        consolidation** |   | **Other changes** |   | **Amount         at Dec. 31, 2012** |
|----------------|-------------------------------------|--------|---------------|--------|----------------|--------|---------------------------------------------|--------|--------------------------------------------------|--------|-------------------|--------|-------------------------------------|
|           |                                     |   |               |   |                |   |                                             |   |                                                  |   |                   |   |                                     |

|   | **7,120** |   | 1,656 |   | (1,105) |   | (67) |   | (1,270) |   | 406 |   | **6,740** |
|--------|-----------|--------|-------|--------|---------|--------|------|--------|---------|--------|-----|--------|-----------|
|   |           |   |       |   |         |   |      |   |         |   |     |   |           |

Deferred tax assets and liabilities consisted of thefollowing:

| (euro million) |   | **Dec. 31, 2011** |   | **Dec. 31, 2012** |
|----------------|--------|-------------------|--------|-------------------|
|           |   |                   |   |                   |

| Deferred tax liabilities                            |   | 11,165    |   |   | 10,370    |   |
|-----------------------------------------------------|--------|-----------|--------|--------|-----------|--------|
| Deferred        tax assets available for offset     |   | (4,045    | )      |   | (3,630    | )      |
|                                                |   | **7,120** |   |   | **6,740** |   |
| Deferred        tax assets not available for offset |   | (5,514    | )      |   | (4,913    | )      |
|                                                |   | **1,606** |   |   | **1,827** |   |
|                                                |   |           |        |   |           |        |

Net deferred tax liabilities of euro 6,740 million (euro 7,120million at December 31, 2011) comprised the recognition of thedeferred tax effect against equity on the fair value evaluationof derivatives designated as cash flow hedge amounting to euro 9million of deferred tax assets.

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The most significant temporary differences giving rise to netdeferred tax liabilities are disclosed below:

| (euro        million) | **Carrying amount at Dec.        31, 2011** |   | **Additions** |   | **Deductions** |   | **Currency translation        differences** |   | **Changes in the scope of        consolidation** |   | **Other changes** |   | **Carrying amount at Dec.        31, 2012** |
|-----------------------|---------------------------------------------|--------|---------------|--------|----------------|--------|---------------------------------------------|--------|--------------------------------------------------|--------|-------------------|--------|---------------------------------------------|
|                  |                                             |   |               |   |                |   |                                             |   |                                                  |   |                   |   |                                             |

| **Deferred tax liabilities**                                                                                               |   |        |   |   |       |   |   |       |   |   |    |   |   |       |   |   |    |   |   |        |   |
|----------------------------------------------------------------------------------------------------------------------------|--------|-------------|--------|--------|------------|--------|--------|------------|--------|--------|---------|--------|--------|------------|--------|--------|---------|--------|--------|-------------|--------|
| Accelerated        tax depreciation                                                                                        |   | 7,225       |   |   | 1,116      |   |   | (172       | )      |   | (58     | )      |   | (668       | )      |   | (37     | )      |   | 7,406       |   |
| Difference between the fair value and the        carrying amount of assets acquired following business        combinations |   | 1,306       |   |   | 84         |   |   | (191       | )      |   | (21     | )      |   | (17        | )      |   |    |   |   | 1,161       |   |
| Site        restoration and abandonment (tangible assets)                                                                  |   | 444         |   |   | 178        |   |   | (29        | )      |   | 11      |   |   | (18        | )      |   | (49     | )      |   | 537         |   |
| Application of the weighted average cost method        in evaluation of inventories                                        |   | 213         |   |   | 7          |   |   | (68        | )      |   |    |   |   | (66        | )      |   | 3       |   |   | 89          |   |
| Capitalized        interest expense                                                                                        |   | 158         |   |   |       |   |   | (11        | )      |   |    |   |   | (120       | )      |   | (3      | )      |   | 24          |   |
| Other                                                                                                                      |   | 1,819       |   |   | 271        |   |   | (634       | )      |   | 1       |   |   | (381       | )      |   | 77      |   |   | 1,153       |   |
|                                                                                                                       |   | **11,165**  |   |   | **1,656**  |   |   | **(1,105** | **)**  |   | **(67** | **)**  |   | **(1,270** | **)**  |   | **(9**  | **)**  |   | **10,370**  |   |
| **Deferred tax assets**                                                                                                    |   |        |   |   |       |   |   |       |   |   |    |   |   |       |   |   |    |   |   |        |   |
| Site        restoration and abandonment (provisions for        contingencies)                                              |   | (1,979      | )      |   | (320       | )      |   | 67         |   |   | 4       |   |   | 106        |   |   | (31     | )      |   | (2,153      | )      |
| Depreciation and amortization                                                                                              |   | (2,033      | )      |   | (336       | )      |   | 27         |   |   | 36      |   |   | 66         |   |   | 222     |   |   | (2,018      | )      |
| Accruals        for impairment losses and provisions for contingencies                                                     |   | (1,796      | )      |   | (714       | )      |   | 538        |   |   |    |   |   | 102        |   |   | (14     | )      |   | (1,884      | )      |
| Unrealized intercompany profits                                                                                            |   | (777        | )      |   | (135       | )      |   | 178        |   |   | 4       |   |   | 33         |   |   | 4       |   |   | (693        | )      |
| Assets        revaluation as per Laws No. 342/2000 and No. 448/2001                                                        |   | (621        | )      |   |       |   |   |       |   |   |    |   |   | 617        |   |   | 3       |   |   | (1          | )      |
| Carry-forward tax losses                                                                                                   |   | (600        | )      |   | (799       | )      |   | 273        |   |   | 10      |   |   | 11         |   |   | (2      | )      |   | (1,107      | )      |
| Other                                                                                                                      |   | (2,286      | )      |   | (520       | )      |   | 262        |   |   | 15      |   |   | 284        |   |   | (69     | )      |   | (2,314      | )      |
|                                                                                                                       |   | **(10,092** | **)**  |   | **(2,824** | **)**  |   | **1,345**  |   |   | **69**  |   |   | **1,219**  |   |   | **113** |   |   | **(10,170** | **)**  |
| **Impairments        of deferred tax assets**                                                                              |   | **533**     |   |   | **1,182**  |   |   | **(19**    | **)**  |   | **(11** | **)**  |   | **(11**    | **)**  |   | **(47** | **)**  |   | **1,627**   |   |
|                                                                                                                       |   | **(9,559**  | **)**  |   | **(1,642** | **)**  |   | **1,326**  |   |   | **58**  |   |   | **1,208**  |   |   | **66**  |   |   | **(8,543**  | **)**  |
| **Net        deferred tax liabilities**                                                                                    |   | **1,606**   |   |   | **14**     |   |   | **221**    |   |   | **(9**  | **)**  |   | **(62**    | **)**  |   | **57**  |   |   | **1,827**   |   |
|                                                                                                                       |   |             |        |   |            |        |   |            |        |   |         |        |   |            |        |   |         |        |   |             |        |

Italian taxation law, modified by Article 23 of Law Decree No.98/2011, allows the carry-forward of tax losses indefinitely.Foreign taxation laws generally allow the carry-forward of taxlosses over a period longer than the five subsequent years, andin many cases, indefinitely. The tax rate applied to determinethe portion of carry-forwards tax losses to be utilized equaledto an average rate of 25.2% for Italian companies, by consideringthe different taxation for energy companies and companiesincluded in the consolidation statement for fiscal purposes, andan average rate of 34.2% for foreign companies.

Carry-forward tax losses amounted to euro 3,222 million andcan be used indefinitely for euro 3,171 million. Carry-forwardtax losses regarded Italian companies for euro 1,596 million andforeign companies euro 1,626 million. Carry-forward tax lossesamounted to euro 2,739 million which are likely to be utilizedagainst future taxable profit and were in respect of Italiancompanies for euro 1,503 million and foreign subsidiaries foreuro 1,236 million. Deferred tax assets recognized on theselosses amounted to euro 379 million and euro 423 million,respectively.

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**30 Other non-current liabilities**

| (euro million) |   | **Dec. 31, 2011** |   | **Dec. 31, 2012** |
|----------------|--------|-------------------|--------|-------------------|
|           |   |                   |   |                   |

| Fair value of non-hedging derivatives              |   | 591       |   | 271       |
|----------------------------------------------------|--------|-----------|--------|-----------|
| Fair value        of cash flow hedging derivatives |   | 37        |   | 13        |
| Other payables due to tax authorities              |   |      |   | 1         |
| Other        payables                              |   | 70        |   | 57        |
| Other liabilities                                  |   | 2,202     |   | 1,635     |
|                                               |   | **2,900** |   | **1,977** |
|                                               |   |           |   |           |

Derivative fair values were estimated on the basis of marketquotations provided by primary info-provider, or in the absenceof market information, appropriate valuation techniques commonlyused on the marketplace.

The fair value of non-hedging derivative contracts ispresented below:

|   |   | **Dec. 31, 2011** |   | **Dec. 31, 2012** |
|--------|--------|-------------------|--------|-------------------|
|   |   |                   |   |                   |

| (euro        million) |    | **Fair value** | **  ** | **Purchase        commitments** | **  ** | **Sale commitments** | **  ** | **Fair value** | **  ** | **Purchase        commitments** | **  ** | **Sale commitments** |
|-----------------------|--------------|----------------|------------------|---------------------------------|------------------|----------------------|------------------|----------------|------------------|---------------------------------|------------------|----------------------|
|                  |         |                |             |                                 |             |                      |             |                |             |                                 |             |                      |

| **Derivatives on exchange rate**          |   |    |   |      |   |      |   |    |   |      |   |      |
|-------------------------------------------|--------|---------|--------|-----------|--------|-----------|--------|---------|--------|-----------|--------|-----------|
| Currency        swap                      |   | 1       |   |      |   | 3         |   | 42      |   | 2,055     |   | 420       |
| Other                                     |   |    |   |      |   |      |   | 1       |   | 3         |   |      |
|                                      |   | **1**   |   |      |   | **3**     |   | **43**  |   | **2,058** |   | **420**   |
| **Derivatives on interest rate**          |   |    |   |      |   |      |   |    |   |      |   |      |
| Interest        rate swap                 |   | 255     |   | 50        |   | 4,136     |   | 65      |   |      |   | 530       |
|                                      |   | **255** |   | **50**    |   | **4,136** |   | **65**  |   |      |   | **530**   |
| **Derivatives        on commodities**     |   |    |   |      |   |      |   |    |   |      |   |      |
| Over the counter                          |   | 310     |   | 3,760     |   | 416       |   | 89      |   | 405       |   | 952       |
| Future                                    |   | 3       |   | 14        |   |      |   | 1       |   | 66        |   | 9         |
| Other                                     |   | 22      |   |      |   | 126       |   | 13      |   |      |   | 33        |
|                                      |   | **335** |   | **3,774** |   | **542**   |   | **103** |   | **471**   |   | **994**   |
| **Options embedded in convertible bonds** |   |    |   |      |   |      |   | **60**  |   |      |   |      |
|                                      |   | **591** |   | **3,824** |   | **4,681** |   | **271** |   | **2,529** |   | **1,944** |
|                                      |   |         |   |           |   |           |   |         |   |           |   |           |

Fair values of non-hedging derivatives of euro 271 million(euro 591 million at December 31, 2011) consisted of: (i) euro198 million (euro 577 million at December 31, 2011) ofderivatives that did not meet the formal criteria to bedesignated as hedges under IFRS because they were entered into inorder to manage net business exposures to foreign currencyexchange rates, interest rates or commodity prices. Therefore,such derivatives were not related to specific trade or financingtransactions; (ii) euro 60 million related to the call optionembedded in the bonds exchangeable into Galp Energia SGPS SAordinary shares (further information is disclosed in note 26– Long-term debt and current portion of long-term debt.);and (iii) euro 13 million (euro 14 million at December 31, 2011)related to derivatives embedded in the pricing formulas oflong-term gas supply contracts in the Exploration& Production segment.

Fair value of cash flow hedge derivatives amounted to euro 13million (euro 37 million at December 31, 2011) and pertained tothe Gas & Power segment. Those derivatives were designated tohedge exchange rate and commodity risk exposures as described innote 13 – Other current assets. Fair value of contractsexpiring beyond 2013 is disclosed in note 20 – Othernon-current receivables; fair value of contracts expiring by 2013is disclosed in note 25 – Other current liabilities and innote 13 – Other current assets. The effects of fair valueevaluation of cash flow hedge derivatives are disclosed in note32 – Shareholders’ equity and in note 36 –Operating expenses.

The nominal value of these derivatives referred to purchaseand sale commitments for euro 24 million and euro 223 million,respectively (euro 340 million and euro 310 million at December31, 2011, respectively).

Information on the hedged risks and the hedging policies isshown in note 34 – Guarantees, commitments and risks - Riskfactors.

Other liabilities of euro 1,635 million (euro 2,202 million atDecember 31, 2011) comprised advances received from Suezfollowing a long-term agreement for supplying natural gas andelectricity of euro 968 million (euro 1,061 million at December31, 2011) and advances relating to amounts of gas of euro 380million (euro 299 million at 

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December 31, 2011) which were off-taken below the minimum takefor the year by certain of Eni’s clients, reflectingtake-or-pay clauses contained in the long-term sale contracts.Management believes that the underlying gas volumes will beoff-taken beyond the twelve-month time horizon.

**31 Discontinued operations, assets heldfor sale and liabilities directly associated with assets held forsale****Discontinued operations***Snam*On October 15, 2012, after the occurrence of conditionsprecedent, including in particular, the Antitrust Authorityapproval, Eni finalized the sale to Cassa Depositi e Prestiti SpA("CDP") of a stake of 30% less one share in the votingshare capital of Snam and as part of the transaction lost controlover the investee. The transaction implemented the provisions ofLaw No. 27/2012, pursuant to which Eni was mandated to divest itscontrolling shareholding in Snam in accordance with the model ofownership unbundling and required to fully divest its residualinterests in Snam with no time limits. The transaction involved1,013,619,522 ordinary shares of Snam at a price of euro 3.47 ashare yielding a capital gain through profit of euro 2,019million. Total consideration of the sale amounted to euro 3,517million. The exclusion of Snam from consolidation reducedfinancial debt by euro 12,448 million. Prior to the divestment,Snam had already reimbursed intercompany loans via third-partyfinancing. Including the sale of a further 5% interest in Snammade to institutional investors in July, after the transactionwith CDP, the residual interest of Eni in Snam is equal to 20.23%at the balance sheet date. The remaining interest was classifiedas an available-for-sale financial instrument and measured atfair value also considering the sterilization of the votingrights as provided for by the Decree of the President of theCouncil of Ministers issued on May 25, 2012 (further informationis disclosed in note 17 – Investments).

Snam through its wholly-owned subsidiaries Snam Rete Gas SpA,GNL Italia SpA, Stoccaggi Gas Italia SpA and Italgas SpA,operates the natural gas transport activity by means of largebackbones, the distribution of gas to residential and commercialusers and small enterprises located in urban areas throughlow-pressures networks, re-gasification services of LNG andstorage services through depleted fields designed to supportstrategic storage of gas and modulation needs of sellingcompanies considering the seasonality in gas demand. As theCompany considers those activities to be a major line ofbusiness, management recorded results of operations of Snam andits subsidiaries as discontinued operations.

As provided for by International Financial Reporting Standards(IFRS 5), the Snam Group was excluded from the scope ofconsolidation of Eni from the date of loss of control. Therefore,the economic amounts represented as discontinued operationsincluded intragroup eliminations. In particular: (i) in theprofit and loss account, results relating to discontinuedoperations including the gain on disposal and the fair valuerevaluation of the residual interest at the date of loss ofcontrol, net of tax effects, are presented in a specific lineitem before net profit of the year; and (ii) in the statement ofcash flows, net cash provided by operating activities relating todiscontinued operations are separately indicated.

The amounts relating to discontinued operations comprised inthe profit and loss account and the statement of cash flowspresent the relevant comparisons.

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The main line items of profit and loss and cash flow statementof the discontinued operations net of intra-group transactionsare provided below:

| (euro million) |   | **2010** |   | **2011** |   | **2012** |
|----------------|--------|----------|--------|----------|--------|----------|
|           |   |          |   |          |   |          |

| Revenues                                            |   |             |   | 1,895  |   |   | 1,906  |   |   | 1,886   |   |
|-----------------------------------------------------|--------|------------------|--------|--------|--------|--------|--------|--------|--------|---------|--------|
| Operating        expenses                           |   |             |   | 1,266  |   |   | 1,274  |   |   | 998     |   |
| Operating profit                                    |   |             |   | 629    |   |   | 632    |   |   | 888     |   |
| Finance        income (expense)                     |   |             |   | 22     |   |   | 17     |   |   | (51     | )      |
| Income (expense) from investments                   |   |             |   | 44     |   |   | 48     |   |   | 3,508   |   |
| Profit        before income taxes                   |   |             |   | 695    |   |   | 697    |   |   | 4,345   |   |
| Income taxes                                        |   |             |   | (576   | )      |   | (771   | )      |   | (613    | )      |
| Net profit                                          |   |             |   | 119    |   |   | (74    | )      |   | 3,732   |   |
| *- attributable to Eni*                             |   |             |   | *66*   |   |   | *(42*  | *)*    |   | *3,590* |   |
| *-        attributable to non-controlling interest* |   |             |   | *53*   |   |   | *(32*  | *)*    |   | *142*   |   |
| Earnings per share                                  |   | (euro per share) |   | 0.02   |   |   | (0.01  | )      |   | 0.99    |   |
| Net cash        provided by operating activities    |   |             |   | 554    |   |   | 619    |   |   | 15      |   |
| Net cash flow from investing activities             |   |             |   | (1,411 | )      |   | (1,516 | )      |   | (1,004  | )      |
| Net cash        used in financing activities        |   |             |   | (356   | )      |   | (356   | )      |   | 11,172  |   |
| Capital expenditures                                |   |             |   | 1,420  |   |   | 1,529  |   |   | 756     |   |
|                                                |   |             |   |        |        |   |        |        |   |         |        |

Income (expense) from investments of euro 3,508 millioncomprised the gain on divestment to Cassa Depositi e Prestiti SpAfor euro 2,019 million and the fair value revaluation of theresidual interest at the date of loss of control for euro 1,451million.

Income taxes of euro 613 million comprised the tax effect onthe gain on divestment to Cassa Depositi e Prestiti SpA for euro27 million and on the fair value revaluation of the residualinterest at the date of loss of control for euro 18 million.

Profits earned by Snam as discontinued operations do notrepresent Snam as if it was a standalone entity, since theprofits on transactions with Eni Group are included in continuingoperations as provided for by the guidelines of IFRS 5. Forfurther information about the transaction see the InformationStatement published in application of the Consob Regulation No.17221/2010 and later additions and modifications and Article 71of the Consob regulation on issuers (available at the Eni websiteeni.com).

**Assets held for sale and liabilities directly associated**As of December 31, 2012, non-current assets held for sale andliabilities directly associated with non-current assets held forsale of euro 516 million and euro 361 million pertained tomarginal assets in the Exploration & Production segment(euro 434 million and euro 361 million, respectively) and toSuper Octanos SA in the Refining & Marketing segment (euro 52million).

**32 Shareholders’ equity**

**Non-controlling interest**

| (euro million) |   | **Net profit** |   | **Shareholders’        equity** |
|----------------|--------|----------------|--------|--------------------------------------|
|           |   |                |   |                                      |

|   |   | **2011** |   | **2012** |   | **Dec. 31, 2011** |   | **Dec. 31, 2012** |
|--------|--------|----------|--------|----------|--------|-------------------|--------|-------------------|
|   |   |          |   |          |   |                   |   |                   |

| Saipem SpA                       |   | 552     |   |   | 627     |   |   | 2,802     |   | 3,232     |
|----------------------------------|--------|---------|--------|--------|---------|--------|--------|-----------|--------|-----------|
| Snam SpA                         |   | 385     |   |   | 356     |   |   | 1,730     |   |      |
| Hindustan Oil Exploration Co Ltd |   | (6      | )      |   | (55     | )      |   | 123       |   | 65        |
| Tigáz Zrt                   |   |    |   |   | (47     | )      |   | 74        |   | 33        |
| Others                           |   | 12      |   |   | 4       |   |   | 192       |   | 184       |
|                             |   | **943** |   |   | **885** |   |   | **4,921** |   | **3,514** |
|                             |   |         |        |   |         |        |   |           |   |           |

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**Eni shareholders’ equity**

| (euro million) |   | **Dec. 31, 2011** |   | **Dec. 31, 2012** |
|----------------|--------|-------------------|--------|-------------------|
|           |   |                   |   |                   |

| Share capital                                                                                          |   | 4,005      |   |   | 4,005      |   |
|--------------------------------------------------------------------------------------------------------|--------|------------|--------|--------|------------|--------|
| Legal        reserve                                                                                   |   | 959        |   |   | 959        |   |
| Reserve for treasury shares                                                                            |   | 6,753      |   |   | 6,201      |   |
| Reserve        related to the fair value of cash flow hedging        derivatives net of the tax effect |   | 49         |   |   | (16        | )      |
| Reserve related to the fair value of        available-for-sale securities net of the tax effect        |   | (8         | )      |   | 144        |   |
| Other        reserves                                                                                  |   | 1,421      |   |   | 292        |   |
| Cumulative currency translation differences                                                            |   | 1,539      |   |   | 943        |   |
| Treasury        shares                                                                                 |   | (6,753     | )      |   | (201       | )      |
| Retained earnings                                                                                      |   | 42,531     |   |   | 41,040     |   |
| Interim        dividend                                                                                |   | (1,884     | )      |   | (1,956     | )      |
| Net profit for the year                                                                                |   | 6,860      |   |   | 7,788      |   |
|                                                                                                   |   | **55,472** |   |   | **59,199** |   |
|                                                                                                   |   |            |        |   |            |        |

**Share capital**At December 31, 2012 the parent company’s issued sharecapital consisted of euro 4,005,358,876 represented by3,634,185,330 ordinary shares without nominal value(4,005,358,876 ordinary shares at December 31, 2011, nominalvalue euro 1 each).

On May 8, 2012, Eni’s Shareholders’ Meeting declareda dividend distribution of euro 0.52 a share, with the exclusionof treasury shares held at the ex-dividend date, in fullsettlement of the 2011 dividend of euro 1.04 a share, of whicheuro 0.52 a share paid as interim dividend. The balance waspayable on May 24, 2012, to shareholders on the register on May21, 2012.

On July 16, 2012, the Extraordinary and OrdinaryShareholders’ Meeting resolved: (i) to eliminate the parvalue of all the ordinary shares representing the share capital;(ii) to cancel 371,173,546 treasury shares without par valuewithout changing the amount of the share capital and reducing the"Reserve for the purchase of treasury shares" by euro6,551 million, equal to the book value of the cancelled shares;(iii) to authorize the Board of Directors to purchase, within 18months from the date of the resolution, up to a 363,000,000ordinary Eni shares on the Mercato Telematico Azionario for atotal amount up to euro 6,000 million; and (iv) to attribute thetotal amount of euro 6,000 million to a specific reserve destinedto the purchase of own shares, formed by using equal amounts fromavailable reserves.

**Legal reserve**This reserve represents earnings restricted from thepayment of dividends pursuant to Article 2430 of the ItalianCivil Code. The legal reserve has reached the maximum amountrequired by the Italian Law.

**Reserve for treasury shares**The reserve for treasury shares represents the reservewhich was established in previous reporting period to repurchasethe Company shares in accordance with resolutions at Eni’sShareholders’ Meetings. The amount of euro 6,201 million(euro 6,753 million at December 31, 2011) included treasuryshares purchased. Changes in the amount of the reserve reflectedthe resolution adopted by Eni Shareholders’ Meeting asdescribed under the item "Share capital".

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**Reserve for available-for-sale financial instruments andcash flow hedging derivatives net of the related tax effect**The valuation at fair value of available-for-sale financialinstruments and cash flow hedging derivatives, net of the relatedtax effect, consisted of the following:

|   |   | **Available-for-sale financial instruments** |   | **Cash flow hedge derivatives** |   | **Total** |
|--------|--------|----------------------------------------------|--------|---------------------------------|--------|-----------|
|   |   |                                              |   |                                 |   |           |

| (euro        million) |   | **Gross reserve** | ** ** | **Deferred tax        liabilities** | ** ** | **Net reserve** | ** ** | **Gross reserve** | ** ** | **Deferred tax        liabilities** | ** ** | **Net reserve** | ** ** | **Gross reserve** | ** ** | **Deferred tax        liabilities** | ** ** | **Net reserve** |
|-----------------------|--------|-------------------|------------|-------------------------------------|------------|-----------------|------------|-------------------|------------|-------------------------------------|------------|-----------------|------------|-------------------|------------|-------------------------------------|------------|-----------------|
|                  |   |                   |       |                                     |       |                 |       |                   |       |                                     |       |                 |       |                   |       |                                     |       |                 |

| **Reserve as of December 31, 2010**                     |   | **(3**  | **)**  |   |   |   |   | **(3**  | **)**  |   | **(275** | **)**  |   | **101** |   |   | **(174** | **)**  |   | **(278** | **)**  |   | **101** |   |   | **(177** | **)**  |
|---------------------------------------------------------|--------|---------|--------|--------|--------|--------|--------|---------|--------|--------|----------|--------|--------|---------|--------|--------|----------|--------|--------|----------|--------|--------|---------|--------|--------|----------|--------|
| Changes of        the year 2011                         |   | (6      | )      |   | 1      |   |   | **(5**  | **)**  |   | 76       |   |   | (7      | )      |   | **69**   |   |   | 70       |   |   | (6      | )      |   | **64**   |   |
| Amount recognized in the profit and loss account        |   |    |   |   |   |   |   |    |   |   | 276      |   |   | (122    | )      |   | **154**  |   |   | 276      |   |   | (122    | )      |   | **154**  |   |
| **Reserve        as of December 31, 2011**              |   | **(9**  | **)**  |   | **1**  |   |   | **(8**  | **)**  |   | **77**   |   |   | **(28** | **)**  |   | **49**   |   |   | **68**   |   |   | **(27** | **)**  |   | **41**   |   |
| Changes of the year 2012                                |   | 157     |   |   | (5     | )      |   | **152** |   |   | (24      | )      |   | 9       |   |   | **(15**  | **)**  |   | 133      |   |   | 4       |   |   | **137**  |   |
| Amount        recognized in the profit and loss account |   |    |   |   |   |   |   |    |   |   | (78      | )      |   | 28      |   |   | **(50**  | **)**  |   | (78      | )      |   | 28      |   |   | **(50**  | **)**  |
| **Reserve as of December 31, 2012**                     |   | **148** |   |   | **(4** | **)**  |   | **144** |   |   | **(25**  | **)**  |   | **9**   |   |   | **(16**  | **)**  |   | **123**  |   |   | **5**   |   |   | **128**  |   |
|                                                    |   |         |        |   |        |        |   |         |        |   |          |        |   |         |        |   |          |        |   |          |        |   |         |        |   |          |        |

Reserve for available-for-sale financial instruments of euro144 million, net of the related tax effect, comprised the fairvalue valuation of the investments for euro 138 million (Galp Energia SGPS SA for euro130 million and Snam SpA for euro 8 million), and othersecurities for euro 6 million.

| **Other reserves**Other reserves amounted to euro 292 million (euro        1,421 million at December 31, 2011) and related to: |
|--------------------------------------------------------------------------------------------------------------------------------|

| • |   | a reserve of euro 247        million represented an increase in Eni’s        shareholders’ equity associated with a business        combination under common control, whereby the parent        company Eni SpA divested its subsidiary Snamprogetti SpA        to Saipem Project SpA, both merged into Saipem SpA, at a        price higher than the book value of the interest        transferred thus decreasing for an equal amount the        non-controlling interest (the same amount as of December        31, 2011); |
|--------|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| • |   | a reserve of euro 157        million deriving from Eni SpA’s equity (the same        amount as of December 31, 2011);                                                                                                                                                                                                                                                                                                                                                                                                              |
| • |   | a reserve of euro 18 million        related to the sale of treasury shares to Saipem managers        upon exercise of stock options (euro 11 million at        December 31, 2011);                                                                                                                                                                                                                                                                                                                                                      |
| • |   | a negative reserve of euro        124 million represented the impact on Eni’s        shareholders’ equity associated with the acquisition        of a non-controlling interest of 45.86% in the subsidiary        Altergaz SA, now Eni Gas & Power France SA (a        negative reserve of euro 119 million at December 31,        2011);                                                                                                                                                                            |
| • |   | a negative reserve of euro 7        million related to the share of "Other comprehensive        income" on equity-accounted entities (negative for        euro 15 million at December 31, 2011);                                                                                                                                                                                                                                                                                                                              |
| • |   | others for euro 1 million.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |

As a consequence of the deconsolidation of Snam, the reservesrecognized following the sale of Italgas SpA and Stoccaggi GasItalia SpA to Snam SpA and the sale of treasury shares followingthe exercise of stock options by Snam managers were reclassifiedto retained earnings (euro 1,140 million).

**Cumulative foreign currency translation differences**The cumulative foreign currency translation differences arosefrom the translation of financial statements denominated incurrencies other than euro.

**Treasury shares**A total of 11,388,287 Eni’s ordinary shares (382,654,833at December 31, 2011) were held in treasury for a total cost ofeuro 201 million (euro 6,753 million at December 31, 2011). Thedecrease of 371,266,546 in treasury 

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shares reflected the resolution by Eni Shareholders’Meeting to cancel 371,173,546 shares as described in the item"Share capital". In addition, 93,000 treasury shareswere sold to eligible Eni managers who exercised stock optionsunder stock-base compensation scheme granted in previous years.Outstanding treasury shares, amounting to euro 161 million (euro240 million at December 31, 2011) and represented by 8,259,520ordinary shares (11,873,205 ordinary shares at December 31,2011), were available for the 200517 and 2007-200818stock option plans.

The number of shares underlying those plans decreased by3,613,685 shares as described below:

| (number) |   | **Stock option** |
|----------|--------|------------------|
|     |   |                  |

| **Number of shares as of December 31, 2011** |   | **11,873,205** |   |
|----------------------------------------------|--------|----------------|--------|
| Rights        exercised                      |   | (93,000        | )      |
| Rights cancelled                             |   | (3,520,685     | )      |
|                                         |   | **(3,613,685** | **)**  |
| **Number of shares as of December 31, 2012** |   | **8,259,520**  |   |
|                                         |   |                |        |

More information about stock option plans is disclosed in note36 – Operating expenses.

**Interim dividend**The interim dividend for the year 2012 amounted toeuro 1,956 million corresponding to euro 0.54 per share, asresolved by the Board of Directors on September 20, 2012, inaccordance with Article 2433-*bis*, paragraph 5 of theItalian Civil Code; the dividend was paid on September 27, 2012.

**Distributable reserves**At December 31, 2012, Eni shareholders’ equityincluded distributable reserves of approximately euro 48,200million.

**Reconciliation of net profit andshareholders’ equity of the parent company Eni SpA toconsolidated net profit and shareholders’ equity**

|    |    | **Net profit** |    | **Shareholders’        equity** |
|--------------|--------------|----------------|--------------|--------------------------------------|
|    |    |                |    |                                      |

| (euro        million) |    | **2011** |         | **2012** |    | **Dec. 31, 2011** |         | **Dec. 31, 2012** |
|-----------------------|--------------|----------|--------------|----------|--------------|-------------------|--------------|-------------------|
|             |    |          |    |          |    |                   |    |                   |

| **As recorded in Eni SpA’s Financial        Statements**                                                                                                                           |   | **4,213** |   |   | **9,078** |   |   | **35,255** |   |   | **40,577** |   |
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|-----------|--------|--------|-----------|--------|--------|------------|--------|--------|------------|--------|
| Excess of        net equity in individual accounts of consolidated        subsidiaries over their corresponding carrying amounts in        the statutory accounts of the parent company |   | 3,972     |   |   | 258       |   |   | 24,355     |   |   | 21,663     |   |
| Consolidation adjustments:                                                                                                                                                              |   |      |   |   |      |   |   |       |   |   |       |   |
| -        difference between purchase cost and underlying carrying        amounts of net equity                                                                                          |   | (320      | )      |   | (2,683    | )      |   | 4,400      |   |   | 1,503      |   |
| - elimination of tax adjustments and compliance        with Group account policies                                                                                                      |   | (248      | )      |   | 1,222     |   |   | (673       | )      |   | 739        |   |
| -        elimination of unrealized intercompany profits                                                                                                                                 |   | 115       |   |   | 638       |   |   | (4,291     | )      |   | (2,652     | )      |
| - deferred taxation                                                                                                                                                                     |   | 71        |   |   | 160       |   |   | 1,337      |   |   | 873        |   |
| - other        adjustments                                                                                                                                                              |   |      |   |   |      |   |   | 10         |   |   | 10         |   |
|                                                                                                                                                                                    |   | **7,803** |   |   | **8,673** |   |   | **60,393** |   |   | **62,713** |   |
| Non-controlling        interest                                                                                                                                                         |   | (943      | )      |   | (885      | )      |   | (4,921     | )      |   | (3,514     | )      |
| **As recorded in Consolidated Financial        Statements**                                                                                                                             |   | **6,860** |   |   | **7,788** |   |   | **55,472** |   |   | **59,199** |   |
|                                                                                                                                                                                    |   |           |        |   |           |        |   |            |        |   |            |        |

 

----

| (17) |    | The vesting        period for the 2002, 2003 and 2004 assignments expired on        July 31, 2010, July 31, 2011 and July 29, 2012,        respectively. |
|------|--------------|----------------------------------------------------------------------------------------------------------------------------------------------------------|
| (18) |    | The vesting        period for the 2006 assignment expired on July 27, 2012.                                                                              |

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**33 Other information**

**Main acquisitions**

*Nuon Belgium NV and Nuon Power Generation Walloon NV*In January 2012, Eni finalized the purchase of a 100%interest in Nuon Belgium NV (now merged in Eni Gas & PowerNV) that provide gas and electricity to the Belgian retail andbusiness market and of a 100% interest in Nuon Power GenerationWalloon NV (now Eni Power Generation NV) that owns lands and allthe rights and permits for the construction of an electric powerplant. The allocation of the cost to assets and liabilities ofeuro 214 million was made on a definitive basis.

The final allocation of the purchase costs is disclosed below:

| (euro        million) |   | **Nuon Belgium NV and Nuon        Power Generation Wallon NV** |
|-----------------------|--------|----------------------------------------------------------------|
|                  |   |                                                                |

|         | **  ** | **Carrying value** | **  ** | **Fair value** |
|--------------|------------------|--------------------|------------------|----------------|
|    |        |                    |        |                |

| Current assets                            |   | 206         |   | 206     |
|-------------------------------------------|--------|-------------|--------|---------|
| Property,        plant and equipment      |   | 7           |   | 7       |
| Intangible assets                         |   | 5           |   | 49      |
| Goodwill                                  |   | 5           |   | 98      |
| Other non-current assets                  |   | 25          |   | 25      |
| **Assets        acquired**                |   | **2****48** |   | **385** |
| Current liabilities                       |   | 150         |   | 150     |
| Net        deferred tax liabilities       |   |        |   | 15      |
| Provisions for contingencies              |   | 4           |   | 4       |
| Other        non-current liabilities      |   | 2           |   | 2       |
| **Liabilities acquired**                  |   | **156**     |   | **171** |
| **Eni’s        shareholders equity** |   | **92**      |   | **214** |
|                                      |   |             |   |         |

Net sales from operations and the net profit for the 2011 wereas follows:

| (euro        million) |   | **Nuon Belgium NV and Nuon        Power Generation         Wallon NV** |
|-----------------------|--------|------------------------------------------------------------------------|
|                  |   |                                                                        |
|                  |   | **2011**                                                               |
|                  |   |                                                                        |

| Net sales from operations |   | 741 |
|---------------------------|--------|-----|
| Net profit                |   | 11  |
|                      |   |     |

 

 

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**Supplemental cash flow information**

| (euro million) |   |    **** |   | **2010** |   | **2011** |   | **2012** |
|----------------|--------|------------------------|--------|----------|--------|----------|--------|----------|
|           |   |                   |   |          |   |          |   |          |

| **Effect of investment of companies included in        consolidationand businesses** |   |    |   |   |      |   |   |      |   |
|--------------------------------------------------------------------------------------|--------|---------|--------|--------|-----------|--------|--------|-----------|--------|
| Current        assets                                                                |   | 409     |   |   |      |   |   | 108       |   |
| Non-current assets                                                                   |   | 316     |   |   | 122       |   |   | 171       |   |
| Net        borrowings                                                                |   | 13      |   |   |      |   |   | 46        |   |
| Current and non-current liabilities                                                  |   | (457    | )      |   | (4        | )      |   | (99       | )      |
| **Net        effect of investments**                                                 |   | **281** |   |   | **118**   |   |   | **226**   |   |
| Non-controlling interests                                                            |   | (7      | )      |   | (3        | )      |   |      |   |
| Fair value        of investments held before the acquisition of control              |   | (76     | )      |   |      |   |   |      |   |
| **Purchase price**                                                                   |   | **198** |   |   | **115**   |   |   | **226**   |   |
| less:                                                                                |   |    |   |   |      |   |   |      |   |
| *Cash and cash equivalents*                                                          |   | *(55*   | *)*    |   |      |   |   | *(48*     | *)*    |
| **Cash        flow on investments**                                                  |   | **143** |   |   | **115**   |   |   | **178**   |   |
| **Effect of disposal of consolidated        subsidiaries and businesses**            |   |    |   |   |      |   |   |      |   |
| Current        assets                                                                |   | 82      |   |   | 618       |   |   | 2,112     |   |
| Non-current assets                                                                   |   | 855     |   |   | 136       |   |   | 18,740    |   |
| Net        borrowings                                                                |   | (267    | )      |   | 257       |   |   | (12,443   | )      |
| Current and non-current liabilities                                                  |   | (302    | )      |   | (662      | )      |   | (4,123    | )      |
| **Net        effect of disposals**                                                   |   | **368** |   |   | **349**   |   |   | **4,286** |   |
| Fair value of share capital held after the sale        of control                    |   | (149    | )      |   |      |   |   | (943      | )      |
| Gain on        disposal                                                              |   | 309     |   |   | 727       |   |   | 2,021     |   |
| Non-controlling interest                                                             |   | (46     | )      |   | (5        | )      |   | (1,840    | )      |
| **Selling        price**                                                             |   | **482** |   |   | **1,071** |   |   | **3,524** |   |
| less:                                                                                |   |    |   |   |      |   |   |      |   |
| *Cash        and cash equivalents*                                                   |   | *(267*  | *)*    |   | *(65*     | *)*    |   | *(3*      | *)*    |
| **Cash flow on disposals**                                                           |   | **215** |   |   | **1,006** |   |   | **3,521** |   |
|                                                                                 |   |         |        |   |           |        |   |           |        |

**34 Guarantees, commitments and risks********Guarantees**

|   |   | **Dec. 31, 2011** |   | **Dec. 31, 2012** |
|--------|--------|-------------------|--------|-------------------|
|   |   |                   |   |                   |

| (euro million) |   | **Unsecured guarantees** |   | **Other        guarantees** |   | **Total** |   | **Unsecured guarantees** |   | **Other        guarantees** |   | **Total** |
|----------------|--------|--------------------------|--------|-----------------------------|--------|-----------|--------|--------------------------|--------|-----------------------------|--------|-----------|
|           |   |                          |   |                             |   |           |   |                          |   |                             |   |           |

| Consolidated subsidiaries                        |   |      |   | 10,953     |   | 10,953     |   |      |   | 11,350     |   | 11,350     |
|--------------------------------------------------|--------|-----------|--------|------------|--------|------------|--------|-----------|--------|------------|--------|------------|
| Unconsolidated        entities controlled by Eni |   |      |   | 164        |   | 164        |   |      |   | 161        |   | 161        |
| Joint ventures and associates                    |   | 6,159     |   | 1,135      |   | 7,294      |   | 6,208     |   | 892        |   | 7,100      |
| Others                                           |   | 1         |   | 269        |   | 270        |   | 2         |   | 289        |   | 291        |
|                                             |   | **6,160** |   | **12,521** |   | **18,681** |   | **6,210** |   | **12,692** |   | **18,902** |
|                                             |   |           |   |            |   |            |   |           |   |            |   |            |

Other guarantees issued on behalf of consolidated subsidiariesof euro 11,350 million (euro 10,953 million at December 31, 2011)primarily consisted of: (i) guarantees given to third partiesrelating to bid bonds and performance bonds for euro 7,511million (euro 7,396 million at December 31, 2011), of which euro5,491 million related to the Engineering & Constructionsegment (euro 5,065 million at December 31, 2011); (ii) VATrecoverable from tax authorities for euro 1,370 million (euro1,097 million at December 31, 2011); and (iii) insurance risk foreuro 298 million reinsured by Eni (euro 319 million at December31, 2011). At December 31, 2012, the underlying commitmentcovered by such guarantees was euro 11,266 million (euro 10,577million at December 31, 2011).

Other guarantees issued on behalf of unconsolidatedsubsidiaries of euro 161 million (euro 164 million at December31, 2011) consisted of letters of patronage and other guaranteesissued to commissioning entities relating to bid bonds andperformance bonds for euro 154 million (euro 157 million atDecember 31, 2011). At December 31, 2012, the underlyingcommitment covered by such guarantees was euro 34 million (euro45 million at December 31, 2011).

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Unsecured guarantees and other guarantees issued on behalf ofjoint ventures and associates of euro 7,100 million (euro 7,294million at December 31, 2011) primarily consisted of: (i) anunsecured guarantee of euro 6,122 million (euro 6,074 million atDecember 31, 2011) given by Eni SpA to Treno Alta Velocità - TAVSpA (now RFI - Rete Ferroviaria Italiana SpA) for the proper andtimely completion of a project relating to the Milan-Bolognafast-track railway by CEPAV (Consorzio Eni per l’AltaVelocità) Uno; consortium members, excluding entities controlledby Eni, gave Eni liability of surety letters and bank guaranteesamounting to 10% of their respective portion of the work; (ii)unsecured guarantees, letters of patronage and other guaranteesgiven to banks in relation to loans and lines of credit receivedfor euro 828 million (euro 1,051 million at December 31, 2011),of which euro 657 million related to a contract released by EniSpA on behalf of Blue Stream Pipeline Co BV (Eni 50%) to aconsortium of international financial institutions (euro 669million at December 31, 2011); and (iii) unsecured guarantees andother guarantees given to commissioning entities relating to bidbonds and performance bonds for euro 91 million (euro 108 millionat December 31, 2011). At December 31, 2012, the underlyingcommitment covered by such guarantees was euro 456 million (euro810 million at December 31, 2011).

Unsecured and other guarantees given on behalf of thirdparties of euro 291 million (euro 270 million at December 31,2011) primarily consisted of: (i) guarantees issued on behalf ofGulf LNG Energy and Gulf LNG Pipeline and on behalf of Angola LNGSupply Service Llc (Eni 13.6%) as security against paymentcommitments of fees in connection with the re-gasificationactivity (euro 227 million). The expected commitment has beenvalued at euro 159 million (euro 224 million at December 31,2011); and (ii) guarantees issued by Eni SpA to banks and otherfinancial institutions in relation to loans and lines of creditfor euro 10 million on behalf of minor investments or companiessold (euro 33 million at December 31, 2011). At December 31,2012, the underlying commitment covered by such guarantees waseuro 278 million (euro 252 million at December 31, 2011).

**Commitments and risks**

| (euro million) |   | **Dec. 31, 2011** |   | **Dec. 31, 2012** |
|----------------|--------|-------------------|--------|-------------------|
|           |   |                   |   |                   |

| Commitments |   | 15,992     |   | 16,247     |
|-------------|--------|------------|--------|------------|
| Risks       |   | 2,165      |   | 431        |
|        |   | **18,157** |   | **16,678** |
|        |   |            |   |            |

Other commitments of euro 16,247 million (euro 15,992 millionat December 31, 2011) related to: (i) parent company guaranteesthat were issued in connection with certain contractualcommitments for hydrocarbon exploration and production activitiesand quantified, on the basis of the capital expenditures to beincurred, to euro 11,260 million (euro 9,710 million at December31, 2011). The increase of euro 1,550 million related to theclosing of a settlement agreement approving the development andfuture capital expenditures in the Karachaganak project; (ii) acommitment entered into by Eni USA Gas Marketing Llc on behalf ofAngola LNG Supply Service for the acquisition of re-gasified gasat the Pascagoula plant (USA). The expected commitment has beenestimated at euro 2,613 million (euro 3,267 million at December31, 2011) and it has included in the off-balance sheetcontractual commitments in the following paragraph"Liquidity risk"; (iii) a commitment entered into byEni USA Gas Marketing Llc on behalf of Gulf LNG Energy for theacquisition of re-gasification capacity at the Pascagoulaterminal (6 BCM/y) over a twenty-year period (2011-2031). Theexpected commitment has been estimated at euro 1,167 million(euro 1,252 million at December 31, 2011) and it has beenincluded in the off-balance sheet contractual commitments in thefollowing paragraph "Liquidity risk"; (iv) a commitmententered into by Eni USA Gas Marketing Llc on behalf of CameronLNG Llc for the acquisition of re-gasification capacity at theCameron plant (USA) (6 BCM/y) over a twenty-year period (until2029). The expected commitment has been estimated at euro 946million (euro 1,274 million at December 31, 2011) and it has beenincluded in the off-balance sheet contractual commitments in thefollowing paragraph "Liquidity risk"; (v) a memorandumof intent signed with the Basilicata Region, whereby Eni hasagreed to invest euro 139 million in the future, also on accountof Shell Italia E&P SpA, in connection with Eni’sdevelopment plan of oil fields in Val d’Agri (euro 142million at December 31, 2011). The commitment has been includedin the off-balance sheet contractual commitments in the followingparagraph "Liquidity risk"; and (vi) a commitmententered into by Eni USA Gas Marketing Llc for the contract of gastransportation from the Cameron plant (USA) to the Americannetwork. The expected commitment has been estimated at euro 100million (euro 108 million at December 31, 2011) and it has beenincluded in the off-balance sheet contractual commitments in thefollowing paragraph "Liquidity risk".

Risks of euro 431 million (euro 2,165 million at December 31,2011) primarily concerned potential risks associated with: (i)the value of assets of third parties under the custody of Eni foreuro 123 million (euro 1,867 million at December 31, 2011). Thedecrease of euro 1,744 million related for euro 1,714 million tothe 

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deconsolidation of Snam; and (ii) contractual assurances givento acquirers of certain investments and businesses of Eni foreuro 308 million (euro 298 million at December 31, 2011).

 

**Non-quantifiable commitments**A parent company guarantee was issued on behalf ofCARDÓN IV (Eni’s interest 50%), a joint venture operatingin the Perla oilfield located in Venezuela, for the supplying toPDVSA GAS of gas quantities until 2036 (end of the concessionagreement). At December 31, 2012, the commitment amounted to amaximum of $800 million corresponding for Eni to the maximumamount of the penalty clause provided for in case of anunilateral and anticipated resolution of the supply contract. Enireplaced such guarantee in March 2013, as aconsequence of ongoing contract renegotiations. In particular,the penalty clause for unilateral anticipated resolution and,consequently, the maximum value of the guarantee will bedetermined by applying the local legislation in case ofnon-fulfillment. The valorization of the gas to be provided forby Eni amounted to a total of $11 billion. As well as notcorresponding to an effective reference for evaluating theguarantee issued, such amount represents the maximum exposurerisk for Eni. A similar guarantee was issued to Eni by PDVSArelating to the fulfillment of the commitments relating to thegas quantities to be collected by PDVSA GAS.

Following the integration signed on April 19, 2011, Eniconfirmed to RFI - Rete Ferroviaria Italiana SpA its commitment,previously assumed under the convention signed with Treno AltaVelocità - TAV SpA (now RFI - Rete Ferroviaria Italiana SpA) onOctober 15, 1991, to guarantee a correct and timely execution ofthe section Milano-Brescia of the high-speed railway fromMilan to Verona. Such integration provides for CEPAV (ConsorzioEni per l’Alta Velocità) Due to act as General Contractor.In order to pledge the guarantee given, the regulation of CEPAVDue binds the associates to give proper sureties and guaranteeson behalf of Eni.

Eni is liable for certain non-quantifiable risks related tocontractual assurances given to acquirers of certain ofEni’s assets, including businesses and investments, againstcertain contingent liabilities deriving from tax, social securitycontributions, environmental issues and other matters applicableto periods during which such assets were operated by Eni. Enibelieves such matters will not have a material adverse effect onEni’s results of operations and liquidity.

 

**Risk factors**

FOREWORDThe main risks that the Company is facing and actively monitoringand managing are: (i) financial risks mainly related to marketrisk deriving from exposure to fluctuations in commodity prices,interest rates, foreign currency exchange rates and the creditrisk deriving from the possible default of a counterparty as wellas the liquidity risk deriving from the risk that suitablesources of funding for the Group’s operations may not beavailable; (ii) the Country risk in the upstream business; (iii)risks arising from any possible development in the regulatoryframework; (iv) operational risks (in particular risks derivingfrom exploration and production activities and those relating toHSE issues); and (v) the strategic risks, mainly those related tothe exposure to a set of market variables which the Company hasopted to retain based on strategic considerations, trends in thecompetitive environment, particularly in the natural gas market,and cyclicality of the oil and gas sector.

In 2012, Eni issued the Management System Guidelines"Integrated Risk Management" (IRM) aimed at providingthe principles for the integrated risk management as well as forregulating each phase of the RMI process, individuating roles andresponsibilities of the main actors involved (for furtherinformation see the "Risk management" paragraph below).

*Financial risks*Financial risks are those connected with market, credit andliquidity. Management of financial risks is based on guidelinesissued centrally aiming at adapting and coordinating Eni policieson financial risks matters ("Guidelines financial risksmanagement and control"). The basis of this policy is thepooled and integrated management of commodity risks and thedevelopment of asset backed trading activities for optimizingEni’s exposure to such risks.

*Market risk*Market risk is the possibility that changes in currencyexchange rates, interest rates or commodity prices will adverselyaffect the value of the Group’s financial assets,liabilities or expected future cash flows. The Company activelymanages market risk in accordance with a set of policies andguidelines that provide a centralized model of handling finance,treasury and risk management operations based on theCompany’s departments of operational finance: the parentcompany’s (Eni SpA) finance department, Eni FinanceInternational, Eni Finance USA and 

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Banque Eni, which is subject to certain bank regulatoryrestrictions preventing the Group’s exposure toconcentrations of credit risk, and Eni Trading & Shipping,that is in charge to execute certain activities relating tocommodity derivatives. In particular, Eni SpA and Eni FinanceInternational manage subsidiaries’ financing requirements inand outside Italy, respectively, covering funding requirementsand using available surpluses. All transactions concerningcurrencies and derivative contracts on interest rates andcurrencies are managed by the parent company, including thenegotiation of emission trading certificates. The commodity riskof each business unit (Eni’s divisions or subsidiaries) ispooled and managed by Eni Trading business unit, with Eni Trading& Shipping executing the negotiation of commodityderivatives. Eni uses derivative financial instruments(derivatives) in order to minimize exposure to market risksrelated to fluctuations in exchange rates relating to thosetransactions denominated in a currency other than the functionalcurrency (the euro) and interest rates, as well as to optimizeexposure to commodity prices fluctuations taking into account thecurrency in which commodities are quoted. Eni does not enter intoderivative transactions on interest rates or exchange rates on aspeculative basis.

| The optimization in managing the        commodity risk involves a whole set of transactions in        commodity derivatives with the aim of: |
|----------------------------------------------------------------------------------------------------------------------------------------------|

| a) |   | hedging certain underlying        commodity prices set in contractual arrangements with        third parties. Hedging derivatives can be entered also to        hedge highly probable future transactions; |
|----|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| b) |   | effectively managing the        economic margin (positioning). It consists in entering        purchase/sale commodity contracts in both commodity and        financial markets aiming at altering the risk profile        associated to a portfolio of physical assets of each        business unit in order to improve margins associated to        those assets in case of favorable trends in the commodity        pricing environment; |
|----|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| c) |   | arbitrage. It consists in        entering purchase/sale commodity contracts in both        commodity and financial markets, targeting the        possibility to earn a profit (or reducing the logistical        costs associated to owned assets) leveraging on price        differences in the marketplace;                                                                                                                              |

| d) |   | proprietary trading. It        consists in entering purchase/sale commodity contracts in        both commodity and financial markets, targeting to earn        an uncertain profit based on expected trends in the        commodity pricing environment; and                                                                                                                                                                                                                                                                                                                                                           |
|----|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| e) |   | Asset Backed Trading (ABT).        It consists in entering proprietary trading activities in        commodity and financial markets, in order to maximize the        economic value of the flexibilities associated with        Eni’s assets and contracts. Price risks related to        asset backed trading activities are mitigated by the        natural hedge granted by the assets’ availability.        Such risk management activity can be implemented through        strategies of dynamic forward trading where the        underlying items are represented by the Company’s        assets. |

Furthermore, the Company may enter derivative contracts oncommodities as part of origination activities. Under this scheme,the Company acting as the originator may combine a number ofderivative contracts in order to manage a given risk exposure ofa third party or a business unit, normally in the wholesalemarket of commodities. Such trading activities may be naturallyhedged by the existing assets of the originator, or, in case ofabsence of a suitable asset, they are managed by either tradingthe associated price or volume risk exposure or hedging eachprice or volume component of the base contract.

The framework defined by Eni’s policies and guidelinesprescribes that measurement and control of market risk beperformed on the basis of maximum tolerable levels of riskexposure defined in terms of limits of stop loss, which expressesthe maximum tolerable amount of losses associated with a certainportfolio of assets over a pre-defined time horizon, or inaccordance with value at risk techniques. These techniques make astatistical assessment of the market risk on the Group’sactivity, i.e. potential gain or loss in fair values, due tochanges in market conditions taking account of the correlationexisting among changes in fair value of existing instruments.Eni’s finance department defines the maximum tolerablelevels of risk exposure to changes in interest rates and foreigncurrency exchange rates in terms of value at risk, pooling Groupcompanies’ risk positions.

Eni’s calculation and measurement techniques for interestrate and foreign currency exchange rate risks are in accordancewith banking standards, as established by the Basel Committee forbank activities surveillance. Tolerable levels of risk are basedon a conservative approach, considering the industrial nature ofthe Company. Eni’s guidelines prescribe that Eni Groupcompanies minimize such kinds of market risks by transferringrisk exposure to the parent company finance department.

With regard to commodity risk, Eni’s policies andguidelines define rules to manage this risk aiming at optimizingcore activities and pursuing preset targets of stabilizingindustrial and commercial margins. The maximum tolerable level ofrisk exposure is defined in terms of value at risk and stop lossin connection with exposure deriving from commercial activitiesand from Asset Backed Trading activities as well as exposurederiving from proprietary trading executed by the subsidiary EniTrading & Shipping. Internal mandates to manage the commodityrisk provide for a mechanism of allocation of the Group maximumtolerable risk level to each business unit. In this framework,Eni Trading & Shipping, in addition to managing risk exposureassociated with its own commercial activity and proprietarytrading, pools Group companies requests for negotiating commodity

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derivatives, ensuring execution services to the TradingBusiness Unit. The three different market risks, whose managementand control have been summarized above, are described below.

*Exchange rate risk*Exchange rate risk derives from the fact that Eni’soperations are conducted in currencies other than the euro(mainly the U.S. dollar). Revenues and expenses denominated inforeign currencies may be significantly affected by exchangerates fluctuations due to conversion differences on singletransactions arising from the time lag existing between executionand definition of relevant contractual terms (economic risk) andconversion of foreign currency-denominated trade and financingpayables and receivables (transactional risk). Exchange ratefluctuations affect the Group’s reported results and netequity as financial statements of subsidiaries denominated incurrencies other than the euro are translated from theirfunctional currency into euro. Generally, an appreciation of theU.S. dollar versus the euro has a positive impact on Eni’sresults of operations, and vice versa. Eni’s foreignexchange risk management policy is to minimize transactionalexposures arising from foreign currency movements and to optimizeexposures arising from commodity risk. Eni does not undertake anyhedging activity for risks deriving from the translation offoreign currency denominated profits or assets and liabilities ofsubsidiaries which prepare financial statements in a currencyother than the euro, except for single transactions to beevaluated on a case-by-case basis. Effective management ofexchange rate risk is performed within Eni’s central financedepartment which pools Group companies’ positions, hedgingthe Group net exposure through the use of certain derivatives,such as currency swaps, forwards and options. Such derivativesare evaluated at fair value on the basis of market pricesprovided by specialized info-providers. Changes in fair value ofthose derivatives are normally recognized through profit and lossas they do not meet the formal criteria to be recognized ashedges in accordance with IAS 39. The VaR techniques are based onvariance/covariance simulation models and are used to monitor therisk exposure arising from possible future changes in marketvalues over a 24-hour period within a 99% confidence level and a20-day holding period.

*Interest rate risk*Changes in interest rates affect the market value offinancial assets and liabilities of the Company and the level offinance charges. Eni’s interest rate risk management policyis to minimize risk with the aim to achieve financial structureobjectives defined and approved in the management’s financeplans. Borrowing requirements of Group companies are pooled bythe Group’s central finance department in order to managenet positions and the funding of portfolio developmentsconsistently with management’s plans while maintaining alevel of risk exposure within prescribed limits. Eni enters intointerest rate derivative transactions, in particular interestrate swaps, to effectively manage the balance between fixed andfloating rate debt. Such derivatives are evaluated at fair valueon the basis of market prices provided from specialized sources.Changes in fair value of those derivatives are normallyrecognized through the profit and loss account as they do notmeet the formal criteria to be accounted for under the hedgeaccounting method in accordance with IAS 39. Value at riskderiving from interest rate exposure is measured daily on thebasis of a variance/covariance model, with a 99% confidence leveland a 20-day holding period.

*Commodity risk*Eni’s results of operations are affected by changes inthe prices of commodities. A decrease in oil and gas pricesgenerally has a negative impact on Eni’s results ofoperations and vice versa. Eni manages exposure to commodityprice risk arising in normal trading and commercial activities inview of achieving stable margins. In order to accomplish this,Eni uses derivatives traded on the organized markets of ICE andNYMEX (futures) and derivatives traded over the counter (swaps,forward, contracts for differences and options) with theunderlying commodities being crude oil, refined products orelectricity. Such derivatives are evaluated at fair value on thebasis of market prices provided from specialized sources or,absent market prices, on the basis of estimates provided bybrokers or suitable evaluation techniques. Changes in fair valueof those derivatives are normally recognized through the profitand loss account as they do not meet the formal criteria to berecognized as hedges in accordance with IAS 39. Value at riskderiving from commodity exposure is measured daily on the basisof a historical simulation technique, with a 95% confidence leveland a one-day holding period.

The following table shows amounts in terms of value at risk,recorded in 2012 (compared with 2011) relating to interest rateand exchange rate risks in the first section, and commodity riskin the second section. VaR values are stated in euro as stated inthe revision of "Eni Guidelines on Management and Control ofFinancial Risks" approved by the Board of Directors onDecember 15, 2011.

*(Interest and exchange raterisk - Value at risk - parametric method variance/covariance;holding period: 20 days; confidence level: 99%)*

|   |   | **2011** |   | **2012** |
|--------|--------|----------|--------|----------|
|   |   |          |   |          |

| (euro        million) |   | **High** |   | **Low** |   | **Average** |   | **At year end** |   | **High** |   | **Low** |   | **Average** |   | **At year end** |
|-----------------------|--------|----------|--------|---------|--------|-------------|--------|-----------------|--------|----------|--------|---------|--------|-------------|--------|-----------------|
|                  |   |          |   |         |   |             |   |                 |   |          |   |         |   |             |   |                 |

| Interest rate        |   | 5.34 |   | 1.07 |   | 2.65 |   | 2.92 |   | 8.69 |   | 1.41 |   | 3.13 |   | 1.88 |
|----------------------|--------|------|--------|------|--------|------|--------|------|--------|------|--------|------|--------|------|--------|------|
| Exchange        rate |   | 0.85 |   | 0.15 |   | 0.44 |   | 0.34 |   | 1.31 |   | 0.12 |   | 0.44 |   | 0.19 |
|                 |   |      |   |      |   |      |   |      |   |      |   |      |   |      |   |      |

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*(Commodity risk - Value at risk- Historic simulation method; holding period: 1 day; confidencelevel: 95%)*

|   |   | **2011** |   | **2012** |
|--------|--------|----------|--------|----------|
|   |   |          |   |          |

| (U.S. $        million)(a) |   | **High** |   | **Low** |   | **Average** |   | **At year end** |   | **High** |   | **Low** |   | **Average** |   | **At year end** |
|----------------------------|--------|----------|--------|---------|--------|-------------|--------|-----------------|--------|----------|--------|---------|--------|-------------|--------|-----------------|
|                       |   |          |   |         |   |             |   |                 |   |          |   |         |   |             |   |                 |

| Area oil, products (b)          |   | 44.28 |   | 9.05  |   | 25.60 |   | 9.05  |   | 35.70 |   | 5.66  |   | 18.02 |   | 10.88 |
|---------------------------------|--------|-------|--------|-------|--------|-------|--------|-------|--------|-------|--------|-------|--------|-------|--------|-------|
| Area Gas        & Power (c) |   | 77.83 |   | 24.57 |   | 44.77 |   | 51.41 |   | 67.41 |   | 30.89 |   | 44.39 |   | 31.35 |
|                            |   |       |   |       |   |       |   |       |   |       |   |       |   |       |   |       |

|    |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                            |
|--------------|--------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| (a)          |    | From January        2012, the value at risk is expressed in euro terms,        following a review of "Eni Guidelines on Management        and Control of Financial Risks" approved by the        Board of Directors on December 15, 2011. The value at        risk, previously, has been expressed in dollars. 2011        values have been restated accordingly and converted at        the average exchange rate published by ECB for the        period. |
| (b)          |    | Area oil,        products refers to the Eni SpA Trading Department (risk        exposure from Refining & Marketing Division),        Versalis SpA and Eni Trading & Shipping SpA.                                                                                                                                                                                                                                                                            |
| (c)          |    | The Gas &        Power area refers to the Eni SpA Trading Department (risk        exposure from Gas & Power Division) and Tigáz Zrt.                                                                                                                                                                                                                                                                                                                    |

*Credit risk*Credit risk is the potential exposure of the Group to lossesin case counterparties fail to perform or pay amounts due. TheGroup manages differently credit risk depending on whether creditrisk arises from exposure to financial counterparties or tocustomers relating to outstanding receivables. Individualbusiness units and Eni’s corporate financial and accountingunits are responsible for managing credit risk arising in thenormal course of the business. The Group has established formalcredit systems and processes to ensure that before trading with anew counterpart can start, its creditworthiness is assessed. Alsocredit litigation and receivable collection activities areassessed. Eni’s corporate units define directions andmethods for quantifying and controlling customer’sreliability. With regard to risk arising from financialcounterparties, Eni has established guidelines prior to enteringinto cash management and derivative contracts to assess thecounterparty’s financial soundness and rating in view ofoptimizing the risk profile of financial activities whilepursuing operational targets. Maximum limits of risk exposure areset in terms of maximum amounts of credit exposures forcategories of counterparties as defined by the Company’sBoard of Directors taking into account the credit ratingsprovided by primary credit rating agencies on the marketplace.Credit risk arising from financial counterparties is managed bythe Group central finance department, including Eni’ssubsidiary Eni Trading & Shipping which specifically engagesin commodity derivatives transactions and by Group companies anddivisions, only in the case of physical transactions withfinancial counterparties consistently with the Group centralizedfinance model. Eligible financial counterparties are closelymonitored to check exposures against limits assigned to eachcounterpart on a daily basis. Exceptional market conditions haveforced the Group to adopt contingency plans and under certaincircumstances to suspend eligibility to be a Group financialcounterparty. Actions implemented also have been intended tolimit concentrations of credit risk by maximizing counterpartydiversification and turnover.

*Liquidity risk*Liquidity risk is the risk that suitable sources of fundingfor the Group may not be available, or the Group is unable tosell its assets on the marketplace in order to meet short-termfinance requirements and to settle obligations. Such a situationwould negatively impact Group results as it would result in theCompany incurring higher borrowing expenses to meet itsobligations or under the worst of conditions the inability of theCompany to continue as a going concern. As part of its financialplanning process, Eni manages the liquidity risk by targetingsuch a capital structure as to allow the Company to maintain alevel of liquidity adequate to the Group’s needs, optimizingthe opportunity cost of maintaining liquidity reserves alsoachieving an efficient balance in terms of maturity andcomposition of finance debt. The Group capital structure is setaccording to the Company’s industrial targets and within thelimits established by the Company’s Board of Directors whoare responsible for prescribing the maximum ratio of debt tototal equity and minimum ratio of medium and long-term debt tototal debt as well as fixed rate medium and long-term debt tototal medium and long-term debt. In spite of ongoing tough creditmarket conditions resulting in higher spreads to borrowers, theCompany has succeeded in maintaining access to a wide range offunding at competitive rates through the capital markets andbanks.

The actions implemented as part of 2012 Eni’s financialplanning have enabled the Group to maintain access to the creditmarket particularly via the issue of commercial paper alsotargeting to increase the flexibility of funding facilities. Theminimization of liquidity risks is a strategic driver of the next4-year Financial Plan. In particular in 2012, Eni issued threebonds addressed to institutional investors for a total amount ofeuro 1.82 billion, all at fixed rate with maturity ofapproximately 8 years. In November, as part of the divestmentprocess of its interest in Galp, Eni also issued a convertiblebond with underlying Galp shares equal to 8% of the share capitalof the investee for a total amount of euro 1.028 billion at fixedrate with a maturity of three years.

Eni’s financial policies are designed to achieve thefollowing targets: (i) ensuring adequate funds to covershort-term obligations and reimbursement of long-term debt due;(ii) maintaining an adequate level of financial flexibility tosupport Eni’s development plans; (iii) attaining a balancebetween duration and composition of the 

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finance debt; and (iv) maintaining a cash reserve followingthe great flow of liquidity achieved from the divestment of 2012,particularly the disposition of Snam. The cash reserve will becommeasured in order to: (i) reduce the refinancing with maturityof one year, allowing the Company to be financially independentalso in case of negative trends in the trading environment; (ii)increase the level of liquidity to face possible extraordinaryneeds; and (iii) increase the flexibility of theCompany’s financial structure considering lingeringuncertainties in the credit markets, in a similar way as thepolicies adopted by the peer group companies and with a view ofimproving the Company’s financial rating assessment. Cashstock will be available only for short-term operations, with avery low risk profile.

At present, the Group believes it has access to sufficientfunding and has also both committed and uncommitted borrowingfacilities to meet currently foreseeable borrowing requirements.

At December 31, 2012, Eni maintained short-term committed anduncommitted unused borrowing facilities of euro 12,173 million,of which euro 1,241 million were committed, and long-termcommitted borrowing facilities of euro 6,928 million which werecompletely drawn at the balance sheet date. These facilities boreinterest rates that reflected prevailing market conditions. Feescharged for unused facilities were immaterial.

Eni has in place a program for the issuance of Euro MediumTerm Notes up to euro 15 billion, of which about euro 12.3billion were drawn as of December 31, 2012. The Group has creditratings of A and A-1, respectively, for long and short-term debtassigned by Standard & Poor’s and A3 and P-2 assigned byMoody’s; the outlook is negative in both ratings.

Eni’s credit ratings are potentially exposed to risk offurther downgrading of the sovereign credit rating of Italy inaddition to a possible deterioration in the global macroeconomicoutlook, particularly the risks of a break-up of the Euro-zone.On the basis of the methodologies used by Standard &Poor’s and Moody’s, a potential downgrade ofItaly’s credit rating may have a potential knock-on effecton the credit rating of Italian issuers such as Eni and make itmore likely that the credit rating of the notes or other debtinstruments issued by the Company could be downgraded. Eni,through the constant monitoring of the international economicenvironment and continuing dialogue with financial investors andrating agencies, believes to be ready to perceive emergingcritical issues screened by the financial community and to beable to react quickly to any changes in the financial and theglobal macroeconomic environment and implement the necessaryactions to mitigate such risks, coherently with Companystrategies.

**Finance debt repayments including expectedpayments for interest charges and derivatives**The tables below summarize the Group main contractualobligations for finance debt repayments, including expectedpayments for interest charges and derivatives.

| (euro        million) |    | **Maturity year** |
|-----------------------|--------------|-------------------|
|                  |         |                   |

|         | **  ** | **2012** | **  ** | **2013** | **  ** | **2014** | **  ** | **2015** | **  ** | **2016** | **  ** | **2017 and thereafter** | **  ** | **Total** |
|--------------|------------------|----------|------------------|----------|------------------|----------|------------------|----------|------------------|----------|------------------|-------------------------|------------------|-----------|
|    |             |          |        |          |        |          |        |          |        |          |        |                         |        |           |

| **December 31, 2011**                       |   |      |   |      |   |      |   |      |   |      |   |      |   |       |
|---------------------------------------------|--------|-----------|--------|-----------|--------|-----------|--------|-----------|--------|-----------|--------|-----------|--------|------------|
| Non-current        financial liabilities    |   | 1,635     |   | 3,010     |   | 5,076     |   | 2,936     |   | 2,840     |   | 9,378     |   | **24,875** |
| Current financial liabilities               |   | 4,459     |   |      |   |      |   |      |   |      |   |      |   | **4,459**  |
| Fair value        of derivative instruments |   | 1,789     |   | 303       |   | 74        |   | 87        |   | 52        |   | 112       |   | **2,417**  |
|                                        |   | **7,883** |   | **3,313** |   | **5,150** |   | **3,023** |   | **2,892** |   | **9,490** |   | **31,751** |
| Interest        on finance debt             |   | 832       |   | 761       |   | 664       |   | 553       |   | 485       |   | 1,595     |   | **4,890**  |
| Guarantees to banks                         |   | 576       |   |      |   |      |   |      |   |      |   |      |   | **576**    |
|                                        |   |           |   |           |   |           |   |           |   |           |   |           |   |            |

 

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| (euro        million) |    | **Maturity year** |
|-----------------------|--------------|-------------------|
|                  |         |                   |

|         | **  ** | **2013** | **  ** | **2014** | **  ** | **2015** | **  ** | **2016** | **  ** | **2017** | **  ** | **2018 and thereafter** | **  ** | **Total** |
|--------------|------------------|----------|------------------|----------|------------------|----------|------------------|----------|------------------|----------|------------------|-------------------------|------------------|-----------|
|    |             |          |        |          |        |          |        |          |        |          |        |                         |        |           |

| **December 31, 2012**                       |   |      |   |      |   |      |   |      |   |      |   |      |   |       |
|---------------------------------------------|--------|-----------|--------|-----------|--------|-----------|--------|-----------|--------|-----------|--------|-----------|--------|------------|
| Non-current        financial liabilities    |   | 2,555     |   | 2,090     |   | 3,941     |   | 2,180     |   | 2,956     |   | 8,275     |   | **21,997** |
| Current financial liabilities               |   | 2,223     |   |      |   |      |   |      |   |      |   |      |   | **2,223**  |
| Fair value        of derivative instruments |   | 925       |   | 132       |   | 89        |   | 2         |   | 11        |   | 50        |   | **1,209**  |
|                                        |   | **5,703** |   | **2,222** |   | **4,030** |   | **2,182** |   | **2,967** |   | **8,325** |   | **25,429** |
| Interest        on finance debt             |   | 840       |   | 725       |   | 622       |   | 550       |   | 465       |   | 1,491     |   | **4,693**  |
| Guarantees to banks                         |   | 212       |   |      |   |      |   |      |   |      |   |      |   | **212**    |
|                                        |   |           |   |           |   |           |   |           |   |           |   |           |   |            |

**Trade and other payables**The tables below summarize the Group trade and other payablesby maturity.

| (euro        million) |    | **Maturity year** |
|-----------------------|--------------|-------------------|
|                  |    |                   |

|         | **  ** | **2012** | **  ** | **2013-2016** | **  ** | **2017 and thereafter** | **  ** | **Total** |
|--------------|------------------|----------|------------------|---------------|------------------|-------------------------|------------------|-----------|
|    |        |          |        |               |        |                         |        |           |

| **December 31, 2011**    |         |       |         |   |         |   |         |       |
|--------------------------|--------------|------------|--------------|--------|--------------|--------|--------------|------------|
| Trade        payables    |         | 13,436     |         |   |         |   |         | **13,436** |
| Advances, other payables |         | 9,476      |         | 32     |         | 38     |         | **9,546**  |
|                     |         | **22,912** |         | **32** |         | **38** |         | **22,982** |
|                |    |            |    |        |    |        |    |            |

 

| (euro        million) |    | **Maturity year** |
|-----------------------|--------------|-------------------|
|                  |    |                   |

|         | **  ** | **2013** | **  ** | **2014-2017** | **  ** | **2018 and thereafter** | **  ** | **Total** |
|--------------|------------------|----------|------------------|---------------|------------------|-------------------------|------------------|-----------|
|    |        |          |        |               |        |                         |        |           |

| **December 31, 2012**    |         |       |         |   |         |   |         |       |
|--------------------------|--------------|------------|--------------|--------|--------------|--------|--------------|------------|
| Trade        payables    |         | 14,993     |         |   |         |   |         | **14,993** |
| Advances, other payables |         | 8,588      |         | 19     |         | 38     |         | **8,645**  |
|                     |         | **23,581** |         | **19** |         | **38** |         | **23,638** |
|                |    |            |    |        |    |        |    |            |

**Expected payments by period under contractual obligationsand commercial commitments**The Group has in place a number of contractual obligationsarising in the normal course of the business. To meet thesecommitments, the Group will have to make payments to thirdparties. The Company’s main obligations pertain totake-or-pay clauses contained in the Company’s gas supplycontracts or shipping arrangements, whereby the Companyobligations consist of off-taking minimum quantities of productor service or, in case of failure, paying the corresponding cashamount that entitles the Company the right to off-take theproduct or the service in future years. Future obligations inconnection with these contracts were calculated by applying theforecasted prices of energy or services included in the four-yearbusiness plan approved by the Company’s Board of Directors.The table below summarizes the Group principal contractualobligations as of the balance sheet date, shown on anundiscounted basis.

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| (euro        million) |   | **Maturity year** |
|-----------------------|--------|-------------------|
|                  |   |                   |

|   |   | **2013** | **  ** | **2014** | **  ** | **2015** | **  ** | **2016** | **  ** | **2017** | **  ** | **2018 and thereafter** | **  ** | **Total** |
|--------|--------|----------|------------------|----------|------------------|----------|------------------|----------|------------------|----------|------------------|-------------------------|------------------|-----------|
|   |   |          |             |          |             |          |             |          |             |          |             |                         |             |           |

| **Operating lease obligations**(a)                    |   | **722**    |   | **515**    |   | **323**    |   | **250**    |   | **201**    |   | **560**     |   | **2,571**   |
|-------------------------------------------------------|--------|------------|--------|------------|--------|------------|--------|------------|--------|------------|--------|-------------|--------|-------------|
| **Decommissioning        liabilities**(b)             |   | **174**    |   | **198**    |   | **85**     |   | **259**    |   | **555**    |   | **13,777**  |   | **15,048**  |
| **Environmental liabilities**(c)                      |   | **362**    |   | **375**    |   | **260**    |   | **160**    |   | **69**     |   | **551**     |   | **1,777**   |
| **Purchase        obligations** (d)                   |   | **20,761** |   | **19,486** |   | **19,394** |   | **17,815** |   | **16,482** |   | **169,815** |   | **263,753** |
| - Gas                                                 |   |       |   |       |   |       |   |       |   |       |   |        |   |        |
|    .        take-or-pay contracts      |   | 18,463     |   | 17,763     |   | 17,840     |   | 16,377     |   | 15,094     |   | 161,787     |   | 247,324     |
|    . ship-or-pay contracts             |   | 1,746      |   | 1,303      |   | 1,263      |   | 1,159      |   | 1,119      |   | 5,515       |   | 12,105      |
| - Other        take-or-pay or ship-or-pay obligations |   | 171        |   | 170        |   | 163        |   | 156        |   | 146        |   | 909         |   | 1,715       |
| - Other purchase obligations (e)                      |   | 381        |   | 250        |   | 128        |   | 123        |   | 123        |   | 1,604       |   | 2,609       |
| **Other        obligations**                          |   | **4**      |   | **3**      |   | **3**      |   | **3**      |   | **3**      |   | **123**     |   | **139**     |
| - Memorandum of intent relating Val d’Agri       |   | 4          |   | 3          |   | 3          |   | 3          |   | 3          |   | 123         |   | 139         |
|                                                  |   | **22,023** |   | **20,577** |   | **20,065** |   | **18,487** |   | **17,310** |   | **184,826** |   | **283,288** |
|                                                  |   |            |   |            |   |            |   |            |   |            |   |             |   |             |

|    |    |                                                                                                                                                                                                                                                                                                                                                                                                                                |
|--------------|--------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| (a)          |    | Operating        leases primarily regarded assets for drilling activities,        time charter and long-term rentals of vessels, lands,        service stations and office buildings. Such leases did        not include renewal options. There are no significant        restrictions provided by these operating leases which        limit the ability of the Company to pay dividend, use        assets or to take on new borrowings. |
| (b)          |    | Represents        the estimated future costs for the decommissioning of oil        and natural gas production facilities at the end of the        producing lives of fields, well-plugging, abandonment and        site restoration.                                                                                                                                                                                                     |
| (c)          |    | Environmental        liabilities do not include the environmental charge of        2010 amounting to euro 1,109 million for the proposal to        the Italian Ministry for the Environment to enter into a        global transaction related to nine sites of national        interest because the dates of payment are not reasonably        estimable.                                                                                |
| (d)          |    | Represents        any agreement to purchase goods or services that is        enforceable and legally binding and that specifies all        significant terms.                                                                                                                                                                                                                                                                            |
| (e)          |    | Mainly refers        to arrangements to purchase capacity entitlements at        certain re-gasification facilities in the USA (euro 2,113        million).                                                                                                                                                                                                                                                                              |

**Capital expenditure commitments**In the next four years Eni plans to make capitalexpenditures of euro 56.8 billion. The table below summarizesEni’s capital expenditure commitments for property, plantand equipment and capital projects. At December 31, 2012, capitalexpenditures are considered to be committed when the project hasreceived the appropriate level of internal management approval.At this stage, procurement contracts to execute those projectshave already been awarded or are being awarded to third parties.

The amounts shown in the table below include euro 600 millionof committed expenditures to execute certain environmentalprojects.

|   |   | **Maturity year** |
|--------|--------|-------------------|
|   |   |                   |

| (euro        million) |   | **2013** | **  ** | **2014** | **  ** | **2015** | **  ** | **2016** | ** ** | **2017 and thereafter** | ** ** | **Total** |
|-----------------------|--------|----------|------------------|----------|------------------|----------|------------------|----------|------------|-------------------------|------------|-----------|
|                  |   |          |             |          |             |          |             |          |       |                         |       |           |

| Committed on major projects     |   | 6,718      |   | 7,680      |   | 6,897     |   | 3,991     |   | 11,839     |   | **37,125** |
|---------------------------------|--------|------------|--------|------------|--------|-----------|--------|-----------|--------|------------|--------|------------|
| Other        committed projects |   | 6,940      |   | 3,782      |   | 1,584     |   | 1,100     |   | 8,496      |   | **21,902** |
|                            |   | **13,658** |   | **11,462** |   | **8,481** |   | **5,091** |   | **20,335** |   | **59,027** |
|                            |   |            |   |            |   |           |   |           |   |            |   |            |

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**Other information about financial instruments**The carrying amount of financial instruments and relevanteconomic effect as of and for the years ended December 31, 2011and 2012 consisted of the following:

|   |   | **2011** |   | **2012** |
|--------|--------|----------|--------|----------|
|   |   |          |   |          |

|   |   | **Finance income        (expense)         recognized in** |   | **Finance income        (expense)         recognized in** |
|--------|--------|-----------------------------------------------------------|--------|-----------------------------------------------------------|
|   |   |                                                           |   |                                                           |

| (euro        million) |   | **Carrying amount** |   | **Profit and loss        account** |   | **Other comprehensive        income** |   | **Carrying amount** |   | **Profit and loss        account** |   | **Other comprehensive        income** |
|-----------------------|--------|---------------------|--------|------------------------------------|--------|---------------------------------------|--------|---------------------|--------|------------------------------------|--------|---------------------------------------|
|                  |   |                     |   |                                    |   |                                       |   |                     |   |                                    |   |                                       |

| **Held-for-trading financial instruments**                                                |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|-------------------------------------------------------------------------------------------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|
| Non-hedging        and trading derivatives (a)                                            |   | 17     |   |   | 76     |   |   |   |   |   | 186    |   |   | (408   | )      |   |   |   |
| **Held-to-maturity financial instruments**                                                |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Securities        (b)                                                                     |   | 62     |   |   | 1      |   |   |   |   |   | 69     |   |   | 1      |   |   |   |   |
| **Available-for-sale financial instruments**                                              |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Securities        (b)                                                                     |   | 262    |   |   | 8      |   |   | (6     | )      |   | 235    |   |   | 8      |   |   | 16     |   |
| **Investments valued at fair value**                                                      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Other        non-current investments (c)                                                  |   |   |   |   |   |   |   |   |   |   | 4,782  |   |   | 4,717  |   |   | 141    |   |
| **Receivables and payables and other        assets/liabilities valued at amortized cost** |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Trade        receivables and other (d)                                                    |   | 24,730 |   |   | (65    | )      |   |   |   |   | 27,913 |   |   | (54    | )      |   |   |   |
| Financing receivables (b)                                                                 |   | 2,174  |   |   | 112    |   |   |   |   |   | 2,981  |   |   | 70     |   |   |   |   |
| Trade        payables and other (e)                                                       |   | 22,982 |   |   | (123   | )      |   |   |   |   | 23,638 |   |   | 104    |   |   |   |   |
| Financing payables (b)                                                                    |   | 29,597 |   |   | (851   | )      |   |   |   |   | 24,463 |   |   | (831   | )      |   |   |   |
| **Net        assets (liabilities) for hedging derivatives**(f)                            |   | 32     |   |   | (309   | )      |   | 76     |   |   | (17    | )      |   | (290   | )      |   |   |   |
|                                                                                      |   |        |        |   |        |        |   |        |        |   |        |        |   |        |        |   |        |        |

|    |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |
|--------------|--------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| (a)          |    | In the profit        and loss account, economic effects were recognized as        loss within "Other operating income (loss)" for        euro 157 million (income for euro 188 million in 2011)        and as expense within "Finance income        (expense)" for euro 251 million (expense for euro        112 million in 2011).                                                                                                                            |
| (b)          | i       | Income or        expense were recognized in the profit and loss account        within "Finance income (expense)".                                                                                                                                                                                                                                                                                                                                                       |
| (c)          |    | Income were        recognized in the profit and loss account within        "Income (expense) from investments" for euro        1,247 million and within "Net profit (loss) for the        period - Discontinued operations" for euro 3,470        million.                                                                                                                                                                                                    |
| (d)          |    | In the profit        and loss account, economic effects were essentially        recognized as expense within "Purchase, services and        other" for euro 25 million (expense for euro 138        million in 2011) (impairments net of reversal) and as        expense for euro 31 million within "Finance income        (expense)" (income for euro 77 million in 2011)        (positive exchange rate differences at year-end and        amortized cost). |
| (e)          |    | In the profit        and loss account, exchange differences arising from        accounts denominated in foreign currency and translated        into euro at year-end were primarily recognized within        "Finance income (expense)".                                                                                                                                                                                                                                |
| (f)          | i       | In the profit        and loss account, income or expense were recognized        within "Net sales from operations" and        "Purchase, services and other" as expense for        euro 289 million (expense for euro 292 million in 2011) and within "Other operating income        (loss)" as expense for euro 1 million (expense        for euro 17 million in 2011) (time value component).                                                     |

 

| **Fair value of financial instruments**        Following the classification of financial assets and        liabilities, measured at fair value in the balance sheet,        is provided according to the fair value hierarchy defined        on the basis of the relevance of the inputs used in the        measurement process. In particular, on the basis of the        features of the inputs used in making the measurements,        the fair value hierarchy shall have the following levels: |
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (a) |   | Level 1:        quoted prices (unadjusted) in active markets for        identical financial assets or liabilities; |
|-----|--------|--------------------------------------------------------------------------------------------------------------------|

| (b) |   | Level 2:        measurements based on the basis of inputs, other than        quoted prices above, which, for assets and liabilities        that have to be measured, can be observable directly        (e.g. prices) or indirectly (e.g. deriving from prices);        and |
|-----|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| (c) |   | Level 3:        inputs not based on observable market data.                                                                                                                                                                                                                |

Financial instruments measured at fair value in the balancesheet as of at December 31, 2012, were classified as follows: (i)level 1, "Other financial assets available for sale","Non-hedging derivatives - Future" and "Otherinvestments" valued at fair value; and (ii) level 2,derivative instruments different from "Future" includedin "Other current assets", "Other non-currentassets", "Other current liabilities" and"Other non-current liabilities". During the 2012, notransfers were done between the different hierarchy levels offair value.

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The table below summarizes the amount of financial instrumentsvalued at fair value:

| (euro million) |   |   |   | **Note** |   | **Dec. 31, 2011** |   | **Dec. 31, 2012** |
|----------------|--------|--------|--------|----------|--------|-------------------|--------|-------------------|
|           |   |   |   |          |   |                   |   |                   |

| **Current assets**                               |   |   |   |         |   |   |
|--------------------------------------------------|--------|--------|--------|--------------|--------|--------|
| Other        financial assets available for sale |   | (8)    |   | 262          |   | 235    |
| Non-hedging derivatives - Future                 |   | (13)   |   | 68           |   | 26     |
| Other        non-hedging and trading derivatives |   | (13)   |   | 1,494        |   | 890    |
| Cash flow hedge derivatives                      |   | (13)   |   | 157          |   | 31     |
| **Non-current        assets**                    |   |   |   |         |   |   |
| Other investments valued at fair value           |   | (17)   |   |         |   | 4,782  |
| Non-hedging        derivatives - Future          |   | (20)   |   | 2            |   | 5      |
| Other non-hedging derivatives                    |   | (20)   |   | 712          |   | 424    |
| Cash flow        hedge derivatives               |   | (20)   |   | 33           |   | 2      |
| **Current liabilities**                          |   |   |   |         |   |   |
| Non-hedging        derivatives - Future          |   | (25)   |   | 63           |   | 11     |
| Other non-hedging and trading derivatives        |   | (25)   |   | 1,605        |   | 877    |
| Cash flow        hedge derivatives               |   | (25)   |   | 121          |   | 32     |
| Fair value hedge derivatives                     |   | (25)   |   |    |   | 5      |
| **Non-current        liabilities**               |   |   |   |         |   |   |
| Non-hedging derivatives - Future                 |   | (30)   |   | 3            |   | 1      |
| Other        non-hedging derivatives             |   | (30)   |   | 588          |   | 270    |
| Cash flow hedge derivatives                      |   | (30)   |   | 37           |   | 13     |
|                                             |   |        |   |              |   |        |

**Legal Proceedings******Eni is a party to a number of civil actions andadministrative arbitral and other judicial proceedings arising inthe ordinary course of business. Based on information availableto date, and taking into account the existing risk provisions,Eni believes that the foregoing will not have an adverse effecton Eni’s Consolidated Financial Statements. The following isa description of the most significant proceedings currentlypending. Unless otherwise indicated below, no provisions havebeen made for these legal proceedings as Eni believes thatnegative outcomes are not probable or because the amount of theprovision cannot be estimated reliably.

 

**1. Environment**

**1.1 Criminal proceedings**

(**i) Investigation of the quality of groundwater in the areaof the refinery of Gela.** A criminal proceeding is pendingbefore the Public Prosecutor of Gela relating to an allegedbreach of environmental rules concerning the pollution of waterand soil and illegal disposal of liquid and solid waste materialswithin the activity of the Gela refinery. Both a first degreeCourt at Gela and a second degree court dismissed the casebecause the statute of limitations expired.

**(ii) Alleged negligent fire (Priolo).** The PublicProsecutor of Siracusa commenced an investigation relating tocertain Eni managers who were in charge of conducting operationsat the refinery of Priolo prior to divesting the refinery to ErgRaffinerie Mediterranee SpA in July 31, 2002. The investigationaimed at ascertaining whether Eni managers acted with negligencein connection with a fire that occurred at the Priolo plants onApril 30 and May 1-2, 2006. Upon conclusion of the preliminaryinvestigations the Public Prosecutor requested the mentionedmanagers would stand trial for negligent behavior. The Ministryfor the Environment has been acting as plaintiff. The proceedingis pending.

**(iii) Groundwater at the Priolo site – Prosecutingbody: Public Prosecutor of Siracusa.**The Public Prosecutor ofSiracusa (Sicily) has started an investigation in order toascertain the level of contamination of the groundwater at thePriolo site. The Company has been notified that a number of itsexecutive officers in charge at the time of the events subject to probe,including chief executive officers and plant general managers ofthe Company’s subsidiaries AgipPetroli SpA (now merged intothe parent company Eni SpA in the Refining & MarketingDivision), Syndial and Polimeri Europa (now Versalis SpA)are being investigated. According to the technicalsurveys the ground and the groundwater at the Priolo site shouldbe considered polluted according to Legislative Decree No.152/2006. This contamination was caused by a spill-over made inthe period prior to 2001 

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and not subsequent to 2005; the equipment still operating onthe site represent another source of risk, in particular the onesowned by ISAB Srl (ERG). According to the findings, the PublicProsecutor requested the dismissal of the proceeding. Thedecision of the Judge on the dismissal of the proceeding is stillpending.

**(iv) Fatal accident Truck Center Molfetta –Prosecuting body: Public Prosecutor of Trani.** On May 11,2010, Eni SpA, eight employees of the Company and a formeremployee were notified of closing of the investigation intoalleged manslaughter, grievous bodily harm and illegal disposalof waste materials in relation to a fatal accident occurred inMarch 2008 that caused the death of four workers deputed to thecleaning of a tank owned by a company part of the ItalianRailways Group. The tank was used for the transportation ofliquid sulphur produced by Eni in the refinery of Taranto. ThePublic Prosecutor has removed three defendants and transmittedevidence to the Judge for the Preliminary Investigationsrequesting to dismiss the proceeding. The Judge for thePreliminary Investigations accepted the above mentioned request.In the hearing of April 19, 2011, the Judge admitted asplaintiffs against the above mentioned individuals all the parts,excluding the relatives of one of the victims, whose position hasbeen declared inadmissible because of lack of a cause of action.The Judge declared inadmissible all the requests brought by otherparties to act as plaintiffs against Eni. On December 5, 2011,the Judge pronounced an acquittal sentence for the individualsinvolved and for Eni SpA, as the indictments are groundless. OnJuly 3, 2012, the Public Prosecutor filed an appeal against thisdecision.

**(v) Syndial SpA (company incorporating EniChem AgricolturaSpA - Agricoltura SpA in liquidation - EniChem AugustaIndustriale Srl - Fosfotec Srl) – Proceeding about theindustrial site of Crotone.** A criminal proceeding is pendingbefore the Public Prosecutor of Crotone relating to allegationsof environmental disaster, poisoning of substances used in thefood chain and omitted cleanup due to the activity at a landfillsite which was taken over by Eni’s subsidiary in 1991following the divestment of an industrial complex by Montedison(now Edison SpA). The landfill site had been filled withindustrial waste from Montedison activities till 1989 and then noadditional waste was discharged there. Eni’s subsidiarycarried out the cleanup of the landfill in 1999 through 2000. Thedefendants are certain managers at Eni’s subsidiaries whichhave owned and managed the landfill since 1991. A technicalassessment of the circumstances is pending.

**(vi) Eni SpA - Gas & Power Division – Industrialsite of Praia a Mare.** Based on complaints filed by certainoffended persons, the Public Prosecutor of Paola started anenquiry about alleged diseases related to tumors which thosepersons contracted on the workplace. Those persons were employeesat an industrial complex owned by a Group subsidiary many yearsago. On the basis of the findings of independent appraisalreports, in the course of 2009 the Public Prosecutor resolvedthat a number of ex-manager of that industrial complex wouldstand trial. In the preliminary hearing held in November 2010,189 persons entered the trial as plaintiff; while 107 personswere declared as having been offended by the alleged crime. Theplaintiffs have requested that both Eni and Marzotto SpA wouldbear civil liability. However, compensation for damages sufferedby the offended persons has yet to be determined. Upon conclusionof the preliminary hearing, the Public Prosecutor resolved thatall defendants would stand trial for culpable manslaughter,culpable injuries, environmental disaster and negligent conductabout safety measures on the workplace. The proceeding ispending.

**(vii) Syndial SpA and Versalis SpA - Porto Torres –Prosecuting body: Public Prosecutor of Sassari.** The PublicProsecutor of Sassari (Sardinia) resolved that a number ofofficers and senior managers of companies engaging inpetrochemicals operations at the site of Porto Torres, includingthe manager responsible for plant operations of theCompany’s fully-owned subsidiary Syndial, would stand trialdue to allegations of environmental damage and poisoning of waterand crops. The Province of Sassari, the Municipality of PortoTorres and other entities have been acting as plaintiffs. TheJudge for the Preliminary Hearing admitted as plaintiffs theabove mentioned parts, but based on the exceptions issued bySyndial on the lack of connection between the action as plaintiffand the charge, denied that the claimants would act as plaintiffwith regard to the serious pathologies related to the existenceof poisoning agents in the marine fauna of the industrial port ofPorto Torres. The trial before a jurisdictional body of theItalian criminal law which is charged with judging the mostserious crimes, was annulled as that jurisdictional body did notrecognize the gravity elements justifying its judgment due to adifferent crime allegation in the notice of conclusion of thepreliminary investigation with respect to the crime allegationpresented in the request of trial filed by the Public Prosecutor.Thus the proceeding was returned before the Public Prosecutor.The proceeding is pending.

**(viii) Syndial SpA and Versalis SpA - Porto Torres dock– Prosecuting body: Public Prosecutor of Sassari.**InJuly 2012, the Judge for the Preliminary Hearing, following arequest of the Public Prosecutor of Sassari, requested theperformance of a probationary evidence relating to thefunctioning of the hydraulic barrier of Porto Torres site (ran bySyndial SpA) and its capacity to avoid the dispersion ofcontamination released by the site in the near portion of sea.Syndial SpA and Versalis SpA have been notified that its chiefexecutive officers and other managers are being investigated.

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**(ix) Syndial SpA – Public Prosecutor of Gela.** Aninvestigation before the Public Prosecutor of Gela is pendingregarding a number of former Eni employees. In particular theproceeding involves 17 former managers of the companies ANIC SpA,EniChem SpA, EniChem Anic SpA, Anic Agricoltura SpA, Agip PetroliSpA, and Praoil Aromatici e Raffinazione Srl who were previouslyin charge of conducting operations and granting security atClorosoda plant in Gela. The proceeding regards the crimes ofculpable manslaughter and grievous bodily harm related to thedeath of 12 former employees and alleged diseases which thosepersons may have contracted at the above mentioned plant. Allegedcrimes relate to the period from 1969, when operations onClorosoda plant have commenced, to 1998, when the clean-upactivities have terminated. The Public Prosecutor requested theperformance of a medico-legal appraisal on over 100 peopleemployed on the above mentioned plant to verify the relation ofcausality between the deaths occurred and the eventualpathologies affecting these individuals, and the exposuresrelated to the work performed and missing implementation by therelevant company functions of the measures necessary for ensuringthe employee health and security in relation to the risksconnected with the mentioned working activities.

**(x) Seizure of areas located in the Municipalities ofCassano allo Jonio and Cerchiara di Calabria – Prosecutingbody: Public Prosecutor of Castrovillari.**Certain areas ownedby Eni in the Municipalities of Cassano allo Jonio and Cerchiaradi Calabria have been seized by the Judicial authority pending aninvestigation about an alleged improper handling of industrialwaste from the processing of zinc ferrites at the industrial siteof Pertusola Sud, which was subsequently shut down, and illegalstoring in the seized areas. The circumstances underinvestigation are the same considered in a criminal action foralleged omitted clean-up which was concluded in 2008 without anynegative outcome on part of Eni’s employees. Eni’ssubsidiary Syndial SpA has removed any waste materials from thelandfills Syndial entered a transaction agreement with theMunicipality of Cerchiara to settle all damages caused by theunauthorized landfills to the territory of the Municipality. TheMunicipality of Cerchiara renounced to all claims in relation tothe circumstances investigated in the criminal proceeding.Eni’s subsidiary has also arranged a similar transactionwith the Municipality of Cassano. The criminal proceeding isstill pending.

 

**1.2 Civil and administrative proceeding**

**Syndial SpA (former EniChem SpA)****(i) Claim of environmental damages, allegedlycaused by industrial activities in the area of Crotone –Prosecuting Bodies: the Council of Ministers, the Ministry forthe Environment, the Delegated Commissioner for EnvironmentalEmergency in the Calabria Region and the Calabria Region.**TheCouncil of Ministers, the Ministry for the Environment, theDelegated Commissioner for Environmental Emergency in theCalabria Region and the Calabria Region summoned Syndial beforethe Civil Court of Milan to obtain a sentence condemning the Enisubsidiary to compensate the environmental damage and clean-upand remediation costs caused by the operations of Pertusola SudSpA (merged in EniChem, now Syndial) at the Crotone site. Thisfirst degree proceeding was generated in January 2008, by theunification of two different actions, the first brought byCalabria Region in October 2004, the second one by the Council ofMinisters, the Ministry for the Environment and the DelegatedCommissioner for Environmental Emergency in the Calabria Regioncommenced in February 2006. The environmental claims and clean-upcosts amounted to euro 2,720 million which comprised both theCalabria Region claims and the Ministry for the Environmentclaims. In order to settle the whole matter, in 2008 Syndialdecided to take over the remediation activities in the area andon December 5, 2008 filed a comprehensive clean-up project. Thisproject, which was approved in almost its element by the Ministryfor the Environment and the Calabria Region, has been consideredsubstantially adequate also by the Court. On February 24, 2012,the Court sentenced Syndial to correctly execute theenvironmental clean-up of the site and to pay to the Presidencyof the Council of Ministers and the Ministry for Environment thesum of euro 56.2 million plus interest charges accrued from theplaintiffs’ claims. Eni accrued an environmental riskprovision that is progressively utilized for the clean-upactivities.

**(ii) Summon for alleged environmental damage caused by DDTpollution in the Lake Maggiore – Prosecuting body: Ministryfor the Environment.**In May 2003, the Ministry for theEnvironment summoned Syndial to obtain a sentence condemning theEni subsidiary to compensate an alleged environmental damagecaused by the activity of the Pieve Vergonte plant in the years1990 through 1996. With a temporarily executive sentence datedJuly 3, 2008, the District Court of Turin sentenced thesubsidiary Syndial SpA (former EniChem) to compensateenvironmental damages amounting to euro 1,833.5 million, pluslegal interests that accrue from the filing of the decision.Syndial and Eni technical-legal consultants have considered thedecision and the amount of the compensation to be without factualand legal basis and have concluded that a negative outcome ofthis proceeding is unlikely. Particularly, Eni and its subsidiarydeem the amount of the environmental damage to be absolutelywholly groundless as the sentence has been considered to lacksufficient elements to support such a material amount of theliability charged to Eni and its subsidiary with respect to thevolume of pollutants ascertained by the Italian EnvironmentalMinister. In July 2009, Syndial filed an appeal against the abovementioned sentence, 

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and consequently the proceeding would continue before a SecondDegree Court. In the hearing of June 15, 2012 before the SecondDegree Court of Turin, the Minister for the Environment,formalized trough the Board of State Lawyers its decision to notexecute the sentence until a final verdict on the whole matter isreached. The Second Degree Court requested a technical appraisalof the matter which is due to be filed no later than November 15,2013. Furthermore an administrative proceeding is ongoingregarding certain environmental works to clean-up and make safethe Pieve Vergonte site. Syndial filed an appeal against certainprescriptions of the Ministry for the Environment relating to themodes of executing the clean-up of soil and groundwater andextension of the scope of work to other nearby areas. TheAdministrative Court of the Piemonte Region rejected part of theSyndial appeal. A Syndial filed a counterclaim before a higherdegree administrative court.

**(iii) Action commenced by the Municipality of Carrara forthe remediation and reestablishment of previous environmentalconditions at the Avenza site and payment of environmentaldamage.**The Municipality of Carrara commenced an actionbefore the Court of Genova requesting Syndial SpA to remediateand restore previous environmental conditions at the Avenza siteand the payment of environmental damage (amounting to euro 139million), further damages of various types (e.g. damage to thenatural beauty of this site) amounting to euro 80 million as wellas damages relating to loss of profit and property amounting toapproximately euro 16 million. This request is related to anaccident that occurred in 1984, as a consequence of which EniChemAgricoltura SpA (later merged into Syndial SpA), at the timeowner of the site, carried out safety and remediation works. TheMinistry for the Environment joined the action and requestedenvironmental damage payment – from a minimum of euro 53.5million to a maximum of euro 93.3 million – to be brokendown among the various companies that ran the plant in the past.With a sentence of March 2008, the Court of Genova rejected allclaims made by the Municipality of Carrara and the Ministry forthe Environment. The Second Instance Court too confirmed thedecision issued in the first judgment and rejected all the claimsmade by the plaintiffs. The Ministry for the Environment filed anappeal before a third instance court on the belief that Syndialis to be held responsible for the environmental damage as the Enisubsidiary took over the site form the previous owners assumingall existing liabilities; it was responsible for managing theplant and inadequately remediating the site after the occurrenceof an incident in 1984 and for omitted clean-up. Syndialestablished itself as defendant.

**(iv) Ministry for the Environment - Augusta harbor.** TheItalian Ministry for the Environment with various administrativeacts prescribed companies running plants in the petrochemicalsite of Priolo to perform safety and environmental remediationworks in the Augusta harbor. Companies involved include Enisubsidiaries Versalis, Syndial and Eni Refining & MarketingDivision. Pollution has been detected in this area primarily dueto a high mercury concentration which is allegedly attributed tothe industrial activity of the Priolo petrochemical site. Theabove mentioned companies opposed said administrative actions,objecting in particular to the way in which remediation workshave been designed and modes whereby information on pollutantsconcentration has been gathered. A number of administrativeproceedings were started on this matter, which were reunifiedbefore the Regional Administrative Court of Catania. In October2012, said Court sentenced in favor of the recourses filed byEni’s subsidiaries against the Ministry prescriptions aboutthe removal of pollutants and the construction of a physicalbarrier. The Court ruling was based on a sentence filed by theCourt of Justice of the European Community. Specifically, theEuropean Court confirmed the EU principle of the liabilityassociated with the environmental damage, while at the same timereaffirming the necessity to ascertain the relation between causeand effect and identify the entity that is actually liable forpolluting. It must be noted that the Public Prosecutor ofSiracusa commenced a criminal action against unknown persons inorder to verify the effective contamination of the Augusta harborand the risks relating to the execution of the clean-up projectproposed by the Ministry. The technical assessment disposed bythe Public Prosecutor generated the following outcomes: (a) nopublic health risk in the Augusta harbor; (b) absence of anyinvolvement on part of Eni companies in the contamination; and(c) drainages dangerousness. Based on those findings, the PublicProsecutor decided to dismiss the proceeding.

**(v) Claim for preventive technical inquiry – Court ofGela.** In February 2012, Eni’s subsidiaries Raffineria diGela SpA and Syndial SpA and the parent company Eni SpA (involvedin this matter through the operations of the Refining &Marketing Division) were notified a claim issued by 18 parents ofchild born malformed in the Municipality of Gela between 1992 and2007. The claim for preventive technical inquiry aims atverifying the relation of causality between the malformationpathologies suffered by the children of the plantiffs and theenvironmental pollution caused by the Gela site (pollutionderiving from the existence and activities at the industrialplants of the Gela refinery and Syndial SpA), quantifying thealleged damages suffered and eventually identifying the terms andconditions to settle the claim. The examination of the claimsfiled by the plaintiffs confirmed the lack of probatory evidencesin the relation of causality. In any case, the same issue was thesubject of previous inquiries in a number of proceedings, allresolved without the ascertainment of any illicit behavior onpart of Eni or its subsidiaries. A technical appraisal of thematter is pending. Furthermore, 15 more claims were notified toEni’s subsidiaries on the same matter. Those proceedings areongoing.

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**(vi) Environmental claim relating to the Municipality ofCengio – Plaintiffs: the Ministry for the Environment andthe Delegated Commissioner for Environmental Emergency in theterritory of the Municipality of Cengio.** The Ministry for theEnvironment and the Delegated Commissioner for EnvironmentalEmergency in the territory of the Municipality of Cengio summonedEni’s subsidiary Syndial before a Civil Court to obtain asentence condemning the Eni subsidiary to compensate theenvironmental damage relating to the site of Cengio. Theplaintiffs accused Syndial of negligence in performing theclean-up and remediation of the site. On the contrary, Syndialbelieves to have executed properly and efficiently the clean-upwork in accordance with the framework agreement signed with theinvolved administrations including the Ministry for theEnvironment in 2000. On February 6, 2013, a court in Genoasentenced the resumption of the proceeding and established atechnical appraisal to verify the existence of the environmentaldamage.

**(vii) Eni SpA – Reorganization procedure of theairlines companies Volare Group, Volare Airlines and Air Europe– Prosecuting body: Delegated Commissioner.**In March2009, Eni and its subsidiary Sofid (now Eni Adfin) were notifiedof a bankruptcy claw back as part of a reorganization procedurefiled by the airlines companies Volare Group, Volare Airlines andAir Europe which commenced under the provisions of Ministry ofProduction Activities, on November 30, 2004. The request regardedthe override of all the payments made by those entities to Eniand Eni Adfin, as Eni agent for the receivables collection, inthe year previous to the insolvency declaration from November 30,2003 to November 29, 2004, for a total estimated amount of euro46 million plus interest. Eni and Eni Adfin were admitted asdefendants. After the conclusion of the investigation, a courtruled against the claims made by the commissioners of thereorganization procedures. The relevant sentence was filed onMarch 1, 2012. The commissioners filed a counterclaim against thefirst degree sentence.

**(viii) Reorganization procedure of Alitalia Linee AereeItaliane SpA under extraordinary administration.**On January23, 2013, the Italian airline company Alitalia undergoing areorganization procedure summoned before the Court of Rome Eni,Exxon Italia and Kuwait Petroleum Italia SpA to obtain acompensation for alleged damages caused by a presumedanticompetitive behavior on part of the three petroleum companiesin the supply of jet fuel in the years 1998 through 2009. Theclaim was based on a deliberation filed by the Italian AntitrustAuthority on June 14, 2006. The antitrust deliberation accusedEni and other five petroleum companies of anticompetitiveagreements designed to split the market for jet fuel supplies andblocking the entrance of new players in the years 1998 through2006. The antitrust findings were substantially endorsed by anadministrative court. Alitalia has made a claim against the threepetroleum companies jointly and severally presenting twoalternative ways to assess the alleged damages. A firstassessment of the overall damages amounted to euro 908 million.This was based on the presumption that the anticompetitiveagreements among the defendants would have prevented Alitaliafrom autonomously purchasing supplies of jet fuel in the yearswhen the existence of the anticompetitive agreements wereascertained by the Italian Antitrust Authority and in subsequentyears until Alitalia ceased to operate airline activity. Alitaliaasserts the incurrence of higher supply costs of jet fuel of euro777 million excluding interest accrued and other items which addto the lower profitability caused by a reduced competitiveposition in the marketplace estimated at euro 131 million. Analternative assessment of the overall damage made by Alitaliastands at euro 395 million of which euro 334 million of higherpurchase costs for jet fuel and euro 61 million of lowerprofitability due to the reduced competitive position on themarketplace.

 

**2. Other judicial or arbitration proceedings**

**(i) Saipem SpA – CEPAV Uno.**Saipem holds aninterest in the CEPAV Uno Consortium (50.36%) which in 1991signed a contract with TAV SpA (now RFI - Rete FerroviariaItaliana SpA) for the construction of a fast-track railwayinfrastructure for high speed/high capacity trains from Milan toBologna. An arbitration proceeding has arisen to define certainamounts claimed by the Consortium against the buyer for allegedchanges in the scope of work, as the counterparties failed toreach an amicable settlement of the issues. The ArbitrationCommittee awarded the Consortium an amount of euro 54.253 millionthat was disbursed by RFI on February 7, 2013. Then, theConsortium filed three further claims amounting to euro 2,108million to take into account alleged damages, higher costsincurred for changes in the scope of work and other factors inaddition to interest accrued and revaluation. In February 2013,the Court of Rome rejected a recourse filed by RFI against theestablishment of the relevant arbitration committees in charge ofdefining the new claims made by the Consortium.

**(ii) Fos Cavaou.**An arbitration proceeding before theInternational Chamber of Commerce of Paris between the clientcompany Société du Terminal Méthanier Fos Cavaou (now FOSMAXLNG) and the contractor STS – a French consortiumparticipated by Saipem SA (50%), Technimont SpA (49%) andSofregaz SA (1%) – is pending. The memorandum filed byFOSMAX LNG supporting the arbitration proceeding claimed thepayment of euro 264 million for damage payment, delay penaltiesand costs incurred for the termination of the works.Approximately euro 142 million of the total amount requestedrelated to loss of profit, which is an item that cannot becompensated based on the existing contractual provisions with theexception of fraudulent and serious culpable behavior. STS 

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filed counterclaim for a total amount of approximately euro338 million as damage repayment due to the alleged excessiveinterference of FOSMAX LNG in the execution of the works andpayment of extra works not recognized by the client. Both partiesfiled their memoranda. Management expects the arbitrationproceeding to end the review of the issued by end of 2013 with afinal arbitration as early as in 2014.

 

**3. Antitrust, EU Proceedings, Actions of theAuthority for Electricity and Gas and of Other RegulatoryAuthorities**

**(i) Inquiries in relation to alleged anticompetitiveagreements in the area of elastomers – Prosecuting Body:European Commission.** On November 29, 2006, the EuropeanCommission ascertaining anticompetitive agreements in the fieldof BR and ESBR elastomers fined Eni and its subsidiary PolimeriEuropa (actually Versalis) for an amount of euro 272.25 million.Eni and its subsidiary filed claims against this decision beforethe European Court of First Instance in February 2007. Thehearings took place in October 2009. On July 13, 2011, the FirstInstance Court filed the decision to reduce the above mentionedfine to the amount of euro 181.5 million. In particular, theCourt annulled the increase of the fine related to theaggravating circumstance of recidivism. The companies involved inthe decision and the European Commission filed a claim before theEuropean Court of Justice. In addition the European Commissioncommunicated to the decision to start an inquiry for thedetermination of a new sanction. The Company filed an appealagainst this decision. The Commission communicated to Eni andVersalis the commencement of a new proceeding for a newevaluation of the existence of the requirement for theapplication of an increased fine based on the aggravatingcircumstance of recidivism. In August 2007, with respect to theabove mentioned decision of the European Commission, Enisubmitted a request for a negative ascertainment with the Courtof Milan aimed at proving the non-existence of alleged damagessuffered by tire BR/SBR manufacturers. The Court of Milandeclared the appeal inadmissible. Eni appealed against theCourt’s sentence. This appeal is still pending. In December2012, the First Instance Court of the European Union reduced toeuro 106 million the fine imposed to Eni and its subsidiaryPolimeri Europa from the original amount of euro 132.16 millionsanctioned on December 5, 2007 relating to allegedanticompetitive practices in the in CR elastomers sector, withother chemical companies, in violation of Article 81 of EC Treatyand of Article 53 of SEE agreement. Eni and Versalis haveappealed against this decision before the EU Court of Justice inorder to obtain the complete annulment of the economic sanction.Also the European Commission has appealed against the decision.

**(ii) Inquiry in relation to gas transportation.** InMarch 2012, the Italian Antitrust Authority started an inquirytargeting alleged anticompetitive behavior charged to Eni inconnection with the refusal to dispose of secondary transportcapacity on the Transitgas and TAG pipelines to third parties. OnJune 1, 2012, Eni filed a proposal of commitments pursuant toArticle 14-*ter* of Law No. 287/1990, aiming at settling theproceeding without the ascertainment of any illicit behavior. OnSeptember 6, 2012, the Authority accepted Eni proposal and statedthat the commitments were binding.

**(iii) Consob investigation - Saipem SpA.**Following theissue by Saipem SpA of its press release of January 29, 2013, inwhich it revised its 2012 earnings guidance and its outlook for2013, Saipem received a communication from Consob dated January31, 2013 asking it to describe the process of evaluation and theconsiderations that led to the decision to issue the pressrelease in question, to describe the information and data used toarrive at the revision of its guidance for 2012 profits and 2013revenues and profits and of its forecasts for 2014, and toprovide a list of persons included in the register maintainedpursuant to Article 115-*bis* of the Consolidated FinanceAct who had access to the data and information referred to in thepress release. Subsequently, in a letter dated February 1, 2013,Consob announced the commencement of an inspection of Saipempursuant to Article 187-*octies*, paragraph 3 of LegislativeDecree No. 58 of February 24, 1998 with the purpose of gatheringdocuments and information regarding the preparation of the pressrelease, the management of privileged information, and compliancewith legislation concerning transactions by relevant parties.Subsequently, Consob requested additional information from Saipemin communications of February 8 and 25, 2013, includinginformation concerning the variations between the last businessplan approved prior to January 29, 2013 and the new 2013-2016business plan. Saipem promptly responded to the abovecommunications supplying the documentation and informationrequested.

 

**4. Court inquiries**

**(i) EniPower SpA.**In June 2004, the Milan Public Prosecutorcommenced inquiries into contracts awarded by Eni’ssubsidiary EniPower and on supplies from other companies toEniPower. These inquiries were widely covered by the media. Itemerged that illicit payments were made by EniPower suppliers toa manager of EniPower who was immediately dismissed. The Courtpresented EniPower (commissioning entity) and Snamprogetti (nowSaipem SpA) (contractor of engineering and procurement services)with notices of process in accordance with existing lawsregulating the administrative responsibility of companies(Legislative Decree No. 231/2001). In accordance with its 

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transparency and integrity guidelines, Eni took the necessarysteps in acting as plaintiff in the expected legal action inorder to recover any damage that could have been caused to Eni bythe illicit behavior of its suppliers and of their and Eniemployees. In the meantime, preliminary investigations have foundthat both EniPower and Snamprogetti are not to be considereddefendants in accordance with existing laws regulating theadministrative responsibility of companies (Legislative DecreeNo. 231/2001). In August 2007, Eni was notified that the PublicProsecutor requested the dismissal of EniPower SpA andSnamprogetti SpA, while the proceeding continues against formeremployees of these companies and employees and managers of thesuppliers under the provisions of Legislative Decree No.231/2001. Eni SpA, EniPower and Snamprogetti presented themselvesas plaintiffs in the preliminary hearing. In the preliminaryhearing related to the main proceeding on April 27, 2009, theJudge for the Preliminary Hearing requested all the parties thathave not requested the plea-bargain to stand in trial, excludingcertain defendants as a result of the statute of limitations.During the hearing on March 2, 2010, the Court confirmed theadmission as plaintiffs of Eni SpA, EniPower SpA and Saipem SpAagainst the inquired parts under the provisions of LegislativeDecree No. 231/2001. Further employees of the companies involvedwere identified as defendants to account for their civilresponsibility. After the filing of the pleadings occurred in thehearing of July 12, 2011, the proceeding was postponed toSeptember 20, 2011. In that date the Court of Milan concludedthat nine persons were guilty for the above mentioned crimes. Inaddition, they were condemned jointly and severally to thepayment of all damages to be assessed through a dedicatedproceeding and to the reimbursement of the proceeding expensesincurred by the plaintiffs. The Court also resolved to dismissall the criminal indictments for 7 employees, representing somecompanies involved as a result of the statute of limitationswhile the trial ended with an acquittal or 15 individuals. Inrelation to the companies involved in the proceeding, the Courtfound that 7 companies are liable based on the provisions ofLegislative Decree No. 231/2001, imposing a fine and thedisgorgement of profit. Eni SpA and its subsidiaries, EniPowerand Saipem which took over Snamprogetti, acted as plaintiffs inthe proceeding also against the mentioned companies. The Courtrejected the position as plaintiffs of the Eni Group companies,reversing a prior decision made by the Court. This decision mayhave been made probably on the basis of a pronouncement made by aSupreme Court which stated the illegitimacy of the constitutionas plaintiffs made against any legal entity which is indictedunder the provisions of Legislative Decree No. 231/2001. TheCourt filed the ground of the judgment on December 19, 2011. Thecondemned parties filed an appeal against the above mentioneddecision.

**(ii) Trading.**An investigation is pending regarding twoformer Eni managers who were allegedly bribed by third parties inconnection with entering into certain transactions with two oilproduct trading companies. Within such investigation, on March10, 2005, the Public Prosecutor of Rome notified Eni of twojudicial measures for the seizure of documentation concerningEni’s transactions with the said companies. Eni is acting asplaintiff in this proceeding. The Judge for the PreliminaryHearing rejected most of the dismissal requests issued by thePublic Prosecutor. Basing on the decision of the Judge for thePreliminary Hearing, the Public Prosecutor of Rome notified Eni,as injured part, the summon against two former managers of theCompany charged of aggravated fraud related to the relevantpatrimonial damage caused to the injured part through the abuseof working relations and activities. The First Judge dismissedthe accusation for all the other defendants as a result of thestatute of limitations.

**(iii) TSKJ Consortium Investigations by U.S., Italian, andother Authorities.**Snamprogetti Netherlands BV has a 25%participation in the TSKJ Consortium companies. The remainingparticipations are held in equal shares of 25% by KBR, Technip,and JGC. Beginning in 1994, the TSKJ Consortium was involved inthe construction of natural gas liquefaction facilities at BonnyIsland in Nigeria. Snamprogetti SpA, the holding company ofSnamprogetti Netherlands BV, was a wholly owned subsidiary of Eniuntil February 2006, when an agreement was entered into for thesale of Snamprogetti to Saipem SpA and Snamprogetti was mergedinto Saipem as of October 1, 2008. Eni holds a 43% participationin Saipem. In connection with the sale of Snamprogetti to Saipem,Eni agreed to indemnify Saipem for a variety of matters,including potential losses and charges resulting from theinvestigations into the TSKJ matter referred to below, even inrelation to Snamprogetti subsidiaries. In recent years theproceeding was settled with the U.S. Authorities and certainNigerian Authorities, which had been investing into the matter.The proceeding is still pending before Italian judicialAuthorities.***The proceedings in the U.S.:*** following aninvestigation that lasted several years, in 2010 the Departmentof Justice and the SEC entered into settlements with each of theTSKJ consortium members. In particular, in July 2010,Snamprogetti Netherlands BV entered into a deferred prosecutionagreement with the DoJ, consented to the filing of a criminalinformation, and agreed to pay a fine of $240 million. Inaddition, Snamprogetti Netherlands BV and Eni reached anagreement with the SEC to resolve the investigation and jointlyagreed to pay disgorgement to the SEC of $125 million. Allamounts due to the U.S. Authorities were paid by Eni inaccordance with the indemnity granted by Eni in connection withits sale of Snamprogetti to Saipem. Following the two-year periodset out in the deferred prosecution agreement, in September 2012the DoJ dismissed the criminal information filed againstSnamprogetti Netherlands BV, thereby dismissing the criminalproceeding against Snamprogetti Netherlands BV.***The proceedings in Italy:*******beginning in 2004,the TSKJ matter has prompted investigations by the PublicProsecutor’s office of Milan against unknown persons. SinceMarch 10, 2009, the Company has received requests of exhibitionof documents from the Public Prosecutor’s office of Milan.The events under investigation cover the 

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period since 1994 and also concern the period of timesubsequent to the June 8, 2001, enactment of Italian LegislativeDecree No. 231 concerning the liability of legal entities. OnAugust 12, 2009, a decree issued by the Judge for the PreliminaryInvestigations at the Court of Milan was served on Eni (and onJuly 31, 2009 on Saipem SpA, as legal entity incorporatingSnamprogetti SpA). The decree set a hearing in Court in relationto a proceeding ex Legislative Decree No. 231 of June 8, 2001whereby the Public Prosecutor of Milan is investigating Eni SpAand Saipem SpA for liability of legal entities arising fromoffences involving international corruption charged to formermanagers of Snamprogetti SpA. The Public Prosecutor of Milanrequested Eni SpA and Saipem SpA to be debarred from activitiesinvolving – directly or indirectly – any agreement withthe Nigerian National Petroleum Corp and its subsidiaries. Theevents referred to the request of precautionary measures of thePublic Prosecutor of Milan cover TSKJ Consortium practices duringthe period from 1995 to 2004. In this regard, the PublicProsecutor claimed the inadequacy and violation of theorganizational, management and control model adopted to preventthose offences charged to people subject to direction andsupervision. On November 17, 2009, the Judge for the PreliminaryInvestigations rejected the request of precautionary measures ofdisqualification filed by the Public Prosecutor of Milan againstEni and Saipem. The Public Prosecutor of Milan appealed the abovementioned decision before the Third Instance Court. The Courtdecided that the request of precautionary measures be admissibleaccording to Legislative Decree No. 231/2001 even in the case ofinternational corruption. The issue would be subsequentlyexamined by the Appeal Court of Milan. On February 18, 2011, thePublic Prosecutor of Milan, with respect to the guarantee paymentamounting to euro 24,530,580, even in the interest of Saipem SpA,renounced to contest the decision of rejection of precautionarymeasures of disqualification for Eni SpA and Saipem SpA issued bythe Judge for the Preliminary Hearing. In the hearing of February22, 2011, the Re-examination Court, taking note of the abovementioned renounce, declared inadmissible the appeal of thePublic Prosecutor of Milan and closed the proceeding related tothe request of precautionary measures of disqualification for EniSpA and Saipem SpA. On November 3, 2010, the defense of Saipemwas notified the conclusion of the investigations relating to theproceeding pending before the Court of Milan trough a deed bywhich the Court evidenced the alleged violations made by the fiveformer Snamprogetti SpA (now Saipem SpA) and Saipem SpA being theparent company of Snamprogetti. The deed does not involve the EniGroup parent company Eni SpA. The charged crimes involve allegedcorruptive events that have occurred in Nigeria after July 31,2004. It is also stated the aggravating circumstance thatSnamprogetti SpA reported a relevant profit (estimated atapproximately $65 million). On December 3, 2010, the defense ofSaipem was notified the opening of a proceeding with the firsthearing scheduled for December 20, 2010. In the hearing ofJanuary 26, 2011, the Public Prosecutor requested five formeremployees of Snamprogetti SpA (now Saipem) and Saipem SpA (aslegal entity incorporating Snamprogetti) to stand trial in thehearing scheduled for April 2011. In the hearing of February 2,2012, although the term for the occurrence of the statute oflimitations for the individuals who are acting as plaintiffs wasexpired, the Public Prosecutor raised an issue of constitutionallegitimacy for the incompatibility between the internal andinternational legislation on the statute of limitation, inparticular the OECD convention on the fight against theinternational corruption. The Court dismissed the case withrespect to the position of the individuals who were acting asplaintiffs for the expiration of the statute of limitations whilethe proceeding continues for Saipem SpA. In the hearing of July12, 2012, the Judge reviewed the technical consultants of thedefendant and the appraiser reports were filed. After a number ofpostponements at the final hearing held on February 5, 2013Saipem defense raised an issue of constitutional legitimacy inrelation to certain provisions of Legislative Decree No. 231/2001relating to the alleged crimes under investigation. In thesubsequent hearing of March 26, 2013, the Court of Milan rejectedthe issues of constitutional legitimacy raised by the Company asthey were considered groundless. In the same hearing the PublicProsecutor required Saipem SpA to pay a fine amounting to euro900,000 and the disgorgement of the guarantee payment of euro24,530,580, made by Snamprogetti Netherlands BV to the PublicProsecutor of Milan in February 2011. The hearing was postponedto May 21, 2013 when the Company will present its defensivememorandum. It is worth mentioning that the Board of Directors ofEni and Saipem in 2009 and 2010, respectively, approved newguidelines and anti-corruption policies regulating Eni and Saipemmanagement of the business. The guidelines integratedanti-corruption policies of the Company, aligning them to theinternational best practices, optimizing the compliance systemand granting the highest respect of Eni, Saipem and their workersof the Code of Ethics, 231 Model and national and internationalanti-corruption policies.

**(iv) Gas metering.**In May 2007, a seizure order (inrespect to certain documentation) was served upon Eni and otherGroup companies as part of a proceeding brought by the PublicProsecutor at the Court of Milan. The order was also served uponfive top managers of the Group companies in addition to thirdparty companies and their top managers. The investigation allegesbehavior which breaches Italian Criminal Law, starting from 2003,regarding the use of instruments for measuring gas, the relatedpayments of excise duties and the billing of clients as well asrelations with the Supervisory Authorities. The allegationregards, inter alia, the offense contemplated by LegislativeDecree of June 8, 2001, No. 231, which establishes the liabilityof the legal entity for crimes committed by its employee in theinterests of such legal entity, or to its advantage. Accordingly,notice of the commencement of investigations was served upon EniGroup companies (Eni, Snam Rete Gas and Italgas) as well as thirdparty companies. In relation to this proceeding, the PublicProsecutor of Milan requested the dismissal for certain peopleindicted, including a top manager as the Prosecutor did not findsufficient elements to support the indictment in a 

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possible trial. The request was preceded by a request ofdismissal from the principal proceeding of the dismissed people.On January 24, 2012, the Judge for the Preliminary Hearingdisposed the dismissal of these people.

***Croatian gas metering:*** this was a new proceedingpart of the principal proceeding describe above. On November 26,2009, a notice of conclusion of the preliminary investigation wasserved to Eni’s Group companies whereby 12 Eni employees,also including former employees, are under investigation. Theexceptions filed in the notice include: (i) violationspertaining to recognition and payment of the excise on naturalgas amounting to euro 20.2 billion; (ii) violations orfailure in submitting the annual statement of gas consumptionand/or in the annual declarations to be filed with the DutyAuthority or the Authority for Electricity and Gas; and (iii) arelated obstacle which has been allegedly posed to the monitoringfunctions performed by the Authority for Electricity and Gas. Inthe subsequent hearing of January 24, 2012, the Judge resolved todismiss the proceeding against all defendants. The PublicProsecutor filed an appeal against this decision before the ThirdInstance Court. The appeal did not refer to all the defendantsbut only to some of them. On February 11, 2013, the Courtrejected the appeal referred to Eni and its subsidiariespositions in particular: (i) declaring its inadmissibility inrelation to one of the defendants; and (ii) dismissing itfor all the other alleged crimes. The decision filed by the Judgefor Preliminary Hearing is therefore irrevocable.***Gas metering excise:***on December 20, 2010, as aresult of a further dismissal of judicial position from the mainproceeding, the Public Prosecutor of Milan notified to nineemployees and former employees of Eni (in particular belonging tothe Gas & Power Division) the conclusion of theinvestigation related to the crime under the provisions ofArticle 40 (violations pertaining to recognition and payment ofthe excise on mineral oils) of Legislative Decree No. 504 ofOctober 26, 1995. The deed also disputed certain violationspertaining to subtraction of taxable amounts and missed paymentsof excise taxes on natural gas amounting to euro 0.47 billion andeuro 1.3 billion, respectively. The Duty Authority of Milan,responsible for the collection of dodged taxes, considering thedocumentation filed by Eni, reduced the amount initially claimedby the Public Prosecutor to euro 114 million of dodged taxes. TheDuty Authority also stated that it would reassess that amountconsidering further evidence arising from the criminalproceeding. The Judge resolved to dismiss the proceeding againstall defendants because the fact did not constitute an offence.The Public Prosecutor filed an appeal against this decisionbefore the Third Instance Court.

**(v) Algeria – Corruption investigation.**Authorities in Italy and in other countries are investigatingallegations of corrupt payments that would have occurred inAlgeria in connection with the award of certain contracts toSaipem. On February 4, 2011, Eni received from the PublicProsecutor of Milan an information request pursuant to Article248 of the Italian Code of Criminal Procedure. The notificationwas then forwarded to Eni’s subsidiary Saipem SpA since thismatter is primarily in its area of responsibility. The requestrelated to allegations of international corruption and pertainedto certain activities performed by Saipem Group companies inAlgeria (in particular the contract between Saipem and Sonatrachrelating to the construction of the GK3 gas pipeline andthe contract between Galsi, Saipem and Techniprelating to the engineering of the ground section of a gaspipeline). The crime of international corruption is among theoffenses contemplated by Legislative Decree of June 8, 2001, No.231, relating to corporate responsibility for crimes committed byemployees. Saipem promptly began to collect documentation inresponse to the requests of the Public Prosecutor. The documentswere produced on February 16, 2011. Eni also filed documentationrelating to the MLE project (in which the Eni’s Exploration& Production Division participates), with respect towhich investigations in Algeria are ongoing. On November 22,2012, the Public Prosecutor of Milan served Saipem a noticestating that it had commenced an investigation for allegedliability of the Company for international corruption inaccordance to Article 25, second and third paragraph ofLegislative Decree No. 231/2001. Furthermore the prosecutorrequested the production of certain documents relating to certainactivities in Algeria. Subsequently, on November 30, 2012, Saipemwas served a notice of seizure, then, on December 18, 2012, arequest for documentation and finally, on January 16, 2013, asearch warrant was issued, in order to acquire furtherdocumentation. On February 7, 2013, on mandate from the PublicProsecutor of Milan, the Italian financial police visitedEni’s headquarters in Rome and San Donato Milanese andexecuted searches and seized documents relating to Saipem’sactivity in Algeria. On the same occasion, Eni was served anotice that an investigation had commenced in accordance withArticle 25, third and fourth paragraph of Legislative Decree No.231/2001 with respect to Eni, Eni’s CEO, Eni’s formerCFO, and another senior manager. The investigation relates toalleged corruption which, according to the Public Prosecutor, hadoccurred with regard to certain contracts awarded to Saipem inAlgeria up until March 2010. The former CEO and the former COO ofthe business unit Engineering & Construction of Saipem, aswell as other Saipem employees and former employees are underinvestigation. Saipem has promptly undertaken management andadministrative changes, irrespective of any liability that mightresult from the investigations. Saipem has commenced an internalinvestigation in relation to the contracts in question with thesupport of external advisors; such internal investigation isconducted in agreement with the statutory bodies deputed to theCompany’s control and the Italian Public Prosecutor has beeninformed of this internal investigation. In addition, Saipem hascommenced a review aiming at verifying the correct application ofinternal procedures and controls relating to anti-corruption andprevention of illicit activities, with the assistance of externalconsultants. The evaluation is ongoing. Saipem is cooperating with the Italian JudicialAuthority. Eni has commenced its ownevaluation which is ongoing. 

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The above mentioned proceeding hasbeen unitized in Italy with another proceeding relating to certain Eni’s activitiesperformed in Iraq and Kazakhstan (see below). Investigations arealso ongoing in Algeria where the bank accounts of aSaipem’s subsidiary, Saipem Contracting Algérie SpA, havebeen blocked by the Algerian Authorities. Currently two bankaccounts with a balance equivalent to euro 79 million are blockedas of January 25, 2013. In September 2012, a notice ofinvestigation was served to Saipem Contracting Algérie SpA.Saipem Contracting Algérie SpA is alleged to have takenadvantage of the authority or influence of representatives of agovernment owned industrial and trading company in order toinflate prices in relation to contracts awarded by said company.On January 30, 2013, the Judicial Authority in Algeria orderedSaipem’s Algerian subsidiary to stand trial and reaffirmedthe blockage of the above mentioned bank accounts. SaipemContracting Algérie SpA has lodged an appeal against thisdecision before the Supreme Court. On March 24, 2013, relevantauthorities executed searches on Saipem Contracting Algérie SpAheadquarters.

**(vi) Libya.**On June 10, 2011, Eni received by the U.S.SEC a formal judicial request of collection and presentation ofdocuments (subpoena) related to Eni’ s activity in Libyafrom 2008 until now. The subpoena is related to an ongoinginvestigation without further clarifications nor specific allegedviolations in connection to "certain illicit payments toLibyan officials" possibly violating the U.S. ForeignCorruption Practice Act. At the end of December 2011, Enireceived a request for the collection of further documentationaiming at integrating the subpoena previously received.Documentation and information requested have been collected bythe relevant company functions and then forwarded to the U.S.SEC. Following a number of contacts with the U.S. SEC, in ameeting on October 16, 2012, Eni legal team provided additionaldocumentations and clarifications.

**(vii) Iraq – Kazakhstan.**A criminal proceeding ispending before the Public Prosecutor of Milan in relation toalleged crimes of international corruption involving Eni’sactivities in Kazakhstan regarding the management of theKarachaganak plant and the Kashagan project, as well as handlingof assignment procedures of work contracts by Agip KCO. The crimeof "international corruption" is sanctioned, inaccordance to the Italian criminal code, by Legislative Decree ofJune 8, 2001, No. 231, which holds legal entities liable for thecrimes committed by their employees on their behalf. The Companyhas filed the documents collected and is fully collaborating withthe Public Prosecutor. A number of managers and a former managerare involved in the investigation. The above mentioned proceedinghas been reunified with another (the so-called "Iraqproceeding") regarding a parallel proceeding related toEni’s activities in Iraq, disclosed in the followingparagraphs. On June 21, 2011, Eni Zubair SpA and Saipem SpA inFano (Italy) were notified that a search warrant had been issuedto search the offices and homes of certain employees of the Groupand of certain third parties. In particular the homes and officesof an employee of Eni Zubair and a manager of Saipem weresearched by the authorities. The accusation is of criminalconspiracy and corruption in relation with the activity of EniZubair in Iraq and of Saipem in the "Jurassic" projectin Kuwait. The Public Prosecutor of Milan has associated EniZubair, Eni and Saipem with the accusations as a result of thealleged illicit actions of their employees. Eni considers thoseemployees to have breached the Company's Code of Ethics. The EniZubair employee resigned and the Company, accepting theresignation, reserved the right to take action against theindividual to defend its interests and subsequently commenced alegal action against the other persons mentioned in the seizureact. Notwithstanding that the Eni Group companies appear to beoffended parties in respect of the illicit conduct underinvestigation, Eni SpA and Saipem SpA also received, at the sametime the search warrant was issued, a notification pursuant tothe Legislative Decree No. 231/2001. Eni SpA was notified by the PublicProsecutor of a request of extension of the preliminaryinvestigations that has led up to the involvement of anotheremployee as well as other suppliers in the proceeding. Eniperformed a review of the whole matter also with the support ofan external consulting firm which issued its final appraisalreport on July 25, 2012. According to the opinion of its legalteam, the Company’s watch structure and Internal ControlCommittee, Saipem too commenced through its Internal Auditdepartment, an internal review about the project with the supportof an external consultant. The Public Prosecutor of Milanrequested Eni SpA to be debarred for one year and six months fromperforming any industrial activities involving the productionsharing contract of 1997 with the Republic of Kazakhstan and inthe subsequent administrative or commercial arrangements, or theprosecution of the mentioned activities under the supervision ofa commissioner pursuant to Article 15 of the Legislative DecreeNo. 231/2001. In the hearing of May 29, 2012, Eni legal team havefiled a defensive memorandum; on August 1, 2012, the PublicProsecutor filed further documentation supporting the request ofprecautionary measures. After the hearing of November 14, 2012,the decision of the Judge for Preliminary Investigation is stillpending.

 

**5. Tax Proceedings**

**ITALY**

**(i) Eni SpA. Dispute for the omitted payment of a municipaltax related to oil platforms located in territorial waters in theAdriatic Sea.**With a formal assessment presented in December1999, the Municipality of Pineto (Teramo) claimed Eni SpA to have omitted payment of amunicipal tax on real estate for the period from 1993 to 1998 onfour oil platforms located in the Adriatic Sea which constitutemunicipal waters. Eni was requested to pay a total ofapproximately euro 17 million including interest and a fine. Enifiled a counterclaim stating that the 

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sea where the platforms arelocated is not part of the municipal territory and the taxapplication as requested by the municipality lacked objectivefundamentals. The claim has been accepted in the first twodegrees of judgment at the Provincial and Regional TaxCommissions. However, the Supreme Degree Court overturned bothjudgments, declaring that a municipality can consider requestinga tax on real estate in the sea facing its territory and with thedecision of February 2005 sent the proceeding to another sectionof the Regional Tax Commission in order to judge on the mattersof the proceeding. This commission requested an independentconsultant to assessing the tax and technical aspects of thematter. The independent consultant confirmed that Eni’soffshore installations lack any ground to be subject to themunicipal tax that was claimed by the local municipality. Thosefindings were accepted by the Regional Tax Commission with aruling made on January 19, 2009. On January 25, 2011, theMunicipality notified to Eni an appeal to the Supreme DegreeCourt for the cancellation of the above mentioned sentence. Alsoon December 28, 2005, the Municipality of Pineto presentedsimilar claims relating to the same Eni platforms for the years1999 to 2004. The total amount requested was euro 25 millionincluding interest and penalties. Eni filed a claim against thisclaim which was accepted by the First Degree Judge with adecision of December 4, 2007. Also a second degree court ruled infavor of Eni’s recourses with a sentence filed in June 2012.Terms are pending to file a counterclaim before a third degreecourt.

Similar formal assessments related to Eni oil and gas offshoreplatforms were presented by the Municipalities of FalconaraMarittima, Tortoreto, Pedaso, and also from 2009 the GelaMunicipality. The total amounts of those claims wereapproximately euro 7.5 million. The Company filed appeal againstall those claims. A tax commission in Sicily ruled in favor ofEni accepting the recourse against the tax claims presented bythe Municipality of Gela.

 

**OUTSIDE ITALY**

**(i) Eni Angola Production BV.** In 2009, the Ministry ofthe Finance of Angola, following a fiscal audit, filed a noticeof tax assessment for fiscal years 2002 to 2007 in which itclaimed the improper deductibility of amortization chargesrecognized on assets in progress related to the payment of thePetroleum Income Tax that was made by Eni Angola Production BV asco-operator of the Cabinda concession. The Company filed anappeal against this decision. The judgment is still pendingbefore the Supreme Court. Eni accrued a provision with respect tothis proceeding.

**(ii) Eni’s subsidiary in Indonesia.** A taxproceeding is pending against Eni’s subsidiary Lasmo SangaSanga Ltd as the Tax Administration of Indonesia has questionedthe application of a tax rate of 10% on the profit earned by thelocal branch of Eni’s subsidiary for fiscal years 2002through 2009. Eni’s subsidiary, which is resident in the UKfor tax purposes, believes that the 10% tax rate is warranted bythe current treaty for the avoidance of double taxation. On thecontrary, the Tax Administration of Indonesia has claimed theapplication of the local tax rate of 20%. The greater taxes duein accordance to the latter rate have been disbursed amounting to$130 million including interest expense. Eni’s subsidiaryhas filed an appeal claiming the opening of an amicable procedureto settle the matter and avoid bearing a tax regime not incompliance with the UK/Indonesia treaty.

 

**6. Settled legal proceedings**

**(i) Summon before the Court of Venice for environmentaldamages allegedly caused to the lagoon of Venice by the PortoMarghera plants.**The proceeding was settled due to thetransaction agreement incurred between Syndial and the Provinceof Venice. The amount paid for the settlement of the proceedingis immaterial.

**(ii) Syndial SpA (former EniChem SpA).****Allegedpollution caused by the activity of the Mantova plant.**Followingthe transaction agreement incurred in July 2012, between theMinistry for the Environment and Syndial for the repayment of theenvironmental damage related to the contamination caused by thewater discharges of the Mantova plant, the proceeding could beconsidered virtually settled. The amount paid for the settlementof the proceeding is immaterial.

**(iii) Karachaganak.**On December 14, 2011, theinternational companies operating the Karachaganak field,including Eni which co-operates the field, and the Republic ofKazakhstan signed a settlement agreement of a contractual claimon cost recovery, including certain tax disputes. In particular,the Kazakh Tax Authorities claimed that Agip Karachaganak BV andKarachaganak Petroleum Operating BV, shareholder and operator ofthe Karachaganak contract, respectively, omitted payment ofincome taxes and other tax items for the period 2000-2009. Then, Kazakh Authorities notified a claim on the recovery ofexpenditures incurred by the operating company in the period2003-2009. The agreement became effective on June 28, 2012.

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**Assets under concession arrangements**Eni operates under concession arrangements mainly inthe Exploration & Production segment and the Refining &Marketing segment. In the Exploration & Production segmentcontractual clauses governing mineral concessions, licenses andexploration permits regulate the access of Eni to hydrocarbonreserves. Such clauses can differ in each Country. In particular,mineral concessions, licenses and permits are granted by thelegal owners and, generally, entered into with governmententities, State oil companies and, in some legal contexts,private owners. As a compensation for mineral concessions, Enipays royalties and taxes in accordance with local taxlegislation. Eni sustains all the operation risks and costsrelated to the exploration and development activities and it isentitled to the productions realized. In Production SharingAgreement and in buy-back contracts, realized productions aredefined on the basis of contractual agreements drawn up withState oil companies which hold the concessions. Such contractualagreements regulate the recovery of costs incurred for theexploration, development and operating activities (cost oil) andgive entitlement to the own portion of the realized productions(profit oil). In the Refining & Marketing segmentseveral service stations and other auxiliary assets of thedistribution service are located in the motorway areas and theyare granted by the motorway concession operators following apublic tender for the sub-concession of the supplying of oilproducts distribution service and other auxiliary services. Suchassets are amortized over the length of the concession(generally, 5 years for Italy). In exchange of the granting ofthe services described above, Eni provides to the motorwaycompanies fixed and variable royalties on the basis of quantitiessold. At the end of the concession period, all non-removableassets are transferred to the grantor of the concession. Assetsunder concessions relating to natural gas storage in Italy and tothe gas distribution of the Gas & Power segment pertained toSnam Group that was deconsolidated following the sale of control.

**Environmental regulations**Risks associated with the footprint of Eni’sactivities on the environment, health and safety are described in"Financial Review", paragraph "Risk factors anduncertainties". In the future, Eni will sustain significantexpenses in relation to compliance with environmental, health andsafety laws and regulations and for reclaiming, safety andremediation works of areas previously used for industrialproduction and dismantled sites. In particular, regarding theenvironmental risk, management does not currently expect anymaterial adverse effect upon Eni’s consolidated financialstatements, taking account of ongoing remedial actions, existinginsurance policies and the environmental risk provision accruedin the consolidated financial statements. However, managementbelieves that it is possible that Eni may incur material lossesand liabilities in future years in connection with environmentalmatters due to: (i) the possibility of as yet unknowncontamination; (ii) the results of the ongoing surveys and theother possible effects of statements required by LegislativeDecree No. 152/2006 of the Ministry for the Environment; (iii)new developments in environmental regulation; (iv) the effect ofpossible technological changes relating to future remediation;and (v) the possibility of litigation and the difficulty ofdetermining Eni’s liability, if any, as against otherpotentially responsible parties with respect to such litigationand the possible insurance recoveries.

**Emission trading**Legislative Decree No. 216 of April 4, 2006implemented the Emission Trading Directive 2003/87/EC concerninggreenhouse gas emissions and Directive 2004/101/EC concerning theuse of carbon credits deriving from projects for the reduction ofemissions based on the flexible mechanisms devised by the KyotoProtocol. This European emission trading scheme has been in forcesince January 1, 2005, and on this matter, on November 27, 2008,the National Committee for Emissions Trading Scheme (Ministry forthe Environment-Mse) published the Resolution No. 20/2008defining emission permits for the 2008-2012 period. Eni wasassigned permits corresponding to 122.9 mmtonnes of carbondioxide (of which, 24.9 in 2008, 24.9 in 2009, 24.6 in 2010, 24.4in 2011, 24.1 in 2012) and in addition to approximately 3.3million of permits expected to be assigned with respect to newplants in the five-year period 2008-2012. Emission quotas of newplants include only those physically assigned and recorded in theemissions registry. Emissions of carbon dioxide from Eni’splants were lower than permits assigned in 2012. Againstemissions of carbon dioxide amounted to approximately 22.1mmtonnes, emission permits amounting to 25.0 million tonnes wereassigned (including the permits assigned with respect to newplants), determining a 2.9 mmtonnes surplus not recognized asasset in the balance sheet.

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**35 Revenues**

**Net sales from operations**

| (euro million) |   | **2010** |   | **2011** |   | **2012** |
|----------------|--------|----------|--------|----------|--------|----------|
|           |   |          |   |          |   |          |

| Net sales from operations                  |   | 96,958     |   |   | 107,248     |   | 126,482     |
|--------------------------------------------|--------|------------|--------|--------|-------------|--------|-------------|
| Change in        contract work in progress |   | (341       | )      |   | 442         |   | 738         |
|                                       |   | **96,617** |   |   | **107,690** |   | **127,220** |
|                                       |   |            |        |   |             |   |             |

Net sales from operations were stated net of thefollowing items:

| (euro million) |   | **2010** |   | **2011** |   | **2012** |
|----------------|--------|----------|--------|----------|--------|----------|
|           |   |          |   |          |   |          |

| Excise taxes                                                                                |   | 11,785     |   | 11,863     |   | 13,308     |
|---------------------------------------------------------------------------------------------|--------|------------|--------|------------|--------|------------|
| Exchanges        of oil sales (excluding excise taxes)                                      |   | 1,868      |   | 2,470      |   | 2,177      |
| Services billed to joint venture partners                                                   |   | 2,996      |   | 3,375      |   | 4,422      |
| Sales to        service station managers for sales billed to holders of        credit cards |   | 2,150      |   | 1,810      |   | 2,010      |
| Exchanges of other products                                                                 |   | 79         |   | 9          |   |       |
|                                                                                        |   | **18,878** |   | **19,527** |   | **21,917** |
|                                                                                        |   |            |   |            |   |            |

Net sales from operations of euro 126,482 million includedrevenues recognized in connection with contract works in theEngineering & Construction segment for euro 10,914 million(euro 8,779 million and euro 10,510 million in 2010 and 2011,respectively).

Net sales from operations by industry segment and geographicarea of destination are disclosed in note 41 – Informationby industry segment and geographic financial information.

Net sales from operations with related parties are disclosedin note 42 – Transactions with related parties.

**Other income and revenues**

| (euro million) |   | **2010** |   | **2011** |   | **2012** |
|----------------|--------|----------|--------|----------|--------|----------|
|           |   |          |   |          |   |          |

| Gains from sale of assets                                                            |   | 262     |   | 97      |   | 701       |
|--------------------------------------------------------------------------------------|--------|---------|--------|---------|--------|-----------|
| Lease and        rental income                                                       |   | 83      |   | 96      |   | 94        |
| Contract penalties and other trade revenues                                          |   | 43      |   | 21      |   | 69        |
| Gains on        price adjustments under overlifting/underlifting        transactions |   | 50      |   | 99      |   | 67        |
| Compensation for damages                                                             |   | 46      |   | 66      |   | 56        |
| Other        proceeds (*)                                                            |   | 483     |   | 547     |   | 559       |
|                                                                                 |   | **967** |   | **926** |   | **1,546** |
|                                                                                 |   |         |   |         |   |           |

|     |     |                                                                       |
|--------------------|--------------------|--------------------------------------------------------------------------------------|
| (*)                |     | Each        individual amount included herein was lower than euro 50        million. |

Gains from the sale of assets of euro 701 millionincluded euro 678 million of gains relating to the Exploration& Production segment.

Other income and revenues with related parties are disclosedin note 42 – Transactions with related parties.

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**36 Operating expenses**

**Purchase, services and other**

| (euro million) |   | **2010** |   | **2011** |   | **2012** |
|----------------|--------|----------|--------|----------|--------|----------|
|           |   |          |   |          |   |          |

| Production costs - raw, ancillary and consumable        materials and goods                        |   | 48,407     |   |   | 60,826     |   |   | 74,767     |   |
|----------------------------------------------------------------------------------------------------|--------|------------|--------|--------|------------|--------|--------|------------|--------|
| Production        costs - services                                                                 |   | 14,939     |   |   | 13,551     |   |   | 15,354     |   |
| Operating leases and other                                                                         |   | 2,997      |   |   | 3,045      |   |   | 3,434      |   |
| Net        provisions for contingencies                                                            |   | 1,401      |   |   | 527        |   |   | 871        |   |
| Other expenses                                                                                     |   | 1,252      |   |   | 1,140      |   |   | 1,342      |   |
|                                                                                               |   | **68,996** |   |   | **79,089** |   |   | **95,768** |   |
| less:                                                                                              |   |       |   |   |       |   |   |       |   |
| -        capitalized direct costs associated with self-constructed        assets - tangible assets |   | (159       | )      |   | (226       | )      |   | (326       | )      |
| - capitalized direct costs associated with        self-constructed assets - intangible assets      |   | (63        | )      |   | (68        | )      |   | (79        | )      |
|                                                                                               |   | **68,774** |   |   | **78,795** |   |   | **95,363** |   |
|                                                                                               |   |            |        |   |            |        |   |            |        |

Services included brokerage fees related to the Engineering& Construction segment for euro 6 million (euro 26 millionand euro 12 million in 2010 and 2011, respectively).

Costs incurred in connection with research and developmentactivity recognized in profit and loss amounted to euro 211million (euro 218 million and euro 190 million in 2010 and 2011,respectively) as they did not meet the requirements to berecognized as long-lived assets.

Operating leases and other comprised operating leases for euro1,432 million (euro 1,388 million and euro 1,295 million in 2010and 2011, respectively) and royalties on the extraction ofhydrocarbons for euro 1,555 million (euro 1,214 million and euro1,295 million in 2010 and 2011, respectively). 

Other expenses of euro 1,342 million included losses ondisposal of tangible and intangible assets for euro 158 million.

Future minimum lease payments expected to be paid undernon-cancelable operating leases are provided below:

| (euro million) |   | **2010** |   | **2011** |   | **2012** |
|----------------|--------|----------|--------|----------|--------|----------|
|           |   |          |   |          |   |          |

| To be paid within 1 year     |   | 1,022     |   | 838       |   | 722       |
|------------------------------|--------|-----------|--------|-----------|--------|-----------|
| Between 2        and 5 years |   | 2,276     |   | 1,380     |   | 1,289     |
| Beyond 5 years               |   | 751       |   | 254       |   | 560       |
|                         |   | **4,049** |   | **2,472** |   | **2,571** |
|                         |   |           |   |           |   |           |

Operating leases primarily regarded drilling rigs, timecharter and long-term rentals of vessels, lands, service stationsand office buildings. Such leases did not include renewaloptions. There are no significant restrictions provided by theseoperating leases which may limit the ability of Eni to paydividends, use assets or take on new borrowings.

Risk provisions net of reversal of unused provisions amountedto euro 871 million (euro 1,401 million and euro 527 million in2010 and 2011, respectively) and mainly related to pricerevisions at certain gas purchase and sale long-term contractsalso subjected to arbitration procedures of euro 496 million (netreversals of euro 182 million in 2010 and net provisions of euro144 million in 2011) and environmental liabilities amounting toeuro 67 million (net provisions of euro 1,344 million and euro174 million in 2010 and 2011, respectively). More information isprovided in note 27 – Provisions for contingencies.

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**Payroll and related costs**

| (euro million) |   | **2010** |   | **2011** |   | **2012** |
|----------------|--------|----------|--------|----------|--------|----------|
|           |   |          |   |          |   |          |

| Wages and salaries                                                                                   |   | 3,299     |   |   | 3,435     |   |   | 3,886     |   |
|------------------------------------------------------------------------------------------------------|--------|-----------|--------|--------|-----------|--------|--------|-----------|--------|
| Social        security contributions                                                                 |   | 631       |   |   | 675       |   |   | 674       |   |
| Cost related to employee benefits plans                                                              |   | 154       |   |   | 148       |   |   | 148       |   |
| Other        costs                                                                                   |   | 557       |   |   | 334       |   |   | 187       |   |
|                                                                                                 |   | **4,641** |   |   | **4,592** |   |   | **4,895** |   |
| less:                                                                                                |   |      |   |   |      |   |   |      |   |
| - capitalized direct costs associated with        self-constructed assets - tangible assets          |   | (168      | )      |   | (144      | )      |   | (182      | )      |
| -        capitalized direct costs associated with self-constructed        assets - intangible assets |   | (45       | )      |   | (44       | )      |   | (55       | )      |
|                                                                                                 |   | **4,428** |   |   | **4,404** |   |   | **4,658** |   |
|                                                                                                 |   |           |        |   |           |        |   |           |        |

Other costs of euro 187 million (euro 557 million and euro 334million in 2010 and 2011, respectively) comprised costs fordefined contribution plans of euro 100 million (euro 95 millionand euro 94 million in 2010 and 2011, respectively) andprovisions for redundancy incentives of euro 64 million (euro 400million and euro 203 million in 2010 and 2011, respectively).

Cost related to employee benefit plans are described in note28 – Provisions for employee benefits.

**Average number of employees**The Group average number and break-down of employeesby category is reported below:

| (number) |   | **2010** |   | **2011** |   | **2012** |
|----------|--------|----------|--------|----------|--------|----------|
|     |   |          |   |          |   |          |

| Senior managers        |   | 1,446      |   | 1,461      |   | 1,471      |
|------------------------|--------|------------|--------|------------|--------|------------|
| Junior        managers |   | 12,616     |   | 12,796     |   | 12,976     |
| Employees              |   | 34,265     |   | 35,309     |   | 37,258     |
| Workers                |   | 24,288     |   | 23,605     |   | 23,501     |
|                   |   | **72,615** |   | **73,171** |   | **75,206** |
|                   |   |            |   |            |   |            |

The average number of employees was calculated as averagebetween the number of employees at the beginning and end of theperiod. The average number of senior managers included managersemployed and operating in foreign subsidiaries, whoseresponsibility and position are comparable to those of a seniormanager.

**Stock-based compensation**In 2009, Eni terminated any stock-based incentiveschemes. Information provided below is about the residualactivity of past stock incentive schemes.

Stock options plans outstanding as of December 31, 2012entitled Eni’s Group companies top managers and managerswith strategic responsibilities (excluding Group listedsubsidiaries) to no consideration grants to purchase treasuryshares with a 1 to 1 ratio. The strike price was determined asarithmetic average of official prices registered on the MercatoTelematico Azionario in the month preceding the grant date or theaverage carrying amount of treasury shares as of the daypreceding the grant, if greater.

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At December 31, 2012, 8,259,520 options were outstanding forthe purchase of 8,259,520 Eni ordinary shares (no par value). Thebreak-down of outstanding options was the following:

|   |   | **Rights outstanding         as of Dec. 31, 2012**(number) |   | **Weighted-average strike price of rights        outstanding as of Dec. 31, 2012******(euro) |
|--------|--------|------------------------------------------------------------|--------|----------------------------------------------------------------------------------------------|
|   |   |                                                            |   |                                                                                              |

| Stock option plan 2005        |   | 3,281,500     |   | 22.514 |
|-------------------------------|--------|---------------|--------|--------|
| Stock        option plan 2007 |   | 1,707,720     |   | 27.451 |
| Stock option plan 2008        |   | 3,270,300     |   | 22.540 |
|                          |   | **8,259,520** |   |   |
|                          |   |               |   |        |

At December 31, 2012, the residual life of the stock optionplans were 7 months for the 2005 plan, 7 months for the 2007 planand 1 year and 7 months for the 2008 plan.

The scheme evolution is provided below:

|   |   | **2010** |   | **2011** |   | **2012** |
|--------|--------|----------|--------|----------|--------|----------|
|   |   |          |   |          |   |          |

|   |   | **Number         of shares** | ** ** | **Average strike        price**(euro) |   | **Market price**(a)        (euro) |   | **Number         of shares** | ** ** | **Average strike        price**(euro) |   | **Market price**(a) (euro) |   | **Number         of shares** | ** ** | **Average strike        price**(euro) |   | **Market price**(a)        (euro) |
|--------|--------|------------------------------|------------|---------------------------------------|--------|-----------------------------------|--------|------------------------------|------------|---------------------------------------|--------|----------------------------|--------|------------------------------|------------|---------------------------------------|--------|-----------------------------------|
|   |   |                              |       |                                       |   |                                   |   |                              |       |                                       |   |                            |   |                              |       |                                       |   |                                   |

| **Rights outstanding as of January 1**          |   | **19,482,330** |   |   | **23.576** |   | **17.811** |   | **15,737,120** |   |   | **23.005** |   | **16.398** |   | **11,873,205** |   |   | **23.101** |   | **15.941** |
|-------------------------------------------------|--------|----------------|--------|--------|------------|--------|------------|--------|----------------|--------|--------|------------|--------|------------|--------|----------------|--------|--------|------------|--------|------------|
| Rights        exercised in the period           |   | (88,500        | )      |   | 14.941     |   | 16.048     |   | (208,900       | )      |   | 14.333     |   | 16.623     |   | (93,000        | )      |   | 16.576     |   | 16.873     |
| Rights cancelled in the period                  |   | (3,656,710     | )      |   | 26.242     |   | 16.918     |   | (3,655,015     | )      |   | 23.187     |   | 17.474     |   | (3,520,685     | )      |   | 22.233     |   | 16.637     |
| **Rights        outstanding as of December 31** |   | **15,737,120** |   |   | **23.005** |   | **16.398** |   | **11,873,205** |   |   | **23.101** |   | **15.941** |   | **8,259,520**  |   |   | **23.545** |   | **18.457** |
| **of which exercisable as of December 31**      |   | **8,896,125**  |   |   | **23.362** |   | **16.398** |   | **11,863,335** |   |   | **23.101** |   | **15.941** |   | **8,243,205**  |   |   | **23.544** |   | **18.457** |
|                                            |   |                |        |   |            |   |            |   |                |        |   |            |   |            |   |                |        |   |            |   |            |

|    |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |
|--------------|--------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| (a)          |    | Market price        relating to new rights granted, rights exercised in the        period and rights cancelled in the period corresponds to        the average market value (arithmetic average of official        prices recorded on Mercato Telematico Azionario in the        month preceding: (i) the date of the Board of Directors        resolution regarding the stock option assignment; (ii)        the date on which the emission/transfer of the shares        granted were recorded in the grantee’s securities        account; and (iii) the date of the unilateral termination        of employment for rights cancelled), weighted with the        number of shares. Market price of stock at the beginning        and end of the year is the price recorded at December 31. |

The fair value of stock options granted during the year 2005was euro 3.33 per share. For 2007 and 2008 the average fair valueweighted with the number of options granted was euro 2.98 andeuro 2.60 per share, respectively.

The fair value was determined by applying the followingassumptions:

|   |   | **2005** |   | **2007** |   | **2008** |
|--------|--------|----------|--------|----------|--------|----------|
|   |   |          |   |          |   |          |

| Risk-free interest rate   | (%)     |   | 2.5  |   | 4.7  |   | 4.9  |
|---------------------------|---------|--------|------|--------|------|--------|------|
| Expected        life      | (years) |   | 8    |   | 6    |   | 6    |
| Expected volatility       | (%)     |   | 21.0 |   | 16.3 |   | 19.2 |
| Expected        dividends | (%)     |   | 4.0  |   | 4.9  |   | 6.1  |
|                      |    |   |      |   |      |   |      |

Costs of the year related to stock option plans amounted toeuro 12 million and euro 3 million in 2010 and 2011,respectively, and no costs in 2012.

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**Compensation of key management personnel**Compensation of personnel holding key positions in planning,directing and controlling the Eni Group subsidiaries, includingexecutive and non-executive officers, general managers andmanagers with strategic responsibilities in office at end of eachyear amounted (including contributions and ancillary costs) toeuro 33 million, euro 34 million and euro 33 million for 2010,2011 and 2012, respectively, and consisted of the following:

| (euro million) |   | **2010** |   | **2011** |   | **2012** |
|----------------|--------|----------|--------|----------|--------|----------|
|           |   |          |   |          |   |          |

| Wages and salaries                                |   | 20     |   | 21     |   | 21     |
|---------------------------------------------------|--------|--------|--------|--------|--------|--------|
| Post-employment        benefits                   |   | 1      |   | 1      |   | 1      |
| Other long-term benefits                          |   | 10     |   | 10     |   | 11     |
| Indemnities        upon termination of employment |   |   |   | 2      |   |   |
| Stock options                                     |   | 2      |   |   |   |   |
|                                              |   | **33** |   | **34** |   | **33** |
|                                              |   |        |   |        |   |        |

**Compensation of Directors and Statutory Auditors**Compensation of Directors amounted to euro 9.7 million, euro 8.4million and euro 13.2 million for 2010, 2011 and 2012,respectively. Compensation of Statutory Auditors amounted to euro0.511 million, euro 0.513 million and euro 0.467 million in 2010,2011 and 2012, respectively.

Compensations included emoluments and social security benefitsdue for the office as director or statutory auditor held at theparent company Eni SpA or other Group subsidiaries, which wasrecognized as cost to the Group, even if not subjected topersonal income tax.

 

**Other operating income (loss)**

| (euro million) |   | **2010** |   | **2011** |   | **2012** |
|----------------|--------|----------|--------|----------|--------|----------|
|           |   |          |   |          |   |          |

| Net gains (losses) on non-hedging and trading        derivatives |   | 118     |   |   | 188     |   |   | (153     | )     |
|------------------------------------------------------------------|--------|---------|--------|--------|---------|--------|--------|----------|-------|
| Net gains        (losses) on fair value hedging derivatives      |   |    |   |   |    |   |   | (4       | )     |
| Net gains (losses) on cash flow hedging        derivatives       |   | 13      |   |   | (17     | )      |   | (1       | )     |
|                                                             |   | **131** |   |   | **171** |   |   | **(158** | **)** |
|                                                             |   |         |        |   |         |        |   |          |       |

Net losses on trading and non-hedging derivatives related to:(i) gains and losses on fair value measurement and settlement ofcommodity derivatives entered into by the Gas & Power segmentto optimize commercial margins and by Eni Trading & ShippingSpA for trading activities (net loss of euro 13 million); (ii)gains and losses on fair value measurement and settlement ofcommodity derivatives which could not be elected for hedgeaccounting under IFRS because they related to net exposure tocommodity risk (net loss of euro 141 million); and (iii) fairvalue evaluation at certain derivatives embedded in the pricingformulas of long-term gas supply contracts in the Exploration& Production segment (net gain of euro 1 million).

Net losses on fair value hedging derivatives related tohedging operations entered into during the 2012 for the pricingof future oil purchase and sale contracts.

Net losses on cash flow hedging derivatives related to theineffective portion of the hedging relationship which wasrecognized through profit and loss in the Gas & Powersegment.

Operating costs are disclosed in note 42 – Transactionswith related parties.

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**Depreciation, depletion, amortization and impairments**

| (euro million) |   | **2010** |   | **2011** |   | **2012** |
|----------------|--------|----------|--------|----------|--------|----------|
|           |   |          |   |          |   |          |

| Depreciation, depletion and amortization:                                                            |   |      |   |   |      |   |   |       |   |
|------------------------------------------------------------------------------------------------------|--------|-----------|--------|--------|-----------|--------|--------|------------|--------|
| - tangible        assets                                                                             |   | 6,775     |   |   | 6,178     |   |   | 7,335      |   |
| - intangible assets                                                                                  |   | 1,572     |   |   | 1,582     |   |   | 2,208      |   |
|                                                                                                 |   | **8,347** |   |   | **7,760** |   |   | **9,543**  |   |
| Impairments:                                                                                         |   |      |   |   |      |   |   |       |   |
| - tangible        assets                                                                             |   | 257       |   |   | 891       |   |   | 1,609      |   |
| - intangible assets                                                                                  |   | 431       |   |   | 154       |   |   | 2,417      |   |
|                                                                                                 |   | **688**   |   |   | **1,045** |   |   | **4,026**  |   |
| less:                                                                                                |   |      |   |   |      |   |   |       |   |
| - reversal        of impairments - tangible assets                                                   |   |      |   |   | (15       | )      |   | (3         | )      |
| - capitalized direct costs associated with        self-constructed assets - tangible assets          |   | (2        | )      |   | (3        | )      |   | (1         | )      |
| -        capitalized direct costs associated with self-constructed        assets - intangible assets |   | (2        | )      |   | (2        | )      |   | (4         | )      |
|                                                                                                 |   | **9,031** |   |   | **8,785** |   |   | **13,561** |   |
|                                                                                                 |   |           |        |   |           |        |   |            |        |

Depreciation, depletion, amortization and impairments byindustry segment are disclosed in note 41 – Information byindustry segment and geographic financial information.

******37 Finance income (expense)**

| (euro million) |   | **2010** |   | **2011** |   | **2012** |
|----------------|--------|----------|--------|----------|--------|----------|
|           |   |          |   |          |   |          |

| **Finance income (expense)**                    |   |     |   |   |       |   |   |       |   |
|-------------------------------------------------|--------|----------|--------|--------|------------|--------|--------|------------|--------|
| Finance        income                           |   | 6,109    |   |   | 6,376      |   |   | 7,218      |   |
| Finance expense                                 |   | (6,727   | )      |   | (7,410     | )      |   | (8,274     | )      |
|                                            |   | **(618** | **)**  |   | **(1,034** | **)**  |   | **(1,056** | **)**  |
| Gain (loss) on derivative financial instruments |   | (131     | )      |   | (112       | )      |   | (251       | )      |
|                                            |   | **(749** | **)**  |   | **(1,146** | **)**  |   | **(1,307** | **)**  |
|                                            |   |          |        |   |            |        |   |            |        |

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The break-down by lenders or type of net financegains or losses is provided below:

| (euro million) |   | **2010** |   | **2011** |   | **2012** |
|----------------|--------|----------|--------|----------|--------|----------|
|           |   |          |   |          |   |          |

| **Finance income (expense) related to net        borrowings**                                                   |   |     |   |   |       |   |   |       |   |
|-----------------------------------------------------------------------------------------------------------------|--------|----------|--------|--------|------------|--------|--------|------------|--------|
| Interest        and other finance expense on ordinary bonds                                                     |   | (551     | )      |   | (610       | )      |   | (729       | )      |
| Interest due to banks and other financial        institutions                                                   |   | (214     | )      |   | (312       | )      |   | (251       | )      |
| Interest        from banks                                                                                      |   | 17       |   |   | 22         |   |   | 27         |   |
| Interest and other income on financing        receivables and securities held for non-operating        purposes |   | 18       |   |   | 19         |   |   | 24         |   |
|                                                                                                            |   | **(730** | **)**  |   | **(881**   | **)**  |   | **(929**   | **)**  |
| **Exchange differences**                                                                                        |   |     |   |   |       |   |   |       |   |
| Positive        exchange differences                                                                            |   | 5,897    |   |   | 6,191      |   |   | 7,010      |   |
| Negative exchange differences                                                                                   |   | (5,805   | )      |   | (6,302     | )      |   | (6,879     | )      |
|                                                                                                            |   | **92**   |   |   | **(111**   | **)**  |   | **131**    |   |
| **Other finance income (expense)**                                                                              |   |     |   |   |       |   |   |       |   |
| Capitalized        finance expense                                                                              |   | 150      |   |   | 112        |   |   | 150        |   |
| Interest and other income on financing        receivables and securities held for operating purposes            |   | 73       |   |   | 75         |   |   | 69         |   |
| Finance        expense due to passage of time (accretion discount)        (a)                                   |   | (236     | )      |   | (235       | )      |   | (308       | )      |
| Other finance income (expense), net                                                                             |   | 33       |   |   | 6          |   |   | (169       | )      |
|                                                                                                            |   | **20**   |   |   | **(42**    | **)**  |   | **(258**   | **)**  |
|                                                                                                            |   | **(618** | **)**  |   | **(1,034** | **)**  |   | **(1,056** | **)**  |
|                                                                                                            |   |          |        |   |            |        |   |            |        |

|    |    |                                                                                                                                         |
|--------------|--------------|---------------------------------------------------------------------------------------------------------------------------------------------------|
| (a)          |    | The item        related to the increase in provisions for contingencies        that are shown at present value in non-current        liabilities. |

Derivative financial instruments consisted of thefollowing:

| (euro million) |   | **2010** |   | **2011** |   | **2012** |
|----------------|--------|----------|--------|----------|--------|----------|
|           |   |          |   |          |   |          |

| Derivatives on exchange rate        |   | (111     | )      |   | 29       |   |   | (137     | )     |
|-------------------------------------|--------|----------|--------|--------|----------|--------|--------|----------|-------|
| Derivatives        on interest rate |   | (39      | )      |   | (141     | )      |   | (88      | )     |
| Options                             |   | 19       |   |   |     |   |   | (26      | )     |
|                                |   | **(131** | **)**  |   | **(112** | **)**  |   | **(251** | **)** |
|                                |   |          |        |   |          |        |   |          |       |

Net losses from derivatives of euro 251 million (a net loss ofeuro 131 million and euro 112 million in 2010 and 2011,respectively) were recognized in connection with fair valuevaluation of certain derivatives which lacked the formal criteriato be treated in accordance with hedge accounting under IFRS asthey were entered into for amounts equal to the net exposure toexchange rate risk and interest rate risk, and as such, theycannot be referred to specific trade or financing transactions.Exchange rate derivatives were entered into in order to manageexposures to foreign currency exchange rates arising from thepricing formulas of commodities in the Gas & Power segment.The lack of formal requirements to qualify these derivatives ashedges under IFRS also entailed the recognition in profit or lossof currency translation differences on assets and liabilitiesdenominated in currencies other than functional currency, as thiseffect cannot be offset by changes in the fair value of therelated instruments. Loss on options of euro 26 million relatedto the measurement at fair value of the options embedded in thebonds convertible into ordinary shares of Galp Energia SGPS SA(more information is provided in note 26 – Long-term debtand current maturities of long-term debt).

More information is provided in note 42 – Transactionswith related parties.

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**38 Income (expense) from investments**

**Share of profit (loss) of equity-accounted investments**

| (euro million) |   | **2010** |   | **2011** |   | **2012** |
|----------------|--------|----------|--------|----------|--------|----------|
|           |   |          |   |          |   |          |

| Share of profit of equity-accounted investments                         |   | 673     |   |   | 634     |   |   | 526     |   |
|-------------------------------------------------------------------------|--------|---------|--------|--------|---------|--------|--------|---------|--------|
| Share of        loss of equity-accounted investments                    |   | (149    | )      |   | (106    | )      |   | (233    | )      |
| Decreases (increases) in the provision for        losses on investments |   | (31     | )      |   | (28     | )      |   | (15     | )      |
|                                                                    |   | **493** |   |   | **500** |   |   | **278** |   |
|                                                                    |   |         |        |   |         |        |   |         |        |

More information is provided in note 17 –Equity-accounted investments.

Share of profit (loss) of equity-accounted investments byindustry segment is disclosed in note 41 – Information byindustry segment and geographic financial information.

 

**Other gain (loss) from investments**

| (euro million) |   | **2010** |   | **2011** |   | **2012** |
|----------------|--------|----------|--------|----------|--------|----------|
|           |   |          |   |          |   |          |

| Dividends                      |   | 264     |   |   | 659       |   |   | 431       |   |
|--------------------------------|--------|---------|--------|--------|-----------|--------|--------|-----------|--------|
| Gains on        disposals, net |   | 332     |   |   | 1,121     |   |   | 349       |   |
| Other income (expense), net    |   | 23      |   |   | (157      | )      |   | 1,823     |   |
|                           |   | **619** |   |   | **1,623** |   |   | **2,603** |   |
|                           |   |         |        |   |           |        |   |           |        |

Dividend income for euro 431 million primarily related to theNigeria LNG Ltd (euro 331 million).

Net gains on disposals for 2012 amounted to euro 349 millionand related for euro 311 million to Galp Energia SGPS SA as Enidivested 5% of the share capital of the investee to AmorimEnergia BV and a further 4% through an accelerated book-buildingprocedure to institutional investors. Net gains on disposals for2011 amounted to euro 1,121 million and pertained to thedivestment of the 100% interest in Eni Gas TransportInternational SA (euro 647 million), the 89% interest (entirestake own) in Trans Austria Gasleitung GmbH (euro 338 million),the 100% interest in Gas Brasiliano Distribuidora SA (euro 50million) and the 46% interest (entire stake own) in Transitgas AG(euro 34 million). Gains on disposals for 2010 of euro 332million essentially pertained to the divestment of the 100%interest in Società Padana Energia SpA (euro 169 million), the25% stake in GreenStream BV (euro 93 million) and the 100%interest in Distri RE SA (euro 47 million).

In 2012, other net income of euro 1,823 million included: (i)an extraordinary income of euro 835 million recognized inconnection with a capital increase made by Galp’s subsidiaryPetrogal whereby a new shareholder subscribed its share bycontributing a cash amount fairly in excess of the net book valueof the interest acquired; (ii) a revaluation gain of euro865 million of the interest in Galp Energia SGPS SA (28.34%)measured at fair value at the price current at the date when Eniceased to retain a significant influence over the investee and again on the re-measurement at market fair value at the balancesheet date of euro 65 million of part of residual interest inGalp Energia SGPS SA (8%) which was underlying a convertible bondbased on the fair value option provided by IAS 39; and (iii)the re-measurement at market fair value at the balance sheet dateof 288.7 million shares of Snam SpA underlying a convertible bondissued on January 15, 2013 for which was applied the fair valueoption (income for euro 6 million). In 2011, other net expense ofeuro 157 million included the full write down of the book valueof the Ceska Rafinerska AS due to management’s expectationsof incurring future losses driven by a negative outlook in therefining segment (euro 157 million).

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**39 Income taxes**

| (euro million) |   | **2010** |   | **2011** |   | **2012** |
|----------------|--------|----------|--------|----------|--------|----------|
|           |   |          |   |          |   |          |

| Current taxes:                                                            |   |      |   |   |      |   |   |       |   |
|---------------------------------------------------------------------------|--------|-----------|--------|--------|-----------|--------|--------|------------|--------|
| - Italian        subsidiaries                                             |   | 696       |   |   | 620       |   |   | 755        |   |
| - foreign subsidiaries of the Exploration &        Production segment |   | 7,893     |   |   | 8,286     |   |   | 10,214     |   |
| - foreign        subsidiaries                                             |   | 521       |   |   | 635       |   |   | 455        |   |
|                                                                      |   | **9,110** |   |   | **9,541** |   |   | **11,424** |   |
| Net        deferred taxes:                                                |   |      |   |   |      |   |   |       |   |
| - Italian subsidiaries                                                    |   | (431      | )      |   | (418      | )      |   | 376        |   |
| - foreign        subsidiaries of the Exploration & Production segment |   | (97       | )      |   | 936       |   |   | 127        |   |
| - foreign subsidiaries                                                    |   | (1        | )      |   | (156      | )      |   | (268       | )      |
|                                                                      |   | **(529**  | **)**  |   | **362**   |   |   | **235**    |   |
|                                                                      |   | **8,581** |   |   | **9,903** |   |   | **11,659** |   |
|                                                                      |   |           |        |   |           |        |   |            |        |

Income taxes currently payable by Italian subsidiariesamounted to euro 755 million and were in respect of the Italiancorporate taxation (Ires for euro 525 million and Irap for euro142 million) and foreign taxes on the share of profit earnedoutside Italy for euro 88 million.

The effective tax rate was 70.2% (54.2% and 55.7% in 2010 and2011, respectively) compared with a statutory tax rate of 43.9%(39.6% and 43.1% in 2010 and 2011, respectively). This wascalculated by applying the Italian statutory tax rate oncorporate profit of 38.0%19 and a 3.9% corporate taxrate applicable to the net value of production as provided for byItalian laws.

The difference between the statutory and effective tax ratewas due to the following factors:

| (%)    |   | **2010** |   | **2011** |   | **2012** |
|--------|--------|----------|--------|----------|--------|----------|
|   |   |          |   |          |   |          |

| **Statutory tax rate**                                                                           |   | **39.6** |   |   | **43.1** |   |   | **43.9** |   |
|--------------------------------------------------------------------------------------------------|--------|----------|--------|--------|----------|--------|--------|----------|--------|
| Items        increasing (decreasing) statutory tax rate:                                         |   |     |   |   |     |   |   |     |   |
| - higher foreign subsidiaries tax rate                                                           |   | 15.6     |   |   | 12.7     |   |   | 16.9     |   |
| - impact        pursuant to the write down of deferred tax assets of        Italian subsidiaries |   |     |   |   |     |   |   | 7.7      |   |
| - impact pursuant to the Italian Windfall        Corporate tax as per Law No. 7/2009             |   | 1.5      |   |   | 1.0      |   |   | 1.5      |   |
| -        permanent differences and other adjustments                                             |   | (2.5     | )      |   | (1.1     | )      |   | 0.2      |   |
|                                                                                             |   | **14.6** |   |   | **12.6** |   |   | **26.3** |   |
|                                                                                             |   | **54.2** |   |   | **55.7** |   |   | **70.2** |   |
|                                                                                             |   |          |        |   |          |        |   |          |        |

The increased tax rate at foreign subsidiaries primarilyrelated to 17.8 percentage points increase in the Exploration& Production segment (16.8 and 17.2 percentage points in2010 and 2011, respectively).

A write down of deferred tax assets impacted the Group taxrate by 7.7 percentage points and was recorded by the parentcompany Eni SpA and other Italian subsidiaries which were part ofthe consolidated accounts for Italian tax purposes. Such writedown reflected a lower likelihood that those deferred tax assetscan be recovered in future periods due to an expected reductionin taxable income generated in Italy, and as Eni has lost theavailability of Snam taxable profit against which Italian taxassets can be utilized following the deconsolidation of Snam.

In 2012, the increase in permanent differences and otheradjustments of 0.2 percentage points comprised an effect of 3.3percentage points due to a non-deductible impairment of thegoodwill allocated to the European gas market CGU and a negativeeffect of 4.5 percentage points due to non-taxable gains on thesale and revaluation relating to the transactions at Galp EnergiaSGPS SA. In 2011, the decrease for permanent differences andother adjustments of 1.1 percentage points were due to anon-deductible provision accrued to reflect the expected lossderiving from an antitrust proceeding in the European sector ofrubbers (0.2 percentage points). In 2010, the 

----

| (19) |    | Includes a        5.5% supplemental tax rate on taxable profit of energy        companies in Italy (whose primary activity is the        production and marketing of hydrocarbons and electricity        and with annual revenues in excess of euro 25 million)        effective from January 1, 2008 and further increases of        1% effective from January 1, 2009, pursuant to the Law        Decree No. 112/2008 (converted into Law No. 133/2008) and        4% effective from January 1, 2011, pursuant the Law        Decree No. 138/2011 (converted into Law No. 148/2011)        which enlarged the scope of application to include        renewable energy companies and gas transport and        distribution companies. |
|------|--------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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decrease for permanent differences and other adjustments of2.5 percentage points was due to a gain which was excluded fromtaxable profit relating a favorable outcome of an antitrustproceeding of 0.7 percentage points.

Income tax expense related to discontinued operations,included in the item "Net profit (loss)" of the profitand loss account, consisted of the following: 

| (euro million) |   | **2010** |   | **2011** |   | **2012** |
|----------------|--------|----------|--------|----------|--------|----------|
|           |   |          |   |          |   |          |

| Current taxes:                |   |    |   |   |    |   |   |    |   |
|-------------------------------|--------|---------|--------|--------|---------|--------|--------|---------|--------|
| - Italian        subsidiaries |   | 619     |   |   | 788     |   |   | 489     |   |
|                          |   | **619** |   |   | **788** |   |   | **489** |   |
| Net        deferred taxes:    |   |    |   |   |    |   |   |    |   |
| - Italian subsidiaries        |   | (43     | )      |   | (17     | )      |   | 124     |   |
|                          |   | **(43** | **)**  |   | **(17** | **)**  |   | **124** |   |
|                          |   | **576** |   |   | **771** |   |   | **613** |   |
|                          |   |         |        |   |         |        |   |         |        |

Discontinued operations are disclosed in note 31 –Discontinued operations, assets held for sale and liabilitiesdirectly associated with assets held for sale.

**40 Earnings per share**

Basic earnings per ordinary share are calculated by dividingnet profit for the period attributable to Eni’s shareholdersby the weighted average number of ordinary shares issued andoutstanding during the period, excluding treasury shares.

The average number of ordinary shares used for the calculationof the basic earnings per share outstanding at December 31, 2010,2011 and 2012, was 3,622,454,738, 3,622,616,182 and3,622,764,007, respectively.

Diluted earnings per share are calculated by dividing netprofit for the period attributable to Eni’s shareholders bythe weighted average number of shares fully-diluted includingshares outstanding in the year including the number of potentialshares outstanding in connection with stock-based compensationplans.

At December 31, 2010, 2011 and 2012 the number of potentialshares outstanding related to stock options plans. The averagenumber of fully-diluted shares used in the calculation of dilutedearnings was 3,622,469,713, 3,622,616,182 and 3,622,764,007 forthe years ending December 31, 2010, 2011 and 2012, respectively.

Reconciliation of the average number of shares used for thecalculation for both basic and diluted earning per share was asfollows:

|   |   | **2010** |   | **2011** |   | **2012** |
|--------|--------|----------|--------|----------|--------|----------|
|   |   |          |   |          |   |          |

| **Average number of shares used for the        calculation of the basic earnings per share**   |   |             |   | **3,622,454,738** |   | **3,622,616,182** |   |   | **3,622,764,007** |
|------------------------------------------------------------------------------------------------|--------|------------------|--------|-------------------|--------|-------------------|--------|--------|-------------------|
| Number of        potential shares following stock options plans                                |   |             |   | 14,975            |   |              |   |   |              |
| **Average number of shares used for the        calculation of the diluted earnings per share** |   |             |   | **3,622,469,713** |   | **3,622,616,182** |   |   | **3,622,764,007** |
| **Eni’s        net profit**                                                               |   | (euro million)   |   | **6,318**         |   | **6,860**         |   |   | **7,788**         |
| Basic earning per share                                                                        |   | (euro per share) |   | 1.74              |   | 1.89              |   |   | 2.15              |
| Diluted        earning per share                                                               |   | (euro per share) |   | 1.74              |   | 1.89              |   |   | 2.15              |
| **Eni’s net profit - Continuing operations**                                              |   | (euro million)   |   | **6,252**         |   | **6,902**         |   |   | **4,198**         |
| Basic        earning per share                                                                 |   | (euro per share) |   | 1.72              |   | 1.90              |   |   | 1.16              |
| Diluted earning per share                                                                      |   | (euro per share) |   | 1.72              |   | 1.90              |   |   | 1.16              |
| **Eni’s        net profit - Discontinued operations**                                     |   | (euro million)   |   | **66**            |   | **(42**           | **)**  |   | **3,590**         |
| Basic earning per share                                                                        |   | (euro per share) |   | 0.02              |   | (0.01             | )      |   | 0.99              |
| Diluted        earning per share                                                               |   | (euro per share) |   | 0.02              |   | (0.01             | )      |   | 0.99              |
|                                                                                           |   |             |   |                   |   |                   |        |   |                   |

 

 

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**41 Information by industry segment andgeographic financial information**

**Information by industry segment**

|   |   | **Other activities**        (d) |   | **Discontinued operation****s**        (d) |   |   |
|--------|--------|---------------------------------|--------|--------------------------------------------|--------|--------|
|   |   |                                 |   |                                            |   |   |

| (euro        million) |   | **Exploration        & Production** |   | **Gas        & Power****(d)** |   | **Refining                & Marketing** |   | **Chemicals** |   | **Engineering                & Construction** |   | **Corporate        and financial companies** |   | **Snam** |   | **Others** |   | **Intragroup        profits** |   | **Total** |   | **Snam** |   | **Intragroup        eliminations** |   | **Continuing        operations** |
|-----------------------|--------|-----------------------------------------|--------|-----------------------------------|--------|---------------------------------------------|--------|---------------|--------|---------------------------------------------------|--------|----------------------------------------------|--------|----------|--------|------------|--------|-------------------------------|--------|-----------|--------|----------|--------|------------------------------------|--------|----------------------------------|
|                  |   |                                         |   |                                   |   |                                             |   |               |   |                                                   |   |                                              |   |          |   |            |   |                               |   |           |   |          |   |                                    |   |                                  |

| **2010**                                                      |   |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |    |   |   |   |   |   |   |   |   |    |   |
|---------------------------------------------------------------|--------|---------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|---------|--------|--------|--------|--------|--------|--------|--------|--------|---------|--------|
| Net sales from operations (a)                                 |   | 29,497  |   |   | 27,806 |   |   | 43,190 |   |   | 6,141  |   |   | 10,581 |   |   | 1,386  |   |   | 3,526  |   |   | 105    |   |   | 100    |   |   |    |   |   |   |   |   |   |   |   |    |   |
| Less:        intersegment sales                               |   | (16,550 | )      |   | (969   | )      |   | (1,345 | )      |   | (243   | )      |   | (1,802 | )      |   | (1,255 | )      |   | (1,620 | )      |   | (25    | )      |   |   |   |   |    |   |   |   |   |   |   |   |   |    |   |
| Net sales to customers                                        |   | 12,947  |   |   | 26,837 |   |   | 41,845 |   |   | 5,898  |   |   | 8,779  |   |   | 131    |   |   | 1,906  |   |   | 80     |   |   | 100    |   |   | 98,523  |   |   | (1,906 | )      |   |   |   |   | 96,617  |   |
| Operating        profit                                       |   | 13,866  |   |   | 896    |   |   | 149    |   |   | (86    | )      |   | 1,302  |   |   | (361   | )      |   | 2,000  |   |   | (1,384 | )      |   | (271   | )      |   | 16,111  |   |   | (2,000 | )      |   | 1,371  |   |   | 15,482  |   |
| Net provisions for contingencies                              |   | 33      |   |   | (64    | )      |   | 199    |   |   | 2      |   |   | 35     |   |   | 50     |   |   | 6      |   |   | 1,146  |   |   |   |   |   | 1,407   |   |   | (6     | )      |   |   |   |   | 1,401   |   |
| Depreciation,        depletion, amortization and impairments  |   | 7,051   |   |   | 851    |   |   | 409    |   |   | 135    |   |   | 516    |   |   | 79     |   |   | 548    |   |   | 10     |   |   | (20    | )      |   | 9,579   |   |   | (548   | )      |   |   |   |   | 9,031   |   |
| Share of profit (loss) of equity-accounted        investments |   | 92      |   |   | 344    |   |   | 68     |   |   | 1      |   |   |   |   |   | (10    | )      |   | 44     |   |   | (2     | )      |   |   |   |   | 537     |   |   | (44    | )      |   |   |   |   | 493     |   |
| Identifiable        assets (b)                                |   | 49,573  |   |   | 18,300 |   |   | 14,356 |   |   | 3,076  |   |   | 12,715 |   |   | 754    |   |   | 16,643 |   |   | 362    |   |   | (917   | )      |   | 114,862 |   |   |   |   |   |   |   |   |    |   |
| Unallocated assets                                            |   |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   | 16,998  |   |   |   |   |   |   |   |   |    |   |
| Equity-accounted        investments                           |   | 1,974   |   |   | 1,988  |   |   | 1,058  |   |   | 30     |   |   | 174    |   |   | 8      |   |   | 382    |   |   | 54     |   |   |   |   |   | 5,668   |   |   |   |   |   |   |   |   |    |   |
| Identifiable liabilities (c)                                  |   | 12,330  |   |   | 7,593  |   |   | 6,197  |   |   | 874    |   |   | 5,760  |   |   | 1,307  |   |   | 2,455  |   |   | 2,898  |   |   | (101   | )      |   | 39,313  |   |   |   |   |   |   |   |   |    |   |
| Unallocated        liabilities                                |   |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   | 36,819  |   |   |   |   |   |   |   |   |    |   |
| Capital expenditures                                          |   | 9,690   |   |   | 265    |   |   | 711    |   |   | 251    |   |   | 1,552  |   |   | 109    |   |   | 1,420  |   |   | 22     |   |   | (150   | )      |   | 13,870  |   |   |   |   |   |   |   |   |    |   |
| **2011**                                                      |   |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |    |   |   |   |   |   |   |   |   |    |   |
| Net sales from operations (a)                                 |   | 29,121  |   |   | 33,093 |   |   | 51,219 |   |   | 6,491  |   |   | 11,834 |   |   | 1,365  |   |   | 3,591  |   |   | 85     |   |   | (54    | )      |   |    |   |   |   |   |   |   |   |   |    |   |
| Less:        intersegment sales                               |   | (18,444 | )      |   | (1,344 | )      |   | (2,791 | )      |   | (289   | )      |   | (1,324 | )      |   | (1,249 | )      |   | (1,692 | )      |   | (23    | )      |   |   |   |   |    |   |   |   |   |   |   |   |   |    |   |
| Net sales to customers                                        |   | 10,677  |   |   | 31,749 |   |   | 48,428 |   |   | 6,202  |   |   | 10,510 |   |   | 116    |   |   | 1,899  |   |   | 62     |   |   | (54    | )      |   | 109,589 |   |   | (1,899 | )      |   |   |   |   | 107,690 |   |
| Operating        profit                                       |   | 15,887  |   |   | (326   | )      |   | (273   | )      |   | (424   | )      |   | 1,422  |   |   | (319   | )      |   | 2,084  |   |   | (427   | )      |   | (189   | )      |   | 17,435  |   |   | (2,084 | )      |   | 1,452  |   |   | 16,803  |   |
| Net provisions for contingencies                              |   | 53      |   |   | 113    |   |   | 57     |   |   | 11     |   |   | 79     |   |   | 13     |   |   | 24     |   |   | 201    |   |   |   |   |   | 551     |   |   | (24    | )      |   |   |   |   | 527     |   |
| Depreciation,        depletion, amortization and impairments  |   | 6,440   |   |   | 567    |   |   | 839    |   |   | 250    |   |   | 631    |   |   | 75     |   |   | 533    |   |   | 6      |   |   | (23    | )      |   | 9,318   |   |   | (533   | )      |   |   |   |   | 8,785   |   |
| Share of profit (loss) of equity-accounted        investments |   | 119     |   |   | 232    |   |   | 100    |   |   |   |   |   | 95     |   |   | (1     | )      |   | 44     |   |   | (45    | )      |   |   |   |   | 544     |   |   | (44    | )      |   |   |   |   | 500     |   |
| Identifiable        assets (b)                                |   | 56,139  |   |   | 18,708 |   |   | 15,031 |   |   | 3,066  |   |   | 13,521 |   |   | 810    |   |   | 17,649 |   |   | 378    |   |   | (1,060 | )      |   | 124,242 |   |   |   |   |   |   |   |   |    |   |
| Unallocated assets                                            |   |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   | 18,703  |   |   |   |   |   |   |   |   |    |   |
| Equity-accounted        investments                           |   | 2,317   |   |   | 1,990  |   |   | 890    |   |   | 38     |   |   | 179    |   |   | 7      |   |   | 385    |   |   | 37     |   |   |   |   |   | 5,843   |   |   |   |   |   |   |   |   |    |   |
| Identifiable liabilities (c)                                  |   | 13,844  |   |   | 8,428  |   |   | 5,972  |   |   | 761    |   |   | 5,437  |   |   | 1,095  |   |   | 2,465  |   |   | 3,020  |   |   | (54    | )      |   | 40,968  |   |   |   |   |   |   |   |   |    |   |
| Unallocated        liabilities                                |   |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   | 41,584  |   |   |   |   |   |   |   |   |    |   |
| Capital expenditures                                          |   | 9,435   |   |   | 192    |   |   | 866    |   |   | 216    |   |   | 1,090  |   |   | 128    |   |   | 1,529  |   |   | 10     |   |   | (28    | )      |   | 13,438  |   |   |   |   |   |   |   |   |    |   |
| **2012**                                                      |   |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |    |   |   |   |   |   |   |   |   |    |   |
| Net sales from operations (a)                                 |   | 35,881  |   |   | 36,200 |   |   | 62,656 |   |   | 6,418  |   |   | 12,771 |   |   | 1,369  |   |   | 2,646  |   |   | 119    |   |   | (75    | )      |   |    |   |   |   |   |   |   |   |   |    |   |
| Less:        intersegment sales                               |   | (20,322 | )      |   | (2,031 | )      |   | (2,966 | )      |   | (411   | )      |   | (1,107 | )      |   | (1,242 | )      |   | (1,274 | )      |   | (40    | )      |   |   |   |   |    |   |   |   |   |   |   |   |   |    |   |
| Net sales to customers                                        |   | 15,559  |   |   | 34,169 |   |   | 59,690 |   |   | 6,007  |   |   | 11,664 |   |   | 127    |   |   | 1,372  |   |   | 79     |   |   | (75    | )      |   | 128,592 |   |   | (1,372 | )      |   |   |   |   | 127,220 |   |
| Operating        profit                                       |   | 18,451  |   |   | (3,221 | )      |   | (1,303 | )      |   | (683   | )      |   | 1,433  |   |   | (345   | )      |   | 1,676  |   |   | (302   | )      |   | 208    |   |   | 15,914  |   |   | (1,676 | )      |   | 788    |   |   | 15,026  |   |
| Net provisions for contingencies                              |   | 41      |   |   | 471    |   |   | 93     |   |   | 22     |   |   | 36     |   |   | 140    |   |   | 72     |   |   | 68     |   |   |   |   |   | 943     |   |   | (72    | )      |   |   |   |   | 871     |   |
| Depreciation,        depletion, amortization and impairments  |   | 8,535   |   |   | 2,899  |   |   | 1,174  |   |   | 202    |   |   | 708    |   |   | 65     |   |   | 284    |   |   | 3      |   |   | (25    | )      |   | 13,845  |   |   | (284   | )      |   |   |   |   | 13,561  |   |
| Share of profit (loss) of equity-accounted        investments |   | 39      |   |   | 144    |   |   | 40     |   |   | 2      |   |   | 55     |   |   | (1     | )      |   | 38     |   |   | (1     | )      |   |   |   |   | 316     |   |   | (38    | )      |   |   |   |   | 278     |   |
| Identifiable        assets (b)                                |   | 59,128  |   |   | 19,736 |   |   | 14,818 |   |   | 3,151  |   |   | 14,430 |   |   | 966    |   |   |   |   |   | 474    |   |   | (776   | )      |   | 111,927 |   |   |   |   |   |   |   |   |    |   |
| Unallocated assets                                            |   |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   | 27,714  |   |   |   |   |   |   |   |   |    |   |
| Equity-accounted        investments                           |   | 2,162   |   |   | 1,550  |   |   | 274    |   |   | 50     |   |   | 187    |   |   | 6      |   |   |   |   |   | 36     |   |   |   |   |   | 4,265   |   |   |   |   |   |   |   |   |    |   |
| Identifiable liabilities (c)                                  |   | 15,921  |   |   | 10,195 |   |   | 6,203  |   |   | 733    |   |   | 5,169  |   |   | 1,161  |   |   |   |   |   | 2,946  |   |   | 21     |   |   | 42,349  |   |   |   |   |   |   |   |   |    |   |
| Unallocated        liabilities                                |   |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   | 34,579  |   |   |   |   |   |   |   |   |    |   |
| Capital expenditures                                          |   | 10,307  |   |   | 225    |   |   | 842    |   |   | 172    |   |   | 1,011  |   |   | 152    |   |   | 756    |   |   | 14     |   |   | 38     |   |   | 13,517  |   |   |   |   |   |   |   |   |    |   |
|                                                          |   |         |        |   |        |        |   |        |        |   |        |        |   |        |        |   |        |        |   |        |        |   |        |        |   |        |        |   |         |        |   |        |        |   |        |        |   |         |        |

|    |    |                                                                                                                                                                                             |
|--------------|--------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| (a)          |    | Before        elimination of intersegment sales.                                                                                                                                                      |
| (b)          |    | Includes        assets directly associated with the generation of        operating profit.                                                                                                            |
| (c)          |    | Includes        liabilities directly associated with the generation of        operating profit.                                                                                                       |
| (d)          |    | The results        of Snam has been reclassified from the "Gas &        Power" segment to the "Other activities"        segment and presented in the discontinued operations. |

Environmental provisions incurred by Eni SpA dueto intercompany guarantees on behalf of Syndial have beenreported within the segment reporting unit "Otheractivities".

Intersegment revenues are conducted on arm’slength basis.

F-105

----

##### Table of Contents

**Geographic financial information**

*Identifiable assets and investments by geographic area oforigin*

| (euro million) |   |   |   | **Italy** |   | **Other European Union** |   | **Rest of Europe** |   | **Americas** |   | **Asia** |   | **Africa** |   | **Other areas** |   | **Total** |
|----------------|--------|--------|--------|-----------|--------|--------------------------|--------|--------------------|--------|--------------|--------|----------|--------|------------|--------|-----------------|--------|-----------|
|           |   |   |   |           |   |                          |   |                    |   |              |   |          |   |            |   |                 |   |           |

| **2010**                       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |    |
|--------------------------------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|---------|
| Identifiable        assets (a) |   | 45,342 |   | 16,322 |   | 5,091  |   | 6,837  |   | 12,459 |   | 27,322 |   | 1,489  |   | 114,862 |
| Capital expenditures           |   | 3,044  |   | 1,710  |   | 724    |   | 1,156  |   | 1,941  |   | 5,083  |   | 212    |   | 13,870  |
| **2011**                       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |    |
| Identifiable assets (a)        |   | 47,908 |   | 16,196 |   | 6,763  |   | 7,465  |   | 14,077 |   | 29,942 |   | 1,891  |   | 124,242 |
| Capital        expenditures    |   | 3,587  |   | 1,337  |   | 1,174  |   | 978    |   | 1,608  |   | 4,369  |   | 385    |   | 13,438  |
| **2012**                       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |    |
| Identifiable        assets (a) |   | 31,406 |   | 15,013 |   | 10,479 |   | 7,167  |   | 14,828 |   | 31,224 |   | 1,810  |   | 111,927 |
| Capital expenditures           |   | 2,886  |   | 1,255  |   | 1,630  |   | 1,184  |   | 1,663  |   | 4,725  |   | 174    |   | 13,517  |
|                           |   |        |   |        |   |        |   |        |   |        |   |        |   |        |   |         |

|    |    |                                                                                  |
|--------------|--------------|--------------------------------------------------------------------------------------------|
| (a)          |    | Includes        assets directly associated with the generation of        operating profit. |

*Sales from operations by geographic area of destination*

| (euro million) |   | **2010** |   | **2011** |   | **2012** |
|----------------|--------|----------|--------|----------|--------|----------|
|           |   |          |   |          |   |          |

| Italy                       |   | 45,896     |   | 31,906      |   | 33,998      |
|-----------------------------|--------|------------|--------|-------------|--------|-------------|
| Other        European Union |   | 21,125     |   | 35,536      |   | 35,578      |
| Rest of Europe              |   | 4,172      |   | 7,537       |   | 9,940       |
| Americas                    |   | 6,282      |   | 9,612       |   | 15,282      |
| Asia                        |   | 5,785      |   | 10,258      |   | 16,394      |
| Africa                      |   | 13,068     |   | 11,333      |   | 14,681      |
| Other areas                 |   | 289        |   | 1,508       |   | 1,347       |
|                        |   | **96,617** |   | **107,690** |   | **127,220** |
|                        |   |            |   |             |   |             |

**42 Transactions with related parties**

In the course of 2012, Enifinalized a single transaction of major importance with relatedparties, as defined by Eni’s internal procedure and inapplication of the Consob Regulation No. 17221 of March 12, 2010,later modified by Decision No. 17389 of June 2010. Suchtransaction referred to the sale of 30% less one share of theoutstanding shares of Snam SpA to Cassa Depositi e Prestiti SpAformalized on October 15, 2012. Complete information about thetransaction is disclosed in the Information Statement, publishedon June 6, 2012 (and available at the Eni website eni.com) inapplication of the Consob Regulation No. 11971 of May 14, 1999and later additions and modifications. More information isdisclosed in note 17 – Investments.

| In the ordinary course of its business        Eni enters into transactions regarding: |
|---------------------------------------------------------------------------------------|

| (a) |   | exchanges of goods,        provision of services and financing with joint ventures,        associates and non-consolidated subsidiaries;                                                                                                                                                                                                                        |
|-----|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| (b) |   | exchanges of goods and        provision of services with entities controlled by the        Italian Government; and                                                                                                                                                                                                                                              |
| (c) |   | contributions to Enrico        Mattei Foundation established by Eni with the aim of        enhancing, through studies, research and training        initiatives, knowledge in the fields of economics, energy        and environment, both at the national and international        level. Transactions with Enrico Mattei Foundation were        not material. |

Transactions with related parties were conducted in theinterest of Eni companies and, with exception of those withentities with the aim to develop solidarity, culture and researchinitiatives, on an arm’s length basis.

**Related-party trade and other transactions**Trade and other transactions with joint ventures,associates and non-consolidated subsidiaries as well as withentities controlled by the Italian Government in the 2010, 2011and 2012, respectively, consisted of the following:

F-106

----

##### Table of Contents

| **2010**        (euro million) |   | **Dec. 31, 2010** |   | **2010** |
|--------------------------------|--------|-------------------|--------|----------|
|                           |   |                   |   |          |

|   | **Costs** |   | **Revenues** |   |   |
|--------|-----------|--------|--------------|--------|--------|
|   |           |   |              |   |   |

| **Name** | **  ** | **Receivables and other assets** | **  ** | **Payables and other liabilities** | **  ** | **Guarantees** | **  ** | **Goods** | **  ** | **Services** | **  ** | **Other** | **  ** | **Goods** | **  ** | **Services** | **  ** | **Other** | **  ** | **Other operating (expense) income** |
|----------|------------------|----------------------------------|------------------|------------------------------------|------------------|----------------|------------------|-----------|------------------|--------------|------------------|-----------|------------------|-----------|------------------|--------------|------------------|-----------|------------------|--------------------------------------|
|          |             |                                  |             |                                    |             |                |             |           |             |              |             |           |             |           |             |              |             |           |             |                                      |

| ***Continuing        operations***                                        |   |    |   |      |   |      |   |      |   |      |   |    |   |      |   |      |   |   |   |   |
|---------------------------------------------------------------------------|--------|---------|--------|-----------|--------|-----------|--------|-----------|--------|-----------|--------|---------|--------|-----------|--------|-----------|--------|--------|--------|--------|
| **Joint ventures and associates**                                         |   |    |   |      |   |      |   |      |   |      |   |    |   |      |   |      |   |   |   |   |
| ACAM        Clienti SpA                                                   |   | 14      |   | 2         |   |      |   | 1         |   | 5         |   |    |   | 56        |   |      |   |   |   |   |
| Agiba Petroleum Co                                                        |   | 2       |   | 5         |   |      |   |      |   | 95        |   |    |   |      |   |      |   |   |   |   |
| Azienda        Energia e Servizi Torino SpA                               |   | 1       |   | 65        |   |      |   |      |   | 78        |   |    |   |      |   |      |   |   |   |   |
| Bayernoil Raffineriegesellschaft mbH                                      |   |    |   | 32        |   | 1         |   | 19        |   | 51        |   |    |   | 2         |   |      |   |   |   |   |
| Blue        Stream Pipeline Co BV                                         |   | 13      |   | 14        |   | 37        |   |      |   | 152       |   |    |   |      |   | 2         |   |   |   |   |
| Bronberger & Kessler und Gilg &        Schweiger GmbH & Co KG |   | 20      |   |      |   |      |   |      |   |      |   |    |   | 121       |   |      |   |   |   |   |
| CEPAV        (Consorzio Eni per l’Alta Velocità) Uno            |   | 28      |   | 12        |   | 6,054     |   |      |   | 5         |   |    |   |      |   | 37        |   |   |   |   |
| CEPAV (Consorzio Eni per l’Alta Velocità)        Due            |   | 6       |   | 3         |   | 76        |   |      |   | 3         |   |    |   |      |   | 6         |   |   |   |   |
| Eni Gas        & Power France SA (former Altergaz SA)                 |   |    |   |      |   |      |   |      |   |      |   |    |   | 262       |   |      |   |   |   |   |
| GasVersorgung Süddeutschland GmbH                                    |   | 3       |   |      |   |      |   |      |   |      |   |    |   | 62        |   |      |   |   |   |   |
| GreenStream        BV                                                     |   | 4       |   | 13        |   |      |   |      |   | 95        |   |    |   | 1         |   | 2         |   |   |   |   |
| Karachaganak Petroleum Operating BV                                       |   | 39      |   | 253       |   |      |   | 821       |   | 346       |   | 28      |   | 8         |   | 7         |   |   |   |   |
| KWANDA -        Suporte Logistico Lda                                     |   | 51      |   | 1         |   |      |   |      |   |      |   |    |   |      |   | 17        |   |   |   |   |
| Mellitah Oil & Gas BV                                                 |   | 30      |   | 137       |   |      |   |      |   | 225       |   |    |   |      |   | 33        |   |   |   |   |
| Petrobel        Belayim Petroleum Co                                      |   | 8       |   | 34        |   |      |   |      |   | 714       |   |    |   |      |   | 3         |   | 2      |   |   |
| Raffineria di Milazzo ScpA                                                |   | 21      |   | 20        |   |      |   |      |   | 266       |   |    |   | 157       |   | 7         |   | 1      |   |   |
| Rosa GmbH                                                                 |   | 7       |   |      |   |      |   |      |   |      |   |    |   | 50        |   |      |   |   |   |   |
| Saipon Snc                                                                |   | 2       |   |      |   | 53        |   |      |   |      |   |    |   |      |   | 29        |   |   |   |   |
| Super        Octanos CA                                                   |   |    |   | 23        |   |      |   | 58        |   |      |   |    |   | 2         |   |      |   |   |   |   |
| Supermetanol CA                                                           |   |    |   | 13        |   |      |   | 57        |   |      |   |    |   |      |   |      |   | 1      |   |   |
| Trans        Austria Gasleitung GmbH                                      |   | 8       |   | 69        |   |      |   | 32        |   | 149       |   |    |   | 1         |   | 37        |   |   |   |   |
| Transitgas AG                                                             |   |    |   | 8         |   |      |   |      |   | 70        |   |    |   |      |   |      |   |   |   |   |
| Unión        Fenosa Gas SA                                           |   | 11      |   |      |   | 58        |   |      |   |      |   |    |   | 60        |   |      |   | 1      |   |   |
| Other (*)                                                                 |   | 138     |   | 51        |   | 11        |   | 27        |   | 232       |   | 50      |   | 35        |   | 86        |   | 11     |   |   |
|                                                                      |   | **406** |   | **755**   |   | **6,290** |   | **1,015** |   | **2,486** |   | **78**  |   | **817**   |   | **266**   |   | **16** |   |   |
| **Unconsolidated entities controlled by Eni**                             |   |    |   |      |   |      |   |      |   |      |   |    |   |      |   |      |   |   |   |   |
| Agip        Kazakhstan North Caspian Operating Co NV                      |   | 177     |   | 285       |   |      |   | 2         |   | 894       |   | 5       |   |      |   | 917       |   | 7      |   |   |
| Eni BTC Ltd                                                               |   |    |   |      |   | 152       |   |      |   |      |   |    |   |      |   |      |   |   |   |   |
| Other        (*)                                                          |   | 22      |   | 22        |   | 3         |   | 4         |   | 48        |   | 2       |   | 5         |   | 23        |   | 4      |   |   |
|                                                                      |   | **199** |   | **307**   |   | **155**   |   | **6**     |   | **942**   |   | **7**   |   | **5**     |   | **940**   |   | **11** |   |   |
|                                                                      |   | **605** |   | **1,062** |   | **6,445** |   | **1,021** |   | **3,428** |   | **85**  |   | **822**   |   | **1,206** |   | **27** |   |   |
| **Entities controlled by the Government**                                 |   |    |   |      |   |      |   |      |   |      |   |    |   |      |   |      |   |   |   |   |
| Gruppo        Enel                                                        |   | 83      |   | 44        |   |      |   | 20        |   | 316       |   | 1       |   | 124       |   | 114       |   |   |   |   |
| Gruppo Finmeccanica                                                       |   | 44      |   | 44        |   |      |   | 50        |   | 36        |   |    |   | 22        |   | 9         |   |   |   |   |
| GSE -        Gestore Servizi Energetici                                   |   | 94      |   | 104       |   |      |   | 466       |   |      |   | 81      |   | 462       |   | 16        |   |   |   | 3      |
| Gruppo Terna                                                              |   | 35      |   | 41        |   |      |   | 115       |   | 71        |   | 31      |   | 55        |   | 28        |   | 9      |   | 38     |
| Other        (*)                                                          |   | 62      |   | 44        |   |      |   |      |   | 74        |   | 2       |   | 44        |   | 3         |   | 21     |   |   |
|                                                                      |   | **318** |   | **277**   |   |      |   | **651**   |   | **497**   |   | **115** |   | **707**   |   | **170**   |   | **30** |   | **41** |
|                                                                      |   | **923** |   | **1,339** |   | **6,445** |   | **1,672** |   | **3,925** |   | **200** |   | **1,529** |   | **1,376** |   | **57** |   | **41** |

| ***Discontinued operations***                    |   |    |   |      |   |      |   |      |   |      |   |    |   |      |   |      |   |   |   |   |
|--------------------------------------------------|--------|---------|--------|-----------|--------|-----------|--------|-----------|--------|-----------|--------|---------|--------|-----------|--------|-----------|--------|--------|--------|--------|
| **Joint        ventures and associates**         |   |    |   |      |   |      |   |      |   |      |   |    |   |      |   |      |   |   |   |   |
| Azienda Energia e Servizi Torino SpA             |   |    |   |      |   |      |   |      |   |      |   |    |   |      |   | 1         |   |   |   |   |
| Other        (*)                                 |   |    |   |      |   |      |   |      |   |      |   |    |   |      |   | 5         |   | 1      |   |   |
|                                             |   |    |   |      |   |      |   |      |   |      |   |    |   |      |   | **6**     |   | **1**  |   |   |
| **Entities        controlled by the Government** |   |    |   |      |   |      |   |      |   |      |   |    |   |      |   |      |   |   |   |   |
| Gruppo Enel                                      |   |    |   |      |   |      |   |      |   | 2         |   |    |   | 4         |   | 357       |   |   |   |   |
| Gruppo        Finmeccanica                       |   |    |   |      |   |      |   |      |   | 1         |   |    |   |      |   |      |   |   |   |   |
| Other (*)                                        |   |    |   |      |   |      |   |      |   |      |   | 2       |   |      |   | 2         |   |   |   |   |
|                                             |   |    |   |      |   |      |   |      |   | **3**     |   | **2**   |   | **4**     |   | **359**   |   |   |   |   |
|                                             |   |    |   |      |   |      |   |      |   | **3**     |   | **2**   |   | **4**     |   | **365**   |   | **1**  |   |   |
|                                             |   | **923** |   | **1,339** |   | **6,445** |   | **1,672** |   | **3,928** |   | **202** |   | **1,533** |   | **1,741** |   | **58** |   | **41** |
|                                                  |   |         |   |           |   |           |   |           |   |           |   |         |   |           |   |           |   |        |   |        |

|    |    |                                                                            |
|--------------|--------------|--------------------------------------------------------------------------------------|
| (*)          |    | Each        individual amount included herein was lower than euro 50        million. |

F-107

----

##### Table of Contents

| **2011**        (euro million) |   | **Dec. 31, 2011** |   | **2011** |
|--------------------------------|--------|-------------------|--------|----------|
|                           |   |                   |   |          |

|   | **Costs** |   | **Revenues** |   |   |
|--------|-----------|--------|--------------|--------|--------|
|   |           |   |              |   |   |

| **Name** | **  ** | **Receivables and other assets** | **  ** | **Payables and other liabilities** | **  ** | **Guarantees** | **  ** | **Goods** | **  ** | **Services** | **  ** | **Other** | **  ** | **Goods** | **  ** | **Services** | **  ** | **Other** | **  ** | **Other operating (expense) income** |
|----------|------------------|----------------------------------|------------------|------------------------------------|------------------|----------------|------------------|-----------|------------------|--------------|------------------|-----------|------------------|-----------|------------------|--------------|------------------|-----------|------------------|--------------------------------------|
|          |             |                                  |             |                                    |             |                |             |           |             |              |             |           |             |           |             |              |             |           |             |                                      |

| ***Continuing        operations***                                        |   |      |   |      |   |      |   |      |   |      |   |    |   |      |   |      |   |   |   |   |
|---------------------------------------------------------------------------|--------|-----------|--------|-----------|--------|-----------|--------|-----------|--------|-----------|--------|---------|--------|-----------|--------|-----------|--------|--------|--------|--------|
| **Joint ventures and associates**                                         |   |      |   |      |   |      |   |      |   |      |   |    |   |      |   |      |   |   |   |   |
| ACAM        Clienti SpA                                                   |   | 14        |   |      |   | 2         |   |      |   | 6         |   |    |   | 60        |   |      |   |   |   |   |
| Agiba Petroleum Co                                                        |   | 3         |   | 5         |   |      |   |      |   | 86        |   |    |   |      |   |      |   |   |   |   |
| Azienda        Energia e Servizi Torino SpA                               |   | 1         |   | 63        |   |      |   |      |   | 43        |   |    |   |      |   |      |   |   |   |   |
| Bayernoil Raffineriegesellschaft mbH                                      |   |      |   | 33        |   | 1         |   | 25        |   | 59        |   |    |   | 2         |   |      |   |   |   |   |
| Blue        Stream Pipeline Co BV                                         |   | 8         |   | 12        |   |      |   |      |   | 146       |   |    |   |      |   | 2         |   |   |   |   |
| Bronberger & Kessler und Gilg &        Schweiger GmbH & Co KG |   | 16        |   |      |   |      |   |      |   |      |   |    |   | 147       |   |      |   |   |   |   |
| CEPAV        (Consorzio Eni per l’Alta Velocità) Uno            |   | 42        |   | 10        |   | 6,074     |   |      |   | 4         |   |    |   |      |   | 21        |   |   |   |   |
| CEPAV (Consorzio Eni per l’Alta Velocità)        Due            |   | 24        |   | 91        |   |      |   |      |   | 84        |   |    |   |      |   | 38        |   |   |   |   |
| GasVersorgung        Süddeutschland GmbH                             |   | 29        |   |      |   |      |   |      |   |      |   |    |   | 201       |   |      |   |   |   |   |
| Gaz de Bordeaux SAS                                                       |   | 11        |   |      |   |      |   |      |   |      |   |    |   | 69        |   |      |   |   |   |   |
| Karachaganak        Petroleum Operating BV                                |   | 38        |   | 205       |   |      |   | 1,108     |   | 256       |   | 23      |   | 8         |   | 5         |   |   |   |   |
| KWANDA - Suporte Logistico Lda                                            |   | 54        |   | 2         |   |      |   |      |   | 2         |   |    |   |      |   | 13        |   |   |   |   |
| Mellitah        Oil & Gas BV                                          |   | 28        |   | 141       |   |      |   |      |   | 71        |   |    |   |      |   | 3         |   |   |   |   |
| Petrobel Belayim Petroleum Co                                             |   | 25        |   | 46        |   |      |   |      |   | 576       |   |    |   |      |   | 69        |   |   |   |   |
| Petromar        Lda                                                       |   | 74        |   | 6         |   | 57        |   |      |   | 7         |   |    |   |      |   | 68        |   |   |   |   |
| Raffineria di Milazzo ScpA                                                |   | 29        |   | 31        |   |      |   |      |   | 322       |   |    |   | 232       |   | 16        |   | 1      |   |   |
| Saipon Snc                                                                |   | 21        |   |      |   | 48        |   |      |   |      |   |    |   |      |   | 5         |   |   |   |   |
| Super Octanos CA                                                          |   | 6         |   | 35        |   |      |   | 58        |   |      |   |    |   |      |   | 7         |   | 1      |   |   |
| Supermetanol        CA                                                    |   |      |   | 10        |   |      |   | 72        |   |      |   |    |   |      |   |      |   | 1      |   |   |
| Trans Austria Gasleitung GmbH                                             |   |      |   |      |   |      |   | 33        |   | 160       |   |    |   | 3         |   | 54        |   |   |   |   |
| Unión        Fenosa Gas SA                                           |   |      |   |      |   | 58        |   |      |   |      |   |    |   | 130       |   |      |   | 1      |   |   |
| Other (*)                                                                 |   | 181       |   | 100       |   | 3         |   | 37        |   | 310       |   | 70      |   | 131       |   | 89        |   | 7      |   |   |
|                                                                      |   | **604**   |   | **790**   |   | **6,243** |   | **1,333** |   | **2,132** |   | **93**  |   | **983**   |   | **390**   |   | **11** |   |   |
| **Unconsolidated entities controlled by Eni**                             |   |      |   |      |   |      |   |      |   |      |   |    |   |      |   |      |   |   |   |   |
| Agip        Kazakhstan North Caspian Operating Co NV                      |   | 149       |   | 238       |   |      |   |      |   | 781       |   | 7       |   |      |   | 1,182     |   | 7      |   |   |
| Eni BTC Ltd                                                               |   |      |   |      |   | 157       |   |      |   |      |   |    |   |      |   |      |   |   |   |   |
| Other (*)                                                                 |   | 53        |   | 68        |   | 6         |   | 11        |   | 51        |   | 3       |   | 11        |   | 11        |   | 8      |   |   |
|                                                                      |   | **202**   |   | **306**   |   | **163**   |   | **11**    |   | **832**   |   | **10**  |   | **11**    |   | **1,193** |   | **15** |   |   |
|                                                                      |   | **806**   |   | **1,096** |   | **6,406** |   | **1,344** |   | **2,964** |   | **103** |   | **994**   |   | **1,583** |   | **26** |   |   |
| **Entities controlled by the Government**                                 |   |      |   |      |   |      |   |      |   |      |   |    |   |      |   |      |   |   |   |   |
| Gruppo        Enel                                                        |   | 83        |   | 48        |   |      |   | 5         |   | 429       |   | 1       |   | 33        |   | 85        |   |   |   |   |
| Gruppo Finmeccanica                                                       |   | 48        |   | 51        |   |      |   | 14        |   | 53        |   |    |   | 22        |   | 12        |   |   |   |   |
| GSE -        Gestore Servizi Energetici                                   |   | 149       |   | 158       |   |      |   | 615       |   |      |   | 54      |   | 607       |   | 10        |   |   |   |   |
| Gruppo Terna                                                              |   | 19        |   | 52        |   |      |   | 119       |   | 110       |   | 23      |   | 56        |   | 26        |   | 11     |   | 32     |
| Other        (*)                                                          |   | 61        |   | 41        |   |      |   | 1         |   | 77        |   | 1       |   | 49        |   |      |   | 4      |   |   |
|                                                                      |   | **360**   |   | **350**   |   |      |   | **754**   |   | **669**   |   | **79**  |   | **767**   |   | **133**   |   | **15** |   | **32** |
|                                                                      |   | **1,166** |   | **1,446** |   | **6,406** |   | **2,098** |   | **3,633** |   | **182** |   | **1,761** |   | **1,716** |   | **41** |   | **32** |

| ***Discontinued operations***                    |   |      |   |      |   |      |   |      |   |      |   |    |   |      |   |      |   |   |   |   |
|--------------------------------------------------|--------|-----------|--------|-----------|--------|-----------|--------|-----------|--------|-----------|--------|---------|--------|-----------|--------|-----------|--------|--------|--------|--------|
| **Joint        ventures and associates**         |   |      |   |      |   |      |   |      |   |      |   |    |   |      |   |      |   |   |   |   |
| Azienda Energia e Servizi Torino SpA             |   |      |   |      |   |      |   |      |   |      |   |    |   |      |   | 1         |   |   |   |   |
| Other        (*)                                 |   |      |   |      |   |      |   |      |   | 1         |   |    |   |      |   | 4         |   | 1      |   |   |
|                                             |   |      |   |      |   |      |   |      |   | **1**     |   |    |   |      |   | **5**     |   | **1**  |   |   |
| **Entities        controlled by the Government** |   |      |   |      |   |      |   |      |   |      |   |    |   |      |   |      |   |   |   |   |
| Gruppo Enel                                      |   |      |   |      |   |      |   |      |   |      |   | 1       |   |      |   | 397       |   | 1      |   |   |
| Gruppo        Finmeccanica                       |   |      |   |      |   |      |   |      |   | 1         |   |    |   |      |   |      |   |   |   |   |
| Other (*)                                        |   |      |   |      |   |      |   |      |   |      |   | 4       |   |      |   | 3         |   |   |   |   |
|                                             |   |      |   |      |   |      |   |      |   | **1**     |   | **5**   |   |      |   | **400**   |   | **1**  |   |   |
|                                             |   |      |   |      |   |      |   |      |   | **2**     |   | **5**   |   |      |   | **405**   |   | **2**  |   |   |
|                                             |   | **1,166** |   | **1,446** |   | **6,406** |   | **2,098** |   | **3,635** |   | **187** |   | **1,761** |   | **2,121** |   | **43** |   | **32** |
|                                                  |   |           |   |           |   |           |   |           |   |           |   |         |   |           |   |           |   |        |   |        |

|    |    |                                                                            |
|--------------|--------------|--------------------------------------------------------------------------------------|
| (*)          |    | Each        individual amount included herein was lower than euro 50        million. |

F-108

----

##### Table of Contents

| **2012**        (euro million) |   | **Dec. 31, 2012** |   | **2012** |
|--------------------------------|--------|-------------------|--------|----------|
|                           |   |                   |   |          |

|   | **Costs** |   | **Revenues** |   |   |
|--------|-----------|--------|--------------|--------|--------|
|   |           |   |              |   |   |

| **Name** | **  ** | **Receivables and other assets** | **  ** | **Payables and other liabilities** | **  ** | **Guarantees** | **  ** | **Goods** | **  ** | **Services** | **  ** | **Other** | **  ** | **Goods** | **  ** | **Services** | **  ** | **Other** | **  ** | **Other operating (expense) income** |
|----------|------------------|----------------------------------|------------------|------------------------------------|------------------|----------------|------------------|-----------|------------------|--------------|------------------|-----------|------------------|-----------|------------------|--------------|------------------|-----------|------------------|--------------------------------------|
|          |             |                                  |             |                                    |             |                |             |           |             |              |             |           |             |           |             |              |             |           |             |                                      |

| ***Continuing operations***                                               |   |      |   |      |   |      |   |      |   |      |   |    |   |      |   |      |   |   |   |   |   |
|---------------------------------------------------------------------------|--------|-----------|--------|-----------|--------|-----------|--------|-----------|--------|-----------|--------|---------|--------|-----------|--------|-----------|--------|--------|--------|--------|--------|
| **Joint        ventures and associates**                                  |   |      |   |      |   |      |   |      |   |      |   |    |   |      |   |      |   |   |   |   |   |
| ACAM Clienti SpA                                                          |   | 19        |   | 1         |   | 2         |   |      |   |      |   |    |   | 65        |   | 1         |   |   |   |   |   |
| Agiba        Petroleum Co                                                 |   | 3         |   | 67        |   |      |   |      |   | 96        |   |    |   |      |   |      |   |   |   |   |   |
| Azienda Energia e Servizi Torino SpA                                      |   |      |   |      |   |      |   |      |   | 86        |   |    |   |      |   |      |   |   |   |   |   |
| Bayernoil        Raffineriegesellschaft mbH                               |   |      |   | 38        |   | 2         |   | 30        |   | 56        |   |    |   | 1         |   |      |   |   |   |   |   |
| Blue Stream Pipeline Co BV                                                |   | 3         |   | 11        |   |      |   |      |   | 155       |   |    |   |      |   | 1         |   |   |   |   |   |
| Bronberger        & Kessler und Gilg & Schweiger GmbH & Co KG |   | 9         |   |      |   |      |   |      |   |      |   |    |   | 84        |   |      |   |   |   |   |   |
| CEPAV (Consorzio Eni per l’Alta Velocità)        Uno            |   | 66        |   | 19        |   | 6,122     |   |      |   | 5         |   |    |   |      |   | 16        |   |   |   |   |   |
| CEPAV        (Consorzio Eni per l’Alta Velocità) Due            |   | 51        |   | 51        |   |      |   |      |   | 51        |   |    |   |      |   | 85        |   |   |   |   |   |
| EnBW Eni Verwaltungsgesellschaft mbH                                      |   | 60        |   |      |   |      |   |      |   |      |   |    |   | 287       |   |      |   |   |   |   |   |
| Gaz de        Bordeaux SAS                                                |   |      |   |      |   |      |   |      |   |      |   |    |   | 56        |   |      |   |   |   |   |   |
| GreenStream BV                                                            |   | 9         |   | 21        |   |      |   |      |   | 121       |   | 1       |   |      |   | 1         |   |   |   |   |   |
| InAgip doo                                                                |   | 54        |   | 10        |   |      |   |      |   | 24        |   |    |   | 53        |   | 1         |   |   |   |   |   |
| Karachaganak Petroleum Operating BV                                       |   | 28        |   | 56        |   |      |   | 1,331     |   | 244       |   | 14      |   | 5         |   | 8         |   |   |   |   |   |
| KWANDA -        Suporte Logistico Lda                                     |   | 54        |   | 1         |   |      |   |      |   | 2         |   |    |   |      |   | 7         |   |   |   |   |   |
| Mellitah Oil & Gas BV                                                 |   | 7         |   | 47        |   |      |   |      |   | 166       |   |    |   | 5         |   | 12        |   |   |   |   |   |
| Petrobel        Belayim Petroleum Co                                      |   | 31        |   | 328       |   |      |   |      |   | 585       |   |    |   |      |   | 79        |   |   |   |   |   |
| Raffineria di Milazzo ScpA                                                |   | 20        |   | 9         |   |      |   |      |   | 365       |   | 4       |   | 218       |   | 7         |   | 1      |   |   |   |
| Saipon Snc                                                                |   | 112       |   |      |   | 42        |   |      |   |      |   |    |   |      |   | 25        |   |   |   |   |   |
| Supermetanol CA                                                           |   |      |   | 16        |   |      |   | 74        |   |      |   |    |   |      |   |      |   | 1      |   |   |   |
| Toscana        Energia SpA                                                |   |      |   |      |   |      |   |      |   | 86        |   |    |   |      |   |      |   | 1      |   |   |   |
| Unión Fenosa Gas SA                                                  |   | 2         |   | 3         |   | 57        |   |      |   |      |   | 6       |   | 120       |   |      |   | 1      |   |   |   |
| Other        (*)                                                          |   | 155       |   | 30        |   | 47        |   | 15        |   | 145       |   | 8       |   | 149       |   | 100       |   | 5      |   |   |   |
|                                                                      |   | **683**   |   | **708**   |   | **6,272** |   | **1,450** |   | **2,187** |   | **33**  |   | **1,043** |   | **343**   |   | **9**  |   |   |   |
| **Unconsolidated        entities controlled by Eni**                      |   |      |   |      |   |      |   |      |   |      |   |    |   |      |   |      |   |   |   |   |   |
| Agip Kazakhstan North Caspian Operating Co NV                             |   | 236       |   | 172       |   |      |   |      |   | 605       |   | 2       |   |      |   | 1,064     |   | 5      |   |   |   |
| Eni BTC        Ltd                                                        |   |      |   |      |   | 154       |   |      |   |      |   |    |   |      |   |      |   |   |   |   |   |
| Industria Siciliana Acido Fosforico - ISAF - SpA        (in liquidation)  |   | 54        |   | 3         |   |      |   |      |   |      |   |    |   |      |   | 7         |   | 7      |   |   |   |
| Other        (*)                                                          |   | 14        |   | 59        |   | 6         |   | 7         |   | 50        |   | 4       |   | 17        |   | 3         |   | 7      |   |   |   |
|                                                                      |   | **304**   |   | **234**   |   | **160**   |   | **7**     |   | **655**   |   | **6**   |   | **17**    |   | **1,074** |   | **19** |   |   |   |
|                                                                      |   | **987**   |   | **942**   |   | **6,432** |   | **1,457** |   | **2,842** |   | **39**  |   | **1,060** |   | **1,417** |   | **28** |   |   |   |
| **Entities controlled by the Government**                                 |   |      |   |      |   |      |   |      |   |      |   |    |   |      |   |      |   |   |   |   |   |
| Gruppo        Enel                                                        |   | 16        |   | 8         |   |      |   | 4         |   | 554       |   |    |   | 55        |   | 90        |   | 1      |   | (7     | )      |
| Gruppo Finmeccanica                                                       |   | 30        |   | 50        |   |      |   | 14        |   | 70        |   |    |   | 17        |   | 1         |   |   |   |   |   |
| Gruppo        Snam                                                        |   | 182       |   | 482       |   | 46        |   | 13        |   | 558       |   | 2       |   | 102       |   | 26        |   | 1      |   |   |   |
| GSE - Gestore Servizi Energetici                                          |   | 86        |   | 66        |   |      |   | 627       |   |      |   | 58      |   | 777       |   | 18        |   | 12     |   |   |   |
| Gruppo        Terna                                                       |   | 47        |   | 61        |   |      |   | 166       |   | 126       |   | 12      |   | 95        |   | 67        |   | 14     |   | 17     |   |
| Other (*)                                                                 |   | 42        |   | 29        |   |      |   |      |   | 59        |   | 24      |   | 57        |   | 1         |   |   |   |   |   |
|                                                                      |   | **403**   |   | **696**   |   | **46**    |   | **824**   |   | **1,367** |   | **96**  |   | **1,103** |   | **203**   |   | **28** |   | **10** |   |
|                                                                      |   | **1,390** |   | **1,638** |   | **6,478** |   | **2,281** |   | **4,209** |   | **135** |   | **2,163** |   | **1,620** |   | **56** |   | **10** |   |
| ***Discontinued        operations***                                      |   |      |   |      |   |      |   |      |   |      |   |    |   |      |   |      |   |   |   |   |   |
| **Joint ventures and associates**                                         |   |      |   |      |   |      |   |      |   |      |   |    |   |      |   |      |   |   |   |   |   |
| Azienda        Energia e Servizi Torino SpA                               |   |      |   |      |   |      |   |      |   |      |   |    |   |      |   | 1         |   | 1      |   |   |   |
| Toscana Energia SpA                                                       |   |      |   |      |   |      |   |      |   |      |   |    |   |      |   | 1         |   |   |   |   |   |
| Other        (*)                                                          |   |      |   |      |   |      |   |      |   |      |   |    |   |      |   | 1         |   |   |   |   |   |
|                                                                      |   |      |   |      |   |      |   |      |   |      |   |    |   |      |   | **3**     |   | **1**  |   |   |   |
| **Entities        controlled by the Government**                          |   |      |   |      |   |      |   |      |   |      |   |    |   |      |   |      |   |   |   |   |   |
| Gruppo Enel                                                               |   |      |   |      |   |      |   |      |   | 87        |   |    |   |      |   | 295       |   |   |   |   |   |
| Other        (*)                                                          |   |      |   |      |   |      |   |      |   |      |   | 1       |   |      |   | 3         |   | 1      |   |   |   |
|                                                                      |   |      |   |      |   |      |   |      |   | **87**    |   | **1**   |   |      |   | **298**   |   | **1**  |   |   |   |
|                                                                      |   |      |   |      |   |      |   |      |   | **87**    |   | **1**   |   |      |   | **301**   |   | **2**  |   |   |   |
|                                                                      |   | **1,390** |   | **1,638** |   | **6,478** |   | **2,281** |   | **4,296** |   | **136** |   | **2,163** |   | **1,921** |   | **58** |   | **10** |   |
|                                                                      |   |           |   |           |   |           |   |           |   |           |   |         |   |           |   |           |   |        |   |        |        |

|    |    |                                                                            |
|--------------|--------------|--------------------------------------------------------------------------------------|
| (*)          |    | Each        individual amount included herein was lower than euro 50        million. |

 

| Most significant transactions with joint        ventures, associates and non-consolidated subsidiaries        concerned: |
|--------------------------------------------------------------------------------------------------------------------------|

| • |   | sale of natural gas and        electricity to ACAM Clienti SpA;                             |
|--------|--------|---------------------------------------------------------------------------------------------|
| • |   | sale of natural gas to EnBW        Eni Verwaltungsgesellschaft mbH and Gaz de Bordeaux SAS; |

F-109

----

##### Table of Contents

| • |   | provisions of specialized        services in upstream activities and Eni’s share of        expenses incurred to develop oil fields from Agiba        Petroleum Co, Agip Kazakhstan North Caspian Operating Co        NV, Karachaganak Petroleum Operating BV, Mellitah Oil        & Gas BV, Petrobel Belayim Petroleum Co and, only for        Karachaganak Petroleum Operating BV, purchase of oil        products and to Agip Kazakhstan North Caspian Operating        Co NV, provisions of services by the Engineering &        Construction segment; services charged to Eni’s        associates are invoiced on the basis of incurred costs; |
|--------|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| • |   | gas and electricity        transportation and distribution services from Azienda        Energia e Servizi Torino SpA and Toscana Energia SpA;                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |
| • |   | payments of refining        services to Bayernoil Raffineriegesellschaft mbH and        Raffineria di Milazzo ScpA in relation to incurred costs;                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |
| • |   | acquisition of natural gas        transport services outside Italy from Blue Stream        Pipeline Co BV and GreenStream BV;                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |
| • |   | supply of oil products to        Bronberger & Kessler und Gilg & Schweiger GmbH        & Co KG and Raffineria di Milazzo ScpA on the basis        of prices referred to the quotations on international        markets of the main oil products, as they would be        conducted on an arm’s length basis;                                                                                                                                                                                                                                                                                                                                        |
| • |   | transactions related to the        planning and the construction of the tracks for high        speed/high capacity trains from Milan to Bologna with        CEPAV (Consorzio Eni per l’Alta Velocità) Uno and        related guarantees;                                                                                                                                                                                                                                                                                                                                                                                                                   |
| • |   | transactions related to the        planning and the construction of the tracks for high        speed/high capacity trains from Milan to Verona with        CEPAV (Consorzio Eni per l’Alta Velocità) Due;                                                                                                                                                                                                                                                                                                                                                                                                                                                  |
| • |   | transactions with InAgip doo        related to the redetermination of the interest in an        offshore field located in the Adriatic Sea;                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |
| • |   | guarantees issued on behalf        Saipon Snc in relation to contractual commitments related        to the execution of project planning and realization;                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |
| • |   | planning, construction and        technical assistance to support by KWANDA - Suporte        Logistico Lda;                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |
| • |   | acquisition of petrochemical        products from Supermetanol CA on the basis of prices        referred to the quotations on international markets of        the main products;                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |
| • |   | performance guarantees given        on behalf of Unión Fenosa Gas SA in relation to        contractual commitments related to the results of        operations and sales of LNG;                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |
| • |   | guarantees issued in        relation to the construction of an oil pipeline on behalf        of Eni BTC Ltd; and                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |
| • |   | services for the        environmental restoration to Industria Siciliana Acido        Fosforico - ISAF - SpA (in liquidation).                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |

|    |
|--------------|

| The most significant transactions with        entities controlled by the Italian Government concerned: |
|--------------------------------------------------------------------------------------------------------|

| • |   | sales and transportation        services of natural gas, the sale of fuel oil and the        sale and purchase of electricity, the acquisition of        electricity transmission service and the fair value of        derivative financial instruments with Gruppo Enel;    |
|--------|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| • |   | a long-term contract for the        maintenance at the Group’s combined-cycle power        plants with Gruppo Finmeccanica;                                                                                                                                             |
| • |   | acquisition of natural gas        transportation, distribution and storage services from        Gruppo Snam on the basis of tariffs set by the Authority        for Electricity and Gas;                                                                                     |
| • |   | gas transportation and        distribution services from Gruppo Snam on the basis of        tariffs set by the Authority for Electricity and Gas;                                                                                                                            |
| • |   | supply of natural gas to        Gruppo Snam on the basis of prices referred to the        quotations of the main energy commodities, as they would        be conducted on an arm’s length basis;                                                                        |
| • |   | sale and purchase of        electricity and green certificates with GSE - Gestore        Servizi Energetici; and                                                                                                                                                             |
| • |   | sale and purchase of        electricity, the acquisition of domestic electricity        transmission service and the fair value of derivative        financial instruments included in prices of electricity        related to sale/purchase transactions with Gruppo Terna. |

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##### Table of Contents

**Related-party financing transactions**Financing transactions with joint ventures, associates andnon-consolidated subsidiaries as well as with entities controlledby the Government in the 2010, 2011 and 2012, respectively,consisted of the following:

| **2010**        (euro million) |   | **Dec. 31, 2010** |   | **2010** |
|--------------------------------|--------|-------------------|--------|----------|
|                           |   |                   |   |          |

| **Name** | **  ** | **Receivables** | **  ** | **Payables** | **  ** | **Guarantees** | **  ** | **Charges** | **  ** | **Gains** | **  ** | **Income from equity        instruments** |
|----------|------------------|-----------------|------------------|--------------|------------------|----------------|------------------|-------------|------------------|-----------|------------------|-------------------------------------------|
|          |             |                 |             |              |             |                |             |             |             |           |             |                                           |

| **Joint ventures and associates**             |   |      |   |    |   |    |   |   |   |   |   |   |
|-----------------------------------------------|--------|-----------|--------|---------|--------|---------|--------|--------|--------|--------|--------|--------|
| Artic        Russia BV                        |   | 104       |   | 3       |   |    |   |   |   | 1      |   |   |
| Bayernoil Raffineriegesellschaft mbH          |   | 119       |   |    |   |    |   |   |   |   |   |   |
| Blue        Stream Pipeline Co BV             |   |      |   | 8       |   | 648     |   |   |   | 9      |   |   |
| GreenStream BV                                |   | 459       |   | 2       |   |    |   |   |   | 19     |   |   |
| Raffineria        di Milazzo ScpA             |   |      |   |    |   | 120     |   |   |   |   |   |   |
| Trans Austria Gasleitung GmbH                 |   | 144       |   |    |   |    |   |   |   | 6      |   |   |
| Transmediterranean        Pipeline Co Ltd     |   | 141       |   |    |   |    |   |   |   | 5      |   |   |
| Other (*)                                     |   | 105       |   | 75      |   | 24      |   |   |   |   |   |   |
|                                          |   | **1,072** |   | **88**  |   | **792** |   |   |   | **40** |   |   |
| **Unconsolidated entities controlled by Eni** |   |      |   |    |   |    |   |   |   |   |   |   |
| Other (*)                                     |   | 53        |   | 39      |   | 1       |   |   |   | 1      |   |   |
|                                          |   | **53**    |   | **39**  |   | **1**   |   |   |   | **1**  |   |   |
|                                          |   | **1,125** |   | **127** |   | **793** |   |   |   | **41** |   |   |
|                                               |   |           |   |         |   |         |   |        |   |        |   |        |

|    |    |                                                                            |
|--------------|--------------|--------------------------------------------------------------------------------------|
| (*)          |    | Each        individual amount included herein was lower than euro 50        million. |

  

| **2011**        (euro million) |   | **Dec. 31, 2011** |   | **2011** |
|--------------------------------|--------|-------------------|--------|----------|
|                           |   |                   |   |          |

| **Name** | **  ** | **Receivables** | **  ** | **Payables** | **  ** | **Guarantees** | **  ** | **Charges** | **  ** | **Gains** | **  ** | **Income from equity        instruments** |
|----------|------------------|-----------------|------------------|--------------|------------------|----------------|------------------|-------------|------------------|-----------|------------------|-------------------------------------------|
|          |             |                 |             |              |             |                |             |             |             |           |             |                                           |

| **Joint ventures and associates**                              |   |      |   |    |   |      |   |   |   |   |   |    |
|----------------------------------------------------------------|--------|-----------|--------|---------|--------|-----------|--------|--------|--------|--------|--------|---------|
| Artic        Russia BV                                         |   |      |   | 3       |   | 204       |   |   |   |   |   |    |
| Bayernoil Raffineriegesellschaft mbH                           |   | 107       |   |    |   |      |   |   |   |   |   |    |
| Blue        Stream Pipeline Co BV                              |   |      |   | 291     |   | 669       |   |   |   | 6      |   |    |
| CEPAV (Consorzio Eni per l’Alta Velocità)        Due |   |      |   |    |   | 84        |   |   |   |   |   |    |
| GreenStream        BV                                          |   | 503       |   | 1       |   |      |   |   |   | 26     |   |    |
| Raffineria di Milazzo ScpA                                     |   | 60        |   |    |   | 88        |   |   |   | 1      |   |    |
| Société        Centrale Electrique du Congo SA       |   | 93        |   |    |   | 6         |   |   |   |   |   |    |
| Transmediterranean Pipeline Co Ltd                             |   | 115       |   |    |   |      |   |   |   | 4      |   |    |
| Unión        Fenosa Gas SA                                |   |      |   | 85      |   |      |   |   |   |   |   |    |
| Other (*)                                                      |   | 104       |   | 64      |   |      |   | 1      |   | 9      |   |    |
|                                                           |   | **982**   |   | **444** |   | **1,051** |   | **1**  |   | **46** |   |    |
| **Unconsolidated entities controlled by Eni**                  |   |      |   |    |   |      |   |   |   |   |   |    |
| Other (*)                                                      |   | 57        |   | 59      |   | 1         |   |   |   | 3      |   |    |
|                                                           |   | **57**    |   | **59**  |   | **1**     |   |   |   | **3**  |   |    |
| **Entities        controlled by the Government**               |   |      |   |    |   |      |   |   |   |   |   |    |
| Gruppo Cassa Depositi e Prestiti                               |   |      |   |    |   |      |   |   |   |   |   | 338     |
|                                                           |   |      |   |    |   |      |   |   |   |   |   | **338** |
|                                                           |   | **1,039** |   | **503** |   | **1,052** |   | **1**  |   | **49** |   | **338** |
|                                                                |   |           |   |         |   |           |   |        |   |        |   |         |

|    |    |                                                                            |
|--------------|--------------|--------------------------------------------------------------------------------------|
| (*)          |    | Each        individual amount included herein was lower than euro 50        million. |

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##### Table of Contents

| **2012**        (euro million) |   | **Dec. 31, 2012** |   | **2012** |
|--------------------------------|--------|-------------------|--------|----------|
|                           |   |                   |   |          |

| **Name** | **  ** | **Receivables** | **  ** | **Payables** | **  ** | **Guarantees** | **  ** | **Charges** | **  ** | **Gains** | **  ** | **Income from equity        instruments** |
|----------|------------------|-----------------|------------------|--------------|------------------|----------------|------------------|-------------|------------------|-----------|------------------|-------------------------------------------|
|          |             |                 |             |              |             |                |             |             |             |           |             |                                           |

| ***Continuing operations***                                    |   |      |   |    |   |    |   |   |   |   |   |      |
|----------------------------------------------------------------|--------|-----------|--------|---------|--------|---------|--------|--------|--------|--------|--------|-----------|
| **Joint        ventures and associates**                       |   |      |   |    |   |    |   |   |   |   |   |      |
| Bayernoil Raffineriegesellschaft mbH                           |   | 94        |   |    |   |    |   |   |   | 1      |   |      |
| Blue        Stream Pipeline Co BV                              |   |      |   | 291     |   | 657     |   | 2      |   | 3      |   |      |
| CARDÓN IV SA                                              |   | 80        |   |    |   |    |   |   |   | 3      |   |      |
| CEPAV        (Consorzio Eni per l’Alta Velocità) Due |   |      |   |    |   | 84      |   |   |   |   |   |      |
| GreenStream BV                                                 |   | 453       |   |    |   |    |   |   |   | 29     |   |      |
| Raffineria        di Milazzo ScpA                              |   | 40        |   |    |   | 75      |   |   |   | 2      |   |      |
| Société Centrale Electrique du Congo SA              |   | 92        |   |    |   |    |   |   |   |   |   |      |
| Transmediterranean        Pipeline Co Ltd                      |   | 82        |   |    |   |    |   |   |   | 6      |   |      |
| Other (*)                                                      |   | 94        |   | 63      |   | 12      |   | 1      |   | 2      |   |      |
|                                                           |   | **935**   |   | **354** |   | **828** |   | **3**  |   | **46** |   |      |
| **Unconsolidated entities controlled by Eni**                  |   |      |   |    |   |    |   |   |   |   |   |      |
| Other (*)                                                      |   | 58        |   | 49      |   | 1       |   | 1      |   |   |   |      |
|                                                           |   | **58**    |   | **49**  |   | **1**   |   | **1**  |   |   |   |      |
| **Entities        controlled by the Government**               |   |      |   |    |   |    |   |   |   |   |   |      |
| Gruppo Cassa Depositi e Prestiti                               |   | 883       |   |    |   |    |   |   |   | 6      |   |      |
| Gruppo        Snam                                             |   | 141       |   |    |   |    |   |   |   | 1      |   |      |
|                                                           |   | **1,024** |   |    |   |    |   |   |   | **7**  |   |      |
|                                                           |   | **2,017** |   | **403** |   | **829** |   | **4**  |   | **53** |   |      |
| ***Discontinued operations***                                  |   |      |   |    |   |    |   |   |   |   |   |      |
| **Entities        controlled by the Government**               |   |      |   |    |   |    |   |   |   |   |   |      |
| Gruppo Cassa Depositi e Prestiti                               |   |      |   |    |   |    |   |   |   |   |   | 2,019     |
|                                                           |   |      |   |    |   |    |   |   |   |   |   | **2,019** |
|                                                           |   | **2,017** |   | **403** |   | **829** |   | **4**  |   | **53** |   | **2,019** |
|                                                                |   |           |   |         |   |         |   |        |   |        |   |           |

|    |    |                                                                            |
|--------------|--------------|--------------------------------------------------------------------------------------|
| (*)          |    | Each        individual amount included herein was lower than euro 50        million. |

 

| Most significant transactions with joint        ventures, associates and non-consolidated subsidiaries        concerned: |
|--------------------------------------------------------------------------------------------------------------------------|

| • |   | bank debt guarantee issued        on behalf of Blue Stream Pipeline Co BV, CEPAV (Consorzio        Eni per l’Alta Velocità) Due and Raffineria di        Milazzo ScpA;                                                                                                                                                                 |
|--------|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| • |   | financing loans granted to        Bayernoil Raffineriegesellschaft mbH for capital        expenditures in refining plants, to CARDÓN IV SA for the        exploration and development activities of an oil field        and to Société Electrique Centrale du Congo SA for the        construction of an electric plant in Congo; |
| • |   | the financing of the        construction of natural gas transmission facilities and        transport services with GreenStream BV and        Transmediterranean Pipeline Co Ltd; and                                                                                                                                                             |
| • |   | a cash deposit at Eni’s        financial companies on behalf of Blue Stream Pipeline Co        BV.                                                                                                                                                                                                                                          |

Financing receivables and income from investmentswith Gruppo Cassa Depositi e Prestiti related to the sale of SnamSpA (divestment of a 30% stake) (more information is provided innote 17 – Investments). Financial receivables with Snam SpArelated to the settlement of financial derivative transactions.

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##### Table of Contents

**Impact of transactions and positions withrelated parties on the balance sheet, profit and loss account andstatement of cash flow**The impact of transactions and positions with relatedparties on the balance sheet consisted of the following:

|   |   | **Dec. 31, 2010** |   | **Dec. 31, 2011** |   | **Dec. 31, 2012** |
|--------|--------|-------------------|--------|-------------------|--------|-------------------|
|   |   |                   |   |                   |   |                   |

| (euro        million) |   | **Total** |   | **Related parties** |   | **Impact**(%) |   | **Total** |   | **Related parties** |   | **Impact**(%) |   | **Total** |   | **Related parties** |   | **Impact**(%) |
|-----------------------|--------|-----------|--------|---------------------|--------|---------------|--------|-----------|--------|---------------------|--------|---------------|--------|-----------|--------|---------------------|--------|---------------|
|                  |   |           |   |                     |   |               |   |           |   |                     |   |               |   |           |   |                     |   |               |

| Trade and other receivables          |   | 23,636 |   | 1,356 |   | 5.74  |   | 24,595 |   | 1,496  |   | 6.08   |   | 28,621 |   | 2,714 |   | 9.48  |
|--------------------------------------|--------|--------|--------|-------|--------|-------|--------|--------|--------|--------|--------|--------|--------|--------|--------|-------|--------|-------|
| Other        current assets          |   | 1,350  |   | 9     |   | 0.67  |   | 2,326  |   | 2      |   | 0.09   |   | 1,624  |   | 8     |   | 0.49  |
| Other non-current financial assets   |   | 1,523  |   | 668   |   | 43.86 |   | 1,578  |   | 704    |   | 44.61  |   | 1,229  |   | 642   |   | 52.24 |
| Other        non-current assets      |   | 3,355  |   | 16    |   | 0.48  |   | 4,225  |   | 3      |   | 0.07   |   | 4,400  |   | 43    |   | 0.98  |
| Current financial liabilities        |   | 6,515  |   | 127   |   | 1.95  |   | 4,459  |   | 503    |   | 11.28  |   | 2,223  |   | 403   |   | 18.13 |
| Trade and        other payables      |   | 22,575 |   | 1,297 |   | 5.75  |   | 22,912 |   | 1,446  |   | 6.31   |   | 23,581 |   | 1,616 |   | 6.85  |
| Other current liabilities            |   | 1,620  |   | 5     |   | 0.31  |   | 2,237  |   |   |   |   |   | 1,437  |   | 6     |   | 0.42  |
| Other        non-current liabilities |   | 2,194  |   | 45    |   | 2.05  |   | 2,900  |   |   |   |   |   | 1,977  |   | 16    |   | 0.81  |
|                                 |   |        |   |       |   |       |   |        |   |        |   |        |   |        |   |       |   |       |

The impact of transactions with related parties on the profitand loss accounts consisted of the following:

|   |   | **2010** |   | **2011** |   | **2012** |
|--------|--------|----------|--------|----------|--------|----------|
|   |   |          |   |          |   |          |

| (euro        million) |   | **Total** |   | **Related parties** |   | **Impact**(%) |   | **Total** |   | **Related parties** |   | **Impact**(%) |   | **Total** |   | **Related parties** |   | **Impact**(%) |
|-----------------------|--------|-----------|--------|---------------------|--------|---------------|--------|-----------|--------|---------------------|--------|---------------|--------|-----------|--------|---------------------|--------|---------------|
|                  |   |           |   |                     |   |               |   |           |   |                     |   |               |   |           |   |                     |   |               |

| ***Continuing operations***             |   |   |   |   |   |   |   |   |    |   |   |   |   |   |   |   |   |    |   |   |   |   |   |   |
|-----------------------------------------|--------|--------|--------|--------|--------|--------|--------|--------|---------|--------|--------|--------|--------|--------|--------|--------|--------|---------|--------|--------|--------|--------|--------|--------|
| Net sales        from operations        |   | 96,617 |   |   | 2,905  |   | 3.01   |   | 107,690 |   |   | 3,477  |   |   | 3.23   |   |   | 127,220 |   |   | 3,783  |   |   | 2.97   |
| Other income and revenues               |   | 967    |   |   | 57     |   | 5.89   |   | 926     |   |   | 41     |   |   | 4.43   |   |   | 1,546   |   |   | 56     |   |   | 3.62   |
| Purchases,        services and other    |   | 68,774 |   |   | 5,820  |   | 8.46   |   | 78,795  |   |   | 5,880  |   |   | 7.46   |   |   | 95,363  |   |   | 6,604  |   |   | 6.93   |
| Payroll and related costs               |   | 4,428  |   |   | 28     |   | 0.63   |   | 4,404   |   |   | 33     |   |   | 0.75   |   |   | 4,658   |   |   | 21     |   |   | 0.45   |
| Other        operating income (expense) |   | 131    |   |   | 41     |   | 31.30  |   | 171     |   |   | 32     |   |   | 18.71  |   |   | (158    | )      |   | 10     |   |   | ..     |
| Financial income                        |   | 6,109  |   |   | 41     |   | 0.67   |   | 6,376   |   |   | 49     |   |   | 0.77   |   |   | 7,218   |   |   | 53     |   |   | 0.73   |
| Financial        expense                |   | (6,727 | )      |   |   |   |   |   | (7,410  | )      |   | (1     | )      |   | 0.01   |   |   | (8,274  | )      |   | (4     | )      |   | 0.05   |
| Other gain (loss) from investments      |   | 619    |   |   |   |   |   |   | 1,623   |   |   | 338    |   |   | 20.83  |   |   | 2,603   |   |   |   |   |   |   |
| ***Discontinued        operations***    |   |   |   |   |   |   |   |   |    |   |   |   |   |   |   |   |   |    |   |   |   |   |   |   |
| Net sales from operations               |   | 1,895  |   |   | 370    |   | 19.53  |   | 1,906   |   |   | 407    |   |   | 21.35  |   |   | 1,886   |   |   | 303    |   |   | 16.07  |
| Operating        expenses               |   | 1,266  |   |   | 5      |   | 0.39   |   | 1,274   |   |   | 7      |   |   | 0.55   |   |   | 998     |   |   | 88     |   |   | 8.82   |
| Income (expense) from investments       |   | 44     |   |   |   |   |   |   | 48      |   |   |   |   |   |   |   |   | 3,508   |   |   | 2,019  |   |   | 57.55  |
|                                    |   |        |        |   |        |   |        |   |         |        |   |        |        |   |        |        |   |         |        |   |        |        |   |        |

Transactions with related parties were part of the ordinarycourse of Eni’s business and were mainly conducted onarm’s length basis.

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The main cash flows with related parties are provided below:

| (euro million) |   | **2010** |   | **2011** |   | **2012** |
|----------------|--------|----------|--------|----------|--------|----------|
|           |   |          |   |          |   |          |

| Revenues and other income                                                             |   | 2,962      |   |   | 3,518      |   |   | 3,839      |   |
|---------------------------------------------------------------------------------------|--------|------------|--------|--------|------------|--------|--------|------------|--------|
| Costs and        other expenses                                                       |   | (5,820     | )      |   | (4,497     | )      |   | (5,375     | )      |
| Other operating income (expense)                                                      |   | 41         |   |   | 32         |   |   | 10         |   |
| Net change        in trade and other receivables and liabilities                      |   | 182        |   |   | (140       | )      |   | (280       | )      |
| Net interests                                                                         |   | 41         |   |   | 48         |   |   | 49         |   |
| **Net        cash provided from operating activities - Continuing        operations** |   | **(2,594** | **)**  |   | **(1,039** | **)**  |   | **(1,757** | **)**  |
| **Net cash provided from operating activities -        Discontinued operations**      |   | **365**    |   |   | **400**    |   |   | **215**    |   |
| **Net        cash provided from operating activities**                                |   | **(2,229** | **)**  |   | **(639**   | **)**  |   | **(1,542** | **)**  |
| Capital expenditures in tangible and intangible        assets                         |   | (1,764     | )      |   | (1,416     | )      |   | (1,250     | )      |
| Disposal        of investments                                                        |   |       |   |   | 533        |   |   | 3,517      |   |
| Change in accounts payable and receivables in        relation to investments          |   | 10         |   |   | (21        | )      |   | 261        |   |
| Change in        financial receivables                                                |   | 128        |   |   | 104        |   |   | (993       | )      |
| **Net cash used in investing activities**                                             |   | **(1,626** | **)**  |   | **(800**   | **)**  |   | **1,535**  |   |
| Change in        financial liabilities                                                |   | (23        | )      |   | 348        |   |   | (94        | )      |
| **Net cash used in financing activities**                                             |   | **(23**    | **)**  |   | **348**    |   |   | **(94**    | **)**  |
| **Total        financial flows to related parties**                                   |   | **(3,878** | **)**  |   | **(1,091** | **)**  |   | **(101**   | **)**  |
|                                                                                  |   |            |        |   |            |        |   |            |        |

The impact of cash flows with related parties consisted of thefollowing:

|   |   | **2010** |   | **2011** |   | **2012** |
|--------|--------|----------|--------|----------|--------|----------|
|   |   |          |   |          |   |          |

| (euro        million) |   | **Total** |   | **Related parties** |   | **Impact**(%) |   | **Total** |   | **Related parties** |   | **Impact**(%) |   | **Total** |   | **Related parties** |   | **Impact**(%) |
|-----------------------|--------|-----------|--------|---------------------|--------|---------------|--------|-----------|--------|---------------------|--------|---------------|--------|-----------|--------|---------------------|--------|---------------|
|                  |   |           |   |                     |   |               |   |           |   |                     |   |               |   |           |   |                     |   |               |

| Net cash provided from operating activities  |   | 14,694  |   |   | (2,229 | ) |   | ..    |   | 14,382  |   |   | (639 | )      |   | ..   |   | 12,371 |   |   | (1,542 | )      |   | .. |
|----------------------------------------------|--------|---------|--------|--------|--------|---|--------|-------|--------|---------|--------|--------|------|--------|--------|------|--------|--------|--------|--------|--------|--------|--------|----|
| Net cash        used in investing activities |   | (12,965 | )      |   | (1,626 | ) |   | 12.54 |   | (11,218 | )      |   | (800 | )      |   | 7.13 |   | (8,291 | )      |   | 1,535  |   |   | .. |
| Net cash used in financing activities        |   | (1,827  | )      |   | (23    | ) |   | 1.26  |   | (3,223  | )      |   | 348  |   |   | ..   |   | 2,201  |   |   | (94    | )      |   | .. |
|                                         |   |         |        |   |        |   |   |       |   |         |        |   |      |        |   |      |   |        |        |   |        |        |   |    |

**43 Significant non-recurring events and operations**

| (euro million) |   | **2010** |   | **2011** |   | **2012** |
|----------------|--------|----------|--------|----------|--------|----------|
|           |   |          |   |          |   |          |

| Estimate of the charge from the possible        resolution of the TSKJ matter |   | 24       |   |   |   |   |   |
|-------------------------------------------------------------------------------|--------|----------|--------|--------|--------|--------|--------|
| Fines        sanctioned by Antitrust Authorities                              |   | (270     | )      |   | 69     |   |   |
|                                                                          |   | **(246** | **)**  |   | **69** |   |   |
|                                                                          |   |          |        |   |        |   |        |

In 2012, no non-recurring events and operations were reported.

In 2011, a non-recurring provision was made amounting to euro69 million to reflect the expected liabilities on an antitrustproceeding in the European sector of rubbers taking into accountan unfavorable sentence issued by the Court of Justice of theEuropean Community on the matter.

In 2010, a non-recurring gain amounting to euro 270 millionrelated to the favorable settlement of an antitrust proceedingsconcerning alleged anticompetitive behavior charged to Eniregarding third party access to the import pipeline from Algeriain 2003. This resulted in a significantly lower fine imposed onthe Company than the one sanctioned by the Antitrust Authority in2003 and then accrued to profit and loss. Also in 2010, a chargeof euro 24 million related to a fine of $30 million for the TSKJmatter following the agreement with the Federal Government ofNigeria for the settling of the legal proceeding.

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**44 Positions or transactions derivingfrom atypical and/or unusual operations**

In 2010, 2011 and 2012 no transactions deriving from atypicaland/or unusual operations were reported.

**45 Subsequent events**

In January 2013, Eni continued the divestment of part of itsinterest in Snam with the placement of euro 1,250 millionaggregate principal amount of senior, unsecured bonds,exchangeable into ordinary shares of Snam. The bonds havematurity of 3 years and pay a coupon of 0.625% per annum. Thebonds will be exchangeable into Snam ordinary shares at anexchange price of euro 4.33 per Snam ordinary share, representingapproximately a 20% premium to the Snam current reference price.Underlying the bonds are approximately 288.7 million ordinaryshares of Snam, corresponding to approximately 8.54% of thecurrently outstanding share capital of Snam. Changes in fairvalue of those shares will be reported through profit as opposedto equity based on the fair value option provided by IAS 39 frominception, i.e. the transaction date with CDP. Those changes wereimmaterial at the balance sheet date. At the maturity date, ifthe strike price is lower than the exercise price, Eni will beenabled to reimburse the bond holders with Snam ordinary sharesat the current market price recognized at the date of thereimbursement. 

On March 13, 2013, Eni signed an agreement withCNPC/Petrochina to sell 28.57% of the share capital of thesubsidiary Eni East Africa SpA, which currently owns 70% interestin Area 4 for an agreed price equal to $4,210 million. The dealis subject to approval by relevant authorities. Once finalized,CNPC indirectly acquires, through its 28.57% equity investment inEni East Africa SpA, a 20% interest in Area 4, while Eni willretain the 50% interest through the remaining controlling stakein Eni East Africa SpA.

 

 

 

 

 

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**Supplemental oil and gas information(unaudited)**

The following information pursuant to "InternationalFinancial Reporting Standards" (IFRS) is presented inaccordance with FASB Extractive Activities - Oil & Gas (Topic932). Amounts related to minority interests are not significant.

*Capitalized costs*Capitalized costs represent the total expenditures for provedand unproved mineral interests and related support equipment andfacilities utilized in oil and gas exploration and productionactivities, together with related accumulated depreciation,depletion and amortization. Capitalized costs by geographicalarea consist of the following:

| (euro        million) |   | **Italy** |   | **Rest of Europe** |   | **North Africa** |   | **Sub-Saharan Africa** |   | **Kazakhstan** |   | **Rest of Asia** |   | **Americas** |   | **Australia and Oceania** |   | **Total** |
|-----------------------|--------|-----------|--------|--------------------|--------|------------------|--------|------------------------|--------|----------------|--------|------------------|--------|--------------|--------|---------------------------|--------|-----------|
|                  |   |           |   |                    |   |                  |   |                        |   |                |   |                  |   |              |   |                           |   |           |

| **December 31, 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** (a) (b)        |   | **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**(a) (b)         |   |       |   |   | **46**     |   |   | **15**     |   |   | **1,120**  |   |   |      |   |   | **772**   |   |   | **467**    |   |   |      |   |   | **2,420**   |   |
| **December        31, 2010**                                              |   |       |   |   |       |   |   |       |   |   |       |   |   |      |   |   |      |   |   |       |   |   |      |   |   |        |   |
| **Consolidated subsidiaries**                                             |   |       |   |   |       |   |   |       |   |   |       |   |   |      |   |   |      |   |   |       |   |   |      |   |   |        |   |
| Proved        mineral interests                                           |   | 12,579     |   |   | 12,428     |   |   | 16,240     |   |   | 20,875     |   |   | 2,451     |   |   | 6,477     |   |   | 10,018     |   |   | 1,894     |   |   | 82,962      |   |
| Unproved mineral interests                                                |   | 31         |   |   | 324        |   |   | 411        |   |   | 3,047      |   |   | 39        |   |   | 1,467     |   |   | 1,249      |   |   | 200       |   |   | 6,768       |   |
| Support        equipment and facilities                                   |   | 267        |   |   | 39         |   |   | 1,421      |   |   | 961        |   |   | 75        |   |   | 78        |   |   | 59         |   |   | 12        |   |   | 2,912       |   |
| Incomplete wells and other                                                |   | 732        |   |   | 3,347      |   |   | 3,181      |   |   | 974        |   |   | 5,746     |   |   | 358       |   |   | 876        |   |   | 1         |   |   | 15,215      |   |
| **Gross        capitalized costs**                                        |   | **13,609** |   |   | **16,138** |   |   | **21,253** |   |   | **25,857** |   |   | **8,311** |   |   | **8,380** |   |   | **12,202** |   |   | **2,107** |   |   | **107,857** |   |
| Accumulated depreciation, depletion and        amortization               |   | (9,364     | )      |   | (9,346     | )      |   | (10,671    | )      |   | (14,225    | )      |   | (928      | )      |   | (6,002    | )      |   | (7,879     | )      |   | (832      | )      |   | (59,247     | )      |
| **Net        capitalized costs consolidated subsidiaries**(a)        (b)  |   | **4,245**  |   |   | **6,792**  |   |   | **10,582** |   |   | **11,632** |   |   | **7,383** |   |   | **2,378** |   |   | **4,323**  |   |   | **1,275** |   |   | **48,610**  |   |
| **Equity-accounted entities**                                             |   |       |   |   |       |   |   |       |   |   |       |   |   |      |   |   |      |   |   |       |   |   |      |   |   |        |   |
| Proved        mineral interests                                           |   |       |   |   | 1          |   |   | 83         |   |   | 52         |   |   |      |   |   | 964       |   |   | 322        |   |   |      |   |   | 1,422       |   |
| Unproved mineral interests                                                |   |       |   |   | 54         |   |   |       |   |   |       |   |   |      |   |   | 279       |   |   |       |   |   |      |   |   | 333         |   |
| Support        equipment and facilities                                   |   |       |   |   |       |   |   | 7          |   |   |       |   |   |      |   |   | 6         |   |   | 3          |   |   |      |   |   | 16          |   |
| Incomplete wells and other                                                |   |       |   |   | 22         |   |   | 1          |   |   | 1,052      |   |   |      |   |   | 114       |   |   | 200        |   |   |      |   |   | 1,389       |   |
| **Gross        capitalized costs**                                        |   |       |   |   | **77**     |   |   | **91**     |   |   | **1,104**  |   |   |      |   |   | **1,363** |   |   | **525**    |   |   |      |   |   | **3,160**   |   |
| Accumulated depreciation, depletion and        amortization               |   |       |   |   | (55        | )      |   | (72        | )      |   |       |   |   |      |   |   | (421      | )      |   | (111       | )      |   |      |   |   | (659        | )      |
| **Net        capitalized costs equity-accounted entities** (a)        (b) |   |       |   |   | **22**     |   |   | **19**     |   |   | **1,104**  |   |   |      |   |   | **942**   |   |   | **414**    |   |   |      |   |   | **2,501**   |   |
|                                                                      |   |            |        |   |            |        |   |            |        |   |            |        |   |           |        |   |           |        |   |            |        |   |           |        |   |             |        |

|    |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |
|--------------|--------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| (a)          |    | The amounts        include net capitalized financial charges totaling euro        614 million in 2011 and euro 672 million in 2012 for the        consolidated subsidiaries and euro 11 million in 2011 and        euro 24 million in 2012 for equity-accounted entities.                                                                                                                                                                                                                                                                         |
| (b)          |    | 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 euro 3,608 million in 2011 e euro        4,071 million in 2012 for the consolidated subsidiaries        and of euro 101 million in 2011 and euro 74 million in        2012 for equity-accounted entities. |

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*Costs incurred*Costs incurred represent amounts both capitalized andexpensed in connection with oil and gas producing activities.Costs incurred by geographical area consist of the following:

| (euro        million) |   | **Italy** |   | **Rest of Europe** |   | **North Africa** |   | **Sub-Saharan Africa** |   | **Kazakhstan** |   | **Rest of Asia** |   | **Americas** |   | **Australia and Oceania** |   | **Total** |
|-----------------------|--------|-----------|--------|--------------------|--------|------------------|--------|------------------------|--------|----------------|--------|------------------|--------|--------------|--------|---------------------------|--------|-----------|
|                  |   |           |   |                    |   |                  |   |                        |   |                |   |                  |   |              |   |                           |   |           |

| **2010**                                                  |   |      |   |   |      |   |   |      |   |   |      |   |   |      |   |   |    |   |   |      |   |   |    |   |   |       |   |
|-----------------------------------------------------------|--------|-----------|--------|--------|-----------|--------|--------|-----------|--------|--------|-----------|--------|--------|-----------|--------|--------|---------|--------|--------|-----------|--------|--------|---------|--------|--------|------------|--------|
| **Consolidated        subsidiaries**                      |   |      |   |   |      |   |   |      |   |   |      |   |   |      |   |   |    |   |   |      |   |   |    |   |   |       |   |
| Proved property acquisitions                              |   |      |   |   |      |   |   |      |   |   |      |   |   |      |   |   |    |   |   |      |   |   |    |   |   |       |   |
| Unproved        property acquisitions                     |   |      |   |   |      |   |   |      |   |   |      |   |   |      |   |   |    |   |   |      |   |   |    |   |   |       |   |
| Exploration                                               |   | 34        |   |   | 114       |   |   | 84        |   |   | 406       |   |   | 6         |   |   | 223     |   |   | 119       |   |   | 26      |   |   | 1,012      |   |
| Development        (a)                                    |   | 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        (b)                                    |   |      |   |   |      |   |   | 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 (a)                                           |   | 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 (b)                                           |   |      |   |   | 2         |   |   | 3         |   |   | 659       |   |   |      |   |   | 68      |   |   | 154       |   |   |    |   |   | 886        |   |
| **Total        costs incurred equity-accounted entities** |   |      |   |   | **7**     |   |   | **3**     |   |   | **664**   |   |   |      |   |   | **76**  |   |   | **163**   |   |   |    |   |   | **913**    |   |
| **2012**                                                  |   |      |   |   |      |   |   |      |   |   |      |   |   |      |   |   |    |   |   |      |   |   |    |   |   |       |   |
| **Consolidated        subsidiaries**                      |   |      |   |   |      |   |   |      |   |   |      |   |   |      |   |   |    |   |   |      |   |   |    |   |   |       |   |
| Proved property acquisitions                              |   |      |   |   |      |   |   | 14        |   |   | 27        |   |   |      |   |   |    |   |   | 2         |   |   |    |   |   | 43         |   |
| Unproved        property acquisitions                     |   |      |   |   |      |   |   |      |   |   |      |   |   |      |   |   |    |   |   |      |   |   |    |   |   |       |   |
| Exploration                                               |   | 32        |   |   | 151       |   |   | 153       |   |   | 1,142     |   |   | 3         |   |   | 193     |   |   | 80        |   |   | 96      |   |   | 1,850      |   |
| Development        (a)                                    |   | 1,045     |   |   | 2,485     |   |   | 1,441     |   |   | 2,246     |   |   | 762       |   |   | 702     |   |   | 1,071     |   |   | 16      |   |   | 9,768      |   |
| **Total costs incurred consolidated        subsidiaries** |   | **1,077** |   |   | **2,636** |   |   | **1,608** |   |   | **3,415** |   |   | **765**   |   |   | **895** |   |   | **1,153** |   |   | **112** |   |   | **11,661** |   |
| **Equity-accounted        entities**                      |   |      |   |   |      |   |   |      |   |   |      |   |   |      |   |   |    |   |   |      |   |   |    |   |   |       |   |
| Proved property acquisitions                              |   |      |   |   |      |   |   |      |   |   |      |   |   |      |   |   |    |   |   |      |   |   |    |   |   |       |   |
| Unproved        property acquisitions                     |   |      |   |   |      |   |   |      |   |   |      |   |   |      |   |   |    |   |   |      |   |   |    |   |   |       |   |
| Exploration                                               |   |      |   |   | 13        |   |   | 2         |   |   | 11        |   |   |      |   |   | 4       |   |   |      |   |   |    |   |   | 30         |   |
| Development        (b)                                    |   |      |   |   | 19        |   |   | 7         |   |   | 117       |   |   |      |   |   | 188     |   |   | 154       |   |   |    |   |   | 485        |   |
| **Total costs incurred equity-accounted        entities** |   |      |   |   | **32**    |   |   | **9**     |   |   | **128**   |   |   |      |   |   | **192** |   |   | **154**   |   |   |    |   |   | **515**    |   |
|                                                      |   |           |        |   |           |        |   |           |        |   |           |        |   |           |        |   |         |        |   |           |        |   |         |        |   |            |        |

|    |    |                                                                                                                                                |
|--------------|--------------|----------------------------------------------------------------------------------------------------------------------------------------------------------|
| (a)          |    | Includes the        abandonment costs of the assets for euro 269 million in        2010, euro 918 million in 2011 and euro 1,381 million in        2012. |
| (b)          |    | Includes the        abandonment costs of the assets for euro -3 million in        2010, euro 15 million in 2011 and euro 63 million in        2012.      |

*Results of operations from oil and gas producing activities*Results of operations from oil and gas producing activitiesrepresent only those revenues and expenses directly associatedwith such activities, including operating overheads. Theseamounts do not include any allocation of interest expense orgeneral corporate overhead and, therefore, are not necessarilyindicative of the contributions to consolidated net earnings ofEni. Related income taxes are computed by applying the localincome 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 productionis withheld and sold by its joint venture partners which arestate owned entities, with proceeds being remitted to the statein satisfaction of Eni’s PSA related tax liabilities.Revenue and income taxes include such taxes owed by Eni but paidby state-owned entities out of Eni’s share of oil and gasproduction.

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##### Table of Contents

Results of operations from oil and gas producing activities bygeographical area consist of the following:

| (euro        million) |   | **Italy** |   | **Rest of Europe** |   | **North Africa** |   | **Sub-Saharan Africa** |   | **Kazakhstan** |   | **Rest of Asia** |   | **Americas** |   | **Australia and Oceania** |   | **Total** |
|-----------------------|--------|-----------|--------|--------------------|--------|------------------|--------|------------------------|--------|----------------|--------|------------------|--------|--------------|--------|---------------------------|--------|-----------|
|                  |   |           |   |                    |   |                  |   |                        |   |                |   |                  |   |              |   |                           |   |           |

| **2010**                                                                                        |   |      |   |   |      |   |   |      |   |   |      |   |   |      |   |   |      |   |   |      |   |   |    |   |   |       |   |
|-------------------------------------------------------------------------------------------------|--------|-----------|--------|--------|-----------|--------|--------|-----------|--------|--------|-----------|--------|--------|-----------|--------|--------|-----------|--------|--------|-----------|--------|--------|---------|--------|--------|------------|--------|
| **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 (expense)                                                                          |   | (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 (expense)                                                                   |   |      |   |   |      |   |   | 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**      |   |
| **2011**                                                                                        |   |      |   |   |      |   |   |      |   |   |      |   |   |      |   |   |      |   |   |      |   |   |    |   |   |       |   |
| **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 (expense)                                                                   |   | (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 (expense)                                                                          |   |      |   |   | (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**     |   |
|                                                                                            |   |           |        |   |           |        |   |           |        |   |           |        |   |           |        |   |           |        |   |           |        |   |         |        |   |            |        |

|    |    |                                                                                                                                                                                                                                                                                                                                                                         |
|--------------|--------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| (a)          |    | Includes        asset impairments amounting to euro 123 million in 2010        and euro 189 million in 2011.                                                                                                                                                                                                                                                                      |
| (b)          |    | The        "Successful Effort Method" application would        have led to an decrease of result of operations of euro        385 million in 2010 and an increase of euro 118 million        in 2011 for the consolidated subsidiaries and a decrease        of euro 5 million in 2010 and an increase of euro 20        million in 2011 for equity-accounted entities. |

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##### Table of Contents

| (euro        million) |   | **Italy** |   | **Rest of Europe** |   | **North Africa** |   | **Sub-Saharan Africa** |   | **Kazakhstan** |   | **Rest of Asia** |   | **Americas** |   | **Australia and Oceania** |   | **Total** |
|-----------------------|--------|-----------|--------|--------------------|--------|------------------|--------|------------------------|--------|----------------|--------|------------------|--------|--------------|--------|---------------------------|--------|-----------|
|                  |   |           |   |                    |   |                  |   |                        |   |                |   |                  |   |              |   |                           |   |           |

| **2012**                                                                                         |   |      |   |   |      |   |   |       |   |   |      |   |   |      |   |   |      |   |   |      |   |   |    |   |   |       |   |
|--------------------------------------------------------------------------------------------------|--------|-----------|--------|--------|-----------|--------|--------|------------|--------|--------|-----------|--------|--------|-----------|--------|--------|-----------|--------|--------|-----------|--------|--------|---------|--------|--------|------------|--------|
| **Consolidated        subsidiaries**                                                             |   |      |   |   |      |   |   |       |   |   |      |   |   |      |   |   |      |   |   |      |   |   |    |   |   |       |   |
| Revenues:                                                                                        |   |      |   |   |      |   |   |       |   |   |      |   |   |      |   |   |      |   |   |      |   |   |    |   |   |       |   |
| - sales to        consolidated entities                                                          |   | 3,712     |   |   | 3,177     |   |   | 2,338      |   |   | 6,040     |   |   | 459       |   |   | 425       |   |   | 1,614     |   |   | 425     |   |   | 18,190     |   |
| - sales to third parties                                                                         |   | 50        |   |   | 715       |   |   | 9,129      |   |   | 2,243     |   |   | 1,368     |   |   | 1,387     |   |   | 106       |   |   | 333     |   |   | 15,331     |   |
| **Total        revenues**                                                                        |   | **3,762** |   |   | **3,892** |   |   | **11,467** |   |   | **8,283** |   |   | **1,827** |   |   | **1,812** |   |   | **1,720** |   |   | **758** |   |   | **33,521** |   |
| Operations costs                                                                                 |   | (302      | )      |   | (655      | )      |   | (606       | )      |   | (913      | )      |   | (188      | )      |   | (209      | )      |   | (361      | )      |   | (134    | )      |   | (3,368     | )      |
| Production        taxes                                                                          |   | (307      | )      |   |      |   |   | (390       | )      |   | (818      | )      |   |      |   |   | (43       | )      |   |      |   |   |    |   |   | (1,558     | )      |
| Exploration expenses                                                                             |   | (32       | )      |   | (154      | )      |   | (153       | )      |   | (993      | )      |   | (3        | )      |   | (230      | )      |   | (147      | )      |   | (123    | )      |   | (1,835     | )      |
| D.D. &        A. and provision for abandonment (a)                                           |   | (779      | )      |   | (683      | )      |   | (1,137     | )      |   | (1,750    | )      |   | (120      | )      |   | (720      | )      |   | (1,256    | )      |   | (167    | )      |   | (6,612     | )      |
| Other income (expense)                                                                           |   | (202      | )      |   | (120      | )      |   | (937       | )      |   | (447      | )      |   | 206       |   |   | (151      | )      |   | 74        |   |   | (42     | )      |   | (1,619     | )      |
| **Pretax        income from producing activities**                                               |   | **2,140** |   |   | **2,280** |   |   | **8,244**  |   |   | **3,362** |   |   | **1,722** |   |   | **459**   |   |   | **30**    |   |   | **292** |   |   | **18,529** |   |
| Income taxes                                                                                     |   | (918      | )      |   | (1,524    | )      |   | (5,194     | )      |   | (2,508    | )      |   | (736      | )      |   | (176      | )      |   | (14       | )      |   | (164    | )      |   | (11,234    | )      |
| **Results        of operations from E&P activities of consolidated        subsidiaries** (b) |   | **1,222** |   |   | **756**   |   |   | **3,050**  |   |   | **854**   |   |   | **986**   |   |   | **283**   |   |   | **16**    |   |   | **128** |   |   | **7,295**  |   |
| **Equity-accounted entities**                                                                    |   |      |   |   |      |   |   |       |   |   |      |   |   |      |   |   |      |   |   |      |   |   |    |   |   |       |   |
| Revenues:                                                                                        |   |      |   |   |      |   |   |       |   |   |      |   |   |      |   |   |      |   |   |      |   |   |    |   |   |       |   |
| - sales to consolidated entities                                                                 |   |      |   |   |      |   |   |       |   |   |      |   |   |      |   |   |      |   |   |      |   |   |    |   |   |       |   |
| - sales to        third parties                                                                  |   |      |   |   | 2         |   |   | 20         |   |   | 44        |   |   |      |   |   | 144       |   |   | 300       |   |   |    |   |   | 510        |   |
| **Total revenues**                                                                               |   |      |   |   | **2**     |   |   | **20**     |   |   | **44**    |   |   |      |   |   | **144**   |   |   | **300**   |   |   |    |   |   | **510**    |   |
| Operations        costs                                                                          |   |      |   |   |      |   |   | (10        | )      |   | (5        | )      |   |      |   |   | (14       | )      |   | (20       | )      |   |    |   |   | (49        | )      |
| Production taxes                                                                                 |   |      |   |   | (1        | )      |   | (3         | )      |   |      |   |   |      |   |   | (4        | )      |   | (128      | )      |   |    |   |   | (136       | )      |
| Exploration        expenses                                                                      |   |      |   |   | (5        | )      |   | (2         | )      |   | (11       | )      |   |      |   |   | (4        | )      |   |      |   |   |    |   |   | (22        | )      |
| D.D. & A. and provision for abandonment                                                      |   |      |   |   | (50       | )      |   | (2         | )      |   | (13       | )      |   |      |   |   | (41       | )      |   | (35       | )      |   |    |   |   | (141       | )      |
| Other        income (expense)                                                                    |   |      |   |   | (7        | )      |   | 2          |   |   | (48       | )      |   |      |   |   | (6        | )      |   | (55       | )      |   |    |   |   | (114       | )      |
| **Pretax income from producing activities**                                                      |   |      |   |   | **(61**   | **)**  |   | **5**      |   |   | **(33**   | **)**  |   |      |   |   | **75**    |   |   | **62**    |   |   |    |   |   | **48**     |   |
| Income        taxes                                                                              |   |      |   |   |      |   |   | (3         | )      |   | 4         |   |   |      |   |   | (36       | )      |   | (38       | )      |   |    |   |   | (73        | )      |
| **Results of operations from E&P activities        of equity-accounted entities**(b)         |   |      |   |   | **(61**   | **)**  |   | **2**      |   |   | **(29**   | **)**  |   |      |   |   | **39**    |   |   | **24**    |   |   |    |   |   | **(25**    | **)**  |
|                                                                                             |   |           |        |   |           |        |   |            |        |   |           |        |   |           |        |   |           |        |   |           |        |   |         |        |   |            |        |

|    |    |                                                                                                                                                                                                                                                                          |
|--------------|--------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| (a)          |    | Includes        asset impairments amounting to euro 547 million in 2012.                                                                                                                                                                                                           |
| (b)          |    | The        "Successful Effort Method" application would        have led to a decrease of result of operations of euro        189 million in 2012 for the consolidated subsidiaries and        a decrease of euro 2 million in 2012 for equity-accounted        entities. |

*Oil and natural gas reserves*Eni’s criteria concerning evaluation and classificationof proved developed and undeveloped reserves follow RegulationS-X 4-10 of the U.S. Securities and Exchange Commission and havebeen disclosed in accordance with FASB Extractive Activities -Oil & Gas (Topic 932).

Proved oil and gas reserves are those quantities of oil andgas, which, by analysis of geosciences and engineering data, canbe estimated with reasonable certainty to be economicallyproducible, from a given date forward, from known reservoirs, andunder existing economic conditions, operating methods, andgovernment regulations, prior to the time at which contractsproviding the right to operate expire, unless evidence indicatesthat renewal is reasonably certain, regardless of whetherdeterministic or probabilistic methods are used for theestimation. The project to extract the hydrocarbons must havecommenced or the operator must be reasonably certain that it willcommence the project within a reasonable time. Existing economicconditions include prices and costs at which economicproducibility from a reservoir is to be determined. The priceshall be the average price during the 12-month period prior tothe ending date of the period covered by the report, determinedas an unweighted arithmetic average of the first-day-of-the-monthprice for each month within such period, unless prices aredefined by contractual arrangements, excluding escalations basedupon future conditions. In 2012, the average price for the markerBrent crude oil was $111 per barrel. Net proved reserves excludeinterests and royalties owned by others. Proved reserves areclassified as either developed or undeveloped. Developed oil andgas reserves are reserves that can be expected to be recoveredthrough existing wells with existing equipment and operatingmethods or in which the cost of the required equipment isrelatively minor compared to the cost of a new well. Undevelopedoil and gas reserves are reserves of any category that areexpected to be recovered from new wells on undrilled acreage, orfrom existing wells where a relatively major expenditure isrequired for recompletion.

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Since 1991, Eni has requested qualified independent oilengineering companies to carry out an independent evaluation20of part of its proved reserves on a rotational basis. Thedescription of qualifications of the person primarily responsibleof the reserve audit is included in the third party audit report.

In the preparation of their reports, independent evaluatorsrely, without independent verification, upon data furnished byEni with respect to property interest, production, current costof operation and development, sale agreements, prices and otherfactual information and data that were accepted as represented bythe independent evaluators. These data, equally used by Eni inits internal process, include logs, directional surveys, core andPVT (Pressure Volume Temperature) analysis, maps, oil/gas/waterproduction/injection data of wells, reservoir studies andtechnical analysis relevant to field performance, long-termdevelopment plans, future capital and operating costs. In orderto calculate the economic value of Eni equity reserves, actualprices applicable to hydrocarbon sales, price adjustmentsrequired by applicable contractual arrangements, and otherpertinent information are provided. In 2012, Ryder Scott Companyand DeGolyer and MacNaughton21 provided an independentevaluation of almost 33% of Eni’s total proved reserves asof December 31, 201222, confirming, as in previousyears, the reasonableness of Eni’s internal evaluations. Inthe three year period from 2010 to 2012, 92% of Eni’s totalproved reserves were subject to independent evaluation. As ofDecember 31, 2012, the principal properties not subjected toindependent evaluation in the last three years are Bouri and BuAttifel (Libya) and M’Boundi (Congo).

Eni operates under Production Sharing Agreements, PSAs, inseveral of the foreign jurisdictions where it has oil and gasexploration and production activities. Reserves of oil andnatural gas to which Eni is entitled under PSA arrangements areshown in accordance with Eni’s economic interest in thevolumes of oil and natural gas estimated to be recoverable infuture years. Such reserves include estimated quantitiesallocated to Eni for recovery of costs, income taxes owed by Enibut settled by its joint venture partners (which are state-ownedentities) out of Eni’s share of production and Eni’snet equity share after cost recovery. Proved oil and gas reservesassociated with PSAs represented 55%, 49% and 47% of total provedreserves as of December 31, 2010, 2011 and 2012, respectively, onan oil-equivalent basis. Similar effects as PSAs apply to serviceand "buy-back" contracts; proved reserves associatedwith such contracts represented 3%, 1% and 2% of total provedreserves on an oil-equivalent basis as of December 31, 2010, 2011and 2012, respectively.

Oil and gas reserve quantities include: (i) oil and naturalgas quantities in excess of cost recovery which the company hasan obligation to purchase under certain PSAs with governments orauthorities, whereby the Company serves as producer of reserves.Reserve volumes associated with oil and gas deriving from suchobligation represent 0.6%, 0.8% and 1.1% of total proved reservesas of December 31, 2010, 2011 and 2012, respectively, on an oilequivalent basis; (ii) volumes of natural gas used for ownconsumption; (iii) and the quantities of hydrocarbons related tothe Angola LNG plant.

Numerous uncertainties are inherent in estimating quantitiesof proved reserves, in projecting future productions anddevelopment expenditures. The accuracy of any reserve estimate isa function of the quality of available data and engineering andgeological interpretation and evaluation. The results ofdrilling, testing and production after the date of the estimatemay require substantial upward or downward revisions. Inaddition, changes in oil and natural gas prices have an effect onthe quantities of Eni’s proved reserves since estimates ofreserves are based on prices and costs relevant to the date whensuch estimates are made. Consequently, the evaluation of reservescould also significantly differ from actual oil and natural gasvolumes that will be produced.

The following table presents yearly changes in estimatedproved reserves, developed and undeveloped, of crude oil(including condensate and natural gas liquids) and natural gas asof December 31, 2010, 2011 and 2012.

 

 

 

 

----

| (20) |   i | From 1991 to        2002 DeGolyer and McNaughton, from 2003 also Ryder Scott.                                                     |
|------|---------------|-----------------------------------------------------------------------------------------------------------------------------------|
| (21) |   i | The reports        of independent engineers are available on Eni website        eni.com, section Publications/Annual Report 2012. |

| (22) |  i  | Including        reserves of equity-accounted entities. |
|------|---------------|---------------------------------------------------------|

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*Crude oil (including condensate and natural gas liquids)*

| (mmBBL) |   | **Italy** |   | **Rest of Europe** |   | **North Africa** |   | **Sub-Saharan Africa** |   | **Kazakhstan** |   | **Rest of Asia** |   | **Americas** |   | **Australia and Oceania** |   | **Total** |
|---------|--------|-----------|--------|--------------------|--------|------------------|--------|------------------------|--------|----------------|--------|------------------|--------|--------------|--------|---------------------------|--------|-----------|
|    |   |           |   |                    |   |                  |   |                        |   |                |   |                  |   |              |   |                           |   |           |

| **2010**                                                              |   |    |   |   |    |   |   |    |   |   |    |   |   |    |   |   |    |   |   |    |   |   |   |   |   |      |   |
|-----------------------------------------------------------------------|--------|---------|--------|--------|---------|--------|--------|---------|--------|--------|---------|--------|--------|---------|--------|--------|---------|--------|--------|---------|--------|--------|--------|--------|--------|-----------|--------|
| **Reserves        of consolidated subsidiaries 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*   |   |
| *of which:**undeveloped*                                              |   | *92*    |   |   | *133*   |   |   | *236*   |   |   | *226*   |   |   | *558*   |   |   | *49*    |   |   | *73*    |   |   | *9*    |   |   | *1,376*   |   |
| Purchase of minerals in place                                         |   |    |   |   |    |   |   |    |   |   |    |   |   |    |   |   |    |   |   |    |   |   |   |   |   |      |   |
| Revisions        of minerals in place                                 |   | 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 of consolidated subsidiaries at        December 31, 2010** |   | **248** |   |   | **349** |   |   | **978** |   |   | **750** |   |   | **788** |   |   | **139** |   |   | **134** |   |   | **29** |   |   | **3,415** |   |
| **Reserves        of equity-accounted entities at December 31, 2009** |   |    |   |   |    |   |   | **13**  |   |   | **7**   |   |   |    |   |   | **50**  |   |   | **16**  |   |   |   |   |   | **86**    |   |
| *of which: developed*                                                 |   |    |   |   |    |   |   | *10*    |   |   | *4*     |   |   |    |   |   | *7*     |   |   | *13*    |   |   |   |   |   | *34*      |   |
| *of which:**undeveloped*                                              |   |    |   |   |    |   |   | *3*     |   |   | *3*     |   |   |    |   |   | *43*    |   |   | *3*     |   |   |   |   |   | *52*      |   |
| Purchase of minerals in place                                         |   |    |   |   |    |   |   |    |   |   |    |   |   |    |   |   |    |   |   |    |   |   |   |   |   |      |   |
| Revisions        of minerals in place                                 |   |    |   |   |    |   |   | 8       |   |   |    |   |   |    |   |   | (6      | )      |   | (2      | )      |   |   |   |   |      |   |
| Improved recovery                                                     |   |    |   |   |    |   |   |    |   |   |    |   |   |    |   |   |    |   |   | 12      |   |   |   |   |   | 12        |   |
| Extensions        and discoveries                                     |   |    |   |   |    |   |   |    |   |   |    |   |   |    |   |   |    |   |   | 117     |   |   |   |   |   | 117       |   |
| Production                                                            |   |    |   |   |    |   |   | (2      | )      |   | (1      | )      |   |    |   |   |    |   |   | (4      | )      |   |   |   |   | (7        | )      |
| Sales of        minerals in place                                     |   |    |   |   |    |   |   |    |   |   |    |   |   |    |   |   |    |   |   |    |   |   |   |   |   |      |   |
| **Reserves of equity-accounted entities 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       |   |
| **2011**                                                              |   |    |   |   |    |   |   |    |   |   |    |   |   |    |   |   |    |   |   |    |   |   |   |   |   |      |   |
| **Reserves        of consolidated subsidiaries 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*   |   |
| *of which:**undeveloped*                                              |   | *65*    |   |   | *142*   |   |   | *322*   |   |   | *217*   |   |   | *537*   |   |   | *100*   |   |   | *72*    |   |   | *9*    |   |   | *1,464*   |   |
| Purchase of minerals in place                                         |   |    |   |   |    |   |   |    |   |   |    |   |   |    |   |   |    |   |   |    |   |   |   |   |   |      |   |
| Revisions        of minerals in place                                 |   | 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 of consolidated subsidiaries at        December 31, 2011** |   | **259** |   |   | **372** |   |   | **917** |   |   | **670** |   |   | **653** |   |   | **106** |   |   | **132** |   |   | **25** |   |   | **3,134** |   |
| **Reserves        of equity-accounted entities at December 31, 2010** |   |    |   |   |    |   |   | **19**  |   |   | **6**   |   |   |    |   |   | **44**  |   |   | **139** |   |   |   |   |   | **208**   |   |
| *of which: developed*                                                 |   |    |   |   |    |   |   | *18*    |   |   | *4*     |   |   |    |   |   | *5*     |   |   | *25*    |   |   |   |   |   | *52*      |   |
| *of which:**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 of equity-accounted entities 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       |   |
|                                                                  |   |         |        |   |         |        |   |         |        |   |         |        |   |         |        |   |         |        |   |         |        |   |        |        |   |           |        |

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##### Table of Contents

| (mmBBL) |   | **Italy** |   | **Rest of Europe** |   | **North Africa** |   | **Sub-Saharan Africa** |   | **Kazakhstan** |   | **Rest of Asia** |   | **Americas** |   | **Australia and Oceania** |   | **Total** |
|---------|--------|-----------|--------|--------------------|--------|------------------|--------|------------------------|--------|----------------|--------|------------------|--------|--------------|--------|---------------------------|--------|-----------|
|    |   |           |   |                    |   |                  |   |                        |   |                |   |                  |   |              |   |                           |   |           |

| **2012**                                                              |   |    |   |   |    |   |   |    |   |   |    |   |   |    |   |   |    |   |   |    |   |   |   |   |   |      |   |
|-----------------------------------------------------------------------|--------|---------|--------|--------|---------|--------|--------|---------|--------|--------|---------|--------|--------|---------|--------|--------|---------|--------|--------|---------|--------|--------|--------|--------|--------|-----------|--------|
| **Reserves        of consolidated subsidiaries at December 31, 2011** |   | **259** |   |   | **372** |   |   | **917** |   |   | **670** |   |   | **653** |   |   | **106** |   |   | **132** |   |   | **25** |   |   | **3,134** |   |
| *of which: developed*                                                 |   | *184*   |   |   | *195*   |   |   | *622*   |   |   | *483*   |   |   | *215*   |   |   | *34*    |   |   | *92*    |   |   | *25*   |   |   | *1,850*   |   |
| *of which:**undeveloped*                                              |   | *75*    |   |   | *177*   |   |   | *295*   |   |   | *187*   |   |   | *438*   |   |   | *72*    |   |   | *40*    |   |   |   |   |   | *1,284*   |   |
| Purchase of minerals in place                                         |   |    |   |   |    |   |   |    |   |   |    |   |   |    |   |   |    |   |   |    |   |   |   |   |   |      |   |
| Revisions        of previous estimates                                |   | (9      | )      |   | 10      |   |   | 55      |   |   | 26      |   |   | 62      |   |   | (9      | )      |   | 40      |   |   | 6      |   |   | 181       |   |
| Improved recovery                                                     |   |    |   |   | 1       |   |   | 20      |   |   | 7       |   |   |    |   |   |    |   |   |    |   |   |   |   |   | 28        |   |
| Extensions        and discoveries                                     |   |    |   |   | 3       |   |   | 10      |   |   | 65      |   |   |    |   |   |    |   |   | 8       |   |   |   |   |   | 86        |   |
| Production                                                            |   | (23     | )      |   | (35     | )      |   | (98     | )      |   | (90     | )      |   | (22     | )      |   | (15     | )      |   | (26     | )      |   | (7     | )      |   | (316      | )      |
| Sales of        minerals in place                                     |   |    |   |   |    |   |   |    |   |   | (6      | )      |   | (23     | )      |   |    |   |   |    |   |   |   |   |   | (29       | )      |
| **Reserves of consolidated subsidiaries at        December 31, 2012** |   | **227** |   |   | **351** |   |   | **904** |   |   | **672** |   |   | **670** |   |   | **82**  |   |   | **154** |   |   | **24** |   |   | **3,084** |   |
| **Reserves        of equity-accounted entities at December 31, 2011** |   |    |   |   |    |   |   | **17**  |   |   | **22**  |   |   |    |   |   | **110** |   |   | **151** |   |   |   |   |   | **300**   |   |
| *of which: developed*                                                 |   |    |   |   |    |   |   | *16*    |   |   | *4*     |   |   |    |   |   |    |   |   | *25*    |   |   |   |   |   | *45*      |   |
| *of which:**undeveloped*                                              |   |    |   |   |    |   |   | *1*     |   |   | *18*    |   |   |    |   |   | *110*   |   |   | *126*   |   |   |   |   |   | *255*     |   |
| Purchase of minerals in place                                         |   |    |   |   |    |   |   |    |   |   |    |   |   |    |   |   |    |   |   |    |   |   |   |   |   |      |   |
| Revisions        of previous estimates                                |   |    |   |   |    |   |   |    |   |   | (1      | )      |   |    |   |   | 2       |   |   |    |   |   |   |   |   | 1         |   |
| Improved recovery                                                     |   |    |   |   |    |   |   |    |   |   |    |   |   |    |   |   |    |   |   |    |   |   |   |   |   |      |   |
| Extensions        and discoveries                                     |   |    |   |   |    |   |   | 1       |   |   |    |   |   |    |   |   | 3       |   |   |    |   |   |   |   |   | 4         |   |
| Production                                                            |   |    |   |   |    |   |   | (1      | )      |   | (1      | )      |   |    |   |   | (1      | )      |   | (4      | )      |   |   |   |   | (7        | )      |
| Sales of        minerals in place                                     |   |    |   |   |    |   |   |    |   |   | (4      | )      |   |    |   |   |    |   |   | (28     | )      |   |   |   |   | (32       | )      |
| **Reserves of equity-accounted entities at        December 31, 2012** |   |    |   |   |    |   |   | **17**  |   |   | **16**  |   |   |    |   |   | **114** |   |   | **119** |   |   |   |   |   | **266**   |   |
| **Reserves        at December 31, 2012**                              |   | **227** |   |   | **351** |   |   | **921** |   |   | **688** |   |   | **670** |   |   | **196** |   |   | **273** |   |   | **24** |   |   | **3,350** |   |
| **Developed**                                                         |   | **165** |   |   | **180** |   |   | **601** |   |   | **456** |   |   | **203** |   |   | **49**  |   |   | **128** |   |   | **24** |   |   | **1,806** |   |
| Consolidated        subsidiaries                                      |   | 165     |   |   | 180     |   |   | 584     |   |   | 456     |   |   | 203     |   |   | 41      |   |   | 109     |   |   | 24     |   |   | 1,762     |   |
| Equity-accounted entities                                             |   |    |   |   |    |   |   | 17      |   |   |    |   |   |    |   |   | 8       |   |   | 19      |   |   |   |   |   | 44        |   |
| **Undeveloped**                                                       |   | **62**  |   |   | **171** |   |   | **320** |   |   | **232** |   |   | **467** |   |   | **147** |   |   | **145** |   |   |   |   |   | **1,544** |   |
| Consolidated subsidiaries                                             |   | 62      |   |   | 171     |   |   | 320     |   |   | 216     |   |   | 467     |   |   | 41      |   |   | 45      |   |   |   |   |   | 1,322     |   |
| Equity-accounted        entities                                      |   |    |   |   |    |   |   |    |   |   | 16      |   |   |    |   |   | 106     |   |   | 100     |   |   |   |   |   | 222       |   |
|                                                                  |   |         |        |   |         |        |   |         |        |   |         |        |   |         |        |   |         |        |   |         |        |   |        |        |   |           |        |

|                 |
|----------------------|
| *Natural gas*****(a) |

| (BCF)  |   | **Italy******(b) |   | **Rest of Europe** |   | **North Africa** |   | **Sub-Saharan Africa** |   | **Kazakhstan** |   | **Rest of Asia****** |   | **Americas** |   | **Australia and Oceania** |   | **Total** |
|--------|--------|------------------|--------|--------------------|--------|------------------|--------|------------------------|--------|----------------|--------|----------------------|--------|--------------|--------|---------------------------|--------|-----------|
|   |   |                  |   |                    |   |                  |   |                        |   |                |   |                      |   |              |   |                           |   |           |

| **2010**                                                              |   |      |   |   |      |   |   |      |   |   |      |   |   |      |   |   |      |   |   |    |   |   |    |   |   |       |   |
|-----------------------------------------------------------------------|--------|-----------|--------|--------|-----------|--------|--------|-----------|--------|--------|-----------|--------|--------|-----------|--------|--------|-----------|--------|--------|---------|--------|--------|---------|--------|--------|------------|--------|
| **Reserves        of consolidated subsidiaries 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*   |   |
| *of which:**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 of consolidated subsidiaries at        December 31, 2010** |   | **2,644** |   |   | **1,401** |   |   | **6,207** |   |   | **2,127** |   |   | **1,874** |   |   | **871**   |   |   | **530** |   |   | **544** |   |   | **16,198** |   |
| **Reserves        of equity-accounted entities at December 31, 2009** |   |      |   |   |      |   |   | **14**    |   |   | **85**    |   |   |      |   |   | **1,487** |   |   | **2**   |   |   |    |   |   | **1,588**  |   |
| *of which: developed*                                                 |   |      |   |   |      |   |   | *12*      |   |   | *5*       |   |   |      |   |   | *217*     |   |   |    |   |   |    |   |   | *234*      |   |
| *of which:**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 of equity-accounted entities 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      |   |
|                                                                  |   |           |        |   |           |        |   |           |        |   |           |        |   |           |        |   |           |        |   |         |        |   |         |        |   |            |        |

|    |    |                                                                                                                          |
|--------------|--------------|------------------------------------------------------------------------------------------------------------------------------------|
| (a)          |    | Values lower        than 1 BCF are not disclosed in this table.                                                                    |
| (b)          |    | Including,        approximately 769 and 767 BCF of natural gas held in        storage at December 31, 2009 and 2010, respectively. |

F-122

----

##### Table of Contents

| (BCF)  |   | **Italy******(b) |   | **Rest of Europe** |   | **North Africa** |   | **Sub-Saharan Africa** |   | **Kazakhstan** |   | **Rest of Asia** |   | **Americas** |   | **Australia and Oceania** |   | **Total** |
|--------|--------|------------------|--------|--------------------|--------|------------------|--------|------------------------|--------|----------------|--------|------------------|--------|--------------|--------|---------------------------|--------|-----------|
|   |   |                  |   |                    |   |                  |   |                        |   |                |   |                  |   |              |   |                           |   |           |

| **2011**                                                              |   |      |   |   |      |   |   |      |   |   |      |   |   |      |   |   |      |   |   |      |   |   |    |   |   |       |   |
|-----------------------------------------------------------------------|--------|-----------|--------|--------|-----------|--------|--------|-----------|--------|--------|-----------|--------|--------|-----------|--------|--------|-----------|--------|--------|-----------|--------|--------|---------|--------|--------|------------|--------|
| **Reserves        of consolidated subsidiaries 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*   |   |
| *of which:**undeveloped*                                              |   | *583*     |   |   | *298*     |   |   | *3,107*   |   |   | *577*     |   |   | *253*     |   |   | *311*     |   |   | *99*      |   |   | *5*     |   |   | *5,233*    |   |
| Purchase of minerals in place                                         |   | 9         |   |   |      |   |   |      |   |   |      |   |   |      |   |   |      |   |   |      |   |   |    |   |   | 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 of consolidated subsidiaries at        December 31, 2011** |   | **2,491** |   |   | **1,425** |   |   | **6,190** |   |   | **1,949** |   |   | **1,648** |   |   | **685**   |   |   | **590**   |   |   | **604** |   |   | **15,582** |   |
| **Reserves        of equity-accounted entities at December 31, 2010** |   |      |   |   |      |   |   | **24**    |   |   | **118**   |   |   |      |   |   | **1,520** |   |   | **22**    |   |   |    |   |   | **1,684**  |   |
| *of which: developed*                                                 |   |      |   |   |      |   |   | *22*      |   |   | *4*       |   |   |      |   |   | *214*     |   |   | *6*       |   |   |    |   |   | *246*      |   |
| *of which:**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 of equity-accounted entities 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      |   |
| **2012**                                                              |   |      |   |   |      |   |   |      |   |   |      |   |   |      |   |   |      |   |   |      |   |   |    |   |   |       |   |
| **Reserves        of consolidated subsidiaries at December 31, 2011** |   | **2,491** |   |   | **1,425** |   |   | **6,190** |   |   | **1,949** |   |   | **1,648** |   |   | **685**   |   |   | **590**   |   |   | **604** |   |   | **15,582** |   |
| *of which: developed*                                                 |   | *1,977*   |   |   | *995*     |   |   | *3,070*   |   |   | *1,437*   |   |   | *1,480*   |   |   | *528*     |   |   | *385*     |   |   | *491*   |   |   | *10,363*   |   |
| *of which:**undeveloped*                                              |   | *514*     |   |   | *430*     |   |   | *3,120*   |   |   | *512*     |   |   | *168*     |   |   | *157*     |   |   | *205*     |   |   | *113*   |   |   | *5,219*    |   |
| Purchase of minerals in place                                         |   |      |   |   |      |   |   |      |   |   |      |   |   |      |   |   |      |   |   |      |   |   |    |   |   |       |   |
| Revisions        of previous estimates                                |   | 154       |   |   | 45        |   |   |      |   |   | 284       |   |   | 141       |   |   | 18        |   |   | (41       | )      |   | 5       |   |   | 606        |   |
| Improved recovery                                                     |   |      |   |   |      |   |   |      |   |   |      |   |   |      |   |   |      |   |   |      |   |   |    |   |   |       |   |
| Extensions        and discoveries                                     |   | 24        |   |   | 15        |   |   | 1         |   |   | 113       |   |   | 469       |   |   | 2         |   |   | 4         |   |   |    |   |   | 628        |   |
| Production                                                            |   | (254      | )      |   | (168      | )      |   | (633      | )      |   | (196      | )      |   | (81       | )      |   | (143      | )      |   | (104      | )      |   | (37     | )      |   | (1,616     | )      |
| Sales of        minerals in place                                     |   | (782      | )      |   |      |   |   |      |   |   | (89       | )      |   | (139      | )      |   |      |   |   |      |   |   |    |   |   | (1,010     | )      |
| **Reserves of consolidated subsidiaries at        December 31, 2012** |   | **1,633** |   |   | **1,317** |   |   | **5,558** |   |   | **2,061** |   |   | **2,038** |   |   | **562**   |   |   | **449**   |   |   | **572** |   |   | **14,190** |   |
| **Reserves        of equity-accounted entities at December 31, 2011** |   |      |   |   | **2**     |   |   | **20**    |   |   | **338**   |   |   |      |   |   | **3,033** |   |   | **1,307** |   |   |    |   |   | **4,700**  |   |
| *of which: developed*                                                 |   |      |   |   |      |   |   | *17*      |   |   | *4*       |   |   |      |   |   | *24*      |   |   | *8*       |   |   |    |   |   | *53*       |   |
| *of which:**undeveloped*                                              |   |      |   |   | *2*       |   |   | *3*       |   |   | *334*     |   |   |      |   |   | *3,009*   |   |   | *1,299*   |   |   |    |   |   | *4,647*    |   |
| Purchase of minerals in place                                         |   |      |   |   |      |   |   |      |   |   |      |   |   |      |   |   |      |   |   |      |   |   |    |   |   |       |   |
| Revisions        of previous estimates                                |   |      |   |   | (2        | )      |   | (2        | )      |   | 3         |   |   |      |   |   | 1         |   |   | 1,340     |   |   |    |   |   | 1,340      |   |
| Improved recovery                                                     |   |      |   |   |      |   |   |      |   |   |      |   |   |      |   |   |      |   |   |      |   |   |    |   |   |       |   |
| Extensions        and discoveries                                     |   |      |   |   |      |   |   |      |   |   | 17        |   |   |      |   |   | 38        |   |   | 739       |   |   |    |   |   | 794        |   |
| Production                                                            |   |      |   |   |      |   |   | (2        | )      |   | (2        | )      |   |      |   |   | (29       | )      |   |      |   |   |    |   |   | (33        | )      |
| Sales of        minerals in place                                     |   |      |   |   |      |   |   |      |   |   | (3        | )      |   |      |   |   |      |   |   | (31       | )      |   |    |   |   | (34        | )      |
| **Reserves of equity-accounted entities at        December 31, 2012** |   |      |   |   |      |   |   | **16**    |   |   | **353**   |   |   |      |   |   | **3,043** |   |   | **3,355** |   |   |    |   |   | **6,767**  |   |
| **Reserves        at December 31, 2012**                              |   | **1,633** |   |   | **1,317** |   |   | **5,574** |   |   | **2,414** |   |   | **2,038** |   |   | **3,605** |   |   | **3,804** |   |   | **572** |   |   | **20,957** |   |
| **Developed**                                                         |   | **1,325** |   |   | **925**   |   |   | **2,736** |   |   | **1,429** |   |   | **1,401** |   |   | **774**   |   |   | **340**   |   |   | **459** |   |   | **9,389**  |   |
| Consolidated        subsidiaries                                      |   | 1,325     |   |   | 925       |   |   | 2,720     |   |   | 1,429     |   |   | 1,401     |   |   | 372       |   |   | 334       |   |   | 459     |   |   | 8,965      |   |
| Equity-accounted entities                                             |   |      |   |   |      |   |   | 16        |   |   |      |   |   |      |   |   | 402       |   |   | 6         |   |   |    |   |   | 424        |   |
| **Undeveloped**                                                       |   | **308**   |   |   | **392**   |   |   | **2,838** |   |   | **985**   |   |   | **637**   |   |   | **2,831** |   |   | **3,464** |   |   | **113** |   |   | **11,568** |   |
| Consolidated subsidiaries                                             |   | 308       |   |   | 392       |   |   | 2,838     |   |   | 632       |   |   | 637       |   |   | 190       |   |   | 115       |   |   | 113     |   |   | 5,225      |   |
| Equity-accounted        entities                                      |   |      |   |   |      |   |   |      |   |   | 353       |   |   |      |   |   | 2,641     |   |   | 3,349     |   |   |    |   |   | 6,343      |   |
|                                                                  |   |           |        |   |           |        |   |           |        |   |           |        |   |           |        |   |           |        |   |           |        |   |         |        |   |            |        |

|    |    |                                                                                                                          |
|--------------|--------------|------------------------------------------------------------------------------------------------------------------------------------|
| (b)          |    | Including,        approximately 767 and 767 BCF of natural gas held in        storage at December 31, 2010 and 2011, respectively. |

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*Standardized measure of discounted future net cash flows*Estimated future cash inflows represent the revenues that wouldbe received from production and are determined by applying yearend the average prices during the years ended.

Future price changes are considered only to the extentprovided by contractual arrangements. Estimated futuredevelopment and production costs are determined by estimating theexpenditures to be incurred in developing and producing theproved reserves at the end of the year. Neither the effects ofprice and cost escalations nor expected future changes intechnology and operating practices have been considered.

The standardized measure is calculated as the excess of futurecash inflows from proved reserves less future costs of producingand developing the reserves, future income taxes and a yearly 10%discount factor.

Future production costs include the estimated expendituresrelated to the production of proved reserves plus any productiontaxes without consideration of future inflation. Futuredevelopment costs include the estimated costs of drillingdevelopment wells and installation of production facilities, plusthe net costs associated with dismantlement and abandonment ofwells and facilities, under the assumption that year-end costscontinue without considering future inflation. Future incometaxes were calculated in accordance with the tax laws of theCountries in which Eni operates.

The standardized measure of discounted future net cash flows,related to the preceding proved oil and gas reserves, iscalculated in accordance with the requirements of FASB ExtractiveActivities - Oil & Gas (Topic 932). The standardized measuredoes not purport to reflect realizable values or fair marketvalue of Eni’s proved reserves. An estimate of fair valuewould also take into account, among other things, hydrocarbonresources other than proved reserves, anticipated changes infuture prices and costs and a discount factor representative ofthe risks inherent in the oil and gas exploration and productionactivity.

The standardized measure of discounted future net cash flowsby geographical area consists of the following: 

| (euro        million) |   | **Italy** |   | **Rest of Europe** |   | **North Africa** |   | **Sub-Saharan Africa** |   | **Kazakhstan** |   | **Rest of Asia** |   | **Americas** |   | **Australia and Oceania** |   | **Total** |
|-----------------------|--------|-----------|--------|--------------------|--------|------------------|--------|------------------------|--------|----------------|--------|------------------|--------|--------------|--------|---------------------------|--------|-----------|
|                  |   |           |   |                    |   |                  |   |                        |   |                |   |                  |   |              |   |                           |   |           |

| **December 31, 2010**                                                                                                        |   |       |   |   |       |   |   |       |   |   |       |   |   |       |   |   |      |   |   |      |   |   |      |   |   |        |   |
|------------------------------------------------------------------------------------------------------------------------------|--------|------------|--------|--------|------------|--------|--------|------------|--------|--------|------------|--------|--------|------------|--------|--------|-----------|--------|--------|-----------|--------|--------|-----------|--------|--------|-------------|--------|
| **Consolidated        subsidiaries**                                                                                         |   |       |   |   |       |   |   |       |   |   |       |   |   |       |   |   |      |   |   |      |   |   |      |   |   |        |   |
| Future cash inflows                                                                                                          |   | 30,047     |   |   | 27,973     |   |   | 86,728     |   |   | 45,790     |   |   | 41,053     |   |   | 9,701     |   |   | 8,546     |   |   | 3,846     |   |   | 253,684     |   |
| Future        production costs                                                                                               |   | (4,865     | )      |   | (7,201     | )      |   | (12,896    | )      |   | (13,605    | )      |   | (6,686     | )      |   | (3,201    | )      |   | (2,250    | )      |   | (611      | )      |   | (51,315     | )      |
| Future development and abandonment costs                                                                                     |   | (4,499     | )      |   | (6,491     | )      |   | (8,827     | )      |   | (5,310     | )      |   | (5,192     | )      |   | (3,489    | )      |   | (1,713    | )      |   | (221      | )      |   | (35,742     | )      |
| **Future        net inflow before income tax**                                                                               |   | **20,683** |   |   | **14,281** |   |   | **65,005** |   |   | **26,875** |   |   | **29,175** |   |   | **3,011** |   |   | **4,583** |   |   | **3,014** |   |   | **166,627** |   |
| Future income tax                                                                                                            |   | (6,289     | )      |   | (9,562     | )      |   | (37,108    | )      |   | (14,468    | )      |   | (7,213     | )      |   | (872      | )      |   | (910      | )      |   | (805      | )      |   | (77,227     | )      |
| **Future        net cash flows**                                                                                             |   | **14,394** |   |   | **4,719**  |   |   | **27,897** |   |   | **12,407** |   |   | **21,962** |   |   | **2,139** |   |   | **3,673** |   |   | **2,209** |   |   | **89,400**  |   |
| 10% discount factor                                                                                                          |   | (7,224     | )      |   | (1,608     | )      |   | (13,117    | )      |   | (3,884     | )      |   | (14,829    | )      |   | (419      | )      |   | (1,392    | )      |   | (850      | )      |   | (43,323     | )      |
| **Standardized        measure of discounted future net cash flows of        consolidated subsidiaries at December 31, 2010** |   | **7,170**  |   |   | **3,111**  |   |   | **14,780** |   |   | **8,523**  |   |   | **7,133**  |   |   | **1,720** |   |   | **2,281** |   |   | **1,359** |   |   | **46,077**  |   |
| **Equity-accounted entities**                                                                                                |   |       |   |   |       |   |   |       |   |   |       |   |   |       |   |   |      |   |   |      |   |   |      |   |   |        |   |
| Future        cash inflows                                                                                                   |   |       |   |   |       |   |   | 498        |   |   | 750        |   |   |       |   |   | 2,893     |   |   | 7,363     |   |   |      |   |   | 11,504      |   |
| Future production costs                                                                                                      |   |       |   |   |       |   |   | (251       | )      |   | (98        | )      |   |       |   |   | (972      | )      |   | (2,676    | )      |   |      |   |   | (3,997      | )      |
| Future        development and abandonment costs                                                                              |   |       |   |   |       |   |   | (35        | )      |   | (128       | )      |   |       |   |   | (879      | )      |   | (1,188    | )      |   |      |   |   | (2,230      | )      |
| **Future net inflow before income tax**                                                                                      |   |       |   |   |       |   |   | **212**    |   |   | **524**    |   |   |       |   |   | **1,042** |   |   | **3,499** |   |   |      |   |   | **5,277**   |   |
| Future        income tax                                                                                                     |   |       |   |   |       |   |   | (2         | )      |   | (69        | )      |   |       |   |   | (338      | )      |   | (2,145    | )      |   |      |   |   | (2,554      | )      |
| **Future net cash flows**                                                                                                    |   |       |   |   |       |   |   | **210**    |   |   | **455**    |   |   |       |   |   | **704**   |   |   | **1,354** |   |   |      |   |   | **2,723**   |   |
| 10%        discount factor                                                                                                   |   |       |   |   |       |   |   | (113       | )      |   | (160       | )      |   |       |   |   | (515      | )      |   | (852      | )      |   |      |   |   | (1,640      | )      |
| **Standardized measure of discounted future net        cash flows of equity-accounted entities at December 31,        2010** |   |       |   |   |       |   |   | **97**     |   |   | **295**    |   |   |       |   |   | **189**   |   |   | **502**   |   |   |      |   |   | **1,083**   |   |
| **Total        consolidated subsidiaries and equity-accounted entities        at December 31, 2010**                         |   | **7,170**  |   |   | **3,111**  |   |   | **14,877** |   |   | **8,818**  |   |   | **7,133**  |   |   | **1,909** |   |   | **2,783** |   |   | **1,359** |   |   | **47,160**  |   |
|                                                                                                                         |   |            |        |   |            |        |   |            |        |   |            |        |   |            |        |   |           |        |   |           |        |   |           |        |   |             |        |

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##### Table of Contents

| (euro        million) |   | **Italy** |   | **Rest of Europe** |   | **North Africa** |   | **Sub-Saharan Africa** |   | **Kazakhstan** |   | **Rest of Asia** |   | **Americas** |   | **Australia and Oceania** |   | **Total** |
|-----------------------|--------|-----------|--------|--------------------|--------|------------------|--------|------------------------|--------|----------------|--------|------------------|--------|--------------|--------|---------------------------|--------|-----------|
|                  |   |           |   |                    |   |                  |   |                        |   |                |   |                  |   |              |   |                           |   |           |

| **December 31, 2011**                                                                                                        |   |       |   |   |       |   |   |       |   |   |       |   |   |       |   |   |      |   |   |       |   |   |      |   |   |        |   |
|------------------------------------------------------------------------------------------------------------------------------|--------|------------|--------|--------|------------|--------|--------|------------|--------|--------|------------|--------|--------|------------|--------|--------|-----------|--------|--------|------------|--------|--------|-----------|--------|--------|-------------|--------|
| **Consolidated        subsidiaries**                                                                                         |   |       |   |   |       |   |   |       |   |   |       |   |   |       |   |   |      |   |   |       |   |   |      |   |   |        |   |
| Future cash inflows                                                                                                          |   | 38,200     |   |   | 37,974     |   |   | 109,825    |   |   | 59,263     |   |   | 50,443     |   |   | 10,403    |   |   | 11,980     |   |   | 5,185     |   |   | 323,273     |   |
| Future        production costs                                                                                               |   | (5,740     | )      |   | (7,666     | )      |   | (17,627    | )      |   | (15,191    | )      |   | (7,845     | )      |   | (3,852    | )      |   | (2,687     | )      |   | (813      | )      |   | (61,421     | )      |
| Future development and abandonment costs                                                                                     |   | (4,712     | )      |   | (7,059     | )      |   | (9,639     | )      |   | (5,734     | )      |   | (3,705     | )      |   | (2,842    | )      |   | (1,836     | )      |   | (224      | )      |   | (35,751     | )      |
| **Future        net inflow before income tax**                                                                               |   | **27,748** |   |   | **23,249** |   |   | **82,559** |   |   | **38,338** |   |   | **38,893** |   |   | **3,709** |   |   | **7,457**  |   |   | **4,148** |   |   | **226,101** |   |
| Future income tax                                                                                                            |   | (9,000     | )      |   | (15,912    | )      |   | (46,676    | )      |   | (23,075    | )      |   | (9,866     | )      |   | (1,124    | )      |   | (2,474     | )      |   | (1,254    | )      |   | (109,381    | )      |
| **Future        net cash flows**                                                                                             |   | **18,748** |   |   | **7,337**  |   |   | **35,883** |   |   | **15,263** |   |   | **29,027** |   |   | **2,585** |   |   | **4,983**  |   |   | **2,894** |   |   | **116,720** |   |
| 10% discount factor                                                                                                          |   | (9,692     | )      |   | (2,572     | )      |   | (16,191    | )      |   | (4,833     | )      |   | (17,599    | )      |   | (559      | )      |   | (1,914     | )      |   | (1,122    | )      |   | (54,482     | )      |
| **Standardized        measure of discounted future net cash flows of        consolidated subsidiaries at December 31, 2011** |   | **9,056**  |   |   | **4,765**  |   |   | **19,692** |   |   | **10,430** |   |   | **11,428** |   |   | **2,026** |   |   | **3,069**  |   |   | **1,772** |   |   | **62,238**  |   |
| **Equity-accounted entities**                                                                                                |   |       |   |   |       |   |   |       |   |   |       |   |   |       |   |   |      |   |   |       |   |   |      |   |   |        |   |
| Future        cash inflows                                                                                                   |   |       |   |   | 21         |   |   | 649        |   |   | 1,866      |   |   |       |   |   | 6,141     |   |   | 15,067     |   |   |      |   |   | 23,744      |   |
| Future production costs                                                                                                      |   |       |   |   | (5         | )      |   | (259       | )      |   | (471       | )      |   |       |   |   | (1,540    | )      |   | (4,598     | )      |   |      |   |   | (6,873      | )      |
| Future        development and abandonment costs                                                                              |   |       |   |   | (2         | )      |   | (36        | )      |   | (147       | )      |   |       |   |   | (1,247    | )      |   | (1,754     | )      |   |      |   |   | (3,186      | )      |
| **Future net inflow before income tax**                                                                                      |   |       |   |   | **14**     |   |   | **354**    |   |   | **1,248**  |   |   |       |   |   | **3,354** |   |   | **8,715**  |   |   |      |   |   | **13,685**  |   |
| Future        income tax                                                                                                     |   |       |   |   | (3         | )      |   | (3         | )      |   | (189       | )      |   |       |   |   | (824      | )      |   | (5,368     | )      |   |      |   |   | (6,387      | )      |
| **Future net cash flows**                                                                                                    |   |       |   |   | **11**     |   |   | **351**    |   |   | **1,059**  |   |   |       |   |   | **2,530** |   |   | **3,347**  |   |   |      |   |   | **7,298**   |   |
| 10%        discount factor                                                                                                   |   |       |   |   |       |   |   | (183       | )      |   | (475       | )      |   |       |   |   | (1,825    | )      |   | (2,155     | )      |   |      |   |   | (4,638      | )      |
| **Standardized measure of discounted future net        cash flows of equity-accounted entities at December 31,        2011** |   |       |   |   | **11**     |   |   | **168**    |   |   | **584**    |   |   |       |   |   | **705**   |   |   | **1,192**  |   |   |      |   |   | **2,660**   |   |
| **Total        consolidated subsidiaries and equity-accounted entities        at December 31, 2011**                         |   | **9,056**  |   |   | **4,776**  |   |   | **19,860** |   |   | **11,014** |   |   | **11,428** |   |   | **2,731** |   |   | **4,261**  |   |   | **1,772** |   |   | **64,898**  |   |
| **December 31, 2012**                                                                                                        |   |       |   |   |       |   |   |       |   |   |       |   |   |       |   |   |      |   |   |       |   |   |      |   |   |        |   |
| **Consolidated        subsidiaries**                                                                                         |   |       |   |   |       |   |   |       |   |   |       |   |   |       |   |   |      |   |   |       |   |   |      |   |   |        |   |
| Future cash inflows                                                                                                          |   | 30,308     |   |   | 38,912     |   |   | 108,343    |   |   | 56,978     |   |   | 53,504     |   |   | 7,881     |   |   | 11,008     |   |   | 4,957     |   |   | 311,891     |   |
| Future        production costs                                                                                               |   | (5,900     | )      |   | (8,190     | )      |   | (18,555    | )      |   | (14,844    | )      |   | (9,561     | )      |   | (2,854    | )      |   | (2,520     | )      |   | (921      | )      |   | (63,345     | )      |
| Future development and abandonment costs                                                                                     |   | (3,652     | )      |   | (7,511     | )      |   | (8,412     | )      |   | (6,873     | )      |   | (3,802     | )      |   | (1,974    | )      |   | (1,502     | )      |   | (197      | )      |   | (33,923     | )      |
| **Future        net inflow before income tax**                                                                               |   | **20,756** |   |   | **23,211** |   |   | **81,376** |   |   | **35,261** |   |   | **40,141** |   |   | **3,053** |   |   | **6,986**  |   |   | **3,839** |   |   | **214,623** |   |
| Future income tax                                                                                                            |   | (6,911     | )      |   | (15,063    | )      |   | (44,256    | )      |   | (21,348    | )      |   | (10,293    | )      |   | (903      | )      |   | (2,906     | )      |   | (1,181    | )      |   | (102,861    | )      |
| **Future        net cash flows**                                                                                             |   | **13,845** |   |   | **8,148**  |   |   | **37,120** |   |   | **13,913** |   |   | **29,848** |   |   | **2,150** |   |   | **4,080**  |   |   | **2,658** |   |   | **111,762** |   |
| 10% discount factor                                                                                                          |   | (5,519     | )      |   | (2,630     | )      |   | (16,539    | )      |   | (4,976     | )      |   | (17,943    | )      |   | (496      | )      |   | (1,337     | )      |   | (1,030    | )      |   | (50,470     | )      |
| **Standardized        measure of discounted future net cash flows of        consolidated subsidiaries at December 31, 2012** |   | **8,326**  |   |   | **5,518**  |   |   | **20,581** |   |   | **8,937**  |   |   | **11,905** |   |   | **1,654** |   |   | **2,743**  |   |   | **1,628** |   |   | **61,292**  |   |
| **Equity-accounted entities**                                                                                                |   |       |   |   |       |   |   |       |   |   |       |   |   |       |   |   |      |   |   |       |   |   |      |   |   |        |   |
| Future        cash inflows                                                                                                   |   |       |   |   | 1          |   |   | 658        |   |   | 3,594      |   |   |       |   |   | 6,689     |   |   | 18,132     |   |   |      |   |   | 29,074      |   |
| Future production costs                                                                                                      |   |       |   |   |       |   |   | (203       | )      |   | (576       | )      |   |       |   |   | (2,216    | )      |   | (5,003     | )      |   |      |   |   | (7,998      | )      |
| Future        development and abandonment costs                                                                              |   |       |   |   | (1         | )      |   | (17        | )      |   | (101       | )      |   |       |   |   | (1,061    | )      |   | (2,563     | )      |   |      |   |   | (3,743      | )      |
| **Future net inflow before income tax**                                                                                      |   |       |   |   |       |   |   | **438**    |   |   | **2,917**  |   |   |       |   |   | **3,412** |   |   | **10,566** |   |   |      |   |   | **17,333**  |   |
| Future        income tax                                                                                                     |   |       |   |   |       |   |   | (36        | )      |   | (1,291     | )      |   |       |   |   | (795      | )      |   | (5,729     | )      |   |      |   |   | (7,851      | )      |
| **Future net cash flows**                                                                                                    |   |       |   |   |       |   |   | **402**    |   |   | **1,626**  |   |   |       |   |   | **2,617** |   |   | **4,837**  |   |   |      |   |   | **9,482**   |   |
| 10%        discount factor                                                                                                   |   |       |   |   |       |   |   | (206       | )      |   | (962       | )      |   |       |   |   | (1,747    | )      |   | (3,621     | )      |   |      |   |   | (6,536      | )      |
| **Standardized measure of discounted future net        cash flows of equity-accounted entities at December 31,        2012** |   |       |   |   |       |   |   | **196**    |   |   | **664**    |   |   |       |   |   | **870**   |   |   | **1,216**  |   |   |      |   |   | **2,946**   |   |
| **Total        consolidated subsidiaries and equity-accounted entities        at December 31, 2012**                         |   | **8,326**  |   |   | **5,518**  |   |   | **20,777** |   |   | **9,601**  |   |   | **11,905** |   |   | **2,524** |   |   | **3,959**  |   |   | **1,628** |   |   | **64,238**  |   |
|                                                                                                                         |   |            |        |   |            |        |   |            |        |   |            |        |   |            |        |   |           |        |   |            |        |   |           |        |   |             |        |

 

 

F-125

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##### Table of Contents

*Changes in standardized measure of discounted future netcash flows*Changes in standardized measure of discounted future net cashflows for the years ended December 31, 2010, 2011 and 2012, areas follows:

| (euro        million) |   | **Consolidated        subsidiaries** |   | **Equity-accounted        entities** |   | **Total** |
|-----------------------|--------|--------------------------------------|--------|--------------------------------------|--------|-----------|
|                  |   |                                      |   |                                      |   |           |

| **Standardized measure of discounted future net        cash flows at December 31, 2009**               |   | **31,500** |   |   | **257**   |   |   | **31,757** |   |
|--------------------------------------------------------------------------------------------------------|--------|------------|--------|--------|-----------|--------|--------|------------|--------|
| Increase        (Decrease):                                                                            |   |       |   |   |      |   |   |       |   |
| - sales, net of production costs                                                                       |   | (22,194    | )      |   | (243      | )      |   | (22,437    | )      |
| - net        changes in sales and transfer prices, net of production        costs                      |   | 24,415     |   |   | 406       |   |   | 24,821     |   |
| - extensions, discoveries and improved recovery,        net of future production and development costs |   | 1,926      |   |   | 1,409     |   |   | 3,335      |   |
| - changes        in estimated future development and abandonment costs                                 |   | (6,464     | )      |   | (386      | )      |   | (6,850     | )      |
| - development costs incurred during the period        that reduced future development costs            |   | 8,520      |   |   | 368       |   |   | 8,888      |   |
| -        revisions of quantity estimates                                                               |   | 12,600     |   |   | 143       |   |   | 12,743     |   |
| - accretion of discount                                                                                |   | 6,519      |   |   | 53        |   |   | 6,572      |   |
| - net        change in income taxes                                                                    |   | (11,802    | )      |   | (1,115    | )      |   | (12,917    | )      |
| - purchase of reserves in-place                                                                        |   |       |   |   |      |   |   |       |   |
| - sale of        reserves in-place                                                                     |   | (177       | )      |   |      |   |   | (177       | )      |
| - changes in production rates (timing) and other                                                       |   | 1,234      |   |   | 191       |   |   | 1,425      |   |
| **Net        increase (decrease)**                                                                     |   | **14,577** |   |   | **826**   |   |   | **15,403** |   |
| **Standardized measure of discounted future net        cash flows at December 31, 2010**               |   | **46,077** |   |   | **1,083** |   |   | **47,160** |   |
| Increase        (Decrease):                                                                            |   |       |   |   |      |   |   |       |   |
| - sales, net of production costs                                                                       |   | (23,744    | )      |   | (300      | )      |   | (24,044    | )      |
| - net        changes in sales and transfer prices, net of production        costs                      |   | 40,961     |   |   | 442       |   |   | 41,403     |   |
| - extensions, discoveries and improved recovery,        net of future production and development costs |   | 1,580      |   |   | 2,457     |   |   | 4,037      |   |
| - changes        in estimated future development and abandonment costs                                 |   | (3,890     | )      |   | (392      | )      |   | (4,282     | )      |
| - development costs incurred during the period        that reduced future development costs            |   | 7,301      |   |   | 866       |   |   | 8,167      |   |
| -        revisions of quantity estimates                                                               |   | 1,337      |   |   | (87       | )      |   | 1,250      |   |
| - accretion of discount                                                                                |   | 8,640      |   |   | 235       |   |   | 8,875      |   |
| - net        change in income taxes                                                                    |   | (17,067    | )      |   | (1,678    | )      |   | (18,745    | )      |
| - purchase of reserves in-place                                                                        |   | 37         |   |   | 10        |   |   | 47         |   |
| - sale of        reserves in-place                                                                     |   | (146       | )      |   |      |   |   | (146       | )      |
| - changes in production rates (timing) and other                                                       |   | 1,152      |   |   | 24        |   |   | 1,176      |   |
| **Net        increase (decrease)**                                                                     |   | **16,161** |   |   | **1,577** |   |   | **17,738** |   |
| **Standardized measure of discounted future net        cash flows at December 31, 2011**               |   | **62,238** |   |   | **2,660** |   |   | **64,898** |   |
| Increase        (Decrease):                                                                            |   |       |   |   |      |   |   |       |   |
| - sales, net of production costs                                                                       |   | (28,595    | )      |   | (325      | )      |   | (28,920    | )      |
| - net        changes in sales and transfer prices, net of production        costs                      |   | 2,264      |   |   | (56       | )      |   | 2,208      |   |
| - extensions, discoveries and improved recovery,        net of future production and development costs |   | 4,868      |   |   | 812       |   |   | 5,680      |   |
| - changes        in estimated future development and abandonment costs                                 |   | (3,802     | )      |   | (357      | )      |   | (4,159     | )      |
| - development costs incurred during the period        that reduced future development costs            |   | 8,199      |   |   | 409       |   |   | 8,608      |   |
| -        revisions of quantity estimates                                                               |   | 3,725      |   |   | 824       |   |   | 4,549      |   |
| - accretion of discount                                                                                |   | 12,527     |   |   | 477       |   |   | 13,004     |   |
| - net        change in income taxes                                                                    |   | 2,207      |   |   | (830      | )      |   | 1,377      |   |
| - purchase of reserves in-place                                                                        |   |       |   |   |      |   |   |       |   |
| - sale of        reserves in-place                                                                     |   | (1,509     | )      |   | (615      | )      |   | (2,124     | )      |
| - changes in production rates (timing) and other                                                       |   | (830       | )      |   | (53       | )      |   | (883       | )      |
| **Net        increase (decrease)**                                                                     |   | **(946**   | **)**  |   | **286**   |   |   | **(660**   | **)**  |
| **Standardized measure of discounted future net        cash flows at December 31, 2012**               |   | **61,292** |   |   | **2,946** |   |   | **64,238** |   |
|                                                                                                   |   |            |        |   |           |        |   |            |        |

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**SIGNATURES**

The registrant certifies that it meets all of the requirementsfor filing on Form 20-F and has duly caused this annual report tobe signed on its behalf by the undersigned, thereunto dulyauthorized.

Date: April 9, 2013

 

 

 

 

 

 

 

| Eni SpA                                                  |
|----------------------------------------------------------|
|                                                     |
| /s/ANTONIO CRISTODORO                                    |
|                                                          |
|                                                     |
| Antonio Cristodoro                                       |
| Title: Head of Corporate Secretary's        Staff Office |

 

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##### Table of Contents

**EXHIBIT 1**

**By-laws of Eni SpA**1

> 
***Part I – Formation – Name –    Registered Office and Duration of the Company***

| **ARTICLE 1** |
|---------------|
| 1.1           |   | Eni SpA, formed as a result        of the transformation of Ente Nazionale Idrocarburi, a        public agency, pursuant to Law No. 136 of February 10,        1953, is governed by these By-laws. |
| 1.2           |   | The first letter of the        Company’s name may be written in either upper or        lower case. |
|          |   |   |
| **ARTICLE 2** |
| 2.1           |   | The Company’s        registered office is located in Rome, and it has two        branch offices in San Donato Milanese (Milan). |
| 2.2           |   | The Company may establish        and/or close offices, representative offices, affiliates        and branch offices either in Italy or abroad, in the        manner provided for by law. |
|          |   |   |
| **ARTICLE 3** |
| 3.1           |   | The duration of the Company        shall expire on December 31, 2100. Its duration may be        extended one or more times by resolution of the        Shareholders’ Meeting. |

> 
***Part II – Corporate Purpose***

| **ARTICLE        4** |
|----------------------|
| 4.1                  |   | The corporate purpose is the        direct and/or indirect exercise, through equity holdings        in companies or other entities of activities in the field        of hydrocarbons and natural gases, such as exploration        and development of hydrocarbon fields, the construction        and operation of pipelines for transporting the same, the        processing, transformation, storage, use and sale of        hydrocarbons and natural gases, in compliance with the        terms of concessions provided for by law. |
|                 |   | The corporate purpose also        includes the direct and/or indirect exercise, through        equity holdings in companies or other enterprises, of        activities in the fields of chemicals, nuclear fuels,        geothermal energy, other renewable energy sources and        energy in general, in the design and construction of        industrial plants, in the mining industry, in the        metallurgy industry, in the textile machinery industry,        in the water sector, including water diversion,        potabilization, purification, distribution and reuse; in        the environmental protection sector and the treatment and        disposal of waste, as well as any other economic activity        that is instrumental, ancillary or complementary to the        aforementioned activities.        The corporate purpose also comprises performing and        managing the technical and financial coordination of        subsidiaries and associated companies and providing        financial assistance to them.        The Company may undertake any transactions necessary or        useful for the achievement of the corporate purpose; by        way of example, it may undertake transactions involving        real estate or moveable assets, commercial and industrial        transactions, financial and banking transactions of any        sort, and any other act that is in any way connected with        the corporate purpose with the exception of fundraising        on a public basis and the performance of investment        services as defined by Legislative Decree No. 58 of        February 24, 1998.        The Company may, finally, acquire equity holdings and        interests in other companies or enterprises with        corporate purposes that are similar, related or        complementary to its own or those of companies in which        it has equity holdings, either in Italy or abroad, and it        may provide secured and/or unsecured guarantees for its        own and others’ obligations, including, in        particular, sureties. |

> 
***Part III – Share capital    – Shares – Bonds***

| **ARTICLE        5** |
|----------------------|
| 5.1                  |   | The Company’s share        capital is equal to euro 4,005,358,876.00 (four billion        five million three hundred and fifty-eight thousand eight        hundred and seventy-six), represented by 3,634,185,330        (three billion six hundred and thirty four million one        hundred and eighty five thousand three hundred and        thirty) ordinary shares without indication of par value. |
| 5.2                  |   | Shares may not be split and        each share gives entitlement to one vote. |
| 5.3                  |   | The status of shareholder in        itself constitutes approval of these By-laws. |
|                 |   |   |
| **ARTICLE        6** |
| 6.1                  |   | Pursuant to Article 3 of        Decree Law No. 332 of May 31, 1994, ratified with        amendments by Law No. 474 of July 30, 1994, no        shareholder may hold, in any capacity, more than 3% of        the Company’s share capital.        The calculation of such maximum shareholding limit also        takes account of the aggregate shareholding held by the        controlling party, whether a natural or legal person or        company; subsidiaries under direct or indirect control,        as |

 

----

| (1) |    | The English        text is a translation of the Italian official        "By-laws of Eni SpA". For any conflict or        discrepancies between the two texts the Italian text        shall prevail. |
|-----|--------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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##### Table of Contents

|   |   | well as entities        controlled by the same controlling party; linked entities        and persons related to the second degree by blood or        marriage, with the exception of legally separated        spouses.        A relationship of control, including with reference to        entities other than companies, exists in the cases        envisaged by Article 2359, paragraphs 1 and 2 of the        Italian Civil Code.        A link exists in the case set forth in Article 2359,        paragraph 3, of the Italian Civil Code as well as between        entities that directly or indirectly, by way of        subsidiaries other than those managing investment funds,        participate, even with third parties, in agreements        regarding the exercise of voting rights or the transfer        of shares or other equity holdings in third-party        companies or, in any event, in agreements as referred to        in Article 122 of Legislative Decree No. 58 of February        24, 1998 regarding third-party companies if said        agreements involve least 10% of voting share capital if        they are listed companies or 20% if they are unlisted        companies.        The calculation of the aforementioned shareholding limit        (3%) also takes account of shares held by any fiduciary        and/or nominee.        Any voting rights and any other non-financial rights        attached to shares held in excess of the maximum limit        indicated above may not be exercised and the voting        rights of each shareholder to whom such limit applies        shall be reduced in proportion, unless otherwise jointly        specified in advance by the parties involved. If the        voting rights of shares exceeding this limit are        exercised, any shareholders’ resolution adopted        pursuant to such a vote may be challenged pursuant to        Article 2377 of the Italian Civil Code if the required        majority would not have been reached without the votes        exceeding the aforementioned maximum limit.        Shares for which voting rights may not be exercised shall        nevertheless be included in the determination of the        quorum at Shareholders’ Meetings. |
|--------|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| 6.2    |   | Pursuant to        Article 2, paragraph 1, of Decree-Law No. 332 of May 31,        1994, ratified with amendments by Law No. 474 of July 30,        1994, as amended by Article 4, paragraph 227, of Law No.        350 of December 24, 2003, the Minister of the Economy and        Finance retains the following special powers to be        exercised in agreement with the Minister of Economic        Development and in accordance with the criteria set out        in the Decree issued by the President of the Council of        Ministers on June 10, 2004:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |
|   |   | a)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |   | power of opposition to the        acquisition of material shareholdings, which pursuant to        the Decree issued by the Minister of Treasury on October        16, 1995 are shareholdings of at least 3% of share        capital with voting rights at the ordinary        Shareholders’ Meeting, by parties subject to the        shareholding limit as set forth in Article 3 of        Decree-Law No. 332 of May 31, 1994, ratified with        amendments by Law No. 474 of July 30, 1994. Such        opposition shall be expressed within ten days of the date        of the notice to be filed by the directors at the time        request is made for registration in the        shareholders’ register if the Minister determines        that such an acquisition may prejudice the vital        interests of the Italian State. Pending expiry of the        ten-day term, the voting rights and other non-financial        rights attached to the shares representing a material        shareholding may not be exercised. If the power of        opposition is exercised, with a measure duly explicating        the prejudice that the transaction may cause to the vital        interests of the Italian State, the transferee may not        exercise the voting rights or any other non-financial        rights attached to the shares representing a material        shareholding and must dispose of said shares within one        year. In the event of failure to comply, the court, upon        a request from the Minister of the Economy and Finance,        shall order the disposal of the shares representing a        material shareholding in accordance with the procedures        set forth in Article 2359-ter of the Italian Civil Code.        The measure exercising the right of opposition may be        challenged by the transferee before the Lazio Regional        Administrative Court within sixty days; |
|   |   | b)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |   | power of opposition to the        conclusion of shareholders’ agreements as referred        to in Article 122 of Legislative Decree No. 58 of        February 24, 1998, involving – as provided for in        the Treasury Minister’s Decree of October 16, 1995        – at least 3% of share capital with voting rights at        the ordinary Shareholders’ Meeting. For the purposes        of exercising said power of opposition, Consob shall        notify the Minister of the Economy and Finance of any        such agreements notified to it pursuant to Article 122 of        Legislative Decree 58 of February 24, 1998. The power of        opposition shall be exercised within ten days of the date        of the notice from Consob. Pending expiry of the ten-day        term, the voting rights and other non-financial rights        attached to the shares held by the shareholders who have        entered into such shareholders’ agreements may not        be exercised. If the power of opposition is exercised,        with a measure duly explicating the prejudice that the        shareholders’ agreements may cause to the vital        interests of the Italian State, the shareholders’        agreements shall be null and void. If the actions at        Shareholders’ Meetings of the shareholders who had        entered into the shareholders’ agreements referred        to in Article 122 of Legislative Decree No. 58 of        February 24, 1998 should suggest that they were        continuing to abide by the undertakings given in such        agreements, any resolutions approved with their vote, if        decisive for approval, may be challenged. The measure        exercising the right of opposition may be challenged by        the shareholders party to the above-mentioned agreements        before the Lazio Regional Administrative Court within        sixty days; |
|   |   | c)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |   | power of veto, duly        supported by explication of the effective prejudice to        the vital interests of the Italian State, with respect to        resolutions to wind up the Company, to transfer the        business, to merge, to demerge, to transfer the        Company’s registered office abroad, to change the        corporate purpose or to amend the By-laws so as to        eliminate or modify the powers set out in this Article.        The measure exercising the right of opposition may be        challenged by the dissenting shareholders before the        Lazio Regional Administrative Court within sixty days; |

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|   |   | d) |   | power of appointment of one        non-voting director. Should the office of said director        be vacated, the Minister of the Economy and Finance, in        agreement with the Minister of Economic Development,        shall appoint a replacement. |
|--------|--------|----|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|                  |   |                                                                                                                                                                                                                                                                   |
|-----------------------|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| **ARTICLE        7**  |
| 7.1                   |   | When shares are fully paid        up, and if the law so allows, they may be issued to        bearer. Bearer shares may be converted into registered        shares and vice-versa. Conversion operations shall be        carried out at the shareholder’s expense. |
|                  |   |                                                                                                                                                                                                                                                                   |
| **ARTICLE        8**  |
| 8.1                   |   | If for whatever reason a        share should belong to more than one person, the rights        attaching to said share may be exercised by only one        person or by a proxy acting for all co-holders.                                                             |
|                  |   |                                                                                                                                                                                                                                                                   |
| **ARTICLE        9**  |
| 9.1                   |   | The Shareholders’        Meeting may resolve to increase the Company share capital        and set the terms, conditions and means thereof.                                                                                                                        |
| 9.2                   |   | The Shareholders’        Meeting may resolve to increase the Company share capital        by issuing shares, including shares of different classes,        to be granted for no consideration pursuant to Article        2349 of the Italian Civil Code.          |
|                  |   |                                                                                                                                                                                                                                                                   |
| **ARTICLE        10** |
| 10.1                  |   | Payments in respect of        shares may be called by the Board of Directors in one or        more installments.                                                                                                                                                       |
| 10.2                  |   | Shareholders who are late in        payment shall be charged interest calculated at the        official discount rate established by the Bank of Italy,        without prejudice to the provisions of Article 2344 of        the Italian Civil Code.                   |
|                  |   |                                                                                                                                                                                                                                                                   |
| **ARTICLE        11** |
| 11.1                  |   | The Company may issue bonds,        including convertible bonds and warrants, in compliance        with the provisions of law.                                                                                                                                         |

> 
***Part IV – Shareholders’ Meetings***

| **ARTICLE        12** |
|-----------------------|
| 12.1                  |   | Ordinary and extraordinary        Shareholders’ Meetings shall normally be held at the        Company’s registered office unless otherwise decided        by the Board of Directors, provided however they are held        in Italy. |
| 12.2                  |   | The ordinary        Shareholders’ Meeting shall be called at least once        a year, within 180 days of the end of the Company’s        financial year, to approve the financial statements,        since the Company is required to draw up consolidated        financial statements. |
| 12.3                  |   | The directors shall call a        Shareholders’ Meeting without delay when        shareholders representing at least one twentieth of the        share capital so request. Shareholders’ Meetings may        not be called upon the request of the shareholders for        matters upon which, according to law, the        Shareholders’ Meeting must resolve upon a proposal        of the directors or on the basis of a project or report        of the directors themselves. The shareholders who request        a meeting to be convened shall prepare a report on the        proposals relating to the matters to be discussed. The        Board of Directors shall make the report available to the        public, together with its own evaluations, if any, at the        Company’s registered office, on the Company’s        website and in any other manner established in Consob        regulations at the time the notice calling the meeting is        published. |
| 12.4                  |   | The Board of Directors shall        make a report on each of the items on the agenda        available to the public as provided for in the previous        paragraph by the deadlines for publication of the notice        calling the Shareholders’ Meeting for each of the        items on the agenda. |
|                  |   |   |
| **ARTICLE        13** |
| 13.1                  |   | The Shareholders’        Meeting shall be called by way of a notice published on        the Company’s website, as well as in accordance with        the procedures specified in Consob regulations, by the        statutory deadlines and in accordance with applicable        law.        Shareholders who severally or jointly represent at least        one fortieth of the Company’s share capital may ask        for items to be added to the agenda by submitting a        request within ten days of publication of the notice        calling the meeting, unless a different term is provided        for by law, specifying the additional proposed items in        their request or presenting proposed resolutions on items        already on the agenda. Requests, together with the        certificate attesting ownership of the shares, are        submitted in writing, by mail or electronically in the        manners provided for in the notice calling the meeting.        These proposed resolutions may be presented individually        at the Shareholders’ Meeting by persons entitled to        vote. Matters upon which, according to law, the        Shareholders’ Meeting must resolve upon a proposal        of the Board of Directors or on the basis of a project or        report of the directors other than the report on the        items in the agenda, may not be added to the agenda. The        Board of Directors shall give notice of the additions to        the agenda or the proposed resolutions approved in the        same manner prescribed for the publication of the notice        calling the meeting at least fifteen days before the date        set for the Shareholders’ Meeting, unless a        different term is required by law. The proposed        resolutions on items already on the agenda are made        available to |

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##### Table of Contents

|   |   | the public as prescribed by        Article 12.3 of these By-laws, simultaneous with        publication of the announcement of their presentation.        The requesting or proposing shareholders shall send, by        the final deadline for the submission of requests for        additions to the agenda or of proposed resolutions, a        report to the Board of Directors, explaining the reasons        for the addition or the proposed resolution. The Board of        Directors shall make the report available to the public,        together with its own evaluations, if any, at the same        time as the publication of the notice of the additions to        the agenda or of the presentation of proposed resolutions        in the manner set out in Article 12.3 of these By-laws. |
|--------|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 13.2 |   | Entitlement to attend and        cast a vote at the Shareholders’ Meeting shall be        certified by a statement submitted by an authorized        intermediary on the basis of its accounting records to        the Company on behalf of the person entitled to vote. The        statement shall be issued by the intermediary on the        basis of the balances on the accounts recorded at the end        of the seventh trading day prior to the date of the        Shareholders’ Meeting. Credit or debit records        entered on the accounts after this deadline shall not be        considered for the purpose of determining entitlement to        exercise voting rights at the Shareholders’ Meeting.        The statement issued by the authorized intermediary must        reach the Company by the end of the third trading day        prior to the date of the Shareholders’ Meeting, or        by any other deadline established by Consob regulations        issued in agreement with the Bank of Italy. Shareholders        shall nevertheless be entitled to attend the meeting and        cast a vote if the statements are received by the Company        after the deadlines indicated above, provided they are        received before the start of proceedings of the given        call. For the purposes of this Article, reference is made        to the date of first call, provided that the dates of any        subsequent calls are indicated in the notice calling the        meeting; otherwise, the date of each call is deemed the        reference date. |
|------|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|                  |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |
|-----------------------|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| **ARTICLE        14** |
| 14.1                  |   | Those persons who are        entitled to vote may appoint a party to represent        themselves at the Shareholders’ Meeting by means of        a written proxy or in electronic form in the manner set        forth by current laws. Electronic notification of the        proxy may be made through a special section of the        Company’s website as indicated in the notice calling        the meeting. In order to simplify proxy voting by        shareholders who are employees of the Company or of its        subsidiaries and belong to shareholders associations that        meet applicable statutory requirements, locations for        communications and collecting proxies shall be made        available to said associations in accordance with the        terms and conditions agreed from time to time with the        legal representatives of said associations. |
| 14.2                  |   | The Chairman of the meeting        shall verify the validity of proxies and, in general,        entitlement to participate in the Meeting.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |
| 14.3                  |   | The right to vote may also        be exercised by correspondence in accordance with the        applicable provisions of law and regulations. If        envisaged in the notice calling the meeting, those        persons entitled to vote may participate in the        Shareholders’ Meeting by means of telecommunication        systems and exercise their right to vote by electronic        means in accordance with the provisions of law,        applicable regulations and the Shareholders’ Meeting        Rules.                                                                                                                                                                                                                                                                                                                                                                 |
| 14.4                  |   | The Shareholders’        Meetings are governed by the Shareholders’ Meeting        Rules as approved with a resolution of the ordinary        Shareholders’ Meeting.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |
| 14.5                  |   | The Company may designate a        person for each Shareholders’ Meeting to whom the        shareholders may confer a proxy with voting instructions        on all or some of the items on the agenda, as provided        for by law and regulations, by the end of the second        trading day preceding the date set for the        Shareholders’ Meeting including for calls subsequent        to the first. Such proxy shall not be valid for items in        respect of which no voting instructions have been        provided.                                                                                                                                                                                                                                                                                                                                                     |
|                  |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |
| **ARTICLE        15** |
| 15.1                  |   | The Shareholders’        Meeting is chaired by the Chairman of the Board of        Directors, or in the event of the Chairman’s absence        or impediment, by the Chief Executive Officer; in their        absence, the Shareholders’ Meeting shall elect its        own Chairman.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |
| 15.2                  |   | The Chairman of the meeting        is assisted by a Secretary, who need not be a        shareholder, to be designated by the participants in the        meeting, and may appoint one or more scrutineers.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |
|                  |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |
| **ARTICLE        16** |
| 16.1                  |   | The ordinary        Shareholders’ Meeting decides on all matters for        which it is legally responsible and authorizes the        transfer of the business.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |
| 16.2                  |   | The ordinary and        extraordinary Shareholders’ Meetings are normally        held after more than one call, as provided for in these        By-laws; their resolutions in first, second or third call        must be passed with the majorities required by law in        each case. The Board of Directors may, if deemed        necessary, establish that both the ordinary and the        extraordinary Shareholders’ Meetings shall be held        after a single call. In case of a single call, the        majorities required by law in this case shall apply.                                                                                                                                                                                                                                                                                                                  |
| 16.3                  |   | The resolutions of the        Shareholders’ Meeting, approved in accordance with        the law and these By-laws, shall be binding on all        shareholders, including those dissenting or not present.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |
| 16.4                  |   | The minutes of ordinary        meetings shall be signed by the Chairman and the        Secretary.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |
| 16.5                  |   | The minutes of extraordinary        meetings shall be drawn up by a notary public.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |

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> 
***Part V – The Board of Directors***

| **ARTICLE        17** |
|-----------------------|
| 17.1                  |   | The Company is governed by a        Board of Directors consisting of no fewer than three and        no more than nine members. The Shareholders’ Meeting        shall determine the number within these limits.        The Minister of the Economy and Finance in agreement with        the Minister of Economic Development may appoint an        additional non-voting director, pursuant to Article 6.2,        letter d), of the By-laws. |
| 17.2                  |   | The directors shall be        appointed for a period of up to three financial years;        this term shall lapse on the date of the        Shareholders’ Meeting convened to approve the        financial statements for their last year in office. They        may be re-elected. |

| 17.3 |   | The Board of Directors,        except for the member appointed pursuant to Article 6.2,        letter d) of these By-laws, shall be elected by the        Shareholders’ Meeting on the basis of slates        presented by shareholders and by the Board of Directors.        The candidates shall be listed on the slates in numerical        order.        The slates shall be filed with the Company’s        registered office, including remotely in the manner        indicated in the notice calling the meeting, by the        twenty-fifth day before the date of the        Shareholders’ Meeting at first or single call        convened to appoint the members of the Board of        Directors. They shall be made available to the public as        provided for by law and Consob regulations at least        twenty-one days before the date set for the        Shareholders’ Meeting at first or single call. Each        shareholder may, severally or jointly, submit and vote on        a single slate only. Controlling persons, subsidiaries        and companies under common control may not submit or        participate in the submission of other slates, nor can        they vote on them, either directly or through nominees or        trustees. As used herein, subsidiaries are those        companies referred to in Article 93 of Legislative Decree        No. 58 of February 24, 1998. Each candidate may stand on        a single slate, on penalty of disqualification. Only        those shareholders who, severally or jointly, represent        at least 1% of share capital or any other threshold        established by Consob regulations shall be entitled to        submit a slate. Ownership of the minimum holding needed        to submit slates shall be determined with regard to the        shares registered to the shareholder on the day on which        the slates are filed with the Company. Related        certification may be submitted after the filing, provided        that submission takes place by the deadline set for the        publication of the slates by the Company.        At least one director, if there are no more than five        directors, or at least three directors, if there are more        than five, shall satisfy the independence requirements        established for the members of the board of statutory        auditors of listed companies.        The candidates meeting such independence requirements        shall be expressly identified in each slate.        All candidates shall also satisfy the integrity        requirements established by applicable law.        Slates that contain three or more candidates shall        include candidates of both genders, as specified in the        notice calling the Meeting, in order to comply with the        applicable gender-balance legislation. When the number of        members of the less-represented gender must, by law, be        at least three, the slates competing to appoint the        majority of the members of the Board of Directors must        include at least two candidates of the less-represented        gender.        Together with the filing of each slate, on penalty of        inadmissibility, the following shall also be filed: the        curriculum vitae of each candidate, statements of each        candidate accepting his/her nomination and affirming,        under his/her personal responsibility, the absence of any        grounds making him/her ineligible or incompatible for        such position and that he/she satisfies the        aforementioned requirements of integrity and independence        (where applicable).        The appointed directors shall notify the Company if they        should no longer satisfy the independence and integrity        requirements or if cause for ineligibility or        incompatibility should arise.        The Board of Directors shall periodically evaluate the        independence and integrity of its members and whether        cause for ineligibility or incompatibility has arisen. If        the integrity or independence requirements established by        applicable legislation should no longer be met by a        director or if cause for ineligibility or incompatibility        should have arisen, the Board of Directors shall declare        the director disqualified and replace him/her or shall        invite him/her to rectify the situation of        incompatibility by a deadline set by the Board itself, on        penalty of disqualification.        Directors shall be elected in the following manner: |
|------|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   |   | a) |   | seven-tenths of the        directors to be elected shall be drawn from the slate        that receives the most votes of the shareholders in the        order in which they appear on the slate, rounded off in        the event of a decimal number to the next lowest whole        number;                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |
|--------|--------|----|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |   | b) |   | the remaining directors        shall be drawn from the other slates. Said slates shall        not be connected in any way, directly or indirectly, to        the shareholders who have submitted or voted the slate        that receives the largest number of votes. For this        purpose, the votes received by each slate shall be        divided by one or two or three depending upon the number        of directors to be elected. The quotients, or points,        thus obtained shall be assigned progressively to        candidates of each slate in the order given in the slates        themselves. The candidates of all the slates shall be        ranked by the points assigned in single list in        descending order. Those who receive the most points shall        be elected. In the event that more than one candidate        receives the same number of points, the candidate elected        shall be the person from the slate that has not hitherto        had a director elected or that has elected the least        number of directors. In the event that none of the slates        has yet |

 

 

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|   |   |   |   | had a director elected or        that all of them have had the same number of directors        elected, the candidate among all such slates who has        received the highest number of votes shall be elected. In        the event of equal slate votes and equal points, the        entire Shareholders’ Meeting shall vote again and        the candidate elected shall be the person who receives a        simple majority of the votes; |
|--------|--------|--------|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   |   | c) |   | if the minimum number of        independent directors required under these By-laws has        not been elected following the above procedure, the        points to be assigned to the candidates draw from the        slates shall be calculated by dividing the number of        votes received by each slate by the ordinal number of        each of these candidates; the candidates who do not meet        the requirements of independence with the fewest points        from among the candidates drawn from all of the slates        shall be replaced, starting from the last, by the        independent candidates, from the same slate as the        replaced candidate (following the order in which they are        listed), otherwise by persons meeting the independence        requirements appointed in accordance with the procedure        set out in letter d). In cases where candidates from        different lists have received the same number of points,        the candidate from the slate from which the largest        number of directors has been drawn or, subordinately, the        candidate drawn from the slate receiving the lowest        number of votes, or, in the event of a tie vote, the        candidate that receives the fewest votes of the        Shareholders’ Meeting in a run-off election, shall        be replaced; |
|--------|--------|----|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   |   | c-bis) |   | if the application of the        procedure set out in letters a) and b) does not permit        compliance with the gender-balance rules, the points to        attribute to each candidate drawn from the slate shall be        calculated by dividing the number of votes received by        each slate by the ordinal number of each of these        candidates; the candidate of the over-represented gender        with the fewest points from among the candidates drawn        from all of the slates shall be replaced, without        prejudice to the compliance with the required minimum        number of independent directors, by the member of the        less-represented gender who may be listed (with the next        highest ordinal number) on the same slate as the        candidate to be replaced, otherwise by a person to be        appointed following the procedure set out in letter d).        In cases where candidates from different lists have        received the same minimum number of points, the candidate        from the slate from which the largest number of directors        has been drawn or, subordinately, the candidate drawn        from the slate receiving the fewest number of votes, or,        in the event of a tie vote, the candidate that receives        the fewest votes of the Shareholders’ Meeting in a        run-off election, shall be replaced; |
|--------|--------|--------|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |   | d)     |   | to appoint directors who for        any reason were not appointed pursuant to the above        procedures, the Shareholders’ Meeting shall resolve,        with the majorities required by law, to ensure that the        composition of the Board of Directors complies with        applicable law and the By-laws.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |

|   |   | The slate voting procedure        shall apply only to the election of the entire Board of        Directors.                                                                                                                                                                                                                                                                                         |
|--------|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| 17.4   |   | The Shareholders’        Meeting may, during the Board’s term of office,        change the number of members of the Board of Directors,        within the limits established in the first paragraph of        this Article, and make the related appointments. The        terms of directors so elected shall expire at the same        time as those of the directors already in office. |

| 17.5   |   | If, during the year, the        office of one or more directors should be vacated, he/she        shall be replaced in accordance with Article 2386 of the        Italian Civil Code (with exception of the director        appointed pursuant to Article 6.2 letter d) of these        By-laws). In any case, compliance with the required        minimum number of independent directors and the        applicable rules concerning gender balance shall not be        affected.        If a majority of the directors should vacate their        offices, the entire Board shall be considered to have        resigned, and the Board shall promptly call a        Shareholders’ Meeting to elect a new Board. |
|--------|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| 17.6   |   | The Board may establish        internal committees to provide advice and proposals on        specific issues.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |
|   |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |

| **ARTICLE 18** |
|----------------|

| 18.1   |   | If the Shareholders’        Meeting has not appointed a Chairman, the Board shall        elect one from among its members. The director appointed        pursuant to Article 6.2, letter d) of the By-laws cannot        be appointed as Chairman. |
|--------|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| 18.2   |   | The Board, acting upon a        proposal of the Chairman, shall appoint a Secretary, who        need not be affiliated with the Company.                                                                                                                |
|   |   |                                                                                                                                                                                                                                                    |

| **ARTICLE 19** |
|----------------|

| 19.1 |   | The Board shall meet in the        place indicated in the meeting notice whenever the        Chairman or, in the event of his absence or impediment,        the Chief Executive Officer deems necessary, or when a        written request has been made by the majority of its        members. The Board of Directors may also be convened        pursuant to Article 28.4 of these By-laws. The meetings        of the Board of Directors may be held by video or        teleconference on the condition that all of the        participants in the meeting can be identified and that        all can follow and participate in real time in the        discussion of the matters being addressed. The meeting        shall be considered duly held in the place where the        Chairman and the Secretary are present. |
|------|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| 19.2 |   | Notice shall normally be        given at least five days in advance of the meeting. In        urgent circumstances, the period of notice may be        shorter. The Board of Directors shall decide how its        meetings are to be convened.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |
| 19.3 |   | The Board of Directors shall        also be convened when so requested by at least two        directors or by one director if the Board consists of        three directors, to decide on a specific matter deemed to        be of particular importance regarding the management of        the Company. Said matter shall be specified in the        request.                                                                                                                                                                                                                                                                                                                                                                                                                                                              |

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| **ARTICLE        20** |
|-----------------------|
| 20.1                  |   | The Chairman of the Board        or, in his absence, the eldest director in attendance        shall chair the meeting. |
|                  |   |   |
| **ARTICLE        21** |
| 21.1                  |   | For a Board meeting to be        valid, a majority of serving directors with voting rights        must be present. |
| 21.2                  |   | Resolutions shall be        approved by a majority of the votes of the directors with        voting rights present; in the event of a tie, the person        who chairs the meeting shall have a casting vote. |
|                  |   |   |
| **ARTICLE        22** |
| 22.1                  |   | The resolutions of the Board        of Directors shall be registered in the minutes, which        shall be recorded in a book kept for that purpose        pursuant to the provisions of law, and said minutes shall        signed by the Chairman of the meeting and by the        Secretary. |
| 22.2                  |   | Copies of the minutes shall        be considered bona fide if they are signed by the        Chairman or the person acting in place of the Chairman        and countersigned by the Secretary. |
|                  |   |   |
| **ARTICLE        23** |
| 23.1                  |   | The Board of Directors is        invested with the fullest powers for the ordinary and        extraordinary management of the Company and, in        particular, has the power to perform all acts it deems        advisable for the implementation and achievement of the        corporate purpose, with the sole exception of acts that        the law or these By-laws reserve to the        Shareholders’ Meeting. |
| 23.2                  |   | The Board of Directors shall        decide the following matters: |

| - |   | the merger and proportional        demerger of companies in which the Company owns shares or        other equity holdings representing at least 90% of the        share capital; |
|---|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| - |   | the establishment and        closing of branches;                                                                                                                                |
| - |   | the amendment of the By-laws        to comply with the provisions of law.                                                                                                        |

| 23.3                  |   | The Board of Directors and        the Chief Executive Officer shall promptly report to the        Board of Statutory Auditors at least every three months        and in any event at the time of the meetings of the Board        of Directors, on the activity carried out and on the        transactions with the most significant impact on        performance and the financial position carried out by the        Company and its subsidiaries. In particular they shall        report to the Board of Statutory Auditors those        transactions in which they have an interest, either on        their own behalf or on behalf of third parties.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |
|-----------------------|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|                  |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |
| **ARTICLE        24** |
| 24.1                  |   | The Board of Directors may        delegate its powers to one of its members with the        exception of the director appointed pursuant to Article        6.2, letter d) of these By-laws, within the limits set        forth in Article 2381 of the Italian Civil Code. The        Board may, in addition, delegate powers to the Chairman        to identify and promote integrated projects and        international agreements of strategic importance. The        Board of Directors may revoke delegated powers at any        time, proceeding, in the case of revocation of the powers        delegated to the Chief Executive Officer, to appoint        another Chief Executive Officer at the same time. The        Board of Directors, acting upon a proposal of the        Chairman and in agreement with the Chief Executive        Officer, may confer powers for individual acts or        categories of acts on other members of the Board of        Directors with the exception of the director appointed        pursuant to Article 6.2, letter d) of these By-laws. The        Chairman and the Chief Executive Officer, within the        limits of the authority attributed to them, may delegate        and empower Company employees or third parties to        represent the Company for individual acts or specific        categories of acts.        Further, acting upon proposal of the Chief Executive        Officer and in agreement with the Chairman, the Board of        Directors may also appoint one or more General Managers        (Chief Operating Officers) and determine the powers to be        conferred on them, once it has been ascertained that they        fulfill the integrity requirements set by law. The Board        of Directors shall periodically check the continuing        compliance with integrity requirements of the General        Managers (Chief Operating Officers). Failure to satisfy        these requirements shall result in disqualification from        the position.        Acting upon a proposal of the Chief Executive Officer, in        agreement with the Chairman and with the approval of the        Board of Statutory Auditors, the Board of Directors shall        appoint the Officer responsible for preparing financial        reporting documents.        The Officer responsible for preparing financial reporting        documents shall be selected from among those persons who,        for at least three years, have performed: |

|   |   | a) |   | administration, control or        management activities in companies listed on regulated        stock exchanges in Italy or other European Union        countries or other OECD countries with a share capital of        no less than euro 2 million; or |
|--------|--------|----|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |   | b) |   | statutory audit activities        in companies indicated in letter a) above; or                                                                                                                                                                          |
|   |   | c) |   | professional activities or        university teaching activities in the financial or        accounting sectors; or                                                                                                                                       |
|   |   | d) |   | management functions in        public or private entities with financial, accounting or        control expertise.                                                                                                                                        |

|   |   | The Board of Directors shall        ensure that the Officer responsible for preparing the        financial reporting documents has adequate powers and        means to perform the duties of the position and that        administrative and accounting procedures are being        followed. |
|--------|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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| **ARTICLE        25** |
|-----------------------|
| 25.1                  |   | The Chairman and the Chief        Executive Officer are severally vested with powers of        legal representation of the Company before any judicial        or administrative authority and with respect to third        parties and exercise signature powers on behalf of the        Company. |
|                  |   |   |
| **ARTICLE        26** |
| 26.1                  |   | The Chairman and the members        of the Board of Directors shall be entitled to        compensation to be determined by the ordinary        Shareholders’ Meeting. Said resolution, once taken,        shall remain valid for subsequent financial years until        the Shareholders’ Meeting should decide otherwise. |
|                  |   |   |
| **ARTICLE        27** |
| 27.1                  |   | The Chairman: |

| a) |   | represents the Company        pursuant to Article 25.1;                                                 |
|----|--------|---------------------------------------------------------------------------------------------------------|
| b) |   | chairs the        Shareholders’ Meeting pursuant to Article 15.1;                                  |
| c) |   | calls and chairs meetings of        the Board of Directors pursuant to Articles 19.1 and        20.1;   |
| d) |   | verifies that Board        resolutions are implemented;                                                 |
| e) |   | exercises the powers        delegated to him by the Board of Directors pursuant to        Article 24.1. |

> 
***Part VI – The Board of Statutory Auditors***

| **ARTICLE        28** |
|-----------------------|
| 28.1                  |   | The Board of Statutory        Auditors shall consist of five standing members and two        alternate members, chosen from among persons who satisfy        the professional and integrity requirements established        by the Ministry of Justice Decree No. 162 of March 30,        2000.        Pursuant to the aforementioned decree, the fields closely        connected with the business of the Company are:        commercial law, business economics and corporate finance.        Similarly, the sectors closely connected with the        business of the Company are engineering and geology.        The Statutory Auditors may be appointed as members of the        administrative and control bodies of other companies        within the limits set by Consob regulations. |
| 28.2                  |   | The Board of Statutory        Auditors shall be appointed by the Shareholders’        Meeting on the basis of slates presented by shareholders.        The candidates shall be listed on the slates in numerical        order in a number no greater than the number of members        of the body to be appointed.        The procedures set out in Article 17.3 and the provisions        issued in Consob regulations shall apply to the        submission, filing and publication of candidate slates.        Slates shall be divided into two sections: the first        containing candidates for appointment as standing        Statutory Auditors and the second containing candidates        for appointment as alternate Statutory Auditors. At least        the first candidate in each section must be entered in        the register of auditors and have carried out statutory        audit activities for no less than three years.        Slates that, considering both sections together, contain        three or more candidates shall include, in the section        for standing Statutory Auditors, candidates of both        genders, as specified in the notice calling the        Shareholders’ Meeting, in order to comply with the        applicable gender-balance legislation. If the section for        alternate Statutory Auditors on these slates contains two        candidates, they must be of different genders. When the        number of members of the less-represented gender must, by        law, be at least one, such requirement shall apply only        to slates competing to appoint the majority of the        members of the Board of Statutory Auditors.        Three standing Statutory Auditors and one alternate        Statutory Auditor shall be drawn from the slate that        receives the majority of votes. The other two standing        Statutory Auditors and the other alternate Statutory        Auditor shall be appointed using the procedures set out        in Article 17.3, letter b) of the By-laws. Said        procedures shall be applied separately to each section of        the other slates.        The Shareholders’ Meeting shall appoint the Chairman        of the Board of Statutory Auditors from among the        standing Statutory Auditors appointed in accordance with        Article 17.3 letter b) of these By-laws.        Where the application of the procedure set out above does        not permit compliance with the gender-balance rules for        standing Statutory Auditors, the points to attribute to        each candidate drawn from the standing Statutory Auditor        sections of the various slates shall be calculated by        dividing the number of votes received by each slate by        the ordinal number of each of these candidates; the        candidate of the over-represented gender with the fewest        points from among the candidates drawn from all of the        slates shall be replaced by the member of the        less-represented gender who may be listed (with the next        highest ordinal number) in the standing Statutory Auditor        section on the same slate as the candidate to be replaced        or, subordinately, in the alternate Statutory Auditor        section of the same slate as the candidate to be replaced        (in such case, the latter shall take the position of the        alternate candidate that replaces him/her). If this does        not permit compliance with the gender-balance rules,        he/she shall be replaced by a person chosen by the        Shareholders’ Meeting with the majority required by        law, so as to ensure that the membership of the Board of        Statutory Auditors complies with the law and the By-laws.        In cases where candidates from different lists have        received the same number of points, the candidate from        the slate from which the largest number of Statutory        Auditors has been drawn or, subordinately, the candidate        drawn from the |

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|   |   | slate receiving the fewest        number of votes, or, in the event of a tie vote, the        candidate that receives the fewest votes of the        Shareholders’ Meeting in a run-off election, shall        be replaced.        For the appointment of Statutory Auditors who, for any        reason, are not appointed using the above procedures, the        Shareholders’ Meeting shall resolve, with the        majorities required by law, in such a manner as to ensure        that the membership of the Board of Statutory Auditors        complies with the law and the By-laws.        The slate voting procedure shall apply only in case of        appointment of the entire Board of Statutory Auditors.        Should a standing Statutory Auditor from the slate that        received a majority of the votes be replaced, the        replacement shall be the alternate Statutory Auditor from        the same slate; should a standing Statutory Auditor from        other slates be replaced, the replacement shall be the        alternate Statutory Auditor from those other slates. If        the replacement results in non-compliance with        gender-balance rules, the Shareholders’ Meeting        shall be called as soon as possible to approve the        necessary resolutions to ensure compliance. |
|--------|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 28.3 |   | Statutory Auditors may be        re-elected.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |
|------|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| 28.4 |   | Subject to prior        notification of the Chairman of the Board of Directors,        the Board of Statutory Auditors may call        Shareholders’ Meetings and meetings of the Board of        Directors. The power to call a meeting of the Board of        Directors may be exercised individually by each member of        the Board of Statutory Auditors; at least two Statutory        Auditors are required to call Shareholders’        Meetings.        The meetings of the Board of Statutory Auditors may be        held by video or teleconference on the condition that all        of the participants in the meetings can be identified and        that all can follow and participate in real time in the        discussion of the matters being addressed. The meeting        shall be considered duly held in the place where the        Chairman and the Secretary are present. |

> 
***Part VII – Financial Statements and Profits***

| **ARTICLE        29** |
|-----------------------|
| 29.1                  |   | The Company’s financial        year ends on December 31 of each year. |
| 29.2                  |   | At the end of each financial        year, the Board of Directors shall prepare the Company        financial statements in compliance with the provisions of        law. |
| 29.3                  |   | The Board of Directors may        distribute interim dividends to the shareholders during        the financial year. |
|                  |   |   |
| **ARTICLE        30** |
| 30.1                  |   | Entitlement to dividends not        collected within five years of the day on which they        become payable shall lapse in favor of the Company and        such dividends shall be allocated to reserves. |

> 
***Part VIII – Winding Up and Liquidation of the    Company***

| **ARTICLE        31** |
|-----------------------|
| 31.1                  |   | In the event the Company is        wound up, the Shareholders’ Meeting shall decide the        manner of its liquidation and appoint one or more        liquidators, establishing their powers and remuneration. |

> 
***Part IX – General Provisions***

| **ARTICLE        32** |
|-----------------------|
| 32.1                  |   | For all matters not        expressly governed by these By-laws, the Italian Civil        Code and applicable special laws shall apply. |
| 32.2                  |   | Pursuant to Article 3,        paragraph 2, of Decree Law No. 332 of May 31, 1994,        ratified with amendments by Law No. 474 of July 30, 1994,        Article 6.1, sixth paragraph, of these By-laws shall not        apply to the shareholdings owned by the Ministry of the        Economy and Finance, public entities or entities they        control. |
|                  |   |   |
| **ARTICLE        33** |
| 33.1                  |   | The Company retains all        legal relationships in respect of assets and liabilities        held by the public agency Ente Nazionale Idrocarburi        before its transformation. |

|                  |   |                                                                                                                                                                                                                                                                          |
|-----------------------|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| **ARTICLE        34** |
| 34.1                  |   | The provisions of Articles        17.3, 17.5 and 28.2 directed to ensure compliance with        applicable gender-balance legislation shall apply to the        first three elections of the Board of Directors and Board        of Statutory Auditors after August 12, 2012. |

 

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**EXHIBIT 8**

**List of Eni’ssubsidiaries for the 2012**

| Subsidiary |   | Country        of Incorporation |   | Eni’s        share of net profit (%) |
|------------|--------|---------------------------------|--------|-------------------------------------------|
|       |   |                            |   |                                      |

| EXPLORATION &        PRODUCTION                                         |   |                     |   |   |
|-----------------------------------------------------------------------------|--------|--------------------------|--------|--------|
|                                                                        |   |                     |   |   |
| Eni Angola SpA                                                              |   | Italy                    |   | 100.00 |
| Eni East Africa SpA                                                         |   | Italy                    |   | 100.00 |
| Eni Mediterranea        Idrocarburi SpA                                     |   | Italy                    |   | 100.00 |
| Eni Timor Leste SpA                                                         |   | Italy                    |   | 100.00 |
| Eni West Africa SpA                                                         |   | Italy                    |   | 100.00 |
| Eni Zubair SpA                                                              |   | Italy                    |   | 100.00 |
| Ieoc SpA                                                                    |   | Italy                    |   | 100.00 |
| Società Adriatica        Idrocarburi SpA                               |   | Italy                    |   | 100.00 |
| Società Ionica Gas SpA                                                 |   | Italy                    |   | 100.00 |
| Società Oleodotti        Meridionali - SOM SpA                         |   | Italy                    |   | 70.00  |
| Società Petrolifera        Italiana SpA                                |   | Italy                    |   | 99.96  |
| Tecnomare - Società per        lo Sviluppo delle Tecnologie Marine SpA |   | Italy                    |   | 100.00 |
|                                                                        |   |                     |   |   |
| Agip Caspian Sea BV                                                         |   | Netherlands              |   | 100.00 |
| Agip Energy and Natural        Resources (Nigeria) Ltd                      |   | Nigeria                  |   | 100.00 |
| Agip Karachaganak BV                                                        |   | Netherlands              |   | 100.00 |
| Agip Oil Ecuador BV                                                         |   | Netherlands              |   | 100.00 |
| Burren Energy (Bermuda)        Ltd                                          |   | Bermuda                  |   | 100.00 |
| Burren Energy Congo Ltd                                                     |   | British Virgin Islands   |   | 100.00 |
| Burren Energy India Ltd                                                     |   | United Kingdom           |   | 100.00 |
| Burren Energy Ltd                                                           |   | Cyprus                   |   | 100.00 |
| Burren Energy Plc                                                           |   | United Kingdom           |   | 100.00 |
| Burren Energy (Services)        Ltd                                         |   | United Kingdom           |   | 100.00 |
| Burren Resources        Petroleum Ltd                                       |   | Bermuda                  |   | 100.00 |
| Burren Shakti Ltd                                                           |   | Bermuda                  |   | 100.00 |
| Eni AEP Ltd                                                                 |   | United Kingdom           |   | 100.00 |
| Eni Algeria Exploration        BV                                           |   | Netherlands              |   | 100.00 |
| Eni Algeria Ltd Sàrl                                                   |   | Luxembourg               |   | 100.00 |
| Eni Algeria Production BV                                                   |   | Netherlands              |   | 100.00 |
| Eni Ambalat Ltd                                                             |   | United Kingdom           |   | 100.00 |
| Eni America Ltd                                                             |   | United States of America |   | 100.00 |
| Eni Angola Exploration BV                                                   |   | Netherlands              |   | 100.00 |
| Eni Angola Production BV                                                    |   | Netherlands              |   | 100.00 |
| Eni Arguni I Ltd                                                            |   | United Kingdom           |   | 100.00 |
| Eni Australia BV                                                            |   | Netherlands              |   | 100.00 |
| Eni Australia Ltd                                                           |   | United Kingdom           |   | 100.00 |
| Eni BB Petroleum Inc                                                        |   | United States of America |   | 100.00 |
| Eni Bukat Ltd                                                               |   | United Kingdom           |   | 100.00 |
| Eni Bulungan BV                                                             |   | Netherlands              |   | 100.00 |
| Eni Canada Holding Ltd                                                      |   | Canada                   |   | 100.00 |
| Eni CBM Ltd                                                                 |   | United Kingdom           |   | 100.00 |
| Eni China BV                                                                |   | Netherlands              |   | 100.00 |
| Eni Congo SA                                                                |   | Republic of the Congo    |   | 100.00 |
| Eni Croatia BV                                                              |   | Netherlands              |   | 100.00 |
| Eni Dación BV                                                          |   | Netherlands              |   | 100.00 |
| Eni Denmark BV                                                              |   | Netherlands              |   | 100.00 |
| Eni East Sepinggan Ltd                                                      |   | United Kingdom           |   | 100.00 |
| Eni Elgin/Franklin Ltd                                                      |   | United Kingdom           |   | 100.00 |
| Eni Energy Russia BV                                                        |   | Netherlands              |   | 100.00 |
| Eni Exploration &        Production Holding BV                          |   | Netherlands              |   | 100.00 |
| Eni Gabon SA                                                                |   | Gabon                    |   | 99.96  |
| Eni Ganal Ltd                                                               |   | United Kingdom           |   | 100.00 |
| Eni Gas & Power LNG        Australia BV                                 |   | Netherlands              |   | 100.00 |

E-10

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| Eni Ghana Exploration and        Production Ltd                |   | Ghana                                   |   | 100.00 |
|----------------------------------------------------------------|--------|-----------------------------------------|--------|--------|
| Eni Hewett Ltd                                                 |   | United Kingdom                          |   | 100.00 |
| Eni India Ltd                                                  |   | United Kingdom                          |   | 100.00 |
| Eni Indonesia Ltd                                              |   | United Kingdom                          |   | 100.00 |
| Eni International NA NV        Sàrl                       |   | Luxembourg                              |   | 100.00 |
| Eni International        Resources Ltd                         |   | United Kingdom                          |   | 100.00 |
| Eni Investments Plc                                            |   | United Kingdom                          |   | 100.00 |
| Eni Iran BV                                                    |   | Netherlands                             |   | 100.00 |
| Eni Iraq BV                                                    |   | Netherlands                             |   | 100.00 |
| Eni Ireland BV                                                 |   | Netherlands                             |   | 100.00 |
| Eni JPDA 03-13 Ltd                                             |   | United Kingdom                          |   | 100.00 |
| Eni JPDA 06-105 Pty Ltd                                        |   | Australia                               |   | 100.00 |
| Eni JPDA 11-106 BV                                             |   | Netherlands                             |   | 100.00 |
| Eni Krueng Mane Ltd                                            |   | United Kingdom                          |   | 100.00 |
| Eni Lasmo Plc                                                  |   | United Kingdom                          |   | 100.00 |
| Eni Liberia BV                                                 |   | Netherlands                             |   | 100.00 |
| Eni LNS Ltd                                                    |   | United Kingdom                          |   | 100.00 |
| Eni Mali BV                                                    |   | Netherlands                             |   | 100.00 |
| Eni Marketing Inc                                              |   | United States of America                |   | 100.00 |
| Eni Middle East BV                                             |   | Netherlands                             |   | 100.00 |
| Eni Middle East Ltd                                            |   | United Kingdom                          |   | 100.00 |
| Eni MOG Ltd (in        liquidation)                            |   | United Kingdom                          |   | 100.00 |
| Eni Muara Bakau BV                                             |   | Netherlands                             |   | 100.00 |
| Eni Norge AS                                                   |   | Norway                                  |   | 100.00 |
| Eni North Africa BV                                            |   | Netherlands                             |   | 100.00 |
| Eni North Ganal Ltd                                            |   | United Kingdom                          |   | 100.00 |
| Eni Oil Algeria Ltd                                            |   | United Kingdom                          |   | 100.00 |
| Eni Oil & Gas Inc                                          |   | United States of America                |   | 100.00 |
| Eni Oil Holdings BV                                            |   | Netherlands                             |   | 100.00 |
| Eni Pakistan Ltd                                               |   | United Kingdom                          |   | 100.00 |
| Eni Pakistan (M) Ltd        Sàrl                          |   | Luxembourg                              |   | 100.00 |
| Eni Papalang Ltd                                               |   | United Kingdom                          |   | 100.00 |
| Eni Petroleum Co Inc                                           |   | United States of America                |   | 100.00 |
| Eni Petroleum US Llc                                           |   | United States of America                |   | 100.00 |
| Eni Polska spólka z        ograniczona odpowiedzialnoscia |   | Poland                                  |   | 100.00 |
| Eni Popodi Ltd                                                 |   | United Kingdom                          |   | 100.00 |
| Eni Rapak Ltd                                                  |   | United Kingdom                          |   | 100.00 |
| Eni RD Congo SPRL                                              |   | Democratic Republic of        the Congo |   | 100.00 |
| Eni South Salawati Ltd                                         |   | United Kingdom                          |   | 100.00 |
| Eni TNS Ltd                                                    |   | United Kingdom                          |   | 100.00 |
| Eni Togo BV                                                    |   | Netherlands                             |   | 100.00 |
| Eni Transportation Ltd                                         |   | United Kingdom                          |   | 100.00 |
| Eni Trinidad and Tobago        Ltd                             |   | Trinidad & Tobago                   |   | 100.00 |
| Eni Tunisia BV                                                 |   | Netherlands                             |   | 100.00 |
| Eni UHL Ltd                                                    |   | United Kingdom                          |   | 100.00 |
| Eni UKCS Ltd                                                   |   | United Kingdom                          |   | 100.00 |
| Eni UK Holding Plc                                             |   | United Kingdom                          |   | 100.00 |
| Eni UK Ltd                                                     |   | United Kingdom                          |   | 100.00 |
| Eni Ukraine Holdings BV                                        |   | Netherlands                             |   | 100.00 |
| Eni Ukraine Llc                                                |   | Ukraine                                 |   | 100.00 |
| Eni ULT Ltd                                                    |   | United Kingdom                          |   | 100.00 |
| Eni ULX Ltd                                                    |   | United Kingdom                          |   | 100.00 |
| Eni USA Gas Marketing Llc                                      |   | United States of America                |   | 100.00 |
| Eni USA Inc                                                    |   | United States of America                |   | 100.00 |
| Eni US Operating Co Inc                                        |   | United States of America                |   | 100.00 |
| Eni Venezuela BV                                               |   | Netherlands                             |   | 100.00 |
| Eni West Timor Ltd                                             |   | United Kingdom                          |   | 100.00 |
| First Calgary Petroleums        LP                             |   | United States of America                |   | 100.00 |
| First Calgary Petroleums        Partner Co ULC                 |   | Canada                                  |   | 100.00 |
| Hindustan Oil Exploration        Co Ltd                        |   | India                                   |   | 47.18  |
| Ieoc Exploration BV                                            |   | Netherlands                             |   | 100.00 |
| Ieoc Production BV                                             |   | Netherlands                             |   | 100.00 |
| Lasmo Sanga Sanga Ltd                                          |   | Bermuda                                 |   | 100.00 |

E-11

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##### Table of Contents

| Nigerian Agip Exploration        Ltd                                                                                                                             |   | Nigeria                  |   | 100.00 |
|------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|--------------------------|--------|--------|
| Nigerian Agip Oil Co Ltd                                                                                                                                         |   | Nigeria                  |   | 100.00 |
| OOO 'Eni Energhia'                                                                                                                                               |   | Russia                   |   | 100.00 |
|                                                                                                                                                             |   |                     |   |   |
|                                                                                                                                                             |   |                     |   |   |
| GAS & POWER                                                                                                                                                  |   |                     |   |   |
|                                                                                                                                                             |   |                     |   |   |
| EniPower Mantova SpA                                                                                                                                             |   | Italy                    |   | 86.50  |
| EniPower SpA                                                                                                                                                     |   | Italy                    |   | 100.00 |
| LNG Shipping SpA                                                                                                                                                 |   | Italy                    |   | 100.00 |
| Società EniPower Ferrara        Srl                                                                                                                         |   | Italy                    |   | 51.00  |
| Trans Tunisian Pipeline        Co SpA (former Trans Tunisian Pipeline Co Ltd)                                                                                    |   | Italy                    |   | 100.00 |
|                                                                                                                                                             |   |                     |   |   |
| Adriaplin Podjetje za        distribucijo zemeljskega plina doo Ljubljana                                                                                        |   | Slovenia                 |   | 51.00  |
| Distribuidora de Gas        Cuyana SA                                                                                                                            |   | Argentina                |   | 45.60  |
| Distrigas LNG Shipping SA                                                                                                                                        |   | Belgium                  |   | 100.00 |
| Eni G&P France BV                                                                                                                                            |   | Netherlands              |   | 100.00 |
| Eni G&P Trading BV                                                                                                                                           |   | Netherlands              |   | 100.00 |
| Eni Gas & Power        France SA (former Altergaz SA)                                                                                                        |   | France                   |   | 99.74  |
| Eni Gas & Power GmbH                                                                                                                                         |   | Germany                  |   | 100.00 |
| Eni Gas & Power NV        (former Distrigas NV)                                                                                                              |   | Belgium                  |   | 100.00 |
| Eni Gas Transport        Services SA                                                                                                                             |   | Switzerland              |   | 100.00 |
| Eni Power Generation NV                                                                                                                                          |   | Belgium                  |   | 100.00 |
| Eni Wind Belgium NV                                                                                                                                              |   | Belgium                  |   | 100.00 |
| Finpipe GIE                                                                                                                                                      |   | Belgium                  |   | 63.33  |
| Inversora de Gas Cuyana        SA                                                                                                                                |   | Argentina                |   | 76.00  |
| Société de Service du        Gazoduc Transtunisien SA - Sergaz SA                                                                                      |   | Tunisia                  |   | 66.67  |
| Société pour la        Construction du Gazoduc Transtunisien SA - Scogat SA                                                                            |   | Tunisia                  |   | 100.00 |
| Tigáz Tiszántúli        Gázszolgáltató Zártkörûen Mûködõ        Részvénytársaság |   | Hungary                  |   | 52.77  |
| Tigáz-Dso        Földgázelosztó kft                                                                                                          |   | Hungary                  |   | 52.77  |
|                                                                                                                                                             |   |                     |   |   |
|                                                                                                                                                             |   |                     |   |   |
| REFINING & MARKETING                                                                                                                                         |   |                     |   |   |
|                                                                                                                                                             |   |                     |   |   |
| Costiero Gas Livorno SpA                                                                                                                                         |   | Italy                    |   | 65.00  |
| Ecofuel SpA                                                                                                                                                      |   | Italy                    |   | 100.00 |
| Eni Fuel Centrosud SpA                                                                                                                                           |   | Italy                    |   | 100.00 |
| Eni Fuel Nord SpA                                                                                                                                                |   | Italy                    |   | 100.00 |
| Eni Rete oil&nonoil        SpA                                                                                                                               |   | Italy                    |   | 100.00 |
| Eni trading&shipping        SpA                                                                                                                              |   | Italy                    |   | 100.00 |
| Petrolig Srl                                                                                                                                                     |   | Italy                    |   | 70.00  |
| Petroven Srl                                                                                                                                                     |   | Italy                    |   | 68.00  |
| Raffineria di Gela SpA                                                                                                                                           |   | Italy                    |   | 100.00 |
|                                                                                                                                                             |   |                     |   |   |
| Eni Austria GmbH                                                                                                                                                 |   | Austria                  |   | 100.00 |
| Eni Benelux BV                                                                                                                                                   |   | Netherlands              |   | 100.00 |
| Eni Ceská Republika Sro                                                                                                                                     |   | Czech Republic           |   | 100.00 |
| Eni Deutschland GmbH                                                                                                                                             |   | Germany                  |   | 100.00 |
| Eni Ecuador SA                                                                                                                                                   |   | Ecuador                  |   | 100.00 |
| Eni France Sàrl                                                                                                                                             |   | France                   |   | 100.00 |
| Eni Hungaria Zrt                                                                                                                                                 |   | Hungary                  |   | 100.00 |
| Eni Iberia SLU                                                                                                                                                   |   | Spain                    |   | 100.00 |
| Eni Marketing Austria        GmbH                                                                                                                                |   | Austria                  |   | 100.00 |
| Eni Mineralölhandel GmbH                                                                                                                                    |   | Austria                  |   | 100.00 |
| Eni Romania Srl                                                                                                                                                  |   | Romania                  |   | 100.00 |
| Eni Schmiertechnik GmbH                                                                                                                                          |   | Germany                  |   | 100.00 |
| Eni Slovenija doo                                                                                                                                                |   | Slovenia                 |   | 100.00 |
| Eni Slovensko Spol Sro                                                                                                                                           |   | Slovakia                 |   | 100.00 |
| Eni Suisse SA                                                                                                                                                    |   | Switzerland              |   | 100.00 |
| Eni Trading &        Shipping BV                                                                                                                             |   | Netherlands              |   | 100.00 |
| Eni trading&shipping        Inc                                                                                                                              |   | United States of America |   | 100.00 |
| Eni USA R&M Co Inc                                                                                                                                           |   | United States of America |   | 100.00 |
| Esain SA                                                                                                                                                         |   | Ecuador                  |   | 100.00 |

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##### Table of Contents

| CHEMICALS                                                                                                      |   |                     |   |   |
|----------------------------------------------------------------------------------------------------------------|--------|--------------------------|--------|--------|
|                                                                                                           |   |                     |   |   |
| Versalis SpA (former        Polimeri Europa SpA)                                                               |   | Italy                    |   | 100.00 |
|                                                                                                           |   |                     |   |   |
| Dunastyr        Polisztirolgyártó Zártkoruen Mukodo        Részvénytársaság |   | Hungary                  |   | 100.00 |
| Eni Chemicals Trading        (Shanghai) Co Ltd                                                                 |   | China                    |   | 100.00 |
| Polimeri Europa France        SAS                                                                              |   | France                   |   | 100.00 |
| Polimeri Europa GmbH                                                                                           |   | Germany                  |   | 100.00 |
| Polimeri Europa Ibérica        SA                                                                         |   | Spain                    |   | 100.00 |
| Polimeri Europa UK Ltd                                                                                         |   | United Kingdom           |   | 100.00 |
| Versalis International SA        (former Polimeri Europa Benelux SA)                                           |   | Belgium                  |   | 100.00 |
| Versalis Pacific Trading        (Shanghai) Co Ltd                                                              |   | China                    |   | 100.00 |
|                                                                                                           |   |                     |   |   |
|                                                                                                           |   |                     |   |   |
| ENGINEERING &        CONSTRUCTION                                                                          |   |                     |   |   |
|                                                                                                           |   |                     |   |   |
| Saipem SpA                                                                                                     |   | Italy                    |   | 43.12  |
| Denuke Scarl                                                                                                   |   | Italy                    |   | 23.72  |
| Servizi Energia Italia        SpA                                                                              |   | Italy                    |   | 43.12  |
| SnamprogettiChiyoda SAS        di Saipem SpA                                                                   |   | Italy                    |   | 43.08  |
|                                                                                                           |   |                     |   |   |
| Andromeda Consultoria        Tecnica e Representações Ltda                                           |   | Brazil                   |   | 43.12  |
| Boscongo SA                                                                                                    |   | Republic of the Congo    |   | 43.12  |
| Construction Saipem        Canada Inc                                                                          |   | Canada                   |   | 43.12  |
| ER SAI Caspian Contractor        Llc                                                                           |   | Kazakhstan               |   | 21.56  |
| ERS - Equipment Rental        & Services BV                                                                |   | Netherlands              |   | 43.12  |
| ERSAI Marine Llc                                                                                               |   | Kazakhstan               |   | 21.56  |
| Global Petroprojects        Services AG                                                                        |   | Switzerland              |   | 43.12  |
| Moss Maritime AS                                                                                               |   | Norway                   |   | 43.12  |
| Moss Maritime Inc                                                                                              |   | United States of America |   | 43.12  |
| North Caspian Service Co                                                                                       |   | Kazakhstan               |   | 43.12  |
| Petrex SA                                                                                                      |   | Peru                     |   | 43.12  |
| Professional Training        Center Llc                                                                        |   | Kazakhstan               |   | 21.56  |
| PT Saipem Indonesia                                                                                            |   | Indonesia                |   | 43.12  |
| Saigut SA de Cv                                                                                                |   | Mexico                   |   | 43.12  |
| Saimexicana SA de Cv                                                                                           |   | Mexico                   |   | 43.12  |
| Saipem (Beijing)        Technical Services Co Ltd                                                              |   | China                    |   | 43.12  |
| Saipem (Malaysia) Sdn Bhd                                                                                      |   | Malaysia                 |   | 17.84  |
| Saipem (Nigeria) Ltd                                                                                           |   | Nigeria                  |   | 38.55  |
| Saipem (Portugal)        Comércio Marítimo, Sociedade Unipessoal Lda                                 |   | Portugal                 |   | 43.12  |
| Saipem America Inc                                                                                             |   | United States of America |   | 43.12  |
| Saipem Asia Sdn Bhd                                                                                            |   | Malaysia                 |   | 43.12  |
| Saipem Australia Pty Ltd                                                                                       |   | Australia                |   | 43.12  |
| Saipem Contracting        (Nigeria) Ltd                                                                        |   | Nigeria                  |   | 42.23  |
| Saipem Contracting        Algérie SpA                                                                     |   | Algeria                  |   | 43.12  |
| Saipem Contracting        Netherlands BV                                                                       |   | Netherlands              |   | 43.12  |
| Saipem do Brasil        Serviçõs de Petroleo Ltda                                                    |   | Brazil                   |   | 43.12  |
| Saipem Drilling Co        Private Ltd                                                                          |   | India                    |   | 43.12  |
| Saipem Drilling Norway AS                                                                                      |   | Norway                   |   | 43.12  |
| Saipem India Projects Ltd                                                                                      |   | India                    |   | 43.12  |
| Saipem International BV                                                                                        |   | Netherlands              |   | 43.12  |
| Saipem Libya Llc -        SA.LI.CO. Llc                                                                        |   | Libya                    |   | 43.12  |
| Saipem Ltd                                                                                                     |   | United Kingdom           |   | 43.12  |
| Saipem Luxembourg SA                                                                                           |   | Luxembourg               |   | 43.12  |
| Saipem Maritime Asset        Management Luxembourg Sàrl                                                   |   | Luxembourg               |   | 43.12  |
| Saipem Mediteran Usluge        doo (in liquidation)                                                            |   | Croatia                  |   | 43.12  |
| Saipem Misr for Petroleum        Services SAE                                                                  |   | Egypt                    |   | 43.12  |
| Saipem Norge AS                                                                                                |   | Norway                   |   | 43.12  |
| Saipem Offshore Norway AS                                                                                      |   | Norway                   |   | 43.12  |
| Saipem SA                                                                                                      |   | France                   |   | 43.12  |
| Saipem Services México        SA de Cv                                                                    |   | Mexico                   |   | 43.12  |
| Saipem Services SA                                                                                             |   | Belgium                  |   | 43.12  |
| Saipem Singapore Pte Ltd                                                                                       |   | Singapore                |   | 43.12  |

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##### Table of Contents

| Saipem UK Ltd (in        liquidation)                                                              |   | United Kingdom           |   | 43.12  |
|----------------------------------------------------------------------------------------------------|--------|--------------------------|--------|--------|
| Saipem Ukraine Llc                                                                                 |   | Ukraine                  |   | 43.12  |
| Sajer Iraq Co for        Petroleum Services Trading General Contracting &        Transport Llc |   | Iraq                     |   | 25.87  |
| Saudi Arabian Saipem Ltd                                                                           |   | Saudi Arabia             |   | 25.87  |
| Sigurd Rück AG                                                                                |   | Switzerland              |   | 43.12  |
| Snamprogetti Canada Inc                                                                            |   | Canada                   |   | 43.12  |
| Snamprogetti Engineering        BV                                                                 |   | Netherlands              |   | 43.12  |
| Snamprogetti Ltd (in        liquidation)                                                           |   | United Kingdom           |   | 43.12  |
| Snamprogetti Lummus Gas        Ltd                                                                 |   | Malta                    |   | 42.69  |
| Snamprogetti Netherlands        BV                                                                 |   | Netherlands              |   | 43.12  |
| Snamprogetti Romania Srl                                                                           |   | Romania                  |   | 43.12  |
| Snamprogetti Saudi Arabia        Co Ltd Llc                                                        |   | Saudi Arabia             |   | 43.12  |
| Sofresid Engineering SA                                                                            |   | France                   |   | 43.12  |
| Sofresid SA                                                                                        |   | France                   |   | 43.12  |
| Sonsub International Pty        Ltd                                                                |   | Australia                |   | 43.12  |
| Varisal - Serviços de        Consultadoria e Marketing Unipessoal Lda                         |   | Portugal                 |   | 43.12  |
|                                                                                               |   |                     |   |   |
|                                                                                               |   |                     |   |   |
| OTHER ACTIVITIES                                                                                   |   |                     |   |   |
|                                                                                               |   |                     |   |   |
| Syndial SpA - Attività        Diversificate                                                   |   | Italy                    |   | 100.00 |
| Ing. Luigi Conti Vecchi        SpA                                                                 |   | Italy                    |   | 100.00 |
|                                                                                               |   |                     |   |   |
|                                                                                               |   |                     |   |   |
| CORPORATE AND FINANCIAL        COMPANIES                                                           |   |                     |   |   |
|                                                                                               |   |                     |   |   |
| Agenzia Giornalistica        Italia SpA                                                            |   | Italy                    |   | 100.00 |
| Eni Adfin SpA (former Eni        Administration & Financial Service SpA)                       |   | Italy                    |   | 99.63  |
| Eni Corporate University        SpA                                                                |   | Italy                    |   | 100.00 |
| EniServizi SpA                                                                                     |   | Italy                    |   | 100.00 |
| Serfactoring SpA                                                                                   |   | Italy                    |   | 48.82  |
| Servizi Aerei SpA                                                                                  |   | Italy                    |   | 100.00 |
|                                                                                               |   |                     |   |   |
| Banque Eni SA                                                                                      |   | Belgium                  |   | 100.00 |
| Eni Finance International        SA                                                                |   | Belgium                  |   | 100.00 |
| Eni Finance USA Inc                                                                                |   | United States of America |   | 100.00 |
| Eni Insurance Ltd                                                                                  |   | Ireland                  |   | 100.00 |
| Eni International BV                                                                               |   | Netherlands              |   | 100.00 |

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##### Table of Contents

**EXHIBIT 11**

**Code of Ethics**

Approved by the Board of Directors of Eni SpAon March 14, 2008The English text is a translation of the Italian official"Code of Ethics"For any conflict or discrepancies between the two texts theItalian text shall prevail

 

TABLE OF CONTENTS

Foreword

**I. GENERAL PRINCIPLES: SUSTAINABILITY AND CORPORATERESPONSIBILITY**

**II. BEHAVIOUR RULES AND RELATIONS WITH STAKEHOLDERS1. Ethics, transparency, fairness, professionalism2. Relations with shareholders and with the Market**2.1. Value for shareholders, efficiency, transparency2.2. Self-Regulatory Code2.3. Company information2.4. Privileged information2.5. Media**3. Relations with institutions, associations, localcommunities**3.1. Authorities and Public Institutions3.2. Political organizations and trade unions3.3. Development of local Communities3.4. Promotion of "non profit" activities**4. Relations with customers and suppliers**4.1. Customers and consumers4.2. Suppliers and external collaborators**5. Eni’s management, employees, collaborators**5.1. Development and protection of Human Resources5.2. Knowledge Management5.3. Corporate security5.4. Harassment or mobbing in the workplace5.5. Abuse of alcohol or drugs and no smoking

**III. TOOLS FOR IMPLEMENTING THE CODE OF ETHICS1. System of internal control**1.1. Conflicts of interest1.2. Transparency of accounting records**2. Health, safety, environment and public safety protection3. Research, innovation and intellectual property protection4. Confidentiality**4.1. Protection of business secret4.2. Protection of privacy4.3. Membership in associations, participation in initiatives,events or external meetings

**IV. CODE OF ETHICS SCOPE OF APPLICATION AND REFERENCESTRUCTURES1. Obligation to know the Code and to report any possibleviolation thereof2. Reference structures and supervision**2.1. Guarantor of the Code of Ethics2.2. Code Promotion Team**3. Code review4. Contractual value of the Code**

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##### Table of Contents

**FOREWORD**

Eni1 is an internationally orientedindustrial group which, because of its size and the importance ofits activities, plays a significant role in the marketplace andin the economic development and welfare of the individuals whowork or collaborate with Eni and of the communities where it ispresent.

The complexity of the situations in which Enioperates, the challenges of sustainable development and the needto take into consideration the interests of all people having alegitimate interest in the corporate business("Stakeholders"), strengthen the importance to clearlydefine the values that Eni accepts, acknowledges and shares aswell as the responsibilities it assumes, contributing to a betterfuture for everybody.

For this reason the new Eni’s Code ofEthics ("Code" or "Code of Ethics") has beendevised.

Compliance with the Code by Eni’sdirectors, statutory auditors, management and employees as wellas by all those who operate in Italy and abroad for achievingEni’s objectives ("Eni’s People"), eachwithin their own functions and responsibilities, is of paramountimportance – also pursuant to legal and contractualprovisions governing the relationship with Eni – forEni’s efficiency, reliability and reputation, which are allcrucial factors for its success and for improving the socialsituation in which Eni operates.

Eni undertakes to promote knowledge of the Codeamong Eni’s People and the other Stakeholders, and to accepttheir constructive contribution to the Code’s principles andcontents. Eni undertakes to take into consideration anysuggestions and remarks of Stakeholders, with the objective ofconfirming or integrating the Code.

Eni carefully checks for compliance with theCode by providing suitable information, prevention and controltools and ensuring transparency in all transactions andbehaviours by taking corrective measures if and as required.

The Watch Structure of each Eni companyperforms the functions of guarantor of the Code of Ethics("Guarantor").

The Code is brought to the attention of everyperson or body having business relations with Eni.

 

 

 

----

| (1) |   | "Eni"        means Eni SpA and its direct and indirect subsidiaries,        in Italy and abroad. |
|-----|--------|------------------------------------------------------------------------------------------------------------|

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**I. GENERAL PRINCIPLES:SUSTAINABILITY AND CORPORATE RESPONSIBILITY**

Compliance with the law, regulations, statutoryprovisions, self-regulatory codes, ethical integrity andfairness, is a constant commitment and duty of all Eni’sPeople, and characterizes the conduct of Eni’s entireorganization.Eni’s business and corporate activities has to be carriedout in a transparent, honest and fair way, in good faith, and infull compliance with competition protection rules.Eni undertakes to maintain and strengthen a governance system inline with international best practice standards, able to dealwith the complex situations in which Eni operates, and with thechallenges to face for sustainable development.Systematic methods for involving Stakeholders are adopted,fostering dialogue on sustainability and corporateresponsibility.In conducting both its activities as an international company andthose with its partners, Eni stands up for the protection andpromotion of human rights – inalienable and fundamentalprerogatives of human beings and basis for the establishment ofsocieties founded on principles of equality, solidarity,repudiation of war, and for the protection of civil and politicalrights, of social, economic and cultural rights and the so-calledthird generation rights (selfdetermination right, right to peace,right to development and protection of the environment).Any form of discrimination, corruption, forced or child labor isrejected. Particular attention is paid to the acknowledgement andsafeguarding of the dignity, freedom and equality of humanbeings, to protection of labor and of the freedom of trade unionassociation, of health, safety, the environment and biodiversity,as well as the set of values and principles concerningtransparency, energy efficiency and sustainable development, inaccordance with International Institutions and Conventions.In this respect Eni operates within the reference framework ofthe United Nations Universal Declaration of Human Rights, theFundamental Conventions of the ILO – International LaborOrganization – and the OECD Guidelines on MultinationalEnterprises.All Eni’s People, without any distinction or exceptionwhatsoever, respect the principles and contents of the Code intheir actions and behaviours while performing their functions andaccording to their responsibilities, because compliance with theCode is fundamental for the quality of their working andprofessional performance. Relationships among Eni’s People,at all levels, must be characterized by honesty, fairness,cooperation, loyalty and mutual respect.The belief that one is acting in favor or to the advantage of Enican never, in any way, justify – not even in part – anybehaviours that conflict with the principles and contents of theCode.

 

**II. BEHAVIOUR RULES ANDRELATIONS WITH STAKEHOLDERS**

**1. ETHICS, TRANSPARENCY, FAIRNESS,PROFESSIONALISM**

In conducting its business, Eni is inspired byand complies with the principles of loyalty, fairness,transparency, efficiency and an open market, regardless of theimportance level of the transaction in question.Any action, transaction and negotiation performed and, generally,the conduct of Eni’s People in the performance of theirduties is inspired by the highest principles of fairness,completeness and transparency of information and legitimacy, bothin form and substance, as well as clarity and truthfulness of allaccounting documents, in compliance with the applicable laws inforce and internal regulations.All Eni’s activities have to be performed with the utmostcare and professional skill, with the duty to provide skills andexpertise adequate to the tasks assigned, and to act in a waycapable to protect Eni’s image and reputation. Corporateobjectives, as well as the proposal and implementation ofprojects, investments and actions, have to be aimed at improvingthe company’s assets, management, technological andinformation level in the long term, and at creating value andwelfare for all Stakeholders.Bribes, illegitimate favours, collusion, requests for personalbenefits for oneself or others, either directly or through thirdparties, are prohibited without any exception.It is prohibited to pay or offer, directly or indirectly, moneyand material benefits and other advantages of any kind to thirdparties, whether representatives of governments, public officersand public servants or private employees, in order to influenceor remunerate the actions of their office.Commercial courtesy, such as small gifts or forms of hospitality,is only allowed when its value is small and it does notcompromise the integrity and reputation of either party, andcannot be construed by an impartial observer as aimed atobtaining undue advantages. In any case, these expenses mustalways be authorized by the designated managers as per existinginternal rules, and be accompanied by appropriate documentation.It is forbidden to accept money from individuals or companiesthat have or intend to have business relations with Eni. Anyonewho receives proposals of gifts or special or hospitalitytreatment that cannot be considered as commercial courtesy ofsmall value, or requests therefore by third parties, shall rejectthem and immediately inform their superior, or the body theybelong to, as well as the Guarantor.Eni shall properly inform all third parties about the commitmentsand obligations provided for in the Code, require third partiesto respect the principles of the Code relevant to theiractivities and take proper internal actions and, if the matter iswithin its own competence, external actions in the event that anythird party should fail to comply with the Code.

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**2. RELATIONS WITH SHAREHOLDERS AND WITH THEMARKET**

**2.1. Value for shareholders, efficiency,transparency**The internal structure of Eni and the relations with theparties directly and indirectly taking part in its activities areorganized according to rules able to ensure managementreliability and a fair balance between the management’spowers and the interests of shareholders and of the otherStakeholders in general as well as transparency and markettraceability of management decisions and general corporate eventswhich may considerably influence the market value of thefinancial instruments issued.Within the framework of the initiatives aimed at maximizing thevalue for shareholders and at guaranteeing transparency of themanagement’s work, Eni defines, implements and progressivelyadjusts a coordinated and homogeneous set of behaviour rulesconcerning both its internal organizational structure andrelations with shareholders and third parties, in compliance withthe highest corporate governance standards at national andinternational level, based on the awareness that thecompany’s capacity to impose efficient and effectivefunctioning rules upon itself is a fundamental tool forstrengthening its reputation in terms of reliability andtransparency as well as Stakeholders’ trust.Eni deems it necessary that shareholders are enabled toparticipate in decisions which come within the limits of theircompetence and make informed choices. Therefore, Eni undertakesto ensure maximum transparency and timeliness of informationcommunicated to shareholders and to the market – by means ofthe corporate internet site, too – in compliance with thelaws and regulations applicable to listed companies. Moreover,Eni undertakes to keep in due consideration the legitimateremarks expressed by shareholders whenever they are entitled todo so.

**2.2. Self-Regulatory Code**The main corporate governance rules of Eni are contained inthe Self-Regulatory Code of Eni SpA, adopted in compliance withthe Code promoted by Borsa Italiana SpA, which is referred toherein as far as applicable.

**2.3. Company information**Eni ensures the correct management of company information, bymeans of suitable procedures for in-house management andcommunication to the outside.

**2.4. Privileged information**All Eni’s People are required, while performing thetasks entrusted to them, to properly manage privilegedinformation such as to know and comply with corporate proceduresreferring to market abuse. Insider trading and any behaviour thatmay promote insider trading are expressly forbidden. In any case,the purchase or sale of shares of Eni or of companies outside Enishall always be based on absolute and transparent fairness.

**2.5. Media**Eni undertakes to provide outside parties with true, prompt,transparent and accurate information.Relations with the media are exclusively dealt with by thedepartments and managers specifically appointed to do so;information to be supplied to media representatives, as well asthe undertaking to provide such information, have to be agreedupon beforehand by Eni’s People with the relevant EniCorporate structure.

**3. RELATIONS WITH INSTITUTIONS, ASSOCIATIONS,LOCAL COMMUNITIES**

Eni encourages dialogue with Institutions andwith organized associations of civil society in all the countrieswhere it operates.

**3.1. Authorities and Public Institutions**Eni, through its People, actively and fully cooperates withAuthorities.Eni’s People, as well as external collaborators whoseactions may somehow be referred to Eni, must have behaviourstowards the Public Administration characterized by fairness,transparency and traceability. These relations have to beexclusively dealt with by the departments and individualsspecifically appointed to do so, in compliance with approvedplans and corporate procedures.The departments of the subsidiaries concerned shall coordinatewith the relevant Eni Corporate structure for assessing thequality of the interventions to be carried out and for thesharing, implementing and monitoring of their actions.It is forbidden to make, induce or encourage false statements toAuthorities.

**3.2. Political organizations and tradeunions**Eni does not make any direct or indirect contributions inwhatever form to political parties, movements, committees,political organizations and trade unions, nor to theirrepresentatives and candidates, except those specificallycontemplated by applicable laws and regulations.

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**3.3. Development of local Communities**Eni is committed to actively contribute to promoting thequality of life, the socio-economic development of thecommunities where Eni operates and to the development of theirhuman resources and capabilities, while conducting its businessactivities according to standards that are compatible with faircommercial practices.Eni’s activities are carried out in the awareness of thesocial responsibility that Eni has towards all of itsStakeholders and in particular the local communities in which itoperates, in the belief that the capacity for dialogue andinteraction with civil society constitutes an important asset forthe company. Eni respects the cultural, economic and socialrights of the local communities in which it operates andundertakes to contribute, as far as possible, to their exercise,with particular reference to the right to adequate nutrition,drinking water, the highest achievable level of physical andmental health, decent dwellings, education, abstaining fromactions that may hinder or prevent the exercise of such rights.Eni promotes transparency of the information addressed to localcommunities, with particular reference to the topics that theyare most interested in. Forms of continuous and informedconsultancy are either promoted, through the relevant Enistructures, in order to take into due consideration thelegitimate expectations of local communities in conceiving andconducting corporate activities and in order to promote a properredistribution of the profits deriving from such activities.Eni, therefore, undertakes to promote the knowledge of itscorporate values and principles, at every level of itsorganization, also through adequate control procedures, and toprotect the rights of local communities, with particularreference to their culture, institutions, ties and life styles.Within the framework of their respective responsibilities,Eni’s People are required to participate in the definitionof single initiatives in compliance with Eni’s policies andintervention programs, to implement them according to criteria ofabsolute transparency and support them as an integral part ofEni’s objectives.

**3.4. Promotion of "non profit"activities**The philanthropic activity of Eni is in line with its visionand attention to sustainable development.Therefore, Eni undertakes to foster and support, as well as topromote among its People, its "non profit" activitieswhich demonstrate the company’s commitment to help meet theneeds of those communities where it operates.

**4. RELATIONS WITH CUSTOMERS AND SUPPLIERS**

**4.1 Customers and consumers**Eni pursues its business success on markets by offeringquality products and services under competitive conditions whilerespecting the rules protecting fair competition.Eni undertakes to respect the right of consumers not to receiveproducts harmful to their health and physical integrity and toget complete information on the products offered to them.Eni acknowledges that the esteem of those requesting products orservices is of primary importance for success in business.Business policies are aimed at ensuring the quality of goods andservices, safety and compliance with the precautionary principle.Therefore, Eni’s People shall:

| • |   | comply with        in-house procedures concerning the management of        relations with customers and consumers;                                                                                                             |
|--------|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| • |   | supply, with        efficiency and courtesy, within the limits set by the        contractual conditions, high-quality products meeting the        reasonable expectations and needs of customers and        consumers;         |
| • |   | supply        accurate and exhaustive information on products and        services and be truthful in advertisements or other kind        of communication, so that customers and consumers can        make informed decisions. |

**4.2. Suppliers and external collaborators**Eni undertakes to look for suppliers and externalcollaborators with suitable professionalism and committed tosharing the principles and contents of the Code and promotes theestablishment of long-lasting relations for the progressiveimprovement of performances while protecting and promoting theprinciples and contents of the Code.In relationships regarding tenders, procurement and, generally,the supply of goods and/or services and of externalcollaborations (including consultants, agents, etc.), Eni’sPeople shall:

| • |   | follow        internal procedures concerning selection and relations        with suppliers and external collaborators and abstain        from excluding any supplier meeting requirements from        bidding for Eni’s orders; adopt appropriate and        objective selection methods, based on established,        transparent criteria; |
|--------|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| • |   | secure the        cooperation of suppliers and external collaborators in        guaranteeing the continuous satisfaction of Eni’s        customers and consumers, to an extent adequate to that        legitimately expected by them, in terms of quality, costs        and delivery times; |
|--------|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| • |   | use as much        as possible, in compliance with the laws in force and the        criteria for legality of transactions with related        parties, products and services supplied by Eni companies        at arm’s length and market conditions;                                        |
| • |   | state in        contracts the Code acknowledgement and the obligation to        comply with the principles contained therein;                                                                                                                                                                    |
| • |   | comply with,        and demand compliance with, the conditions contained in        contracts;                                                                                                                                                                                                    |
| • |   | maintain a        frank and open dialogue with suppliers and external        collaborators in line with good commercial practice;        promptly inform superiors, and the Guarantor, about any        possible violations of the Code;                                                         |

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| • |   | inform the        relevant Eni Corporate structure about any serious        problems that may arise with a particular supplier or        external collaborator, in order to evaluate possible        consequences for Eni. |
|--------|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

The remuneration to be paid shall beexclusively proportionate to the services to be rendered anddescribed in the contract and payments shall not be allowed toany party different from the contract party nor in a thirdCountry different from the one of the parties or where thecontract has to be performed.

**5. ENI’S MANAGEMENT, EMPLOYEES, COLLABORATORS**

**5.1. Development and protection of HumanResources**People are basic components in the company’s life. Thededication and professionalism of management and employeesrepresent fundamental values and conditions for achievingEni’s objectives.Eni is committed to developing the abilities and skills ofmanagement and employees so that their energy and creativity canhave full expression for the fulfilment of their potential intheir working performance, such as to protect working conditionsas regards both mental and physical health and dignity. Unduepressure or discomfort is not allowed, while appropriate workingconditions promoting development of personality andprofessionalism are fostered.Eni undertakes to offer, in full compliance with applicable legaland contractual provisions, equal opportunities to all itsemployees, making sure that each of them receives a fairstatutory and wage treatment exclusively based on merit andexpertise, without discrimination of any kind. Competentdepartments shall:

| • |   | adopt in any        situation criteria of merit and ability (and anyhow        strictly professional) in all decisions concerning human        resources;                              |
|--------|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| • |   | select, hire,        train, compensate and manage human resources without        discrimination of any kind;                                                                           |
| • |   | create a        working environment where personal characteristics or        beliefs do not give rise to discrimination and which        allows the serenity of all Eni’s People. |

Eni wishes that Eni’s People, at everylevel, cooperate in maintaining a climate of common respect for aperson’s dignity, honour and reputation. Eni shall do itsbest to prevent attitudes that can be considered as offensive,discriminatory or abusive. In this regard, any behaviours outsidethe working place which are particularly offensive to publicsensitivity are also deemed relevant.In any case, any behaviours constituting physical or moralviolence are forbidden without any exception.

**5.2. Knowledge Management**Eni promotes culture and the initiatives aimed atdisseminating knowledge within its structures, and at pointingout the values, principles, behaviours and contributions in termsof innovation of professional families in connection with thedevelopment of business activities and to the company’ssustainable growth.Eni undertakes to offer tools for interaction among the membersof professional families, working groups and communities ofpractice, as well as for coordination and access to know-how, andshall promote initiatives for the growth, dissemination andsystematization of knowledge relating to the core competences ofits structures and aimed at defining a reference frameworksuitable for guaranteeing operating consistency.All Eni’s People shall actively contribute to KnowledgeManagement as regards the activities that they are in charge of,in order to optimize the system for knowledge sharing anddistribution among individuals.

**5.3. Corporate security**Eni engages in the study, development and implementation ofstrategies, policies and operational plans aimed at preventingand overcoming any intentional or non-intentional behaviour whichmay cause direct or indirect damage to Eni’s People and/orto the tangible and intangible resources of the company.Preventive and defensive measures, aimed at minimizing the needfor an active response – always in proportion to the attack– to threats to people and assets, are favored.All Eni’s People shall actively contribute to maintaining anoptimal corporate security standard, abstaining from unlawful ordangerous behaviours, and reporting any possible activitiescarried out by third parties to the detriment of Eni’sassets or human resources to superiors or to the body they belongto, as well as to the relevant Eni Corporate structure.In any case requiring particular attention to personal safety, itis compulsory to strictly follow the indications in this regardsupplied by Eni, abstaining from behaviours which may endangerone’s own safety or the safety of others, promptly reportingany danger for one’s own safety, or the safety of thirdparties, to one’s superior.

**5.4. Harassment or mobbing in the workplace**Eni supports any initiatives aimed at implementing workingmethods for the achievement of a better organization.Eni demands that there shall be no harassment or mobbingbehaviours in personal working relationships either inside oroutside the company. Such behaviours are all forbidden, withoutexceptions, and are:

| • |   | the creation        of an intimidating, hostile, isolating or in any case        discriminatory environment for individual employees or        groups of employees;                     |
|--------|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| • |   | unjustified        interference in the work performed by others;                                                                                                                        |
| • |   | the placing        of obstacles in the way of the work prospects and        expectations of others merely for reasons of personal        competitiveness or because of other employees. |

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Any form of violence or harassment, eithersexual harassment or harassment based on personal and culturaldiversity, is forbidden. Such harassment is for instance:

| • |   | subordinating        decisions on someone’s working life to the        acceptance of sexual attentions, or personal and cultural        diversity; |
|--------|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------|
| • |   | obtaining        sexual attentions using the influence of one’s role;                                                                              |
| • |   | proposing        private interpersonal relations despite the        recipient’s explicit or reasonably clear distaste;                             |

| • |   | alluding to        disabilities and physical or psychic impairment, or to        forms of cultural, religious or sexual diversity. |
|--------|--------|------------------------------------------------------------------------------------------------------------------------------------|

**5.5. Abuse of alcohol or drugs and nosmoking**All Eni’s People shall personally contribute topromoting and maintaining a climate of common respect in theworkplace; particular attention is paid to respect of thefeelings of others.Eni will therefore consider individuals who work under the effectof alcohol or drugs, or substances with similar effect, duringthe performance of their work activities and in the workplace, asbeing aware of the risk they cause. Chronic addiction to suchsubstances, when it affects work performance, shall be consideredsimilar to the above mentioned events in terms of contractualconsequences; Eni is committed to favour social action in thisfield as provided for by employment contracts.It is forbidden to:

| • |   | hold,        consume, offer or give for whatever reason, drugs or        substances with similar effect, at work and in the        workplace;                                                                                                                                                                                                                                                                                                           |
|--------|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| • |   | smoke in the        workplace. Eni supports voluntary initiatives addressed        to People to help them quit smoking and, in identifying        possible smoking areas, shall take into particular        consideration the condition of those suffering physical        discomfort from exposure to smoke in the workplace shared        with smokers and requesting to be protected from        "passive smoking" in their place of work. |

 

**III. TOOLS FOR IMPLEMENTINGTHE CODE OF ETHICS**

**1. SYSTEM OF INTERNAL CONTROL**

Eni undertakes to promote and maintain anadequate system of internal control, i.e. all the necessary oruseful tools for addressing, managing and checking activities inthe company, aimed at ensuring compliance with corporate laws andprocedures, at protecting corporate assets, efficiently managingactivities and providing precise and complete accounting andfinancial information.The responsibility for implementing an effective system ofinternal control is shared at every level of Eni’sorganizational structure; therefore, all Eni’s People,according to their functions and responsibilities, shall defineand actively participate in the correct functioning of the systemof internal control.Eni promotes the dissemination, at every level of itsorganization, of policies and procedures characterized byawareness of the existence of controls and by an informed andvoluntary control oriented mentality; consequently, Eni’smanagement in the first place and all Eni’s People in anycase shall contribute to and participate in Eni’s system ofinternal control and, with a positive attitude, involve itscollaborators in this respect.Each employee shall be held responsible for the corporatetangible and intangible assets relevant to his/her job. Noemployee can make, or let others make, improper use of assets andequipment belonging to Eni.Any practices and attitudes linked to the perpetration or to theparticipation in the perpetration of frauds are forbidden withoutany exception.Control and supervisory bodies, Eni Internal Audit department andappointed auditing companies shall have full access to all data,documents and information necessary to perform their own relevantactivities.

**1.1. Conflicts of interest**Eni acknowledges and respects the right of its People to takepart in investments, business and other kinds of activities otherthan the activity performed in the interest of Eni, provided thatsuch activities are permitted by law and are compatible with theobligations assumed towards Eni. The Self-Regulatory Code of EniSpA governs any possible conflict of interest of directors andstatutory auditors of Eni SpA.Eni’s management and employees shall avoid and report anyconflicts of interest between personal and family economicactivities and their tasks within the company. In particular,everyone shall point out any specific situations and activitiesof economic or financial interest (owner or member) to them or,as far as they know, of economic or financial interest torelatives of theirs or relatives by marriage within the 2nddegree of kinship, or to persons actually living with them, alsoinvolving suppliers, customers, competitors, third parties, orthe relevant controlling companies or subsidiaries, and shallpoint whether they perform corporate administration or control ormanagement functions therein.Moreover, conflicts of interest are determined by the followingsituations:

| • |   | use of        one’s position in the company, or of information, or        of business opportunities acquired during one’s        work, to one’s undue benefit or to the undue benefit        of third parties; |
|--------|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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| • |   | the        performing of any type of work for suppliers,        sub-suppliers and competitors by employees and/or their        relatives. |
|--------|--------|-------------------------------------------------------------------------------------------------------------------------------------------|

In any case, Eni’s management andemployees shall avoid any situation and activity where a conflictwith the Company’s interests may arise, or which caninterfere with their ability to make impartial decisions in thebest interests of Eni and in full accordance with the principlesand contents of the Code, or in general with their ability tofully comply with their functions and responsibilities. Anysituation that may constitute or give rise to a conflict ofinterest shall be immediately reported to one’s superiorwithin management, or to the body one belongs to, and to theGuarantor. Furthermore, the party concerned shall abstain fromtaking part in the operational/decision-making process, and therelevant superior within management, or the relevant body, shall:

| • |   | identify the        operational solutions suitable for ensuring, in the        specific case, transparency and fairness of behaviours in        the performance of activities;   |
|--------|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| • |   | transmit to        the parties concerned – and for information to        one’s superior, as well as to the Guarantor –        the necessary written instructions; |
| • |   | file the        received and transmitted documentation.                                                                                                                          |

**1.2.Transparency of accounting records**Accounting transparency is grounded on the use of true,accurate and complete information which form the basis for theentries in the books of accounts. Each member of company bodies,of management or employee shall cooperate, within their own fieldof competence, in order to have operational events properly andtimely registered in the books of accounts.It is forbidden to behave in a way that may adversely affecttransparency and traceability of the information within financialstatements.For each transaction, the proper supporting evidence has to bemaintained in order to allow:

| • |   | easy and        punctual accounting entries;                                                                                     |
|--------|--------|----------------------------------------------------------------------------------------------------------------------------------|
| • |   | identification        of different levels of responsibility, as well as of task        distribution and segregation;             |
| • |   | accurate        representation of the transaction so as to avoid the        probability of any material or interpretative error. |

Each record shall reflect exactly what is shownby the supporting evidence. All Eni’s People shall causethat the documentation can be easily traced and filed accordingto logical criteria.Eni’s People who become aware of any omissions, forgery,negligence in accounting or in the documents on which accountingis based, shall bring the facts to the attention of theirsuperior, or to the body they belong to, and to the Guarantor.

**2. HEALTH, SAFETY, ENVIRONMENT AND PUBLIC SAFETY PROTECTION**

Eni’s activities shall be carried out incompliance with applicable worker health and safety,environmental and public safety protection agreements,international standards and laws, regulations, administrativepractices and national policies of the Countries where itoperates.Eni actively contributes as appropriate to the promotion ofscientific and technological development aimed at protecting theenvironment and natural resources. The operative management ofsuch activities shall be carried out according to advancedcriteria for the protection of the environment and energyefficiency, with the aim of creating better working conditionsand protecting the health and safety of employees as well as theenvironment.Eni’s People shall, within their areas of responsibility,actively participate in the process of risk prevention as well asenvironmental, public safety and health protection forthemselves, their colleagues and third parties.

**3. RESEARCH, INNOVATION AND INTELLECTUAL PROPERTY PROTECTION**

Eni promotes research and innovation activitiesby management and employees, within their functions andresponsibilities. Any intellectual assets generated by suchactivities are an important and fundamental heritage of Eni.Research and innovation focus in particular on the promotion ofproducts, tools, processes and behaviours supporting energyefficiency, reduction of environmental impact, attention tohealth and safety of employees, of customers and of the localcommunities where Eni operates, and in general sustainability ofbusiness activities.Eni’s People shall actively contribute, within theirfunctions and responsibilities, to managing intellectual propertyin order to allow its development, protection and enhancement.

**4. CONFIDENTIALITY**

**4.1. Protection of business secret**Eni’s activities constantly require the acquisition,storing, processing, communication and dissemination ofinformation, documents and other data regarding negotiations,administrative proceedings, financial transactions, and know-how(contracts, deeds, reports, notes, studies, drawings, pictures,software, etc.) that may not be disclosed to the 

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outside pursuant to contractual agreements, orwhose inopportune or untimely disclosure may be detrimental tocorporate interest.Without prejudice to the transparency of the activities carriedout and to the information obligations imposed by the provisionsin force, Eni’s People shall ensure the confidentialityrequired by the circumstances for each piece of news they havegot to know of because of their working function.Any information, knowledge and data acquired or processed duringone’s work or because of one’s tasks at Eni, belong toEni and may not be used, communicated or disclosed withoutspecific authorization of one’s superior within managementin compliance with specific procedures.

**4.2. Protection of privacy**Eni is committed to protecting information concerning itsPeople and third parties, whether generated or obtained insideEni or in the conduct of Eni’s business, and to avoidingimproper use of any such information.Eni intends to guarantee that processing of personal data withinits structures respects fundamental rights and freedoms, as wellas the dignity of the parties concerned, as contemplated by thelegal provisions in force.Personal data must be processed in a lawful and fair way and, inany case, the data collected and stored is only that which isnecessary for certain, explicit and lawful purposes. Data shallbe stored for a period of time no longer than necessary for thepurposes of collection.Eni undertakes moreover to adopt suitable preventive safetymeasures for all databases storing and keeping personal data, inorder to avoid any risks of destruction and losses or ofunauthorized access or unallowed processing.Eni’s People shall:

| • |   | obtain and        process only data that are necessary and adequate to the        aims of their work and responsibilities;                                                                            |
|--------|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| • |   | obtain and        process such data only within specified procedures, and        store said data in a way that prevents unauthorized        parties from having access to it;                         |
| • |   | represent and        order data in a way ensuring that any party with access        authorization may easily get an outline thereof which is        as accurate, exhausting and truthful as possible; |

| • |   | disclose such        data pursuant to specific procedures or subject to the        express authorization by their superior and, in any case,        only after having checked that such data may be        disclosed, also making reference to absolute or relative        constraints concerning third parties bound to Eni by a        relation of whatever nature and, if applicable, after        having obtained their consent. |
|--------|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

**4.3. Membership in associations,participation in initiatives, events or external meetings**Membership in associations, participation in initiatives,events or external meetings is supported by Eni if compatiblewith the working or professional activity provided. Membershipand participation considered as such are:

| • |   | membership in        associations, participation in conferences, workshops,        seminars, courses; |
|--------|--------|-------------------------------------------------------------------------------------------------------|
| • |   | drawing up of        articles, papers and publications in general;                                    |
| • |   | participation        in public events in general.                                                     |

In this regard, Eni’s management andemployees in charge of illustrating, or providing to the outsidedata or news concerning Eni’s objectives, aims, results andpoints of view, shall not only comply with corporate proceduresrelating to market abuse, but also obtain the necessaryauthorization from their superior within management for the linesof action to follow and the texts as well as reports drawn up,such as to agree on contents with the relevant Eni Corporatestructure.

 

**IV. CODE OF ETHICS SCOPE OFAPPLICATION AND REFERENCE STRUCTURES**

The principles and contents of the Code applyto Eni’s People and activities.Any listed subsidiaries and power & gas sector subsidiariessubject to unbundling shall receive the Code and adopt it,adjusting it – if necessary – to the characteristics oftheir company, consistently with their management independence.The representatives indicated by Eni in the company bodies ofpartially owned companies, in consortia and in joint venturesshall promote the principles and contents of the Code withintheir own respective areas of competence.Directors and management must be the first to give concrete formto the principles and contents of the Code, by assumingresponsibility for them both towards the inside and the outsideand by enhancing trust, cohesion and a sense of team-work, aswell as providing a behaviour model for their collaborators inorder to have them comply with the Code and make questions andsuggestions on specific provisions.To achieve full compliance with the Code, each of Eni’sPeople may even apply directly to the Guarantor.

**1. OBLIGATION TO KNOW THE CODE AND TO REPORT ANY POSSIBLEVIOLATION THEREOF**

Each of Eni’s People is expected to knowthe principles and contents of the Code as well as the referenceprocedures governing own functions and responsibilities.Each of Eni’s People shall:

| • |   | refrain from        all conduct contrary to such principles, contents and        procedures; |
|--------|--------|----------------------------------------------------------------------------------------------|

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| • |   | carefully        select, as long as within their field of competence,        their collaborators, and have them fully comply with the        Code;                                                                                                                                                                                                                                                                                                                                         |
|--------|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| • |   | require any        third parties having relations with Eni to confirm that        they know the Code;                                                                                                                                                                                                                                                                                                                                                                                      |
| • |   | immediately        report to their superiors or the body they belong to, and        to the Guarantor, any remarks of theirs or information        supplied by Stakeholders concerning a possible violation        or any request to violate the Code; reports of possible        violations shall be sent in compliance with conditions        provided for by the specific procedures established by        the Board of Statutory Auditors and by the Watch        Structure of Eni SpA; |
| • |   | cooperate        with the Guarantor and with the relevant departments        according to the applicable specific procedures in        ascertaining any violations;                                                                                                                                                                                                                                                                                                                        |
| • |   | adopt prompt        corrective measures whenever necessary, and in any case        prevent any type of retaliation.                                                                                                                                                                                                                                                                                                                                                                        |

Eni’s People are not allowed to conductpersonal investigations, nor to exchange information, except totheir superiors, or to the body that they belong to, and to theGuarantor. If, after notifying a supposed violation any ofEni’s People feels that he or she has been subject toretaliation, then he or she may directly apply to the Guarantor.

**2. REFERENCE STRUCTURES AND SUPERVISION**

Eni is committed to ensuring, even through theGuarantor’s appointment:

| • |   | the widest        dissemination of the principles and contents of the Code        among Eni’s People and the other Stakeholders,        providing any possible tools for understanding and        clarifying the interpretation and the implementation of        the Code, as well as for updating the Code as required to        meet evolving civil sensibility and relevant laws;                                  |
|--------|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| • |   | the execution        of checks on any notice of violation of the Code        principles and contents or of reference procedures; an        objective evaluation of the facts and, if necessary, the        adoption of appropriate sanctions; that no one may suffer        any retaliation whatsoever for having provided        information regarding possible violations of the Code or        of reference procedures. |

**2.1. Guarantor of the Code of Ethics**The Code of Ethics is, among other things, a compulsorygeneral principle of the Organizational, Management and ControlModel adopted by Eni SpA according to the Italian provision onthe "administrative liability of legal entities derivingfrom offences" contained in Legislative Decree No. 231 ofJune 8, 2001.Eni SpA assigns the functions of Guarantor to the Watch Structureestablished pursuant to the above mentioned Model. Each direct orindirect subsidiary, in Italy and abroad, entrusts the functionof Guarantor to its own Watch Structure by formal deed of therelevant corporate body.The Guarantor is entrusted with the task of:

| • |   | promoting the        implementation of the Code and the issue of reference        procedures; reporting and proposing to the CEO of the        company the useful initiatives for a greater        dissemination and knowledge of the Code, also in order to        prevent any recurrences of violations;                                                                                             |
|--------|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| • |   | promoting        specific communication and training programs for        Eni’s management and employees;                                                                                                                                                                                                                                                                                          |
| • |   | investigating        reports of any violation of the Code by initiating proper        inquiry procedures; taking action at the request of        Eni’s People in the event of receiving reports that        violations of the Code have not been properly dealt with        or in the event of being informed of any retaliation        against Eni’s people for having reported violations; |
| • |   | notifying        relevant structures of the results of investigations        relevant to the adoption of possible penalties; informing        the relevant line/area structures about the results of        investigations relevant to the adoption of the necessary        measures.                                                                                                                  |

Moreover, the Guarantor of Eni SpA submits tothe Internal Control Committee and to the Board of StatutoryAuditors as well as to the Chairman and to the Chief ExecutiveOfficer, which report about it to the Board of Directors, asix-monthly report on the implementation and possible need forupdating the Code.For the performance of its tasks, the Guarantor of Eni SpA availsitself of "Technical Secretariat of the Watch Structure 231of Eni SpA" that reports thereto and is supported by therelevant Structures of Eni SpA. The Technical Secretariat isresponsible for starting and maintaining an adequate reportingand communication flow to and from the Guarantors ofsubsidiaries.Each information flow is to be sent to the following emailaddress:organismo_di_vigilanza@eni.it

**2.2. Code Promotion Team**The Code is made available to Eni’s People in compliancewith applicable standards, and is also available on the internetand intranet sites of Eni SpA and of subsidiaries.In order to promote the knowledge and facilitate theimplementation of the Code, a Code Promotion Team reporting tothe Guarantor of Eni SpA has been established. The Team makesavailable within Eni all possible tools for understanding andclarifying the interpretation and the implementation of the Code.The members of the Team are chosen by the Chief Executive Officerof Eni SpA upon proposal of the Guarantor of Eni SpA.

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**3. CODE REVIEW**

The Code review is approved by the Board ofDirectors of Eni SpA, upon proposal of the Chief ExecutiveOfficer with the agreement of the Chairman, after hearing theopinion of the Board of Statutory Auditors.The proposal is made taking into consideration theStakeholders’ evaluation with reference to the principlesand contents of the Code, promoting active contribution andnotification of possible deficiencies by Stakeholders themselves.

**4. CONTRACTUAL VALUE OF THE CODE**

Respect of the Code’s rules is anessential part of the contractual obligations of all Eni’sPeople pursuant to and in accordance with applicable law.Any violation of the Code’s principles and contents may beconsidered as a violation of primary obligations under labourrelations or of the rules of discipline and can entail theconsequences provided for by law, including termination of thework contract and compensation for damages arising out of anyviolation.

 

 

 

 

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Certifications as separate documents filedas exhibits

**EXHIBIT 12.1**

**Certification**

 

I, Paolo Scaroni, certify that:

|   | 1. |   | I have reviewed this annual        report on Form 20-F of Eni SpA; |
|--------|----|--------|--------------------------------------------------------------------|

|   | 2. |   | Based on my knowledge, this        report does not contain any untrue statement of a        material fact or omit to state a material fact necessary        to make the statements made, in light of the        circumstances under which such statements were made, not        misleading with respect to the period covered by this        report; |
|--------|----|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | 3. |   | Based on my knowledge, the        financial statements, and other financial information        included in this report, fairly present in all material        respects the financial condition, results of operations        and cash flows of the company as of, and for, the periods        presented in this report; |
|--------|----|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | 4. |   | The company’s other        certifying officer and I are responsible for establishing        and maintaining disclosure controls and procedures (as        defined in Exchange Act Rules 13a-15(e) and 15d-15(e))        and internal control over financial reporting (as defined        in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the        company and have: |
|--------|----|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (a) |   | Designed such disclosure        controls and procedures, or caused such disclosure        controls and procedures to be designed under our        supervision, to ensure that material information relating        to the company, including its consolidated subsidiaries,        is made known to us by others within those entities,        particularly during the period in which this report is        being prepared; |
|--------|-----|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (b) |   | Designed such internal        control over financial reporting, or caused such internal        control over financial reporting to be designed under our        supervision, to provide reasonable assurance regarding        the reliability of financial reporting and the        preparation of financial statements for external purposes        in accordance with generally accepted accounting        principles; |
|--------|-----|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (c) |   | Evaluated the effectiveness        of the company’s disclosure controls and procedures        and presented in this report our conclusions about the        effectiveness of the disclosure controls and procedures,        as of the end of the period covered by this report based        on such evaluation; and |
|--------|-----|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (d) |   | Disclosed in this report any        change in the company’s internal control over        financial reporting that occurred during the period        covered by the annual report that has materially        affected, or is reasonably likely to materially affect,        the company’s internal control over financial        reporting; |
|--------|-----|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | 5. |   | The Company’s other        certifying officer and I have disclosed, based on our        most recent evaluation of internal control over financial        reporting, to the company’s auditors and the audit        committee of the company’s board of directors (or        persons performing the equivalent functions): |
|--------|----|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (a) |   | All significant deficiencies        and material weaknesses in the design or operation of        internal control over financial reporting which are        reasonably likely to adversely affect the company’s        ability to record, process, summarize and report        financial information; and |
|--------|-----|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (b) |   | Any fraud, whether or not        material, that involves management or other employees who        have a significant role in the Company’s internal        control over financial reporting. |
|--------|-----|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

Date: April 9, 2013

| /s/PAOLO SCARONI                                    |
|-----------------------------------------------------|
|                                                     |
| Paolo Scaroni        Title: Chief Executive Officer |

 

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**EXHIBIT 12.2**

**Certification**

 

I, Massimo Mondazzi, certify that:

|   | 1. |   | I have reviewed this annual        report on Form 20-F of Eni SpA; |
|--------|----|--------|--------------------------------------------------------------------|

|   | 2. |   | Based on my knowledge, this        report does not contain any untrue statement of a        material fact or omit to state a material fact necessary        to make the statements made, in light of the        circumstances under which such statements were made, not        misleading with respect to the period covered by this        report; |
|--------|----|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | 3. |   | Based on my knowledge, the        financial statements, and other financial information        included in this report, fairly present in all material        respects the financial condition, results of operations        and cash flows of the company as of, and for, the periods        presented in this report; |
|--------|----|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | 4. |   | The company’s other        certifying officer and I are responsible for establishing        and maintaining disclosure controls and procedures (as        defined in Exchange Act Rules 13a-15(e) and 15d-15(e))        and internal control over financial reporting (as defined        in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the        company and have: |
|--------|----|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (a) |   | Designed such disclosure        controls and procedures, or caused such disclosure        controls and procedures to be designed under our        supervision, to ensure that material information relating        to the company, including its consolidated subsidiaries,        is made known to us by others within those entities,        particularly during the period in which this report is        being prepared; |
|--------|-----|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (b) |   | Designed such internal        control over financial reporting, or caused such internal        control over financial reporting to be designed under our        supervision, to provide reasonable assurance regarding        the reliability of financial reporting and the        preparation of financial statements for external purposes        in accordance with generally accepted accounting        principles; |
|--------|-----|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (c) |   | Evaluated the effectiveness        of the company’s disclosure controls and procedures        and presented in this report our conclusions about the        effectiveness of the disclosure controls and procedures,        as of the end of the period covered by this report based        on such evaluation; and |
|--------|-----|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (d) |   | Disclosed in this report any        change in the company’s internal control over        financial reporting that occurred during the period        covered by the annual report that has materially        affected, or is reasonably likely to materially affect,        the company’s internal control over financial        reporting; |
|--------|-----|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | 5. |   | The Company’s other        certifying officer and I have disclosed, based on our        most recent evaluation of internal control over financial        reporting, to the company’s auditors and the audit        committee of the company’s board of directors (or        persons performing the equivalent functions): |
|--------|----|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (a) |   | All significant deficiencies        and material weaknesses in the design or operation of        internal control over financial reporting which are        reasonably likely to adversely affect the company’s        ability to record, process, summarize and report        financial information; and |
|--------|-----|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (b) |   | Any fraud, whether or not        material, that involves management or other employees who        have a significant role in the Company’s internal        control over financial reporting. |
|--------|-----|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

Date: April 9, 2013

 

| /s/MASSIMO MONDAZZI                                    |
|--------------------------------------------------------|
|                                                        |
| Massimo Mondazzi        Title: Chief Financial Officer |

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**EXHIBIT 13.1**

 

**Certification Pursuant to 18U.S.C. Section 1350**

 

For purposes of 18 U.S.C. Section 1350, the undersignedofficer of Eni SpA, a company incorporated under the laws ofItaly (the "Company"), hereby certifies, to suchofficer’s knowledge, that:

> 
(i) the Annual Report on Form 20-F of the Company for the    year ended December 31, 2012 (the "Report") fully    complies with the requirements of section 13(a) or 15(d) as    applicable, of the Securities Exchange Act of 1934; and

(ii) the information contained in the Report fairly    presents, in all material respects, the financial condition    and results of operations of the Company.

Date: April 9, 2013

 

| /s/PAOLO SCARONI                                    |
|-----------------------------------------------------|
|                                                     |
| Paolo Scaroni        Title: Chief Executive Officer |

 

The foregoing certification is not deemed filed for purpose ofSection 18 of the Exchange Act and not incorporated by referencewith any filing under the Securities Act.

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**EXHIBIT 13.2**

 

**Certification Pursuant to 18U.S.C. Section 1350**

 

For purposes of 18 U.S.C. Section 1350, the undersignedofficer of Eni SpA, a company incorporated under the laws ofItaly (the "Company"), hereby certifies, to suchofficer’s knowledge, that:

> 
(i) the Annual Report on Form 20-F of the Company for the    year ended December 31, 2012 (the "Report") fully    complies with the requirements of section 13(a) or 15(d) as    applicable, of the Securities Exchange Act of 1934; and

(ii) the information contained in the Report fairly    presents, in all material respects, the financial condition    and results of operations of the Company.

Date: April 9, 2013

 

| /s/MASSIMO MONDAZZI                                    |
|--------------------------------------------------------|
|                                                        |
| Massimo Mondazzi        Title: Chief Financial Officer |

 

The foregoing certification is not deemed filed for purpose ofSection 18 of the Exchange Act and not incorporated by referencewith any filing under the Securities Act.

 

 

 

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**EXHIBIT 15.a(i)**

 

 

DEGOLYER AND MACNAUGHTON5001 SPRING VALLEY ROADSUITE 800 EASTDALLAS, TEXAS 75244

 

February 28, 2013

 

 

> 
 

Eni S.p.A.            E&P Division            Ms. Manuela Feudaroli            Vice President, Reserves            Via Emilia 1            20097 San Donato Milanese            Milano, Italy

 

Dear Ms. Feudaroli:

Pursuant to your request, we have                    conducted an independent evaluation to serve                    as a reserves audit of the net proved crude                    oil, condensate, liquefied petroleum gas                    (LPG), and natural gas reserves, as of                    December 31, 2012, of certain properties in                    Africa, Asia, and Europe owned by Eni S.p.A.                    (Eni). This evaluation was completed on                    February 28, 2013. Eni has represented that                    these properties account for 11.7 percent, on                    a net equivalent barrel basis, of Eni’s                    net proved reserves as of December 31, 2012,                    and that Eni’s net proved reserves                    estimates have been prepared in accordance                    with the reserves definitions of Rules                    4–10(a) (1)–(32) of Regulation                    S–X of the Securities and Exchange                    Commission (SEC) of the United States. We                    have reviewed information provided to us by                    Eni that it represents to be Eni’s                    estimates of the net reserves, as of December                    31, 2012, for the same properties as those                    which we have independently evaluated. This                    report was prepared in accordance with                    guidelines specified in Item 1202 (a)(8) of                    Regulation S-K and is to be used for                    inclusion in certain SEC filings by Eni.

Reserves included herein are expressed as                    net reserves as represented by Eni. Gross                    reserves are defined as the total estimated                    petroleum to be produced from these                    properties after December 31, 2012. Net                    reserves are defined as that portion of the                    gross reserves attributable to the interests                    owned by Eni after deducting interests owned                    by others.

 

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| DEGOLYER AND        MACNAUGHTON | 2 |
|---------------------------------|---|

 

> 
 

Estimates of oil, condensate, LPG, and                    natural gas should be regarded only as                    estimates that may change as further                    production history and additional information                    become available. Not only are such reserves                    estimates based on that information which is                    currently available, but such estimates are                    also subject to the uncertainties inherent in                    the application of judgmental factors in                    interpreting such information.

Data used in this audit were obtained from                    reviews with Eni personnel, from Eni files,                    from records on file with the appropriate                    regulatory agencies, and from public sources.                    In the preparation of this report we have                    relied, without independent verification,                    upon such information furnished by Eni with                    respect to property interests, production                    from such properties, current costs of                    operation and development, current prices for                    production, agreements relating to current                    and future operations and sale of production,                    and various other information and data that                    were accepted as represented. A field                    examination of the properties was not                    considered necessary for the purposes of this                    report.

 

**Methodology and Procedures**

Estimates of reserves were prepared by the                    use of appropriate geologic, petroleum                    engineering, and evaluation principles and                    techniques that are in accordance with                    practices generally recognized by the                    petroleum industry as presented in the                    publication of the Society of Petroleum                    Engineers entitled "Standards Pertaining                    to the Estimating and Auditing of Oil and Gas                    Reserves Information (Revision as of February                    19, 2007)." The method or combination of                    methods used in the analysis of each                    reservoir was tempered by experience with                    similar reservoirs, stage of development,                    quality and completeness of basic data, and                    production history.

When applicable, the volumetric method was                    used to estimate the original oil in place                    (OOIP) and the original gas in place (OGIP).                    Structure and isopach maps were constructed                    to estimate reservoir volume. Electrical                    logs, radioactivity logs, core analyses, and                    other available data were used to prepare                    these maps as well as to estimate                    representative values for porosity and water                    saturation. When adequate data were available                    and when circumstances justified, material                    balance and other engineering methods were                    used to estimate OOIP or OGIP.

 

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| DEGOLYER AND        MACNAUGHTON | 3 |
|---------------------------------|---|

 

> 
 

Estimates of ultimate recovery were                    obtained after applying recovery factors to                    OOIP or OGIP. These recovery factors were                    based on consideration of the type of energy                    inherent in the reservoirs, analyses of the                    petroleum, the structural positions of the                    properties, and the production histories.                    When applicable, material balance and other                    engineering methods were used to estimate                    recovery factors. An analysis of reservoir                    performance, including production rate,                    reservoir pressure, and gas-oil ratio                    behavior, was used in the estimation of                    reserves.

For depletion-type reservoirs or those                    whose performance disclosed a reliable                    decline in producing-rate trends or other                    diagnostic characteristics, reserves were                    estimated by the application of appropriate                    decline curves or other performance                    relationships. In the analyses of production                    decline curves, reserves were estimated only                    to the limits of economic production or to                    the limit of production licenses as                    appropriate. 

Eni has represented that its estimates of                    condensate and LPG are reported only in                    combination, since there is no material                    economic effect in separating the quantities.

 

**Definition of Reserves**

Petroleum reserves included in this report                    are classified as proved. Reserves                    classifications used for our estimates of                    proved reserves are in accordance with the                    reserves definitions of Rules 4–10(a)                    (1)–(32) of Regulation S–X of the                    SEC. Eni has represented that its estimates                    of proved reserves are in accordance with the                    reserves definitions of Rules 4–10(a)                    (1)–(32) of Regulation S–X of the                    SEC. Reserves are judged to be economically                    producible in future years from known                    reservoirs under existing economic and                    operating conditions and assuming                    continuation of current regulatory practices                    using known production methods and equipment.                    In the analyses of production-decline curves,                    reserves were estimated only to the limit of                    economic rates of production under existing                    economic and operating conditions using                    prices and costs consistent with the                    effective date of this report, including                    consideration of changes in existing prices                    provided only by contractual arrangements but                    not including escalations based upon future                    conditions. The petroleum reserves are                    classified as follows:

*Proved oil and gas reserves –*                        Proved oil and gas reserves are those                        quantities of oil and gas, which, by                        analysis of geoscience and

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| DEGOLYER AND        MACNAUGHTON | 4 |
|---------------------------------|---|

 

> 
 

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.

(i) The area of the reservoir                            considered as proved includes:                            (A) The area identified by drilling                            and limited by fluid contacts, if                            any, and (B) Adjacent undrilled                            portions of the reservoir that can,                            with reasonable certainty, be judged                            to be continuous with it and to                            contain economically producible oil                            or gas on the basis of available                            geoscience and engineering data.

(ii) In the absence of data on                            fluid contacts, proved quantities in                            a reservoir are limited by the lowest                            known hydrocarbons (LKH) as seen in a                            well penetration unless geoscience,                            engineering, or performance data and                            reliable technology establishes a                            lower contact with reasonable                            certainty.

(iii) Where direct observation                            from well penetrations has defined a                            highest known oil (HKO) elevation and                            the potential exists for an                            associated gas cap, proved oil                            reserves may be assigned in the                            structurally higher portions of the                            reservoir only if geoscience,                            engineering, or performance data and                            reliable technology establish the                            higher contact with reasonable                            certainty.

> 
(iv) Reserves which can be                            produced economically through                            application of improved recovery                            techniques (including, but not                            limited to, fluid injection) are                            included in the proved classification                            when:                            (A) Successful testing by a pilot                            project in an area of the reservoir                            with properties no more favorable                            than in the reservoir as a                            whole, the operation of an installed                            program in

> 
 

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| DEGOLYER AND        MACNAUGHTON | 5 |
|---------------------------------|---|

 

> 
the reservoir or an analogous                            reservoir, or other evidence using                            reliable technology establishes the                            reasonable certainty of the                            engineering analysis on which the                            project or program was based; and (B)                            The project has been approved for                            development by all necessary parties                            and entities, including governmental                            entities.

(v) 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                            unweighted 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.

*Developed oil and gas reserves*                        – Developed oil and gas reserves are                        reserves of any category that can be                        expected to be recovered:

(i) 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; and

(ii) Through installed extraction                            equipment and infrastructure                            operational at the time of the                            reserves estimate if the extraction                            is by means not involving a well.

*Undeveloped oil and gas reserves*                        – 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.

(i) Reserves on undrilled acreage                            shall be limited to those directly                            offsetting development spacing areas                            that are reasonably certain of                            production when drilled, unless                            evidence using reliable technology                            exists that establishes reasonable                            certainty of economic producibility                            at greater distances.

 

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| DEGOLYER AND        MACNAUGHTON | 6 |
|---------------------------------|---|

 

> 
 

(ii) Undrilled locations can be                            classified as having undeveloped                            reserves only if a development plan                            has been adopted indicating that they                            are scheduled to be drilled within                            five years, unless the specific                            circumstances justify a longer time.

(iii) Under no circumstances shall                            estimates for undeveloped reserves be                            attributable to any acreage for which                            an application of fluid injection or                            other improved recovery technique is                            contemplated, unless such techniques                            have been proved effective by actual                            projects in the same reservoir or an                            analogous reservoir, as defined in                            [section 210.4–10 (a)                            Definitions], or by other evidence                            using reliable technology                            establishing reasonable certainty.

 

**Primary Economic Assumptions**

The following economic assumptions were                    used for estimating existing and future                    prices and costs:

*Oil, Condensate, and LPG Prices*

Eni has represented that the oil,                            LPG, and condensate prices were based                            on a reference price, calculated as                            the unweighted arithmetic average of                            the first-day-of-the-month price for                            each month within the 12-month period                            prior to the end of the reporting                            period, unless prices are defined by                            contractual arrangements. A Brent oil                            price of 111 United States dollars                            (U.S.$) per barrel (U.S.$/bbl) was                            the resulting reference price. Where                            appropriate, Eni supplied                            differentials by field to the                            relevant reference price, and the                            prices were held constant thereafter.                            Eni has represented that LPG and                            condensate are not separately                            considered. The volume-weighted                            average prices in this report were as                            follows:

 

 

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| DEGOLYER AND        MACNAUGHTON | 7 |
|---------------------------------|---|

 

>   
**Oil (U.S.$/bbl)**
 
**Condensate and LPG                            (U.S.$/bbl)**
   Africa 106.66 93.21Asia 116.44 -Europe - 60.54   **Average for Total** **106.72** **92.71**
*Natural Gas Prices*

Eni has represented that the                            natural gas prices were based on a                            reference price, calculated as the                            unweighted arithmetic average of the                            first-day-of-the-month price for each                            month within the 12-month period                            prior to the end of the reporting                            period, unless prices are defined by                            contractual arrangements. A                            significant quantity of the gas sold                            by Eni is subject to contract prices,                            and the range of such prices is                            varied. A reference price is the                            United Kingdom National Balancing                            Point Index, which was U.S.$9.50 per                            million British thermal units. Where                            appropriate, Eni supplied                            differentials by field to the                            relevant reference price and the                            prices were held constant thereafter.                            The volume-weighted average gas                            prices in this report were as                            follows, expressed in United States                            dollars per thousand cubic feet                            (U.S.$/Mcf):
  
**Gas                    (U.S.$/Mcf)**
  Africa 4.03Asia -Europe 10.52  **Average                    for Total** **6.73**

> 
*Operating Expenses and Capital                        Costs*

Operating expenses and capital                            costs, based on information provided                            by Eni, were used in estimating                            future costs required to operate                            the properties. In certain cases,                            future costs, either higher or lower                            than existing costs, may have been                            used

 

 

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| DEGOLYER AND        MACNAUGHTON | 8 |
|---------------------------------|---|

 

 

> 
 

because of anticipated changes in                            operating conditions. These costs                            were not escalated for inflation.

 

While the oil and gas industry may be                    subject to regulatory changes from time to                    time that could affect an industry                    participant’s ability to recover its                    oil, condensate, LPG, and gas reserves, we                    are not aware of any such governmental                    actions which would restrict the recovery of                    the oil, condensate, LPG, and gas reserves as                    of December 31, 2012, estimated herein. The                    reserves estimated in this report can be                    produced under current regulatory guidelines.

Eni has represented that its estimated net                    proved reserves attributable to the reviewed                    properties in Africa, Asia, and Europe are                    based on the definitions of proved reserves                    of the SEC. Eni represents that its estimates                    of the net proved reserves attributable to                    these properties, which represent 11.7                    percent of Eni’s reserves on a net                    equivalent basis, are as follows, expressed                    in millions of barrels (MMbbl), billions of                    cubic feet (Bcf), and millions of barrels of                    oil equivalent (MMboe):

 
  
**Estimated by Eni             Net Proved Reserves            as of December 31, 2012**
  

>   
**Oil            (MMbbl)**
 
**Condensate and LPG****(MMbbl)**
 
**Marketable            Gas            (Bcf)**
 
**Oil            Equivalent            (MMboe)**
     **Properties            reviewed by             DeGolyer and MacNaughton**        **Total            Proved**  
428
  
20
  
2,163
  
841
         

> 
Note: Gas is converted to oil equivalent            using a factor of 5,492 cubic feet of gas per 1            barrel of oil equivalent.

 

> 
In our opinion, the information relating                    to estimated proved reserves of oil,                    condensate, LPG, and gas contained in this                    report has been prepared in accordance with                    Paragraphs 932-235-50-4, 932-235-50-6,                    932-235-50-7, and 932-235-50-9 of the                    Accounting Standards Update 932-235-50, *Extractive                    Industries – Oil and Gas (Topic 932):                    Oil and Gas Reserve Estimation and                    Disclosures* (January 2010) of the                    Financial Accounting Standards Board and                    Rules 4–10(a) (1)–(32) of                    Regulation S–X and Rules 302(b), 1201,                    and 1202(a) (1), (2), (3), (4), (8) of                    Regulation S–K of the Securities and                    Exchange Commission; provided, however, that                    estimates of proved developed and proved                    undeveloped reserves are not presented at the                    beginning of the year.

 

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| DEGOLYER AND        MACNAUGHTON | 9 |
|---------------------------------|---|

 

 

> 
 

To the extent the above-enumerated rules,                    regulations, and statements require                    determinations of an accounting or legal                    nature, we, as engineers, are necessarily                    unable to express an opinion as to whether                    the above-described information is in                    accordance therewith or sufficient therefor.

In comparing the detailed net proved                    reserves estimates prepared by us and by Eni,                    we have found differences, both positive and                    negative, resulting in an aggregate                    difference of less than 5 percent when                    compared on the basis of net equivalent                    barrels. It is our opinion that the net                    proved reserves estimates prepared by Eni on                    the properties reviewed by us and referred to                    above, when compared on the basis of net                    equivalent barrels, in aggregate, do not                    differ materially from those prepared by us.

DeGolyer and MacNaughton is an independent                    petroleum engineering consulting firm that                    has been providing petroleum consulting                    services throughout the world since 1936.                    DeGolyer and MacNaughton does not have any                    financial interest, including stock                    ownership, in Eni. Our fees were not                    contingent on the results of our evaluation.                    This letter report has been prepared at the                    request of Eni. DeGolyer and MacNaughton has                    used all assumptions, data, procedures, and                    methods that it considers necessary and                    appropriate to prepare this report.

|   | Submitted,                              |
|--------|-----------------------------------------|
|   |                                    |
|   | /s/ DEGOLYER AND MACNAUGHTON            |
|   |                                    |
|   | DeGOLYER and MacNAUGHTON                |
|   | Texas Registered Engineering Firm F-716 |

> 
 

|   | /s/ LLOYD W. CADE, P.E.  |
|--------|--------------------------|
|   |                     |
|   | Lloyd W. Cade, P.E.      |
| [SEAL] | Senior Vice President    |
|   | DeGolyer and MacNaughton |

 

 

 

 

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| DEGOLYER AND        MACNAUGHTON |   |
|---------------------------------|--------|

 

 

 

 

**CERTIFICATE of QUALIFICATION**

> 
I, Lloyd W. Cade Petroleum Engineer with DeGolyer            and MacNaughton, 5001 Spring Valley Road, Suite 800            East, Dallas, Texas, 75244 U.S.A., hereby certify:
1.  That I am a                    Senior Vice President with DeGolyer and                    MacNaughton, which company did prepare the                    letter report addressed to Eni dated February                    28, 2013, and that I, as Senior Vice                    President, was responsible for the                    preparation of this report.   2.  That I attended                    Kansas State University, and that I graduated                    with a Bachelor of Science degree in                    Mechanical Engineering in the year 1982; that                    I am a Registered Professional Engineer in                    the State of Texas; that I am a member of the                    International Society of Petroleum Engineers;                    and that I have approximately 30 years of                    experience in oil and gas reservoir studies                    and reserves evaluations.
 

 

 

SIGNED: February 28, 2013

 

 

 

|   | /s/ LLOYD W. CADE, P.E.  |
|--------|--------------------------|
|   |                     |
|   | Lloyd W. Cade, P.E.      |
| [SEAL] | Senior Vice President    |
|   | DeGolyer and MacNaughton |

 

 

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**EXHIBIT 15.a(ii)**

 

Eni S.p.A.

 

 

 

 

Estimated

Future Reserves and Income

Attributable to Certain 

Interests

 

 

 

SEC Parameters

 

 

As of

December 31, 2012

| \s\ Herman Acuña                                      |   | \s\ Gabrielle Guerre    |
|------------------------------------------------------------|--------|-------------------------|
| Herman G. Acuña, P.E.                                 |   | Gabrielle Guerre, P.E.  |
| TBPE License No. 92254                                     |   | TBPE License No. 109935 |
| Managing Senior Vice President –        International |   | Petroleum Engineer      |

 

RYDER SCOTT COMPANY, L.P.TBPE Firm Registration No. F-1580

 

| [SEAL] | [SEAL] |
|--------|--------|

 

 

RYDER SCOTT COMPANY     PETROLEUMCONSULTANTS

 

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February 15, 2013

 

Eni S.p.AE&P DivisionMs. Manuela FeudaroliVice President ReservesVia Emilia 120097 San Donato MilaneseMilano, Italy

Dear Ms. Feudaroli:

At the request of Eni S.p.A. (Eni), Ryder Scott Company, L.P(Ryder Scott) has conducted a reserves audit of the estimates ofthe proved reserves as prepared by Eni’s engineering andgeological staff as of December 31, 2012 based on the definitionsand disclosure guidelines of the United States Securities andExchange Commission (SEC) contained in Title 17, Code of FederalRegulations, Modernization of Oil and Gas Reporting, Final Rulereleased January 14, 2009 in the Federal Register (SECregulations). Our third party reserves audit, completed onFebruary 14, 2013 and presented herein, was prepared for publicdisclosure by Eni in filings made with the SEC in accordance withthe disclosure requirements set forth in the SEC regulations. Enihas indicated that the proved net reserves attributable to theproperties that we reviewed account for 22 percent of their totalnet proved remaining hydrocarbon reserves. The subject propertiesare located in the following geographic locations:

> 
• Africa                • Asia                • Americas

As prescribed by the Society of Petroleum Engineers inParagraph 2.2(f) of the Standards Pertaining to the Estimatingand Auditing of Oil and Gas Reserves Information (SPE auditingstandards), a reserves audit is defined as "the process ofreviewing certain of the pertinent facts interpreted andassumptions made that have resulted in an estimate of reservesprepared by others and the rendering of an opinion about (1) theappropriateness of the methodologies employed; (2) the adequacyand quality of the data relied upon; (3) the depth andthoroughness of the reserves estimation process; (4) theclassification of reserves appropriate to the relevantdefinitions used; and (5) the reasonableness of the estimatedreserve quantities."

Based on our review, including the data, technical processesand interpretations presented by Eni, it is our opinion that theoverall procedures and methodologies utilized by Eni in preparingtheir estimates of the proved reserves as of December 31, 2012comply with the current SEC regulations and that the overallproved reserves for the reviewed properties as estimated by Eniare, in the aggregate, reasonable within 5 percent of RyderScott’s estimates which is less than the established audittolerance guidelines of 10 percent as set forth in the SPEauditing standards.

 

 

| SUITE 600, 1015 4TH STREET,        S.W. |   | CALGARY, ALBERTA T2R 1J4    |   | TEL (403) 262-2799 |   | FAX (403) 262-2790 |
|-----------------------------------------|--------|-----------------------------|--------|--------------------|--------|--------------------|
| 621 17TH STREET, SUITE 1550             |   | DENVER, COLORADO 80293-1501 |   | TEL (303) 623-9147 |   | FAX (303) 623-4258 |

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The conclusions discussed in this report, as of December 31,2012, are related to hydrocarbon prices. The hydrocarbon pricesused in the preparation of this report are based on the averageprices during the 12-month period prior to the ending date of theperiod covered in this report, determined as the unweightedarithmetic averages of the prices in effect on thefirst-day-of-the-month for each month within such period, unlessprices were defined by contractual arrangements, as required bythe SEC regulations. Actual future prices may vary significantlyfrom the prices required by SEC regulations; therefore, volumesof reserves actually recovered may differ significantly from theestimated quantities audited by Ryder Scott.

 

***Reserves Included in This Report***

In our opinion, the proved reserves discussed herein conformto the definition as set forth in the Securities and ExchangeCommission’s Regulations Part 210.4-10(a). An abridgedversion of the SEC reserves definitions from 210.4-10(a) entitled"Petroleum Reserves Definitions" is included as anattachment to this report. The various proved reserve statuscategories are defined under the attachment entitled"Petroleum Reserves Status Definitions and Guidelines"in this report.

No attempt was made to quantify or otherwise account for anyaccumulated gas production imbalances that may exist. The auditedproved gas volumes included gas consumed in operations asreserves. Non-hydrocarbon or inert gas volumes have been excludedfrom the reserves reported herein.

Reserves are those estimated remaining quantities of petroleumthat are anticipated to be economically producible, as of a givendate, from known accumulations under defined conditions. Allreserve estimates involve an assessment of the uncertaintyrelating the likelihood that the actual remaining quantitiesrecovered will be greater or less than the estimated quantitiesdetermined as of the date the estimate is made. The uncertaintydepends chiefly on the amount of reliable geologic andengineering data available at the time of the estimate and theinterpretation of these data. The relative degree of uncertaintymay be conveyed by placing reserves into one of two principalclassifications, either proved or unproved. Unproved reserves areless certain to be recovered than proved reserves, and may befurther sub-classified as probable and possible reserves todenote progressively increasing uncertainty in theirrecoverability. At Eni’s request, this report addresses onlythe proved reserves attributable to the properties evaluatedherein.

Proved oil and gas reserves are "those quantities of oiland gas which, by analysis of geoscience and engineering data,can be estimated with reasonable certainty to be economicallyproducible from a given date forward." The proved reservesincluded herein were estimated using deterministic methods. Ifdeterministic methods are used, the SEC has defined reasonablecertainty for proved reserves as a "high degree ofconfidence that the quantities will be recovered."

Proved reserve estimates will generally be revised only asadditional geologic or engineering data become available or aseconomic conditions change. For proved reserves, the SEC statesthat "as changes due to increased availability of geoscience(geological, geophysical, and geochemical), engineering, andeconomic data are made to the estimated ultimate recovery (EUR)with time, reasonably certain EUR is much more likely to increaseor remain constant than to decrease." Moreover, estimates ofproved reserves may be revised as a result of future operations,effects of regulation by governmental agencies or geopolitical oreconomic risks. Therefore, the proved reserves included in thisreport are estimates only and should not be construed as beingexact quantities, and if recovered, the revenues therefrom, andthe actual costs related thereto, could be more or less than theestimated amounts.

 

RYDER SCOTT COMPANY     PETROLEUMCONSULTANTS

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The proved reserves reported herein are limited to the periodprior to expiration of current contracts providing the legalrights to produce, or a revenue interest in such production,unless evidence indicates that contract renewal is reasonablycertain. Furthermore, properties in the different countries maybe subjected to significantly varying contractual fiscal termsthat affect the net revenue to Eni for the production of thesevolumes. The prices and economic return received for these netvolumes can vary significantly based on the terms of thesecontracts. Therefore, when applicable, Ryder Scott reviewed thefiscal terms of such contracts and discussed with Eni the neteconomic benefit attributed to such operations for thedetermination of the net hydrocarbon volumes and income thereof.Ryder Scott has not conducted an exhaustive audit or verificationof such contractual information. Neither our review of suchcontractual information nor our acceptance of Eni’srepresentations regarding such contractual information should beconstrued as a legal opinion on this matter.

Ryder Scott did not evaluate the country and geopoliticalrisks in the countries where Eni operates or has interests.Eni’s operations may be subject to various levels ofgovernmental controls and regulations. These controls andregulations may include, but may not be limited to, mattersrelating to land tenure and leasing, the legal rights to producehydrocarbons including the granting, extension or termination ofproduction sharing contracts, the fiscal terms of variousproduction sharing contracts, drilling and production practices,environmental protection, marketing and pricing policies,royalties, various taxes and levies including income tax, andforeign trade and investment and are subject to change from timeto time. Such changes in governmental regulations and policiesmay cause volumes of proved reserves actually recovered andamounts of proved income actually received to differsignificantly from the estimated quantities.

The estimates of proved reserves audited herein were basedupon a detailed study of the properties in which Eni owns aninterest; however, we have not made any field examination of theproperties. No consideration was given in this report topotential environmental liabilities that may exist nor were anycosts included for potential liabilities to restore and clean updamages, if any, caused by past operating practices.

 

***Audit Data, Methodology, Procedure and Assumptions***

The estimation of reserves involves two distinctdeterminations. The first determination results in the estimationof the quantities of recoverable oil and gas and the seconddetermination results in the estimation of the uncertaintyassociated with those estimated quantities in accordance with thedefinitions set forth by the Securities and ExchangeCommission’s Regulations Part 210.4-10(a). The process ofestimating the quantities of recoverable oil and gas reservesrelies on the use of certain generally accepted analyticalprocedures. These analytical procedures fall into three broadcategories or methods: (1) performance-based methods; (2)volumetric-based methods; and (3) analogy. These methods may beused singularly or in combination by the reserve evaluator in theprocess of estimating the quantities of reserves. Reserveevaluators must select the method or combination of methods whichin their professional judgment is most appropriate given thenature and amount of reliable geoscience and engineering dataavailable at the time of the estimate, the established oranticipated performance characteristics of the reservoir beingevaluated and the stage of development or producing maturity ofthe property.

In many cases, the analysis of the available geoscience andengineering data and the subsequent interpretation of this datamay indicate a range of possible outcomes in an estimate,irrespective of the method selected by the evaluator. When arange in the quantity of reserves is 

RYDER SCOTT COMPANY     PETROLEUMCONSULTANTS

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identified, the evaluator must determine the uncertaintyassociated with the incremental quantities of the reserves. Ifthe reserve quantities are estimated using the deterministicincremental approach, the uncertainty for each discreteincremental quantity of the reserves is addressed by the reservecategory assigned by the evaluator. Therefore, it is thecategorization of reserve quantities as proved, probable and/orpossible that addresses the inherent uncertainty in the estimatedquantities reported. For proved reserves, uncertainty is definedby the SEC as reasonable certainty wherein the "quantitiesactually recovered are much more likely than not to beachieved." The SEC states that "probable reserves arethose additional reserves that are less certain to be recoveredthan proved reserves but which, together with proved reserves,are as likely as not to be recovered." The SEC states that"possible reserves are those additional reserves that areless certain to be recovered than probable reserves and the totalquantities ultimately recovered from a project have a lowprobability of exceeding proved plus probable plus possiblereserves." All quantities of reserves within the samereserve category must meet the SEC definitions as noted above.

Estimates of reserves quantities and their associated reservecategories may be revised in the future as additional geoscienceor engineering data become available. Furthermore, estimates ofreserves quantities and their associated reserve categories mayalso be revised due to other factors such as changes in economicconditions, results of future operations, effects of regulationby governmental agencies or geopolitical or economic risks aspreviously noted herein.

The proved reserves for the properties included herein wereestimated by performance methods, analogy methods, the volumetricmethod, or a combination of performance and volumetric methods.These performance methods include, but may not be limited to,decline curve analysis and analogy which utilized extrapolationsof historical production and pressure data available throughDecember 2012 in those cases where such data were considered tobe definitive. The data utilized in this analysis were suppliedto Ryder Scott by Eni and were considered sufficient for thepurpose thereof. The volumetric method was used where there wereinadequate historical performance data to establish a definitivetrend and where the use of production performance data as a basisfor the reserve estimates was considered to be inappropriate. Thevolumetric analysis utilized pertinent well and seismic datasupplied to Ryder Scott by Eni that were available throughDecember 2012. The data utilized from the well and seismic dataincorporated into our volumetric analysis were consideredsufficient for the purpose thereof.

To estimate economically recoverable proved oil and gasreserves and related future net cash flows, we consider manyfactors and assumptions including, but not limited to, the use ofreservoir parameters derived from geological, geophysical andengineering data that cannot be measured directly, economiccriteria based on current costs and SEC pricing requirements, andforecasts of future production rates. Under the SEC regulations210.4-10(a)(22)(v) and (26), proved reserves must be anticipatedto be economically producible from a given date forward based onexisting economic conditions including the prices and costs atwhich economic producibility from a reservoir is to bedetermined. While it may reasonably be anticipated that thefuture prices received for the sale of production and theoperating costs and other costs relating to such production mayincrease or decrease from those under existing economicconditions, such changes were, in accordance with rules adoptedby the SEC, omitted from consideration in making this evaluation.

Eni has informed us that they have furnished us all of thematerial accounts, records, geological and engineering data, andreports and other data required for this investigation. Inpreparing our forecast of future proved production and income, wehave relied upon data furnished by Eni with respect to propertyinterests owned, production and well tests from examined wells,normal direct costs of operating the wells or leases, other costssuch as transportation and/or processing fees, ad valorem andproduction taxes, recompletion and development costs, abandonmentcosts after salvage, product

 

RYDER SCOTT COMPANY     PETROLEUMCONSULTANTS

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prices based on the SEC regulations, adjustments ordifferentials to product prices, geological structural andisochore maps, well logs, core analyses, and pressuremeasurements. Ryder Scott reviewed such factual data for itsreasonableness; however, we have not conducted an independentverification of the data furnished by Eni. We consider thefactual data used in this report appropriate and sufficient forthe purpose of our investigations.

In summary, we consider the assumptions, data, methods andanalytical procedures used in this report appropriate for thepurpose hereof, and we have used all such methods and proceduresthat we consider necessary and appropriate to conduct the auditof reserves of the properties described herein. The provedreserves discussed herein were determined in conformance with theUnited States Securities and Exchange Commission (SEC)Modernization of Oil and Gas Reporting; Final Rule, including allreferences to Regulation S-X and Regulation S-K, referred toherein collectively as the "SEC Regulations." In ouropinion, the proved reserves reviewed in this report comply withthe definitions, guidelines and disclosure requirements asrequired by the SEC regulations.

 

***Future Production Rates***

For wells currently on production, our forecasts of futureproduction rates are based on historical performance data. If noproduction decline trend has been established, future productionrates were held constant, or adjusted for the effects ofcurtailment where appropriate, until a decline in ability toproduce was anticipated. An estimated rate of decline was thenapplied to depletion of the reserves. If a decline trend has beenestablished, this trend was used as the basis for estimatingfuture production rates.

Test data and other related information were used to estimatethe anticipated initial production rates for those wells orlocations that are not currently producing. For reserves not yeton production, sales were estimated to commence at an anticipateddate furnished by Eni. Wells or locations that are not currentlyproducing may start producing earlier or later than anticipatedin our estimates due to unforeseen factors causing a change inthe timing to initiate production. Such factors may includedelays due to weather, the availability of rigs, the sequence ofdrilling, completing and/or recompleting wells and/or constraintsset by regulatory bodies.

The future production rates from wells currently on productionor wells or locations that are not currently producing may bemore or less than estimated because of changes including, but notlimited to, reservoir performance, operating conditions relatedto surface facilities, compression and artificial lift, pipelinecapacity and/or operating conditions, producing market demandand/or allowables or other constraints set by regulatory bodies.

 

***Hydrocarbon Prices***

The hydrocarbon prices used herein are based on SEC priceparameters using the average prices during the 12-month periodprior to the ending date of the period covered in this report,determined as the unweighted arithmetic averages of the prices ineffect on the first-day-of-the-month for each month within suchperiod, unless prices were defined by contractual arrangements.For hydrocarbon products sold under contract, the contractprices, including fixed and determinable escalations, exclusiveof inflation adjustments, were used until expiration of thecontract. Upon contract expiration, the prices were adjusted tothe 12-month unweighted arithmetic average as previouslydescribed.

 

RYDER SCOTT COMPANY     PETROLEUMCONSULTANTS

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Eni furnished us with the above mentioned average prices ineffect on December 31, 2012. Eni has assured us that theseinitial SEC hydrocarbon prices were determined using the 12-monthaverage first-day-of-the-month benchmark prices appropriate tothe geographic area where the hydrocarbons are sold. The averagedated Brent oil price of $111/bbl was used by Eni. Eni alsoprovided us with the gas prices based on their gas salesagreements. All gas prices shown below are in dollars perthousand cubic meters ($/kmc). The average realized pricesprovided by Eni and used in our evaluation are as follows:

| **Geographic Area** |   | **Product** |   | **Average         Realized         Prices** |
|---------------------|--------|-------------|--------|---------------------------------------------|
|                     |   |             |   |                                             |

| Africa   |   | Gas                  |   | $353.60/kmc |
|----------|--------|----------------------|--------|-------------|
|     |   | Oil & Condensate |   | $106.80/bbl |
|          |   |                      |   |             |
| Asia     |   | Gas                  |   | $112.49/kmc |
|     |   | Oil                  |   | $101.53/bbl |
|          |   |                      |   |             |
| Americas |   | Gas                  |   | $136.77/kmc |
|     |   | Oil & Condensate |   | $105.22/bbl |
|     |   | NGL                  |   | $43.24/bbl  |
|          |   |                      |   |             |

The product prices that were actually used to determine thefuture gross revenue for each property reflect adjustments to thebenchmark prices for gravity, quality, local conditions and/ordistance from market, referred to herein as"differentials." The differentials used in thepreparation of this report were furnished to us by Eni. Thedifferentials furnished to us were accepted as factual data andreviewed by us for their reasonableness; however, we have notconducted an independent verification of the data used by Eni todetermine these differentials.

 

***Costs***

Operating costs used in our evaluation were based on theoperating expense reports of Eni and include only those costsdirectly applicable to the evaluated assets. The operating costsinclude a portion of general and administrative costs allocateddirectly to the leases and wells. The operating costs furnishedto us were accepted as factual data and reviewed by us for theirreasonableness; however, we have not conducted an independentverification of the operating cost data used by Eni. No deductionwas made for loan repayments, interest expenses, or explorationand development prepayments that were not charged directly to theassets.

Development costs were furnished to us by Eni and are based onauthorizations for expenditure for the proposed work or actualcosts for similar projects. The development costs furnished to uswere accepted as factual data and reviewed by us for theirreasonableness; however, we have not conducted an independentverification of these costs. The estimated net cost ofabandonment after salvage was included for properties whereabandonment costs net of salvage were significant. The estimatesof the net abandonment costs furnished by Eni were acceptedwithout independent verification.

The proved developed and undeveloped reserves in this reporthave been incorporated herein in accordance with Eni’s plansto develop these reserves as of December 31, 2012. Theimplementation of Eni’s development plans as presented to usand incorporated herein is subject to the approval processadopted by Eni’s management. As the result of our inquiresduring the course of

 

RYDER SCOTT COMPANY     PETROLEUMCONSULTANTS

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preparing this report, Eni has informed us that thedevelopment activities included herein have been subjected to andreceived the internal approvals required by Eni’s managementat the appropriate local, regional and/or corporate level. Inaddition to the internal approvals as noted, certain developmentactivities may still be subject to specific partner AFEprocesses, Joint Operating Agreement (JOA) requirements or otheradministrative approvals external to Eni. Additionally, Eni hasinformed us that they are not aware of any legal, regulatory,political or economic obstacles that would significantly altertheir plans.

Current costs used by Eni were held constant throughout thelife of the properties.

 

***Standards of Independence and Professional Qualification***

Ryder Scott is an independent petroleum engineering consultingfirm that has been providing petroleum consulting servicesthroughout the world for over seventy-five years. Ryder Scott isemployee-owned and maintains offices in Houston, Texas; Denver,Colorado; and Calgary, Alberta, Canada. We have over eightyengineers and geoscientists on our permanent staff. By virtue ofthe size of our firm and the large number of clients for which weprovide services, no single client or job represents a materialportion of our annual revenue. We do not serve as officers ordirectors of any privately-owned or publicly-traded oil and gascompany and are separate and independent from the operating andinvestment decision-making process of our clients. This allows usto bring the highest level of independence and objectivity toeach engagement for our services.

Ryder Scott actively participates in industry-relatedprofessional societies and organizes an annual public forumfocused on the subject of reserves evaluations and SECregulations. Many of our staff have authored or co-authoredtechnical papers on the subject of reserves related topics. Weencourage our staff to maintain and enhance their professionalskills by actively participating in ongoing continuing education.

Prior to becoming an officer of the Company, Ryder Scottrequires that staff engineers and geoscientists have receivedprofessional accreditation in the form of a registered orcertified professional engineer’s license or a registered orcertified professional geoscientist’s license, or theequivalent thereof, from an appropriate governmental authority ora recognized self-regulating professional organization.

We are independent petroleum engineers with respect to Eni.Neither we nor any of our employees have any interest in thesubject properties and neither the employment to do this work northe compensation is contingent on our estimates of reserves forthe properties which were reviewed.

The results of this study, presented herein, are based ontechnical analysis conducted by teams of geoscientists andengineers from Ryder Scott. The professional qualifications ofthe undersigned, the technical person primarily responsible foroverseeing, reviewing and approving the evaluation of thereserves information discussed in this report, are included as anattachment to this letter.

 

***Terms of Usage***

The results of our third party study, presented in report formherein, were prepared in accordance with the disclosurerequirements set forth in the SEC regulations and intended forpublic disclosure as an exhibit in filings made with the SEC byEni.

 

RYDER SCOTT COMPANY     PETROLEUMCONSULTANTS

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We have provided Eni with a digital version of the originalsigned copy of this report letter. In the event there are anydifferences between the digital version included in filings madeby Eni and the original signed report letter, the original signedreport letter shall control and supersede the digital version.

The data and work papers used in the preparation of thisreport are available for examination by authorized parties in ouroffices. Please contact us if we can be of further service.

 

 

|        | Very truly yours,                                          |
|-------------|------------------------------------------------------------|
|        |                                                       |
|        | **RYDER SCOTT COMPANY, L. P.**                             |
|        | TBPE Firm Registration No. F-1580                          |
|        |                                                       |
|        | /s/ HERMAN G. ACUÑA, P.E.                             |
|        |                                                       |
|        | Herman G. Acuna, P.E.                                      |
|        | Texas P.E. License No. 92254                               |
| [SEAL]      | Managing Senior Vice President –        International |
|        |                                                       |
|        |                                                       |
|        | \s\ GABRIELLE GUERRE                                       |
|        |                                                       |
|        | Gabrielle Guerre, P.E.                                     |
|        | TBPE License No. 109935                                    |
|        | Petroleum Engineer                                         |
|        |                                                       |
|        | [SEAL]                                                     |
| HGA(DPR)/pl |                                                       |

 

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**Professional Qualifications of PrimaryTechnical Person**

The conclusions presented in this report are the result oftechnical analysis conducted by teams of geoscientists andengineers from Ryder Scott Company, L.P. Herman G. Acuña was theprimary technical person responsible for overseeing theindependent estimation of the reserves, future production andincome to render the audit conclusions of the report.

Mr. Acuña, an employee of Ryder Scott Company, L.P. (RyderScott) since 1997, is a Managing Senior International VicePresident and Board Member. He serves as an Engineering GroupCoordinator responsible for coordinating and supervising staffand consulting engineers of the company in ongoing reservoirevaluation studies worldwide. Before joining Ryder Scott, Mr.Acuña served in a number of engineering positions with Exxon.For more information regarding Mr. Acuña’s geographic andjob specific experience, please refer to the Ryder Scott Companywebsite at www.ryderscott.com.

Mr. Acuña earned a Bachelor (Cum Laude) and a Masters (MagnaCum Laude) of Science degree in Petroleum Engineering from TheUniversity of Tulsa in 1987 and 1989 respectively. He is aregistered Professional Engineer in the State of Texas, a memberof the Association of International Petroleum Negotiators (AIPN)and the Society of Petroleum Engineers (SPE).

In addition to gaining experience and competency through priorwork experience, the Texas Board of Professional Engineersrequires a minimum of fifteen hours of continuing educationannually, including at least one hour in the area of professionalethics, which Mr. Acuña fulfills. Mr. Acuña has attendedformalized training and conferences including dedicated to thesubject of the definitions and disclosure guidelines contained inthe United States Securities and Exchange Commission Title 17,Code of Federal Regulations, Modernization of Oil and GasReporting, Final Rule released January 14, 2009 in the FederalRegister. Mr. Acuña has recently taught various company reservesevaluation schools in Argentina, China, Denmark, Spain and theU.S.A. Mr. Acuña has participated in various capacities inreserves conferences such as being a panelist at Trinidad andTobago’s Petroleum Conference, delivering the reservesevaluation seminar during IAPG convention in Mendoza, Argentinaand chairing the first Reserves Evaluation Conference in theMiddle East in Dubai, U.A.E.

Based on his educational background, professional training andover 20 years of practical experience in petroleum engineeringand the estimation and evaluation of petroleum reserves, Mr.Acuña has attained the professional qualifications as a ReservesEstimator and Reserves Auditor set forth in Article III of the"Standards Pertaining to the Estimating and Auditing of Oiland Gas Reserves Information" promulgated by the Society ofPetroleum Engineers as of February 19, 2007.

 

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**PETROLEUM RESERVES DEFINITIONS**

**As Adapted From:RULE 4-10(a) of REGULATION S-X PART 210UNITED STATES SECURITIES AND EXCHANGE COMMISSION (SEC)**

 

 

***PREAMBLE***

On January 14, 2009, the United States Securities and ExchangeCommission (SEC) published the "Modernization of Oil and GasReporting; Final Rule" in the Federal Register of NationalArchives and Records Administration (NARA). The"Modernization of Oil and Gas Reporting; Final Rule"includes revisions and additions to the definition section inRule 4-10 of Regulation S-X, revisions and additions to the oiland gas reporting requirements in Regulation S-K, and amends andcodifies Industry Guide 2 in Regulation S-K. The"Modernization of Oil and Gas Reporting; Final Rule",including all references to Regulation S-X and Regulation S-K,shall be referred to herein collectively as the "SECRegulations". The SEC Regulations take effect for allfilings made with the United States Securities and ExchangeCommission as of December 31, 2009, or after January 1, 2010.Reference should be made to the full text under Title 17, Code ofFederal Regulations, Regulation S-X Part 210, Rule 4-10(a) forthe complete definitions, as the following definitions,descriptions and explanations rely wholly or in part on excerptsfrom the original document (direct passages excerpted from theaforementioned SEC document are denoted in italics herein).

Reserves are those estimated remaining quantities of petroleumwhich are anticipated to be economically producible, as of agiven date, from known accumulations under defined conditions.All reserve estimates involve some degree of uncertainty. Theuncertainty depends chiefly on the amount of reliable geologicand engineering data available at the time of the estimate andthe interpretation of these data. The relative degree ofuncertainty may be conveyed by placing reserves into one of twoprincipal classifications, either proved or unproved. Unprovedreserves are less certain to be recovered than proved reservesand may be further sub-classified as probable and possiblereserves to denote progressively increasing uncertainty in theirrecoverability. Under the SEC Regulations as of December 31,2009, or after January 1, 2010, a company may optionally discloseestimated quantities of probable or possible oil and gas reservesin documents publicly filed with the Commission. The SECRegulations continue to prohibit disclosure of estimates of oiland gas resources other than reserves and any estimated values ofsuch resources in any document publicly filed with the Commissionunless such information is required to be disclosed in thedocument by foreign or state law as noted in §229.1202Instruction to Item 1202.

Reserves estimates will generally be revised as additionalgeologic or engineering data become available or as economicconditions change.

Reserves may be attributed to either natural energy orimproved recovery methods. Improved recovery methods include allmethods for supplementing natural energy or altering naturalforces in the reservoir to increase ultimate recovery. Examplesof such methods are pressure maintenance, natural gas cycling,waterflooding, thermal methods, chemical flooding, and the use ofmiscible and immiscible displacement fluids. Other improvedrecovery methods may be developed in the future as petroleumtechnology continues to evolve.

Reserves may be attributed to either conventional orunconventional petroleum accumulations. Petroleum accumulationsare considered as either conventional or unconventional based onthe nature of their in-place characteristics, extraction methodapplied, or degree of processing prior to sale. Examples ofunconventional petroleum accumulations include coalbed orcoalseam methane (CBM/CSM), basin-centered gas, shale gas, gashydrates, natural bitumen and oil shale deposits.

 

 

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PETROLEUM RESERVES DEFINITIONSPage 2

 

These unconventional accumulations may require specializedextraction technology and/or significant processing prior tosale.

Reserves do not include quantities of petroleum being held ininventory.

Because of the differences in uncertainty, caution should beexercised when aggregating quantities of petroleum from differentreserves categories.

 

**RESERVES (SEC DEFINITIONS)**

Securities and Exchange Commission Regulation S-X§210.4-10(a)(26) defines reserves as follows:

***Reserves.****Reserves are estimated remainingquantities of oil and gas and related substances anticipated tobe economically producible, as of a given date, by application ofdevelopment projects to known accumulations. In addition, theremust exist, or there must be a reasonable expectation that therewill exist, the legal right to produce or a revenue interest inthe production, installed means of delivering oil and gas orrelated substances to market, and all permits and financingrequired to implement the project.*

*Note to paragraph (a)(26)**: Reserves shouldnot be assigned to adjacent reservoirs isolated by major,potentially sealing, faults until those reservoirs are penetratedand evaluated as economically producible. Reserves should not beassigned to areas that are clearly separated from a knownaccumulation by a non-productive reservoir (**i.e**.,absence of reservoir, structurally low reservoir, or negativetest results). Such areas may contain prospective resources (**i.e.**,potentially recoverable resources from undiscoveredaccumulations).*

 

**PROVED RESERVES (SEC DEFINITIONS)**

Securities and Exchange Commission Regulation S-X§210.4-10(a)(22) defines proved oil and gas reserves as follows:

***Proved oil and gas reserves.****Proved oil andgas reserves are those quantities of oil and gas, which, byanalysis of geoscience and engineering data, can be estimatedwith reasonable certainty to be economically producible—froma given date forward, from known reservoirs, and under existingeconomic conditions, operating methods, and governmentregulations—prior to the time at which contracts providingthe right to operate expire, unless evidence indicates thatrenewal is reasonably certain, regardless of whetherdeterministic or probabilistic methods are used for theestimation. The project to extract the hydrocarbons must havecommenced or the operator must be reasonably certain that it willcommence the project within a reasonable time.*

> 
*(i) The area of the reservoir considered as proved    includes:*

*(A) The area identified by drilling and limited by        fluid contacts, if any, and*

*(B) Adjacent undrilled portions of the reservoir        that can, with reasonable certainty, be judged to be        continuous with it and to contain economically producible        oil or gas on the basis of available geoscience and        engineering data.*

 

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PETROLEUM RESERVES DEFINITIONSPage 3

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*(ii) In the absence of data on fluid contacts,        proved quantities in a reservoir are limited by the        lowest known hydrocarbons (LKH) as seen in a well        penetration unless geoscience, engineering, or        performance data and reliable technology establishes a        lower contact with reasonable certainty.*

 

**PROVED RESERVES (SEC DEFINITIONS) CONTINUED**

*(iii) Where direct observation from well        penetrations has defined a highest known oil (HKO)        elevation and the potential exists for an associated gas        cap, proved oil reserves may be assigned in the        structurally higher portions of the reservoir only if        geoscience, engineering, or performance data and reliable        technology establish the higher contact with reasonable        certainty.        (iv) Reserves which can be produced economically through        application of improved recovery techniques (including,        but not limited to, fluid injection) are included in the        proved classification when:*

*(A) Successful testing by a pilot project in an            area of the reservoir with properties no more            favorable than in the reservoir as a whole, the            operation of an installed program in the reservoir or            an analogous reservoir, or other evidence using            reliable technology establishes the reasonable            certainty of the engineering analysis on which the            project or program was based; and*

*(B) The project has been approved for            development by all necessary parties and entities,            including governmental entities.*

*(v) 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        unweighted 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.*

 

 

 

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**PETROLEUM RESERVES STATUS DEFINITIONS ANDGUIDELINES**

**As Adapted From:RULE 4-10(a) of REGULATION S-X PART 210UNITED STATES SECURITIES AND EXCHANGE COMMISSION (SEC)**

**and**

**PETROLEUM RESOURCES MANAGEMENT SYSTEM(SPE-PRMS)Sponsored and Approved by:SOCIETY OF PETROLEUM ENGINEERS (SPE),WORLD PETROLEUM COUNCIL (WPC)AMERICAN ASSOCIATION OF PETROLEUM GEOLOGISTS (AAPG)SOCIETY OF PETROLEUM EVALUATION ENGINEERS (SPEE)**

 

 

Reserves status categories define the development andproducing status of wells and reservoirs. Reference should bemade to Title 17, Code of Federal Regulations, Regulation S-XPart 210, Rule 4-10(a) and the SPE-PRMS as the following reservesstatus definitions are based on excerpts from the originaldocuments (direct passages excerpted from the aforementioned SECand SPE-PRMS documents are denoted in italics herein).

 

**DEVELOPED RESERVES (SEC DEFINITIONS)**

Securities and Exchange Commission Regulation S-X§210.4-10(a)(6) defines developed oil and gas reserves asfollows:

> 
*Developed oil and gas reserves are reserves of any    category that can be expected to be recovered:*

*(i) 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; and*

*(ii) Through installed extraction equipment and        infrastructure operational at the time of the reserves        estimate if the extraction is by means not involving a        well.*

**Developed Producing (SPE-PRMS Definitions)**

While not a requirement for disclosure under the SECregulations, developed oil and gas reserves may be furthersub-classified according to the guidance contained in theSPE-PRMS as Producing or Non-Producing.

> 
***Developed Producing Reserves****Developed Producing Reserves are expected to    be recovered from completion intervals that are open and    producing at the time of the estimate.*

*Improved recovery reserves are considered producing    only after the improved recovery project is in operation.*

 

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PETROLEUM RESERVES STATUS DEFINITIONS ANDGUIDELINESPage 2

 

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***Developed Non-Producing****Developed Non-Producing Reserves include    shut-in and behind-pipe reserves.*

***Shut-In****Shut-in Reserves are expected to be recovered    from:*

*(1) completion intervals which are open at the time        of the estimate but which have not yet started producing;        (2) wells which were shut-in for market conditions or        pipeline connections; or        (3) wells not capable of production for mechanical        reasons.*

***Behind-Pipe****Behind-pipe Reserves are expected to be    recovered from zones in existing wells which will require    additional completion work or future re-completion prior to    start of production.*

*In all cases, production can be initiated or restored    with relatively low expenditure compared to the cost of    drilling a new well.*

 

**UNDEVELOPED RESERVES (SEC DEFINITIONS)**

Securities and Exchange Commission Regulation S-X§210.4-10(a)(31) defines undeveloped oil and gas reserves asfollows:

> 
*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.*

*(i) Reserves on undrilled acreage shall be limited        to those directly offsetting development spacing areas        that are reasonably certain of production when drilled,        unless evidence using reliable technology exists that        establishes reasonable certainty of economic        producibility at greater distances.*

*(ii) Undrilled locations can be classified as        having undeveloped reserves only if a development plan        has been adopted indicating that they are scheduled to be        drilled within five years, unless the specific        circumstances, justify a longer time.*

*(iii) Under no circumstances shall estimates for        undeveloped reserves be attributable to any acreage for        which an application of fluid injection or other improved        recovery technique is contemplated, unless such        techniques have been proved effective by actual projects        in the same reservoir or an analogous reservoir, as        defined in paragraph (a)(2) of this section, or by other        evidence using reliable technology establishing        reasonable certainty.*

 

 

 

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