----

**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, 2011**         |
| 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)**Alessandro BerniniEni 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 sharesof euro 1.00 each**                                                                                                                                                                **4,005,358,876**

| 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 until their fiscal year        ending December 31, 2011.         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  |  |
|-----------|--|--------------------|----------------|--|

----

##### **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 | 3      |
| I             | I | Exchange        Rates                                                                                                                                      | I | 5      |
| I             | I | Risk Factors                                                                                                                                               | I | 5      |
| Item 4.       | I | INFORMATION        ON THE COMPANY                                                                                                                          | I | 25     |
| I             | I | History and        Development of the Company                                                                                                              | I | 25     |
| I             | I | Business        Overview                                                                                                                                   | I | 30     |
| I             | I | Exploration        & Production                                                                                                                        | I | 30     |
| I             | I | Gas &        Power                                                                                                                                     | I | 59     |
| I             | I | Refining        & Marketing                                                                                                                            | I | 74     |
| I             | I | Engineering        & Construction                                                                                                                      | I | 81     |
| I             | I | Petrochemicals                                                                                                                                             | I | 83     |
| I             | I | Corporate and        Other activities                                                                                                                      | I | 85     |
| I             | I | Research and        Development                                                                                                                            | I | 86     |
| I             | I | Insurance                                                                                                                                                  | I | 89     |
| I             | I | Environmental        Matters                                                                                                                               | I | 89     |
| I             | I | Regulation of        Eni’s Businesses                                                                                                                 | I | 96     |
| I             | I | Property,        Plant and Equipment                                                                                                                       | I | 106    |
| I             | I | Organizational        Structure                                                                                                                            | I | 106    |
| Item 4A.      | I | UNRESOLVED        STAFF COMMENTS                                                                                                                           | I | 106    |
| Item 5.       | I | OPERATING AND        FINANCIAL REVIEW AND PROSPECTS                                                                                                        | I | 107    |
| I             | I | Executive        Summary                                                                                                                                   | I | 107    |
| I             | I | Critical        Accounting Estimates                                                                                                                       | I | 109    |
| I             | I | 2008-2010        Group Results of Operations                                                                                                               | I | 112    |
| I             | I | Liquidity and        Capital Resources                                                                                                                     | I | 125    |
| I             | I | Recent        Developments                                                                                                                                 | I | 130    |
| I             | I | Management's        Expectations of Operations                                                                                                             | I | 131    |
| Item 6.       | I | DIRECTORS,        SENIOR MANAGEMENT AND EMPLOYEES                                                                                                          | I | 139    |
| I             | I | Directors and        Senior Management                                                                                                                     | I | 139    |
| I             | I | Compensation                                                                                                                                               | I | 145    |
| I             | I | Board        Practices                                                                                                                                     | I | 156    |
| I             | I | Employees                                                                                                                                                  | I | 162    |
| I             | I | Share        Ownership                                                                                                                                     | I | 165    |
| Item 7.       | I | MAJOR        SHAREHOLDERS AND RELATED PARTY TRANSACTIONS                                                                                                   | I | 166    |
| I             | I | Major        Shareholders                                                                                                                                  | I | 166    |
| I             | I | Related Party        Transactions                                                                                                                          | I | 166    |
| Item 8.       | I | FINANCIAL        INFORMATION                                                                                                                               | I | 167    |
| I             | I | Consolidated        Statements and Other Financial Information                                                                                             | I | 167    |
| I             | I | Significant        Changes                                                                                                                                 | I | 167    |
| Item 9.       | I | THE OFFER AND        THE LISTING                                                                                                                           | I | 168    |
| I             | I | Offer and        Listing Details                                                                                                                           | I | 168    |
| I             | I | Markets                                                                                                                                                    | I | 169    |
| Item 10.      | I | ADDITIONAL        INFORMATION                                                                                                                              | I | 171    |
| I             | I | Memorandum        and Articles of Association                                                                                                              | I | 171    |
| I             | I | Material        Contracts                                                                                                                                  | I | 177    |
| I             | I | Exchange        Controls                                                                                                                                   | I | 177    |
| I             | I | Taxation                                                                                                                                                   | I | 178    |
| I             | I | Documents on        Display                                                                                                                                | I | 182    |
| Item 11.      | I | QUANTITATIVE        AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK                                                                                          | I | 183    |
| Item 12.      | I | DESCRIPTION        OF SECURITIES OTHER THAN EQUITY SECURITIES                                                                                              | I | 184    |
| 12A.          | I | Debt        Securities                                                                                                                                     | I | 184    |
| 12B.          | I | Warrants and        Rights                                                                                                                                 | I | 184    |
| 12C.          | I | Other        Securities                                                                                                                                    | I | 184    |
| 12D.          | I | American        Depositary Shares                                                                                                                          | I | 184    |
| II            | I | I                                                                                                                                                          | I | I      |
| **PART II**   | I | I                                                                                                                                                          | I | I      |
| Item 13.      | I | DEFAULTS,        DIVIDEND ARREARAGES AND DELINQUENCIES                                                                                                     | I | 186    |
| Item 14.      | I | MATERIAL        MODIFICATIONS TO THE RIGHTS OF SECURITY HOLDERS AND USE        OF PROCEEDS                                                                 | I | 186    |
| Item 15.      | I | CONTROLS AND        PROCEDURES                                                                                                                             | I | 186    |
| Item 16.      | I | I                                                                                                                                                          | I | II     |
| 16A.          | I | Board of        Statutory Auditors Financial Expert                                                                                                        | I | 187    |
| 16B.          | I | Code of        Ethics                                                                                                                                      | I | 187    |
| 16C.          | I | Principal        Accountant Fees and Services                                                                                                              | I | 187    |
| 16D.          | I | Exemptions        from the Listing Standards for Audit Committees                                                                                          | I | 188    |
| 16E.          | I | Purchases of        Equity Securities by the Issuer and Affiliated Purchasers                                                                              | I | 188    |
| 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 | 189    |
| 16H.          | I | Mine Safety        Disclosure                                                                                                                              | I | 191    |
| **PART III**I | I | I                                                                                                                                                          | I | II     |
| Item 17.      | I | FINANCIAL        STATEMENTS                                                                                                                                | I | 192    |
| Item 18.      | I | FINANCIAL        STATEMENTS                                                                                                                                | I | 192    |
| Item 19.      | I | EXHIBITS                                                                                                                                                   | I | 192    |

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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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****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.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |
|                                    |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |
| *Contingent resources*                            |               | Contingent resources are        those quantities of petroleum estimated, as of a given        date, to be potentially recoverable from known        accumulations, but the applied project(s) are not yet        considered mature enough for commercial development due        to one or more contingencies.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |
|                                    |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |
| *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.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |
|                                    |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |
| *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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| *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                                  | =                  | 5,550 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 0.00615        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. In 2010, Eni updated the natural gas        conversion factor from 5,742 to 5,550 standard cubic feet        of gas per barrel of oil equivalent. This update        reflected changes in Eni’s gas properties that took        place in recent years and was assessed by collecting data        on the heating power of gas in all Eni’s 230 gas        fields on stream at the end of 2009. The effect of this        update on production expressed in BOE was 26 KBOE/d for        the full year 2010 and on the initial reserves balances        as of January 1, 2010 amounted to 106 mmBOE. 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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**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 show Eniselected historical financial data prepared in accordance withIFRS as of and for the years ended December 31, 2007, 2008, 2009,2010 and 2011. The selected historical financial data presentedherein are derived from Eni’s Consolidated FinancialStatements included in Item 18.All such data should be read in connection with the ConsolidatedFinancial Statements and the related notes thereto included inItem 18.

 

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

|   | **2007** |   | **2008** |   | **2009** |   | **2010** |   | **2011** |
|--------|----------|--------|----------|--------|----------|--------|----------|--------|----------|
|   |          |   |          |   |          |   |          |   |          |

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

| **CONSOLIDATED PROFIT STATEMENT DATA**                                                      |   |   |   |   |    |   |   |   |   |   |   |   |   |    |   |
|---------------------------------------------------------------------------------------------|--------|--------|--------|--------|---------|--------|--------|--------|--------|--------|--------|--------|--------|---------|--------|
| Net sales        from operations                                                            |   | 87,204 |   |   | 108,082 |   |   | 83,227 |   |   | 98,523 |   |   | 109,589 |   |
| Operating profit by segment (1)                                                             |   |   |   |   |    |   |   |   |   |   |   |   |   |    |   |
|      Exploration        & Production                           |   | 13,433 |   |   | 16,239  |   |   | 9,120  |   |   | 13,866 |   |   | 15,887  |   |
|      Gas & Power                                               |   | 4,465  |   |   | 4,030   |   |   | 3,687  |   |   | 2,896  |   |   | 1,758   |   |
|      Refining        & Marketing                               |   | 686    |   |   | (988    | )      |   | (102   | )      |   | 149    |   |   | (273    | )      |
|      Petrochemicals                                                |   | 100    |   |   | (845    | )      |   | (675   | )      |   | (86    | )      |   | (424    | )      |
|      Engineering        & Construction                         |   | 837    |   |   | 1,045   |   |   | 881    |   |   | 1,302  |   |   | 1,422   |   |
|      Other activities (2)                                          |   | (444   | )      |   | (466    | )      |   | (436   | )      |   | (1,384 | )      |   | (427    | )      |
|      Corporate and        financial companies (2)                  |   | (312   | )      |   | (623    | )      |   | (420   | )      |   | (361   | )      |   | (319    | )      |
|      Impact        of unrealized intragroup profit elimination (3) |   | (26    | )      |   | 125     |   |   |   |   |   | (271   | )      |   | (189    | )      |
| Operating profit                                                                            |   | 18,739 |   |   | 18,517  |   |   | 12,055 |   |   | 16,111 |   |   | 17,435  |   |
| Net profit        attributable to Eni                                                       |   | 10,011 |   |   | 8,825   |   |   | 4,367  |   |   | 6,318  |   |   | 6,860   |   |
| **Data per ordinary share******(euro)(4)                                                    |   |   |   |   |    |   |   |   |   |   |   |   |   |    |   |
| Operating        profit:                                                                    |   |   |   |   |    |   |   |   |   |   |   |   |   |    |   |
| - basic                                                                                     |   | 5.11   |   |   | 5.09    |   |   | 3.33   |   |   | 4.45   |   |   | 4.81    |   |
| - diluted                                                                                   |   | 5.11   |   |   | 5.09    |   |   | 3.33   |   |   | 4.45   |   |   | 4.81    |   |
| Net profit attributable to Eni basic and diluted                                            |   | 2.73   |   |   | 2.43    |   |   | 1.21   |   |   | 1.74   |   |   | 1.89    |   |
| **Data        per ADR******($)(4) (5)                                                       |   |   |   |   |    |   |   |   |   |   |   |   |   |    |   |
| Operating profit:                                                                           |   |   |   |   |    |   |   |   |   |   |   |   |   |    |   |
| - basic                                                                                     |   | 14.01  |   |   | 14.97   |   |   | 9.27   |   |   | 11.81  |   |   | 13.40   |   |
| - diluted                                                                                   |   | 14.00  |   |   | 14.97   |   |   | 9.27   |   |   | 11.81  |   |   | 13.40   |   |
| Net profit        attributable to Eni basic and diluted                                     |   | 7.48   |   |   | 7.14    |   |   | 3.36   |   |   | 4.62   |   |   | 5.26    |   |
|                                                                                        |   |        |        |   |         |        |   |        |        |   |        |        |   |         |        |

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##### Table of Contents

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

|   | **2007** |   | **2008** |   | **2009** |   | **2010** |   | **2011** |
|--------|----------|--------|----------|--------|----------|--------|----------|--------|----------|
|   |          |   |          |   |          |   |          |   |          |

|   | **(euro million except        number of shares and dividend information)** |
|--------|----------------------------------------------------------------------------|

| **CONSOLIDATED BALANCE SHEET DATA**                                                                   |   |    |   |    |   |    |   |    |   |    |
|-------------------------------------------------------------------------------------------------------|--------|---------|--------|---------|--------|---------|--------|---------|--------|---------|
| Total        assets                                                                                   |   | 101,460 |   | 116,673 |   | 117,529 |   | 131,860 |   | 142,945 |
| Short-term and long-term debt                                                                         |   | 19,830  |   | 20,837  |   | 24,800  |   | 27,783  |   | 29,597  |
| Capital        stock issued                                                                           |   | 4,005   |   | 4,005   |   | 4,005   |   | 4,005   |   | 4,005   |
| Minority interest                                                                                     |   | 2,439   |   | 4,074   |   | 3,978   |   | 4,522   |   | 4,921   |
| Shareholders’        equity - Eni share                                                          |   | 40,428  |   | 44,436  |   | 46,073  |   | 51,206  |   | 55,472  |
| Capital expenditures                                                                                  |   | 10,593  |   | 14,562  |   | 13,695  |   | 13,870  |   | 13,438  |
| Weighted        average number of ordinary shares outstanding (fully        diluted - shares million) |   | 3,668   |   | 3,639   |   | 3,622   |   | 3,622   |   | 3,623   |
| Dividend per share (euro)                                                                             |   | 1.30    |   | 1.30    |   | 1.00    |   | 1.00    |   | 1.04    |
| Dividend        per ADR ($) (4)                                                                       |   | 3.74    |   | 3.72    |   | 2.91    |   | 2.64    |   | 2.90    |
|                                                                                                  |   |         |   |         |   |         |   |         |   |         |

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| (1) | i | From 2009,        gains and losses on non-hedging commodity derivative        instruments, including both fair value re-measurement and        gains and losses on settled transactions are reported as        items of operating profit. Also results of the gas        storage business are reported within the Gas & Power        segment reporting unit, as part of the regulated        businesses results, following the restructuring of        Eni’s regulated gas businesses in Italy. In past        years, results of the gas storage business were reported        within the Exploration & Production segment. Prior        year data have been restated.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |
|-----|---|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| (2) | i | From 2010        certain environmental provisions incurred by the Parent        Company Eni SpA due to inter-company guarantees on behalf        of Syndial have been reported within the segment        reporting unit "Other activities". Data for the        years 2008 and 2009 have been restated by increasing the        operating loss of the "Other activities"        segment by euro 120 million and euro 54 million,        respectively. Prior-year data have not been restated.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |
| (3) | i | 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.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |
| (4) | i | 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 2011 is based on the        proposal of Eni’s management which is submitted to        approval of the Annual General Shareholders’ Meeting        scheduled on April 30 and May 8, 2012 on first and second        calls, respectively.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |
| (5) | i | 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/U.S.$ 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 2007 through 2010 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 2011 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 1.04 per ADR) at        the Noon Buying Rate recorded on the payment date on        September 29, 2011, while the balance of euro 1.04 per        ADR was translated at the Noon Buying Rate as recorded on        December 31, 2011. The balance dividend for 2011 once the        full-year dividend is approved by the Annual General        Shareholders’ Meeting is payable on May 24, 2012 to        holders of Eni shares, being the ex-dividend date May 21,        while ADRs holders will be paid late in May 2012 being        May 23 the ex-dividend date for ADRs holders. |

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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, 2007, 2008, 2009, 2010 and 2011. 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 of accounting. Inpresenting data on production volumes and reserves for totalhydrocarbons, natural gas volumes have been converted tooil-equivalent barrels on the basis of a certain equivalency. In2010, Eni updated the natural gas conversion factor from 5,742 to5,550 standard cubic feet of gas per barrel of oil equivalent.This update reflected changes in Eni’s gas properties thattook place in recent years and was assessed by collecting data onthe heating power of gas in all Eni’s 230 gas fields onstream at the end of 2009. Other per-BOE indicators were onlymarginally affected by the update (e.g. realization prices, costsper BOE) and also negligible was the impact on depletion charges.Other oil companies may use different conversion rates.

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

|   | **2007** |   | **2008** |   | **2009** |   | **2010** |   | **2011** |
|--------|----------|--------|----------|--------|----------|--------|----------|--------|----------|
|   |          |   |          |   |          |   |          |   |          |

| Proved reserves of liquids of consolidated        subsidiaries at period end (mmBBL)           |   | 3,127    |   | 3,243    |   | 3,377    |   | 3,415    |   | 3,134    |
|------------------------------------------------------------------------------------------------|--------|----------|--------|----------|--------|----------|--------|----------|--------|----------|
| *of        which developed*                                                                    |   | *1,953*  |   | *2,009*  |   | *2,001*  |   | *1,951*  |   | *1,850*  |
| Proved reserves of liquids of equity-accounted        entities at period end (mmBBL)           |   | 142      |   | 142      |   | 86       |   | 208      |   | 300      |
| *of        which developed*                                                                    |   | *26*     |   | *33*     |   | *34*     |   | *52*     |   | *45*     |
| Proved reserves of natural gas of consolidated        subsidiaries at period end (BCF)(1)      |   | 16,549   |   | 17,214   |   | 16,262   |   | 16,198   |   | 15,582   |
| *of        which developed*                                                                    |   | *10,967* |   | *11,138* |   | *11,650* |   | *10,965* |   | *10,363* |
| Proved reserves of natural gas of        equity-accounted entities at period end (BCF)         |   | 3,022    |   | 3,015    |   | 1,588    |   | 1,684    |   | 4,700    |
| *of        which developed*                                                                    |   | *428*    |   | *420*    |   | *234*    |   | *246*    |   | *53*     |
| Proved reserves of hydrocarbons of consolidated        subsidiaries in mmBOE at period end (1) |   | 6,010    |   | 6,242    |   | 6,209    |   | 6,332    |   | 5,940    |
| *of        which developed*                                                                    |   | *3,862*  |   | *3,948*  |   | *4,030*  |   | *3,926*  |   | *3,716*  |
| Proved reserves of hydrocarbons of        equity-accounted entities in mmBOE at period end     |   | 668      |   | 666      |   | 362      |   | 511      |   | 1,146    |
| *of        which developed*                                                                    |   | *101*    |   | *107*    |   | *74*     |   | *96*     |   | *54*     |
| Reserves replacement ratio (2)                                                                 |   | 138      |   | 135      |   | 96       |   | 125      |   | 142      |
| Average        daily production of liquids (KBBL/d)        (3)                                 |   | 1,020    |   | 1,026    |   | 1,007    |   | 997      |   | 845      |
| Average daily production of natural gas        available for sale (mmCF/d) (3)                 |   | 3,819    |   | 4,143    |   | 4,074    |   | 4,222    |   | 3,763    |
| Average        daily production of hydrocarbons available for sale (KBOE/d) (3)                |   | 1,684    |   | 1,748    |   | 1,716    |   | 1,757    |   | 1,523    |
| Hydrocarbon production sold (mmBOE)                                                            |   | 611.4    |   | 632.0    |   | 622.8    |   | 638.0    |   | 548.5    |
| Oil and        gas production costs per BOE (4)                                                |   | 6.90     |   | 7.65     |   | 7.41     |   | 8.89     |   | 10.86    |
| Profit per barrel of oil equivalent (5)                                                        |   | 14.19    |   | 16.00    |   | 8.14     |   | 11.91    |   | 16.98    |
|                                                                                           |   |          |   |          |   |          |   |          |   |          |

----

| (1) | i      | Includes        approximately 749, 746, 769, 767 and 767 BCF of natural        gas held in storage in Italy as of December 31, 2007,        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 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) | i      | Referred to        Eni’s subsidiaries and its equity-accounted        entities. Natural gas production volumes exclude gas        consumed in operations (296, 281, 300, 318 and 321 mmCF/d        in 2007, 2008, 2009, 2010 and 2011, 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.                                                                                                                                                    |

3

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##### Table of Contents

**Selected Operating Information*******continued*

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

|   | **2007** |   | **2008** |   | **2009** |   | **2010** |   | **2011** |
|--------|----------|--------|----------|--------|----------|--------|----------|--------|----------|
|   |          |   |          |   |          |   |          |   |          |

| Sales of natural gas to third parties (6)                                                       |   | 78.75  |   | 83.69  |   | 83.79  |   | 75.81  |   | 78.16  |
|-------------------------------------------------------------------------------------------------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|
| Natural        gas consumed by Eni (6)                                                          |   | 6.08   |   | 5.63   |   | 5.81   |   | 6.19   |   | 6.21   |
| Sales of natural gas of affiliates (Eni’s        share) (6)                                |   | 8.74   |   | 8.91   |   | 7.95   |   | 9.41   |   | 9.53   |
| Total        sales and own consumption of natural gas of the Gas &        Power segment (6) |   | 93.57  |   | 98.23  |   | 97.55  |   | 91.41  |   | 93.90  |
| E&P natural gas sales in Europe and in the        Gulf of Mexico (6)                        |   | 5.39   |   | 6.00   |   | 6.17   |   | 5.65   |   | 2.86   |
| Worldwide        natural gas sales (6)                                                          |   | 98.96  |   | 104.23 |   | 103.72 |   | 97.06  |   | 96.76  |
| Transport of natural gas for third parties in        Italy (6)                                  |   | 30.89  |   | 33.84  |   | 37.32  |   | 47.87  |   | 43.18  |
| Length of        natural gas transport network in Italy at period end (7)                       |   | 31.1   |   | 31.5   |   | 31.5   |   | 31.7   |   | 32.0   |
| Electricity sold (8)                                                                            |   | 33.19  |   | 29.93  |   | 33.96  |   | 39.54  |   | 40.28  |
| Refinery        throughputs (9)                                                                 |   | 37.15  |   | 35.84  |   | 34.55  |   | 34.80  |   | 31.96  |
| Balanced capacity of wholly-owned refineries (10)                                               |   | 544    |   | 544    |   | 554    |   | 564    |   | 574    |
| Retail        sales (in Italy and rest of Europe) (9)                                           |   | 11.80  |   | 12.03  |   | 12.02  |   | 11.73  |   | 11.37  |
| Number of service stations at period end (in        Italy and rest of Europe)                   |   | 6,441  |   | 5,956  |   | 5,986  |   | 6,167  |   | 6,287  |
| Average        throughput per service station (in Italy and rest of        Europe) (11)         |   | 2,486  |   | 2,502  |   | 2,477  |   | 2,353  |   | 2,206  |
| Petrochemical production (9)                                                                    |   | 8.80   |   | 7.37   |   | 6.52   |   | 7.22   |   | 6.25   |
| Engineering        & Construction order backlog at period end (12)                          |   | 15,390 |   | 19,105 |   | 18,730 |   | 20,505 |   | 20,417 |
| Employees at period end (units)                                                                 |   | 75,125 |   | 78,094 |   | 77,718 |   | 79,941 |   | 78,686 |
|                                                                                            |   |        |   |        |   |        |   |        |   |        |

----

| (6)  | i | Expressed in        BCM.                     |
|------|---|----------------------------------------------|
| (7)  | i | Expressed in        thousand kilometers.     |
| (8)  | i | Expressed in        TWh.                     |
| (9)  | i | Expressed in        mmtonnes.                |
| (10) | i | Expressed in        KBBL/d.                  |
| (11) | i | Expressed in        thousand liters per day. |
| (12) | i | Expressed in        euro million.            |

 

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##### Table of Contents

**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, |   |   |   |   |   |   |   |   |
|-------------------------|--------|--------|--------|--------|--------|--------|--------|--------|
| 2007                    |   | 1.49   |   | 1.29   |   | 1.37   |   | 1.46   |
| 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   |
|                    |   |        |   |        |   |        |   |        |

----

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

 

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

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

| October 2011         |   | 1.42 |   | 1.32 |   | 1.40 |
|----------------------|--------|------|--------|------|--------|------|
| November        2011 |   | 1.38 |   | 1.33 |   | 1.34 |
| December 2011        |   | 1.35 |   | 1.29 |   | 1.29 |
| January        2012  |   | 1.32 |   | 1.27 |   | 1.32 |
| February 2012        |   | 1.35 |   | 1.30 |   | 1.34 |
| March 2012           |   | 1.33 |   | 1.30 |   | 1.33 |
|                 |   |      |   |      |   |      |

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 March 30, 2012 was $1.3334 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 supply and demand. This is likely to        exacerbate competition in all our businesses, which may        impact costs and margins. |
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| • |   | In the Exploration &        Production business 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 in many of these markets 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 its natural gas business,        Eni faces increasingly strong competition on both the        Italian market and the European market driven by slow        demand growth in the face of large gas availability on        the marketplace. Gas                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |

5

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|   |   | supplies to Europe have been        fuelled by material investments to expand the import        capacity of the pipelines coming from Russia and Algeria        which have been executed by a number of operators,        including Eni, in recent years. Furthermore, we estimated        that some 65 BCM of liquefaction capacity were added to        worldwide gas availability in the three-year period        2008-2010 by upstream operators. This development coupled        with an ongoing shift in the United States from gas        imports to use of internal non-conventional gas resources        caused the diversion of important LNG volumes to Europe        where they are marketed at certain continental spot        markets which have become increasingly liquid.        Oversupplies on the European market coupled with weak        demand growth triggered intense pricing competition among        gas operators which squeezed profitability and reduced        sales opportunities in the whole sector. This was due to        decoupling trends between on one hand the rising cost of        gas supplies that are mainly indexed to the price of oil        and its derivatives as provided by pricing formulas in        long-term supply contracts, and on the other hand weak        selling prices at continental hubs pressured by        competition. Those trends helped explain why the        Company’s Gas & Power segment reported sharply        lower results in 2011 (down by 39.3% compared to 2010) on        the back of operating losses reported by its Marketing        business. We believe that the outlook for our gas        marketing business will remain weak in the short to        medium term as the factors described above, in particular        weak demand, oversupply and competition take time to be        reversed. Management believes that a better balance        between demand and supply on the European market is        unlikely to be achieved before 2014. 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; |
|--------|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| • |   | 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 for natural        gas and reduce Eni’s operating profit and cash        flows. Finally, following a decree from the Italian        Government to spur competition in Italy, management        expects that the Company’s margins on sales to        residential customers and the service sector will be        reduced due to the administrative implementation of a        less favorable indexation of the raw material cost in        supplies to such customers than in the past (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. The Company expects in the near        future that increasing competition due to the weak GDP        growth expected in Italy and Europe over the next one to        two years will cause other 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 decree from the Italian        Government targeted the Italian fuel retail market too,        by relaxing commercial ties between independent operators        of service stations and oil companies, enlarging the        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;                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |
| • |   | In the Petrochemical        segment, we face strong competition from well-established        international players and state-owned petrochemical        companies, particularly in the most commoditized market        segments. Many of those competitors may benefit from cost        advantages due to larger scale, looser environmental        regulations, availability of oil-based feedstock, and        more favorable location and proximity to end-markets.        Excess capacity and sluggish economic growth may        exacerbate competitive pressures. The Company expects        continuing margin pressures in the foreseeable future as        a result of those trends; and                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |
| • |   | 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        effectively to competition could adversely impact the        Company’s growth prospects, future results of        operations and cash flows.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |

> 
***Risks associated with the exploration and production of oil    and natural gas and other Group’s operations***

The exploration and production of oil and natural gas requireshigh levels of capital expenditures and entails certain economicrisks. It is subject to natural hazards and other uncertaintiesincluding those relating to the physical 

6

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##### Table of Contents

characteristics of oil and natural gas fields. In addition,the Group engages in processing, transportation, refining andpetrochemical activities, storage and distribution of petroleumproducts, natural gas transportation, distribution and storage,and production of base chemical and specialty products, whichinvolve a wide range of operational risks.

Eni’s results depend on its ability to identify andmitigate the risks and hazards inherent to operating in thoseindustries. The Company seeks to minimize these operational risksby carefully designing and building its facilities, includingwells, industrial complexes, plants and equipment, pipelines,storage sites and distribution networks, and conducting itsoperations in a safe and reliable manner. However, failure tomanage these risks effectively could result in unexpectedincidents, including releases, explosions or mechanical failuresresulting in personal injury, loss of life, environmental damage,loss of revenues, and increase in cost, legal liability and/ordamage or destruction of crude oil or natural gas wells as wellas equipment and other property, all of which could lead to adisruption in operations. We also face risks once production isdiscontinued, because our activities require environmental siteremediation.

In exploration and production, we encounter risks related tothe physical characteristics of our oil or gas fields. Theseinclude the risks of eruptions of crude oil or of natural gas,discovery of hydrocarbon pockets with abnormal pressure,crumbling of well openings, leaks that can harm the environmentand risks of fire or explosion. Accidents at a single well canlead to loss of life, damage or destruction to property,environmental damage and consequently potential economic lossesthat could have a material and adverse effect on the business,results of operation and prospects of the Group.

Eni’s activities in the Refining & Marketing andPetrochemicals sectors also entail additional health, safety andenvironmental risks related to the overall life cycle of theproducts manufactured, as well as raw materials used in themanufacturing process, such as catalysts, additives and monomerfeedstock. These risks can arise from the intrinsiccharacteristics of the products involved (flammability, toxicity,or long-term environmental impacts such as greenhouse gasemissions), their use, emissions and discharges resulting fromtheir manufacturing process, and from recycling or disposing ofmaterials and wastes at 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. Nonetheless,in certain situations where Eni is not the operator, the Companymay have limited influence and control over third parties, whichmay limit its ability to manage and control such risks. Enimaintains insurance coverage that include coverage for physicaldamage to our assets, third party liability, workers’compensation, pollution and other damage to the environment andother coverage. Our insurance is subject to caps, exclusion andlimitation, and there is no assurance that such coverage willadequately protect us against liabilities from all potentialconsequences and damages. In light of the accident at the Macondowell in the Gulf of Mexico, we may not be able to secure similarcoverage for the same costs. Future insurance coverage for ourindustry could increase in cost and may include higherretentions. Also, some forms of insurance may become unavailablein the future or unavailable on terms that we believe areeconomically acceptable.

 

> 
*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 2011,approximately 60% of our total oil and gas production for theyear derived from offshore fields, mainly in Egypt, Norway,Italy, Angola, Gulf of Mexico, UK, Congo, Nigeria and Libya.Offshore operations in the oil and gas industry are inherentlyriskier than onshore activities. As recent events in the Gulf ofMexico have shown, the potential impacts of offshore accidentsand spills to health, safety, security and the environment can becatastrophic due to the objective difficulties in handlinghydrocarbons containment and other factors. Also offshoreoperations are subject to marine perils, including severe stormsand other adverse weather conditions and vessel collisions, aswell as interruptions or termination by governmental authoritiesbased on safety, environmental and other considerations. Failureto manage these risks could result in injury or loss of life,damage to property, environmental damage, and could result inregulatory action, legal liability, loss of revenues and damageto our reputation and could have a material adverse effect on ouroperations or financial condition. On March 25, 2012 a gas leakfollowing a well operation occurred at a wellhead platform of theElgin/Franklin gas field which is located in the UK North Sea.The field is operated by an international oil company. We believethat this oil company is taking all necessary steps to handle thesituation. We have a 21.87% interest in the field. We are closelymonitoring the situation to assess any possible liability to Eniwhich may arise from the incident.

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> 
*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 incidents in the Gulf of Mexico, the U.S.government imposed a moratorium on certain offshore drillingactivities, which was subsequently lifted in October 2010. Ouractivities in the Gulf of Mexico slowed down as a result of astricter authorization process for the permits concessions. Afterthe termination of the moratorium, in the first months of 2011,the suspended operations were restarted and the plannedoperations for 2011 were completed as scheduled with negligibleimpact on the Company’s production for the year. 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.

 

> 
*Exploratory drilling efforts may be unsuccessful*

Drilling for oil and gas involves numerous risks including therisk of dry holes or failure to find commercial quantities ofhydrocarbons. The costs of drilling, completing and operatingwells are often uncertain, and drilling operations may beunsuccessful as a result of a variety of factors, includingunexpected drilling conditions, pressure or irregularities informations, equipment failures or fires, blow-outs and variousforms of accidents, marine risks such as collisions and adverseweather conditions and shortages or delays in the delivery ofequipment. Exploring or drilling in offshore areas, particularlyin deep waters, is generally more complex and riskier than inonshore areas; the same is true for exploratory activity inremote areas or in challenging environmental conditions such asthose we are experiencing in the Caspian region or Alaska.Failure to discover commercial quantities of oil and natural gascould have an adverse impact on Eni’s future growthprospects, results of operations and liquidity. Because Eni plansto invest significant capital expenditures in executing high riskexploration projects, it is likely that Eni will incursignificant exploration and dry hole expenses in future years.Eni plans to explore for oil and gas offshore; a number ofprojects are planned in deep and ultra-deep waters or at deepdrilling depths, where operations are more difficult and costlythan in other areas. Deep water operations generally require asignificant amount of time before commercial production ofreserves can commence, increasing both the operational andfinancial risks associated with these activities. The Companyplans to conduct risky exploration projects offshore Gabon, Togo,Congo, Mozambique, in the Arctic and Barents Sea, the Black Seaand the Caspian Sea, among others. In 2011, the Company investedapproximately euro 1.2 billion in executing exploration projectsand it plans to spend approximately euro 1.4 billion per annum onaverage over the next four years which represents a steepincrease from management’s previous plans.

Furthermore, shortage of deep water rigs 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.

 

> 
*Development projects bear significant operational risks    which may adversely affect actual returns on such projects*

| Eni is progressing or plans to start        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. Eni’s future        results of operations and liquidity depend heavily on its        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, 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. Furthermore, projects executed with        partners and co-venturers reduce the ability of the        Company to manage risks and costs, and Eni could have        limited influence over and control of the operations,        behaviors and performance of its partners; |
|--------|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| • |   | 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 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;                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |

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| • |   | 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;                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |
|--------|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| • |   | changes in operating        conditions and costs. Over the last several years, the        industry has been impacted by rising costs for certain        critical productive factors including specialized labor,        procurement costs and costs for leasing third party        equipment or purchase services such as drilling rigs as a        result of industry-wide cost inflation 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 environments (i.e. the        Barents Sea, Alaska, the Yamal Peninsula, the Caspian Sea        and Iraq) where we are experiencing significantly higher        operating costs and environmental, safety and other costs        than in other areas of activity. 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.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |

Delays and differences between scheduled and actual timing ofcritical events, as well as cost overruns may adversely affectthe actual returns of our development projects. Finally,developing and marketing hydrocarbons reserves typically requiresseveral years after a discovery is made. This is because adevelopment project involves an array of complex and lengthyactivities, including appraising a discovery in order to evaluateits commercial potential, sanctioning a development project andbuilding and commissioning related facilities. As a consequence,rates of return for such long-lead-time projects are exposed tothe volatility of oil and gas prices and costs which may besubstantially different with respect to prices/costs assumed whenthe investment decision was actually made, leading to lower ratesof return. For example, we have experienced material costincrease and overruns and a substantial delay in the schedulingof production start-up at the Kashagan field, where developmentis ongoing. These negative trends were driven by a number offactors including depreciation of the U.S. dollar versus the euroand other currencies; cost escalation of goods and servicesrequired to execute the project; an original underestimation ofthe costs and complexity to operate in the North Caspian Sea dueto lack of benchmarks; design changes to enhance the operabilityand safety standards of the offshore facilities. The partners ofthe venture are currently discussing with Kazakh Authorities anupdate of the expenditures to complete the Phase 1 which wereincluded in the development plan approved in 2008. The consortiumpartners continue to target the achievement of first commercialoil production by end of 2012 or in early 2013.

See "Item 4 – Exploration & Production –Caspian Sea" for a full description of the material terms ofthe Kashagan project.

In the event the Company is unable to develop and operatemajor projects 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.

 

> 
*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 accordancewith such contracts, Eni is entitled to a portion of afield’s reserves, the sale of which is intended to coverexpenditures incurred by the Company to develop and operate thefield. The higher the reference prices for Brent crude oil usedto estimate Eni’s proved reserves, the lower the number ofbarrels necessary to recover the same amount of expenditures. In2011, the Company’s reserve replacement was negativelyaffected by lower entitlements in its PSAs for an estimatedamount of 97 mmBOE, which however did not impair theCompany’s ability to fully replace reserves produced in theyear. See "Item 4 – Business Overview –Exploration & Production" and "Item 5 –Outlook". Future oil and gas production is dependent on theCompany’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 reserves 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.

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.

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> 
*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 commoditybusiness with a history of price volatility. The single largestvariable that affects the Company’s results of operationsand financial condition is crude oil prices. Lower crude oilprices have an adverse impact on Eni’s results of operationsand cash flows. Eni generally does not hedge exposure tofluctuations in future cash flows due to crude oil pricemovements. As a consequence, Eni’s profitability dependsheavily 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. The economic downturn has particularly hit gas        demand in Europe and Italy in the second half of 2011 and        we expect a moderate recovery beginning in 2012 and        continuing over the next few years. However, there are        still risks of a financial collapse of the eurozone which        could trigger a new wave of financial crises and push the        world back into recession, leading to lower demand for        oil and gas and lower prices; |
| (iv)  |   | prices and availability of        alternative sources of energy. We believe that gas demand        in Europe in 2011 has been impacted by a shift to the use        of coal in firing power plants due to the fact of being        relatively cheaper than gas, as well as a 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.

 

> 
*Uncertainties in Estimates of Oil and Natural Gas    Reserves*

| Numerous 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;                                                                                                                                                                                                                                                                                                                                                         |
| • |   | 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 revisions as prices        fluctuate due to the cost recovery mechanism under the        Company’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.

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

The oil&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 42%. In 2011,management estimates that the tax rate of the Company’sExploration & Production segment was approximately 58%, whichis calculated excluding the impact of an adjustment to deferredtaxation triggered by a change of tax rate applicable to aCompany’s production sharing agreement.

Management believes that the marginal tax rate in theoil&gas industry tends to increase in correlation with higheroil prices which could make it more difficult for Eni totranslate higher oil prices into increased net profit. However,the Company does not expect that the marginal tax rate willdecrease in response to falling oil prices. Adverse changes inthe tax rate applicable to the Group profit before income taxesin its oil and gas operations would have a negative impact onEni’s future results 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&gas industry, including the risk ofincreased taxation, nationalization and expropriations.

 

> 
***Political Considerations***

*A substantial portion of our oil and gas reserves and    gas supplies are located in politically, socially and    economically unstable countries where we are exposed to    material disruptions to our operations*

| Substantial portions of Eni’s        hydrocarbon reserves are located in countries outside the        EU and North America, some of which may be politically or        economically less stable than EU or North American        countries. As of December 31, 2011, approximately 80% of        Eni’s proved hydrocarbon reserves were located in        such countries. Similarly, a substantial portion of        Eni’s natural gas supplies comes from countries        outside the EU and North America. In 2011, approximately        60% of Eni’s supplies of natural gas came from such        countries. See "Item 4 – Gas & Power –        Natural Gas Supplies". Adverse political, social and        economic developments in any of those countries may        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.        Particularly 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 504 million relating to cost        recovery under a petroleum contract in a non-OECD country        were the subject of an arbitration proceeding. In        Kazakhstan we signed a preliminary settlement agreement        with the Kazakh Authorities to solve certain claims        relating the recovery of expenditures incurred to develop        the Karachaganak field which is operated by a consortium        of contractor companies (being 32.5% Eni’s interest        in the initiative). The agreement, effective from June        30, 2012 after the satisfaction of conditions precedent,        involves Kazakhstan’s KazMunaiGas (KMG) acquiring a        10% interest in the project. This will be done by each of        the contracting companies transferring 10% of their        rights and interest in the Karachaganak Final Production        Sharing Agreement (FPSA) to KMG. The contracting        companies will receive $1 billion net cash post-tax        consideration ($325 million being Eni’s share); |
| (iii)  |   | restrictions on exploration,        production, imports and exports;                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |
| (iv)   |   | tax or royalty increases        (including retroactive claims); and                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |
| (v)    |   | civil and social unrest        leading to sabotages, acts of violence and incidents.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |

See "Item 4 – Exploration & Production –Oil and Natural Gas Reserves". While the occurrence of thoseevents is unpredictable, it is likely that the occurrence of suchevents could cause Eni to incur material losses or facilitydisruptions, by this way adversely impacting Eni’s resultsof operations and cash flows.

 

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

In the course of 2011, several North African and MiddleEastern oil producing countries experienced an extreme level ofpolitical instability that has resulted in changes ingovernments, unrest and violence and consequential 

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economic disruptions. As of end of 2011, approximately 30% ofthe Company’s proved oil & gas reserves were located inNorth Africa.

The situation was particularly serious in Libya where thepolitical instability escalated to turn out into an internalrevolution and conflict. In 2010, approximately 15% of Eni’sproduction originated from Libya and a material amount ofEni’s proved reserves were located in Libya. The situationof conflict forced Eni to shut down almost all its producingfacilities including exports through the GreenStream gas pipelinefor a period of eight months, with the sole exception of certaingas fields to support local production of electricity forhumanitarian purposes. The temporary shut down of theCompany’s production operations and gas exports negativelyaffected the operating and financial performance of theExploration & Production segment. Management estimated a lossof approximately 200 KBOE/d on average for the full year 2011 asa result of the Libyan disruptions. In the final months of 2011due to the conclusion of the internal conflict and the ongoinggradual return to political and social normality in the country,the Company has been able to progressively restart production atits sites and facilities and reopen the GreenStream pipeline.Currently, Eni’s production in Libya is flowing nearpre-crisis levels; management expects that the Company’sproduction in Libya will achieve 230-240 KBOE/d on average forthe full year 2012 compared to 108 KBOE/d in 2011 and 267 KBOE/din 2010.

Loss of Libyan gas during 2011 also negatively impactedresults of operations of the Gas & Power segment due to aworsened supply mix and lower sales to certain Italian shipperswho import the Libyan gas to Italy.

See Item 4 for additional details of our operations in Libyaand the impact of recent developments on our operations.

 

> 
*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 adopted measures designed to reduce thePresident’s discretion in enforcement under the ISA,including a requirement for the President to undertake aninvestigation upon being presented with credible evidence that aperson is engaged in sanctionable activity. CISADA also added tothe ISA provisions that an investigation need not be initiated,and may be terminated once begun, if the President certifies inwriting to the U.S. Congress that the person whose activities inIran were the basis for the investigation is no longer engagingin those activities or has taken significant steps towardstopping the activities, and that the President has receivedreliable assurances that the person will not knowingly engage inany sanctionable activity in the future. The President also maywaive sanctions, subject to certain conditions and limitations.

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 

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related divestment initiatives. If our operations in Iran aredetermined to fall within the scope of divestment laws orpolicies, sales resulting from such divestment laws and policies,if significant, could have an adverse effect on our share price.Even if our activities in and with respect to Iran do not subjectus to sanctions or divestment, companies with investments in theoil and gas sectors in Iran may suffer reputational harm as aresult of increased international scrutiny.

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.

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) entered into withthe National Iranian Oil Co (NIOC) between 1999 and 2001, and noother exploration and development contracts have been enteredinto since then. Under such Service Contracts, Eni has carriedout development operations in respect of certain oil fields, andis entitled to recovery of expenditures made, as well as aservice fee. The service contracts do not provide for payments tobe made by Eni, as contractor, to the Iranian Government (e.g.leasing fees, bonuses, significant amounts of local taxes); allmaterial future cash flows relate to the payment to Eni of itsdues. All projects mentioned above have been completed orsubstantially completed; the last one, the Darquain project, isin the process of final commissioning and is being handed over tothe NIOC. In this respect, we expect to incur operating costs inthe range of approximately US$10 to US$20 million per year overthe next few years for contractual support activities andservices.

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 2011, Eni’s production in Iran averaged 6 KBOE/d,representing less than 1% of the Eni Group’s totalproduction for the year. Eni’s entitlement in 2011represented less than 3% of the overall production from the oiland gas fields that we have developed in Iran. Eni does notbelieve that the results from its Iranian exploration andproduction have or will have a material impact on the EniGroup’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.

On November 21, 2011, President Barack Obama issued anexecutive order (the "Iran Executive Order")authorizing sanctions on persons that are determined to haveengaged in, after the date of the Iran Executive Order, certainactivities in support of Iran’s energy and petrochemicalssector that are not specifically targeted by the ISA as amendedby CISADA. Those activities include the provision to Iran ofgoods, services, technology or support that have a fair marketvalue above certain monetary thresholds and that could directlyand significantly contribute to the maintenance or enhancement ofIran’s ability to develop its petroleum resources or to themaintenance or expansion of Iran’s domestic production ofpetrochemical products. The type of sanctions from which thePresident may select is essentially identical to thosecontemplated by the ISA and CISADA, and other aspects of the IranExecutive Order similarly parallel the ISA, as amended by CISADA.As discussed above, pursuant to the Darquain service contract,entered into prior to the date of the Iran Executive Order, Eniis providing services in advance of the hand over to NIOC and hascertain technical assistance and service obligations, and anobligation to provide, upon request, spare parts and supplies forthe maintenance and operation of the field following hand over toNIOC. Nevertheless, the U.S. State Department has stated that thecompletion of existing contracts is not sanctionable under theIran Executive Order. Accordingly, we do not believe thatEni’s activities in Iran are sanctionable under the IranExecutive Order. However, if Eni’s activities in Iran aredetermined to be targeted activities under the Iran ExecutiveOrder, or any of Eni’s activities in Iran are determined tobe pursuant to an expansion, renewal or amendment of ourpre-existing contracts, or a new contract, Eni may be subject tosanctions thereunder, and Eni has no assurances that the U.S.State Department’s 2010 determination of non-sanctionabilityunder the ISA would similarly extend to sanctions under suchOrder. If sanctions were imposed, their impact could be materialand adverse to Eni.

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With respect to segments other than Exploration &Production, our Refining & Marketing segment has historicallypurchased amounts of Iranian crude oil under a term contract withthe NIOC and on a spot basis. We purchased 980 ktonnes, 1.63mmtonnes and 976 ktonnes in 2009, 2010 and 2011, respectively. Wepaid NIOC $419 million in 2009, $888 million in 2010 and $742million in 2011 for those purchases.

In addition, in 2009 and 2010 we purchased crude oil frominternational traders and oil companies who, based on bills ofloading and shipping documentation available to us, we believepurchased the crude oil from Iranian companies. Purchases weremainly on spot basis. In 2009, we purchased 278 ktonnes of crudeoil amounting to $147 million; in 2010, we purchased 2.09mmtonnes of crude oil amounting to $1.1 billion.

Eni has no involvement in Iran’s refined petroleum sectorand does not export refined petroleum to Iran. In addition, wehave occasionally entered into licensing agreement with certainIranian counterparties for the supply of technologies in thepetrochemical sector.

On December 31, 2011, the United States enacted the NationalDefense Authorization Act for the Fiscal Year 2012 (the"2012 NDAA"), which includes sanctions targetingcertain financial transactions involving Iran and in particularits banking institutions, including the Central Bank of Iran.These new sanctions, if fully implemented by the United States,are expected to make purchases of Iranian crude from Iran muchmore difficult due to the involvement of the Central Bank of Iranin such purchases. On January 23, 2012 the EU adopted a Councildecision intended to forbid the import, purchase and transport ofIranian crude oil and petroleum products, except for supplycontracts entered into before January 23, 2012 and to beperformed not later than July 1, 2012. The decision allows forthe supply of Iranian crude oil and petroleum products (or theproceeds derived from their supply) for the reimbursement ofoutstanding amounts due to entities under the jurisdiction of EUMember States, arisen with respect to contracts concluded beforeJanuary 23, 2012. We do not believe that any possible terminationof our purchases of crude oil from Iran would materially affectour refining and supply operations.

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 241 ktonnes, 321 ktonnes and 243 ktonnes in 2009,2010 and 2011, respectively. We paid Syrian Petrol Co $92 millionin 2009, $163 million in 2010 and $175 million in 2011 for thosepurchases.

In 2010, we purchased 115 ktonnes of crude oil amounting to$59 million and 165 ktonnes of crude oil amounting to $123million in 2011, in each case from international traders who,based on bills of loading and shipping documentation available tous, we believe purchased those raw materials from Syriancompanies.

In 2010, our Engineering & Construction segment wasawarded by Dijla Petroleum Co, an affiliate of the SyrianNational Oil Company, a contract for the central processingfacility to be installed at the Khurbet East oil field, on Block26.

Other than as described above, Eni is not currently investingin the country, and it has no contractual arrangements in placeto invest in the country. However, we have recently beenexploring investment opportunities in Syria.

 

> 
***Cyclicality of the Petrochemical Industry***

The petrochemical industry is subject to cyclical fluctuationsin demand in response to economic cycles, with consequentialeffects on prices and profitability exacerbated by the highlycompetitive environment of this industry. Eni’spetrochemical operations have been in the past and may beadversely affected in the future by worldwide economic slowdowns,intense competitive pressures and excess installed productioncapacity. Furthermore, Eni’s petrochemical operations havebeen facing increasing competition from Asian companies andnational oil companies’ petrochemical divisions which canleverage on long-term competitive advantages in terms of loweroperating costs and feedstock purchase costs. Particularly,Eni’s petrochemical operations are located mainly in Italyand Western Europe where the regulatory framework and publicenvironmental sensitivity are generally more stringent than inother 

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countries, especially Far East countries, resulting in higheroperating costs of our petrochemical operation compared to theCompany’s Asiatic competitors due to the need to comply withapplicable laws and regulations in environmental and otherrelated matters. Additionally, our petrochemical operations lacksufficient scale and competitiveness in a number of sites. Due toweak industry fundamentals, intense competitive pressures andhigh feedstock costs, our petrochemical operations incurredsubstantial operating losses in recent years. In 2011, ourpetrochemicals operations reported deeper operating loss comparedto the year earlier, down to euro 424 million, due to sharplylower margins which were impaired by higher oil-based feedstockcosts, and lower sales volumes which were affected by theeconomic downturn in the last part of the year. Looking forward,management expects that a weak economic outlook may affectoverall demand for our products. Furthermore, continuingescalating costs of crude oil represent a risk to theprofitability of the Company’s petrochemical operations asit may be difficult transferring higher feedstock costs toend-prices of products due to the high level of competition inthe industry and the commoditized nature of many of Eni’sproducts.

 

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

***i) Risks associated with the Trading Environment and    Competition in the Industry***

*In 2011, the Company’s results of operations and    cash flow were negatively affected by sharply lower unit    margins due to increasing competitive pressures arising from    large gas availability on the marketplace and weak demand    growth. We expect continuing competitive pressures and market    imbalances to affect our results in 2012 and beyond*

Management expects the outlook in the gas sector in Italy andEurope to remain unfavorable over the short to the medium term.In 2011, gas demand in Europe fell by 10% (down by 6% in Italy)due to the economic downturn, an expansion in the use ofrenewable sources, a shift to coal in thermoelectric productiondue to cost advantages, as well as unusual weather conditions.The profitability of the gas sector in 2011 was severely hit byreduced demand, oversupply and the high rate of liquidity at thecontinental hubs. Reduced sales opportunities forced operators toaggressively compete on pricing, particularly those operatorswhich were exposed the most to take-or-pay supply contracts. Ontheir part, large clients adopted opportunistic supply patterns,in order to take advantage of the large availability of spot gason the marketplace. These drivers led to a squeeze in marketingmargins due to decoupling trends between on one hand the risingcost of gas supplies that are indexed to the price of oil and itsderivatives as provided by pricing formulas in long-term supplycontracts, on the other hand weak selling prices at continentalhubs which have become the prevailing benchmark in sellingcontracts. In Italy competitive pressures dragged down gasmargins, too. Against this backdrop, Eni’s gas marketingbusiness reported operating losses down to euro 710 million,reversing the prior-year profit of euro 555 million.

Management forecasts that weak gas demand due to the currenteconomic downturn, the persistence of oversupplies on themarketplace and strong competition will represent risk factors tothe profitability outlook of the Company gas marketing businessover the next two to three years. Short-term perspectives areanticipated to be extremely unfavorable in Italy where theeconomic recovery is feeble, risks are ongoing of gas beingreplaced by coal in the thermoelectric production as well asrenewables, and finally gas margins are expected to be pressuredby recently announced liberalization measures by the ItalianGovernment intended to reduce the cost of gas to residentialusers (see below). Furthermore, management expects that the priceof gas to industrial and other large clients will progressivelyconverge to the pricing level at the continental hubs. It islikely that those trends will negatively impact the Marketingbusiness future results of operations and cash flows bypressuring gas margins, also considering Eni’s obligationsunder its take-or-pay supply contracts (see below).

 

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

| Management estimates that gas demand        will grow at an average rate of approximately 2% in Italy        and Europe till 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 

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Russia, Libya and Algeria, and large availability of LNG on aworldwide 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 approximately 50-60 BCM of new import capacity over thenext few years. Those include the Medgaz pipeline connectingAlgeria to the Iberian Peninsula, the Nord Stream pipelineconnecting Russia to Germany through the Baltic Sea as well asnew LNG facilities, particularly a new plant is set to commenceoperations in the Netherlands with a process capacity of up to 12BCM. Further 27 BCM of new supplies will be secured by a secondline of the Nord Stream later and new storage capacity will comeonline. In Italy, the gas offered will increase moderately in thenext future as a new LNG plant is expected to start operations atLivorno with a 4 BCM treatment capacity and effects are in placeof Law Decree No. 130/2010 about storage capacity (see below)which is expected to increase by 4 BCM by 2015. In addition theGreenStream pipeline is expected to achieve full operations in2012 and gas supplies from Libya will be restarted. Thesedevelopments 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,particularly our internal forecast about a rebalancing betweendemand and supplies in Europe which we expect by the end of ourfour-year industrial plan. See "Item 4 – Gas& Power" for further information about ourlong-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 17 years and apricing mechanism that indexes the cost of gas to the price ofcrude oil and its products (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. Amounts ofcash pre-payments and time schedules for collecting pre-paid gasvary from contract to contract. Generally speaking, cashpre-payments are calculated on the basis of the energy pricescurrent in the year of non-fulfillment with the balance due inthe year when the gas is actually collected. Amounts ofpre-payments range from 10 to 100 percent of the full price. Theright to collect pre-paid gas expires within a ten-year term insome contracts or remains in place until contract expiration inother arrangements. In addition, rights to collect pre-paid gasin future years can be exercised provided that the Company hasfulfilled its minimum take obligation in a given year and withinthe limit of the maximum annual quantity that can be collected ineach contractual year. In this case, Eni will pay the residualprice calculating it as the percentage that complements 100%,based on the arithmetical average of monthly base prices currentin the year of the off-take. Similar considerations apply toship-or-pay contractual obligations.

Management believes that the current outlook for weak gasdemand growth and large gas availability on the marketplace, thepossible evolution of sector-specific regulation, as well asstrong competitive pressures on the marketplace represent riskfactors to the Company’s ability to fulfill its minimum takeobligations associated with its long-term supply contracts.

Since the beginning of the downturn in the European gas marketlate in 2009, Eni has incurred the take-or-pay clause as theCompany collected lower volumes than its minimum take obligationsin each of those years accumulating deferred costs for an amountof euro 2.22 billion (net of limited amounts of volume make-up)and has paid the associated cash advances amounting to euro 1.76billion, being the difference between said amounts the payabletowards gas suppliers outstanding as of the balance sheet date in2011.

Considering ongoing market trends and the Company’soutlook for its sales volumes which are anticipated to grow at amoderate pace to 2015, as well as the benefit associated withcontract renegotiations which may temporarily reduce the annualminimum take, management believes that it is likely that in thenext two to three years Eni will fail to fulfill its minimum takeobligations associated with its supply contracts thus triggeringthe take-or-pay clause and the obligation to pay cash advances inrelation to substantial amounts of gas.

In case Eni fails to off-take the contractual minimum amounts,it will be exposed to a price risk, because the purchase priceEni will ultimately be required to pay is based on pricesprevailing after the date on which the off-take obligation arose.In addition, Eni is subject to the risk of not being able todispose of pre-paid volumes. The Company also expects to incurfinancing costs to pay cash advances corresponding to contractualminimum amounts. As a result, the Company’s selling margins,results of operations and cash flow may be negatively affected.

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For further information on the Company’s take-or-paycontracts 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***

*The natural gas market in Italy is highly regulated in    order to favor the opening of the market and development of    competition*

The main aspects of the Italian gas sector regulations arerules to access to infrastructures (transport backbones, storagefields, distribution networks and LNG terminals), criteria toestablish tariffs for transport, distribution, re-gasificationand storage services and the functional unbundling ofundertakings owning and managing gas infrastructures whichprevent a controlling entity from interfering in thedecision-making process of such undertakings. Also the ItalianAuthority for Electricity and Gas ("AEEG") is entrustedwith certain powers in the matters of approving specific codesfor each regulated activity, and monitoring natural gas pricesand setting pricing mechanisms for supplies to users which areentitled to be safeguarded in accordance with applicableregulations. Those clients which mainly include households andresidential customers (services, hospitals, large retailers,small commercial activities, etc.) have right to obtain gas fromtheir suppliers at a regulated tariff set by the Authority (seebelow).

Law Decree No. 1 enacted by the Italian Government on January24, 2012, the so called Liberalization Decree, is expected tohave major impacts on the Italian gas sector, including anobligation on part of Eni to divest its interest in Snam (seebelow).

In 2011, new legislation went into effect which implemented amechanism of market shares as per Legislative Decree No. 130 ofAugust 13, 2010. This legislation replaced the previous system ofantitrust thresholds defined by Legislative Decree No. 164 of May23, 2000. The new decree has introduced a 40% ceiling to thewholesale market share of every Italian gas operator that inputsgas into the Italian backbone network. This ceiling is raised to55% for Eni, having it committed itself to build new storagecapacity in Italy for a total of 4 BCM within five years from theenactment of the decree. In case of violation of the mandatorythresholds, the law provides for a mandatory gas release atregulated prices up to 4 BCM over a two-year period following theascertainment of the ceiling breach.

Eni believes that this new gas regulation will increase thecompetitiveness of the wholesale natural gas market 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 (qualified as non eligiblecustomers as of December 31, 2002 as defined by LegislativeDecree No. 164/2000 recently modified by Resolution ARG/gas No.71/2011) taking into account the public goal of containing theinflationary pressure due to rising energy costs. Accordingly,decisions of the Authority for Electricity and Gas on thesematters may limit the ability of Eni to pass an increase in thecost of the raw material onto final consumers of natural gas. Theindexation mechanism set by the Authority for Electricity and Gaswith Resolution No. 64/2009 basically provides that the cost ofthe raw material in pricing formulas to the residential sector beindexed to movements in a basket of hydrocarbons. In 2010, theAuthority for Electricity and Gas with Resolution ARG/gas 89/10amended that indexation mechanism and established a fixedreduction of 7.5% of the raw material cost component in the finalprice of supplies to residential users in the thermal yearOctober 1, 2010-September 30, 2011. This resolution negativelyaffected Eni’s results of operations in its gas marketingbusiness for fiscal year 2011.

Again in 2011 with Resolution ARG/gas 77/11, the AEEG provideda reduction of 6.5% of the raw material cost component for thethermal year October 1, 2011-September 30, 2012. The resolutionwill negatively affect Eni’s results 

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of operations and cash flows in 2012. The Company believesthat it is possible that in the near future the AEEG could enactnew measures that will impact the indexation mechanism of thecost of gas in supplies to residential customers.

In particular the Italian decree on liberalizations puts theAEEG in charge of gradually introducing reference to the price ofcertain benchmarks quoted at continental hubs in the indexationmechanism of the cost of gas in the pricing of sales to the abovementioned customers. Management believes that this new pendingrule will negatively affect the profitability of the Companysales in those market segments because currently and for years tocome the prices at continental hubs are lower than the oil-linkedprices that to date have been used to set prices for residentialcustomers.

 

> 
*Due to the regulated access to natural gas transport    infrastructures in Italy, Eni may not be able to sell in    Italy all the natural gas volumes it planned to import and,    as a consequence, the Company may be unable to sell all the    natural gas volumes which it is committed to purchase under    take-or-pay contract obligations*

Other risk factors deriving from the regulatory framework areassociated with the regulation of access to the Italian gastransport network that is currently set by Decision No. 137/2002of the Authority for Electricity and Gas. The decision isfully-incorporated into the network code presently in force. Thedecision sets priority criteria for transport capacityentitlements at points where the Italian transport networkconnects with international import pipelines (the so-called entrypoints to the Italian transport system). Specifically, operatorsthat are party to take-or-pay contracts, such as Eni, areentitled to a priority right in allocating available transportcapacity within the limit of average daily contractual volumes.Gas volumes exceeding average daily contractual volumes get nopriority right. In case of congestion at any entry points, suchvolumes are entitled to available capacity on a proportionatebasis together with all pending requests for capacityassignments. Under its take-or-pay purchase contracts, Eni mayoff-take daily volumes in excess of average daily contractualvolumes. This flexibility is important to Eni’s commercialprograms as it is used when demand peaks, usually during thewintertime. Eni believes that Decision No. 137/2002 is incontrast with the rationale of the European regulatory frameworkon the gas market as provided by European Directive No.2003/55/EC. The Company, based on that belief, has commenced anadministrative procedure to repeal Decision No. 137/2002 beforean administrative Court which recently confirmed in partEni’s position. An administrative appeal court has alsoconfirmed the Company’s position. Specifically, the Courtstated that the purchase of the contractual flexibility is anobligation on part of the importer, which responds to acollective interest. According to the Court, there is noreasonable motivation whereby volumes corresponding to suchcontractual flexibility should not be granted a priority right inaccessing the network in case congestion occurs. At the moment,however, no case of congestion occurred at entry points to theItalian transport infrastructure so as to impair Eni’smarketing plans.

Management believes that Eni’s results of operations andcash flows could be adversely affected should a combination ofmarket conditions and regulatory constraints prevent Eni fromfulfilling its minimum take contract obligations. See "Item5 – Outlook".

 

> 
*The Italian Government has taken steps to increase    competition in the Italian natural gas market, including a    mandatory disposal of Eni’s interest in Snam. Such    regulatory developments may adversely affect Eni’s    results of operations and cash flows*

Italian administrative and governmental institutions andpolitical forces have been arguing for a higher degree ofcompetition in the Italian natural gas market and this mayproduce significant developments in this area.

Particularly, both the Italian Authority for Electricity andGas and the Italian Antitrust Authority (the “AntitrustAuthority”) have conducted several reviews and inquiries onthe status of the Italian natural gas market, targeting theoverall level of competition, the degree of opening tocompetition of the residential sector, levels of entry-exitbarriers, and other areas such as sub-investment in the storagesector. Both the Authority for Electricity and Gas and theAntitrust Authority have concluded that the vertical integrationof Eni in the supply, transport, distribution, storage andmarketing of gas may hamper development of a competitive gasmarket in Italy.

On January 24, 2012, the Italian Government enacted Law DecreeNo. 1, the so called Liberalization Decree, establishing newmeasures to enhance competition in the Italian natural gasmarket. The Decree was promulgated by the Italian Parliament atthe end of March 2012. In addition to the above mentionedprovision about the adoption of a more competitive pricingmechanism in supplies to residential customers, the Decree openedup the process of mandatory divestiture of Eni’s interest inSnam. The Decree calls for the Italian Prime Minister topromulgate an act to set criteria, terms and conditions of thedivestment, including the residual stake that Eni is allowed toretain in the divested entity. These criteria, terms andconditions are expected by the end of May 2012.

Management believes the institutional debate on the degree ofcompetition in the Italian natural gas market and the regulatoryactivity to be critical and cannot exclude negative impactsderiving from developments on these matters on Eni’s futureresults of operations and cash flows.

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For more information on these issues see "Item 4 –Regulation – 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. In the years prior to 2008, Eni recordedsignificant loss provisions due to unfavorable developments incertain antitrust proceedings before the Italian AntitrustAuthority, and the European Commission. It is possible that theGroup may incur significant loss provisions in future yearsrelating to ongoing antitrust proceedings or new proceedings thatmay possibly arise. The Group is particularly exposed to thisrisk in its natural gas, refining and marketing andpetrochemicals activities due to the fact that Eni is theincumbent operator in those markets in Italy and a large Europeanplayer. In 2011 we accrued a risk provision amounting to euro 69million to take into account a sentence of an European judicialauthority regarding a charge against the Company involvingalleged anti-competitive practices in the field of elastomers inthe petrochemicals sector. See “Item 18 – Note 34 tothe Consolidated Financial Statements” for a fulldescription of Eni’s main pending antitrust proceedings.Furthermore, based on the findings of antitrust proceedings,plaintiffs could seek payment to compensate for any allegeddamages as a result of antitrust business practices on part ofEni. Both these risks could adversely affect the Group’sfuture results of operations and cash flows.

 

> 
***Environmental, Health and Safety Regulation***

*Eni may incur material operating expenses and    expenditures in relation to compliance with applicable    environmental, health and safety regulations*

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 facilitiesowned by Eni. In addition, Eni’s operations are subject tolaws and regulations relating to the production, handling,transportation, storage, disposal and treatment of wastematerials.

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 environment health or safety damage as well asdamage to its reputation. Additionally, in the case of violationof certain rules regarding the safeguard of the environment andsafety in the workplace, the Company can be liable due tonegligent or willful conduct on part of its employees as per LawDecree 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 

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possible enactment of stricter regulations that increase ouroperating costs, affect product sales and reduce profitability.For more discussion about this topic see "Item 4 –Environmental Regulations".

| 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.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 for 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 due to its past and present activities andbecause several Group industrial installations are or werelocalized in Italy. In fact, many environmental liabilities havearisen as the Group engaged in a number of industrial activitiesthat were subsequently divested, closed, liquidated or shut down.At those industrial sites Eni has commenced a number of remedialplans to restore and clean-up proprietary or concession areasthat were contaminated and polluted by the Group’sindustrial activities in previous years. Notwithstanding theGroup claimed that it cannot be held liable for such pastcontaminations as permitted by applicable regulations in case ofdeclaration rendered by a guiltless owner – particularlyregulations that enacted into Italian legislation the DirectiveNo. 2004/35/EC, plaintiffs and several public administrationshave been acting against Eni to claim both the environmentaldamage and measures to perform clean-up and remediation projectsin a number of civil and administrative proceedings. In 2010, Eniproposed a global transaction to the Italian Ministry for theEnvironment related to nine sites of national interest where theGroup has been performing clean-up activities in order to definethe scope of work of each clean-up project and settle all pendingadministrative and civil litigation. To account for thisproposal, the Group accrued a pre-tax risk provision amounting toeuro 1.1 billion in its 2010 Consolidated Financial Statements.Discussions with the Italian Ministry for the Environment areongoing in order to define all aspects of the proposedtransaction.

Remedial actions with respect to other Company’s sitesare expected to continue in the foreseeable future, impacting ourliquidity as the Group has accrued risk provisions to cope withall existing environmental liabilities whereby both a legal orconstructive obligation to perform a clean-up or other remedialactions is in place and the associated costs can be reasonablyestimated. The accrued amounts represent the management’sbest estimates of the Company’s liability.

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.

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> 
***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. See disclosure of pending litigation in “Item 18– Note 34 to the Consolidated 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 Petrochemical segments are affectedby changes in the price of crude oil and by the impacts ofmovements in crude oil prices on margins of refined andpetrochemical products.

 

> 
*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 Petrochemical businesses,depends upon the speed at which the prices of gas and productsadjust to reflect 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 2011 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 by our gas marketingbusiness. We expect that such unfavorable trend will continue in2012 and beyond due to ongoing rising trends in crude oil pricesand weak spot prices pressured by sluggish industry fundamentalsand competition. In addition, the Italian Authority forElectricity and Gas may limit the ability of the Company to passcost increases linked to higher oil prices onto selling prices insupplies to residential customers and small businesses as theItalian Authority for Electricity and Gas regulates theindexation mechanism of the raw material cost in selling formulasto those customers. Finally, we expect a negative impact on theprofitability of our gas sales to residential customers in Italydue to the possible enactment of the Italian law decree onliberalizations. See the paragraph "Risks in theCompany’s gas business" above for more information.

In addition, in light of changes in the European gas marketenvironment, Eni has recently adopted new risk managementpolicies. These policies contemplate the use of derivativecontracts to mitigate the exposure of Eni’s future cashflows to future changes in gas prices; such exposure had beenexacerbated in recent years by the fact that spot prices atEuropean gas hubs have ceased to track the oil prices to whichEni’s long-term supply contracts are linked. These policiesalso contemplate the use of derivative contracts for speculativepurposes whereby Eni will seek to profit from opportunitiesavailable in the gas market based, among other things, on itsexpectations regarding future prices. These contracts may lead togains as well as losses, which, in each case, may be significant.All derivative contracts that are not entered into for hedgingpurposes in accordance with IFRS will be accounted through profitand loss, resulting in higher volatility of the gasbusiness’ operating profit. Please see “Item 5 –Financial Review – Management’s Expectations ofOperations” and “Item 11 – Quantitative andQualitative Disclosures About Market Risk”.

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

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

Results of operations of 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 crude qualities versus lightcrude qualities, taking into account the ability of Eni’srefineries to process complex crudes that represent a costadvantage when market prices of heavy crudes are relativelycheaper than the marker Brent price. In 2011, Eni’s refiningmargins were unprofitable as the high cost of oil was onlypartially transferred to final prices of fuels at the pumppressured by weak demand, high worldwide and regional inventorylevels and excess refining capacity particularly in theMediterranean area. Management does not expect any significantrecovery in industry fundamentals over the short to medium term.The sector as a whole will continue to suffer from weak demandand excess capacity, while the cost of oil feedstock may continuerising and price differentials may remain compressed. In thiscontext, management expects that the Company’s refiningmargins will remain at unprofitable levels in 2012 and possiblybeyond. In addition, due to a reduced outlook for refiningmargins and the persistence of weak industry fundamentals,management took substantial impairment charges amounting to euro645 million before tax to align the book value of the Company’srefining plants to their lower values-in-use which impacted 2011results 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 2011, Eni’s petrochemicals businessreported wider operating losses down to euro 424 million due tosharply lower margins on basic petrochemicals products, mainlythe margin on cracker, reflecting rising oil costs and as demandfor petrochemicals commodities plunged in the last quarter of theyear dragged down by the economic downturn. Rising oil-basedfeedstock costs will continue to negatively affect Eni’sresults of operations and liquidity in this business segment in2012.

 

> 
***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 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.

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> 
***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, credit risk and countryrisk.

For a description of Eni’s exposure to Country risk seeparagraph "Political considerations" above.

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 executing 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 Group’s 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.

 

> 
***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 associated withits plans to find and develop oil and gas reserves, volume of gaspurchased under its long-term gas purchase contracts which is notcovered by contracted sales, its refining margins and otheractivities. For further discussion on this issues see paragraph"Changes in crude oil and natural gas prices may adverselyaffect Eni’s results of operations" above and"Item 11 – Quantitative and Qualitative Disclosuresabout Market Risk".

On the other hand, the Group actively manages its exposure tocommercial risk which arises when a contractual sale of acommodity has occurred or it is highly probable that it willoccur and the Group aims at locking in the associated commercialmargin. The Group’s risk management objectives are tooptimize the risk profile of its commercial activities byeffectively managing economic margins and safeguarding the valueof Eni assets. Also, as part of its risk management activitiesfrom 2011 the Group has commenced trading activities in order toseek to profit from short-term market opportunities. TheGroup’s risk management has evolved particularly in responseto the deep changes occurred in the competitive landscape of thegas marketing business, gas volatile margins and development ofliquid gas spot markets.

| 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. The Company also intends to implement        strategies of dynamic forward trading in order to        maximize the economic value of the flexibilities        associated with its assets. Price risks related to asset        backed trading activities are mitigated by the natural        hedge granted by the assets’ availability. |

These contracts may lead to gains as well as losses, which, ineach case, may be significant. Those derivatives are accountedfor through profit and loss, resulting in higher volatility inEni’s operating profit, particularly in the gas marketingbusiness.

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> 
***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 Petrochemical segment are denominated both ineuros and U.S. dollars. Accordingly, a depreciation of the U.S.dollar against the euro generally has an adverse impact onEni’s results of operations and liquidity because it reducesbooked revenues 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 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 the slow-down of the global economy. If there are extendedperiods of constraints in these markets, or if we are unable toaccess the markets, including due to our financial position ormarket sentiment as to our prospects, at a time when cash flowsfrom our business operations may be under pressure, our abilityto maintain our long-term investment program may be impacted witha consequent effect on our growth rate, and may impactshareholder 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 2011 Consolidated FinancialStatements, Eni accrued an allowance against doubtful accountsamounting to euro 171 million, mainly relating the Gas &Power business and to a lesser extent, the Refining &Marketing business. Management believes that both businesses areparticularly exposed to credit risks due to their 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 situation.

 

> 
***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 

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notes thereto, including discussion and disclosure ofcontingent liabilities. Estimates made are based on complex orsubjective judgments and past experience and other assumptionsdeemed reasonable in consideration of the information availableat the time. The accounting policies and areas that require themost significant judgments and estimates to be used in thepreparation of the Consolidated Financial Statements are inrelation to the accounting for oil and natural gas activities,specifically the determination of proved and proved developedreserves, impairment of fixed assets, intangible assets andgoodwill, asset retirement obligations, business combinations,pensions and other post-retirement benefits, recognition ofenvironmental liabilities and recognition of revenues in theoilfield services construction and engineering businesses.Although management believes these estimates to represent thebest outcome of the estimation process, actual results coulddiffer from such estimates, due to, among other things, thefollowing factors: uncertainty, lack or limited availability ofinformation, availability of new informative elements, variationsin economic conditions such as prices, costs, other significantfactors including evolution in technologies, industrial practicesand standards (e.g. removal technologies) and the final outcomeof legal, environmental or regulatory proceedings. See “Item5 – Critical Accounting 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.

 

 

**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,management of gas infrastructures, power generation,petrochemicals, oilfield services and engineering industries. Enihas operations in 85 countries and 78,686 employees as ofDecember 31, 2011.

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 SalzanoPasquale, 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 41 countries, including Italy,Libya, Egypt, Norway, the UK, Angola, Congo, the United States,Kazakhstan, Russia, Algeria, Australia, Venezuela, Iraq andMozambique. In 2011, Eni average daily production amounted to1,523 KBOE/d on an available for-sale basis. As of December 31,2011, Eni’s total proved reserves amounted to 7,086 mmBOE;proved reserves of subsidiaries totaled 5,940 mmBOE; Eni’sshare of reserves of equity-accounted entities were 1,146 mmBOE.In 2011, Eni’s Exploration & Production segment reportednet sales from operations (including inter-segment sales) of euro29,121 million and operating profit of euro 15,887 million.

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Eni’s Gas & Power segment engages in supply, tradingand marketing of gas and electricity, managing gasinfrastructures for transport, distribution, storage,re-gasification of natural gas, and LNG supply and marketing.This segment also includes the activity of power generation thatis ancillary to the marketing of electricity. In 2011, Eni’sworldwide sales of natural gas amounted to 96.76 BCM, including2.86 BCM of gas sales made directly by the Eni’s Exploration& Production segment in Europe and the U.S. Sales in Italyamounted to 34.68 BCM, while sales in European markets were 52.98BCM that included 3.24 BCM of gas sold to certain importers toItaly.

Through Snam Rete Gas, Eni operates an Italian network of highand medium pressure pipelines for natural gas transport that isapproximately 32,000-kilometer long, while outside Italy, Eniholds capacity entitlements on a network of European highpressure pipelines which transport gas produced in Russia,Algeria, Libya and North Europe production basins to Europeanmarkets. Snam, through its 100 percent-owned subsidiary Italgasand other subsidiaries, engages in the distribution of naturalgas in Italy serving 1,330 municipalities through a low pressurenetwork consisting of approximately 50,300 kilometers ofpipelines as of December 31, 2011. Snam, through its wholly-ownedsubsidiary Stoccaggi Gas Italia (Stogit) operates in natural gasstorage activities in Italy through eight storage fields. Eniproduces power and steam at its operated sites of Livorno,Taranto, Mantova, Ravenna, Brindisi, Ferrera Erbognone, Ferraraand Bolgiano with a total installed capacity of 5.3 GW as ofDecember 31, 2011. In 2011, sales of power totaled 40.28 TWh. Enioperates a re-gasification terminal in Italy and holds interestsor capacity entitlements in a number of LNG facilities in Europe,Egypt and in certain projects in the U.S., one of which is beingcompleted. In 2011, Eni’s Gas & Power segment reportednet sales from operations (including inter-segment sales) of euro34,731 million and operating profit of euro 1,758 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 2011, processed volumes ofcrude oil and other feedstock amounted to 31.96 mmtonnes andsales of refined products were 45.02 mmtonnes, of which 26.01mmtonnes in Italy. Retail sales of refined products at operatedservice stations amounted to 11.37 mmtonnes including Italy andthe rest of Europe. In 2011, Eni’s retail market share inItaly through its “eni” and “Agip” brandednetwork of service stations was 30.5%. In 2011, Eni’sRefining & Marketing segment reported net sales fromoperations (including inter-segment sales) of euro 51,219 millionand operating loss of euro 273 million.

Through its wholly-owned subsidiary Eni Trading & ShippingSpA and certain corporate departments, the Group engages inderivative activities targeting the full spectrum of energycommodities on both the physical and financial trading venues.The objective of this activity is to both hedge part of the Groupexposure to the commodity risk and optimize commercial margins byentering speculative derivative transactions. Eni Trading &Shipping SpA and its subsidiaries also provide Group companieswith crude oil and products supply, trading and shippingservices. The results of this entity are reported within the Gas& Power segment with regard to the results recorded ontrading gas and electricity derivatives; while the portion ofresults which pertains to oil and products trading derivativesand supply and shipping services are reported within the Refining& Marketing segment.

Eni’s Petrochemical activities include production ofolefins and aromatics, basic intermediate products, polyethylene,polystyrenes, and elastomers. Eni’s petrochemical operationsare concentrated in Italy and Western Europe. In 2011, Eni sold4.04 mmtonnes of petrochemical products. In 2011, Eni’sPetrochemical segment reported net sales from operations(including inter-segment sales) of euro 6,491 million and anoperating net loss of euro 424 million.

Eni engages in oilfield services, construction and engineeringactivities through its partially-owned subsidiary Saipem andsubsidiaries of Saipem (Eni’s interest being 42.92%). Saipemprovides a full range of engineering, drilling and constructionservices to the oil and gas industry and downstream refining andpetrochemicals sectors, mainly in the field of performing largeEPC (engineering, procurement and construction) contractsoffshore and onshore for the construction and installation offixed platforms, subsea pipe laying and floating productionsystems and onshore industrial complexes. In 2011, Eni’sEngineering & Construction segment reported net sales fromoperations (including intra-group sales) of euro 11,834 millionand operating profit of euro 1,422 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 increase the Company’sprincipal businesses over both the medium and the long-term, withimproving profitability.

| • |   | In the Exploration &        Production business we plan to profitably increase oil        and gas production and to fully replace produced        reserves. We intend to boost returns by strengthening our        competitive position in core areas, increasing the volume        of operated production and retaining a solid portfolio of        long-term plateau fields. We expect that our exploration        activities will play a crucial role in supporting reserve        replacement and granting the Group the access to new        growth opportunities. Our growth plans will benefit from        our ongoing |
|--------|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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|   |   | commitment in establishing        and consolidating our partnerships with key host        Countries, leveraging the Eni co-operation model.        Management expects that a continuing focus on        technological innovation, risk prevention and operational        efficiency will drive increasing rates of reserve        recovery and better cost control.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |
|--------|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| • |   | We intend to improve the        profitability of our operations in the Gas & Power        business by a continuing focus on supply flexibility in        order to enhance the competitiveness of the        Company’s gas offering as we manage through the        downturn. This will be achieved by leveraging the        economic benefits associated with ongoing renegotiations        of our long-term supply contracts, a diversified and        flexible supply mix and extracting value from Eni’s        logistics assets and its presence at the continental        hubs. We intend to drive sales and margin expansion by        developing a pan-European commercial platform and a        multi-country approach, boosting LNG sales and enhancing        our combined offer of gas and electricity. We intend to        retain our large base of residential customers in Italy        and Europe by continuing service improvement. |
| • |   | Our priority in the Refining        & Marketing business is to restore profitability        against the backdrop of a depressed trading environment.        We plan to step up cost reduction initiatives, energy        saving and optimization of plant operations, and        integration of refinery cycles in order to drive margin        expansion. 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, client retention and non-oil        profit contribution taking into account a negative        outlook for fuel consumption. Outside Italy, Eni will        grow strategically in target European markets and divest        marginal assets.                                |
| • |   | We believe that our        Engineering & Construction business is well        positioned to deliver continuing revenue and        profitability growth leveraging on its strong order        backlog, technologically-advanced assets and competencies        in engineering and project management and execution in        the more valuable segments of large and complex oil and        gas developments.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |
| • |   | In the petrochemical        business, we are seeking to restore the economic        equilibrium of Polimeri Europa over the medium-term. We        plan to revamp our business strategy targeting a gradual        reduction of our exposure to the unprofitable,        commoditized productions, while growing the        Company’s presence in niche productions, which have        shown a good resilience in the face of the downturn, and        innovative productions in the field of bio-chemicals        which are promising attractive growth rates.                                                                                                                                                                                                                                                                                                                                                                                              |

In executing this strategy, management intends to pursueintegration opportunities among businesses and within them and tostrongly focus on efficiency improvement through technologyupgrading, cost efficiencies, commercial and supply optimizationand continuing process streamlining across all businesses. Overthe next four years, Eni plans to execute a capital expenditureprogram amounting to euro 59.6 billion to support continuingorganic growth in its businesses, mainly the Exploration &Production which will absorb 75% of planned expenditures. Thatamount includes funds destined to joint venture projects andassociates.

For the full year 2012, management expects a capital budget inline with the amounts invested in 2011 (in 2011 capitalexpenditure amounted to euro 13.44 billion, while expendituresincurred in joint venture initiatives and other investmentsamounted to euro 0.36 billion).

Eni plans to fund these capital expenditure projects mainly bymeans of cash flows provided by operating activities. Capitalprojects will be assessed and implemented in accordance withtight financial criteria. Management plans to progressivelyreduce the ratio of net borrowings to total equity leveraging onprojected cash flows from operations at our Brent scenario of $90a barrel in 2012 and 2013 and then $85 a barrel. We expect todivest certain non-strategic assets; cash from disposals willhelp the Company achieve the planned reduction in the ratio. Ourfinancial projections factor in the expected cash outs toremunerate Eni’s shareholders in accordance with ourdividend policy which is targeting a progressive increase in thedividend in line with the expected inflationary rate in OECDcountries. This dividend policy is based on the Company’splanning assumptions for Brent prices and other assumptions (see"Item 5 – Management’s Expectations ofOperations" and "Item 3 – Risk Factors").

For fiscal year 2011, management plans to distribute adividend of euro 1.04 a share subject to approval from theGeneral Shareholders Meeting scheduled on May 8, 2012; the 2011dividend represents a 4% increase from the previous year.

Further details on each business segment strategy arediscussed throughout this Item 4. For a description of risks anduncertainties associated with the Company’s outlook, and thecapital expenditure program see "Item 5 –Management’s Expectations of Operations" and "Item3 – Risk Factors".

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. Eni plans to direct most of itsplanned resources to improve certain technologies which target tomaximize the recovery rate of hydrocarbons from reservoirs,optimize well drilling, completion and performance with a view toemploying those techniques in challenging environments, designfacilities and installations to develop marginal and deep andultra-deep fields, as well as commercial development ofunconventional resources. Projects in refining will target thedevelopment of advanced fuels, lubricants and additives to matchan expected demand for high quality automotive products in thefuture, refining process able to maximize

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product yields and the development of a gasoil enhanced withbio-components. In petrochemicals our efforts will target productinnovation in the valuable segment of elastomers and styrene witha view to strengthening the business competitive position.Important resources are planned to be dedicated to such projectsthat will enhance the degree of environmental preservation andsafety of the Company operations by developing renewable sourcesof energy, particularly in the field of solar and photovoltaicenergy, the recycle of urban waste so as to transform it inrefining feedstock, carbon capture and sequestration, operationssafety and integrity in upstream, and environmental clean-up andremediation.

 

> 
***Significant Business and Portfolio Developments***

| The significant business and portfolio        developments that occurred in 2011 and to date in 2012        were the following: |
|---------------------------------------------------------------------------------------------------------------------------------|

| • |   | in March 2012, we signed a        preliminary agreement with Gazprom to revise the terms of        the supply contracts of Russian gas to Eni’s        operations in Italy. The economic benefits of the        agreement will be retroactive from the beginning of 2011        and will be recognized through profit in 2012. For the        agreement to become effective, it is necessary that the        existing supply contracts be amended, accordingly;                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |
|--------|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| • |   | we made a large gas        discovery off the Mozambique coast with the Mamba South 1        exploratory well (Eni operator with a 70% interest),        located in Area 4 in the Rovuma Basin. According to field        test results and our internal estimates, we believe that        the new discovery may contain substantial amounts of        reserves. We achieved further important discoveries in        the Northern and Eastern areas of the lease with the        Mamba North 1 and Mamba North East 1 wells early in 2012;                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |
| • |   | on March 29, 2012 Eni signed        agreements with Amorim Energia BV and Caixa Geral de        Depósitos, SA (“CGD”), according to which Eni        will sell a 5% interest in Galp Energia (Eni’s        interest being 33.34%) to Amorim Energia and, following        the sale, will cease to be bound by the shareholders        agreement currently in place between the three companies.        Amorim Energia has agreed to purchase the 5% interest in        Galp Energia within 150 days. As part of these agreement        Eni has the right to sell up to 18%, which could        potentially increase by 2% if convertible bonds are        issued, of the share capital of Galp Energia in the        market. CGD has a tag along right in relation to its        shareholding of 1% of the share capital of Galp Energia        in connection with the sales carried out by Eni. After        the sale of the 18% interest, Eni will also have the        right to sell its remaining shares in Galp Energia. In        the case of such further sale, Amorim Energia has a call        option which gives it the right to purchase, or designate        a third party to purchase, up to 5% of the share capital        of Galp Energia. With regards to the sale of the        remaining 5.34%, Amorim Energia has a right of first        refusal under which it can choose to purchase, or        designate a third party to purchase, up to 5.34%, if the        call option referred to above has been exercised, or        10.34% if the call option referred to above has not been        exercised of the share capital of Galp Energia; |
| • |   | we achieved a rapid recovery        in our production levels in Libya which we were forced to        shut down most of our production facilities due to a        situation of political and social unrest and internal        conflict from February through September 2011. By the end        of the year we have restarted the majority of our        facilities and reopened the GreenStream export gas        pipeline to Italy leveraging on the strong commitment of        our global organization and continuing supportive        relationship with the Interim Transitional National        Council of Libya and the National Oil Company. Production        at Eni’s Libyan assets is currently flowing at        approximately 240 KBOE/d. Eni is targeting to achieve the        pre-crisis production plateau of 280 KBOE/d and full        ramp-up by the second half of 2012. We estimated that we        incurred a production loss of 200 KBOE/d in 2011 as a        result of the disruption in our Libyan activities during        the Revolution;                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |
| • |   | in February 2012, Eni        divested a 16.41% interest in Interconnector (UK) Ltd, a        51% interest in Interconnector Zeebrugge Terminal SCRL        and a 10% interest in Huberator SA to Snam and Fluxys G.        The three companies manage the underwater gas pipeline        linking the United Kingdom (Bacton) and Belgium        (Zeebrugge), the Zeebrugge compression station near the        Interconnector and the Zeebrugge hub trading platform,        respectively. The total amount of the transaction is        approximately euro 150 million and its finalization is        subject to satisfaction of certain conditions. The        closing of the transaction is expected by the second half        of 2012;                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |
| • |   | in January 2012, Eni        completed the acquisition of Nuon Belgium NV and Nuon        Power Generation Wallon NV that supply gas and        electricity to the industrial and residential segments in        Belgium for a cash consideration amounting to euro 214        million;                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |
| • |   | in December 2011, the        Republic of Kazakhstan (RoK) and the contracting        companies in the Karachaganak gas-condensate field in        north-west Kazakhstan reached an agreement to settle all        pending claims relating to the recovery of costs incurred        to develop the field, as well as a number of minor tax        disputes. The agreement will support the further        development of the field. The agreement, effective from        June 30, 2012 on satisfaction of conditions precedent,        involves Kazakhstan’s KazMunaiGas (KMG) acquiring a        10% interest in the project. This will be done by each of        the contracting companies transferring 10% of their        rights and interest in the Karachaganak Final Production        Sharing Agreement (FPSA) to KMG. The contracting        companies will receive $1 billion net cash consideration        ($325 million being Eni’s share). The effects of the        agreement on profit and loss and reserve and production        entitlements will be recognized in the 2012 financial        statements;                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |
| • |   | in 2011, Eni finalized the        divestment of its interests in importing pipelines of        natural gas from Northern Europe (TENP and Transitgas)        and Russia (TAG). The divestments have been agreed upon        with the European                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |

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|   |   | Commission as remedial        actions to settle an antitrust proceeding in the European        gas sector. Total consideration amounted to approximately        euro 1.5 billion. Eni ship-or-pay contracts will be        unaffected; and                                                                                                                                                                                          |
|--------|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| • |   | in June 2011, through its        subsidiary Polimeri Europa, Eni signed a cooperation        agreement with Novamont SpA to convert Eni’s Porto        Torres chemical plant into an innovative bio-based        chemical complex to produce bio-plastics and other        bio-based petrochemical products (bio-lubricants and        bio-additives) for which significant growth is expected        in the medium-long term. |

 

| In addition, in 2011 Eni closed the        following transactions: |
|--------------------------------------------------------------------|

| • |   | in December 2011, Eni and        its partner Repsol (50%-50%) signed a Gas Sales Agreement        with the Venezuelan state-owned oil company (PDVSA) which        paves the way to the development of the Perla gas        discovery off the Venezuelan coast. We regard this as a        material development to our business due to the        importance of the field reserves. The development plan        provides for three phases, targeting production of 1.2        mmCF/d at peak. The investment plan for the first        development phase is estimated at $1.4 billion (gross).        The national oil company PDVSA is entitled to acquire a        35% interest in the development project by proportionally        diluting the interest of each of the international        partners; |
|--------|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| • |   | in December 2011, Eni and        the Angolan authorities signed a Production Sharing        Contract for the exploration of Block 35;                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |
| • |   | in November 2011, Eni was        awarded two operated gas exploration contracts: (i) the        Arguni I block (Eni’s interest 100%) located onshore        and offshore in the Bintuni Basin near a liquefaction        facility; and (ii) the North Ganal Block, located        offshore Indonesia near the relevant Jangkrik discovery        and the Bontang liquefaction terminal, in a consortium        with other international oil companies;                                                                                                                                                                                                                                                                                                                                               |
| • |   | in November 2011, Eni        acquired a 32.5% stake in the Evans Shoal gas discovery        in the Timor Sea;                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |
| • |   | new exploration successes        were achieved in the year with the discoveries of        Jangkrik North East (Eni operator with a 55% interest) in        Indonesia and Skrugard/Havis (Eni’s interest 30%) in        the Barents Sea;                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |
| • |   | in September 2011, Eni and        Gazprom signed a gas sale agreement regarding the gas        produced by the joint venture Severenergia (Eni 29.4%)        through the development of the Samburgskoye field. The        agreement secured a final investment decision for the        field development. Start-up is expected in 2012. In        addition, the final investment decision of the        Urengoskoye field was sanctioned;                                                                                                                                                                                                                                                                                                                                                                |
| • |   | in April 2011, Eni signed a        cooperation agreement with Sonatrach to explore for and        develop unconventional hydrocarbons, particularly shale        gas plays;                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |
| • |   | in April 2011, an agreement        was signed with Cadogan Petroleum plc for the acquisition        of an interest in two exploration and development        licenses located in the Dniepr-Donetz Basin, in Ukraine;                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |
| • |   | in January 2011, Eni signed        a Memorandum of Understanding with CNPC/Petrochina to        pursue joint initiatives targeting development of both        conventional and unconventional resources in China and        outside China.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |

In 2011, capital expenditures amounted to euro 13,438 million,of which 89% related to Exploration & Production, Gas &Power and Refining & Marketing businesses, and primarilyrelated to: (i) the development of oil and gas reserves (euro7,357 million) deployed mainly in Norway, Kazakhstan, Algeria,the United States, Congo and Egypt, and exploration projects(euro 1,210 million) carried out mainly in Australia, Angola,Mozambique, Indonesia, Ghana, Egypt, Nigeria and Norway; (ii) thedevelopment and upgrading of Eni’s natural gas transport anddistribution network in Italy (euro 898 million and euro 337million, respectively) as well as development and increase ofstorage capacity (euro 294 million); (iv) projects aimed atimproving the conversion capacity and flexibility of refineries,and at building and upgrading service stations in Italy andoutside Italy (totaling euro 629 million); and (v) the upgradingof the fleet used in the Engineering & Construction segment(euro 1,090 million). There were no significant acquisitions inthe year.

In 2010, capital expenditures amounted to euro 13,870 million,of which 87% related to Exploration & Production, Gas &Power and Refining & Marketing businesses, and primarilyrelated to: (i) the development of oil and gas reserves (euro8,578 million) deployed mainly in Egypt, Kazakhstan, Congo, theUnited States and Algeria, and exploration projects (euro 1,012million) carried out mainly in Angola, Nigeria, the UnitedStates, Indonesia and Norway; (ii) the development and upgradingof Eni’s natural gas transport and distribution network inItaly (euro 842 million and euro 328 million, respectively) aswell as development and increase of storage capacity (euro 250million); (iv) projects aimed at improving the conversioncapacity and flexibility of refineries, and at building andupgrading service stations in Italy and outside Italy (totalingeuro 692 million); and (v) the upgrading of the fleet used in theEngineering & Construction segment (euro 1,552 million).There were no significant acquisitions in the year.

In 2009, capital expenditures amounted to euro 13,695 million,of which 86% related to the Exploration & Production, Gas& Power and Refining & Marketing businesses, andprimarily related to: (i) the development of oil and gas reserves(euro 7,478 million) deployed mainly in Kazakhstan, the UnitedStates, Egypt, Congo, Italy and Angola, and exploration projects(euro 1,228 million) carried out mainly in the United States,Libya, Egypt, Norway and Angola; (ii) the acquisition of provedand unproved properties amounting to euro 697 million mainlyrelated to the acquisition of a 27.5% interest in assets with gasshale reserves from Quicksilver Resources Inc and extension ofthe duration of oil and gas properties in Egypt following theagreement signed in May 2009; (iii) the development and upgradingof Eni’s natural gas transport and distribution networks inItaly (euro 919 million and euro 278 million, respectively) aswell as the development and increase of the storage capacity(euro 282 million); (iv) projects aimed at

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improving the conversion capacity and flexibility ofrefineries, and at building and upgrading service stations inItaly and outside Italy (totaling euro 608 million); and (v) theupgrading of the fleet used in the Engineering & Constructionsegment (euro 1,630 million).

In 2009, Eni’s acquisitions amounted to euro 2.32 billionand mainly related to the completion of the acquisition ofDistrigas NV. Following the acquisition of the 57.243% majoritystake in the Belgian company Distrigas NV from French companySuez-Gaz de France, Eni made an unconditional mandatory publictakeover bid on the minorities of Distrigas (42.76% stake). OnMarch 19, 2009, the mandatory tender offer on the minorities ofDistrigas was finalized. Shareholders representing 41.61% of theshare capital of Distrigas, including the second largestshareholder, Publigaz SCRL with a 31.25% interest, tendered theirshares. The squeeze-out of the residual 1.14% of the sharecapital was finalized on May 4, 2009. After this, Distrigasshares have been delisted from Euronext Brussels. The total cashconsideration amounted to approximately euro 2.05 billion.

.

 

**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 41 countries, including Italy,Libya, Egypt, Norway, the UK, Angola, Congo, the United States,Kazakhstan, Russia, Algeria, Australia, Venezuela, Iraq andMozambique. In 2011, Eni average daily production amounted to1,523 KBOE/d on an available for-sale basis. As of December 31,2011, Eni’s total proved reserves amounted to 7,086 mmBOE;proved reserves of subsidiaries totaled 5,940 mmBOE; Eni’sshare of reserves of equity-accounted entities stood to 1,146mmBOE.

Eni’s strategy in its Exploration & Productionoperations is to pursue profitable production growth leveragingon strengthening its leadership in core areas, increasing thevolume of operated production and retaining a stable portfolio oflong-term plateau fields. We plan to achieve a compound averagegrowth rate in our production of over 3% in the next 2012-2015four-year period, targeting a production plateau of 2.03 mmBOE/din 2015. The growth rate has been calculated excluding the impactof disruptions in Libya on the 2011 baseline production. Thesetargets are based on our long-term Brent price assumption of 85$/BBL. The production outlook for 2012 is based on a progressiverecovery in the Company’s Libyan output to achieve thepre-crisis level, coming fully online by the second half of 2012.For further information on this issue as well as certain othertrading environment assumptions including an indication ofEni’s production volume sensitivity to oil prices see"Item 5 – Management’s Expectations ofOperations" and "Item 3 – Risk Factors".

Management plans to achieve the target production plateau in2015 by continuing development activities and new projectstart-ups in the main countries of operations including Nigeria,Angola, Norway, Venezuela, the Yamal Peninsula in Russia andKazakhstan, leveraging Eni’s vast knowledge of reservoirsand geological basins, as well as technical and producingsynergies. Over the next four years, we estimate that the mainprojects due to come onstream will add 700 KBOE/d of production,80% of which will come from large projects characterized by asteady and long-lasting production plateau.

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. We plan to invest approximately euro 37.6 billion inour development activities over the next four years. An importantpart of these expenditures will be allocated to certaindevelopment projects which will support the Company’slong-term production plateau, particularly we plan to startdeveloping the recent gas discovery offshore Mozambique and toprogress large and complex projects in the Barents Sea, Nigeriaand Indonesia. We are also planning to maintain a prevailingshare of projects regulated by production sharing agreement inour portfolio; this will shorten the cost recovery in anenvironment of high crude oil prices.

Approximately euro 1.7 billion will be spent to buildtransportation infrastructures and LNG projects throughequity-accounted entities.

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 Mozambique, the United States, Egypt, Nigeria,Angola, Norway and Indonesia; important resources will bededicated to explore new areas in Sub-Saharan Africa (theRepublic of Liberia, Ghana) and on unconventional plays.Management plans to achieve a balance between explorationprojects in conventional fields vs. projects in high risk/highreward basins.

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Management intends to implement a number of initiatives tosupport profitability in its upstream operations by exercisingtight cost control and reducing the time span which is necessaryto develop and market reserves. We expect that costs to developand operate fields will increase in the next years due tosector-specific inflation, and growing complexity of newprojects. We plan to counteract those cost increases byleveraging on cost efficiencies associated with: (i) increasingthe scale of our operations as we concentrate our resources onlarger fields than in the past where we plan to achieve economiesof scale; (ii) expanding projects where we serve as operator. Webelieve operatorship will enable the Company to exercise bettercost control, effectively manage reservoir and productionoperations, and deploy our safety standards and procedures tominimize risks; and (iii) applying our technologies which webelieve can reduce drilling and completion costs.

Eni will pursue further growth options by developingunconventional plays, gas-to-LNG projects and integrated gasprojects. Eni’s growth plans will be supported by itsongoing commitment in establishing and consolidating itspartnerships with key host Countries, leveraging the Enico-operation model.

Finally, we intend to optimize our portfolio of developmentproperties by focusing on areas where our presence is wellestablished, and divesting non-strategic or marginal assets.

For the year 2012, management plans to spend euro 9.6 billionin 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.

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 initial 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 Production SharingAgreements (PSAs) are calculated so that the sale of productionentitlements should cover expenses incurred by the Group todevelop a field (Cost Oil) and on the Profit Oil setcontractually (Profit Oil). A similar scheme applies to buy-backand service contracts.

 

> 
***Reserves Governance***

Eni retains rigorous control over the process of bookingproved reserves, through a centralized model of reservegovernance. The Reserves Department of the Exploration &Production segment 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 

----

| (1) |  i | See        "Item 19 – Exhibits" in the Annual Report        on Form 20-F 2009. |
|-----|---------|-----------------------------------------------------------------------------------------------|

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practices in the industry whenever SEC rules may be lessprecise. When participating in exploration and productionactivities operated by others entities, Eni estimates its shareof proved reserves on the 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 ofestimating and classifying gross reserves including assessingproduction profiles, capital expenditures, 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 Reserve Department attended the"Politecnico di Torino" and received a Master ofScience degree in Mining Engineering in 1985. She has more than20 years of experience in the oil and gas industry and more than10 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 rules of conduct. ReservesEvaluators qualifications comply with international standardsestablished by the Society 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 reserve audit is included in the third partyaudit report3. In the preparation of their reports,independent evaluators rely, without independent verification,upon information furnished by Eni 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 to third partyevaluators. In 2011 Ryder Scott Company and DeGolyer andMacNaughton provided an independent evaluation of 32% ofEni’s total proved reserves at December 31, 20114,confirming, as in previous years, the reasonableness of Eniinternal evaluation5.

In the 2009-2011 three year period, 85% of Eni total provedreserves were subject to an independent evaluation. As atDecember 31, 2011, the principal Eni property not subjected toindependent evaluation in the last three years was Kashagan(Kazakhstan).

 

 

----

| (2) | i       | From 1991 to        2002, DeGolyer and MacNaughton; from 2003, also Ryder        Scott.  |
|-----|---------|------------------------------------------------------------------------------------------|
| (3) |  i | See        "Item 19 – Exhibits".                                          |
| (4) |  i | Includes        Eni’s share of proved reserves of equity-accounted        entities. |
| (5) |  i | See        "Item 19 – Exhibits".                                          |

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> 
***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, 2011,2010 and 2009. Net proved reserves are set out in more detailunder the heading "Supplementary oil and gasinformation" on page F-115.

| **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, 2009** |   | **703** |   | **590** |   | **1,922** |   | **1,141** |   | **1,221** |   | **236** |   | **263** |   | **133** |   | **6,209** |
| Developed                           |   | 490     |   | 432     |   | 1,266     |   | 799       |   | 614       |   | 139     |   | 168     |   | 122     |   | 4,030     |
| Undeveloped                         |   | 213     |   | 158     |   | 656       |   | 342       |   | 607       |   | 97      |   | 95      |   | 11      |   | 2,179     |
| **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     |
|                                |   |         |   |         |   |           |   |           |   |           |   |         |   |         |   |         |   |           |
| **Equity-accounted entities**       |   |    |   |    |   |      |   |      |   |      |   |    |   |    |   |    |   |      |
| **Year        ended Dec. 31, 2009** |   |    |   |    |   | **15**    |   | **22**    |   |      |   | **309** |   | **16**  |   |    |   | **362**   |
| Developed                           |   |    |   |    |   | 12        |   | 5         |   |      |   | 44      |   | 13      |   |    |   | 74        |
| Undeveloped                         |   |    |   |    |   | 3         |   | 17        |   |      |   | 265     |   | 3       |   |    |   | 288       |
| **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     |
|                                |   |         |   |         |   |           |   |           |   |           |   |         |   |         |   |         |   |           |
| **Consolidated subsidiaries**       |   |    |   |    |   |      |   |      |   |      |   |    |   |    |   |    |   |      |
| **and equity-accounted entities**   |   |    |   |    |   |      |   |      |   |      |   |    |   |    |   |    |   |      |
| **Year        ended Dec. 31, 2009** |   | **703** |   | **590** |   | **1,937** |   | **1,163** |   | **1,221** |   | **545** |   | **279** |   | **133** |   | **6,571** |
| Developed                           |   | 490     |   | 432     |   | 1,278     |   | 804       |   | 614       |   | 183     |   | 181     |   | 122     |   | 4,104     |
| Undeveloped                         |   | 213     |   | 158     |   | 659       |   | 359       |   | 607       |   | 362     |   | 98      |   | 11      |   | 2,467     |
| **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     |
|                                |   |         |   |         |   |           |   |           |   |           |   |         |   |         |   |         |   |           |

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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, 2009** |   | **233** |   | **351** |   | **895** |   | **770** |   | **849** |   | **94**  |   | **153** |   | **32** |   | **3,377** |
| Developed                           |   | 141     |   | 218     |   | 659     |   | 544     |   | 291     |   | 45      |   | 80      |   | 23     |   | 2,001     |
| Undeveloped                         |   | 92      |   | 133     |   | 236     |   | 226     |   | 558     |   | 49      |   | 73      |   | 9      |   | 1,376     |
| **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     |
|                                |   |         |   |         |   |         |   |         |   |         |   |         |   |         |   |        |   |           |
| **Equity-accounted entities**       |   |    |   |    |   |    |   |    |   |    |   |    |   |    |   |   |   |      |
| **Year        ended Dec. 31, 2009** |   |    |   |    |   | **13**  |   | **7**   |   |    |   | **50**  |   | **16**  |   |   |   | **86**    |
| Developed                           |   |    |   |    |   | 10      |   | 4       |   |    |   | 7       |   | 13      |   |   |   | 34        |
| Undeveloped                         |   |    |   |    |   | 3       |   | 3       |   |    |   | 43      |   | 3       |   |   |   | 52        |
| **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       |
|                                |   |         |   |         |   |         |   |         |   |         |   |         |   |         |   |        |   |           |
| **Consolidated subsidiaries**       |   |    |   |    |   |    |   |    |   |    |   |    |   |    |   |   |   |      |
| **and equity-accounted entities**   |   |    |   |    |   |    |   |    |   |    |   |    |   |    |   |   |   |      |
| **Year        ended Dec. 31, 2009** |   | **233** |   | **351** |   | **908** |   | **777** |   | **849** |   | **144** |   | **169** |   | **32** |   | **3,463** |
| Developed                           |   | 141     |   | 218     |   | 669     |   | 548     |   | 291     |   | 52      |   | 93      |   | 23     |   | 2,035     |
| Undeveloped                         |   | 92      |   | 133     |   | 239     |   | 229     |   | 558     |   | 92      |   | 76      |   | 9      |   | 1,428     |
| **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     |
|                                |   |         |   |         |   |         |   |         |   |         |   |         |   |         |   |        |   |           |

 

 

 

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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, 2009** |   | **2,704** |   | **1,380** |   | **5,894** |   | **2,127** |   | **2,139** |   | **814**   |   | **629**   |   | **575** |   | **16,262** |
| Developed                           |   | 2,001     |   | 1,231     |   | 3,486     |   | 1,463     |   | 1,859     |   | 539       |   | 506       |   | 565     |   | 11,650     |
| Undeveloped                         |   | 703       |   | 149       |   | 2,408     |   | 664       |   | 280       |   | 275       |   | 123       |   | 10      |   | 4,612      |
| **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      |
|                                |   |           |   |           |   |           |   |           |   |           |   |           |   |           |   |         |   |            |
| **Equity-accounted entities**       |   |      |   |      |   |      |   |      |   |      |   |      |   |      |   |    |   |       |
| **Year        ended Dec. 31, 2009** |   |      |   |      |   | **14**    |   | **85**    |   |      |   | **1,487** |   | **2**     |   |    |   | **1,588**  |
| Developed                           |   |      |   |      |   | 12        |   | 5         |   |      |   | 217       |   |      |   |    |   | 234        |
| Undeveloped                         |   |      |   |      |   | 2         |   | 80        |   |      |   | 1,270     |   | 2         |   |    |   | 1,354      |
| **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      |
|                                |   |           |   |           |   |           |   |           |   |           |   |           |   |           |   |         |   |            |
| **Consolidated subsidiaries**       |   |      |   |      |   |      |   |      |   |      |   |      |   |      |   |    |   |       |
| **and equity-accounted entities**   |   |      |   |      |   |      |   |      |   |      |   |      |   |      |   |    |   |       |
| **Year        ended Dec. 31, 2009** |   | **2,704** |   | **1,380** |   | **5,908** |   | **2,212** |   | **2,139** |   | **2,301** |   | **631**   |   | **575** |   | **17,850** |
| Developed                           |   | 2,001     |   | 1,231     |   | 3,498     |   | 1,468     |   | 1,859     |   | 756       |   | 506       |   | 565     |   | 11,884     |
| Undeveloped                         |   | 703       |   | 149       |   | 2,410     |   | 744       |   | 280       |   | 1,545     |   | 125       |   | 10      |   | 5,966      |
| **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      |
|                                |   |           |   |           |   |           |   |           |   |           |   |           |   |           |   |         |   |            |

Volumes of oil and natural gas applicable to long-term supplyagreements with foreign governments in mineral assets where Eniis operator totaled 647 mmBOE as of December 31, 2011 (683 and674 mmBOE as of December 31, 2010 and 2009, respectively). Saidvolumes are not included in reserves volumes shown in the tableherein.

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

|   | **2009** |   | **2010** |   | **2011** |   | **2009** |   | **2010** |   | **2011** |
|--------|----------|--------|----------|--------|----------|--------|----------|--------|----------|--------|----------|
|   |          |   |          |   |          |   |          |   |          |   |          |

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

| Additions to proved reserves                               |   | 605    |   |   | 776    |   |   | 183    |   |   | (296   | )      |   | 158    |   |   | 644    |   |
|------------------------------------------------------------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|
| *of        which purchases and sales of reserves-in-place* |   | *25*   |   |   | *(12*  | *)*    |   | *(7*   | *)*    |   | *(314* | *)*    |   |   |   |   |   |   |
| Production for the year                                    |   | (638   | )      |   | (653   | )      |   | (568   | )      |   | (8     | )      |   | (9     | )      |   | (9     | )      |
|                                                       |   |        |        |   |        |        |   |        |        |   |        |        |   |        |        |   |        |        |
|                                                       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |

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

|   | **2009** |   | **2010** |   | **2011** |
|--------|----------|--------|----------|--------|----------|
|   |          |   |          |   |          |

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

| Proved reserves replacement ratio of        subsidiaries and equity-accounted entities |   | 96 |   | 125 |   | 142 |
|----------------------------------------------------------------------------------------|--------|----|--------|-----|--------|-----|
|                                                                                   |   |    |   |     |   |     |

Eni’s proved reserves as of December 31, 2011 totaled7,086 mmBOE (liquids 3,434 mmBBL; natural gas 20,282 BCF)representing an increase of 243 mmBOE, or 3.6%, from December 31,2010. All sources additions to proved reserves booked in 2011were 820 mmBOE, of which 176 mmBOE came from Eni’ssubsidiaries and 644 mmBOE from Eni’s share ofequity-accounted entities.

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The effect of higher oil prices on reserves entitlements incertain PSAs and service contracts was estimated to be a 97 mmBOE(the Brent prices used in the reserves estimation process was$111 per barrel in 2011 compared to $79 per barrel in 2010).Higher oil prices also resulted in upward revisions associatedwith improved economics of marginal productions.

The current SEC rules allow for use of technologies, toestimate proved reserves if such technologies produce consistentand repeatable results. No material quantities were booked undercurrent rules incremental to quantities allowable under formerSEC rules as a result of the expanded range of technologies thatmay be used in the estimation. The methods (or technologies) usedin the proved reserves assessment depend on stage of development,quality and completeness of data, and production historyavailability. The methods include volumetric estimates,analogies, reservoir modeling, decline curve analysis or acombination of such methods. The data considered for theseanalyses are obtained from a combination of reliable technologiesthat include well or field measurements (i.e. logs, core samples,pressure information, fluid samples, production test data andperformance data) and indirect measurements (i.e. seismic data). 

The reserves replacement ratio for Eni’s subsidiaries andequity-accounted entities was 142% in 2011 (125% in 2010 and 96%in 2009). The reserves replacement ratio was calculated bydividing additions to proved reserves by total production, eachas derived from the tables of changes in proved reserves preparedin accordance with FASB Extractive Activities - Oil & Gas(Topic 932) (see the supplemental oil and gas information in“Item 18 – Consolidated Financial Statements”).The reserves replacement ratio is a measure used by management toassess the extent to which produced reserves in the year arereplaced by booked reserves additions. Management considers thereserve replacement ratio to be an important indicator of theCompany’s ability to sustain its growth perspectives.However, this ratio measures past performances and is not anindicator of future production because the ultimate recovery ofreserves is subject to a number of risks and uncertainties. Theseinclude the risks associated with the successful completion oflarge-scale projects, including addressing ongoing regulatoryissues and completion of infrastructures, as well as changes inoil and gas prices, political risks and geological andenvironmental risks. Specifically, in recent years Eni’sreserves replacement ratio has been affected by the impact ofhigher oil prices on reserves entitlements in the Company’sProduction Sharing Agreements and similar contractual schemes. Inaccordance with such contracts, Eni is entitled to a portion offield reserves, the sale of which should cover expendituresincurred by the Company to develop and operate the field. Thehigher the reference prices for Brent crude oil used to determineyear-end amounts of Eni’s proved reserves, the lower thenumber of barrels necessary to cover the same amount ofexpenditures. In 2011, this trend resulted in a lower amount ofbooked reserves associated with the Company’s PSAs as theaverage oil price used in reserve computation was higher than theprevious year. See “Item 3 – Risks associated withexploration and production of oil and natural gas andUncertainties in Estimates of Oil and Natural Gas Reserves”.

The average reserves life index of Eni’s proved reserveswas 12.3 years as of December 31, 2011 which included reserves ofboth subsidiaries and equity-accounted entities.

 

> 
***Eni’s subsidiaries***

Eni’s subsidiaries added 176 mmBOE of proved oil and gasreserves in 2011. This comprised 21 mmBBL of liquids and 863 BCFof natural gas. Additions to proved reserves derived from: (i)extensions, discoveries and others were 71 mmBOE, with majorincreases booked in the United States, Norway, Angola andNigeria; (ii) revisions of previous estimates were 106 mmBOEmainly reported in Norway, Italy, Egypt, Kazakhstan and Iraq;(iii) improved recovery were 6 mmBOE mainly reported in Norwayand Algeria; (iv) sales of mineral-in-place were 9 mmBOE andresulted from the divestment of assets in Nigeria and the UnitedKingdom; and (v) acquisitions were approximately 2 mmBOE andrelated to an additional interest in the Annamaria field inItaly.

 

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

Eni reported an increase of 644 mmBOE in its share ofequity-accounted entities’ proved oil and gas reserves in2011. This comprised 99 mmBBL of liquids and 3,028 BCF of naturalgas. Additions to proved reserves derived from: (i) extensions,discoveries and other factors were 520 mmBOE, with majorincreases booked in Russia and Venezuela; (ii) revisions ofprevious estimates were 123 mmBOE mainly reported in Russia andAngola; and (iii) improved recovery were 1 mmBOE.

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> 
***Proved undeveloped reserves***

Proved undeveloped reserves as of December 31, 2011 totaled3,316 mmBOE. At year end, proved undeveloped reserves of liquidsamounted to 1,539 mmBBL, mainly concentrated in Africa andKazakhstan. Proved undeveloped reserves of natural gas amountedto 9,866 BCF, mainly located in Africa, Russia and Venezuela.Proved undeveloped reserves of consolidated subsidiaries amountedto 1,284 mmBBL of liquids and 5,219 BCF of natural gas.

In 2011, total proved undeveloped reserves increased by 495mmBOE due to new projects sanction and upwards and downwardsrevisions mainly related to contractual and technical revisions,price effect and portfolio operations. Approximately 500 mmBOEwere due to new projects sanctions mainly in Russia, Venezuelaand the United States.

During 2011, Eni converted 193 mmBOE of proved undevelopedreserves to proved developed reserves due to developmentactivities, production start-up and revisions. The mainreclassification to proved developed reserves mainly related tothe following fields/projects: Nikaitchuq (the United States);MLE (Algeria); Denise, Belayim and Taurt (Egypt); M’Boundi(Congo); Zamzama (Pakistan); Kitan (Australia); Karachaganak(Kazakhstan); and Tyrihans (Norway).

In 2011, capital expenditures amounted to approximately euro1.9 billion and were made to progress the development of provedundeveloped reserves.

Reserves that remain proved undeveloped for five or more yearsare a result of several physical factors that affect the timingof the projects development and execution, such as the complexnature of the development project in adverse and remotelocations, physical limitations of infrastructures or plantcapacity and contractual limitations that establish productionlevels.

The Company estimates that approximately 0.8 BBOE of provedundeveloped reserves have remained undeveloped for five years ormore with respect to the balance sheet date, mainly related to:(i) the Kashagan project in Kazakhstan (0.4 BBOE) with areduction of 120 mmBOE compared to 2010. Development activitiesare progressing and production start-up is targeted by the end of2012 or in the early 2013. Such PUD reserves will be producedwithin the limits of the oil processing capacity that is plannedto be available at end of Phase 1. For more details regardingthis project please refer to part 1, Item 4, page 52, where theproject is disclosed. See also our discussion under the"Risk Factors" section about risks associated with oiland gas development projects on page 9; (ii) some Libyan gasfields (0.27 BBOE) where development completion and productionstart-up are planned according to the delivery obligations setforth in a long-term gas supply agreement currently in force. Inorder to secure fulfillment of the contractual deliveryquantities, Eni will implement phased production start-up fromthe relevant fields, which are expected to be put in productionover the next several years; and (iii) other minor projects wheredevelopment activities are progressing.

 

> 
***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 341 mmBOE fromproducing assets located in Australia, Egypt, India, Indonesia,Libya, Nigeria, Norway, Pakistan, Tunisia and the United Kingdom.

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 and supplies from third parties based onexisting contracts. Production will account for approximately 69%of delivery commitments.

Eni has met all contractual delivery commitments as ofDecember 31, 2011.

 

> 
***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 of exploration or productioninterests or world supply and prices for oil and natural gas, orchanges in the underlying*

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*economics 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 2011, oil and natural gas production available for saleaveraged 1,523 KBOE/d, down by 13.3% from 2010. This reductionwas driven by decreased flow from Eni activities in Libya, whichwas affected by the shut down of almost all the Company’splants and facilities including the GreenStream pipelinethroughout the peak of the country’s internal crisis(approximately 8 months). In the last part of the year theefforts made to restart the GreenStream pipeline and recoverproduction enabled the Company to bring back online someproduction, partly offsetting the impact of disruptions (downapproximately 200 KBOE/d). Our Libyan production for the yearaveraged 108 KBOE/d. See also our discussion under the "RiskFactors" section about "Political Considerations –North Africa" on page 11. Performance was also negativelyimpacted by lower entitlements in the Company’s PSAs due tohigher oil prices with an overall effect of approximately 30KBOE/d compared to the previous year. Net of these effects,production for 2011 was in line with 2010. Ramp-ups and start-upswere offset by lower-than-anticipated growth in Iraq and plannedfacility downtime.

Liquids production (845 KBBL/d) decreased by 152 KBBL/d, or15.2% due to production losses in Libya and lower entitlements inthe Company’s PSAs as well as lower performance in Angola,Nigeria and the United Kingdom. These negatives were partlyoffset by start-ups/ramp-ups in: (i) Norway with higherproduction of the Morvin (Eni’s interest 30%) and Tyrihans(Eni’s interest 6.23%) fields; (ii) Italy, due to start-upof the Guendalina (Eni’s interest 80%) and Capparuccia(Eni’s interest 95%) fields; and (iii) Australia, due tostart-up of the Kitan (Eni operator with a 40% interest) field.

Natural gas production (3,763 mmCF/d) decreased by 459 mmCF/d(down 10.9%) due to production losses in Libya and lowerperformance in the United States. Organic growth was achieved in:(i) Congo and Norway due to better performance; and (ii) Egypt,due to start-up of Denise B (Eni’s interest 50%) field andbetter performance of Tuna (Eni operator with a 50% interest)field.

Oil and gas production sold amounted to 548.5 mmBOE. The 28.5mmBOE difference over production (577 mmBOE) reflected mainlyvolumes of natural gas consumed in operations (21.1 mmBOE).

Approximately 63% of liquids production sold (302.6 mmBBL) wasdestined to Eni’s Refining & Marketing segment (of which26% was processed in Eni’s refineries); about 31% of naturalgas production sold (1,367 BCF) was destined to Eni’s Gas& Power segment.

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**

|   |   | **2009** |   | **2010** |   | **2011** |
|--------|--------|----------|--------|----------|--------|----------|
|   |   |          |   |          |   |          |

| (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                        |   | 56      |   |   |   | 61      |   |   |   | 64      |   |   |
|------------------------------|--------|---------|--------|--------|--------|---------|--------|--------|--------|---------|--------|--------|
| Rest of        Europe        |   | 133     |   |   |   | 121     |   |   |   | 120     |   |   |
| North Africa                 |   | 287     |   | 5      |   | 297     |   | 4      |   | 204     |   | 5      |
| Sub-Saharan        Africa    |   | 309     |   | 3      |   | 318     |   | 3      |   | 275     |   | 3      |
| Kazakhstan                   |   | 70      |   |   |   | 65      |   |   |   | 64      |   |   |
| Rest of        Asia          |   | 56      |   | 1      |   | 47      |   | 1      |   | 33      |   | 1      |
| Americas                     |   | 71      |   | 8      |   | 60      |   | 11     |   | 55      |   | 10     |
| Australia        and Oceania |   | 8       |   |   |   | 9       |   |   |   | 11      |   |   |
|                         |   | **990** |   | **17** |   | **978** |   | **19** |   | **826** |   | **19** |
|                         |   |         |   |        |   |         |   |        |   |         |   |        |

 

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

|   |   | **2009** |   | **2010** |   | **2011** |
|--------|--------|----------|--------|----------|--------|----------|
|   |   |          |   |          |   |          |

| (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                        |   | 630       |   |   |   | 648       |   |   |   | 648       |   |   |
|------------------------------|--------|-----------|--------|--------|--------|-----------|--------|--------|--------|-----------|--------|--------|
| Rest of        Europe        |   | 608       |   |   |   | 517       |   |   |   | 498       |   |   |
| North Africa                 |   | 1,500     |   | 3      |   | 1,556     |   | 3      |   | 1,165     |   | 4      |
| Sub-Saharan        Africa    |   | 213       |   |   |   | 365       |   |   |   | 422       |   |   |
| Kazakhstan                   |   | 241       |   |   |   | 221       |   |   |   | 212       |   |   |
| Rest of        Asia          |   | 391       |   | 26     |   | 412       |   | 24     |   | 378       |   | 20     |
| Americas                     |   | 416       |   |   |   | 385       |   |   |   | 323       |   |   |
| Australia        and Oceania |   | 46        |   |   |   | 91        |   |   |   | 93        |   |   |
|                         |   | **4,045** |   | **29** |   | **4,195** |   | **27** |   | **3,739** |   | **24** |
|                         |   |           |   |        |   |           |   |        |   |           |   |        |

----

| (1) |   | It excludes        production volumes of natural gas consumed in operations.        Said volumes were 321, 318 and 300 mmCF/d in 2011, 2010        and 2009, 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 28 KBOE/d, 105KBOE/d and 97 KBOE/d in 2011, 2010 and 2009, 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** |
|--------|--------|-----------|--------|--------------------|--------|------------------|--------|------------------------|--------|----------------|--------|------------------|--------|-------------|--------|---------------------------|--------|-----------|
|   |   |           |   |                    |   |                  |   |                        |   |                |   |                  |   |             |   |                           |   |           |

| **2009**                                |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |       |
|-----------------------------------------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|------------|
| **Consolidated        subsidiaries**    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |       |
| Oil and condensate, per BBL             |   | 56.02  |   | 56.46  |   | 56.42  |   | 59.75  |   | 52.34  |   | 55.34  |   | 55.66  |   | 50.40  |   | **57.02**  |
| Natural        gas, per KCF             |   | 9.01   |   | 7.06   |   | 5.79   |   | 1.66   |   | 0.45   |   | 4.09   |   | 4.05   |   | 8.14   |   | **5.62**   |
| Average production cost, per BOE        |   | 9.69   |   | 8.28   |   | 3.99   |   | 13.19  |   | 5.20   |   | 3.44   |   | 7.39   |   | 9.56   |   | **7.41**   |
| **Equity-accounted        entities**    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |       |
| Oil and condensates, per BBL            |   |   |   |   |   | 14.60  |   | 56.85  |   |   |   | 9.01   |   | 56.41  |   |   |   | **44.43**  |
| Natural        gas, per KCF             |   |   |   |   |   |   |   |   |   |   |   | 7.44   |   |   |   |   |   | **6.81**   |
| Average production cost, per BOE        |   |   |   |   |   | 10.62  |   | 8.87   |   |   |   | 4.95   |   | 23.14  |   |   |   | **13.72**  |
| **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**  |
|                                    |   |        |   |        |   |        |   |        |   |        |   |        |   |        |   |        |   |            |

> 
 

***Development activities***

In 2011 a total of 407 development wells were drilled (186.1of which represented Eni’s share) as compared to 399development wells drilled in 2010 (178 of which representedEni’s share) and 418 development wells drilled in 2009(175.1 of which represented Eni’s share). The drilling of118 wells (39.5 of which represented Eni’s share) iscurrently underway.

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The table below summarizes the number of the Company’snet interest in productive and dry development wells completed ineach of the past three years and the status of the Company’sdevelopment wells in the process of being drilled as of December31, 2011. A dry well is one found to be incapable of producingeither oil or gas in sufficient quantities to justify completionas an oil or gas well.

**DEVELOPMENT WELL ACTIVITY**

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

|   |   | **2009** |   | **2010** |   | **2011** |   | **2011** |
|--------|--------|----------|--------|----------|--------|----------|--------|----------|
|   |   |          |   |          |   |          |   |          |

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

| Italy                                         |   | 18.3      |   |    |   | 23.9      |   | 1.0     |   | 25.3      |   |    |   | 3         |   | 2        |
|-----------------------------------------------|--------|-----------|--------|---------|--------|-----------|--------|---------|--------|-----------|--------|---------|--------|-----------|--------|----------|
| Rest of        Europe                         |   | 12.5      |   |    |   | 2.9       |   | 0.2     |   | 3.3       |   | 0.3     |   | 18        |   | 3.9      |
| North Africa                                  |   | 40.7      |   | 0.4     |   | 44.3      |   | 0.3     |   | 55.9      |   | 1.1     |   | 27        |   | 12.5     |
| Sub-Saharan        Africa                     |   | 35.8      |   | 1.9     |   | 28.0      |   | 2.5     |   | 28.2      |   | 1.0     |   | 28        |   | 6.6      |
| Kazakhstan                                    |   | 3.8       |   |    |   | 1.8       |   |    |   | 1.3       |   |    |   | 13        |   | 2.2      |
| Rest of        Asia                           |   | 38.6      |   | 4.3     |   | 41.7      |   | 1.8     |   | 39.2      |   | 2.5     |   | 12        |   | 5.4      |
| Americas                                      |   | 15.6      |   | 1.0     |   | 27.6      |   | 0.5     |   | 27.6      |   |    |   | 17        |   | 6.9      |
| Australia        and Oceania                  |   | 2.2       |   |    |   | 1.5       |   |    |   | 0.4       |   |    |   |      |   |     |
| **Total including equity-accounted entities** |   | **167.5** |   | **7.6** |   | **171.7** |   | **6.3** |   | **181.2** |   | **4.9** |   | **118.0** |   | **39.5** |
|                                          |   |           |   |         |   |           |   |         |   |           |   |         |   |           |   |          |

> 
***Exploration activities***

In 2011, a total of 56 new exploratory wells were drilled (28of which represented Eni’s share), which includes drilledexploratory wells that have been suspended pending furtherevaluation, as compared to 47 exploratory wells drilled in 2010(23.8 of which represented Eni’s share) and 69 exploratorywells drilled in 2009 (37.6 of which represented Eni’sshare).

The overall commercial success rate was 42% (38.6% net to Eni)as compared to 41% (39% net to Eni) and 41.9% (43.6% net to Eni)in 2010 and 2009, 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, 2011. 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) |
|--------|--------|-------------------------|--------|----------------------------------------------|
|   |   |                         |   |                                              |

|   |   | **2009** |   | **2010** |   | **2011** |   | **2011** |
|--------|--------|----------|--------|----------|--------|----------|--------|----------|
|   |   |          |   |          |   |          |   |          |

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

| Italy                                         |   |     |   | 1.0      |   |     |   | 0.5      |   |    |   |     |   | 6.0       |   | 4.4      |
|-----------------------------------------------|--------|----------|--------|----------|--------|----------|--------|----------|--------|---------|--------|----------|--------|-----------|--------|----------|
| Rest of        Europe                         |   | 4.1      |   | 0.2      |   | 1.7      |   | 1.1      |   | 0.3     |   | 0.7      |   | 21.0      |   | 6.5      |
| North Africa                                  |   | 4.8      |   | 3.8      |   | 9.3      |   | 8.1      |   | 6.2     |   | 3.4      |   | 21.0      |   | 15.7     |
| Sub-Saharan        Africa                     |   |     |   | 2.7      |   | 2.3      |   | 4.7      |   | 0.6     |   | 2.6      |   | 63.0      |   | 18.6     |
| Kazakhstan                                    |   |     |   |     |   |     |   |     |   |    |   |     |   | 13.0      |   | 2.3      |
| Rest of        Asia                           |   | 2.3      |   | 3.9      |   | 1.0      |   | 2.8      |   | 0.2     |   | 7.6      |   | 16.0      |   | 6.9      |
| Americas                                      |   | 1.0      |   | 3.8      |   |     |   | 6.3      |   | 2.5     |   |     |   | 11.0      |   | 3.3      |
| Australia        and Oceania                  |   | 0.8      |   | 1.4      |   | 1.0      |   | 0.4      |   |    |   | 1.4      |   |      |   |     |
| **Total including equity-accounted entities** |   | **13.0** |   | **16.8** |   | **15.3** |   | **23.9** |   | **9.8** |   | **15.7** |   | **151.0** |   | **57.7** |
|                                          |   |          |   |          |   |          |   |          |   |         |   |          |   |           |   |          |

----

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

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

As of December 31, 2011, Eni’s mineral right portfolioconsisted of 1,106 exclusive or shared rights for exploration anddevelopment in 41 Countries on five continents for a totalacreage of 254,421 square kilometers net to Eni, of whichdeveloped acreage of 41,373 square kilometers and undevelopedacreage of 213,048 square kilometers.

In 2011, changes in total net acreage mainly derived from: (i)new leases in Angola, Australia, Ghana, Indonesia, Nigeria,Norway and Ukraine for a total acreage of approximately 14,000square kilometers; (ii) the total relinquishment of leases inAustralia, China, Denmark, Indonesia, Italy, Libya, Pakistan,Nigeria, Saudi Arabia and 

40

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Yemen, covering an acreage of 72,000 square kilometers; and(iii) the decrease in net acreage due to partial relinquishmentor interest reduction in China, Congo, India and Mozambique for atotal acreage of approximately 9,000 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, 2011. A gross acreage is one in whichEni owns a working interest.

|   | **December 31, 2010** |   | **December        31, 2011** |
|--------|-----------------------|--------|------------------------------|
|   |                       |   |                              |

|   |   | **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**                    |   | **29,079**  |   | **286**   |   | **17,324**  |   | **24,007**  |   | **41,331**  |   | **11,216** |   | **14,807**  |   | **26,023**  |
|-------------------------------|--------|-------------|--------|-----------|--------|-------------|--------|-------------|--------|-------------|--------|------------|--------|-------------|--------|-------------|
| **Italy**                     |   | **19,097**  |   | **151**   |   | **10,927**  |   | **10,721**  |   | **21,648**  |   | **9,055**  |   | **7,817**   |   | **16,872**  |
| **Rest of Europe**            |   | **9,982**   |   | **135**   |   | **6,397**   |   | **13,286**  |   | **19,683**  |   | **2,161**  |   | **6,990**   |   | **9,151**   |
| Croatia                       |   | 987         |   | 2         |   | 1,975       |   |        |   | 1,975       |   | 987        |   |        |   | 987         |
| Norway                        |   | 2,418       |   | 50        |   | 2,262       |   | 5,838       |   | 8,100       |   | 337        |   | 1,998       |   | 2,335       |
| Poland                        |   | 1,968       |   | 3         |   |        |   | 1,968       |   | 1,968       |   |       |   | 1,968       |   | 1,968       |
| United Kingdom                |   | 1,151       |   | 74        |   | 2,110       |   | 789         |   | 2,899       |   | 807        |   | 207         |   | 1,014       |
| Ukraine                       |   |        |   | 2         |   | 50          |   | 49          |   | 99          |   | 30         |   | 15          |   | 45          |
| Other Countries               |   | 3,458       |   | 4         |   |        |   | 4,642       |   | 4,642       |   |       |   | 2,802       |   | 2,802       |
| **AFRICA**                    |   | **152,671** |   | **270**   |   | **67,154**  |   | **200,957** |   | **268,111** |   | **20,167** |   | **117,053** |   | **137,220** |
| **North Africa**              |   | **44,277**  |   | **112**   |   | **31,781**  |   | **36,772**  |   | **68,553**  |   | **13,877** |   | **16,655**  |   | **30,532**  |
| Algeria                       |   | 17,244      |   | 39        |   | 2,261       |   | 17,358      |   | 19,619      |   | 815        |   | 8,250       |   | 9,065       |
| Egypt                         |   | 6,594       |   | 52        |   | 5,109       |   | 10,727      |   | 15,836      |   | 1,837      |   | 4,061       |   | 5,898       |
| Libya                         |   | 18,165      |   | 10        |   | 17,947      |   | 8,687       |   | 26,634      |   | 8,951      |   | 4,344       |   | 13,295      |
| Tunisia                       |   | 2,274       |   | 11        |   | 6,464       |   |        |   | 6,464       |   | 2,274      |   |        |   | 2,274       |
| **Sub-Saharan        Africa** |   | **108,394** |   | **158**   |   | **35,373**  |   | **164,185** |   | **199,558** |   | **6,290**  |   | **100,398** |   | **106,688** |
| Angola                        |   | 4,520       |   | 68        |   | 4,636       |   | 20,360      |   | 24,996      |   | 625        |   | 5,593       |   | 6,218       |
| Congo                         |   | 6,074       |   | 26        |   | 1,835       |   | 7,681       |   | 9,516       |   | 1,012      |   | 4,008       |   | 5,020       |
| Democratic Republic of Congo  |   | 615         |   | 1         |   |        |   | 478         |   | 478         |   |       |   | 263         |   | 263         |
| Gabon                         |   | 7,615       |   | 6         |   |        |   | 7,615       |   | 7,615       |   |       |   | 7,615       |   | 7,615       |
| Ghana                         |   | 1,086       |   | 2         |   |        |   | 5,144       |   | 5,144       |   |       |   | 1,885       |   | 1,885       |
| Mali                          |   | 21,640      |   | 1         |   |        |   | 32,458      |   | 32,458      |   |       |   | 21,640      |   | 21,640      |
| Mozambique                    |   | 12,352      |   | 1         |   |        |   | 12,956      |   | 12,956      |   |       |   | 9,502       |   | 9,502       |
| Nigeria                       |   | 8,439       |   | 46        |   | 28,902      |   | 11,723      |   | 40,625      |   | 4,653      |   | 3,838       |   | 8,491       |
| Togo                          |   | 6,192       |   | 2         |   |        |   | 6,192       |   | 6,192       |   |       |   | 6,192       |   | 6,192       |
| Other        Countries        |   | 39,861      |   | 5         |   |        |   | 59,578      |   | 59,578      |   |       |   | 39,862      |   | 39,862      |
| **ASIA**                      |   | **112,745** |   | **74**    |   | **17,478**  |   | **100,759** |   | **118,237** |   | **5,893**  |   | **49,391**  |   | **55,284**  |
| **Kazakhstan**                |   | **880**     |   | **6**     |   | **324**     |   | **4,609**   |   | **4,933**   |   | **105**    |   | **775**     |   | **880**     |
| **Rest of Asia**              |   | **111,865** |   | **68**    |   | **17,154**  |   | **96,150**  |   | **113,304** |   | **5,788**  |   | **48,616**  |   | **54,404**  |
| China                         |   | 18,232      |   | 10        |   | 200         |   | 5,326       |   | 5,526       |   | 39         |   | 5,326       |   | 5,365       |
| India                         |   | 10,089      |   | 13        |   | 206         |   | 25,364      |   | 25,570      |   | 109        |   | 9,097       |   | 9,206       |
| Indonesia                     |   | 12,912      |   | 12        |   | 1,735       |   | 27,106      |   | 28,841      |   | 656        |   | 17,063      |   | 17,719      |
| Iran                          |   | 820         |   | 4         |   | 1,456       |   |        |   | 1,456       |   | 820        |   |        |   | 820         |
| Iraq                          |   | 640         |   | 1         |   | 1,074       |   |        |   | 1,074       |   | 352        |   |        |   | 352         |
| Pakistan                      |   | 11,347      |   | 18        |   | 8,781       |   | 14,172      |   | 22,953      |   | 2,582      |   | 6,707       |   | 9,289       |
| Russia                        |   | 1,507       |   | 4         |   | 3,502       |   | 1,495       |   | 4,997       |   | 1,030      |   | 439         |   | 1,469       |
| Saudi Arabia                  |   | 25,844      |   |      |   |        |   |        |   |        |   |       |   |        |   |        |
| Timor        Leste            |   | 6,470       |   | 4         |   |        |   | 8,087       |   | 8,087       |   |       |   | 6,740       |   | 6,740       |
| Turkmenistan                  |   | 200         |   | 1         |   | 200         |   |        |   | 200         |   | 200        |   |        |   | 200         |
| Yemen                         |   | 20,560      |   |      |   |        |   |        |   |        |   |       |   |        |   |        |
| Other Countries               |   | 3,244       |   | 1         |   |        |   | 14,600      |   | 14,600      |   |       |   | 3,244       |   | 3,244       |
| **AMERICA**                   |   | **11,187**  |   | **460**   |   | **5,979**   |   | **15,602**  |   | **21,581**  |   | **3,052**  |   | **7,157**   |   | **10,209**  |
| Brazil                        |   | 745         |   | 2         |   | 1,513       |   | 745         |   | 2,258       |   | 50         |   | 745         |   | 795         |
| Ecuador                       |   | 2,000       |   | 1         |   | 1,985       |   |        |   | 1,985       |   | 1,985      |   |        |   | 1,985       |
| Trinidad & Tobago         |   | 66          |   | 1         |   | 382         |   |        |   | 382         |   | 66         |   |        |   | 66          |
| United        States          |   | 5,896       |   | 442       |   | 1,721       |   | 7,261       |   | 8,982       |   | 853        |   | 4,270       |   | 5,123       |
| Venezuela                     |   | 1,154       |   | 6         |   | 378         |   | 2,049       |   | 2,427       |   | 98         |   | 816         |   | 914         |
| Other        Countries        |   | 1,326       |   | 8         |   |        |   | 5,547       |   | 5,547       |   |       |   | 1,326       |   | 1,326       |
| **AUSTRALIA AND OCEANIA**     |   | **15,279**  |   | **16**    |   | **1,980**   |   | **49,304**  |   | **51,284**  |   | **1,045**  |   | **24,640**  |   | **25,685**  |
| Australia                     |   | 15,241      |   | 15        |   | 1,980       |   | 48,540      |   | 50,520      |   | 1,045      |   | 24,602      |   | 25,647      |
| Other Countries               |   | 38          |   | 1         |   |        |   | 764         |   | 764         |   |       |   | 38          |   | 38          |
| **Total**                     |   | **320,961** |   | **1,106** |   | **109,915** |   | **390,629** |   | **500,544** |   | **41,373** |   | **213,048** |   | **254,421** |
|                          |   |             |   |           |   |             |   |             |   |             |   |            |   |             |   |             |

----

| (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, 2011 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 8,477 (3,136.1 of whichrepresent Eni’s share).

**Productive oil and gas wells at Dec. 31, 2011**(a)

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

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

| Italy                                         |   | 237.0       |   | 191.5       |   | 630.0       |   | 546.5       |
|-----------------------------------------------|--------|-------------|--------|-------------|--------|-------------|--------|-------------|
| Rest of        Europe                         |   | 414.0       |   | 63.3        |   | 207.0       |   | 93.1        |
| North Africa                                  |   | 1,357.0     |   | 651.8       |   | 144.0       |   | 56.0        |
| Sub-Saharan        Africa                     |   | 2,952.0     |   | 562.6       |   | 479.0       |   | 32.1        |
| Kazakhstan                                    |   | 89.0        |   | 28.9        |   |        |   |        |
| Rest of        Asia                           |   | 602.0       |   | 381.5       |   | 849.0       |   | 328.7       |
| Americas                                      |   | 152.0       |   | 79.8        |   | 344.0       |   | 113.2       |
| Australia        and Oceania                  |   | 7.0         |   | 3.8         |   | 14.0        |   | 3.3         |
| **Total including equity-accounted entities** |   | **5,810.0** |   | **1,963.2** |   | **2,667.0** |   | **1,172.9** |
|                                          |   |             |   |             |   |             |   |             |

----

| (a) |   | Multiple        completion wells included above: approximately 2,304        (741.7 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. In 2011,Eni’s oil and gas production amounted to 181 KBOE/d.Eni’s activities in Italy are deployed in the Adriatic Sea,the Central Southern Apennines, mainland and offshore Sicily andthe Po Valley. Eni’s exploration and development activitiesin Italy are regulated by concession contracts.

The Adriatic and Ionian Sea represents Eni’s mainproduction area in Italy, accounting for 46% of Eni’sdomestic production in 2011. Main operated fields are Barbara,Angela-Angelina, Porto Garibaldi, Cervia, Bonaccia, Luna and HeraLacinia (for an overall production of approximately 270 mmCF/d).

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| 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 24 production wells and is        treated by the Viggiano oil center with an oil capacity        of 104 KBBL/d. Oil produced is carried to Eni’s        refinery in Taranto via a 136-kilometer long pipeline.        Gas produced is treated at the Viggiano oil center and        then delivered to the national grid system. In 2011, the        Val d’Agri concession produced 95 KBOE/d (52 KBOE/d        net to Eni) representing 28% of Eni’s production in        Italy.
Eni is the operator of 14 production concessions        onshore and offshore in Sicily. Its main fields are Gela,        Ragusa, Giaurone, Fiumetto and Prezioso, which in 2011        accounted for 11% of Eni’s production in Italy.

In 2011, production started-up at the following        fields: (i) Guendalina (Eni’s interest 80%) flowing        at the initial rate of approximately 3 KBOE/d; and (ii)        Capparuccia (Eni’s interest 95%) with production        start-up at approximately 4 KBOE/d.

During the year Eni finalized the purchase of an        additional interest in the Annamaria field (Eni’s        interest 100%). |   |  |
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|--|

Development activities progressed at the Vald’Agri concession (Eni’s interest 60.77%) with thelinkage of Cerro Falcone to the oil treatment center andsidetrack activity as well as upgrading of production facilities.Other activities concerned; (i) sidetrack and workover activitieson Calpurnia, Daria (Eni’s interest 51%), Barbara, ClaraNord (Eni’s interest 51%) and Gela fields for the productionoptimization; (ii) integration and upgrading activities ofcompression 

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and hydrocarbon treatment facilities at the Crotone powerplant; and (iii) completion of development activities at theTresauro field (Eni’s interest 45%).

In the medium-term, management expects production in Italy tomaintain the actual level due to the production ramp-up of theVal d’Agri fields and ongoing new field projects andcontinuing production optimization activities.

> 
*Rest of Europe*

Eni’s operations in the Rest of Europe are conductedmainly in Croatia, Norway and the UK. In 2011, the Rest of Europeaccounted for 14% of Eni’s total worldwide production of oiland natural gas.

*Croatia.*Eni has been present in Croatia since 1996. In2011, Eni’s production of natural gas averaged 27 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.

*Norway.*Eni has been operating in Norway since 1964.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 128 KBOE/d in 2011.

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 any given number of years with possibleextensions.

Eni currently holds interests in 8 production areas in theNorwegian Sea. The principal producing fields are Asgaard(Eni’s interest 14.82%), Kristin (Eni’s interest8.25%), Heidrun (Eni’s interest 5.24%), Mikkel (Eni’sinterest 14.9%), Tyrihans (Eni’s interest 6.2%) and Morvin(Eni’s interest 30%) which in 2011 accounted for 76% ofEni’s production in Norway.

The development plan of the Morvin field has been completedwith a production peak of 22 KBOE/d reached in the year.Development activities progressed to put in production discoveredreserves near the Asgaard field (Eni’s 

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interest 14.82%) with the Marulk development plan (Enioperator with a 20% interest). Production started-up in earlydays of April 2012 and is expected to reach approximately 20KBOE/d (4 KBOE/d net to Eni) on average during the year.

Eni holds interests in four production licenses in theNorwegian section of the North Sea. The main producing field isEkofisk (Eni’s interest 12.39%) in PL 018, which in 2011produced approximately 32 KBOE/d net to Eni and accounted for 24%of Eni’s production in Norway. The license expires in 2028,and negotiations are ongoing to grant an extension. Activitieswere performed during the year to maintain and optimize theproduction rate by means of infilling wells, the development ofthe South Area extension, upgrading of existing facilities andoptimization of 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 according toschedule. Start-up is expected in 2013 with the productionplateau of 100 KBBL/d.

Eni was awarded three exploration licenses in the Barents Sea:(i) the PL657 license (Eni operator with an 80% interest) inJanuary 2012. In case of exploration success, the project willbenefit from the nearby facilities of the Goliat operated fieldthus significantly reducing time to market; and (ii) in May 2011the PL608 (Eni’s interest 30%) license located near theSkrugard oil discovery and the PL226B license (Eni’sinterest 31%) located in high mineral potential basin.

Exploration activities yielded positive results with theSkrugard and Havis oil and gas discoveries in the PL532 license(Eni’s interest 30%). Both fields are planned to be put inproduction by means of a fast-track synergic development.

*Ukraine.*In July 2011, Eni acquired from CadoganPetroleum plc an interest in two licenses for exploration anddevelopment in areas included in the Dniepr-Donetz Basin. Eniacquired 30% with an option to increase its participation to upto 60% in the Pokrovskoe exploration license and the acquisitionof 60% interest in the Zagoryanska license.

| *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, the Irish Sea and certain areas East and West        of the Shetland Islands. In 2011, Eni’s net        production of oil and gas averaged 76 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%), Andrew        (Eni’s interest 16.21%), Flotta Catchment Area        (Eni’s interest 20%) and MacCulloch (Eni’s        interest 40%), which in 2011 accounted for 83% of        Eni’s production in the UK.

Main development activities concerned: (i) the        construction of production platform and drilling        activities at the gas and liquids Jasmine field        (Eni’s interest 33%) with start-up expected at the        end of 2012; (ii) Phase 2 development plan of the West        Franklin field (Eni’s interest 21.87%) with the        construction of a well-head platform and linkage to the        Elgin/Franklin treatment plant. Drilling activities are        progressing with start-up expected in 2013; (iii)        development activities at the oil and gas Kinnoul field        (Eni’s interest 16.67%). The drilling of producing        subsea wells has been completed while the linkage to the        production facilities of the Andrew field is in progress.        Start-up is expected in 2013; and (iv) concept definition        activities for the Mariner heavy oil field proceed with        target to submit the Field Development Plan and sanction        the project early in 2013. |   |  |
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|--|

Exploration activities yielded positive results with theappraisal of Culzean discovery continuing (Eni’s interest16.95%).

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| *North Africa*

Eni’s operations in North Africa are conducted in        Algeria, Egypt, Libya and Tunisia. In 2011, North Africa        accounted for 28% of Eni’s total worldwide        production of oil and natural gas.

*Algeria.* Eni has been present in Algeria since        1981. In 2011, Eni’s oil and gas production averaged        69 KBOE/d.

Operating activities are located in the Bir Rebaa area        in the South-Eastern Desert and include the following        exploration and production blocks: (i) Blocks 403a/d        (Eni’s interest up to 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 404a (Eni’s interest 12.25%);        (v) Blocks 208 (Eni’s interest 12.25%) and 405b        (Eni’s interest 75%) with ongoing development        activities; (vi) Block 212 (Eni’s interest        22.38%) with discoveries already made; and (vii) Blocks        316b, 319a and 321a (Eni operator with a 49% interest) in        the Kerzaz area with ongoing exploration activities.

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

Exploration and production activities in Algeria are regulatedby Production Sharing Agreements (PSAs) and concession contracts.

Production in Block 403a/d and Rom North comes mainly from theHBN and Rom and satellite fields and represented approximately20% of Eni’s production in Algeria in 2011. A new multiphasepumping system is under finalization in compliance withapplicable country law to reduce gas flaring by 2012.

Production in Blocks 401a/402a comes mainly from the ROD/SFNEand satellite fields and accounted for approximately 25% ofEni’s production in Algeria in 2011. Infilling activitiesare being performed in order to maintain the current productionplateau.

The main fields in Block 403 are BRN, BRW and BRSW whichaccounted for approximately 18% of Eni’s production inAlgeria in 2011.

In Block 405b, the development activity relates to the MLE andCAFC integrated project. The final investment decision of theprojects was sanctioned (MLE in 2009; CAFC in 2010). The MLEdevelopment plan foresees the construction of a natural gastreatment plant with a capacity of 350 mmCF/d and of four exportpipelines with linkage to the national grid system. Thesefacilities will also receive gas from the CAFC field. Productionstart-up is expected in 2012. The CAFC project provides theconstruction of an oil treatment plant and will also benefit fromsynergies with MLE production facilities. Gas and oil productionstart-up of CAFC field are expected in 2012 and 2014,respectively. The overall Block 405b will target a productionplateau of approximately 33 KBOE/d net to Eni by 2015.

Block 208 is located South of Bir Rebaa. The El Merk projectis progressing with the drilling activities and the constructionof treatment facilities. The development program provides for theconstruction of a gas treatment plant with a capacity ofapproximately 600 mmCF/d, two oil trains with a capacity of 65KBBL/d and three export pipelines with linkage to the nationalsystem for an overall production of approximately 11 KBBL/d.Start-up is expected in 2013.

The Algerian hydrocarbon Law No. 5 of 2007 introduced a highertax burden for the national oil company Sonatrach which hasclaimed to renegotiate the economic terms of certain PSAs inorder to restore the initial economic equilibrium. Eni, in thisrespect, signed an agreement for Block 403, while an agreementhas yet to be finalized for Block 401a/402a. In relation to theBlock 208, an agreement has been signed and the parties havesettled the matter early in March 2012. The settlement wasapproved by the relevant Algerian authorities.

In the medium-term, management expects to increase Eni’sproduction in Algeria to approximately 120 KBOE/d, reflecting theongoing development projects.

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|  |   | *Egypt.*Eni has been        present in Egypt since 1954. In 2011, Eni’s share of        production in this country amounted to 225 KBOE/d and        accounted for 15% of Eni’s total annual hydrocarbon        production. Eni’s main producing liquid fields are        located in the Gulf of Suez, primarily in Belayim field        (Eni’s interest 100%) and in the Western Desert        mainly Melehia concession (56% interest) and Ras Qattara        (75% interest). Gas production mainly comes from the        operated or participated concession of North Port Said        (Eni’s interest 100%), El Temsah (50% interest),        Baltim (50% interest) and Ras el Barr (50% interest,        non-operated) and all located in the offshore the Nile        Delta. In 2011, production from these main concessions        accounted for approximately 91% of Eni’s production        in Egypt.
Exploration and production activities in        Egypt are regulated by Production Sharing Agreements.

In July 2011, Eni and the Egyptian Authorities        reaffirmed their upstream commitment in the Country,        particularly in the Western Desert, the Mediterranean Sea        and the Sinai Basins. Agreed plans foresee drilling        additional producing wells and the fast track of recent        discoveries as well as an exploration plan including the        drilling of 12 wells.

In 2011, production was started-up at the Denise B        field in the El Temsah concession (Eni operator with a        50% interest), the second development phase of the Denise        field with the drilling of 3 other subsea wells linked to        the production facilities in the area flowing initially        at 7 KBOE/d net to Eni. Production peak is expected at 14        KBOE/d in 2012. |
|--|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |   |   |
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|--------|
| Main activities of the year        were: (i) the upgrading of the El Gamil plant by adding        new compression capacity to support production; (ii) the        Seth project (Eni’s interest 50%). The development        activity provides the drilling of two wells and the        installation of production platform. Start-up is expected        in 2012.
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 is currently supplying 35 BCF/y        for a 20-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 with        near field activities in the: (i) Belayim concession with        three oil discovery wells (BB-10, BLNE-1 and EBLS-1) that        were linked to the existing facilities; (ii) Abu Madi        West development lease (Eni’s interest 75%) with        Nidoco West and Nidoco East gas discoveries. The linkage        to the existing facilities was completed; (iii) Melehia        development lease with the Aman SW, Dorra-1X oil and        Melehia North-1X wells that were started-up; and        (iv) East Kanayis concession (Eni’s interest        100%) with the Qattara Rim-3 and Qattara North-1 oil        discoveries.

*Libya.* Eni started operations in Libya in 1959.        In 2011, Eni’s oil and gas production averaged 108        KBOE/d. 

The 2011 activities and production were affected by        the Libyan crisis for about eight months. From September        all activities and the oil and gas production offshore        and onshore have been partially resumed. Gas export via        the GreenStream pipeline has been re-opened in October        and export gas has subsequently been increased from |   |        |

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November when Bahr Essalam field re-started operations.Average daily production at the end of 2011 was in the range of240 KBOE/d. Full capacity production level in all fields isexpected during the second half of 2012. For further informationon this matter, see "Item 3 – Risk Factors".

Production activity is carried out in the Mediterraneanoffshore facing Tripoli and in the Libyan Desert area andincludes six contract areas. Onshore contract areas are: (i) AreaA consisting in the former concession 82 (Eni’s interest50%); (ii) Area B, former concessions 100 (Bu Attifel field) andthe NC 125 Block (Eni’s interest 50%); and (iii) Area E withEl Feel (Elephant) field (Eni’s interest 33.3%); and (iv)Area F with Block 118 (Eni’s interest 50%). Offshorecontract areas are: (i) Area C with the Bouri oil field(Eni’s interest 50%); and (ii) Area D with Blocks NC 41 andNC 169 (onshore) including the Western Libyan Gas Project(Eni’s interest 50%).

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

*Tunisia.* Eni has been present in Tunisia since 1961. In2011, Eni’s production amounted to 17 KBOE/d. Eni’sactivities are located mainly in the Southern Desert areas and inthe 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.

Optimization of production was carried out at the Adam, DjebelGrouz (Eni’s interest 50%), Oued Zar and El Borma fields.

> 
*Sub-Saharan Africa*

Eni’s operations in Sub-Saharan Africa are conductedmainly in Angola, Congo and Nigeria. In 2011, Sub-Saharan Africaaccounted for 23% of Eni’s total worldwide production of oiland natural gas.

| *Angola.*Eni has been        present in Angola since 1980. In 2011, Eni’s        production averaged 95 KBOE/d. Eni’s activities are        concentrated in the conventional and deep offshore.
The        main producing blocks with Eni’s participation are:        (i) Block 0 in Cabinda (Eni’s interest 9.8%)        North of the Angolan coast; (ii) Development Areas in the        former Block 3 (Eni’s interest ranging from 12% to        15%) in the offshore of the 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’s        interest 20%) in the deep offshore of the Congo Basin.

Eni also holds interests in other non producing        concessions, in particular in the Lianzi Development Area        (Block 14K/A IMI Unit Area - Eni’s interest 10%), in        Block 3/05-A (Eni’s interest 12%), in onshore        Cabinda North (Eni’s interest 15%) and in the Open        Areas of Block 2 awarded to the Gas Project (Eni’s        interest 20%).

In the exploration and development phase, Eni is        operator of Block 15/06 (Eni’s interest 35%), where        West Hub is the main sanctioned project underway, with        start-up expected in 2014 and peaking production at 80        KBBL/d.

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

In 2011, Eni was awarded the right to explore and the        operatorship of the deep offshore Block 35, with a 30%        interest. The agreement foresees the drilling of 2 |   |  |
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commitment wells to be carried out in the first 5 years of theexploration phase. This deal was approved by the relevantauthorities.

Within the activities for reducing gas flaring in Block 0(Eni’s interest 9.8%), activity progressed at the Nembafield in Area B. Completion is expected in 2013 reducing flaredgas by approximately 85%. Other ongoing projects include: (i) thecompletion of linkage and treatment facilities at the Malongoplant; and (ii) the installation of a second compression unit atthe Nemba platform in Area B.

In the Area A the concept definition phase has been completedfor the further development of the Mafumeira field. Projectsanctioning is expected in 2012 with start-up in 2015.

Main projects underway in the Development Areas of formerBlock 15 (Eni’s interest 20%) concerned: (i) the satellitesof Kizomba Phase 1, with start-up expected before by mid 2012 andpeaking production at 100 KBBL/d (approximately 21 KBBL/d net toEni) in 2013; and (ii) drilling activity at the Mondo andSaxi/Batuque fields to finalize their development plan. Thesubsea facility of the Gas Gathering project has been completedand will provide for the collection of all the gas of theKizomba, Mondo and Saxi/Batuque fields to be delivered to theA-LNG liquefaction plant.

Eni holds a 13.6% interest in the Angola LNG Limited (A-LNG)consortium responsible for the construction of an LNG plant witha processing capacity of approximately 1.1 BCF/d of natural gasand produce 5.2 mmtonnes/y of LNG and over 50 KBBL/d ofcondensates and LPG. The project has been sanctioned by relevantAngolan Authorities. It envisages the development of 10,594 BCFof gas in 30 years. Exports start-up is expected in the secondquarter of 2012. LNG may be delivered to the United States marketat the re-gasification plant in Pascagoula (Eni’s capacityamounting to approximately 205 BCF/y) in Mississippi. A jointcompany has been established to assess further possible marketingopportunities.

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 deliver gas and associated liquids. Eni is technical advisorwith a 20% interest.

Exploration activities yielded positive results in:(i) Block 2 (Eni’s interest 20%) with the Garoupa-2 andGaroupa Norte 1 appraisal gas and condensates wells, within theGas Project; (ii) Block 15/06 with the Lira gas and condensatesdiscovery; and (iii) in the same block with the Mukuvo-1discovery and Cinguvu-2 and Cabaça South East-3 appraisal wellscontaining oil.

|  |   | In the medium-term,        management expects to increase Eni’s production to        approximately 170 KBBL/d reflecting contributions from        ongoing development projects.
*Congo.* Eni has        been present in Congo since 1968. In 2011, production        averaged 104 KBOE/d net to Eni.

Eni’s activities are concentrated in the        conventional and deep offshore facing Pointe Noire and        onshore.

Eni’s main operated oil producing interests in        Congo are the Zatchi (Eni’s interest 65%) and Loango        (Eni’s interest 50%), Ikalou (Eni’s interest        100%), Djambala, Foukanda and Mwafi (Eni’s interest        65%), Kitina (Eni’s interest 35.75%), 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        the Pointe Noire Grand Fond, PEX and Likouala permits. In        the exploration phase, Eni also holds interests in the        Mer Très Profonde Sud deep offshore block (Eni’s        interest 30%), the Noumbi onshore permit (Eni’s        interest 37%) and the Marine XII offshore permit (Eni        operator with a 65% interest).

Exploration and production activities in Congo are        regulated by Production Sharing Agreements. |
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In 2011, production started-up at the Libondo offshore field(Eni’s interest 35%) with production of approximately 3KBOE/d net to Eni.

Activities on the M’Boundi field moved forward with theapplication of advanced recovery techniques and a design tomonetize associated gas within the activities aimed at zero gasflaring by 2012. In addition starting from 2009, Eni finalizedlong-term agreements to supply associated gas from theM’Boundi field to feed three facilities in the Pointe Noirearea: (i) the under construction potassium plant, owned byCanadian Company MAG Industries; (ii) the existing Djeno powerplant (CED - Centrale Electrique du Djeno) with a 50 MWgeneration capacity; (iii) the recently built CEC CentraleElectrique du Congo power plant (Eni’s interest 20%) with a300 MW generation capacity. These facilities will also receive inthe future gas from the offshore discoveries of the Marine XIIpermit. In 2011, M’Boundi supply to the CEC and CED powerplants was approximately 106 mmCF/d (17 KBOE/d net to Eni).

The RIT project progressed for the rehabilitation of the powergrid from Pointe Noire to Brazzaville within the integratedproject to monetize gas in Congo.

In the medium-term, management expects to increase Eni’sproduction in Congo due to the integration and development ofrecently acquired assets as well as projects underway, targetinga level in excess of 120 KBOE/d by 2018.

*Democratic Republic of Congo.*Eni has been present inDemocratic Republic of Congo since 2010.

Eni holds a 55% interest and operatorship in the Ndunda Blockwhich may lead to future developments after explorationactivities. At present no relevant activities are conducted inthis country.

*Ghana.* Eni has been present in Ghana since 2009,following the acquisition of the Offshore Cape Three Points Southand Offshore Cape Three Points (Eni operator with a 47.2%interest) exploration permits.

Exploration activities yielded positive results with theSankofa-2 appraisal well and the Gye Nyame discovery, bothcontaining gas and condensates in the Offshore Cape Three Pointslicense.

*Mozambique.* Eni has been present in Mozambique since2006, following the acquisition of the Area 4 block (Eni operatorwith a 70% interest) located in the offshore Rovuma Basin.

Exploration activities yielded positive results in Area 4 withthe Mamba South 1, Mamba North 1 and Mamba North East 1 gasdiscoveries.

Management believes these fields contain a large amount of gasresources which will eventually be developed in phases.

In the next two years up to 8 additional wells are expected tobe drilled in the nearby areas.

*Nigeria.* Eni has been present in Nigeria since 1962. In2011, Eni’s oil and gas production averaged 154 KBOE/dlocated mainly in the onshore and offshore of the Niger Delta.

In 2011, Eni optimized its producing asset portfolio: (i) thepurchase from GEC Petroleum Development Co (GDPC) a 49% interestin Block OPL 2009 in addition to the awarding from the NigerianGovernment a 50% interest in Block OPL 245 as well as relativelicense and operatorship; (ii) the divestment of a 5% interest inblocks OML 26 and OML 42; and (iii) the finalization of thedivestment of a 40% interest in blocks OML 120 and 121. Thetransaction is subject to the approval of relevant authorities.

In the development/production phase Eni is operator of onshoreOil Mining Leases (OML) 60, 61, 62 and 63 (Eni’s interest20%) and offshore OML 125 (Eni’s interest 85%), OMLs 120-121(Eni’s interest 40%), holding interests in OML 118(Eni’s interest 12.5%) as well as in OML 119 and 116 ServiceContracts. As partners of SPDC JV, the largest joint venture inthe country, Eni also holds a 5% interest in 28 onshore blocksand a 12.86% interest in 5 conventional offshore blocks.

In the exploration phase Eni is operator of offshore OilProspecting Leases (OPL) 244 (Eni’s interest 60%), OML 134(former OPL 211 - Eni’s interest 85%) and onshore OPL 282(Eni’s interest 90%) and OPL 135 (Eni’s interest 48%).Eni also holds a 12.5% interest in OML 135 (former OPL 219).

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 state-owned company.

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In blocks OMLs 60, 61, 62 and 63 (Eni operator with a 20%interest), activities aimed at guaranteeing production to feedgas to the Bonny liquefaction plant and flaring down progressed.As part of supply to the Bonny liquefaction plant, thecompression and gas export capacity at the Obiafu/Obrikom plantwas increased to ensure 170 mmCF/d net to Eni of feed gas for 20years aimed for sixth train. To the same end the development planprogressed at the Tuomo field with early-production start-up in2012.

In block OML 28 (Eni’s interest 5%) within the integratedoil and natural gas project in the Gbaran-Ubie area, the drillingprogram progressed. The development plan provides for theconstruction of a Central Processing Facility (CPF) withtreatment capacity of approximately 1 BCF/d of gas and 120 KBBL/dof liquids.

The Forcados/Yokri oil and gas field (Eni’s interest 5%)is under development as part of the integrated associated gasgathering project aimed at supplying gas to the domestic marketthrough Escravos-Lagos pipeline system. First gas is expected in2013.

Eni holds a 10.4% interest in Nigeria LNG Ltd responsible forthe management of the Bonny liquefaction plant, located in theEastern Niger Delta. The plant has a design treatment capacity ofapproximately 1,236 BCF/y of feed gas corresponding to aproduction of 22 mmtonnes/y of LNG on six trains. The seventhunit is being engineered as it is in the planning phase. Whenfully operational, total capacity will amount to approximately 30mmtonnes/y of LNG, corresponding to a feedstock of approximately1,624 BCF/y. Natural gas supplies to the plant are provided undergas supply agreements with a 20-year term from the SPDC jointventure (Eni’s interest 5%) and the NAOC JV, the latteroperating the OMLs 60, 61, 62 and 63 blocks with an overallamount at the end of 2011 of 2,797 mmCF/d (267 mmCF/d net to Enicorresponding to approximately 48 KBOE/d). LNG production is soldunder long-term contracts and exported to European and Americanmarkets by the Bonny Gas Transport fleet, wholly owned by NigeriaLNG 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 kilometers 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 60 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. Preliminary long-term contracts were signed to sell the wholeLNG production capacity. Eni acquired 1.67 mmtonnes/y of LNGcapacity (corresponding to approximately 81 BCF/y). LNG may bedelivered to the United States market mainly at the 

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re-gasification plant in Cameron, in Louisiana, U.S.Eni’s capacity amounts to approximately 201 BCF/y. Front endengineering activities progressed. The final investment decisionis expected in 2012.

Exploration activities yielded positive results in Block OML36 (Eni’s interest 5%) with the Opugbene 2 appraisal wellcontaining natural gas and condensates.

In the medium-term, management expects to increase Eni’sproduction in Nigeria to approximately 200 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 2011,Eni’s operations in Kazakhstan accounted for 7% 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. The NCSPSA will expire 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 theinternational consortium are the Kazakh national oil company,KazMunaiGas, and the international oil companies Total, Shell andExxonMobil, each with a participating interest currently of16.81%, ConocoPhillips with 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 the execution of the subsequentdevelopment phases of the project. The North Caspian Operating Co(NCOC) BV participated by the seven partners of the Consortiumhas taken over the operatorship of the project. Subsequentlydevelopment, drilling and production activities have beendelegated by NCOC BV to the main partners of the Consortium: Enihas retained the responsibility for the development of Phase 1 ofthe project (the so-called "Experimental Program") andthe onshore part of Phase 2.

The Consortium is currently focused on completing Phase 1 andstarting commercial oil production. Management estimates thatPhase 1 was 90% completed as of end of December 2011. TheTranches 1 and 2 of the agreed scope of work have reachedapproximately 98% by the end of the year. The Consortium iscurrently targeting the achievement of first commercial oilproduction by end of 2012 or in the early 2013.

The project Phase 1 (“Experimental Program”) assanctioned by the partners of the venture targets an initialproduction capacity of 150 KBBL/d. In 2014, the second train oftreatment and compression facilities for gas re-injection will becompleted and come 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 intend to submit the scheme ofthis additional gas compression activity to the relevant KazakhAuthorities in the course of 2012 in order to obtain approval tostart the engineering design. The partners are currentlyassessing Phase 2 of the development of the Kashagan field with aview of optimizing the development lay-out. The review isexpected to be completed by 2012.

Management believes that significant capital expenditures willbe required in case the partners of the venture would sanctionPhase 2 and possibly other additional phases. Eni will fund thoseinvestments in proportion to its participating interest of16.81%. However, taking into account that future developmentexpenditures will be incurred over a long time horizon andsubsequent to the production start-up, management does not expectany material impact on the Company’s liquidity or itsability to fund these capital expenditures. In addition to theexpenditures for developing the field, further capitalexpenditures will be required to build the infrastructures neededfor exporting the production to international markets.

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 disclosed under paragraph"Proved Undeveloped Reserves".

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.

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As of December 31, 2009, Eni’s proved reserves booked forthe Kashagan field amounted to 588 mmBOE, recording a decrease of6 mmBOE with respect to 2008.

As of December 31, 2011, the aggregate costs incurred by Enifor the Kashagan project capitalized in the ConsolidatedFinancial Statements amounted to $6.7 billion (euro 5.2 billionat the EUR/USD exchange rate of December 31, 2011). Thiscapitalized amount included: (i) $5.1 billion relating toexpenditure incurred by Eni for the development of the oilfield;and (ii) $1.6 billion relating primarily to accrue financecharges and expenditures for the acquisition of interests in theNorth Caspian Sea PSA Consortium from exiting partners uponexercise of pre-emption rights in previous years.

As of December 31, 2010, the aggregate costs incurred by Enifor the Kashagan project capitalized in the ConsolidatedFinancial Statements amounted to $5.8 billion (euro 4.4 billionat the EUR/USD exchange rate of December 31, 2010). Thiscapitalized amount included: (i) $4.5 billion relating toexpenditures incurred by Eni for the development of the oilfield; and (ii) $1.3 billion relating primarily to accrue financecharges and expenditures for the acquisition of interests in theNorth Caspian Sea PSA consortium from exiting partners uponexercise of pre-emption rights in previous years.

| *Karachaganak.* Located        in West onshore 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 with a 32.5% interest        each.
On December 14, 2011, the Republic of Kazakhstan        (RoK) and the contracting companies of Karachaganak Final        Production Sharing Agreement (FPSA) reached an agreement        to settle all pending claims. The agreement will support        the further development of the field. The agreement,        effective from June 30, 2012 on satisfaction of        conditions precedent, involves Kazakhstan’s        KazMunaiGas (KMG) acquiring a 10% interest in the        project. This will be done by each of the contracting        companies (Eni, BG, Chevron and Lukoil) transferring 10%        of their rights and interest in the Karachaganak FPSA to        KMG. The contracting companies will receive $1 billion        net cash consideration ($325 million being Eni’s        share). In addition the agreement provides for the        allocation of an extra nominal capacity of 2 million        tonnes of oil per annum capacity for the Karachaganak        project in the Caspian Pipeline Consortium export        pipeline. The effects of the agreement on profit and        loss, reserve and production entitlements will be        recognized in the 2012 financial statements. |   |  |
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In 2011, production of the Karachaganak field averaged 239KBBL/d of liquids (64 net to Eni) and 784 mmCF/d of natural gas(211 net to Eni). This field is developed by producing liquidsfrom the deeper layers of the reservoir and re-injecting theassociated gas in the higher layers. Approximately 85% of liquidproduction are stabilized at the Karachaganak Processing Complex(KPC) with a capacity of approximately 240 KBBL/d and exported toWestern markets through the Caspian Pipeline Consortium(Eni’s interest 2%) and the Atyrau-Samara pipeline. Theremaining volumes of non-stabilized liquid production andassociated raw gas not re-injected in the reservoir are marketedat the Russian terminal in Orenburg.

The fourth liquids stabilization train has been completed andallowed to increase export oil volumes through the CaspianPipeline Consortium.

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 of gas treatment plant andre-injection facilities to increase gas sales and liquidsproduction. The development plan is currently in the phase oftechnical and marketing discussion to be presented to therelevant Authorities.

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.

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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.

As of December 31, 2009, Eni’s proved reserves booked forthe Karachaganak field amounted to 633 mmBOE, recording adecrease of 107 mmBOE with respect to 2008 in connection todownward revisions due to the impact of higher oil prices and theproduction of the year.

> 
*Rest of Asia*

In 2011, Eni’s operations in the rest of Asia accountedfor 7% 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 2011 Eni’sproduction amounted to 8 KBOE/d.

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

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%). Exploration activity is conductedin Block 28/20 (Eni’s interest 100%).

In January 2011 Eni and PetroChina signed a Memorandum ofUnderstanding to promote joint projects in conventional and nonconventional hydrocarbon plays in China and outside China. Asimilar agreement has been signed on July 2011 with Sinopec.

*India.*Eni has been present in India since 2005 and itsactivities are located in the offshore Cauvery Basin near theSouth-Eastern coast. In 2011, Eni’s production amounted to 4KBOE/d.

Production mainly comes from the PY-1 gas field which is partof the assets belonging to Hindustan Oil Exploration Co Ltd(Eni’s interest 47.18%) acquired within the Burrenacquisition. Gas production is sold to the local national oilcompany.

| *Indonesia.*Eni has        been present in Indonesia since 2001. In 2011, Eni’s        production mainly composed of gas, amounted to 14 KBOE/d.        Activities are concentrated in the Eastern offshore and        onshore of East Kalimantan, the offshore Sumatra, and the        offshore and onshore area of West Timor; in total, Eni        holds interest in 12 blocks.
Exploration and production        activities in Indonesia are regulated by PSAs.

In 2011, Eni was awarded two operated gas exploration        licenses: (i) the Arguni I block with a 100% interest        located onshore and offshore in the Bintuni Basin near a        liquefaction facility. The agreement foresees seismic        data acquisition and the drilling of 2 commitment wells        to be carried out in the first three years of exploration        phase; and (ii) the North Ganal block, located offshore        Indonesia near the relevant Jangkrik discoveries and the        Bontang liquefaction terminal, in a consortium with other        international oil companies. The commitment activities        provides for the seismic data acquisition and the        drilling of one well in the first three years.

The development plan of the operated Jankrik        (Eni’s interest 55%) and Jau (Eni’s interest        85%) gas fields has been approved by relevant        authorities. Planned development activities at the        Jangkrik offshore field include drilling of production        wells, installation of a Floating Production Unit for gas        and condensate treatment and construction of a transport        facility connecting to the onshore existing network        linked to the Bontang liquefaction plant for gas, while        condensates will be |   |  |
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supplied to the treatment plants in the area. Start-up isexpected in 2016. The Jau project provides for the drilling ofproduction wells and the linkage to onshore plants via pipeline.Start-up is expected in 2016.

In 2011, exploration activities related to the coal bedmethane project progressed at the Sanga Sanga PSC (Eni’sinterest 37.8%). Predevelopment activities are underwayexploiting the synergy opportunities provided by the existingproduction and treatment facilities also including the BontangLNG plant. Start-up is expected in 2013. In November 2011 Enisigned with the national power company PT Perusahaan ListrikNegara a Memorandum of Understanding to supply approximately 494KCF/d of CBM gas for at least 5 years (corresponding toapproximately 180 mmCF/y) to feed a power plant. The contract isin the process of being finalized.

Exploration activities yielded positive results with JangkrikNorth East gas discovery in the Muara Bakau block (Eni operatorwith a 55% interest), located in the Kutei Basin.

*Iran.*Eni has been operating in Iran for several yearsunder four Service Contracts (South Pars, Darquain, Dorood andBalal, these 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. Allabove 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 involvements will essentially consist ofbeing reimbursed for its past investments. In 2011, Eni’scontractual reimbursements were equivalent to a production of 6KBOE/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 internationalcompanies and the national oil company Missan Oil, holds 32.8%interests in Zubair oil field.

Development and production activities in Iraq are regulated byTechnical Service Contract. This contractual term establishes anoil entitlement mechanism and associated risk profile similar tothose applicable in Production Sharing Contracts.

| In 2011, production of the        Zubair field averaged 257 KBBL/d (7 KBBL/d net to Eni).
Development        activities progressed at the Zubair oil field. The        project, having a 20-year term with a further 5-year        extension, foresees to gradually increase production to a        target plateau level of 1.2 mmBBL/d by 2016 and provides        for two phases: (i) Rehabilitation Plan approved in 2010        and aimed at improving current operations and reducing        production decline as well as appraisal of both producing        and undeveloped discovered reservoirs; and        (ii) Enhanced Redevelopment Plan designed to attain        the scheduled targets.

*Pakistan.*Eni has been present in Pakistan        since 2000. In 2011, Eni’s production mainly        composed of gas amounted to 56 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 2011 accounted for 81% of Eni’s production in        Pakistan.

Development activities were aimed at reducing natural        decline in: (i) the Bhit field, where the installation of        a compression facility was completed. Drilling activities        and optimization of current production are underway to        extend production plateau; (ii) the Zamzama field, where        the first phase of the Front End Compression project has        been completed. Two additional wells will be drilled in        2012; and (iii) the Miano Front End Compression        (Eni’s interest 15%) and Badhra Field Compression        (Eni operator with a 40% interest) projects have been        completed in 2011. |   |  |
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|--|

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Exploration activity yielded positive results with: (i) theKadanwari-27 exploration well, in the homonymous permit(Eni’s interest 18.42%) which yielded up to approximately 50mmCF/d of gas in test production; (ii) the Lundo discovery andTajjal 4 appraisal well in the Gambat permit (Eni’s interest23.7%). The latter start-up is expected in 2012; (iii) the MisriBhambroo exploration well located in the SW Miano II permit(Eni’s interest 33.3%).

| *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 September 2011, Eni signed a        contract whereby Gazprom commits to purchase volumes of        gas produced by the joint venture Severenergia through        the development of the Samburgskoye field. The agreement        secured a final investment decision for the field        development. Start-up is expected in 2012. In addition,        the Final Investment Decision of the onshore gas and        condensate Urengoskoye field was sanctioned. Start-up is        expected in 2014. Following the two investment decisions        amounts of proved undeveloped reserves were booked in        2011 as reserves held by equity-accounted entities.

*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 2011, Eni’s        production averaged 11 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. Enireceives, by means of a swap with the Turkmen Authorities, anequivalent amount of oil at the Okarem field, close to the Southcoast of the Caspian Sea. Eni’s entitlement is sold FOB.Associated natural gas is used for own consumption and gas liftsystem. The remaining amount is delivered to Turkmenneft, vianational grid.

> 
*America*

In 2011, Eni’s operations in America area 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 2011,Eni’s production averaged 7 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 2011, Eni’s production averaged 57mmCF/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,Ponsettia, 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.

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In 2011, Eni’s oil and gas production mainly derived fromthe Gulf of Mexico with an average of 96 KBOE/d.

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

Eni holds interests in 307 exploration and production blocksin the Gulf of Mexico of which 191 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 King Kong(Eni’s interest 54%) and Pegasus (Eni’s interest 58%).Eni also holds interests in the Medusa (Eni’s interest 25%),Europa (Eni’s interest 32%), and Thunder Hawk (Eni’sinterest 25%) fields.

In 2011, production started at the Appaloosa field with aproduction of 7 KBBL/d through linkage to the Corral operatedplatform with a treatment capacity of 33 KBBL/d net to Eni.

Development activity progressed at the Alliance area(Eni’s interest 27.5%), in the Fort Worth Basin in Texastargeting a plateau of 9 KBOE/d in 2012. This area, including gasshale reserves, was acquired in 2009 following a strategicalliance Eni signed with Quicksilver Resources Inc. In 2011production averaged 8 KBOE/d.

Other main activities included work-over activities at theGoldfinger field (Eni’s interest 100%) and Spiderman field(Eni’s interest 36.7%) as well as the drilling ofdevelopment wells in the Triton field (Eni’s interest 75%).

In order to achieve the highest security standards ofoperations in the Gulf of Mexico, Eni entered a consortium led byHelix that worked at the containment of the oil spill at theMacondo well. The Helix Fast Response System (HFRS) 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".

Exploration activities yielded positive results in theoffshore block KC919 (Eni’ interest 25%) with Hadrian Northappraisal well containing oil and natural gas resources. Thediscovery allowed approving the development of the GreaterHadrian Area project.

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Eni holds interests in 135 exploration and development blocksin Alaska, with interests ranging from 10 to 100% and for 59 ofthese blocks, Eni is the operator.

In 2011, production started at the Nikaitchuq operated field(Eni’s interest 100%), located in the North Slope Basinoffshore Alaska. Development plan completion is expected in 2014with an average production plateau at approximately 21 KBBL/d netto Eni in 2016.

Other main production field is the Oooguruk oil field(Eni’s interest 30%), in the Beaufort Sea with a productionof 7 KBBL/d (approximately 2 KBBL/d net to Eni) in 2011.

*Venezuela.*Eni has been present in Venezuela since1998. In 2011, 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).

Production and planning activities progressed at the Corocorooil field (Eni’s interest 26%). In 2012 with the start-up ofthe Central Production Facility, Eni foresees to exceed currentpeak production of 42 KBBL/d (approximately 11 KBBL/d net toEni). The subsequent development phase will allow reachingproduction of over 51 KBBL/d in 2015.

Planning activities progressed at the Junin 5 field(Eni’s interest 40%), located in the central part of theOrinoco Belt. First oil is expected in 2012 with a productionplateau in the first phase of 75 KBBL/d, targeting a long-termproduction plateau of 240 KBBL/d to be reached in 2018. Theproject provides the construction of a refinery with a capacityof 350 KBBL/day that will allow also the treatment ofintermediate streams from other PDVSA facilities.

In 2011, upstream engineering contracts related to theprocessing plants were awarded. Start-up of drilling activity isexpected in 2012. Eni agreed to finance part of PDVSA’sdevelopment costs for the early production phase up to $1.5billion. In addition, Eni will secure a tranche of the Junin 5bonus and an additional financing to PDVSA for a total of $500million to fund the construction of a power station in the Guiriapeninsula, confirming its commitment to sustainable development.

Pre-development and appraisal activities were completed at thePerla gas field, located in the Cardon IV block (Eni’sinterest 50%) in the Gulf of Venezuela. PDVSA owns a 35% back-inright to be exercised in the development phase, and at that timeEni will hold a 32.5% working interest in the joint operatingcompany.

The Final Investment Decision for the first development phasewas sanctioned in the year and a Gas Sale Agreement was signed.EPC contracts for the project are being awarded.

The Early Production phase includes the utilization of thealready successfully drilled wells and the installation ofproduction platforms linked by pipelines to the onshoreprocessing plant. The target production of approximately 300mmCF/d is expected in 2014. The development of Perla is currentlyplanned to continue with two more phases by means of the drillingof additional wells and the upgrading of treatment facilities toreach a plateau production of 1,200 mmCF/d.

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 2011, 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 since2000. In 2011, Eni’s production of oil and natural gasaveraged 28 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%), WA-25-L (Eni operator with a65% interest) and JPDA 03-13 (Eni’s interest 10.99%) andJPDA 06-105 (Eni operator with a 40% interest). In theexploration phase Eni holds interests in 10 licenses.

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In May 2011, Eni signed an agreement with MEO Australia Ltd tofarm-in the Heron and Blackwood gas discoveries in permitNT/P-68, located in the Timor Sea. Eni acquired a 50% stake andoperatorship in the first gas discovery by financing explorationactivities relating to the drilling of two appraisal wells. Eniwas granted an option to earn a 50% stake in Blackwood discoveryby performing seismic surveys and drilling one well in the area.The agreement also provides an option to acquire an additional25% in both the discoveries by financing the development planrequired to reach a Final Investment Decision (FID).

In November 2011, Eni acquired a 32.5% stake in the EvansShoal gas discovery in the Timor Sea.

Production started at the Kitan oil field (Eni operator with a40% interest) located between Timor Leste and Australia. Start-upwas achieved by means of the completion of drilling activities inthe deep offshore and the linkage to an FPSO plant (FloatingProduction Storage and Offloading). Peak production of over 40KBBL/d is expected in 2012.

 

> 
***Capital Expenditures***

See "Item 5 – Liquidity and Capital Resources –Capital Expenditures by Segment".

 

 

**Gas & Power**

Eni’s Gas & Power segment engages in supply, tradingand marketing of gas and electricity, managing gasinfrastructures for transport, distribution, storage,re-gasification, and LNG supply and marketing. This segment alsoincludes the activities of power generation and electricitysales. In 2011, Eni’s worldwide sales of natural gasamounted to 96.76 BCM, including 2.86 BCM of gas sales madedirectly by the Eni’s Exploration & Production segment.Sales in Italy amounted to 34.68 BCM, while sales in Europeanmarkets were 52.98 BCM that included 3.24 BCM of gas sold tocertain importers to Italy.

Gas transport, distribution and storage, as well asre-gasification of LNG in Italy are regulated activities astariffs for the services rendered to gas operators and return oncapital employed are set by an independent administrative body.For a further description of those regulated activities seebelow.

 

> 
***Marketing of natural gas***

The competitive scenario in the marketing of natural gas inEurope is particularly challenging as the current economicdownturn will weigh on the perspectives of a solid recovery ingas demand. We expect that a combination of weak demand andrising competition fuelled by an oversupply overhang will put onmargins pressure and reduce sales opportunities. We expect thatthis negative outlook in the gas sector in Italy and Europe willremain in place over the next two to three years. The Company isparticularly exposed to the commodity risk driven by thecircumstance that its supplies are linked to the price of crudeoil and certain refined products, whereas its selling prices arebenchmarked to spot prices at the continental hubs which havebeen hit by the current industry downturn.

The Company forecasts that current oversupply conditions inthe European gas market will be gradually absorbed over thelong-term, targeting a re-coupling between the oil-indexed costof gas supplies and spot prices at the continental hubs. Thisforecast is supported by secular growth trends in worldwide gasdemand and certain management expectations about gas supplieswhich are described below.

Considering that current imbalances between demand and supplyon the European market are expected to continue for some time,risks still exist that in the next four years the Company may beunable to fulfill its minimum take obligations associated withits long-term gas purchase contracts providing take-or-payclauses. For a description of these risks see "Item 3 –Risk Factors" and "Item 5 – Management’sExpectation of Operations".

Management has been implementing a number of initiatives tocope with the expected negative outlook in the gas sectortargeting to gradually recover profitability over the planperiod. First of all, management has committed to renegotiatebetter economic terms of the Company’s long-term gaspurchase contracts, so as to restore the competitiveness of theCompany’s cost position in the current difficult marketenvironment. Through renegotiations, management is seeking toachieve better pricing terms, a revision of the contractualflexibility to reflect the current low level of demand, and,possibly, an option to reopen a renegotiation at any moment inthe future should market conditions further deteriorate. In thecourse of 2011, management succeeded in closing certain importantnegotiations particularly the one with Sonatrach. Othernegotiations are ongoing targeting to close new deals by the endof 2012; 

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particularly, in March 2012 the Company signed a preliminarydeal with Gazprom. The related economic benefits will bedetermined considering the whole of 2011 and are expected to berecognized through the profit and loss of 2012.

| Furthermore, we intend to strengthen our        competitive position in the European gas markets by        leveraging on the following initiatives: |
|-----------------------------------------------------------------------------------------------------------------------------------------------------|

| (i)   |   | we plan to expand sales        volumes and increase our market share leveraging on the        multiple presence in a number of markets, the development        of a pan-European commercial platform, market knowledge,        and aggressive marketing policies aimed at increasing the        number of clients in the industrial and residential        segments which will benefit from integrating the        recently-acquired subsidiaries in France (Altergaz) and        Belgium (Nuon);                                                                                                                                                                                                                                                               |
|-------|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| (ii)  |   | we plan to boost our LNG        sales; and                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |
| (iii) |   | we plan to regain market        share in the Italian market and to preserve marketing        margins leveraging on the strong commercial franchise of        the Company, selecting the customer portfolio and        implementing differentiated marketing actions to retain        clients in each segment with a particular focus on the        valuable residential sector where the Company intends to        strengthen its market position which boasted at the end        of 2011 a customer portfolio of approximately 7.1 million        of active contracts thanks to an excellent service, a        well-known brand, the commercial growth of the combined        offer of gas and electricity and consolidation of new        marketing channels. |

Finally, the Company intends to capture margins improvementsby means of a new risk management strategy by enteringderivatives contracts both in the commodity and the financialtrading venues in order to capture possible favorable trends inmarket prices, within limits set by internal policies andguidelines that define the maximum tolerable level of marketrisk. Furthermore the Company intends to optimize the value ofits assets (gas supply contracts, storage sites, transportationrights, customer base, and market position) by effectivelymanaging the flexibilities associated with these assets. This canbe achieved by entering arbitrage contracts to leverage pricedifferentials at various points along the gas value chain orthrough strategies of dynamic forward trading where theunderlying items are represented by the Company’s assets.Asset backed trading activities are mitigated by the naturalhedge granted by the assets’ availability.

For a description of uncertainties and risks associated withthis strategy see "Item 3 – Risk Factors" and"Item 5 – Management’s Expectation ofOperations".

*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 2011, gas demand in Europe shrank by 10% (down by 6% inItaly) due to the economic downturn, an expansion in the use ofrenewable sources, a shift to coal in thermoelectric productiondue to cost advantages, as well as unusual weather conditions.Management expects a recovery in gas demand in the long-termdriven by macroeconomic stability and increasing use of gas inthe production of electricity, also considering a commitment toreduce CO2 emissions from EU Member States. Globally,management expects EU demand to increase from around 500 BCM in2011 to around 565 BCM by 2015, and to close to 600 BCM in 2020,corresponding to an average growth rate of approximately 2% alongthe period. Gas demand in Italy is expected to grow with anaverage rate of approximately 2% driven by power generationconsumption which is expected to increase from approximately 28BCM in 2011 to over 40 BCM in 2020.

| Those estimates have been revised down        from previous management’s planning assumptions to        factoring a number of ongoing trends such as: |
|------------------------------------------------------------------------------------------------------------------------------------------------------------|

| • |   | uncertainties and volatility        in the current macroeconomic cycle;                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |
|--------|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| • |   | 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 prescription 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. |

On the plus side, ongoing changes in the energy policies ofthe Euro-zone as a result of the nuclear accident at theFukushima plant in Japan could accelerate a recovery in gasconsumption. In addition, the fiscal policies of the MemberStates could affect the composition of the energy mix through theintroduction of penalties on the use of the most 

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inefficient and pollutant sources in energy production.Examples of these trends are a proposed European directive toenact a carbon tax to be levied on those sectors which do notparticipate in the ETS mechanism as well as a proposal to enactcertain fiscal adjustments to put a floor at the price of carbondioxide emissions in the UK.

Gas availability remains abundant as large investments toupgrade import pipelines to Europe have come online from Russia,Algeria and Libya in recent years and large availability of LNGon a worldwide scale has found an outlet at the Europeancontinental hubs driving the development of very liquid spot gasmarkets. The latter was driven by the ramp-up of importantupstream projects which added an approximate 65 BCM ofliquefaction capacity in the three-year period 2008-2010, coupledwith commercial development of non-conventional gas resources inthe United States which have reduced the Country’sdependence on LNG imports. Furthermore, in the near future thestart-up of new infrastructures in various European entry pointsis expected and will add approximately 50-60 BCM of new importcapacity. These include the Medgaz pipeline connecting Algeria tothe Iberian Peninsula, the Nord Stream pipeline connecting Russiato Germany through the Baltic Sea as well as new LNG facilities,particularly a new plant is set to commence operations in theNetherlands with a process capacity of up to 12 BCM. Further 27BCM of new supplies will be secured by a second line of the NordStream later on and new storage capacity will come online. InItaly the gas offered will grow moderately in the next future asa new LNG plant is expected to start operations at Livorno with a4 BCM treatment capacity and effects are in force of Law DecreeNo. 130/2010 concerning storage capacity (see below) which isexpected to increase by 4 BCM by 2015. In addition theGreenStream pipeline is seen to achieve full operations in 2012and gas supplies from Libya will be back online. Also counterflow expenditures will favor gas exchanges among EuropeanCountries.

As a result of these drivers, we expect that current marketimbalances will continue over the next two to three years.Looking beyond, however, we expect the European market torebalance and then show further improvements driven by some keytrends.

First of all, we project that worldwide gas demand will besupported by growing energy needs especially from the Pacificarea, where, between now and 2015, we estimate that consumptionwill increase by 16%, or around 90 BCM, mainly driven by robustrates of economic development, as well as Japan’s shift togas-fired electricity away from nuclear fuel. This will largelyabsorb the new LNG production coming on-stream in the region andattract some of the worldwide LNG supplies which are currentlybeing delivered to Europe. Furthermore, South America and theMiddle East will see an increase in demand for spot LNG cargoes,which also will absorb some of the oversupply to Europe. Finally,the probable postponement of new projects for the development ofgas reserves by upstream operators will also support a betterbalance in worldwide supplies of LNG as a slowdown in buildingnew liquefaction capacity is projected in the medium-term.

The second one is our belief that albeit domestic productionin the United States will continue to grow, nonetheless we expectexports to be limited and subject to regulatory constraintsmainly targeting to maintain stable domestic gas prices.

The third trend is that we forecast that import requirementsin Europe are projected to increase by almost 80 BCM to 2015through a combination of growing demand and declining domesticproduction. Given the expected marginal contribution of Europeanshale gas by that time and the tightening of the LNG market,management expects additional import requirements to be mainlysatisfied by pipeline gas under long-term contracts.

Over the next four years we also believe the internal Europeangas market to become more integrated, thanks to the constructionof new interconnection. Easier gas circulation will createadditional commercial and trading opportunities for companies,like Eni, with diversified supply contracts and market positions.

Management believes that the above mentioned trends will helpEuropean gas operators recover profitability in the medium tolong term. Possible risks to these forecasts are the difficultyin estimating the long-term impact of the current Europeaneconomic slowdown on gas demand, the effectiveness of EU MemberStates in achieving committed targets in reducing the energyintensity and shifting from gas to renewables in the productionof electricity, as well as the actual evolution in the globalavailability of LNG.

 

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

| Over the next four years, in order to        recover profitability in a difficult market Eni’s        strategy focuses on two distinct commercial objectives: |
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (i)  |   | 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; and |
|------|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| (ii) |   | to increase our penetration        in the European retail segment.                                                                                                                                                  |

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 the 

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renegotiation of its supply contracts, the quality of itsoffer, including risk management and transport and storagecontracts, pricing formulas and commercial options that aredesigned to suit customers’ needs, and a multi-countryapproach.

In order to increase exposure to the retail segment,management plans to expand its customer base by almost 30% in thenext four years, strengthening its position in this segment inparticular in Italy, where the Company added 500 thousand newcontracts, through its distinctive dual fuel offer (gas andelectricity) and innovative sales channels. The recentacquisitions of Altergaz in France and Nuon in Belgium areexpected to contribute to our growth strategy in the retailsegment in Europe where Eni can count on a resilient customerbase, highly complementary to its operations in the businesssegment. Looking forward, management intends to continue growingin the European retail segment, using our valuable experiencegained in the Italian retail market, our high quality service andcustomer care, and our multi-channel sales platform.

 

> 
***Supply of natural gas***

In 2011, Eni’s consolidated subsidiaries supplied 83.38BCM of natural gas, representing an increase of 0.89 BCM, or 1.1%from 2010.

Gas volumes supplied outside Italy (76.16 BCM fromconsolidated companies), imported to Italy or sold outside Italy,represented approximately 90% of total supplies, and showed anincrease of 0.96 BCM, or 1.3%, from 2010. Higher volumes werepurchased from Russia (up 6.71 BCM), particularly to replace thedisruption of Libyan gas supplies (which were down 7.04 BCM) andto supply volumes directed to Turkey (up 2.91 BCM) as aconsequence of increased off-takes by Botas.

Supplies in Italy (7.22 BCM) were substantially stable alsodue to higher domestic production that offset the decline ofmature fields.

In 2011, main gas volumes from equity production derived from:(i) Italian gas fields (6.7 BCM); (ii) certain Eni fields locatedin the British and Norwegian sections of the North Sea (2.4 BCM);(iii) the United States (2.2 BCM); and (iv) other European areas(Croatia with 0.3 BCM). Supplies from equity production fellsharply at the Wafa and Bahr Essalam fields (to 0.6 BCM) in Libyadue to the conflict in the country; in 2010 these two fieldssupplied 2.5 BCM net to Eni.

Considering also direct sales of the Exploration &Production segment 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.

In 2011, withdrawals from storage deposits amounted to 1.79BCM compared to volumes input to storage deposits of 0.20 BCM in2010.

 

 

 

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

| **Natural        gas supply** |   | **2009** |   | **2010** |   | **2011** |
|-------------------------------|--------|----------|--------|----------|--------|----------|
|                          |   |          |   |          |   |          |

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

| **Italy**                                                        |   | **6.86**   |   |   | **7.29**  |   |   | **7.22**  |   |
|------------------------------------------------------------------|--------|------------|--------|--------|-----------|--------|--------|-----------|--------|
| **Outside        Italy**                                         |   | **81.79**  |   |   | **75.20** |   |   | **76.16** |   |
| *Russia*                                                         |   | *22.02*    |   |   | *14.29*   |   |   | *21.00*   |   |
| *Algeria        (including LNG)*                                 |   | *13.82*    |   |   | *16.23*   |   |   | *13.94*   |   |
| *Libya*                                                          |   | *9.14*     |   |   | *9.36*    |   |   | *2.32*    |   |
| *the        Netherlands*                                         |   | *11.73*    |   |   | *10.16*   |   |   | *11.02*   |   |
| *Norway*                                                         |   | *12.65*    |   |   | *11.48*   |   |   | *12.30*   |   |
| *the        United Kingdom*                                      |   | *3.06*     |   |   | *4.14*    |   |   | *3.57*    |   |
| *Hungary*                                                        |   | *0.63*     |   |   | *0.66*    |   |   | *0.61*    |   |
| *Qatar        (LNG)*                                             |   | *2.91*     |   |   | *2.90*    |   |   | *2.90*    |   |
| *Other supplies of natural gas*                                  |   | *4.49*     |   |   | *4.42*    |   |   | *6.16*    |   |
| *Other        supplies of LNG*                                   |   | *1.34*     |   |   | *1.56*    |   |   | *2.34*    |   |
| **Total supplies of subsidiaries**                               |   | **88.65**  |   |   | **82.49** |   |   | **83.38** |   |
| Withdrawals        from (input to) storage                       |   | 1.25       |   |   | (0.20     | )      |   | 1.79      |   |
| Network losses, measurement differences and        other changes |   | (0.30      | )      |   | (0.11     | )      |   | (0.21     | )      |
| **Volumes        available for sale of Eni’s subsidiaries** |   | **89.60**  |   |   | **82.18** |   |   | **84.96** |   |
| **Volumes available for sale of Eni’s        affiliates**   |   | **7.95**   |   |   | **9.23**  |   |   | **8.94**  |   |
| **E&P        volumes**                                       |   | **6.17**   |   |   | **5.65**  |   |   | **2.86**  |   |
|                                                             |   |            |        |   |           |        |   |           |        |
| **Total volumes available for sale**                             |   | **103.72** |   |   | **97.06** |   |   | **96.76** |   |
|                                                             |   |            |        |   |           |        |   |           |        |

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 17 years and apricing mechanism that indexed to 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.

From the beginning of the slump in the gas European marketlate in 2009, Eni has incurred the take-or-pay clauseaccumulating deferred costs for an amount of euro 2.22 billion(net of limited amounts of volume make-up) and has paid theassociated cash advances amounting to euro 1.76 billion, thedifference being the payable towards gas suppliers outstanding asof the balance sheet date.

Considering ongoing market trends and the Company’soutlook for its sales volumes which are anticipated to grow at amodest pace over the next four years, as well as the benefit ofcontract renegotiations which may temporarily reduce the annualminimum take, management believes that it is likely that in thenext two to three years Eni will fail to fulfill its minimum takeobligations associated with its supply contracts thus triggeringthe take-or-pay clause and the obligation to pay cash advances inrelation to substantial amounts of gas.

However, based on our long-term expectations about arebalancing between gas demand and offer in Europe, ourprojections of sales volumes and unit margins in the next fouryears and beyond we believe that in the long run the Company willbe able to recover the volumes of gas which have been pre-paid upthe balance sheet date and the volumes for which we expect toincur the take-or-pay clause in the next four years due to weakmarket conditions.

This forecast is subject to the risk factors described in Item3 and in our outlook in Item 5.

 

> 
***Sales of natural gas***

In 2011, sales of natural gas were 96.76 BCM, down 0.30 BCM or0.3%. Sales included Eni’s own consumption, Eni’s shareof sales made by equity-accounted entities and E&P sales inEurope and in the Gulf of Mexico.

In Italy, Eni operates in a liberalized market where customersare free to choose their supplier of gas. The Company’scustomer portfolio consists of: (i) approximately 3,000 largecustomers including large industrial clients and

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power generation utilities, directly linked to the nationaland the regional natural gas transport networks; and wholesalers,mainly local selling companies which resell natural gas toresidential customers through low pressure distribution networksand distributors of natural gas for automotive use; and (ii)residential customers amounting to approximately 7.10 million asof the balance sheet date, which included households (alsoreferred to as the retail market), the tertiary sector (mainlycommercial outlets, hospitals, schools and local administrations)and middle-sized enterprises (also referred to as the middlemarket) located in large metropolitan areas and urban areas.

Despite a 6% decline in natural gas demand, sales volumes onthe Italian market were substantially stable, to 34.68 BCM (up0.39 BCM, or 1.1%) due to the positive effect of marketinitiatives that led to higher sales to industrial customers (up0.80 BCM), wholesalers (up 0.32 BCM) and to the power generationsegment (up 0.27 BCM). Sales on the Italian exchange for gas andspot markets increased by 0.59 BCM. Lower sales volumes to theresidential segment (down 0.72 BCM) reflected the impact ofunusual weather conditions on seasonal sales and competitivepressures.

Sales to shippers, who import natural gas to Italy, were downby 5.20 BCM, or 61.6%, due to the disruptions on Libyan suppliesin connection to the disruption in the operations of GreenStreamgas pipeline.

Sales on target markets in Europe of 49.74 BCM showed apositive trend, increasing by 7.9%, except for Benelux (down 2.92BCM) where competitive pressure, in particular in the wholesalerssegment, reduced Eni’s sale portfolio. The main increaseswere recorded in Turkey (up 2.91 BCM), due to increased off-takesby Botas, France (up 0.92 BCM) also due to the consolidation ofAltergaz, UK/Northern Europe (up 0.88 BCM), Germany-Austria (up0.80 BCM) and the Iberian Peninsula (up 0.37 BCM).

Sales to markets outside Europe increased by 0.66 BCM, net ofchanges in consolidation area related to volumes sold in theUnited States that in 2010 was included in E&P sales inEurope and the Gulf of Mexico, due to higher LNG sales inArgentina and Japan, offset in part by lower sales in Brazilfollowing the divestment of Eni’s interest in Gas BrasilianoDistribuidora, a company distributing and marketing natural gasin Brazil.

E&P sales in Europe and in the United States (2.86 BCM)declined by 2.79 BCM due to the above mentioned reasons.

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

| **Natural        gas sales by entities** |   | **2009** |   | **2010** |   | **2011** |
|------------------------------------------|--------|----------|--------|----------|--------|----------|
|                                     |   |          |   |          |   |          |

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

| **Total sales of subsidiaries**                                    |   | **89.60**  |   | **82.00** |   | **84.37** |
|--------------------------------------------------------------------|--------|------------|--------|-----------|--------|-----------|
| *Italy        (including own consumption)*                         |   | *40.04*    |   | *34.23*   |   | *34.60*   |
| *Rest of Europe*                                                   |   | *48.65*    |   | *46.74*   |   | *45.16*   |
| *Outside        Europe*                                            |   | *0.91*     |   | *1.03*    |   | *4.61*    |
| **Total sales of Eni’s affiliates**        (Eni’s share) |   | **7.95**   |   | **9.41**  |   | **9.53**  |
| *Italy*                                                            |   | *-*        |   | *0.06*    |   | *0.08*    |
| *Rest of Europe*                                                   |   | *6.80*     |   | *7.78*    |   | *7.82*    |
| *Outside        Europe*                                            |   | *1.15*     |   | *1.57*    |   | *1.63*    |
| **Total sales of G&P**                                         |   | **97.55**  |   | **91.41** |   | **93.90** |
| E&P in        Europe and in the Gulf of Mexico (a)             |   | 6.17       |   | 5.65      |   | 2.86      |
| **Worldwide gas sales**                                            |   | **103.72** |   | **97.06** |   | **96.76** |
|                                                               |   |            |   |           |   |           |

----

| (a) |   | E&P sales        include volumes marketed by the Exploration &        Production segment in Europe (2.57, 2.33 and 2.29 BCM in        2009, 2010 and 2011, respectively) and in the Gulf of        Mexico (3.60, 3.32 and 0.57 BCM in 2009, 2010 and 2011,        respectively). |
|-----|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

 

 

 

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| **Natural        gas sales by market** |   | **2009** |   | **2010** |   | **2011** |
|----------------------------------------|--------|----------|--------|----------|--------|----------|
|                                   |   |          |   |          |   |          |

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

| **ITALY**                                       |   | **40.04**  |   | **34.29** |   | **34.68** |
|-------------------------------------------------|--------|------------|--------|-----------|--------|-----------|
| Wholesalers                                     |   | 5.92       |   | 4.84      |   | 5.16      |
| Gas release                                     |   | 1.30       |   | 0.68      |   |      |
| Italian        gas exchange and spot markets    |   | 2.37       |   | 4.65      |   | 5.24      |
| Industries                                      |   | 7.58       |   | 6.41      |   | 7.21      |
| Medium-sized        enterprises and services    |   | 1.08       |   | 1.09      |   | 0.88      |
| Power generation                                |   | 9.68       |   | 4.04      |   | 4.31      |
| Residential                                     |   | 6.30       |   | 6.39      |   | 5.67      |
| Own consumption                                 |   | 5.81       |   | 6.19      |   | 6.21      |
| **INTERNATIONAL        SALES**                  |   | **63.68**  |   | **62.77** |   | **62.08** |
| **Rest of Europe**                              |   | **55.45**  |   | **54.52** |   | **52.98** |
| Importers        in Italy                       |   | 10.48      |   | 8.44      |   | 3.24      |
| European markets                                |   | 44.97      |   | 46.08     |   | 49.74     |
| *Iberian        Peninsula*                      |   | *6.81*     |   | *7.11*    |   | *7.48*    |
| *Germany-Austria*                               |   | *5.36*     |   | *5.67*    |   | *6.47*    |
| *Benelux*                                       |   | *15.72*    |   | *14.87*   |   | *11.95*   |
| *Hungary*                                       |   | *2.58*     |   | *2.36*    |   | *2.24*    |
| *UK-Northern        Europe*                     |   | *4.31*     |   | *5.22*    |   | *6.10*    |
| *Turkey*                                        |   | *4.79*     |   | *3.95*    |   | *6.86*    |
| *France*                                        |   | *4.91*     |   | *6.09*    |   | *7.01*    |
| *Other*                                         |   | *0.49*     |   | *0.81*    |   | *1.63*    |
| **Extra        European markets**               |   | **2.06**   |   | **2.60**  |   | **6.24**  |
| **E&P in Europe and in the Gulf of Mexico** |   | **6.17**   |   | **5.65**  |   | **2.86**  |
| **WORLDWIDE        GAS SALES**                  |   | **103.72** |   | **97.06** |   | **96.76** |
|                                            |   |            |   |           |   |           |

> 
***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 and its significant exposure to spotmarkets in Western Europe. In 2011, sales in Benelux were mainlydirected to industrial companies, wholesalers and powergeneration and amounted to 11.95 BCM (14.87 BCM in 2010), down by2.92 BCM, or 19.6%, due to rising competitive pressure, inparticular in the wholesalers segment. In the next four years,the Company plans to grow sales in Benelux also leveraging onexpected synergies deriving from the integration of recentlyacquired Nuon Belgium NV and Nuon Power Generation Wallon NV, twocompanies marketing gas and electricity mainly to residential andprofessional customers in Belgium.

*France.* Eni sells natural gas to industrial clients,wholesalers and power generation as well as to the retail andmiddle market segments. Eni is present in the French marketthrough its direct commercial activities and through itssubsidiary. Furthermore, Eni holds a 34% interest in Gaz deBordeaux SAS (with a 17% direct interest and a further 17% heldby Altergaz) which is engaged in selling natural gas in theMunicipality of Bordeaux. Management plans to expand sales inFrance over the plan period growing volumes supplied to thebusiness segments and increasing retail customers leveraging onthe Altergaz integration. In 2011, sales in France amounted to7.01 BCM (6.09 BCM in 2010), an increase of 0.92 BCM, or 15.1%,from a year ago.

*Germany-Austria.* Eni is present in the German naturalgas market through its associate GVS (GasversorgungSüddeutschland GmbH - Eni 50%) which sold approximately 4.68 BCMin 2011 (2.34 BCM being Eni’s share), and through a directmarketing structure which sold in 2011 approximately 3.23 BCM inGermany and 1.34 BCM in Austria. Management plans to drive growthin direct sales leveraging on the quality of its commercialoffer, a projected expansion in its business customer base andthe enhancement of direct presence on the market. In 2011, salesin the Germany-Austria market amounted to 6.47 BCM, an increaseof 0.80 BCM, or 14.1%, from a year ago.

*Iberian Peninsula*

*Portugal.*Eni operates on the Portuguese market throughits affiliate Galp Energia (Eni’s interest 33.34%) whichsold approximately 5.49 BCM in 2011 (1.83 BCM being Eni’sshare).

*Spain.* Eni operates in the Spanish gas market through adirect marketing structure that markets its portfolio of LNG andUnión Fenosa Gas (UFG) (Eni’s interest 50%) which mainlysupplies natural gas to industrial clients, wholesalers and powergeneration utilities. In 2011, UFG gas sales in Europe amountedto 4.88 BCM (2.44 BCM Eni’s 

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share). UFG holds an 80% interest in the Damietta liquefactionplant, on the Egyptian coast (see below), and a 7.36% interest ina liquefaction plant in Oman. In addition, it holds interests inthe Sagunto (Valencia) and El Ferrol (Galicia) re-gasificationplants (42.5% and 18.9%, respectively). In 2011, Eni sales inSpain amounted to 5.79 BCM representing a slight increase from ayear ago. In 2011, total sales in the Iberian Peninsula amountedto 7.48 BCM, an increase of 0.37 BCM, or 5.2%, from a year ago.

*Turkey.* Eni sells gas supplied from Russia andtransported via the Blue Stream pipeline. In 2011, sales amountedto 6.86 BCM, an increase of 2.91 BCM, or 73.7% from a year ago.

*UK-Northern Europe.* Eni through its subsidiary NorthSea Gas & Power (Eni UK Ltd) markets in the UK the equity gasproduced at Eni’s fields in the North Sea and operates inthe main continental natural gas hubs (NBP, Zeebrugge, TTF). In2011, sales amounted to 6.10 BCM, an increase of 16.9% from ayear ago.

*Deborah Gas Storage Project in the Hewett area, UK.*Enihas progressed in developing the Gas Storage Project on theDeborah field within the Hewett area located in the Southern GasBasin in the North Sea, near the Bacton terminal, UK. The DeborahGas Storage Project is designed to provide the UK and NorthWestern Europe markets with 4.6 BCM of working gas. Over the lasttwo years significant progress has been made by completing theFront End Engineering Design (“FEED”), obtaining mostof the necessary approvals including the agreement with The CrownEstate, the Gas Storage Licence from the Department of Energy andClimate Change (“DECC”) and relevant permits from theNorth Norfolk District Counsel on the Bacton terminal, securingcertain long-term gas storage capacity under the CapacityAllocation Process and having in-depth discussions with potentialco-investors. In addition, recently the UK Government expressed aCountry strategic need to improve gas storage facilities in orderto better manage flex gas as a necessary back up for renewablepower generation. Thus, Eni together with other gas storagedevelopers is taking discussions with UK authorities toinvestigate any capacity mechanism that can facilitate thesanction of gas storage projects. FID on the project will betaken when Eni get a better clarity on ongoing discussion withpotential co-investors and the UK governmental authorities.

 

> 
**The LNG Business**

Eni is present in all phases of the LNG business: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 been deeply impactedby the economic downturn and oversupply affecting the Europeangas market, as well as by structural modifications in the U.S.market where large availability of gas from unconventionalsources have reduced the country’s dependence on gas importsvia LNG.

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.

*United States*

*Cameron.*The Cameron LNG terminal is situated 18 milesfrom the Gulf of Mexico along the Calcasieu Channel in Hackberry,Louisiana. The facility where Eni owns a capacity entitlement totreat LNG commenced operations in the third quarter of 2009. Inconsideration of a changed demand outlook, on March 1, 2010, Enirenegotiated certain terms of the contract with U.S. companyCameron LNG, relating to the farming out of a share ofre-gasification capacity of the Cameron terminal. The newagreement provides that Eni will be entitled to a daily send-outof 572,000 mmbtu (approximately 5.7 BCM/y) and a dedicatedstorage capacity of 160 KCM, giving Eni more flexibility inmanaging 

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seasonal swings in gas demand. Furthermore, keeping account ofthe current oversupply of the U.S. gas market, the Brass project(West Africa) for developing gas reserves to fuel the Cameronplant has been rescheduled with start-up in 2017.

*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 contractwith Gulf LNG to buy 5.8 BCM/y of the re-gasification capacity ofthe plant under construction near Pascagoula in Mississippi. Thestart-up of the re-gasification facility commenced in the fourthquarter of 2011, while the upstream project in Angola has yet tobe started up.

At the same time Eni USA Gas Marketing Llc entered a 20-yearcontract for the purchase of approximately 0.9 BCM/y ofre-gasified gas downstream the terminal owned by Angola SupplyServices, a company whose partners also own Angola LNG.

| **LNG        sales** |   | **2009** |   | **2010** |   | **2011** |
|----------------------|--------|----------|--------|----------|--------|----------|
|                 |   |          |   |          |   |          |

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

| **G&P sales**                           |   | **9.8**  |   | **11.2** |   | **11.8** |
|---------------------------------------------|--------|----------|--------|----------|--------|----------|
|                                        |   |          |   |          |   |          |
| Italy                                       |   | 0.1      |   | 0.2      |   |     |
| Rest of Europe                              |   | 8.9      |   | 9.8      |   | 9.8      |
| Extra        European markets               |   | 0.8      |   | 1.2      |   | 2.0      |
| **E&P sales**                           |   | **3.1**  |   | **3.8**  |   | **3.9**  |
|                                        |   |          |   |          |   |          |
| Liquefaction        plants:                 |   |     |   |     |   |     |
| - Bontang (Indonesia)                       |   | 0.8      |   | 0.7      |   | 0.6      |
| - Point        Fortin (Trinidad and Tobago) |   | 0.5      |   | 0.6      |   | 0.4      |
| - Bonny (Nigeria)                           |   | 1.4      |   | 2.2      |   | 2.5      |
| - Darwin        (Australia)                 |   | 0.4      |   | 0.3      |   | 0.4      |
|                                        |   |          |   |          |   |          |
|                                        |   | **12.9** |   | **15.0** |   | **15.7** |
|                                        |   |          |   |          |   |          |

> 
 

**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 and power.

In 2011, the program for upgrading and improving flexibilityof the combined cycle power plants progressed in accordance withthe Company’s developing plans.

In 2011, electricity sales (40.28 TWh) increased by 1.9% todue to growth in the client base and higher volumes traded on theItalian power exchange (up 1.54 TWh) despite weak domesticdemand, and were directed to the free market (66%), the Italianpower exchange (22%), industrial sites (8%) and others (4%).

In the next 12-24 months, management believes that the priceof electricity will be just above the price of fuel gas in powergeneration plus the environmental costs associated with thepurchase of green certificates relating to CO2emissions. Consequently, the clean spark spread (the sparkspread, i.e. the gross margin of gas-fired power plant fromselling a unit of electricity, minus the CO2 emissioncosts) is expected to be almost zero.

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| **Power        availability** |   | **2009** |   | **2010** |   | **2011** |
|-------------------------------|--------|----------|--------|----------|--------|----------|
|                          |   |          |   |          |   |          |

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

| Power generation sold                   |   | 24.09     |   | 25.63     |   | 25.23     |
|-----------------------------------------|--------|-----------|--------|-----------|--------|-----------|
| Trading of        electricity (a)       |   | 9.87      |   | 13.91     |   | 15.05     |
|                                    |   |           |   |           |   |           |
|                                    |   | **33.96** |   | **39.54** |   | **40.28** |
|                                    |   |           |   |           |   |           |
| **Power        sales by market**        |   |      |   |      |   |      |
| Free market                             |   | 24.74     |   | 27.48     |   | 26.87     |
| Italian        Exchange for electricity |   | 4.70      |   | 7.13      |   | 8.67      |
| Industrial plants                       |   | 2.92      |   | 3.21      |   | 3.23      |
| Other (a)                               |   | 1.60      |   | 1.72      |   | 1.51      |
|                                    |   |           |   |           |   |           |
|                                    |   | **33.96** |   | **39.54** |   | **40.28** |
|                                    |   |           |   |           |   |           |

----

| (a) |   | Include        positive and negative imbalances. |
|-----|--------|--------------------------------------------------|

> 
**Power Generation**

Eni’s power generation sites are located in FerreraErbognone, Ravenna, Livorno, Taranto, Mantova, Brindisi, Ferraraand in Bolgiano.

In 2011, power production was 25.23 TWh, down 0.40 TWh, or1.6% from 2010, mainly due to lower production at the Brindisiplant, offset in part by increases at Ravenna and Ferrara plants.

As of December 31, 2011, installed operational capacity was5.3 GW (5.3 GW in 2010).

Power availability in 2011 was supported by the growth inelectricity trading activities (up 1.14 TWh, or 8.2%) 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 plant, 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 Taranto (Eni100%), Ferrara (Eni 51%), and Bolgiano (Eni 100%) plants.

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), ensuring a high level of efficiency andlow environmental impact. Moreover, most of the plants employCombined Heat and Power (CHP) technologies which contribute toreduce the emission of carbon dioxide by approximately 5mmtonnes, on an energy production of 26.5 TWh. CHP technology hasbeen acknowledged by the National Law (Legislative Decree No.79/1999) as a production technology that, being highly efficientand allowing a reduction in primary fuel consumption, is notsubject to the current Renewable Energy Sources (“RES”)support scheme (“green certificates”) and entailspriority on the national dispatching network and the award of“green certificates” that can be traded againstemission allowances. The afore mentioned scheme consists of anobligation on part of power producers to input a certainpercentage of energy from renewable sources in proportion to theenergy produced or, as an alternate measure, to purchase greencertificates which are in turn granted to RES producers inproportion to the “green energy” produced. As of now,CHP production are exempted from the obligation but a stricterinterpretation of the legal framework that currently defines CHP(regarding, in particular, the coexistence of a differentdefinition for “high efficiency CHP”) might sharplyreduce the amount of energy not subject to the green certificatescheme. However, the recently enacted Legislative Decree No.28/2011 provides for a phase-out of the green certificatesscheme, via a gradual reduction of the share of electricityproduction currently covered by green certificates, until it iscompletely cancelled in 2015, and a rebalance of the incentivemechanism in favor of feed-in tariffs for RES while theMinisterial Decree of September 5, 2011 defined a new supportscheme for new high-efficiency CHP projects, that will beentitled to receive an amount of Energy Efficiency Titles(“white certificates”). However, a safeguard clausewill entitle most of Eni’s plants to receive whitecertificates in a measure equivalent to 30% of the amount awardedto a new project. In spite of these incentives, we believe thatin the next four years our expenses to comply with environmentalregulation will trend higher as a result of stricter rules thatwill apply to the award of emission allowances in the EU emissiontrading mechanism, causing the Company to increase its purchasesof allowance on the free market.

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

| **Site** |   | **Total installed capacity        in 2011**(1)(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                 |
| Nettuno                  |   | 2         |   | Power station |   | photovoltaic energy |
|                     |   |           |   |               |   |                     |
|                     |   | **5,306** |   |          |   |                |
|                     |   |           |   |          |   |                |

----

| (1) |   | Capacity        available after completion of dismantling of obsolete        plants. |
|-----|--------|--------------------------------------------------------------------------------------|

 

| **Power        Generation** |   | **2009** |   | **2010** |   | **2011** |
|-----------------------------|--------|----------|--------|----------|--------|----------|
|                        |   |          |   |          |   |          |

| **Purchases**                            |   |      |   |    |   |    |   |    |
|------------------------------------------|--------|-----------|--------|---------|--------|---------|--------|---------|
| Natural        gas                       |   | (mmCM)    |   | 4,790   |   | 5,154   |   | 5,008   |
| Other fuels                              |   | (ktoe)    |   | 569     |   | 547     |   | 528     |
| *- of        which steam cracking*       |   |      |   | *82*    |   | *103*   |   | *99*    |
| **Production**                           |   |      |   |    |   |    |   |    |
| Electricity                              |   | (TWh)     |   | 24.09   |   | 25.63   |   | 25.23   |
| Steam                                    |   | (ktonnes) |   | 10,048  |   | 10,983  |   | 14,401  |
| **Installed        generation capacity** |   | (GW)      |   | **5.3** |   | **5.3** |   | **5.3** |
|                                     |   |      |   |         |   |         |   |         |

> 
**Infrastructures**

Eni holds 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).

In Italy, Eni operates the most of the national transportnetwork, a number of gas underground storage deposits and relatedfacilities, a re-gasification plant in Panigaglia and can rely onan extended system of local distribution networks. Eni iscurrently implementing plans for expanding and upgrading itsnational transport and distribution networks and storagecapacity.

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The main assets of Eni transport activities in Italy andoutside Italy are described in the table below.

**Transport infrastructure**

| **Route** |   | **Lines**   |   | **Length of main line** |   | **Diameter** |   | **Transport         capacity**(1) |   | **Pressure min-max** |   | **Compression stations** |
|-----------|--------|-------------|--------|-------------------------|--------|--------------|--------|-----------------------------------|--------|----------------------|--------|--------------------------|
|      |   |             |   |                         |   |              |   |                                   |   |                      |   |                          |
| **ITALY** |   | **(units)** |   | **(km)**                |   | **(inch)**   |   | **(mmCM/d)**                      |   | **(bar)**            |   | **(No.)**                |

| Mazara del Vallo-Minerbio        (under upgrading) |   | 2/3 |   | 1,480 |   | 48/42 -        48   |   | 105.0 |   | 75    |   | 7 |
|----------------------------------------------------|--------|-----|--------|-------|--------|---------------------|--------|-------|--------|-------|--------|---|
| Tarvisio-Sergnano-Minerbio                         |   | 3   |   | 434   |   | 42/36, 34 and 48/56 |   | 118.8 |   | 58/75 |   | 3 |
| Passo Gries-Mortara                                |   | 1/2 |   | 177   |   | 48/34               |   | 64.8  |   | 55/75 |   | 1 |

| i                               | i      | i           | i      | i                | i      | i            | i      | i                         | i      | i                       | i      | i                        |
|---------------------------------|--------|-------------|--------|------------------|--------|--------------|--------|---------------------------|--------|-------------------------|--------|--------------------------|
|                            |   | **Lines**   |   | **Total length** |   | **Diameter** |   | **Transport capacity**(3) |   | **Transit capacity**(4) |   | **Compression stations** |
|                            |   |             |   |                  |   |              |   |                           |   |                         |   |                          |
| **OUTSIDE        ITALY******(2) |   | **(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 | Transport        capacity refers to the capacity at the entry point        connected to the import pipelines.                                                                                                                                                                    |
|-----|---|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| (2) | i | In 2011, Eni        finalized the divestment of its interests in importing        pipelines of natural gas from Northern Europe (TENP and        Transitgas) and Russia (TAG) as part of the agreements        signed on September 29, 2010 with the European        Commission. |
| (3) | i | Includes both        transit capacity and volumes of natural gas destined to        local markets and withdrawn at various points along the        pipeline.                                                                                                                     |
| (4) | i | The maximum        volume of natural gas which is input at various entry        points along the pipeline and transported to the next        pipeline.                                                                                                                           |

> 
 

***International Transport Activities***

Eni owns capacity entitlements in an extensive network ofinternational high pressure pipelines enabling the Company toimport natural gas produced in Russia, Algeria, the North Sea,including the Netherlands and Norway, and Libya to Italy. TheCompany participates to both entities which operate the pipelinesand entities which manage transport rights. For financialreporting purposes, such entities are either fully-consolidatedor equity-accounted depending on the Company’s interest oragreements with other shareholders.

The structure of the Company’s interests in thoseentities has significantly changed in 2011 following thedivestment of Eni’s interests in pipelines importing naturalgas from Northern Europe (TENP and Transitgas) and Russia (TAG)and related carrier companies, as part of the agreements signedon September 29, 2010 with the European Commission to settle anantitrust proceeding related to alleged anti-competitive behaviorin the natural gas market.

In light of the strategic importance of the Austrian TAGpipeline to the supply of the Italian system, which transportsgas from Russia to Italy, Eni divested its stake to an entitycontrolled by the Italian State. The divestments will not affectEni’s contractual gas transport rights.

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 Company, 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 of 8BCM/y (expandable to 11 BCM/y) and crosses underwater in theMediterranean Sea from Mellitah on the Libyan coast to Gela inSicily, the point of entry into the Italian natural gas transportsystem. From February 22, 2011 to October 2011, in considerationof the crisis in Libya, supplies of natural gas through theGreenStream pipeline have been suspended. Operations restartedlate in October 2011.

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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 the offshore section in the Black Sea ofa project to build a new import route to Europe to market gasproduced in Russia.

The South Stream pipeline will provide transport capacity ofup to 63 BCM/y and is expected to be composed by two sections:(i) an offshore section crossing the Black Sea from the Russiancoast at Beregovaya (the same starting point of the Blue Streampipeline) to the Bulgarian coast at Varna; and (ii) an onshoresection crossing Bulgaria for which two options are currentlybeing evaluated: one pointing North West and another one pointingSouth West. The second option envisages crossing Greece and theAdriatic Sea before linking to the Italian network.

In September 2011, Eni and Gazprom within their strategicpartnership signed a series of agreements in areas of commoninterest including the development of the offshore section in theBlack Sea of the South Stream project through the definition ofterms for the participation to the project of gas operatorsWintershall and EDF, each with a 15% stake. Gazprom and Eni willhold 50% and 20% interests, respectively.

Final Investment Decision (FID) expected by November 2012.

 

> 
***Regulated businesses in Italy***

*Reorganization of Regulated businesses in Italy.*Implementing the so-called Third Energy Package (for furtherdetails see “Regulation of Eni’s Businesses”below), on December 5, 2011 with effect from January 1, 2012,“Snam Rete Gas SpA” changed its company name in“Snam SpA”. At the same date Snam SpA transferred the“transportation, dispatching and metering of naturalgas” business unit to a new company that from January 1,2012, took the name of Snam Rete Gas SpA. The reorganization ofRegulated businesses in Italy based on Snam SpA as holding the100% interest in the four companies operating the transport,re-gasification, storage and distribution of natural gas, intendsto build an organizational model meeting the new legal provisionson the unbundling of transport activities as provided by Italianlaws implementing European Directive No. 2009/73/EC. The AEEG(the Italian Authority for Electricity and Gas) is currentlyassessing the conformity to the law of the model adopted by SnamSpA.

Eni, through Snam SpA (Eni’s interest being 52.53%),which is listed on the Italian Stock Exchange, operates most ofthe Italian natural gas transport network, a re-gasificationterminal located in Panigaglia, an extensive local distributionnetwork and gas underground storage deposits and relatedfacilities. 

| In the next four years, Snam plans to        make capital expenditures in the regulated businesses in        the amount of approximately euro 6.7 billion of which 1.4        billion will be spent in 2012. These investments will be        aimed at improving the security and flexibility of the        gas system, through: |
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (i)  |   | increasing gas transport        capacity by extending the gas network by about 1,000        kilometers from the approximately 32,000 kilometers as at        2011 and by increasing the installed power of the        compression stations by around 4% versus 2011; and                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |
|------|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| (ii) |   | improving the overall        flexibility and security of the storage system through an        increase in both the modulation and peak capacity and        providing storage services to the industrial market, in        line with the provisions of the Legislative Decree No.        130/2010. Capital expenditures in the storage business        are expected to deliver a 30% increase in the modulation        capacity (from 10 billion standard cubic meters in 2011        to around 13 billion standard cubic meters by 2015) and a        14% increase in the peak capacity in the period; and        (iii) operating efficiency and improvement of quality of        gas distribution service. The projects included in the        plan should lead to a rise in the number of current users        reaching approximately 6.4 million in 2015, an increase        of around 8% compared to the 5.9 million redelivery        points installed as at 2010. |

With the execution of the 4-year investment plan, the value ofthe Company’s Regulated Asset Base (RAB) is estimated toincrease by an average of 4% per year through 2015, on the basisof the current regulatory framework.

It is also expected that the incentivized portion of the RABwill reach 40% in 2015 as compared to 26% in 2011.

Eni, through Snam, operates the re-gasification terminaloperating in Italy at Panigaglia (Liguria). At full capacity,this terminal can re-gasify 17,500 CM of LNG per day and input3.5 BCM/y into the Italian transport network.

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> 
*Italian Transport Activity*

Under Legislative Decree No. 164/2000 concerning the openingup of the natural gas market in Italy, transport andre-gasification activities are regulated by the Authority forElectricity and Gas which determines the methods for calculatingtariffs and fixing the return on capital employed. This makestransport a low risk business capable of delivering stablereturns.

| Eni’s network extends for 32,010        kilometers and comprises: (i) a national transport        network extending over 9,080 kilometers, made up of high        pressure trunk-lines mainly with a large diameter, which        carry natural gas from the entry points to the system        – import lines, storage sites and main Italian        natural gas fields – to the linking points with        regional transport networks. The national network        includes also some interregional lines reaching important        markets; and (ii) a regional transport network extending        over 22,930 kilometers, made up of smaller lines and        allowing the transport of natural gas to large industrial        complexes, power stations and local distribution        companies in the various local areas served. The major        pipelines interconnected with import trunk-lines that are        part of Eni’s national network are: |
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| • |   | for natural gas        imported from Algeria (Mazara del Vallo delivery point):                      |
|--------|--------|------------------------------------------------------------------------------------------------------|
|   |   | -                                                                                                    |   | two lines with a 48/42-inch        diameters, each approximately 1,500-kilometer long,        including the smaller pipes that cross underwater the        Messina Strait, connect Mazara del Vallo on the Southern        coast of Sicily where they link with the TMPC pipeline        carrying Algerian gas, to Minerbio (near Bologna). This        pipeline is undergoing upgrades with the laying of a        third line with a 48-inch diameter and 583-kilometer long        (of these 525 are already operating). At the Mazara del        Vallo entry point the available transport capacity, which        is measured at the beginning of each thermal year        starting on October 1, is approximately 105 mmCM/d; |
| • |   | for natural gas        imported from Libya (Gela delivery point):                                    |
|   |   | -                                                                                                    |   | a 36-inch diameter line and        67-kilometer long linking Gela, the entry point of the        GreenStream underwater pipeline, to the national network        near Enna along the trunk-line transporting gas coming        from Algeria. Transport capacity at the Gela entry point        is approximately 38 mmCM/d; |
| • |   | for natural gas        imported from Russia (Tarvisio and Gorizia delivery        points):           |
|   |   | -                                                                                                    |   | two lines with 42/36/34-inch        diameters extending for a total length of approximately        900 kilometers connecting the Austrian network at        Tarvisio. This facility crosses the Po Valley reaching        Sergnano (near Cremona) and Minerbio. This pipeline is        undergoing upgrades by the laying of a third        264-kilometer long line with a diameter from 48 to 56        inches. The pipeline transport capacity at the Tarvisio        entry point amounts to approximately 119 mmCM/d plus the        transport capacity available at the Gorizia entry point        of approximately 5 mmCM/d; |
| • |   | for natural gas        imported from the Netherlands and Norway (Passo Gries        delivery point): |
|   |   | -                                                                                                    |   | one line, with a 48-inch        diameter and 177-kilometer long that extends from the        Italian border at Passo Gries (Verbania), to the node of        Mortara, in the Po Valley. The pipeline transport        capacity at the Passo Gries entry point amounts to 64        mmCM/d; |
| • |   | for natural gas        coming from the Panigaglia LNG terminal:                                      |

|   |   | -                                                                    |   | one line, with a 30-inch        diameter and 170-kilometer long that links the Panigaglia        terminal to the national transport network near Parma.        The pipeline transport capacity at the Panigaglia entry        point amounts to 13 mmCM/d; and                                                                         |
|--------|--------|----------------------------------------------------------------------|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| • |   | for natural gas        coming from the Rovigo Adriatic LNG terminal: |
|   |   | -                                                                    |   | a 36-inch diameter        connection at the Minerbio junction with the        Cavarzere-Minerbio pipeline belonging to Edison        Stoccaggio SpA, which receives gas from the LNG terminal        located offshore of Porto Viro. The pipeline transport        capacity at the Cavarzere entry point amounts to 26        mmCM/d. |

Eni’s system is completed by: (i) eleven compressorstations with a total power of 883.7 MW used to increase gaspressure in pipelines to the level required for its flow; and(ii) four marine terminals linking underwater pipelines with theon-land network at Mazara del Vallo and Messina in Sicily andFavazzina and Palmi in Calabria. The interconnections managed bySnam Rete Gas in the Italian transport network are guaranteed by22 linkage and dispatching nodes and by 568 plant units includingpressure reduction and regulation plants. These plants allow theregulation of the flow of natural gas in the network andguarantee the connection of pipes working at different pressures.

In 2011, volumes of natural gas input in the national grid(78.30 BCM) decreased by 5.01 BCM from 2010 due to decliningdomestic demand. Eni transported 43.18 BCM of natural gas onbehalf of third parties, down 4.68 BCM from 2010, or 9.8%.

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| **Gas        volumes transported**(a) |   | **2009** |   | **2010** |   | **2011** |
|---------------------------------------|--------|----------|--------|----------|--------|----------|
|                                  |   |          |   |          |   |          |

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

| Eni                               |   | 39.58     |   | 35.45     |   | 35.12     |
|-----------------------------------|--------|-----------|--------|-----------|--------|-----------|
| On behalf        of third parties |   | 37.32     |   | 47.87     |   | 43.18     |
|                              |   | **76.90** |   | **83.32** |   | **78.30** |
|                              |   |           |   |           |   |           |

----

| (a)    |   | Includes        amounts destined to domestic storage. |
|--------|--------|-------------------------------------------------------|
|   |   |                                                  |

In 2011, the LNG terminal in Panigaglia (La Spezia)re-gasified 1.89 BCM of natural gas (1.98 BCM in 2010).

*Development of gas infrastructure in Europe.* In January2012, Snam and Fluxys G signed an agreement for the evaluation offuture joint strategies aimed at seizing potential developmentopportunities concerning infrastructures in the gas sector inEurope. The agreement concerns transport, storage andre-gasification of natural gas, by means of projects aimed atstrengthening flexibility and security of supplies of Europeaninfrastructure.

 

> 
***Distribution Activity***

Distribution involves the delivery of natural gas toresidential and commercial customers in urban centers through lowpressure networks. The Company’s subsidiary Italgas andother subsidiaries operate in the distribution activity in Italyserving 1,330 municipalities through a low pressure networkconsisting of approximately 50,300 kilometers of pipelinessupplying 5.9 million customers and distributing 7.64 BCM in2011.

Under Legislative Decree No. 164/2000, distribution activitiesare considered a public service and therefore are regulated bythe Authority for Electricity and Gas which determines themethods for calculating tariffs and fixing the return on capitalemployed. This business, therefore, presents low risk and asteady cash generation profile.

Distribution activities are conducted under concessionagreements whereby local public administrations award the serviceof gas distribution to companies. In accordance with theprovisions of the relevant legislation, tenders for new naturalgas distribution concessions will no longer be issued by eachmunicipality but exclusively by the multi-municipality minimumgeographical areas (known as "Ambiti Territoriali Minimi -ATEM", or local areas).

| **Distribution        activity in Italy** |   | **2009** |   | **2010** |   | **2011** |
|-------------------------------------------|--------|----------|--------|----------|--------|----------|
|                                      |   |          |   |          |   |          |

| Volumes distributed:         |   | (BCM)          |   | 7.73      |   | 8.15      |   | 7.64      |
|------------------------------|--------|----------------|--------|-----------|--------|-----------|--------|-----------|
| - on        behalf to Eni    |   |           |   | 6.26      |   | 6.30      |   | 5.59      |
| - on behalf to third parties |   |           |   | 1.47      |   | 1.85      |   | 2.05      |
| Installed        network     |   | (km)           |   | 49,973    |   | 50,307    |   | 50,301    |
| Active meters                |   | (No. of users) |   | 5,770,672 |   | 5,848,478 |   | 5,896,611 |
| Municipalities        served |   | (No.)          |   | 1,322     |   | 1,330     |   | 1,330     |
|                         |   |           |   |           |   |           |   |           |

 

> 
***Storage***

The storage gas business in Italy is a fully-regulatedactivity which returns are preset by the Italian Authority forElectricity and Gas. Italian regulated storage services areprovided through eight storage fields, based on ten storageconcessions vested by the Ministry of Productive Activities, witha total modulation capacity of 10 BCM.

From the beginning of its operations, Stogit progressivelyincreased the number of customers served and the share ofrevenues from third parties.

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| **Storage** |   | **2009** |   | **2010** |   | **2011** |
|-------------|--------|----------|--------|----------|--------|----------|
|        |   |          |   |          |   |          |

| Total storage capacity:                  |   | (BCM)  |   | 13.9   |   | 14.2   |   | 15.0   |
|------------------------------------------|--------|--------|--------|--------|--------|--------|--------|--------|
| - of which        strategic storage      |   |   |   | 5.0    |   | 5.0    |   | 5.0    |
| - of which available storage             |   |   |   | 8.9    |   | 9.2    |   | 10.0   |
| Available        capacity:               |   |   |   |   |   |   |   |   |
| - share utilized by Eni                  |   | (%)    |   | 30     |   | 29     |   | 22     |
| - share        utilized by third parties |   | (%)    |   | 70     |   | 71     |   | 78     |
| Total offtake from (input to) storage:   |   | (BCM)  |   | 16.52  |   | 15.59  |   | 15.31  |
| - input to        storage                |   |   |   | 7.81   |   | 8.00   |   | 7.78   |
| - offtake from storage                   |   |   |   | 8.71   |   | 7.59   |   | 7.53   |
| Total        customers                   |   | (No.)  |   | 56     |   | 60     |   | 104    |
|                                     |   |   |   |        |   |        |   |        |

In 2011, 7.78 BCM (down 0.22 BCM from 2010) were input to theCompany’s storage deposits, while 7.53 BCM of gas wereoff-taken (slightly lower than one year ago).

In 2011, storage capacity amounted to 15 BCM, of which 5 weredestined to strategic storage.

The share of storage capacity used by third parties was 78%(71% in 2010).

 

> 
***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 product primarily in Italyand in Central-Eastern Europe. In Italy, Eni is the largestrefining and marketing operator in terms of capacity and marketshare. The Company’s operations are fully-integrated throughrefining, supply, trading, logistics and marketing so as tomaximize cost efficiencies and effectiveness of operations.

In 2011, the Refining & Marketing segment recorded sharplylower operating losses than a year ago. The main drivers wereunprofitable refining margins as high costs of oil-basedfeedstock were only partially transferred to product pricespressured by weak demand, high inventories and excess capacity,particularly in the Mediterranean area. In addition, increasedoil prices triggered higher costs of energy utilities which aretypically indexed to it. Finally, narrowing light-heavy crudeprice differentials reduced the cost advantage of Eni’scomplex refineries which are able to maximize the yields ofvaluable products from processing of heavy crudes.

Looking forward, 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. Furthermore, we expect that theongoing liberalization process in Italy will add furthercompetitive pressure and reduce sales opportunities, despite thepossibility to develop non-oil activities. See “Item 3– Risk Factors” and “Regulation” below.

| Against the backdrop of a challenging        market environment and in the midst of an 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 integration of        refinery cycles in order to maximize the value of        internally-produced semi-finished products and other        feedstock; |
|--------|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------|
| • |   | to maximize refinery        flexibility and conversion to take advantage of the        availability of discounted crudes on the market place;                   |
| • |   | to enhance energy efficiency        and plant reliability;                                                                                                      |
| • |   | to rationalize logistic        costs and pursue other cost measures;                                                                                            |

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| • |   | 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: |
|-----------------------------------------------------------------------------|

| • |   | enhancing our lead on the        domestic market;                                                                                               |
|--------|--------|-------------------------------------------------------------------------------------------------------------------------------------------------|
| • |   | 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 2012-2015 period, we plan to make capital expendituresamounting to euro 2.8 billion, in line with the previous plan,carefully selecting capital projects. Management plans to investapproximately euro 2 billion to upgrade the Company’s bestrefineries mainly by completing and starting-up the EST (EniSlurry Technology) project at the Sannazzaro unit which willupgrade the conversion capacity of the refinery, as well asimproving plant efficiency and reliability. Retail activitieswill attract some 25% of the planned expenditure which will bemainly directed to upgrade and modernize our service stations inItaly and in selected European countries, and to complete thenetwork rebranding.

As a result of all these actions, management believes that theRefining & Marketing segment will improve results by euro 550million by 2015 (at the same scenario experienced in 2011) withover euro 400 million coming from the Refining activity.

*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.*

 

> 
**Supply**

In 2011, a total of 59.02 mmtonnes of crude were purchased bythe Refining & Marketing segment (68.25 mmtonnes in 2010), ofwhich 27.64 mmtonnes from Eni’s Exploration & Productionsegment. Volumes amounting to 20.44 mmtonnes were purchased onthe spot market, while 10.94 mmtonnes were purchased underlong-term supply contracts with producing countries.Approximately 27% of crude purchased in 2011 came from Russia,20% from West Africa, 11% from the North Sea, 11% from the MiddleEast, 9% from North Africa, 6% from Italy, and 16% from otherareas. In 2011, some 32.10 mmtonnes of crude purchased weremarketed (down approximately 4.07 mmtonnes, or 11.3%, from 2010).In addition, 4.26 mmtonnes of intermediate products werepurchased (3.05 mmtonnes in 2010) to be used as feedstock inconversion plants and 15.85 mmtonnes of refined products (15.28mmtonnes in 2010) were purchased to be sold on markets outsideItaly (12.45 mmtonnes) and on the domestic market (3.40 mmtonnes)as a complement to available production.

 

> 
**Refining**

As of December 31, 2011, Eni’s refining system had totalrefinery capacity (balanced with conversion capacity) ofapproximately 38.3 mmtonnes (equal to 767 KBBL/d) and aconversion index of 61%. The conversion index is a measure of arefinery complexity. The higher the index, the wider the spectrumof crude qualities and feedstock that a refinery is able toprocess thus enabling it to benefit from the cost economies whichthe Company generally expects to achieve as certain qualities ofcrude (particularly the heavy ones) may trade at discount withreference to the light crude Brent benchmark. Eni’s five100-percent owned refineries have balanced capacity of 28.7mmtonnes (equal to 574 KBBL/d), with a 64% conversion rate. In2011, refinery throughputs in Italy and outside Italy were 31.96mmtonnes.

The Company plans to selectively upgrade its refining systemby increasing complexity and flexibility at its best refineries.The main capital project will be the completion of a newconversion unit at the Sannazzaro refinery designed on the ESTproprietary technology for converting the heavy barrel by almosteliminating residue from conversion processes. The start-up ofthis of this plant is planned to be in the last months of 2012.Higher conversion capacity is expected to enable the Company toextract value from both from conventional crudes as well as toget opportunities from extra-heavy crudes and non-conventionalraw materials.

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The table below sets forth certain statistics regardingEni’s refineries as of December 31, 2011.

**Refining system in 2011**

|   |   | 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** |   | **66** |   | **79**  |
|-------------------------------------------------------------------|--------|--------|--------|-----------|--------|---------|--------|---------|--------|--------|--------|---------|--------|--------|--------|--------|--------|---------|--------|---------|--------|--------|--------|--------|--------|---------|
| Italy                                                             |   |   |   |      |   |    |   |    |   |   |   |    |   |   |   |   |   |    |   |    |   |   |   |   |   |    |
|      Sannazzaro                          |   | 100    |   | 223       |   | 223     |   | 190     |   | 59     |   | 34      |   | 12     |   |   |   | 29      |   | 29      |   |   |   | 80     |   | 94      |
|      Gela                                |   | 100    |   | 129       |   | 129     |   | 100     |   | 142    |   | 35      |   |   |   | 37     |   |    |   |    |   | 46     |   | 50     |   | 65      |
|      Taranto                             |   | 100    |   | 120       |   | 120     |   | 120     |   | 72     |   |    |   | 30     |   |   |   |    |   | 38      |   |   |   | 83     |   | 83      |
|      Livorno                             |   | 100    |   | 106       |   | 106     |   | 84      |   | 11     |   |    |   |   |   |   |   |    |   |    |   |   |   | 67     |   | 85      |
|      Porto Marghera                      |   | 100    |   | 107       |   | 107     |   | 80      |   | 20     |   |    |   |   |   |   |   |    |   | 22      |   |   |   | 38     |   | 51      |
| **Partially        owned refineries** (3)                         |   |   |   | **874**   |   | **245** |   | **193** |   | **51** |   | **167** |   | **25** |   |   |   | **99**  |   | **27**  |   |   |   | **88** |   | **101** |
| Italy                                                             |   |   |   |      |   |    |   |    |   |   |   |    |   |   |   |   |   |    |   |    |   |   |   |   |   |    |
|      Milazzo                             |   | 50     |   | 248       |   | 124     |   | 80      |   | 76     |   | 45      |   | 25     |   |   |   | 32      |   |    |   |   |   | 89     |   | 119     |
| Germany                                                           |   |   |   |      |   |    |   |    |   |   |   |    |   |   |   |   |   |    |   |    |   |   |   |   |   |    |
|      Vohburg/Neustadt        (Bayernoil) |   | 20     |   | 215       |   | 43      |   | 41      |   | 36     |   | 49      |   |   |   |   |   | 43      |   |    |   |   |   | 92     |   | 92      |
|      Schwedt                             |   | 8.33   |   | 231       |   | 19      |   | 19      |   | 42     |   | 49      |   |   |   |   |   |    |   | 27      |   |   |   | 105    |   | 105     |
| Czech        Republic                                             |   |   |   |      |   |    |   |    |   |   |   |    |   |   |   |   |   |    |   |    |   |   |   |   |   |    |
|      Kralupy e Litvinov                  |   | 32.4   |   | 180       |   | 58      |   | 53      |   | 30     |   | 24      |   |   |   |   |   | 24      |   |    |   |   |   | 79     |   | 88      |
| **Total        refineries**                                       |   |   |   | **1,559** |   | **930** |   | **767** |   | **61** |   | **236** |   | **67** |   | **37** |   | **128** |   | **116** |   | **46** |   | **72** |   | **85**  |

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

----

| (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 fivewholly-owned refineries and a 50% interest in the Milazzorefinery in Sicily. Each of Eni’s refineries in Italy haveoperating and strategic features that aim at maximizing the valueassociated to the asset structure, the geographic positioningwith respect to end markets and the integration with Eni’sother activities.

The **Sannazzaro** refinery has balanced refining capacityof 190 KBBL/d and a conversion index of 59%. Management believesthat this unit is among the most efficient refineries in Europe.Located in the Po Valley, it mainly supplies markets inNorth-Western Italy and Switzerland. The high degree offlexibility and conversion capacity of this refinery allows it toprocess a wide range of feedstock. From a logistical standpointthis refinery is located along the route of the Central EuropePipeline, which links the Genoa terminal with French speakingSwitzerland. This refinery contains two primary distillationplants and relevant facilities, including three desulphurizationunits. Conversion is obtained through a fluid catalytic cracker(FCC), two hydrocrackers (HdCK), with the last unit entered intooperations in June 2009, which enable middle distillateconversion and a visbreaking thermal conversion unit with agasification facility using the heavy residue from visbreaking(tar) to produce syn-gas to feed the nearby EniPower power plantat Ferrera Erbognone. Eni is developing a conversion plantemploying the Eni Slurry Technology with a 23 KBBL/d capacity forthe processing of extra heavy crude with high sulphur contentproducing high quality middle distillates, in particular gasoil,and reducing the yield of fuel oil to zero. Start-up of thisfacility is scheduled by the end of 2012. In addition the ShortContact Time-Catalytic Partial Oxidation project is underway forthe production of hydrogen. This reforming technology willexploit a proprietary technology which allows transforminggaseous and liquid hydrocarbons (also derived from bio-mass) intosynthetic gas (carbon monoxide and hydrogen).

The **Taranto** refinery has balanced refining capacity of120 KBBL/d and a conversion index of 72%. This refinery canprocess a wide range of crude and other feedstock. It principallyproduces fuels for automotive use and residential heatingpurposes for the Southern Italian markets. Besides its primarydistillation plants and relevant facilities, including two unitsfor the desulphurization of middle distillates, this refinerycontains a two-stage thermal conversion plant(visbreaking/thermal cracking) and an RHU conversion plant forthe conversion of high sulphur content residues into valuableproducts and catalytic cracking feedstocks. It processes most ofthe oil produced in Eni’s Val d’Agri fields carried toTaranto through the Monte Alpi pipeline (in 2011, a total of 2.5mmtonnes of this oil were processed).

The **Gela** refinery has balanced refining capacity of 100KBBL/d and a conversion index of 142%. This refinery is locatedon the Southern coast of Sicily and is integrated with upstreamoperations as it processes heavy crude produced from Eni’snearby offshore and onshore fields in Sicily. Its high conversionlevel is ensured by an FCC unit with go-finer for feedstocksupgrading and two coking plants enabling conversion of heavyresidues topping or vacuum residues. The power plant of thisrefinery also contains residue and exhaust fume treatment plants(so-called SNOx) which allow full compliance with thetightest environmental standards, removing almost all sulphur andnitrogen composites coming from the coke burning-process. Anupgrade of the Gela refinery is underway by means of arefurbishment of its power plant, substantially renewing pet-cokeboilers, aimed at increasing profitability maximizing synergiesderiving from the integration of refining and power generation.

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The **Livorno** refinery, with balanced refining capacityof 84 KBBL/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 pipeline links with the local harbor andwith the Florence storage sites by means of two pipelinesoptimizes intake, handling and distribution of products.

The **Porto Marghera** refinery, with balanced refiningcapacity of 80 KBBL/d and a conversion index of 20%, thisrefinery supplies mainly markets in North-Eastern Italy andAustria. Besides its primary distillation plants, this refinerycontains a two-stage thermal conversion plant(visbreaking/thermal cracking) designed to increase yields ofvaluable products.

 

> 
***Rest of Europe***

In Germany, Eni holds an 8.3% interest in the Schwedt refineryand a 20% interest in Bayernoil, an integrated pole that includedVohburg and Neustadt refineries. Eni’s refining capacity inGermany amounts to approximately 60 KBBL/d mainly used to supplyEni’s distribution network in Bavaria and Eastern Germany.Eni holds a 32.4% stake in Ceska Rafinerska, which includes tworefineries, Kralupy and Litvinov, in the Czech Republic.Eni’s share of refining capacity amounts to about 53 KBBL/dto support its marketing activities in Eastern Europe. The tablebelow sets forth Eni’s petroleum products availabilityfigures for the periods indicated.

| **Availability        of refined products** |   | **2009** |   | **2010** |   | **2011** |
|---------------------------------------------|--------|----------|--------|----------|--------|----------|
|                                        |   |          |   |          |   |          |

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

| **ITALY**                                                              |   |      |   |   |      |   |   |      |   |
|------------------------------------------------------------------------|--------|-----------|--------|--------|-----------|--------|--------|-----------|--------|
| **Refinery        throughputs**                                        |   |      |   |   |      |   |   |      |   |
| At wholly-owned refineries                                             |   | 24.02     |   |   | 25.70     |   |   | 22.75     |   |
| Less input        on account of third parties                          |   | (0.49     | )      |   | (0.50     | )      |   | (0.49     | )      |
| At affiliates refineries                                               |   | 5.87      |   |   | 4.36      |   |   | 4.74      |   |
| **Refinery        throughputs on own account**                         |   | **29.40** |   |   | **29.56** |   |   | **27.00** |   |
| Consumption and losses                                                 |   | (1.60     | )      |   | (1.69     | )      |   | (1.55     | )      |
| **Products        available for sale**                                 |   | **27.80** |   |   | **27.87** |   |   | **25.45** |   |
| Purchases of refined products and change in        inventories         |   | 3.73      |   |   | 4.24      |   |   | 3.22      |   |
| Products        transferred to operations outside Italy                |   | (3.89     | )      |   | (4.18     | )      |   | (1.77     | )      |
| Consumption for power generation                                       |   | (0.96     | )      |   | (0.92     | )      |   | (0.89     | )      |
| **Sales        of products**                                           |   | **26.68** |   |   | **27.01** |   |   | **26.01** |   |
| **OUTSIDE ITALY**                                                      |   |      |   |   |      |   |   |      |   |
| **Refinery        throughputs on own account**                         |   | **5.15**  |   |   | **5.24**  |   |   | **4.96**  |   |
| Consumption and losses                                                 |   | (0.25     | )      |   | (0.24     | )      |   | (0.23     | )      |
| **Products        available for sale**                                 |   | **4.90**  |   |   | **5.00**  |   |   | **4.73**  |   |
| Purchases of finished products and change in        inventories        |   | 10.12     |   |   | 10.61     |   |   | 12.51     |   |
| Products        transferred from Italian operations                    |   | 3.89      |   |   | 4.18      |   |   | 1.77      |   |
| **Sales of products**                                                  |   | **18.91** |   |   | **19.79** |   |   | **19.01** |   |
|                                                                   |   |           |        |   |           |        |   |           |        |
| **Refinery        throughputs on own account**                         |   | **34.55** |   |   | **34.80** |   |   | **31.96** |   |
| *of which: refinery throughputs of equity        crude on own account* |   | *5.11*    |   |   | *5.02*    |   |   | *6.54*    |   |
|                                                                   |   |           |        |   |           |        |   |           |        |
| **Total        sales of refined products**                             |   | **45.59** |   |   | **46.80** |   |   | **45.02** |   |
| **Crude oil sales**                                                    |   | **36.11** |   |   | **36.17** |   |   | **32.10** |   |
|                                                                   |   |           |        |   |           |        |   |           |        |
| **TOTAL        SALES**                                                 |   | **81.70** |   |   | **82.97** |   |   | **77.12** |   |
|                                                                   |   |           |        |   |           |        |   |           |        |

In 2011, refining throughputs were 31.96 mmtonnes, down 8.2%from 2010. Volumes processed in Italy decreased by approximately2.84 mmtonnes, or 8.7%, from 2010, reflecting the decision to cutthroughputs at the Venice plant in response to an unfavorablemarket scenario and unexpected standstills, in addition toplanned standstill at the other plants. Eni’s refiningthroughputs outside Italy decreased by 5.3% mainly in the CzechRepublic as a consequence of the planned downtime at the Litvinovrefinery. Total throughputs in wholly-owned refineries were 22.75mmtonnes, down by 2.95 mmtonnes (or 11.5%) from 2010, determininga refinery utilization rate of 79%, declining from 2010consistent with the unfavorable scenario. Approximately 22.3% ofvolumes of processed crude was supplied by Eni’s Exploration& Production segment (15.8% in 2010) representing a 6.5percentage point increase from 2010, corresponding to highervolume of approximately 1.52 mmtonnes.

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> 
**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 the sale andstorage of refined products, LPG and crude. Eni’s logisticmodel is organized in a hub structure including five main areas.These hubs monitor and centralize the handling of product flowsaiming to drive forward more efficiency particularly in costcontrol of collection and delivery of orders. Eni holds interestsin five joint entities established by partnering the majorItalian operators. These are located in Vado Ligure-Genova(Petrolig), Arquata Scrivia (Sigemi), Venice (Petroven), Ravenna(Petra) and Trieste (DCT) and aim at reducing logistic cost, andincreasing efficiency. Eni operates in the transport of oil andrefined products: (i) by sea through spot and long-term leasecontracts of tanker ships; and (ii) on land through the ownershipof a pipeline network extending approximately 1,447 kilometers.Secondary distribution to retail and wholesale markets iseffected through third parties who also own their means oftransportation, in some instances with minority participation ofEni.

 

> 
**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** |   | **2009** |   | **2010** |   | **2011** |
|----------------------------------------------------------|--------|----------|--------|----------|--------|----------|
|                                                     |   |          |   |          |   |          |

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

| *Italy*                |   |      |   |      |   |      |
|------------------------|--------|-----------|--------|-----------|--------|-----------|
| Retail                 |   | 9.03      |   | 8.63      |   | 8.36      |
| Wholesale              |   | 9.56      |   | 9.45      |   | 9.36      |
|                   |   | **18.59** |   | **18.08** |   | **17.72** |
| Petrochemicals         |   | 1.33      |   | 1.72      |   | 1.71      |
| Other        sales     |   | 6.76      |   | 7.21      |   | 6.58      |
| **Total**              |   | **26.68** |   | **27.01** |   | **26.01** |
| *Outside        Italy* |   |      |   |      |   |      |
| Retail                 |   | 2.99      |   | 3.10      |   | 3.01      |
| Wholesale              |   | 4.07      |   | 4.30      |   | 4.27      |
|                   |   | **7.06**  |   | **7.40**  |   | **7.28**  |
| Other        sales     |   | 11.85     |   | 12.39     |   | 11.73     |
| **Total**              |   | **18.91** |   | **19.79** |   | **19.01** |
|                   |   |           |   |           |   |           |
| **TOTAL        SALES** |   | **45.59** |   | **46.80** |   | **45.02** |
|                   |   |           |   |           |   |           |

In 2011, sales volumes of refined products (45.02 mmtonnes)decreased of 1.78 mmtonnes from 2010, or 3.8%, mainly due tolower volumes sold in all the relevant segments on the domesticand foreign market.

 

> 
***Retail Sales in Italy***

The re-branding of Eni’s service stations continued in2011. We plan that by the end of 2012 80% of our proprietaryservice stations will have been re-branded to the "enibrand". In the context of weak domestic demand for fuels andrising competition, management plans to preserve the market shareachieved in 2011 (30.5%) by improving service quality, upgradingour outlets, retaining customers by means of innovative marketingactions and segmentation of the offering (in function of paymentmodalities or quality of the product, enhancing the role ofloyalty programs). Great focus will be dedicated to improveefficiency by the automation of part of the network. Finally weexpect a growing contribution to profitability by non-oilactivities as we intend to expand the quality and range ofproducts and services offered to our customers and pursuecontinuing innovation in the layout of our stores located at ourproprietary outlets.

In 2011, retail sales in Italy of 8.36 mmtonnes decreased byapproximately 270 ktonnes, down 3.1% driven by lower consumptionof gasoil and gasoline, in particular in highway service stationrelated to the decline in freight transportation. Averagethroughput related to gasoline and gasoil (2,173 kliters)decreased by approximately 149 kliters from 2010. Eni’sretail market share for 2011 was 30.5%, up 0.1 percentage pointfrom 2010 (30.4%). At December 31, 2011, Eni’s retailnetwork in Italy consisted of 4,701 service stations, 159 morethan at December 31, 2010 (4,542 service stations), resultingfrom the positive balance of acquisitions/releases of leaseconcessions (158 units), the 

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opening of new service stations (14 units), partly offset bythe closing of service stations with low throughput (13 units).In 2011 even sales of premium fuels (fuels of the "eniblu+" line with high performance and lower environmentalimpact), despite the support of strong promotional campaigns wereaffected by the decline in domestic consumption and were lowerthan the previous year. In particular, sales of eni BluDiesel+amounted to approximately 493 mmtonnes (approximately 592mmliters) with a decline of approximately 80 ktonnes from 2010and represented 9% of volumes of gasoil marketed by Eni’sretail network. At December 31, 2011, service stations marketingBluDiesel+ totaled 4,130 units (4,071 at 2010 year end) coveringapproximately 88% of Eni’s network. Retail sales ofBluSuper+ amounted to 62 ktonnes (approximately 83 mmliters),with a slight decrease from 2010 and covered 2.4% of gasolinesales on Eni’s retail network (down 0.2% from a year ago).At December 31, 2011, service stations marketing BluSuper+totaled 2,703 units (2,672 at December 31, 2010), coveringapproximately 57% of Eni’s network.

Eni was also engaged in increasing its supply of non-oilproducts and services in its service stations in Italy bydeveloping a chain of franchised outlets, in particular: (i)"enicafè", a format present in 350 stations after theupgrading of bars and stores in its network; (ii)"enicafè&shop", a format including corners for thesale of food and car-care products in 200 Eni outlets. In 2011Eni also launched a new self-service option h.24 of food,non-food and personal care products by means of the installationof eni branded vending machines in 150 outlets with the aim ofextending this service to over 1,000 outlets in the next twoyears.

 

> 
***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 andEastern Countries (e.g. Czech Republic) leveraging on thesynergies ensured by the proximity of these markets to Eni’sproduction and logistic facilities.

In 2011, retail sales of refined products marketed in the restof Europe (3.01 mmtonnes) were down 2.9% (approximately 90ktonnes) from 2010. Volume additions in Austria, reflecting thepurchase of service stations, were offset by lower sales inGermany due to certain lease contract terminations, in France dueto the rationalization of service stations with lower throughputand in Eastern Europe due to declining demand. At December 31,2011, Eni’s retail network in the rest of Europe consistedof 1,586 units, a decrease of 39 units from December 31, 2010(1,625 service stations). The network evolution was as follows:(i) the closing of 41 low throughput service stations mainly inAustria and France; (ii) the negative balance ofacquisitions/releases of lease concessions (17 units) withnegative changes in particular in Germany, Austria andSwitzerland; (iii) the purchase of 12 service stations, inparticular in France and Germany; and (iv) the opening of 7 newoutlets. Average throughput (2,299 kliters) decreased by 142kliters from 2010 (2,441 kliters).

The key markets of Eni’s presence are: Austria with a9.6% market share, Hungary with 11.9%, Czech Republic with 11.6%,Slovakia with 10.9%, Switzerland with 6.6% and Germany with a3.1% on national base. These market shares were calculated by Enibased on public data of national consumption and Eni’s salesvolumes.

Non-oil activities in the rest of Europe are present in 1,101service stations (eni owned network), of which 321 are in Germanyand 144 in France.

 

> 
***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 2011, sales volumes on wholesale markets in Italy (9.36mmtonnes) were down by approximately 90 ktonnes from 2010, or 1%,mainly reflecting a decline in demand from transports andindustrial customers due to a generalized slowdown and strongcompetitive pressure which affected in particular bunkering andbitumen, but also LPG due to unusual weather conditions. Jet fueland fuel oil sales increased, while gasoil sales dropped starklyin 2011. Eni’s wholesale market share for 2011 averaged28.3%, down 0.9 percentage points from 2010 (29.2%). Supplies offeedstock to the petrochemical industry (1.71 mmtonnes) werebasically in line with 2010 recording a slight decline of 

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10 ktonnes related to lower feedstock supplies due to lowerdemand from industrial customers. Sales on wholesale marketsoutside Italy (3.84 mmtonnes) decreased by 1%, mainly in Hungary,Germany and the Czech Republic, while sales increased in Austria,Switzerland and France. Other sales (18.31 mmtonnes) decreased by1.29 mmtonnes, or 6.6%, mainly due to lower sales volumes to oilcompanies.

Eni also markets jet fuel directly at 49 airports, of which 27are in Italy. In 2011, these sales amounted to 2.1 mmtonnes (ofwhich 1.6 mmtonnes are in Italy). Eni is also active in theinternational market of bunkering, marketing marine fuel mainlyin 120 ports, of which 80 are in Italy. In 2011, marine fuelsales were 1.98 mmtonnes (1.91 mmtonnes in Italy).

 

> 
*LPG*

In Italy, Eni is leader in LPG production, marketing and salewith 601 ktonnes sold for heating and automotive use equal to a18.9% market share. An additional 214 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 2011 amounted to 485 ktonnes ofwhich 384 ktonnes in Ecuador where LPG market share is around37.5%.

 

> 
*Lubricants*

Eni operates seven (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-the-art know-how forthe formulation of products for vehicles (engine oil, specialfluids and transmission oils) and industries (lubricants forhydraulic systems, industrial machinery and metal processing). InItaly, Eni is leader in the manufacture and sale of lubricantbases. Base oils are manufactured primarily at Eni’srefinery in Livorno. Eni also owns one facility for theproduction of additives and solvents in Robassomero. In 2011,retail and wholesale sales in Italy amounted to 100 ktonnes witha 23.6% market share. Eni also sold approximately 4 ktonnes ofspecial products (white oils, transformer oil and anti-freezefluids). Outside Italy sales amounted to approximately 140ktonnes, of these about 60% were registered in Europe (mainlySpain, Germany, Austria and France).

 

> 
*Oxygenates*

Eni, through its subsidiary Ecofuel (Eni’s interest100%), sells approximately 1.7 mmtonnes/y of oxygenates mainlyethers (approximately 5.3% of world demand) and methanol(approximately 0.9% of world demand). About 80% of products aremanufactured in Italy in Eni’s plants in Ravenna, inVenezuela (in joint venture with Pequiven) and Saudi Arabia (injoint venture with Sabic) and the remaining 20% is bought andresold. Eni also distributes bio-ETBE on the Italian market incompliance with the new legislation indicating the minimumcontent of bio-fuels. Bio-ETBE is a kind of MTBE that gained arelevant position in the formulation of gasoline in the EuropeanUnion, due to the fact that it is produced from ethanol fromagricultural crops and qualified as bio-component in the Europeandirective on bio-fuels. Starting from March 1, 2010, Italianregulation on bio-fuels content has been changed from 3% to 3.5%.

Through Bio-ETBE and FAME blending into fossil fuels Enicovered the compliance within 96% in 2011. From January 1, 2012,the compulsory content of bio-fuels increases to 4.5% from 20114%, Eni plans to cover compliance through Bio-ETBE, FAME anddirect blending of ethanol in gasolines in particular in someextents of Sannazzaro refinery inland.

 

> 
***Capital Expenditures***

See "Item 5 – Liquidity and Capital Resources –Capital Expenditures by Segment".

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**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 42.91%), and Saipem’s controlled entities.Saipem boasts a strong competitive position in the market forservices to the oil industry, particularly in executing large,complex EPC contracts for the construction of offshore andonshore facilities and systems to develop hydrocarbons reservesas well as LNG, refining and petrochemicals plants, pipelinelayering and offshore and onshore drilling services. The Companyowes its market position to technological and operational skillswhich we believe are acknowledged in the marketplace due to itscapabilities to operate in frontier areas and complex ecosystems,efficiently and effectively managing large projects, engineeringcompetencies and availability of technologically-advanced vesselsand rigs which have been upgraded in recent years through a largecapital expenditure plan. Management expects to furtherstrengthen Saipem’s competitive position in the medium term,leveraging on its business model articulated across variousmarket sectors combined with a strong competitive position infrontier areas, which are traditionally less exposed to thecyclical nature of this market. In particular, Saipem plans toimplement the following strategic guidelines: (i) to maximizeefficiency in all business areas at the same time maintaining topexecution and security standards, preserve competitive supplycosts, optimize the utilization rate of the fleet, increasestructure flexibility in order to mitigate the effects ofnegative business cycles as well as develop and promote a companyculture that will permit identification and management of risksand business opportunities; (ii) to continue focusing on the morecomplex and difficult projects in the strategic segments ofdeepwater, FPSO, heavy crude and LNG (offshore and onshore, forthe gas monetization) upgrading; (iii) to promote local contentin terms of employment of local contractors and assets instrategic countries where large projects are carried outsupporting the development of delocalized logistic hubs andconstruction yards when requested by clients in order to achievea long-term consolidation of its market position in thosecountries; (iv) to leverage on the capacity to execute internallymore phases of large projects on an EPC and EPIC basis, pursuingbetter control of costs and terms of execution adapting withflexibility to clients’ needs, thus expanding theCompany’s value proposition; and (v) to complete theexpansion and revamping program of its construction and drillingfleet in consideration of the future needs of the oil&gasindustry, in order to confirm the Company’s leading positionin the segment of complex projects with high profitability.

Saipem expects to invest approximately euro 2.4 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 in 2011 amounted to euro 12,505 million, ofthese projects 91% are to be carried out outside Italy, whileorders from Eni companies represented 7% of the total. Orderbacklog was euro 20,417 million as of December 31, 2011 (euro20,505 million as of December 31, 2010). Projects to be carriedout outside Italy represented 91% of the total order backlog,while orders from Eni companies amounted to 14% of the total.

|   |   | **2009** |   | **2010** |   | **2011** |
|--------|--------|----------|--------|----------|--------|----------|
|   |   |          |   |          |   |          |

| **Orders acquired**                                |   | (euro million) |   | **9,917**  |   | **12,935** |   | **12,505** |
|----------------------------------------------------|--------|----------------|--------|------------|--------|------------|--------|------------|
| Engineering        & Construction Offshore     |   |           |   | 5,089      |   | 4,600      |   | 6,131      |
| Engineering & Construction Onshore             |   |           |   | 3,665      |   | 7,744      |   | 5,006      |
| Offshore        drilling                           |   |           |   | 585        |   | 326        |   | 780        |
| Onshore drilling                                   |   |           |   | 578        |   | 265        |   | 588        |
| Originated        by Eni companies                 |   | (%)            |   | 32         |   | 7          |   | 7          |
| To be carried out outside Italy                    |   | (%)            |   | 79         |   | 94         |   | 91         |
| **Order        backlog and breakdown by business** |   | (euro million) |   | **18,730** |   | **20,505** |   | **20,417** |
| Engineering & Construction Offshore            |   |           |   | 5,430      |   | 5,544      |   | 6,600      |
| Engineering        & Construction Onshore      |   |           |   | 8,035      |   | 10,543     |   | 9,604      |
| Offshore drilling                                  |   |           |   | 3,778      |   | 3,354      |   | 3,301      |
| Onshore        drilling                            |   |           |   | 1,487      |   | 1,064      |   | 912        |
| Originated by Eni companies                        |   | (%)            |   | 22         |   | 16         |   | 14         |
| To be        carried out outside Italy             |   | (%)            |   | 93         |   | 94         |   | 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 

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process through the creation of a large construction yard inSouth-East Asia and revamping/upgrading its construction fleet.Over the next years, Saipem will invest in the upgrading of itsfleet, by building a pipelayer, a field development ship fordeepwater, an FPSO and other supporting assets for offshoreactivity.

Saipem’s Offshore construction fleet is made up 35vessels and a large number of robotized vehicles able to performadvanced subsea operations. Its major vessels are: (i) the Saipem7000 semi-submersible dynamic positioned vessel, with 14 ktonnesof lift capacity, capable to lay pipelines using the J-laytechnique to the maximum depth of 3,000 meters; (ii) the FieldDevelopment Ship for the development of underwater fields indynamic 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 multifunction vessel for the development of hydrocarbonfields, able to lay rigid and flexible pipes and provided withcranes capable of lifting over 2 ktonnes; and (v) the Semacsemi-submersible vessel used for large diameter underwater pipelaying. The fleet also includes remotely operated vehicles (ROV),highly sophisticated and advanced underwater robots capable ofperforming complex interventions in deep waters.

The most significant order awarded in 2011 in Engineering& Construction offshore construction were: (i) the EPICcontract on behalf of South Oil Co for the expansion of the Basraoil center and related infrastructures in the field of the IraqCrude Oil Export Expansion - Phase 2 project; (ii) the EPICcontract on behalf of Saudi Aramco for the realization of theoffshore infrastructures in the field of the development of theoffshore fields Arabiyah and Hasbah in the Arabian section of thePersian Gulf; and (iii) an EPIC contract on behalf of Husky OilChina Ltd for the installation of two 79-kilometer long pipelinesand umbilicals as well as the construction of a subsea productionsystem for the development of Liwan 3-1 field in water depths of1,500 meters in the South China Sea.

 

> 
*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 principal orders awarded in 2011 in Engineering &Construction Onshore were: (i) the realization of 39 kilometershigh-speed/high-capacity railway along the Treviglio-Bresciarailway in northern Italy on behalf of Rete Ferroviaria SpA; (ii)the EPC contract for the construction of a Secondary Upgraderwith a capacity of 43 KBBL/d of Hydrotreated gas oil. Theinfrastructure will be part of the Horizon Oil Sands Project– Hydrotreater Phase 2 – in Alberta, in the AthabascaRegion, Canada; and (iii) the EPC contract for the realization ofa gas pipeline, 42 inches in diameter and 435-kilometer long,which will connect the gas fields in the Bowen and Surat Basinsto the Gladstone State Development Area (GSDA), near the city ofGladstone, in the western Australian coast on behalf of GladstoneOperations Pty Ltd.

 

> 
*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, North Sea, Mediterranean Sea and MiddleEast and boasts significant market positions in the most complexsegments of deep and ultra-deep offshore, leveraging on theoutstanding 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-the-art rigs to enhanceits role as high quality player capable of operating also incomplex and harsh environments.

In particular, in the next years Saipem intends to completethe building of: the Scarabeo 8 and 9, new generationsemi-submersible platforms, that have been already rented to Enithrough multi-year contracts. In parallel, investments areongoing to renew and to keep up the production capacity of otherfleet equipment (upgrade equipment to the characteristics ofprojects or to clients needs and purchase of support equipment).

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Saipem’s offshore drilling fleet consists of 15 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 reservoir 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 5 and 7, third andfourth generation semi-submersible rigs able to operate at depthsof 1,900 and 1,500 meters of water, respectively. Averageutilization of drilling vessels in 2011 stood at 100% (100% in2010).

The most significant order awarded in 2011 in Offshoredrilling were: (i) a 24-month extension contract, from August2012, for the lease of the drilling vessel Saipem 10000 on behalfof Eni; (ii) a 24-month extension contract, from August 2015, forthe lease of the drilling vessel Saipem 12000 on behalf of TotalE&P Angola; and (iii) a 36-month extension contract for thelease of the jack-up Perro Negro 7 on behalf of Saudi Aramco.

 

> 
*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 2011 stood at 96,1% (94% in2010). The 91 rigs owned by Saipem at year end were located asfollows: 28 in Venezuela, 21 in Peru, 10 in Saudi Arabia, 8 inColombia, 7 in Algeria, 5 in Kazakhstan, 3 in Brazil, 3 Bolivia,2 in Congo, 2 in Ecuador, 1 in Italy and 1 in Ukraine, and Saipemalso used rigs owned by third parties (6 in Peru and 4 inKazakhstan) as well as rigs owned by the joint company Saipar.

The most significant order awarded in 2011 in Onshore drillingwere: (i) a contract on behalf on Saudi Aramco in Saudi Arabiafor the lease of nine rigs with a contract duration from one tothree years; (ii) contracts on behalf of various clients inPeru, Colombia and Bolivia for the lease of fourteen rigs with acontract duration from 4 to 12 months; and (iii) 2 contractson behalf of Ural Oil and Samek for the lease of 2 rigs with acontract duration of 4 and 12 months, respectively.

 

> 
***Capital Expenditures***

See "Item 5 – Liquidity and Capital Resources –Capital Expenditures by Segment".

 

**Petrochemicals**

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 petrochemical business is toeffectively and efficiently manage operations in order to lowerthe break-even considering the volatility of costs of oil-basedfeedstock, cyclicality in demand, strong competitive pressuresfrom operators with lower cost structure especially in theMiddle-East leveraging on stranded gases, taking into account thecommoditized nature of many of 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 2011, the Petrochemicals segment reported sharply loweroperating losses from 2010 mainly due to worsening Europeaneconomic environment, declining demand and falling productmargins.

Management expects a weak macroeconomic outlook for 2012 whichwill weigh on a rebound in demand for petrochemicals products andthe risks associated with volatile crude oil prices. Inparticular, rising oil prices could put pressure on unit marginsof commodities. In light of this, management is planning toimplement a strategy intended to refocusing the petrochemicalbusiness, strengthening the product mix of the Company bydeveloping higher value added products, particularly in thebusinesses of elastomers, styrenics, resins, EVA and enteringinto bio-based chemical production. In the next years productsdemand in those higher value-added segments is planned to growand

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margins to be resilient also with higher feedstock prices.Management expects sales of higher value added products toimprove by 50% within 2015, with a contribution on total salesamounting to 40%.

The Company will also leverage on international expansionespecially in Asia and Latin America through licensingactivities, product alliances and joint ventures. Results of ourextra-European activities are expected to grow substantially by2015.

The Company’s strategy will also continue to leverage onefficiency actions to reduce operating costs and therationalization program of our plants in order to improve yieldsand efficiency, restructuring our unprofitable site, inparticular cutting the Company’s ethylene and polyethylenecapacity.

All these actions will allow improving our operating profit by2015.

To target those objectives, management plans to make capitalexpenditures amounting to approximately euro 1.7 billion over thenext four years. The main investment regards the conversion ofthe Porto Torres unit in Sardinia, Italy, into an innovativebio-based chemical complex to produce bio-plastics and otherbio-based chemical products for which significant growth isexpected in the medium-long term. In addition, the Company plansto develop the product line in the elastomers and monomersbusinesses revamp the efficiency of the Company’s crackingunits as well as complying with all applicable regulations onenvironment, health and safety issues.

In 2011 sales of petrochemical products (4,040 ktonnes)decreased by 691 ktonnes (or -14.6%) from 2010 mainly due to asubstantial decrease in demand reflecting the current economicdownturn. Petrochemical production (6,245 ktonnes) decreased by975 ktonnes from 2010, or 13.5%, Main decreases were registeredin basic petrochemical and polyethylene while elastomerproduction achieved a slight increase (up 1.1%). The abovementioned demand decrease required unexpected outages in all theplants, in Italy and abroad. In Italy, relevant productiondecreases were registered at the Porto Torres plant (down 46.4%),as a result of the shutdown of the plant in connection with thestart in the second quarter of 2011 of the above mentionedbio-based project related to the conversion of the site. OutsideItaly, main decreases were registered at the Dunkerque site dueto the slow restart after the expected shutdown and Feluy due tothe closure of the polystyrene plant at the end of 2010. Averageunit sales prices increased by 20% from 2010 due to the positiveimpact of the oil price scenario (virgin naphtha prices increasedby 31% from 2010). Also polymer prices registered a relevantincrease, in particular elastomers (up 34%). Notwithstanding theabove mentioned increase in sales prices, unit margins reported asteep decline due to higher supply costs of oil-based feedstockwhich were not recovered in sales prices.

The table below sets forth Eni’s main petrochemicalproducts availability for the periods indicated.

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

|   |   | **2009** |   | **2010** |   | **2011** |
|--------|--------|----------|--------|----------|--------|----------|
|   |   |          |   |          |   |          |

|   |   | **(ktonnes)** |
|--------|--------|---------------|

| Basic petrochemicals                |   | 4,350     |   |   | 4,860     |   |   | 4,101     |   |
|-------------------------------------|--------|-----------|--------|--------|-----------|--------|--------|-----------|--------|
| Polymers                            |   | 2,171     |   |   | 2,360     |   |   | 2,144     |   |
|                                |   |           |        |   |           |        |   |           |        |
| **Total production**                |   | **6,521** |   |   | **7,220** |   |   | **6,245** |   |
|                                |   |           |        |   |           |        |   |           |        |
| Consumption        of monomers      |   | (2,701    | )      |   | (2,912    | )      |   | (2,631    | )      |
| Purchases and change in inventories |   | 445       |   |   | 423       |   |   | 426       |   |
|                                |   | **4,265** |   |   | **4,731** |   |   | **4,040** |   |
|                                |   |           |        |   |           |        |   |           |        |

The table below sets forth Eni’s main petrochemicalproducts revenues for the periods indicated.

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

|   |   | **2009** |   | **2010** |   | **2011** |
|--------|--------|----------|--------|----------|--------|----------|
|   |   |          |   |          |   |          |

|   |   | **(euro million)** |
|--------|--------|--------------------|

| Basic petrochemicals      |   | 1,832     |   | 2,833     |   | 2,987     |
|---------------------------|--------|-----------|--------|-----------|--------|-----------|
| Polymers                  |   | 2,185     |   | 3,126     |   | 3,299     |
| Other revenues            |   | 186       |   | 182       |   | 205       |
|                      |   |           |   |           |   |           |
| **Total        revenues** |   | **4,203** |   | **6,141** |   | **6,491** |
|                      |   |           |   |           |   |           |

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> 
*Basic petrochemicals*

Basic petrochemicals revenues (euro 2,987 million) increasedby euro 154 million from 2010 (up 5.4%) in all main businesssegments due to the steep increase in average unit prices(olefins/aromatics up 20%, intermediates up 16%) as a result ofan improved scenario, partly offset by lower volumes sold (18% onaverage). In particular, a decline was reported in sales volumesof olefins (ethylene down 22%; butadiene down 57% due to the lackof raw material) and intermediates (down 21% on average, inparticular phenol and acetone). Basic petrochemical production(4,101 ktonnes) decreased by 759 ktonnes from last year (down15.6%), due to lower sales/demand of monomers. Lower ethyleneproduction reflected facility downtimes in the Porto Marghera andPorto Torres plants. In addition intermediates sales decreased(down 14%) due to unavailability of raw material and plannedfacility downtimes in the Mantova plant.

 

> 
*Polymers*

Polymer revenues (euro 3,299 million) increased by euro 173million from 2010 (up 5.5%) due to increases in average unitprices (elastomers up 34%, styrene polymers up 12%; polyethyleneup 11%). Sales volumes decreased on average by 11.5% (maindecreases were registered in polyethylene, down 16%, latticesdown 15%, polibutadiene and thermoplastic rubbers downapproximately 9%) due to a steep decline in demand. Sales of ABSand SBR rubbers showed an opposite trend, up 5% and 2%,respectively.

Polymer production (2,144 ktonnes) decreased by 216 ktonnesfrom 2010 (down 9%), mainly polyethylene (down 15%) due to thedelay in the restart of the Dunkerque production lines, plannedfacility downtimes in the Priolo, Ragusa and Gela in the lastpart of the year as well as a decline in demand.

 

> 
***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        International BV and Eni Insurance Ltd, Eni carries out        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. |

 

> 
***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.

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**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 and        gas;                                   |
|--------|--------|-----------------------------------------------------------------------------------------------------------------------------------------|
| • |   | limited access to new        hydrocarbon resources, with the consequent problems for        production growth and reserve replacement;  |
| • |   | a growing importance of        renewable sources in satisfying energy need, as well as        the role of unconventional resources; and |
| • |   | greater attention to        operations safety in the aftermath of recent accidents in        the industry.                              |

 

| Against this backdrop, management has        identified key technology priorities: |
|------------------------------------------------------------------------------------|

| • |   | continued technological        innovation to increase the recovery factor; to develop        drilling technologies to be applied in complex        environments and deep/ultra-deep offshore areas; to        maximize asset value, especially for gas and marginal        fields and by reducing time-to-market;                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |
|--------|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| • |   | implementation of new        technologies to minimize the environmental footprint of        Eni’s operations, actively manage risks to employees        and communities’ health and safety;                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |
| • |   | develop technologies to        reduce greenhouse gas emissions in industrial operations        with particular reference to energy efficiency, gas        flaring reduction and CO2 use;                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |
| • |   | focusing on innovative fuels        and bio-fuels enhancing performance and environmental        quality to anticipate stricter regulation;                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |
| • |   | commitment to develop a        potentially breakthrough technologies in the renewable        energy (solar and bio-mass). The relevant results        achieved in certain research projects, enable us to start        up the application phase;                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |
| • |   | strengthening of strategic        alliances and scientific cooperation projects with        international academic institutions and research centers        which we believe are qualified in the marketplace. As        part of this, in 2008 we signed a research alliance with        the Massachusetts Institute of Technology (MIT), Boston        (U.S.), focused on innovative technology in the field of        solar energy and in the oil and gas business. The overall        expenditure for academic institutions and research        centers amounted to euro 30 million in 2011. In 2011, Eni        signed a new agreement with Stanford University which        will develop a research program focused on oil&gas        technologies and environmental issues for an overall        expenditure of $10 million over the next four years.        Other agreements were signed with the Milan and Turin        Polytechnic universities and with the Italian National        Research Center (CNR). |

In 2011, Eni filed 79 patent applications (88 in 2010), 37 ofthese coming from Eni Divisions and Eni Corporate, 13 fromPetrochemicals and 28 from the Engineering & Constructionactivities of Saipem. In particular, 51% of Eni Divisions and EniCorporate patents concerned exploration activities ofunconventional resources, maximizing the recovery factor,transportation and products/processes in the downstream oilsegment and 41% were innovation on renewable energy sources. Theefficacy and efficiency of intellectual property management andof know-how dissemination are monitored within the R&Dperformance assessment system. In 2011, the review of Eni’sportfolio was performed following two key aspects: maximizinginnovative solutions created by the R&D projects underway andstreamlining of the existing portfolio in line with Eni’sbusiness strategy. In the year the ratio patents filing/expiringwas 1.22 (1.14 in 2010, 0.81 in 2009).

In 2011, Eni’s overall expenditure in R&D amounted toeuro 191 million which were almost entirely expensed as incurred(euro 221 million in 2010 and euro 207 million in 2009). AtDecember 31, 2011, a total of 925 persons were employed inresearch and development activities. Below, we describe the mainresults achieved in the development and application of innovativetechnologies in 2011.

 

> 
**Exploration & Production**

*- Seismic depth migration.*Eni has developed a set ofproprietary technologies for more accurate image reconstructionof highly complex subsurface structures, e.g., subsaltenvironments, deep reservoirs below carbonates, and fracturedreservoirs. *Eni Depth Velocity Analysis (e-dva*TM*)*and *Eni-Kirkhhoff True Amplitude Depth Migration (e-kta*TM*)*have been successfully applied in 2011 in Australia (Kitan),Angola (Lira discovery), Mozambique (Mambo discovery), and Ghana(Sankofa and Gyename discoveries). *Eni-Depth VelocityAnalysis (e-dva*TM*)* together with proprietary *ReverseTime Migration (RTM)* processing, has been successfullyapplied to several exploration projects in 2011, among whichAustralia, where it allowed the identification of new oil bearingstructures not visible with conventional tools.

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*- Eni Common Reflection Surface Stack (e-crs*TM*).*This is a proprietary seismic processing technology that enhancesthe signal/noise ratio in challenging imaging areas. In 2011 itsapplication in Pakistan and India contributed to positiveexploration results.

-*Eni Deep water dual casing running (e-dwdc*TM*).*This proprietary technology for simultaneously drilling and theninstalling the conductor pipe and the first casing has beenapplied to drill wells in Angola (Cinguvu-2 and Cabaça SouthEast-3 appraisal wells) and Mozambique (Mamba South 1 and MambaNorth 1 discovery wells). Its use reduced the drilling time forthis phase, while assuring maximum hole verticality andoperational safety.

- *Eni Circulation device (e-cd*TM*).*Proprietary technology has been used to drill wells in Alaska,Angola, China, Egypt, Ghana, and Italy. Eni Circulation Devicetechnology provides enhanced hydraulic control and hasdemonstrated excellent capacity also for well bore cleaning,opening new application perspectives.

- *e-sight, thin layer reservoirs.* Proprietarywhile-drilling and log interpretation technologies *(e-sight*TM*)*recently industrialized provide an industry-leading capability toidentify, quantify and develop thin layer reservoirs, which areby-passed with conventional approaches. This has led to theidentification of important additional resources in Italy andinternationally, and increased production in 2011.

 

 

> 
**Gas & Power**

*- Eni Kassandra meteo forecast.* Since 2009 Eni has beendeveloping a new climate weather forecast system in collaborationwith the Italian Weather Operations Centre (MOPI) to gainknow-how regarding the temperature trend on a regional andseasonal scale. Eni developed "Eni Kassandra meteoforecast", a proprietary system for forecasting temperaturesfrom meteorological and climate data. The system has beenvalidated in 2011 at the European level and is going to be usedin the management and sale of energy resources obtainingcompetitive advantages in both gas and power businesses.

*- Pipeline monitoring.*With the aim of guaranteeingexcellent quality standards and efficient transport services, aspart of its activity of pipeline monitoring, Eni developedtheoretical models of acoustic-elastic transmission in pipes usedfor gas and oil transport as well as algorithms for remotelocalization of impacts and fluid leaks along the pipe. Theprototypal system of this monitoring technology will be appliedon transport and production pipes in Eni plants in Italia,Tunisia and Nigeria. In addition, studies were also completed onnew acoustic sensors with Wi-Fi remote control for sunken pipesat gas stations that cannot be checked with PIG (PipelineInspection Gauges), and radar technologies for remote monitoringof vibrations and pipe displacement.

*- Transport at Intermediate Pressure (TPI).* In 2011 Enicompleted the TPI project dedicated to validate natural gastransport technologies by means of onshore high pressure pipes inhigh grade structural steel. For the same volumes of gastransported with traditional solutions, the introduction of thistechnology allows to reduce the overall costs for long distancetransportation.

 

> 
**Refining & Marketing**

*- Eni Slurry Technology (EST).*The EST proprietarytechnology is an innovative process for hydro-conversion by meansof a nanodispersed catalyst (slurry) and a peculiar processscheme to refine various kinds of heavy feedstock: residues fromthe distillation of heavy and extra-heavy crude (such as the onesfrom the Orinoco Belt in Venezuela) or non-conventional productssuch as tar sands, characterized by high contents of sulphur,nitrogen, metals, asphaltenes and other pollutants that are hardto manage in conventional refineries. EST does not produceby-products and completely converts feedstocks into distillates.In May 2011, at the Sannazzaro de’ Burgondi refinerypreliminary activities have started for the construction of theplant employing for the first time on an industrial scale EST.

*- Total Conversion.* Successful results have beenobtained from the continuous operation of the Slurry DualCatalyst pilot plant: this technology, based on the combinationof two nanocatalysts could lead to a relevant breakthrough in theEST process, increasing its productivity and improving productquality.

*- Short Contact Time-Catalytic Partial Oxidation (SCT-CPO).*It is a reforming technology that can convert gaseous andliquid hydrocarbons (also derived from bio-mass) into syntheticgas (carbon monoxide and hydrogen). This technology cancontribute to process intensification as it allows to producesynthetic gas and hydrogen using reactors up to 100 times smallerthan those currently in use, with relevant savings. Thedevelopment of this technology, that makes 

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use of oxygen enriched air, has been completed and anotherversion making use of pure oxygen is under development. In 2011at the Sannazzaro refinery the Short Contact Time-CatalyticPartial Oxidation project is underway.

*- Zero Waste project.*For the treatment of industrial,oily and biological waste generated by the oil industry a thermalprocess has been studied that allows for the gasification ofsludge that is turned into an inert residue. A patent applicationhas been filed on this project. In the third quarter of 2011 Enistarted up a pilot plant for pyrolisis/gasification andinertization of industrial sludge (Zero Waste project) withcapacity of 50 kg/h at the site of Centre for new materialsdevelopment of in Rome.

 

> 
**Petrochemicals**

*- Basic petrochemicals.* In the intermediates business anew technology was introduced at a pilot scale aimed ateliminating the coproduction of acetone (an unwanted co-product)in the production of cumene from benzene.

*- Elastomers.* In 2011, in the elastomer businesstechnological innovation were industrially homologated throughthe use of two new grades of E-SBR rubbers for Tire greenapplication (low emissions) allowing to obtain an higherperformance product. New nitrilyc rubbers utilizable in theproduction of gloves, flexible pipes and washers, wereindustrialized with a more efficient and non volatile antioxidant, that allows to eliminate emissions in finishingoperations.

*- Polymers.* In the styrene business new additive wassuccessfully tested that allows to improve the environmentalfootprint in the production of EPS (Expanded Polystyrene incontinuous mass) reducing by 30% the formation of bromideby-products.

 

> 
**Engineering & Construction**

*- Offshore.* R&D activity was finalized atcontinuous improvement of innovative solutions for offshorefields: in particular, among the main innovations in 2011 were:(i) the project for a system for the transport of liquefiednatural gas between two units of offshore Floating LNG; (ii)methodologies and innovative structures for the laying ofoffshore pipelines aiming at reducing their impact on theenvironment and on habitat restoration; and (iii) in the field ofrenewable energies, activities connected to the realization of aprototype of a submarine turbine moved by sea currents in 2012.

*- Onshore.* R&D activities for the year relatedmainly process technologies in the upstream and mid-downstreamsegments aimed in particular at: (i) increasing the productivityof the proprietary technology for the production of fertilizers(SnamprogettiTM Urea); (ii) reducing the environmentalimpact of urea producing plants based on the recovery of ammonia;and (iii) transport of CO2 in the field of EnhancedOil Recovery technologies for the development of onshore fields.

 

> 
**Eni Corporate**

*- Photoactive materials.* A Luminescent SolarConcentrator consists of a slab of transparent material(polymeric or glassy) doped with fluorescent molecules, patentedby Eni, which works as microscopic light emitters. The emittedradiation is partially concentrated within the slab by totalinternal reflections and is waveguided toward its edges where PVcells are placed. LSCs allow for a substantial decrease instandard PV module costs by reducing the effective cell surfacewith respect to the absorbing surface. The positive resultsobtained at lab level allow the commencement of a demonstrationphase.

*- Micro-organisms for bio-diesel.*Purpose of theproject is the use of micro-organisms (yeasts and bacteria) thataccumulate lipids similar to those deriving from oil-bearingvegetables, that can easily be turned into bio-diesel. The rawmaterial employed by these micro-organisms derives from thetreatment of wood-cellulose bio-mass in order to not compete withfood products. The identified yeasts have higher productivitythan the traditional oil crops, including palm oil. In 2011,planned activities started-up at a pilot plant with a 200 litercapacity. The full completion is expected to be tested in 2012.

*- Photoproduction of hydrogen.*This project hasbreakthrough content for water splitting into O2 and H2.New materials was synthesized for innovative photoelectrodes anddemonstration cells was constructed. The new materials

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(e.g. titanium oxide, tungsten, and iron), based on originalprocesses that use nanotechnology, have lead to interestingefficiency levels in the conversion of solar energy into chemicalenergy, up to the best levels reached on a world basis. In 2011,a demonstration device for H2 production has been built andtested in open air.

 

> 
**Results derived from the Eni-MIT alliance**

*Oil spills in marine environment.*The project derivesfrom the discovery of an innovative material with great selectivecapacity for the absorption of oil dispersed in water. This couldbe a first step towards new systems for treating oil spills inmarine environments.

*Ultraflexible solar cell.* One of the most importantresults obtained by the Solar Frontier Center: these cells madeof a thin photoactive material covered by a layer of transparentplastic can be bent without breaking or reducing performance andthis allows to cover irregular surfaces without using metalstilts.

*Solar cells on paper.* In this case the photoactivedevice is made on paper as a printed document. The innovativetechnique is the same used for producing cells on plastic andflexible substrata. A paper cell can be a low cost solution forapplication where the key aspect is not duration but fastinstallation and easy transport.

 

**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 implements 

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international conventions or protocols. In particular, theselaws and 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 voluntarily reduction in the emission of greenhouse gases inthe atmosphere and cope with climate change.

A brief description of major environmental laws impactingEni’s activities located in Italy and Europe is outlinedbelow.

 

> 
**Italy**

On August 16, 2011, Legislative Decree No. 121/2011"Implementation of Directive No. 2008/99/EC on the criminalprotection of the environment, and Directive No. 2009/123/EC– amending Directive No. 2005/35/EC – on pollutioncaused by ships and the introduction of penalties forviolations" came into force. This decree introduced intoItalian law the liability of legal entities in relation to thecrimes committed by employees against the environment.Particularly, the Italian legislator broadened the scope ofcorporations’ liabilities for the crimes committed byemployees to include crimes relating the illicit discharge ofindustrial waste water, violations in reporting, record keepingand other omitted evidence in the matter of waste, unauthorizedwaste management, illegal trafficking of waste, as well as crimesrelating the application in Italy of the Convention onInternational Trade in animal and plant species threatened withextinction, violations of measures intended to protect thestratospheric ozone and the environment and pollution caused byships.

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.

| On April 29, 2006, Legislative Decree        No. 152/2006 "Environment Regulation" came into        force. This as amended and updated by four following        decrees was designed to rationalize and coordinate the        whole regulation of environmental matters by setting: |
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| • |   | procedures for Strategic        Environment Assessment (SEA), Environmental Impact        Assessment (EIA) and Integrated Pollution Prevention and        Pollution Control (IPPC); |
|--------|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| • |   | procedures to preserve soil,        prevent desertification, effectively manage water        resources and protect water from pollution;                                            |
| • |   | procedures to effectively        manage waste and remediate contaminated sites;                                                                                                     |
| • |   | air protection and reduction        of atmospheric pollution; and                                                                                                                   |
| • |   | environmental liability.                                                                                                                                                            |

The most important changes introduced by the Decree regardedreclamation and remediation activities as this Decree provided asite-specific risk-based approach to determine objectives ofreclamation and remediation projects, cost-effective analysisrequired to evaluate remediation solutions, and criteria forwaste classification.

On January 4, 2011, Decree No. 219/2010 entered in forceimplementing the Directive 2008/105/EC on environmental qualitystandards in the field of water policy (modifies Part III of theDecree No. 152/2006).

Moreover, on February 22, 2011 a new monitoring criteria andclassification of water bodies (in line with Water FrameworkDirective) introduced by Ministerial Decree No. 260/2010 enteredin force. Ministerial Decree substitutes integrally Annex I ofthe II Part of the Environmental Code (Decree 152/2006).

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Decree No. 4/2008 introduced important changes regarding SEAand EIA procedures, landfill, waste and remediation. The mostimportant aspects of these regulations to Eni are thoseregulating permits for industrial activities, waste management,and remediation of polluted sites, water protection andenvironmental liability.

Decree No. 128/2010 introduced IPPC regulations and additionalrestricting emission limits for certain critical pollutants, incompliance with the IED directive. In relation to the accidentthat occurred in the Gulf of Mexico, the Decree also introducedpermit restrictions regarding offshore activities, in line withthe European Parliament Resolution of October 7, 2010 on EUaction on oil exploration and extraction in Europe. Eni hasrescheduled certain offshore activities in the Mediterranean Seaand the North European Sea to take account of such developments.

Decree No. 205/2010 implemented the Directive No. 2008/98/ECabout waste and adopted SISTRI (an automated tracking system ofspecial and hazardous waste). The new system aims at real timemonitoring of the route of waste from production throughdisposal/recycling, also prosecuting any unlawful act. The newregulatory system is expected to be fully implemented by June2012. The system has already introduced some significant changesin Eni’s organization and internal procedures.

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.

Eni is executing a number of site characterizations andinquiries to comply with the above mentioned regulations. Theobjective of this activity is to detect the pollution levels andpresence of contaminants in the sites where the Company isconducting or has conducted in the past its industrialactivities. With particular reference to certain industrial siteswhich were divested or restructured in past years, the Companyhas established environmental provisions to take account of theexpected future costs to clean-up and remediate the industrialareas. In 2010, the Company proposed a global environmentaltransaction to the Italian Ministry for the Environment in orderto define the clean-up projects and measures of environmentalremediation relating nine industrial sites of national interestwhere the Company owned or held in concession certain industrialareas. The Company took a charge of euro 1,109 million in 2010operating profit.

On February 19, 2011, Legislative Decree of December 30, 2010,No. 257, entered in force, implementing Directive No. 2008/101/ECof the European Parliament and of the Council, which includesaviation activities in the scheme for greenhouse gas emissionallowance trading within the Community.

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.

| 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.                                           |

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.

In 2011, the Decree No. 151/2011 has also come into effectrationalizing the previous legislation on fire prevention andprotection.

 

> 
**European Union**

On June 1, 2007, REACH regulation of the European Union (ECNo. 1907/2006 December 18, 2006) entered into force. REACH standsfor Registration, Evaluation, Authorization and Restriction ofChemical and was adopted to improve the protection of humanhealth, safety and the environment from the risks that can beposed by chemicals, while enhancing the competitiveness of the EUchemicals industry. It also promotes alternative methods for theassessment of hazardous substances in order to reduce the numberof 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 ECHA how thesubstance can be 

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safely used, and they must communicate the risk managementmeasures 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 deadlines are 2013 and 2018.

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 chemicalsit introduced 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 Policy for Europe - EPE, so-called        "20-20 by 2020", a far-reaching package of        proposals that will deliver on the European Union’s        ambitious commitments to fight climate change, promote        renewable energy and increase energy security. The        following regulations were published in order to define        the criteria for cutting emissions cost-effectively by        2020 compared with levels recorded in 2005: |
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| • |   | 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.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |

Directive No. 2008/1/EC contains the new IPPC and rationalizesall existing regulations on this issue. Member States of the EUhave to communicate their national values of emissions into theatmosphere, wastes produced and managed and discharges ofcompounds into waste that are to be included in the EuropeanPollutant Release and Transfer Register (E-PRTR). According tothe E-PRTR, Eni installations shall report data on the ItalianRegister website, by the end of March of each year.

In 2010, Eni completed the implementation of an IntegratedEnvironmental Information System, able to gather, manage andreport the data on all the pollutants released and off-sitetransferred as requested by PRTR Regulations.

On November 24, 2011 the Commission Regulation (EU) No.1210/2011 of November 23, 2011 amending Regulation (EU) No.1031/2010 in particular to determine the volume of greenhouse gasemission allowances to be auctioned prior to 2013 was publishedin the Official Journal of the European Union No. 308.

On December 14, 2011 the Commission Decision of December 7,2011 concerning a guide on EU corporate registration, thirdcountry and global registration under Regulation (EC) No.1221/2009 of the European Parliament and of the Council on thevoluntary participation by organizations in a Communityeco-management and audit scheme 

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(EMAS) was published in the Official Journal of the EuropeanUnion No. 330. The Decision provides guidelines and additionalinformation on EMAS registration for those organizations withmultiple sites located in one or more Member States or third(non-EU) countries.

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 startedthe review process of the Reference Documents on Best AvailableTechniques for Large Combustion Plants "BREF-LCP" andreactivated the Technical Working Group (TWG); the new documentswill be published in 2012. Moreover, in 2011 the EuropeanCommission worked on the rules concerning the transitionalnational plans (PNT), as stabilized in the Article 41 of IEDDirective. The Member States should transpose the IED Directiveinto national legislation by December 2012.

On November 22, 2008 the new Directive on waste (Directive No.2008/98/EC) was published in the Official Journal of the EuropeanUnion. The new Directive simplifies the existing legislativeframework by clarifying definitions, streamlining provisions andintegrating the Directives on hazardous waste (No. 1991/689/EC)and on waste oils (No. 1975/439/EC). The Directive introduces alife-cycle approach, focuses on waste policy by improving the wayof resources consumption. The scope is to improve the recyclingmarket by setting environmental standards, specifying under whichconditions certain recycled waste are no longer considered such.The Directive requires that Member States take appropriatemeasures to encourage the prevention or reduction of wasteproduction and its harmfulness. This can be done by a combinationof several strategies particularly through the development ofclean technologies, the technical development and marketing ofproducts designed so to contribute as little as possible toincreasing the amount of waste. The Directive also sets newrecycling targets.

The core of the Directive is the introduction of a wastemanagement hierarchy. This hierarchy is as follows: 1. Wasteprevention, 2. Re-use, 3. Recycling, 4. Recovery (includingenergy recovery), 5. Disposal. Moreover the Directive bolstersthe importance of the extended producer responsibility in thefuture waste management measures.

| 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% vs. 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": |
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| • |   | 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 adopted orare likely to adopt more stringent regulations targeting safetyand reliable oil and gas operations in the United States andelsewhere, particularly relating to environmental and health andsafety protection controls and oversight of drilling operations,as well as access to new drilling areas. Eni’s operations inthe Gulf of Mexico did not experience any material delays orinterruptions following a stricter regime of permit assignmentfrom U.S. Authorities. Italian Authorities too 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.

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Following a resolution of the European Parliament of one yearearlier rejecting a moratorium on new oil platforms and requiringa single European system for prevention and response tointra-community oil spills, on October 27, 2011 the EuropeanParliament proposed a new law which will ensure that Europeanoffshore oil and gas production will respect the world’shighest safety, health and environmental standards everywhere inthe EU. The new draft regulation sets clear rules that cover thewhole lifecycle of all exploration and production activities fromdesign to the final removal of an oil or gas installation. Itintroduces requirements for effective prevention and response ofa major accidents through the licensing, verification of thetechnical solutions by the independent third party (prior thelicense and periodically after the installation startsoperating), obligatory ex ante emergency planning (Major HazardReport), inspections, transparency (information available tocitizens and competent authorities), emergency response plans,liability (environmental liability is extended up to about 370 kmfrom the coast – covers EU marine waters including theexclusive economic zone), EU Offshore Authorities Group.

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 which the Company might adopt either on a mandatory orvoluntary basis. Also our exploration and development plans toproduce hydrocarbons reserves and drilling programs could beaffected by changing HSE regulations and industrial practices.Lastly, the Company expects that production royalties and incometaxes in the oil and gas industry will likely trend higher infuture years.

In order to achieve the highest safety standards of ouroperations in the Gulf of Mexico, we entered into a consortiumled by Helix that worked at the containment of the oil spill atthe Macondo well. The Helix Fast Response System (HFRS) performscertain activities associated with underwater containment oferupting wells, evacuation of hydrocarbon on the sea surface,storage and transport to the coastline.

 

> 
***HSE Activity for the Year 2011***

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 2011, 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 294 (266 in 2010), of which 103 certificationsaccording to the ISO 14001 standard, 9 registrations according tothe EMAS regulation (EMAS is the Environmental Management andAudit Scheme recognized by the European Union) and 73 accordingto the OHSAS 18001 standard (Occupational Health and Safetymanagement Systems - requirements).

In 2011, Eni total HSE expenses (including cross-cuttingissues such as HSE management systems implementation andcertification, etc.) amounted to euro 1,622 million, up 13% from2010.

*Environment.* In 2011, Eni incurred total expendituresamounting to euro 1,007 million for the protection of theenvironment, as in 2010. Current environmental expenses increasedby approximately 5% from 2010, and mainly related to costsincurred with respect to remediation and reclamation activities,carried out mainly in Italy. Capitalized environmentalexpenditure decreased by 6% and mainly related to plant upgradingto increase energy efficiency, reduce carbon emissions andclean-up industrial discharge water. Eni expects to continueincurring amount of environmental expenditures and expenses inline with or above 2011 levels in future years.

*Safety.* We are 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 2011, 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 2011;this is one of the foundations of Eni’s safety strategy,through a large communication campaign with the target ofimproving the conduct of employees/workers in the specific fieldof safety in the workplace. The campaign will be completed thisyear and will involve 35,000 employees and 25,000 contractorworkers.

From the end of 2009 and throughout 2010, a number of safetyseminars involving the top and middle management of variousbusiness units have taken place, with the aim of sharing theexperiences coming from the implementation of process safetyaudits in the downstream sector and asset integrity verificationtools in the upstream sector. The process safety knowledgeimprovement effort has continued in 2011 with courses targeted atspecific areas like functional safety and alarms management.

Results of efforts to achieve a better safety in allactivities has brought an improvement of Eni lost time injuryfrequency to 0.73 and of the severity rate to 0.026, bothdecreasing from 2010 (down 18% and 10%, respectively) andrepresenting the best results ever.

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Costs incurred in 2011 to support the safety levels ofoperations and to comply with applicable rules and regulationswere euro 349 million, up 23% from 2010. Eni expects to continueincurring amounts of expenses for safety which will be in linewith or above 2011 levels in future years.

| *Health.*Eni’s activities for        protecting health aim at the continuous improvement of        work conditions. Results have been achieved 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 300 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 in foreign environment. HIA isusually carried out as part of or in conjunction with theEnvironmental and a Social Impact Assessment process. The resultsare used to develop appropriate mitigation measures and animprovement plan with the host community. The principal aim ofHealth Impact Assessment is to avoid any negative impacts andmaximize any positive impacts of the project on the hostcommunity.

In 2011, Eni incurred a total expense of euro 81 million, up41% from 2010, to protect the health of its employees. Eniexpects to continue incurring amounts of expenses for healthwhich will be in line with or above 2011 levels in future years.

 

> 
***Managing GHG emissions and Implementation of the    Kyoto Protocol***

On February 16, 2005, the Kyoto Protocol entered into forcealong with commitments provided by Annex I to the Protocol whichwas ratified by the same parties who joined the Protocol,including the EU and Italy. According to Law No. 120/2002, Italycommitted itself to reduce greenhouse gas (GHG) emissions by 6.5%in the period 2008-2012, as compared to GHG levels emitted in1990. Reductions can be achieved through both internal measuresand complementary initiatives.

The latter include the so-called flexible mechanisms, whichenables a Party to carry out projects in developing countries(CDM - Clean Development Mechanism) and in industrial countrieswith transition economies (JI - Joint Implementation) in order toobtain emission credits to fulfill the Kyoto compliance.

Italy is a party to the EU Emission Trading Scheme("ETS") that was established by Directive No.2003/87/EC. Effective from January 1, 2005, ETS is the largestvirtual market in the world for exchanging emission allowancestargeting industrial installations with high carbon dioxideemissions.

As foreseen by the Directive, Italy has issued two NationalAllocation Plans (NAP) covering the periods 2005-2007 and2008-2012 which set out the allowances awarded to each sector andinstallation. The ETS EU Directive provides that each memberstate shall ensure that any operator, who produces GHG emissionsin excess of the amounts entitled on the base of nationalallocation plan, is required to provide allowances to coverexcess emissions and to pay a penalty. The excess emissionspenalty amounts to euro 100 (euro 40 for the first period2005-2007) for each tonne of carbon dioxide equivalent producedin excess of entitled amounts. All companies are expected toidentify and carry out projects for emission reductions.

Eni participates in the ETS scheme with 55 plants in Italy and4 outside Italy, which collectively represent more than 40% ofall greenhouse gas emissions generated by Eni’s plantsworldwide. In the period 2005-2007 Eni was entitled to allowancesequal to 77.2 mmtonnes of carbon dioxide for existing and newinstallations. In the period 2008-2012 Eni was entitled toallowances equal to 126.4 mmtonnes of carbon dioxide for existinginstallations and further 2.0 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 2011.

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Moreover, Eni monitors the opportunities deriving the KyotoFlexible Mechanisms. In fact, due to its presence in about 70Countries, Eni is an elective partner for carrying out CDM and JIprojects thus contributing to the Italian program of greenhousegas emissions reduction. In December 2003, during the Conferenceof Parties to the Kyoto Protocol - COP9, Eni and the Ministry forthe Environment signed a Voluntary Agreement for using flexiblemechanisms, promoting CDM and JI and contributing to thesustainable development of host countries.

Management believes that the best solution for complying withthe Kyoto Protocol makes recourse to low emission energy sourcesand adoption of highly efficient technologies. To address thegreenhouse gas challenge, Eni performed a detailed analysis fordefining its strategy to respond to climate change and toparticipate in the European emissions trading system, identifyinga number of projects for energy saving and emission reductionsfrom its plants.

In addition, management is targeting to reduce GHG emissionsby implementing certain gas projects designed to exploitassociated gas in foreign countries where such gas is flared dueto lack of infrastructures or market opportunities. Theelimination of flaring and the use of associated gas for thedevelopment of local economies enable sustainable developmentwhile reducing greenhouse gas emissions.

More projects are being assessed or implemented in order toeconomically exploit gas associated with the production ofliquids or reduce flaring gas. The Company plans to investapproximately euro 4.1 billion over the next four years inAlgeria, Libya, Angola, Congo, Iraq, Italy, Nigeria, Norway andTurkmenistan to execute projects intended to monetize thereserves of associated gas and cut volumes of flared gas.Particularly in the period 2012-2015, Eni plans to cut by 80% thevolumes of gas flaring compared to 2007 levels.

In order to achieve a reduction in the trend of GHG emissions,management plans to implement measures targeting energyefficiency at various Eni’s installations and facilitiesincluding refineries, petrochemicals plants and electricityplants, and actions to better manage gas emissions in transportand distribution activities. However, due to stricter rules ofcurrent rules granting emission allowances for no consideration,management believes that Eni’s GHG emissions under the ETSscheme will exceed the entitled allowances in the next four-yearperiod resulting in the incurrence of higher operating expensesto acquire emission allowances on the marketplace estimated ateuro 0.7 billion in the four-year period. Most of those projectedexpenses are expected to be incurred in the years 2013-2015,which correspond to the third Phase of Emission Trading.

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. The Eni GHG Protocol has been updated during 2009 tobe in compliance with the European and Italian regulation (as thenew Monitoring and Reporting Guideline) and with the bestpractices reference document (American Petroleum IndustryCompendium - August 2009). For safer and more accurate managementof GHG emissions and with a view to supporting effectivereporting, Eni provided all its business units with a dedicateddatabase, in order to gather and report GHG emissions accordingto the Protocol and to ensure completeness, accuracy,transparency and consistency of GHG accounting as required bycertification needs.

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.*

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> 
***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 a government entity or statecompany and are sometimes entered into with private propertyowners. These arrangements usually take the form of licenses orproduction sharing agreements. See "Regulation of theItalian Hydrocarbons Industry" and "EnvironmentalMatters" for a description of the specific aspects of theItalian regulation and of environmental regulation concerningEni’s exploration and production activities.

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 orproduction sharing agreement). The taxes imposed upon oil and gasproduction profits and activities may be substantially higherthan those imposed on other 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 Law No. 99 of July23, 2009 royalties are equal to 10% and 4%, respectively, foronshore and offshore production of oil and 10% and 7%,respectively, for onshore and offshore production of natural gas.

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> 
***Gas & Power***

**Natural gas market in Italy**

*Legislative Decree No. 130 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 gas market and to ensure        the transfer of economic benefits to final        customers" (Legislative Decree No. 130/2010) became        effective. This new regulation replaced the previous        system of gas antitrust thresholds defined by Legislative        Decree No. 164 of May 23, 2000 by introducing a 40%        ceiling to the wholesale market share of each Italian gas        operator who inputs gas into the Italian backbone        network. In the frame of Legislative Decree No. 130/2010        Eni has committed itself to build (by its subsidiary        Stogit) 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 No. 239 of August 23, 2004 on the restructuring of    the energy sector in Italy*

| The main aspects of this law are        described below. |
|----------------------------------------------------------|

| • |   | It established a derogation        to the general rule of third party access to        infrastructures by granting a waiver to companies that        make direct or indirect investments for the construction        of new infrastructure or the upgrading of existing ones        such as: (i) interconnections between EU Member States        and national networks; (ii) interconnections between        non-EU States and national networks for importing natural        gas to Italy; (iii) LNG terminals in Italy; and (iv)        underground storage facilities in Italy. Investing        companies can obtain priority on the assignment of the        new capacity resulting from new investment up to 80% of        the new capacity installed for a period of at least 20        years. |
|--------|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| • |   | It established that all        concessions for natural gas distribution activities in        urban areas existing at June 21, 2000 awarded through        competitive bids are set to expire on December 31, 2012.        In 2011, a specific Decree issued by the Italian        Government established 177 territorial basins        representing the lowest levels of aggregation of        municipalities. The new concessions will be granted based        on these new territorial basins for a maximum term of 12        years. When an existing concession expires, the new        operator who takes over the concession will award the        previous operator a compensation for the distribution        network based on an industrial assessment of the asset        value.                        |

> 
 

*Law Decree No. 1 of January 24, 2012 for new    liberalization measures in Italy*

| Law Decree No. 1 enacted by the Italian        Government on January 24, 2012 (the so called        "Decree on Liberalizations") is expected to        have major impacts on the Italian gas sector, including        an obligation on part of Eni to divest its interest in        Snam SpA (see below). Other areas of interest to Eni are        certain proposed measures to: |
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| • |   | enhance competitiveness in        gas tariffs to residential customers and in the        distribution of refined products; 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. |

Further details are provided in the following paragraphs.

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> 
*Mandatory disposal of Eni’s interest in Snam*

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. The term by whichinterested companies would have to comply with this provision,was initially fixed as of December 31, 2008 and was thenrescheduled to a 24-month period deadline following enactment ofa specific decree by the Italian Prime Minister which wouldestablish terms and conditions of the divestments.

On June 1, 2011, the Italian Council of Ministers approved aLegislative Decree intended to enact European Directive No.2009/72EC, No. 2009/73/EC, and No. 2008/92/EC (the so-calledThird Energy Package) into Italian legislation. The Decreeestablished the adoption of functional unbundling, in order torealize the so-called Independent Transmission Operator (ITO)model for Snam Rete Gas which is the main Italian gas transportoperator. On the basis of this Legislative Decree, Eni couldretain control of Snam Rete Gas by ensuring the decisional andfunctional independence of its subsidiary. As of December 31,2011, Eni complied with the regime of functional unbundling forSnam Rete Gas as set by Decision 11/2007 and updated byResolution No. 253/2007 of the Authority for Electricity and Gas.With the intent to build an organizational model meeting theselegal provisions, on December 5, 2011 with effect from January 1,2012, “Snam Rete Gas SpA” changed its officialdenomination in “Snam SpA”, a new company holding a100% interest in the four companies operating the transport,re-gasification, storage and distribution of natural gas. Thisname change was followed by the transfer of the“transportation, dispatching and metering of naturalgas” business unit to a new company that continuously fromJanuary 1, 2012, took the name of Snam Rete Gas SpA.

On January 24, 2012, the above mentioned prescriptions havebeen partially superseded by the enactment of Law Decree No. 1 bythe Italian government which has opened up a procedure callingfor the mandatory divestment of Eni’s interest in Snam. ThisDecree, which has been converted into law on March 24, 2012provides that the President of the Council of Ministers pass aspecific decree setting criteria, terms and conditions of thedivestment of Eni’s interest in Snam by May 2012. Thedeadline to comply with this provision is due 18 months after thepromulgation of the Law converting the above mentioned decree ofthe Council of Ministers. The Decree must also define if Eni isto retain an interest in Snam and its maximum amount.

In 2011, consolidated financial statements, Snam accounted forapproximately 13% of the Group’s total assets, 2% of theGroup’s total revenues, 12% of the Group’s operatingprofits and 40% of the Group consolidated net borrowings.

 

> 
*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 

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natural gas through local networks are currently required tooffer to those customers the regulated tariffs set by AEEG besidetheir own price proposals. Clients who are currently eligible tothe safeguard regime set by the Authority are those residentialclients who did not opt for choosing a supplier at the opening ofthe market in 2003 (including those who consume less than 200,000CM/y and residential buildings). The above mentioned LegislativeDecree No. 130/2010 enlarged this category by including allcustomers consuming less than 50,000 CM/y and certain publicservices (for example hospitals and other assistance facilities).

The pricing mechanism established by the AEEG basicallyindexes the cost of gas to a preset basket of hydrocarbons forthe purpose of tariff setting to those customers. Also a floorhas been established in the form of a fixed amount that appliesonly at certain low level of international prices ofhydrocarbons. In its latest intervention on this issue, theAuthority for Electricity and Gas with Resolution ARG/gas No.89/2010 amended the current mechanism by introducing for thermalyear October 1, 2010-September 30, 2011, a fixed reduction of7.5% of the raw material cost component in the final price ofsupplies to residential users. In addition with ResolutionARG/gas No. 77/2011, the AEEG provided for the thermal yearOctober 1, 2011-September 30, 2012 a reduction of 6.5% of the rawmaterial cost component. These resolutions will negatively affectEni’s results of operations and cash flows in 2012 and havepenalized Eni’s results in 2011, considering the negativeimpact on unit margins in sales to residential customers. TheCompany believes that it is possible that in the near future theAEEG could enact new measures impacting the indexation mechanismof the cost of gas in supplies to that kind of customers.Particularly the above mentioned Italian decree onliberalizations puts the AEEG in charge of gradually introducingreference 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.Management believes that this new pending rule will negativelyaffect the profitability of the Company sales in those segments;AEEG, in fact, has just proposed in a specific publicconsultation (DCO No. 68/2012/R/gas) introduction of a percentagelinked to the European hub prices (in particular for 2012, 5%since second quarter, 6% since third quarter).

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.

 

> 
**Regulation of gas sale tariff in Europe**

In France, starting from June 1, 2011, tariffs have beenblocked by a new ministerial measure that cancelled tariffincreases for the year for residential customers and allowed alower increase than the one resulting from the application of theindexation formula for professional customers. In December 2011,the French Government passed a new indexation formula to beapplied to tariff updates from January 1, 2012 that significantlyincreases (from 9.5% to 26%) the share related to spot prices.

Similar measures concerning a block on tariffs paid by retailcustomers have been approved in Hungary.

 

> 
**Fully-Regulated Businesses in the Italian Gas Market**

*Transport*

*Transport tariffs.* The AEEG set transport criteriacompanies have to apply in determining natural gas transport anddispatching tariffs on national and regional transport networks,for each regulatory period made up of four years, as provided forby Decree No. 164/2000. Tariffs are subject to approval by theAuthority, which ensures their compliance with preset criteria.

Criteria established by the AEEG set allowed revenues that arecalculated as the sum of: (i) operating costs including storageand modulation costs; (ii) amortization and depreciation oftransport assets; and (iii) return on net capital employed.

With Resolution ARG/gas No. 184/2009, published on December 2,2009, the Authority set the criteria regulating the tariffs fornatural gas transport on the national and regional gas pipelinenetwork for the third regulatory period (January 1, 2010-December31, 2013).

The Regulated Asset Base (RAB) is calculated with there-valuated historical cost methodology.

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The allowed pre-tax rate of return (WACC) on the RegulatoryAsset Base (RAB) has been set equal to 6.4% in real terms.

The new tariff structure confirms recognition in tariff ofexpenditures incurred for network upgrading, providing for ahigher remuneration than WACC, in a measure ranging from one tothree percentage points of additional remuneration in relation tothe nature of expenditures and for a period of 5 to 15 years.

Depreciation charges of gas transport infrastructures (gaspipelines) are determined on a 50-year useful technical life andare excluded from the price cap mechanism. Operating costs aredefined with reference to operating costs incurred during 2008and increased by a 50% rate to factor in productivity gainsachieved in the second regulatory period. Fuel gas is excludedfrom the price cap mechanism and treated as a pass-through costwhich is payable in kind by users.

The revenue component related to volumes transported isdetermined on the basis of operating costs recognized in tariffand amounts to approximately 15% of revenue cap.

*Network Code.*From 2003, Snam Rete Gas Network Code isin force, regulating entitlements of transport capacity,obligations on part of both the transporter and the customer andthe procedures through which customers can resell capacity toother users. Transport capacity at entry points to the nationalgas pipeline network (point of interconnection with import gaslines) is entitled on an annual basis with duration of up to fivethermal years. Capacity products with duration shorter than oneyear are also available.

The Network Code, approved by the AEEG with Resolution No. 75of July 1, 2003, is based on the criteria set by the sameRegulator with Resolution No. 137/2002. This resolution setspriority criteria for transport capacity entitlements at pointswhere the Italian transport network connects with internationalimport pipelines (the so-called entry points to the Italiantransport system). Specifically, operators that are party totake-or-pay purchase contracts, as in such as Eni, are entitledto a priority in allocating available transport capacity withinthe limit of average daily contractual volumes. Gas volumesexceeding average daily contractual volumes are not entitled toany priority and, case of congestion at any entry points, theyare entitled available capacity on a proportionate basis togetherwith all pending requests for capacity entitlements. The abilityof Eni to collect gas volumes exceeding average daily volumes asprovided by its take-or-pay purchase contracts represents animportant operational flexibility that the Company uses tosatisfy demand peaks. In planning its commercial flows, theCompany normally assumes to fully utilize its contractualflexibility and to obtain the necessary capacity entitlements atthe entry points to the national transport network. Eni believesthat Resolution No. 137/2002 is in contrast with the rationale ofthe European regulatory framework on the gas market as providedin Directive No. 2003/55/EC. Based on that belief, the Companyhas opened an administrative procedure to repeal it before anadministrative court which has recently confirmed in partEni’s position. An upper grade court also confirmed theCompany’s position. Specifically, the Administrative Courtstated that the purchase of contractual flexibility is anobligation on part of the importer, which responds to acollective interest. According to the Administrative Court, thereis no reasonable motivation whereby volumes corresponding to suchcontractual flexibility should not be granted priority in theaccess to the network, also in case congestion occurs. At themoment, however, no case of congestion occurred at entry pointsto the Italian transport infrastructure so as to impairEni’s marketing plans.

*Balancing service.* On April 14, 2011, with ResolutionARG/gas No. 45/2011 effective from December 1, 2011, theAuthority for Electricity and Gas introduced economic criteriafor balancing services. Being the major Italian transportationcompany, Snam Rete Gas is qualified as the "Responsible forbalancing services" in Italy and is required to ensure aconstant balance of the national network providing necessaryresources for the safe and efficient management of movements ofgas from entry to exit points.

In a first application phase, the resolution provides for asimplified balancing mechanism in which Snam Rete Gas will berequired to daily ensure the national grid equilibrium coveringpotential imbalances through purchases of storage capacity atmarket prices as determined on the negotiation platform organizedand managed by the GME.

From April 2012, further changes in the relevant regulatoryframework for balancing services are expected to be set by theRegulator.

 

> 
*Re-gasification*

*Re-gasification tariffs.* The AEEG has set the criteriaregulating the tariffs for the use of LNG terminals in the 3rdregulatory period (October 2008-September 2012) with itsResolution ARG/gas No. 92/2008.

The Regulatory Asset Base (RAB) is calculated with there-valuated historical cost methodology. The yearly adjustment ofrevenues and tariffs will follow the same methodologies appliedin the previous regulatory period, except for depreciation thatwill be adjusted on a yearly basis and excluded from the pricecap mechanism. The allowed rate of return (WACC) on RegulatoryAsset Base has been set equal to 7.6% in real terms pre-tax.

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Furthermore, it established an additional remuneration, up to3% above WACC, for new capital expenditures for a maximum of 16years.

Operating costs will be adjusted every year taking intoaccount inflation and efficiency gains (X-factor) set by theAuthority at 0.5% in real terms.

Resolution ARG/gas No. 92/2008 also established that theallocation of reference revenues between re-gasification capacityand the commodity component is fixed at 90:10 (compared to 80:20ratio in the second regulated period).

*Re-gasification Code.* From 2007 GNL ItaliaRe-gasification Code is in force, defining rules and regulationsfor the operation and management of the re-gasification plant ofPanigaglia in North-West Italy. The Code, approved with theResolution VIS No. 8/2009, is based on the criteria for access toLNG re-gasification services set by the same Regulator withResolution No. 167/2005 (August 1, 2005) in accordance withLegislative Decree No. 164/2000. The decision also definescriteria for the allocation of re-gasification capacity. Inparticular it establishes that take-or-pay contracts entered intobefore 1998, as in the case of Eni, are awarded priority accesslimited to the minimum amount of volumes that have beenre-gasified in the period starting from thermal year 2001-2002.Eni filed a claim against this decision with the RegionalAdministrative Court of Lombardy that rejected the claim.Subsequently, Eni filed a claim with a higher degreeadministrative court.

 

> 
*Distribution*

Distribution is the activity of delivering natural gas toresidential and commercial customers in urban centers through lowpressure networks. Distribution is considered a public serviceoperated in concession and is regulated on the basis of LawDecree No. 164/2000.

*Distribution tariffs.* With Resolution ARG/gas No.159/2008, the AEEG defined a new methodology for determiningrevenues for natural gas distribution activity. Starting fromJanuary 1, 2009 and for the duration of a four-year regulatedperiod, i.e. until December 31, 2012, the resolution provides forthe recognition of total revenues for each regulated yearamounting to a value that the Authority will set at the time ofapproving the operators’ requests for distribution tariffsand defined as Total Revenue Constraint (TRC), representing themaximum remuneration recognized by the AEEG to each operator forcovering costs borne.

In previous years, revenues were determined by applyingtariffs set by the AEEG to volumes actually distributed toselling companies in the relevant year. The resolution alsoprovides for any positive or negative difference between TRC andrevenues resulting from invoices for actually distributed volumesto be regulated through an equalization device making use ofcredit/debit cards lodged with the Electricity EqualizationExchange.

As a result of the new mechanism, revenues are no longerrelated to the seasonality of volumes distributed but areconstantly apportioned during the year. The introduction of thisnew mechanism does not cause a decline in total revenues on ayearly basis.

 

> 
*Storage of natural gas*

Storage activities in Italy are regulated by Decree No.164/2000, as amended by Legislative Decree No. 93/2011.The most important aspects of Decree No. 164 concerningstorage activities are the following: (i) in verticallyintegrated enterprises, storage is to be carried out by aseparate company not operating in other gas activities (such asEni’s subsidiary Stoccaggi Gas Italia SpA) or by companiesengaged only in transport and dispatching activities, providedthe accounts of these two activities are clearly separated fromthe accounts of storage; (ii) storage activity is exercisedpursuant to concessions granted by the Ministry of ProductiveActivities. The duration of a concession is 20 years, with thepossibility of obtaining two ten-year extensions if operatorscomplied with the storage programs and other obligations derivingfrom applicable laws. Existing storage concessions are subject tothe decree. Their original term was confirmed and includesrelevant production concessions; (iii) the need for strategicstorage in Italy is defined explicitly; the burden of strategicstorage is imposed upon companies that perform gas productionactivities and companies that perform gas importation activitiesfrom EU or non-EU countries, which have to provide a strategicstorage capacity in Italy corresponding to an amount definedyearly by Decree of Ministry of Economic Development according tothe natural gas imported and supply infrastructure; (iv) holdersof storage concessions are required to provide storage capacityfor domestic production, for strategic use and for modulation toeligible users without discriminations, where technically andeconomically viable; (v) modulation storage costs are charged toshippers which have to provide modulation services adequate tothe requirements of their final customers; (vi) storage tariffscriteria are determined by the AEEG in order to ensure a presetreturn on capital employed, taking into account the typical riskinherent in this activity, as well as volumes stored for ensuringpeak supplies and the need to incentive capital 

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expenditure for upgrading the storage system; and (vii) theAEEG establishes the criteria and priority of access storageoperators have to include in their own storage codes.

In compliance with the provisions of Article 21 of Decree No.164/2000, on October 21, 2001 all storage activities carried outwithin the Eni Group were conferred to Stoccaggi Gas Italia SpA("Stogit"), which holds ten storage concessions.

*Storage tariffs.*On August 3, 2010, the AEEG withResolution ARG/gas No. 119/2010 published the criteria fordetermining storage tariffs for the 2011-2014 regulated period.

| According to this resolution, the        storage company calculates revenues for the determination        of unit tariffs for storage services by adding the        following cost elements: |
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (i)   |   | a return on the capital        employed by the storage company equal to 6.7% real        pre-tax (7.1% in the second regulated period); |
|-------|--------|-----------------------------------------------------------------------------------------------------------------------------------------|
| (ii)  |   | depreciation and        amortization charges;                                                                                           |
| (iii) |   | dismantling costs; and                                                                                                                  |
| (iv)  |   | operating costs.                                                                                                                        |

In the years following the first year of the new regulatedperiod, reference revenues are updated to take account ofvariations of capital employed and the impact of the indexationof depreciation charges and operating costs to consumer priceinflation lowered by a preset rate of productivity recovery setat 0.6% (2% on operating costs and 1.5% on amortization anddepreciation in the previous regulatory period).

Applicable regulation provides for incentives to capitalexpenditures intended to develop and upgrade storage capacity byrecognizing an additional rate of return of 4% on the basic rateto capital expenditure projects aiming at developing new storagedeposits and increasing existing capacity. Such incentives areapplicable for a sixteen-year period and an eight-year period,respectively.

*Storage Code.*From November 1, 2006 Stoccaggi GasItalia (Stogit) Storage Code is in force.

This Code regulates access to and provision of storageservices during normal operational conditions, regulatesprocedures for conferring storage capacities, fees to be chargedto customers in case they uplift from or input to storage sitesvolumes in excess or uses higher input/uplift capacity withrespect to scheduled and operating programs. On the basis ofthese provisions, Eni may incur significant charges for storageservices should the Company fail to use storage services inaccordance with scheduled operating programs.

The storage company offers services according to the accesspriority established by the AEEG as follows: (i) mandatoryservices, including modulation storage, mineral storage, andstrategic storage services; and (ii) services for operating needsof transport companies, including hourly modulation.

The modulation storage service is geared towards satisfyingmodulation needs of natural gas users in terms of peakconsumption and daily or seasonal trends in consumption. Theshippers who provides final clients consuming less than 200,000CM on an annual basis are entitled to a priority when satisfyingtheir modulation requirements. To that end, the storage companymakes available its capacity for space, injection and off-take onan annual basis in accordance with its storage code.

The mineral storage service aims to allow natural gasproducers to perform their activity under optimal operatingconditions, according to criteria determined by the Ministry forEconomic Development.

The strategic storage service aims to satisfy certainobligations of natural gas importers in accordance with Article 3of Legislative Decree No. 164/2000, as amended by LegislativeDecree No. 93/2011. The relevant storage capacity dedicated tothis service is determined by the Ministry for EconomicDevelopment.

The first requests to be met are those for strategic storageand for the operating balancing of the system.

The residual capacity available and the maximum daily upliftcapacity is awarded according to the following order of priorityto: (i) holders of production concessions requesting mineralstorage services; (ii) natural gas selling operators who are heldto provide a modulation service of their supply to theircustomers according to Article 18, paragraphs 2 and 3 ofLegislative Decree No. 164/2000, for maximum volumescorresponding to a seasonal demand peak with averagetemperatures, on the terms and conditions established by aprocedure to be issued by the Regulatory Authority forElectricity and Gas; (iii) to the entities mentioned in (ii)above only for those additional maximum volumes related to aseasonal demand peak in case of certain low temperatures measuredon a 20-year period, under the terms and conditions of theprocedure mentioned in (ii) above; and (iv) the entitiesrequesting access for services different from the ones mentionedabove.

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From November 2009, according to the Resolution No. 165/2009set by the Regulator, monthly based storage services areavailable for gas-network users (Shippers). Storage capacitiesare sold on auction basis.

From April 2011, according to the Legislative Decree No.130/2010 and to the Resolution ARG/gas No. 13/2011, the storagecapacity is offered also to the industrial and power generationclients which have committed to fund the development plan ofstorage capacity. The duration of these contracts are multiannual and the industrial and power generation clients can usethe capacity gradually available.

Eni held natural gas for strategic reserve purposes in itsstorage business, as established by Decree No. 164/2000.

The strategic reserves of gas are defined as "stockdestined to meet situations of deficit/decrease of supply orcrisis of the gas system". The Ministry for EconomicDevelopment determines quantities and usage criteria of suchreserves. As of December 31, 2011, Eni held approximately 177 BCFof strategic reserves of natural gas (177 BCF at year end 2010).

 

> 
***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.* Marketing. Following the enactment of theabove mentioned Law Decree No. 1 on January 24, 2012, certainmeasures are expected to be introduced in order to increaselevels of competition in the retail marketing of fuels. The normsregulating 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, 2001establishes 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.

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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.

Law No. 96 of June 4, 2010 requires the government to followsome principles and criteria in drafting the Legislative Decreethat shall implement, by December 31, 2012, Directive No.2009/119/EC (imposing an obligation on Member States to maintainminimum stocks of crude oil and/or petroleum products), inparticular: (a) keep a high level of oil security of supplythrough a reliable mechanism to assure the physical access to oilemergency and specific stocks; and (b) provide for theinstitution of a Central Stockholding Entity under the control ofthe Ministry for Economic Development – with the mandatoryparticipation of entities who have imported oil or petroleumproducts – that should be in charge of: (i) the holding andtransport of specific stocks of products; (ii) the stocktaking;(iii) the statistics on emergency, specific and commercialstocks; and, eventually; and (iv) the provision of a storage andtransportation service of emergency and commercial stocks infavor of sellers of petroleum products to final clients notvertically integrated in the oil chain.

As of December 31, 2011, Eni owned 6.7 mmtonnes of oilproducts inventories, of which 4.1 mmtonnes as "compulsorystocks", 2.2 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, 2011) wereheld in term of crude oil (31%), light and medium distillates(49%), fuel oil (16%) and other products (4%) and they werelocated throughout the Italian territory both in refineries (76%)and in storage sites (24%).

 

> 
***Competition***

| Like all Italian companies, Eni is        subject to Italian and EU competition rules. EU        competition rules are set forth in Articles 101 and 102        of the Lisbon Treaty on the Functioning of the European        Union entered into force on December 1, 2009        ("Article 101" and "Article 102",        respectively being the result of the new denomination of        former Articles 81 and 82 of the Treaty of Rome as        amended by the Treaty of Amsterdam dated October 2, 1997        and entered into force on May 1, 1999) and EU Merger        Control Regulation No. 139 of 2004 ("EU Regulation        139"). Article 101 prohibits collusion among        competitors that may affect trade among Member States and        that has the object or effect of restricting competition        within the EU. Article 102 prohibits any abuse of a        dominant position within a substantial part of the EU        that may affect trade among Member States. EU Regulation        139 sets certain turnover limits for cross-border        transactions, above which enforcement authority rests        with the European Commission and below which enforcement        is carried out by national competition authorities, such        as the Antitrust Authority in the case of Italy. On May        1, 2004, a new regulation of the European Council came        into force (No. 1/2003) which substitutes Regulation No.        17/1962 on the implementation of the rules on competition        laid down in Articles 101 and 102 of the Treaty. In order        to simplify the procedures required of undertakings in        case of conducts that potentially fall within the scope        of Article 101 and 102 of 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; |
|--------|--------|-------------------------------------------------------------|

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| • |   | 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 per centor more of the Company’ worldwide proved oil and gasreserves and management is committed to invest material amountsof expenditures 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, 2011, there were 264 fully consolidated subsidiaries and 72associates 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 2011".

 

**Item 4A. UNRESOLVED STAFF COMMENTS**

***None.***

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##### Table of Contents

**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.*

*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 of euro 6,860 million for the yearended December 31, 2011, representing an increase of 8.6% from2010. That amount represented net profit attributable toEni’s shareholders.

The Group operating profit for the year ended December 31,2011 amounted to euro 17,435 million, up 8.2% from 2010. The maindrivers of this increase were: (i) a positive operatingperformance reported by the Exploration & Productionsegment due to higher oil&gas realizations in dollar terms.The better performance was achieved in spite of the disruption inthe production flows from Eni’s activities in Libya causedby the conflict in that country which materially impacted ouractivities from February through September 2011. The Company hasachieved a production recovery in Libya in the last part of theyear which is currently underway targeting to restore thepre-crisis production levels aiming at full ramp up by the secondhalf of 2012; and (ii) higher results of the Engineering &Construction segment which were driven by revenue growth andincreased profitability of acquired orders. In contrast, thedownstream businesses incurred sharply lower results. TheMarketing business of the Gas & Power segment was impacted byweak demand and rising competitive pressures fuelled byoversupply which negatively impacted selling margins and reducedvolumes opportunities. The performance was also impacted by thedisruption in the Libyan gas availability which affected both thesupply mix and sales to shippers which import Libyan gas toItaly. Results of the Marketing business did not take intoaccount the full economic benefits of the ongoing renegotiationof gas supply contracts as certain renegotiations wererescheduled thus postponing the recognition of the economiceffect. A preliminary agreement on such renegotiations has beenachieved early in 2012; management believes that the closing willtake place shortly and expects to recognize the associatedbenefits in 2012 profit. Those benefits will be retroactive fromthe beginning of 2011. The downstream refining and petrochemicalbusinesses reported deeper operating losses which were impactedby sharply lower margins and weak sales volumes due to thedownturn.

Operating profit benefited from the recognition of aninventory holding gain amounting to euro 1,113 million (euro 881million in 2010), reflecting the impact of rising prices of crudeoil and products on year-end valuation of inventories accordingto the average-cost method of inventory accounting. These gainswere partly offset by impairment losses of euro 1,021 million(euro 698 million in 2010) which were recorded to write down thebook values of certain tangible and intangible assets to theirlower values-in-use mainly in the refining and gas marketingbusinesses. In performing the impairment review, managementassumed a reduced profitability outlook in these businessesdriven by a deteriorating macroeconomic environment, volatilityof commodity prices, and rising competitive pressures. Otherimpairment losses regarded a number of oil&gas properties inthe Exploration & Production segment reflecting a changed gasprices scenario and downward reserve revisions, as well as amarginal line of business in the Petrochemical segment due tolack of profitability perspectives.

Group results for the year also benefited from a gain of euro1,044 million recorded on the divestment of Eni’s interestsin the international pipelines engaged in the internationaltransport of gas from Northern Europe and Russia.

Net cash provided by operating activities amounted to euro14,382 million for the year ended December 31, 2011 and proceedsfrom divestments amounted to euro 1,912 million, mainly relatingto the divestment of the Company’s interests in the abovementioned entities engaged in the international transport of gasfrom Northern Europe and Russia. These inflows were used topartially fund the cash outflows relating to capital expenditurestotaling euro 13,438 million and dividend payments to Eni’sshareholders amounting to euro 3,695 million. Dividends paid tonon-controlling interests amounted to euro 552 million, mainlyrelating to Saipem and Snam Rete Gas.

As of December 31, 2011 net borrowings amounted to euro 28,032million, an increase of euro 1,913 million from December 31,2010.

In 2011, oil and natural gas production available for saleaveraged 1,523 KBOE/d compared to 1,757 KBOE/d in 2010 (down by13.3%). Lower production was driven by a disruption in Eni'sactivities in Libya, which were affected by the shut down ofalmost all the Company plants and facilities including theGreenStream pipeline throughout the peak of the country’sinternal crisis (approximately 8 months). Performance was alsonegatively impacted by lower entitlements in the Company’sPSAs due to higher oil prices with an overall effect estimated atapproximately 30

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KBOE/d compared to the previous year. When excluding thesenegative effects, the production was unchanged. The ramp-up ofthe fields started in 2010 and the 2011 start-ups offset a lowerthan-anticipated growth in Iraq and the impact of plannedfacility downtimes.

Eni’s worldwide gas sales in 2011 amounted to 96.76 BCM,substantially unchanged from 2010 as lower volumes supplied toimporters of natural gas in Italy (down 5.20 BCM or 61.6%)reflecting the disruption in the Libyan gas were offset by growthachieved in the Italian market (up 0.39 BCM, or 1.1%) and in anumber of European markets (up by 3.66 BCM, or 7.9%).

| In 2011, capital expenditures amounted        to euro 13,438 million (euro 13,870 million in 2010) and        related mainly to: |
|----------------------------------------------------------------------------------------------------------------------------------|

| • |   | oil and gas development        activities (euro 7,357 million) deployed mainly in        Norway, Kazakhstan, Algeria, the Unites States, Congo and        Egypt;                                                                                                                                                                                |
|--------|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| • |   | exploratory projects (euro        1,210 million) of which 97% was spent outside Italy,        primarily in Australia, Angola, Mozambique, Indonesia,        Ghana, Egypt, Nigeria and Norway;                                                                                                                                                   |
| • |   | upgrading of the fleet used        in the Engineering & Construction segment (euro 1,090        million);                                                                                                                                                                                                                                   |
| • |   | development and upgrading of        Eni’s natural gas transport network in Italy (euro        898 million) and distribution network (euro 337 million),        the development and the increase of storage capacity        (euro 294 million), as well as the ongoing development of        power generation plants (euro 87 million); and |
| • |   | projects aimed at improving        the conversion capacity and flexibility of refineries        (euro 629 million), as well as building and upgrading        service stations in Italy and outside Italy (euro 228        million).                                                                                                             |

During the 2012-2015 four-year period, Eni expects to investapproximately euro 59.6 billion in capital expenditures andexploration projects to implement its growth strategy, based onthe assumptions discussed below under "Management’sExpectation of Operations".

 

> 
***Trading Environment***

|   |   | **2009** |   | **2010** |   | **2011** |
|--------|--------|----------|--------|----------|--------|----------|
|   |   |          |   |          |   |          |

| Average price of Brent dated crude oil in U.S.        dollars (1) |   | 61.51 |   | 79.47 |   | 111.27 |
|-------------------------------------------------------------------|--------|-------|--------|-------|--------|--------|
| Average        price of Brent dated crude oil in euro (2)         |   | 44.16 |   | 59.89 |   | 79.94  |
| Average EUR/USD exchange rate (3)                                 |   | 1.393 |   | 1.327 |   | 1.392  |
| Average        European refining margin in U.S. dollars (4)       |   | 3.13  |   | 2.66  |   | 2.06   |
| NBP gas price in U.S. dollars (5)                                 |   | 4.78  |   | 6.56  |   | 9.03   |
| Euribor -        three month euro rate % (3)                      |   | 1.2   |   | 0.8   |   | 1.4    |
|                                                              |   |       |   |       |   |        |

----

| (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.                                                                        |
| (5) | i | Price per        million BTU. Source: Platt’s Oilgram.                                                                                                                                                  |

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.Conflicts and unrests in producing countries can also affectproduction significantly. See "Item 3 – RiskFactors".

In 2011, Eni’s results were helped by stronger oil andgas realizations (up by 30% on average) reflecting a 40% increasein the price of the Brent crude benchmark compared to 2010.Refining margins remained at unprofitable levels (the markerBrent margin was $2.06 per barrel; down 22.6% from 2010) due tohigh feedstock costs which were only partially transferred toprices at the pump pressured by weak demand and excess capacity.Eni’s margins were also negatively impacted by narrowinglight-heavy crude differentials in the Mediterranean areadragging down the profitability of Eni’s high conversionrefineries. In Europe, gas spot prices increased by 37.7%compared with the depressed levels registered in 2010. Thispositive trend was not reflected in Eni’s gas sale marginsdue to higher oil-linked supply costs and rising competitivepressure.

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Group results were also negatively affected by theappreciation of the euro vs. the U.S. dollar (+4.9%).

 

> 
***Key Consolidated Financial Data***

|   |   | **2009** |   | **2010** |   | **2011** |
|--------|--------|----------|--------|----------|--------|----------|
|   |   |          |   |          |   |          |

|   |   | **(euro million)** |
|--------|--------|--------------------|

| Net sales from operations                                                                                                  |   |             |   | 83,227 |   | 98,523 |   | 109,589 |
|----------------------------------------------------------------------------------------------------------------------------|--------|------------------|--------|--------|--------|--------|--------|---------|
| Operating        profit                                                                                                    |   |             |   | 12,055 |   | 16,111 |   | 17,435  |
| Net profit attributable to Eni                                                                                             |   |             |   | 4,367  |   | 6,318  |   | 6,860   |
| Net cash        provided by operating activities                                                                           |   |             |   | 11,136 |   | 14,694 |   | 14,382  |
| Capital expenditures                                                                                                       |   |             |   | 13,695 |   | 13,870 |   | 13,438  |
| Acquisitions        of investments and businesses (1)                                                                      |   |             |   | 2,323  |   | 410    |   | 360     |
| Shareholders’ equity including        non-controlling interest at year end                                            |   |             |   | 50,051 |   | 55,728 |   | 60,393  |
| Net        borrowings at year end                                                                                          |   |             |   | 23,055 |   | 26,119 |   | 28,032  |
| Net profit attributable to Eni basic and diluted                                                                           |   | (euro per share) |   | 1.21   |   | 1.74   |   | 1.89    |
| Dividend        per share (2)                                                                                              |   | (euro per share) |   | 1.00   |   | 1.00   |   | 1.04    |
| Ratio of net borrowings to total        shareholders’ equity including non-controlling        interest (leverage) (3) |   |             |   | 0.46   |   | 0.47   |   | 0.46    |
|                                                                                                                       |   |             |   |        |   |        |   |         |

----

| (1) |    | This item        includes acquired net borrowings.                                                                                                                                                                                                                                   |
|-----|--------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| (2) |    | As resolved        by the Annual General Shareholders’ Meeting. The        dividend is ordinarily paid in two tranches: an interim        dividend is paid in a given reference year, the balance        is paid in the next year following shareholders’        approval. |
| (3) |    | 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 company’s Consolidated Financial Statements areprepared in accordance with IFRS. The preparation of theConsolidated Financial Statements requires the use of estimatesand assumptions that affect the assets, liabilities, revenues andexpenses reported in the financial statements, as well as amountsincluded in the notes thereto, including discussion anddisclosure of contingent liabilities. Estimates made are based oncomplex or subjective judgments and past experience of otherassumptions deemed reasonable in consideration of the informationavailable at the time. The accounting policies and areas thatrequire the most significant judgments and estimates to be usedin the preparation of the Consolidated Financial Statements arein relation to the accounting for oil and natural gas activities,specifically in the determination of proved and proved developedreserves, impairment of fixed assets, intangible assets andgoodwill, asset retirement obligations, business combinations,pensions and other post-retirement benefits, recognition ofenvironmental liabilities and recognition of revenues in theoilfield services construction and engineering businesses. Asummary of significant estimates 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

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that ultimately will be recovered. Oil and natural gasreserves have a direct impact on certain amounts reported in theConsolidated Financial Statements. Estimated proved reserves areused in determining depreciation and depletion expenses andimpairment expense. Depreciation rates on oil and gas assetsusing the UOP basis are determined from the ratio between theamount of hydrocarbons extracted in the quarter and proveddeveloped reserves existing at the end of the quarter increasedby the amounts extracted during the quarter. Assuming all othervariables are held constant, an increase in estimated proveddeveloped reserves for each field decreases depreciation,depletion and amortization expense. Conversely, a decrease inestimated proved developed reserves increases depreciation,depletion and amortization expense. In addition, estimated provedreserves are used to calculate future cash flows from oil and gasproperties, which serve as an indicator in determining whether ornot property impairment is to be carried out. The larger thevolume of estimated reserves, the lower the likelihood of assetimpairment.

 

> 
***Impairment of assets***

Tangible assets and intangible assets, including goodwill, areimpaired when there are events or changes in circumstances thatindicate that the carrying values of the assets are notrecoverable. Such impairment indicators include changes in theGroup’s business plans, changes in commodity prices leadingto unprofitable performance, a reduced utilization of the plantsand, for oil and gas properties, significant downward revisionsof estimated proved reserve quantities or significant increase ofthe estimated development costs. Determination as to whether andhow much an asset is impaired involves management estimates onhighly uncertain and complex matters such as future commodityprices, the effects of inflation and technology improvements onoperating expenses, production profiles and the outlook forglobal or regional market supply and demand conditions for crudeoil, natural gas, commodity chemicals and refined products.Similar remarks are valid for the physical recoverability ofassets recognized in the balance sheet (deferred costs – seealso item “Current assets”) related to natural gasvolumes not collected under long-term purchase contracts withtake-or-pay clauses.

The amount of an impairment loss is determined by comparingthe book value of an asset with its recoverable amount. Therecoverable amount is the greater of fair value net of disposalcost or the value in use. The estimated value in use is based onthe present values of expected future cash flows net of disposalcosts. The expected future cash flows used for impairmentanalyses are based on judgmental assessments of future productionvolumes, prices and costs, considering available information atthe date of review and are discounted by using a rate related tothe activity involved. For oil and natural gas properties, theexpected future cash flows are estimated principally based ondeveloped and non-developed proved reserves including, amongother elements, production taxes and the costs to be incurred forthe reserves yet to be developed. Oil, natural gas and petroleumproduct prices (and prices of products which are derived fromthere) used to quantify the expected future cash flows areestimated based on forward prices prevailing in the marketplacefor the first 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 rate reflects the current market valuation of thetime value of money and of the specific risks of the asset notreflected in the estimate of the future cash flows. Goodwill andother intangible assets with an indefinite useful life are notsubject to amortization. The Company tests for impairment suchassets at the cash-generating unit level on an annual basis andwhenever there is an indication that they may be impaired. Inparticular, goodwill impairment is based on the lowest level(cash generating unit) to which goodwill can be allocated on areasonable and consistent basis. A cash generating unit is thesmallest aggregate on which the Company, directly or indirectly,evaluates the return on the capital expenditure. If therecoverable amount of a cash generating unit is lower than thecarrying amount, goodwill attributed to that cash generating unitis impaired up to that difference; if the carrying amount ofgoodwill is less than the amount of impairment, assets of thecash generating unit are impaired pro-rata on the basis of theircarrying amount for the residual 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.

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 

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production location). When liabilities are initially recorded,the related fixed assets are increased by an equal correspondingamount. The liabilities are increased with the passage of time(i.e. interest accretion) and any change in the estimatesfollowing the modification of future cash flows and discount rateadopted. The recognized asset retirement obligations are based onfuture retirement cost estimates and incorporate many assumptionssuch as: expected recoverable quantities of crude oil and naturalgas, abandonment time, future inflation rates and the risk-freerate of 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 acquisitions, typically engages an independentappraisal firm to assist in the fair value determination of theacquired 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 Decree No.471/1999 of the Ministry for the Environment concerning theremediation of contaminated sites; (iii) the possible effects offuture environmental legislations and rules; (iv) the effects ofpossible technological changes relating to future remediation;and (v) the possibility of litigation and the difficulty ofdetermining Eni’s liability, if any, against otherpotentially responsible parties with respect to such litigationsand the possible 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 by country; (ii) the future salary levels of theindividual employees are determined including an estimate offuture changes attributed to general price levels (consistentwith inflation rate assumptions), productivity, seniority andpromotion; (iii) healthcare cost trend assumptions reflectan estimate of the actual future changes in the cost of thehealthcare related benefits provided to the plan participants andare based on past and current healthcare cost trends includinghealthcare inflation, changes in healthcare utilization andchanges in health status of the participants;(iv) demographic assumptions such as mortality, disabilityand turnover reflect the best estimate of these future events forindividual employees involved; and (v) determination of theexpected rates of return on assets is made through compoundaveraging. For each plan, the distribution of investments amongbonds, equity and cash and their specific average expected rateof return is taken into account. Differences between expected andactual costs and between the expected return and the actualreturn on plan assets routinely occur and are called actuarialgains and losses. Eni applies the corridor method to amortize itsactuarial losses and gains. This method amortizes on a pro-ratabasis the net cumulative unrecognized actuarial gains and lossesat the end of the previous reporting period that exceed thegreater of 10% of: (i) the present value of the definedbenefit obligation; and (ii) the fair value of plan assets, overthe average expected remaining working lives of the employeesparticipating in the plan. Additionally, obligations for otherlong-term benefits are determined by adopting actuarialassumptions. The effects of changes in actuarial assumptions or achange in the characteristics of the benefit are taken to theprofit or loss in their entirety.

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> 
***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.

 

**2009-2011 Group Results of Operations**

> 
***Overview of the Profit and Loss Account for Three    Years Ended December 31, 2009, 2010 and 2011***

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.

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

|   |   | **2009** |   | **2010** |   | **2011** |
|--------|--------|----------|--------|----------|--------|----------|
|   |   |          |   |          |   |          |

|   |   | **(euro million)** |
|--------|--------|--------------------|

| Net sales from operations                                    |   | 83,227     |   |   | 98,523     |   |   | 109,589    |   |
|--------------------------------------------------------------|--------|------------|--------|--------|------------|--------|--------|------------|--------|
| Other        income and revenues (1)                         |   | 1,118      |   |   | 956        |   |   | 933        |   |
|                                                         |   |            |        |   |            |        |   |            |        |
| Total revenues                                               |   | 84,345     |   |   | 99,479     |   |   | 110,522    |   |
| Operating        expenses                                    |   | (62,532    | )      |   | (73,920    | )      |   | (83,940    | )      |
| Other operating (expense) income (2)                         |   | 55         |   |   | 131        |   |   | 171        |   |
| Depreciation,        depletion, amortization and impairments |   | (9,813     | )      |   | (9,579     | )      |   | (9,318     | )      |
|                                                         |   |            |        |   |            |        |   |            |        |
| **OPERATING PROFIT**                                         |   | **12,055** |   |   | **16,111** |   |   | **17,435** |   |
| Finance        income (expense)                              |   | (551       | )      |   | (727       | )      |   | (1,129     | )      |
| Income (expense) from investments                            |   | 569        |   |   | 1,156      |   |   | 2,171      |   |
|                                                         |   |            |        |   |            |        |   |            |        |
| **PROFIT        BEFORE INCOME TAXES**                        |   | **12,073** |   |   | **16,540** |   |   | **18,477** |   |
| Income taxes                                                 |   | (6,756     | )      |   | (9,157     | )      |   | (10,674    | )      |
|                                                         |   |            |        |   |            |        |   |            |        |
| **NET        PROFIT**                                        |   | **5,317**  |   |   | **7,383**  |   |   | **7,803**  |   |
| Attributable to:                                             |   |       |   |   |       |   |   |       |   |
| **- Eni**                                                    |   | **4,367**  |   |   | **6,318**  |   |   | **6,860**  |   |
| - non-controlling interest                                   |   | 950        |   |   | 1,065      |   |   | 943        |   |
|                                                         |   |            |        |   |            |        |   |            |        |

----

| (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. |
|-----|--------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| (2) |    | The Company        reports gains and losses on non-hedging commodity        derivative instruments, including both fair value        re-measurement and settled transactions, as items of        operating profit.                       |

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The table below sets forth certain income statement items as apercentage of net sales from operations for the periodsindicated.

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

|   |   | **2009** |   | **2010** |   | **2011** |
|--------|--------|----------|--------|----------|--------|----------|
|   |   |          |   |          |   |          |

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

| Operating expenses                                           |   | 75.1     |   | 75.0     |   | 76.6     |
|--------------------------------------------------------------|--------|----------|--------|----------|--------|----------|
| Depreciation,        depletion, amortization and impairments |   | 11.8     |   | 9.7      |   | 8.5      |
| **OPERATING PROFIT**                                         |   | **14.5** |   | **16.4** |   | **15.9** |
|                                                         |   |          |   |          |   |          |

 

| *2011 compared to 2010.* Net profit        attributable to Eni’s shareholders in 2011 was euro        6,860 million, an increase of euro 542 million from 2010,        or 8.6%. This increase was driven by: |
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (i)   |   | an improved operating        performance (up by 8.2% from 2010) which was mainly        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 Petrochemicals 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 (approximately euro 1,000        million).                                                                                                                                                                                                                                                                                                                                                   |

These increases were partly offset by higher income taxes (upeuro 1,517 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; andincurred higher income taxes currently payable (euro 221 million)following enactment of new tax provisions for Italiansubsidiaries whereby the Italian windfall tax levied on energycompanies (the so-called Robin Tax) was increased by 4 percentagepoints to 10.5% and its scope enlarged to include gas transportand distribution companies (for more details on these items see"Taxation" below).

| *2010 compared to 2009.*Net profit        attributable to Eni’s shareholders in 2010 was euro        6,318 million, an increase of euro 1,951 million from        2009, or 44.7%. This increase was driven by: |
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (i)   |   | an improved operating        performance (up by 33.6% from 2009) which was mainly        reported by the Exploration & Production segment (up        by 52%), reflecting a favorable trading environment.        Improved operating results were also reported by the        Engineering & Construction segment due to strong        business trends, while the Petrochemicals and the        Refining & Marketing segments achieved an improved        performance in spite of difficult market conditions.        Those gains were partly offset by sharply lower results        recorded by the Gas & Power segment which was        hit by a weak trading environment, and higher        environmental charges up by approximately euro 1.1        billion mainly due to the recognition of a provision to        account for the proposed global environmental settlement        with the Italian Ministry for the Environment as        discussed in the paragraph "Significant        Transactions"; |
|-------|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| (ii)  |   | recognition of higher        inventory holding gains in particular in the Gas &        Power segment. This increase is associated with rising        gas prices which resulted in an increased carrying amount        of gas inventories recorded under the weighted average        cost method; and                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |
| (iii) |   | higher profits reported from        equity-accounted and cost-accounted entities, including        certain gains on divestments of assets (approximately        euro 300 million).                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |

These increases were partly offset by higher income taxes (upeuro 2,401 million compared to 2009) mainly reflecting higherincome taxes currently payable by subsidiaries in the Exploration& Production segment operating outside Italy due to highertaxable profit.

 

 

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The table below sets forth, for the periods indicated, detailof gains and charges included in net profit attributable toEni’s shareholders. 

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

| **Eni’s        Group** |   | **2009** |   | **2010** |   | **2011** |
|-----------------------------|--------|----------|--------|----------|--------|----------|
|                        |   |          |   |          |   |          |

|   |   | **(euro million)** |
|--------|--------|--------------------|

| Profit (loss) on stock                                                    |   | 345        |   |   | 881        |   |   | 1,113    |   |
|---------------------------------------------------------------------------|--------|------------|--------|--------|------------|--------|--------|----------|--------|
| Expected        settlement of TSKJ proceeding                             |   | (250       | )      |   |       |   |   |     |   |
| Settlement/payments on Antitrust and other        Authorities proceedings |   |       |   |   | 246        |   |   | (69      | )      |
| Environmental        charges                                              |   | (298       | )      |   | (1,369     | )      |   | (186     | )      |
| Asset impairments                                                         |   | (1,162     | )      |   | (702       | )      |   | (1,022   | )      |
| Net gains        on disposal of assets                                    |   | 277        |   |   | 248        |   |   | 61       |   |
| Risk provisions                                                           |   | (128       | )      |   | (95        | )      |   | (88      | )      |
| Provision        for redundancy incentives                                |   | (134       | )      |   | (423       | )      |   | (209     | )      |
| Re-measurement gains/losses on commodity        derivatives               |   | 287        |   |   | 2          |   |   | (15      | )      |
| Other                                                                     |   | (4         | )      |   | 19         |   |   | (124     | )      |
|                                                                      |   |            |        |   |            |        |   |          |        |
|                                                                      |   | **(1,067** | **)**  |   | **(1,193** | **)**  |   | **(539** | **)**  |
|                                                                      |   |            |        |   |            |        |   |          |        |

 

> 
***Analysis of the Line Items of the Profit and Loss    Account***

***a) Total Revenues***

Eni’s total revenues were euro 110,522 million, euro99,479 million and euro 84,345 million for the year endedDecember 31, 2011, 2010 and 2009, respectively. Total revenuesconsist of net sales from operations and other income andrevenues. Eni’s net sales from operations amounted to euro109,589 million, euro 98,523 million and euro 83,227 million forthe year ended December 31, 2011, 2010 and 2009, respectively,and its other income and revenues totaled euro 933 million, euro956 million and euro 1,118 million, respectively, in theseperiods.

 

> 
*Net sales from operations*

The table below sets forth, for the periods indicated, the netsales from operations generated by each of Eni’s businesssegments including intra-group sales, together with consolidatednet sales from operations.

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

|   |   | **2009** |   | **2010** |   | **2011** |
|--------|--------|----------|--------|----------|--------|----------|
|   |   |          |   |          |   |          |

|   |   | **(euro million)** |
|--------|--------|--------------------|

| Exploration & Production                                  |   | 23,801     |   |   | 29,497     |   |   | 29,121      |   |
|---------------------------------------------------------------|--------|------------|--------|--------|------------|--------|--------|-------------|--------|
| Gas &        Power                                        |   | 30,447     |   |   | 29,576     |   |   | 34,731      |   |
| Refining & Marketing                                      |   | 31,769     |   |   | 43,190     |   |   | 51,219      |   |
| Petrochemicals                                                |   | 4,203      |   |   | 6,141      |   |   | 6,491       |   |
| Engineering & Construction                                |   | 9,664      |   |   | 10,581     |   |   | 11,834      |   |
| Other        activities                                       |   | 88         |   |   | 105        |   |   | 85          |   |
| Corporate and financial companies                             |   | 1,280      |   |   | 1,386      |   |   | 1,365       |   |
| Impact of        unrealized intragroup profit elimination (1) |   | (66        | )      |   | 100        |   |   | (54         | )      |
| Consolidation adjustment (2)                                  |   | (17,959    | )      |   | (22,053    | )      |   | (25,203     | )      |
|                                                          |   |            |        |   |            |        |   |             |        |
| **NET        SALES FROM OPERATIONS**                          |   | **83,227** |   |   | **98,523** |   |   | **109,589** |   |
|                                                          |   |            |        |   |            |        |   |             |        |

----

| (1) |    | This item        mainly concerned intragroup sales of goods, services and        capital assets recorded at period end in the assets of        the purchasing business segment.                                                                                                                                                                                                                                                                                                           |
|-----|--------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| (2) |    | 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        Note 35 to the Consolidated Financial Statements for a        breakdown of intragroup sales by segment for the reported        years. |

*2011 compared to 2010.* Eni’s net sales fromoperations (revenues) for 2011 (euro 109,589 million) increasedby euro 11,066 million from 2010 (or up 11.2%) primarilyreflecting higher realizations on oil, products and natural gasin dollar terms.

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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 (see page 119).

Revenues generated by the Gas & Power segment (euro 34,731million) increased by euro 5,155 million (or up 17.4%) 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 Petrochemical 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 & Construction businesses.

*2010 compared to 2009.*Eni’s net sales fromoperations (revenues) for 2010 (euro 98,523 million) increased byeuro 15,296 million from 2009, or 18.4% from 2009, primarilyreflecting higher realizations on oil, refined products andnatural gas in U.S. dollar terms and the positive impact of thedepreciation of the euro against the U.S. dollar.

Revenues generated by the Exploration & Production segment(euro 29,497 million) increased by euro 5,696 million, or 23.9%,mainly due to higher realizations in U.S. dollar terms (oil up27.8%; natural gas up 7.1%) and the depreciation of the euro vs.the U.S. dollar. Eni’s average liquids realizationsdecreased by 1.33 $/BBL to 72.76 $/BBL due to the settlement ofcertain commodity derivatives relating to the sale of 28.5 mmBBL.The latter trend is going to continue in 2011 due to currenttrends in Brent oil prices.

Revenues generated by the Gas & Power segment (euro 29,576million) decreased by euro 871 million (or 2.9%) due to lowersales volumes in Italy (down 5.75 BCM, or 14.4%), partly offsetby the positive impact of a slight recovery in spot andoil-linked gas prices due to a less unfavorable pricingenvironment compared to 2009 which are reflected in Eni’srevenues. Increased sales volumes were also recorded in keyEuropean markets.

Revenues generated by the Refining & Marketing segment(euro 43,190 million) increased by euro 11,421 million (or 36%)reflecting higher selling prices of refined products.

Revenues generated by the Petrochemical segment (euro 6,141million) increased by euro 1,938 million (up 46.1%) mainlyreflecting higher average selling prices (up 35.6%) and arecovery in sales volumes (up 10.9%, mainly in the elastomersbusiness area) following stronger demand on end-markets comparedto the particularly weak trading environment of the previousyear.

Revenues generated by the Engineering & Constructionbusiness (euro 10,581 million) increased by euro 917 million, or9.5%, from 2009, as a result of increased activities in theonshore and drilling business units.

 

> 
***b) Operating Expenses***

The table below sets forth the components of Eni’soperating expenses for the periods indicated.

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

|   |   | **2009** |   | **2010** |   | **2011** |
|--------|--------|----------|--------|----------|--------|----------|
|   |   |          |   |          |   |          |

|   |   | **(euro million)** |
|--------|--------|--------------------|

| Purchases, services and other    |   | 58,351     |   | 69,135     |   | 79,191     |
|----------------------------------|--------|------------|--------|------------|--------|------------|
| Payroll        and related costs |   | 4,181      |   | 4,785      |   | 4,749      |
|                             |   |            |   |            |   |            |
| **Operating expenses**           |   | **62,532** |   | **73,920** |   | **83,940** |
|                             |   |            |   |            |   |            |

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*2011 compared to 2010.* Operating expenses for the year(euro 83,940 million) increased by euro 10,020 million from 2010,up 13.6%, reflecting primarily higher supply costs of purchasedgas, and refinery and petrochemical feedstock reflecting trendsin 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 section "LegalProceedings", under Note 40 "Guarantees, commitmentsand risks" in the notes to the consolidated financialstatements.

Payroll and related costs (euro 4,749 million) weresubstantially in line with the previous year (down by 0.8%).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 & Constructionbusiness), were partly offset by a reduction in the averagenumber of employees in Italy and a lower provision for redundancyincentives.

*2010 compared to 2009.*Operating expenses for the year(euro 73,920 million) increased by euro 11,388 million from 2009,up 18.2%, reflecting primarily higher supply costs of purchasedoil, gas and petrochemical feedstocks reflecting trends in thetrading environment, the depreciation of the euro against theU.S. dollar, as well as higher operating expenses reported by theupstream activities.

Purchases, services and other costs include environmental andother risk provisions for an overall amount of euro 1,291 millionmainly associated with an environmental provision recorded toaccount for a proposed global settlement on certain environmentalissues (euro 1,109 million) filed with the Italian Ministry forthe Environment, which is disclosed in the paragraph"Significant Transactions" below.

Payroll and related costs (euro 4,785 million) increased byeuro 604 million, or 14.4%, mainly due to higher unit labor costin Italy and outside Italy, partly due to exchange ratetranslation differences, the increase in the average number ofemployees outside Italy (following higher activity levels in theEngineering & Construction business), as well as increasedprovisions for redundancy incentives (euro 423 million in 2010)including a provision representing the charge to be borne by Enias part of a personnel mobility program in Italy for the period2010-2011. These increases were partly offset by a decrease inthe average number of employees in Italy.

 

> 
***c) Depreciation, Depletion, Amortization and    Impairments***

The table below sets forth a breakdown of depreciation,depletion, amortization and impairments by business segment forthe periods indicated.

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

|   |   | **2009** |   | **2010** |   | **2011** |
|--------|--------|----------|--------|----------|--------|----------|
|   |   |          |   |          |   |          |

|   |   | **(euro million)** |
|--------|--------|--------------------|

| Exploration & Production (1)                          |   | 6,789     |   |   | 6,928     |   |   | 6,251     |   |
|-----------------------------------------------------------|--------|-----------|--------|--------|-----------|--------|--------|-----------|--------|
| Gas &        Power                                    |   | 981       |   |   | 963       |   |   | 955       |   |
| Refining & Marketing                                  |   | 408       |   |   | 333       |   |   | 351       |   |
| Petrochemicals                                            |   | 83        |   |   | 83        |   |   | 90        |   |
| Engineering & Construction                            |   | 433       |   |   | 513       |   |   | 596       |   |
| Other        activities                                   |   | 2         |   |   | 2         |   |   | 2         |   |
| Corporate and financial companies                         |   | 83        |   |   | 79        |   |   | 75        |   |
| Impact of        intragroup profits elimination (2)       |   | (17       | )      |   | (20       | )      |   | (23       | )      |
|                                                      |   |           |        |   |           |        |   |           |        |
| **Total depreciation, depletion and        amortization** |   | **8,762** |   |   | **8,881** |   |   | **8,297** |   |
| Impairments                                               |   | 1,051     |   |   | 698       |   |   | 1,021     |   |
|                                                      |   |           |        |   |           |        |   |           |        |
|                                                      |   | **9,813** |   |   | **9,579** |   |   | **9,318** |   |
|                                                      |   |           |        |   |           |        |   |           |        |

----

| (1) |    | Exploratory        expenditures of euro 1,165 million, euro 1,199 million        and euro 1,551 million are included in these amounts        relative to the years 2011, 2010 and 2009, respectively. |
|-----|--------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (2) |    | This item        concerned mainly intra-group sales of goods, services and        capital assets recorded at period end in the equity of        the purchasing business segment. |
|-----|--------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

*2011 compared to 2010.* In 2011, depreciation, depletionand amortization charges (euro 8,297 million) decreased by euro584 million from 2010, or 6.6%, mainly in the Exploration &Production segment (down euro 677 million) 

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reflecting a lower output in Libya and currency translationdifferences due to the appreciation of the euro over the dollar(up 4.9%). The Engineering & Construction business recordedhigher charges (up euro 83 million) as new vessels and rigs werebrought into operation.

In 2011, impairments charges of euro 1,021 million mainlyregarded impairment losses of refining plants (euro 488 million)based on management’s medium term forecasts that point tocontinuing weak fundamentals and unprofitable margins resultingin the projection of lower future cash flows of those assets.Impairment charges of oil&gas properties in the Exploration& Production segment (euro 189 million) were triggered by achanged gas price scenario and downward reserve revisions due tolower technical recoverability which mainly pertained to gasproperties in the United States. An impairment charge amountingto euro 149 million was recognized on the goodwill allocated tothe European Market cash generating unit in the Gas & PowerMarketing business segment. In performing the impairment reviewof the business, management revised downward the profitabilityexpectations driven by continuing margin pressure and decliningsales opportunities against the backdrop of weak fundamentals.Other impairment losses related to marginal lines of business inthe Petrochemical segment (euro 160 million).

*2010 compared to 2009.* In 2010, depreciation, depletionand amortization charges amounted to euro 8,881 million,representing an increase of euro 119 million from 2009, or 1.4%.The Exploration & Production segment recorded higher charges(up euro 139 million) due to increased development activities asnew fields were brought into production and higher expenditureswere made in order to support production levels in producingfields. Those were partly offset by lower explorationexpenditures. Also the Engineering & Construction businessrecorded higher charges (up euro 80 million) as new vessels andrigs were brought into operation. The decrease recorded in theRefining & Marketing segment reflected a review of theresidual useful lives of refineries and related facilities, withan impact of euro 76 million. In doing so, the Company believesthat it aligned with practices prevailing among integrated oilcompanies, particularly the European companies. In the Gas &Power segment, the impact of new investments entered intooperation was offset by the revision of the useful lives of gaspipelines (from 40 to 50 years), as revised by the Authority forElectricity and Gas for tariff purposes, from January 1, 2010,with an impact of euro 31 million.

In 2010, impairment charges of euro 698 million mainlyregarded an impairment charge of goodwill allocated to theEuropean gas marketing cash generating unit in the Gas &Power segment. The impaired goodwill derived from the acquisitionof the Belgian company Distrigas that was made in 2009. In the2010 Consolidated Financial Statements, management recognized animpairment loss amounting to euro 426 million associated withgoodwill of the European gas business unit considering weak 2010results and a reduced outlook for profitability as discussedabove. Impairment charges of oil and gas properties in theExploration & Production segment were triggered by a changedpricing environment and downward reserve revisions which mainlypertained to gas properties in the United States with proved andunproved reserves. Minor impairment losses were recorded onassets impaired in previous reporting periods in the Refining& Marketing and Petrochemical segments as capitalexpenditures made in 2010 were completely written-off as Eni doesnot expect improving profitability in the underlying businessunits. 

For further information see "Item 18 – ConsolidatedFinancial Statements – Note 14 – Tangible andIntangible assets".

 

> 
***d) Operating Profit by Segment***

The table below sets forth Eni’s operating profit bybusiness segment for the periods indicated. 

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

|   |   | **2009** |   | **2010** |   | **2011** |
|--------|--------|----------|--------|----------|--------|----------|
|   |   |          |   |          |   |          |

|   |   | **(euro million)** |
|--------|--------|--------------------|

| Exploration & Production                              |   | 9,120      |   |   | 13,866     |   |   | 15,887     |   |
|-----------------------------------------------------------|--------|------------|--------|--------|------------|--------|--------|------------|--------|
| Gas &        Power                                    |   | 3,687      |   |   | 2,896      |   |   | 1,758      |   |
| Refining & Marketing                                  |   | (102       | )      |   | 149        |   |   | (273       | )      |
| Petrochemicals                                            |   | (675       | )      |   | (86        | )      |   | (424       | )      |
| Engineering & Construction                            |   | 881        |   |   | 1,302      |   |   | 1,422      |   |
| Other        activities (1)                               |   | (436       | )      |   | (1,384     | )      |   | (427       | )      |
| Corporate and financial companies (1)                     |   | (420       | )      |   | (361       | )      |   | (319       | )      |
| Impact of        unrealized intragroup profit elimination |   |       |   |   | (271       | )      |   | (189       | )      |
|                                                      |   |            |        |   |            |        |   |            |        |
| **Operating profit**                                      |   | **12,055** |   |   | **16,111** |   |   | **17,435** |   |
|                                                      |   |            |        |   |            |        |   |            |        |

----

| (1) |   | From 2010,        certain environmental provisions incurred by the Parent        Company Eni SpA due to inter-company guarantees on behalf        of Syndial have been reported within the segment        reporting unit "Other activities" rather than        the segment "Corporate and financial        companies". Data for 2009 have been restated        accordingly for euro 54 million. |
|-----|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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The table below sets forth operating profit for each ofEni’s business segments as a percentage of eachsegment’s net sales from operations (including intragroupsales) for the periods presented.

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

|   |   | **2009** |   | **2010** |   | **2011** |
|--------|--------|----------|--------|----------|--------|----------|
|   |   |          |   |          |   |          |

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

| Exploration & Production      |   | 38.3     |   |   | 47.0     |   |   | 54.6     |   |
|-----------------------------------|--------|----------|--------|--------|----------|--------|--------|----------|--------|
| Gas &        Power            |   | 12.1     |   |   | 9.8      |   |   | 5.1      |   |
| Refining & Marketing          |   | (0.3     | )      |   | 0.3      |   |   | (0.5     | )      |
| Petrochemicals                    |   | (16.1    | )      |   | (1.4     | )      |   | (6.5     | )      |
| Engineering & Construction    |   | 9.1      |   |   | 12.3     |   |   | 12.0     |   |
| Other        activities           |   |     |   |   |     |   |   |     |   |
| Corporate and financial companies |   | (32.8    | )      |   | (26.0    | )      |   | (23.4    | )      |
|                              |   |          |        |   |          |        |   |          |        |
| **Group**                         |   | **14.5** |   |   | **16.4** |   |   | **15.9** |   |
|                              |   |          |        |   |          |        |   |          |        |

*Exploration & Production.*Operating profit in 2011amounted to euro 15,887 million, up euro 2,021 million from 2010,or 14.6%. The increase in operating profit was driven by higherliquids and gas realizations in dollar terms (up by 40.3% and7.7%, respectively). The negative drivers were: (i) a disruptionin the Company’s output from Libya due to the conflict thatoccurred in that country in 2011 (an estimated loss of productionof 200 KBOE/d); and (ii) the appreciation of the euro against theU.S. dollar for an estimated amount of euro 490 million. Theimpact on operating profit of higher oil and gas dollarrealizations outweighed the negative drivers; however revenuesfor the year were mainly impacted by those negative factors andwe reported a decline compared to the prior year (down by 1.3%).

The operating profit of the Exploration & Productionsegment included the following gains and charges:

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

|   |   | **2009** |   | **2010** |   | **2011** |
|--------|--------|----------|--------|----------|--------|----------|
|   |   |          |   |          |   |          |

|   |   | **(euro million)** |
|--------|--------|--------------------|

| Asset impairments                                      |   | (618     | )      |   | (127    | )      |   | (190     | )      |
|--------------------------------------------------------|--------|----------|--------|--------|---------|--------|--------|----------|--------|
| Net gains        on disposal of assets                 |   | 270      |   |   | 241     |   |   | 63       |   |
| Provision for redundancy incentives                    |   | (31      | )      |   | (97     | )      |   | (44      | )      |
| Fair value        gains/losses on embedded derivatives |   | 15       |   |   |    |   |   | (1       | )      |
| Other                                                  |   |     |   |   | (35     | )      |   | (18      | )      |
|                                                   |   |          |        |   |         |        |   |          |        |
|                                                   |   | **(364** | **)**  |   | **(18** | **)**  |   | **(190** | **)**  |
|                                                   |   |          |        |   |         |        |   |          |        |

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.

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.

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Liquid realizations and the impact of commodity derivativeswere as follows:

|   | **Full Year** |
|--------|---------------|
|   |               |

|   |   | **2009** |   | **2010** |   | **2011** |
|--------|--------|----------|--------|----------|--------|----------|
|   |   |          |   |          |   |          |

| Sales volumes                                                |   | (mmBBL) |   | 373.5     |   |   | 357.1     |   |   | 297.4      |   |
|--------------------------------------------------------------|--------|---------|--------|-----------|--------|--------|-----------|--------|--------|------------|--------|
| Sales        volumes hedged by derivatives (cash flow hedge) |   |    |   | 42.2      |   |   | 28.5      |   |   | 9.0        |   |
| **Total price per barrel, excluding derivatives**            |   | ($/BBL) |   | **56.98** |   |   | **74.09** |   |   | **103.61** |   |
| Realized        gains (losses) on derivatives                |   |    |   | (0.03     | )      |   | (1.33     | )      |   | (1.50      | )      |
|                                                         |   |    |   |           |        |   |           |        |   |            |        |
| **Total average price per barrel**                           |   |    |   | **56.95** |   |   | **72.76** |   |   | **102.11** |   |
|                                                         |   |    |   |           |        |   |           |        |   |            |        |

The Company’s average gas realizations increased by 7.7%due to the time lags in oil-linked pricing formulae and weak spotprice in some areas (in particular the United States).

Operating profit in 2010 amounted to euro 13,866 million, upeuro 4,746 million from 2009, or 52%, due to higher liquids andgas realizations in dollar terms (up by 27.8% and 7.1%,respectively). The result also reflected: (i) a positive impactassociated with the depreciation of the euro against the U.S.dollar, for an estimated amount of euro 400 million; and (ii) therecognition of lower asset impairments and by lower explorationexpenditures. These positives were partly offset by increasedoperating expenses and amortizations charges reflecting newfields entered into operation and activities to improveproduction rates in existing fields, and higher provisions forredundancy incentives (up euro 66 million).

In 2010, the Company’s liquids and gas realizationsincreased on average by 18.6% in dollar terms, driven by higheroil prices for market benchmarks (Brent crude price increased by29.2%). Eni’s average oil realizations increased on averageby 27.8% driven by a favorable market environment. Eni’saverage liquids realizations were impacted for an amount of1.33$/BBL on average due to the settlement of certain commodityderivatives relating the sale of 28.5 mmBBL in the year atcontractually fixed prices. This was part of a derivativetransaction the Company entered into to hedge exposure tovariability in future cash flows expected from the sale of aportion of the Company’s proved reserves for an originalamount of approximately 125.7 mmBBL in the 2008-2011 period. Asof December 31, 2010, the residual amount of that hedgingtransaction was 9 mmBBL.

*Gas & Power.*In 2011 the Gas & Power segmentreported an operating profit of euro 1,758 million, a decrease ofeuro 1,138 million from 2010, down by 39.3%, due to an operatingloss of euro 710 million incurred by the Marketing businesscompared to the prior-year profit of euro 555 (down by euro 1,265million). This negative was partly offset by a better performanceachieved by the Italian regulated businesses (up by 4.3%) and theInternational Transport business (up by 12.0%).

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 explained the verystrong 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. A preliminary agreement onsuch renegotiations has been achieved early in 2012; managementbelieves that the closing will take place shortly and expects torecognize the associated benefits in 2012 profit. Those benefitswill be retroactive from the beginning of 2011.

In 2010, the Gas & Power segment reported an operatingprofit of euro 2,896 million, a decrease of euro 791 million from2009, down 21.5%, due to a lower performance delivered by theMarketing business which was down by 63.7%. This was partlyoffset by a better performance achieved by the Italian regulatedbusinesses (up by 12.7%). The negative performance in marketingoperations was mainly due to: (i) increasing competitivepressures in Italy, due to oversupply conditions in themarketplace and sluggish demand growth, resulting in both sharplylower gas sales (down by 14.4% and 19.5% to Italian customers andItalian wholesalers importers, respectively) and price reductionsto customers during the marketing campaign for the new thermalyear beginning on October 1, 2010; (ii) outside Italy, thepersistence of unprofitable differentials between oil-linked gaspurchase costs provided in Eni’s long-term gas supplycontracts and spot prices recorded at European hubs which havebecome a prevailing reference benchmark for selling prices; (iii)the impairment of goodwill attributed to the European marketingcash generating unit (euro 426 million), based on 2010 resultsand a reduced profitability outlook for this business; and (iv)negative mark-to-market evaluation of certain commodityderivatives which are recorded against profit as they lack formalrequirements to be designated as 

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hedges under applicable accounting standards. These negativeswere partly offset by: (i) the recording of higher inventoryholding gains due to the impact of rising gas prices oninventories stated at the weighted average cost of supplies orthe net realizable value, whichever is lower; and (ii) anon-recurring gain amounting to euro 270 million related to thefavorable settlement of an antitrust proceeding resulting in aprovision accrued in previous reporting periods being reversedalmost entirely to 2010 profit. The provision was originallyaccrued to take into account a resolution of the ItalianAntitrust Authority, who charged Eni with anti-competitivebehavior for having allegedly refused third party access to thepipeline for importing natural gas from Algeria.

The table below sets forth the break-down of operating profitby businesses in the Gas & Power segment:

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

|   |   | **2009** |   | **2010** |   | **2011** |
|--------|--------|----------|--------|----------|--------|----------|
|   |   |          |   |          |   |          |

|   |   | **(euro million)** |
|--------|--------|--------------------|

| Marketing                                                  |   | 1,530     |   |   | 555       |   |   | (710      | )      |
|------------------------------------------------------------|--------|-----------|--------|--------|-----------|--------|--------|-----------|--------|
| Regulated        businesses in Italy                       |   | 1,773     |   |   | 1,998     |   |   | 2,084     |   |
| International transport                                    |   | 384       |   |   | 343       |   |   | 384       |   |
|                                                       |   |           |        |   |           |        |   |           |        |
| **Operating        profit of the Gas & Power segment** |   | **3,687** |   |   | **2,896** |   |   | **1,758** |   |
|                                                       |   |           |        |   |           |        |   |           |        |

The operating profit of the Gas & Power segment includedthe following gains and charges: 

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

|   |   | **2009** |   | **2010** |   | **2011** |
|--------|--------|----------|--------|----------|--------|----------|
|   |   |          |   |          |   |          |

|   |   | **(euro million)** |
|--------|--------|--------------------|

| Profit (loss) on stock                                         |   | (326     | )      |   | 117      |   |   | 166      |   |
|----------------------------------------------------------------|--------|----------|--------|--------|----------|--------|--------|----------|--------|
| Reversal        of a risk provision on an Antitrust proceeding |   |     |   |   | 270      |   |   |     |   |
| Environmental charges                                          |   | (19      | )      |   | (25      | )      |   | (10      | )      |
| Asset        impairments                                       |   | (27      | )      |   | (436     | )      |   | (145     | )      |
| Risk provisions                                                |   | (115     | )      |   | (78      | )      |   | (77      | )      |
| Provision        for redundancy incentives                     |   | (25      | )      |   | (75      | )      |   | (40      | )      |
| Re-measurement gains/losses on commodity        derivatives    |   | 292      |   |   | (30      | )      |   | (45      | )      |
| Other                                                          |   | 6        |   |   | 34       |   |   | (37      | )      |
|                                                           |   |          |        |   |          |        |   |          |        |
|                                                           |   | **(214** | **)**  |   | **(223** | **)**  |   | **(188** | **)**  |
|                                                           |   |          |        |   |          |        |   |          |        |

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. Management believes that fair valuegains and losses on commodity derivatives entered into forspeculative purposes are part of the business’ underlyingperformance. In 2011, we reported a fair value gain on thosederivatives of euro 53 million which were entered into tooptimize the business’ margins in line with our revised riskmanagement strategy.

*Refining & Marketing.*In 2011, the Refining &Marketing segment reported an operating loss of euro 273 million,compared to the prior-year profit of euro 149 million. Thesegment suffered from unprofitable refining margins due to risingcosts of oil-based feedstock and energy utilities that could notbe transferred to final prices pressured by weak demand andexcess capacity in the Mediterranean Basin. In addition,Eni’s complex refineries were hit by shrinking pricedifferentials between light and heavy crudes which reduced theconversion premium. These negatives were offset in part byefficiency enhancement measures, the optimization of supplyactivities and lower throughputs at the weakest refineries. TheMarketing results albeit positive, declined due to lower retailand wholesale demand for gasoline and gasoil, and other productsdestined to industries affected by the economic downturn, andcompetitive pressures.

In 2010, the Refining & Marketing segment reported anoperating profit of euro 149 million, reversing a prior-year lossof euro 102 million. The improvement reflected a less unfavorablerefining scenario with Eni’s complex refineries helped bywidening price differentials between sour and sweet crudes andbetter spreads of middle distillates to heating fuel. Refiningmargins still remained unprofitable as high oil feedstock priceswere only partially transferred to final prices of refinedproducts pressured by weak industry fundamentals. The EniRefining business also benefited from cost efficiencies, andintegration of refinery cycles whereby the Gela refinery beganprocessing heavy residues from Taranto throughputs thus enablingto reap cost savings and margins improvements. The Marketingbusiness was affected by rapidly rising supply costs that wereonly partially transferred to prices at the pump, and lowerretail sales in Italy. These negatives were partly offset byhigher sales on European networks.

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The operating profit of the Refining & Marketing segmentincluded the following gains and charges:****

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

|   |   | **2009** |   | **2010** |   | **2011** |
|--------|--------|----------|--------|----------|--------|----------|
|   |   |          |   |          |   |          |

|   |   | **(euro million)** |
|--------|--------|--------------------|

| Profit (loss) on stock                                      |   | 792     |   |   | 659     |   |   | 907     |   |
|-------------------------------------------------------------|--------|---------|--------|--------|---------|--------|--------|---------|--------|
| Environmental        charges                                |   | (72     | )      |   | (169    | )      |   | (34     | )      |
| Asset impairments                                           |   | (389    | )      |   | (76     | )      |   | (488    | )      |
| Risk        provisions                                      |   | (17     | )      |   | (2      | )      |   | (8      | )      |
| Provision for redundancy incentives                         |   | (22     | )      |   | (113    | )      |   | (81     | )      |
| Re-measurement        gains/losses on commodity derivatives |   | (39     | )      |   | 10      |   |   | 3       |   |
| Other                                                       |   | 2       |   |   | 11      |   |   | (37     | )      |
|                                                        |   |         |        |   |         |        |   |         |        |
|                                                        |   | **255** |   |   | **320** |   |   | **262** |   |
|                                                        |   |         |        |   |         |        |   |         |        |

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, rising crude oil andproducts prices increased by euro 907 million the carrying amountof year-end inventories of raw materials and products reflectingthe impact of the weighted-average cost method of inventoryaccounting. We regard this inventory holding gain as lackingcorrelation to the underlying business performance which we trackby matching revenues with current costs of supplies.

*Petrochemicals.* In 2011, the Petrochemical segmentincurred a deeper operating loss, down by euro 338 million from ayear-earlier (from a loss of euro 86 million in 2010 to a loss ofeuro 424 million in 2011). This trend was negatively impacted byfalling product margins, with the cracker margin severely hit byhigher supply costs of oil-based feedstock which were notrecovered in sales prices on end markets pressured by weak demandfor commodities particularly in the final quarter of the year asthe economic activity registered a sharp contraction. Also salevolumes were lower (down 14.6% compared to 2010).

In 2010, the Petrochemical segment achieved a sharp reductionin its operating loss which was down by 87.3% from a year-earlier(from a loss of euro 675 million in 2009 to a loss of euro 86million in 2010). This positive result reflected better marketconditions and a recovery in demand which drove improved productmargins and higher sales (up by 10.9% mainly in the elastomersbusiness area). Profitability was also supported by costefficiencies. An inventory holding gain amounting to euro 105million was recognized (compared with a loss of euro 121 millionin 2009) reflecting the impact of higher oil-based feedstock andcommodity prices on year-end valuation of inventories accordingto the average-cost method of inventory accounting, as well aslower asset impairments (down by euro 69 million).

The operating profit of the Petrochemical segment included thefollowing gains and charges: 

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

|   |   | **2009** |   | **2010** |   | **2011** |
|--------|--------|----------|--------|----------|--------|----------|
|   |   |          |   |          |   |          |

|   |   | **(euro million)** |
|--------|--------|--------------------|

| Profit (loss) on stock                           |   | (121     | )      |   | 105    |   |   | 40       |   |
|--------------------------------------------------|--------|----------|--------|--------|--------|--------|--------|----------|--------|
| Risk        provision on an Antitrust proceeding |   |     |   |   |   |   |   | (10      | )      |
| Asset impairments                                |   | (121     | )      |   | (52    | )      |   | (160     | )      |
| Provision        for redundancy incentives       |   | (10      | )      |   | (26    | )      |   | (17      | )      |
| Other                                            |   | 3        |   |   |   |   |   | (1       | )      |
|                                             |   |          |        |   |        |        |   |          |        |
|                                             |   | **(249** | **)**  |   | **27** |   |   | **(148** | **)**  |
|                                             |   |          |        |   |        |        |   |          |        |

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.

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*Engineering & Construction.* Operating profit in2011 amounted to euro 1,422 million, an increase of euro 120million, or 9.2% compared to 2010. This improvement was driven byrevenue growth and a higher profitability of acquired orders,primarily in the Engineering & Construction Onshore andOffshore businesses, reflecting higher level of activities inMiddle East, Canada and Australia, and in the offshore drillingbusiness due to the full operation of the drillships Saipem 10000and 12000 and of the Perro Negro 8, which partly offset thenegative impact of the Scarabeo 5 planned maintenance.

Operating profit in 2010 amounted to euro 1,302 million, anincrease of euro 421 million, or 47.8% compared to 2009. Thisincrease was driven by the positive operating performancereported by the Onshore Construction and Offshore Drillingbusiness areas reflecting higher level of activities and highermargins of the work performed. The utilization rate of the PerroNegro 6 jack-up and the semi-submersibles Scarabeo 3 and 4increased. In addition, the comparison with 2009 benefited fromthe circumstance that in 2009 a charge amounting to euro 250million was recorded to account for a transaction to settle theTSKJ legal proceeding. See “Item 8 Financial Information– Legal Proceedings” for further details.

The operating profit of Engineering & Construction segmentincluded the following gains and charges: 

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

|   |   | **2009** |   | **2010** |   | **2011** |
|--------|--------|----------|--------|----------|--------|----------|
|   |   |          |   |          |   |          |

|   |   | **(euro million)** |
|--------|--------|--------------------|

| Expected settlement of the TSKJ proceeding                                |   | (250     | )      |   |    |   |   |    |   |
|---------------------------------------------------------------------------|--------|----------|--------|--------|---------|--------|--------|---------|--------|
| Settlement/payments        on Antitrust and other Authorities proceedings |   |     |   |   | (24     | )      |   |    |   |
| Asset impairments                                                         |   | (2       | )      |   | (3      | )      |   | (35     | )      |
| Net gains        on disposal of assets                                    |   | (3       | )      |   | (5      | )      |   | (4      | )      |
| Provision for redundancy incentives                                       |   |     |   |   | (14     | )      |   | (10     | )      |
| Re-measurement        gains/losses on commodity derivatives               |   | 16       |   |   | 22      |   |   | 28      |   |
|                                                                      |   |          |        |   |         |        |   |         |        |
|                                                                      |   | **(239** | **)**  |   | **(24** | **)**  |   | **(21** | **)**  |
|                                                                      |   |          |        |   |         |        |   |         |        |

*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.

This subsidiary reported operating losses of euro 427 millionfor 2011, euro 1,384 million for 2010 and euro 436 million for2009. The magnitude of losses was mainly influenced by therecognition of environmental provisions and, to a lesser extent,other risk provisions whose break-down is provided below. See“Item 4 – Environmental regulation” for furtherdetails. 

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

|   |   | **2009** |   | **2010** |   | **2011** |
|--------|--------|----------|--------|----------|--------|----------|
|   |   |          |   |          |   |          |

|   |   | **(euro million)** |
|--------|--------|--------------------|

| Risk provision on an Antitrust proceeding |   |     |   |   |       |   |   | (59      | )      |
|-------------------------------------------|--------|----------|--------|--------|------------|--------|--------|----------|--------|
| Environmental        charges              |   | (207     | )      |   | (1,145     | )      |   | (141     | )      |
| Asset impairments                         |   | (5       | )      |   | (8         | )      |   | (4       | )      |
| Risk        provisions                    |   | 4        |   |   | (7         | )      |   | (9       | )      |
| Provision for redundancy incentives       |   | (8       | )      |   | (10        | )      |   | (8       | )      |
| Other                                     |   | 38       |   |   | (9         | )      |   | 20       |   |
|                                      |   |          |        |   |            |        |   |          |        |
|                                      |   | **(178** | **)**  |   | **(1,179** | **)**  |   | **(201** | **)**  |
|                                      |   |          |        |   |            |        |   |          |        |

In addition to above listed charges, losses in the reportingperiods presented derived from a marginal line of business thatthe 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 purposesservices.

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.

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The aggregate Corporate and financial companies reported anoperating loss of euro 361 million for 2010, representing areduction of euro 59 million, compared to the loss recorded in2009 (euro 420 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,** |
|--------|-----------------------------|
|   |                             |

|   |   | **2009** |   | **2010** |   | **2011** |
|--------|--------|----------|--------|----------|--------|----------|
|   |   |          |   |          |   |          |

|   |   | **(euro million)** |
|--------|--------|--------------------|

| Gain (loss) on derivative financial instruments    |   | (4       | )      |   | (131     | )      |   | (112       | )      |
|----------------------------------------------------|--------|----------|--------|--------|----------|--------|--------|------------|--------|
| Exchange        differences, net                   |   | (106     | )      |   | 92       |   |   | (111       | )      |
| Interest income                                    |   | 33       |   |   | 18       |   |   | 22         |   |
| Finance        expense on short and long-term debt |   | (753     | )      |   | (766     | )      |   | (922       | )      |
| Finance expense due to the passage of time         |   | (218     | )      |   | (251     | )      |   | (247       | )      |
| Income        from equity instruments              |   | 163      |   |   |     |   |   |       |   |
| Other finance income and expense, net              |   | 111      |   |   | 124      |   |   | 92         |   |
|                                               |   | **(774** | **)**  |   | **(914** | **)**  |   | **(1,278** | **)**  |
| Finance expense capitalized                        |   | 223      |   |   | 187      |   |   | 149        |   |
|                                               |   |          |        |   |          |        |   |            |        |
|                                               |   | **(551** | **)**  |   | **(727** | **)**  |   | **(1,129** | **)**  |
|                                               |   |          |        |   |          |        |   |            |        |

*2011 compared to 2010.* In 2011, net finance expenseincreased by euro 402 million to euro 1,129 million from 2010.Higher finance charges (up by euro 154 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). We expect that our finance expense will continueincreasing in 2012 due to movements in our corporate spreads andan ongoing shift in the composition of our finance debt targetingto lengthen the duration. See “Management’sExpectations of Operations” below. Higher losses wererecognized in connection with the fair value valuation throughprofit and loss of certain derivative instruments on interestrates (down by euro 102 million) which did not meet all formalcriteria to be designated as hedges under IFRS. Lower negativeexchange differences net (down by euro 203 million) were partlyoffset by gains on exchange rate derivatives (from a loss of euro111 million to a gain of euro 29 million) recognized throughprofit and loss as lacking the formal criteria for hedgeaccounting.

*2010 compared to 2009.* In 2010, net finance expenseincreased by euro 176 million to euro 727 million from 2009,mainly due to the circumstance that in 2009 a finance gain ofeuro 163 million was recorded due to the contractual remunerationon the 20% interest in OAO Gazprom Neft, calculated until it wasdivested on April 24, 2009. Higher losses were recognized inconnection with the fair value valuation through profit and lossof certain derivative instruments on exchange rates (up euro 127million) that did not meet all formal criteria to be designatedas hedges under IFRS. Those losses were offset by net positiveexchange differences (euro 198 million). The item "Exchangedifferences, net" includes a currency adjustment, amountingto euro 33 million, related to the loss provision accrued in the2009 financial statements to take account of the TSKJ proceeding.Finance charges on finance debt were substantially in line withthe previous year, as the impact associated with increasedaverage net borrowings was offset by lower interest rates on botheuro-denominated and dollar loans (down 0.4 percentage points theEuribor and the Libor rate).

 

> 
***f) Net Income from Investments***

*2011 compared to 2010.* Net income from investments in2011 was a net gain of euro 2,171 million and mainly related to:(i) gains on disposal of assets (euro 1,125 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 544million), mainly in the Gas & Power, Exploration &Production and Refining & Marketing segments; and (iv) animpairment loss of an interest in a refinery plant in EasternEurope reflecting a reduced profitability outlook (euro 157million).

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*2010 compared to 2009.* Net income from investments in2010 was a net gain of euro 1,156 million and mainly related to:(i) Eni’s share of profit of entities accounted for with theequity method (euro 537 million), mainly in the Gas & Powerand Exploration & Production segments; (ii) dividendsreceived by entities accounted for at cost (euro 264 million),mainly relating Nigeria LNG Ltd; and (iii) gains on disposal ofinterests (euro 332 million) related to the full divestment ofSocietà Padana Energia (euro 169 million), a 25% stake inGreenStream (euro 93 million) including a gain from revaluing theresidual interest in the venture, a 100% interest in the Belgiancompany DistriRE SA (euro 47 million) as well as a non-strategicinterest of the Engineering & Construction segment (euro 17million).

 

> 
***g) Taxes***

*2011 compared to 2010.* In 2011, income taxes amountedto euro 10,674 million, up by euro 1,517 million from a year ago,or 16.6%, 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, up from 55.4% to 57.8% (up        2.4 percentage points). This increase was due to: |
|--------------------------------------------------------------------------------------------------------------------------------------------------------|

| (i)  |   | the recognition of higher        deferred taxes (euro 573 million) due to a changed tax        rate applicable to a production sharing agreement,        including an adjustment to deferred taxation which was        recognized upon allocation of the purchase price as part        of a business combination when the mineral interest was        acquired by Eni; and                                                                                              |
|------|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| (ii) |   | higher income taxes        currently payable (euro 221 million) following enactment        of new tax provisions for Italian subsidiaries as per Law        No. 148 of September 2011, converting the Law Decree No.        138/2011. This Law increased the Italian windfall tax        levied on energy companies (the so-called Robin Tax) by 4        percentage points to 10.5% and enlarged its scope to        include gas transport and distribution companies. |

These negatives were partly offset by the afore 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).

*2010 compared to 2009.* In 2010, income taxes amountedto euro 9,157 million, up euro 2,401 million from a year ago, or35.5%, mainly reflecting higher income taxes currently payable bysubsidiaries in the Exploration & Production segmentoperating outside Italy due to higher taxable profit.

| The Group consolidated tax rate was        lower compared to 2009, down from 56% to 55.4% (down 0.6        percentage points). This reduction was due to: |
|-----------------------------------------------------------------------------------------------------------------------------------------------------------|

| (i)  |   | the recognition of a gain        amounting to euro 270 million reflecting the favorable        outcome of an antitrust proceeding which was a        non-taxable item; and                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |
|------|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| (ii) |   | the circumstance that in        2009 a non-recurring charge amounting to euro 250 million        was recorded to settle the TSKJ legal proceedings which        was a non-deductible tax item. In addition, the payment        of a balance for prior-year income taxes amounted to euro        230 million in Libya as new rules came into effect which        reassessed revenues for tax purposes and a lower capacity        for Italian companies to deduct the cost of goods sold        associated with lower gas inventories at year end (euro        64 million) was incurred, partly offset by net tax gains        of euro 150 million. |

Those positive effects on the Group tax rate were partlyoffset by a higher percentage of taxable income reported byforeign subsidiaries in the Exploration & Production segmentwhich bore a higher tax rate than the Italian statutory tax rate.

 

> 
***h) Non-controlling Interest***

2*011 compared to 2010.* Net profit pertaining tonon-controlling interest was euro 943 million and concernedprimarily Saipem SpA (euro 552 million) and Snam Rete Gas SpA(euro 385 million).

*2010 compared to 2009.* Net profit pertaining tonon-controlling interest was euro 1,065 million and concernedprimarily Snam Rete Gas SpA (euro 537 million) and Saipem SpA(euro 503 million).

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**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.

The following table summarizes the Group cash flows and theprincipal components of Eni’s change in cash and cashequivalent for the periods indicated. This table has been derivedfrom the Group’s Consolidated Financial Statements preparedin accordance with IFRS.

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

|   |   | **2009** |   | **2010** |   | **2011** |
|--------|--------|----------|--------|----------|--------|----------|
|   |   |          |   |          |   |          |

|   |   | **(euro million)** |
|--------|--------|--------------------|

| **Net profit**                                                                                    |   | **5,317**  |   |   | **7,383**  |   |   | **7,803**  |   |
|---------------------------------------------------------------------------------------------------|--------|------------|--------|--------|------------|--------|--------|------------|--------|
| *Adjustments        to reconcile net profit to net cash provided by operating        activities:* |   |       |   |   |       |   |   |       |   |
| - amortization and depreciation charges,        impairment losses and other non monetary items    |   | 9,117      |   |   | 9,024      |   |   | 9,095      |   |
| - net        gains on disposal of assets                                                          |   | (226       | )      |   | (552       | )      |   | (1,170     | )      |
| - dividends, interest, taxes and other changes        accrued in net profit                       |   | 6,843      |   |   | 9,368      |   |   | 10,651     |   |
| Changes in        working capital related to operations                                           |   | (1,195     | )      |   | (1,720     | )      |   | (2,176     | )      |
| Dividends received, taxes paid, interest (paid)        received during the period                 |   | (8,720     | )      |   | (8,809     | )      |   | (9,821     | )      |
|                                                                                              |   |            |        |   |            |        |   |            |        |
| **Net        cash provided by operating activities**                                              |   | **11,136** |   |   | **14,694** |   |   | **14,382** |   |
|                                                                                              |   |            |        |   |            |        |   |            |        |
| Capital expenditures                                                                              |   | (13,695    | )      |   | (13,870    | )      |   | (13,438    | )      |
| Investments        and purchases of consolidated subsidiaries and businesses                      |   | (2,323     | )      |   | (410       | )      |   | (360       | )      |
| Disposals                                                                                         |   | 3,595      |   |   | 1,113      |   |   | 1,912      |   |
| Other cash        flow related to investing activities (*)                                        |   | 101        |   |   | 202        |   |   | 668        |   |
| Changes in short and long-term finance debt                                                       |   | 3,841      |   |   | 2,272      |   |   | 1,104      |   |
| Dividends        paid and changes in non-controlling interests and        reserves                |   | (2,956     | )      |   | (4,099     | )      |   | (4,327     | )      |
| Effect of changes in consolidation and exchange        differences                                |   | (30        | )      |   | 39         |   |   | 10         |   |
|                                                                                              |   |            |        |   |            |        |   |            |        |
| **Change        in cash and cash equivalent for the year**                                        |   | **(331**   | **)**  |   | **(59**    | **)**  |   | **(49**    | **)**  |
|                                                                                              |   |            |        |   |            |        |   |            |        |
| Cash and cash equivalent at the beginning of the        year                                      |   | 1,939      |   |   | 1,608      |   |   | 1,549      |   |
| Cash and        cash equivalent at year end                                                       |   | 1,608      |   |   | 1,549      |   |   | 1,500      |   |
|                                                                                              |   |            |        |   |            |        |   |            |        |

----

| (*)          |    | 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) |   |    ** ** |   | **2009** |   | **2010** |   | **2011** |
|----------------|--------|------------------------------|--------|----------|--------|----------|--------|----------|
|           |   |                         |   |          |   |          |   |          |

| Financing investments:                       |   |    |   |   |    |   |   |    |   |
|----------------------------------------------|--------|---------|--------|--------|---------|--------|--------|---------|--------|
| -        securities                          |   | (2      | )      |   | (50     | )      |   | (21     | )      |
| - financing receivables                      |   | (36     | )      |   | (13     | )      |   | (26     | )      |
|                                         |   | **(38** | **)**  |   | **(63** | **)**  |   | **(47** | **)**  |
| Disposal of financing investments:           |   |    |   |   |    |   |   |    |   |
| -        securities                          |   | 123     |   |   | 5       |   |   | 71      |   |
| - financing receivables                      |   | 311     |   |   | 32      |   |   | 17      |   |
|                                         |   | **434** |   |   | **37**  |   |   | **88**  |   |
| **Net cash flows from financing activities** |   | **396** |   |   | **(26** | **)**  |   | **41**  |   |
|                                         |   |         |        |   |         |        |   |         |        |

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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,** |
|--------|-----------------------------|
|   |                             |

|   |   | **2009** |   | **2010** |   | **2011** |
|--------|--------|----------|--------|----------|--------|----------|
|   |   |          |   |          |   |          |

|   |   | **(euro million)** |
|--------|--------|--------------------|

| **Net cash provided from operating activities**                                     |   | **11,136** |   |   | **14,694** |   |   | **14,382** |   |
|-------------------------------------------------------------------------------------|--------|------------|--------|--------|------------|--------|--------|------------|--------|
| Capital        expenditures                                                         |   | (13,695    | )      |   | (13,870    | )      |   | (13,438    | )      |
| Acquisitions of investments and businesses                                          |   | (2,323     | )      |   | (410       | )      |   | (360       | )      |
| Disposals                                                                           |   | 3,595      |   |   | 1,113      |   |   | 1,912      |   |
| Other cash flow related to capital expenditures,        investments and divestments |   | (295       | )      |   | 228        |   |   | 627        |   |
| Net        borrowings (1) of acquired companies                                     |   |       |   |   | (33        | )      |   |       |   |
| Net borrowings (1) of divested        companies                                     |   |       |   |   |       |   |   | (192       | )      |
| Exchange        differences on net borrowings and other changes                     |   | (141       | )      |   | (687       | )      |   | (517       | )      |
| Dividends paid and changes in minority interest        and reserves                 |   | (2,956     | )      |   | (4,099     | )      |   | (4,327     | )      |
|                                                                                |   |            |        |   |            |        |   |            |        |
| **Change        in net borrowings**(1)                                              |   | **(4,679** | **)**  |   | **(3,064** | **)**  |   | **(1,913** | **)**  |
|                                                                                |   |            |        |   |            |        |   |            |        |
| Net borrowings (1) at the beginning        of the year                              |   | 18,376     |   |   | 23,055     |   |   | 26,119     |   |
| Net        borrowings (1) at year end                                               |   | 23,055     |   |   | 26,119     |   |   | 28,032     |   |
|                                                                                |   |            |        |   |            |        |   |            |        |

----

| (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 2011, adjustments to reconcile net profit to net cashprovided by operating activities mainly related to non-monetarycharges and gains amounting to euro 9,095 million, whichprimarily regarded depreciation, depletion amortization andimpairment charges of tangible and intangible assets (euro 9,318million). Adjustments to net profit also included gains ondisposals (euro 1,170 million), movements in net working capital(euro 2,176 million), income taxes (euro 10,674 million) andinterest expenses (euro 737 million) accrued in the year asopposed to amounts actually paid.

In 2010, adjustments to reconcile net profit to net cashprovided by operating activities mainly related non-monetarycharges and gains amounting to euro 9,024 million, whichprimarily regarded depreciation, depletion amortization andimpairment charges of tangible and intangible assets (euro 9,579million), gains on disposals and movements in net workingcapital. Adjustments to net profit also included income taxes(euro 9,157 million) and interest expenses (euro 571 million)accrued in the year as opposed to amounts actually paid.

 

> 
***a) Changes in Working Capital related to Operations***

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 –Other non current assets – of the Notes to the ConsolidatedFinancial Statements"; and (iii) an increasing balance oftrade receivables vs. payables towards certain joint venturepartners in the Exploration & Production segment.

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.

In 2010, changes in working capital absorbed cash flowsamounting to a negative euro 1,720 million as a result of: (i)increasing oil, gas and petroleum products inventories (up euro1,150 million) due to the impact of rising oil prices oninventories stated at the weighted average cost; (ii) cashpre-payments amounting to euro 1,238 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. For further detailssee “Item 18 – Note 9 – Trade and otherreceivables – of the Notes to the Consolidated FinancialStatements”. The Company recognized among its assets a

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deferred cost to account for those pre-paid volumes of gas.For further details on that asset see “Item 18 – Note14 – Other non current assets – of the Notes to theConsolidated Financial Statements”.

These negatives were partly offset by the increased balancebetween trade payables and receivables also resulting by thereduction of trade receivables relating to the transfer ofcertain receivables without recourse to factoring institutions,amounting to euro 1,279 million due in 2011, increasing groupcash inflows.

 

> 
***b) Investing Activities***

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

|   |   | **2009** |   | **2010** |   | **2011** |
|--------|--------|----------|--------|----------|--------|----------|
|   |   |          |   |          |   |          |

|   |   | **(euro million)** |
|--------|--------|--------------------|

| Exploration & Production                              |   | 9,486      |   |   | 9,690      |   |   | 9,435      |   |
|-----------------------------------------------------------|--------|------------|--------|--------|------------|--------|--------|------------|--------|
| Gas &        Power                                    |   | 1,686      |   |   | 1,685      |   |   | 1,721      |   |
| Refining & Marketing                                  |   | 635        |   |   | 711        |   |   | 866        |   |
| Petrochemicals                                            |   | 145        |   |   | 251        |   |   | 216        |   |
| Engineering & Construction                            |   | 1,630      |   |   | 1,552      |   |   | 1,090      |   |
| Other        activities                                   |   | 44         |   |   | 22         |   |   | 10         |   |
| Corporate and financial companies                         |   | 57         |   |   | 109        |   |   | 128        |   |
| Impact of        unrealized intragroup profit elimination |   | 12         |   |   | (150       | )      |   | (28        | )      |
|                                                      |   |            |        |   |            |        |   |            |        |
| **Capital expenditures**                                  |   | **13,695** |   |   | **13,870** |   |   | **13,438** |   |
| **Acquisitions        of investments and businesses**     |   | **2,323**  |   |   | **410**    |   |   | **360**    |   |
|                                                      |   |            |        |   |            |        |   |            |        |
|                                                      |   | **16,018** |   |   | **14,280** |   |   | **13,798** |   |
| **Disposals**                                             |   | **(3,595** | **)**  |   | **(1,113** | **)**  |   | **(1,912** | **)**  |
|                                                      |   |            |        |   |            |        |   |            |        |

Capital expenditures totaled euro 13,438 million, euro 13,870million and euro 13,695 million, respectively in 2011, 2010 and2009.

For a discussion of capital expenditures by business segmentand a description of year-on-year changes see below "CapitalExpenditures by Segment".

Acquisitions of investments and businesses totaled euro 360million, euro 410 million and euro 2,323 million, respectively in2011, 2010 and 2009.

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).

In 2010, disposals amounted to euro 1,113 million and mainlyrelated to: (i) the second tranche of the divestment to Gazpromof the 51% stake in the joint venture Severenergia by theshareholder Artic Russia (Eni and Enel were partners with a stakeof 60% and 40% respectively), following exercise of a call optionby the Russian company. The cash consideration of this secondtranche was euro 526 million; (ii) divestment of non-strategicoil&gas properties in the Exploration & Productionsegment, for an overall amount of euro 456 million, includingdivestment of the entire stake in the subsidiary Società PadanaEnergia (euro 179 million); (iii) the divestment of a 25% stakein GreenStream BV (euro 75 million).

 

> 
***c) Dividends paid and Changes in Non-controlling    Interests and Reserves***

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 dividendrelating the fiscal year 2010 and euro 1,884 million as aninterim dividend for fiscal year 2011); and (ii) the distributionof dividends to non-controlling interests by Snam Rete Gas SpAand Saipem SpA (euro 518 million) and other consolidatedsubsidiaries (euro 34 million).

In 2010, dividends paid and changes in non-controllinginterests and reserves (euro 4,099 million) mainly related to:(i) cash dividends to Eni shareholders (euro 3,622 million, ofwhich euro 1,811 million as an interim dividend for 

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fiscal year 2010); and (ii) the distribution of dividends tonon-controlling interests by Snam Rete Gas SpA and Saipem SpA(euro 506 million) and other consolidated subsidiaries (euro 8million).

 

> 
***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 about 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 vs. 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,** |
|--------|------------------------|
|   |                        |

|   |   | **2009** |   | **2010** |   | **2011** |
|--------|--------|----------|--------|----------|--------|----------|
|   |   |          |   |          |   |          |

|   |   | **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)** |   | **6,736** |   |   | **18,064** |   | **24,800** |   |   | **7,478** |   |   | **20,305** |   | **27,783** |   |   | **6,495** |   |   | **23,102** |   | **29,597** |   |
|------------------------------------------------|--------|-----------|--------|--------|------------|--------|------------|--------|--------|-----------|--------|--------|------------|--------|------------|--------|--------|-----------|--------|--------|------------|--------|------------|--------|
| Cash and        cash equivalents               |   | (1,608    | )      |   |       |   | (1,608     | )      |   | (1,549    | )      |   |       |   | (1,549     | )      |   | (1,500    | )      |   |       |   | (1,500     | )      |
| Securities not related to operations           |   | (64       | )      |   |       |   | (64        | )      |   | (109      | )      |   |       |   | (109       | )      |   | (37       | )      |   |       |   | (37        | )      |
| Non-operating        financing receivables     |   | (73       | )      |   |       |   | (73        | )      |   | (6        | )      |   |       |   | (6         | )      |   | (28       | )      |   |       |   | (28        | )      |
|                                           |   |           |        |   |            |   |            |        |   |           |        |   |            |   |            |        |   |           |        |   |            |   |            |        |
| **Net borrowings**                             |   | **4,991** |   |   | **18,064** |   | **23,055** |   |   | **5,814** |   |   | **20,305** |   | **26,119** |   |   | **4,930** |   |   | **23,102** |   | **28,032** |   |
|                                           |   |           |        |   |            |   |            |        |   |           |        |   |            |   |            |        |   |           |        |   |            |   |            |        |
|                                           |   |      |   |   |       |   |       |   |   |      |   |   |       |   |       |   |   |      |   |   |       |   |       |   |

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

|   |   | **2009** |   | **2010** |   | **2011** |
|--------|--------|----------|--------|----------|--------|----------|
|   |   |          |   |          |   |          |

| **Shareholders’ equity including        non-controlling interest as per Eni’s Consolidated        Financial Statements prepared in accordance with IFRS**                         |   | (euro million) |   | **50,051** |   |   | **55,728** |   |   | **60,393** |   |
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|----------------|--------|------------|--------|--------|------------|--------|--------|------------|--------|
| *Ratio        of total debt to total shareholders’ equity        including non-controlling interest*                                                                                   |   |           |   | *0.50*     |   |   | *0.50*     |   |   | *0.49*     |   |
| *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*    | *)*    |   | *(0.03*    | *)*    |
| *Ratio        of net borrowing to total shareholders’ equity        including non-controlling interest (leverage)*                                                                     |   |           |   | *0.46*     |   |   | *0.47*     |   |   | *0.46*     |   |
|                                                                                                                                                                                        |   |           |   |            |        |   |            |        |   |            |        |

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 

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level of net borrowings was balanced by a greater totalequity. The Group total equity increased due to net profit forthe year and currency translation differences recorded intranslating to euro amounts the net equity of subsidiaries whosefunctional currency is the U.S. dollar due to the dollarrevaluation in exchange rates recorded at year end (up by 3.1%due to the exchange rate recorded on December 31, 2011 at 1 euro= 1.294 US$ compared to 1 euro = 1.336 US$ at December 31, 2010).

Total debt of euro 29,597 million consisted of euro 6,495million of short-term debt (including the portion of long-termdebt due within twelve months equal to euro 2,036 million) andeuro 23,102 million of long-term debt.

Total debt included bonds for euro 15,049 million (includingaccrued interest and discount on issuance). Bonds maturing in thenext 18 months amounted to euro 1,705 million (including accruedinterest and discount). Bonds issued in 2011 amounted to euro1,493 million (including accrued interest and discount). Totaldebt was denominated in the following currencies: euro (88%),U.S. dollar (8%), pound sterling (2%) and 2% in other currencies.

In 2010, net borrowings amounted to euro 26,119 million,representing a euro 3,064 million increase from 2009. Thisincrease was mainly due to the large amount of capitalexpenditures made in the year, dividend payment to shareholdersexecuted in the year and pre-payments to the Company’ssuppliers of gas under long-term contracts upon triggering thetake-or-pay clause. These outflows were only partially fundedwith cash flows from operations, divestments for the year andcash inflow from transferring certain account receivables withoutrecourse to factoring institutions, amounting to euro 1,279million due in 2011. As a result of an increased level of netborrowings, the Group leverage inched higher to 0.47 at December31, 2010 from 0.46 as of end of 2009. Total debt of euro 27,783million consisted of euro 7,478 million of short-term debt(including the portion of long-term debt due within twelve monthsequal to euro 963 million) and euro 20,305 million of long-termdebt.

More information about the composition of short-term andlong-term finance debt is disclosed under "Item 18 –Notes 21 and 26 to the Consolidated Financial Statements".

 

> 
*Capital Expenditures by Segment*

*Exploration & Production.*In 2011, capitalexpenditures of the Exploration & Production segment amountedto euro 9,435 million, representing a decrease of euro 255million, or 2.6%, from 2010 mainly due to the development of oiland gas reserves (euro 7,357 million). Significant expenditureswere directed mainly outside Italy, in particular Norway,Kazakhstan, Algeria, the Unites States, Congo and Egypt as wellas blocks and interests in licenses awarded amounting to euro 754million, mainly in Nigeria. Development expenditures in Italyconcerned well drilling program and facility upgrading in Vald’Agri as well as sidetrack and infilling activities inmature fields. About 97% of exploration expenditures thatamounted to euro 1,210 million were directed outside Italy inparticular in Australia, Angola, Mozambique, Indonesia, Ghana,Egypt, Nigeria and Norway.

In 2010, capital expenditures of the Exploration &Production segment amounted to euro 9,690 million, representingan increase of euro 204 million, or 2,2%, from 2009 mainly due tothe development of oil and gas reserves (euro 8,578 million).Significant expenditures were directed mainly outside Italy, inparticular Egypt, Kazakhstan, Congo, the United States andAlgeria. Development expenditures in Italy concerned welldrilling program and facility upgrading in Val d’Agri aswell as sidetrack and infilling activities in mature fields.About 97% of exploration expenditures that amounted to euro 1,012million were directed outside Italy in particular to Angola,Nigeria, the United States, Indonesia and Norway. In Italy,exploration activities were directed mainly to the offshore ofSicily.

*Gas & Power.* In 2011, capital expenditures in theGas & Power segment totaled euro 1,721 million and mainlyrelated to: (i) development and upgrading of Eni’s naturalgas transport network in Italy (euro 898 million) anddistribution network (euro 337 million), the development and theincrease of storage capacity (euro 294 million), as well as andthe ongoing development of power generation plants (euro 87million).

In 2010, capital expenditures in the Gas & Power segmenttotaled euro 1,685 million and mainly related to:(i) developing and upgrading Eni’s transport network inItaly (euro 842 million); (ii) developing and upgradingEni’s distribution network in Italy (euro 328 million);(iii) developing and upgrading Eni’s storage capacity inItaly (euro 250 million); (iv) completion of construction of thecombined cycle power plants at the Ferrara site, upgrading andother initiatives to improve flexibility (euro 115 million); and(v) the upgrading plan of international pipelines (euro 17million).

*Refining & Marketing.* In 2011, capital expendituresin the Refining & Marketing segment amounted to euro 866million and regarded mainly: (i) refining, supply and logisticsin Italy and outside Italy (euro 629 million), with projectsdesigned to improve the conversion rate and flexibility ofrefineries, in particular the Sannazzaro refinery, as well asexpenditures on health, safety and environmental upgrades; and(ii) upgrade and rebranding of the refined product retail networkin Italy (euro 168 million) and in the rest of Europe (euro 60million).

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In 2010, capital expenditures in the Refining & Marketingsegment amounted to euro 711 million and regarded mainly: (i)refining, supply and logistics in Italy (euro 446 million), withprojects designed to improve the conversion rate and flexibilityof refineries, in particular Sannazzaro and at the Tarantorefineries, as well as expenditures on health, safety andenvironmental upgrades; and (ii) upgrade of the refined productretail network in Italy and in the rest of Europe (euro 246million). Expenditures on health, safety and the environmentamounted to euro 143 million.

*Petrochemicals.* In 2011, capital expenditures in thePetrochemical segment amounted to euro 216 million (euro 251million in 2010) and regarded mainly (i) up keeping (euro 59million); (ii) plant upgrades (euro 53 million), mainly regardingthe project "Management of fugitive emissions" aimed atidentifying the number of sites of potential emissions where theCompany operates, putting Polimeri Europa in a leading positionat international level; (iii) environmental protection,safety and environmental regulation (euro 46 million); and (iv)energy recovery project (euro 42 million), mainly related toenergy savings projects aimed at reducing CO2emissions.

In 2010, capital expenditures in the Petrochemical segmentamounted to euro 251 million (euro 145 million in 2009) andregarded mainly plant upgrades (euro 116 million), up-keeping(euro 59 million), energy recovery (euro 45 million) andenvironmental protection, safety and environmental regulationcompliance (euro 29 million).

*Engineering & Construction.*In 2011, capitalexpenditures in the Engineering & Construction segment (euro1,090 million) mainly regarded: (i) construction of a newpipelayer, the ultra-deep Field Development Ship FDS 2,activities for the conversion of a tanker into an FPSO and theconstruction of a new fabrication yard in Indonesia; (ii)activities for the completion of Saipem 12000, a new ultra-deepwater drilling ship, construction of the Scarabeo 8 and 9semi-submersible rigs and of the Perro Negro 6 jack-up; (iii)realization/development of operating structures in the onshoredrilling business unit.

In 2010, capital expenditures in the Engineering &Construction segment (euro 1,552 million) mainly regarded:(i) Offshore: the construction of a new pipelayer and theultra-deep water Field Development Ship FDS 2, the activities forthe conversion of a tanker into an FPSO, and the development of anew fabrication yard in Indonesia; (ii) Offshore drilling: theactivities of completion of the new ultra-deep water drill shipSaipem 12000, the two semi-submersible rigs Scarabeo 8 and 9, andthe jack-up Perro Negro 6; (iii) Onshore drilling: development ofoperating structures; and (iv) Onshore: maintenance of theexisting asset base.

 

**Recent Developments**

The table below sets forth certain indicators of the tradingenvironment for the periods indicated:

|   |   | **Three months        ended March 31,** |
|--------|--------|-----------------------------------------|
|   |   |                                         |

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

| Average price of Brent dated crude oil in U.S.        dollars (1) |   | 104.97 |   | 118.49 |
|-------------------------------------------------------------------|--------|--------|--------|--------|
| Average        price of Brent dated crude oil in euro (2)         |   | 76.79  |   | 90.38  |
| Average EUR/USD exchange rate (3)                                 |   | 1.367  |   | 1.311  |
| Average        European refining margin in U.S. dollars (4)       |   | 1.74   |   | 2.92   |
| EURIBOR - three month euro rate % (3)                             |   | 1.1    |   | 1.0    |
|                                                              |   |        |   |        |

----

| (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***

In March 2012, we signed a preliminary agreement with Gazpromto revise the terms of the supply contracts of Russian gas toEni’s operations in Italy. The economic benefits of theagreement will be retroactive from the beginning of 2011 and weexpect to recognize those benefits through profit in 2012. Theparties also discussed the execution of detailed plan targetingcommencement of the construction of the offshore section in theBlack Sea of the South Stream gas pipeline with a finalinvestment decision (FID) expected by November 2012. For furtherdetails on the matter see “Item 4 – Gas & Powersegment”.

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On March 29, 2012 Eni signed agreements with Amorim Energia BVand Caixa Geral de Depósitos, SA ("CGD"), according towhich Eni will sell a 5% interest in Galp Energia (Eni’sinterest being 33.34%) to Amorim Energia and, following the sale,will cease to be bound by the shareholders agreement currently inplace between the three companies. Amorim Energia has agreed topurchase the 5% interest in Galp Energia within 150 days. Theagreements will enable Eni to divest its residual interest inGalp Energia in accordance to certain terms and time schedule.

The Company’s Annual General Shareholders Meetingscheduled on April 30 and May 8, 2012 on first and second call,respectively, is due to approve the full year dividend proposal.Eni expects to pay the balance of the dividend for fiscal year2011 amounting to euro 0.52 per share in May. Total cash out isestimated at euro 1.88 billion.

 

**Management’s Expectations of Operations**

Management expects the 2012 outlook to be a difficult one dueto continuing signs of an economic slowdown, particularly in theEuro-zone, and volatile market conditions. Management expectsinternational oil prices to be supported by robust demand growthfrom China and other emerging economies, as well as ongoinggeopolitical risks and uncertainties, partly offset by a recoveryin the Libyan output. For investment planning purposes andshort-term financial projections, Eni assumes a full-year averageprice of $90 a barrel for the Brent crude benchmark. Recoveryperspectives look poor in the gas sector. Gas demand is expectedto be soft due to slow economic activity and increasingcompetition from renewable sources; in the meantime themarketplace appears well supplied. Against this backdrop,management expects ongoing margin pressures to continue in 2012,and reduced sales opportunities due to rising competition.Management foresees the persistence of a depressed tradingenvironment in the European refining business. Refining marginsare anticipated to remain at unprofitable levels due to highcosts of oil supplies, sluggish demand and excess capacity.Against this backdrop, management expectations about the maintrends in the Company’s businesses for 2012 and beyond aredisclosed below.

 

> 
*Exploration & Production*

| • |   | The outlook for production        of liquids and natural gas is favorable in 2012, as the        Company’s activities in Libya are staging a recovery        towards the pre-crisis production plateau. Management        expects that the Company’s production in Libya will        achieve 230-240 KBOE/d on average for the full year 2012        compared to 108 KBOE/d in 2011 and 267 KBOE/d in 2010.        Outside Libya, management expects to drive growth by        ramping-up fields started in 2011 and new field start-ups        mainly in Algeria and Angola and the joint gas        development in Siberia. Based on these ongoing trends, we        expect that oil and gas production will grow        substantially in 2012 compared to 2011 (in 2011 we        reported oil and gas production available for sale at        1,523 KBOE/d).                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |
|--------|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |   | According to        management’s plans, production growth will continue        in the coming years as the Company is targeting an annual        growth rate of over 3% in the 2012-2015 period to achieve        a production plateau of 2.03 mmBOE/d by 2015. This        production forecast has been made under management’s        assumptions for oil prices at 90 $/BBL in 2012 and 2013        and then 85 $/BBL in the subsequent years and in the        long-term, as well as a normalized level of Libyan output        to calculate the 2011 production baseline. Oil price        assumptions are particularly significant when it comes to        assess the Company’s future production performance        considering the entitlement mechanism under Eni’s        PSAs and similar contractual schemes. For the current        year, the Company estimates that production entitlements        in its PSAs will decrease on average by approximately        1,000 BBL/d for a $1 increase in oil prices compared to        current Eni’s assumptions for oil prices. This        sensitivity analysis only applies to small deviations        from the adopted scenario and the impact on Eni’s        production may increase more than proportionally as the        deviation increases. However, management believes that        the sensitivity of production volumes for each U.S.        dollar price increase described above broadly continues        to apply up to the current oil price environment with        Brent prices hovering at around 125 $/BBL as of the date        of this filing, based on the Company’s current        portfolio of assets. This sensitivity analysis relates to        the existing Eni portfolio and might vary in the future.        Management estimates that should oil prices stay at the        level of 100 $/BBL in the next four years covered by our        plan, production growth will still hold an average rate        of approximately 3% in the same period. |
|   |   | Management expects that a        number of factors will drive cost increases in the        Exploration & Production operations over future        years. Those factors include: (i) the growing complexity        and scale of the Company’s planned development        projects due to the circumstance that several planned or        ongoing projects will be executed offshore or in        remote/hostile environments where the Company has been        experiencing above-average cost increases; (ii)        increasing investing activities that are necessary to        support production plateaus at existing fields and        counteract natural depletion; and (iii) steady trends in        costs for purchasing upstream goods and services. Due to        those trends, operating costs and depreciation and        amortization charges might trend higher in future years.        However management expects that the pace of cost        increases will slow down compared                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |

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|   |   | to the most recent cost        trends incurred by the Company. We believe that a number        of actions will help the Company absorb inflationary and        cost pressures including tighter cost control, operation        efficiency and increasing exposure to large fields which        enable the Company to benefit from economies due to scale        of operations. In addition, management plans to increase        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 due to greater deployment of proprietary        technologies designed to maximize the rate of hydrocarbon        recovery from reservoirs and reduce drilling costs as        well as continuing operational improvement. |
|--------|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

> 
 

*Gas & Power*

| • |   | The outlook for natural gas        sales is uncertain in 2012 due to macroeconomic        headwinds, weak demand growth and continuing        oversupplies. Against this backdrop, management expects        to achieve stable natural gas sales compared to 2011 (in        2011, worldwide gas sales were reported at 96.76 BCM and        included sales of both consolidated subsidiaries and        equity-accounted entities, as well as upstream direct        sales in the United States and the North Sea). Management        intends to seek to increase sales volumes and market        share in Italy and particularly to retain and develop its        retail customer base; outside Italy the main drivers of        growth will be sales expansion in the key markets of        France, Germany-Austria and Benelux and opportunities in        the Far East. Those increases will offset lower sales        elsewhere.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |
|--------|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |   | We expect that two        developments will help improve the profitability of the        Company’s gas marketing activity in 2012. First,        management achieved a preliminary agreement to        renegotiate terms and conditions of its supply agreement        with Gazprom in the first quarter of 2012. The economic        effects of the renewed agreement are expected to be        retroactive from beginning of 2011. Therefore, the        Company expects to recognize a sizeable gain relating the        previous reporting period in the 2012 operating profit.        Second, the restart of the supplies of gas from Libya        will enable the Company to regain full availability of        the Libyan gas to properly manage its supply portfolio        and fuel sales to Italian buyers of that gas. We note        that in 2011 the disruption in the Libyan supply severely        hit the profitability of the Company’s gas marketing        business.                                                                                                                                                                                                                                                                                                                                                                                                                             |
|   |   | Apart from these positives,        management still expects that continuing margin pressures        will erode the business’s profitability in 2012 and        beyond. A weaker-than-anticipated demand growth over the        short-term and rising competitive pressures fuelled by        ongoing oversupply in the European market will reduce        sales opportunities and trigger further pricing        competition. Unit margins are expected to remain under        pressure due to depressed spot prices at continental hubs        which have become the contractual benchmark in selling        formulas outside Italy, whereas the cost of gas supplies        to the Group remains indexed to oil prices. Therefore,        the Company is exposed to the risk of rising oil prices.        In Italy we expect that gas margins will weaken too, due        to a number of catalysts including competitive pressure,        an ongoing shift to index selling prices to hub        benchmarks in large client segments, measures by the        Italian administration to cut the gas tariffs to        residential customers as well as the other risk factors        described in Item 3.                                                                                                                                                                                                               |
|   |   | Management plans to        counteract those negative factors by leveraging a more        competitive Company’s cost structure thanks to the        economic and operational benefits associated with the        renegotiations of its main long-term arrangements with        the Company’s gas suppliers. Through these measures,        management will seek to preserve unit margins and recover        sales volumes.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |
|   |   | Difficult market conditions        in the European gas sector are expected to continue over        the next two to three years. Looking beyond, management        expects that a number of positive trends will help        rebalance the European market. European gas demand is        expected to recover in the long run driven by continuing        expansion in the use of gas in electricity production and        macroeconomic stability; excess supplies of LNG will be        absorbed by growing energy needs from the developing        economies of China and other emerging countries; the pace        of capacity additions to LNG processing is expected to        slowdown in the future; finally production rates from        European fields are projected to decline thus increasing        the need for gas import requirements. However, there        exist a number of risks to this outlook, particularly the        possible long-term impacts to gas demand associated with        the current economic downturn, an ongoing shift to        renewable sources in the production of electricity and        home heating and the other risk factors described in Item        3. Eni believes that by the end of the plan period a        convergence between spot prices of gas and oil-linked gas        costs provided by long-term gas purchase contracts will        take place.                |
|   |   | Management plans to drive        volume growth in Italy, key European markets and        international sales of LNG in the years subsequent to        2012. Volume growth is expected to be supported by the        improved competitiveness of the Company’s offering        due to the economic benefits associated with the        renegotiation of the Company’s long-term supply        contracts, as well as effective marketing actions whereby        the Company intends to regain market share in Italy and        increase sales volumes in certain European markets. The        Company intends to boost sales to business clients,        including thermoelectric utilities, large industrial        accounts and medium and small enterprises, leveraging the        Company’s multiple presence across various markets;        brand awareness and expertise in delivering innovative        and tailor-made offering structures to best suit        customers’ needs (see "Item 4 – Gas &        Power"). Company’s marketing effort will also        address retail customers across Europe seeking to enhance        the ongoing strong customer base. The drivers to achieve        this will be a strategy of customer retention centered on        brand identity, a distinctive offer and competitive cost        to serve. We plan to deploy a wide range |

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|   |   | of sale channels and        continuing innovation in processes, promotion and        customer care and post-sale assistance in order to boost        sales. |
|--------|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   |   | Based on the above outlined        trends and industrial actions, management believes that        profitability in the Company’s gas marketing        business will gradually recover along the plan period,        albeit the visibility into future results of operations        is constrained by the ongoing volatility in marketing        margins. Our profitability outlook is subject to the risk        of revision in the tariffs to residential customers in        Italy associated with the possible impacts of the Italian        Government’s decree on liberalizations, as well as        the other risk factors described in Item 3. Management        will also seek to improve profitability by means of cost        efficiencies, streamlining business support activities        and reducing marketing and general and administrative        costs. In addition, the Company intends to capture        margins improvements by means of a new risk management        strategy by entering derivatives contracts both in the        commodity and the financial trading venues in order to        capture possible favorable trends in market prices,        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 those assets. This can be achieved by        entering arbitrage contracts to leverage price        differentials at various points along the gas value chain        or through strategies of dynamic forward trading where        the underlying items are represented by the        Company’s assets. For further information on the        market risk and how the Company manages it see "Item        11 – Quantitative and Qualitative Disclosures About        Market Risk" and "Item 18 – Note 34 to the        Consolidated Financial Statements". |
|--------|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |   | Considering that current        imbalances between demand and supply on the European        market are expected to continue for some time, management        factored in its planning assumptions the risk that the        Company sales may fall below the annual minimum take        provided by our long-term gas supply contracts thus        triggering the take-or-pay clause in the next two to        three years. In light of management assumptions for        long-term growth in gas demand, the Company believes that        in the long-term it will be in the position to recover        volumes of gas which have been pre-paid from 2009 to 2011        due to the take-or-pay clause and the expected volumes        which might be pre-paid over the next future years due to        ongoing uncertainties and weak conditions in the gas        market. For more information see the specific risk        paragraph in “Item 3 – Risk Factors”.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |
|   |   | For a discussion of certain        risks relating to the impact of the evolution of Italian        regulation of the natural gas sector on Eni’s        take-or-pay contracts see "Item 3 – Risk        Factors – Natural Gas Market".                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |
| • |   | Regulated businesses in        Italy are planned to benefit from the pre-set, regulatory        return on new capital expenditures and cost savings from        integrating the whole chain of transport, storage and        distribution activities.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |

> 
 

*Refining & Marketing*

| • |   | Management forecasts that        the trading environment will show limited improvement        throughout the next four years covered by the industrial        plan. Particularly we expect refining margins to remain        at unprofitable levels in 2012 due to a combination of        rising feedstock costs and weak industry fundamentals        relating to low fuel demand and excess capacity in the        Mediterranean area. Furthermore, compressed differentials        between heavy and light crudes will continue eroding        Eni’s advantage of having complex refining capacity        in place. We note that in the 2011 management recognized        substantial impairment losses relating the Company’s        refining plants (euro 645 million before tax) due to        reduced cash flow projections in the refining business        reflecting the persistence of the current industry        downturn. Management plans to maintain refinery processed        volumes in line with 2011 (in 2011 refining throughputs        on own account were reported at 31.96 mmtonnes) in        response to a negative trading environment. Management is        planning to pursue process optimization measures by        improving yields, cycle integration and flexibility, as        well as efficiency gains by cutting fixed and logistics        costs and energy savings in order to reduce the business        exposure to the market volatility and achieve immediate        benefits on the profit and loss. |
|--------|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |   | Retail sales of refined        products in Italy and the rest of Europe are forecast to        come in slightly lower than in 2011 (in 2011, retail        sales volumes in Italy and Rest of Europe were reported        at 11.37 mmtonnes). In Italy where fuel consumption is        anticipated to continue on a downward trend and a new        wave of liberalization promises to spur competition,        management intends to preserve the Company’s market        share and profitability by leveraging marketing        initiatives tailored to customers’ needs, the        strength of the eni brand targeting to complete the        rebranding of the network, and an excellent service.        Outside Italy, the Company will grow selectively        targeting stable volumes.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |

> 
 

*Engineering & Construction*

| • |   | The Engineering &        Construction business is expected to see solid results        due to a robust order backlog. This business unit has        managed through the years to progressively reduce its        exposure to the more volatile segments of the industry        leveraging on portfolio diversification and an        established competitive position in the segment of large        upstream projects in frontier areas and complex        environments with an important technological content that        have shown a good level of resiliency throughout the        industry cycles. The entry into operations of new        distinctive assets in 2010 and 2011 coupled with the size        and quality of the backlog and the strong operating        performance in terms of project executions, underpin        management’s expectations for |
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|   |   | further significant        strengthening of Saipem’s competitive position in        the medium term, ensuring a good level of result        stability. |
|--------|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------|

 

> 
*Petrochemicals*

| • |   | Eni’s petrochemical        operations are exposed to volatile costs of oil-based        feedstock and the cyclicality of demand due to the        commoditized nature of Eni’s product portfolio and        underlying weaknesses in the industry. In 2011 Eni’s        petrochemicals business reported wider operating losses        due to sharply lower margins reflecting rising oil costs        and as demand for petrochemicals commodities plunged in        the last quarter of the year dragged down by the economic        downturn. Short to medium term perspectives remains        uncertain due to a weak macroeconomic outlook which will        weigh on a rebound in demand for petrochemicals products        and ongoing trends in crude oil prices. To cope with the        structural challenges of the Company’s        petrochemicals business, management is planning to        implement a strategic shift targeting to restore the        economic equilibrium of Polimeri Europa over the medium        term. This new strategy features a gradual reduction of        the exposure to unprofitable, commoditized businesses in        favor of growing the Company’s presence in niche        productions, particularly elastomers and styrene, which        showed a good resilience during the downturn, as well as        starting innovative productions in the field of        biochemistry. An example in point is the launch of the        "green chemistry" project at the Porto Torres        plant which envisages restructuring an obsolete,        unprofitable plant into a modern facility to produce        bio-plastics for which attractive grow rates are seen. |
|--------|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

> 
 

*Capital Expenditure plans*

Over the next four years, the Company plans to invest euro59.6 billion in its businesses to support continued organicgrowth; approximately 75%, 13%, 5%, 4% and 3% of planned capitalexpenditures is expected to be directed to the Exploration &Production, Gas & Power, Refining & Marketing,Engineering & Construction and Petrochemicals segments,respectively. The planned amounts of expenditures also includecapital allocation to join venture projects and associates.

We plan to allocate the largest portion of resources amountingto some euro 37.6 billion to continuing development activities inour Exploration & Production business to fuel productiongrowth. Project start-ups and plateau enhancement at existingfields will be executed mainly in Norway, Iraq, Angola, Nigeria,Kazakhstan, Mozambique, Italy and Congo. Other importantdevelopment projects will be executed through joint ventureagreements in Venezuela and Russia. Exploration items willattract some euro 5.5 billion to appraise the latest discoveriesmade by the Company and to support continuing reservereplacement. The most important amounts of exploration expenseswill be incurred in Mozambique, the United States, Egypt,Nigeria, Angola, Norway and Indonesia; important resources willbe dedicated to explore new areas in Sub-Saharan Africa (Liberia,Ghana) and on unconventional plays. In the Gas & Powerbusiness the main investment projects will target the upgradingof gas transport pipelines and the expansion of storage sites anddistribution networks. In the Refining & Marketing businesswe will selectively upgrade refinery conversion capacity andflexibility as well as plant reliability and security. Thenetwork of service stations will be upgraded and modernized. Inthe Petrochemicals business we plan to selectively expandcapacity in the best positioned lines of business (namelyelastomers), while targeting plant efficiency, reliability andenergy savings in other areas. Finally, in the Engineering &Construction business segment we plan to complete theconstruction of certain rigs and vessels and continuously enhanceour fleet and logistic centers.

Eni’s capital expenditure program is expected to increaseby approximately 12% compared to the previous industrial plan dueto planned expenditures for developing new upstream projects thatwill fuel our long-term production plateau, particularly thoseassociated with reserves development in Mozambique, Nigeria,Indonesia, the Barents Sea and Venezuela and higher explorationexpenses. Those increases will be partly offset by the assumptionof a slightly weaker U.S. dollar exchange rate vs. the eurocompared to the previous industrial plan.

In the year 2012, management expects a capital budget almostin line with 2011 (in 2011 capital expenditure amounted to euro13.44 billion, while expenditures incurred in joint ventureinitiatives and other investments amounted to euro 0.36 billion).Management plans to continue spending on exploration to appraisethe mineral potential of recent discoveries (Mozambique, Norway,Ghana and Indonesia) and investing large amounts on developinggrowing areas and maintain field plateaus in mature basins. Otherinvestment initiatives will target the upgrading of the gastransport and distribution networks, the completion of the ESTproject in the refining business, and strengthening selectedpetrochemicals plants.

Management expects to pursue strict capital discipline whenassessing individual capital projects. Management assumed an oilprice of 90-85 $/BBL in the next four-year period; longer term,management assumed an oil price of 85 $/BBL that is adjusted totake account of expected inflation from 2016 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 takinginto account: (i) the weighted average cost of capital to theGroup. In 2011, management assessed that the cost of capital tothe Group decreased by 0.5 percentage points on average from the 

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previous year reflecting a reduced market risk premium forEni’s shares. Such trend was partially offset by an increasein the other financial parameters used for determining the costof capital: cost of borrowings to Eni determined by expectedtrends for spreads and management’s estimates for thecomposition of the Company’s finance debt in the nextfour-year plan, increased risk-free yields reflecting the higherrisk premium for Italy and an appreciation of the country risk ofEni’s portfolio which factors in the perceived level of riskassociated with each country of operations in terms of currenttrends and conditions in the macroeconomic, business, regulatoryand socio-political framework as well as the consensus outlook;and (ii) a premium for the business risk.

 

> 
*Liquidity and leverage*

In the foreseeable future, management is strongly focused onpreserving a solid balance sheet and an adequate level ofliquidity taking into account macroeconomic uncertainties andtight financial markets. For planning purposes, managementprojected the Company’s expected cash flows assuming ascenario of Brent prices at 90-85 $/BBL for the years 2012-2015to assess the financial compatibility of its capital expendituresprograms and dividend policy with internal targets of ratio ofnet borrowings to total equity. We note that the Brent price inthe period January 1 to March 30, 2012 was 118.49 $/BBL onaverage. However, we believe that the positive effects associatedwith higher oil prices on the Company’s results andliquidity in its upstream operations may be short-lived as higheroil prices could trigger a demand downturn which could in turnlead to lowering prices. In addition, rapidly escalating oilprices have an adverse impact on the profitability of ourdownstream businesses. See “Item 3 – RiskFactors”.

In 2012 the ratio of net borrowings to total equity –leverage – is projected to be roughly in line with the levelachieved at the end of 2011 assuming a Brent price of $90 abarrel. Looking forward, management will seek to progressivelyreduce this ratio to below 40% by the end of the plan periodleveraging on the projected future cash flow from operationswhich are estimated to generate enough resources to fund bothcapital expenditures and dividends to Eni’s shareholders.

Management is currently assessing any impact on the Groupfinancial profile associated with the possible finalization ofthe divestment of certain Eni’s non strategic interests,namely the 52.53% stake in Snam and the 33.34% stake in GalpEnergia SGPS SA. On March 29, 2012 the Company signed anagreement with Galp’s reference shareholders which willenable the Company to progressively divest its interest in Galp,thus removing a great deal of uncertainty around thistransaction. See "Recent Developments – SignificantTransactions". The outlook for the divestment of Eni’sinterest in Snam is uncertain as of the filing date because issubject to enactment of a specific decree by the ItalianGovernment which is a matter out of the control of management.For more details on this issue see "Item 3 – RiskFactors" and "Item 4 – Regulation of Eni’sBusinesses".

For planning purposes, management assumed an average exchangerate of approximately 1.35 U.S. dollars per euro in the 2012-2015period. 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*

In the next four-year period management intends to maintainits progressive dividend policy. Management plans to pay adividend of euro 1.04 a share for 2011 subject to approval fromthe Annual General Shareholders’ Meeting scheduled on May 8,2012. Of this, euro 0.52 per share was paid in September 2011 asan interim dividend with the balance of euro 0.52 per shareexpected to be paid late in May 2012. The dividend for fiscalyear 2011 represents an increase of 4% compared to the 2010dividend and was in line with management plans to grow thedividend to shareholders to take into account the expected rateof inflation in OECD countries. We plan to continue increasingthe dividend in future years in accordance to this guideline.This dividend policy is based on management’s planningassumptions for oil prices at 90-85 $/BBL in the 2012-2015period. If management assumptions on oil prices were to change,management may revise the dividend and reset the basis forprogressive dividend increases. In future years, managementexpects to continue paying interim dividends for each fiscalyear, with the balance for the full-year dividend paid in thefollowing year.

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,risks in political instability in certain our countries ofoperations, crude oil and natural gas prices; demand for oil andgas in Italy and other markets; developments in electricitygeneration; price fluctuations; drilling and production results;refining margins and marketing margins; currency exchange rates;general economic conditions; political and economic policies andclimates in countries 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

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sanctions; project delays; material differences from reservesestimates; inability to find and develop reserves; technologicaldevelopment; technical difficulties; market competition; theactions of field partners, including the inability of jointventure partners to fund their share of operating or developmentsactivities; industrial actions by workers; environmental risks,including adverse weather and natural disasters; and otherchanges 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 to the Consolidated FinancialStatements". Eni’s principal contractual obligations,including commitments under take-or-pay or ship-or-pay contractsin the gas business, are described under "ContractualObligations" below. See the Glossary for a definition oftake-or-pay or ship-or-pay clauses.

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 onbehalf of consolidated companies, primarily relating toperformance under contracts. These arrangements are described in"Item 18 – Note 34 to the Consolidated FinancialStatements".

 

 

 

 

 

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> 
***Contractual Obligations***

Amounts in the table refer to expected payments, undiscounted,by period under existing contractual obligations commitments.

 

|   | **Maturity        year** |
|--------|--------------------------|
|   |                          |

|   | **Total** |   | **2012** |   | **2013** |   | **2014** |   | **2015** |   | **2016** |   | **2017 and thereafter** |
|--------|-----------|--------|----------|--------|----------|--------|----------|--------|----------|--------|----------|--------|-------------------------|
|   |           |   |          |   |          |   |          |   |          |   |          |   |                         |

|   | **(euro        million)** |
|--------|---------------------------|

| **Total debt**                                                                           |   | **31,751**  |   | **7,883**  |   | **3,313**  |   | **5,150**  |   | **3,023**  |   | **2,892**  |   | **9,490**   |
|------------------------------------------------------------------------------------------|--------|-------------|--------|------------|--------|------------|--------|------------|--------|------------|--------|------------|--------|-------------|
| Long-term        finance debt                                                            |   | 24,875      |   | 1,635      |   | 3,010      |   | 5,076      |   | 2,936      |   | 2,840      |   | 9,378       |
| Short-term finance debt                                                                  |   | 4,459       |   | 4,459      |   |       |   |       |   |       |   |       |   |        |
| Fair value        of derivative instruments                                              |   | 2,417       |   | 1,789      |   | 303        |   | 74         |   | 87         |   | 52         |   | 112         |
| **Interest on finance debt**                                                             |   | **4,890**   |   | **832**    |   | **761**    |   | **664**    |   | **553**    |   | **485**    |   | **1,595**   |
| **Guarantees        to banks**                                                           |   | **576**     |   | **576**    |   |       |   |       |   |       |   |       |   |        |
| **Non-cancelable operating lease obligations**(1)                                        |   | **2,479**   |   | **839**    |   | **534**    |   | **440**    |   | **250**    |   | **161**    |   | **255**     |
| **Decommissioning        liabilities**(2)                                                |   | **14,129**  |   | **98**     |   | **179**    |   | **305**    |   | **95**     |   | **165**    |   | **13,287**  |
| **Environmental liabilities**(3)****                                                     |   | **1,926**   |   | **269**    |   | **306**    |   | **251**    |   | **221**    |   | **81**     |   | **798**     |
| **Purchase        obligations**(4)                                                       |   | **292,370** |   | **21,401** |   | **21,034** |   | **20,943** |   | **20,131** |   | **17,743** |   | **191,118** |
| Natural gas to be purchased in connection with        take-or-pay contracts (5)          |   | 276,947     |   | 19,972     |   | 19,688     |   | 19,656     |   | 18,932     |   | 16,587     |   | 182,112     |
| Natural        gas to be transported in connection with ship-or-pay        contracts (5) |   | 10,502      |   | 1,034      |   | 988        |   | 919        |   | 898        |   | 847        |   | 5,816       |
| Other take-or-pay and ship-or-pay obligations                                            |   | 1,923       |   | 170        |   | 165        |   | 176        |   | 172        |   | 161        |   | 1,079       |
| Other        purchase obligations (6)                                                    |   | 2,998       |   | 225        |   | 193        |   | 192        |   | 129        |   | 148        |   | 2,111       |
| **Other obligations**(7)                                                                 |   | **142**     |   | **4**      |   | **4**      |   | **4**      |   | **3**      |   | **3**      |   | **124**     |
| *of        which:*                                                                       |   |        |   |       |   |       |   |       |   |       |   |       |   |        |
| *- Memorandum of intent relating to Val        d’Agri*                              |   | *142*       |   | *4*        |   | *4*        |   | *4*        |   | *3*        |   | *3*        |   | *124*       |
|                                                                                     |   |             |   |            |   |            |   |            |   |            |   |            |   |             |
| **TOTAL**                                                                                |   | **348,264** |   | **31,903** |   | **26,131** |   | **27,757** |   | **24,276** |   | **21,530** |   | **216,667** |
|                                                                                     |   |             |   |            |   |            |   |            |   |            |   |            |   |             |

----

| (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 dividend, use        assets or to take on new borrowings.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |
|-----|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| (2) | i      | 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        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) | i      | 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 – Risk in the Company Gas &        Power business segment” for a discussion of nature        and importance of Eni’s take-or-pay contracts and        the related risks from the evolving competitive and regulatory        environment that could negatively impact Eni’s        results. |
| (6) | i      | Mainly refers        to arrangements to purchase capacity entitlements at        certain re-gasification facilities in the United States.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |
| (7) | i      | 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 28 to the Consolidated        Financial Statements”).                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |

The table below summarizes Eni’s capital expenditurecommitments for property, plant and equipment as of December 31,2011. Capital expenditures are considered to be committed whenthe project has received the appropriate level of internalmanagement approval. Such costs are included in the amountsshown.

|   | **Total** |   | **2012** |   | **2013** |   | **2014** |   | **2015** |   | **2016 and thereafter** |
|--------|-----------|--------|----------|--------|----------|--------|----------|--------|----------|--------|-------------------------|
|   |           |   |          |   |          |   |          |   |          |   |                         |

|   | **(euro        million)** |
|--------|---------------------------|

| Committed on major projects     |   | 32,986     |   | 6,103      |   | 6,275      |   | 5,013     |   | 3,309     |   | 12,286     |
|---------------------------------|--------|------------|--------|------------|--------|------------|--------|-----------|--------|-----------|--------|------------|
| Other        committed projects |   | 22,137     |   | 7,411      |   | 5,446      |   | 3,498     |   | 2,709     |   | 3,073      |
|                            |   |            |   |            |   |            |   |           |   |           |   |            |
| **TOTAL**                       |   | **55,123** |   | **13,514** |   | **11,721** |   | **8,511** |   | **6,018** |   | **15,359** |
|                            |   |            |   |            |   |            |   |           |   |           |   |            |

> 
***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 so as to be unable to meetshort-term finance requirements and to settle obligations. 

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Such a situation would negatively impact Group results as itwould result in the Company incurring higher borrowing expensesto meet its obligations or under the worst of conditions theinability of the Company to continue as a going concern. Atpresent, the Group believes it has access to sufficient fundingand has also both committed and uncommitted borrowing facilitiesto meet currently foreseeable borrowing requirements. For adescription of how the Company manages the liquidity risk see"Item 18 – Note 34 to the Consolidated FinancialStatements".

At December 31, 2011, Eni maintained short-term committed anduncommitted unused borrowing facilities of euro 11,897 million,of which euro 2,551 million were committed, and long-termcommitted unused borrowing facilities of euro 3,201 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 10.5billion were drawn as of December 31, 2011.

 

> 
***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 to the Consolidated FinancialStatements".

For information about credit losses in 2011 and the allowancefor doubtful accounts see "Item 18 – Note 9 to theConsolidated 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 vs. 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 to the Consolidated FinancialStatements".

 

> 
***Research and Development***

For a description of Eni’s research and developmentoperations in 2011, see "Item 4 – Research andDevelopment".

 

 

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**Item 6. DIRECTORS, SENIOR MANAGEMENT ANDEMPLOYEES**

**Directors and Senior Management**

The following lists the Company’s Board of Directors asat April 20126:

| **Name**           |   | **Position** |   | **Year        elected or appointed** |   | **Age** |
|--------------------|--------|--------------|--------|--------------------------------------|--------|---------|
|                    |   |              |   |                                      |   |         |
| Giuseppe Recchi    |   | Chairman     |   | 2011                                 |   | 48      |
| Paolo Scaroni      |   | CEO          |   | 2005                                 |   | 65      |
| Carlo Cesare Gatto |   | Director     |   | 2011                                 |   | 70      |
| Alessandro Lorenzi |   | Director     |   | 2011                                 |   | 63      |
| Paolo Marchioni    |   | Director     |   | 2008                                 |   | 42      |
| Roberto Petri      |   | Director     |   | 2011                                 |   | 62      |
| Alessandro Profumo |   | Director     |   | 2011                                 |   | 55      |
| Mario Resca        |   | Director     |   | 2002                                 |   | 66      |
| Francesco Taranto  |   | Director     |   | 2008                                 |   | 71      |
|                    |   |              |   |                                      |   |         |

In accordance with Article 17.3 of Eni’s By-laws, theBoard of Directors is made up of 3 to 9 members. The currentBoard of Directors was elected by the ordinary Shareholders’Meeting held on May 5, 2011, which also established the number ofDirectors at nine for a term of three financial years. TheBoard’s mandate will therefore expire with theShareholders’ Meeting approving the financial statements forthe year ending December 31, 2013. 

The Board of Directors is appointed by means of a slate votingsystem: the lists are presented by the shareholders representingat least 0.5% of the share capital. The third part of the Boardis appointed among the candidates of the minority shareholders.Pursuant to Article 6, paragraph 2, letter d) of the By-laws, theMinistry of the Economy and Finances – in agreement with theMinister of Economic Development – may also appoint aDirector without voting rights. 

Giuseppe Recchi, Paolo Scaroni, Carlo Cesare Gatto, PaoloMarchioni, Roberto Petri and Mario Resca were candidates of theMinistry of Economy and Finance. Alessandro Lorenzi, AlessandroProfumo and Francesco Taranto were candidates of InstitutionalInvestors.

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 Economyand 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 Economy and Finance opted notto exercise that power. On March 15, 2012, the Law Decree No.21/2012 on "Provisions regarding special powers on companiesin defense and national security areas and for activities ofstrategic importance in energy, transport and communicationsareas" was published in the Italian Official Gazette. TheLaw Decree is in force, but subject to conversion into Law within60 days. The Decree, issued to comply with the EuropeanCommission prescriptions, provides for the repeal of the presentspecial powers (set out in the Law No. 474/1994), when thenational strategic assets are identified by the Government. Thenew special powers of the Government include a veto power and theauthority to impose specific conditions on the direct and/orindirect dismissal of such assets, on the basis of objective andnon discriminatory criteria.

Below are some details on the personal and professionalprofiles of the Directors.

**Giuseppe Recchi** Born in 1964. He is Chairman of theBoard of Eni since May 2011. He is Vice Chairman of GE CapitalSpA; member of the board of directors, the compensation and auditcommittees of Exor SpA (listed at Milan Stock Exchange); memberof the European Advisory Board of Blackstone and member of theMassachusetts Institute of Technology E.I. External AdvisoryBoard. He is also member of the executive committees ofConfindustria (the Confederation of Italian Industries, where heis Chairman of the Foreign Investment Committee), Assonime(Association of Italian Joint Stock Companies), Aspen InstituteItalia; member of the Trilateral Commission; member of the boardof directors of FEEM-Eni Enrico Mattei Foundation and of theItalian Institute of Technology. He graduated in Engineering atPolytechnic of Turin. In 1989 started his career as entrepreneurat Recchi SpA, a general contractor 

----

| (6) |    | Until May 5,        2011, the members of the Board of Directors were: Roberto        Poli, Paolo Scaroni, Paolo Andrea Colombo, Alberto Clô,        Paolo Marchioni, Marco Reboa, Mario Resca, Pierluigi        Scibetta and Francesco Taranto. |
|-----|--------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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active in 25 countries in the construction of high-tech publicinfrastructures. From 1994 he served as Executive Chairman ofRecchi America Inc., the U.S. branch of the Group and as ManagingDirector for the overseas activities of Ferrocemento-Recchi Group(now Condotte SpA). In 1999 he joined General Electric, where heheld several managerial positions in Europe and in the UnitedStates. He served as Director of GE Capital Structure FinanceGroup; Managing Director for Industrial M&A and BusinessDevelopment for GE EMEA; President & CEO of GE Italy. UntilMay 2011 he was President & CEO of GE South Europe. Mr.Recchi was member of the Honorary Committee for the RomeCandidacy to the 2020 Olympic Games, member of the board ofPermasteelisa SpA (listed at Milan stock exchange), AdvisoryBoard member of Invest Industrial (private equity) and visitingprofessor in Structured Finance to Turin University. Mr. Recchiis occasionally editorial commentator for financial papers (IlSole 24 Ore, Corriere della Sera, MF and Harvard BusinessReview).

**Paolo Scaroni** He has been Chief Executive Officer ofEni since June 2005. He is currently Non-Executive Director ofAssicurazioni Generali, Non-Executive Deputy Chairman of LondonStock Exchange Group, Non-Executive Director of VeoliaEnvironnement. Besides he is in the Board of Overseers ofColumbia Business School and Fondazione Teatro alla Scala. Aftergraduating in economics at the Università Luigi Bocconi, Milan,in 1969, he worked for three years at Chevron, before obtainingan MBA from Columbia University, New York, and continuing hiscareer at McKinsey. In 1973 he joined Saint Gobain, where he helda series of managerial positions in Italy and abroad, until hisappointment as head of the Glass segment in Paris in 1984. From1985 to 1996 he was Deputy Chairman and Chief Executive Officerof Techint. In 1996 he moved to the UK and was Chief ExecutiveOfficer of Pilkington until May 2002. From May 2002 to May 2005he was Chief Executive Officer and Chief Operating Officer ofEnel. From 2005 to July 2006 he was Chairman of Alliance Unichem.In May 2004 he was decorated as Cavaliere del Lavoro of theItalian Republic. In November 2007 he was decorated as anOfficier of the Légion d’honneur.

**Carlo Cesare Gatto** Born in 1941. He has been Directorof Eni since May 2011. He graduated in Economics and Business atthe Università degli Studi of Turin. He is a registered publicauditor. He is currently Chairman of the Board of StatutoryAuditors of RAI SpA, Natuzzi SpA and Difesa Servizi SpA, Chairmanof the Board of Directors of DeaPrinting Officine Grafiche Novara1901 SpA, and Chairman of Flenco Fluid System Srl and Director ofArcese Trasporti SpA. He was teacher of Finance, Administrationand Control at the Isvor Fiat SpA training institute. In 1968 hewas hired by Impresit as Chief Accountant and managed, in Jordan,the finance department of the local branch. He joined the FiatGroup in 1969 where over the years he held a series of increasingresponsibility positions in the area of finance, administrationand control. From 1979 to 1990 he was Head of Financial Reportingat Fiat Group and also had responsibility for the control of thetransport companies (Sapav, Sadem, Sita), run under concession bythe Fiat Group and for which he subsequently oversaw the sale. In1990 he was appointed Joint Manager of Finance and Control of theFiat Group, before becoming, in 1998, Chief AdministrationOfficer (CAO) of the Fiat Group. From 2000 to 2004, he was ChiefExecutive Officer and Deputy Chairman of Business Solution, a newsector created by Fiat for the supply of business services. In1993 he was the Italian Representative at the European Commissionfor the fiscal harmonization of member States. In 1992 he wasdecorated as Cavaliere Ordine al Merito of the Italian Republicand, in 1995, as Ufficiale Ordine al Merito of the ItalianRepublic.

**Alessandro Lorenzi** Born in 1948. He has been Directorof Eni since May 2011. He graduated in Political Science at theUniversità degli Studi of Turin. He is currently a foundingpartner of Tokos Srl, consulting firm for securities investmentand Chairman of Società Metropolitana Acque Torino SpA. He beganhis career at SAIAG SpA, involved in the implementation ofindustrial accounting and reporting. In 1975 he joined Fiat IvecoSpA where he held a series of positions: Head of Administration,Finance and Control and Head of Personnel of Orlandi SpA inModena (1977-1980) and in charge of the project pertaining thesystem of administration and control for the production areas(1981-1982). In 1983 he joined GFT Group where he was: Head ofAdministration, Finance and Control of Cidat SpA, a GFT SpAsubsidiary (1983-1984), Central Controller of GFT Group(1984-1988), Head of Finance and Control of GFT Group (1989-1994)and Managing Director of GFT SpA, with ordinary and extraordinarypowers over all operating activities (1994-1995). In 1995 he wasappointed Chief Executive Officer of SCI SpA, where he oversawthe restructuring process. In 1998 he was appointed CentralManager, and subsequently Director of Ersel SIM SpA. In 2000 hebecame Central Manager of Planning and Control at the FerreroGroup and General Manager of Soremartec, the technical researchand marketing company of the Ferrero Group. In May 2003 he wasappointed CFO of Coin Group. In 2006 he became Central CorporateManager at Lavazza SpA, becoming member of the Board of Directorsfrom 2008 to June 2011. Until this date, he was also Director ofLCS Srl as well as Chairman of COFINCAF SpA until May 2011.

**Paolo Marchioni** Born in 1969. He has been Director ofEni since June 2008. He is a qualified lawyer specializing inpenal and administrative law, counselor in Supreme Court andsuperior jurisdictions. He is currently Director of theProvincial Board of the Province of Verbano-Cusio-Ossola. He hasbeen Chairman of the Board of Directors of Finpiemontepartecipazioni SpA since August 2010. He acts as a consultant togovernment agencies and business organizations on business,corporate, administrative and local government law. He was Mayorof Baveno (Verbania) from April 1995 to June 2004 and Chairman ofthe Assembly 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 Stresa city council. From October 2001 toApril 2004 he was Director of CIM SpA of Novara (merchandiseinterport center) and from December 2002 to December 2005Director and executive committee member of Finpiemonte SpA. 

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From June 2005 to June 2008 he was Director of Consip. He wasProvincial Councillor in charge of budget and balance sheet,property, legal affairs and production activities and VicePresident of the Province of Verbano-Cusio-Ossola from June 2009to October 2011. 

**Roberto Petri** Born in 1949. He has been Director of Enisince May 2011. He graduated in law at the Università degliStudi "Gabriele D’Annunzio" of Chieti and Pescara.He has been member of the Board of Directors of the RavennaFestival since 2007 and he has been Chairman of Italimmobili Srlsince 2011. In 1976 he was hired by Banca Nazionale del Lavoro(BNL) where he held a series of positions: Head of the"Overdrafts Advisory" of BNL in Busto Arsizio (1982),Deputy Manager for the industrial division at the BNL branch inRavenna (1983-1987), Area Chief of BNL in Venice (1987-1989) andJoint Manager of the central office of BNL in Rome (1989-1990).In 1990 he was appointed commercial manager at Banca Popolare andin 1994 he moved, with the same position, to Cassa di Risparmiodi Ravenna Group (Carisp Ravenna e Banca di Imola). From 2001 to2006 he was Chief Secretary to the Under-Secretary of Defense,where he was mainly involved in the Department’s contactswith industry and international relations. From 2008 to 2011 hewas Chief Secretary at the Ministry of Defense. From 2003 to 2006he was Director of Fintecna SpA and from 2005 to 2008 Director ofFinmeccanica SpA.

**Alessandro Profumo** Born in 1957. He has been Directorof Eni since May 2011. He graduated in Business Administration atthe Università Luigi Bocconi of Milan. He is currently Chairmanof Appeal Strategy & Finance Srl and member of theSupervisory Board of Sberbank. He is also member of the Board ofDirectors of the Bocconi University in Milan and of theFondazione Arnaldo Pomodoro. 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 &Company). In 1991 he left the field of company consultancy tojoin RAS, Riunione Adriatica di Sicurtà, where he was in chargeof General Manager, for the banking and parabanking sectors. Hewas also in charge of the yield increase of that company’sbank and of the other group companies operating in the field ofasset management. In 1994 he joined Credito Italiano as JointCentral Manager, responsible 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 ainternational level he was Chairman of the European BankingFederation and Chairman of the IMC Washington. In May 2004 he wasdecorated as Cavaliere del Lavoro.

**Mario Resca** Born in 1945. He has been Director of Enisince May 2002. He graduated in Economics and Business at theUniversità Luigi Bocconi of Milan. He is currently GeneralDirector of Italian Heritage and Antiquities in the Ministry ofCultural Heritage and Activities. He is also Chairman ofConfimprese, Chairman of Convention Bureau Italia SpA, DeputyChairman of Sesto Immobiliare SpA and Director of Mondadori SpA.After graduating he joined Chase Manhattan Bank. In 1974 he wasappointed manager of Saifi Finanziaria (Fiat Group) and from 1976to 1991 he was a partner of Egon Zehnder. In this period he wasappointed Director of Lancôme Italia and of companies belongingto the RCS Corriere della Sera Group and the Versace Group. From1995 to 2007 he was Chairman and Chief Executive Officer ofMcDonald’s Italia. He was also Chairman of Sambonet SpA andKenwood Italia SpA, a founding partner of Eric Salmon &Partners and Chairman of the American Chamber of Commerce. He wasdecorated as a Cavaliere del Lavoro in June 2002.

**Francesco Taranto** Born in 1940. He has been Director ofEni since June 2008. He is currently Director of Cassa diRisparmio di Firenze SpA and ERSEL S.I.M. He started working in1959, in a stock brokerage in Milan; from 1965 to 1982, he workedat Banco di Napoli as deputy manager of the stock market andsecurities department. He held a series of managerial positionsin the asset management field, notably he was manager ofsecurities funds at Eurogest from 1982 to 1984, and GeneralManager of Interbancaria Gestioni from 1984 to 1987. After movingto the Prime group (1987 to 2000), he was Chief Executive Officerof the parent company for a long period. He was also a member ofthe steering council of Assogestioni and of the CorporateGovernance committee for listed companies formed by BorsaItaliana. He was a Director of Enel from October 2000 to June2008.

 

 

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> 
*Senior Management*

The table below sets forth the composition of Eni’sSenior Management, until December 31, 2011. 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 directly report 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   |   | 7      |   | 65     |
|------------------------------|--------|----------------------------------------------------------------------------------------------------|--------|--------|--------|--------|--------|--------|
|                         |   |                                                                                               |   |   |   |   |   |   |
| Claudio Descalzi             |   | Exploration &        Production Chief Operating Officer                                        |   | 2008   |   | 31     |   | 57     |
|                         |   |                                                                                               |   |   |   |   |   |   |
| Domenico Dispenza        (a) |   | Gas & Power Chief        Operating Officer                                                     |   | 2005   |   | 38     |   | 65     |
|                         |   |                                                                                               |   |   |   |   |   |   |
| Angelo Fanelli               |   | Refining & Marketing        Chief Operating Officer                                            |   | 2010   |   | 31     |   | 59     |
|                         |   |                                                                                               |   |   |   |   |   |   |
| Alessandro Bernini           |   | Chief Financial Officer                                                                            |   | 2008   |   | 16     |   | 51     |
|                         |   |                                                                                               |   |   |   |   |   |   |
| Salvatore Sardo              |   | Chief Corporate        Operations Officer                                                          |   | 2008   |   | 7      |   | 59     |
|                         |   |                                                                                               |   |   |   |   |   |   |
| Massimo Mantovani            |   | General Counsel Legal        Affairs         Senior Executive Vice President                       |   | 2006   |   | 19     |   | 48     |
|                         |   |                                                                                               |   |   |   |   |   |   |
| Marco Petracchini        (b) |   | Internal Audit Senior        Executive Vice President                                              |   | 2011   |   | 13     |   | 47     |
|                         |   |                                                                                               |   |   |   |   |   |   |
| Salvatore Meli (c)           |   | Research and        Technological Innovation         Executive Vice President                      |   | 2011   |   | 30     |   | 58     |
|                         |   |                                                                                               |   |   |   |   |   |   |
| Stefano Lucchini             |   | Public Affairs and        Communication        Senior Executive Vice President                     |   | 2005   |   | 7      |   | 49     |
|                         |   |                                                                                               |   |   |   |   |   |   |
| Roberto Ulissi               |   | Company Secretary         Corporate Affairs and Governance         Senior Executive Vice President |   | 2006   |   | 6      |   | 49     |
|                         |   |                                                                                               |   |   |   |   |   |   |
| Marco Alverà (d)        |   | Trading Senior Executive        Vice President                                                     |   | 2005   |   | 7      |   | 36     |
|                         |   |                                                                                               |   |   |   |   |   |   |
| Raffaella Leone              |   | Executive Assistant to        the CEO                                                              |   | 2005   |   | 7      |   | 49     |
|                              |   |                                                                                                    |   |        |   |        |   |        |

----

| (a) |    | Until        December 31, 2011. As of January 1, 2012, Umberto Vergine        has been appointed as Gas & Power Chief Operating        Officer.               |
|-----|--------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| (b) |    | Appointed as        Internal Audit Senior Executive Vice President with        effect from January 10, 2011 in the position before        managed by Rita Marino. |
| (c) |    | As of August        2, 2011.                                                                                                                                      |
| (d) |    | As of January        16, 2012.                                                                                                                                    |

The Chief Operating Officers, the Chief Financial Officer, theChief Corporate Operations Officer and the Senior Executive VicePresidents and the Chief Executive Officer of Polimeri Europa SpA7are permanent members of the Management Committee8,which advises and supports the CEO. Chief Operating Officers areappointed by the Board of Directors, upon proposal of the CEO inagreement with the Chairman. Other members of Eni’s seniormanagement are appointed by Eni’s CEO and may be removedwithout cause, except for the Senior Executive Vice President ofInternal Audit Department and the Company Secretary, who areappointed by the Board of Directors.

 

> 
*Senior Managers*

**Claudio Descalzi** Born in Milan in 1955. He graduated inphysics in 1979 at the University of Milan. He continued hisstudies with specialist courses in Petroleum Engineering inFrance and in the United States. He joined the Eni Group in 1981as oil-gas field petroleum engineering and project manager,following the development of North Sea, Libya, Nigeria, and Congofields. In 1990 he was appointed head of operational activitiesfor Italy. In 1994 he was named Director of Agip RecherchesCongo, with responsibility for all local upstream operations, andin 1998 become Vice Chairman & Managing Director of Naoc, anEni subsidiary in Nigeria. From 2000 to 2001 he was RegionalManager for Africa, Middle East and China at the Agip Division,where in 2002 he was appointed Country Manager for Italy. From2002 to 2005 he was Regional Manager for Italy, Africa, MiddleEast at the Eni Exploration & Production Division, and in2006 he has been named Deputy Chief Operating Officer of the EniExploration & Production Division. Since 2006 he has beenPresident of Assomineraria. He is Vice President of ConfindustriaEnergy. Since July 30, 2008 he has been Eni SpA Chief OperatingOfficer of the Exploration & Production Division.

----

| (7) |    | From January        2012.                                                                                           |
|-----|--------------|---------------------------------------------------------------------------------------------------------------------|
| (8) |    | Internal        Audit Senior Executive Vice President is not a permanent        member of the Management Committee. |

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**Domenico Dispenza** Born in Trieste in 1946. He has adegree in Aeronautical Engineering at the Politecnico of Milan.In 1973 he completed a Master’s degree in AdvancedTechnology at Sogesta in Urbino. From January 2006 to December2011 he was Chief Operating Officer of Eni’s Gas & PowerDivision. He started working in 1974 at the Study Department ofSnam SpA, in 1977 he became head of Systems Analysis and from1980 to 1991 he was Chief Negotiator for Gas Sales and PurchaseAgreement. From 1991 to 1999 he was Director of Gas Supplies. OnJune 30, 1999 he was appointed CEO of Snam SpA. From 2002 to 2004he was Deputy COO of Eni’s Gas & Power Division. OnApril 27, 2004 he was nominated Chairman and CEO of Snam ReteGas. Domenico Dispenza is currently: CEO of Blue Stream PipelineCo BV, Member of the Board of Eni Trading & Shipping SpA,Member of the Board of the Eni Foundation, Member of the Board ofUNI and Member of the Executive Committee of Eurogas. SinceJanuary 2012 he has been Chairman of Polimeri Europa SpA.

**Umberto Vergine** Born in Milan in 1957. He is aChartered Civil Engineer from Politecnico of Milano and joinedEni in 1984. Having started his career in Agip as PetroleumEngineer, he worked between 1985 and 1991 in Norway on theEkofisk field, in Angola in Cabinda and in Libya in Tripoli. Hebecame Production Manager of the Crema District in the North ofItaly. Between 1993 and 2001, he covered various leadingpositions overseas, managing different Eni E&P companies:District Manager of Agip UK in Aberdeen, District General Managerof Nigerian Agip Oil Co (NAOC) in Port Harcourt and GeneralManager of Petrobel Co in Egypt. In 2001 he was Managing Directorof Lasmo Venezuela in Caracas. At end 2002 he was appointedManaging Director of Ieoc in Cairo. Returned to Italy in 2004, heheld in the Eni E&P Division the following positions:Regional Vice President West Africa and Egypt; Senior VicePresident for North Sea, Americas, Russia, Far East and Pacific;Senior Vice President Technologies & Services and ExecutiveVice President for South Europe, Central Asia, Far East andPacific. In 2010 he was appointed Eni SpA Senior Executive VicePresident for Studies and Research. From January 2012 is ChiefOperating Officer of the Gas & Power Division. He ismember of the Board of Directors of Saipem SpA.

**Angelo Fanelli** Born in Rome in 1952. He has a degree inmechanical engineering at the University La Sapienza in Rome.After gaining experience at other companies, he joined the EniGroup 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. Since 2008 he hasbeen a member of the board of Europia in Brussels. On April 6,2010 he was appointed Chief Operating Officer of Eni SpA -Refining & Marketing.

**Alessandro Bernini** 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 the September 1, 1996 he joined the Eni Group inquality of Administration Department Manager for Saipem SpA. In2006 he was appointed Group Chief Financial Officer for SaipemSpA. He has covered executive managerial roles in many importantcompanies of the Saipem Group. From August 1, 2008 he is ChiefFinancial Officer of the Eni Group.

**Massimo Mantovani** Born in Milan in 1963. He has adegree in Law from Università Statale di Milano and a Master inLaw (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 SpAand is a member of the Watch Structure of Eni SpA. 

**Marco Petracchini** Born in Rome in 1964. He graduatedcum laude in economics at the University La Sapienza in 1989, inRome. After graduation, he was hired by Esso Italiana where heheld a number of positions in the IT, Finance and Auditingsectors. He joined Eni in 1999, where he was rapidly promoted inthe Internal Audit Department. Currently is Senior Executive VicePresident of the Internal Auditing Department and supervisor ofthe Internal Control function.. He is also a member of theControl Body and Secretary of the Internal Control Committee ofEni SpA. He holds international qualifications, including that ofCertified Internal Auditor (CIA), awarded by the Institute ofInternal Auditors with which he also gained an honorable mention,and Certified Fraud Examiner (CFE), awarded by the Association ofCertified Fraud Examiners.

**Salvatore Meli** Born in Torre del Greco in 1953. Afterearning his degree in Chemical Engineering, in 1980 he began hiscareer as a researcher, gradually taking on positions of greaterresponsibility up to 1992, when he became Head of AppliedResearch in Engineering at Eni Research. In 1998 he became Headof Research of Eni Technologies and managed the entire Departmentof Engineering, Modeling and Pilot Systems, a position heretained until 2003. 

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In January 2004 he was appointed Head of Planning Technologyand Development at Eni Corporate, and then, in August 2006, hetook the position of Director of Research and TechnologicalInnovation of the E&P Division, with the task of enhancingthe role of technological innovation as a leverage instrengthening the competitive position of E&P business. OnJanuary 1, 2008 he was appointed Head of Technologies inStrategic Management and Research at Eni Corporate, in charge ofmonitoring the development of technologies of interest toEni’s activities and for identifying developmentopportunities for new technologies and new energy sources. Inthis position, particular emphasis was placed on activitiesenhancing intellectual property through a significant increase inthe number and quality of patents filed. In June 2009, as part ofEni Corporate Management Studies and Research, he was appointedExecutive Vice President of Research & TechnologicalInnovation; since August 2011 he has been reporting directly tothe Chief Executive Officer under the aegis of the Research &Technological Innovation Department.

**Stefano Lucchini** Born in Rome in 1962. He is marriedwith two children and has a degree in Economics at the LUISSUniversity in Rome. His first job was in the research departmentat Montedison. After a period as assistant to the President ofthe Energy and Commerce Commission of the U.S. Congress inWashington D.C., he was director of communications at MontedisonUSA in New York. Returning to Italy in 1993, he was responsiblefor financial communications and investor relations for theGruppo Ferruzzi Montedison. He joined Enel in 1997, initially infinancial communications (where he oversaw the company’sIPO) and subsequently as the group’s head of externalrelations. He has also been the head of external relations forConfindustria, the Italian employers’ federation. In June2002 he was appointed head of external relations for the BancaIntesa Group. Since July 2005 he has been senior executive vicepresident of public affairs and corporate communication for theEni Group. He teaches at the Advanced School of Journalism at theCatholic University of Milan, for which he is also a member ofthe evaluation committee. He has been a member of the Board ofDirectors of AGI (the second Italian newswire company) since2005. He is Grand Officer of Merit of the Italian Republic andwas awarded the Silver Cross Medal by the Italian Red Cross.Since 2007 he has been a member of the supervisory Board ofConfindustria and the executive board of UPA. He is also a memberof the boards of Censis, the Fondazione Eni Enrico Mattei (FEEM)and the Eni Foundation. He is a Member of the Advisory Board MBAProgram LUISS and a Member of the Committee of Guarantors for thecelebrations of the 150th Anniversary of Italian Unification,member of the Board of Directors of the American Chamber ofCommerce in Italy, member of the Board of Directors ofUnindustria and member of the Energy Foundation. He is a visitingfellow of Oxford University and President of the Benedict XVI proMatrimonio et Familia Foundation.

**Salvatore Sardo** Born in 1952. Chief CorporateOperations Officer of Eni SpA since November 2008, reportingdirectly to the Chief Executive Officer and in charge of themanagement and control of Procurement, Human Resources andOrganization, Information & Communication Technology,Security, Compensation & Benefits systems, InternalCommunications and the subsidiary EniServizi. Since April 2009,he has also been the Chairman of Eni Corporate University andsince April 2010 Chairman of Snam Rete Gas (renamed Snam SpA asof January 1, 2012). Graduated in Economics at University ofTurin. From 1976 to 1981 at Coopers & Lybrand as auditor,rising the position of Supervisor. From 1981 at Stet, Head ofManagement Control for Manufacturing. In 1991 co-central Directorand, from 1992 to 1996, Central Director for Planning andControl. Nominated in 1997 Deputy General Manager forAdministration and Control at Telecom Italia. From 1998 to June2001, Chairman of Seat Pagine Gialle SpA. From 1999 OperationalManager of the Real Estate sector. Chairman of EMSA, Chairman andCEO of EMSA Servizi and Chairman and CEO of IMMSI, a listedcompany, as well as Operating Chairman of TELIMM, IMSER andTelemaco, companies operating in the same sector. From 2000 Headof the Real Estate and General Services business unit at TelecomItalia. From 2001 Director of the Real Estate and GeneralServices area reporting directly to the Chief Executive Officerof Telecom Italia. From 2003 Head of group Procurement, Servicesand Security of Enel SpA, reporting directly to the ChiefExecutive Officer and managing a procurement budget of over euro3 billion. From 2005 Senior Executive Vice President of HumanResources and Business Services of Eni, reporting to the ChiefExecutive Officer, while also in charge of the management andcontrol of Information & Communication Technology and thesubsidiary EniServizi.

**Roberto Ulissi** Born in Rome in 1962. Lawyer. After anumber of years spent as a lawyer at the Bank of Italy, in 1998he was appointed General Manager at the Ministry of the Economyand Finance, head of the "Banking and Financial System andLegal Affairs Department". He was a director of TelecomItalia, Ferrovie dello Stato, Alitalia, Fincantieri and agovernment representative on the Governing Council of the Bank ofItaly. He was also a member of numerous Italian and Europeancommissions representing the Ministry of the Economy, including,at a national level, the Commission for the Reform of CorporateLaw and, at EU level, the Financial Services Policy Group, theBanking Advisory Committee, the European Banking Committee, theEuropean Securities Committee, and the Financial ServicesCommittee. He was also special professor of banking law at theUniversity of Cassino. He is Grande Ufficiale of the ItalianRepublic. Since 2006 he has been Corporate Affairs and GovernanceSenior Executive Vice President at Eni and Company Secretary ofEni. He is also a director of Eni International BV.

**Marco Alverà**Graduated from the London School ofEconomics in 1997 in Philosophy and Economics. He is currently anAssociate Fellow at the Oxford University Centre for CorporateReputation, where he specializes in developing and teaching casestudies on doing business in Africa. He started his career atGoldman Sachs in London in 1997 in M&A and Private Equity. In2000 he co-founded Netesi, Italy’s first broadband ADSLcompany. From 2002 to 2005 he joined Enel as Head of GroupCorporate Strategy before becoming in 2004 Chief FinancialOfficer of Wind Telecom, overseeing the sale of Wind to Orascom.He joined Eni in 2005 as Assistant to the CEO for specialinitiatives. 

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In 2006 he was appointed Director of Supply & PortfolioDevelopment at Eni Gas & Power Division and Chief ExecutiveOfficer of Bluestream and Promgas. In 2008 he moved to EniExploration & Production Division where he was appointedExecutive Vice President for Russia, North Europe and Americas.In these countries he managed operations and led negotiationswith governments and other international oil companies. Since2010 he has been Chief Executive Officer of Eni trading andshipping, which manages all the commodity trading and shippingactivities for Eni. As of January 16, 2012 he is also SeniorExecutive Vice President of Eni Trading. He has served on theBoard of Gazprom Neft and is Chairman of the Board of Eni’sRussian subsidiaries.

**Raffaella Leone** In Eni since 2005, she is the ExecutiveAssistant to the CEO of Eni. She is President of Servizi AereiSpA, Vice President of Eni Foundation, member of the Board ofDirectors of the news agency AGI (Agenzia Giornalistica Italia)and of the Board of Directors of the Eni Enrico MatteiFoundation. Previously, she was the Executive Assistant to theCEOs of Enel (from May 2002 to 2005) and of Pilkington (from 1996to May 2002).

 

**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.

Main elements of the compensation of the Chairman, the CEO,other Board members and Eni’s three General Managers aredescribed below.

 

CHAIRMAN OF THE BOARD OF DIRECTORSThe Shareholders’ Meeting of May 5, 2011 set remuneration ofthe Chairman of the Board of Directors, envisaging a fixed grossannual compensation for the mandate equal to euro 265,000,unchanged with respect to the previous mandate. In addition, theShareholders’ Meeting resolved as for the other Directors,an annual bonus conditioned to a performance parameter measuredin terms of "Total Shareholders’ Return" (TSR)delivered by Eni, as benchmarked to that achieved by the otherseven largest international oil companies in terms of marketcapitalization (Exxon, Chevron, Conoco, Shell, British Petroleum,Total, and Statoil). The incentive is paid in the amount of euro80,000 or euro 40,000, unchanged with respect to the previousmandate, in case Eni ranks first or second, or third or fourth,respectively in a given year. Out of these cases, the bonus isnot paid. In 2011, 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 aperformance bonus based on the economic/financial and operationalperformance results achieved by Eni during the year prior to thatof the disbursement. On-target bonus is set at 60% of the fixedemolument; the maximum bonus is 78% of the fixed emolument. Theseobjectives, also in line with the framework envisaged for theChief Executive Officer, focus on the economic/financialperformance, and the operational/industrial performance of Eni,and on the implementation of the strategic and sustainabilityguidelines defined in the 2012-2015 four-year Plan.

*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 reserves itself the faculty to propose tothe Board the possible payment of an indemnity, upon completionof the mandate, in line with the amount of the compensationreceived and the achievement of performance that is particularlyimportant to Eni.

*Benefits*Forms of insurance related benefit are envisaged for theChairman.

 

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 with respect to the previousmandate. In addition, the Shareholders’ Meeting resolved anannual bonus conditioned to a performance parameter measured interms of "Total Shareholders’ Return" (TSR)delivered by Eni, as benchmarked to that achieved by the otherseven largest international oil companies in terms of marketcapitalization (Exxon, Chevron, Conoco, Shell, British Petroleum,Total, and Statoil). The incentive is paid in the amount of euro20,000 or euro 10,000, unchanged 

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with respect to the previous mandate, in case Eni ranks firstor second, or third or fourth, respectively in a given year. Outof these cases, the bonus is not paid. In 2011, the Company didnot meet the performance conditions to award the bonus.

| *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: |
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| • |   | for the Internal Control        Committee, compensation equal to euro 45,000 for the        Chairman and euro 35,000 for other members was envisaged,        as increased with respect to the previous mandate in        relation to the more significant role played by the        Committee in supervising company risk; |
|--------|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| • |   | for the Compensation        Committee and the Oil-Gas Energy Committee compensation        was confirmed, 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, it is not        envisaged any compensation.                                                                                                                                                                                               |

In the case of participation on more than one Committee (withthe exception of the Nominating Committee), it is envisaged areduction of compensation by 10%.

*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, in line with applicable provisions in therelevant national collective labor agreement for managers and inthe company additional agreements.

*Short-term variable incentives*The annual variable incentive plan envisages compensationdetermined in reference to a target incentive level (performance= 100) and maximum level (performance = 130), set at 110% and155% of the total fixed remuneration, respectively, in connectionto the economic/financial and operational performance resultsachieved by Eni during the previous year. These objectives arefocused on Eni’s economic/financial performance, itsoperational/industrial performance, and on the implementation ofthe strategic and sustainability guidelines defined in the2012-2015 four-year Plan.

The Company’s Compensation Committee has the faculty topropose extra compensation to the Chief Executive Officer andGeneral Manager in the case of achievement of strategictransactions or arrangements that strengthen the Company’scompetitive position over the medium-long term.

| *Long-term variable incentives*The long-term variable component consists of two        distinct plans: |
|--------------------------------------------------------------------------------------------------------|

| • |   | likewise other        Company’s manager, he is eligible to participate a        Deferred Monetary Incentive Plan that sets three annual        awards from 2012, in relation to the performance of the        Company, measured in terms of EBITDA which we believe to        be a parameter adopted by the oil&gas industry to        assess the industrial performance and in line with        Eni’s growth/consolidation strategy in each of its        business segments. The base incentive to be awarded is        determined in relation to the results achieved by the        Company in the year previous to the assignment for on        target and maximum amounts that are equal to 55% and        71.5% of total fixed remuneration, respectively. The        incentive is paid at the end of a three-year vesting        period in relation to the results achieved in each of the        three years after that of assignment as a percentage        between zero and 170% of the granted amount. EBITDA 2011        results for the purposes of 2012 award and 2012 EBITDA        results were determined by the Board of Directors on        March 15, 2012, based on a proposal from the Compensation        Committee, in line with the Strategic Plan. Should the        current office not be renewed, the payment of each        incentive awarded will occur at the natural expiry of the        relative vesting period, in accordance with the        performance conditions defined in the Plan; |
|--------|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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| • |   | he is eligible to        participate a Long-Term Monetary Incentive Plan that has        replaced the previous stock-option plan, with three        annual award from 2011. The target amount corresponds to        the valorization of the previous stock option plan, to be        carried out by an independent consultant, in accordance        with the methods and criteria established by the Board.        For 2012, the incentive to be paid at the end of a        three-year vesting period is determined as a percentage        between zero and 130% of the assigned value, 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 oil companies, based on        capitalization. The peer group consists of the following        companies: Exxon, Shell, British Petroleum, Chevron,        Conoco Phillips, and Total. |
|--------|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

Should the current office be terminated, the payment of eachincentive awarded will occur at the natural expiry of therelative vesting period, in accordance with the performanceconditions defined in the Plan. Studies regarding possiblechanges to the current Performance conditions of the Plan are incourse, in order to take into account the specific structure ofthe Eni business portfolio with respect to that of the peer groupin question.

| *Treatments established in the event        of termination of office or employment*For the Chief Executive Officer and General Manager,        in accordance with the practices of the reference market        and unchanged from the previous mandate, taking into        account also the acquired rights deriving from 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,        the following is envisaged: |
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| • |   | upon termination of the        employment relationship, in connection with the expiry or        early termination of the current mandate, it is        envisaged, as an addition to the severance pay due upon        termination of employment, and in lieu of any obligations        regarding prior notice, an indemnity defined in a fixed        component, in the amount of euro 3,200.00 and a variable        component calculated with reference to the value of the        annual monetary 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 other than as the result of 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 just the administrative role,        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 a 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 reserves itself the faculty topropose to the Board, upon the conclusion of the mandate, apossible increase to the amounts due upon termination of office,in the case that over the course of the three-year period resultsof notable size were obtained.

*Benefits*For the Chief Executive Officer and General Manager,unchanged from the previous mandate and the policy enacted in2011, insurance related benefit are envisaged and, in particular,in respect of that envisaged in the national collective laboragreement and the Company additional agreement for Eni seniormanagers, enrolment in the complementary retirement fund(FOPDIRE) as well as in the additional health service fund(FISDE) is envisaged, together with the use of a company car.

 

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 nationalcompanies for roles of a similar level of responsibility andcomplexity and that may be updated periodically, in the contextof the annual salary review process that involves all managerialstaff. The Guidelines for 2012, in consideration of the referencecontext and current market trends, envisage selective criteria,while in any case maintaining appropriate levels forcompetitiveness and motivation. In particular, the actionsproposed regard: (i) interventions to update the fixed amountaimed at holders of roles that increased their area ofresponsibility or with positioning below the average of thereference market; and (ii) one-time extraordinary interventionsconnected to achieving results or projects or particularimportance during the year.

In addition, like all other Senior Managers("Dirigenti"), the Chief Operating Officers ofDivisions and other Managers with Strategic Responsibilities arealso entitled to receive the indemnities due for travel, both inItaly and abroad, in line with that envisaged in the relevantnational collective labor contract for senior managers andadditional company agreements.

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*Short-term variable incentives*The annual variable incentive plan envisages compensationdetermined with reference to the Eni, business area, andindividual performance results, based on a scale of 70÷130 witha target incentive level (performance = 100) differentiated basedon the role held up to a maximum equal to 60% of the fixedremuneration.

The objectives of each business area, determined on the basisof those assigned to the Chief Executive Officer and GeneralManagers, are aimed at economic/financial, operational andindustrial performance, on internal efficiency, and issues ofsustainability. With regards to Managers with strategicresponsibilities, the variable incentive is connected to theCompany results and a series of individual objectives assigned inrelation to the area of responsibility for the role held, in linewith that envisaged in the Company’s performance 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) with three annual awards, starting in 2012, in        relation to the performance of the Company measured in        terms of EBITDA. The said Plan maintains the same        performance conditions and characteristics as described        above for the Plan of the Chief Executive Officer and        General Manager. For Chief Operating Officers and other        Managers with Strategic Responsibilities the base        incentive to be assigned at target level is        differentiated by the grade of the role up to a maximum        equal to 40% of the fixed remuneration. The incentive to        be paid at the end of the three-year period in question        is determined as a percentage between zero and 170% of        the value awarded, in relation to the results achieved.                                                                                                                                                                          |
|--------|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| • |   | Long-Term Monetary Incentive        Plan (LTMI), envisaged for critical managerial staff.        This Plan maintains 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 base incentive to be awarded at        target level is differentiated by the grade of the role        up to a maximum equal to 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 between        zero and 130% of the value awarded, in relation to the        results achieved. Studies regarding possible changes to        the current Performance conditions of the Plan are in        course, in order to take into account the specific        structure of the Eni business portfolio with respect to        that of the peer group in question. |

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 ofvoluntary resignation or early retirement and/or specificcompensation for cases in which it is necessary to stipulatenon-competition agreements.

*Benefits*For the Chief Operating Officers and other Managers withstrategic responsibilities, unchanged from the policy enacted in2011, insurance related benefit are envisaged and, in particular,in respect of that envisaged in the national collective laboragreement and the Company additional agreement for Enimanagement, enrolment in the complementary retirement fund(FOPDIRE) as well as in the additional health service fund(FISDE) is envisaged, together with the use of a company car.

 

MARKET REFERENCES AND PAY MIXThe remuneration benchmarks used for the various types of roles,are indicated as follows: (i) for the Chairman and non-executiveDirectors, references relative to similar roles in the largestnational listed companies for capitalization; (ii) for the ChiefExecutive Officer and General Manager, benchmarks relative tosimilar roles in national and European largest listed companiesfor capitalization and in the main international companies in theOil sector; and (iii) for Chief Operating Officers of Divisionsand Managers with strategic responsibilities, benchmarks relativeto roles with the same level of responsibility and managerialcomplexity at large national industrial companies.

The 2012 remuneration policy guidelines lead to a remunerationmix in line with the managerial role held, with greater weight onthe variable component, in particular long-term, for rolescharacterized by greater impact on company results, calculatedtaking into consideration the valorization of short and long-termincentives in the hypothesis of on-target results.

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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 2011 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 2011.

| (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 |   | Fair Value of equity        remuneration (**) |   | Severance indemnity for end        of office or termination of employment |
|------|-------|--------|--------|--------|----------------|--------|-------------------|--------|--------------------|--------|------------------------------------------|--------|---------------------------------------------|--------|----------------|--------|-----------------------|--------|--------------------|--------|-------|--------|-----------------------------------------------|--------|---------------------------------------------------------------------------|
|      |       |   |        |   |                |   |                   |   |                    |   |                                          |   |                                             |   |                |   |                       |   |                    |   |       |   |                                               |   |                                                                           |

| Roberto Poli              | (1)  |   | Chairman                |   | 01.01 -        05.05 |   | 05.2011 |   | 262   |  (a) |   |   |      |   | 375    |      |   |   |   |   |   |   |   |   | 637   |   |   |   | 1,000  |  (b) |
|---------------------------|------|--------|-------------------------|--------|----------------------|--------|---------|--------|-------|-----------|--------|--------|-----------|--------|--------|-----------|--------|--------|--------|--------|--------|--------|--------|--------|-------|--------|--------|--------|--------|-----------|
| Giuseppe        Recchi    | (2)  |   | Chairman                |   | 05.06 - 12.31        |   | 04.2014 |   | 500   |  (a) |   |   |      |   |   |      |   |   |   |   |   |   |   |   | 500   |   |   |   |   |      |
| Paolo Scaroni             | (3)  |   | CEO and General Manager |   | 01.01 -        12.31 |   | 04.2014 |   | 1,430 |  (a) |   |   |      |   | 3,439  |  (b) |   |   |   | 15     |   |   |   |   | 4,884 |   | 175    |   | 1,000  |  (c) |
| Alberto        Clô   | (4)  |   | Director                |   | 01.01 - 05.05        |   | 05.2011 |   | 40    |  (a) |   | 16     |  (b) |   |   |      |   |   |   |   |   |   |   |   | 56    |   |   |   |   |      |
| Paolo Andrea Colombo      | (5)  |   | Director                |   | 01.01 -        05.05 |   | 05.2011 |   | 40    |  (a) |   | 13     |  (b) |   |   |      |   |   |   |   |   |   |   |   | 53    |   |   |   |   |      |
| Carlo        Cesare Gatto | (6)  |   | Director                |   | 05.06 - 12.31        |   | 04.2014 |   | 75    |  (a) |   | 32     |  (b) |   |   |      |   |   |   |   |   |   |   |   | 107   |   |   |   |   |      |
| Alessandro Lorenzi        | (7)  |   | Director                |   | 05.06 -        12.31 |   | 04.2014 |   | 75    |  (a) |   | 38     |  (b) |   |   |      |   |   |   |   |   |   |   |   | 113   |   |   |   |   |      |
| Paolo        Marchioni    | (8)  |   | Director                |   | 01.01 - 12.31        |   | 04.2014 |   | 115   |  (a) |   | 39     |  (b) |   |   |      |   |   |   |   |   |   |   |   | 154   |   |   |   |   |      |
| Roberto Petri             | (9)  |   | Director                |   | 05.06 -        12.31 |   | 04.2014 |   | 75    |  (a) |   | 24     |  (b) |   |   |      |   |   |   |   |   |   |   |   | 99    |   |   |   |   |      |
| Alessandro        Profumo | (10) |   | Director                |   | 05.06 - 12.31        |   | 04.2014 |   | 75    |  (a) |   | 29     |  (b) |   |   |      |   |   |   |   |   |   |   |   | 104   |   |   |   |   |      |
| Marco Reboa               | (11) |   | Director                |   | 01.01 -        05.05 |   | 05.2011 |   | 40    |  (a) |   | 16     |  (b) |   |   |      |   |   |   |   |   |   |   |   | 56    |   |   |   |   |      |
| Mario Resca               | (12) |   | Director                |   | 01.01 - 12.31        |   | 04.2014 |   | 115   |  (a) |   | 45     |  (b) |   |   |      |   |   |   |   |   |   |   |   | 160   |   |   |   |   |      |
| Pierluigi Scibetta        | (13) |   | Director                |   | 01.01 -        05.05 |   | 05.2011 |   | 40    |  (a) |   | 13     |  (b) |   |   |      |   |   |   |   |   |   |   |   | 53    |   |   |   |   |      |
| Francesco        Taranto  | (14) |   | Director                |   | 01.01 - 12.31        |   | 04.2014 |   | 115   |  (a) |   | 45     |  (b) |   |   |      |   |   |   |   |   |   |   |   | 160   |   |   |   |   |      |
|                           |      |   |                         |   |                      |   |         |   |       |           |   |        |           |   |        |           |   |        |   |        |   |        |        |   |       |   |        |   |        |           |

| **Board of Statutory********Auditors** |
|----------------------------------------|

| Ugo Marinelli           | (15) |   | Chairman |   | 01.01 -        12.31 |   | 04.2014 |   | 115    |  (a) |   |   |   |   |   |   |   |   |   |   |   |   |   |   | 115    |   |   |   |   |   |
|-------------------------|------|--------|----------|--------|----------------------|--------|---------|--------|--------|-----------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|
| Roberto        Ferranti | (16) |   | Auditor  |   | 01.01 - 12.31        |   | 04.2014 |   | 80     |  (a) |   |   |   |   |   |   |   |   |   |   |   |   |   |   | 80     |   |   |   |   |   |
| Paolo Fumagalli         | (17) |   | Auditor  |   | 05.06 -        12.31 |   | 04.2014 |   | 52     |  (a) |   |   |   |   |   |   |   |   |   |   |   |   |   |   | 52     |   |   |   |   |   |
| Luigi        Mandolesi  | (18) |   | Auditor  |   | 01.01 - 05.05        |   | 05.2011 |   | 28     |  (a) |   |   |   |   |   |   |   |   |   |   |   |   |   |   | 28     |   |   |   |   |   |
| Tiziano Onesti          | (19) |   | Auditor  |   | 01.01 -        05.05 |   | 05.2011 |   |   |      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |

| *Remuneration in the        company preparing the financial statements* |   | 28     |  (a) |   |   |   |   |   |   |   |   |   |   |   | 46 |  (b) |   | 74 |   |   |   |   |   |
|-------------------------------------------------------------------------|--------|--------|-----------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|----|-----------|--------|----|--------|--------|--------|--------|--------|
| *Remuneration        from subsidiaries and associates*                  |   |   |      |   |   |   |   |   |   |   |   |   |   |   | 39 |  (c) |   | 39 |   |   |   |   |   |

|                 |   |   |    |   |                 |   | Total   |   | 28 |      |   |   |   |   |   |   |   |   |   |   |   | 85     |   |   | 113 |   |   |   |   |   |
|----------------------|--------|--------|---------|--------|----------------------|--------|---------|--------|----|-----------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|-----|--------|--------|--------|--------|--------|
| Renato Righetti      | (20)   |   | Auditor |   | 06.05 -        12.31 |   | 04.2014 |   | 52 |  (a) |   |   |   |   |   |   |   |   |   |   |   |   |   |   | 52  |   |   |   |   |   |
| Giorgio        Silva | (21)   |   | Auditor |   | 01.01 - 12.31        |   | 04.2014 |   | 80 |  (a) |   |   |   |   |   |   |   |   |   |   |   |   |   |   | 80  |   |   |   |   |   |
|                      |        |   |         |   |                      |   |         |   |    |           |   |        |        |   |        |        |   |        |   |        |   |        |        |   |     |   |        |   |        |        |

| **Chief Operating        Officers** |
|-------------------------------------|

| Claudio Descalzi | (22) |   | E&P Division |   | 01.01 -        12.31 |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|------------------|------|--------|------------------|--------|----------------------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|

| *Remuneration in the        company preparing the financial statements* |   | 754    |  (a) |   |   |   |   | 1,167  |  (b) |   |   |   | 15     |   |   |      |   | 1,936 |   | 24     |   |   |   |
|-------------------------------------------------------------------------|--------|--------|-----------|--------|--------|--------|--------|--------|-----------|--------|--------|--------|--------|--------|--------|-----------|--------|-------|--------|--------|--------|--------|--------|
| *Remuneration        from subsidiaries and associates*                  |   |   |      |   |   |   |   |   |      |   |   |   |   |   | 595    |  (c) |   | 595   |   |   |   |   |   |

|                                                           |   |   |                    |   |                 |   | Total  |   | 754       |      |   |    |   |   | 1,167      |      |   |   |   | 15      |   | 595     |      |   | 2,531      |   | 24      |   |      |      |
|----------------------------------------------------------------|--------|--------|-------------------------|--------|----------------------|--------|--------|--------|-----------|-----------|--------|---------|--------|--------|------------|-----------|--------|--------|--------|---------|--------|---------|-----------|--------|------------|--------|---------|--------|-----------|-----------|
| Domenico Dispenza                                              | (23)   |   | G&P Division        |   | 01.01 -        12.31 |   |   |   | 740       |  (a) |   |    |   |   | 1,339      |  (b) |   |   |   | 13      |   |    |      |   | 2,092      |   | 41      |   | 2,844     |  (c) |
| Angelo        Fanelli                                          | (24)   |   | R&M        Division |   | 01.01 - 12.31        |   |   |   | 541       |  (a) |   |    |   |   | 504        |  (b) |   |   |   | 14      |   |    |      |   | 1,059      |   | 14      |   |      |      |
|                                                                |        |   |                         |   |                      |   |        |   |           |           |   |         |        |   |            |           |   |        |   |         |   |         |           |   |            |   |         |   |           |           |
| **Other Managers with strategic        responsibilities**(***) | (25)   |   |                    |   |                 |   |   |   | 3,910     |  (a) |   |    |   |   | 4,988      |  (b) |   |   |   | 96      |   | 120     |  (c) |   | 9,114      |   | 166     |   |      |      |
|                                                           |   |   |                    |   |                 |   |   |   | **9,377** |      |   | **310** |   |   | **11,812** |      |   |   |   | **153** |   | **800** |      |   | **22,452** |   | **420** |   | **4,844** |      |
|                                                                |        |   |                         |   |                      |   |        |   |           |           |   |         |        |   |            |           |   |        |   |         |   |         |           |   |            |   |         |   |           |           |

| Notes |
|-------|

| (*)   | i            | For directors        appointed by the Shareholders’ Meeting of May 5,        2011, the term of office expires with the        Shareholders’ Meeting approving the financial        statements for the year ending December 31, 2013.                                    |
|-------|--------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| (**)  | iat          | This refers        to the 2011 pro-rata value (from January 1 to July 30) of        the granting of the 2008 stock option plan in accordance        with the breakdown provided for by the accounting        standards.                                                           |
| (***) |    | Managers who,        during the course of the year and with the Chief        Executive Officer and Chief Operating Officers, were        permanent members of the Management Committee and those        who report directly to the Chief Executive Officer (ten        managers). |

| 149 |
|-----|

----

##### Table of Contents

| (1)                            |                | **Roberto        Poli - Chairman of the Board of Directors**                                                                                                                                                                                                                                                                                    |
|--------------------------------|--------------------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|                      |                | (a) The        amount includes the pro-rata up to May 5, 2011 of the        fixed remuneration established by the Shareholders’        Meeting of June 10, 2008 (euro 91 thousand) and of the        fixed remuneration for the powers granted by the Board of        Directors on July 31, 2008 (euro 171 thousand),        respectively. |
|       |      | (b) Amount        approved by the Board of Directors on April 27, 2011,        related to the significant professional contribution made        in the achievement of Company objectives during the nine        years as Chairman of the Company.                                                                                               |
| (2)                            |                | **Giuseppe        Recchi - Chairman of the Board of Directors**                                                                                                                                                                                                                                                                                 |
|                      |                | (a) The        amount includes the pro-rata from May 6, 2011 of the        fixed remuneration established by the Shareholders’        Meeting of May 5, 2011 (euro 174 thousand) and of the        fixed remuneration for the powers granted by the Board of        Directors on June 1, 2011 (euro 326 thousand),        respectively.    |

| (3)                      |    | **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 of the Company. To this amount are added the        indemnities owed for the travel done, in Italy and        abroad, in line with the provisions of the relevant        national collective labor agreement for managers and the        Company’s additional agreements, and other        remuneration related to the employment relationship for        the 2008-2011 three-year period, for a total amount of        euro 651 thousand. |
|      |    | (b) The        amount includes the payment of euro 1,329 thousand        relating to the deferred monetary incentive granted in        2008.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |
|      |         | (c) Amount        approved by the Board of Directors on April 27, 2011, in        relation to the significant professional contribution        made in the achievement of Company objectives, which        payment is deferred to the conclusion of the 2011-2014        mandate. To this amount is added the payment for the end        of the 2008-2011 mandate, paid in 2011, to guarantee, in        relation to the fixed remuneration and to the 50% of the        maximum variable remuneration received during the period        for just the administrative role, a social security        contribution and a severance pay equal to the amount paid        by Eni for the management employment relationship (euro        857 thousand).                                   |
| (4)                      |    | **Alberto        Clô - Director**                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |
|      |    | (a) Pro-rata        amount until May 5, 2011 of the fixed remuneration set by        the Shareholders’ Meeting.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |
|                |    | (b) The        amount includes the pro-rata up to May 5, 2011, euro 6.3        thousand for the participation in the Compensation        Committee, and euro 9.4 thousand for the Oil-Gas Energy        Committee, respectively.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |
| (5)                      |    | **Paolo        Andrea Colombo - Director**                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |
|      |    | (a) Pro-rata        amount until May 5, 2011 of the fixed remuneration set by        the Shareholders’ Meeting.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |
|      |    | (b) The        amount includes the pro-rata up to May 5, 2011, euro 6.3        thousand for participation in the Compensation Committee,        and euro 6.3 thousand for the Oil-Gas Energy Committee,        respectively.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |
| (6)                      |    | **Carlo        Cesare Gatto - Director**                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |
|                |    | (a) Pro-rata        amount from May 6, 2011 of the fixed remuneration set by        the Shareholders’ Meeting.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |
|                |    | (b) The        amount includes the pro-rata from May 6, 2011, euro 20.6        thousand for participation in the Internal Control        Committee, and euro 11.8 thousand for the Compensation        Committee, respectively.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |
| (7)                      |    | **Alessandro        Lorenzi - Director**                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |
|                |    | (a) Pro-rata        amount from May 6, 2011 of the fixed remuneration set by        the Shareholders’ Meeting.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |
|                |    | (b) The        amount includes the pro-rata from May 6, 2011, euro 26.4        thousand for participation in the Internal Control        Committee, and euro 11.8 thousand for the Oil-Gas Energy        Committee, respectively.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |
| (8)                      |    | **Paolo        Marchioni - Director**                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |
|                |    | (a) The        amount corresponds to the fixed annual remuneration which        was not changed by the Shareholders’ Meeting of May        5, 2011.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |
|                |    | (b) The        amount includes euro 27.5 thousand for participation in        the Internal Control Committee, and euro 11.8 thousand        for the Oil-Gas Energy Committee (pro-rata from May 6,        2011).                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |
| (9)                      |    | **Roberto        Petri - Director**                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |
|                |    | (a) Pro-rata        amount from May 6, 2011 of the fixed remuneration set by        the Shareholders’ Meeting.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |
|                |    | (b) The        amount includes the pro-rata from May 6, 2011, euro 11.8        thousand for participation in the Compensation Committee,        and euro 11.8 thousand for the Oil-Gas Energy Committee,        respectively.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |
| (10)                     |    | **Alessandro        Profumo - Director**                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |
|                |    | (a) Pro-rata        amount from May 6, 2011 of the fixed remuneration set by        the Shareholders’ Meeting.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |
|                |    | (b) The        amount includes the pro-rata from May 6, 2011, euro 11.8        thousand for participation in the Compensation Committee,        and euro 17.6 thousand for the Oil-Gas Energy Committee,        respectively.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |
| (11)                     |    | **Marco        Reboa - Director**                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |
|                |    | (a) Pro-rata        amount until May 5, 2011 of the fixed remuneration set by        the Shareholders’ Meeting.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |
|                |    | (b) The        amount includes the pro-rata until May 5, 2011, euro 9.4        thousand for participation in the Internal Control        Committee, and euro 6.3 thousand for the Oil-Gas Energy        Committee, respectively.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |
| (12)                     |    | **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.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |
| (13)                     |    | **Pierluigi        Scibetta - Director**                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |
|                |    | (a) Pro-rata        amount until May 5, 2011 of the fixed remuneration set by        the Shareholders’ Meeting.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |
|                |    | (b) The        amount includes the pro-rata until May 5, 2011, euro 6.3        thousand for participation on the Internal Control        Committee, and euro 6.3 thousand for the Oil-Gas Energy        Committee, respectively.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |
| (14)                     |    | **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 26.8 thousand for participation in        the Internal Control Committee, euro 6.3 thousand for the        Compensation Committee (pro-rata until May 5, 2011), and        euro 11.8 thousand for the Oil-Gas Energy Committee        (pro-rata from May 6, 2011).                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |
| (15)                     |    | **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.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |
| (16)                     |    | **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.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |
| (17)                     |    | **Paolo        Fumagalli - Auditor**                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |
|                |    | (a) Pro-rata        amount from May 6, 2011 of the fixed remuneration set by        the Shareholders’ Meeting.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |
| (18)                     |    | **Luigi        Mandolesi - Auditor**                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |
|                |    | (a) Pro-rata        amount until May 5, 2011 of the fixed remuneration set by        the Shareholders’ Meeting.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |
| (19)                     |    | **Tiziano        Onesti - Auditor**                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |
|                |    | (a) Pro-rata        amount until May 5, 2011 of the fixed remuneration set by        the Shareholders’ Meeting.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |
|                |    | (b) Amount        relative to annual remuneration of euro 75 thousand as an        external member of the Watch Structure established        pursuant to Company’s Model 231 starting on the date        the role was assigned (May 19, 2011).                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |
|                |    | (c) Amount        relative to annual remuneration for the service as        Chairman of the Board of Statutory Auditors of AGI (euro        19.5 thousand) and Servizi Aerei (euro 19.5 thousand).                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |
| (20)                     |    | **Renato        Righetti - Auditor**                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |
|                |    | (a) Pro-rata        amount from May 6, 2011 of the fixed remuneration set by        the Shareholders’ Meeting.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |
| (21)                     |    | **Giorgio        Silva - Auditor**                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |
|                |    | (a) The        amount corresponds with the fixed annual remuneration        which was not changed by the Shareholders’ Meeting        of May 5, 2011.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |
| (22)                     |    | **Claudio        Descalzi - Chief Operating Officer E&P Division**                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |
|                |    | (a) To the        amount of euro 754 thousand as Gross Annual Salary are        added the indemnities owed for the travel done, in Italy        and abroad, in line with the provisions of the relevant        national collective labor agreement for managers and the        Company’s additional agreements, for a total amount        of euro 309 thousand.                                                                                                                                                                                                                                                                                                                                                                                                                 |
|                |    | (b) The        amount includes the payment of euro 280 thousand relating        to the deferred monetary incentive granted in 2008.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |
|                |    | (c) Amount        related to the remuneration for the position as Chairman        of Eni UK.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |
| (23)                     |    | **Domenico        Dispenza - Chief Operating Officer G&P Division**                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |
|                |    | (a) To the        amount of euro 740 thousand as Gross Annual Salary are        added the indemnities owed for the travel done, in Italy        and abroad, in line with the provisions of the relevant        national collective labor agreement for managers and the        Company’s additional agreements, for a total amount        of euro 8 thousand.                                                                                                                                                                                                                                                                                                                                                                                                                   |
|                |    | (b) The        amount includes payment of euro 501 thousand relating to        the deferred monetary incentive granted in 2008 and the        pro-rata amounts from the Deferred Monetary Incentive        Plans of 2009 and 2010 paid following the termination in        relation to the vesting period in accordance with that        defined in the respective Regulations.                                                                                                                                                                                                                                                                                                                                                                                                      |
|                |    | (c) The        amount includes the severance pay owed to him under the        applicable law and collective contract and severance        incentive paid related to the termination of the        employment relationship.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |
| (24)                     |    | **Angelo        Fanelli - Chief Operating Officer R&M Division**                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |
|                |    | (a) To the        amount of euro 541 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 managers        and by the Company’s additional agreements, for a        total amount of euro 2 thousand.                                                                                                                                                                                                                                                                                                                                                                                                           |
|                |    | (b) The        amount includes the payment of euro 159 thousand relating        to the deferred monetary incentive granted in 2008.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |
| (25)                     |    | **Other        Managers with strategic responsibilities**                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |
|                |    | (a) To the        amount of euro 3,910 thousand as Gross Annual Salary are        added the indemnities owed for the travel done, in Italy        and abroad, in line with the provisions of the relevant        national collective labor agreement for managers and the        company’s additional agreements, for a total amount        of euro 290 thousand.                                                                                                                                                                                                                                                                                                                                                                                                               |
|                |    | (b) The        amount includes the payment of euro 1,751 thousand        relating to the deferred monetary incentives granted in        2008.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |
|                |    | (c) Related        to the roles held by Managers with strategic        responsibilities in the Watch Structure established        pursuant to the Company’s Model 231 and the role of        Manager responsible for the preparation of the        Company’s financial statements.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |

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| 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        lump-sum expense reimbursements and 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 “Committees        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 the vesting of the relative rights 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        “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;                                                                                                                                                                                                                                                                                                                                                                           |
| • |   | 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.                                                                                                                                                                                                                                                                                                                                                      |

 

> 
***2011 Performance bonuses of the CEO and other top    managers***

*Short-term variable incentives*The incentive for the 2011 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 2010 in accordance with theStrategic Plan and the annual budget, in terms of: (i)implementation of strategic guidelines, taking into account theevaluation expressed by the Compensation Committee; (ii)operations and industrial performance of the Divisions; (iii)business profitability; and (iv) reduction of costs. With regardsto the Chief Operating Officers of the Divisions, the incentivewas disbursed on the basis of the economic and operationalperformance obtained in their respective business sectors,including evaluation of the achievement of specificsustainability objectives. With regards to other Managers withstrategic responsibilities, the variable incentive disbursed in2011 was connected to Company results and a series of individualobjectives assigned in relation to the area of responsibility forthe role held, in line with that envisaged in the Eni 2010performance Plan.

| Eni’s results for the 2010 period,        evaluated using a constant scenario approved by the Board        at the meeting of March 10, 2011, after a proposal by the        Compensation Committee, led to the determination of a        performance score of 125 points on the measurement scale        used, which envisages a target and maximum performance        level, at 100 and 130 points, respectively. For the        purposes of the variable remuneration to be disbursed,        the performance score established determines: |
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| • |   | for the outgoing Chairman,        the disbursement of a bonus equal to 75% of the fixed        remuneration, taking into account the target (60%) and        maximum (78%) incentive levels assigned;                                                                                                     |
|--------|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| • |   | for the Chief Executive        Officer, the disbursement of a bonus equal to 147.5% of        the fixed remuneration, taking into account the target        (110%) and maximum (155%) incentive levels assigned;                                                                                          |
| • |   | for the Chief Operating        Officers of Divisions and Managers with strategic        responsibilities, the disbursement 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 on March 10, 2011, the Board of Directors,following the review and proposal of the Compensation Committee,determined achievement of a 2010 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 2011 base incentive in the amount of euro 786,500 (55% of thefixed remuneration). For Chief Operating Officers and otherManagers with Strategic Responsibilities, the incentive amountsdefined as "target" were assigned, differentiated bythe level of the role up to a maximum equal to 40% of the fixedremuneration.

In addition, in 2011 the deferred monetary incentive assignedin 2008 to the Chief Executive Officer and Chief OperatingOfficer, to the Chief Operating Officers of the Divisions, and toother Managers with strategic 

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responsibilities reached maturity. At its meeting of March 10,2011, the Board of Directors, on the basis of Eni’s EBITDAresults during the 2008-2010 period, approved, based on aproposal from the Compensation Committee, the multiplier to beapplied to the base incentive assigned for the purposes ofcalculating the amount to be disbursed, in the amount of 130%, onthe incentive scale 0÷170%.

Specifically, an incentive equal to euro 1,329,250 wasdisbursed to the Chief Executive Officer (equal to 130% of thebase incentive of euro 1,022,500 assigned in 2008).

*Long-Term Monetary Incentive Plan*At its meeting of October 27, 2011, for the Chief ExecutiveOfficer and Chief Operating Officer General Manager, the Board ofDirectors, in accordance with the verification and proposal ofthe Compensation Committee, approved the assignment of the 2011base incentive from the Long-Term Monetary Incentive Planenvisaged in the Board resolution of June 1, 2011, replacing theprevious stock option plan, which was not implemented after 2009.The incentive assigned was defined at euro 2,447,102, inaccordance with the criteria and the methods of valorizationapproved by the Board itself and with the assistance ofspecialized external providers.

For Chief Operating Officers and other Managers with StrategicResponsibilities, the amounts were determined in accordance withthe target incentive level, differentiated by the level of therole up to a maximum equal to 50% of the fixed remuneration.

The table below indicates, by name, the variable incentives ofa monetary nature, both short and long-term, envisaged for theChief Executive Officer and General Manager, the Chief OperatingOfficers of the Divisions and, at an aggregate level, for otherManagers with strategic responsibilities (including all thoseindividuals who, during the course of the period, filled saidroles, even if for only a fraction of the year).

| In particular: |
|----------------|

| • |   | the column “Bonuses of the year         - paid/payable” includes the short-term        variable incentive disbursed 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" includes the amount of the base        incentive awarded during the year in implementation of        the long-term monetary incentive plans;                                                                                                                                                                                                      |
| • |   | the column “Bonuses of        the year - Deferral period” indicates the duration        of the vesting period for the long-term incentives        granted during the year;                                                                                                                                                                                                                            |
| • |   | the column “Bonuses of        previous years - no longer payable” indicates the        long-term incentives no longer distributable in relation        to the verification of the performance conditions for the        vesting period, or the incentives that expired due to        events pertaining to the employment relationships        governed by the Regulations of the Plans;               |
| • |   | the column “Bonuses of        previous years - paid/payable” indicates the        long-term incentives disbursed 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 governed by the Regulations of        the Plans; |
| • |   | the column “Bonuses of        previous years - still deferred” includes incentives        awarded in previous years, in implementation of long-term        Plans, which have not yet vested.                                                                                                                                                                                                          |
| • |   | 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 -paid/payable”, “Bonuses of previous years -paid/payable” and “Other bonuses” is the same asthat indicated in the column “Bonuses and otherincentives” in the Compensation table.

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| (euro        thousand) |   |   |   |   |   | **Bonuses of the year** |   | **Bonuses of previous        years** |   |   |
|------------------------|--------|--------|--------|--------|--------|-------------------------|--------|--------------------------------------|--------|--------|
|                   |   |   |   |   |   |                         |   |                                      |   |   |

| **Name** |   | **Office** |   | **Plan** |   | **paid/ payable** |   | **deferred** |   | **deferral period** |   | **no longer payable** |   | **paid/ payable******(1) |   | **still deferred** |   | **Other bonuses** |
|----------|--------|------------|--------|----------|--------|-------------------|--------|--------------|--------|---------------------|--------|-----------------------|--------|--------------------------|--------|--------------------|--------|-------------------|
|          |   |            |   |          |   |                   |   |              |   |                     |   |                       |   |                          |   |                    |   |                   |

| Roberto Poli             |   | Chairman                                                |   | Annual Monetary Incentive Plan 2011 BoD March        10, 2011                                                       |   | 375       |   |      |   |       |   |    |      |   |      |      |   |      |   |    |
|--------------------------|--------|---------------------------------------------------------|--------|---------------------------------------------------------------------------------------------------------------------|--------|-----------|--------|-----------|--------|------------|--------|---------|-----------|--------|-----------|-----------|--------|-----------|--------|---------|
| **Total**                |   |                                                    |   |                                                                                                                |   | 375       |   |      |   |       |   |    |      |   |      |      |   |      |   |    |
| Paolo Scaroni            |   | CEO and         General Manager                         |   | Annual Monetary Incentive Plan 2011 BoD March        10, 2011                                                       |   | 2,110     |   |      |   |       |   |    |      |   |      |      |   |      |   |    |
|                     |   |                                                    |   | Deferred        Monetary Incentive Plan 2011 BoD March 10, 2011                                                     |   |      |   | 787       |   | three-year |   |    |      |   |      |      |   |      |   |    |
|                     |   |                                                    |   | Long-Term Monetary Incentive Plan 2011 BoD        October 27, 2011                                                  |   |      |   | 2,447     |   | three-year |   |    |      |   |      |      |   |      |   |    |
|                     |   |                                                    |   | 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 BoD July 30, 2009                                                      |   |      |   |      |   |       |   |    |      |   |      |      |   | 787       |   |    |
|                     |   |                                                    |   | Long-Term Monetary Incentive Plan 2009 BoD        November 18, 2009                                                 |   |      |   |      |   |       |   |    |      |   |      |      |   | 2,716     |   |    |
|                     |   |                                                    |   | Deferred        Monetary Incentive Plan 2008 Assignment: BoD March 14,        2008 Disbursement: BoD March 10, 2011 |   |      |   |      |   |       |   |    |      |   | 1,329     |      |   |      |   |    |
| **Total**                |   |                                                    |   |                                                                                                                |   | **2,110** |   | **3,234** |   |       |   |    |      |   | **1,329** |      |   | **6,791** |   |    |
| Claudio        Descalzi  |   | Chief        Operating Officer         E&P Division |   | Annual        Monetary Incentive Plan 2011                                                                          |   | 537       |   |      |   |       |   |    |      |   |      |      |   |      |   |    |
|                     |   |                                                    |   | Deferred Monetary Incentive Plan 2011 BoD March        10, 2011                                                     |   |      |   | 309       |   | three-year |   |    |      |   |      |      |   |      |   |    |
|                     |   |                                                    |   | Long-Term        Monetary Incentive Plan 2011 BoD October 27, 2011                                                  |   |      |   | 363       |   | three-year |   |    |      |   |      |      |   |      |   |    |
|                     |   |                                                    |   | 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 BoD July        30, 2009                                                      |   |      |   |      |   |       |   |    |      |   |      |      |   | 340       |   |    |
|                     |   |                                                    |   | Deferred        Monetary Incentive Plan 2008 Assignment: BoD March 14,        2008 Disbursement: BoD March 10, 2011 |   |      |   |      |   |       |   |    |      |   | 280       |      |   |      |   |    |
| **Total**                |   |                                                    |   |                                                                                                                |   | **537**   |   | **672**   |   |       |   |    |      |   | **280**   |      |   | **962**   |   | **350** |
| Domenico        Dispenza |   | Chief        Operating Officer         G&P Division |   | Annual        Monetary Incentive Plan 2011                                                                          |   | 453       |   |      |   |       |   |    |      |   |      |      |   |      |   |    |
|                     |   |                                                    |   | Deferred Monetary Incentive Plan 2010 BoD July        28, 2010                                                      |   |      |   |      |   |       |   | 141     |  (2) |   | 140       |  (3) |   |      |   |    |
|                     |   |                                                    |   | Deferred        Monetary Incentive Plan 2009 BoD July 30, 2009                                                      |   |      |   |      |   |       |   | 105     |  (2) |   | 245       |  (3) |   |      |   |    |
|                     |   |                                                    |   | Deferred Monetary Incentive Plan 2008        Assignment: BoD March 14, 2008 Disbursement: BoD March        10, 2011 |   |      |   |      |   |       |   |    |      |   | 501       |      |   |      |   |    |
| **Total**                |   |                                                    |   |                                                                                                                |   | **453**   |   |      |   |       |   | **246** |      |   | **886**   |      |   |      |   |    |
| Angelo Fanelli           |   | Chief Operating Officer        R&M Division         |   | Annual Monetary Incentive Plan 2011                                                                                 |   | 345       |   |      |   |       |   |    |      |   |      |      |   |      |   |    |
|                     |   |                                                    |   | Deferred        Monetary Incentive Plan 2011 BoD March 10, 2011                                                     |   |      |   | 224       |   | three-year |   |    |      |   |      |      |   |      |   |    |
|                     |   |                                                    |   | Long-Term Monetary Incentive Plan 2011 BoD        October 27, 2011                                                  |   |      |   | 263       |   | three-year |   |    |      |   |      |      |   |      |   |    |
|                     |   |                                                    |   | 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 BoD July 30, 2009                                                      |   |      |   |      |   |       |   |    |      |   |      |      |   | 126       |   |    |
|                     |   |                                                    |   | Deferred Monetary Incentive Plan 2008        Assignment: BoD March 14, 2008 Disbursement: BoD March        10, 2011 |   |      |   |      |   |       |   |    |      |   | 159       |      |   |      |   |    |
| **Total**                |   |                                                    |   |                                                                                                                |   | **345**   |   | **487**   |   |       |   |    |      |   | **159**   |      |   | **564**   |   |    |

| Other Managers with strategic responsibilities (4) |   | Annual Monetary Incentive Plan 2011 |   | 2,587 |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|----------------------------------------------------|--------|-------------------------------------|--------|-------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|

|      |   |   |   | Deferred        Monetary Incentive Plan 2011 BoD March 10, 2011                                                     |   |      |   | 1,310     |   | three-year |   |    |   |   |      |   |   |       |   |      |
|-----------|--------|--------|--------|---------------------------------------------------------------------------------------------------------------------|--------|-----------|--------|-----------|--------|------------|--------|---------|--------|--------|-----------|--------|--------|------------|--------|-----------|
|      |   |   |   | Long-Term Monetary Incentive Plan 2011 BoD        October 27, 2011                                                  |   |      |   | 1,519     |   | three-year |   |    |   |   |      |   |   |       |   |      |
|      |   |   |   | Deferred        Monetary Incentive Plan 2010 BoD July 28, 2010                                                      |   |      |   |      |   |       |   |    |   |   |      |   |   | 1,123      |   |      |
|      |   |   |   | Long-Term Monetary Incentive Plan 2010 BoD        September 9, 2010                                                 |   |      |   |      |   |       |   |    |   |   |      |   |   | 1,463      |   |      |
|      |   |   |   | Deferred        Monetary Incentive Plan 2009 BoD July 30, 2009                                                      |   |      |   |      |   |       |   |    |   |   |      |   |   | 1,391      |   |      |
|      |   |   |   | Deferred Monetary Incentive Plan 2008        Assignment: BoD March 14, 2008 Disbursement: BoD March        10, 2011 |   |      |   |      |   |       |   |    |   |   | 1,751     |   |   |       |   |      |
| **Total** |   |   |   |                                                                                                                |   | **2,587** |   | **2,829** |   |       |   |    |   |   | **1,751** |   |   | **3,977**  |   | **650**   |
|           |   |        |   |                                                                                                                     |   |           |   |           |   |            |   |         |        |   |           |        |   |            |   |           |
|      |   |   |   |                                                                                                                |   | **6,407** |   | **7,222** |   |       |   | **246** |   |   | **4,405** |   |   | **12,294** |   | **1,000** |
|           |   |        |   |                                                                                                                     |   |           |   |           |   |            |   |         |        |   |           |        |   |            |   |           |

|  |
|--|

| (1) |    | Payment        relative to deferred monetary incentive granted in 2008        related to EBITDA performance in the three-year period        2008-2010.                                                                                                                                                |
|-----|--------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| (2) |    | Pro-rata        amount no longer payable, following the consensual        termination, in relation to the vesting period, in        accordance with that defined in the Plan Regulations.                                                                                                             |
| (3) |    | Pro-rata        amount paid, following the consensual termination, in        relation to the vesting period, in accordance with that        defined in the Plan Regulations.                                                                                                                          |
| (4) |    | Managers who,        during the course of the year and with the Chief        Executive Officer and Division Chief Operating Officers,        were permanent members of the Company Management        Committee and the ones who report directly to the Chief        Executive Officer (ten managers). |

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*Stock Option Plans*In 2009 Eni terminated any stock option compensation plan.

For existing stock option plans, during the course of 2011,the 2008 awarding from the 2006-2008 Plan reached maturity, interms of the Chief Executive Officer and the critical managerialstaff, connected to the performance achieved by Eni shares interms of Total Shareholders’ Return (TSR) during thethree-year period in question, with respect to the other majorinternational oil companies. At its meeting of March 10, 2011,the Board of Directors, on the basis of the results achievedduring the vesting period, verified, in accordance with aproposal from the Compensation Committee, and determined themultiplier to be applied to the number of shares granted for thepurposes of determining the number of options which could beexercised starting on July 31, 2011, in a measure equal to 55% onthe incentive scale 0÷100%. The options which can be exercisedby the Chief Executive Officer were then defined at 348,975, withan exercise price of euro 22.540.

*Severance indemnity for end of office or termination ofemployment*With its decision of April 27, 2011, the Board of Directors,recognizing the significant professional contribution made to theachievement of the Company objectives by the out-going Chairmanand the Chief Executive Officer and General Manager, approved thepayment to both, of extraordinary compensation of euro 1 million,holding it to be in line with the criteria of suitability andcorrectness, as well as proportionality with respect to thepayments received over the course of their respective mandates.For the Chief Executive Officer and General Manager, saidcompensation has been deferred to the end of the 2011-2014mandate.

The Chief Executive Officer and General Manager was entitledthe amount envisaged in implementation of the conditions for theend of the 2008-2011 mandate, which envisage, in relation tofixed remuneration and 50% of the maximum variable remunerationreceived for his position as Company’s manager, socialsecurity, and pension contribution, and employment terminationpayment equal to that paid by Eni for the management employmentrelationship.

To the Chief Operating Officer of the Gas & PowerDivision, Mr. Dispenza, whose office ended at the end of thefinancial year, it was paid, in addition to amounts due under theapplicable law and collective contract, an amount defined inaccordance with the Company policies regarding severanceincentive.

*Accrued compensation*Total compensation accrued in the year 2011 pertaining to allthe Board members amounted to euro 8.4 million; it amounted toeuro 513,000 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, 2011, 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 34 million and wasaccrued in Eni’s Consolidated Financial Statements for theyear ended December 31, 2011. The break-down is as follow:

|   | **2011**           |
|--------|--------------------|
|   |                    |
|   | **(euro million)** |

| Fees and salaries                               |   | 21     |
|-------------------------------------------------|--------|--------|
| Post        employment benefits                 |   | 1      |
| Other long-term benefits                        |   | 10     |
| Indemnity        upon termination of the office |   | 2      |
|                                            |   | **34** |
|                                            |   |        |

The above amounts include salaries, fees for attendingmeetings, 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, 2011, 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 1,835 thousand.

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| **Name** | **(euro thousand)** |
|----------|---------------------|
|     |                     |

| Paolo Scaroni           |   | CEO and General Manager of Eni                         |   | 177       |
|-------------------------|--------|--------------------------------------------------------|--------|-----------|
| Claudio        Descalzi |   | Chief        Operating Officer of the E&P Division |   | 323       |
| Domenico Dispenza       |   | Chief Operating Officer of the G&P Division        |   | 452       |
| Angelo        Fanelli   |   | Chief        Operating Officer of the R&M Division |   | 233       |
| Senior managers (a)     |   |                                                   |   | 650       |
|                    |   |                                                   |   |           |
|                    |   |                                                   |   | **1,835** |
|                    |   |                                                   |   |           |

----

| (a) | i | No. 8        managers. |
|-----|---|------------------------|

 

> 
***Stock Options***

At December 31, 2011, a total of 11,873,205 options wereoutstanding for the purchase of an equal amount of Eni ordinaryshares with a nominal value of euro 1.00 at an average strikeprice of euro 23.101. The Company discontinued any stock-basedcompensation scheme in 2009; as such, options outstanding as ofthe end of the year pertained to stock options schemes adopted inprevious reporting periods.

The following table shows the evolution of stock optionactivity in 2010 and 2011.

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

|   | **Number of shares** |   | **Weighted average        exercise price**(euro) |   | **Market price**        (a)****(euro) |   | **Number of shares** |   | **Weighted average        exercise price**(euro) |   | **Market price**        (a)****(euro) |
|--------|----------------------|--------|--------------------------------------------------|--------|---------------------------------------|--------|----------------------|--------|--------------------------------------------------|--------|---------------------------------------|
|   |                      |   |                                                  |   |                                       |   |                      |   |                                                  |   |                                       |

| **Options as of January 1**                       |   | **19,482,330** |   | **23.576** |   | **17.811** |   | **15,737,120** |   | **23.005** |   | **16.398** |
|---------------------------------------------------|--------|----------------|--------|------------|--------|------------|--------|----------------|--------|------------|--------|------------|
| New        options granted                        |   |           |   |       |   |       |   |           |   |       |   |       |
| Options exercised in the period                   |   | 88,500         |   | 14.941     |   | 16.048     |   | 208,900        |   | 14.333     |   | 16.623     |
| Options        cancelled in the period            |   | 3,656,710      |   | 26.242     |   | 16.918     |   | 3,655,015      |   | 23.187     |   | 17.474     |
| **Options outstanding as of December 31**         |   | **15,737,120** |   | **23.005** |   | **16.398** |   | **11,873,205** |   | **23.101** |   | **15.941** |
| **of        which exercisable as of December 31** |   | **8,896,125**  |   | **23.362** |   | **16.398** |   | **11,863,335** |   | **23.101** |   | **15.941** |
|                                              |   |                |   |            |   |            |   |                |   |            |   |            |

----

| (a) |   | Market price        relating to new rights assigned, rights exercised in the        period and rights cancelled in the period correspond to        the average market value (arithmetic average of official        prices recorded on Mercato Telematico Azionario in the        month preceding: (i) the date of grant; (ii) the date of        the recording in the securities account of the managers        to whom the options have been granted; and (iii) the date        of the unilateral termination of employment for rights        cancelled). The market share price of grants outstanding        as of the beginning and the end of the year, is the price        recorded as of December 31. |
|-----|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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 2010 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.

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In the line "Options relevant to the year" the tableprovides evidence of the data indicated in the column "Fairvalue of equity compensation" in the Compensation table.

| **Name** |   | **Paolo Scaroni** |   | **Claudio Descalzi** |   | **Domenico Dispenza** |   | **Angelo Fanelli** |   | **Other managers with        strategic responsibilities** (1) |
|----------|--------|-------------------|--------|----------------------|--------|-----------------------|--------|--------------------|--------|---------------------------------------------------------------|
|     |   |                   |   |                      |   |                       |   |                    |   |                                                               |

| **Office** |   | **CEO and General Manager        of****Eni** |   | **Chief Operating Officer        of E&P Division** |   | **Chief Operating Officer         of G&P Division** |   | **Chief Operating Officer        of R&M Division** |   |   |
|------------|--------|----------------------------------------------|--------|--------------------------------------------------------|--------|---------------------------------------------------------|--------|--------------------------------------------------------|--------|--------|
|       |   |                                              |   |                                                        |   |                                                         |   |                                                        |   |        |

| Plan   |   | Eni Stock Option Plans |   | Eni Stock Option Plans |   | Eni Stock Option Plans |   | Snam Rete Gas Stock Option        Plans (2) |   | Eni Stock Option Plans |   | Eni Stock Option Plans |
|--------|--------|------------------------|--------|------------------------|--------|------------------------|--------|---------------------------------------------|--------|------------------------|--------|------------------------|
|   |   |                        |   |                        |   |                        |   |                                             |   |                        |   |                        |

| Options held at the start of the year:                              |            |   |      |   |    |   |    |      |   |    |   |   |   |      |
|---------------------------------------------------------------------|-----------------|--------|-----------|--------|---------|--------|---------|-----------|--------|---------|--------|--------|--------|-----------|
| - number        of option                                           |            |   | 1,894,230 |   | 182,830 |   | 251,275 |      |   | 142,000 |   | 94,095 |   | 1,094,265 |
| - average exercise price                                            | (euro)          |   | 23.247    |   | 23.439  |   | 23.571  |      |   | 4.399   |   | 23.413 |   | 23.302    |
| - average        maturity                                           | (months)        |   | 33        |   | 34      |   | 35      |      |   | 30      |   | 35     |   | 36        |
| 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                                                 |            |   | 285,525   |   | 38,475  |   | 66,375  |      |   |    |   | 22,500 |   | 277,875   |
| Options        held at the end of the year:                         |            |   |      |   |    |   |    |      |   |    |   |   |   |      |
| - number of options                                                 |            |   | 1,608,705 |   | 144,355 |   | 184,900 |  (3) |   | 142,000 |   | 71,595 |   | 816,390   |
| Options        relevant to the year (4)                             |            |   |      |   |    |   |    |      |   |    |   |   |   |      |
| - fair value                                                        | (k        euro) |   | 175       |   | 24      |   | 41      |      |   |    |   | 14     |   | 166       |
|                                                                |            |   |           |   |         |   |         |           |   |         |   |        |   |           |

----

| (1) |    | Managers who,        during the course of the year and with the Chief        Executive Officer and Division Chief Operating Officers,        were permanent members of the Company Management        Committee and the ones who report directly to the Chief        Executive Officer (ten managers). |
|-----|--------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| (2) |    | Granting was        carried out by Snam Rete Gas (now Snam), in regards to        Domenico Dispenza, Chairman of the company until December        23, 2005.                                                                                                                                          |
| (3) |    | Due to        consensual termination, the options granted in 2007 and        2008, equal to 46,200 and 81,125 options, respectively,        could be exercised within twelve months of the date of        termination (by December 30, 2012).                                                         |
| (4) |    | This refers        to the 2011 pro-rata value (from January 1 to July 30) of        the granting of the 2008 stock option plan in accordance        with the breakdown provided for by the accounting        standards.                                                                               |

**** 

**Board Practices**

*Corporate Governance*The corporate governance structure of Eni SpA follows theItalian traditional model, which assigns corporate management tothe Board of Directors, the core of the organizational system,supervisory functions to the Board of Statutory Auditors andauditing of the accounts to the Audit firm appointed by theShareholders’ Meeting. The names of Eni’s Directors,their positions, the year when each of them was initiallyappointed as a Director and their ages are reported in therelated table above.

The Board of Directors will expire at the date of theShareholders’ Meeting approving Eni’s financialstatements for the year ending December 31, 2013.

*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 Boardappointed Paolo Scaroni as CEO and General Manager entrusting himwith the widest powers for the ordinary and extraordinaryadministration of the Company. In the same resolution, the Boarddelegated to the Chairman, Giuseppe Recchi, the powers toidentify and promote integrated projects and internationalagreements of strategic importance, according to Article 24 ofthe By-laws, while exclusively reserving the most importantstrategic, operational and organizational powers in addition tothose that cannot be delegated by law.

In particular, performing the powers as specified in the EniCode, and in consultation with the relevant committees, the CEO,and/or the Chairman where applicable, the Board, among othertasks: defines the system of corporate governance of the Companyand the Group; establishes the internal committees of the Board;assigns and revokes proxies to the CEO and to the Chairman anddefines the limits and modalities for exercising such proxies;defines the 

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fundamental guidelines pertaining to the organizational,administrative and accounting structure of the Company and theinternal control system; 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 proxies andreceives periodical 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 partiestransactions9; appoints and dismisses the ChiefOperating Officer, the Officer in charge of preparing financialreports, the Officer in charge of internal control and a SeniorExecutive Vice President of Internal Audit; defines aremuneration plan for top management of the Company and theGroup; 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 proxies believe it is appropriate topresent to the Board due to their particular relevance orsensitivity. In accordance with Article 23.2 of the By-laws, theBoard also decides on: mergers operations and proportionalspin-off operations in shareholdings with share quotas exceeding90%; on the creation and closing of branches; and on adjustmentsof the By-laws to regulatory provisions.

In accordance with the By-laws, the Chairman and the ChiefExecutive Officer retain representative powers for the Company.

*Directors’ independence*During its meeting on May 6, 201110 and, after theinvestigation of the Nomination Committee, in the meeting held onFebruary 14, 2012, the Board of Directors has verified that thenon-executive Directors Gatto, Lorenzi, Marchioni, Petri,Profumo, Resca and Taranto are independent. 

This determination was made by the Board on the basis ofstatements made by Directors and of the information available tothe Company, and taking into account the criteria of independenceset forth by in Italian regulations and the Corporate GovernanceCode of Borsa Italiana. Director Resca was confirmed as beingindependent under the terms of the Eni Code as well, even thoughhe has held the position for over nine years, because of hisrecognized independence of judgment. With reference to themarital relationship of the Director Profumo with an employee ofthe Company, the Board considered that this relationship does notabsolutely compromise the independence requirements requested byEni Code, in consideration of the ethical and professional rigorof this Director and of his international reputation.

The Board of Statutory Auditors has consistently verified thecorrect application of the criteria and procedures adopted by theBoard for assessing the independence of its members. The abovereferenced independence criteria may not be equivalent to theindependence criteria set forth by the NYSE listing standardsapplicable to a U.S. domestic company.

*Board Committees*The Board of Directors has established four internalcommittees with consulting and advisory functions to the Board:(a) the Internal Control Committee; (b) the CompensationCommittee; (c) the Nomination Committee11; and(d) the Oil-Gas Energy Committee. The Internal ControlCommittee and the Compensation Committee are required by theCorporate Governance Code of Borsa Italiana. The composition,role and functioning of these committees are governed by theirrelated regulations which are approved by the Board, incompliance with the criteria outlined in the Eni Code. 

The committees required by the Code (Internal ControlCommittee, Nomination Committee and Compensation Committee) arecomposed of not less than three members and, in any case, fewerthan the majority of members of the Board. The committees arecomposed of non-executive Directors, all of whom are independentwith the exception of the Nomination Committee. With regard tothis Committee, the majority of its members are independent inaccordance with the recommendations of the Corporate GovernanceCode of Borsa Italiana.

----

| (9)  |    | 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.                                                                                                                                                                                                                                                                             |
|------|--------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| (10) |    | Beforehand        the Board of Directors had confirmed – at its        Meeting on March 10, 2011 – that the non-executive        Directors Clô, Colombo, Marchioni, Reboa, Resca,        Scibetta and Taranto were independent. This determination        was made on the basis of statements made by the Directors        and on the information available to the Company, and        taking into account the criteria of independence set        forth by Italian regulations and the Corporate Governance        Code of Borsa Italiana. The Board of Statutory Auditors        verified the correct application of the criteria and        procedures adopted by the Board for assessing the        independence of its previous members. |
| (11) |    | The Board of        Directors of Eni established the Nomination Committee on        July 28, 2011.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |

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In the exercise of their role, the committees have the rightto access any information necessary for the effective fulfillmentof their tasks. They are also provided with adequate financialresources and retain the right to avail themselves of externalconsultants according to terms established by the Board ofDirectors.

With the exception of the Nomination Committee, the Chairmanof the Board of Statutory Auditors or a Statutory Auditorappointed by the former, and upon explicit invitation and withreference to specific topics on the agenda of the day, alsoexternal parties may participate in Committee meetings. TheChairman of the Board of Statutory Auditors or a StatutoryAuditor appointed by the former may participate in the NominationCommittee meetings exclusively for the topics on the agenda ofthe day which are related to their duties. Minutes of allcommittee meetings are drafted by the respective secretaries. Thecurrent members of the Internal Control Committee, CompensationCommittee, Oil-Gas Energy Committee were appointed by the Boardof Directors on May 6, 2011. The current members of theNomination Committee were appointed by the Board of Directors onJuly 28, 2011.

*Compensation Committee*Members12: Mario Resca (Chairman), Carlo CesareGatto, Roberto Petri and Alessandro Profumo.

Established by the Board of Directors for the first time in1996, this committee advises Board of Directors regarding theproposal for the remuneration of the Chairman and of the CEO, theremuneration policy of Directors with proxies and of the membersof the Board’s committees and, on instructions from the CEO,regarding: (i) annual and long-term incentive plans; (ii) generalcriteria for the remuneration of executives with strategicresponsibilities; (iii) objectives and results of thePerformance and Incentive Plans; (iv) reports to the Board, atleast once every six months, not later than the term for theapproval of the Financial Statements and of the InterimConsolidated Financial Report, on the activity carried out; and(v) reports to the Shareholders’ Meeting called to approvethe Financial Statements on the exercise of its functions,through the Chairman or another Committee member appointed by theformer. It performs the tasks assigned by the Management SystemGuideline on "Transactions involving interests of Directorsand Statutory Auditors and transactions with relatedparties", adopted in November 2010 by the Board of Directorspursuant to Consob regulation of March 12, 2010. The Board ofDirectors modified this Management System Guideline on January19, 2012.

During 2011, the Compensation Committee met six times, with anattendance rate: (i) of 92% of its members in the three meetingsheld until the expiring date of the previous Board of Directors(May 5, 2011); and (ii) of 100% of its members in the threemeetings held after the appointment of the current Committee. 

During 2011, the main topics discussed by the Committee were:(i) evaluation of the attainment of Eni’s 2010 managementobjectives and definition of 2011 performance objectives for thepurposes of variable Incentive Plans; (ii) establishment ofthe variable incentive plan of the Chairman, CEO and Directorsbased on the results achieved in 2010; (iii) establishment of the2011 Deferred Monetary Incentive Plan and its assignment to theCEO; (iv) examination of possible extraordinary remuneration forthe CEO and Chairman; (v) proposal, related to the newappointment of the Board, regarding the remuneration of theDirectors with proxies and of non-executive Director for theparticipation in the Board’s Committees; (vi) the criteriaof the remuneration policy for executives with strategicresponsibilities; (vii) establishment of the 2011 Long-TermMonetary Incentive Plan for the CEO replacing the Eni StockOption Plan; (viii) implementation of the 2011 Long-Term MonetaryIncentive Plan for critical managerial resources;(ix) examination of the changes in regulation regardingcompensation (consultation documents issued by Consob on October10, 2011); and (x) adoption of the provisions of the CorporateGovernance Code of Borsa Italiana (Italian Stock Exchange) andconsequent update of the Compensation Committee’sregulations..

The composition and appointment, as well as tasks andprocedural rules of the Committee are governed by a regulationapproved by the Board of Directors on June 1, 2011, and thenmodified on December 15, 2011.

*Internal Control Committee*Members13: Alessandro Lorenzi (Chairman), CarloCesare Gatto, Paolo Marchioni and Francesco Taranto.

The Internal Control Committee, first established in Eni in1994, is entrusted with providing consulting and advisoryservices to the Board of Directors as regards the internalcontrol system. It is exclusively made up of nonexecutive andindependent Directors who possess the necessary skills for thetasks they are required to perform14.

The Committee reports to the Board of Directors both on itsactivities and on the adequacy of the internal control system, atleast once every six months, not later than the term for theapproval of the annual and half-year financial 

----

| (12) |    | Until May 5,        2011, the members of the Committee were: Mario Resca        (Chairman), Alberto Clô, Paolo Andrea Colombo and        Francesco Taranto.                                                                                                                                                                                      |
|------|--------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| (13) |    | Until May 5,        2011, the members of the Committee were Marco Reboa        (Chairman), Francesco Taranto, Pierluigi Scibetta and        Paolo Marchioni.                                                                                                                                                                                          |
| (14) |    | The Eni Code        establishes that at least two members of the Committee        – and not one as set forth in the corporate        Governance Code of Borsa Italiana – 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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statements. The periodic reports for the Board of Directorsare drafted by the Committee by taking into account the opinionsexpressed – in their respective periodic reports – bythe Officer in charge of preparing financial reports, the Officerin charge of Internal Control, the Eni Watch Structure and, ingeneral, on the basis of the evidence acquired in carrying outits activities. In particular, the Internal Control Committeeperforms the following activities: (i) examining and assessing– with the Officer in charge of preparing financial reportsand the Audit firm – the proper use of accounting principlesand their homogeneity for the drafting of the annual andhalf-year financial statements; (ii) assisting, withconsulting and advisory functions, the Board in defining theguidelines for the internal control system; (iii) providing anevaluation – upon request by the CEO – on specificaspects concerning the process used to identify the main risksrelated to the Company and its subsidiaries as well as on theplanning, implementation and management of the internal controlsystem; (iv) overseeing the activities of Internal AuditDepartment and of the Officer in charge of Internal Control andexamining and eventually proposing observations and integrationsfor the proposal of the Audit plan and the annual budget of theInternal Audit Department as well as on potential changes duringthe year; (v) examining and assessing the following: (a) theinformation received from the Internal Audit Senior ExecutiveVice President as well as any evidence on related monitoringactivities on improvement actions on internal control system; (b)the periodical reports on the outcomes of the monitoringactivities conducted on the internal control system overfinancial reporting, on its adequacy and actual application, aswell as the adequacy of the powers and means assigned to theOfficer in charge of preparing financial reports; (c)communications and information received from the Board ofStatutory Auditors and Statutory Auditors, also in reference tothe outcomes of preliminary investigation conducted by theInternal Audit Department following reports received even if inanonymous form (whistleblowing); (d) evidence emerging from thereports and management letters submitted by the Audit firm;(e) periodical reports issued by Eni Watch Structure, alsoin its capacity as Guarantor of the Code of Ethics; (f) evidenceemerging from the periodical reports submitted by the Officer incharge of preparing financial reports and by the Officer inCharge of internal control; and (g) information on the internalcontrol system concerning the Company’s structure, alsothrough periodical meetings with management, as well as enquiriesand reviews carried out by third parties; (vi) performing otherspecific activities aimed at formulating analyses and opinions ontopics falling under its competence and based on the Board’srequests for details; (vii) performing the tasks assigned by the"Model of internal control on financial reporting"; and(viii) performing the tasks assigned by the Management SystemGuideline on "Transactions involving interests of Directorsand Statutory Auditors and transactions with relatedparties", adopted in November 2010 by Eni’s Board ofDirectors pursuant to Consob Regulation of March 12, 2010, onwhich the Internal Control Committee expressed its unanimousapproval in its capacity as committee of independent Directorsprovided for by the mentioned regulation. In particular, theCommittee provides an opinion on the interest of the Company inthe completion of transactions with related parties, as well ason the convenience and substantial correctness of the underlyingterms. Moreover, for transactions with related parties of greaterimportance, the Committee is involved in the preparatory stage ofthese transactions.

The composition and appointment, as well as tasks andprocedural rules of the Committee are governed by a regulationapproved by the Board of Directors on June 1, 2011 whichbasically confirmed the previous regulation dated 2009.

*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 members of the Nomination Committee are allnon-executive directors. The majority of them are independent inaccordance with the recommendations of the Corporate GovernanceCode of Borsa Italiana. 

The Committee assists the Board of Directors with consultingand advisory functions. In particular the Committee: (a) assiststhe Board of Directors in formulating the criteria for theappointment of persons indicated in letter b) and of members ofthe other corporate boards and bodies of Eni’s investees;(b) provides evaluations to the Board of Directors on theappointment of executives and members of the corporate boards andbodies of the Company and of its subsidiaries, proposed by theChief Executive Officer, whose appointment falls under the Boardof Directors’ responsibility and oversees the relativesuccession plans. Where possible and appropriate, in relationwith the shareholders’ structure, the Committee proposes tothe Board of Directors the succession plan concerning the ChiefExecutive Officer; (c) upon proposal of the Chief ExecutiveOfficer, examines and evaluates criteria for the succession planof executives holding strategic responsibilities in the Company;(d) proposes to the Board of Directors candidates to the positionof director in the event of vacation of one or more during thecourse of the financial year (Article 2386, first paragraph, ofthe Italian Civil Code), ensuring compliance with therequirements on the minimum number of independent directors andof the portion reserved for the less represented gender; (e)designates to the Board of Directors candidates to the positionof director to be submitted to the Shareholders’ Meeting ofthe Company, taking into account any recommendation received fromshareholders, in the event of impossibility to draw the expectednumber of directors form the lists presented by shareholders; (f)oversees the annual self assessment process on performance of theBoard of Directors and its Committees, in compliance with theCorporate Governance Code, and taking into account the outcomesof the self assessment, expresses opinions to the Board ofDirectors regarding the size and composition of the same as wellas, possibly, with regard to the professional skills whosepresence within the Board 

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or within the Committees is considered appropriate; (g)proposes to the Board of Directors the list of candidates to theposition of director, if the Board decides to avail itself of thefaculty provided for in Article 17.3 of the By-law; (h) incompliance with the Corporate Governance Code, proposes to theBoard of Directors guidelines regarding the maximum number ofoffices as director or statutory auditor that may be consideredcompatible with the effective performance of the duties ofdirector or statutory auditor of the Company, and conducts theregular checks and evaluations to be submitted to the Board ofDirectors; (i) provides the periodical investigation on theassessment of independence and integrity requirements ofdirectors, as well as on the absence of situations ofincompatibility or ineligibility of the directors; (j) expressesan opinion to the Board of Directors on any activities incompetition with the activities of the Company eventually carriedout by the directors; and (k) reports to the Board of Directors,at least once every six months, not later than the term for theapproval of the Financial Statements and of the InterimConsolidated Financial Report, on the activity carried out, aswell as on the adequacy of the nomination system. 

The composition, tasks and procedurals rules of the NominationCommittee are governed by a regulation approved by the Board ofDirectors on September 29, 2011.

*Board of Statutory Auditors*In accordance with Italian legislation, as specified inArticle 28 of Eni’s By-Laws, the Board of Statutory Auditorsconsists of five effective members (and two alternate) who mustcomply with specific independence, expertise and integrityrequirements.

The members of the Board of Statutory Auditors currently inoffice15 were elected by the OrdinaryShareholders’ Meeting held on May 5, 2011 for a threefinancial year term, until the Shareholders’ Meetingapproval of Eni’s 2013 Financial Statements.

| **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        (1999 Alternate Auditor)                           |
| 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 Economy and Finance; Ugo Marinelli, Giorgio Silva andMaurizio Lauri were candidates in the list presented byinstitutional investors.

The Auditors are appointed by means of a slate voting system:the lists are presented by the shareholders representing at least0.5% of the share capital. Two Statutory and one AlternateAuditors are selected among the candidates of the minorityshareholders. The Chairman of the Board of Statutory Auditors isappointed by the Shareholders’ Meeting among the Auditorselected by the minority shareholders. 

The Auditors must possess the specific requirements ofindependence as well as the requirements of professionalism andhonorability which are provided for in the regulations of theMinistry of Justice. The By-laws specify that the professionalismrequirements can also be fulfilled by work experiences of atleast three years in: (i) professional or teachingactivities pertaining to commercial law, business economics andcorporate finance, or (ii) executive position within theengineering and geological sectors. U.S. Regulations requires forAudit Committee that at least one member of the Board ofStatutory Auditors shall be a financial expert and have adequateknowledge of the functions of the Audit Committee and experiencein the analysis and application of generally accepted accountingprinciples, preparation and auditing of financial statements andinternal control processes.

Pursuant to the Consolidated Law on Finance, the Board ofStatutory Auditors monitors: (i) the compliance with the law andthe Company’s By-laws; (ii) the observance of the principlesof correct administration; (iii) the adequacy of theCompany’s organizational structure for matters within thescope of the Board’s authority, the adequacy of the internalcontrol system and the administrative and accounting system andthe reliability of the latter in correctly representing theCompany’s transactions; (iv) the arrangements forimplementing the corporate governance rules 

----

| (15) |    | Until May 5,        2011 the member of Board of Statutory Auditors were: Ugo        Marinelli (Chairman); Roberto Ferranti; Luigi Mandolesi;        Tiziano Onesti; Giorgio Silva; Francesco Bilotti        (Alternate Auditor) and Pietro Alberico Mazzola        (Alternate Auditor). |
|------|--------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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provided for in the Corporate Governance Code of BorsaItaliana to which the Company adheres; and (v) the adequacy ofthe instructions imparted by the Company to its subsidiaries, inorder to guarantee full compliance with legal reportingrequirements.

Moreover, pursuant to Article 19 of Legislative Decree No.39/2010, the Board of Statutory Auditors in its role of"internal control and financial auditing committee"supervises the following: (a) the financial reporting process;(b) the efficacy of internal control, internal audit (whereapplicable) and risk management system; (c) the auditing of theannual financial statements and consolidated financialstatements; and (d) the independence of the auditor or auditfirms, in particular with regard to the provision of non-auditingservices to the entity subject to financial auditing.

The functions assigned by the Decree to the "internalcontrol and financial auditing committee" are coherent withand essentially comply with the responsibilities already assignedto the Board of Statutory Auditors of Eni, above all inconsideration of its role as Audit Committee pursuant to the U.S.regulation "Sarbanes - Oxley Act" (which shall beoutlined in greater detail further on).

As already set forth in the Consolidated Law on Finance andcurrently regulated by Article 13 of Decree No. 39/2010, theBoard of Statutory Auditors formulates a grounded proposal to theShareholders’ Meeting on the assignment of the role offinancial auditor and the determination of the remunerationpayable to the auditor.

Furthermore, pursuant to Article 19, paragraph 1, letters c)and d) of the Legislative Decree No. 39/2010, the Board ofStatutory Auditors supervises the auditing activities and, alsoin compliance with the provisions of Article 10.C.5. of Eni Code,the independence of the Audit firm, by verifying the compliancewith all applicable regulations as well as the nature and entityof any services other than financial auditing services providedto Eni Group, directly or through companies belonging to itsnetwork. Results of the supervisory activity are included in theReport drawn up in accordance with Article 153 of theConsolidated Law on Finance, and attached to the financialstatements.

On March 22, 2005, the Board of Directors, as permitted by therules of the U.S. Securities and Exchange Commission applicableto foreign issuers listed on the regulated U.S. markets,identified the Board of Statutory Auditors as the body that,since June 1, 2005, has carried out, within the limits set forthby Italian regulations, the functions assigned to the AuditCommittee of foreign issuers by the Sarbanes-Oxley Act and by theSEC regulations. On June 15, 2005, the Board of StatutoryAuditors approved the regulations concerning the fulfillment ofthe functions assigned pursuant to the above mentioned U.S.Regulations, the text of which is available on Eni’swebsite.

| 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 proposals        presented by the external auditors for their appointment        and making its prompted recommendation to the        Shareholders’ Meeting about the proposal for the        appointment or the retention of the external auditor;                                                                                                                                                                                                                                                                                                                                                    |
|--------|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| • |   | performing the activities of        oversight of the work of the external auditor engaged for        the audit or performing other audit, review or attest        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 admissible non-audit services,        analytically identified, and examine the information on        the execution of the authorized services;                                                                                                                                                                                                                                                                                                                                                                                                                     |
| • |   | evaluating any request to        have recourse to the external auditor engaged for the        audit for admissible non-audit services and expresses its        opinion to the Board of Directors;                                                                                                                                                                                                                                                                                                                                                                                                                          |
| • |   | examining the periodical        communications 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 the management; |
| • |   | examining complaints        received by 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;                                                                                                                                                                                                                                             |
| • |   | examining complaints        received by 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.

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*Eni Watch Structure and Model 231*According to the Italian regulations pertaining to the"administrative liability of legal entities deriving fromoffences", pursuant to Legislative Decree No. 231 of June 8,2001 (hereinafter, "Legislative Decree No. 231 of2001"), associations, including corporations, may be heldliable – and therefore charged with the payment of a penaltyor placed under injunction, with regard to certain offences thatare attempted or committed in Italy or abroad in the interest orfor the benefit of the Company by individuals in high-rankingpositions and/or persons managed or supervised by an individualin an high-ranking position. The companies may, in any case,adopt organizational, management and control models designed toprevent these offences. With regards to this issue, EniSpA’s Board of Directors – in its meetings of December15, 2003 and January 28, 2004 – has approved anorganizational, managerial and control model pursuant toLegislative Decree No. 231 of 2001 ("Model 231") andhas appointed the Eni Watch Structure. Moreover, after theupdates of the Model 231 as a result of the changes of Italianlegislation on the matter and of the company organizationalstructures, the Board of Director on March 14, 2008, adoptedEni’s Code of Ethics – replacing the previous versionof 1998 – along with the Model 231 which represents a cleardefinition of the value system that Eni recognizes, accepts andupholds and the responsibilities that Eni assumes internally andexternally in order to ensure that all business activities areconducted in compliance with laws, in a context of faircompetition, with honesty, integrity, correctness and in goodfaith, respecting the legitimate interests of all stakeholderswith which Eni relates on an ongoing basis: shareholders,employees, suppliers, customers, commercial and financialpartners, and the local communities and institutions of theCountries where Eni operates. The synergies between the Code ofEthics – an integral part and unwaivable general principleof Model 231 – and Model 231 were underlined by theassignment to Eni Watch Structure established by the Model 231 ofthe role of Guarantor of the Code of Ethics. The composition ofthe Eni Watch Structure, at the beginning composed by only threemembers, was amended in 2007 with the addition of two externalmembers, one of them appointed Chairman of the Eni WatchStructure identified among academics, professionals of provedauthority and expertise on economic and business management. Theinternal members include the managers in charge of the LegalAffairs, Human Resources and Organization and Internal Audit ofthe Company. On May 19, 2011, the Board of Directors, with thefavorable opinion of the Board of Statutory Auditors, appointedthe current members of the Watch Structure.

*Audit firm*The auditing of the Company’s accounts is entrusted, inaccordance with the law, to an independent Audit firm whoseappointment falls under the competency of the Shareholders’Meeting, upon the Board of Statutory Auditors opinion.

In addition to the obligations set forth in national auditingregulations, Eni’s listing on the New York Stock Exchangerequires that the Audit firm issues 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 the responsibilityfor the auditing activities performed by other audit firms withrespect to subsidiaries’ financial statements, whichrepresent altogether an irrelevant part of the company’sassets and consolidated turnover.

Under Board of Statutory Auditors’ grounded proposal, theShareholders’ Meeting of April 29, 2010 appointed RecontaErnst & Young SpA for the financial years 2010-2018.

*Court of Auditors ("Corte dei conti")*The financial management accounts of Eni is subject to thecontrol of the Court of Auditors (Italian "Corte deiconti") in order to protect public finances. This task iscarried out by the Judge of the Court of Auditors, RaffaeleSquitieri (whose substitute is Amedeo Federici), on the basis ofthe resolution approved on October 27-28, 2009 by the Council ofthe Presidency of the Court of Auditors. The Court Judge attendsthe meetings of the Board of Directors, of the Board of StatutoryAuditors and of the Internal Control Committee.

 

**Employees**

As of December 31, 2011, Eni had a total of 78,686 employees,a decrease of 1,255 employees, or down 1.6% from December 31,2010, which reflects a decrease of 451 employees working outsideItaly and a decrease of 804 employees hired in Italy.

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Employees hired in Italy were 33,170 (42.2% of all Groupemployees). During the year 2,671 persons left their job at Eni,of these 2,102 had an open-end contract and 569 a fixed-termcontract. Declines were registered in all business Divisions dueto efficiency actions.

The process of improvement in the quality mix of employeescontinued in 2011 with the hiring of 1,957 persons, of which 634had fixed-term contracts. A total of 1,323 persons were hiredwith open-ended and apprenticeship contracts, most of them withuniversity qualifications (737 persons) and 586 persons with ahigh school diploma.

Employees hired and working outside Italy were 45,516 (57.8%of all Group employees), a decrease of 3,334 persons.

|   |   | **2009** |   | **2010** |   | **2011** |
|--------|--------|----------|--------|----------|--------|----------|
|   |   |          |   |          |   |          |

|   |   | **(units)** |
|--------|--------|-------------|

| Exploration & Production      |   | 10,271     |   | 10,276     |   | 10,425     |
|-----------------------------------|--------|------------|--------|------------|--------|------------|
| Gas &        Power            |   | 11,404     |   | 11,245     |   | 10,907     |
| Refining & Marketing          |   | 8,166      |   | 8,022      |   | 7,591      |
| Petrochemicals                    |   | 6,068      |   | 5,972      |   | 5,804      |
| Engineering & Construction    |   | 35,969     |   | 38,826     |   | 38,561     |
| Other        activities           |   | 968        |   | 939        |   | 880        |
| Corporate and financial companies |   | 4,872      |   | 4,661      |   | 4,518      |
|                              |   |            |   |            |   |            |
|                              |   | **77,718** |   | **79,941** |   | **78,686** |
|                              |   |            |   |            |   |            |

 

 

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The table below sets forth Eni’s employees as of December31, 2009, 2010 and 2011 in Italy and outside Italy:

|   |   | **2009** |   | **2010** |   | **2011** |
|--------|--------|----------|--------|----------|--------|----------|
|   |   |          |   |          |   |          |

|   |   | **(units)** |
|--------|--------|-------------|

| Exploration & Production      | Italy                |   | 3,883      |   | 3,906      |   | 3,797      |
|-----------------------------------|----------------------|--------|------------|--------|------------|--------|------------|
|                              | Outside        Italy |   | 6,388      |   | 6,370      |   | 6,628      |
|                              |                 |   |            |   |            |   |            |
|                              |                 |   | 10,271     |   | 10,276     |   | 10,425     |
|                              |                 |   |            |   |            |   |            |
| Gas &        Power            | Italy                |   | 8,842      |   | 8,652      |   | 8,422      |
|                              | Outside Italy        |   | 2,562      |   | 2,593      |   | 2,485      |
|                              |                 |   |            |   |            |   |            |
|                              |                 |   | 11,404     |   | 11,245     |   | 10,907     |
|                              |                 |   |            |   |            |   |            |
| Refining & Marketing          | Italy                |   | 6,467      |   | 6,162      |   | 5,790      |
|                              | Outside        Italy |   | 1,699      |   | 1,860      |   | 1,801      |
|                              |                 |   |            |   |            |   |            |
|                              |                 |   | 8,166      |   | 8,022      |   | 7,591      |
|                              |                 |   |            |   |            |   |            |
| Petrochemicals                    | Italy                |   | 5,045      |   | 4,903      |   | 4,750      |
|                              | Outside Italy        |   | 1,023      |   | 1,069      |   | 1,054      |
|                              |                 |   |            |   |            |   |            |
|                              |                 |   | 6,068      |   | 5,972      |   | 5,804      |
|                              |                 |   |            |   |            |   |            |
| Engineering & Construction    | Italy                |   | 5,174      |   | 4,915      |   | 5,197      |
|                              | Outside        Italy |   | 30,795     |   | 33,911     |   | 33,364     |
|                              |                 |   |            |   |            |   |            |
|                              |                 |   | 35,969     |   | 38,826     |   | 38,561     |
|                              |                 |   |            |   |            |   |            |
| Other        activities           | Italy                |   | 968        |   | 939        |   | 880        |
|                              | Outside Italy        |   | -          |   | -          |   | -          |
|                              |                 |   |            |   |            |   |            |
|                              |                 |   | 968        |   | 939        |   | 880        |
|                              |                 |   |            |   |            |   |            |
| Corporate and financial companies | Italy                |   | 4,706      |   | 4,497      |   | 4,334      |
|                              | Outside        Italy |   | 166        |   | 164        |   | 184        |
|                              |                 |   |            |   |            |   |            |
|                              |                 |   | 4,872      |   | 4,661      |   | 4,518      |
|                              |                 |   |            |   |            |   |            |
| **Total**                         | Italy                |   | 35,085     |   | 33,974     |   | 33,170     |
| **Total**                         | Outside Italy        |   | 42,633     |   | 45,967     |   | 45,516     |
|                              |                 |   |            |   |            |   |            |
|                              |                 |   | **77,718** |   | **79,941** |   | **78,686** |
|                              |                 |   |            |   |            |   |            |
| of which senior managers          |                 |   | 1,562      |   | 1,574      |   | 1,586      |
|                              |                 |   |            |   |            |   |            |

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**Share Ownership**

As of February 29, 2012, the cumulative number of shares ownedby Eni’s directors, statutory auditors and senior managers,including the three Chief Operating Officers, was 310,755 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                                     |   | 56,250     |   | 1,608,705   |
| Carlo        Cesare Gatto           |   | Director                                               |   | 6,800      |   |        |
| Paolo Marchioni                     |   | Director                                               |   | 1,500      |   |        |
| Mario        Resca                  |   | Director                                               |   | 3,900      |   |        |
| Francesco Taranto                   |   | Director                                               |   | 500        |   |        |
| **Chief        Executive Officers** |   |                                                   |   |       |   |        |
| Claudio Descalzi                    |   | Chief Operating Officer of the E&P Division        |   | 39,455     |   | 144,355     |
| Domenico        Dispenza (*)        |   | Chief        Operating Officer of the G&P Division |   | 99,715     |   | 184,900     |
| Angelo Fanelli                      |   | Chief Operating Officer of the R&M Division        |   | 30,800     |   | 71,595      |
| **Board        of**                 |   |                                                   |   |       |   |        |
| **Statutory Auditors**              |   |                                                   |   | **7,454**  |   |        |
| **Senior        managers**          |   |                                                   |   | **22,381** |   | **691,850** |
|                                     |   |                                                        |   |            |   |             |

----

| (*) | i | In charge        until December 31, 2011. |
|-----|---|-------------------------------------------|

 

 

 

 

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**Item 7. MAJOR SHAREHOLDERS AND RELATED PARTYTRANSACTIONS**

**Major Shareholders**

As of March 19, 2012, the following persons were known by Enito own more than 2% of any class of Eni SpA’s votingsecurities. At such date, the total amount of Eni SpA’svoting securities owned by these shareholders was:

| **Title        of class** |   | **Number of shares owned** |   | **Percent of class** |
|---------------------------|--------|----------------------------|--------|----------------------|
|                           |   |                            |   |                      |

| Ministry of Economy and Finance         |   | 157,552,137   |   | 3.93  |      |
|-----------------------------------------|--------|---------------|--------|-------|-----------|
| Cassa        Depositi e Prestiti SpA(a) |   | 1,056,179,478 |   | 26.37 |      |
| BNP Paribas Group                       |   | 91,529,423    |   | 2.29  |  (b) |

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

----

| (a) | i | Cassa        Depositi e Prestiti is an entity controlled by the same        Ministry. With Decree of the Ministry of Economy and        Finance of November 30, 2010, published in the Official        Gazette No. 293 of December 16, 2010, a share trade in        has been decided which entails, among other things, the        transfer to Cassa Depositi e Prestiti SpA a total of        655,891,140 Eni’s ordinary shares held by the        Ministry of Economy and Finance. According to said        Decree, the transfer of shares has been finalized on        December 21, 2010. |
|-----|---|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| (b) | i | Of which        0.42% refers to non-voting shares.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |

The following mutual funds reported to hold more than 2% ofEni’s share capital: Blackrock Investment Inc for a totalnumber of shares corresponding to 2.68% of Eni’s ordinaryshare capital.

The Ministry of Economy and Finance, in agreement with theMinistry for Economic Development, retains certain special powersover Eni. See "Item 10 – Additional Information –Memorandum and Articles of Association – Limitations onchanges in control of the Company (Special Power of the ItalianState)". As of March 19, 2012 there were 29,722,077 ADRs,each representing two Eni ordinary shares outstandingcorresponding to approximately 1.6% of Eni’s share capital.See "Item 9 – The Offer 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 to the ConsolidatedFinancial Statements".

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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 to theConsolidated 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, subject to suchfactors, under the Company’s scenario for Brent prices at 90-85$/BBL over the next four years, management plans to grow thedividend in line with OECD inflation from 2011. If managementassumptions on oil prices were to change, management may revisethe dividend and reset the basis for progressive dividendincreases.

Management intends to propose to the Annual Shareholders’Meeting scheduled on May 8, 2012, the distribution of a dividendof euro 1.04 per share for fiscal year 2011, of which euro 0.52was already paid as interim dividend in September 2011. Totalcash outlay for the 2011 dividend is expected at approximatelyeuro 3.8 billion (including the euro 1.9 billion already paid inSeptember 2011) 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.

 

**Significant Changes**

See "Item 5 – Recent Developments" for adiscussion of significant events occurred after 2011 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"), nominal value euro 1.00 each (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. Due to the ratio change, the historicalprices of ADRs have been adjusted by an adjustment factor of 2.5.See "Item 3 – Key Information – ExchangeRates" regarding applicable exchange rates during theperiods indicated below.

|   | **MTA** |   | **New York        Stock Exchange** |
|--------|---------|--------|------------------------------------|
|   |         |   |                                    |

|   | **High** |   | **Low** |   | **High** |   | **Low** |
|--------|----------|--------|---------|--------|----------|--------|---------|
|   |          |   |         |   |          |   |         |

|   | **(euro per share)** |   | **(U.S. $ per ADR)** |
|--------|----------------------|--------|----------------------|

| 2007                 |   | 28.330 |   | 22.760 |   | 78.290 |   | 60.220 |
|----------------------|--------|--------|--------|--------|--------|--------|--------|--------|
| 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 |
|                 |   |   |   |   |   |   |   |   |
| **2010**             |   |   |   |   |   |   |   |   |
| First        quarter |   | 18.560 |   | 16.010 |   | 53.890 |   | 43.950 |
| Second quarter       |   | 17.800 |   | 14.610 |   | 48.550 |   | 35.370 |
| Third        quarter |   | 16.590 |   | 14.710 |   | 43.870 |   | 36.970 |
| Fourth quarter       |   | 16.670 |   | 15.350 |   | 46.950 |   | 40.320 |
|                 |   |   |   |   |   |   |   |   |
| **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 |
| January 2012         |   | 17.280 |   | 16.200 |   | 44.900 |   | 41.420 |
| February        2012 |   | 17.570 |   | 17.080 |   | 47.110 |   | 44.920 |
| March 2012           |   | 18.670 |   | 17.220 |   | 49.440 |   | 45.200 |
|                 |   |        |   |        |   |        |   |        |

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 19, 2012 there were 29,722,077 ADRs outstanding,representing 59,444,154 ordinary shares or approximately 1.6% ofall Eni’s shares outstanding, held by 115 holders of record(including the Depository Trust Company) in the United States,110 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 seeks to replicate the broad sector weights of theItalian stock market. The constituents of the FTSE MIB areselected according to the following criteria: sectorrepresentation, market capitalization of free-float shares andliquidity. The FTSE MIB is market cap-weighted after adjustingconstituents for float. Since June 1, 2009 the FTSE MIB(previously S&P/MIB 

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Index) is the principal indicator used to track theperformance of the Italian stock market and is the basis forfuture and option contracts traded in the Italian DerivativesMarket ("IDEM") managed by Borsa Italiana. The Sharesare the first largest component of the FTSE MIB, with a weightingof approximately 15%, as established by FTSE after the quarterlyrebalancing for FTSE MIB effective March 19, 2012.

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, effectiveDecember 20, 2010: (i) ± 5.0% (or such other amount establishedby Borsa 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), TAH(After Hours trading market), ETFplus (Exchange Traded Funds andExchange Traded Commodities market), IDEM (index and stockderivatives market), SeDeX (covered warrants and certificates),MOT (bond market) and MIV (Investment Vehicles Market), as wellas the admission to listing on and trading on these markets.

According to EU Markets in Financial Instruments Directive(2004/39/EC) ("MiFID") and Consob Regulations, orderscan be routed not only to Regulated Markets but also to eitherMultilateral Trading Facilities ("MTF"s) or SystematicInternalisers. A MTF is a multilateral system, operated by aninvestment firm or a market operator, which brings togethermultiple third-party buying and selling interests in financialinstruments – 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 

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responsible for risk containment, asset stability and thesound and prudent management of intermediaries whilst Consobshall be responsible for the transparency and correctness ofconduct.

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 byBorsa Italiana are available on its website(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 law agency, established by LawNo. 136 of February 10, 1953 and it is registered at the RomeCompanies Register, with identification number (and Tax number)00484960588, and Vat number 0090581106. The registered headoffice of the Company is located in Rome, Italy, and the Companyhas two secondary registered office in San Donato Milanese (MI).

The full text of Eni’s By-laws is attached as an exhibitto this annual report (last amended on June 3, 2010 in compliancewith the provisions of Legislative Decree No. 27/2010, whichimplemented in Italy the EU Shareholders’ Rights Directive– Directive 2007/36/EC – which has been applied fromNovember 1, 2010). See "Exhibit 1".

 

*Company objects and purpose*According to Article 4 of Eni’s By-laws, Company’sobjects include the direct and/or indirect exercise, throughequity holdings in companies or other entities of: the activitiesin the field of hydrocarbons and natural gases, in compliancewith the terms of concessions provided by the law; activities inthe field of chemicals, nuclear fuels, geothermal, renewableenergy sources and energy in general, in the design andconstruction of industrial plants in the mining industry, in themetallurgy industry, in the textile machinery industry, in thewater sector, including water derivation, potabilization;purification and distribution and reuse; in the environmentalprotection sector and the treatment and disposal of waste, aswell as any other economic activity that is instrumental,ancillary or complementary to the aforementioned activities. TheCompany manages the technical and financial co-ordination ofsubsidiaries and affiliated companies. Moreover, the Company maytake shareholdings and interests in other companies or businesswith similar purposes, comparable or complementary to its own orthose of its subsidiaries or affiliates, either in Italy orabroad, and it may provide collateral and/or personal guaranteesfor both its own and third-party commitments.

 

> 
***Directors’ issues***

The Eni’s Board of Directors is invested with the fullestpowers for ordinary and extraordinary management of the Companyand, in particular, the Board has the power to perform all actsit deems advisable for the implementation and achievement of theCompany purpose, except for the acts that the law or Eni’sBy-laws reserve to the Shareholders’ Meeting.

If the Shareholders’ Meeting has not appointed a Chairmanof the Board, the Board shall elect one 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 the 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 hereon, proceeding, in the case of revocation of thepowers delegated to the Chief Executive Officer, to appointanother Chief 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 to other amongits members.

According with Eni’s By-laws, the quorum for meeting ofthe Board shall be the majority of the Directors with votingrights. Resolutions shall be approved by a majority of the votesof the Directors with voting rights present; in the event of atie, the person who chairs the meeting shall have a casting vote.

 

*Interests in Company’s transactions*As provided by Italian Civil Code, when a Director retains apersonal interest or an interest on behalf of third parties inCompany’s transactions, he shall disclose it to the Board ofDirectors, specifying the nature, terms, origin and extent ofsuch interest. Based on this provision and in compliance withConsob Regulation on March 12, 2010, and 

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taking also into account recommendations established by EniCode, the Board of Directors – on November 18, 201016– approved unanimously the Management System Guidelines(MSG) "Transaction involving interests of directors andstatutory auditors and transactions with related parties",which has been applied from January 1, 2011 to ensuretransparency and substantial and procedural fairness oftransactions 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 Internal Control Committee,composed entirely of independent directors under the CorporateGovernance Code of Borsa Italiana SpA and in accordance withConsob Regulation. The MSG specifies commitments of monitoring,evaluation and motivation related to the preliminary phase andcompletion of a transaction with a subject of interest ofdirectors or statutory auditors. In this regard, both in thepreliminary and deliberation phase, is requested a detailed anddocumented examination of the reason of the operation,highlighting the interest of company in its completion and theconvenience and fairness of underlying terms. Directors involvedin matters subject to the Board resolution normally shall notparticipate in the correspondent discussion and decision andshall leave the room during these procedures. If the personinvolved is the Chief Executive Officer and the transaction isunder his jurisdiction, he shall in any case abstain from takingpart in the transaction and shall entrust the matter to the Boardof Directors (as provided by Article 2391 of the Civil Code). Inany case, if the operation is under the responsibility of theBoard of Directors of Eni, it is provided for a non-bindingopinion from the Internal Control Committee.

Moreover, to ensure compliance with the investigation andresolution procedures envisaged by the MSG, Directors andStatutory Auditors issue a declaration, every six months and/orwhen there is any variation, in which they illustrate theirpotential interests related to Eni and its subsidiaries, and inany case they inform the CEO (or the Chairman, in the case ofinterests on the part of the CEO) of the single Transactions thatEni intends to carry out and in which they have an interest; theCEO (or Chairman) will then inform the other Directors and theBoard of Statutory Auditors.

 

*Compensation*Directors’ compensation shall be determined by theShareholders’ Meeting, as required by Italian civil law,while compensation of Directors invested with particular tasks inaccordance with the By-laws (such as the Board Chairman and theCEO), or for participation in Board Committees, shall bedetermined by the Board of Directors, upon proposal of theCompensation Committee after consultation with the Board ofStatutory Auditors (for more details about compensation policy in2011, see "Item 6 – Compensation").

 

*Borrowing powers*Borrowing powers are included in the Company purpose.Moreover, according to the Article 11 of the By-laws, the Companymay issue bonds, including convertibles bonds and warrant incompliance with the provisions of the law.

 

*Retirement and shareholdings*There are no provisions in the By-laws relating to both theretirement based on age-limit requirements and the number ofshares required for director’s qualification.

 

> 
***Company’s shares***

According to Article 5 of the By-laws, the Company’sshare capital amounts to euro 4,005,358,876, fully-paid, and isrepresented by 4,005,358,876 ordinary nominative shares with anominal value of euro 1 (one) each. As required by Italianlegislation on dematerialization of financial instruments,Eni’s shares must be held with "Monte Titoli SpA"(the Italian Central Depository for financial instrument) andtheir beneficial owners may exercise their rights through specialdeposit accounts opened with authorized intermediaries, such asbanks, 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, also through proxy or correspondence.

Moreover, according to Article 9 of the By-laws, theShareholders’ Meeting might resolve to increase the Companycapital by issuing shares, including shares of different classes,to be assigned for no consideration to Eni’s employees,pursuant to Article 2349 of the Italian Civil Code. This facultyhas not been exercised.

In 1995, Eni established a sponsored ADR (American DepositaryReceipts) program directed to U.S. investors.

----

| (16) |    | The Board of        Directors modified this Management System Guideline on        January 19, 2012. |
|------|--------------|-----------------------------------------------------------------------------------------------------|

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Each of Eni’s ADR is equal to two of Eni’s ordinaryshares; Eni’s ADR are listed on the New York Stock Exchange.

 

*Dividend rights*Shareholders have the right to participate in profits and anyother right as provided by the law and subject to any applicablelegal limitations: in particular, the ordinary Shareholders’Meeting called for the approval of the annual financialstatements may allocate the net income resulting after theallotment to the legal reserve, to the payment of a finaldividend per share. In addition, during the course of thefinancial year, the Board of Directors has the faculty, asallowed by the By-laws, to pay interim dividends to theshareholders. Dividends not collected within five years from theday in which they are payable will be prescribed in favor of theCompany and allocated to reserves.

 

*Voting rights*The general provisions on the shares’ "votingrights" are described at the point 6 below. In relation tothe appointment of the Board of Directors (Eni’s Board isnot a "staggered board") and the Board of StatutoryAuditors (see Item 6), Eni’s By-laws provide a voting listsystem. In particular, pursuant to Article 17 of the By-laws andaccording to the applicable law, lists may be presented both byshareholders, either individually or jointly with others,representing at least 1% of the share capital, or any otherthreshold established by Consob (the public authority responsiblefor regulating the Italian securities market) in its regulation,or by the Board of Directors. Each shareholder may present orcontribute towards presenting, and vote for, a single list.

There are no provisions in Eni’s By-laws relating to:rights to share in the Company’s profits; redemptionprovisions; sinking fund provisions; liability to further capitalcalls by the Company.

 

*Liquidation rights*In case of liquidation of the Company, the Shareholders’Meeting shall decide the manner of its liquidation and wouldappoint one or more liquidators and determine their powers andremuneration. According to the Italian Law, shareholders would beentitled to the distribution of the remaining liquidated assetsof the Company in proportion to the nominal value of theirshares, only after payments of all Company’s liabilities andsatisfaction of all other creditors.

 

> 
***Change in shareholders’ rights***

To change the shareholders’ rights it is necessary ashareholders’ resolution. In case of any modification of theBy-laws provisions relating to, among others, voting and dividendrights, resolved by the Shareholders’ Meeting, with theattendance and decision quorum established by the law forextraordinary meetings, shareholders are entitled with awithdrawal right, provided by the Italian Law.

 

> 
***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 approved with thequorum and voting majorities provided for by the law in eachcase. The Board of Directors may, if it is deemed necessary,determine that both the ordinary and the extraordinaryShareholders’ Meeting shall be called for only one date,with the quorum and voting majorities provided for by the law.

Shareholders’ Meetings are usually held at theCompany’s registered office, unless otherwise resolved bythe Board of Directors, provided however they are held in Italy.

A Shareholders’ Meeting shall be called by way of noticepublished on the Company’s website, as well as in the waysspecified by Consob in its regulation, by the statutory deadlinesand in accordance with the applicable law. The call notice, whichcontent is defined by the law and Eni’s By-laws, containsall the information to attend and to vote at the meetingincluding, information on proxy voting and vote by correspondence(the information is also available on the Company’swebsite). In the same manner and within the same deadline forpublishing the notice calling the meeting, unless otherwisespecified by the regulations, the Board of Directors issues areport on the meeting’s agenda.

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An ordinary Shareholders’ Meeting shall be is called atleast once a year, within 180 days of the end of the Companyfinancial year (on December 31), to approve the financialstatements, since as the Company is required to draw upconsolidated 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 recorded at the end ofthe seventh trading day prior to the date of theShareholders’ Meeting at first or single call. Credit anddebit records entered on accounts after this deadline shall notbe considered for the purpose of determining entitlement toexercise of voting rights at the Shareholders’ Meeting. Thestatement issued by the authorized intermediary must be receivedby the Company by the end of the third trading day prior to thedate of the Shareholders’ Meeting on first or single call,or any other deadline established by Consob regulation issued inagreement with the Bank of Italy. Shareholders shall neverthelessbe entitled to attend the meeting and cast a vote if thestatements are received by the Company after the deadlinesindicated above, provided they are received before the start ofproceedings of the given call. Those persons who are entitled tovote may appoint a party to represent themselves at theShareholders’ Meeting by means of a written proxy (or inelectronic form where this is provided for in specificregulations) and in the manner set forth therein. In this lattercase, electronic notification of the proxy may be made through aspecial section of the Company’s website as indicated in thenotice calling the meeting. In order to simplify proxy voting byshareholders who are employees of the Company or of itssubsidiaries and belong to shareholders associations that meetapplicable statutory requirements, locations for communicationsand collecting proxies shall be made available to saidassociations in accordance with the terms and conditions agreedfrom time to time with the legal representatives of saidassociations. The right to vote may also be exercised bycorrespondence according to the applicable provisions of laws andregulations. If envisaged in the notice calling the meeting,those persons entitled to vote may attend the Shareholders’Meeting by means of telecommunication systems, and exercise theirright to vote by electronic means, in accordance with theprovisions of the law, the applicable regulations and theShareholders’ Meeting Rules. The Company may designate aperson for each Shareholders’ Meeting to whom theshareholders may confer a proxy with voting instructions on allor some of the items on the agenda as provided by the law andregulations, by the end of the second trading day preceding thedate set for the Shareholders’ Meeting on first or singlecall. Such proxy shall not be valid for items in respect of whichno voting instructions 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 with a resolution ofthe ordinary Shareholders’ Meeting on December 4, 1998, inorder to guarantee an efficient development of meetings and theright of each shareholder to express his/her opinion on the itemson the agenda.

The Board of Directors shall make a report on the items on theagenda available to the public at the Company’s registeredoffice, on the Company’s website and in any other mannerestablished in Consob regulations at the deadline for publicationof the notice calling the Shareholders’ Meeting.

During Shareholders’ Meetings, the Board of Directorsprovides wide disclosure on items examined and shareholders canrequire information on issues in the agenda. Information isprovided taking into account of 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 3 of Law Decree 332 of May 31,1994, ratified with amendments by Law No. 474 of July 30, 1994(Law No. 474/1994), under no circumstances may any party ownshares in the Company which constitute a direct or indirectshareholding more than 3% of the Company’s share capital.Exceeding this limit results in a ban on exercising the votingrights and other rights, except for the right to participate inprofits, related to any shareholding that exceeds the limit.

Pursuant to Article 32 of the By-laws and the above mentionedprovision of law, shareholdings owned by the Ministry of Economyand Finance, public entities or organization controlled by themare 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.

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> 
***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 Ministry of Economy andFinance, in agreement with the Ministry for Economic Development,holds special powers that can be exercised in accordance with thecriteria set out in the Decree issued by the President of theCouncil of Ministers on June 10, 2004.

| These special powers are briefly the        following: |
|--------------------------------------------------------|

| (a) |   | objection to the purchase,        by parties who are subject to the shareholding limit, of        significant shareholdings, i.e. shareholdings that        represent at least 3% of the share capital and consist of        shares with the right to vote in ordinary        Shareholders’ Meetings. The objection, 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 notification which        Directors are required to send when a request is made for        registration in the register of shareholders. During the        period of time allowed for the right of objection to be        exercised, the voting rights and other rights, except for        the right to participate in profits, connected with the        shares that represent the significant shareholding remain        suspended. In the event of the right of objection being        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 assignee will be        forbidden from exercising its voting rights and any        rights other than property rights connected with the        shares that represent the significant shareholding, and        will be required to assign these same shares within one        year. In the event of a failure to comply, the Court, at        the request of the Ministry of Economy and Finance, will        order the sale of the shares representing the significant        shareholding according to the procedures set out in        Article 2359-*ter* of the Civil Code; |
|-----|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| (b) |   | objection to the signing of        agreements, as defined in Article 122 of the Consolidated        Law on Finance, in the event that at least 3% of the        share capital consisting of shares with the right to vote        in ordinary Shareholders’ Meetings is represented in        the agreements. For the purpose of allowing the right of        objection to be exercised, Consob will inform the        Ministry of Economy and Finance of any significant        agreements of which it has been notified under the terms        of the afore mentioned Article 122 of the Consolidated        Law on Finance. The right of objection must be exercised        within ten days of the date of Consob’s        notification. During the period of time allowed for the        right of objection to be exercised, the voting rights and        any rights other than property rights of the shareholders        signing up to the agreement are suspended. If an        objection decision is issued with due justification        detailing the actual prejudicial effect of the aforesaid        agreements to the vital interests of the State, the        agreement will 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) |   | veto power, if duly        justified by an actual prejudicial effect to the vital        interests of the State, of resolutions to dissolve the        Company, transfer the Company, merge, demerge, transfer        the registered office overseas, change the Company        purpose, amend the By-laws in a way that withdraws or        modifies the powers detailed in letters (a), (b), (c) and        the subsequent letter (d); and                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |
| (d) |   | appointment of a Director        with no right to vote in Board meetings.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |

Decisions to exercise the powers detailed in letters (a), (b)and (c) may be challenged, within sixty days, by the partiesentitled to do so, before the Regional Administrative Court ofLazio.

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 the national and Europeanprinciples, and in particular with the non-discriminationprinciple.

The Italian Decree issued by the President of the Council ofMinisters on May 20, 2010, after some decisions of the EuropeanCourt of Justice, repealed Article 1, paragraph 2 of the Decreeissued by the President of the Council of Ministers on June 10,2004, related to the specific circumstances in which the specialpowers may be exercised.

On March 15, 2012, the Law Decree No. 21/2012 on"Provisions regarding special powers on companies in defenseand national security areas and for activities of strategicimportance in energy, transport and communications areas"was published in the Italian Official Gazette. The Law Decree isin force, but subject to conversion into Law within 60 days. TheDecree, issued to comply with the European Commissionprescriptions, provides for the repeal of the present specialpowers (set out in the Law No. 474/1994), when the nationalstrategic assets are identified by the Government. The newspecial powers of the Government include a veto power and theauthority to impose specific conditions on the direct and/orindirect disposal of such assets, on the basis of objective andnon discriminatory criteria.

In order to "promote privatization and the spread ofinvestment in shares" of companies in which the State has asignificant shareholding, Article 1, paragraphs 381 to 384 of LawNo. 266 of 2005 (2006 Financial Law) introduced the power to addprovisions to the By-laws of privatized companies primarilycontrolled by the State, like Eni, which allow shares orparticipating financial instruments to be issued that grant thespecial meeting of its holders the right to request that newshares, even at par value, or new financial instruments be issuedto them with the right to vote in ordinary and 

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extraordinary Shareholders’ Meetings. Making thisamendment to the By-laws would lead to the shareholding limitreferred to in Article 6.1 of the By-laws being removed. At thepresent time, however, Eni’s By-laws do not contain such anyprovision.

 

> 
***Shareholder ownership thresholds***

There are no By-laws provisions governing the disclosure ofthe ownership threshold because the matter is regulated by theItalian law. Under Consolidated Law on Finance17 andConsob Regulation18, any direct or indirect holding inthe voting shares of a listed issuer in excess of 2%19,5%, 10%, 15%, 20%, 25%, 30%, 35%, 40%, 45%, 50%, 66.6%, 75%, 90%and 95% must be promptly disclosed to the investee company and toConsob. The same disclosure requirements refer to holdings whichfall below one of the specified threshold. Due declarations shallbe made within five trading days of the date of the transactiontriggering the obligation to notify, regardless of the date onwhich it is to take effect, using the specific forms attached tothe above mentioned 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 of 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 indirectparticipation owned through ADRs. Specific disclosurerequirements (with partially different thresholds), are connectedto the so-called "potential holdings" (such as holdingsof derivatives or other equity-linked securities).

Voting rights attached to listed shares which have not beennotified pursuant the above mentioned disclosure requirements maynot be exercised. Any resolution or act adopted in violation ofsuch limitation, with the contribution of those undisclosedshares, could be voided if challenged in Court, under the CivilCode, by shareholders or by Consob itself.

The Consolidated Law on Finance regulates additionalcross-ownership matters as follows.

Cross-ownership between listed and non-listed companies maynot exceed 2% of the shares of the listed company or 10% of theshares of the non-listed company (applying, for calculating theseownership thresholds, the same rules established for holdings inlisted companies). The company that last exceed the limit of 2%or 10% interest in a listed or unlisted company respectively, maynot exercise the voting rights on the shares held in excess ofsuch thresholds and must sell such shares within the following 12months. In the event of failure to make the disposal within suchtime limit, the suspension of voting rights shall apply to theentire shareholding, and any resolution or act adopted with thecontribution of relevant shares, could be challenged under theCivil Code. If anyone holds an interest exceeding 2% of the sharecapital of a listed company, such listed company or any entitycontrolling such listed company may not acquire an interestexceeding 2% of the share capital of a listed company controlledby said holder. If the foregoing limit is exceeded, the holderwho last exceeded the foregoing limit (or both the holders, if itis not possible to ascertain which holder exceeded such limitlast) may not exercise the voting right related to the sharesexceeding the foregoing limit. In the event of non-compliance,the voting rights attached to the shares in excess of the limitspecified shall be suspended and any resolution or act adoptedwith the contribution of relevant shares could be challengedunder the Italian Civil Code. Described limitations are notapplicable in case of a takeover bid or exchange tender offer foracquiring at least 60% of the ordinary shares of a listedcompany.

Under the same 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 connected to the relevantshares may not be exercised and any resolution or act adoptedwith the contribution of such shares could be challenged underthe Italian Civil Code.

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 for them; (c) provide for thepurchase of the shares or of above mentioned financialinstruments; (d) have as their object or effect the exercise,jointly or otherwise, of dominant influence on such companies;and (d-*bis*) which aim to encourage or frustrate a takeoverbid or equity swap, including commitments relating tonon-participation in a takeover bid.

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| (17) |    | Legislative        Decree No. 58 of February 24, 1998, with specific        reference to Articles 120-122.                                                                                                                                                                                                                                                                                                                                                                  |
|------|--------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| (18) |    | Article 117        of Consob Decision No. 11971/1999 and subsequently        amendments.                                                                                                                                                                                                                                                                                                                                                                                    |
| (19) |    | Moreover,        based on reasoned investor protection and/or market        efficiency aims, Consob is entitled to fix the first        relevant threshold to a measure lower than 2%, by its        decree (as provided for Law Decree No. 5 of February 2,        2009, converted into Law No. 33 of April 9, 2009). This        faculty may be exercised only for definite period of        time, with regard to public companies with high        capitalization level. |

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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 a 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 preventive authorizationof Italian Antitrust Authority20. 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 of the acquisition fallswithin the exclusive jurisdiction of the European Commission.

 

> 
***Changes in share capital***

Eni’s By-laws do not provide for more stringentconditions than is required by the law.

Share capital increases are resolved by a shareholders’resolution at an extraordinary Shareholders’ Meeting.According to Italian law, shareholders have a pre-emptive rightto subscribe for new issues of shares and corporate bondsconvertible into shares in proportion to their respectiveshareholdings. Subject to definite conditions, designated toprevent reduction of (actual) shareholders rights, and topreserve the Company’s interest, the preemptive right may bewaived or limited by a shareholders’ resolution at anextraordinary Shareholders’ Meeting with the consent of morethan 50% of the shares outstanding. The shareholders’pre-emptive right is also waived by the law, in case 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 arecontained in the Italian legislation which implements an EUdirective regarding the free movement of capital. Suchlegislation requires that transfers into or out of Italy of cashor securities in excess of euro 12.5 thousand be reported inwriting to the Relevant Authority (Ministry for Economy andFinance) by residents or non-residents that effect such transfersdirectly, or by banks, securities dealers or Poste Italiane SpA(Italian Mail) that effect such transactions on their behalf. Inaddition, banks, securities dealers or Poste Italiane SpAeffecting such transactions on behalf of residents ornon-residents of Italy are required to maintain records of suchtransactions for five years, which records may be inspected atany time by Italian tax and judicial authorities.

Non-compliance with these reporting and record-keepingrequirements may result in administrative fines or, in the caseof false reporting and in certain cases of incomplete reporting,criminal penalties. Italian Authorities will maintain reports fora period of ten years and may use them, directly or through othergovernment offices, to police money laundering, tax evasion andany other crime or violation.

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| (20) |    | 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. Theincome of the real estate fund is subject to tax, in the hands ofthe 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.

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 

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the applicability 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.

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.

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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.

 

| *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.

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.

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In general, and taking into account the earlier assumptions,for U.S. federal income tax purposes, U.S. Holders who own ADRsevidencing ADRs 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,rules discussed below, distributions paid on the shares generallywill be treated as dividends for U.S. federal income tax purposesto the 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 noncorporate U.S. Holder, dividends paid to you intaxable years beginning before January 1, 2013 that constitutequalified dividend income will be taxable to you at a maximum taxrate of 15% provided that you hold the Shares or ADSs for morethan 60 days during the 121-day period beginning 60 days beforethe ex-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/U.S. dollar rate on the date thedividend distribution is includible in your income, regardless ofwhether the payment is in fact converted into U.S. dollars.Generally, any gain or loss resulting from currency exchangefluctuations during the period from the date you include thedividend payment in income to the date you convert the paymentinto U.S. dollars will be treated as ordinary income or loss andwill not be eligible for the special tax rate applicable toqualified dividend income. The gain or loss generally will beincome or loss from sources within the United States for foreigntax credit limitation 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 maximum 15% tax rate. To the extent a refund ofthe tax withheld is available to a U.S. Holder under Italian lawor under 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 noncorporate 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.

 

*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 the special taxrates applicable to qualified dividend income if Eni SpA istreated as a PFIC with respect to you either in the taxable yearof the distribution or the preceding taxable year, but insteadwill be taxable at rates applicable to ordinary income.

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**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/US$ 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 theeuro/US$ exchange rate as commodities are generally pricedinternationally in U.S. dollars or linked to dollar denominatedproducts as in the case of gas prices. Overall, an appreciationof the euro against the dollar reduces the Group’s resultsfrom operations 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 aswell as, from time to time, to hedge the exposure to variabilityin future cash flows due to movements in commodity prices, inview of pursuing acquisitions of oil and gas reserves as part ofthe Company’s ordinary asset portfolio management or otherstrategic 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;                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |
|------|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| (ii) |   | on the other hand,        management plans to enter 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 dynamic forward 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. We are planning to execute        this activity both in the Gas & Power and the        Refining & Marketing businesses. |

Please refer to "Item 18 – Note 34 to theConsolidated Financial Statements" for a qualitative andquantitative discussion of the Company’s exposure to marketrisks. Please also refer to "Item 18 – Notes No. 13,20, 25 and 30 to the Consolidated Financial Statements" fordetails of the different derivatives owned by the Company inthese 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 the 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 |   | U.S.        $ 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                     |   | U.S.        $ 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               |   | U.S.        $ 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                             |   | U.S.        $ 0.02 (or less) per ADS                                            |   | Any        cash distribution to ADS registered holders.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |
|                                                             |   |                                                                                 |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |
| (g)        Depositary services                              |   | U.S.        $ 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 2011, 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 toU.S. $900,000 in connection with above mentioned expenditures.

 

*Expenses waived or paid directly to third parties by theDepositary*There are no agreements whereby the Depositary has agreed towaive Eni for any fees associated with the administration of theADRs Program or other services thereof, nor to directly pay feesto third-parties.

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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 - Integrated Frameworkissued by the Committee of Sponsoring Organizations of theTreadway Commission ("COSO"). Based on the results ofthis evaluation, the Group’s management concluded that itsinternal control over financial reporting was effective as ofDecember 31, 2011.

The effectiveness of the Company’s internal control overfinancial reporting as of December 31, 2011, has been audited byReconta Ernst & Young SpA, an independent registered publicaccounting firm, as stated in its report that is included onpages F-1 and 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 thatfive members of Eni’s Board of Statutory Auditors, qualifyas "audit committee financial expert", as defined inItem 16A of Form 20-F. These five members are: Ugo Marinelli, whois the Chairman of the Board, and Roberto Ferranti, PaoloFumagalli, Renato Righetti and Giorgio Silva. All members areindependent.

 

**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 Sustainability– Corporate Governance and Corporate Ethics – Code ofEthics. A copy of this code of ethics is included as an exhibitto 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 2011 and2010 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, 2011and 2010, respectively:

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

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

|   |   | **(euro thousand)** |
|--------|--------|---------------------|

| Audit fees                |   | 21,114     |   | 22,407     |
|---------------------------|--------|------------|--------|------------|
| Audit-related        fees |   | 183        |   | 1,034      |
| Tax fees                  |   | 166        |   | 26         |
| All other        fees     |   | -          |   | -          |
| **Total**                 |   | **21,463** |   | **23,467** |
|                      |   |            |   |            |

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 2011, 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 beginning of 2009 up as ofthe date of the 20-F filing for the year ended December 31, 2011.All relevant authorizations previously granted by the GeneralShareholders’ Meeting to the Company management have expiredto execute any purchase of equity securities. As of December 31,2011, Eni’s treasury shares in portfolio amounted to No.382,654,833 (nominal value euro 1 each) corresponding to 9.55% ofshare capital of Eni, for a total book value of euro 6,753million. The decrease of No. 208,900 shares held in treasury fromDecember 31, 2010 (No. 382,863,733 share) related to the sale ofshares following the 2003 and 2004 stock option plans.

 

**Item 16F. Change in Registrant’sCertifying Accountant**

Not applicable.

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**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 which providesfor the Board of Directors as the sole corporate body responsiblefor management and for the establishment of an Audit Committeewithin the same Board, for monitoring activities.

Below a description of the most significant differencesbetween corporate governance practices followed by U.S. domesticcompanies under the NYSE standards and those followed by Eni,also with reference to Corporate Governance Code promoted byBorsa Italiana (hereafter Borsa Italiana Code) to whom Eniadheres.

 

> 
**Independent Directors**

*NYSE standards.*Under NYSE standards listed U.S.companies’ Boards must have a majority of independentdirectors. A director qualifies as independent when the Boardaffirmatively determines that such director does not have amaterial relationship with the listed company (and itssubsidiaries), either directly, or indirectly. In particular, adirector may not be deemed independent if he/she or an immediatefamily member has a certain specific relationship with theissuer, its auditors or companies that have material businessrelationships with the issuer (e.g. he/she is an employee of theissuer 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 onFinance states that at least one member, or two members if theBoard is composed by more than seven members, must possess theindependence requirements provided for Statutory Auditors oflisted companies.

In particular, a director may not be deemed independent ifhe/she or an immediate family member has relationships with theissuer that could influence their autonomous judgment, with itsdirectors or with the companies in the same group of the issuer.

Eni’s By-laws increases the number and states that atleast one member, if the Board is made up by up to five members,or three Board members, in case the Board is made up by more thanfive members, shall have the independence requirement.

Eni’s Code foresees further independence requirements, inline with the ones provided by the Borsa Italiana Code, thatrecommends that the Board of Directors includes an adequatenumber of independent non-executive directors; independence isdefined as not being currently or recently involved in anyrelationship – either directly or indirectly – with theissuer or other parties associated with the issuer and which mayinfluence his/her independent judgment.

In accordance with Eni’s By-laws, the Board of Directors,at the time of its appointment by the Shareholders’ Meetingand then from time to time assess the independence of directors,reporting on this assessment in the Annual Corporate GovernanceReport. Eni’s Code also requires that the Board of StatutoryAuditors verifies the correct application of criteria andprocedures adopted by the Board of Directors to evaluate theindependence of its members.

The results of the assessments of the Board shall becommunicated to the market.

In accordance with Eni’s By-laws, should the independencerequirements be impaired or cease or the minimum number ofindependent directors diminish below the threshold set byEni’s By-laws, the Board declares the termination of officeof the member lacking said requirements and provides for hissubstitution. Board members are expected to inform the Company incase they lose their independence requirements or of any reasonsfor ineligibility or incompatibility that might arise.

 

> 
**Meetings of non Executive Directors**

*NYSE standards.* Non-executive directors, includingthose who are not independent, must meet on regularly basis inthe absence of management.

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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.*Eni’s Code allows independentDirectors to decide whether to meet in the absence of the otherDirectors for discussion of issues deemed relevant to thefunctioning of the Board. This provision allowing such meetingsto take place was requested by the independent Directorsthemselves, in order to have greater flexibility, to deal withactual requirements. During 2011, the independent Directors, inconsideration of the frequency of the Board meetings, hadnumerous opportunities to meet, holding formal and informalmeetings to hold 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 further provisions of the Sarbanes-Oxley Act and of Section303A.07 of the NYSE Listed Company Manual.

*Eni standards.*During the Meeting held on March 22,2005, the Board of Directors, as permitted by the rules of theU.S. Securities and Exchange Commission applicable to foreignissuers listed on the regulated U.S. markets, assigned the Boardof Statutory Auditors, effective from June 1, 2005, within thelimits set forth by Italian laws, the function specified and theresponsibilities assigned to the Audit Committee of such foreignissuers by the Sarbanes-Oxley Act and the SEC regulations (see"Item 6 – Board of Statutory Auditors" earlier).

Under Section 303A.07 of the NYSE listed Company Manual auditcommittees of U.S. companies have further functions andresponsibilities which are not mandatory for non-U.S. privateissuers and which therefore are not included in the list offunctions shown in "Item 6 – Board of StatutoryAuditors".

 

> 
**Nominating/Corporate Governance Committee**

*NYSE standards.*U.S. listed companies must have anominating/corporate governance committee (or equivalent body)composed entirely of independent directors that are entrusted,among others, with the responsibility to identify individualsqualified to become board members and to select or recommenddirector nominees for submission to the Shareholders’Meeting, as well as to develop and recommend to the Board ofDirectors a set of corporate governance guidelines. Thisprovision is not binding for non-U.S. private issuers.

*Eni standards.* The Borsa Italiana Code recommends thatthe Board of Directors shall evaluate whether to establish amongits members a nomination committee made up, for the majority, ofindependent 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 by the Chairmen of theother Board Committees: Alessandro Lorenzi (Chairman of theInternal Control Committee) Alessandro Profumo (Chairman of theOil-Gas Energy Committee) and Mario Resca (Chairman of theCompensation Committee). The members of the Nomination Committeeare all non-executive directors. The majority of them areindependent in accordance with the recommendations of the BorsaItaliana Code. Further details on this Committee are reported inthe 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 promptlydisclose any waivers of the code for directors or executiveofficers.

*Eni standards.*After the first approval of the Model231, in the meetings held on December 15, 2003, and January 28,2004, the Board of Directors of Eni approved an organizational,management and control model pursuant to Decree No. 231 of 2001(hereinafter "Model 231") and established the relativeEni Watch Structure. Moreover, after the following approvals ofthe updating of the Model 231 as a result of the changes ofItalian legislation on the matter and of the companyorganizational structures, the Board of Director on March 14,2008, adopted Eni’s Code of Ethics – replacing theprevious version of 1998 – along with the Model 231 whichrepresents 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 allbusiness activities are conducted in compliance with laws, in acontext of fair competition, with honesty, integrity, correctnessand in good faith, respecting the legitimate interests of allstakeholders with which Eni relates on ongoing basis:shareholders, employees, suppliers, customers, commercial andfinancial partners, and the 

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local communities and institutions of the Countries where Enioperates. These values are stated in the Code of Ethics and allthe people working for Eni, without exception or distinction,starting from Directors, senior management and members ofCompany’s bodies, as also requested by the SEC rules and theSarbanes-Oxley Act, are committed to observing and enforcingthese principles within their function and responsibility. Thesynergies between the Code of Ethics – an integral part andmandatory general principle of Model 231 – and Model 231were underlined by the assignment to Eni Watch Structureestablished by the Model 231 for the organizational, managementand control according to Legislative Decree No. 231/2001 –the role of Guarantor of the Code of Ethics. The Guarantor of theCode of Ethics – that is the Watch Structure of the Model231 – acts for the protection and promotion of theabovementioned principles and every six months presents a reporton the implementation of the Code to the Internal ControlCommittee, to the Board of Statutory Auditors and to the Chairmanand the CEO, who reports on this to the Board of Directors. Thecomposition of the Watch Structure of the Model 231, at thebeginning composed by only three members, has been modified in2007, with the introduction of other two external members, one ofwhich appointed Chairman of the Watch Structure, identified amongacademicians, professional men of proved authority and expertiseon economic and management matters. The internal members includethe managers responsible for the Legal Affairs, Human Resourcesand Organization and Internal Audit of the Company. On May 19,2011, the Board of Directors, with the favorable opinion of theBoard of Statutory Auditors, appointed the current members of theWatch 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, 2011 and        2010                                                                 | F-4      |
| Consolidated profit and loss account for the years ended        December 31, 2011, 2010 and 2009                                   | F-5      |
| Consolidated Statements of comprehensive income for the        years ended December 31, 2011, 2010 and 2009                        | F-6      |
| Consolidated Statements of changes in shareholder’s        equity for the years ended December 31, 2011, 2010 and        2009 | F-7      |
| Consolidated Statement of cash flows for the years ended        December 31, 2011, 2010 and 2009                                   | F-10     |
| Notes to the Consolidated Financial Statements                                                                                     | F-12     |

 

 

**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**

> 
 

The Board of Directors and Shareholders of Eni S.p.A

We have audited the accompanying consolidated balance        sheets of Eni S.p.A. as of December 31, 2011 and 2010 and        the related consolidated profit and loss account and        consolidated statements of comprehensive income, changes        in shareholders' equity and cash flows for each of the        two years in the period ended December 31, 2011. These        financial statements are the responsibility of the        Company's management. Our responsibility is to express an        opinion on these financial statements based on our        audits.

We conducted our audits in accordance with the        standards of the Public Company Accounting Oversight        Board (United States). Those standards require that we        plan and perform the audit to obtain reasonable assurance        about whether the financial statements are free of        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 and        significant estimates made by management, as well as        evaluating the overall financial statement presentation.        We believe that our audit provides a reasonable basis for        our opinion.

In our opinion, the financial statements referred to        above present fairly, in all material respects, the        consolidated financial position of Eni S.p.A. at December        31, 2011 and 2010, and the consolidated results of its        operations and its cash flows for each of the two years        in the period ended December 31, 2011, in conformity with        International Financial Reporting Standards as issued by        the International Accounting Standards Board.

We also have audited, in accordance with the standards        of the Public Company Accounting Oversight Board (United        States), Eni S.p.A.’s internal control over        financial reporting as of December 31, 2011, based on        criteria established in Internal Control-Integrated        Framework issued by the Committee of Sponsoring        Organizations of the Treadway Commission and our report        dated April 5, 2012 expressed an unqualified opinion        thereon.

/s/ Reconta Ernst & Young S.p.A.

Rome, Italy

April 5, 2012

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**REPORT OF INDEPENDENT REGISTERED PUBLICACCOUNTING FIRM**

 

> 
The Board of Directors and Shareholders of Eni S.p.A 

We have audited Eni S.p.A.’s internal control        over financial reporting as of December 31, 2011, based        on criteria established in Internal        Control–Integrated Framework issued by the Committee        of Sponsoring Organizations of the Treadway Commission        (the COSO criteria). Eni S.p.A. management is responsible        for maintaining effective internal control over financial        reporting, and for its assessment of the effectiveness of        internal control over financial reporting included in the        accompanying Management’s Annual Report on Internal        Control over Financial Reporting on page 186. Our        responsibility is to express an opinion on the        company’s internal control over financial reporting        based on our audit.

We conducted our audit in accordance with the        standards of the Public Company Accounting Oversight        Board (United States). Those standards require that we        plan and perform the audit to obtain reasonable assurance        about whether effective internal control over financial        reporting was maintained in all material respects. Our        audit included obtaining an understanding of internal        control over financial reporting, assessing the risk that        a material weakness exists, testing and evaluating the        design and operating effectiveness of internal control        based on the assessed risk, and performing such other        procedures as we considered necessary in the        circumstances. We believe that our audit provides a        reasonable basis for our opinion.

A company’s internal control over financial        reporting is a process designed 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. A company’s internal control        over financial reporting includes those policies and        procedures that (1) pertain to the maintenance of records        that, in reasonable detail, accurately and fairly reflect        the transactions and dispositions of the assets of the        company; (2) provide reasonable assurance that        transactions are recorded as necessary to permit        preparation of financial statements in accordance with        generally accepted accounting principles, and that        receipts and expenditures of the company are being made        only in accordance with authorizations of management and        directors of the company; and (3) provide reasonable        assurance regarding prevention or timely detection of        unauthorized acquisition, use, or disposition of the        company’s assets that could have a material effect        on the financial statements.

Because of its inherent limitations, internal control        over financial reporting may not prevent or detect        misstatements. Also, projections of any evaluation of        effectiveness to future periods are subject to the risk        that controls may become inadequate because of changes in        conditions, or that the degree of compliance with the        policies or procedures may deteriorate.

In our opinion, Eni S.p.A. maintained, in all material        respects, effective internal control over financial        reporting as of December 31, 2011, based on the COSO        criteria.

We also have audited, in accordance with the standards        of the Public Company Accounting Oversight Board (United        States), the consolidated balance sheets of Eni S.p.A. as        of December 31, 2011 and 2010 and the related        consolidated profit and loss account and consolidated        statements of comprehensive income, changes in        shareholders' equity and cash flows for each of the two        years in the period ended December 31, 2011 and our        report dated April 5, 2012 expressed an unqualified        opinion thereon.

/s/ Reconta Ernst & Young S.p.A.

Rome, Italy

April 5, 2012

 

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##### Table of Contents

 

**REPORT OF INDEPENDENT REGISTERED PUBLICACCOUNTING FIRM**

 

> 
To the Board of Directors and Shareholders of Eni            SpA

In our opinion, the consolidated balance sheet as            of December 31, 2009 and the related consolidated            profit and loss accounts, consolidated statements of            comprehensive income, consolidated statements of            changes in shareholders’ equity and consolidated            statements of cash flows for each of the two years in            the period ended December 31, 2009 present fairly, in            all material respects, the financial position of Eni            SpA and its subsidiaries at December 31, 2009, and            the results of their operations and their cash flows            for each of the two years in the period ended            December 31, 2009, in conformity with International            Financial Reporting Standards as issued by the            International Accounting Standards Board. These            financial statements are the responsibility of the            Company's management. Our responsibility is to            express an opinion on these financial statements            based on our audits. We conducted our audits of these            statements in accordance with the standards of the            Public Company Accounting Oversight Board (United            States). Those standards require that we plan and            perform the audit to obtain reasonable assurance            about whether the financial statements are free of            material misstatement. An audit includes examining,            on a test basis, evidence supporting the amounts and            disclosures in the financial statements, assessing            the accounting principles used and significant            estimates made by management, and evaluating the            overall financial statement presentation. We believe            that our audits provide a reasonable basis for our            opinion.

/s/ PricewaterhouseCoopers SpA            Rome, Italy            April 26, 2010

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##### Table of Contents

**CONSOLIDATED BALANCE SHEET****(euro million)**

|   |   | **Dec. 31, 2010** |   | **Dec. 31, 2011** |
|--------|--------|-------------------|--------|-------------------|
|   |   |                   |   |                   |

|   | **  ** | **Note** | **  ** | **Total amount** | **  ** | ***of which with         related parties*** | **  ** | **Total amount** | **  ** | ***of which with         related parties*** |
|--------|------------------|----------|------------------|------------------|------------------|---------------------------------------------|------------------|------------------|------------------|---------------------------------------------|
|   |             |          |             |                  |             |                                             |             |                  |             |                                             |

| **ASSETS**                                                                |   |   |   |        |   |   |    |   |        |   |   |    |
|---------------------------------------------------------------------------|--------|--------|--------|-------------|--------|--------|---------|--------|-------------|--------|--------|---------|
| **Current        assets**                                                 |   |   |   |        |   |   |    |   |        |   |   |    |
| Cash and cash equivalents                                                 |   | (7)    |   | 1,549       |   |   |    |   | 1,500       |   |   |    |
| Other        financial assets held for trading or available for sale      |   | (8)    |   | 382         |   |   |    |   | 262         |   |   |    |
| Trade and other receivables                                               |   | (9)    |   | 23,636      |   |   | *1,356* |   | 24,595      |   |   | *1,496* |
| Inventories                                                               |   | (10)   |   | 6,589       |   |   |    |   | 7,575       |   |   |    |
| Current income tax assets                                                 |   | (11)   |   | 467         |   |   |    |   | 549         |   |   |    |
| Other        current tax assets                                           |   | (12)   |   | 938         |   |   |    |   | 1,388       |   |   |    |
| Other current assets                                                      |   | (13)   |   | 1,350       |   |   | *9*     |   | 2,326       |   |   | *2*     |
|                                                                      |   |   |   | **34,911**  |   |   |    |   | **38,195**  |   |   |    |
| **Non-current assets**                                                    |   |   |   |        |   |   |    |   |        |   |   |    |
| Property,        plant and equipment                                      |   | (14)   |   | 67,404      |   |   |    |   | 73,578      |   |   |    |
| Inventory - compulsory stock                                              |   | (15)   |   | 2,024       |   |   |    |   | 2,433       |   |   |    |
| Intangible        assets                                                  |   | (16)   |   | 11,172      |   |   |    |   | 10,950      |   |   |    |
| Equity-accounted investments                                              |   | (17)   |   | 5,668       |   |   |    |   | 5,843       |   |   |    |
| Other        investments                                                  |   | (17)   |   | 422         |   |   |    |   | 399         |   |   |    |
| Other financial assets                                                    |   | (18)   |   | 1,523       |   |   | *668*   |   | 1,578       |   |   | *704*   |
| Deferred        tax assets                                                |   | (19)   |   | 4,864       |   |   |    |   | 5,514       |   |   |    |
| Other non-current receivables                                             |   | (20)   |   | 3,355       |   |   | *16*    |   | 4,225       |   |   | *3*     |
|                                                                      |   |   |   | **96,432**  |   |   |    |   | **104,520** |   |   |    |
| **Assets held for sale**                                                  |   | (31)   |   | **517**     |   |   |    |   | **230**     |   |   |    |
| **TOTAL        ASSETS**                                                   |   |   |   | **131,860** |   |   |    |   | **142,945** |   |   |    |
| **LIABILITIES AND SHAREHOLDERS’ EQUITY**                             |   |   |   |        |   |   |    |   |        |   |   |    |
| **Current        liabilities**                                            |   |   |   |        |   |   |    |   |        |   |   |    |
| Short-term debt                                                           |   | (21)   |   | 6,515       |   |   | *127*   |   | 4,459       |   |   | *503*   |
| Current        portion of long-term debt                                  |   | (26)   |   | 963         |   |   |    |   | 2,036       |   |   |    |
| Trade and other payables                                                  |   | (22)   |   | 22,575      |   |   | *1,297* |   | 22,912      |   |   | *1,446* |
| Income        taxes payable                                               |   | (23)   |   | 1,515       |   |   |    |   | 2,092       |   |   |    |
| Other taxes payable                                                       |   | (24)   |   | 1,659       |   |   |    |   | 1,896       |   |   |    |
| Other        current liabilities                                          |   | (25)   |   | 1,620       |   |   | *5*     |   | 2,237       |   |   |    |
|                                                                      |   |   |   | **34,847**  |   |   |    |   | **35,632**  |   |   |    |
| **Non-current        liabilities**                                        |   |   |   |        |   |   |    |   |        |   |   |    |
| Long-term debt                                                            |   | (26)   |   | 20,305      |   |   |    |   | 23,102      |   |   |    |
| Provisions        for contingencies                                       |   | (27)   |   | 11,792      |   |   |    |   | 12,735      |   |   |    |
| Provisions for employee benefits                                          |   | (28)   |   | 1,032       |   |   |    |   | 1,039       |   |   |    |
| Deferred        tax liabilities                                           |   | (29)   |   | 5,924       |   |   |    |   | 7,120       |   |   |    |
| Other non-current liabilities                                             |   | (30)   |   | 2,194       |   |   | *45*    |   | 2,900       |   |   |    |
|                                                                      |   |   |   | **41,247**  |   |   |    |   | **46,896**  |   |   |    |
| **Liabilities directly associated with assets        held for sale**      |   | (31)   |   | **38**      |   |   |    |   | **24**      |   |   |    |
| **TOTAL        LIABILITIES**                                              |   |   |   | **76,132**  |   |   |    |   | **82,552**  |   |   |    |
| **SHAREHOLDERS’ EQUITY**                                             |   | (32)   |   |        |   |   |    |   |        |   |   |    |
| **Non-controlling        interest**                                       |   |   |   | **4,522**   |   |   |    |   | **4,921**   |   |   |    |
| **Eni shareholders’ equity**                                         |   |   |   |        |   |   |    |   |        |   |   |    |
| Share        capital                                                      |   |   |   | 4,005       |   |   |    |   | 4,005       |   |   |    |
| Reserve related to cash flow hedging derivatives        net of tax effect |   |   |   | (174        | )      |   |    |   | 49          |   |   |    |
| Other        reserves                                                     |   |   |   | 49,624      |   |   |    |   | 53,195      |   |   |    |
| Treasury shares                                                           |   |   |   | (6,756      | )      |   |    |   | (6,753      | )      |   |    |
| Interim        dividend                                                   |   |   |   | (1,811      | )      |   |    |   | (1,884      | )      |   |    |
| Net profit                                                                |   |   |   | 6,318       |   |   |    |   | 6,860       |   |   |    |
| **Total        Eni shareholders’ equity**                            |   |   |   | **51,206**  |   |   |    |   | **55,472**  |   |   |    |
| **TOTAL SHAREHOLDERS’ EQUITY**                                       |   |   |   | **55,728**  |   |   |    |   | **60,393**  |   |   |    |
| **TOTAL        LIABILITIES AND SHAREHOLDERS’ EQUITY**                |   |   |   | **131,860** |   |   |    |   | **142,945** |   |   |    |

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

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##### Table of Contents

**CONSOLIDATED PROFIT AND LOSSACCOUNT****(****euro million****except as otherwise stated)**

|   |   | **2009** |   | **2010** |   | **2011** |
|--------|--------|----------|--------|----------|--------|----------|
|   |   |          |   |          |   |          |

|   | **  ** | **Note** | **  ** | **Total amount** | **  ** | ***of which with         related parties*** | **  ** | **Total amount** | **  ** | ***of which with         related parties*** | **  ** | **Total amount** | **  ** | ***of which with         related parties*** |
|--------|------------------|----------|------------------|------------------|------------------|---------------------------------------------|------------------|------------------|------------------|---------------------------------------------|------------------|------------------|------------------|---------------------------------------------|
|   |             |          |             |                  |             |                                             |             |                  |             |                                             |             |                  |             |                                             |

| **REVENUES**                                                             |   |   |   |       |   |   |    |   |   |       |   |   |    |   |   |        |   |   |    |   |
|--------------------------------------------------------------------------|--------|--------|--------|------------|--------|--------|---------|--------|--------|------------|--------|--------|---------|--------|--------|-------------|--------|--------|---------|--------|
| Net sales        from operations                                         |   | (35)   |   | 83,227     |   |   | *3,300* |   |   | 98,523     |   |   | *3,274* |   |   | 109,589     |   |   | *3,882* |   |
| Other income and revenues                                                |   |   |   | 1,118      |   |   | *26*    |   |   | 956        |   |   | *58*    |   |   | 933         |   |   | *43*    |   |
|                                                                     |   |   |   | **84,345** |   |   |    |   |   | **99,479** |   |   |    |   |   | **110,522** |   |   |    |   |
| **OPERATING EXPENSES**                                                   |   | (36)   |   |       |   |   |    |   |   |       |   |   |    |   |   |        |   |   |    |   |
| Purchases,        services and other                                     |   |   |   | 58,351     |   |   | *4,999* |   |   | 69,135     |   |   | *5,825* |   |   | 79,191      |   |   | *5,887* |   |
| *- of which non-recurring charge (income)*                               |   |   |   | *250*      |   |   |    |   |   | *(246*     | *)*    |   |    |   |   | *69*        |   |   |    |   |
| Payroll        and related costs                                         |   |   |   | 4,181      |   |   | *15*    |   |   | 4,785      |   |   | *28*    |   |   | 4,749       |   |   | *33*    |   |
| **OTHER OPERATING (EXPENSE) INCOME**                                     |   |   |   | **55**     |   |   | *44*    |   |   | **131**    |   |   | *41*    |   |   | **171**     |   |   | *32*    |   |
| **DEPRECIATION,        DEPLETION, AMORTIZATION AND IMPAIRMENTS**         |   |   |   | **9,813**  |   |   |    |   |   | **9,579**  |   |   |    |   |   | **9,318**   |   |   |    |   |
| **OPERATING PROFIT**                                                     |   |   |   | **12,055** |   |   |    |   |   | **16,111** |   |   |    |   |   | **17,435**  |   |   |    |   |
| **FINANCE        INCOME (EXPENSE)**                                      |   | (37)   |   |       |   |   |    |   |   |       |   |   |    |   |   |        |   |   |    |   |
| Finance income                                                           |   |   |   | 5,950      |   |   | *27*    |   |   | 6,117      |   |   | *41*    |   |   | 6,379       |   |   | *49*    |   |
| Finance        expense                                                   |   |   |   | (6,497     | )      |   | *(4*    | *)*    |   | (6,713     | )      |   |    |   |   | (7,396      | )      |   | *(1*    | *)*    |
| Derivative financial instruments                                         |   |   |   | (4         | )      |   |    |   |   | (131       | )      |   |    |   |   | (112        | )      |   |    |   |
|                                                                     |   |   |   | **(551**   | **)**  |   |    |   |   | **(727**   | **)**  |   |    |   |   | **(1,129**  | **)**  |   |    |   |
| **INCOME (EXPENSE) FROM INVESTMENTS**                                    |   | (38)   |   |       |   |   |    |   |   |       |   |   |    |   |   |        |   |   |    |   |
| Share of        profit (loss) of equity-accounted investments            |   |   |   | 393        |   |   |    |   |   | 537        |   |   |    |   |   | 544         |   |   |    |   |
| Other gain (loss) from investments                                       |   |   |   | 176        |   |   |    |   |   | 619        |   |   |    |   |   | 1,627       |   |   | *338*   |   |
|                                                                     |   |   |   | **569**    |   |   |    |   |   | **1,156**  |   |   |    |   |   | **2,171**   |   |   |    |   |
| **PROFIT BEFORE INCOME TAXES**                                           |   |   |   | **12,073** |   |   |    |   |   | **16,540** |   |   |    |   |   | **18,477**  |   |   |    |   |
| Income        taxes                                                      |   | (39)   |   | (6,756     | )      |   |    |   |   | (9,157     | )      |   |    |   |   | (10,674     | )      |   |    |   |
| **Net profit**                                                           |   |   |   | **5,317**  |   |   |    |   |   | **7,383**  |   |   |    |   |   | **7,803**   |   |   |    |   |
| **Attributable        to:**                                              |   |   |   |       |   |   |    |   |   |       |   |   |    |   |   |        |   |   |    |   |
| - Eni                                                                    |   |   |   | 4,367      |   |   |    |   |   | 6,318      |   |   |    |   |   | 6,860       |   |   |    |   |
| -        Non-controlling interest                                        |   | (32)   |   | 950        |   |   |    |   |   | 1,065      |   |   |    |   |   | 943         |   |   |    |   |
|                                                                     |   |   |   | **5,317**  |   |   |    |   |   | **7,383**  |   |   |    |   |   | **7,803**   |   |   |    |   |
| **Earnings        per share attributable to Eni**(euro        per share) |   | (40)   |   |       |   |   |    |   |   |       |   |   |    |   |   |        |   |   |    |   |
| Basic                                                                    |   |   |   | 1.21       |   |   |    |   |   | 1.74       |   |   |    |   |   | 1.89        |   |   |    |   |
| Diluted                                                                  |   |   |   | 1.21       |   |   |    |   |   | 1.74       |   |   |    |   |   | 1.89        |   |   |    |   |
|                                                                     |   |        |   |            |        |   |         |        |   |            |        |   |         |        |   |             |        |   |         |        |

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##### Table of Contents

**CONSOLIDATED****STATEMENTSOF COMPREHENSIVE INCOME****(euro million)**

|   |   | **Note** |   | **2009** |   | **2010** |   | **2011** |
|--------|--------|----------|--------|----------|--------|----------|--------|----------|
|   |   |          |   |          |   |          |   |          |

| **Net profit**                                                                             |   |   |   | **5,317**  |   |   | **7,383** |   |   | **7,803** |   |
|--------------------------------------------------------------------------------------------|--------|--------|--------|------------|--------|--------|-----------|--------|--------|-----------|--------|
| **Other        items of comprehensive income**                                             |   |   |   |       |   |   |      |   |   |      |   |
| Foreign currency translation differences                                                   |   | (32)   |   | (869       | )      |   | 2,169     |   |   | 1,031     |   |
| Change in        the fair value of cash flow hedging derivatives                           |   | (32)   |   | (481       | )      |   | 443       |   |   | 352       |   |
| Change in the fair value of available-for-sale        financial instruments                |   | (32)   |   | 1          |   |   | (9        | )      |   | (6        | )      |
| Share of        "Other comprehensive income" on        equity-accounted entities |   | (32)   |   | 2          |   |   | (10       | )      |   | (13       | )      |
| Taxation                                                                                   |   | (32)   |   | 202        |   |   | (175      | )      |   | (128      | )      |
| **Total        other items of comprehensive income**                                       |   |   |   | **(1,145** | **)**  |   | **2,418** |   |   | **1,236** |   |
| **Total comprehensive income**                                                             |   |   |   | **4,172**  |   |   | **9,801** |   |   | **9,039** |   |
| **Attributable        to:**                                                                |   |   |   |       |   |   |      |   |   |      |   |
| - Eni                                                                                      |   |   |   | 3,245      |   |   | 8,699     |   |   | 8,097     |   |
| -        Non-controlling interest                                                          |   |   |   | 927        |   |   | 1,102     |   |   | 942       |   |
|                                                                                       |   |   |   | **4,172**  |   |   | **9,801** |   |   | **9,039** |   |
|                                                                                       |   |        |   |            |        |   |           |        |   |           |        |

 

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##### Table of Contents

**CONSOLIDATED STATEMENTSOF CHANGES IN SHAREHOLDERS’ EQUITY****(million euro)**

|   | **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 securities 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, 2008**                                                                                                       |   | **4,005** |   |   | **959** |   |   | **7,187** |   |   | **(90**  | **)**  |   | **4**  |   |   | **(1,054** | **)**  |   | **(969**   | **)**  |   | **(6,757** | **)**  |   | **34,685** |   |   | **(2,359** | **)**  |   | **8,825**  |   |   | **44,436** |   |   | **4,074**  |   |   | **48,510** |   |
|----------------------------------------------------------------------------------------------------------------------------------------|--------|-----------|--------|--------|---------|--------|--------|-----------|--------|--------|----------|--------|--------|--------|--------|--------|------------|--------|--------|------------|--------|--------|------------|--------|--------|------------|--------|--------|------------|--------|--------|------------|--------|--------|------------|--------|--------|------------|--------|--------|------------|--------|
| **Net        profit of the year**                                                                                                      |   |      |   |   |    |   |   |      |   |   |     |   |   |   |   |   |       |   |   |       |   |   |       |   |   |       |   |   |       |   |   | **4,367**  |   |   | **4,367**  |   |   | **950**    |   |   | **5,317**  |   |
| **Other items of comprehensive income**                                                                                                |   |      |   |   |    |   |   |      |   |   |     |   |   |   |   |   |       |   |   |       |   |   |       |   |   |       |   |   |       |   |   |       |   |   |       |   |   |       |   |   |       |   |
| Change in        the fair value of cash flow hedge derivatives net of tax        effect                                                |   |      |   |   |    |   |   |      |   |   | (279     | )      |   |   |   |   |       |   |   |       |   |   |       |   |   |       |   |   |       |   |   |       |   |   | (279       | )      |   |       |   |   | (279       | )      |
| Change in the fair value of available-for-sale        securities net of tax effect                                                     |   |      |   |   |    |   |   |      |   |   |     |   |   | 1      |   |   |       |   |   |       |   |   |       |   |   |       |   |   |       |   |   |       |   |   | 1          |   |   |       |   |   | 1          |   |
| Share of        "Other comprehensive income" on        equity-accounted entities                                             |   |      |   |   |    |   |   |      |   |   |     |   |   |   |   |   | 2          |   |   |       |   |   |       |   |   |       |   |   |       |   |   |       |   |   | 2          |   |   |       |   |   | 2          |   |
| Foreign currency translation differences                                                                                               |   |      |   |   |    |   |   |      |   |   | 1        |   |   |   |   |   |       |   |   | (696       | )      |   |       |   |   | (151       | )      |   |       |   |   |       |   |   | (846       | )      |   | (23        | )      |   | (869       | )      |
|                                                                                                                                   |   |      |   |   |    |   |   |      |   |   | **(278** | **)**  |   | **1**  |   |   | **2**      |   |   | **(696**   | **)**  |   |       |   |   | **(151**   | **)**  |   |       |   |   |       |   |   | **(1,122** | **)**  |   | **(23**    | **)**  |   | **(1,145** | **)**  |
| **Total recognized income         and (expense) for the year**                                                                         |   |      |   |   |    |   |   |      |   |   | **(278** | **)**  |   | **1**  |   |   | **2**      |   |   | **(696**   | **)**  |   |       |   |   | **(151**   | **)**  |   |       |   |   | **4,367**  |   |   | **3,245**  |   |   | **927**    |   |   | **4,172**  |   |
| **Transactions        with shareholders**                                                                                              |   |      |   |   |    |   |   |      |   |   |     |   |   |   |   |   |       |   |   |       |   |   |       |   |   |       |   |   |       |   |   |       |   |   |       |   |   |       |   |   |       |   |
| Dividend distribution of Eni SpA (euro 0.65 per        share in settlement of 2008 interim dividend of euro 0.65        per share)     |   |      |   |   |    |   |   |      |   |   |     |   |   |   |   |   |       |   |   |       |   |   |       |   |   |       |   |   | 2,359      |   |   | (4,714     | )      |   | (2,355     | )      |   |       |   |   | (2,355     | )      |
| Interim        dividend distribution         of Eni SpA (euro 0.50 per share)                                                          |   |      |   |   |    |   |   |      |   |   |     |   |   |   |   |   |       |   |   |       |   |   |       |   |   |       |   |   | (1,811     | )      |   |       |   |   | (1,811     | )      |   |       |   |   | (1,811     | )      |
| Dividend distribution of other companies                                                                                               |   |      |   |   |    |   |   |      |   |   |     |   |   |   |   |   |       |   |   |       |   |   |       |   |   |       |   |   |       |   |   |       |   |   |       |   |   | (350       | )      |   | (350       | )      |
| Payments        by non-controlling interest                                                                                            |   |      |   |   |    |   |   |      |   |   |     |   |   |   |   |   |       |   |   |       |   |   |       |   |   |       |   |   |       |   |   |       |   |   |       |   |   | 1,560      |   |   | 1,560      |   |
| Allocation of 2008 net profit                                                                                                          |   |      |   |   |    |   |   |      |   |   |     |   |   |   |   |   |       |   |   |       |   |   |       |   |   | 4,111      |   |   |       |   |   | (4,111     | )      |   |       |   |   |       |   |   |       |   |
| Put option        granted to Publigaz SCRL (Distrigas NV non-controlling        shareholder)                                           |   |      |   |   |    |   |   |      |   |   |     |   |   |   |   |   | 1,495      |   |   |       |   |   |       |   |   |       |   |   |       |   |   |       |   |   | 1,495      |   |   |       |   |   | 1,495      |   |
| Effect related to the purchase of Italgas SpA        and Stoccaggi Gas SpA by Snam Rete Gas SpA                                        |   |      |   |   |    |   |   |      |   |   |     |   |   |   |   |   | 1,086      |   |   |       |   |   |       |   |   |       |   |   |       |   |   |       |   |   | 1,086      |   |   | (1,086     | )      |   |       |   |
| Non-controlling        interest acquired following the mandatory tender offer        and the squeeze-out on the shares of Distrigas NV |   |      |   |   |    |   |   |      |   |   |     |   |   |   |   |   |       |   |   |       |   |   |       |   |   |       |   |   |       |   |   |       |   |   |       |   |   | (1,146     | )      |   | (1,146     | )      |
|                                                                                                                                   |   |      |   |   |    |   |   |      |   |   |     |   |   |   |   |   | **2,581**  |   |   |       |   |   |       |   |   | **4,111**  |   |   | **548**    |   |   | **(8,825** | **)**  |   | **(1,585** | **)**  |   | **(1,022** | **)**  |   | **(2,607** | **)**  |
| **Other        changes in shareholders’ equity**                                                                                  |   |      |   |   |    |   |   |      |   |   |     |   |   |   |   |   |       |   |   |       |   |   |       |   |   |       |   |   |       |   |   |       |   |   |       |   |   |       |   |   |       |   |
| Utilization of the reserve for the acquisition        of treasury shares                                                               |   |      |   |   |    |   |   | (430      | )      |   |     |   |   |   |   |   | 1          |   |   |       |   |   |       |   |   | 429        |   |   |       |   |   |       |   |   |       |   |   |       |   |   |       |   |
| Cost        related to stock options                                                                                                   |   |      |   |   |    |   |   |      |   |   |     |   |   |   |   |   |       |   |   |       |   |   |       |   |   | 13         |   |   |       |   |   |       |   |   | 13         |   |   |       |   |   | 13         |   |
| Stock options expired                                                                                                                  |   |      |   |   |    |   |   |      |   |   |     |   |   |   |   |   |       |   |   |       |   |   |       |   |   | (7         | )      |   |       |   |   |       |   |   | (7         | )      |   |       |   |   | (7         | )      |
| Other        changes                                                                                                                   |   |      |   |   |    |   |   |      |   |   | (71      | )      |   |   |   |   | (38        | )      |   |       |   |   |       |   |   | 80         |   |   |       |   |   |       |   |   | (29        | )      |   | (1         | )      |   | (30        | )      |
|                                                                                                                                   |   |      |   |   |    |   |   | **(430**  | **)**  |   | **(71**  | **)**  |   |   |   |   | **(37**    | **)**  |   |       |   |   |       |   |   | **515**    |   |   |       |   |   |       |   |   | **(23**    | **)**  |   | **(1**     | **)**  |   | **(24**    | **)**  |
| **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** |   |
|                                                                                                                                   |   |           |        |   |         |        |   |           |        |   |          |        |   |        |        |   |            |        |   |            |        |   |            |        |   |            |        |   |            |        |   |            |        |   |            |        |   |            |        |   |            |        |

F-7

----

##### Table of Contents

**CONSOLIDATED****STATEMENTSOF CHANGES IN SHAREHOLDERS’ EQUITY***continued***(million euro)**

|   | **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 securities 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**                                                                                              |   |   |      |   |   |    |   |   |      |   |   |     |   |   |   |   |   |      |   |   |       |   |   |       |   |   |       |   |   |       |   |   |       |   |   |       |   |   |      |   |   |       |   |
| Change in        the fair value of cash flow hedge derivatives net of tax        effect                                              | (32)   |   |      |   |   |    |   |   |      |   |   | 267      |   |   |   |   |   |      |   |   |       |   |   |       |   |   |       |   |   |       |   |   |       |   |   | 267        |   |   |      |   |   | 267        |   |
| Change in the fair value of available-for-sale        securities net of tax effect                                                   | (32)   |   |      |   |   |    |   |   |      |   |   |     |   |   | (8     | )      |   |      |   |   |       |   |   |       |   |   |       |   |   |       |   |   |       |   |   | (8         | )      |   |      |   |   | (8         | )      |
| Share of        "Other comprehensive income" on        equity-accounted entities                                           | (32)   |   |      |   |   |    |   |   |      |   |   |     |   |   |   |   |   | (5        | )      |   |       |   |   |       |   |   |       |   |   |       |   |   |       |   |   | (5         | )      |   | (5        | )      |   | (10        | )      |
| Foreign currency translation differences                                                                                             |   |   |      |   |   |    |   |   |      |   |   | (2       | )      |   |   |   |   |      |   |   | 2,204      |   |   |       |   |   | (75        | )      |   |       |   |   |       |   |   | 2,127      |   |   | 42        |   |   | 2,169      |   |
|                                                                                                                                 |   |   |      |   |   |    |   |   |      |   |   | **265**  |   |   | **(8** | **)**  |   | **(5**    | **)**  |   | **2,204**  |   |   |       |   |   | **(75**    | **)**  |   |       |   |   |       |   |   | **2,381**  |   |   | **37**    |   |   | **2,418**  |   |
| **Total recognized income and (expense) for 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 Stoccaggi Gas by Snam Rete Gas SpA                                          | (32)   |   |      |   |   |    |   |   |      |   |   |     |   |   |   |   |   | 56        |   |   |       |   |   |       |   |   |       |   |   |       |   |   |       |   |   | 56         |   |   | (56       | )      |   |       |   |
| Treasury        shares sold following the exercise of stock options by        Eni managers                                           | (32)   |   |      |   |   |    |   |   | (1        | )      |   |     |   |   |   |   |   |      |   |   |       |   |   | 1          |   |   | 1          |   |   |       |   |   |       |   |   | 1          |   |   |      |   |   | 1          |   |
| Treasury shares sold following the exercise of        stock options by Saipem and Snam Rete Gas managers                             | (32)   |   |      |   |   |    |   |   |      |   |   |     |   |   |   |   |   |      |   |   |       |   |   |       |   |   | 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**                                                                                                     | (32)   |   | **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-8

----

##### Table of Contents

**CONSOLIDATED****STATEMENTSOF CHANGES IN SHAREHOLDERS’ EQUITY***continued***(million euro)**

|   | **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 securities 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**                                                                                                                                                 | (32)   |   | **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**                                                                                                                                          |   |   |      |   |   |    |   |   |      |   |   |     |   |   |   |   |   |      |   |   |      |   |   |       |   |   |       |   |   |       |   |   |       |   |   |       |   |   |      |   |   |       |   |
| Change in        the fair value of cash flow hedge derivatives net of tax        effect                                                                                          | (32)   |   |      |   |   |    |   |   |      |   |   | 223      |   |   |   |   |   |      |   |   |      |   |   |       |   |   |       |   |   |       |   |   |       |   |   | 223        |   |   |      |   |   | 223        |   |
| Change in the fair value of available-for-sale        securities net of tax effect                                                                                               | (32)   |   |      |   |   |    |   |   |      |   |   |     |   |   | (5     | )      |   |      |   |   |      |   |   |       |   |   |       |   |   |       |   |   |       |   |   | (5         | )      |   |      |   |   | (5         | )      |
| Share of        "Other comprehensive income" on        equity-accounted entities                                                                                       | (32)   |   |      |   |   |    |   |   |      |   |   |     |   |   |   |   |   | (12       | )      |   |      |   |   |       |   |   |       |   |   |       |   |   |       |   |   | (12        | )      |   | (1        | )      |   | (13        | )      |
| Foreign currency translation differences                                                                                                                                         |   |   |      |   |   |    |   |   |      |   |   |     |   |   |   |   |   |      |   |   | 1,000     |   |   |       |   |   | 31         |   |   |       |   |   |       |   |   | 1,031      |   |   |      |   |   | 1,031      |   |
|                                                                                                                                                                             |   |   |      |   |   |    |   |   |      |   |   | **223**  |   |   | **(5** | **)**  |   | **(12**   | **)**  |   | **1,000** |   |   |       |   |   | **31**     |   |   |       |   |   |       |   |   | **1,237**  |   |   | **(1**    | **)**  |   | **1,236**  |   |
| **Total recognized income and (expense) for 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)                                                                                                            |   |   |      |   |   |    |   |   |      |   |   |     |   |   |   |   |   |      |   |   |      |   |   |       |   |   |       |   |   | (1,884     | )      |   |       |   |   | (1,884     | )      |   |      |   |   | (1,884     | )      |
| Dividend distribution of other companies                                                                                                                                         |   |   |      |   |   |    |   |   |      |   |   |     |   |   |   |   |   |      |   |   |      |   |   |       |   |   |       |   |   |       |   |   |       |   |   |       |   |   | (571      | )      |   | (571       | )      |
| Payments        by minority shareholders                                                                                                                                         |   |   |      |   |   |    |   |   |      |   |   |     |   |   |   |   |   |      |   |   |      |   |   |       |   |   |       |   |   |       |   |   |       |   |   |       |   |   | 26        |   |   | 26         |   |
| Allocation of 2010 net profit                                                                                                                                                    |   |   |      |   |   |    |   |   |      |   |   |     |   |   |   |   |   |      |   |   |      |   |   |       |   |   | 2,696      |   |   |       |   |   | (2,696     | )      |   |       |   |   |      |   |   |       |   |
| Acquisition        of non-controlling interest relating to Altergaz SA and        Tigaz Zrt                                                                                      | (32)   |   |      |   |   |    |   |   |      |   |   |     |   |   |   |   |   | (94       | )      |   |      |   |   |       |   |   | (25        | )      |   |       |   |   |       |   |   | (119       | )      |   | (7        | )      |   | (126       | )      |
| Effect related to the purchase of Italgas SpA by        Snam Rete Gas 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 Rete Gas managers                                                                         | (32)   |   |      |   |   |    |   |   |      |   |   |     |   |   |   |   |   | 14        |   |   |      |   |   |       |   |   | (10        | )      |   |       |   |   |       |   |   | 4          |   |   | 13        |   |   | 17         |   |
| Non-controlling        interest excluded following the sale of Eni 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** |   |
|                                                                                                                                                                             |   |   |           |        |   |         |        |   |           |        |   |          |        |   |        |        |   |           |        |   |           |        |   |            |        |   |            |        |   |            |        |   |            |        |   |            |        |   |           |        |   |            |        |

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##### Table of Contents

**CONSOLIDATED STATEMENTOF CASH FLOWS******(euro million)**

|   |   |    ** ****Note**** ** |   | **2009** |   | **2010** |   | **2011** |
|--------|--------|------------------------------------------------|--------|----------|--------|----------|--------|----------|
|   |   |                                                |   |          |   |          |   |          |

| Net profit of the year                                                                                       |   |   |   | 5,317       |   |   | 7,383       |   |   | 7,803       |   |
|--------------------------------------------------------------------------------------------------------------|--------|--------|--------|-------------|--------|--------|-------------|--------|--------|-------------|--------|
| **Adjustments        to reconcile net profit to net cash provided by operating        activities**           |   |   |   |        |   |   |        |   |   |        |   |
| Depreciation, depletion and amortization                                                                     |   | (36)   |   | 8,762       |   |   | 8,881       |   |   | 8,297       |   |
| Impairments        of tangible and intangible assets, net                                                    |   | (36)   |   | 1,051       |   |   | 698         |   |   | 1,021       |   |
| Share of (profit) loss of equity-accounted        investments                                                |   | (38)   |   | (393        | )      |   | (537        | )      |   | (544        | )      |
| Gain on        disposal of assets, net                                                                       |   |   |   | (226        | )      |   | (552        | )      |   | (1,170      | )      |
| Dividend income                                                                                              |   | (38)   |   | (164        | )      |   | (264        | )      |   | (659        | )      |
| Interest        income                                                                                       |   |   |   | (352        | )      |   | (96         | )      |   | (101        | )      |
| Interest expense                                                                                             |   |   |   | 603         |   |   | 571         |   |   | 737         |   |
| Income taxes                                                                                                 |   | (39)   |   | 6,756       |   |   | 9,157       |   |   | 10,674      |   |
| Other changes                                                                                                |   |   |   | (319        | )      |   | (39         | )      |   | 331         |   |
| *Changes in        working capital:*                                                                         |   |   |   |        |   |   |        |   |   |        |   |
| - inventories                                                                                                |   |   |   | 52          |   |   | (1,150      | )      |   | (1,422      | )      |
| - trade        receivables                                                                                   |   |   |   | 1,431       |   |   | (1,918      | )      |   | (369        | )      |
| - trade payables                                                                                             |   |   |   | (2,559      | )      |   | 2,770       |   |   | 161         |   |
| - provisions        for contingencies                                                                        |   |   |   | 517         |   |   | 588         |   |   | 122         |   |
| - other assets and liabilities                                                                               |   |   |   | (636        | )      |   | (2,010      | )      |   | (668        | )      |
| *Cash flow        from changes in working capital*                                                           |   |   |   | *(1,195*    | *)*    |   | *(1,720*    | *)*    |   | *(2,176*    | *)*    |
| Net change in the provisions for employee        benefits                                                    |   |   |   | 16          |   |   | 21          |   |   | (10         | )      |
| Dividends        received                                                                                    |   |   |   | 576         |   |   | 799         |   |   | 997         |   |
| Interest received                                                                                            |   |   |   | 594         |   |   | 126         |   |   | 100         |   |
| Interest paid                                                                                                |   |   |   | (583        | )      |   | (600        | )      |   | (893        | )      |
| Income taxes paid, net of tax receivables        received                                                    |   |   |   | (9,307      | )      |   | (9,134      | )      |   | (10,025     | )      |
| **Net cash        provided by operating activities**                                                         |   |   |   | **11,136**  |   |   | **14,694**  |   |   | **14,382**  |   |
| *- of which with related parties*                                                                            |   | (42)   |   | *(1,188*    | *)*    |   | *(1,749*    | *)*    |   | *(186*      | *)*    |
| Investing        activities:                                                                                 |   |   |   |        |   |   |        |   |   |        |   |
| - tangible assets                                                                                            |   | (14)   |   | (12,032     | )      |   | (12,308     | )      |   | (11,658     | )      |
| - intangible        assets                                                                                   |   | (16)   |   | (1,663      | )      |   | (1,562      | )      |   | (1,780      | )      |
| - consolidated subsidiaries and businesses                                                                   |   | (33)   |   | (25         | )      |   | (143        | )      |   | (115        | )      |
| - investments                                                                                                |   | (17)   |   | (230        | )      |   | (267        | )      |   | (245        | )      |
| - securities                                                                                                 |   |   |   | (2          | )      |   | (50         | )      |   | (62         | )      |
| - financing        receivables                                                                               |   |   |   | (972        | )      |   | (866        | )      |   | (715        | )      |
| - change in payables and receivables in relation        to investing activities and capitalized depreciation |   |   |   | (97         | )      |   | 261         |   |   | 379         |   |
| *Cash flow        from investing activities*                                                                 |   |   |   | *(15,021*   | *)*    |   | *(14,935*   | *)*    |   | *(14,196*   | *)*    |
| Disposals:                                                                                                   |   |   |   |        |   |   |        |   |   |        |   |
| - tangible        assets                                                                                     |   |   |   | 111         |   |   | 272         |   |   | 154         |   |
| - intangible assets                                                                                          |   |   |   | 265         |   |   | 57          |   |   | 41          |   |
| -        consolidated subsidiaries and businesses                                                            |   | (33)   |   |        |   |   | 215         |   |   | 1,006       |   |
| - investments                                                                                                |   |   |   | 3,219       |   |   | 569         |   |   | 711         |   |
| - securities                                                                                                 |   |   |   | 164         |   |   | 14          |   |   | 128         |   |
| - financing receivables                                                                                      |   |   |   | 861         |   |   | 841         |   |   | 695         |   |
| - change in        payables and receivables in relation to disposals                                         |   |   |   | 147         |   |   | 2           |   |   | 243         |   |
| *Cash flow from disposals*                                                                                   |   |   |   | *4,767*     |   |   | *1,970*     |   |   | *2,978*     |   |
| **Net cash        used in investing activities**                                                             |   |   |   | **(10,254** | **)**  |   | **(12,965** | **)**  |   | **(11,218** | **)**  |
| *- of which with related parties*                                                                            |   | (42)   |   | *(1,262*    | *)*    |   | *(1,626*    | *)*    |   | *(800*      | *)*    |
|                                                                                                         |   |        |   |             |        |   |             |        |   |             |        |

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##### Table of Contents

**CONSOLIDATED STATEMENT OFCASH FLOWS*****continued*****(euro million)**

|   |   |    ** ****Note**** ** |   | **2009** |   | **2010** |   | **2011** |
|--------|--------|------------------------------------------------|--------|----------|--------|----------|--------|----------|
|   |   |                                                |   |          |   |          |   |          |

| Proceeds from long-term debt                                                                                    |   | (26)   |   | 8,774      |   |   | 2,953      |   |   | 4,474      |   |
|-----------------------------------------------------------------------------------------------------------------|--------|--------|--------|------------|--------|--------|------------|--------|--------|------------|--------|
| Repayments        of long-term debt                                                                             |   | (26)   |   | (2,044     | )      |   | (3,327     | )      |   | (889       | )      |
| Increase (decrease) in short-term debt                                                                          |   | (21)   |   | (2,889     | )      |   | 2,646      |   |   | (2,481     | )      |
|                                                                                                            |   |   |   | **3,841**  |   |   | **2,272**  |   |   | **1,104**  |   |
| Net capital contributions by non-controlling        interest                                                    |   |   |   | 1,551      |   |   |       |   |   | 26         |   |
| Sale of        treasury shares                                                                                  |   |   |   |       |   |   |       |   |   | 3          |   |
| Net acquisition of treasury shares different        from Eni SpA                                                |   |   |   | 9          |   |   | 37         |   |   | 17         |   |
| Acquisition        of additional interests in consolidated subsidiaries                                         |   |   |   | (2,068     | )      |   |       |   |   | (126       | )      |
| Dividends paid to Eni’s shareholders                                                                       |   |   |   | (4,166     | )      |   | (3,622     | )      |   | (3,695     | )      |
| Dividends        paid to non-controlling interest                                                               |   |   |   | (350       | )      |   | (514       | )      |   | (552       | )      |
| **Net cash used in financing activities**                                                                       |   |   |   | **(1,183** | **)**  |   | **(1,827** | **)**  |   | **(3,223** | **)**  |
| *- of        which with related parties*                                                                        |   | (42)   |   | *(14*      | *)*    |   | *(23*      | *)*    |   | *348*      |   |
| Effect of change in consolidation        (inclusion/exclusion of significant/insignificant        subsidiaries) |   |   |   |       |   |   |       |   |   | (7         | )      |
| Effect of        exchange rate changes on cash and cash equivalents and        other changes                    |   |   |   | (30        | )      |   | 39         |   |   | 17         |   |
| **Net cash flow of the year**                                                                                   |   |   |   | **(331**   | **)**  |   | **(59**    | **)**  |   | **(49**    | **)**  |
| **Cash        and cash equivalents - beginning of the year**                                                    |   | (7)    |   | **1,939**  |   |   | **1,608**  |   |   | **1,549**  |   |
| **Cash and cash equivalents - end of the year**                                                                 |   | (7)    |   | **1,608**  |   |   | **1,549**  |   |   | **1,500**  |   |
|                                                                                                            |   |        |   |            |        |   |            |        |   |            |        |

 

 

 

F-11

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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 (IASB)1. Oil and natural gasexploration and production activity is accounted for inconformity with internationally accepted accounting principles.Specifically, this concerns the determination of the amortizationexpenses using the unit-of-production method and the recognitionof the production-sharing agreement and buy-back contracts. TheConsolidated Financial Statements have been prepared on anhistorical 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 significant2economic 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 2011 Consolidated Financial Statements approvedby Eni’s Board of Directors on March 15, 2012, 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. When acquired, the net equity ofsubsidiaries is initially recognized at fair value. The excess ofthe purchase price of an acquired entity over the total fairvalue assigned to assets acquired and liabilities assumed isrecognized as goodwill; negative goodwill is recognized in theprofit 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 includes the goodwill attributable to them3.The method 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 summing the fair value of previously heldequity interest and the consideration transferred for theacquisition of control; the previously held 

----

| (1) |    | Related party        disclosures have been prepared according to the        provisions of IAS 24 "Related Party        Disclosures", effective starting from 2011, that        enhance the definition of related party and the        disclosure to be reported.        |
|-----|--------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| (2) |    | 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. |
| (3) |    | 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).                        |

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##### Table of Contents

equity interest is remeasured at its acquisition date fairvalue and the resulting gain or loss is recognized in profit orloss account. The purchase of additional equity interests insubsidiaries from non-controlling interests is recognized inequity and represents the excess of the amount paid over thecarrying value of the non-controlling interests acquired;similarly, the effects of the sale of non-controlling interestsin subsidiaries without loss of control are recognized in equity.

**Inter-company transactions**Inter-company transactions and balances, including unrealizedprofits arising from intra-group transactions have beeneliminated. Unrealized losses are not eliminated because theyprovide evidence of an impairment of the asset transferred.

**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 US dollar is the prevalent functionalcurrency for the entities that do not use the euro. The mainforeign exchange rates used to translate the financial statementsadopting a different functional currency are indicated below:

| (currency        amount for euro 1) | **Annual average        exchange rate 2009** |   | **Exchange rate at         Dec. 31, 2009** |   | **Annual average        exchange rate 2010** |   | **Exchange rate at         Dec. 31, 2010** |   | **Annual average        exchange rate 2011** |   | **Exchange rate at         Dec. 31, 2011** |
|-------------------------------------|----------------------------------------------|--------|--------------------------------------------|--------|----------------------------------------------|--------|--------------------------------------------|--------|----------------------------------------------|--------|--------------------------------------------|
|                                |                                              |   |                                            |   |                                              |   |                                            |   |                                              |   |                                            |

| U.S. Dollar              |   | 1.39   |   | 1.44   |   | 1.33   |   | 1.34   |   | 1.39   |   | 1.29   |
|--------------------------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|
| Pound        Sterling    |   | 0.89   |   | 0.89   |   | 0.86   |   | 0.86   |   | 0.87   |   | 0.84   |
| Norwegian Krone          |   | 8.73   |   | 8.30   |   | 8.00   |   | 7.80   |   | 7.79   |   | 7.75   |
| Australian        Dollar |   | 1.77   |   | 1.60   |   | 1.44   |   | 1.31   |   | 1.35   |   | 1.27   |
| Hungarian Forint         |   | 280.33 |   | 270.42 |   | 275.48 |   | 277.95 |   | 279.37 |   | 314.58 |
|                     |   |        |   |        |   |        |   |        |   |        |   |        |

 

**3 Summary of significant accounting policies**

The most significant accounting policies used in thepreparation of the Consolidated Financial Statements aredescribed below.

**Current assets******Held for trading financial assets andavailable-for-sale financial assets are measured at fair valuewith gains or losses recognized in the profit and loss accountunder "Financial income (expense)"4 and tothe equity reserve related to other comprehensive income,respectively. Changes in fair value of available-for-salefinancial assets recognized in equity are charged to the profitand loss account when the assets are derecognized or impaired.The objective evidence that an impairment loss has occurred isverified considering, interalia, significant breaches ofcontracts, serious financial difficulties or the risk ofinsolvency of the counterparty; asset write downs are included inthe carrying amount. Available-for-sale financial assets includefinancial assets other than derivative financial instruments,loans and receivables, held for trading financial assets andheld-to-maturity financial assets. The fair value of financialinstruments is determined by market quotations or, where there isno active market, it is estimated 

----

| (4) |    | Starting from        2009, changes in the fair value of non-hedging        derivatives on commodities, also including the effects of        settlements, are recognized in the profit and loss        account item "Other operating income        (expense)". |
|-----|--------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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adopting suitable financial valuation models which take intoaccount all the factors adopted by market operators and pricesobtained in similar recent transactions in the market.

Interests and dividends on financial assets stated at fairvalue are accounted for on an accrual basis in "Financialincome (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 Petrochemical segment is determinedby applying 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".

 

**Non-current assets**

**Property, plant and equipment**5Tangible 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.

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| (5) |    | Recognition        and evaluation criteria of exploration and production        activities are described in the section "Exploration        and production activities" below. |
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Changes in estimate of the carrying amounts of provisions dueto the passage of time and changes in discount rates arerecognized under "Provisions for contingencies"6.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, improvementsand transformations which provide additional economic benefitsare capitalized to property, plant and equipment. Tangibleassets, from the moment they begin or should begin to be used,are depreciated systematically using a straight-line method overtheir useful life which is an estimate of the period over whichthe assets will be used by the company. When tangible assets arecomposed of more than one significant element with differentuseful lives, each component is depreciated separately.

The amount to be depreciated is the book value less theestimated net realizable value at the end of the useful life, ifit is significant and can be reasonably determined. Land is notdepreciated, even when purchased with a building. Tangible assetsheld for sale are not depreciated (see item "Non-currentassets held for sale" below).

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. Cash flows are determined on the basis of reasonable anddocumented assumptions that represent the best estimate of thefuture economic conditions during the remaining useful life ofthe asset, giving more importance to independent assumptions.Oil, natural gas and petroleum products prices (and to prices forproducts which derive there from) used to quantify the expectedfuture cash flows are estimated based on forward pricesprevailing 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 individual operating segments; in particular forthe assets belonging to the Gas & Power and Engineering &Construction segments, taking into account their different riskcompared with Eni, specific WACC rates have been defined (for Gas& Power segment on the basis of a sample of companiesoperating in the same segment; for Engineering & Constructionsegment on the basis of the market quotation); WACC used forimpairments in the Gas & Power segment is adjusted to takeinto consideration the risk premium of the specific Country ofthe activity while WACC used for impairments in the Engineering& Construction segment is not adjusted for Country risk asmost of the assets are not located in a specific Country. For theregulated activities, the discount rate used for the measurementof the value in use is equal to the rate return defined by theRegulator. 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.

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| (6) |    | The company        recognizes material provisions for the retirement of        assets in the Exploration & Production business. 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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**Intangible assets**Intangible assets are identifiable assets without physicalsubstance, controlled by the company and able to produce futureeconomic 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 otherintangible assets with an indefinite useful life are notamortized. The recoverability of their carrying value is reviewedat least annually and whenever events or changes in circumstancesindicate that the carrying value may not be recoverable. Goodwillis tested for impairment at the lowest level within the entity atwhich it is monitored for internal management purposes. When thecarrying amount of the cash generating unit, including goodwillallocated thereto, exceeds the cash generating unit’srecoverable amount7, the excess is recognized asimpairment. 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 reversed8. Costs oftechnological development activities are capitalized when: (i)the cost attributable to the development activity can be reliablydetermined; (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: (i) the grantor controls or regulates what services theoperator must provide with the infrastructure, and at what price;and (ii) the grantor controls – by the ownership, beneficialentitlement or otherwise – any significant residual interestin the infrastructure 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 service9.

 

**Exploration and production activities**10

*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.

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| (7)  |    | For the        definition of recoverable amount see item "Property,        plant and equipment".                                                                                                                                                                                                                                             |
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| (8)  |    | 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.                                                                               |
| (9)  |    | 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.                               |
| (10) |    | 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". |

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*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.

*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.

 

**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. Distributions received from an investee arerecorded as a reduction of the carrying amount of the investment.In applying the equity method, consolidations adjustments areconsidered (see also "Principles of consolidation"paragraph). When there is objective evidence of impairment (seealso section "Current assets"), the recoverability istested by comparing the carrying amount and the relatedrecoverable amount determined by adopting the criteria indicatedin the section "Property, plant and equipment".Subsidiaries excluded from consolidation, jointly controlledentities and associates are accounted for at cost, adjusted forimpairment losses if this does not result in a misrepresentationof the company’s financial condition. When the reasons fortheir impairment cease to exist, investments accounted for atcost are revalued within the limit of the impairment made andtheir effects are included in "Other gain (loss) frominvestments". Other investments, included in non-currentassets, are recognized at their fair value and their effects areincluded in the equity reserve related to other comprehensiveincome; the changes in fair value recognized in equity arecharged to the profit and loss account when it is impaired orrealized. When investments are not traded in a public market and 

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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. |
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their fair value cannot be reasonably determined, they areaccounted for at cost, adjusted for impairment losses; impairmentlosses shall 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 utilized against charges; any amount in excess is reversed toprofit. Changes to the carrying amount of receivables orfinancial assets in accordance with the amortized cost method arerecognized as “Financial income (expense)”.

**Non-current assets held for sale**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 theother assets and liabilities. Non-current assets held for saleare not depreciated and they are measured at the lower of thefair value less costs to sell and their carrying amount. Theclassification as held for sale of equity-accounted investmentsdetermines the interruption of equity method accounting;therefore, in this case, the book value of the investment inaccordance with the equity method represents the carrying amountfor the measurement as non-current assets held-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.

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 beretained after 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.

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| (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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**Provisions for 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), with a corresponding entry tothe assets to which they refer. In the Note 27, the followingcontingent liabilities are described: (i) possible, but notprobable obligations arising from past events, whose existencewill be confirmed only by the occurrence or non-occurrence of oneor more uncertain future events not wholly within thecompany’s control; and (ii) present obligations arising frompast events whose amount cannot be reliably measured or whosesettlement will probably not result in an outflow of resourcesembodying 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 are taken to the profit or loss in their entirety.

**Treasury shares**Treasury shares are recognized as deductions from equity atcost. Gains or losses resulting from subsequent sales arerecognized 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; |
| • |   | 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 

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producers are recognized on the basis of Eni’s networking interest in those properties (entitlement method).Differences between Eni’s net working interest volume andactual production volumes are recognized at current prices atyear-end. Income related to partially rendered services isrecognized in the measurement of accrued income if the stage ofcompletion can be reliably determined and there is no significantuncertainty as to the collectability of the amount and therelated costs. When the outcome of the transaction cannot beestimated reliably, revenue is recognized only to the extent ofthe 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 length of the supply and the useful life ofthe transferred asset. Revenues are measured at the fair value ofthe consideration received or receivable net of returns,discounts, rebates, bonuses and direct taxation. Award credits,related to customer loyalty programs, are recognized as aseparate component of the sales transaction which grant the rightto customers. Therefore, the portion of revenues related to thefair value of award credits granted is recognized as an offset tothe item "Other liabilities". The liability is chargedto the profit and loss account in the period in which the awardcredits are redeemed by customers or the related right is lost.The exchange of goods and services of a similar nature and valuedo not give rise to revenues and costs as they do not representsale transactions. 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 average prices of the main European markets atperiod end, are recognized in relation to the amount of thecarbon dioxide emissions that exceed the amount assigned. Costsrelated to the purchase of the emission rights are recorded asintangible assets net of any negative difference between theamount of emissions and the quotas assigned. Revenues related toemission quotas are recognized when they are realized through asale transaction. In case of sale, if applicable, the acquiredemission rights are considered as the first to be sold. Monetaryreceivables granted as a substitution of emission rights awardedfree of charge are recognized as an offset to item "Otherincome" of the profit and loss account. Operating leasepayments are recognized in the profit and loss account over thelength of the contract. Labor costs include stock options grantedto managers, consistent with their actual remunerative nature.The instruments granted are recorded at fair value on the vestingdate and are not subject to subsequent adjustments; the currentportion is calculated pro-rata over the vesting period13.The fair value of stock options is determined using valuationtechniques which consider conditions related to the exercise ofoptions, current share prices, expected volatility and therisk-free interest rate. The fair value of stock options isrecorded as a charge to "Other reserves". The costs forthe acquisition of new knowledge or discoveries, the study ofproducts or alternative processes, new techniques or models, theplanning and construction of prototypes or, in any case, costsincurred for other scientific research activities ortechnological development, which cannot be capitalized (see item"Intangible assets" above), are included in the profitand loss account.

**Exchange rate differences**Revenues and costs associated with transactions in currenciesother than the functional currency are translated into thefunctional currency by applying the exchange rate at the date ofthe transaction. Monetary assets and liabilities denominated incurrencies 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.

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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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**Income taxes**Current income taxes are determined on the basis ofestimated taxable 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 realization is considered probable. 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 taxliabilities". When the results of transactions arerecognized directly in shareholders’ equity, current taxes,deferred tax assets and liabilities are also charged to theshareholders’ equity.

**Derivatives**Derivatives, including embedded derivatives which areseparated from the host contract, are assets and liabilitiesrecognized at their fair value which is estimated by using thecriteria described in the section "Current assets".When there is objective evidence that an impairment loss hasoccurred for reasons different from fair value decreases (seeitem "Current assets") derivative are recognized net ofthe allowance for impairment losses. Derivatives are designatedas hedging instruments when the relationship between thederivative and the hedged item is formally documented and thehedge is highly effective and regularly reviewed. When hedginginstruments hedge the risk of changes of the fair value of thehedged item (fair value hedge, e.g. hedging of the variability onthe fair value of fixed interest rate assets/liabilities) thederivatives are recognized at fair value and the effects chargedto the profit and loss account. Hedged items are consistentlyadjusted to reflect the variability of fair value associated withthe hedged risk. When derivatives hedge the cash flow variabilityrisk of the hedged item (cash flow hedge, e.g. hedging thevariability on the cash flows of assets/liabilities as a resultof the fluctuations of exchange rate), changes in the fair valueof the derivatives, considered effective, are initiallyrecognized in equity and then in the profit and loss accountconsistently with the economic effects produced by the hedgedtransaction. The changes in the fair value of derivatives that donot meet the conditions required to qualify for hedge accountingare reported in the profit and loss account. 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 FinancialStatements requires the use of estimates and assumptions thataffect the assets, liabilities, revenues and expenses reported inthe financial statements, as well as amounts included in thenotes thereto, including discussion and disclosure of contingentliabilities. Estimates made are based on 

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| (14) |    | The financial        statements are the same reported in the Annual Report        2010.                                                                                                                                              |
|------|--------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| (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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complex or subjective judgments and past experience of otherassumptions deemed reasonable in consideration of the informationavailable at the time. The accounting policies and areas thatrequire the most significant judgments and estimates to be usedin the preparation of the Consolidated Financial Statements arein relation to the accounting for oil and natural gas activities,specifically in the determination of proved and proved developedreserves, impairment of fixed assets, intangible assets andgoodwill, asset retirement obligations, business combinations,pensions and other post-retirement benefits, recognition ofenvironmental liabilities and recognition of revenues in theoilfield services construction and engineering businesses.Although the company uses its best estimates and judgments,actual results could differ from the estimates and assumptionsused. A summary of significant estimates 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**Tangible assets and intangible assets, including goodwill,are impaired when there are events or changes in circumstancesthat indicate the carrying values of the assets are notrecoverable. Such impairment indicators include changes in theGroup’s business plans, changes in commodity prices leadingto unprofitable performance, a reduced utilization of the plantsand, for oil and gas properties, significant downward revisionsof estimated proved reserve quantities or significant increase ofthe estimated development costs. Determination as to whether andhow much an asset is impaired involves management estimates onhighly uncertain and complex matters such as future commodityprices, the effects of inflation and technology improvements onoperating expenses, production profiles and the outlook forglobal or regional market supply and demand conditions for crudeoil, natural gas, commodity chemicals and refined products.Similar remarks are valid for the physical recoverability ofassets recognized in the balance sheet (deferred costs – seealso item "Current assets") related to natural gasvolumes not collected under long-term purchase contracts withtake-or-pay clauses. The amount of an impairment loss isdetermined by comparing the book value of an asset with itsrecoverable amount. The recoverable amount is the greater of fairvalue net of disposal cost or the value in use. The estimatedvalue in use is based on the present values of expected futurecash flows net of disposal costs. The expected future cash flowsused for impairment analyses are based on judgmental assessmentsof future production volumes, prices and costs, consideringavailable information at the date of review and are discounted byusing a rate related to the activity involved. For oil andnatural gas properties, the expected future cash flows areestimated principally based on developed and non-developed provedreserves including, among other elements, production taxes andthe costs to be incurred for the reserves yet to be developed. 

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Oil, natural gas and petroleum product prices (and prices fromproducts which are derived there from) used to quantify theexpected future cash flows are estimated based on forward pricesprevailing in the marketplace for the first four years andmanagement’s long-term planning assumptions thereafter. Theestimate of the future amount of production is based onassumptions related to the commodity future prices, lifting anddevelopment costs, field decline rates, market demand and otherfactors. The discount rate reflects the current market valuationof the time value of money and of the specific risks of the assetnot reflected in the estimate of the future cash flows. Goodwilland other intangible assets with an indefinite useful life arenot subject to amortization. The Company tests for impairmentsuch assets at the cash-generating unit level on an annual basisand whenever there is an indication that they may be impaired. Inparticular, goodwill impairment is based on the lowest level(cash generating unit) to which goodwill can be allocated on areasonable and consistent basis. A cash generating unit is thesmallest aggregate on which the Company, directly or indirectly,evaluates the return on the capital expenditure. If therecoverable amount of a cash generating unit is lower than thecarrying amount, goodwill attributed to that cash generating unitis impaired up to that difference; if the carrying amount ofgoodwill is less than the amount of impairment, assets of thecash generating unit are impaired pro-rata on the basis of theircarrying amount for the residual 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 increased 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 Decree No.471/1999 of the Ministry for the Environment concerning theremediation of contaminated sites; (iii) the possible effects offuture environmental legislations and rules; (iv) the effects ofpossible technological changes relating to future remediation;and (v) the possibility of litigation and the difficulty ofdetermining Eni’s liability, if any, against otherpotentially responsible parties with respect to such litigationsand the possible insurance recoveries.

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**Provisions for 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 by Country; (ii) the future salary levels of theindividual employees are determined including an estimate offuture changes attributed to general price levels (consistentwith inflation rate assumptions), productivity, seniority andpromotion; (iii) healthcare cost trend assumptions reflect anestimate of the actual future changes in the cost of thehealthcare related benefits provided to the plan participants andare based on past and current healthcare cost trends includinghealthcare inflation, changes in healthcare utilization andchanges in health 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 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 & Constructionsegment**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.

 

 

**6 Recent accounting principles**

**Accounting standards and interpretations issued by IASB/IFRIC and endorsed by EU**By Commission Regulation No. 1205/2011 of November 22, 2011,the Amendments to IFRS 7 "Disclosures - Transfers offinancial assets" have been endorsed. The document providessupplementary disclosures on financial instruments, withreference to transfers of financial assets, to describe any risksthat may remain with the entity that transferred the assets. Theamendments also require additional disclosures if adisproportionate amount of transfer transactions are undertakenaround the end of a reporting period. The new provisions shall beapplied for annual periods beginning on or after July 1, 2011(for Eni: 2012 financial statements).

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**Accounting standards and interpretations issued byIASB/IFRIC and not yet been endorsed by 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,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. Newprovisions also require that investments in equity instruments,other than subsidiaries, jointly controlled entities orassociates, shall be measured at fair value with effects taken tothe profit and loss account. If these investments are not heldfor trading purposes, subsequent changes in the fair value can berecognized in other comprehensive income, even if dividends aretaken to the profit and loss account. Amounts taken to othercomprehensive income shall not be subsequently transferred to theprofit or loss account even at disposal. In addition, on October28, 2010, the IASB updated IFRS 9 by incorporating therecognition and measurement criteria of financial liabilities. Inparticular, new provisions require, interalia, that if afinancial liability is measured at fair value through profit orloss, subsequent changes in the fair value attributable tochanges in the own credit risk shall be presented in othercomprehensive income; the component related to own credit risk isrecognized in profit and loss account if the treatment of thechanges in own credit risk would create or enlarge an accountingmismatch. On December 16, 2011, the IASB issued the document"Mandatory effective date and transition disclosures"which defer the effective date of IFRS 9 provisions to annualperiods beginning on or after January 1, 2015 (previously January1, 2013).

On May 12, 2011, the IASB issued IFRS 10 "ConsolidatedFinancial Statements" (hereinafter "IFRS 10") andthe revised IAS 27 "Separate Financial Statements"(hereinafter "IAS 27") which respectively stateprinciples for presentation and preparation of consolidated andseparate financial statements. IFRS 10 provisions provide,interalia, a new definition of control to be consistently appliedto all entities (including vehicles). According to thisdefinition, an entity controls an investee when it is exposed, orhas rights, to its (positive and negative) returns from itsinvolvement and has the ability to affect those returns throughits power over the investee. The standard provides someindicators to be considered assessing control which include,interalia, potential voting rights, protective rights, thepresence of agency relationships and franchise agreements.Furthermore, the new provisions acknowledge the existence ofcontrol of an investee even if the investor holds less thanmajority of voting rights due to shareholding dispersion orpassive attitude of other shareholders. IFRS 10 and the revisedIAS 27 shall be applied for annual periods beginning on or afterJanuary 1, 2013.

On May 12, 2011, the IASB issued IFRS 11 "JointArrangements" (hereinafter "IFRS 11") and therevised IAS 28 "Investments in Associates and JointVentures" (hereinafter "IAS 28"). Depending on therights and obligations of the parties arising from arrangements,IFRS 11 classifies 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. The revised IAS 28defines, interalia, the accounting treatment to adopt in case ofthe disposal of an interest, or a portion of an interest, in ajoint venture or an associate. IFRS 11 and the revised IAS 28shall be applied for annual periods beginning on or after January1, 2013.

On May 12, 2011, the IASB issued IFRS 12 "Disclosure ofInterests in Other Entities" (hereinafter "IFRS12") combine all the disclosures to be provided in financialstatements regarding subsidiaries, joint arrangements, associatesand unconsolidated structured entities. IFRS 12 shall be appliedfor annual periods beginning on or after January 1, 2013.

On May 12, 2011, the IASB issued IFRS 13 "Fair ValueMeasurement" (hereinafter "IFRS 13") in order todefine a framework for fair value measurements, required orpermitted by other IFRSs, and the required disclosures about fairvalue measurements. Fair value is defined as the price that wouldbe received to sell an asset (or paid to transfer a liability) inan orderly transaction between market participants. IFRS 13 shallbe applied for annual periods beginning on or after January 1,2013.

On June 16, 2011, the IASB issued Amendments to IAS 1"Presentation of Items of Other Comprehensive Income"which require, interalia, entities to group, within othercomprehensive income, items on the basis of whether they arepotentially reclassifiable to profit or loss account subsequentlyaccording to applicable IFRSs (reclassification adjustments). Theamendments shall be applied for annual periods beginning on orafter July 1, 2012 (for Eni: 2013 financial statements).

On June 16, 2011, the IASB issued the revised IAS 19“Employee Benefits” that requires, interalia: (i) torecognize actuarial gains and losses in other comprehensiveincome, eliminating the possibility to apply the corridor method.Actuarial gains and losses recognized in other comprehensiveincome will not be recycled through profit or loss account insubsequent periods; and (ii) to replace the separate presentationof the expected return on plan assets and the interest cost, withnet interest expense or income. This aggregate is measuredapplying to the net defined benefit liabilities the discount rateused to measure the obligation. The new provisions require,interalia, additional

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disclosures with reference to defined benefit plans. Therevised IAS 19 shall be applied for annual periods beginning onor after January 1, 2013.

On December 16, 2011, the IASB issued Amendments to IAS 32"Offsetting Financial Asset and Financial Liabilities"(hereinafter "Amendments to IAS 32") and Amendments toIFRS 7 "Disclosures - Offsetting Financial Assets andFinancial Liabilities" (hereinafter "Amendments to IFRS7") which respectively state the requirements for offsettingfinancial assets and financial liabilities and the relateddisclosures. In particular, the Amendments to IAS 32 state that:(i) in order to set off financial assets and liabilities, theright of set-off must be legally enforceable in allcircumstances, or in the normal course of business, or in theevent of default, or in the event of insolvency or bankruptcy, ofone or all of the counterparties; and (ii) in presence ofspecific characteristics, the gross simultaneous settlement offinancial assets and liabilities that eliminate or result ininsignificant credit and liquidity risk may be consideredequivalent to net settlement. The amendments to IAS 32 shall beapplied for annual periods beginning on or after January 1, 2014.The amendments to IFRS 7 shall be applied for annual periodsbeginning on or 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 1,500 million (euro1,549 million at December 31, 2010) included financingreceivables originally due within 90 days amounting to euro 323million (euro 339 million at December 31, 2010). The latter wererelated to amounts on deposit with financial institutionsaccessible only on a 48-hour notice. The average maturity offinancing receivables due within 90 days was 26 days and theaverage effective interest rate amounted to 1.1%.

**8 Other financial assets held for tradingor available for sale**Other financial assets held for trading oravailable for sale are set out below:

| (euro million) |   | **Dec. 31, 2010** |   | **Dec. 31, 2011** |
|----------------|--------|-------------------|--------|-------------------|
|           |   |                   |   |                   |

| **Securities held for operating purposes**                |   |    |   |    |
|-----------------------------------------------------------|--------|---------|--------|---------|
| Listed        bonds issued by sovereign states            |   | 211     |   | 173     |
| Listed securities issued by financial        institutions |   | 56      |   | 47      |
| Non-quoted        securities                              |   | 6       |   | 5       |
|                                                      |   | **273** |   | **225** |
| **Securities        held for non-operating purposes**     |   |    |   |    |
| Listed bonds issued by sovereign states                   |   | 87      |   | 16      |
| Listed        securities issued by financial institutions |   | 22      |   | 21      |
|                                                      |   | **109** |   | **37**  |
| **Total        securities**                               |   | **382** |   | **262** |
|                                                      |   |         |   |         |

Securities of euro 262 million (euro 382 million at December31, 2010) were available for sale. At December 31, 2010 andDecember 31, 2011, no financial assets were held for trading.

At December 31, 2011, bonds issued by sovereign statesamounted to euro 189 million. A break-down by country ispresented below: 

 

|   |   | **Nominal value**(euro million) |   | **Fair value**(euro million) |   | **Nominal rate         of return**(%) |   | **Maturity date** |
|--------|--------|---------------------------------|--------|------------------------------|--------|---------------------------------------|--------|-------------------|
|   |   |                                 |   |                              |   |                                       |   |                   |

| **Fixed rate bonds**            |   |    |   |    |   |              |   |              |
|---------------------------------|--------|---------|--------|---------|--------|-------------------|--------|-------------------|
| Belgium                         |   | 27      |   | 27      |   | from 2.88 to 4.25 |   | from 2014 to 2021 |
| Italy                           |   | 19      |   | 18      |   | from 3.75 to 5.25 |   | from 2013 to 2034 |
| Austria                         |   | 16      |   | 17      |   | from 3.25 to 3.50 |   | from 2013 to 2016 |
| Portugal                        |   | 24      |   | 15      |   | from 3.35 to 5.45 |   | from 2013 to 2019 |
| Ireland                         |   | 18      |   | 15      |   | from 3.90 to 4.50 |   | from 2012 to 2020 |
| Spain                           |   | 15      |   | 14      |   | from 2.75 to 4.10 |   | from 2012 to 2018 |
| Netherlands                     |   | 12      |   | 13      |   | from 4.00 to 4.25 |   | from 2013 to 2016 |
| Germany                         |   | 10      |   | 11      |   | from 3.25 to 4.25 |   | from 2014 to 2015 |
| France                          |   | 10      |   | 10      |   | 4.00              |   | from 2013 to 2014 |
| Finland                         |   | 6       |   | 6       |   | from 1.25 to 4.25 |   | from 2012 to 2015 |
| Sweden                          |   | 4       |   | 4       |   | 1.88              |   | 2012              |
| Slovakia                        |   | 3       |   | 3       |   | 4.20              |   | 2017              |
| United        States of America |   | 3       |   | 3       |   | 2.00              |   | 2012              |
| **Floating rate bonds**         |   |    |   |    |   |              |   |              |
| Italy                           |   | 31      |   | 31      |   |              |   | from 2012 to 2013 |
| Belgium                         |   | 2       |   | 2       |   |              |   | 2012              |
| **Total**                       |   | **200** |   | **189** |   |              |   |              |
|                            |   |         |   |         |   |                   |   |                   |

 

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The effects of fair value evaluation ofsecurities are set out below:

| (euro        million) |   | **Carrying amount at Dec.        31, 2010** |   | **Changes recognized in        equity** |   | **Carrying amount at Dec.        31, 2011** |
|-----------------------|--------|---------------------------------------------|--------|-----------------------------------------|--------|---------------------------------------------|
|                  |   |                                             |   |                                         |   |                                             |

| Fair value                                      |   | (3     | )      |   | (6     | )      |   | (9     | )      |
|-------------------------------------------------|--------|--------|--------|--------|--------|--------|--------|--------|--------|
| Deferred        tax liabilities                 |   |   |   |   | 1      |   |   | 1      |   |
| **Other reserves of shareholders’ equity** |   | **(3** | **)**  |   | **(5** | **)**  |   | **(8** | **)**  |
|                                            |   |        |        |   |        |        |   |        |        |

Securities held for operating purposes of euro 225 million(euro 273 million at December 31, 2010) were designed to hedgethe loss provisions of the Group’s insurance company EniInsurance Ltd for euro 220 million (euro 267 million at December31, 2010).

The break-down by currency of other financial assets held fortrading or available for sale is presented below: 

| (euro million) |   | **Dec. 31, 2010** |   | **Dec. 31, 2011** |
|----------------|--------|-------------------|--------|-------------------|
|           |   |                   |   |                   |

| Euro         |   | 308     |   | 193     |
|--------------|--------|---------|--------|---------|
| U.S. dollar  |   | 58      |   | 51      |
| Indian rupee |   | 16      |   | 18      |
|         |   | **382** |   | **262** |
|         |   |         |   |         |

The fair value of securities was calculated basing on quotedmarket prices.

**9 Trade and other receivables**The break-down of trade and other receivables ispresented below:

| (euro million) |   | **Dec. 31, 2010** |   | **Dec. 31, 2011** |
|----------------|--------|-------------------|--------|-------------------|
|           |   |                   |   |                   |

| **Trade receivables**                                                             |   | **17,221** |   | **17,709** |
|-----------------------------------------------------------------------------------|--------|------------|--------|------------|
| Financing        receivables:                                                     |   |       |   |       |
| - for operating purposes - short-term                                             |   | 436        |   | 468        |
| - for        operating purposes - current portion of long-term        receivables |   | 220        |   | 162        |
| - for non-operating purposes                                                      |   | 6          |   | 28         |
|                                                                              |   | **662**    |   | **658**    |
| Other receivables:                                                                |   |       |   |       |
| - from        disposals                                                           |   | 86         |   | 169        |
| - other                                                                           |   | 5,667      |   | 6,059      |
|                                                                              |   | **5,753**  |   | **6,228**  |
|                                                                              |   | **23,636** |   | **24,595** |
|                                                                              |   |            |   |            |

Receivables are stated net of the valuationallowance for doubtful accounts of euro 1,651 million (euro 1,524million at December 31, 2010):

| (euro        million) |   | **Carrying amount at Dec. 31, 2010** |   | **Additions** |   | **Deductions** |   | **Other changes** |   | **Carrying amount at Dec. 31, 2011** |
|-----------------------|--------|--------------------------------------|--------|---------------|--------|----------------|--------|-------------------|--------|--------------------------------------|
|                  |   |                                      |   |               |   |                |   |                   |   |                                      |

| Trade receivables            |   | 962       |   |   | 171     |   |   | (52     | )      |   | (14    | )      |   | 1,067     |   |
|------------------------------|--------|-----------|--------|--------|---------|--------|--------|---------|--------|--------|--------|--------|--------|-----------|--------|
| Financing        receivables |   | 6         |   |   |    |   |   |    |   |   |   |   |   | 6         |   |
| Other receivables            |   | 556       |   |   | 6       |   |   | (7      | )      |   | 23     |   |   | 578       |   |
|                         |   | **1,524** |   |   | **177** |   |   | **(59** | **)**  |   | **9**  |   |   | **1,651** |   |
|                         |   |           |        |   |         |        |   |         |        |   |        |        |   |           |        |

 

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During the course of the 2011, Eni transferred, withoutnotification to factoring institutions, certain trade receivableswithout recourse due by December 31, 2012, for euro 1,779 million(euro 1,279 million at December 31, 2010, due by December 31,2011). Transferred receivables mainly related to the Refining& Marketing segment (euro 1,353 million), the Gas & Powersegment (euro 377 million) and the Petrochemical segment (euro 49million). Following the contractual arrangements with thefinancing institutions, Eni collects the sold receivables andtransfers the collected amounts to the respective institutions.

Trade receivables increased by euro 488 million from theprior-year balance sheet date mainly in the Gas & Powersegment (euro 1,028 million) and the Refining & Marketingsegment (euro 103 million). Trade receivable decreased in theEngineering & Construction segment (down by euro 478million).

Trade and other receivables were as follows:

|   |   | **Dec. 31, 2010** |   | **Dec. 31, 2011** |
|--------|--------|-------------------|--------|-------------------|
|   |   |                   |   |                   |

| (euro million) |   | **Trade receivables** |   | **Other receivables** |   | **Total** |   | **Trade receivables** |   | **Other receivables** |   | **Total** |
|----------------|--------|-----------------------|--------|-----------------------|--------|-----------|--------|-----------------------|--------|-----------------------|--------|-----------|
|           |   |                       |   |                       |   |           |   |                       |   |                       |   |           |

| **Neither impaired nor past due**                          |   | **14,122** |   | **4,451** |   | **18,573** |   | **14,505** |   | **5,062** |   | **19,567** |
|------------------------------------------------------------|--------|------------|--------|-----------|--------|------------|--------|------------|--------|-----------|--------|------------|
| **Impaired        (net of the valuation allowance)**       |   | **1,142**  |   | **51**    |   | **1,193**  |   | **977**    |   | **221**   |   | **1,198**  |
| Not impaired and past due in the following        periods: |   |       |   |      |   |       |   |       |   |      |   |       |
| - within        90 days                                    |   | 1,291      |   | 74        |   | 1,365      |   | 953        |   | 86        |   | 1,039      |
| - 3 to 6 months                                            |   | 196        |   | 56        |   | 252        |   | 360        |   | 61        |   | 421        |
| - 6 to 12        months                                    |   | 177        |   | 663       |   | 840        |   | 441        |   | 190       |   | 631        |
| - over 12 months                                           |   | 293        |   | 458       |   | 751        |   | 473        |   | 608       |   | 1,081      |
|                                                       |   | **1,957**  |   | **1,251** |   | **3,208**  |   | **2,227**  |   | **945**   |   | **3,172**  |
|                                                       |   | **17,221** |   | **5,753** |   | **22,974** |   | **17,709** |   | **6,228** |   | **23,937** |
|                                                       |   |            |   |           |   |            |   |            |   |           |   |            |

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 accountsamounted to euro 171 million (euro 201 million in 2010) primarilyrelated to the Gas & Power segment (euro 119 million) and theRefining & Marketing segment (euro 22 million). Utilizationsof the reserve amounted to euro 52 million (euro 191 million in2010) and related to the Gas & Power segment (euro 21million), the Refining & Marketing segment (euro 13 million)and the Engineering & Construction segment (euro 12 million).

Trade receivables included amounts withheld to guaranteescertain contract work in progress for euro 103 million (euro 70million at December 31, 2010).

Trade receivables in currencies other than euro amounted toeuro 5,693 million.

Receivables related to divestment activities included thecurrent portion of the receivable related to the divestment of a1.71% interest in the Kashagan project to the local partnerKazMunaiGas on the basis of the agreements defined with theinternational partners of the North Caspian Sea PSA and theKashagan government effective from January 1, 2008 (euro 116million). The reimbursement of the receivable will take place inthree annual installments, with the first one due once thecommercial production at the Kashagan field starts. Productionstart-up is currently planned by the end of 2012 or in the firstmonths of 2013. The receivable accrues interest income at marketrates. The long-term portion is disclosed under Note 20 –Other non-current receivables.

Other receivables of euro 6,059 million included receivablesfor euro 504 million (euro 482 million at December 31, 2010)relating the recovery of costs incurred to develop an oil&gasproject in the Exploration & Production segment. Thereceivable amount is currently undergoing arbitration procedure.

Receivables associated with financing operating activities ofeuro 630 million (euro 656 million at December 31, 2010) includedloans made to unconsolidated subsidiaries, joint ventures andassociates for euro 345 million (euro 470 million at December 31,2010) for executing industrial project. Other amounts includedeuro 250 million for a cash deposit to hedge the loss provisionmade by Eni Insurance Ltd (euro 159 million at December 31, 2010)and receivables for financial leasing for euro 31 million (euro19 million at December 31, 2010). More information aboutreceivables for financial leasing is disclosed under Note 18– Other financial assets.

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Receivables not related to operating activities amounted toeuro 28 million (euro 6 million at December 31, 2010) andprimarily related to restricted deposits in the Engineering &Construction segment.

Financing receivables in currencies other than euro amountedto euro 224 million.

Other receivables were as follows:

| (euro million) |   | **Dec. 31, 2010** |   | **Dec. 31, 2011** |
|----------------|--------|-------------------|--------|-------------------|
|           |   |                   |   |                   |

| Receivables originated from divestments                        |   | **86**    |   | **169**   |
|----------------------------------------------------------------|--------|-----------|--------|-----------|
| Accounts        receivable from:                               |   |      |   |      |
| - joint venture operators in exploration and        production |   | 3,017     |   | 3,827     |
| -        non-financial government entities                     |   | 457       |   | 62        |
| - insurance companies                                          |   | 131       |   | 171       |
| -        prepayments for services                              |   | 1,085     |   | 837       |
| - from factoring arrangements                                  |   | 190       |   | 150       |
| - other        receivables                                     |   | 787       |   | 1,012     |
|                                                           |   | **5,667** |   | **6,059** |
|                                                           |   | **5,753** |   | **6,228** |
|                                                           |   |           |   |           |

Receivables from factoring arrangements of euro 150 million(euro 190 million at December 31, 2010) related to SerfactoringSpA and consisted primarily of advances for factoringarrangements with recourse and receivables for factoringarrangements without recourse.

Other receivables in currencies other than euro amounted toeuro 4,954 million.

Receivables with related parties are described under Note 42– Transactions with related parties.

Because of the short-term maturity of trade receivables andother receivables, the fair value approximated their carryingamount.

**10 Inventories******The break-down of inventories is presented below:

|   |   | **Dec. 31, 2010** |   | **Dec. 31, 2011** |
|--------|--------|-------------------|--------|-------------------|
|   |   |                   |   |                   |

| (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                |   | 878       |   | 167     |   |    |   | 1,516     |   | 2,561     |   | 892       |   | 172       |   |    |   | 1,722     |   | 2,786     |
|------------------------------------------------------------|--------|-----------|--------|---------|--------|---------|--------|-----------|--------|-----------|--------|-----------|--------|-----------|--------|---------|--------|-----------|--------|-----------|
| Products        being processed and semi-finished products |   | 117       |   | 33      |   |    |   | 1         |   | 151       |   | 127       |   | 25        |   |    |   | 1         |   | 153       |
| Work in progress                                           |   |      |   |    |   | 428     |   |      |   | 428       |   |      |   |      |   | 869     |   |      |   | 869       |
| Finished        products and goods                         |   | 2,721     |   | 666     |   |    |   | 62        |   | 3,449     |   | 2,892     |   | 804       |   |    |   | 71        |   | 3,767     |
|                                                       |   | **3,716** |   | **866** |   | **428** |   | **1,579** |   | **6,589** |   | **3,911** |   | **1,001** |   | **869** |   | **1,794** |   | **7,575** |
|                                                       |   |           |   |         |   |         |   |           |   |           |   |           |   |           |   |         |   |           |   |           |

Contract works in progress for euro 869 million (euro 428million at December 31, 2010) are stated net of prepayments foreuro 11 million (euro 16 million at December 31, 2010) whichcorresponded to the amount of the works executed and accepted bycustomers.

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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, 2010**          |   |      |   |   |      |   |   |    |   |   |   |   |   |    |   |   |    |   |   |    |   |   |      |   |
|--------------------------------|--------|-----------|--------|--------|-----------|--------|--------|---------|--------|--------|--------|--------|--------|---------|--------|--------|---------|--------|--------|---------|--------|--------|-----------|--------|
| Gross        carrying amount   |   | 5,598     |   |   | 822       |   |   |    |   |   |   |   |   | 124     |   |   | 112     |   |   | 38      |   |   | **6,694** |   |
| Loss provision                 |   | (103      | )      |   |      |   |   | (16     | )      |   | 23     |   |   |    |   |   | (2      | )      |   | (7      | )      |   | **(105**  | **)**  |
| **Net        carrying amount** |   | **5,495** |   |   | **822**   |   |   | **(16** | **)**  |   | **23** |   |   | **124** |   |   | **110** |   |   | **31**  |   |   | **6,589** |   |
| **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** |   |
|                           |   |           |        |   |           |        |   |         |        |   |        |        |   |         |        |   |         |        |   |         |        |   |           |        |

Additions for the year amounting to euro 1,091 million wererecorded in the Engineering & Construction segment (euro 543million), the Refining & Marketing segment (euro 249 million)and the Exploration & Production segment (euro 220million). Increased loss provisions amounting to euro 94 millionwere mainly recorded in the Petrochemical segment (euro 55million). Changes in the scope of consolidation of euro 20million mainly related to Petromar Lda following loss of control(euro 17 million).

Other changes of euro 47 million comprised thereclassification to tangible assets of pseudo-working gaspertaining to Stoccaggi Gas Italia SpA (euro 113 million).Following a recent technical study carried out in collaborationwith Politecnico di Torino and the Ministry for EconomicDevelopment, such gas resulted as not available or re-injectablein an annual cycle of storage.

**11 Current income tax assets******

| (euro million) |   | **Dec. 31, 2010** |   | **Dec. 31, 2011** |
|----------------|--------|-------------------|--------|-------------------|
|           |   |                   |   |                   |

| Italian subsidiaries        |   | 297     |   | 399     |
|-----------------------------|--------|---------|--------|---------|
| Foreign        subsidiaries |   | 170     |   | 150     |
|                        |   | **467** |   | **549** |
|                        |   |         |   |         |

Income tax expenses are described under Note 39 – Incometaxes.

**12 Other current tax assets**

| (euro million) |   | **Dec. 31, 2010** |   | **Dec. 31, 2011** |
|----------------|--------|-------------------|--------|-------------------|
|           |   |                   |   |                   |

| VAT                              |   | 431     |   | 581       |
|----------------------------------|--------|---------|--------|-----------|
| Excise and        customs duties |   | 192     |   | 239       |
| Other taxes and duties           |   | 315     |   | 568       |
|                             |   | **938** |   | **1,388** |
|                             |   |         |   |           |

The increase in other taxes and duties amountingto euro 253 million was mainly related to foreign subsidiariesfor euro 262 million, of which euro 240 million referred toforeign subsidiaries of the Exploration & Production segment.

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**13 Other current assets**

| (euro million) |   | **Dec. 31, 2010** |   | **Dec. 31, 2011** |
|----------------|--------|-------------------|--------|-------------------|
|           |   |                   |   |                   |

| Fair value of non-hedging and trading        derivatives |   | 626       |   | 1,562     |
|----------------------------------------------------------|--------|-----------|--------|-----------|
| Fair value        of cash flow hedge derivatives         |   | 210       |   | 157       |
| Other current assets                                     |   | 514       |   | 607       |
|                                                     |   | **1,350** |   | **2,326** |
|                                                     |   |           |   |           |

The fair value of non-hedging derivativecontracts and derivatives contracts held for trading is presentedbelow:

|   |   | **Dec. 31, 2010** |   | **Dec. 31, 2011** |
|--------|--------|-------------------|--------|-------------------|
|   |   |                   |   |                   |

| (euro        million) |    | **Fair value** | **  ** | **Purchase        commitments** | **  ** | **Sale        commitments** | **  ** | **Fair value** | **  ** | **Purchase        commitments** | **  ** | **Sale        commitments** |
|-----------------------|--------------|----------------|------------------|---------------------------------|------------------|-----------------------------|------------------|----------------|------------------|---------------------------------|------------------|-----------------------------|

| **Derivatives on exchange rate**        |   |    |   |      |   |      |   |      |   |       |   |      |
|-----------------------------------------|--------|---------|--------|-----------|--------|-----------|--------|-----------|--------|------------|--------|-----------|
| Interest        currency swap           |   |    |   |      |   |      |   | 16        |   | 50         |   |      |
| Currency swap                           |   | 123     |   | 1,357     |   | 4,411     |   | 204       |   | 5,819      |   | 833       |
| Other                                   |   | 1       |   | 80        |   | 162       |   | 2         |   | 116        |   |      |
|                                    |   | **124** |   | **1,437** |   | **4,573** |   | **222**   |   | **5,985**  |   | **833**   |
| **Derivatives        on interest rate** |   |    |   |      |   |      |   |      |   |       |   |      |
| Interest rate swap                      |   |    |   |      |   |      |   | 6         |   |       |   | 1,885     |
|                                    |   |    |   |      |   |      |   | **6**     |   |       |   | **1,885** |
| **Derivatives on commodities**          |   |    |   |      |   |      |   |      |   |       |   |      |
| Over the        counter                 |   | 383     |   | 2,739     |   | 525       |   | 1,181     |   | 5,644      |   | 4,378     |
| Future                                  |   | 33      |   | 418       |   |      |   | 68        |   | 452        |   | 438       |
| Other                                   |   | 86      |   |      |   | 448       |   | 85        |   |       |   | 581       |
|                                    |   | **502** |   | **3,157** |   | **973**   |   | **1,334** |   | **6,096**  |   | **5,397** |
|                                    |   | **626** |   | **4,594** |   | **5,546** |   | **1,562** |   | **12,081** |   | **8,115** |
|                                    |   |         |   |           |   |           |   |           |   |            |   |           |

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 euro1,562 million (euro 626 million at December 31, 2010) consistedof: (i) euro 1,450 million (euro 596 million at December 31,2010) of derivatives 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 112 million (euro 30 million at December 31, 2010) ofcommodity trading derivatives entered by the Gas & Powersegment in order to optimize the economic margin as provided bythe new risk management strategy.

Fair value of cash flow hedge derivatives of euro 157 million(euro 210 million at December 31, 2010) pertained for euro 154million to the Gas & Power segment. These derivatives wereentered into to hedge variability in future cash flows associatedto highly probable future sale transactions of gas or electricityor on already contracted sales due to different indexationmechanism of supply costs versus selling prices. A similar schemeapplies to exchange rate hedging derivatives. Negative fair valueof contracts expiring by 2012 is disclosed under Note 25 –Other current liabilities; positive and negative fair value ofcontracts expiring beyond 2012 is disclosed under Note 20 –Other non-current receivables and under Note 30 – Othernon-current liabilities. The effects of the evaluation at fairvalue of cash flow hedge derivatives are given under Note 32– Shareholders’ equity and under Note 36 –Operating expenses.

The nominal value of cash flow hedge derivatives for purchaseand sale commitments was euro 3,297 million and euro 610 million,respectively.

Information on hedged risks and hedging policies is disclosedunder Note 34 – Guarantees, commitments and risks –Risk factors.

Other assets amounted to euro 607 million (euro 514 million atDecember 31, 2010) and included prepayments and accrued incomefor euro 260 million (euro 155 million at December 31, 2010),insurance premiums for euro 64 

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million (euro 52 million at December 31, 2010) and rentals foreuro 18 million (euro 20 million at December 31, 2010).

**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, 2010**                    |   |       |   |       |   |       |   |   |     |   |   |     |   |   |      |   |   |     |   |   |    |   |   |       |   |        |   |       |
|------------------------------------------|--------|------------|--------|------------|--------|------------|--------|--------|----------|--------|--------|----------|--------|--------|-----------|--------|--------|----------|--------|--------|---------|--------|--------|------------|--------|-------------|--------|------------|
| Land                                     |   | 618        |   | 3          |   |       |   |   |     |   |   | 18       |   |   | 4         |   |   |     |   |   | 22      |   |   | 665        |   | 693         |   | 28         |
| Buildings                                |   | 785        |   | 35         |   | (94        | )      |   | (1       | )      |   | 19       |   |   | 21        |   |   |     |   |   | 67      |   |   | 832        |   | 3,194       |   | 2,362      |
| Plant and        machinery               |   | 39,858     |   | 3,280      |   | (6,755     | )      |   | (150     | )      |   | (652     | )      |   | 1,721     |   |   |     |   |   | 5,689   |   |   | 42,991     |   | 108,464     |   | 65,473     |
| Industrial and commercial equipment      |   | 787        |   | 115        |   | (170       | )      |   |     |   |   |     |   |   | 17        |   |   |     |   |   | 242     |   |   | 991        |   | 2,309       |   | 1,318      |
| Other        assets                      |   | 543        |   | 143        |   | (122       | )      |   |     |   |   | 74       |   |   | 18        |   |   |     |   |   | 516     |   |   | 1,172      |   | 2,583       |   | 1,411      |
| Tangible assets in progress and advances |   | 17,174     |   | 8,732      |   |       |   |   | (106     | )      |   | (58      | )      |   | 833       |   |   |     |   |   | (5,822  | )      |   | 20,753     |   | 22,369      |   | 1,616      |
|                                     |   | **59,765** |   | **12,308** |   | **(7,141** | **)**  |   | **(257** | **)**  |   | **(599** | **)**  |   | **2,614** |   |   |     |   |   | **714** |   |   | **67,404** |   | **139,612** |   | **72,208** |
| **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** |
|                                     |   |            |   |            |   |            |        |   |          |        |   |          |        |   |           |        |   |          |        |   |         |        |   |            |   |             |   |            |

Capital expenditures of euro 11,658 million (euro 12,308million in 2010) related to the Exploration & Productionsegment for euro 8,162 million (euro 8,622 million in 2010), theGas & Power segment for euro 1,281 million (euro 1,251million in 2010), the Engineering & Construction segment foreuro 1,084 million (euro 1,541 million in 2010) and the Refining& Marketing segment for euro 860 million (euro 704 million in2010). Capital expenditures included capitalized finance expensesof euro 147 million (euro 186 million at December 31, 2010)relating to the Exploration & Production segment (euro 79million), the Gas & Power segment (euro 36 million), theRefining & Marketing segment (euro 16 million) and theEngineering & Construction segment (euro 12 million). Theinterest rates used for capitalizing finance expense ranged from1.0% to 3.7% (0.8% and 4.8% at December 31, 2010).

The depreciation rates used ranged as follows:

| (%)                                 |   |   |   |   |   |   |   |   |   |
|-------------------------------------|--------|--------|--------|--------|--------|--------|--------|--------|--------|
| Buildings                           |   |   |   |   | 2      |   | -      | 10     |   |
| Plant and machinery                 |   |   |   |   | 2      |   | -      | 10     |   |
| Industrial and commercial equipment |   |   |   |   | 4      |   | -      | 33     |   |
| Other assets                        |   |   |   |   | 6      |   | -      | 33     |   |

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The break-down of impairments losses recorded in 2011amounting to euro 891 million (euro 257 million at December 31,2010) and the associated tax effect is provided below:

| (euro        million) |   | **2010** |   | **2011** |
|-----------------------|--------|----------|--------|----------|
|                  |   |          |   |          |

| **Impairment losses**                           |   |    |   |    |
|-------------------------------------------------|--------|---------|--------|---------|
| Refining        & Marketing                 |   | 72      |   | 484     |
| Exploration & Production                    |   | 123     |   | 189     |
| Petrochemicals                                  |   | 52      |   | 174     |
| Other segments                                  |   | 10      |   | 44      |
|                                            |   | **257** |   | **891** |
| **Tax effects**                                 |   |    |   |    |
| Refining        & Marketing                 |   | 28      |   | 194     |
| Exploration & Production                    |   | 49      |   | 65      |
| Petrochemicals                                  |   | 15      |   | 47      |
| Other segments                                  |   | 3       |   | 3       |
|                                            |   | **95**  |   | **309** |
| **Impairments net of the relevant tax effects** |   |    |   |    |
| Refining        & Marketing                 |   | 44      |   | 290     |
| Exploration & Production                    |   | 74      |   | 124     |
| Petrochemicals                                  |   | 37      |   | 127     |
| Other segments                                  |   | 7       |   | 41      |
|                                            |   | **162** |   | **582** |
|                                            |   |         |   |         |

In assessing whether impairment is required, the carryingvalue of an item of property, plant and equipment is comparedwith its recoverable amount. The recoverable amount is the higherbetween an asset’s fair value less costs to sell and itsvalue-in-use. Given the nature of Eni’s activities,information on asset fair value is usually difficult to obtainunless negotiations with a potential buyer are ongoing.Therefore, the recoverability is verified by using thevalue-in-use which is calculated by discounting the estimatedcash flows arising from the continuing use of an asset. Thevaluation is carried out for individual asset or for the smallestidentifiable group of assets that generates cash inflows that arelargely independent of the cash inflows from other assets orgroups of assets (cash generating unit - CGU). The Group’shas identified its main CGUs: (i) in the Exploration &Production segment, individual oilfields or pools of oilfieldswhereby technical, economic or contractual features makeunderlying cash flows interdependent; (ii) in the Gas & Powersegment, transport and distribution networks and relatedfacilities, storage sites and re-gasification facilities in aconsistent way with the gas segments of operations that aredefined by Regulatory Authorities for the purpose of settingtariffs. Other CGUs in the Gas & Power segment are gascarrier ships and plants for the production of electricity; (iii)in the Refining & Marketing segment, refining plants,warehouses and commercial facilities relating to eachdistribution channels and by country (ordinary network, high-waysnetwork, and wholesale activities); (iv) in the Petrochemicalsegment, production plants by business and related facilities;and (v) in the Engineering & Construction segment, thebusiness units E&C Offshore and E&C Onshore, onshoredrilling facilities and individual rigs for offshore operations.

The recoverable amount is calculated by discounting theestimated cash flows deriving from the continuing use of the CGUand, if significant and reasonably determinable, the cash flowsderiving from its disposal at the end of its useful life. TheCGUs recoverable amounts in the regulated businesses of gastransportation, distribution, storage and re-gasification equalthe regulatory asset base which is recognized by the RegulatoryAuthority, considering that the operating costs are recovered intariffs.

Cash flows are determined on the basis of the best informationavailable at the moment of the assessment deriving: (i) for thefirst four years of each projection, from the Company’sfour-year plan adopted by the top management which providesinformation on expected oil and gas production volumes, salesvolumes, capital expenditures, operating costs and margins andindustrial and marketing set-up, as well as trends on the mainmacroeconomic variables, including inflation, nominal interestrates and exchange rates; and (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, the economical and technical life of the plants andassociated projections of operating costs, expenditures tosupport plant efficiency and refining and marketing margins; (c)for the CGUs of the Petrochemical segment, the economical andtechnical life of the plants and associated projections ofexpenditures to support plant efficiency, and normalizedoperating results plus depreciation; (d) for the CGUs of the gasmarket and the Engineering & Construction segment, theperpetuity method of the last-year-plan by using a nominal growthrate ranging from 

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0% to 2%; and (e) for the regulated businesses of gastransportation, distribution, storage and re-gasification, aterminal value equal to the regulatory asset base (RAB) of thelast-year-plan; and (ii) commodity prices are estimated on thebasis of the forward prices prevailing in the marketplace as ofthe balance sheet date for the first four years of the cash flowprojections and the long-term price assumptions adopted by theCompany’s management for strategic planning purposes andcapital budget allocation (see Note 3 – Summary ofsignificant accounting policies). In particular, the long-termprice of oil adopted for assessing the future cash flows of theCompany’s CGUs was $85 per barrel which is adjusted to takeinto account the expected inflationary rate from 2015 onwards.

Values-in-use are determined by discounting post-tax cashflows at a rate which corresponds for the Exploration &Production, Refining & Marketing and Petrochemical segmentsto the Company’s weighted average cost of capital, adjustedto consider risks specific to each Country of activity (adjustedpost-tax WACC). In 2011, the adjusted post-tax rates used forassessing values-in-use decreased by 0.5 percentage points onaverage from the previous year reflecting a reduced market riskpremium for the Eni’s share. Such trend was partially offsetby an increase in the other financial parameters used fordetermining the cost of capital: cost of borrowings to Enidetermined by expected trends for spreads and management’sestimates for the composition of the Company’s finance debt,increased risk-free yields reflecting the higher risk premium forItaly and an appreciation of the Country risk of Eni’sportfolio. In 2011, the adjusted WACC used for impairment testpurposes ranged from 7.5% to 12.5%.

Post-tax cash flows and discount rates were adopted as theyresulted in an assessment that substantially approximated apre-tax assessment.

The amount of impairments recorded in the Refining &Marketing segment of euro 484 million reflects management’sexpectations of incurring further operating losses due to acontinuing weak trading environment for the refining businessnegatively affected by rising feedstock costs, excess capacityand anticipated poor demand for fuels on the back of the economicdownturn. Based on these drivers, management recognizedimpairment losses of the Company’s refining plants byadjusting their book value to the lower values-in-use consideringexpectations of negative margins in the short and medium-term.Other minor impairments regarded a retail network, marginal linesof business and certain safety and maintenance expendituresincurred in the period that were written-off because they relatedto assets previously impaired. The largest impairment losses wererecorded at two CGUs which were tested for impairment using apost-tax discount rate of 8%, corresponding to a pre-tax discountrate of 10.7-10.9%.

In the Exploration & Production segment were recordedasset impairments for a total amount of euro 189 million whichprimarily related to gas properties located in USA as a result ofa changed price environment and downward reserve revisions. Theonly material impairment loss referred to a single CGU wasassessed using a post-tax discount rate of 7.5%, corresponding toa pre-tax discount rate of 9.7%.

In the Petrochemical segment impairment losses amounted toeuro 174 million and related to a marginal business line lackingany profitability perspectives and certain safety and maintenanceexpenditures incurred in the period that were written-off becausethey related to assets previously impaired.

Change in the consolidation area essentially related to theinclusion in the scope of consolidation, following the fullacquisition of Terminal Portuário do Guarujá SA (euro 100million) and, as a decrease, loss of control of Petromar Lda(euro 99 million).

Foreign currency translation differences of euro 1,393 millionwere primarily related to translation of entities accountsdenominated in US dollar (euro 1,337 million).

The reclassification to assets held for sale of euro 221million was primarily related to certain non-strategic assets ofthe Exploration & Production segment (euro 206 million).

Other changes of euro 779 million related to the initialrecognition and change in estimates of the costs for dismantlingand site restoration (euro 740 million) and the reclassificationfrom inventories (euro 113 million) and inventories - compulsorystock (euro 1 million) of pseudo-working gas pertaining toStoccaggi Gas Italia SpA, as a consequence of a recent technicalstudy carried out in collaboration with Politecnico di Torino andthe Ministry for Economic Development for which such gas resultedas not available or re-injectable in an annual cycle of storage.The initial recognition and change in estimates of the costs fordismantling and site restoration (euro 740 million) pertained tothe Exploration & Production segment (euro 874 million) andto Stoccaggi Gas Italia SpA (down euro 137 million). The downwardestimate revision was made by Stoccaggi Gas Italia SpA reflectinga new time schedule of the disbursements for dismantling andrestoring of gas storage sites, which was adopted prospectivelyfrom January 1, 2010. It is now assumed that the settlement ofthe obligations will occur 20 years later than the previousestimates based on the probable time extension of ongoingconcessions to operate the relevant storage sites. Thisassumption is consistent with the tariff-setting mechanismapproved by the Authority for Electricity and Gas.

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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, 2010**        |   |      |   |    |   |    |   |   |     |   |   |    |   |   |      |
|------------------------------|--------|-----------|--------|---------|--------|---------|--------|--------|----------|--------|--------|---------|--------|--------|-----------|
| Congo                        |   | 1,164     |   |    |   |    |   |   | (7       | )      |   | 91      |   |   | 1,248     |
| USA                          |   | 882       |   |    |   | (84     | )      |   | (150     | )      |   | 70      |   |   | 718       |
| Turkmenistan                 |   | 649       |   |    |   |    |   |   | (12      | )      |   | 51      |   |   | 688       |
| Algeria                      |   | 452       |   |    |   |    |   |   | (43      | )      |   | 37      |   |   | 446       |
| Other        countries       |   | 231       |   |    |   |    |   |   | (61      | )      |   | (9      | )      |   | 161       |
|                         |   | **3,378** |   |    |   | **(84** | **)**  |   | **(273** | **)**  |   | **240** |   |   | **3,261** |
| **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       |
| Other        countries       |   | 161       |   |    |   |    |   |   | (34      | )      |   | (6      | )      |   | 121       |
|                         |   | **3,261** |   | **754** |   | **(64** | **)**  |   | **(604** | **)**  |   | **149** |   |   | **3,496** |
|                         |   |           |   |         |   |         |        |   |          |        |   |         |        |   |           |

Acquisitions for the year related to the awardsof blocks and interests in licenses in Nigeria and Algeria.

The accumulated provisions for impairments amounted to euro6,186 million and euro 6,816 million at December 31, 2010 and2011, respectively.

At December 31, 2011, Eni pledged property, plant andequipment for euro 27 million primarily as collateral againstcertain borrowings (euro 28 million as of December 31, 2010).

Government grants recorded as a decrease of property, plantand equipment amounted to euro 724 million (euro 753 million atDecember 31, 2010).

Assets acquired under financial lease agreements amounted toeuro 19 million (euro 27 million at December 31, 2010), of which,euro 14 million related to FPSO ships used by the Exploration& Production segment to support oil production and treatmentactivities and euro 5 million related to service stations in theRefining & Marketing segment.

Contractual commitments related to the purchase of property,plant and equipment are disclosed under Note 34 –Guarantees, commitments and risks – Liquidity risk.

Property, plant and equipment under concession arrangementsare described under Note 34 – Guarantees, commitments andrisks – Asset under concession arrangements.

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**Property, plant and equipment by segment**

| (euro million) |   | **Dec. 31, 2010** |   | **Dec. 31, 2011** |
|----------------|--------|-------------------|--------|-------------------|
|           |   |                   |   |                   |

| **Property, plant and equipment, gross**                                |   |        |   |   |        |   |
|-------------------------------------------------------------------------|--------|-------------|--------|--------|-------------|--------|
| Exploration        & Production                                     |   | 85,494      |   |   | 96,561      |   |
| Gas & Power                                                         |   | 22,510      |   |   | 23,655      |   |
| Refining        & Marketing                                         |   | 14,177      |   |   | 14,884      |   |
| Petrochemicals                                                          |   | 5,226       |   |   | 5,438       |   |
| Engineering        & Construction                                   |   | 10,714      |   |   | 11,809      |   |
| Other activities                                                        |   | 1,614       |   |   | 1,617       |   |
| Corporate        and financial companies                                |   | 372         |   |   | 422         |   |
| Elimination of intra-group profits                                      |   | (495        | )      |   | (523        | )      |
|                                                                    |   | **139,612** |   |   | **153,863** |   |
| **Accumulated depreciation, amortization and        impairment losses** |   |        |   |   |        |   |
| Exploration        & Production                                     |   | 44,973      |   |   | 51,034      |   |
| Gas & Power                                                         |   | 8,634       |   |   | 9,138       |   |
| Refining        & Marketing                                         |   | 9,411       |   |   | 10,126      |   |
| Petrochemicals                                                          |   | 4,236       |   |   | 4,478       |   |
| Engineering        & Construction                                   |   | 3,292       |   |   | 3,840       |   |
| Other activities                                                        |   | 1,536       |   |   | 1,541       |   |
| Corporate        and financial companies                                |   | 201         |   |   | 226         |   |
| Elimination of intra-group profits                                      |   | (75         | )      |   | (98         | )      |
|                                                                    |   | **72,208**  |   |   | **80,285**  |   |
| **Property, plant and equipment, net**                                  |   |        |   |   |        |   |
| Exploration        & Production                                     |   | 40,521      |   |   | 45,527      |   |
| Gas & Power                                                         |   | 13,876      |   |   | 14,517      |   |
| Refining        & Marketing                                         |   | 4,766       |   |   | 4,758       |   |
| Petrochemicals                                                          |   | 990         |   |   | 960         |   |
| Engineering        & Construction                                   |   | 7,422       |   |   | 7,969       |   |
| Other activities                                                        |   | 78          |   |   | 76          |   |
| Corporate        and financial companies                                |   | 171         |   |   | 196         |   |
| Elimination of intra-group profits                                      |   | (420        | )      |   | (425        | )      |
|                                                                    |   | **67,404**  |   |   | **73,578**  |   |
|                                                                    |   |             |        |   |             |        |

**15********Inventory - compulsory stock**

| (euro million) |   | **Dec. 31, 2010** |   | **Dec. 31, 2011** |
|----------------|--------|-------------------|--------|-------------------|
|           |   |                   |   |                   |

| Crude oil and petroleum products |   | 1,874     |   | 2,284     |
|----------------------------------|--------|-----------|--------|-----------|
| Natural        gas               |   | 150       |   | 149       |
|                             |   | **2,024** |   | **2,433** |
|                             |   |           |   |           |

Compulsory inventories were primarily held by Italiansubsidiaries (euro 2,010 million and euro 2,418 million atDecember 31, 2010 and 2011, respectively) in accordance withminimum stock requirements of oil, petroleum products and naturalgas set forth by applicable laws.

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**16 Intangible assets**

| (euro million) |   | **Net book amount at the        beginning of the year** |   | **Additions** |   | **Depreciation** |   | **Impairment losses** |   | **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, 2010**                                      |   |       |   |      |   |       |   |   |     |   |   |   |   |   |     |   |   |       |   |       |   |      |
|------------------------------------------------------------|--------|------------|--------|-----------|--------|------------|--------|--------|----------|--------|--------|--------|--------|--------|----------|--------|--------|------------|--------|------------|--------|-----------|
| **Intangible        assets with finite useful lives**      |   |       |   |      |   |       |   |   |     |   |   |   |   |   |     |   |   |       |   |       |   |      |
| Exploration expenditures                                   |   | 631        |   | 1,038     |   | (1,235     | )      |   |     |   |   | 52     |   |   | 52       |   |   | 538        |   | 2,323      |   | 1,785     |
| Industrial        patents and intellectual property rights |   | 138        |   | 38        |   | (87        | )      |   |     |   |   |   |   |   | 61       |   |   | 150        |   | 1,374      |   | 1,224     |
| Concessions, licenses, trademarks and similar        items |   | 671        |   | 40        |   | (160       | )      |   |     |   |   | 1      |   |   | 23       |   |   | 575        |   | 2,410      |   | 1,835     |
| Service        concession arrangements                     |   | 3,412      |   | 300       |   | (134       | )      |   | (10      | )      |   | 6      |   |   | (12      | )      |   | 3,562      |   | 6,205      |   | 2,643     |
| Intangible assets in progress and advances                 |   | 581        |   | 138       |   |       |   |   | (1       | )      |   |   |   |   | (60      | )      |   | 658        |   | 664        |   | 6         |
| Other        intangible assets                             |   | 1,626      |   | 8         |   | (128       | )      |   |     |   |   | 9      |   |   | (1       | )      |   | 1,514      |   | 2,048      |   | 534       |
|                                                       |   | **7,059**  |   | **1,562** |   | **(1,744** | **)**  |   | **(11**  | **)**  |   | **68** |   |   | **63**   |   |   | **6,997**  |   | **15,024** |   | **8,027** |
| **Intangible        assets with indefinite useful lives**  |   |       |   |      |   |       |   |   |     |   |   |   |   |   |     |   |   |       |   |       |   |      |
| Goodwill                                                   |   | 4,410      |   |      |   |       |   |   | (430     | )      |   | 17     |   |   | 178      |   |   | 4,175      |   |       |   |      |
|                                                       |   | **11,469** |   | **1,562** |   | **(1,744** | **)**  |   | **(441** | **)**  |   | **85** |   |   | **241**  |   |   | **11,172** |   |       |   |      |
| **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** |   |       |   |      |
|                                                       |   |            |   |           |   |            |        |   |          |        |   |        |        |   |          |        |   |            |   |            |   |           |

Exploration expenditures of euro 564 million mainly related tolicense 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 included exploration drilling expenditureswhich were fully amortized as incurred for euro 1,017 million(euro 1,009 million at December 31, 2010).

Concessions, licenses, trademarks and similar items for euro847 million primarily comprised transmission rights for naturalgas imported from Algeria (euro 705 million) and concessions formineral exploration (euro 81 million).

Service concession arrangements of euro 3,690 millionprimarily pertained to Italian gas distribution activities foreuro 3,618 million (euro 3,492 million as of December 31, 2010).The distribution of gas is operated through concessions which aregranted to distribution companies by local publicadministrations. In 2011, a specific Decree issued by the ItalianGovernment established 177 territorial basins representing thelowest levels of aggregation of municipalities. The newconcessions will be granted based on these new territorialbasins. When an existing concession expires, the new operator whotakes over the concession will award the previous operator acompensation for the distribution network based on an industrialassessment of the asset value. Tariffs for the distributionservice are defined by the Italian Authority for Electricity andGas. Applicable regulations award concessions to distributioncompanies exclusively by means of competitive bid. Concessionsare granted for a maximum term of 12 years. Government grantsrecorded as a decrease in the carrying amounts of serviceconcession arrangements amounted to euro 756 million (euro 729million as of December 31, 2010).

Other intangible assets with finite useful lives of euro 1,422million primarily pertained to: (i) customer relationship andorder backlog for euro 1,036 million (euro 1,140 million atDecember 31, 2010) recognized upon the business combination ofDistrigas NV. These assets are amortized on the basis of thesupply contract with the longest term (19 years) and the residualuseful life of sale contracts (4 years); (ii) an option todevelop offshore storage capacity for the commercial modulationof gas in the British North Sea which was recognized upon theacquisition of Eni Hewett Ltd amounting to euro 248 million (euro241 million at December 31, 2010). The asset impairment testconfirmed the recoverability of the book value; (iii) royaltiesfor the use of licenses by Polimeri 

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Europa SpA amounting to euro 60 million (euro 64 million atDecember 31, 2010); and (iv) estimated costs for Eni’ssocial responsibility projects in relation to oil developmentprograms in Val d’Agri and in North Adriatic area connectedto mineral rights under concession for euro 50 million (euro 35million at December 31, 2010) following commitments made with theBasilicata Region, the Emilia Romagna Region and the Province andMunicipality of Ravenna.

The depreciation 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      |   | -      | 20     |   |
| Other intangible assets                                    |   |   |   |   | 4      |   | -      | 25     |   |

Impairment losses of intangible assets with indefinite usefullife (goodwill) amounted to euro 152 million and mainly relatedto the Gas & Power segment (euro 149 million), as describedbelow.

The carrying amount of goodwill at the end of the year waseuro 4,023 million (euro 4,175 million at December 31, 2010) netof cumulative impairments amounting to euro 726 million. Thebreak-down of goodwill by operating segment is as follows:

| (euro million) |   | **Dec. 31, 2010** |   | **Dec. 31, 2011** |
|----------------|--------|-------------------|--------|-------------------|
|           |   |                   |   |                   |

| Gas & Power                       |   | 3,000     |   | 2,845     |
|---------------------------------------|--------|-----------|--------|-----------|
| Engineering        & Construction |   | 749       |   | 749       |
| Exploration & Production          |   | 262       |   | 270       |
| Refining        & Marketing       |   | 164       |   | 159       |
|                                  |   | **4,175** |   | **4,023** |
|                                  |   |           |   |           |

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.The CGUs recoverable amounts in the regulated businesses of gastransportation, distribution, storage and re-gasification equalthe regulatory asset base which is recognized by the RegulatoryAuthority, considering that the operating costs are recovered intariffs.

Cash flows are determined on the basis of the best informationavailable at the moment of the assessment deriving: (i) for thefirst four years of each projection, from the Company’sfour-year plan adopted by the top management which providesinformation on expected oil and gas production volumes, salesvolumes, capital expenditures, operating costs and margins andindustrial and marketing set-up, as well as trends on the mainmacroeconomic variables, including inflation, nominal interestrates and exchange rates; (ii) beyond the four-year plan horizon,cash flow projections are estimated based on management’slong-term assumptions regarding the main macroeconomic variables(inflation rates, commodity prices, etc.) and along a timehorizon which considers the following factors: (a) for theoil&gas CGUs, the residual life of the reserves and theassociated projections of operating costs and developmentexpenditures; (b) for the CGUs of the Refining & Marketingsegment, the economical and technical life of the plants andassociated projections of operating costs, expenditures tosupport plant efficiency and refining and marketing margins; (c)for the CGUs of the gas market and the Engineering &Construction segment, the perpetuity method of the last-year-planby using a nominal growth rate ranging from 0% to 2%; and (d) forthe regulated businesses of gas transportation, distribution,storage and re-gasification, a terminal value equal to theregulatory asset base (RAB) of the last-year-plan; and (iii)commodity prices are estimated on the basis of the forward pricesprevailing in the marketplace as of the balance sheet date forthe first four years of the cash flow projections and thelong-term price assumptions adopted by the Company’smanagement for strategic planning purposes and capital budgetallocation (see Note 3 – Summary of significant accountingpolicies). In particular, the long-term price of oil adopted forassessing the future cash flows of the Company’s CGUs was$85 per barrel which is adjusted to take into account theexpected inflationary rate from 2015 onwards.

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Values-in-use are determined by discounting post-tax cashflows at a rate which corresponds: (i) for the Exploration &Production, Refining & Marketing and Petrochemical segmentsto the Company’s weighted average cost of capital, adjustedto consider risks specific to each Country of activity (adjustedpost-tax WACC). In 2011, the adjusted post-tax rates used forassessing values-in-use decreased by 0.5 percentage points onaverage from the previous year reflecting a reduced market riskpremium for the Eni’s share. Such trend was partially offsetby an increase in the other financial parameters used fordetermining the cost of capital: cost of borrowings to Enidetermined by expected trends for spreads and management’sestimates for the composition of the Company’s finance debt,increased risk-free yields reflecting the higher risk premium forItaly and an appreciation of the Country risk of Eni’sportfolio. In 2011, the adjusted WACC used for impairment testpurposes ranged from 7.5% to 12.5%; (ii) the impairment test ratefor the Gas & Power segment was estimated on the basis of asample of comparable companies in the utility industry. Theimpairment test rate for the Engineering & Constructionsegment was derived from market data. Rates used in the Gas &Power segment were adjusted to take into consideration risksspecific to each Country of activity, while rates used in theEngineering & Construction segment did not reflect anyCountry risks as most of the Company assets are not permanentlylocated in a specific Country. Rates for the Gas & Powersegment ranged from 7% to 8%, unchanged from the previous year asthe decrease observed in the equity risks for gas companies waslower than the oil sector and was offset by an increase in theother financial parameters used for determining the cost ofcapital. In the Engineering & Construction segment, thediscount rate was 8.5%, with a decrease of 0.5 percentage pointsfrom the previous year due to a lower equity risk; and (iii) forthe regulated activities, the discount rates were assumed to beequal to the rates of return defined by the Italian Authority forElectricity and Gas.

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, 2010** |   | **Dec. 31, 2011** |
|----------------|--------|-------------------|--------|-------------------|
|           |   |                   |   |                   |

| Domestic gas market                                |   | 767       |   | 767       |
|----------------------------------------------------|--------|-----------|--------|-----------|
| Foreign        gas market                          |   | 1,918     |   | 1,763     |
| *- of which European market*                       |   | *1,722*   |   | *1,668*   |
| Domestic        natural gas transportation network |   | 305       |   | 305       |
| Other                                              |   | 10        |   | 10        |
|                                               |   | **3,000** |   | **2,845** |
|                                               |   |           |   |           |

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 allocation of the Distrigasbusiness combination in 2009. The CGU comprises Distrigasmarketing activities and those activities managed directly orindirectly by the Gas & Power Division of the Parent CompanyEni SpA, which includes marketing activities in France, Germany,Benelux, UK, Switzerland and Austria. Those business unitsjointly benefited from the business combination synergies. In2011, this goodwill was increased by euro 95 million as theresult of definitive allocation of the goodwill related to thepurchase in 2010 of Altergaz SA. In performing the impairmentreview of the recoverability of the CGU carrying amount at thebalance sheet date, management recognized an impairment lossamounting to euro 149 million considering a reduced profitabilityoutlook for the gas business over the short to medium-term.

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 weak demand growth due to the current economicdownturn, continuing competitive pressures fuelled byoversupplies, and increased commercial risk. The European marketis expected to be negatively affected by lowering marketingmargins over the next four years. This reflects ongoingdevelopment of very liquid spot markets for gas and thecircumstance that spot prices have increasingly become theprevailing reference price for contractual formulae in suppliesoutside Italy, whereas Eni’s purchase 

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costs for gas are mainly indexed to the price of oil andrefined products. In the current trading environment gas spotprices are expected to fail to track the oil-linked cost ofEni’s supplies as weak demand growth and oversupplies willcontinue to fuel pricing competition among gas operators. Thistrend will negatively affect gas margins. Management believesthat trends in spot prices and oil-linked costs of supplies willre-couple in 2014 at the earliest. Compared to the impairmentreview performed in 2010, management is now assuming: (i) anaverage reduction of 25% in unit marketing margins on future gassales used to assess the value-in-use of the European market CGU;and (ii) an average reduction of 3% in planned sales volumes;while the discount rate and the growth rate are unchanged fromprevious assumptions. The industrial and financial forecasts forthe next four-year plan of the gas business as well as the amountof the impairment loss recognized in 2011 consolidated accountsboth take into consideration management assumptions torenegotiate better economic terms within the Company’slong-term gas purchase contracts, so as to restore thecompetitiveness of the Company’s cost position in thecurrent depressed scenario for the gas sector. In the course of2011, Eni finalized a number of important contractualrenegotiations by obtaining improved economic conditions forsupplies and wider contractual flexibility with a benefit to itscommercial programs. In the first quarter 2012 management hasfinalized new important renegotiations the economic benefits ofwhich have been determined considering the whole 2011 (see Note45 – Subsequent events).

The terminal value of the CGUs was estimated based on theperpetuity method of the last year of the plan assuming along-term nominal growth rate equal to zero for both the CGUs.Value in use of the CGU European market was assessed bydiscounting the associated post-tax cash flows at a post-tax rateof 7.5% that corresponds to the pre-tax rate of 9.3% (unchangedfrom the previous year). Value-in-use of the CGU Italian marketwas assessed by discounting the associated post-tax cash flows ata post-tax rate of 7% that corresponds to the pre-tax rate of13.1% (7% and 11.7%, respectively in the previous year).

The excess of the recoverable amount of the CGU domestic gasmarket over its carrying amount including the allocated portionof goodwill (headroom) amounting to euro 298 million would bereduced to zero under each of the following alternativehypothesis: (i) a decrease of 27.1% on average in the projectedcommercial margins; (ii) a decrease of 27.1% on average in theprojected sales volumes; (iii) an increase of 3.3 percentagepoints in the discount rate; and (iv) a negative nominal growthrate of 4.4%. 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).

Goodwill allocated to the domestic natural gas transportationnetwork CGU was recognized alongside the repurchase of own sharesby Snam Rete Gas SpA and equals the difference between thepurchase cost over the carrying amount of the corresponding shareof net equity. The recoverable amount of the CGU is assessedbased on its Regulatory Asset Base (RAB) as recognized by theItalian Authority for Electricity and Gas and is higher than itscarrying amount, including the allocated goodwill. Managementbelieves that no reasonable change in the assumptions adoptedwould cause the headroom of the CGU to be reduced to zero.

**Engineering & Construction segment**

| (euro million) |   | **Dec. 31, 2010** |   | **Dec. 31, 2011** |
|----------------|--------|-------------------|--------|-------------------|
|           |   |                   |   |                   |

| E&C Offshore       |   | 415     |   | 415     |
|------------------------|--------|---------|--------|---------|
| E&C        Onshore |   | 318     |   | 315     |
| Other                  |   | 16      |   | 19      |
|                   |   | **749** |   | **749** |
|                   |   |         |   |         |

The segment goodwill of euro 749 million was mainly recognizedfollowing the acquisition of Bouygues Offshore SA, now Saipem SA(euro 710 million) and allocated to the CGUs E&C Offshore andE&C Onshore. 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. Value in use of both CGUs wasassessed by discounting the associated post-tax cash flows at apost-tax rate of 8.5% (9% in 2010) which corresponds to thepre-tax rate of 11.1% and 12.1% for the E&C Offshore businessunit and the E&C Onshore one, respectively (11.8% and 13%,respectively in the previous year). The headroom of the E&COffshore business unit of euro 4,942 million would be reduced tozero under each of the following alternative changes in the abovementioned assumptions: (i) a decrease 

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of 57% in the operating result of the four-year plan; (ii) anincrease of about 9 percentage points in the discount rate; and(iii) negative real growth rate.

Changes in each of the assumptions that would cause theheadroom of the E&C Onshore business unit to be reduced tozero are greater than those applicable to the E&C Offshoreconstruction 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 270 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 mineral interests of the businesscombinations Lasmo, Burren Energy (Congo) and First Calgary(Algeria) executed in previous reporting periods; and (ii) in theRefining & Marketing segment goodwill amounted to euro 159million at the balance sheet date. Goodwill amounting to euro 63million pertained to retail networks in the Czech Republic,Hungary and Slovakia which were purchased in 2008, for whichprofitability expectations have remained unchanged from theprevious-year impairment review. Additionally, goodwill of euro76 million included the allocation of the purchase price of abusiness combination involving a network of service stations inAustria acquired in 2010 and marginal lines of business in Italyand Europe (euro 20 million) that were impaired for an amount ofeuro 3 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** |   | **Currency translation        differences** |   | **Other changes** |   | **Book amount at the end        of the year** |
|----------------|--------|-----------------------------------------------------|--------|---------------|--------|-------------------------------------------|--------|------------------------------------------------------------|--------|----------------------------------------------------------|--------|-----------------------------|--------|---------------------------------------------|--------|-------------------|--------|-----------------------------------------------|
|           |   |                                                     |   |               |   |                                           |   |                                                            |   |                                                          |   |                             |   |                                             |   |                   |   |                                               |

| **December 31, 2010**                                           |   |      |   |    |   |     |   |   |    |   |     |   |   |     |   |   |    |   |     |   |   |      |
|-----------------------------------------------------------------|--------|-----------|--------|---------|--------|----------|--------|--------|---------|--------|----------|--------|--------|----------|--------|--------|---------|--------|----------|--------|--------|-----------|
| Investments        in unconsolidated entities controlled by Eni |   | 217       |   | 32      |   | (3       | )      |   | 75      |   | (18      | )      |   | (38      | )      |   | 9       |   | (18      | )      |   | 256       |
| Joint ventures                                                  |   | 3,327     |   | 44      |   | (526     | )      |   | 379     |   | (124     | )      |   | (312     | )      |   | 124     |   | (177     | )      |   | 2,735     |
| Associates                                                      |   | 2,284     |   | 187     |   | (33      | )      |   | 263     |   | (7       | )      |   | (130     | )      |   | 81      |   | 32       |   |   | 2,677     |
|                                                            |   | **5,828** |   | **263** |   | **(562** | **)**  |   | **717** |   | **(149** | **)**  |   | **(480** | **)**  |   | **214** |   | **(163** | **)**  |   | **5,668** |
| **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** |
|                                                            |   |           |   |         |   |          |        |   |         |   |          |        |   |          |        |   |         |   |          |        |   |           |

Addition for the year of euro 235 million mainly related to acapital contribution made to Angola LNG Ltd (euro 129 million)which is currently engaged in building a liquefaction plant inorder to monetize Eni’s gas reserves in that country(Eni’s interest in the project being 13.6%). Other capitalcontributions related to the subscription of the new companiesZagoryanska Petroleum BV (euro 30 million), Est Più Società perAzioni (euro 29 million) and Pokrovskoe Petroleum BV (euro 26million).

Divestments and reimbursements of equity-accounted investmentsof euro 88 million mainly pertained to the capital reimbursementof Eteria Parohis Aeriou Thessalonikis AE (euro 34 million) andthe sale of Viscolube SpA (euro 32 million).

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Share of profit of equity-accounted investments and thedecrease following the distribution of the dividends pertained tothe following companies:

| (euro        million) |    | **Dec. 31, 2010** |         | **Dec. 31, 2011** |
|-----------------------|--------------|-------------------|--------------|-------------------|
|             |    |                   |    |                   |

| **  ** | **  ** | **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             |   | 116     |   | 126     |   | 50.00  |   | 152     |   | 148     |   | 50.00  |
|--------------------------------------|--------|---------|--------|---------|--------|--------|--------|---------|--------|---------|--------|--------|
| Galp        Energia SGPS SA          |   | 147     |   | 55      |   | 33.34  |   | 144     |   | 39      |   | 33.34  |
| United Gas Derivatives Co            |   | 47      |   | 44      |   | 33.33  |   | 49      |   | 44      |   | 33.33  |
| PetroSucre        SA                 |   | 15      |   | 7       |   | 26.00  |   | 37      |   |    |   | 26.00  |
| Blue Stream Pipeline Co BV           |   | 36      |   |    |   | 50.00  |   | 34      |   | 9       |   | 50.00  |
| Unimar Llc                           |   | 18      |   | 23      |   | 50.00  |   | 32      |   |    |   | 50.00  |
| Saipon Snc                           |   | 24      |   |    |   | 60.00  |   | 31      |   |    |   | 60.00  |
| Eni BTC        Ltd                   |   | 37      |   | 35      |   | 100.00 |   | 28      |   | 34      |   | 100.00 |
| Azienda Energia e Servizi Torino SpA |   | 26      |   | 24      |   | 49.00  |   | 23      |   | 26      |   | 49.00  |
| Supermetanol        CA               |   |    |   | 15      |   | 34.51  |   | 17      |   | 25      |   | 34.51  |
| Trans Austria Gasleitung GmbH        |   | 98      |   | 67      |   | 89.00  |   |    |   |    |   |   |
| Other        investments             |   | 153     |   | 84      |   |   |   | 131     |   | 128     |   |   |
|                                 |   | **717** |   | **480** |   |   |   | **678** |   | **453** |   |   |
|                                 |   |         |   |         |   |        |   |         |   |         |   |        |

Share of losses of equity-accounted investments related to thefollowing companies:

| (euro million) |   | **Dec. 31, 2010** |   | **Dec. 31, 2011** |
|----------------|--------|-------------------|--------|-------------------|
|           |   |                   |   |                   |

|   |   | **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  |
|--------------------------------------|--------|---------|--------|--------|--------|---------|--------|--------|
| GreenStream        BV                |   |    |   |   |   | 23      |   | 50.00  |
| Enirepsa Gas Ltd                     |   |    |   |   |   | 14      |   | 50.00  |
| CARDÓN IV        SA             |   | 40      |   | 50.00  |   | 12      |   | 50.00  |
| Pokrovskoe Petroleum BV              |   |    |   |   |   | 9       |   | 30.00  |
| Artic        Russia BV               |   | 14      |   | 60.00  |   | 7       |   | 60.00  |
| Immobiliare Est SpA                  |   | 10      |   | 100.00 |   | 1       |   | 100.00 |
| Super        Octanos CA              |   | 36      |   | 49.00  |   |    |   |   |
| Starstroi Llc                        |   | 14      |   | 50.00  |   |    |   |   |
| Altergaz        SA                   |   | 10      |   | 41.62  |   |    |   |   |
| Other investments                    |   | 25      |   |   |   | 10      |   |   |
|                                 |   | **149** |   |   |   | **106** |   |   |
|                                 |   |         |   |        |   |         |   |        |

Share of losses of equity-accounted investments in EnBW EniVerwaltungsgesellschaft mbH was driven by a reduced profitabilityoutlook due to the current downturn in the European gas market.GreenStream BV incurred losses caused by the shut down of theimport pipeline from Libya, throughout the peak of theCountry’s internal crisis (which lasted approximately 6months). The GreenStream pipeline was restarted the last part ofthe year.

Other changes of euro 185 million included the full write-downof the book value, recognized as "income (expense) frominvestments", of Ceska Rafinerska AS in relation to theimpairment test of the relevant CGU due to management’sexpectation of incurring future losses driven by a negativeoutlook for the refining segment (euro 157 million). The transferto investments in unconsolidated controlled entities of Eni MedioOriente SpA occurred in 2011 following the exclusion from thescope of consolidation due to immateriality (euro 11 million).

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List of equity-accounted investments: 

| (euro        million) | **Dec. 31, 2010** |   | **Dec. 31, 2011** |
|-----------------------|-------------------|--------|-------------------|
|                  |                   |   |                   |

|   | **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                                             |   | 104       |   | 34,000,000    |   | 100.00 |   | 100       |   | 34,000,000    |   | 100.00 |
| - Eni BBI Ltd                                                    |   | 28        |   | 1,200,000     |   | 100.00 |   |      |   | 1             |   | 100.00 |
| - Other        investments (*)                                   |   | 124       |   |          |   |   |   | 122       |   |          |   |   |
|                                                             |   | **256**   |   |          |   |   |   | **222**   |   |          |   |   |
| Joint        ventures:                                           |   |      |   |          |   |   |   |      |   |          |   |   |
| - Blue Stream Pipeline Co BV                                     |   | 435       |   | 1,000         |   | 50.00  |   | 476       |   | 1,000         |   | 50.00  |
| - Unión        Fenosa Gas SA                                |   | 468       |   | 273,100       |   | 50.00  |   | 465       |   | 273,100       |   | 50.00  |
| - Artic Russia BV                                                |   | 445       |   | 12,000        |   | 60.00  |   | 428       |   | 12,000        |   | 60.00  |
| - Azienda        Energia e Servizi Torino SpA                    |   | 172       |   | 54,150,000    |   | 49.00  |   | 169       |   | 54,150,000    |   | 49.00  |
| - Toscana Energia SpA                                            |   | 155       |   | 70,304,854    |   | 48.13  |   | 159       |   | 70,304,854    |   | 48.08  |
| - Eteria        Parohis Aeriou Thessalonikis AE                  |   | 160       |   | 150,846,500   |   | 49.00  |   | 130       |   | 116,546,500   |   | 49.00  |
| - Raffineria di Milazzo ScpA                                     |   | 128       |   | 175,000       |   | 50.00  |   | 130       |   | 175,000       |   | 50.00  |
| -        GreenStream BV                                          |   | 147       |   | 100,000,000   |   | 50.00  |   | 128       |   | 100,000,000   |   | 50.00  |
| - Unimar Llc                                                     |   | 74        |   | 50            |   | 50.00  |   | 111       |   | 50            |   | 50.00  |
| - CARDÓN        IV SA                                       |   | 17        |   | 4,305         |   | 50.00  |   | 74        |   | 6,455         |   | 50.00  |
| - Supermetanol CA                                                |   | 66        |   | 49,000,000    |   | 34.51  |   | 59        |   | 49,000        |   | 34.51  |
| - Eteria        Parohis Aeriou Thessalias AE                     |   | 43        |   | 38,445,008    |   | 49.00  |   | 45        |   | 38,445,008    |   | 49.00  |
| - Zagoryanska Petroleum BV                                       |   |      |   |          |   |   |   | 32        |   | 10,800        |   | 60.00  |
| - Est Più        Società per Azioni                    |   |      |   |          |   |   |   | 30        |   | 2,940,000     |   | 70.00  |
| - Saipon Snc                                                     |   | 21        |   | 12,000        |   | 60.00  |   | 30        |   | 12,000        |   | 60.00  |
| - EnBW Eni        Verwaltungsgesellschaft mbH                    |   | 285       |   | 1             |   | 50.00  |   |      |   |          |   |   |
| - Starstroi Llc                                                  |   | 19        |   | 1             |   | 50.00  |   |      |   |          |   |   |
| - Other        investments (*)                                   |   | 100       |   |          |   |   |   | 136       |   |          |   |   |
|                                                             |   | **2,735** |   |          |   |   |   | **2,602** |   |          |   |   |
| Associates:                                                      |   |      |   |          |   |   |   |      |   |          |   |   |
| - Galp Energia SGPS SA                                           |   | 1,005     |   | 276,472,161   |   | 33.34  |   | 1,103     |   | 276,472,161   |   | 33.34  |
| - Angola        LNG Ltd                                          |   | 841       |   | 961,209,900   |   | 13.60  |   | 1,008     |   | 1,141,284,004 |   | 13.60  |
| - PetroSucre SA                                                  |   | 198       |   | 26,000        |   | 26.00  |   | 244       |   | 5,727,800     |   | 26.00  |
| - EnBW Eni        Verwaltungsgesellschaft mbH                    |   |      |   |          |   |   |   | 237       |   | 1             |   | 50.00  |
| - United Gas Derivatives Co                                      |   | 94        |   | 950,000       |   | 33.33  |   | 102       |   | 950,000       |   | 33.33  |
| -        Fertilizantes Nitrogenados de Oriente CEC               |   | 68        |   | 1,933,662,121 |   | 20.00  |   | 68        |   | 1,933,662,121 |   | 20.00  |
| - ACAM Gas SpA                                                   |   | 48        |   | 3,336,410     |   | 49.00  |   | 48        |   | 3,336,410     |   | 49.00  |
| -        Distribuidora de Gas del Centro SA                      |   | 32        |   | 50,303,329    |   | 31.35  |   | 31        |   | 50,303,329    |   | 31.35  |
| - Termica Milazzo Srl                                            |   | 40        |   | 9,296,400     |   | 40.00  |   | 26        |   | 9,296,400     |   | 40.00  |
| - Gaz de        Bordeaux SAS                                     |   | 27        |   | 257,576       |   | 34.00  |   | 26        |   | 257,576       |   | 34.00  |
| - Rosetti Marino SpA                                             |   | 24        |   | 800,000       |   | 20.00  |   | 25        |   | 800,000       |   | 20.00  |
| - Ceska        Rafinerska AS                                     |   | 189       |   | 303,301       |   | 32.44  |   |      |   | 303,301       |   | 32.44  |
| - Other investments (*)                                          |   | 111       |   |          |   |   |   | 101       |   |          |   |   |
|                                                             |   | **2,677** |   |          |   |   |   | **3,019** |   |          |   |   |
|                                                             |   | **5,668** |   |          |   |   |   | **5,843** |   |          |   |   |
|                                                             |   |           |   |               |   |        |   |           |   |               |   |        |

|    |    |                                                                            |
|--------------|--------------|--------------------------------------------------------------------------------------|
| (*)          |    | Each        individual amount included herein did not exceed euro 25        million. |

Carrying amounts of investments in unconsolidated entities,including entities controlled by Eni, joint ventures andassociates, comprised differences between the purchase price ofrelevant shareholdings and the corresponding Eni’s share inthe net equity of each entities amounting to euro 512 million, ofwhich euro 354 million referred to goodwill. Such differencesprimarily related to Unión Fenosa Gas SA for euro 195 million ofgoodwill, EnBW Eni Verwaltungsgesellschaft mbH for euro 174million (of which: goodwill euro 16 million) and Galp EnergiaSGPS SA for euro 106 million (goodwill).

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The fair value of an investment listed on a regulated exchangemarket was as follows:

|         |         | **Shares**(No.) |         | **Ownership**        (%) |         | **Price        per share**        (euro) |         | **Fair        value**        (euro million) |
|--------------|--------------|-----------------|--------------|--------------------------|--------------|------------------------------------------|--------------|---------------------------------------------|
|    |    |                 |    |                          |    |                                          |    |                                             |

| Galp Energia SGPS SA |   | 276,472,161 |   | 33.34 |   | 11.38 |   | **3,146** |
|----------------------|--------|-------------|--------|-------|--------|-------|--------|-----------|
|                 |   |             |   |       |   |       |   |           |

The table below sets out the provisions forlosses included in the provisions for contingencies of euro 151million (euro 124 million at December 31, 2010), primarilyrelated to the following equity-accounted investments:

| (euro million) |   | **Dec. 31, 2010** |   | **Dec. 31, 2011** |
|----------------|--------|-------------------|--------|-------------------|
|           |   |                   |   |                   |

| Industria Siciliana Acido Fosforico - ISAF - SpA        (in liquidation) |   | 59      |   | 100     |
|--------------------------------------------------------------------------|--------|---------|--------|---------|
| Southern        Gas Constructors Ltd                                     |   | 31      |   | 11      |
| Charville - Consultores e Serviços Lda                              |   | 12      |   | 7       |
| Other        investments                                                 |   | 22      |   | 33      |
|                                                                     |   | **124** |   | **151** |
|                                                                     |   |         |   |         |

**Other investments**

| (euro        million) | **Net book amount at the        beginning of the year** |   | **Additions** |   | **Currency translation        differences** |   | **Other changes** |   | **Net book amount at the        end of the year** |   | **Gross book amount         at the end of the year** |   | **Accumulated impairment        charges** |
|-----------------------|---------------------------------------------------------|--------|---------------|--------|---------------------------------------------|--------|-------------------|--------|---------------------------------------------------|--------|------------------------------------------------------|--------|-------------------------------------------|
|                  |                                                         |   |               |   |                                             |   |                   |   |                                                   |   |                                                      |   |                                           |

| **December 31, 2010**                                           |   |    |   |   |   |   |   |   |    |   |   |    |   |    |   |   |
|-----------------------------------------------------------------|--------|---------|--------|--------|--------|--------|--------|--------|---------|--------|--------|---------|--------|---------|--------|--------|
| Investments        in unconsolidated entities controlled by Eni |   | 44      |   |   |   | 2      |   |   | (17     | )      |   | 29      |   | 29      |   |   |
| Associates                                                      |   | 8       |   |   |   | 1      |   |   | 1       |   |   | 10      |   | 18      |   | 8      |
| Other        investments                                        |   | 364     |   | 4      |   | 16     |   |   | (1      | )      |   | 383     |   | 390     |   | 7      |
|                                                            |   | **416** |   | **4**  |   | **19** |   |   | **(17** | **)**  |   | **422** |   | **437** |   | **15** |
| **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** |
|                                                            |   |         |   |        |   |        |        |   |         |        |   |         |   |         |   |        |

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.

The net carrying amount of other investments of euro 399million (euro 422 million at December 31, 2010) was related tothe following entities:

| (euro        million) | **Dec. 31, 2010** |   | **Dec. 31, 2011** |
|-----------------------|-------------------|--------|-------------------|
|                  |                   |   |                   |

|   | **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 (*) |   | **29**  |   |        |   |   |   | **3**   |   |        |   |   |
|---------------------------------------------------------------------|--------|---------|--------|-------------|--------|--------|--------|---------|--------|-------------|--------|--------|
| Associates                                                          |   | 10      |   |        |   |   |   | **13**  |   |        |   |   |
| Other investments:                                                  |   |    |   |        |   |   |   |    |   |        |   |   |
| -        Interconnector (UK) Ltd                                    |   | 136     |   | 2,050,017   |   | 16.07  |   | 136     |   | 2,050,017   |   | 16.07  |
| - Nigeria LNG Ltd                                                   |   | 89      |   | 118,373     |   | 10.40  |   | 91      |   | 118,373     |   | 10.40  |
| - Darwin        LNG Pty Ltd                                         |   | 79      |   | 213,995,164 |   | 10.99  |   | 73      |   | 213,995,164 |   | 10.99  |
| - other (*)                                                         |   | 79      |   |        |   |   |   | 83      |   |        |   |   |
|                                                                |   | **383** |   |        |   |   |   | **383** |   |        |   |   |
|                                                                |   | **422** |   |        |   |   |   | **399** |   |        |   |   |
|                                                                |   |         |   |             |   |        |   |         |   |             |   |        |

|    |    |                                                                            |
|--------------|--------------|--------------------------------------------------------------------------------------|
| (*)          |    | Each        individual amount included herein did not exceed euro 25        million. |

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Provisions for losses related to otherinvestments, included within the provisions for contingencies,amounted to euro 21 million (euro 76 million at December 31,2010) and were primarily in relation to the following entities:

| (euro million) |   | **Dec. 31, 2010** |   | **Dec. 31, 2011** |
|----------------|--------|-------------------|--------|-------------------|
|           |   |                   |   |                   |

| Caspian Pipeline Consortium R - Closed Joint        Stock Co |   | 19     |   | 16     |
|--------------------------------------------------------------|--------|--------|--------|--------|
| Eni BB Ltd        (in liquidation)                           |   | 28     |   |   |
| Other investments                                            |   | 29     |   | 5      |
|                                                         |   | **76** |   | **21** |
|                                                         |   |        |   |        |

**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, 2010** |   | **Dec. 31, 2011** |
|----------------|--------|-------------------|--------|-------------------|
|           |   |                   |   |                   |

|   |   | Unconsolidated entities controlled         by Eni |   | Joint ventures |   | Associates |   | Unconsolidated entities controlled         by Eni |   | Joint ventures |   | Associates |
|--------|--------|---------------------------------------------------|--------|----------------|--------|------------|--------|---------------------------------------------------|--------|----------------|--------|------------|
|   |   |                                                   |   |                |   |            |   |                                                   |   |                |   |            |

| Total assets              |   | 2,383 |   |   | 5,711 |   | 5,087 |   | 2,393 |   |   | 5,655 |   | 6,165 |
|---------------------------|--------|-------|--------|--------|-------|--------|-------|--------|-------|--------|--------|-------|--------|-------|
| Total        liabilities  |   | 2,193 |   |   | 3,022 |   | 2,410 |   | 2,279 |   |   | 3,085 |   | 3,144 |
| Net sales from operations |   | 113   |   |   | 3,497 |   | 5,134 |   | 86    |   |   | 3,011 |   | 6,347 |
| Operating        profit   |   | (9    | )      |   | 434   |   | 323   |   | (2    | )      |   | 484   |   | 316   |
| Net profit                |   | 32    |   |   | 252   |   | 225   |   | 41    |   |   | 299   |   | 234   |
|                      |   |       |        |   |       |   |       |   |       |        |   |       |   |       |

The total assets and liabilities ofunconsolidated controlled entities of euro 2,393 million and euro2,279 million, respectively (euro 2,383 million and euro 2,193million at December 31, 2010) pertained to entities acting assole-operator in the management of oil and gas contracts for euro2,208 million and euro 2,096 million (euro 2,172 million and euro2,054 million at December 31, 2010). The residual amountpertained to not significant entities that were excluded from thescope of consolidation for the reasons described under Note 1– Basis of presentation.

 

**18 Other financial assets**

| (euro million) |   | **Dec. 31, 2010** |   | **Dec. 31, 2011** |
|----------------|--------|-------------------|--------|-------------------|
|           |   |                   |   |                   |

| Receivables for financing operating activities |   | 1,488     |   | 1,516     |
|------------------------------------------------|--------|-----------|--------|-----------|
| Securities        held for operating purposes  |   | 35        |   | 62        |
|                                           |   | **1,523** |   | **1,578** |
|                                           |   |           |   |           |

Receivables for financing operating activities are stated netof the valuation allowance for doubtful accounts of euro 32million (the same amount as of December 31, 2010).

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Operating financing receivables of euro 1,516 million (euro1,488 million at December 31, 2010) primarily pertained to loansgranted by the Exploration & Production segment (euro 826million), the Gas & Power segment (euro 517 million) and theRefining & Marketing segment (euro 83 million) andreceivables for financial leasing for euro 47 million (euro 78million at December 31, 2010). Financing receivables granted tounconsolidated subsidiaries, joint ventures and associatesamounted to euro 694 million. Receivables for financial leasingpertained to the disposal of the Belgian gas network by FinpipeGIE. 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                                   |   | 31     |   | 47     |   | 78     |
|--------------------------------------------------------|--------|--------|--------|--------|--------|--------|
| Interests                                              |   | 5      |   | 5      |   | 10     |
| **Undiscounted value of future lease        payments** |   | **36** |   | **52** |   | **88** |
|                                                   |   |        |   |        |   |        |

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 under Note 9– Trade and other receivables.

Receivables for financing operating activities in currenciesother than euro amounted to euro 1,338 million (euro 1,128million at December 31, 2010).

Receivables for financing operating activities due beyond fiveyears amounted to euro 896 million (euro 823 million at December31, 2010).

The valuation at fair value of financing receivables of euro1,574 million has been determined based on the present value ofexpected future cash flows discounted at rates ranging from 0.7%to 3.1% (0.8% and 4.1% at December 31, 2010).

Receivables with related parties are described under Note 42– Transactions with related parties.

Securities of euro 62 million (euro 35 million at December 31,2010), designated as held-to-maturity investments, are listedbonds issued by the Italian Government (euro 26 million) andforeign governments (euro 36 million), of which Belgium euro 10million, Spain euro 9 million and France euro 5 million.

Securities with a maturity beyond five years amounted to euro24 million.

The valuation at fair value of financial securities hasresulted in marginal effects. The fair value of securities wasderived from quoted market prices.

**19 Deferred tax assets**Deferred tax assets are stated net of amounts of deferred taxliabilities that can be offset for euro 4,045 million (euro 3,421million at December 31, 2010).

| (euro        million) |   | **Amount at         Dec. 31, 2010** |   | **Additions** |   | **Deductions** |   | **Currency translation differences** |   | **Other changes** |   | **Amount at         Dec. 31, 2011** |
|-----------------------|--------|-------------------------------------|--------|---------------|--------|----------------|--------|--------------------------------------|--------|-------------------|--------|-------------------------------------|
|                  |   |                                     |   |               |   |                |   |                                      |   |                   |   |                                     |

|   |   | **4,864** |   | 2,036 |   | (882 | ) |   | 145 |   | (649) |   | **5,514** |
|--------|--------|-----------|--------|-------|--------|------|---|--------|-----|--------|-------|--------|-----------|
|   |   |           |   |       |   |      |   |   |     |   |       |   |           |

Deferred tax assets are described under Note 29 –Deferred tax liabilities.

Income tax expenses are described under Note 39 – Incometaxes.

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**20 Other non-current receivables**

| (euro million) |   | **Dec. 31, 2010** |   | **Dec. 31, 2011** |
|----------------|--------|-------------------|--------|-------------------|
|           |   |                   |   |                   |

| Tax receivables from:                                    |   |      |   |      |
|----------------------------------------------------------|--------|-----------|--------|-----------|
| - Italian        tax authorities                         |   |      |   |      |
| *. income tax*                                           |   | *14*      |   | *16*      |
| *.        interest on tax credits*                       |   | *65*      |   | *66*      |
|                                                     |   | **79**    |   | **82**    |
| - foreign        tax authorities                         |   | 106       |   | 72        |
|                                                     |   | **185**   |   | **154**   |
| Other        receivables:                                |   |      |   |      |
| - related to divestments                                 |   | 800       |   | 535       |
| - other        non-current                               |   | 224       |   | 258       |
|                                                     |   | **1,024** |   | **793**   |
| Fair value        of non-hedging and trading derivatives |   | 420       |   | 714       |
| Fair value of cash flow hedge derivatives                |   | 102       |   | 33        |
| Other        asset                                       |   | 1,624     |   | 2,531     |
|                                                     |   | **3,355** |   | **4,225** |
|                                                     |   |           |   |           |

Receivables originated from divestments amounted to euro 535million and comprised: (i) the residual outstanding amount ofeuro 302 million recognized following the compensation agreedwith the Republic of Venezuela for the expropriated Daciónoilfield. The receivable accrues interests at market conditionsas the collection has been fractionated in installments. Asagreed by the parties, the reimbursement is in kind throughequivalent assignment of volumes of crude oil. In the 2011, Enicollected nine loads of oil for a total amount equal to euro 187million (US$260 million). In January 2012, Eni collected afurther load for an amount equal to US$29 million. Negotiationsfor further equivalent collections of hydrocarbons are ongoing;and (ii) the long-term portion of a receivable related to thedivestment of the 1.71% interest in the Kashagan project to thelocal partner KazMunaiGas on the basis of the agreements definedwith the international partners of the North Caspian Sea PSA andthe Kashagan government, which became effective from January 1,2008 (euro 220 million). The reimbursement of the receivable isprovided for in three annual installments commencing from thedate of the production start-up which is planned at the end of2012 or in the first months of 2013. The receivable accruesinterest income at market rates. The short-term portion isdisclosed under Note 9 – Trade and other receivables.

The fair values of non-hedging derivative contracts andderivative contracts held for trading were as follows:

|   |   | **Dec. 31, 2010** |   | **Dec. 31, 2011** |
|--------|--------|-------------------|--------|-------------------|
|   |   |                   |   |                   |

| (euro        million) |    | Fair value |    | Purchase        commitments |    | Sale        commitments |    | Fair value |    | Purchase        commitments |    | Sale        commitments |
|-----------------------|--------------|------------|--------------|-----------------------------|--------------|-------------------------|--------------|------------|--------------|-----------------------------|--------------|-------------------------|
|                  |         |            |         |                             |         |                         |         |            |         |                             |         |                         |

| **Derivatives on exchange rate**      |   |    |   |      |   |      |   |    |   |      |   |      |
|---------------------------------------|--------|---------|--------|-----------|--------|-----------|--------|---------|--------|-----------|--------|-----------|
| Interest        currency swap         |   | 171     |   | 714       |   | 95        |   | 277     |   | 948       |   | 219       |
| Currency swap                         |   | 11      |   | 83        |   | 99        |   | 16      |   | 197       |   |      |
|                                  |   | **182** |   | **797**   |   | **194**   |   | **293** |   | **1,145** |   | **219**   |
| **Derivatives on interest rate**      |   |    |   |      |   |      |   |    |   |      |   |      |
| Interest        rate swap             |   | 83      |   | 691       |   | 3,615     |   | 82      |   | 713       |   | 300       |
|                                  |   | **83**  |   | **691**   |   | **3,615** |   | **82**  |   | **713**   |   | **300**   |
| **Derivatives        on commodities** |   |    |   |      |   |      |   |    |   |      |   |      |
| Over the counter                      |   | 134     |   | 1,578     |   | 119       |   | 326     |   | 3,010     |   | 922       |
| Future                                |   |    |   |      |   |      |   | 2       |   | 120       |   |      |
| Other                                 |   | 21      |   |      |   | 54        |   | 11      |   |      |   | 116       |
|                                  |   | **155** |   | **1,578** |   | **173**   |   | **339** |   | **3,130** |   | **1,038** |
|                                  |   | **420** |   | **3,066** |   | **3,982** |   | **714** |   | **4,988** |   | **1,557** |
|                                  |   |         |   |           |   |           |   |         |   |           |   |           |

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 and trading derivatives of euro 714million (euro 420 million at December 31, 2010) consisted of: (i)euro 680 million (euro 392 million at December 31, 2010) ofderivatives that did not meet the formal criteria to bedesignated as hedges under IFRS because they were entered into inorder to manage net 

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exposures to foreign currency exchange rates, interest ratesand commodity prices. Therefore, such derivatives did not relatedto specific trade or financing transactions; and (ii) euro 34million (euro 28 million at December 31, 2010) of commoditytrading derivatives entered by the Gas & Power segment inorder to optimize the economic margin as provided by the new riskmanagement strategy.

Fair value of cash flow hedge derivatives of euro 33 million(euro 102 million at December 31, 2010) regarded the Gas &Power segment. Further information is disclosed under Note 13– Other current assets. Fair value related to the contractsexpiring beyond 2012 is disclosed under Note 30 – Othernon-current liabilities; fair value related to the contractsexpiring in 2012 is disclosed under Note 13 – Other currentassets and under Note 25 – Other current liabilities. Theeffects of fair value evaluation of cash flow hedges aredisclosed under Note 32 – Shareholders’ equity and Note36 – Operating expenses.

The nominal values of cash flow hedge derivatives for purchaseand sale commitments were euro 204 million and euro 379 million,respectively.

Information on the hedged risks and the hedging policies isdisclosed under Note 34 – Guarantees, commitments –Risk factors.

Other non-current asset of euro 2,531 million (euro 1,624million at December 31, 2010) mainly included prepaymentsamounting to euro 2,227 million (euro 1,436 million at December31, 2010) that were made to gas suppliers upon triggering thetake-or-pay clause provided by the relevant long-term supplyarrangements. The increase was due to the circumstance that theCompany’s gas off-takes for the year were lower than theannual minimum quantity thus triggering the take-or-pay clause,net of limited amounts of volumes make-up on previous-yearprepayments. In accordance to those arrangements, the Company iscontractually required to off-take minimum annual quantities ofgas, or in case of failure is held to pay the whole price or afraction of it for the uncollected volumes up to the minimumannual quantity. The Company is entitled to off-take the pre-paidvolumes in future years alongside the contract execution, for itsentire duration or a shorter term as the case may be. Thecarrying amounts of those deferred costs, which are substantiallyequivalent to a receivable in-kind, are stated at the purchasecost or the net realizable value, whichever is lower. Prior-yearsimpairment losses are reversed up to the purchase cost, whenevermarket conditions indicate that impairment no longer exits or mayhave decreased. The amount of volumes pre-paid reflects ongoingdifficult market condition in the European gas sector due to weakdemand and strong competitive pressures fuelled by oversupplies.In future years, management plans to recover the pre-paid volumesonce current market imbalances have been absorbed, leveraging theexpected long-term growth outlook in gas demand, and a projectedsales expansion in target European markets and Italy supported bystrengthening the Company’s market leadership and animproved competitiveness of the Company’s cost position.

 

 

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**Current liabilities****21 Short-term debt**

| (euro million) |   | **Dec. 31, 2010** |   | **Dec. 31, 2011** |
|----------------|--------|-------------------|--------|-------------------|
|           |   |                   |   |                   |

| Banks                        |   | 1,950     |   | 786       |
|------------------------------|--------|-----------|--------|-----------|
| Commercial        papers     |   | 4,244     |   | 2,997     |
| Other financial institutions |   | 321       |   | 676       |
|                         |   | **6,515** |   | **4,459** |
|                         |   |           |   |           |

Short-term debt decreased by euro 2,056 million mainly due tonet repayments (euro 2,481 million), partially offset by a changein the scope of consolidation due to the divestment of Eni GasTransport Deutschland SpA, Eni Gas Transport GmbH and Eni GasTransport International SA (euro 170 million) and currency andtranslation differences (euro 138 million). Commercial papers ofeuro 2,997 million (euro 4,244 million at December 31, 2010) wereissued by the Group’s financial subsidiaries Eni FinanceInternational SA (euro 2,111 million) and Eni Finance USA Inc(euro 886 million).

The break-down by currency of short-term debt is providedbelow:

| (euro million) |   | **Dec. 31, 2010** |   | **Dec. 31, 2011** |
|----------------|--------|-------------------|--------|-------------------|
|           |   |                   |   |                   |

| Euro               |   | 2,919     |   | 2,896     |
|--------------------|--------|-----------|--------|-----------|
| U.S.        dollar |   | 3,403     |   | 1,430     |
| Other currencies   |   | 193       |   | 133       |
|               |   | **6,515** |   | **4,459** |
|               |   |           |   |           |

In 2011, the weighted average interest rate on short-term debtwas 1.1% (0.7% in 2010).

At December 31, 2011, Eni had undrawn committed anduncommitted borrowing facilities amounting to euro 2,551 millionand euro 9,346 million, respectively (euro 2,498 million and euro7,860 million at December 31, 2010). Those facilities boreinterest rates reflecting prevailing conditions on themarketplace. Charges for unutilized facilities were immaterial.

At December 31, 2011, Eni did not report non-fulfillment ofcovenants or contractual violations in relation to borrowingfacilities.

**22 Trade and other payables**

| (euro million) |   | **Dec. 31, 2010** |   | **Dec. 31, 2011** |
|----------------|--------|-------------------|--------|-------------------|
|           |   |                   |   |                   |

| Trade payables                           |   | 13,111     |   | 13,436     |
|------------------------------------------|--------|------------|--------|------------|
| Advances                                 |   | 3,139      |   | 2,313      |
| Other payables:                          |   |       |   |       |
| - related        to capital expenditures |   | 1,856      |   | 2,280      |
| - others                                 |   | 4,469      |   | 4,833      |
|                                     |   | **6,325**  |   | **7,163**  |
|                                     |   | **22,575** |   | **22,912** |
|                                     |   |            |   |            |

Increased trade receivables amounting to euro 325 millionprimarily related to the Gas & Power segment (euro 708million) and, as decrease, to the Refining & Marketingsegment (euro 309 million).

Advances of euro 2,313 million (euro 3,139 million at December31, 2010) related to prepayments and advances on contract work inprogress for euro 1,037 million and for euro 795 million,respectively (euro 1,539 million and euro 1,042 million atDecember 31, 2010, respectively) and other advances for euro 481million (euro 558 million at December 31, 2010). Advances oncontract work in progress were in respect of the Engineering& Construction segment. Other advances for euro 42million (euro 251 million at December 31, 2010) pertained to 

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prepayments received by gas customers relating to gasoff-takes for the year lower than the annual minimum quantitythus triggering the take-or-pay clause. The Company expects thatthose customers will make up the associated volumes within end ofthe next year.

Other payables were as follows:

| (euro million) |   | **Dec. 31, 2010** |   | **Dec. 31, 2011** |
|----------------|--------|-------------------|--------|-------------------|
|           |   |                   |   |                   |

| Payables due to:                                                          |   |      |   |      |
|---------------------------------------------------------------------------|--------|-----------|--------|-----------|
| -        suppliers in relation to investing activities                    |   | 1,224     |   | 1,544     |
| - joint venture operators in exploration and        production activities |   | 304       |   | 468       |
| - other                                                                   |   | 328       |   | 268       |
|                                                                      |   | **1,856** |   | **2,280** |
| Other        payables:                                                    |   |      |   |      |
| - joint venture operators in exploration and        production activities |   | 2,078     |   | 2,356     |
| -        employees                                                        |   | 571       |   | 589       |
| - social security entities                                                |   | 261       |   | 269       |
| -        non-financial government entities                                |   | 628       |   | 137       |
| - other                                                                   |   | 931       |   | 1,532     |
|                                                                      |   | **4,469** |   | **4,883** |
|                                                                      |   | **6,325** |   | **7,163** |
|                                                                      |   |           |   |           |

Other payables of euro 1,532 million (euro 931 million atDecember 31, 2010) included payables due to gas suppliers foreuro 719 million (euro 214 million at December 31, 2010) relatingto the triggering of the take-or-pay clause, net of the amountspaid by Eni for the year.

Payables to related parties are described under 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.

**23 Income taxes payable**

| (euro million) |   | **Dec. 31, 2010** |   | **Dec. 31, 2011** |
|----------------|--------|-------------------|--------|-------------------|
|           |   |                   |   |                   |

| Italian subsidiaries        |   | 300       |   | 390       |
|-----------------------------|--------|-----------|--------|-----------|
| Foreign        subsidiaries |   | 1,215     |   | 1,702     |
|                        |   | **1,515** |   | **2,092** |
|                        |   |           |   |           |

Income tax expenses are described under Note 39 – Incometaxes.

**24 Other taxes payable**

| (euro million) |   | **Dec. 31, 2010** |   | **Dec. 31, 2011** |
|----------------|--------|-------------------|--------|-------------------|
|           |   |                   |   |                   |

| Excise and customs duties     |   | 930       |   | 1,049     |
|-------------------------------|--------|-----------|--------|-----------|
| Other        taxes and duties |   | 729       |   | 847       |
|                          |   | **1,659** |   | **1,896** |
|                          |   |           |   |           |

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**25 Other current liabilities**

| (euro million) |   | **Dec. 31, 2010** |   | **Dec. 31, 2011** |
|----------------|--------|-------------------|--------|-------------------|
|           |   |                   |   |                   |

| Fair value of non-hedging and trading        derivatives |   | 656       |   | 1,668     |
|----------------------------------------------------------|--------|-----------|--------|-----------|
| Fair value        of cash flow hedge derivatives         |   | 475       |   | 121       |
| Other liabilities                                        |   | 489       |   | 448       |
|                                                     |   | **1,620** |   | **2,237** |
|                                                     |   |           |   |           |

The fair value of non-hedging derivativecontracts and derivatives contracts held for trading is presentedbelow:

|   |   | **Dec. 31, 2010** |   | **Dec. 31, 2011** |
|--------|--------|-------------------|--------|-------------------|
|   |   |                   |   |                   |

| (euro        million) |    | **Fair value** | **  ** | **Purchase        commitments** | **  ** | **Sale        commitments** | **  ** | **Fair value** | **  ** | **Purchase        commitments** | **  ** | **Sale        commitments** |
|-----------------------|--------------|----------------|------------------|---------------------------------|------------------|-----------------------------|------------------|----------------|------------------|---------------------------------|------------------|-----------------------------|
|                  |         |                |             |                                 |             |                             |             |                |             |                                 |             |                             |

| **Derivatives on exchange rate**        |   |    |   |      |   |      |   |      |   |      |   |       |
|-----------------------------------------|--------|---------|--------|-----------|--------|-----------|--------|-----------|--------|-----------|--------|------------|
| Currency        swap                    |   | 162     |   | 4,776     |   | 1,582     |   | 448       |   | 3,979     |   | 8,076      |
| Interest currency swap                  |   | 18      |   | 116       |   |      |   | 6         |   | 116       |   |       |
| Other                                   |   | 1       |   | 141       |   | 29        |   | 1         |   |      |   | 23         |
|                                    |   | **181** |   | **5,033** |   | **1,611** |   | **455**   |   | **4,095** |   | **8,099**  |
| **Derivatives        on interest rate** |   |    |   |      |   |      |   |      |   |      |   |       |
| Interest rate swap                      |   | 11      |   | 25        |   | 1,504     |   | 3         |   |      |   | 735        |
|                                    |   | **11**  |   | **25**    |   | **1,504** |   | **3**     |   |      |   | **735**    |
| **Derivatives on commodities**          |   |    |   |      |   |      |   |      |   |      |   |       |
| Over the        counter                 |   | 354     |   | 430       |   | 2,277     |   | 1,066     |   | 3,829     |   | 4,620      |
| Future                                  |   | 10      |   |      |   | 161       |   | 63        |   | 418       |   | 173        |
| Other                                   |   | 100     |   |      |   | 442       |   | 81        |   |      |   | 548        |
|                                    |   | **464** |   | **430**   |   | **2,880** |   | **1,210** |   | **4,247** |   | **5,341**  |
|                                    |   | **656** |   | **5,488** |   | **5,995** |   | **1,668** |   | **8,342** |   | **14,175** |
|                                    |   |         |   |           |   |           |   |           |   |           |   |            |

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 euro1,668 million (euro 656 million at December 31, 2010) consistedof: (i) euro 1,587 million (euro 621 million at December 31,2010) of derivatives 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;(ii) euro 80 million (euro 35 million at December 31, 2010), ofcommodity trading derivatives entered by the Gas & Powersegment in order to optimize the economic margin as provided bythe new risk management strategy; and (iii) euro 1 million, ofderivatives embedded in the pricing formulas of certain long-termsupply contracts of gas in the Exploration & Productionsegment.

The fair value of cash flow hedge derivatives amounted to euro121 million (euro 475 million at December 31, 2010) and pertainedto the Gas & Power segment for euro 119 million (euro 244million for the Gas & Power segment and euro 231 million forthe Exploration & Production segment at December 31, 2010).Fair value pertaining to the Gas & Power segment related toderivatives that were designated to hedge exchange rate andcommodity risk exposures as described under Note 13 – Othercurrent assets. A cash flow hedge transaction was settled in 2011in the Exploration & Production segment relating the sale of9 mmBBL part of a multi-year transaction which hedged 125.7 mmBBLin the 2008-2011 period. Fair value of contracts expiring by endof 2012 is disclosed under Note 13 – Other current assets;fair value of contracts expiring beyond 2012 is disclosed underNote 30 – Other non-current liabilities and under Note 20– Other non-current receivables. The effects of theevaluation at fair value of cash flow hedge derivatives aredisclosed under Note 32 – Shareholders’ equity andunder Note 36 – Operating expenses.

The nominal value of cash flow hedge derivatives referred topurchase and sale commitments for euro 3,409 million and euro 452million, respectively (euro 1,805 million and euro 849 million atDecember 31, 2010, respectively).

Information on the hedged risks and the hedging policies isdisclosed under Note 34 – Guarantees, commitments and risks– Risk factors.

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**Non-current liabilities****26 Long-term debt and current portion oflong-term debt**

| (euro million) |   | **At December 31,** |   |   |   | **Long-term maturity** |
|----------------|--------|---------------------|--------|--------|--------|------------------------|
|           |   |                     |   |   |   |                        |

|   |   | **Maturity range** |   | **2010** |   | **2011** |   | **Current maturity 2012** |   | **2013** |   | **2014** |   | **2015** |   | **2016** |   | **After** |   | **Total** |
|--------|--------|--------------------|--------|----------|--------|----------|--------|---------------------------|--------|----------|--------|----------|--------|----------|--------|----------|--------|-----------|--------|-----------|
|   |   |                    |   |          |   |          |   |                           |   |          |   |          |   |          |   |          |   |           |   |           |

| Banks                        |   | **2012-2029** |   | 7,224      |   | 9,654      |   | 1,601     |   | 1,329     |   | 3,681     |   | 629       |   | 1,285     |   | 1,129     |   | 8,053      |
|------------------------------|--------|---------------|--------|------------|--------|------------|--------|-----------|--------|-----------|--------|-----------|--------|-----------|--------|-----------|--------|-----------|--------|------------|
| Ordinary        bonds        |   | **2012-2040** |   | 13,572     |   | 15,049     |   | 397       |   | 1,607     |   | 1,337     |   | 2,231     |   | 1,492     |   | 7,985     |   | 14,652     |
| Other financial institutions |   | **2012-2023** |   | 472        |   | 435        |   | 38        |   | 57        |   | 46        |   | 48        |   | 48        |   | 198       |   | 397        |
|                         |   |          |   | **21,268** |   | **25,138** |   | **2,036** |   | **2,993** |   | **5,064** |   | **2,908** |   | **2,825** |   | **9,312** |   | **23,102** |
|                         |   |               |   |            |   |            |   |           |   |           |   |           |   |           |   |           |   |           |   |            |

Long-term debt, including the current portion of long-termdebt, of euro 25,138 million (euro 21,268 million at December 31,2010) increased by euro 3,870 million. The increase comprised newissuance net of repayments made for euro 3,585 million andcurrency translation differences relating foreign subsidiariesand debt denominated in foreign currency recorded byeuro-reporting subsidiaries for euro 143 million.

Debt from banks of euro 9,654 million included amount againstcommitted borrowing for euro 4,107 million.

Debt from other financial institutions of euro 435 million(euro 472 million at December 31, 2010) included euro 15 millionof finance lease transactions (euro 17 million at December 31,2010).

Eni entered into long-term borrowing facilities with theEuropean Investment Bank. In 2011, Eni entered into long-termborrowing facilities with Citibank Europe Plc providing forconditions similar to those applied by the European InvestmentBank. These borrowing facilities are subject to the maintenanceof certain financial ratios based on Eni’s consolidatedfinancial statements or a minimum level of credit rating.According to the agreements, should the Company lose the minimumcredit rating, new guarantees would be provided to be agreed uponwith the lenders. At December 31, 2010 and 2011, the amount ofshort and long-term debt subject to restrictive covenants waseuro 1,685 million and euro 2,316 million, respectively. Apossible non-compliance with those covenants would be immaterialto the Company’s ability to finance its operations. As ofthe balance sheet date, Eni was in compliance with thosecovenants.

Bonds of euro 15,049 million consisted of bonds issued withinthe Euro Medium Term Notes Program for a total of euro 10,802million and other bonds for a total of euro 4,247 million.

 

 

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The following table provides a break-down ofbonds by issuing entity, maturity date, interest rate andcurrency as of December 31, 2011:

|   |   | **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      |   | 61      |   |   | 1,561      |   | EUR    |   |   |   | 2016   |   |   |   | 5.000    |
| - Eni SpA                             |   | 1,500      |   | 45      |   |   | 1,545      |   | EUR    |   |   |   | 2013   |   |   |   | 4.625    |
| - Eni SpA                             |   | 1,500      |   | 9       |   |   | 1,509      |   | EUR    |   |   |   | 2019   |   |   |   | 4.125    |
| - Eni SpA                             |   | 1,250      |   | 68      |   |   | 1,318      |   | EUR    |   |   |   | 2014   |   |   |   | 5.875    |
| - Eni SpA                             |   | 1,250      |   | (1      | )      |   | 1,249      |   | EUR    |   |   |   | 2017   |   |   |   | 4.750    |
| - Eni SpA                             |   | 1,000      |   | 17      |   |   | 1,017      |   | EUR    |   |   |   | 2020   |   |   |   | 4.000    |
| - Eni SpA                             |   | 1,000      |   | 33      |   |   | 1,033      |   | EUR    |   |   |   | 2018   |   |   |   | 3.500    |
| - Eni        Finance International SA |   | 539        |   | 11      |   |   | 550        |   | GBP    |   | 2018   |   | 2021   |   | 4.750  |   | 6.125    |
| - Eni Finance International SA        |   | 459        |   | 3       |   |   | 462        |   | YEN    |   | 2012   |   | 2037   |   | 1.150  |   | 2.810    |
| - Eni        Finance International SA |   | 300        |   | 7       |   |   | 307        |   | EUR    |   | 2017   |   | 2031   |   | 3.750  |   | 5.600    |
| - Eni Finance International SA        |   | 197        |   | 3       |   |   | 200        |   | USD    |   | 2013   |   | 2015   |   | 4.450  |   | 4.800    |
| - Eni        Finance International SA |   | 16         |   |    |   |   | 16         |   | EUR    |   |   |   | 2015   |   |   |   | variable |
| - Eni Finance International SA        |   | 35         |   |    |   |   | 35         |   | USD    |   |   |   | 2013   |   |   |   | variable |
|                                  |   | **10,546** |   | **256** |   |   | **10,802** |   |   |   |   |   |   |   |   |   |     |
| *Other bonds:*                        |   |       |   |    |   |   |       |   |   |   |   |   |   |   |   |   |     |
| - Eni SpA                             |   | 1,000      |   | 11      |   |   | 1,011      |   | EUR    |   |   |   | 2015   |   |   |   | 4.000    |
| - Eni SpA                             |   | 1,109      |   | (5      | )      |   | 1,104      |   | EUR    |   |   |   | 2017   |   |   |   | 4.875    |
| - Eni SpA                             |   | 1,000      |   | (9      | )      |   | 991        |   | EUR    |   |   |   | 2015   |   |   |   | variable |
| - Eni SpA                             |   | 215        |   |    |   |   | 215        |   | EUR    |   |   |   | 2017   |   |   |   | variable |
| - Eni SpA                             |   | 348        |   | 1       |   |   | 349        |   | USD    |   |   |   | 2020   |   |   |   | 4.150    |
| - Eni SpA                             |   | 271        |   |    |   |   | 271        |   | USD    |   |   |   | 2040   |   |   |   | 5.700    |
| - Eni USA        Inc                  |   | 309        |   | (4      | )      |   | 305        |   | USD    |   |   |   | 2027   |   |   |   | 7.300    |
| - Eni UK Holding Plc                  |   | 1          |   |    |   |   | 1          |   | GBP    |   |   |   | 2013   |   |   |   | variable |
|                                  |   | **4,253**  |   | **(6**  | **)**  |   | **4,247**  |   |   |   |   |   |   |   |   |   |     |
|                                  |   | **14,799** |   | **250** |   |   | **15,049** |   |   |   |   |   |   |   |   |   |     |
|                                  |   |            |   |         |        |   |            |   |        |   |        |   |        |   |        |   |          |

As of December 31, 2011, bonds maturing within 18 months (euro1,705 million) were issued by Eni SpA (euro 1,545 million), EniFinance International SA (euro 159 million) and Eni UK HoldingPlc (euro 1 million). During the 2011, Eni SpA and Eni FinanceInternational SA issued bonds for euro 1,319 million and euro 174million, respectively.

The following table provides a break-down by currency oflong-term debt and its current portion and the related weightedaverage interest rates.

|   |   | **Dec. 31, 2010******(euro million) |   | **Average rate**        (%) |   | **Dec. 31, 2011******(euro million) |   | **Average rate**        (%) |
|--------|--------|-------------------------------------|--------|-----------------------------|--------|-------------------------------------|--------|-----------------------------|
|   |   |                                     |   |                             |   |                                     |   |                             |

| Euro                |   | 18,895     |   | 3.5    |   | 22,196     |   | 3.2    |
|---------------------|--------|------------|--------|--------|--------|------------|--------|--------|
| U.S.        dollar  |   | 1,415      |   | 5.7    |   | 1,926      |   | 5.0    |
| British pound       |   | 527        |   | 5.5    |   | 551        |   | 5.3    |
| Japanese        yen |   | 426        |   | 2.0    |   | 462        |   | 2.0    |
| Other currencies    |   | 5          |   | 6.8    |   | 3          |   | 6.3    |
|                |   | **21,268** |   |   |   | **25,138** |   |   |
|                |   |            |   |        |   |            |   |        |

As of December 31, 2011, Eni had undrawn committed long-termborrowing facilities of euro 3,201 million (euro 4,901 million atDecember 31, 2010). Those facilities bore interest ratesreflecting prevailing conditions on the marketplace. Charges forunutilized facilities were immaterial.

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Fair value of long-term debt, including the current portion oflong-term debt amounted to euro 27,103 million (euro 22,607million at December 31, 2010):

| (euro million) |   | **Dec. 31, 2010** |   | **Dec. 31, 2011** |
|----------------|--------|-------------------|--------|-------------------|
|           |   |                   |   |                   |

| Ordinary bonds               |   | 14,790     |   | 16,895     |
|------------------------------|--------|------------|--------|------------|
| Banks                        |   | 7,306      |   | 9,727      |
| Other financial institutions |   | 511        |   | 481        |
|                         |   | **22,607** |   | **27,103** |
|                         |   |            |   |            |

Fair value was calculated by discounting the expected futurecash flows at discount rates ranging from 0.7% to 3.1% (0.8% and4.1% at December 31, 2010).

At December 31, 2011, Eni did not pledge restricted depositsas collateral against its borrowings.

**Information on net borrowings**In assessing its capital structure, Eni uses net borrowings,which is a non-GAAP financial measure. Eni calculates netborrowings as total finance debt (short-term and long-term debt)derived from its Consolidated Financial Statements prepared inaccordance 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 a useful measure ofEni’s financial condition as it provides insight about thesoundness of Eni’s capital structure and the ways by 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 calculate 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.

| (euro million) |   | **Dec. 31, 2010** |   | **Dec. 31, 2011** |
|----------------|--------|-------------------|--------|-------------------|
|           |   |                   |   |                   |

|   |   | Current |   | Non-current |   | Total |   | Current |   | Non-current |   | Total |
|--------|--------|---------|--------|-------------|--------|-------|--------|---------|--------|-------------|--------|-------|
|   |   |         |   |             |   |       |   |         |   |             |   |       |

| A.     | Cash and cash equivalents                      |   | 1,549     |   |       |   | 1,549      |   | 1,500     |   |       |   | 1,500      |
|--------|------------------------------------------------|--------|-----------|--------|------------|--------|------------|--------|-----------|--------|------------|--------|------------|
| B.     | Available-for-sale        securities           |   | 109       |   |       |   | 109        |   | 37        |   |       |   | 37         |
| **C.** | **Liquidity (A+B)**                            |   | **1,658** |   |       |   | **1,658**  |   | **1,537** |   |       |   | **1,537**  |
| **D.** | **Financing        receivables**               |   | **6**     |   |       |   | **6**      |   | **28**    |   |       |   | **28**     |
| E.     | Short-term debt towards banks                  |   | 1,950     |   |       |   | 1,950      |   | 786       |   |       |   | 786        |
| F.     | Long-term        debt towards banks            |   | 499       |   | 6,725      |   | 7,224      |   | 1,601     |   | 8,053      |   | 9,654      |
| G.     | Bonds                                          |   | 410       |   | 13,162     |   | 13,572     |   | 397       |   | 14,652     |   | 15,049     |
| H.     | Short-term        debt towards related parties |   | 127       |   |       |   | 127        |   | 503       |   |       |   | 503        |
| I.     | Other short-term debt                          |   | 4,438     |   |       |   | 4,438      |   | 3,170     |   |       |   | 3,170      |
| L.     | Other        long-term debt                    |   | 54        |   | 418        |   | 472        |   | 38        |   | 397        |   | 435        |
| **M.** | **Total borrowings (E+F+G+H+I+L)**             |   | **7,478** |   | **20,305** |   | **27,783** |   | **6,495** |   | **23,102** |   | **29,597** |
| **N.** | **Net        borrowings (M-C-D)**              |   | **5,814** |   | **20,305** |   | **26,119** |   | **4,930** |   | **23,102** |   | **28,032** |
|   |                                           |   |           |   |            |   |            |   |           |   |            |   |            |

Available-for-sale securities of euro 37 million (euro 109million at December 31, 2010) 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 287 million(euro 308 million at December 31, 2010), of which euro 220million (euro 267 million at December 31, 2010) were held tohedge the loss reserve of Eni Insurance Ltd. Those securities areexcluded from the calculation above.

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Financing receivables of euro 28 million (euro 6 million atDecember 31, 2010) were held for non-operating purposes. TheCompany held at the reporting date certain financing receivableswhich were destined to operating purposes amounting to euro 630million (euro 656 million at December 31, 2010), of which euro345 million (euro 470 million at December 31, 2010) were inrespect of financing granted to unconsolidated entities whichexecuted capital projects and investments on behalf of Eni’sGroup companies and a euro 250 million cash deposit (euro 159million at December 31, 2010) to hedge the loss reserve of EniInsurance Ltd. Those financing receivables are excluded from thecalculation above.

**27 Provisions for contingencies**

| (euro million) |   | **Carrying amount at         Dec. 31, 2010** |   | **New or increased        provisions** |   | **Initial recognition and        changes in estimates** |   | **Accretion discount** |   | **Reversal of utilized        provisions** |   | **Reversal of unutilized        provisions** |   | **Currency translation        differences** |   | **Other changes** |   | **Carrying amount at         Dec. 31, 2011** |
|----------------|--------|----------------------------------------------|--------|----------------------------------------|--------|---------------------------------------------------------|--------|------------------------|--------|--------------------------------------------|--------|----------------------------------------------|--------|---------------------------------------------|--------|-------------------|--------|----------------------------------------------|
|           |   |                                              |   |                                        |   |                                                         |   |                        |   |                                            |   |                                              |   |                                             |   |                   |   |                                              |

| Provision for site restoration, abandonment and        social projects              |   | 5,741      |   |      |   | 803     |   | 253     |   |   | (153     | )      |   |     |   |   | 157     |   |   | (21      | )      |   | 6,780      |
|-------------------------------------------------------------------------------------|--------|------------|--------|-----------|--------|---------|--------|---------|--------|--------|----------|--------|--------|----------|--------|--------|---------|--------|--------|----------|--------|--------|------------|
| Provision        for environmental risks                                            |   | 3,104      |   | 206       |   |    |   | (3      | )      |   | (194     | )      |   | (22      | )      |   |    |   |   | (7       | )      |   | 3,084      |
| Provision for legal and other proceedings                                           |   | 692        |   | 241       |   |    |   |    |   |   | (123     | )      |   | (81      | )      |   | 9       |   |   | 336      |   |   | 1,074      |
| Provision        for taxes                                                          |   | 357        |   | 66        |   |    |   |    |   |   | (49      | )      |   | (1       | )      |   | 8       |   |   | (37      | )      |   | 344        |
| Loss adjustments and actuarial provisions for        Eni’s insurance companies |   | 398        |   | 4         |   |    |   |    |   |   | (59      | )      |   |     |   |   |    |   |   |     |   |   | 343        |
| Provision        for losses on investments                                          |   | 200        |   | 53        |   |    |   |    |   |   |     |   |   | (28      | )      |   |    |   |   | (53      | )      |   | 172        |
| Provision for redundancy incentives                                                 |   | 202        |   | 99        |   |    |   |    |   |   | (121     | )      |   | (19      | )      |   | 1       |   |   | 1        |   |   | 163        |
| Provision        for onerous contracts                                              |   | 108        |   | 77        |   |    |   |    |   |   | (64      | )      |   |     |   |   | 3       |   |   | 1        |   |   | 125        |
| Provision for OIL insurance cover                                                   |   | 79         |   | 20        |   |    |   |    |   |   |     |   |   | (1       | )      |   |    |   |   |     |   |   | 98         |
| Provision        for long-term construction contracts                               |   | 22         |   | 59        |   |    |   |    |   |   | (21      | )      |   |     |   |   | 1       |   |   | (1       | )      |   | 60         |
| Provision for coverage of unaccounted-for gas                                       |   | 31         |   |      |   |    |   |    |   |   |     |   |   |     |   |   |    |   |   | 23       |   |   | 54         |
| Provision        for the supply of goods                                            |   | 288        |   | 39        |   |    |   | (3      | )      |   | (33      | )      |   | (2       | )      |   |    |   |   | (261     | )      |   | 28         |
| Other (*)                                                                           |   | 570        |   | 232       |   |    |   |    |   |   | (132     | )      |   | (92      | )      |   | (2      | )      |   | (166     | **)**  |   | 410        |
|                                                                                |   | **11,792** |   | **1,096** |   | **803** |   | **247** |   |   | **(949** | **)**  |   | **(246** | **)**  |   | **177** | **)**  |   | **(185** | **)**  |   | **12,735** |
|                                                                                |   |            |   |           |   |         |   |         |        |   |          |        |   |          |        |   |         |        |   |          |        |   |            |

|    |    |                                                                             |
|--------------|--------------|---------------------------------------------------------------------------------------|
| (*)          |    | Each        individual amount included herein does not exceed euro 50        million. |

Provisions for site restoration, abandonment and socialprojects amounted to euro 6,780 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 6,404million). The additions for the year amounted to euro 803 millionand were primarily due to estimates revisions and the initialrecognition of abandonment costs taken in connection with newfield start-up in the Exploration & Production segment foreuro 918 million. Furthermore, costs associated with certain ofsocial projects were recognized pertaining to oil developmentprograms in Val d’Agri and in the North Adriatic area withthe Basilicata Region, the Emilia Romagna Region and the Provinceand Municipality of Ravenna for euro 19 million. Also a decreasewas recognized due to changed timing assumptions of futureexpenditures for dismantling and restoring gas storage sites ofStoccaggi Gas Italia SpA for euro 137 million (for moreinformation see Note 16 – Intangible assets). An amount ofeuro 253 million was recognized through profit and loss asaccretion charge of the period. The discount rates adopted rangedfrom 1.4% to 9.3% (from 2.1% to 8.9% at December 31, 2010). Mainexpenditures associated with site restoration and abandonmentoperations will be incurred over a 30-year period starting from2017.

Provisions for environmental risks amounted to euro 3,084million. 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.Such provision comprised the cost estimate relating to a proposalfor a global environmental transaction filled with the Ministryof the Environment, Land and Sea on January 26, 2011, accordingto Article 2 of Law Decree 208/2008 (euro 1,109 million). Inaccordance with the Law, the competent technical offices, inparticular The Institute for Environmental Protection andResearch (ISPRA) and 

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the Evaluator Commission for investment supporting planningand management of environmental activities (COVIS) started apreliminary assessment which is currently ongoing. At December31, 2011, provisions for environmental risks were primarilyrelated to Syndial SpA (euro 2,497 million) and the Refining& Marketing segment (euro 404 million). Additions of euro 206million primarily related to Syndial SpA (euro 142 million) andthe Refining & Marketing segment (euro 35 million). Reversalof utilized provisions of euro 194 million primarily related toSyndial SpA (euro 88 million) and the Refining & Marketingsegment (euro 75 million).

Provisions for legal and other proceedings of euro 1,074million comprised the expected liabilities due to failure toperform certain contractual obligations and estimated futurelosses on pending litigation including legal, antitrust andadministrative matters. These provisions represented theCompany’s best estimate of the expected probable liabilitiesand primarily related to the Gas & Power segment (euro 555million) and Syndial SpA (euro 281 million). Additions of euro241 million included a charge amounting to euro 69 millionfollowing a sentence recently issued by the Court of Justice ofthe European Community in connection with an antitrust proceedingin the European sector of rubbers. The matter is fully disclosedunder Note 34 – Guarantees, commitments and risks –Legal Proceedings. Reversals of utilized and unutilized provisioncomprised reversals for euro 65 million and euro 10 million,respectively, related to the settlement of theAgrifactoring/Serfactoring proceeding. Other changes for the yearof euro 336 million included an amount reclassified from theParent Company Eni SpA which was previously reported in theprovision for the supply of goods (see below) (euro 261 million).

Provisions for taxes of euro 344 million primarily includedcharges for unsettled tax claims in connection with uncertainapplications of the tax regulation for foreign subsidiaries ofthe Exploration & Production segment (euro 254 million) andof the Engineering & Construction segment (euro 64 million).

Loss adjustments and actuarial provisions of Eni’sinsurance companies of euro 343 million represented the expectedliabilities accrued on the basis for third parties claims. Suchliabilities were partly offset by a receivable of euro 90 millionrecognized towards insurance companies for reinsurance contracts.

Provisions for losses on investments of euro 172 million weremade with respect to certain investees for which expected orincurred losses exceeded carrying amounts (more information isdisclosed under Note 17 – Investments).

Provisions for redundancy incentives of euro 163 million wererecognized with a restructuring program involving the Italianpersonnel for the period 2010-2011 in compliance with Law No.223/1991 which provided a scheme for early retirement. Anaddition amounting to euro 99 was accrued to adjustment theexpected liability to take account of changed retirementrequirements introduced by Law 214/2011.

Provisions for onerous contracts of euro 125 million relatedto the 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 the OIL mutual insurance scheme of euro 98million 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 long-term construction contracts of euro 60million related to the Engineering & Construction segment(euro 45 million) and the Exploration & Production segment(euro 15 million).

A provision of euro 54 million was accrued to take intoaccount the expected volumes of gas that Snam Rete Gas SpA isrequired to supply over the next two years to balance the lowervolumes of the network lost gas that will be charged to theshippers in the same period.

Provisions for the supply of goods in the amount of euro 28million included the estimated costs of supply contract revisionsmade by Eni SpA. Other changes of euro 261 million concerned areclassification to provision for legal and other proceedings.

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**28 Provisions for employee benefits**

| (euro million) |   | **Dec. 31, 2010** |   | **Dec. 31, 2011** |
|----------------|--------|-------------------|--------|-------------------|
|           |   |                   |   |                   |

| TFR                                                                                           |   | 423       |   | 394       |
|-----------------------------------------------------------------------------------------------|--------|-----------|--------|-----------|
| Foreign        pension plans                                                                  |   | 295       |   | 334       |
| Supplementary medical reserve for Eni managers        (FISDE) and other foreign medical plans |   | 108       |   | 104       |
| Other        benefits                                                                         |   | 206       |   | 207       |
|                                                                                          |   | **1,032** |   | **1,039** |
|                                                                                          |   |           |   |           |

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 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.

 

 

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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** |
|-----------------------|--------|---------|------------|---------------------|------------|-----------------|------------|--------------------------------------------------|------------|--------------------|------------|-----------|
|                  |   |         |       |                     |       |                 |       |                                                  |       |                    |       |           |

| **2010**                                                                                    |   |    |   |   |      |   |   |     |   |   |    |   |   |    |   |   |      |   |
|---------------------------------------------------------------------------------------------|--------|---------|--------|--------|-----------|--------|--------|----------|--------|--------|---------|--------|--------|---------|--------|--------|-----------|--------|
| **Present        value of benefit liabilities and plan assets at beginning        of year** |   | **447** |   |   | **1,146** |   |   | **(500** | **)**  |   | **115** |   |   | **188** |   |   | **1,396** |   |
| Current cost                                                                                |   |    |   |   | 42        |   |   |     |   |   | 2       |   |   | 50      |   |   | 94        |   |
| Interest        cost                                                                        |   | 22      |   |   | 36        |   |   |     |   |   | 6       |   |   | 6       |   |   | 70        |   |
| Amendments                                                                                  |   |    |   |   | 9         |   |   |     |   |   |    |   |   |    |   |   | 9         |   |
| Expected        return on plan assets                                                       |   |    |   |   |      |   |   | (20      | )      |   |    |   |   |    |   |   | (20       | )      |
| Employee contributions                                                                      |   |    |   |   | 1         |   |   | (30      | )      |   |    |   |   |    |   |   | (29       | )      |
| Actuarial        gains/losses                                                               |   | 8       |   |   | (22       | )      |   | (4       | )      |   | 4       |   |   | 6       |   |   | (8        | )      |
| Benefits paid                                                                               |   | (42     | )      |   | (28       | )      |   | 9        |   |   | (7      | )      |   | (45     | )      |   | (113      | )      |
| Curtailments        and settlements                                                         |   |    |   |   | (113      | )      |   | 115      |   |   |    |   |   |    |   |   | 2         |   |
| Currency translation differences and other        changes                                   |   | (2      | )      |   | 38        |   |   | (38      | )      |   |    |   |   | 1       |   |   | (1        | )      |
| **Present        value of benefit liabilities and plan assets at end of        year**       |   | **433** |   |   | **1,109** |   |   | **(468** | **)**  |   | **120** |   |   | **206** |   |   | **1,400** |   |
| **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      | )      |
| Curtailments        and settlements                                                         |   |    |   |   |      |   |   |     |   |   |    |   |   |    |   |   |      |   |
| 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** |   |
|                                                                                        |   |         |        |   |           |        |   |          |        |   |         |        |   |         |        |   |           |        |

Other benefits of euro 207 million (euro 206million at December 31, 2010) primarily concerned the deferredmonetary incentive plan for euro 118 million (euro 126 million atDecember 31, 2010), Jubilee awards for euro 61 million (euro 59million at December 31, 2010) and the long-term incentive planfor euro 7 million (euro 2 million at December 31, 2010).

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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, 2010** |   | **Dec. 31, 2011** |   | **Dec. 31, 2010** |   | **Dec. 31, 2011** |   | **Dec. 31, 2010** |   | **Dec. 31, 2011** |   | **Dec. 31, 2010** |   | **Dec. 31, 2011** |
|-----------------------|--------|-------------------|--------|-------------------|--------|-------------------|--------|-------------------|--------|-------------------|--------|-------------------|--------|-------------------|--------|-------------------|
|                  |   |                   |   |                   |   |                   |   |                   |   |                   |   |                   |   |                   |   |                   |

| Present value of benefit obligations with plan        assets              |   |    |   |   |    |   |   | 874     |   |   | 877     |   |   |    |   |   |    |   |   |    |   |    |
|---------------------------------------------------------------------------|--------|---------|--------|--------|---------|--------|--------|---------|--------|--------|---------|--------|--------|---------|--------|--------|---------|--------|--------|---------|--------|---------|
| Present        value of plan assets                                       |   |    |   |   |    |   |   | (468    | )      |   | (570    | )      |   |    |   |   |    |   |   |    |   |    |
| **Net present value of benefit obligations with        plan assets**      |   |    |   |   |    |   |   | **406** |   |   | **307** |   |   |    |   |   |    |   |   |    |   |    |
| **Present        value of benefit obligations without plan assets**       |   | **433** |   |   | **391** |   |   | **235** |   |   | **233** |   |   | **120** |   |   | **118** |   |   | **206** |   | **207** |
| Actuarial gains (losses) not recognized                                   |   | (10     | )      |   | 3       |   |   | (273    | )      |   | (139    | )      |   | (9      | )      |   | (11     | )      |   |    |   |    |
| Past        service cost not recognized                                   |   |    |   |   |    |   |   | (73     | )      |   | (67     | )      |   | (3      | )      |   | (3      | )      |   |    |   |    |
| **Net liabilities recognized in provisions for        employee benefits** |   | **423** |   |   | **394** |   |   | **295** |   |   | **334** |   |   | **108** |   |   | **104** |   |   | **206** |   | **207** |
|                                                                      |   |         |        |   |         |        |   |         |        |   |         |        |   |         |        |   |         |        |   |         |   |         |

The net liability for foreign employee pension plans of euro334 million (euro 295 million at December 31, 2010) included theliabilities related to joint ventures operating in explorationand production activities for euro 121 million and euro 149million at December 31, 2010 and 2011, respectively. A receivableof an amount equivalent to such liability was recorded.

Costs charged to the profit and loss account were as follows:

| (euro        million) |   | **TFR** |   | **Foreign pension plans** |   | **FISDE and other foreign medical plans** |   | **Other benefits** |   | **Total** |
|-----------------------|--------|---------|--------|---------------------------|--------|-------------------------------------------|--------|--------------------|--------|-----------|
|                  |   |         |   |                           |   |                                           |   |                    |   |           |

| **2010**                                        |   |   |   |   |   |   |   |   |   |   |    |   |
|-------------------------------------------------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|---------|--------|
| Current        cost                             |   |   |   | 42     |   |   | 2      |   | 50     |   | 94      |   |
| Interest cost                                   |   | 22     |   | 36     |   |   | 6      |   | 6      |   | 70      |   |
| Expected        return on plan assets           |   |   |   | (20    | )      |   |   |   |   |   | (20     | )      |
| Amortization of actuarial gains (losses)        |   |   |   | 8      |   |   |   |   | 7      |   | 15      |   |
| Effect of        curtailments and settlements   |   |   |   | 5      |   |   |   |   |   |   | 5       |   |
|                                            |   | **22** |   | **71** |   |   | **8**  |   | **63** |   | **164** |   |
| **2011**                                        |   |   |   |   |   |   |   |   |   |   |    |   |
| Current cost                                    |   |   |   | 41     |   |   | 2      |   | 53     |   | 96      |   |
| Interest        cost                            |   | 20     |   | 39     |   |   | 6      |   | 4      |   | 69      |   |
| Expected return on plan assets                  |   |   |   | (17    | )      |   |   |   |   |   | (17     | )      |
| Amortization        of actuarial gains (losses) |   |   |   | 8      |   |   |   |   |   |   | 8       |   |
| Effect of curtailments and settlements          |   |   |   | 2      |   |   |   |   |   |   | 2       |   |
|                                            |   | **20** |   | **73** |   |   | **8**  |   | **57** |   | **158** |   |

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

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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 2012 were as follows:

| (%)    |   | **TFR** |   | **Foreign pension plans** |   | **FISDE and other foreign medical plans** |   | **Other benefits** |
|--------|--------|---------|--------|---------------------------|--------|-------------------------------------------|--------|--------------------|
|   |   |         |   |                           |   |                                           |   |                    |

| **2010**                                   |   |   |   |     |   |   |   |    |
|--------------------------------------------|--------|--------|--------|----------|--------|--------|--------|---------|
| Discount        rate                       |   | 4.8    |   | 2.7-14.0 |   | 4.8    |   | 1.8-4.8 |
| Expected return rate on plan assets        |   |   |   | 3.5-14.0 |   |   |   |    |
| Rate of        compensation increase       |   | 3.0    |   | 2.0-14.0 |   |   |   |    |
| Rate of price inflation                    |   | 2.0    |   | 0.8-13.0 |   | 2.0    |   | 2.0     |
| **2011**                                   |   |   |   |     |   |   |   |    |
| Discount rate                              |   | 4.8    |   | 2.6-15.5 |   | 4.8    |   | 3.6-4.8 |
| 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     |
|                                       |   |        |   |          |   |        |   |         |

Italian plans were based on mortality tables prepared byRagioneria Generale dello Stato (RG48), with the exception of themedical plan FISDE for which, starting from the end of 2011, wereadopted mortality tables prepared by Istat (Istat Proiettate eSelezionate - IPS55).

Expected return rates by plan assets have been determined byreference to quoted prices expressed in regulated markets. Planassets consisted of the following:

| (%)    |   | **Plan assets** |   | **Expected return** |
|--------|--------|-----------------|--------|---------------------|
|   |   |                 |   |                     |

| Securities  |   | 11.1      |   | 5.8-6.1  |
|-------------|--------|-----------|--------|----------|
| Bonds       |   | 57.5      |   | 2.0-12.3 |
| Real estate |   | 4.5       |   | 5.2-6.0  |
| Other       |   | 26.9      |   | 0.5-12.3 |
| **Total**   |   | **100.0** |   |     |
|        |   |           |   |          |

The actual return of the plan assets amounted to euro 24million (the same amount as of December 31, 2010).

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 the current costs and interest costs |   | 1  |   | (1  | ) |
|------------------------------------------------|--------|----|--------|-----|---|
| Impact on        net benefit obligation        |   | 15 |   | (12 | ) |

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

The amount expected to be accrued to employee benefit plansfor 2012 amounted to euro 121 million, of which euro 71 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** |
|-----------------------|--------|---------|--------|---------------------------|--------|-------------------------------------------|--------|--------------------|
|                  |   |         |   |                           |   |                                           |   |                    |

| **2007**                            |   |   |   |   |   |   |   |   |   |   |
|-------------------------------------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|
| Impact on        benefit obligation |   | (8     | )      |   | 6      |   |   |   |   |   |
| Impact on plan assets               |   |   |   |   | 3      |   |   |   |   |   |
| **2008**                            |   |   |   |   |   |   |   |   |   |   |
| Impact on benefit obligation        |   | 7      |   |   | 15     |   |   | 3      |   | 1      |
| Impact on        plan assets        |   |   |   |   | (62    | )      |   |   |   |   |
| **2009**                            |   |   |   |   |   |   |   |   |   |   |
| Impact on        benefit obligation |   | (7     | )      |   | 4      |   |   | 3      |   | 2      |
| Impact on plan assets               |   |   |   |   | (16    | )      |   |   |   |   |
| **2010**                            |   |   |   |   |   |   |   |   |   |   |
| Impact on benefit obligation        |   | (1     | )      |   | (31    | )      |   | 1      |   | 4      |
| Impact on        plan assets        |   |   |   |   | 3      |   |   |   |   |   |
| **2011**                            |   |   |   |   |   |   |   |   |   |   |
| Impact on        benefit obligation |   | 3      |   |   | (21    | )      |   | 2      |   |   |
| Impact on plan assets               |   |   |   |   | 10     |   |   |   |   |   |
|                                |   |        |        |   |        |        |   |        |   |        |

The present value of liabilities for employeebenefit plans and the fair value of plan assets consisted of thefollowing:

| (euro        million) |   | **Dec. 31, 2007** |   | **Dec. 31, 2008** |   | **Dec. 31, 2009** |   | **Dec. 31, 2010** |   | **Dec. 31, 2011** |
|-----------------------|--------|-------------------|--------|-------------------|--------|-------------------|--------|-------------------|--------|-------------------|
|                  |   |                   |   |                   |   |                   |   |                   |   |                   |

| **Present value of liabilities**             |   |      |   |   |      |   |   |      |   |   |      |   |   |      |   |
|----------------------------------------------|--------|-----------|--------|--------|-----------|--------|--------|-----------|--------|--------|-----------|--------|--------|-----------|--------|
| TFR                                          |   | 476       |   |   | 443       |   |   | 447       |   |   | 433       |   |   | 391       |   |
| Foreign pension plans                        |   | 621       |   |   | 802       |   |   | 1,146     |   |   | 1,109     |   |   | 1,110     |   |
| FISDE and        other foreign medical plans |   | 92        |   |   | 94        |   |   | 115       |   |   | 120       |   |   | 118       |   |
| Other benefits                               |   | 118       |   |   | 168       |   |   | 188       |   |   | 206       |   |   | 207       |   |
|                                         |   | **1,307** |   |   | **1,507** |   |   | **1,896** |   |   | **1,868** |   |   | **1,826** |   |
| **Fair value of plan assets**                |   |      |   |   |      |   |   |      |   |   |      |   |   |      |   |
| Foreign        pension plans                 |   | (362      | )      |   | (453      | )      |   | (500      | )      |   | (468      | )      |   | (570      | )      |
|                                         |   | **(362**  | **)**  |   | **(453**  | **)**  |   | **(500**  | **)**  |   | **(468**  | **)**  |   | **(570**  | **)**  |
| **Present        value of net liabilities**  |   |      |   |   |      |   |   |      |   |   |      |   |   |      |   |
| TFR                                          |   | 476       |   |   | 443       |   |   | 447       |   |   | 433       |   |   | 391       |   |
| Foreign        pension plans                 |   | 259       |   |   | 349       |   |   | 646       |   |   | 641       |   |   | 540       |   |
| FISDE and other foreign medical plans        |   | 92        |   |   | 94        |   |   | 115       |   |   | 120       |   |   | 118       |   |
| Other        benefits                        |   | 118       |   |   | 168       |   |   | 188       |   |   | 206       |   |   | 207       |   |
|                                         |   | **945**   |   |   | **1,054** |   |   | **1,396** |   |   | **1,400** |   |   | **1,256** |   |
|                                         |   |           |        |   |           |        |   |           |        |   |           |        |   |           |        |

 

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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 4,045million (euro 3,421 million at December 31, 2010).

| (euro        million) |   | **Amount****at         Dec. 31, 2010** |   | **Additions** |   | **Deductions** |   | **Currency translation differences** |   | **Other changes** |   | **Amount****at         Dec. 31, 2011** |
|-----------------------|--------|----------------------------------------|--------|---------------|--------|----------------|--------|--------------------------------------|--------|-------------------|--------|----------------------------------------|
|                  |   |                                        |   |               |   |                |   |                                      |   |                   |   |                                        |

|   |   | **5,924** |   | 2,030 |   | (531 | ) |   | 299 |   | (602) |   | **7,120** |
|--------|--------|-----------|--------|-------|--------|------|---|--------|-----|--------|-------|--------|-----------|
|   |   |           |   |       |   |      |   |   |     |   |       |   |           |

Deferred tax assets and liabilities consisted of thefollowing:

| (euro million) |   | **Dec. 31, 2010** |   | **Dec. 31, 2011** |
|----------------|--------|-------------------|--------|-------------------|
|           |   |                   |   |                   |

| Deferred tax liabilities                            |   | 9,345     |   |   | 11,165    |   |
|-----------------------------------------------------|--------|-----------|--------|--------|-----------|--------|
| Deferred        tax assets available for offset     |   | (3,421    | )      |   | (4,045    | )      |
|                                                |   | **5,924** |   |   | **7,120** |   |
| Deferred        tax assets not available for offset |   | (4,864    | )      |   | (5,514    | )      |
|                                                |   | **1,060** |   |   | **1,606** |   |
|                                                |   |           |        |   |           |        |

Net deferred tax liabilities of euro 7,120 million comprised:(i) an adjustment to deferred taxation due to a changed tax rateapplicable to a production sharing agreement in the Exploration& Production segment (euro 573 million), including anadjustment to deferred taxation which was recognized uponallocation of the purchase price as part of a businesscombination when the mineral interest was acquired by Eni; and(ii) the recognition of the deferred tax effect against equity onthe fair value evaluation of derivatives designated as cash flowhedge for euro 28 million of deferred tax liabilities. Furtherinformation on cash flow hedge derivatives is disclosed underNote 25 – Other current liabilities.

The most significant temporary differences giving rise to netdeferred tax liabilities are disclosed below:

| (euro        million) |   | **Carrying amount****at         Dec. 31, 2010** |   | **Additions** |   | **Deductions** |   | **Currency translation differences** |   | **Other changes** |   | **Carrying amount****at         Dec. 31, 2011** |
|-----------------------|--------|-------------------------------------------------|--------|---------------|--------|----------------|--------|--------------------------------------|--------|-------------------|--------|-------------------------------------------------|
|                  |   |                                                 |   |               |   |                |   |                                      |   |                   |   |                                                 |

| Deferred tax liabilities:                                                                                                    |   |       |   |   |       |   |   |     |   |   |     |   |   |   |   |   |       |   |
|------------------------------------------------------------------------------------------------------------------------------|--------|------------|--------|--------|------------|--------|--------|----------|--------|--------|----------|--------|--------|--------|--------|--------|------------|--------|
| -        accelerated tax depreciation                                                                                        |   | 5,698      |   |   | 1,320      |   |   | (229     | )      |   | 223      |   |   | 213    |   |   | 7,225      |   |
| - difference between the fair value and the        carrying amount of assets acquired following business        combinations |   | 1,209      |   |   | 339        |   |   | (21      | )      |   | 43       |   |   | (264   | )      |   | 1,306      |   |
| - site        restoration and abandonment (tangible assets)                                                                  |   | 440        |   |   | 73         |   |   | (24      | )      |   | 9        |   |   | (54    | )      |   | 444        |   |
| - application of the weighted average cost        method in evaluation of inventories                                        |   | 174        |   |   | 49         |   |   | (9       | )      |   |     |   |   | (1     | )      |   | 213        |   |
| -        capitalized interest expense                                                                                        |   | 146        |   |   | 21         |   |   | (10      | )      |   |     |   |   | 1      |   |   | 158        |   |
| - other                                                                                                                      |   | 1,678      |   |   | 228        |   |   | (238     | )      |   | 24       |   |   | 127    |   |   | 1,819      |   |
|                                                                                                                         |   | **9,345**  |   |   | **2,030**  |   |   | **(531** | **)**  |   | **299**  |   |   | **22** |   |   | **11,165** |   |
| Deferred tax assets:                                                                                                         |   |       |   |   |       |   |   |     |   |   |     |   |   |   |   |   |       |   |
| - site        restoration and abandonment (provisions for        contingencies)                                              |   | (1,555     | )      |   | (234       | )      |   | 24       |   |   | (51      | )      |   | (163   | )      |   | (1,979     | )      |
| - depreciation and amortization                                                                                              |   | (1,500     | )      |   | (333       | )      |   | 45       |   |   | (58      | )      |   | 33     |   |   | (1,813     | )      |
| - accruals        for impairment losses and provisions for contingencies                                                     |   | (1,717     | )      |   | (370       | )      |   | 307      |   |   |     |   |   | (16    | )      |   | (1,796     | )      |
| - unrealized intercompany profits                                                                                            |   | (908       | )      |   | (72        | )      |   | 71       |   |   | 3        |   |   | 131    |   |   | (775       | )      |
| - assets        revaluation as per Laws No. 342/2000 and No. 448/2001                                                        |   | (637       | )      |   | (1         | )      |   | 18       |   |   |     |   |   | (1     | )      |   | (621       | )      |
| - carry-forward tax losses                                                                                                   |   | (238       | )      |   | (235       | )      |   | 147      |   |   | (9       | )      |   | (4     | )      |   | (339       | )      |
| - other                                                                                                                      |   | (1,730     | )      |   | (791       | )      |   | 270      |   |   | (30      | )      |   | 45     |   |   | (2,236     | )      |
|                                                                                                                         |   | **(8,285** | **)**  |   | **(2,036** | **)**  |   | **882**  |   |   | **(145** | **)**  |   | **25** |   |   | **(9,559** | **)**  |
| **Net        deferred tax liabilities**                                                                                      |   | **1,060**  |   |   | **(6**     | **)**  |   | **351**  |   |   | **154**  |   |   | **47** |   |   | **1,606**  |   |
|                                                                                                                         |   |            |        |   |            |        |   |          |        |   |          |        |   |        |        |   |            |        |

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Deductible temporary differences giving rise to deferred taxassets are recognized to the extent that is probable thatsufficient taxable profit will be available against which part orall of the deductible temporary differences can be utilized.

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 17.6% for Italian companies, by consideringthe different taxation for energy companies and companiesincluded in the consolidation statement for fiscal purposes, andan average rate of 32.1% for foreign companies.

Carry-forward tax losses amounted to euro 1,480 million andcan be used indefinitely for euro 1,313 million. Carry-forwardtax losses regarded Italian companies for euro 153 million andforeign companies euro 1,327 million. Carry-forward tax lossesfor which are probable the offsetting against future taxableprofit amounted to euro 1,124 million and were in respect ofItalian companies for euro 153 million and of foreignsubsidiaries for euro 971 million. Deferred tax assets recognizedon these losses amounted to euro 27 million and euro 312 million,respectively.

**30 Other non-current liabilities**

| (euro million) |   | **Dec. 31, 2010** |   | **Dec. 31, 2011** |
|----------------|--------|-------------------|--------|-------------------|
|           |   |                   |   |                   |

| Fair value of non-hedging and trading        derivatives |   | 344       |   | 591          |
|----------------------------------------------------------|--------|-----------|--------|--------------|
| Fair value        of cash flow hedge derivatives         |   | 157       |   | 37           |
| Current income tax liabilities                           |   | 40        |   |    |
| Other        payables                                    |   | 67        |   | 70           |
| Other liabilities                                        |   | 1,586     |   | 2,202        |
|                                                     |   | **2,194** |   | **2,900**    |
|                                                     |   |           |   |              |

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 andderivatives contracts held for trading is presented below:

|   |   | **Dec. 31, 2010** |   | **Dec. 31, 2011** |
|--------|--------|-------------------|--------|-------------------|
|   |   |                   |   |                   |

| (euro        million) |    | Fair value |    | Purchase commitments |    | Sale commitments |    | Fair value |    | Purchase commitments |    | Sale commitments |
|-----------------------|--------------|------------|--------------|----------------------|--------------|------------------|--------------|------------|--------------|----------------------|--------------|------------------|
|                  |         |            |         |                      |         |                  |         |            |         |                      |         |                  |

| **Derivatives on exchange rate**      |   |    |   |    |   |      |   |    |   |      |   |      |
|---------------------------------------|--------|---------|--------|---------|--------|-----------|--------|---------|--------|-----------|--------|-----------|
| Currency        swap                  |   | 1       |   | 48      |   | 17        |   | 1       |   |      |   | 3         |
| Interest currency swap                |   | 16      |   | 228     |   | 117       |   |    |   |      |   |      |
|                                  |   | **17**  |   | **276** |   | **134**   |   | **1**   |   |      |   | **3**     |
| **Derivatives on interest rate**      |   |    |   |    |   |      |   |    |   |      |   |      |
| Interest        rate swap             |   | 147     |   | 16      |   | 2,999     |   | 255     |   | 50        |   | 4,136     |
|                                  |   | **147** |   | **16**  |   | **2,999** |   | **255** |   | **50**    |   | **4,136** |
| **Derivatives        on commodities** |   |    |   |    |   |      |   |    |   |      |   |      |
| Over the counter                      |   | 155     |   | 521     |   | 541       |   | 310     |   | 3,760     |   | 416       |
| Future                                |   |    |   |    |   |      |   | 3       |   | 14        |   |      |
| Other                                 |   | 25      |   |    |   | 72        |   | 22      |   |      |   | 126       |
|                                  |   | **180** |   | **521** |   | **613**   |   | **335** |   | **3,774** |   | **542**   |
|                                  |   | **344** |   | **813** |   | **3,746** |   | **591** |   | **3,824** |   | **4,681** |
|                                  |   |         |   |         |   |           |   |         |   |           |   |           |

Fair values of non-hedging and trading derivatives of euro 591million (euro 344 million at December 31, 2010) consisted of: (i)euro 568 million (euro 328 million at December 31, 2010) 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 14 million of derivatives embedded 

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in the pricing formulas of long-term gas supply contracts inthe Exploration & Production segment; and (iii) euro 9million (euro 16 million at December 31, 2010) of tradingderivatives on commodities entered by the Gas & Power segmentconsistently with the new risk management strategy designed tooptimize margins.

Fair value of cash flow hedge derivatives amounted to euro 37million (euro 157 million at December 31, 2010) and pertained tothe Gas & Power segment (euro 157 million at December 31,2010). Those derivatives were designated to hedge exchange rateand commodity risk exposures as described under Note 13 –Other current assets. Fair value of contracts expiring beyond2012 is disclosed under Note 20 – Other non-currentreceivables; fair value of contracts expiring by 2012 isdisclosed under Note 25 – Other current liabilities andunder Note 13 – Other current assets. The effects of fairvalue evaluation of cash flow hedge derivatives are disclosedunder Note 32 – Shareholders’ equity and under Note 36– Operating expenses.

The nominal value of these derivatives referred to purchaseand sale commitments for euro 340 million and euro 310 million,respectively (euro 383 million and euro 612 million at December31, 2010).

Information on the hedged risks and the hedging policies isshown under Note 34 – Guarantees, commitments and risks -Risk factors.

The Group’s liability for current income taxes for euro40 million at December 31, 2010, was due for a special tax (witha rate lower than the statutory tax rate) relating to an optionto increase the deductible tax bases of certain tangible andother assets to their carrying amounts as permitted by the 2008Budget Law. During the 2011, the residual amount of suchliability was reclassified as current liability.

Other liabilities of euro 2,202 million (euro 1,586 million atDecember 31, 2010) comprised advances received from Suezfollowing a long-term agreement for supplying natural gas andelectricity of euro 1,061 million (euro 1,353 million at December31, 2010) and advances relating to amounts of gas which werecollected below the minimum take for the year by certain ofEni’s clients, reflecting take-or-pay clauses contained inthe long-term sales contracts (euro 299 million).

**31 Assets held for sale and liabilitiesdirectly associated with assets held for sale******As of December 31, 2011, non-current assets held forsale and liabilities directly associated with non-current assetsheld for sale of euro 230 million and euro 24 million pertainedto non-strategic assets in the Exploration & Productionsegment.

**32 Shareholders’ equity**

**Non-controlling interest******Profit attributable to non-controlling interest and thenon-controlling interest in consolidated subsidiaries related to:

| (euro million) |   | **Net profit** |   | **Shareholders’        equity** |
|----------------|--------|----------------|--------|--------------------------------------|
|           |   |                |   |                                      |

|   |   | **2010** |   | **2011** |   | **Dec. 31, 2010** |   | **Dec. 31, 2011** |
|--------|--------|----------|--------|----------|--------|-------------------|--------|-------------------|
|   |   |          |   |          |   |                   |   |                   |

| Saipem SpA                       |   | 503       |   | 552     |   |   | 2,406     |   | 2,802     |
|----------------------------------|--------|-----------|--------|---------|--------|--------|-----------|--------|-----------|
| Snam Rete        Gas SpA         |   | 537       |   | 385     |   |   | 1,705     |   | 1,730     |
| Hindustan Oil Exploration Co Ltd |   |      |   | (6      | )      |   | 146       |   | 123       |
| Tigáz Zrt                   |   | 13        |   |    |   |   | 83        |   | 74        |
| Others                           |   | 12        |   | 12      |   |   | 182       |   | 192       |
|                             |   | **1,065** |   | **943** |   |   | **4,522** |   | **4,921** |
|                             |   |           |   |         |        |   |           |   |           |

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**Eni shareholders’ equity**

| (euro million) |   | **Dec. 31, 2010** |   | **Dec. 31, 2011** |
|----------------|--------|-------------------|--------|-------------------|
|           |   |                   |   |                   |

| Share capital                                                                                          |   | 4,005      |   |   | 4,005      |   |
|--------------------------------------------------------------------------------------------------------|--------|------------|--------|--------|------------|--------|
| Legal        reserve                                                                                   |   | 959        |   |   | 959        |   |
| Reserve for treasury shares                                                                            |   | 6,756      |   |   | 6,753      |   |
| Reserve        related to the fair value of cash flow hedging        derivatives net of the tax effect |   | (174       | )      |   | 49         |   |
| Reserve related to the fair value of        available-for-sale securities net of the tax effect        |   | (3         | )      |   | (8         | )      |
| Other        reserves                                                                                  |   | 1,518      |   |   | 1,421      |   |
| Cumulative currency translation differences                                                            |   | 539        |   |   | 1,539      |   |
| Treasury        shares                                                                                 |   | (6,756     | )      |   | (6,753     | )      |
| Retained earnings                                                                                      |   | 39,855     |   |   | 42,531     |   |
| Interim        dividend                                                                                |   | (1,811     | )      |   | (1,884     | )      |
| Net profit for the period                                                                              |   | 6,318      |   |   | 6,860      |   |
|                                                                                                   |   | **51,206** |   |   | **55,472** |   |
|                                                                                                   |   |            |        |   |            |        |

**Share capital**At December 31, 2011, the Parent Company’s issued sharecapital consisted of 4,005,358,876 shares (nominal value euro 1each) fully paid-up (the same amount as of December 31, 2010).

On May 5, 2011, Eni’s Shareholders’ Meeting declareda dividend distribution of euro 0.50 per share, with theexclusion of treasury shares held at the ex-dividend date, infull settlement of the 2010 dividend of euro 1.00 per share, ofwhich euro 0.50 per share paid as interim dividend. The balancewas payable on May 26, 2011, to shareholders on the register onMay 23, 2011.

 

**Legal reserve**This reserve represents earnings restricted from the paymentof dividends pursuant to Article 2430 of the Italian Civil Code.The legal reserve has reached the maximum amount required by theItalian Law.

 

**Reserve for treasury shares**The reserve for treasury shares represents the reserve whichwas established in previous reporting period to repurchase theCompany shares in accordance with the decisions of Eni’sShareholders’ Meetings. The Company has no ongoing sharerepurchase plan. The amount of euro 6,753 million (euro 6,756million at December 31, 2010) included treasury shares purchased.

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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, 2009**                     |   | **6**  |   |   | **(1** | **)**  |   | **5**  |   |   | **(714** | **)**  |   | **275** |   |   | **(439** | **)**  |   | **(708** | **)**  |   | **274** |   |   | **(434** | **)**  |
|---------------------------------------------------------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|----------|--------|--------|---------|--------|--------|----------|--------|--------|----------|--------|--------|---------|--------|--------|----------|--------|
| Changes of        the year 2010                         |   | (9     | )      |   | 1      |   |   | **(8** | **)**  |   | 47       |   |   | (33     | )      |   | **14**   |   |   | 38       |   |   | (32     | )      |   | **6**    |   |
| Foreign currency translation differences                |   |   |   |   |   |   |   |   |   |   | (4       | )      |   | 2       |   |   | **(2**   | **)**  |   | (4       | )      |   | 2       |   |   | **(2**   | **)**  |
| Amount        recognized in the profit and loss account |   |   |   |   |   |   |   |   |   |   | 396      |   |   | (143    | )      |   | **253**  |   |   | 396      |   |   | (143    | )      |   | **253**  |   |
| **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**   |   |
|                                                    |   |        |        |   |        |        |   |        |        |   |          |        |   |         |        |   |          |        |   |          |        |   |         |        |   |          |        |

 

| **Other reserves**Other reserves amounted to euro 1,421 million (euro        1,518 million at December 31, 2010) and related to: |
|----------------------------------------------------------------------------------------------------------------------------------|

| • |   | a reserve of euro 1,137        million represented an increase in Eni’s        shareholders’ equity associated with a business        combination under common control which took place in        2009, whereby the Parent Company Eni SpA divested the        subsidiaries Italgas SpA and Stoccaggi Gas Italia SpA to        Snam Rete Gas SpA with a corresponding decrease in the        non-controlling interest (euro 1,142 million at December        31, 2010); |
|--------|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| • |   | 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 the subsidiary Snamprogetti SpA        to Saipem SpA with a corresponding decrease in the        non-controlling interest (the same amount as of December        31, 2010);                                                                    |
| • |   | a reserve of euro 157        million deriving from Eni SpA’s equity (the same        amount as of December 31, 2010);                                                                                                                                                                                                                                                                                                                                                        |
| • |   | a reserve of euro 14 million        related to the effect of treasury shares sold following        the exercise of stock options by Saipem and Snam Rete Gas        managers;                                                                                                                                                                                                                                                                                                     |
| • |   | a negative reserve of euro        119 million represented an increase in Eni’s        shareholders’ equity associated with the acquisition        of the residual 44.21% pertaining to the non-controlling        interest of Altergaz SA;                                                                                                                                                                                                                              |
| • |   | a negative reserve of euro        25 million as of December 31, 2010 pertained to stock        warrants of Altergaz SA owned by its shareholder Eni        G&P France BV. During the 2011 the stock warrants        were exercised and converted into shares of Altergaz SA;                                                                                                                                                                                                  |
| • |   | a negative reserve of euro        15 million referred to the share of "Other        comprehensive income" on equity-accounted entities        (negative for euro 3 million at December 31, 2010).                                                                                                                                                                                                                                                                       |

**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 382,654,833 ordinary shares (382,863,733 atDecember 31, 2010) with nominal value of euro 1 each, were heldin treasury, for a total cost of euro 6,753 million (euro 6,756million December 31, 2010). The Company has no ongoing sharerepurchase plan. An amount of 11,873,205 treasury shares(15,737,120 at December 31, 2010) 

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at a cost of euro 240 million (euro 328 million at December31, 2010) were available for the 2004-200516 and2006-2008 stock option plans.

The decrease of 3,863,915 shares consisted of the following:

|   |   | **Stock option** |
|--------|--------|------------------|
|   |   |                  |

| **Number of shares at December 31, 2010** |   | **15,737,120**  |   |
|-------------------------------------------|--------|-----------------|--------|
| Rights        exercised                   |   | (208,900        | )      |
| Rights cancelled                          |   | (3,655,015      | )      |
|                                      |   | **(3,863,915**  | **)**  |
| **Number of shares at December 31, 2011** |   | **111,873,205** |   |
|                                      |   |                 |        |

At December 31, 2011, options outstanding were 11,873,205.Options regarded the 2004 stock-based compensation plan for628,100 shares with an exercise price of euro 16.576 per share,the 2005 plan for 3,281,500 shares with an exercise price of euro22.514, the 2006 plan for 2,201,950 shares with a weightedaverage exercise price of euro 23.121, the 2007 plan for1,876,980 shares with a weighted average exercise price of euro27.451 and the 2008 plan for 3,884,675 shares with an exerciseprice of euro 22.540.

More information about stock option plans is disclosed underNote 36 – Operating expenses.

 

**Interim dividend**The interim dividend for the year 2011 amounted to euro 1,884million corresponding to euro 0.52 per share, as resolved by theBoard of Directors on September 8, 2011, in accordance withArticle 2433-*bis*, paragraph 5 of the Italian Civil Code;the dividend was paid on September 22, 2011.

 

**Distributable reserves**At December 31, 2011, Eni shareholders’ equity includeddistributable reserves of euro 50,500 million.

 

**Reconciliation of net profit and shareholders’equity of the Parent Company Eni SpA to consolidated net profitand shareholders’ equity**

|    |    | **Net profit** |    | **Shareholders’        equity** |
|--------------|--------------|----------------|--------------|--------------------------------------|
|    |    |                |    |                                      |

| (euro        million) |    | 2010 |    | 2011 |    | Dec. 31, 2010 |    | Dec. 31, 2011 |
|-----------------------|--------------|------|--------------|------|--------------|---------------|--------------|---------------|
|             |    |      |    |      |    |               |    |               |

| **As recorded in Eni SpA’s Financial        Statements**                                                                                                                           |   | **6,179** |   |   | **4,213** |   |   | **34,724** |   |   | **35,255** |   |
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|-----------|--------|--------|-----------|--------|--------|------------|--------|--------|------------|--------|
| Excess of        net equity in individual accounts of consolidated        subsidiaries over their corresponding carrying amounts in        the statutory accounts of the Parent Company |   | 1,297     |   |   | 3,972     |   |   | 20,122     |   |   | 24,355     |   |
| Consolidation adjustments:                                                                                                                                                              |   |      |   |   |      |   |   |       |   |   |       |   |
| -        difference between purchase cost and underlying carrying        amounts of net equity                                                                                          |   | (574      | )      |   | (320      | )      |   | 4,732      |   |   | 4,400      |   |
| - elimination of tax adjustments and compliance        with Group account policies                                                                                                      |   | 389       |   |   | (248      | )      |   | (667       | )      |   | (673       | )      |
| -        elimination of unrealized intercompany profits                                                                                                                                 |   | 14        |   |   | 115       |   |   | (4,601     | )      |   | (4,291     | )      |
| - deferred taxation                                                                                                                                                                     |   | 100       |   |   | 71        |   |   | 1,410      |   |   | 1,337      |   |
| - other        adjustments                                                                                                                                                              |   | (22       | )      |   |      |   |   | 8          |   |   | 10         |   |
|                                                                                                                                                                                    |   | **7,383** |   |   | **7,803** |   |   | **55,728** |   |   | **60,393** |   |
| Non-controlling        interest                                                                                                                                                         |   | (1,065    | )      |   | (943      | )      |   | (4,522     | )      |   | (4,921     | )      |
| **As recorded in Consolidated Financial        Statements**                                                                                                                             |   | **6,318** |   |   | **6,860** |   |   | **51,206** |   |   | **55,472** |   |
|                                                                                                                                                                                    |   |           |        |   |           |        |   |            |        |   |            |        |

----

| (16) |    | The vesting        period for the 2002 and 2003 assignments expired during        the 2010 and 2011, respectively. |
|------|--------------|--------------------------------------------------------------------------------------------------------------------|

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**33 Other information**

**Main acquisitions**

*Altergaz SA*In December 2010, Eni increased its shareholding in AltergazSA, a company marketing natural gas in France to retail andmiddle market clients, as founding partners of the companyexercised a put option on a 15% stake. Eni took control of theentity. An excess purchase cost of euro 106 million was allocatedto assets and liabilities of the entity. That amount comprisedeuro 39 million of consideration to the partners who exercisedthe put rights and euro 67 million of reassessment at fair valueof the stake already held by Eni before the change of control.The final allocation of the purchase costs of Altergaz SA isdisclosed below:

| (euro        million) |   | **Altergaz SA** |
|-----------------------|--------|-----------------|
|                  |   |                 |

|         | **  ** | **Preliminary allocation as of Dec. 31,        2010** | **  ** | **Final allocation as of Dec. 31, 2011** |
|--------------|------------------|-------------------------------------------------------|------------------|------------------------------------------|
|    |        |                                                       |        |                                          |

| Current assets                            |   | 308     |   |   | 387     |   |
|-------------------------------------------|--------|---------|--------|--------|---------|--------|
| Property,        plant and equipment      |   | 1       |   |   | 1       |   |
| Intangible assets                         |   | 4       |   |   | 4       |   |
| Goodwill                                  |   | 97      |   |   | 95      |   |
| Investments                               |   | 13      |   |   | 13      |   |
| Other        non-current assets           |   |    |   |   | 5       |   |
| **Assets acquired**                       |   | **423** |   |   | **505** |   |
| Current        liabilities                |   | 315     |   |   | 384     |   |
| Deferred tax liabilities                  |   | (7      | )      |   | (7      | )      |
| Provisions        for contingencies       |   | 2       |   |   | 2       |   |
| Other non-current liabilities             |   |    |   |   | 11      |   |
| **Liabilities        acquired**           |   | **310** |   |   | **390** |   |
| Non-controlling interest                  |   | 7       |   |   | 9       |   |
| **Eni’s        shareholders equity** |   | **106** |   |   | **106** |   |
|                                      |   |         |        |   |         |        |

 

 

 

 

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**Supplemental cash flow information**

| (euro million) |   |    **** |   | **2009** |   | **2010** |   | **2011** |
|----------------|--------|------------------------|--------|----------|--------|----------|--------|----------|
|           |   |                   |   |          |   |          |   |          |

| **Effect of investment of companies included in        consolidation and businesses** |   |   |   |   |    |   |   |      |   |
|---------------------------------------------------------------------------------------|--------|--------|--------|--------|---------|--------|--------|-----------|--------|
| Current        assets                                                                 |   | 7      |   |   | 409     |   |   |      |   |
| Non-current assets                                                                    |   | 47     |   |   | 316     |   |   | 122       |   |
| Net        borrowings                                                                 |   | 4      |   |   | 13      |   |   |      |   |
| Current and non-current liabilities                                                   |   | (29    | )      |   | (457    | )      |   | (4        | )      |
| **Net        effect of investments**                                                  |   | **29** |   |   | **281** |   |   | **118**   |   |
| Non-controlling interests                                                             |   |   |   |   | (7      | )      |   | (3        | )      |
| Fair value        of investments held before the acquisition of control               |   |   |   |   | (76     | )      |   |      |   |
| **Purchase price**                                                                    |   | **29** |   |   | **198** |   |   | **115**   |   |
| less:                                                                                 |   |   |   |   |    |   |   |      |   |
| *Cash and cash equivalents*                                                           |   | *(4*   | *)*    |   | *(55*   | *)*    |   |      |   |
| **Cash        flow on investments**                                                   |   | **25** |   |   | **143** |   |   | **115**   |   |
| **Effect of disposal of consolidated        subsidiaries and businesses**             |   |   |   |   |    |   |   |      |   |
| Current        assets                                                                 |   |   |   |   | 82      |   |   | 618       |   |
| Non-current assets                                                                    |   |   |   |   | 855     |   |   | 136       |   |
| Net        borrowings                                                                 |   |   |   |   | (267    | )      |   | 257       |   |
| Current and non-current liabilities                                                   |   |   |   |   | (302    | )      |   | (662      | )      |
| **Net        effect of disposals**                                                    |   |   |   |   | **368** |   |   | **349**   |   |
| Fair value of share capital held after the sale        of control                     |   |   |   |   | (149    | )      |   |      |   |
| Gain on        disposal                                                               |   |   |   |   | 309     |   |   | 727       |   |
| Non-controlling interest                                                              |   |   |   |   | (46     | )      |   | (5        | )      |
| **Selling        price**                                                              |   |   |   |   | **482** |   |   | **1,071** |   |
| less:                                                                                 |   |   |   |   |    |   |   |      |   |
| *Cash        and cash equivalents*                                                    |   |   |   |   | *(267*  | *)*    |   | *(65*     | *)*    |
| **Cash flow on disposals**                                                            |   |   |   |   | **215** |   |   | **1,006** |   |
|                                                                                  |   |        |        |   |         |        |   |           |        |

**34 Guarantees, commitments and risks********Guarantees**Guarantees were as follows:

|   |   | **Dec. 31, 2010** |   | **Dec. 31, 2011** |
|--------|--------|-------------------|--------|-------------------|
|   |   |                   |   |                   |

| (euro million) |   | Unsecured guarantees |   | Other        guarantees |   | Total |   | Unsecured guarantees |   | Other        guarantees |   | Total |
|----------------|--------|----------------------|--------|-------------------------|--------|-------|--------|----------------------|--------|-------------------------|--------|-------|
|           |   |                      |   |                         |   |       |   |                      |   |                         |   |       |

| Consolidated subsidiaries                        |   |      |   | 10,853     |   | 10,853     |   |      |   | 10,953     |   | 10,953     |
|--------------------------------------------------|--------|-----------|--------|------------|--------|------------|--------|-----------|--------|------------|--------|------------|
| Unconsolidated        entities controlled by Eni |   |      |   | 156        |   | 156        |   |      |   | 164        |   | 164        |
| Joint ventures and associates                    |   | 6,077     |   | 1,005      |   | 7,082      |   | 6,159     |   | 1,135      |   | 7,294      |
| Others                                           |   | 5         |   | 261        |   | 266        |   | 1         |   | 269        |   | 270        |
|                                             |   | **6,082** |   | **12,275** |   | **18,357** |   | **6,160** |   | **12,521** |   | **18,681** |
|                                             |   |           |   |            |   |            |   |           |   |            |   |            |

 

Other guarantees issued on behalf of consolidated subsidiariesof euro 10,953 million (euro 10,853 million at December 31, 2010)primarily consisted of: (i) guarantees given to third partiesrelating to bid bonds and performance bonds for euro 7,396million (euro 7,309 million at December 31, 2010), of which euro5,065 million related to the Engineering & Constructionsegment (euro 5,427 million at December 31, 2010); (ii) VATrecoverable from tax authorities for euro 1,097 million (euro1,076 million at December 31, 2010); and (iii) insurance risk foreuro 319 million reinsured by Eni (euro 387 million at December31, 2010). At December 31, 2011, the underlying commitmentcovered by such guarantees was euro 10,577 million (euro 10,718million at December 31, 2010).

Other guarantees issued on behalf of unconsolidatedsubsidiaries of euro 164 million (euro 156 million at December31, 2010) consisted of letters of patronage and other guaranteesissued to commissioning entities relating to bid bonds andperformance bonds for euro 157 million (euro 152 million atDecember 31, 2010). At December 

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31, 2011, the underlying commitment covered by such guaranteeswas euro 45 million (euro 81 million at December 31, 2010).

Unsecured guarantees and other guarantees issued on behalf ofjoint ventures and associates of euro 7,294 million (euro 7,082million at December 31, 2010) primarily concerned: (i) anunsecured guarantee of euro 6,074 million (euro 6,054 million atDecember 31, 2010) 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-Bolognatrain link by CEPAV (Consorzio Eni per l’Alta Velocità)Uno; consortium members, excluding unconsolidated entitiescontrolled by Eni, gave Eni liability of surety letters and bankguarantees amounting to 10% of their respective portion of thework; (ii) unsecured guarantees, letters of patronage and otherguarantees given to banks in relation to loans and lines ofcredit received for euro 1,051 million (euro 792 million atDecember 31, 2010), of which euro 669 million related to acontract released by Eni SpA on behalf of Blue Stream Pipeline CoBV (Eni 50%) to a consortium of international financialinstitutions (euro 648 million at December 31, 2010); and (iii)unsecured guarantees and other guarantees given to commissioningentities relating to bid bonds and performance bonds for euro 108million (euro 113 million at December 31, 2010). At December 31,2011, the underlying commitment covered by such guarantees waseuro 810 million (euro 639 million at December 31, 2010).

Unsecured and other guarantees given on behalf of thirdparties of euro 270 million (euro 266 million at December 31,2010) consisted primarily 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 232 million). The expected commitment has beenvalued at euro 224 million (euro 222 million at December 31,2010) and it has included in the off-balance sheet commitments ofthe following paragraph "Liquidity risk"; and (ii)guarantees issued by Eni SpA to banks and other financialinstitutions in relation to loans and lines of credit for euro 33million on behalf of minor investments or companies sold (euro 24million at December 31, 2010). At December 31, 2011 theunderlying commitment covered by such guarantees was euro 252million (euro 258 million at December 31, 2010).

 

**Commitments and risks**Commitments and risks were as follows:

| (euro million) |   | **Dec. 31, 2010** |   | **Dec. 31, 2011** |
|----------------|--------|-------------------|--------|-------------------|
|           |   |                   |   |                   |

| Commitments |   | 17,226     |   | 15,992     |
|-------------|--------|------------|--------|------------|
| Risks       |   | 1,499      |   | 2,165      |
|        |   | **18,725** |   | **18,157** |
|        |   |            |   |            |

Commitments of euro 15,992 million (euro 17,226 million atDecember 31, 2010) were essentially related to: (i) parentcompany guarantees that were issued in connection with certaincontractual commitments for hydrocarbon exploration andproduction activities and quantified, on the basis of the capitalexpenditures to be incurred, to euro 9,710 million (euro 10,654million at December 31, 2010); (ii) a commitment entered into byEni USA Gas Marketing Llc on behalf of Angola LNG Supply Servicefor the acquisition of re-gasified gas at the Pascagoula plant(USA) that came into force at the start of the re-gasificationservice (October 2011) until 2031. The expected commitment hasbeen valued at euro 3,267 million (euro 4,031 million at December31, 2010) and it has included in the off-balance sheetcommitments of the following paragraph "Liquidityrisk"; (iii) a commitment entered into by Eni USA GasMarketing Llc on behalf of Gulf LNG Energy for the acquisition ofre-gasification capacity of Pascagoula’s terminal (6 BCM/y)over a twenty-year period (2011-2031). The expected commitmenthas been valued at euro 1,252 million (euro 1,239 million atDecember 31, 2010) and it has included in the off-balance sheetcommitments of the following paragraph "Liquidityrisk"; (iv) a commitment entered into by Eni USA GasMarketing Llc on behalf of Cameron LNG Llc for the acquisition ofre-gasification capacity at the Cameron plant (USA) (6 BCM/y)over a twenty-year period (until 2029). The expected commitmenthas been valued at euro 1,274 million (euro 1,018 million atDecember 31, 2010) and it has included in the off-balance sheetcommitments of the following paragraph "Liquidityrisk"; (v) commitments for the acquisition of certaincompanies in Belgium (euro 214 million). The acquisitions werefinalized in January 2012; (vi) a memorandum of intent signedwith the Basilicata Region, whereby Eni has agreed to invest euro142 million in the future, also on account of Shell ItaliaE&P SpA, in connection with Eni’s development plan ofoil fields in Val d’Agri (euro 149 million at December 31,2010). The commitment has included in the off-balance sheetcommitments of the following paragraph "Liquidityrisk"; and (vii) a commitment entered into by Eni USA GasMarketing Llc for the contract of gas transportation from theCameron plant (USA) to the American network. The expectedcommitment has been valued at euro 108 million (euro 113 millionat December 31, 2010) and it has included in the off-balancesheet commitments of the following paragraph "Liquidityrisk".

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Risks of euro 2,165 million (euro 1,499 million at December31, 2010) primarily concerned potential risks associated with thevalue of assets of third parties under the custody of Eni foreuro 1,867 million (euro 1,202 million at December 31, 2010) andcontractual assurances given to acquirers of certain investmentsand businesses of Eni for euro 298 million (euro 297 million atDecember 31, 2010).

 

**Non-quantifiable commitments**Following the integration signed on April 19, 2011, Eni confirmedto RFI - Rete Ferroviaria Italiana SpA its commitment, previouslyassumed under the convention signed with Treno Alta Velocità -TAV SpA (now RFI - Rete Ferroviaria Italiana SpA) on October 15,1991, to guarantee a correct and timely execution of the firstlot of constructions relating to the section Milan-Brescia of thehigh-speed railway from Milan to Verona. Such integrationprovides for CEPAV (Consorzio Eni per l’Alta Velocità) Dueto act as General Contractor. In order to pledge the guaranteegiven, the regulation of CEPAV Due binds the associates to giveproper sureties and guarantees on 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) the market risk deriving from exposure tofluctuations in interest rates, foreign currency exchange ratesand commodity prices; (ii) the credit risk deriving from thepossible default of a counterparty; (iii) the liquidity riskderiving from the risk that suitable sources of funding for theGroup’s operations may not be available; (iv) the countryrisk in the upstream business; (v) the operational risk; (vi)risks associated with the current downturn in the gas market andthe possible evolution of regulations in the Italian gas market;and (vii) the specific risks deriving from exploration andproduction activities. Financial risks are managed in respect ofguidelines defined by the parent company, targeting to align andcoordinate Group companies’ policies on financial risks("Eni Guidelines on Management and Control of FinancialRisks").

In 2011, Eni adopted a new business model, approved by theBoard of Directors on December 15, 2011, aiming to pool andintegrate management of commodity risks and to develop AssetBacked Trading activities. In order to organically regulate thesenew tools with a view of controlling financial risks, reviews ofthe principles included in the Guidelines have been implementedin 2011.

*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 Banque Eni, which is subjectto certain bank regulatory restrictions preventing theGroup’s exposure to concentrations of credit risk, and EniTrading & Shipping, that is in charge to execute certainactivities relating to commodity derivatives. In particular EniSpA and Eni Finance International manage subsidiaries’financing requirements in and outside Italy, respectively,covering funding requirements and using available surpluses. Alltransactions concerning currencies and derivative financialcontracts are managed by the Parent Company as well as theactivity of negotiating emission trading certificates.

The commodity risk of each business unit (Eni’s divisionsor subsidiaries) is managed by Eni Trading business unit, withEni Trading & Shipping executing the negotiation of therespective hedging derivatives. Eni uses derivative financialinstruments (derivatives) in order to minimize exposure to marketrisks related to changes in transactional exchange rates andinterest rates as well as to optimize exposure to commodityprices fluctuations and its relative exchange rate risk. Eni doesnot enter into derivative transactions on interest rates orexchange rates on a speculative basis.

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| Commodity derivatives are entered into        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, should certain expectations fulfill        about a favorable trend in the commodity pricing        environment;                                                                                                                                                                                                                                                                                                                    |
| 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. |

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. Those 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 departments define maximum tolerable levelsof 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 measurementtechniques for interest rate and foreign currency exchange raterisks are in accordance with established banking standards, asestablished by the Basel Committee for bank activitiessurveillance. Tolerable levels of risk are based on aconservative approach, considering the industrial nature of thecompany. Eni’s guidelines prescribe that Eni Group companiesminimize such kinds of market risks by transferring risk exposureto the Parent Company finance department.

With regard to the 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 commodityderivatives, ensuring execution services to the Trading BusinessUnit.

The strategic risk is the economic risk which is intrinsic toeach business unit. Exposure to that kind of risk does notundergo any systematic hedging or managing activities due to astrategic decision made by the Company, except for extraordinarybusiness or market conditions. Therefore, internal risk policiesand guideline do not foresee any mandate to manage, or anymaximum tolerable level of risk exposure.

To date, exposure to the strategic risk is associated withplans approved by Eni’s Board of Directors reflectingstrategic decisions, plans for commercial development of provedand unproved oil and gas reserves, long-term gas supply contractsfor the portion not balanced by in-place or highly probable salecontracts, refining margins and minimum compulsory stock.Relating to refining margins, the Board of Directors defines themaximum level of product volumes associated to these margins tobe entered to the Asset Backed Trading. Any hedging activity ofthe strategic risk is the sole responsibility of Eni’s topmanagement, due to the extraordinary conditions that may lead tosuch a decision. This kind of transaction is not subject tospecific risk limits due to nature; however it is subject tomonitoring and assessment activities.

The three different market risks, for which management andcontrol have been summarized above, are described below.

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*Exchange rate risk*Exchange rate risk derives from the fact that Eni’soperations are conducted in currencies other than the euro(mainly the US 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 theUS dollar versus the euro has a positive impact on Eni’sresults of operations, and vice-versa.

Eni’s foreign exchange risk management policy is tominimize transactional exposures arising from foreign currencymovements and to optimize exposures arising from commodity risk.Eni does not undertake any hedging activity for risks derivingfrom the translation of foreign currency denominated profits orassets and liabilities of subsidiaries which prepare financialstatements in a currency other than the euro, except for singletransactions to be evaluated on a case-by-case basis. Effectivemanagement of exchange rate risk is performed within Eni’scentral finance departments which pools Group companiespositions, hedging the Group net exposure through the use ofcertain derivatives, such as currency swaps, forwards andoptions. Such derivatives are evaluated at fair value on thebasis of market prices provided by specialized info-providers.Changes in fair value of those derivatives are normallyrecognized through profit and loss as they do not meet the formalcriteria to be recognized as hedges in accordance with IAS 39.The Value at risk (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 2011 (compared with 2010) relating to interest rateand exchange rate risks in the first section, and commodity riskin the second section. Var values are stated in US dollars, thecurrency most widely used in oil products markets.

*(Exchange and Value at risk -parametric method variance/covariance; holding period: 20 days;confidence level: 99%)*

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

| (euro        million) |   | **High** |   | **Low** |   | **Average** |   | **At year-end** |   | **High** |   | **Low** |   | **Average** |   | **At year-end** |
|-----------------------|--------|----------|--------|---------|--------|-------------|--------|-----------------|--------|----------|--------|---------|--------|-------------|--------|-----------------|
|                  |   |          |   |         |   |             |   |                 |   |          |   |         |   |             |   |                 |

| Interest rate (a)    |   | 2.82 |   | 1.09 |   | 1.55 |   | 1.60 |   | 5.34 |   | 1.07 |   | 2.65 |   | 2.92 |
|----------------------|--------|------|--------|------|--------|------|--------|------|--------|------|--------|------|--------|------|--------|------|
| Exchange        rate |   | 0.99 |   | 0.13 |   | 0.50 |   | 0.51 |   | 0.85 |   | 0.15 |   | 0.44 |   | 0.34 |
|                 |   |      |   |      |   |      |   |      |   |      |   |      |   |      |   |      |

|    |    |                                                                                                                          |
|--------------|--------------|------------------------------------------------------------------------------------------------------------------------------------|
| (a)          |    | Value at risk        deriving from interest rate exposure includes the Eni        Finance USA Inc department, since February 2010. |

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*(Commodity risk - Value at risk- Historic simulation method; holding period: 1 day; confidencelevel: 95%)*

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

| (U.S.$        million) |   | **High** |   | **Low** |   | **Average** |   | **At year-end** |   | **High** |   | **Low** |   | **Average** |   | **At year-end** |
|------------------------|--------|----------|--------|---------|--------|-------------|--------|-----------------|--------|----------|--------|---------|--------|-------------|--------|-----------------|
|                   |   |          |   |         |   |             |   |                 |   |          |   |         |   |             |   |                 |

| Area oil, products (a)          |   | 46.08  |   | 4.40  |   | 23.53 |   | 10.49 |   | 56.92  |   | 11.64 |   | 32.90 |   | 11.64 |
|---------------------------------|--------|--------|--------|-------|--------|-------|--------|-------|--------|--------|--------|-------|--------|-------|--------|-------|
| Area Gas        & Power (b) |   | 101.62 |   | 40.06 |   | 61.76 |   | 43.30 |   | 100.04 |   | 31.58 |   | 57.54 |   | 66.08 |
|                            |   |        |   |       |   |       |   |       |   |        |   |       |   |       |   |       |

|    |    |                                                                                                                                                                                    |
|--------------|--------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| (a)          |    | Area oil,        products refers to Eni Trading & Shipping, Polimeri        Europa and the Refining & Marketing Division,        including also consolidated entities outside Italy. |
| (b)          |    | The Gas &        Power area refers to the Gas & Power Division,        including also consolidated entities outside Italy.                                                           |

*Credit risk*Credit risk is the potential exposure of the Group to losses incase counterparties fail to perform or pay amounts due. The Groupmanages differently credit risk depending on whether credit riskarises from exposure to financial counterparties or to customersrelating to outstanding receivables. Individual business unitsand Eni’s corporate financial and accounting units areresponsible for managing credit risk arising in the normal courseof the business. The Group has established formal credit systemsand processes to ensure that before trading with a newcounterpart 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 departments, 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 eachcounterparty 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. Counterparties have also beenselected on more stringent criteria particularly in transactionson derivatives instruments and with maturity longer than athree-month period.

*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 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.

In particular in 2011, Eni issued bonds to the retail Italianinvestors for a total amount of euro 1.3 billion, of which euro1.1 billion at fixed rate, and approximately euro 215 million atvariable rate. In February 2012, Eni issued bonds addressed toinstitutional investors on the euro market for euro 1 billion.

The above mentioned actions aimed at ensuring availability ofsuitable sources of funding to fulfill short-term commitments anddue obligations also preserving the necessary financialflexibility to support the Group’s development plans. Indoing so, the Group has pursued an efficient balance of financedebt in terms of maturity and composition leveraging on thestructure of its lines of credit particularly the committed ones.At present, the Group 

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believes it has access to sufficient funding and has also bothcommitted and uncommitted borrowing facilities to meet currentlyforeseeable borrowing requirements.

At December 31, 2011, Eni maintained short-term committed anduncommitted unused borrowing facilities of euro 11,897 million,of which euro 2,551 million were committed, and long-termcommitted unused borrowing facilities of euro 3,201 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 10.5billion were drawn as of December 31, 2011.

The Group has credit ratings of A and A-1 respectively forlong and short-term debt assigned by Standard& Poor’s and A2 and P-1 assigned by Moody’s;the outlook is negative in both ratings.

The tables below summarize the Group main contractualobligations (undiscounted) for finance debt repayments, includingexpected payments for interest charges, and trade and otherpayables maturities outstanding at year-end.

 

**Finance debt repayments including expected payments forinterest charges**The tables below summarize the Group main contractualobligations for finance debt repayments, including expectedpayments for interest charges.

 

| **Dec.        31, 2010** |    | **Maturity year** |
|--------------------------|--------------|-------------------|
| (euro        million)    |         |                   |

|         | **  ** | **2011** | **  ** | **2012** | **  ** | **2013** | **  ** | **2014** | **  ** | **2015** | **  ** | **2016 and thereafter** | **  ** | **Total** |
|--------------|------------------|----------|------------------|----------|------------------|----------|------------------|----------|------------------|----------|------------------|-------------------------|------------------|-----------|
|    |             |          |        |          |        |          |        |          |        |          |        |                         |        |           |

| Non-current liabilities              |   | 963       |   | 3,583     |   | 2,485     |   | 2,009     |   | 2,815     |   | 9,413     |   | **21,268** |
|--------------------------------------|--------|-----------|--------|-----------|--------|-----------|--------|-----------|--------|-----------|--------|-----------|--------|------------|
| Current        financial liabilities |   | 6,515     |   |      |   |      |   |      |   |      |   |      |   | **6,515**  |
| Fair value of derivative instruments |   | 1,131     |   | 276       |   | 74        |   | 18        |   | 48        |   | 85        |   | **1,632**  |
|                                 |   | **8,609** |   | **3,859** |   | **2,559** |   | **2,027** |   | **2,863** |   | **9,498** |   | **29,415** |
| Interest on finance debt             |   | 720       |   | 712       |   | 654       |   | 563       |   | 460       |   | 1,726     |   | **4,835**  |
| Guarantees        to banks           |   | 339       |   |      |   |      |   |      |   |      |   |      |   | **339**    |
|                                 |   |           |   |           |   |           |   |           |   |           |   |           |   |            |

 

| **Dec.        31, 2011** |    | **Maturity year** |
|--------------------------|--------------|-------------------|
| (euro        million)    |         |                   |

|         | **  ** | **2012** | **  ** | **2013** | **  ** | **2014** | **  ** | **2015** | **  ** | **2016** | **  ** | **2017 and thereafter** | **  ** | **Total** |
|--------------|------------------|----------|------------------|----------|------------------|----------|------------------|----------|------------------|----------|------------------|-------------------------|------------------|-----------|
|    |             |          |        |          |        |          |        |          |        |          |        |                         |        |           |

| Non-current 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**    |
|                            |   |           |    |           |    |           |    |           |    |           |    |           |    |            |

**Trade and other payables**The tables below summarize the Group trade and other payablesby maturity.

| **Dec.        31, 2010** |    | **Maturity year** |
|--------------------------|--------------|-------------------|
| (euro        million)    |    |                   |

|         | **  ** | **2011** | **  ** | **2012-2015** | **  ** | **2016 and thereafter** | **  ** | **Total** |
|--------------|------------------|----------|------------------|---------------|------------------|-------------------------|------------------|-----------|
|    |        |          |        |               |        |                         |        |           |

| Trade payables                  |   | 13,111     |   |   |   |   |   | **13,111** |
|---------------------------------|--------|------------|--------|--------|--------|--------|--------|------------|
| Advances,        other payables |   | 9,464      |   | 29     |   | 38     |   | **9,531**  |
|                            |   | **22,575** |   | **29** |   | **38** |   | **22,642** |
|                            |   |            |   |        |   |        |   |            |

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| **Dec.        31, 2011** |    | **Maturity year** |
|--------------------------|--------------|-------------------|
| (euro        million)    |    |                   |

|         | **  ** | **2012** | **  ** | **2013-2016** | **  ** | **2017 and thereafter** | **  ** | **Total** |
|--------------|------------------|----------|------------------|---------------|------------------|-------------------------|------------------|-----------|
|    |        |          |        |               |        |                         |        |           |

| Trade payables                  |         | 13,436     |         |   |         |   |         | **13,436** |
|---------------------------------|--------------|------------|--------------|--------|--------------|--------|--------------|------------|
| Advances,        other payables |         | 9,476      |         | 32     |         | 38     |         | **9,546**  |
|                            |         | **22,912** |         | **32** |         | **38** |         | **22,982** |
|                       |    |            |    |        |    |        |    |            |

**Expected payments by period under contractual obligationsand commercial commitments**In addition to finance debt and trade payables presented inthe financial statements, the Group has in place a number ofcontractual obligations arising in the normal course of thebusiness. To meet these commitments, the Group will have to makepayments to third parties. The Company’s main obligationsare take-or-pay clauses in contracts of the Gas & Powersegment, whereby the Company obligations consist of off-takingminimum quantities of product or service or paying thecorresponding cash amount that entitles the Company to off-takethe product in future years. Future obligations in connectionwith these contracts were calculated by applying the forecastedprices of energy or services included in the four-year businessplan 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.

| (euro        million) |   | **Maturity year** |
|-----------------------|--------|-------------------|
|                  |   |                   |

|   |   | **2012** | **  ** | **2013** | **  ** | **2014** | **  ** | **2015** | **  ** | **2016** | **  ** | **2017 and thereafter** | **  ** | **Total** |
|--------|--------|----------|------------------|----------|------------------|----------|------------------|----------|------------------|----------|------------------|-------------------------|------------------|-----------|
|   |   |          |             |          |             |          |             |          |             |          |             |                         |             |           |

| **Operating lease obligations**(a)                  |   | **839**    |   | **534**    |   | **440**    |   | **250**    |   | **161**    |   | **255**     |   | **2,479**   |
|-----------------------------------------------------|--------|------------|--------|------------|--------|------------|--------|------------|--------|------------|--------|-------------|--------|-------------|
| **Decommissioning        liabilities**(b)           |   | **98**     |   | **179**    |   | **305**    |   | **95**     |   | **165**    |   | **13,287**  |   | **14,129**  |
| **Environmental liabilities**(c)                    |   | **269**    |   | **306**    |   | **251**    |   | **221**    |   | **81**     |   | **798**     |   | **1,926**   |
| **Purchase        obligations** (d)                 |   | **21,401** |   | **21,034** |   | **20,943** |   | **20,131** |   | **17,743** |   | **191,118** |   | **292,370** |
| Gas                                                 |   |       |   |       |   |       |   |       |   |       |   |        |   |        |
| -        take-or-pay contracts                      |   | 19,972     |   | 19,688     |   | 19,656     |   | 18,932     |   | 16,587     |   | 182,112     |   | **276,947** |
| - ship-or-pay contracts                             |   | 1,034      |   | 988        |   | 919        |   | 898        |   | 847        |   | 5,816       |   | **10,502**  |
| Other        take-or-pay or ship-or-pay obligations |   | 170        |   | 165        |   | 176        |   | 172        |   | 161        |   | 1,079       |   | **1,923**   |
| Other purchase obligations (e)                      |   | 225        |   | 193        |   | 192        |   | 129        |   | 148        |   | 2,111       |   | **2,998**   |
| **Other        obligations**                        |   | **4**      |   | **4**      |   | **4**      |   | **3**      |   | **3**      |   | **124**     |   | **142**     |
| Memorandum of intent relating Val d’Agri       |   | 4          |   | 4          |   | 4          |   | 3          |   | 3          |   | 124         |   | **142**     |
|                                                |   | **22,611** |   | **22,057** |   | **21,943** |   | **20,700** |   | **18,153** |   | **205,582** |   | **311,046** |
|                                                |   |            |   |            |   |            |   |            |   |            |   |             |   |             |

|    |    |                                                                                                                                                                                                                                                                                                                                                                                                                                |
|--------------|--------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| (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)          |    | Refers to        arrangements to purchase capacity entitlements at certain        re-gasification facilities in the U.S. (euro 2,750        million).                                                                                                                                                                                                                                                                                    |

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**Capital expenditure commitments**In the next four years, Eni plans to make capitalexpenditures of euro 59.6 billion. The table below summarizesEni’s capital expenditure commitments for property, plantand equipment and capital projects at December 31, 2011. 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.Such costs are included in the amounts shown.

|   |   | **Maturity year** |
|--------|--------|-------------------|
|   |   |                   |

| (euro        million) |   | **2012** | **  ** | **2013** | **  ** | **2014** | **  ** | **2015** | ** ** | **2016 and thereafter** | ** ** | **Total** |
|-----------------------|--------|----------|------------------|----------|------------------|----------|------------------|----------|------------|-------------------------|------------|-----------|
|                  |   |          |             |          |             |          |             |          |       |                         |       |           |

| Committed on major projects     |   | 6,103      |   | 6,275      |   | 5,013     |   | 3,309     |   | 12,286     |   | **32,986** |
|---------------------------------|--------|------------|--------|------------|--------|-----------|--------|-----------|--------|------------|--------|------------|
| Other        committed projects |   | 7,411      |   | 5,446      |   | 3,498     |   | 2,709     |   | 3,073      |   | **22,137** |
|                            |   | **13,514** |   | **11,721** |   | **8,511** |   | **6,018** |   | **15,359** |   | **55,123** |
|                            |   |            |   |            |   |           |   |           |   |            |   |            |

The amounts shown in the table above include committedexpenditures to execute environmental investments, followingEni’s proposal to the Italian Ministry for the Environmentfor a global settlement on certain environmental issues.

**Other information about financial instruments**The carrying amount of financial instruments and relevanteconomic effect as of and for the years ended December 31, 2010and 2011 consisted of the following:

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

|   |   | **Finance income        (expense)         recognized in** |   | **Finance income        (expense)         recognized in** |
|--------|--------|-----------------------------------------------------------|--------|-----------------------------------------------------------|
|   |   |                                                           |   |                                                           |

| (euro        million) |   | **Carrying amount** |   | **Profit and loss        account** |   | **Equity** |   | **Carrying amount** |   | **Profit and loss        account** |   | **Equity** |
|-----------------------|--------|---------------------|--------|------------------------------------|--------|------------|--------|---------------------|--------|------------------------------------|--------|------------|
|                  |   |                     |   |                                    |   |            |   |                     |   |                                    |   |            |

| **Held-for-trading financial instruments**                                                |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|-------------------------------------------------------------------------------------------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|
| Non-hedging        derivatives (a)                                                        |   | 46     |   |   | (13    | )      |   |   |   |   | 17     |   | 76     |   |   |   |   |
| **Held-to-maturity financial instruments**                                                |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Securities        (b)                                                                     |   | 35     |   |   | 1      |   |   |   |   |   | 62     |   | 1      |   |   |   |   |
| **Available-for-sale financial instruments**                                              |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Securities        (b)                                                                     |   | 382    |   |   | 9      |   |   | (9     | )      |   | 262    |   | 8      |   |   | (6     | )      |
| **Receivables and payables and other        assets/liabilities valued at amortized cost** |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Trade and        receivables and other (c)                                                |   | 23,998 |   |   | (110   | )      |   |   |   |   | 24,730 |   | (65    | )      |   |   |   |
| Financing receivables (b)                                                                 |   | 2,150  |   |   | 84     |   |   |   |   |   | 2,174  |   | 112    |   |   |   |   |
| Trade        payables and other (d)                                                       |   | 22,642 |   |   | 26     |   |   |   |   |   | 22,982 |   | (123   | )      |   |   |   |
| Financing payables (b)                                                                    |   | 27,783 |   |   | (535   | )      |   |   |   |   | 29,597 |   | (851   | )      |   |   |   |
| **Assets        at fair value through profit or loss (fair value option)**                |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Investments (b)                                                                           |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| **Net        assets (liabilities) for hedging derivatives**(e)                            |   | (320   | )      |   | (402   | )      |   | 47     |   |   | 32     |   | (309   | )      |   | 76     |   |
|                                                                                      |   |        |        |   |        |        |   |        |        |   |        |   |        |        |   |        |        |

|    |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |
|--------------|--------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| (a)          |    | In the profit        and loss account, economic effects were recognized as        income within "Other operating income (loss)"        for euro 188 million (income for euro 118 million in        2010) and as expense within "Finance income        (expense)" for euro 112 million (expense for euro        131 million in 2010).                                                                                                                          |
| (b)          | i       | Income or        expense were recognized in the profit and loss account        within "Finance income (expense)".                                                                                                                                                                                                                                                                                                                                                       |
| (c)          |    | In the profit        and loss account, economic effects were essentially        recognized as expense within "Purchase, services and        other" for euro 142 million (expense for euro 128        million in 2010) (impairments net of reversal) and as        income for euro 77 million within "Finance income        (expense)" (income for euro 18 million in 2010)        (positive exchange rate differences at year-end and        amortized cost). |
| (d)          |    | 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)".                                                                                                                                                                                                                                |
| (e)          |    | 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 292 million (euro 414 million at December 31, 2010)        and within "Finance income (expense)" for euro        17 million (income for euro 13 million in 2010) (time        value component).                                                             |

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| **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, 2011, were classified as follows: (i)level 1, “Other financial assets held for trading oravailable for sale” and “Non-hedging derivatives -Future”; and (ii) level 2, derivative instruments differentfrom “Future” included in “Other currentassets”, “Other non-current receivables”,“Other current liabilities” and “Other non-currentliabilities”. During the 2011, no transfers were donebetween the different hierarchy levels of fair value.

The table below summarizes the amount of financial instrumentsvalued at fair value:

| (euro million) |   |   |   | **Note** |   | **Dec. 31, 2010** |   | **Dec. 31, 2011** |
|----------------|--------|--------|--------|----------|--------|-------------------|--------|-------------------|
|           |   |   |   |          |   |                   |   |                   |

| **Current assets**                               |   |   |   |   |   |   |
|--------------------------------------------------|--------|--------|--------|--------|--------|--------|
| Other        financial assets available for sale |   | (8)    |   | 382    |   | 262    |
| Non-hedging derivatives - Future                 |   | (13)   |   | 33     |   | 68     |
| Other        non-hedging derivatives             |   | (13)   |   | 593    |   | 1,494  |
| Cash flow hedge derivatives                      |   | (13)   |   | 210    |   | 157    |
| **Non-current        assets**                    |   |   |   |   |   |   |
| Non-hedging derivatives - Future                 |   | (20)   |   |   |   | 2      |
| Other        non-hedging derivatives             |   | (20)   |   | 420    |   | 712    |
| Cash flow hedge derivatives                      |   | (20)   |   | 102    |   | 33     |
| **Current        liabilities**                   |   |   |   |   |   |   |
| Non-hedging derivatives - Future                 |   | (25)   |   | 10     |   | 63     |
| Other        non-hedging derivatives             |   | (25)   |   | 646    |   | 1,605  |
| Cash flow hedge derivatives                      |   | (25)   |   | 475    |   | 121    |
| **Non-current        liabilities**               |   |   |   |   |   |   |
| Non-hedging derivatives - Future                 |   | (30)   |   |   |   | 3      |
| Other        non-hedging derivatives             |   | (30)   |   | 344    |   | 588    |
| Cash flow hedge derivatives                      |   | (30)   |   | 157    |   | 37     |
|                                             |   |        |   |        |   |        |

**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**

**ENI SPA(i) Investigation of the quality of groundwater in the area ofthe refinery of Gela.**In 2002, the Public Prosecutor of Gelacommenced a criminal investigation concerning the refinery ofGela to ascertain the quality of groundwater in the area of therefinery. Eni is charged of having breached environmental rulesconcerning the pollution of water and soil and of illegaldisposal of liquid and solid waste materials. The preliminaryhearing phase was closed for one employee who would stand trial,while the preliminary hearing phase is ongoing for otherdefendants. During the hearings the Judge admitted as plaintiffsthree environmental associations. On May 14, 2010,

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following the examination, the Court of Gela issued a sentencewhereby on one side criminal accusation against the abovementioned employee was dismissed as a result of the statute oflimitations, on the other side the defendant was condemned to thepayment of legal costs and of a compensation to the plaintiffs.The amount of the compensation will be determined by a resolutionof a Civil Court. The proceeding is pending before the SecondDegree Court.

**(ii) Alleged negligent fire (Priolo).** The PublicProsecutor of Siracusa commenced an investigation regardingcertain Eni managers who were previously in charge of conductingoperations at the refinery of Priolo (Eni Refining &Marketing Division divested this asset to ERG RaffinerieMediterranee SpA in July 31, 2002) to ascertain whether theyacted with negligence in connection with a fire that occurred atthe Priolo plants on April 30 and May 1-2, 2006. Afterpreliminary investigations the Public Prosecutor requested theopening of a proceeding against the mentioned managers fornegligent behavior. The Ministry for the Environment has beenacting as plaintiff. After the review of the technical appraiserand of the indictments issued by the Public Prosecutor, theproceeding has been continuing with the debate phase.

**(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 are being investigated who were in charge atthe time of the events subject to probe, including chiefexecutive officers and plant general managers of theCompany’s subsidiaries AgipPetroli SpA (now merged into theParent Company Eni SpA in the Refining & Marketing Division),Syndial and Polimeri Europa. According to the technical surveythe ground and the groundwater at the Priolo site should beconsidered polluted according to Legislative Decree No. 152/2006.This contamination was caused by a spill-over made in the periodprior to 2001 and not subsequent to 2005; the equipment stilloperating on the site represent another source of risk, inparticular the ones owned by ISAB Srl (ERG). According to thefindings, the Public Prosecutor requested the dismissal of theproceeding. The decision of the Judge on the dismissal of theproceeding is still pending.

**(iv) Fatal accident Truck Center Molfetta –Prosecuting body: Public Prosecutor of Trani.** On March 3,2008, in the Municipality of Molfetta a fatal accident occurredthat caused the death of four workers deputed to the cleaning ofa tank car owned by the company FS Logistica, part of the ItalianRailways Group. The tank was used for the transportation ofliquid sulfur produced by Eni in the refinery of Taranto anddestined to the client company Nuova Solmine. Consequently acriminal action commenced against certain employees of FSLogistica and of its broker “La Cinque Biotrans” and,under the provisions of Legislative Decree 231/2001, against thetwo above mentioned companies and the company responsible for theclean-up of the tank car - Truck Center. On October 26, 2009, theFirst Degree Court concluded that both the above mentionedpersons and the three companies were guilty. Additionally, thedocumentation related to the trial was forwarded to the PublicProsecutor of Trani in order to ascertain the eventualresponsibilities of Eni and Nuova Solmine employees in relationto the fatal accident and also to the Public Prosecutors ofTaranto and Grosseto (competent for Nuova Solmine) in order toascertain eventual irregularities in the procedures of handlingand transporting liquid sulfur. Following the sentence, thePublic Prosecutor of Trani commenced an investigation against anumber of employees of Nuova Solmine and an employee ofEni’s Refining & Marketing Division, responsible formarketing liquefied sulfur. On May 11, 2010, Eni SpA, eightemployees of the company and a former employee were notified ofclosing of the investigation that objected the manslaughter,grievous bodily harm and illegal disposal of waste materials. Anumber of defendants filled defensive memoranda. The PublicProsecutor has removed three defendants and transmitted evidenceto the Judge for the Preliminary Investigations requesting todismiss the proceeding. The Judge for the PreliminaryInvestigations accepted the above mentioned request. The Judgescheduled the hearing for the positions not dismissed to April19, 2011, when the Judge admitted as plaintiffs against the abovementioned individuals all the parts, excluding the relative ofone of the victims, whose position have been declaredinadmissible lacking of cause of action. The Judge declaredinadmissible all the requests in acting as plaintiff against Eni,under the provisions of Legislative Decree No. 231/2001 and ofrecent case law.

Eni SpA and its indicted employees requested to stand asummary procedure. The Judge for the Preliminary Hearingsaccepted this request and also resolved to deny that Eni standtrial for civil responsibility at the summary procedure. OnDecember 5, 2011 the Judge pronounced an acquittal sentence forthe individuals involved and for Eni SpA, as the indictments aregroundless.

**(v) Seizure of areas located in the Municipalities ofCassano allo Jonio and Cerchiara di Calabria – Prosecutingbody: Public Prosecutor of Castrovillari.** On June 11, 2010,the Company received a notification of a judicial measure for thepreventive seizure of areas located in the Municipalities ofCassano allo Jonio and Cerchiara di Calabria, following a priorseizure of other areas in the same Municipalities notifiedthrough a judicial measure on February 2010. The above mentioneddecisions were the result of an investigation commenced after thedamage of the HDPE covering the zinc ferrites generated in theindustrial site of Pertusola Sud and basing on the Court’sconclusions illegally stored in the Municipalities of Cassanoallo Jonio and Cerchiara di Calabria. The

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impounded areas are those where the above mentioned waste wasstored. The proceeding is in the phase of the preliminaryhearings. The circumstances object of investigation are the sameconsidered in the criminal action concluded in 2008 with anacquittal sentence for one of the defendants while the Judgedismissed the accusation for all the other defendants as a resultof the statute of limitations. In this case the criminalaccusation is of omitted clean-up. Syndial SpA gave theavailability for the removal of the waste materials, the relatedoperations are still pending. All the operations for the removalof the waste materials from the three landfills were completed bythe end of September 2011. The Public Prosecutor commencedinvestigations on the external areas subject to preventiveseizure as disclosed above in order to identify further wastematerials that should be removed. Syndial entered a transactionagreement with the Municipality of Cerchiara for the recognitionof damages caused by the unauthorized landfills. The Municipalityof Cerchiara renounced to all claims in relation to thecircumstances investigated in the criminal proceeding.

**(vi) Gas & Power Division – Industrial site ofPraia a Mare.** Based on complaints filed by certain offendedpersons, the Public Prosecutor of Paola started an enquiry aboutalleged diseases related to tumors which those persons contractedon the workplace. Those persons were employees at an industrialcomplex owned by a Group subsidiary many years ago. On the basisof the findings of independent appraisal reports, in the courseof 2009 the Public Prosecutor resolved that a number ofex-manager of that industrial complex would stand trial. In thepreliminary hearing held in November 2010, 189 persons enteredthe trial as plaintiff; while 107 persons were declared as havingbeen offended by the alleged crime. The plaintiffs have requestedthat both Eni and Marzotto SpA would bear civil liability.However, compensation for damages suffered by the offendedpersons has yet to be determined. Upon conclusion of thepreliminary hearing, the Public Prosecutor resolved that alldefendants would stand trial for culpable manslaughter, culpableinjuries, environmental disaster and negligent conduct aboutsafety measures on the workplace. The proceeding will continuewith the debate phase.

**Syndial SpA(vii) Syndial SpA (company incorporating EniChem Agricoltura SpA– Agricoltura SpA in liquidation – EniChem AugustaIndustriale Srl - Fosfotec Srl) – Proceeding about theindustrial site of Crotone.** In 2010, the Public Prosecutor ofCrotone started an inquiry about a landfill site located in themunicipal area. The landfill site was taken over by Eni’ssubsidiary in 1991 following the divestment of an industrialcomplex by Montedison (now Edison SpA). The landfill site hadbeen filled with industrial waste from Montedison activities till1989 and then no more waste was discharged there. Eni’ssubsidiary started a plan to put on safety the landfill site. OnMay 3, 2011, the Public Prosecutor notified certain persons,including a number of managers of Eni’s subsidiaries, whotook over the ownership of the landfill site in the course of theyears that criminal investigations have commenced. The PublicProsecutor has charged the investigated persons with the allegedcrimes of environmental disaster and poisoning of substances usedin the food chain due to the circumstance that the landfill sitewas partially located under the seabed. In addition the PublicProsecutor has claimed the alleged crime of omitted clean-up ofthe area. The Public Prosecutor requested the performance ofprobationary evidence. The defending counsel filed memorandaclaiming that Eni’s managers were not involved in thehandling of the landfill site. Investigations are ongoing. In thenext hearing the Judge for the Preliminary Hearing will identifythe expert in charge of made the technical assessment requestedby the Public Prosecutor.

**(viii) Porto Torres – Prosecuting body: PublicProsecutor of Sassari.** In March 2009, the Public Prosecutorof Sassari (Sardinia) resolved to commence a criminal trialagainst a number of executive officers and managing directors ofcompanies engaging in petrochemicals operations at the site ofPorto Torres, including the manager responsible for plantoperations of the Company’s fully-owned subsidiary Syndial.The charge involves environmental damage and poisoning of waterand crops. The Province of Sassari, the Association Anpana(animal preservation), the company Fratelli Polese Snc, situatedin the industrial site and the Municipality of Porto Torres havebeen acting as plaintiffs. The Judge for the Preliminary Hearingadmitted as plaintiffs the above mentioned parts, but based onthe exceptions issued by Syndial on the lack of connectionbetween the action as plaintiff and the charge, denied that theclaimants would act as plaintiff with regard to the seriouspathologies related to the existence of poisoning agents in themarine fauna of the industrial port of Porto Torres. The Judgealso resolved that Syndial SpA, Polimeri Europa SpA, Ineos Vinylsand Sasol Italy SpA would bear civil liability. Then, the Judgebased on the memoranda filed by the defending counsels resolvedthat all defendants would stand trial before a jurisdictionalbody of the Italian criminal law which is charged with judgingthe most serious crimes. Thus the Judge accepted the conclusionsof the Public Prosecutor that claimed the crimes of environmentaldamage and poisoning of water and crops. The proceeding continueswith the debate phase.

 

**1.2 Civil and administrative proceeding**

**Syndial SpA (former EniChem SpA)(i) Alleged pollution caused by the activity of the Mantovaplant.** In 1992, the Ministry for the Environment summonedEniChem SpA (now Syndial SpA) and Montecatini SpA (now EdisonSpA) before the Court of Brescia. 

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The Ministry requested, primarily, environmental remediationfor the alleged pollution caused by the activity of the Mantovaplant from 1976 until 1990, and provisionally, in case there wasno possibility to remediate, the payment of environmentaldamages. Edison agreed on a settlement with the Ministry wherebyEdison quantified compensation for environmental damage freeingfrom any obligation Syndial, which purchased the plant in 1989.Negotiations between the parts for the quantification of theenvironmental damage (relating only to 1990) are underway; thejudgment has been postponed to the hearing of May 24, 2012.

**(ii) Summon before the Court of Venice for environmentaldamages allegedly caused to the lagoon of Venice by the PortoMarghera plants.** On December 13, 2002, EniChem SpA (nowSyndial SpA), jointly with Ambiente SpA (now merged into SyndialSpA) and European Vinyls Corporation Italia SpA (EVC Italia, thenIneos Vinyls SpA, actually Vinyls Italia SpA) was summoned beforethe Court of Venice by the Province of Venice. The provincerequested compensation for environmental damages that initiallywere not quantified, allegedly caused to the lagoon of Venice bythe Porto Marghera plants, which were already the subject of twoprevious criminal proceedings against employees and managers ofthe defendants. EVC Italia and the actual company, Vinyls Italia,presented an action to be indemnified by Eni’s Groupcompanies in case the alleged pollution is proved. The Provinceof Venice, in the preliminary stage of the proceeding, filedclaims amounting to euro 287 million. Syndial submitted itswritten reply evidencing that the above mentioned damagequantification has been made lacking of probations for the damageand based on evidence that allowed the Court of First and SecondInstance to disclaim EniChem of any responsibility throughdefinitive sentence. In the hearing on October 16, 2009,scheduled to review the technical appraisal, the Court declaredthe interruption of the proceeding because Vinyls Italia hadundergone a reorganization procedure. The proceeding has beensuspended until April 22, 2010 when the Province of Venicepursuant to Article 303 of the Code of Civil Procedure restartedthe proceeding. The proceeding continued with the review theposition of Vinyls and Syndial. The judgment is still pending.

**(iii) Claim of environmental damages, allegedly caused byindustrial activities in the area of Crotone – ProsecutingBodies: the Council of Ministers, the Ministry for theEnvironment, 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 requested Syndial toappear before the Civil Court of Milan to face charges of causingenvironmental damage caused by the operations of Pertusola SudSpA (merged in EniChem, now Syndial) in 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 Calabria Region is claimingcompensation amounting to euro 129 million for the siteenvironmental remediation and clean-up on the basis of the costestimation provided in the remediation plan submitted by theDelegated Commissioner, plus additional compensation amounting toa preliminary estimate of euro 800 million relating toenvironmental damage, estimated increases in the regional healthexpenditures and damage to the public image to be fairlydetermined during the civil proceeding. The Council of Ministers,the Ministry for the Environment and the Delegated Commissioneris claiming compensation amounting to euro 129 million for thesite environmental remediation and clean-up (this request isanalogous to that of the Calabria Region) and eventualcompensation for other environmental damage to be fairlydetermined during the civil proceeding. In February 2007 theMinistry for the Environment filed with the Court an independentappraiser’s report issued by APAT that estimated arefundable environmental damage amounting to euro 1,920 million,including the remediation and clean-up expenditures, increased byeuro 1,620 million from the original amount of euro 129 million,and an estimation of environmental damage and other damage itemsamounting approximately to euro 300 million. The amountsestimated by the independent appraiser, added to the claim of theCalabria Region, generate a total of euro 2,720 million ofpotential compensation. In May and September 2007 Syndialpresented its own technical advice that, based on what theCompany believes to be well-founded circumstances, vigorouslyobject the independent appraiser’s findings filed by theMinistry for the Environment on site contamination, theresponsibility of Syndial in the contamination of the site, thecriteria of estimate remediation costs, which according to theCompany are erroneous, arbitrary and technically inadequate. In2008, Eni’s subsidiary Syndial took charge of performingcertain clean-up activities and on December 5, 2008, presented aglobal project to clean-up and remediate all interested areas. Asfor the approval procedure of the above mentioned project allinterested parties approved the removal of the dump from theseafront to another area, the construction of an hydraulicbarrier and of the related treatment plant of the groundwater(providing that if the subsequent monitoring would demonstratethe efficiency of the plant, Eni’s subsidiary would build-upa physical barrier in the seafront) and the start-up of the firstlot of activities on the soil through in situ technologies oncondition that all the waste present in the areas, recognizedafter a specific inspection. The environmental provision made bythe Company is progressively utilized as the execution of theclean-up activities progresses. On October 7, 2009, anindependent appraiser report was filed that reviewed theenvironmental status of the site and estimated the remediationcosts while the estimate of both the health damage caused by thepollution and the environmental damage would be issued in afurther independent appraiser report. The findings of theindependent appraisers are substantially in line with the issuesexpressed by Syndial on the measures for the environmentalremediation and clean-up, based on a risk analysis aimed todefine 

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effective and specific actions. The clean-up project, approvedto a great extent by the Ministry for the Environment and theCalabria Region, has been considered substantially adequate. Theindependent appraisers affirmed the necessity of clean-upmeasures that were not planned by Syndial on one of the externalareas (the so-called archaeological area) and considered beingunnecessary the dredging of sea sediments. The estimated clean-upcosts are in line with the estimate made by Syndial. Theindependent appraiser report is less favorable to Syndial becauseit identifies as source of the contamination the recentmanagement of the production slag. The independent appraiserreport evaluated that the production technology was a BAT (BestAvailable Technology), instead the slag treatment could beperformed in a more respectful way for the environment and theproducts (the so-called Cubilot) lacked the physic-chemicalcharacteristic of stability that would avoided the emission ofpolluting agents in the soil. As regards the quantification ofthe environmental damage different by the remediation, theindependent report APAT provided by the Ministry for theEnvironment quantified the damage for the lack of fruition of thesite basing on the remediation costs that were significantlyreduced by the independent appraiser report. In case the Judgeresolves on the responsibility of Syndial in the contamination ofthe site based on the conclusions of the independent appraiserreport, the Company could be liable, for the environmental damagedifferent from the goods fruition (damage to the community,increases in the regional health expenditures), at least in partand as far as the damage is actually probed. On November 14,2009, Syndial filed its objections to the independent appraiserreport, sharing the conceptual model adopted by the independentappraiser report but demonstrating that the site contaminationshould be charged mainly to past management of the pollution slagon part of other operators that operated the site until the’70s. On November 11, 2009 the Calabria Region filed itsobjection to the independent appraiser report affirming that theenvironmental damage to the surrounding areas of the site has notbeen assessed by the independent appraisers. The hearing for thereview of the independent appraiser report and of the partsobjections, assigned to another Judge, took place on April 13,2010. During the hearing the Calabria Region required the reviseof the independent appraiser report. The Judge rejected therequest. As regards the ascertainment of the existence of aresidual environmental damage not remedied by the clean-upactivities, the Board State of Lawyers on behalf of the Ministryfor the Environment requested an evaluation of the impact of thenew regulation on the above mentioned damage. Syndial filed adocument explaining the modification of the environmental damageregulation. The Judge scheduled the deadline for the filing ofthe counterparts’ objections to such document for September16, 2010, and September 30, 2010, for the submission of Syndialreply. The findings related to the modification of theEnvironmental Damage regulation introduced by the Article 5-bisof the Law Decree No. 135/2009 submitted by all the parties willbe discussed in the next hearing scheduled for November 17, 2010.On September 15, 2010, the Calabria Region submitted a memorandumobjecting to the documents filed by Syndial in the hearing ofApril 13, 2010. In September 30, 2010, Syndial filed a memorandumon the impact of the new Italian regulation about theenvironmental damage as per Law Decree No. 135/2009 on theproceeding. With the act of December 21, 2010, the Judge deemedthe acquired elements sufficient for the closing of theproceeding. The hearing for the final decision was postponed toNovember 16, 2011, for the filing of the outcome. In the hearingof November 16, 2011, the Ministry for the Environment, theCouncil of Ministers, the Delegated Commissioner forEnvironmental Emergency in the Calabria Region and the CalabriaRegion filed their outcome confirming the requests included inthe summon and requested a new independent technical assessment.Syndial objected the inadmissibility of all the requests filed bythe counterparts. All the parts involved in the proceeding filedtheir final memoranda with the Court.

On February 24, 2012, the Court sentenced Syndial to correctlyexecute the environmental clean-up of the site and to pay to thePresidency of the Council of Ministers and the Ministry forEnvironment the sum of euro 56.2 million plus interest chargesaccrued from the plaintiffs’ claims, while rejecting theclaims of the Calabria Region. Eni accrued an environmental riskprovision that is progressively utilized for the clean-upactivities. However, discussions have been going on in order toarrange for a possible transaction of all environmental claimspending on this matter.

**(iv) Summon for alleged environmental damage caused by DDTpollution in the Lake Maggiore – Prosecuting body: Ministryfor the Environment.**With a temporarily executive decisiondated July 3, 2008, the District Court of Turin sentenced thesubsidiary Syndial SpA (former EniChem) to compensate forenvironmental damages that were allegedly caused when EniChemmanaged an industrial plant at Pieve Vergonte during the1990-1996 period, as claimed by the Ministry for the Environment.Specifically, the Court sentenced Syndial to pay the ItalianMinistry for the Environment compensation amounting to euro1,833.5 million, plus legal interests that accrue from the filingof the decision. Syndial and Eni technical-legal consultants haveconsidered the decision and the amount of the compensation to bewithout factual and legal basis and have concluded that anegative outcome of this proceeding is unlikely. Particularly,Eni and its subsidiary deem the amount of the environmentaldamage to be absolutely ill-founded as the sentence has beenconsidered to lack sufficient elements to support such a materialamount of the liability charged to Eni and its subsidiary withrespect to the volume of pollutants ascertained by the ItalianEnvironmental Minister. On occasion of the 2008 consolidatedfinancial statements, management confirmed its stance of makingno loss provision for this proceeding on the basis of the abovementioned technical legal advice, in concert with externalconsultants on accounting principles. In July 2009, Eni’ssubsidiary Syndial filed an appeal against the above mentionedsentence, also requesting suspension of the sentenceeffectiveness. The Ministry for the Environment, in the appealfiled, requested to the Second Instance Court to adjust the firstdegree sentence

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condemning Syndial to the payment of euro 1,900 million oralternatively euro 1,300 million in addition to the amountassessed by the First Degree Court. In the hearing on December11, 2009, the Second Instance Court considering the modificationof Environmental Damage regulation introduced by the Article5-bis of the Law Decree No. 135/2009 and following a request ofthe Board of State Lawyers decided the postponement to May 28,2010, pending the Decree of the Ministry for the Environmentrelated to the determination of the quantification criteria forthe monetary compensation of the environmental damage pursuant tothe above mentioned Article 5-bis of the Law Decree No. 135/2009.The Board of State Lawyers committed itself to not examine thesentence until the next hearing. In the hearing of May 28, 2010,Syndial requested a further postponement still pending the abovementioned Decree of the Ministry for the Environment. The Boardof State Lawyers agreed to the request, justifying hepostponement with the negotiation in place between the partiesfor the global solution of the proceeding, committing itself tonot examine the sentence until the next hearing. The Judgedecided the postponement to June 15, 2012. Another administrativeproceeding is ongoing regarding a Ministerial Decree enacted bythe Italian Ministry for the Environment. The decree providesthat Syndial executes the following tasks: (i) the upgrading of ahydraulic barrier to protect the site; and (ii) the design of aproject for the environmental remediation of Lake Maggiore. TheAdministrative Court of Piemonte rejected Syndial’sopposition against the outlined environmental measures requestedby the Ministry for the Environment. However, the Court judgedthe prescriptions of the Ministry regarding the remediation ofthe site to be plain findings of an environmental enquiry toascertain the state of the lake. Syndial has filed an appealagainst the decision of the Court before an upper degree body,also requesting suspension of the effectiveness of the decision.The appeal has been put on hold considering that a plan toascertain the environmental status of the site has been approvedby all interested parties, including the Ministry and localMunicipalities pursuant to the statement on April 28, 2009, whichincluded certain recommendations. Syndial appealed against thisstatement and the related Ministerial Decree of approval in orderto avoid the case to give implicit consent to the request(appealed by the Company) of the Minister that claimed thatSyndial is obliged to execute the clean-up. On the contrary,Syndial has agreed on the scope of the plan to ascertain theenvironmental status of the site, as it has been actuallyimplementing it. Syndial also presented a clean-up project forthe groundwater and the soil, that hasn’t been approved, asthe above mentioned prescriptions that have been prescribed arethe object of the Company opposition in the above mentionedproceeding. In case Syndial should be found guilty, it wouldincur remediation and clean-up expenses, actually notquantifiable, that would be offset against any compensation forthe environmental damage that Eni’s subsidiary is condemnedto pay with regard to civil proceeding pending before the SecondInstance Court of Turin.

**(v) Action commenced by the Municipality of Carrara for theremediation 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 unavoidable environmental damage (amounting toeuro 139 million), further damages of various types (e.g. damageto the natural beauty of this site) amounting to euro 80 millionas well as damages relating to loss of profit and propertyamounting to approximately euro 16 million. This request isrelated to an accident that occurred in 1984, as a consequence ofwhich EniChem Agricoltura SpA (later merged into Syndial SpA), atthe time owner of the site, carried out safety and remediationworks. The Ministry for the Environment joined the action andrequested environmental damage payment – from a minimum ofeuro 53.5 million to a maximum of euro 93.3 million – to bebroken down among the various companies that ran the plant in thepast. Syndial summoned Rumianca SpA, Sir Finanziaria SpA andSogemo SpA, who ran the plant in previous years, in order to beguaranteed. A report produced by an independent expert charged bythe Judge was filed with the Court. The findings of this reportquantify the residual environmental damage at euro 15 million.With a sentence of March 2008, the Court of Genova rejected allclaims made by the Municipality of Carrara and the Ministry forthe Environment. Both plaintiffs filed an appeal against thisdecision in June 2008 confirming the requests issued in the firstjudgment. Syndial filed in the appeal hearing, disputing theplaintiffs’ claims. The proceeding is underway without anyfurther investigation. The hearing has been postponed to June 13,2011 for the filing of the pleadings. In this hearing the partiesfiled their pleadings and the Judge postponed the hearing for thefinal decision to October 6, 2011. In this hearing the Courtupheld the final decision without recommencing the investigationphase as requested by the Ministry for the Environment and theMunicipality of Carrara. With the decision No. 1026 of October22, 2011 the Second Instance Court confirmed the decision issuedin the first judgment and rejected all the claims made byMunicipality of Carrara, the Ministry for the Environment andLegambiente considering them without factual and legal basis,also deciding to offset the legal expenses between the parties.The administrations involved in the proceeding could still filean appeal before the Third Instance Court in the prescribedterms.

**(vi) 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 Polimeri Europa, Syndial and Eni R&M. Pollutionhas been detected in this area primarily due to a high mercuryconcentration which is allegedly attributed to the industrialactivity of the Priolo petrochemical site. The above mentionedcompanies opposed said administrative actions, objecting inparticular to the way in which remediation 

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works have been designed and information on concentration ofpollutants has been gathered. The Regional Administrative Courtof Catania with the Sentence No. 1254/2007 annulled the saiddecisions. The Ministry and the Municipalities of Augusta andMelilli filed a claim for the revocation of the decision andrequested the suspension of sentence effectiveness with theAdministrative Council of the Sicily Region which accepted theclaim. The recommendations, which the Council’s decisionrelated, have been restated by the Ministry for the Environmentwith further administrative resolutions that have been appealedby the Eni companies. Again the Regional Administrative Court ofCatania reiterated its decision to suspend the effectiveness ofthe Ministry’s acts. In January 2008 the Regional Court ofCatania accepted further claims on this matter. In June 2008 theMinistry for the Environment and the Municipalities of Melilliand Augusta filed an appeal against the decision of the RegionalCourt of Catania with the Administrative Council of the SicilyRegion, without a resolution of the issue of suspending theeffectiveness of the Regional Court’s decisions. The hearingfor the examination of both appeal pending with theAdministrative Council of the Sicily Region that has beenoriginally scheduled on December 11, 2008, has been postponedsine die due to preliminary issues pending with the Court ofJustice of the European Community. In April 2008, the Enicompanies challenged certain administrative acts of December 20,2007 related to the execution of further clean-up and remediationworks of sediments in the Augusta harbor. In this proceeding theRegional Court of Catania has ordered an independent appraiserreport, issued on February 20, 2009, that resulted favorable tothe objections of the objecting companies. The proceeding ispending. In May 2008, the Eni companies also challenged with theRegional Court of Catania, requesting the suspension ofadministrative act effectiveness, certain decisions of anAdministrative Body on March 6, 2008 (and other subsequentdecisions). Those decisions were intended to enlarge the scope ofthe already approved project of environmental remediation andclean-up of the groundwater trough works of physic limitation andthe new criteria used by the Administration Body in therestitution of the areas to their legitimate use. With regard tothis last proceeding, basing on a request of the appealingcompanies, the Regional Court of Catania requested the decisionof the Court of Justice of EU to decide on the correctapplication of the community principle, that represent the basisfor the all appeals’ decision particularly the principles ofthe liability associated with the environmental damage, theproportionality in bearing the expenditures associated withenvironmental remediation and clean-up, as well as a criteria ofreasonableness and diligent execution in remedying anenvironmental damage. On March 9, 2010, the European Court gave asentence that basically represented a favorable outcome forEni’s subsidiaries involved in the matter. Specifically, theEuropean Court confirmed the community principle of the liabilityassociated with the environmental damage, whereby central to itscorrect interpretation is the relation between cause and effectand the identification of the entity that is actually liable forpolluting. In the hearing of October 21, 2010, the Court upheldthe appeals filed by the counterparts while the filing of theCourt’s decisions is still pending. On April 29, 2011 theRegional Administrative Court resolved that a number of the abovementioned decision could be overruled by certain administrativeacts, thus requesting to specify to the Ministry for theEnvironment the decisions that could be considered stilleffective and the overruled ones. After the hearing of July 21,2011 the Regional Administrative Court unified all the claimsfiled by the companies in a single procedure. The hearing for thediscussion of all the claims took place on February 23, 2012; theRegional Administrative Court upheld the appeals filed by thecounterparts while the filing of the Court’s decisions isstill pending.

It must be noted that the Public Prosecutor of Siracusacommenced a criminal action against an unknown party in order toverify the effective contamination of the Augusta harbor and theconnected risks on the execution on the clean-up project proposedby the Ministry. The technical assessment disposed by the PublicProsecutor generated the following outcomes: a) no public healthrisk in the Augusta harbor; b) absence of any involvement on partof Eni companies in the contamination; and c) drainagesdangerousness. Based on those findings, the Public Prosecutordecided to dismiss the proceeding.

**Eni SpA(vii) Reorganization procedure of the airlines companies VolareGroup, Volare Airlines and Air Europe – Prosecuting body:Delegated Commissioner.**In March 2009 Eni and its subsidiarySofid (now Eni Adfin) were notified of a bankruptcy clawback aspart of a reorganization procedure filed by the airlinescompanies Volare Group, Volare Airlines and Air Europe whichcommenced under the provisions of Ministry of ProductionActivities, on November 30, 2004. The request regarded theoverride of all the payments made by those entities to Eni andEni Adfin, as Eni agent for the receivables collection, in theyear 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 phase andthe filing of the final statements of the case and the memorandumof objections, the decision is still pending. Eni accrued a riskprovision with respect to this proceeding.

**(viii) Claim for preventive technical inquiry – Courtof Gela.** On February 2012, Raffineria di Gela SpA, SyndialSpA and Eni SpA (R&M Division) were notified a claim issuedby 18 parents of child born malformed in the Municipality of Gelabetween 1992 and 2007. The claim for preventive technical inquiryaims at verifying the relation of causality between themalformation pathologies suffered by the children of therecurring parties and the environmental pollution caused by theGela site (pollution deriving by the existence and activities atthe industrial 

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plants of the Gela refinery and Syndial SpA), quantifying thealleged damages suffered and eventually identifying the terms andconditions to settle the claim. At the actual stage the claimsfiled by the plaintiffs have not been made public. In any case,the same issue was purpose of previous inquiries in a number ofproceedings, all resolved without the ascertainment of anyillicit behavior on part of Eni or its subsidiaries.

 

**2. Other judicial or arbitration proceedings**

**Saipem SpA(i) CEPAV Uno and CEPAV Due.** Saipem holds interests in theCEPAV Uno (50.36%) and CEPAV Due (52%) consortia that in 1991signed two contracts with TAV SpA (now RFI - Rete FerroviariaItaliana SpA) for the construction of two railway tracks for highspeed/high capacity trains from Milan to Bologna (almostcompleted) and from Milan to Verona (under construction).

**CEPAV Uno:** with regard to the project for theconstruction of the line from Milan to Bologna, an Addendum tothe contract between CEPAV Uno and TAV was signed on June 27,2003, redefining certain terms and conditions of the contract.Subsequently, the CEPAV Uno Consortium requested a time extensionfor the completion of works and a claim amounting to euro 800million then increased to euro 1,770 million. CEPAV Uno and TAVfailed to solve this dispute amicably. CEPAV Uno opened anarbitration procedure as provided for under terms of the contracton April 27, 2006. The preliminary investigation of thearbitration procedure is still pending. On July 30, 2010 theindependent consultants filed their finding that resultedpartially favorable to the Company and in the subsequent hearingsthe counterparts filed their motion on preliminary issues and therelated objections. In the next hearing of May 20, 2011 theindependent consultants filed further reports on the abovementioned issue. The deadline for the submission of thearbitration determination has been scheduled for December 31,2013. The next hearing has been scheduled for March 15,2012. The Judge also scheduled the deadline for the filing of thefinal statements of the case and the memorandum of objectionsrelated to the second report of the independent consultants forDecember 30, 2011 and February 15, 2012, respectively. On March23, 2009, the Arbitration Committee determined the TAV right toextend the assessment made by the independent accountingconsultant to the subcontractors appointed by the Consortium, thecontractors, or assignees. Basing on the alleged invalidity ofArbitration Committee determination, on April 8, 2010, theConsortium notified to the counterparts the appeal to thisdecision requesting its suspension before the Appeal Court ofRome. In the hearing of September 22, 2010 the proceeding hasbeen postponed to October 9, 2013 for the review of the findings.

**CEPAV Due:** with regard to the project for theconstruction of a high-speed railway from Milan to Verona, inDecember 2004, CEPAV Due presented the final project, prepared inaccordance with Law No. 443/2001 on the basis of the preliminaryproject approved by an Italian governmental Authority (CIPE). Asconcerns the arbitration procedure, commenced on December 28,2000, requested by CEPAV Due against TAV for the recognition ofcosts incurred by the Consortium in the ten-year period from 1991through 2000 plus damages suffered, in January 2007, theArbitration Committee determined the Consortium’s right torecover the costs incurred in connection with the designactivities performed. The technical independent survey to assessthe amount of compensation was submitted on October 19, 2009. Thetrial ended on February 23, 2010, with the resolution of thearbitration that required TAV to pay to CEPAV Due Consortium anamount of euro 44,176,787 plus legal interest and compensationfor inflation accrued from the submission of the arbitrationuntil the date of effective damage payment; the Court alsorequired TAV to pay euro 1,115,000 plus interest and compensationfor inflation accrued from October 30, 2000, until the date ofeffective damage payment. TAV filed with the Second InstanceCourt of Rome an appeal against the partial arbitrationcommittee’s determination of January 2007. The hearing forthe examination of the pleadings has been scheduled initially forJanuary 28, 2011, and subsequently postponed since thenegotiations for the settlement of the proceeding are ongoing. InFebruary 2007, the Consortium CEPAV Due notified to TAV a secondrequest of arbitration following the Law Decree No. 7 of December31, 2007, that revoked the concessions awarded to TAV resultingin the annulment of arrangements signed between TAV and theConsortium to build the high-speed railway section from Milan toVerona. The European Court of Justice was requested to rule onthis matter. Subsequently, Law No. 133/2008 established again theconcessions awarded to TAV resulting in the continuation of thearrangements between the CEPAV Due Consortium and a new entity incharge of managing the Italian railway system. The secondarbitration proceeding continued in order to determinate thedamages suffered by the Consortium even in the period prior tothe revocation of the concession. The arbitration proceeding wassuspended, since the negotiations between the parties in order tosign the integration to the existing agreement and to settle thearbitration already closed and the pending one are underway. Thedeadline for the submission of the arbitration determination wasfor December 31, 2010. On March 7, 2011, RFI proposed to CEPAVDue an agreement in order to settle all the existing claimsbetween the parts. On March 15, 2011, CEPAV Due adhered to theagreement. On August 2011, RFI finalized the agreement with thepayment of the requested amount. On November 16, 2011, thearbitration committee declared the termination of thearbitration; and on January 20, 2012, the counterparts renouncedto all claims before the Appeal Court of Rome.

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**(ii) Fos Cavaou.**An arbitration proceeding before theInternational Chamber of Commerce of Paris between the clientcompany Société du Terminal Methanier Fos Cavaou(“STMFC”) and the contractor STS, a French consortiumparticipated by Saipem SA (50%), Technimont SpA (49%) andSofregaz SA (1%) is pending. On July 11, 2011 the counterpartstried to define a settlement agreement under the provisions ofthe Regulations of Conciliation and Arbitration of theInternaltional Chamber of Commerce of Paris. The settlementprocedure was concluded unsuccessfully on December 31, 2011because STMFC refused the postponement of the deadline. OnJanuary 24, 2012 STS was notified by the secretariat of theInternational Arbitration Court of the International Chamber ofCommerce the commencement of an arbitration procedure issued bySTMFC. The memorandum filed by STMFC supporting the arbitrationproceeding claimed the payment of euro 264 million for damagepayment, delay penalties and costs incurred for the terminationof the works. Approximately euro 142 million of the total amountrequested related to loss of profit, which is an item that cannotbe compensated based on the existing contractual provisions withthe exception of fraudulent and serious culpable behavior. Theexistence of fraudulent and serious culpable behaviors performedby STS that could exclude the contractual limitation ofresponsibility could be probably considered without factual andlegal basis. STS is preparing its defensive memorandum, includinga counter claim for a total amount of approximately euro 150million as damage repayment due to the excessive interference ofSTMFC in the execution of the works and payment of extra worksnot recognized by the client.

 

**3. Antitrust, EU Proceedings, Actionsof the Authority for Electricity and Gas and of Other RegulatoryAuthorities****3.1 Antitrust**

**Eni SpA(i) Abuse of dominant position of Snam alleged by the ItalianAntitrust Authority.** In March 1999, the Italian AntitrustAuthority concluded its investigation started in 1997 and: (i)found that Snam SpA (merged in Eni SpA in 2002) abused itsdominant position in the market for the transportation andprimary distribution of natural gas relating to thetransportation and distribution tariffs applied to third partiesand the access of third parties to infrastructure; (ii) finedSnam for euro 2 million; and (iii) ordered a review of thepractices relating to such abuses. Snam believes it has compliedwith existing legislation and appealed the decision with theRegional Administrative Court of Lazio requesting its suspension.On May 26, 1999, stating that these decisions are against Law No.9/1991 and the European Directive 98/30/EC, this Court grantedthe suspension of the decision. The Authority did not appeal thisdecision. The decision on the merit of this dispute is stillpending before the same Administrative Court.

**(ii) European Commission’s investigations on playersactive in the natural gas sector.** In 2011 Eni divested itsinterests in the international gas transport pipelines andcarriers on the routes from Northern Europe and Russia. Thetransaction was part of the commitments agreed upon with theEuropean Commission with a view to settle an ongoing antitrustproceeding about the alleged unjustified refusal on part of Enito grant access to the above mentioned infrastructures to thirdparties, connected with the Italian gas transport system. Theexecution of the commitments, which related to the divestment ofEni’s interests in the entities owning the TENP (Germany),Transitgas (Switzerland) and TAG (Austria) pipelines, the lattersold to an entity controlled by the Italian State due itsstrategic relevance, permitted to Eni to settle the abovementioned antitrust proceeding without the ascertainment of anyillicit behavior and consequently without sanctions.

**(iii) Inquiry in relation to gas transportation.**InMarch 2012, the Italian Antitrust Authority started an inquirytargeting alleged anti competitive behavior charged to Eni inconnection with the refusal to dispose of secondary transportcapacity on the Transitgas and TAG pipelines to third parties.The inquiry is expected to be concluded by March 15, 2013.

**(iv) Inquiry in relation to unfair marketing practicesin the retail gas & power sector.**In February 2012,the Italian Antitrust Authority informed Eni of the start of aninquiry targeting alleged violation – in the period October2008-January 2012 – of the legislation on the unfairmarketing practices against 80 consumers, in relation to theactivation of gas and electricity supply contracts. Thepreliminary investigation should be finalized within 150 days.

**Eni SpA, Polimeri Europa SpA and Syndial SpA(v) Inquiries in relation to alleged anti-competitive agreementsin the area of elastomers – Prosecuting Body: EuropeanCommission.**In December 2002, inquiries were commencedconcerning alleged anti-competitive agreements in the field ofelastomers. The most important inquiry referred to BR and ESBRelastomers and was finalized on November 29, 2006, when theCommission fined Eni and its subsidiary Polimeri Europa for anamount 

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of euro 272.25 million. Eni and its subsidiary filed claimsagainst this decision before the European Court of First Instancein February 2007. The hearings took place in October 2009. InJuly 13, 2011, the First Instance Court filed the decision toreduce the above mentioned fine to the amount of euro 181.5million. The companies involved in the decision and the EuropeanCommission filed a claim before the European Court of Justice. Inconsideration of the above mentioned decision of the EuropeanCommission and pending the outcome, Polimeri Europa presented abank guarantee for euro 200 million and paid the residual amountof the fine. In August 2007, with respect to the above mentioneddecision of the European Commission, Eni submitted a request fora negative ascertainment with the Court of Milan aimed at provingthe non-existence of alleged damages suffered by tire BR/SBRmanufacturers. The Court of Milan declared the appealinadmissible appealing against a sentence of the Appeal Court ofMilan. The sentence for the appeal is still pending. Eni accrueda risk provision with respect to this proceeding. Pending theoutcome, a risk provision was accrued.

 

**3.2 Regulation**

**(i) Distribuidora de Gas Cuyana SA. Formal investigation ofthe agency entrusted with the regulations for the natural gasmarket in Argentina.** Enargas started a formal investigationon some operators, among them Distribuidora de Gas Cuyana SA, acompany controlled by Eni. Enargas stated that the companyimproperly applied conversion factors to volumes of natural gasinvoiced to customers and requested the company to apply theconversion factors imposed by local regulations from the date ofthe default notification (March 31, 2004) without prejudice toany damage payment and fines that may be decided after closingthe investigation. In April 2004 the company filed a defensivememorandum. On April 28, 2006, the company formally requested theacquisition of documents from Enargas in order to have access tothe documents on which the allegations are based.

**(ii) Preliminary investigation of the Authority forElectricity and Gas on the billing of the tariff balance to finalgas clients and periodicity of the billing.**On July 26, 2011the Authority for Electricity and Gas (Resolution VIS 75/11)sentenced the termination of an investigation against Eni(commenced under the provisions of Resolution VIS 36/10 of May25, 2010) imposing a fine amounting to euro 722,000. Eni paid thesanction and filed a claim before the Regional AdministrativeCourt against the sentence in order to defense its rights andinterests.

 

**4. Court inquiries**

**(i) EniPower SpA.**In June 2004, the Milan PublicProsecutor commenced inquiries into contracts awarded byEni’s subsidiary EniPower and on supplies from othercompanies to EniPower. These inquiries were widely covered by themedia. It emerged that illicit payments were made by EniPowersuppliers to a manager of EniPower who was immediately dismissed.The Court presented EniPower (commissioning entity) andSnamprogetti (now Saipem SpA) (contractor of engineering andprocurement services) with notices of process in accordance withexisting laws regulating the administrative responsibility ofcompanies (Legislative Decree No. 231/2001). In its meeting ofAugust 10, 2004, Eni’s Board of Directors examined theaforementioned situation and Eni’s CEO approved the creationof a task force in charge of verifying the compliance with Groupprocedures regarding the terms and conditions for the signing ofsupply contracts by EniPower and Snamprogetti and the subsequentexecution of works. The Board also advised divisions anddepartments of Eni to cooperate fully in every respect with theCourt. From the inquiries performed, no default in theorganization emerged, nor deficiency in internal control systems.External experts have performed inquiries with regard to certainspecific aspects. In accordance with its transparency andfirmness guidelines, Eni took the necessary steps in acting asplaintiff in the expected legal action in order to recover anydamage that could have been caused to Eni by the illicit behaviorof its suppliers and of their and Eni employees. In the meantime,preliminary investigations have found that both EniPower andSnamprogetti are not to be considered defendants in accordancewith existing laws regulating the administrative responsibilityof companies (Legislative Decree No. 231/2001). In August 2007,Eni was notified that the Public Prosecutor requested thedismissal of EniPower SpA and Snamprogetti SpA, while theproceeding continues against former employees of these companiesand employees and managers of the suppliers under the provisionsof Legislative Decree No. 231/2001. Eni SpA, EniPower andSnamprogetti presented themselves as plaintiffs in thepreliminary hearing. In the preliminary hearing related to themain proceeding on April 27, 2009, the Judge for the PreliminaryHearings requested all the parties that have not requested theplea-bargain to stand in trial, excluding certain defendants as aresult of the statute of limitations. During the hearing on March2, 2010, the Court confirmed the admission as plaintiffs of EniSpA, EniPower SpA and Saipem SpA against the inquired parts underthe provisions of Legislative Decree No. 231/2001. Furtheremployees of the companies involved were identified as defendantsto account for their civil responsibility. After the filing ofthe pleadings occurred in the hearing of July 12, 2011, theproceeding was postponed to September 20, 2011. In that date theCourt of Milan concluded that nine persons were guilty for theabove mentioned crimes. In addition they were condemned jointlyand severally to the payment of all 

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damages to be assessed through a dedicated proceeding and tothe reimbursement of the proceeding expenses incurred by theplaintiffs. The Court also resolved to dismiss all the criminalindictments for 7 employees, representing some companies involvedas a result of the statute of limitations while the trial endedwith an acquittal for 15 individuals. In relation to thecompanies involved in the proceeding, the Court found that 7companies are liable based on the provisions of LegislativeDecree No. 231/2001, imposing a fine and the disgorgement ofprofit. Eni SpA and its subsidiaries, EniPower and Saipem whichtook over Snamprogetti, acted as plaintiffs in the proceedingalso against the mentioned companies. The Court rejected theposition as plaintiffs of the Eni group companies, reversing aprior decision made by the Court. This decision was made probablyon the basis of a pronouncement made by a supreme court whichstated the illegitimacy of the constitution as plaintiffs made byany legal entity which is indicted under the provisions ofLegislative Decree No. 231/2001. The Court filed the ground ofthe judgment in December 19, 2011.

**(ii) Trading.** An investigation is pending regarding twoformer Eni managers who were allegedly bribed by third parties infavor to the closing of certain transactions with two oil producttrading companies. Within such investigation, on March 10, 2005,the Public Prosecutor of Rome notified Eni of two judicialmeasures for the seizure of documentation concerning Eni’stransactions with the said companies. Eni is acting as plaintiffin this proceeding. The Judge for the Preliminary Hearingsrejected most of the dismissal requests issued by the PublicProsecutor. Basing on the decision of the Judge for thePreliminary Hearings, 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 hearing, scheduledfor January 27, 2010, was postponed to March 30, 2010. In thehearing of March 30, 2010, Eni was admitted as plaintiff againstall the defendants. Subsequently the legal defense of one of theformer managers opted for the "non-conditioned"plea-bargain. The Judge removed this position from the mainproceeding postponing the related hearing to the same date of theprincipal one. In the hearing of June 23, 2010 related to theposition of a former manager of Eni, the Public Prosecutor, madea request of acquittal coherently with the previous request ofdismissal of that defendant. Eni legal defense asked theconviction of the defendant. After the debate, in the hearing ofJuly 13, 2010, the Court acquitted that defendant. The Courtwould file the grounds of the judgment within the next 90 days.After definition of the preliminary investigation requests, theproceeding was postponed few times. In the hearing of December 7,2011 the review of the witnesses took place. Subsequently, thenext hearing has been scheduled for October 19, 2012 in order todiscuss about the statute of limitations.

**(iii) TSKJ Consortium. Investigations by US, 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 US 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.:***in2010, a global transaction to settle the proceeding was definedwith the U.S. Authorities investigating the matter (the U.S. DoJand the U.S. SEC) following long and complex discussions whichcommenced in 2009. Particularly, on July 2010, SnamprogettiNetherlands BV signed a deferred prosecution agreement with theDoJ whereby the Department filed a deed which could lead to acriminal proceeding against Snamprogetti Netherlands BV forhaving violated certain rules of the FCPA if certain proceduresare not met. Also the parties agreed upon a fine amounting to$240 million was accrued in a risk provision in the 2009consolidated financial statements. Eni and Saipem assumed therole of guaranteeing the effective fulfillment of the obligationsagreed upon by Snamprogetti Netherlands BV with the U.S.Department of Justice, considering the contractual obligationsassumed by Eni to indemnify Saipem as part of the divestment ofSnamprogetti. If Snamprogetti Netherlands BV fulfills theobligations set by the agreement, the Department will refrainfrom continuing the criminal proceeding once a two-year frame haselapsed (which can be increased up to three years). The relevantcash settlement occurred in July 2010. In addition SnamprogettiNetherlands BV and the parent company Eni being an entity listedon the NYSE reached an agreement with the U.S. SEC whereby thetwo companies agreed to be subpoenaed and be judged havingallegedly violated certain rules of the Security and Exchange Actof 1934 without pleading guilty. They both agreed to pay jointlyand severally an amount of $125 million to the SEC in relation tothe disgorgement of profit. The relevant cash settlement occurredin July as Eni actually paid the amount considering thecontractual obligations assumed by Eni to indemnify Saipem aspart of the divestment of Snamprogetti.

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***The proceedings in Italy:*** beginning in 2004, theTSKJ 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 period since 1994 andalso concern the period of time subsequent to the June 8, 2001,enactment of Italian Legislative Decree No. 231 concerning theliability of legal entities. An adverse conclusion of theinvestigations cannot be excluded which may have a significantimpact on the Company’s result. Under present conditions,due to the complexity of the legal and factual analyses –including questions concerning jurisdiction and the applicationof statutes of limitations – it is not possible at this timeto reasonably quantify the potential losses that may arise fromthese proceedings, in case any negative developments occur. 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 Corporation and its subsidiaries.The events referred to the request of precautionary measures ofthe Public Prosecutor of Milan cover TSKJ Consortium practicesduring the 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. At the time of the events under investigation, theCompany had adopted a code of practice and internal procedureswith reference to the best practices at the time. Subsequently,such code and internal procedures have been improved aiming atthe continuous improvement of internal controls. Furthermore, onMarch 14, 2008, Eni approved a new Code of Ethics and a new Model231 reaffirming that the belief that one is acting in favor or tothe advantage of Eni can never, in any way, justify – noteven in part – any behaviors that conflict with theprinciples and contents of the Code. On November 17, 2009 theJudge for the Preliminary Investigations rejected the request ofprecautionary measures of disqualification filed by the PublicProsecutor of Milan against Eni and Saipem. The Public Prosecutorof Milan appealed the above mentioned decision before the ThirdInstance Court. The Court decided that the request ofprecautionary measures be admissible according to LegislativeDecree No. 231/2001 even in the case of international corruption.The issue would be subsequently examined by the Re-examinationCourt of Milan. On February 18, 2011, the Public Prosecutor ofMilan, with respect to the guarantee payment amounting to euro24,530,580, even in the interest of Saipem SpA, renounced tocontest the decision of rejection of precautionary measures ofdisqualification for Eni SpA and Saipem SpA issued by the Judgefor the Preliminary Hearings. In the hearing of February 22,2011, 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. The subsequent hearingswere dedicated to the exposition of the motivations ofcounterparts and in the hearing of January 26, 2011, the PublicProsecutor requested five former workers of Snamprogetti SpA (nowSaipem) and Saipem SpA (as legal entity incorporatingSnamprogetti) to stand trial. The first hearing before the Courtof Milan took place on May 10, 2011. In the hearing of February2, 2012, the Public Prosecutor, even if considering that the termfor the occurrence of the statute of limitations for theindividuals who are acting as plaintiffs, raised an issue ofconstitutional legitimacy for the incompatibility between theinternal and international legislation on the statute oflimitation, in particular the OECD convention on the fightagainst international corruption. In the subsequent hearing ofMarch 8, 2012 the defenses replicated to the Prosecutor issue onthe constitutional legitimacy of the so-called “short-termstatute of limitations” in relation to internationalcorruption. The hearing on the constitutional legitimacy has beenpostponed to April 5, 2012. It must be noted that the Board ofDirectors of Eni and Saipem in 2009 and 2010, respectivelyapproved new guidelines and anti-corruption policies regulatingEni and Saipem management of the business. The guidelinesintegrated anti-corruption policies of the Company, aligning themto the international best practices, optimizing the compliancesystem and granting the highest respect of Eni, Saipem and theirworkers of the Code of Ethics, 231 Model and national andinternational anti-corruption policies.

**(iv) Gas metering.**On May 28, 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 Courts 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

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Legislative Decree of June 8, 2001, No. 231, which establishesthe liability of the legal entity for crimes committed by itsemployee in the interests of such legal entity, or to itsadvantage. Accordingly, notice of the commencement ofinvestigations was served upon Eni Group companies (Eni, SnamRete Gas and Italgas) as well as third party companies. OnNovember 26, 2009, a notice of conclusion of the preliminaryinvestigation was served to Eni’s Group companies whereby 12Eni employees, also including former employees, are underinvestigation.

The exceptions filed in the notice include: (i) violationspertaining to recognition and payment of the excise on naturalgas amounting to euro 20.2 billion; (ii) violations or failure insubmitting the annual statement of gas consumption and/or in theannual declarations to be filed with the Duty Authority or theAuthority for Electricity and Gas; and (iii) a related obstaclewhich has been allegedly posed to the monitoring functionsperformed by the Authority for Electricity and Gas. On February22, 2011, 12 Eni employees, also including former employees werenotified the schedule of the preliminary hearing.

In relation to a modification in the relevant legislation thePublic Prosecutor requested to dismiss the proceeding for twoSnam Rete Gas employees in connection with the crime of usingfaked instruments of gas measurement in the commercial practicerelating the measurement activities at the station of Mazara delVallo.

| In the hearing of July 12, 2011 were        examined indictment and defense witnesses, while the        Judge for the Preliminary Hearing postponed the hearing        for eventual objections of the Public Prosecutor to        October 5, 2011. In this hearing the Judge for the        Preliminary Hearing considering the memoranda filed by        the parties sentenced: |
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| • |   | to dismiss the position of a        manager of the Eni G&P Division for all the alleged        crimes relating the obstacle to the monitoring functions        performed by the Authority for Electricity and Gas for        years 2006, 2007, 2008 because the indictment was        groundless;                                                                                                                                                                                           |
|--------|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| • |   | to dismiss the position of a        GreenStream BV employee for all the alleged crimes        relating the violations pertaining to lack of formal        declaration and recognition or payment of excise duties        on hydrocarbons as well as the obstacle to the monitoring        functions performed by the Authority for Electricity and        Gas because when the alleged crimes occurred the        mentioned employee was not the legal representative of        GreenStream BV; |
| • |   | to dismiss the position of a        Snam Rete Gas employee in relation to the crime relating        the obstacle to the monitoring functions performed by the        Authority for Electricity and Gas to the extent that a        violation for omitted communication to Authority for        Electricity and Gas would have allegedly occurred,        because the indictment was groundless.                                                                                                 |

In the hearing of November 4, 2011 the defendants filed theirobjections to the motions of the Public Prosecutor. In thesubsequent hearing of January 24, 2012 the Judge resolved todismiss the proceeding against all defendants as well as torelease seizure of the measurement instruments. The decisioncould be appealed by the Public Prosecutor. On March 7, 2012, theexternal lawyers defending the company, were notified an appealto the Third Instance Court filed by the Public Prosecutor ofMilan. The act did not involve all the dismissed defendants, butonly some positions. The schedule of the hearing before the ThirdInstance Court is still pending.

On February 23, 2010, Eni, Snam Rete Gas and Italgas receiveda notification requesting the collection of documents related toprocedures of constitution, definition, update and implementationof Model 231 in the period from 2003 to 2008. On May 18, 2010,the Public Prosecutor of Milan requested the closing of theproceeding relating to a number of defendants, including a topmanager for which the Public Prosecutor found no evidencesupporting the indictment in an eventual proceeding. The requesthas been preceded by an act of removal of the archived judicialposition from the main proceeding. On January 24, 2012 the Judgefor Preliminary Hearings decided to archive the above mentionedpositions. As a result of a further dismissal of judicialposition from the main proceeding, the Public Prosecutor of Milannotified to nine employees and former employees of Eni (inparticular belonging to the Gas & Power Division) theconclusion of the investigation related to the crime under theprovisions of Article 40 (violations pertaining to recognitionand payment of the excise on mineral oils) of Legislative DecreeNo. 504 of October 26, 1995. The deed also disputed certainviolations pertaining to subtraction of taxable amounts andmissed payments of excise taxes on natural gas amounting to euro0.47 billion and euro 1.3 billion, respectively. The DutyAuthority of Milan, responsible for the collection of dodgedtaxes, considering the documentation filed by Eni, reduced theamount initially claimed by the Public Prosecutor to euro 114million of dodged taxes. The Duty Authority also stated that itwould reassess that amount considering further evidence arisingfrom the criminal proceeding. The Company was not notified thedecision because the Judicial Authority has cleared thepossibility that the Company may be liable in accordance withLegislative Decree 231 of 2001.

In the subsequent hearing of October 28, the defendants, inorder to analyze fully the various aspect of the criminalproceeding, asked a consistent postponement of the PreliminaryHearing, in order to evaluate the conclusion of the round tablebetween the Duty Agency, AEEG and ANIGAS which have beenassessing the technical aspects of the matter. After the reviewof the positions of the Public Prosecutor and the defendants, theJudge for the Preliminary Hearings postponed the hearing to May7, 2012 and decided as probative integration to 

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hear the Director of the Procedure and Control Excise Sectorof the Regional Duty Direction of the Lombardia Region.

**(v) Agip KCO NV.**In November 2007, the PublicProsecutor of Kazakhstan informed Agip KCO of the start of aninquiry for an alleged fraud in the award of a contract to theOverseas International Constructors GmbH in 2005. On April 2010,the above mentioned body has proposed an agreement on the matter.On March 4, 2011, the Finance Police of Kazakhstan communicatedto Agip KCO the decision to dismiss the matter.

**(vi) Kazakhstan.**On October 1, 2009, the PublicProsecutor of Milan requested a number of documents pursuant toArticle 248 of the Italian Penal Code. Through this decision,part of a criminal proceeding against unknown parties, Eni SpAwas requested to transmit – in relation to the allegedinternational corruption, embezzling pillage, and other crimes– audit reports and other documentation related to anomaliesand critical issues on the management of the Karachaganak plantand the Kashagan project. The crime of “internationalcorruption” mentioned in the said request of transmission ofdocuments is sanctioned, in addition to the Italian criminalcode, by Legislative Decree June 8, 2001, No. 231, whichestablishes the administrative responsibility of companies forcrimes committed by their employees on their behalf. Enicommenced the collection of the documentation in order to rapidlyfulfill the requests of the Public Prosecutor. The Company hasdeposited in different phases the documents collected. TheCompany continues to fully collaborate with the Public Prosecutorproviding also further documentation when available. On November29, 2010, the Tributary Police of Milan requested to interviewcertain Eni managers in the field of the evolution on themanagement of contract assigned to Agip KCO to NCC and OICconsortia. Subsequently the Tributary Police convened twomanagers in order to interview them about the investigationcommenced by the Public Prosecutor of Milan.

**(vii) Algeria.** On February 4, 2011, Eni received by thePublic Prosecutor of Milan a notification requesting thecollection of documents pursuant to Article 248 of the ItalianPenal Code. Through this decision, in relation to the crime ofalleged international corruption, Eni SpA was requested totransmit: (i) the Saipem/Sonatrach contract signed on June 2009related to the realization of the GK3 gas pipeline; (ii) theGALSI/Saipem/Technip contract signed in July 2009 related to theengineering of the ground section of the gas pipeline. Thenotification has been forwarded to Saipem SpA since this matteris in its area of responsibility. The crime of internationalcorruption regards, interalia, the offense contemplated byLegislative Decree of June 8, 2001, No. 231. Eni commenced thecollection of the documentation in order to rapidly fulfill therequests of the Public Prosecutor, and on February 16, 2011 theCompany has deposited the documents collected. In addition, evenif there was not a formal request of the Public Prosecutor theCompany has filed the documentation related to the MLE project(participated by the Company’s E&P division), for whichinvestigations in Algeria are ongoing. Eni and Saipem continue tofully collaborate with the Public Prosecutor. Saipem has notreceived any further request on the case.

**(viii) Libya.**On June 10, 2011 Eni received by the USSEC a formal judicial request of collection and presentation ofdocuments (subpoena) related to Eni’ s activity in Libyafrom 2008 to 2011. The subpoena is related to an ongoinginvestigation without further clarifications nor specific allegedviolations in connection to "certain illicit payments toLibyan officials" possibly violating the US ForeignCorruption Practice Act. At the end of December 2011, Enireceived a request for the collection of further documentationaiming at integrating the subpoena previously received. Eni isfully collaborating with the US SEC.

**(ix) Iraq.**On June 21, 2011, Eni Zubair SpA and SaipemSpA in Fano (Italy) were notified that a search warrant had beenissued to search the offices and homes of certain employees ofthe Group and of certain third parties as a result of allegedillicit behavior in respect of awarding contracts in Iraq, whereEni group companies are involved as commissioning bodies. Inparticular the homes and offices of an employee of Eni Zubair anda manager of Saipem were searched by the authorities. Theaccusation is of criminal conspiracy and corruption in relationwith the activity of Eni Zubair in Iraq and of Saipem in the“Jurassic” project in Kuwait. The Public Prosecutor ofMilan has associated Eni Zubair, Eni and Saipem with theaccusations as a result of the alleged illicit actions of theiremployees, who have also been described as non-loyal employees ofEni Group. The Eni Zubair employee resigned and the Company,accepting the resignation, reserved the right to take actionagainst the individual to defend its interests and subsequentlycommenced a legal action against the other persons mentioned inthe seizure act. Notwithstanding that the Eni Group companies areassociated with these accusations, Eni SpA and Saipem SpA alsoreceived, at the same time the search warrant was issued, anotification pursuant to the Legislative Decree No. 231/2001.While the minuting of the seizure, Eni SpA asserted the Companyhad no involvement as all activities in Iraq are carried out byits subsidiary Eni Zubair. The Company also asserted that EniZubair and Eni SpA had no involvement with the alleged illicitactivities subject to the prosecutor’s accusations. Eni SpAwas notified by the Public Prosecutor a request of extension ofthe preliminary investigations that has led up to the involvementof another employee as well as other suppliers in the proceeding.Eni commissioned an external consulting firm to perform an auditthat will be integrated by further evidence that is in theprocess of being acquired. 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 support

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of an external consultant. The internal review did not findany evidence of problematic elements, nor aspects which might beof any importance form a criminal standpoint in connection withthe interested Saipem employee, nor irregularities of any kind;thus Saipem employee involved in the proceeding, that wasprudently suspended by his function in the meanwhile, wasreadmitted in the company albeit in a different function. ThePublic Prosecutor disposed the release of seizure of thedocumentation owned by the employee in relation to thisproceeding. On March 2, 2012, Saipem SpA was notified by thePublic Prosecutor a request of extension of the preliminaryinvestigation.

 

**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 haveomitted payment of a municipal tax on real estate for the periodfrom 1993 to 1998 on four oil platforms located in the AdriaticSea which constitute municipal waters. Eni was requested to pay atotal of approximately euro 17 million including interest and afine. Eni filed a counterclaim stating that the sea where theplatforms are located is not part of the municipal territory andthe tax application as requested by the Municipality lackedobjective fundamentals. The claim has been accepted in the firsttwo degrees 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 24 millionincluding interest and penalties. Eni filed a claim against thisclaim which was accepted by the First Degree Judge with adecision of December 4, 2007. Similar formal assessments relatedto Eni oil and gas offshore platforms were presented by theMunicipalities of Falconara Marittima, Tortoreto, Pedaso, andalso from 2009 the Gela Municipality. The total amounts of thoseclaims were approximately euro 7.5 million. The Company filedappeal against all those claims.

 

**OUTSIDE ITALY(i) Karachaganak.** On December 14, 2011, the Internationalcompanies operating the Karachaganak field (Eni co-operator,32.5%) and the Republic of Kazakhstan signed a binding agreementfor the settlement of a contractual claim as well as a certaintax disputes. The transaction is expected to be completed by June2012 on satisfaction of conditions precedent. In particular, theKazakh 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. In consideration of the above mentioned taxclaims and of the terms of the agreement Eni incurred certaincharges and accrued a risk provision for overall amount of $32million. For further information about the agreement see sectionOperating review – Exploration & Production –Country updates, in the Operating and Financial Review.

**(ii) 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.

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**6. Settled proceedings**

The proceedings settled in 2011, mentioned in the AnnualReport 2010 (Note 34), are the following:

***1. Environment(i) Subsidence;(ii) Alleged damage – Prosecuting body: Public Prosecutor ofGela;(iii) Alleged negligent fire in the refinery of Gela.*******These proceedings were settled without consequences for Eni.

***2. Other judicial or arbitration proceedings**********Syndial SpA (former EniChem SpA)(i) Serfactoring: disposal of receivables.***On July 29,2011, Eni’s subsidiaries and the plaintiff Agrifactoringagreed upon a global transaction to settle all outstandingmatters and claims whereby Eni’s subsidiaries paid toAgrifactoring a cash compensation amounting to euro 65 million.This sum has been already accrued in Eni’s consolidatedfinancial statements to the risk provision.

***5. Tax ProceedingsItaly**********Eni SpA and Eni Adfin SpA(ii) Assessments for Padana Assicurazioni tax returns.***In2011 the Company defined all pending claims with the Italian TaxAuthorities regarding the tax returns for years 2005, 2006 and2007 filed by Padana Assicurazioni SpA, a Group subsidiary thatwas subsequently divested. The Tax Authorities have deniedcertain cost deductions and assessed a greater value for abusiness combination involving the Group subsidiary Eni InsuranceLtd in 2007. All claims have been settled by paying the globalamount of euro 46.7 million utilizing a risk provision accrued in2010.

**Assets under concession arrangements**Eni operates under concession arrangements mainly in theExploration & Production segment and in some activities ofthe Gas & Power segment and the Refining & Marketingsegment. In the Exploration & Production segment contractualclauses governing mineral concessions, licenses and explorationpermits regulate the access of Eni to hydrocarbon reserves. Suchclauses can differ in each Country. In particular, mineralconcessions, licenses and permits are granted by the legal ownersand, generally, entered into with government entities, State oilcompanies and, in some legal contexts, private owners. As acompensation for mineral concessions, Eni pays royalties andtaxes in accordance with local tax legislation. Eni sustains allthe operation risks and costs related to the exploration anddevelopment activities and it is entitled to the productionsrealized. In Production Sharing Agreement and in buy-backcontracts, realized productions are defined on the basis ofcontractual agreements drawn up with State oil companies whichhold the concessions. Such contractual agreements regulate therecovery of costs incurred for the exploration, development andoperating activities (Cost Oil) and give entitlement to the ownportion of the realized productions (Profit Oil). With referenceto natural gas storage in Italy, the activity is conducted on thebasis of concessions with an original duration that does notexceed twenty years and it is granted by the Ministry ofProductive Activities to persons that are consistent withlegislation requirements and that can demonstrate to be able toconduct a storage program that meets the public interest inaccordance with the Law. The operator is entitled to a maximum oftwo extensions of ten year each, if the storage programs areexecuted and all the obligations are fulfilled. In the Gas &Power segment the gas distribution activity is conducted on thebasis of concessions granted by local public entities. In 2011, aspecific Decree issued by the Italian Government established 177territorial basins representing the lowest levels of aggregationof municipalities. The new concessions will be granted based onthese new territorial basins. When an existing concessionexpires, the new operator who takes over the concession willaward the previous operator a compensation for the distributionnetwork based on an industrial assessment of the asset value.Tariffs for the distribution service are defined by the ItalianAuthority for Electricity and Gas. The Law provides thegrant of distribution service exclusively by tender, with amaximum length of 12 years. In the Refining & Marketingsegment several service stations and other auxiliary assets ofthe distribution service are located in the motorway areas andthey are 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.

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**Environmental regulations**Risks associated with the footprint of Eni’s activitieson 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; (iii) new developments in environmentalregulation; (iv) the effect of possible technological changesrelating to future remediation; and (v) the possibility oflitigation and the difficulty of determining Eni’sliability, if any, as against other potentially responsibleparties with respect to such litigation and the possibleinsurance recoveries.

**Emission trading**Legislative Decree No. 216 of April 4, 2006 implemented theEmission Trading Directive 2003/87/EC concerning greenhouse gasemissions and Directive 2004/101/EC concerning the use of carboncredits deriving from projects for the reduction of emissionsbased on the flexible mechanisms devised by the Kyoto Protocol.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 20/2008 definingemission permits for the 2008-2012 period. Eni was assignedpermits corresponding to 127.3 million tonnes of carbon dioxide(of which, 25.8 in 2008, 25.8 in 2009, 25.5 in 2010, 25.3 in2011, 24.9 in 2012) and in addition to approximately 3.8 millionof permits expected to be assigned with respect to new plants inthe five-year period 2008-2012. Emission quotas of new plantsinclude only those physically assigned and recorded in theemissions registry. Emissions of carbon dioxide from Eni’splants were lower than permits assigned in 2011. Againstemissions of carbon dioxide amounted to approximately 24.2millions tonnes, emission permits amounting to 26.4 milliontonnes were assigned, determining a 2.2 million tonnes surplus.In addition to such surplus, a 0.16 million tonnes of permits (asincrease in the availability of Eni) are to be included followingthe contract of Virtual Power Plan GDF Suez Energia Italia,primarily assigned to cover the emissions of the EniPower plants.For this reason, the total surplus amounted to about 2.3 milliontonnes.

**35 Revenues**

**Net sales from operations**

| (euro million) |   | **2009** |   | **2010** |   | **2011** |
|----------------|--------|----------|--------|----------|--------|----------|
|           |   |          |   |          |   |          |

| Net sales from operations                  |   | 83,519     |   |   | 98,864     |   |   | 109,147     |
|--------------------------------------------|--------|------------|--------|--------|------------|--------|--------|-------------|
| Change in        contract work in progress |   | (292       | )      |   | (341       | )      |   | 442         |
|                                       |   | **83,227** |   |   | **98,523** |   |   | **109,589** |
|                                       |   |            |        |   |            |        |   |             |

Net sales from operations were stated net of thefollowing items:

| (euro million) |   | **2009** |   | **2010** |   | **2011** |
|----------------|--------|----------|--------|----------|--------|----------|
|           |   |          |   |          |   |          |

| Excise taxes                                                                                |   | 12,122     |   | 11,785     |   | 11,863     |
|---------------------------------------------------------------------------------------------|--------|------------|--------|------------|--------|------------|
| Exchanges        of oil sales (excluding excise taxes)                                      |   | 1,680      |   | 1,868      |   | 2,470      |
| Services billed to joint venture partners                                                   |   | 2,435      |   | 2,996      |   | 3,375      |
| Sales to        service station managers for sales billed to holders of        credit cards |   | 1,531      |   | 2,150      |   | 1,810      |
| Exchanges of other products                                                                 |   | 55         |   | 79         |   | 9          |
|                                                                                        |   | **17,823** |   | **18,878** |   | **19,527** |
|                                                                                        |   |            |   |            |   |            |

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Net sales from operations of euro 109,147 million includedrevenues recognized in connection with contract works in theEngineering & Construction segment for euro 10,510 million(euro 8,349 million and euro 8,779 million in 2009 and 2010,respectively) and construction and development of thedistribution network related to assets under concessionagreements for euro 364 million (euro 357 million in 2010).

Net sales from operations by business segment and geographicarea of destination are disclosed under Note 41 –Information by industry segment and geographic financialinformation.

 

**Other income and revenues**

| (euro million) |   | **2009** |   | **2010** |   | **2011** |
|----------------|--------|----------|--------|----------|--------|----------|
|           |   |          |   |          |   |          |

| Gains from sale of assets                                                            |   | 306       |   | 266     |   | 114     |
|--------------------------------------------------------------------------------------|--------|-----------|--------|---------|--------|---------|
| Gains on        price adjustments under overlifting/underlifting        transactions |   | 148       |   | 50      |   | 99      |
| Lease and rental income                                                              |   | 100       |   | 84      |   | 97      |
| Compensation        for damages                                                      |   | 54        |   | 47      |   | 67      |
| Contract penalties and other trade revenues                                          |   | 31        |   | 52      |   | 28      |
| Other        proceeds (*)                                                            |   | 479       |   | 457     |   | 528     |
|                                                                                 |   | **1,118** |   | **956** |   | **933** |
|                                                                                 |   |           |   |         |   |         |

|     |     |                                                                        |
|--------------------|--------------------|---------------------------------------------------------------------------------------|
| (*)                |     | Each        individual amount included herein does not exceed euro 50        million. |

Gains from the sale of assets of euro 114 millionincluded euro 74 million to the Exploration & Productionsegment.

**36 Operating expenses**

**Purchase, services and other**

| (euro million) |   | **2009** |   | **2010** |   | **2011** |
|----------------|--------|----------|--------|----------|--------|----------|
|           |   |          |   |          |   |          |

| Production costs - raw, ancillary and consumable        materials and goods                        |   | 40,311     |   |   | 48,261     |   |   | 60,724     |   |
|----------------------------------------------------------------------------------------------------|--------|------------|--------|--------|------------|--------|--------|------------|--------|
| Production        costs - services                                                                 |   | 13,520     |   |   | 15,400     |   |   | 14,034     |   |
| Operating leases and other                                                                         |   | 2,567      |   |   | 3,066      |   |   | 3,113      |   |
| Net        provisions for contingencies                                                            |   | 1,055      |   |   | 1,407      |   |   | 551        |   |
| Other expenses                                                                                     |   | 1,527      |   |   | 1,309      |   |   | 1,214      |   |
|                                                                                               |   | **58,980** |   |   | **69,443** |   |   | **79,636** |   |
| less:                                                                                              |   |       |   |   |       |   |   |       |   |
| -        capitalized direct costs associated with self-constructed        assets - tangible assets |   | (576       | )      |   | (243       | )      |   | (375       | )      |
| - capitalized direct costs associated with        self-constructed assets - intangible assets      |   | (53        | )      |   | (65        | )      |   | (70        | )      |
|                                                                                               |   | **58,351** |   |   | **69,135** |   |   | **79,191** |   |
|                                                                                               |   |            |        |   |            |        |   |            |        |

Services included brokerage fees related to the Engineering& Construction segment for euro 12 million (euro 79 millionand euro 26 million in 2009 and 2010, respectively).

Costs incurred in connection with research and developmentactivity recognized in profit and loss amounted to euro 191million (euro 207 million and euro 221 million in 2009 and 2010,respectively) as they did not meet the requirements to berecognized as long-lived assets.

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The item "Operating leases and other" includedoperating leases for euro 1,305 million (euro 1,220 million andeuro 1,400 million in 2009 and 2010, respectively) and royaltieson the extraction of hydrocarbons for euro 1,295 million (euro641 million and euro 1,214 million in 2009 and 2010,respectively). Future minimum lease payments expected to be paidunder non-cancelable operating leases are provided below:

| (euro million) |   | **2009** |   | **2010** |   | **2011** |
|----------------|--------|----------|--------|----------|--------|----------|
|           |   |          |   |          |   |          |

| To be paid within 1 year     |   | 886       |   | 1,023     |   | 839       |
|------------------------------|--------|-----------|--------|-----------|--------|-----------|
| Between 2        and 5 years |   | 2,335     |   | 2,278     |   | 1,385     |
| Beyond 5 years               |   | 1,034     |   | 752       |   | 255       |
|                         |   | **4,255** |   | **4,053** |   | **2,479** |
|                         |   |           |   |           |   |           |

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. The decrease inthe expected future minimum lease payments amounting to euro1,574 million related to the exclusion from the scope ofconsolidation of Eni Gas Transport International SA and Eni GasTransport Deutschland SpA (euro 1,086 million) which weredivested.

New or increased risk provisions net of reversal of unusedprovisions amounting to euro 551 million (euro 1,055 million andeuro 1,407 million in 2009 and 2010, respectively) mainly relatedto expected environmental liabilities amounting to euro 184million (net provisions of euro 258 million and euro 1,352million in 2009 and 2010, respectively) and expected losses oncontract penalties and litigations of euro 160 million (netprovisions of euro 333 million in 2009 and net reversals of euro185 million in 2010). More information is provided under Note 27– Provisions for contingencies.

 

**Payroll and related costs**

| (euro million) |   | **2009** |   | **2010** |   | **2011** |
|----------------|--------|----------|--------|----------|--------|----------|
|           |   |          |   |          |   |          |

| Wages and salaries                                                                                   |   | 3,330     |   |   | 3,565     |   |   | 3,704     |   |
|------------------------------------------------------------------------------------------------------|--------|-----------|--------|--------|-----------|--------|--------|-----------|--------|
| Social        security contributions                                                                 |   | 706       |   |   | 714       |   |   | 760       |   |
| Cost related to employee benefit plans                                                               |   | 137       |   |   | 164       |   |   | 158       |   |
| Other        costs                                                                                   |   | 342       |   |   | 600       |   |   | 360       |   |
|                                                                                                 |   | **4,515** |   |   | **5,043** |   |   | **4,982** |   |
| less:                                                                                                |   |      |   |   |      |   |   |      |   |
| - capitalized direct costs associated with        self-constructed assets - tangible assets          |   | (280      | )      |   | (209      | )      |   | (185      | )      |
| -        capitalized direct costs associated with self-constructed        assets - intangible assets |   | (54       | )      |   | (49       | )      |   | (48       | )      |
|                                                                                                 |   | **4,181** |   |   | **4,785** |   |   | **4,749** |   |
|                                                                                                 |   |           |        |   |           |        |   |           |        |

Other costs of euro 360 million (euro 342 million and euro 600million in 2009 and 2010, respectively) comprised costs fordefined contribution plans of euro 113 million (euro 122 millionand euro 104 million in 2009 and 2010, respectively) andprovisions for redundancy incentives of euro 209 million (euro134 million and euro 423 million in 2009 and 2010, respectively).

Cost related to employee benefit plans are described in Note28 – Provisions for employee benefits.

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**Average number of employees**The Group average number and break-down of employees bycategory is reported below:

| (number) |   | **2009** |   | **2010** |   | **2011** |
|----------|--------|----------|--------|----------|--------|----------|
|     |   |          |   |          |   |          |

| Senior managers        |   | 1,653      |   | 1,569      |   | 1,580      |
|------------------------|--------|------------|--------|------------|--------|------------|
| Junior        managers |   | 13,255     |   | 13,122     |   | 13,324     |
| Employees              |   | 37,207     |   | 37,589     |   | 38,590     |
| Workers                |   | 26,533     |   | 26,550     |   | 25,819     |
|                   |   | **78,648** |   | **78,830** |   | **79,313** |
|                   |   |            |   |            |   |            |

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**

*Stock option*****In 2009 Eni terminated any stock-based incentive schemes.Information provided below is about the residual activity of paststock incentive schemes.

At December 31, 2011, 11,873,205 options were outstanding forthe purchase of 11,873,205 Eni ordinary shares (nominal valueeuro 1 each). The break-down of outstanding options was thefollowing:

|   |   | **Rights outstanding         as of Dec. 31, 2011**(number) |   | **Weighted-average strike price of the rights        outstanding as of Dec. 31, 2011******(euro) |
|--------|--------|------------------------------------------------------------|--------|--------------------------------------------------------------------------------------------------|
|   |   |                                                            |   |                                                                                                  |

| Stock option plan 2004        |   | 628,100        |   | 16.576 |
|-------------------------------|--------|----------------|--------|--------|
| Stock        option plan 2005 |   | 3,281,500      |   | 22.514 |
| Stock option plan 2006        |   | 2,201,950      |   | 23.121 |
| Stock        option plan 2007 |   | 1,876,980      |   | 27.451 |
| Stock option plan 2008        |   | 3,884,675      |   | 22.540 |
|                          |   | **11,873,205** |   |   |
|                          |   |                |   |        |

At December 31, 2011, the residual lives of the schemes were 7months for the 2004 plan, 1 year and 7 months for the 2005 plan,7 months for the 2006 plan, 1 year and 7 months for the 2007 planand 2 years and 7 months for the 2008 plan.

The 2006-2008 stock option schemes provided that options canbe exercised after three years from grant (vesting period). Thestrike price was calculated as the arithmetic average of officialprices recorded on the Italian exchange in the month prior togrant.

 

 

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The scheme evolution is provided below:

|   |   | **2009** |   | **2010** |   | **2011** |
|--------|--------|----------|--------|----------|--------|----------|
|   |   |          |   |          |   |          |

|   |   | **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**          |   | **23,557,425** |   |   | **23.540** |   | **16.556** |   | **19,482,330** |   |   | **23.576** |   | **17.811** |   | **15,737,120** |   |   | **23.005** |   | **16.398** |
|-------------------------------------------------|--------|----------------|--------|--------|------------|--------|------------|--------|----------------|--------|--------|------------|--------|------------|--------|----------------|--------|--------|------------|--------|------------|
| Rights        exercised in the period           |   | (2,000         | )      |   | 13.743     |   | 16.207     |   | (88,500        | )      |   | 14.941     |   | 16.048     |   | (208,900       | )      |   | 14.333     |   | 16.623     |
| Rights cancelled in the period                  |   | (4,073,095     | )      |   | 13.374     |   | 14.866     |   | (3,656,710     | )      |   | 26.242     |   | 16.918     |   | (3,655,015     | )      |   | 23.187     |   | 17.474     |
| **Rights        outstanding as of December 31** |   | **19,482,330** |   |   | **23.576** |   | **17.811** |   | **15,737,120** |   |   | **23.005** |   | **16.398** |   | **11,873,205** |   |   | **23.101** |   | **15.941** |
| **of which exercisable as of December 31**      |   | **7,298,155**  |   |   | **21.843** |   | **17.811** |   | **8,896,125**  |   |   | **23.362** |   | **16.398** |   | **11,863,335** |   |   | **23.101** |   | **15.941** |
|                                            |   |                |        |   |            |   |            |   |                |        |   |            |   |            |   |                |        |   |            |   |            |

|    |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |
|--------------|--------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| (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 years 2004and 2005 was euro 2.01 and euro 3.33 per share, respectively. For2006, 2007 and 2008 the average fair value weighted with thenumber of options granted was euro 2.89, euro 2.98 and euro 2.60per share, respectively.

The fair value was determined by applying the followingassumptions:

|   |   | **2004** |   | **2005** |   | **2006** |   | **2007** |   | **2008** |
|--------|--------|----------|--------|----------|--------|----------|--------|----------|--------|----------|
|   |   |          |   |          |   |          |   |          |   |          |

| Risk-free interest rate   | (%)     |   | 3.2  |   | 2.5  |   | 4.0  |   | 4.7  |   | 4.9  |
|---------------------------|---------|--------|------|--------|------|--------|------|--------|------|--------|------|
| Expected        life      | (years) |   | 8    |   | 8    |   | 6    |   | 6    |   | 6    |
| Expected volatility       | (%)     |   | 19.0 |   | 21.0 |   | 16.8 |   | 16.3 |   | 19.2 |
| Expected        dividends | (%)     |   | 4.5  |   | 4.0  |   | 5.3  |   | 4.9  |   | 6.1  |
|                      |    |   |      |   |      |   |      |   |      |   |      |

Costs of the year related to stock option plans amounted toeuro 3 million (euro 12 million in 2009 and 2010).

 

**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 35 million, euro 33 million and euro 34 million for 2009,2010 and 2011, respectively, and consisted of the following:

| (euro million) |   | **2009** |   | **2010** |   | **2011** |
|----------------|--------|----------|--------|----------|--------|----------|
|           |   |          |   |          |   |          |

| Wages and salaries                                |   | 20     |   | 20     |   | 21     |
|---------------------------------------------------|--------|--------|--------|--------|--------|--------|
| Post-employment        benefits                   |   | 1      |   | 1      |   | 1      |
| Other long-term benefits                          |   | 10     |   | 10     |   | 10     |
| Indemnities        upon termination of employment |   |   |   |   |   | 2      |
| Stock option                                      |   | 4      |   | 2      |   |   |
|                                              |   | **35** |   | **33** |   | **34** |
|                                              |   |        |   |        |   |        |

 

**Compensation of Directors and Statutory Auditors**Compensation of Directors amounted to euro 9.9 million, euro9.7 million and euro 8.4 million for 2009, 2010 and 2011,respectively. Compensation of Statutory Auditors amounted to euro0.475 million, euro 0.511 million and euro 0.513 million in 2009,2010 and 2011, respectively.

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Compensation included emoluments and other similar paymentsand social security compensations due for the positions asdirector or statutory auditor held at the Parent Company Eni SpAor other Group subsidiaries, which was recognized as cost to theGroup, even if not subjected to personal income tax.

 

**Other operating (expense) income**

| (euro million) |   | **2009** |   | **2010** |   | **2011** |
|----------------|--------|----------|--------|----------|--------|----------|
|           |   |          |   |          |   |          |

| Net gains (losses) on non-hedging derivatives              |   | 66     |   |   | 111     |   | 135     |   |
|------------------------------------------------------------|--------|--------|--------|--------|---------|--------|---------|--------|
| Net gains        (losses) on trading derivatives           |   |   |   |   | 7       |   | 53      |   |
| Net gains (losses) on cash flow hedging        derivatives |   | (11    | )      |   | 13      |   | (17     | )      |
|                                                       |   | **55** |   |   | **131** |   | **171** |   |
|                                                       |   |        |        |   |         |   |         |        |

Gains (losses) on non-hedging derivatives related to therecognition through profit of fair value valuation as well assettlement of those derivatives on commodities which were notdesignated as hedges under IFRS. Also included in the item werefair value gains or losses on certain derivatives embedded in thepricing formulas of long-term gas supply contracts in theExploration & Production segment (euro 4 million).

Gains or losses on fair value valuation or settlement relatedto certain trading derivatives entered into by the Gas &Power segment following the new risk management strategy designedto optimize margins.

Gains or losses on cash flow hedging derivatives related tothe ineffective portion of the hedging relationship which wasrecognized through profit and loss in the Gas & Powersegment.

 

**Depreciation, depletion, amortization and impairments**

| (euro million) |   | **2009** |   | **2010** |   | **2011** |
|----------------|--------|----------|--------|----------|--------|----------|
|           |   |          |   |          |   |          |

| Depreciation, depletion and amortization:                                                          |   |      |   |   |      |   |   |      |   |
|----------------------------------------------------------------------------------------------------|--------|-----------|--------|--------|-----------|--------|--------|-----------|--------|
| - tangible        assets                                                                           |   | 6,658     |   |   | 7,141     |   |   | 6,544     |   |
| - intangible assets                                                                                |   | 2,110     |   |   | 1,744     |   |   | 1,758     |   |
|                                                                                               |   | **8,768** |   |   | **8,885** |   |   | **8,302** |   |
| Impairments:                                                                                       |   |      |   |   |      |   |   |      |   |
| - tangible        assets                                                                           |   | 990       |   |   | 257       |   |   | 891       |   |
| - intangible assets                                                                                |   | 62        |   |   | 441       |   |   | 154       |   |
|                                                                                               |   | **1,052** |   |   | **698**   |   |   | **1,045** |   |
| less:                                                                                              |   |      |   |   |      |   |   |      |   |
| - reversal        of impairments - tangible assets                                                 |   | (1        | )      |   |      |   |   | (15       | )      |
| - reversal of impairments - intangible assets                                                      |   |      |   |   |      |   |   | (9        | )      |
| -        capitalized direct costs associated with self-constructed        assets - tangible assets |   | (4        | )      |   | (2        | )      |   | (3        | )      |
| - capitalized direct costs associated with        self-constructed assets - intangible assets      |   | (2        | )      |   | (2        | )      |   | (2        | )      |
|                                                                                               |   | **9,813** |   |   | **9,579** |   |   | **9,318** |   |
|                                                                                               |   |           |        |   |           |        |   |           |        |

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**37 Finance income (expense)**

| (euro million) |   | **2009** |   | **2010** |   | **2011** |
|----------------|--------|----------|--------|----------|--------|----------|
|           |   |          |   |          |   |          |

| **Finance income (expense)**     |   |     |   |   |     |   |   |       |   |
|----------------------------------|--------|----------|--------|--------|----------|--------|--------|------------|--------|
| Finance        income            |   | 5,950    |   |   | 6,117    |   |   | 6,379      |   |
| Finance expense                  |   | (6,497   | )      |   | (6,713   | )      |   | (7,396     | )      |
|                             |   | **(547** | **)**  |   | **(596** | **)**  |   | **(1,017** | **)**  |
| Derivative financial instruments |   | (4       | )      |   | (131     | )      |   | (112       | )      |
|                             |   | **(551** | **)**  |   | **(727** | **)**  |   | **(1,129** | **)**  |
|                             |   |          |        |   |          |        |   |            |        |

The break-down by lenders or type of net financegains or losses is provided below:

| (euro million) |   | **2009** |   | **2010** |   | **2011** |
|----------------|--------|----------|--------|----------|--------|----------|
|           |   |          |   |          |   |          |

| **Finance income (expense) related to net        borrowings**                                                   |   |     |   |   |     |   |   |       |   |
|-----------------------------------------------------------------------------------------------------------------|--------|----------|--------|--------|----------|--------|--------|------------|--------|
| Interest        and other finance expense on ordinary bonds                                                     |   | (423     | )      |   | (551     | )      |   | (610       | )      |
| Interest due to banks and other financial        institutions                                                   |   | (330     | )      |   | (215     | )      |   | (312       | )      |
| Interest        from banks                                                                                      |   | 33       |   |   | 18       |   |   | 22         |   |
| Interest and other income on financing        receivables and securities held for non-operating        purposes |   | 47       |   |   | 21       |   |   | 19         |   |
|                                                                                                            |   | **(673** | **)**  |   | **(727** | **)**  |   | **(881**   | **)**  |
| **Exchange differences**                                                                                        |   |     |   |   |     |   |   |       |   |
| Positive        exchange differences                                                                            |   | 5,572    |   |   | 5,897    |   |   | 6,191      |   |
| Negative exchange differences                                                                                   |   | (5,678   | )      |   | (5,805   | )      |   | (6,302     | )      |
|                                                                                                            |   | **(106** | **)**  |   | **92**   |   |   | **(111**   | **)**  |
| **Other finance income (expense)**                                                                              |   |     |   |   |     |   |   |       |   |
| Capitalized        finance expense                                                                              |   | 223      |   |   | 187      |   |   | 149        |   |
| Income from equity instruments                                                                                  |   | 163      |   |   |     |   |   |       |   |
| Interest        and other income on financing receivables and securities        held for operating purposes     |   | 39       |   |   | 73       |   |   | 75         |   |
| Interest on tax credits                                                                                         |   | 4        |   |   | 2        |   |   | 2          |   |
| Finance        expense due to passage of time (accretion discount) (a)                                          |   | (218     | )      |   | (251     | )      |   | (247       | )      |
| Other finance income                                                                                            |   | 21       |   |   | 28       |   |   | (4         | )      |
|                                                                                                            |   | **232**  |   |   | **39**   |   |   | **(25**    | **)**  |
|                                                                                                            |   | **(547** | **)**  |   | **(596** | **)**  |   | **(1,017** | **)**  |
|                                                                                                            |   |          |        |   |          |        |   |            |        |

|    |    |                                                                                                                                         |
|--------------|--------------|---------------------------------------------------------------------------------------------------------------------------------------------------|
| (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) |   | **2009** |   | **2010** |   | **2011** |
|----------------|--------|----------|--------|----------|--------|----------|
|           |   |          |   |          |   |          |

| Derivatives on exchange rate        |   | 40     |   |   | (111     | )      |   | 29       |   |
|-------------------------------------|--------|--------|--------|--------|----------|--------|--------|----------|--------|
| Derivatives        on interest rate |   | (52    | )      |   | (39      | )      |   | (141     | )      |
| Derivatives on commodities          |   | 8      |   |   | 19       |   |   |     |   |
|                                |   | **(4** | **)**  |   | **(131** | **)**  |   | **(112** | **)**  |
|                                |   |        |        |   |          |        |   |          |        |

Net losses from derivatives of euro 112 million (a net loss ofeuro 4 million and euro 131 million in 2009 and 2010,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.The lack of these formal requirements to qualify thesederivatives as hedging instruments under IFRS also entailed therecognition in profit or loss of currency translation differenceson assets and liabilities denominated in currencies other thanfunctional currency, as this effect cannot be offset by changesin the fair value of the related instruments.

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**38 Income (expense) from investments**

**Share of profit (loss) of equity-accounted investments**

| (euro million) |   | **2009** |   | **2010** |   | **2011** |
|----------------|--------|----------|--------|----------|--------|----------|
|           |   |          |   |          |   |          |

| Share of profit of equity-accounted investments                                          |   | 693     |   |   | 717     |   |   | 678     |   |
|------------------------------------------------------------------------------------------|--------|---------|--------|--------|---------|--------|--------|---------|--------|
| Share of        loss of equity-accounted investments                                     |   | (241    | )      |   | (149    | )      |   | (106    | )      |
| Decreases (increases) in the provision for        losses on equity-accounted investments |   | (59     | )      |   | (31     | )      |   | (28     | )      |
|                                                                                     |   | **393** |   |   | **537** |   |   | **544** |   |
|                                                                                     |   |         |        |   |         |        |   |         |        |

More information is provided in Note 17 –Equity-accounted investments.

 

**Other gain (loss) from investments**

| (euro million) |   | **2009** |   | **2010** |   | **2011** |
|----------------|--------|----------|--------|----------|--------|----------|
|           |   |          |   |          |   |          |

| Dividends                      |   | 164     |   |   | 264     |   | 659       |   |
|--------------------------------|--------|---------|--------|--------|---------|--------|-----------|--------|
| Gains on        disposals, net |   | 16      |   |   | 332     |   | 1,125     |   |
| Other income (expense), net    |   | (4      | )      |   | 23      |   | (157      | )      |
|                           |   | **176** |   |   | **619** |   | **1,627** |   |
|                           |   |         |        |   |         |   |           |        |

Dividend income for euro 659 million related to the NigeriaLNG Ltd (euro 483 million), Trans Austria Gasleitung GmbH (euro82 million) and Saudi European Petrochemical Co "IBNZAHR" (euro 67 million) investees.

In 2011 net gains on disposals amounted to euro 1,125 millionand pertained to the divestment of the 100% interest in Eni GasTransport International SA (euro 647 million), the 89% interest(entire stake own) in Trans Austria Gasleitung GmbH (euro 338million), the 100% interest in Gas Brasiliano Distribuidora SA(euro 50 million) and the 46% interest (entire stake own) inTransitgas AG (euro 34 million). Gains on disposals for 2010 ofeuro 332 million essentially referred to the divestment of the100% interest in Società Padana Energia SpA (euro 169 million),the 25% stake in GreenStream BV (euro 93 million) and the 100%interest in Distri RE SA (euro 47 million). Gains on disposalsfor 2009 of euro 16 million primarily referred to a pricerevision related to the sale done in 2008 of Gaztransport etTechnigaz SAS (euro 10 million).

In 2011, other net income (expense) of euro 157 millionincluded the full write-down of the book value of the CeskaRafinerska AS due to management’s expectations of incurringfuture losses driven by a negative outlook in the refiningsegment (euro 157 million).

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**39 Income taxes**

| (euro million) |   | **2009** |   | **2010** |   | **2011** |
|----------------|--------|----------|--------|----------|--------|----------|
|           |   |          |   |          |   |          |

| Current taxes:                                                            |   |       |   |   |      |   |   |       |   |
|---------------------------------------------------------------------------|--------|------------|--------|--------|-----------|--------|--------|------------|--------|
| - Italian        subsidiaries                                             |   | 1,724      |   |   | 1,315     |   |   | 1,408      |   |
| - foreign subsidiaries of the Exploration &        Production segment |   | 5,989      |   |   | 7,893     |   |   | 8,286      |   |
| - foreign        subsidiaries                                             |   | 483        |   |   | 521       |   |   | 635        |   |
|                                                                      |   | **8,196**  |   |   | **9,729** |   |   | **10,329** |   |
| Net        deferred taxes:                                                |   |       |   |   |      |   |   |       |   |
| - Italian subsidiaries                                                    |   | (534       | )      |   | (474      | )      |   | (435       | )      |
| - foreign        subsidiaries of the Exploration & Production segment |   | (733       | )      |   | (97       | )      |   | 936        |   |
| - foreign subsidiaries                                                    |   | (173       | )      |   | (1        | )      |   | (156       | )      |
|                                                                      |   | **(1,440** | **)**  |   | **(572**  | **)**  |   | **345**    |   |
|                                                                      |   | **6,756**  |   |   | **9,157** |   |   | **10,674** |   |
|                                                                      |   |            |        |   |           |        |   |            |        |

Income taxes currently payable amounted to euro 1,408 millionand were in respect of the Italian corporate taxation (Ires foreuro 1,039 million and Irap for euro 249 million) and corporateforeign taxes for euro 120 million incurred by Italiansubsidiaries.

Deferred taxes recognized by foreign subsidiaries in theExploration & Production segment comprised an adjustment todeferred taxation for euro 573 million due to a changed tax rateapplicable to a production sharing agreement, including anadjustment to deferred taxation which was recognized uponallocation of the purchase price as part of a businesscombination when the mineral interest was acquired by Eni.

The effective tax rate was 57.8% (56.0% and 55.4% in 2009 and2010, respectively) compared with a statutory tax rate of 43.1%(40.1% and 39.6% in 2009 and 2010, respectively). This wascalculated by applying the Italian statutory tax rate oncorporate profit of 38.0%17 (Ires) and a 3.9%corporate tax rate applicable to the net value of production(Irap) as provided for by Italian laws.

The difference between the statutory and effective tax ratewas due to the following factors:

| (%)    |   | **2009** |   | **2010** |   | **2011** |
|--------|--------|----------|--------|----------|--------|----------|
|   |   |          |   |          |   |          |

| **Statutory tax rate**                                                                                                        |   | **40.1** |   | **39.6** |   |   | **43.1** |
|-------------------------------------------------------------------------------------------------------------------------------|--------|----------|--------|----------|--------|--------|----------|
| Items        increasing (decreasing) statutory tax rate:                                                                      |   |     |   |     |   |   |     |
| - higher foreign subsidiaries tax rate                                                                                        |   | 13.3     |   | 15.0     |   |   | 12.2     |
| - impact        of the supplemental Ires pursuant to the Law No. 7 of        February 6, 2009                                 |   |     |   | 1.5      |   |   | 0.9      |
| - impact pursuant to Law Decree No. 112/2008,        Budget Law 2008 and enactment of a renewed tax framework        in Libya |   | 2.4      |   |     |   |   |     |
| -        permanent differences and other adjustments                                                                          |   | 0.2      |   | (0.7     | )      |   | 1.6      |
|                                                                                                                          |   | **15.9** |   | **15.8** |   |   | **14.7** |
|                                                                                                                          |   | **56.0** |   | **55.4** |   |   | **57.8** |
|                                                                                                                          |   |          |   |          |        |   |          |

The increase in the tax rate of foreign subsidiaries primarilyrelated to a 16.5% increase in the Exploration& Production segment (16.1% in 2009 and 2010,respectively).

In 2011, the increase for permanent differences and otheradjustments of 1.6 percentage points were due to a non-deductibleprovision accrued to reflect the expected loss deriving from anantitrust proceeding in the European sector of rubbers (0.2percentage points). In 2010, the decrease for permanentdifferences and other adjustments of 0.7 percentage points wasdue to a gain which was excluded from taxable profit relating afavorable outcome of an antitrust proceeding (0.6 percentagepoints). In 2009, the increase for permanent differences andother adjustments of 0.2 percentage points included the effect ofa charge amounting to euro 250 million related to the estimationof a fine for the TSKJ matter to the U.S. Authorities which was anon-deductible item, partially offset by deferred tax 

----

| (17) |    | 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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assets which were recognized following the alignment of thetax base of certain oil&gas properties to their highercarrying amounts by paying a special tax and the partialdeductibility of Irap from income taxes also applicable toprevious reporting periods (euro 222 million).

In 2009, the impact pursuant to Law Decree No. 112/2008, theBudget Law 2008 and enactment of a renewed tax framework in Libyaconsisted of the following: (i) an adjustment amounting to euro230 million pertaining to income taxes due on the profit earnedin Libya the previous year following the enactment of newcriteria for revenues recognition for tax purposes; and (ii) areduced deductibility in Italy of the cost of goods soldfollowing the reduction in the gas volumes of inventories foreuro 64 million.

**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 of ordinary shares issued and outstandingduring the period, excluding treasury shares.

The average number of ordinary shares used for the calculationof the basic earnings per share outstanding at December 31, 2009,2010 and 2011, was 3,622,405,852, 3,622,454,738, 3,622,616,182,respectively.

Diluted earnings per share are calculated by dividing netprofit for the period attributable to Eni’s shareholders bythe weighted average of shares fully-diluted including sharesoutstanding in the year, with the exception of treasury sharesand including the number of potential shares outstanding inconnection with stock-based compensation plans.

At December 31, 2009, 2010 and 2011 the number of potentialshares outstanding were related to stock options plans. Theaverage number of fully-diluted shares used in the calculation ofdiluted earnings was 3,622,438,937, 3,622,469,713 and3,622,616,182 for the years ending December 31, 2009, 2010 and2011, respectively.

Reconciliation of the average number of shares used for thecalculation for both basic and diluted earning per share was asfollows:

|   |   | **2009** |   | **2010** |   | **2011** |
|--------|--------|----------|--------|----------|--------|----------|
|   |   |          |   |          |   |          |

| **Average number of shares used for the        calculation of the basic earnings per share**   |   |             |   | **3,622,405,852** |   | **3,622,454,738** |   | **3,622,616,182** |
|------------------------------------------------------------------------------------------------|--------|------------------|--------|-------------------|--------|-------------------|--------|-------------------|
| Number of        potential shares following stock options plans                                |   |             |   | 33,085            |   | 14,975            |   |              |
| **Average number of shares used for the        calculation of the diluted earnings per share** |   |             |   | **3,622,438,937** |   | **3,622,469,713** |   | **3,622,616,182** |
| **Eni’s        net profit**                                                               |   | (euro million)   |   | **4,367**         |   | **6,318**         |   | **6,860**         |
| **Basic earning per share**                                                                    |   | (euro per share) |   | **1.21**          |   | **1.74**          |   | **1.89**          |
| **Diluted        earning per share**                                                           |   | (euro per share) |   | **1.21**          |   | **1.74**          |   | **1.89**          |
|                                                                                           |   |             |   |                   |   |                   |   |                   |

 

 

 

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**41 Information by industry segment andgeographic financial information**

**Information by industry segment**

| (euro million) |   | **Exploration &        Production** |   | **Gas & Power** |   | **Refining & Marketing** |   | **Petrochemicals** |   | **Engineering &        Construction** |   | **Other activities** |   | **Corporate and financial        companies** |   | **Intra-Group profits** |   | **Total** |
|----------------|--------|-----------------------------------------|--------|---------------------|--------|------------------------------|--------|--------------------|--------|-------------------------------------------|--------|----------------------|--------|----------------------------------------------|--------|-------------------------|--------|-----------|
|           |   |                                         |   |                     |   |                              |   |                    |   |                                           |   |                      |   |                                              |   |                         |   |           |

| **2009**                                                      |   |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |    |
|---------------------------------------------------------------|--------|---------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|---------|
| Net sales        from operations (a)                          |   | 23,801  |   |   | 30,447 |   |   | 31,769 |   |   | 4,203  |   |   | 9,664  |   |   | 88     |   |   | 1,280  |   |   | (66    | )      |   |    |
| Less: intersegment sales                                      |   | (13,630 | )      |   | (635   | )      |   | (965   | )      |   | (238   | )      |   | (1,315 | )      |   | (24    | )      |   | (1,152 | )      |   |   |   |   |    |
| Net sales        to customers                                 |   | 10,171  |   |   | 29,812 |   |   | 30,804 |   |   | 3,965  |   |   | 8,349  |   |   | 64     |   |   | 128    |   |   | (66    | )      |   | 83,227  |
| Operating profit                                              |   | 9,120   |   |   | 3,687  |   |   | (102   | )      |   | (675   | )      |   | 881    |   |   | (436   | )      |   | (420   | )      |   |   |   |   | 12,055  |
| Net        provisions for contingencies                       |   | (2      | )      |   | 277    |   |   | 154    |   |   | 1      |   |   | 311    |   |   | 172    |   |   | 142    |   |   |   |   |   | 1,055   |
| Depreciation, depletion, amortization and        impairments  |   | 7,365   |   |   | 981    |   |   | 754    |   |   | 204    |   |   | 435    |   |   | 8      |   |   | 83     |   |   | (17    | )      |   | 9,813   |
| Share of        profit (loss) of equity-accounted investments |   | 142     |   |   | 310    |   |   | (70    | )      |   |   |   |   | 50     |   |   | (39    | )      |   |   |   |   |   |   |   | 393     |
| Identifiable assets (b)                                       |   | 42,729  |   |   | 32,135 |   |   | 12,244 |   |   | 2,583  |   |   | 11,611 |   |   | 355    |   |   | 1,031  |   |   | (553   | )      |   | 102,135 |
| Unallocated        assets                                     |   |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   | 15,394  |
| Equity-accounted investments                                  |   | 1,989   |   |   | 2,044  |   |   | 1,494  |   |   | 37     |   |   | 213    |   |   | 51     |   |   |   |   |   |   |   |   | 5,828   |
| Identifiable        liabilities (c)                           |   | 10,918  |   |   | 9,161  |   |   | 4,684  |   |   | 742    |   |   | 5,967  |   |   | 1,868  |   |   | 1,461  |   |   | (8     | )      |   | 34,793  |
| Unallocated liabilities                                       |   |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   | 32,685  |
| Capital        expenditures                                   |   | 9,486   |   |   | 1,686  |   |   | 635    |   |   | 145    |   |   | 1,630  |   |   | 44     |   |   | 57     |   |   | 12     |   |   | 13,695  |
| **2010**                                                      |   |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |    |
| Net sales        from operations (a)                          |   | 29,497  |   |   | 29,576 |   |   | 43,190 |   |   | 6,141  |   |   | 10,581 |   |   | 105    |   |   | 1,386  |   |   | 100    |   |   |    |
| Less: intersegment sales                                      |   | (16,550 | )      |   | (833   | )      |   | (1,345 | )      |   | (243   | )      |   | (1,802 | )      |   | (25    | )      |   | (1,255 | )      |   |   |   |   |    |
| Net sales        to customers                                 |   | 12,947  |   |   | 28,743 |   |   | 41,845 |   |   | 5,898  |   |   | 8,779  |   |   | 80     |   |   | 131    |   |   | 100    |   |   | 98,523  |
| Operating profit                                              |   | 13,866  |   |   | 2,896  |   |   | 149    |   |   | (86    | )      |   | 1,302  |   |   | (1,384 | )      |   | (361   | )      |   | (271   | )      |   | 16,111  |
| Net        provisions for contingencies                       |   | 33      |   |   | (58    | )      |   | 199    |   |   | 2      |   |   | 35     |   |   | 1,146  |   |   | 50     |   |   |   |   |   | 1,407   |
| Depreciation, depletion, amortization and        impairments  |   | 7,051   |   |   | 1,399  |   |   | 409    |   |   | 135    |   |   | 516    |   |   | 10     |   |   | 79     |   |   | (20    | )      |   | 9,579   |
| Share of        profit (loss) of equity-accounted investments |   | 92      |   |   | 388    |   |   | 68     |   |   | 1      |   |   |   |   |   | (2     | )      |   | (10    | )      |   |   |   |   | 537     |
| Identifiable assets (b)                                       |   | 49,573  |   |   | 34,943 |   |   | 14,356 |   |   | 3,076  |   |   | 12,715 |   |   | 362    |   |   | 754    |   |   | (917   | )      |   | 114,862 |
| Unallocated        assets                                     |   |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   | 16,998  |
| Equity-accounted investments                                  |   | 1,974   |   |   | 2,370  |   |   | 1,058  |   |   | 30     |   |   | 174    |   |   | 54     |   |   | 8      |   |   |   |   |   | 5,668   |
| Identifiable        liabilities (c)                           |   | 12,330  |   |   | 10,048 |   |   | 6,197  |   |   | 874    |   |   | 5,760  |   |   | 2,898  |   |   | 1,307  |   |   | (101   | )      |   | 39,313  |
| Unallocated liabilities                                       |   |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   | 36,819  |
| Capital        expenditures                                   |   | 9,690   |   |   | 1,685  |   |   | 711    |   |   | 251    |   |   | 1,552  |   |   | 22     |   |   | 109    |   |   | (150   | )      |   | 13,870  |
| **2011**                                                      |   |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |    |
| Net sales        from operations (a)                          |   | 29,121  |   |   | 34,731 |   |   | 51,219 |   |   | 6,491  |   |   | 11,834 |   |   | 85     |   |   | 1,365  |   |   | (54    | )      |   |    |
| Less: intersegment sales                                      |   | (18,444 | )      |   | (1,083 | )      |   | (2,791 | )      |   | (289   | )      |   | (1,324 | )      |   | (23    | )      |   | (1,249 | )      |   |   |   |   |    |
| Net sales        to customers                                 |   | 10,677  |   |   | 33,648 |   |   | 48,428 |   |   | 6,202  |   |   | 10,510 |   |   | 62     |   |   | 116    |   |   | (54    | )      |   | 109,589 |
| Operating profit                                              |   | 15,887  |   |   | 1,758  |   |   | (273   | )      |   | (424   | )      |   | 1,422  |   |   | (427   | )      |   | (319   | )      |   | (189   | )      |   | 17,435  |
| Net        provisions for contingencies                       |   | 53      |   |   | 137    |   |   | 57     |   |   | 11     |   |   | 79     |   |   | 201    |   |   | 13     |   |   |   |   |   | 551     |
| Depreciation, depletion, amortization and        impairments  |   | 6,440   |   |   | 1,100  |   |   | 839    |   |   | 250    |   |   | 631    |   |   | 6      |   |   | 75     |   |   | (23    | )      |   | 9,318   |
| Share of        profit (loss) of equity-accounted investments |   | 119     |   |   | 276    |   |   | 100    |   |   |   |   |   | 95     |   |   | (45    | )      |   | (1     | )      |   |   |   |   | 544     |
| Identifiable assets (b)                                       |   | 56,139  |   |   | 36,357 |   |   | 15,031 |   |   | 3,066  |   |   | 13,521 |   |   | 378    |   |   | 810    |   |   | (1,060 | )      |   | 124,242 |
| Unallocated        assets                                     |   |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   | 18,703  |
| Equity-accounted investments                                  |   | 2,317   |   |   | 2,375  |   |   | 890    |   |   | 38     |   |   | 179    |   |   | 37     |   |   | 7      |   |   |   |   |   | 5,843   |
| Identifiable        liabilities (c)                           |   | 13,844  |   |   | 10,893 |   |   | 5,972  |   |   | 761    |   |   | 5,437  |   |   | 3,020  |   |   | 1,095  |   |   | (54    | )      |   | 40,968  |
| Unallocated liabilities                                       |   |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   | 41,584  |
| Capital        expenditures                                   |   | 9,435   |   |   | 1,721  |   |   | 866    |   |   | 216    |   |   | 1,090  |   |   | 10     |   |   | 128    |   |   | (28    | )      |   | 13,438  |
|                                                          |   |         |        |   |        |        |   |        |        |   |        |        |   |        |        |   |        |        |   |        |        |   |        |        |   |         |

|    |    |                                                                                       |
|--------------|--------------|-------------------------------------------------------------------------------------------------|
| (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. |

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Starting from the Annual Report 2010, environmental provisionsincurred by Eni SpA following the effect of inter-companyguarantees given on behalf of Syndial SpA are reported in thesegment information within "Other activities". Priorperiod information has been restated accordingly.

Intersegment revenues are conducted on an arm’s lengthbasis.

 

**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** |
|----------------|--------|--------|--------|-----------|--------|--------------------------|--------|--------------------|--------|--------------|--------|----------|--------|------------|--------|-----------------|--------|-----------|
|           |   |   |   |           |   |                          |   |                    |   |              |   |          |   |            |   |                 |   |           |

| **2009**                       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |    |
|--------------------------------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|---------|
| Identifiable        assets (a) |   | 40,861 |   | 15,571 |   | 3,520  |   | 6,337  |   | 11,187 |   | 23,397 |   | 1,262  |   | 102,135 |
| Capital expenditures           |   | 3,198  |   | 1,454  |   | 574    |   | 1,207  |   | 2,033  |   | 4,645  |   | 584    |   | 13,695  |
| **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  |
|                           |   |        |   |        |   |        |   |        |   |        |   |        |   |        |   |         |

|    |    |                                                                                  |
|--------------|--------------|--------------------------------------------------------------------------------------------|
| (a)          |    | Includes        assets directly associated with the generation of        operating profit. |

*Net sales from operations by geographic area of destination*

| (euro million) |   | **2009** |   | **2010** |   | **2011** |
|----------------|--------|----------|--------|----------|--------|----------|
|           |   |          |   |          |   |          |

| Italy                       |   | 27,950     |   | 47,802     |   | 33,805      |
|-----------------------------|--------|------------|--------|------------|--------|-------------|
| Other        European Union |   | 24,331     |   | 21,125     |   | 35,536      |
| Rest of Europe              |   | 5,213      |   | 4,172      |   | 7,537       |
| Americas                    |   | 7,080      |   | 6,282      |   | 9,612       |
| Asia                        |   | 8,208      |   | 5,785      |   | 10,258      |
| Africa                      |   | 10,174     |   | 13,068     |   | 11,333      |
| Other areas                 |   | 271        |   | 289        |   | 1,508       |
|                        |   | **83,227** |   | **98,523** |   | **109,589** |
|                        |   |            |   |            |   |             |

**42 Transactions with related parties**

| 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;                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |
| (c) |   | contributions to entities,        controlled by Eni with the aim to develop solidarity,        culture and research initiatives. In particular these        related to: (i) Eni Foundation established by Eni as a        non-profit entity with the aim of pursuing exclusively        solidarity initiatives in the fields of social        assistance, health, education, culture and environment as        well as research and development. In 2011, transactions        with Eni Foundation were not material; (ii) 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. |

In application of the Consob Regulation No. 17221/2010,related to transactions with related parties and introduced bythe Eni’s internal procedure approved by the Board ofDirectors on November 18, 2010, starting from January 1, 2011,the company Cosmi SpA and its relevant group’s companies,already mentioned in Eni annual 

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reports up to the 2010, are not qualified as related partiesthrough a member of the Board of Directors. However, according tothe Eni’s internal procedure, the company Cosmi SpA isconsidered as a subject of interest of a member of the Board ofDirectors and, therefore, any operations carried out by Eni withsuch company are subjected to specific procedures, practices andobligations of transparency with the aim to guarantee theirsubstantial and formal fairness.

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.

**Trade and other transactions**Trade and other transactions with joint ventures, associatesand non-consolidated subsidiaries as well as with entitiescontrolled by the Italian Government in the 2009, 2010 and 2011,respectively, consisted of the following:

| **2009**        (euro million) |   | **Dec. 31, 2009** |   | **2009** |
|--------------------------------|--------|-------------------|--------|----------|
|                           |   |                   |   |          |

|   | **Costs** |   | **Revenues** |   |   |
|--------|-----------|--------|--------------|--------|--------|
|   |           |   |              |   |   |

| **Name** | **  ** | **Receivables and other assets** | **  ** | **Payables and other liabilities** | **  ** | **Guarantees** | **  ** | **Goods** | **  ** | **Services** | **  ** | **Other** | **  ** | **Goods** | **  ** | **Services** | **  ** | **Other** | **  ** | **Other operating (expense) income** |
|----------|------------------|----------------------------------|------------------|------------------------------------|------------------|----------------|------------------|-----------|------------------|--------------|------------------|-----------|------------------|-----------|------------------|--------------|------------------|-----------|------------------|--------------------------------------|
|          |             |                                  |             |                                    |             |                |             |           |             |              |             |           |             |           |             |              |             |           |             |                                      |

| **Joint ventures and associates**                                         |   |      |   |      |   |      |   |      |   |      |   |    |   |      |   |      |   |   |   |   |
|---------------------------------------------------------------------------|--------|-----------|--------|-----------|--------|-----------|--------|-----------|--------|-----------|--------|---------|--------|-----------|--------|-----------|--------|--------|--------|--------|
| Agiba        Petroleum Co                                                 |   |      |   | 5         |   |      |   |      |   | 64        |   |    |   |      |   |      |   |   |   |   |
| Altergaz SA                                                               |   | 50        |   |      |   |      |   |      |   |      |   |    |   | 142       |   |      |   |   |   |   |
| ASG Scarl                                                                 |   |      |   | 10        |   | 54        |   |      |   | 25        |   |    |   |      |   |      |   |   |   |   |
| Azienda Energia e Servizi Torino SpA                                      |   | 1         |   | 30        |   |      |   |      |   | 62        |   |    |   |      |   | 1         |   |   |   |   |
| Bayernoil        Raffineriegesellschaft mbH                               |   |      |   | 31        |   | 1         |   | 15        |   | 77        |   |    |   | 2         |   |      |   |   |   |   |
| Blue Stream Pipeline Co BV                                                |   | 17        |   | 15        |   | 34        |   |      |   | 163       |   |    |   |      |   |      |   |   |   |   |
| Bronberger        & Kessler und Gilg & Schweiger GmbH & Co KG |   | 16        |   |      |   |      |   |      |   |      |   |    |   | 95        |   |      |   |   |   |   |
| CEPAV (Consorzio Eni per l'Alta Velocità) Uno                        |   | 38        |   | 12        |   | 6,037     |   |      |   | 5         |   |    |   |      |   | 84        |   |   |   |   |
| CEPAV        (Consorzio Eni per l'Alta Velocità) Due                 |   | 6         |   | 1         |   | 76        |   |      |   | 1         |   |    |   |      |   | 2         |   |   |   |   |
| Fox Energy SpA                                                            |   | 44        |   |      |   |      |   | 1         |   |      |   |    |   | 241       |   |      |   |   |   |   |
| Gasversorgung        Süddeutschland GmbH                             |   | 17        |   |      |   |      |   |      |   |      |   |    |   | 196       |   | 8         |   |   |   |   |
| Gruppo Distribuzione Petroli Srl                                          |   | 15        |   |      |   |      |   |      |   |      |   |    |   | 71        |   |      |   |   |   |   |
| InAgip doo                                                                |   | 44        |   | 23        |   |      |   |      |   | 86        |   |    |   |      |   | 71        |   |   |   |   |
| Karachaganak Petroleum Operating BV                                       |   | 61        |   | 196       |   |      |   | 588       |   | 344       |   | 27      |   | 9         |   | 10        |   |   |   |   |
| KWANDA -        Suporte Logistico Lda                                     |   | 72        |   |      |   |      |   |      |   |      |   |    |   |      |   | 20        |   |   |   |   |
| Mellitah Oil & Gas BV                                                 |   | 30        |   | 190       |   |      |   |      |   | 306       |   |    |   | 2         |   | 31        |   |   |   |   |
| Petrobel        Belayim Petroleum Co                                      |   | 4         |   | 12        |   |      |   |      |   | 205       |   |    |   |      |   | 4         |   | 2      |   |   |
| Raffineria di Milazzo ScpA                                                |   | 14        |   | 8         |   |      |   |      |   | 242       |   |    |   | 98        |   | 5         |   |   |   |   |
| Saipon Snc                                                                |   | 8         |   | 2         |   | 61        |   |      |   |      |   |    |   |      |   | 45        |   |   |   |   |
| Super Octanos CA                                                          |   |      |   | 24        |   |      |   | 133       |   |      |   |    |   |      |   |      |   |   |   |   |
| Trans        Austria Gasleitung GmbH                                      |   | 4         |   | 71        |   |      |   | 36        |   | 157       |   |    |   |      |   | 40        |   |   |   |   |
| Transitgas AG                                                             |   |      |   |      |   |      |   |      |   | 1         |   | 61      |   |      |   |      |   |   |   |   |
| Unión        Fenosa Gas SA                                           |   | 8         |   |      |   | 62        |   | 12        |   |      |   |    |   | 53        |   |      |   | 1      |   |   |
| Other (*)                                                                 |   | 143       |   | 58        |   | 15        |   | 62        |   | 188       |   | 41      |   | 117       |   | 125       |   | 10     |   |   |
|                                                                      |   | **592**   |   | **688**   |   | **6,340** |   | **847**   |   | **1,926** |   | **129** |   | **1,026** |   | **446**   |   | **13** |   |   |
| **Unconsolidated entities controlled by Eni**                             |   |      |   |      |   |      |   |      |   |      |   |    |   |      |   |      |   |   |   |   |
| Agip        Kazakhstan North Caspian Operating Co NV                      |   | 194       |   | 224       |   |      |   | 1         |   | 914       |   | 7       |   | 15        |   | 466       |   | 7      |   |   |
| Eni BTC Ltd                                                               |   |      |   |      |   | 141       |   |      |   |      |   |    |   |      |   | 1         |   |   |   |   |
| Other (*)                                                                 |   | 29        |   | 23        |   | 4         |   | 1         |   | 52        |   | 4       |   | 14        |   | 6         |   | 1      |   |   |
|                                                                      |   | **223**   |   | **247**   |   | **145**   |   | **2**     |   | **966**   |   | **11**  |   | **29**    |   | **473**   |   | **8**  |   |   |
|                                                                      |   | **815**   |   | **935**   |   | **6,485** |   | **849**   |   | **2,892** |   | **140** |   | **1,055** |   | **919**   |   | **21** |   |   |
| **Entities controlled by the Government**                                 |   |      |   |      |   |      |   |      |   |      |   |    |   |      |   |      |   |   |   |   |
| Gruppo        Enel                                                        |   | 96        |   | 32        |   |      |   | 9         |   | 286       |   | 77      |   | 342       |   | 428       |   | 1      |   |   |
| Gruppo Finmeccanica                                                       |   | 33        |   | 37        |   |      |   | 16        |   | 56        |   |    |   | 21        |   | 7         |   |   |   |   |
| GSE -        Gestore Servizi Energetici                                   |   | 83        |   | 74        |   |      |   | 373       |   |      |   | 79      |   | 342       |   | 15        |   |   |   | 19     |
| Terna SpA                                                                 |   | 7         |   | 37        |   |      |   | 52        |   | 52        |   | 19      |   | 7         |   | 86        |   | 4      |   | 25     |
| Other (*)                                                                 |   | 78        |   | 71        |   |      |   | 1         |   | 71        |   | 6       |   | 62        |   | 16        |   |   |   |   |
|                                                                      |   | **297**   |   | **251**   |   |      |   | **451**   |   | **465**   |   | **181** |   | **774**   |   | **552**   |   | **5**  |   | **44** |
|                                                                      |   | **1,112** |   | **1,186** |   | **6,485** |   | **1,300** |   | **3,357** |   | **321** |   | **1,829** |   | **1,471** |   | **26** |   | **44** |
|                                                                           |   |           |   |           |   |           |   |           |   |           |   |         |   |           |   |           |   |        |   |        |

|    |    |                                                                             |
|--------------|--------------|---------------------------------------------------------------------------------------|
| (*)          |    | Each        individual amount included herein does not exceed euro 50        million. |

F-107

----

##### 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** |
|----------|------------------|----------------------------------|------------------|------------------------------------|------------------|----------------|------------------|-----------|------------------|--------------|------------------|-----------|------------------|-----------|------------------|--------------|------------------|-----------|------------------|--------------------------------------|
|          |             |                                  |             |                                    |             |                |             |           |             |              |             |           |             |           |             |              |             |           |             |                                      |

| **Joint ventures and associates**                                         |   |    |   |      |   |      |   |      |   |      |   |    |   |      |   |      |   |   |   |   |
|---------------------------------------------------------------------------|--------|---------|--------|-----------|--------|-----------|--------|-----------|--------|-----------|--------|---------|--------|-----------|--------|-----------|--------|--------|--------|--------|
| ACAM        Clienti SpA                                                   |   | 14      |   | 2         |   |      |   | 1         |   | 5         |   |    |   | 56        |   |      |   |   |   |   |
| Agiba Petroleum Co                                                        |   | 2       |   | 5         |   |      |   |      |   | 95        |   |    |   |      |   |      |   |   |   |   |
| Altergaz        SA                                                        |   |    |   |      |   |      |   |      |   |      |   |    |   | 262       |   |      |   |   |   |   |
| Azienda Energia e Servizi Torino SpA                                      |   | 1       |   | 65        |   |      |   |      |   | 78        |   |    |   |      |   | 1         |   |   |   |   |
| 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         |   |   |   |   |
| 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        |   | 91        |   | 12     |   |   |
|                                                                      |   | **406** |   | **755**   |   | **6,290** |   | **1,015** |   | **2,486** |   | **78**  |   | **817**   |   | **272**   |   | **17** |   |   |
| **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**   |   | **1,212** |   | **28** |   |   |
| **Entities controlled by the Government**                                 |   |    |   |      |   |      |   |      |   |      |   |    |   |      |   |      |   |   |   |   |
| Gruppo        Enel                                                        |   | 83      |   | 44        |   |      |   | 20        |   | 318       |   | 1       |   | 128       |   | 471       |   |   |   |   |
| Gruppo Finmeccanica                                                       |   | 44      |   | 44        |   |      |   | 50        |   | 37        |   |    |   | 22        |   | 9         |   |   |   |   |
| GSE -        Gestore Servizi Energetici                                   |   | 94      |   | 104       |   |      |   | 466       |   |      |   | 81      |   | 462       |   | 16        |   |   |   | 3      |
| Terna SpA                                                                 |   | 35      |   | 41        |   |      |   | 115       |   | 71        |   | 31      |   | 55        |   | 28        |   | 9      |   | 38     |
| Other        (*)                                                          |   | 62      |   | 44        |   |      |   |      |   | 74        |   | 4       |   | 44        |   | 5         |   | 21     |   |   |
|                                                                      |   | **318** |   | **277**   |   |      |   | **651**   |   | **500**   |   | **117** |   | **711**   |   | **529**   |   | **30** |   | **41** |
|                                                                      |   | **923** |   | **1,339** |   | **6,445** |   | **1,672** |   | **3,928** |   | **202** |   | **1,533** |   | **1,741** |   | **58** |   | **41** |
|                                                                           |   |         |   |           |   |           |   |           |   |           |   |         |   |           |   |           |   |        |   |        |

|    |    |                                                                             |
|--------------|--------------|---------------------------------------------------------------------------------------|
| (*)          |    | Each        individual amount included herein does not exceed euro 50        million. |

F-108

----

##### 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** |
|----------|------------------|----------------------------------|------------------|------------------------------------|------------------|----------------|------------------|-----------|------------------|--------------|------------------|-----------|------------------|-----------|------------------|--------------|------------------|-----------|------------------|--------------------------------------|
|          |             |                                  |             |                                    |             |                |             |           |             |              |             |           |             |           |             |              |             |           |             |                                      |

| **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        |   |    |   |      |   | 1         |   |   |   |   |
| 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        |   | 311       |   | 70      |   | 131       |   | 93        |   | 8      |   |   |
|                                                                      |   | **604**   |   | **790**   |   | **6,243** |   | **1,333** |   | **2,133** |   | **93**  |   | **983**   |   | **395**   |   | **12** |   |   |
| **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** |   | **2,965** |   | **103** |   | **994**   |   | **1,588** |   | **27** |   |   |
| **Entities        controlled by the Government**                          |   |      |   |      |   |      |   |      |   |      |   |    |   |      |   |      |   |   |   |   |
| Gruppo Enel                                                               |   | 83        |   | 48        |   |      |   | 5         |   | 429       |   | 2       |   | 33        |   | 482       |   | 1      |   |   |
| Gruppo        Finmeccanica                                                |   | 48        |   | 51        |   |      |   | 14        |   | 54        |   |    |   | 22        |   | 12        |   |   |   |   |
| GSE - Gestore Servizi Energetici                                          |   | 153       |   | 158       |   |      |   | 615       |   |      |   | 54      |   | 607       |   | 10        |   |   |   |   |
| Terna SpA                                                                 |   | 19        |   | 52        |   |      |   | 119       |   | 110       |   | 23      |   | 56        |   | 26        |   | 11     |   | 32     |
| Other (*)                                                                 |   | 57        |   | 41        |   |      |   | 1         |   | 77        |   | 5       |   | 49        |   | 3         |   | 4      |   |   |
|                                                                      |   | **360**   |   | **350**   |   |      |   | **754**   |   | **670**   |   | **84**  |   | **767**   |   | **533**   |   | **16** |   | **32** |
|                                                                      |   | **1,166** |   | **1,446** |   | **6,406** |   | **2,098** |   | **3,635** |   | **187** |   | **1,761** |   | **2,121** |   | **43** |   | **32** |
|                                                                           |   |           |   |           |   |           |   |           |   |           |   |         |   |           |   |           |   |        |   |        |

|    |    |                                                                             |
|--------------|--------------|---------------------------------------------------------------------------------------|
| (*)          |    | Each        individual amount included herein does not exceed euro 50        million. |

  

| Most significant transactions with joint        ventures, associates and non-consolidated subsidiaries        concerned: |
|--------------------------------------------------------------------------------------------------------------------------|

| • |   | sale of natural gas to ACAM        Clienti SpA, Gasversorgung Süddeutschland GmbH and Gaz        de Bordeaux SAS;                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |
|--------|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| • |   | 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 transportation and        distribution services from Azienda Energia e Servizi        Torino 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, Trans Austria Gasleitung GmbH and,        exclusively with Trans Austria Gasleitung GmbH, charges        of fuel gas used as drive gas;                                                                                                                                                                                                                                                                                                                                                                                                                   |

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| • |   | 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;                                                                            |
| • |   | guarantees issued on behalf        of CEPAV (Consorzio Eni per l’Alta Velocità) Due        and 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 and Petromar Lda;                                                                                                                                                                                                  |
| • |   | acquisition of petrochemical        products from Super Octanos CA and 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.                                                                                                                                                                                                                  |

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

| Most significant transactions with        entities controlled by the Italian Government concerned: |
|----------------------------------------------------------------------------------------------------|

| • |   | sale and transportation        service of natural gas, the sale of fuel oil and the sale        and purchase of electricity and the acquisition of        electricity transmission service with Gruppo Enel;                                                              |
|--------|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| • |   | a long-term contract for the        maintenance of new combined cycle power plants with        Gruppo Finmeccanica;                                                                                                                                                       |
| • |   | sale and purchase of        electricity and green certificates with GSE - Gestore        Servizi Energetici;                                                                                                                                                              |
| • |   | 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 Terna SpA. |

**Financing transactions**Financing transactions with joint ventures, associates andnon-consolidated subsidiaries as well as with entities controlledby the Government in the 2009, 2010 and 2011, respectively,consisted of the following:

| **2009**        (euro million) |   | **Dec. 31, 2009** |   | **2009** |
|--------------------------------|--------|-------------------|--------|----------|
|                           |   |                   |   |          |

| **Name** | **  ** | **Receivables** | **  ** | **Payables** | **  ** | **Guarantees** | **  ** | **Charges** | **  ** | **Gains** | **  ** | **Income from equity        instruments** |
|----------|------------------|-----------------|------------------|--------------|------------------|----------------|------------------|-------------|------------------|-----------|------------------|-------------------------------------------|
|          |             |                 |             |              |             |                |             |             |             |           |             |                                           |

| **Joint ventures and associates**                    |   |    |   |    |   |    |   |   |   |   |   |   |
|------------------------------------------------------|--------|---------|--------|---------|--------|---------|--------|--------|--------|--------|--------|--------|
| Artic        Russia BV                               |   | 70      |   | 1       |   | 170     |   |   |   | 1      |   |   |
| Bayernoil Raffineriegesellschaft mbH                 |   | 133     |   |    |   |    |   |   |   |   |   |   |
| Blue        Stream Pipeline Co BV                    |   |    |   |    |   | 692     |   |   |   | 12     |   |   |
| Raffineria di Milazzo ScpA                           |   |    |   |    |   | 85      |   |   |   |   |   |   |
| Trans        Austria Gasleitung GmbH                 |   | 171     |   |    |   |    |   |   |   | 5      |   |   |
| Transmediterranean Pipeline Co Ltd                   |   | 149     |   |    |   |    |   |   |   | 3      |   |   |
| Other        (*)                                     |   | 125     |   | 112     |   | 24      |   | 2      |   | 3      |   |   |
|                                                 |   | **648** |   | **113** |   | **971** |   | **2**  |   | **24** |   |   |
| **Unconsolidated        entities controlled by Eni** |   |    |   |    |   |    |   |   |   |   |   |   |
| Other (*)                                            |   | 78      |   | 34      |   | 1       |   | 2      |   | 3      |   |   |
|                                                 |   | **78**  |   | **34**  |   | **1**   |   | **2**  |   | **3**  |   |   |
|                                                 |   | **726** |   | **147** |   | **972** |   | **4**  |   | **27** |   |   |
|                                                      |   |         |   |         |   |         |   |        |   |        |   |        |

|    |    |                                                                             |
|--------------|--------------|---------------------------------------------------------------------------------------|
| (*)          |    | Each        individual amount included herein does not exceed euro 50        million. |

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##### Table of Contents

| **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 does not exceed 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 does not exceed euro 50        million. |

  

| Most significant transactions with joint        ventures, associates and non-consolidated subsidiaries        concerned: |
|--------------------------------------------------------------------------------------------------------------------------|

| • |   | bank debt guarantee issued        on behalf of Artic Russia BV, Blue Stream Pipeline Co BV,        CEPAV (Consorzio Eni per l’Alta Velocità) Due,        Société Centrale Electrique du Congo SA and Raffineria        di Milazzo ScpA; |
|--------|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| • |   | financing loans granted to        Bayernoil Raffineriegesellschaft mbH for capital        expenditures in refining plants and to Société Centrale        Electrique 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;                                                                            |

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| • |   | a cash deposit at Eni’s        financial companies on behalf of Blue Stream Pipeline Co        BV and Unión Fenosa Gas SA. |
|--------|--------|--------------------------------------------------------------------------------------------------------------------------------------|

Income from investments from Cassa Depositi e Prestiti relatedto a gain recorded on the divestment of the 89% interest (entirestake own) in Trans Austria Gasleitung GmbH to CDP Gas Srl.

**Impact of transactions and positions with related parties on thebalance sheet, profit and loss account and statement of cashflows**The impact of transactions and positions with related partieson the balance sheet consisted of the following:

|   |   | **Dec. 31, 2009** |   | **Dec. 31, 2010** |   | **Dec. 31, 2011** |
|--------|--------|-------------------|--------|-------------------|--------|-------------------|
|   |   |                   |   |                   |   |                   |

| (euro        million) |   | **Total** |   | **Related parties** |   | **Impact**(%) |   | **Total** |   | **Related parties** |   | **Impact**(%) |   | **Total** |   | **Related parties** |   | **Impact**(%) |
|-----------------------|--------|-----------|--------|---------------------|--------|---------------|--------|-----------|--------|---------------------|--------|---------------|--------|-----------|--------|---------------------|--------|---------------|
|                  |   |           |   |                     |   |               |   |           |   |                     |   |               |   |           |   |                     |   |               |

| Trade and other receivables             |   | 20,348 |   | 1,355 |   | 6.66  |   | 23,636 |   | 1,356 |   | 5.74  |   | 24,595 |   | 1,496  |   | 6.08   |
|-----------------------------------------|--------|--------|--------|-------|--------|-------|--------|--------|--------|-------|--------|-------|--------|--------|--------|--------|--------|--------|
| Other        current assets             |   | 1,307  |   | 9     |   | 0.69  |   | 1,350  |   | 9     |   | 0.67  |   | 2,326  |   | 2      |   | 0.09   |
| Other non-current financial receivables |   | 1,148  |   | 438   |   | 38.15 |   | 1,523  |   | 668   |   | 43.86 |   | 1,578  |   | 704    |   | 44.61  |
| Other        non-current assets         |   | 1,938  |   | 40    |   | 2.06  |   | 3,355  |   | 16    |   | 0.48  |   | 4,225  |   | 3      |   | 0.07   |
| Current financial liabilities           |   | 3,545  |   | 147   |   | 4.15  |   | 6,515  |   | 127   |   | 1.95  |   | 4,459  |   | 503    |   | 11.28  |
| Trade and        other payables         |   | 19,174 |   | 1,241 |   | 6.47  |   | 22,575 |   | 1,297 |   | 5.75  |   | 22,912 |   | 1,446  |   | 6.31   |
| Other current liabilities               |   | 1,856  |   | 5     |   | 0.27  |   | 1,620  |   | 5     |   | 0.31  |   | 2,237  |   |   |   |   |
| Other        non-current liabilities    |   | 2,480  |   | 49    |   | 1.98  |   | 2,194  |   | 45    |   | 2.05  |   | 2,900  |   |   |   |   |
|                                    |   |        |   |       |   |       |   |        |   |       |   |       |   |        |   |        |   |        |

The impact of transactions with related parties on the profitand loss accounts consisted of the following:

|   |   | **2009** |   | **2010** |   | **2011** |
|--------|--------|----------|--------|----------|--------|----------|
|   |   |          |   |          |   |          |

| (euro        million) |   | **Total** |   | **Related parties** |   | **Impact**(%) |   | **Total** |   | **Related parties** |   | **Impact**(%) |   | **Total** |   | **Related parties** |   | **Impact**(%) |
|-----------------------|--------|-----------|--------|---------------------|--------|---------------|--------|-----------|--------|---------------------|--------|---------------|--------|-----------|--------|---------------------|--------|---------------|
|                  |   |           |   |                     |   |               |   |           |   |                     |   |               |   |           |   |                     |   |               |

| Net sales from operations                 |   | 83,227 |   |   | 3,300  |   |   | 3.97   |   | 98,523 |   |   | 3,274  |   | 3.32   |   | 109,589 |   |   | 3,882 |   |   | 3.54  |
|-------------------------------------------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|---------|--------|--------|-------|--------|--------|-------|
| Other        income and revenues          |   | 1,118  |   |   | 26     |   |   | 2.33   |   | 956    |   |   | 58     |   | 6.07   |   | 933     |   |   | 43    |   |   | 4.61  |
| Purchases, services and other             |   | 58,351 |   |   | 4,999  |   |   | 8.57   |   | 69,135 |   |   | 5,825  |   | 8.43   |   | 79,191  |   |   | 5,887 |   |   | 7.43  |
| Payroll        and related costs          |   | 4,181  |   |   | 15     |   |   | 0.36   |   | 4,785  |   |   | 28     |   | 0.59   |   | 4,749   |   |   | 33    |   |   | 0.69  |
| Other operating (expense) income          |   | 55     |   |   | 44     |   |   | 80.00  |   | 131    |   |   | 41     |   | 31.30  |   | 171     |   |   | 32    |   |   | 18.71 |
| Financial        income                   |   | 5,950  |   |   | 27     |   |   | 0.45   |   | 6,117  |   |   | 41     |   | 0.67   |   | 6,379   |   |   | 49    |   |   | 0.77  |
| Financial expense                         |   | (6,497 | )      |   | (4     | )      |   | 0.06   |   | (6,713 | )      |   |   |   |   |   | (7,396  | )      |   | (1    | )      |   | 0.01  |
| Other gain        (loss) from investments |   | 176    |   |   |   |   |   |   |   | 619    |   |   |   |   |   |   | 1,627   |   |   | 338   |   |   | 20.77 |
|                                      |   |        |        |   |        |        |   |        |   |        |        |   |        |        |        |   |         |        |   |       |        |   |       |

Transactions with related parties fell within the ordinarycourse of Eni’s business and were mainly conducted on anarm’s length basis.

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The main cash flows with related parties are provided below:

| (euro million) |   | **2009** |   | **2010** |   | **2011** |
|----------------|--------|----------|--------|----------|--------|----------|
|           |   |          |   |          |   |          |

| Revenues and other income                                        |   | 3,326      |   |   | 3,332      |   |   | 3,925    |   |
|------------------------------------------------------------------|--------|------------|--------|--------|------------|--------|--------|----------|--------|
| Costs and        other expenses                                  |   | (4,999     | )      |   | (5,825     | )      |   | (4,504   | )      |
| Other operating (expense) income                                 |   | 44         |   |   | 41         |   |   | 32       |   |
| Net change        in trade and other receivables and liabilities |   | 34         |   |   | 182        |   |   | (140     | )      |
| Dividends and net interests                                      |   | 407        |   |   | 521        |   |   | 501      |   |
| **Net        cash provided by operating activities**             |   | **(1,188** | **)**  |   | **(1,749** | **)**  |   | **(186** | **)**  |
| Capital expenditures in tangible and intangible        assets    |   | (1,364     | )      |   | (1,764     | )      |   | (1,416   | )      |
| Disposal        of investments                                   |   |       |   |   |       |   |   | 533      |   |
| Change in accounts payable in relation to        investments     |   | 19         |   |   | 10         |   |   | (21      | )      |
| Change in        financial receivables                           |   | 83         |   |   | 128        |   |   | 104      |   |
| **Net cash used in investing activities**                        |   | **(1,262** | **)**  |   | **(1,626** | **)**  |   | **(800** | **)**  |
| Change in        financial liabilities                           |   | (14        | )      |   | (23        | )      |   | 348      |   |
| **Net cash used in financing activities**                        |   | **(14**    | **)**  |   | **(23**    | **)**  |   | **348**  |   |
| **Total        financial flows to related parties**              |   | **(2,464** | **)**  |   | **(3,398** | **)**  |   | **(638** | **)**  |
|                                                             |   |            |        |   |            |        |   |          |        |

Disposals of investments for euro 533 million related to thedivestment of the entire 89% interest in Trans Austria GasleitungGmbH to CDP Gas Srl, Gruppo Cassa Depositi e Prestiti.

The impact of cash flows with related parties consisted of thefollowing:

|   |   | **2009** |   | **2010** |   | **2011** |
|--------|--------|----------|--------|----------|--------|----------|
|   |   |          |   |          |   |          |

| (euro        million) |   | **Total** |   | **Related parties** |   | **Impact**(%) |   | **Total** |   | **Related parties** |   | **Impact**(%) |   | **Total** |   | **Related parties** |   | **Impact**(%) |
|-----------------------|--------|-----------|--------|---------------------|--------|---------------|--------|-----------|--------|---------------------|--------|---------------|--------|-----------|--------|---------------------|--------|---------------|
|                  |   |           |   |                     |   |               |   |           |   |                     |   |               |   |           |   |                     |   |               |

| Cash provided by operating activities    |   | 11,136  |   |   | (1,188 | ) |   | ..    |   | 14,694  |   |   | (1,749 | ) |   | ..    |   | 14,382  |   |   | (186 | )      |   | ..     |
|------------------------------------------|--------|---------|--------|--------|--------|---|--------|-------|--------|---------|--------|--------|--------|---|--------|-------|--------|---------|--------|--------|------|--------|--------|--------|
| Cash used        in investing activities |   | (10,254 | )      |   | (1,262 | ) |   | 12.31 |   | (12,965 | )      |   | (1,626 | ) |   | 12.54 |   | (11,218 | )      |   | (800 | )      |   | 7.13   |
| Cash used in financing activities        |   | (1,183  | )      |   | (14    | ) |   | 1.18  |   | (1,827  | )      |   | (23    | ) |   | 1.26  |   | (3,223  | )      |   | 348  |   |   |   |
|                                     |   |         |        |   |        |   |   |       |   |         |        |   |        |   |   |       |   |         |        |   |      |        |   |        |

**43 Significant non-recurring events and operations**

Non-recurring charge (income) consisted of the following:

| (euro million) |   | **2009** |   | **2010** |   | **2011** |
|----------------|--------|----------|--------|----------|--------|----------|
|           |   |          |   |          |   |          |

| Estimate of the charge from the possible        resolution of the TSKJ matter |   | 250     |   | 24       |   |   |   |
|-------------------------------------------------------------------------------|--------|---------|--------|----------|--------|--------|--------|
| Fines        sanctioned by Antitrust Authorities                              |   |    |   | (270     | )      |   | 69     |
|                                                                          |   | **250** |   | **(246** | **)**  |   | **69** |
|                                                                          |   |         |   |          |        |   |        |

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 anti-competitive 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 2009, 2010 and 2011 no transactions deriving from atypicaland/or unusual operations were reported.

**45 Subsequent events**

On March 1, 2012, as part of their strategic partnership, Eniand Gazprom signed a preliminary agreement on the revision of thelong-term supply contracts of Russian gas to Eni’soperations in Italy. The economic benefits of the agreement willbe retroactive from the beginning of 2011 and will be recognizedthrough profit from 2012. For the agreement to become effective,it is necessary that the existing supply contracts be amendedaccordingly.

 

 

 

 

 

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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 geographical area consist of thefollowing:

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

| **December 31, 2010 Consolidated subsidiaries**                           |   |       |   |   |       |   |   |       |   |   |       |   |   |      |   |   |      |   |   |       |   |   |      |   |   |        |   |
|---------------------------------------------------------------------------|--------|------------|--------|--------|------------|--------|--------|------------|--------|--------|------------|--------|--------|-----------|--------|--------|-----------|--------|--------|------------|--------|--------|-----------|--------|--------|-------------|--------|
| Proved        mineral interests                                           |   | 10,576     |   |   | 10,616     |   |   | 14,051     |   |   | 17,057     |   |   | 1,989     |   |   | 5,552     |   |   | 6,617      |   |   | 1,674     |   |   | 68,132      |   |
| Unproved mineral interests                                                |   | 32         |   |   | 320        |   |   | 570        |   |   | 2,006      |   |   | 39        |   |   | 1,561     |   |   | 1,979      |   |   | 42        |   |   | 6,549       |   |
| Support        equipment and facilities                                   |   | 270        |   |   | 33         |   |   | 1,391      |   |   | 716        |   |   | 70        |   |   | 21        |   |   | 53         |   |   | 6         |   |   | 2,560       |   |
| Incomplete wells and other                                                |   | 909        |   |   | 584        |   |   | 2,069      |   |   | 1,089      |   |   | 4,644     |   |   | 107       |   |   | 1,444      |   |   | 84        |   |   | 10,930      |   |
| **Gross        Capitalized Costs**                                        |   | **11,787** |   |   | **11,553** |   |   | **18,081** |   |   | **20,868** |   |   | **6,742** |   |   | **7,241** |   |   | **10,093** |   |   | **1,806** |   |   | **88,171**  |   |
| Accumulated depreciation, depletion and        amortization               |   | (8,020     | )      |   | (7,771     | )      |   | (8,558     | )      |   | (11,067    | )      |   | (756      | )      |   | (4,699    | )      |   | (5,591     | )      |   | (522      | )      |   | (46,984     | )      |
| **Net        Capitalized Costs consolidated subsidiaries**(a)        (b)  |   | **3,767**  |   |   | **3,782**  |   |   | **9,523**  |   |   | **9,801**  |   |   | **5,986** |   |   | **2,542** |   |   | **4,502**  |   |   | **1,284** |   |   | **41,187**  |   |
| **Equity-accounted entities**                                             |   |       |   |   |       |   |   |       |   |   |       |   |   |      |   |   |      |   |   |       |   |   |      |   |   |        |   |
| Proved        mineral interests                                           |   |       |   |   |       |   |   | 79         |   |   | 191        |   |   |      |   |   | 479       |   |   | 178        |   |   |      |   |   | 927         |   |
| Unproved mineral interests                                                |   |       |   |   |       |   |   |       |   |   |       |   |   |      |   |   | 469       |   |   |       |   |   |      |   |   | 469         |   |
| Support        equipment and facilities                                   |   |       |   |   |       |   |   | 7          |   |   |       |   |   |      |   |   | 6         |   |   | 3          |   |   |      |   |   | 16          |   |
| Incomplete wells and other                                                |   |       |   |   |       |   |   |       |   |   | 332        |   |   |      |   |   | 139       |   |   | 197        |   |   |      |   |   | 668         |   |
| **Gross        Capitalized Costs**                                        |   |       |   |   |       |   |   | **86**     |   |   | **523**    |   |   |      |   |   | **1,093** |   |   | **378**    |   |   |      |   |   | **2,080**   |   |
| Accumulated depreciation, depletion and        amortization               |   |       |   |   |       |   |   | (73        | )      |   | (103       | )      |   |      |   |   | (350      | )      |   | (66        | )      |   |      |   |   | (592        | )      |
| **Net        Capitalized Costs equity-accounted entities** (a)        (b) |   |       |   |   |       |   |   | **13**     |   |   | **420**    |   |   |      |   |   | **743**   |   |   | **312**    |   |   |      |   |   | **1,488**   |   |
| **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**   |   |
|                                                                      |   |            |        |   |            |        |   |            |        |   |            |        |   |           |        |   |           |        |   |            |        |   |           |        |   |             |        |

|    |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |
|--------------|--------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| (a)          |    | The amounts        include net capitalized financial charges totaling euro        591 million in 2010 and euro 614 million in 2011 for the        consolidated subsidiaries and euro 6 million in 2010 and        euro 11 million in 2011 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 3,410 million in 2010 and euro        3,608 million in 2011 for the consolidated subsidiaries        and of euro 76 million in 2010 and euro 101 million in        2011 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** |   | **America** |   | **Australia and Oceania** |   | **Total** |
|-----------------------|--------|-----------|--------|--------------------|--------|------------------|--------|------------------------|--------|----------------|--------|------------------|--------|-------------|--------|---------------------------|--------|-----------|
|                  |   |           |   |                    |   |                  |   |                        |   |                |   |                  |   |             |   |                           |   |           |

| **2009**                                                  |   |    |   |      |   |      |   |      |   |      |   |    |   |      |   |    |   |       |
|-----------------------------------------------------------|--------|---------|--------|-----------|--------|-----------|--------|-----------|--------|-----------|--------|---------|--------|-----------|--------|---------|--------|------------|
| **Consolidated        subsidiaries**                      |   |    |   |      |   |      |   |      |   |      |   |    |   |      |   |    |   |       |
| Proved property acquisitions                              |   |    |   |      |   | 298       |   | 27        |   |      |   | 11      |   | 131       |   |    |   | 467        |
| Unproved        property acquisitions                     |   |    |   |      |   | 54        |   | 42        |   |      |   | 83      |   | 43        |   |    |   | 222        |
| Exploration                                               |   | 40      |   | 114       |   | 317       |   | 284       |   | 20        |   | 159     |   | 242       |   | 52      |   | 1,228      |
| Development        (a)                                    |   | 742     |   | 727       |   | 1,401     |   | 2,121     |   | 1,086     |   | 423     |   | 858       |   | 462     |   | 7,820      |
| **Total costs incurred consolidated        subsidiaries** |   | **782** |   | **841**   |   | **2,070** |   | **2,474** |   | **1,106** |   | **676** |   | **1,274** |   | **514** |   | **9,737**  |
| **Equity-accounted        entities**                      |   |    |   |      |   |      |   |      |   |      |   |    |   |      |   |    |   |       |
| Proved property acquisitions                              |   |    |   |      |   |      |   |      |   |      |   |    |   |      |   |    |   |       |
| Unproved        property acquisitions                     |   |    |   |      |   |      |   |      |   |      |   |    |   |      |   |    |   |       |
| Exploration                                               |   |    |   |      |   | 6         |   | 1         |   |      |   | 9       |   | 25        |   |    |   | 41         |
| Development        (b)                                    |   |    |   |      |   | 3         |   | 62        |   |      |   | 94      |   | 47        |   |    |   | 206        |
| **Total costs incurred equity-accounted        entities** |   |    |   |      |   | **9**     |   | **63**    |   |      |   | **103** |   | **72**    |   |    |   | **247**    |
| **2010**                                                  |   |    |   |      |   |      |   |      |   |      |   |    |   |      |   |    |   |       |
| **Consolidated subsidiaries**                             |   |    |   |      |   |      |   |      |   |      |   |    |   |      |   |    |   |       |
| Proved        property acquisitions                       |   |    |   |      |   |      |   |      |   |      |   |    |   |      |   |    |   |       |
| Unproved property acquisitions                            |   |    |   |      |   |      |   |      |   |      |   |    |   |      |   |    |   |       |
| Exploration                                               |   | 34      |   | 114       |   | 84        |   | 406       |   | 6         |   | 223     |   | 119       |   | 26      |   | 1,012      |
| Development (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**    |
|                                                      |   |         |   |           |   |           |   |           |   |           |   |         |   |           |   |         |   |            |

|    |    |                                                                                                                                              |
|--------------|--------------|--------------------------------------------------------------------------------------------------------------------------------------------------------|
| (a)          |    | Includes the        abandonment costs of the assets for euro 301 million in        2009, euro 269 million in 2010 and euro 918 million in        2011. |
| (b)          |    | Includes the        abandonment costs of the assets for euro -6 million in        2009, euro -3 million in 2010 and euro 15 million in 2011            |

*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 arestateowned entities, with proceeds being remitted to the state insatisfaction of Eni’s PSA related tax liabilities. Revenueand income taxes include such taxes owed by Eni but paid bystate-owned entities out of Eni’s share of oil and gasproduction.

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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** |   | **America** |   | **Australia and Oceania** |   | **Total** |
|-----------------------|--------|-----------|--------|--------------------|--------|------------------|--------|------------------------|--------|----------------|--------|------------------|--------|-------------|--------|---------------------------|--------|-----------|
|                  |   |           |   |                    |   |                  |   |                        |   |                |   |                  |   |             |   |                           |   |           |

| **2009**                                                                                        |   |      |   |   |      |   |   |      |   |   |      |   |   |      |   |   |      |   |   |      |         |   |     |         |   |       |   |
|-------------------------------------------------------------------------------------------------|--------|-----------|--------|--------|-----------|--------|--------|-----------|--------|--------|-----------|--------|--------|-----------|--------|--------|-----------|--------|--------|-----------|--------------|--------|----------|--------------|--------|------------|--------|
| **Consolidated        subsidiaries**                                                            |   |      |   |   |      |   |   |      |   |   |      |   |   |      |   |   |      |   |   |      |         |   |     |         |   |       |   |
| Revenues:                                                                                       |   |      |   |   |      |   |   |      |   |   |      |   |   |      |   |   |      |   |   |      |         |   |     |         |   |       |   |
| - sales to        consolidated entities                                                         |   | 2,274     |   |   | 2,583     |   |   | 1,738     |   |   | 4,386     |   |   | 245       |   |   | 41        |   |   | 808       |         |   | 29       |         |   | 12,104     |   |
| - sales to third parties                                                                        |   |      |   |   | 540       |   |   | 5,037     |   |   | 586       |   |   | 739       |   |   | 1,208     |   |   | 639       |         |   | 181      |         |   | 8,930      |   |
| **Total        revenues**                                                                       |   | **2,274** |   |   | **3,123** |   |   | **6,775** |   |   | **4,972** |   |   | **984**   |   |   | **1,249** |   |   | **1,447** |         |   | **210**  |         |   | **21,034** |   |
| Operations costs                                                                                |   | (271      | )      |   | (517      | )      |   | (553      | )      |   | (749      | )      |   | (153      | )      |   | (78       | )      |   | (273      | )            |   | (41      | )            |   | (2,635     | )      |
| Production        taxes                                                                         |   | (148      | )      |   |      |   |   | (20       | )      |   | (445      | )      |   |      |   |   | (34       | )      |   |      |         |   |     |         |   | (647       | )      |
| Exploration expenses                                                                            |   | (40       | )      |   | (114      | )      |   | (319      | )      |   | (451      | )      |   | (20       | )      |   | (204      | )      |   | (341      | )            |   | (62      | )            |   | (1,551     | )      |
| D.D. &        A. and Provision for abandonment (a)                                          |   | (463      | )      |   | (921      | )      |   | (956      | )      |   | (1,502    | )      |   | (78       | )      |   | (535      | )      |   | (1,108    | )            |   | (186     | )            |   | (5,749     | )      |
| Other income (expenses)                                                                         |   | (125      | )      |   | (134      | )      |   | (471      | )      |   | (467      | )      |   | (186      | )      |   | (17       | )      |   | 170       |    |   | (47      | )            |   | (1,277     | )      |
| **Pretax        income from producing activities**                                              |   | **1,227** |   |   | **1,437** |   |   | **4,456** |   |   | **1,358** |   |   | **547**   |   |   | **381**   |   |   | **(105**  | **)**        |   | **(126** | **)**        |   | **9,175**  |   |
| Income taxes                                                                                    |   | (467      | )      |   | (833      | )      |   | (3,010    | )      |   | (1,042    | )      |   | (180      | )      |   | (67       | )      |   | (2        | )            |   | 23       |    |   | (5,578     | )      |
| **Results        of operations from E&P activities of consolidated        subsidiaries**(b) |   | **760**   |   |   | **604**   |   |   | **1,446** |   |   | **316**   |   |   | **367**   |   |   | **314**   |   |   | **(107**  | **)**        |   | **(103** | **)**        |   | **3,597**  |   |
| **Equity-accounted entities**                                                                   |   |      |   |   |      |   |   |      |   |   |      |   |   |      |   |   |      |   |   |      |         |   |     |         |   |       |   |
| Revenues:                                                                                       |   |      |   |   |      |   |   |      |   |   |      |   |   |      |   |   |      |   |   |      |         |   |     |         |   |       |   |
| - sales to consolidated entities                                                                |   |      |   |   |      |   |   |      |   |   |      |   |   |      |   |   |      |   |   |      |         |   |     |         |   |       |   |
| - sales to        third parties                                                                 |   |      |   |   |      |   |   | 15        |   |   | 45        |   |   |      |   |   | 49        |   |   | 123       |         |   |     |         |   | 232        |   |
| **Total revenues**                                                                              |   |      |   |   |      |   |   | **15**    |   |   | **45**    |   |   |      |   |   | **49**    |   |   | **123**   |         |   |     |         |   | **232**    |   |
| Operations        costs                                                                         |   |      |   |   |      |   |   | (11       | )      |   | (7        | )      |   |      |   |   | (7        | )      |   | (9        | )            |   |     |         |   | (34        | )      |
| Production taxes                                                                                |   |      |   |   |      |   |   | (3        | )      |   |      |   |   |      |   |   |      |   |   | (41       | )            |   |     |         |   | (44        | )      |
| Exploration        expenses                                                                     |   |      |   |   |      |   |   | (6        | )      |   | (1        | )      |   |      |   |   | (8        | )      |   | (26       | )            |   |     |         |   | (41        | )      |
| D.D. & A. and Provision for abandonment                                                     |   |      |   |   |      |   |   | (1        | )      |   | (15       | )      |   |      |   |   | (35       | )      |   | (25       | )            |   |     |         |   | (76        | )      |
| Other        income (expenses)                                                                  |   |      |   |   |      |   |   | 1         |   |   | 6         |   |   |      |   |   | (11       | )      |   | (37       | )            |   |     |         |   | (41        | )      |
| **Pretax income from producing activities**                                                     |   |      |   |   |      |   |   | **(5**    | **)**  |   | **28**    |   |   |      |   |   | **(12**   | **)**  |   | **(15**   | **)**        |   |     |         |   | **(4**     | **)**  |
| Income        taxes                                                                             |   |      |   |   |      |   |   | 4         |   |   | (14       | )      |   |      |   |   | (10       | )      |   | (20       | )            |   |     |         |   | (40        | )      |
| **Results of operations from E&P activities        of equity-accounted entities**(b)        |   |      |   |   |      |   |   | **(1**    | **)**  |   | **14**    |   |   |      |   |   | **(22**   | **)**  |   | **(35**   | **)**        |   |     |         |   | **(44**    | **)**  |
|                                                                                            |   |      |   |   |      |   |   |      |   |   |      |   |   |      |   |   |      |   |   |      |         |   |     |         |   |       |   |
| **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 (expenses)                                                                         |   | (560      | )      |   | 254       |   |   | (392      | )      |   | (219      | )      |   | (161      | )      |   | (138      | )      |   | (45       | )            |   | (25      | )            |   | (1,286     | )      |
| **Pretax        income from producing activities**                                              |   | **1,047** |   |   | **2,237** |   |   | **6,265** |   |   | **2,985** |   |   | **779**   |   |   | **179**   |   |   | **288**   |         |   | **155**  |         |   | **13,935** |   |
| Income taxes                                                                                    |   | (382      | )      |   | (1,296    | )      |   | (4,037    | )      |   | (1,962    | )      |   | (291      | )      |   | (119      | )      |   | (154      | )            |   | (36      | )            |   | (8,277     | )      |
| **Results        of operations from E&P activities of consolidated        subsidiaries**(b) |   | **665**   |   |   | **941**   |   |   | **2,228** |   |   | **1,023** |   |   | **488**   |   |   | **60**    |   |   | **134**   |         |   | **119**  |         |   | **5,658**  |   |
| **Equity-accounted entities**                                                                   |   |      |   |   |      |   |   |      |   |   |      |   |   |      |   |   |      |   |   |      |         |   |     |         |   |       |   |
| Revenues:                                                                                       |   |      |   |   |      |   |   |      |   |   |      |   |   |      |   |   |      |   |   |      |         |   |     |         |   |       |   |
| - sales to consolidated entities                                                                |   |      |   |   |      |   |   |      |   |   |      |   |   |      |   |   |      |   |   |      |         |   |     |         |   |       |   |
| - sales to        third parties                                                                 |   |      |   |   |      |   |   | 16        |   |   | 65        |   |   |      |   |   | 69        |   |   | 206       |         |   |     |         |   | 356        |   |
| **Total revenues**                                                                              |   |      |   |   |      |   |   | **16**    |   |   | **65**    |   |   |      |   |   | **69**    |   |   | **206**   |         |   |     |         |   | **356**    |   |
| Operations        costs                                                                         |   |      |   |   |      |   |   | (16       | )      |   | (9        | )      |   |      |   |   | (7        | )      |   | (9        | )            |   |     |         |   | (41        | )      |
| Production taxes                                                                                |   |      |   |   |      |   |   | (3        | )      |   |      |   |   |      |   |   |      |   |   | (69       | )            |   |     |         |   | (72        | )      |
| Exploration        expenses                                                                     |   |      |   |   |      |   |   | (4        | )      |   | (2        | )      |   |      |   |   | (4        | )      |   | (35       | )            |   |     |         |   | (45        | )      |
| D.D. & A. and Provision for abandonment                                                     |   |      |   |   |      |   |   | (4        | )      |   | (26       | )      |   |      |   |   | (25       | )      |   | (17       | )            |   |     |         |   | (72        | )      |
| Other        income (expenses)                                                                  |   |      |   |   |      |   |   | 6         |   |   | 12        |   |   |      |   |   | (10       | )      |   | (67       | )            |   |     |         |   | (59        | )      |
| **Pretax income from producing activities**                                                     |   |      |   |   |      |   |   | **(5**    | **)**  |   | **40**    |   |   |      |   |   | **23**    |   |   | **9**     |         |   |     |         |   | **67**     |   |
| Income        taxes                                                                             |   |      |   |   |      |   |   | 4         |   |   | (20       | )      |   |      |   |   | (17       | )      |   | (33       | )            |   |     |         |   | (66        | )      |
| **Results of operations from E&P activities        of equity-accounted entities**(b)        |   |      |   |   |      |   |   | **(1**    | **)**  |   | **20**    |   |   |      |   |   | **6**     |   |   | **(24**   | **)**        |   |     |         |   | **1**      |   |
|                                                                                            |   |           |        |   |           |        |   |           |        |   |           |        |   |           |        |   |           |        |   |           |              |   |          |              |   |            |        |

|    |    |                                                                                                                                                                                                                                                                                                                                                                        |
|--------------|--------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| (a)          |    | Includes        asset impairments amounting to euro 576 million in 2009        and euro 123 million in 2010.                                                                                                                                                                                                                                                                     |
| (b)          |    | The        "Successful Effort Method" application would        have led to an increase of result of operations of euro        320 million in 2009 and a decrease of euro 385 million in        2010 for the consolidated subsidiaries and an increase of        euro 26 million in 2009 and a decrease of euro 5 million        in 2010 for equity-accounted entities. |

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

| **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 (expenses)                                                                         |   | (562      | )      |   | 142       |   |   | (508      | )      |   | (314      | )      |   | (160      | )      |   | (151      | )      |   | 125       |   |   | 8       |   |   | (1,420     | )      |
| **Pretax        income from producing activities**                                              |   | **1,848** |   |   | **2,968** |   |   | **4,919** |   |   | **3,941** |   |   | **1,230** |   |   | **377**   |   |   | **490**   |   |   | **196** |   |   | **15,969** |   |
| Income taxes                                                                                    |   | (761      | )      |   | (2,043    | )      |   | (3,013    | )      |   | (2,680    | )      |   | (413      | )      |   | (157      | )      |   | (184      | )      |   | (120    | )      |   | (9,371     | )      |
| **Results        of operations from E&P activities of consolidated        subsidiaries**(b) |   | **1,087** |   |   | **925**   |   |   | **1,906** |   |   | **1,261** |   |   | **817**   |   |   | **220**   |   |   | **306**   |   |   | **76**  |   |   | **6,598**  |   |
| **Equity-accounted entities**                                                                   |   |      |   |   |      |   |   |      |   |   |      |   |   |      |   |   |      |   |   |      |   |   |    |   |   |       |   |
| Revenues:                                                                                       |   |      |   |   |      |   |   |      |   |   |      |   |   |      |   |   |      |   |   |      |   |   |    |   |   |       |   |
| - sales to consolidated entities                                                                |   |      |   |   |      |   |   |      |   |   |      |   |   |      |   |   |      |   |   |      |   |   |    |   |   |       |   |
| - sales to        third parties                                                                 |   |      |   |   | 2         |   |   | 19        |   |   | 93        |   |   |      |   |   | 89        |   |   | 262       |   |   |    |   |   | 465        |   |
| **Total revenues**                                                                              |   |      |   |   | **2**     |   |   | **19**    |   |   | **93**    |   |   |      |   |   | **89**    |   |   | **262**   |   |   |    |   |   | **465**    |   |
| Operations        costs                                                                         |   |      |   |   |      |   |   | (11       | )      |   | (10       | )      |   |      |   |   | (9        | )      |   | (17       | )      |   |    |   |   | (47        | )      |
| Production taxes                                                                                |   |      |   |   | (1        | )      |   | (4        | )      |   |      |   |   |      |   |   |      |   |   | (113      | )      |   |    |   |   | (118       | )      |
| Exploration        expenses                                                                     |   |      |   |   | (6        | )      |   |      |   |   | (5        | )      |   |      |   |   | (8        | )      |   | (9        | )      |   |    |   |   | (28        | )      |
| D.D. & A. and Provision for abandonment                                                     |   |      |   |   |      |   |   | (1        | )      |   | (24       | )      |   |      |   |   | (23       | )      |   | (21       | )      |   |    |   |   | (69        | )      |
| Other        income (expenses)                                                                  |   |      |   |   | (4        | )      |   | 6         |   |   | 11        |   |   |      |   |   | (20       | )      |   | (51       | )      |   |    |   |   | (58        | )      |
| **Pretax income from producing activities**                                                     |   |      |   |   | **(9**    | **)**  |   | **9**     |   |   | **65**    |   |   |      |   |   | **29**    |   |   | **51**    |   |   |    |   |   | **145**    |   |
| Income        taxes                                                                             |   |      |   |   |      |   |   | (4        | )      |   | (35       | )      |   |      |   |   | (32       | )      |   | (4        | )      |   |    |   |   | (75        | )      |
| **Results of operations from E&P activities        of equity-accounted entities**(b)        |   |      |   |   | **(9**    | **)**  |   | **5**     |   |   | **30**    |   |   |      |   |   | **(3**    | **)**  |   | **47**    |   |   |    |   |   | **70**     |   |
|                                                                                            |   |           |        |   |           |        |   |           |        |   |           |        |   |           |        |   |           |        |   |           |        |   |         |        |   |            |        |

|    |    |                                                                                                                                                                                                                                                                             |
|--------------|--------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| (a)          |    | Includes        asset impairments amounting to euro 189 million in 2011.                                                                                                                                                                                                              |
| (b)          |    | The        "Successful Effort Method" application would        have led to an increase of result of operations of euro        118 million in 2011 for the consolidated subsidiaries and        an increase of euro 20 million in 2011 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 geoscience 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 un-weighted arithmetic average of thefirst-day-of-the-month price for each month within such period,unless prices are defined by contractual arrangements, excludingescalations based upon future conditions. In 2011, the average price for themarker Brent 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. Since 1991, Eni has requestedqualified independent oil engineering companies to carry out anindependent evaluation18 of part of its 

----

| (18) |  i  | From 1991 to        2002 DeGolyer and McNaughton, from 2003 also Ryder Scott. |
|------|---------------|-------------------------------------------------------------------------------|

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proved reserves on a rotational basis. The description of qualifications of theperson primarily responsible of the reserve audit is included inthe third party audit report19.

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 2011, Ryder Scott Companyand DeGolyer and MacNaughton19 provided an independentevaluation of almost 32% of Eni’s total proved reserves asof December 31, 201120, confirming, as in previousyears, the reasonableness of Eni’s internal evaluations. Inthe three year period from 2009 to 2011, 85% of Eni’s totalproved reserves were subject to independent evaluation. As ofDecember 31, 2011, the principal property not subjected toindependent evaluation in the last three years is Kashagan(Kazakhstan). Eni operates under Production Sharing Agreements,PSAs, in several of the foreign jurisdictions where it has oiland gas exploration and production activities. Reserves of oiland natural gas to which Eni is entitled under PSA arrangementsare shown 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 57%, 55% and 49% of total provedreserves as of December 31, 2009, 2010 and 2011, respectively, onan oil-equivalent basis. Similar effects as PSAs apply to serviceand "buy-back" contracts; proved reserves associatedwith such contracts represented 2%, 3% and 1% of total provedreserves on an oil-equivalent basis as of December 31, 2009, 2010and 2011, respectively. Oil and gas reserve quantities include:(i) oil and natural gas quantities in excess of cost recoverywhich the company has an obligation to purchase under certainPSAs with governments or authorities, whereby the company servesas producer of reserves. Reserve volumes associated with oil andgas deriving from such obligation represent 0.3%, 0.6% and 0.8%of total proved reserves as of December 31, 2009, 2010 and 2011,respectively, on an oil-equivalent basis; (ii) volumes of naturalgas used for own consumption; (iii) the quantities ofhydrocarbons related to the Angola LNG plant; and (iv) volumes ofnatural gas held in certain Eni storage fields in Italy. Provedreserves attributable to these fields include: (a) the residualnatural gas volumes of the reservoirs; and (b) natural gasvolumes from other Eni fields input into these reservoirs insubsequent periods. Proved reserves do not include volumes ownedby or acquired from third parties. Gas withdrawn from storage isproduced and thereby removed from proved reserves when sold.Numerous uncertainties are inherent in estimating quantities ofproved reserves, in projecting future productions and developmentexpenditures. The accuracy of any reserve estimate is a functionof the quality of available data and engineering and geologicalinterpretation and evaluation. The results of drilling, testingand production after the date of the estimate may requiresubstantial upward or downward revisions. In addition, changes inoil and natural gas prices have an effect on the quantities ofEni’s proved reserves since estimates of reserves are basedon prices and costs relevant to the date when such estimates aremade. Consequently, the evaluation of reserves could alsosignificantly differ from actual oil and natural gas volumes thatwill 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, 2009, 2010 and 2011.

 

 

 

 

 

 

 

----

| (19) |   i | The reports        of independent engineers are available on Eni website        eni.com, section Publications /Annual Report 2011. |
|------|---------------|------------------------------------------------------------------------------------------------------------------------------------|
| (20) |   i | Including        reserves of joint ventures and affiliates.                                                                        |

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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**        (a) |   | **America** |   | **Australia and Oceania** |   | **Total** |
|---------|--------|-----------|--------|--------------------|--------|------------------|--------|------------------------|--------|----------------|--------|-----------------------------|--------|-------------|--------|---------------------------|--------|-----------|
|    |   |           |   |                    |   |                  |   |                        |   |                |   |                             |   |             |   |                           |   |           |

| **2009**                                                              |   |    |   |   |    |   |   |    |   |   |    |   |   |    |   |   |    |   |   |    |   |   |   |   |   |      |   |
|-----------------------------------------------------------------------|--------|---------|--------|--------|---------|--------|--------|---------|--------|--------|---------|--------|--------|---------|--------|--------|---------|--------|--------|---------|--------|--------|--------|--------|--------|-----------|--------|
| **Reserves        of consolidated subsidiaries at December 31, 2008** |   | **186** |   |   | **277** |   |   | **823** |   |   | **783** |   |   | **911** |   |   | **106** |   |   | **131** |   |   | **26** |   |   | **3,243** |   |
| *of which: developed*                                                 |   | *111*   |   |   | *222*   |   |   | *613*   |   |   | *576*   |   |   | *298*   |   |   | *92*    |   |   | *74*    |   |   | *23*   |   |   | *2,009*   |   |
| *of which:**undeveloped*                                              |   | *75*    |   |   | *55*    |   |   | *210*   |   |   | *207*   |   |   | *613*   |   |   | *14*    |   |   | *57*    |   |   | *3*    |   |   | *1,234*   |   |
| Purchase of Minerals in Place                                         |   |    |   |   |    |   |   |    |   |   | 2       |   |   |    |   |   |    |   |   |    |   |   |   |   |   | 2         |   |
| Revisions        of Previous Estimates                                |   | 57      |   |   | 40      |   |   | 129     |   |   | 78      |   |   | (36     | )      |   | (35     | )      |   | 36      |   |   | 1      |   |   | 270       |   |
| Improved Recovery                                                     |   |    |   |   | 8       |   |   | 10      |   |   | 15      |   |   |    |   |   |    |   |   |    |   |   |   |   |   | 33        |   |
| Extensions        and Discoveries                                     |   | 10      |   |   | 74      |   |   | 38      |   |   | 5       |   |   |    |   |   | 44      |   |   | 12      |   |   | 8      |   |   | 191       |   |
| Production                                                            |   | (20     | )      |   | (48     | )      |   | (105    | )      |   | (113    | )      |   | (26     | )      |   | (21     | )      |   | (26     | )      |   | (3     | )      |   | (362      | )      |
| Sales of        Minerals in Place                                     |   |    |   |   |    |   |   |    |   |   |    |   |   |    |   |   |    |   |   |    |   |   |   |   |   |      |   |
| **Reserves of consolidated subsidiaries at        December 31, 2009** |   | **233** |   |   | **351** |   |   | **895** |   |   | **770** |   |   | **849** |   |   | **94**  |   |   | **153** |   |   | **32** |   |   | **3,377** |   |
| **Reserves        of equity-accounted entities at December 31, 2008** |   |    |   |   |    |   |   | **14**  |   |   | **8**   |   |   |    |   |   | **101** |   |   | **19**  |   |   |   |   |   | **142**   |   |
| *of which: developed*                                                 |   |    |   |   |    |   |   | *11*    |   |   | *4*     |   |   |    |   |   | *11*    |   |   | *7*     |   |   |   |   |   | *33*      |   |
| *of which:**undeveloped*                                              |   |    |   |   |    |   |   | *3*     |   |   | *4*     |   |   |    |   |   | *90*    |   |   | *12*    |   |   |   |   |   | *109*     |   |
| Purchase of Minerals in Place                                         |   |    |   |   |    |   |   |    |   |   |    |   |   |    |   |   |    |   |   |    |   |   |   |   |   |      |   |
| Revisions        of Previous Estimates                                |   |    |   |   |    |   |   |    |   |   |    |   |   |    |   |   |    |   |   |    |   |   |   |   |   |      |   |
| Improved Recovery                                                     |   |    |   |   |    |   |   |    |   |   |    |   |   |    |   |   |    |   |   |    |   |   |   |   |   |      |   |
| Extensions        and Discoveries                                     |   |    |   |   |    |   |   | 1       |   |   |    |   |   |    |   |   |    |   |   |    |   |   |   |   |   | 1         |   |
| Production                                                            |   |    |   |   |    |   |   | (2      | )      |   | (1      | )      |   |    |   |   |    |   |   | (3      | )      |   |   |   |   | (6        | )      |
| Sales of        Minerals in Place                                     |   |    |   |   |    |   |   |    |   |   |    |   |   |    |   |   | (51     | )      |   |    |   |   |   |   |   | (51       | )      |
| **Reserves of equity-accounted entities at        December 31, 2009** |   |    |   |   |    |   |   | **13**  |   |   | **7**   |   |   |    |   |   | **50**  |   |   | **16**  |   |   |   |   |   | **86**    |   |
| **Reserves        at December 31, 2009**                              |   | **233** |   |   | **351** |   |   | **908** |   |   | **777** |   |   | **849** |   |   | **144** |   |   | **169** |   |   | **32** |   |   | **3,463** |   |
| **Developed**                                                         |   | **141** |   |   | **218** |   |   | **669** |   |   | **548** |   |   | **291** |   |   | **52**  |   |   | **93**  |   |   | **23** |   |   | **2,035** |   |
| Consolidated        subsidiaries                                      |   | 141     |   |   | 218     |   |   | 659     |   |   | 544     |   |   | 291     |   |   | 45      |   |   | 80      |   |   | 23     |   |   | 2,001     |   |
| Equity-accounted entities                                             |   |    |   |   |    |   |   | 10      |   |   | 4       |   |   |    |   |   | 7       |   |   | 13      |   |   |   |   |   | 34        |   |
| **Undeveloped**                                                       |   | **92**  |   |   | **133** |   |   | **239** |   |   | **229** |   |   | **558** |   |   | **92**  |   |   | **76**  |   |   | **9**  |   |   | **1,428** |   |
| Consolidated subsidiaries                                             |   | 92      |   |   | 133     |   |   | 236     |   |   | 226     |   |   | 558     |   |   | 49      |   |   | 73      |   |   | 9      |   |   | 1,376     |   |
| Equity-accounted        entities                                      |   |    |   |   |    |   |   | 3       |   |   | 3       |   |   |    |   |   | 43      |   |   | 3       |   |   |   |   |   | 52        |   |
| **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 Previous Estimates                                |   | 38      |   |   | 17      |   |   | 178     |   |   | 75      |   |   | (37     | )      |   | 62      |   |   | 2       |   |   |   |   |   | 335       |   |
| Improved Recovery                                                     |   |    |   |   |    |   |   | 1       |   |   | 1       |   |   |    |   |   |    |   |   |    |   |   |   |   |   | 2         |   |
| Extensions        and Discoveries                                     |   |    |   |   | 25      |   |   | 13      |   |   | 22      |   |   |    |   |   |    |   |   | 1       |   |   |   |   |   | 61        |   |
| Production                                                            |   | (23     | )      |   | (44     | )      |   | (108    | )      |   | (116    | )      |   | (24     | )      |   | (17     | )      |   | (22     | )      |   | (3     | )      |   | (357      | )      |
| Sales of        Minerals in Place                                     |   |    |   |   |    |   |   | (1      | )      |   | (2      | )      |   |    |   |   |    |   |   |    |   |   |   |   |   | (3        | )      |
| **Reserves 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 Previous Estimates                                |   |    |   |   |    |   |   | 8       |   |   |    |   |   |    |   |   | (6      | )      |   | (2      | )      |   |   |   |   |      |   |
| Improved Recovery                                                     |   |    |   |   |    |   |   |    |   |   |    |   |   |    |   |   |    |   |   | 12      |   |   |   |   |   | 12        |   |
| Extensions        and Discoveries                                     |   |    |   |   |    |   |   |    |   |   |    |   |   |    |   |   |    |   |   | 117     |   |   |   |   |   | 117       |   |
| Production                                                            |   |    |   |   |    |   |   | (2      | )      |   | (1      | )      |   |    |   |   |    |   |   | (4      | )      |   |   |   |   | (7        | )      |
| Sales of        Minerals in Place                                     |   |    |   |   |    |   |   |    |   |   |    |   |   |    |   |   |    |   |   |    |   |   |   |   |   |      |   |
| **Reserves 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       |   |
|                                                                  |   |         |        |   |         |        |   |         |        |   |         |        |   |         |        |   |         |        |   |         |        |   |        |        |   |           |        |

|    |    |                                                                                                                                                                                                                          |
|--------------|--------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| (a)          |    | Proved        reserves of equity-accounted entities at year end 2008        include 60% of the three former Yukos companies. From        2009, after the 51% call option exercised by Gazprom,        values are reported at 29.4% |

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##### Table of Contents

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

| **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 Previous Estimates                                |   | 34      |   |   | 58      |   |   | 10      |   |   | 14      |   |   | (112    | )      |   | (20     | )      |   | 1       |   |   |   |   |   | (15       | )      |
| Improved Recovery                                                     |   |    |   |   | 2       |   |   | 2       |   |   | 2       |   |   |    |   |   |    |   |   |    |   |   |   |   |   | 6         |   |
| Extensions        and Discoveries                                     |   |    |   |   | 9       |   |   | 2       |   |   | 11      |   |   |    |   |   |    |   |   | 17      |   |   |   |   |   | 39        |   |
| Production                                                            |   | (23     | )      |   | (44     | )      |   | (75     | )      |   | (100    | )      |   | (23     | )      |   | (13     | )      |   | (20     | )      |   | (4     | )      |   | (302      | )      |
| Sales of        Minerals in Place                                     |   |    |   |   | (2      | )      |   |    |   |   | (7      | )      |   |    |   |   |    |   |   |    |   |   |   |   |   | (9        | )      |
| **Reserves 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

*Natural gas*

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

| **2009**                                                              |   |      |   |   |      |   |   |      |   |   |      |   |   |      |   |   |      |   |   |    |   |   |    |   |   |       |   |
|-----------------------------------------------------------------------|--------|-----------|--------|--------|-----------|--------|--------|-----------|--------|--------|-----------|--------|--------|-----------|--------|--------|-----------|--------|--------|---------|--------|--------|---------|--------|--------|------------|--------|
| **Reserves        of consolidated subsidiaries at December 31, 2008** |   | **2,844** |   |   | **1,421** |   |   | **6,311** |   |   | **2,084** |   |   | **2,437** |   |   | **911**   |   |   | **600** |   |   | **606** |   |   | **17,214** |   |
| *of which: developed*                                                 |   | *2,031*   |   |   | *1,122*   |   |   | *3,537*   |   |   | *1,443*   |   |   | *2,005*   |   |   | *439*     |   |   | *340*   |   |   | *221*   |   |   | *11,138*   |   |
| *of which:* *undeveloped*                                        |   | *813*     |   |   | *299*     |   |   | *2,774*   |   |   | *641*     |   |   | *432*     |   |   | *472*     |   |   | *260*   |   |   | *385*   |   |   | *6,076*    |   |
| Purchase of Minerals in Place                                         |   |      |   |   |      |   |   |      |   |   | 1         |   |   |      |   |   |      |   |   | 136     |   |   |    |   |   | 137        |   |
| Revisions        of Previous Estimates                                |   | 97        |   |   | 149       |   |   | (309      | )      |   | 142       |   |   | (204      | )      |   | 52        |   |   | 43      |   |   | (17     | )      |   | (47        | )      |
| Improved Recovery                                                     |   |      |   |   | 25        |   |   |      |   |   |      |   |   |      |   |   |      |   |   |    |   |   |    |   |   | 25         |   |
| Extensions        and Discoveries                                     |   | 1         |   |   | 26        |   |   | 479       |   |   |      |   |   |      |   |   | 2         |   |   | 7       |   |   | 4       |   |   | 519        |   |
| Production                                                            |   | (238      | )      |   | (239      | )      |   | (587      | )      |   | (100      | )      |   | (94       | )      |   | (151      | )      |   | (155    | )      |   | (18     | )      |   | (1,582     | )      |
| Sales of        Minerals in Place                                     |   |      |   |   | (2        | )      |   |      |   |   |      |   |   |      |   |   |      |   |   | (2      | )      |   |    |   |   | (4         | )      |
| **Reserves of consolidated subsidiaries at        December 31, 2009** |   | **2,704** |   |   | **1,380** |   |   | **5,894** |   |   | **2,127** |   |   | **2,139** |   |   | **814**   |   |   | **629** |   |   | **575** |   |   | **16,262** |   |
| **Reserves        of equity-accounted entities at December 31, 2008** |   |      |   |   |      |   |   | **13**    |   |   | **2**     |   |   |      |   |   | **3,000** |   |   |    |   |   |    |   |   | **3,015**  |   |
| *of which: developed*                                                 |   |      |   |   |      |   |   | *11*      |   |   | *1*       |   |   |      |   |   | *408*     |   |   |    |   |   |    |   |   | *420*      |   |
| *of which:* *undeveloped*                                        |   |      |   |   |      |   |   | *2*       |   |   | *1*       |   |   |      |   |   | *2,592*   |   |   |    |   |   |    |   |   | *2,595*    |   |
| Purchase of Minerals in Place                                         |   |      |   |   |      |   |   |      |   |   |      |   |   |      |   |   |      |   |   |    |   |   |    |   |   |       |   |
| Revisions        of Previous Estimates                                |   |      |   |   |      |   |   | 3         |   |   | 3         |   |   |      |   |   | 10        |   |   | 2       |   |   |    |   |   | 18         |   |
| Improved Recovery                                                     |   |      |   |   |      |   |   |      |   |   |      |   |   |      |   |   |      |   |   |    |   |   |    |   |   |       |   |
| Extensions        and Discoveries                                     |   |      |   |   |      |   |   |      |   |   | 80        |   |   |      |   |   |      |   |   |    |   |   |    |   |   | 80         |   |
| Production                                                            |   |      |   |   |      |   |   | (2        | )      |   |      |   |   |      |   |   | (12       | )      |   |    |   |   |    |   |   | (14        | )      |
| Sales of        Minerals in Place                                     |   |      |   |   |      |   |   |      |   |   |      |   |   |      |   |   | (1,511    | )      |   |    |   |   |    |   |   | (1,511     | )      |
| **Reserves of equity-accounted entities at        December 31, 2009** |   |      |   |   |      |   |   | **14**    |   |   | **85**    |   |   |      |   |   | **1,487** |   |   | **2**   |   |   |    |   |   | **1,588**  |   |
| **Reserves        at December 31, 2009**                              |   | **2,704** |   |   | **1,380** |   |   | **5,908** |   |   | **2,212** |   |   | **2,139** |   |   | **2,301** |   |   | **631** |   |   | **575** |   |   | **17,850** |   |
| **Developed**                                                         |   | **2,001** |   |   | **1,231** |   |   | **3,498** |   |   | **1,468** |   |   | **1,859** |   |   | **756**   |   |   | **506** |   |   | **565** |   |   | **11,884** |   |
| Consolidated        subsidiaries                                      |   | 2,001     |   |   | 1,231     |   |   | 3,486     |   |   | 1,463     |   |   | 1,859     |   |   | 539       |   |   | 506     |   |   | 565     |   |   | 11,650     |   |
| Equity-accounted entities                                             |   |      |   |   |      |   |   | 12        |   |   | 5         |   |   |      |   |   | 217       |   |   |    |   |   |    |   |   | 234        |   |
| **Undeveloped**                                                       |   | **703**   |   |   | **149**   |   |   | **2,410** |   |   | **744**   |   |   | **280**   |   |   | **1,545** |   |   | **125** |   |   | **10**  |   |   | **5,966**  |   |
| Consolidated subsidiaries                                             |   | 703       |   |   | 149       |   |   | 2,408     |   |   | 664       |   |   | 280       |   |   | 275       |   |   | 123     |   |   | 10      |   |   | 4,612      |   |
| Equity-accounted        entities                                      |   |      |   |   |      |   |   | 2         |   |   | 80        |   |   |      |   |   | 1,270     |   |   | 2       |   |   |    |   |   | 1,354      |   |
| **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)          |    | Including,        approximately 746, 769 and 767 BCF of natural gas held in        storage at December 31, 2008, 2009 and 2010,        respectively.                                                                                |
| (b)          |    | Proved        reserves of equity-accounted entities at year end 2008        include 60% of the three former Yukos companies. From        2009, after the 51% call option exercised by Gazprom,        values are reported at 29.4%. |

 

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##### Table of Contents

| (BCF)  |   | **Italy******(a) |   | **Rest of Europe** |   | **North Africa** |   | **Sub-Saharan Africa** |   | **Kazakhstan** |   | **Rest of Asia** |   | **America** |   | **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      |   |
|                                                                  |   |           |        |   |           |        |   |           |        |   |           |        |   |           |        |   |           |        |   |           |        |   |         |        |   |            |        |

|    |    |                                                                                                                          |
|--------------|--------------|------------------------------------------------------------------------------------------------------------------------------------|
| (a)          |    | Including,        approximately 767 and 767 BCF of natural gas held in        storage at December 31, 2010 and 2011, respectively. |

*Standardized measure of discounted future net cash flows*Estimated future cash inflows represent the revenues thatwould be received from production and are determined by applyingyear-end prices of oil and gas for the year ended December 31,2008, and the average prices during the years ended December 31,2009, 2010 and 2011 to estimated future production of provedreserves. 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.

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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** |   | **America** |   | **Australia and Oceania** |   | **Total** |
|-----------------------|--------|-----------|--------|--------------------|--------|------------------|--------|------------------------|--------|----------------|--------|------------------|--------|-------------|--------|---------------------------|--------|-----------|
|                  |   |           |   |                    |   |                  |   |                        |   |                |   |                  |   |             |   |                           |   |           |

| **December 31, 2009**                                                                                                        |   |      |   |   |      |   |   |       |   |   |      |   |   |      |   |   |      |   |   |      |   |   |      |   |   |       |   |
|------------------------------------------------------------------------------------------------------------------------------|--------|-----------|--------|--------|-----------|--------|--------|------------|--------|--------|-----------|--------|--------|-----------|--------|--------|-----------|--------|--------|-----------|--------|--------|-----------|--------|--------|------------|--------|
| Future        cash inflows                                                                                                   |   | 26,243    |   |   | 22,057    |   |   | 59,413     |   |   | 33,676    |   |   | 30,273    |   |   | 5,680     |   |   | 7,088     |   |   | 2,973     |   |   | 187,403    |   |
| Future production costs                                                                                                      |   | (4,732    | )      |   | (6,215    | )      |   | (7,771     | )      |   | (9,737    | )      |   | (6,545    | )      |   | (1,427    | )      |   | (1,797    | )      |   | (529      | )      |   | (38,753    | )      |
| Future        development and abandonment costs                                                                              |   | (5,143    | )      |   | (5,375    | )      |   | (8,618     | )      |   | (5,134    | )      |   | (4,345    | )      |   | (1,409    | )      |   | (1,897    | )      |   | (214      | )      |   | (32,135    | )      |
| **Future net inflow before income tax**                                                                                      |   | 16,368    |   |   | 10,467    |   |   | 43,024     |   |   | 18,805    |   |   | 19,383    |   |   | 2,844     |   |   | 3,394     |   |   | 2,230     |   |   | 116,515    |   |
| Future        income tax                                                                                                     |   | (5,263    | )      |   | (6,621    | )      |   | (24,230    | )      |   | (9,894    | )      |   | (4,827    | )      |   | (636      | )      |   | (694      | )      |   | (563      | )      |   | (52,728    | )      |
| **Future net cash flows**                                                                                                    |   | 11,105    |   |   | 3,846     |   |   | 18,794     |   |   | 8,911     |   |   | 14,556    |   |   | 2,208     |   |   | 2,700     |   |   | 1,667     |   |   | 63,787     |   |
| 10%        discount factor                                                                                                   |   | (5,868    | )      |   | (1,455    | )      |   | (9,160     | )      |   | (3,102    | )      |   | (10,249   | )      |   | (520      | )      |   | (1,162    | )      |   | (771      | )      |   | (32,287    | )      |
| **Standardized measure of discounted future net        cash flows of consolidated subsidiaries at December 31,        2009** |   | **5,237** |   |   | **2,391** |   |   | **9,634**  |   |   | **5,809** |   |   | **4,307** |   |   | **1,688** |   |   | **1,538** |   |   | **896**   |   |   | **31,500** |   |
| Future        cash inflows                                                                                                   |   |      |   |   |      |   |   | 250        |   |   | 427       |   |   |      |   |   | 2,389     |   |   | 652       |   |   |      |   |   | 3,718      |   |
| Future production costs                                                                                                      |   |      |   |   |      |   |   | (147       | )      |   | (70       | )      |   |      |   |   | (773      | )      |   | (261      | )      |   |      |   |   | (1,251     | )      |
| Future        development and abandonment costs                                                                              |   |      |   |   |      |   |   | (21        | )      |   | (137      | )      |   |      |   |   | (970      | )      |   | (40       | )      |   |      |   |   | (1,168     | )      |
| **Future net inflow before income tax**                                                                                      |   |      |   |   |      |   |   | 82         |   |   | 220       |   |   |      |   |   | 646       |   |   | 351       |   |   |      |   |   | 1,299      |   |
| Future        income tax                                                                                                     |   |      |   |   |      |   |   | (1         | )      |   | (45       | )      |   |      |   |   | (260      | )      |   | (126      | )      |   |      |   |   | (432       | )      |
| **Future net cash flows**                                                                                                    |   |      |   |   |      |   |   | 81         |   |   | 175       |   |   |      |   |   | 386       |   |   | 225       |   |   |      |   |   | 867        |   |
| 10%        discount factor                                                                                                   |   |      |   |   |      |   |   | (28        | )      |   | (80       | )      |   |      |   |   | (420      | )      |   | (82       | )      |   |      |   |   | (610       | )      |
| **Standardized measure of discounted future net        cash flows of equity-accounted entities at December 31,        2009** |   |      |   |   |      |   |   | **53**     |   |   | **95**    |   |   |      |   |   | **(34**   | **)**  |   | **143**   |   |   |      |   |   | **257**    |   |
| **Total        consolidated subsidiaries and equity-accounted entities        at December 31, 2009**                         |   | **5,237** |   |   | **2,391** |   |   | **9,687**  |   |   | **5,904** |   |   | **4,307** |   |   | **1,654** |   |   | **1,681** |   |   | **896**   |   |   | **31,757** |   |
| **December 31, 2010**                                                                                                        |   |      |   |   |      |   |   |       |   |   |      |   |   |      |   |   |      |   |   |      |   |   |      |   |   |       |   |
| 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** |   |
| 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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| (euro        million) |   | **Italy** |   | **Rest of Europe** |   | **North Africa** |   | **Sub-Saharan Africa** |   | **Kazakhstan** |   | **Rest of Asia** |   | **America** |   | **Australia and Oceania** |   | **Total** |
|-----------------------|--------|-----------|--------|--------------------|--------|------------------|--------|------------------------|--------|----------------|--------|------------------|--------|-------------|--------|---------------------------|--------|-----------|
|                  |   |           |   |                    |   |                  |   |                        |   |                |   |                  |   |             |   |                           |   |           |

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

 

 

 

 

 

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*Changes in standardized measure of discounted future netcash flows*Changes in standardized measure of discounted future net cashflows for the years ended December 31, 2009, 2010 and 2011, areas follows:

| (euro        million) |   | **Consolidated        subsidiaries** |   | **Equity-accounted        entities** |   | **Total** |
|-----------------------|--------|--------------------------------------|--------|--------------------------------------|--------|-----------|
|                  |   |                                      |   |                                      |   |           |

| **Standardized measure of discounted future net        cash flows at December 31, 2008**               |   | **31,452** |   |   | **38**    |   |   | **31,490** |   |
|--------------------------------------------------------------------------------------------------------|--------|------------|--------|--------|-----------|--------|--------|------------|--------|
| Increase        (Decrease):                                                                            |   |       |   |   |      |   |   |       |   |
| - sales, net of production costs                                                                       |   | (17,752    | )      |   | (154      | )      |   | (17,906    | )      |
| - net        changes in sales and transfer prices, net of production        costs                      |   | 4,515      |   |   | 286       |   |   | 4,801      |   |
| - extensions, discoveries and improved recovery,        net of future production and development costs |   | 3,587      |   |   | 22        |   |   | 3,609      |   |
| - changes        in estimated future development and abandonment costs                                 |   | (9,915     | )      |   | (157      | )      |   | (10,072    | )      |
| - development costs incurred during the period        that reduced future development costs            |   | 7,401      |   |   | 208       |   |   | 7,609      |   |
| -        revisions of quantity estimates                                                               |   | 4,686      |   |   | (113      | )      |   | 4,573      |   |
| - accretion of discount                                                                                |   | 6,112      |   |   | 29        |   |   | 6,141      |   |
| - net        change in income taxes                                                                    |   | 674        |   |   | (67       | )      |   | 607        |   |
| - purchase of reserves in-place                                                                        |   | 161        |   |   |      |   |   | 161        |   |
| - sale of        reserves in-place                                                                     |   | (7         | )      |   | 81        |   |   | 74         |   |
| - changes in production rates (timing) and other                                                       |   | 586        |   |   | 84        |   |   | 670        |   |
| **Net        increase (decrease)**                                                                     |   | **48**     |   |   | **219**   |   |   | **267**    |   |
| **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** |   |
|                                                                                                   |   |            |        |   |           |        |   |            |        |

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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 5, 2012

 

 

 

 

 

 

 

| Eni SpA                                                  |
|----------------------------------------------------------|
|                                                     |
| /s/ANTONIO CRISTODORO                                    |
|                                                          |
|                                                     |
| Antonio Cristodoro                                       |
| Title: Head of Corporate Secretary's        Staff Office |

 

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**EXHIBIT 1**

**Eni SpA By-laws**

> 
***Part I - Establishment - Name - Registered    Office and Duration of the Company***

| **ARTICLE 1** |
|---------------|
| 1.1           |   | "Eni S.p.A."        resulting from the transformation of Ente Nazionale        Idrocarburi, a public law agency, established by Law No.        136 of February 10, 1953 is regulated by these By-laws. |
| 1.2           |   | The Company name may be        written with an upper case or lower case initial. |
|          |   |   |
| **ARTICLE 2** |
| 2.1           |   | The registered head office        of the Company is located in Rome, Italy and the Company        has two branches in San Donato Milanese (MI). |
| 2.2           |   | Main representative offices,        affiliates and branches may be established and/or wound        up in Italy or abroad in compliance with the law. |
|          |   |   |
| **ARTICLE 3** |
| 3.1           |   | The Company is expected to        exist until 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 management, by way of        shareholdings in companies, agencies or businesses, of        activities in the field of hydrocarbons and natural        gases, such as exploration and development of hydrocarbon        fields, construction and operation of pipelines for        transporting the same, processing, transformation,        storage, utilisation and trade of hydrocarbons and        natural vapours, all in respect of concessions provided        by law. |
|                 |   | The Company also has the        object of direct and/or indirect management, by way of        shareholdings in companies, agencies or businesses, of        activities in the fields of chemicals, nuclear fuels,        geothermy, renewable energy sources and energy in        general, in the sector of engineering and construction of        industrial plants, in the mining sector, in the        metallurgy sector, in the textile machinery sector, in        the water sector, including derivation, drinking water,        purification, distribution and reuse of waters; in the        sector of environmental protection and treatment and        disposal of waste, as well as in every other business        activity that is instrumental, supplemental or        complementary with the aforementioned activities. |
|                 |   | The Company also has the        purpose of undertaking and managing the technical and        financial co-ordination of subsidiaries and affiliated        companies and the provision of 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        initiate transactions involving real estate, moveable        goods, trade and commerce, industry, finance and banking        asset and liability transactions, and any action that is        in any way connected with the corporate purposes with the        exception of public fund raising and the performance of        investment services as regulated by Legislative Decree        No. 58 of February 24, 1998. |
|                 |   | The Company may take        shareholdings and interests in other companies or        businesses with similar, comparable or complementary        purposes to its own or those of companies in which it has        holdings, either in Italy or abroad, and it may provide        real and or personal guarantees for its own and        others’ obligations, especially performance bonds. |

> 
***Part III - Capital - Shareholdings -    Bonds***

| **ARTICLE        5** |
|----------------------|
| 5.1                  |   | The Company capital is        4,005,358,876.00 (four billion five million three hundred        and fifty-eight thousand eight hundred and seventy-six)        euro, represented by 4,005,358,876 (four billion five        million three hundred and fifty-eight thousand eight        hundred and seventy-six) ordinary shares with a nominal        value of 1 (one) euro each. |
| 5.2                  |   | Shares may not be split up        and each share is entitled to one vote. |
| 5.3                  |   | The fact of being a        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, converted with        amendments into Law No. 474 of July 30, 1994, noone, in        any capacity, may own Company shares that entail a        holding of more than 3 per cent. of voting share capital. |
|                 |   | Such maximum shareholding        limit is calculated by taking into account the aggregate        shareholding held by the controlling entity, either a        physical or legal person or Company; its directly or        indirectly controlled entities, as well as entities        controlled by the same controlling entity; affiliated        entities as well as people related to the second degree        by blood or marriage, as long as they are not legally        separated spouses. |

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|   |   | Control exists,        with reference also to entities other than companies, in        the cases envisaged by Article 2359, paragraphs 1 and 2        of the Civil Code.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |
|--------|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |   | Affiliation        exists in the case set forth in Article 2359, paragraph        3, of the Civil Code as well as between entities that        directly or indirectly, by way of subsidiaries, other        than those managing investment funds, are bound, even        with third parties, in agreements regarding the exercise        of voting rights or the transfer of shares or portions of        third companies or, in any event, in agreements or pacts        as per Article 122 of Legislative Decree No. 58 of        February 24, 1998 regarding third party companies if said        agreements or pacts concern at least 10 per cent. of the        voting capital, if they are listed companies, or 20 per        cent. if they are unlisted companies. |
|   |   | The        aforementioned shareholding limit (3 per cent.) is        calculated by taking into account shares held by any        fiduciary nominee or intermediary.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |
|   |   | Any voting        rights and any other non-financial rights attributable to        voting capital held or controlled in excess of the        maximum limit indicated in the foregoing, cannot be        exercised and the voting rights of each entity to whom        such limit on shareholding applies are reduced in        proportion, unless otherwise jointly provided in advance        by the parties involved. In the event that shares        exceeding this limit are voted, any shareholders’        resolution adopted pursuant to such a vote may be        challenged pursuant to Article 2377 of the Civil Code, if        the required majority had not been reached without the        votes exceeding the aforementioned maximum limit.           |
|   |   | Shares not        entitled to vote are 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, converted with amendments into Law No. 474 of July        30, 1994, as modified by Article 4, Paragraph 227, of Law        No. 350 of December 24, 2003 the Minister of Economy and        Finance retains the following special powers to be        exercised in agreement with the Minister of the Economic        Development and according to the criteria contained in        the Decree issued by the President of the Council of        Ministers on 10 June, 2004:                                                                                                                                                                                                        |
|   |   | a)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |   | opposition with respect to        the acquisition of material shareholdings by entities        affected by the shareholding limit as set forth in        Article 3 of Decree-law No. 332 of May 31, 1994,        converted with amendments into Law No. 474 of July 30,        1994, by which – as per Decree issued by the        Minister of Treasury on October 16, 1995 – are meant        those representing at least 3 per cent. of share capital        with the right to vote at the ordinary shareholders’        meeting. |
|   |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |   | The opposition is expressed        within ten days of the date of the notice to be filed by        the Board of Directors at the time request is made for        registration in the shareholders’ register if the        Minister considers that such an acquisition may prejudice        the vital interests of the Italian State. Until the        ten-day term is not lapsed, the voting rights and the        non-asset linked rights connected with the shares        representing a material shareholding may not be        exercised. If the opposition power is exercised, through        a duly motivated act in connection with the prejudice        that may be caused by the operation to the vital        interests of the Italian State, the transferee may not        exercise the voting rights and the other non-asset linked        rights connected with the shares representing a material        shareholding and must sell said shares within one year.        In case of failure to comply, the court, upon request of        the Minister of Economy and Finance, will order the sale        of the shares representing a material shareholding        according to the procedures set forth in Article 2359-ter        of the Civil Code. The act through which the opposition        power is exercised may be challenged by the transferee        before the Lazio Regional Administrative Court within        sixty days as of its issue; |
|   |   | b)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |   | opposition to the        subscription of Shareholders’ pacts or agreements as        per Article 122 of Legislative Decree No. 58 of February        24, 1998, involving – as per the Decree issued by        the Minister of Treasury on October 16, 1995 – at        least 3 per cent. of the share capital with the right to        vote at ordinary shareholders’ meetings. In order to        allow the exercise of the above mentioned opposition        power, Consob notifies the Minister of Economy and        Finance of the relevant pacts or agreements notified to        it pursuant to the aforementioned Article 122 of        Legislative Decree No. 58 of February 24, 1998. The        opposition power must be exercised within ten days of the        date of the notice by Consob. Until the ten-day term has        elapsed, the voting right and the other non-asset linked        rights connected with the shares held by the shareholders        who have subscribed the above mentioned pacts or        agreements may not be exercised. If the opposition power        is exercised through the issue of an act that shall be        duly motivated in consideration of the prejudice that may        be caused by these pacts or agreements to the vital        interests of the Italian State, the shareholders pacts or        agreements shall be null and void. If in the        shareholders’ meetings the shareholders who signed        shareholders’ pacts or agreements should behave as        if those pacts or agreements disciplined by Article 122        of Legislative Decree No. 58 of February 24, 1998 were        still in effect, the resolutions approved with their        vote, if determining for the approval, may be challenged.        The act through which the opposition power is exercised        may be challenged by the shareholders who joined the        above mentioned pacts or agreements before the Lazio        Regional Administrative Court within sixty days; |
|   |   | c)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |   | veto power, duly motivated        in relation to the effective prejudice to the interests        of the Italian State, with respect to resolutions to        dissolve 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 cancelling or modifying the powers        indicated in this Article. The act through which the veto        power is exercised may be challenged within sixty days of        its issue by the dissenting shareholders before the Lazio        Regional Administrative Court; |

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|   |   | d) |   | appointment of one Director        with no voting rights. Should such an appointed Director        cease to hold office, the Minister of Economy and Finance        in agreement with the Minister of Economic Development        will appoint a substitute. |
|--------|--------|----|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|                  |   |                                                                                                                                                                                                                                                             |
|-----------------------|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| **ARTICLE        7**  |
| 7.1                   |   | When shares are fully paid,        and if the law so allows, they may be issued to the        bearer. Bearer shares may be converted into registered        shares and vice-versa. Conversion operations are        performed at the shareholder’s expense. |
|                  |   |                                                                                                                                                                                                                                                             |
| **ARTICLE        8**  |
| 8.1                   |   | In the event, and for        whatever reason, that a share belongs to more than one        person, the rights relating to said share may not be        exercised by other than one person or by a proxy for all        co-owners.                                |
|                  |   |                                                                                                                                                                                                                                                             |
| **ARTICLE        9**  |
| 9.1                   |   | The shareholders’        meeting may resolve to increase the Company capital and        fix the terms, conditions and means thereof.                                                                                                                        |
| 9.2                   |   | The shareholders’        meeting may resolve to increase the Company capital by        issuing shares, including shares of different classes, to        be assigned for no consideration pursuant to Article 2349        of the Civil Code.                 |
|                  |   |                                                                                                                                                                                                                                                             |
| **ARTICLE        10** |
| 10.1                  |   | Payments on shares are        requested by the Board of Directors in one or more times.                                                                                                                                                                          |
| 10.2                  |   | Shareholders who are late in        payment are charged an interest calculated at the        official discount rate established by the Bank of Italy,        without prejudice to the provisions of Article 2344 of        the Civil Code.                       |
|                  |   |                                                                                                                                                                                                                                                             |
| **ARTICLE        11** |
| 11.1                  |   | The Company may issue bonds,        including convertible bonds and warrants, in compliance        with the law.                                                                                                                                                 |

> 
***Part IV - Shareholders’ meeting***

| **ARTICLE        12** |
|-----------------------|
| 12.1                  |   | Ordinary and extraordinary        shareholders’ meetings are usually held at the        Company registered office unless otherwise resolved by        the Board of Directors, provided however they are held in        Italy. |
| 12.2                  |   | An ordinary        shareholders’ meeting is called at least once a        year, within 180 days of the end of the Company financial        year, to approve the financial statements, since the        Company is required to draw up consolidated financial        statements. |
| 12.3                  |   | The Directors must call a        shareholders’ meeting without delay when it is        requested by shareholders representing at least one        twentieth of the share capital. Calling a        shareholders’ meeting upon request of shareholders        cannot be made for the matters upon which, according to        law, the shareholders’ meeting will resolve on the        basis of a proposal of the Directors or on the basis of a        project or report of the Board. The shareholders who        request a meeting to be called must prepare a report on        the proposals relating to the items 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 Website        and in the other ways set forth in the Consob regulation,        at the time the notice calling the meeting is published. |
| 12.4                  |   | The Board of Directors shall        make a report on the items on the agenda available to the        public in the ways set out in the previous paragraph        within the period of time for publication of the notice        calling the shareholders’ meeting. |
|                  |   |   |
| **ARTICLE        13** |
| 13.1                  |   | A shareholders’ meeting        shall be called by notice published on the Company        Website, as well as in the ways specified by Consob in        its regulation, within the legal terms and in accordance        with current law. |
|                  |   | Shareholders who severally        or jointly represent at least one fortieth of the Company        share capital may ask for items to be added to the agenda        by submitting a request within ten days of the        publication of the notice calling the meeting, unless a        different term is provided by the law, indicating the        further proposed items in their request. Requests must be        submitted in writing. Additions to the agenda cannot be        made for the matters upon which, according to law, the        shareholders’ meeting will resolve on the basis of a        proposal of the Directors or on the basis of a project or        report of the Directors different from the report on the        items in the agenda. The Board of Directors gives notice        of the allowed additions to the agenda in the same ways        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        prescribed by law. Within the period of time prescribed        for submission of a request to add items to the agenda,        the requesting shareholders shall provide to the Board of        Directors a report on the matters they propose should be        debated. The Board of Directors makes 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 in the ways        set out in Article 12.3 of these By-laws. |
| 13.2                  |   | The legitimate attendance of        the shareholders’ meetings and the exercise of        voting rights is confirmed by a statement to the Company        from the authorized intermediary, in compliance with        intermediary accounting records, |

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|   |   | on behalf of the person with        the voting right. The statement shall be issued by the        intermediary on the basis of balances recorded at the end        of the seventh trading day prior to the date of the        shareholders’ meeting on first or single call.        Credit and debit records entered on accounts after this        deadline shall not be considered for the purpose of        legitimising the exercise of voting rights at the        shareholders’ meeting. The statement made by the        authorized intermediary must reach the Company by the end        of the third trading day prior to the date of the        shareholders’ meeting on first or single call, or        other deadline fixed by Consob regulation issued in        agreement with the Bank of Italy. It remains implicit        that the right to attend the meeting and vote shall be        legitimate if the statements are received by the Company        after the deadlines indicated above, provided they are        received before the opening of the shareholders’        meeting on single call. |
|--------|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|                  |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |
|-----------------------|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| **ARTICLE        14** |
| 14.1                  |   | Those persons who are        entitled to vote may appoint a representative in the        shareholders’ meeting according to law, by means of        a written proxy or in electronic form when this is        provided for in specific regulations and in the ways set        forth therein. In this latter case, electronic        notification of the proxy may be carried out by using a        special section of the Company Website in the ways        indicated in the notice calling the meeting. In order to        simplify the casting of vote by proxy issued by        shareholders who are employees of the Company or of its        subsidiaries and members of shareholders associations        incorporated under and managed pursuant to current        legislation regulating proxies collection, notice boards        for communications and rooms to allow proxies collection        are made available to said associations according to        terms and conditions agreed from time to time by the        Company with the legal representatives of said        associations. |
| 14.2                  |   | The Chairman of the meeting        has to assure the regularity of proxies and, in general,        the right to attend the meeting.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |
| 14.3                  |   | The right to vote may also        be exercised by mail according to the laws and        regulations in force concerning this matter. If envisaged        in the notice calling the meeting, those persons entitled        to vote may attend the shareholders’ meeting through        telecommunication equipment, and exercise their right to        vote by electronic means, in accordance with the law, the        regulatory provisions on this subject and with the        meeting Regulations.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |
| 14.4                  |   | The shareholders’        meetings are disciplined by the shareholders’        meeting Regulations approved by the ordinary        shareholders’ meeting.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |
| 14.5                  |   | The Company may designate a        subject for each shareholders’ meeting to whom the        shareholders may confer a proxy with voting instructions        on all or some of the proposals on the agenda in the ways        provided by the law and the regulatory provisions, by the        end of the second trading day preceding the date set for        the shareholders’ meeting on first or single call.        The proxy is not valid for proposals on which no voting        instructions have been provided.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |
|                  |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |
| **ARTICLE        15** |
| 15.1                  |   | The meeting is chaired by        the Chairman of the Board of Directors, or in the event        of his absence or impediment, by the Chief Executive        Officer; in their absence, the 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 shareholders        present, and may appoint one or more scrutineers.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |
|                  |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |
| **ARTICLE        16** |
| 16.1                  |   | The ordinary        shareholders’ meeting decides on all the matters for        which it is legally entitled and authorises the business        transfer.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |
| 16.2                  |   | The ordinary and the        extraordinary shareholders’ meeting 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 requested by the law        in each case. The Board of Directors may, if it is deemed        necessary, determine that both the ordinary and the        extraordinary shareholders’ meeting 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, passed in accordance with the        legal regulations and these By-laws, are binding on all        shareholders, including those not present or dissenting.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |
| 16.4                  |   | The minutes of ordinary        meetings must be signed by the Chairman and the        Secretary.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |
| 16.5                  |   | The minutes of extraordinary        meetings must be drawn up by a notary public.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |

> 
***Part V - The Board of Directors***

| **ARTICLE        17** |
|-----------------------|
| 17.1                  |   | The Company is managed by a        Board of Directors consisting of no fewer than three and        no more than nine members. The shareholders’ meeting        determines the number within these limits. |
|                  |   | The Minister of Economy and        Finance in agreement with the Minister of the Economic        Development may appoint another member, with no voting        rights, pursuant to Article 6.2, letter d), of the        By-laws. |
| 17.2                  |   | The Directors are appointed        for a period of up to three financial years; this term        lapses on the date of the shareholders’ meeting        convened to approve the financial statements of the last        year of their office. They may be reappointed. |

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| 17.3   |   | The Board of Directors,        except for the member appointed pursuant to Article 6.2,        letter d) of these By-laws, is appointed by the        shareholders’ meeting on the basis of lists        presented by shareholders and by the Board of Directors;        in such lists the candidates must be listed in numerical        order.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |
|--------|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |   | The lists must be filed with        the Company’s registered office by the twenty-fifth        day before the date of the shareholders’ meeting on        first or single call, called to resolve on the        appointment of members of the Board of Directors, and        made available to the public in the ways set forth in the        law and in the Consob regulation at least twenty-one days        before the date set for the shareholders’ meeting on        first or single call. Each shareholder may, severally or        jointly, submit and vote on a single list. Controlling        subjects, controlled companies by them and those under        joint control cannot submit or participate in the        submission of other lists, nor can they vote on them,        even through intermediaries or trustees, controlled here        meaning those companies referred to in Article 93 of        legislative decree No. 58 of February 24, 1998. Each        candidate may stand on a single list, on penalty of        non-electability. Only those shareholders who, severally        or jointly, represent at least 1 per cent. of the share        capital or the different extent fixed by Consob with its        regulation shall have the right to submit lists.        Ownership of the minimum share needed to submit lists        shall be determined by having regard to the shares        registered to the shareholder on the day on which the        lists are filed with the Company. Related certification        may also be submitted after the filing, provided        submission is within the time limit fixed for the        publication of the lists 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 set for the Board of Statutory        Auditors members of listed companies.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |
|   |   | The independent candidates        shall be expressly indicated in each list.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |
|   |   | All candidates shall also        satisfy the integrity requirements set forth by the        applicable legislation.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |
|   |   | Together with the filing of        each list, on penalty of inadmissibility, the curriculum        of each candidate, statements of each candidate to accept        his/her nomination and attest, in his/her own        responsibility, that causes for his/her ineligibility and        incompatibility are non existing and that he/she        satisfies the aforementioned integrity and, if any,        independence requirements, shall be filed.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |
|   |   | The appointed Directors        shall communicate to the Company if they have lost the        above mentioned independence and integrity requirements        and if situations of ineligibility or incompatibility        have arisen.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |
|   |   | The Board of Directors        evaluates periodically the independence and the integrity        of its members and if situations of ineligibility or        incompatibility have arisen. If the integrity or        independence requirements declared and set forth by the        legislation in force are not satisfied or lapse for a        Director or if situations of ineligibility or        incompatibility have arisen, the Board of Directors shall        declare the Director’s disqualification and resolve        upon his/her substitution or shall invite him/her to        rectify the situation of incompatibility within the term        set by the Board itself, on penalty of his/her        disqualification.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |
|   |   | Directors shall be elected        in the following manner:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |

|   |   | a)                                                                                                                                                                                                                                                                          |   | seven tenths of the        Directors to be elected will be drawn out from the        candidate list that receives the majority of votes        expressed by the shareholders in the numerical order in        which they appear on the list, rounded off in the event        of a fractional number to the next lower number;                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |
|--------|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |   | b)                                                                                                                                                                                                                                                                          |   | the remaining Directors will        be drawn out from the other candidate lists; said lists        shall not be linked in any way, neither indirectly, to        the shareholders who have submitted or voted the list        that has obtained the highest number of votes; to this        purpose the votes obtained by each candidate list will be        divided by one or two or three depending on the number of        the members to be elected. The quotients thus obtained        will be assigned progressively to candidates of each said        list in the order given in the lists themselves.        Quotients thus assigned to candidates of said lists will        be ordered in a decreasing numerical list. Those who        obtain the highest quotients will be elected. In the        event that more than one candidate obtains the same        quotient, the candidate elected will be the one of the        list that has not hitherto had a Director elected or that        has elected the least number of Directors. In the event        that none of the lists has yet elected a Director or that        all of them have elected the same number of Directors,        the candidate from all such lists who has obtained the        largest number of votes will be elected. In the event of        equal list votes and equal quotients, the entire        shareholders’ meeting will vote again and the        candidate elected will be the one who obtains a simple        majority of the votes; |
|   |   | c)                                                                                                                                                                                                                                                                          |   | if the minimum number of        independent Directors prescribed in these By-laws has not        been elected after the application of the procedure        described above, the quotient to be assigned to the        candidates in each list shall be calculated using the        system described at letter b); the independent candidates        not yet drawn from the lists pursuant to letters a) and        b) above, who have the highest quotients will be elected        in order to meet the provision of the By-laws on the        number of the independent Directors. The Directors so        appointed will replace the non-independent Directors to        whom the lowest quotients have been assigned. If the        number of independent candidates is lower than the        minimum fixed in these By-laws, the shareholders’        meeting shall resolve, with the majorities prescribed by        the law, to replace the non-independent candidates who        received the lowest quotients;                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |
|   |   | d)                                                                                                                                                                                                                                                                          |   | to appoint Directors for any        reason not appointed pursuant to the aforementioned        procedure, the shareholders’ meeting shall resolve,        with the majorities prescribed by the law, in such a way        as to ensure that the composition of the Board of        Directors complies with the current legislation and the        By-laws.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |
|   |   | The vote by list        procedure shall apply only to the renewal of the entire        Board of Directors.                                                                                                                                                                  |
| 17.4   |   | The        shareholders’ meeting may, even during the        Board’s term of office, change the number of members        of the Board of Directors, always within the limits set        forth in the first paragraph of this Article, and make        the related |

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|   |   | appointments. The mandates        of Directors so elected will expire at the same time as        those of the Directors already serving. |
|--------|--------|------------------------------------------------------------------------------------------------------------------------------------------|

| 17.5                  |   | If during the term of office        one or more Directors should no longer hold office,        action will be taken in compliance with Article 2386 of        the Civil Code with exception of the Director appointed        pursuant to Article 6.2 letter d) of these By-laws. If a        majority of Directors should cease to hold office, the        whole Board will be considered to have resigned, and the        Board must promptly call a shareholders’ meeting to        appoint a new Board.                                                                                                                                                                                                                                                              |
|-----------------------|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| 17.6                  |   | The Board may establish        Board Committees which have consulting and proposing        functions on specific subjects.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |
|                  |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |
| **ARTICLE        18** |
| 18.1                  |   | If the shareholders’        meeting has not appointed a Chairman, the Board will        elect one 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, at the        Chairman’s proposal, shall appoint a Secretary, who        need not belong to the Company.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |
|                  |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |
| **ARTICLE        19** |
| 19.1                  |   | The Board meets in the place        indicated in the meeting notice whenever the Chairman or,        in case of his absence or impediment, the Chief Executive        Officer deems necessary, or when written application 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 Board of Directors’ meetings        may be held by video or teleconference if each of the        participants in the meetings can be identified and if        each can follow and participate in the discussion of the        topics dealt with in real time. The Meeting is considered        duly held in the place where the Chairman and the        Secretary are present. |
| 19.2                  |   | Usually notice is given at        least five days in advance. In cases of urgency the        period of notice may be shorter. The Board of Directors        decides on how its meetings should be convened.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |
| 19.3                  |   | The Board of Directors must        also be convened when so requested by at least two        Directors or by one if the Board consists of three        Director, to decide on a specific topic considered to be        of particular importance, pertaining to the management of        the Company, and said topic must be specified in the        request.                                                                                                                                                                                                                                                                                                                                                                                                                 |
|                  |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |
| **ARTICLE        20** |
| 20.1                  |   | The Chairman of the Board        or, in his absence, the oldest 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 majority of votes of the Directors with        voting rights present; should votes be equal, the person        who chairs the meeting shall have a casting vote.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |
|                  |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |
| **ARTICLE        22** |
| 22.1                  |   | The resolutions of the Board        of Directors are entered in the minutes, which are        recorded in a book kept for that purpose pursuant to the        law, and said minutes are signed by the Chairman of the        meeting and by the Secretary.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |
| 22.2                  |   | Copies of the minutes are        bona fide if they are signed by the Chairman or the        person acting for him or her 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, except for the acts that the law or        these By-laws reserve for the shareholders’ meeting.                                                                                                                                                                                                                                                                                                                                                                    |
| 23.2                  |   | The Board of Directors shall        deliberate on the following matters:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |

| - |   | the merger and the        proportional demerger of companies in which the Company        owns shares or holdings representing at least 90 per        cent. of the share capital; |
|---|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| - |   | the establishment and        winding up of branches;                                                                                                                             |
| - |   | the amendment of the By-laws        to comply with legal provisions.                                                                                                             |

| 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 most        significant economic, financial and capital transactions        carried out by the Company and the companies it controls;        in particular they shall report to the Board of Statutory        Auditors those transactions in which they have an        interest, on their own behalf or on behalf of third        parties.                                                                                                                                                                                                                                                                      |
|-----------------------|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|                  |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |
| **ARTICLE        24** |
| 24.1                  |   | The Board of Directors        delegates its powers to one of its members with the        exception of the Director appointed pursuant to Article        6.2, letter d) of the By-laws, within the limits set        forth in Article 2381 of the 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 at        any time withdraw the powers delegated hereon,        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, upon the proposal of the Chairman and        in agreement with the Chief Executive Officer, may confer        powers for single acts or categories of |

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|   |   | 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 single acts or        specific categories of acts. |
|--------|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   |   | Further, 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 and determine the powers to be        conferred on them, after they have been ascertained to        fulfil the integrity requirements prescribed by the law.        The Board of Directors shall periodically check the        integrity of the General Managers. Failure to satisfy        these requirements shall result in disqualification from        the position. |
|--------|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |   | Upon proposal of the Chief        Executive Officer, in agreement with the Chairman and        with the favourable opinion of the Board of Statutory        Auditors, the Board of Directors appoints the Manager        responsible for the preparation of the financial        reporting documents.                                                                                                                                                                                                                                                         |
|   |   | The Manager responsible for        the preparation of the financial reporting documents must        be chosen from among those persons who, for at least        three years, have carried out:                                                                                                                                                                                                                                                                                                                                                                |

|   |   | a) |   | administration, control or        senior 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 two million euro, or |
|--------|--------|----|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |   | b) |   | audit activities in the        companies indicated in letter a) above, or                                                                                                                                                                                         |
|   |   | c) |   | professional activities or        university teaching activities in the financial or        accounting sectors, or                                                                                                                                                |
|   |   | d) |   | senior management functions        in public or private bodies in the financial, accounting,        or control sectors.                                                                                                                                           |

|                  |   | The Board of Directors shall        monitor that the Manager responsible for the preparation        of the financial reporting documents has adequate powers        and means to execute his/her tasks and that the        administrative and accounting procedures are effectively        respected                       |
|-----------------------|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|                  |   |                                                                                                                                                                                                                                                                                                                       |
| **ARTICLE        25** |
| 25.1                  |   | Legal representation towards        any judicial or administrative authority and towards        third parties, and the Company signature, is vested in        either the Chairman or the Chief Executive Officer.                                                                                                          |
|                  |   |                                                                                                                                                                                                                                                                                                                       |
| **ARTICLE        26** |
| 26.1                  |   | The Chairman and the members        of the Board of Directors are entitled to remuneration to        be determined by the ordinary shareholders’ meeting.        Said resolution, once taken, shall remain valid for        subsequent financial years until the shareholders’        meeting decides 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) |   | checks that Board        resolutions are implemented;                                                   |
| e) |   | exercises the powers        delegated to him by the Board of Directors pursuant to        Article 24.1. |

> 
***Part VI - Board of Statutory Auditors***

| **ARTICLE        28** |
|-----------------------|
| 28.1                  |   | The Board of Statutory        Auditors consists of five effective members and two        alternate members, chosen among persons who satisfy the        professional and integrity requirements set forth by the        Ministry of Justice Decree No. 162, of March 30, 2000. |
|                  |   | Pursuant to the        aforementioned decree, the subjects closely connected to        the business of the Company are: commercial law, business        economics and corporate finance. |
|                  |   | Similarly, the sectors        closely connected to those of interest of the Company are        the engineering and geological sectors. |
|                  |   | The Statutory Auditors may        be appointed members of administration and control bodies        in other companies within the limits set by Consob        regulation. |
| 28.2                  |   | The Board of Statutory        Auditors is appointed by the shareholders’ meeting        on the basis of lists presented by the shareholders; in        such lists the candidates are listed by progressive        number. |
|                  |   | The procedures set forth in        Article 17.3 and the provisions issued by Consob in its        regulation shall apply to the submission, filing and        publication of candidate lists. |
|                  |   | Lists shall be divided into        two sections: the first concerns those candidates for        appointment as effective Auditors and the second for the        candidates for appointment as alternate Auditors. At        least the first candidate in each section must be a        chartered accountant and have carried out audit        activities for no less than three years. |
|                  |   | Three effective Auditors and        one alternate Auditor will be drawn from the list that        obtains the majority of votes. The other two standing        Auditors and the other alternate Auditor will be        appointed pursuant to Article 17.3, letter b) of the        By-laws. The procedure described in said Article shall        apply separately to each section of the other lists. |

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|   |   | The shareholders’        meeting appoints the Chairman of the Board of Statutory        Auditors among the effective Auditors appointed according        to Article 17.3 letter b) of these By-laws.                                                                                                                                                                                        |
|--------|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |   | The vote by list procedure        shall apply only in case of renewal of the entire Board        of Statutory Auditors.                                                                                                                                                                                                                                                                          |
|   |   | Should an effective Auditor        from the candidate list that received a majority of the        votes expressed by the shareholders be replaced, the        replacement shall be the alternate Auditor from the same        list; should an effective Auditor from the other        candidate lists be replaced, the replacement shall be the        Alternate Auditor from those other lists. |

| 28.3   |   | Retiring Auditors may be        re-elected.                                                                                                                                                                                                                                                                                                                                                                                                |
|--------|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| 28.4   |   | Subject to prior        communication to the Chairman of the Board of Directors,        the Board of Statutory Auditors may call        shareholders’ meetings and of the Board of        Directors. The power to call the Board of Directors may        be exercised individually by each member of the Board of        Statutory Auditors; at least two effective Auditors are        required to call shareholders’ meetings. |
|   |   | The Board of Statutory        Auditors’ meetings may be held by video or        teleconference if each of the participants in the        meetings can be identified and if each can follow and        participate in the discussion of the topics dealt with in        real time. The Meeting is 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 financial year        ends on December 31 every year. |
| 29.2                  |   | At the end of each financial        year, the Board of Directors sees to the preparation of        the Company financial statements in compliance with the        law. |
| 29.3                  |   | The Board of Directors may        pay interim dividends to the shareholders during the        financial year. |
|                  |   |   |
| **ARTICLE        30** |
| 30.1                  |   | Dividends not collected        within five years of the day on which they become payable        will be prescribed in favour of the Company and 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 will resolve the        manner of its liquidation, appoint one or more        liquidators and determine their powers and remuneration. |

> 
***Part IX - General Provisions***

| **ARTICLE        32** |
|-----------------------|
| 32.1                  |   | For matters not expressly        regulated by these By-laws, the norms of the Civil Code        and special laws on these matters shall apply. |
| 32.2                  |   | Pursuant to Article 3,        paragraph 2, of Decreelaw No. 332 of May 31, 1994,        converted with amendments into Law No. 474 of July 30,        1994, Article 6.1, subsection six, of these By-laws does        not apply to the shareholding owned by the Ministry of        Economy and Finance, public bodies or entities they        control. |
|                  |   |   |
| **ARTICLE        33** |
| 33.1                  |   | The Company retains all        assets and liabilities held by the public law agency Ente        Nazionale Idrocarburi before its transformation. |

 

 

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**EXHIBIT 8**

**List of Eni’ssubsidiaries for year 2011**

| Subsidiary |   | Country        of Incorporation |   | Eni’s        share of net profit (%) |
|------------|--------|---------------------------------|--------|-------------------------------------------|
|       |   |                            |   |                                      |

| EXPLORATION & PRODUCTION                                                |   |                   |   |   |
|-----------------------------------------------------------------------------|--------|------------------------|--------|--------|
|                                                                        |   |                   |   |   |
| Agosta Srl                                                                  |   | Italy                  |   | 100.00 |
| 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 (Egypt) Ltd                                                   |   | UK                     |   | 100.00 |
| Burren Energy India Ltd                                                     |   | UK                     |   | 100.00 |
| Burren Energy Ltd                                                           |   | Cyprus                 |   | 100.00 |
| Burren Energy Plc                                                           |   | UK                     |   | 100.00 |
| Burren Energy (Services) Ltd                                                |   | UK                     |   | 100.00 |
| Burren Resources Petroleum        Ltd                                       |   | Bermuda                |   | 100.00 |
| Burren Shakti Ltd                                                           |   | Bermuda                |   | 100.00 |
| Eni AEP Ltd                                                                 |   | UK                     |   | 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                                                             |   | UK                     |   | 100.00 |
| Eni America Ltd                                                             |   | USA                    |   | 100.00 |
| Eni Angola Exploration BV                                                   |   | Netherlands            |   | 100.00 |
| Eni Angola Production BV                                                    |   | Netherlands            |   | 100.00 |
| Eni Arguni I Ltd                                                            |   | UK                     |   | 100.00 |
| Eni Australia BV                                                            |   | Netherlands            |   | 100.00 |
| Eni Australia Ltd                                                           |   | UK                     |   | 100.00 |
| Eni BB Petroleum Inc                                                        |   | USA                    |   | 100.00 |
| Eni Bukat Ltd                                                               |   | UK                     |   | 100.00 |
| Eni Bulungan BV                                                             |   | Netherlands            |   | 100.00 |
| Eni Canada Holding Ltd                                                      |   | Canada                 |   | 100.00 |
| Eni CBM Ltd                                                                 |   | UK                     |   | 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 Elgin/Franklin Ltd                                                      |   | UK                     |   | 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                                                               |   | UK                     |   | 100.00 |

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| Eni Gas & Power LNG        Australia BV                    |   | Netherlands                             |   | 100.00 |
|----------------------------------------------------------------|--------|-----------------------------------------|--------|--------|
| Eni Ghana Exploration and        Production Ltd                |   | Ghana                                   |   | 100.00 |
| Eni Hewett Ltd                                                 |   | UK                                      |   | 100.00 |
| Eni India Ltd                                                  |   | UK                                      |   | 100.00 |
| Eni Indonesia Ltd                                              |   | UK                                      |   | 100.00 |
| Eni International NA NV        Sàrl                       |   | Luxembourg                              |   | 100.00 |
| Eni Investments Plc                                            |   | UK                                      |   | 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                                             |   | UK                                      |   | 100.00 |
| Eni JPDA 06-105 Pty Ltd                                        |   | Australia                               |   | 100.00 |
| Eni Krueng Mane Ltd                                            |   | UK                                      |   | 100.00 |
| Eni Lasmo Plc                                                  |   | UK                                      |   | 100.00 |
| Eni LNS Ltd                                                    |   | UK                                      |   | 100.00 |
| Eni Mali BV                                                    |   | Netherlands                             |   | 100.00 |
| Eni Marketing Inc                                              |   | USA                                     |   | 100.00 |
| Eni Middle East BV                                             |   | Netherlands                             |   | 100.00 |
| Eni Middle East Ltd                                            |   | UK                                      |   | 100.00 |
| Eni MOG Ltd (in liquidation)                                   |   | UK                                      |   | 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                                            |   | UK                                      |   | 100.00 |
| Eni Oil Algeria Ltd                                            |   | UK                                      |   | 100.00 |
| Eni Oil do Brasil SA                                           |   | Brazil                                  |   | 100.00 |
| Eni Oil & Gas Inc                                          |   | USA                                     |   | 100.00 |
| Eni Oil Holdings BV                                            |   | Netherlands                             |   | 100.00 |
| Eni Pakistan Ltd                                               |   | UK                                      |   | 100.00 |
| Eni Pakistan (M) Ltd Sàrl                                 |   | Luxembourg                              |   | 100.00 |
| Eni Papalang Ltd                                               |   | UK                                      |   | 100.00 |
| Eni Petroleum Co Inc                                           |   | USA                                     |   | 100.00 |
| Eni Petroleum US Llc                                           |   | USA                                     |   | 100.00 |
| Eni Polska spólka z        ograniczona odpowiedzialnoscia |   | Poland                                  |   | 100.00 |
| Eni Popodi Ltd                                                 |   | UK                                      |   | 100.00 |
| Eni Rapak Ltd                                                  |   | UK                                      |   | 100.00 |
| Eni RD Congo SPRL                                              |   | Democratic Republic of the        Congo |   | 100.00 |
| Eni TNS Ltd                                                    |   | UK                                      |   | 100.00 |
| Eni Togo BV                                                    |   | Netherlands                             |   | 100.00 |
| Eni Transportation Ltd                                         |   | UK                                      |   | 100.00 |
| Eni Trinidad and Tobago Ltd                                    |   | Trinidad & Tobago                   |   | 100.00 |
| Eni Tunisia BEK BV                                             |   | Netherlands                             |   | 100.00 |
| Eni Tunisia BV                                                 |   | Netherlands                             |   | 100.00 |
| Eni UFL Ltd                                                    |   | UK                                      |   | 100.00 |
| Eni UHL Ltd                                                    |   | UK                                      |   | 100.00 |
| Eni UKCS Ltd                                                   |   | UK                                      |   | 100.00 |
| Eni UK Holding Plc                                             |   | UK                                      |   | 100.00 |
| Eni UK Ltd                                                     |   | UK                                      |   | 100.00 |
| Eni Ukraine Holdings BV                                        |   | Netherlands                             |   | 100.00 |
| Eni Ukraine Llc                                                |   | Ukraine                                 |   | 100.00 |
| Eni ULT Ltd                                                    |   | UK                                      |   | 100.00 |
| Eni ULX Ltd                                                    |   | UK                                      |   | 100.00 |
| Eni USA Gas Marketing Llc                                      |   | USA                                     |   | 100.00 |
| Eni USA Inc                                                    |   | USA                                     |   | 100.00 |
| Eni US Operating Co Inc                                        |   | USA                                     |   | 100.00 |
| Eni Venezuela BV                                               |   | Netherlands                             |   | 100.00 |
| Eni West Timor Ltd                                             |   | UK                                      |   | 100.00 |
| Eni Yemen Ltd                                                  |   | UK                                      |   | 100.00 |
| First Calgary Petroleums LP                                    |   | USA                                     |   | 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 |

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| Lasmo Sanga Sanga Ltd                                                                                                                                            |   | Bermuda         |   | 100.00 |
|------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|-----------------|--------|--------|
| Nigerian Agip Exploration        Ltd                                                                                                                             |   | Nigeria         |   | 100.00 |
| Nigerian Agip Oil Co Ltd                                                                                                                                         |   | Nigeria         |   | 100.00 |
| OOO ‘Eni Energhia’                                                                                                                                     |   | Russia          |   | 100.00 |
|                                                                                                                                                             |   |            |   |   |
|                                                                                                                                                             |   |            |   |   |
| GAS & POWER                                                                                                                                                  |   |            |   |   |
|                                                                                                                                                             |   |            |   |   |
| Compagnia Napoletana di        Illuminazione e Scaldamento col Gas SpA                                                                                           |   | Italy           |   | 55.36  |
| Eni Gas & Power Belgium        SpA                                                                                                                           |   | Italy           |   | 100.00 |
| Eni Hellas SpA                                                                                                                                                   |   | Italy           |   | 100.00 |
| EniPower Mantova SpA                                                                                                                                             |   | Italy           |   | 86.50  |
| EniPower SpA                                                                                                                                                     |   | Italy           |   | 100.00 |
| GNL Italia SpA                                                                                                                                                   |   | Italy           |   | 55.53  |
| LNG Shipping SpA                                                                                                                                                 |   | Italy           |   | 100.00 |
| Snam Rete Gas SpA (Snam SpA        from January 1, 2012)                                                                                                         |   | Italy           |   | 55.53  |
| Società EniPower Ferrara        Srl                                                                                                                         |   | Italy           |   | 51.00  |
| Società Italiana per il Gas        pA                                                                                                                       |   | Italy           |   | 55.53  |
| Stoccaggi Gas Italia SpA -        Stogit SpA                                                                                                                     |   | Italy           |   | 55.53  |
| Toscana Energia Clienti SpA                                                                                                                                      |   | Italy           |   | 100.00 |
|                                                                                                                                                             |   |            |   |   |
| Adriaplin Podjetje za        distribucijo zemeljskega plina doo Ljubljana                                                                                        |   | Slovenia        |   | 51.00  |
| Altergaz SA                                                                                                                                                      |   | France          |   | 98.09  |
| Distribuidora de Gas Cuyana        SA                                                                                                                            |   | Argentina       |   | 45.60  |
| Distrigas LNG Shipping SA                                                                                                                                        |   | Belgium         |   | 100.00 |
| Distrigas NV                                                                                                                                                     |   | Belgium         |   | 100.00 |
| Eni Gas & Power Belgium        SA                                                                                                                            |   | Belgium         |   | 100.00 |
| Eni Gas & Power GmbH                                                                                                                                         |   | Germany         |   | 100.00 |
| Eni Gas Transport Services        SA                                                                                                                             |   | Switzerland     |   | 100.00 |
| Eni G&P France BV                                                                                                                                            |   | Netherlands     |   | 100.00 |
| Eni G&P Trading BV                                                                                                                                           |   | Netherlands     |   | 100.00 |
| Finpipe GIE                                                                                                                                                      |   | Belgium         |   | 63.33  |
| Inversora de Gas Cuyana SA                                                                                                                                       |   | Argentina       |   | 76.00  |
| Société du Services du        Gazoduc Transtunisien SA - Sergaz SA                                                                                     |   | Tunisia         |   | 66.67  |
| Société pour la        Construction du Gazoduc Transtunisien SA - Scogat SA                                                                            |   | Tunisia         |   | 100.00 |
| Tigáz-Dso Földgázelosztó        kft                                                                                                          |   | Hungary         |   | 50.44  |
| Tigáz Tiszántúli        Gázszolgáltató Zártkörûen Mûködõ        Részvénytársaság |   | Hungary         |   | 50.44  |
| Trans Tunisian Pipeline Co        Ltd                                                                                                                            |   | Channel Islands |   | 100.00 |
|                                                                                                                                                             |   |            |   |   |
|                                                                                                                                                             |   |            |   |   |
| 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 Austria        Tankstellenbetrieb 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 |

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| 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                                                                   |   | USA                   |   | 100.00 |
| Eni USA R&M Co Inc                                                                                  |   | USA                   |   | 100.00 |
| Esain SA                                                                                                |   | Ecuador               |   | 100.00 |
|                                                                                                    |   |                  |   |   |
|                                                                                                    |   |                  |   |   |
| PETROCHEMICALS                                                                                          |   |                  |   |   |
|                                                                                                    |   |                  |   |   |
| Polimeri Europa SpA                                                                                     |   | Italy                 |   | 100.00 |
|                                                                                                    |   |                  |   |   |
| Dunastyr Polisztirolgyártó        Zártkoruen Mukodo Részvénytársaság |   | Hungary               |   | 100.00 |
| Polimeri Europa Benelux SA                                                                              |   | Belgium               |   | 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                                                                                  |   | UK                    |   | 100.00 |
|                                                                                                    |   |                  |   |   |
|                                                                                                    |   |                  |   |   |
| ENGINEERING &        CONSTRUCTION                                                                   |   |                  |   |   |
|                                                                                                    |   |                  |   |   |
| Saipem SpA                                                                                              |   | Italy                 |   | 43.23  |
| Saipem Energy Services SpA                                                                              |   | Italy                 |   | 43.23  |
| Servizi Energia Italia SpA                                                                              |   | Italy                 |   | 43.23  |
| SnamprogettiChiyoda SAS di        Saipem SpA                                                            |   | Italy                 |   | 43.19  |
|                                                                                                    |   |                  |   |   |
| Andromeda Consultoria        Tecnica e Representações Ltda                                    |   | Brazil                |   | 43.23  |
| BOSCONGO SA                                                                                             |   | Republic of the Congo |   | 43.23  |
| BOS Investment Ltd (in        liquidation)                                                              |   | UK                    |   | 43.23  |
| BOS - UIE Ltd (in        liquidation)                                                                   |   | UK                    |   | 43.23  |
| Construction Saipem Canada        Inc                                                                   |   | Canada                |   | 43.23  |
| ER SAI Caspian Contractor        Llc                                                                    |   | Kazakhstan            |   | 21.62  |
| ERS - Equipment Rental &        Services BV                                                         |   | Netherlands           |   | 43.23  |
| Global Petroprojects        Services AG                                                                 |   | Switzerland           |   | 43.23  |
| Medsai SAS (former SAS Port        de Tanger)                                                           |   | France                |   | 43.23  |
| Moss Maritime AS                                                                                        |   | Norway                |   | 43.23  |
| Moss Maritime Inc                                                                                       |   | USA                   |   | 43.23  |
| North Caspian Service Co                                                                                |   | Kazakhstan            |   | 43.23  |
| Petrex SA                                                                                               |   | Peru                  |   | 43.23  |
| PT Saipem Indonesia                                                                                     |   | Indonesia             |   | 43.23  |
| Saigut SA de CV                                                                                         |   | Mexico                |   | 43.23  |
| Saimexicana SA de CV                                                                                    |   | Mexico                |   | 43.23  |
| Saipem America Inc                                                                                      |   | USA                   |   | 43.23  |
| Saipem Asia Sdn Bhd                                                                                     |   | Malaysia              |   | 43.23  |
| Saipem Australia Pty Ltd                                                                                |   | Australia             |   | 43.23  |
| Saipem (Beijing) Technical        Services Co Ltd                                                       |   | China                 |   | 43.23  |
| Saipem Contracting Algérie        SpA                                                              |   | Algeria               |   | 43.23  |
| Saipem Contracting        Netherlands BV                                                                |   | Netherlands           |   | 43.23  |
| Saipem Contracting (Nigeria)        Ltd                                                                 |   | Nigeria               |   | 42.35  |
| Saipem do Brasil Serviçõs        de Petroleo Ltda                                             |   | Brazil                |   | 43.23  |
| Saipem Drilling Co Private        Ltd                                                                   |   | India                 |   | 43.23  |
| Saipem India Projects Ltd                                                                               |   | India                 |   | 43.23  |
| Saipem International BV                                                                                 |   | Netherlands           |   | 43.23  |
| Saipem Libya Llc - SA.LI.CO.        Llc                                                                 |   | Libya                 |   | 43.23  |
| Saipem Ltd                                                                                              |   | UK                    |   | 43.23  |
| Saipem Luxembourg SA                                                                                    |   | Luxembourg            |   | 43.23  |
| Saipem (Malaysia) Sdn Bhd                                                                               |   | Malaysia              |   | 17.89  |
| Saipem Maritime Asset        Management Luxembourg Sàrl                                            |   | Luxembourg            |   | 43.23  |

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| Saipem Mediteran Usluge doo                                                                 |   | Croatia              |   | 43.23  |
|---------------------------------------------------------------------------------------------|--------|----------------------|--------|--------|
| Saipem Misr for Petroleum        Services SAE                                               |   | Egypt                |   | 43.23  |
| Saipem (Nigeria) Ltd                                                                        |   | Nigeria              |   | 38.66  |
| Saipem Norge AS                                                                             |   | Norway               |   | 43.23  |
| Saipem Offshore Norway AS                                                                   |   | Norway               |   | 43.23  |
| Saipem (Portugal) Cómercio        Marítimo, Sociedade Unipessoal Lda              |   | Portugal             |   | 43.23  |
| Saipem SA                                                                                   |   | France               |   | 43.23  |
| Saipem Services México SA        de CV                                                 |   | Mexico               |   | 43.23  |
| Saipem Services SA                                                                          |   | Belgium              |   | 43.23  |
| Saipem Singapore Pte Ltd                                                                    |   | Singapore            |   | 43.23  |
| Saipem UK Ltd                                                                               |   | UK                   |   | 43.23  |
| Saipem Ukraine Llc                                                                          |   | Ukraine              |   | 43.23  |
| SAIRUS Llc                                                                                  |   | Russia               |   | 43.23  |
| Sajer Iraq Co for Petroleum        Services Trading General Contracting & Transport Llc |   | Irak                 |   | 25.94  |
| Saudi Arabian Saipem Ltd                                                                    |   | Saudi Arabia         |   | 25.94  |
| Sigurd Rück AG                                                                         |   | Switzerland          |   | 43.23  |
| Snamprogetti Canada Inc                                                                     |   | Canada               |   | 43.23  |
| Snamprogetti Engineering BV                                                                 |   | Netherlands          |   | 43.23  |
| Snamprogetti Ltd                                                                            |   | UK                   |   | 43.23  |
| Snamprogetti Lummus Gas Ltd                                                                 |   | Malta                |   | 42.80  |
| Snamprogetti Netherlands BV                                                                 |   | Netherlands          |   | 43.23  |
| Snamprogetti Romania Srl                                                                    |   | Romania              |   | 43.23  |
| Snamprogetti Saudi Arabia Co        Ltd Llc                                                 |   | Saudi Arabia         |   | 43.23  |
| Sofresid Engineering SA                                                                     |   | France               |   | 43.23  |
| Sofresid SA                                                                                 |   | France               |   | 43.23  |
| Sonsub AS                                                                                   |   | Norway               |   | 43.23  |
| Sonsub International Pty Ltd                                                                |   | Australia            |   | 43.23  |
| Star Gulf FZ Co                                                                             |   | United Arab Emirates |   | 43.23  |
| Terminal Portuário do        Guarujá SA                                           |   | Brazil               |   | 43.23  |
| Varisal - Serviços de        Consultadoria e Marketing Unipessoal Lda                  |   | Portugal             |   | 43.23  |
|                                                                                        |   |                 |   |   |
|                                                                                        |   |                 |   |   |
| OTHER ACTIVITIES                                                                            |   |                 |   |   |
|                                                                                        |   |                 |   |   |
| Ing. Luigi Conti Vecchi SpA                                                                 |   | Italy                |   | 100.00 |
| Syndial SpA - Attività        Diversificate                                            |   | Italy                |   | 100.00 |
|                                                                                        |   |                 |   |   |
|                                                                                        |   |                 |   |   |
| CORPORATE AND FINANCIAL        COMPANIES                                                    |   |                 |   |   |
|                                                                                        |   |                 |   |   |
| Agenzia Giornalistica Italia        SpA                                                     |   | Italy                |   | 100.00 |
| 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        (former Eni Coordination Center SA)                     |   | Belgium              |   | 100.00 |
| Eni Finance USA Inc                                                                         |   | USA                  |   | 100.00 |
| Eni Insurance Ltd                                                                           |   | Ireland              |   | 100.00 |
| Eni International BV                                                                        |   | Netherlands          |   | 100.00 |
| Eni International Resources        Ltd                                                      |   | UK                   |   | 100.00 |

 

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**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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**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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##### Table of Contents

**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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##### Table of Contents

| • |   | 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; and |
|--------|-----|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | 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 5, 2012

| /s/PAOLO SCARONI                                    |
|-----------------------------------------------------|
|                                                     |
| Paolo Scaroni        Title: Chief Executive Officer |

 

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**EXHIBIT 12.2**

**Certification**

 

I, Alessandro Bernini, 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; and |
|--------|-----|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | 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 5, 2012

 

| /s/ALESSANDRO BERNINI                                    |
|----------------------------------------------------------|
|                                                          |
| Alessandro Bernini        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, 2011 (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 5, 2012

 

| /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, 2011 (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 5, 2012

 

| /s/ALESSANDRO BERNINI                                    |
|----------------------------------------------------------|
|                                                          |
| Alessandro Bernini        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 29, 2012

 

 

 

> 
 

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,                and natural gas reserves, as of December 31,                2011, of certain properties in Europe and Asia                owned by Eni S.p.A. (Eni). This evaluation was                completed on February 29, 2012. Eni has                represented that these properties account for                27.2 percent, on a net equivalent barrel basis,                of Eni’s net proved reserves as of December                31, 2011, 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, 2011, 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, 2011. 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, 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.

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

 

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| DEGOLYER AND        MACNAUGHTON | 3 |
|---------------------------------|---|

 

> 
 

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.

 

**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 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 

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| DEGOLYER AND        MACNAUGHTON | 4 |
|---------------------------------|---|

 

> 
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 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.

 

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| DEGOLYER AND        MACNAUGHTON | 5 |
|---------------------------------|---|

 

> 
(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.

(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 

 

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| DEGOLYER AND        MACNAUGHTON | 6 |
|---------------------------------|---|

 

> 
 

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 and Condensate Prices*

Eni has represented that the oil 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 dated 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. The                        volume-weighted average prices in this                        report were:
  
**Oil                    (U.S.$/bbl)**
 
**Condensate                    (U.S.$/bbl)**
   Europe 107.06 63.78Asia 79.29 49.59   **Average                    for Total** **99.13** **53.97**
*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. 

 

 

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| DEGOLYER AND        MACNAUGHTON | 7 |
|---------------------------------|---|

 

> 
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.$9.19 per thousand cubic                        feet. Where appropriate, Eni supplied                        differentials by field to the relevant                        reference price and the prices were held                        constant thereafter. The volume-weighted                        average gas prices in this                        report were as follows, expressed in                        United States dollars per thousand cubic                        feet (U.S.$/Mcf):
  
**Gas                        (U.S.$/Mcf)**
  Europe 10.88Asia 1.29  **Average for Total** **3.29**

> 
*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 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 and gas reserves, we                are not aware of any such governmental actions                which would restrict the recovery of the December                31, 2011, estimated oil and gas volumes. The                reserves estimated in this report can be produced                under current regulatory guidelines.

 

 

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| DEGOLYER AND        MACNAUGHTON | 8 |
|---------------------------------|---|

 

 

> 
Eni has represented that its estimated net                proved reserves attributable to the reviewed                properties in Europe and Asia 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 27.2 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, 2011**
  

>   
**Oil                (MMbbl)**
 
**Condensate                (MMbbl)**
 
**Marketable                Gas                (Bcf)**
 
**Oil                Equivalent                (MMboe)**
     **Properties                reviewed by DeGolyer and MacNaughton**        **Total                Proved**  
705
  
183
  
5,778
  
1,929
         

> 
Note: Gas is converted to oil equivalent                using a factor of 5,550 cubic feet of gas per 1                barrel of oil equivalent.

> 
 

In our opinion, the information relating to                estimated proved reserves of oil, condensate, and                gas contained in this report has been prepared in                accordance with Paragraphs 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.

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. 

 

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| DEGOLYER AND        MACNAUGHTON | 9 |
|---------------------------------|---|

 

 

> 
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                    29, 2012, 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 29 years of                    experience in oil and gas reservoir studies                    and reserves evaluations.
 

 

 

SIGNED: February 29, 2012

 

 

 

|   | /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 CertainLeasehold and Royalty Interests

 

 

 

 

SEC Parameters

 

 

As of

December 31, 2011

/s/HERMAN G. ACUÑA, P.E.————————————————————————————————Herman G. Acuña, P.E.TBPE License No. 92254Managing Senior Vice President – International

RYDER SCOTT COMPANY, L.P.TBPE Firm Registration No. F-1580

[SEAL]

 

 

RYDER SCOTT COMPANY     PETROLEUMCONSULTANTS

 

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January 30, 2012

 

Eni S.p.A.E&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 (RyderScott) has conducted a reserves audit of the estimates of theproved reserves as prepared by Eni’s engineering andgeological staff as of December 31, 2011 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 onJanuary 30, 2012 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 4.5 percent of theirtotal net proved remaining hydrocarbon reserves. The subjectproperties are located in the following geographic locations:

> 
• Africa                        • Asia                        • Australia and Oceania

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, 2011comply 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.

The conclusions discussed in this report, as of December 31,2011, 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

 

 

| 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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Eni S.p.A. – Third PartyJanuary 30, 2012Page 2

 

the unweighted arithmetic averages of the prices in effect onthe first-day-of-the-month for each month within such period,unless prices were defined by contractual arrangements, asrequired by the SEC regulations. Actual future prices may varysignificantly from the prices required by SEC regulations;therefore, volumes of reserves actually recovered may differsignificantly from the estimated quantities audited by RyderScott.

 

***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 Definitions" 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.

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

 

RYDER SCOTT COMPANY     PETROLEUMCONSULTANTS

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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 identified, the evaluatormust determine the uncertainty associated with the incrementalquantities of the reserves. If the reserve quantities areestimated using the deterministic incremental approach, theuncertainty for each discrete incremental quantity of thereserves is addressed by the reserve category 

RYDER SCOTT COMPANY     PETROLEUMCONSULTANTS

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assigned by the evaluator. Therefore, it is the categorizationof reserve quantities as proved, probable and/or possible thataddresses the inherent uncertainty in the estimated quantitiesreported. For proved reserves, uncertainty is defined by the SECas reasonable certainty wherein the "quantities actuallyrecovered are much more likely than not to be achieved." TheSEC states that "probable reserves are those additionalreserves that are less certain to be recovered than provedreserves but which, together with proved reserves, are as likelyas not to be recovered." The SEC states that "possiblereserves are those additional reserves that are less certain tobe recovered than probable reserves and the total quantitiesultimately recovered from a project have a low probability ofexceeding proved plus probable plus possible reserves." Allquantities of reserves within the same reserve category must meetthe 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 2011 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 2011. 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 prices based on the SEC regulations,adjustments or differentials to product prices, geologicalstructural and isochore maps, well logs, core analyses, andpressure measurements. Ryder Scott reviewed such factual data forits reasonableness; however, we have not conducted an independent

 

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verification 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.

Eni furnished us with the above mentioned average prices ineffect on December 31, 2011. 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 

 

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are sold. The average dated Brent oil price of $111/Bbl wasused by Eni. Eni also provided us with the gas prices based ontheir gas sales agreements. The average realized prices providedby Eni and used in our evaluation are as follows:

| **Geographic Area** |   | **Product** |   | **Average         Realized         Prices** |
|---------------------|--------|-------------|--------|---------------------------------------------|
|                     |   |             |   |                                             |

| Africa                |   | Gas        |   | $81.99/Mm3  |
|-----------------------|--------|------------|--------|-------------|
|                  |   | Condensate |   | $72.37/Bbl  |
| Asia                  |   | Gas        |   | $135.85/Mm3 |
|                  |   | Oil        |   | $93.21/Bbl  |
|                  |   | Condensate |   | $94.73/Bbl  |
| Australia and Oceania |   | Oil        |   | $105.49/Bbl |
|                  |   | Gas        |   | $265.32/Mm3 |
|                  |   | Condensate |   | $93.69/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, 2011. 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 preparing this report, Eni has informed usthat the development activities included herein have beensubjected to and received the internal approvals required byEni’s management at the appropriate local, regional and/orcorporate level. In addition to the internal approvals as noted,certain development activities may still be subject to specificpartner AFE processes, Joint Operating Agreement (JOA)

 

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requirements or other administrative approvals external toEni. Additionally, Eni has informed us that they are not aware ofany legal, regulatory, political or economic obstacles that wouldsignificantly alter their 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 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. 

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.

 

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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. ACUNA, P.E.                                  |
|        |                                                       |
|        | Herman G. Acuna, P.E.                                      |
|        | TBPE License No. 92254                                     |
|        | Managing Senior Vice President –        International |
|        | [SEAL]                                                     |
| HGA(DPR)/pl |                                                       |

 

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**Professional QualificationsHerman G. Acuña**

The conclusions presented in this report for Eni propertieslocated in Africa, Asia, Australia and Ocenia 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 serves as an Engineering Group Coordinatorresponsible for coordinating and supervising staff and consultingengineers of the company in ongoing reservoir evaluation studiesworldwide. Before joining Ryder Scott, Mr. Acuña served in anumber of engineering positions with Exxon. For more informationregarding Mr. Acuña’s geographic and job specificexperience, please refer to the Ryder Scott Company website 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, Bolivia, China, Denmark, Spain,U.S.A and Venezuela. Mr. Acuña has participated in variouscapacities in reserves conferences such as being a panelist a the2008 Trinidad and Tobago’s Petroleum Conference, deliveringthe reserves evaluation seminar during IAPG convention inMendoza, Argentina in 2006 and chairing the first ReservesEvaluation Conference in the Middle East in Dubai, U.A.E in 2006.

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

 

 

 

> 
*(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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**RESERVES STATUS DEFINITIONS AND GUIDELINES**

**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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RESERVES STATUS DEFINITIONS AND GUIDELINESPage 2

 

 

> 
***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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