Eni analysis

1.    Introduction: ENI company profile

1.1. Current situation

Eni S.p.A. is the sixth-largest vertically integrated oil company in the world, by market cap. Aside from the usual upstream and downstream activities that most of the oil majors engage in, Eni is also a major natural gas and electric utilities company, and operates in the oilfield services industry through its stake in Saipem S.p.A.. Positioned in Italy, the company has a geopolitical advantage over many of its competitors in that it has greater access to the high-yield, albeit politically risky African and Middle Eastern reserve markets; this can been seen in the distribution of the company's reserves, as over half of them are concentrated in North and West Africa and the Caspian Sea. (Eni's fact book 2010)

Eni operates in five business segments: Exploration and Production accounts for approximately 42% of the group's net capital employed, Gas and Power accounts for 35%, Refining and Marketing accounts for 12%, and Petrochemicals and Construction and Engineering account for the last 11%. Eni has upstream operations in all major hydrocarbon-producing regions of the world, including North Africa (Egypt, Libya, and Algeria), West Africa (Nigeria and Angola), the North Sea, and the Caspian Sea region. (Eni's annual report 2010)

In 2010, Eni reported net profit of €6.32 billion. Adjusted net profit was €6.87 billion, up 32% from a year ago driven by an excellent performance reported by the Exploration & Production Division due to a recovery in the oil price environment. In 2010, the E&P Division reported an excellent performance amounting to €5,600 million of adjusted net profit, representing an increase of 44.4% from 2009. This was driven by higher oil realizations in dollar terms, the depreciation of the euro against....

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