Eni Aktie

Good afternoon, ladies and gentlemen, and welcome to Eni's 2026 First Quarter Results Conference Call, hosted by Mr. Francesco Gattei, Chief Transition and Financial Officer. [Operator Instructions] I'm now handing you over to your host to begin today's conference. Thank you.

Good afternoon. Amid the volatility and disruption to the energy system over the past 2 months, at Eni, we continue to focus on the delivery of financial performance and key strategic milestones. As we set out at our capital market update just over a month ago, we are working to deliver reliable, affordable and lower carbon energy for all our customers.

Our industrial strategy anchored to technology skills and long-term investment into top tier assets across a diversified portfolio has, if anything, been further validated in the context of the event of this year. Our investment framework underpinned by strong cash flow and a robust balance sheet supports us in delivering sector-leading growth. As a result, we can also reward our investors through a combination of attractive distribution and the continued rise of the capital value of the business, something that has been reflected by the share price improvement. It's also worth keeping in mind that while energy markets have been highly volatile since March, Q1 average, also higher than the planning assumption set out at our capital market update were well within a historical normal range for our volatile industry. Actually, in euro terms, it was a bit softer than last year.

2026 has seen very positive advancement in strategic terms and Q1 supports this progress with strong financials. I will analyze the financial in more detail shortly, but we reported EUR 3.5 billion of pro forma EBIT, cash flow from operation of EUR 2.9 billion and pro forma gearing at 15%, well within our expected 10%, 15% range.

Our pro forma gearing, assuming the full effect of Plenitude Deconsolidation is even lower at 12%. Major strategic events of the year-to-date include probably the ever best start to a year for exploration with an exceptional level of new resources discovered in 7 different countries. The FID of Geng North and Gehem in Indonesia, the dual exploration strategy, realization of a stake in our Baleine discovery. Strong production growth helped by start-up of production at NGC in Angola and first LNG export from the second Congo LNG. And in the transition sector, the agreement to reorganize and deconsolidate Plenitude and advancing 2 new biorefineries at Sannazzaro and Priolo.

But before we get into the details of the financials, I will spend a bit more time on what was the most remarkable start of the year for exploration. As you know, we have established a track record as the leading exploration company in the sector, discovering an average 900 million barrels per year over the past 10 years. And while our impact activity is somewhat front-loaded in the first 4 months of 2026, we had already added around EUR 1 billion of new resources.

Critically, these new resources also all have a credible and visible pathway to development and production, consistent with our focus on efficient time to market where we are also an industry leader. Our production growth to 2030 is visible and sector leading, and we are building material optionality for the 30s.

In Angola, our Azule affiliate, as operator, announced the significant oil discovery of Algaita on Block 15/06, preliminary estimates put oil in place at around 500 million barrels and the presence of an FPSO merely 18 kilometers away promises a speedy and efficient development.

In Cote d'Ivoire, the Murene South-1 well significantly extended the proven area of Calao gas condensate discovery, confirming a world-class discovery of up to 5 Tcf and 450 million barrels in place.

In Libya, in March, we announced a 2 offshore gas discovery estimated to total more than 1 Tcf in place and closed by the existing Bahr Essalam facilities, enabling rapid tieback. In early April, we announced the Denise discovery in the Temsah concession offshore Egypt. Our preliminary estimate for Denise is 2 Tcf of gas and 130 million barrels of condensate in place and situated less than 10 kilometers from existing production infrastructure.

Last, but certainly not least, this week, we announced the giant Geliga gas condensate discovery in the Kutei Basin, offshore Indonesia. Our preliminary resource estimate is in place gas of 5 Tcf and 300 million barrels of condensate, effectively a second Geng because Geliga is close to the undeveloped 2 TCF Gula discovery that includes also an additional 70 million barrels of condensate and thus development synergy plus the same infrastructure and time to market advantage of Geng. There is a clear case for a fast track development of a third major production hub and the significant production and value uplift this implies.

Q1 results were consistent with the scenario condition we faced and the positive momentum we are generating in growing the company. But not all the upside of the scenario was captured in this quarter as our downstream and biorefineries were under the traditional maintenance that we execute before the start of the driving season.

E&P delivered 9% year-on-year production growth and consistent capture of venture prices. Year-over-year, growth contribution from Norway and Congo were especially notable, and the outcome is after disruption to Middle East volumes in March. GGP pro forma EBIT of EUR 0.3 billion is reflecting the more volatile scenario, and it is consistent with our updated guidance of EUR 1.3 billion in pro forma EBIT.

In our transition businesses, pro forma EBITDA of EUR 0.52 billion is consistent with our full year guidance of EUR 2.4 billion. Plenitude that will continue to grow both on clients and new capacity will increase its gross EBITDA by 20% to EUR 1.3 billion, while Enilive will continue to see supportive biorefining margin, and will reach an EBITDA of EUR 1.1 billion, 16% over last year.

Our refinery utilization was low, reflecting a major turnaround program, which should position us well for the remainder of the year. Meanwhile, our results in Versalis highlight some evident progress in the reported results of curtailing its losses in line with our plan. Contribution from associates reflected the macro scenario condition with reporting a strong production growth. A higher scenario along the year will enhance the results of our satellites and could improve their distribution and our cash flow, too.

The tax rate of 42% was in line with our full year guidance. Cash flow from operation generated was in line with our expectation with good contribution from associated dividend and a cash tax rate of around 25%. Working capital had a large negative impact on cash flow, consistent with the sharp rise in prices in March, but it's not out of the ordinary in that context. We do expect to reverse this in the coming quarters. CapEx was EUR 1.9 billion, in line with the full year amount of EUR 7 billion for the year. Net CapEx was broadly equal to gross with limited portfolio activity in this quarter beyond announcing but not completing the sale of a 10% stake in Baleine in Ivory Coast to SOCAR.

After the quarter ended, we completed on the previously announced acquisition by Plenitude of Acea Energy for around EUR 500 million. We paid the third quarterly dividend referring to 2025 in March and repurchased EUR 280 million in share. Shares in issues have reduced by 17% since the end of 2021. Pro forma gearing of 15% incorporates M&A transaction announced but not yet concluded and represent a broadly balanced quarter for cash in and cash out. We expect the consolidation of Plenitude to close in the third quarter with a benefit to consolidated net debt over the following quarter as Plenitude funding is restructured. If we incorporate also this effect, our pro forma gearing is actually at 12%.

Updating our guidance for 2026, we confirm the outlook for E&P production with a growth rate of 3% or 4%, incorporating our current assumption for the impact of Middle East disruption. We have also updated our market scenario projection for the year in the context of the current situation, raising full year Brent to $83 per barrel from $70, the TTF to EUR 50 per megawatt hour from EUR 36 as we believe that higher price will be necessary for the refilling of empty storage and refining margin in Europe our term to $8 per barrel from $6.

From a financial perspective, reflecting the changed scenario underlying outperformance, we now estimate cash flow from operation, pre-working capital of EUR 13.8 billion, up 20% from EUR 11.5 billion set in March. Applying our proposed updated distribution policy, this implies a share buyback raised by around 90% to EUR 2.8 billion.

As previously communicated, this is the floor for 2026 that will be maintained even in the case of future scenario deterioration. Actually, taking into account the current market prices are well above that level, we should expect even further increase in our distribution policy in the coming quarters. Our new policy will be put to shareholders for approval at the AGM on 6th of May.

And this concludes my remarks. And along with my colleagues from any top management on the call, I am ready to take your questions.

[Operator Instructions] I now leave the floor to Mr. Jon Rigby for the Q&A session.

Thanks, operator. [Operator Instructions] And we're going to start with Biraj at RBC.

[Technical Difficulty] How should we think about that EUR 55 million this quarter and what we should assume for the full year '26 and into '27? And then second question is just on Indonesia, and congratulations again on the exploration success. Now that we're closer to the deal closing in Q2, are you able to say what the cash adjustment is set to be net to Eni?

Biraj, can you just rego over your first question because we missed the start of it.

Sorry. It's the transformation costs, the EUR 55 million you've broken out, what should we expect for the full year?

Okay. I'll leave the question about the transformation cost to Adriano Alfani. On Indonesia, we do expect a cash settlement. And also, you know that we work in this kind of model with some distribution that are related to the capability of funding of this entity stand-alone, but we do not disclose this amount that will be in any case irrelevant.

Sure. Thanks for the question. I mean on the EUR 55 million, while we started a new project, we continue to drive efficiency on all the sites that are in transformation. So you should read on annualized basis, roughly EUR 50 million of efficiency that we are going to bring. So you should not multiply EUR 55 million or [indiscernible], but you should discount about EUR 50 million at least of efficiency that we are going to bring. But you need to consider that today, the sites are in transformation for the future, adding value through the new project because we are going to start the new activities. So this is something that in the future will generate value. And by the way, it is incorporated in our CFO for guidance.

Thanks, Biraj. We are now going to go -- sorry, one second. We'll now move -- sorry, apologies. We'll now move to Alejandro Vigil at Santander.

The first one is about the situation in the Middle East in your portfolio. How are you managing the situation and potential impact in terms of your supply contracts, your oil and gas production in general, how you are managing this context? And the second one is about Indonesia. I remember that you were talking about the plateau of the new joint venture of about 0.5 million barrels per day. With the new discoveries, this is now a very conservative assumption? Or you reiterate this 0.5 million as a guidance for the production?

I leave to Guido Brusco to answer both questions.

First, on Middle East, the impact overall is marginal, both on oil production and of course, on free cash flow. We have limited exposure in terms of production, 3% of our total production comes from Middle East. As far as concerned, the products and LNG also is limited, if not 0 impact on LNG, thanks to the flexibility of our portfolio, the diversified geographical footprint, we could basically cope with the missing volumes coming from Qatar essentially. While for the products, we -- on all the commodities, gasoline, diesel and even jet fuel, we are prepared to honor all our commitments with our customers.

So -- on Indonesia, yes, indeed, I would say the -- that assumption was reflecting the status of the base of resources at that time. Of course, having discovered Geliga, which is equivalent in terms of volume in place to Geng and having also another stranded asset there, Gula, which is give and take 2 Tcf, so we can basically replicate another hub in the region. So clearly, this will raise the production target in the medium to long term to more than 500, I would say, 700, 750 might be a reasonable figure.

Thank you, Guido. We're going to move to Josh at UBS.

Two questions. One, just on the buyback and your decision to list it. Obviously, I understand there's sort of mechanical nature here given the new cash flow guidance, but more a question of the timing of why you felt now was the time to do it so soon after the Capital Markets Day and your confidence there?

And then second question, looking at your macro deck, one thing that does stand out is the gas assumption at EUR 50 per megawatt hour, which is above the curve. You're involved in the market, your storage business. Can you explain maybe why prices haven't moved higher so far? What do you think are the main reasons? And why you set your assumption above the forward curve?

Thank you for the question that are partially connected clearly. We decided to move the buyback because we believe actually that is already evident there is a completely different trend even versus the Capital Market Day. The Capital Market Day occurred in the middle of March. The event at the time were just started once we were presenting our first scenario that was based on clearly a crisis, but that could be solved in a shorter time. There were not yet bombing on the facilities that occurred at that specific time and were expanded in the following weeks. And we see there is a continuous or practically 2 months already inside the crisis.

This crisis is not just a matter of reaching a sort of cease fire or peace, but it's also to restart a lot of infrastructure and production facilities, processing facilities that were shut down or were impacted by fire and bombing. So it will take longer. So for this reason, we believe that there is a quite unexpected compliance by the market on the duration of this crisis that appears, I would say, much more impactful that the market is probably evaluating.

On the gas specifically, we believe that in a EUR 40, EUR 45 megawatt hour environment with extended shortage of gas, particularly from Qatar because even if Qatar will be able to restart or there will be some kind of agreement in the coming weeks, it will take time to restart all these plants of this facility to restart the flow. You have to consider there is also bottlenecks in terms of tankers or ships and clearly LNG carriers.

So the overall process of refilling European storage that completed the winter at the minimum, almost at the minimum 25%. Now we are at 30% and to reach at least 80%, 90% before the start of the next winter will require some price signals that should be increased. Price signals not only in the amount of the first front month value, but also on the structure of the curve that is not supportive. So we believe that both on oil and on the gas, our price deck that we have uplifted is still conservative.

We are going to now move to Alessandro Pozzi at Mediobanca.

The first one is on the number of discoveries that you've made so far this year. I was wondering there is -- in your capital allocation framework, there is a little room for increase in CapEx. And we all appreciate the need to be disciplined when it comes to CapEx budgeting. And I was wondering, to this point, is CapEx more of an input to your modeling assumption? I mean, you want to stick to that level of CapEx despite the current scenario or there is some headroom for maybe accelerating some of these projects, especially the ones in Indonesia?

And the second question on GGP. Just wondering whether you can give us more color behind the increase in guidance and whether that is connected to your higher macro assumptions as well.

Okay. I will -- just a very short introduction, then I leave to Guido Brusco and Cristian Signoretto for the two questions. Clearly, CapEx, we are strict to a level of CapEx that we want to keep under certain range. You have to consider in exploration that there are exploration that are occurring inside our business combination or affiliates, associates that are reported in equity. So once you see a discovery in Azule or in Indonesia, this will have a different treatment in terms of CapEx. Then I leave to Guido to explain also why CapEx will be relatively softer in this case.

Yes. I think there are 2 handles here. One is some of the discoveries are discoveries near infrastructure. So our tieback, which are not requiring massive capital intensity. And I mean those are the ones that, on top of what Francesco said, that are in Angola, like Algaita, like the one in Libya or the one in Egypt, basically, those are tie in with, I mean, low cost.

The other angle is the others, which we have made in Ivory Coast and in Geliga. The one in Indonesia, it applies again, the concept that Francesco just illustrated. It is in a business combination. But on those, we can also eventually apply our dual exploration model. So the net CapEx would be even accretive from our perspective. Now Cristian...

Well, on guidance of GGP. So I'd say based on the Q1 results, which were fairly strong and the volume increase and the increase of asset-backed trading that we have seen in a more volatile scenario, we updated the guidance, taking that into consideration. And as we said before, also extending this, let's say, situation and scenario broadly along the next month, given the situation that Francesco just explained before to you.

Is there any new arbitration that we need to be aware of for the rest of the year?

Say it again, sorry?

Is there any new arbitration that we need to be aware of for the next...

No. Absolutely, not.

Thanks, Alessandro. Next, we're going to move to Al Syme at Citigroup.

First question just on gearing. Can you just confirm exactly how much net debt sits in Plenitude that obviously gets deconsolidated in third quarter? And then secondly, just a question around the biofuels market. Obviously, we've seen massive price increases through first quarter. You're putting a lot of growth capital in that business. But also this week, we've seen Europe's largest airline announced cuts to routing because of the price of jet fuel. And yet, I look and see sustainable aviation fuel, SAF, is 40% more expensive than jet fuel. So I wonder how you think about the issue of affordability of biofuels in your forecasting and investment [indiscernible]?

Yes, about the Plenitude amount of debt that we are going to deconsolidate is EUR 2.6 billion. That clearly will be reduced once there will be the increase of capital as a consequence inside the new entity. And then I'll leave to Stefano Ballista to answer about the biofuel and SAF.

Yes. No, as you said, the scenario significantly improved. And actually, the main reason for the scenario improvement, it's driven by market fundamentals. It's driven by the demand increase that we are seeing due to the regulation and the mandates that are under deployment. And these are rules, mandates, target that has been defined. If we look at the most recent definition of new target, I'm thinking about U.S. with a new renewable volume obligation, we got an increase of about 60% of demand for the next couple of years. So this is the main reason.

The geopolitical situation is going to give a little bit of extra headroom, but marginally compared to the fundamentals. This means actually that the perspective on biofuel is and remain definitely strong. When you look at biofuel, you need to look both at renewable diesel on one side and sustainable aviation fuel. The market is coupled.

Sustainable aviation fuel is going to be the only answer to decarbonize the aviation transport. There is no other answer at the moment. And even with a small target in terms of blending, now in Europe, we are about 2%, you can create significant demand, but pretty much affecting marginally the overall cost position.

So we've got significant space for improvement, not only on renewable diesel as it's happening, but also on sustainable aviation fuel with a marginal impact on a marginal component -- on one side of the component of the aviation business as a whole. So this is the view on the biofuel. And as I said, there is no other answer actually to decarbonize the aviation sector for a long while.

Stefano, I mean, Europe's largest airline has basically said they can't afford jet fuel at this price. And I accept the mandate is only 2%, but it's meant to go up. So how on earth are they going to be able to afford a high percentage of biofuel of SAF, if it's 40% more expensive than the price of jet fuel, which they can't afford. It seems to be a conundrum.

Okay. I can -- we can comment about what was the statement. But from our point of view, clearly, the biofuel now a solution to have a resource full in a situation of scarcity. The premium eventually could reflect the impact of the scarcity. And you have to consider the supply chain or the chain of production of SAF is relatively young and small.

Once you will have a potential larger market, you have also improved synergies. So the cost position is not just a matter of, let's say, industrial process. It's also a matter of having this process aligned in terms of size and materiality with demand potential.

We do expect that after this crisis, there will be as a reply, not only on environmental solution, but also apply towards a potential diversification risk to deploy a larger use of this kind of alternative solution for ships, for airplane and for cars.

Thanks, Francesco. Thanks, Al. We're now going to move to Michele Della Vigna at Goldman Sachs.

I wanted to follow up on your exceptional exploration success. And I believe you've also completed the first deepwater well in Libya and I was wondering what were the early results there? And second, I wanted to come back to aviation, but from a different side, I think we keep reading that we may be short of kerosene this summer. How do you see the situation? And how low do you think inventory days can go before flights are actually starting to be grounded? And how much do you think that in your refineries, you can actually tilt towards more jet fuel production?

I leave to Guido to answer both questions.

So the one in Libya has resulted in a noncommercial discovery. And -- but it was very important either for us to have a better understanding of the basin, which is quite large, huge, diverse in terms of number of prospects. And so you have to think that this is a block where the last well drilled was drilled by us in the early 2000s. So we are talking of a large basin with quite a number of untapped resources. So it's the first well, but we'll have, for sure, more understanding of the basin.

As far as concerning the jet fuel, as I said before, we are prepared to satisfy and honor our commitment with our customer. Of course, the situation is very different and diverse if you, I mean, if you look at the different flight operator and supplier. But as far as concerned, Eni, we are prepared to satisfy our customers.

Thanks, Michele. We're going to now move to Paul Redman at BNP.

Yes. First question is just come back to Enilive. Could you give us some insight into kind of what you've seen in terms of margins, February, March and what you're seeing in April for the biofuel business? And if they're a lot stronger, I was surprised the EBITDA guidance didn't get upgraded. Is this because biofuels is positive for the commercial business, maybe having a few more issues.

And then secondly, just on working capital, I think you mentioned in your prepared remarks that you expect this to come down. Could you just talk us through how you expect that to play out?

I'll let Stefano to answer on Enilive, and then I will reply on the working cap.

Yes. First of all, on the scenario. Actually, the scenario on biofuel improved significantly along the first quarter even before the starting of the conflict. This is what's true in Europe. And it's, as I said before, linked to mandates, so to fundamentals. An example, we got recently approved in Holland, the new GHG target is 28% versus a rate of 14%, and we got no more double counting.

So, a good news, to be honest, fully expected. Same in U.S., we got a market significantly increasing, again, linked to fundamental. Even in the first quarter, we got an average on the RIN about $1.5 per RIN. It was less than $1 last year. And now we are about $1.8 after the approval of the new target. So the market was already expecting the new mandate. In terms of output, it has been even better. So this got an extra drive in terms of overall margin.

So this is in terms of market setting. In terms of results, a comment. In the first quarter, we got as Enlive as a whole, EUR 220 million of EBITDA pro forma adjusted. This means EUR 50 million above the first quarter of last year. And this has been fully driven by biorefinery performance. It actually, on top of driving the upside, as you said, balanced the partial pressure on retail prices that we are experiencing in Europe linked to fossil fuel prices.

On top, I want to highlight that actually in the first quarter, we got Venice under maintenance and upgrading maintenance. So it has been shut down for the whole quarter. And that result has been achieved without that kind of production. Venice is going to come in place during the second quarter. And we're going to be at full potential for the second half, so being the condition of capturing results. Last comment, as I said, we were definitely expecting the improvement of the scenario even in the business plan. So this improvement has been for the majority already crafted in our business plan, that one related to fundamentals. The extra upside, assuming the extra upside is going to last for the time being, this is going to get an additional value that we are capturing and we're going to keep capturing.

Thanks, Paul. So watch this space. The next questions come from Lydia Rainforth of Barclays.

Two questions, if I could. I mean just...

No, I would like just to answer about the working capital very fast. The working capital will turn back, will improve immediately in the next quarter and clearly along the year, is subject to the evolution of the spike of the price that we -- let's say, we were -- we recognized in the first quarter. Sorry, Lydia, please continue.

No, no, that was important. Just 2 questions. One, I just wanted to touch on Venezuela and what you're seeing there. And then the second one, sorry, this is more of a long-term thing. But are you seeing in terms of the conversations you're having with host nations, with governments, has anything changed yet? Are they suddenly going, actually, we'd like to accelerate plans around exploration. We want more in terms of energy security. We want you involved more. So just if there's anything -- those sort of conversations, or is it just too early for that at this point?

On Venezuela, just a month ago, we've signed an agreement, which we call Cardón IV Sustainability Agreement, which would allow us to basically produce sustainably the gas and provide energy to the country. And this implies also future -- so this fix for the future essentially and implies also some activity to do some debottlenecking to the plant to increase slightly the amount of volume to the domestic and to have an export outlet for the larger resources, which Perla carries.

Basically, Perla is a reservoir of 20 Tcf. So there is quite a significant potential for an export. On the oil side, we have 2 assets there, one in conventional water and one unconventional onshore. Two things happened. First, a new general license was issued by OFAC, which allows the -- I mean, the operator to carry activity in Venezuela. And second, a new hydrocarbon law was enacted at the end of January this year. And this provides a framework, a legal framework, a fiscal framework to develop in a sustainable way our oil assets. And of course, we are engaging the authorities to make this happen.

And Lydia's second question was on host governments and changing.

In Venezuela.

More broadly, I think, as well.

Accelerate the exploration.

Yes. No, I mean, broadly, there is, of course, a positive reaction from government. And we are noticing in several geographies that government are more prone to provide the right enabler for the operator to increase exploration, provide fiscal term to produce stranded resources. Of course, there is a price element which plays a significant role, but many governments are trying to introduce enablers to make it possible. The focus is on energy security, of course, most of them are trying to maximize the domestic production on the government side.

On the international oil company side, of course, diversification is another pillar of the strategy. It has proven in the last 5 years that 2 major providers of energy, Russia and Middle East for both oil and gas have failed to or has proven that they could fail to deliver and diversification in other geographies like Far East and South America or America in general and Africa is very welcomed now in the strategy.

As Eni, we are very well positioned in these 3 geographies. We had very limited exposure to Russia. We have, as I said before, limited exposure to the Middle East. And if you look at the portfolio in the long term, which we presented also at our last CMU, the Americas, Africa and Far East will play a larger role in our portfolio.

Thanks, Guido. We're now going to move to Martijn Rats at Morgan Stanley. Martijn?

I've got 2. First of all, I just thought I'll ask you a broad question about demand destruction. It clearly is a topic and with a broad range of views of whether there is and how much oil and gas demand might have been destroyed as a result of these high prices. But I was wondering if you could share a perspective. And to be clear, the nature of the question goes just beyond jet fuel, which is sort of separate topic in its own right.

But what do you think is the amount of oil demand that has been destroyed as a result of these very high prices? And the second thing I wanted to ask you is about the Argentina LNG FID. I noticed there wasn't a mention any more of it in the 1Q sort of statement, but that should still be on the schedule for later this year. I just wanted to confirm that.

About demand destruction, I think that thinking about demand destruction in a matter of 1.5 months, it's too early. So I think that demand is there. Clearly, there is potentially some small reduction that potential buyers that do not afford, but demand destruction is generally happening in a certain time frame. So for the time being, you see that there is no demand destruction. There is supply destruction. There is storage use and there is some kind of switch wherever it is possible to switch, eventually in certain coal gas plants. But I haven't seen a real material destruction in terms of demand from the data that we can collect. About the Argentina LNG, I leave to Guido for completing the question.

On Argentina LNG, we are still projecting an FID by the year-end. And just to give you more visibility on the activity, the engineering work is almost completed. The main -- all the major EPC tenders are progressing, and we are estimating to complete by Q2, the majority of those and in early Q3, the remaining. And in parallel, a significant progress has been made also in LNG and NGL marketing as well as on project financing. So definitely, we're setting up ourselves and our partner and all the stakeholders in Argentina to -- for an FID by the year-end.

Thanks, Martijn. And to be clear, it's probably more of a function of a long list of projects that we can't fit in every quarter.

Excellent. Yes.

Yes. Martijn. Moving on, we've got Matt Lofting at JPMorgan. Matt, have you got some questions?

Yes. Two, please. First, it struck me looking at the revised cash flow guidance for 2026 that if we annualize Q1, the new full year targets look comfortably above that. I imagine there's probably some price lagging effects in oil and gas that impacted the numbers in Q1, particularly given prices rallied sharply in March. I wondered if you could sort of share the price lagging impact and how that might come through.

And then secondly, obviously unusual in many respects to raise distributions and buybacks so much so early in the year. Obviously, it's an unusual macro situation that we're in, in that context as well. But in the past, you've talked about effectively a sort of a hard floor and a sort of a soft ceiling to buyback revisions. Does that still apply for 2026 against the 2.8 baseline?

Yes. About the cash flow from operation results and the fact is clearly the -- as a consequence, you know that in the first quarter, as we mentioned, there were -- and downtime, still some maintenance. So we are not able to capture certain results. Also from the point of view of GGP, there were some benefits that we were able to capture partially but just the last month of the quarter.

There is a ramp-up of production in E&P to improve the further benefit along the year. And on the other side, you have to consider that there is distribution from associates that follow in certain cases, quarterly, but in other cases, there are half-year or yearly distribution. So there are various elements that will determine a different distribution in the next 3 quarters versus what we had in the first quarter.

The other question was. Yes, the unusual distribution is because we had the policy and we apply the policy. I think that I do expect that this distribution will become potentially even more unusual in the coming quarters if the market persists.

Thanks, Matt. We're going to move to Massimo Bonisoli at Equita.

Two questions. One on the discovery in Indonesia regarding the SEARAH JV with PETRONAS. In light of the significant discovery in Indonesia, can you clarify whether the terms of the agreement already incorporated the option of the additional resource upside you just discovered ahead of the closing?

And the second on the sensitivity table, given the recent increase in volatility in physical commodity markets with widening differential across crude qualities and geographies, do you believe the sensitivities you provided on benchmark prices are still fully representative? Or should we expect some divergence between benchmark movements and your realized profitability in the current environment?

On the sensitivity, then I will leave to Guido for the question about Indonesia. On the sensitivity, we gave -- you remember that we're, let's say, applied assuming a broader volatility range. So we're different than the usual sensitivity that we fixed on a shorter size fluctuation. Clearly, volatility and -- sorry, sensitivity is just a theoretical number. We do not capture all the arbitrage also because the arbitrage cannot be modeled because we don't know where this potential gap and the effect that on the physical barrel bottleneck that could emerge.

So you keep it as a key reference, but it's clear there will be some specific spot situation where the sensitivity is not applied, but the sensitivity is applied also on 1.7 million barrels per day of production. So that effect is already in a certain way, diluting any specific case. I'll leave that to Guido.

There are adjustments on the free cash flow working capital, but there are also adjustments on the new resources discovered in the interim period and beyond the interim period. So there are a mechanism in the agreement to readjust value accordingly.

Thanks, Massimo. We're going to move to Fergus Neve at Rothschild. Fergus?

There's been a flurry of exploration success at the start of this year and the 1 billion BOE of resources discovered is very impressive. I just wanted to know whether there was any color you could give on further wells being drilled this year that we might be looking out for and if there are any others you're particularly excited about?

And then secondly, it was positive to see the chemicals result improved sequentially this quarter. How should we think about this improvement in terms of the contribution from the Versalis restructuring and then also the scenario in the quarter? And looking forward to 2Q, do we expect the business to be able to capture any improved margins should they materialize?

I'll leave then to Aldo Napolitano for the exploration and Adriano Alfani back for Versalis.

Yes. In terms of program -- exploration program for the rest of the year, -- of course, we had a program this year that was really front-loaded. So many of the high-impact wells have been drilled. And so in 4 months, we have -- so we had the sequence of results that you mentioned. However, we still have some interesting wells to drill during the year, again, in Indonesia, so in the Kutei Basin. So we plan to drill another well, another interesting prospect.

And we will have a couple of wells in Egypt and a well in Ghana. So this will complete the wells at least with a certain materiality. There's a large part of our exploration portfolio anyway that is interested by drilling for near-field ILX drilling, so contributing to production in very short term. But in those cases with more limited reserves.

So on the chemical side, if we look back to the Q1, the transformation has a positive impact of roughly EUR 100 million. Although we are facing a negative scenario because in the first quarter, clearly, there was a sort of a time lag between what Francesco was talking about before, the effect on the demand versus the negative effect of supply because we had higher cost in terms of feedstock, higher cost in terms of utilities.

So at the end, the positive impact quarter-on-quarter at pro forma level is a little less than EUR 100 million because for the effect of the negative scenario, roughly EUR 85 million. If we go in the second quarter, we are putting in place a significant action in addition to further reduce costs and to continue the transformation plan, and we expect the second quarter significantly better than the Q1, also catching some shortage that we see on the polymer market despite still the high cost in terms of feedstock and utilities.

Thank you, Adriano. We're going to now move to Mark Wilson at Jefferies. Mark?

Okay. My first question is, you say how you can honor commitments to customers, gasoline, jet fuel, diesel, et cetera, totally understandable. And just does that flag the idea that margins can be squeezed given feedstock prices? That's the first question. And then the second one, more general, yes, yet more exploration success, deepwater, talking about additional developments as well. You commented previously, Claudio, on the service market and how there could potentially be tightness. We're seeing service providers talk about renewed developments. So how would you see tightness in that contractor market and any particular services you feel may be under pressure given developments that we're looking at?

Yes. About the first question on the margin -- potential risk of margin squeeze, this is -- for us, it's a relative risk because substantially, we are -- in our chain of supply, we can able to cover most of the products that we are delivering to our customers. So from our point of view, we are not in a situation where we have to rely too much on the cargo market.

There could be some volumes related specifically on jet fuel, but this is a marginal amount. So for this reason, we do take the commitment. That this is a commitment that is clearly related to our integrated value along the chain. About the contractual services in the oil market, I leave it to Guido.

Sorry, I have to restart again. So I was talking with the microphone off. So there are 2 elements of -- that are driving cost at the moment. One is driving the short-term cost inflation, and this is mainly driven by the conflict in the Middle East and of course, across the whole oil and gas value chain, higher energy prices, logistics, insurance, commodity costs are increasing, and these are bringing almost immediate cost inflation.

But for one moment, let's imagine that this cost pressure will be shortly fixed, assuming that this cost pressure on the short term will disappear. There are, of course, longer-term drivers of cost pressure, an increase -- a general increase in the activity in the upstream. And we've noticed that basically, I mean, if you look at the inflation trends from '22 to '23, '23, '24, up to '25, we already had a 15% cost increase in -- I mean, starting from the 2022.

And the pre-war 2026 and coming here, we were in the region of the 3% to 4% of cost increase. But if you add up this short term, which I was mentioning before, the range would expand from 4% to 7%. Of course, this is the average. There are costs which are in the long term, more under pressure like the vessel installation for the deepwater activity and others which are less under pressure like the onshore drilling rig, but this is the general overview that we see in the market. And that is backed up also by sources like IHS UCCI Index.

Good stuff. Thanks, Guido. Thanks, Mark. We're going to move now to Chris Kuplent at Bank of America. Chris?

Hope you can hear me okay. Just 2 quick detailed questions to follow up on. I wonder whether you can talk to us about those exploration blocks that have ended up with BP. Was there a consideration whether to do this with Azule? I'm talking about Namibia, sorry. And maybe you can tell us why not with Azule. And second, even smaller detail, I just wonder whether between your CMD and now, you've changed your expectations regarding receiving dividends from ADNOC Refining.

I leave the answer to Aldo for the block in Namibia and then on ADNOC, I will reply later.

So if I understood correctly, so you're talking about the blocks that BP has -- the new blocks that BP has taken in Namibia. So these are real exploration blocks in frontier areas. So for the time being, it's an initiative of BP. So we are, of course, talking to each other, but they are not part of the Azule Energy activity.

About the ADNOC Refining, you have to consider that, that dividend is based on 2 activities. One is the one of refining the crudes. The other is related to trading. So these 2 activities clearly have different perspectives under the current crisis. We do not have yet changed any assumption. It's not material in the overall amount of dividend that we received in the year. So I will keep the assumption as it is and it's not -- eventually, we do believe there is a relative hedging between these 2 activities.

Thanks, Chris.

Sorry, the first answer was this was too much greenfield. I'm aware that you are not taking part, but I just wondered why not.

So as I said, it's an initiative taken by BP, so based on their geological reconstruction. And so I think the question should be made to BP, sorry.

Thanks, Chris. We're going to move now to Sadnan Ali at HSBC.

First of all, could you just remind us of the divestment proceeds you're expecting for the rest of the year? And secondly, I was wondering if there's any further updates or developments in your plans to get back into trading. Of course, the volatile price environment that we're seeing now is a perfect opportunity to capture trading profits, which your peers will benefit from. So I was wondering if the current environment has accelerated your plans at all?

On M&A, you know that we have completed Baleine in the first quarter. And also on the other side, we have completed in the acquisition side, HNR, Energea, with Plenitude. We do expect to have a further disposal completed in the -- during the year. You have the one that we announced last year. There will be further opportunity that we are valorizing. We do exploration model, some tail assets or areas that we do not consider core. So there is activity ongoing negotiations that are getting closer to completion, and we do expect eventually to disclose later on.

So remain, as we said before, quite material this year. On top of that, you should include the deconsolidation of Plenitude as an opportunity. Clearly, Indonesia is another factor that will benefit from the partial disposal of Indonesia, referring to the 10% that will benefit not only of a scenario that is quite supportive, but also of the new discoveries that are emerging and the overall upside potential that is related to that basin. On the trading, I hand back to you.

Yes. On the trading, we had a journey which started with step 1 was to include the trading into the overall value chain of global natural resources to try to capture all the margin. This was the step #1. Step #2 was to change the model, to do some transformation internally and turn our trading arm from a pure service provider of the different business to a marketplace where we've optimized our activity in the assets driven by the market needs.

And then there is this third stage where we wanted to improve our soft skills in trading. We have a large base of assets. We have refineries, we have storage, we have physical oil, we have physical gas. We have a lot in terms of resources and assets, and we wanted to improve our soft skills.

So we started this engagement with other trading players to try to combine the best of the 2, the best of an oil company and the best of a trading company. And this is the objective of the third step, which are -- which is definitely forthcoming. And this scenario, of course, will accelerate it. But despite this contingent situation, we would have done in both cases, yes.

We're going to move to the last question, which is from Bertrand Hodee at Kepler.

I have just one left. On Venezuela, you had outstanding receivables of around $2.3 billion, with an estimated realized value of $1 billion. Do you expect to recover more than the $1 billion because of the new Cardón IV Sustainability Agreement?

Yes. As I said before, we just signed one agreement, the Cardón IV Sustainability Agreement to fix the future. And now with this new engagement and conversation we are having on how to develop the oil assets, we will fix also the past.

And so how should we think about this $2.3 billion of outstanding receivables?

There will be mechanisms developed to recover these past dues within the framework of the development of the oil field. Is that more clear?

Yes. So it's not going to be within the Cardón IV JV, but within the new oil framework?

Or a combination. It's very flexible, but it will be essentially more focused or centered around the oil development.

New development that will clearly give more flexibility in terms of cargo that could be used or new revenues that could emerge by production -- additional production.

Think of it as an holistic solution to all the challenges that we have. Thank you, Bertrand. Thank you, everybody, for joining the Q&A and your attention on Eni's Q1. We look forward to speaking to you soon. Have a great weekend. Thank you.

Ladies and gentlemen, thank you for joining. The conference is now over. You may disconnect your telephones.

Good afternoon, ladies and gentlemen, and welcome to Eni 2026 Capital Markets Update, hosted by Mr. Claudio Descalzi, Chief Executive Officer. [Operator Instructions]. I am now handing you over to your host to begin today's conference. Thank you.

Good afternoon, and welcome to Eni's 2026 Capital Markets Update. Today's presentation of the 2026-2030 plan follows an exceptional year of delivery for Eni. In previous event, we have highlighted the consistency of our strategy, our execution at pace and our capital discipline that drove the outcome. Today's update will again be anchored on these themes, making us confident in the progress and delivery over the new 5-year strategic window.

As you will be familiar, four connected and synergistic pillars underpin our strategy. The first pillar is E&P, where we have an outstanding portfolio of assets largely originated from our exploration activity in a combination of infrastructure-led near-field and high-impact opportunities. This feeds a growing business with an outstanding time-to-market track record and held a deep geographically and geologically diversified portfolio.

The second pillar is the creation of material diversified transition businesses, high growth integrated with customers and self-funding. The third pillar is technology, which helps to make REMP so distinctive and is the core driver of our transition business. Technology, we also open new opportunities in areas such as CCS, stationary batteries and low carbon power. The fourth pillar is our corporate structure and financial strategy.

The satellite model continues to unlock value, aligning capital, opening a large set of optionality and supporting growth. We continue to secure strong partnership with important investment firms and national champions. We fund our growth and deliver competitive free cash flow and highly attractive returns to shareholders while maintaining the lowest sustained leverage in our company history. And we increased the value of our participation in listed companies through dividend and share appreciation.

To deliver these objectives successfully through the cycle requires a consistency of purpose and strategy. At the same time, aimed rapid change and volatility is also essential that we are agile and innovative and afraid in challenging mainstream models and all conventions. I want to emphasize ours is a full industrial strategy. We own resources, assets and projects that visibly underpin our growth objectives. We will deliver the secure, affordable and progressively low carbon energy our customers demand.

And importantly, we have the skills, the know-how, the technology and the people to deliver those projects. The credibility of our outlook is enhanced by our track record. Last year, I promised that the momentum we have built through 2024 would be carried in 2025. As shown by our results reported last month, we delivered on that promise and more providing important proof points for us.

First, growth in each of our businesses in the upstream with a particular focus on LNG in biorefinery and renewables. This growth has been a defining feature of 2024, 2025 and is distinctive to Eni. The outlook for continued growth was underlined by our sector-leading reserves replacement ratio. The rising renewables generation integrated with clients and biorefining capacity supported by our agri feedstock.

Second, enhance financials. We delivered stronger-than-expected cash generation. We optimize cost and working capital. And we also strengthened our balance sheet with lower gearing now down to 14% from 18%. Third, enhanced distributions. Eni was unique among its peer group in raising its buyback during 2025, confirming our commitment to share upside with our investors. And fourth, Eni shares delivered as a sector-leading shareholder return, 50% through 2025 in U.S. dollar terms.

Our 2026-2030 plan envisages in summary, E&P growth of 3% to 4% CAGR, powered by the deepest and most diverse project portfolio in our history. Along with continued exploration success, this will support growth and provide optionality in 2030. The new barrels will be highly accretive to free cash flow. Margins on equity production will be fully captured along the value chain, and we expect to see material ROACE improvement.

In our transition businesses, Enilive is now executing on a significant portion of projects to triple biorefining capacity by 2030. Similarly, Plenitude is on track for a near tripling of renewable capacity, increasing its customers' base by 50% by the end of the decade, while our plan to deconsolidate the company will provide it with significant scope to invest and grow efficiently.

Leveraging integration with clients, both businesses will materially grow earnings and provide a valuable balance to Eni's result. Our financial outlook sees disciplined growth focused investment. CFFO is expected to grow by around 50% to EUR 17 billion by 2030 and combined with the disciplined CapEx yields free cash flow over the next 5 years, equivalent to around 70% of our current market capitalization.

With sustained historically low gearing, this leaves room for us to enhance our distribution policy, targeting to allocate 35% to 45% of CFFO to distribution through a combination of dividends and buybacks with scenario and performance upside. Our E&P business is outstanding and integrating gas trading and power activity, we aim to capture the maximum margin from our equity production.

Exploration is a distinctive feature for our E&P and is Eni's main value generator as we showed in the past in terms of higher success rate, low cost per barrel and dual exploration valorization. Since 2014, we have averaged source addition of 900 million barrels a year or 140% of our annual production at $1 per barrel, totaling around 11 billion barrels. These additions have come from multiple geographies, more than 20 countries and different plays, emphasizing the strength of our exploration process.

Value is realized by accelerating discovered resources into P1 reserves as shown by our sector-leading 167% reserve replacement ratio in 2025. Our expectation is to average over 140% reserve replacement ratio over 2026, 2030 as we sanction new projects. We also retain and use the option to go for early valorization of a portion of our discoveries, derisking economic returns.

In this respect, we have realized more than $13 billion since 2013 through dual exploration. 2025 was another good year for exploration with important discoveries made in Namibia, Indonesia, Angola and Norway. We added 900 million barrel in line with our annual average track record. In 2026, we will be active in West and North Africa and Norway and Southeast Asia.

We will continue to add new opportunities as, for instance, we recently did in Uruguay in partnership with YPF. In fact, 2026 has got off to an excellent start with discoveries announced on Block 15/06, offshore Angola, Calao South offshore Cote d'Ivoire and Libya with more than 400 million barrels discovered so far.

Our E&P business will deliver high competitive operational and financial performance over the plan. Our production growth is accelerating. Volume growth since the 2022 has been sector-leading and will be even higher through the plan. We will deliver reported production CAGR of 3% to 4% to 2030, leaving room for continued discipline and value-enhancing dual exploration valorization and high-grading actions.

Just as importantly, we are transforming our portfolio as we grow it. Indeed, thanks to an average internal rate of return of around 20% for new projects and overall portfolio breakeven of less than $30 per barrel by 2030, we expect to raise ROACE to around 15% and reach a free cash flow per barrel 50% higher than 2025. Our portfolio is also improving in terms of geographical diversification and production mix.

We are adding greater exposure to Southeast Asia and the Americas that will make up more than 30% of our P1 reserves base in 2030. And over the same time, LNG shares of production will increase by 11 percentage points. Finally, alongside our operational and financial performance, we will continue to reduce our emissions. We have cut our Scope 1 and 2 upstream net emissions by 68% since 2018, and we expect to achieve 0 routine flaring this year.

Turning in more detail to our E&P portfolio. Our opportunity set is the best in the company's history. Thanks to the depth and breadth of our portfolio, spanning geographies and technologies, we have 850,000 barrels per day of new production at 2030 from projects under development, of which around 90% operated by Eni or one of our satellites.

And now I want to shed more light on 2 of our major projects, starting with our JV with PETRONAS. Just over a year ago, we announced the transformational partnership with PETRONAS in Indonesia and Malaysia, countries optimally positioned to supply key Asian markets. The agreement was finalized in November and is expected to complete at midyear. As previously disclosed, the JV to be named Searah will on completion have a production of more than 300,000 barrels per day, rising to over 500,000 barrels per day of production by 2029.

It combines our Kutei Basin assets less 10% stake to be valorized to a third party in 2026 with a portfolio of PETRONAS production, development and exploration assets in Indonesia and Malaysia, located offshore Sarawak and Peninsula. Combined, this portfolio includes more than 3 billion barrels of discovered reserves and 10 billion barrels of unrisked exploration potential.

Searah will act as a holding company for 3 operating companies for any legacy activities, the PETRONAS Indonesia and PETRONAS Malaysia activities. By virtue of its strong organic cash flow, it is expected Searah will be investment grade and self-funding in addition to paying dividends to its shareholders, similar to our other E&P satellites. Focusing down on the assets in the Kutei Basin in the South is our Jangkrik FPU, which will reach a plateau of over 700 million scf per day that will be maintained into the 2030s by virtue of additional trains such as [ Mel ] and Gendalo and Gandang.

The northern hub will initially see the development of Gen and Guang, where we have just taken FID based around a newbuild FPSO with 1 billion scf per day gas and 90,000 barrel per day liquid capacity due on stream by end 2028. Northern Hub gas will be supplied to the Bontang plant and the engineering studies are now underway to reactivate the fourth train.

Turning to the PETRONAS assets. This include around 20,000 to 30,000 barrels per day of mainly oil production offshore Peninsula assets and offshore Sarawak. The PETRONAS asset initially contribute around 230,000 barrels per day of production split 90% gas and 10% oil. Looking further ahead, there is also considerable upside from the exploration potential in both portfolio. We recently made the Konta discovery close to Geng North, and we have other exciting prospects to be drilled this year.

In its initial form, Searah is already a material player in Southeast Asia. Our entry into Argentina as a partner of YPF originates also from our track record in project delivery and cost-efficient floating LNG. We are the largest players in floating LNG worldwide with 3 plants already in operation in Mozambique and Congo and the fourth under construction for the development of Coral North.

Our Argentina LNG project will produce around 1.8 bcf of gas, exporting 12 million tons per year from 2 floating LNGs. In addition, the acreage will produce around 200,000 barrels per day of liquid shale resources. Our position will be integrated right along the value chain. With our partners, YPF and XRG, we are targeting FID later this year with first production in 2030, contributing to growing visibility of our production beyond 2030.

Based on the Vaca Muerta resources and our technology, we expect to be able to deliver LNG at a highly competitive cost of supply. Our upstream is a distinctive feature of Eni. But another differentiating factor versus our peers and something that is changing the profile of Eni itself has been how we have seized the emerging opportunities of the transition. A particular feature of our transition satellite is the combination of growth component, renewables and biofuels with a value one represented by our customers.

We have created high-growth self-funding companies that as proved by recent transactions, bringing in aligned funding capital have an aggregate enterprise value of over EUR 23 billion. Together, these 2 companies will generate an EBITDA of around EUR 5.5 billion by 2030. The recovery in European bio margins since the second half of 2025 has demonstrated the value of Enilive with the combination of this biorefining and retail marketing.

We remain very positive for the prospects of biofuel as the only realistic solution to cut emissions from hard-to-abate transportation sectors. A notable feature of the Enilive plan is the construction of new capacity now underway. We are currently the largest developer of new capacity worldwide. The conversion of the Livorno refinery was joined by the construction now underway of both Pengerang in Malaysia and Daesan in South Korea.

Earlier this year, we confirmed the FID of a biorefining line at our Sannazzaro conventional refinery, and we announced the partnership with Kuwait to develop a new biorefinery in Priolo. Net to Enilive, this is 1.8 million tons of new capacity expansion underway, more than doubling capacity and over 50% of the amount required to meet our 2030 target of 5 million tons.

We also confirm that within the total, we will have more than 2 million tons of SAF optionality. Of course, the uniqueness of Enilive lies in its integration. In 2025, we expanded our Agri-Hub activity, supplying around 200,000 tons of feedstock to our refineries, around 10x of the 2024 volumes. Over time, we will reach around 35% of our domestic need in this way. And our retail business will continue to play a crucial role in terms of both physical integration and cash flow.

We still expect Enilive to roughly triple EBITDA from EUR 1.1 billion in 2026 to EUR 3 billion by 2030 with ROACE to exceed 15%. This rate of growth and financial performance emphasizes and underscores the recent post-money valuation of EUR 11.75 billion that we recorded in our deal with KKR for a 30% stake. Uniquely, among our peers, we have built a stand-alone sustainable business model for our renewable activities.

In less than 5 years, we have reached 5.8 gigawatts of installed renewable capacity, balanced with 10 million customers. All of this has been achieved with a net cash benefit to Eni, thanks to a sales proceed of around EUR 3 billion and the cash generation associated with our customer base. For 2026, we expect an EBITDA of EUR 1.3 billion, a 20% growth versus last year with 6.5 gigawatt installed renewables capacity and 11.5 million clients, following the acquisition of ACEA customers portfolio.

We have now entered a new phase in which Plenitude's growth plan will continue, and we want to ensure that there is no conflict with other investment opportunities in Eni. As we reach this already material position and now look to build out the Plenitude model towards 15 gigawatts and 15 million clients in 2030, we are focused on the most efficient capital structure for the company.

In this context, we present the plan for the deconsolidation of Plenitude, involving a EUR 1.5 billion nonproportional capital increase to be subscribed by the shareholders. We intend to work towards a governance structure that empowers Plenitude to reach its own growth target, optimizing its leverage. The consolidation applied by Q2 has a positive effect on Eni gearing of 4 percentage points, while reducing in 2026, our CFO by EUR 400 million.

Alongside exploration, technology represents a key value generator for Eni. Since 2014, we have been strengthening our R&D with 7 research centers covering all businesses as well as our partnership with universities, research institutes and start-ups. And through technology, we have created material value, both in E&P and in transition businesses. Our technology and know-how underpin our 5 years plan and position us for the longer term in key activities.

Looking ahead into the 2030s, our E&P resources, coupled with our high-performance computers and proprietary algorithms, including AI, provide us with the optionality to respond in the right way to oil and gas demand. This is especially true for gas, where through our proven know-how and skills, we are also the global leaders in floating LNG. At the same time, technology is at the core of our transition activities. Our renewables paired with the stationary batteries will continue to grow significantly to satisfy our customers' demand. And biofuels and CCS will keep supporting the decarbonization of hard-to-abate sectors while preserving existing infrastructure and jobs.

Alongside these already available technologies, in the future, Fusion will play a key role in the energy sector. And we are really positioned to capture this upside since we are a strategic partner and the main investor of CFS, the world-leading private fusion company. And now I leave the floor to Francesco for the financials.

Thank you, Claudio. Our objective is to optimize a balance of growth and attractive returns on investment that maximizes value for investors. The growth in our plan accounts for around 60% of total gross CapEx with the satellite key enabling that investment. Our gross CapEx plan calls for an investment of EUR 7 billion in 2026, 18% below 2025 levels. Over the plan period to 2030, we plan to invest around EUR 29 billion in gross CapEx at an average of just under EUR 6 billion per year. This compares with more than EUR 8 billion per year in the 2025-2028 plan.

When compared with last year, around 70% of the change is accounted for by foreign exchange, around 50% is perimeter and the remainder is efficiency spend split evenly between a fast-growing upstream and other businesses. M&A actions and high-grading of our portfolio received significant attention from us. We expect to generate valorization and divestment receipts right across the plan and net CapEx will average around EUR 5 billion per year.

As we proved last year, this is a risk amount, and we should expect an upside to our base case in terms of valorization action. Material free cash flow enhancement and per share growth are a distinctive quality of Eni. We expect to generate over EUR 70 billion in CFFO over the 4-year plan with annual CFFO growing to EUR 17 billion by 2030, 36% higher than 2025. This equates to a 14% CAGR on a per share basis.

For 2026, at our reference scenario raised to $70 a barrel, we expect to make around EUR 11.5 billion of CFFO. This reflects the perimeter effects associated with the deconsolidation of Plenitude, a more normalized cash tax rate and lower run-off contribution, mainly in GGP and power. As a result of our advantage project, CapEx discipline and contribution from satellites, we expect to convert our cash flow from operation into free cash flow of more than EUR 45 billion in the period. This is equivalent to around 70% of our current market capitalization or over half of our entire enterprise value.

It is a remarkable dual outcome also alongside the larger and more valuable Eni in 2030 that we have described. We expect to efficiently grow our upstream, capturing increased margin from a progressively high-graded portfolio. Our transition businesses will expand having significant scale and profitability. In addition, we are taking continuing action on cost management and simplification and of course, performance improvement in our transformation activities. We have raised our cost reduction target for 2024, 2027 to EUR 2.3 billion from the original EUR 1.8 billion.

I have also said that our objective is to deliver growth, but also higher returns on capital. We can reaffirm we expect to generate around 13% ROACE by 2030, a strong outcome for a business with option to continue to grow in a highly competitive fashion. Our scenario for 2026 is set out in Slide 28 and uses $70 Brent and EUR 36 megawatt hour for TTF.

At the end of 2025, pro forma gearing, including announced but not yet closed transaction was 14%. We expect gearing to remain around this level between 10% and 15% over the course of the plan. This equates to a net debt on EBITDA in the range of 0.5, 0.85. Since 2018, we have cashed in EUR 15 billion from our satellites, and we expect a further EUR 16 billion over the plan. Our 2 listed E&P stakes are worth now over EUR 8 billion and our 2 main transition satellites market to market at over EUR 23 billion, emphasizing the considerable underlying asset value that underpins our company.

I want to reaffirm that the dividend is our first priority within the capital framework. The Board will propose a 2026 dividend of EUR 1.10 per share, a 5% increase on 2025 and consistent with our track record of dividend growth. I also confirm that as we develop new material sources of cash flow and as we reduce shares in issue, the cash breakeven of our dividend will reduce. Our average breakeven over 2026, 2028 is under $50 per barrel and under $35 per barrel over the whole plan.

This means that the quality as well as the quantity of the dividend rises, meaning it gets materially more valuable in the hands of our investors. The second component of our shareholder distribution is the share buyback. Our shares in issue have reduced by 17% since 2021 as we ensure flexibility in our capital framework, share performance and scenario upside. In our new plan, we will now look to distribute a higher figure of between 35% and 45% of our cash flow from operation to reflect the higher weight of our satellite entities, up from the previous 35%, 40% range.

The increase in the payout that we are announcing today acknowledge the changing structure of our cash flow from operation, which is made up of both consolidated cash flow and satellite derived free cash flow. As a result, the 2026 dividend is complemented by a EUR 1.5 billion buyback, bringing the overall payout to 40% of CFFO. Thirdly, we also confirm that we will share cash flow from operation upside with shareholders as we have done previously. In the case of higher-than-planned CFFO up to $90 Brent, we will continue to distribute 60% of incremental cash flow as an extra buyback as we have done before.

But in addition, we are now introducing that in the case of scenarios where the average Brent price for the year exceed $90 a barrel, the full incremental cash flow above this level will be distributed as an extraordinary dividend. A similar mechanism will apply to gas price and refining margins when they exceed the plan assumption by more than 50% -- the assessment of the expected annual scenario and any extraordinary dividend will be made in the third quarter with a single payment scheduled for the final quarter of the year.

For example, assuming $90 Brent and EUR 45 megawatt hour TTF, we generate a cash flow from operation over EUR 14 billion and as a consequence, would more than double our buyback. Over 2023 and 2025, our distribution were equivalent to a total shareholder yield of 11% on the average share price. We distributed around EUR 15 billion or more than 30% of the average market capitalization.

Our market capitalization has also risen 70% from January 1, 2023, equating to an analyzed total shareholder return of 26%, the leader among our peers. Competitive return to shareholder and capital appreciation are precisely the combination we aim to deliver again over this updated plan.

And now I will return the floor back to Claudio for his final remarks.

Thank you, Francesco. In conclusion, energy markets are changing, and they continue to be volatile and unpredictable. Our strategy, however, is consistent. What is clear to us is that there are real opportunities to grow and deliver value. Our strategy and our new plan to 2030 show how Eni will achieve this. Our track record provides assurance that we will. We will grow our E&P business from what is now an outstanding portfolio of projects and resources in terms of both depth and quality.

Alongside, we are building new business in the transition, providing the low-carbon energy our customers demand. These businesses are already very material in value and add to the balance and diversification of Eni. Crucially, we have developed the people and the technologies to deliver on these opportunities in both business areas. Nor are we neglecting the longer term with our core activities very well placed for the 2030s and beyond and emerging opportunities such as CCS and Fusion, led by our technological strength being developed.

All of this is secured by a high robust financial position, the strongest in our history, designed to fund our projects with a focused capital budget, managing the cycle and the volatility. For our investors, we offer highly visible growth, generating capital appreciation alongside a very attractive distribution. The growth and diversification of our company's cash flow plus our balance sheet strength underpin the secure and growing dividend that is our first priority. It is combined with the share buyback and now an extraordinary dividend commitment that confirms our disciplined management of capital with the promise confirmed by our previous action to share the cash flow upside. Now after a brief video, I'm ready to take your questions with the rest of Eni's top management.

[Presentation]

[Operator Instructions] I now leave the floor to Mr. Jon Rigby for the Q&A session.

Thank you. Hello, everybody, and welcome to the Q&A session of this year's Capital Markets update. I'm here in Rome with Claudio and Francesco and the rest of Eni's top team. We're going to move into the Q&A. So normal rules apply. If you can keep the questions to two, as a courtesy to everybody that will be very much appreciated, and we'll try to get around to everybody. You should have time to do that.

With that introduction, let's get to it. And I think the first question in the queue is from Biraj at Royal Bank of Canada. So Biraj, if you'd like to kick us off?

Thank you for doing this presentation with everything going on. I appreciate it. The first one was just on the production guidance. Before you previously used to guide on a sort of reported basis and then an underlying basis, and there was an assumption for farm-downs and portfolio changes. And now you're giving the 3% to 4%. So can you just help me if something changed in your thinking of how you're going to manage the portfolio and whether that was a fair comparison?

And secondly, just on the exploration front, this is clearly your main competitive edge in the upstream, and you've done extremely well over many years and very consistently. Just wondering if you could give us some context on your plans over the next couple of years and whether you're looking to increase the risk profile of the exploration campaign towards more greenfield away from brownfield? Or are there any changes there?

Thank you, Biraj. On production, indeed, we are guiding a 3%, 4% reported to 2030, which is better than what we guided last year, which was 3% to 4% underlying and 2%, 3% reported. So there is an upgrade on the guidance. While as far as the exploration risk, we are almost maintaining the same balance between the high-impact and ILX near-field lower-risk prospects. What we are doing is to continue to focus on the core areas like the North Africa, East Med, West Africa, Southeast Asia, but we are adding some new basins like the South Atlantic margin in South America and the transfer margin in the West Africa.

Just to go back to the production question and you asked what is changed respect last year. As you saw, we made different discoveries. We made discoveries in Indonesia, and we sanctioned projects that enter in the 4-year plan. So there is a different kind of dynamics for '26 because we have also Indonesia and the business combination, and we have new projects. So the exploration discoveries and the business combination are the 2 different points that changed respect last year forecast.

We're going to now move to Josh Stone at UBS.

First question on -- come back to the growth profile because clearly, Eni is long resources, and that's now a very significant advantage in this new cycle. But the rate of growth is ultimately choice of spending. And maybe just talk about the factors that led you to decide this 140% average reserve replacement rate and why that's the right number? And also, what actually -- I don't know if I hear it, but what actually drove the increase of the growth rates up to the 3% to 4%. What's driving that?

And then second topic, I mean, just current events and I presume you may have some exposure just through either chartered vessels or otherwise. So I was wondering if you might be able to share your view on how likely you think the Strait of Hormuz can be reopened in the coming weeks, if that's something you have any views on? And also just how you're managing that situation as a result?

Sorry, Josh, you came through a little bit muffled. So I'm going to try and interpret the questions for you for the panel. So I think the first one is for Guido and it's about terms of replacement and production growth. The second was about the Strait of Hormuz.

Yes. Just building on what just Claudio said earlier, we had a significant amount of discoveries, and this will turn into reserves over the plan while we are FID projects. And the main country for growth, of course, will be the Southeast Asia with Indonesia, which is remarkable, but also we'll have Argentina, we'll have Ivory Coast, Nigeria, and we'll have Mozambique also. And so basically, this 140% of reserve replacement is mainly driven by our organic growth, which is driven by the exploration discoveries.

So for the second question about the Strait on the Gulf and the cargoes, I can talk about our position over there. So we have a, I can say, a marginal position from a production point of view. We account for between 2% and 3% of our production. And we can say maybe less in terms of cash flow and EBIT at our scenario. We have more development project than production. So at the moment, the situation, you know very well from our point of view that we can say that impact is not so big.

I don't know if you can still hear me if the line is any better. But on the first question, just asking where the increase of the growth rate is coming from, so the extra 1%. I don't know if you can answer that. And on the second, if you have any view actually, if you have any vessels stranded or any chartered vessels or if you have any view on how likely the Strait can be reopened. And apologies if you can't still hear me.

Okay. On the end of -- I mean, the growth at the end of the plan is essentially Argentina, while this year, as Claudio pointed out, is essentially the growth coming from the start-up ramp-up made in the last year, which are the project in Norway, the ramp-up in Congo and Ivory Coast and the business combination in Indonesia, clearly.

Perhaps, Josh, I'll come back to you on the logistics question on shipping, et cetera, if that's okay. What we'd like to do now is move to Michele Della Vigna at Goldman Sachs. Michele, are you on the line?

The first one on the GGP target for this year. I was wondering if perhaps you're not being a little bit too conservative given all of the volatility that we're seeing at the moment, and it feels like your portfolio is ideally positioned to capture it. And then secondly, on the growth target, very impressive top of the group. I was wondering if you could split it between oil and gas.

We'll start with Cristian.

Yes. So on the target, I think the guidance that we have set is consistent with the -- any scenario, which sets TTF at around EUR 36 per megawatt hour and takes into consideration, let's say, the situation in the Gulf as we speak on our supply. But clearly, I mean, as, let's say, the time goes by and prices and volatility might, let's say, result in a different scenario. This will actually allow us to take much more opportunities from the market and so to allow to manage better our assets and to get more value out of our asset base.

As far as concerned, the production growth, if we take an helicopter view over the plan, we will be almost flat on the liquids, flat on the pipe gas and all the increase, all the growth you may have spotted in one of the slide that we will increase 11% our LNG production. So that's in a very nutshell, where the growth lies.

We're going to now move to Alastair Syme at Citigroup.

I had a couple of questions on Slide 21 on the cash flow growth, the sort of the $17 billion in 2030. I wonder, I think, Francesco, you made some comment about the cash tax rate. So maybe you could just tell us sort of what rate we should assume in 2030 versus where it was in 2026? And then secondly, on the next slide, Slide 22, you've given all the cash in from the satellites over the period. But maybe just talk a little bit about how that's phased? Is it sort of more of that -- should we just divide that number by 4? Or is a bit more of it coming in the back end of the profile?

Yes. About the cash tax rate, first of all, I would like to mention the tax rate first, that is the one that you have seen last year was in the range of 45%. You could expect this keeping a similar range in the coming 2 years, 3 years, then dropping because contribution from business combination clearly helped to reduce the tax rate. In terms of cash tax rate, the weight of the tax rate in this case is in the range of 23%. Again, we will have a similar trend, so relatively steady level and then dropping on towards below the 20% versus the end of the plan. About the second question, I missed a bit the concept.

It was really about the cash in from the satellites. You talked about EUR 16 billion expected cash-in.

Yes. The cash from the satellites, you know that we were accumulating cash last year in the range of EUR 2 billion, above EUR 2 billion and through the dividend. Clearly, by expanding the magnitude and the number of satellites, this will grow progressively. And what we expect in the coming years is substantially to double that amount, that contribution along the full year plan.

Okay. So assume roughly EUR 4 billion in 2030.

That is a good proxy, yes. Clearly, in our scenario.

Jon, just the question before on the cargoes in the Strait, so we can say that we don't have any cargo. So Eni doesn't have any cargo now.

Okay. So hopefully, Josh, that answers your question. We're going to move now to Alessandro Pozzi, Mediobanca. Alessandro?

I have one on chemicals. I was wondering if you can give us perhaps a new guidance on the breakeven for the division? And the second question on cash flow guidance for 2026. If you can take us through the main moving parts for the 2026 guidance versus 2025.

Alessandro, Adriano speaking. I mean, concerning the chemical scenario compared to the previous one, we have seen some deterioration and particularly for some stagnation in different markets and also some lack of rebound of demand in addition to higher cost of feedstock for the chemical industry. So this will have corresponded to 2 years of delay in our breakeven of EBIT, but we are putting in place additional actions in order to mitigate 1 year at this moment. And so we expect the breakeven delayed by 1 year on EBIT side.

About the comparison between the 2 years, '25 and '26, cash flow from operation, we have to keep in mind that last year, we benefited of a few material one-off factors, mainly in the powers, in GDP and also in E&P. And this year, actually, we are also having the impact from the second half of the year of the EUR 400 million of cash flow from operation that will be the net effect of moving Plenitude as a dividend contributor instead of cash flow from operation. For this reason, for example, we have raised the range in terms of distribution up to 45%. So overall, this year is actually an improvement like-for-like, moving all these one-off factor by around EUR 700 million versus last year.

Thanks, Alessandro. We're now going to move to Paul Redmond at BNP. Paul, if you're online.

Two questions. First one, just on Enilive. So you've included a scenario assumption for refining margins, which essentially full and then plateau from 2028. Can you give me an update on your view on renewable fuel margins out to 2030 and whether that's different to what you're highlighting in your refining margin scenario? And then secondly, on divestments. So you're guiding to gross CapEx of $29 billion, net CapEx of $25 billion. That's $4 billion of divestments is how I read it, and you've got about $2 billion of those coming in 2026.

So I think if I think about the remaining 4 years, you're not guiding to much in terms of divestment. How do I read that and how you're thinking about your portfolio? Does that just mean you're comfortable with where the portfolio stands, your equity positions in assets, your current equity position in satellites? So yes, just should we -- are you happy with your current portfolio and we shouldn't see opportunity for divestment over the next 4 years?

Yes. Thanks for the question. On biorefinery margin, we see increasing margin along the 5 years business plan. And this is going to be driven by strong fundamentals. Demand, first of all, is expected to grow significantly above EUR 20 million 2026, above EUR 40 million 2030. And this is again driven by policy defined and under deployment. I won't touch it single policy, but just to mention the Renewable Energy Directive #3 from 14 to 29 already in place. And in U.S., a target that has to be approved soon in terms of increased renewable volume obligation is expected, let's say, in weeks. And it's going to increase by around 40% demand.

We are already seeing expectation, market move upon expectation. RIN it's already $1.5 per RIN, so pretty much $1 above the level we reached in previous year and margins are already significantly increasing. I have to say that on the business plan, it's not just a matter of scenario, but actually, we are pulling all value creation levers in order to maximize results. It's capacity driver, but actually, it's also product optionality like SAF. It's feedstock flexibilization. We are focusing a lot on maximizing the kind of feedstock we can process to maximize value. And then there's going to be a strong contribution from the agri production that give us the unique competitive advantage of being fully integrated along the value chain.

Yes. About the portfolio, first of all, it is important to mention that this year, we described a set of operations that are covering EUR 2 billion as an extra benefit, but actually it does include the benefit of the deconsolidation of Plenitude that is not a typical M&A, but has a similar effect in terms of deleveraging. So if you add that in terms of net effect for the year is more than doubling the amount of 2026.

Similarly, the amount over the plan will be almost double if you take into account of that. And you have also to consider, as we mentioned last year, that we present every year a plan that has a degree of visibility that is progressively improved year after year as a risk component because we don't want to overpromise and instead we prefer to over deliver and you have to take into account that through exploration and through portfolio optimization, we continue to generate optionality inside the portfolio. So we are happy with our portfolio, but we are happy also the optionality that is embedded in that portfolio.

Thanks, Francesco. Thanks, Paul. We're now going to move to Matt Lofting at JPMorgan.

Congrats on the update. I think it's very reflective of the strength of strategic execution that Eni has delivered over the last few years. I wanted to just ask you the 140% reserve replacement metric within the upgraded growth stands out. What are the sort of the key project FIDs or sanctions over the next few years that are required to deliver on that ratio and whether there's any sort of particular projects that sort of stand out disproportionately from that perspective?

And then secondly, it struck me that it was an important point on distributions that you made on the rising quality of the dividend as the cash breakevens fall. How are you thinking around the value proposition of the buybacks as the shares continue to re-rate? And to what extent is the move to 100% extra dividends over $90 reflective of that balance in terms of value of buyback versus dividend back to shareholders?

Yes. So as we've highlighted today, we have the strongest, the largest, deepest, most diverse pipeline of project in our history. Of course, this outstanding replacement ratio is driven by some super major projects like Argentina LNG, Indonesia, where we have just taken 2 very important FID, Ivory Coast, Mozambique, Nigeria, Angola and of course, Congo. And then just to give you some data point, our proven reserve life index is about 11 years. But if we include probable and reserves associated to the project under maturation, which you have seen in one of our slides, this reserve life far exceed 20 years.

So it comes from, as I said before, exploration, but also our ability to deliver cost competitive project. It's not enough just to discover it, but you have to then turn into -- you have to turn the resources into reserves. And we have turned more than 60% of our resources into reserves in the past year with an outstanding time to market and also an outstanding delivery on cost. Just recently, Wood Mack has issued a report where we are among the top leader, the top in the exploration, but the top also in the development of those resources.

If I can add something about the capability to put in production new projects. It's true, we have been very fast. So we increased the IRR, but also that comes from the -- our exploration strategy because our exploration strategy is really to focus our exploration, reducing the risk where we have facility installations. And that clearly reduced the cost, but also the possibility to go through the replacement of reserves very quickly. So everything starts from the strategy that we applied in exploration in the last more than 10 years. So that is another reason of low cost and the rapidity through which we can get this life index and replacement ratio.

About the buyback versus the dividend or the scope for the buyback, clearly, we -- I think that is almost a few years where we proved that we are keen or able to share any upside with our investors during the year. So we set at the beginning of the year, a conservative approach towards distribution, but this is a floor that is promises that we recognize immediately.

And then during the year, we execute our plan, we improved, we do better, for example, in production, in disposal, in execution. And on the other side, there is sometimes improvement of the scenario. Actually, in the last 2 years didn't happen. Actually, the scenario dropped during the year. And in any case, we're able to distribute more and more through an increased share that we dedicated to the buyback with the target of a 60% increase or the increase of distribution percentage.

This year, we thought that due to the exceptional conditions we are facing in the market, we will be probably in a situation where there is a continuous potential improvement in terms of the magnitude of the buyback, but the possibility to execute a buyback is becoming less and less effective as soon as you are proceeding and becoming bigger, the amount of cash flow that you have to use, because clearly, from that point of view, there is a limitation in terms of trading per day of share that you could buy.

For this reason, we thought that in a scenario that is above the $90 billion -- sorry, the $90, we will be able to distribute more. In this case, we thought that one-off payment that will occur in the fourth quarter decided in the third quarter will be a way to execute even that amount of additional distribution and taking into account of gearing and the overall strength of the company in terms of investment opportunity, we thought that the one-off dividend, special dividend would be the more appropriate solution for sharing that upside.

Thank you, Francesco. And -- thank you, Matt. We're going to move to Lydia Rainforth at Barclays. Lydia?

And 2 questions, please. Just coming back to obviously what is an impressive upstream portfolio. You've talked in the slides of the FID schedule slippage being 5% versus the industry average of 15%, the FID cost growth lower as well. Just as you're doing more and more projects, how do you make sure you can keep that discipline?

And then the second one is probably more for Francesco and just to help me with my math. Obviously, we're talking about returning 100% of additional cash to shareholders in the form of extraordinary dividends above $90. And I think you talked about that being a EUR 14 billion cash flow from operations. But obviously, we do have higher natural gas prices as well at the moment, higher refining margins. So are we thinking that it's basically it's 100% of any additional cash flow over that EUR 14 billion level that gets returned. So even if the oil price is a bit lower, but gas is a bit higher, that's how it should work.

On how we keep track of this record and discipline, I like this word discipline on the delivery. Of course, we are building on our track record. We have the skills. We have the competencies. We've said several times that we never laid off people. We always took in-house the core competencies G&G engineering production guys. So we've maintained these competencies. We have an edge on technology. We have an edge on the super high computational computer.

We have a edge also on the geographical diversification and also the diversification of the production mix, this recent edge on technology, of course. And it is a consistent track record. In the last 10 years, we've been the second largest in terms of FPSO built -- and we're just the second to Petrobras. But if we compare with our peers, we are by far the largest in terms of FPSO and floating LNG. So we are training our organization. We've trained our organization to build these kits all along the year. And what is in front of us is exactly the same. We have to continue to build FPSOs, floating LNG and do the same and the same.

No, I think that really share what Guido said. We had to -- when we talk about 20-year company, Eni grew organically. So we grew through the -- our industrial action, our projects. And in the last 15 years, we did really differently because we in-source competencies. We increased technology, we invest in R&D, and we invest in our capability to grow organically. Clearly, we have exploration, but we have also the development. And that is why in the last, I think, 10 years, from a time-to-market point of view and the number of projects, we are the first in the industry, also considering that maybe other grow in one country, we are growing in at least 6 different countries.

We have exploration and big success in exploration in at least 6, 7 countries. So that is, I think, that in E&P, we made clear choices some times ago, at least 15 years ago. And now we are consistent. We don't change. And that is one of the reasons why we are sure that we can keep going with this kind of trend and positive results.

About the buyback versus the extra dividend in terms of scenario, we not limited, as we said also during the presentation, the $90 is a trigger for the extra dividend. But potentially, you could have a scenario where the average is $88. But on the other side, you have a gas price or a refining margin that is much higher. Even in that case, we will distribute that excess cash flow, 100% as an extra dividend. Just to give you a ratio, is substantially 50% above the current scenario of -- sorry, the current assumption in gas and [indiscernible] it means $9 as a refining margin and around EUR 54 per megawatt hour for gas. These are the 2 equivalent number for the $90 Brent.

Thanks, Lydia. Actually, just to add to what Claudio and Guido said is there was a nice stat in the slide pack that we got out of them that 90% of all the future production under development is either operated by Eni or one of Eni's affiliates. So the control over the pace of growth is very much in our own hands. I think it's fair to say. So thank you, Lydia, for that. And we're going to move to Mark Wilson at Jefferies. Mark?

All right. On the growth to 2030 in the plan, the increased growth, LNG led, -- could I ask, firstly, is or are both Argentina FLNG vessels included in that target? And I also note there has been talk in various publications of a third Mozambique FLNG vessel. I'm just wondering if that is a potential, maybe not for 2030, but very close to it. That would be my first question. And then if I'm allowed a second one, it would be about the Searah business combination. I thought you said in the presentation, this included all of PETRONAS production in Malaysia. I'm just checking if that is the case. And also, if you could speak to just I think how precedented it is for such a satellite setup with an experienced NOC like PETRONAS, if you could comment to that and how the management of that business will be set up?

On the growth, mainly LNG driven, I'll give you just a view on the upstream component, and then I'll leave to Cristian to elaborate a bit more on the commercial and the midstream part. So you rightly spotted is Argentina will play a role in the plan, but most of the Argentina growth and ramp-up will be beyond the plan. So we have other projects. We have Mozambique. We still have the ramp-up in Congo and a few more other projects that will drive this growth up to 2030 but the -- of course, the Indonesian one, clearly, but the Argentina contribution will be largely beyond the 2030.

Yes. On the LNG portfolio, the one that we are going to bring to market, as you can imagine, the share of -- the big share of the growth is underpinned by our upstream projects, I mean, notably the Argentina, Cyprus, Mozambique, where we have Indonesia as well. So where we have an approach, which is mostly like equity lifting production. It depends on the country, but I mean, let's say, our share of production is then being taken in our portfolio to be then further marketed. And so we plan to have a 70% ratio in terms of equity LNG production into our overall contracted portfolio, which we expect to exceed the 20 million tonnes by 2030.

And just remind me, Mark, the question on Searah.

Yes. I just wanted to get a comment on just how precedented or unprecedented it would be for an experienced NOC like PETRONAS to set up a satellite itself like this with Eni. And just how much of that Malaysian production that PETRONAS runs is going into it?

So why PETRONAS so experienced, so good join Eni, that is the question. I think because they consider that they are good and they consider that in Indonesia, we discover a huge, huge amount of resources. As you know, the E&P satellite is based on 2 important elements and components. One is cash flow and then growth, so the future. And that was the reason. I think that is a good marriage because they have the cash flow now.

We have the cash flow as well in Indonesia, but we have the growth component. That is the reason. And then we are good partners, and we consider PETRONAS one of the best company. So that creates in the last 1.5 year, a good combination. We discussed, we analyzed, we operate our assets, they operate the assets. We are together, we consolidate, and we have a really strong future in front of us.

On numbers, I'll shed a bit more light on the -- of course, we will include in the business combination, all our Eni assets in Indonesia on production and assets and blocks in exploration, barring the 10% mentioned by Francesco that will be monetized and 10% of our production assets in Indonesia. While in Malaysia, we have 5 assets, 2 of which in Sarawak, which accounts for almost 70%, 75% of the total production, which will be contributed by PETRONAS, which is 230,000 barrels per day, while the remaining 25% comes from three assets in the Peninsula.

And I think we can probably help you with some modeling offline as well if you want to contact the team. So we're going to move now to -- and thank you, Mark. We're going to move now to Massimo Bonisoli at Equita.

I have two questions. One on the CapEx budget over the plan period. Gross CapEx is guided at EUR 5.8 billion average per year, so more than EUR 2 billion lower than the previous plan, driven by FX change in perimeter and efficiencies, if I got correctly. Can you detail the key drivers of the structural efficiency measures in CapEx? The second question is on Venezuela. What is the realistic pathway on monetizing gas resources there like Perla? And can you provide more detail on the timing and magnitude of potential cash recovery from Venezuela?

Okay. Just a few words about what you said about efficiency. As I said before, this kind of efficiency comes from our strategy and our model, as I said before. So we are organic, we discover. And then we are -- we have, at the end of the day, less CapEx. Why? Because we are using this CapEx. When we talk about -- okay, Indonesia is a case, but also Congo is another case. In Indonesia, we have just to develop the upstream because the LNG so Gandang is there.

So for Congo, I think we can consider the development then we have all the facilities closed. We are in the mature areas. So I think that is true also in Algeria or Egypt. So the capability to reduce CapEx is because of the strategy that we define at the very top. So of the upstream, that is operation with a very strategic view. We reduce not just risk, but we do also CapEx if we are so lucky to discover some reserves. So that is the main reason. And now we are entering because that is something that we discovered in the last 10 years, we are entering the development of all these resources. So now we can see a very strong efficiency in all our CapEx profile.

On Venezuela, I mean, you mentioned gas opportunity. Of course, recently, we have signed an agreement to continue production of gas in a sustainable manner in the country, which includes also opportunity to export some of this gas or a consistent part of this gas. We shall always remember that Perla is a giant reservoir, and we are just producing a little portion of it.

So there's a big room to improve. And equally, on the oil component, both the last general license 50 and the new hydrocarbon law provides for opportunity and room to increase also the oil activity in Venezuela. So we have a positive view of the country. Mood has changed and more will come for sure.

Thank you, Massimo. We're going to move now to Chris Kuplent at Bank of America. Chris?

One more follow-up, if I may, on Searah. What's still pending from here to closing in terms of equity participation? I assume that's been dealt with. Are you still potentially including a cash component before closing? So interested to hear what we're still waiting for. And then a more generic question. Looking at your commodity price deck underlying your 2030 outlook, $85 Brent, $9 European gas prices. What do you think will prove to be most bearish? Anyone who would like to take that? Happy to have a conversation, please.

I will take the easy part of the question, which is on Searah, what is missing. So first of all, no money transaction here. While the -- what is outstanding? We've just obtained the antitrust clearance, and we are waiting the customary approvals, which essentially are the approvals of the 2 governments of Malaysia and Indonesia, and while we are progressing the financing plan to self-fund the joint venture, which we expect because of the resource base because of the strength of the 2 shareholders and the quality of the asset to be an investor grade.

I think he's going to try the macro.

No, yes. I think that it's very difficult because you don't know what's going on and how long it will last. So which kind of damages every day, we wake up and there is a news that is deepening the complexity and the long-term effect of the crisis. Clearly, looking at what was discussed today or presented today, on the gas, sure, we are expecting much tighter condition than it was supposed. We had a reference by the Qatari about the potential, let's say, stop for a few years of certain trains of LNG.

On the products, you know that there is a relevant tightness and on products, there is more difficulties to have massive stocks to protect from the fluctuation of the prices. While on the oil -- on oil, yes, oil is impacted, but for a while, there could be some buffer through the strategic stocks. So if we have -- we would like to rank between these 3 gas products and there's oil as a potential list, but this is changing every day. So take these words as they are just for this second.

Thank you very much, Francesco. I appreciate the answer. And I'll call you up separately to hear what price forecasts you might give us in certain scenarios.

Thanks, Chris. I think just methodologically, I'll speak for us all here is clearly, we were in a very volatile environment. So I think the message we wanted to get across was the strategic direction of travel is unchanged. The downside is protected by a resilient financial framework. And I think as Francesco has talked about, the upside is captured and then delivered back to our shareholders. I think that would be the way we would think about it.

If I can add something, Jon. If we look at our assets, we said during the presentation, Eni never been so strong, never been so strong in terms of assets, the right assets in the right countries and all the different diversification that we have technology diversification, geography and the new transition company. So it isn't changed. So we are growing everywhere. Clearly, E&P is driving this growth, but we've never been so strong.

And we have to consider that after 2030, we have a really, really strong growth based on the asset and project that we are -- for which we are taking the FID and we are developing already in pre-FID. So it's really robust, mature and is now in our hands for, as you said, for the 90% in terms of operating assets. So that, I think that is a very strong point.

Clearly, the remuneration other absolutely strong point. I think that we are so strong that we decided for a price of $90 to deliver dividend 100% of what we take above $90. It's the first time, but it's a clear signal of our consistency for our dividend policy and remuneration. I think that is a very strong point that I like to highlight at this point because we've never been so strong.

Thanks, Chris. Supplemented your question there. We're going to move on to the last 2 questions. So the second to last question is Alejandro Vigil at Santander. So Alex, if you're there, if you could ask the question...

Congratulations for the targets. The first question will be about the Enilive '26 target of EUR 1.1 billion EBITDA. It looks like a conservative number, looking at the strength we are seeing in renewable products margins in this beginning of the year. And the second question would be about the Plenitude and the 15 gigawatts capacity target by 2030. What kind of returns and competitive environment are you finding these days in this market, just to see the value creation potential of this CapEx?

Yes. On biofuel, that's the target considering current scenario on the budget. Clearly, current situation is providing extra room to overtake it, given that the -- even current situation is supportive for biofuel scenario as well, even, let's say, the relative price towards the high fossil prices is supportive in that direction. So this is a point.

Second point, we are in this month actually in a turnaround phase on Venice biorefinery, where we are upgrading current setting. So nowadays, results are driven by the, let's say, Gela biorefinery and the U.S. one. So among the 3 key pillars, one, it's going to be partially under transformation in order to bring extra performance after the end of this transformation. These are the 2 underlying reasons.

Thank you, Alejandro, for your question. First of all, Plenitude model is integrating renewal with the retail activity and 70% of our project lies in country in which we can exploit this model, like Spain, Italy, France and Greece, for instance. And the remaining 30% is in country in which we can employ technical advantage, acknowledgement and, of course, market advantages.

If you look at the project, we foresee in the long run, in the medium, long term, an internal rate of return between 7%, 8% on the project itself that can be uplifted by the integration model with the retail activity and also now also applying the leverage model. So levered return increase of another 1.2%.

Thanks, Stefano. We're going to go to our final question now, which is Bertrand Hodee at Kepler. So Bertrand, please.

I was looking at your new sensitivities disclosed for 2026, both for oil and gas. And maybe you can explain why because you're still growing that both sensitivities are going down, both for oil and for gas. So for a $10 move in oil price, the sensitivity goes down from EUR 1.4 billion to EUR 1.1 billion this year. And in gas, it's the same order of magnitude, sensitivity goes down for $10 per MBtu move from EUR 1 billion cash flow impact to EUR 0.8 -- so it's a bit technical, but can you give us a clue as because it is a satellite model and the dividend frame or other portfolio mix that gives this outcome? And then I will have a second question on Mozambique.

Yes. First of all, on this question that is technical, but is quite effective. We designed a sensitivity on a broader range of variation of prices. So it is a reported $1, but it's not $1. It's $1 calculated assuming $10, $20 range. So you have to consider that sensitivity generally, we mentioned every time, works for a limited variation of prices, because in the contract mechanism, particularly PSA, there are natural regressive effects if the price spike because cost recovery is absorbed fastly and therefore, there is less contribution. First, this is the first element.

The second element, so once you read this, you have to consider this assuming more than $10 or up to $20 range. Otherwise, I will give you a $1 reference and you multiply for $20, you say, why, you're losing the cash flow. No, because the cash flow never exists in reality at $20. The second element, as you correctly spot is the fact that if you have a satellite, satellites protect you with their balance sheet in terms of through their distribution policy. But on the other side, they decide their distribution policy on the basis of their own boards and decisions.

Therefore, there is some kind of inertia in evolution. So it's not a direct impact of prices towards dividend automatically as it could be in a normal free cash flow element. For this reason, there is a third element that is a partial difference in terms of foreign exchange that is impacting comparison versus last year. But for these 2 main reasons, you don't see exactly the same number. Sensitivity will change every year by definition. In this case, we would like to give you the most appropriate factor to calculate what will be the effect of a scenario that has a larger volatility factor embedded.

Yes. But just a remark, the footnote on Slide 28 is pointing that the variation is based on $10 unchanged from $25, but maybe it's just a small remark. And then on Mozambique, on Rovuma LNG, Exxon said it was targeting an FID this year. There's been some change in stakeholders on Coral with Coral North with Eni owning now 50% and Exxon not participating. Should we still assume that on Rovuma LNG, if it is FID, you will have a 25% stake?

We -- of course, we are -- we have a stake in all the assets. We made an arrangement, which we disclosed in the last years where we find a pragmatic way to move project ahead. So you have spotted that on Coral North, we took a stake of 50%, while ExxonMobil is not present. But this is just the pragmatism to move project forward. We were very convinced as we proved that floating LNG is a technology that can deliver both operational and financial results. And so -- and Exxon is continuing to progress, of course, the engineering activity to make an FID on Rovuma.

What I want to clarify is that Mozambique has vast resources. And so there are opportunities for both the projects. Those -- the 2 projects are not in competition, the floating LNG, which is mainly focused on the non-straddling resources and the onshore project, which is focused on the straddling resources, trying to also to make optimization with Area 1 project.

I think at that point. Thanks, Bertrand. I think at that point, we are going to close the Q&A session. So to thank everybody for their attention and for their interesting questions. I think the team will look forward to seeing many of you in person over the coming weeks and discuss the strategy in more detail. Any questions or follow-ups, please don't hesitate to call me or any one of the team, and we'd be delighted to try and help you out in any way we can. So with that, thank you very much, and good afternoon.

Ladies and gentlemen, thank you for joining. The conference is now over, and you may disconnect your telephones.

Good afternoon, ladies and gentlemen, and welcome to Eni's 2025 Fourth Quarter and Full Year Results Conference Call hosted by Mr. Claudio Descalzi, Chief Executive Officer.

[Operator Instructions] I'm now handing you over to your host to begin today's conference. Thank you.

Thank you. Good morning, everyone. 2025 was a year of exceptional progress at Eni. We developed and executed our distinctive strategy in many cases, exceeding our original target. We will discuss in detail our updated plan at the forecoming Capital Markets update in March. But I can say at this point that 2025 provide an excellent guide to what you should expect the future to hold for Eni.

Last year's result proved the value of our consistent strategies, strong operational and financial performance, timely project delivery to support growth and diversified investment for the short- and long-term to generate further value for investors. Specifically, looking in detail at the 3 main business pillars, the successes are compelling. First, Global Natural Resources. We started up 6 major projects as planned.

This supported an underlying production increase of 4%, well above our original full year guidance and growth above 7% over the 2022, 2025 period, leading among our peers. Project execution is a clear strength of ours, and both Agogo, Angola and Congo LNG are further examples of our leadership in time to market.

In addition, we took FIDs on 4 major new projects, 3 of which are operated, driving a stronger service replacement ratio of above 160% and meaning we currently have 500,000 barrels per day of production under development, securing our medium-term outlook.

At the portfolio level, we have also established a new platform of growth by creating our largest business combination with Petronas in Indonesia and Malaysia. And we are progressing our Argentina LNG project with YPF and XRG. Alongside our continued exploration success underpins long-term outlook. We discovered 900 million barrels of new resources in 2025, reaffirming our industry-leading track record. Now over 10 billion barrel of resources discovered since 2014 at less than $1 per barrel from multiple geographies and different geological plays.

Our focus on value as well as volume is also emphasized by our continued action to valorize our resources through dual exploration. As we did in Indonesia with the business combination in Cote d'Ivoire and high grade our portfolio through tail asset divestment. GGP is business we have comprehensively transformed in the past few years. And notwithstanding a softer market, we delivered EBIT above EUR 1 billion for the fourth consecutive year. Gas to power was also a strong contributor in 2025. And together, this result emphasized the work underway to capture more margin from our equity production.

Second, our transition activities. They generate material growth and value creation and are important in diversifying and strengthening any earnings. In a year that was not remarkable for market improvement, we improved the robustness of our integrated business models, and we have been rewarded with strong earnings, EUR 2 billion of EBITDA and by the validation from the market with a contribution of EUR 5.8 billion from top private equity firms.

These deals were completed in a multiple around -- with a multiple around 3x those of Eni stand-alone implying over EUR 23 billion of enterprise value for these new business lines. We are locking in further growth with both Plenitude and Enilive. Plenitude expanded its renewable capacity by more than 40% in 2025 and we'll add 10% to its customer base in 2026 on closing the agreed Acea Energia acquisition.

Enilive has 3 new biorefineries under construction and 2 more have recently reached FID, together representing a further net 2 million tonnes of annual capacity. And third, industrial transformation. Changes in the energy market bring challenges that we are successfully mitigating but also opportunities. In this context, we are advancing the transformation of our traditional refineries. And we have set out the decisive measures to address challenges in our chemical business that are the same impacting the entire European industry.

In 2025, we accelerated these actions, closing the crackers at Brindisi and Priolo 3 to 6 months earlier than planned. At the same time, we are transforming Versalis towards bio, circular and specialized products. The strategic and operational progress achieved in 2025 translates into exceptional financial delivery. Robust financial position is critical in managing the cycle, preserving flexibility and delivering our strategy.

Last year, CFFO at EUR 12.5 billion was EUR 1.5 billion ahead of plan on a scenario-adjusted basis. Responding promptly to the more challenging scenario, we cut gross CapEx from a planned EUR 9 billion to EUR 8.5 billion, and we identified cash initiatives totaling EUR 4 billion raised from an initial EUR 2 billion, including delivering EUR 0.5 billion of savings.

Net CapEx on a pro-forma basis was lower than EUR 5 billion versus our initial expectation of EUR 6.5 billion to EUR 7 billion as we executed on more portfolio activity for better value. As a result, pro-forma gearing at year-end was 14%, with net debt down almost EUR 3 billion over the year. These outcomes gave us the opportunity to raise our share buyback by 20% from EUR 1.5 billion to EUR 1.8 billion, achieving the unique combination in 2025 of both lowering debt and enhancing shareholder distribution.

In Q4, pro-forma adjusted EBIT was EUR 2.9 billion, up 6% year-on-year despite the lower oil price and weaker dollar. We reported excellent E&P result with production up 7% year-on-year and 5% sequentially at 1.839 million barrels per day, underpinned by the positive impact of 2025 start-ups. Full year production of 1.7 million to 8 million barrels per day was 2% above our guidance for the year.

GGP Q4 EBIT of EUR 0.1 billion delivered on our raised full year guidance of more than EUR 1 billion despite relatively low volatile markets. Plenitude and Enilive together delivered EUR 2 billion of pro-forma adjusted EBIT in the year and Enilive benefited from improved bio margins in the quarter, part offsetting seasonally lower marketing.

Refining returned to profit in the quarter, albeit held back by relatively low utilization rates, while chemicals continued to see a weak scenario setting the early benefits of the restructuring underway. Q4 adjusted net profit was EUR 1.2 billion with a tax rate of 37% as we adjusted to a full year rate of 44%, just below guidance.

CFFO in Q4 was EUR 3 billion, representing excellent cash conversion again, helped by the material cash initiatives we undertook in the year. Full year cash flow at EUR 12.5 billion was EUR 1.5 billion above our full year guidance on a scenario adjusted basis. Thanks to a release in working capital and our actions around the portfolio, we were able to fund our CapEx, shareholder distributions and other commitments and also to significantly reduce debt.

Gross organic CapEx in the quarter was EUR 2.6 billion, taking the full year figure to EUR 8.5 billion, EUR 0.5 billion less than our original plan. Valorizations and portfolio activities have raised around EUR 10 billion over the past 2 years. In 2025, we completed more than EUR 6.5 billion in valorization of portfolio activity, which meant that adjusting to a pro-forma basis, net CapEx was lower than EUR 5 billion, around EUR 2 billion below our original plan.

But 2025 is not a one-off year. For 2026, we expect to limit our gross CapEx to around EUR 7 billion and net CapEx at around EUR 5 billion. We reduced net debt over 2025 by almost EUR 3 billion, as we said, bringing gearing to 15% at year-end or 14% on a pro-forma basis. We can confirm that we expect pro-forma gearing in 2026 to remain at historically low levels at between 10% to 15%. Our shareholder distribution details, we have to revert to the CMU in March, but we can confirm a full funded attractive and growing dividend is our first priority.

In the last 5 years, we have raised the dividend by an average of 5% per year, reflecting underlying growth and the reduction of sharing issue. At the same time, we have additional tool of distribution via the buyback that reflects our policy of showing cash flow generation and upside. In 2025, for example, we raised the buyback by 20%, the third occasion in the past 4 years, we have increased distributions.

In conclusion, 2025 was a clear outcome of Eni strategy in action. Looking ahead, we will update our -- on our plan in March, but strategy remain unchanged. The choices we make in how we do business are driven by our industrial, technological and commercial strength and by a business model that has proven to perform in strong and soft market conditions.

The upstream will grow organically at a sector-leading rate, leveraging our exploration successes and our proven ability to fast track time to market while managing costs and delivering the value from our business combinations and partnerships. On the energy transition, we will deliver the programs outlined by -- for Plenitude and Enilive while developing CCS, fusion, battery storage and data centers for hyperscalers, coupled with Blue Power and exploring opportunities in critical minerals.

Portfolio activity will again be material in 2026 as we continue to pursue disciplined capital alignment and value disclosure. In March, we will share with you the details that underpin this outlook and which support continued highly attractive investor returns. And now with the rest of Eni top management are ready to take your questions. Thank you.

[Operator Instructions] First question is from Alejandro Vigil, Santander.

Congratulations for the results. I have 2 questions about the upstream business. Definitely, you will elaborate more on the Capital Markets Day. But I'm very interested in the outlook for this year, thanks to the contribution of the joint venture with Petronas, if you can elaborate about potential increase in production driven by this joint venture? And the second question is about Kazakhstan. There is a lot of noise in the media, and I would like to know your view about the situation in the country.

Okay. Thank you. Thank you for the questions. I just give you a few words about Petronas and the outlook and Kazakhstan, then Guido -- and I will give where are the possibility to expand and elaborate on these 2 questions. So Petronas, I think that Petronas will be finalized by the second -- end of the second quarter. And it's going to give a contribution clearly, yes. We cannot be precise now. I think that we can give you more detail on the -- in March, but clearly is going to give a contribution in terms of production for 6 months.

And as you know, we are going to have immediately a company that is producing about 300,000 barrels per day, but we have already project that we're going to implement FID in the next years to reach 500,000 barrels per day. We already drilled in Indonesia, as you know, successful wells that we can tie into the existing infrastructure. So we talk about reserves, not just resources.

Kazakhstan -- Kazakhstan, I think that is a long story because in the last -- in the last 15 years, every 3, 2 years, we have some renegotiation and some, I can say, dispute, but more discussion because we are friends. And as always happen between friends, we always find a solution. So I'm positive about the future. But now I think that Guido can take over and give you more detail.

Yes. Thanks, Claudio. So barring from more details coming in the next CMU, of course, the growth of production next year will be driven by the project we have started up recently. So we will see more production coming from Congo, from Norway, from Angola, from UAE and of course, from Indonesia. But as I said, more details will come in a few more weeks.

As far as Kazakhstan, of course, as you know, the Republic has advanced several arbitration claims regarding production performance, cost recovery, environmental matters, sulfur storage and the JV is defending. There is a broad claim here, which -- it's in the arbitration court at the moment, and we do not expect a result before 2027, 2028. However, we continue as the operator is saying, confirm that operation have been conducted in compliance with the law of Kazakhstan and the operator had always possessed the required permits. And therefore, we are challenging this sulfur refine in all the courts.

Thanks, Alex. We can now pass over to Michele Della Vigna at Goldman Sachs.

Congratulations on the results. I wanted to ask 2 questions. First, on your CapEx guidance for '26 of EUR 7 billion. I was wondering if you could walk us through the bridge between the EUR 1.5 billion this year and the EUR 7 billion. Clearly, the deconsolidation of Indonesia plays a part, but if you could give us a bit more detail?

And then secondly, the more we look at all of your discoveries and access in the last couple of years, it feels like you probably have the best pipeline of new projects you've ever had in your corporate history. How should we think about your priorities for FID in 2026, given the wealth of opportunities between Namibia, Indonesia, Cote d'Ivoire and all of your recent discoveries?

Okay. Thank you. Thank you for the question. So it's true, we said that we cut our CapEx or we reduced our CapEx from EUR 8.5 billion this year to EUR 7 billion. That is a reduction in terms of CapEx optimization. We are not reducing the growth. We are not touching the growth of the company, but just we became more efficient because we did -- we have a strategy or we applied the strategy to be more efficient starting from the exploration. So exploring and go to the place where we have existing facilities.

And then this year, we had a very excellent success. Also last year, we are moving at EUR 1 billion or less than EUR 1 billion resource discoveries in the right place where we have infrastructure. That means that we can continue to reduce CapEx because we need less CapEx to produce more, more, more production. That was a strategy that is not something that you can start overnight. It's something that we start in 2011, '12, '13. It's something that we built day by day because we never stop exploration. We never stop exploring. We never stop developing. We never stop going directly to the development and working as upstreamer.

So that is the reason why we can reduce our gross CapEx. Then we have other points that maybe Guido can explain to you that is an additional important unless that can explain why we can reduce CapEx. Guido, you can explain.

Yes, Claudio. And I mean, just building on what you were saying about the advantaged barrels. The project we have started up in the last 4, 5 years and the prospective project, which you will have more visibility in the Capital Market update are projects with, first of all, low unit development cost. Second, they have longer plateau. So we can devote less CapEx to maintain the production and fight the decline and more CapEx for the growth at the same CapEx level in a nutshell.

As far as concerned, your question, Michele, about the -- what will come next year. Of course, we have a great degree of optionality. We have a very large and diverse portfolio of projects. But clearly, next year, the project that we will focus more in terms of FID is Argentina, Ivory Coast, Cyprus, plus a few more geographies in Africa.

We're going to now move on to Biraj Borkhataria at RBC.

Just to follow up on the CapEx point and the number you guided today. How much of that year-on-year change is the Indonesia CapEx coming out as you deconsolidate it? And is there anything you can say on the CFFO contribution that will be removed also when you deconsolidate that production?

And then second question is just on Versalis. You've now closed down the crackers, but we haven't seen that sort of come through in the P&L. So do you still expect to be EBIT breakeven in 2027? And what should we expect for 2026?

Okay. CapEx in Indonesia, we already said that Indonesia is not -- I think that we can start working in Indonesia after the finalization of the business combination of the new company that we expect in the second quarter. So I think in any case, the impact on CapEx on Indonesia will not be very large this year because then we have FID to take maybe in '26, but mainly in 2027. For Versalis, I think Adriano, CEO of Versalis, can give some answer, and some light.

Sure. Thank you for the question. I mean we have seen some improvement in the second half of 2025 following the shutdown of the 2 crackers that, as we said before, we move forward and we stopped earlier than what was original plan. Unfortunately, the positive impact, although you remember what we said in the previous call that the impact of 2 major cracker shutdown, you start to see after 12, 18 months. So we've seen some positive impact, and this helped in order to mitigate the deterioration in the scenario.

So we have seen improvement in the second half of 2025 compared to the second half of 2024, and we continue to see also in the beginning of the months of 2026. We are taking additional actions in order to mitigate the plan that is not coming as expected in terms of scenario. I'm pretty sure that you have seen so many shutdowns have been announced in the last 3 years, close to 160 shutdown announcement. And in the next capital market update, we are going to share the plan for the next 2, 3 years.

We're going to move to Lydia Rainforth at Barclays.

Two questions, if I could, please. The first one, on the exploration side and building a little bit on Michele's question earlier, you've clearly been very, very successful in what you've done. Can you actually give us what the success rate is now? Are we looking at sort of 1 in 2, 4 out of 5 wells? I'm just trying to work out what that success rate is.

And then secondly, just on AI, clearly, you've got a lot of computing power. I'm just wondering what you're seeing, if you're seeing any benefits at this point or what your plans are around that.

On exploration, last year, we've been very, very successful and success rate was exceptionally high. As you could also notice from the very low write-off we basically written in our books. So it was really exceptionally high, very close to 100%, the success rate last year.

On the AI, as you may be aware, last year, we've opened a new business line on data center, coupled with the gas-fired plant. We have a plan with international partners to develop a data center in the north of Italy, close to Milan up to 500 megawatts split in different phases. We have a first phase which will go from 80 to 100 megawatts and the second phase to 500 megawatts. And this is in an area which is underdeveloped and in a country like Italy, which has foreseen a demand of AI center by 2030 up to 1 -- the impact, of course, we are forerunner in terms of application of technology and super computational capacity on our activity and the exploration success is one example of it.

Of course, AI will apply also on other segment of the business in the upstream like the production improvement, drilling and project improvement, rotating machine enhancement. So we expect a significant impact on the AI. Just to remind that in the industry, we have already one of the lowest downtime for the production facilities, which is around -- which is less than 1%, while the average of the industry, WoodMac data is around 3.5%.

We're now going to move to Irene Himona at Bernstein.

Congratulations on a strong year, especially in the upstream. Can you please say, firstly, what did you change exactly to high-grade production? What does that involve? Secondly, can you remind us what upstream tax rate we should expect in an environment of $65 to $70 Brent? And then finally, very quickly, looking at the 10 billion BOE of resource you have discovered since 2014, can you say roughly what the split is between gas and liquids, please?

On the what we did basically question of the high grading, of course, in our portfolio, we are bringing onstream project with very high profitable cash flow per barrel. And we are divesting late-life assets. So the combination of these 2 elements. So the new project and the late-life asset disposal is high-grading our portfolio. And you may have also seen that if we compare the free cash flow per barrel from 2024 to 2025, we have seen a 10% increase. On the tax rate...

Before talking about the tax rate, so you remarked a very successful increase in our production. Absolutely what we said is true. So we have a different quality in terms of barrel, so higher cash flow per barrel, but also we have been successful for -- in the last years to be in terms of time to market -- time to market and budget. So we have been able to not only respect our schedule, but in most of the case, faster. So that clearly impacted positively. The production impact and internal rate of return of all our projects. And we are respected on all the budget.

So that is something that maybe is not clear or explicit to all -- to everybody, to investors, to all our community, but that is one key point of success in terms of results and the value of our volume. Tax rate.

On the tax rate, as you have seen, there is a fluctuation that are mainly related to clearly to the composition. In this case, you mentioned the upstream tax rate. So on the composition in terms of production contribution in different countries on the exploration write-off and some additional one-off factors that could imply or determine certain effects. In the 2026, the expectation is to -- with a $62 that is, for the time being, our assumption, a tax rate that should be in the range of 45% to 50%. Clearly, if the price will improve, there will be a lower tax rate.

Just to complete, you made another question, the split between oil and gas of the discovery is 70% gas and 30% oil.

We are now going to move over to Josh Stone at UBS.

Two questions, please. One, I wanted to pick on -- up on this Italian energy reform that got passed and whether you had a chance to estimate the initial impacts because it looks like there's quite complicated, lots of moving parts. It's connected to gas spreads, the ETFs and tax. Maybe you could just talk about how you're thinking about that being a net positive or net negative and the different impacts on your different parts of the businesses, that would be useful.

And then second question on the buyback. I know we've got to be patient for the actual number, but I was hoping you can maybe share just your thought process here and the importance you put on buybacks after the re-rating of your stock. And am I right in saying when you set this buyback, you'll be using the $62 oil price deck for 2026?

About the energy bill that you were referring in Italy, clearly, the impact is slightly negative, but quite marginal because you have to consider that as Eni, we are not just a supplier and a producer, but we are also an important industrial player in the country with different activities spanning from the refinery, chemicals, bio-refineries and also certain upstream activity, clearly. So you have to consider that the overall effect is mitigated by this double exposure. So it's absolutely, let's say, marginal towards the overall performance of Eni.

In terms of buyback, I was mentioning before, the reference is $62 for the expectation for the next year in terms of pricing, we have to confirm at the next Capital Market Day. Clearly, you know what is the structure of our distribution policy. When we set up a buyback that is clearly the variable component of our distribution, this is a floor. And historically, we proved that this is the floor because we raised the floor 3 times on 4 years. And the scope is substantially to share the upside that will emerge both in the performance and the scenario to our investors. We will provide all the details in the Capital Market Day at the end of March.

So now we are looking for Alastair Syme at Citigroup. Alastair has disappeared off the list, apologies. We're going to move to Matt Lofting at JPMorgan.

Congratulations on the strength of execution throughout 2025. Just 2 quick questions from my side. First, coming back to the net debt and gearing targets. I wondered, you mentioned Asia and the JV earlier. I wondered whether there was any other accounting effects in those targets, including any allowance for a possible deconsolidation of Plenitude, which I know has been sort of talked about in the past.

And then secondly, Eni is obviously one of the companies in the industry that's retained a presence in Venezuela. Do you have any thoughts at this point on the near and longer-term upside that could sit there for you in the country and how you'd sort of think about ranking that within the range of portfolio opportunities that you have from a capital allocation and risk reward perspective?

Thank you. So Francesco, look after gearing, and I look after Venezuela.

Okay. Clearly, about the gearing target that we provide you is, let's say, an effect of a number of actions and levers. As we said before, there is a strong operational performance, cash flow improvement, CapEx efficiency. And clearly, the satellite model that helps to, let's say, transform this potential contribution in terms of growth in stand-alone companies or entities that will be able by themselves to provide the debt. We are studying different solutions. You were referring to Plenitude, but clearly, we are working on different concepts and potentially this could be, but it's something that will be eventually disclosed at the proper time.

Venezuela, what I can say that, for sure, is an upside for us, an upside from several point of view, not just 1, 2, maybe 3 upside, different kind of upside. The first one that through the general licenses, #50 that has been issued a few days before, 1 week, I think, we can recover our gas. So Venezuela can pay through using crude, the gas that we deliver to the domestic market. So that is already a big upside before we were stuck for almost 1 year. And that creates a very buildup of our outstanding. So now that is done.

Then there is a second upside. We have blocks, we have oil. We are in one of the best block in the Orinoco belt. We are also offshore with Corocoro. And that possible additional development can use to recover the past cost or the past outstanding that's around EUR 3 billion. And that is another upside. So for sure, we are working with some American companies to see if we are creating a joint venture to develop this field are producing. But clearly, they can grow our production quite quickly, and that is a possible upside.

And the third upside is gas. Gas is something that is needed. You have to consider that U.S. have to increase or deliver additional EUR 20 billion or more EUR 20 billion in 1 year -- less than 1 year because with the sanction on the LNG gas and Russian gas, we need to compensate this EUR 20 billion. So you asked to -- they have to increase. But U.S. need also gas in domestic market. So the gas that we discovered about 20 Tcf in Perla with additional prospects that are really located in the right position, not just to deliver domestic gas, but also to export to Europe is a third opportunity.

And clearly, these are in line with what President Trump wants. I mean, develop the oil and gas in Venezuela -- for Venezuela first, but also to create a different kind of environment in the region. So I see that very positively.

So we'll move to Martijn Rats at Morgan Stanley. Martijn?

Yes. To be honest, most of my question has largely been asked, but I've got one left. There have been a couple of articles saying that you're interested in sort of revitalizing some of the oil trading business within E&I and including some partnerships with some other firms. I was wondering if you could provide some color around that issue, what your thoughts are in that area.

We've started a journey to improve our trading and extract more value from this segment of the business. And we've -- first of all, we've created one single organization. So we have put under one umbrella all the trading arms of the company all along the value chain to extract all the margins. That's the number one.

Number two, we have changed also some of our approaches to the risk. We are becoming a little bit more -- a little bit less risk adverse. And number three, we are, of course, looking at different way to do business. And in doing that, of course, we have started a dialogue with some international trading players in the recent months.

We are going to move to Massimo Bonisoli at Equita.

My 2 questions. One on CapEx. Net M&A was around EUR 4 billion in 2025, roughly EUR 2 billion above the initial guidance with EUR 2 billion target also for 2026, does this implicitly rise your opportunities over the 4-year plan? So I'm curious to understand if you have more options in your portfolio than 1 year ago?

And the second question on biofuels. How do you see biofuels trading environment evolving in 2026, particularly in terms of margins and market balance between supply and demand?

Yes. Thank you, Massimo. About the net CapEx and the portfolio effect, as you can see, we continue to upgrade our portfolio to leverage on our capability to execute and to explore and to have success for the dual exploration model to valorize as we have done so far, the business line that will be recognized as valuable through the transition. So there is a large list of opportunity. Remember, last year, we declared there was a risk amount and the result at the end in terms of value and the higher effect is the fact that clearly, we had a positive result at the end.

So in terms of this year effect of EUR 2 billion, you can also already appreciate that we completed in early January the first disposal. It was the Ivory Coast top-up. And this is something that is already on our, let's say, results. And we are moving to additional progress or activity related in particular, Indonesia, 10% is a program that is ongoing and some other additional element. We continue to work, and you should expect as we had last year, eventually upside because we generally risk our overall portfolio program.

Yes. On biofuel, thanks for the question, Massimo. Biofuel, we see the development is absolutely constructive. We estimate biofuel demand in 2026 above EUR 20 million. This year, it's going to be around EUR 16 million, so a significant step-up. It's going to be driven mainly by Europe and U.S. Main reason for this demand growth is twofold.

In Europe is the well-known Renewable Energy Directive #3. We quoted the Germany example even in previous call. I just want to add that on top of getting extra GHG reduction target and the ban of double counting, they are even asking to allow site investigation in countries -- foreign countries that are providing flows to Germany in order to be that flow accountable. And this is actually a positive evolvement for the supply-demand balance. So this is another good news.

Talking about U.S., actually, just yesterday, the EPA said that within the end of March, they want to finalize the new renewable volume target. Expectation is to have a significant increase between 35% and 40% increase. We are seeing this already on the RIN prices. RIN prices improved by 40% from the beginning of the year. And this happened without an improvement in terms of RIN generation. So this means that in order to cope with the new EPA target, we need to have RIN generation improvement, and this is going to drive economic margins improvement itself.

Last comment, this year, we saw a reduction, a destocking of the RIN banking. It's about EUR 0.5 billion destocking. And this is a turning point that revert the trends that we saw previous year when the RIN banking actually got exactly in the opposite direction with an increase of EUR 2 billion. We expect this trend to definitely move forward and to rebalancing the supply demands overall.

We're going to move now to Mark Wilson at Jefferies. Mark, if you're online.

Okay. You said earlier how the strategic path that has got you where you are in upstream is not one that you can start overnight, the exploration, the infrastructure, as you say, you've never stopped. Now you've also spoke to AI impacting exploration. And on the last call, you spoke to the technical hedge that floating LNG is giving you.

So -- but my question is that it's impossible to have this kind of delivery alone. So I'd like to ask which third-party areas other than the ones already spoken to across your upstream partners or indeed oilfield service contractors, where has the greatest improvement been to assist your delivery? Is it drilling, reservoir characteristic, E&C cycle time, shipyards? Is it something else? That would be my question.

Thank you for the question. It's very interesting. No, first of all, we are never alone in the life. I have a lot of colleagues with me in Eni, but we are not alone in terms of strategy. When other company outsourcing, we are in-sourcing, that means that we kept in our company all the main competencies. That started in the 2000 and so 2011, 2012, we decided to in-source. So we didn't follow the mainstream that say reduce cost and may your contractors as a main contractor, they do everything in Turkey. Now we want to take our end in each project.

And that means that in the last, I think, 16, 17 years, we put our competencies and we increased our competencies in all the different segments of our business. I talked about E&P, not only. We increased the R&D investment. We opened up 7 R&D centers. We increased our R&D people [ 1,200 ] people. And we have in our end technology in drilling, reservoir or seismic and development, and we made a revolution in our time to market, the best we can say in time to market. So we are not alone, but we are alone in terms of the choices we made in the last 15 years. So I think that, that is the main reason. I don't know if we share this point, you want to say something else. I hope and I think...

It couldn't be better.

We're going to move to Paul Redman at BNP Paribas. Paul?

Just 2, please. First was you achieved EUR 4 billion of cash initiative benefit in 2025. I wanted to ask how much of that is roll or could roll over into 2026? And secondly, I know people have asked but kind of -- and it is early, seeing you've got a Capital Markets Day in a few weeks' time. But I wanted to ask about how you think about allocating to shareholder.

You currently allocate based on a percent of cash flow from operations, but you've clearly paid above that percentage. And I think part of that has been driven by acceleration of divestments. So I wanted -- and this year, you're guiding EUR 2 billion of divestments. So I wanted to ask if you still believe that percentage of cash flow from operations is the appropriate way to allocate cash flow to shareholders.

First of all, about the cash initiative, you have seen that we executed. I think that there is a lot of evidence through the results that we achieved that we started with EUR 2 billion, we raised to EUR 3 billion and then EUR 4 billion, and we performed. Most of that are one-off factors that doesn't mean that they will be reverted, but actually will be rolling. So we are executing our cash management in a different way than before, optimizing the time to market of this cash needs, and there were a lot of opportunity.

We continue to study because I believe that generally in managing a huge amount of cash in a company's Eni, there is still a lot of pockets or upside that are -- have to be discovered. It is a sort of treasury search that we look for. So we do expect something also, but this is probably we have to wait a bit, 3 weeks for additional disclosure.

On the cash flow from operation reference, the idea of having cash flow from operation as a starting point for distribution is because we want to put the shareholders at the top of our priority. So the first line of cash flow is the cash flow from operation, pre-working capital. And clearly, there is all the other factors that come later. So the free cash flow could be another way to distribute.

Clearly, you have to change the percentage because you are speaking about different absolute figures. But at the end of the day, the logic of having cash flow from operation is giving the reference in terms of priority versus the distribution line. We will see again also in the next Capital Market Day, what will be the announcement and what will be eventually the percentage that we allocate.

And we're going to go to the last question. We found Alastair. Al, you around. Al at Citigroup.

Yes. So the question I had was really on -- well, I mean, there's been a lot of commentary in Italy and across the European Union about the European carbon scheme, the ETS. And you have a foot in several camps here, you're a carbon emitter, you're a power generator, you've got a CCS business. So can you give us a sense of where you think the political discussion is and what, if any, changes you would like to see? And if I could poke in a second question. Do you have any update on the well you're drilling offshore, Libya?

Yes. Libya offshore, we are currently drilling one exploration well, and we'll announce results when they become available, of course.

I think that we are very ready to talk about drilling reservoir explorations and all we want. But on ETS, honestly, we cannot give you a lot of light is the tax we pay. I don't know. Honestly, there is a big debate today because in Europe, the industry is suffering a lot. It's not growing. In the contrary, they are squeezing the industry in Europe with all the different kind of taxes and green deals that impacted negatively all the kind of industry.

ETS is one of these taxes. And Europe is the only country that apply these taxes at a very high level. So when we talk at competition with the rest of the world, it's not easy to compete one and the other and not really applying the same kind of rules. So that's what I can say, but I [ do ] not want to enter any political debate. It's not our business. I prefer to increase production and get good results for my company instead to cry about taxes I'm paying. Thank you.

Claudia, can I ask, does it make you think differently about putting capital on the CCS business given that there is a potential that the legislation could change?

No, I think that change has been made already have been in taxonomy and they've been accepted at least. At the moment, in Holland, especially in U.K. and now in Italy, so we have at least 3 countries where the CCS can be developed. In U.K., they made a big, I think, effort for the future. And for that reason, they -- now the investment has started and also the project has been sanctioned.

In Holland, I think that is going to follow. And Italy, we are very close to have a new law, but we have a huge amount of potential to be explored and we constitute the company. We already got interest from investors, and we have already an investor with us in the company. So I'm positive and Europe after years, now they accepted this important tool to reduce CO2 emissions.

And clearly, the CCS is the counterpart of the ETS because the CC, so the capture now has not matched yet, but now with the ETS that is close to EUR 90 or between EUR 80 and EUR 90 per tonne, I think that the CCS based on the existing assets, not on new development, is very good from an economic point of view. It's very positive.

Thanks, Claudio. Thanks, Al. That brings us to the end of the call. Thank you very much for your attention, both today and through 2025. And we look forward to speaking to you all in greater detail on the new strategy and plan or the strategy and the new plan on the 19th of March. So we'll see you all then. Thank you very much.

Good afternoon, ladies and gentlemen, and welcome to Eni's 2025 Third Quarter Results Conference Call hosted by Mr. Francesco Gattei, Chief Transition and Official Officer. [Operator Instructions]

I'm now handing you over to your host to begin today's conference. Thank you.

Thank you, and good afternoon. Welcome to our Q3 2025 results call. Our results are a further confirmation of the successful execution of our distinctive and consistent strategy and innovative business model. We continue to generate growth and value, both from our traditional energy activity, such as E&P and also from emerging opportunities in the evolving energy market. In particular, the 8.5% year-on-year growth in production results directly from our consistent long-term focus and investment in E&P. We are delivering material progress against ambitious strategic objectives and Q3 was a further proof of tangible momentum in this respect.

I will comment on our financial results in a little more detail shortly. However, it is very pleasing we have positive news to report from each of our main operating segments. Combining the excellent financial and operating performances and the ongoing progress in valorizing our businesses, we're also able to announce a further improvement of our balance sheet and a higher share buyback.

Focusing on a few of the strategic highlights, I would especially pick out. At the beginning of August, Azule Energy, our business combination with BP in Angola and Namibia, began production from its operated Agogo West Hub development with the FPSO coming on stream only 29 months after FID, almost a year ahead of our plan. Indeed, this quarter was notable for the contribution from our upstream satellite start-ups with Vår reaching 400,000 barrel per day production with significant incremental production from the operated Balder X development that started up at the end of Q2 and Johan Castberg ramp-up, driving 45% year-over-year production growth.

In October, we announced a joint venture FID on our Coral North floating LNG offshore Mozambique with startup expect in 2028. This leverages our successful Coral South development in production since 2022 with a remarkable 99.4% availability. And together with the 2 vessel in Congo, it will reinforce our leadership in this technology. I would also flag the progress we are making with YPF towards FID on Argentina LNG, employing the exact competencies I discussed in terms of floating LNG in Mozambique and Congo to access a material new integrated resource opportunity.

A further successful example of Eni skills and strategy is in Ivory Coast, where in September, we completed the sale of a 30% stake of our operated Baleine field to Vitol, in line with our dual exploration approach. The world-class Baleine field was only discovered in 2021, but has already reached over 70,000 barrels per day from the first 2 phases with a planned Phase 3 to take gross production to over 200,000 barrels per day. Coral North, Argentina LNG and Baleine Phase 3 form just a part of a deep hopper of high-quality project in our development and pre-FID portfolio.

In the quarter, we signed an agreement with GIP, a strategic partner in relation to a 49.99% stake in any CCUS holding, our consolidated global CCUS operation, confirming the significant growth and value creation potential in this transition business, unlocked by a further example of a version of our satellite model.

Finally, in September, Eni received approval for its application to convert part of our Sannazzaro refinery into a biorefinery. It will add along with 3 sites in operation, 3 under construction and further identified opportunities, including our Priolo chemical sites to the targeted tripling of biofuel production capacity to 2030. This emphasized the meaningful growth in diversified income streams our transition segment is delivering.

Turning now to our results. Q3 reflects remarkable progress in our key businesses and another excellent financial outcome. Pro forma adjusted EBIT of EUR 3 billion was 12% higher than Q2 and just minus 6% down year-on-year in U.S. dollar terms despite the 14% fall in crude oil prices. In the Upstream, production was 1.76 million barrels per day, up 6% year-on-year on a reported basis and 8.5% on an underlying supported by a new start-up and ramp-ups, good regularity and production optimization in the base.

Pro forma EBIT of EUR 2.6 billion was consistent with the prevailing scenario with EBIT associated split reflecting the rise in production I highlighted at the Vår and Azule. In exploration, we have already added over 800 million barrels of new resource year-to-date. GGP reported another good quarter at EUR 279 million in pro forma EBIT in a quarter that is usually quieter, remaining focused on maximizing value and optimizing the gas and LNG portfolio. Our significantly reconstructed midstream business has become a highly consistent deliverer of financial performance.

In our transition activities, Enilive reported EUR 233 million of pro forma EBIT, corresponding to EUR 317 million of EBITDA, around 23% up year-on-year in a quarter that is typically our best one for marketing, but also where we saw a recovery in bioomargin to pre-2024 levels. Plenitude pro forma EBIT of EUR 98 million was softer year-on-year, reflecting the effect of some of the retail incentives coming off, but partially offset by strong growth in renewable capacity. In transformation, refining returned to profit, helped by better industry margin and improved utilization, while chemicals, despite the continuing weak scenario, began to show some benefit from the restructuring now underway, albeit it is very early days.

Adjusted net income of EUR 1.25 billion, effectively in line year-on-year came despite the $10 barrel fall in crude price and weaker U.S. dollar. That is a testimony to the growth and performance improvement in the business and a more efficient tax rate at 42% that reflects the impact of high-grading upstream production mix, the transition towards a more sustainable diversified overall income mix and the benefit of our restructuring and performance improvement initiatives.

Cash flow from operations once again reflects efficient conversion of our earnings into cash, and we saw a Q3 working capital draw, reflecting our focus on efficient use of the balance sheet. Indeed, we have already realized a EUR 2.1 billion benefit to the balance sheet through prompt cash initiative in response to the weaker scenario. Gross CapEx in the quarter was EUR 2 billion, taking us to EUR 5.9 billion year-to-date. Net CapEx has totaled less than EUR 1 billion year-to-date.

Outstanding agreed valorization yet to close primarily related to the agreed Ares investment into Plenitude for which we have completed all the condition precedent and with closing expected in early November, the sell-down in Congo and the GIP stake in CCUS, this totals almost EUR 3.4 billion. After EUR 560 million in share buyback and paying the quarter 3 dividend, net debt was EUR 9.9 billion, down again quarter-on-quarter and leverage stood at 19%. Taking into account the still outstanding announced portfolio action, pro forma leverage was 12%, equivalent to 11% gearing, a level at the minimum of the industry range.

Looking ahead towards the full year, we are able to further improve some of our targets. We now expect full year production to be between 1.71 million, 1.72 million barrels per day, up from 1.7 million barrels per day, a 3% underlying increase versus 2024. We expect GGP pro forma EBIT for the full year to be over EUR 1 billion. We expect cash initiative and self-help and mitigating the impact of weaker scenario to deliver around EUR 4 billion benefit, up from EUR 3 billion previously.

We confirm gross CapEx below EUR 8.5 billion, but we expect net CapEx on a pro forma basis to be less than EUR 5 billion, down from the EUR 6.5 billion, EUR 7 billion that we previously guided to. And we are raising expected cash flow from operation pre-working capital to EUR 12 billion from EUR 11.5 billion previously, representing an underlying EUR 1.3 billion improvement versus our initial guidance for the year, while we are narrowing our expectation of year-end pro forma leverage to 15%, 18%.

Reflecting the strong underlying business performance, the balance sheet metrics and the proven capability of the company to execute its strategy in a very accretive way, we are raising the 2025 share buyback to EUR 1.8 billion from EUR 1.5 billion, of which EUR 840 million has been completed as end of September and around EUR 1 billion to date. This, as we have already done since 2022, effectively share the upside in financial performance we have generated in the year, preserve a conservative position in response to the uncertainty ahead and ensure our ability to invest consistently over the cycle for growth and shareholder value.

In fact, Q3 represents all the major elements of our distinctive strategy in action in one place. We are competitively growing our key businesses. We are launching new projects while also securing further opportunity through our industry-leading exploration and technological know-how in the upstream and opening up new opportunity in the transition. Meanwhile, we are managing risk reward, realizing value through our dual exploration satellite strategy, allowing us to bring in down debt and share upside with shareholders.

And with that, I am ready along with Eni top management here on the call to reply to your questions.

Thank you, Francesco. Hello, everybody. We've got a queue of questions. [Operator Instructions] And we're going to start with the first question that comes from Biraj at RBC.

I have 2, please. The first one is in the Upstream. One of the surprises today was the really strong production figure. And at least according to my model, that's the highest figure you reported since the pandemic. So could you just unpack the moving parts there quarter-on-quarter outside of the strong performance from Vår? And in particular, I believe there was a TSC adjustment this quarter. Wondering whether you could quantify that and tell us if there's any sort of follow-through into Q4 and '26?

And then the second question is on Chemicals. Just noted no improvement in the sort of underlying results despite the crackers being shut down. So what should we expect going forward? Should those losses start to reduce from Q4? Or are there sort of additional shutdown costs coming through?

Okay. I leave the answer about production and comparison versus previous quarter to Guido Brusco and clearly, the Versalis to Adriano Alfani.

So the increase quarter-to-quarter, both sequential and year-on-year are due to, as you rightly pointed out to Norway, Johan Castberg and Balder X, but also the accelerated start-up in Angola with Agogo and better performance in the ramp-up of our project in Mexico, Ghana, Nigeria and also overperformance in Ivory Coast. This, along with strong operational continuity in all geographies and an optimized major turnaround plan, particularly in North Africa. So the combination of all these 3 elements resulted into this remarkable performance.

Now Adriano.

Yes, Francesco. First, thanks for the question. About the shutdown of the chemical plant, as we previously said in different investor call, we always say that the benefits of the shutdown of the cracker start to be materialized 100% after more or less 9, 12 months that we shut down the crackers. So considering that we have stopped Brindisi at the end of Q1 and Priolo at the beginning of Q3, we expect to see some benefits starting from the second half of 2025 that is in the ballpark of EUR 40 million, EUR 50 million compared to the first half of 2025.

But most of the improvement we will start to see from the significant improvement from the second half of 2026 that will be materialized in more than EUR 200 million on a yearly basis. That said, the scenario remained very weak, and this is also the reason why despite the improvement on our cost base due to the restructuring, we are not seeing a major improvement in our results quarter-on-quarter because what we are saving from restructuring is compensating the lower scenario.

Thanks, Biraj. We're going to move to Santander and Alejandro Vigil. Alejandro?

Congratulations for the strong results. The first question is about the outlook in terms of production for the coming quarters because we are seeing a very strong exit rate of about 1.8 million barrels per day. If this could be a good indication of the level for 2026 of volumes?

And the second question is about the LNG business. You are very active in new capacity in terms of LNG, the Argentina, Mozambique, the joint venture in Indonesia. Just if you can elaborate about your view about this potential risk of overcapacity and how you're managing your portfolio of contracts?

I will give it to Guido the answer.

So yes, clearly, our exit rate is strong. We are envisaging an exit rate in the quarter between 1.78 million and 1.80 million. We still have quite a strong and visible pipeline of high-quality projects. We still have 2 start-up coming by the end of the year. One is the Congo LNG and also we have a gas project in Angola operated by Azule. We also have project already in execution, as mentioned by Francesco, Coral North and others in the UAE, Hail and Ghasha and some in North Africa, along with projects which are coming in Indonesia, but those are, of course, in the plan period and not in 2026.

As far as the LNG portfolio, we have a target of 20 million tonnes per annum. And this target, we want to combine also with a very diversified portfolio of opportunity. Currently, we have LNG assets in Indonesia. We will have soon in Mozambique with Coral North. We have in Congo and we'll expand it in Nigeria, in Angola. And we are complementing this with portfolio with U.S. Recently, you may recall, we've signed a 2 million tonnes per annum contract with Venture Global. And of course, last but not least, Argentina. Argentina is a 12 million tonnes per annum project in the second largest and world-class asset, which is Vaca Muerta. We are doing it with YPF, and we are targeting to have an FID sometime next year.

Alejandro, I got that mixed up because we're now going to Alessandro. Alessandro Pozzi, Mediobanca.

I have 2. If I can go back to the production. I'm aware the guidance for next year is provided with the full year results. But I was wondering, given the very strong exit rate, should we -- and also the additional start-ups you will have in 2026, should we assume a further increase from Q4 into 2026 before factoring in the new JV with Petronas? And while on the topic, can we maybe have an update on where we are in terms of negotiations with Petronas?

So you can imagine, there are a lot of moving parts, but we can confirm what we said at the last capital market update. We have an underlying of 3%, which, of course, we confirm over the plan. Sometimes, this is not a progressive growth because project comes over cycle and -- but we can confirm that growth.

As far as concerned, the Petronas deal, we are in very advanced negotiations, and we are planning quite soon to sign binding documents for the joint venture.

Can you confirm the contribution to the production for next year?

This is part of the underlying 3% growth year-on-year. As I said, there are many moving parts. There are new projects, new entry like the JV of -- with Petronas. There is also -- there are also some further M&A operations. There are also -- of course, there is also the decline of the field. So overall, we confirm the 3% underlying.

Thanks, Alessandro. We are going to move back to London now with Josh Stone at UBS. Josh?

Two questions, please. Firstly, on the buyback. Can you just talk about the factors that went into your decision to lift it this quarter? Because clearly, your business has been performing better. But at least until recently, oil prices are on a declining trend. So was there any consideration made about maybe holding back some buyback for next year to conserve cash? And to what extent was that factored into your new buyback level of EUR 1.8 billion?

And then the second question, Namibia. Just hoping to get some latest thoughts there after your recent well results at the Land finding gas condensate. And maybe if you could just share your latest learnings about the asset and what potential next steps could be in terms of appraisal and whether this could be a potential fast-track development in your view?

I will answer about the buyback and then give the floor to Guido for the Namibia questions. On buyback, you have seen that the policy that Eni has already, let's say, confirmed for a number of years is substantially to start with a buyback announcement during the Capital Market Day and then a policy of, let's say, driving or sharing the upside in different form. The upside is the upside related to scenario increasing the CFFO, but also upside related to the capability to perform the strategy faster to benefit of more valuable M&A and deleveraging.

Actually, this has occurred 3 times in the last 4 years. And many of these cases was not related to the improvement of scenario that actually declined, but then the capability to do better in terms of execution. This year, we have already announced in July, if you remember, this potential improvement. It's, let's say, a quite unique position in the market. Nobody is able to raise its distribution in this time and then nobody is able to reduce debt during the same period, while executing a full effective strategy in terms of project and growth in different parts of the business.

So we are extremely, let's say, happy to share this opportunity and this value creation with our shareholders. And we think that the EUR 300 million was a fair evaluation of the improvement. And clearly, this also proves that we are quite confident on the capability to manage any kind of downturn or soft price in the next year.

And then I'll leave back to Guido.

Yes. On Namibia, as you know, we drilled 3 wells, very successful. The first one, Sagittarius discovered hydrocarbon with no observed water contact. The second Capricornus, we've tested and we were surface constrained with a flow rate of in excess of 10,000 barrels per day. And the third one, Volans showed a high condensate to gas ratio, but -- and we found 26 meters of net pay of rich gas condensate. So 3 successful wells, which they've not only found significant hydrocarbon, but they are also located at a very short distance from each other, in conventional deepwater, less than 1,500 meters. So clearly, they offer an excellent prospect for future development.

We're going to move to Al Syme at Citi. Al?

Argentina LNG Phase 3, one of the big changes in Argentina has been this incentive regime for large investments or RIGI. What do you think this legislation does to improve the profitability? And I guess, maybe put another way, would the project work without that legislation?

And then secondly, I just wanted to ask, given you've done this big asset transaction, Baleine and Congo FLNG for, I think, $2.65 billion. I'm wondering what the invested capital is -- that you're essentially selling, sort of what multiple of invested capital have you been able to sell this asset at?

On Argentina, I give the question to Guido, then I will answer.

In Argentina, investment in shale are been made since more than 10 years. So in 2013, it started the investment cycle in Argentina, and this is far before the RIGI legislation. RIGI legislation, of course, is a big enabler, particularly for the export of the LNG. And so that's the legal framework, and we are confident with this legislation and with this framework to make an investment decision in the country.

About the Congo LNG, as you know from also the other transaction that we have already completed with Vitol. This is based on an effective date that is 1/1/2024. And therefore, there are investments in the meantime, but we do not provide this kind of level of details that will be clearly also part of the final settlement at the closing time.

Thanks, Al. We're going to move to Irene Himona at Bernstein. Irene?

My first question is on Enilive, where clearly, you're seeing very strong biofuel margins, improvements in your throughput and utilization. Can you give us a sense of how those are evolving in Q4, please? And then perhaps if you can split the marketing versus biorefining contribution to EBIT in the quarter?

And then my second question, going back to tax, but not the P&L tax, more the cash paid tax, which fell almost halved sequentially. Is there any guidance at all on that? Is it -- are we likely to see a reduction in that cash tax rate aligned with the P&L reduction?

About the -- I will answer about the tax, and then I will give to Stefano Ballista for the Enilive. You've seen that in the last year or years, there is an improvement in the tax rate, both on the -- clearly the reported tax rate and the cash tax rate. This improvement is mainly related to a transformation of the company with the contribution of different geography in the upstream and therefore, the capability substantially to have more production and more results coming from lower tax regimes in this segment.

Clearly, the contribution of the transition business, the possibility of the increase of return in Italy related to the fact that there is a transformation activity going on with the possibility to recover the deferred tax effects and also the contribution of satellites that are cash neutral from this point of view. So all this is a structural change that impacted both the nominal tax rate and the cash tax rate. So we have already said that we are expecting in terms of tax rate an improvement versus what we originally thought. So now we are moving in the range between 46% and 48%, while about the tax rate related to the cash tax rate, we are moving around the 28% to 29%.

And now Stefano, please.

Irene, thanks for the question. Yes, the strong result of Enilive in this quarter have been driven mainly by the significant improvement of the biofuel scenario, coupled with a very good asset performance capturing this increased value. In terms of value, we can think about the sort of 80-20 in terms of overall contribution. Deep diving on biorefinery and looking at the scenario. What's going on is a progressive rebalancing of the supply-demand dynamics. This is fully in line with the direction we expected.

There are some key reasons, some structural key reason pretty much on demand. Demand is improving. On a yearly basis, in Europe, we see above 6 million tonnes on a yearly basis compared to the 4.5 million last year. And this improvement has been, let's say, concentrated in the second half of the year. The reason is related to sustainable aviation fuel. We mentioned in previous call, the need for getting logistics in place in order to deliver SAF to customers. This is exactly what's going on.

On top, actually, there is also a drive of extra demand coming from the expectation of the deployment in several countries of the Renewable Energy Directive #3. An example, a key example is Germany. It has to be approved, but the proposal is very relevant. The most relevant thing is the ban, the proposed ban of double counting by itself, this means above 1 million ton of extra demand on top of the number I said before for next year. So these are the 2 key structural reasons.

On the supply side, I want to mention another structural reason. It has been confirmed the duties for sustainable aviation fuel coming from U.S. There was a doubt in the first half of the year, this duty are there for HVO due to clear the tax credit that is in U.S. It has been confirmed it's going to be applied to SAF as well, and this is another reason strengthening the market.

Very good. Thanks, Irene. We're going to move to Peter Low at Redburn. Peter?

Maybe the first, just on disposals. Can you just confirm the expected time line for the remaining ones, so kind of Congo to Vitol and then the Plenitude stake sale. But then beyond that, should we think of those as being the end of large disposals? Or are there other positions across the portfolio you're working to monetize?

And then just on the net CapEx guidance, you've lowered it for the full year, but it looks like gross CapEx is broadly unchanged. Can you perhaps walk through the moving parts that have allowed you to lower that net CapEx guidance?

Yes. About the portfolio, we can, as we have already mentioned, confirm that we are very close to cash in the EUR 2 billion related to Ares acquisition of a 20% in Plenitude. All the condition precedents were completed. We do expect to have this contribution in a period of weeks. This will imply substantially a benefit on our leverage in the range of more than 4%. On the other side, we are still clearly waiting all the natural process authorization for the other transaction, the one that is related to Congo that takes some more time. So this is still ongoing, but it is a process that is maturing progressively.

And about the contribution for next year, clearly, this year was extremely, let's say, rich in terms of opportunity. We have benefit from disposal that we matured last year in terms of closing, and we completed for the cash in this year. And also, we were able to fast track some of our disposal within the year. This acceleration is also at the basis of the improvement in the net CapEx results. You're right that the gross CapEx are substantially in line with expectation. But clearly, they were revised down during the first quarter once we announced the first estimate for the cash initiative that includes also CapEx reduction.

In terms of what are the future, the future is that the dual exploration model is a living model. So it's continued to generate opportunity. You know that we explore with high stake, and there is also some results already emerging in different geographies. You know also that in Indonesia, we have a 10% disposal on the assets that will not be included in the business combination. And clearly, we are also evaluating other opportunities that could come in terms of valorizing our portfolio and aligning capital.

Another element that will be cashed in within the end of the year, I was forgetting is the contribution of the CCUS, so the deal with GIP.

Thanks, Peter. We're going to move to Michele Della Vigna at Goldman Sachs.

And again, congratulations on the very strong results. Two questions, if I may. First, I wanted to start with biofuels. Very clear comment on RD. I was just wondering on SAF, if the mandatory blending does not increase from 2% until 2030, don't you see the risk that with new capacity coming on stream that market could soften over the next couple of years?

And then I was wondering if you could give us perhaps a bit more visibility on what drives that EUR 1 billion upgrade in the cash initiative. And in case the macro deteriorates in 2026, how much flexibility do you see on your CapEx budget? And where do you think you could potentially cut some of your net investments?

Stefano for the biofuel.

Yes, Michele, thanks for the question. On SAF, for sure, is driven by the mandatory mandates, given the penalties -- underlying penalties. So this is, let me say, it's a given. On top of Europe, now at 2%, we got higher target like in U.K. already in place. Clearly, an increase sort of step-up of the target along the time line is going to help demand on SAF. This is something that could be addressed. On top, actually, there are demand like in Japan, this is a global market. In Japan, they approved the 10% in 2030. There are some discussion even in other country in order to get SAF mandatory at defined percentage given it's the only way to decarbonize the aviation sector.

On top, actually, there are some sign on voluntary demand. This is going to be driven also by, let me say, the supportive incentives that at specific level will be put in place. An example is the Heathrow Airport, where half of the gap between jet, biojet and jet is supported with a limited amount clearly by the institution. This kind of approach is going to support demand.

And then lastly, let me add, there is the CORSIA program. It's a program that has to be fulfilled by all the ICAO countries, all the countries that participate to the ICAO. Up to now, it's just voluntary. It's going to be mandatory from 2027, and this is going to drive demand above in countries that today doesn't have any obligation.

In terms of overall demand supply, a biorefinery that can produce -- HVO can produce SAF. So there is flexibility is a core lever to address market evolution. We don't know exactly the growth, the demand of SAF, but there are clear mandates on overall HVO growth. And given current project in place and even current decision, let's say, of delay in terms of projects from other players on top of technical difficulties that other players are getting into in this new business and given current trajectory of overall biofuel, HVO and SAF, we see the market definitely a bit tight in the medium term.

Contrary, for the -- sorry, for the difference related to the estimate on cash initiative 2025, the previous one that was EUR 3 billion and now it's EUR 4 billion is substantially a mix of different factors. One is that we derisked some of the actions that we risked in the first half. You have to consider that we have a way to optimize or evaluate substantially our storage activity on oil, some ETB, so our trading activity on trading of oil. We have some additional value coming from swap of bond from fixed to variable, et cetera, et cetera.

And the main contribution in this round in this last quarter is related to the additional initiative related to trading, another EUR 100 million that is EUR 300 million, another EUR 100 million that is related to this swap -- liquidity swap on our cash strategic pool and this EUR 400 million -- more than EUR 400 million that is related to the derisking of the previous cash initiative. So almost EUR 800 million are related to these 3 different items.

About next year, I can tell you that the flexibility, the plan is under -- still under preparation, early phase of preparation. But generally, we are working with -- in the first year of the plan in a 20%, 25% flexibility. So we are speaking on a gross CapEx, something in the range of EUR 2 billion.

Thanks, Michele. We're going to move to Henry Tarr at Berenberg. Henry?

I had one really, which was around the GGP business and the sort of consistency of profits there. We've seem to have had much better profitability sort of through the summer and kind of consistent upgrades over the last couple of years. Is -- do you think this is a durable level of profit for this business? Or do you think it's related to -- so are there sort of structural changes post the change in your supply makeup that mean that this is a more durable supply or stream of profits?

Cristian Signoretto will answer.

Well, yes, you're right. I mean, the third quarter has been a good quarter. And I would say, in this case, the major driver of the performance was what I would call the locational spreads. So in Europe, but also globally, we have taken advantage of premium market vis-a-vis the flexibility that we have in our assets in order to move the gas and LNG where the premium was actually higher. I think as we said, as Francesco said at the beginning, I mean, we have reengineered the business. Clearly, the lack of the Russian gas and our development of our new gas projects and LNG projects upstream have really changed the shape of our portfolio.

We tend to be much more attentive to make sure that we can create enough optionality and flexibility in our portfolio in order to make sure that the new volatility environment that we are facing, and I think we will be facing in the future will be structurally creating headroom and opportunities for us to tap on. So I'd say, I mean, this is a trend that we will see continuing in the future.

Thanks, Henry. We're going to move to Martijn Rats at Morgan Stanley.

Yes. A lot have been covered, but just 2, if I may. So I noticed that Rosneft has a 30% stake in Zohr. And I was wondering if you could say a few words on how -- if that has any impact on you as the operator of the project. Maybe not, but I just wanted to kick that off.

And then the other one I wanted to ask about your European gas sales volume. They were down sort of 15% this quarter year-on-year. European gas demand is not very strong, but it's not that weak either. Is that due to the portfolio changes that you just alluded to? Or is there another specific reason for that decline?

Cristian, if you would like to answer, and then I will go back to the sanctions.

Well, the drop in the European sales this year have fundamental reason is linked to the fact that we have terminated the contract with which we were selling gas to BOTAS in Turkey via the Blue Stream. This was linked to, let's say, the pipeline itself. So I mean, this is a business that we are trying to unwind also in terms of participation in the pipeline. So that is the biggest contributor to the sharp -- to the drop in the sales into Europe.

On the other hand, I mean, as I told you before, I mean, the demand in Europe is shrinking. We are adjusting our portfolio to the new reality. We are much more focused on creating more value from the single molecule than clearly getting more molecules into the market.

And about the impact of the new sanction introduced by the U.S. administration, it's still very early because clearly, there are details that have to be analyzed and clearly, the full impact to be completely assessed. What we can clearly say is that we will ensure full compliance with the sanction. But we have to also take into account that we have a very limited interaction with these 2 companies in of our assets. And generally, we are speaking about minority stakes and nonoperated stakes. So we believe at the end that there shouldn't be any material impact on ongoing operation due to this sanction activity.

Thanks, Francesco. Thanks, Martijn. We're going to move now to Mark Wilson at Jefferies.

You speak to how this quarter is really seeing strategic initiatives coming through, certainly with the satellites in Norway and U.K., and that's been a number of years in the making. So I'd like to ask about what appears to be clearly another strategic angle, and that's the use of floating LNG. I'd argue you appear to be the leader in that concept now with the second Coral vessel sanctioned, Congo [ FMG ] coming on stream, just 33 months in Argentina, initial development being 2 vessels of an even larger capacity.

We know there's certain security benefits and clearly, speed if Congo FLNG is anything to go by. But could you speak to the CapEx, OpEx and emissions intensity benefits versus production of FLNG versus onshore? And any improvements expected between the 2 Coral vessels? And I did note in the previous answer, you spoke to getting more value out of a single gas molecule. So I think that relates to it.

Yes, Guido can provide all the details.

Clearly, we have built a technological hedge on floating LNG. We are currently the largest operator of floating LNG and results, both in terms of delivery and performance are outstanding. Just to name a few of them. On Coral South, we delivered the project on time, on cost despite the COVID and the uptime of the floating LNG is just outstanding. I was mentioned by Francesco in his speech, 99-plus percent. In Congo, we have 2, one in operations and one coming, and we've just sanctioned Coral North recently with the start-up expected in 2028.

In terms of security, it's pointless to say that is safer and basically provides and disconnect completely from any turbulence from onshore, and we are seeing it how successful was the choice in Mozambique.

In terms of cost, costs are -- I mean, we are in the deepest -- in the, I would say, steepest part of the learning curve. So if I compare cost from the first floating LNG and the cost of the project in -- of the future project in Argentina and the current project in Coral North, the reduction is significant. The industry is making significant progress in driving down to the point that we are reaching level comparable, if not better, in some geographies of the onshore LNG plant on a million tonne per annum basis.

In terms of -- you said the emissions, of course, we are applying the best available technology. And in some cases, it's not the floating LNG, but I just want to mention one in Angola on the FPSO Agogo, we are basically -- we are actually capturing CO2 and reinjecting CO2 in the reservoir through the gas injection, which is used for gas recovery. So even on an emission basis, we are doing significant progress and driving down emissions on a unit production basis.

I will also add that it is an opportunity to exploit associated gas reserves in certain, say, conditional fields where this gas potential will not be improved, cannot be recovered. And this potentially could become a cap on oil production. This is exactly the case of Congo. So it's not just a matter of cost, but it's a matter of value towards the opportunity and the optionality that this technology will add to your capability to exploit resources.

Thanks very much, Mark. And I think a subject we'll end up returning to. So we're going to move from Mark to Italy to Massimo Bonisoli at Equita. Massimo, are you still there?

Two questions left on Enilive. The first on new Sannazzaro biorefinery. Can you explain how the configuration feedstock and product profile differ from your existing biorefineries like Venezia or Livorno? And the second one is on the antitrust fine on Italian biofuel distribution. If you could elaborate on any potential impact this ruling may have on the profitability and competitive positioning of your fuel distribution business following the fine?

I will ask Pino to answer to the first, and then I will answer to the second one.

Thank you, Francesco. About Sannazzaro, Sannazzaro is a brownfield biorefinery because we will recover an existing hydrocracker unit very recently realized in Sannazzaro in 2010, very high pressure. And in this way, because of the high pressure and the good configuration, we will be able to maximize the flexibility to produce SAF. Production of SAF in Sannazzaro is an upside because there is the direct connection by pipe to the big Malpensa airport that is a big hub for the Central Europe.

And about the feedstock, the flexibility of feedstock will be the same of Livorno or the other refineries, a mix of western residue and vegetable oil coming from not in competition food areas, including our agri business. The logistics system will provide different channels of supply of feedstock and distribution of products in order to maintain the flexibility. The unit is expected to be completed by 2028 in order to be in production at the end of this year.

About the fine that was proposed decided by the AGCM on biofuels. First of all, what we can say that clearly, we appeal against this decision that we judge as substantially incorrect. The biocomponent is aligned in terms of pricing because as you have already -- you know very well and from the fact that there is a very limited number of feedstock and a very, let's say, small market. This is substantially aligning the cost of this element to the different operators. So everything is happening in a very transparent way and the cost of obligation for all the players in the market are substantially similar.

Secondly, the change of information that was considered in breaching of the competitive rule was, in fact, a legitimate change between the party on fuel supply agreement that requires this quarterly communication.

In terms of competition, clearly, this is nothing to do with competition. As we said before, this is an element that is a key issues for the market, the growing market in terms of capacity is the capacity of the feedstock, the key element of risk. We are working on the capability to develop our own agri hub, and this component is a mechanism to derisk in terms of both quantity and value, the contribution of our own internal production. So we think this is something that we are trying to defend through building an integrated chain also on this side.

Thanks very much for that question, Massimo. We're going to move now to Nash at Barclays. Nash, are you there?

Two questions from me, if that's okay. The first one is around technology. I was very impressed at your Technology Day in Milan earlier this year. I just wonder if you can talk about your progress over there, your deployment of technology, AI and how does that add momentum for your operation and the financial performance into next year and beyond?

Then my next question is on working capital movement. Given some of the volatilities we have seen, I wonder if you can give us a bit of color on working capital in Q4 and Q1, please?

I leave to Lorenzo Fiorillo, Head of our R&D Technology Group business to answer about the artificial intelligence, and I will come back for the working capital.

Thank you, for the question. What I can say that we use AI since a while, it's not just in the last years. Internally, we are more than 200 use cases we are developing. We found a lot of advantages in using AI application within the company in optimization, find solution and helping us in creating better scenario. The use of a big number of data and important technology and technical expertise as well as digital competencies internally and with high-performance computing, for sure, is a fantastic habitat for us to develop this kind of tool, which is very helpful for us. The progress for us is to continue on agentic model for AI, and this is the way we are going to develop in the next years.

About the last quarter, the next quarter, we do expect substantially a very limited drawdown in terms of working capital. This quarter was substantially aligned and neutral. Overall, in the full year, we have a positive working capital in the range of EUR 2 billion. On next year, clearly, we have to assess all the working capital activity based on the new plan that requires also a definition of the scenario first and clearly, all the activity that we are performing in the different businesses.

Thanks, Nash. We're going to go to the last 3 questions now. So the first one of those is Bertrand Hodee. Bertrand, are you there?

Yes. I have 2 very short questions left. The first one is on Coral North. So you just took FID in September. But when looking at the annual report 2024, in fact, you already booked 329 million barrels of equivalent of proved reserve. Even if your share has risen from 25% to 50% in the project, as Exxon pulled out, looks to me that you've already booked the full reserve of Coral North in '24.

And the second question is, so EUR 1.8 billion of buyback for fiscal year '25, EUR 0.8 billion been already bought back. And so there's EUR 1 billion left. How should we split those EUR 1 billion between the remainder of the year '25 and '26, please?

I leave the answer to Coral North to Guido.

Yes, of course, yes, you are right. We booked last year. This year is the JV FID. We took the joint venture FID. And in terms of share, as you rightly pointed out, it is a bit disproportionate compared to our share of the project, which is 25% because we've reached a swap agreement with one of our partner between the onshore and the offshore molecules.

About the buyback, we generally do not provide guidance in terms of, let's say, weekly or next or planning plan of buying because clearly, this is a sensitive matter. Clearly, we publish every week what is the amount that we have bought, and you have seen, I would say, some steps or the pace of this buyback activity. As you correctly said, there is still EUR 1 billion to be bought in front of us. We have 3 months of 2025 and then 4 months in 2026. I think that there are different combinations, but will not change too much.

Thanks, Bertrand. We're going to move to Chris Kuplent at Bank of America. Chris?

I've got one question remaining, Francesco, and it's quite a high-level one. I remember you often arguing why go over and beyond on a CFFO payout promise when you have so many great opportunities to invest. And I just wanted to double check where you are on that theme, in particular, because if I add up the dividend, the new buyback, I end up in sort of plus 40% territory. Is that -- are you signaling something into the coming years that you are now more comfortable being in that 40% plus range than you were previously?

First of all, the percentage that you're referring to, the 41%, 40%, I think, is substantially the same number also because we have a quite positive expectation on the quarter that is coming. So I don't think this is an element of concern. On the other side, as you have seen, we are able to find solution opportunity or value inside the organization that you are able to raise on a quarterly basis. I refer in particular in this case as the cash initiative on the capability to execute the strategy on the production performance.

So I think that generally, I see more upside. And therefore, I confirm that we are moving within the 35%, 40% range. I confirm that we continue to be selective in opportunity. I confirm that we have still a long list of opportunity that allow us to be extremely capable to select with the best one for the right time. And so I think that we are able to tick all the different boxes to reach our goals and confirming also an attractive distribution plan for our shareholder without modifying our view on what is the right amount of distribution that we should provide in order to ensure growth and capability to defend our balance sheet.

Great. Thanks, Chris. We're going to move to the last question now. If anybody has more questions, we can deal with those directly afterwards, but I'm conscious we've moved over the hour. So the last question is Matt Lofting at JPMorgan.

Apologies for being late joining. I wanted to just come back on the strength of the cash flow generation by the company this year. I think you sort of stated this morning that the underlying improvement or upgrade versus the original plan at the beginning of the year is sort of close to EUR 1.5 billion. And it struck me that it was a higher proportion of the sort of the original plan start point. Could you sort of break down what some of the key wins have been from that perspective?

And perhaps then secondly, also, if we take a step back and put it in the context of full year plan cash flow expectations, I'm interested in the extent to which you sort of see that underlying improvement is running ahead of your 4-year plan baseline or whether it's a case of sitting within the 4-year plan, but having accelerated the delivery of that cash?

Sorry, but I should ask you to make the second question again because the line was extremely noisy. So if you can repeat the second question, please?

Yes. Francesco. I was just interested if you could share any thoughts on the extent to which that EUR 1.3 billion underlying improvement represents an upside or an incremental delivery of cash flow compared to your 4-year plan baseline or whether it's the case that you're delivering cash flow faster within that 4-year plan?

Okay. Thank you. Now I can tell you sure that about the performance, the improvement of the underlying that clearly take into account of the scenario impact of this EUR 1.3 billion, we have practically EUR 500 million that are related to the Upstream. Clearly, upstream is a result of the improvement in terms of production that you are referring to, capability substantially to have a different mix that is generating more value. And clearly, in this plan, there is also some benefit from the different tax regime in the different new production contribution that are coming up.

There is GGP. GGP, we have revised the guidance during the year, and this clearly is transferring value from the EBIT also to the cash generation. We are here in the range of EUR 300 million. On Enilive, there is again EUR 300 million. This EUR 300 million of Enilive is split between improvement in terms of marketing and from biofuel is related to the capability to have a good performance from our biorefineries.

There is also a small improvement in terms of Versalis because clearly, unfortunately, on Versalis, we are seeing the negative side, but this is because it's a scenario that is classically hiding the contribution that Versalis is gaining from the shutdown and from the anticipated shutdown. So overall, these are the key elements that are showing improvement.

Clearly, what we can say about next year is early to say. I would say that production enhancement upgrading of E&P is continuing. GGP performance is subject to the volatility, but also to the capability to have a larger optionality in the different contracts in the different assets. So this is another element that should help to capture upside also next year. On Enilive, clearly, we are expecting to have a continuous improvement in particularly a better scenario that we would like also to capture through the budget. And we do expect clearly on Versalis a more visible evidence of the recovery that is related to the new configuration of assets. So I think these are the elements.

Thanks very much. That's -- and thank you, Francesco. That's bringing to an end the conference call. I'm conscious we have run a bit late, but I wanted to include as many people as possible. Those people who weren't able to ask a question, please do get in contact with the team here, and we'll be delighted to help. That's it. Have a great weekend, and thanks for joining us.

Thank you.

Good afternoon, ladies and gentlemen, and welcome to Eni's 2025 First Half Results Conference Call hosted by Mr. Claudio Descalzi, Chief Executive Officer. [Operator Instructions]

I am now handing you over to your host to begin today's conference. Thank you.

Thank you. Good afternoon, and welcome to our Q2 2025 result presentation. I'm pleased to say that the strong and consistent pace of strategic progress we have set in transforming Eni has continued through the first half of 2025. Our speed of action is enabled by the clarity of our strategic intent that can be summarized as in upstream, delivering efficient competitive growth and improving the return of our portfolio, most notably through exploration success, active portfolio management and organic production start-ups and ramp-ups. Integrating our equity gas production into the LNG chain to maximize value. In particular, Eni is the leader in floating LNG which provides an opportunity to unlock a large amount of resources in associated gas or from deepwater far from shore discoveries.

In parallel, building new complementary and competitively advantaged energy business related to end product decarbonization, such as Enilive, Plenitude and CCS, transforming the downstream and chemicals, converting these businesses to new growth opportunities such as our plan for Versalis, enhancing profitability and margin capture in areas such as trading to take benefit of more complex energy markets and anticipating a new trend such as data centers and nuclear fusion.

Critically, our business initiatives are supported and improved by a unique and innovative financial strategies that discloses value, support investment and growth and contributes to our enhanced balance sheet strength with leverage at historic lows. Executing this strategy, we expect to grow CFFO by around a total of 40% by 2030 and materially improve return on capital employed. This, in turn, drives shareholders' returns, which are our first commitment, combining a competitive euro-denominated dividend that has been growing at over 5% per year and is our top priority with our share buyback program.

If we now take a look at the important development of the year-to-date and day context, we continue to grow and enhance our upstream. The key engine of our organic growth remains our industry-leading exploration. In the first half, we discovered around 600 million barrels of oil equivalent of new resources, including from Namibia, Ivory Coast and Norway. And in the second half, we have significant further activity including follow drilling in Namibia, Angola, a material prospect offshore Indonesia.

Our Norwegian satellite bar started up two major projects Johan Castberg in March, and Balder X in June, which will contribute towards driving Vår's production to more than 400,000 barrels per day in Q4 this year. These are the first two of five major projects in the Eni portfolio due for the first production in 2025 with Agogo NGC in Angola and second floating LNG in Congo to come on stream in second half.

We are now advancing our fourth and largest upstream satellite, focused on Asian LNG in combination with Petronas in Indonesia and Malaysia. I will come back to this in a moment.

In June, we also opened a new equity gas to LNG opportunity by signing an agreement with YPF for the Argentina LNG project, combining significant resources in the Vaca Muerta and 12 million-tonne per year floating as per facility. Alongside our existing development portfolio focused on time to market and our continuing exploration success, we are forming compelling visibility over the profile of our long-term upstream activities.

Alongside growing upstream, our strategy in building transition businesses supported by aligned fresh investment is unique and delivering material value while strengthening and diversifying any overall returns. With the conversion of Sannazzaro into a biorefinery, we have now four additional biorefinery projects in the pipeline, of which two are located in the Asian market. Plenitude binding offer to Acea Energia made in June grew the customer base by more than 10%, parallel to the expansion of renewable capacity. Indeed, that capacity growth will also be marked in 2025, growing by over 30% year-on-year to over 5.5 gigawatts net to Plenitude or more than 7 gigawatts in gross terms.

The growth outlook for Enilive and Plenitude with EBITDA close to tripling between 2024 and 2030 is being recognized by important investors. In addition to the top-up by EIP taking their stake to 10%, we announced the EUR 2 billion investment by Ares for a 20% stake, valuing Plenitude at around EUR 12 billion in enterprise value. This transaction is expected to close around the end of the year.

In April, KKR topped up its stake to 30% in Enilive by investing EUR 601 million following the EUR 2.96 billion we collected in March. Our satellite model is also adaptable to supporting a more nascent business. In May, we agreed an exclusivity agreement with GIP related to the sale of a 49.99% stake in our CCUS activities, providing aligned capital ahead of the build-out of a wider platform on the CCUS project and is expected to close in the second half of 2025. The agreement followed the financial close reached in April with the U.K. government on our Liverpool Bay project. Finally, our goal of improving financial performance and profitability is also focused on corporate cost efficiency.

But in this respect, our transformation plan for Versalis is a critical lever. In this, we are accelerating our actions. In March, we closed the Brindisi steam cracker, and we closed Priolo in July, well ahead of our original plan. These closures will allow us to address a significant portion of the losses through the remainder of 2025 and 2026. Together with the investment into the new platform, they will contribute to delivering a turnaround in EBIT of almost EUR 1 billion, bringing Versalis back to free cash flow breakeven at the end of our 4-year plan.

Q2 results broadly reflect Eni sensitivity to the scenario. We are delivering in line with our guidance. In the upstream, production was 1.67 million barrels per day in line with our guided range. EBIT for the quarter was around EUR 1.7 billion. And pro forma EBIT of EUR 2.4 billion was both consistent with the prevailing scenario.

GGP result benefit from the positive effect of a contract renegotiation and full year pro forma EBIT is now expected to be around EUR 1 billion, capturing the original guidance upside. Enilive saw an improvement in EBITDA versus Q1, almost unchanged year-over-year. This positive momentum should be supported by typically stronger marketing contribution in Q3 and the recovery in biospread that we already saw toward the end of Q2.

Plenitude was supported by retail business and continued progress in renewable production. Both transition businesses remain on track to meet the full year guided result. Versalis results show an improvement quarter-on-quarter, but remain significantly loss-making. Ahead of the expected positive impact of the transformation plan now underway, the first effect of which should be observed in second half. Our refining operations improved on Q1 on a better margin, but were impacted by downtime at key assets. Cash flows before working capital in the quarter were EUR 2.8 billion or EUR 6.2 billion for the half year, maintaining our efficient conversion of earnings into cash. Gross CapEx year-to-date stands at EUR 3.9 billion, and we are on track to deliver the lowered guidance of under EUR 8.5 billion for the full year, while the net CapEx is expected below EUR 6 billion, thanks mainly to the Ares investment into Plenitude and upstream valorizations.

On the cash initiatives of EUR 2 billion announced with our Q1 result, EUR 1 billion has been delivered. Moreover, we have identified a further EUR 1 billion to be captured by the end of the year, raising the total benefit to EUR 3 billion. In the first half of the year, we repurchased EUR 0.66 billion, of which EUR 0.3 billion related to our 2025 program that we confirm to complete in Q1 2026. Net debt fell again quarter-on-quarter to EUR 10.2 billion, EUR 2 billion lower than year-end 2024. And leverage stood at 19% despite the impact from ForEx on equity balances. With outstanding valorization received, pro forma leverage was 10%, equivalent to 9% net debt to capital, the lowest level in our history.

Before moving to Q&A, I want to update on an important achievement in this quarter, our upstream combination with Petronas in Indonesia and Malaysia. Since announcing the MOU in February, significant work has continued, culminating in the framework agreement signed in June setting out key principles, including the asset level valuation of the respective contribution yield, a 50-50 split. Work is continuing on completing financial due diligence in defining the business plan, in receiving the relevant approvals ahead of the completion targeted around the end of 2025.

Our upstream satellite model is proving to be a powerful means of creating critical mass and new strategic options and generating material additional cash flow. Vår, Azule, Ithaca clearly demonstrate this. Our combination with Petronas replicates the model and will be our largest to date, creating a leading regional player with an exceptional growth outlook in a highly dynamic area of the world where gas demand is forecast to increase substantially, and with significant capacity to independently fund its investment program.

Together with Petronas asset, the combination will combine 19 blocks and across Indonesia and Malaysia, spanning production, development and exploration activities. 5 FIDs are targeted for 2026 and 4 more in the following years. And we expect gross production of over 300,000 barrels per day at closing with a prospect of over 500,000 barrels per day in 4, 5 years. Additional exploration success offers the prospect of even higher production levels, standing well into the 2030s as emphasized by the over 10 billion barrels of estimated unrisked resources in place.

Indeed, at least 10 highly probability of success, high impact wells are planned to be drilled over the next 3 years, aiming to prove up this material upside. We have also agreed a mechanism for the JV to compensate the legacy acreage owner for new discoveries made, representing a further source of cash upside. In addition, we continue to expect to valorize a retained minority equity stake in Kutei blocks in a separate portfolio operation likely in 2026.

The Petronas combination is a compelling example of how Eni uses its distinctive features, exploration skills and technologies, valuable relationships, dual exploration and satellite model to deliver portfolio high-grading, growth, cash and ultimately, value. In a way, I would say it's unique in the industry and is highly material to Eni.

Looking ahead, the second half of the year will build on our strategic execution, speeding up growth and value delivering in 2026. Production will benefit from the start-ups and ramp-ups to hit around 1.7 million barrels per day full year guidance. The third quarter will reflect this impellent growth, but also the usual seasonal maintenance activity with the production seen at between 1.7 million and 1.72 million barrels per day. New renewable power generation capacity will come on stream to reach the target of over 5.5 gigawatts by the end of the year. We now expect CFFO in 2025 to be EUR 11.5 billion, EUR 0.5 billion higher than our Q1 outlook and EUR 0.5 billion higher on an underlying basis than our original guidance. In addition, we realize the remaining EUR 2 billion of the overall EUR 3 billion of cash initiatives I highlighted earlier. Distribution will continue as promised, with a steady pace of buyback to recognize to our investors attractive and resilient returns in a volatile market.

We will continue to keep the company pro forma leverage between 15% and 20% in 2025 within the planned range. On the basis of these results, our operational momentum and with the closing of the current live deals, we can expect a positive second half of the year, an even more promising 2026 that we've built on a larger, diversified and more valuable set of assets.

And now with the team, we are ready to answer your questions. Thank you.

Okay. Thank you, Claudio. Are we going to move to questions. Good afternoon, everybody, I should say. And the first question is from Josh Stone at UBS. So Josh, if you'd like to ask your questions. And if I can again ask if you can keep it to 2 questions just so that everybody can participate.

First question I'll ask is on GGP. You signed a fairly large contract with Venture Global this quarter starting 2030. It's the significant first U.S. LNG contract you've signed. I'm sure when you partially buy, there's an arbitration ongoing with some of your competitors peers. So I was curious as to if you could elaborate on the terms of that contract? And what gives you the confidence that these volumes will appear as promised when the project starts up?

And then second question, actually, a bit more of a modeling question around the satellites, your stake in Enilive has now gone to 70% and Plenitude will go to the same level at the end of the year. It's quite material to model the minority interest. But in terms of the minority dividends, are you able to give any guidance there? I presume your private equity backers want to get paid at some point? And is there any dividend policy within these? And how should we account for that in our cash flow balances would be helpful.

Thank you for the question. The first question is for Guido for GDP and the second, Francesco is going to answer.

Well, of course, we cannot comment on the third-party contract and proceedings. We know that there is an arbitration ongoing. We know which provision has been posted by Venture Global. And of course -- but of course, we rely very much on their project ability to deliver modular plant as they did already in the past. As far as concerned, the contract in itself, we've actively scouted the market, and we found this project very competitive. We found it very much in line with our need to complement our portfolio of contracted volumes. As you know, we have a target to hit 20 million tonnes per annum, and also to cover geographically the whole globe and this contract is very complementary to our current portfolio, which covers East and West Africa, Middle East and Far East.

Yes, about the distribution policy that are related to Enilive and Plenitude, we do not disclose this value that are related to clearly reference to net results and a proportion of that. And I think we can provide the further details in the future. But for the time being, we are not disclosing that volume that are not particularly material in this space.

Thanks, Josh. We're going now to Biraj at RBC.

The first one just on the asset sale to Vitol. There's roughly a 2-year gap between the effective date and the expected close based on what you said. And the headline price -- it's a project where you're obviously spending quite a lot of development CapEx. So I was just wondering if the adjustment would be in Eni's favor, i.e., the cash received will be higher than the headline value or it would be lower? Just any kind of sense of the magnitude of that adjustment there? And then as we heard you on the call, Claudio, I wanted to ask about succession planning. You've been CEO for over a decade now, strategy in the business has changed quite a bit over that time. Just wondering if you could give any comment around whether you're looking to be present within Eni from 2026, either as Exec Chairman or as another term CEO?

Yes, it is right. You are correct in describing the deal, the consideration, let's say, the effective date of the deal. And clearly, the closing will take into account of the amount that is cashed in terms of production because both assets are producing assets. And clearly, in terms of investment because as you are correct in saying, there is a ramp-up of investment for reaching the plateau of the different phases. Clearly, it is still an uncertain amount because it will be determined at the time of closing, but the consideration has to be adjusted for that amount.

So for the succession plan, what I can say is that the strength of any is not the CEO alone, is not the COO, it's the team. We have a very competent, strong team, that is the strength. We built together this, I can say, fantastic strategy, very resilient that has been able to navigate, is very agitated sea. We are clearly inside of succession plan. But any people -- our people -- our management has a very strong sense of belonging, competencies and know the company and know the strategy. So I just can say that there is no worry. I think Eni is strong because it's Eni, because we have a culture, because we have a strong management.

Thanks, Biraj. So we'll move now to Peter Low at Rothschild.

Yes. The first was just on the tax rate. It's come in a bit lower than kind of your previous guidance for a couple of quarters now. Can you perhaps just elaborate on what's driving that and kind of where we should expect it to be going forward? And then the second was on the refining market. We've seen a step-up in margins in the third quarter. There seems to be mixed views out there as to whether it's transitory or maybe a bit more structural. I'd be interested in your perspective on what's driving that? And then whether there's any reason you won't fully capture the improvement in 3Q?

So Francesco, is going to answer for the two questions.

See, about the tax rate, you know that we drive tax rate in the year between 50% to 55% related to clearly our assumption on scenario, performance of the different business and this -- the different ways of return and results related to the business are impacting the tax rate. Another element that is more important that is becoming relevant is the conversion of loss-making business make Italian assets profitable and not instead, let's say, a factor weighing negatively on the tax rate. And another factor of this will allow also to restate certain tax credits that were considered not recoverable, assuming a long-term loss-making activity. So the conversion of -- by refineries, the conversion of crackers to new opportunities as the battery storage will help also to reduce the tax rate. So we can now provide a lower expectation for the tax rate closer to the 50%. So the lower boundaries or lower range of the original assumption. I leave then to Pino for the question about the margins.

No, about our vision on the refining margin, what we are seeing is a sudden increase in the margin starting from the end of June, early in July. And what we expect is that for some months, the situation could remain because the storage of products is very low. The crack spread of gas oil is very, very high because of the stress in the ban of Russian crude, Russian gas oil. This is very positive for the -- at least for all the driving season.

Thanks, Peter. And we're going to move now to Irene Himona at Bernstein.

My first question on Plenitude. As you clearly are moving towards the '28 capacity target of 10 gigawatts and then 15 by 2030. Can you provide a timeline for that satellite turning cash flow neutral? So will it be by 2030 or later? And then my second question on this very material new upstream satellite in Indonesia. To better appreciate the materiality near term, can you perhaps give us a sense of the uplift to your 2026 production CFFO, et cetera?

Yes. Thank you for the question, Irene. This is Stefano Goberti. For Plenitude, Plenitude is a growth company today. We -- of course, we will reach our 10 gigawatts, financing that grew by 60%, 70% from cash from operations generated by the company, the remaining through debt. We want to maintain a very strong financial statement balance sheet. And so the net debt to EBITDA ratio will be below 3 in our statutory numbers. And the growth will continue up to when our retail domestic client will be shared with our production from the renewable plants. And we expect this to happen between 35 and 40. So before that date, also the cash flow will turn to positive.

Yes. For Indonesia, it's clearly a big project, transformational project for us, not just for the -- where it is, but also for the dimension and the potential that it can express. We cannot now disclose, for sure, we will be positive and give an upside in 2026. We cannot disclose exactly figures in terms of returns, financial returns or dividend or production. It's something that we're going to clarify in February when we'll present the 4-year plan. But clearly, it's one of the best deals we have done in the last period and will be very accretive for Eni overall.

Thanks, Irene. We are going to move to Henry Tarr at Berenberg.

The first one is just on the YPF Argentina project. Could you give more color just around what might need to happen for it to reach FID? And are you happy to sort of push ahead with potentially large-scale LNG projects currently, just given the sort of large ramp-up of capacity that we're seeing in LNG towards the end of the decade? And then the second question is just on the buyback. Clearly, the balance sheet continues to be in good shape. You have had strong divestment proceeds coming in. What could cause you to reassess the buyback as you look towards the rest of the year?

Okay. Guido will answer on the YPF, and then I'll take care about the buyback.

Yes. Of course, quite a number of steps needs to be made and fine-tuned with YPF, which includes the final project configuration and the final field development plans, commercial agreements and then offtake agreements and the project financing. So this would require some time. Our expectation is to finalize all of this by the very end of the year or beginning of next year.

Good. for the buyback, we said that we presented during our Q1 the buyback as a floor. Clearly, the trend is very positive. So we are improving. We are -- the execution of the strategy. I think it's really very positive. The leverage, all the KPIs are good. So we're going to see in the next month, if we are able to continue. We are very convinced that we can continue this trend. So we can consider, considering our balance sheet and what I said, we can consider it to improve buyback. We will be clear in the next months, but there is this possibility.

Thanks, Henry. I would just actually just to complement one thing that Stefano said earlier on is we do disclose the net debt position of Plenitude. So you can see the capacity that the company has, just to add to Stefano's comments. We're going to move now to Lydia Rainforth at Barclays.

Two questions, if I could. The first, just coming back to the EUR 3 billion cash management. Obviously, that looked quite a long way from where we were at 1Q. Can you just talk through that a little bit more? And have you been surprised that how easy it's been to actually kind of manage that cash and to get those savings? And does it make you think about the rest of the business where else you can make savings? And then secondly, I just wanted to touch on the pockets of financing that you're tapping. When I take a step back and look at the transactions that you've done, it's the combination of national oil companies, it's trading companies, it's private equity. What advantages over traditional sources of financing and partners, do you think that gives you both short term and long term?

So before asking Francesco to talk about the EUR 3 billion, first of all, it was not an easy exercise. It's not something that we start 1 week ago. It's something that we work and all the strategy is working. It's clearly part of the efficiency that we are finding also with a new model. With the business combination, the satellites, we are trying to delete all the over-cost or additional overlap we have in the structure. So as I said before during the presentation in February, this not just give us dividend or the capacity to invest or to give value, but it's also a complete new organization charter for the company. And clearly, step by step, you can improve.

In this -- so we needed -- we didn't need for this for today to express an additional EUR 1 billion. But after the work, we got this EUR 1 billion more. It was work, not easy because it's organizational work, then we have -- we can be more flexible on our stocks with the new organization and other financial moves that Francesco made. So that is the main reason. So it's not -- we are not defending ourselves because we need more cash, we are adapting our organization to the new models. Francesco, you want to say something more?

Yes. What is clear is possible in all organization to think and work differently than in the past. There are a lot of tools, financial tools or capability to redesign what was a typical cycle, for example, for payment, a typical cycle for storage, et cetera, that could be shorter to improve in term of financial needs. So it's a sort of just-in-time logic that you had, for example, in the automotive industry 20 years ago. And this gives you a lot of more availability and an efficiency in terms of use of cash because at the end of the day, the cash for an oil and gas company is expensive. And outside of this company, there are other suppliers of capital and cash that are much more, let's say, cheaper and, therefore, optimizing the overall cost.

So the second question about new partners. It's true, we open up to new partners, so traders or national oil energy companies, funds, I think that also that is linked to the new organization that we are expressing with the model, with the satellite model because we give more opportunities. Clearly, these partners are very good partners, especially when we work in a local situation like in Indonesia and Malaysia with a state company, we go faster. They know the asset. They know the country. They are quite -- they are in the need to give priority to their own production, to their own project. So the same need we have. They don't have any other priority than give value to their own resources.

Then we have other, the fund. The fund clearly has been very key. And so these private partners in developing our transition satellite. That is good because they due diligence, they go deep, they dive deep inside your model, they challenge you and it's not typically the role of another oil and gas company because they put money, we run the show. We are in charge. We are operator and we define a different -- so it's a different logic. So once again, the model that we started 3 years ago that now is going very well and is giving a strength to our not just balance sheet, but to our organization, open up new possibilities, more focused, more faster and that for us is essential.

We need to go fast. We don't want to lose money and time. And when there is resources, we try to find the partner, the right partner that is focused to deliver as soon as possible return on that resources, and that are the right partners.

Thanks, Lydia. We're going to move to Spain now. I'll hand over to Alejandro Vigil at Santander.

Yes. The first question is about the -- you can share with us the opportunity of Acea Energia, you can discuss this potential investment. And the second is hearing all these comments about satellites. Just a question about the -- if Namibia could be another potential satellite considering the process that Gulf is now currently trying to execute there.

Stefano, Acea, please.

Yes, about Acea, not Namibia.

Namibia, no. At the moment, don't try to do something that is not in your...

No, no, no. Acea transaction. We submitted a binding offer and the Board of Directors of Acea accepted the binding offer. You know that we offer a value for the company, an enterprise value of EUR 460 million, plus a potential another EUR 100 million to be verified in terms of KPI and target KPI on the quality of the customer base in June 2027, plus the cash position normalized for another EUR 130 million. The operation for us is pretty in line and in our strategy because we will acquire, counting the customer base at the end of 2024, 1.4 million clients, 70% of which are power clients, so perfectly in line with our strategy to increase the power client customer base. So I would say, a very good operation, and we hope to complete it as soon as possible. The process is taking the necessary authorization mainly from antitrust. So we envisage by the first half of 2026 to close the operation.

Well, Namibia is a clear example of how effective our -- is our business model with the satellite. So when we created the satellite of Azule, the objective was, of course, to develop the resources in the country, but of course, also to expand regionally, and Namibia is a clear example of that strategy materializing into an execution.

No interest in the Gulf process?

No, we are not interested. We have found our resources. We have a new exploration well coming. So we are focused on our block and our resources at the moment.

Thank you, Alejandro. Okay. So we're going to move from Alejandro to Alessandro Pozzi, Mediobanca.

So I have two questions. And the first one is going back to your opening remarks around Versalis. You talked about the acceleration in the restructuring plan. Can you maybe talk about what would be the next milestones in the second half into next year for the restructuring of Versalis? And how do you expect chemicals margins to evolve? And the second question, always on the outlook, but this time on biofuels. One of your competitors reported really good results the other day. Maybe can you talk about the dynamics in biofuel markets as we go into second half and 2026 again?

Okay. Thank you for the question. Adriano, and then Stefano for biofuels.

Thanks, Alessandro, for the question. So as you might have seen from the public announcement, we decided to speed up a little bit the action plan that we announced about the closing of the cracker in Brindisi and the closing of the cracker in Priolo. When you close big machine, the positive impact start to materialize after 12 months. But that said, in the second half of 2025, we are going to see some positive effect in the range of EUR 90 million, almost EUR 100 million. And this is coming from more or less EUR 60 million, EUR 65 million from the shutdown of the two big machines, another EUR 20 million, EUR 25 million from the development of the new platforms.

Clearly, when I say the project that you start to see the big effect by the second half of 2026. So the effect of this efficiency and this shutdown will be in the range of EUR 250 million on a yearly basis. So you start to see from the second half of 2026. And of course, you start to see more in 2026 coming from the development of the new platform plus a more efficient plan. Going to your question about how we see the scenario. Honestly, we see lack of meaningful economic recovery in the chemical sector in Europe. So we see some slight improvement in the scenario, but as I said, there are very slight improvement. So all this number that we provide to you are based on pretty much flat scenario. Yes.

Alessandro, thank you for the question. Definitely, market dynamics are improving significantly. And reason we can simplify are twofold. From one side, we are seeing additional demand. This is in line with our expectation. We said demand would have come, for example, from Germany or from South close to the second half of the year, and this is what's going on. Second, there are a set of very good news, both in the EU and in the U.S. about future demand target. An example, Germany published a proposal on the Renewable Energy Directive III deployment. And this proposal is moving the 14% of GHG reduction to 25% by 2030, and they're even setting a target for 2040, very relevant one.

And second, they are proposing to get rid of the double counting feedstock. This means a significant increase of demand given that every HVO will count for 1 and not for 2. In the U.S., we have a similar situation. We have a proposal from the EPA for the new renewable volume obligation for 2026. And it's a big step-up in terms of demand above 50%. And on top, actually, we got eventually approved the new LCFS target in California from 13% GHG to 22% starting 1st of July. This has been delayed compared to initial assumption, but now it's there. So it's going to start to make the difference. And finally, it's not a detail, we got clarification about the new clean fuel production credit, the so-called 45Z that was full of uncertainty until a few weeks ago and clarification create value. So these are pretty much the main reason, structural reason underlying the market upside and improvement you are seeing right now.

What could be the demand uplift from the new proposals in Germany, especially the double counting, the removal?

On Germany, you mean the -- yes, the expectation is to have an uplift around 1.5 million tonnes. That's a rough number. But it's a very significant one, considering that actually, we are already seeing an increase of around 0.5 million this year in Germany and that we are coming from previous year of pretty much no demand. So this is all on top of all the other major trajectory.

Thanks, Alessandro. We're going to move to Martijn Rats at Morgan Stanley.

Yes. I wanted to follow up briefly on the comments that there is at least depending on, I would imagine the macro and other things, but there is the potential for the buyback to go up. If I'm not mistaken, on Page 3 of the statements, there is guidance that the pro forma leverage ratio will go up back into the 15% to 20% range by the end of the decade from the 0.1 level now. So it does suggest sort of quite a bit of an increase in gearing in the second half of the year, which in of itself does not point in the direction of a lot of room for the buyback to go higher. So I was wondering how these two things sort of relate to each other? And sort of perhaps, as part of that question, maybe you can give us a little bit of a refresher on the timing of the various disposal proceeds that are coming in, in the next couple of quarters, maybe this more that sort of falls over the second half of this year. Is there a timing impact there that leads you to think that -- lead you to suggest that the buyback might go up even though the gearing in the second half itself might still trend higher.

Thank you, Martin. First of all, you have to consider that a range of 15% to 20% is a wide range, and it was what we presented last -- at the beginning of the year. And this 20% or 15%, 20% means that potentially you could go -- you see towards the lower bar of this range. Secondly, there is in the scenario, an assumption that certain businesses will be less generative, clearly, because we are assuming eventually in terms of price of oil, 68 consequent to the average for the full year, or certain return that are lower. For example, we are assuming a quite conservative view on margin, downstream margin. We are not probably also take into account some upsides that are emerging in biofuel.

You have also to consider that in the pro forma logic, the disposal plan is already up -- has already happened in terms of event. But this doesn't mean that it's ended because we have a negotiation and opportunity that could emerge that are not included within the evaluation or the range. So it's a view. It's a conservative process that take into account risk disposals and also a certain scenario, conservative and prudent scenario. So the two sentence about potential buyback uplift and 15%, 20% are fully compatible one with the other.

Thank you, Martijn. We are now going to move to Bertrand Hodee at Kepler?

Yes. Hello, I have two small questions. The first one is a clarification on the Argentina LNG, do you intend to take an FID early 2026? Or it was just the closing of the, I would say, agreement with YPF? And then the second question is also related to LNG, but to Mozambique. Eni and partners have awarded partial awards to contractors. What refrain Eni at this stage to take a full final investment decision? And what will be the stake of Eni after everything is being closed on Coral Norte?

So on Argentina, yes, we are -- the plan is to have an FID by the Q1 of 2026, while the agreement with YPF on how to progress the project will be reached before that, of course. On Mozambique, we have -- as you may have noticed, we've got the government approval, full approval, and we are now in the process to progress and finalize the JV FID. However, we have already secured the long-lead items. We have already secured the yards and all the critical elements to secure the schedule of the project.

And your final state?

Sorry, say it again?

Because on Coral South, your participating interest was, if I remember well, 25%. And on Coral Norte, what is your...

We have 50%, we have 50% because we have an agreement with one of the other partner to swap interest between the onshore and offshore projects. And so we have taken a higher stake in the offshore.

Thanks, Bertrand. We're going to move to Matt Lofting at JPMorgan next.

Congratulations on the strong strategic execution through the first half of the year. I think it's been very impressive and important to acknowledge. Two questions. First, the production ramp-up. The guidance implies a strong ramp second half of the year versus first half. If you could just remind us of the, let's say, the key milestones over the next sort of 2, 3 months to derisk their full year target and perhaps where any risks could sit as well? And then secondly, the cash efficiency or cash initiatives that you highlighted in the press release this morning, increasing from EUR 2 billion to EUR 3 billion. I mean, it struck me the EUR 3 billion quite a significant proportion of CFFO and FCF on an underlying basis. So wondered if you could just expand there on the main initiatives and how perhaps underlying versus transitory, some of them may be.

On production ramp-up, as you know, this was a very key year for the organic growth. We had 5 major projects coming, two in Norway, two in Angola and one in Italy. And basically, three of them have been delivered. The last two are Johan Castberg and Balder X in Norway. Johan Castberg already reached this plateau production while Balder is in its ramp-up phase, which will be completed by the end of the year. We have a project in Angola coming very soon. It's an FPSO of 170,000 barrels per day as overall capacity. We have also another project coming towards the end of the year, the NGC. It's a gas project to feed the Angola LNG plant. And then we have the second floating LNG on Hong Kong coming by the end of the year. So -- of course, the whole production profile was backloaded. So we will have a pretty strong exit rate, which will set ourselves for a great 2026 also.

About the cash initiative. Clearly, these are mainly related to working capital management, some cost efficiency, so nothing to do with the cash flow from operation or marginal impact in the cash flow from operation. Everything else is related to other lines of the cash.

Thanks, Matt. We're now going to move to Massimo Bonisoli at Equita.

I have just one question. Last on Libya. If you can provide an update on the status of your Libya gas project, specifically the structures A&E. And what is the expected timing of first gas, please.

On Libya, actually, we have more than one project ongoing. We have three projects, one which is monetization of some gas in one of our Mediterranean platform, which will come on stream by Q3 of next year. Then we have a compression project to expand the plateau of one of our offshore platform, which is forthcoming by the end of the year, would help to maintain the plateau. And we have the A&E structure where we are executing the main contract, and the first production is expected by the end of 2027, the first production.

Thanks, Massimo. Into the final stretch. We have Paul Redman, BNP Paribas.

I've got two relatively brief ones, I think. The first one is just on the CFFO guidance upgrade. If I run the sensitivities and have a little bit more on for GGP uplift, I'm just trying to work out why the increase in CFFO from last quarter, i.e., the guidance for the year, is not as much as the sensitivities would suggest. And secondly, when we talk about these working capital initiatives for 2025, Johan Castberg as one-offs. They can't be replicated in 2026. Is that how I should think about it?

Yes. About the cash flow from operation increase. This is related to the fact that substantially, you have to take into account that the scenario is not just Brent and FX. So scenario is biofuel, is power, is margin, is chemical, is a lot of stuff. And therefore, these are clearly not completely reflected in the benchmark. We provide them the simple calculation of three metrics. So there is an uplift on the scenario on valuation in performance versus the scenario, and this is what is happening, taking into account of all the variable and not just the three that you are referring to. About the cash initiative, we had to consider cash initiative are improvement in a way you manage your cycle of payment. And therefore, the time you apply this on the first step, is a step up. And then you continue to roll over this initiative in all the remaining year and the following year. So this is a way to change the way you manage your cycle of payment and your cycle of storage.

Thanks, Paul. And finally, and thanks for your patience. We're going to move to Matt Smith at Bank of America for the final question.

Just 1 left from me, which I don't think we've covered coming on to GGP gas trade and another strong quarter, once again for Eni, just has been an interesting quarter for trading performance across the space at some point to good results, some less good and usually talking about too much volatility for the traders in some sense. So I just wanted to pick up obviously, how you saw the opportunities in the quarter, clearly played out quite well, but how you see the rest of the year in the current conditions? How conducive is it for that business to keep outperforming, please?

Well, thanks for the question. In terms of performance this quarter has been marked by two elements. One is the one-off settlement that we discussed before. And the second one also was the fact that the volatility, as you said, has been somehow less than first quarter 2025, but still in a good shape, especially, I would say, on the LNG global scenario because of the volatility between JKM and TTF and oil. So that allowed us to take advantage of few arbitrage opportunities globally, and that set up that result for this quarter.

Thank you, Matt. Thank you, Christian. That wraps us up for the second quarter call. Thank you to everybody for attending. Any follow-ups, then myself and the team are available for your questions. And if we don't speak, have a great summer, and we'll see you again in the autumn. Goodbye.