Annual Report 2020 - Eni

1 EniAnnualReport20201 MANAGEMENT Report 1 Activities 2 Business model 4 Responsible and sustainable approach 6 Letter to shareholders 8 Eni at a glance 14 Stakeholders engagement activities 18 Strategy 20 Integrated Risk Management 26 Governance 32 Operating review Natural Resources 40 Exploration & Production 42 Global Gas & LNG Portfolio 66 Environmental activities 70 Energy Evolution 72 Refining & Marketing and Chemicals 74 Eni gas e luce, Power & Renewables 82 Financial review and other information Financial review 88 Risk factors and uncertainties 114 Outlook 135 Consolidated disclosure of non-financial information (NFI)

2 136 Other information 182 Glossary 1832 CONSOLIDATED FINANCIAL STATEMENTS 1863 ANNEX 332 DisclaimerThis Annual Report contains certain forward-looking statements in particular under the section Outlook regarding capital expenditures, dividends, buy-back programs, allocation of future cash flow from operations, financial structure evolution, future operating performance, targets of production and sale growth and the progress and timing of their nature, forward-looking statements involve risks and uncertainties because they relate to events and depend on circumstances that will or may occur in the future .

3 Actual results may differ from those expressed in such statements, depending on a variety of factors, including the impact of the pandemic disease; the timing of bringing new oil and gas fields on stream; management s ability in carrying out industrial plans and in succeeding in commercial transactions; future levels of industry product supply; demand and oil and natural gas pricing; operational problems; general macroeconomic conditions; political stability and economic growth in relevant areas of the world; changes in laws and governmental regulations; development and use of new technology; changes in public expectations and other changes in business conditions; the actions of competitors. Eni means the parent company Eni SpA and its consolidated activities: the value chainEni is a global energy company, engaged in the entire value chain: from the exploration, devel-opment and extraction of oil and natural gas, to the generation of electricity from cogeneration and renewable sources, traditional and biorefining and chemicals, and the development of circular economy processes.

4 Eni extends its reach to end markets, selling gas, electricity and products to retail and business customers and local markets. Both CO2 capture and storage initiatives and forest conservation projects (REDD+ initiatives) will be implemented to absorb residual expertise, technologies and geographical distribution of assets are Eni levers to strengthen its presence along the value this path, Eni is committed to become a leading company in the production and sale of decarbonized energy products, increasingly customer-oriented. Decarbonization will be achieved through the implementation and strengthening of existing technologies and activities such as biorefineries with an increasing input of raw material from waste; Circular economy with increased use of biomethane, waste products and recycling of end products; Efficiency and digitalization in operations and customer services; Renewables through increased capacity and integration with the retail business; Blue and green hydrogen to power Eni biorefineries and other highly energy-intensive indus-trial activities.

5 Natur al or artificial carbon capture to absorb residual emissions through REDD+ forest con-servation initiatives and CCS will be an important support to intermittent sources in the energy & PRODUCTIONGLOBAL GAS & LNG PORTFOLIOREFINING & MARKETING AND CHEMICALSENI GAS E LUCE, POWER & RENEWABLESEUROPE26 ASIA ANDOCEANIA22 AMERICAS6 AFRICA14153107145841731641810operating in 68 Countriesbeyond 31,000 our employees2 Management Report | Consolidated financial statements | AnnexAnuaaAnnual Report 2020 PRODUCTION FROMRENEWABLE SOURCESELECTRICITYGENERATIONOIL & GASTRADITIONALAND BIOCHEMICALSLUBRICANTSFUELBIOFUELTRANSMI SSIONNETWORKTRADING & SHIPPINGREMEDIATION, WATER & WASTE INTO DEVELOPMENTOIL & GAS PRODUCTIONBUSINESSMARKETSRETAILMARKETSLO CAL MARKETSEXPLORATION AND DEVELOPMENTPURCHASE OF GAS FROM THIRD PARTIESPURCHASE OF BIOAND RENEWABLERAW MATERIALSCAPTURE, STORAGEAND USE OF CO2 AND REDD+ PROJECTSTRANSFORMATION PLATFORMPRODUCTSELECTRICITYTRADITIONAL ANDBIOREFININGAND PETROCHEMICALS3 Management Report | Consolidated financial statements | AnnexEni Annual Report 2020 Business ModelEni organically combines its business plan with the principles of environmental and social sustainability, extending its range of action along three pillars:1.

6 Operational excellence;2. carbon neutrality by 2050;3. alliances for First of all, Eni business is constantly focused on operational excellence. This translates into an ongoing commitment to valuing people, safeguarding both the health and safety of people and asset integrity, protecting the environment, integrity and respect for human rights, resilience and diversification of activities and ensuring sound financial discipline. These elements allow the company to seize the opportunities related to the possible evolu-tions of the energy market and to continue on the path of transformation. 2. Second, Eni s business model envisages a decarbonization path towards carbon neu-trality based on an approach oriented to emissions generated throughout the life cycle of energy products and on a set of actions that will lead to the total decarbonization of pro-cesses and products by 2050.

7 This path, achieved through existing technologies, will allow Eni to totally reduce its carbon footprint, both in terms of net emissions and in terms of net carbon intensity. 3. The third guideline refers to alliances for the promotion of development through the enhancement of the resources of the Countries where it operates, promoting access to electricity and promoting Local Development Programmes (LDPs) with a broad portfolio of initiatives in favour of communities. This distinctive approach, referred to as Dual Flag, is based on collaborations with other internationally recognized players in order to identify the needs of communities in line with the National Development Plans and the United Nations 2030 Agenda. Eni is also committed to creating job opportunities and transferring its know-how and expertise to its local s business model is developed along these three pillars by leveraging internal expertise, the development and application of innovative technologies and the digitalization fundamental element of the business model is the Corporate Governance system, inspired by the principles of transparency and integrity, outlined further in the Governance business model is aimed at the creation of value for all stakeholders through a strong presence along the entire value chain of energy.

8 Eni aims to contribute, directly or indirectly, to the achievement of the Sustainable Development Goals (SDGs) of the United Nations 2030 Agenda, supporting a just energy transition, which responds with concrete and economically sustainable solutions to the challenges of combating climate change and giving access to energy in an efficient and sustainable way, for Report | Consolidated financial statements | AnnexAnuaaAnnual Report 2020 OPERATIONALEXCELLENCECARBON NEUTRALITYBY 2050 ALLIANCES FOR DEVELOPMENTLOCAL DEVELOPMENT PROGRAMSIN ACCORDANCE WITH2030 AGENDATRANSFORMATIONAND PORTFOLIOFLEXIBILITYINTERMEDIATE OBJECTIVES OF NET REDUCTIONIN ABSOLUTE TERMS ANDOF EMISSION INTENSITYLife cycle GHG emissionsapproach(Scope 1, 2 and 3)Set of concrete actions for the entiredecarbonization of processesand products Dual Flag approachPublic-private partnershipsJob creationand know-how transferHealth, Safety and Environment Human Rights & IntegrityResilience and DiversificationCapital disciplineCOMPETENCESTECHNOLOGICAL INNOVATION AND DIGITALIZATIONVALUE CREATION FOR STAKEHOLDERST hrough an integrated presence all along the energy value chain5 Management Report | Consolidated financial statements | AnnexEni Annual Report 2020 Responsible and sustainable approachEni adopts a responsible and sustainable approach in order to ensure value creation in the medium and long term for the company and for all stakeholders.

9 This approach, the importance of which is even more evident after the outbreak of the pandemic, is confirmed in the company s Mission, which clearly expresses the commitment of Eni to play a decisive role in the just transition process for a low carbon future that guarantees efficient and sustainable access to energy for all in order to contribute to the achievement of the Sustainable Development Goals (SDGs).COMMITMENTSMAIN RESULTS 2020 SUSTAINABLE DEVELOPMENT GOALSCARBON NEUTRALITY BY 2050 COMBATING CLIMATE CHANGEEni has defined a medium-long term plan to take full advantage of the opportunities offered by the energy transition and progressively reduce the carbon footprint of its activities, committing to achieve total decarbonization of all its products and processes by 2050 -26% GHG emission intensity index upstream vs. 2014 -39% volume of hydrocarbons sent for routine flaring vs.

10 2014 -90% upstream methane fugitive emissions vs. 2014 (TARGET REACHED)OPERATIONAL EXCELLENCEPEOPLEEni is committed to supporting the just transition process by consolidating and developing skills, enhancing every psychophysical dimension of its people and recognising diversity as a resource 31,495 employees in service at 31 December (reported vs. 2019) + percentage point increase in women hired ( in 2020 vs. in 2019) Approx. million hours of training ( vs. 2019) 13,300 professional profiles mapped to date HEALTHEni considers the protection of the health of its people, families and communities in the Countries where it operates to be a fundamental requirement and promotes their physical, psychological and social well-being 354,192 of health services provided 222,708 registrations to health promotion initiativesSAFETYEni considers workplace safety an essential value to be shared among local employees, contractors and stakeholders and it is committed to reduce incidents down to zero and to preserve assets integrity TRIR(a)