Good afternoon, everyone, and welcome to Eni's 2023 First Half Results Conference Call, led by Mr. Claudio Descalzi, Chief Executive Officer. I will now turn it over to your host to start today's conference. Thank you.

Thank you. Welcome to the second quarter and first half 2023 results conference call. In the first half of 2023, Eni has delivered excellent operating and financial results, with significant steps forward in progressing the execution of strategy across all the businesses showing strong financial resilience. In 2023, we outperformed in terms of both underlying EBIT and CFFO versus expectations. And even as the scenario has weakened, we have been able to fund our CapEx, begin our shareholder buyback, alongside paying our quarterly dividend and complete Algeria M&A and biorefinery purchase in the U.S. In this quarter, we have agreed to purchase the remaining 64% of Novamont, a leading player in circular and sustainable bioplastic aligned with our strategy for Versalis. Closing of this deal is expected before the year-end, following antitrust authorizations. Our acquisition of Neptune Energy announced in June had a portfolio of complementary high-quality and crucially low-emission assets that contribute towards our shift to gas. The deal is immediately accretive and has significant synergies of at least €500 million with further upside. It also adds materiality to our integrated GGP activities, and it is a major step in ensuring long-term supply to our European gas customers. Completion of the deal is planned for the first quarter of 2024. Our agreement to buy additional interest in Indonesia from Chevron announced this week deepens our position in the region, further synergistically supporting our targeted growth in LNG in the Asia Pacific region. At the same time, we continue to rebalance our portfolio, simplifying the business and optimizing our capital. We completed the sale of a minority stake in the Transmed pipeline in January and announced the sale of mature production in Congo with additional transitions in the coming months. During this transition, it is critical to be fast in delivering and efficient in spending. These elements are part of our strategic approach that has had a fundamental impact over the past decade. For instance, in natural resources, we have shifted the E&P toward a focus on time to market and the efficient use of capital through our dual exploration model and fast-track development. The shift in profitability of GGP became evident in late 2021 as we leveraged our upstream equity position. The Russian invasion of Ukraine accelerated the plan that was already in place with the asset positions we have built, leveraging our distinctive approach in all the countries where we operate, based on promoting the local economy and social development. This is delivering materials this year, but also in the years to come. Plenitude has leveraged its large customer base to increase renewable generating capacity by over 10 times in three years by the end of 2023, and we expect to more than double this again by 2026. In a single year, we will have also doubled our EV charging points. In the Downstream, with biorefineries, we are at the center of the transition. We can capture new growth opportunities and transform traditional assets. With the two existing refineries, Venice and Gela, and now with the Chalmette plant in Louisiana, we are a leading player in the market, focusing our product on HVO and sustainable aviation fuel for hard-to-abate transportation demand. With further planned projects at Livorno, Italy, and Pengerang in Malaysia, plus additional growth options, we have good visibility on our targets of over three million tons capacity by 2025 and over five million tons by 2030. With sustainable mobility, we combine biorefineries with our marketing activities to provide the decarbonization solution for our mobile customers. On the financial side, the satellite structures are an organizational approach that complements our operational initiatives and responds to the unique capital requirements of our new businesses and the different drivers in their value. Our strategic initiatives have translated into a financially more profitable and resilient company with the capacity to invest to address the trilemma and generate the future returns to ensure that this is sustainable. Hence, if you look at our CFFO, we have grown it over time, meaning we are generating significantly more value at a given oil price than we were a decade ago. This momentum will continue across the current four-year plan where we see strong improvement in a constant scenario. The story is similar with our return on capital employed, benefiting from a streamlined cost structure, stronger focus on investment quality and capital productivity. We, therefore, expect to generate much improved average ROACE across our plan period. Higher resulting free cash flow has meant we have significantly reduced net debt and leverage to around half of the level of a few years ago, making the company both more resilient, and also able to respond to opportunities where we see them. Finally, but crucially, the strength of our financial model and the greater diversity of strong businesses has allowed our shift to a CFFO-based distribution policy with a well-underpinned dividend and buyback that sees investors participate in the upside. 2022 and 2023 represent significantly the best-per-share distribution by the company in its history. Focusing now on financials. Second-quarter economic conditions were more challenging. Brent averaged under $80 per barrel, marginally lower than the first quarter and well down on 2022. European hub natural gas was $15 per mmbtu, close to half of last year, and 30% lower than the first quarter. The SERM refining margin was around 60% less than in the second quarter of 2022 and 40% below the first quarter. Considering this worst-case scenario in 2023 with respect to 2022, Eni has delivered strong resilient results in the first half of the year. EBIT in the first half was €8 billion, with €3.4 billion in the second quarter, providing clear evidence of the business resisting a weaker macro scenario. In addition, our satellites and associates, such as Vår, Azule, and Adnoc, are important contributors with around €0.9 billion in adjusted profit in the first half. Net profit before tax and CFFO over the half amounted to €8.7 billion and €9.5 billion respectively, with €3.7 billion and €4.2 billion coming in the second quarter. Leverage pre-IFRS is only marginally growing at 1% over each quarter and is now 15%. Let's move onto the business segment in more details. Upstream production averaged 1.61 million barrels per day in the quarter, up 2% year-on-year and above our guidelines of 1.6 million barrels per day, held by growth in Mozambique and Mexico and production recovery in Kazakhstan. We are making good progress on our full-year guidance that we confirm remains 1.63 million to 1.67 million barrels per day, all around 2.5% up at the midpoint, implying an expected acceleration in the second half of 2023, thanks to new startups and ramp-ups. Above-plan volume plus a continued focus on cost management helps to partially offset the impact of the fall in oil and natural gas prices. Pretax earnings were aided by significant contributions from our key satellites Vår and Azule. GGP had another excellent quarter, generating over €1 billion of EBIT in the second quarter and €2.5 billion for the half year. This is well ahead of the first half of 2022 and second quarter of 2022, despite a significantly lower gas price. Results substantially benefited from renegotiation and settlement related to prior periods, but also continued asset optimization. In response to the cuts in supply from Russia, we have significantly reshuffled the portfolio to ensure security of supply. After such a strong first half, we are raising our GGP guidance for full-year EBIT to €2.7 billion to €3 billion from the previous range of €2 billion to €2.2 billion. Our traditional refining results have been impacted by the fall in refining margin and negative crude grade differentials and crack spreads not captured in the same benchmark, while utilization has also been lower. However, our marketing results were good, helping sustainable mobility and reflecting healthy demand for transportation fuels. After closing the transaction with PBF to form our 50-50 St. Bernard joint venture in June, we expect the plant in Louisiana to make a positive contribution to sustainable mobility and net income this year, well in advance of the original plan. Despite highly volatile and challenging conditions over the past two to three years, Plenitude has delivered on both its operating and financial targets. This is testimony to the quality of the integrated customer-based model with 2.5 gigawatts installed at the half year. Plenitude is on course to have over three gigawatts of renewable capacity by the end of 2023, almost 50% up year-over-year. In the semester, Plenitude generated €470 million of EBITDA, well over half of the previous full-year target of €0.7 billion, and we are now raising the target to €0.8 billion. Our tax rate picked up in the second quarter of 2023 to 47%, mainly through mix effects and higher E&P rates that reflect the UK windfall tax impact and lower prices. Cash conversion was excellent, with strong CFFO able to fund most of the CapEx portfolio activity, the dividend, the buyback program of €400 million, and our extra profit obligation that amounted to around €400 million in the quarter. Quarterly CapEx of €2.6 billion reflects work to complete the main project of the year, as we expected. In any case, we will reduce full-year CapEx to below €9 billion, down from the €9.2 billion previously estimated and the €9.5 billion initially guided, reflecting continued optimization and efficiency work. Business performance, CapEx efficiency, and timing flexibility provide a robust basis for our €2.2 billion share buyback. In summary, second quarter 2023 was a strong quarter for Eni and one with a clear and valuable strategic transformation. The scenario was not a tailwind for us, and yet we delivered one of our best-ever quarters. We have raised EBIT guidance for both the GGP and Plenitude, and we see underlying improvement in E&P and sustainable mobility as well. We estimate that this will amount to around €2 billion of additional underlying EBIT and €1.3 billion of additional underlying cash flow in 2023, equivalent to around two percentage points on return. At the same time, the acquisition of Neptune Energy, the continuous advance of Plenitude, and sustainable mobility demonstrate our commitment to rapid, effective, and value-enhancing management of the opportunities and challenges presented by the energy trilemma. That concludes my remarks. Along with any top manager, I welcome your questions. Thank you.

The first question comes from Biraj Borkhataria of RBC.

Hi, thank you for taking my questions. My first question is about your cash generation for the quarter, which seems to have been bolstered by dividends from affiliates. I know you received the Adnoc dividend and are expecting the Vår dividend. Could you provide details on the dividend received from Azule and confirm whether that level is sustainable going forward or if it was a one-time payment? My second question is about GGP, which significantly contributed to the positive results this quarter. The team mentioned around €800 million related to renegotiations. Could you explain in simple terms what is happening here? Essentially, GGP purchases gas and sells it to customers in Europe, taking a margin in the process. However, if a contract is signed for buying or selling, one would expect it to be upheld. What are the reasons for these regular renegotiations, and why is the other party currently agreeing to assessments? Thank you.

Thank you for the question. The first question is very, very short. Yes, Azule is a sustainable level of dividend because it's a growing company with a lot of assets, a lot of cash flow returns, and potential in terms of reserves and resources that we have discovered. Otherwise, we would not have been able to define this business combination. So yes, it's not a one-shot, it's a long-term shot, Azule. And we are the first company now as a business combination in Angola. Second, GGP, I'll just say a few words about GGP, then Cristian and maybe Francesco can complete. I think that we just want to talk about our business model. We're not just – we're not a company that buys gas from a third party and sells gas to a third party, that's not our model. All the work we have done in the last 10 years was to be able to stay in the long value chain. For that reason, we put together the GGP, the gas component with the E&P because we source ourselves, we are selling our gas via our pipeline and LNG, and that is the new structure that we built in the last years. So we are not in the model of buying gas from Russia and selling gas to somebody else. So we are along the value chain, and that is the upside, and that is also one of the reasons for the good results. So now I give the floor to Cristian to complete the answer.

Yes. So specifically, I mean, related to the renegotiation and contractual triggers effects. You have to bear in mind that in these long-term supply contracts, there are contractual clauses that provide for parties to – if they cannot find a solution in terms of commercial settlement, to provide space for arbitration and eventually settlement of those legal proceedings. So what happened actually in this quarter is that we found, with some of our suppliers, a settlement of previous periods which were accrued since a few years back or we had contractual triggers in the supply contract that allowed us to retake some of the cash flows that we had actually paid to the counterparty again, back a few years ago. So I think those are, if you want, a specific feature of the long-term contracts that we simply managed to the benefit of our company.

And sorry, just one follow-up. But are you expecting – do you have – are these coming up on a regular basis or is there any visibility on that going forward in the rest of the year and into 2024? How should we think about it?

Well, look, yes, as I told you, these are a big part of the business. So I can already anticipate that, for example, the range in guidance for the second half is also linked to the fact that we have still a couple of those renegotiations pending, ongoing that we think we are going to settle in the next six months. And this will clearly have an impact on our results. And also, that's why there is this range between €2.7 billion and €3 billion guidance for the end of the year.

The next question is from Oswald Clint of Bernstein.

Yes, good afternoon. Thank you. Yes, the first question I wanted to ask about CapEx. Now second quarter revising it back down again, probably 6% or 7%. I remember at the Capital Markets Day, you took it up 15% for the plan, and obviously, the market didn't take that particularly well. So perhaps you could just talk a little bit more about what's happening here and the possibility of that continuing also into 2024 in terms of potentially being revised down in terms of CapEx? That's the first question. The second question, just to Claudio, around your comments there on best share distributions in the company's history last year and this year. But as we look forward and we think about the balance sheet, 15% leverage and the potential to really push that number even lower and sustain this attractive distribution? And what I'm thinking is here, you've been buying a lot, but you haven't really been selling a lot, then you're on track to find another 700 million barrels this year. We've just seen a little deal with Congo. But what's the potential to start selling more perhaps less accretive barrels through time? Thank you.

Thank you. Now first of all, about CapEx, just give me the opportunity to give some of our view about the company, then we can go into the details. Clearly, when we started the work on CapEx and we presented our strategy presentation, the CapEx figures represented the situation at that time, and we continued to work on them. So all the E&P Guido and the team continue, and also Pino, but that is mainly E&P, to create efficiency in fine-tuning. So it's not that we are cutting CapEx or reducing activity, it's really inside the same project, inside the same activity that they have been able to, they did a really great job, to work out a different profile reducing. So we passed from €9.5 billion and then the first revision to €9.2 billion and now below or around €9 billion. Additional space for this year, I don't think so because I think that we performed a very good reduction. For 2024 is something that the team is working on. Clearly, we want to extract the maximum value. We will reduce our cash neutrality. We want to grow because we are growing in production as we demonstrated, but with the optimization of CapEx, so that is a continued exercise that our people are doing on a daily basis. So I'm not surprised that in a volatile situation, you can give a number, then you try to get a better number. That is our work, and that's what we are continuing to do. On M&A, I said last time, that is true. We made a strategic M&A. So with a sense along our strategy in terms of gas, energy security, and transformation of our business, so each M&A step was really linked to a piece of our strategy that we are following more in organic growth than an M&A approach. But this time, we really acquired something that was really synergistic and in line with our strategy and with our assets, creating a lot of value. From the sell side, what we are doing, okay, we did Congo you say a small one is the first step. But I have said last time, we have other marginal assets, tail assets that we are, in the next month, ready to firm out and to sell. So the M&A is continuing to be consistent with what we said during the strategy and in the four-year plan, we're going to have €1 billion positive overall from our M&A activity, though I don't know if Guido from one side, E&P and Francesco from M&A want to add something.

The M&A, just to confirm that clearly, M&A in terms of both acquisition and disposal is a matter of lengthy negotiations and occurs when the window is favorable. So you cannot expect a simultaneous management of the two sides of the M&A, but we can confirm that we are in a number of processes of disposal. And these are maturing. You will see how this will be material and will reduce the overall net debt and the leverage you are referring to.

That’s great. Thank you very much.

And just, I mean, echoing what Claudio was saying on CapEx, a good part of the capital expenses have already been made in the first half of the year. The second half is lighter, although we are still continuing that work of optimization, and we are very confident to stay within the guidance, if not better.

Super. Thank you. Thank you.

The next question is from Alessandro Pozzi of Mediobanca.

Good afternoon. Thank you for taking my questions. I just wanted to go back to the GGP and whether you can clarify how much of the contract renegotiations are embedded in the 2023 guidance? And once you exclude that, what was the main reason for the upgrade in the guidance if we just look at the optimization part of GGP? And also within this theme, what we are seeing now is very wide time spreads in the future market at present. I was wondering whether that could be an opportunity that could be monetized and can generate potentially additional EBIT for the division? That's the first question. The second question is on Indonesia. You announced a new acquisition there. My understanding is that the consideration was rather limited, but potentially, in terms of volumes, this could be a sizable acquisition that could bring 100,000 or maybe more barrels in the next few years. I was wondering if you can give us a bit more color on the potential CapEx required that you see there and where there are obligations as well to drill more wells there? That's all for me.

Okay. Thank you. So the first question is for Cristian.

Thank you. So in terms of the upgrade of the guidance, you can think of it as 50% of that upgrade has been triggered by these contractual renegotiations that were actually better than expected. The other 50% instead is linked to the better trading and optimization environment and margins. Yes, when it comes to the time spread that you are referring to, I assume that you’re referring to the fact that between summer and winter now there is a spread which is in the range of €20 per megawatt hour. Yes, clearly, we are working on trying to capture that opportunity in the market, given that the spread is surely interesting and sizable, clearly managing also the capital allocation that we do on that kind of opportunity because, as you can imagine, storage also attracts a lot of cash flow. Thank you.

Thank you. Guido can answer about Indonesia, please.

Yes. On Indonesia, clearly, it’s a very synergistic acquisition. We leverage the presence of our facilities. There is a tieback and so being a tieback and being very close to our facilities, it will place the development cost per barrel at the lower range, and we may say that we are in the one-digit region of the CapEx per barrel developed, maybe less.

And we have also to add that we have Bontang.

We have also Bontang that increased the value of this acquisition. It’s not just an upstream acquisition, as I said before, it's really the integration is the model. We start from the resources, we develop, and then we market it. So there are a lot of upside potential in this acquisition.

Thank you. In terms of volumes, can you maybe give us an indication of when we could see the first gas from those developments?

It will be beginning of 2027.

Around 100,000 gross, is that the potential target?

It will extend the plateau of our Jangkrik FPU for many more years than what is planned now, of course.

Okay. Thank you. I’ll turn it back.

The next question is from Alastair Syme of Citi. Go ahead please.

I wanted to ask about Italian gas demand which, of course, remains well below where it was two years ago. Can you give a picture of what you think your customers are doing, particularly on the industrial side, given Italy has some big energy-intensive industries? I’m thinking about things like ceramics. Prices are still high, but I guess a lot that’s higher than they were. So is there any sign that customers are thinking of picking up back on consumption? Thank you.

Yes. Look, the – when it comes to the industrial, let’s say, behavior, as you can imagine, we have seen starting from last summer when the prices were actually very high, a reduction of industrial activity, mainly linked to the energy-intensive industries that either reduce the shifts or reduce the orders to be managed. And the consumption was around, on average, around 15% reduction, even 20%, depending on the sector-specific activity. So – and this has been there since last summer. Now in the last couple of months, we have seen some timid, very timid recovery in terms of consumption, which in turn means that there is also a recovery in the industrial activity, but it’s still very timid. And also bear in mind that some of these industries were actually reducing the impact of gas by switching to other fuels.

Do you have a view on whether any of this has been permanently taken offline? Like would it all come back at the right price, do you think?

Sorry, I didn’t get your question.

How much is structural? How much it will...

How much is structural or if we can come back to the past?

Well, we haven’t seen closures if you intend closures. Now, we haven’t seen closures. We have seen a reduction of activity. So in principle, if the environment gets back, I think this demand could come back.

As in the past.

Great. Thank you very much for the color.

We have Henry Tarr from Berenberg for the next question.

Hi, thanks for taking my questions. Two, please. One, just back on the GGP side again, is a meaningful part of the GGP beat here? And then I just wondered whether you could name some of the counterparties you’re renegotiating with on the supply side or not? And then the second question, I just wonder whether you see a change to sort of downstream competitive positioning with sort of power and gas prices in Europe the way they are now? Do you think it’s a kind of a structural shift into higher gas and power prices in Europe and whether that might change the strategy for Versalis and for some of the downstream business? Thank you.

No. Look, that is clearly a crucial part of our activity, especially in LNG, and it’s an important addition to our overall energy portfolio. So clearly, it’s part of our results, and the performance is clearly also part linked to the mid-operations, both on the plant side and also on the LNG side. In terms of renegotiation in counterparts, I mean, given that those are confidential discussions, I would rather not mention any of them.

Okay. About the downstream strategy. Of course, we didn’t change the downstream strategy because of the cost of energy, first of all, because last year, when the cost of energy was ten times more than the normal situation, we have been in condition to shift from gas to other energy vectors, reducing dramatically the cost of gas. And now we are maintaining more or less the same effect, but we are not in trouble for this. Yes. Let me make a few comments about the industrial sector specifically about chemistry. We think that over the last two years, European chemistry is driving to a high-end application because, of course, today, Europe is already facing some challenges in terms of competitiveness compared to other regions, especially in North America and Asia, for the high cost of gas or let’s say, higher cost of gas. So what happened over the last five years is speeding up in Europe in terms of specialization of the market, and this is what we announced already three years ago for Versalis. And so we are continuing our journey.

Good. Thank you.

The next question is from Henri Patricot of UBS.

Thanks for the update. I have two questions, please, on some of the changes you made to the guidance for 2023 and what are the implications for later years. So starting with Plenitude, which you raised in slightly the EBITDA guidance. Is that particularly just delivering a little bit faster than we expected or should we think that maybe the 2025 guidance is looking more conservative now? And similarly, for the downstream side where you actually cut the guidance for EBIT for this year, does it make the longer-term 2026 target more challenging to achieve or is it really problems specific to this year? Thank you.

Henri, regarding Plenitude guidance, this year, the market was stabilizing a little bit in terms of volatility and level of prices. So we have been able to be very effective in our commercial strategy and making good results on the retail activity, both in Italy and also abroad in Europe, where the emergency measures taken last year to defend the most vulnerable clients have been taken out. So now the conditions in the market are a little bit better, and we can compete with other operators very well. So it is a better result of this year. We maintain our level of results also for next year.

About the guidance related to the downstream you were referring to. Clearly, this is impacted by more than from the nominal value that you can see on the term, the margin that you calculate on the basis of the benchmark by a weakening environment, in particular related to the crack spread, to the differential between crudes, and also by the reduction of gas pricing that did not clearly impacted our performance as we have already last year two different, let’s say, sources of energy. Therefore, that reference has reduced the overall performance of downstream as you’ve seen in this quarter, but we were substantially able to compensate for this effect on a like-for-like basis, so reassuming a similar level of differential, etc. And therefore, that is a confirmation of guidance in a lower environment at the end.

Yes. Additionally, it’s important to say that in the second half, with the drop of the margin of the SERM, we performed all the maintenance in the plant. So we are ready to gain to the fact that starting from July, the spread and the crack of gasoline and gas oil are increasing a lot, and we are really in the full driving season. So we expect to have summer quite bullish in terms of margin.

That’s it. Thank you.

The next question is from Irene Himona of Societe Generale.

Thank you very much. My first question is going back to CapEx, if I may. It’s quite admirable that you’re continuing to optimize CapEx and find meaningful efficiencies despite what is clearly a high external inflation environment. And I just wanted to ask what average inflation rates do you see in the, let’s say, the main procurement categories in your upstream? And then my second question, if we think about investor distribution, the balance sheet, the weakening macro, and your increasing efficiencies. I mean, if the macro were to continue to weaken into 2024, would you then be prepared to use the balance sheet for a period and re-leverage from what is a low level currently to sustain distributions, even if they were above your targeted range of CFFO? Thank you.

Okay. So thanks for the question. For the CapEx, for the cost inflation, we have seen 10% from 2021 to 2022, and we are seeing a 7% year-on-year from 2022 to 2023 and onward, which is already factored into our CapEx guidance of the year and of the following years.

So for the second question related to the distribution, clearly, as we stated in our distribution policy at the beginning of the year and we changed it and we gave a priority to it and to our investors. So the answer is yes. We can – I don’t believe in it in a low level for a long time in any case because I talk about demand, supply, and all the different dynamics because the demand is increasing, and there’s not just a question of increasing cost, but we need supply. I think that there is a good dynamic. But in the case, we have some bad periods. We cope with it. So it’s not – I think that the priority, as I said, is the admiration, and the leverage and the debt are good. For that reason, we will try to keep this leverage very low, and that is important for us to be flexible and build that we can continue to give the right level of remuneration to our investors and have flexibility in our business, in our CapEx, and in our debt to continue to be stable as a company and also foreseeable and a company that doesn’t give surprises. So the answer is yes, we can do that.

Thank you very much.

The next question is from Martijn Rats of Morgan Stanley.

Yes. Hi, hello. Quite a few questions I’ve already been asked, but I wanted to ask you two gas-related questions. The updated guidance for GGP, the €2.7 to €3.0 figure, can you say a few words about how sensitive that is to TTF prices? The context, of course, that inventory is high and they continue to fill, and we may or may not hit full storage. And then funny things can happen to the TTF price possibly. So I was wondering how robust that guidance is or whether it can swing around with European gas prices. And sort of following up on the earlier question on the contango and the TTF curve, the €20 a megawatt hour that you mentioned. I was wondering if that now pays for floating LNG storage, given where current LNG tanker rates are a little bit difficult to figure out in a seat like ours, but you’re probably a bit closer to it. So I wanted to ask.

Yes, thank you. So in the guidance, it is robust to the TTF price. I mean, we have a very, very limited exposure to the flat price this year. So this would not impact. Clearly, if you want, the impact could be on the spreads. So I mean, a flat – a lower spread means lower spreads. So this could have an impact, but is a different level. When it comes to the floating storage? Yes, sure. I mean, the economics today are robust for a floating storage opportunity. The fact is that, given the boil-off, you can build this activity for a range of up to one or two months maximum. So let’s say in order to take advantage of that price in October, November, you will see ships floating around probably around August, September, not before.

Okay. That’s useful. Thank you.

The next question is from Massimo Bonisoli of Equita.

Hello. Good afternoon. Thank you for taking my question. The first question is around the Italian National Recovery and Resilience Plan. If I understood correctly, the Ravenna CCS project was just excluded from the plan. What are the implications, if any, for the project? And the second question is still on the NRRP, what could be instead the support for the conversion to biorefineries, for example, for Livorno? And the third question, just for our models, if you can please provide an indication on the expected upstream tax rate in the second half? Thank you.

So for the first two questions, honestly, I don’t have an answer because it just has been issued yesterday. We don’t know exactly what is inside or what is not inside. It’s just speculation from the newspapers. Now we have to go through. I don’t consider honestly, any – in any case, any impact in the sense that we are going to do what is economics. What can create a profit. And that is for the transition, and not only just for the transition, but when we talk about the trilemma, we need something that must be sustainable for the environment, sustainable from an economic point of view, sustainable, affordable for competitiveness. So it is not an issue. Clearly, if there is support, it is welcome. If there is no, something that we have to discover. So I don’t have an answer for the two points yet. Maybe we can have Francesco respond to the third point.

See, they are related to the tax rate. It’ll not be particularly different from what you have seen in this quarter. So something between 45% and 47% that clearly will depend on the different contribution of the various businesses. And also clearly the scenario. As we were mentioning before, an improvement, for example, in refining, this will help to keep it lower, and clearly, even a higher price of Brent will help too. So there will be a lot of moving parts about this range.

Great. Thank you.

The next question is from Bertrand Hodee of Kepler Cheuvreux.

Yes. Hello and thank you for taking my question. Question around GGP, again in – at the last capital market, there you guided, if we exclude initial 2023, you were guiding for a recurring, I would say GGP contribution of around €600 million to €700 million EBIT level. Our recent developments and volatility in gas market or recent portfolio actions you’ve done could make you raise that guidance any color and that would be very helpful. Thank you.

Sure. So you remember well, I mean, we were guiding last year around €600 million to €700 million for 2024 and 2027. We have to acknowledge the fact that the market is still keeping a supportive trading environment. So I would say, I mean, from the time being, I would have an upward bias in terms of guidance for the next year.

And maybe can I ask also a follow-up on Indonesia? I mean, those fields you’ve acquired have been on the drawing board for probably 15 years and have been back and forth delayed and finally not launched. And now you’ve – so you bought those assets, you have a different plan. It would not be, I would say, a greenfield development, but more tieback. And then you say it’s going to be fast track, and you only see the production by 2027. So can you help me reconcile those comments?

Yes. Yes. We tried to help you. No. First of all, we go back to what we have said and what you said about 15 years ago. Clearly, 15 years ago, we didn’t have this infrastructure that we built in with Johns Creek. So we can consider that kind of resources as stranded resources without the infrastructure. Then we discovered Johns Creek and other fields, other gas fields. We developed our platform. We had space in Bontang because 20 years ago, we didn’t have enough space in Bontang because the gas was depleted, so less production. Now there are the conditions. The situation is not that this stranded as were stranded us before, after being stranded forever if there are different conditions. So that is the first point. Second, we didn’t say fast track. We just asked him the date, and they said 2026, 2027. And that is, in the sense, the priority and the space that we find in our facilities because you say we don’t want to invest in new facility, new trains. We have facilities with a lot of gas. So now we’re going to develop, and then we put gas inside. I hope that I helped you to reconcile this information.

Yes. Perfect. What you suggested is that, in fact, you don’t have much capacity in your current facility yet, but likely in two years, you would have the capacity to connect those tieback gas fields to the facility.

You are correct. You are correct.

The next question is from Kim Fustier of HSBC.

Hi, good afternoon all, and thank you for taking my questions. Firstly, could you comment on recent performance at Zohr and your Egyptian gas portfolio more broadly? There are media reports of production issues at Zohr. Your Egypt gas production is down 8% year-on-year, and Egyptian LNG imports and exports have dried up. So any color around that would be helpful. And then secondly, could you provide any updates around the Plenitude spinoff, please? Thank you.

We don’t have issues of production in Egypt. Zohr is ranging between 2.2 and 2.4. We are managing the production. Clearly, there is a seasonal effect in Egypt; the domestic demand is much, much higher than the winter demand. And so this is reflected in the export and, of course, in domestic production.

About the spinoff, it is a partial disposal to a strategic partner of a minority stake of Plenitude. We are in a well-advanced stage of negotiation. Clearly, negotiation will take time also because there are a lot of details that are to be agreed clearly in terms of value and in terms of governance. So I think that this is a program that is going according to the plan. And clearly, we will disclose once all the details will be fixed.

That’s right. Thank you.

Gentlemen, that was the final question. Would you like to make some, any closing remarks?

No. Thank you. Thank you. Thank you. I want to thank everybody for attending this conference call. I think that we covered all the topics. So thank you and have a good vacation.

Ladies and gentlemen, thank you for participating in the Eni conference call. You may now disconnect your telephones.