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Good afternoon, ladies and gentlemen, and welcome to ENIS 2025 Third Quarter Results Conference Call, hosted by Mr. Francesco Gattei, Chief Transition and Official Officer. For the duration of the call, you will be in listen-only mode. However, at the end of the call, you will have the opportunity to ask questions by pressing star and 1 on your telephone. I am now handing you over to your host, to begin today's conference. Thank you.

Thank you and good afternoon. Welcome to our Q3 2025 result 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 EMP, 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 operating performances and the ongoing progress in valorizing our businesses, we are also able to announce a further improvement of our balance sheet and an higher share buyback. Focusing on a few of the strategic highlights, I would especially pick out At the beginning of August, Azul Energy, our business combination with BP in Angola and Namibia, began production from its operated Ergogo Westap development, with the FPASO 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 startups, with VAR reaching 400,000 bar per day production, with significant incremental production from the operated Valderix development, that started up at the end of Q2, and John Casper ramped up, driving 45% year-over-year production growth. In October, we announced joint venture FID on our Coral North Floating LNG offshore Mozambique, with start-up expect in 2028. This leveraged our successful Coral South development in production since 2022, with a remarkable 99.4% availability. and together with the two vessels in Congo, it will reinforce our leadership in this technology. I would also flag the progress we are making with YPF towards FID on Argentine 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 a sale of a 30% stake of our operated baleine field to be tall, 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 two 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 projects in our development and pre-FID portfolio. In the quarter, we signed an agreement with GIP as 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 San Nazaro refinery into a biorefinery. It will add, along with three sites in operation, three under construction and further identified opportunities, including our Priolo chemical site, to the targeted tripling of biofuel production capacity to 2030. This emphasizes the meaningful growth in diversified income streams our transition segment is delivering. Turning now to our result, Q3 reflects remarkable progress in our key businesses and another excellent financial outcome. Performa adjusted EBIT of $3 billion was 12% higher than Q2 and just minus 6% down year-on-year in U.S. dollar tariffs. 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 startup and ramp-ups, good regularity and production optimization in the base. Proforma EBIT of €2.6 billion was consistent with the prevailing scenario, with EBIT associated split reflecting the rise in production, I highlighted VAR and Azul. In exploration, we have already added over 800 million barrels of new resource year-to-date. GGP reported another good quarter at €279 million in Proforma 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, Enelive reported €233 million of pro forma EBIT, corresponding to €317 million of EBITDA, around 26% up year-on-year, in a quarter that is typically our best one for marketing, but also where we saw a recovery in bio-margin to pre-2024 levels. Peritone Proforma EBITDA of €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 return 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 1.25 billion euro, effectively in line year on year, came despite the $10 barrel fall in crude price and weaker US 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 acute reworking capital draw, reflecting our focus on efficient use of the balance sheet. Indeed, we have already realized a 2.1 billion benefit to the balance sheet through prompt cash initiative in response to the weaker scenario. Gross capital in the quarter was 2 billion euro, taking us to 5.9 billion euro year-to-date. Net capital has totaled less than 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 conditions precedent, and with closing expected in early November. The sell-down in Congo and the GIP stake in CCUS, this totals almost €3.4 billion. After €560 million in share buyback and pay in the quarter 3 dividend, net debt was €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 1.71-1.72 million barrels per day. up from 1.7 million barres per day, a 3% underlying increase versus 2024. We expect GGP pro forma EBIT for the full year to be over 1 billion. We expect cash initiative and self-help aimed at mitigating the impact of weaker scenario to deliver around 4 billion euro benefit, up from 3 billion euro previously. We confirm gross capex below 8.5 billion, but we expect net capex on a pro-forum basis to be less than €5 billion, down from the €6.57 billion that we previously guided to. And we are raising expected cash flow for recreation pre-working capital to €12 billion from €11.5 billion previously, representing an underlying €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 accurate way, we are raising the 2025 share buyback to €1.8 billion from €1.5 billion of which €840 million has been completed as of end of September and around €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 distinct 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 App Scene and opening up new opportunities 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 the ENI top management here on the call, to reply to your questions.

Thank you, Francesco. Hello, everybody. We've got a queue of questions. So as always, I'd just ask if you could restrict it to two only so that everybody gets a chance to ask what they want in the time available. If you have not yet polled, as a reminder, star one to join the queue. And we're going to start with the first question that comes from Viraj at RBC. Viraj?

Hi, thanks for taking my questions. I have two, please. The first one's 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've reported since the pandemic. So could you just unpack the moving parts there quarter on quarter outside of the strong performance from VAR? 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 Q6. 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? You know, should those losses start to reduce from Q4, or are there sort of additional shutdown costs coming through? Thank you.

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, John Kasberg and Boulder X but also the accelerated startup in Angola with Agogo and better performance in the ramp up of our project in Mexico, Ghana, Nigeria and also over performance in Ivory Coast. This along with strong operational continuity in all geographies and optimized major turnaround plan, particularly in North Africa. So the combination of all these three 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 industrial calls, we always say that the benefits of the shutdown of a cracker start to be materialized 100% after more or less nine to 12 months that we shut down the crackers. So, considering that we have stopped brain disease at the end of Q1 and pre-haul at the beginning of Q3, we expect to see some benefits starting from the second half of 2025. that is in the ballpark of 40, 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 200 million on ARB base. That said, the scenario remains 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, a quarter on a quarter, because what we are saving from the destruction is compensating the lower scenario. Okay. Thank you, guys.

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

Yes. Hello. Thank you for taking my question, and 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. This could be a good indication of the level for 2006 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. and the venture in indonesia yes you can elaborate about your view about this potential risk of capacity and how you managing your portfolio of contracts thank you i will give it to guido the answer so yeah

Clearly, our exit rate is strong. We're envisaging an exit rate and a quarter between 1.78 and 1.80. We still have quite a strong and visible pipeline of high-quality projects. We still have two startups coming by the end of the year. One is the Congo LNG and also we have a gas project in Angola operated by Azul. We also have a project already in execution as mentioned by Francesco, Coral North and others in the UAE and some in North Africa. along with projects which are coming in Indonesia. But those are, of course, in the planned period and not in 2020 and 2026. As far as the LNG portfolio, we have a target of 20 million tons 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. We'll expand it in Nigeria, in Angola. And we are complementing this with portfolio projects with the U.S. Recently, you may recall, we've signed a 2 million tons per annum contract with Venture Global. And, of course, last but not least, Argentina. Argentina is a 12 million tons 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.

Thank you.

Thanks a lot. Alejandro, I got that mixed up because we're now going to Alessandro, Alessandro Pozzi, Mediabanker. Alessandro?

Yeah, hi John. Thank you for the questions. I had to, if we can go back to the production, I'm aware guidance for next year is provided with the results. But I was wondering, given the very strong exit rate, should we, and also the additional startups we 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? Thank you.

So, as 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 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 with the Petronas. There are also some further M&A operations. There are also, of course, there is also the decline of the field. Overall, we confirm the 3% underlying. All right. Thank you.

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

Hi, John, and good afternoon, Francesca and the team. Two questions. Firstly, on the buyback, can you just talk about the factors that went into your decision to lift it this course of business? 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 $1.8 billion? And then the second question, Namibia, just hoping to get some latest thoughts there after your recent well results of the lands, finding gas condensate, Maybe 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. Thank you.

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 forms. The upside is 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 the leveraging. Actually, this has occurred three times in the last four years. And many of these cases was not related to the improvement of scenario that actually declined, but in the capability to do better in terms of execution. This year, we have already announced in July, if you remember, this potential improvement is a quite unique position in the market where nobody is able to raise its distribution in this time and nobody is able to reduce. depth during the same period while executing a full effective strategy in term of project and growth in different part of the business. So we are extremely let's say happy to share this opportunity and this value creation with our shareholder and we think that the 300 million was a fair evaluation of the improvement and clearly this also proved that we are quite confident on the capability to manage any kind of downturn or soft pricing in the next year. And then I leave back to Guido.

On Namibia, as you know, we drilled three wells, very successful. The first one, Sagittarius, discovered the hydrocarbon with no observed water content. 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 to condensate to gas ratio, and we found 26 meters of net pay of rich gas condensate. So three 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 deep water, less than 1,500 meters. So clearly they offer an excellent prospect for future development.

Thanks, Josh. Thank you. Thanks, Josh. We're going to move to Al Simon City.

Al? Thanks, John. 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, Berlin and Congo, FLNG, for I think $2.65 billion, I'm wondering what the invested capital is in, you know, that you're essentially selling. What sort of what multiple of invested capital have you been able to sell this asset at?

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

In Argentina, investment in shale have been made since more than 10 years. So in 2013, it started the investment cycle in Argentina, and this is far before the rigid legislation. Rigid 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 it all, 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.

Okay. Thank you. Thanks, Al. We're going to move to Irene Hermona at Bernstein. Irene?

Thank you. Good afternoon. 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 pay tax, which fell almost halved sequentially. Is there any guidance at all on that? Are we likely to see a reduction in that cash tax rate aligned with a P&L reduction? Thank you.

I will answer about the tax and then I will give to Stefano Ballista for the . Have you seen that in the last year or years there is an improvement in the tax rate? both on clearly the report tax rate and the cash tax rate. This improvement is mainly related to 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 these segments. Clearly the contribution of the transition business, the possibility of increase of return in Italy related to the fact that there is a transformation activity going on with the possibility to recover the fare tax rate. and also the contribution of satellites that are cash neutral from this point of view. So all this is a structural change that impact both the nominal tax rate and the cash tax rate. So we have already said that we are expecting in terms of tax rate and improvement versus what we originally thought. So now we are moving 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.

Rino, thanks for the question. The strong result of AnyLive 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 a 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 reasons, 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 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 stuff 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 No. 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 proposed ban of double counting. By itself, this means above a million ton of extra demand on top of the number I said before for next year. So these are the two 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. These duties are there for HBO, due to clear the tax credit that is in US. It has been confirmed it's going to be applied to SAP as well, and this is another reason strengthening the market.

Very good. Thanks, Irene. We're going to move to Peter Lowe at RedBurn. Peter.

Oh, hi, thanks. Maybe the first is on disposals. Can you just confirm the expected timeline for the remaining ones, so kind of Congo to Vitol and then the plenitude to Excel? But then beyond that, should we think of those as being the end of the 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? Thanks.

Yes. About the portfolio, we can, as we have already mentioned, confirm that we are very close to cashing in The $2 billion related to the areas acquisition of a 20% in plenitude, all the condition precedents were completed. We do expect to have this contribution in a pair 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 of authorization for the other transaction, the one that is related to Congo, that takes more time. So this is still ongoing, but it is a process that is maturing progressively. And about the contribution for this year, clearly this year was extremely rich in terms of opportunity. We have benefited 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 are right, the gross CAPEX are still 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. and in terms of what are the future the future is that the dual expression 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 percent disposal on the 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 running 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 GAP.

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

Thank you. And again, congratulations on the very strong result. 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 $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? Thank you.

Stefano for the BioFood.

Yeah, Michele, thanks for the question. SAF for sure is driven by the mandatory mandates, given the penalties, underlying penalties. So this, let me say, it's a given. On top of Europe, now at 2%, we got higher target like in UK already in place. Clearly an increase, a sort of step up of the target along the timeline is going to help demand on SAF. This is something that could be addressed. On top, actually, there are demands like in Japan. This is a global market. In Japan, they approved the 10% in 2030. There are some discussions even in other countries in order to get SAF mandatory at the defined percentage, given it's the only way to decarbonize the aviation sector. On top, actually, there are some signs on voluntary demand. This is going to be driven also by, let me say, the supportive incentives that at a specific level will be put in place. An example is the Heathrow Airport, where half of the gap between biojet and jet is supported with a limited amount, clearly. by the institution. This kind of approach is going to support demand. And then last, 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 all 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 as a core lever to address market evolution. We don't know exactly the growth, the demand of staff, but there are clear mandates on overall HVO growth. And given current project in place, and given 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 be tight in the medium term.

Per quanto riguarda, sorry, for the difference related to the 2D estimate on cash initiative 2025, the previous one that was 3 and now is 4 billion, is substantially a mix of different factors. One is that with the risk and some of the actions that we risked in the first half, you have to consider that we have a way to optimize or evaluate, valorize substantially our storage activity on oil, some ATB, 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 $100 million that is $300 million. Another $100 million that is related to this liquidity swap on our cash strategic pool. And this $400 million, more than $400 million, that is related to the derisking of the previous cash initiative. So almost $800 million are related to these three different initiatives. About next year, I can tell you that the flexibility, the plan is still under preparation. We're in the 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 $2 billion.

Thank you.

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

Hi, and thanks for taking my question. I had one, really, which was around the GGP business and the sort of consistency of profits there. We seem to have had much better profitability sort of through the summer and kind of consistent upgrades over the last couple of years. Do you think this is a durable level of profit for this business, or do you think it's related to, you know, 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? Thanks.

Christian Signoretto will answer.

Well, yeah, 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 spread. So, you know, in Europe, but also globally, we have taken advantage of, you know, premium market vis-à-vis the flexibility that we have in our assets in order to move the gas and LNG where the premium was actually higher. You know, I think as we said, as Francesco said at the beginning, I mean, we have re-engineered the business. Clearly the lack of the Russian gases and our development of our, you know, new gas projects and energy 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.

Okay. Thank you. Okay. Thanks, Christian. Thanks, Henry. We're going to move to Martin Ratz at Morgan Stanley. Martin?

Yeah, thanks. A lot has been covered, but two if I may. So I noticed that Rosneft has a 30% stake in Zoar, 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 pick 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. European gas amount 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?

Christian, 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, you know, a fundamental reason is linked to the fact that we have terminated the contract with which we were selling gas to Botash in Turkey via the BlueStream. This was linked to, let's say, the pipeline itself. So, I mean... This is a business that, you know, we are trying to unwind also in terms of participation in the pipeline. So that is the biggest contributor 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, you know, getting more molecules into the market.

And about the impact of the new sanction introduced by the US administration, I still still very early because clearly there are details that have to be analyzed and clearly the full impact have to be completely assessed what we can clearly say is that we will ensure full compliance with this action but we have to also take into account that we have a very limited interaction with these two companies in few of our if our assets and generally we are speaking about minority stakes and non-operated stakes. So we believe at the end that there shouldn't be any material impact on ongoing operation due to this sanction activity.

Thank you. Thanks, Francesco. Thanks, Martin. We're going to move now to Mark Wilson at Jefferies. Mark, are you there?

I am. Hello. Good afternoon. Thank you for that. Speak to how this quarter is really seeing strategic initiatives coming through, certainly with the satellites in Norway and UK, 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 corral vessel, sanctioned Congo FMG coming on stream, just 33 months in Argentina, initial development being two 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 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. Thank you.

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 two, one in operations and one coming, and we've just sanctioned Coral North recently with the startup expected in 2028. In terms of security, is 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 term of cost, cost are, I mean, we are in the deepest, I would say steepest part of the learning curve so if i compare cost from the first floating lng and the and the cost of the project in of the future project in argentina and the current project in coral north the reduction is uh 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 ton per annum basis. In terms of, you said, 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 actually capturing CO2 and reinjecting CO2 in the reservoir through the gas injection, which is used for gas recovery. 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 toward the opportunity and the optionality that this technology will add to your capability to exploit resources.

Appreciate the answers. Thank you.

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 Bonasoli at Equital. Massimo, are you still there?

Thank you. Thank you, John. Good afternoon. Two questions left on any live. The first on new San Azzaro barrier refinery. Can you explain how the configuration feedstock and product profile differ from your existing biorefineries like Dainese Gel 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. Thank you.

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

Thank you, Francesco. About the San Nazaro, San Nazaro is a bio-refinery because we will recover an existing unit very recently realized in San Nazaro 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 SAP. Production of stuff in San Azzaro is an upside because there is the direct connection by pipe to the big Malpensa airport that is a big hub for the center of Europe. And about the feedstock, the flexibility of feedstock will be the same of Livorno or the other refineries, a mix of western residue vegetable oil coming from not in competition food areas, including our agribusiness. The logistics system will provide different channels of supply of feedstock and distribution of product 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 NCCM 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 from the fact that there is a very limited number of feedstock in 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 exchange of information that was considered in breaching of the competitive rule was in fact a legitimate exchange between the parties on a full supply agreement that requires this quarterly communication. In terms of competition, clearly this has nothing to do with competition. As we said before, this is an element that is a key issue. 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 the risk 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.

Very clear. Thank you.

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

Hey, good afternoon, everyone. 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 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.

Thank you. I leave to Lorenzo Fiorello, 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. Thank you, Nash, for the question. What I can say is that we use AI since a while, 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 the optimization, find the solution and helping us in creating better scenario. The use of big number of data and important technology and technical expertise. as well as digital competencies internally and with the 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 a genetic 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 $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.

Perfect. Thank you very much.

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

Yes, I have two very short questions left. The first one is on Coral Norte. So you just took FID in September, but when looking at annual report 2024, in fact, you already booked 229 million barrels of equivalent approved reserves. even if your share has risen from 25 to 50% in the project, as Exxon put out, looks to me that you've already booked the full reserve of Coral Norte in 24. And the second question is, so 1.8 billion you have buyback for fiscal year 25, 0.8 being already bought back and so there's 1 billion euros left. How should we split those 1 billion euros between the remainder of the year 2025 and 2026?

I leave the answer of Coral North to Guido.

Yes, of course. 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 partners 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 one billion to be bought. In front of us, we have three months of 2025 and then four months in 2026. I think that there are different combinations, but we'll not change too much.

Perfect. Thank you.

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

Thank you. 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. Are you signaling something into the coming years that you are now more comfortable being in that 40% plus range than you were previously?

Thank you. First of all, the percentage that you are referring to, 41-40, I think is essentially 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 of the cash initiative on the capability to execute a 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 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.

Got it. Thank you very much, Francesco.

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 J.P. Morgan. Matt.

Great. Apologies for being late joining and thanks in the context for taking the question. 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 upgrade versus the original plan at the beginning of the year was close to 1.5 billion euros. And it struck me that there was a higher proportion of the original plan at the 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 four-year plan cash flow, expectations are interesting in the extent to which you sort of see that underlying improvement as running ahead of your four-year plan baseline, or whether it's a case of sitting within the four-year plan but having accelerated the delivery of that cash. Thank you.

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

Okay, thank you. Now, I can tell you sure that about the performance, the improvement of the underlying clearly take into account of the of the scenario impact of this 1.3 we have practically 500 that are related to the upstream clearly upstream It's 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 and the different new production contributions 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 $300 million. On NLI, there is again $300 million. This $300 million of NLI is a 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 practically 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 EMP 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 Enelive, 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. Thank you.

Thanks very much. 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 their 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.