Eni S.p.A. (ENI) Earnings Call Transcript & Summary

Good afternoon. This is Jon Rigby, Head of Investor Relations at Eni. Welcome, and thank you for joining us on our 2025 Capital Markets Update and Conference Call. In a moment, I will pass over to our CEO, Claudio Descalzi, to update on our 2025 to 2028 plans and our long-term outlook. He is joined also by Francesco Gattei, our Chief Transition and Financial Officer. [Operator Instructions] Also, as a reminder, all of the materials for this presentation can be found on our website, eni.com. At this time, I would like to now turn over the conference call to Claudio.

Thank you. Thank you, Jon. Good afternoon. Welcome to Eni 2025 Capital Markets Update. We are experiencing enormous change in the energy and capital markets in the wider environment in which we operate. This change brings challenges, but also huge opportunities, which our strategy is designed to capture. 2024 was a year of decisive execution on the objectives we have set over the past 2 years. We have a strong sense of purpose to ensure 2025 delivers at the same pace. Just this morning, we have announced the significant new initiatives, the creation of a strategic business combination with Petronas in Indonesia and Malaysia area, a region of the world that has a huge potential for value creation. This, together with our other strategic actions, demonstrates once again our ability to translate our strategy into tangible results, further reinforcing confidence in our directions. Eni has never been in either stronger position or had a greater potential. In an increasingly complex and fast changing energy landscape, our strategic objective is unchanged: to generate strong and competitive financial returns, while delivering the energy products our customer's demand. We achieved this by combining new and existing technologies, leveraging our internal expertise and developing innovative economic and financial models that allow us to capitalize on emerging opportunities. Our ability to create shareholders' value is directly tied to our commitment to providing affordable, reliable and progressively lower cargo energy solutions. It is clear to us that traditional approaches are not long sufficient to navigate this market transformation. Meeting our objectives requires adaptability and a willingness to challenge conventional models, an approach that has always defined Eni. In this context, we have taken decisive actions. First, focused execution. We concentrate exclusively on a carefully selection portfolio of proprietary technologies along with assets and value chains where we have distinct and sustainable competitive advantage. Second, integrated business models. We are strengthening our industrial and customer businesses by integrating them along the value chain with an optimal balance of growth potential and risk-adjusted returns. Third, driving continued momentum in our satellite model. Azule, Val, Enilive, Plenitude, now Ithaca and soon, CCUS in Indonesia. Fourth, resilient financial structures. We are designing financial frameworks that align with the evolving dynamics of energy and capital markets, ensuring disciplined capital allocation, transparency and self-funding growth. And lastly, flexibility and optionality. We maintain a high degree of strategic adaptability in order to be able to respond quickly and profitably to the shift in our competitive environment. Clarity in our strategy allow us to act materially and effectively. In 2024, we generated many important proof point for our strategy and in our choices. In our results published this morning, we reported full year adjusted pro forma EBIT of EUR 14.3 billion, and adjusted cash flow from operation of EUR 13.6 billion, around EUR 1.7 billion and EUR 1 billion above our plan on a scenario normalized basis, respectively. In the upstream, we delivered production growth at the upper end of our guidance at 1.71 million barrels of oil equivalent per day, and we reinforced our status as the industry-leading explorer with yet another exceptional year. Plenitude grew its installed renewable capacity by more than 30% and significantly expanded its pipeline, while exceeding our full year EBITDA expectations. Enilive maintained a resilient profitability and took 3 FID new biorefineries. Our unique agri feedstock grew production by 3x. We launched the transformation plan for Versalis that will deliver a materially positive impact to the Eni bottom line. CCS has also significantly advanced in 2024. In September, we started up Phase 1 at Ravenna, while the FID for HyNet project in the U.K. is forthcoming. Our upstream operations have achieved a 55% reduction in Scope 1 and 2 net GHG emissions in line with our upstream net 0 target by 2030. On the financial side, we have been highly active in our portfolio management, moving faster and for better value than expected. On a pro forma basis, we raised EUR 3.5 billion of net cash with significant upstream high grading at good prices. We realized EUR 22 billion of implied enterprise value in our Plenitude and Enilive companies. We completed a highly accretive acquisition of Neptune Energy and then combine our U.K. upstream with Ithaca plc to create a new focused satellite in the North Sea. Because of these actions and the continuous effort to optimize our investment, pro forma net CapEx of EUR 5.3 billion was significantly lower than our guidance. These outcomes also meant that in terms of the distribution to shareholders, we have completed a 2024 buyback of EUR 2 billion, some EUR 900 million above our initial guidance and representing around 4.5% of shares in issue. We also distributed EUR 3.1 billion in dividend, while also reducing leverage to 15% on a pro forma basis, enhancing the resiliency of our financial position. Our strategy has been built progressively, leveraging our strength, our proprietary technologies in a consistent way with a clear objective to create value and transform the company while maintaining a strong balance sheet. 2025 will be another year of delivery of similar performance and progress. And now Global Natural Resources, which encompasses E&P, midstream gas and CCUS, has now expanded into -- into include 2 additional growth areas: gas fire power generation and trading. These strategic expansions strengthen our ability to capture value across the entire energy chain, fully integrating with our equity production in order to maximize efficiency and returns. Our approach is built on a foundation of in-house expertise, proprietary technologies and a deep understanding of the surface potential built over decades. This model is a key differentiator, allowing us to systematically optimize this corridor resources, accelerate timelines and enhance efficiency across our operations. Our edge exploration and development is driven by industry-leading technological capabilities, including proprietary seismic interpretation models, an advanced technique that minimize both geological and operational risks. A high-efficiency development model, which enables us to convert discovered volumes into production faster, cheaper and with lower risk. High-performance computing and AI is amplified by the startup of HPC6, one of the top 5 supercomputer in the world, which enhances our ability to analyze complex reservoirs and optimize decision-making. While others have opted for outsourcing, we are strengthening our in-house competencies, a strategic choice that give us a competitive advantage. This strategy delivers clear results. Since 2014, we discovered more than 9 billion-barrel of oil equivalent of resources, equivalent to around 140% of our cumulative production over that period from multiple geographies and place and an average cost of only $1 per barrel. At the same time, our dual exploration model has allowed us to accelerate value realization generating $7 billion in the past decade and $11 billion since the inception, while continuing to fuel organic growth. We have converted 60% of our exploration success into new production, and we are currently developing 12 major new projects. 2024 was another outstanding year for exploration. We discovered 1.2 billion barrel at a finding cost of $1 per barrel, highlighted by the Calao discovery offshore Ivory Coast and resource addition in Cyprus and in the Kutei Basin in Indonesia. We are set to maintain this momentum in 2025 and beyond. Our upcoming exploration program is focused on high-impact opportunities in core geographies, including Ivory Coast, Indonesia, where we see up to 30 Tcf of unrisked resource upside. Libya, where we will be exploring the untested potential of the [indiscernible] and also via our affiliate activities in Var and Azule. Exploration remains at the heart of strategy, driving efficient organic production growth, accelerating value creation through the dual exploration model and reinforcing our ability to deliver long-term, high-quality returns. Another recent transformational achievement of our dual model is the business combination we are now creating in the Indonesia-Malaysia area with Petronas, building upon our outstanding exploration success in the area and its further potential, this self-funding combination will invest in new gas development projects with the target of delivering in the medium term a sustainable 500,000 barrel per day equity production in a region that demands huge quantities of gas, generating material value for the 2 countries and both companies. Moving on to production, then we confirm that thanks to our exploration success and the efficient development approach, we expect to generate annual organic production growth of 3% to 4% through to 2030. Reported production growth averaging 2% to 3% per annum after the impact of portfolio high grading in dual exploration actions. Adding new high-quality barrels aligned with continuing portfolio action will translate into an underlying free cash flow per barrel improvement of 40% over the remainder of this decade, confirming we are growing value as well as volume. And now GGP. Our long-term strategy, focusing GGP on our equity gas was accelerated during the energy crisis. This successful transformation of GGP has seen it generate material value in the past 3 years, while also contributing to all the customer security of supply. We expect GGP to report around EUR 0.8 billion in pro forma EBIT on average over the planned period, in particular for 2025, our base case is EUR 0.8 billion with potential upside to over EUR 1 billion in the event of positive negotiation outcomes and supporting market conditions. In September 2024, with the new organizational structure, we incorporated oil and bio trading and power generation into Global Natural Resources. With the aim similar to that achieved with GGP and in the medium term, a similar scale of better capturing the full margin of commercial opportunities around integration, physical flows and high assets across the business. We expect Global Natural Resources to raise ROACE to over 15% without including any upside from the new marketing and trading structure. In 2025, Eni will launch a new carbon culture and storage satellite company, a further realization of our distinctive model. These initiatives aims to consolidate our CCS project under a single entity. In 2024, we started up Ravenna Phase 1, where performance has been excellent, and we are making encouraging progress toward the sanctioning of HyNet in the U.K. in the next first half of this year. We see a significant value opportunity in addressing how to abate sector decarbonization, combining transportation and storage activities and supporting emitters along the entire value chain. Importantly, we have a large and attractive pipeline of advantage projects consisting of depleted reservoir close to industrial site and with increasing visibility over financial returns and regulatory oversight. Supported by our financial model and strong investor demand for long-term, stable infrastructure project, we can develop a business of visible material value through the 2020s and 2030s. And now the transition business. Both Enilive and Plenitude have emerged as a high-growth businesses, supporting our customers in decarbonizing their energy use. Each was purposely established as an integrated value chain, combining growth component with the backbone of a large and diversified customer base. Enilive ranges through the agri feedstock in waste and residue supply, biofuel production to marketing complemented with non-oil services to people and mobility. Plenitude, meanwhile, spans renewable electricity generation to the final sale of the product alongside ancillary services, including charging stations into a large and diverse customer base. Together, these 2 businesses currently generate around EUR 2 billion in EBITDA, having almost doubled over the last 4 years and are among the leading players in their respective sectors. Their integrated models ensure resiliency and internal cash generation for growth delivery in all phases of the cycle. As they continue to grow, they represent an increasingly material source of additional income for Eni, diversifying and announcing the value of the overall company with excellent risk-adjusted returns. This differentiated profile has been recognized by a private market, and we have successfully introduced new and important investment capital. In 2024, we realized excellent value for 25% of Enilive and 10% of Plenitude, collecting a total of EUR 3.7 billion. We still have several further extraction of interest, and it's likely that also for Plenitude, we will finalize external investment up to a level of around 30% as recently happened for Enilive with KKR. And now turning to each of this business. Biofuels are the only realistic solution for emission reduction in a number of hard-to-abate transportation sector, most notably aviation, but also marine and heavy trucking, enabling the achieving of their decarbonization goals. Notwithstanding temporary imbalances under demand -- underlying demand growth for bio is strong, more than 15% in 2024, while regulatory mandate impacts over 2025, 2026 will help to absorb the current surplus and support margins. Indeed, it is likely that capacity will then struggle to keep pace with a high demand growth. Most notably, in SAF, where demand will grow at a rate of 2 million to 3 million tonnes annually over the rest of this decade. Eni was among the first movers into the biorefining space since 2014, building up significant know-how with a supply position supported by strong trading presence and the technique and the unique Agri-hub initiative. Through our Agri-hubs apps production, we are building a competitive edge in terms of security of feedstock supply and resilience against volatility. We expect Enilive to leverage its unique model, growing annual biofuel production capacity to over 5 million tonnes by 2030, of which SAF optionality will account for more than 2 million tonnes. By then, we expect to have available for use around 20% of our worldwide throughput from our own agri feedstock chain. The expansion of our commercial offerings will complement this production growth, leveraging the 1.5 million customers visiting our service stations every day. From 2025, EBITDA -- from a 2025 EBITDA base of around EUR 1 billion, we anticipate growth to EUR 2.5 billion by 2028 and tripling to EUR 3 billion by 2030 from a business with the capability to generate over 15% ROACE. Plenitude dose more than double EBITDA and installed 4.1 gigawatts of renewable energy capacity over the past 4 years. We have also become Italy's second largest players in electric charging infrastructure with more than 21,000 charging points. We are serving over 10 million customers, 42% of whom are connected to our power services. Continue to each operational and financial targets against the backdrop of a volatile market is testament to the effective and resilient integrated model. Growth will continue to be deeply impressive. This year, we'll see a further 1.5 gigawatt of capacity added, and EBITDA rise to more than EUR 1.1 billion. While by 2030, we continue to target 15 gigawatts, almost 4x in 2024, 40,000 charging points across Europe and a significantly larger customer base. This business growth will translate into a EUR 1.9 billion of EBITDA by 2028 and more than EUR 2.5 billion by 2030. Aligned to this outstanding growth, we also expect returns to rise as Plenitude evolves and mature with ROACE close to 10%, depending on our choices around investment levels before the end of this -- of the decade. Furthermore, we intend to make significant progress in developing a unique customer client model that will unify the customers' basis of Plenitude and Enilive offering, increasing upside potential for both companies. And now some points about industrial transformation. As the energy industry evolves, we are also mindful of the structural responses required in some of our legacy activities. For this reason, the transformation plan is underway. We are advancing in the conversion of our Italian refineries into biorefineries following the successful model established with Porto Marghera in 2014 and [ Gela ] in 2019, the conversion of Livorno [indiscernible] last year. Following the same transformation approach, we are progressing with the restructuring of our chemical business as part of the overarching strategy. Last year, we developed our plan to restructure and transform Versalis. We are closing steam cracking, challenged by the European scenario, and we will continue to pursue our shift to new platforms as compounding and specialized polymers, biochemistry and circularity through chemical and mechanical recycling. This transformation trend for Versalis also includes setting up in the reclaimed old industrial areas, new industrial initiatives consistent with Eni strategy across both biorefining, energy storage and potentially, data center and artificial intelligence. We expect an EBIT breakeven by 2027 and EBIT turnaround of around EUR 900 million by the end of 2028. Our strategy will also enable a reduction in capital intensity of around EUR 350 million versus the previous plan, helping us to free cash flow breakeven by 2028, and the ROACE related to the new platforms of around 10% by 2030. And now to cover the main business perspective, I will pass over to Francesco to summarize the financial aspect of our strategy and outlook.

Thank you. Thank you, Claudio. Over the next 4 years, we plan to invest below EUR 7 billion in net CapEx per year. This is in line with the previous plan even though the 2024 was such a successful year for divestment and despite the pressure of cost inflation and a stronger U.S. dollar. We'll continue to be selective and disciplined in our gross investment, which is aimed at delivering consistent growth and competitive returns and fueling our portfolio optionality and divestment plan. For 2025, we see gross CapEx at under EUR 9 billion with net CapEx at EUR 6.5 billion or EUR 7 billion, assuming a pro forma disposal plan. Integral to our gross CapEx planning is also a level of flexibility that contributes to our financial resiliency, and we estimate around EUR 1.5 billion of CapEx in 2025 remains uncommitted with a further 20% of the gross amount in each subsequent year. Growth is an important and distinctive feature of our investment case. Business growth accounts for around 65% of our gross CapEx and will lead us CFFO per share growth of 14% CAGR at constant scenario that in our scenario condition would imply cash flow from operation of EUR 60 billion over the full year plan from a 2025 figure of EUR 13 billion at $75 barrel to EUR 17 billion by 2028. With that trajectory set to continue through 2030. With our outlook for lower net CapEx, this generate free cash flow over the period of EUR 33 billion, equivalent to more than 70% of our current equity market capitalization. Alongside competitive top line growth, we are focused on a material improvement in corporate level returns. This is driven by the multiple initiatives we have underway and have discussed, including the new phase of development in our transition businesses, continued disciplined investment, portfolio high grading and improved margin capture in Global Natural Resources, our continuing corporate simplification and cost management actions along with the optimization of our corporate structure. Taken together, we project an improvement of 6 percentage points in ROACE to around 13% by 2030. Year-end 2024 leverage pro forma of agreed investment was 15%. Moving forward, we expect the leverage to remain in a 10%, 20% range with an average of 16%, 500 basis points lower than the previous plan. Moreover, full consolidation of Plenitude where the double-digit growth model demands higher leverage mask an even better underlying balance sheet. The ex Plenitude leverage over the plan would be 3%-4% lower. Our actions around our satellites provide an efficient source of capital and support the balance sheet. In the last 6 years, we have cashed in as dividend and disposal value, EUR 12 billion, and we expect an even higher amount of EUR 13 billion in the coming 4 years. However, the transaction also serves an additional function in highlighting value creation, and we can observe from the external marks where that these businesses represent an aggregate gross equity value of more than EUR 30 billion, highly material in the context of Eni overall enterprise value. Distribution to shareholders confirm the growth in shareholder value created through the execution of our strategy. In the past 3 years, we have distributed around EUR 16 billion, equivalent to 35% of our market capitalization in the form of dividend and buyback. The linked to total distribution from cash flow from operations provide a transparent connection to business performance, while the dividends remain our first priority. The proportion of cash flow from operation we allocate to distribution is a function of many considerations, including the business and scenario outlook, strategy execution and our balance sheet position. Incorporating all of this and reflecting our considerable progress, we can announce an enhanced distribution for 2025 with between 35% to 40% of expected cash flow from operation to now fund dividend and buyback. Going forward, dividend per share will continue to grow, supported by our rising cash flow and the reduction of sharing issues by operation of the buyback. For 2025, we are proposing a dividend of EUR 1.05 per share, a 5% increase on 2024 and in line with the raises in 2023 and 2024, an important trend. As crucial as dividend growth is, is the dividend quality. Our dividend breakeven under 2025-2028 plan is under $40 per barrel, emphasizing the resilience of the payout. Based on our cash flow from operation expectations and in line with our enhanced policy, we plan to repurchase EUR 1.5 billion shares under the 2025 program, equivalent to a full distribution totaling 36% of cash flow from operations. We intend to use our financial flexibility to execute the buyback in the case of any cash flow from operational shortfall. And as we did last year, we will allocate up to 60% of Eni incremental cash flow from operation over performance to additional purchases. Additionally, if our disposal plan is more material than planned, we could decide, as we also did in 2024, to further increase the percentage of cash flow from operation distribution. Solely assuming the lower end of our distribution range, we estimate total combined dividend and buyback payouts equivalent to around 45% of the current market cap over the plan period and over 70% by 2030. And these are the key highlights of our financial plan. Now I will return back the floor to Claudio for his final remarks.

Thank you, Francesco. Now this is a view on the future sources of energy. As we have seen, we have the resources strategy and optionality to navigate energy market for the long-term. We are seizing emerging opportunities, building new businesses with real longevity beyond 2030. Up to 2030, the energy, we are going to produce will grow by around 20% versus 2024, and will be more and more diversified, ensuring an attractive balance of returns and resilience. We are also investing to add further value drivers to the portfolio and contribute to Eni's lower carbon and higher value future. Looking longer terms, CFS, the leading developer of Fusion Energy in which Eni is an important investor and a technological partner, continues to work toward the start-up in Massachusetts of its pilot reactor named SPARC as well as demonstrating net fusion energy, SPARC will be used to refine the technology for ARC, the world's first grid scale fusion plan targeted for the early 2030s at the site in Virginia, with the evident need for clean and secure baseload power, fusion can be a game changer in the energy market. But even before the introduction of new base load technologies, the rapid expansion of artificial intelligence and digital services seems likely to drive significant demand growth in computational power and hence, for clean energy. This also presents an opportunity for us to develop a new business that complements our existing energy transition activities and skills. We expect demand for power from data center in Europe and Italy could triple between now and 2030. To support this development, Eni enjoys significant advantages in key areas positioning itself as a critical player in the market, thanks to our edge high-performance computing, availability of our industrial site for new data center construction, an estimated 200 hectares is ready, suitable for this aim. Capacity and Eni's expertise to deliver and develop further gas-fired and renewable power, we already have 5 gigawatts of installed gas fired capacity to ensure a fast time to market. Finally, the most innovative aspect of our unique model is the possibility to coupling power generation with CO2 capture and storage and supplying data center with reliable blue power, thereby enabling the gradual decarbonization of the supply chain in an integrated fashion. This has the potential to be a business opportunity for us with upper and double-digit returns along the full value chain, and could form part of a specific Eni satellite, something we are fully assessing in order to be ready to start up in 2025. In this regard, we have signed an MoU with [ G42 ] and MGX, the investment vehicle that G42 Mubadala have created for AI to build a hyperscale data center in our site in [indiscernible] with a phased implementation aiming for total IT capacity of up to 500-megawatt with further potential upside. In conclusion, the energy sector is transforming at an unprecedented pace, presenting challenges but also unique opportunities that we have embraced with agility and clarity of directions. We have expanded our global reach in gas market from Mozambique to Egypt, West Africa and Indonesia, while pioneering new business model through listings, partnership and valorization of growth platform. This energy transition has also allowed us to build new life into declining industrial assets. As seen in our conversion of refineries in Gela and Venice into biorefineries, a model we intend to expand further across Italy. 2024 was a year of outstanding delivery, and we expect to maintain strong momentum in 2025, reinforcing our sense of purpose and competitive edge. Our focus remains on business where we have distinctive strength and can drive competitive growth, while delivering attractive risk-adjusted returns. This means capitalizing on our legacy expertise in upstream, reshaping and repositioning traditional businesses like refining and chemicals and expanding into high potential areas, such as Plenitude, Enilive and CCUS. At the same time, we are streamlining our corporate structure to enhance efficiency in line with our long-term growth ambitions. We have significantly strengthened our financial framework to support sustainable growth and shareholder returns. We expect to grow CFFO per share at over 14% annually through this decade, improve ROACE by approximately 6 percentage points and maintain financial leverage within an historical low range of 10% to 20%. With our strong cash flow growth, we are committed to increasing dividends with an attractive share buyback program that enhanced total shareholder returns exceeding 70% of Eni's current market capitalization by 2030. At the same time, we are building a more valuable and resilient business. We are not just responding to change. We are driving the response to change with strategic clarity, financial strength and technological leadership. The opportunity side are immense, and we are ready to seize them. With this, I finish our presentation, and we are ready now with the team to answer your questions. Thank you.

Thank you, Claudio. Thank you, Francesco. We will now move to Q&A with Claudio and Francesco and the members of Eni's top management. [Operator Instructions] Okay. I think we have the first question, and it's from Michele Della Vigna at Goldman Sachs.

Congratulations on the ongoing delivery of the differentiated growth strategy. I wanted to ask 2 questions. The first one is related to the Russian gas flows that at least some observers believe could come back into Europe into the coming months or years. I was just wondering, what is your view in terms of the infrastructure being able to deliver volumes given that it's been largely unutilized or in cases like North Stream 1 also damaged? And how that could affect your [ GGP ] results and longer-term guidance? And then secondly, you've had tremendous exploration success. You've just drilled your first well in Namibia through Azule. I was just wondering, what you've learned through that exploration?

Thank you, Michele. I just want to give some initial answer to your question, then I give the floor to Cristian for talking about infrastructure and the rest. So what I think is that in the last 3 years and the last 4 years, we didn't have access to the Russian gas, just partially because we have some LNG. And until a few months ago, the gas coming from the South, about 14 billion, 15 billion. So we had a big miss of gas. In this period, all the different companies in different ways, they engage themselves with long-term contracts. Eni, as upstreamers, we engage ourselves with billions of investment to replace this gas because it was not available. So also if then in the future, I don't know when because the situation is still very tense. We have to remember that we have a war. We have sabotage. And so we have a lot of risk. But if we can go back to the past, I think that from a market point of view, this space has been really -- has been reduced with respect to the past. So I think that this is something that we have to take into consideration. Market is market. If you are not there, somebody can replace you, especially if they invested to replace you, it's not easy to change. And now I give the floor to Cristian for the rest.

Well, in terms of infrastructure, I mean I think we don't have many sites because we know -- all of us know that 3 pipelines out of 4 from the North Stream are out of order because of the attack. And then the Polish line has been repurposed for serving the internal market. And the Ukraine line, we don't have insight. We know it's under war situation, but we don't have insights. And when it comes to -- coming back to Russian gas, I would also add to what Claudio said that there are also many litigations, which are ongoing with gas and that have actually delivered arbitrations results. So that is another [indiscernible] that needs to be overcome in order to get Russian gas back.

So for the second question, if I remember well, it was about Namibia. So I give the floor to Guido to answer.

Yes, the plan in Namibia was to drill 2 wells. The first one, Sagittarius 1-X has been completed and the well penetrated the nitro carbon reservoir with 90 meters of gross thickness. We run with no observed water contact. And we run an intensive campaign for the collection of samples, data side will of course to assess the fluid and reservoir properties. The rig has moved to the second location. And last week, we spot the second well, Capricorno. So the first discovery and the second well will complete the assessment of the basin in this first phase. Thank you.

Thanks, Michele. We'll now move on to the second question, which is from Biraj Borkhataria at RBC.

I just wanted to follow-up on the Indonesia JV. Could you just give a bit more color around why you opted for this structure as well as -- compared to a simple farm down of [ Geng ]. And then maybe if you could just give some figures around what the combined entity is expected to sort of produce today relative to that 500,000 barrel a day medium-term aspiration? And then the second question is just on the net CapEx guidance for clarification. For the 2025 guidance, I think you don't assume the Enilive proceeds in the net CapEx guidance because that was agreed in '24, but will cash in, in '25. So I just wanted a clarification on that point.

So for Indonesia. So the reason why we opt for this kind of business combination is the same that we had for Angola or for Var before. That means that in Indonesia, we discovered a lot of gas. We have a huge amount of gas to put in production. So a huge amount of investments. And this business combination will be the consolidated one. So that gave us the possibility to -- and they are able with the existing cash flow of the existing business combination to assess the market and get that an investment to be self-funding. Clearly, that's opened up also another important piece of the story that is the combination with Malaysia. They have production. We have production, but resources for the future. We put together the 2 country. The 2 countries are big and well positioned. So the reason are the same that are under the logic of our upstream business combination. Geng is huge, but Geng is not alone. It's huge, but around Geng, we have additional, at least 10 Tcf of reserves proven. I mean contingent, but additional 30 Tcf of unrisked resource -- exploration resource. So you can imagine this company is going to produce at least 500,000 barrels per day. And at the very beginning, we have 3 billion barrels proven reserves and 10 billion of contingent exploration reserves. So it is very huge. It's a huge independent company. Clearly, we need additional strength. We are going to increase our production. And also the partners, so Petronas is really a strong partner. We work with them already. We work on the biofuel. We know each other very well. And I think that, that is the best possible combination at this stage to develop these assets in this region. Guido, you want to add something about that.

You said it very well. So the Geng [indiscernible] to basically combine value and growth as we did in Azule, which is a success story as we did in Var. So nothing to add.

On CapEx, I confirm that the income coming from the disposal of the 25% to KKR of Enilive. Actually, we can convert that will be cashed in, in the first week of March. It's not accounted in this net CapEx for 2025, as is not accounted the top-up of AP related to Plenitude. So everything that you will see is all the tails that are maturing in 2025, and we are going to mature, and we will disclose in the coming weeks and months.

Just a quick follow-up on the Petronas JV. Are you able to say what the production would be on the combined entity basis today? Just trying to get a sense of the growth trajectory.

Of course, it will depend on the date of the closing, but we can figure out production, which ranges from 250 to 300-ish barrel of oil per day initially.

We're going to move on to the next question, and it comes from Giacomo Romeo at Jefferies.

Yes. First question is I'd like to ask a bit of a more general question on the satellite strategy. There has been a few years since you launched. Just trying -- as you look back, what you've learned over the years in this? And how is your thinking around satellites evolved? And are you happy about the response you are seeing from the financial markets? And second question is on the transition businesses. You said it's going to represent a material source of EBITDA growth. If I look at how your targets have evolved, Enilive guidance -- EBITDA guidance has increased quite a bit compared to your previous plan, are the capacity -- Enilive capacity hasn't really changed. So I'm just trying to understand what's the driver of that. At the same time, Plenitude EBITDA seems a little bit lower in the previous guidance, a similar level of capacity. What's the driver of that?

So for the first question, what we learned. So the lesson learned. We learned that we did the right things. So the satellite was really the model that's clearly each company has its own model, but satellite model, that allow us to go faster and increase cash in because that helps us a lot in terms of reducing our leverage and increase our resilience. So I'm talking generally speaking about the concept because as you know, we have 2 kind of satellite, one for the upstream and the other for the transition. But clearly, now we -- and we are going faster because we learned and we have the tools to understand how to go, what to do, also their selection of partners. You say we range through, we started with the [indiscernible], then we range with funds, but also [indiscernible]. So we are changing also the kind of partners and also regions. So now we move with different tools with more competence and also from an agreement point of view because the business combination is to create a new company with the governance with all the different kind of due diligence from a technical due diligence and other kind of due diligence became -- you must have an expertise to be sure to do the right things. So we are clearly largely satisfied about the results but also about how it working and also the interest that the market -- the private market is has vis-a-vis this kind of new model. So for the transition, maybe you want to...

Just to get in this answer, one element that also we probably underestimated at the beginning is the optionality that is granted by having the satellites. So think of what we did with Neptune acquisition. Doing an acquisition substantially with another entity that is together with you, helping and let's say, supporting the burden of this acquisition is something that in the original thought around satellite was not planned. So I think this is an element that is very important.

Yes. But I want to complete because what you said, it means we can continue for years about talking about this model. No, because talking about the satellite model for E&P. The satellite model for E&P is a way to get something more, so making an acquisition using your dual exploration model because you put what you find in terms of reserves. So your currency is the barrels that you discovered. That is new currency. We cannot do acquisition paper, and paper like Americans or other companies that work in the same domain. But in this case, like Indonesia, but Angola, but also Var, we put our exploration resources. So the dual exploration has different kind of very interesting aspects, one that you can sell and cash in, but the other you can use as a currency to make a merge with another big companies. So we learn a lot, but I think that is really, really positive because it gave us a huge optionality.

For the answer about the delta versus last year, both of Enilive and Plenitude, I leave you -- I leave it to Stefano Ballista and Stefano Goberti, their comments.

Yes. Thank you for the question. A key answer is capacity is a key driver for increasing value. But actually, it's not the only lever into the bio business. We have several other levers, and we are addressing them all in a very detailed and focused way, maximizing the value extraction. An example is the product diversification. Our our sub focus getting higher. This is an extra value pool moving forward. Another example is the fits of flexibility. We're still working on that. We are not at steady state. We are doing significant step-up, and we will continue this trajectory even in the business plan. And then final, among others, is the value coming from the integration with the agri business, where we are moving forward in a very relevant way and where we are expecting significant advantage, even considering the inclusion of the agri fits took into the Annex A without any caps on SAF. That are the key reason for the performance improvement on top of the capacity.

Yes, Giacomo. For Plenitude, I would say, mainly scenario effect. On the renewable, we take into account a slightly lower price for a long, medium-term scenario. And also, we rephased a little bit the capacity increase year-after-year, simply taking into account the reality of the fact that sometime, we take a little bit longer to obtain authorization to install the capacity. And the third element is on the e-mobility business, in which we have revisited the pace of the penetration of the electric vehicle in the market. So we lack 2 years, let's say, compared to the provision to the estimate we did that -- in 2021. So today, we are 2 years in delay in respect to that provision. So simply these 2 effects account for the differential in the EBITDA projection.

Thanks, Stefano. Thanks, Giacomo, for the question. We're going to move now to Matt Smith at Bank of America. Matt?

If I could ask a couple of questions, too. The first one coming back to the JV with Petronas. I mean first of all, could I pick up presumably -- could you confirm the sales implications for both your gross and net CapEx guide? I guess by which I mean would you expect a cash injection as well as to deconsolidate the entity? And if I could tag on to that, would that outcome likely be consistent with the current EUR 8 billion net disposal guide. Or might require an update if this were to complete? And then my second question, could I move to the gas in Cronos, your announcement recently. I thought it was notable that the statements are on a rapid development and also access to European gas markets. I wonder if you could give us a bit of an update there. How rapid could that tieback be? And what -- if you could confirm what the sort of terms of the marketing agreement is, whether you might have to supply the local market as well?

So for the first question about the business combination in Indonesia, clearly is that the consolidated business combination. So that is not impacting our leverage and our investment. So that's all. And for Cronos, Guido, do you want to give some color about that?

Yes. Cronos and Cronos-2, the appraisal proved about 3 Tcf of gas with a potential upside in the -- beside this discovery on another couple of Tcf. Of course, the tieback to Zohr is -- and the Egyptian infrastructure is the preferable development solution to allow for fast track and a very cost-effective approach leveraging, of course, on the existing infrastructure for transport, processing and liquefaction in Egypt. And this, we believe, is a unique opportunity for Egypt and the company and the partner and Cyprus to monetize and develop as the fastest possible fashion this discovery, paving also the way to additional development in the Mediterranean. Again, leveraging on existing infrastructure, which may enable today stranded resources into producible resources.

We're going to move now to Alessandro Pozzi at Mediobanca.

The first one is on the share buyback. EUR 1.5 billion for 2025. As I look back at last year, you've announced at the start of the -- with the CMD in 2024, you announced EUR 1.1 billion, and then you ended up with EUR 2 billion. Of course, the market was a little bit more supportive. But I was wondering, putting the macro aside, is there any scenario where we could see potentially an improvement in the share buyback? I also know that you have a new distribution policy of 35% to 40%. And I think you're still a little bit below 40% once you include dividend and share buyback. Also, the second question on production for 2025. I couldn't quite see exactly what the production level is. I think it's maybe slightly up or flat versus 2024. But I've seen that you have a number of startups in '25 in Norway, UAE. And I was wondering if you can give us a little bit of color on when you see the timing when you -- on the timing of the new startups throughout 2025? And also on '25, I was wondering, is there any impact on production from the new agreement with Petronas.

So the first question for Francesco, second one for Guido.

Yes. On the first question, the buyback. Yes, you remind correctly that last year, we started with EUR 1.1 billion. So there were a pair of changes. One was related to the macro, to the performance, but also to the execution of our portfolio activity. So we were able substantially to -- at the beginning, to raise the amount, keeping the same percentage of distribution. Then we put the distribution range up to the limit, up to the maximum of the distribution policy that we designed. This year, we are expecting to do the same thing. So we are substantially -- we believe that there is clearly upside. We have, as we said last year, once we present our disposal plan, we start with an risked amount, and then we put some contingency risk factor in order to come to the level that we presented to the market, in order to be confident that this will be achieved. We have already started to see that we -- at the beginning of this year, we have already an agreement for the 5% top-up of Enilive from KKR, that is EUR 600 million. But we have also other major or material activities that you will start to see emerging, I would expect very fast in the first half of the year.

As far as production, you may have noticed that we had in the last 3 years a consistent growth of 2.5%, 3% between 2022, 2023 and 2023 to 2024. This year, our underlying is more than 3%. But as you have appreciated, we have had an intense M&A campaign both in -- I mean, 2024 and 2025. So we'll remain around 1.7%. However, we have quite a sizable number of startup this year. We have 5 major start-up, 2 in the first half in Norway, Johan Castberg and Balder X, and 3 in the second half, which are the Congo Floating LNG. The second phase, the gas project in Angola and Agogo, which is an oil project, which you will -- you will see materialized in 2026 and the following years. Those are the ones which will contribute to the 3%, 4% underlying growth presented in the plan, which then becomes 2%, 3% reported after M&A.

And sorry, what was the...

Indonesia -- you mentioned about Indonesia, yes, as I said, depending from the date of the closing, you may see some volume contribution, but this is very much depending on the data.

Is that included in the chart that you showed?

It is not.

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

Two questions. I wanted to come back on Enilive and the biofuel outlook you've given because you're showing very strong growth to 2028, and especially noting some of the pain in the market now, this does look to be truly countercyclical and many of the peer groups are pulling capacity out or slowing investments, but you seem to be sticking to your guns on this. So what do you think you're seeing in the market that your peers are not? And is it this agri feedstock program you've got running? Or are you perhaps just more optimistic on the regulatory environment than some of the peers? And then second question on refining actually. So something odd seemed to happen in the fourth quarter with the margin up and earnings down. So maybe if you could just comment on exactly what's going on there and when we should see -- just comment on what's going on there, that would be great.

Stefano?

Yes. On the market, actually, we are strictly based on fundamentals. It's clear that today, we are coming from a year of overcapacity. This is a matter of fact. This is due to an increase of supply higher than demand. Key reason is the, let's say, the type of plan that get in U.S. and in Europe, we got a little bit of a step back in demand. You remember the reason is related to the Nordics country. But this is the current situation. We are already seeing in -- and we are expecting 2025 a starting of a reverse of the trend. If we look about demand, we figure out a demand growth of about 4 million tonnes out of the 16 million tonnes, we landed in 2024. The reason are several. But let's say, in Europe, let's mention the renewable fuel aviation. This is a 2% target that is in place starting from this year, 1 million tonne of number. And then we have another 1 million tonne coming from HVO. Again, another example to make it concrete. Germany changed rules, if you want, the other way, compare what happened last year in the Nordic country. And the carryover of certificate is no more allowed starting from this year for a couple of years. This means an extra demand of 0.5 million tonnes. Is it there yet? Not yet, actually, because players are still focusing on 2024 compliance, but they're going to come. So this is the second key element. Talking about U.S., we're going to have new renewable volume obligation target. We're getting incentives on SAF. These are sort of tax incentives that are going to create a demand that is going to be competitive with the fossil fuel. And this is for the short term. We expect an extra demand versus supply of about 2 million tonnes. Of course, it's an important step toward the market rebalancing. Looking a little bit further, that's what we really care about. This trend is going to be fully reinforced year-after-year. We see an increasing demand of about 5 million tonne average number from now until 2030. This is exactly putting in place current mandates, RED, renewable energy directive number 3 is going to become demand starting from 2026. It's a given. But every country has time until this year actually to transform it into a demand trajectory. With this assumption, in 2030, we see a demand of about 45 million tonnes, 50 million tonnes versus supply that considering current pipelines and announced project, and we manage it in very details per plant with clear assumption, it's going to create a short of about 10 million, 15 million. So this will lead us to a tight market.

Margin, I know if Umberto or Pino want to say something about traditional refining margin.

Very quickly, refining margin in the last quarter of 2024 increased a little bit in terms of SERM, but vice versa, we have analyzation in the differential for crude. And this scenario remain also in this period with a little bit better the crack of gas oil, but not for the gasoline. So this scenario will continue. So we are expecting a -- not so strong market in the next future apart of the driving season, that is a confirmation of our -- that our strategy to reduce this position in Europe in the traditional refining and the conversion in -- of the plant in other activity like biorefinery is the best solution to do in Europe.

Thanks, Pino. Thanks, Josh. We're going to now move to Lydia Rainforth of Barclays. I think, Lydia, you've been somewhat unwell. So I hope you're feeling better, but go ahead with your questions.

And that's very kind, Jon. And hopefully, a little bit better. And I think you talked about the -- actually, what is tremendous cash flow growth that you're projecting, both on an absolute basis and on a per share basis. It does look like quite a lot of that is coming from the upstream side. And particularly, could you just touch on the idea of free cash flow per barrel, up 40% to 2030 as the main drivers behind that, please? And then secondly, and as you call it, I love the conversation you had about change in the industry transforming and responding to change. One of those areas you talked about was blue power and this idea of gas to power capacity. Are you seeing a different willingness to pay from the data centers for the gas. So just in terms of how you're seeing that business really grows as we go into the end of the decade.

Okay. Guido.

Yes. On the free cash flow per barrel essentially is due to 2 elements. First, that we are developing high-quality barrels. And the second that we are including in the M&A the late life assets. So the combination of the 2 are the first element. The second element, as you know, we are -- we have a very low base cost for the exploration, and we have a very low development and operational cost, which puts our project at the top tier in terms of performance. And so the combination of this, of course, is reflected into the improvement of the free cash flow per barrel.

So on the second question about gas and blue electricity or other. So what we are in the market that the need for base load is very high. Base load means that there are new activities. We talk about being the hyperscale data centers, but -- or they are to await. Clearly, we are not able to feed with the renewables. And there are 2 choices or coal or otherwise gas. So gas is under stress. And it's going to be under stress even more than now. So not just because Russia at the moment is not there with -- as before, and there is no replacement of gas -- replacement of gas until '27-'28. But it's the growth rate in terms of electricity that is really strong. And that means that you have to use gas. And that means that if you want to use gas and give to your customers, offer to your customers a low-carbon gas or a blue gas for us is a gas that is practically complete decarbonized. That is one of the way. Clearly, in the future, nuclear. But how we can tend to be able to spread everywhere nuclear very, very soon. So I think that with this need of electricity, gas is the source. I don't think coal at all. And the other source is CCS to decarbonize this gas. Clearly, you have to be very efficient in CCS for power plant because I said before, sometimes you have a very low content of CO2 and that became very expensive or very difficult. So you must have the technology. You have to be -- you have to really work well on the capturing. And the other stuff, you must have your assets -- your asset, I'm talking about depleted reservoir or your pipes and transportation and network close to the side and need to be decarbonized. But in terms of gas, our view is that we need gas for a long time, and we need to decarbonize this gas.

We're going to move to Henry Tarr at Berenberg.

I had two, so I'll try to stick to the policy. The first was on operating costs to come back on that. I think you talked about your best-in-class operating costs across the upstream. We're seeing some of your peers focus sort of hard on cutting operating costs, citing digitalization, sort of reducing contractors, and in some cases, workforces quite significantly. Do you see any more room to become more efficient on OpEx? Or are you more focused on sort of growth at this point and you're comfortable with the cost base? And then the second question on a completely different topic, just going back to European gas. The forward curve obviously remains a little bit unusual for this year, and the market is very tight. The guidance is sort of flat year-on-year. What might change that for GGP? Are there any considerations that we should think about for the gas trading environment?

Of course, our focus on efficiency and reduction of operating cost is a continuous drive in the organization. But the answer to your question is in my previous answer to the last question. So by developing high-quality barrel and reducing further the late life asset, we will see in the plan a continuous trend of reduction of the operating cost as a consequence of it.

Okay.

So on the European gas price, our forecast when it comes to GGP are in line with the prevailing market situation. So both in terms of flat price then in terms of volatility. We have a moderate exposure to flat price as usual. So we tend to focus more on optimizing our asset base than taking important positions, long or short, whether they are on the market. So I'd say our guidance for 2025 is fairly resilient to the macro environment. Clearly, I mean, we are up for upside when it comes to market movements, and outcome of renegotiation that we are -- as usually having with our suppliers and customers.

I think the next caller is Matt Lofting at JPMorgan.

Yes. Two, please. It strikes me in the context of a very welcome increase to 35%, 40% CFFO distribution that the last 2 or 3 years has seen a strong tailwind from that perspective in terms of E&I beginning to be able to progressively increase that ratio. I guess as you got to sort of 35%, 40% now, that sort of regular increment -- increase up is probably sort of running the majority of its cost. But can you just talk about the sort of the key metrics that underpinned moving to 35%, 40% and the extent to which the top end of that range or it remains fully covered by organic cash flows? And then second, full year CapEx in the plan, flat versus the guidance, I think, broadly from 12 months ago despite cost inflation and a stronger dollar. Can you just explain how those factors have been mitigated and how much of that is attributable to any deconsolidation assumptions that have been made around the upstream on the JV with Petronas?

Okay. About the distribution policy progress. Remember that we started with 25%, 30%, then we move to 30%, 35%. Now we are moving to 35%, 40%. This is exactly the logic in executing a strategy that works, that is fitting in managing all the challenges of transition and on the capability to continue to sustain upstream growth, production, cash generation and finding different sources for pulling all the different targets and goals that we are looking for. So you will continue to see improvement in the distribution policy as we are going to progress in our execution and the model will reinforce the overall generation of the company that is organic. We are designing a strategy and a distribution that is based on cash flow from operation, not on free cash flow from all sources. So that is exactly an organic generation of results and therefore, of distribution. In terms of CapEx. In terms of -- do you want to add something?

No. I want just to say something about CapEx, then I leave you the floor to you -- to Guido. When we talk about CapEx, so not all the projects are the same, not all the CapEx are the same. Our -- we have been very selective in our strategy. When we say that we go to develop exploration near field and develop -- and try to develop field close to existing facilities, our facility or other facility, that means that we want to reduce our CapEx. And if you look at what happened really recently in Cyprus. So our choice is to develop the field using existing facilities or what is going to happen in Indonesia, where we're going to use all existing facility for [indiscernible] Creek for the South hub or Italy or Congo or Angola. So if you're able -- so you have a good spread of existing assets, you are able to explore and find resources, low cost $1 per barrel and use existing asset. Clearly, you are able to keep your CapEx at a reasonable level. If you have all green asset or green countries, so Namibia or other countries where you have to start from scratch, clearly, it's much more difficult. Now I can give the floor to Guido to complete and Francesco to complete.

Just as a metrics, in the next 4 years, the average net upstream CapEx is below 4.5%, while the gross CapEx will range between 5% and 5.5%, showing remarkable reduction just to -- with production growing. A reduction of more than 15% compared to the previous 4-year plan, with production growth to further underline what Claudio said, that our CapEx program is disciplined and mainly focused on high-quality barrel in Indonesia, Libya, Cyprus, Ivory Coast and Congo with more than 50% focused on gas and LNG projects.

And then there is another element that clearly, the satellite model allow you to finance CapEx through stand-alone solutions, entities that are able to have their own funding capability, their own partnership and banking capability. So that element clearly give you some additional flexibility in CapEx and therefore, reinforce your growth profile, while keeping the balance sheet stronger.

So we're going to move now to Massimo Bonisoli at Equita.

First question on carbon capture and storage. What kind of economics do you expect for CCS by 2030 and what level of investment in CCS is included in your plan? And the second question on M&A. Do you still assume an IPO for Plenitude or Enilive over the plan?

Of course, we are involved in the Transportation and Storage segment, which very likely, it's a regulated asset base. So we expect return over utility of a regulated business, which is a high single-digit for this business with some upside in the jurisdiction where there might be some merchant component of this business.

In terms of the IPO for Enilive and Plenitude, we are in different clearly assumption. We have the potential for having an IPO for one of this entity. Clearly, it will depend whether the condition of the market, we all know that. You have to consider that in any case, the contribution of an IPO in the plan from these 2 or one of these 2 assets is relatively limited because there is a stake from the private player that has a priority in the IPO. So there will be a contribution from our sale, but this is less relevant than the other.

We're going to move to Paul Redman of BNP Paribas.

Yes, two questions. First one is just on divestments. You're guiding to a run rate of about EUR 1.5 billion a year, if I read the numbers right, but it sounds like that will be front-end loaded. So there will be a lower run rate for the remaining 3 years post 2025. I just wanted to see whether that's because you think you've high-graded the portfolio to a level you're happy with, or potentially there's maybe some acquisition spend at the back end of the plan that might be reducing the net divestment target? And then secondly, on GGP, you're adding a lot of contracted volume. It would be great to get kind of a breakdown of what are the moving parts from 2025 to 2030. But also just an understanding of -- it looks like in your plan, the PSV price is higher than what we got in 2024, but your EBIT guidance is -- well, you got EUR 1.1 billion in 2024, but you're guiding to an average of EUR 800 million in 2025 to 2028. I just wanted to see what the driver of that reduction was.

About the divestment, it's correct that as we also presented last year, front-end loaded. But this is a matter of, again, of making assumption, risking expectation. You have to consider that we continue to refuel our pipeline of opportunity. The discoveries coming from exploration are a source of the dual exploration model, and this will continue. On the other side, we are building a new business model as also was described during this presentation. And therefore, there are just a certain assumption where we have visibility. While in the second, third and fourth year, this visibility is lower, but does it mean that there is no potential. This will become clearer in the coming year.

So when it comes to GGP, so on the buildup of the portfolio, the biggest growth we're expecting is on the LNG portfolio, which is clearly building on our equity projects. So Mozambique, Congo, Indonesia. Those are the major elements of increase of our portfolio, which we are trying to build up, up to 20 million tonnes by 2030. On the gas side, we have the similar clearly, growth when it comes to equity contributions. So think about the new equity projects in Italy or in Nigeria or in Libya or in North Europe. But in terms of size, LNG will outsize the gas portfolio in due course. When it comes to the guidance. So this year, we have reached EUR 1.1 billion vis-a-vis the EUR 800 million guidance and the delta is explained by 2 elements. One is the scenario. So half of it is explained by the scenario. And you don't have to look at the flat price as we said before. It's more about the spreads and the volatility of those during the year. The other half is linked to one-off elements, which are linked to renegotiation with our customers or suppliers, which benefited for another EUR 150 million. So as we said, this year, we are expecting a resilient EUR 800 million according to the current prevailing market scenario. But should there be some hiccup in volatility or some upside also from our negotiations, we will be there to capture them and deliver them.

Thanks, Paul. And I think you just snuck in 3 when I wasn't watching. But anyway, we'll move on to Kim Fustier, Kim at HSBC.

Firstly, on Egypt. I think you've stopped disclosing Egyptian upstream production with these results. Could you comment on the rate of decline you're seeing currently? And what you're doing to limit these declines? Secondly, on Versalis, could you update us on the progress on restructuring? I think with 3Q results, you talked about positive EBIT in 2027. Now you're talking about breakeven in '27. I appreciate that could be a rounding error, but has there been any slippage or are things still broadly on track?

Yes. On Egypt, let me say that we are -- we see encouraging signals based on 3 elements. First, after the agreement struck last year with Emirati, Egyptian -- Egypt got some funds. And with these funds, they resumed the flow of payment to the IOCs and all the IOCs resumed activity, onshore, offshore, including E&I, of course, and we have plans to restart activity in our operations in the Red Sea, western Desert and of course, Mediterranean with 2 side track to -- with 2 up to wells in Zohr to complete the final development plan plus some other infill activity. Second, agreements have been signed, executed between Egypt and Eastern Mediterranean country to create the right environment for -- I mean and have a gas up in Egypt. This would allow to attract more gas and make use of the infrastructure and also to give benefits to some of the stranded resources, domestic resources in Egypt that today are not developed because of -- lack of infrastructure. So this transportation that will come from the East Med projects will give a boost also to the stranded resources. And number three, Egypt has started finally its journey to raise the renewable capacity and try to minimize the use of gas for the production of electricity. Today, the energy mix is not rightsized for a country with plenty of wind and solar resources. So in the last year, of course, production was declining, but we are seeing positive signals. And I think the whole industry will -- is fighting this current trend. And as I said, we see positives there.

Okay. Just on Versalis, just introduction that the main pillar of the strategic plan of Versalis is the dismission of the cracking. We have fixed the timing for the dismission, and the [indiscernible] cracking will be shut down within this year, the first and next -- the end of the next month. And we have reached a agreement with the majority of the unions, and we expect to have an agreement, a final agreement also with the government within a few days. This is the main pillar that allow us to reduce the main losses of Versalis exiting from the base chemicals. For more color, I'll leave the floor to Adriano.

Yes. So thanks for the question, Kim. As Pino was mentioning, we are progressing in line with plan, in some case, especially for the shutdown of the 2 crackers that we are speeding up because the original plan was half of the year and end of the year. And now for Brindisi, we are going to stop activity by end of March. And in Priolo, we are going to do in the last quarter of 2025. The same time also in terms of polymer production because we said that the restructuring was a shutdown of the cracker, but also to resize the polymer production. We already stopped production in Ragusa and optimizing some more production. And so I would say that as your question is in line with plan, in some cases, we are also speeding up because the scenario remain extremely negative. I'm pretty sure you heard also about what some peers have declared over the last few weeks, also the last comment from a restructuring of a major company in Europe. In line -- based on your second question, if it's breakeven or is it positive, it's a breakeven EBIT in 2027, 3-digit positive EBIT in 2028.

We're going now to Bertrand Hodee at Kepler Cheuvreux.

Yes. Two, if I may. The first one is on your accretive production growth trajectory. You've disclosed a new target, but I must admit that this target of unit free cash flow per barrel, growing 40% is a bit difficult to reconcile because there is obviously a CapEx element in it, especially with the JV with Petronas, I guess. But I remember that last year, you disclosed, I would say, more straightforward metrics, which was a cash flow per barrel that were expected to grow by 30% from 2023 to 2027. Do you have an updated figure for this cash flow per barrel increase over the next 4-year plan? And my second question is, can you give us an update on Mozambique development? I was a bit surprised by the way, that you didn't take FID on Coral North last year. What is missing for E&I to push green button on Coral North?

Yes. On the reconciliation between last year cash flow per barrel growth and this year free cash flow. I suggest that these details could be shared with our Investor Relations team. So it will help to provide to, let's say, bridge the gap and clarify everything. About Mozambique.

Mozambique, of course, as you know, Coral North will be an enhanced carbon copy of Coral South. And last year, we have completed the technical work to include and factor in the new design, all the improvement and the lessons learned that we learned from the first 2 years of operations in Coral South. Last year, there was a quite political situation to monitor elections, post elections. And so now we see more stability in the country. And of course, it's now the right time to take an FID. At the partnership level, we are supported. We have submitted the plan of development to the government as we expect an approval anytime soon.

Yes. If you want to get in touch with us, we can provide you with a reconciliation. I mean the basic methodology is to try and come up with a cash flow metric that better aligns with the structure of the upstream business with the satellites. That's the idea behind it. We're going to move on now to Irene Himona at Bernstein.

Yes. I had a question, first of all, on upstream CapEx. About 4 years ago, you spoke about the upstream CapEx coverage. In other words, the oil price at which upstream cash flow covered upstream CapEx, which at the time, grew $37 a barrel, and you were targeting for it to drop by a quarter by 2024. So I wanted to ask, they did fall by a quarter in 2024? And are you able to guide on the evolution of that metric by 2028 as upstream cash flow per barrel improves? And then secondly, in the upstream, where you now obviously report pro forma EBIT, and the satellites are a little bit more oily. Will you at some point, provide us with a sensitivity to oil and gas prices for that pro forma EBIT and cash flow?

So if we compare, of course, with 4 years ago, a lot of moving parts, inflation, spike of inflation and -- but I mean to -- we have an average today 4-year plan cash neutrality in the region of $30 organic. If we include also the net CapEx, we are below $25.

On the EBIT pro forma sensitivity, we have already added a column in the attachment. So you will have an additional element, so you have all the driver the factors that can help you to modelize.

We're going to move to the last question, which is a follow-up question from Matt. So Matt Smith at Bank of America. Thus demonstrating we will reward people who ask two questions with a follow-up. So Matt, you'd like to ask your question?

I'm not sure if that means I have one more or two more. Much appreciate. Could I just clarify on the -- you've linked the buyback, the CFO policy range to progress on the disposal plan. Could I just clarify, all else equal, would it require you to exceed the net CapEx plan for 2025 to see you utilize the top end of your payout ratio? Or would just executing that becoming more confident and comfortable on that execution unlock the upper end of the range, please?

Yes. As we said -- as we did last year, substantially by having an accelerated disposal plan with higher value, so proving that our assumptions were right, but also were probably too risked, as we said before, we could raise the bar. So instead of having the 36% as a reference, a parity of cash flow from operation, we can raise that level up to the maximum of 40%. So the disposal plan in its capability to overperform in terms of size and speed will also ask to be more confident in raising the percentage.

That brings Q&A to an end on our 2025 Capital Markets Day. Thank you very much to everybody for joining. Thank you for your interesting questions. Any follow-ups, please do direct them to myself or anyone on the team and hopefully catch-up with you soon. Thanks very much. You may now disconnect.