1. Eni Corporate University Scuola Mattei Scuola Enrico Mattei Master Medea Academic Year 2003-2004 San Donato Milanese, 28 th June 2004 Tutors: Maurizio Granato Nicola De Blasio Alberto Marsala Giorgio Vicini -MultiPhase Boosting Technolgy – Technology Economic Evaluation Group members: Silvia Fazi Mirco Gastaldello Dario Li Gioi Massimo Stolzuoli Simona Varrasso

2. Eni Corporate University Scuola Mattei Double Screw Pump Technology Produce at Lower Costs: Reducing the Export Pipelines Using the Existing Facilities Increase Production: Wellhead Back Pressure Reduction Recovery Factor Increasing

3. Eni Corporate University Scuola Mattei Basic assumptions ٧ R&D total expenditure: 33.5697 Mln € since 1985 - R&D Off-Shore share: 63.1% - R&D On-Shore share: 36.9% ٧ WACC: 8.10% ٧ Inflation rate: 2.50% ٧ Oil prices (@2003): 18 – 24 $/bbl ٧ Gas prices (@2003): On-Shore: 1.99 – 2.65 $/Mbtu Off-Shore: 2.13 – 2.84 $/Mbtu ٧ Electricity prices: correlated to gas prices ٧ Technology life: 15 years ٧ Linear / quadratic trend hypothesis for breakeven analysis

4. Eni Corporate University Scuola Mattei On-Shore Field Mature technology ENI’s share: 50% Application life: 4 years Differential analysis between pump enhanced production and normal production NPV (ENI’s share): - oil price@18$/bbl: 1.65 Mln € - oil price@24$/bbl: 2.25 Mln € Innovative application ENI’s share: 70% Application life: 9 years Differential analysis between pump enhanced production & gas-lift production NPV (ENI’s share): - oil price@18$/bbl: 8.255 Mln € - oil price@24$/bbl: 13.062 Mln € On-Shore Field

5. Eni Corporate University Scuola Mattei 15 year technology life Cash Flow On-Shore Field (hp: linear trend) NPV@18$/bbl: 2.13 Mln € NPV@24$/bbl: 11.73 Mln € Mln € Year

6. Eni Corporate University Scuola Mattei Break Even On-Shore (hp: linear trend) Oil price@18$/bbl: Oil price@24$/bbl: number of wells: 27number of wells: 17 year: 2017year: 2012

7. Eni Corporate University Scuola Mattei 15 year technology life Cash Flow Off-Shore Field (hp: linear trend) NPV@18$/bbl: 91 Mln € NPV@24$/bbl: 168.35 Mln € Mln € Year

8. Eni Corporate University Scuola Mattei Break Even Off-Shore (hp: linear trend) Oil price@18$/bbl: Oil price@24$/bbl: number of wells: 7number of wells: 5 year: 2007year: 2006

9. Eni Corporate University Scuola Mattei The technology has achieved: Improvement of oil and gas recovery rate Recovery of oil and gas from depleted fields Less requirements in terms of facilities and pipelines Quick recovery of the money invested Conclusion On the other hand: Reduced competitive advantage on the market Thank you