Rapporto Eni Hse2005 en

Health Safety Environment 2005 report
MISSION
We are a major integrated energy company, committed to growth in the activities of finding, producing, transporting, transforming and marketing oil and gas. Eni men and women have a passion for challenges, continuous improvement, excellence and particularly value people, the environment and integrity
Countries of activity
EUROPE
CSI
CENTRAL ASIA
Azerbaijan, Georgia, Kazakhstan, Russia Austria, Belgium, Croatia, Cyprus, Czech Republic, Denmark, France, Germany, Greece, Hungary, Ireland, Italy, Luxembourg, Malta, Netherlands, Norway, Poland, Portugal, Romania, Slovakia, Slovenia, Spain, Switzerland, Turkey, United Kingdom
AFRICA
India, Pakistan
SOUTH EAST ASIA AND OCEANIA
Algeria, Angola, Cameroon, Chad, Congo, Egypt, Guinea Bissau, Libya, Morocco, Nigeria, Senegal, Somalia, South Africa, Sudan, Tunisia
MIDDLE EAST
Australia, China, Indonesia, Japan, Malaysia, Papua-New Guinea, Singapore, South Korea, Taiwan, Thailand, Vietnam
AMERICAS
Iran, Kuwait, Oman, Qatar, Saudi Arabia, United Arab Emirates
Argentina, Brazil, Canada, Dominican Republic, Ecuador, Mexico, Peru, Trinidad & Tobago, United States, Venezuela
MESSAGE FROM URS ITALIA
We were appointed as independent auditors of the Eni 2005 Health Safety and Environment Report. The auditing activity regarded the structure and contents of the Report, the accounting process adopted and the Reports suitability as an effective communication tool for HSE themes. Our evaluations are summarized in the letter of verification on page 98. Specific comments relating to the sites checked are included in dedicated areas within the body of the Report.
(see page 98)
The following color code is used in the document:
Eni, Petrochemicals, Oilfield Services Construction and Engineering, Other activities Exploration & Production Gas & Power Refining & Marketing
Message to our stakeholders
Contents of the HSE Report Main results Company profile
2 4 6 8 13 17 20 21 22 24 26 28 29 33 34 35 36 40 40 41 42 43 44 45 46 46 50 52 54 58 62 64 68 70 71 79 82 88 92 94 96 98 100 Sectors of activity Financial and operating performance The economic dimension of HSE Model of environmental sustainability HSE Policies Commitments, Achievements and Goals HSE Governance and Management System Certifications System and technical audits HSE knowledge management Opinion sharing Global approach, local attention Assessment and prevention Management Monitoring and reporting Information technology for health services Health promotion initiatives Management of health emergencies Expenditure and investments Industrial risk assessment and management Plants and products Transport Injury prevention Emergency management Expenditure and investments Energy Air Water Habitat, territory and landscape Expenditure and investments
HSE governance
Health
Safety
Energy and environmental sustainability
Our commitments
Climate change and energy Biodiversity Transport system Eco-friendly products HSE key performance indicators Units of measurement, symbols and acronyms Glossary
Tables and glossary
Verification of the Report
Methodological remarks
E N I H E A LT H S A F E T Y E N V I RO N M E N T R E P O R T 2 0 0 5 / M E S S AG E TO O U R S TA K E H O L D E R S
Message to our stakeholders
2005 was a year of major progress for Eni in terms of financial results, growth of our activities and HSE (Health, Safety, Environment) performances. Several of Enis economic and financial indicators have reached absolute records: consolidated revenues, gross and net operating profits, net capital employed, the dividend paid to shareholders and the stock-market capitalization, all proving that the overall value of the business has grown. These record figures were achieved not just due to the rise in oil prices, but to increased operational efficiency. Hydrocarbon production grew by 7%, as new reservoirs were put into production. Sales of gas in Italy and Europe grew by 8% and power generation developed at a very high rate, 64% on an annual basis, after new natural gas fuelled combined cycle cogeneration plants were started up. On the HSE front, the lowest ever injury indexes were recorded, both for employees and contractors. Furthermore, annual expenditure rose by 33%, with the aim of satisfying stakeholders expectations from a large industrial group which operates in major industrial sectors, which are critical both in terms of safety and environmental protection. In a more global context, in which the demand for energy is steadily increasing, the year 2005 also confirmed the fragility and vulnerability of energy supplies which had, and are likely to continue having, a strong impact on the level and volatility of the prices of primary sources. On the environmental front, after a long incubation the Kyoto Protocol came into effect. It is likely to have a strong influence on how the energy system evolves, with probable impacts on the mix of primary sources, on the quality of final energy products, on the choice of
technologies for conversion/use and on the final demand for energy. At the same time, in line with the objectives of the Kyoto Protocol and new market instruments for tackling the challenge of Climate Change, the Emission Trading market was set up in Europe, involving almost half of European CO2 emissions. The issues of energy safety and Climate Change and related greenhouse gas emissions have thus become, and in our opinion will remain for some time, the central drivers for the development of the energy system. Many years ago, Eni recognized that Climate Change was an important factor for the evolution of the energy sector and for strategic business choices. To this end, it drew up and adopted a Carbon Management strategy, which has as its aims: preferential development of low carbon-content fossil fuels, and of natural gas in particular; gas-electricity integration, exploiting the greater efficiency of combined cycles and cogeneration; active participation in Emission Trading systems, promoting the reduction of emissions in its own industrial plants; carrying out reduction projects based on the CDM and JI flexible mechanisms, instituted by the Kyoto Protocol; gradual reduction of the flaring of gas associated with oil production, developing new local or international markets; development of technologies for the separation and geological sequestration of CO2; designing a sustainable energy system based on a broader set of primary sources and highly efficient technologies.
E N I H E A LT H SA F E T Y E N V I RO N M E N T R E P O R T 2 0 0 5 / M E S S AG E TO O U R S TA K E H O L D E R S
Paolo Scaroni Chief Executive Officer and General Manager
Eni has achieved satisfactory results across all of these lines of action. It is pursuing its pathway to becoming an energy company with low CO2 emissions, whether direct or indirect. Indeed, with regard to our internal energy consumption, we have reached an average emission factor of 2.57 tCO2/toe, which is just above that of natural gas. For power generation, the new natural gas fuelled combined cycle cogeneration plants have meant that the average emission factor has dropped to around 0.34 tCO2/MWh, which is a very low value in the realm of thermoelectric generation. And lastly, for the basket of energy products sold by Eni, thanks to the prevailing and growing share of natural gas, the average emission factor is 2.65 tCO2/toe. As for the Emission Trading, Eni is one of the major players in Italy and Europe. In Italy, it is the largest industrial group in terms of number of plants involved (61, which is 7% of the total installations), and second largest in terms of allowances of the National Allocation Plan (22.4 Mt CO2 in 2005, equal to around 10% of the overall allocation). In order to prepare for Emission Trading, Eni developed a coordinated series of activities and a capillary management organization. Starting from the individual installations, it moves up to the various business units and, lastly, is consolidated at Corporate level. Since the organization and integration of all these activities is very complex, a Management team for Greenhouse Gases was set up in Eni. It coordinates management and draws up forecast and final compliance plans, identifying any actions required to ensure that the groups overall position is balanced. The organization successfully passed its first test in the first few months of 2006,
when 2005 emissions were verified and the first allowances were surrendered. In addition to taking part in the European Emission Trading system, Eni is developing its portfolio of projects to reduce emissions based on the other Flexible Mechanisms of the Kyoto Protocol. The project for power generation carried out in Kwale in Nigeria has already been submitted to the CDM Executive Board. The project uses associated gas that was previously flared and curbs emissions by 1.5 MtCO2/year. The Kwale project is the first in a wider portfolio that has already been finalized; it is part of the collaboration that Eni established with the Italian Ministry for Environment and Protection of the Territory through a Voluntary Agreement signed during the COP9, which was held in Milan in December 2003. The Agreement focuses not only on CDM projects, but also aims to use Joint Implementation. To this end, Eni has begun the assessment of the opportunities for JI projects in the most promising countries. Lastly, Eni has launched the research and development of a more sustainable energy system, in which technological innovation will play a very important role. Enis work towards this objective has initially focused on capturing and permanently storing CO2 in geological formations, and on the energy uses of biomasses, both for power generation and for the use of biofuels in road transport. With these actions, and others still at the design phase, Eni intends to be a main player in the development of a more sustainable energy system, with the aim to reconcile the preservation of quality of living standards with the need to protect the global environment.
Contents of the HSE Report
E N I H E A LT H S A F E T Y E N V I RO N M E N T R E P O R T 2 0 0 5 / C O N T E N T S O F T H E H S E R E P O R T
Eni places great importance on monitoring HSE performance. Firstly, because monitoring and interpretative abilities are the basis for identifying actions for continuous improvement. Secondly, because accounting for and reporting on HSE performances are of interest to a vast range of Eni stakeholders. For these reasons, the HSE Data Reporting Manual is updated and expanded each year. It is the key document for monitoring and controlling HSE performances. This activity is aimed at ensuring the completeness, precision, time consistency and reliability of the information, as well as the adequacy and efficacy of information flows. The accounting system, in addition to consolidating quantitative data, is able to acquire the main information that contribute to representing HSE management. The accounting system uses a database containing the historical records of HSE performances, taking into account the different organizational structures that Eni has had over time. It comprises the data of the three divisions, the subsidiaries and all the joint ventures in which Eni has the role of operator and therefore responsibility for management, independently of our equity. HSE analysis and reporting also makes use of other instruments, such as: organizing meetings to share HSE accounting methods with HSE accounting experts in the business units; the operational procedure for monitoring and reporting on HSE data; audits of the accounting systems and planning objectives for their improvement. Enis organizational evolution towards a multi-division company prompted a new way of presenting Health, Safety and Environment issues. The aim of the HSE
Report 2005 is to present the operational dimension of Eni through the activities of the Divisions (E&P, G&P, R&M) and the consolidation of all the business units. The historic coherence of the information is demonstrated by the annexed synoptic tables of the performance indicators of the last three years, divided into the six sectors of activity (Exploration & Production, Gas & Power, Refining & Marketing, Petrochemicals, Oilfield Services Construction and Engineering and Other activities). In the exploration & production sector, the activities of the Exploration & Production Division and Stogit are consolidated; the activities of the Gas & Power Division, EniPower, Italgas and Snam Rete Gas are consolidated in the gas & power sector; the refining & marketing sector consolidates the activities of the Refining & Marketing Division; the Petrochemicals sector consolidates the activities of Polimeri Europa; the activities of Saipem and Snamprogetti are consolidated in the Oilfield Services Construction and Engineering area and lastly, the last sector (Other activities) covers the activities of Ambiente, Eni Corporate, EniTecnologie, Sieco, Syndial and Tecnomare. For the first time, indirect HSE accounting has been included for activities conducted on behalf of Eni, so as to highlight the importance given to the HSE commitment along the supply chain. The main reporting standards were taken into consideration when preparing the Report, ensuring continuity and integration with other communication tools. In particular, the Report was written with reference to the GRI 2002 Guidelines in the parts regarding HSE. A synoptic representation of the key indicators of HSE performances used in the Report is given in the final section.
Methodological remarks page 100
E N I H E A LT H S A F E T Y E N V I RO N M E N T R E P O R T 2 0 0 5 / M A I N R E S U LT S
Main results
Economic-operating data
Net sales from operations Operating expenses (1) Operating profit (1) Net profit (1) Capital expenditure (1) Return On Average Capital Employed (ROACE) (1) Leverage (1) Daily production of hydrocarbons Total sales and own consumption of natural gas Sales of refined products HSE expenditure
(1)
2003
(Mo) (Mo) (Mo) (Mo) (Mo) (%) (%) (kboe) (Gm3) (Mt) (Mo)
2004 57,545 41,592 12,399 7,059 7,499 16.6 0.29 1,624 83.81 53.54 1,124.5
2005 73,728 51,918 16,827 8,788 7,414 19.5 0.27 1,737 91.15 51.63 1,496.7
51,487 37,732 9,517 5,585 8,802 15.6 0.48 1,562 78.33 50.43 924.8
Health
Health staff Environmental surveys (2)
(number) (number)
791 10,051
862 41,273
1,014 13,459
Safety
Injury frequency index - employees Injury severity index - employees Mortality - employees Mortality - contractors Mortality index - employees Mortality index - contractors Hours worked - employees
(number) (number) (number)
3.79 0.09 8 22 0.000039 0.000065 204,822,858
4.47 0.11 9 26 0.000051 0.000063 175,293,279
3.17 0.10 5 13 0.000027 0.000037 182,763,908
Environment
Freshwater consumption Net energy consumption GHG emissions Direct CO2 emission/toe consumed Acidification potential Hazardous waste (3) Non-hazardous waste (3) Number of oil spills Certifications
(Mm3) (Mtoe) (Mt CO2 eq) (t/toe) (t SO2 eq) (kt) (kt) (number) (number)
268 9.15 52.8 2.89 150,422 1,043 1,823 121 122
274 9.24 58.3 2.71 168,805 1,681 2,274 226 133
256 9.74 61.9 2.57 142,336 2,014 2,870 335 155
Human resources
Eni employees HSE staff Hours of HSE training
(2)
(number) (number) (number) (number)
75,421 2,103 479,381 74,772
70,348 2,552 1,116,895 150,116
72,258 2,618 867,215 130,513
Participations in HSE training courses (2)
(1) The economic and financial data for 2004 and 2005 was taken from financial statements drawn up according to the international financial reporting standards, homologated by the European Commission (IFRS), and cannot therefore be compared with that for 2003 (drawn up according to the Italian GAAP). (2) The figure for 2003 cannot be compared with that for later years as the surveying system was changed. (3) Data include waste produced during remediation activities.
E N I H E A LT H SA F E T Y E N V I RO N M E N T R E P O R T 2 0 0 5 / M A I N R E S U LT S
The net profit of o8.8 billion in 2005 sets a new record. The increase of o1.7 billion compared to 2004 (+24.5%) reflects the excellent performance of operations in all business areas. Daily production of hydrocarbons was 1.74 million barrels of oil equivalent, up by 7%, and proved hydrocarbon reserves at 31 December 2005 were 6.84 billion boe (55% crude and condensates). Sales of natural gas in Europe, including direct upstream sales, were 96 billion cubic meters, up by 8%. Sales of liquefied natural gas (LNG) reached 7 billion cubic meters, an increase of 17%. In 2005, HSE expenditure and investments were o1,496.7 billion, an increase of 33% compared to 2004.
In 2005, sanitary surveillance activities involved 38,000 employees. Enis health structure is based on an extensive network of 339 units located around the world. Over 1,000 health staff provide their professional services and the per capita expenditure is around o553 per employee, which is more than in previous years. Safety performances improved considerably compared to 2004. The injury frequency index of employees dropped by 29% while the severity index dropped by 9%. The performances for contractors established an all-time low. Mortality indexes were halved. Safety expenditure was o391 million, with an increase of 34% compared to the previous year.
Freshwater consumption showed a decrease of 6.4%. Due to the expansion of the business, net energy consumption slightly rose; however, the specific emission factor for CO2 per toe used (2.57 tCO2/toe) was reduced further, thanks to the fuel mix used, which was made up of 58.5% natural gas. Since January 2005, Eni has been participating in the European Emissions Trading Scheme, with 63 installations, of which 2 are abroad. At the same time, it is developing a portfolio of projects to reduce emissions, based on flexible mechanisms of the Kyoto Protocol. It is continuing with its certification program, acquiring new certifications (+17%) and with an increase in audit activities (+20%). The EMAS refinery registration plan will be completed in the course of 2006. The work force dedicated to HSE activities is growing constantly; it comprises over 2,000 units and reflects the expansion of Enis businesses and its greater commitment to HSE themes. Training activities showed a 22% decrease in hours provided, but new knowledge-sharing instruments were activated (HSE.net portal). Courses on safety issues make up 95% of HSE training.
E N I H E A LT H S A F E T Y E N V I RO N M E N T R E P O R T 2 0 0 5 / C O M P A N Y P R O F I L E
Company profile
Sectors of activity
Eni is an international energy company operating in the areas of oil and natural gas, power generation and oilfield services construction and engineering areas; in all these areas, it has a strong edge and leading international market positions. Exploration & Production Exploration and production of hydrocarbons is carried out through the E&P Division, which operates in Italy, North Africa, West Africa, the North Sea, the Gulf of Mexico, Latin America, Australia and in areas that offer considerable potential, such as the Caspian Sea and the Middle and Far East. In the Caspian Sea region, in the Kazakh offshore, the worlds most important oil discovery in the last thirty
8
years was made (the Kashagan oil field), which will produce 1.2 million barrels a day when fully operational. In Kazakhstan Eni operates also with a 32.5% share in Karachaganak, one of the largest oil and natural gas fields in the world. In Libya, Eni is the primary international operator, with around 19% of the countrys annual oil production. The onshore gas field in Wafa and offshore gas field in Bahr Essalam have recoverable reserves of around 1,750 million boe, and fully operational production will provide 10 Gm3 of natural gas, of which 8 billion will be transported to the European market through the offshore gas pipeline Greenstream. In Nigeria, Eni extracts approx 10% of the countrys crude oil. The main oil fields are located in the Niger
E N I H E A LT H SA F E T Y E N V I RO N M E N T R E P O R T 2 0 0 5 / C O M P A N Y P R O F I L E
Delta region where, in addition to oil extraction, the Bonny liquefaction plant is operational. It uses the gas associated with the oil extraction, and when fully operational will have a production capacity of 26.5 Gm3/year of LNG. In Egypt, Eni is one of the major hydrocarbons producers, with extraction of around 40% of the national crude oil. The most productive gas fields are situated in the Nile Delta region, where the Damietta LNG plant is running, with a capacity of approx 7 Gm3/year of LNG. In addition to its activity of exploring and producing hydrocarbons, the Division carries out natural gas storage activities through Stoccaggi Gas Italia SpA (Stogit). It manages eight natural gas fields located across Italy, with modulation, mining and strategic storage functions. The first is aimed at modulating daily, seasonal and peak consumption trends. Strategic storage, on the other hand, guarantees the safety of the national gas system should there be an unforeseen growth in residential demand or a reduction in supply, which could be due, for example, to the temporary suspension of an importation gas pipeline.
Daily hydrocarbon production and share outside Italy 2,000 1,500 1,000 500
thousand boe/day %
100 75 50 25
2003 Oil and condensates Natural gas Outside Italy
2004
2005
Proved reserves of hydrocarbons and reserve life index 8,000 6,000 4,000 2,000
million boe years
16 12 8 4
2003 Oil and condensates Natural gas Life index
2004
2005
Oil and condensate production by geographic area 1,111 thousand barrels/d
Proved reserves of oil and condensates by geographic area at year end 3,773 million barrels
8% 28% 28% 16% 20%
Italy North Africa West Africa North Sea Rest of world
6% 26% 25% 11% 32%
Natural gas production by geographic area 626 thousand boe/d
Proved natural gas reserves by geographic area at year end 3,064 million boe
28% 27% 5% 17% 23%
21% 35% 11% 11%
Italy North Africa West Africa North Sea
22% Rest of world
Gas & Power The G&P division is engaged in the activities of supply, transport, distribution and sale of natural gas, and is also active in the power generation and marketing sector. In addition to Italy, the Division is also present in Europe, Australia, South America, North and West Africa and in the LNG markets in the Far East. Supply of natural gas is guaranteed through gas pipelines from Algeria, Russia, the Netherlands, Norway and Libya, as well as from the E&P Division. Gas is also
Sales and own consumption of natural gas 91.15 billion cubic meters
imported by sea, using four liquefied natural gas tanker ships owned by the subsidiary LNG Shipping. The transport of natural gas in Italy is carried out by Snam Rete Gas through its network of gas pipelines, which is over 30,000-km long, and accounts for practically the entire national network. Outside Italy, Eni owns transportation rights across an extensive network of gas pipelines. Italgas manages the distribution of natural gas to residential consumers. It is the largest company in its sector and is 100% controlled by Eni. Following the partial splitting of Italgas, and with effect from 1 January 2005, Eni was also assigned the shares that Italgas owned in foreign gas distribution companies operating in Hungary, Slovenia and Argentina. The Divisions commercial activity is aimed both at traditional business customers (companies and wholesalers) and to the residential customers which were previously handled by Italgas Pi, which was absorbed by Eni on 1 January 2005. In 2002 Italgas Pi certified its Quality Management System according to the ISO 9001 standard. Power generation and marketing are managed by the subsidiary EniPower, through 7 power stations situated in Ferrera Erbognone, Mantua, Ferrara, Ravenna, Livorno, Brindisi and Taranto. Plans to expand power generation capacity expect to reach an installed capacity of 5.5 gigawatt by 2009, with the construction of new combined cycle plants using natural gas, which have low environmental impact and are more efficient than traditional plants running on fuel oil.
58% 6% 34% 2%
Italy Own consumption Rest of Europe Outside Europe
Supply of natural gas by geographic area 82.56 billion cubic meters
13% 28% 25% 16% 10% 7%
Italy Russia Algeria Other Netherlands Norway
The gas system SUPPLY INFRASTRUCTURE SALES
DISTRIBUTION SYSTEM
GAS PRODUCTION STORAGE
POWER STATIONS INDUSTRIAL CUSTOMERS RESIDENTIAL AND COMMERCIAL CUSTOMERS
TRANSPORT
GAS IMPORTS
SHIPPER
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Refining & Marketing Through its R&M Division, Eni is engaged in the oil refining and refined products marketing. In order to guarantee full availability of crude oils to its own refining system, it carries out trading activity on the oil market. The supply of crude oil is carried out through an efficient system of oil pipelines owned by third parties, as well as sea transport. Through this integrated system of refining, logistics and distribution, Eni is able to meet the markets needs with products that are also innovative from an environmental point of view. The refining system in Italy consists of five wholly-owned refineries (Sannazzaro, Livorno, Porto Marghera, Taranto and Gela) and a 50% interest in the Milazzo refinery; outside Italy, Eni holds interests in the German refineries at Bayernoil and Schwedt, and in the company Ceska Rafinerska, which owns and manages two refineries in the Czech Republic. The efficient supply of the system is guaranteed by logistics activity, in which Eni is the Italian leader in the storage and transportation of refined products. As for fuel distribution, Eni operates in Italy and abroad through the Agip brand distribution network, which has 4,349 service stations in Italy and 1,933 in the rest of Europe. The network has achieved high standards of quality; this is partly due to the recent upgrading process, which means it can now offer clients a wide range of refined products and other products (bar, catering). In recent years, the company has gained distinction for the eco-compatibility of the fuels that it offers. Indeed, the technological level of its refineries has allowed the production of high quality fuels with low environmental impact, such as BluDiesel and BluSuper, ahead of the EU environmental regulations that are to come into force in 2009.
Refinery intake and balanced capacity utilization in wholly-owned refineries in Italy 600 450 300 150
thousand barrels/day %
120 90 60 30
2003
2004
2005
Refinery intake in wholly-owned refineries Balanced capacity utilization rate
Agip branded service stations and average throughput 5,000 units 4,000 3,000 2,000 1,000
thousand liters
3,000 2,400 1,800 1,200 600
2003 Service stations Average throughput
2004
2005
Petrochemicals In the Petrochemicals sector, Eni controls Polimeri Europa which has been managing activities in the business areas of Styrenes and Elastomers, Polyethylene and Basic Chemicals since 2002. The company operates through 18 production sites, of which 11 are in Italy and 7 in the rest of Europe (Great Britain, Belgium, France, Germany, Portugal and Hungary), 5 research centers and a sales network active in 35 countries. The company operates on the market with a high quality product portfolio which respects the environment and the community, through personalized customer service.
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Oilfield Services Construction and Engineering Eni is engaged in the engineering and construction sector through Saipem and Snamprogetti. Saipem now has a leading position in the sectors of construction and drilling and in supplying engineering services, project management, procurement and construction for the development of hydrocarbon fields. The company operates in strategic areas such as West Africa, Russia and former Soviet Union countries, Central Asia, North Africa, the Middle East and South East Asia. Its operational activities are mainly focused on construction and drilling onshore as well as offshore; it has one of the most advanced and efficient offshore fleets in the industry from a technological point of view. Snamprogetti is one of the leading international companies in the field of engineering and contracting. It operates on the international market as main contractor for planning and installing large facilities in the sectors of hydrocarbon production and treatment, exploitation of natural gas (liquefaction and conversion), conversion and use of the full barrel from conventional and unconventional sources, petrochemicals and chemicals, pipeline transmission systems, power generation, environmental activities and infrastructures.
Corporate and Other activities Eni is also engaged in other industrial sectors, through its control of a number of companies. In particular, this Report consolidates data for the activities of Ambiente, EniTecnologie, Sieco, Syndial, Tecnomare, Eni Corporate and financial companies. In November 2005, the company Ambiente merged with Syndial, completing the concentration of environmental rehabilitation and waste management activities. EniTecnologie is a center of excellence for industrial research. The company operates across the entire cycle of oil and gas and on renewable sources, developing technological innovation in the areas of oil and gas upstream, conversion of natural gas and heavy residues, downstream gas, petrochemicals and refining processes, development of refined products, renewable sources. Sieco is a Facility Management company that provides support to companies within the Eni Group, offering services for anything concerning real estate, personnel and businesses. It also provides services in the fields of electricity cogeneration, sanitary surveillance, global security, archive and warehouse management, inter-corporate links and other services. Syndial is engaged in the challenging field of environmental rehabilitation for areas polluted by previous industrial activities, with the aim of making them available for new industrial initiatives. The company operates across Italy in 6 active sites, 20 abandoned sites formerly involved in chemicals production and 7 abandoned sites which were formerly for mining activity. Tecnomare is a company specialized in providing a full array of offshore engineering services to oil companies, supporting them in the development of their core business. In particular, its activities include engineering for oil development projects and operating and maintenance system engineering, developing robotics systems and technologies for hostile environments, and integrated health, safety, environment and quality management services. This Report accounts also for the HSE performances of Eni Corporate and its controlled financial companies. In Italy, these companies are Enifin, which carries out financial activities on behalf of Eni companies; Sofid, which has the role of financial intermediary and is responsible for managing payment systems for the Eni Group; Padana Assicurazioni, a company authorized by ISVAP to provide insurance and reinsurance; and the financial intermediation company Sofid Sim; outside Italy, Eni also controls Eni International and Eni Coordination Center.
Oilfield Services and Construction: order backlog at period end 5,513 million euro
56% Offshore construction 10% Onshore construction 11% Leased FPSO 7% 5% 8% 3% Offshore drilling Onshore drilling LNG Maintenance
Engineering: order backlog at period end 4,451 million euro
46% Oil & Gas 7% 5% 3% Refining Field upstream facilities and pipeline Energy, environment and other 21% Chemical complexes 18% Infrastructure
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Financial and operating performance

In 2005, Eni had consolidated revenues of o73.7 billion, a net profit of o8.8 billion and a return on capital employed of 19.5% (16.6% in 2004). Debt to equity ratio dropped to 0.27 (0.29 in 2004). The strengthening of profits and the sound balance sheet structure meant the company was able to distribute to shareholders a cash dividend of o1.10 per share for 2005, a 22% increase on 2004. Total shareholder return thus rose to 35.3%, compared to 28.5% in 2004. Pay-out stands at 47%. Capital expenditure made in 2005 amounts to o7,414 million, of which 91% was in the Exploration & Production, Gas & Power and Refining & Marketing sectors.
The net profit of o8.8 billion achieved in 2005 is a new record
Revenues for the Exploration & Production sector (o22,477 million) rose by o7,131 million compared to 2004, which is a 46% increase. Operating profit (o12,574 million) grew by 54%. These positive results are attributable to the trend of the price of the barrel in USD and to the growth of marketed production of hydrocarbons. Daily equity production of hydrocarbons reached 1,737 kboe, in line with the annual increase target of 4% per year, which will allow a production rate of 2 Mboe/day to be reached by 2009. Production rose by 113 kboe, equal to 7%. The increase in production was made possible by new oilfields in Libya, Angola, Iran, Algeria and Kazakhstan. Proved hydrocarbon reserves reached 6,837 million boe, with a reserve life index of 10.8 years; meanwhile, the mining portfolio consists of 1,041 exclusive or shared rights for exploration and development of fields in 34 countries. During the course of 2005, new fields were discovered offshore in the Gulf of Mexico and the China Sea. The development of the South Pars gas field in the Iranian waters of the
Persian Gulf was successfully completed, as was that of the K2 oilfield in the Gulf of Mexico. The Darquain oilfield in Iran was inaugurated; production began in the Kissanje and Dikanza oilfields in offshore Angola. Exploration licenses were acquired in India, Alaska and Libya and agreements were reached for constructing an oil pipeline that is to link the Black Sea with the Mediterranean. Capital expenditure totals o4,964 million and mainly concerns development investments, particularly in Kazakhstan, Libya, Angola and Egypt. As for investments in exploration research (o656 million), the activities mainly concerned Norway, Egypt, Gulf of Mexico, Brazil and Indonesia.
Main operating data Exploration & Production Proved reserves of hydrocarbons at period end Reserve life index Daily hydrocarbon production 2003 7,272 12.7 1,562 2004 7,218 12.1 1,624 2005 6,837 10.8 1,737
(Mboe) (years) (kboe)
13
Revenues in the Gas & Power sector amount to o22,969 million, with an increase of o5,667 million on the previous year, equivalent to 33%. Operating profit reached o3,321 million. These positive performances are also due to the growth in volumes marketed and distributed and the increase in the result of transport activity in Italy and abroad. Marketed volumes of natural gas rose by 9% compared to 2004 (91.15 Gm3), particularly in Spain, France, Turkey and Germany. The target for 2009 is to reach 50 Gm3 of gas marketed abroad. In Italy, sales of natural gas rose as an effect of the growth in national demand, and gas being more widely used in power generation in EniPower power stations. In 2005 an agreement was entered into with Sonatrach for the expansion of the Trans Tunisian Pipeline Co (TTPC) gas pipeline, which transports natural gas from Algeria to Sicily. The agreement will make it possible to increase the pipelines carrying capacity by 3.2 Gm3 from 1 April 2008, and by another 3.3 Gm3 from 1 October 2008. The Trans Austria Gasleitung (TAG) pipeline, which transports Russian gas to Italy, will also be expanded. From 1 October 2008, the increase will be at least 3.2 Gm3 per year. Cameron terminal in the USA, of which Eni owns a 40% share, will have its regasifying capacity increased.
As for electricity production sold, there was a 64% increase on 2004, reaching the level of 22.77 TWh. This increase is due to around 1.2 gigawatt of generation capacity becoming operational in the new groups at the power stations in Mantua and Brindisi, and the groups already installed in Ravenna and Ferrera Erbognone. Installed capacity as of 2005 is 4.5 gigawatt. Capital expenditure in 2005 for the Gas & Power sector totaled o1,152 million and concerned in particular the development of the transmission and distribution network for natural gas in Italy and the continuation of the construction program for combined cycle power stations.
Main operating data Gas & Power Sales of natural gas to third parties Own consumption of natural gas Sales of natural gas of affiliates and relevant companies (Enis share) Total sales and own consumption of natural gas Natural gas transported on behalf of third parties in Italy Electricity production sold 2003 69.49 1.90 71.39 6.94 78.33 24.63 5.55 2004 72.79 3.70 76.49 7.32 83.81 28.26 13.85 2005 77.08 5.54 82.62 8.53 91.15 30.22 22.77
(Gm3) (Gm3)
(Gm3) (Gm3) (Gm3) (TWh)
14
Revenues for the Refining & Marketing sector (o33,732 million) rose by 29% compared to 2004. Operating profit totaled o1,857 million, with an increase of o777 million on 2004 (72%). These positive results are due to the increase in the refining margin and the increase in refining and commercial activity in Italy and the rest of Europe. Refining throughputs on own account rose by around 3% (36.7 Mt in 2005), due to increased processing in the Taranto and Livorno refineries. The utilization of balanced capacity in own refineries was 100%. Sales of refined products in Italy and abroad dropped slightly compared to 2004 (51.63 Mt). This decrease can be attributed to the drop in national consumption; however, the effect of this was in any case compensated for by the increased efficiency of the distribution network. In the rest of Europe, however, the trend of growing volumes continued, thanks to acquisitions in Germany, Spain and the Czech Republic. The IP brand fuel distribution network was sold during 2005. Capital expenditure in the Refining & Marketing sector (o656 million) was mainly focused on improving the refining capacity, strengthening the refined products distribution network and building new service stations in Italy.
In the Petrochemicals sector, revenues totaled o6,255 million, up by o924 million on 2004 (equal to 17%). Operating profit was o202 million. This improvement in financial results was essentially due to the increase in product margins and the improvement of industrial performance. Product sales rose by 4% (5,376 thousand tonnes) thanks to increased sales in the intermediate, aromatic and olefine businesses. Chemical production slightly increased from 2004 (7,282 thousand tonnes), despite some plant shutdowns and the negative trend of demand. Capital expenditure totaled o112 million and was concentrated particularly on maintenance and improvement of the efficiency of plants interventions, environmental protection and compliance with health and safety legislation.
Main operating data Refining & Marketing Refined products available from processing (Mt) Standard capacity of wholly-owned refineries at period end (kbbl/d) Utilization rate of standard capacity of wholly-owned refineries (%) Sales of refined products (Mt) Service stations at period end (in Italy and outside Italy) (number) Average throughput Italy (Agip brand) + abroad (kl/y) 2003 33.52 504 100 50.43 10,647 2,109 2004 35.75 504 100 53.54 9,140 2,488 2005 36.68 524 100 51.63 6,282 2,479
15
Revenues for the Oilfield Services Construction and Engineering sector totaled o5,733 million (+1%). Operating profit was o307 million, with a 51% increase on 2004. This positive performance is due to new foreign contracts being initiated. The order backlog at end of 2005 was o9,964 million. During the year, Snamprogetti was awarded contract for building the treatment plant for liquids from natural gas (LNG) in the industrial complex at Ruwais in the United Arab Emirates and the contract for a joint venture with the Canadian company SNC-Lavalin, to build three plants for the hydrotreatment and conversion of heavy crudes in Canada.
Saipem won contracts for construction and drilling activities in various countries, including Kazakhstan, Saudi Arabia, Nigeria and Angola. The contracts are for Onshore and Offshore Construction and Drilling. Capital expenditure (o349 million) mainly concerned the Construction and Drilling activities, in particular for the maintenance and upgrade of equipment and for improving operational structures in Kazakhstan and West Africa.
Main operating data Petrochemicals Production Sales Oilfield Services Construction and Engineering Orders acquired Order backlog at period end 2003 6,907 5,266 2003 5,876 9,405 2004 7,118 5,187 2004 5,784 8,521 2005 7,282 5,376 2005 8,188 9,964
(kt) (kt)
(Mo) (Mo)
16
The economic dimension of HSE

In 2005, HSE expenditure and investments totaled o1,496.7 million, an increase of 33.1% on the previous year. The largest item was current expenditure (59.8% of overall expenditure), which totaled o895.7 million in 2005. Over two thirds of total HSE expenditure (71.2%), o1,065.6 million, was spent on environmental protection projects (prevention and mitigation of pollution risks and environmental restoration), while the percentages for safety and for health of employees were 26.1% and 2.7% respectively. Through its operational divisions and subsidiaries, Eni is engaged in businesses that differ in terms of type and complexity. The differences in the environmental impacts deriving from industrial activities and the potential risks for the health and safety of employees thus determine variations in HSE expenditure. Three quarters of HSE expenditure are concentrated in the sectors of exploration and production (29% of Enis total), refining and marketing (24.1%) and the Other activities sector (23.6%), which includes Syndials activity of environmental qualification of abandoned sites. In addition to investments and current expenditure, each year Eni allocates a part of its financial resources to the site restoration and abandonment reserve and the environmental risks reserve. These two items account for 62% of the provisions for risks and charges (o7,679 million). The site restoration and abandonment reserve, which totaled o2,648 million (o1,967 million in 2004) and is an allocation which embraces the costs estimated to be incurred at the end of hydrocarbon production activities for shutoff of wells, removal of structures and restoration of sites. The environmental risk reserve, at o2,103 million (o1,649 million in 2004), mainly covers estimated costs relating to environmental actions that are required by legislation and regulations.
HSE expenditure by sector of activity
29.0% Exploration & Production 8.1% Gas & Power 24.1% Refining & Marketing 11.1% Petrochemicals 4.1% Oilfield Services Construction and Engineering 23.6% Other activities
Eni - HSE expenditure and investments 1,600 1,200 800 400

million euro
2003 Investments Current expenditure
2004
2005
Eni - HSE expenditure breakdown 1,600 1,200 800 400

million euro
2003 Health Safety
2004
2005 Environment
Selected economic and financial indicators 2005 Net sales from operations (1) 22,477 22,969 33,732 6,255 5,733 Operating profit 12,574 3,321 1,857 202 307 Capital expenditure 4,964 1,152 656 112 349
(million euro)
Exploration & Production Gas & Power Refining & Marketing Petrochemicals Oilfield Services Construction and Engineering
(1) Before elimination of intersegment sales.
HSE investments and expenditure 435 121 360 165 62
17
In the E&P sector, from 2004 onwards only the HSE expenditures of the associated companies in which Eni acts as operator are taken into account, independently of the equity held. For this reason, the 2004 and 2005 figures cannot be compared with those of 2003, when expenditure was still calculated according to the equity owned in the joint venture. In 2005, HSE expenditure for the E&P Division totaled o434.8 million, with an increase of 65.2% on the previous year. 65% was spent on investments (o283.3 million), while current expenditure totaled o151.5 million. The increase is due essentially to a strong increase in investments made by the associated company Agip KCO, in particular for safety expenditure for equipment and tools and environmental expenditure for building new plants.
In 2005, HSE expenditure for the G&P Division totaled o121.3 million, an 21.1% increase on the previous year. Current expenditure, equal to o38.1 million, made up 31.5% of the Divisions total HSE expenditure. Investments totaled o83.1 million (a 28.9% increase on 2004) and were mainly due to landscape protection activities and environmental restoration following the laying and maintenance of gas pipelines. The G&P sector has low HSE expenditure, due to the intrinsic clean quality of natural gas.
E&P - HSE expenditure and investments 500 400 300 200 100
million euro
G&P - HSE Expenditure and investments 500 400 300 200 100
million euro
2004
2005 Investments
2003 Current expenditure
2004
2005
E&P - Hydrocarbon production and HSE expenditure (1) 120,000 ktoe 90,000 60,000 30,000
million euro
G&P - Sales of natural gas to third parties and own consumption and HSE expenditure 500 375 250 125 100 75 50 25
billion m3 million euro
140 105 70 35
2003 2004 Hydrocarbon production HSE expenditure

(1) Considers 100% of net production from operated activity.
2005
2003 2004 2005 Sales of natural gas to third parties and own consumption HSE expenditure
Health Safety Environment investments and expenditure 2005 Health 13.77 3.48 3.24 5.96 8.63 4.91 39.99 Safety 189.00 20.13 63.80 61.65 36.18 20.33 391.09 Environment 231.99 97.66 293.04 97.89 16.93 328.09 1,065.60
(million euro)
Exploration & Production Gas & Power Refining & Marketing Petrochemicals Oilfield Services Construction and Engineering Other activities Eni total
Total 434.76 121.27 360.08 165.50 61.74 353.33 1,496.68
18
In the R&M sector, HSE expenditure for 2005 reached o360.1 million, a 19.0% increase on the previous year. Current expenditure totaled o200.2 million (o150.1 million in 2004), while investments were o159.9 million, compared to o152.4 million of the previous year. Above all, environmental expenditure rose following the start-up of major projects to protect soils and groundwater, for energy recovery, for recycling industrial water and for wastewater compliance with legislative requirements.
R&M - HSE expenditure and investments 500 400 300 200 100
million euro
2004
2005
R&M - Sales of refined products and HSE expenditure 60 45 30 15

million tonnes million euro
400 300 200 100
2003 2004 Sales of refined products HSE expenditure Health Safety Environment investments and expenditure/Operating data Exploration & Production HSE expenditure/Hydrocarbon production (1) Gas & Power HSE expenditure/Sales of natural gas to third parties and own consumption Refining & Marketing HSE expenditure/Sales of refined products Petrochemicals HSE expenditure/Production Oilfield Services Construction and Engineering HSE expenditure*100/Order backlog at period end
(1) Considers 100% of net production from operated activity.
2005
2003
2004
2005
(o/toe) (o/103 m3) (o/t) (o/t) (%)
1.83 1.10 4.28 24.65 0.41
1.73 1.31 5.65 22.50 0.44
2.51 1.47 6.97 22.73 0.62
19
E N I H E A LT H S A F E T Y E N V I RO N M E N T R E P O R T 2 0 0 5 / H S E G OV E R N A N C E
HSE governance Titolo 1 livello
Model of environmental sustainability

An approach to sustainability based on all possible instruments to address this issue as disciplined management systems, strategically focused projects, research and innovation, dialogue with stakeholders is the path to follow if a leading role is to be played in the energy industry. To achieve such a complex and dynamic balance, Eni conforms to the following guidelines: encouraging corporate growth strictly in compliance with the Code of Conduct and the rules of governance; protecting environmental receptors air, water, soil from potentially irreversible impacts beyond their carrying capacity; precautionary principle; intergenerational equity; rational use of non-renewable resources; accounting to and communication with stakeholders on environmental performances. Eni is committed to providing its stakeholders with an integrated vision of its industrial project, whichever may be the areas of special interest. Communication and dialogue are the basis for progress toward sustainability. Through a careful assessment of HSE problems, Eni has been able to pinpoint and analyze on an ongoing basis the sustainability agenda pertaining to the sectors within which it operates.
The challenge of sustainability is represented by the balance between interdependent social, environmental and economic needs
20
E N I H E A LT H SA F E T Y E N V I RO N M E N T R E P O R T 2 0 0 5 / H S E G OV E R N A N C E
HSE Policies
When carrying out its activities, the aim of Eni SpA and its controlled companies1 is to guarantee the health and safety of its employees, local communities, contractors and customers, to protect the environment and ensure public safety on the basis of the following principles: industrial and commercial activities must be managed in strict compliance with regulations and operating procedures established for the sectors of activity; the adoption of principles, standards and solutions that constitute international best practices in business for the protection of health, safety, the environment and public safety; to this end the companies must implement systematic benchmarking processes; operational management must be based on state-of-the-art criteria in terms of environmental protection and energy efficiency and the objective must be pursued of improving health and safety conditions according to practices and procedures which are also agreed with trade unions; operational management must be subject to constant auditing in all sectors; research and technological innovation must aim at promoting products and processes which are increasingly compatible with the environment and whose content reflects the constant attention paid to the health and safety of customers and employees; personnel training and the exchange of experience and information must be considered fundamental tools in order to achieve HSE objectives, with a view to the continuous improvement of prevention and protection standards; employees, when carrying out their duties, must be actively involved in the process of HSE safeguards; this, in the interests of their colleagues and the public at large, as well as in their own interests; employees and trade unions, authorities and the general public must be informed periodically about the results achieved in terms of environmental protection, health and safety; an active part must be played in scientific-technical circles and business associations to promote scientific and technological developments aimed at protecting the environment and safeguarding resources; when requested, cooperation must be ensured with competent authorities regarding the preparation of technical regulations and guidelines concerning HSE issues; the foregoing principles must be reviewed constantly and their application monitored periodically.
Besides considering the protection of health, safety and the environment as a priority corporate objective, the companies are actively engaged in contributing, with their respective technological know-how and professional skills, to the well-being and improvement of the quality of life of the communities in which they operate. 15 November 19992
(1) Controlled companies include the Exploration & Production, Gas & Power and Refining & Marketing Divisions that are considered in the same way as the companies. (2) Taken from the Group Guidelines for the protection of health, safety and the environment and public safety, circular No. 98 dated 15 November 1999, signed by the Managing Director.
21
Commitments, Achievements and Goals

COMMITMENTS
Preventing health risks in the workplace and in the
surrounding areas
Health
Contributing to the fight against endemic and epidemic diseases entailing serious social consequences Drawing up schemes for the management of health emergencies Preventing workplace injuries
Safety
Maintaining standards of excellence in the safety management
Preventing oil spills in transport and distribution
Strengthening the environmental management system
Environment
Mitigating atmospheric greenhouse gas emissions by means of the Flexible Mechanism of the Kyoto Protocol
Limiting the environmental footprint of activities while safeguarding biodiversity
Developing fuels with a low environmental impact
22
ACHIEVEMENTS
Information system for the management of occupational health and industrial hygiene (pages 37-39-40) Employees sensibilization on sexually transmitted diseases (page 41) Intervention procedures for health emergencies (AIDS, TB, Ebola) (page 42) Launch of international partnerships for the fight against endemic and epidemic diseases in E&P sector (page 41) Decrease, compared to 2001, in Enis injury frequency index of 51% and in the severity index of 35% (pages 46-47) Decrease in the injury indexes in E&P Division (page 48)
GOALS
Completion of the information system (Health Card, E-learning, telemedicine for remote occupational health services) Further provision of health services to local communities
Further improvement of injury indexes and maintenance of the zero injury trend in plants and refineries
Extension of the zero injury trend in some plants and refineries of R&M Division (page 50) Emergency response plans (pages 45-50) Tightening procedures for the selection of tankers (pages 46-86) HSE training plan differentiated according to standard profiles and as function of specific goals (page 31) Increase in auditing of 20% and, compared with 2004, in the following certifications: ISO 14001 by 11%, EMAS by 25% and OHSAS by 14% (page 27) Adoption of HSEQR integrated management systems and environmental management systems compliance with the ISO 14001 standard for the foreign E&P affiliated companies (pages 24-26) Implementation of the methodology of the Project HSE Review for the main E&P projects (page 24) New HSE Management System in R&M to be implemented in Italy and abroad (page 25) Completion of the ISO 14001 certification for the whole refining and logistics departments of R&M (page 27) Adoption of Eni GHG Protocol and implementation of the database for the mapping of site emission sources (page 77) Participation of Eni in the Emission Trading (pages 71-74-75-77) Carrying out of the CDM Kwale-Okpai project (pages 3-72-73-77) Reduction of energy consumption and atmospheric emissions in the G&P Division (page 57) Adoption of advanced technologies to limit the soil and subsoil impacts of pipe-laying (pages 64-65-66-82) Characterization of biodiversity through biological markers (pages 79-80-81) Continuing implementation of double seals for all hydrocarbon tanks in refineries and depots (page 69) Marketing of eco-friendly fuels (pages 11-78-88-89)
Improvement of safety indexes of contracting Companies
Further reduction of oil spills
Implementation of an integrated HSE IT system applicable to the entire Group
Completion of the ISO 14001 certification in the main sites and extension of the EMAS certification in the Groups refineries
Development of the portfolio of projects aiming at reducing CO2 emissions in installations subject to Emission Trading Development of the portfolio of the CDM and JI projects Extension of the use of biomarkers for the ecotoxicological monitoring of the main hydrocarbons exploration and production sites Completion of the interventions on tanks
Further development of eco-friendly fuels (biofuel)
23
HSE Governance and Management System

Within Eni Corporate, the Health, Safety and Environment Department directly reports to the Managing Director and is responsible for promoting the constant enhancement of HSE performances and for encouraging an integrated approach to environmental sustainability topics. Since its establishment in 2002, the HSE Department has been contributing to rationalizing, through a set of objectives and through coordination, the HSE activities carried out in all operational units. Based on the Eni guidelines, the Divisions and Companies identify the specific HSE policies, commitments and objectives while the business units sistematically inform their employees of Enis HSE principles. Employees and contractors, on their part, are bound to guarantee the safety of operations, the respect for the environment and the quality of final products. Model of HSE Management System In 2003 Eni drew up the Model of Management System (MMS) to safeguard health, safety, the environment and the well-being of the public at large. The model is an operational instrument which supports the continuous improvement of HSE performances and is based on an annual cycle organized into planning and defining targets, implementing the relevant operational plans, verifying the results through constant monitoring, auditing and periodic prearranged reporting and identifying corrective actions. The cycle of constant improvement ends with the review and definition of new objectives. With the MMS, Eni has made a reference available for the HSE management systems of the Divisions and Companies, which identifies principles and criteria to which they must conform. These systems are autonomous but are linked to Eni via a predetermined information flow that allows monitoring of HSE performance and the achievement of objectives. An HSE Integrated Management System has been in existence for a long time in the E&P Division enabling to put into effect the policies in force. In 2004 it enacted the directive Organization of the HSE and Public Safety Integrated Management System which outlines and updates the requirements for the development of the HSE Integrated Management System in Italy and abroad in accordance with Enis MMS. The document also provides an update of the HSE policy complied with by the Division. The program is underway in the foreign affiliated companies for the implementation of the HSEQR (HSE, Quality and Radioprotection) management systems. The E&P Division has adopted the methodology of the Project HSE Review for 74 out of 84 main projects in its own sector. Adoption of the Model of Management System is underway in the G&P Division, for all business areas in order to align, coordinate and aim towards the principles of sustainability in all operating sectors.
HSE Department organizational chart

MANAGING DIRECTOR
HSE DEPARTMENT
HEALTH
SAFETY
ENVIRONMENT
HSE SERVICES
GENERAL MANAGEMENT E&P DIVISION
GENERAL MANAGEMENT G&P DIVISION
GENERAL MANAGEMENT R&M DIVISION
DIVISIONS HSE DEPARTMENT
SITES/SUBSIDIARYS HSE OFFICE
24
In 2005 the R&M Division defined the new HSE Management System in line with Enis MMS and with the new divisional HSE Policy updated in 2004. As proved by such initiatives, the attention to HSE topics is an enduring element in the Divisions activities, which finds expression through the definition of: the excellence of conduct in view of the continuous improvement of HSE-related matters; the cooperation among human resources and the prompting of employees and contractors active participation; the responsible and sustainable development of its own activities; the attention to both internal and external customers; the central role of people and the knowledge and experience sharing.
Monitoring and Reporting Within the MMS the monitoring and reporting system of HSE performances is a key instrument in the control of Enis HSE Management and in the evaluation of the performances in relation to the objectives to be achieved. Over the years the quality and reliability of data collected have considerably improved thanks to the continuous update of accounting methods, in accordance with the current best practices and the internationally recognized reporting standards. The accounting system is based on the Manual of HSE Data Reporting which each Division and Company must conform to, while maintaining specific data collection systems. Ad hoc instruments have been upgraded for areas of particular interest (health, accidents and injuries, atmospheric emissions, etc.) which permit to have a more frequent monitoring.
Model of Management System - Structure and implementation
MANAGEMENT CONTROLS
STRATEGIC POLICIES AND OBJECTIVES CERTIFICATIONS OF MANAGEMENT SYSTEMS HSE 4-YEAR AND ANNUAL PROGRAMS ORGANIZATION AND RESPONSIBILITIES STAFF TRAINING AND PARTICIPATION PROCEDURES AND DOCUMENTATION
PRIMARY ACTIVITIES
HEALTH, SAFETY AND ENVIRONMENTAL MANAGEMENT HSE RESEARCH & DEVELOPMENT PLANNING AND MANAGEMENT OF CHANGES HSE KNOWLEDGE SHARING RELATIONSHIPS WITH SUPPLIERS AND CONTRACTORS RELATIONSHIPS WITH CUSTOMERS AND COMMUNITIES AND INFORMATION EMERGENCY MANAGEMENT
ASSET MANAGEMENT
MONITORING AND REVIEWING
MONITORING REPORTING SYSTEM AUDIT, HSE SYSTEM VERIFICATIONS AND CONTROL OF HSE CONFORMITY MANAGEMENT REVIEW
25
Certifications
The certifications of management systems and operational units according to the most advanced international standards have continued. In fact, by the end of 2005, a total of 155 certifications were obtained against 133 in 2004. The certifications according to the ISO 14001 standard represent the majority, i.e. 82 of which 17 for management systems and 65 for individual sites. The EMAS registrations are 5, the OHSAS certifications 8 and the other certifications 60, mainly constituted by attestations of quality management systems (ISO 9001) and safety management systems (ISM - International Safety Management) for the ships of the G&P Division and of Saipem. In the E&P Division the certification program of activities abroad according to the ISO 14001 standard carries on: at the end of 2005, the management systems of Unit Geografica Italia and of many foreign subsidiaries such as those in Congo, Ecuador, Egypt, Indonesia, Kazakhstan and Pakistan were certified. In 2005 also continued the certifications of management and quality systems within the operational units and the G&P Division. In the gas transportation sector, the environmental management systems of gas compression plants and of the regasification plant of LNG (Liquefied Natural Gas) are ISO 14001 certified. In the course of the year the implementation of an environmental management system certifiable to ISO 14001 standards for the entire network of gas pipelines also continued. As for gas distribution, in 2004 Italgas obtained a three-year extension of the Certificate of Conformity of the Quality, Environmental and Safety Integrated Management System. The four LNGs tankers for gas transportation are all SMS (Safety Management System) certified in compliance with the ISM code, issued by the International Maritime Organization (IMO).
SERGAZ
The trans -Tunisian pipeline service company Sergaz (Socit de service du gazoduc transtunisien), established by virtue of the agreement between the Tunisian government and Eni, is involved in the operation and maintenance of the Tunisian section of the Transmed gas pipeline. Transmed, constructed between 1977 and 1983, links Algeria to Italy across Tunisia and includes an underwater section in which pipelines can reach a depth
of 640 meters. Doubled in size between 1991 and 1994, the gas pipeline is altogether 2,580-km long and comprises eleven gas compression and gas pump plants. The 370-km long Tunisian section consists of two 48-inch diameter pipes and is supported by the compression plants of Feriana, situated along the Algerian border, of Sbikha and of El Haouaria in Cap Bon, the latter being also equipped with a dispatch center and a
telecommunication system. The gas exiting from the El Haouaria plant, situated by the sea and covering a 37-hectare area, reaches the entry terminal of the Transmediterranean Pipeline Company (TMPC), where it is redistributed through five undersea pipelines (three 20-inch diameter and two 26-inch diameter pipes), which link El Haouaria to Sicily. In 1986 TMPC charged Sergaz with the operation and maintenance management of
26
In the electricity sector the commitment to reach an integrated management system for industrial and commercial activities has continued. The EniPower plants in Brindisi, Livorno, Mantua, Ravenna and Taranto have been ISO 14001 certified; the EMAS certification for the plants in Ferrera Erbognone, Mantua and Ravenna is also underway and scheduled to be completed in 2006. In 2005 the R&M Division proceeded to progressively extend the certification of management systems to all corporate activities and, in this respect, it is worth noting the EMAS certification acquired, in 2005, by the refinery in Taranto, which followed those obtained by the refineries in Livorno and Venice. The procedures have kicked off for the EMAS certification of the refinery in Sannazzaro de Burgondi and the one in Gela, which will be completed in 2006. By the end of 2005 all the refining and logistic activities were provided with an ISO 14001 certified
environmental management system. The certification program currently envisages the adoption of an environmental management system in commercial areas. In 2005 a first set of fuel distribution plants, situated in the commercial areas of Milan and Padua (Italy), were ISO 14001 certified.
Eni - 2003 to 2005 certification trend 180 135 90 45

number
2003 Others OHSAS
2004
2005 EMAS ISO 14001
Certifications at the end of 2005 ISO 14001 13 8 39 12 5 5 82 EMAS 3 2 5 OHSAS 2 1 3 2 8 Others 6 2 43 9 60 Total 15 15 42 19 50 14 155
Exploration & Production Gas & Power Refining & Marketing Petrochemicals Oilfield Services Construction and Engineering Other activities Total
the terminal and of all onshore plants and with detecting the tracing of undersea pipe-laying. In the terminal it is possible to measure the quantity of gas transported and to insert pigs for the cleaning and the inspection of the pipes.
Since 1996 the organization of Sergaz, committed to the technical inspection and use of the plants, has been expanding its operations to include a department responsible for tackling the most important environmental, health and safety issues.
During 2005 the preliminary activities were accomplished for the implementation of a health, safety, environmental and quality integrated management system in conformity with the law in force in Tunisia, the leading international standards and Enis guidelines.
The inspection carried out in the Cap Bon plant has allowed to tangibly evaluate Enis commitment to equip all its foreign operational units with HSE organizational structures aligned, in the fulfillment of their tasks and responsibilities, to the analogous assignments carried out in Italy. The HSE organization within the Technical Department of Sergaz has demonstrated, through its initiatives and programs, to be able to pragmatically contribute to the attainment of Enis objectives and targets while fully applying Enis HSE policy to situations and realities differing from those regulated by the Italian law. URS Italia SpA
27
System and technical audits

2005 Auditing by sector of activity
24.0% Exploration & Production 6.4% Gas & Power 2.3% Refining & Marketing 0.3% Petrochemicals 63.5% Oilfield Services Construction and Engineering 3.5% Other activities
System audit program has continued, which is intended to evaluate the existence, completeness and functionality of the HSE management systems adopted by the business units. In this view Eni has drawn up a detailed evaluation protocol named Enis HSE Evaluation System, enabling to assess the management systems adopted by Enis Divisions and Companies with respect to the Model of HSE Management System. System audits spam over a three-year cycle and are based on criteria of relevance and rotation of the audited units. To date Eni has carried out six system audits, four of which were finalized in 2005 and intends to carry out four more during 2006 thus completing the first cycle. A training program has been organized for
Eni - 2003-2005 audit trend 5,000 3,750 2,500 1,250

number
E&P - 2003-2005 audit trend 1,200 900 600 300

number
2003 Integrated HSEQ Integrated HSE Quality
2004
2005 Environment Safety Health
2004
R&M - 2003-2005 audit trend 180 135 90 45

number
G&P - 2003-2005 audit trend 280 210 140 70

number
2004
2004
Total audits in 2005 Health Exploration & Production Gas & Power Refining & Marketing Petrochemicals Oilfield Services Construction and Engineering Other activities Total 47 1 49 4 101 Safety Environment 741 8 45 5 97 23 919 68 84 46 5 27 22 252 Quality 2 3 1,977 39 2,021 Integrated HSE 135 22 5 360 16 538 Integrated HSEQ 147 120 39 306 Total 993 264 96 11 2,630 143 4,137
28
HSE knowledge management

2005-2008, which will be addressed to the internal auditors of the HSE Corporate Department and which will aim at ensuring that audits are carried out more effectively. The business units have individually carried out technical audits, i.e. HSE and quality evaluations intended to ascertain the conformity of management systems and of sites/plants to the law in general or to specific regulations. These inspections are directly programmed and coordinated by the Divisions and Subsidiaries. In 2005 2,116 HSE technical audits and 2,021 quality audits were carried out, which 1,099 internal auditors participated in. HSE personnel In 2005 the HSE personnel numbered 2,618 full-time equivalent staff (against 2,552 in 2004). Since professionalism is fundamental for the good performance of HSE management systems and for good results, Eni has developed a knowledge management system intended to favor the synergy between the planning and developing of HSE professionalism for the critical business units activities and the programs of knowledge management.
Eni - Percentage of HSE staff per total number of employees 80,000 60,000 40,000 20,000
number %
G&P - Percentage of HSE staff per total number of employees 14,000 10,500 7,000 3,500
number %
14.0 10.5 7.0 3.5
14.0 10.5 7.0 3.5
2003 2004 Employees at period end (1) Percentage of staff (2)
2005
2003 2004 Employees at period end Percentage of staff
2005
E&P - Percentage of HSE staff per total number of employees 14,000 10,500 7,000 3,500
number %
R&M - Percentage of HSE staff per total number of employees 14,000 10,500 7,000 3,500
number %
14.0 10.5 7.0 3.5
14.0 10.5 7.0 3.5
2003 2004 Employees at period end (1) Percentage of staff (2) Enis HSE personnel at 2005-end
2005
2003 2004 Employees at period end Percentage of staff
2005
Exploration & Production Gas & Power Refining & Marketing Petrochemicals Oilfield Services Construction and Engineering Other activities Total (3)
(1) The data refer to the staff of consolidated subsidiaries at period end. (2) The data refer to the total HSE staff of consolidated and non-consolidated subsidiaries. (3) The data include the staff of the diversified business areas.
Employees (1) 7,491 12,324 8,894 6,462 28,684 8,403 72,258
HSE staff (2) 858 155 162 196 903 344 2,618
Auditors 275 41 542 40 143 58 1,099
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HSE professional model Eni considers HSE as fundamental in maintaining a competitive advantage in the near and distant future. The issues involved are characterized by a high level of diversity affecting all business areas, operational decisions and organizational levels. In order to ameliorate the HSE organization and optimize the professional development programs, in
2004 a project focusing on the HSE Professional Model was launched, through which Eni defined the HSE Professional Family with a view to identifying distinct professional roles and expertise, strengthening and configuring knowledge sharing and pinpointing joint instruments for training, developing and motivating the resources. The project, involving all HSE organizations, also defined the professional roles within each of the four families identified (Health, Safety, Environment and HSE Integrated Process) and, during 2005, embarked on the census and assessment of the resources.
Structure of Enis Professional Model
HSE PROFESSIONAL FAMILIES

HEALTH FAMILY SAFETY FAMILY ENVIRONMENTAL FAMILY INTEGRATED HSE PROCESS FAMILY
Health Manager
Occupational Health
Industrial Hygiene
Safety Operational Management
Safety Studies and Analyses
Safety Technologies
Environmental Environmental Environmental HSE Operational Studies Technologies Management Management and Analyses Methods & Systems
HSE Project Management
HSE Management
ROLES IN THE PROFESSIONAL FAMILIES
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HSE training The collaboration between Enis Health, Safety and Environmental experts on the one hand and professionals on the other has led to the completion of a catalogue of training courses addressed to specific HSE topics. Such an instrument aims at promoting the diffusion and development of capabilities and knowledge on the matter, meeting Enis growing demands linked to the spreading of the HSE culture and emphasizing proactive and responsible behaviors. The defined itineraries, differing from one another according to the positions covered, involve both nonHSE professionals and experts. The selected courses will permit the latter to achieve the objectives described in the HSE Professional Model.
In 2005 Enis employees attended HSE courses for a total duration of 867,215 hours (compared with 1,116,895 hours in 2004). The training on health and safety related topics, although representing 95% of the total hours of HSE training, has undergone, compared to 2004, a reduction of 24% attributable to the fact that in 2004, in some foreign countries such as Iran and Kazakhstan, safety training hit the highest point. A greater interest in environmental issues is highlighted by the total number of hours allocated to the relevant training, which has amounted to 46,839 with an increase of 8% compared to 2004. In 2005 o6.2 million were spent on HSE training (against 8.8 in 2004).
2005 HSE training hours by sector of activity
Eni - Breakdown of 2005 HSE training expenditure
9% Exploration & Production 6% Gas & Power 5% Refining & Marketing 12% Petrochemicals 63% Oilfield Services Construction and Engineering 5% Other activities 11% Health 65% Safety 24% Environment
Eni - Participations in 2003-2005 training courses 160 120 80 40

thousands of participations
Eni - 2003-2005 HSE training hours 1,200 900 600 300

thousands of hours
2003 Health and Safety Environment
2004
2005
2003 Health and Safety Environment
2004
2005
Total training Employees 7,491 12,324 8,894 6,462 28,684 8,403 72,258 HSE training hours 77,414 54,395 43,497 105,124 543,376 43,409 867,215 HSE participations 16,789 11,724 12,216 26,146 53,717 9,921 130,513
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The spreading of the HSE culture In addition to the traditional training channels, Eni uses other instruments to disseminate the knowledge of health, safety and environmental topics addressed to employees but also to external interlocutors. Among these, Eni is greatly committed to students, both entering the job market and the younger ones. A basic catalyst for the spreading and sharing of the HSE culture is Enis website in which a dedicated section has been created that contains an in-depth analysis of sustainable energy, Enis environmental commitment and the HSE guidelines and results achieved. Employees find the HSE.net portal of great use. It is, in fact, one of the most used applications within the corporate intranet, since it aims at providing training instruments and refresher courses to all those who, at Eni, have to tackle HSE-related problems. In 2005 it was supplemented with a special section dedicated to Climate Change. The E&P Division has set up the Knowledge Management Portal intended as an instrument for the spreading of corporate knowledge. The intranet portal includes a section focusing on Health and allowing to access internal and external sources of comprehensive information.
In collaboration with the Eni Enrico Mattei Foundation (FEEM) and sponsored by the Ministry of Education, University and Research and the Ministry of Environment and Territory, Eni has created www.eniscuola.net addressed to junior high school students. The portal provides documents, videos, charts, exercises and games aiding to discover the world of energy and natural resources. Descriptions are also contained of the impact that human activities produce on the environment and resources through the exploration of energy sources and of all the advantages and drawbacks related to sustainable growth stemming from their use. Post-graduate training Eni has also embarked on post-graduate projects both directly through Scuola Enrico Mattei and indirectly through the combined network of relationships with prestigious universities. The aim of such programs is to fulfill the needs of specific categories of corporate professionals. Through Scuola Enrico Mattei which, since its establishment in 1957, has carried out research work and organized post-graduate training, every year Eni gets involved in the planning of the MEDEA MASTER (Master in Management and Economics of Energy and the Environment). The main characteristics of the Master, originating in 1991 from the reorganization of the schools educational activities, are its integration of energy and the environment and its internationality. From its establishment to date the school has trained nearly 2,500 students 55% of whom are foreigners from 100 countries. The environmental topic has become increasingly important and is studied in detail in the larger context of such economic and energy issues as the economic growth, the reform of the energy market and sustainability. In this respect the high number of works carried out by students in relation to the European Unions environmental policies, the studies on biodiversity and on the management of water resources and the analysis on the environmental accounting of the main energy companies is particularly interesting.
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A number of projects carried out in 2005 in collaboration with a few Italian UNIVERSITIES for the training of HSE professionals are also noteworthy. At the Polytechnic of Turin five fellowships were assigned by Eni in view of the second edition of the Master in Reliability, Safety and Maintenance of Complex Technological Systems. Under sponsorship of the Italian Navy, two fellowships were assigned at the University of Pisa to young Engineering graduates for the Master in Undersea Electroacoustics. The educational program encompasses the issues related to undersea electroacoustic signals and their application for the creation of systems and plants suitable for the control of the environment and natural resources, for the environmental decontamination, for undersea activities connected to the installation and maintenance of oil pipelines and telecommunication links and for the development of surveying and localizing systems to be utilized in the sea surveillance and protection. Eni has also assigned 15 fellowships for a postgraduate course in Energy Engineering - Orientation Hydrocarbons at the Polytechnic in Milan. The course deals with topics related to the technologies for the exploration, processing, transport, distribution and use of hydrocarbons while focusing on the environment, territory and safety management. The Eni Master Project, now at its third edition, embraces the Master in Process Engineering at the University of Bologna and the Master in Petroleum Engineering at the Polytechnic of Turin, which analyze, in specific modules, the issues connected to industrial safety, health protection, risk assessment, safety system management and the techniques and technologies for the environmental protection.
Opinion sharing
This report is the most comprehensive instrument for communicating Enis HSE commitment, objectives and results. With the passing of time its presentation has permitted to open dialogue with Enis main HSE stakeholders. On 14 July 2005 the third edition of Enis Environmental Commitment: Opinion sharing conference took place in Rome, a round table aimed at promoting the discussion with and among the various participants. In each of these events, it has been attempted to guarantee the participation of diverse viewpoints, the involvement of stakeholders interested in Enis HSE improvement and the continuity in time of the participations. Starting from the analysis of the HSE Report, this kind of confrontation permits to know the stakeholders real perception of Enis way of operating in the HSE sector and to identify areas of improvement while trying to take in the comments made and the proposals put forward by the various interlocutors. The 2005 edition was attended by the Ministry of Environment and Territory, the Italian Environmental Agency, a number of trade unionists, two environmental associations (WWF and Legambiente), Cittadinanzattiva, a university teacher, two sustainability rating companies (Avanzi SRI Research and SAM) and FEEM.
Charts of students at Scuola Enrico Mattei from its establishment (1957) to 2005
12.2% South America 1.2% Central America 2.1% North America 45% Total Italian Students 55% Total Foreign Students 0.4% Australia 11.7% Asia 1.5% Middle East 9.8% Africa 16.1% Europe
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E N I H E A LT H S A F E T Y E N V I RO N M E N T R E P O R T 2 0 0 5 / H E A LT H
Health
Global approach, local attention

In Enis diversified operating contexts, the integrated and coordinated approach to health protection is felt as a necessity. The procedures for the coordination of those in charge of health services in the business units represent a moment of sharing of individual experiences aimed at finding optimal solutions to common problems and in accordance with management autonomy and the peculiarities of the various business activities. By applying the methodology of a technical and scientific consensus to the diverse topics, the coordination group shares policies, procedures and instruments appropriate for ensuring the protection of all workers health in the numerous living and working conditions and, at the same time, assures the communities that the highest care is being taken for the environment and territory, while minimizing the impact exerted on them by industrial activities. The health management within Eni is characterized by: clear policies; standardized methodologies; knowledge sharing; optimal exploitation of internal expertise.
The commitment to health protection and safeguard stems from the top value given to human resources
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E N I H E A LT H SA F E T Y E N V I RO N M E N T R E P O R T 2 0 0 5 / H E A LT H
The health management system is based on a cyclical process of evaluation of impacts, identification of purposes (policies and sectors objectives), accomplishment of interventions (health centers, telemedicine, international cooperation and agreements), monitoring (system audit), definition of new targets and improvement of areas referring to: workers, contractors and communities health protection; prevention of occupational injuries and diseases; promotion of a healthy life style and behavior in the workplace.
surveillance of risk-exposed employees, by means of advanced and extremely sensitive analytical techniques in order to be able to obtain early tests and make early diagnoses. In 2005 over 44,000 medical examinations and more than 143,600 laboratory and instrumental tests were carried out; the upgrading of health centers in terms of medical expertise and monitoring systems.
Eni - Typology of environmental surveys in 2005 (1)
Assessment and prevention

When planning multifaceted industrial activities, often in extreme geo-climatic conditions and in remote locations, priority is given to the assessment of health risks in workplaces and in working situations. The assessment is led alongside the evaluation of the impact of the project on the health of the communities concerned. Physical, chemical and biological impacts depending on work activities are among the health-affecting factors taken into account together with those causes, which are connected to the environment and the workers living conditions, including elements potentially hazardous from a psychological and social point of view. The preliminary analysis allows to outline a corporate health plan and to arrange the organizational structure most appropriate to the requirements of each project. Along the operations, monitoring campaigns for specific agents (768) are conducted which involve numerous environmental surveys (13,459) complying with international standards and local regulations. A similar monitoring process is carried out in workplaces on air quality, microclimate and air-conditioning plants (164 surveys). Drinking water analyses (9,613) are also noteworthy especially in the sectors of R&M, Oilfield Services Construction and Engineering and E&P, to which individual checkups through the use of detectors of systematic individual exposures are added; in 2005, for instance, 4,526 samplings with personal dosimetry were carried out. Sanitary surveillance, which in 2005 involved over 38,000 employees, is perfected through: the information to and the active and receptive participation by trade unions and individual workers; the tight integration between the continuous monitoring of workplaces and the sanitary
18% Noise 5% Ionizing radiations 2% Non-ionizing radiations 4% Microclimate and lighting 3% Particulate matter 3% Biological agents 65% Chemical agents
(1) Excluding water drinkability analyses.
2005 Environmental surveys by sector of activity
16% Exploration & Production 1% Gas & Power 36% Refining & Marketing 9% Petrochemicals 26% Oilfield Services Construction and Engineering 12% Other activities
2005 Medical examinations by sector of activity
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Eni - Corporate health centers 800 600 400 200

number
Management
The changing conditions of work activities and the requirements for an ever-increasing business flexibility and motivation drive corporate health services towards multidisciplinary, competitive, efficient and high-quality operational models. Health management is based on a global system constituted by 339 HEALTH UNITS, located in all major production sites in Italy and abroad as well as on ships, which provide first aid services and medical support for the employees and the contractors health protection. The business units benefit from a MEDICAL STAFF of their own (559 operators in 2005) dealing with occupational health, on-site first aid and primary health assistance in remote abroad areas. In Italy, in accordance with the law in force, workers sanitary surveillance is entrusted to over 100 competent doctors. In some foreign countries Enis health centers also provide aid to the families of local workers and expatriates in full collaboration with the local public health institutions. This extended initiative of medical assistance which, in 2005, witnessed approximately 120,000 checkups and examinations on people ranging from employees to contractors, turns out to be very important in the relationship with the communities. In those locations where Eni does not provide a health ward, service agreements are negotiated with other companies, within the same industry and operating locally, or assistance is asked for to external operators. The agreement entered into with International SOS ensures the provision of qualified health services for all operational needs and in any part of the world and guarantees assisted evacuations and repatriations in cases of severe health emergencies.
10% Health management physicians 17% Occupational health physicians 29% First aid physicians
2003 Italy Abroad
2004
2005
2005 Health centers by sector of activity
Eni - Health service staff in 2005
56% Medical staff 35% Nursing staff 9% Other health service permanent staff
Eni provides operational assistance and organizational support to the business units without an internal health center of their own thus emphasizing the synergies among the groups companies. By way of example it has contributed to the creation of a special health office
Summary of health surveillance activities in 2005 Health service staff 427 54 56 97 256 124 1,014 Medical examinations 14,031 5,287 4,620 6,463 9,061 4,540 44,002 Diagnostic exams 49,298 10,464 7,742 14,978 48,342 12,786 143,610
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and to the outlining of corporate health programs for both Snamprogetti and the G&P Division. In 2005 a substantial health TRAINING program was launched for a total duration of 47,000 hours and with the involvement of 30,300 people including employees, contractors, medical and nursing staff. The E&P Division, operating in 33 countries with 151 health centers, is provided with a health management system complying with the OHSAS 18001 standards and based on three guiding principles. The first pertains to the tactical approach to health management founded on a preliminary analysis of health risks and the effects brought about by extraction activities. During 2005 seven Health Impact Assessments were completed in Australia, Kazakhstan and Italy which, in defining the intervention areas, saw the participation of all parties concerned. The second principle concerns health prevention and promotion activities. Prevention, while directly complying with local regulations and with Enis standards, is carried out through a series of intervention plans ranging from the diagnoses, treatment and prevention of occupational diseases and injuries to the monitoring and detection of causes; from response planning to first aid emergencies. In 2005 there was a considerable rise in the sanitary surveillance activities through the accomplishment of 14,031 medical examinations and 49,298 diagnostic exams. Health promotion is based on a close analysis of the employees and communities needs as illustrated by the accomplishment of 78,000 health examinations (of which 8,650 on contractors and community members) and the administration of 9,652 vaccinations (of which 2,431 to third parties). Such promotion activities as screening, information campaigns on healthy diets, sexually transmitted diseases prevention, health education, first aid and so forth are equally important. In 2005, 173 campaigns took place in 13 countries which witnessed the participation of over 180,000 people and were complemented by publications like Health Travel Guide, Guide to Vaccinations and Guide to Malaria and Other Insect-Borne Diseases. Soon to be published handbooks are The Travel Guide to Safe Food and Water and The Guide to Personal Fitness and Better Health. To support the health management system based on risk assessment, an IT program has been developed which deals with the issues related to medical assistance and sanitary surveillance. The Individual Health Management IT System (GIPSI - Gestione Informazioni Prestazioni Sanitarie Individuali) enables the health performance management and elaboration for all employees in Italy and abroad, in full respect of their privacy.
2005 Health training activities by sector of activity
25% Exploration & Production 36% Gas & Power 2% Refining & Marketing 2% Petrochemicals 33% Oilfield Services Construction and Engineering 2% Other activities E&P - Health expenditure 25 20 15 10 5
million euro
2004
2005
E&P - Health expenditure breakdown for 2005 4.6% Equipment and tools 1.8% Environmental surveys 70.0% Health and hygiene management 0.4% Research and development 16.4% Sanitary surveillance 0.1% Legislative requirements 0.2% Communication 2.5% Training 4.0% Other
The third principle rests upon the definition of minimum standards (procedures and guidelines) which constitute benchmark criteria for the implementation of the health management system in all subsidiaries. The Division has issued a guideline which regulates the training and aims at improving the qualification of the medical and nursing staff working abroad in conditions often inadequate for lack of local medical infrastructures. In 2005 a health training program was enforced for a total duration of 11,954 hours which, all considering employees, contractors and medical staff, was attended by a total of 7,312 people. The halving in the number of international health repatriations, which last year dropped from 16 to 7, is one of the indicators of the effectiveness and quality of health and medical assistance activities recently developed in foreign countries.
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Operative in 32 countries, the G&P Division is structured in such a way as to envisage that, for risk assessment, identification of solutions and elaboration of procedures, the ones responsible for health management be assisted by the Prevention and Protection Services. The competent doctors, in accordance with a protocol of targeted clinical tests, implement the sanitary surveillance programs on risk-exposed workers. To provide health assistance, the Division makes predominant use of Siecos medical staff and structures. In 2005 5,287 medical examinations and 10,464
diagnostic exams were completed while 181 environmental surveys were carried out, in order to monitor the ergonomics of workplaces and the staffs exposure to chemical and biological agents, ionizing and non-ionizing radiations, particulate matter and emissions produced during welding, noise and microclimate.
G&P - Health expenditure 4.0 3.0 2.0 1.0

million euro
G&P - Health expenditure breakdown for 2005 22.8% Equipment and tools 6.8% Environmental surveys 42.2% Health and hygiene management 19.9% Sanitary surveillance 0.2% Legislative requirements
2004
2005
2.4% Communication 0.5% Training 5.2% Other
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Health management in all units of the R&M Division relies on the Computerized System for Medicine and Hygiene in the Workplace (SMIL - Sistema Informatizzato di Medicina e Igiene del Lavoro) which records the information resulting from the activities of sanitary surveillance and the workplace monitoring and is complemented with a CD distributed by the Division to all Italian and foreign sites and called Occupational Health and Hygiene in the Refining & Marketing Division - Methodology and Equipment of the Health Management System. In 2005 the activity of sanitary surveillance involved over 4,600 potentially risk-exposed workers and entailed 42 campaigns for the detection of exposure to risk agents in consideration of which 4,804 environmental surveys were also carried out. Special checklists have also been defined for auditing the implementation of the Health Management System in the European subsidiaries. The biological monitoring program addressed to benzene-exposed workers has been completed and the monitoring has kicked off of the PAH (poli-cyclical aromatic hydrocarbons) and n-hexane risk agents. In addition, for the assessment of the acoustic impact exerted by the retail outlets in commercial area networks, a protocol has been delineated which, within the activities for the ISO 14001 certification of the commercial area network of Milan, Padua, Bologna, Palermo and Turin, has been applied to approximately 250 outlets.
The guidelines on the Standard Ergonomic Criteria for the Structuring of Video Terminal Units have been published, which represent a benchmark for the configuration of work posts covered by video terminal workers. In collaboration with CNIT, the Italian national center of toxicological information, the training has continued of the staff of peripheral units and of the local health authority (ASL). The project started in the refinery of Taranto and involved not only first aid operators but also the local health authority, the 118 first-aid and hospital emergency services. The Model Study on Skin Exposure has been completed, which aims at determining the skin reaction to the exposure to volatile products such as kerosene and diesel and which has led to a specific protocol of workers sampling, analysis and biological monitoring. On completion of the inventory of materials containing asbestos in the entire Agips commercial network, the operations to remove products containing asbestos from petrol stations have been intensified.
R&M - Health expenditure 4.0 3.0 2.0 1.0

million euro
R&M - Health expenditure breakdown for 2005
6.5% Equipment and tools 22.9% Environmental surveys 21.3% Health and hygiene management 2003 Investments Current expenditure 2004 2005 43.2% Sanitary surveillance 0.2% Training 5.9% Other
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Monitoring and reporting

Until 2004 health accounting only covered workers sanitary surveillance. In 2005 the Health Accounting System (SCS - Sistema Contabile della Salute) was updated in order to widen the reporting domain to include such initiatives as health promotion, community assistance services and performances provided by Enis structures. The Health Accounting System encompasses the following: medical staff and structures; sanitary surveillance activities (examinations, instrumental tests and surveys); risk and impact assessment; employees health conditions (sickness absence, repatriations etc.); activities carried out by Enis health services; health promotion campaigns; health training; financial commitment. Monitoring is supplemented with special audits executed in order to evaluate the efficiency level of both corporate health structures and external health services. The use of new information technologies and of increasingly powerful telecommunication networks permits to overcome the cultural isolation of the health operators posted in remote areas and favors the improvement of services quality. Enis TELEMEDICINE project is one of the instruments made available to enhance the operational capability and efficiency in the health sector. Every year new stations and connections are activated for the teleconsultation with the coordination centers of the University in Milan and with various international health partnerships. Today the telemedicine service is available to the Libyan, Congolese, Nigerian and Italian centers and shortly it will be offered to the sites in Pakistan, Kazakhstan and Angola. The extension of telemedicine to the maritime sector, where the presence on board of a health operator is not envisaged, is currently under evaluation. To date, in case of necessity, the ships commander can consult the International Radio-Medical Center, an institution composed of voluntary physicians offering assistance by telephone, e-mail or fax. The E-LEARNING Project enables Italian and foreign health operators to access continuous remote training. It uses an IT platform named Mastermed which permits to manage classes modulated according to the individual needs of the professionals concerned. The project comprises courses designed for physicians operating in remote areas and for those working in Italian plants. The course for first aid operators is already accessible on the net while the section regarding the work-suitability evaluation of workers with cardiovascular pathologies is still to be set off. An important contribution to health knowledge sharing is made by the timely, up-to-date and reliable information, from such sources as the World Health Organizations (WHO), the Center for Disease Control (CDC) and the Superior Health Institute, on epidemics and on other transmittable pathologies. This information is provided to both health operators and workers through Enis HSE.net portal or via regular newsletters. The recent international issues linked to the spreading of infective diseases such as SARS, Avian flu, Ebola, bioterrorism, natural catastrophes etc. have proved the portals usefulness, simplicity and efficiency.
Information technology for health services

Knowledge sharing through the development and implementation of new instruments allows to align languages and behaviors with good practices and above all to ameliorate health performances. The HEALTH CARD is an electronic device allowing the employee to easily and speedily access his/her own health data from all over the world. The card enables the employee to share the information in his/her clinical history with the business units physician, in the case of occupational health, or with his/her general practitioner. The Health Card can be accessed on the website or the intranet in full compliance with privacy regulations and IT security. In 2005 over 1,700 cards were introduced into the net, with priority given to new recruits and employees in foreign sites. It is estimated, however, that the full coverage within Eni will be attained by the end of 2007.
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Health promotion initiatives

For employees to be posted to foreign sites, the health assistance program involves a check-up intended to ascertain their good health conditions. After an examination for suitability, the employee is administered all necessary vaccinations and prophylaxes and is informed of the epidemiologic issues and hygienic practices existing in the country of destination. To provide the employee with exhaustive information, the HEALTH HANDBOOK FOR ENIS TRAVELERS has been published, which lists the vaccinations and prophylaxes needed in each country and the related territorial and endemic problems. Eni has launched a series of prevention programs based on information, screening and direct interventions which the employees can join on a voluntary basis. Bearing in mind the targets of the National Health Plan and on the basis of the agreements entered into with the Italian League for the Fight against Tumors and with a number of health partnerships, Eni has embarked on an early diagnosis project destined to the employees in all Italian sites. By the end of December 2005, 46 Eni sites had been involved in the project and over four thousand employees had adhered to the tumor prevention program for a total of nine thousand examinations. In 2004, in collaboration with the Health Integrative Fund, an ictus prevention campaign was carried out during which Enis employees were offered a cost-free screening and which continued through 2005 with seven thousand people partaking in it. In agreement with FASEN (Fondo Attivit e Servizi Sociali Energia Eni), the welfare fund managed by trade unions, a project has been launched for heart risk assessments. In Italy, in the field of infective pathology prevention, Enis health structures have continued the anti-flu vaccination campaign, which has seen a high level of participation by employees. Abroad Saipems commitment is spotlighted in the prevention of sexually transmitted diseases and, above all, in the promotion of the Sexually Transmitted Disease (STD) Program based on information and education, motivation to change sexually risky behaviors and identification of the behavioral factors influencing the modalities of STD infection. In 2004 Saipem issued the Corporate HIV-AIDS Policy promoting and informing on more appropriate sexual behaviors, free and voluntary individual tests, the access to medical structures guaranteeing suitable control systems of instruments and materials representing potential disease carriers, non-discrimination against HIV-positive personnel either during working or social life, compliance with the privacy of all people concerned according to legal requirements and deontological ethics, consultancy and access to the best medical treatments. Communities At the international level, information campaigns have been promoted aiming at the health safeguard of employees, families and local communities with whom Eni interacts and at the prevention of malaria (in Nigeria and Azerbaijan) and of the transmission of the HIV virus (in Nigeria and Congo). The foreign medical activity carried out by Eni has supported several health initiatives in favor of the local communities. Venezuela The integrated program of assistance to the local communities developed through the cooperation agreement with SALUDANZ, the regional health authority of Venezuela, has continued. Among the initiatives embarked on, it is worth emphasizing a national vaccination program addressed to employees and local populations living near the production areas. On the whole the program has involved 20,000 people with 201 vaccinations (polio, BCG, hepatitis B, tetanus, diphtheria) administered to employees and 174,607 to local community members.
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Congo In order to prevent the mother-to-child transmission of the HIV virus, the Kento-Muana project continues to be developed with the collaboration between Eni Congo, the University of Genoa and the Pointe Noire Hospital. The heart of the project is the laboratory of serological and molecular diagnostics inaugurated in 2005 at the Regional Hospital of the Army (Hpital Rgional des Armes) of Pointe Noire. Nigeria Within the national plan for the prevention and fight against malaria launched by the federal government and known as the Roll Back Malaria Program, the Ologoama Health Center has been completed. The center, situated in an area where malaria is one of the main causes of death, is provided with an analytical laboratory, equipment and medications. Through the provision of aid and drugs, Eni still supports the activities of the center currently controlled by the Bayelsa State. The program for the prevention of mother- to-child HIV transmission, developed in collaboration with UNICEF, has also been extended to the hospitals of Omoku and Port Harcourt. In April 2005 the restructuring activities of the health centers of Port Harcourt, Omoku and Okolobiri were concluded. Kazakhstan The main intervention areas are those where oil-related activities are carried out, namely the regions of Atyrau and Mangistau, part of the North Caspian Sea Production Sharing Agreement (PSA), the regions of Uralsk-Aksai and the region of the capital Astana. Among the principal activities, worth noting are the numerous infrastructural interventions such as the refurbishment of health centers and, in particular, the completion in 2005 of the surgery ward of Uralsk regional hospital. In the previous years interventions had included the extension of the infectious disease hospital of the city of Uralsk, the construction in Katzalovka of a new hospital with 150 beds and the refurbishment of the Aksai hospital.
Indonesia The main interventions include the construction and refurbishment of rural health centers, the donation of equipment for the malaria diagnosis, the organization of training courses and vaccination campaigns for children and pregnant women. Within the Vico Indonesia consortium, Eni has carried out awareness initiatives related to HIV/AIDS, drug addiction and blood donation. Pakistan The activities aimed at promoting the improvement of health services, primary education, social training and social development of the communities living in Enis operational areas continue to grow.
Management of health emergencies

Enis strategy for managing major health crises is essentially based on: the increase in the response capabilities and the quality standards of its internal medical services; the staffs and health operators information and training; the creation of privileged channels for the supply and distribution of indispensable drugs; the identification of reference and partnership health centers in the various geographic areas; the constant verification of the evacuation and repatriation procedures for health reasons; the coordination with the national and supranational bodies.
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Expenditure and investments

For the health safeguard approximately o40 million were spent with an increase of 33% compared to 2004. 95% of the total amount is represented by current expenditures. As an average the per capita expenditure for Enis employees has equaled around o553 thus recording an increase compared to 2004 when it amounted to o429. The diversity of the expenditure incurred by the Divisions is due to the variety of activities carried out, which produce a diverse exposure to risk agents and the geopolitical conditions under which they develop. As for the breakdown of expenditures, the most important categories are those related to health and industrial hygiene management (o21.8 million) and sanitary surveillance (o8.4 million).
Eni - Health expenditure breakdown for 2005 10.8% Equipment and tools 7.8% Environmental surveys 54.4% Health and hygiene management 0.2% Research & Development 21.0% Sanitary surveillance 0.4% Legislative requirements 0.4% Communication 1.8% Training 3.2% Other
Eni - Per capita health expenditure 80 75 70 65

thousand employees euro per capita
600 450 300 150
2003 Employees
2004
2005
Per capita health expenditure 2005 Health expenditure by sector of activity 40 30 20 10

%
Eni - Health expenditure and investments 60 45 30 15

million euro
Exploration & Production
Gas & Power
Refining Petrochemicals & Marketing
Oilfield Services Construction and Engineering
Other activities
2004
2005
With a disbursement of o553 per employee, in 2005 health expenditure raised by 33% compared to the previous year
2005 Health investments and current expenditure Investments 0.58 0.24 0.14 0.59 0.20 0.15 1.91 Current expenditure 13.19 3.24 3.09 5.37 8.43 4.76 38.08
(million euro)
Total 13.77 3.48 3.24 5.96 8.63 4.91 39.99
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E N I H E A LT H S A F E T Y E N V I RO N M E N T R E P O R T 2 0 0 5 / S A F E T Y
Safety
Industrial risk assessment and management

Always deeply committed to the issues related to prevention, protection and industrial safety, Eni has founded its strategy on: uniform policies, specific operational procedures and appropriate management systems; control of the exposure to hazardous situations, its prevention and the protection from it; recognizing the need to guarantee the lowest risk exposure in all production activities. In 2004 the guidelines on risk assessment and mitigation were further elaborated. They classify the methodologies to be used for the identification of hazards, the assessment and mitigation of risks originating from plants, processing, transport modalities, workplaces, chemical substances and preparations used, produced and sold. The assessment is a process starting with plant planning and completion, proceeding with the use, maintenance and technological upgrade and ending with the decommissioning and restoration of the site.
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This course of action is configured in five stages: identification of all kinds of exposure to potential hazards linked to processing, products and operations based on the Hazard and Operability Studies (HAZOP), critical tasks analysis, Fault Tree Analysis, Event Tree Analysis etc.; risk assessment in relation to the event severity and frequency and the probability of happening; elaboration of an action plan beginning with the elimination or reduction of the potential risk by means of technological investments, risk management systems, staffs training and insurance cover; implementation of the plan through the definition of objectives, targets, responsibilities, standards, procedures, training, investments and so on; monitoring characterized by the measurement, evaluation and correction of individual and process performances.
Plants and products

There are 53 Enis sites in Italy operating in compliance with Decree No. 334/1999 modified by Decree No. 238/2005 and enforcing the EU directive 2003/105/EC on the control of major-accidents hazards involving dangerous substances. This regulation requests that the sites concerned are equipped with a safety management system and present a safety report to be verified by the Authorities. Each PLANT is endowed with an emergency plan which takes into account the potential accidents and relevant scenarios identified during the various stages of risk assessment. The directors of the industrial sites participate in the drafting of the external emergency plan prearranged by the competent authority. Similar management procedures are applied to the European plants subject to the Seveso directive. Within the range of activities related to risk mitigation and the control of accidents, Eni has promoted the project named HSE Simulation Models which constitutes the benchmark system for identifying and reorganizing the instruments and methodologies to be used in the assessment of accident scenarios in Eni plants and in the analysis of the consequences accomplished in the environmental and safety studies. For the risk assessment and the evaluation of the impacts on people and, especially, on the environment, the project entails a census of the simulation models used in the business units and listed hereafter: evaluation models of the consequences of such accidents as release of hazardous substances, emissions, leaks, fires, explosions; models for offshore and onshore air leaks of polluting agents and for noise propagation. All along the life cycle encompassing such stages as research, planning, production, distribution and the use and final disposal, Eni remains faithful to a PRODUCT policy based on quality, safety and environmental compatibility. For each oil and chemical product, a safety sheet has been worked out which considers the qualities of the product, the risks it involves and the measures to take when using it. The description of the technical characteristics and of the product sheets can be found in the www.agip.it, www.gasandpower.eni.it and www.polimerieuropa.com.
Oil spills 2003 121 857 2004 226 7,813 2005 335 6,908
In the Refining & Marketing sector the activities of toxicovigilance cover the continuous update of product and plant dossiers, which contain information on substances and preparations and a classification of sites affected by toxicological risks. The R&M Division has embarked on cooperation with the National Center for Toxicology Information (CNIT - Centro Nazionale di Informazione Tossicologica) thus guaranteeing the prompt and timely intervention in emergency situations and the training, through theoretical and hand-on courses, of the staff in peripheral units and of the local health authorities (ASL). In order to ensure a greater product safety, the division participates in international programs and initiatives such as those of CONCAWE (oil companies European organization for environmental and health protection) aiming at detailing the risk assessment relating to the main oil products. In the chemical sector, the commitment has continued to guarantee a safe use of the chemicals and, above all, of the 55 products which fall within the sphere of applications of the forthcoming European regulation called Registration, Evaluation, and Authorization of Chemicals (REACH) which focuses on the integration, implementation and harmonization of the regulations in force and intends to secure the safety of chemical substances with regard to human health and the environment. Since 1995, through Polimeri Europa, Eni has been partaking in Responsible Care, a program of the global chemical industry intended to put into effect the commitment of each company and of the entire sector in tackling the environmental, health and safety issues. The objective is to achieve a continuous, significant and tangible improvement of the relationship between chemicals and territory also through a product sustainability policy. Additionally Eni participates in the international voluntary ICCA-HPV (International Council of Chemical Associations - High Production Volume) program which concentrates on the analysis of high production volume chemicals. This program concerns the solvents used in the R&M Division and certain substances produced by Polimeri Europa. For an in-depth study on the Products, see page 88
Oil spills Volumes (1)

(1) The consolidation domain has widened since 2004.
(number) (barrels)
45
Transport
Particular attention is paid to the transport modalities of products, many of which fall into the category of hazardous substances. A specific monitoring system applies to each modality. In all instances the best transport technologies are adopted in order to ensure an efficient and valuable service, the lowest impact and the highest safety of the carriers utilized. Pipelines represent the safest means of transport with the lowest environmental impact and constitute the preferred transport modality. In fact, 54.2% of Enis products are transported through gas and oil pipelines (against 53.2% in 2004). For a safe road transport of oil and chemical products, Intermode in collaboration with the public administration, has set off on a series of telecontrol initiatives such as the Integrated System for Environmental Monitoring and Emergency Management (SIMAGE - Sistema Integrato per il Monitoraggio Ambientale e per la Gestione delle Emergenze) and the National Safety System for the Transport of Hazardous Goods (SNSTMP - Sistema Nazionale di Sicurezza per il Trasporto di Merci Pericolose). A similar initiative has been undertaken by Polimeri Europa and Syndial that have joined in the Transport Emergency Service (SET - Servizio Emergenze Trasporti), namely a voluntary program launched by Federchimica which is adhered to by enterprises and associations interested in cooperating with Public Authorities in the management of road and rail emergencies. In the maritime sector Eni has adopted tight criteria for the selection of ships transporting hydrocarbons and chemicals. The production, handling and transport of oil products can entail various-sizable product spills. In 2005 335 spills occurred totaling 6,908 barrels of oil spilt. The oil spills taken into consideration are only those caused by accidents, whereas those prompted by acts of sabotage are excluded. In order to curb them, social initiatives are undertaken in the communities where this phenomenon is widespread. For an in-depth study on Transport, see page 82
Enis employees injury indexes have improved while the contractors have hit historical records
Injury prevention
Employees With the purpose of increasing hazard prevention and mitigation capabilities, a meticulous analysis is performed of the typology of recurrent injuries, of occurred accidents, of near-misses and of work conditions, i.e. environment, equipment used, individual protection devices and so forth. Together with the ongoing awareness campaign, this course of actions has favored an incessant improvement of injury indexes. Safety indicators have highlighted a considerable amelioration compared to 2004. The frequency index has equated 3.17 with a drop of 29% in comparison with the previous year; the severity index has equaled 0.10, i.e. 9% lower than in 2004. In 2005 the staff attended numerous courses on health and safety topics for a total of 820,376 hours of training, which represent 94.6% of the entire HSE training. The training was prevailingly adhered to by the divisions and companies operating abroad with E&P and Oilfield Services Construction and Engineering, allocating approximately 70% of training hours. Notwithstanding the attention paid to the carrying out of the production activities, regrettably Eni has experienced the fatal accidents of five employees (against 9 fatal accidents in 2004).
Eni - Participants in Health and Safety training 14.0 10.5 7.0 3.5
thousands of participants
2003
2004
2005
46
E N I H E A LT H SA F E T Y E N V I RO N M E N T R E P O R T 2 0 0 5 / S A F E T Y
Contractors 2005 was a crucial year for the safety performances of the contractors. The frequency index was equal to 2.59 (against 7.84 in 2004) whereas the severity index equated 0.072 (against 0.09 in 2004). Eni makes use of a multitude of external individuals for the supply of goods, services and work. The Supply Department supervises the procedure for the selection of suppliers and contractors while taking into consideration their capability to guarantee financial,
technical, production and organizational requirements as well as the appropriate criteria for safety in the workplace, health protection, quality management, environmental safeguard and compliance with labor international standards. The checklists used appraise the most important HSE topics, focusing on the adoption of management systems, their certification according to acknowledged international standards (ISO 14001, EMAS, BS8800) and the safety performances achieved.
2005 Employees injuries by sector of activity 11.7% Exploration & Production 37.7% Gas & Power 11.1% Refining & Marketing 14.0% Petrochemicals 19.5% Oilfield Services Construction and Engineering 6.0% Other activities
2005 Contractors injuries by sector of activity 20.4% Exploration & Production 13.7% Gas & Power 7.5% Refining & Marketing 7.5% Petrochemicals 42.6% Oilfield Services Construction and Engineering 8.3% Other activities
Eni - Employees injury frequency index 10.0 7.5 5.0 2.5
Eni - Contractors injury frequency index 10.0 7.5 5.0 2.5
2003
2004
2005
2003
2004
2005
Eni - Employees injury severity index 0.12 0.09 0.06 0.03
Eni - Contractors injury severity index 0.12 0.09 0.06 0.03
2003
2004
2005
2003
2004
2005
So as to ensure that the protection of the worker rights is guaranteed to contractors, too, Eni has foreseen the extension to suppliers and contractors of the principles of the Agreement on Transnational Industrial Relations and Corporate Social Responsibility
47
To improve safety at work, the business units organize tailor-made courses addressed to suppliers or contractors and concentrating on management systems, the use of individual protection devices, safety instruments and operational modalities. With deep regret Eni has had to face the accidental death of 13 contractors (26 in 2004). Trade unions Along with the three-year renewal (2004-2007) of the European Works Council, the organization representing Enis employees within the European Union, the agreement has been renovated on the European Observatory on health and safety at work. The target is to strengthen the role played by this organization created in 1996 with a view to safeguarding workers health and safety and to reaching homogeneity in the protection and prevention activities for all Enis workers employed in the European Union. On the occasion of the 2005 annual meeting with the International Federation of Chemical, Energy, Mine and General Workers Unions (ICEM), Eni presented the HSE performance trends to trade unions in order to find a common ground on interventions. Divisions
Since 2003 the Managing Directors of the foreign units were assigned specific targets for the improvement of the HSE performances and the drop in injury indexes. The adoption of performance indicators, the assignment of specific objectives, the auditing activity, the characterization and implementation of follow-up actions, the finalization of emergency plans and the organization of emergency drills are some of the activities carried out with a view to improve safety. The decrease in the number of injuries notified (68 against 137 in 2004) is essentially due to the contribution of Eni Iran.
E&P - Injury frequency indexes 40 30 20 10
2003 E&P - Injury severity indexes 0.60 0.45
2004
2005
Following the adoption of a dedicated procedure, on a monthly basis the E&P Division issues a report on injuries, accidents and near-misses intended to underscore and record each event altering the everyday work activities. These actions are indispensable in the analysis of the data relating to each incident and for the evaluation of the phenomenon and its evolution.
0.30 0.15
2003 Employees Contractors
2004
2005
ENI IN IRAN
Eni has been active in Iran since 1957 and currently operates, in both cases with a 60% sharing, in the fields of Darquain, situated in the region of Ahwaz, and of South Pars (phases 4 and 5) in the Iranian waters of the Persian Gulf. It also partakes in the projects of
expansion of reserves and the production capabilities of the offshore field of Dorood, off the isle of Kharg, where Enis sharing amounts to 45%, and of the development of the offshore field of Balal, where Enis shares represent 38.25%. As for the exploration and
production of hydrocarbons, in 2005 very rewarding results were attained in the field of safety as shown by the fact that the injury frequency index equaled 1.39 (compared to 20.08 in 2004), with no death to record against the 11 fatal accidents in 2004. The improvement follows the
48
Construction activity of Italgas and Snam Rete Gas related to pipe assembly impacts on injury indexes of G&P Division. In the 2005 the frequency and severity indexes have slightly improved with respect to both Enis employees and contractors. The intensification of control activities has brought about a rise in safety expenditure and the strengthening of training, which has increased of 32%.
The R&M Division has achieved the best result for the last four years, characterized by the reduction nearly by half of the number of injuries (from 120 in 2004 to 64 in 2005) and by a general improvement in the performance indexes. A drop of 38% is also recorded in the frequency injury index. In Italy the best result for the last four year has been achieved, with a decrease of 37% in the number of injuries at work and when traveling to/from work (26 against 41 in 2004).
G&P - Injury frequency indexes 40 30 20 10
R&M - Injury frequency indexes 40 30 20 10
2003
2004
2005
2003
2004
2005
G&P - Injury severity indexes 0.60 0.45 0.30 0.15
R&M - Injury severity indexes 0.60 0.45 0.30 0.15
2004
2003
2004
2005
adoption of a safety management plan articulated as follows: HSE management responsibility of Eni Iran (taken away from contractors); implementation of an HSE management system in line with the directives of the E&P Division; change in the typology of activities carried out from
construction (essentially performed by contractors) to exploration and production (performed by Enis staff ). As a matter of fact, in 2005 the development has been completed of the South Pars field, with the installation of two platforms with 24 wells, the laying of two undersea gas pipelines for the transport of
gas and the construction of an onshore gas processing plant; the launch of a major safety training program; the adoption of a number of procedures relating to work activities; the improvement of safety controls in operating sites; the drawing up of emergency plans.
49
For at least the last three years the zero operational injury trend has continued in 25 sites. As for the contractors the results achieved are better than in 2004, as proved by the decrease in the number of injuries from 101 to 68.
Emergency management
The Model of Management System requests that the business units carry out the actions necessary to plan interventions in emergency cases and to reduce the adverse consequences of accidents. Such actions are encoded in the internal emergency plan of each site and notified to the public administration, which Eni works in close collaboration with for the arrangement of territorial emergency plans, training activities and joint simulations. Corporate Emergency Plan Eni Corporate is actively involved only in the instance of third-level emergencies, for which a Corporate Emergency Plan has been designed to control crises in any part of the world. The plan is based on a Crisis Unit, which is composed of experts from each business unit and is delegated with the coordination of internal and external staff, means and equipment. To increase the ability to cope with emergencies, the two emergency rooms of Rome and Milan have been enhanced together with the management systems they are equipped with. Above all, the information system has been developed which supports third-level emergencies and is based on three integrated modules:
Knowledge Management System for the structured data collection, feeding the entire system; Geographic Information System for cartographic functionalities. A cartographic system used worldwide and on nautical paper charts is able to monitor the activities of Enis sites (wells, refineries, oil depots, chemical plants, pipelines, sealines etc.); Decision Support System for synchronization and assistance when decisions have to be made in relation to emergency cases. Eni Corporate has also strengthened the operational systems for the management of information pertaining to sites and logistics, to the chemical and physical features of polluting products and to their eco-toxic effects. The systems have been perfected for the simulation of the spreading at sea of hydrocarbons and the sampling of the atmospheric releases of toxic substances. Connections have also been activated with databanks regarding the chemical and physical characteristics of polluting products and their eco-toxic effects. Agreements and co-operations In 2003 Eni entered in a framework agreement with Castalia Ecolmar, an Italian company specialized in the prevention of and the fight against sea pollution and provided with an integrated system of response to emergencies at sea in the Mediterranean. It is also a partner of Oil Spill Response Ltd (OSRL), an organization founded in 1985 by the world most
2005 Safety indexes Employees Frequency Severity index index 1.53 0.03 10.83 0.34 3.94 0.14 7.35 0.27 1.45 0.05 2.70 0.08 3.17 0.10 Contractors Frequency Severity index index 1.34 0.03 21.28 0.49 5.25 0.19 12.87 0.19 2.11 0.07 14.08 0.25 2.59 0.07
Exploration & Production (1) Gas & Power Refining & Marketing Petrochemicals Oilfield Services Construction and Engineering Other activities Eni total (1)
(1) The indexes refer to the number of working hours of the consolidated and non-consolidated subsidiaries staff.
50
important oil companies with the objective to ensure rapid intervention for its members for all accident scenarios, in all locations. On 1 January 2000 OSRL stipulated an agreement with East Asia Response Pte Ltd (EARL), which allows the partners of both organizations to exchange resources and services in light of events concerning East Asia. Eni is also a member of the Mediterranean Oil Industry Group (MOIG), an organization constituted by the representatives of various oil companies operating in the Mediterranean countries. The group, recognized by the Petroleum Industry Environmental Conservation Association (IPIECA) and by the Regional Marine Pollution Emergency Response Center (REMPEC), aims at safeguarding the sea environment relating to oil transport (all way from the production sites through to the terminals), by promoting a number of initiatives ranging from mutual aid in the event of accidents to the training of and co-operation with the coastal states. Drills To maintain a high level of preparation for tackling emergencies, periodical drills are organized. In 2005 drills were promoted to simulate spills at sea and potential catastrophes (earthquakes, big fires etc.) in collaboration with the Coast Guard, the Navy, the Civil Protection (Sea) and other local authorities. In October Eni, summoning all business units, adhered to the EUROSOT, organized by the Civil Protection in collaboration with the European Union, entailing the simulation of a seismic event affecting the population and the industrial plants in Eastern Sicily.
Training In 2005 several training initiatives were promoted in relation to offshore and onshore emergencies. Subsequent to the Eni/Castalia agreement and under the sponsorship of the International Maritime Organization (IMO), workshops and seminars were organized in Italy (Venice, Cagliari, Brindisi) and abroad (Malta), focusing on the fight against sea pollution due to hydrocarbons and other hazardous substances. As for the fire prevention, seminars were held on Fires of Large Tanks (Livorno) and Hazardous Land Transport (Mantua).
51

Safety expenditure chiefly depends on the risk involved in production activities and on the related prevention and protection activities, which is why the expenditure levels of Enis divisions and companies may noticeably differ. In 2005 the overall safety expenditure equaled o391 million with an increase of 33.8% compared to the previous year. 57% of the total (o224 million) is represented by current expenditures which, weighed against 2004, have grown of 36%. Investments amount to o167 million, an increase of 31% compared to the previous year.
Safety expenditure by sector of activity 200 150 100 50
million euro
54% of the total most important expenditures refer to equipment and tools for safety (o221 million) and safety management (o120 million, equal to 30.6%). The distribution of safety expenditure among Enis six operational sectors shows the heavy share of Exploration & Production with 48% of the total whereas the other two Divisions shares are lower (5.1% by Gas & Power and 16.3% by Refining & Marketing). The petrochemical sectors contribution to the total safety expenditure is of 15.8% (o61.65 million) with Oilfield Services Construction and Engineering and the Other activities representing respectively 9.3% and 5.6% of the expenditure (o36.2 and o21.9 million). In 2005 the safety expenditure of the Exploration & Production Division amounted to o189 million, with an increase of 81% against the previous year. The increase is mainly due to the considerable growth of investments, which have more than doubled compared to 2004 (o135 million against o60 million of the previous year). Current expenditures, too, equalling o54 million, have experienced an increase of 22%. The largest share of the Divisions safety expenditure is related to equipment and tools (67.6% of the total expenditure): in 2005 investments added up to o120 million, equal to 63% of the total safety expenditure.
E&P - Safety expenditure breakdown for 2005 67.6% Equipment and tools 1.4% Individual Protection Devices 21.9% Safety management 4.0% Research & Development 0.3% Insurances 2.2% Legislative requirements 0.2% Communication 0.9% Training 1.5% Other E&P - Safety Expenditure 200 150 100 50
million euro
Gas & Power
Oilfield Other activities Services Construction and Engineering
2004 2005 Eni - Safety expenditure breakdown for 2005 54.0% Equipment and tools 3.4% Individual Protection Devices (DPI) 30.6% Safety Management 2.0% Research & Development 6.6% Insurances 1.3% Legislative requirements 0.2% Communication 1.0% Training 0.9% Other Eni - Safety expenditure and investments 500 375 250 125
million euro
2004
2005 Investments
2004
2005
52
Also current expenditures in safety management, equal to o38 million, represent a considerable share of the expenditure (20% of the total safety expenditure). In 2005 the safety expenditure in the Gas & Power Division amounted to o20 million with an increase of 11% compared to the previous year. The increase is mainly due to the growth of current expenditures (o12.3 million compared to o10.2 million in 2004), whereas investments have remained stable (o7.8 million). The largest expenditure share of the Division was spent on safety management (o7.7 million, equal to 38.5%) and equipment and tools (o7.5 million, equal to 37.5%). A further important category of expenditures is represented by insurance (o2.2 million), constituting 11% of the total safety expenditure.
In 2005 safety expenditure in the Refining & Marketing Division amounted to approximately o64 million, in line with the expenditure values of the previous year. The share of investments has raised (o53.5 million compared to o51.4 million in 2004) to the detriment of current expenditures which, in contrast, have dropped of 20% (o10.3 million in 2005). The investments in equipment and tools (equal to o53 million) represent the predominant share of safety expenditure of the Division (83% of the total). The current expenditures in safety management (o9.5 million) represent, on the contrary, the second most important category of expenditures (15% of the total expenditure).
G&P - Safety expenditure breakdown for 2005 37.5% Equipment and tools 9.0% Individual Protection Devices 38.5% Safety management 11.1% Insurances 1.0% Legislative requirements 0.2% Communication 2.6% Training 0.1% Other
R&M - Safety expenditure breakdown for 2005
82.9% Equipment and tools 0.2% Individual Protection Devices 15.0% Safety management 1.0% Legislative requirements 0.2% Training 0.7% Other
G&P - Safety expenditure 25 20 15

million euro
R&M - Safety expenditure 80 60 40

million euro
10 5 20
2004
2005 Investments
2004
2005
53
E N I H E A LT H S A F E T Y E N V I RO N M E N T R E P O R T 2 0 0 5 / E N E R G Y A N D E N V I R O N M E N TA L S U S TA I N A B I L I T Y
Energy and environmental sustainability
Energy
Enis total gross energy consumption in 2005 was 16,021 ktoe, a 20% increase over the previous year. Direct consumption of primary sources amounted to 14,106 ktoe, while purchases from third parties totaled 1,915 ktoe. This consumption increase was partly due to the start-up of new EniPower combined cycle cogeneration plants and partly to an increase in hydrocarbon production. The amount of net primary energy consumption is obtained by subtracting the primary energy sold as final energy to third parties from gross energy consumption; this gives 9,744 ktoe of net primary energy consumption, a slight increase over the previous year. In 2005 the fuel mix used was made up of 58.5% natural gas, 39.7% oil products (refinery and steam cracking gas, fuel oils and petcoke), and 1.9% other fuels. The share of natural gas increased over previous years (42.8% in 2003
Eni - Net energy consumption 10,000 7,500 5,000 2,500

ktoe
Eni - Share of gas and average emission factor 80 60 40 20

% tCO2/toe
4 3 2 1
2003
2004
2005
2003 2004 Share of natural gas in fuel mix
2005
Average emission factor of CO2 per toe used
54
and 52.6% in 2004) which led to a further reduction in the average CO2 emission factor per toe consumed (in 2004 this factor was 2.71 tCO2/toe and in 2005 it was 2.57). The principal end uses of energy are electric energy, steam, process heat and mechanical energy for pumping natural gas into the gas pipeline network and for fuelling ships. Enis energy consumption is concentrated in thermoelectric and cogeneration plants (31.1%), in chemical and petrochemical plants (23.9%), in hydrocarbon extraction processing plants (19.3%) and in refineries (18.2%). The energy consumption in gas compression plants and LNG carriers is relatively low (4.9%). The company placed great emphasis on energy saving: projects mainly concerned the construction of cogeneration power plants near its own refineries and chemical plants. Energy saving was also focused on the transport and gas distribution sectors where the use of new highly efficient turbines for gas compression resulted in a reduction of average specific energy consumption.
Power generation In 2005 EniPowers natural gas cogeneration plants produced 22.77 TWh of electrical energy and 10.66 million tonnes of steam. At the end of 2005 the installed capacity of the power plants was 4.5 gigawatts, an increase of 1.2 gigawatts over the preceding year. In the coming years Eni will reach 5.5 gigawatts of installed capacity and will be able to produce 30 TWh of electricity and cover more than 10% of power generation in Italy. The power plants are located in industrial installations (with significant electric energy and heat consumption)
Installed capacity of electricity generation 6.0 4.5 3.0 1.5

gigawatts
2002
2003
2004
2005
2009
Enis consumption of primary energy in 2005 (ktoe)

GROSS ENERGY CONSUMPTION 16,021
PURCHASES FROM THIRD PARTIES 1,915
GROSS CONSUMPTION OF PRIMARY SOURCES 14,106
ELECTRIC ENERGY 1,706
STEAM 208
HEAT 1
NATURAL GAS 8,173
OIL PRODUCTS 5,672
OTHER FUELS 261
SALES TO THIRD PARTIES 6,277 NET CONSUMPTION OF PRIMARY SOURCES HEAT 9 9,744
ELECTRIC ENERGY 5,949
STEAM 193
PRIMARY SOURCES 126
55
such as petrochemical plants and refineries, thus avoiding the energy loss from the transmission of electric energy through the network. All the power plants use combined cycle cogeneration technology and are therefore highly efficient in the conversion of electricity, compared to the average efficiency of the national thermo-electric power plants and also have lower emissions. The new plants are also characterized by very low specific CO2 and NOx emissions. The production of 30 TWh expected to start in 2008 will cut down approximately 11 million tonnes in emissions of CO2, compared to conventional plants.
In the E&P sector, energy is used for the extraction of hydrocarbons and their separation by components, for the power generation to run the plants and connected services, and for oil, water and gas treatment. The energy needed is produced on the spot generally using extracted natural gas (90.4% of the total energy consumption). The slight increase in the energy consumption indicator is attributed to the aging of the reservoirs. However, the ratio between energy consumed and energy produced is still less than 4%. Plans to reduce energy consumption are based mainly on improving drilling techniques.
E&P - Energy consumption indicator 40 30 20 10

toe/ktoe produced
2003
2004
2005
MANTOVA SpA POWER PLANT
The EniPower power plant in Mantua is located in the multi-company industrial area with the same name and also includes the Polimeri Europa petrochemical plant. The power plant produces electric energy and steam in two new combined cycle cogeneration plants, each
with a power capacity of approximately 390 MWe and fuelled by natural gas. The electric energy produced is fed into the RTN (the National Transmission Network) and partly sold directly to plants located within the industrial complex.
When the new combined cycle plants became commercially operational in 2005 it was possible to close the old units running on fuel oil; this should result in a reduction of about 1 million tonnes per year of CO2 per cogeneration unit for the same amount of electric energy
56
In the G&P sector, energy consumption is mainly due to the power generation by the cogeneration plants and, to a lesser extent, to gas compression in the pumping stations. With respect to the fuel mix used, in 2005 the proportion of natural gas (87.1%) increased over the previous years (58.1% in 2003 and 79.4% in 2004). EniPower power plants are, in fact, progressively replacing fuel oil with gas, thus increasing natural gas consumption in the Division (+44.3% in 2005 over 2004). Since the combined cycle cogeneration plants are highly efficient, energy consumption per MWh generated is at the today minimum for thermoelectric generation.
The gross energy consumption in the R&M sector in 2005 was 3.11 Mtoe, an increase of 4.7% over the previous year. With respect to the energy efficiency of refinery operations, the Energy Intensity Index shows a net drop from the year 2000. Although that index was lower than the European average at the beginning of this period, refineries still managed to further reduce specific energy consumption by about 10% over the last 6 years. This reduction is all the more significant in the light of the increased energy consumption required to reduce the benzene and sulphur content in fuel. Compared to refinery production output, specific primary energy consumption is about 9%.
Energy performance indicator of power plants 0.300 0.225 0.150 0.075

toe consumed/MWheq produced
Energy Intensity Index Eni Refineries 100 75 50 25

%
2003
2004
2005
1999 2000 2001 2002 2003 2004 2005
produced by traditional thermoelectric plants. An old conventional unit of 56 MWe fuelled by natural gas is kept as
cold reserve to be used during maintenance of the new combined cycle plants. The new plants are equipped with a
condensed air cooling system, thus reducing the consumption of freshwater drawn from local resources.
Our audit of the Mantova plant allowed us to assess the benefits achieved in terms of overall energy efficiency of the plant, despite the fact that the combined cycles were not yet functioning at full capacity. The increase in efficiency is determined particularly by the heat recovered, which is subsequently used to produce steam sold to other plants and which, in future, will also be fed into the district heating network. URS Italia SpA
57
Air
In 2005 greenhouse gas emissions increased slightly over 2004 levels; the emissions of the major pollutants, however, remained in line with 2004 levels or decreased. The relevant performance indicators, which compare absolute emission values to associated energy consumption, are falling, evidence of Enis commitment to reduce its own emissions. The emission factor of CO2 from energy consumption per toe used is 2.57 t/toe, a decrease of 5.1% compared to 2004, thanks to the greater proportion of gas used in the fuel mix. The acidification potential (aggregating NOx and SO2 emissions) was 142.3 kt of SO2 eq, a decrease of 15.7% with respect to the previous year, consequent upon the two plants for flue gas treatment in the refineries of Gela and Sannazzaro becoming fully operational.
Eni - Acidification potential 200 150 100 50

kt SO2 eq
Eni - Acidification potential indicator 0.020 0.015 0.010 0.005

kt SO2 eq/ktoe consumed
2003
2004
2005
2003
2004
2005
THE SANNAZZARO REFINERY
The Sannazzaro Refinery of the Refining and Marketing Division is located 26 km from Pavia and occupies an area of approximately 220 hectares in the municipalities of Sannazzaro de Burgondi and Ferrera Erbognone. Established in 1963 with a capacity of 5 million tonnes per year, it doubled its production in 1975, was restructured in 1988 and 1992 and in recent years made significant improvements to its refining technology. Today the refinery has a crude oil processing capacity of 10 million tonnes per year and claims one of the highest levels of complexity
and conversion capacity of any in Europe. The refinery management policy is characterized by its constant attention to the needs of the territory. In order to best manage the HSE impact of its own activities, it adopted a complex Safety management System and an Environmental Management System certified in December 2002 according to the ISO 14001 standard. Certification was confirmed at the end of November 2004 after audit by the designated verifier. During 2006 all steps for obtaining EMAS registration should be completed.
In pursuit of its environmental protection goals, the refinery has made large investments aimed at reducing atmospheric emissions. These emissions are linked to the refinerys need to cover part of its energy requirements by burning gas and fuel oil produced by its own processing cycle. In order to minimize these emissions, refinery gases are desulphurized in apposite washing units before use, while smaller quantities of fuel oil with relatively modest quantities of sulphur are used. Among the investments made within the framework of the RefinARS project, is the innovative plant for the washing
58
Particulate emissions (SPM) of 4,593 t remained in line with 2004 levels. Emissions of non methane volatile organic compounds (NMVOC) decreased by 12.7% compared to the previous year, especially because of the reduction of venting emissions. In 2005 total GHG emissions, including CO2 from energy consumption and the emissions of CO2 eq from flaring and venting and methane (the latter calculated according to its global warming potential of 21) amounted to 61.9 Mt of CO2 eq, an increase of 6% over the previous year.
In particular, the emissions of CO2 eq from flaring and venting, representing 33.7% of total GHG emissions, decreased by 2% compared to 2004 despite a 7% increase in hydrocarbon production. This reduction is the result of the continuing program of Zero Gas Flaring and the abatement of venting. In this framework Eni inaugurated the Okpai electricity generation plant in 2005 in Nigeria, in line with its goal to reduce flaring emissions drastically by 2008.
Eni - Total GHG emissions 80 60 40 20

Mt CO2 eq
Eni - GHG indicator 6.0 4.5 3.0 1.5

kt CO2 eq/ktoe consumed
2003
2004
2005
2003
2004
2005
including: flaring and venting
of combustion gases produced by the catalytic cracking for the abatement of stack emissions of sulphur dioxide and the subsequent recovery of elemental sulphur to be sold. Equally important was the start-up of the new plant, on 17 April 2006, for the gasification of heavy residues produced by the refinery; this will lead to an increase in conversion capacity
and to the elimination of the production of fuel oil. The plant has an annual capacity of 400 thousand tonnes and produces annually 900 million cubic meters of synthetic gas (Syngas). This is to be used to fuel a power generation capacity of 200 MW at the nearby EniPower plant, with efficiency much higher than those obtainable from fuel oil. The plant also produces annually
300 million cubic meters of hydrogen used in hydro processing, particularly to produce diesel fuel with a very low sulphur content. The elimination of fuel oil production will also result in a reduction in the traffic of the approximately 20,000 tanker trucks leaving the refinery every year.
The containment of atmospheric emissions is central to HSE commitments made by the Sannazzaro Refinery with respect to the territory in which it is located. During inspection we were able to assess the benefits obtained in terms of reducing SOx emissions following the start-up in September 2003 of the plant for treating flue gases produced by fluid catalytic cracking. In this RefinARS project, technology is applied to treat combustion gases produced by the regeneration of the catalyst, a Best Available Technology for which the refinery has received funding from the EC Life Environment fund. URS Italia SpA
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GHG emissions in the E&P sector were 32.95 Mt of CO2 eq in line with 2004 levels, despite the increase of 5.3% in net operated hydrocarbon production over the previous year. Emissions of SO2 and NOx (aggregated in the acidification potential) were 63.7 kt of SO2 eq. The largest proportion of atmospheric emissions (about 2/3 of the total) is the result of gas flaring and venting. In order to reduce these emissions, plants for gas liquefaction and reinjection of associated gases will be built. Plans are going ahead for the sequestration of CO2 in saline aquifers or depleted reservoirs with long term monitoring systems.
In 2005 GHG emissions in the G&P sector were 13.7 Mt of CO2 eq, an increase of 31% over 2004. This increase is to be linked to increased electricity generation by the EniPower power stations. The specific emission factor of 2.37 tCO2/toe used has decreased by 4.5% from 2004, because the new combined cycles of the power plants use natural gas as a primary fuel. The acidification potential of 19.4 kt of SO2 eq has fallen by 5.6% from the previous year, again as a result of the use of a fuel mix with a high proportion of gas (79.4%) and fuel oil with low sulphur content.
E&P - Total GHG emissions 40 30 20 10

Mt CO2 eq
G&P - Total GHG emissions 40 30 20 10

Mt CO2 eq
2003
2004
2005
2003
2004
2005
including: flaring and venting
Sulphur balance in refining 2003 402,323 4.0 42.1 53.1 0.9 2004 467,913 3.4 41.5 55.2 (0.1) 2005 506,352 2.6 42.1 55.0 0.4
Incoming sulphur Sulphur in SO2 emissions Sulphur in products Elemental sulphur Unaccounted quantities
(t) (%) (%) (%) (%)
E&P IN TUNISIA
Eni has operated in Tunisia since the sixties when it set up a joint company with the Tunisian Government for the exploitation of the onshore field of el Borma. Today, through the Eni Tunisia company controlled by the Exploration & Production Division, it operates three concessions for the exploration and production of both crude oil
and gas. In the Oued Zar and Adam concessions, where exploration and production activities are under way, there are 18 production wells: 16 oil and gas wells and 2 gas wells. Oil and gas are processed in three oil separation lines and at a plant for the processing and compression of gas. At the Djebel Grouz
concession (the most recent) today there is only one active oil and gas well and a hydrocarbon processing plant. At the Oued Zar field, the oil produced (around 80% of the total hydrocarbon production) is stored in 2 above ground storage tanks and piped to the Trapsa company (managed by the Tunisian Government). 60% of the
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Atmospheric emissions of CO2 in the R&M sector amounted to 8.12 Mt of CO2 eq in line with 2004 levels. The total emissions derive from refinery combustion processes and emissions from storage and product handling, from effluent processing and fugitive emissions from processing plants. In recent years the emissions of SO2 and NOx have been drastically reduced. The RefinARS project, aimed at reducing the environmental impact of the fluid catalytic cracking plants (FCC - Fluid Catalytic Cracking) by processing flue gases, has managed to halve the nitrogen oxide and sulphur emissions from FCC. In 2005 the total acidification potential was 32.9 kt of SO2 eq, a 17% decrease from the previous year.
The production of fuels with ever decreasing sulphur content has meant that refineries must improve the efficiency of the desulphurization process, without increasing SO2 emissions into the atmosphere.
R&M - Total GHG emissions 40 30 20 10
Mt CO2 eq
2003
2004
2005
Atmospheric emissions in 2005 GHG

(MtCO2 eq)
Acidification potential
(t SO2 eq)
SPM
(t)
NMVOC
(t)
Exploration & Production Gas & Power Refining & Marketing Petrochemicals Oilfield Services Construction and Engineering Other activities Eni total % Variation with respect to 2004
32.95 13.74 8.12 4.04 0.95 2.13 61.93 6.1
63,710 19,433 32,881 5,071 13,005 8,236 142,336 (15.7)
2,245 490 1,099 134 537 88 4,593 2.0
92,359 196 13,653 5,299 1,024 172 112,703 (12.7)
gas extracted is sent by gas pipeline to Transmed and 10% is used as fuel gas for the field production plants and the final
remaining 30% is flared off. In order to reduce the quantity of flared gas, Eni is conducting tests on the reinjection of gas with
positive results and there are plans to double the gas pipeline connecting Oued Zar to el Borma in the next two years.
The channeling of the gas generated by hydrocarbon extraction to storage structures and transport is not only a solution for the rational and efficient use of natural resources but is also an instrument for the curbing of flaring. A recent World Bank study estimated that CO2 emissions from flaring account for about 13% of the reduction commitments of the industrialized countries under the Kyoto Protocol for the 2008-2012 period. Checks carried out at the Oued Zar field verified Enis commitment to limit atmospheric emissions by controlling the proportion of gas flared and its progressive abatement through management projects of the gas produced. URS Italia SpA
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Water
Enis total consumption in 2005 was 3,105 Mm3, a 6.0% drop from the levels of the previous year. 92% of the water was seawater used mainly for thermal exchanges in production processes (condensers in the thermoelectrical plants, regasification of LNG, etc.). Freshwater consumption of 256 Mm3 fell 6.4% from 2004. With regard to water treatment, the volumes treated in 2005 amounted to 232 Mm3, a decrease of 9.6% from the previous year because of the closing of some production activities. The water purified internally at Eni business units amounting to 170 Mm3, represented 73% of the total while the remaining 27% was treated by service companies. The COD parameter increased by 14% over the previous year. In the E&P sector most of the water consumption is associated with extraction activities where water is injected into the oilfields to guarantee an adequate pressure level. About 42% of the water drawn is seawater used for cooling the torches of some offshore plants.
For the purpose of reducing the consumption of freshwater, a project is underway in Libya for the reinjection of formation water after it has been treated internally. Overall water consumption in 2005 amounted to 77.7 Mm3. The formation oily water (water associated with oil extraction) is the main waste to be disposed of. During 2005 more than 40% of this oily water was reinjected back into the oilfield from which it came or into geological strata suitable for such storage. The total volume of water treated was 26.7 Mm3, a drop of 8.6% from the year 2004.
Eni - Water discharged - COD 20 15 10 5
thousand tonnes
2003
2004
2005
Eni - Water consumption 4,000 3,000 2,000 1,000

million m3
E&P - Water consumption 80 60 40 20

million m3
2003 Freshwater Seawater
2004
2005 Freshwater Seawater (1)
2003
2004
2005
(1) No data available for 2003.
E&P IN THE ADRIATIC SEA
The offshore platform Barbara C, managed by the UGIT unit of the Exploration & Production Division is located in the Adriatic Sea about 60 km off the coast from Ancona. The installation includes the mother platform of the production field for gas called Barbara, to which gas extracted from the 17 connecting platforms is
transferred. The gas collected is sent to the plant in Falconara via sealine fed by two compression terminals. The energy requirements of the compression terminals and of some of the platform equipment are met by the same extracted gas. In 2005 the E&P Division began a project of applied research and
development of measurement techniques of fugitive emissions, in order to account for the quantities of methane and other volatile hydrocarbons (VOC) emitted into the atmosphere and to improve the estimation methods currently in use. The first measurement campaign took place at the production sites of Fano and Val
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Seawater accounted for 95.2% of water consumption in the G&P sector, used mostly to cool the power stations of EniPower and as ballast water for LNG carriers. The total consumption in 2005 was 515.5 Mm3, a reduction of 4.1% compared to the previous year. In 2005, a volume of 34.0 Mm3 of water was discharged, a 9.8% drop from the previous year as a consequence of the sale to third parties of water purification activity. The discharges mainly concerned the treatment of ship ballast water and waters used for cooling power plants.
The main water withdrawals in the R&M sector were seawater (97.3% of all water withdrawn) used in the cooling of refinery thermoelectric plants. The total consumption decreased by 5.2% compared to the previous year. With respect to water discharge, in 2005 its volume was 109.6 Mm3, an increase of 19.8% over 2004, following the start-up of groundwater treatment plants. The pollutants contained in the wastewater were found to be very limited because of the adoption of efficient effluent treatment plants.
G&P - Water consumption 700 525 350 175

million m
3
R&M - Water consumption 1,200 900 600 300

million m3
2004
2003
2004
2005
Water consumption and treatment 2005 Total water consumption 77.68 515.53 1,022.46 1,067.17 28.08 394.12 3,105.03 (6.0) including seawater 32.48 490.53 994.85 948.84 24.12 357.90 2,848.72 (6.0)
(million cubic meters)
Exploration & Production Gas & Power Refining & Marketing Petrochemicals Oilfield Services Construction and Engineering Other activities Eni total % Variation with respect to 2004
including freshwater 45.20 25.00 27.61 118.33 3.96 36.20 256.30 (6.4)
Treated water 26.70 34.02 109.59 30.19 0.01 31.49 232.00 (9.6)
dAgri and in the Barbara field. The purpose of the study is to improve both the standard methodologies (EPA21) and the innovative ones based on optic
remote sensing systems. The development of remote measuring techniques will simplify and make emission measuring more economically
feasible. Measuring and control will then be done more frequently and included in the HSE activities programs of the production sites.
Offshore discharges of process liquids are among the main points of HSE focus for operational activities on offshore platforms. The inspection on the Barbara C revealed the presence of an active carbon treatment plant, which separates hydrocarbons from suspended materials. Water is discharged into the sea after filtration and reaches quality standards higher than the limits prescribed by law. The discharges are periodically monitored by ICRAM and Legambiente. URS Italia SpA
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Habitat, territory and landscape

Waste Eni produced 4,883 kt of hazardous and non hazardous waste in 2005, a 23.5% increase over the previous year. It should be noted, however, that waste production comes from two distinctly different sources.
The production of waste deriving from industrial activities was 1,551 kt (32% of the total) and is practically identical to that of the previous year. There is a net increase, on the contrary, in the production of waste deriving from Enis remediation
Eni - Final destination of waste from production activities 2005
Eni - Total waste 3,000 2,250 1,500 750 Hazardous 2003 Non hazardous Hazardous 2004 2005 including remediation and groundwater including remediation and groundwater Reused 17.2% Incinerated 20.6% Disposed of in landfills 17.2% Other 45.0% Non hazardous 19.4% Reused 0.8% Incinerated 42.8% Disposed of in landfills 37.0% Other
thousand tonnes
Waste 2005
Hazardous waste Non hazardous waste
(tonnes)
Total waste
150,628 21,269 1,169,409 317,703 17,611 337,093 2,013,713
715,026 129,666 104,006 77,666 47,070 1,796,194 2,869,628
865,654 150,935 1,273,415 395,369 64,681 2,133,287 4,883,341
PRAOIL - MICROTUNNEL
The Praoil company of the Refining and Marketing Division operates in the overland transport sector for crude and finished products, through an integrated system composed of a network of its own and third party oil pipelines, pumping stations and depots. Among the latter is the coastal depot at Genoa Pegli built in the Sixties and composed of an active tanks group (the Fondega north area)
and of one which is being dismantled (the Fondega south area), with a total capacity of 390,000 m3 covering a surface area of 280,000 m2 in a highly urbanized context. The depot is one of the terminals involved in the Genoa Debottlenecking project aimed at rationalizing the oil transport system by setting up a new link between the depot and the Petroli Port of Genoa Multedo.
The link consists of a bundle of pipes with 6 new steel pipes and a new Booster pump room to provide enough pressure to overcome the difference in height between the two depots. The new pipes have now been laid, for the first time in Europe, inside a curved microtunnel 640-meters long with an internal diameter of 2.60 meters, using advanced civil and mechanical engineering technology.
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activities and groundwater treatment, even on sites which Eni has purchased from other companies and where it had never been involved directly. 3,332 kt were produced in 2005, an increase of 34% over the previous year. Remediation and restoration Eni has launched a demanding plan for territorial protection, decontamination of soil and groundwater, which includes recourse to the best available technologies. Remediation activities are broken down into the following phases: project definition, through preliminary environmental analysis, the characterization plan, the drafting of preliminary and final plans; obtaining authorizations from public authorities; carrying out the project, taking into account all prescriptions received during the course of the preliminary phase; obtaining certification on completion of remediation; reporting and control in all phases of the process.
Specific experience has been acquired in the finalization of innovative technologies for preventing pollution and decontamination of soil and groundwater, through actions ranging from the determination of the state of site contamination to sanitary and environmental risk assessment and remediation actions. In this field such innovative techniques as phytoremediation, reactive permeable barriers, wind bioventing and bioaugmentation were developed. Just as important is Enis commitment in the sector of environmental restoration. On completion of activities the closing of an oil well, or a construction site, or laying a pipeline or plant decommissioning, Eni fulfills its commitment to restoring the territory to its pre-existent state and, where possible, to decontaminate the industrial area and requalify the environment.
Expenditure for soil protection 2005

Remediation Restoration
(million euro)
Total
12.6 12.3 121.1 22.4 0.2 164.4 333.0
4.4 47.6 7.1 0.0 0.1 0.0 59.2
17.0 59.9 128.2 22.4 0.3 164.4 392.2
The Trenchless technology for the laying of the pipes allowed work to proceed without disturbing other works in progress in that area and overcame any possible morphological and urban
difficulties. Social costs and environmental problems usually associated with the carrying out of important civil works were eliminated through the use of this technology. Life in the western part of Genoa proceeded
normally while, deep under the earth, bundles of pipes were being laid which the environment will benefit from, as the old structures are dismantled.
The territorys acceptance of big infrastructural works is strongly limited today by the possibility of minimizing social and environmental impact. We are convinced that in the case of the Genoa Debottlenecking project, the innovative technologies employed in carrying out the works were a determining factor in overcoming considerable morphological, urbanistic and environmental difficulties in the rationalization and modernization of pre-existing structures. URS Italia SpA
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In the field of environmental restoration Eni has gained a large experience in laying methane gas pipelines which foresees the combined actions of mitigation and environmental restoration to respect the local habitat. The route planned for the gas pipeline takes into consideration various alternatives based on environmental impact, transport safety and technical and economic feasibility. Once the pipeline is laid, a careful restoration takes place to return the site to its original state. In 2005 soil protection expenditure amounted to o392.2 million, a 52% increase over 2004. Expenditure for remediation activities accounted for o333 million and environmental restoration expenditure for o59.2 million. The major expenditures relate to the activities of the R&M and Other activities sectors for remediation and to the Gas & Power sector for environmental restoration. In terms of remediation activities, the demanding remediation projects initiated at the active sites of Syndial at Assemini, Porto Torres and Porto Marghera and for the decommissioned site of Cengio caused a large increase over 2004 (+42%) in remediation expenditure sustained by Syndial.
In 2005 waste production in the E&P Division rose by 25.5% over 2004, due to greater quantities of waste coming from building sites for new plants in Kazakhstan. In order to reduce the amount of waste resulting from production activities, which includes waste from the decommissioning of platforms, the E&P Division is studying uses for platforms alternative to removing them. As far as drilling wastes are concerned, technologies are used such as slim hole drilling and closed circuit systems in perforation plants for the separation, treatment and recycling of water deriving from mud dehydration and recovery of water-based mud and inert cuttings.
E&P - Waste produced 1.00 0.75 0.50 0.25

million tonnes
2003 Non hazardous Hazardous
2004
2005
REMEDIATION OF CENGIO
The remediation of the ACNA of Cengio is one of the most demanding remediation projects. Industrial activity began on this site at the end of 1800 with various types of industrial production over the years (explosives, chemical intermediates for dyes and pharmaceuticals). Eni came into possession of the site in 1989 through the merger with Montedison. Since 1999 the site has been inactive and a Special Commissioner was nominated that year to deal with the socio-
environmental emergency of the area. In 2000 a Program Agreement was signed by the company, by the regions of Liguria and Piedmont, and by the Ministries for the Environment, for Industry and for Internal Affairs. The Agreement establishes the timing for site environmental restoration, re-industrialization and new job creation in the Bormida Valley, and sets the priorities for implementing emergency safety measures and guidelines for fundamental intervention in the areas in which
the site is divided up, according to the type of end use foreseen. These activities include remediation of contaminated areas and disposing of saline wastes stored in lagoons in the industrial area of Cengio. The site was initially characterized through soil and groundwater analysis in order to evaluate the degree and extent of contamination. The remediation was divided into the following activities: the implementation of emergency safety measures relating to the storage basins of
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In 2005 the G&P Division showed a considerable drop in waste production (-34.2%) mostly as a result of the completion of construction works for the new turbogas units for EniPower plants. In 2004, this work involved the production of great quantities of earth and rocks from excavations. Among the particularly important soil protection actions of the Division is the restoration after the laying of the gas pipelines, in order to return the site to its original state. In 2005 restoration work continued following the laying of gas pipelines of earlier years and there was consequently a large increase (+67.9%) in expenditure related to this work.
Total waste production for the R&M Division in 2005 increased by 25.6% over 2004 levels. This increase was caused by remediation activities and orders issued by authorities monitoring the works in progress. At the Gela refinery a groundwater treatment plant started up and this meant the production of a large amount of hazardous waste. The expenditure sustained for remediation and restoration was double compared to 2004, reaching o128 million, following the start-up of large remediation projects for the decommissioned sites of Rho, Ravenna, Bari and Fornovo and for former sales points of the network and environmental interventions at refineries.
G&P - Waste produced 240 180 120 60

thousand tonnes
R&M - Waste produced 1.40 1.05 0.70 0.35

million tonnes
2004
2005
2004
2005
saline waste accumulated on site, by means of a specific treatment of the salts and subsequent transport of the resulting product to its final destination, a salt mine in Germany. This activity is expected to be completed by 2006; implementation of on-site safety measures against hydraulic risk by installing a system of containment to protect the site from unusual flooding, and for offtakes of underground waters and subsequent channeling of percolate to the on-site water
treatment plant. The activities were finished in October 2005; implementation of emergency safety measures for industrial wastes deposited in the riverbed against the containment wall of the plant, with transfer of the same together with the contaminated soil to a suitable area within the site; implementation of permanent safety measures in an area, characterized by the presence of wastes accumulated over time, including wastes and contaminated soil originating from remediation works in other areas of the site. In 2006 the final
project for this intervention was approved and is expected to be completed in 4 years; remediation with safety measures for an area divided into lots so that individual areas will become progressively usable and assigned to industrial production use. Plant decommissioning is now underway and buildings demolition should be completed by 2006. Remediation of the first lot has already been accomplished and it is now occupied by CESTA, a research center for environmental studies.
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In 2005 environmental expenditure amounted to o1,066 million, a considerable increase over 2004 (33%). This increase was due to growing commitments in environmental protection and especially to intense remediation activities, but also to improvements in the accounting system, which resulted in more complete account. The current expenditure amounted to o690 million (65% of the total) of which the many remediation projects accounted for 41% (o285 million for 2005).
Eni - Environmental expenditure 360 270 180 90
million euro
There were also high expenditures for waste treatment (around o155 million), water treatment (o83 million) and for environmental management and related activities (o125 million). Investments amounted to over o375 million, representing an increase of 47% over 2004. The most important investments regarded water management (o60 million) and soil and subsoil protection (o49 million). A sector breakdown of environmental expenditure shows Other activities accounting for 31% of the total expenditure, as it includes the Syndial activities, which in 2005 sustained expenditures of almost o319 million for environmental protection (especially site remediation activities). In 2005 environmental expenditure for the exploration & production sector ran to o232 million, a 49% increase over 2004. This increase is attributed to investments (about o148 million) which rose by 85%. As previously emphasized, there was an improvement during 2005 in the accounting of environmental expenditure in some of the subsidiary companies abroad. Part of the investments for the construction of new plants was allocated to environmental protection.
Gas & Power
Oilfield Other activities Services Construction and Engineering
2004 2005
Eni - Environmental expenditure and investments 1,200 900 600 300

million euro
E&P - Environmental expenditure and investments 320 240 160 80

million euro
2004
2005 Investments
2004
2005
Eni - Environmental expenditure breakdown for 2005 5.8% Air 13.5% Water 15.6% Waste 31.2% Soil and remediation 0.4% Noise 5.6% Environmental restoration 1.2% R&D 7.6% Environmental management 0.1% Communication 0.1% Training 18.9% Other
E&P - Environmental expenditure breakdown for 2005 4.6% Air 5.9% Water 11.3% Waste 5.4% Soil and remediation 0.1% Noise 1.9% Environmental restoration 1.5% R&D 15.5% Environmental management 0.2% Communication 0.5% Training 53.1% Other
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There were significant expenditures for environmental management (o36 million), for waste management (o26 million) and water management (almost o14 million) and for air protection (about o11 million). In the gas & power sector, environmental protection expenditure was approximately o98 million in 2005, a rise of 24% over the previous year. This increase is attributed to investments which rose from o56 million in 2004 to o75 million in 2005 and account for 77% of the total environmental expenditure. The most important investments (55% of the total) relate to activities for landscape protection and environmental restoration carried out by Snam Rete Gas after the laying and maintenance of gas pipelines. Another large item covers interventions for the protection and prevention of contamination of soil and subsoil (15% of the total investment) mostly carried out by Italgas, which is remediating several sites within the framework of the project for the requalification of industrial areas used in the past for the production of town gas. The current expenditure of about o23 million remained stable with respect to 2004 and is mostly represented by management expenditure (30%) and landscape protection expenditure (28%).
The economic commitment of the refining & marketing sector for environmental protection was high again in 2005, with expenditures of o293 million, representing 27% of Enis total environmental protection expenditure. This represents an increase of 24% over 2004 and is particularly due to the increase in current expenditure relating to intense soil and groundwater remediation and to the installation of double walls for tanks. This item accounts for 41% of the total environmental expenditure of the division. Also significant are the expenditures for wastewater management for which investments of o52 million were made. Also noteworthy is the sectors commitment to air protection measures (o20 million investment and o4 million for current expenditure).
G&P - Environmental expenditure and investments 320 240 160 80

million euro
R&M - Environmental expenditure and investments 320 240 160 80

million euro
2004
2005 Investments
2004
2005
G&P - Environmental expenditure breakdown for 2005 10.6% Air 1.7% Water 3.6% Waste 12.6% Soil and remediation 1.1% Noise 48.7% Environmental restoration 0.2% R&D 7.4% Environmental management 0.1% Communication 0.2% Training 13.8% Other
R&M - Environmental expenditure breakdown for 2005 8.5% Air 21.1% Water 5.4% Waste 41.2% Soil and remediation 2.4% Environmental restoration 1.9% R&D 0.1% Environmental management 19.4% Other
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E N I H E A LT H S A F E T Y E N V I RO N M E N T R E P O R T 2 0 0 5 / C A P I TO LO
Titolo 1 livello
Our commitments
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E N I H E A LT H SA F E T Y E N V I RO N M E N T R E P O R T 2 0 0 5 / O U R C O M M I T M E N T S
Climate change and energy

Climate change and possible solutions The environment is becoming an increasingly important factor in the evolution of energy systems, with predictable impact on the mix of primary sources and on the quality of end energy products as well as on the development of conversion technologies and energy use. The environmental factor must be reconciled with other goals of energy policy, in particular, with the reliability and reasonable costs of supply. The interactions among these factors are complex and can determine, depending on the circumstances, synergies or conflicts. For example, if the security of supply were considered at risk, a greater demand for environmental quality, while reducing the cost differential compared to cleaner alternative sources, could stimulate diversification towards those sources. In the energy context, the environmental driver has many facets (climate change, the environmental footprint of the entire production-end use cycle, air quality in large metropolitan areas, etc.) and each one has its own degree of importance. Climate change and greenhouse gases (GHG), among which the main role is attributed to carbon dioxide (CO2) produced by the combustion of fossil fuels, represent a global environmental issue, both because they involve the atmosphere a global public asset and because they can impact heavily upon the ecosystem, on economies, on populations and on future generations. It is for this reason that climate change has become a high priority issue on the international environmental and energy agendas regardless of energy crises and the inevitable reactions generated by response policies to global challenges. In fact, plans for response to climate change affect fossil fuels which, for the near future, will remain the largest component of world energy consumption, in order to guarantee the consumers standard of living. Climate change appeared on the international agenda a few decades ago. After the Kyoto Protocol took effect on 16 February 2005 and following decisions made by the Conference of the Parties in Montreal last December, it can be stated that climate change has become, and will remain, the most important environmental issue for the evolution of the energy sector. As far as the energy sector is concerned, response policies to climate change are based on the internalization of CO2 emissions generated by the combustion of fossil fuels since, in order to reduce these emissions, market instruments can be more effective than the traditional command & control. To this end, in addition to the classic instruments taxes and incentives innovative market instruments are being introduced with the aim of placing limits on the emissions of the great emitters (both countries and industrial installations) and of reducing the cost gap of the sources with the lowest emissions of CO2. There are numerous new market instruments being introduced or proposed. CARBON EMISSION RIGHTS Attributed by the Kyoto Protocol to the individual countries listed in Annex I which have committed to limiting emissions in the first compliance period of 2008-2012. For this purpose the Kyoto Protocol introduced the so-called Kyoto values, all expressed in tCO2: AAU (Assigned Amount Units); CER (Certified Emission Reduction Units) and ERU (Emission Reduction Units), which can be acquired through projects of greenhouse gas reduction through the flexible CDM (Clean Development Mechanism) and JI (Joint Implementation) mechanisms and the RMU (ReMoval Unit) obtainable through forestation and reforestation projects. To fulfill the Kyoto commitments, CER, ERU and RMU have the same value as AAU. EMISSION TRADING Some of the countries listed in Annex I, and, in particular, the European Union, introduced a system of Emission Trading based on the cap and trade mechanism for installations in some energy intensive industrial sectors. EU Allowances (EUA) for emissions equal to cap are assigned annually to individual installations and each year they must return EUA equal to the amount of actual emissions verified by an independent certifier. If the actual emissions are lower than the cap, the unused EUA remaining after restitution acquires an economic value. In the opposite case, when actual emissions are higher than the cap, the installation must buy the missing EUA in the market in order to surrender them. AUCTIONING EMISSION RIGHTS Current systems of Emission Trading initially provide for the free assignment of emission quotas. In a second phase, however, part of this quota could be assigned through auction whereby an upfront cost for emissions is attributed regardless of whether or not it respects the cap. GREEN CERTIFICATES Green certificates were introduced in some countries for the purpose of fostering growth
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E N I H E A LT H S A F E T Y E N V I RO N M E N T R E P O R T 2 0 0 5 / O U R C O M M I T M E N T S
of production quotas from renewable sources and high efficiency cogeneration. Electricity producers are asked to hold a quantity of green certificates commensurate with their own production capacity. These must be purchased in the market if they are not acquired through the installation of electric capacity that entitles the producers to green certificates. WHITE CERTIFICATES White certificates cover the distribution of electric energy and natural gas. Distributors are requested to hold a number of white certificates commensurate with the energy distributed. These must be acquired on the market if they are not acquired through energy saving projects with end users. YELLOW CERTIFICATES These certificates do not yet exist but they have been postulated to ensure that a fuel quota for road transport is covered by biofuels. VOUCHERS - TAXES This mechanism is at the proposal stage. It is aimed at encouraging maximum efficiency in the end use of energy and is based on the assignment of a coupon for those who chose the most efficient technology (for example, class A refrigerators or low emission cars) and it can be used to reduce taxable income for value-added tax calculations or income tax. GREEN PRICING Through this mechanism a price differential is attributed to an energy product according to its source.
Greenhouse gases (GHG) As the name suggests, the action of greenhouse gases is to trap heat in the earths atmosphere and therefore affect its average temperature with a global warming potential depending upon the nature of gas. The relevant greenhouse gases for the energy sector are, in order, CO2, CH4 and N2O. As their concentration increases in the atmosphere, so does their contribution to raising the average global temperature. The concentration of greenhouse gases in the atmosphere has risen constantly since the beginning of the industrial revolution and, together with this, so has the average global temperature. In the past it was the developed countries that contributed to this rise but, in future, the contribution of the developing countries will grow and become predominant. In the Third Assessment Report (2000) the IPCC declared that there is new and stronger evidence that the greater part of global warming observed over the last 50 years is attributable to human activities. The average global temperature rose by 0.6 C in the last century. The later emissions of CO2 already in the atmosphere, following the delayed response of the climate system, suggest that the increase will inevitably rise to 1.3 C. Compared to other greenhouse gases, CO2 is responsible for about 80% of global warming and this percentage is bound to increase if the use of fossil fuels
ENI IN NIGERIA
Eni began research operations in the Niger Delta as far back as 1962 and, in 1973, was the first company to set up a joint venture with the national government for the exploitation of oil concessions. Since then it has been active in the country in hydrocarbon exploration and production operations through its NAOC, NAE and AENR subsidiaries controlled by the Exploration & Production Division. NAOC, in particular, is involved in exploration and production operations in two areas called
Land Area and Swamp Area, and in 4 oil concessions: OML 60, OML 61, OML 62 and OML 63. Within the framework of the Zero Gas Flaring program is the Nigerian government and Eni project for the Okpai electric power plant (Delta State) in joint venture with the Nigerian state company, NNPC, and with ConocoPhillips, in which Eni participates as operator with a 20% share. Inaugurated on 1 April 2005 the plant is a 480 MWe combined cycle fuelled by associated gas coming from the Kwale Gas Plant and provides the
electric energy to the national grid from the Onitsha (Anambra State) power station. The power plant allows an annual global reduction of CO2 of about 1.5 Mt (a quantity corresponding to the Eni share of 0.3 Mt of CO2). The energy supplied represents 13% of the energy produced in Nigeria. From 2002 to 2005 NAOC went from 2 to 5 gas liquefaction trains in the Land Area becoming productive in November 2005 and February 2006 respectively. This brings the total capacity of the Bonny liquefaction plant to
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continues at it present rate. The concentration of CO2 in the atmosphere has reached 379 ppm compared to the pre-industrial value of 280 ppm, it increases by approximately 2 ppm per year and to it must be added the annual increase of 1 ppm of the other greenhouse gases. Scientists agree that it is necessary to keep the rise in average global temperature under 2 C, which corresponds to a concentration of CO2 of no more than 550 ppm. Implementation of the Kyoto Protocol The regulatory process in support of the mitigation of GHG emissions is a continuous and ongoing process, in which the fundamental phases are: 1992: Signature of the Framework Convention on Climate Change (UNFCCC), which sets the objective of the stabilization of concentration of greenhouse gases in the atmosphere at a level such as to prevent anthropogenic damage to the climate (art. 2); 1997: Signature of the Kyoto Protocol, which sets quantitative objectives for the reduction or limitation of GHG emissions for the countries included in Annex I; 2002: The Marrakech Agreements (COP 7), initiating the implementation of the Flexible Mechanisms of the Kyoto Protocol (in particular, the Clean Development Mechanism);
16 February 2005: the Kyoto Protocol became effective following ratification by Russia; 2006: the Montreal Conference (COP 11), actuating the Joint Implementation flexible mechanism and dialogue among the Parties on the objectives for the second commitment period 2013-2017. Dialogue on the second period (post Kyoto) can be facilitated if fairness of commitments and gradual involvement of non Annex I countries can be guaranteed and if instruments which will not inhibit economic growth can be identified. The convergence of intents is more easily achievable on no-regret measures characterized by specific low costs per unit for emission reduction (for example, energy efficiency). The new market instruments mentioned above, and especially the flexible mechanisms, can play an important role in fostering consensus on commitments which will, in any case, be onerous. Possible reductions in GHG emissions The main actions for the reduction of greenhouse gas emissions and of CO2 in particular are the following: use of fossil fuels with lower carbon content; CO2-free energy sources; more efficient energy technologies for conversion and end use; Emission Trading;
16.8 Mt per year of LNG. The project aims to recover the flared gas associated with the production of crude oil currently not used. The start-up of new plants allows a reduction in flared gas and guarantees considerable benefit to the
environment as well as an economic advantage to the project stakeholders, due to the valorization of the associated gas and the sales of LNG. In 2006 these new projects will bring a daily reduction of flared gas of 2.1 Mm3. In terms of
environmental impact, in addition to the Zero Gas Flaring program, gas reinjection operations are underway with the goal of reducing flare gas and CO2 emissions into the atmosphere.
The World Bank estimates that there are 100 billion cubic meters of flared and vented natural gas at the global level. This is a volume equal to the combined annual consumption of France and Germany. The flaring in Africa, in particular, could produce enough electric energy to satisfy 50% of the current consumption of the continent. The Okpai plant is a concrete example of Enis commitment to rational and efficient use of natural resources. During a meeting with NAOC management we were able to verify the data on quantities relating to the reduction of gas flaring achieved through the channeling of gas associated with the extraction of crude oil. This system makes possible direct use of secondary raw materials, not valorized so far, in operations producing economic and environmental benefits and improvements in the standard of living in the local communities involved. URS Italia SpA
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projects for acquiring carbon credits; capture and permanent geological storage of CO2; CO2 sinks: forestation and reforestation; abatement of GHG emissions other than CO2.
EMISSION TRADING The broadest and most rigorous
USE OF FOSSIL FUELS WITH LOWER CARBON INTENSITY Fossil
fuels, for the same amount of energy, have CO2 emission factors proportionate to their carbon content. Natural gas, with a lower carbon content and a higher hydrogen content, has the lowest emission factor (2.35 t CO2/toe), followed by oil with 3.1 t CO2/toe and coal with approximately 4 tCO2/toe. Therefore, in view of the restraints on CO2 emissions, natural gas is preferred to other fossil fuels. There is a reduction of 1.65 Gt CO2 with the substitution of natural gas for 1 Gtoe of coal, whereas if the gas replaces oil, the reduction is 0.75 GtCO2. The advantage of natural gas is greater in terms of electricity production, since the gas is more efficient in generating electricity. In combined cycles, the conversion yield recently reached 60%, against a yield of 45% in the case of coal. For the same quantity of power produced, natural gas can bring a reduction of 0.64 MtCO2/TWh compared to coal and of 0.29 MtCO2/TWh compared to fuel oil. CO2-FREE ENERGY SOURCES In a full analysis, covering the whole production chain and use, there is no energy source completely free of CO2. The Life Cycle Analysis shows that even the sources conventionally accredited as zero emission prove to have some CO2 emission factors. As attention gradually shifts to emission reductions, evaluation of indirect emissions will also be considered important. The choices of new energy sources to be developed and the relevant technologies cannot disregard LCA evaluations.
MORE EFFICIENT ENERGY TECHNOLOGIES FOR CONVERSION AND END USES Energy efficiency is a must for the
mitigation of emissions and is also economical in the current context of high energy prices. Many studies confirm the great potential of energy saving (measured in negajoules to emphasize energy saving) but also the need to find effective instruments for guidance and promotion. Maximum energy efficiency must be pursued throughout the entire production cycle and use of energy sources.
Emission Trading system was launched on 1 January 2005 in Europe. The first period of 2005-2007 can be considered a learning phase, even if it is already in earnest and the CO2 price reached high levels. The second period, 2008-2012, promises to be much more rigorous since national caps must be defined, that take into account the national targets of the Kyoto Protocol, actions for reduction in non-trading sectors and projects based on CDM and JI flexible mechanisms. The development of ET through CO2 pricing should stimulate reduction emission projects and, to this purpose, it is necessary to include the valorization of CO2 in the assessment of investments. PROJECTS FOR ACQUISITION OF CARBON CREDITS The role of carbon credits purchasable through CDM and JI projects is gradually gaining importance as Annex I countries realize that the gap with respect to the objectives assigned by the Kyoto Protocol for the 2008-2012 period cannot be met only by internal measures. In Italy, for example, it is estimated that the gap forecast for 2010 will be approximately 95 MtCO2 per year and that at least half of it must be covered by CDM and JI projects. These mechanisms should become increasingly important, both to facilitate Annex I countries in reaching their targets, and to allow countries where projects are being carried out to develop energy systems with the best available technologies and the highest degree of efficiency. CAPTURE AND PERMANENT GEOLOGICAL STORAGE OF CO2 The geological storage of CO2 is an important transitional technology which can reduce the negative impact that emission reduction may have on economic growth. The cost of the entire chain separation of CO2, transport, injection into the geological formation, monitoring and control is in the order of 40 o/t CO2. It is, however, considerably lower in the most favorable cases, that is, where there is no need for separation because the CO2 is already separated (for example, natural gas decarbonization before feeding into the gas pipelines; hydrogen plants; tar gasification plants) or because the injection of CO2 is accompanied by enhanced recovery of oil. All the demonstration projects currently underway fall into the category of favorable cases. The importance of this technology was recognized by the IPCC in a recent report. Furthermore, at the Montreal Conference, the CDM Executive Board was asked to define a methodology to assess the reduction
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of emissions of these projects. European Emission Trading also provides for the deductibility of permanent CO2 storage. CO2 SINKS: FORESTATION AND REFORESTATION The absorption of CO2 in forestation and reforestation projects has long been the subject of debate regarding the extent and persistence of reductions. At the Montreal Conference a reduction assessment methodology was approved but it is too early to say whether it will be enough to stimulate new projects. The first objective to pursue is to stop deforestation through appropriate incentives. ABATEMENT OF GHG EMISSIONS OTHER THAN CO2 Many CDM projects implemented so far related to GHG other than CO2: the recovery of biogas from landfills, recovery of N2O from adipic acid production processes, recovery of HFC gas (hydrofluorocarbons) and recovery of coal-bed methane. However interesting they may be from the point of view of the credits generated, because of higher global warming potential, the potential volume of credits is limited and can contribute only partially to the reduction needed to cover the large gap of the Annex I countries. It will be necessary to recur to an integrated use of the options mentioned above in order to achieve the objective of stabilizing concentrations of CO2.
Enis response plan and results CARBON MANAGEMENT STRATEGY For many years now Eni has singled out the factors in climate change and GHG emissions important to the evolution of the sector and consequently to the companys strategic choices. With this in mind, some years ago Eni initiated a thorough and systematic analysis of climate change for the purpose of developing short and long term strategies for carbon management, of developing the methodological and operative instruments needed and of designing a more sustainable energy system compatible with mitigation of greenhouse gas emissions. This analysis is constantly updated as scientific knowledge evolves and political decisions are taken on the matter. Enis Carbon Management strategy set the following objectives: preferential development of low carbon content fossil
fuels, and natural gas in particular;
gas-electricity integration, in order to exploit the high

efficiency of gas in electricity generation and cogeneration; active participation in Emission Trading, promoting emission reductions in its own industrial plants; carrying out reduction projects based on the CDM and JI flexible mechanisms of the Kyoto Protocol to develop energy systems with the best available technologies and highest efficiency in host countries;
Mitigation of climate change
CO2 emissions
EMISSION TRADING, CDM AND JI CONVERSION TECHNOLOGIES AND MORE EFFICIENT USE SOURCES WITH LOWER CARBON CONTENT CAPTURE AND PERMANENT STORAGE OF CO2 CO2-FREE ENERGY SOURCES
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Eni direct and indirect CO2 emissions in 2005
DIRECT EMISSIONS
For internal energy consumption:
13.98 Mtoe 35.96 MtCO2
ENI CUSTOMERS EMISSIONS

Natural gas 61.66 Mtoe 144.90 MtCO2 43.66 Mtoe 134.02 MtCO2 105.32 Mtoe 278.92 MtCO2
For electric energy and steam production on behalf of third parties:

4.23 Mtoe 10.05 MtCO2
Oil products
Total
Average emission factor:

2.57 tCO2/toe

2.37 tCO2/toe
2.65 tCO2/toe
the progressive reduction of the flaring of the gas associated with oil production, developing local and international market outlets; development of technologies for the separation and geological storage of CO2; development of more efficient technologies for hydrogen production; design of a sustainable energy system based on a plurality of high efficiency sources and technologies.
GHG EMISSIONS Enis CO2 emissions can be divided into
three categories: direct emissions from its own industrial plants related to its internal energy consumption (for example, oil and gas centers, refineries, petrochemical plants, distribution of energy products to the final market). In 2005 this energy consumption was 13.98 Mtoe and the corresponding CO2 emissions were 35.96 Mt CO2 with an average emission factor of 2.57 tCO2/toe. The low emission factor, falling between those of oil and natural gas, was due to substantial recourse to the use of natural gas and refinery and petrochemical gas, which have a significant hydrogen content;
direct emissions from thermoelectric plants for energy production and steam used internally and externally. 26.73 TWh of electricity and 23.28 Mt of steam were produced in 2005 with a primary energy consumption of 4.23 Mtoe and CO2 emissions of 10.05 MtCO2. Attributing to steam cogeneration emissions that would have been generated if the heat had been produced separately, it is found that the average electricity generation emission factor was 0.34 tCO2/MWh, one of the lowest values that can be obtained from fossil fuels. Again in this case, the low emission factor is due to the preferential use of natural gas and to the extremely efficient conversion of combined cycle cogeneration; emissions from the use of fuels sold by Eni to its clients. In 2005, in the aggregate, Eni sold 43.66 Mtoe of oil products and 61.66 Mtoe of natural gas to its customers which, in terms of emissions, amounted to a total of 279 MtCO2. The average emission factor was 2.65 tCO2/toe, closer to that of natural gas than to oil just because Eni has been promoting the development of natural gas for years.
Enis organization and management of Emission Trading
63 INSTALLATIONS GHG MANAGER ON SITE GHG TEAM ACCOUNTING REPORTING AUDIT REDUCTION MEASURES
8 BUSINESS UNITS GHG MANAGER FOR THE BUSINESS UNIT GHG COORDINATOR OPERATING SECTOR
ENI CORPORATE DIHSE
GREENHOUSE GAS MANAGEMENT TEAM ENIFIN
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EMISSION TRADING MANAGEMENT Eni is one of the major
Italian and European players in the Emission Trading system. First in Italy, for the number of plants involved (61 plants representing 7% of the total installations subject to Emission Trading) and second in terms of EUA assigned by the National Allocation Plan (22.4 MtCO2 in 2005 or 10% of the total allowances assigned). In order to prepare for Emission Trading, Eni developed a series of coordinated actions with the following scope: introduction of a uniform group protocol for monitoring and accounting for emissions, in line with the European guidelines for monitoring and reporting; implementation of a web-based database in all the group worldwide installations, capable of ensuring an accurate, reliable and transparent accounting for GHG emissions of each source of emission of each plant; verification of the suitability of Enis management system to respond to the requirements of European Directives and guidelines for monitoring and reporting, in advance of the first Emission Trading deadlines; sharing of knowledge and best practices within the entire organization, involving more than 200 people, including those involved only part time. It was necessary to develop a group-wide organization for the management of Emission Trading, which started with the individual installations, through the business units and finally consolidated at the corporate level. In Eni, Emission Trading is coordinated by the Corporate, which draws up both a budget forecast for each quarter and the final balance for the Balancing Plan for the positions of the individual installations and the business units. It is thus possible to foresee any compliance problems which may occur and find timely solutions by taking steps to reduce emissions or to resort to the market. The final balancing is managed by Enifin, Enis finance and trading company, through a series of internal transactions within the same business units and among business units with resort to the external market when necessary. Since the organization and integration of all these activities is complex, a Greenhouse Gas Management Team (TGGG) was set up in Eni with the following functions: coordination of Emission Trading management activities of the business units and the individual installations involved;
drafting of plans for the GHG emissions compliance with the Emission Trading system and the related total figures at Eni level, identifying lines of action to guarantee the balancing among short and long term consolidated commitments; identification of transactions to be made by each installation in fulfillment of its obligations to surrender emission allowances; approval of the Balancing Plans, both forecast and final version, of Enis consolidated position in the Emission Trading system. The complex organization which was developed successfully passed its first test in the early months of 2006 when the 2005 emissions were audited and the first surrender of EUA took place. Participation in the Emission Trading system requires not only accurate accounting but also a continuous assessment of possible reduction projects in terms of the market value of CO2. Since CO2 has acquired a market price, it will be given a value in the assessment of investments to promote those involving lower emissions. This is all the more important in the light of the national allocation plans for the second compliance period, 2008-2012, which will be much more severe and tied to national commitments of the Kyoto Protocol.
CDM AND JI FLEXIBLE MECHANISMS In addition to
participating in the European Emission Trading system, Eni is developing a portfolio of reduction projects based on the other flexible mechanisms of the Kyoto Protocol. It has already submitted to the CDM Executive Board the electricity generation project completed at Okpai in Nigeria, which uses associated gas previously flared off, with an annual emission reduction of 1.5 MtCO2. The Okpai project, the first in a larger and already defined portfolio, is part of the cooperation which Eni has established with the Italian Ministry for the Environment and Protection of the Territory through a Voluntary Agreement signed during the COP9 held in Milan in December 2003. In its widespread industrial activities abroad, Eni can, in fact, through GHG reduction projects, make a substantial contribution to the achievement of the Italian objective of greenhouse gas emission reduction assigned by the Kyoto Protocol.
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The Voluntary Agreement between Eni and the Ministry for the Environment provides that the latter authorize Eni to operate as a legal entity in implementing these projects. In order to facilitate the carrying out of these projects, bilateral agreements can be made with interested countries. As an example, a bilateral agreement was signed between the Nigerian Ministry for the Environment and the Italian Ministry for the Environment for the purpose of promoting closer cooperation and to identify and carry out CDM projects. The Voluntary Agreement is not limited to CDM projects but also aims at utilizing Joint Implementation. For this purpose, Eni has launched a study of opportunities for JI projects in the most promising countries. The prospects are very encouraging, since there are many countries where great emission reductions can be achieved through increasing efficiency in their energy systems.
DESIGN OF A MORE SUSTAINABLE ENERGY SYSTEM
Eni, together with other oil companies, participates in the CO2 Capture Project, which foresees the development of innovative technologies for the capture of CO2 and risk analysis for long term storage of CO2 in geological structures. In addition to participating in the CCP project, Eni has launched an internal strategic project to prove geological storage of CO2, using already separated CO2 available in Italy or abroad. With regard to the energy use of biomass, technical economic feasibility studies have been done on the production of electric energy from vegetable oils and biofuel substitutes for diesel fuel, obtainable through hydrotreatment of vegetable oils.
Technological innovation plays a very important role in the development of a more sustainable energy system compatible with the objective of stabilizing concentrations of GHG in the atmosphere. Enis commitments to this objective are prevalently focused on the capture and permanent storage of CO2 in geological formations and in energy uses of biomass, both for production of electric energy and for use of biofuel in road transport.
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Biodiversity
Eni operates on a global scale and is in contact with a great variety of natural environments, from desert to tundra, from jungle to the Arctic and Antarctic poles, from Mediterranean maquis to coral reefs. Many of these habitats belong to the category of ecologically critical areas where the potential impact of activities on the biodiversity can occur at any stage of the production phase from exploration to production, from transport to refining, from distribution to the use by the end user. Biodiversity plays an essential role in the proper functioning and integrity of ecosystems and is an instrument for assessing their state of health and the impact of human activities on them. Eni has initiated assessment programs and projects for the mitigation of the potential impact of its own activities, considering the conservation of biodiversity one of the objectives of environmental protection. Its approach is directed at both safeguarding species and habitats and identifying bio indicators that will allow it to constantly monitor the impact of human activities on the environment. Terrestrial habitat
EXPLORATION AND PRODUCTION ACTIVITIES In Val dAgri the
salamanders, woodpeckers, hymenoptera and grazing animals. The socio-economic indicators included the ecological footprint of the population and long term trends in the use of environmental resources. In parallel, workshops were conducted for operative personnel and staff for the purpose of illustrating the importance of biodiversity for the oil & gas sector. Particular emphasis was placed on the effects of operational activities on ecosystems, with a view to integrating conservation of biodiversity with operational and management processes. In collaboration with the Biomarker Laboratory of the Department of Environmental Sciences of the University of Siena, the E&P Division promoted the Advanced Processes for Oily Water Treatment project with the objective of assessing the quality of wastewater treatment, through biomarker methodology. In order to achieve a good balancing between environmental safeguarding and economy of the technology employed, toxicological tests were done on the waters subjected to traditional treatments and on those purified by innovative methods. The bio indicator organisms used were the common carp for waters coming from onshore sites and the common sole for offshore waters; both had already been tested in Bioagri and Biomare projects respectively.
LAYING OF METHANE PIPELINES After an environmental
AgriBiodiversity Project monitored the biodiversity integrating the ecological surveys with the study of the socio-economic context of the site. The salient characteristics of the local ecosystem were identified and these cast light upon the changes which occurred over extended periods of time owing to external factors and to the effects of oil activities. The monitoring focused on areas selected during exploratory visits, taking into account the indications that emerged from consultations with local stakeholders. The bioindicators used included species of flora and fauna, both domestic and wild, among which lichens, beech trees,
impact assessment had been made, Snamprogetti was assigned the task by Snam Rete Gas of carrying out a study to analyze disturbances to the Marsican brown bear (Ursus arctos) caused by the laying of the Sulmona-Oricola methane pipeline in the areas where it crosses the Regional Natural Park of Sirente-Velino and the special protection zone of the Simbruini Mountains. The study was conducted along three lines:
BIOMARKERS
In the framework of assessing biodiversity one signal of contamination levels is the biomarker, an indicator of the eco-toxicological risk levels. Monitoring through biomarkers supplies information on actual biological damage, and on in vivo
assessments, even in situations of chronic pollution, of environmental impact on naturally occurring organisms present in the ecosystem under examination. Biomarkers are therefore real and proper indices of molecular, biochemical and physiological stress which allow
an assessment of biochemical responses generated by an organism in reaction to a chemical agent. Continuous progress in this field will make available a growing range of biomarkers as sensors of the state of the ecosystem.
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analysis of the potential distribution of the Marsican bear based on three indicators; environmental suitability (linked to the presence or absence of the animal in the area), connection and permeability of the territory and interference in the movements of the bear in its range and in its hibernation zones; assessment of potential impact of the works on the species; identification of the best mitigation measures for the protection of the species. Through superimposing the range of the construction site over the spatial distribution of the three indicators of the species, the following mitigation measures were identified: minimization of any disorientation factors potentially affecting the bear during its movements, by concentrating work sites in short stretches and keeping trenches open only for the time strictly necessary to finish the job (preparation of the trench floor, pipe positioning and welding) so as to restore the site to its original profile in as short a period as possible; the creation of a shallow slope at one end of the two ends of the trench, to allow the bear to continue its route if, when it encountered the excavation, it decided to cross it rather than go around it; the protection of the bear, should it get caught in an excavation trench, using emergency procedures to liberate the animal; planning of construction site works so as not to disturb the hibernation of bears.
REMEDIATION ACTIVITIES The Syndial company has submitted a project for the remediation of the Mantua plant located inside the Vallazza site now designated a Site of Community Importance according to the parameters of the 92/43/EEC directive on the protection of habitat and animal and vegetable species worthy of preservation. The remediation project provides for taking soil samples based on a specific sampling grid in order to find various chemical pollution parameters. Probing will be done using both traditional probes on track-mounted or wheeled vehicles, and Geoprobes, mounted also on floats. In order to reach the sampling spots, trails must be made, with the consequent cutting of vegetation and alteration of the current habitat. The analysis done by Snamprogetti on the state of conservation of the site, confirms the primary importance of the habitat and the richness of ornithological species that also spend the winter there, such as the great white heron, dwarf herons and cattle egrets.
The disruptive sampling activities can affect the biological cycle of the birds in critical phases while drilling can affect the invertebrate land fauna and vegetation. In the March to mid-August period when the reproduction of many species birds and amphibians takes place, the degree of environmental value is very high almost everywhere. In order to limit the impact and preserve the delicate environmental equilibrium of Vallazza, several mitigation measures were identified. December and January were found to be the best periods for sampling. Although the planned number of samplings remained unchanged, it was necessary to find new sampling spots and an area characterized by swamp vegetation in the central sector was excluded from the sampling area, since it was the wintering-over rest site of the bird population. Marine habitat
EXPLORATION AND HYDROCARBON PRODUCTION The Biomare Project developed by the E&P Division concluded with the development of a protocol for the eco-toxicological monitoring of production areas. The project drew up a program of environmental monitoring based on the use of animals as biomarkers for the assessment of potential eco-toxicological effects of activities in the marine environment of the Mediterranean. The biomarkers most sensitive to contaminants typical of the oil industry and the bio indicators representative of the area are the common sole (Solea vulgaris) since it is an organism living in contact with sediment and therefore representative of that part of the environment, and acorn barnacles also known as dogs teeth (Balanus perforatus and Balanus trigonus), crustaceans that live on platforms pylons and are therefore organisms representative of seawater column. The levels of contaminants found in biomarkers in the water column and in sediment, showed no ecologically toxic alterations that could be attributed to offshore activities.
In line with this approach was the project for the Characterization of biodiversity and monitoring of the role of offshore platforms in the ecosystem. Research focused on the ecosystems around the gaseous hydrocarbon extraction platforms operating in the Ionian Sea (Hera Lacinia, Hera Lacinia 14, Luna and Luna B) and in the Adriatic (Cervia B, Antonella, Eleonora, Squalo, Giovanna, Fratello Nord, Fratello Est and Fratello
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Cluster). The first year of monitoring focused on oceanographic research (water and sediment), fishing, visual census (the technique of taking a census by direct observation), trophic interaction, the state of health of fish species and ROV (Remotely Operated Vehicle) exploration, which enables a surface operator to interact with the marine environment without diving. The second phase foresees sighting through remote sensing cameras placed on the platforms. The combination of these tested techniques should lead to a definition of an optimum methodological approach to characterization of the biodiversity in offshore environments. Moreover, Snamprogetti is conducting a project, in the experimental stage, based on the Polymerase Chain Reaction method, which is studying the variations in the DNA genome of phytoplankton induced by environmental stress caused by such phenomena as coastal human waste discharges and platform oil spills. The first samplings from offshore platforms in the Adriatic for testing this method should be available in early 2006.
OFFSHORE PIPELINES Saipem is participating in the
Sakhalin II project for the transport of natural gas through pipelines and LNG plants to new markets in East Asia. In this undertaking, Saipem, for the first time, faced technological challenges in the production of natural gas in remote and critical areas, in compliance with stringent environmental requirements. Climatic difficulties are such that oil and gas products extracted by the fixed platform located about 20 km from the coast must be able to be transported even in winter when the sea is frozen, through offshore pipelines connected to the coast. These pipelines must be protected from icebergs which drift and run aground during the thaw, causing deep furrows in the sandy soil. The protection of these pipelines is secured by burying them at such a depth as to minimize any possible effects of interaction with ice. The onshore pipeline project involves crossing more than 1,000 rivers, a good number of which are territory where salmon lay their eggs, an important natural and economic resource for the island. There are, moreover, many species of birds, some of which are in the endangered category which must be protected through environmental monitoring programs so that the project does not endanger their survival. The offshore projects, on the other hand, must protect the grey whales present in the sea surrounding the island and in danger of extinction. Various coastal areas
on the east side of the island are the feeding and reproduction grounds for these animals. To this end, Saipem guarantees the presence on the ships used in building offshore pipelines of expert observers to watch over the whales (of which it is estimated there are only one hundred left) and over the measures in place which provide for: the carrying out of operations far from the routes of the animals; the minimization of underwater noise and actions that would disturb the known habitats; a ban on fishing, photographing and discharging anything into the sea in the feeding grounds; specific training for the crew in the protection of grey whales. The Dolphin Project is also of great interest; it concerns the transport and storage of natural gas from Qatar offshore. The extraction zone is in the Arabian Gulf north east of Raf Laffan and the gas extracted will be transported through a series of pipelines, both offshore and onshore, some of which were laid by Saipem. Following a series of Environmental Impact Assessments and the environmental baseline, Saipem fine-tuned a plan for environmental protection and measures for mitigating the interactions between construction works and the marine environment, which is of high value due to the presence of a coral reef, of dugongs (an endangered Cetacea species), dolphins and turtles. The building of pipelines could increase the degree of turbidity in the water. Saipem consequently introduced a water sediment monitoring system and with simulations models proved that hydrotesting activities did not interfere with the environment. In planning the route for the pipeline which must intersect the coral reef (an important indicator of environmental quality in the marine habitat) a corridor was found where the coral was, for the most part, dead. To protect the habitat and ensure that construction work does not disturb whales and turtles, there is a Marine Mammal Observer on board Saipem ships, while on land a biologist monitors the coastline south of Abu Dhabi near the link with the onshore pipeline where the turtles nest.
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Transport system
For the transport of crude, gas, oil products and petrochemicals, Eni uses a logistics structure made up of a pipeline network, oil pipelines, a fleet of four methane tankers, chartered tankers, and a fleet of road tankers to distribute its products to the retail and wholesale markets. 54.2% of the products is transported through pipelines (oil pipelines and gas pipelines) which are considered to be the safest method of transport with the highest energy efficiency and least environmental impact. In Italy the system of gas supply and distribution is composed of the transport network and a regasifying plant. The network extends over a total of 32,500 km,
Gas fed into the gas pipeline network 100 75 50 25
Gm3
30,712 of which are owned by Eni. In addition, Eni owns four methane tankers to transport LNG and deliver gas to the regasifying plant at Panigaglia managed by Snam Rete Gas, the sole operator in Italy for LNG regasifying. The national gas system is 80% fed by gas imported through an international system of high pressure pipelines over 5,300-km long for which Eni holds rights of transport. A secondary network operated by Italgas is connected to the primary network and extends over 48,000 km, serving more than 1,400 Italian municipalities. At the national level, Eni is leader in oil product transport and has an integrated logistics structure composed of a system of 12 depots managed directly and located throughout Italy, as well as a network of oil pipelines. The logistics structure uses also rented tankers for sea transport of crude and oil and chemical products, and of a fleet of its own road tankers and those of external transport companies for secondary distribution of products to the retail and wholesale markets. Gas pipelines The network of gas pipelines is fed by pipelines importing natural gas from Russia, Northern Europe and North Africa, by the terminal for regasifying at Panigaglia and by production and storage centers located throughout Italy. 85.1 Gm3 of natural gas were fed into the network during 2005, an increase of 5.8% over the previous year. Abroad Eni holds rights of transport in a network of approximately 5,300 km with direct operating responsibility for 3,058 km. In Italy, the transport system of the PRIMARY NETWORK managed by Snam Rete Gas is composed of pipes of a
2003
2004
2005
Length of gas pipelines of Snam Rete Gas 32 24 16 8

thousand km
2003
2004
2005
Products transported Natural gas 54.2 57.3 62.2 33.8 LNG 4.1 2.7 2.8 1.5 Crude 45.6 51.2 62.8 34.1 Oil products 40.5 41.9 46.3 25.1 Chemical products 9.8 10.2 10.0 5.4 Total 154.2 163.4 184.1
2003 2004 2005 Distribution of products transported in 2005
(Mt) (Mt) (Mt) (%)
Methods of transport Gas pipelines (Mt) 54.20 (Mt) 57.34 (Mt) 62.19
(%)
Ships 53.78 58.20 65.58 35.6
2003 2004 2005 Distribution of methods of transport used in 2005
Oil pipelines 28.63 29.58 37.63 20.4
Road 17.06 17.10 17.13 9.3
Rail Intermodal 0.22 0.29 0.77 0.4 0.33 0.89 0.80 0.4
Total 154.2 163.4 184.1
33.8
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diameter up to 1,200 mm at pressures from 4 to 75 bar and of 11 compression stations and 562 pressure regulation and reduction plants. The most important environmental aspects concern the temporary use of the soil during the construction of infrastructures and the atmospheric emissions from gas turbines installed in compression plants during operation. During construction, trenches are dug for pipe laying using technologies that interfere as little as possible with the surrounding environment. Once this operation has been completed, careful restoration work is done to return the site to its original condition. In recent years, some turbines have been modified and some new high performance units have been installed, which have led to a reduction in both energy consumption and emissions deriving from gas combustion. A program is underway that provides for: adoption of safety valves with a signaling device for reporting of possible leaks consequent upon partial or accidental aperture; start-up of gas turbines using electric or hydraulic start-up systems. Plants and pipes are periodically inspected and maintained to ensure high standards of safety. The integrity of the pipes is checked by an intelligent pig, a device which travels through the pipes capable of identifying possible defects. In 2005 more than 1,650 km of network were inspected by intelligent pigs and approximately 11,800 km of network by helicopter in addition to checks carried out by vehicle and on foot, to check potentially dangerous situations such as third party works near the pipelines.
SECONDARY DISTRIBUTION in Italy is managed by Italgas
CO2 emissions from transport/gas transported by Snam Rete Gas 8.0 6.0 4.0 2.0
t/Mm3
2003
2004
2005
CO2 emissions/gas distributed by Italgas 8.0 6.0 4.0 2.0

t/Mm3
2003
2004
2005
Energy performance of Praoil oil pipelines 0.05 0.04 0.03 0.02 0.01
kWh/(t*km)
2003
2004
2005
with a network of 48,471 km. In 2005 in Italy 8.5 Gm3 of
gas were distributed and 5.35 Gm3 abroad. The most significant impacts derived from: atmospheric emissions from combustion processes and fugitive emissions from the grid;
INFRASTRUCTURES OF GAS TRANSPORT

H NET ERL
RUSSIA
NO AY RW
Blarignies Dunkerque
DS AN
TRANSITGAS
GERMANY
Bocholtz TENP
UKRAINE
TAG
SLOVAKIA
Baumgarten
FRANCE SWITZERLAND
AUSTRIA CROATIA
Panigaglia
LN
TMPC Gela TTPC Greenstream
YA LIB
TUNISIA
ALGERIA
Saf Saf
Third party gas pipelines
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waste produced by construction work and pipeline maintenance and by remediation of decommissioned sites; use of hazardous substances such as odorants. The efficiency of a gas distribution network is measured by its ability to satisfy the demands of the customers by providing continuous and safe service. In addition to proper planning and plant building, this objective is guaranteed by controls, analysis and interventions in the distribution network. Control programs concern the odorization of gas, verification of the distribution parameters, scheduled inspections of the distribution network, cathodic protection of the steel pipes, the functional testing of equipment, remote supervision of plants and the network and immediate intervention and emergency response plans. Oil pipelines The Eni network of oil pipelines is over 2,400-km long and serves the four depots in Pegli (province of Genoa), Ferrera (province of Pavia), Civitavecchia (province of Rome) and Pantano di Grano (province of Rome). 37.6 Mt of crude (75%) and oil and chemical products (25%) were handled in 2005. The depot and the oil pipeline network management systems have been ISO 14001 certified since 1999. The oil pipelines are made of steel and protected from mechanical interference by plastic and/or bituminous coating and, where they cross major highways or railways, additional thicker protective sheathing is provided. The lines are shielded against electro-chemical corrosion by means of impressed current cathodic protection and are posted with signs
along the route. The pipes are checked by intelligent pigs which periodically inspect parts of the network. Each oil pipeline is equipped with interception valves at appropriate points in order to allow interruption of the flow in case of accidental breaks in the line. Leak detection instruments are installed to monitor any possible leaks occurring during operation. The functioning principle of this instrument is based on flow measurement by means of ultrasound detection. Road transport In 2005, 14.8 Mt of crude oil and oil products and 2.3 Mt of chemical products were transported. The HSE program adopted to improve environmental performance and road transport safety provides for the use of security and control systems of transport vehicles and a series of initiatives for drivers, which call upon technological innovations, training and health
Road transport accidents in Intermode 1.5 1.2 0.9 0.6 0.3

number of accidents/million km traveled
2003
2004
2005
LNG SHIPPING
LNG Shipping is the Eni company operating four methane carriers for the transport of Liquefied Natural Gas by sea to the Italian terminal at Panigaglia and at the same time offers a rental service for other operators in the sector. In 2005, in collaboration with Enis HSE staff and with the company responsible for the technical and administrative
management of the fleet and its merchant seamen, LNG Shipping devoted great efforts to improving and harmonizing its HSE accounting system. The result of this process was the publication of the companys first HSE Report, presented at Portovenere in September 2005. The Report describes the impact of ship transport of liquefied
natural gas according to an integrated approach, taking into account the problems relating to the product, to the modality of transport and legislation valid for the maritime sector. The document describes the ship system taken not only in terms of a grouping of plants, processes and operative modes, but also in terms of quality of life on board,
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monitoring. Intermode, Enis operating company in this sector, has launched a series of projects for remote control of transport vehicles. As an experiment, 70 vehicles operating in the Venice and Brindisi areas have been equipped with GPS devices and GPRS modems which enable the company to monitor the position, direction and speed of the vehicle, all the data from the electronic control board (type and quantity of product transported) and from the instruments of the vehicle and a series of information related to external conditions (weather, traffic conditions, etc.), which is entered manually. An internet portal (www.masterdrive.info) with inter-functional services accessible to personnel and external transport companies has been activated to tank truck drivers. Through it, HSE can deliver its training and sensitizing programs and involve employees in order to improve transport safety and minimize accidents. The portal will have a Safety Game module for continuous checking on learning progress and will interface with palmtops provided to drivers. In collaboration with the Sleep Physiopathology Center at the University of Genoa, a program has been launched to study and treat the precursors of somnolence at the wheel. The pilot study involved 300 drivers in the north and will be successively applied to the entire group of drivers who work for Eni.
Sea transport Eni operates four METHANE carriers for the transport of LNG. In 2005, these ships carried 2.8 million tonnes of LNG from the ports of Arzew and Skikda in Algeria to the Panigaglia LNG terminal in Italy, to the Enargas plant in Barcelona, Spain, and to the Gas de France terminal at Fos sur Mer in France. The ships were designed, built and managed according to HSE standards set by Eni. The technologies used in each ship were the best available ones in the market at the time of building. The ships are equipped with steam turbine engines and four cargo tanks. The temperature of the gas transported is maintained at almost atmospheric pressure by means of evaporation control and an efficient system of thermal insulation, and by using the boil off gas in the boilers. Boil off gas is thus used as fuel to run the ships. To protect cargo tanks, methane carriers have ballast tanks, a cargo monitoring system with sensors and gas detector alarms. A study in 2005 of the environmental impact of methane carriers on the marine environment has been conducted, which allowed to update the atmospheric emission factors, relating them to the technological characteristics of the four methane carriers.
crew health and safety and the security measures adopted. The main impacts illustrated and accounted for through specific
physical indicators, were commensurate with the activity and quite contained, and concerned greenhouse gas and
nitrogen and sulphur oxide emissions, the production of wastes (similar to urban waste), bilge and ballast water.
The initiative of LNG Shipping in publishing the HSE Report is, to our knowledge, a first in the shipping sector, at least in the Mediterranean area. The audit made of the LNG carrier, Elba, in the careening basin of Trieste is, first of all, a merit point for LNG Shipping and for Eni since it carries on the work started last year with the audit of the LNG Portovenere ship at the docks in the port of Barcelona. From the point of view of content, the audit this year provided the opportunity to assess the management of HSE impacts generated in another important phase of the operating cycle of a methane carrier, that of periodic maintenance. URS Italia SpA
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Approximately 58 Mt of crude oil and oil products were shipped by sea in 2005. The Shipping Department of the R&M Division, which operates in full respect of ISO 9001 Quality Management System norms, uses a fleet of tankers which completed 1,060 hauls using 30 time charter tankers (67%) and 415 hauls with spot charter tankers (33%); the tankers, on the average, were approximately 5 years old. The time charter tankers are all double hulled with an inertization system for the tanks in line with the most advanced safety and environmental protection standards. In its selection of charter ships, Eni decided to apply even more stringent standards than international regulations, adopting its Minimum Safety Criteria; these criteria and limits must be respected by all charter ships and by anyone working in any ship terminals where Eni has an interest. The vetting system used to choose tankers is based on technical aspects and quality and also takes into
account the companies managing them. This is done to ensure that vessels are suitable and adequately equipped to perform the service and that they operate in accordance with standards for safety, health protection and pollution prevention. Inspection and screening are carried out by a staff of Eni inspectors and by a network of independent inspectors for foreign port inspections, all of whom are accredited to OCIMF. There were 298 inspection visits made in 2005 and 2,799 checks on documentation complying with international legislation and Eni guidelines. There is also an assessment process of technical aspects and quality of the tankers used to transport chemical products (in 2005 5 Mt). The following databanks are used to check on the suitability of a ship; CDI (Chemical Distribution Institute, an organization of CEFIC), SIRE; Lloyds Maritime Information Services; PSIX (US Ship Information Exchange); McKenzie Tanker Register. In cases where there are insufficient data or in doubtful cases, CDI inspections are carried out on individual ships.
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LNG Shipping sea transport of LNG in methane carriers 2003 182 130,274 93,336 56,943 233 36,160 2,339 169 256,066 1.97 2004 110 77,833 75,159 48,050 283 26,826 1,738 126 203,886 2.62 2005 120 79,884 83,342 55,337 221 27,784 1,798 131 223,978 2.80
Hauls Miles hauled Total consumption including: natural gas diesel fuel high sulphur content fuel oil SO2 SPM CO2
(number) (nautical miles) (toe) (toe) (toe) (toe) (t) (t) (t) (t/miles)
Fuel consumption
Atmospheric emissions CO2 emissions/miles hauled
Sea transport of crude and oil products by external transport companies 2003 30 354 1,252 354 1,218,052 183,742 9,790 173,952 11,514 803 617,774 0.51 2004 30 343 1,168 343 931,587 189,518 11,351 178,167 11,832 823 636,831 0.68 2005 29 415 1,060 415 662,440 167,703 9,960 157,743 10,473 729 563,551 0.85
Ships Hauls Miles hauled by time charter ships
Time charter ships Spot ships Time charter ships Spot ships Total consumption including: marine diesel fuel high sulphur content fuel oil SO2 SPM CO2
(number) (number) (number) (number) (nautical miles) (toe) (toe) (toe) (t) (t) (t) (t/miles)
Fuel consumption (1)
Atmospheric emissions (2) CO2 emissions/miles hauled
(1) Fuel consumption refers to time charter vessels. (2) Emissions were estimated by Eni on the basis of literature emission factors.
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Eco-friendly products
Downstream from exploration and hydrocarbon production, Eni sells oil products and natural gas, produces electric energy and sells chemical products. These products are sold to customers under well-known brand names in Italy and abroad. The offer of refinery products, natural gas, electric energy and chemicals comes complete with technical consulting services. End product quality together with its eco-compatibility is one of the main objectives that Eni has pursued for years. Refinery products are distributed under the Agip brand name and are the fruit of considerable research and development. Automotive and industrial vehicle fuels and lubricants, special products for industry, grease and other products come from refineries where high technological and environmental standards are in place.
Automotive fuels The distribution network of the Agip brand sells high quality fuels with reduced environmental impact. Eni was the first oil company to sell automotive gasoline in the market through the Linea Blu Carburanti whose environmental characteristics had anticipated the limits imposed by European legislation; its octane value, higher than that of normal automotive gasoline, improves motor efficiency. BluSuper in particular, has an aromatic content lower than 35%, benzene less than 1% and sulphur is less than 10 mg/kg. The almost total absence of sulphur in gasoline eliminates emissions containing sulphur such as sulphur dioxide and sulphates, which are responsible for acid rain, improves vehicle catalyzer efficiency and consequently reduces the pollutant emissions from combustion. In 2005, the
Automotive fuels sold in 2005 12 9 6 3

million tonnes
Diesel and LPG for residential use sold in 2005 2.0 1.5 1.0 0.5
million tonnes
Gasoline
including BluSuper
Diesel
including BluDiesel
LPG
Jet Fuel
Marine fuel oil
Diesel fuel for heating
LPG combustion
MULTIENERGY STATIONS
In line with current sustainable energy and transport policies, the R&M Division, together with some Italian regions, is building new generation multienergy supply plants to satisfy the new demand for alternative fuels from fuel cell mini fleets for the transport of persons and goods. In 2003 the first multienergy service station was inaugurated under the Agip brand name,
distinguished for its reduced environmental impact. Located on the west ring road around Milan, in the municipality of Assago, this multienergy service station is eco-efficient and self-sufficient for its own energy needs. A series of built-in photovoltaic panels in the building exploit solar energy to supply the station with most of the energy needed to run it. The
photovoltaic plant composed of 270 modules covering a total area of 180 m2 can produce electric energy to a peak power of 20 kWh. In addition to traditional fuel, the station also sells the Blu fuel line, LPG and methane. Eni has launched for the period 2006-2009 a solarization program for the service stations of the Agip group, with a view to
88
share of BluSuper sold over the Agip network amounted to 2% of total fuel distributed. 2002 saw the beginning of sales of automotive diesel fuel, BluDiesel, also a low environmental impact fuel with a polyaromatics percentage lower than 11% and a quantity of sulphur lower than 10 mg/kg, which gives better motor performance than normal diesel fuel thanks to special additives. The market share of BluDiesel sold through the Agip network in 2005 was 9% of all diesel fuel sold. To meet the needs of those consumers who drive older cars, AdvanceDiesel, a product with minimum environmental impact, was made available. In fact, thanks to AdvanceDiesel sulphur dioxide was eliminated and particulate and CO2 emissions were reduced.
Aviation and marine fuels Fuel for civilian light aviation such as light aircraft and Civil Protection aircraft, jet fuel (used in aircraft turbine motors) and fuel oil for large marine diesel motors complete the range of fuels distributed by Eni. Jet fuel meets the requisites demanded by the Joint Fuelling System Check List for Jet A-1, current edition, which includes the most restrictive technical limits laid down by the major international standards. Through its own website, Eni supplies a series of technical and operational assistance relating to the supply cycle of this fuel. Automotive methane Eni sells automotive methane. This fuel is used in Italy by more than 400,000 vehicles, the first methane powered fleet in Europe and third in the world after Argentina and Brazil. Methane fuel gives excellent motor performance at a lower consumption rate, with lower atmospheric emissions than gasoline or diesel motors and there is an almost complete absence of carbon residues in the motor. Currently 400 of the 500 methane service stations in Italy are supplied by Eni. Through its internet
energy saving and self-sufficiency and to reducing emissions. The first multifuel service area with hydrogen produced from renewable resources is in the final stages of completion and should be inaugurated in June 2006 at Collesalvetti (province of Livorno) on the Florence-PisaLivorno super highway. The important innovations, unique in the global panorama of infrastructures with low/zero
impact supply, include energy self-sufficiency and production of H2 from renewable sources. The station is equipped with: an approximately 20 kW photovoltaic installation (annual production estimated at 24,000 kWh); a 60 kW wind powered installation (three small 20 kW generators with an annual estimated production of 84,000 kWh); a cogeneration plant with a 30
kW methane micro turbine for the production of 188,000 kW and 85,000 kWh saved from heat recovery; an electrolyzer production plant for the supply of hydrogen for a mini fleet of internal combustion cars. The environmental benefits gained from this investment are a reduction of 135 t in CO2 emissions and an energy saving of approximately 40 toe.
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site, www.gasandpower.eni.it, Eni offers a series of services related to the distribution of natural gas: from feasibility studies on construction of new methane distributors to project technical assistance, from plant safety analysis to communication and specific consulting services. Lubricants Lubricants complete the range of automotive products. Eni supplies its clients with a vast range of high quality, low environmental impact lubricants. The motor oils sold under the Agip brand name guarantee high performance for all types of motors. Transmission oils, antifreeze, brake fluid and grease for frames complete the range of automotive products distributed by Eni. Eni was one of the first oil companies in 2003 to launch low environmental impact PET (polyethylene terephthalate) containers for the sale of lubricants. All the components of the containers (including bottle, cap and label) have characteristics of inertia and resistance and can be recycled. Fuels for residential use With regard to fuels for residential use, Eni supplies diesel fuel for heating, LPG and natural gas. Natural gas for residential use is distributed by Eni through Italgas Pi and sold by the Gas & Power Division. Compared to other fuels for residential use, natural gas is the energy source with the lowest environmental impact: its emission of polluting substances generated during combustion is lower than that of diesel or LPG. This commercial commodity is complemented by a series of services offered to end user clients to assist them from the phase of replacing domestic boilers to supply of information on safety and energy saving.
Natural gas for industrial users In addition to residential clients, Eni supplies natural gas to medium-sized and large companies, for the most part, those who distribute gas and wholesalers. In Italy more than 4,000 clients rely on an articulated offering with different types of standardized or customized contracts. The supply of natural gas to industrial users is accompanied by a technical consultation service: from technical economic feasibility to energy diagnosis, to plant and internal gas distribution network check-ups, always with a view to safety, the environment and energy savings. Electric energy EniPower, controlled by Eni, supplies electric energy to business clients. The offering of electric energy varies according to the size, thus distinguishing between large, medium and small businesses. The various individualized commercial proposals succeed in satisfying the different requests, with the commitment to an offering that will optimize the energy costs to the client.
Steam sold 12 9 6 3
million tonnes
Electric energy production sold 24 18 12 6

terawatthour
2003
2004
2005
2003
2004
2005
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Electric energy is produced by combined cycle cogeneration plants fuelled by natural gas. The technology and the fuel used result in the highest energy production efficiency (electricity and steam) at low environmental impact: CCGT technology for the production of 30 terawatthour brings a reduction of approximately 11 Mt in CO2 emissions compared to conventional thermoelectric plants.
Chemical products Through its controlled company, Polimeri Europa, with advanced plants and technology and an extended efficient distribution network, Eni produces and sells chemical products. The products sold can be classified as intermediate products (used all along the production chain typical of chemical and manufacturing industries) and polymers (plastic materials and rubber), which are subsequently transformed into objects and components in everyday use. Polimeri Europa subscribed in 1995 to the Responsible Care program, a worldwide chemical industry commitment plan relating to the themes of environment, health and safety.
The average electricity generation emission factor of 0.34 tCO2/MWh is among the lowest attainable from fossil fuels
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E N I H E A LT H S A F E T Y E N V I RO N M E N T R E P O R T 2 0 0 5 / TA B L E S A N D G LO S S A R Y
Tables and glossary

HSE key performance indicators
Eni Group Employee injury frequency index Employee injury severity index Contractor injury frequency index Contractor injury severity index Health expenditure/employee HSE expenditure/revenues HSE current expenditure/operating costs HSE investments/capital expenditure HSE staff/thousands of employees Auditor/thousands of employees Health care staff/thousands of employees HSE training hours/employee Attendance to HSE courses/employee NOx emissions/toe consumed SO2 emissions/toe consumed Water treatment expenditure/total treated water 2003 3.79 0.09 4.12 0.07 425 1.80 1.66 3.37 27.9 9.6 10.5 6.4 1.0 9.22 8.91 358 2004 4.47 0.11 7.84 0.09 429 1.95 1.69 5.61 36.3 12.6 12.3 15.9 2.1 8.10 8.59 504 2005 3.17 0.10 2.59 0.07 553 2.03 1.73 8.11 36.2 15.2 14.0 12.0 1.8 6.71 5.49 618
(o/employee) (%) (%) (%)
(kg/toe) (kg/toe) (o/thousand m3)
Exploration & Production Injury frequency index Injury severity index HSE training hours/employee HSE expenditure/hydrocarbon production (1) (o/toe) Health expenditure/employee (o/employee) HSE investments/capital expenditure (%) Fuel consumption/ktoe produced (1) (toe/ktoe) GHG emissions/ktoe produced (1) (tCO2 eq/ktoe) Oil concentration in water discharges (mg/l) Re-injected water/production discharges + re-injected water (m3/m3)
2003 2.17 0.04 5.8 2.11 1,529 1.2 27.2 0.27 50 0.52
2004 3.34 0.04 76.1 2.40 957 2.9 27.7 0.27 38 0.45
2005 1.53 0.03 10.3 3.75 1,838 5.7 28.9 0.26 30 0.46
Gas & Power Injury frequency index Injury severity index HSE training hours/employee HSE expenditure/sales of natural gas to third parties and own consumption Health expenditure/employee HSE investments/capital expenditure CO2 emissions/toe consumed NOx emissions/kWheq produced (EniPower) SO2 emissions/kWheq produced (EniPower) CO2 emissions/transported gas - transport activities (Snam Rete Gas) NOx emissions/transported gas - transport activities (Snam Rete Gas) Natural gas emissions/transported gas - transport activities (Snam Rete Gas) GHG emissions/transported gas - transport activities (Snam Rete Gas) Natural gas emissions/distributed gas (Italgas) NOx emissions/distributed gas (Italgas)
2003 12.93 0.35 2.9

(o/103 m3) (o/employee) (%) (tCO2/toe) (g/kWheq) (g/kWheq) (t/Mm3) (t/Mm3) (%) (tCO2 eq/Mm3) (%) (kg/Mm3)
2004 14.27 0.37 3.0 1.31 240 4.44 2.49 0.468 0.574 6.0 0.014 0.058 13.8 0.61 16.5
2005 10.83 0.34 4.4 1.47 283 7.22 2.37 0.331 0.251 7.1 0.017 0.052 13.8 0.62 17.1
1.10 168 2.41 2.61 0.802 1.551 4.7 0.012 0.048 11.2 0.66 16.8
(1) Data refer to 100% of net production from activities under Enis operational control and exclude Stogits activities.
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E N I H E A LT H SA F E T Y E N V I RO N M E N T R E P O R T 2 0 0 5 / TA B L E S A N D G LO S S A R Y
Gas & Power CO2 emissions/distributed gas (Italgas) Energy consumption/transported energy - transport activities (Snam Rete Gas) Energy consumption/(transported energy*average distance) - transport activities (Snam Rete Gas) Re-gasification energy consumption/LNG fed into the network (GNL Italia) Energy consumption/distributed energy - gas distribution (Italgas) Energy performance index (EniPower)
(t/Mm3) (%) (%/103 km) (%) (%) (toe/MWheq)
2003 4.7 0.25 0.52 1.64 0.26 0.203
2004 4.1 0.31 0.63 1.68 0.22 0.180
2005 4.2 0.36 0.70 1.63 0.23 0.166
Refining & Marketing Injury frequency index Injury severity index HSE training hours/employee Health expenditure/employee HSE expenditure/sales of oil products HSE investments/capital expenditure CO2 emissions/toe consumed SO2 emissions/processed crude oil NOx emissions/processed crude oil Energy intensity index
2003 5.17 0.12 5.0 165 4.28 13.06 2.95 1.20 0.37 89.9
2004 6.36 0.14 6.2 276 5.65 21.99 3.10 1.13 0.34 89.6
2005 3.94 0.14 4.9 364 6.97 24.37 2.96 0.90 0.30 89.1
(o/employee) (o/t) (%) (tCO2/toe) (t/kt) (t/kt) (%)
Petrochemicals Injury frequency index Injury severity index HSE expenditure/productions HSE investments/capital expenditure
2003 6.88 0.17 24.65 48.25
2004 7.21 0.21 22.50 27.72
2005 7.35 0.27 22.73 22.52
(o/t) (%)
Oilfield Services Construction and Engineering Injury frequency index Injury severity index HSE expenditure*100/year-end order backlog HSE investments/capital expenditure
2003 1.78 0.04 0.41 2.3
2004 1.90 0.06 0.44 5.2
2005 1.45 0.05 0.62 3.6
(%) (%)
Other activities Injury frequency index Injury severity index Energy consumption indicator (EniTecnologie) Supplied water indicator (EniTecnologie) Net specific consumption (Syndial)
2003 6.15 0.21 0.52 23 0.379
2004 6.07 0.18 0.28 15 0.366
2005 2.70 0.08 0.21 19 0.329
(toe/kW) (m3/kW) (toe/t)
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Units of measurement, symbols and acronyms

Units of measurement
bbl boe g G GJ GWe GWh k kg kWh l m3 M MWe ppm t T toe TWh y barrel barrel of oil equivalent gram 109 giga (billion) giga Joule electric gigawatt gigawatthour 103 kilo (thousand) kilogram kilowatthour liter cubic meter 106 mega (million) electric megawatt parts per million metric ton 1012 tera (thousand billion) ton of oil equivalent terawatthour year
Symbols
CH4 CO CO2 CO2 eq O H2 NOx N2O SO2 methane carbon monoxide carbon dioxide CO2 equivalent (weighed sum of carbon dioxide and methane) euro hydrogen nitrogen oxides nitrogen protoxide sulfur dioxide
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Acronyms
APAT Italian National Agency for the Protection of the Environment and the Territory ASL Italian Local Health-Care Unit CCGT Combined Cycle Gas Turbine CCP CO2 Capture Project CDI Chemical Distribution Institute CDM Clean Development Mechanism CEFIC European Chemical Industry Council CIRM Italian Consortium for Medical Research CNIT Italian National Toxicological Information Center COD Chemical Oxygen Demand CONCAWE CONservation of Clean Air and Water in Europe COP Conference of the Parties DIHSE Health Safety and Environment Department DPI Individual Protection Device EARL East Asia Response Pte Ltd E&P Exploration & Production EIA Environmental Impact Assessment EMAS EcoManagement and Audit Scheme ET Emission Trading EU European Union FCC Fluid Catalytic Cracking FEEM Enrico Mattei Eni Foundation FPSO Floating Production, Storage and Offloading GAAP Generally Accepted Accounting Principles G&P Gas & Power GHG Greenhouse Gas GIPSI Computerized Management of Individual Health-Care Service Provision GNL Liquified Natural Gas GPRS General Packet Radio Service GPS Global Positioning System GRI Global Reporting Initiative HIV/AIDS Human Immunodeficiency Virus/Acquired Immune Deficiency Syndrome HPV High Production Volume HSE Health Safety Environment ICCA International Council of Chemical Associations ICRAM Central Institute for Sea Applied Research (Ministry for the Environment and Protection of the Territory) IFRS International Financial Reporting Standard IMO International Maritime Organization IPIECA International Petroleum Industry Environmental Conservation Association IPPC Integrated Pollution Prevention and Control ISM ISO ISVAP JI KCO LCA LNG LPG MEDEA MOIG MSG International Safety Management International Standard Organization Italian Institution for Surveillance on Collective-Interest and Private Insurances Joint Implementation Kazakhstan North Caspian Operating Company Life Cycle Analysis Liquefied Natural Gas Liquefied Petroleum Gas Master in Management and Economics of Energy and the Environment Mediterranean Oil Industry Group Management System Model for the protection of health, safety, environment and public safety Non Methane Volatile Organic Compounds Nigerian National Petroleum Corporation Oil Company International Marine Forum Occupational Health and Safety management Assessment System Oil Spills Response Ltd Poli-cyclical Aromatic Hydrocarbons Registration, Evaluation and Authorisation of Chemicals Refining & Marketing Regional Marine Pollution Emergency Response Centre for the Mediterranean Sea Return On Average Capital Expenditure Severe Acute Respiratory Syndrome Site of Community Importance Transportation Emergency Service Integrated System for Environmental Monitoring and Emergency Management Ship Inspection Report Programme Industrial Medicine and Hygiene Information System Italian National Safety System for Transportation of Hazardous Goods Suspended Particulate Matter Trans Austria Gasleitung Trans Europa Naturgas Pipeline Team for Greenhouse Gas Management Transmediterranean Pipeline Company Trans Tunisian Pipeline Co Ltd United Nations Framework Convention on Climate Change United Nations International Emergency Childrens Fund World Wildlife Fund
NMVOC NNPC OCIMF OHSAS OSRL PAH REACH R&M REMPEC
ROACE SARS SCI SET SIMAGE SIRE SMIL SNSTMP SPM TAG TENP TGGG TMPC TTPC UNFCCC UNICEF WWF
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Glossary
Average residual life of reserves Ratio between year-end reserves and production of the same year. Barrel Unit of volume equal to 159 liters. One barrel of crude oil corresponds to approximately 0.137 tonnes. Boe Unit of measure for both oil and natural gas. The latter is converted from cubic meters into barrels of oil equivalent using a multiplying coefficient of 0.00615. CDM - Clean Development Mechanism Flexible mechanism introduced by the Kyoto Protocol which allows governments and private organizations in industrialized countries to implement projects aimed at reducing emissions in developing countries in order to reach the established reduction targets. Those investing in such projects are entitled to carbon credits in the form of Certified Emission Reductions (CERs). Cracking Processes aimed at breaking down large molecules of hydrocarbons that make up the medium-heavy fractions obtained from primary distillation of crude oil in order to transform them into light and medium distillates. FPSO vessel Floating system for the production, storage, and transfer made up of a high-capacity oil tanker that can be equipped with a large-size hydrocarbon processing system. Such system, which is moored at the bow in order to keep a geostationary position, is in fact a temporarily fixed platform that connects underwater rig heads via risers from the sea bottom to the on-board processing, storage, and transfer systems. Geoprobe Hydraulic machine equipped with a dry, direct (penetration-based or direct-push) sinking advancement system, specifically designed for the characterization of the soil, subsoil, interstitial gases, and underground water, of contaminated and non-contaminated sites. International Emission Trading Flexible Mechanism introduced by the Kyoto Protocol allowing an industrialized country to sell to another country the AAU in excess of the threshold that the country undertook to reach. Jet Fuel Kerosene used in aviation turbine engines. The jet fuel supplied by Agip complies with the requirements established by the Joint Fuelling System check List for Jet A-1, current edition which includes the most restrictive limits set by the following two specifications: British MoD DEF STAN 91-91 (DERD 2494); ASTM Standard Specification D1655-99 for Aviation Turbine Fuels Jet A-1. JI - Joint Implementation Flexible mechanism introduced by the Kyoto Protocol allowing industrialized countries to cooperate for reaching the emission reduction targets. The host country may purchase Emission Reduction Units (ERUs) resulting from emission-reduction projects implemented in another industrialized country and use such units to comply with its obligations. Leverage It measures the degree of indebtedness of the company and is calculated as the ratio between net financial indebtedness and shareholders equity including the interests of third-party shareholders. Mineral storage It is necessary for technical and economic reasons in order to allow for optimal exploitation of natural gas fields. Modulation storage Aimed at meeting the modulation requirement of the hourly, daily, and seasonal demand trends. Offshore/Onshore The term offshore means a stretch of open sea and, by extension, the activities carried out there. Onshore refers to the mainland and, by extension, the activities carried out there. Petcoke Solid product obtained from the thermal cracking condensation process of heavy petroleum and oil residues until residues of different texture spongy or compact are obtained. Proved reserves These are the estimated quantities of hydrocarbons that, based on available geological and reservoir engineering data, can be commercially produced with reasonable certainty under the technical, contractual,
96
economic, and operating conditions existing at a specific point in time. Proved reserves may be divided into: developed proved reserves: quantities of hydrocarbons that are estimated to be obtained from existing wells, facilities and operating methods; undeveloped proved reserves: quantities of hydrocarbons that are estimated to be obtained through new drillings, facilities and operating methods where the company already has a specific investment plan for or shows a clear intention for their future implementation. Refinery gases Mixture of non-condensable gases (hydrogen, methane, ethane, ethylene, propylene, butylenes, and sometimes also CO2 and N2) produced in refineries during distillation of crude oil or processing of oil products. ROACE Return on average capital expenditure calculated as the ratio of net profit before interests of third-party shareholders, plus net financial charges relating to net financial indebtedness, minus the applicable taxes, and the average net invested capital. Shipper Companies that produce and purchase natural gas to re-sell it to end users (industries and thermo-electric power plants), wholesalers, local distribution companies, or other shippers. Steam cracking Thermal cracking process carried out in the presence of steam mixed to the hydrocarbon feed at approximately 800C and at low pressure. It is the key process in the petrochemical sector. The raw material used is virgin naphtha or condensed gas and provides the basic intermediate products for further processing. Strategic storage Aimed at tackling any shortage of or reduction in supplies from non-EU imports or crises in the gas system. Tar Heavy refinery residues, particularly those that are very rich in carbon pitch, which are obtained from thermal conversion processes (visbreaking) of heavy fractions.
Time Charter ship Charter contract by which the ship owner provides the charterer (i.e. the entity chartering the ship) with a ship for a specific period of time against payment of freight. For the whole charter contract term, which may amount to as many as 20 years, the charterer becomes the disponent owner and may use the ship at will provided that the charter party is complied with. The ship owner in general provides for crew, on-board supplies, maintenance and insurance contracts. The charterer bears the costs of fuel, port fees, and all other costs relating to the operational activities of the ship. An oil company charters third-party ships when the fleet it manages, is not sufficient to meet its transportation needs. Upstream/Downstream The term upstream means hydrocarbon exploration and production activities. Downstream means activities relating to the oil sector which take place downstream exploration and production. Wholesale market Set of marketing activities of petroleum products on the national market aimed at selling to wholesalers/retailers (mainly gasoil), to public administrations and consumers, such as industries, thermo-electric power plants (fuel oil), airlines (jet fuel), carriers, condominiums and private parties. Sales through the network of fuel distributors, maritime bunkers, sales to oil and petrochemical companies, to importers and international entities are excluded.
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E N I H E A LT H S A F E T Y E N V I RO N M E N T R E P O R T 2 0 0 5 / V E R I F I C AT I O N O F T H E R E P O R T
Verification of the Report
98
E N I H E A LT H SA F E T Y E N V I RO N M E N T R E P O R T 2 0 0 5 / V E R I F I C AT I O N O F T H E R E P O R T
99
Methodological remarks
Economic data The economic and financial data are derived from Enis Annual Report, prepared by the Administrative Department. Data on current expenditures and investments on health, safety and environment are directly acquired from the headquarters HSE departments and consolidated by Enis Environment - Analysis and Reporting unit responsible for monitoring and controlling HSE final results at the end of each accounting period. HSE economic accounting is compliant with ISTAT (the Italian Statistics Institute) classification. Expenditure is subdivided into investments, operating expenses for the reference year, and provisions. HSE investments refer to the gross composition of fixed capital specifically used for health, safety, environmental protection activities such as plants, equipment, and devices. Operating costs include costs for goods and services produced in-house or externally that are necessary for HSE activities, and other environmental costs relating to taxes and contributions paid to the public administration. Health The accounting system for health (called SCS), which was fully updated in 2005, is broken down into several sections: sanitary surveillance, healthcare abroad, health risk assessments, well-being status and health promotion activities for employees. Safety Safety performance is measured through the injury frequency index and injury severity index, both for employees and contractors. The frequency index is the ratio between the number of injuries causing absence of over one day and millions of worked hours. The severity index is the ratio between days of absence due to injuries and thousands of worked hours. The mortality index is the ratio between the number of deadly injuries and billions of worked hours. Environment The major environmental impacts on the atmosphere due to Enis activities involve acid emissions (oxygenated compounds of sulfur and nitrogen) and greenhouse gas (GHG) emissions. NOx and SO2 emissions were aggregated in the acidification potential expressed in t of SO2 eq. In 2005, the Eni Protocol for reporting GHG emissions was developed. It provides a guidance for developing and maintaining a GHG inventory in compliance with the current best practices (API Compendium, WRI Protocol, etc.). The Protocol presently considers CO2 and CH4 emissions which are the most relevant greenhouse gases for the Oil & Gas sector and requires collection of absolute data and data expressed in CO2 eq (methane has a CO2 equivalence factor of 21). Data on waste involve both remediation and production activities: in the dedicated paragraph they are presented separately with their specific final destinations. Human resources Staff accounting refers to personnel in service, given by the sum of the personnel on the companys register of employees and the personnel on loan from another Enis business unit. HSE staff data refer to the total HSE staff of subsidiaries (consolidated and non-consolidated in Enis annual report). Following to a review of the HSE training reporting system, global data refer to 2003-2005 as in the previous years accounting records only involved HSE training initiatives in Italy. Constant updating of the accounting systems has enhanced accounting procedures in terms both of the comprehensiveness of the area of consolidation and accuracy of measurements. If required, the historical series were updated using the same methods.
Mentioned countries Algeria Angola Argentina Australia Austria Azerbaijan Belgium Brazil
Canada China Congo Czech Republic Ecuador Egypt France Germany Hungary India
Indonesia Iran Italy Kazakhstan Libya Malta Mexico Nigeria Norway Pakistan
Portugal Qatar Russia Saudi Arabia Spain The Netherlands Tunisia Turkey United Arab Emirates Venezuela
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Societ per Azioni Headquarters: Rome, Piazzale Enrico Mattei, 1 Capital Stock: o 4,005,358,876 fully paid Tax identification number 00484960588 Branches: San Donato Milanese (MI) - Via Emilia, 1 San Donato Milanese (MI) - Piazza Ezio Vanoni, 1
Prepared by: Eni - Health Safety Environment Department Thanks go to all Eni functions, the Divisions and the companies involved in drawing up this Report Design: Opera Cover: Grafica Internazionale - Rome - Italy Layout and supervision: Studio Joly Srl - Rome - Italy Printing: Marchesi Grafiche Editoriali SpA - Rome - Italy Printed on environment friendly paper: Fedrigoni Symbol Freelife Satin For further information, contact: Eni SpA Health Safety Environment Department - DIHSE - Environment Via Laurentina, 449 - 00142 Rome Tel. +39 0659885850 - Fax +39 0659885358 reporthse.eni@eni.it
Societ per Azioni Piazzale Enrico Mattei 1 - 00144 Rome Tel +39.0659821 Fax +39.0659822141 www.eni.it

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Health Safety Environment 2005 report

Iran, Kuwait, Oman, Qatar, Saudi Arabia, United Arab Emirates

MESSAGE FROM URS ITALIA

(see page 98)

The following color code is used in the document:

Message to our stakeholders

Contents of the HSE Report Main results Company profile

Energy and environmental sustainability

Tables and glossary

Verification of the Report

Message to our stakeholders

Paolo Scaroni Chief Executive Officer and General Manager

Contents of the HSE Report

Methodological remarks page 100

3.79 0.09 8 22 0.000039 0.000065 204,822,858

4.47 0.11 9 26 0.000051 0.000063 175,293,279

3.17 0.10 5 13 0.000027 0.000037 182,763,908

268 9.15 52.8 2.89 150,422 1,043 1,823 121 122

274 9.24 58.3 2.71 168,805 1,681 2,274 226 133

256 9.74 61.9 2.57 142,336 2,014 2,870 335 155

(number) (number) (number) (number)

75,421 2,103 479,381 74,772

70,348 2,552 1,116,895 150,116

72,258 2,618 867,215 130,513

Participations in HSE training courses (2)

2003 Oil and condensates Natural gas Outside Italy

2003 Oil and condensates Natural gas Life index

Oil and condensate production by geographic area 1,111 thousand barrels/d

8% 28% 28% 16% 20%

Italy North Africa West Africa North Sea Rest of world

6% 26% 25% 11% 32%

Italy North Africa West Africa North Sea Rest of world

Natural gas production by geographic area 626 thousand boe/d

28% 27% 5% 17% 23%

Italy North Africa West Africa North Sea Rest of world

21% 35% 11% 11%

Italy North Africa West Africa North Sea

22% Rest of world

Italy Own consumption Rest of Europe Outside Europe

Supply of natural gas by geographic area 82.56 billion cubic meters

13% 28% 25% 16% 10% 7%

Italy Russia Algeria Other Netherlands Norway

The gas system SUPPLY INFRASTRUCTURE SALES

GAS PRODUCTION STORAGE

POWER STATIONS INDUSTRIAL CUSTOMERS RESIDENTIAL AND COMMERCIAL CUSTOMERS

Refinery intake in wholly-owned refineries Balanced capacity utilization rate

3,000 2,400 1,800 1,200 600

2003 Service stations Average throughput

Engineering: order backlog at period end 4,451 million euro

Financial and operating performance

The net profit of o8.8 billion achieved in 2005 is a new record

(Mboe) (years) (kboe)

(Gm3) (Gm3) (Gm3) (TWh)

The economic dimension of HSE

HSE expenditure by sector of activity

Eni - HSE expenditure and investments 1,600 1,200 800 400

2003 Investments Current expenditure

Eni - HSE expenditure breakdown 1,600 1,200 800 400

2003 Health Safety

HSE investments and expenditure 435 121 360 165 62

2003 Investments Current expenditure

2003 Current expenditure