SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

________________________

Form 6-K

Report of Foreign Issuer

Pursuant to Rule 13a-16 or 15d-16 of

the Securities Exchange Act of 1934

For the month of August 2021

Eni S.p.A.

(Exact name of Registrant as specified in its charter)

Piazzale Enrico Mattei 1 -- 00144 Rome, Italy

(Address of principal executive offices)

_________________________

(Indicate by check mark whether the registrant files or will file annual reports under cover of Form 20-F or Form 40-F.)

Form 20-F x  Form 40-F ¨

_________________________

(Indicate by check mark whether the registrant by furnishing the information contained in this Form is also thereby furnishing the information to the Commission pursuant to Rule 12g3-2b under the Securities Exchange Act of 1934.)

Yes ¨  No x

(If "Yes" is marked, indicate below the file number assigned to the registrant in connection with Rule 12g3-2(b): )

Table of contents

· Interim Consolidated Report as of June 30, 2021

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, hereunto duly authorised.

Eni S.p.A.
/s/ Paola Mariani
Name:	Paola Mariani
Title:	Head of Corporate
	Secretary’s Staff Office

Date: August 31, 2021

 

	Mission
	We are an energy company.
	We concretely support a just energy transition,
	with the objective of preserving our planet
	and promoting an efficient and sustainable access to energy for all. Our work is based on passion and innovation, on our unique strengths and skills,
	on the equal dignity of each person,
	recognizing diversity as a key value for human development,
	on the responsibility, integrity and transparency of our actions.
	We believe in the value of long-term partnerships with the Countries
	and communities where we operate, bringing long-lasting prosperity for all.

The mission represents more explicitly the Eni's path to face the global challenges, contributing to achieve the SDGs determined by the UN in order to clearly address the actions to be implemented by all the involved players.

Global goals for a sustainable development

The 2030 Agenda for Sustainable Development, presented in September 2015, identifies the 17 Sustainable Development Goals (SDGs) which represent the common targets of sustainable development on the current complex social problems. These goals are an important reference for the international community and Eni in managing activities in those Countries in which it operates.

Interim Consolidated Report as of June 30, 2021

Disclaimer

This report contains certain forward-looking statements in particular under the section “Outlook”, regarding capital expenditure, development and management of oil and gas resources, dividends, share buy-back, allocation of future cash flow from operations, future operating performance, gearing, targets of production and sales growth, new markets, and the progress and timing of projects. By their nature, forward-looking statements involve risks and uncertainties because they relate to events and depend on circumstances that will or may occur in the future. Actual results may differ from those expressed in such statements, depending on a variety of factors, including the impact of the pandemia disease, the timing of bringing new fields on stream; management’s ability in carrying out industrial plans and in succeeding in commercial transactions; future levels of industry product supply; demand and pricing; operational problems; general economic conditions; political stability and economic growth in relevant areas of the world; changes in laws and governmental regulations; development and use of new technology; changes in public expectations and other changes in business conditions; the actions of competitors and other factors discussed elsewhere in this document.

“Eni” means the parent company Eni SpA and its consolidated subsidiaries.

For the Glossary see website eni.com

	Interim Consolidated Report
4	Highlights
8	Key operating and financial results
	Operating review
10	Exploration & Production
12	Global Gas & LNG Portfolio
14	Refining & Marketing and Chemicals
17	Eni gas e luce, Power & Renewables
	Financial review and other information
20	Financial review
41	Risk factors and uncertainties
58	Outlook
59	Other information
	Condensed consolidated interim financial statements
62	Financial statements
68	Notes to the condensed consolidated interim financial statements
107	Management’s certification
108	Report of Independent Auditors
	Annex
110	List of companies owned by Eni SpA as of June 30, 2021
144	Changes in the scope of consolidation for the first half of 2021

4 HIGHLIGHTS

Highlights

| Financial performance

· Eni’s first half 2021 results were recorded on the back of a strong performance of all commodities: the Brent crude oil price increased from 40 $/bbl in the first half 2020 to an average of 65 $/bbl in the first six months of 2021; natural gas spot prices in Europe more than doubled; in the chemical sector the polyethylene-ethylene spread reached the highest value since 2015 to about 800 $/ton. On the negative side, the refining margins were extremely weak in the European/Mediterranean region, with the Eni benchmark margin SERM down to historic lows (-0.5 $/bbl on average in the first half 2021). This was due to continuing pandemic effects, which on one side with the gradual easing of OPEC+ production quotas supported the cost of the oil feedstock, while on the other side negatively affected demand for products, particularly middle distillates. In the wholesale gas business, spreads between the Italian PSV spot market and the spot prices at the "TTF" continental hub narrowed remarkably down to 2 €/kcm in the first half from 17 €/kcm in the first half 2020.

· Strong recovery in Group adjusted EBIT: €3.4 billion in the first half; up by €2.5 billion y-o-y. The Group result was driven by:

- a robust performance in the E&P segment, which reported €3.2 billion of EBIT, €3 billion higher than 2020, thanks to a better pricing environment and lower expenses, despite 110 kboe/d less hydrocarbon production due to seasonal maintenance activities. The half year result also benefitted from retroactive contractual revisions;

- the Chemical segment, which reported its best ever result with EBIT of €241 million (up by €372 million) due to an improved macro backdrop, higher products margins and higher production availability, allowing the segment to capture a rebound in demand, in addition to a contribution from the green chemical business;

- resilient results from the Eni gas e luce & Renewables business, which earned €247 million of EBIT (up by €74 million) benefitting from effective marketing activities, a growing customer base and better margins.

The other Eni’s segments which have lagged the recovery so far have nonetheless seen their trends improving during the first half:

- the GGP business reported a loss of €6 million (compared to a profit of €363 million in the first half of 2020) due to the reduction of gas spreads (PSV vs. TTF) and one-off gains in 2020 due to portfolio optimizations, partly offset by the benefits of contract renegotiations;

- the R&M business reported a loss to €171 million compared to a profit of €220 million of the same period of the previous year, mainly in the refining business, due to the long-lasting effects of COVID-19 leading to suppressed margins, as well as higher expenses for the purchase of emission allowances.

· Adjusted net profit back to pre-COVID levels: €1.20 billion in the first half of 2021 (up by €1.9 billion) from a loss of €0.66 million in the first half of 2020, due to a better operating performance and the normalization of the tax rate (it was 58% in the first half of 2021) due to an improved oil price scenario and an increased profitability outlook of the green activities in Italy.

· Cash flow from operations before changes in working capital at replacement cost: in the first half of 2021, the Group generated €4.76 billion of cash flow, which after funding €2.91 billion of net capex (unchanged y-o-y) left a free cash flow before working capital of €1.82 billion.

· Portfolio: net investment of about €0.87 billion, including net borrowings of acquired entities, fully deployed to accelerate growth in the green businesses.

· Net borrowings ante IFRS 16: €10 billion, down by €1.5 billion vs. December 31, 2020. Leverage lowered to 0.25 (vs. 0.31 as of December 31, 2020).

HIGHLIGHTS 5

| Eni’s shareholders remuneration

· Having reviewed the fundamentals of the energy scenario and the prospects of the oil market, Eni’s Board of Directors resolved to define a Brent reference scenario of 65 $/bbl. Based on the shareholders’ remuneration policy approved on February 18, 2021, this means:

- an annual dividend of €0.86/sh. for the fiscal year 2021¹, representing an increase of more than 100% from 2020 recovering the pre-COVID level;

- the start of a buy-back program of €400 million².

· As announced by the proxy conferred by the Shareholders Meeting held on May 12, 2021, the Board of Directors approved the distribution of 50% of the expected dividend, equal to €0.43/sh., as 2021 interim dividend to be paid in September³. This distribution is planned to be made from the retained earnings and other available capital reserves of the parent company Eni SpA.

| Operating performance

· Hydrocarbon production: 1.65 million boe/d, down by approximately 6% net of price effects compared to the same period of 2020. This change was due to greater maintenance activity (in Norway, Italy and the UK), which in the first half of 2020 was postponed, and due to lower activity in Nigeria and mature fields decline. Robust growth in Egypt driven by the performance of the Zohr gas field and in Indonesia with the Merakes start-up.

· In the first half of 2021, start-ups and ramp-ups added 50 kboe/d mainly due to Merakes in Indonesia that achieved the first gas in April, Berkine in Algeria, Agogo in Angola, and the Mahani gas project in the Sharjah Emirate (UAE).

· In the first half discovered 320 mmboe of explorative resources, more than 60% of the yearly target, with short time-to-market, leveraging the strategy focused on acreage close to existing infrastructures (infrastructure-led-exploration). Renewed the exploration portfolio with the addition of approximately 13,000 square kilometers of new leases in the UAE, Vietnam, the UK and Norway.

· Growth of the retail and business customers portfolio to 9.95 million of PoD, up by 250,000 PoD compared to December 31, 2020 (up by about 3%) leveraging the organic development in France and Greece and the 100% acquisition of Aldro Energía, engaged in the retail market in Spain.

· As of June 30, 2021, the renewable installed capacity was 331 MW, up by 8% compared to December 31, 2020. 2 GW of installed or under construction capacity is expected at year end, a strong increase over the previous target of approximately 1 GW. Leveraging the last acquisitions, the installed capacity is expected at 1.2 GW at year-end, up from an initial forecast of 0.7 GW.

Portfolio developments:

· In line with the rationalization program of Eni’s upstream portfolio, signed a memorandum of understanding with bp to evaluate the combination of the respective upstream portfolios in Angola, establishing a jointly-controlled venture based on the Vår Energi business model.

In Pakistan divested to a local player the entire upstream portfolio in the Country, including interests in eight development and production licenses and in four exploration licenses. In Nigeria divested the onshore production and development block OML 17 (Eni’s interest 5%).

¹ In line with the dividend policy announced to the financial market during the strategy presentation held on February 19, 2021, (see page 31) of which at the following URL https://eni.com/assets/documents/eng/investor/presentations/2021/strategy-4q-2020/strategy-2021-2024.pdf.

² The procedure to implement the buy-back program are detailed in the section “Other information – start of the buy-back program” of this Report.

³ Ex-dividend date being September 20, 2021 (record date September 21, 2021). The dividend will be paid on September 22, 2021. The Board of Directors resolved to distribute part of retained earnings and/or available capital reserves of the parent company Eni SpA as 2021 interim dividend in place of the resolution of the 2021 interim dividend, in accordance to Art. 2433 – bis c.c., scheduled in Eni’s financial calendar on September 16, 2021. The Company’s financial calendar has been amended accordingly and a dedicated press release has been disseminated to the market. ADR holders will receive €0.86/ADR.

6 HIGHLIGHTS

· In the GGP segment, in March 2021, it was agreed with the Arab Republic of Egypt (ARE) and the Spanish partner Naturgy of the JV Unión Fenosa Gas (UFG) to resolve all pending issues with the Egyptian partners and to resume operations at the Damietta plant. Through the subsequent restructuring of the UFG venture, Eni acquired a 50% interest in the Damietta plant and related liquefaction capacity as well as the gas marketing activities in Spain owned by UFG. The deal will strengthen Eni’s portfolio of LNG and its integrated strategy, leveraging on the integration with its upstream assets. Restarted the Damietta liquefaction plant and made few LNG loadings, leveraging on the capacity available to the Egyptian counterparty.

· Eni gas e luce entered the Iberic energy market with the signing of an agreement to acquire 100% of Aldro Energía, with a portfolio of approximately 250,000 retail customers of power, natural gas and services, and an agreement with X–Elio for the acquisition of three photovoltaic projects for an overall capacity of 140 MW.

· Established GreenIT, a joint venture with the Italian agency CDP Equity, for building, commissioning and managing power generation plants from renewable sources in Italy. The JV will target by 2025 an installed capacity of approximately 1 GW (51% Eni, 49% CDP Equity).

· The acquisition of FRI-EL Biogas Holding, the Italian leader in the biogas producing sector has now been completed, in order to transform biogas into biomethane to be supplied to the Eni’s retail service stations.

· Signed an agreement in Italy with Glennmont Partners and PGGM Infrastructure Fund to acquire 100% of a portfolio of thirteen onshore wind facilities already in operation, with a total capacity of 315 MW.

· Established an equal partnership with Red Rock Power, a leading Scottish company in the development of offshore wind projects, with the aim of presenting a competitive offer in Scotwind, the tender for wind power in Scotland and for further future projects. The two companies will also benefit from the support of Transmission Investment, a company engaged in the field of electricity transmission in the UK.

· In July 2021, signed an agreement for the acquisition from Azora Capital of a portfolio of nine renewable energy projects in Spain, for a total capacity of 1.2 GW. The operation includes the acquisition of three wind plants in development, one wind plant under construction, in the centre-north area of Spain, for a total of 230 MW, as well as, five large photovoltaic projects in an advanced stage of development for approximately 1 GW.

· In July 2021, acquired the Dhamma Energy Group, which owns photovoltaic projects under development in France and Spain. The portfolio includes a pipeline of projects distributed in the two countries, at different levels of maturity (approximately 3 GW), as well as plants, already in operation or at an advanced stage of construction, in France for about 120 MW.

Decarbonization initiatives:

· As part of the Hynet North West project for the construction of a CO₂ capture/storage hub in the UK, signed a framework agreement with the partner Progressive Energy Limited to accelerate the project, where Eni will develop and manage transport and storage of CO₂ at the semi-depleted oilfields in the Liverpool Bay.

· Eni signed a memorandum of understanding with Uniper in the United Kingdom to evaluate decarbonisation initiatives in Wales with possibility of developing depleted Eni oilfields in the Liverpool Bay into CO₂ storage hubs.

· As part of the net zero emissions strategy of the E&P segment by 2030 (relating Scope 1 and 2 emissions), Vårgronn, a subsidiary of Vår Energi, has signed a collaboration agreement with Equinor for the possible development of offshore wind installations in the North Utsira area.

HIGHLIGHTS 7

· In line with the strategy of energy transition in Egypt, Eni signed an agreement with the state energy and gas companies to assess the economic feasibility of green and blue hydrogen production, in synergy with the storage of CO₂ in depleted natural gas fields.

· Agreement with the Italian operator Be Charge, to increase the national supply of charging infrastructures for electric mobility. The charging stations will be powered by renewable energy supplied by Eni gas e luce.

· In the first half of 2021, the volumes of palm oil supplied to the production of bio-diesel was reduced leveraging on the start-up of a new Biomass Treatment Unit (BTU) at the Gela bio-refinery enabling the use of up to 100% of biomass not in competition with the food chain for the production of biofuels. Confirmed target to achieve zero use of palm oil to manufacture biofuels by 2023.

· Versalis signed an agreement with Saipem to internationally promote PROESA^®, Versalis’ proprietary technology used to produce sustainable bioethanol and chemicals from lignocellulosic biomass.

· Signed an agreement with A2A for a 20-year supply of cogenerated heat from the EniPower production plant in Bolgiano, to feed the Milan district heating network with approximately 54 GWh/year of low-emitting thermal energy.

| ESG performance and sustainable finance

· Issued the Sustainability-Linked Financing Framework, the first of its kind globally in the oil&gas sector, setting sustainable KPIs as credit ratings for the Group. Highlighted four KPIs: renewable energy installed capacity, Net Carbon Footprint Upstream (Scope 1 and 2), Net GHG Lifecycle Emissions (Scope 1, 2 and 3) and Net Carbon Intensity (Scope 1, 2 and 3) and the related medium-long term targets. Launched a seven-year sustainability-linked bond, in line with this framework, subject to the achievement of two targets: Net Carbon Footprint Upstream (Scope 1 and 2) equal or lower than 7.4 MtonCO₂eq as of December 31, 2024 (down by 50% compared to the 2018 baseline) and renewable energy installed capacity equal or higher than 5 GW as of December 31, 2025.

· TRIR (Total recordable injury rate) of the workforce: amounted to 0.37, a slight increase from the first half 2020 due to more adverse events recorded at Eni’s employees.

· Direct GHG emissions (Scope 1) from Eni’s operated assets: amounted to 19.5 mmtonnes CO₂ eq., a slight increase from the first half 2020, due to an ongoing recovery of the operations which in 2020 were affected by lockdown measures to contain the COVID-19 emergency.

· Direct GHG emissions (Scope 1)/operated hydrocarbon gross production (upstream) amounted to 20.2 tons CO₂ eq./kboe the index highlighted a better trend compared to the same period of 2020 mainly considering an ongoing recovery in operations.

· Emissions from methane fugitive (upstream): amounted to 6.6 ktonnes CH₄, a slight increase from the first half of 2020, due to an ongoing recovery of operations. Expected improvements by the end of 2021 with the finalization of the ongoing monitoring campaigns.

· Volumes of hydrocarbon sent to routine flaring at Eni’s operated assets (upstream): amounted to 0.6 billion Sm³, a slight increase from the same period of 2020, mainly due to the recovery of operations in certain plants located onshore Libya and impacted by routine flaring, which were shutdown in 2020 due to force majeure. Confirmed the flaring down projects planned for the year.

· Total volume of oil spills: amounted to 2.83 kbbl, reducing by the first half of 2020 benefitting from lower spills due to sabotage in Nigeria where Eni is applying the proprietary technology e-vpms (Eni Vibroacoustic Pipeline Monitoring System) for the detection of vibro-acoustic variations in pipelines and transported fluid.

· Water reinjection in the upstream segment: amounted to 59%, increased from the first half of 2020, due to the resolution of certain issues at the reinjection system at the Loango and Zatchi fields in Congo and the recovery of the operations at the Abu-Attifel and El Feel libyan fields.

8 HIGHLIGHTS

KEY OPERATING AND FINANCIAL RESULTS

		First Half
		2021	2020
Sales from operations	(€ million)	30,788	22,030
Operating profit (loss)		3,857	(3,775)
Adjusted operating profit (loss) ⁽ᵃ⁾		3,366	873
Exploration & Production		3,219	230
Global Gas & LNG Portfolio		(6)	363
Refining & Marketing and Chemicals		70	89
Eni gas e luce, Power & Renewables		310	276
Adjusted net profit (loss) ⁽ᵃ⁾⁽ᵇ⁾		1,199	(655)
per share ⁽ᶜ⁾	(€)	0.32	(0.18)
per ADR ⁽ᶜ⁾⁽ᵈ⁾	($)	0.77	(0.40)
Net profit (loss) ⁽ᵇ⁾		1,103	(7,335)
per share ⁽ᶜ⁾	(€)	0.30	(2.05)
per ADR ⁽ᶜ⁾⁽ᵈ⁾	($)	0.72	(4.52)
Comprehensive income ⁽ᵇ⁾	(€ million)	1,971	(7,533)
Net cash flow from operating activities	(€ million)	4,093	2,378
Capital expenditure		2,407	2,568
of which:  exploration		160	247
hydrocarbons development		1,547	1,740
Total assets at period end		119,989	115,085
Shareholders' equity including non-controlling interests at period end		40,580	38,839
Net borrowings at period end after IFRS 16		15,323	19,971
Net borrowings at period end before IFRS 16		10,040	14,329
Net capital employed at period end		55,903	58,810
of which:  Exploration & Production		46,488	50,083
Global Gas & LNG Portfolio		387	502
Refining & Marketing and Chemicals		9,103	8,966
Eni gas e luce, Power & Renewables		3,463	2,185
Leverage before IFRS 16		25	37
Leverage after IFRS 16		38	51
Gearing		27	34
Coverage		8.2	(7.2)
Current ratio		1.4	1.2
Debt coverage		26.7	11.9
Share price at period end	(€)	10.27	8.49
Weighted average number of shares outstanding	(million)	3,572.5	3,572.5
Market capitalization ⁽ᵉ⁾	(€ billion)	37.0	30.9
(a) Non-GAAP measure.
(b) Attributable to Eni's shareholders.
(c) Fully diluted. Ratio of net profit (loss)/cash flow and average number of shares outstanding in the period. Dollar amounts are converted on the basis of the average EUR/USD exchange rate quoted by Reuters (WMR) for the period presented.
(d) One American Depositary Receipt (ADR) is equal to two Eni ordinary shares.
(e) Number of outstanding shares by reference price at period end.

EMPLOYEES

		First Half
		2021	2020
Exploration & Production	(number)	9,616	10,348
Global Gas & LNG Portfolio		862	678
Refining & Marketing and Chemicals		11,394	11,517
Eni gas e luce, Power & Renewables		2,252	2,185
Corporate and other activities		7,312	7,449
Total group employees		31,436	32,177
of which: women		7,668	7,728
outside Italy		10,148	10,459
Female managers	(%)	27	26

HIGHLIGHTS 9

HEALTH, SAFETY AND ENVIRONMENT ^(a)

		First Half
		2021	2020
TRIR (Total Recordable Injury Rate)	(total recordable injuries/worked hours) x 1,000,000	0.37	0.24
employees		0.56	0.17
contractors		0.28	0.28
Direct GHG emissions (Scope 1)	(mmtonnes CO₂eq)	19.5	18.9
Direct GHG emissions (Scope 1)/operated hydrocarbon gross production (upstream)	(tonnes CO₂eq./kboe)	20.2	21.0
Methane fugitive emissions (upstream)	(ktonnes CH₄)	6.6	5.7
Volumes of hydrocarbons sent to routine flaring	(billion Sm³)	0.6	0.5
Total volume of oil spills (>1 barrel)	(barrels)	2,826	3,210
of which: due to sabotage		1,683	2,765
R&D expenditure	(€ million)	73	78
(a) KPIs refer to 100% of the operated assets, unless otherwise specified.

MAIN OPERATING DATA

		First Half
		2021	2020
EXPLORATION & PRODUCTION
Hydrocarbon production ⁽ᵃ⁾	(kboe/d)	1,650	1,760
liquids	(kbbl/d)	797	873
natural gas	(mmcf/d)	4,531	4,711
Production sold	(mmboe)	277	288
Average hydrocarbons realizations	($/boe)	43.36	27.50
Produced water re-injected	(%)	59	54
Direct GHG emissions (Scope 1)⁽ᵇ⁾	(mmtonnes CO₂eq)	11.24	10.74
Oil spills due to operations (>1 barrel)⁽ᵇ⁾	(barrels)	240	370
GLOBAL GAS & LNG PORTFOLIO
Natural gas sales	(bcm)	34.43	30.44
of which:       Italy		17.73	18.10
outside Italy		16.70	12.34
LNG sales		5.2	4.5
Direct GHG emissions (Scope 1)⁽ᵇ⁾	(mmtonnes CO₂eq)	0.33	0.18
REFINING & MARKETING AND CHEMICALS
Capacity of biorefineries	(mmtonnes/year)	1.1	1.1
Bio throughputs	(ktonnes)	308	376
Average bio refineries utilization rate		61	67
Retail market share in Italy		22.6	23.6
Retail sales of petroleum products in Europe	(mmtonnes)	3.26	2.96
Average throughput of service stations in Europe	(kliters)	684	621
Average oil refineries utilization rate	(%)	73	67
Production of petrochemical products	(ktonnes)	4,354	3,498
Average petrochemical plant utilization rate	(%)	69	59
Direct GHG emissions (Scope 1)⁽ᵇ⁾	(mmtonnes CO₂eq)	3.29	3.14
SOₓ emissions (sulphur oxide)	(ktonnes SOₓeq.)	1.48	1.54
Direct GHG emissions (Scope 1)/refinery throughputs (raw and semi-finished materials)⁽ᵇ⁾	(tonnes CO₂ eq./ktonnes)	219	246
ENI GAS E LUCE, POWER & RENEWABLES
Retail gas sales	(bcm)	4.60	4.51
Retail power sales to end customers	(TWh)	7.52	6.02
Thermoelectric production		10.20	10.34
Power sales in the open market		12.97	12.10
Renewable installed capacity at period end	(MW)	331	251
Energy production from renewable sources	(GWh)	258	144
Direct GHG emissions (Scope 1)⁽ᵇ⁾	(mmtonnes CO₂eq)	4.6	4.9
Direct GHG emissions (Scope 1)/equivalent produced electricity (EniPower)⁽ᵇ⁾	(gCO₂ eq./kWh eq.)	384	298
(a) Includes Eni's share in joint ventures and equity-accounted entities.
(b) KPIs refer to 100% of the operated assets.

10 OPERATING REVIEW | EXPLORATION & PRODUCTION

Operating review

EXPLORATION & PRODUCTION

PRODUCTION AND PRICES

		First half
		2021	2020	Change	% Ch.
Production
Liquids	(kbbl/d)	797	873	(76)	(8.7)
Natural gas	(mmcf/d)	4,531	4,711	(180)	(3.8)
Hydrocarbons	(kboe/d)	1,650	1,760	(110)	(6.3)
Average realizations
Liquids	($/bbl)	60.56	33.49	27.07	80.8
Natural gas	($/kcf)	4.75	3.84	0.91	23.6
Hydrocarbons	($/boe)	43.36	27.50	15.86	57.7

In the first half of 2021, oil and natural gas production averaged 1,650 kboe/d, down by 6% compared to the same period of 2020. The decline was driven by maintenance activity mainly in Norway, Italy and the United Kingdom, which in the first half of 2020 was postponed, lower activity in Nigeria and mature field declines. On the positive side, production was supported by the increase in Egypt driven by the performance of the Zohr field, global gas demand recovery and the restart of the Damietta liquefaction plant as well as the Merakes start-up in Indonesia.

Liquids production was 797 kbbl/d, representing a reduction from the first half of 2020. The reduction was due to higher maintenance activity, price effects, a decrease in Nigeria and mature field declines, partly offset by continuing growth in Egypt.

Natural gas production amounted to 4,531 mmcf/d, down by 3.8% or down by 180 mmcf/d compared to the first half of 2020. Lower production was due to higher maintenance activity, mature field declines and a decrease in Nigeria. These negatives were partly offset by a robust recovery of natural gas demand in certain areas (mainly in Egypt) and the start-up of Merakes in Indonesia.

Oil and gas production sold amounted to 276.6 mmboe. The 22 mmboe difference over production (298.6 mmboe) mainly reflected volumes consumed in operations (20 mmboe), changes in inventory levels and other changes.

MINERAL RIGHT PORTFOLIO AND EXPLORATION ACTIVITIES

In the first half of 2021, Eni performed its operations in 42 countries. As of June 30, 2021, Eni’s mineral right portfolio consisted of 794 exclusive or shared properties for exploration and development oil and gas activities as well as 1 shared property for the CCUS project in the United Kingdom. Total acreage was 340,188 square kilometers net to Eni, of which 577 square kilometers related to the CCUS activities in the United Kingdom. As of December 31, 2020, total acreage was 336,449 square kilometers net to Eni.

In the first half of 2021, changes in total net acreage mainly derived from: (i) acquisition of new leases mainly in Vietnam, Angola, Norway, the United Arab Emirates and Egypt, as well as the CCUS project in the United Kingdom for a total acreage of approximately 13,100 square kilometers; (ii) the relinquishment of licenses mainly in Myanmar, Egypt, Norway, Italy and the United Kingdom for a total acreage of approximately 7,900 square kilometers; (iii) net acreage increase also due to interest changes mainly in Italy and the United States for a total acreage of 60 square kilometers; and (iv) net acreage decrease mainly in Italy and Mozambique for a total acreage of 1,500 square kilometers.

In the first half of 2021, a total of 14 exploratory wells were drilled (7.1 being Eni’s share), as compared to 19 exploratory wells drilled in the first half of 2020 (9.5 being Eni’s share).

OPERATING REVIEW | EXPLORATION & PRODUCTION 11

PRODUCTION OF OIL AND NATURAL GAS BY REGION

		First half
		2021	2020
Production of oil and natural gas ⁽ᵃ⁾⁽ᵇ⁾	(kboe/d)	1,650	1,760
Italy		82	109
Rest of Europe		205	249
North Africa		260	255
Egypt		363	285
Sub-Saharan Africa		301	379
Kazakhstan		150	171
Rest of Asia		158	183
Americas		114	112
Australia and Oceania		17	17
Production sold ⁽ᵃ⁾	(mmboe)	277	288
PRODUCTION OF LIQUIDS BY REGION
		First half
		2021	2020
Production of liquids	(kbbl/d)	797	873
Italy		34	47
Rest of Europe		128	144
North Africa		128	117
Egypt		82	66
Sub-Saharan Africa		190	232
Kazakhstan		101	115
Rest of Asia		76	91
Americas		58	61
Australia and Oceania
PRODUCTION OF NATURAL GAS BY REGION
		First half
		2021	2020
Production of natural gas	(mmcf/d)	4,531	4,711
Italy		254	329
Rest of Europe		411	559
North Africa		702	733
Egypt		1,492	1,160
Sub-Saharan Africa		590	781
Kazakhstan		262	297
Rest of Asia		436	489
Americas		296	274
Australia and Oceania		88	89
(a) Includes Eni’s share of production of equity-accounted entities.
(b) Includes volumes of hydrocarbons consumed in operation (111 and 120 kboe/d in the first half of 2021 and 2020, respectively).

12 OPERATING REVIEW | GLOBAL GAS & LNG PORTFOLIO

GLOBAL GAS & LNG PORTFOLIO

SUPPLY OF NATURAL GAS

In the first half of 2021, Eni’s consolidated subsidiaries supplied 34.40 bcm of natural gas, with an increase of 5.14 bcm or 17.6% from the first half of 2020.

Gas volumes supplied outside Italy from consolidated subsidiaries (32.44 bcm), imported in Italy or sold outside Italy, represented approximately 95% of total supplies, with an increase of 6.14 bcm or up by 23.3% from the first half of 2020 mainly reflecting higher volumes purchased in Russia (up by 3.54 bcm), Algeria (up by 3.52 bcm), and the Netherlands (up by 0.34 bcm) partially offset by lower purchases in Libya (down by 0.77 bcm) and in Qatar (down by 0.17 bcm). Supplies in Italy (1.96 bcm) decreased by 33.8% from the first half of 2020.

		First half
	(bcm)	2021	2020	Change	% Ch.
Italy		1.96	2.96	(1.00)	(33.8)
Russia		13.79	10.25	3.54	34.5
Algeria (including LNG)		5.35	1.83	3.52	..
Libya		1.60	2.37	(0.77)	(32.5)
Netherlands		0.98	0.64	0.34	53.1
Norway		3.74	3.63	0.11	3.0
United Kingdom		1.15	0.88	0.27	30.7
Indonesia (LNG)		0.76	0.56	0.20	35.7
Qatar (LNG)		1.16	1.33	(0.17)	(12.8)
Other supplies of natural gas		0.86	3.26	(2.40)	(73.6)
Other supplies of LNG		3.05	1.55	1.50	96.8
OUTSIDE ITALY		32.44	26.30	6.14	23.3
TOTAL SUPPLIES OF ENI'S CONSOLIDATED SUBSIDIARIES		34.40	29.26	5.14	17.6
Offtake from (input to) storage		(0.34)	0.04	(0.38)	..
Network losses, measurement differences and other changes		(0.01)	(0.02)	0.01	50.0
AVAILABLE FOR SALE BY ENI'S CONSOLIDATED SUBSIDIARIES		34.05	29.28	4.77	16.3
Available for sale by Eni's affiliates		0.38	1.16	(0.78)	(67.2)
TOTAL AVAILABLE FOR SALE		34.43	30.44	3.99	13.1

SALES

		First half
		2021	2020	Change	% Ch.
Spot Gas price at Italian PSV	(€/kcm)	231	97	134	138.2
TTF		229	80	150	187.3
Spread PSV vs. TTF		2	17	(15)	(89.5)
Natural gas sales	(bcm)
Italy		17.73	18.10	(0.37)	(2.0)
Rest of Europe		13.90	10.47	3.43	32.8
of which: Importers in Italy		1.45	1.94	(0.49)	(25.3)
European markets		12.45	8.53	3.92	46.0
Rest of World		2.80	1.87	0.93	49.7
Worldwide gas sales  ⁽*⁾		34.43	30.44	3.99	13.1
of which: LNG sales		5.20	4.50	0.70	15.6
(*) Data include intercompany sales.

OPERATING REVIEW | GLOBAL GAS & LNG PORTFOLIO 13

In the first half of 2021, natural gas sales were 34.43 bcm, up by 13.1% from the first half of 2020, mainly due to higher volumes marketed outside Italy (Turkey and France) leveraging on the economic recovery and increasing LNG volumes marketed mainly by the Damietta plant.

Sales in Italy were down by 2% to 17.73 bcm, mainly due to lower sales marketed mainly to hub and thermoelectric segment. Sales in European markets (12.45 bcm) increased by 46% as result of the recovery in consumptions, mainly in Turkey following higher gas nominations made by Botas and in France.

		First half
	(bcm)	2021	2020	Change	%Ch.
ITALY		17.73	18.10	(0.37)	(2.0)
Wholesalers		7.44	6.86	0.58	8.5
Italian gas exchange and spot markets		4.81	5.40	(0.59)	(10.9)
Industries		2.07	2.13	(0.06)	(2.8)
Power generation		0.43	0.74	(0.31)	(41.9)
Own consumption		2.98	2.97	0.01	0.3
INTERNATIONAL SALES		16.70	12.34	4.36	35.3
Rest of Europe		13.90	10.47	3.43	32.8
Importers in Italy		1.45	1.94	(0.49)	(25.3)
European markets:		12.45	8.53	3.92	46.0
Iberian Peninsula		1.90	1.82	0.08	4.4
Germany/Austria		0.24	0.17	0.07	41.2
Benelux		1.91	1.60	0.31	19.4
United Kingdom		1.15	0.87	0.28	32.2
Turkey		4.06	1.68	2.38	..
France		3.05	2.30	0.75	32.6
Other		0.14	0.09	0.05	55.6
Extra European markets		2.80	1.87	0.93	49.7
WORLDWIDE GAS SALES		34.43	30.44	3.99	13.1

		First half
	(bcm)	2021	2020	Change	%Ch.
Total sales of subsidiaries		33.97	29.29	4.68	16.0
Italy (including own consumption)		17.73	18.10	(0.37)	(2.0)
Rest of Europe		13.58	9.81	3.77	38.4
Outside Europe		2.66	1.38	1.28	92.8
Total sales of Eni's affiliates (net to Eni)		0.46	1.15	(0.69)	(60.0)
Rest of Europe		0.32	0.66	(0.34)	(51.5)
Outside Europe		0.14	0.49	(0.35)	(71.4)
WORLDWIDE GAS SALES		34.43	30.44	3.99	13.1

LNG SALES

		First half
	(bcm)	2021	2020	Change	%Ch.
Europe		2.4	2.6	(0.2)	(7.7)
Outside Europe		2.8	1.9	0.9	47.4
TOTAL LNG SALES		5.2	4.5	0.7	15.6

LNG sales (5.2 bcm, included in worldwide gas sales) mainly concerned LNG from Qatar, Egypt, Nigeria, Indonesia and mainly marketed in Europe, China and Pakistan.

14 OPERATING REVIEW | REFINING & MARKETING AND CHEMICALS

REFINING & MARKETING AND CHEMICALS

		First half
		2021	2020	Change	% Ch.
Standard Eni Refining Margin (SERM)	($/bbl)	(0.5)	2.9	(3.4)	(117.2)
Throughputs in Italy	(mmtonnes)	7.85	7.21	0.64	8.9
Throughputs in the rest of World		5.30	4.16	1.14	27.4
Total throughputs		13.15	11.37	1.78	15.7
Average refineries utilization rate	(%)	73	67
Bio throughputs	(ktonnes)	308	376	(68)	(18.1)
Average bio refineries utilization rate	(%)	61	67
Marketing
Retail sales in Europe	mmtonnes	3.26	2.96	0.30	10.1
Retail sales in Italy		2.31	2.01	0.30	14.9
Retail sales in the rest of Europe		0.95	0.95	0.00	0.0
Retail market share in Italy	(%)	22.6	23.6
Wholesale sales in Europe	(mmtonnes)	3.72	3.83	(0.11)	(2.9)
Wholesale sales in Italy		2.75	2.67	0.08	3.0
Wholesale sales in the rest of Europe		0.97	1.16	(0.19)	(16.4)
Chemicals
Sales of petrochemical products	(mmtonnes)	2.32	1.91	0.41	21.6
Average plant utilization rate	(%)	69	59

REFINING & MARKETING

In the first half of 2021, Eni’s Standard Refining Margin – SERM – reported non-remunerative values (minus 0.5 $/barrel, down by 3.4 $/barrel from the first half of 2020). This trend reflects the continuing pandemic effects, which on one side with the only gradual easing of OPEC+ supported the cost of the oil feedstock, while on the other side it negatively affected demands for products, particularly the middle distillates. On the positive side, the discount between sour crudes like the Ural vs. light-sweet crudes widened, which helped margins (the spread was minus 1.4 $/bbl vs. a minus 0.9 $/bbl in the first half of 2020).

Eni refining throughputs on own account were 13.15 mmtonnes, up by 15.7% from the first half of 2020, in response to a lower impact of the COVID-19 pandemic compared to the comparative period which was negatively affected by the almost full lockdown of the economy, partly offset by a depressed refining scenario. Throughputs elsewhere increased mainly at the ADNOC plants, where the performance was negatively affected by a prolonged plant standstill in the first half of 2020. Increased by 6 percentage points the average plant utilization rate (73%).

Bio throughputs were 308 ktonnes, down by 18% from the same period of the previous year against the backdrop of a depressed trading environment, which nonetheless saw an improvement in June.

		First half
	(mmtonnes)	2021	2020	Change	%Ch.
Retail		2.31	2.01	0.30	14.9
Wholesale		2.75	2.67	0.08	3.0
Petrochemicals		0.30	0.30
Other sales		4.91	4.68	0.23	4.9
Sales in Italy		10.27	9.66	0.61	6.3
Retail rest of Europe		0.95	0.95
Wholesale rest of Europe		0.97	1.16	(0.19)	(16.4)
Wholesale outside Europe		0.25	0.23	0.02	8.7
Other sales		0.66	0.49	0.17	34.7
Sales outside Italy		2.83	2.83
TOTAL SALES OF REFINED PRODUCTS		13.10	12.49	0.61	4.9

OPERATING REVIEW | REFINING & MARKETING AND CHEMICALS 15

In the first half of 2021, sales volumes of refined products (13.10 mmtonnes) were up by 0.61 mmtonnes or by 4.9% from the first half of 2020.

Retail sales in Italy were 2.31 mmtonnes increasing in all the segments (up by 14.9%) thanks to the gradual restart of economic activities being the first half of 2020 impacted by the lockdown measures. Eni’s retail market share was 22.6% (23.6% in the first half of 2020).

As of June 30, 2021, Eni’s retail network in Italy consisted of 4,127 service stations, recording a decrease from June 30, 2020 (4,153 service stations), resulting from the negative balance of acquisitions/releases of lease concessions (26 units).

Average throughput (684 kliters) increased by 63 kliters from the first half of 2020 (621 kliters).

Wholesale sales in Italy were 2.75 mmtonnes, up by 3% from the first half of 2020 mainly due to higher sales of fuel oil and gasoil, partly offset by declining sales of gasoline, jet fuel and bunker due to the prolonged effects of lockdown to contain the spread of the COVID-19.

Supplies of feedstock to the petrochemical industry (0.30 mmtonnes) were substantially in line from the comparative period.

Retail and wholesale sales in the rest of Europe of 1.92 mmtonnes were down by 9% from the first half of 2020 mainly as a result of lower volumes marketed in Germany, Austria and Switzerland, following the lower demand due to the lockdown, partly offset by higher sales in France.

Other sales in Italy and outside Italy were 5.57 mmtonnes, up by 7.7% from the first half of 2020.

Retail and wholesale sales of refined products		First half
	(mmtonnes)	2021	2020	Change	%Ch.
Italy		5.06	4.68	0.38	8.1
Retail sales		2.31	2.01	0.30	14.9
Gasoline		0.59	0.50	0.09	18.0
Gasoil		1.56	1.38	0.18	13.0
LPG		0.14	0.12	0.02	16.7
Other		0.02	0.01	0.01	..
Wholesale sales		2.75	2.67	0.08	3.0
Gasoil		1.48	1.41	0.07	5.0
Fuel Oil		0.13	0.01	0.12	..
LPG		0.09	0.09
Gasoline		0.04	0.13	(0.09)	(69.2)
Lubricants		0.04	0.04
Bunker		0.31	0.33	(0.02)	(6.1)
Jet Fuel		0.28	0.34	(0.06)	(17.6)
Other		0.38	0.32	0.06	18.8
Outside Italy (retail+wholesale)		2.17	2.33	(0.16)	(6.9)
Gasoline		0.46	0.52	(0.06)	(11.5)
Gasoil		1.27	1.30	(0.03)	(2.3)
Jet Fuel		0.02	0.06	(0.04)	(66.7)
Fuel Oil		0.03	0.07	(0.04)	(57.1)
Lubricants		0.06	0.04	0.02	50.0
LPG		0.26	0.24	0.02	8.3
Other		0.07	0.10	(0.03)	(30.0)
TOTAL RETAIL AND WHOLESALE SALES		7.23	7.01	0.22	3.1

16 OPERATING REVIEW | REFINING & MARKETING AND CHEMICALS

CHEMICALS

		First half
	(ktonnes)	2021	2020	Change	%Ch.
Intermediates		3,225	2,431	794	32.7
Polymers		1,129	1,067	62	5.8
Production		4,354	3,498	856	24.5
Consumption and losses		(2,345)	(1,790)	(555)	(31.0)
Purchases and change in inventories		312	200	112	56.0
TOTAL AVAILABILITY		2,321	1,908	413	21.6
Intermediates		1,364	1,028	336	32.7
Polymers		957	880	77	8.8
TOTAL SALES		2,321	1,908	413	21.6

Petrochemical production of 4,354 ktonnes increased by 856 ktonnes (up by 24.5%) mainly in the intermediates business due to higher product availability, compared to the comparative period, which were affected by higher prolonged maintenance standstills following COVID-19 emergency.

Petrochemical sales of 2,321 ktonnes increased by 413 ktonnes (up by 21.6%). Main increases were reported in the intermediate, driven by recovery of demand in the reference segments, lower imports from producer countries, as well as higher product availability.

Petrochemical product margins improved significantly driven by the macroeconomic recovery, which mitigated the competitive pressure, and contingent factors due to a temporally supply shortage. Sharp increases were recorded in the polyethylene segment driven by the recovery in products demand, partial shortage in commodities production, as well as weak trends in the upturn of the logistic segment; furthermore, in the styrenics/elastomers segments due to higher demand. Cracker margin recorded a significant reduction in the two reporting periods, due to higher cost of commodities.

OPERATING REVIEW | ENI GAS E LUCE, POWER & RENEWABLES 17

ENI GAS E LUCE, POWER & RENEWABLES

		First half
		2021	2020	Change	% Ch.
EGL & Renewables
Retail gas sales	bcm	4.60	4.51	0.09	2.0
Retail power sales to end customers	TWh	7.52	6.02	1.50	24.9
Retail/business customers (POD)	mln pod	9.95	9.69	0.27	2.7
Energy production from renewable sources	GWh	258.1	144.1	114.0	79.1
Renewable installed capacity at period end	MW	331	251	80	31.9
of which:  - photovoltaic	%	71	78
- wind		26	19
- installed storage capacity		3	3
Power
Power sales in the open market	TWh	12.97	12.10	0.87	7.2
Thermoelectric production		10.20	10.34	(0.14)	(1.4)

ENI GAS E LUCE

	First half
(bcm)	2021	2020	Change	% Ch.
ITALY	2.97	3.06	(0.09)	(2.9)
Resellers	0.10	0.10	0.00	0.0
Industries	0.17	0.13	0.04	30.8
Small and medium-sized enterprises and services	0.42	0.41	0.01	2.4
Residential	2.28	2.42	(0.14)	(5.8)
INTERNATIONAL SALES	1.63	1.45	0.18	12.4
European markets:
France	1.33	1.18	0.15	12.7
Greece	0.24	0.22	0.02	9.1
Other	0.06	0.05	0.01	20.0
RETAIL GAS SALES	4.60	4.51	0.09	2.0

In the first half of 2021, retail gas sales in Italy and in the rest of Europe amounted to 4.60 bcm, up by 0.09 bcm or 2% from the previous year. Sales in Italy amounted to 2.97 bcm down by 2.9% compared to the first half of 2020, the reduction was mainly due to lower volumes marketed at residential segment, partially mitigated by higher volumes marketed at the industrial segment.

Sales in the European markets (1.63 bcm) reported an increase of 12.4% or 0.18 bcm compared to the first half of 2020. In France, sales increased by 0.15 bcm compared to the comparative period due to the effective commercial initiatives.

In the first half of 2021, retail power sales to end customers, managed by Eni gas e luce and the subsidiaries in France and Greece, amounted to 7.52 TWh, an increase by 24.9% from the first half of 2020, due to growth of retail customers portfolio (up by 250,000 customers vs. December 31, 2020) and higher volumes sold to the retail and industrial segments in Europe, leveraging on the expansion in Spain and Portugal, as consequence of Aldro Energía acquisition.

18 OPERATING REVIEW | ENI GAS E LUCE, POWER & RENEWABLES

RENEWABLES

		First half
		2021	2020	Change	% Ch.
Energy production from renewable sources	(GWh)	258.1	144.1	114.0	79.1
of which: photovoltaic		135.1	109.8	25.2	23.0
wind		123.0	34.3	88.8	..
of which: Italy		62.4	52.5	9.9	18.8
outside Italy		195.7	91.6	104.1	..
Renewable installed capacity at period end	(MW)	331	251	80	31.9
of which: photovoltaic		236	195	40	20.7
wind		87	48	39	81.1
installed storage capacity		8	8	0	0
(a) Electricity for Eni’s production sites consumptions.

Energy production from renewable sources amounted to 258.1 GWh (of which 135.1 GWh photovoltaic and 123.0 GWh wind) up by 114.0 GWh compared to the first half of 2020. The increase in production compared to the previous year benefitted from the entry in operations of new plants in Italy and abroad, as well as the contribution of assets already operating in the United States, acquired in the fourth quarter of 2020.

As of June 30, 2021, the renewable installed capacity was 331 MW, up by 32% compared to the first quarter of 2020. Compared to June 30, 2020 the capacity increased by 80 MW thanks to the completion of plants in Australia (up by 25 MW, photovoltaic capacity), in Italy (up by 24 MW, onshore wind capacity), as well as the acquisition of the U.S. assets already in operation (up by 30 MW, photovoltaic and wind capacity).

Renewable installed capacity at period end (Eni's share)
		First half
(MW)		2021	2020	Change	% Ch.
	(technology)
ITALY	photovoltaic	84	84	0	0
OUTSIDE ITALY		160	120	40	34
Algeria	photovoltaic	5	5	0	0
Australia	photovoltaic	64	39	25	64
Pakistan	photovoltaic	10	10	0	0
Tunisia	photovoltaic	9	9	0	0
United States	photovoltaic	72	57	15	27
Total photovoltaic installed capacity		244	203	40	20
Italy	wind	24	0	24	#DIV/0!
United States	wind	15	0	15
Kazakhstan	wind	48	48	0	0
Total onshore wind installed capacity		87	48	39	81
TOTAL RENEWABLE INSTALLED CAPACITY AT PERIOD END (INCLUDING INSTALLED STORAGE POWER)		331	251	80	32
of which installed storage power		8	8	0	0

As of June 30, 2021, the capacity under construction/advanced stage of development amounted to approximately 2 GW mainly relating to the latest acquisitions mainly in Italy, and the ongoing projects in Spain and France, new capacity in Kazakhstan (98 MW, of which 48 MW wind onshore and 50 MW PV solar), as well as the development of Eni’s activities in Italy and USA and wind offshore projects in UK (Dogger Bank A/B).

OPERATING REVIEW | ENI GAS E LUCE, POWER & RENEWABLES 19

POWER

		First half
		2021	2020	Change	% Ch.
Purchases of natural gas	(mmcm)	2,170	2,110	60	2.8
Purchases of other fuels	(ktoe)	3	87	(84)	(96.6)
Power generation	(TWh)	10.20	10.34	(0.14)	(1.4)
Steam	(ktonnes)	3,801	3,861	(60)	(1.6)
Availability of electricity		First half
(TWh)		2021	2020	Change	% Ch.
Power generation		10.20	10.34	(0.14)	(1.4)
Trading of electricity ⁽ᵃ⁾		10.32	7.93	2.39	30.1
Availability		20.52	18.27	2.25	12.3
Power sales in the open market		12.97	12.10	0.87	7.2
(a) Includes positive and negative imbalances (difference between the electricity effectively fed-in and as scheduled).

Eni’s power generation sites are located in Brindisi, Ferrera Erbognone, Ravenna, Mantova, Ferrara and Bolgiano. As of June 30, 2021, installed operational capacity of EniPower’s power plants was 4.6 GW. In the first half of 2021, thermoelectric power generation was 10.20 TWh, slightly decreased compared to 2020. Electricity trading (10.32 TWh) reported an increase of 30.1% from 2020, thanks to the optimization of inflows and outflows of power.

In the first half of 2021, power sales in the open market were 12.97 TWh, representing an increase of 7.2% compared to 2020, due to economic downturn.

20 FINANCIAL REVIEW AND OTHER INFORMATION | FINANCIAL REVIEW

Financial review

PROFIT AND LOSS ACCOUNT

		First Half
	(€ million)	2021	2020	Change	% Ch.
Sales from operations		30,788	22,030	8,758	39.8
Other income and revenues		651	460	191	41.5
Operating expenses		(23,677)	(18,939)	(4,738)	(25.0)
Other operating income (expense)		48	(373)	421	..
Depreciation, depletion, amortization		(3,322)	(3,857)	535	13.9
Net impairment reversals (losses) of tangible and intangible and right-of-use assets		(602)	(2,749)	2,147	78.1
Write-off of tangible and intangible assets		(29)	(347)	318	91.6
Operating profit (loss)		3,857	(3,775)	7,632	..
Finance income (expense)		(473)	(526)	53	10.1
Income (expense) from investments		(427)	(1,379)	952	69.0
Profit (loss) before income taxes		2,957	(5,680)	8,637	..
Income taxes		(1,845)	(1,652)	(193)	(11.7)
Tax rate (%)		62.4	..	..
Net profit (loss)		1,112	(7,332)	8,444	..
attributable to:
- Eni's shareholders		1,103	(7,335)	8,438	..
- Non-controlling interest		9	3	6	..

Reported results

Commodities and energy prices performed strongly in the first half of 2021: the Brent price increased from 40 $/bbl in the first half of 2020 to 65 $/bbl in the first half of 2021; natural gas prices in Europe more than doubled for the Italian reference spot price “PSV” and the continental reference spot price “TTF”; in the chemical sector the polyethylene-ethylene spread reached the record value to about 800 $/ton. On the negative side, the refining margins continued to be extremely weak in the European/Mediterranean region with the Eni benchmark margin SERM down to historic lows (-0.5 $/bbl on average in the first half of 2021). This was due to the continuing pandemic effects, which on one side with the gradual easing of OPEC+ supported the cost of the oil feedstock, while on the other side negatively affected demand for products, particularly middle distillates. In the wholesale gas business, spreads between the Italian PSV spot market and the spot prices at the "TTF" continental hub narrowed remarkably down to 2 €/kcm in the first half of 2021 from 17 €/kcm in compared period of the previous year.

In the first half of 2021, net profit attributable to Eni’s shareholders was €1,103 million compared to the net loss of €7,335 million in the same period of 2020. Net cash provided by operating activities increased by 72% to €4,093 million, while net borrowing excluding the IFRS 16 lease liabilities decreased by €1,528 million from December 31, 2020 to €10,040 million. These results, the progress on delivering Eni’s strategy, the outlook and a Brent reference scenario of 65 $/bbl have allowed to increase dividend back to the pre-COVID levels at €0.86 per share and to start a €400 million share buy-back program over the next 6 months.

Against a more constructive macro backdrop and improved fundamentals in the energy scenario, net result was supported by operating performance compared to a loss reported in the first half of 2020 following the negative impact of the COVID-19 pandemic. Operating performance was affected by the impairment losses of €602 million (compared to €2,749 million in the first half of 2020) mainly relating to the refining assets due to the projections of lower expected future cash flows driven by a deteriorated margin environment and the forecast of higher expenses for emission allowances. Finally, net profit benefitted from a tax rate which was in line with the average historical value at consolidated level.

FINANCIAL REVIEW AND OTHER INFORMATION | FINANCIAL REVIEW 21 

The following table shows the main scenario indicators reported in the first half of 2021:

	First Half
	2021	2020	% Ch.
Average price of Brent dated crude oil in U.S. dollars (a)	64.86	39.73	63.3
Average EUR/USD exchange rate (b)	1.205	1.102	9.3
Average price of Brent dated crude oil in euro	53.83	36.05	49.3
Standard Eni Refining Margin (SERM) (c)	(0.5)	2.9	(117.2)
Spot Gas price at Italian PSV (d)	231	97	138.2
TTF (d)	229	80	187.3
Spread PSV vs. TTF (d)	2	17	(89.5)
(a) Price per barrel. Source: Platt’s Oilgram.
(b) Source: ECB.
(c) In $/bbl FOB Mediterranean Brent dated crude oil. Source: Eni calculations. Approximates the margin of Eni's refining system in consideration of material balances and refineries' product yields.
(d) €/kcm.

Adjusted results and breakdown of special items

	First Half
(€ million)	2021	2020	Change	% Ch.
Operating profit (loss)	3,857	(3,775)	7,632	..
Exclusion of inventory holding (gains) losses	(815)	1,394
Exclusion of special items	324	3,254
Adjusted operating profit (loss)	3,366	873	2,493	285.6
Breakdown by segment:
Exploration & Production	3,219	230	2,989	..
Global Gas & LNG Portfolio	(6)	363	(369)	..
Refining & Marketing and Chemicals	70	89	(19)	(21.3)
EGL, Power & Renewables	310	276	34	12.3
Corporate and other activities	(257)	(339)	82	24.2
Impact of unrealized intragroup profit elimination and  other consolidation adjustments	30	254	(224)
Net profit (loss) attributable to Eni's shareholders	1,103	(7,335)	8,438	..
Exclusion of inventory holding (gains) losses	(581)	991
Exclusion of special items	677	5,689
Adjusted net profit (loss) attributable to Eni's shareholders	1,199	(655)	1,854	..

In the first half of 2021, the Group’s adjusted operating profit of €3,366 million was €2.5 billion higher than the first half of 2020. The result was driven by a robust performance in the E&P segment leveraging on a better pricing environment and lower costs, despite lower hydrocarbon production due to seasonal maintenance activities. The result also benefitted from retroactive contractual revisions. The Chemical business reported an outstanding performance (up by €372 million of adjusted operating profit) driven by a strong macro backdrop, higher products margins and higher production availability, allowing the segment to capture a rebound in demand, in addition to a growing contribution from the green chemical business. Finally, resilient results from the Eni gas e luce & Renewables business benefitting from effective marketing activities, a growing customer base and better margins. The GGP and R&M segments reported weak results reflecting a difficult market environment and tough comparison with the excellent results earned the year-ago periods.

The Group’s adjusted net profit was back at pre-COVID levels with €1,199 million, a noticeable improvement compared to the first half of 2020 loss of €655 million due to an improved operating profit and benefitting from a better consolidated tax rate which was 58% in the first half of 2021. The main driver of this trend was the normalization of the E&P tax rate, which was driven by a better geographical mix of profits on the back of the strengthened scenario, which lowered the relative weight of jurisdictions characterized by higher tax rates, like Libya, Egypt, Algeria and UAE, as well as the fact that the 2020 reporting period was affected by a number of tax dis-optimizations resulting in a particularly high tax rate. Furthermore, an improved profitability outlook of Italian green activities, mainly Eni gas e luce & Renewables, allowed for the recognition of deferred tax assets against the fiscal losses incurred in the reporting period.

22 FINANCIAL REVIEW AND OTHER INFORMATION | FINANCIAL REVIEW

	First Half
(€ million)	2021	2020
Special items of operating profit (loss)	324	3,254
- environmental charges	79	62
- impairment losses (impairment reversals), net	602	2,749
- impairment of exploration projects	22
- net gains on disposal of assets	(88)	(4)
- risk provisions	27	87
- provisions for redundancy incentives	56	38
- commodity derivatives	(269)	112
- exchange rate differences and derivatives	53	(24)
- other	(158)	234
Net finance (income) expense	2	(2)
of which:
- exchange rate differences and derivatives reclassified to operating profit (loss)	(53)	24
Net income (expense) from investments	402	1,341
of which:
- impairment/revaluation of equity investments	402	894
Income taxes	(51)	1,096
Total special items of net profit (loss)	677	5,689

The breakdown of special items recorded in operating profit by segment (a net charge of €324 million) is as follows:

· E&P: reported net gains of €446 million due to the reversal of previously recognized impairment losses for €376 million, which related to gas fields in Italy and fields in Turkmenistan, Libya, Algeria, Nigeria, Timor Leste and the USA driven by an improved hydrocarbon pricing environment. A gain from the disposal of a non-strategic asset in Nigeria was recorded (€75 million). The main losses are attributable to the write-off of exploration projects due to the complexity in the geopolitical and environmental context;

· GGP: net charges of €234 million included the accounting effect of certain fair-valued commodity derivatives lacking the formal criteria to be classified as hedges or to be elected under the own use accounting (€215 million); the reclassification to adjusted operating profit of the positive balance of €56 million related to derivative financial instruments used to manage margin exposure to foreign currency exchange rate movements and exchange translation differences of commercial payables and receivables; and a gain due to the difference between the gas inventories value accounted for under the weighted-average cost method provided by IFRS and management’s own measure of inventories which moves forward at the time of inventory drawdown the margins captured on volumes in inventories above their normal levels leveraging the seasonal spread in gas prices net of the effects of the associated commodity derivatives (€66 million);

· R&M and Chemicals: net charges of €1,017 million relating to impairment losses takes at the residual net book value of refining assets in Italy and of a joint operation in Europe (for an overall amount of approximately €900 million) due to the projections of lower expected future cash flows driven by a deteriorated margin environment and the forecast of higher expenses for emission allowances. Other charges include the write down (approximately €70 million) of capital expenditures made for compliance and stay-in-business at certain Cash Generating Units with expected negative cash flows. Other special items related to environmental charges (€65 million), as well as the accounting effect of certain fair-valued commodity derivatives lacking the formal criteria to be classified as hedges (charge of €32 million);

· EGL, Power & Renewables: net gains of €518 million mainly related to the accounting effect of certain fair-valued commodity derivatives lacking the formal criteria to be classified as hedges.

Special items recorded at equity-accounted investments mainly included: (i) charges of €397 million relating to impairment losses recorded at certain CGUs at the JV Vår Energi, mainly driven by a delay in the start-up of certain projects and cost overruns; (ii) a gain of €69 million relating to the alignment of raw material and products inventories to their net realizable values at period end at ADNOC R> and (iii) Eni’s interest of extraordinary charges/impairment losses recognized by the Saipem joint venture.

FINANCIAL REVIEW AND OTHER INFORMATION | FINANCIAL REVIEW 23 

| Analysis of profit and loss account items

Revenues

	First Half
(€ million)	2021	2020	Change	% Ch.
Exploration & Production	8,921	6,751	2,170	32.1
Global Gas & LNG Portfolio	5,943	3,620	2,323	64.2
Refining & Marketing and Chemicals	17,584	12,148	5,436	44.7
- Refining & Marketing	15,691	10,984	4,707	42.9
- Chemicals	2,720	1,555	1,165	74.9
- Consolidation adjustments	(827)	(391)	(436)
EGL, Power & Renewables	4,742	3,947	795	20.1
- EGL	3,613	3,257	356	10.9
- Power	1,207	902	305	33.8
- Renewables	11	6	5	83.3
- Consolidation adjustments	(89)	(218)	129
Corporate and other activities	812	748	64	8.6
Consolidation adjustments	(7,214)	(5,184)	(2,030)
Sales from operations	30,788	22,030	8,758	39.8
Other income and revenues	651	460	191	41.5
Total revenues	31,439	22,490	8,949	39.8

Total revenues amounted to €31,439 million. Eni’s sales from operations in the first half of 2021 (€30,788 million) increased by 39.8% from the first half of 2020, reflecting the effect of the strong performance in all energy commodities, in particular: the Brent price increased from 40 $/bbl in the first half of 2020 to 65 $/bbl in the first half of 2021; natural gas prices (TTF and PSV) in Europe increased more than doubled; in the chemical sector the polyethylene-ethylene spread, reference indicator, reached the record value to about 800 $/ton as well as the reopening of the economy leading to a rebound in sale volumes mainly in the R&M and Chemicals segment. In particular, the chemical business took advantage from improvements in global demand for plastics thanks to a broadening economic recovery, with many end-markets like consumer durables and the automotive and packaging sector performing well, and higher volume sold thanks to higher plant availability, leveraging on the lower imports from the producer countries (USA and Middle East). The retail gas&power business was supported by gains in the extra-commodity business, marketing initiatives in Italy and a growth in the customer base.

Operating expenses

	First Half
(€ million)	2021	2020	Change
Purchases, services and other	22,117	17,186	4,931
Impairment losses (impairment reversals) of trade and other receivables, net	67	211	(144)
Payroll and related costs	1,493	1,542	(49)
of which:   provision for redundancy incentives and other	56	38	18
	23,677	18,939	4,738

Operating expenses in the first half of 2021 (€23,677 million) increased by €4,738 million from the first half of 2020. Purchases, services and other (€22,117 million) increased by €4,931 million, reflecting higher costs for hydrocarbon supplies (gas under long-term supply contracts and refinery and chemical feedstocks). Payroll and related costs (€1,493 million) were barely unchanged from the first half of 2020.

24 FINANCIAL REVIEW AND OTHER INFORMATION | FINANCIAL REVIEW

Finance income (expense)

	First Half
(€ million)	2021	2020	Change
Finance income (expense) related to net borrowings	(404)	(502)	98
- Interest expense on corporate bonds	(234)	(270)	36
- Net income from financial activities held for trading	19	(7)	26
- Interest expense for banks and other financing istitutions	(44)	(52)	8
- Interest expense for lease liabilities	(153)	(183)	30
- Interest from banks	2	7	(5)
- Interest and other income from receivables and securities for non-financing operating activities	6	3	3
Income (expense) on derivative financial instruments	(218)	(76)	(142)
- Derivatives on exchange rate	(235)	(28)	(207)
- Derivatives on interest rate	17	(48)	65
Exchange differences, net	246	20	226
Other finance income (expense)	(129)	(7)	(122)
- Interest and other income from receivables and securities for financing operating activities	27	57	(30)
- Finance expense due to the passage of time (accretion discount)	(75)	(69)	(6)
- Other finance income (expense)	(81)	5	(86)
	(505)	(565)	60
Finance expense capitalized	32	39	(7)
	(473)	(526)	53

Net finance expense (€473 million) reduced by €53 million from the first half of 2020. The main drivers were: (i) lower financial expense on debt (down by €36 million) due to favourable trends in key market benchmarks and gains recognized in fair value evaluation of certain derivative instruments on interest rates (up by €65 million) which did not meet the formal criteria to be designated as hedges under IFRS; (ii) recognition of lower losses on exchange rate (down by €226 million) offset by the negative change of fair-valued currency derivatives (down by €207 million) lacking the formal criteria to be designated as hedges under IFRS 9; (iii) lower interest expense for lease liabilities (down by €30 million) due to currency translation effects. Other finance expense reported an increase of €86 million due to a discounted receivable in the E&P segment.

Net income (expense) from investments

	First Half
(€ million)	2021	2020	Change
Share of gains (losses) from equity-accounted investments	(477)	(1,404)	927
Dividends	66	72	(6)
Other income (expense), net	(16)	(47)	31
Income (expense) from investments	(427)	(1,379)	952

Net income from investments amounted to €427 million and related to:

- a loss of €477 million recorded at the equity-accounted investments and mainly related to the JV Vår Energi due to impairment losses recorded at certain Cash Generating Units driven by a delay in the start-up of certain projects and cost overruns as well as Eni’s share of losses recorded by the Saipem joint venture; and

- dividends of €66 million paid by minor investments in certain entities which were designated at fair value through OCI under IFRS 9 except for dividends which are recorded through profit. These entities mainly comprised Nigeria LNG (€36 million) and Saudi European Petrochemical Co. (€14 million).

FINANCIAL REVIEW AND OTHER INFORMATION | FINANCIAL REVIEW 25 

SUMMARIZED GROUP BALANCE SHEET ¹

(€ million)	Jun. 30, 2021	Dec. 31, 2020	Change
Fixed assets
Property,  plant and equipment	53,802	53,943	(141)
Right of use	4,806	4,643	163
Intangible assets	3,398	2,936	462
Inventories - Compulsory stock	1,318	995	323
Equity-accounted investments and other investments	7,372	7,706	(334)
Receivables and securities held for operating purposes	1,046	1,037	9
Net payables related to capital expenditure	(1,453)	(1,361)	(92)
	70,289	69,899	390
Net working capital
Inventories	4,593	3,893	700
Trade receivables	9,446	7,087	2,359
Trade payables	(10,098)	(8,679)	(1,419)
Net tax assets (liabilities)	(3,728)	(2,198)	(1,530)
Provisions	(12,733)	(13,438)	705
Other current assets and liabilities	(670)	(1,328)	658
	(13,190)	(14,663)	1,473
Provisions for employee benefits	(1,226)	(1,201)	(25)
Assets held for sale including related liabilities	30	44	(14)
CAPITAL EMPLOYED, NET	55,903	54,079	1,824
Eni's shareholders equity	40,496	37,415	3,081
Non-controlling interest	84	78	6
Shareholders' equity	40,580	37,493	3,087
Net borrowings before lease liabilities ex IFRS 16	10,040	11,568	(1,528)
Lease liabilities	5,283	5,018	265
- of which Eni working interest	3,635	3,366	269
- of which Joint operators' working interest	1,648	1,652	(4)
Net borrowings post lease liabilities ex IFRS 16	15,323	16,586	(1,263)
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY	55,903	54,079	1,824
Leverage	0.38	0.44	(0.06)
Gearing	0.27	0.31	(0.03)

As of June 30, 2021, fixed assets of €70,289 million were almost unchanged from December 31, 2020: capital expenditures and acquisitions of the period and the positive impact of exchange rates were offset by DD&A and net impairment charges.

Net working capital (-€13,190 million) increased by €1,473 million y-o-y due to a higher balance between trade payables and trade receivables (approximately up by €0.9 billion) and an increased value of oil and products inventories due to the weighted-average cost method accounting in an environment of rising prices.

Shareholders’ equity (€40,580 million) increased by €3,087 million compared to December 31, 2020, due to the net profit for the period (€1,112 million), the emission in May 2021 of hybrid bonds for €2 billion and the positive foreign currency translation differences (€1,037 million) reflecting the appreciation of the dollar vs. the euro as of June 30, 2021 vs. December 31, 2020, offset by the payment of the balance dividend 2020 to Eni shareholders (€857 million).

¹ For a reconciliation to the statutory statement of cash flow see the paragraph “Reconciliation of Summarized Group Balance Sheet and Statement of Cash Flows to Statutory Schemes”.

26 FINANCIAL REVIEW AND OTHER INFORMATION | FINANCIAL REVIEW

Net borrowings² as of June 30, 2021 was €15,323 million decreasing by €1,263 million from 2020. When excluding the lease liabilities, net borrowings were re-determined at €10,040 million decreasing by €1,528 million.

Leverage³ – the ratio of the borrowings to total equity - was 0.38 at June 30, 2021. The impact of the lease liability pertaining to joint operators in Eni-led upstream unincorporated joint ventures weighted on leverage for 4 points. Excluding the impact of IFRS 16 altogether, leverage would be 0.25.

² Details on net borrowings are furnished on page 36.

³ Non-GAAP financial measures and other alternative performance indicators disclosed throughout this press release are accompanied by explanatory notes and tables in line with guidance provided by ESMA guidelines on alternative performance measures (ESMA/2015/1415), published on October 5, 2015. For further information, see the section “Non-GAAP measures” of this report.

FINANCIAL REVIEW AND OTHER INFORMATION | FINANCIAL REVIEW 27

SUMMARIZED GROUP CASH FLOW STATEMENT⁴

	First Half
(€ million)	2021	2020	Change
Net profit (loss)	1,112	(7,332)	8,444
Adjustments to reconcile net profit (loss) to net cash provided by operating activities:
- depreciation, depletion and amortization and other non monetary items	4,273	8,305	(4,032)
- net gains on disposal of assets	(88)	(4)	(84)
- dividends, interests, taxes and other changes	2,135	1,966	169
Changes in working capital related to operations	(1,797)	688	(2,485)
Dividends received by investments	354	328	26
Taxes paid	(1,502)	(1,072)	(430)
Interests (paid) received	(394)	(501)	107
Net cash provided by operating activities	4,093	2,378	1,715
Capital expenditure	(2,389)	(2,568)	179
Investments and purchase of consolidated subsidiaries and businesses	(871)	(264)	(607)
Disposal of consolidated subsidiaries, businesses, tangible and intangible assets and investments	237	21	216
Other cash flow related to investing activities and disinvestments	75	(393)	468
Free cash flow	1,145	(826)	1,971
Net cash inflow (outflow) related to financial activities	(1,185)	463	(1,648)
Changes in short and long-term financial debt	(361)	2,907	(3,268)
Repayment of lease liabilities	(445)	(462)	17
Dividends paid and changes in non-controlling interests and reserves	(844)	(1,537)	693
Net issue (repayment) of perpetual hybrid bond	1,975
Effect of changes in consolidation and exchange differences of cash and cash equivalent	22	(12)	34
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENT	307	533	(226)
Adjusted net cash before changes in working capital at replacement cost	4,757	3,370	1,387

	First Half
(€ million)	2021	2020	Change
Free cash flow	1,145	(826)	1,971
Repayment of lease liabilities	(445)	(462)	17
Net borrowings of acquired companies	(241)	(67)	(174)
Exchange differences on net borrowings and other changes	(62)	40	(102)
Dividends paid and changes in non-controlling interest and reserves	(844)	(1,537)	693
Net issue (repayment) of perpetual hybrid bond	1,975
CHANGE IN NET BORROWINGS BEFORE LEASE LIABILITIES	1,528	(2,852)	4,380
Repayment of lease liabilities	445	462	(17)
Inception of new leases and other changes	(710)	(456)	(254)
Change in lease liabilities	(265)	6	(271)
CHANGE IN NET BORROWINGS AFTER LEASE LIABILITIES	1,263	(2,846)	4,109

Net cash provided by operating activities for the first half of 2021 was €4,093 million, increasing by 72%, due to the better scenario in the upstream segment. This benefitted from a higher amount of trade receivables due in subsequent reporting periods divested to financing institutions compared to the fourth quarter 2020 (about +€0.2 billion).

Cash flow from operations before changes in working capital at replacement cost was €4,757 million. This non-GAAP measure includes net cash provided by operating activities before changes in working capital excluding inventory holding gains or losses and provisions for extraordinary credit losses and other charges, as well as the fair value of commodity derivatives lacking the formal criteria to be designated as hedges and the fair value of forward gas sale contracts with physical delivery which were not accounted in accordance with the own use exemption.

⁴ For a reconciliation to the statutory statement of cash flow see the paragraph “Reconciliation of Summarized Group Balance Sheet and Statement of Cash Flows to Statutory Schemes”.

 28 FINANCIAL REVIEW AND OTHER INFORMATION | FINANCIAL REVIEW

Net financial borrowings before IFRS-16 decreased by €1.5 billion due to the emission of hybrid bonds for €2 billion, the cash inflows of the operating activity (€1.1 billion), partly offset by the payment of the balance dividend of €0.24 per share for a total amount of approximately €840 million, the payment of lease liabilities for €445 million and the consolidation of debt of acquired subsidiaries (€241 million).

A reconciliation of cash flow from operations before changes in working capital at replacement cost to net cash provided by operating activities for the first half of 2021 and 2020 is provided below:

	First Half
(€ million)	2021	2020
Net cash provided by operating activities	4,093	2,378
Changes in working capital related to operations	1,797	(688)
Exclusion of commodity derivatives	(269)	112
Exclusion of inventory holding (gains) losses	(815)	1,394
Provisions for extraordinary credit losses and other charges	(49)	174
Adjusted net cash before changes in working capital at replacement cost	4,757	3,370

Capital expenditure, investments and business combinations

	First Half
(€ million)	2021	2020	Change	% Ch.
Exploration & Production ⁽ᵃ⁾	1,806	2,018	(212)	(10.5)
- acquisition of proved and unproved properties	60		60	..
- exploration	160	247	(87)	(35.2)
- oil and gas development	1,547	1,740	(193)	(11.1)
- CCUS projects	20		20	..
- other expenditure	19	31	(12)	(38.7)
Global Gas & LNG Portfolio	15	7	8	114.3
Refining & Marketing and Chemicals	335	377	(42)	(11.1)
- Refining & Marketing	234	274	(40)	(14.6)
- Chemicals	101	103	(2)	(1.9)
EGL, Power & Renewables	160	141	19	13.5
- EGL	87	80	7	8.8
- Power	25	22	3	13.6
- Renewables	48	39	9	23.1
Corporate and other activities	94	32	62	193.8
Impact of unrealized intragroup profit elimination	(3)	(7)	4
Capital expenditure ⁽ᵃ⁾	2,407	2,568	(161)	(6.3)
Investments and purchase of consolidated subsidiaries and businesses	871	264	607	229.9
Total capex and investments and purchase of consolidated subsidiaries and businesses	3,278	2,832	446	15.7

(a) Includes reverse factoring operations in the first half of 2021.

Cash outflows for capital expenditure, investments and business combinations were €3.3 billion, including the acquisition of a 20% interest in the Dogger Bank A/B offshore wind project in the North Sea, the 100% share in Aldro Energía in the retail gas business and the Fri-El Biogas Holding engaged in the bio-gas business in Italy. Net of the above-mentioned non-organic items and of utilization of trade advances cashed by Egyptian partners in previous reporting periods in relation to the financing of the Zohr project (€0.57 billion), net capital expenditures amounted to €2.91 billion, about 2% lower than the same period of 2020 (almost unchanged at constant exchange rates). In the first half of 2021 net capex were fully funded by the adjusted cash flow.

FINANCIAL REVIEW AND OTHER INFORMATION | FINANCIAL REVIEW 29

In the first half of 2021, capital expenditure amounted to €2,407 million (€2,568 million in the first half of 2020) and mainly related to:

- oil and gas development activities (€1,547 million) mainly in Indonesia, Egypt, the United States, Mexico, the United Arab Emirates and Angola;

- refining activity in Italy and outside Italy (€198 million) mainly relating to the activities to maintain plants’ integrity and stay-in-business, as well as HSE initiatives; marketing activity (€36 million) for regulation compliance and stay-in-business initiatives in the retail network in Italy and in the rest of Europe;

- initiatives relating to gas and power marketing in the retail business (€87 million).

 30 FINANCIAL REVIEW AND OTHER INFORMATION | FINANCIAL REVIEW

| Results by segment ⁵

Exploration & Production

	First Half
(€ million)	2021	2020	Change	% Ch.
Operating profit (loss)	3,665	(1,678)	5,343	..
Exclusion of special items	(446)	1,908	(2,354)
Adjusted operating profit (loss)	3,219	230	2,989	..
Net finance (expense) income	(193)	(169)	(24)
Net income (expense) from investments	219	43	176
of which: Vår Energi	143	8
Income taxes	(1,473)	(677)	(796)
Adjusted net profit (loss)	1,772	(573)	2,345	..
Results also include:
Exploration expenses:	132	436	(304)	(69.7)
- prospecting, geological and geophysical expenses	102	100	2
- write-off of unsuccessful wells	30	336	(306)

In the first half of 2021, the recovery in the profitability of the Exploration & Production has strengthened, as signaled by an increase of €3 billion in the adjusted operating profit from the first half of 2020 reflecting the significant rebound from the bottom of the demand and economic crisis and supported by the full recovery of the oil scenario with the reference Brent price increasing by 63%. Against this backdrop, Eni’s realized prices of liquids increased by 81%, whereas natural gas realized prices increased by 24%. The positive trend in the pricing environment was partly softened by lower production volumes due to the seasonal maintenance activities. The result was helped by expense optimizations and lower write-offs of exploration expenditures relating unsuccessful wells and benefitted from retroactive contractual revisions.

The segment reported an adjusted net profit of €1,772 million compared to a loss of €573 million in the same period of the previous year, up by €2,345 million, due to a recovery in operating profit and better results of the Vår Energi JV (up by €135 million). The adjusted net profit benefitted from an improved scenario that drove a reduction in the tax rate due to a more favourable geographic mix of profits (in terms of reducing share of taxable income in Countries with a higher tax rate), as well as to the circumstance that the 2020 reporting period was affected by a number of drivers leading to tax dis-optimization.

⁵ Explanatory notes and tables detail certain other alternative performance indicators in line with guidance provided by ESMA guidelines on Alternative performancemeasures (ESMA/2015/1415), published on October 5, 2015. For a detailed explanation, see section “Alternative performance measures” in the following pages of this interim report.

FINANCIAL REVIEW AND OTHER INFORMATION | FINANCIAL REVIEW 31

Global Gas & LNG Portfolio

	First Half
(€ million)	2021	2020	Change	% Ch.
Operating profit (loss)	(240)	163	(403)	..
Exclusion of special items	234	200	34
Adjusted operating profit (loss)	(6)	363	(369)	..
Net finance (expense) income	(4)		(4)
Net income (expense) from investments	(2)	(13)	11
Income taxes	(11)	(123)	112
Adjusted net profit (loss)	(23)	227	(250)	..

In the first half of 2021, the Global Gas & LNG Portfolio segment reported an adjusted operating loss of €6 million, down from the performance recorded in the same period of 2020 (adjusted operating profit of €363 million) which benefitted from one-off positive effects from portfolio optimizations. Furthermore, the first half of 2021 was negatively affected by narrowing spreads between the PSV vs. the TTF spot gas prices partly offset by economic benefits from gas contracts renegotiation.

The segment reported an adjusted net loss of €23 million compared to the adjusted net profit of €227 million in the first half of 2020.

Refining & Marketing and Chemicals

	First Half
(€ million)	2021	2020	Change	% Ch.
Operating profit (loss)	(115)	(2,302)	2,187	..
Exclusion of inventory holding (gains) losses	(832)	1,370	(2,202)
Exclusion of special items	1,017	1,021	(4)
Adjusted operating profit (loss)	70	89	(19)	(21.3)
- Refining & Marketing	(171)	220	(391)	..
- Chemicals	241	(131)	372	..
Net finance (expense) income	(10)	(7)	(3)
Net income (expense) from investments	(33)	(29)	(4)
of which: ADNOC R&GT	(49)	(32)
Income taxes	(3)	(37)	34
Adjusted net profit (loss)	24	16	8	50.0

In the first half of 2021, the Refining & Marketing and Chemicals segment reported an adjusted operating profit of €70 million, down by 21% from the first half of 2020.

In the first half of 2021, the Refining & Marketing business reported an adjusted operating loss of €171 million compared to an adjusted operating profit of €220 million in the same period of 2020, driven by a depressed refining scenario due to the long-lasting effects of COVID-19 as demonstrated by the slow recovery in air travel and other market dislocations, as well as higher expenses for the purchase of emission allowances. The optimization of the industrial set-up allowed for a partial recovery of the loss driven by scenario. The marketing business benefitted from the reopening of the economy leading to a rebound in sales volumes, partly offset by lower margins.

In the first half of 2021, the Chemical business, managed by Versalis, reported an adjusted operating profit of €241 million, significantly better than the first half of 2020 when an adjusted operating loss of €131 million was incurred. The performance was driven by a broad-based recovery in the demands for commodities in key end-markets like the automotive, the packaging and the consumer staples sectors, which sustained volumes and margins. The green chemicals business also performed well. Furthermore, the segment was able to capture additional sale volumes (volumes increased by 21% in the first half) thanks to higher plant availability, leveraging on the rebound in demand and the lower imports from the producing countries (the USA and the Middle East).

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The Refining & Marketing and Chemicals reported an adjusted net profit of €24 million (adjusted net profit of €16 million in the same period of 2020) due to the worsening performance of the R&M business.

Eni gas e luce, Power & Renewables

	First Half
(€ million)	2021	2020	Change	% Ch.
Operating profit (loss)	828	213	615	..
Exclusion of special items	(518)	63	(581)
Adjusted operating profit (loss)	310	276	34	12.3
- Eni gas e luce & Renewables	247	173	74	42.8
- Power	63	103	(40)	(38.8)
Net finance (expense) income	(1)	(1)
Net income (expense) from investments	3	7	(4)
Income taxes	(89)	(87)	(2)
Adjusted net profit (loss)	223	195	28	14.4

In the first half of 2021, the Eni gas e luce & Renewables business reported an adjusted operating profit of €247 million, up by 43% from the first half of 2020. The performance was supported by gains in the extra-commodity business, also leveraging the integration of the distributed photovoltaic business (Evolvere), marketing initiatives in Italy, a growth in the customer base following organic growth and the acquisition of Aldro Energía in Spain, and lower than expected credit losses, following an improving economic cycle.

The power generation business from gas-fired plants reported an adjusted operating profit of €63 million, down by 39% from the first half of 2020, driven by an unfavourable trading environment and lower one-off effects.

The segment reported an adjusted net profit of €223 million, up by 14%, due to an improved operating performance.

FINANCIAL REVIEW AND OTHER INFORMATION | FINANCIAL REVIEW 33

| Alternative performance measures (Non-GAAP measures)

Management evaluates underlying business performance on the basis of Non-GAAP financial measures, which are not provided by IFRS (“Alternative performance measures”), such as adjusted operating profit, adjusted net profit, which are arrived at by excluding from reported results certain gains and losses, defined special items, which include, among others, asset impairments, including impairments of deferred tax assets, gains on disposals, risk provisions, restructuring charges, the accounting effect of fair-valued derivatives used to hedge exposure to the commodity, exchange rate and interest rate risks, which lack the formal criteria to be accounted as hedges, and analogously evaluation effects of assets and liabilities utilized in a relation of natural hedge of the above mentioned market risks. Furthermore, in determining the business segments’ adjusted results, finance charges on finance debt and interest income are excluded (see below). In determining adjusted results, inventory holding gains or losses are excluded from base business performance, which is the difference between the cost of sales of the volumes sold in the period based on the cost of supplies of the same period and the cost of sales of the volumes sold calculated using the weighted average cost method of inventory accounting as required by IFRS, except in those business segments where inventories are utilized as a lever to optimize margins.

Finally, the same special charges/gains are excluded from the Eni’s share of results at JVs and other equity accounted entities, including any profit/loss on inventory holding.

Management is disclosing Non-GAAP measures of performance to facilitate a comparison of base business performance across periods, and to allow financial analysts to evaluate Eni’s trading performance on the basis of their forecasting models.

Non-GAAP financial measures should be read together with information determined by applying IFRS and do not stand in for them. Other companies may adopt different methodologies to determine Non-GAAP measures.

Follows the description of the main alternative performance measures adopted by Eni. The measures reported below refer to the performance of the reporting periods disclosed in this press release:

Adjusted operating and net profit

Adjusted operating and net profit are determined by excluding inventory holding gains or losses, special items and, in determining the business segments’ adjusted results, finance charges on finance debt and interest income. The adjusted operating profit of each business segment reports gains and losses on derivative financial instruments entered into to manage exposure to movements in foreign currency exchange rates, which impact industrial margins and translation of commercial payables and receivables. Accordingly, also currency translation effects recorded through profit and loss are reported within business segments’ adjusted operating profit. The taxation effect of the items excluded from adjusted operating or net profit is determined based on the specific rate of taxes applicable to each of them. Finance charges or income related to net borrowings excluded from the adjusted net profit of business segments are comprised of interest charges on finance debt and interest income earned on cash and cash equivalents not related to operations. Therefore, the adjusted net profit of business segments includes finance charges or income deriving from certain segment operated assets, i.e., interest income on certain receivable financing and securities related to operations and finance charge pertaining to the accretion of certain provisions recorded on a discounted basis (as in the case of the asset retirement obligations in the Exploration & Production segment).

Inventory holding gain or loss

This is the difference between the cost of sales of the volumes sold in the period based on the cost of supplies of the same period and the cost of sales of the volumes sold calculated using the weighted average cost method of inventory accounting as required by IFRS.

Special items

These include certain significant income or charges pertaining to either: (i) infrequent or unusual events and transactions, being identified as non-recurring items under such circumstances; (ii) certain events or transactions which are not considered to be representative of the ordinary course of business, as in the case of environmental provisions, restructuring charges, asset impairments or write ups and gains or losses on divestments even though they occurred in past periods or are likely to occur in future ones. Exchange rate differences and derivatives relating to industrial activities and commercial payables and receivables, particularly exchange rate derivatives to manage commodity pricing formulas which are quoted in a currency other than the functional currency are reclassified in operating profit with a corresponding adjustment to net finance charges, notwithstanding the handling of foreign currency exchange risks is made centrally by netting off naturally-occurring opposite positions and then dealing with any residual risk exposure in the derivative market. Finally, special items include the accounting effects of fair-valued commodity derivatives relating to commercial exposures, in addition to those which lack the criteria to be designed as hedges, also those which are not eligible for the own use exemption, including the ineffective portion of cash flow hedges, as well as the accounting effects of commodity and exchange rates derivatives whenever it is deemed that the underlying transaction is expected to occur in future reporting periods.

Correspondently, special charges/gains also include the evaluation effects relating to assets/liabilities utilized in a natural hedge relation to offset a market risk, as in the case of accrued currency differences at finance debt denominated in a currency other than the reporting currency, where the cash outflows for the reimbursement are matched by highly probable cash inflows in the same currency. The deferral of both the unrealized portion of fair-valued commodity and other derivatives and evaluation effects are reversed to future reporting periods when the underlying transaction occurs.

As provided for in Decision No. 15519 of July 27, 2006 of the Italian market regulator (CONSOB), non-recurring material income or charges are to be clearly reported in the management’s discussion and financial tables.

Leverage