Italy-headed oil, gas, and energy major Eni S.p.A has recently revealed details of the company's new business structure approved by its Board as part of the implementation of the company’s Strategy unveiled in February, which sets the evolution of the business over the next 30 years. This includes the creation of two new business groups – "Natural Resources" and "Energy Evolution".
The new organisation, presented by Eni’s CEO Claudio Descalzi to the Board of Directors and approved on June 4, 2020, is hailed as a “milestone” in the implementation of the company’s Strategy. According to Eni, a key element of this strategy is the combination of growth objectives with financial value creation as well as environmental sustainability, which will lead to a significant reduction in full life-cycle carbon emissions.
The two business groups – “Natural Resources” and “Energy Evolution” – will maintain close links in the hydrocarbon value chain, with the objective of best managing the different phases of the energy transition and jointly developing decarbonization processes to supply “bio, blue and green” products.
This new structure reflects Eni’s pivot to the energy transition. An irreversible path that will make us leaders in decarbonized energy products. With our new Plan, in February, we have set our path for the next 30 years, as of today it is unique in our industry. To make the plan come true, and position us to accelerate its delivery, we are creating two new business groups in our company. They will have specific objectives, but they will also cooperate to deliver on the transition and to provide our customers with the widest range of sustainable products. The reorganization also involves the corporate structures, which will evolve, continuing to be the central reference point for strategic and control processes, providing effective support to meet the business groups’ objectives. The fight against climate change and the promotion of sustainable development is recognised by governments, civil society, investors, and businesses alike as priorities for global development. Only those who pursue these in an innovative way will create value in the long term. We want to be main actors in a Just Energy Transition, in which we believe, and is central to Eni’s transformation, said Claudio Descalzi.
Natural Resources to develop the upstream oil and gas portfolio
To be lead by Alessandro Puliti, Natural Resources will continue to build up the value of Eni’s oil and gas upstream portfolio, with the objective of reducing its carbon footprint by scaling up energy efficiency and expanding production in the natural gas business, and its position in the wholesale market.
The business group will incorporate the company’s oil and gas exploration, development and production activities, natural gas wholesale via pipeline and liquefied natural gas (LNG).
Furthermore, it will focus its actions on the development of carbon capture, carbon storage, and compensation projects including forest conservation (REDD+) projects, and sustainability which will continue to integrate across all Eni’s activities.
The company Eni Rewind (environmental activities), will also be consolidated in this business Group.
Energy Evolution to transform refining, chemicals, and power gen
To be lead by Massimo Mondazzi, Energy Evolution will focus on the evolution of the businesses of power generation, transformation, and marketing of products from fossil to bio, blue and green. It will incorporate the activities of power generation from natural gas and renewables, the refining and chemical businesses, Retail Gas and Power, and mobility Marketing.
The companies Versalis (chemical products) and Eni gas e luce will also be consolidated in this business group.
In particular, it will focus on growing power generation from renewable energy and biomethane, it will coordinate the bio and circular evolution of Eni’s refining system and chemical business, and it will further develop its retail portfolio, providing increasingly more decarbonized products for mobility, household consumption, and small enterprises.
Thanks to the business group’s coordination, Eni says that it will be able to develop these activities in an integrated way, both geographically and in terms of a business line, maximizing results in terms of product development, customer service, and profitability.
Linked to hydrocarbons value chain
The two new business groups will maintain a strong link in the management of the hydrocarbons value chain, with the objectives of running in the best possible way the phases of the energy transition, and jointly developing decarbonization processes to supply green, blue and bioproducts.
Decarbonized, through carbon capture, gas to power and gas to hydrogen projects will be examples, allowing to add value to gas resources and provide customers with entirely sustainable energy.
Furthermore, in terms of central structures, a new function – Technology, R&D, and Digital – will be created. This underlines the strategic relevance that Research & Development and technological innovation represent for Eni as a key driver to create value and growth, through the development of new technologies and their fast implementation on an industrial scale.
By leveraging on its know-how and technologies, Eni has traced the evolution of its businesses for the thirty years to come. Research projects cover the whole value chain, with the objective of reducing risks, increasing efficiency, reinforcing technological leadership, and promoting better quality, products, plants, and processes.
The new group will incorporate the current ICT and Digital activities, which are a key support to the transformation of the Company’s business model, as well as the management of the technical and scientific knowledge which the new business groups will implement.
All other central functions will be soon further streamlined and reorganized to offer the best support, in terms of structures and competencies, in delivering on Eni’s new mission and on the objectives of the two new business groups.
The new organizational structure will be implemented over the coming weeks. Massimo Mondazzi will keep his role as Eni’s Chief Financial Officer until August 1, 2020.