This report comprises general statements of factual information and not financial advice. Read our Important Notice.

Our view

3Q24 saw significant moves leveraging Eni’s ‘satellite model’, slated to increase available capital to fund low carbon, but the group strategy appears at odds. The company announced the sale of 25% of its biofuels business, Enilive, to KKR for €2.938 billion. We view this as a positive move, with a €500m capital injection from KKR matched by a €500m debt paydown by Eni. Eni claims funding growth through its satellite model will provide access to additional capital markets, but we haven’t seen any evidence. 3Q24 saw a significant emphasis placed on funding debt pay-downs and increasing shareholder distributions across the group - it is unclear if this will also apply to Plentitude and Enilive, as the company currently lags behind peers in low-carbon capex ambition.

Either way, it needs more than it has guided to build its low-carbon business. We estimate that to meet its renewable generation targets, it will need an additional ~€2bn in capex by 2030.

In September, Eni's board approved a new structure, with Enilive and Plenitude now reporting under CFO Francesco Gattei to align with the company’s goal of IPOs of the low-carbon businesses. Eni stated that initial valuations are based on both companies doubling EBITDA over the next four years, with Enilive valued at €11.75bn and Plenitude at €10bn.

Priority questions ahead of 2025 :

1) Quantification of levers to achieve net carbon intensity (NCI) targets:

• How can Eni align its Net Carbon Intensity (NCI) target with peers? Eni’s FY30 target of -15% lags peers at -19%-20%, positioning Eni as the least ambitious among Euromajors.

• How will Eni balance its -35% absolute emissions target for FY18-30 with plans to grow oil and gas production? Eni has guided up to 15% oil and gas production growth by FY30, the most among European peers behind TotalEnergies. A clear breakdown of decarbonisation levers is required to ensure this growth doesn’t risk emissions targets.

2) Increases in low-carbon investment:

• How can Eni increase its low-carbon capex ambition beyond the ~28% currently guided? This ambition places Eni just ahead of Shell in the short term, and the company has no FY30 low-carbon capex targets.

• Will Eni’s satellite model deliver higher low-carbon investment than what’s currently guided? Eni must clarify whether proceeds from divestments will be used to align ambition with peers or for shareholder distributions.

Key findings