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Italy Oil and Gas Report Q2 2012 Published : April 2012

No. of Pages : 71


BMI View: Aside from the country’s well-publicised economic challenges, Italy is at a crossroads in terms of energy market development. The public is rejecting state efforts to revive nuclear strategy, leaving the way clear for gas volumes to march steadily higher – forcing the import bill to keep pace. Domestic oil and gas volumes are significant but under threat, while Italy’s refining system will continue to absorb cash but offer little in the way of returns. The main trends and developments we highlight in Italy’s Oil and Gas sector are: 1.Gas use in power generation is the key to demand growth and consumption looks set to reach 86.6bn cubic metres (bcm) by 2016. Imports are likely to have reached at least 80bcm at this stage. By 2021, the country is set to be a net importer of more than 92bcm per annum, costing potentially some US$40bn. Snam Rete Gas, the Italian gas distribution network, may shortly be either fully or partly spun off from majority owner Eni, as a result of new liberalisation measures introduced by the Italian government. 2.According to a report in the Financial Times newspaper, citing Italian sources, a spin-off of Eni’s EUR5.9bn stake in Snam would offer ‘industrial advantages’ – offering the energy network freedom from antitrust limits. It could also allow Snam to buy stakes in other European operators. Italian oil consumption has fallen steadily since 1999. There is scope for very modest annual gains over the next several years, although the lack of economic growth could mean this scenario is overly optimistic. By 2016, oil consumption could be 1.49mn barrels per day (b/d). 3.Italy produced almost 120,000b/d of crude oil in 2011. Eni said in September 2010 that it expected to boost production at the 500mn bbl Val d'Agri oil complex. The region’s oil fields can potentially supply 120,000b/d of light oil, plus heavy oil volumes from the Tempa Rossa field. A near-term rise in domestic oil production is therefore expected. We are now assuming oil and liquids production of 192,000b/d in 2013. Oil imports are set to reach 1.32mn b/d by 2016. 4.If oil imports do reach 1.32 b/d by 2016, the cost would be US$45.0bn. Gas imports are likely to be 80.4bcm at this stage, costing some US$37.3bn. The value of total oil and gas imports is set to reach US$82.3bn by 2016. 5.At the time of writing we assume an OPEC basket oil price for 2012 of US$99.38/bbl, falling to US$97.23/bbl in 2013. Global GDP in 2012 is forecast at 3.2%, up from an assumed 3.1% in 2011, reflecting a faltering recovery in the US and an uncertainty with regard to eurozone debt situation. For 2013, growth is estimated at 3.7%. Italian Oil and Gas Industry -Q2 2012 Table Of contents BMI Industry View SWOT Analysis Italy Oil and Gas SWOT Global Energy Market Outlook Table: Libya Production Update: Main Fields (As Of Jan 9) Table: Global Oil Consumption, 2009-2016 (000b/d) Table: Global Oil Production, 2009-2016 (000b/d) Regional Energy Market Outlook Italy Energy Market Overview Table: Italy – Upstream Projects Industry Forecast Scenario Table: Italy Oil & Gas Historical Data And Forecasts, 2009-2016

Table: Italy Oil & Gas Historical Data And Forecasts, 2009-2016 (continued) Oil and Gas Reserves Oil Supply And Demand Gas Supply And Demand LNG Refining And Oil Products Trade Revenues/Import Costs Key Risks To BMI’s Forecast Scenario Oil And Gas Infrastructure Oil Refineries Table: Refineries In Italy Service Stations Oil Storage Facilities Oil Terminals/Ports Oil Pipelines LNG Terminals Gas Storage Facilities Gas Pipelines Regional and Country Risk/Reward Ratings Table: Developed States Upstream Risk/Reward Ratings Table: Developed States Downstream Risk/Reward Ratings Competitive Landscape Executive Summary Table: Key Players – Italian Energy Sector Overview/State Role Licensing And Regulation Government Policy Table: Key Upstream Players Table: Key Downstream Players Company Monitor Eni Royal Dutch Shell ERG Po Valley Energy ExxonMobil – Summary Enel – Summary Petroceltic – Summary Mediterranean Oil and Gas – Summary Total – Summary Saras – Summary Lukoil – Summary Northern Petroleum – Summary AuDax Resources/Kairiki Energy – Summary Others – Summary Developed Europe – Regional Appendix Table: Oil Consumption, 2009-2016 (000b/d) Table: Oil Consumption, 2014-2021 (000 b/d) Table: Oil Production, 2009-2016 (000b/d) Table: Oil Production, 2014-2021 (000b/d) Table: Refinery Capacity, 2009-2016 (000b/d) Table: Refining Capacity, 2014-2021 (000b/d) Table: Gas Consumption, 2009-2016 (bcm) Table: Gas Consumption, 2014-2021 (bcm) Table: Gas Production, 2009-2016 (bcm) Table: Gas Production, 2014-2021 (bcm) Table: LNG Gas Imports (Exports), 2009-2016 (bcm)

Methodology And Risks To Forecasts Glossary Of Terms Oil And Gas Risk/Reward Ratings Methodology Ratings Overview Table: BMI’s Oil & Gas Business Environment Ratings – Structure Indicators Table: BMI’s Oil & Gas Upstream Ratings – Methodology Table: BMI’s Oil & Gas Business Environment Downstream Ratings – Methodology BMI Methodology How We Generate Our Industry Forecasts Energy Industry Cross checks Sources

italian oil and gas industry