ENI S.p.A.

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ENI S.p.A.

Piazzale Enrico Mattei 1
Roma
I-00144
Italy
Telephone: +39 06 59821
Fax: +39 06 59822141
Web site: http://www.eni.it

Public Company
Incorporated: 1953
Employees: 76,521
Sales: EUR 51 billion ($64.72 billion) (2003)
Stock Exchanges: Borsa Italiana New York
Ticker Symbol: ENI
NAIC: 211111 Crude Petroleum and Natural Gas Extraction; 211112 Natural Gas Liquid Extraction; 221210 Natural Gas Distribution; 324110 Petroleum Refineries; 447110 Gasoline Stations with Convenience Stores

ENI S.p.A., the former Italian state-owned Ente Nazionale Idrocarburi, is one of the world's top ten oil and natural gas companies, with revenues of EUR 51 billion ($65 billion) in 2004. ENI focuses on three core businesses: Exploration & Production; Gas & Power; and Refining and Marketing. The Exploration & Production division produces some 1.6 million barrels of oil equivalent (boe) per day and expects to top 1.8 million boe by 2006. That division, however, accounts for less than 10 percent of the company's total sales. More lucrative is its natural gas and power operations, including the supply and transportation (primarily from fields in Algeria and Russia), and the distribution and marketing of gas, as well as the production of electricity. The company distributes more than 69 billion cubic meters of gas each year, primarily in Italy and elsewhere in Europe. That division supplies approximately 30 percent of ENI's sales. The company's largest division is its Refining and Marketing division, at 42 percent of sales through a network of 7,300 Agip and Ip service stations in Italy and nearly 3,500 service stations located in Europe. The company also produces a number of petrochemicals as part of its other operations. Italy remains ENI's primary market, at more than 49 percent of sales, and the extended European market, including Italy, accounts for 77 percent of group sales. Nonetheless, ENI is present in Africa (11.5 percent), the Asia Pacific (6 percent), and the Americas (5 percent). ENI is listed on the Borsa Italiana and the New York Stock Exchange. The Italian government maintains a 30 percent stake in the company.

Beginnings in the 1920s

ENI has its origins in the 1920s when the Italian government formed Azienda Generale Italiana Petroli (Agip) to pursue exploration for petroleum and natural gas in Italy. In the restruc-turing of Italian industry that followed World War II, Agip and related state-owned energy companies were grouped together to form ENI. Today Agip remains the principal oil company in the ENI group.

State participation in Italian industry dates from the stock market crash of 1929. In 1933, when many of the country's important banks were threatened by the collapse of industries in which they were heavily invested, the government established the Istituto per la Ricostruzione Industriale (IRI), a public agency that reorganized the banking system and acquired the banks' extensive industrial shareholdings in the process. In the petroleum industry, state participation also took the form of investment and joint ventures with foreign or private companies intended to boost Italy's refining capacity and exploration of new indigenous energy sources.

In addition to creating Agip, the state joined with private industries to establish other energy-related companies that would eventually become part of ENI. The Azienda Nazionale Idrogenazione Combustibili (ANIC) was formed to operate in the refinery sector in 1936, as was Industria Raffinazione Oli Minerali (IROM), a joint venture with the Anglo-lranian Oil Company. A later joint venture with Standard Oil of New Jersey resulted in the formation of STANIC, when Italy could not afford to update ANIC's three large refineries after the war. In 1941, government investment created Società Nazionale Metanodotti (Snam) to build and run methane pipelines, and Società Azionaria Imprese Perforazioni (Saip), a state-owned consortium of drilling companies.

The creation of ENI, a single holding company that integrated all of Italy's activities in the hydrocarbons sector, was in large part the work of its first president, Enrico Mattei. An able manager and entrepreneur with a nationalist, collectivist, and egalitarian ideology, Mattei campaigned to have the company established, and directed the course of ENI's growth and activities in its first decade. His aggressive promotion of Italy's self-reliance in energy won him wide popularity; it also set ENI on a collision course with large foreign and private oil companies.

Mattei, a former partisan commander with some experience as an industrial manager in the private sector, was appointed commissioner of Agip for upper Italy in 1945. The years immediately following the Allied liberation were a pivotal period for the nascent petroleum industry in Italy. Discovery of Middle East petroleum deposits during the war and the arrival of powerful international oil companies held major implications for a successful postwar recovery in Italy. The peninsula's strategic location in the Mediterranean made it a logical point for low-cost refining and shipment of petroleum products to the West European market.

Agip, like most of Italian industry, had been devastated during the war. Refineries and pipelines lay in ruins and Agip's tanker fleet was virtually eliminated. The apparent lack of indigenous energy resources and a desire to accommodate foreign and private investment in the petroleum industry led the postwar government in Rome to order the liquidation of Agip's bankrupt mining and prospecting activities.

Mattei delayed the liquidation, however, alerted by reports of considerable methane deposits in the Po Valley located during the war and by the haste of the foreign companies to buy Agip's outdated and apparently worthless prospecting operations. Instead of proceeding with the sell-off, Mattei disobeyed his instructions and ordered that exploration in the Po Valley be continued.

In 1946, Agip's team at the Caviaga gas field made a successful methane strike. Two years later, the state company was reorganized with Professor Marcello Boldrini as its president and Enrico Mattei as vice-president. In 1949, Agip acquired full control of the state-owned pipeline company Snam, which enabled Mattei to begin to establish a network of methane pipelines to communities and industry in northern Italy.

In the absence of laws tying exploitation rights to successful exploration, the widely publicized Po Valley methane and oil strikes triggered three years of parliamentary debate, legislative proposals, and intensive lobbying by international and private oil companies, all revolving around the issue of state control versus free competition in hydrocarbons exploration.

National Oil Company in the 1950s

On February 10, 1953, two years after its introduction in the Italian parliament, a bill was approved that established ENI as the national hydrocarbons company. All corporations through which the state was operating in the hydrocarbons sector at that time were grouped to form a single entity, through a complex system of outright acquisitions and government investments. A clause in the bill guaranteed ENI exclusive rights to exploration in the Po Valley, while allowing private companies to compete in other areas of Italy. Four years later, Mattei helped pass a second law that extended ENI's exclusive rights to all of mainland Italy.

The new company was constituted with ITL 15 billion in capital and another ITL 15 billion consisting of the nominal value of the assets of its constituent companies. ENI was authorized to trade in shares, and to carry on its activities through subsidiaries, associated companies, and investments in other companies and joint ventures. Mattei was appointed president, with Marcello Boldrini as vice-president.

Mattei's first task was to integrate ENI's constituent companies into a single enterprise, by grouping ENI's shareholdings into manageable units along functional lines and liquidating or converting any irrelevant assets. A series of mergers and diversifications during ENI's first ten years resulted in the group's present structure. Mattei and his successors followed a policy of vertical integration, so as to render ENI invulnerable in its supplies of raw and semifinished materials, as well as in services and transportation.

At first, ENI focused on production and distribution of natural gas, the only considerable source of energy available in mainland Italy. A subsidiary called Agip Mineraria was formed by the merger of Agip and the Ente Nazionale Metano. The new company in turn controlled the Saip consortium of drilling companies and La Società Ravennate Metano, a methane gas producer.

The pipeline company Snam was reconstituted to include the natural gas network of Azienda Metanodotti Padani in the Po Valley, and promptly set about expanding its system of trunk provincial and interprovincial gas lines. Snam operated as the sector head of ENI's engineering activities, which later included international construction of refineries, pipelines, and chemical plants. In the refining and petrochemicals sector, ENI companies or subsidiaries were headed by ANIC.

Company Perspectives:

Mission: Eni is one of the most important integrated energy companies in the world operating in the oil and gas, power generation, petrochemicals, oilfield services construction and engineering industries. In these businesses it has a strong edge and leading international market positions.

Eni's objective is to create new value to meet its shareholders' expectations through the continuous improvement of cost efficiency and the quality of its products and services and through the attention to the needs of its employees and the commitment to a sustainable growth pattern also encompassing the careful assessment of the environmental impact of its activities and the development of innovative and efficient technologies.

To achieve this objective Eni relies on the managerial and technical capabilities as well as the continuous development of its workforce, and on an increasingly lean and entrepreneurial organization.

ENI entered the machinery manufacturing sector in 1954, when it acquired the failing Pignone industrial equipment company in Florence. Reconstituted as Nuovo Pignone, the new company provided pipeline pumps, motor compressors, valves, and other equipment for new refineries and petrochemical plants. Later it built floating platforms for offshore oil exploration.

Fresh capital from the rapidly expanding natural gas production and distribution helped launch ENI's program of international expansion. In negotiating oil concessions with producer states, Mattei introduced an innovative formula for joint investment that deliberately sought to eliminate the middleman role previously played by the major oil companies. Instead of simply paying a fixed fee for oil concessions and then assuming all of the burden of development, as the majors did, Mattei offered producer states a partnership in the exploitation of their natural resources.

Initially, ENI assumed all of the risk in exploration, as did the big multinational oil companies. If the search revealed commercially viable deposits of hydrocarbons, however, the host country earned 50 percent of all profits, and in addition could choose to join in the production, by sharing half of all the development costs. Since the host country gained 50 percent of net profits, above the 50 percent already received as taxes and royalties, ENI's program came to be called "the 75/25 plan."

Following a more conventional joint venture with the Egyptian government in 1955, the ENI plan was subsequently applied in Iran in 1957, and in Morocco in 1958. In 1959, ENI formed similar partnerships with the governments of Libya and Sudan, and with Tunisia and Nigeria in 1961 and 1962.

The joint ventures had the effect of establishing the terms for subsequent concessions that producer states made to other foreign oil companies. By introducing his system of partnerships with producer states, Mattei effectively stimulated creation of state oil enterprises abroad, thus disrupting the institutional profile of the international oil industry. In negotiations and public statements, he asserted Italy's acceptability as a country less tainted by colonialism, and openly sought a reduction in the power, profits, and autonomy of the so-called Seven Sisters—the handful of Western oil companies that had until then dominated the international market.

Mattei successfully applied the same strategy when Agip sought concessions to build refineries and distribute its refined products in the developing countries. ENI formed joint ventures in refining with Morocco in 1958, and in Ghana and Tunisia in 1960. In the 1960s ENI companies undertook refinery construction projects in the Congo, south Asia, and Latin America.

Meanwhile, the reorganization of ENI that created Agip Mineraria and Snam at the same time divested Agip of its exploration and pipeline companies, leaving it to operate as head of ENI's activities in distribution and marketing of gasoline, lubricants, and other petroleum products both at home in Italy and abroad.

ENI contributed to Italy's swift recovery after the war as a part of the Sviluppo Iniziative Stradali Italiane (SISI) industrial consortium. SISI, which included Fiat automobile manufacturers, Pirelli rubber products, Agip, and the road building group Italcementi, virtually created an automobile culture in a newly urbanized Italy. Affordable cars, a new network of superhighways, and Agip's gasoline and oil products combined to set Italy's postwar economic "miracle" in motion.

To help build the automotive market, Mattei promoted Agip's products and image by providing new, brightly colored service stations throughout Italy and offered amenities previously unknown at service stations such as coffee shops, restaurants, and motels. By 1962, ENI's roadside outlets in Italy included some 30 Agip motels and more than 400 Agip restaurants or coffee shops. During this period Agip introduced its Supercortemaggiore high-octane gasoline and the symbol of the six-legged dog, which later came to stand for the ENI group as a whole, as well as all Agip products.

Between 1956 and 1960 Agip formed companies for foreign distribution of gasoline and lubricants throughout most of Africa, in Greece, Austria, Switzerland, West Germany, Argentina, and—through a joint venture—with the Anglo-Italian financier Charles Forte in the United Kingdom.

Key Dates:

1953:: ENI is created under Enrico Mattei, incorporating the Italian government's oil interests.
1957:: ENI gains a monopoly over all oil and gas exploration and production in Italy.
1975:: ENI begins acquiring struggling and failing state-owned companies.
1992:: The company converts to a joint-stock corporation as the government agrees to privatize ENI; the company begins a restructuring drive, selling off more than EUR 5 billion in assets and cutting 42,000 jobs by the early 2000s.
1995:: ENI lists its first tranche of shares on the Borsa Italiana and New York Stock Exchange.
1998:: The Italian government relinquishes majority control of ENI, dropping its stake to 38 percent.
2000:: The United Kingdom's British Borneo is acquired for $1.2 billion.
2001:: Lasmo, in the United Kingdom, is acquired for $4 billion.
2002:: ENI acquires 50 percent of Union Fenosa's natural gas business.
2004:: ENI announces plans to sell off petrochemicals unit Polimeri Europe; the Italian government's stake is reduced to 50 percent.

In the same period, Mattei effected a series of mergers designed to rationalize the group's various activities. ENI's subsidiary Snam came to head two subholdings: Snam Montaggi, created in 1955 to build pipelines and drilling platforms, and Snam Progetti in 1956, specializing in tankers. In 1957, Agip Mineraria's Saip subsidiary was merged with Snam Montaggi to create Saipem. The new industrial groups allowed ENI to increase its gas and petroleum transportation activities at an accelerated rate. Saipem was a pioneer in offshore drilling for hydrocarbons in Europe, and in the 1960s allowed Mattei to initiate a central European pipeline project running from the port of Genoa north to Pavia before forking off to Switzerland and to West Germany where ENI's Südpetrol subsidiary was building refineries at Ingolstadt and Stüttgart. This gave Mattei an important advantage in his dealings with the majors, in particular Esso and Gulf, ENI's chief competitors in the market.

ENI activities in the petrochemicals field started to expand in 1954 following the discovery of considerable natural gas deposits near Ravenna. ANIC built three petrochemical plants there in 1957 to produce Buna-S, a synthetic rubber; fertilizers; and later, acetates and polyvinyl chlorides. In 1959 a joint venture with the U.S. chemicals firm Phillips Carbon Black expanded the Ravenna operations to include production of carbon black.

In 1956, the Italian parliament established a Ministry of State Participation in Industry, to integrate the activities of state-controlled companies with economic and development policies. New legislation was passed requiring state-controlled companies to direct 40 percent of all new investment to Italy's poorer southern regions. Following discovery of deposits of petroleum and natural gas at Gela, Sicily, in 1956 ENI initiated construction of a giant refinery and tanker terminal on the Sicilian coast and created a regional petrochemicals subsidiary, ANIC Gela. The Nuovo Pignone manufacturing company carried out an expansion in southern Italy with construction of Pignone Sud in 1960.

Mattei also effected several major horizontal expansions for ENI, beginning with the establishment of Agip Nucleare in 1956. Two years later the Nuovo Pignone company began producing components for a large nuclear generator to be built at Latina, south of Rome. In 1963, however, Mattei's ambition of building a complete single energy group consisting of electric generating and hydrocarbons was defeated by the creation of Ente Nazionale Elettricità (ENEL). The separate state-run utility absorbed ENI's nuclear program, leaving uranium prospecting and nuclear fuel activities to Agip Nucleare.

Also in 1956, ENI established a financial company, the Società Finanziaria Idrocarburi (Sofid) to organize financing for ENI's bigger projects, and handle all of the group's financial activities and investments. Other enterprises included a center for research in hydrocarbons and petrochemicals and a school for postgraduate studies in hydrocarbons at the group's Milan headquarters. In 1959, ENI began publication of Il Giorno, a Milan-area daily paper.

ENI's expansions outside its original mandate continued in the 1960s. A joint venture with the U.S. firm Libbey-Owens Sheet Glass established Società Italiana Vetro in 1962. At the same time, Sofid and ANIC bought a controlling interest in one of Italy's oldest and largest woolen textiles companies, Lane Rossi. The move strengthened ENI's position in the burgeoning synthetic textiles sector, looming acrylic and polyester fibers produced by already existing ANIC plants.

In 1962, as ENI neared its tenth anniversary, Enrico Mattei died when his executive jet crashed en route from Sicily to Milan. Reports of a plot against ENI's entrepreneur-hero went unproven but provided the basis for several books and a 1970 feature movie, Il Caso Mattei. Mattei was succeeded by his 72-year-old Vice-President Boldrini.

The loss hastened a reorganization of management structure begun by ENI in the late 1950s. For several years, managerial responsibilities had been concentrated in the person of Mattei, who acted as chief executive of most of the group's sector head companies, including Agip Mineraria, Agip Nucleare, Snam, Saipem, ANIC, STANIC, Sofid, and the first joint venture in Egypt. By contrast, the group's new executive structure greatly extended the autonomy of mid-level managers.

ENI had grown spectacularly. In 1961 the group boasted total assets of ITL 955 billion and operated as one of the top international companies in hydrocarbons. Expansion continued in the following decade as projects that originated under Mattei came into fruition: a 1958 agreement for importation of Soviet crude oil to ENI refineries; the Latina nuclear power plant and plants for manufacturing of processed uranium for nuclear generators; the completion of the central European pipeline connection with northern Italy; new textile manufacturing. Most important of all was a long-term reciprocal agreement with Esso that entailed provision of crude petroleum to Agip refineries and purchase of equipment from Nuovo Pignone.

Until the Esso agreement, importation of Soviet crude had been essential to ENI's development: In 1962 Italy was the Soviet Union's largest single market for crude oil, and the imports allowed Agip to offer the lowest gasoline prices in Europe. Meanwhile, trade pacts with the Soviets provided markets for industrial expansion undertaken by ENI in Italy's underdeveloped south.

Diversification in the 1970s

Although the 1960s were a period of growth for ENI, the decade also brought changes in the oil industry and in the world economy that had a negative effect. Throughout the decade ENI subsidiaries won important contracts to build pipelines and refineries and explore for hydrocarbons in south Asia, South America, and Australia. At the same time, regional conflicts and a phase of sharper nationalism in the independence movements in Africa and the Middle East frequently brought Agip's operations to a halt or else forced renegotiation of its previous agreements with producer states. In 1967, the Arab-lsraeli Six Day War interrupted Agip's joint venture with Egypt. In 1969 the Biafran secession disrupted Agip refining activities in Nigeria.

Growth in the 1960s brought changes at home as well. Italy's two leading private-sector chemical companies, Montecatini and Edison, merged in 1965, creating a single giant called Montedison. Two years later, to offset the competition from Montedison, the Italian parliament approved modifications in ENI's institutional law, providing the state company financing and freedom to develop its nuclear and chemical activities more aggressively.

After Boldrini's death in 1967, ENI Vice-President Eugenio Cefis was appointed president. A junior colleague of Mattei who had served under him in the Resistance, Cefis shared Mattei's unwavering commitment to ENI and to the mixed economy in Italy.

The formation of OPEC and the issuing of its Declaration of Member Countries' Petroleum Policy in 1968 marked the emergence of oil producing states as a decisive force in the world economy. It was followed by increases in the price of crude petroleum and by the nationalization of the Libyan and Somalian oil industries in 1970 and those of Iraq and Saudi Arabia in 1974. In 1973, following the Yom Kippur War, crude prices tripled. Italy's economic situation, already experiencing a slowdown, grew worse.

ENI's expansion in the chemicals sector was accompanied by new efforts to control industrial waste and damage to the environment. At ANIC's Sannazzaro refinery, a wastewater treatment facility was installed for the first time in 1970, and in 1971 ENI formed Tecneco, a company devoted to environmental research and protection. In the same year, Eugenio Cefis was replaced as president by Raffaele Girotti.

Development of new petrochemicals plants and acquisitions in the chemical sector led to difficulties at ENI. Conflict with Montedison increased, aggravated by sectorwide economic trouble, and in 1972 the government mediated an accord between the two companies that favored ENI with the larger share of an ITL 4 trillion program of investments.

In 1975 Girotti was succeeded by Pietro Sette, who presided over the beginning of a period of crisis at ENI. Government efforts to rescue other ailing industries by having ENI acquire the worst performers added huge burdens to the group, already pressed by increases in the price of crude oil.

In 1977, ENI acquired 33 metallurgic companies from the troubled EGAM group, which were reconstituted to create a new ENI division called Samim. The following year, ANIC reported losses of ITL 247 billion, mostly in its petrochemical activities. Giorgio Mazzanti, a former vice-president at ENI, replaced Sette as president and ENI started trying to turn itself around.

Mazzanti was replaced after one year by Alberto Grandi. ENI established a new textile machinery division called Savio, separate from Nuovo Pignone, and began to see a slight narrowing of its losses. But the losses continued into the 1980s, as ENI again had to rescue failing chemical companies in the private sector. These were reconstituted separately from ANIC as a new subholding called EniChem. At the same time a comissario straordinario, or special commissioner, Dr. Enrico Gandolfi, was appointed to replace ENI's president, when Grandi resigned before his term as president had expired.

In 1982, ENI named a new president, Franco Reviglio, and a new board of directors who would oversee the group's program of recovery. ENI's sector head ANIC was reconstituted as EniChimica, following further acquisitions in the troubled Italian chemicals industry. The overhaul of ENI's fragile new empire of chemicals companies moved forward in 1984 with the absorption of EniChimica by EniChem and in 1986 the state-controlled chemicals industries showed a profit for the first time in ten years.

During the same period in the private sector, Italian financier Raul Gardini had assumed control of the company Montedison, a debt-ridden giant with wide holdings in chemical derivatives, pharmaceuticals, and services. Almost immediately plans were laid for a merger of EniChem with Montedison, to create an international presence for Italy among the top ten chemicals companies in the world. The new company, Enimont, was formed early in 1989, with 40 percent owned by ENI, 40 percent by Montedison, and the remaining 20 percent to be traded publicly.

Gabriele Cagliari replaced Franco Reviglio in 1989, to preside over ENI's experiment in a large-scale partnership with the private sector. But the joint venture was short-lived, marred by conflict between its two partners, and was finally threatened by an attempted takeover by Gardini. Late in 1990 Gardini sold Montedison's 40 percent share to ENI, and the chemicals conglomerate was renamed EniChem in 1991 after two unproductive years.

Joining the Global Leaders for the 2000s

ENI achieved a sound financial position as it entered its fifth decade. Sales continued to increase in most sectors at the end of 1990, with higher oil prices pushing up profits in the energy sector. With the addition of former Enimont activities in base and secondary chemicals, derivatives, and pharmaceuticals, ENI would complete its transition from a petroleum company to a global energy business, with materials, engineering, and financial resources capable of resolving energy and environmental problems anywhere in the world.

ENI became a joint-stock corporation in 1992 as the Italian government prepared a five-stage privatization program for the company. The first tranche of the company's shares was listed on the Borsa Italiana and the New York Stock Exchange in 1995. By 1998, the Italian government had relinquished its majority, dropped its holding to just 38 percent. In that year, the company officially changed its name to ENI S.p.A. The government continued selling down its stake, and by 2005 held just 30 percent of ENI.

Through the 1990s, ENI continued expanding, gaining exploration agreements for fields in Kazakhstan, China, and Russia in 1993 and launching production of natural gas at the Port Fouad, Egypt offshore gas field in 1996. In 1997, ENI reached agreements for two new sites in Kazakhstan, followed by an exploration, development, and production agreement in the Caspian Sea offshore field in Azerbaijan in 1998.

In the late 1990s and early 2000s, ENI launched a widescale restructuring that saw it sell off more than $5 billion in assets and slash some 42,000 jobs. The company also sold off many of the diversified operations that it had bought over time, which included newspaper and production of flowers, among others. By the early 2000s, ENI had clearly refocused itself around a core of oil and gas production and distribution. As part of that process, ENI regrouped its Agip distribution business as a separate, publicly listed subsidiary in 1998.

ENI sat out, in large part, the mega-mergers that shook up the global oil and gas industries in the 1990s and early 2000s, despite having made a halfhearted attempt at a merger with French counterpart Elf (which ended up absorbed into Total). Instead, ENI targeted the midsized market, buying British Borneo in 2000 and Lasmo in 2001. The two U.K.-based companies helped strengthen ENI's geographic spread, boosting its exploration and production interests in the North Sea, while also boosting operations in South America and the Asian Pacific.

In 2002, ENI acquired full control of Italgas, the leading gas distributor in Italy, paying some EUR 2.5 billion to shore up its gas business ahead of the opening of the EU countries' gas markets to full competition in 2007. By the end of that year, ENI had positioned itself in the larger European market as well, with the purchase of 50 percent of the gas operations of Spain's Union Fenosa.

In the early 2000s, ENI began selling off much of its petrochemicals business, divesting its polyurethane operations in 2001 and parts of its elastomers business in 2003. In 2004, the company announced its plan to put its entire Polimeri Europe petrochemicals business up for sale.

By the end of 2004, ENI market capitalization had swelled to some EUR 75 billion, positioning the company at sixth place among the world's oil and gas giants. Yet the government's reduction of its shareholding to just 30 percent left ENI vulnerable to a potential takeover attempt by one of its still larger competitors. For this reason, ENI CEO Vittorio Mincato announced his intention to lead ENI on a new growth phase, setting a market capitalization of EUR 150 billion before the end of the decade as a target. The company, now freed to raise capital on the open market, expected much of its growth to come through acquisition. At the end of 2004, ENI suggested part of Russian oil giant Yukos as a possible acquisition target. ENI remained Italy's jewel in the crown—one of the world's largest oil companies, and one of the largest corporations of any kind in Europe.

Principal Subsidiaries

American Agip Company, Inc. (U.S.A.); Eni Lasmo PLC (U.K.); Italgas - Società Italiana per il Gas S.p.A.; Società Azionaria per la Condotta di Acque Potabili S.p.A.; Saipem S.p.A.; Sonsub Inc.; Snam Rete Gas S.p.A.

Principal Competitors

Exxon Mobil Corporation; Shell Transport and Trading Company PLC; BP PLC; Royal Dutch/Shell Group; ChevronTexaco Corporation; RWE AG; Total S.A.; Sumitomo Corporation.