Good afternoon, ladies and gentlemen, and welcome to Eni's 2012 Fourth Quarter and Full Year Results Conference Call hosted by Paolo Scaroni, Chief Executive Officer; and Massimo Mondazzi, Chief Financial Officer. [Operator Instructions] I'm now handing you over to your host to begin today's conference. Thank you.

Good afternoon, ladies and gentlemen, and welcome to our conference call. I will take you through some of the highlights of this year, and then I will hand you over to Massimo Mondazzi, our CFO, who many of you know well from his time as deputy CFO of Eni and in key positions in E&P, for a more detailed look at the Q4 and full year numbers. With regard to the highlights in 2012, Eni delivered a robust performance. On top of that, we have fundamentally changed the profile of our company. Eni is now financially stronger and more focused. Our balance sheet has been transformed through the disposal of significant stakes in Snam and Galp, we have reduced net debt by almost EUR 13 billion, bringing our leverage to 25% from the previous 46%. Our remaining stakes in Snam and Galp are worth around EUR 5 billion at current market prices, and we will continue to push new value-creating opportunities. The transformation of our balance sheet has gone hand-in-hand with that of our long-term growth prospects. Exploration has been truly exceptional. In 2012, we have added over 3.6 billion boe of new resources or almost 6x our 2012 production. And this is not just Mozambique. We have also had significant success in the Barents Sea, West Africa and in Egypt. And through efficient project sanctioning, we have achieved an organic reserve replacement ratio of 147%. We are on track with our major development projects. In particular, we are pressing ahead with Mozambique, thanks to the agreements tracked with Anadarko in December and confirmed FID by 2014. And with regards to Kashagan, we are progressing steadily towards completion, and we will start up before the contractual date of June 2013. Of course, growth needs to be built on a secure…

Thank you, Paolo. In the fourth quarter of 2012, the market environment was mixed. The average Brent price was $110, slightly up versus last quarter and year-on-year. Refining margin in the Mediterranean area remained volatile. And the Brent/Ural margin dropped down from the high level seen in the third quarter to around $2.8 per barrel, 10% lower than the same quarter last year. Despite the improving trend of the euro against the U.S. dollar, comparing fourth quarter 2012 with fourth quarter 2011, the U.S. dollar has appreciated 3.8% versus euro. Before we turn to our results, you should note that following the sale of the 30% of Snam to Cassa Depositi e Prestiti, which occurred last October, on the fourth quarter, Snam is completely deconsolidated while a portion of the so-called continuing operation contribution under IFRS 5 was present in the fourth quarter 2011. As you may remember until third quarter 2012, continuing operation included the result of Snam's transaction with Eni. This change in perimeter affect our year-on-year comparisons. In terms of adjusted operating profit, in the fourth quarter 2012, we reported a 17% increase to EUR 4.96 billion. Excluding Snam from fourth quarter 2011, Eni would have reported an increase of approximately 30% in adjusted operating profit. The result reflects a robust operating performance in Exploration & Production division, up 15.4%, also due to the ongoing production recovery in Libya. Gas & Power reported a profit reversing the prior year loss driven by the Marketing activity, which benefited from the renegotiation of certain supply contracts and the ongoing recovery of Libyan supplies. Refining & Marketing reported a substantial reduction in operating losses, driven by efficiency and optimization gains. Turning now to the adjusted net profit from continuing operation. In fourth quarter, it was EUR 1.52 billion, a 3.6%…

Thank you, Massimo. Looking forward to 2013. In E&P, we will grow production by over 3% at our planned scenario of $90 a barrel, driven by key startups such as Kashagan, Angola LNG and the Algerian projects. We will also continue our focus on exploration and target over 1 billion boe of new resources. In Gas & Power, we expect results to be lower than those reported in 2012 owing to significant competitive pressure, especially on the oversupplied Italian market. We will contain the impacts of the market deterioration by accelerating our renegotiation efforts with all our major suppliers. In R&M, we expect results to be better than those reported in 2012 as cost efficiencies and a stronger retail performance will more than offset the expected deterioration in the refining environment and weak product demand. CapEx will remain broadly in line with 2012 and will be mainly focused on the development of our new major projects. This will continue to fuel Eni's growth in the future, a theme which we will discuss further in our strategy presentation next month. Thank you for your attention. Massimo and I, together with other key managers from the business units, will now be pleased to take up your questions.

[Operator Instructions] This question comes from Mr. Theepan Jothilingam from Nomura.

Two areas, please, I'd like to make my questions on. Firstly, just on Kashagan. Could you talk about the exact milestones that you now need to reach first oil, and then the speed-up -- the speed of the ramp-up to the threshold for commercial production, and if there is a number that you may give that you've assumed in terms of the contribution from Kashagan to 2013? My second question comes on to Algeria and the recent news flow around Saipem. I want to know, has Eni executed its own internal investigations on activities and relationships in Algeria? And then has the company taken any further steps there? And are you comfortable with your corporate governance?

Thank you. Claudio will answer the first question on Kashagan. I will answer on Algeria.

So Kashagan, so we have 3 main milestones. The first is onshore. We have to finalize the completion by March, and then we start testing with the gas [indiscernible]. And we have finalized the completion, mechanical completion onshore. And we are to start -- we finalized the completion onshore for the second train by April. So that are the main milestones. In term of production, we budgeted about -- a contribution, our equity about 19,000 barrel per days for 2013.

And now on Algeria. First of all, thank you for your question. Before going into the details of it, perhaps it would be useful to set out my thinking on the whole subject. First of all, Eni's policy is that nothing illegal is ever acceptable. It is perfectly possible to do business anywhere in the world without paying bribes. And if it wasn't, we wouldn't do business there. That needs to be crystal clear. Second, to ensure that our actions are compliant with our policy, since I joined Eni in 2005, I have ensured that no contracts with intermediaries were entered into. In addition, we have introduced strict anti-bribery processes and procedures which are recognized as some of the best in the world. Bribes are not only illegal, they would also damage our business. Our reputation has always been one of the major drivers of our growth. The goodwill this creates has made Eni one of the major companies in our sector. Now specifically with regards to Saipem, which is an independent listed company, neither Eni nor I have any involvement whatsoever with the alleged practices under investigation. Indeed, when we found out about the allegations at the end of 2012, in line with our role as major shareholders, we made our concerns known to the board of Saipem, suggesting they take all appropriate measures, including possible management changes in order to rectify the issue. This step indicates our zero-tolerance approach on this subject. While any wrongdoing will need to be evaluated by the Italian magistrates, we felt our concern was justified by the red flags, which the investigation raised on Saipem's processes. More specifically on your question, we commenced our own internal audit with a view to act in a completely transparent method. And as far as our procedures are concerned, particularly our anticorruption procedure, we believe that we are at the top of the best practices in the world as far as Eni is concerned.

Next question comes from Mr. Hootan Yazhari from Bank of America Merrill Lynch.

I just really wanted to focus around the gas renegotiations, which you say are underway. Maybe you can give us some color on how receptive your gas suppliers are to renegotiations, whether they're going to be applied retroactively like we saw last year. And we obviously had a very good first quarter result in 2012, and whether we could potentially expect similar sorts of effects coming through from renegotiations there. And the second thing, I just wanted to move on to Mozambique and just get some -- just get an update in terms of how the asset negotiations are going there with your partners and whether you're looking to farm down. And indeed, has there been any progress on farming down your 70% stake?

Very good. Now on the first question, I will ask Marco Alverà to answer. Marco Alverà: Thank you, Paolo. I would like to say without going into the specifics of each contract that, if on the one hand, the increasing liquidity at the hubs is putting severe pressure on our commercial margins, on the other hand, this increased liquidity is giving us some benefits in the negotiations as the suppliers are now finally coming to terms with the fact that liquid markets and hub markets are to be reckoned with and have to be taken into account into the contracts. We're in an unprecedented phase where we have effectively all our major contracts open. That's about 80% of volumes. We expect to close most of these in 2013. The timing of the closing of these is not predictable because it's a lengthy negotiation. So we expect some volatility in the quarters as when we close, we also have retroactive impacts on the accounts.

Okay. Very good, Marco. With regards to Mozambique, this has been an exceptional success for Eni. We have now 75 tcf of gas in place and an agreement with Anadarko that basically means we can go ahead with the development at full tilt while fine-tuning unitization agreement. Now we are very happy to be sitting on 70%, or 75 tcf, and are progressing towards FID by 2014. However, if we were to receive an offer of a strategic alliance which adds value to the project, we would, of course, consider it and inform the market upon its signing.

Wonderful. Just a follow-up on that. How comfortable are you going to FID on the Mozambique project without having announced major offtake agreements for gas just as yet?

Claudio?

So the answer is that we don't get any asset, really, without any contractual option on the offtake. So that is one of the conditions. And we are working on that.

Of course, you know that we have KOGAS as one of our partners, as well.

Yes. And there were also 2 other [indiscernible], because this gas is a good and cheap gas, so it is very competitive.

And well positioned as well.

It's very competitive in the market point of view.

Next question comes from Mr. Nitin Sharma from JPMorgan. Nitin Sharma - JP Morgan Chase & Co, Research Division: Two questions if I may. First one is on your guidance. You've guided to a no change in gearing in 2013 versus 2012 under $90 oil price scenario after factoring in portfolio management. My question is what extent of portfolio management have you factored in? For example, does it include any further stake sale in Galp? And the second one on dividend, what is your thinking on both the dividend policy and payout in 2013?

Okay. Massimo will answer the first question, and I will answer the second one.

Okay. As you can imagine, we are unwilling to disclose our assumption as far as the disposal are concerned. So I understand your point, and I'll try to give you a different guidance if I may. So if -- I would say if we imagine the current scenario, I mean, Brent price around $110, and we assume still a negative and deteriorating environment in Gas & Power and downstream, and euro versus dollar exchange rate of around $1.3, I would say that the in-leverage [ph], it should be just slightly higher than what we experienced in -- at the end of 2012.

Okay. As far as dividend is concerned, you took note that our final dividend for 2012 is up 3.8% year-on-year. As for next year and in general for our future shareholder remuneration policy, we will give you further detail at our strategy presentation in March.

Next question comes from Mr. Oswald Clint from Sanford Bernstein. Oswald Clint - Sanford C. Bernstein & Co., LLC., Research Division: First, just on the upstream earnings in the fourth quarter, which looked very strong. Can you just talk about if there's anything there on the cost side or talk about cost in the 4Q relative to the last couple of quarters? And also when you have a force majeure in Nigeria, does that mean you don't pay royalties? And therefore, was there royalties not being paid in terms of fourth quarter? And then secondly, just on Libya, you mentioned there's still a bit of a shortfall versus previous production levels. Do you expect to get back to those levels? And if so, over what time period?

Claudio will answer both questions.

The 3 questions are on -- so cost. In 2012, we have been quite good on cost because we reduced our operating cost and we are in the range of $6.7 per barrel. That is one of the best in the industry, and that is also all the reason of our best result. So cost is quite good, and that could be also true looking forward. For Nigeria, when we don't produce, we don't pay royalties. So the royalties is going to production. And for Libya, as you said, we are -- our performance in 2012 is quite good. The average is 255,000 barrels per day, and that also was our target. We think that we can recover full production by 2013 or -- about to say in 2014. And so in 2013, we continue progressively increasing and updating our project and our maintenance.

Next question comes from Ms. Irene Himona from Societe Generale.

I had 3 questions, please. Firstly, in 2012, did you have some take-or-pay obligation? And if so, could you give us the cost and the volume? Secondly, you point to 2013 production growth at $90 oil of over 3%. Can you just remind us of your oil prices in terms of the PSA effect? What would it be at the current prices? And thirdly, in 2012, you had a EUR 4 billion asset impairment, of which EUR 2.8 billion in Q4 [ph]. It's a substantial amount. Can you just remind us of what it's made up of?

Okay. A quick answer to your first question, we had a take-or-pay of EUR 500 million in 2012. On the second question, Claudio?

On the second question, at the to-date production, the growth should be 2% instead of 3%.

Sorry, Massimo speaking. As far as impairment, the total impaired costs are EUR 2.9 billion in the fourth quarter 2012. So some color, around EUR 500 million, relate to the E&P assets, some assets in U.S. and in Middle East. All this writedown relate to, I would say, industrial and industrial reasons. The majority of the total writedown relate to Gas & Power. Total amount is around EUR 1.6 billion and relate to the writedown of the Distrigas goodwill rate [ph]. For your information, the remaining goodwill at year end is around EUR 400 million. And the remaining part related to the Refining & Marketing, the writedown amounts to around EUR 600 million and relate to some refinery plays we have in Italy.

Next question comes from Mr. Alastair Syme from Citi.

Can I just ask for a bit of disclosure around the reserve replacement figures for 2012? What are the big moving parts in the 1 billion barrels that you've added?

Claudio?

So the replacement. So this year, one of the main contributors in term of countries in the replacement of 2012 are Venezuela, Nigeria, Algeria, Congo and Libya that are the main -- and Russia. Yes, Russia [indiscernible], yes, that are the main contributors coming from the project we sanctioned in 2012.

Can I just confirm that there's still -- there's none of Mozambique booked at this point?

No, no. We can put as a P1, a nondevelopment P1, when we take the FID in 2014.

Okay. Can you say either in absolute or percentage terms roughly how much of Kashagan is booked at this point?

With Kashagan -- the Kashagan, we have nothing this year because we already booked because we took the FID. Then we will -- during the production, after the production, we can book something following the setup of the different wells. But this year, there is no Kashagan.

Next question comes from Mr. Mark Bloomfield from Deutsche Bank.

Two questions, please. First of all, on Kashagan. Just wondered if you can give us any sense of whether there's going to be a significant working capital build prior to that project starting commercial production. And on that point, perhaps you can give us some sense of when you expect to book first revenues. Also on Kashagan, perhaps you can give us a sense of what you see the exit rate at the end of 2013, please. The second question is on Refining & Marketing. A very strong result in the fourth quarter despite indicating margins and throughputs essentially flat year-over-year. Perhaps you could quantify for us the year-over-year contribution from efficiency gains and operational improvement and maybe give us some sense of what the expected benefit from those factors is going to be in 2013.

Very good. Claudio will answer the first one. No, maybe Massimo will answer the first one.

The first one about the working capital related to Kashagan, I don't have any significant value to our line [ph] in this respect. So there will be no -- any significant amount capitalized as far as Kashagan.

So -- and I have -- by the -- in answer to your question about production is by the end of 2013 or early 2014, we aim to reach about 200,000 barrels per day, and then we -- they grow, going up up to 370,000 during 2014.

Okay. And as far as the Refining & Marketing margin is concerned, obviously, the shape of the result we got quarter-by-quarter in 2012 is related to the trend of the margin. So by definition, we benefited from the spike we had in the third quarter. And then as far as the internal effects are concerned, what I could have [ph] is that we gained something like EUR 100 million in terms of efficiency, so reduction in fixed cost during the 2012. And we also benefited from the partial closure of some sites we have in Italy that are the one, for example, Venice, that now is under a transforming process to a biorefinery, and some other sites, among which Gela, that has been partially stopped. And this result in a total benefit for our margin.

Next question comes from Mr. Michele della Vigna from Goldman Sachs.

I'd like to ask 2 questions if I may. The first one is on E&P. We've seen a big improvement in the realizations for both oil and gas in Q4 versus Q3. I was wondering what the key drivers are there. And then my second question is regarding buybacks. You approved a program with your board. I was wondering under which scenario of oil price or further disposals you would start to use that to avoid going into an inefficient balance sheet.

Very good. So with the first question, the good increase [ph] comes from mainly Libya, that -- the good production with regards -- in the last quarter. And the U.S., Italy -- the U.S., Italy and Iraq -- in Iraq that we have some good increase. That are the main contributors in -- and Ecuador, sorry. That are the 4 main contributors in the last quarter.

Now as far as the buyback program is concerned, you are aware that at the last AGM, we acquired the authorization of buying back up to 10% of our shares. Now we will talk again about this subject at our strategy presentation in March, in which we'll present the whole plan for cash back to shareholders.

Next question comes from Mr. Jon Rigby from UBS.

I've got 2 clarifications, and then 1 bullet point. On the guidance you've given for 2013 on production, can you explain what your adjustment is if you've done any for Elgin/Franklin? So is this an underlying number? And can you just -- are you able to lay your hands on a number of what Elgin/Franklin did contribute to your production in 2012? And also on your Gas & Power guidance, going back to the comments right at the start of the call on the Q&As, does the guidance that you're providing take into account any expectation on the retroactive adjustments that you mentioned? And then the second question -- that was a double-part first question. The second question is around Saipem. And I know, Mr. Scaroni, you made some comments, I'm not sure how official they were or not, a couple of days ago about Saipem. But it does raise the question, a point that you've made before of having equity ownership and no control; if the sort of arm's length investment that you have runs the risk of damaging both Eni and your personal reputations? And I just wonder whether you were prepared to just to expand a little bit about that in the aftermath of what's taken place.

Okay, very good. Claudio on the first one. I will answer the other.

So the first on Elgin/Franklin. Our hypothesis was to have a start-up in March, and that has been confirmed by the operator, Total, and also by the authority in U.K. So that is -- we will start, as you know, with 4 wells, 2 plus 2. And then during the year, if all the technical issue will be fixed there, we can add additional 2 wells. That is the program. In 2000 and -- for further years, we have a -- so for the 3 months, we had a loss of 88,000 barrels. In 2012, Franklin for us was a loss of 20,000 barrels per day. That was the average.

Okay. On the guidance on Gas & Power for 2013, let me try to give you some insight into the various moving parts. First, when looking at year-on-year comparisons, you should remember that 2012 included a number of extraordinary positive and negative impacts from supply and sales contract negotiations. While we do not disclose the individual numbers, you should bear in mind, and we said it before, that on a underlying basis, Gas & Power was not profitable in 2012 as our supply does not yet reflect the deteriorated market conditions. Now how this situation will evolve in 2013? It's a kind of a complex answer to give you, but it requires several elements. Now first of all, gas and electricity demand will continue to be weak in our hypothesis. On the back of an extremely weak 2012, we are expecting only a very limited improvement in Europe and none in Italy. Now the negative market complex [ph] coupled with the significant take-or-pay pressures accumulated not only by us but by all major operators mean we expect competition to increase further, especially on the Italian market. Already we have seen the Italian hub price, which we call PSV, trading below European hub prices, a trend which has impacted the 2012, 2013 commercial campaign significantly. Now given the increased pricing pressure, absent any change in supply costs, we will see Gas & Power results well below those achieved in 2012 on an underlying basis. So the question becomes, what will happen to supply costs in 2013? Now on the assumption that we will close all the negotiation in 2013 and including the retroactive benefits of the negotiation we are working on, we expect to limit the impact of the market deteriorations. In that case, 2013 would look similar to the underlying…

Next question comes from Ms. Kim Fustier from Credit Suisse. Kim Fustier - Crédit Suisse AG, Research Division: Just 2 questions if I could. Firstly, if I could ask the -- I guess, the usual question on Galp. I believe we're approaching the end of the lockup period on the 28th of February. And I was wondering if you could offer any thoughts or comments on how you see the remaining stake. And my second question, I guess, is on Chemicals. I think last year you guided to a EUR 400 million EBIT improvement by 2015 but actually made a record loss in 2012. So do you still believe that you're on track to achieve that target?

Okay, Massimo, the first one, and Daniele Ferrari, the second one.

Okay. Sorry, but I cannot give you clearly any guidance as far as Galp is concerned. So what we can confirm is that our idea is not to take this position for a longer period. But we are not able to give you any clear guidance about when and how we will go on disposing these shares.

Okay, about Chemicals. 2012 was the year when we started to engineer. We announced that the new strategy at the beginning of 2012. We changed the name. We started to engineer, then intervention on the structural reforms we had to do in our industrial system. And we are going to apply those starting from August this year. So the full effect on what we have under control will start to happen from August onwards. This means that restructuring of the poor performing side, change of our portfolio. So alongside the engineering of that, during 2012, we have strike a few deals to reposition ourselves internationally in most growing market and interesting markets for the Chemical business. It has been an unprecedent combination of scenario for us in terms of raw material price and commodity price of our chemicals, which made us to make an unprecedent loss. But we are confident that this will come under our control during 2013.

No more question at the moment. There is one more question from Mr. Andrea Scauri from Mediobanca.

Just a follow-up question on gas and marketing guidance, detailed guidance that you just provided. The guidance that you said, does it include a potential positive one-off from the renegotiation of contracts that you are implementing? And do you expect to close in 2013 or not?

Yes. I would say yes. We expect also -- we included in this guidance some positives.

I don't know if you can answer, but is it possible to quantify or not?

No, no. We are in the middle of a negotiation, and of course -- in the middle of several negotiations. And it would not be appropriate to give you more details now.

Next question comes from Mr. Jason Kenney from Santander.

Just a short question. I'm sorry if you did mention it earlier, but I joined the call late. Just on the tax guidance for this year. Obviously, a surprisingly strong tax charge in the fourth quarter with the hit, EUR 230 million. But if you guide for what 2013 tax should be and how we should think about tax with a rising upstream contribution, that would be great.

Yes. The guidance I can give you as far as 2013 is concerned is a slightly higher tax rate than the tax rate we experienced in 2012 due to the fact that, as I would say is clear after the discussion, the contribution of the Italian businesses will be poor in 2013 versus an increase in the contribution from the E&P businesses abroad that suffer a higher tax rate. And so that's the reason why the guidance would be slightly higher.

Great. Thank you. Well, perhaps if there's no more questions, we can wrap this up. If you do happen to have any more, you can get in touch with us at the Investor Relations number. Thank you very much.

The control room confirmed, there are no more questions. Ladies and gentlemen, the conference is over. Thank you for calling.