Eni S.p.A. (E) Q4 2025 Earnings Report, Transcript and Summary

Good afternoon, ladies and gentlemen, and welcome to Eni's 2025 Fourth Quarter and Full Year Results Conference Call hosted by Mr. Claudio Descalzi, Chief Executive Officer. [Operator Instructions] I'm now handing you over to your host to begin today's conference. Thank you.

Thank you. Good morning, everyone. 2025 was a year of exceptional progress at Eni. We developed and executed our distinctive strategy in many cases, exceeding our original target. We will discuss in detail our updated plan at the forecoming Capital Markets update in March. But I can say at this point that 2025 provide an excellent guide to what you should expect the future to hold for Eni. Last year's result proved the value of our consistent strategies, strong operational and financial performance, timely project delivery to support growth and diversified investment for the short- and long-term to generate further value for investors. Specifically, looking in detail at the 3 main business pillars, the successes are compelling. First, Global Natural Resources. We started up 6 major projects as planned. This supported an underlying production increase of 4%, well above our original full year guidance and growth above 7% over the 2022, 2025 period, leading among our peers. Project execution is a clear strength of ours, and both Agogo, Angola and Congo LNG are further examples of our leadership in time to market. In addition, we took FIDs on 4 major new projects, 3 of which are operated, driving a stronger service replacement ratio of above 160% and meaning we currently have 500,000 barrels per day of production under development, securing our medium-term outlook. At the portfolio level, we have also established a new platform of growth by creating our largest business combination with Petronas in Indonesia and Malaysia. And we are progressing our Argentina LNG project with YPF and XRG. Alongside our continued exploration success underpins long-term outlook. We discovered 900 million barrels of new resources in 2025, reaffirming our industry-leading track record. Now over 10 billion barrel of resources discovered since 2014 at less than $1 per barrel from multiple geographies and different geological plays. Our focus on value as well as volume is also emphasized by our continued action to valorize our resources through dual exploration. As we did in Indonesia with the business combination in Cote d'Ivoire and high grade our portfolio through tail asset divestment. GGP is business we have comprehensively transformed in the past few years. And notwithstanding a softer market, we delivered EBIT above EUR 1 billion for the fourth consecutive year. Gas to power was also a strong contributor in 2025. And together, this result emphasized the work underway to capture more margin from our equity production. Second, our transition activities. They generate material growth and value creation and are important in diversifying and strengthening any earnings. In a year that was not remarkable for market improvement, we improved the robustness of our integrated business models, and we have been rewarded with strong earnings, EUR 2 billion of EBITDA and by the validation from the market with a contribution of EUR 5.8 billion from top private equity firms. These deals were completed in a multiple around -- with a multiple around 3x those of Eni stand-alone implying over EUR 23 billion of enterprise value for these new business lines. We are locking in further growth with both Plenitude and Enilive. Plenitude expanded its renewable capacity by more than 40% in 2025 and we'll add 10% to its customer base in 2026 on closing the agreed Acea Energia acquisition. Enilive has 3 new biorefineries under construction and 2 more have recently reached FID, together representing a further net 2 million tonnes of annual capacity. And third, industrial transformation. Changes in the energy market bring challenges that we are successfully mitigating but also opportunities. In this context, we are advancing the transformation of our traditional refineries. And we have set out the decisive measures to address challenges in our chemical business that are the same impacting the entire European industry. In 2025, we accelerated these actions, closing the crackers at Brindisi and Priolo 3 to 6 months earlier than planned. At the same time, we are transforming Versalis towards bio, circular and specialized products. The strategic and operational progress achieved in 2025 translates into exceptional financial delivery. Robust financial position is critical in managing the cycle, preserving flexibility and delivering our strategy. Last year, CFFO at EUR 12.5 billion was EUR 1.5 billion ahead of plan on a scenario-adjusted basis. Responding promptly to the more challenging scenario, we cut gross CapEx from a planned EUR 9 billion to EUR 8.5 billion, and we identified cash initiatives totaling EUR 4 billion raised from an initial EUR 2 billion, including delivering EUR 0.5 billion of savings. Net CapEx on a pro-forma basis was lower than EUR 5 billion versus our initial expectation of EUR 6.5 billion to EUR 7 billion as we executed on more portfolio activity for better value. As a result, pro-forma gearing at year-end was 14%, with net debt down almost EUR 3 billion over the year. These outcomes gave us the opportunity to raise our share buyback by 20% from EUR 1.5 billion to EUR 1.8 billion, achieving the unique combination in 2025 of both lowering debt and enhancing shareholder distribution. In Q4, pro-forma adjusted EBIT was EUR 2.9 billion, up 6% year-on-year despite the lower oil price and weaker dollar. We reported excellent E&P result with production up 7% year-on-year and 5% sequentially at 1.839 million barrels per day, underpinned by the positive impact of 2025 start-ups. Full year production of 1.7 million to 8 million barrels per day was 2% above our guidance for the year. GGP Q4 EBIT of EUR 0.1 billion delivered on our raised full year guidance of more than EUR 1 billion despite relatively low volatile markets. Plenitude and Enilive together delivered EUR 2 billion of pro-forma adjusted EBIT in the year and Enilive benefited from improved bio margins in the quarter, part offsetting seasonally lower marketing. Refining returned to profit in the quarter, albeit held back by relatively low utilization rates, while chemicals continued to see a weak scenario setting the early benefits of the restructuring underway. Q4 adjusted net profit was EUR 1.2 billion with a tax rate of 37% as we adjusted to a full year rate of 44%, just below guidance. CFFO in Q4 was EUR 3 billion, representing excellent cash conversion again, helped by the material cash initiatives we undertook in the year. Full year cash flow at EUR 12.5 billion was EUR 1.5 billion above our full year guidance on a scenario adjusted basis. Thanks to a release in working capital and our actions around the portfolio, we were able to fund our CapEx, shareholder distributions and other commitments and also to significantly reduce debt. Gross organic CapEx in the quarter was EUR 2.6 billion, taking the full year figure to EUR 8.5 billion, EUR 0.5 billion less than our original plan. Valorizations and portfolio activities have raised around EUR 10 billion over the past 2 years. In 2025, we completed more than EUR 6.5 billion in valorization of portfolio activity, which meant that adjusting to a pro-forma basis, net CapEx was lower than EUR 5 billion, around EUR 2 billion below our original plan. But 2025 is not a one-off year. For 2026, we expect to limit our gross CapEx to around EUR 7 billion and net CapEx at around EUR 5 billion. We reduced net debt over 2025 by almost EUR 3 billion, as we said, bringing gearing to 15% at year-end or 14% on a pro-forma basis. We can confirm that we expect pro-forma gearing in 2026 to remain at historically low levels at between 10% to 15%. Our shareholder distribution details, we have to revert to the CMU in March, but we can confirm a full funded attractive and growing dividend is our first priority. In the last 5 years, we have raised the dividend by an average of 5% per year, reflecting underlying growth and the reduction of sharing issue. At the same time, we have additional tool of distribution via the buyback that reflects our policy of showing cash flow generation and upside. In 2025, for example, we raised the buyback by 20%, the third occasion in the past 4 years, we have increased distributions. In conclusion, 2025 was a clear outcome of Eni strategy in action. Looking ahead, we will update our -- on our plan in March, but strategy remain unchanged. The choices we make in how we do business are driven by our industrial, technological and commercial strength and by a business model that has proven to perform in strong and soft market conditions. The upstream will grow organically at a sector-leading rate, leveraging our exploration successes and our proven ability to fast track time to market while managing costs and delivering the value from our business combinations and partnerships. On the energy transition, we will deliver the programs outlined by -- for Plenitude and Enilive while developing CCS, fusion, battery storage and data centers for hyperscalers, coupled with Blue Power and exploring opportunities in critical minerals. Portfolio activity will again be material in 2026 as we continue to pursue disciplined capital alignment and value disclosure. In March, we will share with you the details that underpin this outlook and which support continued highly attractive investor returns. And now with the rest of Eni top management are ready to take your questions. Thank you.

[Operator Instructions] First question is from Alejandro Vigil, Santander.

Congratulations for the results. I have 2 questions about the upstream business. Definitely, you will elaborate more on the Capital Markets Day. But I'm very interested in the outlook for this year, thanks to the contribution of the joint venture with Petronas, if you can elaborate about potential increase in production driven by this joint venture? And the second question is about Kazakhstan. There is a lot of noise in the media, and I would like to know your view about the situation in the country.

Okay. Thank you. Thank you for the questions. I just give you a few words about Petronas and the outlook and Kazakhstan, then Guido -- and I will give where are the possibility to expand and elaborate on these 2 questions. So Petronas, I think that Petronas will be finalized by the second -- end of the second quarter. And it's going to give a contribution clearly, yes. We cannot be precise now. I think that we can give you more detail on the -- in March, but clearly is going to give a contribution in terms of production for 6 months. And as you know, we are going to have immediately a company that is producing about 300,000 barrels per day, but we have already project that we're going to implement FID in the next years to reach 500,000 barrels per day. We already drilled in Indonesia, as you know, successful wells that we can tie into the existing infrastructure. So we talk about reserves, not just resources. Kazakhstan -- Kazakhstan, I think that is a long story because in the last -- in the last 15 years, every 3, 2 years, we have some renegotiation and some, I can say, dispute, but more discussion because we are friends. And as always happen between friends, we always find a solution. So I'm positive about the future. But now I think that Guido can take over and give you more detail.

Yes. Thanks, Claudio. So barring from more details coming in the next CMU, of course, the growth of production next year will be driven by the project we have started up recently. So we will see more production coming from Congo, from Norway, from Angola, from UAE and of course, from Indonesia. But as I said, more details will come in a few more weeks. As far as Kazakhstan, of course, as you know, the Republic has advanced several arbitration claims regarding production performance, cost recovery, environmental matters, sulfur storage and the JV is defending. There is a broad claim here, which -- it's in the arbitration court at the moment, and we do not expect a result before 2027, 2028. However, we continue as the operator is saying, confirm that operation have been conducted in compliance with the law of Kazakhstan and the operator had always possessed the required permits. And therefore, we are challenging this sulfur refine in all the courts.

Thanks, Alex. We can now pass over to Michele Della Vigna at Goldman Sachs.

Congratulations on the results. I wanted to ask 2 questions. First, on your CapEx guidance for '26 of EUR 7 billion. I was wondering if you could walk us through the bridge between the EUR 1.5 billion this year and the EUR 7 billion. Clearly, the deconsolidation of Indonesia plays a part, but if you could give us a bit more detail? And then secondly, the more we look at all of your discoveries and access in the last couple of years, it feels like you probably have the best pipeline of new projects you've ever had in your corporate history. How should we think about your priorities for FID in 2026, given the wealth of opportunities between Namibia, Indonesia, Cote d'Ivoire and all of your recent discoveries?

Okay. Thank you. Thank you for the question. So it's true, we said that we cut our CapEx or we reduced our CapEx from EUR 8.5 billion this year to EUR 7 billion. That is a reduction in terms of CapEx optimization. We are not reducing the growth. We are not touching the growth of the company, but just we became more efficient because we did -- we have a strategy or we applied the strategy to be more efficient starting from the exploration. So exploring and go to the place where we have existing facilities. And then this year, we had a very excellent success. Also last year, we are moving at EUR 1 billion or less than EUR 1 billion resource discoveries in the right place where we have infrastructure. That means that we can continue to reduce CapEx because we need less CapEx to produce more, more, more production. That was a strategy that is not something that you can start overnight. It's something that we start in 2011, '12, '13. It's something that we built day by day because we never stop exploration. We never stop exploring. We never stop developing. We never stop going directly to the development and working as upstreamer. So that is the reason why we can reduce our gross CapEx. Then we have other points that maybe Guido can explain to you that is an additional important unless that can explain why we can reduce CapEx. Guido, you can explain.

Yes, Claudio. And I mean, just building on what you were saying about the advantaged barrels. The project we have started up in the last 4, 5 years and the prospective project, which you will have more visibility in the Capital Market update are projects with, first of all, low unit development cost. Second, they have longer plateau. So we can devote less CapEx to maintain the production and fight the decline and more CapEx for the growth at the same CapEx level in a nutshell. As far as concerned, your question, Michele, about the -- what will come next year. Of course, we have a great degree of optionality. We have a very large and diverse portfolio of projects. But clearly, next year, the project that we will focus more in terms of FID is Argentina, Ivory Coast, Cyprus, plus a few more geographies in Africa.

We're going to now move on to Biraj Borkhataria at RBC.

Just to follow up on the CapEx point and the number you guided today. How much of that year-on-year change is the Indonesia CapEx coming out as you deconsolidate it? And is there anything you can say on the CFFO contribution that will be removed also when you deconsolidate that production? And then second question is just on Versalis. You've now closed down the crackers, but we haven't seen that sort of come through in the P&L. So do you still expect to be EBIT breakeven in 2027? And what should we expect for 2026?

Okay. CapEx in Indonesia, we already said that Indonesia is not -- I think that we can start working in Indonesia after the finalization of the business combination of the new company that we expect in the second quarter. So I think in any case, the impact on CapEx on Indonesia will not be very large this year because then we have FID to take maybe in '26, but mainly in 2027. For Versalis, I think Adriano, CEO of Versalis, can give some answer, and some light.

Sure. Thank you for the question. I mean we have seen some improvement in the second half of 2025 following the shutdown of the 2 crackers that, as we said before, we move forward and we stopped earlier than what was original plan. Unfortunately, the positive impact, although you remember what we said in the previous call that the impact of 2 major cracker shutdown, you start to see after 12, 18 months. So we've seen some positive impact, and this helped in order to mitigate the deterioration in the scenario. So we have seen improvement in the second half of 2025 compared to the second half of 2024, and we continue to see also in the beginning of the months of 2026. We are taking additional actions in order to mitigate the plan that is not coming as expected in terms of scenario. I'm pretty sure that you have seen so many shutdowns have been announced in the last 3 years, close to 160 shutdown announcement. And in the next capital market update, we are going to share the plan for the next 2, 3 years.

We're going to move to Lydia Rainforth at Barclays.

Two questions, if I could, please. The first one, on the exploration side and building a little bit on Michele's question earlier, you've clearly been very, very successful in what you've done. Can you actually give us what the success rate is now? Are we looking at sort of 1 in 2, 4 out of 5 wells? I'm just trying to work out what that success rate is. And then secondly, just on AI, clearly, you've got a lot of computing power. I'm just wondering what you're seeing, if you're seeing any benefits at this point or what your plans are around that.

On exploration, last year, we've been very, very successful and success rate was exceptionally high. As you could also notice from the very low write-off we basically written in our books. So it was really exceptionally high, very close to 100%, the success rate last year. On the AI, as you may be aware, last year, we've opened a new business line on data center, coupled with the gas-fired plant. We have a plan with international partners to develop a data center in the north of Italy, close to Milan up to 500 megawatts split in different phases. We have a first phase which will go from 80 to 100 megawatts and the second phase to 500 megawatts. And this is in an area which is underdeveloped and in a country like Italy, which has foreseen a demand of AI center by 2030 up to 1 -- the impact, of course, we are forerunner in terms of application of technology and super computational capacity on our activity and the exploration success is one example of it. Of course, AI will apply also on other segment of the business in the upstream like the production improvement, drilling and project improvement, rotating machine enhancement. So we expect a significant impact on the AI. Just to remind that in the industry, we have already one of the lowest downtime for the production facilities, which is around -- which is less than 1%, while the average of the industry, WoodMac data is around 3.5%.

We're now going to move to Irene Himona at Bernstein.

Congratulations on a strong year, especially in the upstream. Can you please say, firstly, what did you change exactly to high-grade production? What does that involve? Secondly, can you remind us what upstream tax rate we should expect in an environment of $65 to $70 Brent? And then finally, very quickly, looking at the 10 billion BOE of resource you have discovered since 2014, can you say roughly what the split is between gas and liquids, please?

On the what we did basically question of the high grading, of course, in our portfolio, we are bringing onstream project with very high profitable cash flow per barrel. And we are divesting late-life assets. So the combination of these 2 elements. So the new project and the late-life asset disposal is high-grading our portfolio. And you may have also seen that if we compare the free cash flow per barrel from 2024 to 2025, we have seen a 10% increase. On the tax rate...

Before talking about the tax rate, so you remarked a very successful increase in our production. Absolutely what we said is true. So we have a different quality in terms of barrel, so higher cash flow per barrel, but also we have been successful for -- in the last years to be in terms of time to market -- time to market and budget. So we have been able to not only respect our schedule, but in most of the case, faster. So that clearly impacted positively. The production impact and internal rate of return of all our projects. And we are respected on all the budget. So that is something that maybe is not clear or explicit to all -- to everybody, to investors, to all our community, but that is one key point of success in terms of results and the value of our volume. Tax rate.

On the tax rate, as you have seen, there is a fluctuation that are mainly related to clearly to the composition. In this case, you mentioned the upstream tax rate. So on the composition in terms of production contribution in different countries on the exploration write-off and some additional one-off factors that could imply or determine certain effects. In the 2026, the expectation is to -- with a $62 that is, for the time being, our assumption, a tax rate that should be in the range of 45% to 50%. Clearly, if the price will improve, there will be a lower tax rate.

Just to complete, you made another question, the split between oil and gas of the discovery is 70% gas and 30% oil.

We are now going to move over to Josh Stone at UBS.

Two questions, please. One, I wanted to pick on -- up on this Italian energy reform that got passed and whether you had a chance to estimate the initial impacts because it looks like there's quite complicated, lots of moving parts. It's connected to gas spreads, the ETFs and tax. Maybe you could just talk about how you're thinking about that being a net positive or net negative and the different impacts on your different parts of the businesses, that would be useful. And then second question on the buyback. I know we've got to be patient for the actual number, but I was hoping you can maybe share just your thought process here and the importance you put on buybacks after the re-rating of your stock. And am I right in saying when you set this buyback, you'll be using the $62 oil price deck for 2026?

About the energy bill that you were referring in Italy, clearly, the impact is slightly negative, but quite marginal because you have to consider that as Eni, we are not just a supplier and a producer, but we are also an important industrial player in the country with different activities spanning from the refinery, chemicals, bio-refineries and also certain upstream activity, clearly. So you have to consider that the overall effect is mitigated by this double exposure. So it's absolutely, let's say, marginal towards the overall performance of Eni. In terms of buyback, I was mentioning before, the reference is $62 for the expectation for the next year in terms of pricing, we have to confirm at the next Capital Market Day. Clearly, you know what is the structure of our distribution policy. When we set up a buyback that is clearly the variable component of our distribution, this is a floor. And historically, we proved that this is the floor because we raised the floor 3 times on 4 years. And the scope is substantially to share the upside that will emerge both in the performance and the scenario to our investors. We will provide all the details in the Capital Market Day at the end of March.

So now we are looking for Alastair Syme at Citigroup. Alastair has disappeared off the list, apologies. We're going to move to Matt Lofting at JPMorgan.

Congratulations on the strength of execution throughout 2025. Just 2 quick questions from my side. First, coming back to the net debt and gearing targets. I wondered, you mentioned Asia and the JV earlier. I wondered whether there was any other accounting effects in those targets, including any allowance for a possible deconsolidation of Plenitude, which I know has been sort of talked about in the past. And then secondly, Eni is obviously one of the companies in the industry that's retained a presence in Venezuela. Do you have any thoughts at this point on the near and longer-term upside that could sit there for you in the country and how you'd sort of think about ranking that within the range of portfolio opportunities that you have from a capital allocation and risk reward perspective?

Thank you. So Francesco, look after gearing, and I look after Venezuela.

Okay. Clearly, about the gearing target that we provide you is, let's say, an effect of a number of actions and levers. As we said before, there is a strong operational performance, cash flow improvement, CapEx efficiency. And clearly, the satellite model that helps to, let's say, transform this potential contribution in terms of growth in stand-alone companies or entities that will be able by themselves to provide the debt. We are studying different solutions. You were referring to Plenitude, but clearly, we are working on different concepts and potentially this could be, but it's something that will be eventually disclosed at the proper time.

Venezuela, what I can say that, for sure, is an upside for us, an upside from several point of view, not just 1, 2, maybe 3 upside, different kind of upside. The first one that through the general licenses, #50 that has been issued a few days before, 1 week, I think, we can recover our gas. So Venezuela can pay through using crude, the gas that we deliver to the domestic market. So that is already a big upside before we were stuck for almost 1 year. And that creates a very buildup of our outstanding. So now that is done. Then there is a second upside. We have blocks, we have oil. We are in one of the best block in the Orinoco belt. We are also offshore with Corocoro. And that possible additional development can use to recover the past cost or the past outstanding that's around EUR 3 billion. And that is another upside. So for sure, we are working with some American companies to see if we are creating a joint venture to develop this field are producing. But clearly, they can grow our production quite quickly, and that is a possible upside. And the third upside is gas. Gas is something that is needed. You have to consider that U.S. have to increase or deliver additional EUR 20 billion or more EUR 20 billion in 1 year -- less than 1 year because with the sanction on the LNG gas and Russian gas, we need to compensate this EUR 20 billion. So you asked to -- they have to increase. But U.S. need also gas in domestic market. So the gas that we discovered about 20 Tcf in Perla with additional prospects that are really located in the right position, not just to deliver domestic gas, but also to export to Europe is a third opportunity. And clearly, these are in line with what President Trump wants. I mean, develop the oil and gas in Venezuela -- for Venezuela first, but also to create a different kind of environment in the region. So I see that very positively.

So we'll move to Martijn Rats at Morgan Stanley. Martijn?

Yes. To be honest, most of my question has largely been asked, but I've got one left. There have been a couple of articles saying that you're interested in sort of revitalizing some of the oil trading business within E&I and including some partnerships with some other firms. I was wondering if you could provide some color around that issue, what your thoughts are in that area.

We've started a journey to improve our trading and extract more value from this segment of the business. And we've -- first of all, we've created one single organization. So we have put under one umbrella all the trading arms of the company all along the value chain to extract all the margins. That's the number one. Number two, we have changed also some of our approaches to the risk. We are becoming a little bit more -- a little bit less risk adverse. And number three, we are, of course, looking at different way to do business. And in doing that, of course, we have started a dialogue with some international trading players in the recent months.

We are going to move to Massimo Bonisoli at Equita.

My 2 questions. One on CapEx. Net M&A was around EUR 4 billion in 2025, roughly EUR 2 billion above the initial guidance with EUR 2 billion target also for 2026, does this implicitly rise your opportunities over the 4-year plan? So I'm curious to understand if you have more options in your portfolio than 1 year ago? And the second question on biofuels. How do you see biofuels trading environment evolving in 2026, particularly in terms of margins and market balance between supply and demand?

Yes. Thank you, Massimo. About the net CapEx and the portfolio effect, as you can see, we continue to upgrade our portfolio to leverage on our capability to execute and to explore and to have success for the dual exploration model to valorize as we have done so far, the business line that will be recognized as valuable through the transition. So there is a large list of opportunity. Remember, last year, we declared there was a risk amount and the result at the end in terms of value and the higher effect is the fact that clearly, we had a positive result at the end. So in terms of this year effect of EUR 2 billion, you can also already appreciate that we completed in early January the first disposal. It was the Ivory Coast top-up. And this is something that is already on our, let's say, results. And we are moving to additional progress or activity related in particular, Indonesia, 10% is a program that is ongoing and some other additional element. We continue to work, and you should expect as we had last year, eventually upside because we generally risk our overall portfolio program.

Yes. On biofuel, thanks for the question, Massimo. Biofuel, we see the development is absolutely constructive. We estimate biofuel demand in 2026 above EUR 20 million. This year, it's going to be around EUR 16 million, so a significant step-up. It's going to be driven mainly by Europe and U.S. Main reason for this demand growth is twofold. In Europe is the well-known Renewable Energy Directive #3. We quoted the Germany example even in previous call. I just want to add that on top of getting extra GHG reduction target and the ban of double counting, they are even asking to allow site investigation in countries -- foreign countries that are providing flows to Germany in order to be that flow accountable. And this is actually a positive evolvement for the supply-demand balance. So this is another good news. Talking about U.S., actually, just yesterday, the EPA said that within the end of March, they want to finalize the new renewable volume target. Expectation is to have a significant increase between 35% and 40% increase. We are seeing this already on the RIN prices. RIN prices improved by 40% from the beginning of the year. And this happened without an improvement in terms of RIN generation. So this means that in order to cope with the new EPA target, we need to have RIN generation improvement, and this is going to drive economic margins improvement itself. Last comment, this year, we saw a reduction, a destocking of the RIN banking. It's about EUR 0.5 billion destocking. And this is a turning point that revert the trends that we saw previous year when the RIN banking actually got exactly in the opposite direction with an increase of EUR 2 billion. We expect this trend to definitely move forward and to rebalancing the supply demands overall.

We're going to move now to Mark Wilson at Jefferies. Mark, if you're online.

Okay. You said earlier how the strategic path that has got you where you are in upstream is not one that you can start overnight, the exploration, the infrastructure, as you say, you've never stopped. Now you've also spoke to AI impacting exploration. And on the last call, you spoke to the technical hedge that floating LNG is giving you. So -- but my question is that it's impossible to have this kind of delivery alone. So I'd like to ask which third-party areas other than the ones already spoken to across your upstream partners or indeed oilfield service contractors, where has the greatest improvement been to assist your delivery? Is it drilling, reservoir characteristic, E&C cycle time, shipyards? Is it something else? That would be my question.

Thank you for the question. It's very interesting. No, first of all, we are never alone in the life. I have a lot of colleagues with me in Eni, but we are not alone in terms of strategy. When other company outsourcing, we are in-sourcing, that means that we kept in our company all the main competencies. That started in the 2000 and so 2011, 2012, we decided to in-source. So we didn't follow the mainstream that say reduce cost and may your contractors as a main contractor, they do everything in Turkey. Now we want to take our end in each project. And that means that in the last, I think, 16, 17 years, we put our competencies and we increased our competencies in all the different segments of our business. I talked about E&P, not only. We increased the R&D investment. We opened up 7 R&D centers. We increased our R&D people [ 1,200 ] people. And we have in our end technology in drilling, reservoir or seismic and development, and we made a revolution in our time to market, the best we can say in time to market. So we are not alone, but we are alone in terms of the choices we made in the last 15 years. So I think that, that is the main reason. I don't know if we share this point, you want to say something else. I hope and I think...

It couldn't be better.

We're going to move to Paul Redman at BNP Paribas. Paul?

Just 2, please. First was you achieved EUR 4 billion of cash initiative benefit in 2025. I wanted to ask how much of that is roll or could roll over into 2026? And secondly, I know people have asked but kind of -- and it is early, seeing you've got a Capital Markets Day in a few weeks' time. But I wanted to ask about how you think about allocating to shareholder. You currently allocate based on a percent of cash flow from operations, but you've clearly paid above that percentage. And I think part of that has been driven by acceleration of divestments. So I wanted -- and this year, you're guiding EUR 2 billion of divestments. So I wanted to ask if you still believe that percentage of cash flow from operations is the appropriate way to allocate cash flow to shareholders.

First of all, about the cash initiative, you have seen that we executed. I think that there is a lot of evidence through the results that we achieved that we started with EUR 2 billion, we raised to EUR 3 billion and then EUR 4 billion, and we performed. Most of that are one-off factors that doesn't mean that they will be reverted, but actually will be rolling. So we are executing our cash management in a different way than before, optimizing the time to market of this cash needs, and there were a lot of opportunity. We continue to study because I believe that generally in managing a huge amount of cash in a company's Eni, there is still a lot of pockets or upside that are -- have to be discovered. It is a sort of treasury search that we look for. So we do expect something also, but this is probably we have to wait a bit, 3 weeks for additional disclosure. On the cash flow from operation reference, the idea of having cash flow from operation as a starting point for distribution is because we want to put the shareholders at the top of our priority. So the first line of cash flow is the cash flow from operation, pre-working capital. And clearly, there is all the other factors that come later. So the free cash flow could be another way to distribute. Clearly, you have to change the percentage because you are speaking about different absolute figures. But at the end of the day, the logic of having cash flow from operation is giving the reference in terms of priority versus the distribution line. We will see again also in the next Capital Market Day, what will be the announcement and what will be eventually the percentage that we allocate.

And we're going to go to the last question. We found Alastair. Al, you around. Al at Citigroup.

Yes. So the question I had was really on -- well, I mean, there's been a lot of commentary in Italy and across the European Union about the European carbon scheme, the ETS. And you have a foot in several camps here, you're a carbon emitter, you're a power generator, you've got a CCS business. So can you give us a sense of where you think the political discussion is and what, if any, changes you would like to see? And if I could poke in a second question. Do you have any update on the well you're drilling offshore, Libya?

Yes. Libya offshore, we are currently drilling one exploration well, and we'll announce results when they become available, of course.

I think that we are very ready to talk about drilling reservoir explorations and all we want. But on ETS, honestly, we cannot give you a lot of light is the tax we pay. I don't know. Honestly, there is a big debate today because in Europe, the industry is suffering a lot. It's not growing. In the contrary, they are squeezing the industry in Europe with all the different kind of taxes and green deals that impacted negatively all the kind of industry. ETS is one of these taxes. And Europe is the only country that apply these taxes at a very high level. So when we talk at competition with the rest of the world, it's not easy to compete one and the other and not really applying the same kind of rules. So that's what I can say, but I [ do ] not want to enter any political debate. It's not our business. I prefer to increase production and get good results for my company instead to cry about taxes I'm paying. Thank you.

Claudia, can I ask, does it make you think differently about putting capital on the CCS business given that there is a potential that the legislation could change?

No, I think that change has been made already have been in taxonomy and they've been accepted at least. At the moment, in Holland, especially in U.K. and now in Italy, so we have at least 3 countries where the CCS can be developed. In U.K., they made a big, I think, effort for the future. And for that reason, they -- now the investment has started and also the project has been sanctioned. In Holland, I think that is going to follow. And Italy, we are very close to have a new law, but we have a huge amount of potential to be explored and we constitute the company. We already got interest from investors, and we have already an investor with us in the company. So I'm positive and Europe after years, now they accepted this important tool to reduce CO2 emissions. And clearly, the CCS is the counterpart of the ETS because the CC, so the capture now has not matched yet, but now with the ETS that is close to EUR 90 or between EUR 80 and EUR 90 per tonne, I think that the CCS based on the existing assets, not on new development, is very good from an economic point of view. It's very positive.

Thanks, Claudio. Thanks, Al. That brings us to the end of the call. Thank you very much for your attention, both today and through 2025. And we look forward to speaking to you all in greater detail on the new strategy and plan or the strategy and the new plan on the 19th of March. So we'll see you all then. Thank you very much.