During the presentation of the company’s 2010–2013 strategic plan, Eni SpA (E) indicated flat 2010 upstream with an aim to grow production through 2013 at 2.5% CAGR (compounded annual growth rate), based on its oil price assumption of $65 per barrel. This is down from 3.5% in the 2009–2012 plan. ENI plans to bring 41 new fields online in the next four years.

Eni plans to invest €52.8 billion (approximately $72.3 billion) in 2010−13 time frame, an increase of 8% from the 2009−12 plan. This increase is driven by new projects in Iraq and Venezuela in the E&P segment. Eni is targeting an overall savings on operating costs of €2.4 billion (approximately $4.5 billion) by 2013, a 20% increase from the previous plan.

The company said its international gas sales will be boosted by an average higher than 3% a year in this four-year period and market share of more than 22% in Europe by 2013. The company has guided to 2010−13 average Gas & Power (G&P division) EBITDA of €4.4 billion (nearly $6 billion).

Eni plans to focus on selective strengthening of its refining system and improvement in quality of its marketing activities. The segment plans to deliver positive free cash flow from 2012. In its marketing business, the company anticipates a 34% market share in Italy by 2013, up 2% from 2009

Eni has guided to a dividend growth in line with the OECD inflation from 2011 at a $65 per barrel rate, which means no growth in 2010. The lack of a dividend policy has been a key negative for this stock.

We believe that one of the key reasons for Eni’s underperformance in 2009 in the European sector was the unexpected cut in the company’s dividend and the lack of a clear dividend policy. We believe that this uncertain dividend policy will further aggravate investors’ confusion. Price of Eni ADRs fell nearly 2% to $47.84 at Friday’s closing.

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