Good afternoon ladies and gentlemen, and welcome to Eni 2015 Third Quarter Results Conference Call hosted by Claudio Descalzi, Chief Executive Officer and by Massimo Mondazzi, Chief Financial and Risk Management Officer. For the duration of the call, you will be in listen-only mode. however, at the end of the call you have opportunity to ask questions. I'm now handing you over to your host to begin today's conference. Thank you.

Thank you. Good afternoon. Before describing the financial results, I would like to give you a brief update on our strategic progress and take the opportunity to give you more details on the transaction we announced yesterday concerning the sale of the stake in Saipem, a major milestone in our strategic plan. The strategic plan was based on three pillars. Focus on value growth in upstream, turnaround in mid downstream, and value enhancement and true portfolio transformation. We have made rapid progress with each of them, delivering significant change between to the benefit of our shareholders. On our first pillar is upstream growth, where we improved our 2015 guidance, planning a 9% production increase, almost doubling the regional target. In exploration in the first nine months, we have more than doubled our resources target, discovering 1.2 billion barrels at the record level of $0.60 per barrel. On CapEx, we focused a reduction of 17% versus the 14% originally planned. And also for OpEx per barrel, we include our target with a reduction of 12% instead of the 10% CapEx. In the second pillar, our strategy is the restructuring of the new downstream. This segment generated a best cash contribution of more than €3.5 billion in the first nine months. Gas and power, notwithstanding the weak economic performance in the last quarters, is continuing its recovery and will be close to breakeven in 2016 regardless of any delay in the conclusion of the ongoing arbitration. This is a further improvement to the original guidance. R&M and chemicals are recoding their best performance for many years. For refining, we are reducing our breakeven to around $5.50 a barrel, taking advantage of operating efficiency and improved market conditions. We expect the highest performance in R&M since 2008. The result of chemical sectors is expected to be the strongest in 20 years, thanks to the ongoing turnaround plan and the focus on specialized products, which maximize the upside related to a lower fuel stock price. Our downstream segment is expected to be overall free cash flow positive in 2015, two years in advance of our plan. All these actions will contribute to Eni achieve coverage of CapEx from organic cash flow in 2015 at $55 per barrel, excluding the ongoing contribution of Saipem. The last pillar is our transformation planning. Yesterday we announced the most important part of this process, the Saipem stake disposal and the consolidation. With this operation, we are enforcing both Eni and Saipem. Eni through the disposal of 12.5% and the intercompany debt repayment will improve the balance sheet and free up resources to support this investment plan. While Saipem, with a new strong shareholder base, will have its financial solidity and strengthen the execution of the business plan. Now we’ll leave the floor to Massimo for further details on the Saipem transaction and the presentation of Q3 and year-to-date results.

Thank you, Claudio. Some more detail on Saipem deal. The developed transaction is structured as follows. The sale of 12.5% of Saipem to the Italian strategic fund implies a value of around €400 million. The sale is coupled with the shareholder agreement with FSI, representing 25% of total shareholdings, with initial duration of three years. The parties have agreed on three main aspects. First, representing a single list for Board Members at the Annual General Meeting. Second, standstill and lock-up restrictions on the shares adjusted in the shareholder agreement and third, having a prior consultation on major strategic Board issues, as allowed for by law. We have also agreed to participate per quarter to the subscription of Saipem capital increase for a value that we estimate as slightly more than 1 billion. And finally, we agreed the full repayment of Saipem their company net debt of €6.1 billion. As a result of the new governance, Saipem at the completion will be equity accounted for by Eni and be consolidated from our balance sheet. The pro forma net debt reduction for Eni at the end of September, including all above assumptions, is estimated at €5.1 billion. And now let’s move to the third quarter and year-to-date results. E&P production in third quarter was 1.703 million BOE per day, an 8% increase compared to last year. This growth is thanks to the step up and ramp ups in Venezuela when the giant Perla field started in up in July, Angola, United States and UK. The price decrease is of course just the effect and the contribution of new field discoveries in Libya. In the first nine months of the year, production grew by 9% and considering this strong performance, the upgrade of our full year production grew guidance to 9%. In exploration,…

[Operator Instructions] First question comes from Mr. Oswald Clint from Sanford Bernstein. Mr. Clint please.

Yes, thank you, maybe a question on the production growth, the 5% initial guidance becoming 9% today. And obviously that contingency that was in there. Could you just talk about what that means for your 3.5% CAGR growth over your five-year plan? Obviously if everything keeps going as well as it has this year, it kind of points to that number being potentially quite stronger. Maybe some comments around that please. And then secondly, obviously we're seeing plenty of evidence I guess of the accelerated startups, but could you talk about the other side, which was the early monetization of the exploration assets, which you've discovered. We haven't seen as much evidence there yet. Could you talk about that please? Thank you.

I will talk about production moving forward and Massimo will talk about M&A in exploration. First of all, I think that it's quite, we are in every stage talk about the future and growth about the future is here that this year we add this additional venture in the Eni field, in the field production and also from exploration in our field. So I think that is the most important contribution like in Egypt and Libya or in Congo or also in Angola. So I think that is a positive factor. As we look forward in the future, I think this is quite it's too early to talk about the guidance. It's clear that in production we are doing better, so our hope is really to be able in 2016 to do better than the 3.5% we announced.

As far as the early monetization of exploration, what I can say that some well advanced discussions on this respect are ongoing. So it's something we are fully committed to and our hope is to announce something in the short-term. But having said that, let me take the opportunity, thanks to your question, to give you an overview about the full disposal plan that we announced in March. So you remember that we announced €8 billion in four years, out of which €3 billion expected in 2015. Out of this €3 billion now we already achieved €1.5 billion, including the remaining disposal of gas share that will happen very soon. So on this regard, we are halfway. But you remember that launching the 8 billion plan we said that Saipem was a contingent plan on top of this. Now what we have done, we made Saipem. So Saipem will allow us early 2016 to cash back something in the range of 5.5 billion. So adding up this 5.5 billion to the 1.5 billion already achieved, we already got 7 billion out of 8 billion. On top of this, as I said at the very beginning, we are in advanced negotiation on the early monetization of its Persian asset.

Next question comes from Mr. Thomas Adolff from Credit Suisse. Mr. Adolff please.

Two questions, please. One on the balance sheet. Now congrats on progress on Saipem. Let's say on a three-year view, you also reduced further your equity stake in Saipem. And you're successful in monetizing the resource space, the discovered resource space and obviously you've over discovered. Which also then reduces your exposure to Sub Saharan Africa. How should I think about the gearing range after you've succeeded in all of those potential monetizations? And how should I then think about if the balance sheet become inefficient and we need to do something about it? And how would you think about capital allocation then? The second question I guess is going back to Egypt and to the Zohr discovery. You’ve met with Mr. Netanyahu and I wondered what sort of discussions you’re having around the East Med gas development? And whether there are actually any maritime boundary issues around Zohr? Thank you.

I’m going to start talking about the East Med Gag and Massimo will answer about the balance sheet and capital allocation. For Egypt, our discussion mainly concerns the synergies that we have on the capital possibility to put together the huge amount of resources that we have found in the area. I’m talking about the three countries, so Egypt, Israel and also Cypress. You know that we are in Cypress and Egypt. And clearly that the opportunity to have a huge amount of resources and then in the facility and structure and experts at facilities in Egypt can accelerate and improve the time to market all the regions. And the other point is that we think that we have additional resources first of all. And I think that putting together these discoveries we will be also stronger from the commercial point of view in terms of finding market, in terms of increase the value of the resources. So that was mainly the subject of the discussion. And I think that all the three countries are looking at this possibility to use Egyptian additional facilities in a very positive way.

To give you a full answer on the new balance sheet structuring, I guess we should wait for the new business plan that is going to be elaborated and will be announced in February, March. But as far as I can today, I would say that our target remain exactly the one that we announced in March, presenting our last strategy plan. As in anticipation, I would say that the cash coming from Saipem should be first of all to make our balance sheet stronger. Second, definitely to support the development of the additional resources that in the meantime has been discovered. But we need to elaborate the full plan in order to reassess the rank of our projects. Having very well in mind that we don’t want to exceed the amount of CapEx that we projected year-by-year in the last strategy plan.

Next question comes from Mr. Jon Rigby from UBS. Mr. Rigby please.

Thank you. It’s clearly striking, the progress you’ve made in the chemicals business. And looking at the plan that you set out just after the year, it was also evident that there was an expectation that there will be significant progress. And it looked a bit backend loaded, and it was a lot to do with really quite a significant transformation of the business. So the change, certainly the sequential change, 2Q to 3Q in that performance is not obviously explained by the change in the macro conditions, although they’ve been helpful. But I just wondered whether you were able to talk a little more about what’s going on underneath the surface in the chemicals business that has generated this significant improvement? And then I guess lastly, just as a comment. I think there were some wire stories a couple of weeks ago talking about the potential for a spin-out of that business and I just wondered, A: is there anything in that and is it related to this very significant improvement in performance that you’re seeing? Thanks.

Yes, you are right. We put a lot of effort in our chemical business. And we transformed also the process also in terms of the quality of the process, the efficiency and the products. So we worked more in the specialties and we brought our specialty in terms of a percentage of more than 65% of our production. And that included. And it’s also true that we pass too often in the past in some good scenario situation, but we always lost money, so that is the first time that after this transformation that did not see anything. We were able to take advantage of the investment that remained. That is a good period to talk about the future because we knew the additional investment. And as you know, we want to focus our investment proudly in the upstream. For that reason we are, as we did in the past, we look for partners, financial partner that can help us and use the value of the investment in the future. But what happened and what -- so the rumors in the press we don’t like to make any comment on these rumors, but it’s clear that there is a process where we are looking for opportunity, including those investments. And clearly if we are able to find some good investors that can -- they knew our position and enter in a joint venture with us, we will do that. So Roberto, do you want to add anything?

I would say Claudio you covered most of the aspect. Jon, I would only remind you in April 2013 we did a seminar on the chemical business. You were among the attendees, so many other people. And I would say that everything that was presented there has been achieved almost with an year in advance. And as Claudio said, partially it is due to…

Two years in that [indiscernible]….

Nearly two years. I would say that the scenario certainly has, but we weren’t able to capture this scenario through that and as long as internationally positioning the portfolio transformation and the restructuring was due to this business for many years to come. So that’s all I would like to add here.

It’s very just common, because we talk about Saipem, we talk about can we improve some other obviously that are not into our core business. So I think that Eni is a strong opportunity because normally what we are in that Company are doing are reducing CapEx or cutting CapEx. But what we are doing as well, but I think that the opportunity that Eni has is that can get value, strong value from all these businesses so that we are, that are Eni that we think that extracting them, pulling out, I think that we can add an additional research of potentiality to add value and also to be resilient at the lower price. So that is a big opportunity for us. We are falling, we are focusing on that and I think that in the next future, I think that we can express additional energy from these transformational actions that we are doing.

Next question comes from Mr. Irene Himona from SG. Ms. HImona, please.

My first question is on gas and power. If you can perhaps remind us, and apologies if you’ve addressed the issue, if you can remind us of how much you expect to receive in cash this year. How much is then outstanding? And in terms of the P&L, can you quantify what the heat was in Q3 from the negative margin on that? And my second very quick question, and thank you for updating us on disposals, just if you can remind us of where we are with the remaining stakes in Snam and Galp please. Thank you.

For what relates to the result of the third quarter, as Massimo said before, this has been related mainly to two main factors. And the first factor was the recovery of the take or pay. So the prepaid gas that determined an increase of supply costs due to the fact that this gas was higher priced prepaid. This is on one side significant delta in terms of cash flow, but also significant result in terms of stabilizing our midstream business. Because basically, we have completed the recovery of the take or pay on the most important of our Russian contracts and this is an activity that was carried out during the last two years and this has significantly reduced our exposure in the rest of the business. Yes, the rest is was the fact that we still have some contracts on sales side that are indexed to oil, for which of course, compared to last year quarter, we have been impacted by the change in the Brent price and with the delay typically it is impacting on our contract. There is also a number of other manufacturers that when put altogether add some insights. These are related to scenario regulatory factors, in general all impacting the power business. For example, we had a different the last year changes in the style for gas transportation, and now are heating, the final user, is our power business. We had to absorb increased costs for green certificate of previous years. So all of this made the reason of this substantial change we have previously heard. What we are expecting now from our ongoing negotiation and arbitration, of course, is not something that we can disclose today also because commercial is pretty sensible. I think that we are talking about price review of contracts for the previous years with some of our main contracts, so for which we have quite high expectation of positive results.

Okay, Irene, as far as Galp and Snam, today we own less than 5% in Galp and you may remember that 4% is linked to the exchangeable that is expiring this November. And our intention is to sell off the remaining stake, say as soon as possible. And as far as Snam, again we are talking an 8% stake in Snam, linked to the exchangeable that expires in January 2016. And the shares are very well in the money.

Next question comes from Mr. Martijn Rats of Morgan Stanley. Mr. Rats please.

I wanted to ask you two things. First of all, with regards to the Zohr discovery. I was wondering what the impact of that would be on the trajectory for capital expenditure? Because on the one hand, it's an attractive discovery. After the Saipem transactions there is additional cash available. I can see how this opportunity could provide upwards pressure on the trajectory for CapEx. At the same time, there seems to be a below average cost discovery. So I can also see how you would invest in this opportunity at the expense of some other projects. And as the average cost of future capital projects goes down, I can also see how this would actually reduce the trajectory of CapEx, basically through the process of high grading. So I was wondering how you see this project impacting CapEx going forward. And secondly, as we're sort of on the topic of guidance, I was wondering if there are any sort of piece of guidance that you've previously given that might change as a result of the Saipem transaction?

I think that you explained very well what is happening. So really the question you gave the answer because it is absolutely what is happening. We have a strong flexibility because we found the resources and research that are very, very local, still over (inaudible), because following our strategy we ran exploration in a place where we have big synergies and where we have a lot of operations. So we have flexibility. And what you said is right. We can move very easily. CapEx from more accomplished and more costly project to a cheaper or a lower cost project. That is what we have done. Our target is, as Massimo said before, because we have to cope with a 50 or 55 scenario, is really to stay in our guidance in terms of our CapEx or really if it is possible to improve in any case the new mix project and the new mix of CapEx that is made by faster and better time to market in either term. So at obviously considering the same amount of CapEx, I think that time that I have determined and the time to market will be much better. I think also the cash on operations will be better.

And on guidances that might change after the Saipem transaction? I guess there's not much, but I just wanted to cover it anyway.

I think that the first question is around, also the second question because our target is to remain in this range. What we sell last year, the 12 billion per year, that was our threshold. And as Massimo already said, that we want to add a very strong balance sheet we want to have a very low debt because we want to be resilient this time and point with the low scenario. And work on our efficiency and on our Company to be ready when the price will be better to have a really strong leap.

Next question comes from Mr. Massimo Bonisoli from Equita. Mr. Bonisoli please.

Congratulations for the Saipem deal. Two questions. Once the deal the capital increase of Saipem would be completed, could you give us some color on the 18% stake in Saipem, which is not part of the shareholder agreement with FSI? Would we consider the same way of Snam or Galp stake and would you consider some monetization options such as the exchangeable bonds on those shares? Second question on financial cost per site in the consolidation. What would be the financial cost savings on the 5.1 lower net debt?

I answer to the first question and Massimo will answer to the second. Talking about the 18% that is remaining after this transaction, we are not thinking about that yet. It's clear that is a stronger upside potential, but it will be stronger in the future because of the better scenario and also because of the execution of the Saipem plan that we presented yesterday. So I think that we have in our hands some potential, additional potential. As you know we have 18% and the 12.5% in the shareholder agreements for three years. So I think that is project is a good operation. But at the moment, we don't move because we are still -- because the scenario is dead and also because Saipem starts executing the new plan. So we are pleased ourselves. We are very happy about that. We think that there is a strong upside potential. And in the future what we can do with this money.

And Massimo, as far as our financial costs after the Saipem reconsideration, I would say too early to make it for assessment, because we are collaborating the new plan and decide exactly how to use this money. If we want to replace a bond, then how would we like to utilize this bond. So it’s something that we can reflect on when the new business plan would be elaborated.

Your next question comes from Mr. Hamish Clegg from Bank of America. Mr. Clegg please.

Delighted about your deleveraging event this week. I just had two questions. First is on the Saipem uncoupling. I wanted to ask Mr. Mondazzi if he could give us any light on where we could see any interest costs going next year, tax rates and potentially new CapEx. Maybe this is should take you to store up, but it will help us model in the short-term? And the second question was just on Kazakhstan. We all saw the Kazak government trying to fine you this week over Karachaganak. Could you give us a little bit of an update on relations there? And while we’re talking Kazakhstan, I assume things are still going ahead nicely at Kashagan as well.

Sorry, Hamish. Just to check if I correctly understood, are you asking some clarification about the tax rate? Is this right?

Yes, and in a post Saipem world, what’s your interest costs, your tax rate and your CapEx?

I would say again this kind of guidance as far as the 2016 onwards, I’d say it’s a bit early to assess, including the financial aspects. Because what we need is to elaborate the full plan in order to see just the overall composition or better before utilization of the additional cash we will receive from Saipem. So be back on this question I would say in February 2016.

I totally understand. I was going to say, could you maybe elaborate a little bit on whether you would potentially look to restructure your balance sheet as you have quite a high cost of interest? Or at least cost of net interest implied.

So again, what we have to decide, depending on the market situation, where we’ll have this money in our pocket is to see which are the best opportunity. If we would like to buy back some bonds outstanding or whatever. So it’s early to say.

Antonio Vella will answer about Kazakhstan, and I can certainly talk about an update on Kashagan.

Let’s talk about Karachaganak. The ongoing discussion with the Republic of Kazakhstan and the venture and partners are still normal discussions within our production sharing contract. There are some negotiations ongoing in terms of the audit cost recovery, which is a normal activity within our accounting and adjustment on the activities. The relationships are okay and if some discussion is coming out on the audit and cost recovery, it will be resolved as usually mixable with our partners as we have done on the past experience. Concerning Kashagan, the installation work is progressing quite well. And we are confirming that the installation work will be completed by mid-2016 and production restart in the fourth quarter of 2016.

Next question comes from Mr. Henry Tarr from Goldman Sachs. Mr. Tarr please.

Thanks for taking my questions. My first question was just on LNG. How is progress been in attracting buyers to the first phase of the project? Has there been any change to the timeline of development there? And then just secondly, you’ve revised upwards the OpEx savings that you expect to see this year. Is this being driven by internal cost savings or more by falling third-party costs? Thanks.

Talking about the Area 4 offshore Mozambique, Eni, together with its partner, is in the final stage of negotiations for entering into a binding phase and purchase agreement with BP as the buyer of the production coming from the Corral field. This negotiation is based on key terms that were previously agreed, and there is key terms between the sales of prepaid of the total energy volume produced by the floating LNG unit that we will install on the Corral field. This negotiation, as I said, is expected to be completed soon and this will be in line with the schedule for the Corral field FID. Roberto Casula will answer about OpEx production. Roberto Casula will answer that OpEx reduction.

Well, we are continuing our effort to maximize the efficiency in our operations. At the moment, we do see a unit operating cost of $7.30 per barrel. Actually this is a combination of operated and un-operated activities. Our operated activities are even much lower in the range of $6.60 per barrel and this is due to many efforts; firstly, from the contractual point of view with the renegotiation of all the maintenance contract, logistic contract, chemicals. And also from the asset point of view, we need a lot of effort to reduce the downtime of our installations.

Next question comes from Mr. Theepan Jothilingam from Nomura International. Mr. Jothilingam, please.

Just two questions, just coming back to E&P, I just wanted to understand what you’re seeing in terms of your underlying decline trends in the base. And also if you can just recap what your sort of projected spend is to underpin that decline. The second question just comes back to the progress you will make delveraging your balance sheet. I just wanted to know whether you would consider restarting a buyback program post the completion of the Saipem transaction. Thank you.

Antonio will answer to the first question about fighting the decline.

As you know, our strategy is keeping 5% our decline. So we are fighting all these numbers through our continual reservoir modeling and petroleum engineering. Basically since the objective was also to reduce costs OpEx, we directed most of our activity in rigless instead of large and heavy work-over, and this is still responding on 5%.

Theepan, any decision about potential modification on our shareholder return policy will be taken, I would say in February presenting the new strategic plan.

And could you just remind me how much it costs to maintain that 5% decline rate on the base?

We have a part of that cost under production optimization, which are CapEx. As you know, normally we are moving in our budget between €2.9 billion to €3 billion. And this number is going to be reduced since the strategy went through a rigless activity in stage of heavy work over in drilling and side trucks.

May I go ahead with the next question sir?

Yes, thank you.

Next question comes from Mr. Biraj Borkhataria from RBC. Mr. Borkhataria, please.

Just a quick follow up on Mozambique. Could you give any color around what level of cost deflation you’re seeing in while you go through the EPC tender process?

Roberto will answer this question.

Well, at the moment, we are running several tenders, in particular the ones for the Corral development, which consist, as you certainly know, of floating LNG and the subsea wells. Well, I can tell you that we are really very close to select the lowest bid there and we have reached very good results in terms of unit cost per million TPA. In combination with also very good results and signs, means the signs of course, deflation, for all the subsea production systems. So we are very confident that we will have very soon a robust cost estimate for our development. At the same time, about the onshore development, the tender is ongoing. And so the commercial result will come in the near future.

Thank you, Roberto. Okay, next.

Next question comes from Mr. Aneek Haq from Exane. Mr. Haq, please.

Just a question for your downstream profitability and cash flows. If my numbers are correct, I think almost 40% of your free cash flow this year is coming from downstream. If we start to see a weaker, let's say refining and chemicals environment next year, what starts to happen when you think about your planning for 2016 to that $55 breakeven, which obviously you've done very well to get down to this year.

As far as the refining, Aneek, maybe you remember that we are working hardly to significantly reduce our breakeven cost, the breakeven margin in refining. Today we are in the range of $5.50 per barrel, so definitely the cash contribution we had in 2015 benefiting from [inaudible] scenario as being the one that you have seen in the first nine months of this year. But what you are going to do is to prepare ourselves to cope with, I would say, harder times ahead of us and we believe that definitely the highest margin we have seen or done. And what we are doing is to try to reduce even more the $5.50 versus the, you remember, the $3.00 per barrel that has been our target we announced when we launched the four-year plan. And I would say that as well as we are well ahead on this plan in 2015, we still remain absolutely confident that we can get there.

Can you maybe give me a sense of what we should think about as a more normalized level of cash flow next year then from downstream?

Maybe I can give you some maybe more specific idea. So if we see the downstream cash flow regarding the nine months of 2015, I would say that more or less I'm mentioning and referring to the 1.7 billion we got in the nine months of 2015. I would say that more or less 60% of the increase is related to the scenario. But 40% is related to the, I would say, efficiency, the utilization rate, the full production of the heavy oil treatment plant in San Marzano. So a significant part of this increase is not simply related to the scenario.

Next question comes from Neill Morton from Investec. Mr. Morton, please.

I have two questions please. Firstly in the downstream. You've been making losses in refining and chemicals for so long, I do wonder whether you'd built up significant tax loss carry forward. So basically, as we go forward, what sort of tax rate should we model in refining marketing chemicals as a unit? And then secondly, a macro question on Libya. You probably know more about the country than most, so I just wondered what you think its prospects are to perhaps increase oil production over the next, say 12 to 18 months. And also what Eni's plans would be if the security situation normalizes?

As far as the tax rate, due to the fact that the majority of the refining and chemical business are in Italy, the tax rate to project the net income for the future would be the Italian tax rate because we accrued the first tax asset using debt as tax rate. By definition, this is the economic effect, because as far as the cash effect, we will not pay any tax because of the previous losses.

Libya, so what we are experiencing there is that oil, gas and condensates, especially for regard the situation, so far is good. And we think that the gas that now is going about 60% for the domestic market is particular at the maximum rate. And our forecast is that it's going to continue at this rate. So and that results a positive signal because when they increased, Libya increased, the gas utilization disposal. So that is positive because it means better working and the situation is not too bad in all different cities. So for gas we are optimistic. For oil, the projection is not so optimistic because we need different facilities we need more maintenance, we need fair purchase then we need also the extra facility working operationally at the best. So the projection that remain in our calculation is in a steady state right now that Eni has not charged the maximum adjusted new percentages full potential.

Just as a quick follow-up. Could I perhaps ask perhaps the quantum of those historical tax losses in Italy in the downstream? Are we talking hundreds of millions?

I don’t have the figure with me. I’ll let you know.

Next question come from Ms. Lydia Rainforth from Barclays. Ms. Rainforth please.

And thank you for taking the question, I will keep it short. Just while we’re on tax rates, can you talk about what the outlook is for the upstream tax rate, because clearly there have been a number of moving parts over the quarters. And then actually, just secondly, just a quick one on the upstream cost savings number. Apologies if I didn’t quite get this properly. When you’re looking at both the operated cost reductions and the non-operated cost reductions, are they the sort of similar sort of scale of reductions that you’re seeing? Thank you.

I’ll give you the first about the E&P tax rate. So the E&P tax rate, as far as the quarter, is 110, but as the overall tax rate, please do not refer to the quarter tax rate as a reference point to project the full year tax rate. A very quick explanation about the E&P tax rate. The E&P tax rate is significantly affected by the full expenditure of the exploration costs at this level. Because if you remember, we -- from an accounting point of view, we expensed 100% depreciation costs while I would say the other use the successful formatted. It means that we are fully imparting the taxable income without any deferred tax effect because when we drill the well, we don’t know exactly the outcome of the exploration activity. So we don’t know if at the end of the story we’ll get the FID or not. So no, the first tax asset. Just to give you the sense of this effect, if we apply these successful format to the quarter number, 180% become 80%. Having said that, we have another significant effect because of the significant and quick drop in the oil prices happened in the third quarter. The significant and quick drop in prices above $60 in July, below $50 afterwards in this quarter, what is causing? It’s causing, I would say, definitely a full effect in revenues, but a delay effect in our production agreement. The effect which in terms of rebalancing in cost profit oil is delayed later on. So when you have this quick effect, you must wait some months in order to have the full rebalancing. That’s the reason why to make the long story short, we expect for the full year a guidance that will be very much in line with the guidance we gave in July. If you remember, we said 70%. I’m referring to the full group. 70% having in mind a Brent price average above $60 at the time. Now targeting $55, I would say $80 has a tax rate average for the 80% -- 80% for the full year. And looking forward, as the mechanical adjustment per se and the better results in non-upstream assets in Italy, this 80% definitely should drop.

The second question Roberto will answer.

About this farther efficiency in the capital expenditure. So first of all you know that in 2015 the majority of our CapEx were related to already committed project, the majority of which were operated. On this project we were able to achieve significant cost savings, thanks to the renegotiation of the contract or retendering of the contract. And thanks also to some reconfiguration of the project. So the majority of the cost saving is related to the operated projects.

Next question comes from Mr. Giuseppe Rebuzzini from Fidentiis Equities. Mr. Rebuzzini, please.

Thanks for taking the question. Coming back to the disposal of the share of Saipem item to FSI and the shareholders pact, I wonder whether the joint control over Saipem, which is embedded into this structure, might involve a change of control formally under the Italian law, which might in turn trigger the need for a tender offer over Saipem shares? Could you please comment on this please?

Definitely we don’t think so because what we are following is the same part we follow when we disposed of Snam. But by the way, you have seen probably that the final answer from [Consub] is one of the condition precedent to complete the deal.

Next question comes from Mr. Dario Michi from Banca Akros. Mr. Michi, please.

The first one is on Saipem, as well. Have you taken any specific commitment to it with FSI on Saipem’s dividend policy? The second one is on [Stella], when do you expect the final outcome of the arbitration? And the third one is a very brief update on the maintenance that’s expected for 2016. I am referring to Wafa and then Kashagan [indiscernible], a few minutes ago. But just to understand correctly, Saipem yesterday stated that the delivery of the project is expected for the end of ’16, while you said that the production is expected for the last quarter of 2015. So I am a bit confused. Could you please help me understand when do you expect the production from Kashagan?

Yes, so Massimo?

So definitely no agreement with Versailles about the dividend policy of Saipem.

And [Stella] will be, we believe within the first quarter of next year.

So Kashagan, don’t be confused. We said that, Antonio said that, we’ve finalized a solution at the end of the first half and then production will start in the fourth quarter so that it’s confirmed.

The last question comes from Mr. Rob West from Redburn. Mr. West, please.

I just wanted to go back and follow-up on Martijn and Thomas’ questions from earlier. You implied that with Zohr the discovery, you’re going to try and keep your CapEx around €12 billion a year. And so Zohr does compete with something else in the portfolio for capital. My question is, are there any other candidates beyond Mozambique for what it can realistically compete with? Is it just totally brash and jumping to a conclusion to think that about the logical thing available, other options beyond probably selling down your stake there with another party? And then secondly, Italy is an area that doesn’t get much discussion in your upstream portfolio on these calls. I imagine this year it’s probably one of the more free cash generative in all the different regions you split and report annually. Is there any change in the way you’re running that core upstream Italian business this year versus a typical year, and particularly to maximize the free cash generation from it and maybe spend a little less and work the assets a bit harder?

For Zohr and Corral and Italy, first of all, the $12 billion is not something that we are going to spend in a couple of years. It’s something that we are going to spend in longer period, because that concerned the full development and also the second phase of development. So it’s a long-term, so it’s not what we are going to spend to put in production upfront that will be much less than that. And on Mozambique, surely we don’t find this flexibility on Corral because Corral is good. We find a buyer for the [indiscernible]. We finish the tender procedure and process them so we will be ready to get to Corral by the end of the year, beginning 2016, while Corral will be functioning December this year. We have other projects. We have other big projects where we already discussed and we said that we are going to shift improvement out the CapEx. And we talked about Iraq, we talked about Indonesia and we are talking about Venezuela, which was really capital intensive, especially in the second phase. So we add [indiscernible] in our value to find flexibility and go for smaller and faster and cheaper projects. So it’s not a big issue. I really didn’t understand very well your question in Italy because in Italy what we are doing so we’re not changing anything. It’s nothing. Nothing is changing. Unfortunately, we are continuing working intensively and we feel like the project in the [indiscernible] the fifth trend and we are looking at the positive impact. And we are working on, as Antonio said before, on well cost position or production optimization for the project in the Arctic Sea. That is at the moment. We have other projects in Cicely that can give a good improvement in the Italian production and that is in the deal we signed last year with the region when we finalized the [inaudible] transformation to a green refinery. And with the package it is also the development of a gas field in Italy and that is another project that we are going to develop. So in Italy we try to find [inaudible] and we try to improve the new project mainly in gas and some remaining gas offshore. And some projects in [inaudible] for increased production onshore. And that is our program that is confirmed.

No more questions, gentlemen.

Thank you very much.

Ladies and gentlemen, the conference is over. Thank you for calling Eni.