Good afternoon, ladies and gentlemen, and welcome to Eni's 2019 First Quarter Results Conference Call hosted by Massimo Mondesi, Chief Financial Officer. For the duration of the call, you will be in listen only mode. However, at the end of the call, you will have the opportunity to ask I will now hand you over to your host to begin today's conference. Thank you.
Good afternoon, and welcome to any Q1 2019 presentation. In the Q1, Upstream and Gas and Power sectors delivered positive results, while Downstream confirmed its resilience in a tough scenario. In Upstream, the EBIT performance was robust at €2,300,000,000 plus 25% year on year net on Norway impact, thanks to the higher value on new production. Production was 1,832,000 boe per day, 1.3% lower than last year when Intesa production in Libya was still on stream. In exploration, we confirmed our positive track record with 174,000,000 of BOE of new discoveries, mainly related to the Agogo oil field in Block 1506 in Angola, Merakes East in Indonesia and Nur in Egypt.
In addition, we are continuing to reload our exploration opportunities with more than 23,000 square kilometers of net acreage added in the quarter. In mid downstream, we recorded around €320,000,000 of EBIT, thanks to a strong performance in Gas and Power with EBIT of more than €370,000,000 due to the performance improvement in both midstream and retail. Refining and Marketing results were close to breakeven as marketing subsidized the refining segment, which was affected by tight differentials between heavy and tight crudes that made it convenient for us to concentrate maintenance in our plants this quarter. Chemicals recorded negative EBIT due to the Priolo offset that altered the plan for most of the quarter. Cash flow before working capital applying the new IFRS 16 was €3,400,000,000 or excluding IFRS 16, €3,200,000,000 at the same level of last year, covering 1.7x the €1,900,000,000 CapEx.
CapEx guidance is confirmed at €8,000,000,000 this year. Leverage was around And now a closer look to upstream. On production, we reported a lower volume versus last year. The production was affected by the termination of the Intisar contract in Libya at the end of the Q2 2018. Excluding that event, production performance was robust, delivering 200,000 BOE per day of ramp ups, mainly Zohr, which counterbalanced almost completely in TESAR and the natural depletion.
In terms of result, upstream EBIT, excluding Borr Energi contribution, now equity accounted, was €2,300,000,000 a 25% increase on a like for like basis versus last year, boosted by the increasing quality of our production mix for around EUR 220,000,000 lower cost and exploration activity for EUR 150,000,000 and the marginal impact from IFRS 16 principle of around EUR 50,000,000. Euros Talking about our production mix, few words on the gas component. Notwithstanding the lower prices in European and Asian apps, we have been able to increase our realization price by 25% from $4,500,000 to $5,600,000 per 1,000,000 of Btu, a level that we are expecting to maintain also in the coming quarters. And now let's go deeper into the progress of 2019 production. The next quarter production will be around 1 Q1, mainly due to the planned maintenance activity in Kazakhstan, Norway and U.
K. While in the second half, we anticipate a strong production growth as a result of the following additional contributions: more than 40,000 bp per day from the startups of Berkin in Algeria, Era 1 in Mexico, Baltim Southwest in Egypt and Trestak in Norway. And around BRL 80,000 per day, mainly related to ramp up around BRL 45,000,000 and higher contribution from Kazakhstan, Norway, Iraq, Nigeria and U. S. Our yearly guidance of around 1,880,000 barrel is confirmed.
To conclude the upstream section, let me update you on the discounted net cash flow of proved reserves, a metric that confirms the quality of our upstream portfolio. In unitary terms, with $9.2 per barrel of discounted net cash flow, we confirm our top ranking. This is due to the low level of unitary production and development cost, top of the rank at $17.6 per BOE, thanks to the quality of our conventional asset mainly inherited from exploration successes and to the outstanding unit selling price of $44.9 per barrel at the top end of the range, notwithstanding 1 of the highest exposure to gas in term of P1 reserves, with around 70% of our gas sold to domestic markets. And now let's move to mid and downstream. Gas and Power EBIT was strong in excess of €370,000,000 This result was driven by Gas Power Business with EUR 226,000,000 of contribution, thanks to the improved result both in trading activity, but mainly in the gas business, where we were able to extract value from the flexibility of our portfolio of gas contracts in a scenario of positive spreads between European hubs.
These positive performances more than offset the lower contribution of the power business and the LNG, which result was extraordinary in the Q1 of 2018. Gas and Power Retail delivered a result of €146,000,000 a 3.5% increase versus last year or 10% excluding the effect of mild weather of this quarter. This quarter result typically the highest quarter of the year, strengthened our full year Gas and Power guidance of around €500,000,000 Refining and Marketing was at breakeven. Due to the recent appreciation in heavy and high sulfur crudes driven by geopolitical issues and OPEC cuts, we decided to concentrate maintenance of Sanazzaro and Livorno refineries this quarter. Consequently, refining results were negatively affected by a lower utilization rate, minus 11 percentage point year on year.
The restart of the EST plan and the completion of the maintenance activity will now allow us to capture the full benefit of the IMO expected in the 2nd part of this year. The startup of Gela Bio plant in the coming months will further announce the result of our refining activities. The robust performance in marketing almost compensated the refining temporary weakness. Finally, Versalis was impacted by the fire in Priolo plant that halted production for more than 2 months and has now restarted. This had an EBIT impact of around €70,000,000 in the quarter.
CapEx are in line with the guidance. In the Q1, we spent €1,900,000,000 which 85% devoted to the Upstream, mainly for the R and M and Versalis spent 11%, mostly for the R and M and Versalis spent 11%, mostly for the completion of the green refinery in Gela and the restart of HEST plant in San Nazzaro. As in the past, we remain fully committed to maintain our disciplined approach to investment. Cash flow from operation before working capital and before the implementation of IFRS 16 was €3,200,000,000 in line with the last year results. The working capital cash absorption of €1,300,000,000 or €1,000,000,000 net of the settlement of a U.
S. Arbitration is mainly due to seasonal drawn from Gas and Power and is expected to be largely reabsorbed by the end of this year. During the quarter, we generated a free cash flow before working capital changes of €1,300,000,000 well in excess of the pro rata quarterly need of our dividend. Cash flow from operation and free cash flow are in line with our yearly expectations. EBIT adjusted at €2,400,000,000 confirmed the same performances of last year, notwithstanding the deconsolidation of Norway and the net negative impact of around €190,000,000 of unrealized profit in stock, mainly related to oil not yet sold to the final market at the end of this quarter, partially offset by the benefit of the IFRS 16.
Net of these impacts, we recorded a growth of EBIT by 17%. The net income of around €1,000,000,000 was marginally impacted by the IFRS 16 application, more or less €30,000,000 Leverage until IFRS was 16%. Thank you very much. And now together with my colleagues, I'm ready to answer any question you may have.
The first question is from Clint Oswald with Bernstein. Please go ahead.
Massimo, thank you very much. Good afternoon. A couple of questions. The first on the gas realization, you mentioned that there at $5.6 I think I have to go back pre-twenty 14 to see your gas prices at that magnitude. You mentioned it's sustainable for the next couple of quarters, but I just wanted to look a little bit longer term into 2020, 2021, especially as you ramp up more gas fields in Algeria and Egypt and Indonesia.
Is that level of gas price sustainable over a multiyear period is my first question? And the second question, more short term on the gas and power results here this quarter. You said it's not LNG, it's not power, it's more trading. So I wonder if you could just explain exactly what you mean by extracting value here by kind of trading around the European continent. Could you give us a bit more clarity around what that trading strategy is, please?
And if it's obviously sustainable, please?
Okay, Clint. I'll give you the answer to your first question, and then I'll leave Christian answering your second one. So in terms of gas prices, the answer is yes. We believe that this level of gas prices are sustainable for some reason. First of all, the hub at which we are exposed the most is the PSVU, the Italian hub.
And the average gas prices that I mentioned has been got in an environment that is the Q1 2019 environment with a price of €222, so even less than what we projected, still we project for the entire year that is in the range of €260. So this is a confirmation that this level can be really achieved. As far as the production that is elsewhere, so not exposed to the PSV, for example, the Egyptian or the Indonesian. The Egyptian, yes. So maybe you may recall that we do not disclose entirely the gas formula as far as Zor.
But you know that it's been said that the formula is not completely linked to the oil. So first of all, it's a formula that is some way linked to oil. And second, so it means that today, with such an oil environment, maybe the price could be even a bit higher. But the price has not an entire flexibility to the oil price. So the price has been in Q1 exactly the same that has been in the quarter in Q4 2018, so more or less stable.
Indonesia is more or less related to the Far East LNG ups. So it will depend on the price that today is are a little bit depressed, but are part of the overall number that I gave you. And we expect that could be could recover in the near future. So the answer is yes. We believe that can be sustained.
And if we see correctly a slight increase in the PSV price all along the 9 months before year end, you could see even a slight increase on that number. And then I leave the floor to Christian for the second answer.
Yes. Good afternoon. So on the Q1 result of Gas and Power 2019, we have to acknowledge that the market environment was fairly different from last year Q1 because last year Q1, there was a bullish tightening market, especially in the LNG, which allowed us to monetize our flexibilities of LNG portfolio, whereby this year, I mean, the LNG has been pretty weak on the Q1. But to the other extent, the volatility of the scenario, especially the price scenario, has been fairly strong. And so we were able to take advantage of the optionality which are embedded in our European gas portfolio in order to take advantage of that volatility, in order to capture all the optionality, which were part of the asset base.
Going forward, clearly, I mean, difficult to project a volatility evolution. Surely, we see a price environment which is fairly weak. So we think that most of the value has been accrued already in this Q1, and so we don't see now reasons to change our guidance.
The next question is from Irene Himona from Societe Generale. Please go ahead.
Thank you. Good afternoon, Massimo. I had two questions on Refining and Marketing. So firstly, in the recent strategy presentation, you guided to 2019 EBIT of EUR 700,000,000 including Abu Dhabi. Is it possible to give us some guidance excluding ADCO now that Q1 results are in?
And secondly, again, excluding ADNOC, what is the targeted 2019 refining breakeven margin, please? And finally, in Q1, what was the marketing EBIT?
So Irene, good afternoon. So your first question, the R and M expected EBIT of EUR 700,000,000 excluding ADNOC as far as 2019, the contribution of ADNOC is really minor. So I would say just very few tens of €1,000,000 could be in the range of 6.50 other questions.
The EBITDA of Refining and Marketing, excluding ADNOC, is more or less twothree about the marketing and onethree about the refining. Our forecast is €430,000,000 for the marketing and €200,000,000 for the refining. $20 for the refining. With a breakeven margin, that should be around $3.5 per barrel at the end of the period with all the plant in operations.
Yes, Irina. So the breakeven was $3 you remember, at the end of 20 19. Now we are saying $3.5 Taking into consideration also that the Bayernoil refinery that we partially own will be not in production all along 2019. So that's the partial reason to increase our breakeven from $3 to $3.5 As far as the medium term, our expectation remain the one that we mentioned. So a bit lower than $3 including ADNOC, when ADNOC would be fully, let's say, consolidated in our numbers.
And the number that will be in the range of 1.5%, 1.7% around 20 22, 2023 when the upgrade in the existing asset in ADNOC will be completed.
The next question is from Alessandro Pozzi with Mediobanca. Please go ahead.
Good afternoon. I have two questions. The first one is on the U. S. Settlement.
And I was wondering if potentially we see a positive impact filtering through the income statements going forward. And also on the cash flow, I believe there is a quite large dividend received from Equity Investments. I was wondering if you can perhaps give us a bit more color and how we should expect a dividend from Equity Investments going forward throughout the year? And finally, perhaps you can give us an update on what you see net debt at year end, let's say, pre IFRS 16?
So as far as the U. S. Settlement, we mentioned sometimes before that U. S. Settlement is related to some liquefaction capacity, a long term contract that we had in the Gulf of Mexico that has been for a long time under negotiation.
We ended up with an arbitration. The arbitration is causing now the payment of more or less €300,000,000 We accrued more than that in our balance sheet, and the number has been released in our net income at the end of last year. So no more effect, and the settlement now is definitive. In term of cash flow, dividend, obviously, this year, the most important contributor is Var Energi, while in the future, ADNOC will take a significant part to this. And the third question was about net debt.
So you mentioned, Alessandro, net debt before the IFRS 15?
Yes. Yes, in year end, just for
Okay. More or less in line with what we projected presenting our strategy presentation. So more or less, 1, EUR0.21, EUR0.21, EUR0.21, including definitely the payment of more than EUR3 1,000,000,000 to acquire 30% stake in Adrock Refinery.
Okay. And going back to the dividend received there, is it going to be lumpy over the next few quarters or
The dividend from Var Energi this year will be divided in 2 quarters, 1st quarter and the second quarter. As far as ADNOC, there will be an interim based on the semester result. And then the 2nd tranche, I would say, as the balance sheet, as the financial statement will be approved, so around March, April. Every year, obviously.
The next question is from Peter Low with Redburn. Please go ahead.
Hi, thanks for taking my questions. The first one was you reiterated 2019 production guidance at $62 a barrel. Can you give us any indication of the potential PSA impact on that should prices remain around current levels? And the second was just a follow-up on R and M. And sorry if I missed this answer earlier.
It's on that target for €700,000,000 of EBIT this year. Given the Q1 result and the current margin environment, do you still think you can reach that level? Or should we now assume that, that comes in below that level? Thanks.
Okay. So as far as the sensitivity to the oil price, the amount is very small. So half so 500 of barrel each dollar. So quite limited. So 500 each dollar.
And as far as the expected result from Refining and Marketing, I would say, yes. Based on our forecast, we confirm the EUR 700,000,000 as an EBIT for 2019. Assuming a CERM, so our scenario margin of 5%. So we still expect a recovery of this margin in the remaining 9 months, as in the Q1, the margin has been 3.4 Any other question? Hello?
Sorry, this is the operator. May I take the next question?
Yes, we are ready. So please go ahead.
Okay. The next question is from Harry Tarr with Berenberg. Please go ahead.
Hi there. Thanks for taking my questions. Just a couple. 1 on the production outlook just near term for Q2. Obviously, we've got the Kashagan outage and I think maintenance at Goliad as well.
And then if you could also just give a quick update on current activity in Libya and Venezuela, that would be great.
Okay. So I'll leave the floor to Alessandro to answer your question about the maintenance in 2nd quarter and then Antonio to elaborate a little bit on Venezuela and Libya.
Okay. In Q2, we have some major turnaround that are involving Kazakhstan with the Kashagan field, Goliath in Norway and also Ecofisk in Norway, J Block in Liverpool Bay in the U. K. And Baldur in the U. K.
So those are the major turnaround of 2nd Q.
And we expect a production reduction more or less of 60,000 bps per day.
Okay. Concerning the actual situation in Libya, until now, our operation are stable. We are making all the normal activity to keep our rates, and we are keeping 180,000 barrel equity until the mid of this year when we have some maintenance on the second half. And we are keeping year rate 275,000 barrels per day. Situation is under control as of today.
So the activities remaining and crude change are in normal operation. Concerning Venezuela, it's a situation in countries. It's unstable. Our production in parallel is moving between 300,000,000 to 500,000,000 scaf a day. It's not stable upon the request of the local market.
Nothing to mention on the efficiency of the plant. Everything is moving quite well. Thank
you. Okay. That's great. So just to confirm, the expected impact of maintenance in 2Q as you see it today is about 60,000 barrels a day?
Yes, correct.
The next question is from Biraj Borkhataria with Royal Bank of Canada. Please go ahead.
Just one on the upstream. It looks like your production guidance is quite heavily weighted towards the second half of the year. Could you just talk about how much contingency you have in that 2.5% growth guidance? And also just to follow on, on Henry's question, what is the base case assumption for Libya and Venezuela embedded into your guidance for this year? And then the second question in the Downstream, you mentioned that you brought forward some maintenance in the Q1.
Could you talk about whether there's any significant maintenance in R and M or Chemicals for the rest of 2019? Thank you.
Okay. Alessandro, to answer your first question and then Pino and Daniele about Chemical, the second one.
Okay. In terms of contingency equity? And the other question was for Pino, I believe.
About maintenance in refinery and chemical.
Because of the low CERM, low margin in the Q1, we decided to anticipate Sannazzaro and Livorno maintenance in the Q1. So for the rest of the year, we only have a maintenance of SCC in Milazzo
refinery. On the chemicals side, we have a maintenance shutdown planned for the site of Priolo in the 2nd part of the year, which we are repositioning at the moment and trying to rephase as much as we can to recover some of the issue we had at the beginning of the Q1.
That's great. Just a follow-up on the Upstream question. Could you tell me what your embedded assumption is for Libya and Venezuela in the 2019 guidance?
In our 1,080,000,000, more or less, the expected production from Venezuela is in the range of 50,000 BOE per day. So a bit less than plateau, 5,000 less than plateau and more or less in line with the production we got in 2018. While in from Libya, the expected production on average is 270,000, more or less, 270,000 barrels per day, yes. So a bit less than the production we got in the Q1.
The next question is from Michele Della Vigna with Goldman Sachs. Please go ahead.
Massimo, thank you for the presentation. I have two quick questions, if I may. The first one is whether you target to close the farm out in Mexico Area 1 this DD and A for this year, including IFRS 16? Thank you.
Okay. So in term of disposal, yes, we believe we can cash in the dilution in Mexico. And we expect something in the range of €300,000,000 all in all, including some other minor disposals. And the second question for the DD and A. On DD and A, we expect a level in the range of $11 per barrel in 2019.
That more or less is in line with the previous year, and we do not expect a significant effect caused by the implementation of the new accounting principle.
The next question is from Bertrand Hodee with Kepler Cheuvreux. Please go ahead.
Yes. Hello, everyone. Thank you for taking my question. 2, if I may. The first one coming back on the dividends from Var Energies.
You cashed in some $600,000,000 in Q1. Massimo, you hinted that you will receive another payment in Q2. Can you quantify it? Will it be around the same amount? And then the second question, it's related to European gas price and LNG.
You made a scenario in 2019 with $8 plus NBP U. K. Gas prices. We are way below that. Can you give us a $1 per Mcf change in European gas price?
Or if I can reformulate the other way around, when you are giving sensitivity to your cash flow for Brent move, you assume that Brent and natural gas price are moving in the same direction, which is clearly not the case since the beginning of the year and which could be sustained, especially the LNG market continue to be in oversupply as it is today. So thank you for your answers, Massimo.
Okay. So in terms of dividend that we are going to receive from Var Energi in the second quarter, yes, the amount would be in line with what we got in the Q1. And talking about the gas price, you know that our exposure to the NBP is very limited. So our gas production in U. K.
Is very limited, and we don't have other production related to the NBP. So as I said before, the most important hub of reference for us is PSVU that some way is linked to the ETF. And I would say it was what I just said. So the level of gas prices we got in the Q1 are the ones that are related to EUR 220 per 1,000 standard cubic meter in term of PSV and more or less EUR 20, EUR 23 euros less in term of TTF. More or less, we have something in the range of €15,000,000,000 17 €1,000,000,000 standard cubic meter of gas, equity gas exposed to the European apps.
So more or less, any €10 per 1,000 standard cubic meter will represent something in the range of €150,000,000 of revenues before taxes and whatever. See, something that definitely cannot jeopardize our production sorry, our cash flow looking forward.
The next question is from Christopher Copeland with Bank of America. Please go ahead.
Thank you very much for taking my questions. I've got one left, I think. And it's going back to the same old topic of Var Energi. You mentioned the dividend payment, very helpful to know Q1 and Q2 dividends coming through. What can you say about dividend payments beyond 2019?
It looks to me that the total €1,700,000,000 payment from Var Energi is a bit of a special. But anything you can say in terms of how the progress has been since demerging the company and how its financial performance is making you feel about the dividend potential coming back to ENI in the next few years? Thank you.
So you're right. The dividend we're going to receive all in all in 2019 is something special. I don't have numbers to share with you as far as the future dividends. It will depend on the scenario, whatever. The logic, the rationale we agreed together with the together with our partners is to distribute all the spare cash after the development cost.
That's in the next 2, 3 years, will be anyway remarkable as the Baldr project, the annual Casper project will enter into the development phase. The idea anyway is to distribute all these spare cash after the coverage of CapEx and definitely the dividend sorry, the CapEx. Hello?
Hello? I
think I got the answer. Thank you very much.
Okay.
The next question is from Thomas Adolff with Credit Suisse. Please go ahead.
Good afternoon. Few questions from me. Just going back to the contingency buffer in upstream, you've mentioned 37 kilobytes D. And I wondered as far as 1Q is concerned, are we in the plus or are we in the minus? Are we running better than expected or actually running slightly worse than expected and the reasons around that?
Secondly, the refinery margin in the Q1 was $3.4 per barrel. Perhaps you can share with us what the March April level was for the sum. And then finally, just on Norway, going back to Norway, when I look at net income from investments in the Q4 and compare that to the Q1 2019 when VAR was included, I wondered how much VAR contributed below the line for 1Q. Thank you.
Okay. So in terms of production contingency, Alessandro? In
terms of Q1 results, we in terms of contingency, we are a bit less than what we were expecting, but to say around 8,000 barrels per day.
So in term of refining margin, the current level is close to 4. And in term of VAR contribution, below the line in the Q1 has been in the range of €35,000,000 of euros. The
next question is from Massimo Bonisoli with Equita. Please go ahead.
Good afternoon. Three questions left, very quick. The first on production, if you have any reference on production exit rate for 2019 just for modeling purposes? The second on Versalis, will you have additional cost from the fire in Priolo over the rest of the year? And the third, any changes on the tax rate guidance following Q1, very low tax rate in Upstream and the consolidation of Vara Energy?
Okay. So in terms of tax rate, definitely, the 54 point something tax rate we got in the Q1 has been positively affected by the Norway deconsolidation. Norway is 78% tax rate. We believe that assuming the level of Brent that we are assuming for the full year 2019, so 62%. The tax rate we expect this year will be in the range of 57%, 58%, so more or less in line with the guidance that we gave a $60 Brent, more or less 60% in term of tax rate.
In term of production, Alessandro?
Okay. In terms of exit rate, we do expect a 4 quarter in an average of 1885 barrels per day.
And in terms of cost, as far as the Priolo fire, I said that the cost in the Q1 has been €70,000,000 on the full year as we have the business interruption insurance coverage for that plan, we expect something less as a net cost, something less than €70,000,000 So it could be in the range of €50,000,000
The next question is from John Rigby with UBS. Please go ahead.
Thank you. Hi, Massimo. Can we just a few things. 1, I just want to return to that, the answer you gave on tax. So just to understand what drives the increase from 1Q across the rest of the year in terms of the tax rate you're recording, particularly, I guess, in the Upstream.
The second question is on the Downstream. Can you just are you able to give some kind of indication of the contribution that the Est units provides to the downstream when it's running, let's say, at your assumed sum, so we get some idea about what the delta is once that starts up again? And then the last question is on LNG. Can you in terms of the contribution in the Gas and Power business, can you sort of characterize what's driving that and how you're splitting the contribution between the upstream and the midstream? The reason I ask is very clearly spot LNG prices were very low in the Q1.
So they may continue to be low for the rest of this year, but contract LNG prices are likely to rise again. So just with the lag to the oil price. So I'm just interested to understand the dynamic and how the interaction works between the upstream and the midstream. Thank you.
So as far as the tax rate, John, the difference between this 54.4% 50 7% that we expect all along this year is, I would say, rounding.
So there
is no there is a different maybe contribution in different upstream countries that could modify a little bit the average, but we are talking about a number that will be in that range. The contribution is coming from so many many countries, and the composition of portfolio in terms of production could change a little bit. So that's the reason why we could have very few percentage point of difference between the quarter and the full year. And I leave the floor to Giuseppe Ricci to talk about EST and then LNG, Christian.
The contribution at regime of EST is in the range of €120,000,000 euros per year in term of EBITDA under the situation the condition of budget. And there could be increase or decrease depending to the spread diesel isulfur fuel oil.
The next question is from Martin Ratz with Morgan Stanley.
Sorry, sorry. We are still answering the previous questions.
Okay.
Okay. So please, Christian, go ahead.
So if I understood well, you want to understand better the revenue profile between Upstream and Midstream as far as LNG is concerned. So on the Upstream side, basically, the revenue profile is indexed to oil, okay? So the Upstream part is indexed to oil, whereby the midstream bit is taking responsibility to manage the swing between oil and the market. But on that part, you have to understand that a big part, a big chunk of our sales strategy is actually hedged visavis the buying, let's say, exposure. So there is just a limited amount of LNG, let's say, portfolio, which is exposed to the spot prices.
I hope this answers your question.
I lost that answer. Maybe it's better I follow-up later.
Any additional questions?
The next question is from Martin Ratz with Morgan Stanley. Please go ahead.
Hi, hello. I had 2. First of all, I wanted to ask about balance sheet gearing. Given the new order of magnitude that this is in post IFRS, once the ADNOC acquisition is complete, where do you see this number going? And from there, is there a specific sort of de gearing target?
Is there a sort of an objective where ultimately you'd like balance sharing balance sheet gearing to be post the IFRS adjustment? And secondly, I wanted to ask about LNG. I was wondering if ENI is interested in participating in some of the Qatari LNG expansion projects? And if so, how you would trade those off against opportunities that you also have in Mozambique?
So Martin, in terms of gearing, we don't have a precise gearing guidance. We have a leverage guidance. So no target on this respect. In term of number, including the ADNOC acquisition, that could be, I would say, what we expect considering everything, so our scenario and so on. And the new IFRS, we expect a gearing that will be in the range of 24%.
Okay. Thank you.
Okay. And In
terms of Qatar?
In terms of Qatar, I'll leave the floor to Antonio.
So we are confirming our interest in the tender for Qatar LNG expansion project, but we are waiting that Qatar is coming out with a formal bidding round. No other information at the moment.
The last question is from Lucas Hermann with Deutsche Bank. Please go ahead.
Gentlemen, good afternoon. You're very fortunate my questions have all been answered. Thank you very much.
Any additional question?
Mr. Mondati, that was the final question. I will turn the conference back to you, sir, for any additional comments.
Okay. Just to say thank you very much for attending this call. I'll see you soon. Bye bye.