For detailed instructions. Good afternoon, ladies and gentlemen, and welcome to Eni 2015 first quarter results conference call, hosted 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 the opportunity to ask questions. I am now handing you over to your host to begin today's conference. Thank you.
Thank you very much. Good afternoon, and welcome to our first quarter results presentation. In this quarter, we continued to perform in line with our strategy, progressing in all our businesses and delivering positive results in each of them. In particular, in E&P, we achieved as planned, five main startups. This, together with the contribution of ramp-ups and increased Libyan production, contributed to a volume growth of more than 7%, or 3.7% net of PSA and portfolio effects. Development activities are progressing well. In particular, Perla is on track to start up in June, and Goliat at the end of July, following the arrival of the FPSO in Norway a few weeks ago. Exploration success is continuing with near-field discoveries in Egypt, Libya, and the upgrade of our Merakes gas discovery in Indonesia.
In midstream, all segments were profitable, achieving in total more than EUR 400 million of EBIT, thanks in Gas & Power to the improved competitiveness of our gas contracts and more favorable weather conditions. In R&M and Chemicals, to better margins and the result of our continuing turnaround. As a consequence, the company generated an operating cash flow of EUR 2.3 billion. This, combined with CapEx in line with the guidance and the positive exchange rate effect, allow us to keep our leverage unchanged at 22%, notwithstanding the steep fall in oil and gas prices. Q1 adjusted operating profits amounted to EUR 1.57 billion, around EUR 1.9 billion lower than last year. This drop was driven by the negative scenario, which accounted for EUR 2.5 billion, partially compensated by our stronger industrial performance that improved by EUR 600 million. All our businesses recorded positive adjusted operating profits, reflecting the implementation of our turnaround program.
The adjusted net profit amounted to EUR 648 million, benefiting from EUR 185 million gain from the fair value interest in [Galp-Snam], that in first quarter 2014 accounted for EUR 65 million. Turning to E&P. Hydrocarbon production was 1,697,000 barrels per day, 7.2% higher compared to the first quarter of 2014. Excluding both EPSA and portfolio effects, production increased by 3.7% thanks to the new field startup, to mention the most important, Hadrian South and Lucius in U.S., Nené Marine in Congo, West Franklin in U.K., and Eldfisk Phase 2 in Norway, and the production ramp-ups, mainly in Angola, Congo, Egypt, and United States. Production levels also benefited from better performance in Libya, which included the volumes of the deal on the Intisar stored gas destined to the local market.
Operating profit was affected by the decline in oil and gas prices, which accounted for EUR 3.2 billion versus the first quarter 2014, partially counterbalanced by higher production volumes, lower exploration and operating costs, as well as a favorable exchange rate. Gas & Power. Gas & Power adjusted operating profit amounted to EUR 294 million. This result has been achieved leveraging on gas contract renegotiations, including two achieved this quarter, and a positive retail performance driven by higher sales in certain European countries, mainly in France, and more favorable weather conditions compared to last year. This result represented 21% increase versus the first quarter 2014 that, as you might remember, benefited from the strong retroactive contribution of the contract with Statoil. In terms of adjusted operating profit split, one-third came from midstream, which in this quarter was at breakeven, also without the retroactive benefit of the two renegotiations recently finalized.
The remaining two-thirds came from the retail business that generated a profit double the level of the first quarter of 2014. Turning to R&M and Chemicals, now combined into one business segment, which mirrors the new organization in place since mid-2014. This business showed a marked improvement year-over-year with an adjusted operating profit of EUR 121 million, leveraging on both scenario and industrial improvements. In particular, the refining results benefited from a strong margin increase versus first quarter 2014, along with continuing operating enhancements. Capacity utilization rate was 79%, up 11 percentage points versus last year as a consequence of our reduced capacity and the positive scenario. We confirm that the breakeven margin is now in the range of $5 per barrel, and we are on track to lower it to $3 per barrel by 2018.
The Chemicals operating performance of EUR 29 million improved by EUR 111 million versus last year, reflecting higher margins due to temporary market shortage of certain commodities as well as an efficiency gain. The debt evolution. Leverage remained flat at 22%, despite the drop in oil and gas prices. The EUR 2.3 billion operating cash flow, together with EUR 0.5 billion cash-in from disposals, funded almost the totality of the EUR 3 billion capital expenditure incurred in the quarter. The net debt increased by around EUR 1.5 billion from December 2014, also as a result of the negative impact of exchange rate differences of about EUR 0.5 billion, as well as other cash outflows, including the payment of investments accrued in the previous quarter. We confirm our leverage guidance for year-end within our 30% ceiling. Now, together with some colleagues, I'm ready to answer any question you may have.
Ladies and gentlemen, the Q&A session is now open. I'd like to remind you that if you want to register for your questions, please press star followed by one. To cancel the reservation, press star followed by two. Thank you. First question comes from Mr. Oswald Clint from Bernstein. Mr. Oswald Clint, please.
Yes. Thank you very much. Good afternoon, Massimo. Thank you. Question on the disposals. They're quite light in the first quarter so far. Obviously, you have a target for the four-year plan and this year, I guess. Could you talk about where you are in terms of asset disposals and when we might expect some of those for 2015? Secondly, a question on Gas & Power. Just curious if you're seeing or if you expect to see any greater demand for your pipeline gas as the lower oil price filters through those long-term oil link contracts versus spot prices or some of the LNG imports. That's my two questions. Thank you.
Okay. Thank you very much. As far as disposals, first of all, I would like to highlight that we already achieved around EUR 500 million of disposal, mainly in Nigeria. That definitely, as I already outlined during previous discussion and previous conversation, we have to cash in from now to the end of the year, the value of the Galp share that would be in the range of, looking at the current capitalization of the company, EUR 850 million. More or less, what we could say today, that we are more or less half of the way to the final result that we fixed by 2015, that you may remember would be in the range of EUR 2.6 billion. As far the remaining part of the plan, you might recall that there are a number of transactions ongoing. Some of them are, I would say, quite well advanced.
What I could add today that we remain confident that the final target we announced one month ago is still achievable. As far as the pipeline, maybe I leave the ground to Marco for the answer.
Thank you, Oswald. We do see some recovery in demand. In Italy, the first quarter demand was around 24 billion, compared with 21 billion cubic meters the previous Q1 of 2014. A lot of that has to do with weather, but we are seeing on the power side also some growth. Bringing that to the full year, we expect demand to recover in Italy to around 67, 68 billion cubic meters, up from what was 62 billion cubic meters in 2014. At the European level, that should bring demand for 2015 around 450 billion cubic meters, again, with some recovery. I'd say part of that is weather. Part of that is on the power sector, gas in some hours being competitive, especially in the U.K., against coal. On the LNG front, weak demand in Asia.
We expect some cargoes to come over to Europe, but not to change the overall demand picture significantly.
That's great. Thank you very much, both.
Next question come from Mr. Deepan Joglekar from Nomura. Mr. Joglekar, please.
Yeah. Afternoon, gentlemen. Three questions, please. Firstly, I was wondering if you could break down the increase or the year-on-year change, the EUR 600 million you talk about between costs of improved uptime and renegotiations on the gas contracts. Secondly, you talked about the cash flow being around EUR 2.3 billion for the quarter. I was just wondering, do you feel in this type of oil price environment, you'll still be able to cover your CapEx commitments for this year on an underlying basis? My third question was just on Mozambique and the FID of FLNG. Could you give us an update if that's still proposed or planned for the middle of 2015? Thank you.
Thank you very much. About the EUR 600 million of industrial improvement that we accounted for in the first quarter, you asked for a breakdown. What I could say, around one third is coming from E&P. It is made mainly by a reduction in OpEx and a reduction in exploration cost. As far as OpEx, I am pleased to say that we confirmed in the first quarter, and we keep on confirming along with the full year, our target to reduce the OpEx. Today, we are in the range of EUR 7.4. If you remember, we started at the end of 2014 with an OpEx per barrel in the range of EUR 8. We are confirming the target we gave during the strategy presentation. As far as exploration, we are in line with what we disclosed as a target in terms of expenditure.
You might remember that this year we are mainly focused on near field exploration. That is the reason why we are, I would say, spending a little bit less. What has been achieved up to now in terms of new resources discovered is anyway a very significant number, because we are talking about 180, around 180 million of barrel of oil equivalent. Maybe Luca, that is here with me, could give you some more detail. What I could say that notwithstanding the reduction in capital expenditure expected by this year, we really think that what we are drilling, or we intend to drill all along this year, give us a very good expectation. We are very well confident that the target of 500 million BOE on new resources all along this year will be definitely achieved, if not overtaken.
The remaining part, the two thirds, certainly EUR 100 million are coming from the retail that, as I said, performed a double result versus last year, also thanks to the, I would say, more favorable weather conditions. Around EUR 150 million are coming from the refinery because, I would say on top of the margin that you know has been much higher than the margin we record in the first quarter of 2014, we are now collecting the gain after the turnaround exercise we put in place starting from 2014. The other minor, I would say, better result, including the chemical one that recorded more than EUR 100 million, out of which just a few coming from a better scenario, the remaining part related to the higher demand, again, as a result of the efficiency program we put in place starting from 2014.
That is the broad view that excludes the renegotiation effect of the long-term gas contract that we are taking apart, but anyway, are giving a significant advantage this quarter versus the first quarters of 2014 that I remembered benefited from a strong contribution linked to the Statoil contract renegotiation. As far as the cash flow and commenting the EUR 2.3, the broad comment is the following one. The first quarter of the year definitely is not the best one in terms of cash generation because of, I would say, some seasonality, mainly in retail gas business, because this is the peak quarter for retail. Definitely, just the fact that the cash-in is at least two months after the delivery of gas, definitely what is being billed is not being cashed yet. This is causing something in range of EUR 1 billion of increase in working capital.
Definitely what we are doing is suffering a little bit about increase that has been announced by Saipem yesterday. It is something that more or less is seasonal, betting on what they declare, the expectation is a reduction in the net financial position of Saipem. As the recovery of the EUR 1 billion retail, we expect to recover also the working capital increase announced by Saipem. This EUR 2.3 million has been some way, I would say, limited by the increase in the stocks in the refinery. The refinery definitely is benefiting of a very high margin, but at the same time, due to the fact that the plants are running much faster than in the previous periods, it means that in order to feed in the plan, we increase the amount of stock that has been bought just to supply the facilities.
It has been something that some way created a sort of limitation. Having said that, in performing a very, I would say, broad and general exercise, thinking about what we said during the strategy presentation, that the target for the first two years, 2015 and 2016, would be to match the CapEx. By the way, this exercise has been performed with a Brent average price of $63. The average between $55, as far as 2015, and $70 as far as 2016. This EUR 2.3 million has been achieved at $54. We have a sensitivity for every dollar of around 150.
If you, broadly speaking, multiply by four the EUR 2.3 million, add on, I would say EUR 1.5 billion in term of differential in Brent price, you add on some contribution from working capital that is still expecting the remaining nine months of this year, you will see that the EUR 12 billion of CapEx that remain our guide as far as 2015 will be matched and will be, I would say, practically matched one year in advance because on top of the Brent recovery, definitely the expectation we made was based also on a recovery on the industrial side. I mean, an additional production from E&P and the end of the turnaround plan in the non-upstream businesses. Just to conclude, I would say that this result of EUR 2.3 million represents something more than what we expected when we launched the four-year plan.
As far as the Mozambique, maybe I leave the ground to Roberto that is here with me.
Thank you, Massimo. About Mozambique, specifically Coral, all activities are progressing as planned. As you probably remember, we submitted at the end of 2014, the final development plan for Coral. We continue the engagement with the authorities. It is a very fruitful and proactive engagement, we do expect the approval of the final development plan by third quarter 2015. At the same time, the major tender activities are ongoing. In particular, the one for the floating LNG is expected to be completed in terms of receiving technical commercial offers in the next couple of months. Let's say that by the end of June, we will have the full picture of the project. At that point, we will finalize everything, and we will be ready for the final investment decision. Also, an important part is the sale of gas. Maybe Marco can say some words about that.
We're discussing on the commercial terms with a number of parties. Discussions are progressing well, and we're perfectly in line with the project timetable to confirm FID later in the year.
Thank you, gentlemen.
Next question comes from Ms. Lydia Rainforth from Barclays. Ms. Lydia Rainforth, please.
Thanks. I have two questions if I could. Good afternoon, everyone. First one, just going back to the EUR 600 million of recovered margin. Is that where you expected to be at this stage in the year, or are you actually seeing the better progress than you might have anticipated? The second one was really more on the accounting side, the merging of the Chemicals and the Refining and Marketing businesses together within the results. I think it was May last year when Claudio announced the new structure. Should we actually think about the change in terms of the results purely being an accounting one, or are the two divisions actually working together differently on an operational basis to what they were a year ago? Thanks.
Okay. As far as, again, the EUR 600 million, more or less, we are where we imagine to be, just I would say, one and a half months after our strategy presentation, Lydia. What we saw through the first quarter numbers, that exactly all the action we put in place in all different businesses in order to get the final target we declare. The breakeven in Refining and Marketing in 2015, the structural breakeven in Gas and Power in 2016, and in the same year, the structural breakeven in Petrochemical are going ahead, in line or, I would say, a bit ahead of schedule in this respect. Definitely, the scenario somewhat is helping us to reinforce these results. That's the reason why we experienced positive results this quarter in all business, including Refining and including Chemicals.
Definitely, I would say, the new organization is not something just related to the accounting. Chemicals and Refining are working, I would say, closer together thanks to the new organization, starting from, I would say, the supply, that now is even more integrated in this respect. We are after eight months, still, I would say, upgrading some processes. I would say we are happy, and we definitely confirm the goodness of the decision we took.
Okay, thank you very much.
Next question comes from Mr. Mark Bloomfield from Deutsche Bank. Mr. Bloomfield, please.
Good afternoon. Thanks for the opportunity. First of all, on production, just wondered if you could remind us of the volume produced from Intisar gas storage this quarter, and how long you expect that volume to be sustained for. Is that going to be continued into 2016? Then secondly, turning to Gas & Power, just wondered if you could give us a sense of the working capital benefit you may have enjoyed this quarter from any release of gas take or prepayments. Thanks.
Okay. I leave the ground to Antonio to answer the production question.
Okay. The Intisar production is going to contribute for the next four years. Within all the volume equity allocated to Eni on the last, let's say, 25 years from the Alpha 100 field, the Wafa field in Libya and the storage in Intisar. The contribution is going to be between 60,000-65,000 barrels per day.
On Gas & Power. Hi Mark, it's Marco. I would say on the retail front, the Q1 usually absorbs working capital as we sell more gas than other quarters. We also draw gas from storage, so the retail effect is quite neutral. We have about EUR 150 million of take or pay recovery in the quarter, which is an improvement, obviously, of working capital.
Thanks.
Next question comes from Mr. Hamish Clegg from Bank of America Merrill Lynch. Mr. Clegg, please.
Thank you. Good afternoon, gents. There are a few questions I had. Just first of all, in refining, you mentioned that there was some sort of competitive pressure, and retail demand was slightly lower as well. Can you tell us if there's any hedging at all in your refining business because it was somewhat lower than Q4? Second question is, I was wondering if you could maybe update us on Libya and how you're managing to deliver such brilliant volumes out of the country that so many people are struggling in. My third question was, could you maybe tell us a little bit about your approach to execution and what gives you the confidence? Is it to do with your engineering capacity that you've recently acquired in the last 12 months and how you're taking a greater control over individual projects?
A 3.5% growth target is ambitious in your four-year plan, and I wondered if you could just help us understand what gives you the conviction in that target.
I'll give you the answer about the refinery. You noted the difference between the contribution of fourth quarter of refining and marketing versus the first quarter this year. Definitely, part of the difference is related to the marketing part of the business because the first quarter naturally is the lowest all along the year. Part of the difference is related to this. As far as the refinery, yes, the result has been, I would say, limited by a negative effect from hedging because at the very beginning this year, when we saw significant higher margin than expected, but drastically declining towards the year-end, we decided to hedge part of the refinery capacity. This result is, I would say, is discounting something in the I'm just checking the number, something in the range of EUR 40 million of penalization because of this.
Okay.
Libya?
Libya, as you know, we are producing on the range of 300,000 barrels per day. Our operating company is Mellitah Oil & Gas. It's accounting 5,000 Libyan employee, and most of our production as of today is coming from Sabratha, Bouri oil, El Feel and Wafa. Gas production is the majority in condensate because we are delivering a large amount on local market. We are moving between 10 million to 13 million standard cubic meter per day on power plant. Those guys on the oil company, which is protecting their requirements for the local power production. At the same time, we are continue our exporting from the same location of Mellitah.
About our approach on project, as you know, we started some time ago about having more grip on all the different phases of a project, starting from engineering with our engineering companies, responsible for basic design and front-end engineering design. This allowed us also to develop some more standardization and modularization of systems more than equipment. Another important tool is represented by the contractual framework agreement with major suppliers. Overall, this give us the confidence that we are able to control time and cost of the significant project activities, as you mentioned earlier, in our four-year plan. I have to tell you that, for instance, this year things are going really very well because out of the 170,000 barrels of oil per day we are expecting from startup and new ramp-up, already in the first quarter, we secure 116,000 barrels a day.
The remaining part will come with Goliat and Perla, for which, as Massimo said, we are definitely on track. You should remember also that 50% of the 650,000 barrels of oil per day we are expecting in 2019 are relevant to start up the ramp-up of 2014, 2015 project. With the new FID, with five FID, we are expecting this year, we will be able to secure 100% this objective.
Thank you very much.
Next question comes from Mr. Martijn Rats from Morgan Stanley. Mr. Rats, please.
Hi, good afternoon. Two things from my side. First of all, I wanted to ask, quite a few companies have reported quite strong oil trading results in their downstream businesses. I was wondering if Eni also enjoyed a similarly strong oil trading result. Secondly, I wanted to ask about Egypt, because a couple of weeks ago, you announced this sizable investment program, and you reiterate that in the statement this morning. It's quite a sizable amount of spending at a rather interesting point in the cycle. I wanted to ask what you're seeing in the Egyptian investment that is making you like this so much at this point in time. Thank you.
On the oil trading, Marco, hi. I would say that we do less of the contango capture and of the pure speculative or proprietary activity on the oil side. We have some interesting profits coming from our gas trading, which is integrated together with our oil trading using our flexibilities. That's asset-backed trading. You would see less of that compared to others who enjoy more third party and proprietary trading activity.
Okay, Antonio, give you an answer about Egypt.
On Egypt, after we have signed the heads of agreement in Sharm, the negotiation took place immediately with the oil ministry. We are planning to close within the first quarter all the items within the heads of agreement.
You remember, Martjin, the main objective, I would say, were three. The revision of some clause of the main contract there. The revision of the gas price, that definitely is an issue because the gas price that is very much subsidized in Egypt was limiting significantly the development of new gas resources. At the end of the story, we see this country, as I would say, a very special case, importing some LNG. Third, definitely part of the agreement is the, I would say, the timeline to recover our outstanding.
All of these are very positive because they give us the opportunity to exploit the resources or reserves that we know very well because they are located in a reservoir from which we are producing since, I would say, in Belayim in 1956. All these gas discoveries we are talking about have been discovered by us, definitely it will, in a protected environment, thinking about the outstanding recovery, will allow us to exploit a significant amount of new resources. The significant part of them are already included in the CapEx plan that has been announced during the strategy. Just a few of them will be added, but at the same time, we will have an addition in terms of production and in terms of resources.
Okay, thank you.
Next question comes from Mr. Biraj Borkhataria from Royal Bank of Canada. Mr. Borkhataria, please.
Hi. Thanks for taking my questions. Two, if I may. Firstly, for Marco on Gas & Power. It remains one of the more volatile divisions for you on a quarterly basis, and I appreciate that you only gave your updated plan a few months ago, but it does seem to be running ahead of that plan. I was wondering if you could provide some color on whether you see some upside relative to your expectations at the end of 2014. Then just a quick update on Kashagan , if you don't mind. What are the latest steps there? Are you still confident in the late 2016 startup? Thanks.
Biraj, there is a slight improvement. We were giving a guidance of break even, assuming we close all pending arbitrations, the main one being the one with Gazprom. I think we're ready to upgrade that to seeing marginally positive results, in case we close that. Not to extrapolate the Q1 improvement and multiply that. I think we're slightly more optimistic, but the volatility is still there, and Q1 is still one of our stronger quarters.
Antonio?
On Kashagan , we have already received the first batch of material aside, and probably next month we will start welding. As of today, we are still believing on the schedule to start up on the second quarter of 2016.
Thanks very much.
Second half of 2016.
Second half.
Next question comes from Mr. Thomas Adolff from Credit Suisse. Mr. Adolff, please.
Hi, good afternoon. Three questions, please. The first one is on the slide seven. The EUR 700 million negative impact from others, you obviously said it's payment related for investments accrued in the past. I wondered where your balances stand today. I'm assuming there's no fund is going forward. I also wondered whether you can give a bit more color on the EUR 5 million FX difference, what exactly that is. Second question on the refining restructuring plan that you announced over a year ago. You've converted Gela. It's gone a little bit quiet on the other plants. I wondered whether that's still moving ahead as planned or whether you're just taking your time given the margin environment is somewhat more favorable. The third point is on Mozambique. I think you've been saying for some time that you've got encouraging discussions on securing offtakes.
I guess industry expectations, pretty much is we're in a wait and see mode. No one really expects to be able to secure any firm SPAs, given the tug of war you have on pricing mechanisms. I wondered whether you can give a bit more color on what discussions you're having. That aside, on Mozambique, I also wanted to know whether your intention was still to farm out another stake, given that's also been going on for some time. Thank you.
Okay, Thomas. Thank you very much. As far as the EUR 0.7 are there, in slide number seven, I said that the majority of this refers to payment of investment accrued in previous quarter. The amount is something in the range of EUR 0.4, EUR 0.5 out of the EUR 0.7 overall. We think that this amount will be overall recovered in terms of overall cash flow all along this year. Regarding the refinery, definitely we are pleased to see this very favorable environment, we believe that it will last some time, it will be back to the structural expectation at the end of this year, beginning of 2016. We are still, I would say, stick to the plan we announced. Mainly to reduce over an additional 20% our capacity. In this respect, we are, I would say, in schedule.
That target will be achieved from now to the next two years.
On Mozambique, it's Marco. Let me try to add some color. I would say first point is, compared to our internal timetable and the project timetable, everything is on track. We haven't had any missing of commitments or timings, also in the commercial discussions.
A lot of interest because of the nature of the project, the size of the project, the geography of the project, and as Roberto said, the rather simple nature of the project. A number of buyers see limited execution risk when it comes to the future stages of the project compared to other projects. On the pricing front, certainly there has been a shift. A lot of the people who had moved in Asia to aggressive Henry Hub pricing and are now reconsidering the oil pricing, have halted some Henry Hub-based discussions, this is only positive for a project like ours, which is oil-linked. Regarding the longer-term oil outlooks, I think the curves haven't moved that much, we're talking about the same levels with the buyers. Hope that's helpful.
I think on the farm-out and also the FX difference. Sorry, I have quite a few questions.
Farm-out
Well, farm-out, I would say, I've just commented about disposals and I've nothing to add about that. Because of definitely the, let's say, the confidentiality of this. As far as the foreign exchange, this is related to the, I would say, the pure exchange rate of conversion from dollar to euro. Nothing special.
Okay. Thank you very much.
Next question comes from Mr. Jon Rigby from UBS. Mr. Rigby, please.
Just a couple of points I wanted to raise. The first is on the resegmentation. Two things. One, on the earnings transfer, which looks principally to be from refining and marketing chemicals to Gas & Power, is that related to the oil trading activities? You reference it, but I don't think it's not clear to me, anyway, where the actual movement is. Is that a representation, really, of the level of earnings or EBIT being generated by those activities? Secondly, on that point, can you just confirm that the EBIT targets, cash flow targets, et cetera, by segment remain the same, are not affected by the resegmentation? I'm guessing not, but just to confirm.
Going back to the disposal program, I know in the discussions we had in March, there's a big chunk of the disposal program is exploration, which, on the face of it, is quite an attractive thing to be monetizing because there's no earnings and cash flow that sit with it. It's clearly hugely accretive transaction if you can do it. Taking on board the fact you didn't want to talk about Mozambique, but can you just maybe give some color on progress towards that, and should we expect those transactions to be towards the latter end of your plan period to coincide with the rise in the oil price? Or did you stick to your view and from your discussions in the market that it's a fairly oil price insensitive transaction? Thanks.
Thank you very much, Jon. About the resegmentation, I would say, the main rationale is the following one. Nothing to do, I would say, with the trading that definitely will help, and that is something that has been done. The real rationale refers to the industrial location. The majority of the planning we have in refinery and chemical are located in Italy, and the majority of them are living exactly the same issue. The rationale has been to put under the same responsibility the management of the issue that is absolutely common between the two businesses. Definitely, this is a management approach, is a matter of responsibility. Nothing to do with the redefinition or, I would say, change in the guidance that definitely remain exactly the same.
As far as disposals, definitely, I'm afraid there is a confidentiality issue, but I would say that some discussion, quite ahead discussion we are having these days, also refers to exploration asset. Yes, you cannot say that you have closed until the very end, but we are confident that at least one of them can be concluded by this year end.
Okay. Well, that's encouraging. Thanks.
There are no more questions at the moment.
I think that this is the end of this conference call, and I thank you all for your questions and attendance.
Thank you very much. Bye.
Ladies and gentlemen, the conference is over. Thank you for calling Eni. Press 1 to play a recorded conference. Press 9 to exit.