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Property, plant and equipment
 12 Months Ended
Dec. 31, 2018
Disclosure Of Property Plant And Equipment Explanatory [Abstract]  
Disclosure of property, plant and equipment [text block]
11 Property, plant and equipment
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Other tangible
 
 
 
 
 
 
 
 
 
E&P wells,
 
 
 
 
 
E&P exploration
 
 
E&P tangible
 
 
assets in
 
 
 
 
 
 
Land and
 
 
plant and
 
 
Other plant
 
 
assets and
 
 
assets in
 
 
progress and
 
 
 
 
(€ million)
 
buildings
 
 
machinery
 
 
and machinery
 
 
appraisal
 
 
progress
 
 
advances
 
 
Total
 
2018
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net
carrying
amount – beginning of the year
 
 
1,313
 
 
 
45,782
 
 
 
3,877
 
 
 
1,371
 
 
 
9,469
 
 
 
1,346
 
 
 
63,158
 
Additions
 
 
18
 
 
 
432
 
 
 
173
 
 
 
330
 
 
 
6,947
 
 
 
878
 
 
 
8,778
 
Depreciation
 
 
(65
)
 
 
(6,012
)
 
 
(529
)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
(6,606
)
Reversals
 
 
41
 
 
 
299
 
 
 
86
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
426
 
Impairments
 
 
(61
)
 
 
(477
)
 
 
(73
)
 
 
 
 
 
 
(548
)
 
 
(117
)
 
 
(1,276
)
Write-off
 
 
 
 
 
 
(12
)
 
 
(1
)
 
 
(66
)
 
 
(4
)
 
 
(1
)
 
 
(84
)
Disposals
 
 
(2
)
 
 
(400
)
 
 
(9
)
 
 
(32
)
 
 
(198
)
 
 
2
 
 
 
(639
)
Currency translation differences
 
 
2
 
 
 
1,623
 
 
 
36
 
 
 
53
 
 
 
385
 
 
 
(1
)
 
 
2,098
 
Decrease through loss of control of subsidiary
 
 
1
 
 
 
(4,388
)
 
 
32
 
 
 
(58
)
 
 
(474
)
 
 
10
 
 
 
(4,877
)
Transfers
 
 
81
 
 
 
6,795
 
 
 
461
 
 
 
(294
)
 
 
(6,501
)
 
 
(542
)
 
 
 
 
Other changes
 
 
(54
)
 
 
(786
)
 
 
(152
)
 
 
(37
)
 
 
119
 
 
 
234
 
 
 
(676
)
Net
carrying
amount – end of the year
 
 
1,274
 
 
 
42,856
 
 
 
3,901
 
 
 
1,267
 
 
 
9,195
 
 
 
1,809
 
 
 
60,302
 
Gross
carrying 
amount – end of the year
 
 
4,060
 
 
 
135,467
 
 
 
27,516
 
 
 
1,267
 
 
 
12,559
 
 
 
2,415
 
 
 
183,284
 
Provisions for depreciation and impairments
 
 
2,786
 
 
 
92,611
 
 
 
23,615
 
 
 
 
 
 
 
3,364
 
 
 
606
 
 
 
122,982
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
2017
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net carrying amount – beginning of the year
 
 
1,258
 
 
 
47,090
 
 
 
3,789
 
 
 
1,905
 
 
 
15,135
 
 
 
1,616
 
 
 
70,793
 
Additions
 
 
22
 
 
 
42
 
 
 
190
 
 
 
351
 
 
 
7,302
 
 
 
583
 
 
 
8,490
 
Depreciation
 
 
(71
)
 
 
(6,583
)
 
 
(545
)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
(7,199
)
Reversals
 
 
5
 
 
 
608
 
 
 
273
 
 
 
 
 
 
 
169
 
 
 
 
 
 
 
1,055
 
Impairments
 
 
(2
)
 
 
(491
)
 
 
(83
)
 
 
 
 
 
 
(146
)
 
 
(126
)
 
 
(848
)
Write-off
 
 
 
 
 
 
(3
)
 
 
(2
)
 
 
(232
)
 
 
(2
)
 
 
 
 
 
 
(239
)
Disposals
 
 
(15
)
 
 
3
 
 
 
(6
)
 
 
 
 
 
 
(1,376
)
 
 
(54
)
 
 
(1,448
)
Currency translation differences
 
 
(5
)
 
 
(5,155
)
 
 
(143
)
 
 
(193
)
 
 
(1,527
)
 
 
(2
)
 
 
(7,025
)
Transfers
 
 
84
 
 
 
9,940
 
 
 
629
 
 
 
(265
)
 
 
(9,673
)
 
 
(715
)
 
 
 
 
Other changes
 
 
37
 
 
 
331
 
 
 
(225
)
 
 
(195
)
 
 
(413
)
 
 
44
 
 
 
(421
)
Net
carrying
 
amount – end of the year
 
 
1,313
 
 
 
45,782
 
 
 
3,877
 
 
 
1,371
 
 
 
9,469
 
 
 
1,346
 
 
 
63,158
 
Gross
carrying
amount – end of the year
 
 
4,061
 
 
 
137,223
 
 
 
26,746
 
 
 
1,371
 
 
 
12,315
 
 
 
2,061
 
 
 
183,777
 
Provisions for depreciation and impairments
 
 
2,748
 
 
 
91,441
 
 
 
22,869
 
 
 
 
 
 
 
2,846
 
 
 
715
 
 
 
120,619
 
 
Capital expenditures included capitalized finance expenses of  €52 million
(€72
million in 2017) related to the Exploration & Production segment (€37 million). The interest rate used for capitalizing finance expense ranged from 2.3% to 2.4%
(1.6% to 2.7%
at December 31, 2017)
.
Capital expenditures primarily related to the Exploration & Production segment for €7,757 million (€7,638 million in 2017) and included the consideration paid for the award of the interests in the already producing Concession Agreements of Umm Shaif and Nasr (
10
%) and Lower Zakum (
5
%) and the Concession Agreement of Gasha (
25
%) under development, located in the offshore of Abu Dhabi (United Arab Emirates). The price paid of €869 million was allocated to proved mineral interest (E&P wells, plant and machinery) for €382  million and to unproved mineral interest (E&P tangible assets in progress) for €487 million.
 
More information is reported in note 35 — Segment information and information by geographical area.
 
The main depreciation rates used were substantially unchanged from the previous year and ranged as
follows:
(%)
 
 
 
Buildings
 
2
 – 
10
 
Mineral exploration wells and plants
 
UOP
 
Refining and chemical plants
 
2 
– 
17
 
Gas pipelines and compression stations
 
2
 – 
12
 
Power plants
 
5
 
Other plant and machinery
 
6
 – 
12
 
Industrial and commercial equipment
 
5
 – 
25
 
Other assets
 
10
 – 
20
 
 
The criteria adopted by Eni for determining net (impairments) reversals is reported in note 13 — Net reversal (impairment) of tangible and intangible assets.
 
Disposals related to a
10%
interest in the Zohr asset in Egypt to Mubadala Petroleum Llc with a gain of
€418 million.
Foreign currency translation differences primarily related to subsidiaries which utilize the U.S. dollar as functional currency (€2,209 million).
Property, plant and equipment decreased by €4,800 million due to the exclusion from the consolidation of the assets of the former Eni’s subsidiary Eni Norge AS which was merged with Point Resources AS, fully-owned by HitecVision AS, to establish the equity-accounted joint venture Vår Energi AS, jointly controlled by Eni (
69.60
%) and HitecVision AS with the initial recognition among equity-accounted investments of Eni’s interest in the combined entity.
Transfers from E&P tangible assets in progress to E&P wells, plant and machinery related for €2,750 million to progress in the development of reserves at large projects, comprising Zohr, Jangkrik, East Hub, Noroos and OCTP projects.
Changes in exploration and appraisal activities related to: (i) the successful completion of exploration and appraisal activities at certain suspended exploration wells and their transfer to tangible assets for €297 million; (ii) the write-off of exploration wells for €66 million due to the negative outcome of exploration and appraisal activities, mainly relating to two offshore projects in Morocco and Vietnam.
Other changes of  included a downward revision of estimates of the decommissioning provision of the Exploration & Production segment (negative €503 million) due to increased discount rates curve, especially for the U.S. dollar.
Exploration and appraisal activities related for €1,101 million to costs of suspended exploration wells pending final determination and for €166 million to costs of exploration wells in progress at the end of the year. Changes relating to suspended wells are showed
:
 
(€ million)
 
2018
 
2017
 
2016
Costs for exploratory wells suspended – beginning of the period
 
 
1,263
 
 
 
1,684
 
 
 
1,737
 
Increases for which is ongoing the determination of proved reserves
 
 
235
 
 
 
451
 
 
 
282
 
Amounts previously capitalized and expensed in the period
 
 
(61
) 
 
 
(217
)
 
 
(109
)
Reclassification to successful exploratory wells following the estimation of proved reserves
 
 
(297
)
 
 
(278
)
 
 
(276
)
Disposals
 
 
(6
)
 
 
(199
)
 
 
 
 
Decrease through loss of control of subsidiary
 
 
(58
)
 
 
 
 
 
 
 
 
Reclassification to assets held for sale
 
 
(24
)
 
 
 
 
 
 
 
 
Currency translation differences
 
 
49
 
 
 
(178
)
 
 
50
 
Costs for exploratory wells suspended – end of the period
 
 
1,101
 
 
 
1,263
 
 
 
1,684
 
 
The following information relates to the stratification of the suspended wells pending final determination (ageing):
 
 
 
2018
 
2017
 
2016
 
 
(€ million)
 
(number of
wells in Eni’s
interest)
 
(€ million)
 
(number of
wells in Eni’s
interest)
 
(€ million)
 
(number of
wells in Eni’s
interest)
Costs capitalized and suspended for exploratory well activity
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
- within 1 year
 
 
111
 
 
 
7.02
 
 
 
222
 
 
 
7.95
 
 
 
16
 
 
 
1.05
 
- between 1 and 3 years
 
 
87
 
 
 
2.88
 
 
 
241
 
 
 
3.87
 
 
 
609
 
 
 
10.25
 
- beyond 3 years
 
 
903
 
 
 
24.20
 
 
 
800
 
 
 
21.44
 
 
 
1,059
 
 
 
21.55
 
 
 
 
1,101
 
 
 
34.10
 
 
 
1,263
 
 
 
33.26
 
 
 
1,684
 
 
 
32.85
 
Costs capitalized for suspended wells
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
- fields including wells drilled over the last 12 months
 
 
111
 
 
 
7.02
 
 
 
148
 
 
 
5.88
 
 
 
9
 
 
 
0.55
 
- fields for which the delineation campaign is in progress
 
 
217
 
 
 
4.66
 
 
 
261
 
 
 
4.69
 
 
 
251
 
 
 
3.51
 
- fields including commercial discoveries that proceeds to sanctioning
 
 
773
 
 
 
22.42
 
 
 
854
 
 
 
22.69
 
 
 
1,424
 
 
 
28.79
 
 
 
 
1,101
 
 
 
34.10
 
 
 
1,263
 
 
 
33.26
 
 
 
1,684
 
 
 
32.85
 
 
Unproved mineral interests include the purchase price allocated to unproved reserves following business combinations or acquisition of individual properties. Unproved mineral interests were as follows
:
(€ million)
 
Congo
 
Nigeria
 
Turkmenistan
 
USA
 
Algeria
 
Egypt
 
United Arab
 
Emirates 
 
 
Total
2018
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Book amount at the beginning of the year
 
 
1,162
 
 
 
825
 
 
 
192
 
 
 
99
 
 
 
105
 
 
 
7
 
 
 
 
 
 
 
2,390
 
Additions
 
 
26
 
 
 
56
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
23
 
 
 
487
 
 
 
592
 
Net (impairments) reversals
 
 
(429
)
 
 
 
 
 
 
(76
)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
(505
)
Reclassification to proved mineral interest
 
 
(32
)
 
 
 
 
 
 
(44
)
 
 
 
 
 
 
(32
)
 
 
(2
)
 
 
 
 
 
 
(110
)
Other changes and currency translation differences
 
 
42
 
 
 
40
 
 
 
5
 
 
 
4
 
 
 
4
 
 
 
1
 
 
 
15
 
 
 
111
 
Book amount at the end of the year
 
 
769
 
 
 
921
 
 
 
77
 
 
 
103
 
 
 
77
 
 
 
29
 
 
 
502
 
 
 
2,478
 
2017
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Book amount at the beginning of the year
 
 
1,254
 
 
 
938
 
 
 
138
 
 
 
113
 
 
 
 
 
 
 
7
 
 
 
 
 
 
 
2,450
 
Additions
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
112
 
 
 
 
 
 
 
 
 
 
 
112
 
Net (impairments) reversals
 
 
72
 
 
 
 
 
 
 
75
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
147
 
Reclassification to proved mineral interest
 
 
(7
)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
(7
)
Other changes and currency translation differences
 
 
(157
)
 
 
(113
)
 
 
(21
)
 
 
(14
)
 
 
(7
)
 
 
 
 
 
 
 
 
 
 
(312
)
Book amount at the end of the year
 
 
1,162
 
 
 
825
 
 
 
192
 
 
 
99
 
 
 
105
 
 
 
7
 
 
 
 
 
 
 
2,390
 
 
Unproved mineral interest comprised a property denominated Oil Prospecting License 245 (“OPL 245”), located in the offshore  of Nigeria, with a net book value of  €857 million, which corresponded to the price paid to the Nigerian Government to acquire a
50%
interest in the property, with the partner Shell acquiring the remaining
50%.
As of December 31, 2018, the net book value of the property was €1,159 million, including capitalized exploration costs and pre-development costs. The acquisition of OPL 245 is subject to judicial proceedings in Italy and in Nigeria for alleged corruption and money laundering in respect of the Resolution Agreement signed on April 29, 2011, relating to the purchase of the license by Eni and Shell. Those proceedings are disclosed in note 27 — Guarantees, Commitments and
Risks.
Additions for the year related to the acquisition of unproved reserves as part of the deals to acquire interests in oil&gas assets in production/development phase in the offshore of Abu Dhabi (United Arab Emirates), the extension of the concession terms in Nigeria and Egypt and contractual revisions in Congo.
 
Accumulated provisions for impairments amounted to €16,471 million
(€16,005 million at December 31, 2017).
At December 31, 2018, Eni pledged property, plant and equipment for
€24
million primarily as collateral against certain borrowings (same amount as of December 31, 2017)
.
Government grants recorded as a decrease of property, plant and equipment amounted to €125 million
(€110
million at December 31, 2017)
.
Assets acquired under financial lease agreements amounted to
€46
million (€29 million at December 31, 2017)
.
Contractual commitments related to the purchase of property, plant and equipment are disclosed in note 27 — Guarantees, commitments and risks — Liquidity risk
.
Property, plant and equipment under concession arrangements are described in note 27 — Guarantees, commitments and risks — Assets under concession arrangements
.