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Transactions with related parties

12 Months Ended

Dec. 31, 2018

Disclosure of Transactions with Related Parties [Abstract]

Disclosure of transactions between related parties [text block]

36 Transactions with related parties

In the ordinary course of its business, Eni enters into transactions with related parties regarding:

	(a)	exchange of goods, provision of services and financing with joint ventures, associates and non-consolidated subsidiaries;
	(b)	exchange of goods and provision of services with entities controlled by the Italian Government;
	(c)	exchange of goods and provision of services with companies related to Eni SpA through members of the Board of Directors. Most of these transactions are exempt from the application of the Eni internal procedure of Eni “Transactions involving interests of Directors and Statutory Auditors and transactions with related parties” pursuant to the Consob Regulation, since they relate to ordinary transactions conducted at market or standard conditions, or because under the materiality threshold provided for by the procedure. The solely non-exempted transaction, that was positively examined and valued in application of the procedure, concerned the remote monitoring of cars in the “Enjoy” initiative (for an amount of lower than €1 million) conducted with Vodafone Italia SpA related to Eni SpA through of a member of the Board of Directors;
	(d)	contributions to non-profit entities correlated to Eni with the aim to develop solidarity, culture and research initiatives. In particular these related to: (i) Eni Foundation established by Eni as a non-profit entity with the aim of pursuing exclusively solidarity initiatives in the fields of social assistance, health, education, culture and environment, as well as scientific and technological research; and (ii) Eni Enrico Mattei Foundation established by Eni with the aim of enhancing, through studies, research and training initiatives, knowledge in the fields of economics, energy and environment, both at the national and international level.

Some low transactions with companies related to Eni SpA through some members of the Board of Directors were concluded at market or standard conditions, or in compliance with Eni’s internal procedure “Transactions involving interests of Directors and Statutory Auditors and transactions with related parties”, pursuant the Consob regulation.

Transactions with related parties were conducted in the interest of Eni companies and, with exception of those with entities whose aim is to develop charitable, cultural and research initiatives, are related to the ordinary course of Eni’s business.

Trade and other transactions with related parties

(€ million)	December 31, 2018						2018
Name	Receivables and other assets		Payables and other liabilities		Guarantees		Costs		Revenues		Other operating (expense) income
Joint ventures and associates
Agiba Petroleum Co		1		96				156
Angola LNG Supply Services Llc						177
Coral FLNG SA		14				1,147				62
Gas Distribution Company of Thessaloniki - Thessaly SA		1		18				51
Karachaganak Petroleum Operating BV		27		134				998		1
Mellitah Oil & Gas BV		1		268				502		1
Petrobel Belayim Petroleum Co		56		2,029				2,282		7
Saipem Group		75		171		793		420		30
Unión Fenosa Gas SA		4		7		57				123		37
Vår Energi AS		13		100		218
Other(*)		44		25				104		111		(26	)
		236		2,848		2,392		4,513		335		11
Unconsolidated entities controlled by Eni
Eni BTC Ltd						177
Industria Siciliana Acido Fosforico - ISAF SpA (in liquidation)		87		1		5				11
Other		6		23		14		13		7
		93		24		196		13		18
		329		2,872		2,588		4,526		353		11
Entities controlled by the Government
Enel Group		134		151				514		118		227
GSE - Gestore Servizi Energetici		67		85				588		555		74
Italgas Group		5		146				667		23
Snam Group		237		289				1,184		109		(1	)
Terna Group		26		47				231		150		8
Other		25		18				34		45
		494		736				3,218		1,000		308
Other related parties		1		2				32		4
Groupement Sonatrach - Agip «GSA» and Organe Conjoint des Opérations «OC SH/FCP»		40		140				229		34
Total		864		3,750		2,588		8,005		1,391		319

(*)

Each individual amount included herein was lower than €50 million.

(€ million)	December 31, 2017						2017
Name	Receivables and other assets		Payables and other liabilities		Guarantees		Costs		Revenues		Other operating (expense) income
Joint ventures and associates
Agiba Petroleum Co		1		83				142
Coral FLNG SA		20		4		1,094				28
Karachaganak Petroleum Operating BV		36		121				951
Mellitah Oil & Gas BV		5		220				495		2
Petrobel Belayim Petroleum Co		86		1,205				3,168		8
Saipem Group		63		76		7,270		450		44
Unión Fenosa Gas SA						57		3		202		28
Other (*)		84		22				140		128
		295		1,731		8,421		5,349		412		28
Unconsolidated entities controlled by Eni
Eni BTC Ltd						169
Industria Siciliana Acido Fosforico - ISAF - SpA (in liquidation)		77		1		5				7
Other		20		23		7		14		7
		97		24		181		14		14
		392		1,755		8,602		5,363		426		28
Entities controlled by the Government
Enel Group		123		187				622		164		285
GSE - Gestore Servizi Energetici		69		219				506		702		2
Italgas Group		14		180		1		681		18
Snam Group		187		351				1,221		85
Terna Group		35		31				212		154		15
Other (*)		50		21				38		16		1
		478		989		1		3,280		1,139		303
Other related parties		1		2				25		1
Groupement Sonatrach - Agip «GSA» and Organe Conjoint des Opérations «OC SH/FCP»		39		145				530		42
Total		910		2,891		8,603		9,198		1,608		331

(*)

Each individual amount included herein was lower than €50 million.

(€ million)	December 31, 2016						2016
Name	Receivables and other assets		Payables and other liabilities		Guarantees		Costs		Revenues		Other operating (expense) income
Joint ventures and associates
Agiba Petroleum Co		1		50				156
Karachaganak Petroleum Operating BV		47		187				918		27
Mellitah Oil & Gas BV		7		134				477
Petrobel Belayim Petroleum Co		225		532				1,940		2
Saipem Group		64		224		8,094		781		51
Unión Fenosa Gas SA						57				94
Other (*)		114		25		1		145		143		47
		458		1,152		8,152		4,417		317		47
Unconsolidated entities controlled by Eni
Eni BTC Ltd						192
Industria Siciliana Acido Fosforico - ISAF - SpA
(in liquidation)		69		1		3				2
Other (*)		9		16		51		8		10
		78		17		246		8		12
		536		1,169		8,398		4,425		329		47
Entities controlled by the Government
Enel Group		151		254				808		201		182
GSE - Gestore Servizi Energetici		58		32				243		414		5
Italgas Group		54		1				4
Snam Group		44		541		1		2,032		113
Terna Group		33		46				232		117		13
Other (*)		43		24				37		68
		383		898		1		3,356		913		200
Other related parties				2				32
Groupement Sonatrach - Agip «GSA» and Organe Conjoint des Opérations «OC SH/FCP»		176		331				423		70
Total		1,095		2,400		8,399		8,236		1,312		247

(*)

Each individual amount included herein was lower than €50 million.

The most significant transactions with joint ventures, associates and unconsolidated subsidiaries concerned:

•

Eni’s share of expenses incurred to develop oil fields from Agiba Petroleum Co, Karachaganak Petroleum Operating BV, Mellitah Oil & Gas BV, Petrobel Belayim Petroleum Co, Groupement Sonatrach — Agip «GSA», Organe Conjoint des Opérations «OC SH/FCP» and, only for Karachaganak Petroleum Operating BV, purchase of oil products by Eni Trading & Shipping SpA; services charged to Eni’s associates are invoiced on the basis of incurred costs;

•

guarantees issued on behalf of Angola LNG Supply Services Llc to cover the commitments relating to the payment of the regasification fees;

•

supply of upstream specialist services and guarantees issued on a pro-quota basis granted to Coral FLNG SA on behalf of the Consortium TJS for the contractual obligations assumed following the award of the EPCIC contract for the construction of a floating gas liquefaction plant and the provision of services (for more information see note 27 — Guarantees, commitments and risks);

•

the acquisition of transport and distribution services from Gas Distribution Company of Thessaloniki — Thessaly SA;

•

engineering, construction and drilling services by Saipem Group mainly for the Exploration & Production segment and residual guarantees issued by Eni SpA relating to bid bonds and performance bonds;

•

performance guarantees given on behalf of Unión Fenosa Gas SA in relation to contractual commitments related to the results of operations, sales of LNG and fair value of derivative financial instruments;

•

guarantees issued in compliance with contractual agreements in the interest of Vår Energi AS and trade and other receivables and payables;

•

a guarantee issued in relation to the construction of an oil pipeline on behalf of Eni BTC Ltd; and

•

services for environmental restoration to Industria Siciliana Acido Fosforico — ISAF SpA (in liquidation).

The most significant transactions with entities controlled by the Italian Government concerned:

•

sale of fuel, sale and purchase of gas, acquisition of power distribution services and fair value of derivative financial instruments with Enel Group;

•

acquisition of natural gas transportation, distribution and storage services with the Snam Group and the Italgas Group on the basis of tariffs set by the Italian Regulatory Authority for Energy, Networks and Environment and purchase and sale of natural gas for granting the balancing of the system on the basis of prices referred to the quotations of the main energy commodities;

•

sale and purchase of electricity, the acquisition of domestic electricity transmission service on the basis of prices referred to the quotations of the main energy commodities, and derivatives on commodities entered to hedge the price risk related to the utilization of transport capacity rights with the Terna Group;

•

sale and purchase of electricity, gas, environmental certificates, fair value of derivative financial instruments and sale of oil products with GSE — Gestore Servizi Energetici for the setting-up of a specific stock held by the Organismo Centrale di Stoccaggio Italiano (OCSIT) according to the Legislative Decree No. 249/2012.

Transactions with other related parties concerned:

•

provisions to pension funds of €24 million; and

•

contribution

s and service provisions to Eni Foundation of €3 million and to Eni Enrico Mattei Foundation for €4 million.

Financing transactions with related parties

(€ million)

	December 31, 2018						2018
Name	Receivables		Payables		Guarantees		Charges		Gains
Joint ventures and associates
Angola LNG Ltd						245
Cardón IV SA		705		36						95
Coral FLNG SA		108
Coral South FLNG DMCC						1,397
Shatskmorneftegaz Sàrl								267		7
Société Centrale Electrique du Congo SA		64		30				5
Vår Energi AS				494
Other		38		4		22		9		13
		915		564		1,664		281		115
Unconsolidated entities controlled by Eni
Other		49		25
		49		25
Entities controlled by the Government
Enel Group				64
Other				8				2
				72				2
Total		964		661		1,664		283		115

(€ million)

	December 31, 2017						2017
Name	Receivables		Payables		Guarantees		Charges		Gains
Joint ventures and associates
Angola LNG Ltd						233
Cardón IV SA		955								86
Coral FLNG SA		56								71
Coral South FLNG DMCC						1,334
Saipem Group				3		56				13
Shatskmorneftegaz Sarl		101								6
Société Centrale Electrique du Congo SA		66		43
Other		48		49		2		1		14
		1,226		95		1,625		1		190
Unconsolidated entities controlled by Eni
Servizi Fondo Bombole Metano SpA		60		9						1
Other (*)		1		52
		61		61						1
Entities controlled by the Government
Other				8				3
				8				3
Total		1,287		164		1,625		4		191

(*)

Each individual amount included herein was lower than €50 million.

(€ million)
	December 31, 2016						2016
Name	Receivables		Payables		Guarantees		Charges		Gains		Derivative financial instruments
Joint ventures and associates
Cardón IV SA		1,054								96
Matrìca SpA		125						93		9
Shatskmorneftegaz Sarl		69						13		4
Société Centrale Electrique du Congo SA		78						18
Unión Fenosa Gas SA				85
Saipem Group						82				43		27
Other (*)		52				2		17		4
		1,378		85		84		141		156		27
Unconsolidated entities controlled by Eni
Eni BTC Ltd				54
Other (*)		46		52				1		1
		46		106				1		1
Entities controlled by the Government
Other								3
								3
Total		1,424		191		84		145		157		27

(*) Each individual amount included herein was lower than €50 million.

The most significant transactions with joint ventures, associates and unconsolidated subsidiaries concerned:

•

bank debt guarantees issued on behalf of Angola LNG Ltd;

•

financing loans granted to Cardón IV SA for the exploration and development activities of the Perla offshore gas field in Venezuela;

•

financing loans granted to Coral FLNG SA for the construction of a floating gas liquefaction plant in the Area 4 in Mozambique (for more information see note 27 — Guarantees, commitments and risks);

•

a bank debt guarantee issued on behalf of Coral South FLNG DMCC (for more information see note 27 — Guarantees, commitments and risks);

•

the impairment of financial receivables granted to Shatskmorneftegaz Sàrl;

•

the loan granted to Société Centrale Electrique du Congo SA for the construction of a power plant in Congo and a cash deposit at Eni’s financial companies;

•

a cash deposit held at Eni’s financial companies by Vår Energi AS.

The most significant transactions with entities controlled by the Italian Government concerned:

•

restricted deposits in escrow of derivative financial instruments with Enel Group.

Impact of transactions and positions with related parties on the balance sheet, profit and loss account and statement of cash flows

The impact of transactions and positions with related parties on the balance sheet consisted of the following:

(€ million)
	December 31, 2018						December 31, 2017
	Total		Related parties		Impact %		Total		Related parties		Impact %
Other current financial assets		300		49		16.33		316		73		23.10
Trade and other receivables		14,101		633		4.49		15,421		834		5.41
Other current assets		2,258		71		3.14		1,573		30		1.91
Other non-current financial assets		1,253		915		73.02		1,675		1,214		72.48
Other non-current assets		792		160		20.20		1,323		46		3.48
Short-term debt		2,182		661		30.29		2,242		164		7.31
Trade and other payables		16,747		3,664		21.88		16,748		2,808		16.77
Other current liabilities		3,980		63		1.58		1,515		60		3.96
Other non-current liabilities		1,502		23		1.53		1,479		23		1.56

The impact of transactions with related parties on the profit and loss accounts consisted of the following:


	2018								2017								2016
(€ million)	Total			Related parties			Impact %		Total			Related parties			Impact %		Total			Related parties			Impact %
Net sales from operations		75,822			1,383			1.82		66,919			1,567			2.34		55,762			1,238			2.22
Other income and revenues		1,116			8			0.72		4,058			41			1.01		931			74			7.95
Purchases, services and other		(55,622	)		(8,009	)		14.40		(51,548	)		(9,164	)		17.78		(43,278	)		(8,212	)		18.97
Net (impairment losses) reversals of trade and other receivables		(415	)		26			—		(913	)							(846	)
Payroll and related costs		(3,093	)		(22)			0.71		(2,951	)		(34	)		1.15		(2,994	)		(24	)		0.80
Other operating income (expense)		129			319			—		(32	)		331			—		16			247			—
Finance income		3,967			115			2.90		3,924			191			4.87		5,850			157			2.69
Finance expense		(4,663	)		(283)			6.07		(5,886	)		(4	)		0.07		(6,232	)		(145	)		2.33
Derivative financial instruments		(307	)							837								(482	)		27			—

Main cash flows with related parties are provided below:

(€ million)	2018			2017			2016
Revenues and other income		1,391			1,608			1,312
Costs and other expenses		(5,210	)		(5,360	)		(5,623	)
Other operating income (loss)		319			331			247
Net change in trade and other receivables and liabilities		683			391			182
Net interests		110			187			133
Net cash provided from operating activities		(2,707	)		(2,843	)		(3,749	)
Capital expenditure in tangible and intangible assets		(2,768	)		(3,838	)		(2,613	)
Disposal of investments								463
Net change in accounts payable and receivable in relation to investments		20			425			252
Change in financial receivables		(566	)		298			5,650
Net cash used in investing activities		(3,314	)		(3,115	)		3,752
Change in financial liabilities		16			(16	)		(192	)
Net cash used in financing activities		16			(16	)		(192	)
Total financial flows to related parties		(6,005	)		(5,974	)		(189	)

The impact of cash flows with related parties consisted of the following:

	2018							201 7								201 6
(€ million)	Total		Related parties			Impact %		Total			Related parties			Impact %		Total			Related parties			Impact %
Cash provided from operating activities		13,647		(2,707	)		—		10,117			(2,843	)		—		7,673			(3,749	)		—
Cash used in investing activities		(7,536)		(3,314	)		43.98		(3,768	)		(3,115	)		82.67		(4,443	)		3,752			—
Cash used in financing activities		(2,637)		16			—		(4,595	)		(16	)		0.35		(3,651	)		(192	)		5.26