Eni CEO Claudio Descalzi on the High-Stakes Race to Meet Energy Demand without Russian Gas

**Adi Ignatius** (0:13)
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My guest today is Claudio Descalzi, who is the CEO of the Italian energy giant, Eni. He'll be joining us from Milan. Claudio joined the company way back in 1981 as an oil and gas field engineer, and over the years, he's developed a truly global perspective on the business, having served as director of the company's Congo and Nigeria operations, and as executive vice president for Africa, Middle East, and China. He became Eni's CEO in 2014 Welcome, Claudio.

**Claudio Descalzi** (1:47)
Thank you. Good afternoon to me.

**Adi Ignatius** (1:52)
Yes. Good afternoon for both of us.
I want to jump right in and I want to start with Russia's invasion of Ukraine. We've all watched with horror on a personal level, but obviously this has profound impact on European energy markets. And I'd like, you know, let's start with what you're seeing in terms of the impact on Europe now. You know, we're over a year into this thing.

**Claudio Descalzi** (2:19)
Yes. I think that the war, the war now and before and after also the pandemic, we can say that it was a wake up call for the war, especially for Europe, because we discovered that the gas demand and also hydrocarbons in general, but mainly on gas, is inelastic, is already at the same level. We can say that in the last 20 years, we have always the same kind of level of gas demand in Europe, in Italy. And that is a different, we had before a different vision, because we thought about renewables and other vectors that can replace and reduce the gas consumption. At the end, it's not like that. So, if we cut coal, that means that we have to continue to supply gas. We have to invest in infrastructure. And especially, we have to accelerate the transitions. And with a larger spread of energy vectors. So, that was quite important and clearly create big impacts. I talk about gas price, electricity price, price of gasoline, and when 150, 170 billion cubic meter, I talk about the gas, Russian gas, practically disappear in a few months.
It's not an easy task to replace it.

**Adi Ignatius** (3:59)
Yeah, no, I can't imagine.
Quickly, if you just joined us, I'm speaking with Eni CEO, Claudio Descalzi. If you have questions for Claudio, please put them into the chat. We'll try to get to them later. All right, so let's talk specifically. I mean, you talked about there are a number of responses to this, and one is to diversify away from carbon, but another is replacing supply in the short term. And talk about how Eni has responded. Why don't we start in the short term to try to acquire, develop, whatever it is, oil and gas to make up for the shortfall?

**Claudio Descalzi** (4:35)
So what happened last year after the war, we start immediately working in the country where we already work. So we did what we had been done for years, so investing in the gas development and work with our Austin country to be able to replace Russian gas. Big effort, we work with the government, we work with our national partners, we talk about the national companies, and in nine months, eight months, we have been able to finalize a lot of contracts. And the first target was to replace at least 50% of the Russian gas for this winter and fill our storage facility. And that was successful in terms of filling the storage facility and also replacing 50% of the Russian gas.
And the second point is to replace 80% of the Russian gas for the winter 2023-24 and 100% by 2024-2025.
So in two and a half years to be able to replace all the Russian gas to Italy. That was an effort for Italy clearly, where we have all our main operation in the downstream, our retail, our gas and power, so all our clients where we have the B2C and B2B contract. And that was a very, I think, a successful try. We were being successful. And so now we have to continue to invest to replace it, but at the same time also to invest on other energy sources, as we did in the past.