Venezuela Cancels Eni's Contract for the Dacion Field

Venezuela's national oil company PDVSA has informed Eni that as of April 1, 2006 Eni's operating service contract on hydrocarbon activities in the Dacion Area has been unilaterally terminated and all the management of the operations must be transferred to personnel appointed by PDVSA.

Eni will comply with PDVSA's request by ensuring that activities are handed over in a professional way and at an agreed time.

However, Eni believes that this action by PDVSA is a violation of Eni's contract rights. It is Eni's intention to offer PDVSA a period of time in which a full reparation of Eni's contract rights can be agreed. In the event that an agreement cannot be reached, Eni will pursue legal action to claim its rights.