Eni S.p.A. (E): 5 FORCES Analysis [Nov-2025 Updated]

You're looking for the real story behind Eni S.p.A.'s competitive footing right now, late in 2025, and honestly, it's a tale of two companies: the legacy upstream business fighting intense rivalry and high supplier power from National Oil Companies, and the new energy satellites like Plenitude, which is already pushing renewable capacity past 5.5 GW. This Porter's Five Forces breakdown cuts through the noise, showing exactly where the pressure points are-from customers facing declining gas demand to the accelerating threat of substitutes that could reshape their core business. We'll map out the forces that determine if their pivot to a €1 billion adjusted EBIT goal for the Global Gas & LNG Portfolio is sustainable against the backdrop of 1.71-1.72 Mboed production guidance. Dive in to see the precise competitive risks you need to model.

Eni S.p.A. (E) - Porter's Five Forces: Bargaining power of suppliers

You're looking at Eni S.p.A.'s supplier landscape, and honestly, it's a mixed bag, but the resource owners definitely hold the upper hand in critical areas. The power of National Oil Companies (NOCs) is high because they control access to the reserves in many of Eni's key operational territories. For instance, Eni is investing €24 billion (about $26.24 billion) across Algeria, Libya, and Egypt over the next four years to enhance production and infrastructure in these regions, showing a necessary level of cooperation with state entities there.

Specialized oilfield service providers, like the big names such as Schlumberger or Halliburton, maintain a moderate level of power. This is due to the high technical barriers for deepwater and complex projects. We see this reflected in the offshore market tightness; drillship utilization is expected to hit 97% in 2025. While day rates for some US Gulf of Mexico drillships are quoted between $486,000 to $515,000, this specialized service segment remains tight, giving those providers leverage.

Still, Eni S.p.A. actively works to reduce its dependence on external vendors through smart integration. The company's strategy includes securing feedstock via its agro-hubs network, targeting 35% cover by 2025. Plus, Eni's in-house technology development, like its HPC6 High-Performance Computing system-the 5th most powerful in the world and 1st in the industry-helps mitigate reliance on some external tech suppliers.

Geopolitical shifts definitely force Eni to rely on new, powerful gas suppliers. Replacing Russian supply, which was about 20 Bcm annually, required swift action. This led to significant long-term commitments with new partners. For example, the Phase 2 startup of the Congo LNG project by the end of 2025 will boost total capacity to 3 MTPA from the 0.6 MTPA achieved in Phase 1. Also, Eni signed a 27-year LNG supply deal with QatarEnergy for up to 1 MTPA starting in 2026.

When it comes to locking in costs for major infrastructure, Eni S.p.A. uses long-term contracts, which often exceed the typical 7-10 year range mentioned. We see concrete evidence of this long-term commitment in the new gas deals:

• Venture Global LNG supply agreement duration: 20 years.
• QatarEnergy LNG supply agreement duration: 27 years.
• Vår Energi gas supply deal duration: until 2036.

These long-term agreements, like the 20-year LNG deal with Venture Global for 2 MTPA, help stabilize future input costs, but they also mean Eni is locked into those supplier relationships for the contract's life. Here's a quick look at some of Eni's major gas supply commitments:

Eni S.p.A. (E) - Porter's Five Forces: Bargaining power of customers

The bargaining power of customers for Eni S.p.A. is best described as sitting in the moderate-to-high range, largely driven by the distinct segmentation of its customer base and the commodity nature of its core gas products. You have to look at the B2B side separately from the retail side, as their leverage points are quite different.

For large industrial customers and utilities buying commodity products like Liquefied Natural Gas (LNG), the power is definitely high. These buyers are extremely price-sensitive, especially when comparing European hub prices to global benchmarks. For instance, the European gas spot price (PSV) in Eni's base 2025 scenario was set at 44.4 €/MWh, which is significantly higher than US benchmarks, meaning large industrial users have a strong incentive to push for lower contract prices or risk relocation. Switching costs for securing alternative gas supply, while not zero, are relatively low for large-volume buyers in the global LNG market, giving them leverage during renegotiations. This is reflected in Eni's Global Gas & Power (GGP) segment, which saw better-than-anticipated outcomes from renegotiations and settlements, suggesting customer pushback on pricing was successfully managed but remains a key dynamic.

On the retail side, Eni's subsidiary Plenitude is growing its customer base, which slightly dilutes individual customer power, but the market remains competitive. Plenitude currently provides energy solutions to over 10 million European customers. Specifically within Italy, the core market, Plenitude serves about 8 million customers. The company has an aggressive growth plan, targeting over 11 million customers by 2028 and 15 million by 2030. Still, the sheer number of competitors in the European retail energy market means that while no single customer has much power, the collective base can easily switch providers if prices are not competitive or service lags. You can see the scale of this segment in the table below.

The structural shift in European energy consumption directly impacts Eni's core gas product demand, which empowers customers who are actively seeking alternatives. European gas demand is structurally declining due to the expansion of renewables and efficiency gains. For instance, OECD Europe's total natural gas demand is forecast to contract by 8% to 10% between 2024 and 2030. The power sector is expected to drive the majority of this drop, with gas-to-power demand diving by 25% by 2030 compared to 2024, largely due to renewable power output increasing by more than 40% by 2030. This trend means that for B2C and B2B customers, the long-term necessity of purchasing gas is diminishing, increasing their willingness to negotiate harder or switch to greener suppliers like Plenitude's own renewable offerings. Honestly, this long-term demand destruction is a major factor pushing customer power up.

Finally, government intervention, while often aimed at shielding consumers, acts as a cap on Eni's potential revenue per customer. Across the EU, governments committed over €540 billion to shield households and businesses from high energy bills following the 2022 crisis peaks. In Italy, while emergency support measures are winding down, the focus for any future intervention is ensuring support is targeted at vulnerable groups, which effectively caps the maximum price a utility can charge without triggering state aid or political backlash. Furthermore, EU regulatory actions, such as the proposed revenue cap of €180/MWh on inframarginal producers, signal a regulatory willingness to intervene directly in pricing mechanisms, which sets a ceiling on what customers are willing to pay before regulatory relief kicks in.

Finance: draft 13-week cash view by Friday.

Eni S.p.A. (E) - Porter's Five Forces: Competitive rivalry

Rivalry is intense among supermajors like Shell, TotalEnergies, and BP, and state-owned enterprises, all vying for market share and favorable asset positions in the evolving energy landscape. This competition plays out across both traditional Exploration & Production (E&P) and the growing renewables sector, as competitors execute dual strategies.

The capital allocation battleground is fierce, driven by the need to fund both hydrocarbon development and the energy transition. Eni S.p.A. is navigating this by tightening its spending plans, which reflects the competitive pressure on capital efficiency. For the full-year 2025, Eni S.p.A. revised its gross capital expenditure guidance to be below €8.5 billion, a reduction from the initial guidance of below €9 billion. Furthermore, the proforma net capital expenditure expectation was lowered to below €5 billion, down from the initial range of €6.5-€7 billion.

Eni S.p.A.'s 2025 full-year production guidance of 1.71-1.72 Mboed (million barrels of oil equivalent per day) serves as a key metric in this rivalry, demonstrating the drive for volume growth even amidst portfolio high-grading. This was an upward revision from the initial 1.7 Mboed forecast. The third quarter of 2025 saw actual production reach 1.76 million barrels/day.

The focus on margin capture in specific business areas highlights the strategic competition for profitability. Eni S.p.A.'s Global Gas & LNG Portfolio (GGP) adjusted EBIT expectation for the full year 2025 was raised to over €1 billion, significantly better than the initial guidance of about €0.8 billion. This focus on maximizing margins in the gas supply portfolio is a direct competitive maneuver.

The structural nature of the industry creates high exit barriers, meaning competitors are locked into their positions due to massive sunk costs tied up in E&P infrastructure and refining assets. These long-term investments make rapid, full-scale exits difficult, intensifying the competition for incremental gains within existing asset bases.

Here's a look at how Eni S.p.A.'s revised 2025 outlook compares to earlier expectations, showing the impact of competitive and market dynamics on capital deployment:

The commitment to shareholder returns is also a competitive tool, with Eni S.p.A. raising its FY 2025 share buyback commitment to €1.8 billion, an increase of €0.3 billion over the initial plan, reflecting confidence in the improved cash flow outlook despite the competitive environment.

The dual strategy execution is further evidenced by the capital deployment across segments:

• E&P proforma adjusted EBIT for Q3 2025 was €2.64 billion.
• Plenitude's installed renewable capacity target for year-end 2025 is 5.5 GW.
• Plenitude's proforma adjusted EBITDA is expected to be above €1.1 billion for the full year 2025.

Eni S.p.A. (E) - Porter's Five Forces: Threat of substitutes

You're looking at the substitution threat for Eni S.p.A. (E) and honestly, it's high and picking up speed, largely because of government mandates and cleaner tech getting cheaper.

The pressure comes from multiple angles, directly attacking both the power generation and the refined products segments of Eni S.p.A. (E)'s business. For instance, the global stock of electric cars displaced over 1 million barrels per day (b/d) of oil consumption in 2024. Projections for 2025 suggest global EV sales will hit 10 million units, potentially cutting oil demand by an additional 350,000 b/d.

Here's a quick look at the scale of these direct substitutes:

Plenitude, Eni S.p.A. (E)'s renewable arm, is directly replacing fossil-fuel power generation. As of September 2025, Plenitude had 4.8 GW of renewable energy capacity installed. The company is pushing hard, aiming for 10 GW by 2028 and 15 GW by 2030.

For the refined products side, Enilive is tackling diesel and jet fuel substitution. The current biorefining capacity is targeted at 1.65 MTPA. Specifically, the new Sustainable Aviation Fuel (SAF) plant at Gela has a capacity of 400,000 metric tons per year. This is significant because Regulation (EU) 2023/2405 mandates a minimum of 2% SAF in jet fuel supplied at EU airports starting 1 January 2025. Enilive is also targeting SAF production optionality of 1 MTPA by 2026.

The shift in personal transport is forcing a change in the refining and marketing segment. You see this in the accelerating EV adoption rates:

• Global EV sales projected to reach 10 million units in 2025.
• EVs accounted for roughly 25% of new car sales in 2025.
• The global EV fleet reached nearly 58 million units by the end of 2024.
• In Norway, 88% of new car sales were fully electric in 2024.

On the long-term, disruptive front, fusion energy represents a potential ultimate substitute for all thermal power generation. Eni S.p.A. (E) cemented its commitment by signing a Power Purchase Agreement (PPA) worth more than $1 billion with Commonwealth Fusion Systems (CFS) in September 2025. This secures Eni S.p.A. (E) the acquisition of decarbonized power from CFS's first 400 MW ARC fusion power plant, which is expected to connect to the grid in the early 2030s. Eni S.p.A. (E) is a strategic investor, participating in a funding round that brought CFS's total funding close to $3 billion.

Eni S.p.A. (E) - Porter's Five Forces: Threat of new entrants

Threat is low in traditional E&P due to massive capital and regulatory barriers.

Eni S.p.A.'s net capital expenditure for 2025 is expected to be below €6 billion, following a Q3 revision from initial guidance, implying the scale of required investment for entry in E&P.

Initial investment for a new offshore platform can range from $500 million to $1 billion.

Threat is moderate in the renewables and retail segments (Plenitude).

• Plenitude has an enterprise value of over €10 billion.
• Plenitude's organic capital expenditure averages around €1.4 billion per year over the 2024-2027 Plan.
• As of March 2025, Plenitude has over 4 GW of installed renewable capacity and over 10 million European clients.
• Energy Infrastructure Partners (EIP) invested up to €700 million for a stake corresponding to 10% of Plenitude's share capital.

Eni S.p.A.'s launch of a new Carbon Capture and Storage (CCS) satellite company in 2025 builds a new entry barrier in industrial decarbonization.

Established global logistics, trading networks, and existing long-term LNG contracts create a significant scale advantage.