The Group

ERG Group Business Description (as at 30 September 2011)

The ERG Group, including its subsidiaries and joint ventures with leading international players, operates in the following business segments:
 

Refining & Marketing
The Group is active in the segment of coastal refining through the joint venture with LUKOIL which controls the ISAB refinery in Priolo, one of the main sites in the Mediterranean both in terms of capacity (320 thousand barrels/days) and complexity (Nelson index 9.3) and in integrated downstream, from 1 October 2010 through TotalErg, the joint venture with TOTAL, with a network of about 3,300 sales outlets (about 12% market share) and fuel sales of 4.2 million m3/year, and through ERG Oil Sicilia (EOS), a company which, as a result of a partial demerger, received the business unit comprising the assets of ERG Petroli S.p.A. in Sicily.
TotalErg also operates in the refining segment (the Rome Refinery, a wholly-owned subsidiary,the Sarpom Refinery in Trecate, with a 26% shareholding).

Power & Gas
The Group is active in the production and marketing of electric energy, steam and gas. ERG’s main equity investments in the segment are:
− ISAB Energy S.r.l.: generation of electricity with a power plant (528 MW), fuelled by a gas obtained from a complex process of gasification of asphalt originating from the ISAB Refinery in Priolo (Sicily);
− ERG Power S.r.l.: the company owns the North Plant of the Priolo site (480 MW), comprising the combined cycle plant fuelled with natural gas and existing counter-pressure plants.
Projects in the authorization phase:
− Ionio Gas S.r.l.: a joint venture with Shell Energy Italia for the development of a liquid natural gas regasification plant at Priolo, Sicily.
− ERG Rivara Storage: (15% ERG, 85% Independent Gas Management - Independent Resources Group): a company for the construction and operation of an underground natural gas storage site in Rivara, San Felice sul Panaro – Modena.

Renewable energy sources
Through the subsidiary ERG Renew, it operates in the sector of the generation of electricity from renewable sources with 520 MW in commercial operation at 30 September 2011, almost exclusively in the wind sector, of which 158 in Puglia, 112 in Campania, 98 in Calabria, 40 in Molise, 38 in Sicily, 9 in Lazio, 2 in Liguria and 64 in France.
The considerable increase in power that took place in 2011 is due to the completion of the Fossa del Lupo wind farm, in operation since 1 July 2011, with 97.5 MW of power, and to the acquisition of ERG Eolica Campania, with 111.8 MW of installed power.
ERG Renew is also completing the wind farm in Ginestra (40 MW) which will start commercial operation by 2011, and in the second half of September it started work for the construction of the wind farm in Amaroni (22.5 MW), expected to start production by the end of 2012.
In June 2011, the photovoltaic plant at Priolo Gargallo (SR), with about 1 MW of installed power, also entered production.

The table shows the companies subject to line-by-line consolidation as at 31 March 2011.
The scope of consolidation underwent the following changes with respect to 31 December 2009:
• inclusion of ERG Power S.r.l. ¹
• inclusion of ERG Oil Sicilia S.r.l. ²
• inclusion of ERG Eolica Adriatica S.r.l. ³
• exclusion of ERG Petróleos S.A., Gestión Ibérica S.L., I.S.E.A. S.r.l. and Ecopower S.r.l.
• merger by incorporation of ERG Power & Gas S.p.A. and ERG Raffinerie Mediterranee S.p.A. into the parent company ERG S.p.A.
• exclusion of ERG Petroli S.p.A., Gestioni Europa S.p.A., Restiani S.p.A. and Guazzotti S.p.A., as a result of the launch of the TotalErg joint venture⁴

¹ company owning the CCGT plant, which it received by transfer on 1 January 2010 from ERG Nuove Centrali S.p.A.
² company that received by split on 1 April 2010 the business unit comprising the assets of ERG Petroli S.p.A. in Sicily
³ company, acquired on 23 July 2010, owner of two wind farms in Molise and in Puglia for a total installed capacity of 102 MW
⁴ resulting from the merger by takeover of Total Italia into ERG Petroli which took effect on 1 October 2010