Eni: downside up - FT.com Trust Eni to confound expectations on the upside as well as the down. While the world's biggest oil and gas companies have generally had a forgettable 2012 - flat or declining production and rising capital expenditure have been the main themes of annual results - Italy's energy champion has managed to outshine its peers on both fronts. Not only was its production 7 per cent higher last year than in 2011 (at 1.7m barrels of oil equivalent a day), it cut its leverage ratio by nearly a half (to 0.25). Eni still faces some big strategic questions, but it is starting, finally, to look less like the sum of a lot of very diverse parts. That is what can happen during a transformational year. In 2012, Eni sold a chunk of its stake in Snam, Italy's gas distribution network. This brought in €3.5bn and allowed it to deconsolidate more than €12bn of debt. It also reduced its stake in Galp, the Portuguese oil company. Its big production jump is a tad misleading, since much of it is accounted for by the almost complete return to pre-revolutionary output levels in Libya. But there were also higher outputs in Russia and Iraq. Eni looks less like a conglomerate now than it did a year ago. Yet chief executive Paolo Scaroni still has work to do, especially in the group's downstream activities. Refining and chemicals reported a combined loss of €800m last year. Compare that to exploration and production, which accounted for more than 90 per cent of the group's €20bn operating profit. There is also Saipem, the oil services group of which Eni owns 43 per cent. The stake has been a profitable one, but Saipem's monster profit warning last month wiped a third off its market value, while a corruption probe has made its place in the Eni empire suddenly uncertain. Eni's shares are up 25 per cent since their August 2011 low, trading at a small premium to Total or Shell. That is reward for past performance, but 2013 is another year.