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Meanwhile, you will have seen that we have signed strategic agreement with Rosneft to gain access to very promising exploration licenses in the Barents Sea and in the Black Sea, increasing the potential of our portfolio and providing support to long-term growth prospects.In gas and power, in March we completed the renegotiation of our gas supply contracts with Gazprom. The recognition of the associated economic effects was reflected to the beginning of 2011, and is included in our Q1 marketing results. Finally, we are progressing on our strategic objective of our lock-in value from our non-core leased assets. Regarding Galp, on March 29, we signed an agreement to sell 5% of the company to Amorim for 14.25 euro per share. Once this sale is completed, we will have significant optionality on the disposal of our stake. With regards to Snam, I’d like to remind you that the Italian government has asked legislation envisaging the completion of our exit by September 2013. The method by which the separation will occur will be defined by a government decree to be issued at the latest by the end of May. Turning now to our results, in the first quarter of 2012, the market environment was broadly positive. This was mainly driven by different price, which average $118 barrel, up 13% compared to the first quarter of 2011. The euro dollar exchange rate was also supportive at $1.31 per euro, with an appreciation of the dollar of 4.1%. However, the European refining margin Branch Euro was $3.3 a barrel, in line with the first quarter of last year. In the first quarter of 2012, adjusted operating profit was €6.45 billion, up 26.5% from the first quarter of 2011. This was due to the better operating performance reported by the exploration and production division, up 24% and to the increased results of the gas and power division, up 57% driven by stronger profits from the marketing segment. This was partially offset by weaker results in R&M and Chemicals.
In the first quarter of 2012, adjusted net profit was €2.48 billion, up 13% compared with a year ago as a result of better operating performance. This positive effect was partially offset by higher financial charges, which increased by €207 million, and a higher consolidated tax rate, up approximately 6 percentage points.The physical impact was the result of a high fluctuating E&P, and to the revision of the so called rough impacts inactive over 2011. Looking at more detail at the exploration and production. In the first quarter of 2012, in reported liquids and gas production of 1,674,000 barrel of oil equivalent per day, representing a small decrease from the first quarter of 2011, down by 10,000 BOE per day or 0.6%. Excluding price effects, which reduced Q1 production by 14,000 barrels of oil equivalent per day, compared to the year-end earlier quarter, the production for the first quarter was marginally higher, up by 0.2% driven by the ongoing recovery in Libyan production and start up ramp up of new fields in Australia, Egypt and United States. These positives offset negatives from the sale of minor assets and some minor unplanned production losses. The exploration and production division would have thought in an adjusted operating profit of €5.1 billion, increasing by €180 million or 24% on the back of a stronger oil and gas prices and the recovery in Libyan activities. In gas and power, overall volumes sold including consolidated and associated companies fell by 5.4% to 29.9 Bcf, decline is mainly due to weak demand and higher competitive pressure in Europe. In Italy, overall sales rose by 1.4% with higher demand from residential user and higher sales to the network balancing market more than compensating declining volumes sold to power generation and wholesalers. The gas and power division reported an adjusted operating profit of €1.5 billion, increasing by €546 million, or 57% from the first quarter of 2011. Read the rest of this transcript for free on seekingalpha.com