ENI is an integrated oil and gas company, so the relevant risk profile is materially more cyclical than a regulated utility. That increases the value of balance-sheet flexibility, but the 2022 starting point is strong.

Key considerations:

- **Existing hybrid base:** ENI already has perpetual subordinated bonds in equity, with net issues of about **€3.0bn in 2020** and **€2.0bn in 2021**, implying roughly **€5bn** outstanding before issuance costs/coupon movements. This means ENI is already using hybrids as part of its capital structure.
- **Capital base and S&P cap:** At year-end 2022, equity was **€55.2bn**. Gross financial debt including borrowings and leases was about **€31.9bn**. Total adjusted capital is therefore roughly **€87bn** before further adjustments, so the 15% hybrid equity-credit cap would be around **€13bn**. Existing hybrids of about €5bn are already near **5.5%-6%** of adjusted capital.
- **Leverage and liquidity:** Balance sheet metrics improved sharply in 2022. Cash and equivalents were **€10.2bn**, current financial assets at FVTPL were **€8.3bn**, and other current financial assets were **€1.5bn**, giving very substantial liquidity. Net debt is modest relative to the scale of the group and 2022 earnings.
- **Cash generation:** Operating cash flow was **€17.5bn**, comfortably covering investing cash outflow of **€7.0bn**. Even after dividends, buybacks, lease payments, and debt repayments, cash increased by about **€1.9bn**. This does not indicate urgent funding stress.
- **Profitability and credit headroom:** 2022 was exceptionally strong for ENI: operating profit **€17.5bn**, profit before tax **€22.0bn**, and net profit **€14.0bn**. While oil and gas earnings are cyclical and 2020 showed a large loss, the current credit position is not under severe pressure.
- **Funding/refinancing needs:** Current borrowings and current portion of long-term borrowings total roughly **€7.5bn**, but liquidity is more than adequate. Long-term borrowings fell from **€23.7bn** to **€19.4bn**, and ENI repaid far more noncurrent borrowings than it raised in 2022, suggesting no acute refinancing need.
- **Cost environment:** Hybrid issuance in 2022/2023 would be meaningfully more expensive than the prior ultra-low-rate years. Euro swap rates rose sharply, and subordinated spreads also widened. The cost of new hybrids would likely increase ENI’s average cost of capital, so additional issuance should be selective rather than maximized.
- **Capital allocation pressure:** ENI still has sizeable capex and shareholder distributions, including **€7.7bn** PPE capex, **€3.0bn** dividends, and **€2.4bn** share buybacks in 2022. This supports maintaining some hybrid capacity, but not a full-cap issuance strategy.

Overall, ENI already has a meaningful hybrid layer and does not appear to need aggressive additional hybrid issuance to preserve investment-grade metrics over the next 18 months. However, given the cyclicality of oil and gas, ongoing capex, shareholder distributions, and the benefit of maintaining rating flexibility, a moderate target is justified. The best fit is **7.5% of total adjusted capital**: enough to recognize the existing hybrid base and allow limited incremental issuance, but well below the 15% cap because liquidity and leverage are currently strong and new hybrid funding would be costly.

<answer>7.5%</answer>