MOSCOW. (Dr. Sergei Kolchin for RIA Novosti) - September saw new signs of Italy's interest in close energy partnership with Russia. Prime Minister Romano Prodi has said that Italy intends to buy assets of Gazprom and the issue has been discussed with President Vladimir Putin.
Prodi said the assets of the Russian state-owned gas monopoly were of priority significance for Italy.
This stand of the Italian leader is confirmed by the actions of the country's leading energy concerns and their unflagging interest in investment in Russia and acquisition of its production assets.
Enel SpA has announced its plan to invest 2-4 billion euros in Russia. It intends to buy a number of electric power plants and gas assets that would supply resources to them by the end of 2007.
Another Italian energy giant, ENI, hopes to sign a major partnership agreement with Gazprom in October 2006. ENI CEO Paolo Scaroni said he hoped the contract would be drawn up in the spirit of close and preferential partnership. As a result, Russian companies will get direct access to Italy's energy market in exchange for giving Italian companies access to oil and gas production in Russia.
Germany and Italy are two of the advance group of potential foreign investors in the Russian oil and gas sector, although some said the departure of Silvio Berlusconi, who had very close relations with Putin, would complicate cooperation in the sector. Happily, this did not happen. Economic considerations are apparently more important than the leaders' personal sympathy.
Some time ago, Italy was unnerved by the memorandum of understanding between Gazprom and Sonatrach, Algeria's state-owned oil and gas giant. This is not surprising, as gas accounts for more than 30% of Italy's energy balance. Imports cover about 90% of Italy's demand, and Russia and Algeria are its main gas suppliers. Besides, Italy is the second largest importer of Russian gas in Europe. It imported 22 billion cu m in 2005.
This is why Prodi said the signing of the Gazprom-Sonatrach memorandum highlighted the importance of attaining energy independence and elaborating a common EU energy policy in that sector.
Some time later Ugo Intini, deputy minister of foreign affairs, refuted allegations that the Italian government was concerned over the Russo-Algerian memorandum, possibly because Gazprom pledged to maintain stable gas deliveries to Italy.
As of now, Italy imports over 20 billion cu m of Russian gas and should increase imports to 29 billion by 2008. The long-standing ties between ENI and Gazprom facilitated the construction of the Blue Stream gas pipeline to Turkey across the bottom of the Black Sea. To guarantee the financing, construction and exploitation of the pipeline, the two companies created the Blue Stream Pipeline Company.
Russo-Italian oil relations are not as harmonious, although Italy is one of the largest importers of Russian oil in Europe. The delivery of oil from the traditional source, the Middle East, has become complicated, but Italy has decided to ponder alternative sources rather than import more Russian oil.
The latest Italian statements with regard to ENI's plans to buy into Gazprom came as a surprise, because this runs contrary to the energy giant's policy. It is difficult to imagine Gazprom, which is buying up assets and licenses in the gas, oil and energy sectors, selling its assets to Italy. Gazprom's strategy in relations with foreign investors stipulates asset swaps, and therefore it may negotiate swapping its subsidiaries.
Enel's plans look more realistic. It intends to strengthen its foothold in Russia by buying assets in electricity generation and several companies connected with Gazprom, notably Arcticgas. Unified Energy Systems of Russia (UES) CEO Anatoly Chubais compared the attraction of Enel to Russia to the alliance of TNK and BP.
Enel's expansion in the Russian energy sector is not limited to the acquisition of generating assets and grids (it has bought a 45% stake in power supplier Rusenergosbyt). It is also involved in oil and gas producing projects. Enel, which has Italy's second largest gas retail network, is wary of negotiating an asset swap with Gazprom. However, it has outlined its swap possibilities outside Italy.
By and large, Russian-Italian oil and gas relations are moving away from ordinary dialogue and trade to a new stage of partnership based on mutual management of assets and advance to new markets.
Dr. Sergei Kolchin is senior research fellow of the Institute of Economics of the Russian Academy of Sciences.
The opinions expressed in this article are those of the author and may not necessarily represent the opinions of the editorial board.
