The long-standing Eni-Russia relationship dates back to late 1957, when Eni was enjoying a period of rapid expansion and sought new international partnerships and contacts. In this vein, Eni first engaged with the Soviet Union when in 1960, when company head Enrico Mattei signed an agreement to import Russian crude oil in exchange for the export of Italian machinery and technology, forming the basis for a long-standing collaboration between Italy and Russia.
A contract signed between Eni and Gazprom in December 1969 gave Italy the chance to diversify its energy sources and to improve its international competitiveness while giving the USSR, through the supply of Italian technology, the opportunity to develop and modernize its own industrial system.
Renewals of the natural gas contracts in 1975, 1986 and 1996 increased exchanges of energy supplies, goods and equipment between Russia and Italy while energy transactions intensified as an expansive network of pipelines developed using cutting-edge Italian technology. Synergies between the two partners were further augmented through strengthened commercial relations and the development of a wide-ranging technical and scientific alliance.
In the late 1990s the Eni and Gazprom partnership saw the development of the Blue Stream pipeline that carries gas from Russia to Europe via Turkey and the Black Sea. The 1998 agreement between Eni and Gazprom signaled a new phase of collaboration between the two partners and saw a shift in emphasis from technical-commercial relations to entrepreneurial-industrial relations. Jointly-owned companies like NeftoAgip - which opened the first western-owned petrol station in Moscow - were set up to operate in both the upstream and downstream sectors.
The new millennium was a turning point in relations between Eni and Gazprom, when in November 2006 the two companies signed a historic strategic agreement in Moscow establishing an international alliance for joint upstream, midstream and downstream gas projects and technological cooperation. The agreement also extended gas supply agreements through to 2035, cementing Eni’s role as Gazprom’s leading client globally.
Building on this strategic agreement, a memorandum of understanding was signed in 2007 for the construction of the South Stream pipeline system connecting Russia and the European Union through the Black Sea.
Eni-Russian collaboration, now firmly established, has begun looking more to the future, extending to joint initiatives to cultural and social fields as well as focusing on the training of qualified oil and gas staff.
Last year saw further developments and greater consolidation of relations between Eni and Russia, achieving excellent results, not only due to Eni’s world-class expertise, but also thanks to a sense of mutual respect and partnership that has always bound our two companies together.
In March, we examined the current and future prospects for further collaboration in the energy sector with Gazprom, focusing on conditions for the supply of Russian gas to Italy along with the execution of a plan to launch the construction of the South Stream pipeline by December 2012. We are pleased to say that the project is advancing as agreed and we have reached an understanding for the review of gas supply contracts. This is an important step in our strategic partnership, which enables us to strengthen our commercial relations, contributing to the increased competitiveness of Russian gas in Europe and strengthening the security of supplies.
For the first time in the company’s history, Eni launched the production of hydrocarbons in the Russian Federation, more precisely in the Samburskoye field, in the Yamal-Nenets autonomous region of Western Siberia. Opening in April, the field is operated by Severenergia, a company in which we own a 30 percent share. The project represents an important step forward in the growth of Eni in Russia and is among important projects on the cards, such as our intention to transform the Yamal peninsula into a leading energy hub with an investment of around $3 billion. Consumers will benefit from the increased production, both in terms of lower prices and improved supply security.
Additionally, we will partner with Rosneft in a vitally important strategic cooperation project that will see us involved in oil and gas exploration in Russia for many years. The deal provides for the joint development of exploration licenses in Russian offshore energy deposits in the Barents Sea and the Black Sea, as well as the exchange of technologies and staff and Rosneft’s acquisition of a part of Eni’s share in international projects. The exchange of technology between the two companies is a key element of the strategic partnership and Eni provides the joint venture with advanced technological know-how and offshore experience gained in Norway and elsewhere. The deal has introduced an exchange program involving staff at all levels in order to strengthen relations between the two companies and enable the sharing of administrative experience. Furthermore, the strategic collaboration between Eni and Rosneft will also be extended outside Russia, with collaboration taking place in projects from North Africa, Alaska, Northern Europe and a number of other countries and projects to be defined in the coming months.
These success stories are the result of a relationship of trust based on a shared journey with our Russian partners that has resulted in Eni being a leader in the European gas market. Bonds of friendship and mutual respect tie Eni to Russia, a country that we have grown to know and love over the many years of collaboration. The relationship between Eni and Russia reflects over 40 years of partnership and success. It is on this cooperation, sharing and exchange that our solid relationship rests and it is with a sense of mutual opportunity that we turn to the future, with a view to strengthening our partnership further.
Paolo Scaroni is the current CEO of Italian energy company Eni. A graduate of Milan's Bocconi University and the Columbia Business School, Scaroni has served at executive positions in a number of companies in the industrial and energy sectors such as Chevron Corportation, Techint, and Pilkington. In 2002 he became CEO of Italy's largest electricity company, Enel before going on to take up the same position at Eni in 2006.
Post new comment