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Energy relations dominate at Prodi-Putin summit
B y Dario Thuburn
AFP
BARI, Italy
Petroleumworld.com 03 15 07Energy relations took centre stage on Wednesday as Russian President Vladimir Putin met Italian Prime Minister Romano Prodi for a summit aimed at boosting business ties between Moscow and Rome.
Government officials and business leaders from the two countries signed agreements in the fields of energy, aerospace and banking during talks in the 12th-century castle of Svevo in the southern Italian city of Bari.
After the meeting, Putin and Prodi talked up an agreement between Italian energy company ENI and Russian gas giant Gazprom as a model for future business partnerships between Russia and the European Union.
Putin stressed that such energy deals must be "mutually beneficial," while Prodi emphasised that Europe and Russia were now dependent on each other in energy terms.
Russia is the world's largest natural gas producer, and Italy currently depends on Moscow for around a third of its gas imports, a figure that is rising rapidly.
The ENI-Gazprom deal would see the Russian company selling some three billion cubic metres of gas per year directly to Italian consumers starting from next month.
But the agreement has been held up in part because ENI is still looking to secure access to reserves in Russia amid a business climate in the country that foreign investors complain is skewed towards state companies.
Putin welcomed the prospect of ENI investment in Russia on Wednesday. But Prodi sounded a more cautious note, saying: "The agreement is now being completed with technical details that are not simple."
Together with Italian power company ENEL, ENI is also looking to buy assets belonging to bankrupt Russian oil group Yukos -- a bid that Italian daily Corriere della Sera called "controversial" in an editorial on Wednesday.
Yukos was dismembered in a series of investigations steered by the Kremlin that were seen by critics as a political attack on former CEO Mikhail Khodorkovsky, a Putin opponent.
Among other accords signed at the summit in Bari, Italian aerospace firm Alenia and Russian planemaker Sukhoi agreed to jointly build and sell a new medium-range jet, the Superjet-100.
"It's a huge market. It will be a model project. ... We understand that this is a high-competition market, but Russia and Italy can win," Prodi said of the aerospace deal.
There was also a partnership deal signed between ENEL and Russia's nuclear energy agency for cooperation on projects in central and eastern Europe, as well as several banking agreements worth a total of 500 million euros.
Trade turnover between Russia and Italy amounted to 30.8 billion dollars (23.3 billion euros) in 2006, and Italy is now Russia's biggest trade partner after Germany and China.
Some circles in Italy have been critical of the Prodi government for failing to address human rights problems and a perceived rollback of democracy in Russia, and for focusing instead on doing business with the country.
Prodi appeared to reject the criticism, saying the two leaders had talked about human rights during their meeting. "Taking into account the sovereignty of every country, no one will ignore human rights being infringed," Prodi said.
The Bari summit comes on the second and final day of Putin's visit to Italy.
At their talks, Putin and Prodi also discussed the controversy over Iran's nuclear programme, the future status of Kosovo and the security situation in the Middle East.
During his stay in Bari, Putin also visited a church in the city that is reputed to hold the remains of Saint Nicholas, a saint deeply revered by Catholics and Russian Orthodox faithful.Putin is set to travel to Athens later Wednesday for the signing of a long-awaited agreement on Thursday to build a pipeline through Bulgaria and Greece that will pump Russian oil from the Black Sea to the Mediterranean.
AFP 14 1719 GMT 03 07
Copyright© 2007 AFP. All Rights Reserved.
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