Identifier
Created
Classification
Origin
07ROME563
2007-03-21 16:46:00
UNCLASSIFIED
Embassy Rome
Cable title:  

ITALY-RUSSIA COMMERCIAL TIES DEEPEN ON MARGINS OF

Tags:  ECON ETRD ENRG RU IT 
pdf how-to read a cable
VZCZCXRO1582
PP RUEHAG RUEHDF RUEHIK RUEHLZ RUEHROV
DE RUEHRO #0563/01 0801646
ZNR UUUUU ZZH
P 211646Z MAR 07
FM AMEMBASSY ROME
TO RUEHC/SECSTATE WASHDC PRIORITY 7461
INFO RUCNMEM/EU MEMBER STATES COLLECTIVE PRIORITY
RUEHMO/AMEMBASSY MOSCOW PRIORITY 4328
UNCLAS SECTION 01 OF 02 ROME 000563 

SIPDIS

SIPDIS

E.O. 12958: N/A
TAGS: ECON ETRD ENRG RU IT
SUBJECT: ITALY-RUSSIA COMMERCIAL TIES DEEPEN ON MARGINS OF
PRODI-PUTIN MEETINGS

REF: A. ROME 535


B. 06 ROME 2257

UNCLAS SECTION 01 OF 02 ROME 000563

SIPDIS

SIPDIS

E.O. 12958: N/A
TAGS: ECON ETRD ENRG RU IT
SUBJECT: ITALY-RUSSIA COMMERCIAL TIES DEEPEN ON MARGINS OF
PRODI-PUTIN MEETINGS

REF: A. ROME 535


B. 06 ROME 2257


1. (U) Summary. Russian and Italian companies signed a
number of agreements on the margins of the March 14 bilateral
meeting between PM Prodi and Russian President Putin. The
agreements, concentrated in the areas of energy and
transportation, provide "proof of the strategic partnership
between Italy and Russia," according to PM Prodi. End
summary.

Energy
--------------


2. (U) For energy-watchers, the anticipated highlight of the
Bari summit was to be the signing of an document by the CEOs
of Eni, the Italian oil and gas parastatal, and Gazprom,
detailing the agreement reached last year in which Gazprom
acquired the right to sell up to three bcm/year of natural
gas directly to Italian consumers. In exchange for giving
Gazprom direct access to the Italian market, Eni was to
acquire exploration and development rights to Russian natural
gas fields, from which Italy currently imports 30 percent of
its natural gas. We understand that negotiations regarding
Eni's access to Russian natural gas fields are ongoing at the
technical level, and quote Eni CEO Paolo Scaroni as saying
that he did not attend the Bari meetings because "there
wasn't an agreement to sign."


3. (U) Italy's electricity parastatal, ENEL, signed a
memorandum of understanding with Russia's Atomic Energy
Agency to assist in the development of nuclear power projects
in Russia. (Note. A 1987 referendum banned nuclear power
generation in Italy. Since 1987, ENEL has entered into
several agreements to develop nuclear power facilities in
other countries. Energy experts have told us that Italy will
have to allow nuclear generation to increase its energy
self-sufficiency, and that these agreements are ENEL's way of
maintaining expertise in nuclear energy. End Note.)


4. (U) In the area of renewable energy, Foggia University
signed an agreement with Renova, a Russian energy company, to
cooperate in the research and development of alternative
energy sources.

Transportation
--------------


5. (U) Finmeccanica subsidiaries signed two agreements in
the transportation sector. The first agreement, between
Finmeccanica's Alenia subsidiary and Sukhoi, commits Alenia
to invest 250 million euro in a joint venture with Sukhoi to
develop and produce the "Superjet 100," a regional jet
capable of carrying up to 100 passengers. Sukhoi officials
anticipate as many as 1,000 of the airplanes will be built
over the 20-year life of the project. PM Prodi singled out
the Alenia-Sukhoi deal in a press conference and said, "it is
the last opportunity for Italy and Russia to become leading
players in the civil aircraft market."


6. (U) Finmeccanica and Ferrovia Dello Stato (the Italian
national rail operator) signed an agreement with the Russian
railways monopoly to modernize the Russian train system to
include satellite technology, improve the security of the
rail system, build high-speed rail links along the Black Sea
coast and between Moscow and St. Petersburg, and provide
training. (Note. We understand the reference to satellite
technology to mean the use of GPS or a similar technology to
track trains and operate track switches. End note.)

Banking
--------------


7. (U) Russia's Vnesheconombank and Italy's Mediobank signed
a 122 million euro credit agreement for the construction of a
logistics terminal near Moscow. Mediobank also signed a 200
million euro credit agreement with the Vneshtorgbank foreign
trade bank to facilitate trade between Russia and Italy.
Finally, Banca Intesa Sanpaolo reached a 100 million euro
credit agreement with Vneshtorgbank to finance Italian
exports of household and durable goods to Russia.

Comment
--------------


8. (U) Many of these agreements, including those involving
Alenia and Eni, are between companies in which the Italian
and Russian government have a controlling interest; and the
accords have been in discussion for some time. Over the past
year, Italy has been making a concerted effort to expand its
access to Russian energy sources. GOI and energy industry

ROME 00000563 002 OF 002


officials have told us privately and publicly that Italy's
short-term energy security can only be guaranteed by ready
access to Russian natural gas supplies. The Eni-Gazprom
deal, still being negotiated, reflects this understanding of
Italy's energy position. We see ENEL's agreement with the
Russian Atomic Energy Agency as a means through which to
maintain Italian expertise in nuclear power. Energy analysts
have told us that in the long run, Italy, which does not have
significant oil or gas reserves, cannot remain entirely
dependent on imported oil and gas, and will have to return to
nuclear power. ENEL's investment in Russia is consistent
with their analysis. End comment.
SPOGLI