IRAN SOLICITS ENI INVESTMENT IN AZADEGAN AND SOUTH

S E C R E T ROME 000069 SIPDIS NOFORN SIPDIS E.O. 12958: DECL: 01/10/2027 TAGS: ETTC EPET ENRG PREL IR IT SUBJECT: IRAN SOLICITS ENI INVESTMENT IN AZADEGAN AND SOUTH PARS OIL FIELDS REF: A. 06 ROME 3159 ¶B. 06 STATE 179840 ¶C. 06 ROME 452 Classified By: Ambassador Ronald P. Spogli for reasons 1.4 (b) and (d) ¶1. (U) This is an action request. Please see paragraph 5. ¶2. (S/NF) Summary. Eni CEO Paolo Scaroni told the Ambassador that the Iranian Energy Minister has offered Eni investment opportunities in Iran's South Pars and Azadegan oil fields. Scaroni said Eni is interested in additional investment in Iran so long as there are no multilateral sanctions against Iran in effect, Iran pays money owed Eni under existing contracts, and the investments are structured so that Eni's return is based on world oil and gas prices. The Ambassador made clear USG opposition to any investment that supports the current Iranian government. Scaroni will be in Washington February four and five and is willing to meet with Washington officials to discuss Eni's interest in Iran. End Summary. ¶3. (S/NF) Paolo Scaroni, CEO of Eni, the oil and gas parastatal 30 percent owned by the GOI, met with the Ambassador January 9 to discuss possible additional Eni investments in Iran. Scaroni said that during a meeting on the margins of an OPEC conference, the Iranian Energy Minister offered Eni investment opportunities in the South Pars and Azadegan oil fields. (Note: As reported ref C, Eni has invested 2.5 billion dollars in Iran since the 1950's, and has a 60 percent interest in phases four and five of the South Pars gas field. End note.) Scaroni said he told the Energy Minister Eni would be interested in additional investment in Iran if (i) Eni is paid the "hundreds of millions" owed it by the National Iranian Oil Company (NIOC) under existing contracts, (ii) the investments are structured so that Eni's return would be based on world oil/gas prices, not a set amount per unit produced; and (iii) no international sanctions against Iran are in place. ¶4. (S/NF) Scaroni said he has briefed PM Prodi and FM D'Alema on Iran's offer, adding that Eni wants to be transparent and open with the USG as it considers the Iranian offer. He noted that Iran is the only viable alternative to Russia for meeting Europe's natural gas needs. The Ambassador told Scaroni that the USG opposes commercial activities with Iran that strengthen the regime's hand. Scaroni mentioned that he would be in Washington February 4-5 to participate in an Aspen Institute forum on energy and energy security and agreed with the Ambassador's suggestion that he should meet with USG officials to discuss Iran's proposal to Eni ¶5. (S/NF) Comment and action request. Scaroni's February trip to Washington provides us with an excellent opportunity to make clear to Eni the consequences of pursuing additional investments in Iran's energy sector. Action request: Post requests Department guidance on the availability of senior USG officials to meet with Scaroni on February four or five. Embassy POC for coordination with Scaroni's office is Energy Officer David Whiting XXXXXXXXXXXX End comment and action requested. SPOGLI