Eni’s Dispute with Gazprom over South Stream

wooden_head051209.jpgInteresting that Berlusconi and Putin are signing the South Stream deal in Crimea – perhaps a little reminder of who’s boss.  Eni, however, is a little surprised that after all they’ve done for Russia (including selling back Gazpromneft, which was purchased in a Yukos auction), that they should get such a raw deal.

Italian Prime Minister Silvio Berlusconi is scheduled to meet his Russian counterpart, Vladimir Putin, Friday in Crimea and may sign an agreement on South Stream.

A dispute has erupted between Eni and Russian state-controlled Gazprom over the role the Italian oil company will play in the South Stream gas pipeline, Reuters said last week, citing an unidentified person within the Italian government.

The person said Eni wants to be able to market gas from the pipeline in the countries the pipeline will pass through but that Gazprom was only offering the right to bring gas into Italy and a role in managing the pipeline, Reuters wrote.

South Stream is a project that aims to carry Russian and Caspian gas to Western Europe via a pipeline under the Black Sea and landing in Bulgaria, so bypassing Ukraine.