Italian Government Presses for Russian Contract Renegotiations

Italian Minister for Industry Corrado Passera has said that Italy will back Eni in its renegotiation efforts with Russian supplier Gazprom.

Speaking at a press conference yesterday, Minister Passera said that the Italian government will support Eni in whatever decision it makes on its efforts to revise its current gas contracts with the Russian major.

"I clearly told Eni to do what is possible to go to arbitration, but it is a company choice," the Dow Jones news agency reports him as saying yesterday.

Last week, CEO of Eni Paolo Scaroni said that the company would be seeking to move away from the format of its current contracts with Gazprom, saying it no longer wished to be required to "take or pay" for gas from Russia, instead wishing to pay per use of gas.

Under the take-or-pay contracts, Eni is required to either take all of the gas covered by the terms of the contract or else pay a penalty for not offtaking the gas. Last week, Mr. Scaroni said that Eni would not be renewing these contracts with Gazprom and would be seeking to renegotiate on current contracts of this type.

Yesterday, Minister Passera said that this type of contract was unreasonable, imposing heavy costs on companies.

"Take-or-pay contracts need to be reviewed... you can't ask private companies to support excessive costs," Reuters reports him as saying.