Vladimir Putin had a working meeting with Eni CEO Paolo Scaroni, which was also attended by Deputy Prime Minister Igor Sechin and Gazprom CEO Alexei Miller
15 january 2009
Minutes of the meeting's beginning:
Vladimir Putin: Mr Scaroni, I am happy to see in Moscow the head of one of Europe's largest companies, which is our long time and reliable partner.
Today I have talked with the Italian Prime Minister, Mr Silvio Berlusconi. Like many other European leaders, he is seriously worried about the suspension of Russian natural gas transit to Europe. Mr Berlusconi asked me to take all the necessary measures to resume transit, and said that we may discuss the issue with you today.
I am not going to delve into the problem's background. It is clear that ensuring transit is the responsibility of a transit country. We opened the tap on the pipe running into Ukraine, which everyone, including you, knows and which international observers have confirmed. But our Ukrainian partners have not resumed transit although we have asked them insistently to do so.
Specific technical conditions must be ensured for gas to transit via Ukraine to our European partners, which is the duty of the transit country. Judging by what our Ukrainian friends say and write in their documents, they are unable to do this now.
Today they have rejected one more request to transit Russian gas to Europe. Instead, they have dispatched several documents, asking that we supply "technical gas" for filling the export pipe through which our gas is supplied to Europe. Clearly, there should always be gas in an export pipe, working like a piston to push export gas through the pipe. If there is no technical gas in the pipe, this amounts to technical bungling bordering on crime.
However, we are not going to discuss this side of the problem now, and we will not look for the guilty party at this point. They have also requested additional amounts of gas to ensure the operation of compressor stations.
The amount exceeds 140 million cubic meters; they want an additional 1.56 billion cubic meters, to be supplied in the first quarter, which brings the total to 1.7 billion.
Ukraine has made us a strange offer - to turn over that gas into their ownership. Not sell it, mind you. I am not going to comment here on the absurdity of that offer, but we clearly should help Ukraine, help our Ukrainian friends. At the same time, we cannot shoulder all of the risk under such a major supply.
We are interested in delivering our natural gas to Europe. Gazprom is sustaining losses, which have already exceeded $1.1 billion. We know that our main partners are also suffering damages. But we must think above all about the people who are living in conditions of major shortage of energy in the countries that depend on our supplies. Whole economic sectors in some European countries are having big problems.
We must not look for the guilty party now, but do something to ensure gas transits. We propose that our main European partners share the transit risks with us. We could form an international consortium that would buy the required amount of gas for Ukraine from Gazprom and dispatch it to Ukraine for ensuring gas transit to Europe. We are making this proposal to you now, inviting you to take part in this consortium.
Paolo Scaroni (as translated): Mr Prime Minister, thank you for this offer. We have discussed a large part of that offer during our meeting with Mr Miller today. I think this is a constructive proposal, a new idea after all the attempts that have been made to resume transit. You know that Eni is the largest gas consumer in Europe and the primary client for the gas pipelines that run via Ukraine.
We will immediately consider the possibility of setting up such a consortium, and try to involve the European companies that use the gas supply systems in Ukraine. This must be done quickly.
Even though Italy is weathering the gas crisis quite well, the situation in other European countries, above all in the southeast, is dramatic.
I have talked with Mr Berlusconi two or three times today, and he has instructed me to meet your proposals halfway and take the necessary steps towards implementing them. Trust me, Mr Prime Minister, we will do our best.
Vladimir Putin: So, you see the proposal as promising?
Paolo Scaroni: I think this is an innovative proposal, because it may solve the problem of the "technical" gas and the gas necessary for fuel to transport the gas.
Besides, there is nothing political in the proposal. It is a purely technical and commercial proposal, without any political implications. It concerns relations between suppliers and clients, which is business pure and simple. This is the attitude we are trying to use here.
Vladimir Putin: I agree with you absolutely. There are no politics in this issue. Our Ukrainian friends have asked us to supply the necessary amount of gas for ensuring gas transit. It entails a major volume of gas and major outlays.
I repeat, let's share the costs and the risks, and deliver the gas to Ukraine without delay. Judging by the documents we have received, our Ukrainian partners have no other reasons to hinder the resumption of transit.
Thank you for your positive reaction. Let's discuss the details.