ROME: The chief executive of Italy’s largest oil and gas company may be feeling US pressure on Iran, but you wouldn’t know it from talking to him.
Eni’s Paolo Scaroni is one of the Italian businessmen who, far from rethinking operations in Iran, says he is considering further deepening investment there.
This is despite a US-led campaign to use economic sanctions to isolate Iran over its nuclear programme, and new legislation before the US Congress meant to encourage “disinvestment” in foreign companies which profit in Iran’s energy sector.
“I intend to respect Italian laws, not the American ones,” Scaroni told reporters, when asked if he felt US pressure. He quipped at an earlier press event: “You don’t find oil in Switzerland.”
Italian Prime Minister Romano Prodi’s government has spoken strongly against Iran’s nuclear ambitions in public, voting for UN sanctions and supporting UN deadlines for Iran to stop nuclear enrichment.
But Washington wants Rome to send a stronger message to its corporations and banks about the risks of doing business in Iran, a senior US official told the news agency. President George Bush, who visits Italy this week, is calling for the international community to “speak with one voice” on Iran.
“It is one of the most critical issues in terms of our economic engagement with the Italians,” the US official, speaking in Rome, told the news group.
EXPORT CREDITS: Italy is one of Iran’s largest trading partners, thanks to companies like Eni, which this year celebrates its 50th anniversary in Iran. Bilateral commerce grew nearly 10 per cent last year to $7.66 billion.
While the US-led campaign is expected to discourage new entrants, established European firms have a lot to lose.
Even the Italian state’s export credit agency, known as SACE, has 4.1 billion euros at risk in Iran.
That’s about 15 per cent of all its exposure worldwide, and SACE’s highest concentration of risk anywhere, according to data it provided to the agency.
SACE, citing official data, said there has also been an increase in requests by Italians looking to invest in Iran.
“The Italians are so very exposed,” the US official said.
Beyond a public posture against investing in Iran, he said Rome needed “more diligence in credit policy”.
But things are changing, SACE responded. It also provided the news agency with data showing it had slashed its Iran portfolio by more than $1.35 billion since 2004.
Further restricting export credits may be at the heart of the next threatened round of economic sanctions. The US also wants international banks to stay away from Iran.
A senior Italian Central Bank official said in an interview that his office has, starting in December, been privately warning banks about the growing risks associated with Iran.
“Several versions have been issued starting in December 2006 and then afterwards. These are notes kept private for the banks, in reality, but their contents are what I described,” Central Bank’s Deputy Director General Giovanni Carosio told reporters.
BANK SEPAH: In an interview with the news bureau, Iran’s Ambassador to Rome, Abolfazl Zohrehvand, played down any turbulence in bilateral ties caused by international sanctions.
He also said economic ties were historically strong, and remained that way despite the international political climate.
The American Enterprise Institute, a conservative US think tank, listed Italy in May as one of the top four investors in Iran along with France, China and Germany.
Still, the most recent UN sanctions prompted Italy to take over control of the Rome branch of Iran’s state-owned Bank Sepah — and Zohrehvand criticised Rome’s handling of the operation as overly aggressive. But Carosio defended the move.
“The information I have is that similar measures were taken at (Sepah) branches in France and Germany,” Carosio said.
The US Treasury says Sepah is a proliferator of weapons of mass destruction that provides Iran with weapons technology and materials. The bank denies this.
The Sepah takeover was only a diplomatic hiccup, but may be a sign of things to come.
Scaroni and others are watching to see how closely Italy, a proponent of multilateral bodies like the United Nations and the European Union, follows the US line.
Scaroni said Eni was looking at developing a gas field in Iran, but acknowledged at a recent press event that Rome’s position in the coming weeks and months was a factor.
“We’ll also look at Iran’s international political situation to be sure that we take actions compatible with what our country, and possibly the European Union, should consider feasible,” Scaroni said.—Reuters
