money into Iran, but must maintain good relations with the country because it is still owed $1.4 billion by the Islamic Republic.
ENI said the Iranian payments—in the form of crude oil—will be completed by 2014 and ENI will then sever its links with the country.
News reports in recent weeks have said that ENI was the only major European oil firm still buying crude oil from Iran and that it was financing its purchases through China.
But ENI chief executive Paolo Scaroni last week said that was false. He said ENI was not financing any purchases of Iranian crude and wasn’t buying any Iranian crude. He said the crude was flowing to ENI as the payback for ENI’s now-completed development of two Iranian oilfields.
Like all oil contractors in Iran, ENI signed “buyback” contracts with Iran. Under those contracts, a foreign firm puts up the capital to develop a project. When it is completed, the foreign firm receives crude oil from the field as payback for its investment and toward an agreed-upon profit.
“We signed two contracts in 2000 and 2001 to develop two fields in Iran,” Scaroni said.
A US diplomatic cable published by Wikileaks last week quoted ENI officials as saying ENI invested $3 billion in Iran under those contracts and is now being repaid. It said $1.4 billion remained to be repaid and that should be completed by early 2014.
The cable said ENI officials have passed up other opportunities to invest in Iran.
A few other European firms are believed still buying Iranian crude. The only known European purchaser of Iranian crude is Saras, an Italian refiner. Last month, Saras said transactions with Iran had become more difficult as banks are reluctant to handle any business with Iran. But Saras did not say it would halt its purchases of Iranian crude.
In Iran, PressTV, the English-language television outlet of the Iranian state, fudged in quoting Scaroni’s remarks to leave the impression that ENI was continuing to do with business with Iran. The PressTV headline said, “Italy’s ENI to keep Iran crude imports.”
