Missing cubic meters

Italian financial police searched Eni and its subsidiaries

Italy's largest oil and gas concern Eni and its director Paolo Scaroni (pictured) came under investigation by the country's financial police on suspicion of fraud. As it became known, searches and seizures of documents took place yesterday in the offices of Eni itself in Rome, its subsidiaries Italgas and Snam, as well as in small companies operating in the energy market, AEM and Arcalgas. As news agencies reported, the Milan prosecutor's office, on whose initiative the investigative measures were carried out, is studying the issues of accounting for gas that was sold on the market in 2003. Namely: the discrepancy between the company’s data on gas sales, provided as a report to the competent authorities, and the volumes contained in the receipts sent to consumers. According to Italian law, Eni's statement emphasizes, Mr. Scaroni's involvement in the investigation does not imply that he has committed a crime.

As you know, Mr. Scaroni has been working in his post since the summer of 2005, and therefore had reason to give an official comment on what was happening: “We are calm. Gas metering is always the focus of any company in this market, whether in Italy or abroad. As soon as I arrived at Eni, I instructed an international team of specialists to review the procedures and accounting mechanisms in the company.”

According to him, the problem lies in accounting for gas that never reaches the consumer, that is, in “the difference between the volumes purchased by Eni and sales on the market.” “This difference results in net losses for our company of several hundred million cubic meters of gas annually,” the head of the concern complained in a special statement. But at the same time, he noted that “the measurement of gas supplied to consumers occurs in strict accordance with the instructions of the regulatory authorities in the field of energy and gas and competent specialists from the Ministry of Economic Development.” Law enforcement agencies have so far refrained from commenting.

Eni has a monopoly on the Italian gas market. Last year, the company supplied 50.7 billion cubic meters, of which almost 25 billion cubic meters was gas purchased from Gazprom. In total, Eni sold over 89 billion cubic meters of gas in the markets of different countries.

According to news agencies, other high-ranking Italian businessmen targeted in this investigation include the head of Snam Rete Gas, Carlo Malacarne, and the chairman of the board of directors of Italgas, Giovanni Locanto. The financial police are also checking the activities of the head of the energy company AEM Milano, Giuliano Zuccoli, news agency sources in law enforcement agencies report, but Mr. Zuccoli himself said, reports Reuters, that he knows nothing about the investigation.

It is significant that Mr. Scaroni is not the first head of a large energy company in Europe to appear in an investigation into financial fraud. This year, French prosecutors questioned Total President Christophe de Margerie twice: the first time for several hours in the case of paying bribes to Iraqi officials in order to circumvent the oil-for-food program that was in effect in the late 90s, and the second time - two days in the case of bribery in obtaining a contract for the development of Iranian gas fields in 1997. There has been no word yet on the end of the investigation.

Alexey GRIVACHS