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Italy’s Eni invites Gazprom to join projects in North Africa

Italian oil and gas company Eni S.p.A. proposed on Thursday that Russian energy giant Gazprom join its North African projects, and pledged to present its plan for Russian assets bought from Yukos.

“Eni has offered Gazprom first-class assets from its North African portfolio,” CEO Paolo Scaroni said. He said the projects, which will be discussed later in the day as part of Italian Prime Minister Romano Prodi’s visit to Moscow, are related to small oil fields, which are also suitable for gas condensate production.

Gazprom is currently in talks with Eni and Italian electricity giant Enel on an asset swap, through which the state-controlled Russian company could gain power generating assets from both firms. The Italian companies each own 20% in Gazprom Neft, Gazprom’s oil production arm. Eni Senior Vice President Marco Alvera said that in the first quarter of 2008 the company will submit a plan for the operation of former Yukos assets which Eni’s subsidiary EniNefteGas acquired earlier this year. EniNefteGas is 60% owned by Eni and 40% by Enel.

The Yukos bankruptcy administrator announced earlier on Thursday that the oil company had formally ceased to exist following the completion of the liquidation process. Alvera said his company was fully aware of licensing commitments attached to the ex-Yukos assets. “The new development plan will be worked out in the Q1 of next year,” the official said, adding that the plan would be coordinated with Gazprom, which has option rights to these assets. Paolo Scaroni said his company’s investment will be around $630 million once Gazprom exercises its option agreements to buy stakes in the assets. He said the reserves of the assets are estimated at 5 billion barrels of oil equivalent. (