The Italian ENI opens an account in rubles to pay for gas “as a precautionary measure”

The Italian hydrocarbon company ENI, 30% controlled by the Italian Treasury, has begun the procedures to open an account in rubles at the Grazprom bank, as a “precautionary measure” and “Given the imminent end of the term for the payment foreseen in the next few days”, the company announced.

ENI has started the opening “of the two current accounts denominated K, one in euros and one in rubles, indicated by Gazprom Export in accordance with a unilateral claim to modify existing contractsin line with the new gas payment procedure mandated by the Russian Federation,” it said in a statement.

However, the Italian group clarifies that “he has long rejected these changes” and that “therefore, the opening of the accounts is temporary and without prejudice to the contractual rights of the company, which provide for the fulfillment of the payment obligation in euros”.

“This express reservation will also accompany the execution of the corresponding payments,” adds the company. Close sources told Efe a few days ago thate ENI intended to open a ruble account to meet the commitment to pay for Russian gas and that he was waiting to see if the European authorities made it clear with regulations that paying in rubles, as required by the Russian president, Vladimir Putin, is not allowed.

“The decision, shared with the Italian institutions, was taken in compliance with the framework of international sanctions and in the context of ongoing talks with Gazprom Export to expressly confirm the allocation to Gazprom Export itself of any possible associated costs or risks. to the different form of execution of the payment”, explained ENI in its note.

Italian Prime Minister Mario Draghi said last week in the United States – where he traveled to talk with President Joe Biden about the situation in Ukraine – that “most European importers” of Russian gas “have already opened their accounts in rubles” and assured that ENI would pay on time, although he did not specify whether it will do so in euros or rubles, and reiterated that the EU has not officially indicated what to do in this situation.

“On the one hand, to date, Gazprom Export and the competent Russian federal authorities have confirmed that the turnover (effectively received by ENI in the last few days in the contractually correct currency) and the corresponding payment by ENI will continue to be executed in euros, as provided in the contract”.

Impact on supplies

Also “that the operational activities of converting euros to rubles will be carried out by a special clearing agent operating on the Moscow Stock Exchange within 48 hours from the credit and without intervention of the Central Bank of Russia” and that “in the event of delays or technical impossibility to complete the conversion within the stipulated periods, it will not have any impact on the supplies”.

“On the other hand, the execution of payments in this way does not find for now no European regulatory provision that foresees prohibitions that directly affect the possibility of executing these operations”, adds the Italian company.

ENI stresses that the new procedure “It is not incompatible with the current sanctioning framework and its compliance occurs at the time of the transfer of euros.”

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“A failure to pay would expose ENI to both the risk of breach of the obligation to fulfill in good faith any contractual request of Gazprom Export imposed by its own authority, and the risk posed to Eni by non-compliance with sales commitments to customers in downstream markets in the event of a supply interruption,” he adds.

However, ENI “in the absence of future full, comprehensive and contractually substantiated responses from Gazprom Export, initiate international arbitration on the basis of Swedish law (as provided for in existing contracts) to resolve doubts regarding the contractual changes required by the new payment procedure and the correct allocation of costs and risks”.