The offer, which Prodi remarked was flattering but that he intended to reject, was made days before he was to step down as prime minister after his government's defeat this month to the media magnate Silvio Berlusconi. Alexei Miller, the Gazprom chief executive, made the offer in Rome where he met with Prodi and executives from Eni, the Italian energy group.

Silvio Sircana, the spokesman for Prodi, who is a former president of the European Commission, the executive arm of the European Union, said Prodi "had decided not to accept appointments of this kind."

Still, analysts said Gazprom's attempts to entice Prodi onto the board of a major energy project showed its determination to match its ever growing energy power in Europe with political influence.

"Russia is doing an excellent job in achieving its strategic goals in Western Europe," said Pavol Demes, director of the Transatlantic Center for Central and Eastern Europe, which is part of the German Marshall Fund of the United States. "Russia is capitalizing on the inability of the EU to come up with a clear energy policy in a way that combines its ever stronger energy might with political clout."

Russia already supplies more than a quarter of European energy needs. Over 70 percent of its total revenue is earned by exports, which account for more than 30 percent of its total output.

The offer to Prodi was not the first time that Gazprom has approached an outgoing political leader. In late 2005, soon after Gerhard Schröder had been defeated as German chancellor by the conservative leader Angela Merkel, he was almost immediately appointed to lead the new Russian-German Nord Stream consortium.

This consortium, opposed by Poland and the Baltic states because they claimed it would increase European dependence on Russian natural gas, planned to build a pipeline under the Baltic Sea. The principle was similar to Gazprom's planned South Stream project pipeline, which will run under the Black Sea. Once complete, South Stream would have a capacity of around 30 billion cubic meters, or 1 trillion cubic feet, of natural gas a year and would cost about €10 billion, or $15.6 billion, according to Gazprom and Eni.

Both projects are part of a Russian goal of sending gas directly to northwestern and southeastern Europe to reduce its dependence on the transit countries of Ukraine and Poland.

At the time, Schröder's appointment in 2005 was welcomed by the energy industry - as was Gazprom's offer to Prodi.

Paolo Scaroni, chief executive of Eni, who also met with Miller over lunch in Rome, said Prodi would make "an excellent choice."

"Putting a man who has been president of the European Commission in charge of the infrastructure that will secure Europe's energy supply is really a great idea," Scaroni said.

Prodi and Schröder, besides being politicians, have built close contacts with the leading energy companies in their respective countries.

Prodi is close to Eni, which this month clinched a deal with Gazprom to join forces to pipe natural gas from Libya across the Mediterranean to Southern Europe. That decision capped several years of ever close ties between Prodi and Colonel Muammar el-Qaddafi.

When Prodi was president of the European Commission, he invited the Libyan leader to Brussels in 2004, his first trip to Europe for 15 years. Prodi, who praised Qaddafi's decision to renounce weapons of mass destruction, even broke with convention by personally meeting Qaddafi at the airport.

Before then, in November 2006, after tough negotiations, Gazprom and Eni reached a deal whereby Gazprom would sell three billion cubic meters of gas annually and directly to Italian consumers. In return, Italy received guaranteed gas supplies until 2035 and would also participate in the development of Russian energy assets, according to statements issued by both sides at the time. Prodi hailed the relationship between Gazprom and Eni as "a model" for bilateral relations.

Prodi came to the rescue of Eni last October when he interceded on the company's behalf after the authorities in Kazakhstan threatened to fine Eni and even abrogate a 1997 oil development contract because of delays and soaring estimates of start-up costs in the Kashagan oil field in the Caspian Sea. Prodi personally visited the Kazakh president, Nursultan Nazarbaev, to salvage the contract.

Schröder, too, strongly supported Wintershall, the energy division of BASF, the German chemicals group, and E.ON Ruhrgas, a leading energy company, joining Gazprom in building Nord Stream. Through Wintershall, Gazprom has established a foothold in Germany, entering the downstream market by selling gas to German consumers. In return, Wintershall is involved in exploration and production in the Yuzhno-Russkoye gas field.

Besides close business ties, Schröder and Prodi have also built up close personal relationships with President Vladimir Putin of Russia. Schröder has staunchly defended Putin as an "impeccable democrat" and Schröder adopted a Russian daughter in 2004 and played host to Putin in his private home in Hannover, Germany. Prodi has regularly entertained Putin in Italy.

By Judy Dempsey

Source >  NYT | april 28 2008