VZCZCXRO7036
PP RUEHBC RUEHDE RUEHKUK
DE RUEHRO #2156/01 2131307
ZNR UUUUU ZZH
P 011307Z AUG 06
FM AMEMBASSY ROME
TO RUEHC/SECSTATE WASHDC PRIORITY 5508
INFO RUEATRS/DEPT OF TREASURY WASHDC PRIORITY
RUCPDOC/DEPT OF COMMERCE WASHDC PRIORITY
RUCNIRA/IRAN COLLECTIVE
RUEHFL/AMCONSUL FLORENCE 1609
RUEHMIL/AMCONSUL MILAN 7441
RUEHNP/AMCONSUL NAPLES 1703

UNCLAS SECTION 01 OF 03 ROME 002156 
 
SIPDIS 
 
SIPDIS 
 
E.O. 12958: N/A 
TAGS: ECON ETRD EFIN IR IT
SUBJECT: ITALY'S COMMERCIAL AND BUSINESS PRESENCE IN IRAN 
 
REF: A. ROME 2034 
     ¶B. ROME 1876 
     ¶C. JUNE 22 2006 SIPRNET REPORT 
     ¶D. ROME 452 
 
ROME 00002156  001.2 OF 003 
 
 
Introduction 
------------ 
 
¶1.  (U) Total two-way trade between Italy and Iran reached 
5.17 billion euros in 2005, making Italy Iran's second 
biggest trade partner in the EU in eurodollar terms.  Italian 
companies also have an active presence in many sectors of the 
Iranian economy.  Paragraph 3 lists companies with 
investments, specific on-going projects, or representative 
offices in Iran.  This list is derived from the Ministry of 
Trade, which requires all Italian companies "doing business" 
with Iran to register with the Ministry.  We have also drawn 
from company information found on the internet to provide a 
description of a company's business activities.  The 
paragraph 3 list also includes Italian banks.  For further 
information on Italy's financial and banking relationship 
with Iran, please see ref B. 
 
¶2.  (U) Italy has at least 433.2 million euros in foreign 
direct investment in Iran as of December 31, 2004.  However, 
that figure, in our view, is vastly understated.  The figure 
does not take into account foreign direct investment through 
a service contract mechanism, whereby a firm can invest in, 
for example, the oil sector, but only by relinquishing the 
title to the infrastructure the firm builds, and only for the 
promise of a return through downstream oil flow proceeds. 
For example, ENI, Italy's oil and gas parastatal, reports it 
has invested 2.5 billion euros over a period of several 
decades.  As you can see, this figure of 2.5 billion euros is 
not included in Italy's official foreign direct investment 
figure (433.2 million euros). 
 
¶3.  (U) Italian Commercial Presence in Iran 2005. 
 
Associazione Operatori Italiani in Iran: Association of 
Italian workers in Iran; not a company 
 
Alcatel Italia S.p.A.: Providers of telecommunication 
equipment (broadband DSL) 
 
Alitalia S.p.A.: Airline operators 
 
Alstom Power Italia S.p.A.: Design and construction in 
electrical engineering 
 
Ansaldo Energia: Supply and start-up of gas turbines 
 
ASI-Robicon: Installation and start-up of electrical pumps 
 
Banca Intesa S.p.A.: Bank/financial activities; loan exposure 
is 25 mm. euros (loan funded in euros) 
 
Banca Nazionale Del Lavoro: Bank/financial activities; loan 
exposure is 80 mm. euros (loan funded in U.S. dollars) 
 
BFS/SIMIC: Metal barrel production 
 
Danieli & C. Officine Meccaniche: Construction of steelwork 
plants 
 
De Nora: Electro-chemical technologies 
 
Dietsmann Comerint: Technical training services, operation 
and maintenance; won the contract from ENI Iran B.V. to train 
future workers for the South Pars Phases 4 & 5 plant 
 
Duferco: Structural steel trading 
 
Edison International S.p.A.: Oil exploration and hydrocarbon 
research 
 
Ensemble: Representative office for various Italian agencies 
and businesses; not a company 
 
Eni Iran B.V.: Exploration and production of natural gas 
fields; currently working on South Pars Phases 4&5 plant 
 
Fata Engineering S.p.A.: Engineering and architectural 
consulting 
 
Fiat: Manufacturers of various models of Fiat automobiles 
 
 
ROME 00002156  002.2 OF 003 
 
 
Foster Wheeler: Petrochemicals, refineries, oil-gas 
engineering 
 
Mediobanca: Bank/financial activities; loan exposure is 850 
mm. euros (loans funded in U.S. dollars) 
 
Mediocredito Centrale: Bank/financial activities; loan 
exposure is 850 mm. euros (loans funded in U.S. dollars) 
 
Nalco Italiana S.p.A.: Producer of specialty chemicals and 
services for water treatment and industrial process treatment 
 
Nassetti S.p.A.: Ceramics/kiln manufacturers, provides raw 
materials and equipment 
 
Nuovo Pignone S.p.A. (GE): Provides oil and natural-gas 
services, as well as equipment 
 
Pedrini: Provides technology and equipment for marble and 
granite; equipped Stone Factory 2 in Tehran 
 
Saipem S.p.A. (ENI): Engineering; currently constructing and 
installing two below-sea pipelines on behalf of ENI/Agip as 
part of the South Pars Gas and Oil Project 
 
SELI: Tunnel construction; operating in various phases of the 
South Pars Gas and Oil Project 
 
Snamprogetti S.p.A. (ENI): Provides engineering and design 
for petrochemical plants; several projects in the works 
 
Soilmec S.p.A.: Provides drilling and foundation equipment; 
recently outfitted the Mahshahr APC Piling Project, the 
biggest PVC (Polyvinyl Chloride) plant in the world 
 
Sondel (Gruppo Falck): Electricity; currently constructing 
and administering a central electricity plant in Pareh Sar 
 
Tecnimont S.p.A. (Edison): Petrochemicals; currently 
constructing a giant Low Density Polyethylene (LDPE) 
production unit 
 
Technip Italy: Petrochemicals; currently equipping the 
Isfahan Refinery 
 
Unicredit: Bank/financial activities; loan exposure is 20 mm. 
euros (loans funded in euros) 
 
The Energy Sector 
----------------- 
 
¶4.  (U) ENI, which is 30 percent government-owned, has been 
active in Iran since the 1950s, and claims to have invested 
approximately $2.5 billion under service contracts with the 
Iranian National Oil Company (NIOC).  ENI is currently 
participating in the development of phases 4 and 5 of the 
South Pars Oil field.  ENI's construction and engineering 
subsidiaries, Snamprogetti and Saipem, are also providing 
services to South Pars phases 4 and 5.  Other ENI investments 
in Iran are reported ref D. 
 
¶5.  (U) Other Italian firms involved with the South Pars 
Project are: Dietsmann Comerint, which won a contract to 
train future workers for phases 4 and 5 of the plant and 
SELI, involved in tunnel construction for various phases of 
the South Pars Project.  Outside the energy sector, SELI has 
been awarded contracts for the construction of several 
water/irrigation tunnels in Iran. 
 
¶6.  (U) Additional Italian companies active in the Iranian 
energy sector are: Soilmec S.p.A., which recently outfitted 
the Mahshahr APC Piling Project with drilling and foundation 
equipment; Sondel (Gruppo Falck), currently constructing and 
administering a central electricity plant in Pareh; Edison 
International S.p.A., involved with various projects in oil 
exploration and hydrocarbon research; Tecnimont, a subsidiary 
of Edison, currently constructing a Low Density Polyethylane 
(LDPE) production unit in Sanandaj; and Technip Italy, 
currently providing engineering services and equipment to the 
Isfahan Refinery. 
 
¶7.  (U) Italian companies with branches in Iran, but no 
reported current projects, are: De Nora, providers of 
chemical and petrochemical technologies; Ansaldo Energia and 
ASI-Robicon, both of which supply and start up electrical 
pumps; Foster Wheeler, involved in petrochemicals, 
refineries, and oil-gas engineering; Noyvallesina Engineering 
 
ROME 00002156  003.2 OF 003 
 
 
S.p.A., which provides petrochemical, textile, mechanical and 
chemical engineering services; and Nuovo Pignone S.p.A., 
which supplies oil and natural-gas services and equipment. 
 
Telecommunications 
------------------ 
 
¶8.  (U) Alcatel Italia S.p.A. is currently fulfilling an 
agreement made with private Iranian operator ADA (Asre Danesh 
Afzar) to outfit 100,000 DSL lines in Iran by 2007/2008.  We 
know of no other Italian and Iranian partnership in the 
telecommunications sector, except for Finmeccanica's proposed 
sale of Tetra telephone technology to two municipal police 
departments (ref A). 
 
Transportation, Industry, and Manufacturing 
------------------------------------------- 
 
¶9.  (U) Fiat opened phase 1 of its dual-fuel automobile model 
production for the Iranian market in the second half of 2005; 
100,000 vehicles are scheduled to be produced in the initial 
phase, with an additional 150,000 in the second.  Alitalia, 
Italy's state-controlled airline, has a branch in Tehran. 
Alstom Power Italia S.p.A. is an electrical engineering firm. 
 Pedrini, providers of technology and equipment for marble 
and granite, recently equipped Stone Factory 2 in Tehran. 
Nalco Italiana S.p.A. is a producer of specialty chemicals 
and services for water- and industrial-process treatment. 
Nassetti S.p.A. is a provider of raw materials and equipment 
for ceramics and kiln manufacturing.  Fata Engineering S.p.A. 
provides architectural and engineering consulting from their 
office in Tehran.  Duferco's Iran branch is involved in 
structural steel trading.  Danieli & C. Officine Meccaniche 
deals with the construction of steelwork plants.  BFC/SIMIC 
is a metal barrel producer.  All have branches in Tehran. 
SPOGLI