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Enel CEO says rise of CO2 emission indicates Kyoto failure

The continuing rise of carbon dioxide emissions are an indication the Kyoto Protocol is basically ineffective because it lacks greater global participation, the chief executive of Italian utility Enel SpA said at a the International Energy Forum.

The Kyoto Protocol is not working in part because signatories to the agreement account for only 30 percent of total emissions, only a few sectors bear the brunt of the reduction and technology transfer is not being given sufficient importance, Fulvio Conti said in a speech.

Conti also said that reciprocity should be encouraged between the companies of energy-consuming countries and those of producing ones.

"With this perspective, Enel is committed to opening a portion of its domestic market to Gazprom,'' Enel's CEO said in his speech Sunday.

Government ministers from oil-rich nations and international oil company executives were meeting in Rome for a three-day energy conference that ends Tuesday.

While the energy ministers of most OPEC states will be present, the group was not expected to announce any policy shifts during the International Energy Forum, which was being held as crude oil prices have reached a new high of US$117 a barrel.

Italy's outgoing development minister, Pier Luigi Bersani, told the conference in his opening remarks Sunday that the high price of oil will have an impact on inflation for all of 2008.

"The price of oil has had an impact on the inflation dynamic in many countries and it is reflected in part also on food stuffs in general,'' Bersani said. "This dynamic will persist for all of 2008.''

Earlier, Eni SpA Chief Executive Paolo Scaroni said that the share of profits taken by governments of oil-rich countries is cutting international oil companies' profits, in some cases below their capital costs.

"The average government take is now moving to overcome the critical barrier of 90 percent, which means that oil companies' profitability is decreasing,'' Scaroni said.

Western oil majors have had to face a spate of re-negotiations of their contracts as hydrocarbon-rich countries aim for a bigger slice of profits on the back of surging crude prices.

International oil companies need to "profoundly rethink their business model in order to survive and prosper,'' Scaroni added.

On the sidelines of the conference, Eni signed a memorandum of understanding with Qatar Petroleum International to pursue key joint projects in Africa and the Mediterranean focusing on natural gas and crude oil. It also envisions cooperation in the petrochemical industry and power generation.

It is the latest in a string of deals by Eni _ Italy's biggest oil and gas company _ to expand its ties with state-run oil companies.

Eni recently signed new deals with companies in Venezuela and is intensifying its ties with Gazprom. Late last year, Eni reached a deal with the Libyan government to jointly develop oil and gas projects in the North African country and extend existing contracts.

Eni pulled out of Qatar in 2002, saying it was too expensive to operate, but Scaroni said the "mistake'' had been rectified.

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