The Guardian: Gazprom targets key UK names in drive for expansion

EXTRACT: More recently, Gazprom has caused unease because it has pushed its way into a lucrative Shell gas project on Sakhalin Island in the east of Russia after the Anglo- Dutch company came under atttack from the state over alleged environmental violations of its operating licence.

THE ARTICLE

Terry Macalister
Thursday April 12, 2007

The Russian gas group, Gazprom, is making a determined effort to increase its influence in Britain by targeting landmark buildings as customers. It has started supplying power to York Minster, Headingley cricket ground and the City Point tower in London. Other targets include the National Health Service as it seeks to increase market share in Britain from 2% now to 10% by 2010.

The energy company, whose chairman is Dimitry Medvedev, the first deputy prime minister of Russia and a presidential hopeful, has also stepped up its lobbying efforts in the UK with the appointment of a high-profile public relations executive who successfully sold the concept of new nuclear plants to New Labour.

And the company made clear in an interview with the Guardian that it has not given up hopes of buying a big company in the UK, such as British Gas.

The moves have caused unease within industry circles which fear the growing corporate muscle of Gazprom amid wider concern that energy is being used by Vladimir Putin, Russia’s premier, as a tool for expanding political influence abroad.

Gazprom told the Guardian yesterday that the retail business it bought last year, Pennine Natural Gas, had expanded its customer base threefold since it took charge and confirmed it was targeting high-profile customers and buildings in London and elsewhere.

The Major Energy Users Council said many of its members had been offered good deals to switch their supplies to Gazprom. The restaurant chain Chez Gerrard, retail stores group Bhs and Sunderland football club have all recently become clients.

The upsurge in activity comes as Russia’s largest company has hired Philip Dewhurst as a lobbyist. Mr Dewhurst is a former director at Lord Bell’s Bell Pottinger group and until recently was chairman of the Nuclear Industries Association. Andrew Bainbridge, director general of the Major Energy Users Council, said Gazprom continued to be “feared and distrusted” by many because of its links with Mr Putin. “There is a big question mark over how Gazprom goes about its business,” he said.

Gazprom has opened a Gazprom Marketing and Trading subsidiary in Britain based in an office block at Kingston-upon-Thames, south-west London. Countries such as Germany get 40% of their gas from Russia, and Slovakia 100%. There has been concern that Europe could become too dependent and face being held to ransom, as effectively happened to Ukraine which had its gas supplies halted in January 2006 in a price row.

More recently, Gazprom has caused unease because it has pushed its way into a lucrative Shell gas project on Sakhalin Island in the east of Russia after the Anglo- Dutch company came under atttack from the state over alleged environmental violations of its operating licence.

BP has faced the same attacks on its Kovykta field in Siberia amid moves by Gazprom to take a stake there too. There are wider worries that the Kremlin would like to buy the 50% stake held by Russian private investors in TNK-BP, the British company’s main operation over there.

http://www.guardian.co.uk/russia/article/0,,2055099,00.html

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