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Financial Times: Gazprom has to stop playing silly games

Published: June 17 2007 16:54 | Last updated: June 17 2007 16:54

Gazprom is playing a twisted psychological game with Britain’s energy companies.

Almost exactly a year ago, the Russian gas monopoly said it was “analysing and reviewing” a bid for Centrica, the UK’s biggest gas supplier.

Centrica’s shares rose 25 per cent to an all-time high. Days later, Gazprom said that its comments had been misinterpreted, even though they came straight from the mouth of Alexander Shkuta, deputy general director.

Last week Alexander Medvedev, Gazprom’s deputy chairman, said that he was close to a deal to increase the company’s market presence in the UK.

Shares in Centrica rose 5 per cent. Hours later, Gazprom said that its comments had been misinterpreted and that it was not looking to buy either Centrica or Scottish & Southern.

Gazprom and Vladimir Putin are clearly obsessed with taking control of the switch which turns Britain’s lights on and off.

Putin’s infatuation was clearly laid out in his doctoral thesis in 1997 which was entitled “The Strategic Planning of Regional Resources Under the Formation of Market Relations” and argued that Russia’s revival as a world power relied on seizing other people’s oil and gas reserves.

But exactly how Gazprom thinks it can secure a stake in the UK gas market in order to supply 20 per cent of households by 2015 without making a big acquisition is baffling.

The only other substantial target is BG – a deal which both Shell and BP have tried to do for more than a decade and have failed because of the company’s consistently high valuation.

For all its macho posturing, all Gazprom has managed to acquire so far in the UK is Pennine Natural Gas, which has around 600 customers. Pennine employs just 12 people in the UK – hardly the path to world domination.

And while the Russians have been teasing their British counterparts, the Spanish have managed to snap up Scottish Power and the Malaysians have built a stake in Centrica.

But if Gazprom wants to be taken seriously as a western shareholder-friendly company then it must put its money where its mouth is and launch a takeover bid.

Otherwise, when it finally does admit its interest in a British energy company and tries to arrange talks, it could find no one is willing to speak anymore.

Copyright The Financial Times Limited 2007

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