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Financial Times: Gazprom has to stop playing silly games

By Lina Saigol
Published: June 18 2007 03:00 | Last updated: June 18 2007 03:00

Gazprom is playing a twisted psychological game with the UK’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 that turns the UK’s lights on and off.

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

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 Group – a deal that 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, in Wilmslow, Cheshire, which has about 600 customers. Pennine employs just 12 people in the UK – hardly the path to world domination.

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 UK 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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