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Gazprom: Europe should not fear Russia


Gazprom: Europe should not fear Russia

Mon Sep 8, 2008 9:56am EDT

By Guy Faulconbridge and Michael Stott


MOSCOW (Reuters) – Europe has nothing to fear from dependence on Russian gas even though at least a third of its gas will come from Russia by 2015, Gazprom (GAZP.MM: QuoteProfileResearchStock Buzz) Deputy CEO Alexander Medvedev told Reuters on Monday.

Leaders in the European Union have long been worried by growing dependence on Russian gas supplied by Gazprom but the EU has come up with few solutions.

“In spite of the simple fact that Europe needs additional gas, some political circles are trying to play the card of the dependence of Europe on Russian gas as …a threat to Western Europe, which is absolutely absurd, because we are mutually dependent,” Medvedev told the Reuters Russia Investment Summit.

Western politicians say the issue was highlighted last month when Russia fought a war against Georgia, which hosts the only oil and gas pipelines bringing supplies westwards from the Caspian without crossing Russia.

But Medvedev lashed out at what he termed “comic book” statements by some Western politicians that cooperation should be limited because of Russia’s actions in Georgia.

“To say ‘Let’s prevent Russian investments in Europe’ is like a comic book: If Russia invests somewhere, (it is suggested by some that it is doing so) just to switch off the gas, oil or water or whatever,” Medvedev told Reuters.

“Sometimes it looks like it was orchestrated. Some people, they are hostage to the wrong concept that a strong Russia is not good for international relations. I personally believe the opposite.”

Medvedev said European dependence on Russian gas will rise over the next decade, with Russian gas making up “at least” one third of European consumption by 2015 from 26 percent now. 

But calls for limiting cooperation or creating barriers to Russian investment missed the point that Russia and Europe were mutually dependent and that there are massive investment opportunities for both sides, he said.

Russia wants to diversify its dependence on Europe for the bulk of its gas sales by selling more hydrocarbons to the swiftly expanding economies of Asia, such as China.

Medvedev said Gazprom expects to conclude pricing talks with China next year to start gas deliveries in 2013-14.

He also said Gazprom had made a proposal to buy Azeri gas, a step that would directly rival a European project known as Nabucco, which is run by a consortium led by Austria’s OMV (OMVV.VI: QuoteProfile,ResearchStock Buzz).


Gazprom, Russia’s most powerful company, is at the centre of the Kremlin’s drive to revive Moscow’s geopolitical clout as an energy superpower.

Created on the basis of the Soviet Gas Ministry, the Kremlin has transformed Gazprom into a company with a market capitalization of $205 billion. Gazprom is 51-percent state owned and private investors hold the rest.

President Dmitry Medvedev, who is no relation of the deputy CEO, served as Gazprom board chairman for five years while Prime Minister Vladimir Putin is closely involved in negotiations on Gazprom’s international expansion.

“Energy policy is inevitably on the agenda of the president and the prime minister,” Gazprom’s Medvedev said. “But it is a very naive idea that Gazprom is managed by a call from the Kremlin or from the White House.”

The Kremlin has been very sensitive to what it says are attempts to create barriers to Russian investment abroad, especially after the Georgia conflict.

“We hear these voices saying there should be barriers created for Russian both private and for such companies as Gazprom with mixed capital,” Medvedev said.

“We hope the answer of business will …not go this way, because it will negatively influence not only economics but also politics.”

Medvedev singled out Canada for criticism, saying Gazprom had been surprised by statements from Canadian Prime Minister Stephen Harper that its commercial natural gas deals with Russia could be put at risk.

Medvedev also accused Georgia of limiting Russian gas supplies to South Ossetia, the rebel region where the war with Georgia started early in August.

“We should not forget, and no-one wrote about this, that gas continued to flow to Georgia and continues to flow now,” he said. “Georgia is not allowing gas to be delivered to South Ossetia.”

(Additional Reporting by Yekaterina Golubkova, Dmitry Zhdannikov, Anastasia Onegina and Tanya Mosolova)

(Editing by Jason Neely)


© Thomson Reuters 2008. All rights reserved.
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