Putin expresses concern over Gazprom raids

3rd October 2011, Comments 0 comments

Prime Minister Vladimir Putin warned EU nations on Monday that Russia would be carefully monitoring an unprecedented anti-trust probe launched against its powerful natural gas monopoly Gazprom.

The cautionary comments marked Putin's first response to a high-stakes dispute that threatens to dominate Russian-EU relations on his expected return to the Kremlin after a 2000-2008 presidency in March.

Gazprom had previously confirmed the offices of its trading partners and subsidiaries being searched -- and documents seized -- in the EU's most forceful response to a growing European outcry over alleged price collusion.

But Russia's richest and most strategic company said little else about the raids in an apparent attempt to play down the impact of a probe that could alter how Europe pays for nearly a third of its natural gas.

That relative silence was broken on Monday when Putin received Gazprom chief Alexei Miller for a rundown on his efforts to boost European exports and expand sales beyond its traditional markets.

"The Russian government will be carefully monitoring what is happening around Gazprom. I ask you to report on this in a timely manner," a stern-faced Putin told Miller in nationally-televised remarks.

The former KGB colonel then demanded to know whether EU nations had arrested any Gazprom or other officials as part of their raids.

"No, Vladimir Vladimirovich, they have not arrested anyone yet," Miller replied in comments that lead Russian state TV news.

"Thank God," Putin replied in an apparent effort to underscore the importance he personally attached to the case.

The EU probe culminated weeks of grumblings from Russia's top clients and put Gazprom -- its growth stalling and competition from North Africa and other suppliers gathering pace -- under the sort of pressure it has not seen in years.

The EU's executive commission also warned reluctant member states to proceed as required with liberalising their markets, the painstaking task of forcing firms with control of both pipelines and production to break up their holdings.

That campaign has coincided with renewed war of words between Russia and Ukraine and a weekend decision by Gazprom's second-biggest client Turkey not to renew an expiring contract it has held since 1986.

The European raids came after German and other EU firms threatened to seek arbitration aimed at reducing the price set in long-term Russian contracts that are now more expensive than the spot price of gas.

Miller said nothing of the pending court cases but called the searches "completely unexpected".

"They came as an unpleasant surprise," Miller said.

Putin has attached his name closely to Russia's bid to cement its dominance of the European gas market and thwart alternatives such as the Nabucco pipeline being promoted by the United States.

Nabucco's Russian competitor South Stream hopes to start funneling gas by 2016 while its Nord Stream counterpart under the Baltic Sea will unload its first deliveries in Germany on November 8.

"We are working according to schedule," Miller said in reference to the South Stream project that was initially launched with Italy's ENI and now includes partners from Germany and France.

Miller said Gazprom was also pushing ahead with plans to complete a second Nord Steam line running parallel to the first that will double the link's total capacity.

"We have already built 700 kilometres (435 miles) -- this is about 60 percent," Miller said.

Putin also instructed the Gazprom chief to quickly report back with proposals to expand ties with the still largely-untapped markets of Japan and South Korea.

© 2011 AFP

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