Putin’s measure bans strategic companies from disclosing information, disposing of assets or amending contracts without government approval in case claims are made by foreign states or entities, the president’s office said in an e-mailed statement from Moscow today.
The Russian leader on Sept. 9 warned the EU, which relies on Russia for a quarter of its gas needs, that there would be “losses on both sides” if the issue isn’t resolved. He accused the 27-nation bloc of trying to shift responsibility for subsidizing former communist EU members onto Russia by forcing Gazprom to cut prices for customers in eastern and central Europe.
“The government wants to protect Gazprom from the attacks,” Sergey Vakhrameev, an analyst at IFC Metropol, said by phone from Moscow. “This is a way of showing the EU that they should be talking to the government directly, resolving the issue at a higher level.”
The EU’s competition chief, Joaquin Almunia, said today that Gazprom’s long-term supply contracts linking gas prices to oil prices may no longer be justified because of the emergence of a spot market for gas and increased supplies of shale gas.
Gazprom, the world’s largest gas exporter, faces a potential $14.5 billion penalty as companies found to violate EU competition rules can be fined as much as 10 percent of annual revenue. The European Commission is investigating whether Gazprom imposed unfair prices by linking gas and oil prices, preventing gas trading between countries and hindering the diversification of supply.
Gazprom sees the EU investigation as pressure to reduce gas prices and it won’t give discounts without Russian government approval, the company’s spokesman, Sergei Kupriyanov, told reporters in Moscow today.
Gazprom shares pared losses, closing down 0.6 percent today in Moscow after earlier dropping as much as 0.9 percent.
Russia’s government will start negotiations in the next few days with the Brussels-based commission, the EU’s executive arm, Deputy Prime Minister Arkady Dvorkovich said.
“We believe that we should act based on economic considerations rather than politics, so we need to find a win- win solution rather than give any preferential treatment to anyone at the expense of Gazprom’s investment program,” he said in an interview in London today.
Antoine Colombani, a spokesman for the commission in Brussels, declined to comment on the Russian decree.
While Gazprom has yielded to pricing demands from German and French customers, it has conceded little to countries further east such as Hungary, Slovakia and Poland, which are largely dependent on Russian supplies, according to Patrick Heren, a London-based consultant.
“It clearly puts the energy relationship under further strain,” Julian Lee, a senior analyst at the London-based Centre for Global Energy Studies, said by phone. “The European market is one that Russia has been serving for a very long time. It has very significant relationships there and it wouldn’t be in Gazprom’s interests any more than it would be in Europe’s for that relationship to fall apart completely.”
Concern about dependence on Russian gas in Europe was heightened after supplies were twice interrupted since 2006 due to disputes between Russia and Ukraine over pricing and transport costs. People in at least 20 countries lost heat for about two weeks in freezing temperatures in January 2009.
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