Translated material
The fruits of enlightenment
Deputy Chairman of Gazprom called on the West to comply with market principles
Gazprom executives remain frequent and, apparently, welcome guests in Germany. At the end of last week, on the eve of Chancellor Merkel's visit to Moscow, the head of the company, Alexei Miller, visited here. And yesterday, Deputy Chairman of the Board of Gazprom Alexander Medvedev was in Berlin. Immediately after speaking at the final meeting of the energy congress of the business newspaper Handelsblatt, he went to Essen for negotiations with the management of E.ON Ruhrgas. As Mr. Medvedev told Vremya Novostei, we will talk about the construction of the North European Gas Pipeline and the exchange of assets in the field of gas production and distribution. Let us recall that E.ON Ruhrgas is claiming a share in gas production at the Yuzhno-Russkoye field, and Gazprom is interested in gaining access to gas assets in Hungary, which the German concern recently acquired from MOL. “We are having an intensive exchange of views on this matter with our German partners from Essen,” said Mr. Medvedev. -- We are pleased with the progress of negotiations with representatives of E.ON Ruhrgas. We have a successful long-term partnership.”The report of the deputy chairman of the board of Gazprom was awaited with particular interest. The public's primary focus was on the causes and consequences of the recent Russian-Ukrainian gas war. Here they were pleased with the achievement of a compromise solution between Russia and Ukraine, which brought a truce in the recent gas war. However, how durable is this peace? Will new tensions arise in the next one or two years? This question, which worries many Europeans, was asked to Mr. Medvedev by Handelsblatt editor-in-chief Bernd Ziesemer. The guest from Moscow assured the forum participants that the underlying gas problems between Moscow and Kiev have now been successfully resolved. This is guaranteed by a bilateral agreement concluded for five years.
Having assured the Europeans that Gazprom’s main thoughts were, are and will be aimed at their uninterrupted supply and thereby fulfilling its partnership duty, Mr. Medvedev continued, as it seemed, to carry out the order of Vladimir Putin, who recently complained about insufficient explanatory work with the European public regarding Russia's position. Firstly, he emphasized, all actions of the Russian side in this conflict were subordinated to one single goal: by calling on transit intermediaries to order, to ensure an even more reliable supply of natural gas to Western Europe - based, of course, on market norms and principles.
And then he launched a counterattack. The deputy chairman of Gazprom chided the West for its “neutrality” during the latest Russian-Ukrainian crisis. “After all, the West should profess market values, but we have not heard it demand that Ukraine comply with the rules of conduct on the market,” Mr. Medvedev explained his complaints. He recommended for the future - not only to Western politicians, but also to journalists - not to rely on “hard facts”, but to strive to get rid of any threats and risks along the route of Russian gas supplies to Europe. “We intend not to destroy, but to cement the existing system,” the Gazprom top manager emphasized. According to him, the concern is on the way to becoming the largest energy company in the world.
Mr. Medvedev’s main opponent on the issue of protecting market values in the post-Soviet space was Fatih Birol, an expert at the International Energy Agency from Paris. He expressed the opinion that with its rash actions, Gazprom only cast a shadow on its own reputation. And as an argument he used his favorite argument: the non-market nature of domestic Russian gas prices. The deputy chairman of the board of Gazprom reasonably remarked on this: “We can afford it, because our consumers do not have to transport gas over such long distances as to Western Europe. Therefore, the price is cheaper.” These accusations looked especially ridiculous, given that Gazprom is asleep and sees the liberalization of gas prices in Russia and even tried to lobby for the abolition of regulation from January 1, 2006. Therefore, Mr. Medvedev was pleased to promise that by 2010 prices for domestic Russian consumers will increase significantly (according to the energy strategy and agreements with the EU within the framework of accession to the WTO, the price should increase to $64 per thousand cubic meters).