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FACTDROP: Gazprom and the European imbroglio
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1/20/2013

Gazprom and the European imbroglio


Πηγή: Europolitics
By Marie-Martine Buckens
Jan 18 2013

The presence of the Russian giant Gazprom on the short list of companies selected by the Greek privatisation fund as potential buyers of the Greek gas company DEPA is still a hot topic of debate (see Europolitics 4563).The Financial Times reported, on 10 January, that the EU and the United States had cautioned against seeing the Greek economy controlled by Russian interests, while a Commission spokesman, interviewed byEuropolitics on 17 January, simply stated that “the Commission, in the framework of the World Bank, IMF and EU troika, is in permanent contact with the Greek government and the privatisation fund in particular on the privatisation of DEPA and its subsidiary DEFSA”. He added that the executive “is aware that while the privatisation fund has not yet finalised its selection process, the acquisition of DEPA and/or DEFSA will have to comply fully with competition rules in force in the EU single market”.

The fact remains that Gazprom’s intrusion in Greece adds to the Russian firm’s image of dominant position, already fuelled by the anti-trust procedure launched against it by the Commission last September.

INTERVIEW WITH AURÉLIE BROS

Things are not quite that straightforward, according to Aurélie Bros, doctoral candidate in geopolitics at University Panthéon-Sorbonne and at the Russian Academy of Sciences. For this researcher, co-author with Yann Richard of a study entitled ‘Les stratégies de Gazprom: un problème géopolitique?’ (‘Gazprom’s strategies: A geopolitical problem?’), the company’s relations with the EU should be analysed in the light of the structural divisions that can be observed in Europe and not as a head-on confrontation between the EU and Gazprom or even between the EU and Russia. There is no real consensus for now on the position to take towards Gazprom, whether at European or national level, or between energy firms. But above all, she adds, it is important not to mask the strategies of large European firms that participate in steering this dialogue with the Russian firm by setting up consortia, common projects and so on.

In your 2011 study (1) , you highlight the fact that European gas companies find themselves caught between EU legislation, in particular the third energy package, and their need to carry out profitable operations.

The energy sector has been built on vertically integrated companies that operate primarily on national markets. At present, EU legislation and particularly the third energy package has prompted these firms to reconsider their strategy, organisation (separation of certain activities), etc, since the EU’s aim is to create a single market. This phase of adaptation for energy companies has created tension.

This tension is not limited to differences of views between the EU institutions and companies, which have to combine strategy and compliance with internal market rules. It is very difficult to build consensus in the energy sector and there is multi-scale opposition. It can be seen within member states. Take the case of Germany, for example, where the phase-out of nuclear power is still giving rise to many questions. There are also divisions between member states, divisions stemming from history, geography, etc. The Western EU countries do not have the same position on Gazprom or Russia as the Central and Eastern European member states. And there are many more examples. This accumulation of divisions that are not always directly perceptible confuses the issue, with the result that the foreign partners, in this case Russia, sometimes have trouble analysing and understanding the European market.

What is your analysis of the policy implemented by the EU institutions, the Commission in particular?

Within the Commission there are also different ways of addressing the problem. That is the case for the anti-trust procedure initiated last September against Gazprom. It was launched by DG Competition, whose role is to guarantee fair competition.

In parallel, DG Energy tends to focus more on establishing and strengthening dialogue with external partners, for instance with its negotiation of the EU-Russia road map until 2050, aimed at setting up a stable and lasting energy sector dialogue between the EU and Russia.

How do you analyse developments in the Southern Corridor gas negotiations?
This is a key project for the European Commission, aimed at supplying Europe with gas resources from the Caspian Sea (Shah Deniz). The negotiations have not been completed but it is certain that the Nabucco project in its initial form will not come into existence. It is more likely that there will be a smaller, mixed project. The EU’s support is primarily political, yet in the final analysis it is companies that will have to put up the money. The case of Nabucco – backed by the EU – is exemplary. It turned out that the project was no longer profitable and that gas supply was uncertain, since Iran cannot be considered as a potential supplier. The Russians wish to circumvent Ukraine after the tension that occurred in 2009 and will build the South Stream gas pipeline, a project that does not form part of the Southern Corridor.

How do you explain that, in contrast with Gazprom, there are no European companies on the list of possible buyers of the Greek public gas company?

Good question. I can only say that Greece has a very advantageous geographical situation. The country is close to Turkey, through which gas from Azerbaijan will likely be delivered, but also to Israeli and Cypriot gas fields. Gazprom will have to comply with the separation of gas production and distribution activities required under the third energy package. In the case of Greece, the distribution aspect is important. The companies are positioning themselves either on the production aspect or on distribution. Gazprom seems to be giving priority to distribution.“The Western EU countries do not have the same position on Gazprom or on Russia as the Central and Eastern European member states” 
 
(1) The study is available here


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