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Russia’s Gazprom Slams Probe With EU

Sept. 10, 2012
The EU revealed last week it had launched the probe over concerns that Gazprom was hindering competition in Bulgaria, the Czech Republic, Estonia, Hungary, Latvia, Lithuania, Poland and Slovakia.

Gazprom OAO (IW 1000/16) on Monday said a European Commission probe over the Russian giant's controversial gas pricing and trade policies was disingenuous and that the company would discuss the allegations with the EU.

"There is a saying -- a thief's hat tends to catch fire," the world's largest natural gas company's deputy head Alexander Medvedev said using an idiom referring to an unwitting expression of guilt.

"In this case, it should be burning on the head of the European Commission," he was quoted as saying by Interfax.

Medvedev added that he intended to raise all of Russia's concerns and vigorously defend its policies during an upcoming meeting with a top European Union anti-trust official.

"I intend to meet with the deputy of the European Commission's competition commissioner" Joaquin Almunia, he said, without specifying who the Brussels official would be. "We will discuss all the issues eye to eye," he said, without mentioning an exact date for the meeting.

Russian President Vladimir Putin on Sunday denounced the anti-trust inquiry launched by the European Union as "unconstructive."

The EU revealed last week it had launched the probe over concerns that Gazprom was hindering competition in Bulgaria, the Czech Republic, Estonia, Hungary, Latvia, Lithuania, Poland and Slovakia.

The investigation is focused on Gazprom's use of long-term contracts to lock in prices that are tied to that of oil -- a policy that often leaves its supplies far more expensive than those available on the open market.

Officials in Brussels also suspect Gazprom of preventing its clients from selling supplies they do not need to their neighbors -- a policy aimed at stifling European competition and underpinning demand for Gazprom's own gas.

Russia's largest company produces about 15% of the world's natural gas and accounts for more than a quarter of Europe's consumption.

Medvedev said Gazprom itself suffered from EU competition rules that forced it to divest legally-acquired European pipeline and refining assets.

"As far as the claim of us abusing our dominant position -- we strictly follow the letter of the contracts," said the Russian company's number two.

"All the requests for changes in pricing have to be justified," he also stressed.

Copyright Agence-France, Presse, 2012

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