CEO: Gazprom is not guilty, its common practice

06.09.2012, 11:29

Raul Kotov, CEO of Eesti Gaas that is co-owned by Gazprom, says that it is difficult to say whether the accusations made by the European Commission against Gazprom of price-fixing are justified because linking the gas price to the price of oil has been a common practice in Europe for a long time, writes Äripäev.

“We understand that this is a follow-up to the actions made a year ago. I have no further comment,” said Kotov, referring to the raid that EU officials made in the Gazprom offices including in Eesti Gaas in September 2011.

Kotov said that he could not comment how the price of gas could be affected if Brussels found Gazprom guilty of price-fixing.

Others in Estonia have remained cautious in their comments about the probe. Minister of economic affairs Juhan Parts said, for instance, that the problem with gas prices in Estonia is that it is not transparent.

“We will be following the activities of the European Commission and possible implications for Estonia closely. Estonian government itself has already been taking steps to bring down the price of gas, but it has not been related to these actions of the European Commission.”

European Commission this week launched a probe to investigate whether Gazprom might be guilty of price-fixing in Europe including Estonia, In its statement, the Commission said on 4 September it has launched a probe into three suspected activities: hindering free flow of gas between EU countries; preventing diversification of gas supply; and imposing unfair prices on customers.

Its case is based on documents snatched in dawn raids last September from 20 Gazprom and Gazprom subsidiary offices in 10 EU countries, including Estonia.

The European Commission said this week Russia's Gazprom might be guilty of price-fixing in Europe including Estonia.

In its statement, the Commission said on 4 September it has launched a probe into three suspected activities: hindering free flow of gas between EU countries; preventing diversification of gas supply; and imposing unfair prices on customers.
Its case is based on documents snatched in dawn raids last September from 20 Gazprom and Gazprom subsidiary offices in 10 EU countries, including Estonia.
Lithuania, which gets 100 percent of its gas from Russia, originally prompted the raids by a complaint to Brussels.

"I can confirm that we have asked the European Commission to look into possible abuse of the European competition rules over unfair pricing and I believe the probe is justified," its energy minister, Arvydas Sekmokas, said on Tuesday.

A lawyer involved in two existing disputes on price-fixing between Gazprom and Lithuania and Gazprom and Poland at an international arbitration court in Stockholm told EUobserver: "They [the EU] might have a case ... Gazprom's [dominant] market position has been an issue for many years."

Gazprom has so far not reacted officially.

But its spokesman, Sergei Kupriyanov, told media by phone: "Let them investigate."
The commission probe could take years to resolve. In theory, it could end with a 10 percent fine of the company's income in the markets where it is found guilty of wrongdoing - a figure in the billions of euros.

The commission's anti-trust department operates independently of its political masters in President Jose Manuel's Barroso's team, with Tuesday's statement underlining the technical nature of the case by citing chapter and verse of EU competition law.

A contact close to Gazprom said the matter "should not be politicised" and that "it wouldn't help at all" to try to influence the EU executive's decision.

But Gazprom has an arsenal of friends in high places to take its side.

Russian President Vladimir Putin himself warned Barroso at two recent summits not to use EU law to try to weaken the Russian state-owned firm's position in Europe.

Former German chancellor Gerhard Schroeder is on Gazprom's payroll.

It pays lobbying firm GPlus, run by former EU anti-trust official Peter Guilford, an estimated 2 million euros a year to plead its views in Brussels.

It also has purported links to Russian intelligence services.

A senior source in Belgium's intelligence service, the VSSE, which is responsible for protecting the EU institutions from foreign spies, told EUobserver that Russian espionage activity in the EU capital is at the same level as the Cold War, with a special focus on EU energy policy.

Another contact, a senior EU official, said in a separate interview: "Gazprom is not a normal company in the European sense of the word."