G8 energy focus threatens Gazprom monopoly
Alexei Kudrin, Russia’s finance minister, said Russia would allow independent gas producers equal access to its export pipelines – a move that would break the monopoly of Gazprom, its state-controlled energy giant, on gas exports.
Mr Kudrin was speaking to reporters after a meeting of Group of Eight finance ministers in Moscow, which focused on energy security but which most officials present said largely reiterated existing positions in favour of more dialogue and transparency between oil consumers and producers.
Thierry Breton, the French finance minister, repeated his call for Russia to ratify the Energy Charter Treaty, an agreement to ensure security of energy supplies, though acknowledged that Russia was not yet ready. “The whole of Europe has an interest in Russia finding a way of signing this charter,” he said.
The start of Russia’s presidency of the G8 this year was overshadowed by the disruption of Russian gas supplies to Ukraine, which affected other European countries. Mr Kudrin told the meeting that the disruption came from Ukraine taking more gas from the transit pipeline than it should, not a Russian price war with Ukraine.
John Snow, US Treasury secretary, said the Russian explanation of the episode was interesting but declined to express an opinion. “I found that illuminating but I am not an authority on those issues,” Mr Snow said.
Gazprom, Russia’s Russia’s largest and most powerful company which enjoys full support of the Kremlin, on Sunday continued to rule out allowing access to its export pipelines.
Mr Kudrin gave no timing for the liberalisation of Russia’s export pipeline routes. “In perspective, the access to export pipeline will be equal for all [gas producing companies] which win licences to develop new gas fields. I am not prepared to say when (liberalisation of access) will happen, but we are readying ourselves for it.”
Russia has been pressed to allow independent producers to sell gas directly to Europe. Gazprom sells a third of its gas to Europe where the prices are significantly higher than in Russia, which allows it to cross-subsidise the domestic market where prices are regulated by the state.
Mr Kudrin said Russia was also working to improve access for independent gas producers, whose domestic market share has increase severalfold in recent years, to the pipeline within the country.
As Gazprom’s own production stagnated, independent producers, including oil companies, such as Lukoil and Surgutneftegas, filled the gap. But they have no access to the European markets which are monopolised by Gazprom.
Gazprom’s monopoly on export pipelines has held back the development of some giant gas fields, such as Kovykta which TNK-BP, the Anglo-Russian oil company, has a license to develop.
International financial institutions have long argued for the break-up of Gazprom’s monopoly on pipelines, but this has been effectively ruled out by Vladimir Putin, Russia’s president, who has sought to increase the role of the state in the commanding heights of the Russian economy.
Mr Kudrin was speaking to reporters after a meeting of Group of Eight finance ministers in Moscow, which focused on energy security but which most officials present said largely reiterated existing positions in favour of more dialogue and transparency between oil consumers and producers.
Thierry Breton, the French finance minister, repeated his call for Russia to ratify the Energy Charter Treaty, an agreement to ensure security of energy supplies, though acknowledged that Russia was not yet ready. “The whole of Europe has an interest in Russia finding a way of signing this charter,” he said.
The start of Russia’s presidency of the G8 this year was overshadowed by the disruption of Russian gas supplies to Ukraine, which affected other European countries. Mr Kudrin told the meeting that the disruption came from Ukraine taking more gas from the transit pipeline than it should, not a Russian price war with Ukraine.
John Snow, US Treasury secretary, said the Russian explanation of the episode was interesting but declined to express an opinion. “I found that illuminating but I am not an authority on those issues,” Mr Snow said.
Gazprom, Russia’s Russia’s largest and most powerful company which enjoys full support of the Kremlin, on Sunday continued to rule out allowing access to its export pipelines.
Mr Kudrin gave no timing for the liberalisation of Russia’s export pipeline routes. “In perspective, the access to export pipeline will be equal for all [gas producing companies] which win licences to develop new gas fields. I am not prepared to say when (liberalisation of access) will happen, but we are readying ourselves for it.”
Russia has been pressed to allow independent producers to sell gas directly to Europe. Gazprom sells a third of its gas to Europe where the prices are significantly higher than in Russia, which allows it to cross-subsidise the domestic market where prices are regulated by the state.
Mr Kudrin said Russia was also working to improve access for independent gas producers, whose domestic market share has increase severalfold in recent years, to the pipeline within the country.
As Gazprom’s own production stagnated, independent producers, including oil companies, such as Lukoil and Surgutneftegas, filled the gap. But they have no access to the European markets which are monopolised by Gazprom.
Gazprom’s monopoly on export pipelines has held back the development of some giant gas fields, such as Kovykta which TNK-BP, the Anglo-Russian oil company, has a license to develop.
International financial institutions have long argued for the break-up of Gazprom’s monopoly on pipelines, but this has been effectively ruled out by Vladimir Putin, Russia’s president, who has sought to increase the role of the state in the commanding heights of the Russian economy.
posted by Marko at 2/12/2006 09:15:00 AM
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