European Commission toughens its stance against Gazprom

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An EU probe against Gazprom is moving ahead as regulators are preparing to charge the Russian gas export monopoly with abusing its dominant position in Central and Eastern Europe.

The spokesman for Competition and for Vice President Joaquín Almunia told New Europe on 3 October that “the investigation is ongoing. It is premature to anticipate its outcome”.

“As Mr. Almunia said today, it would be premature to anticipate the timing of next steps that might be taken. He also confirmed that the Commission is currently preparing a statement of objections,” Antoine Colombani said.

He was referring to the EU’s antitrust chief speech at a conference earlier in the day in the Lithuanian capital Vilnius where Almunia said the EU’s executive was preparing a charge sheet against Gazprom, known as a statement of objections. The event was organised by the Lithuanian Competition Authority. Almunia said the investigation covered Estonia, Latvia, Lithuania, Poland, the Czech Republic, Slovakia, Hungary and Bulgaria.

Colombani also said that there are no deadlines in EU antitrust investigations.

The probe could reportedly lead to a fine of up to $15 billion. But the spokesman for Competition and for Almunia said that regarding fines, under the EU Antitrust Regulation (1/2003) the Commission may impose a fine up to 10% of the annual global turnover of the company if it is confirmed that it infringed Treaty antitrust rules.

“However, this is a legal maximum and not an indication of the possible fine that could be imposed in any given case,” Colombani said.

On 3 October, Gazprom Information Directorate told New Europe, “We would not like to respond to the press statements, but only to particular documents”.

Gas price disputes between Gazprom and Ukraine, whose pipelines carry the bulk of Russia’s gas to European consumers, have caused disruptions to energy supplies to Europe. Any action by the European Commission to impose fines on Gazprom is likely to increase the tension between Europe and Russia, which has criticised Brussels’ attempts to reduce its reliance on Russian supplies. Moscow has also slammed the EU’s Third Energy Package.

The EU antitrust regulator said that Gazprom may have imposed unfair prices on its customers by linking the price of its gas to oil prices.

Almunia said Lithuania, a former Soviet republic which holds the rotating EU Presidency, was one of the early countries lodging a complaint against Gazprom though the investigation has extended across much of the Baltic region.

“We suspect that Gazprom has been hindering the free flow of gas across member states [of the EU] and the diversification of sources of supply,” he said in his speech on 3 October.

Lithuania is claiming almost $2 billion compensation from the company at an international arbitration in Stockholm for allegedly “unfair” gas prices.

Europe is trying to break the Russian grip on its regional energy sector by promoting the Southern Gas Corridor that will bring gas supplies from the Caspian region to Europe, bypassing Russia. A year ago, the European Commission escalated its push to break Russia’s domination of EU’s natural-gas supplies by launching a probe into its gas supply practices, following raids on the company’s offices in September 2011. But Gazprom may have the last word.

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Co-founder / Director of Energy & Climate Policy and Security at NE Global Media

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