Putin Decree Boosts Russian Govt Role in Gazprom Probe

Russian President Putin (left) will have a legally greater role in assisting gas giant Gazprom as it is investigated by the European Commission. Photos by EPA/BGNES

Russian President Vladimir Putin has signed a decree enhancing the Russian government's ability to assist major Russian companies under investigation abroad, the Kremlin said on Tuesday.

The decree comes a week after the European Commission launched a probe into three suspected violations of anti-monopoly regulations in Central and Eastern Europe by Russia's biggest company, the gas giant Gazprom.

"First, Gazprom may have divided gas markets by hindering the free flow of gas across Member States. Second, Gazprom may have prevented the diversification of supply of gas. Finally, Gazprom may have imposed unfair prices on its customers by linking the price of gas to oil prices," the EC said last week, RIA Novosti reminds.

Russia's leadership has denounced the probe, which could affect Gazprom's USD 60 B gas export business in Europe.

Russian Prime Minister Dmitry Medvedev vowed last week to discuss the matter "eye-to-eye" with European antitrust officials.

Putin said at a press conference in Vladivostok on Sunday that the probe was "unconstructive" and charged that the EU was trying to shift some of the expense of "subsidizing" developing Eastern European economies onto Russia.

Gazprom could face a fine of up to 10% of its annual revenue - about EUR 10 B - if the suspected violations are substantiated.

The new decree signed by Putin requires "strategic" companies facing punitive actions abroad to coordinate their response with the Russian government.

It also covers the provision of information on company operations and the alteration of foreign contracts and other documents touching upon commercial operations abroad.

Shortly after the announcement of the decree, Gazprom spokesman Sergei Kuprianov said that the probe was an effort by the EC to pressure Russia into lowering gas prices.

In a preview of Gazprom's response to the probe, Kuprianov said the gas giant would no longer offer discounts to its standard gas price without the government's permission and that the company would accelerate its program to boost gas exports to Asia-Pacific markets.

He also complained that the EC had not made any attempt in the past 12 months to open a dialogue with Gazprom concerning unfair competition practices.

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