EU preparing to charge Gazprom in antitrust case

VILNIUS Thu Oct 3, 2013 12:20pm EDT

The company logo of Russian natural gas producer Gazprom is seen on an advertisement in front of the White House in Moscow February 8, 2013. REUTERS/Maxim Shemetov

The company logo of Russian natural gas producer Gazprom is seen on an advertisement in front of the White House in Moscow February 8, 2013.

Credit: Reuters/Maxim Shemetov

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VILNIUS (Reuters) - EU regulators are preparing to charge Russian gas export monopoly Gazprom with abusing its dominant position in central and eastern Europe, the EU's antitrust chief said on Thursday, in a move that could lead to a fine of up to $15 billion.

The European Commission's action against Gazprom (GAZP.MM) is likely to ratchet up the tension between Europe and Russia, which has criticized EU attempts to boost energy market competition and end its over-reliance on Russian supplies.

It could also play into tensions with Russia over the EU's plans to build closer trade ties with six former Soviet republics, including Ukraine. Moscow has threatened to raise Ukraine's gas prices or limit supplies if Kiev signs a free-trade agreement with the EU in November.

The comments by EU Competition Commissioner Joaquin Almunia come after a year-long investigation and raids of several Gazprom units and its clients in central and eastern Europe. Gazprom supplies a quarter of Europe's gas consumption needs.

The EU antitrust regulator said at the time that Gazprom may have hindered the free flow of gas across the EU and imposed unfair prices on its customers by linking the price of its gas to oil prices.

Speaking at a conference in the Lithuanian capital Vilnius, Almunia said the EU's executive was preparing a charge sheet against Gazprom, known as a statement of objections.

"It would be premature to anticipate when the next steps would be taken in this investigation, but we have now moved to the phase of preparing a statement of objections," he told an event organized by the Lithuanian Competition Authority.

He said the investigation covered Estonia, Latvia, Lithuania, Poland, the Czech Republic, Slovakia, Hungary and Bulgaria.

Asked when he would charge Gazprom, Almunia told reporters: "We never pre-commit to deadlines."

A source familiar with the matter told Reuters the Commission planned to take action by the end of the year.

Gazprom said it would not comment on the antitrust case. The company, which generated 4.76 trillion roubles ($148 billion) in revenues last year, could stave off a potential fine by offering concessions to settle the case.

Following previous EU investigations, the company agreed to scrap a clause preventing Austrian energy group OMV (OMVV.VI) and Italy's ENI (ENI.MI) from re-selling gas bought from Gazprom in other markets.

Companies can be penalized up to 10 percent of their annual revenues for breaching EU antitrust rules.

Lithuania, which has complained to the Commission about Gazprom, is claiming almost $2 billion compensation from the company at an international arbitration in Stockholm for allegedly "unfair" gas prices. It pays more for gas than any other EU state, according to the Commission.

($1 = 32.2147 Russian roubles)

(Additional reporting by Nerijus Adomaitis in Oslo and Vladimir Soldatkin in Moscow; Editing by Charlie Dunmore and Mark Potter)

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Comments (2)
UScitizentoo wrote:
> abusing its dominant position
Well that’s what organizations do when they are run by gangsters, criminals and ex-kgb. Any negotiations should take into consideration the possibility that participants be replaced due to death from unexplained falls from open windows.

Oct 03, 2013 10:44am EDT  --  Report as abuse
UauS wrote:
$15 billion… are you kidding me? A few millions in bribes to a few rotten politicians and deal’s done. That’s how Russia (and China for that matter) are expanding “business wise” anyway…

Oct 03, 2013 11:56am EDT  --  Report as abuse
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