Is Gazprom’s strategy political?

DISCLAIMER: All opinions in this column reflect the views of the author(s), not of EURACTIV Media network.

Europe’s perception of Gazprom as “a political weapon of the Kremlin” is wrong, according to top Gazprom executive Alexander Medvedev. Writing in the June edition of Europe’s World, he argues that the European Commission’s energy thinking is a “cause for concern”.

Medvedev claims that Gazprom – which controls a third of the planet’s gas reserves – is perceived by the EU as “an instrument of Russian foreign policy”. 

Meanwhile, he finds it “puzzling” that Europe sees Gazprom’s higher gas deliveries as a threat to the Union’s security. The bloc’s main argument is that the company would “disrupt them [EU energy supplies] for political reasons,” something he believes is “absurd”. 

Medvedev believes these “stereotypes” are generated because Europeans fail to understand both the facts and Gazprom’s corporate strategy. He describes Gazprom as a “commercially driven company” which aims to provide reliable long-term supplies. He explains that the “controversy” over Ukraine and Belarus arose over pricing, with some “partners” unwilling to pay their invoices. 

Referring to the Commission’s ‘Third Energy Package’ proposal to change the structure of the gas market, Medvedev says the EU intends to enhance investments in “cross-border transmission systems so as to ensure security of supply”. 

This measure would privilege “secondary traders and speculators over market players who actually have access to gas resources,” he believes, questioning the idea as it raises the issue of property rights violations. 

To conclude, he argues that Russia is more dependent on Europe than the other way around, putting forward a number of reasons for this: 

  • EU investment in Russia is 7-8 times higher than Russian investment in Europe; 
  • Several EU companies have important stakes in the Russian energy sector, including Germany’s BASF and Italy’s ENI, and; 
  • In the Russian crude oil sector, more than 50% of production is in the hands of private or foreign companies. 

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